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Transformation and Integration in the Mediterranean – Choices to Consider Mats Karlsson, Director, Center for Mediterranean Integrationi Marseille, 4 April 2011 The Arab Democratic Spring opens opportunities for long awaited economic and social progress. The untenable gaps have long been visible.ii Reforms have been held back by poor government. The private sector has been stymied by the constraints of privilege rather than boosted by the creative forces of competition.iii Gaps within and between countries became increasingly unacceptable to a young generation aware of what is possible and tired of waiting. Efforts of reformers and external support did in the past years bring some change in Egypt, Morocco and Tunisia, but not in ways that delivered fruits in pace with growing demand. Reforms were shown not to be adequate, comprehensive or effective enough – and in their own way they may have contributed to intensifying the untenable nature of the situation.

The flipside of this is the potential for change and catch-up. While creating new jobs rapidly is a priority, success will not come easily. However, it is possible to outline the general focus and nature of choices to make. Persevering with transformational reform, where effects may take years, while people want rapid results, will be a major political challenge.

While more, decent and better paying jobs is the one overall objective – nothing is more empowering than a job, nothing shows successful competitiveness better than the creation of new jobs – it was dignity that was the most potent word at the beginning of this Arab Spring. Repeated again and again it marked the character of the protests. While issues of democracy, human rights and constitutional change are rightly priority, dignity – as in empowerment over the future – necessarily has to be realized over a broad complementary set of economic, social and environmental areas. What is apparent is that in most of them transformative change is intrinsically linked to integration.

The intensity of interdependence today is such that local and national change can only succeed if it embraces integration in a much more focused way than before. While there are many geo-economic dimensions – across the Arab world, Africa and the globe – economic, historic and people-to-people relations suggest that Mediterraneaniv integration, with the European Union as a major anchor, is the necessary framework to deepen and renew. Five hundred millionv people live in the region around the Mediterranean, with an economy of about $5 trillionvi and a growth rate of 2.2%.vii Here is where both the new orientations of reform and external actors need to consider embracing new levels of ambition.

The macro-economic environment presents serious challenges, and thus there are limits on the availability of finance for reform and investment. Egypt and Tunisia, but also Morocco, Lebanon and Jordan must deal with immediate pressures, such as drops in foreign direct investments, exports and tourism. Fiscal pressures will increase. While every effort should be made for early recovery, the external environment cannot be expected to be greatly conducive, given the high oil price and sluggish recovery in Europe. Financial sector reform should help to channel available capital to businesses more effectively than in the past. Fiscal reform, particularly redirecting „blind subsidies‟ to alleviate poverty or achieve 1

social gains, is a major option. However, increased external support is essential. The European Union should consider matching its earlier successful efforts to integrate Southern, Central and Eastern Europe.

It is a historic win-win situation, which carries an upfront price tag. A Mediterranean Economic Area, drawing on earlier lessons from Europe, might complement current bilateral and regional agreements and new ideas.

We highlight here twelve areas for transformative reform under the headings of Empowerment; Employment, Entrepreneurship and Equity; and Integration. Under each heading we note some facts and priorities, and offer some suggestions, both policy choice and program orientation. They are by no means an attempt to be comprehensive – in particular they do not address the immediate democratic or macro-economic challenges – but speak from our angle of engagement at the CMI, current or possible.

They are meant as impetus to the agenda debate and choices to consider.

Empowerment 1. Use the Capacity of the Youth Four out of every 10 among the Arab Mediterranean Countries‟ 180 million people are between the ages of 15 and 34. Of these, 15% of men and 47% of women, equal to some 20 million young people, are neither in the educational system nor in the job market.viii If the work aspirations and creative strengths of the youth can be freed, the potential for economic growth, social cohesion and human fulfillment cannot be over-estimated. On the contrary, not investing in young people, in particular not creating the required jobs for them, will make youth more vulnerable and at risk of being marginalized – creating idle citizens who are subject to negative societal phenomena and will require substantially higher investments to recover. Therefore, youth should be seen not as a threat or a burden, but rather as a potentially transformative generation that can drive growth and development in the region for decades to come. 

