MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE - A PRIVATE SECTOR STRATEGY FOR A MAGHREB INITIATIVE OF COMMERCE AND INVESTMENT (IMCI)
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE A PRIVATE SECTOR STRATEGY FOR A MAGHREB INITIATIVE OF COMMERCE AND INVESTMENT (IMCI) BACKGROUND REPORT AND ACTION PLAN
MAKING THE CASE
FOR MAGHREB BUSINESS
IN TIMES OF CHANGE
A PRIVATE SECTOR STRATEGY FOR A MAGHREB INITIATIVE
OF COMMERCE AND INVESTMENT (IMCI)
BACKGROUND REPORT AND ACTION PLAN
KONSENTIO
Enigheden
Bygmestervej 57
2400 København NV
Danmark
Avenue de Cortenbergh 168, 3fl.
1000 Bruxelles
Belgium
www.konsentio.dk
Edited by Sinne Conan and Martin Schiller
LIST OF ABBREVIATIONS 5 LIST OF ABBREVIATIONS ASEAN Association of Southeast Asian Nations AMU Arab Maghreb Union BMICE Banque Maghrébine de l’Investissement et du Commerce CAP Confédération algérienne du patronat CEE Central and Eastern Europe CGEM Confédération Générale des Entreprises du Maroc DCFTA Deep and Comprehensive Free Trade Area EU European Union FDI Foreign direct investment GAFTA Greater Arab Free Trade Area GCC Gulf Cooperation Council GDP Gross domestic product IMCI Initiative Maghrébine du Commerce et de l’Investissement IMF International Monetary Fund UMA Union du Maghreb Arabe UME Union Maghrébine des Employeurs LBC Libyan Businessmen Council MCU Maghreb Customs Union Mercosur Mercado Común del Sur MFTA Maghreb Free Trade Area MSM Maghreb Single Market NTB Non-tariff Barriers SME Small and Medium Enterprises UTICA Union tunisienne pour l’Industrie, le Commerce et l’Artisanat UPM Union nationale du Patronat mauritanien WTO World Trade Organization
6 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE MAGHREB INITIATIVE OF COMMERCE AND INVESTMENT 7
A NEW APPROACH TO TRADE REPORT’S
INTEGRATION IN THE MAGHREB AIM
A few years ago a number of Maghreb1 countries surprised These comparative advantages remain to this day largely Departing from the standpoint that the Maghreb business to effectively move ahead. How should a new culture of
the entire world. They embarked on a transformation neglected. Instead major obstacles remain: Intra-Maghreb community is an indispensable actor in the intra-Maghreb advocacy look like?
process which has been unique in its kind and which is still value chains are fragmented and national markets are integration process, this report pursues three objectives:
pulsing today. At the same time imbalances, increasing relatively closed up vis-à-vis the global level. In sum, this In no way this report is a panacea for all the economic
disparities and rising youth unemployment rates are leads to a lack of competitiveness and bars the road to • Identify and analyze the economic challenges and difficulties the region is currently facing. However it can
keeping the region on tenterhooks. more sustainable and inclusive growth. opportunities the region is facing within the next lay the basis for a new platform of thought and action.
decade;
Eventually, the region is longing for a comprehensive The various building sites are not a secret and have been
strategy which spurs on sustainable and inclusive growth stated and expanded by academia, international bodies • Advice how the Maghreb business community Method:
and leads to shared prosperity. This is where a Maghreb and business: Promotion of small and medium enterprises can provide a value added to closer economic
Initiative of Commerce and Investment (IMCI) can provide (SME), access to finance, the need for reliable framework integration in times of change and transformation; 1. Review and synthesis of previous in-depth studies
a value added. conditions and low bureaucratic burdens, investment on the Maghreb integration process; review
in research and vocational training, modernization of • Highlight concrete steps to take by business of benchmark studies on comparable regional
Despite a significant number of common economic infrastructure etc. representatives to make the IMCI a visible step integration projects;
challenges Maghreb governments have sought remedy towards tighter economic cooperation.
in national solutions. Bilateral trade agreements with The infinite number of possible policy options should not 2. Review of Maghreb policy makers and employers
neighbors overseas such as the European Union (EU) are cloud the sight: In times of change, affecting the Maghreb Eventually, it should not be restated extensively what has federations assessments
favored over tighter cooperation between Maghreb states. countries as well as its neighborhood, political leaders and been diagnosed well in the past as the main variables (e.g. UMA and UME);
fore and foremost the business community both have to limiting cooperation and hampering growth.
The absence of regional integration is costly. Up to 2-3 set the strategic priorities together. 3. Analysis of the current economic and political
percent of the consolidated regional gross domestic Suggesting a bottom-up logic, this report is about a new development since the “Arab Spring”;
product (GDP), roughly 530 billion Dollars, is lost each Within a period of political transition, which is itself linked approach to surmount –step by step- the absence of
year due to trade restrictions and legislative barriers.2 to an economic revolution set about some decades ago, regional integration by associating those actors to the 4. Drafting of concrete organizational and policy-
the need for courageous signals is more than urgent. process who know best what is happening on the ground. related proposals which may refocus intra-Maghreb
At the same time efforts to couple the “Maghreb potential” integration in the year of the 25th anniversary of the
have not been in vain. The creation of the Arab Maghreb They can smooth the way towards sustainable growth The goal is to suggest in a comprehensive manner how AMU on effective business needs.
Union (AMU-UMA) in the late 1980ies initiated a period of and employment. Both are preconditions to global the business community can organize and structure itself
common institution-building. competitiveness as well as guarantors for political stability
and a functioning intergenerational contract.
However, this framework, able to serve as a backbone for
a common single market, has not been effectively called
to life. Out of a total of 36 legal conventions, protocols
and agreements, only 6 have been ratified by national
parliaments within 25 years.
Political paralysis blocks the view on the crucial role the
Maghreb could play in world economy. Together, the
five countries can buddle the critical mass necessary to
exploit economies of scale and to compete on a global
level: A young dynamic population, a strategic geographic
position, a great plenty of natural resources and a
prosperous neighborhood.
