You are here : Home > Publications > Analysis

Publications

MEDays 2012 : What new accelerators for Green Growth ?

10
May

2013

Workshop Amadeus : Sahara, la bataille de l'image

27
March

2013

Première édition prometteuse pour la Global Growth Conference !

22
March

2013

Début des travaux de la Global Growth Conference

Access all news

14
Nov

2012

Forum MEDays 2012, le Sud et l'exigence d'un nouvel ordre mondial

16
Nov

2011

Forum MEDays 2011 : " Le Sud dans la gouvernance mondiale"

29
Aug

2011

Rencontre de réflexion : quelle représentativité des jeunes en politique ?

Visit our global agenda

Despite uncertainties, the ufm advances

Article Index
Despite uncertainties, the ufm advances
Page 2
Page 3
Page 4
Page 5
Page 6
All Pages

What will become of the UfM (Union for the Mediterranean)? Following its creation in 2008, the Amadeus Institute dedicated its first MEDays forum to this new and ambitious organization.

This year marks the second anniversary of the UfM, and it is worthwhile to examine the progress made and difficulties faced by this organization. The Amadeus Institute has chosen to address the subject by re-contextualizing it and focusing on the more sensitive points, namely, the role of the secretariat and funding. What can the secretariat do in the face of new obstacles? Is the problem of funding being resolved? The future of the UFM depends on the answers to these two major questions.

Download the analysis

1. Difficulties facing the ufm and challenges for the new secretariat

1.1. A difficult transition for the co-presidency

Two years after its inception on July 13, 2008 in Paris, the UfM is preparing to change the rotating co-presidency, and not without difficulties. On the Northern side is Spain, which was the president of the European Union after France. This “coincidence” marks the influence of Brussels on the UfM. At the moment, however, the situation is unclear, in part due to the lack of official communications. Given the continuing silence of the Spanish representatives, we might look closer at some of the speculation regarding the new UfM co-presidency.

Some suggest that there would be two options for the Northern presidency: either Spain or the European Commission (EC). Were the second option to become a reality, it would most likely mean greater transparency and better complementarity for Euro-Mediterranean politics (UfM and European Neighborhood Policy). On the other hand, the UfM might be pushed to the background by the EU—and thus be relegated to the status of just another unrealized policy. In this vein, we might fear that the EU will privilege the interests of European countries, many of whom do not border the sea, and are not truly interested in the Mediterranean, over those of the countries residing in the South. Even if a country from the South presided over the UfM alongside the EC, the political weight and powers of decision-making would tilt dangerously in favor of the North. This would repeat one of the greater errors of the EuroMed partnership. It remains desirable for a country from the South, directly concerned with Mediterranean issues, to hold a co-presidency with a country from the North.

The above is, of course, mere speculation. We still need more information about the new co-presidency, particularly given the considerable challenges that the two presiding countries will face. On the Southern side, the situation is perhaps even more obscure: due to continuing disagreement amongst members, the successor to the Egyptian presidency has yet to be announced.

Back

1.2. Summits delayed by lack of diplomatic consent

Initially, the co-presidential transition was due to occur on June 7, 2010 in Barcelona, during what would have been the second Summit of Chiefs of States of Members of the UfM. However, the summit was delayed due to a lack of participants. Several days later, the Ministerial Conference on Agriculture, due to take place from June 15-16, 2010 in Cairo, was also canceled.

Thus, at a moment when the UfM should be taking the next steps following its initiation two years prior, the process continues to face significant problems. First, the open wound of the Israeli-Palestinian conflict continues to strain relations between Arab countries and Israel. The Israeli raid on the humanitarian flotilla on May 31 in Gaza renewed regional tensions, and clearly had effects on the UfM. Numerous conferences have either resulted in failure, such as the Conference on Water last April which contributed one word too many to this eternal conflict, or have been canceled or postponed. Dialogue between Israeli and Arab representatives is often avoided at the expense of the advancement of the UfM.

