Where should the focus of our attention lie as we emerge cautiously from the worst of the pandemic’s impacts? Plans for post-pandemic recovery are gathering pace and the phrase “building back better” is now widely used. To avoid this becoming nothing more than a slogan, we must be clear about the substance behind these words.
The tight grip the virus has held on our movement and on the economy has given us food for thought. The global fight against COVID-19 has highlighted the limitations of the international community’s capacity to coordinate a global response to some of the other crises and challenges facing our world today. Previously championed supply chains were unable to adapt to restrictions. The reliance on distant sources of production made us vulnerable to shortages and ill-equipped to respond accordingly. The circular migration some industries thrive on, all but came to a halt.
The Union for the Mediterranean (UfM) has long vouched for the need to enhance regional cooperation and integration in the Mediterranean, as detailed in the UfM Roadmap for Action, adopted in 2017. That is why the publication of the 1st Progress Report on Euro-Mediterranean Regional Integration is so timely.
Commissioned by the UfM and prepared by the Organisation for Economic Cooperation and Development, the report focuses on five domains of regional integration – trade, finance, infrastructure, the movement of people, and research and higher education – presenting key findings, clear indicators to follow future progress, and policy recommendations for each of these areas. Critically, it is driven by data that allows us to draw some stark conclusions. The good news is that integration has advanced in the region. Dig a little deeper, though, and the truth is that progress has been slow and remains below its potential in terms of capacities and resources.
Uneven integration across and within sub-regions helps explain this in part. The European Union is still responsible for over 95% of the region’s internal merchandise exports and 93% of the external merchandise exports. The majority of financial exchange in the region involves at least one EU member state, and most scientific co-operation in the region is characterised by North-South interactions, though there are South-South exceptions.
In the 1990s and early 2000s, trade agreements within the Euro-Mediterranean region were perhaps too narrow in scope and lacked the conviction that now drives our ambitions for the sustainable development of our communities. They focused mainly on reducing existing tariffs in the trade of manufactured goods, while not covering trade in services. This is a lost opportunity, as trade in services accounts for 25% of global trade flows today.
Two further important challenges to regional integration are the inadequate infrastructure for transport and energy connectivity, as well as the lack of a common vision on human mobility as a driver of innovation and growth in the region. Indeed, The World Bank estimated in 2020 that over the next five to ten years the MENA region will require investment of over 7% of its annual GDP in the maintenance and creation of infrastructure; while concentrated solar power plants in the region could generate 100 times the combined electricity consumption of MENA and Europe together. Though some progress has been made to facilitate human mobility in the region, further cooperation such as softening visa requirements could enable countries to fully leverage the potential of different forms of mobility, such as tourism, student and researcher exchanges.
On top of these priorities, we must not lose sight of the importance of digitalisation, and the opportunities it unlocks for regional cooperation. Digital transformation is changing global production, trade and foreign investment, and offering more ways to collaborate and participate virtually in science and education. It can be used to lower the cost of remittances – an important part of GDP in many Southern and Eastern Mediterranean economies – as well as improve e-commerce. In 2017, studies reported that only 8% of SMEs in the wider MENA region had an online presence and only 1.5% of the region’s retailers were online.
As we recover, we must leverage the opportunity to create new inclusive societies that ensure young people and women can fulfil their potential as agents of development and contributors to the region’s economy as a whole. Regional integration is of common interest to all and to see meaningful change, we must start to show what we really mean by building back better. As always, at the UfM, we believe that ever more committed cooperation is the only way forward.
Nasser Kamel is the Secretary General of the Union for the Mediterranean.