CONTENTS 9
CONTENTS
List of abbreviations 05
A new approach to trade integration in the Maghreb 06
Contents 09
Résumé opérationnel et Plan d’action 10
Executive Summary and Action Plan 12
1 Five stars rising? The Maghreb in times of change 14
1.1. Profound transformations 16
1.2. Competitiveness and Trade 18
1.3. Markets and Opportunities 20
2 Entrepreneurs as indispensable partners of the project 26
2.1. Strengthening cooperation between Employers federations 28
2.2. Where business can step in 29
2.3. Three reasons to join forces 30
3 At the crossroad: Recommendations and further action 32
3.1. Structures for Business action 34
3.2. Voicing Business claims effectively 38
4 Conclusions and perspectives 42
Annexes
Recommandations et Plan d’Action (version française) 45
Background documents 52
Notes and References 55
10 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE RÉSUMÉ OPÉRATIONNEL ET PLAN D’ACTION 11
Action À court terme À moyen terme À long terme
RÉSUMÉ OPÉRATIONNEL
politique (1 an) (2-4 ans) (5 ans + )
ET PLAN D’ACTION Commerce et
Finances
Faciliter l’accès
transfrontalier au prêts et
crédits
Faciliter l’établissement
transfrontalier des banques
Libéraliser tous
les mouvements
de capitaux dans
le Maghreb
Etablir un dialogue entre
Harmonisation des Etablir des tarifs
Douanes le Conseil des Douanes et
PLAIDER POUR LE MAGHREB régions urbaines, l’importance du taux de chômage des l’UME
procédures douanières douaniers communs
DES ENTREPRENEURS- UNE jeunes dans la région reste inquiétante. Dans la conviction
qu’il est possible de répondre à ces problèmes au
STRATEGIE DU SECTEUR niveau du Maghreb, les cinq pays signataires devraient Renforcer les Partenariats S’accorder sur un régime de
Investir dans
Infrastructure
PRIVE POUR UNE INITIATIVE
les capacités rail
reconsidérer les arguments en faveur d’une coopération Publique-Privé (PPP) transport commun
et portuaires
plus étroite.
MAGHREBINE DU COMMERCE ET
DE L’INVESTISSEMENT (IMCI) Rendre les procédures Créer une Agence
Lancer une campagne
intra-Maghrébine
Climat des Affaires administratives plus de Promotion de
et internationale
transparentes l’investissement au Maghreb
Ce rapport propose une nouvelle approche constructive d’investissement
afin de faire avancer l’intégration régionale en matière de Le Maghreb traverse actuellement
commerce dans la région du Maghreb. Face aux blocages
politiques qui depuis les années 1994 ont profondément de profondes transformations Marchés et Emploi
Faciliter les procédures
relatives à l’emploi
S’accorder sur une
harmonisation renforcée
Créer des marchés
communs sectoriels
entravé la coopération économique entre les cinq transfrontalier dans certains secteurs
signataires de l’Union du Maghreb arabe (UMA), il faut qui affectent tous les domaines
mobiliser de nouvelles voies afin de relancer le processus
dans lequel l’Algérie, la Libye, la Maurétanie, le Maroc et la des politiques publiques dans Education et Adapter l’ université aux
Relier la recherche Créer un Espace
universitaire et les de Recherche
Tunisie s’étaient embarqués en 1989.
la région. Formation besoins des entreprises
entreprises Maghrébin
Cette nouvelle approche consiste en un engagement
plus cohérent et plus constant du secteur régional
À court terme À moyen terme À long terme
privé afin de surmonter progressivement l’absence Organisation de l’UME
(1 an) (2-4 ans) (5 ans + )
d’intégration régionale. En effet, la quasi-absence de
coopération représente une perte d’environ 2-3% du L’entrepreneuriat est un partenaire indispensable afin
produit intérieur brut (PIB) annuel dans la région. Face de remettre le Maghreb en route. En comparaison avec
Instituer un Installer un groupe
à ce constat, les organisations patronales des cinq États d’autres régions dans le monde, le taux de commerce Fonctionnement régulier
Secrétariat permanent de travail Nommer le personnel
du Secrétariat
membres de l’UMA se sont donc réunies en 2007 dans au niveau intra-maghrébin reste chroniquement bas. Ce de l’UME des 5 fédérations
l’Union Maghrébine des Employeurs (UME). Au milieu des sont surtout la persistance de barrières non-tarifaires
défis après le « Printemps arabe », l’UME lance en 2014 et l’insuffisance des infrastructures qui freinent la
2-4 Séances
l’Initiative maghrébine du Commerce et de l’Investissement compétitivité de la région. En même temps, l’abondance Etablir des comités Nommer les membres des
S’accorder sur les secteurs- en comité par an
(IMCI), dans le but de redynamiser le processus initié par des ressources naturelles, de capital humain éduqué sectoriels et clés de coopération
comités
3-6 rencontres des
des groupes d’experts Choisir les experts
l’UMA dans une perspective d’emploi et de croissance et de marchés avec un potentiel de développement groupes d’experts par an
inclusive. Dans le premier et deuxième chapitre de ce représentent des opportunités indéniables. Des efforts
rapport, les logiques et objectifs de cette initiative seront à la coopération en matière de régulations et à la Renforcer Identifier des objectifs Nommer un interloctueur
Participation
présentés. Finalement, le troisième chapitre fait l’objet modernisation des infrastructures seraient une incitation des représentants
le partenariat communs après le Forum de permanent pour l’UMA au
de l’UMA dans
d’un plan d’action exhaustif, divisé en deux stratégies afin d’encourager l’investissement intra-maghrébin ainsi UME-UMA Marrakech de 2014 Secrérariat de l’UME
les groupes d’experts
opérationnelles. que des Investissements Directs Étrangers (IDE).
