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WORLD-WIDE MAGAZINE OF ECONOMIA
Nº 4 2001
THE DIRECT FOREIGN
INVESTMENT
IN THE PAISES OF THE
MAGHREB
WITHIN THE FRAMEWORK
OF ASSOCIATION EUROMEDITERRANEA:
THE LOST LINK?
THE DIRECT FOREIGN
INVESTMENT
IN THE PAISES OF THE
MAGHREB
WITHIN THE FRAMEWORK
OF ASSOCIATION EUROMEDITERRANEA:
THE LOST LINK?
Iván Martín
One of the main waited for benefits of the creation in 1995 of the
Euromediterránea Association between the European Union and twelve countries of
the South and the East of the Mediterranean one was a significant increase of
the flows of direct foreign investment towards these last ones; in addition,
the IED in the last constitutes a fundamental link for the success of the
strategies of development applied by these countries fifteen years, as well as
to face the economic and social costs of the future Zone of Free
Euromediterránea Commerce. Nevertheless, five years the countries of the
Maghreb (Algeria, Morocco and Tunisia) have later not seen materialize that
increase. In the article, an analysis frame is offered on the determinants of
the IED in the countries of the Maghreb that allows to explore its possible
evolution in the future based on different scenes. Like conclusion, only the
integration of markets between the three countries of the Maghreb and the
adoption of active strategies of promotion of the investment that within the
framework complement the liberalization of markets of the Euromediterránea
Association can impel the levels of IED in the region.
Key words: Association Euromediterránea,
Maghreb, direct foreign investment
INTRODUCTION*
To reach
and to maintain a rate elevated of economic growth are the main challenge of
economic policy for all the countries developing and, in individual, for the
countries of Oriente.medio and North Africa (countries MENA). The economic
growth is essential to increase the standards of life, to reduce the poverty
and to generate opportunities of use for the enormous number of young people
who get up every year to the active populace. In order to face this challenge,
countries MENA cannot trust their own forces exclusively: they need to deepen its
integration in the world-wide economy and to become attractive destinies for
the direct foreign investment (IED) with the purpose of receiving the resources
for the development that cannot generate by themselves[
1
].
Nevertheless, in
1995 the World Bank indicated that countries MENA were the region of the world
(with the exception of Sub-Sahara Africa) that less had taken advantage of the
process globalización like growth motor, and the evidence sample that the
countries of the South and of the East of the Mediterranean they have not been
able to benefit from the increase of the flows of investment deprived towards
the countries developing that has been registered in the last decade (it see
Table 2), in spite of its proximity to Europe and of the favorable conditions
from access in the European markets which they enjoy its manufactured products.
This situation has not improved of significant form after the company/signature
of the Euromediterránea Association in 1995, that does not seem to have given
rise to the denominated effect of anticipation. This is certain even in the
case of the countries of the Maghreb (Algeria, Morocco and Tunisia)[ 2 ], no matter how hard at least both last
they are between the countries of the region that greater success have had in
their policies of macroeconomic management during second half of the Eighties
and the Nineties (and that, along with Egypt and Turkey, concentrate 95% of the
direct foreign investment in all the countries MENA, that in period 1996-1999
3.2% of world-wide the total IED in the countries developing and little more of
1% of the foreign investments anywhere in the world of the European Union only
supposed as well, with a noticeable decreasing tendency).
If we considered the
evolution and the economic perspective of countries MENA, last the four years
been have dominated by the lights and shades thrown by the Euromediterránea
Association decided between twelve countries of the South and the East of the
Mediterranean and the fifteen States members of the European Union in the
Conference of Barcelona, celebrated in November of 1995. With its
multidimensional approach (with a political dimension and of security, a social
and cultural dimension and an economic and financial dimension), the
Euromediterránea Association will have a deep impact in the economies of
countries MENA, specially as a result of the creation of the Zone of Libre
Comercio Euromediterránea (ZLCEM) after a relatively short transitory period
(of twelve years, that is to say, until 2010). The putting in practice of the
Euromediterránea Association had to orchestrate by means of bilateral
Agreements of Association between the European Union and each one of the
countries of the South and the East of the Mediterranean[ 3 ].
Of significant form,
the Declaration of Barcelona dedicated an only phrase to the direct foreign
investment, recognizing the paper that carries out, along with the internal
saving, as it bases for the economic development, and making a call for the
creation of "surroundings that facilitates the investment, in individual
by means of the progressive elimination of the obstacles these investments,
that could lead to the transference of technologies and the increase and the
increase of the production and the exports".
In the ministerial
meeting ad hoc celebrated in Palermo in June of 1998, the Presidency of
the UE published a declaration in whose point 9 it was recognized that the
creation of an area of shared prosperity - the objective express of all the
project of Euromediterránea- Association contained three great elements: establishment
of the free commerce, the reforms to promote the economic transition and the
promotion of the private investment. But although point 12 was dedicated to the
IED, did not undertake no effort of cooperation in this scope.
