The Arab Spring and Integration in the Mediterranean

Decades of discontent have turned into an Arab Spring of hope and empowerment.  Different as the country situations are, and dynamic and undecided as the evolutions remain, the opportunity for transformation and integration has presented itself in an unprecedented way.

The Arab Democratic Spring opens opportunities for long awaited economic and social progress. The untenable gaps have long been visible . 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. 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. The central pivot has to be the rapid creation of more, decent and better paying jobs – nothing is more empowering than a job, nothing shows successful competitiveness better than the creation of new jobs. While success will not come easily, it is possible to outline the general focus and nature of choices to make. A major political challenge will be to persevere with transformational reform; achieving effects may take years while people want rapid results.

Approximately 40 million jobs will have to be created in the region in the coming decade; even more if low labor participation rates are to rise to levels of other regions. A key to create jobs is to move towards a knowledge economy, investing more in knowledge-related domains and develop competitive, high productivity, and sustainable economic activities.

The young generation has had a lead role in the Arab Spring. 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 . If the work aspirations and creative strengths of the youth can be freed, the potential for economic growth, social cohesion and human fulfillment is enormous. If not, worsened youth unemployment will lead to negative and destabilizing societal phenomena. Young people represent a potentially transformative generation that can drive growth and development in the region for decades to come. Therefore, investing in the young is crucially important.

Further, there is a dire need for a new major gender agenda . Women remain a largely confined and untapped resource in the Middle East and North Africa 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 the region they represent only 28 percent of the labor force, one third that of men, with a widely accepted view that these rates are attributable to social norms and disadvantageous policies.

The key issue setting off this Arab Spring was dignity. Repeated again and again, this word marked the character of the protests. Democracy, human rights and constitutional change are also priority areas, but 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 Mediterranean integration, with the European Union as a major anchor, is the necessary framework to deepen and renew . Five hundred million people live in the region around the Mediterranean, with an economy of about $5 trillion and a growth rate of 2.2%. Here is where both the new orientations of reform and external actors need to consider embracing new levels of ambition.

The 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.

For the Arab Mediterranean countries, trade is the key to economic modernization and diversification . Trade brings added value, investment and innovation. While opportunities exist for trade across the Arab region and globally, trade with Europe is by far the largest share.   According to studies, limited regional integration means 1-2 percent of lower GDP growth.

Recent proposals from the EU Commission importantly set out to accelerate trade liberalization agreements 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 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.

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.

It is 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. There is scope for much stronger interaction with a 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.

• Transformation and Integration in the Mediterranean – Choices to Consider , Mats Karlsson, Director, CMI – April 4, 2011 – (short version)
• Transformation and Integration in the Mediterranean – Choices to Consider, Mats Karlsson, Director, CMI – April 4, 2011 – (long version)