THE MEDA PROGRAMME - A
STRATEGIC EVALUATION
(this reprot has ben prepared
for the Arab Planning Institute and can only be used with
permission of the author)
Perhaps the major question for policy makers in the first decades of the new millennium will be whether the much heralded new world economy order actually narrows or widens the existing disparities between the "ins" and "outs". That sad but abiding split is nowhere more apparent than across the narrow divide between European and Arab Mediterranean. National sovereignty in the Arab Mediterranean has been problematic in terms of economic independence; whilst the west Europeans eventually learnt the lessons of age-old national rivalries which had plunged European and the rest of the world into catastrophic world wars by setting up the European Union (EU). The EU countries have integrated to a degree which has confounded critics whereas the Arab Mediterranean's various attempts to unite have foundered. As we pass into the new century the power balance in the Mediterranean is essentially as pronouncedly in favour of the Europeans as ever before. This is far from healthy.
By the mid-1990s the EU needed to overhaul its Mediterranean strategy based on several factors;
* The need to review existing bilateral trading relations with the Arab Mediterranean, particularly in the light of the EU's own integrated market completed in 1992.
The Barcelona Declaration covers three areas (baskets) of cooperation.
* political and security
* economic and financial
* social, cultural and human.
Barcelona has been followed by Foreign Ministers' Conferences in Valetta (April 1997), Palermo (April 1998) and Stuttgart (April 1999).
The very use of the term 'basket' underlines the ambition and intent of the process, for it is the same term as used in the 1975 Helsinki Agreement which resulted from a Pan-European (plus USA and Canada) conference which was one of the high points of East/West détente at the time and retrospectively can be judged to have contributed significantly to the end of the Cold War in 1991.
Let us look at each basket in turn, starting with;
A. POLITICAL AND SECURITY COOPERATION
From the European point of view the MEDA programme is "forward defence", with a twofold purpose.
Firstly, to secure stability - political and economic - in the Arab Mediterranean which would offset the perceived threat of the rise of Muslim fundamentalism in those countries themselves, and domestically within the EU
Secondly and relatedly, to provide a level of welfare in the Arab states that will offset the perceived threat of growing illegal economic "refugees". The EU would lessen the need to emigrate if it contributed to improving living standards across the Mediterranean.
However, this strategy depends crucially on the success of the economic reforms the MEDA programme hopes to inculcate, a problematic I will address later.
The more obvious limitation of this strategy is that within the EU itself there is not, despite the rhetoric, a commonly perceived defense need. The UK still abides by its special relationship with the USA and UK foreign policy is still predicated on being the USA's most loyal ally. This feeling has by no means diminished with the advent of Left-of-centre leaders in both countries, Clinton and Blair.
The northern EU states do not have the same sense of threat as do those bordering on the Mediterranean.
Moreover the strategy as George Joffe points out is based:
'on a questionable assumption : namely that European and US interests in the Mediterranean coincided and would continue to do so'. (1)
In fact there have been real divergences of interest. If Northern Europeans do not feel the great threat of immigration from the Mediterranean, the USA certainly does not.
The USA also does not share the EU's vital concern for the stability of energy supplies across the Mediterranean. It is not so much oil, but natural gas supplies which are the major concern. Gas energy supplies from North Africa with their low levels of air pollution are much favoured in the EU with its growing and influential environmentalist movements.
Some EU states actually questioned whether the US should be an observer and after initial offense the USA has accommodated itself to a more benign view of the Barcelona Process.
This has been helped by the EU role in the Middle East Peace process.
USA predominance and Israeli intransigent unwillingness to have the EU involved has reduced the opportunities for a practical and more nuanced role for the EU in the Middle East Peace Process.
This has disappointed many Arab hopes which had hoped for just such a differentiated role.
What the EU has done has been in effect to bankroll the Peace Process as initiated in Madrid 1991 and consolidated in the Oslo Accords of 1993.
.
Furthermore as there is no perceived common enemy between the European and Muslim Mediterranean (indeed for many Europeans, the Muslims are the threat) joint security in the wider sense has no meaning.