On the contrary, the
plan of cooperation adopted in the Conference of Barcelona seems to trust
specially exclusively the growth induced by the intensification of the commerce
- and the foreseeable caused competitive shock in the economies of the South
and the East of the Mediterranean by the elimination of the commercial
barriers, that in most of the cases ascend to between a 20% and a 30%, peaky
tariff much more elevated in certain sectors[ 4 ]- more than in a policy of stimulation of
the IED. Without damage of this option[ 5 ], there are numerous indications that, at
least for some countries of the South and the East of the Mediterranean, the
main objective when celebrating these agreements - besides to have access to
the flow of resources of economic and financial cooperation it jeopardize by
the European Union in exchange for the implantation of ZLCEM-consisted it of
stimulating the IED, and not as much in increasing the commercial interchanges
like such (Michalet 1997, p. 44). One is a realistic assumption if the
unilateral character of the decided commercial liberalization considers (in
effect, the European markets already were open to a large extent for the
manufactures coming from the South and of the East of the Mediterranean, and
the agricultural sector, in which many of these countries have a competitive
advantage, was excluded from the liberalization in principle).
1.
THE IED IN THE COUNTRIES OF THE MAGHREB
All the
countries of the Maghreb are countries of lower middle rent (between 1.200
dollars per capita in the case of Morocco and 2.100 dollars in the case of
Tunisia), with a moderate external debt and strong economic bows with the
countries of the European Union (between 55% in the case of Morocco and 70% in
the one of Tunisia of his flows of foreign trade they have as origin or destiny
the countries of the UE, and the three countries count on great communities of
working emigrants in Europe) and a history shared of colonialismo until its
independence at the end of the Fifties and principles of the sixty. Normally,
near two third parts of the IED that receives it comes from investors of the
UE.
1.1
the
evolution of the IED in the countries of the Maghreb
After their
independence, the countries of the Maghreb took some time in accepting the
fundamental paper of the foreign investment for their development. Then, there
were forts reluctance towards the preference of the foreign investors by the
light industries, the imports of equipment goods that normally entailed (and the
consequent technological dependency) and the repatriation of benefits, that as
much in one as in another case had a fort negative impact on the balance of
payments[ 6 ].
Only in the Eighties
it was shown that the IED could simultaneously be an instrument of
modernization of the industrial sector of their economies and a necessity in
macroeconomic terms to resist the endemic deficit of their balance by current
account (originated by a recurrent deficit of the trade balance and every time
in greater measurement by the impact of the service of the external debt).
Although the codes of investment of the three countries took some time in
reflecting this change of opinion[ 7 ], since then a maintained tendency has
been registered to facilitate the conditions for the foreign investors,
allowing, for example, the repatriation of dividends, granting to them fiscal
incentives and legal guarantees against any type of expropriation, etc. In
fact, nowadays it can say that the legal regimes of the investments in all the
countries of the region are homological to those of other countries developing
(FEMISE 2001, p. 32), perhaps with the exception of the slant something more
restrictive of Tunisia for the IED that can suppose a competition for their
national companies (see Table 1).
Table 1: Legal frame of the foreign investment in
the countries of the Maghreb
|
|
Algeria
(2000) |
Morocco
(2000) |
Tunisia
(2000) |
|
Law of investments |
Code of Investments of October
of 1993 |
Code of Investments October of
1995 |
Code of Investments of 1997 |
|
Convertibility of the currency |
Yes for operations by current
account |
Yes |
Limited to the operations by
current account; previous price |
|
Controls of change |
Distinction between nonresident
residents and. The Algerians cannot have assets abroad |
Convertibility of the
operations by current account according to article 8 of the IMF. Distinction
between foreigners and nationals. |
Convertibility partisan for the
operations by current account solely. Distinction between nationals and
foreigners. |
|
Treatment national |
Yes from 10/93 |
Yes (even favored) |
No |
|
Sectors prohibited |
|
Agriculture and Extraction of phosphates |
desincentiva the IED in the
sectors of restoration, real estate, distribution, and services to companies |
|
Limitation of the foreign
participation |
|
No |
In some activities, like
services on Shore, 49% |
|
Repatriation of benefits and
capitals |
Yes |
repatriation of capitals,
previous declaration |
Yes, for the nonresident ones |
|
Authorization previous |
No, except for if it is desired
to take refuge in the fiscal advantages |
No |
Yes, obligatory for certain
sectors |
|
Rights of property of the
foreigners |
Yes |
Yes |
Prohibited the agricultural
earth purchase, that can be rented by 40 years |
Source: International Monetary
Fund, Staff Country Reports.
This was translated
in an initial increase of the volume of IED at the beginning of the Nineties
(it see Table 2): in Morocco, the IED happened of an average of 82.8 million
USS to the year in 1985-1990 to 445 million USS to the year in period
1991-1994, whereas in Tunisia, was quadruplicated between 1985-1990 and
1991-1994, locating itself to a level superior to the 500 million USS. But this
promising evolution took step to a certain stagnation (peaky caused by precise
operations of privatization - like the Tunisian cementeras companies in 1998-
or concession of licenses of services public - like telephony GSM in Morocco in
1999 -) in second half of the ninety, specially dissapointing one if he
compares himself with the maintained increase of the world-wide IED in the
countries developing in this period (that more than was duplicated between 1989
and 1992 - of 22.400 to 51.108 million USS - and once again from 1992 to 1995 -
until the 111.840 million USS -, surpassing the 200.000 million USS in 1999).
This way, in spite of the supposed effect announcement of the Euromediterránea
Association, the certain thing is that the participation of the
countries of the Maghreb in the world-wide flows of private capital towards the
countries developing has not let decrease since I am created this Association,
happening of 1% in 1994 to 0.59% in 1999, also diminishing until insignificant
levels its participation in the outer investments of the UE.
