Tag Archives: Euromed

EuroMed Report: Identification of barriers to the integration of Moroccan SMEs in global value chains

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The new EuroMed Report (September, 2019) is now available

Identification of barriers to the integration of Moroccan SMEs in global value chains [1]

The report is available for download here.

 

The purpose of this report is to identify the obstacles to the integration of Moroccan SMEs into global value chains. This new report is a continuation of the previous one because it again deals with issues that concern the private sector. However, this time it offers a more detailed analysis by targeting a specific problem, the integration of Small and Medium Enterprises (SMEs) in global value chains, in the case of one country in particular, Morocco.

This choice enabled us (i) to carry out an in-depth analysis on a given problem, (ii) to work in close collaboration with a Moroccan institution (ISCAE) and with the African Development Bank (AfDB) office in Rabat and (iii) to enhance our report with case studies of Moroccan SMEs and with a series of interviews and working meetings with representatives of business associations and heads of national organizations concerned with the issue. Before the finalization of the economic policy recommendations, this study was also the subject of a workshop organized in Rabat in the presence of decision makers, entrepreneurs and senior civil servants.

The report was coordinated by:

  • Patricia AUGIER (President of the Scientific Committee of FEMISE and of Institut de la Méditerranée),
  • Vincent CASTEL (Chief Country Economist – Morocco at the African Development Bank – AfDB) and
  • Tarik EL MALKI (Professor of Management and Corporate Social Responsibility at ISCAE).

It benefited from contributions by:

  • Mohammed Amine HANIN (Financial Auditor at EY),
  • Maryse LOUIS (General Manager of FEMISE),
  • Josef PERERA (Political Economist and FEMISE Researcher),
  • Constantin TSAKAS (General Secretary of FEMISE and General Manager of Institut de la Méditerranée) and
  • Jocelyn VENTURA (Political Economist at Institut de la Méditerranée / FEMISE).

The Euromed report is an annual publication of FEMISE which deals with topics of importance and interest for the Euro-Med region. The report brings a real added value in terms of knowledge on the topic covered. It provides an in-depth analysis proposed by specialized economists and with a multidisciplinary approach to the North and South of the Mediterranean. This brings a common vision on both sides of the Mediterranean and political recommendations that can contribute to the transition process of the South Med countries.

[1] This report has been prepared with the financial support of the African Development Bank and of the European Union through the FEMISE project on “Support to Economic Research, Studies and Dialogues of the Euro-Mediterranean Partnership”. The content of the publication is the sole responsibility of the authors.

FEMISE MED BRIEF no18 : “The EU’s pursuit of ‘resilience’ in southern Mediterranean countries”

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Elisabeth Johansson-Nogués & Hani Anouti

The FEMISE Policy Brief series MED BRIEF aspires to provide Forward Thinking for the EuroMediterranean region. The briefs contain succinct, policy-oriented analysis of relevant EuroMed issues, presenting the views of FEMISE researchers and collaborators to policy-makers.

The latest MED Brief is on “Closing the gender gap: policy-making that promotes inclusive Mediterranean societies”, available here.

 

Summary: The main aim of this policy brief is to explore the conceptual and practical effects of the EU’s pursuit of resilience in relation to the southern Mediterranean partners. Our findings point to that the more pragmatic EU foreign policy since 2015 and the more flexible EU funding for policy objectives have been welcomed both in Europe and by southern ENP partners. The EU Global Strategy reflects a will to co-design policies with its southern Mediterranean partners. However, while holding great inherent potential, resilience has met with certain unforeseen teething problems in its first years of its implementation due to regional or intra-EU dynamics. Elaborating an effective new ‘resilience toolkit’ could allow reaching better outcomes in the Euro-Mediterranean region.

 

The list of FEMISE MED BRIEFS is available here.

The policy brief has been produced with the financial assistance of the European Union within the context of the FEMISE program. The contents of this document are the sole responsibility of the authors and can under no circumstances be regarded as reflecting the position of the European Union

Med Change Makers e07 : Karine MOUKADDEM, Gender Equality and Women Empowerment in the MENA region

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FEMISE recently launched its series of interviews called « Med Change Makers ».

« Med Change Makers » are text and video-based interviews that allow dynamic researchers of the FEMISE network to illustrate how their research addresses a policy-relevant question and how it contributes to the policy-making process in the Euro-Mediterranean region.

 

Going towards Gender Equality and Women Empowerment in the South-Med and MENA region

Interview with Karine Moukaddem, SciencesPo, Institut de la Méditerranée and FEMISE

FEMISE places the issue of Inclusiveness at the heart of its research strategy. The issue of women empowerment in the Mediterranean, and more generally in MENA, is of paramount importance to move towards a model of sustainable and inclusive development.

Author of a forthcoming FEMISE MED BRIEF, Karine Moukaddem provides an assessment of existing policy measures on women empowerment in the southern shore of the Mediterranean. She argues that behind the existence of a “Mediterranean paradox” are structural obstacles that are crucial to overcome. Interview :

1. You talk about the “Mediterranean Paradox” while describing the situation of women in the South-Med. What does it imply and what are its root causes?

The Mediterranean Paradox is easy to explain: On the one hand, educational attainments of women improved drastically in the region and female enrolment in schools and universities increased considerably. But on the other hand, women seem to still be struggling to find a place in the labour market. Female labour force participation rates in the region remain lower than in other developing countries and stagnant. In other words, it seems like women participation to the labour market in the South Med is constrained by other factors than access to education.

Regarding the root causes of the paradox, several obstacles are identified as impeding on women’s economic inclusion.

First, the analysis of the labour market structure in the region shows that while in the public sector employment opportunities contract, opportunities in the formal private sector do not rise. Therefore, the increase in the number of educated women translates in an increased female unemployment or a lower female participation in the formal sectors. Second, women’s overall labour participation levels seem to be affected by economic development and improvements in gender equality legislation (or lack of) as well as by the private foreign ownership of the firm and its exporting activities. Other impediments such as the lack of safe, efficient and cheap public transports hamper commuting to work for women.

However, such economic and practical explanations do not explain the whole Paradox; some key factors are cultural. This argument states that women from conservative societies would tend to participate less in the labour market given the large impact of social norms on their trade-off between working outside and being housewives. The considerable negative effect of traditional social norms would be materialised in several conscious and unconscious biases that dissuade women from choosing a professional carrier.

