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FEMISE and IM at COP23, BONN 2017

UPDATE 9/11/2017 (17h30)

Panelists at Pavillon C06 (ENERGIES2050), Zone Bonn.

In the joint session at COP23, FEMISE and Institut de la Méditerranée (IM) presented the preliminary version of the report “The challenges of climate change in a Mediterranean in transition – From the Paris agreement to implementation” published with ENERGIES2050.

After a brief presentation of IM and FEMISE activities, Dr. Constantin Tsakas (General Manager of Institut de la Méditerranée, General Secretary of FEMISE) highlighted how the report is part of an ongoing dynamic between ENERGIES2050, FEMISE and IM. As part of their partnership, the three associations produce an annually-updated report on climate issues in the Mediterranean, putting into perspective the economic realities of countries of the South bank and suggesting courses of action and policy recommendations. Annual updates allow for the report to be evolutive, integrating the exchanges with the civil society, private and public actors. The idea being to i. produce research that is policy relevant and which can lead to concrete solutions and ii. foster an ecosystem of EU-Med actors associated with Climate Change concerns to have impact at the macro, meso and micro levels. The powerpoint presentation of Dr. Tsakas is available here.

Regarding the Paris agreement, fulfilling it requires countries to rapidly implement nationally determined contributions (NDCs), meet emissions reduction targets for 2020 and set future targets that are even more ambitious. Dr Tsakas stressed that this is far from a done deal for the South Mediterranean (MED) countries as a whole, where a lot remains to be done to formulate the many rules and prerequisite procedures and to specify more clear-cut means of implementation.

Asked on which Med countries are ahead, Dr Tsakas stressed that research show countries like Morocco to be considerably ahead in terms of policies and actions towards climate change. Countries such as Algeria, Tunisia and Palestine, also seem to be willing to take valiant measures for mitigation adaptation to climate change. Others, seem to be reforming mostly on paper or facing reluctance from domestic economic interests.

Replying to questions as to what governments could do more effectively, Dr Tsakas stressed that MED governments and stakeholders need to think about the various constraints on the effectiveness of the Paris Agreement, identify partners and practices that could complement the process more broadly. They should stop developing their strategies in isolation and take into account that several MED-specific programs and institutions are already present to help in implementing climate-change policies. Governments will need to better map their threatened regions, dress a long-term plan on climate change and actually apply it. However, solutions shall always be taken in an integrated manner, considering the economic and social reality of MED countries after the Arab Spring and the situation of workers in energy-intensive industries.

Dr Tsakas invited participants to provide feedback as to their respective countries positions on the environment and share their concerns which could then be included in the finalized version of the report. This being an evolutive and dynamic process, Dr Tsakas stressed that the finalized report will be presented during a launch event organized by Institut de la Méditerranée in partnership with ENERGIES 2050 and FEMISE in Marseille (France, end of Q1 2018). During this event a ENERGIES2050 report on Territorialization of Climate Change Agreements will also be presented. Presenting the two complementary reports at the Marseille workshop will allow initiating debates between academics, the civil society and policymakers at the local level to go towards concrete solutions.

 

UPDATE 9/11/2017 (12h30)

FEMISE and Institut de la Méditerranée were invited by United Cities and Local Governments of Africa (UCLGA) and ENERGIES 2050 Association as discussants to the Session “Issues and Opportunities for the Territorialization of Nationally Determined Contributions (NDCs) in Africa” (11H00 – 12H30 – PAVILION ENERGIES 2050 CGLUA AND DING TAI CO., LTD. – ZONE BONN).

In his speech, Dr. Constantin Tsakas (GM Institut de la Méditerranée, GS FEMISE) emphasized how the biodiversity of the Mediterranean and Africa is threatened by climate change. The increase in temperatures could lead to a decrease in tourist demand in coastal areas by almost 6% in some countries. Difficulties of access to water resources are also increasing in some territories. In addition, climate change would also affect local agriculture through its effect on crop yields.

Dr. Tsakas emphasized that territorialisation of climate agreements is necessary by setting the objectives of the agreements at the level of communities and territories. An attenuation component would help to control energy demand and reduce CO2 emissions. An adaptation component would reduce the vulnerability of the territory. There is a need to move towards policies that go beyond sectoral decompartmentalisation and which can involve more local and regional policy-makers, entrepreneurs and representatives of civil society. The ENERGIES2050-UCLGA Report on the Territorialization of NDCs could be an ideal springboard for initiating the debate.

This report is complementary to the ENERGIES2050-IM-FEMISE report on “The challenges of climate change in a Mediterranean in transition” presented in a future session. Both are part of a dynamic to allow the emergence of a real ecosystem on issues related to climate change.

8/11/2017

Stéphane Pouffary (ENERGIES2050), Gaelle Yomi (CGLU Afrique) and Constantin Tsakas (Institut de la Méditerranée and FEMISE)

FEMISE and IM were today’s special guest speakers at the FRANCE COP23 Pavilion (16h-17h), along with our partners ENERGIES2050 and CGLU Afrique. Many thanks to FRANCE Pavilion and our partners ENERGIES2050 for a constructing debate !

