Tag Archives: femise

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.

FEMISE welcomes 8 new members !

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Following the adhesion of the 8 new members in the FEMISE Network, as of the 1st of March 2018, FEMISE is pleased to announce that the number of network members reached 104 members’ institutes: 57 from the North and 47 from the South.

This is a vote of confidence to FEMISE who is developing into the largest EU-Med network in the region, with an increasing numbers of researchers from both shores who are working together for the development and integration of the region and an increasing number of contacts from policy makers and international organisations.

Bios of new FEMISE members:

The German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Bonn, Germany. https://www.die-gdi.de/en/

FEMISE Contact person: Dr. Markus Loewe, Senior Researcher, Department “Sustainable Economic and Social Development”

DIE is one of the leading think tanks for global development and international cooperation worldwide. It is located in the UN City of Bonn. DIE’s work is based on the interplay between Research, Policy Advice and Training. DIE is building bridges between theory and practice.

Research at DIE is theory-based, empirically driven and application-oriented. It provides the basis for the consulting activities of the Institute. DIE develops policy-relevant concepts, advises ministries, governments and international organisations, and refers to current policy issues. The training programmes of the Institute for university graduates and young professionals are integrated into the research and advisory process.

The DIE has about 130 employees, two thirds of them work as researchers. The Institute is headed by the Board of Directors with Dirk Messner as Director, Imme Scholz as Deputy Director and Gabriele Kahnert as Head of Administration.

DIE’s institutional agreement ensures the principle of scientific independence of the Institute. The shareholders of the Institute – the Federal Republic of Germany (75 %) and the State of North Rhine-Westphalia (25 %) – appoint the Board of Trustees of the DIE.

The Institute of Economic and Social Development Studies (IEDES), University of Paris 1 Panthéon–Sorbonne, Paris, France. https://www.pantheonsorbonne.fr/en/ufr/iedes/about-us/

FEMISE Contact person: Dr. Mohamed Ali Marouani, Senior Lecturer, HDR in economics, Deputy Director of the UMR Development and Societies.

The Institute of Economic and Social Development Studies is an internal institute in

Paris1 Panthéon-Sorbonne University. It includes teaching, research, publication and management services and partnerships.

The Institute of Economic and Social Development Studies has the following missions:

– to provide training for students enrolled in the Institute in the following fields:

economic, social and cultural development;

– to prepare for initial and life-long training in national Master’s and PhD degrees, and to provide the organization of Master and PhD courses;

– to organize multidisciplinary research on economic, social and cultural development;

– to disseminate the results of the research carried out in this field by means of a

publication policy conducted within its autonomy framework, in particular through the the supervision of the “Revue Tiers Monde” and the “Collection Tiers Monde”, published by Armand Colin;

– to prepare international cooperation activities taking place in the public or private sphere.

 

Sidi Mohamed Ben Abdellah University (USMBA) of Fez, Morocco. http://www.fst-usmba.ac.ma/a-word-from-the-dean/

FEMISE Contact person: Prof. Abdelhamid EL BOUHADI, Professor of Higher Education

The Univeristy Sidi Mohamed Ben Abdellah is created by Dahir n°2.75.662 of 11 Chaoual 1395 (October 17, 1975) and in accordance with the Royal directives aiming on the one hand to bring the institutions of higher education closer to researchers and students, and on the other hand, to integrate the university in its own environment and to promote research for regional and national development and welfare.

And since its creation, the Sidi Mohamed Ben Abdellah University has experienced a significant expansion in terms of its structure and in the number of institutions as well as the number of teaching staff, administrative staff and students.

This gives it a key position in the map of universities in the Kingdom. Its mission was to provide teaching and scientific research in the fields of science, technology, economics, social sciences, law and humanities. Since its creation, the Sidi Mohamed Ben Abdellah University has been able to support the socio-economic development of the North Central region by training qualified and specialized professionals and managers. Today, the University is engaged in a vast program of reform that allows it to open up on new disciplinary fields and more diversified formations, thus creating new academic and professional training perspectives in accordance with the recommendations of the National Charter Education and Training and the provisions of Law 01.00 on the organization of higher education.