To understand the full situation of women today, all of these arguments matter. The situation is a complex mix between explicit concrete and implicit psychological obstacles that interact both at the macro and micro levels. Women in the South-Med today face structural multi-layered self-reinforcing inequalities deeply rooted in the system.

2. a) Has the situation of women in the South-Med region been improving in terms of concrete economic empowerment?

Yes, it has been improving in the region through some advancement in education mostly and enhanced legislations. Yet, inequalities are still prevalent in the region and concrete economic empowerment seems to be far from reached. The South-Med region seems to be behind in gender equality matters compared to other regions and the situation is actually improving slower than in other developing regions such as East Asia and Pacific or Latin America and the Caribbean. ILO estimates suggest that female labour force participation reached 59% in East Asia and Pacific in 2017, while in Latin America this rate reached 51.5%. As for the Middle East North Africa (MENA) region, the female labour force participation is less than half and close to only 20.6% in 2017. The region also lays behind when it comes to a other indicators of women economic and political participation.

b) You argue that the situation is not improving at the correct pace despite the measures adopted, why?

The answer is simple, when it comes to policy making regarding gender equality issues, two aspects are key to understand the inefficiency of the available measures adopted: On the one hand, there are obstacles that impede on the full implementation of measures. On the other hand, these measures are not comprehensive of the situation of women in the region.

First, measures are often hindered by the lack of social will to change. Due to the unconscious biases and other implicit and explicit channels, top-down initiatives are often misunderstood by locals, not accepted by the whole society and seen as inadequate. Mentalities and social norms remain not open to structural change, therefore despite national and international efforts, locals will find a way to deviate or pretend to change the situation without real consequences on empowerment.

Moreover, the measures adopted are often punctual uncoordinated projects and legal adjustments that do not into account the whole picture. The symptoms of the inequality problem are tackled but not the roots. Measures often lack consistency, sustainability/durability and are not part of a holistic approach to the matter. For instance, it is not enough to implement quotas, the system itself needs to work on reforming the role given to women and deconstructing the stereotypes and structural norms. In addition, there is no one South-Med woman but different profiles with different needs and that face different degrees of discrimination. For example, rural women accumulate inequalities and the answers to empower them are not the same as for women living in the capital.

3. How can the state create the conditions for women to fulfil their untapped potential?

To reach a structural empowerment the state needs to implement comprehensive laws and women empowerment needs to be a priority in National agendas, not only an aspiration. There is a need for national strategies creating the conditions allowing women to fulfil their potentials in all sectors of the economy, society and national politics. Creating a flexible national framework that understands women’s needs in each sector of activity and each context, would allow to institutionalize women empowerment. These principles would lead to a better framework for legislative reforms especially in issues such as family law and a modification of educational curricula to support social change.

However, to ensure a real empowerment of women, the state needs to coordinate its action with the other stakeholders. With a focus on children’s education, coordinated action could help change the perceived role of women in the society especially that biases start to develop at a really young age (around 3-5 years old). To make the message more relatable and legitimate, the State needs to work with local leaders such as religious leaders and other influencers that would help mimic good practices and expand the influence of adopted measures. However, working with the whole ecosystem does not mean working on improving the picture of women at the expense of men. It means to include men in the debate and to make them aware of the benefits of gender equality to the whole society.

4. In which ways can the private sector provide solutions to improve the way we invest in women?

Beyond understanding the positive economic externalities of gender equalities, the private sector could help improve policy making by building public-private partnerships in several fields relevant to women empowerment such as the digital sector by training women in coding, investing in vocational training, data gathering and rural areas.

Moreover, to ensure women’s economic empowerment enterprises could offer alternative and flexible working environments that take into account modern perceptions of responsibility sharing in a household. This could mean offering the possibility of work-from home for men and women for 1 day a week or a payed paternity leave on top of the maternity leave or a possibility of bringing children to the office 2 days a week… In addition to these internal policies, enterprises could also install principles of gender equality in their internal functioning by setting a quota in their management boards.

Additionally, enterprises can have an impact on stereotypes and social norms through marketing strategies and Ads. If the message of ads becomes more reliant on gender equality principles, stigmas could decrease.

5. You talk about role modeling and mentoring. How can it contribute to women empowerment?

This is a truly important point. Role modeling and mentoring are essential in order to instigate social change not only by empowering young women and raising their self-esteem and confidence but also by showing men the potential of women and allowing young men to grow accustomed to equality of chances.

On the smaller scale, mentoring can take the figure of small local initiatives working with women on increasing their self-esteem or exploring all the potential professional options available to them. This is the case of portraitists and mentors intend to help women grow more independent and strong.

On the bigger scale, initiatives such as establishing a TV channel featuring women from the region or the launch of a regional comity for gender equality regrouping influential women from different backgrounds could help increase the visibility of success stories. This would allow young women to identify with successful women and thrive to achieve their untapped potential. This is due to a crucial aspect of role modeling, it helps women not only explore their options in terms of goals but also in terms of ways and paths to achieve them.

Social norms can be changed and creating a virtuous circle for women empowerment from within the ecosystem and based on role-modeling, solidarity and mentoring can be a valuable step to achieve this.

 

Interview by Constantin Tsakas

This activity received financial support from the European Union through the FEMISE project on “Support to Economic Research, studies and dialogues of the Euro-Mediterranean Partnership”. Any views expressed are the sole responsibility of the speakers.

Morocco and Tunisia in Global Value Chains: focus on business services as innovation drivers

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In this report we will argue that for a better understanding of how business services can contribute to competitiveness and growth in Morocco and Tunisia decomposing trade flows in terms of value added can be a useful first step. We start from the OECD-WTO Trade in Value Added database (OECD, 2016) to decompose exports in value added in business services from Morocco and Tunisia to the EU28 and to the rest of the world. This decomposition is used to compute several indicators of participation in the GVCs. Two business services industries are examined: computer and related activities and R&D and other business activities.

Combining an adequate trade liberalisation and investment policy reforms and the promotion of business linkages between foreign and domestic firms could help local companies move up to GVCs thanks of the transfer of knowledge, skills and technology.

