Tag Archives: Mediterranean

Analyzing the impact of a EU-Tunisia DCFTA (report FEM43-16)

From a policy perspective, what do we conclude from these results: The opening
up of markets leads to opportunities and to the possibility of net welfare gains.This
result is well established from international trade theory and from a wide range of
empirical evidence. There are many sources of these gains, but only some of which
are accounted for in a modelling framework such as the one we have used. The
extent of the gains will depend critically both on the level of non-tariff barriers
between the EU and Tunisia and on the extent of any reductions in both tariff and
non-tariff barriers. It is therefore extremely important that more work is
undertaken to better understand the extent of these barriers and what specific
policies are needed to ensure their removal.

Financial Inclusion and Stability in the MED Region: Evidence from Poverty and Inequality (report FEM44-01)

Despite a significant growth in profitability and efficiency, the Middle East (MED) well developed banking system seems to be unable to reach vast segments of the population, especially the underprivileged ones. To this end, the onus of policymakers in the region is to create effective opportunities for financial inclusion, and subsequently poverty and income inequality reduction. Whether they have succeeded in their endeavor is an empirical question we seek to address in this research project. Using Panel data, GMM and GLS econometric models, and a sample of six MED countries (Al GMM and GLS econometric models and a sample of six MED countries (Algeria, Egypt, Jordan, Lebanon, Morocco and Tunisia) over the period 2002-2018, this paper assesses empirically the impact of financial inclusion on income inequality, poverty, and financial stability in the MED region. While the empirical literature on the region is relatively scarce, this paper adds to that literature by bridging a significant existing gap, especially in the aftermath of the recent financial and debt crises and the recent political, social, and military turmoil that have been unfolding in several MED countries.

Our empirical results have shown that financial inclusion decreases inequality but has no significant effect on poverty. Inflation and population increase both inequality and poverty. Other empirical results have shown that the secondary enrollment ratio, female labor force participation and the trade openness variables are found to significantly affect poverty. While the empirical evidence indicates that enhanced financial integration is a contributing factor to financial instability, an increase in financial inclusion and in population contributes positively to financial stability. This study has also shown that greater access to financial services is positively contributing to the resilience of the banking system deposit funding base. This is particularly important during times of financial crises. Enhanced resilience of bank funding supports overall financial stability of the banking sector and the entire financial system. The latest debt and financial crises have shown that financial liberalization and inclusion in MED may not always be conducive to poverty reduction and financial stability improvements.

Our empirical findings have important policy implications. MED policy makers face tradeoffs when deciding whether to focus on reforms to promote financial development (financial inclusion, innovation, financial access, etc…) or whether to focus on further improvements in financial stability. However, synergies between promoting financial development and inclusion and financial stability can also exist. The results of this study could help foster a better policy to reform the financial sector by demonstrating how broadening the use of banking can have a direct impact on income distribution.

The recent and uncoordinated liberalization attempts have rendered MED financial and banking sectors more vulnerable to the recent financial and debt crises. In particular, the fast attempts to liberalize and financially integrate the Egypt, Jordan, and Morocco’s financial markets with the more mature markets of the United States and Europe has had devastating consequences on their banking sectors and stock markets.

When deciding on whether to focus on reforms to promote financial development (financial inclusion, innovation, access to financial services, etc.) and reduce poverty and income inequality, or on whether to focus on further improvements in financial stability, MED policy makers will have to bear in mind, the tradeoff that exits between financial liberalization and integration and financial stability. Carefully designed financial liberalization policies need to be timely introduced in order not to destabilize the financial system. Moreover, the latest debt and financial crises have shown that financial liberalization and development may not always be conducive to poverty and inequality reduction on the one hand, and to stimulate growth and development, on the other. On the contrary, and in many instances policies aimed at fostering financial development and innovations have triggered recessions and in many MED countries have had detrimental effects on growth and development and have further widened the gap between the rich and poor.