This is in contrast to the newly reunited Europe itself, where former "enemies" states of the West, for example Poland, Hungary can be accommodated in common defence through NATO against (although not often specified) the possibility of resurgent and aggressive Russian nationalism.
There have been limited possibilities of cooperation in the field of the North African states helping the EU defend its own territorial integrity from illegal immigrants by developing a Euro-Med coast guards service.
The chances for trans-Mediterranean real cooperation lie therefore mainly in and eventually will depend on the success of the second basket of Barcelona:
B. ECONOMIC AND FINANCIAL
This basket falls into two interlocking parts.
I. Trade and the moves towards a Free Trade Area.
II. Development Cooperation
I. Trade
It is important to bear in mind the large scale of the actual trade. Mediterranean imports from Europe now amount to more than 30 billion, or 47% of the total volume of imports. On the export side the figure is 52% of the total (figures as of April 2000).
However the reality of the bilaterals is weak, only Association Agreements exist with Morocco and Tunisia fully ratified. Jordan, the PLO and Israel soon (as of April)
Equally important is top state the obvious and that is that is that relations (North/South) across the Mediterranean are asymmetrical because of the shear predominance of the EU economic strength and through the EU's coherence. This means that the trade relationship is disproportionately weighted in favour of EU interests. The mighty EU has virtually dictated the terms; there shall be market openings in the Arab countries for services, where Europe is aggressively "liberalising" and no meaningful reciprocal openings where Europe is stubbornly "protectionist", for example in agricultural goods.
The MEDA countries have been described as "uneven partners" (2).
The external trade of the Southern members is strongly focussed on EU whereas EU trade has a much wider range of connections and is therefore less dependent or vulnerable to the needs to accommodate itself to one specific partner.
Furthermore the absence of any effective regional structure based on pooling of sovereignty among the Arab states in the Mediterranean means that trade deals will be negotiated bilaterally. This in turns adds to the asymmetrical nature of the Barcelona Process, small relatively weak national governments are negotiating with the world's largest trading block.
This problematic raise a vital strategic question and that is whether trans-Mediterranean cooperation is eventually at the expense of Arab unity ?
The power of the EU is overwhelming compared to the individual Arab states. There is both the need and the danger of the Arab states forming alliances to counteract this but which in themselves may be premature as political arrangements.
Additionally, by developing qualitatively different programme for parts of the Arab world, MEDA states on the one hand and GCC states on the other for example, the EU inadvertently is adding to Arab disunity.
All parties have agreed that there should be a "Euro-Mediterranean Free Trade Area" by 2010.
However as MEDA countries already have free trade for industrial products, it is pertinent to ask where's the benefit for the weaker partner ?
The risks are obvious, as Nienhaus argues:
"On the contrary, a counter-effect must not be ignored: in Med-Countries with relatively large domestic markets, the high trade barriers have been a motive for foreign investors to set up production facilities in these countries. Once the barriers are removed these markets can be supplied from the European factories.." (3)
In other words, the Southern partners may already be getting as much as they need form existing arrangements. A possible compensation to offset this would be for the EU to consider compensation for loss of industrial capacity of weaker economies. However faced with paying for EU expansion eastwards in Europe has already been promised based on no budgetary increases, therefore the possibilities of gaining funding for trans-Mediterranean schemes seem highly unlikely.
The EU says it supports regional cooperation, however the asymmetrical development between partners could in fact lead to splits among the Arab states. Industrially advanced areas will benefit from a Free Trade Area (FTA), however weaker countries have no incentive to join in regional integration when they can export directly to EU. Therefore there is a real danger that an FTA will divert inner regional trade thereby militated against regional solidarity and unity.
Certainly the EU is now alert to this apprehension and Commissioner Patten, now responsible for the Barcelona Process has begun to argue that the Euro-Med should not be at the expense of regional trade and development.
In a recent speech Patten opined:
"I want to address areas of policy which are still being ignored, or put in the 'too difficult' tray
First, the need to encourage South-South trade...the Barcelona focus has been on North-South trade and cooperation often with bilateral emphasis. That needs to change... We need to renew the drive to create sub-regional free trade area... " (4)
Where the Barcelona Process does have something positive to offer is in the field of an ever integrating global economy.