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Promote civic participation for real. Governments need to understand much better what the concerns of youth actually are, use surveys, IT and social media both as sources of information and interaction, and create national policies that are met with trust. The CMI/Arab League/AFD conference on Youth in April 2010 pointed a way.

Provide livelihood opportunities. While special programs cannot replace national employment strategies, there is international experience of scalable youth programs, whether based on promoting community service or encouraging the transition to small businesses. The idea of a Mediterranean Youth Voluntary Service could help skills development.

2. Free the Potential of Women Gender inequality – the differential access to opportunity and security for women and girls – is a much more primordial issue for economic development and social justice than has ever been recognized by real action. MENA falls considerably short on indicators of women‟s economic participation and political empowerment. Women‟s presence in the political arenas and their influence on public policy are more limited in MENA than in any other region. ix Women remain a largely confined and untapped resource in the region. The region accounts for the world‟s largest gender gap in unemployment, with rates far higher for young women than young men.

While in Tunisia they make up as much as 63 percent of university students, overall in MENA they represent only 28 percent of the labor forcex, one third that of men, with a widely accepted view that these 2

rates are attributable to social norms and disadvantageous policies. Changing marriage patterns and family concerns should take a central position in determining policy recommendations.

Consequently, there is a dire need for a new major gender agenda. 

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Promote greater inclusiveness of women in decision-making, and greater accountability of public institutions to advance fairness and equality. Review the legislative environment to provide consistency between women‟s constitutional rights and ordinary legislation. Labor market regulations, social patterns and public policy should not hamper but facilitate women‟s economic participation.

Emphasize skills and lifelong learning opportunities, as women face additional challenges because of early marriage and childbearing, which interrupt their schooling and work and then outdate their skills.

Invest in gender-conscious infrastructure – such as better housing, transport, water, and telecommunications – which can vastly expand a woman‟s horizon and free up her time, as can expansion in services that cater to women‟s needs – such as well-functioning childcare opportunities, public or private – which allow them to combine work and family responsibilities.

3. More Power to Urban and Local Government The urban share of total population in the MENA region will grow from 56% in 2005 to 65% by 2030xi.

While urbanization can be a positive factor if properly harnessed, current spatial disparities are a major factor behind discontent. The famous „Arab Street‟ highlights the political importance of cities.

Economic and social development is not possible without much stronger emphasis on local urban and spatial development, and that will not happen without local empowerment in both cities and rural areas.

Citizens are demanding to play a greater role in local development, through formal local democratic institutions, community and civil society organizations and the private sector. Reforms at national level need both to empower and capacitate local authorities to plan strategically across policy areas to deliver expected services. Decision-making over finances and human resources needs to be more decentralized.

The private sector needs to be engaged in partnerships. Major investment is needed in urban infrastructure and housing, with land-use planning and land markets to be developed and managed fairly. Urban policy has a major role to play to promote economic development and innovation, as in technopoles. Local institutions need major capacity building, introducing modern management, IT systems and e-governance. 

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Give local empowerment a much higher order of priority. Build on initiatives such as the Barcelona Call for Local Empowerment in the Mediterranean, following a March 14-15, 2011 conference when mayors, local leaders, specialists, private sector and international partners met to review current strategic priorities. CMI contributes leadership to a new, very broad network.xii Create a large program to assist the cities in the Mediterranean. While local needs are as multi-sectoral as national strategies, running from investment in infrastructure to technical assistance for land markets, a much larger network of programs for local capacity building and citizen engagement could have a pivotal effect. South-South-North peer learning could create new communities of practice.

Give specific support to community-based projects.

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Employment, Entrepreneurship and Equity 4. Drive Business Opportunities by Competition, Not Privilege In MENA, more than 80% of non-hydrocarbon value-added is produced by private enterprises.