Now, join us tomorrow Thursday, November 9th, 13:00-14: 30, for the IM-FEMISE session at COP23 presenting the preliminary version of the report “The challenges of climate change in a Mediterranean in transition – From the Paris agreement to implementation” that we publish with ENERGIES2050 (last year’s edition here). The presentation will take place at Pavilion C06 (ENERGIES2050), Bonn Zone. Come join us!

Pavillon C06 (ENERGIES2050), Zone Bonn.

For the pre-COP23 interview of Dr. Constantin Tsakas, click here.

Moreover, on the occasion of the COP23, we invite you to rediscover the FEMISE publications on the theme “Environment, energy, climate change” by clicking here.

Finally, we invite you to rediscover the MED2012 Report on Green Growth in the Mediterranean, a flagship report in which the experts from Institut de la Méditerranée and FEMISE participated. This report addressed the issue of how green growth can achieve sustainable development by enhancing the productivity of natural assets while preventing the negative social consequences of Environment degradation, notably in terms of the fundamental issue of employment.  It is available here.

COP23 and climate change in the Mediterranean: Institut de la Méditerranée and FEMISE stand out as key academic actors

In the Mediterranean, the effects of climate change will always be felt more than elsewhere. Reduction of greenhouse gas emissions and adaptation needs of riparian countries are more than ever necessary.

Committed actors for the implementation of sustainable development in the Euro-Mediterranean area, Institut de la Méditerranée and FEMISE have been collaborating during the last two years with association ENERGIES 2050 on climate-related, environmental and energy issues. As part of their partnership, the three associations produce an annually-updated report on climate issues in the Mediterranean, putting into perspective the economic realities of countries of the South bank and suggesting courses of action and policy recommendations. The 2016 edition of the report, directed by ENERGIES2050, was presented at COP22 in Marrakech (available for download by clicking here). A preliminary draft of the forthcoming edition (2017/18), co-directed by the three partners, will be presented at a joint workshop during COP23 (Bonn, November 9th 2017) in order to integrate discussions with actors present during the COP23 summit. The entire ENERGIES 2050 program at COP23 in Bonn, including the joint workshop with Institut de la Méditerranée and FEMISE, is available by clicking here.

General Manager of Institut de la Méditerranée and General Secretary of FEMISE, Dr. Constantin Tsakas offers some lines of thought for the future.

What will be the added value of the 2017 edition of the Climate report ?

This edition will further explore the progress made by Southern Mediterranean Partner Countries (MPCs) in addressing the threats of climate change. More specifically, this new report will position them vis-à-vis the Paris Agreement.

As you may know, the latter commits all signatories to contain global warming “well below 2 ° C compared to pre-industrial levels”, to achieve carbon neutrality, to cooperate in strengthening a “climate change education”. Its open and evolving nature reinforces commitments to mitigate the effects of climate change over time. The 2017 edition of the report will therefore make possible to better evaluate the coherence of MPC’s past and present mitigation and adaptation actions.

How are MPCs positioned internationally in terms of mitigation and adaptation efforts?

Dr. Constantin Tsakas, General Manager of IM and General Secretary of FEMISE

Countries like Morocco are clearly ahead in terms of policies and actions. Morocco was one of the first countries in the region to sign and ratify the Paris Agreement. But even before that date, the country had already put in place specific legislation on the protection and conservation of the environment, on the fight against air pollution and on environmental impact assessment. In addition, in 2008 the government implemented the “Green Plan for Morocco” which represented a long-term policy (2008-2020) that put emphasis on a more sustainable agricultural sector. Other countries, such as Tunisia, are lagging behind but seem to show some willingness in moving forward. Before ratifying the Paris Agreement (March 2017), the Tunisian government took initiatives to limit the effects of climate change at the national level. In terms of legislation, Tunisia was actually one of the few countries to recognize climate change in its Constitution.

That being said, many countries seem to be reforming mainly on paper or to be facing reluctance related to already established economic interests. The Paris Agreement and environmental protection laws are often perceived as barriers to economic activity and political regimes are reluctant to adopt pro-environmental reforms. In general, there is a clear difference between what has been agreed and the results obtained. There is also little cooperation between Mediterranean countries during major summits, which means that even if national initiatives might exist they are doomed to fail as they do not translate into significant regional response.

What is the answer to MPC’s lack of coordination on environmental policy?

Several programs and institutions operating in the Mediterranean already exist to assist MPCs in the process of implementing climate change mitigation and awareness policies. The Union for the Mediterranean offers a general vision for low carbon development. The United Nations Convention for the Protection of the Marine Environment and Coastal Regions of the Mediterranean (Barcelona Convention) provides a legal and institutional framework for concerted action among Mediterranean countries. Mediterranean networks of experts (FEMISE, MedECC, ANIMA, Plan Bleu) can also be mobilized and act as bridges between the scientific community and MPCs policy makers as they have considerable dissemination potential of politically relevant studies. Finally, there are Funds active in the region that can significantly support the implementation of climate-related projects.