Other conflicts in the Mediterranean region should not be underestimated. These include the Cypriot blocking of the appointment of a Turkish assistant secretary, a matter which was fortunately resolved, and the complicated relations between two neighbors in the Maghreb, Morocco and Algeria. All of this equally affects the difficult passage into a new co-presidency for the UfM. However, this advancement does not depend solely on political and diplomatic consensus.

1.3. The funding question: another potential hindrance

The question of funding remains rather uncertain and is thus the second major hindrance to the advancement of the UfM. From a pragmatic point of view (in the spirit of those that initiated the UfM), this question is undoubtedly the most important. Especially if one takes seriously the initial objectives of the UfM which called for “a union of projects.” This concept signifies the circumvention of piecemeal politics by putting into place concrete projects intended to generate de facto solidarity. Today, the famous “union of projects” is being kept from realization by political indecision.

These two main reasons, conflicts and funding, have seriously limited the first co-presidency of the UfM, in addition to the belated implementation of the Secretariat. The stakes are high. For the South, these include the problems of poverty reduction and the socio-economic evolution brought about positive economic results. For the North, the stakes revolve around the development of weak trade (i.e. developing the markets of the South in order to exchange knowledge with businesses from the North) and controlled immigration.

Without forgetting the difficulties listed above, we can, however, mention several notable advances. The UfM remains a courageous initiative, potentially very beneficial for a Mediterranean region in search of instruments for cooperation and an optimal framework. Can this framework be realized by the Secretariat of the UfM?

Back

2. The secretariat: the official inauguration into office

2.1. The particular context of the creation of the secretariat

The Secretariat of the UfM was inaugurated into office on March 4, 2010 at the Pedralbes Palace in Barcelona. Ahmed Massdeh, Jordanian ambassador to the European Union in Brussels, was appointed to be Secretary General. Apparently, Tunisia, disappointed because it was not chosen as the seat of the Secretariat, was reluctant to propose a Tunisian candidate for the position of Secretary General (SG). France, however, supported the nomination of someone from the Maghreb, following historical and linguistic affinities, as well as diplomatic obligations. France had in fact “promised” the position of SG to Tunisia, in order to compensate for the loss of the seat of the Secretariat. In the end, Ahmed Massadeh was the only candidate elected by “diplomatic” consensus by the members of the UfM. Unfortunately, a more official means of voting has yet to be found. A year and a half after the official creation of the Union, time was short. Thus, a Jordanian is at the head of the Secretariat, and six Secretary General Assistants: a Palestinian for water and environment, an Israeli for research, a Turk for transportation, a Greek for energy, a Maltese for civil protection and finally an Italian for economic development. However, some of the above have yet to be officially appointed—another factor delaying the taking of office by the Secretariat.

2.2. The secretariat: an important role that is in need of better definition

The Secretariat has officially inaugurated into office a Secretary General, but for the moment the role of the Secretariat itself has been marginalized to the detriment of the UfM’s advancements. The establishment of a fully functional Secretariat is yet to be realized. The legal statutes seem quite short and rather vague. In all likelihood, the Secretariat will be entrusted with general monitoring, the promotion of new projects and the seeking of funding partners. Likewise, it will to ensure corporation between partners by providing them with the appropriate assistance, and by working jointly with other organs in the UfM (Joint Standing Committee, Offers, and co-presidency). Above all, this last point is currently missing. Indeed, the distribution of decision-making power and the reliance on another organ minimizes the role of the Secretariat. Moreover, the function of technical assistance is mentioned in the organizational statutes, as planned from the start, but it is not clarified enough to be effectively implemented. Lastly, the question of funding for the Secretariat has yet to be resolved. The position is necessarily funded by equal and voluntary contributions coming from the members of the UfM and the EU, but a number of countries have shown reluctance to contribute. Notably these are countries that do not border the sea, and who have, nonetheless, insisted on being part of the UfM.