TOBB Univeristy of Eocnomics and Technology, Ankara, Turkey https://www.etu.edu.tr/en

FEMISE Contact person: Professor Bedri Kamil Onu Tas

TOBB Economic and Technology University (TOBB ETU) was founded on July I, 2003 as a non-profit, private foundation university with a public corporate body according to the Law number 4909 published in Official Gazette number 25155, by Turkey Chambers and Commodity Exchanges of Education and Culture Foundation. TOBB Economics and Technology University is subject to the provisions of Higher Education Institutions in Turkey outlined by Law number 2547.

TOBB ETU was established with the mission to do theoretical and applied research, to train qualified labor force needed by the business world, to develop university-industry cooperation, to educate high quality scientist, to conduct research on the developmental needs of the country and to contribute to the economic and social development of the country.

The main aim of the Department of Economics of TOBB ETU is to provide students with cutting edge tools to analyze economic phenomena, to conduct research, to be equipped with the necessary skills in a rapidly changing world. It aims to educate economists who have the knowledge and skills in complex social and economic issues that can use this knowledge to solve problems and design appropriate economic policies. With this aim, the academic members of the TOBB ETU closely follow today’s economic developments and carry out research in the field of economic development. Academic members of the Department of Economics at TOBB ETU have published 185 papers and implemented 20 research projects.

TOBB ETU is on its way to become a prestigious and competitive university recognized worldwide as a university that transforms knowledge into technology. It aspires to become a scientific and entrepreneurial hub in Mediterranean and MENA regions and contribute to the Human capital accumulation in region economies.

L’Observatoire des Pratiques des Entrepreneurs et des Entreprises (OPEE)

https://opee-sbat.org/en/

FEMISE Contact person: Professor Maarouf Ramadan, Délégué Général de l’OPEE

 

L’Observatoire des Pratiques des Entrepreneurs et des Entreprises (OPEE) was created through the initiative of a group of researchers and teacher-researchers, economists, managers, mathematicians, and statisticians who want to put their knowledge at the service of companies, entrepreneurs, and public decision makers. They are engaged in a process of knowledge sharing with an inclusive development perspective.

The (OPEE) aims to help entrepreneurs and policy makers improve the survivability and growth of small and medium-sized enterprises (SMEs) and ensure their integration into local, national, and global value chains. It proposes an innovative approach to open-system companies and develops analysis tools dedicated to small businesses (more than 1 and fewer than 50 employees).

The OPEE teams either are from the academic world or have close ties with the research world. They create economic models for companies and use the latest data analysis techniques to facilitate their development.

The OPEE targets SMEs, aged 1 year and older, that have 1 to 50 employees. It provodes a framework (SBAT: Small Business Assessment Tool) for analyzing public policy support for entrepreneurship in local communities, governments, and international agencies.

SBAT is a tool designed for small and medium-sized businesses. It aims not only to evaluate your activity for free but also to compare it with your competitors. This tool enables you to make choices to ensure a safe and prosperous future.

Faculty of Business Administration at GEBZE Technical University, Turkey http://www.gtu.edu.tr/

FEMISE Contact person: Associate Professor Murat Anil Mercan

Gebze Technical University (GTU) was established with the decree of the Grand National Assembly of Turkey on November 4, 2014, based on the foundations and experience of Gebze Institute of Technology (GYTE) founded in 1992, inheriting and embracing its 22-year heritage. Gebze Technical University is the youngest but an experienced university to become the most important hub for science in Turkey with its infrastructure, structure and academic staff.

The Faculty of Business Administration was established in 1992 following the foundation of the university. There are three departments in the faculty, namely Business Administration, Science of Strategy and Economics. Since 1994, the Department of Business Administration awards Master’s Degree, since 1996 it awards PhD Degree, and since 2008, it awards Bachelor’s Degree. At the Department of Economics, Master’s Degree has been awarded since 2010 and PhD Degree since 2013 while the Bachelor’s Degree has been awarded since 2017. The Department of Science of Strategy awards Master’s Degree since 1999.

At GTU Faculty of Business Administration, which has a competent academic staff, our students are trained in Undergraduate and Postgraduate education. Its Mission is to provide the necessary training opportunities for the personal and academic development of our students in line with the ever-changing world conditions, and by highly valuing the entrepreneurial, innovative and ethical values as well as social responsibility, and wıth the greatest help of our location to contribute to the sustainable development by linking the industry, government and society.

Department of Political Science and International Relations (PEDIS) – University of the Peloponnese, Greece

FEMISE Contact person: Assoc. Prof. Nikolaos Tzifakis

The Department of Political Science and International Relations of the University of Peloponnese has developed an increasing interest in the EU-Med region. The Department’s work in this domain has been confirmed by its external quality assessment, conducted by the Hellenic Quality Assurance Agency (HQAA), in Greece in 2014.

