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FEMISE report 2011: Towards a New Med Region: Achieving Fundamental Transitions

08-11-2011

 

The economic impact of the Arab Spring and the challenges of securing a sustainable economic transition are at the heart of the 2011 annual report published by the EU-funded Euro-Mediterranean Forum of Economic Institutes (FEMISE).
 
The report, titled ‘Towards a New Med Region: Achieving Fundamental Transitions’, points out that, “The Arab Spring surprised all the economists who thought that the efforts made to open up trading, increase the attractiveness of foreign direct investment and develop international co-operation had finally placed the Mediterranean countries on a trajectory of convergence with their major European neighbours.”
 
FEMISE highlights four factors that lay behind the upheaval, and must now be taken into account if a successful transition is to be achieved:
·          a development model which favored an elite consisting of closely linked politicians and business figures;
·          a natural instability caused by a more profound integration into the world economy;
·          the exclusion of young people from decisions and employment;
·          the extraordinary territorial disparities that exist in all the countries concerned.
 
In the countries most affected by the transformation, the question of an insufficiently consolidated future therefore has to be posed, the report’s authors argue, saying the failure of past policies “made it abundantly clear that we urgently need clear answers to the following three questions at least”:
·          Which development model should the countries concerned follow in the wake of the revolution?
·          What can be done in the short-run to deal with the economic downturn while ensuring that the measures adopted do no harm to future economic reform efforts?
·          Finally, once the dust settles and a new political system emerges, what can be done to achieve faster economic growth with greater equality among all citizens?
 
The first part of the report addresses these issues in four main chapters:
 
1) An overall panorama of the macro-economic status, seeking more particularly to characterise the current situation and to evaluate the short-term costs associated with the different internal events in the countries of the region, the consequences of the uncertainties concerning expectations and the effects of the slump in external demand in Europe and the United States.
 
2) A detailed examination of the collapse of the authoritarian bargain model which prevailed before the crisis (and which still prevails today in certain Mediterranean countries) to ascertain what steps should be taken to transform it into a democratic model.
 
3) An examination of the reasons why youth should be considered the main resource to be deployed, seeking to demonstrate the decisive importance of young people in the Mediterranean countries for another twenty years or so. At the end of this period, the Mediterranean countries will themselves be confronted with the problem of an ageing population and will have problems financing retirement pensions. To preserve long-term equilibrium it is therefore vital to satisfy the expectations of young people in the Mediterranean countries without delay, says the report.
 
4) The fourth chapter deals with the additional trade potential, which could be mobilised between the EU and its Mediterranean partners. 
 
The second part of the report addresses the current situation of the south Mediterranean economies concerned, with detailed country-by-country sheets.
 
FEMISE is an EU-funded project, which aims to contribute to the reinforcement of dialogue on economic and financial issues in the Euro-Mediterranean partnership, within the framework of the European Neighbourhood Policy and the Union for the Mediterranean. More specifically, it seeks to improve understanding of the priority stakes in the economic and social spheres, and their repercussions on the Mediterranean partners in the framework of their implementation of EU Association Agreements and Action Plans. (ENPI Info Centre)
 
FEMISE Report 2011

 


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