Organiser 2-3 Tables rondes par an 3-4 Tables rondes
Le Maghreb traverse actuellement de profondes Le plan d’action indique deux dimensions que les Table ronde
des Tables rondes des des PDG en 2014
proposées par des grandes sectorielles par an
transformations qui affectent tous les domaines des entrepreneurs du Maghreb devraient aborder dans entrepreneurs entreprises proposées par des PME
politiques publiques dans la région. En 2011, des un horizon de 1 à 5 ans. D’un côté, les structures
soulèvements populaires ont entraîné des changements organisationnelles doivent être élargis et adaptés à une
de régimes en Tunisie et en Libye, menant à une défense d’intérêts à l’échelle régionale. De l’autre, les Ouvrir des Bureaux de
Washington
réorganisation de l’architecture politique régionale. priorités concernant les politiques publiques devraient être liaison à Bruxelles Riyad
et Pékin
Après des années de croissance du PIB, tous les pays définies et communiquées aux acteurs politiques. In fine, l’international
de la région sont entrés dans une période de transition la mise en œuvre de ces deux dimensions interconnectées
démographique. En plus d’une amplification des disparités constitue la base pour une action entrepreneuriale crédible Mémorandum de progrès Rapports régulier sur Application d’un «Index
régionales et un mouvement des populations vers les et durable dans la région du Maghreb. Rapport et de 2014 le climat des affairs maghrébin des Affaires»
Forum annuel Compser un jury Attribuer le prix Diversifier le prix
Lever des fonds Attribuer une bourse Club des Anciens
12 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE EXECUTIVE SUMMARY AND ACTION PLAN 13
Short term Medium term Long term
Policy action
EXECUTIVE SUMMARY
(1 year) (2-4 years) (5 years +)
AND ACTION PLAN Trade and finance
Facilitate cross-
border access
to credits and loans
Facilitate cross-border
establishment of banks
Liberalize all capital
movements in the
Maghreb
Establish dialogue between
This report is about a new and constructive approach to Business is an indispensable partner in getting the Harmonisation of
Customs the Customs Council and
customs procedures
Establish common tariffs
regional trade integration in the Maghreb. Maghreb back on track. Compared with other regions the UME
In the face of political deadlock, which has deeply affected world-wide intra-Maghreb trade is chronically low and
economic cooperation between the five signatories of especially Non-tariff barriers and insufficient infrastructure
the Arab Maghreb Union (AMU) since 1994, alternative curb the region’s competitiveness. At the same time Strengthen Public-
Agree on a common transit Investment in port and
Infrastructure Private-Partnerships
channels have to be mobilized to re-launch the process abundant natural resources, an educated human (PPP)
regime railway capacities
on which Algeria, Libya, Mauretania, Morocco and Tunisia capital and markets with potential for development
embarked in 1989. are undisputable opportunities. Efforts on regulatory
cooperation and infrastructure modernization and Launch intra-Maghrebine
Make administrative Create Maghreb Investment
The new approach consists a more consistent and expansion would be an incentive for encouraging intra- Business climate procedures more transparent Agency
and international
investment campaign
permanent engagement of the regional private sector Maghreb investment as well as FDI inflow.
to progressively overcome the absence of regional
integration. In fact, the virtual absence of cooperation The action plan indicates two dimensions Maghreb
Ease requirements Agree on deeper
represents a loss of roughly 2-3 percent in the annual business should attack in a planning horizon of 1 to 5 Markets and Jobs for cross-border harmonisation in
Create common markets
in certain sectors
regional gross domestic product (GDP). The Employers years. On the one hand, organizational structures need work permits certain sectors
federations in the five AMU member states have therefore to be expanded and adapted to regional advocacy. On
bundled their force in 2007 within the Union Maghrébine the other hand, with regard to policy areas, priorities
des Employeurs (UME). In order to reinvigorate the AMU have to be defined and communicated to political actors. Education Adapt university to business Interlink univserity research Create a Maghreb
process in the midst of the challenging Post-Arab Spring Eventually, both dimensions are interconnected and lay and Training needs and business Research Area
era in the view of inclusive growth and employment, UME the basis for credible and durable business action in the
initiates in 2014 the Maghreb Initiative for Commerce and Maghreb.
Investment (IMCI). The rationale behind this private sector
UME Short term Medium term Long term
initiative is expatiated in the first and second chapter of
Organization (1 year) (2-4 years) (5 years +)
this report. The third chapter contains a comprehensive
action plan, divided up in two operative strategies.
Establish a UME Set up Regular
The Maghreb is experiencing a number of profound
Permanent an inter-federation Appoint staff functioning of
transformations which affect all areas of policy-making Secretariat working group the secretarial body
in the region. Popular uprising led to regime change in
Tunisia and Libya in 2011 reordering the regional political
Establish sectorial 2-4 Committee
architecture. After years of steady GDP growth, all committees and expert Agree on key sectors
Appoint Committee
sessions p.a.
countries have entered a period of demographic transition. members
groups of cooperation
Select experts
3-6 expert groups
Besides growing territorial disparities and a population meetings p.a.
move towards urban areas, youth unemployment has
remained alarmingly high. Convinced that these challenges Identify common Appoint a permanent Participation of
can be addressed on a Maghreb level, the five countries Strengthen
goals after the UMA interlocutor at UMA representatives
UME-UMA Partnership Marrakech Forum 2014 the UME Secretariat in expert groups
should reconsider the reasons why tighter cooperation
makes sense.
Establish 2-3 Sectorial 3-4 Sectorial
CEO Roundtable
Business in 2014
Roundtables p.a.hosted Roundtables p.a.
Roundtables by large companies hosted by SME
Establish
Washington
international Brussels Riyadh
and Beijing
liaison offices
State of progress Regular reports on Maghreb business
Annual Report memorandum 2014 business climate climate index
and Forum Compose jury Grant award Diversify award
Raise funds Grant scholarship Alumni community
1 FIVE STARS RISING? THE MAGHREB IN TIMES OF CHANGE Political deadlock is not a reason to give up. Maghreb business remains the backbone of cross-border cooperation and has the potential to go further. In view of multiple transformations reshaping the region, clear and visible signals are more than necessary.