In 2014, PEDIS decided to further explore socio-economic and political issues of the EU-Med region, by laying the grounds for a specialized postgraduate program. The Master of Arts (M.A.) in Mediterranean Studies offers a flexible multidisciplinary programme that covers an array of pressing, though interdependent, questions.

The Department has been equally active in its research activities about the Mediterranean region. Since 2008, the Centre for Mediterranean, Middle Eastern and Islamic Studies (CEMMIS) (www.cemmis.edu.gr), an interdisciplinary research team that operates under PEDIS, has conducted extensive research, covering a large geographic range that includes North Africa, the Middle East, Sub-Saharan Africa, Central Asia, South and Southeast Asia, and Muslim communities in Europe. In the past decade, CEMMIS has produced over 150 articles and analyses and has been steadily publishing a regular publication called Middle East Bulletin (currently in its 33th issue). CEMMIS has also created a series of interactive and multimedia projects, which together with its annual internship programme—that has attracted students from Greece, Turkey, Egypt, Qatar, Italy, Germany and Canada.

Loughborough University, UK http://www.lboro.ac.uk/

FEMISE Contact person: Dr. Christos Kourtelis

Loughborough University is a public research university located in the market town of Loughborough, Leicestershire, in the East Midlands of England. It has been a university since 1966, but the institution dates back to 1909. In 2013, the university won its seventh Queen’s Anniversary Prize, awarded in recognition of its impact through research and skills development in High Value Manufacturing to create economic growth.

Academics in the Department of Politics, History and International Relations (PHIR) are engaged in research across the fields of political science, political theory, public policy, international relations, and modern history. All department staff are research-active. This is reflected in the REF 2014 results, where the department finished 8th for research intensity in the Unit of Assessment D27 ‘Area Studies’.

Euro-Mediterranean affairs are at the core of the research interests of the PHIR, with researchers focusing on the political economic side of EU-Mediterranean relations and the financial assistance that the EU provides to the Southern ENP countries. Meanwhile, researchers also focus on migration, the security aspects of the Euro-Mediterranean relations and North African politics.

FEMISE MED BRIEF no4 : vicinity linkages and trade growth

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FEMISE is launching its new Policy Brief series MED BRIEF aspiring 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 fourth issue of MED BRIEF “The role of vicinity linkages in the EU-MENA region for trade growth: focus on migration, level of education, and social integration” is available here.

Pr. Andres Artal-Tur, University of Cartagena (Spain) and University of Valencia (Spain)

Networks of migrants connecting source and receiving countries lead to identify business opportunities, creating new trade flows. In this Policy Brief, written by écrit Pr. Andres Artal-Tur, we provide new evidence on this topic. First, we show how vicinity and historical linkages between EU and MENA countries result in additional pro-trade effects: EU and Maghreb immigrants living in EU countries show the highest additional pro-trade effects. Second, we observe that the contribution to the host economy highly differs according to the skills, abilities and life circumstances characterising the immigrant: Trade effects of tertiary educated immigrants are more than double those of less educated people. Language proficiency also appears necessary to speed up new business opportunities. Finally, we also found that as integration of immigrants at host country advances, the role of bilateral networks in creating new trade flows becomes less important. In this way, larger effects appear for recently arrived foreign-born people and those arriving in their adult age.

 

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.

Foreign direct investments, collateral victims of the Arab Spring

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A driver of economic growth, foreign direct investments (FDI) in the Middle East and North Africa (MENA) peaked in 2006. Weakened by the global financial crisis, Western economies have put a stop to their investments in MENA countries. The democratic transition has, in the process, accelerated the fall of FDI in a context of degraded business climate, legal uncertainty and political instability. FEMISE analyzes the impact on the evolution of foreign direct investment of the political and commercial liberalization process. (FEMISE report FEM41-07).

Le lancement du nouveau port de Tanger Med en 2007 illustre l’exemple d’un PPP réussi et le rôle capital des IDE. (Photo F. Dubessy)

The launch of the new port of Tangier Med in 2007 illustrates the example of successful PPP and the key role of FDI. (Photo F. Dubessy)

As a creator of wealth and jobs, foreign direct investment (FDI) enjoyed a boom between 2005 and 2008, particularly in Morocco and Tunisia, with growth rates of 50% and 252% respectively. The foundations of major structuring projects for these two countries were laid, the sovereign state becoming aware of the strategic issue of public-private partnerships (PPP). The launch of the new port of Tangier Med in 2007 illustrates the example of successful PPP and the key role of FDI.

