North African Regional Integration: A New Paradigm

NESA Center Alumni Publication
By Dr. Arslan Chikhaoui**
14 April 2021

1. The Overall Landscape

The Mediterranean is mostly characterized by acute and latent conflicts both within the region and between countries. The crucial difficulties of the region include low development and differences in wealth between North and South, as well as high population density in the South. The consequential problems are high unemployment, a foreign trade imbalance and a high level of indebtedness, domestic tensions, political instability, and a generally high potential of violence.

The Mediterranean has been and continues to be the major route for trafficking, East-West and North-South. There is a drastic imbalance between the two shores of the Mediterranean in demographic figures, both in terms of population and age. The southern Mediterranean countries are in the midst of a demographic transition. The North African population is expected to reach 260 million by the year 2025, whereas the total population of all EU members is expected to be roughly 300 million. In the southern Mediterranean, 45% of the younger population is under the age of 15, whereas this percentage is only 25% in the north.

This demographic imbalance, coupled with stagnant economies and rapidly increasing unemployment in the southern Mediterranean states, creates migratory pressures towards the north. It seems that until the equally advantageous economic, social, and cultural conditions of the North are realized in the South, migration will continue to be of the major concern in the Mediterranean. There are approximately 6 million immigrants from the North African states who are currently living in European countries, mainly France, Italy, and Spain.

At the economic scale, the region reflects the deepening gap between the industrialized world and the developing countries. In terms of its economic efficiency, the entire region lags behind the European average. Among the countries bordering on the Mediterranean, those in North Africa encounter particularly severe problems. Agricultural production is not sufficient to feed the population, and industrialization is often domestically oriented and unsuccessful by market standards. A special situation is created by oil revenues of the states of the Middle East and North Africa (MENA) region. What are largely lacking in the oil states is an industrial mentality as well as awareness of the working value of one’s own assets.

Regarding the political situation, social tensions and unstable systems of governance determine the domestic policy situation nearly everywhere in Europe. The processes of political decision making are frequently dominated by monopoly or quasi-monopoly parties.

The political development following decolonization reflects the history of failed attempts to copy or transfer western patterns of governance and administration to the young states. In spite of its collective character, the socialist model also failed to attain any lasting success. Both models of state rulership have not succeeded in generating a sufficient measure of domestic and social policy consensus. The challenge for the forthcoming years of the MENA region bordering the Mediterranean is to shift from rulership to leadership.

The specific causes of crises and wars in the region include the uneven distribution of natural resource revenues. The border conflicts in the Near East have an economic dimension; the exploitation of submarine resources, and the unimpeded access to the high seas and airspace rights are important elements of the states’ economic policy. The Southern and Eastern Mediterranean region is characterized by conflicts over access to water; its availability is of continuously increasing importance. The distribution of water resources in the region may become a source of international conflicts. Control over water as well as energy may thus develop into the central non-military power instrument.

The Mediterranean is in a situation of an increasing number of low intensity conflicts or domestic unrest. Access to vital resources such as water and the securing of material requirements, the right of social and political identity, as well as participation in the political decision-making processes, all describe individual rights and interests whose implementation tends to be doubtful in the future.

 

2. Challenges of Emerging North Africa

Advances in political cooperation and a larger role for regional institutions could impact economic activity in the region through two main channels. First, an emerging North Africa could do more to facilitate intra-regional trade which would allow countries to specialize in their areas of strength and yield a positive growth dividend. Second, by reducing internal trade barriers, the region would become a more integrated market and thus be more attractive to FDI which often seeks a large customer base.

The North Africa region faces the sizable challenge of having to create 16 million jobs for its growing labor force by 2025. High and sustained growth is a pre-condition for such large-scale job creation and for raising incomes. This, in turn, can be achieved by strengthening trade competitiveness so that the region can better benefit from globalization and the dynamics of today’s high-growth regions. Improving education outcomes and ensuring that graduates acquire the skills needed by the private sector is key to attracting firms that can compete in the global marketplace. These firms also seek business-friendly environments, calling for further streamlining of regulations and additional investments in infrastructure—including through Public Private Partnerships (PPP) or by encouraging private sector investments—to increase the region’s competitiveness. The emerging region can build on successes already achieved.