“Discovering Social Change Makers” : Social entrepreneurship as a key issue in the Mediterranean and Africa (November 20th, Marseille)

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At the invitation of Institut de la Méditerranée and FEMISE, a dozen “Social Change Makers” involved in the Mediterranean region and Africa attended a workshop (Marseille, November 20th) during the Emerging Valley 2-day event. Their various experiences show the contribution of social entrepreneurship as a vector of socio-economic development accelerator but also its difficulties in imposing itself.

Les entreprises à impact social comme vecteur d'accélération de développement socio-économique (photo : F.Dubessy)

Entreprises with social impact as a vector for accelerating socio-economic development (photo : F.Dubessy)

MEDITERRANEAN / AFRICA. “Necessity is the mother of invention, so you have to try to change things with creativity.” Founder and CEO of Yomken.com Tamer Taha immediately set, during the workshop “Discovering Social Change Makers in the Mediterranean and Africa”, the problem of a “Mena region lagging behind in terms of innovation compared to other countries at the same level of development. “

Set-up by Institut de la Méditerranée, Femise and IRD (Research Institute for Development) on the occasion of Emerging Valley (Marseille, November 20, 2018) this meeting aimed to highlight the existing social entrepreneurship initiatives in Africa and in the South Mediterranean countries. As Constantin Tsakas, General Manager of Institut de la Méditerranée and General Secretary of Femise, says, “in the face of youth unemployment, the informal economy, inequalities and lack of economic diversification, social impact enterprises have the potential, that is poorly exploited, to be an accelerator of socio-economic development by taking advantage of innovative approaches. “

For Egyptian entrepreneur Tamer Taha, “innovators need more than just money and the market needs more than new ideas, and if we do not innovate, we risk going out of the international market.” With Yomken.com, an open innovation platform for industrial, environmental and social challenges, Tamer Taha connects large companies and SEs-SMEs in five countries to answer problems through calls for solutions. Since 2012, these synergies have resulted in sixty-eight challenges. One of them being the case of a German vegetable cutting machine from a Cairo company that could not process a local vegetable called okra. For $ 5,000, two young engineers managed to solve the impasse.

Strengthen African start-ups

Hatoumata Magassa met en réseau quatre incubateurs africains (photo : F.Dubessy)

Hatoumata Magassa networks four African incubators (photo: F.Dubessy)

Shadi Atshan co-founded in 2017 an accelerator for social enterprises (SEA) in Palestine. It hosts about forty start-ups and two incubators. In 2018, he went international with four projects in Jordan. “As the market is limited, these start-ups are of little interest to investors, so we help them to raise funds,” says Shadi Atshan. Hatoumata Magassa intervenes to “contribute to sustainable, inclusive and digital economic development in Morocco, Burkina Faso, Senegal and Ghana.” Coordinator of AFIDBA (AFD for Inclusive and Digital Business in Africa) – Bond’Innov (Bondy in France), she takes care of this project financed by the French Development Agency (AFD) for 2 M € to support sixty start-ups with a strong social impact and a funding scheme allocated of € 500,000.

“We are structuring and strengthening a network of incubators in our four intervention countries to strengthen African start-ups” said Hatoumata Magassa.

Natalia Resimont coordinates the “Women of the World” project of the French NGO “Quartiers du monde”, a network of solidarity entrepreneurs present in Burkina-Fasso, Madagascar, Morocco, Mali and Senegal. “We create pedagogical tools to integrate the gender perspective, without which the social and solidarity economy does not deconstruct gender inequalities and ignores a series of models and structures that maintain, update and replicate the patriarchal system : the sexual division of labor governance, violence against women, hegemonic masculinities … “, she says. The NGO has published a guide in Spanish and French (and soon in Arabic and English), the result of five years of work on the issue.

Create collaborative civil societies

” To lead real economic initiatives, these women must first rebuild. We are integrating this into our support “ says Natalia Resimont, for example,” Women of the World “created an incubator in a small town in Mali rather than in a big city to address the issue of women’s mobility.

In Lebanon, Natalia Menhall of Beyond RD, a group of activists for the development of social entrepreneurship, advocates for “building inclusive governance systems and inspiring innovative policy solutions.” With the objective of “building collaborative civil societies and human-centered partnerships in line with priorities, by providing learning opportunities for individuals, institutions and communities.”

According to her, “even if the concept is new, the phenomenon is already present in the MENA region thanks to an existing culture of solidarity and social consciousness.”

A factory of initiatives

Sihle Tshabalala et Natalia Menhall s'investissent, chacun à leur façon, dans l'élimination des obstacles au développement social (photo : F.Dubessy)

Sihle Tshabalala and Natalia Menhall are involved, each in their own way, in removing obstacles to social development (photo: F.Dubessy)

“Instead of waiting for the changes to come to us, we decided to have an active role,” insists Natalia Menhall. “Social entrepreneurship is a tool that comes to the citizen to propose solutions that can be generalized,” she said, noting that after a study in seven countries in the MENA region, “the obstacles to the development of Entrepreneurship remain very close, either the tools do not exist, or they are not adapted or concentrated in urban areas. “ Beyond is developing a Master’s program in Social Entrepreneurship. “In some countries, bankers have to go from purely economic profit to social profit,” she says.

Sihle Tshabalala is interested in disadvantaged youth born in the townships of South Africa. He knows her well to come from there. During a stay in prison, he got interested in computer coding and then put in place a learning method for academics to teach this illiterate population and train coders.

Director of Inter-Made, a social incubator based in Marseille and dedicated, since 2001, to projects with social and environmental impact, Cédric Hamon offers skills, training and networking to start-ups. “We also have a factory of initiatives because all social needs do not always find a start-up to solve them,” he says while he sets foot on the other side of the Mediterranean in Tunisia. Cédric Hamon even markets a training offer on the resolution of societal needs through entrepreneurship. “The obstacle is that you sell solutions to people who did not understand that there was a problem … So you create another problem at home,” he admits while stating, “We do not run out of funds, we do not miss projects, we lack funded projects. ” What remains, as Constantin Tsakas indicates, is that “a social project remains difficult to market.”

The Instagram of Waste

Constantin Tsakas, organisateur et animateur de cet atelier, a conscience de la difficulté à vendre l'entreprenariat social (photo : F.Dubessy)

Constantin Tsakas, organizer and moderator of this workshop, is aware of the difficulty of selling social entrepreneurship (photo: F.Dubessy)

Another angle was also given by Mouhsin Bour Qaiba. Everything starts from a statement of the co-founder of Clean City: In Casablanca, each resident generates one ton of non-recycled waste per year. This Moroccan creates what he calls “the Instagram of waste” to put pressure on the authorities and launches an application for sorting at the source with possibility of ordering bags of different colors to ease the process of recycling.

