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Transformation and Integration in the Mediterranean – Choices to Consider

Mats Karlsson, Director, Center for Mediterranean Integrationi

Marseille, 4 April 2011

The Arab Democratic Spring opens opportunities for long awaited economic and social progress. The

untenable gaps have long been visible.ii Reforms have been held back by poor government. The private

sector has been stymied by the constraints of privilege rather than boosted by the creative forces of

competition.iii Gaps within and between countries became increasingly unacceptable to a young

generation aware of what is possible and tired of waiting. Efforts of reformers and external support did in

the past years bring some change in Egypt, Morocco and Tunisia, but not in ways that delivered fruits in

pace with growing demand. Reforms were shown not to be adequate, comprehensive or effective enough

– and in their own way they may have contributed to intensifying the untenable nature of the situation.

The flipside of this is the potential for change and catch-up. While creating new jobs rapidly is a

priority, success will not come easily. However, it is possible to outline the general focus and nature of

choices to make. Persevering with transformational reform, where effects may take years, while people

want rapid results, will be a major political challenge.

While more, decent and better paying jobs is the one overall objective – nothing is more empowering

than a job, nothing shows successful competitiveness better than the creation of new jobs – it was dignity

that was the most potent word at the beginning of this Arab Spring. Repeated again and again it marked

the character of the protests. While issues of democracy, human rights and constitutional change are

rightly priority, dignity – as in empowerment over the future – necessarily has to be realized over a broad

complementary set of economic, social and environmental areas. What is apparent is that in most of them

transformative change is intrinsically linked to integration.

The intensity of interdependence today is such that local and national change can only succeed if it

embraces integration in a much more focused way than before. While there are many geo-economic

dimensions – across the Arab world, Africa and the globe – economic, historic and people-to-people

relations suggest that Mediterraneaniv integration, with the European Union as a major anchor, is

the necessary framework to deepen and renew. Five hundred millionv people live in the region around

the Mediterranean, with an economy of about $5 trillionvi and a growth rate of 2.2%.

vii Here is where

both the new orientations of reform and external actors need to consider embracing new levels of

ambition.

The macro-economic environment presents serious challenges, and thus there are limits on the

availability of finance for reform and investment. Egypt and Tunisia, but also Morocco, Lebanon and

Jordan must deal with immediate pressures, such as drops in foreign direct investments, exports and

tourism. Fiscal pressures will increase. While every effort should be made for early recovery, the external

environment cannot be expected to be greatly conducive, given the high oil price and sluggish recovery in

Europe. Financial sector reform should help to channel available capital to businesses more effectively

than in the past. Fiscal reform, particularly redirecting „blind subsidies‟ to alleviate poverty or achieve

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social gains, is a major option. However, increased external support is essential. The European Union

should consider matching its earlier successful efforts to integrate Southern, Central and Eastern Europe.

It is a historic win-win situation, which carries an upfront price tag. A Mediterranean Economic

Area, drawing on earlier lessons from Europe, might complement current bilateral and regional

agreements and new ideas.

We highlight here twelve areas for transformative reform under the headings of Empowerment;

Employment, Entrepreneurship and Equity; and Integration. Under each heading we note some facts

and priorities, and offer some suggestions, both policy choice and program orientation. They are by no

means an attempt to be comprehensive – in particular they do not address the immediate democratic or

macro-economic challenges – but speak from our angle of engagement at the CMI, current or possible.

They are meant as impetus to the agenda debate and choices to consider.

Empowerment

1. Use the Capacity of the Youth

Four out of every 10 among the Arab Mediterranean Countries‟ 180 million people are between the ages

of 15 and 34. Of these, 15% of men and 47% of women, equal to some 20 million young people, are

neither in the educational system nor in the job market.viii

If the work aspirations and creative

strengths of the youth can be freed, the potential for economic growth, social cohesion and human

fulfillment cannot be over-estimated. On the contrary, not investing in young people, in particular not

creating the required jobs for them, will make youth more vulnerable and at risk of being marginalized –

creating idle citizens who are subject to negative societal phenomena and will require substantially higher

investments to recover. Therefore, youth should be seen not as a threat or a burden, but rather as a

potentially transformative generation that can drive growth and development in the region for decades

to come.