The following issues should be addressed to sustain an emerging North African integration:

• Economic stability: the consolidation of trade relations and the promotion of equalization of economic interests in the region.
• Military stability: the prevention of military predominance in favor of one side, within the region, with reference to Israel and between the Northern and Southern states bordering on the Mediterranean.
• Stabilization of the protagonists: support for those forces that contribute to cooperation and the balance of interests in the region; further development of political cooperation in the sense of intensifying and institutionalizing the dialogue.
• Build trust and confidence.

First, the economic cooperation between the Southern participants of the Mediterranean partnership is still poor. Regional cooperation must be supported, as it is a way to fight the asymmetry of the partnership. This could be done by FDI to initiate a new process of regional cooperation. This will create a new pressure to get a more competitive economic structure and to boost the ongoing reforms.

Second, there is still the underlying contradiction of the partnership that the political and economic cooperation being successful would endanger the power and the influence of the political elites in many of the countries in the Mediterranean region. Nevertheless, with a generational change there is a chance for real political transformation in the region.

Third, more emphasis should be put on intensifying dialogue with civil society, not only between the classical type of NGOs but on the economic level with trade unions or other professional organizations.

Fourth, the EU will need “flexibility” and should revisit the European Neighborhood Policy. Fighting against illegal immigration and human trafficking does not mean demonizing foreigners, which enhances mistrust. It is too easy to confuse any racism or intolerance of others. The stakes of European policy on migration are to ensure and protect the rights and freedom for all. It aims at building solidarity between the rich North and the disadvantaged South.

Fifth, the creation of a North African Free Trade Zone would boost the economies in the region and would have a direct impact in the short run. The intra-regional trade as a whole could increase by 3 to 5%, i.e. 3 to 5 billion Euros, and FDI by 75% that is about 5 billion Euros per year. The North African sub-region has many assets that could facilitate this integration. These include:

• A cultural homogeneity;
• A young population;
• An energy, industrial, and agricultural potential;
• A geo-strategic position, thanks to its proximity to Europe and its opening on Africa.

Sixth, as a source of instability in the region, the peace process is not only a matter of European interests but also a European responsibility for the whole region.

 

3. Conclusion

In the long run, the rule of law and democracy are the key component for political and economic stability in the region. What is needed is to find more and better ways in which the countries of the region can come together in a concerted effort of economic region-building confidence.

The main challenge for the international community in general, and EU in particular, is to boost efforts already under way to open up national economies to productive intra-regional trade, investment, transfer of knowledge, and innovation and technology-sharing in order to deepen the collaborative process and to ensure that existing regional economic institutions are truly effective instruments for region-wide economic development and creating new ones as necessary.

In short, a homogeneous and peaceful and integrated emerging North Africa would represent a double geopolitical and economic interest for the next decades. Thus, the new paradigm of an emerging North Africa integration is “market” and “mobility”.

AC / 14.4.21

** Dr. Arslan Chikhaoui, is currently Chairman of the Center for Consultancy and Studies (www.nordsudventures.com ). He is a member of the Expert Advisory Council of the World Economic Forum (WEF-Davos), of the Defense and Security Forum Advisory Board (DSF-London), and of the United Nations Civil Forum (UNSCR 1540). He is an Alumnus of the NESA Center for Strategic Studies (NDU-Washington DC). He is also a stakeholder in various ‘Track II’ working groups as SSR in North Africa, Non-Proliferation of Weapons of Mass Destruction in the MENA region, New Partnership for Africa’s Development (NEPAD), and Security in the Mediterranean, North Africa and Sahel.