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Talking Points

A balancing act: EU’s development and commercial goals in North Africa

11-03-2016

Große-Puppendahl, S. 2016. A balancing act: EU's development and commercial goals in North Africa. ECDPM Talking Points blog, 11 March 2016.

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Everybody is talking about it, from the European Commission and its EU member states to the Agenda 2030 for Sustainable Development: business needs to be better engaged in development. At the same time, there are growing discussions around EU economic diplomacy and interest in using public support instruments to help EU businesses to internationalise. This raises a fundamental question: to what extent can commercial and development agendas be aligned?

The two policy areas – economic diplomacy and private sector engagement for development – seem to come together in North Africa. While migration, political instability leading to the Arab spring in 2011, and terrorist threats have underpinned European Commission support to North African countries to democratise, achieve political stability and (economic) prosperity, there is also an interest in Europe to regaining its place as lead source of foreign direct investments (FDI) in the South Mediterranean region.

EuroMed Invest is an interesting approach in this regard, attempting to combine development and commercial objectives in encouraging EU firms to invest and partner in the region. Given the EC’s communication in 2014 calling for a stronger role of the private sector in global development, EuroMed Invest might therefore offer ideas for similar instruments in other developing countries, not least in Sub-Saharan Africa.


A look at EU North Africa cooperation


Regional cooperation between the EU and its Southern neighbours goes back a long way. But recent frameworks largely build on the 1995  Barcelona process with which the EU – then the EU15 – together with its twelve South Mediterranean partners set out to manage bilateral and regional relations. Its aim was to create a Mediterranean region of peace, security and shared prosperity, underpinned by legal and political stability. This included a financial and economic dimension with the gradual establishment of a FTA aimed at promoting shared economic opportunity through sustainable and balanced socio-economic development.

As a spin-off from the Barcelona process, the European Commission established the ANIMA project (2002-2007) to reinforce the capabilities of South MED investment promotion agencies (IPAs), focusing mainly on institutional support, network creation and regional investment promotion. With the  European Neighbourhood Policy (ENP) framing regional cooperation between the EU and North African countries from 2004, a second phase of the ANIMA project was launched, with objectives and activities very much along those of the previous ANIMA project: Invest in Med (2008-2011).
Again, development objectives were sought through reinforcing the capabilities of regional IPAs but also bringing investments into the region to support regional economic development. This led led to the creation of an ANIMA Investment Network in 2006, today the lead organisation of a consortium implementing EuroMed Invest.


The case of EuroMed Invest


While the first two project phases focused mainly on capacity building of regional IPAs and improving the business environment, the most recent incarnation of ANIMA, EuroMed Invest, pays considerably more attention to EU commercial interests. This coincides with a change in institutional home from  DG DEVCO Directorate F ‘Neighbourhood’ to the newly created DG NEAR. As such, EuroMed Invest aims at boosting private business interest and investments while contributing to an inclusive regional economic development with much more focus on EU interests and visibility in the South MED. This shall also ensure that the EU regains its leading position as source of FDI in the region.

Interestingly, the project parts that were previously supporting the business environment and regional economic support under Invest in Med – so the development cooperation bits – have been detached from EuroMed Invest and are now being implemented by GIZ and UNIDO in their respective EBESM and Cluster initiative projects.

By linking up companies from both regions, EuroMed Invest therefore seems to interpret development cooperation more through a commercial or economic cooperation lens, which by triggering EU investments into the region can create jobs, income and prosperity in the South Mediterranean besides pursuing EU economic diplomacy.

Both aspirations in the region – development and commercial – are closely related to broader issues of peace and security, migration, increasing terrorism and political instability. It remains to be seen therefore how development and commercial objectives can reinforce without undermining each other and if EU economic diplomacy can thus foster inclusive, sustainable development in North Africa.


Beyond the MED


It seems that beyond the case of EuroMed Invest but also more broadly, commercial and development objectives are becoming increasingly aligned. This is seen both at the level of some EU member states (e.g. Dutch World to gain, UK’s approach to engaging the private sector for development) and at the EU institutional level (e.g. the new Trade for All strategy or EuroMed Invest).

This, however, raises questions related to how these instruments should be organised and strategically set up, and who has the main responsibility between Ministries, departments or Commission’s DGs. EuroMed Invest seems to suggest that DG NEAR is interpreting development cooperation in a less traditional and more commercial way in light of the in 2015 reviewed ENP. As a recent College of Europe policy brief argues, the renewed ENP is less normative, less reform-oriented and less political as a response to “the reform aversion of most Southern neighbourhood regimes” and the EU’s neighbourhood being “in a state of crisis.”