The MED region stands at a crossroad, with changes sweeping many of its countries and creating an environment conducive to financial and economic reform. Having missed a number of opportunities to reduce poverty and inequality, to introduce extensive financial and institutional reforms, and make substantial progress in financial inclusion, more effort still needs to be devoted in the future. The social movements in the region and the earlier series of financial crises have exposed the weaknesses of the adopted financial development model and have raised questions as to how to reshape financial policies most effectively and create the space to address the needs of everyone in society, reaching even the most deprived. The slow pace of financial development and liberalization policies adopted in most MED countries in the past has yielded a relatively acceptable level of economic growth and, in general, managed to meet the goals of economic and financial stability. Oil booms have generated acceptable growth rates, with oil-abundant MED countries delivering much more than those less developed. However, the impact of such economic and financial policy choices has not led to the desired outcomes in terms of human development, poverty reduction and financial stability. Growth has not been inclusive and has widened the gap between the rich and poor; a case in point is Egypt and Morocco. Indeed, in certain cases, financial liberalization has actually contributed to further financial instability. In light of a critical reassessment of the achievements and failures of MED countries, a new financial development approach should be adopted. This new model should be more holistic, integrating the financial and social spheres in combination with strong financial institutions. It is vital that MED policymaking should expand to accommodate these spheres and place them on equal footing in the service of a long-term rights-based financial developmental vision.

The new model will reconsider financial policies that incorporate developmental priorities and would thus achieve structural change. Financial policies will have to be reshaped to achieve not only financial stabilization, adjustment and economic growth, but to also trigger the transformation required to generate growth that is broad-based, inclusive and sustainable. Within this context, such policy tools as financial development and inclusion, and financial sector diversification and liberalization will have to be addressed. At the same time, financial policies should not shy away from meeting the same objectives as social policy under this new financial development paradigm, in which the interests and welfare of every person in society are the target. It is also of central importance to ensure that social policy goes hand-in-hand with financial development policies to bring about the required transformation and ensure inclusive financial and economic growth. While the social and financial spheres should interconnect to create synergies, this new financial development model will not achieve its goals if political and institutional reforms remain shallow. Finally, sustainable poverty and income inequality reduction requires an acknowledgement that politics, institutions, financial and socio-economic policies are intertwined and have an impact on each other. Synchronizing financial and social policies with institutional and political reform would bring about positive, sustainable change under a clearly defined financial development vision.

Environmental Regulation and Agricultural Trade Development (report FEM44-06)

The political implications of these results are as follows. First, it is illusory to consider bilateral free trade agreements as capable, on their own, of increasing trade flows between the two shores and developing the agricultural sectors of the SEMCs. In fact, and given the vulnerability of agricultural products, without accompanying upstream measures, the opening of the European market in the agricultural sector, in particular that of fruit and vegetables, would bring only a limited advantage to these countries. In addition, support for the modernization and adoption of new technologies that respect the environment and meet the requirements of the European market is necessary so that the SEMCs can really benefit from the liberalization of agricultural trade with the EU. Secondly, the harmonization of agri-environmental measures between the Common Agricultural Policies and those introduced by PSEM is strongly recommended and should make it possible both to increase the competitiveness of their sectors and to facilitate access to the European market. This raises an important point about the trade agreements being considered or being negotiated as it is important to take into account the slowness of the process related to the transformation of agricultural production systems (eg conversion to organic farming, training and adaptation of farmers to new technologies). As a result, appropriate deadlines must be taken into consideration by both parties. Finally, it is clear that the harmonization of non-tariff measures in a second step according to the international system would be a lever to increase agricultural trade and integrate more fully into the global economy.

EuroMed Report: Identification of barriers to the integration of Moroccan SMEs in global value chains

The new EuroMed Report (September, 2019) is now available

Identification of barriers to the integration of Moroccan SMEs in global value chains [1]

The report is available for download here.

 

The purpose of this report is to identify the obstacles to the integration of Moroccan SMEs into global value chains. This new report is a continuation of the previous one because it again deals with issues that concern the private sector. However, this time it offers a more detailed analysis by targeting a specific problem, the integration of Small and Medium Enterprises (SMEs) in global value chains, in the case of one country in particular, Morocco.