16 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE FIVE STARS RISING? THE MAGHREB IN TIMES OF CHANGE 17
1.1. PROFOUND
TRANSFORMATIONS
North Africa may be one of the least integrated regions Figure - GDP growth rates of the AMU area Demographics and the job market Figure - Unemployment rates in Algeria, Morocco and Tunisia
Figure - Unemployment rate in Algeria, Morocco and Tunisia 2000-2012 (annual % of total population)
Figure - GDP growth rates of the AMU area 2000-2012 (annual %)
in the world3 - at the same time it is one of few regions 2000-2012 (annual %) (annual % of total)
which has embarked on such a vibrant and intense The Maghreb is a dynamic region. This fact is illustrated
transformation process. best by a rapid population growth which has considerable
AMU Morocco Algeria Tunisia
increased the potential workforce. Between the 1980 and
The 2011 uprisings which have been commonly labeled the 2000 populations more than doubled in the majority of
“Arab Spring” can be considered as a powerful symptom the Maghreb countries. At the same time the region has
of long term economic and social changes. The origin of entered a phase of demographic transition as fertility rates
these movements lies in the 1980 and 1990 when the end are decreasing since 1990.
of the Cold War inaugurated a new era of opening up and
global exchanges. Today the region counts more than 90 million inhabitants.
Algeria (38 millions) and Morocco (33 millions) are the
At the time Maghreb countries did not only decide to most populated countries. Tunisia (10 millions) and Libya
converge economically and politically within the AMU. (6,5 millions)range in the middle. Mauretania is currently
They also launched a number of decisive national reform the region’s least populous country.
packages: Privatization of state owned companies, revamp
of infrastructure, and diversification of economies. Within all the countries, the urban population has been
growing much faster than in rural areas. This has made
Very soon national interests overran the Maghreb spirit. cities the key economic and social epicenters. Jobs-seekers
Structural adjustments and strategic reorientation were would increasingly leave the countryside as the workforce
Source: ILO and national sources
undertaken in each country in a different way, which partly Source: UNCTAD in agriculture has been more and more rationalized.
explains today’s fragmented regional economic structure.
With the exception of Mauretania, where the majority
Legal obligations, to which AMU member states had of the population lives in rural areas, between 58 to 78 economies6. Between 2000 and 2009 unemployment fell
committed themselves, remained unapplied as Heads of In the short term, the national strategy paid off: Between percent of Maghrebins was living in cities in 2012. In the from 13.4 percent to 9.1 percent in Morocco and from 30
State and Government could not agree on holding further 1999 and 2008 the majority of Maghreb countries past, governments have therefore paid more attention percent to 10 percent in Algeria. Tunisia’s unemployment
summits. At the same time the AMU Secretariat has experienced impressive average GDP growth rates of 3-5.5 to urban development by improving infrastructure and rates remained relatively high, despite the country’s
continued actively to adapt legal instruments and keep percent.4 However certain governments did not realize or the access to education. As a consequence, territorial impressive economic performance.
inter-regional cooperation alive. simply ignored the lacking sustainability of their economic disparities in certain countries have further increased5.
models. However, employment policies have been unsustainable:
Moreover external rapprochement with the EU, the major Juxtaposed to this movement from rural to urban areas, In Algeria and Morocco growing employment in the
trading partner of the Maghreb, was strictly orchestrated Despite a general improvement of living conditions, labor in Maghreb countries is experiencing a considerable informal sector has led to stagnation in labor productivity.
on a national level (Tunisia and Morocco 1996, Algeria regional disparities have been increasing. Unemployment transformation. Tunisia has built its growth on low-skilled sectors. The
2002). has remained high while the population is growing. demand for educated labor is sluggish, explaining the high
Corruption and institutional inefficiencies were At first view, there has been visible progress in the youth unemployment rates in the country.7
increasingly denounced. reduction of unemployment in the major Maghreb
Governments generally underestimated the effect of the
BOX: YOUTH UNEMPLOYMENT
radical shift in the output mix from agricultural products
and raw materials to services. In the case of Tunisia for
During the last years youth unemployment rates in the Maghreb countries has been one of the highest in the world.
example agricultural production shrank within 20 years by
Whereas globally 12 percent of the young were unemployed in 2008, 24 percent of young Algerians and 18 percent
4 percent, while services expanded by almost 10 percent.
of young Moroccans were left without a job. In Tunisia, the rate was at alarming 31 percent.
A similar phenomenon can be observed in Morocco
There are multiple causes to this alarming phenomenon: The “youth bulge”, meaning a demographic increase of
Last but not least, in the aftermath of the Euro crisis 2009, “prime-age” working population; incompatibility between education outputs and the needs of business; a shortage of
exports to Europe as well as FDI seriously declined. First high-skilled jobs in the region; adjustments after the global economic crisis.
and foremost the most open Maghreb economies, Tunisia Leaving the region seems to many young skilled Maghrebins the only solution. Around 16 percent of the labor force
and Morocco, were hit by this shock. in Morocco, 15 percent in Tunisia and 14 percent in Algeria emigrated in 2000. On the one hand, this “brain drain”
weakens regional economies as skilled human capital is lost. On the other hand, through remittances migrants
overseas exceed FDI and make a considerable contribution to the regional GDP.18 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE FIVE STARS RISING? THE MAGHREB IN TIMES OF CHANGE 19
1.2. COMPETITIVENESS
AND TRADE
Maghreb competitiveness and the regional trade level are • Lack of trade complementarity9 Investments patterns
currently in a poor state. Compared with other regional Intra-regional merchandise trade suffers from low
blocks worldwide, which have been further converging, intra-regional trade complementarity, mirroring Today, intra-Maghreb investment patterns as well Efforts to take concrete action in the Post-2011
the AMU area remains fragmented. similarities in trade structures: Small markets; low as international foreign direct investment (FDI) are period already exist. On the occasion of the 5th
export diversification; little integration into global underdeveloped. Whereas the inflow of FDI was higher in Regional Conference of finance ministers and
The most significant trade flows in the Maghreb in terms production chains limiting the expansion of high the Maghreb countries than in Central and Eastern Europe central bank governors of the Maghreb countries
of imports and exports can be observed between the value added manufacturing activities. (CEE) in the 1990, this trend changed around 2004. Major in Nouakchott in 2013 Christine Lagarde, Chief of
“central Maghreb countries” (Algeria, Tunisia and Morocco) reasons are ongoing large-scale privatization programs the International Monetary Fund (IMF), outlined
(see Annex page 54). At the same time, in 2008, intra- • Lack of external market diversification and structural adjustments which attracted numerous the necessary steps to enhance FDI in the region:
regional trade among the central Maghreb countries was Maghreb trade patterns are significantly driven by foreign investors.13 “For the level of foreign direct investment to
less than 3 percent of the region’s total trade. In contrast, proximity. In fact the EU has remained the main increase, Maghreb countries need to improve the
intra-regional trade within the EU was 63.6 percent, within source of exports and imports for Maghreb countries Two major investment patterns characterize the current business environment, make customs and taxation
ASEAN 24.6 percent, and among Mercosur countries 15.2 which accounts on average for over 65 percent of state of play: rules more transparent, make the judicial system
percent.8 their total trade. This high market concentration more predictable and independent, and harmonize
points to the vulnerability of the region to changes • Intra-Maghreb FDI are low compared to other investment rules across the region.”