Table 2. Direct foreign investment in the countries
of the Maghreb. 1990-1999 (million USS)
|
|
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
1990-95 (a) |
1996-99 (b) |
B/A |
|
Algeria |
0 |
12 |
10 |
-59 |
18 |
5 |
4 |
7 |
5 |
6 |
-3 |
6 |
|
|
Morocco |
165 |
317 |
423 |
491 |
551 |
335 |
357 |
1.079 |
329 |
847 |
380 |
653 |
71,7% |
|
Tunisia |
76 |
125 |
526 |
562 |
566 |
378 |
351 |
366 |
670 |
368 |
372 |
439 |
17,9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
241 |
454 |
959 |
994 |
1.135 |
718 |
712 |
1.452 |
1.004 |
1.221 |
750 |
1.090 |
45,3% |
|
Total PTM * |
2.051 |
2.078 |
3.060 |
2.840 |
3.890 |
3.946 |
4.013 |
5.591 |
5.790 |
7.112 |
2.978 |
5.627 |
89,0% |
|
Total PED ** |
34.689 |
41.696 |
51.108 |
78.813 |
104.920 |
111.884 |
145.030 |
178.789 |
179.481 |
207.619 |
70.518 |
177.730 |
152,0% |
Source: The
UNCTAD (1995-2000): World Investment Report
* PTM = Countries third
Mediterranean ones that have subscribed the Euromediterránea Association
developing ** PED = Countries
(a) and (b) indicate the IED mediates annual
during the period of reference.
, yet most
surprising of these data they are the irrisorios levels of IED in Algeria. On
the one hand, it must to the fact that this country has been the last one of
the region in raising its strong restrictions to the IED and that during the
Nineties is been immersed in a civil war between the islamistas guerrillas and
the army (for an analysis of the economic substrate of this crisis, it see
Martín 1998). Without embargo, the Department of State of the United States assures
that the North American companies have invested around 3.000 million USS in the
sector of the gas and petroleum in Algeria in los last years, British
Petroleum has invested supposedly 3.500 million USS in the same sector[ 8 ] and the own Bank of Algeria provides numbers of IED of
500 million USS in 1998, 270 million USS in 1997 and 260 million USS in 1996.
Since all the recognized international statistics (Indicating of World-wide
Development of the World Bank, Report on the World-wide Investment of the
UNCTAD, Statistics Euromediterráneas de Eurostat) agree basically in reflecting
insignificant levels of IED in Algeria, it is necessary to look for an
explanation these discrepancies. A possibility is that the investments made by
foreign petroliferous companies grant operation rights to them, but nonright of
property, with which they do not appear like IED; but this would not explain
why it in the last does not exist in the statistics of IED nor sign of the
establishment of four foreign banks years: French Citybank, Arab Banking
Corporation and two banks.
However, the participation
of Morocco in the total IED in the countries of the Maghreb always has been
over 50%, although its Gross Inner Product does not arrive at 33% of the
region. This must so much to the greater diversification of its economy like a
the greater size of its market (28 million inhabitants; Tunisia, although
counts on one more a more modern economy, only has 9.8 million inhabitants,
whereas Algeria counts with 29 million inhabitants, but all its economy turns
around the petroliferous sector and its political situation is much more
unstable).
In any case, until
now the volume of IED he has been relatively irrelevant in all the countries of
the Maghreb: in Algeria never it has surpassed 0.1% of Producto Interior Bruto
(PIB), and in Tunisia reached a maximum of 3.8% of the GIP in 1993 (13.1% of
the Gross Formation of Fixed capital) to return to fall and to become
stabilized around the 1.5% of the GIP (4.2% of the FBCF). In Morocco, leaving
to a side the exceptional year of 1997 (3.6% of the GIP and 17.4% of the FBCF),
never has surpassed the 1.8% of the GIP. What is even worse, the IED levels are
quite erratic, and mainly reflect the impact of the great projects of
investment in certain years, more than the existence of a regular flow of
external resources, in addition to that the IED continues flowing almost only
and exclusively to the traditional sectors: mainly the energy and the primary
sector and the textile sector and of the preparation, and to a lesser extent
the tourism. In general terms, the behavior of the IED seems to respond
basically to the "momentary attraction that exerts the privatization
programs, and not to a permanent commitment" with these economies (Joffe
1999).
Therefore,
until the IED it has not served now to complement the low rates of internal
saving, insufficient to finance the level of investments that they require, the
public deficit (the level of public cost would have to increase in the next
years with the purpose of facing the denominated "social debt", to
the negative social impact of the ZLCEM and to the population increase) and the
recurrent deficit of the balance by current account (the three countries depend
structurally on the food imports, although the three also receive a significant
volume of transferences of their working emigrants abroad and, in the case of
Tunisia and Morocco, of income by tourism). The high level of external debt (in
Algeria, in 1998 it ascended to 66% of the GIP, in Morocco to 54% and Tunisia
to 56%) prevents them to resort to the international markets of capitals to
satisfy its financial necessities, and the service of the debt supposes a
boosting charge for its balance by current account (it ascends approximately to
40% of the exports in Algeria, 25% of the exports in Morocco and 17% in
Tunisia).