Promote civic participation for real. Governments need to understand much better what the

concerns of youth actually are, use surveys, IT and social media both as sources of information

and interaction, and create national policies that are met with trust. The CMI/Arab League/AFD

conference on Youth in April 2010 pointed a way.

Provide livelihood opportunities. While special programs cannot replace national employment

strategies, there is international experience of scalable youth programs, whether based on

promoting community service or encouraging the transition to small businesses. The idea of a

Mediterranean Youth Voluntary Service could help skills development.

2. Free the Potential of Women

Gender inequality – the differential access to opportunity and security for women and girls – is a much

more primordial issue for economic development and social justice than has ever been recognized by

real action. MENA falls considerably short on indicators of women‟s economic participation and political

empowerment. Women‟s presence in the political arenas and their influence on public policy are more

limited in MENA than in any other region. ix

Women remain a largely confined and untapped resource in the region. The region accounts for the

world‟s largest gender gap in unemployment, with rates far higher for young women than young men.

While in Tunisia they make up as much as 63 percent of university students, overall in MENA they

represent only 28 percent of the labor forcex, one third that of men, with a widely accepted view that these

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rates are attributable to social norms and disadvantageous policies. Changing marriage patterns and

family concerns should take a central position in determining policy recommendations.

Consequently, there is a dire need for a new major gender agenda.

Promote greater inclusiveness of women in decision-making, and greater accountability of

public institutions to advance fairness and equality. Review the legislative environment to

provide consistency between women‟s constitutional rights and ordinary legislation. Labor

market regulations, social patterns and public policy should not hamper but facilitate women‟s

economic participation.

Emphasize skills and lifelong learning opportunities, as women face additional challenges

because of early marriage and childbearing, which interrupt their schooling and work and then

outdate their skills.

Invest in gender-conscious infrastructure – such as better housing, transport, water, and

telecommunications – which can vastly expand a woman‟s horizon and free up her time, as

can expansion in services that cater to women‟s needs – such as well-functioning childcare

opportunities, public or private – which allow them to combine work and family responsibilities.

3. More Power to Urban and Local Government

The urban share of total population in the MENA region will grow from 56% in 2005 to 65% by 2030xi.

While urbanization can be a positive factor if properly harnessed, current spatial disparities are a

major factor behind discontent. The famous „Arab Street‟ highlights the political importance of cities.

Economic and social development is not possible without much stronger emphasis on local urban and

spatial development, and that will not happen without local empowerment in both cities and rural areas.

Citizens are demanding to play a greater role in local development, through formal local democratic

institutions, community and civil society organizations and the private sector. Reforms at national level

need both to empower and capacitate local authorities to plan strategically across policy areas to deliver

expected services. Decision-making over finances and human resources needs to be more decentralized.

The private sector needs to be engaged in partnerships. Major investment is needed in urban infrastructure

and housing, with land-use planning and land markets to be developed and managed fairly. Urban policy

has a major role to play to promote economic development and innovation, as in technopoles. Local

institutions need major capacity building, introducing modern management, IT systems and e-governance.

Give local empowerment a much higher order of priority. Build on initiatives such as the

Barcelona Call for Local Empowerment in the Mediterranean, following a March 14-15, 2011

conference when mayors, local leaders, specialists, private sector and international partners met

to review current strategic priorities. CMI contributes leadership to a new, very broad network.xii

Create a large program to assist the cities in the Mediterranean. While local needs are as

multi-sectoral as national strategies, running from investment in infrastructure to technical

assistance for land markets, a much larger network of programs for local capacity building and

citizen engagement could have a pivotal effect. South-South-North peer learning could create

new communities of practice.

Give specific support to community-based projects.

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Employment, Entrepreneurship and Equity

4. Drive Business Opportunities by Competition, Not Privilege

In MENA, more than 80% of non-hydrocarbon value-added is produced by private enterprises.