However, countries exhibit relatively low dynamism and economic transformation. Private investment averages around 15% of GDP (compared to close to 30% in East Asia) – perhaps the single most alarming statistic of the failure of reform to date. The best performers export around 1500 goods (compared to close to 4000 in countries like Poland, Malaysia or Turkey). The average manufacturing firm‟s productivity is about half that of Turkey. There is little entry and exit of firms (the number of registered businesses per 1000 people stands at about 1/6 of that in the OECD, and less than 1/3 of that in Eastern Europe and Central Asia). The average business is 10 years older than in East Asia or Eastern Europe. A reason for this is the unfavorable business environment, with close to 60% of business managers thinking that the rules and regulations, as they appear “on paper” are not applied consistently and predictably.xiii Policy reform must signal a credible commitment to reduce interference and discretion in the enforcement of rules and regulations, so that more entrepreneurs can invest more and create jobs.   

Remove formal and informal barriers to competition. Governments must ensure that privileged positions and conflicts of interest between public servants and private investors are reduced. Follow through and catch up on basic business environment reforms.

Strengthen the institutions that regulate markets and interact with firms, by building strong rule-bound public institutions.

Foster a new partnership between the private and public sectors, one that mobilizes all stakeholders in the design, implementation and evaluation of economic policies.

5. Match the Quality of Skills To Global Competitiveness About 36% of private companiesxiv in Arab Mediterranean Countries (AMCs) participating in the World Bank Enterprise Survey 2008 report the lack of skills among workers as a major constraint in business development. This rate is higher than in other regions of the world, and predominantly affects young labor market entrants. Employment creation has stagnated in the public sector.xv A 2009 study on job markets and mobility between Europe and MENA showed that the education levels of the burgeoning labor force were not suited to meet the growing labor demand that Europe will experience over the next 50 years as its population ages. Unemployment is highest among university graduates, with about 17% of them unemployedxvi, an extraordinary phenomenon, as evidenced in the emergence of the Arab Spring.

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Identify the basic skills and competencies needed for employment in key economic sectors, and implement these skill and competency frameworks in selected education and training institutes, current formal ones, new institutions aiming to give a „second chance‟ and with strong cooperation with the private sector to ensure a better link to demand. Promote business incubators for young entrepreneurs.

Harmonize standards, qualifications and quality assurance mechanisms in post-basic education regionally, for enhanced employability and labor market mobility.

Create a very large program for education exchange with the EU, perhaps named after Ibn Rushd/Averroes, along the lines of Erasmus.

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Invest heavily in raising the interaction, knowledge and capacities in the Arabic language, as well as English and French.

6. Bring in the Small and Informal Business Sector The informal sector ranges from 32% of non-agricultural workforce in Syria to 55% in Egypt.xvii Incentives for informality include costs associated with tax, social protection and labor, environmental and other regulation, but a reason may also be the avoidance of corruption and „capture‟. A vicious circle of unavailability of SME finance stymies budding business opportunities, as evidenced by the surveys showing that only 20% of SMEs have credit, far lower than in emerging marketsxviii. Business associations speak of a very high threshold between informality and formality, and yet, it is the SMEs‟ contribution to the new dynamic sectors of the economies, particularly linked to external trade, that is going to create the needed new jobs.

The informal sector is the main destination for first time job seekersxix, but it is caught under a ceiling of low risk taking and low productivity. Small and informal firms act as a stepping stone for new entrants, teach skills, give opportunity for youth to define career goals, and test a worker‟s level of general skills such as timeliness and precision that diplomas fail to provide. But they may not be able to provide workers and future employers with credible signals of the general abilities workers have, and thus limit workers‟ opportunity to mobility and employers‟ access to required skills at the right costs. Businesses and workers are locked into narrow informal networks. 

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Break the barrier between formality and informality. Such reform needs to become a major policy priority. It entails changes to governance (simplification of engagement with authorities, including anti-corruption measures), taxes (lower threshold effects), and a better arrangement for social and environmental protection and rights (easing real change to the adoption of higher standards).

Break the vicious circle of access to finance. While liquidity might be an issue in some places, the likely constraints are in weak formulation of business plans and weak systems for risk-averse banks to assess them and the SMEs‟ assets and financial strength, with consequent poor financial intermediation. Corruption and poor practices hindered rational finance and business opportunities, locking countries into low domestic investment. This can be broken by a new focus on finance of the SMEs and the informal sector.