This choice enabled us (i) to carry out an in-depth analysis on a given problem, (ii) to work in close collaboration with a Moroccan institution (ISCAE) and with the African Development Bank (AfDB) office in Rabat and (iii) to enhance our report with case studies of Moroccan SMEs and with a series of interviews and working meetings with representatives of business associations and heads of national organizations concerned with the issue. Before the finalization of the economic policy recommendations, this study was also the subject of a workshop organized in Rabat in the presence of decision makers, entrepreneurs and senior civil servants.

The report was coordinated by:

  • Patricia AUGIER (President of the Scientific Committee of FEMISE and of Institut de la Méditerranée),
  • Vincent CASTEL (Chief Country Economist – Morocco at the African Development Bank – AfDB) and
  • Tarik EL MALKI (Professor of Management and Corporate Social Responsibility at ISCAE).

It benefited from contributions by:

  • Mohammed Amine HANIN (Financial Auditor at EY),
  • Maryse LOUIS (General Manager of FEMISE),
  • Josef PERERA (Political Economist and FEMISE Researcher),
  • Constantin TSAKAS (General Secretary of FEMISE and General Manager of Institut de la Méditerranée) and
  • Jocelyn VENTURA (Political Economist at Institut de la Méditerranée / FEMISE).

The Euromed report is an annual publication of FEMISE which deals with topics of importance and interest for the Euro-Med region. The report brings a real added value in terms of knowledge on the topic covered. It provides an in-depth analysis proposed by specialized economists and with a multidisciplinary approach to the North and South of the Mediterranean. This brings a common vision on both sides of the Mediterranean and political recommendations that can contribute to the transition process of the South Med countries.

[1] This report has been prepared with the financial support of the African Development Bank and of the European Union through the FEMISE project on “Support to Economic Research, Studies and Dialogues of the Euro-Mediterranean Partnership”. The content of the publication is the sole responsibility of the authors.

FEMISE MedBRIEF 23: “Developing Social Entrepreneurship and Social Innovation in the Mediterranean and Middle East”

Tallie Hausser, Constantin Tsakas and Karine Moukaddem

The FEMISE Policy Brief series MED BRIEF aspires to provide Forward Thinking for the EuroMediterranean region.The briefs contain succinct, policy-oriented analysis of relevant EuroMed issues, presenting the views of FEMISE researchers and collaborators to policy-makers.

The MED BRIEF “Developing Social Entrepreneurship and Social Innovation in the Mediterranean and Middle East “, is available here.

 

Summary

Our Policy Brief analyzes the social innovation ecosystems in Beirut and Tunis and discusses ways for leading to inclusive innovation that creates jobs, income and opportunities for marginalized populations, women and youth. Findings show that the lack of a legal form for social enterprises, impediments to financing and investment, scarcity of human resources for upper management and difficulties in determining the proper customer base are among the core obstacles faced by social entrepreneurs. We argue that more innovative financing mechanisms should be available for them. Educating investors in the South Med around the concept of impact measurement and impact investment would be needed. In addition, South Med governments ought to actively support social enterprises, meanwhile, corporations should be considering social procurement and including social enterprises in their supply chains. Finally, capitalizing on Euro-Med cooperation could be an inclusivity game-changer. Specifically, an EU-Med Social Impact Platform could multiply funding opportunities for South-Med entrepreneurs and provide a promising market for impact investors.

The list of FEMISE MED BRIEFS is available here.

The policy brief has been produced with the financial assistance of the European Union within the context of the FEMISE program. The contents of this document are the sole responsibility of the authors and can under no circumstances be regarded as reflecting the position of the European Union

“Renewable Energy Development Strategies in the MENA Region” (Report FEM43-04)

This work explores the question of the dynamic link between the development of renewable energies and growth. The main results of this work can be summarized as follows. First, the results show that efforts to develop renewable electricity generation must be supported in the short term because the relationship between renewable electricity production and GDP per capita is asymmetrical. In this case Algeria, Egypt, Morocco and Turkey are concerned by this strategy which will enable them to increase well-being in the long term. Second, the current level of renewable electricity generation in Tunisia and Israel is low enough to have a significant effect on welfare. Both countries must therefore continue their efforts to produce renewable electricity in order to reach levels that allow them to have an impact on well-being. Thirdly, Iran and Lebanon are in a strategy that has a negative impact on welfare, namely hydroelectric power generation. They must try to develop other sources of energy by exploiting their potential in wind and solar energy.