But it is that in
addition the IED also can act like catalyst of the modernization of the economy
( mise-à-niveau it is the great motto of
its programs of economic reform), agent of structural changes (a previous
requirement for the development) and source of diffusion of technology. All it
forms a the IED like a crucial link to carry out the massive reassignment
of the productive resources that the ZLCEM is going to make necessary: in the
case of Tunisia, for example, one calculates that 60% of their industrial
production are threatened by the elimination of the tariffs, and only half of
that production corresponds to competitive sectors, which means that around one
third part of the industrial capacity it will have to be reasignar to
competitive industries, as long as these continue being it in the new context.
In Tunisia and Morocco, in individual, the competitive industries fundamentally
are in the sector of the textile and the preparation, and its competitive
advantage depends largely on the preferential access to the European markets,
preferences that will disappear as a result of the dismantling in the
Multifibras Agreement for year 2004 decided Ronda Uruguay within the framework[ 9 ]. By as much, those
industries that at the moment are competitive will even have to face an acute
necessity of modernization and increase of the productivity, in addition to to
be necessary the creation of competitive advantages in new sectors.
If the efforts made
by these countries consider to adjust their macroeconomic picture and to
introduce structural reforms years in the last, his low level of relative
development and its geostrategic importance, specially for the European
countries, the numbers to which it has been alluded to before put of relief
that the IED is not arriving in the awaited volumes (these three countries
regularly receive an inferior volume of IED to the one of other regions with a
population and a similar economic potential[ 10 ]) and that, until now, the Euromediterránea
Association does not seem to have marked no difference. In the following
sections, some factors are analyzed that explain that the IED has become the
authentic "lost link" of the model of development of these countries
and the perspective of future.
1.2
determining Factors of the IED in the countries of the Maghreb
In agreement with
Literature, the three main economic reasons that they explain the IED are the
pick up of productive resources, the pick up of markets (that is to say, the
size and the growth of the market) and the efficiency of the production
processes (this is, the advantages in costs). Reason why respecta to the
added flows of IED, seems that they are the macroeconomic factors, the
enterprise surroundings and the considerations relative to the political risk
those that play a dominant role on the microeconomic considerations, as it is
the yield of the capital[ 11 ]. On the
other hand, the concrete decisions of investment of the foreign companies are
affected mainly by the economic stability (including a legal frame and
regulating stable, an effective and independent judicial system is transparent
and foreseeable and that guarantees its respect) and the size of the market of
the welcome country[ 12 ].
With the purpose of
capturing in a simple analytical frame the global impact of the changes in
these determining factors throughout the time, it has been modified and
expanded the matrix initially used by Blomström and Kokko (1997, p. 11) to
study the impact in the IED in the regional agreements of integration. The
variable "location advantages" has been redefined so that it
synthesizes all the factors that directly affect the yield of the investment
projects: the availability of natural resources, the size and the growth of the
market, the availability and the cost of the production factors and the
geographic location with respect to the consumption markets, as well as the
competition of alternative locations for the investment. Under the concept of "changes
in the surroundings", we have including all the factors that affect to
"the perceived" risk which the IED incurs and the context in which it
operates, that is to say, enterprise surroundings, stability political,
political macroeconomic, political public, etc. From the combination of these
two variables the matrix represented in the Graph 1 is obtained, that reflects
the changes registered in the attraction of a country for the IED (it see
Martin 2001a, p. 542).
Graph 1. Matrix of
attraction for the IED
|
Changes
in the attractiveness of a country for the foreign investment |
Changes
in the location advantages (positive
to refusals Þ) |
|
|
Changes
of the surroundings of the investment (favorable
to unfavorable ß) |
1
C
|
2
B
A
2000 |
|
3
1989 |
4
1995 |
|
Although this
analytical frame is not able to explain volumes of IED in a certain
country, yes it would have to catch the main factors of attraction for the IED,
so that any change in the relative position in Graph 1 will be translated,
presumably, in the consequences changes in the flows of IED. Thus, any
movement upwards (as a result of the improvements in the surroundings for the
IED) or towards the left (thanks to the improvement of the location advantages)
in Graph 1 will have presumably a positive incidence on the IED flows, and vice
versa. Consequently, this scheme can be used to include/understand the changes
in the attraction for the IED happened in concrete sectors, certain areas or
even whole countries throughout the time.
If we took the
region from the Maghreb as a whole, during the Seventies and eighty a great
supply of cheap free access as well as manual labor benefitted from its
relative geographic proximity to the main European markets and, from tariffs to
the European markets of manufactures granted in accordance with the effective
Agreements of Cooperation from 1976; on the other hand, the enterprise
surroundings for the IED hardly could be less stimulating, with a strong
intervention of the State, nonexistence of any legal guarantee, high levels of
inflation and risk of change and even a clearly negative political attitude
against the IED.
This situation got
worse at the beginning of the Nineties, when opening its economies the
countries of East Europe and entering a transition process that will take to
some of them to integrate itself in the mid term in the European Union: the
cheap and highly qualified manual labor (the average wage per hour of a
qualified worker Polish era in 1993 approximately of half that the one of an
Moroccan and one third part that the one of a Tunisian, according to calculations
carried out by the World Bank) and the dense existing industrial weave in these
countries, as well as the perspective of a total integration of their markets
in the European single market became a decisive factor of attraction for the
IED, damage of the attraction for the IED of the countries of the South of the
Mediterranean. In our analytical frame, this is translated in a displacement
towards the right, from cell 3 to cell 4, as the relative advantages of
location of the countries of the Maghreb were deteriorated.