Link informal businesses and SMEs to export value-chains. Some sectors, such as agribusiness and tourism, are bound to contribute revenue to the national economy over the long term. Special concerted industry-wide efforts to break barriers for SMEs entry, to increase competition, and to boost innovation should be pursued.

Adapt training systems to raise the productivity of workers and business owners in the informal sector.

7. Go for Green Growth The Mediterranean region suffers from extreme ecological fragility. Water scarcity is of grave concern with immediate consequences on agriculture, the major user of the resource in the region. Water

consumption per capita is the lowest among regions in the world, and set to halve to levels close to „absolute scarcity „ (< 500m3/per capita/year) by 2050xx. Vulnerability is compounded by the heavy concentration of population and economic activity in coastal zones. Water scarcity will put a premium on demand management and on alternative solutions such as re-use and desalination which are 5

largely dependent on new technologies and energy prices. Climate change, which may affect this region more rapidly and deeply than others, is further predicted to exacerbate the predicament with falling precipitation and greater volatility in weather patterns.

Precisely because of the severity of the environmental situation and the dependence of major economic sectors on water and sustainable practices, this region must absolutely internalize environmental conditions in its economic strategies. It is a life-and-death issue. Conversely, investing in environmental protection and enhancing natural assets can lead to positive outcomes both for the environment and the economy and society as a whole. Investing in green growth can lead to enhanced job creation (e.g.

SMEs in renewable energy). If the major urban investments in housing and infrastructure- which certainly will happen over the next 25 years- are made with long-term sustainability in mind, the difference in productivity, social cohesion and quality of life will be significantly positive.    

Adopt sustainable and integrated water resources management, encouraging reuse, reducing water losses, reviewing water allocation, adequate use of tariffs, and monitoring of excessive withdrawals.

Improve climate-appropriate urban and spatial strategies, energy efficiency (as in buildings), and urban transport systems, opening options for local business, innovation and technology.

Provide the enabling environment for green jobs (including a possible focus on youth) and the skills needed for them.

Develop a Sustainable Mediterranean framework that guarantees that issues are dealt with at the regional level and that identifies the following priorities: o Policies in sustainable natural resources management integrated coastal zone management; protection of marine resources; vulnerable ecosystems and biodiversity; water resource management. o Policies for pollution abatement (corrective and preventive measures): water treatment; solid and hazardous waste management; industrial pollution abatement; sea transportation; maritime safety. o Resilience to climate variability: surface and groundwater reserves under pressure, increased occurrence of droughts; increased occurrence of floods (weather-related disaster management).

8. Use Equity As A Tool For Higher Productivity Large parts of the populations are and feel excluded from productive and public life. Some countries still face major backlogs of investment in basic health and education. Traditional social security measures are not geared to have strong impact, nor are they efficient (gasoline subsidies are a case in point), and they carry a very large fiscal burden. Rising food prices have stressed current safety nets.

However, investment in the basic capacity of disadvantaged people is likely to have a major positive economic impact. Not only does inclusion foster trust, and its consequent lower transaction costs in a market economy, but it also increases productivity. While this objective may have been desired, it has not been achieved. Trust, non-corruption and transparency are key to solid economic strategies. 

Redirect „blind subsidies‟ to broad-based or targeted support that has much greater impact.

Consider early childhood investment, using new or any of several models practiced world-wide, possibly by giving mothers subventions to use for their children strengthening their empowerment. Conditional cash transfers should be tried, as has proven successful, along with

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other means to break with ineffective systems. Pension and housing finance need to be modernized.

Reform safety nets also to respond to rising food prices. The high political sensitivity of food prices and subsidies makes it even more important to have an integrated approach to equity, not a safety net approach.

Make equity, non-corruption and social justice integral parts of economic strategies. Many benefits of recent privatizations have been captured by elites, increasing inequality, impairing economic efficiency and undermining confidence in private sector solutions. There is every reason to seek to redress ill-captured gains. Coming generation of economic strategies need to ensure that equity and social justice are embedded in mutually supportive ways.