What would you like to accomplish with the presence of Institut de la Méditerranée and FEMISE at COP23?

The presence of Institut de la Méditerranée and FEMISE at COP23, made possible thanks to our partnership with ENERGIES 2050, will allow us to interact with civil society actors, representatives of the public and private sectors and territorial experts present at the COP23 summit. These discussions between academics and operators of all kinds will provide feedback on the exceptional opportunities that the environment presents in terms of growth, investment, job creation and social cohesion. The debates will therefore enrich the report that we will co-publish with our partner ENERGIES 2050.

Following COP23, the 2017-2018 edition of the report “The Challenges of Climate Change in a Mediterranean in Transition – from the Paris Agreement to Implementation” will thus be finalized and presented during a launch event organized by Institut de la Méditerranée in partnership with ENERGIES 2050 and FEMISE (in Marseille, France, end of Q1 2018). Likewise, a discussion around the conclusions of the report with the territorial actors of Marseille will allow them to communicate on their environmental policies. Some of their recommendations could then be illustrated in the context of the 2019 edition in a process that remains evolving. The Marseille workshop will also illustrate the dynamics generated by our three associations and allow presenting the latest research produced from our respective networks on climate issues.

 

Interviewed by FEMISE Staff

 

Potential Accession to the Revised WTO Government Procurement Agreement: The Cases of Egypt and Turkey

Government procurement concerns how public authorities spend taxpayers’ money on goods, services and infrastructure. In each country public procurement is typically governed at the national level by setting rules that try to balance a number of goals. Of these goals, transparency, non-discrimination, integrity and competition are probably the most important.

The aim of transparency is to ensure that the rules are followed and that non-compliance can be identified and addressed.

The Research Project considers the benefits and costs of accessing the WTO Government Procurement Agreement (WTO GPA) for Turkey and Egypt. While Paper 1 considers the case of Turkey, Paper 2 analyzes the case of Egypt. Finally, Paper 3 provides a Synthesis Report.

The project shows that:

  • The WTO GPA significantly increases the probability that a foreign firm will win a public procurement contract in the EU member and affiliated states.
  • The WTO GPA promotes a more competitive environment by increasing the number of offers for a given contract.
  • The WTO GPA significantly lowers the risk of corruption by decreasing contracts with a single offer, reducing the success ratio of firms and allowing firms with lower network strengths to win contracts.
  • The competitive environment in a country is a significant determinant of the efficiency of public procurement. An increase in the number of offers decreases the contract price with respect to the estimated cost.

Thus, the WTO GPA commitments will secure better value for the money spent by governments in their procurement processes as a consequence of applying the WTO GPA principles of transparency, non-discrimination, integrity, and competition.

Given that the WTO GPA’s provisions will certainly benefit Egypt and Turkey, it is surprising that to date neither of the two countries have become signatories of the WTO GPA.

Forthcoming: FEMISE annual conference, Valletta, Malta, February 8th-9th 2018

FEMISE is happy to announce that its annual conference will take place this year in Valletta, Malta, on the 8th and 9th of February 2018.

The FEMISE annual conference provides a platform for the different actors of the EU-Med region of research institutes’ members, academics, policymakers and representatives of the international community including the EU, to engage in a constructive dialogue about the future of the region and the role the EU can play in the context of the new ENP. 

This year’s theme will be on:

«Neighbours of Neighbours: Relation and Cooperation of the EU-Med towards Africa»

The concept note, the agenda and the opening of registrations will be made available in the following weeks.

 

Launch of FEMISE EuroMed 2017 report in Brussels on the 23rd of November

Economic Management Under Fire: How did the South Med Policy-Makers Respond to the Demands for Change?[1]

The report is published on: 23 November 2017 with funding from the European Union.

FEMISE is organising a special event to launch the report in Brussels on the 23rd of November. Agenda of the event is available here.

If you would like to participate in this event, please contact Maryse Louis:m.louis@femise.org

FEMISE is launching its 2017 Euro-Mediterranean report on the transition of the South Mediterranean economies. The report provides a critical analysis of the responses of selected countries of the region to the economic, social and political challenges in the wake of the uprising and recommendations on how to move forward to ensure a successful transition.

“Overall, South-Med countries are at a crossroad. They hold an enormous potential that has been held back by modest economic performance and extractive political institutions. The uprising, which began in December 2011 provided these countries an opportunity to follow a new development path”, state the authors of the report.

The political transition has unavoidably taken a toll on these economies and the governments found themselves facing a number of challenges and difficult decisions to make. For example, on the economic front and in and in an attempt to respond to popular demands and to calm rising social unrests, governments responded by adopting expansionary policies rather than austerity measures. While this policy choice added pressure on existing budget deficits and increased public debts, it is believed that it will help reverse the economic downturn over time.