Simultaneously, in
the first Nineties the three countries of the region undertook ambitious
programs of structural adjustment and liberalization that lead to a sensible
improvement of their macroeconomic situation and its enterprise surroundings
(displacement from cell 4 to cell 2). Since this improvement seemed to prevail
over mentioned deterioration of advantages of location (and considering also
which the world-wide flows of IED experienced a great increase), these
countries were able to initially attract a greater volume of IED (it see Table
2 again). This increase can be explained by the first big wave of investments
of foreign companies - to a great extent, multinational companies with a
marketing strategy global that they have like objective to settle down in all
and each one of the markets, by small or adverse which they are that it follows
any opening of the markets of countries until then closed, independently of
which they are the advantages of location like such.
So and as they are analyzed
more ahead, the company/signature of the Euromediterránea Association in 1995
came to reinforce the degree of commitment of the countries of the Maghreb with
orthodox macroeconomic policies and the economic reforms, improving in greater
measurement even the surroundings for the IED, but at the same time it has
contributed to the deterioration of the advantages of location in the mid term
as a result of the elimination of the commercial protection front to the
European manufactures that this agreement contemplates (it see Section 2.3).
Once the first big wave of IED was exhausted, the one was east worsening of the
location advantages that prevailed, which explains the stagnation or the
diminution of the IED flows during the immediately later period (1995-1997) and
the persistent loss of quota of the world-wide investments.
There is another
factor that probably has contributed to these bad results in the matter of IED:
the appearance of the radical islamismo (specially in Algeria, but not only)
and the diffusion of negative western perceptions on the Islamic societies
(bound to the theory of the "shock of civilizations"), a phenomenon
that possibly resisted all the improvements in the conditions of the
surroundings for the foreign investment derived from the control from the
macroeconomic variables and the reform from the legal frame and that can move
away to many foreign investors by itself, independently of any other
consideration (so that it could happen that the countries of the Maghreb were
locked up in cell 4). In fact, surely this it is the factor that explains the
verified existence of a "negative slant" against the IED in the
countries of the South and of the East of the Mediterranean that takes shape in
a "hole" of near half of the potential investment in agreement with
its structural characteristics (it see Reiffers and Tourret 2000, p. 6)
The points To, B and
Cs of Graph 1 represent the possible scenes of future with regards to the
attraction of the IED of the countries of the Maghreb, and will be analyzed
later in this article.
As far as the
desagregación of these flows of IED by types of investment, in the case of
Algeria it is clear that one is almost exclusively the pick up of natural
resources, because the immense majority of the investments has gone destined to
the sectors of the gas and petroleum. The relative isolation of the zones of
petroleum production has allowed that its operation did not undergo significant
disturbances in spite of the adverse conditions of security which they reign in
the country from 1992, but the uncertainty on their political and social
stability in the future and the deterioration of the Algerian industrial weave
leave little place for the optimism on the development of the IED in other
sectors of the economy (perhaps with some exceptions related to the
privatization of great public companies, the public concession of licenses of
telecommunications and other services public and works).
The relatively small
size of the Tunisian market (the Gross National Product is equivalent to 19.900
million USS) leave to Morocco like the only country of the zone in which it can
be spoken of an important potential of IED "of pick up of markets" of
a significant volume (if abstraction becomes of the "investments of
positioning" of the multinational companies to which it has been alluded
to before). Nevertheless, the narrowness of own Moroccan market (PNB of 33.800
million USS) cause that it is essential to be able to accede simultaneously to
other markets of the region to even reach efficient scales of production after
products relatively little falsified technologically as they are the
household-electric ones or the consumer goods (the PNB combined of the
countries of the Maghreb -100.500 million USS, with 67 million people are inferior
even to the one of Portugal, with only 10 million inhabitants and even so the
second poorer country of the UE, and around two third parts the one of Poland).
And this is something that has not happened until now: the compartmentation of
the markets of the Maghreb has dissuaded many investors to establish in the
region production plants whose production would go destined to all the regional
market, and constitutes a source of permanent frustration for which they have
done it (it see section 3.1).
With regards to the
IED "of efficiency", one is a phenomenon that is reshaping the
international division of the work anywhere in the world, but a region that it
only has to offer an ample supply of cheap manual labor and cualificar is the
condemned to remain marginalized. Of the Maghreb, this type of IED has
consisted mainly of projects of investment of German, French, Belgian and
Spanish companies in processes of low value added in Tunisia and Morocco,
specially in the textile sector and of the preparation and in the one of the
footwear (the denominated one deslocalización), but very frequently in
zones of processing of exports specifically equipped for it. However, the bonds
between these zones of processing of extraterritorial exports and the national
economy are very weak, do not suppose a real competition for the local
companies in the national markets, its contribution to the fiscal income of the
State is very little (since they are free of most of the taxes and rights of
import) and create little added value (in Tunisia, each 100 dinares of exports
of the textile sector generate imports of to 76 dinares).
In any case, until
now it cannot say that the countries of the Maghreb have offered the required
conditions - in terms of productivity, wage costs, infrastructures, services to
the companies and enterprise climate to integrate itself in the chains of
international value, but they have not either been able to attract investors
coming from countries with dowries of factors relatively next to those of the own
region and, therefore, in one better situation to transfer appropriate
technologies[ 13 ].