Research findings also suggest that being open and transparent about EU’s own economic interests can increase the project’s traction and usefulness in both regions. There might also be increasing opportunities for incorporating development objectives in broader economic and security goals, as exemplified by the recent EU Trade for All strategy and hopefully in the upcoming EU Global Strategy.

So, can the agendas of commercial and development objectives be aligned? The examples suggest that while institutions give quite different mandates, the actual focus offers space for greater synergy and cross-learning between instruments and policies. This calls for more interdisciplinary thinking and acting, so that complex and interconnected issues within a region such as North Africa can mutually benefit. That said, they both face similar challenges in identifying and measuring results, impact and additionality – but that is a subject for another post.


An upcoming ECDPM case study on public support instruments to engage the private sector for development will look more closely into matchmaking programmes at the European level by looking into the cases of DG GROW’s Enterprise Europe Network, DG DEVCO’s AL-Invest programme in Latin America and DG NEAR’s EuroMed Invest project in the Southern Mediterranean.


The views expressed here are those of the authors, and not necessarily those of ECDPM.

In addition to structural support by ECDPM’s institutional partners The Netherlands, Belgium, Finland, Ireland, Luxembourg, Portugal, Sweden, Switzerland, and Austria, this article benefits from funding from the Department of International Development (DFID), United Kingdom.

Photo: Yosr works as a consultant for an export promotion agency. Courtesy of Arne Hoel / World Bank. 

 

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Comments

Sebastian Grosse-Puppendahl

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2016-03-30 12:01:42

Dear Mr. Gibb, many thanks for your comments. I agree that many of the problems are deeply rooted and therefore history plays an important role - by the way like in Europe, too. Any short blog cannot give a full picture of such a complex region and also this one does not try to do so but rather points to a number of past developments (here the Arab spring is only one example) that inevitably affected EU policy and instruments towards its southern neighbours. ECDPM does not want to do an assessment of these instruments but tries to better understand how policy works out in practice looking at concrete examples, such as the EuroMed Invest project amongst others. This blog aims at explaining where commercial and development cooperation objectives overlap and how instruments, such as EuroMed Invest can yield good opportunities to leverage business activities and EU-Med matchmaking for development objectives, such as increased investments triggering jobs and income in the Southern Mediterranean. The ANIMA Investment Network managing the project on behalf of the European Commission evolved out of a Commission project (the ANIMA project) in 2006 and is the lead agency implementing the project within a broader consortium, called MedAlliance with several partner institutions. I would be interested to know more about why you consider EuroMed a "tragedy"? I assume by EuroMed you refer to the overall EU-Med relations?

John Gibb

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2016-03-18 20:50:20

I'd welcome a response to my comment,at least to the points I raised about the appointment process for ANIMA,the Dutch justification for cutting the governance line and how DFID are tracking their own targets.

John Gibb

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2016-03-13 19:02:47

Maghreb and Mashraq country problems are too deeply rooted for EC instruments to address.Until they signal their recognition that good governance is the sine qua non for sustainable development,EC policy will continue to be superficial,opportunist and ineffective. And of course no value for money at all. I note no mention of the Court of Auditors. Out of 167 countries, M and M rank between 161 and 76 in Transparency International's 2015 league table. Highly unimpressive.That these countries,geographically opposite Europe's markets,finance,know-how etc are in such a mess is tragic and was an avoidable scandal. European foreign policy has encouraged dreadful governance -,no accountability, no human rights,no democracy etc.Member states are complicit. You should not refer to the "Arab Spring". This is lazy,cliched media shorthand and underlines ignorance about the region's problems since "independence". The heaps of EC documents and reviews the blog cites shed no light as they wilfully ignore the basic problem facing each country from Morocco to Syria. Specifically, I would like to know ANIMA were appointed.I note that the Dutch policy paper cut good governance spend.Has the UK delivered on its forecast targets? EuroMed is a tragedy. Europe has a lot to answer for through dereliction of duty and propping up dictatorial regimes.Next steps? First the Commission demonstrates courage and acts independently of outmoded individual MS policies.Second,develop a new strategy with governance its sole criterion,and instruments and terms to match. Thankyou for the opportunity to comment on a well-researched note.

Economic Transformation and TradeBusiness and DevelopmentEU NeighbourhoodEuro-Mediterranean Partnership (EUROMED)North Africa