A post pandemic economic recovery?
The EU’s joint communication from the EEAS and Commission on a ‘renewed partnership with the southern neighbourhood’, issued in early February, attempts to inject new dynamism into its relations with the region.
Many on both sides of the Mediterranean argue that the initiative is badly needed, given the economic and health effects of the pandemic and simmering conflicts in Syria, Libya, Israel/Palestine and elsewhere. In addition to their human cost, ongoing wars and their aggravation of extremism and illegal immigration represent a constant threat to both north and south.
A top priority is a ‘new economic and investment plan’, which, working with IFI’s and the private sector, will mobilise up to €7 billion and, it is claimed, spur additional public and private investments of up to €30 billion. This should contribute to what the communication terms a “green, digital, resilient and just recovery”.
Regarding health and vaccines, apart from support for COVAX, the Commission is ready to set up a vaccine-sharing mechanism, giving broader access to some of the 2.3 billion available doses to the southern neighbourhood, among other areas.
Particular emphasis is placed on providing opportunities for young people through employment and education support programmes, with a welcome focus on boosting financial inclusion for SMEs, by far the most important employers in the region, through the use of new financial instruments such as venture capital, business angels, and impact finance.
There is a nod to the southern neighbourhood’s potential as a location for the restructuring of EU firms’ global value chains in the wake of the pandemic, and how this might be supported by EU programmes. However, it is not at all clear that the region will be able to compete with well-established European supply chains elsewhere, especially in China, which recently overtook the US to become the EU’s leading partner for trade in goods.
Digital transformation and the green economy features prominently, the latter with the EU Green Deal’s external dimension in mind, although a recent survey of the region indicates that there is much work to be done on raising public awareness of the importance of both of these issues.
New trade initiatives receive only a cursory mention, perhaps reflecting the lack of success with the Deep and Comprehensive Free Trade Area (DCFTA) process, negotiations for which have been taken up only by Morocco and Tunisia and have made limited progress. One major constraint has been the lack of new EU offers on market access, particularly on agriculture, and the communication is non-committal on prospects for any new departures there.
Reforms are key
Improving the overall business climate is recognised as a sine que non for the recovery and regulatory frameworks in the MENA region are naturally a key element in all of this. In fact, with one or two exceptions (for example in Jordan), these remain rather weak and outdated (MENA economies generally have a low rank in international comparisons).
It also makes clear the link between the level of EU funding and the degree of partners’ real commitment to economic and governance reforms, including anti-corruption measures. A ‘policy first’ quid pro quo should be formalised upfront in a set of priorities to be jointly agreed with all partners.
All well and good, but these reforms will not be easy to achieve in a number of countries, particularly where protectionist-oriented vested interests, often involving non-economic actors such as the military establishment, are deeply entrenched.
Values still matter
Promotion of respect for human rights, the rule of law and democratic values, will be “stepped up” according to the paper, alongside policy dialogue with “all relevant stakeholders”. Among others, this includes support for legislative, judicial and institutional reform, the empowerment of women and youth, labour standards, as well as capacity building for civil society and data protection frameworks. Once again, the ‘policy first’ principle will apply to the level of financial support on offer.
And once again, this will be a tough nut to crack. Agreeing policy priorities in the field of rights and civil society under the existing ENP has already proved to be extremely difficult in some cases, notably Egypt. The compromises reached have often resulted rather weak joint commitments and there is little reason to think it will be any easier this time.
The paper claims that the new pact on migration and asylum brings a ‘step change’ in the EU’s engagement on migration and mobility issues. However, the basic approach followed for some time now remains the lynchpin, namely a promise of easing restrictions on legal migration in return for better performance on controlling the illegal variety through more effective return and readmission arrangements.
No development without security
Last, but by no means least, on peace and security the paper makes pleas for: a renewal of efforts to revive the moribund Middle East peace process (‘building on’ Israel’s normalisation agreements with Arab States); support for UN-led peace-making in Syria, Libya, and the Western Sahara; and for a multilateral conference to help solve the territorial disputes in the Eastern Mediterranean.
Strengthening cooperation on counter terrorism, police cooperation and cyber resilience also features, albeit with full respect for human rights and civil liberties, and includes an offer, ‘where mutually beneficial’, of participation in CSDP missions and operations.
The elephant in the room for so much of this is of course the need for the EU to speak – and act – as one. Indeed, the joint communication admits honestly that ‘unity and solidarity’ between member states is a precondition for the successful implementation of its entire agenda, especially for building trust, reducing tensions and solving conflicts.
The record on solidarity suggests considerable room for improvement, the fractured EU approach to the Libyan crisis providing perhaps the most obvious example.
In all, the paper is a fairly comprehensive attempt to revitalise the many different aspects of relations between the two sides. In its desire to count all of the trees however, it sometimes loses sight of the wood. For all the talk of the potential for a post-pandemic recovery, the jury remains out on whether the southern neighbourhood is seen primarily by the EU as a threat or an opportunity. A central new element seems to be the economic and investment plan, which puts more funds on the table, but will there be an appetite in the South for the reforms needed to effectively mobilise them?
The EU has some leverage to spur reforms, but its clout is limited and the degree of change being proposed will need a high degree of solidarity with member states and other likeminded partners. The new US administration might be prepared to make some common cause here, notably on rights and freedoms (recent developments in US-Saudi relations are a case in point) but it remains to be seen whether it has the will – and capacity – to follow through on President Biden’s pronouncements about putting this at the heart of US foreign policy in the wider region.
As the old mantra has it, there is no development without security. Absent a new push on resolving the many conflicts that plague the region, including robust engagement with other players such as Turkey and Russia, a number of the laudable proposals included in the communication risk remaining on paper. At a time when Europe is understandably preoccupied with its own health and economic crises, one is bound to wonder whether there will be sufficient political energy within the institutions and member states to make this ‘new agenda’ a reality.