Can the Euro-Med FTA provide a softer introduction to the global economy ? Certainly EU Commissioner Patten thinks so. In an interview he was asked:
"(Interviewer asks) But such a free trade area implies an enormous burden and considerable sacrifices for the non EU Mediterranean partners. Dramatic policy reforms, a drastic structural adjustment, a painful economic transition etc. Plus they will be flooded by EU industrial exports, which will accentuate the problems of unemployment...
(Patten responds) That may be true...but only up to a point. Non-EU Mediterranean partners will need to go through the free trade process with or without the Euro-Mediterranean partnership....The advantage of the Euro-Mediterranean Partnership is that this modernisation process is helped through cooperation..." (5)
Therefore the Non-EU Mediterranean has the offer to globalise under the tutelage of the EU.
The Arab States, for a number of reasons, have been hesitant in their relations with the World Trade Organisation (WTO). The EU on the other hand is with the USA the main protagonists in urging a more rapid liberalisation of the trade. Use of the EU's good offices could facilitate a more sophisticated, nonpartisan approach by the Arab Mediterranean to the question of involvement in the WTO.
.II. Practicalities of financial and developmental aid.
The funds for developmental aid and cooperation are disbursed on the basis of the bilateral Financing Framework Conventions through the so-called MEDA programme.
The MEDA programme is modeled on the EU's programme for Eastern Europe, the PHARE programme, widely recognized as being "successful" as a way of pump-priming the entry of western European capital into Eastern Europe. The EU's own official Court of Auditors' report criticized the fact that much of the public funds went to feasibility studies for western consultancies.
The MEDA programme, crudely but accurately put, is to a large extent compensation for the Mediterranean EU countries who felt they were squeezed out of the East European bonanza; MEDA should facilitate further EU penetration into the Arab Mediterranean.
The fundamental, and often unspoken, difference, is that the former Soviet block countries had collapsed and were almost literally begging the West to take over; not so the Arab Mediterranean, where political and cultural resistance is the understandable and tangible legacy of European Imperialism. Besides the EU now offers all but a few of the former Soviet bloc countries the incentive of eventual membership of the EU. This is not an option for the Arab Mediterranean.
The question is what do the Arab states get out of the programme ? Certainly the risks are considerable, namely, assuming social and economic models to satisfy the EU which may militate against the Arab states own sovereign rights to define their own progress in line with their own social, economic and cultural traditions.
The financial aid packages are certainly not generous in the political and philosophical meaning as Nienhaus points out:
"The conditionality of the financial support has become very explicit. The reform performance of the Med-Countries (which is the basis for the allocation of funds) shall be mainly judged by the EU according to its criteria and not by a self-assessment of the Med-Countries." (6)
Moreover, the EU has aligned its own criteria for aid more and more with the terms of the World Bank and the IMF; that is aid only if there are moves to cut public expenditure and to liberalise the market, moves which could cause the very political reaction which Europe fears as domestic opposition in the Arab states will inevitably rail against neo-Imperialism. The EU will have to be more generous or it will fuel the very fires it claims are a threat to Mediterranean stability.
This danger has been described by Joffe as follows:
"The demands of economic restructuring also involve demands for administrative reorganization and greater financial transparency. These, in turn, often threaten the vested interests of elites within the private sector who also form part of the governing elite" (7)
So far - at least in the EU - the evaluation of the MEDA programme has been on a "value for money" project basis, what is needed is a more strategic evaluation to address the question as to whether the MEDA programme would achieve more in being less ambitious in scope and rhetoric and concentrate rather on pragmatic advance based on the principle of economic, social and cultural pluralism.
C. SOCIAL, CULTURAL AND HUMAN
I have already mentioned the danger that an FTA may undermine social and cultural solidarity and they have been noted elsewhere. The conclusion of the UK Think Tank at Wilton Park on Euro-Med Cooperation was:
"The creation of a free trade area should not be seen as an end in itself but as a means to a better way of life for all the partners. A high transitional price may have to be paid by the societies most affected...too severe a price in social terms at a grass roots level could affect political stability...