It will thus require real effort for the institutional organ of the UfM to become effectively functional. To do so, it will need to take responsibility for both technical support given to projects currently controlled by donors’ and for the entire process in general. Indeed, if donors wield such considerable power in the process, this is testament to the fundamentality of funding.

Back

3. Funding: between deadlock and availability

3.1. In the past, funding was more distinctly dedicated to the mediterranean

At the time of the EuroMed Partnership (EPM or the Barcelona Process), the main funds belonged to the MEDA. According to the official site of the European Union, “The MEDA program [saw] the implementation of cooperation measures designed to help non-member Mediterranean countries undertake social and economic reforms and mitigate the effects of economic development on social and environmental frameworks (http://europa.eu/legislation_summaries/external_relations/relations_with_third_countries/mediterranean_partner_countries/r15006_fr.htm).” In other words, the funds covered practically all three components of the PEM, political, economic and social. The struggle for democracy and human rights were equally taken into account. MEDA’s ultimate goal, however, was the establishment of a Euro-Mediterranean free trade zone.

The MEDA I fund was launched in 1996, the year following the creation of the PEM. It was revised in 2000 and became MEDA II. MEDA enjoyed a budget of 4.385 billion Euros for the period of 1996-1999, and MEDA II has been given 5.35 billion Euros for the period 2000-2006.

In 2007, the MEDA funds were replaced by the ENPI (European Neighborhood and Partnership Instrument), which came hand in hand with the ENP, or European Neighborhood Policy, developed in 2004. The budget allocated for the period 2006-13 is nearly 12 billion Euros. Notably, this budget is not uniquely concerned with Mediterranean countries, and its objectives are not uniquely linked to the EPM but rather more generally guided towards “enhanc[ing] prosperity, stability, and security in the European neighborhood (http://ec.europa.eu/europeaid/where/neighbourhood/overview/index_fr.htm).” This policy is, of course, subject to European debate and consensus. As such, there is always the risk that the Mediterranean will be pushed to the background, even if the budget is generally more consistent.

During this same period, however, specific instruments for the Mediterranean were successfully launched, including the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) of the EIB (European Investment Bank), which was created in October 2002. Through the FEMIP, the EIB has invested 10 billion Euros between October 2002 and December 2000 towards the development of Mediterranean countries. Today, the FEMIP constitutes a major financial instrument of the UfM. However, the need for funding remains considerable. Yet, both the current situation and the future may turn out much better than many might think.

3.2. Commitment to semi public funding

The FEMIP and other funding instruments have been mobilized for the UfM. According to the European commissioner Stefan Füle and the EIB, the total amount of required investment for the UfM is 250 billion Euros over ten years (EBI figure) . However, it is difficult to assess the current state of funding and the needs of the project.

Last January, the French economy-focused magazine “Les Échos” announced that 8 to 10 billion Euros were available for the UfM – for 2009 – without including the opportunities presented by the private sector. While this estimation is difficult to verify, it seems overly optimistic. However, according the Amadeus Institute’s research and calculations, this amount might not be far from reality:

Funding from the European Commission: 90 billion Euros since 2008
Inframed : 385 million Euros, with an objective of one billion by the end of 2010
The Mediterranean Carbon Fund (operative in 2011): 200 million Euros
The World Bank, via the Clean Tech Fund: 750 million dollars for the Mediterranean Solar Plan
The FEMIP: 1.2 billion Euros for 2009
The FDA (French Development Agency): 6 billion Euros for the Mediterranean between 2009 and 2013 (While the percentage of these 6 billion Euros intended for the UfM is uncertain, the FDA is one of the largest contributors to the Union’s projects. The creation of the FISEM (Investment Facility to Support the Economic Development of the Mediterranean) – which mobilizes 250 million Euros for Small and Medium Enterprises - is particularly relevant.)
The GEF (Green Environment Facility): more than 50 million dollars
FDA, EIB, KfW: 5 billion Euros over 5 years for the Mediterranean Solar Plan