Since then, Clean City has conquered other countries. His CEO is now thinking of giving Token (cryptocurrency) to citizens who report problems posted on his site instead of points allowing discounts on purchases as currently. “We now have 20,000 active users worldwide and 14,000 claims generated, and our goal is to reach 2 million active users,” said Mouhsin Bour Qaiba.

“We wanted to show faces, men and women and insist on the ordinary aspect of their lives.” Roman-Oliver Foy, president of Friends of the Middle East (France, Lebanon), has been presenting initiatives of social entrepreneurs in the Arab world for two years through conferences and debates.

In the near future, he will be launching ten-minute videos on these experiences with the goal of inspiring potential entrepreneurs in the South and North and raising awareness among policy makers while promoting the diffusion of innovations. “Policy makers need to see what a social and supportive entrepreneur is,” he insists.

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Also check the article and video coverage by ECOMNEWSMED on the workshop : 

Med Change Makers e06 : Alexandra FLAYOLS, Education & Integration of the Marrakech youth

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FEMISE recently launched its series of interviews called « Med Change Makers ».

« Med Change Makers » are text and video-based interviews that allow dynamic researchers of the FEMISE network to illustrate how their research addresses a policy-relevant question and how it contributes to the policy-making process in the Euro-Mediterranean region.

 

The key role of education in the professional integration of young people in the Marrakech region 

Interview with Alexandra Flayols, Université de Toulon, FEMISE

FEMISE recently published the Policy Brief « The key role of education in the professional integration of young people in the Marrakech region »

Author of the MED BRIEF, Dr. Alexandra Flayols highlights the important role of secondary education in gaining access to paid employment. However, many young people drop out of school early. The analysis of reasons for stopping studies is essential so that public authorities can put in place effective measures. Interview :

1. In this policy brief, early-stage obstacles to the professional integration of young people are explored, notably regarding access to education. However, aren’t there other key factors hindering this insertion? So why is it more optimal to invest in education?

Education is obviously not the only factor influencing the professional integration of young Moroccans. Several studies have highlighted the existence of other factors that can constrain the professional integration of young people. These factors may include previous work experience, the young person’s financial situation, mobility, the socio-professional category of the parents, active labor market policies, etc.

Regarding the factors that can more specifically be attached to the Moroccan case, the place of residence may for example hinder the professional integration of the youth. The region of Marrakech-Tensift-Al Haouz (MTH), which is the subject of this study, is mainly rural (198 rural communes against 18 urban). Although the OCEMO survey (2008) used in this work does not allow to distinguish the place of residence due to lack of data, our results show a differentiated impact of the level of education in urban and rural areas. In addition, the lack of job creation in the private sector, despite the lower dynamic demand for workers in the public sector, which until the 1990s was the largest employer of skilled workers, generates additional insertion obstacles.

We have chosen to focus on education because besides the fact that it is a determining factor of professional integration, it is a central issue in Morocco where education is experiencing considerable difficulties. Moreover, the fact that having a degree does not constitute a protection against unemployment in Morocco, contrary to the case of developed countries, pushes us to pay particular attention to this problem. Investment in education has become a standard in developed countries, however, while it is important for economies to move up the international value chain, it is not a sufficient condition in the access to employment. The match between trainings, formations and the job market is thus particularly important. The quality of education is also paramount and is highly criticized in Morocco.

2. What are the main reasons you have identified to explain why young people quit their studies in Morocco?

The first reason that pushes young Moroccans to abandon their studies is financial (23%). It is followed by lassitude (21%) and poor school results (15%).

The reasons for dropping out of school are indicative of the difficulties encountered in the education system and may also allow public authorities to target their interventions. Thus, by grouping the different reasons for dropping out according to whether they are voluntary or involuntary, we have seen that 60% of young people are quitting schooling; this rate even reaches 67% in rural areas. We observed other disparities by place of residence, but also by gender. Young girls in rural areas are thus more likely to be refused by their parents the right to peruse their studies (12% versus 6% in urban areas). The distance from school is also an important reason for stopping studies since it concerns 19% of young people in rural areas compared with just 4% in urban areas.

3. You mentioned that reaching the secondary education level is an important pre-requisite for young people, both to improve their probability of continuing their studies and their chances of being better inserted professionally. So what do you think is the best way to make secondary education more attractive to young people?

One of the first ways that could be implemented concerns the quality of education which, as we saw in the previous question, could be a means of encouraging young people to continue their studies. In recent years, private schools have experienced a significant growth in Morocco yet, their quality remains questionable and their high tuition fees reinforce the inequalities in access to education between students of wealthy families and those from a more modest social background.

The quality of education concerns its content as well as the supervision and creation of new schools. The language of learning, for example, causes significant difficulties for some young Moroccans. French, which was considered a foreign language, is now used as the language of instruction in higher education for science and economics. Thus, the orientation of young people who do not have the expected level in French is then constrained.

It is also essential to pay particular attention to the opportunities of the sectors proposed, whether for general education or vocational training. This could be an additional motivation for young people to continue in these streams. Finally, the establishment of bridges in the education system could also reduce the number of drop-outs as young people may be able to reorient themselves more easily.

4. As you pointed out, some schooling drop outs are involuntary. What recommendations would you give the public authorities to limit these cases or at least to facilitate the transition of these young people to the workplace?

Among the involuntary reasons for stopping studies, the financial reason is the most important. These results indicate that there is considerable room for maneuver to improve the retention rate of youth in the MTH region. Although the reforms of the late 1990s have improved access to education, it is still limited in rural areas, especially for young women. It is not necessarily about increasing spending on the education sector, but about better targeted measures such as the Tayssir program. The latter aims to reduce absenteeism by granting scholarships to hard-working students from the poorest households. The pilot phase in some rural communes shows positive results, particularly in the highest levels of education. Our results have shown that a woman with a level of education at least equal to secondary school is 1.7 times more likely to have access to a paid job yet, women’s access to education is particularly constrained in rural areas since they are 1.4 times less likely to have access to secondary education than women in urban areas. Measures targeting this subpopulation would therefore be beneficial.

