Views on Reforms and Structural Transformation in the Mediterranean

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Date : On 28 april 2011


At the conference FEMISE on structural transformation, several personalities gave their views on desirable policies to be implemented in the Mediterranean during interviews:

Mustapha Nabli, Governor of the Central Bank of Tunisia; Lino Cardarelli, acting secretary general of the UFM; Suk Joon Kim, Chair of STEPI; Pierre Deusy, chief economist at DG RELEX European Commission; Mohamed Chafiki, Director of Studies and Financial Forecasts at the Ministry of Economy and Finance, Morocco.

Interview with Mustapha Nabli, Governor of the Central bank of Tunisia and previous vice-president responsible for economic development at the World Bank.

Mustapha Nabli (Photo Banque Mondiale)

Mustapha Nabli (Photo Banque Mondiale)

“An industrial policy does not mean low-cost mass production”

-Can the concept of industrial policy be effectively implemented without the integration of Mediterranean countries?

-This depends on one’s conception of industrial policy. To a large extent the expression was corrupted in the 1970s, when many poor economic decisions were made under the cover of industrial policy. Each country must create an environment that is favourable to its businesses and help them develop. The aim is not to engage in economic super-planning, in which states specialise in one sector or another. The lack of communication between Mediterranean countries penalises them, but despite this all of them are on the right track.

-Is there a Mediterranean state that would move in the direction of this vision you propose?

-Not really, although Morocco, Tunisia and Egypt in their own way are studying these essential structural changes. The Union for the Mediterranean can be the framework in which they move forward, learning from each other. European upgrading programmes that began a decade ago must also be studied to extract good practices from them and emulate experiences that have proved successful. Often, success lies in a few details…

-Some do not believe in the strategy you are developing, believing that it is based on an Asian model with foundations that are very far removed from the Mediterranean economic context.

-I do not know what they mean by an Asian model, which would differ from a European model. An industrial policy does not mean low-cost mass production. Or at least this is not the model that enabled Japan, South Korea and Singapore to develop.

Interview with Lino Cardarelli, deputy secretary-general of the Union for the Mediterranean (UFM)

Lino Cardarelli (crédit UFM)

Lino Cardarelli (crédit UFM)

“The success of the UFM lies in our ability to establish ourselves at the forefront of a process”

-What is your new mission in the UFM?

-I am responsible for economic affairs and the financing of projects. My area evaluates projects proposed within the framework of the UFM, not only from a financial perspective but also in order to bring projects together under the same management.

-Are you optimistic about the future of the Mediterranean?

-My background is in the private sector, where one learns to be positive rather than optimistic. The mission is not straightforward, since the very project of the Union for the Mediterranean encounters complex difficulties. Are we ready for such a project? Time will tell. But the success of the UFM lies in our ability to establish ourselves at the forefront of a process.

-Do all Mediterranean countries work together?

-They all pursue their own objectives, and this is respectable. However, even when they appear to be focussed on their own business, they always have an eye on events in the Mediterranean.

Interview with Suk Joon Kim, president of the Science and Technology Policy Institute (STPI)

Suk Joon Kim, président du Science and Technology Policy Institute (STEPI) (crédit : CG)

Suk Joon Kim, president of the Science and Technology Policy Institute (STEPI) (crédit : CG)

“Education and training have been decisive in the Korean model”

-South Korea took control of its economic development in the 1960s. Could it develop the same way today?

-Clearly not. At the time, South Korea implemented very voluntarist measures that would not be allowed today by the World Trade Organisation.

-What kinds of measures do you believe are most appropriate?

-In emerging countries, I would start by focussing on human resources. Education and training have been decisive in the Korean model; solutions had to be found to the brain drain that was hurting the country. To this end, the State created centres of excellence for research and offered graduates attractive, well-remunerated positions. This decision reversed the drain. It would also be advisable to focus on innovation, R&D and R&BD (research and business development).

-On the map, South Korea appears a little isolated. Can it develop in a sustainable manner without a regional market?

-We are. South Korea cooperates with China and Japan within the framework of an association, but our markets are not in the association: Europe is our biggest customer, followed by the United States. China is our third-largest customer. Other countries in Asia, such as members of ASEAN, for example, are not important to our economy.

Interview with Pierre Deusy, chief economist in the Department of External Relations of the European Commission

(crédit CG)

Pierre Deusy, European Commission (crédit CG)

“No-one in the Mediterranean wants to emulate the Chinese!”

-You reject an Asian model that could not be implemented in the Mediterranean. Why?

-The countries of the Mediterranean are not in the position of members of the Association of South-East Asian Nations (ASEAN). Ten years ago, GDP per capita in countries in the Mediterranean was four times that of ASEAN countries. Even today, it is twice their GDP per capita. Moroccan wages are on a par with salaries in Romania. No-one in the Mediterranean wants to emulate the Chinese!

-What is Europe proposing to countries of the South?

-Before defining an industrial policy, Mediterranean countries must choose a development model. Europe has proposed a complete model to these countries. Countries in the South can drawn on the knowledge of the European Union and bring about a change in their partnership with the North, i.e. a rich, stable market. These are the states that decide to give preference to this market or look to the world market. But when Algeria awards a contract for the construction of a motorway to a Chinese firm, it must allow this firm to arrive with its own workers. In Europe, it is the Algerians who are recruited. In the long-term, these decisions matter.

-Europe presents itself as a big brother to countries in the South. But isn’t there a need to see these states grow, in order to develop on its own?

-Europe’s interest in seeing countries in the Mediterranean develop is more political than economic. We need a stable environment. Otherwise, the scale of our trading ties with Mediterranean countries is modest. Clearly, the development of countries in this region would represent a great opportunity, but it is not vital for Europe.

Mohamed Chafiki, Director of Studies and Financial Forecasts at the Ministry for Economy and Finance

(crédit CG)

Mohamed Chafiki (crédit CG)

“Before one can succeed at innovation, one must first address the issue of education”

“Morocco is almost like an island! Clearly, it would benefit from stronger relations between countries in the South. Merely opening up our land border with Algeria would increase our GDP by two percentage points. Otherwise, the Arab states are not a single coherent unit: there are vast disparities in levels of economic development between them, and it is difficult to deal with them as one. Nevertheless, we share certain problems: for example, ours is the region with the smallest number of books read per head of population. Before one can succeed at innovation, one must first address the issue of education. Education allows us to train researchers, academics and engineers. We are not aiming at a low-cost economy but leading-edge technologies, as demonstrated by the microcomputing and aeronautics industries found around Rabat.”