While this calculation lacks precision, the sum of these figures averages 10 billion Euros, which are available for the projects. Most of this money comes from the North and is dedicated to sustainable development projects. What, then, slows down the projects’ advancement? One reason is that most of the funding has been promised and has not yet been used. It is probably here a problem of time, the time to put aside the political aspect and dissociate it from the projects’ progress…

Indeed, because of political obstacles, the UfM loses credibility in the eyes of investors. Yet, its added value is undeniable – with more flexible coordination for projects and funding at the level of the Secretariat, it can expect to attract more funding sources, semi-public but also private.

Back

3.3. The reduction of all types of risks: a necessary measure for greater private investment

The issue of funding from the private sector, a sector marked by larger vulnerability to risks and uncertainties, remains a sensitive question for the UfM. Beyond the enthusiasm expressed at the Marseilles For’UM (The Marseilles For’UM was organized by the French-Egyptian co-presidency of the UfM on May 27, 2010. This forum mainly focused on the Union’s funding, and gathered more than 600 participants, including politicians, businessmen, donors and representatives of civil society. This forum was a success, providing the new support needed to revive the UfM.) , experts from the private sector (http://www.medafrique.info/news/show.php?id=1339&login=&token)  have made specific recommendations to make the UfM more attractive to investors:

Consider the private sector as a key player in the buildup of projects rather than a mere supporter
Clarify the roles of the Secretariat and the European Commissioner in the UfM’s governance
Continue to support the reforms in Southern countries in order to develop markets and guarantee a sustainable economic environment
Create a euro-Mediterranean free trade zone, based on existent bilateral agreements
Encourage the development of Small and Medium Enterprises (SME) in the Mediterranean
Support the fund Invest in Med (http://www.invest-in-med.eu/fr/le-projet-invest-in-med-2.html: “The Invest in Med program seeks to develop sustainable business relations, investments and enterprise partnerships between both shores of the Mediterranean. It is led by the consortium MedAlliance and receives 75% of its funds from the European Union (2008-2011).” The private sector seems satisfied with the use of the funds in recent years and has encouraged the further development of this program.)

3.4. Announcement of new funds

As mentioned earlier, financing of the UfM, divided between the Secretariat and several projects, is the key problem explaining its slowdown. However, beyond the financial contributions of the European Commission and other institutions, three new elements offer encouraging prospects.

Firstly, the creation of the Inframed investment fund was announced during the Marseilles For’UM, which took place from May 26-27, 2010. This fund, designed to finance UfM projects, has a budget of 385 million Euros, to which financial institutions of many countries contribute, including Morocco, Egypt, Italy, France and the EBI (The French Caisse des Dépôts et des Consignations (CDC) and the Italian Cassa Depositi e Prestiti both are contributing 150 million Euros. Likewise, the Moroccan Caisse de Dépôt et de Gestion (CDG) will provide 20 million Euros, the Egyptian EFG-Hermes will supply 15 million Euros and the EIB will donate 50 million Euros.). This fund will mostly support infrastructure for projects focused on energy, transport or the environment. The objective is to gather one billion Euros by 2011 through the multiplier effect and new funds from the Gulf.

Secondly, the creation of the Fonds d’Amorçage de Réalisation et d’Orientation (FARO) was announced during the same forum. This fund consists of one million Euros to be invested in fifty innovative SME in the Mediterranean region. Contributions to the fund come from the French Development Agency (FDA), the Caisse des Dépôts et Consignations (CDC), Oséo, and the French government (via the UfM mission). This new funding instrument is particularly interesting because financial support to SME has been a recurrent recommendation of the private sector’s experts. These experts focus on innovation and the development of common markets. Moreover, this initiative provides a successful example for other countries. Italy and Morocco are already considering the creation of similar FARO funds.