However, countries exhibit relatively low dynamism and economic transformation. Private investment

averages around 15% of GDP (compared to close to 30% in East Asia) – perhaps the single most alarming

statistic of the failure of reform to date. The best performers export around 1500 goods (compared to

close to 4000 in countries like Poland, Malaysia or Turkey). The average manufacturing firm‟s

productivity is about half that of Turkey. There is little entry and exit of firms (the number of registered

businesses per 1000 people stands at about 1/6 of that in the OECD, and less than 1/3 of that in Eastern

Europe and Central Asia). The average business is 10 years older than in East Asia or Eastern Europe. A

reason for this is the unfavorable business environment, with close to 60% of business managers

thinking that the rules and regulations, as they appear “on paper” are not applied consistently and

predictably.xiii Policy reform must signal a credible commitment to reduce interference and discretion in

the enforcement of rules and regulations, so that more entrepreneurs can invest more and create jobs.

Remove formal and informal barriers to competition. Governments must ensure that

privileged positions and conflicts of interest between public servants and private investors are

reduced. Follow through and catch up on basic business environment reforms.

Strengthen the institutions that regulate markets and interact with firms, by building strong

rule-bound public institutions.

Foster a new partnership between the private and public sectors, one that mobilizes all

stakeholders in the design, implementation and evaluation of economic policies.

5. Match the Quality of Skills To Global Competitiveness

About 36% of private companiesxiv

in Arab Mediterranean Countries (AMCs) participating in the World

Bank Enterprise Survey 2008 report the lack of skills among workers as a major constraint in

business development. This rate is higher than in other regions of the world, and predominantly affects

young labor market entrants. Employment creation has stagnated in the public sector.xv

A 2009 study on

job markets and mobility between Europe and MENA showed that the education levels of the

burgeoning labor force were not suited to meet the growing labor demand that Europe will experience

over the next 50 years as its population ages. Unemployment is highest among university graduates, with

about 17% of them unemployedxvi

, an extraordinary phenomenon, as evidenced in the emergence of the

Arab Spring.

Identify the basic skills and competencies needed for employment in key economic sectors,

and implement these skill and competency frameworks in selected education and training

institutes, current formal ones, new institutions aiming to give a „second chance‟ and with strong

cooperation with the private sector to ensure a better link to demand. Promote business

incubators for young entrepreneurs.

Harmonize standards, qualifications and quality assurance mechanisms in post-basic

education regionally, for enhanced employability and labor market mobility.

Create a very large program for education exchange with the EU, perhaps named after Ibn

Rushd/Averroes, along the lines of Erasmus.

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Invest heavily in raising the interaction, knowledge and capacities in the Arabic language, as

well as English and French.

6. Bring in the Small and Informal Business Sector

The informal sector ranges from 32% of non-agricultural workforce in Syria to 55% in Egypt.xvii

Incentives for informality include costs associated with tax, social protection and labor, environmental

and other regulation, but a reason may also be the avoidance of corruption and „capture‟. A vicious circle

of unavailability of SME finance stymies budding business opportunities, as evidenced by the surveys

showing that only 20% of SMEs have credit, far lower than in emerging marketsxviii

. Business

associations speak of a very high threshold between informality and formality, and yet, it is the

SMEs‟ contribution to the new dynamic sectors of the economies, particularly linked to external trade,

that is going to create the needed new jobs.

The informal sector is the main destination for first time job seekersxix

, but it is caught under a ceiling of

low risk taking and low productivity. Small and informal firms act as a stepping stone for new entrants,

teach skills, give opportunity for youth to define career goals, and test a worker‟s level of general skills

such as timeliness and precision that diplomas fail to provide. But they may not be able to provide

workers and future employers with credible signals of the general abilities workers have, and thus limit

workers‟ opportunity to mobility and employers‟ access to required skills at the right costs. Businesses

and workers are locked into narrow informal networks.

Break the barrier between formality and informality. Such reform needs to become a major

policy priority. It entails changes to governance (simplification of engagement with authorities,

including anti-corruption measures), taxes (lower threshold effects), and a better arrangement for

social and environmental protection and rights (easing real change to the adoption of higher

standards).

Break the vicious circle of access to finance. While liquidity might be an issue in some places,

the likely constraints are in weak formulation of business plans and weak systems for risk-averse

banks to assess them and the SMEs‟ assets and financial strength, with consequent poor financial

intermediation. Corruption and poor practices hindered rational finance and business

opportunities, locking countries into low domestic investment. This can be broken by a new focus

on finance of the SMEs and the informal sector.