9. Think of the Knowledge Economy As An Over-Arching Framework Approximately 40 million jobs will have to be created in MENA in the coming decadexxi; even more if low labor participation rates are to rise to levels of other regions. A key to create jobs is to invest more in knowledge-related domains and develop competitive, high productivity, and sustainable economic activities – in short, a move towards a knowledge economy (KE).

Comparisons between MENA and Western Europe on how knowledge-intensive their countries are indicate large gaps: in 2007, MENA countries employed 683 researchers per million people while in Western Europe this number was closer to 4000 per million; high technology exports as a percentage of manufactured exports was 5.56% in MENA as compared to 19% in Western Europe in 2007; Western Europe had almost 5 times more computers per 1000 people than in MENA in 2007.xxii These gaps represent significant binding constraints to economic growth and employment generation.

Conversely, rapid catch-up is possible, as evidenced in its own way by the decisive role that modern communication played in the emergence of the Arab Spring. As countries formulate their strategies for the next generation, they should consider KE as an over-arching framework. Consider how Estonia in just 20 years has transformed itself by acting on all fronts with knowledge as a key driverxxiii. It can be argued that Tunisia today has better current conditions to become a KE than what for example Estonia had. This kind of national targeting could become an important driver in unifying purpose and making hard policy choices.

National KE strategies include:  Act on the four “pillars” of the KE: a favorable economic and institutional regime; a dynamic innovation system; a strong ICT infrastructure; and a reformed education system. KE-based growth results from productive interaction between a favorable entrepreneurial climate and wise use of knowledge assets in education, innovation and ICTs. Focus on steering states into suitable niches so as to create jobs for youths entering labor markets and help society cope better with complex problems, such as clogged cities and environmental damage, which require knowledge and innovation to solve.  Implement pragmatic KE policies customized to country specificities. KE policy agendas cannot be disconnected from other key policy agendas, such as macroeconomic management, provision of infrastructure services, or public sector reforms. Governments must take into account resistance to change/institutional inertia, and hence perhaps begin KE efforts at the pilot scale. In light of current events, perhaps enthusiasm driven by change provides a good context for adopting KE-inspired strategies. Leadership structures, including intermediary bodies linking top KE policy makers with the political, business, and science communities, are essential.

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Make institutions more responsive to KE needs and opportunities. The government should act as facilitator, guiding and encouraging rather than controlling such development strategies, and as policy integrator, bringing synergy to the actions of traditionally separate departments, and should also support the private sector. The global connections and local ties of organizations that thrive in a KE context (research institutes, educational institutions, private enterprises) should be mobilized. Indeed, global connections open two-way channels through which flow world knowledge and expertise; local ties ensure that the KE benefits, and is linked to, the local economy and society.

Integration 10. Trade Must Be The Driver – Create a Mediterranean Economic Area For the non-oil producing economies of the Arab Mediterranean, and even for the oil producers, economic modernization and diversification can only come via trade. While opportunities for trade across the Arab region and globally, trade with Europe is by far the largest share. Trade brings added value, investment and innovation. According to studiesxxiv, limited regional integration means 1-2 percent of lower GDP growth. For most Arab countries, regional trade accounts for less than 10 percent of total trade versus 70 percent in Europexxv. Foreign direct investment is 4-6 percent of GDPxxvi, most of it from Europe. While the region is advancing in reducing tariffs vis-à-vis the EU, non-tariff barriers remain. In 2007, the overall trade restrictiveness index for MENA – a measure that includes tariff and non-tariff trade restrictions – was twice as high as in non-EU Eastern Europe and Central Asia and considerably above that of other developing regionsxxvii. High transport and logistics costs further tax the value creating potential of trade. Harmonization of standards and regulation is another area.

In non-tariff barriers, agriculture and services, there is a backlog of action to benefit from competitive trade and investment. Recent proposals from the EU Commission importantly set out to accelerate trade liberalization agreements, including in agricultural and fisheries, as well as in services, and propose a single regional Convention on pan-Euro-Mediterranean preferential rules of origin. Without serious trade reform and integration, employment will not follow. Individual countries have the opportunity to negotiate agreements, especially the statut avancé, with the EU. However, a more ambitious framework, drawing on the EU‟s own historic experience of expansion and dealing with non-members, is needed. 