FEMISE annual conference, Brussels, Belgium, June 13th-14th 2019 (agenda available)

FEMISE is happy to announce that its annual conference will take place this year in Brussels, Belgium, on June 13th and 14th 2019.

Please click here to register.

This year’s theme will be on:

SUSTAINABLE DEVELOPMENT: DRAWING AN IMPACTFUL EU-MED ROADMAP

The objectives of this conference are threefold:

(1) To take stock of what the South-Med region has achieved in the past few years in terms
of sustainable development;

(2) To highlight the main challenges they are still facing; and

(3) To propose a road-map on how to move forward towards achieving sustainable
development.

The conference plenary sessions will address the FEMISE four main thematic pillars and will link
them to the SGDs, taking into account their interlinkages, offering a platform for dialogue between
the different stakeholders.

The concept note is available by clicking here.

The conference agenda is available by clicking here.

All the participants bios are available by clicking here.

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 Neighborhoud Policy (ENP). 

To get to know some of our speakers, click on their pictures !

FEMISE MED BRIEF no19 : “Reforming Fossil fuel Subsidies: Challenges and Opportunities for Mediterranean countries”

Stéphane Pouffary & Guillaume de Laboulaye

The FEMISE Policy Brief series MED BRIEF aspires to provide Forward Thinking for the EuroMediterranean region. The briefs contain succinct, policy-oriented analysis of relevant EuroMed issues, presenting the views of FEMISE researchers and collaborators to policy-makers.

The MED BRIEF “Reforming Fossil fuel Subsidies: Challenges and Opportunities for the South and East Mediterranean countries”, is available here (in french).


Abstract: Fossil fuel subsidies have been used for decades to support economic activities, but above all, officially, to enable poorest households to access low-cost energy services. That being the case, regardless of the country, this reality remains highly questionable given that most of these subsidies benefit the wealthiest households who consume much more energy than lower and middle-income households. Moreover, these subsidies are incompatible with a low-carbon society and they contribute to maintaining unsustainable systems from an environmental, economic and social point of view, creating an energy dependence on exporting countries. This policy brief focuses on the issues and challenges of reforming fossil fuel subsidies in Southern and Eastern Mediterranean countries. It reminds that, far from their initial objective, these subsidies contribute on the one hand to slow down the achievement of national climate commitments and, on the other hand, to increase social and economic imbalances.

The list of FEMISE MED BRIEFS is available here.

The policy brief has been produced with the financial assistance of the European Union within the context of the FEMISE program. The contents of this document are the sole responsibility of the authors and can under no circumstances be regarded as reflecting the position of the European Union

Med Change Makers e08 : Vera DANILINA, Green Public Procurement Vs. Environmental taxation: potential for EuroMed environmental cooperation

 

FEMISE launched in 2018 its series of interviews called « Med Change Makers ».

« Med Change Makers » are text and video-based interviews that allow dynamic researchers of the FEMISE network to illustrate how their research addresses a policy-relevant question and how it contributes to the policy-making process in the Euro-Mediterranean region.

 

Green Public Procurement Vs. Environmental taxation: potential for euro-mediterranean environmental cooperation

Interview with Vera Danilina, Aix-Marseille Université and FEMISE

Environmental issues are among the priorities of FEMISE research / action. In the Mediterranean, the consequences of climate change will always be stronger than elsewhere. The reduction of greenhouse gas emissions and the adaptation needs of bordering countries are more than ever necessary.

Author of a FEMISE MED BRIEF, Vera Danilina focuses on environmental taxation and green public procurement (GPP). She provides a comparative analysis of their effectiveness and reveals the opportunities for harmonized environmental policy between countries. Her results suggest specific implications for environmental collaboration between EU countries and those of the MENA region (Middle East and North Africa). Interview :

1. Your recent FEMISE Brief is focused on the comparison between GPP and environmental taxation. What are these two policy instruments and why do you focus on them ?

