- Trade accounts for 35% of GDP in the Mediterranean region, and the intra-regional trade market is one of the most important in the world.
- Today, the first edition of the UfM Progress Report on Regional Integration, commissioned by the UfM, and prepared by the OECD, was presented in an online event along with policy recommendations and an insight on best practice in regional integration from around the world.
- The report takes stock of the progress that has been made, and highlights two important challenges that still stand: inadequate infrastructure for transport and energy connectivity, and a lack of common vision on human mobility as a driver of innovation and growth in the region.
27 May 2021. With over 20% of the world’s trade in goods in 2018, the intra-regional market of the UfM continues to be one of the most relevant global markets today, and yet, the region is one of least economically integrated worldwide. For this reason, the UfM commissioned the Organisation for Economic Co-operation and Development (OECD), to prepare the first edition of the UfM Progress Report on Regional Integration. The Report, presented online today, provides key findings and policy recommendations in five domains: trade, finance, infrastructure, movement of people, and research and higher education, along with specific performance indicators that can be used to monitor trends and progress over time.
Integration has progressed unevenly, across and within sub-regions of the UfM, in all policy domains. In terms of trade, for instance, the European Union is responsible for 94% of the region’s merchandise exports. While 70% of all cargo traffic in the Mediterranean is between European ports, with 15% between Europe and North Africa, and only 5% is between MENA countries.
Two important challenges to regional integration are highlighted: the inadequate infrastructure for transport and energy connectivity, and the lack of common vision on human mobility as a driver of innovation and growth in the region. The MENA region will require investment of over 7% of its annual regional GDP in maintenance and creation of infrastructure. There are several sub-regional initiatives to interconnect electricity networks and allow for electricity trade. This is crucial since, concentrated solar power plants could generate 100 times the combined electricity consumption of MENA and Europe.
UfM Secretary General Nasser Kamel said: “Regional integration has always been at the heart of the UfM’s work, and this report is a step forward in recognising the progress that has been made and the work still to be done. The tight grip the virus has held on our movement and on the economy, modifying global production and commerce, and accelerating the digital transformation, has given us food for thought. As we recover, we must leverage the opportunity to create new inclusive societies that ensure young people and women can fulfil their potential, driven by our ambition for sustainable economies.”
OECD Secretary General Angel Gurría commented: “This report focuses on one of the main challenges of both history and geography, which is how to make the most out of the diversity and the complementarities that exist among neighbouring regions and countries. We firmly believe that higher levels of integration will result in more opportunities and greater welfare for people if done correctly, and this report puts forward a set of policy recommendations to help countries strengthen the timing, sequencing, and impact of their reform agendas to promote a more inclusive integration and greater opportunities.”
The launch event brought together representatives of different regional integration processes, as well as regional and international organisations and IFIs including the Association of Southeast Asian Nations (ASEAN), the African Development Bank (AfDB), Agadir Agreement, the United Nations Office for South-South Cooperation (UNOSSC), among others, to share their respective experiences in promoting regional integration. They showcased best practices and success stories that can inspire the UfM region and that can be adapted and replicated in the Euro-Mediterranean context.
The Progress Report was prepared with the financial support of the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) on behalf of the Federal Ministry for Economic Cooperation and Development of Germany (BMZ).