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Explore the possibility of a Mediterranean Economic Area- a step above current approaches.

While primarily bilaterally negotiated, it would open the opportunity for a structured framework of economic integration, encompassing trade and competition regulation and a chosen range of acquis of the European Union.

Support the internal trade-supporting reforms to enable the businesses of the Southern and Eastern Mediterranean to grow.

Invest heavily to reduce transactions costs at points of trade, both by investing in facilities and in upgrading and simplifying regulation.

Explore expanding the financial leverage of existing or new financial institutions, to complement current institutions to work especially with the private sector.

11. Solar Energy Can Power Integration

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Solar energy can give the Mediterranean countries a new source of export earnings, strengthen their own energy security and give opportunity for jobs and business innovation. MENA can become a champion for climate change mitigation and green technology. Given the physical attributes of MENA, the potential access to the high-paying EU green electricity markets, the interest of the Northern Mediterranean countries to meet their de-carbonization targets, and the eligibility for climate financing, investment in solar energy represents a win-win for the Mediterranean. The MENA region is the most promising place globally to get cost reduction for Concentrated Solar Power (CSP)xxviii, a truly sustainable renewable energy option, through manufacturing economies of scale. This means huge employment opportunities in the manufacturing sector, with estimate of 65,000 to 80,000 new jobs in MENAxxix. 

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Put in place supporting financial and regulatory mechanisms through active European political leadership, in particular by allowing market access for MENA CSP exports to Europe. Some countries in the region like Morocco have decided to rise up to the challenge but the need is now to find off-takers in Europe. The France-Morocco agreement is a start but more European countries need to follow this path.

Ensure technology transfer, promote local business and employment opportunities, and reduce transaction costs as countries embark in new CSP investment projects. On the ground in Southern Mediterranean Countries, there is a real need for qualified personnel as major investments are being planned. Support both to skills training and business plans is an essential element for the win-win opportunity.

12. People-To-People Relations Is the Essence Even more so after the Arab Spring, the Mediterranean emerges as a true microcosm of managing interdependence and globalization. The 500 million inhabitants living around the Mediterranean Sea are bound to share a common future, given their thousands of years of shared history, current economic and social realities, and imagined scenario of security and stable prosperity. That is why focus must be on the huge opportunities lying ahead of them as an integrated region.

A new paradigm is emerging focused on a people-driven approach to development challenges. To transform these opportunities into reality, forces should be joined to facilitate “people-to-people” exchange through a bottom-up approach to build this shared destiny. A range of facilitating mechanisms is available:     

Help youth and marginalized groups get connected to broader networks using new social media to channel voices and solutions to development challenges.

Facilitate twinning arrangements between cities, urban specialists, private operators, academics, and emerging leaders for peer-to-peer learning and drafting of development or action plans in key sectors.

Support participation of civil society members in existing government structures to modernize administrative systems.

Facilitate the valuable untapped diasporas to contribute to economic and social renewal, and; Support the creation of professional and training networks in the Mediterranean region (in specialist areas such as on transport and logistics, environmental prosecutors) to facilitate flow of information, make economic value-added chains more efficient, strengthen public service, and ultimately overcome differences and contribute to a spirit of Mediterranean togetherness.

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What the Center for Mediterranean Integration Can Do Egypt, Morocco and Tunisia, and others, will coordinate the support that they as individual countries seek. It is equally imperative to create a more ambitious genuine Mediterranean integration. With major multilateral institutions putting their resources to its service, with the EU as a major anchor, and with a possible new role for the Union for the Mediterranean, there are significant opportunities that can be tapped. However, there is scope for much stronger interaction in a way that surpasses old unidirectional paradigms of technical assistance and projects, which would focus on new ways of working that would bring us closer to the way the region needs to work in the long term. Such pragmatic networking, collaboration and commerce at all levels of societies and economies are imperative if the Arab Spring is going to lead to summers and cycles of lasting harvests.