The first instrument is Green Public Procurement and is related to the process whereby public authorities seek to procure goods and services with reduced environmental impact. Accordingly, it corresponds to their initiative to consume eco-friendly products. This policy instrument is relatively new: within the EU the importance of GPP was stressed in 2003 when the member states were urged to adopt national plans for greening the public purchasing policy. Despite the relatively slow development of GPP, 55% of the contracts signed by European public authorities in 2009/10 included at least one EU core GPP criterion.

The second instrument, which is the environmental tax, targets directly the negative impact of production. Nowadays, in the EU-28 such taxes account from 30-50% (UK, Belgium, Italy, Denmark) to 60-80% (Germany, France, Norway) and even to 80-100% (Spain, Liechtenstein) of all key environmental policy instruments in use. Environmental taxation accounts for 2.4% of the EU-28’s GDP varying from 0.77% in Liechtenstein to 4.14% in Denmark.

Why focus on these two policy instruments? First of all, because they belong to alternative approaches to regulation that feature mandatory vs. voluntary participation and direct vs. indirect influence. The second reason is that while environmental tax can be considered as one of the most or even the most widely used policy instruments, the expansion of GPP is much more modest. But at the same time, GPP has been constantly high on the policy agenda of different countries since 1970s that shows its expected potential in the environmental policy development. Thus, the main reason to choose taxes and GPP for our analysis is to investigate the pros and cons of a traditional and a relatively innovative policy instrument exploring their possible complementarity or/and substitutability.

2. Are economic instruments for environmental policies widespread in Mediterranean countries of the South shore and why (not) ? Are there South-Med success-stories ?

The South-Med countries are mostly focused on the environmental taxation as the more transparent and straightforward instrument: it represents from 64% (Israel) to 100% (Egypt, Tunisia) of key environmental policy instruments toolkits. Meanwhile, in the majority of countries they represent a relatively modest share of GDP. At the same time in Israel green taxes account for 3% of GDP and 2% – in Morocco which is in line with European practices.

Public purchasing accounts for around 18% of GDP within the MENA region indicating a significant potential to influence markets and industries. Green procurement is not widely developed though. However, we would mention such countries as Israel, Egypt, Morocco and United Arab Emirates as leaders in GPP movement. According to the Ecolabel Index, there are up to 20 eco-labels in each of these countries including such nationally developed green standards as “Green Star” label for the responsible tourism in Egypt or a multi-industrial Israeli Green Label. These countries have also launched a range of governmental programmes supporting eco-innovations.

In general, environmental regulation is not well-developed in the South-Med countries. Among the reasons we would mention a wide range of social and economic problems that seem to be more urgent. At the same time we observe the development of environmental policies that indicates the growing understanding of their importance.

3. How can environmental policies and instruments in the South Med co-exist with the social and economic difficulties these countries are facing ?

It is well-known that the South Med region experiences a wide range of social and economic difficulties that might seem to be much more important than ecological threats. At the same time, the costs of environmental degradation for this region ranges from 2-3 % of GDP in Tunisia, Jordan, and Syria, to 5-7 % of GDP in Egypt and Iran. These figures are impressive. They assure that without developing green policy, the South Med countries risk to deepen not only the ecological problems but also the social and economic difficulties.

Moreover, focusing on economic development without corresponding environmental restrictions could potentially aggravate environmental degradation worsening the quality of life of the population. As an example, we would particularly stress health problem that can drastically reduce GDP. The link between environment, health, and GDP is potentially strong in the absence of environmental regulation and in the presence of “basic” threats such as car emissions, for example, that most directly affect the population.

4. How important is the coordination of environmental policies across South Mediterranean countries and why ? What direct and indirect benefits ?

Our research urges for the policy harmonisation across trading countries. We see this strategy as a first-best or a “win-win” option that allows the actors to coordinate their environmental efforts without implicating any disproportional burden to any of them.