Not surprisingly, these countries, but also the entire region, have since 2009 and until 2012 recorded a drastic drop in FDI. FEMISE, in its FEM41-07 report, points out several decisive criteria in the decision to invest in a foreign country: geographical proximity, cultural links, language and religion. Other factors such as the quality of institutions and the economic situation also play a determining role.
Thus, during the events of the Arab Spring, the Maghreb countries engaged in a democratic transition, but in the process witnessed increasing political and judicial instability, as well as fears of expropriation or insecurity regarding intellectual property. Investors also increasingly need to be reassured about the absence of corruption and violence (terrorist attacks, civil violence, war).

 

Disparate situations between producing and non-producing countries

Les investissements directs étrangers victimes collatérales du Printemps Arabe

According to OECD figures, inflows fell on average by 27% between 2008 and 2009 and by 13% between 2009 and 2010, reaching $ 11 billion in 2010. In 2009, they contracted by 15% in Jordan , 22% in Morocco and 39% in Tunisia. “All countries in the Middle East and North Africa are below their potential in the 2009-2012 period, with the exception of Iraq, Oman, Egypt and Jordan”, notes Femise, in a report coordinated by Juliette Milgram, economist at the University of Granada. The document analyzes both source and destination countries. It highlights significantly different situations for oil-producing countries. “Obviously, the MENA region should not be considered a homogenous block. Oil exporters can attract investments in natural resources (…), “notes the Femise report.

For its part, the OECD notes that “In order for countries to maintain the growth rates achieved prior to the global financial crisis and upheaval in 2011 and to boost economic competitiveness, the gap in FDI that must be filled in the MENA region is valued at about 75-100 billion USD per year. In the aftermath of the G8 summit in Deauville, the organization set up a support program for investment security in the Mediterranean region (ISMED) in the Arab countries in transition.Access the FEMISE report by clicking here.

Article by in partnership with Econostrum 

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FEMISE at Advocacy panel in Tunisia – THE NEXT SOCIETY

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The first meeting of the advocacy panel for a political agenda on innovation in Tunisia will be held on 23 February 2018 in Tunis.

This high level meeting is organised by CONECT (Confederation of citizen enterprises in Tunisia) and l’APII(Promotion agency for industry and innovation) with the support of ANIMA Investment Network in the framework of THE NEXT SOCIETY, and gathering national and international innovation actors including FEMISE.

Acting as a Task Force, the objective of this advocacy panel THE NEXT SOCIETY is to supervise the elaboration of an innovation roadmap, its implementation, and its evaluation. The objectives are as follows:

– To reinforce the national innovation system 

– To promote coordination among the actors involved 

– To enhance innovation policy tools by offering concrete services

The first meeting of this advocacy panel will consist in an analysis from innovation experts, an overview of companies needs, and a review of international best practices in terms of innovation and competitiveness.

Based on these outputs, priority politicy measures for innovation suppport will be defined by panel members, and implemented through technical assistance missions led by international experts.

In order to meet its objectives, and to guarantee a sustainable and inclusive approach, the advocacy panel will be comprised of officials from the Tunisian and European private sector, investors, innovation actors, ministries involved and their agencies, the European Union delegation, as well as academics. There will also be a focus on the private sector in order to place it at the core of the national innovation agenda.

If you would like to attend this meeting, please get in touch with:
Douja Gharbi, CONECT
douja.gharbi@conect.org.tn

Download the programme

Workshop: Integration of Moroccan SME Exporters into Global Value Chains

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FEMISE and Institut de la Méditerranée (IM) coorganized a workshop on “Integration of Moroccan SME exporters in global value chains” Thursday, February 22, 2018 at ISCAE, Casablanca, Morocco.

This workshop is part of an IM-FEMISE partnership with  ISCAE group and presented the preliminary findings of an African Development Bank study entitled “Identifying obstacles to improving the business environment and improving integration into the global value chains of Moroccan SME exporters”, which was co-led by Pr. Patricia AUGIER (IM, FEMISE) and with contributions of experts from the FEMISE network.