The CMI is a pragmatic platform from which partner countries throughout the region can discuss ideas and processes that will help the transition to new institutional and political arrangements and facilitate informed public policy in the arena of sustainable human development. The Center can draw on a broad range of institutional and independent expertise and resources to serve countries‟ interests in upstream and technical reflections. The strategy would be to focus on building and strengthening the knowledge base in key development areas to serve as inputs for the formulation of new policy reforms, including possible up-stream consultations on new cooperation programs by partners. 

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Provide a space for high quality reflection by new leaders on key priority issues. This would consist of non-official policy seminars bringing national leaders together with international expertise, looking at lessons learnt, benchmarking, and good practices. The CMI‟s network with think tanks in the region (we have approached 110) and outreach to civil society members would add a bottom-up and participatory approach. In addition to giving input and add to quality, these networks in themselves can ensure sustainability of efforts. Possible targeted themes can easily be drawn from all areas indicated above.

Provide evidence-based analysis to assist public policy debate, and assist in developing useful tools, specifically for communities of practice, such as a University Score Card for leaders of higher education. This method of work, drawing on precedents for example at the OECD, can be developed in many areas.

Contribute to a knowledge virtual platform for data collection in the MENA region and design and disseminate sectoral toolkits.

Scale up peer-to-peer exchanges between decision makers and practitioners from both rims of the Mediterranean.

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Endnotes

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This document was prepared for a meeting of the CMI Strategic Council April 1, 2011, www.cmimarseille.org, drawing directly on CMI member institutions’ work, much of it predating the Arab Spring, but with some recent work, particularly by the World Bank. This version, with edits subsequent to the CMI Strategic Council meeting, is posted on the CMI website, without implicating any members of the CMI or of its Strategic Council , www.cmimarseille.org ii

Mats Karlsson, “Using Evidence to Bridge the Untenable Gaps”, IEMED, Barcelona, 2010 World Bank, MENA Development Report: From Privilege to Competition: Unlocking Private-Led Growth in the Middle East and North Africa, Washington, DC, 2009. Available at: http://siteresources.worldbank.org/INTMENA/Resources/MENA_Development_ReportFrom_Privilege_to_Competition_Key_Messages_EN.pdf iv The geographic coverage for the Mediterranean is often defined as follows: Southern & Eastern Mediterranean Countries (SEMCs)- Bosnia & Herzegovina, Croatia, Kosovo, Montenegro, Serbia, Albania, Algeria, Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia, Palestine, Libya, Israel, Turkey; Arab Mediterranean Countries (AMCs)- Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine, Syria, Tunisia; Northern Mediterranean Countries (NMCs)- Cyprus, France, Greece, Italy, Malta, Portugal, Spain, Turkey; EU Med countries- Portugal, Spain, France, Italy, Slovenia, Greece, Cyprus, Malta v This represents about 7.4% of world population, where world population is estimated to be 6.8 billion (2009) by Source: World Bank (WDI) vi This represents about 8.6% of world GDP, where world GDP is estimated to be around 58 trillion in current prices for the year 2009 by Source: World Bank (WDI) vii Source: World Bank (GDF & WDI). Population data is for 2009, GDP (constant 2000 USD) for 2008, and GDP annual growth rate for the period 2000-2008. Comparisons on these between the EU Med countries and SEMCs are as follows: (i) Population194 million for EU Med, 305 million for SEMCs; (ii) GDP- about 4 trillion for EU Med, 1 trillion for SEMCs; (iii) GDP growth- 1.7% for EU Med, 4.3% for SEMCs viii Martin, Ivan. “Youth Employment in Arab Mediterranean Countries: The Key to the Future”, IEMed, 2009 ix World Bank, MENA Development Report: Gender and Development in the Middle East and North Africa: Women in the Public Sphere, Washington, Dc, 2004. Available at: http://siteresources.worldbank.org/INTMENA/Publications/20262206/genderoverview.pdf x La Cava et al., Investing in Youth in the MENA Region: Lessons Learned and the Way Forward, MENA Quick Notes Series, Number 31, The World Bank, September 2010 xi “World Urbanization Prospects, the 2009 Revision”, United Nations xii Barcelona Call for Local Empowerment in the Mediterranean, CMI website xiii World Bank, MENA Development Report: From Privilege to Competition: Unlocking Private-Led Growth in the Middle East and North Africa Washington, DC, 2009. Available at: http://siteresources.worldbank.org/INTMENA/Resources/MENA_Development_ReportFrom_Privilege_to_Competition_Key_Messages_EN.pdf xiv 36% is the average of available results from Egypt, Lebanon, Algeria, Syria, Jordan, Morocco and WBG xv Angel-Urdinola, Diego F. et al., “Non-public Provision of Active Labor Market Programs in Arab Mediterranean Countries: an Inventory of Youth Programs”, Social Protection Discussion Papers 55673, The World Bank, 2010. AMCs defined as: Algeria, Tunisia, Morocco, Syria, Jordan, Lebanon, Egypt, West Bank Gaza, and Yemen. xvi Martin, Ivan. “Youth Employment in Arab Mediterranean Countries: The Key to the Future”, IEMed, 2009. xvii World Bank, MENA Development Report: Unlocking the Employment Potential in the Middle East and North Africa: Toward a New Social Contract, Washington, DC, 2004. Available at: http://wwwwds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/06/03/000012009_20040603143832/Rendered/PDF/288150PA PER0Unlocking0employment.pdf xviii The Status Of Bank Lending To SMEs In The Middle East And North Africa Region: The Results Of A Joint Survey Of The Union Of Arab Banks And The World Bank, June 2010. Available at: http://siteresources.worldbank.org/INTMNAREGTOPPOVRED/Resources/MENAFlagshipSMEFinance12_20_10.pdf xix Assaad, R. and Barsoum, G. (2007) “Youth Exclusion in Egypt” Working Paper. Brookings Wolfensohn Center for Development/Dubai School of Government. iii