No economic reform programmes will be sustainable in the long-term unless they are within the limits of public tolerance, and based on consensus and legitimacy. A gradualist approach, where all sectors of society are seen to receive some benefit may prove to be best" (8)
One way to avoid such eventually social disruptive consequences may be to consider, as the Wilton Park paper does, a "Euro-Med Social Charter" . That is, to recall that the EU itself explicitly recognised the dangers of increasing social disparities by the extension of market economics in its own "Completion of the Internal Market project" by a compensatory "social agenda". The Wilton Park Paper concludes that:
"it is crucial that training is not solely market driven" (9)
Another great issue of contention which has been skirted around with some necessary delicacy is the vexed question of "human rights".
"The issue of strengthening democracy and respect for human rights were seen as central to the Barcelona Declaration, and a basis for ensuring peace, stability and prosperity in the Mediterranean region. It was acknowledged that comparatively little had so far achieved in addressing these issues, and too little dialogue had yet taken place to promote mutual understanding and share experience on how to facilitate improvement." (10)
The EU's record on the subject of "human rights" conditionality in trade and cooperation agreements has been checkered. Certainly the EU can be accused of self-interested hypocrisy. For example, the EU indignantly and sanctimoniously broke off relations with Burma, which plays a very small part in the EU's trade calculations, whereas it has studiously avoided any mention of trade sanctions against the economic giant China, whose human rights record has often been criticised by a very wide range of European interests.
Moreover, all cooperation agreements need the assent of the directly elected and multiparty European Parliament. The volatile nature of alliances in that assembly has led to odd and certainly unpredictable votes, for example on the very same day financial protocols with Morocco and Syria were rejected by the narrowest of margins, a similar protocol with Israel was approved, also with the tightest of majorities.
Joffe has rightly noted:
" a profound ambiguity in European attitudes, caught between a genuine concern over human rights abuses and belief in the virtue of accountable legitimate government and an overriding concern for European security and the danger of spill-over effects from the southern Mediterranean region" (11)
Difficult as the dialogue can be on what I maintain is essentially a cultural plane, it seems to me that unless progress is made here, then the other two 'baskets' (security and economic) will not meet with eventually and ultimate success.
Europe has gained much more in science and culture than it cares to remember or admit from the Arab world and though tainted with imperialism Europe has contributed significantly to Arab development. Further progress can only be made with increasing intellectual exchanges.
An encouraging development has been the establishment of a "Euro-Mediterranean Parliamentary Forum".
It is a significant and optimistic sign that the first meeting concluded with a call for a more sophisticated and nuanced progress - itself an implicit criticism of progress so far. The meeting urged:
" (The EU) Council (should) modify, as far as is necessary, the negotiating mandate of the European Commission, to enable it to take account of the particularities of each of the countries...and ensure balanced trade by promoting a genuine industrial partnership..."
(12)
Michael Hindley
May 2000
NOTES
(1) George Joffe. "The Euro-Mediterranean Partnership: Two Years after Barcelona."
The Royal Institute for International Affairs. Briefing No 44 May 1998
(2) Volker Nienhaus "Promoting Development and Stability through a Euro-Mediterranean Free Trade Zone ?"
European Foreign Affairs Review 4. 501-518 1999
(3) Ibid.
(4) Chris Patten speech in Cairo, 1st April 2000 on "The European Union's External Policy and the Mediterranean"
(5) Available in Euromed Special Feature Issue 11 December 1999
Www.euromed.net/special_feature
(6) Nienhaus. Op.cit.
(7) Joffe. Op. Cit.
(8) Wilton Park Short report "The Social Impact of free trade in the Euro-Mediterranean region" Conference WP 582. November 1999.
(9) Ibid.
(10) Short report on Wilton Park Special Conference 98/13 "Euro-Mediterranean Conference strengthening democracy and respect for human rights" May 1998.
(11) Joffe. Op.cit.
(12) Final statement of first meeting of Euro-Mediterranean Parliamentary Forum. October 1998.