The study focuses on the issue of global value chains (GVCs). The assessment, in the case of Morocco, shows a low level of integration in GVCs compared with other countries within or close to the region. Then, the study identifies the most important obstacles to the integration of Moroccan SMEs in GVCs, based on interviews and case studies that were conducted between spring and the end of 2017.

Among other things, the study highlights :

  • On the import side, the main constraints are cumbersome customs procedures, cost of obtaining currency hedging and access to finance.
  • On the export side, what stands out most is the ability to penetrate the markets, access to finance, transport costs, cumbersome customs procedures, the cost of currency hedging, weak R & D, the difficulty of adapting products to the standards imposed on foreign markets and the difficulty of hiring labor.
  • In their relations with ordering parties, Moroccan SMEs face five major difficulties: the lack of efficient logistics services, the lack of competitiveness of products, the difficulty in satisfying the requirements of the order ordering parties, the difficulty to put the product or production process to the standards and standards imposed and the lack of qualified manpower.
  • Finally, the most important needs expressed by companies to help them integrate the CVM are: support for contact with foreign companies, the need for bank credits and support for product compliance and / or production processes to standards and standards imposed.

The workshop agenda is available here.

Articles from the Moroccan press on the event are available below :

LesEco.Ma, PME : QUELLE INTÉGRATION DANS LES CHAÎNES DES VALEURS MONDIALES

LeMatin.Ma, Intégration dans les chaînes de valeur mondiales : Les PME marocaines toujours dans le même bourbier

Libe.Ma, PME exportatrices et chaînes de valeurs mondiales entre contraintes et opportunités

L’Economiste.com, Compétitivité industrielle: A peine 1% des entreprises font de l’export

[1] This event 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 in this seminar are the sole responsibility of the speakers.

Call for trainees FEMISE : Deadline for submission: 15 March 2018

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As part of its activities, the FEMISE network is launching a Call for Candidates for the post of FEMISE Trainee Economist-Admin Support FEMISE for a 6-month training period.

Deadline for submission: 15 March 2018

 

We are looking for a trainee whose mission will be to fulfill the following tasks:

  • Data collection, national and regional
  • Synthesis and Creation of Indicators
  • Elaboration of notes and participation in the writing of EU-Med chapters
  • Other missions / research and administrative tasks

For further information, please consult the Trainee Sheet (in french) available here.

FEMISE Call for Policy Briefs – DL 28 September 2019

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FEMISE is inviting all researchers and experts to submit original Policy Briefs based on recent research conducted on policy issues relevant to the EU-Med region.

Deadline for Submission is now :

28 September 2019

I. Introduction

Policy Briefs are essential communication tools that translate the findings and the recommendations of an academic research work into a simple and concise policy note that could be accessible by, not only the policy makers, but also the business community and the general public.

The choice of the topic is left open to researchers.

II. Eligibility and Remuneration

  • The Call is open to both members and non-members of FEMISE.
  • The Brief could be a submitted by one or more authors.
  • Authors must be residents in a country of the EU-Med region
  • An honorarium of Euros 800 will be allocated for each selected brief.

III. Theme and template of the Brief

  • The Brief should conform to the “FEMISE General Guidelines for Policy Briefs”
  • The Brief should be about 4 pages maximum (around 2000 words)
  • It should be done in simple and non-technical language and should include operational policy recommendations that are based on a solid research.
  • The topic should be related to the EU-Med region
  • It could include one or two figures/tables for illustration and a short selection of a maximum of 5 references.
  • It could refer to the research papers from which it may be issued.

IV. Submission and Evaluation process

Please submit your Policy Brief to contact@femise.org with the subject: “Submission of a Policy Brief”

  • CV(s) of the author(s) should be submitted with the Brief as well as a short bio (that will appear on the brief if selected) of no more than 250 words
  • The evaluation will be based on the following criteria:

– the choice of the topic and how relevant it is the region

– the contribution to the existing knowledge

– the recommendation and policy relevance and their feasibility

– the style of writing

The selected Policy Briefs will be published under the FEMISE Policy Briefs Series “MedBrief” and in order of priority of the relevance of the topic.

 

FEMISE MED BRIEF no3 : FDI in MENA and impact of institutional context

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FEMISE is launching its new Policy Brief series MED BRIEF aspiring 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 third issue of MED BRIEF, entitled “Foreign direct investment in MENA: Impact of institutional context”, is available here.