In fact, the frank improvement
of the macroeconomic surroundings obtained thanks to the programs of structural
adjustment applied in the three countries of the central Maghreb from mid the
Eighties and the introduction of a favorable legal frame has not been
sufficient to surpass restrictions to the as serious IED as the bureaucratic
persistence of an excessive regulation, ties and the simple corruption in the
public sector and the administration of justice, the inefficiency of the
services public - transports and telecommunications mainly[ 14 ]- and of the
services of companies, and the social and political instability. Actually, the letter
of the law is supeditada often to the administrative abuse in its application,
and some significant restrictions to the activity of the foreign companies have
stayed, specially in Tunisia (it see Table 1). Of course, the increasing
competition by a limited volume of resources of IED available that exert the
countries of East Europe, Latin America and the Southeast of Asia constitutes
another negative factor of first magnitude.
Finally,
high indebtedness external of these three countries and, more in general,
imbalances chronic of balance of payments, has be other factor dissuasive for
investors foreign, no matter how hard in the last four years - after the
decision of the Club of Paris to raise the maximum limits of conversion of debt
from the 20 to 30% - Morocco have benefitted from programs of conversion of
debt by investment (with a discount) supported by France (almost 100 million
USS of sovereign debt in November of 1999, which located the total in 435
million USS), Spain (110 million USS after the last one authorization of 40
million USS in September of 2000, although at the moment is suspended) and
Italy (100 million USS)[ 15 ]. The
problems of convertibility of their currencies that could be derived from such
imbalances constitute a risk that tends to drive away many investors.
2.
IMPACT OF ASSOCIATION EUROMEDITERRÁNEA IN THE IED
2.1
economic Impact of the Zone of Free Euromediterránea Commerce
All the quantitative
studies on the effects of the ZLCEM on the economies of the Maghreb[ 16 ] they reach
very similar conclusions. According to its estimations, its impact in
well-being terms would oscillate, depending on the assumptions that become,
between 2.2% and the -0,2% of the GIP (Tapinos and others, 1994), between 2.3%
and the 1.2% (Rutheford and others, 1995), around 0.7% of the GIP (Kébabjian
1995), entre -0,2% and 3.3% Deardorff and others, 1996) and between-0,2%
and -1,5% of the GIP (Tovias 1999). Without embargo, these studies have a
limited value, since they are not able to capture the dynamic effects of
integration and they are based more on supposed than cuestionables (for
example, on the values of the elasticities of import and export) due to the
lack of trustworthy data.
In the short term,
an ample consensus about which the ZLCEM will cause a deterioration of the
trade balance and a loss of income public in the three countries, who will be
translated in a net destruction of uses (specially if he considers that the
Euromediterránea Association supposes the intensification of the programs of
structural adjustment and privatization, with the consequent reduction exists
as large as the public sector). In Graph 2 the degree of vulnerability of each
one of the countries of the Maghreb based on two variables imagines: the level
of commercial protection and the percentage of income public that come from the
collection of tariffs.
Graph 2. Vulnerability to
the Zone of Free Euromediterránea Commerce 
These
three problems - the trade balance, the income public and the use send us to
the IED like possible solution. In any case, it turns out interesting to
observe that in some of the studies the slightly positive impact of the ZLCEM
on the growth improvement of spectacular form when the assumption of a
significant increase of the IED is introduced[ 17 ]. In fact,
the increase of the IED flows is mentioned in most of the studies like one of
the waited for dynamic benefits of the ZLCEM. Peculiarly, these expectations
are explained remembering the experience of the adhesion from Spain and
Portugal to the UE at the end of the Eighties and the integration of Mexico in
the GASOLINE in second half of the Nineties[ 18 ],
ignoring the essential differences that are between the federalist model of
"deep" integration of the UE (with common policies and institutions,
harmonization of the legislations, a true single market, structural bottoms
proportionally much more significant that the predicted bottoms of cooperation within
the framework of the Euromediterránea Association and even an economic and
monetary unit) and "the librecambista" model imposed by the countries
of the UE to their partners of the South and the East of the Mediterranean in
the first case, and the fact that GASOLINE indeed contributed considerably to
improve the advantages of location of Mexico, since opened an enormous very
next market to him that until then it was closed, something that does not
happen in the case of the ZLCEM.
In fact, these expectations
are not justified by the specific characteristics of the ZLCEM, that actually
does not create any truely new economic opportunity for the countries of the
Maghreb with respect to effective the commercial agreements and of cooperation
from 1976, but that imposes loaded a deep and abrupt economic transition to
them of uncertainties (by the way, a word that scare the investors). It does
not give access to new markets nor it establishes new fiscal or financial
incentives. Since section 1 has been indicated before (.2), at the most the
company/signature of los Agreements of Euromediterráneos Association by
the countries of the Maghreb comes to confirm its permanent commitment with the
policies of adjustment and liberalization that take applying from mid the
Eighties, "anchoring" determined structural reforms of its markets,
which would have to give to the foreign investors a greater degree of security.
This way, forehead to the rest of the world reinforces the credibility of its
economic policies in principle, reducing the risk premium country for the
foreign investors (but without necessarily improving the yield of the
investments like so: it see section 2.3).