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xx

Making the Most of Scarcity : Accountability for Better Water Management Results in the Middle East and North Africa, World Bank, 2007, page 6 xxi World Bank, MENA Development Report: From Privilege to Competition: Unlocking Private-Led Growth in the Middle East and North Africa Washington, DC, 2009. Available at: http://siteresources.worldbank.org/INTMENA/Resources/MENA_Development_ReportFrom_Privilege_to_Competition_Key_Messages_EN.pdf xxii

Source: World Bank Knowledge Assessment Methodology, www.worldbank.org/kam xxiii Building Knowledge Economies: Advanced Strategies for Development, World Bank, 2007. Available at: http://siteresources.worldbank.org/KFDLP/Resources/461197-1199907090464/BuildingKEbook.pdf xxiv World Bank, MENA Development Report: Unlocking the Employment Potential in the Middle East and North Africa: Toward a New Social Contract, Washington, DC, 2004. Available at: http://wwwwds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/06/03/000012009_20040603143832/Rendered/PDF/288150PA PER0Unlocking0employment.pdf; World Bank, Is there a new vision for Maghreb economic Integration?, 2006. Available at: http://siteresources.worldbank.org/INTMENA/Resources/383590v10MAGHREBREPORTVOL1FEBRUARY2007.pdf xxv Akhtar, Shamshad, “Regional Integration and the Arab World: The World Bank Group Working with Donor Partners”, ForUM, Marseille, May 27, 2010 xxvi

xxvii xxviii

Ibid.

Ibid.

Clean Technology Fund: Investment Plan for Concentrated Solar power in the Middle East and North Africa Region, CTF/TFC.IS.1/3, November 10, 2009 Inter-sessional Meeting of the CTF Trust Fund Committee, Washington, D.C., December 1-2, 2009, p.4 xxix European Solar Thermal Electricity Association (ESTELA) “Solar Power from Europe’s Sun Belt” A European solar thermoelectric industry initiative contributing to the European Commission “Strategic Energy Technology Plan”, Brussels, June 2009

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