Seven years on, the development model does not seem to have changed much. To embark on a new course, the new strategy should aim at achieving the dual overarching objectives of consolidating the post-transition democratic pol­ity, on the one hand, while mak­ing the transition towards a dy­namic and equitable economy, on the other”, rerecommended the authors – who also provide targeted policy recommendations on how to achieve this objective in the report.

In 5 chapters and through a critical assessment of the performances of five South-Med countries in transition (Algeria, Egypt, Jordan, Morocco and Tunisia), this report attempts to answer the following questions:

  • What were the immediate economic consequences of the political transition in South-Med countries?
  • How well did policymakers respond to the economic and social adversities associated with the political transition?
  • Based on the analysis and the likely political evolution in these countries, what can be done to bring about healthier macroeconomic balances, job creating growth and greater social inclusion?

 The report is written by a group of international experts and senior macroeconomists, political economists and social economists under the management of the Economic Research Forum (ERF, Cairo). Dr. Ahmed Galal, the editor of the report is the Chairman of the Board of the MENA Health Policy Forum and former ERF Managing Director and former FEMISE President; Dr. Ishac Diwan is  visiting professor at Columbia University and holds a chair at Paris Sciences et Lettres; Dr. Ibrahim Elbadawi is the President of FEMISE and Managing Director of ERF; Dr. Hoda Selim is an Economist at the IMF; Dr. Zafiris Tzannatos is the Former professor in and chair of the Economics Department at the American University of Beirut; and Ms Jala Youssef is an economist of ERF and FEMISE.

The Euromed Report will be published on the FEMISE (www.femise.org) and the ERF (www.erf.org.eg) websites on the 23 November 2017.

 The Euromed Report is an annual publication of FEMISE that is addressing themes of importance and interest to the EU-Med region. The report brings value-added to the themes it covers through in-depth analysis by economists from the North and the South of the Mediterranean, using a multidisciplinary approach. This brings a common view from the two shores of the Mediterranean and provides policy recommendations that can make a contribution to the South Med countries during their transition.

This report received financial support from the European Union through the FEMISE project on “Support to Economic Research, studies and dialogues of the Euro-Mediterranean Partnership”. Any views expressed in this report are the sole responsibility of the authors.

Please contact FEMISE for more information: contact@femise.org

[1] This report and its launch event received financial support from the European Union through the FEMISE project on “Support to Economic Research, studies and dialogues of the Euro-Mediterranean Partnership”. Any views expressed in this seminar are the sole responsibility of the authors and the speakers.

NEXT SOCIETY Advocacy Panel for Innovation, October 26th, Amman (Jordan)

The Next Society, where FEMISE is a partner, is pleased to invite you to become a member of the National Advocacy Panel for an Innovation Policy Agenda in Jordan and to take part in its first meeting that will be held in Amman on Thursday 26 October 2017. 

This high level meeting is organised by Royal Scientific Society with the support of ANIMA Investment Network and with participation of FEMISE in the frame of THE NEXT SOCIETY, with selected national and international innovation stakeholders.

Acting as a Task Force at national level, the goal of THE NEXT SOCIETY Advocacy Panel is to oversee innovation roadmap formulation, its implementation, evaluation and update, with the objective of:

Strengthening the national Innovation system,
Fostering coordination among actors involved,
Improving concrete instruments of the innovation policy.

The first meeting of this Advocacy Panel will include presentations, from FEMISE and other experts, of ranking analysis and enterprise surveys as well as international best practices on innovation and competitiveness.

The priority policy measures to support innovation and competitiveness decided by the Advocacy Panel members, will be implemented thanks to technical assistance missions conducted by international experts.

To reach its goals, and guarantee a sustainable and inclusive approach, the Advocacy Panel will be composed of EU and Jordanian private sector representatives and investors, innovation stakeholders, relevant Ministries and their agencies, the Delegation of the European Union to Jordan as well as academic experts including FEMISE. Special attention to the private sector will be given to ensure they are involved in the national innovation agenda.

The Royal Scientific Society, FEMISE, Kedge Business School, Bpifrance, MENA Business Angels Network, Scientific Research Support Fund, Jordan University, the Higher Council of Science and Technology,  Endeavour Jordan, Jordan University of Science and Technology, OASIS 500, etc.

To participate in this meeting, please contact:
Dr. Mohammed Aljafari, Royal Scientific Society
m.aljafari@ipark.jo
Tel. (962 6) 5341381
Mathias Fillon, ANIMA Investment Network
mathias.fillon@anima.coop

Download the programme

Download the concept note

Do emigrants self-select along cultural traits?: Evidence from the MENA countries

Migrants’ selection by cultural traits, beliefs and practices has been largely understudied in the existing literature. In an attempt to fill this gap, this paper investigates whether migration aspirations, concrete plans to emigrate, and preferred destination choices are influenced by cultural traits in the Middle East and Northern Africa (MENA). We use the Gallup World Poll (GWP) surveys, which document migration aspirations, cultural traits and many other characteristics of individuals. We limit our sample to 17 MENA countries where Gallup conducted at least one wave of its survey between the years 2007 and 2016.