2.2
Impact on the IED necessity
For the countries
developing in general, the future prosperity will depend largely on its
capacity to mobilize foreign saving: in surroundings of libre market and
little will to increase the cooperation flows considerably, and in the
Mediterranean context, this mean to establish mechanisms for, through the IED,
to transfer the excedentario saving of the populations aged of the north to the
emergent economies of the south (and to not only transfer workers of the young
populations of the south to the economies of the well-being of the north). One
is the "more natural and less problematic solution" (Reiffers and
Tourret 2000) to the imbalances and the economic and demographic
interdependence between the two shores of the Mediterranean. Therefore, one of
the main challenges that will have to confront during the process of economic
transition in which they are immersed consists of attracting a permanent flow
of deprived foreign investments. In fact, many authors consider that the
behavior of the IED will be one of angular stones of the success or the failure
of the ZLCEM (Mahjoub and Zafrane 1999, p. 4). Thus, according to Kébabjian
(1995) a previous requirement for the economic success of the liberalization
strategy is that a true one takes place " big bang in the behavior
of the foreign investors "that gives rise to a massive injection of
financial resources in these economies, whereas Ghesquiere (1998, p. 22) it
assumes that "in last instance, the success in the Agreements [ of
Association ] depends on its capacity to generate a critical mass of foreign investment
in the intensive sectors in manual labor oriented towards the export".
Actually, whereas
the costs of the adjustment induced by the zone of free change are certain and
immediate (what the free European products of tariffs in arriving at the
markets of the Maghreb take), the benefits are more uncertain and in the mid
term, and depend largely on the behavior of the IED:
- in macroeconomic
terms, the IED will be a crucial element to resist the foreseeable worsening of
the trade balance in the short term as a result of the liberalization and to
extend the fiscal base to compensate the losses of income by tariffs of State;
- in
political terms, the IED has a legitimador paper very important that to carry
out so that the Euromediterránea Association is politically viable, like
stimulating of the creation of use and the modernization of the economies of
the South and the East of the Mediterranean.
2.3
Impact on the determining factors of the IED
The opening of the
markets of manufactures of the countries of the Maghreb in a relatively brief
period will suppose the aim of the IED of "pick up of markets" whose
main objective consisted of "skipping the tariffs" to accede to the
local markets (by small which outside until now). In fact, in spite of the
significant improvements in regulating and institutional the surroundings that
have taken place years in the last the commercial opening towards the UE can
entail a greater competition of the imports coming from the European countries
like alternative for the new investments. In effect, as a result of the
reduction of the prices that will take place in most of the sectors after the
implantation of the ZLCEM, the nominal yield of the capital it could fall in
the short term (as indeed it happens in some estimations), leading in theory
(yes it is certain that the IED responds to the signals of the market and the
perceived political risk does not vary of significant form) to an exit, and not
an entrance, of IED. Indeed, in agreement with the conventional theory of the
international trade, and specially with the theorem Stolper-Samuelson, the
elimination of commercial barriers makes increase to the real yield of the
relatively abundant factor in a country - that is to say, the manual labor in
the case of the Maghreb- and reduces the real yield of the little factor, in
our case the capital. This it is scene "only ZLCEM" represented in
Graph 1 like point, in which the advantages of location of the countries of the
Maghreb are even deteriorated in greater measurement as a result of the
implantation of the zone of free manufactured product change (giving rise to
which effect of deviation of foreign investment "of the ZLCEM could be
called").
Simultaneously, at
least in the short term it is foreseeable that the implantation of the ZLCEM
causes a serious deterioration of the trade balance, a macroeconomic imbalance
that could put under pressure to the policy of convertibility and stability of
the type of change - a previous condition of the integration of markets and that
normally usually scares to the foreign investors (what it would throw downwards
of the attraction of the IED in Graph 1, as a result of the deterioration of
the surroundings for the investment). In any case, the macroeconomic and
political sustentabilidad of the Euromediterránea Association could be seen it
jeopardize, and the liberalization process to end up being congealed at some
moment as a result of the political pressures. This would not make but increase
the perceived risk to invest in the Maghreb, consolidating a guideline that
perhaps explains little the hopeful flows of IED that have registered these
countries in the last years: by impressive that is the real improvements in
their macroeconomic policy and its enterprise surroundings, any positive impact
on the IED has empalidecido before the perceived political risk as a result of
the social and political evolution.
3.
SCENES OF INCREASE OF THE FLOWS OF IED IN THE MAGHREB
In this
section, two complementary scenes in the context of our frame of analysis of
the attraction for the IED will be analyzed, in which the national authorities
adopt proactive measures to make to their more attractive countries by means of
initiatives of horizontal integration of markets between the countries of the
Maghreb (increasing this way to its advantages of location, scene represented
in Graph 1 by point C) - section 3.1 and reorients the Euromediterránea
Association towards concrete strategies of promotion of the European IED in the
region (scene B, that reflects an improvement of the conditions of the
surroundings) - section 3.3 -. As much one as another scenes, or a combination
of both, would give rise to a "effect of creation of foreign
investment" of the ZLCEM.
In
section 3.2, indirect effect will outline little studied of possible increase
of IED in region (supposing that it takes place and that go preceded of an
integration of markets between the countries of the Maghreb), that is to say,
the tendency of the foreign investors to concentrate in some determined zones
of a country or (what it seems more probable in the case of the Maghreb) of a
whole region, which could go in damage of the other zones. Finally, in the
conclusions the possible guidelines of specialization of the different
countries from the Maghreb in different types from IED based on their
respective productive structures are sketched.