Eventually, these facts have been repeatedly deplored and on the European market.10 regional trading blocs
they highlight once more the need to take action. At the By agreeing to finally launch the Arab Maghreb
same time, global benchmarking does not lead very far • Lack of product diversification Intra-regional FDI in Mercosur, ASEAN or the GCC Union Investment Bank (BMICE)17 in 2014, Maghreb
when one tries to understand why intra-Maghreb trade The range of goods offered by Maghreb countries vary from 8 to more than 30 percent of total FDI. governments made a promising step towards
remains low and which major barriers impede the turn still remains relatively similar. Besides products In the AMU area they represent less than 1 percent. facilitating investment. In fact, BMICE loans
towards more competitiveness. related to the oil- and gas-sector which are mainly Libya holds 55 percent of the total regional FDI, will provide a solid financial base for improving
traded by Algeria and Libya, the main export followed by Tunisia (20 percent) and Morocco (15 infrastructure, a necessary precondition for
manufacturing sectors are the clothing and textiles %).14 FDI of Maghreb countries outside the AMU area increasing FDI.
Figure - Intra-regional trade by regional agreement industry, agri-food and building materials and, to have rapidly shrunk in 2009 after the global financial
(% of total
Figure - Intra-regional trade)
trade by regional agreement 2006-2008 (% of total trade) some extent, electrical and mechanical industries.11 crisis.
The service sector is dominated by tourism.
80
At the same time there are signs of export • Inward FDI to the Maghreb countries have Figure - FDI inflows into Maghreb countries
70
diversification in Tunisia and Morocco.12 decreased after 2011 (in US$ millions)
Figure - FDI Inflows into Maghreb countries 2002-2012 (in US$ millions)
60 While in 2008 extra-regional FDI reached a record Morocco Algeria Tunisia Libya Mauretania
level of 3 percent, this trend was reversed sharply
50 5000
after the 2011 uprisings. Even if foreign investors
40 are hesitantly returning, their engagement is much
4000
lower. Europe remains the principal FDI source for
30
Maghreb countries, in particular regarding Morocco
3000
20
and Tunisia (80 and 60 percent, 2005-2010). In
general, Tunisia holds highest stock of FDI in the
2000
10 region, followed by Morocco and Algeria.15
0 1000
EU 25 ASEAN MERCOSUR CEDEAO GCC AMU Experiences in the past have shown that FDI can
act as growth boosters. Besides an inflow of foreign
Source: UN Comtrade
currency, technology transfer and job creation, FDI 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
also can spur on productivity and help to further
diversify economies.16 -1000
Source: World Bank20 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE FIVE STARS RISING? THE MAGHREB IN TIMES OF CHANGE 21
1.3. MARKETS
AND OPPORTUNITIES
At the current stage, the Maghreb countries are more In times of change, where the need for a Maghreb Table: Maghreb markets today and the gains of deeper regional integration
fragmented than united. The freezing of the integration dimension is more present than ever before on national
process within the AMU framework, which was mainly policy agendas, the status quo has to be courageously put
caused by the border closure between Morocco and into question:
Algeria in 1994, has left its marks on the region. MARKET STATUS QUO TIGHTER COOPERATION
• Where does the Maghreb stand today?
Goals, which seemed to be tangible in the 1990 have • Which concrete benefits would further cooperation Agriculture • Rising demand for agricultural products • Food security up to 2030
moved into an uncertain future: The creation of a Maghreb entail for the five AMU members? (wheat, milk, meat) • Sustainable water and soil management
Free Trade Area (MFTA), the creation of a Maghreb • Water scarcity • Technological innovation (breeding)
Customs Union (MCU) or the creation of a Maghreb Single First of all, this means taking a close look at the state of • Desertification
Market (MSM). play on a sectorial scale. • Increase in global competition
Tariffs remain high between Maghreb countries. This does Different dynamic markets are overlapping within the AMU
not only have a deteriorating impact on trade intensity, but area, each one being more or less prominent in one or Agriculture • Rising demand (households, industry) • Share costs for additional power plants
limits the competitiveness and quality of products18. more member states. Over the recent years, the Maghreb • Low national electricity production • Lower energy prices for consumers
private sector has experienced the evolution of regional capacities • Energy diversification (solar power, wind
These obstacles are coupled by NTB which can consist in and global demand and supply. • Need for grid extension and energy)
straightforward border closures, excessive delays resulting modernization
from lengthy clearance and inspection processes, the large In fact, coming to decisions on how to adjust to market • Inefficient energy consumption
number of documents and signatures needed to process forces has not been an easy task as solutions are
a trade transaction, and the frequency of problems with hampered by a number of obstacles: The absence of
Industry • Poorly diversified products • Rising employment
customs and other government authorities19. regional integration is fragmenting regional value chains • Decreasing productivity (deficient • Larger product range
and impedes the diversification of the product base. manufacturing plants) • Innovation
Besides the virtual non-existence of the free movement • Diverging industrial strategies and • Increase in FDI
of goods and services, the free movement of labor and In the past, a number of in-depth scenario studies have planning/protectionism
capital is also more than limited between the five AMU repeatedly quantified the gains of “more Maghreb”20.
signatories. Business will further qualify these gains in 2014. They can
be harvested in every sector, from agriculture, to industries Information and • Need for area wide IT-infrastructures • Cross-border research facilities
In addition, regional and international business has up to energy and logistics. Communication • Bureaucratic hurdles • More efficient production processes
frequently highlighted the need for a comprehensive Technologies • No internationalization capacities • Improved administration (customs, security)
cross-border infrastructure, which is a precondition for a (ICT)
competitive logistics sector.