In addition, the hypothesis of a lack of supervision or teachers or inappropriate content of lessons could explain the lassitude felt by young people as well as their academic failure. The quality of teacher training should therefore also be at the heart of the Moroccan government’s concerns. The congestion rate of sophomore class rooms is also high; therefore, less overcrowded classes would, with no doubt, favor better learning conditions.

Lastly, to facilitate the transition to the workplace, partnerships with companies could be envisaged, particularly with regard to vocational trainings. This would make it possible to better target the needs of the labor market like the SIVP in Tunisia. These partnerships could be accompanied by measures to encourage the hiring of these young people whom the company would have contributed to the training.

5. Are there not different trends in the length of studies and different mechanisms behind the professional integration of young women and men? Would that imply separate recommendations by gender?

Although access to education has improved for women, there are still disparities. We do not have precise data on the duration of studies by gender. However, estimates by Barro and Lee (2010) find a gap of 1.67 years in average length of schooling. In addition, parents’ refusal to continue studying is an important reason for young women’s drop outs, especially in rural areas. The pursuit of education for young women therefore seems more constrained than that of men.

Moreover, dropping out could also correspond to the desire to create a family which is a motive mentioned only by young Moroccan women and never mentioned by men. This choice necessarily has an impact on the professional integration of women either because of a too low level of education if they dropped out of school too early or because of the hard reconciliation between their family responsibilities and their professional life.

Mechanisms targeting professional integration should be differentiated by gender. For example, studies show differences both in the implementation of employability strategies and in the exclusion of certain professional spheres. If the authorities wish to improve young women’s access to the labor market, particular attention should be paid to them.

 

[1] Stage d’Initiation à la Vie Professionnelle.

The MED BRIEF is available for download by clicking here.

Interview by Constantin Tsakas

This activity received financial support from the European Union through the FEMISE project on “Support to Economic Research, studies and dialogues of the Euro-Mediterranean Partnership”. Any views expressed are the sole responsibility of the speakers.

Income Convergence and the Impact of the Euro-MED Trade and Financial Integration on Macroeconomic Volatility

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Economic and financial integration efforts between the Mediterranean Partner (MPs) countries and the European Union (EU) were initially introduced by the Cooperation Agreements, which granted total exemption from tariffs on industrial products. These efforts were subsequently enhanced by the Association Agreements that were launched under the Barcelona declaration of 1995, which resulted in MPs reducing or even eliminating tariffs on European industrial imports. At the same time, MPs have opened up considerably to other countries, either under the framework of the EU-Mediterranean (MED) trade agreements, or in the context of widespread reduction in tariffs through the signing of the World Trade Organization (WTO) agreements. In early 2000, the Barcelona Process was replaced by the European Neighborhood Policy (ENP), which then was revised in 2015 and became the New European Neighborhood Policy. It is under this framework that the economic relations between the EU and their MPs are now being reshaped.

The New European Neighborhood Policy provides a robust platform towards financial assistance through deeper financial integration, greater access to the common market, and better institutionalization of trade and financial relationships. The EU is also proposing a Deep and Comprehensive Free Trade Area (DCFTA) that will address agriculture, services, and non-tariff measures. Negotiations for the DCFTA are underway with Morocco and Tunisia. Within the context of this New European Neighborhood Policy and the role of the EU in facilitating the modernization, the transition, and international openness of the Mediterranean countries, this research study assesses the degree of income convergence between the two groups (EU and MED) resulting from those trade agreements, as well as macroeconomic volatility effects of those policies on a selected sample of MPs, in order to identify the winners/losers form these trade agreements.

This said, in this study, we use in a first stage the concepts of s-convergence and b-convergence to evaluate empirically income convergence among a group of EU-MED countries over the period 1980-2015. We then present a thorough empirical analysis of the implications of the Euro-MED partnership agreements on economic growth and on macroeconomic volatility in a sample of MPs. Because of the initiation of the Barcelona Process and the Neighborhood Policy in 2000, the empirical analysis is carried out sequentially, over 5 and 10-year periods, and then for the period as a whole 1980-2015. The empirical findings show that there is weak evidence of income convergence for a group of EU-MED countries when analyzed in 5- or 10-year subintervals from 1980-2000 in single equation cross section regressions. However, we find statistically significant evidence of real per capita GDP convergence either when the whole sample period 1980-2015 is analyzed or when the 10-year sub-periods are pooled and estimated in panel growth regressions. These are more plausible results both because economic growth and convergence are long run phenomena and because panel methods deliver more efficient parameter estimates. For the period 1980-2000, there is evidence of weak conditional income convergence in the group of EU-MED (16) countries, and this evidence becomes much weaker for the MED group of countries in between 2000-2015. The reason for these results is the negative effects of the European financial and debt crises on the Euro-MED region in general, and on the MED region in particular.

Macroeconomic stability and economic openness turned out to be statistically important factors and have the expected positive effect on economic growth in the MED countries. Indeed, in most of the estimated models, the variable that is consistently the most significant is economic openness. Of the other explanatory variables, population growth has the theoretically expected negative effect on economic growth as it is found in other studies on empirical growth. Government spending also had a negative effect on economic growth and is statistically significant as is population growth.

The main policy implications that emerge from the empirical results of this paper is that if the MED countries wish to achieve high economic growth they should pursue policies that further promote free trade and economic openness with the EU, as well provide an anchor of macroeconomic stability by means of policies that keep fiscal and monetary policies under control. Political and social unrest, as well as, financial and debt crises have a negative effect on economic growth and convergence in the region and, if possible, should be dealt with as soon as possible by appropriate political and macroeconomic policy action.

Other empirical results point to the fact that MED countries may be less susceptible to EU’s financial shocks if the domestic MED market is larger and/or more regulated. This is consistent with what economic theory would suggest and it has policy implications. In reality, some MED countries have chosen to impose capital controls to deal with financial market crises since it appears that the “culprit” is international capital flows although this policy practice may have undesirable long-term economic consequences. We have shown that MED countries should improve their macroeconomic and financial policy coordination to cope effectively with the impact of greater trade and financial integration with the EU. This may be achieved for example through enhancing regional economic and financial integration. The establishment of a MED free trade zone will not only stimulate and enhance growth, but will also enhance intra-MED trade, thereby, reducing considerably the exposure to the EU’s business cycle, and controlling for the excessive exposure of these MED small open economies to macroeconomic developments in the EU.