Otherwise, the countries who focus more on the environmental regulation could be demotivated by the return effect of international trade. Thus, the country who opts for more severe environmental taxation wins from trade integration with the country who introduces GPP or lower taxation. In the literature this phenomena corresponds to a “pollution haven effect” by which trade integration makes polluting industries move from countries with more severe to countries with less severe environmental regulation, while not necessarily leading to the reduction of global environmental degradation. If all countries opt for the GPP policy, the more environmentally virtuous country whose government spends more on green goods faces purchasing power decline while the less environmentally virtuous country whose government is less generous in environmental spendings gains. In our research we call this result a “paradox of virtue”.

Last but not the least is the argument of trade and environment complementarity. When environmental policies are identical both in their type and stringency, trade integration leaves the environmental degradation level unchanged but incurs an increase in purchasing power across trading countries.

Consequently, on the side of direct benefits of policy harmonisation we would mention environmental degradation decline and the equality of the policy burden. Talking about the indirect effect, we definitely stress the positive effects of the regulation to the business traditions as well as consumer preferences. Even more, harmonised policy implies the harmonisation of eco-standards across countries that simplifies the cross-country cooperation, joint ventures development, and public control.

5. How can collaborating with the EU, within the framework of EuroMed cooperation, provide answers to environmental concerns ?

The EU is known for its well-developed system of environmental regulation that can be seen as one of the examples to spread to the South-Med countries. Both the public and the private institutions of the EU contribute to the system of eco-labelling and eco-certification, influencing the choice made by consumers and enterprises. Thus, Germany and Austria are the pioneers of GPP programmes. Since 2008 the European Commission has developed more than 20 common GPP criteria covering a wide range of sectors.

The EU has also proposed criteria of two different types, core and comprehensive. Core criteria address the key ecological impacts and are easy to get verified while comprehensive criteria are stricter and more complex requiring additional verification efforts. The variety of criteria guarantees the flexibility of the GPP strategy that can be tailored to the needs of a particular industry and country.

6. Are there other frameworks of cooperation (regional, bilateral) that can benefit the South ?

We particularly stress coordinated GPP as a form of cross-country environmental support. Our research shows that GPP can be related to the environmental support across countries when one can be a donor, and another one – a recipient. A country that has higher financial and institutional capacity to develop GPP can increase its green public spending allowing a country that has lower financial and institutional capacity to develop GPP to benefit from the green demand of the partner country. Donors are in the position to set the standards and quality control that allows to diminish or even avoid greenwashing and, at the same time, propagate the corresponding ecological standards to the recipient. By getting accepted, the environmental criteria system could uniform the rules for companies in all participating countries facilitating their access to the markets and diminish the environmental degradation. This approach could be considered for the collaboration of EU and MENA countries in order to strengthen the environmental policies in the latter and establish a first step towards the harmonisation of green policy approaches.

7. What is your top-recommendation for South Med officials ?

First of all, we recommend the wide implementation of GPP as an efficient approach to environmental policy design. Despite being a voluntary tool, it can motivate firms to opt for green technologies even when the only incentive is originated from the government. The effect can be amplified by taking into account the consumers eco-biased demand that, in its turn, can be boosted by the corresponding public policy. At the same time, GPP is not risk-free: the absence of public monitoring can diminish the positive effect of the policy approach allowing firms to greenwash, or cheat on the environmental quality of their products. Accordingly, a corresponding monitoring policy is required.

Second main recommendation is to opt for the long-term environmental policy harmonisation even across countries with different level of economic and institutional capacity to introduce symmetric policy instruments.

The coordination of environmental policies is of particular importance for the South Mediterranean countries in view of meeting the Sustainable Development Goals (the UN, 2015), as well as for two following reasons. First, a relatively low share of intra-regional trade with the EU which is expected to increase due to the current policy agenda of the Euro-Mediterranean trade partnership. Thus, further trade liberalisation will increase the opportunities for cross-region cooperation and an environmental policies harmonisation could be key to avoid the above mentioned “pollution haven effect”. Second, the decline in economic growth in the MENA region that could potentially be partially restored with the contribution of a deeper trade integration. At the same time the environmental degradation increase that might correspond to economic growth can be mitigated by the environmental policies coordination.

Interview by Constantin Tsakas

This activity 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 are the sole responsibility of the speakers.

