Private Sector, Civil Society Push for REI in the Maghreb

Stimson Spotlight

Private Sector, Civil Society Push for REI in the Maghreb

Maghreb civil society and private sector leaders are increasingly pushing for increased regional economic integration across North Africa. The Arab transitions have reasserted the importance of economic cooperation as a potential engine for economic growth and job creation. The economic downturn in Europe, exemplified by Spain's unemployment rate of 26 percent, compared to Morocco's 8.8 percent, has led North African countries to look to each other to strengthen their economies.

Business and civil society leaders including youth organizations and labor unions are bridging their own resources, regional networks, and expertise to promote Maghreb economic cooperation. These nascent efforts hold promise for prompting deeper initiatives towards regional integration. Recently, a grassroots push for Maghreb integration has reinvigorated efforts for greater regional economic cooperation. Many private sector actors and local activists seek to harmonize trade regulations and encourage intraregional investment.

The idea of Maghreb integration dates back to the late 1980s. Under the framework of the Arab Maghreb Union, Maghreb states envisioned an economic union that would allow for the free flow of trade between member states. However, due to longstanding political disagreements, plans for greater trade and economic cooperation have stalled. Restrictive trade and worker policies have further hindered integration efforts.

Integrating the economies of the Maghreb could contribute significantly to their economic growth. A 2006 World Bank study revealed that Algeria, Morocco, and Tunisia could increase per capita real GDP by 34 percent, 27 percent, and 24 percent respectively by 2015 through deeper integration and economic reforms. Another World Bank study conducted in 2010 found that investment in critical industries stimulated by deeper economic integration would foster a more competitive business environment, thereby increasing both the quality and availability of jobs.

A 2012 African Development Bank report found that non-integration in the Maghreb is costing each country 2-3 percent of GDP. Expert reports have equated this to a loss of about 200,000 jobs in each country. Morocco's state news agency noted that the loss of capital resulting from non-integration is equal to 200 billion dollars annually. Diverted capital flows add to the burden of unemployment in the Maghreb, which hovers around 8.8 percent in Morocco, 16.7 percent in Tunisia, and 19.5 percent in Libya, according to Trading Economics 2012 data.

Regional labor organizations are spurring the dialogue on Maghreb integration. The Trade Union Confederation of Arab Maghreb Workers (USTMA), composed of labor associations from each Maghreb country, organized a conference in Tunis titled "The Arab Maghreb and Inevitable Integration" in February 2011. The Tunisian General Labor Union (UGTT) Secretary General, the International Trade Unions Confederation (ITUC), representing numerous regional labor federations, and other civil society activists attended the conference. The summit highlighted the need for greater economic cooperation and resulted in the negotiation of an action plan to integrate the Maghreb economies.

Later, in September 2012, representatives of the Algerian General Workers Union (UGTA) and the Moroccan Workers Union (UMT) signed an agreement to harmonize trade and investment policies. These leaders continue to wield their influence in order to boost intra-Maghreb trade.

Maghreb private sector leaders are also driving regional economic integration. The Maghreb Employers Union (UME) and the Tunisian Union of Industry, Trade and Handicrafts (UTICA) jointly coordinated the second Maghreb Businessmen's forum in 2010. More than 630 firms from across the Maghreb met with regional ministers and representatives of the General confederation of Moroccan Enterprises (CGEM) to explore mutual economic development through integration.

In February 2012, Tunisian businessmen and entrepreneurs engaged Algerian Trade and Industry Chamber (CACI) representatives during President Moncef Marzouki's visit to Algeria. Seeking to maximize profits in a market of nearly 50 million consumers between both countries, Tunisian business leaders advocated for cross-border investment and private partnerships with Algerian professionals.

Tunisian businessman Slim Zeghal, CEO of ALTEA Packaging, has been a vocal advocate for Maghreb economic integration. Zeghal has underscored the role of Maghreb entrepreneurship and business expansion as critical elements for a broader economic integration strategy for the Maghreb.

Youth activists also raise the stakes for Maghreb cooperation. Facing one of the highest rates of youth unemployment worldwide, according to an African Development Bank report, Maghreb youth groups have also called for reducing obstacles to Maghreb integration. The Euro-Maghreb Youth Union (UJEM), active proponents of a unified democratic Maghreb, hosted several conferences, public forums, and sit-ins throughout the past two years. This particular group advocates for young Maghrebians and desires more open borders between Morocco and Algeria.

The call for Maghreb unity and economic integration increasingly resonates among civil society and the private sector communities across the Maghreb. Seeking open borders, greater trade, ease of movement, and access to jobs across national boundaries, Maghreb youth, non-government actors, and business leaders alike are proposing a renewed, organic approach to economic integration of the Maghreb. While these activities do not definitively resolve the challenges of economic integration, they form the groundwork for progress. Early success may take place at a smaller scale such as cooperation between Libya and Tunisia before the more ambitious goal of regional integration can be realized.

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Photo credit: Magharebia via Flickr