To begin with, we show that migration aspirations are correlated with actual migration flows obtained from the OECD International Migration Database. This suggests that the patterns of migration aspirations are likely to be similar to the patterns of actual migration. The average share of aspiring migrants in our sample is around 24%. Syria exhibits the largest share with over 35%; Jordan and Algeria come next at about 30%; Niger, Azerbaijan and Chad exhibit the smallest shares at about 20%. Through cultural proximity and network effects, former colonial ties are still affecting the preferred destinations of aspiring migrants. On average, 52.3% of the aspiring migrants from the MENA would like to move to an OECD destination country. This share amounts to 90% in Morocco and Algeria, while it is around 10% in Yemen and Niger.

We conduct a two-stage Principal Component Analysis on a set of 12 opinion questions to identify four synthetic indicators of cultural traits. We find that Lebanon and Azerbaijan are the most progressive in terms of gender-egalitarian attitudes. Iran and Azerbaijan are the less religious countries; on the contrary, sub-Saharan African countries (i.e., Chad, Mauritania, Mali and Niger) exhibit the highest levels of religiosity. Iran, Afghanistan and Syria exhibit the highest levels of generosity. Four countries that experienced turmoil and riots during the Arab Spring (i.e., Algeria, Egypt, Tunisia and Yemen) hardly justify the use of violence. We refer to these countries and Syria as the Main Insurgents. In these countries, a large share of the population finds it unjustifiable to use any kind of violence against civilians.

In our empirical analysis, we only consider two cultural traits that are highly correlated with economic development indicators, namely gender-egalitarian attitudes and religiosity. We conduct a set of fixed-effect logit regressions for several subsamples to identify the effect of cultural traits on migration aspirations. The full sample estimates show that aspirations to all destinations are negatively affected by the level of religiosity but are not influenced by gender-egalitarian views. When we distinguish between emigration aspirations to OECD and non-OECD member states, the results reveal that cultural traits are not significant for migration aspirations to non-OECD countries. In contrast, aspirations to migrate to an OECD destination decrease with religiosity, and increase with gender-egalitarian views. In other words, aspiring migrants to OECD destinations exhibit lower levels of religiosity than those who do not intend to migrate. Next, we check whether similar selection patterns apply to individuals who have concrete migration plans for the next 12 months. We find that the effect of religiosity is highly significant and even larger than for migration aspirations; the effect of gender-egalitarian views is insignificant.

We then conduct a large set of robustness checks. First, we split the set of OECD destinations into three subsets that are frequently reported as preferred destinations in the data, namely the European Union, North America and Turkey. The results confirm that the effect of gender-egalitarian views remains insignificant or marginally significant for all sets of destinations, while the effect of religiosity is highly significant when considering OECD, high-income destinations, but not when considering Turkey. Second, we split the sample along education levels, and show that our results are valid for all skill groups. Third, we distinguish between three age categories, gender groups and marital status. Selection by religiosity is significant for all age groups and is greater for men, while positive selection on gender-egalitarian views becomes significant for single women and for all individuals aged 15 to 30. This is the age group in which aspiring migrants are the most likely to realize their migration aspirations. Fourth, we checked whether the intensity of cultural selection varies with aggregate country characteristics such as the shares of Sunnis and Shiites among the Muslim population, the log-GDP per capita, two indicators of institutional quality, and the size of the migrant network in the OECD countries. Our regressions reveal that aspiring migrants from countries with a Sunni minority have more progressive gender-egalitarian views, which also become significant when controlling for migration networks. Seventh, we explored whether the link between cultural traits and migration has been affected by the Arab Spring. We consider the full sample of MENA countries, the Main Insurgents and the other countries. In all specifications, selection by religiosity is always positive and significant. Although the Arab Spring has not affected the intensity of cultural selection in the less affected countries, it has drastically reduced it in the Main Insurgent countries.

Methodologically speaking, we also explore whether our results are driven by differences in the composition of the samples of aspiring migrants and non-migrants. We use the Mahalanobis Metric Matching technique to construct samples of aspiring migrants and non-migrants that are balanced in terms of observable covariates. All conclusions of the benchmark regressions hold when using the matched samples.

We thus conclude that migrants from MENA to OECD exhibit lower levels of religiosity. Moreover, young male or female migrants share significantly more gender-egalitarian views than the rest of the population. Overall, the Arab Spring has increased the relative religiosity of aspiring migrants in the most affected countries. Consequently, emigration to OECD countries has direct implications on the distribution of cultural traits in the population left behind and on the cultural distance at destination. Nevertheless, the effects of cultural selection should not be overestimated. First, emigration hardly affects the distribution of cultural traits in the MENA countries. Emigration towards OECD countries could even reverse the selection effect if migrants abroad transfer more progressive norms and beliefs to their home country. Second, it has a limited (albeit non negligible) effect on the cultural distance between natives and immigrants in the OECD countries.

