It is a discomforting historical thought that great power shifts in the global economy can be dangerous.
It is a discomforting historical thought that great power shifts in the global economy can be dangerous.
The rise of Germany after 1870 and the transfer of hegemony from Britain to the United States after World War I are but two common examples.
The rise of China and the relative decline of Europe and the trade wars between the United States and China argue in favour of a new accommodation between leading actors.
The COVID-19 pandemic is upending certain features of globalisation and questioning the viability of value chains as we know them.
As tectonic plates shift, North Africa is definitely not in a comfortable position. It lacks a common purpose, is incapable of agreeing on internationally recognised borders let alone developing common economic projects of mutual interest for the whole region, even though they would offer desperately needed employment.
Europe’s attitudes do not help as the prism through which it sees the Maghreb region is, too, marked by security considerations.
The long value chains that have seen European companies de-localise massively to China since the early 1990s will be, to some extent, re-arranged after this pandemic.
Apart from the issue of the heavy industrial carbon footprint, France, Germany and the United Kingdom will no longer allow, for example, that 80% of the active ingredients in the pharmaceutical products they manufacture to be made in China.
These activities will be in part repatriated to the EU but some of them could be relocated to
Tunisia, Algeria and Morocco, all of which boast an ability to manufacture up to international standards.
European companies have set up car factories in China but also in Tangiers. The success of the latter shows the added benefit of manufacturing closer to home.
Yet nothing illustrates Europe’s tightfisted, mercantilist behaviour better than the manner with which it has treated Morocco in this sector. Leading French and, to a lesser extent, German manufacturers export an estimated 100,000 cars to Morocco annually. They insist and Morocco has agreed that the 22.5% import customs charge will be waived, which is not the case for cars from Japan or Korea. This hands the EU car-exporting firms a profit margin that is the equivalent, in rough figures, to what the EU offers in aid each year.
The Moroccan state pays for the infrastructure works needed for the building of the plants, has sometimes been asked to take a capital stake in the new ones and offers generous tax breaks in the first few years of operation.
The fact that Morocco is a close strategic and political ally of France makes no difference to French behaviour. This pattern is repeated in Tunisia. Algeria is different because its oil resources have allowed it to play a more independent game. But with oil prices dropping to $20 a barrel, an economy far less diversified than that of its neighbours and immense challenges spinning out of the domestic politics of the past 12 months, the Algerian state’s economic stewardship does little to encourage private manufacturing and is hardly a model, in any case.
Back in 1995, the Barcelona Process heralded what appeared to be a new era of economic cooperation between the two shores of the Western Mediterranean. But the south boycotted the tenth anniversary of 1995. The relationship bumped into a host of problems, including the insoluble Israeli-Palestinian conflict, the 9/11 events, the financial crisis of 2008 and the Arab uprisings of 2011. The lofty ideals of a quarter of a century have long gone to waste.
Throughout the 1990s, however, Germany practised a far more active policy of de-localising to Eastern European countries, which eventually joined the EU, much more than France ever dreamt of doing in North Africa.
Yet historic, human and economic ties between the Maghreb and Western European countries, France foremost, are deep and longstanding.
Europeans worry about China’s advances in Africa, but that continent, in the view of many leading French and other European businessmen — at least in private — has already been lost to Europe. The Maghreb remains. But if Europe, encouraged by France, if it so wishes, were to engage North Africa more seriously, things could change. The Chinese will undoubtedly step in if Europe defaults.
Algeria and, to a lesser degree, Tunisia and Morocco will have to reform their respective states and modernise governance, especially the judiciary.
Morocco has more modern banks. Tunisia has a better educated workforce. The apprenticeship of democracy is proving hard in Tunisia but a freely elected parliament might prove a more useful basis for reform than old autocratic ways. The EU has never really considered the economic, political and strategic cost of a No-Maghreb. It has done nothing to try to bring Algeria and Morocco closer and the ham-fisted intervention of France and the UK in Libya in 2011 has placed a great burden on neighbours, especially Tunisia, whose security expenditures account for 20% of the budget compared with 5% until 2011.
As globalisation undergoes major changes once this virus outbreak is contained, Europe could and should offer North Africa a much more serious level of economic partnership than it has until now. It should face its weaknesses and realise that making North Africa prosperous carries huge benefits for both rims of the Western Med.
The EU should stop preaching democracy to Maghreb countries and let them work out their own future. This moralising is deeply insulting in view of Europe’s capacity to forget its democratic preaching when and where it suits its interests. North Africans are sick and tired of this discourse which even the less educated Tunisians, Algerians and Moroccans can see for what it is — hypocrisy.
Will it lock itself down or will it, instead, glance at history and realise that this part of the Mediterranean is drawn to Europe by a time-honoured tradition of trade cooperation well beyond any wedge that extremists from both shores have tried to drive?
By Francis Ghiles.