Link informal businesses and SMEs to export value-chains. Some sectors, such as

agribusiness and tourism, are bound to contribute revenue to the national economy over the long

term. Special concerted industry-wide efforts to break barriers for SMEs entry, to increase

competition, and to boost innovation should be pursued.

Adapt training systems to raise the productivity of workers and business owners in the

informal sector.

7. Go for Green Growth

The Mediterranean region suffers from extreme ecological fragility. Water scarcity is of grave concern

with immediate consequences on agriculture, the major user of the resource in the region. Water

consumption per capita is the lowest among regions in the world, and set to halve to levels close

to „absolute scarcity „ (< 500m3/per capita/year) by 2050xx

. Vulnerability is compounded by the

heavy concentration of population and economic activity in coastal zones. Water scarcity will put a

premium on demand management and on alternative solutions such as re-use and desalination which are

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largely dependent on new technologies and energy prices. Climate change, which may affect this region

more rapidly and deeply than others, is further predicted to exacerbate the predicament with falling

precipitation and greater volatility in weather patterns.

Precisely because of the severity of the environmental situation and the dependence of major economic

sectors on water and sustainable practices, this region must absolutely internalize environmental

conditions in its economic strategies. It is a life-and-death issue. Conversely, investing in environmental

protection and enhancing natural assets can lead to positive outcomes both for the environment and the

economy and society as a whole. Investing in green growth can lead to enhanced job creation (e.g.

SMEs in renewable energy). If the major urban investments in housing and infrastructure- which certainly

will happen over the next 25 years- are made with long-term sustainability in mind, the difference in

productivity, social cohesion and quality of life will be significantly positive.

Adopt sustainable and integrated water resources management, encouraging reuse, reducing

water losses, reviewing water allocation, adequate use of tariffs, and monitoring of excessive

withdrawals.

Improve climate-appropriate urban and spatial strategies, energy efficiency (as in buildings),

and urban transport systems, opening options for local business, innovation and technology.

Provide the enabling environment for green jobs (including a possible focus on youth) and the

skills needed for them.

Develop a Sustainable Mediterranean framework that guarantees that issues are dealt with at

the regional level and that identifies the following priorities:

o Policies in sustainable natural resources management integrated coastal zone

management; protection of marine resources; vulnerable ecosystems and biodiversity;

water resource management.

o Policies for pollution abatement (corrective and preventive measures): water treatment;

solid and hazardous waste management; industrial pollution abatement; sea

transportation; maritime safety.

o Resilience to climate variability: surface and groundwater reserves under pressure,

increased occurrence of droughts; increased occurrence of floods (weather-related

disaster management).

8. Use Equity As A Tool For Higher Productivity

Large parts of the populations are and feel excluded from productive and public life. Some countries still

face major backlogs of investment in basic health and education. Traditional social security measures are

not geared to have strong impact, nor are they efficient (gasoline subsidies are a case in point), and they

carry a very large fiscal burden. Rising food prices have stressed current safety nets.

However, investment in the basic capacity of disadvantaged people is likely to have a major positive

economic impact. Not only does inclusion foster trust, and its consequent lower transaction costs in a

market economy, but it also increases productivity. While this objective may have been desired, it has not

been achieved. Trust, non-corruption and transparency are key to solid economic strategies.

Redirect „blind subsidies‟ to broad-based or targeted support that has much greater impact.

Consider early childhood investment, using new or any of several models practiced world-wide,

possibly by giving mothers subventions to use for their children strengthening their

empowerment. Conditional cash transfers should be tried, as has proven successful, along with

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other means to break with ineffective systems. Pension and housing finance need to be

modernized.

Reform safety nets also to respond to rising food prices. The high political sensitivity of food

prices and subsidies makes it even more important to have an integrated approach to equity, not a

safety net approach.

Make equity, non-corruption and social justice integral parts of economic strategies. Many

benefits of recent privatizations have been captured by elites, increasing inequality, impairing

economic efficiency and undermining confidence in private sector solutions. There is every

reason to seek to redress ill-captured gains. Coming generation of economic strategies need to

ensure that equity and social justice are embedded in mutually supportive ways.