The literature shows that large economies can better absorb and neutralize the effects of external shocks. Controlling for the effects of shocks, however, is particularly more difficult in the case of the developing MED economies, which are smaller in size and nearly dependent on exports to the EU of very few commodities and on the import of a huge number of commodities. A direct consequence of an integrated capital market within the MED region will be to reduce the risks associated with greater EU-MED integration, and to dampen the vulnerability of MPs, especially those with high levels of debt, such as Lebanon, Jordan and Egypt, to the effects of fluctuations in EU’s interest rates. A larger MED financial market would lower the cost of raising capital, and would allow MED governments to service their huge debt at lower costs on one hand, and MED firms to rely more on the local market rather than tapping EU’s markets to raise capital, on the other. Lower costs of raising capital will subsequently translate into more investment, consumption, and GDP growth rates in the region. The MED region should accelerate the process of trade, financial, and economic integration with the EU in order to better absorb the negative effects of external political, financial and/or economic shocks. Efforts should also be exerted to speed up the implementation of the fiscal and monetary reforms so as to improve the inflow of portfolio and FDI into the region.

In short, for further trade and financial integration with the EU, MPs need to individually devote more efforts to pursue sound macroeconomic policies. This should be coupled with institutional reforms aimed at developing the financial sector in the respective MED economies. Subsequently, MPs should try to integrate horizontally while at the same time opening up further vertically (to the EU). It was shown that financial openness- as measured by gross capital flows as a ratio to GDP- is associated with an increase in consumption volatility, contrary to the notions of improved international risk-sharing opportunities through financial integration. The inherently unstable macroeconomic environment, political and military turmoil, as well as unsound monetary and fiscal policies in the MED region may explain this empirical irregularity.

One policy recommendation of the study is that MPs need to be more, not less, integrated with EU’s financial markets to be able to reap the benefits of financial integration in terms of improved risk sharing, and consumption smoothing opportunities. This conclusion will however require further analysis, as regional financial integration is associated with a variety of risks in the EU-MED region. To minimize these risks, MPs would need to implement sound macroeconomic and structural frameworks in tandem with further integration. For example, our findings have emphasized the role of sound fiscal and monetary policies in driving macroeconomic volatility. In regard to structural reforms, the development of the domestic financial sector is critical, as a high degree of financial sector development is associated with lower macroeconomic volatility.

Finally, the New European Neighborhood Policy provides a robust framework towards trade and financial assistance through deeper financial integration, greater access to the common market and better institutionalization of trade and financial relationships between the MED and EU countries. This research project will assist policy makers and academics in the EU and MED regions in redefining their trade, financial and macroeconomic priorities while designing new European Neighborhood Policies that will respond to the recent economic challenges. The new European Neighborhood Policy will spawn a large amount of literature on its consequences. This study constitutes an integral part of that literature by identifying the common and differing strands of analysis with particular emphasis on the changes made in the macroeconomic policy paradigm in both the MED and EU region.

The private sector, its role as an engine of growth and job creation, at the heart of FEMISE research

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FEMISE Brochure

Mediterranean countries suffer from a lack of dynamism of their private sector, which is not sufficiently competitive nor job-creating.

Therefore, FEMISE has placed the theme of the private sector, and in particular its role as an engine of growth, job creation and inclusivity, at the center of its research activities. A special attention is paid to the causes that prevent the sector from reaching its potential, in particular the constraints faced by firms in the Southern Mediterranean Region, and to the importance of innovation in the development of the Mediterranean private sector.

One of the specificities of the FEMISE network, coordinated by the Economic Research Forum (ERF) and Institut de la Méditerranée (IM), is to always strive to integrate the points of view of politicians, of private operators and, more broadly, of all local actors, in the discussions carried out under this theme. This approach provides better feedback on the research, and ensures its policy relevance.

The private sector at the center of the FEMISE academic research

Patricia AUGIER (Scientific Pres. of Institut de la Méditerranée, Coordinator and Scientific Pres. of FEMISE), coordinates the 2018 EuroMed report

Firstly, the 2018 FEMISE EuroMed report, the flagship publication of the network, will focus on the private sector in the Mediterranean countries. The objective of the report will be to take stock of the economic dynamics of the Mediterranean countries over the last 20 years (ie since the Barcelona Process), and to understand the blocking points. The general idea is that growth in Mediterranean countries must accelerate to absorb a growing number of incoming individuals in the labor market, and that this growth must be based on productivity gains rather than on factors accumulation : the development of the private sector is therefore at the heart of the definition of a new development model. One of the chapters will focus more specifically on the role of central banks in private sector development. Finally, the major concern of a more inclusive growth will lead us to consider social entrepreneurship as a potential opportunity for the Mediterranean countries.

A “Science for Business” partnership dynamic with technical and operational support actors

Secondly, FEMISE participates, in partnership with ANIMA, in THE NEXT SOCIETY project, which brings together public and private actors from 7 Mediterranean countries with the aim of supporting innovation ecosystems. This collaboration gives the opportunity to FEMISE and ANIMA to pool their complementary skills, which are analysis and production of academic knowledge on the one hand, and technical and operational support on the other hand.

FEMISE’s contribution is firstly to draw-up a scoreboard and analyze the position of each country in terms of innovation and competitiveness indicators, such as the Global Innovation Index, at different stages of innovation (inputs, process and outputs). FEMISE also carries out an analysis of the national innovation strategies and of the ecosystem of involved actors (government, associations, private operators…).

Next, FEMISE identifies high-performing sectors and products to highlight new national comparative advantages and investment opportunities.

Dr. Maryse LOUIS (General Manager FEMISE, Programs Manager ERF) and Dr. Constantin TSAKAS (General Manager Institut de la Méditerranée, General Secretary FEMISE) presenting FEMISE research at THE NEXT SOCIETY panels in Tunisia and Jordan.

FEMISE presents its findings on the occasion of advocacy panels bringing together academics, entrepreneurs, investors, managers of incubators and innovation structures and public actors. This allows to benefit from their feedback and, above all, from their point of view regarding the factors that led to the emergence of these new comparative advantages. This approach ensures that the findings and recommendations from FEMISE work can contribute to elaborate public policies. The challenge of these panels is to establish, for each country, a roadmap for innovation, from implementation to evaluation, with the objectives of strengthening national innovation systems, fostering coordination between stakeholders, and improving the instruments of innovation policies and strategies.

