The redefinition of the South-European region after the Arab spring

Conference Report: Javier Albarracín, IEMed, 12-14 september 2013

by Nicolas Marin, master 1 AlterEurope, Majeure Droit

The opening session of the AlterEurope master’s degree was marked by a 12 hour conference given by Javier Albarracín, specialist of economic matters in the Euro-Mediterranean area and Middle Eastern countries. He works as the director of the social-economic department of IEMed, which is one of the most important European think tanks, based in Barcelona.The main topic of this conference was the redefinition of the south-European region, especially given the consequences of the Arab Spring. Arab countries are facing their own political and economic future for the first time. The biggest investor in North Africa is the European Union, however an economic battle is developing in this area with other countries such as China, or Turkey. Javier Albarracín divided his presentation in four major parts:

Mediterranean-European relations

The Mediterranean region will be one of world area the most affected by climate change in the years to come: Rising sea levels, combined with the lack of potable water has the potential to lead to tremendous migrations. These migrations issues are connected to the intensification of the relations between the European Union and its southern border. However northern European countries present in Brussels have a growing fatigue of the problems their neighbours bring. European countries at the borders, such as Spain, Greece or Italy, are the major actors of these south-north relations. While the southern Mediterranean coast countries have encountered many changes of border, there remains a psychological weakness.

The Mediterranean area concentrates about 3% of the world population. This translates to 270 million people. Yet 30% of the population is less than 15 years old and around 70% of the population is less than 30 years old. These younger generations are expecting many guarantees, such as a fair distribution of wealth, yet the old political elite is unwilling to relinquish their dominance. Given this situation, tensions are high and these societies are under considerable internal strain. Another major issue concern is the development of cities. With growing urbanization restricted to small areas around rivers or coasts (due to the high proportion of desert land which makes up these countries), there is increasing pressure on land management strategies.

Revolutions in the Arab countries

Revolutions started in 2011 sparked by political issues. These sparks created a wildfire that spread into the entire society. While raw economic growth was being achieved, this was not being translated into socioeconomic growth. Foreign investments were only going to the elite, and were not productive enough to have an impact on the entire society.

The main socioeconomic and politic factors behind the revolts were the lack of modernization of the State and ‘crony capitalism’. ‘Crony capitalism’ refers to a situation of favouritism between state and business. Such a situation was present in Tunisia where 20% of the GDP were belonging to the close friends of the previous president Ben Ali.

The reactions from the different regimes are called the ‘3R’s: Revolution, Reform and Repression. The major problem now is dealing with the recovery of the social crisis. It will take years to improve the quality and the transparency of the institutions. Unfortunately, the poor cannot wait and the elites are scattered and lost – they still think in terms of the old regime. As such, the mindset of crony capitalism is proving hard to change, and the rejuvenation of a new capitalist system seems far off. While the challenges are similar in all these States, the size of the country has an amplifying effect, e.g. Tunisia vs. Egypt.

Analysis of Islamist movements

Islamic movements where forbidden and repressed before the revolutions, so they were good at organizing themselves at international level. They have sympathy in the population at large not only because of a strong ideology, but also because they were suffering from the state under the old regimes. Furthermore, many Islamists movements receive funding and training by the likes of Qatar and Saudi Arabia.

What is also evident is that many public associations which are advising on economic policy were created by Islamic movements and are composed of small businessmen. While these small businessmen may be adept and successful in managing their own affairs, they did not have the skills nor the knowledge to effectively manage national economies. They are only working at the highest level because they are trusted and loyal.

There is no genuine common economic agenda in Islamic movements. Their main economic policies essentially focus on fighting against corruption; private sector freedoms, and; the importance of Islamic finance. However, they also perceive SMEs are the key to economic growth, and are thus also pursuing an economic agenda that supports their development. Therefore, they embrace a liberal, capitalist point of view, and attempt a touch of socialism.

While there are many similarities among the Arab nations, the Jordan case offers a very specific example of a popular and well seated King, yet and equally strong and powerful national Islamic movement. However, what this Islamic movement has been able to do is to reach populations that the state has either forgotten or is not concerned with.

The emerging powers in the Mediterranean

The emerging powers are trying to play their best cards in the places of the world where the future is. With several assets, such as natural resources or cheap workforce, Mediterranean countries have attracted the attention of Chinese investors. Arab powers don’t hesitate to deal with Chinese power which don’t put conditions before investing. When the European Union tries to deal with Morocco or Egypt, there is always the will to improve Human Rights or other social issues, at least from the home institutions. When China with its planed economy wishes to invest in these countries, they show little interest in such issues. Rather, the Chinese strategy tends to settle communities of Chinese in many Mediterranean countries in order undertake the work which has been agreed to. It is important to notice that due to this policy, there is growing tensions between inhabitants of these modern ‘Chinatowns’, for example in Tangiers. In fact Chinese investments don’t bring work opportunities to the locals as it should. Bilateral trade between China and Arab nations reached $222,4 billion, and is expected to increase in the years ahead, so it will be interesting to see how this issue plays out.

The Gulf Cooperation Council (GCC) is another major investor in the Mediterranean region. However, their unity is deeply divided between the Salafists of Saudi Arabia, the United Arab Emirates and Kuwait, all of whom are more orthodox in their Islamic beliefs, and are thus pro status-quo. Alternatively, Qatar represents are more moderate version of Islam and are thus pro-change in the region.

The new Turkey that bloomed 11 years ago with Erdogan as President has multiplied its economic capacity and is becoming one of the major economies in the world. Objectively, one cannot deny that Turkey is an increasingly powerful actor in the region, and the European Union in its refusal of Turkish adhesion is losing a valuable asset in the region.