9. Think of the Knowledge Economy As An Over-Arching Framework

Approximately 40 million jobs will have to be created in MENA in the coming decadexxi

; even more if

low labor participation rates are to rise to levels of other regions. A key to create jobs is to invest more in

knowledge-related domains and develop competitive, high productivity, and sustainable economic

activities – in short, a move towards a knowledge economy (KE).

Comparisons between MENA and Western Europe on how knowledge-intensive their countries are

indicate large gaps: in 2007, MENA countries employed 683 researchers per million people while in

Western Europe this number was closer to 4000 per million; high technology exports as a percentage of

manufactured exports was 5.56% in MENA as compared to 19% in Western Europe in 2007; Western

Europe had almost 5 times more computers per 1000 people than in MENA in 2007.xxii

These gaps

represent significant binding constraints to economic growth and employment generation.

Conversely, rapid catch-up is possible, as evidenced in its own way by the decisive role that modern

communication played in the emergence of the Arab Spring. As countries formulate their strategies for

the next generation, they should consider KE as an over-arching framework. Consider how Estonia in

just 20 years has transformed itself by acting on all fronts with knowledge as a key driverxxiii

. It can be

argued that Tunisia today has better current conditions to become a KE than what for example

Estonia had. This kind of national targeting could become an important driver in unifying purpose and

making hard policy choices.

National KE strategies include:

Act on the four “pillars” of the KE: a favorable economic and institutional regime; a dynamic

innovation system; a strong ICT infrastructure; and a reformed education system. KE-based

growth results from productive interaction between a favorable entrepreneurial climate and wise

use of knowledge assets in education, innovation and ICTs. Focus on steering states into suitable

niches so as to create jobs for youths entering labor markets and help society cope better with

complex problems, such as clogged cities and environmental damage, which require knowledge

and innovation to solve.

Implement pragmatic KE policies customized to country specificities. KE policy agendas

cannot be disconnected from other key policy agendas, such as macroeconomic management,

provision of infrastructure services, or public sector reforms. Governments must take into account

resistance to change/institutional inertia, and hence perhaps begin KE efforts at the pilot scale. In

light of current events, perhaps enthusiasm driven by change provides a good context for

adopting KE-inspired strategies. Leadership structures, including intermediary bodies linking top

KE policy makers with the political, business, and science communities, are essential.

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Make institutions more responsive to KE needs and opportunities. The government should act

as facilitator, guiding and encouraging rather than controlling such development strategies, and as

policy integrator, bringing synergy to the actions of traditionally separate departments, and should

also support the private sector. The global connections and local ties of organizations that thrive

in a KE context (research institutes, educational institutions, private enterprises) should be

mobilized. Indeed, global connections open two-way channels through which flow world

knowledge and expertise; local ties ensure that the KE benefits, and is linked to, the local

economy and society.

Integration

10. Trade Must Be The Driver – Create a Mediterranean Economic Area

For the non-oil producing economies of the Arab Mediterranean, and even for the oil producers,

economic modernization and diversification can only come via trade. While opportunities for trade

across the Arab region and globally, trade with Europe is by far the largest share. Trade brings added

value, investment and innovation. According to studiesxxiv

, limited regional integration means 1-2 percent

of lower GDP growth. For most Arab countries, regional trade accounts for less than 10 percent of total

trade versus 70 percent in Europexxv

. Foreign direct investment is 4-6 percent of GDPxxvi

, most of it from

Europe. While the region is advancing in reducing tariffs vis-à-vis the EU, non-tariff barriers remain. In

2007, the overall trade restrictiveness index for MENA – a measure that includes tariff and non-tariff

trade restrictions – was twice as high as in non-EU Eastern Europe and Central Asia and considerably

above that of other developing regionsxxvii

. High transport and logistics costs further tax the value creating

potential of trade. Harmonization of standards and regulation is another area.