The responses to these claims have always been national
facilitation strategies, which have been more successful Transport and • Country-specific progress (e.g. Tanger • Geostrategic “hub”
in some Maghreb countries than in others. However, the Logistics Med, High speed train sections) • Increase in FDI
“Maghreb dimension” is non-existent in national policy • Time-consuming administrative • Increase in regional productivity
decisions. procedures22 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE FIVE STARS RISING? THE MAGHREB IN TIMES OF CHANGE 23
Connect, dismantle, invest- A recipe for a successful Maghreb business 1. Connect markets
Intra-regional external trade can only be facilitated by fostering growth through research and innovation. It is key
providing the necessary networks for exchange. This to help minimize administrative burdens, widen consumer
includes tighter cooperation between the five AMU choice, lower transactions costs, facilitate communication
signatories regarding customs. Beside the need to lower and lead to new services and products. Here and now it
tariffs or abolish them in a foreseeable future, procedures plays a key role in facilitating the cooperation of customs
should be harmonized. authorities and the development of infrastructures.
Also, customs authorities should be made aware of the The immediate objective should be to:
needs and problems business encounters when goods
and services are crossing the border. Furthermore the • Encourage cross-border PPP projects on crucial
common planning, extension and maintenance of physical infrastructure development.
infrastructure, such as roads, ports and railways is a
necessary precondition for the growth of the logistics Further, the following measures could be envisaged
sector. Stronger partnership between the public and inter alia:
private sectors will help respond to key challenges.
• Link up the Council of Director-Generals of
Such partnerships generate wider choice of innovative the five customs authorities with business (UME)
solutions, better value for more and new sources of • Agree on the computerized exchange of data
financing especially in large infrastructure projects. Public- among customs authorities
Private-Partnerships (PPP) would be a way to integrate • Finalize the Trans-Maghreb-Motorway and extend
Strong and thriving commerce and industry is a is adapting these instruments to the current legal and the business view in further infrastructure development. the Open Sky agreements
fundamental prerequisite for raising prosperity, creating economic state of play, is ready to provide the necessary
jobs and ultimately improving welfare in a region which technical assistance to bring the “acquis Maghrébin” back Finally, the investment in and use of Information- and
has far too long suffered from disintegration and lack of to live. Communication Technology (ICT) structures are key in
cooperation.
The push for a successful IMCI is suggested to rest
The UME strategy to launch the IMCI is a clear call for on pragmatism and direct dialogue with national
giving commerce and industry the necessary framework to governments and authorities. The attached Strategic
play their role in the Maghreb of the future. Action Plan lists concrete topics to be dealt with on short,
medium and long term.
Open competition and free trade across borders are
crucial elements in a “new deal” for the Maghreb. The These are the beginnings of a long journey for Maghreb
free movement of goods, services, capital and people business to convince and demonstrate to politicians,
will boost growth and turnover for the many businesses populations and even some times business that the
waiting to flourish in the Maghreb. way forward to growth and enhanced prosperity goes
through more cooperation thus realizing what was already
Liberalization of markets and harmonization of regulation acknowledged 25 years ago; that the Maghreb should be
is key to achieve the goal. Concretely this means a prosperous region and not just five countries trying to
harmonizing different national regulations and thereby struggle through on their own.
smoothing the path for a free trade area, a common or
even a single market. It is suggested to frame the necessary steps forward
under the following headings:
For a start, legal instruments of the AMU framework,
specifically those regarding intra-regional and external Connect markets
trade, investment and cross-border employment have to Dismantle obstacles
be ratified and implemented. The AMU Secretariat, which Encourage investment24 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE FIVE STARS RISING - THE MAGHREB IN TIMES OF CHANGE 25
2. Dismantle obstacles 3. Encourage investment
High tariffs as well as NTB both hinder trade flows The immediate objective should be to: Growth and employment cannot be achieved without a The immediate objective should be to:
considerably. They leave markets fragmented and impede critical mass of investment. Thus it is crucial to provide
competitiveness. Following a logic of integration through • Determine a limited number of “pilot sectors” the basis for a significant increase in intra-regional and • Review the national university curricula with a view
trade, capital and labor, freedom of movement should where all five countries can agree on a deeper external investment. to cross-border business needs.
become a tangible reality. cooperation agenda.
A well-educated workforce contributes significantly to Further, the following measures could be envisaged
Given the reluctance of some countries to further open Further, the following measures could be envisaged a nations or regions economic value creation through inter alia:
up their borders and markets, a sectorial approach could inter alia: productivity and business innovation. The improvement
be useful. In those sectors, where deeper cooperation of the business climate as well as a move towards • Improve financing conditions, especially for the
seems achievable without losing one of the five strategic • Enhance the harmonization of standards better quality education and training are the necessary growing logistics sector
partners, progress should be enhanced. • Ease requirements for cross-border job contracts strategic elements which can create an attractive business • Render administrative procedures more transparent
• Facilitate the access to cross-border banking loans environment for local and foreign investors. • Encourage dual education/training systems (Link up
In these “sectors of the lowest common denominator” and credits university and business)
the free movement of goods and services, workers and Doing business in the Maghreb is currently difficult and
capital should be then established. Other sectors may cumbersome. This is due to insufficient infrastructure,
follow later if experience proves the value added of time-consuming administrative procedures and limited
cooperation. Easy access to capital markets minimizes the access to finance. Skilled young and motivated employees
financial costs for businesses, contributes to increased are easily found but vocational training does in many
investment, and stimulates growth. Therefore, especially cases not meet the needs of business in 2014.
the free movement of capital has to be further developed
as the access to financing as well as money transfers are
indispensable conditions for successful and sustainable
business.2 ENTREPRENEURS AS INDISPENSABLE PARTNERS OF THE PROJECT Competing globally means closing ranks. Maghreb countries can assert themselves together with a critical mass of comparative advantages. In this matter business is an essential partner to rely on.