Call for Proposals Energies 2050 : Organization of events at COP23

The 23rd Conference of Parties (COP23) at the United Nations Framework Convention on Climate Change (UNFCCC) will be held in Bonn, Germany, from the 6th to the 17th of November 2017 under Fijian presidency. This major event on the international agenda is an opportunity for all actors involved and at all levels to reaffirm their commitment and to launch concrete actions.

ENERGIES 2050, a FEMISE partner who also published a report on Climate Change in which FEMISE participated, is a well known and recognized player in the fight against climate change and will be present and very involved at COP23. The association has had the privilege of accompanying several African countries in the preparation of their Nationally Determined Planned Contributions (CPDN) and in the preparation of preparatory files for submission to the Green Fund for Climate. E2050 is the lead author of the Guide to Climate Change Negotiations, published by Institut de la Francophonie pour le développement durable (IFDD), a subsidiary organ of the International Organization of Francophonie (OIF) since COP20 in Lima, and will organize an international citizen art exhibition at the COP23 as part of the ART’s PLANET initiative.

Energies2050 offers you the possibility to suggest one or several events at COP23. This call for proposals should make it possible to share knowledge, demonstrate possibilities, build partnerships and leverage opportunities. If you are interested, you may click here.

Twin Deficits and the Sustainability of Macroeconomic Policies in Selected European and Mediterranean Partner Countries

Our empirical results validate the Twin Deficit hypothesis in both EU and MED samples, but with diverging findings regarding the direction of causality. While the trade balance seems to be driving the budget deficit in MED countries –thereby validating the current account targeting approach – the relationship appears to run in the opposite direction in the case of EU countries, where the budget balance appears to be driving the current account. Given the well-documented dependence of MED countries on trade with the EU and the fact that most EU countries have implemented austerity policies in the aftermath of the financial crisis – thereby restricting aggregate demand and imports – we argue that the ensuing drop in export income for MED countries has contributed to increasing the budget deficit in these countries, by virtue of the uncovered positive causality between the current account and the budget balance. One natural MED policy makers’ response would be to implement austerity measures; however, such measures which may be necessary, are socially costly in the current social context in MED countries, and would not alone permit to stabilize the budget balance given that they would leave the trade balance unaffected. Our findings thus represent a warning against such ‘ready-made’ macroeconomic policy responses and indicate that austerity policy in EU countries have unexpected consequences for fiscal stability in MED countries. We thus call for better macroeconomic policy coordination between the EU and its Southern peripheral MED countries.

A major policy issue to be faced in the coming years is whether macroeconomic policies have reached a dead end and are in a bind. With respect to the introduction of macroeconomic stabilization programs in the EU and MED countries, there is obviously no room to use both monetary and fiscal policies in tandem to curb those macroeconomic imbalances. For the MED countries of Lebanon and Jordan with very limited fiscal space and fixed exchange rates and open capital accounts, monetary policy is already ineffective in terms of macroeconomic stabilization. Egypt rendered its monetary policy more effective in dealing with external shocks after the recent smart move to a flexible exchange rate regime. Tunisia and Morocco seem to be also moving in that same direction. While fiscal space in the EU is also limited due to the past accumulation of huge public debts, the European Central Bank’s (ECB) Quantitative Easing (QE) policy remains an effective tool in preventing the EU’s unsustainable fiscal policies form developing into further debt crises similar to the Greek debt crisis.

With the current debt crisis unfolding in some EU countries, low GDP growth rates and oil prices and high debt levels in several MED countries, fiscal policy is clearly not a macroeconomic policy option anymore due to limited fiscal space. With one monetary policy conducted by the ECB and the absence of a political union, EU countries have registered over the past decade significant current account and budget deficits. Monetary Policy will remain ineffective as long as expectations of the private sector are not adjusted positively, and banks remain in poor shape, mainly Italian and Greek banks. The Greek Debt crisis is negatively affecting the behavior and expectations of businesses and consumers, and austerity measures are negatively affecting aggregate demand and the growth rate of GDP. In particular, stagnant wages and high unemployment rates are adversely affecting domestic demand, especially in the absence of fiscal space in most MED and EU countries due to the accumulation of large public debts and recurrent budget and current account deficits.

In the MED region, the ineffectiveness of monetary policy is due to the presence of fixed exchange rates and free capital movements. This boils down to no role for government policies (fiscal and monetary) to deal with the current macroeconomic imbalances paving the way for future fiscal and currency crises. Thus, the various EU and MED governments will need to: (1) reduce the public sector in favor of the private sector; (2) channel liquidity to the private sector through loans and encourage investments in productive ventures; and (3) reduce government spending and increase only supply side taxes. Finally, given the ineffectiveness of both monetary and fiscal policies, the private sector needs to take a leading role in addressing macroeconomic imbalances by first improving its expectations in both the EU and MED. This would increase the growth rate of GDP and would render debt more sustainable. Once the above is achieved, introduce austerity and structural adjustment measures. This will insure sustainable economic growth and will reduce the likelihood of a future debt and currency crisis.

