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PARIS: Only days to its official launch, the proposed Union for the
Mediterranean (UPM) is already raising hopes among entrepreneurs who
see it as medium to promote growth, both in the north and south, but
Europeans remain reluctant to invest in the Mediterranean basin.
After much acrimony and controversy, the
proposed union, the brainchild of French President Nicolas Sarkozy,
is scheduled to be officially launched during a heads of state and
government summit slated for Paris on July 13.
“Business entrepreneurs from both sides of the
Mediterranean are busy positioning themselves with a view to finding
growth opportunities,” a prominent French businessman said
recently on the sidelines of regional conference dubbed
“MedBusinessdays” held in Marseilles, a port city in southern
France.
“The French president has given a new impetus
to relations between the European Union [EU] and neighboring states
from the Mediterranean region by launching the ambitious project,”
said the businessman.
“Currently, the southern countries are
enjoying growth rates twice stronger than ours, these are the
locomotives,” Philippe de Fontaine Vive, vice president of the
European Investment Bank, was quoted as saying during the Wednesday
conference.
Nevertheless, speaking during the summit, Habib
Yousfi, president of the association of Algerian employers, was
quick to point out flaws within the proposed union: “I am a little
pessimistic about the UPM. For the moment, we have no clear vision
on how we are going to finance investment projects.”
“Where are we going to source the funds? Are
they going to come from the European Union or the private sector? We
are yet to answer this question and many more,” said the Algerian.
“The volume of investment from the European
Union has continued to remain subdued,” said Peter Mandelson, a
former British minister and currently European Commissioner for
Trade.
If trade with the EU accounts for almost half of
the total trade done by the Mediterranean countries, imports and
exports from these countries account for less than 10 percent of
flows into Europe, according to official figures.
In the services sector, arguably the most
important, trade between the regional countries represents a paltry
5 percent of the total volume of trade in services of the 27-member
EU.
“After largely financing the development of
Eastern European countries, the EU is finally turning its attention
to the southern shore of the Mediterranean, but it’s a little
late,” said Habib Yousfi.
According to a study conducted by Ernst &
Young and published Wednesday, potential investors remain cautious
about investment opportunities in the Mediterranean basin, even as
they continue to invest heavily in both Central and Eastern Europe.
“Many entrepreneurs, especially small and
medium-sized enterprises, are reluctant to take risks in the
Mediterranean, because the freedom of capital movement is not
sufficient yet,” said an observer. “There is need to establish a
venture capital industry, to invent new forms of funding,” he
added.
“Just as is the case with north-south trade
relations, there is likewise a need to boost trade ties between the
southern countries themselves,” said Peter Mandelson, who noted
they currently represent only 6.4 percent of the total trade of
these countries.
Another obstacle on the way of the proposed
union, according to keen observers, is the persistent tensions
afflicting several southern Mediterranean countries.
“Many people are afraid to invest here,”
said Jean-Jacques Sarraf, president of BusinessMed, which brings
together 12 Mediterranean employers’ associations. As a result it
is mainly the Gulf countries that invest in the south. “Therefore,
what we need is not their money, but the technology of Europe,” he
said. Xinhua
Further, southern entrepreneurs deplore the lack
of flexibility in immigration policies. “The only possibility to
reduce migration to Europe is to have wealthy southern countries,
which could then, in their own right, become chosen destinations for
immigrants,” said Moulay Hafid Elalamy, who represented Moroccan
employers during the Marseilles conference.
-- Xinhua
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