28 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE ENTREPRENEURS AS INDISPENSABLE PARTNERS OF THE PROJECT 29
2.1. STRENGTHENING COOPERATION
BETWEEN EMPLOYERS 2.2. W
HERE BUSINESS
FEDERATIONS CAN STEP IN
The IMCI is rooted in a spirit of cross-border exchanges. Table - Maghreb countries’ ranking in 2013 Doing
Catalyzing expectations The Maghreb private sector has been following closely the Business Report
economic development in each of the five countries for
Since the creation of the AMU in 1989 Maghreb business Maghreb countries are high. For many the moment has decades. Qatar 48 Algeria 153
has never blown out the flame of cooperation. Despite the come to give reinforced economic cooperation a new
painful 1994 deadlock, which has been paralyzing political chance through the AMU process. One simple but compelling observation has been made
Slovak Republic 49 Burkina Faso 154
action towards closer economic integration, Maghreb repeatedly: With more intra-Maghreb trade, every single
entrepreneurs have remained defiant. Like in 1989 a climate of change and renewal drives national economy would be better off22. Nevertheless
complex transformation movements which the national efforts to dismantle visible and invisible obstacles, such as Kazakhstan 50 Timor Leste 172
Circumventing the diplomatic labyrinths, they have chosen level cannot embrace alone. Action has to be taken to lacking infrastructure or diverging legislation, have been
a pragmatic approach to balance the shortcomings of strengthen the Maghreb as a whole- Deepening the half-hearted or completely absent. Tunisia 51 Mauretania 173
national policies. After all, it is business which has to pay cooperation between the five UME Members through
the price for the costly absence of regional integration. permanent structures and a common communication But the Maghreb business community has also looked Spain 52 Benin 174
strategy is a first step. beyond the regional scope and it is disturbing to realize
Employers federations in the five AMU member states, that the Maghreb has fallen behind compared to other
Kosovo 86 South Sudan 186
which show a natural interest in expanding the room On the occasion of the 25th anniversary of AMU in 2014 a regions in the world which are growing faster and
for growth, have been one of the few “first movers” number of serious challenges lie ahead which bear at the performing better. Furthermore foreign investment in the
Morocco 87 Libya 187
in renewing inter-Maghreb dialogue. In 2007 CGEM same time unexpected opportunities: Maghreb countries could be intensified- if the necessary
(Morocco), UTICA (Tunisia), CAP (Algeria) LBC (Libya) business environment was in place.
and UNPM (Mauretania) ushered in a new era by founding • Economic: Growth is recovering but it is still too Uruguay 88 Central African 188
the Maghreb Union of Employers (UME) in Marrakech. weak to absorb the large population flows into the Improving the conditions for business in the Maghreb is Republic
job market. a major goal of the IMCI. Today, the World Bank’s 2013
By agreeing to bundle their forces in order to reinvigorate “Doing Business Report”23 draws a fairly mixed picture Iran 152 Chad 189
Maghreb cooperation, Employers federations thought • Political: The 2011 uprisings have raised the level of of the region’s economies. While some are doing already
ahead. And this has paid off: When in 2011 the great political participation. At the same time religious well, others lack behind. Libya is currently rated as one of
uprisings transformed social and political structures in extremism and security threats have increased. the last countries on the list.
Tunisia and Libya, calls for mastering the future challenges
on a Maghreb scale were omnipresent. • Social: Youth unemployment and the widening of Creating a predictable and growth-friendly regional sketching scenarios for different markets if closer Maghreb
the social gap influence political action. External business climate would result in a double benefit: cooperation was actually put into place.
Since then, there have been more and more reasons to factors such as technological progress and climate Expanding trade and investment inside the Maghreb and
conclude: A private sector initiative makes sense. Maghreb change matter. promoting stronger economic ties with its neighborhood Employers federations do not intend to compete with
business has therefore agreed to start the Maghreb and global markets. governments and elected parliaments which will decide
Initiative of Commerce and Investment (IMCI). On the on the future of each country. At the same time they
basis of the UMCI Maghreb business will further strengthen Business can step in where it is in the know: Firstly in are convinced that further action towards a better and a
its cooperation to catalyze a powerful spill-over effect.21 assessing the current situation in terms of trade within closer Maghreb is more than urgently needed to free up
the Maghreb and competitiveness and; secondly in growth and create employment.
This move can translate into a dual signal: For politics to
wake up and for Maghreb peoples join forces.
After the 2011 events expectations among citizens in30 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE ENTREPRENEURS AS INDISPENSABLE PARTNERS OF THE PROJECT 31
2.3. THREE REASONS
TO JOIN FORCES
The different degree of the 2011 Uprisings throughout the Tighter cooperation between the five Maghreb countries is 1. COMPARATIVE ADVANTAGES
region can at least partially be explained by the variable more than necessary and desirable.
success of national growth and employment models in the • Ample natural resources: Abundance of natural gas and oil, phosphates, iron, sun hours, fishing areas
past. While regimes in Tunisia and Libya had to step down, Positive political signals, which had been virtually absent and fertile soils illustrates the common Maghreb wealth.
Morocco and Algeria managed to restore social peace during a decade, came upon in 2012 and 2013. Besides • Critical mass of consumers and internal demand: Today the AMU area counts more than 90 million inhabitants;
without major confrontations. a number of inter-ministerial meetings on an AMU scale, in 2025 there will be almost 110 million.
a number of Heads of State and Government expressed • A young and skilled human capital: In the next ten years the per capita output as well as private savings
Nevertheless the whole region has been affected since their willingness and conviction to re-launch intra-regional and investment can be significantly raised.
by a climate of uncertainty, rising security concerns cooperation after long years of silence and mistrust. • A consistent industrial base and a dynamic services sector: Even though their potential is not fully exploited
and changing international power structures. Regional there is promising activity in a number of branches.