In non-tariff barriers, agriculture and services, there is a backlog of action to benefit from competitive

trade and investment. Recent proposals from the EU Commission importantly set out to accelerate trade

liberalization agreements, including in agricultural and fisheries, as well as in services, and propose a

single regional Convention on pan-Euro-Mediterranean preferential rules of origin. Without serious

trade reform and integration, employment will not follow. Individual countries have the opportunity

to negotiate agreements, especially the statut avancé, with the EU. However, a more ambitious

framework, drawing on the EU‟s own historic experience of expansion and dealing with non-members, is

needed.

Explore the possibility of a Mediterranean Economic Area- a step above current approaches.

While primarily bilaterally negotiated, it would open the opportunity for a structured framework

of economic integration, encompassing trade and competition regulation and a chosen range of

acquis of the European Union.

Support the internal trade-supporting reforms to enable the businesses of the Southern and

Eastern Mediterranean to grow.

Invest heavily to reduce transactions costs at points of trade, both by investing in facilities and

in upgrading and simplifying regulation.

Explore expanding the financial leverage of existing or new financial institutions, to

complement current institutions to work especially with the private sector.

11. Solar Energy Can Power Integration

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Solar energy can give the Mediterranean countries a new source of export earnings, strengthen

their own energy security and give opportunity for jobs and business innovation. MENA can

become a champion for climate change mitigation and green technology. Given the physical attributes of

MENA, the potential access to the high-paying EU green electricity markets, the interest of the Northern

Mediterranean countries to meet their de-carbonization targets, and the eligibility for climate financing,

investment in solar energy represents a win-win for the Mediterranean. The MENA region is the most

promising place globally to get cost reduction for Concentrated Solar Power (CSP)xxviii

, a truly

sustainable renewable energy option, through manufacturing economies of scale. This means huge

employment opportunities in the manufacturing sector, with estimate of 65,000 to 80,000 new jobs in

MENAxxix

.

Put in place supporting financial and regulatory mechanisms through active European

political leadership, in particular by allowing market access for MENA CSP exports to

Europe. Some countries in the region like Morocco have decided to rise up to the challenge but

the need is now to find off-takers in Europe. The France-Morocco agreement is a start but more

European countries need to follow this path.

Ensure technology transfer, promote local business and employment opportunities, and

reduce transaction costs as countries embark in new CSP investment projects. On the ground in

Southern Mediterranean Countries, there is a real need for qualified personnel as major

investments are being planned. Support both to skills training and business plans is an essential

element for the win-win opportunity.

12. People-To-People Relations Is the Essence

Even more so after the Arab Spring, the Mediterranean emerges as a true microcosm of managing

interdependence and globalization. The 500 million inhabitants living around the Mediterranean Sea

are bound to share a common future, given their thousands of years of shared history, current economic

and social realities, and imagined scenario of security and stable prosperity. That is why focus must be on

the huge opportunities lying ahead of them as an integrated region.

A new paradigm is emerging focused on a people-driven approach to development challenges. To

transform these opportunities into reality, forces should be joined to facilitate “people-to-people”

exchange through a bottom-up approach to build this shared destiny. A range of facilitating mechanisms

is available:

Help youth and marginalized groups get connected to broader networks using new social media

to channel voices and solutions to development challenges.

Facilitate twinning arrangements between cities, urban specialists, private operators, academics,

and emerging leaders for peer-to-peer learning and drafting of development or action plans in key

sectors.

Support participation of civil society members in existing government structures to modernize

administrative systems.

Facilitate the valuable untapped diasporas to contribute to economic and social renewal, and;

Support the creation of professional and training networks in the Mediterranean region (in

specialist areas such as on transport and logistics, environmental prosecutors) to facilitate flow of

information, make economic value-added chains more efficient, strengthen public service, and

ultimately overcome differences and contribute to a spirit of Mediterranean togetherness.

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What the Center for Mediterranean Integration Can Do Egypt, Morocco and Tunisia, and others, will coordinate the support that they as individual countries

seek. It is equally imperative to create a more ambitious genuine Mediterranean integration. With major

multilateral institutions putting their resources to its service, with the EU as a major anchor, and with a

possible new role for the Union for the Mediterranean, there are significant opportunities that can be

tapped. However, there is scope for much stronger interaction in a way that surpasses old uni-

directional paradigms of technical assistance and projects, which would focus on new ways of

working that would bring us closer to the way the region needs to work in the long term. Such pragmatic

networking, collaboration and commerce at all levels of societies and economies are imperative if the

Arab Spring is going to lead to summers and cycles of lasting harvests.