Social Entrepreneurship as a means to support growth and employment in MED countries

An all-encompassing and sustainable growth model, that creates employment and favours social inclusion, is what South MED countries need. However, despite national efforts, unemployment and all types of inequalities remain high, urging for new approaches. In that respect, Social Entrepreneurship (SE)[1] can offer meaningful prospects and help tackle MED endemic issues since it: i. includes all groups and has great job creation potential, ii. is based on regional development, iii. addresses lack of diversification; iv. offers solidarity responses for all generations.

Aspiring to contribute in unlocking obstacles to development of social enterprises and in supporting social entrepreneurs, FEMISE has undertaken an ambitious effort in linking Social Entrepreneurship (SE) stakeholders in the Euro-Med. These efforts started while preparing its 2014 EIB financed report on Social Entrepreneurship in the Maghreb and continue with its 2018 report on Private Sector development (forthcoming). These efforts set the ground for an unprecedented multi-year strategy for the emergence of SE ecosystems that associates EU-MED cooperation communities along with key MED Social Impact and entrepreneurship support actors.

Ahead of the publication of its 2018 report, FEMISE interviewed some of its key partner actors to offer preliminary insights on what actions they see as priorities to facilitate cooperation between Social Entrepreneurship structures, on which international good practices could be transposable to the South-Med context and on the initiatives their respective structures operate to promote inclusiveness and social utility. Below are excerpts from three key EU-MED actors in the Social Entrepreneurship field.

Thomas Vailleux is a French social entrepreneur based between Paris, Lyon and Beirut, initiator and co-founder of Friends of the Middle East, a social enterprise for the understanding of the challenges of the populations of the Middle East. With a Lebanese team, he writes and co-produces « Changemakers in the Arab World », a documentary film about social entrepreneurs in the Maghreb and the Middle East. With MakeSense, he recently designed a three-week acceleration program dedicated to prototyping 10 solutions focused on Lebanese social entrepreneurs.

Thomas Vailleux: Not all South Mediterranean countries are equal in terms of political will for the development of social entrepreneurship. Nonetheless, I believe it is important to make sharing of best practices, feedbacks, networks and knowledge within the region a modus operandi. This collaborative operational methodology embodies the values ​​of Social Entrepreneurship. This would involve setting up a regional collaboration platform to foster exchange and strengthen cooperation between actors sharing common interests, in particular with a view to opening up to the regional market (through partnerships, exports, regional integration etc.). This platform can take the form of a web platform and a calendar of regional meetings targeting objectives already identified as key by actors such as the Lebanese think tank Beyond Reform & Development.

At the scale of support structures, innovative and effective methodologies have been invented or reinvented to equip social entrepreneurs and professionalize the specific and dual approach of a social entrepreneur (social vs. business). These methodologies are supported by high-growth support structures, cooperating with public and private domains, such as MakeSense international or Ticket for Change in France, whose founders have been awarded numerous times. Moreover, the introduction of legislative measures facilitating the creation of social enterprises and the introduction of tax-reductions for owners of SEs, such as in Italy and France, can be gamechangers. Finally, in « pioneer countries » of SE, telling the stories of solutions and project instigators can quickly become a means of federating communities of “changemakers”.

Friends of the Middle East is an association based in Paris and Beirut, one of whose objectives is to share another face of the region through the stories of the experiences of its citizens, including social entrepreneurs. Through our documentary film project « Changemakers in the Arab World », we seek to promote the inclusion of marginalized audiences by representing them in our film. Our partnerships with NGOs and local and regional foundations enable young people from marginalized areas to be sensitized with the aim of removing them from violence and extremism in order to bring them closer to the “faire-ensemble”. Our program of “projections-action!” in several countries is designed to involve the spectators at the end of the projection through workshops of problem-solving and connections with the actors of the ecosystem.

Shadi Atshan is a Palestinian entrepreneur and cofounder of Leaders Organization and FastForward Accelerator. Shadi led a group of talented professionals in establishing what has become Palestine’s largest entrepreneurship promotion organization (Leaders Organization or Qeiadat). He developed the organization’s portfolio of activities from zero to a portfolio of over $10 million USD in less than 8 years. Currently Leaders Organization is operating in Palestine, Jordan and Belgium. His work has contributed to the creation of over 45 technology startups. Today, Leaders Organization hosts Palestine’s only Technology Park “eZone”, Palestine’s first Startups Accelerator “FastForward”, Palestine’s first Social Enterprises Accelerator “SEA”, and the Palestinian House in Silicon Valley “PHSV” in San Francisco – USA.