GDP growth has been relatively unsteady since the On his official visit to Tunisia’s Maghreb neighbors • Favorable geostrategic position: Situated between Sub-Saharan Africa, Europe and the Eastern Mediterranean,
revolutionary movements and investor confidence remains President Moncef Marzouki in spring 2012 called the Maghreb both accesses crucial coastlines and over-land-transport routes of global trade.
weak24. repeatedly for the revitalization of AMU. Further, King • Cultural heritage and biodiversity: With more than 15 million visitors per year tourism is already one
Mohamed VI of Morocco, referred to his speech from the of the economic trumps of the region.
While Egypt has relied considerably on reconstruction aids throne in June 2012 to Morocco has an integral part of the
by the Arab Gulf States, Maghreb countries are left behind. Maghreb. Also an improvement in quality of Moroccan-
Some have either sought assistance of the International Algerian relations is tangible.
Monetary Fund (IMF) or try to overcome the current 2. TANGIBLE GAINS
economic atony by national strategies. A number of windows of opportunities are opening.
Common strengths and assets Maghreb countries share • Reduction of transaction costs: Currently intra-Maghreb value chains are fragmented. Removing Non-Tariff-
The urgency of the current economic and political state of should be mobilized now. Barriers (NTB) increases efficiency and saves time.
play in 2014 highlights once more: • Harvest economies of scale: Using cross-border complementarities in production and services helps to
significantly reduce production costs.
• Resistance to external shocks: Macroeconomic policy coordination helps to better meet external shocks,
such as the Euro Crisis.
• Generate innovation: Pooling competences and skilled labor facilitates the development of avant-garde products.
• Competitive goods and services: A diversified offer extends the choice for Maghreb consumers and ensures
Figure: Three major factors of success of tighter cooperation a competitive level of prices.
between Maghreb countries
3. GLOBAL VISIBILITY
• Regional value chains: The Maghreb is embedded in a dynamic neighborhood. Better intra-Maghreb cooperation
COMPARATIVE facilitates future agreements with the EU.
ADVANTAGES • Global markets: The participation of international instruments helps to diversify trade relations.
• Attraction of FDI: A common intra-Maghreb trade framework provides stability and improves the investment
climate.
• Trade negotiations: A common basis makes the Maghreb countries stronger when raising claims and concerns.
• Benchmarking: International best practice can be a valuable input. At the same time Maghreb countries can
provide useful advice to other regional cooperation agreements.
TANGIBLE GLOBAL
GAINS VISIBILITY3 AT THE CROSSROAD: RECOMMENDATIONS AND FURTHER ACTION Shaping the UME within permanent structures gives trade integration in the Maghreb a new meaning. If business is able to lead a comprehensive strategy towards growth and employment by identifying the major fields of action, it will get other stakeholders on board.
34 MAKING THE CASE FOR MAGHREB BUSINESS IN TIMES OF CHANGE AT THE CROSSROAD: RECOMMENDATIONS AND FURTHER ACTION 35
3.1. S
TRUCTURES FOR
BUSINESS ACTION
When the five Maghreb Employers federations decided Still, in order to make UME a genuine stakeholder ready to Table: The added value of tighter cooperation between Maghrebine Employers federations
to bundle their forces by founding the UME in 2007 they successfully advocate for growth, employment and shared
were anticipating a genuine structure of opportunity. prosperity on a Maghreb scale, its organization as well as
Today this strategic move pays off: its policy priorities need to be further developed. RECOMMENDATION VALUE ADDED
After the 2011 Uprisings it is not only a convenient forum A comprehensive action plan which is outlined in this Establish a permanent Since its creation in 2007 the UME has organized successfully two business fora.
to address common challenges in a new and effective way. chapter addresses both: UME Secretariat In fact further institutionalization would ease considerably the collaboration of the
It also bears the potential to unlock AMU structures. UME’s five federations and strengthen their credibility and standing vis-à-vis national and
main strengths are: • How to establish solid structures to international stakeholders.
better organize A physical structure should also be complemented by a website geared towards the
• Pragmatism: Focusing on the basic requirements for members and the media.
fruitful cooperation is possible outside the domain • Which policy priorities to voice
of politics. in the years to come Policy input Comprehensive expertise on economic integration in the Maghreb has been collected
since the creation of AMU and there is still need for more. However the challenge
• Diligence: Almost 90 million consumers deserve Coordination capacity generated through continuity and • Sectorial remains to thoroughly review, update and bundle findings on the state of play in
better products and modern services. Intra-Maghreb competence sharing is a formula UME should embrace. committees different sectors.
cooperation can help to achieve this. The central goal is to fill the IMCI with life as soon as • Expert groups
possible. Sectorial Committees (business representatives)
• Foresight: Business can help to create jobs of the Business representatives could take up this task in a pragmatic way by screening legal
future, reduce poverty and provide a save social and instruments and cooperation mechanisms on their effectiveness and applicability.
ecological environment.
Within 2-4 annual sessions concise position papers should be drafted and then
addressed by the UME Secretariat to competent national authorities.
A certain number of committees limited to 5-10 members should be envisaged for
the following sectors:
• Agriculture
Figure: Multilevel Strategy Spectrum of the IMCI
• Energy
• Services and tourism
• Industry
• ICT and telecommunications
Coordination
• Infrastructure and logistics
UME Secretariat
Expert working groups
At the same time expert groups consisting of representatives from public
administration, the AMU Secretariat, academia and civil society should revisit the
regional integration process with regards to its concrete output and prospect in times
Visibility Advice of great changes.
International Sectorial committees
liaison offices and expert group Within 3-6 meetings policy-oriented position papers should be drafted being an
Growth integral part of the Annual progress report.
Employment
Prosperity
The following fields should be covered:
Exchange Best practice • Customs and tariff barriers
Dialogue UME/UMA Business
Roundtables
• Macroeconomic governance
• Employment and social dialogue
• Attraction of FDI
• SME promotion, vocational training and innovation
It would be up to the UME Secretariat to coordinate and prepare the sessions
Annual report and forum of sectorial committees while expert groups are planning their meeting rhythm
Business award
Scholarship autonomously. However, the exchange of ideas between committees and expert
Assessment groups is necessary.You can also read