Thirdly, a promising new element is the thorough research conducted for the creation of a Mediterranean bank of co-development. This bank is designed to provide support for the private sector in the region, and was launched by Charles Milhaud’s commission. Rather than creating a new financial institution, which is subject to many political obstacles, this project aims to use the EBI’s funds for euro-Mediterranean co-development and coupling them with private funds. This may well represent the missing financial instrument needed for the UfM to become successful.

Back

4. Conclusion: the future advancement of the ufm

Six months after the “Cast Lead” operation in Gaza (December 2008 to January 2009), which brought to a complete standstill the progress of the new Union, a ministerial conference was organized in Paris on June 25 2009. The conference sought to revive the process through the common goal of sustainable development. Water (de-pollution of the Mediterranean) and energy (Mediterranean Solar Plan) are still the UfM’s main priorities. Today, three major obstacles to the progress of the Union remain: the unclear role of the Secretariat, the question of project funding and conflicts.

The UfM can take action to address the first two hindrances. The Secretariat needs to be redefined, both politically and technically, in order to give a much-needed boost to the process. The issue of the Secretariat’s funding, although somewhat ignored, will soon be addressed. This is a small challenge considering the effective missions of the UfM and the role that the Secretariat has to play in coordinating and supervising all the projects. The actions and personality of the Secretary General are also important. The UfM has already achieved several successes and the process should not stop here.

The second problem is the question of funding sources. Fortunately, actions are being taken to overcome this obstacle, including the announcement of new funds during the Marseilles For’UM. Dealing with financial problems requires a realistic approach, which will be beneficial to the projects’ progress. The private sector still needs to be persuaded in order to contribute significantly to the financing of the projects.

Finally, conflicts remain the central problem, especially the Israeli-Palestinian conflict. However, a ready-made solution does not exist. Dialogue, negotiations and careful diplomacy must be sustained in order to find a solution. The UfM’s mission does not include conflict resolution, although it can provide a framework conducive to peace talks through common projects. It cannot replace international diplomacy, and rather seeks to be effective on the ground through its “union of projects.” Conflicts are thus beyond the UfM’s range of action, and it can attempt to address this obstacle only indirectly. It is preferable to think of each progress of the UfM as a small victory, despite the persistence of conflicts. As Caroline Cornu, Henri Guaino’s deputy and chairman of the inter-ministerial UfM mission, stated: “During the last two years the UfM has often been considered as dead! Well, it is alive. It is moving forward. Slowly. But it is still alive (http://www.lejmed.fr/Caroline-Cornu-au-Forum-de-Paris-L.html).”

An example of advancement: solar energy projects

Numerous projects are currently underway, but most are still not concretely implemented. An example of the most advanced project of the UfM is the Mediterranean Solar Plan (MSP). It seeks to develop renewable energies in countries South and East of the Mediterranean and to export part of the electricity to Europe. The established goal is the production of 20 GW by 2020. Today, only 10 GW projects exist, with 2 GW ready for use, and 0.6 GW already financed (EBI number announced at Valence in May).

The profitability of renewable energy projects is the main concern. Indeed, solar and wind energy remain much more costly than fossil fuels such as coal, oil or gas. Without substantial efforts on the part of governments, such as buyback tariffs and legislative reforms, few investors will risk investing in renewable energies. However, the impetus created by the MSP has triggered the implementation of reforms in many countries and the creation of national solar plans – Morocco and Tunisia provide useful examples. Although there is still considerable progress to be made, the MSP is the UfM project that receives the largest financial support. 5 billion Euros have been promised by KfW-FDA-EIB for the next 5 years along with funds from the World Bank, through the 750 million dollars Clean Tech Fund. Regarding trans-Mediterranean transportation of the electricity, the initiative Transgreen was launched on July 5 2010 and will operate within the framework the MSP. We thus have the basis for slow, promising progress.

Télécharger l'analyse

Back