Shadi Atshan : Enabling the facilitation for development of the social entrepreneurship structure in general, and in South Mediterranean countries specifically, should be prioritized on three main levels, starting from a broader sense and then narrowing in towards micro-level strategies. A broader strategy should be set to induce the idea of social responsibility, and creating benefits through profitable start-ups throughout the region. Once this strategy is incorporated, workshops and conferences should be introduced within the countries themselves, on how to create or target already existing social gaps within the economy, and create profitable solutions. Finally, the incubators, accelerators, and entrepreneurial-related associations should incorporate tailor-made programs targeting social entrepreneurship programs particularly, and offering the needed training and mentorship to induce the creation of successful start-ups.

Two main international good practices that directly filter into social entrepreneurship initiatives, and lead to the creation of new businesses in the South Mediterranean region are recycling and the transition into solar energy practices. These good practices would guarantee higher efficiency, lower cost, and higher sustainability on the long term for the region as a whole. In addition to encouraging young entrepreneurs to create new start-ups centered around social advancement within their economy. In order to enable such an environment of sustainability and creative thought, certain programs and aspects need to be introduced. The first is research & development programs to encourage the entrepreneurs to create innovative ideas and new products. The second is an international expert network on the ground, to help the start-up receive the mentoring and advise they need, and move to the next level. Finally introduce an Angel network in the region to invest in the entrepreneurs, especially through social initiative start-ups to allow them to expand and create long term benefits.

Social inclusion and utility is one of Leader Organization’s main initiatives, and therefore, one of the programs it undertakes is the Social Enterprise Accelerator (SEA). The concept emerged out of the lack of support to the social enterprises, the accelerator is meant to find sustainable solutions for this issue. A particular emphasis through SEA was directed towards women and youth with the ambition and potential to build sustainable social enterprises that impact their communities will be beneficiaries of an innovative and extensive support program. This project goes even further in promoting engagement, where women and youth from marginalized communities with potential identity issues of concern and importance to them (in society, politics, economics and the environment) develop their own social enterprises, and receive support. The program has provided training for over 150 entrepreneurs age 22 to 30, and has hosted and supported 7 start-ups, with a women participation rate of 42%.

Patrizia Bussi coordinates the Brussels-based European Network of Social Integration Enterprise (ENSIE), representing social enterprises and especially more than 2500 work integration social enterprises across Europe (27 members in 19 EU Member States, Switzerland and Serbia). ENSIE aims to contribute to sustainable development through different actions such as creating links between the job market and the social integration of disadvantaged risk-groups by improving their employment opportunities and productivity. During her time in ENSIE, Patrizia has also worked for two Italian social economy enterprises: the Consorzio Sociale Abele Lavoro and the A-type social cooperative Stranaidea. She was a member of the consultative multi-stakeholder group on social business (GECES), member of the GECES’s Social Impact Measurement sub-group and member of the Italian GECES group, Gruppo Multilaterale sull’imprenditoria sociale. She is now participating in the GECES as observer. Since 2014 she represents ENSIE in the Structured Dialogue with European Structural and Investment Funds’ partners group of experts (ESIF SD).

Patrizia Bussi: I think it’s necessary in each South Mediterranean country to search for the structures of social entrepreneurship and social economy that already exist, helping them in working together so that they can be visible and recognized at national level and so that they can cooperate to unlocking untapped potentials of their territories. Following these important steps, progressive cooperation has to be built among the structures of the whole South Mediterranean.

Identifying international good practices that could be transposable is not an easy task. There are some that have already shown their success such as the Incorpora program in Morocco, or some activities with social impact in Tunisia, launched by the French SOS group. These experiences confirm the importance of taking into consideration the territorial realities (economic, social, historical, cultural) and to adapt international good practices to these realities.

ENSIE represents, supports and develops within Europe networks and federations of Work Integration Social Enterprises (WISEs): efficient tools for access to, social and professional reintegration into the labour market and social inclusion of vulnerable groups. The 2016 ‘Impact WISEs’ study examined 807 work integration social enterprises (WISEs), present in 9 countries of the European Union and including 12,954 disadvantaged workers. The study identified that 48,5% of disadvantaged workers found a job in the same WISE, in another WISE or in the classic labour market while 16,5% became self-entrepreneurs or found professional training.

 

The multiple interviews carried out by FEMISE showed the need to support the development of an enabling policy and regulatory environment for MED SE’s. They also highlighted how it is essential to raise awareness and capacity of ecosystem stakeholders to support the growth of SE’s that contribute to value creation and employment generation in MED countries. They also emphasised the importance of communication and sharing of best practices.

Based on these observations, FEMISE mobilized its scientific community for its 2018 report on Private sector development that will include a chapter on Social Entrepreneurship potential in the Med countries. The chapter will focus on the range of tools (notably financial) to support and develop SE in this region and present potential actions on the EU-MED level that could support and develop SE. The report is expected to be available in Q1 2018.

Article by Constantin Tsakas

[1] For a Social Entrepreneurship panorama in selected MED countries, read the FEMISE-EIB (2014) report « Économie Sociale et Solidaire: Vecteur d’inclusivité et de création d’emplois dans les pays partenaires méditerranéens? ». Executive Summary (in english) available here.

Full study (in french) available here. 

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