An opening towards South-Mediterranean institutions in a “Science for Policy” approach

Les jeunes chercheurs du FEMISE participent activement aux recherches, Karine MOUKADDEM et Jocelyn VENTURA (Institut de la Méditerranée, FEMISE) et Dalia RAFIK (ERF, FEMISE)

Thirdly, FEMISE is opening-up by cooperating with South Mediterranean actors and institutions directly concerned by these issues. Therefore, FEMISE co-authored and will publish in 2019 the2019 EuroMed report which will identify the constraints to growth and integration in the global value chains of Moroccan SMEs. This document results from the cooperation of the network with the African Development Bank, a main regional funder for development aid, and with the Institut supérieur de commerce et de gestion d’administration des entreprises (ISCAE) established in Morocco.

It is essential for the Mediterranean countries to better integrate SMEs into the global value chains in which most international trade takes place. In this report, we have chosen to focus on the case of Moroccan firms. It will be based on surveys and field interviews of SME managers and representatives of professional associations as well as on the Enterprise Surveys and Doing Business indicators of the World Bank. It is in this approach of discussions between researchers and public and private operators that the preliminary results of the report were presented before publication, in order to gather comments, suggestions and recommendations to enrich the research.

A triple anchoring to obtain research that is relevant from a political and operational dimension

To conclude, in addition to the ongoing academic research conducted by network members and supported financially by FEMISE funds (research available on the website), 3 other types of work devoted to the private sector are currently mobilizing the FEMISE team: (1) an analysis of the situation and a general discussion covering the entire region (EuroMed2018 Report), (2) a targeted and co-authored thematic analysis with a national focus (EuroMed2019 Report) and (3) a project on innovation in partnership with ANIMA.

Our analysis feeds on both (i) the knowledge and contributions of academic research, (ii) the consideration of concrete situations within the countries, as well as (iii) the points of view and insights from politicians and business actors. This triple anchoring allows us to develop products that are relevant from a political and operational dimension.

To get the FEMISE Brochure, with a presentation of the activities of the network and its new thematic approaches please click here.

To find out more about the preliminary findings of the report co-led with the AfDB, some answers are available in the interview below:

Article written by Jocelyn Ventura (Economist Institut de la Méditerranée)

(Deadline extended to 10/09) FEMISE 2018/19 Internal Competition: Fourth round of Scientific programme

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–  Deadline extended to September 10th! –

FEMISE is pleased to announce the launch of its fourth and final Internal Competition 2018/2019 within the current Scientific programme (2015-2019)

 

  1. INTRODUCTION AND THEME OF THE CALL

 Members of the FEMISE network who participated as affiliates of FEMISE in the European Commission Call (Access the list of these members) are invited to submit research proposals under the theme of:

Priorities of the EU-MED region

The deadline for the submission is on the 10th of September 2018 (included-French date and time)

Winning proposals will meet the criteria of having a real value added (generating fresh knowledge), using rigorous and sound methodology, and having the potential of offering policy recommendations.

This fourth call for internal competition completes the research agenda for FEMISE for the four years Scientific Programme (2015-2019) by setting the Priorities of the EU-Med region.

Reminder: The first, was launched in 2015 and the selected proposals focused on modernisation in the countries in the south in the long run. The second, was launched in 2016 and the selected proposals focused on the navigating through the transition in the short run. The third round, was launched in 2017, and selected proposals focused on the Role of the EU in facilitating the transition of the South Med countries. A list of accepted proposals under the three rounds is given in the scientific program below to avoid repetition.

Details about the theme of the current Call for proposals, can be found in the link below:

in English, pdf

in French, pdf

II. TIME TABLE

Deadline for submissions of proposals: 10th of September 2018

Tentative time plan:

Evaluation of proposals: 17 September 2018

Selection and Notification of acceptance: 21 September 2018

Signing Agreements for selected proposals: 24-26 September 2018

Submissions of first drafts: May 2019

Submission of final drafts at FEMISE conference: June 2019

III. SUBMISSION PROCESS

 The dossier of the research proposals should include the following documents:

(1) The research proposal should not exceed 5 pages and should include the following:

  1. Summary (1/2 page)
  2. Statement of research stating the problem addressed, brief review of the literature and the knowledge gap the paper will fulfil.
  3. Conceptual Framework of the research analysis and how challenges are addressed
  4. Research Methodology stating the research question, the hypothesis to be tested, and the methodology that will be employed (e.g case studies, empirical evidence, etc.) and explain the rationale for using the selected methodology.
  5. Policy implications, how will the expected results of the paper contribute to the policy making.
  6. Time Frame, expected output (number of research reports produced), dissemination plan and division of labour in the consortium. Please note the duration for the projects in this call cannot exceed 10 months.

(2) The filled Application form 2018 (download here);

(3) The CVs of the members of the research consortium (standard forms can be downloaded here)

The dossier of the research proposal of the consortium can be sent to FEMISE bureau by email, fax or courier before: 10 th of September (included -French date and time)- More details in VIII. below

Any applications received after this date will not be considered.

IV. ELIGIBILITY

(1) Only Affiliates members’ to the FEMISE-EU Contract on “Support to dialogues, political and economic research and studies of the Euro-Mediterranean Partnership” can be funded in this call (Please click here to download the list of those Affiliates to find out if your institute is eligible).

(2) All proposals have to be submitted in Consortiums as follows: at least one Affiliate member from the North AND one Affiliate member from the South.

Each consortium should have one Team Leader who will send the proposal on behalf of the consortium and will be responsible for the project (in terms of its executing, deliverables and admin process); he/she will be the contact person for all correspondence with FEMISE. Details of the legal representative who will be signing the agreement if the proposal is successful should also be provided in the application form. Proposals submitted with ONE member only will not be considered.

(3) Each researcher can only be involved in one funded project. In the case where a researcher is involved in several proposals, only the highest ranked proposal will be selected. The others (less well ranked) will be automatically eliminated.

V. Funding Scheme

The total budget envelope for all selected proposals in this fourth round of the internal competition will be approximate €64,000. Each consortium needs to specify in the application form provided the total amount requested for the honorarium of the team that will work on the project.

FEMISE will contribute a maximum of 80% of the final amount and the 20% amount will be considered as an “own contribution” from the consortium.