World Innovation and Creativity day : FEMISE takes a stand

On world creativity and innovation day, celebrated on April 21st, FEMISE and its researchers’ network gave our editorial committee some insights and analysis on the Mediterranean innovation context

Six days after Leonardo Da Vinci’s birthday was the date chosen by the United Nations to celebrate innovation and creativity in the world. A very symbolic choice, as he was a man of universal spirit, an inventor, an engineer as well as an architect and a painter. De Vinci stands for what the United Nations expect for this international day « To encourage creative multidisciplinary thinking to help us achieve the sustainable future we want ». It is this sustainable future that FEMISE and its network of researchers aim at sketching through their work.

The think tank worked at clearing the field of Mediterranean innovation. Researchers first pictured a portrait of the situation, before making suggestions for developing this sector, « which could represent a hope for the future, to solve daily problems », according to CrowdSolving Yomken’s Tamer Taha.

A future already taking place in fact. All researchers agree to say that the international context, economic competitiveness, and growth partly require innovation. « Innovation is actually the only sustainable way of competing in international markets » states Przemyslaw KOWALSKI (CASE, FEMISE). He adds that « expert competition based on innovation and knowledge provides you with a better prospect of economic development and increasing standards of living ». Meanwhile, the General Manager of OPEE and Kedge Business School professor Maarouf Ramadan says that « the Mediterranean region does not avoid the international questioning on innovation ». He indeed studied the issue a lot, and proposed, with researcher Sonia Ben Slimane, a conceptual framework to achieve efficient and effective National Innovation Systems (NIS). « A lot of potential can be unlocked if Med countries start really looking into what aspects they want to develop » states Maryse LOUIS, (ERF, FEMISE General Manager). She highlights how « as we celebrate the World Innovation and Creativity Day, we are reminded of the challenges that the South med Countries are facing to establish their innovation systems ».

 « Investing in research and innovation systems »

«Most countries in the Middle East and North Africa suffer from the so-called missing middle phenomenon, with just a few middle-sized innovative enterprises » adds Markus LOEWE, German Development Institute. The phenomenon is due to 5 factors, including entrepreneurs that « lack access to capital and informational markets » and a of « lack rule of law » which is the most important factor according to the researcher. Maryse LOUIS (ERF, FEMISE) lists the common challenges to the region: low funding of research and development, unclear laws on the IP, coordination between the different actors, the unfavorable private sector environment for Young entrepreneurs and for research.

Thus, change can be an opportunity for systematic innovation. But how can it be achieved? Dalia Seif (FEMISE and ERF) specifies that under the work produced by FEMISE within the EU-funded TheNextSociety project « we have created a Scoreboard with more than 80 variables to measure the performance of innovation in the South Med countries ». This work « is about looking into more details of the innovation performance in these countries from different aspects: institutional, economic and social to be able to point to the challenges in each country and provide a road-map on how to establish an innovation system in these countries ». 

For Sonia Ben Slimane, « there is a necessity to invest in research and education systems », in order to « promote an innovative and creative culture » the researcher explains. She delivers a set of recommendations, from a bigger conciliation between industries and education and research systems to intellectual property protection, not forgetting to mention the financial issue. Yomken is central to this question. Through what it calls « challenges », the Egyptian platform matches companies, NGOs and industries with « young people with creative and innovative ideas » Yomken founder Tamer Taha points out. The platform is managed from Cairo, in several countries.

« Social innovation is also a way of addressing the needs of societies in a more effective and efficient way » states Katarzyna SIDLO (CASE, FEMISE). Success stories of social innovations in the MENA region include childcare services to allow women to go back to education or to the labor market, as well as initiatives to providing training and work opportunities for refugees.

The financial allocation issue is also addressed by Dr. Jocelyn Ventura from FEMISE. He lists some sectors like aeronautics in Morocco, pharmaceutics in Lebanon and Jordan, and praises a strategy in which « local decision-makers allocate resources in well-identified sectors ». Promoting an innovative, creative and developing environment would allow for the Schumpeterian entrepreneur to become the economic revolutionary, following his theory. “

by the Ecomnews Med editorial team in collaboration with FEMISE