 

Pr. Juliette Milgram Baleix (University of Granada, FEMISE)

This Policy Brief, written by Pr. Juliette Milgram Baleix (University of Granada) summarizes the findings from a study on the determinants of greenfield investment in the Middle East and North Africa region (MENA). The results point out that institutional deficiencies deter foreign direct investment in the region and in particular, for the main oil producers within this region. Improvements in the areas of democratization, institutional quality and violence reduction would undoubtedly make the region more attractive to foreign investors.

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.

FEMISE at Plan Bleu Workshop on “Economic Instruments of Environmental Policies”

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The Plan Bleu and the Mediterranean Action Plan Coordination Unit have been mandated by the Contracting Parties to prepare a new report on the State of the environment and development in the Mediterranean, to be presented to the Conference of Parties of the Barcelona Convention by end 2019.

Therefore, the Plan Bleu organized a workshop on “Major marine and coastal issues in the Mediterranean rregion : Data and trends” at the Campus du Développement (formerly CEFEB) of AFD in Marseille (France), December 12th and 13th 2017.

The objective was to form a group of about thirty thematic experts, from international, Mediterranean, and also national and local institutions, to contribute to the preparation of the report. Three experts from the FEMISE network were mobilized, helping to identify priority themes, missing information, and knowledge to be improved on economic instruments for adaptation to climate change. The objective is to provide usable content in the next report of the Plan Bleu on the State of the environment and development in the Mediterranean.

Overview of the three FEMISE presentations

Dr. Constantin Tsakas (General Manager of Institut de la Méditerranée, Secretary General of FEMISE)

Dr. Constantin Tsakas (General Manager of Institut de la Méditerranée, Secretary General of FEMISE): “South-Med strategies and instruments for climate change : what consistency of action for mitigation/adaptation and what further needs?” (presentation available here)

Climate change is a major theme for the Mediterranean countries, because of the strong interconnections between economy and the environment. These interdependencies bring out opportunities, in terms of job creation, resources, but also raise issues (seal level rise, water stress …). Southern Mediterranean countries are impacted on all fronts by climate change (marine ecosystem, biodiversity, vulnerable populations, agriculture, tourism …), and the socio-economic implications are a potential source of revolts and conflicts. Despite these challenges, many Mediterranean countries have experienced an increase in CO2 emissions per capita.

What economic instruments for environmental policies? The taxonomy of instruments identified by FEMISE researchers, as part of the work carried out for the next IM-FEMISE-ENERGIES2050 report on the impact of climate change in the Mediterranean (to be published in 2018), lists environmental goods (public procurement), regulations (quotas, standards, etc.), the creation of new markets (emission allowances, compensation for emissions exceeding allowed thresholds), the use of existing markets (taxes, subsidies), and other instruments such as energy labels and standards. On paper, all Mediterranean countries (except Libya) have a policy framework for renewable energies. These countries have adopted some of these tools in specific sectors (renewable energies, transport and tourism, and waste management).

Among the instruments for renewable energies, we first have public tenders in Morocco (for large-scale projects), Palestine, Jordan and Israel (for solar photovoltaic and wind farms). Then, targets have been defined (in terms of capacity or coverage) for heating and cooling from renewable energies. Feed-in tariffs for electricity produced from renewable energies have also been introduced, particularly in Algeria (for photovoltaic electricity). Finally, there are taxes, such as those on energy consumption, natural gas and energy-intensive products in Algeria.

Regarding the tools put in place for waste management, we mainly have instruments that use the existing market. In Tunisia, the FODEP subsidizes the environmental remediation or waste collection and recycling facilities, and a tax on the VA for producers of pollutants has been introduced. Morocco has introduced a fee for liquid dumping and waste disposal (based on the “polluter pays” principle), and an eco-tax on plastic products and packaging.

For the tourism and transport sectors, the following instruments have been identified: a tax on the registration of used vehicles in Tunisia, a subsidy for the “Moussanada Siyada” ecological labeling procedures, and a “RENOVOTEL 3” fund dedicated to the environmental upgrading of tourist establishments in Morocco.

Revenues from environmental taxes vary between Mediterranean countries. In Tunisia they represented only 1.16% of GDP in 2014, which remains insufficient in comparison with Slovenia (3.9% of GDP, for a GDP similar to Tunisia) or Morocco (1.72% of GDP). Among the MENA countries, Turkey is the country where tax revenue accounted for the largest share of GDP (3.83%), although this country is not comparable in terms of demography or tourism (the size of the country matters in tax revenues).