For example, if the approved budget for a selected proposal is Euros 8,000, FEMISE will contribute up to a maximum of Euros 6,400 towards this proposal and the remaining amount of Euros 1,600 will be considered as an “Own contribution” from the members of the consortium towards the project.

Teams are encouraged to produce more than one paper. The requested amount in the proposal needs to match the number of research papers produced and their quality, and will be part of the evaluation. The Selection committee reserves the right to modify the requested amount.

The funding through this call will ONLY cover the honorarium of the researchers (verified by Time sheets) that will be working on the selected proposals.

 VI. EVALUATION AND SELECTION PROCESS

Following the initial screening for eligibility, proposals will go through the following evaluation process:

I. Evaluation: The FEMISE Evaluation Committee will perform the technical evaluation of the proposals, addressing the following criteria:

  1. Scientific quality of the proposal, in terms of:
  • Relevance of the topic to the economic policy issues of the Euro-Med Partnership
  • Value added of the proposed topic to the existing knowledge
  • The quality of the methodology and its ability to address the issue efficiently
  • Integration of the ‘policy oriented’ dimension and its relevance to South Med policy framework.
  1. Other evaluation criteria
  • Degree of cooperation between teams (North and South)
  • Geographic coverage (number of countries covered, coverage of countries poorly studied (e.g. Algeria, Jordan, Lebanon). Though comparative approach is encouraged, proposals that are addressing one country specific topics could be accepted;
  • Overall Experience of the team of researchers while encouraging the participation of young researchers.
  • The Dissemination plan included in the proposal

 II. Selection: Based on this technical evaluation, a selection process will take place for the proposals that will receive funding.

The decision of the selection committee will be one of the following:

  • The proposal is accepted
  • The proposal is accepted with a modification in the requested budget
  • The proposal is accepted with suggested modifications (coverage, scope, etc.)
  • The proposal is rejected

Team leader of all proposals will be informed of the decision of the selection committee. The reports of evaluation received by the referees will be sent to all teams. For the accepted proposals, the bureau will send the necessary agreements, general conditions and forms.

 VII. Research Quality and Dissemination

The output of the research should be made in terms of one ore more research report of an average of 40-50 pages, ensuring a good focused analysis and increasing publications’ potentials in scientific journals, articles and policy briefs.

Expected outputs and peer reviewing:

(1) Drafts of the submitted research reports will go through an ex-post evaluation process (‘Peer Review’).

(2) Dissemination plans (other than the channels provided by FEMISE) are very much encouraged but needs to be discussed with FEMISE to ensure proper acknowledgements are made to the support of FEMISE and the European commission.

(3) the Submission of a Policy Brief based on your research work is highly encouraged.

VIII. CONTACT DETAILS

Please send your proposals (before the deadline of 10th September 2018) by:

Email: internal.competition@femise.org (Subject; Submission of a research proposal)

or by fax:  Fax ++ 33 4 91 31 50 38

or by Post to:

FEMISE Association,

CMCI, 2 rue Henri Barbusse,

13 241 Marseille Cedex 01, France

Tel: ++ 33 4 91 31 51 95

 

This funding is provided by the European Union through the FEMISE project on “Support to Economic Research studies and Dialogues of the Euro-Mediterranean partnership”. The content of the submitted proposals and the output of these projects are the sole responsibilities of the authors and can under no circumstances be representing the position of the European Union or FEMISE.

 

[1] The title of the contract is « Support to dialogues, political and economic research and studies of the Euro-Mediterranean Partnership » launched in March 2014.

Inequality and inclusive growth : Are education and innovation favoring firm performance and well-being?

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FEMISE is pleased to announce the publication of its research project FEM42-10, “ Inequality and inclusive growth in the South Mediterranean region: Are education and innovation activities favoring firm performance and citizens’ wellbeing?”.

The research project was coordinated by Inmaculada Martinez-Zarzoso (University Jaume I and University of Goettingen) and includes the following 3 papers:

Returns to Vocational and University Education in Egypt

While tertiary skills are important for growth in developed countries, it is primary and secondary education that are related to development in developing countries. Despite the substantial expansion in technical and vocational education in Egypt, the labor market lacks technical skilled workers not only in numbers but also in competences. This paper examines the impact of education on labor market outcomes in Egypt, with a focus on returns to vocational secondary and technical higher education in 1998, 2006 and 2012. We provide estimates of incremental rates of return to education based on selectivity corrected earnings equations and quantile regressions that give credence to the view that technical education has generally been inequality reducing in Egypt. The main policy implication of this paper’s analysis is that quality and labor market relevance of vocational education remains the key to an effective reform. Encouraging private businesses to invest in vocational education will be of little use if the trainees are still faced with social stigma that relegates them to low-paid jobs. Therefore, a policy recommendation is to design governmental measures to improve the ‘image’ of vocational education in Egypt.

Gender Gap and Firm Performance in Developing Countries

This paper uses firm-level data from the World Bank Enterprise Survey (WBES) to investigate productivity gaps between female and male-managed companies in developing countries and to compare the outcomes obtained for different regions in the world. We depart from the previous literature by using the gender of the top manager as target variable, which is newly available in the 2016 version of the WBES. The main results indicate that it is crucial to distinguish between female management and female ownership and also the confluence between both. We find that when the firms are managed by females and there are not female owners, they show a higher average labour productivity and TFP. However, if females are among the owners and a female is the top manager, then their productivity is lower than for other firms. These results are very heterogeneous among regions. In particular, results in South Saharan Africa, East Asia and South Asia seems to be driving the general results, whereas in Latin America and Eastern Europe and Central Asia, female participation in ownership seems to be negatively related to firm performance.

Real convergence between ENP and southern European countries: a cluster analysis

This paper analyses the convergence pattern of GDP per capita, productivity, inequality and unemployment in both ENP and southern European (SE) countries. It follows the methodology proposed by Phillips and Sul (2007, 2009) in which different convergence paths can be distinguished among heterogeneous economies involved in a convergence process. This heterogeneity is modelled through a nonlinear time varying factor model, which provides flexibility in studying idiosyncratic behaviours over time and across section. The main results from the convergence analysis show that whereas there is convergence in unemployment, GDP per capita and productivity between EU and ENP countries, no convergence is found for inequality. Among the challenges of an evolving neighbourhood, inclusive economic development should be included in the new ENP approach.