The CMI is a pragmatic platform from which partner countries throughout the region can discuss ideas

and processes that will help the transition to new institutional and political arrangements and facilitate

informed public policy in the arena of sustainable human development. The Center can draw on a broad

range of institutional and independent expertise and resources to serve countries‟ interests in upstream

and technical reflections. The strategy would be to focus on building and strengthening the knowledge

base in key development areas to serve as inputs for the formulation of new policy reforms, including

possible up-stream consultations on new cooperation programs by partners.

Provide a space for high quality reflection by new leaders on key priority issues. This would

consist of non-official policy seminars bringing national leaders together with international

expertise, looking at lessons learnt, benchmarking, and good practices. The CMI‟s network with

think tanks in the region (we have approached 110) and outreach to civil society members would

add a bottom-up and participatory approach. In addition to giving input and add to quality, these

networks in themselves can ensure sustainability of efforts. Possible targeted themes can easily

be drawn from all areas indicated above.

Provide evidence-based analysis to assist public policy debate, and assist in developing useful

tools, specifically for communities of practice, such as a University Score Card for leaders of

higher education. This method of work, drawing on precedents for example at the OECD, can be

developed in many areas.

Contribute to a knowledge virtual platform for data collection in the MENA region and design

and disseminate sectoral toolkits.

Scale up peer-to-peer exchanges between decision makers and practitioners from both rims of

the Mediterranean.

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Endnotes

i This document was prepared for a meeting of the CMI Strategic Council April 1, 2011, www.cmimarseille.org, drawing directly on CMI member institutions’ work, much of it predating the Arab Spring, but with some recent work, particularly by the World Bank. This version, with edits subsequent to the CMI Strategic Council meeting, is posted on the CMI website, without implicating any members of the CMI or of its Strategic Council, www.cmimarseille.org ii Mats Karlsson, “Using Evidence to Bridge the Untenable Gaps”, IEMED, Barcelona, 2010

iii World Bank, MENA Development Report: From Privilege to Competition: Unlocking Private-Led Growth in the Middle East and

North Africa, Washington, DC, 2009. Available at: http://siteresources.worldbank.org/INTMENA/Resources/MENA_Development_Report-From_Privilege_to_Competition_Key_Messages_EN.pdf iv The geographic coverage for the Mediterranean is often defined as follows: Southern & Eastern Mediterranean Countries

(SEMCs)- Bosnia & Herzegovina, Croatia, Kosovo, Montenegro, Serbia, Albania, Algeria, Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia, Palestine, Libya, Israel, Turkey; Arab Mediterranean Countries (AMCs)- Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine, Syria, Tunisia; Northern Mediterranean Countries (NMCs)- Cyprus, France, Greece, Italy, Malta, Portugal, Spain, Turkey; EU Med countries- Portugal, Spain, France, Italy, Slovenia, Greece, Cyprus, Malta v This represents about 7.4% of world population, where world population is estimated to be 6.8 billion (2009) by Source: World

Bank (WDI) vi

This represents about 8.6% of world GDP, where world GDP is estimated to be around 58 trillion in current prices for the year 2009 by Source: World Bank (WDI) vii

Source: World Bank (GDF & WDI). Population data is for 2009, GDP (constant 2000 USD) for 2008, and GDP annual growth

rate for the period 2000-2008. Comparisons on these between the EU Med countries and SEMCs are as follows: (i) Population- 194 million for EU Med, 305 million for SEMCs; (ii) GDP- about 4 trillion for EU Med, 1 trillion for SEMCs; (iii) GDP growth- 1.7% for EU Med, 4.3% for SEMCs viii

Martin, Ivan. “Youth Employment in Arab Mediterranean Countries: The Key to the Future”, IEMed, 2009 ix World Bank, MENA Development Report: Gender and Development in the Middle East and North Africa: Women in the Public