Efforts are ongoing at the institutional level, particularly in Morocco (recognition of sustainable development as a right for every citizen) and in Tunisia (climate change recognized in the Constitution of 2014), but also to a lesser extend in Algeria. But much remains to be done: the share of renewable energy remains insufficient in the energy mix, and only a marginal share of funding is dedicated to renewable energy, while most of the funds are still allocated to traditional energies.

Regarding future challenges and opportunities, the context (post-Arab Spring, social pressures) is to be taken into account. The key issue is the lack of resources to implement measures favoring “green” energies, while energy intensive activities remain a great source of jobs. In the long term, the challenge will be to redirect savings and employment towards projects emitting less CO2.

Preliminary recommendations include continuing adaptation to climate change, while integrating socio-economic realities. The dynamics of social and financial innovations should be used to build solutions to initiate partnerships aimed at a less carbon intensive Mediterranean based on principles of solidarity and economic convergence. Mediterranean countries should thus cooperate and exchange good practices. Finally, regarding the problem of available data (insufficient or obsolete), it is necessary to draw up a cartography of the available tools and to proceed with their evaluation, and to create an observatory on climate data to allow better monitoring of the evolution of countries.

Dr. Myriam Ben Saad (Université Panthéon-Sorbonne, Université du Sud Toulon-Var, FEMISE)

Dr. Myriam Ben Saad (Université Panthéon-Sorbonne, Université du Sud Toulon-Var, FEMISE): « Supporting renewable energy development using economic instrument in the Mediterranean » (presentation available here)

The MENA region holds the largest solar and wind potential in the world, which represents an opportunity in terms of market, infrastructure and energy transfer. The stakes are securing energy sources on the one hand (the region is facing water resources scarcity), and energy and economic diversification on the other hand (source of jobs, value chain potential).

After an overview of the existing literature, three variables of interest appear regularly: renewable energies, investment in these energies, and the effect of renewable energies on the environment.

Studies show that renewable energy policies and instruments help to promote and diversify these energies, as well as encourage investment (although efficiency varies depending on the type of policy implemented and the income level of countries). Such policies implemented in China have promoted the emergence of a more efficient renewable energy market, with better access to financial resources and new technologies, and taxes have promoted solar energy in Andalusian cities.

The literature is richer on the effect of renewable energies on the environment. An estimate on 24 Mediterranean countries shows that renewable energies have a strong positive effect on growth, but renewable energy policies remain insufficient in these countries. Studies identify a two-way relationship between renewable energy consumption and trade on the one hand and economic growth on the other hand. Other papers show the positive impact of renewable energies on reducing CO2 emissions and on creating jobs in the short term.

Electricity production from renewable energies doubled between 2008 and 2015, but its share in total electricity production declined due to higher power generation from fossil fuel than from renewable energies.

Source of R.E. in electricity, 2015, %

Large disparities remain among the countries. Saudi Arabia did not seem to generate electricity from renewable energies in 2015, while the share of electricity produced from these energies was over 30% of the total in Turkey and 15% of the total in Morocco .

The Mediterranean countries have diversification strategies more or less advanced: Lebanon and Syria rely almost exclusively on hydropower, while Algeria and Turkey also integrate other sources such as solar, wind, geothermal… In Morocco, renewable energy sources are balanced between wind and hydro (50-50) but a potential bias in the data is suspected (solar projects do not seem to be taken into account).

Several regional cooperation initiatives and PPPs have been conducted for renewable energy projects.

The EBRD recently financed the Benban Solar Power Plant in Egypt (2017). This project aims to reduce CO2 emissions and create jobs in a region where 50% of the population is below the poverty treshold. Also, Engie has invested in the construction of a wind farm in the Gulf of Suez (2017). In addition, the Morocco-Spain partnership has enabled the construction of a wind turbine blade manufacturing plant in Tangier, representing a potential of nearly 600 jobs.

Among the regional initiatives, the Mediterranean Solar Plan has provided a favorable political framework for the deployment of renewable energy and energy efficiency technologies at regional level. The Regional Center for Renewable Energy and Energy Efficiency aims to promote and strengthnen the adoption of clean energy practices in the region. The MENA Renewable Energy Conference is a framework dedicated to promoting and strengthening partnerships in the development and creation of solar and wind energy markets.