Sphere, Washington, Dc, 2004. Available at: http://siteresources.worldbank.org/INTMENA/Publications/20262206/genderoverview.pdf x La Cava et al., Investing in Youth in the MENA Region: Lessons Learned and the Way Forward, MENA Quick Notes Series,

Number 31, The World Bank, September 2010 xi “World Urbanization Prospects, the 2009 Revision”, United Nations

xii Barcelona Call for Local Empowerment in the Mediterranean, CMI website

xiii World Bank, MENA Development Report: From Privilege to Competition: Unlocking Private-Led Growth in the Middle East

and North Africa Washington, DC, 2009. Available at: http://siteresources.worldbank.org/INTMENA/Resources/MENA_Development_Report-From_Privilege_to_Competition_Key_Messages_EN.pdf xiv

36% is the average of available results from Egypt, Lebanon, Algeria, Syria, Jordan, Morocco and WBG xv

Angel-Urdinola, Diego F. et al., “Non-public Provision of Active Labor Market Programs in Arab Mediterranean Countries: an Inventory of Youth Programs”, Social Protection Discussion Papers 55673, The World Bank, 2010. AMCs defined as: Algeria, Tunisia, Morocco, Syria, Jordan, Lebanon, Egypt, West Bank Gaza, and Yemen. xvi

Martin, Ivan. “Youth Employment in Arab Mediterranean Countries: The Key to the Future”, IEMed, 2009. xvii

World Bank, MENA Development Report: Unlocking the Employment Potential in the Middle East and North Africa: Toward a New Social Contract, Washington, DC, 2004. Available at: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/06/03/000012009_20040603143832/Rendered/PDF/288150PAPER0Unlocking0employment.pdf xviii

The Status Of Bank Lending To SMEs In The Middle East And North Africa Region: The Results Of A Joint Survey Of The Union Of Arab Banks And The World Bank, June 2010. Available at: http://siteresources.worldbank.org/INTMNAREGTOPPOVRED/Resources/MENAFlagshipSMEFinance12_20_10.pdf xix

Assaad, R. and Barsoum, G. (2007) “Youth Exclusion in Egypt” Working Paper. Brookings Wolfensohn Center for

Development/Dubai School of Government.

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xx

Making the Most of Scarcity : Accountability for Better Water Management Results in the Middle East and North Africa,

World Bank, 2007, page 6 xxi

World Bank, MENA Development Report: From Privilege to Competition: Unlocking Private-Led Growth in the Middle East

and North Africa Washington, DC, 2009. Available at: http://siteresources.worldbank.org/INTMENA/Resources/MENA_Development_Report-From_Privilege_to_Competition_Key_Messages_EN.pdf xxii

Source: World Bank Knowledge Assessment Methodology, www.worldbank.org/kam xxiii

Building Knowledge Economies: Advanced Strategies for Development, World Bank, 2007. Available at:

http://siteresources.worldbank.org/KFDLP/Resources/461197-1199907090464/BuildingKEbook.pdf xxiv

World Bank, MENA Development Report: Unlocking the Employment Potential in the Middle East and North Africa: Toward a New Social Contract, Washington, DC, 2004. Available at: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/06/03/000012009_20040603143832/Rendered/PDF/288150PAPER0Unlocking0employment.pdf; World Bank, Is there a new vision for Maghreb economic Integration?, 2006. Available at: http://siteresources.worldbank.org/INTMENA/Resources/383590v10MAGHREBREPORTVOL1FEBRUARY2007.pdf xxv

Akhtar, Shamshad, “Regional Integration and the Arab World: The World Bank Group Working with Donor Partners”, ForUM,

Marseille, May 27, 2010 xxvi

Ibid. xxvii

Ibid. xxviii

Clean Technology Fund: Investment Plan for Concentrated Solar power in the Middle East and North Africa Region, CTF/TFC.IS.1/3, November 10, 2009 Inter-sessional Meeting of the CTF Trust Fund Committee, Washington, D.C., December 1-2, 2009, p.4 xxix

European Solar Thermal Electricity Association (ESTELA) “Solar Power from Europe’s Sun Belt” A European solar thermo-electric industry initiative contributing to the European Commission “Strategic Energy Technology Plan”, Brussels, June 2009

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