The policy framework is composed of regulatory policies (purchase tariff, compulsory quotas, net billing…), financial incentives and public financing (subsidies, tax credits, taxes…)

For example, Algeria, Morocco and Tunisia have introduced a feed-in tariff for renewable electricity, subsidies for investment in renewable energy, as well as systems for facilitating access to credit (bonus of interest rate, guarantee fund, credit lines). Morocco and Tunisia have also introduced tax incentives (reduced tariffs or VA taxe exemption for equipment)

The identified constraints to renewable energies are the market characteristics (small size, low yelds, risk temporality, currency risk, fossil fuel subsidies, lack of strategies on energy development, etc.) and meteorological and technological risks (variability in resource availability, lack of actuarial data).

A significant increase in investment in renewable energy infrastructure, and the review of the subsidy system (in particular the removal of fossil fuel subsidies, a major constraint for the efficiency of renewable energies) are recommended.

Pr. Mohamed Salah Matoussi (Faculté de Sciences Economiques et de Gestion de Tunis, FEMISE)

Pr. Mohamed Salah Matoussi (Faculté de Sciences Economiques et de Gestion de Tunis, FEMISE) : « Present and potential water pricing and markets in Tunisia and in the SASS: impacts on regional allocation, food exports and technical efficiency » (presentation available here) 

A distinction is needed between the use of water in the agriculture sector (as a factor of production to be ruled by the law of scarcity) and drinking water consumed by households (as a vital good not subject to the law of the market). Decentralized water management is more relevant.

Tunisia is under severe water stress due to the scarcity and degradation of water resources (climate change, excessive exploitation of groundwater …). The available water resources have thus greatly decreased (from more than 1000 m3/year/inhab in 1960 to 410 m3/year/inhab in 2017)
The water management strategy, focused primarily on supply management (where marginal costs are rapidly increasing), consists in maximizing resource mobilization for the country development being the least constrained, with the following defined priorities : dams and mountain lakes construction and rehabilitation, recycling of wastewater…

SASS project: Presentation of the region

The Northern Sahara Aquifer System Project (SASS) is one of the largest groundwater in the world and covers Algeria, Tunisia and Libya. In 2017, it represents an irrigated area of ​​about 300 000 ha and a water mobilization between 3 and 4 billion m3. The current use of the aquifer is greater than its renewal capacity, and this over-exploitation has a negative impact on the Oasis. Sustainable water management is therefore essential. But the initial philosophy of the 3 countries concerned was to mobilize as much water as possible to produce the maximum quantity of agricultural products. There are three types of farming: farms with free access to water, public farms benefiting from subsidized water, and private farms not benefiting from subsidies. The latter are more productive than free or subsidized farms, and make the best use of the resource: private farmers have a water price-elasticity and productivity-elasticity higher than the two other types of farms.

Since this policy is unsustainable, it should be replaced by an integrated and transversal management approach for available resources (water, energy, agriculture, environment) based on the following nexus: energy pricing – water pricing – growth agricultural production and better conservation of the resource.

A new hydro-economic model must be used for water resource management. It must lead to an optimal use of water and a maximization of agricultural production, while integrating the constraint of environmental degradation cost (pumping cost and water salinity). When this cost is internalized, the optimal quantities of water consumed and irrigated area are lower than those obtained in the model where the degradation is not taken into account, but the agricultural incomes are higher (13% increase compared to initial model). In other words, we produce more when preserving the resource.

Presenting recent research (see powerpoint for more details)

An article models the problem of water resources allocation in the agricultural sector, in a world of scarcity of resources and incomplete information. Such a model must ensure economic efficiency while taking into account unavoidable constraints: utility for users at least equivalent to the one they had in the past, increasingly limited availability of the resource, and incomplete information on its use value. It is thus necessary to reveal how farmers value the water and to integrate the cost of scarcity in the pricing of the resource.

A second article assesses the impact of an increase in the price of water on the production and export of irrigated crops (dates and citrus fruit): for a 100% increase in price, date crops are more negatively impacted than citrus crops (decrease in exports by 17.5% and 4.4% respectively). Establishing appropriate water pricing for citrus farmers would conserve the resource without significantly impacting the producers. On the other hand, an increase in tariffs in areas where the date is cultivated would cause a very significant slowdown in production and exports.

A last article measures the effectiveness of date crops held by private farmers on the one hand, and by water user associations on the other. The results show that the two systems are inefficient, but private farms are slightly more efficient than the associative farms. The results also show that the salinity of water has a strongly negative impact on the productivity of date crops.

by Jocelyn Ventura (FEMISE)