3.1
subregional integration as necessary complement of the Euromediterránea
Association
Since it has been
reiterated in Literature, so and as the ZLCEM is defined will give rise
inevitably to the creation of a system of "radial" economic joint
("hub and spokes")[ 19 ], which said
otherwise it means that the North-South will contribute to consolidate the
guidelines of economic dependency that characterize the economic relations in
the Mediterranean region, even reducing plus the incentives to invest in the
countries of the Maghreb. A system of "radial" joint defines by a
high concentration of the economic activity - and the investments in the
"axis" or center, from which the companies to each other distribute
to their products to several markets peripheral satellites or barely related.
UE as so it offers excellent conditions to be elevated in axis of a system of
this type, because it constitutes an economic space of great dimensions within
as the companies enjoy the free circulation of merchandise, services, capitals
and workers without no significant political risk. In addition, thanks to the
communitarian policy of creation of zones of free developing commerce with
countries (Association Euromediterránea, Mexico, South Africa, and in
negotiations with Mercosur, in addition to the evolution towards this model of
the relations with the 72 countries of Africa, the signatory Caribbean and the
Pacific of the Agreement of Cotonou, successor of the Agreements of Lomé), from
the UE the companies have access to the markets of a great developing number of
countries. Caeteris paribus, this situation as much creates incentives
against the direct foreign investment in the countries developing of the
companies established in the UE (as long as the applied types of protection to
the imports coming from the UE continue being lower than the types of
protection on the imports coming from other countries of the South and the East
of the Mediterranean) like of the companies of third countries (that will have
to settle down within the zone of free commerce with object to avoid the
deviation of commerce induced by the discriminatory tariff liberalization in
the countries of the South and the East of the Mediterranean, but that they
will prefer to do it in the countries of the UE for power from there acceding
simultaneously to all the markets).
In order to elude
this perverse dynamics, the only alternative consists of complementing
commercial integration the North-South with solid initiatives of South-south
integration horizontal that allow to reach to their markets a critical mass
sufficient to attract investments. One is then a requirement to restore some of
the advantages of location of the countries of the Maghreb in terms of size of
market and to advance towards scene C of Graph 1[
20
].
In the case of the
Maghreb, the precedent of the project of Union of the Maghreb Arabe created in
1989 exists, and Morocco and Tunisia are arranged to impel a Zone of Free
Commerce in the region[ 21 ], but the political
obstacles - the conflict of the Sahara and the fear to the extension of the
guerrilla islamista- have been until now unsalvable, specially with regards to
Algeria, that physically is in the heart of the region. So that the concrete
profits of magrebí economic integration have been very small (Martín 1999, pp.
34-36), until the point of which the border between Morocco and Algeria is
closed from 1994. This failure is reflected with dazzling clarity in the low
volume of intraregional commerce with respect to total the commercial flows of
the countries of the Maghreb: less of 4% (of course, without taking into
account the flows from contraband through the borders, that in some sectors can
be significant), a number that has remained suspended during last the thirty
years.
Although as much
analysis of intensity of commerce among them (with indices enough elevated in
all cases, safe for intensity of exports of Morocco) as the predictions of a
gravity model seem to indicate that commerce intraregional in Maghreb finds
either next or even over his potential theoretical (that is to say, to the
weight relative of each country in the international trade and to the volume
that corresponds to the size of its economies and their geographic proximity),
which some authors have interpreted as a lack of margin for a significant
increase of the intramagrebí commerce (Escribano and Jordán 1999), the present
levels are not nor much less consistent with a significant increase of the
flows of IED in the region, that, since it has been indicated, is a factor of
fundamental success for all the project of the ZLCEM. In addition, the use of
historical data does not turn out too useful to evaluate the perspective
associated with a project that to be carried out will cause a deep structural
change in the economies of the participant countries, as it happens to the
ZLCEM.
But so
that this subregional economic dynamics receives the impetus necessary to take
advantage of totally the new surroundings created by the ZLCEM is required,
besides to eliminate the present political obstacles and of commercial policy
the intraregional commerce (that prevents a "normalization" of the
commerce between the countries of the zone), to surpass physical restrictions
to the development of the intraregional commerce as they are the logistic
deficiencies of all type (specially the infrastructures of transport and
communications). This it is a scope in which bottoms MEDA can play a role very
important.
3.2
the paper of the agglomeration economies
In this context,
even supposing that indeed they increased the flows of IED towards the
countries of the Maghreb (what is much supposition), would consider an
important subject as extremely is the geographic distribution of that IED
within the region. Mainly if the creation of a zone of free commerce between
each one of the countries of the Maghreb and the UE go accompanied of
integration between its own markets, the dynamics of integration could give
rise to a concentration of the economic activity (and specially of the IED)
around a reduced number of "investment poles" in which the foreign
companies could benefit from positive externalidades. This would cause a space
polarization of the factors of production and the rent and, with it, an unequal
distribution in the region of the benefits and costs of the ZLCEM.
Phenomenon that
explains this nonhomogenous distribution of the economic activity is
denominated "economies of agglomeration", that acts against the real
convergence between different regions from an integrated economic space by
means of a autoalimentado process of accumulation of wealth in agglomerations
of greater human and technological capital which or they enjoy stocks of
capital and in which the investors benefit from positive externalidades or the
access to resources and productive services (in the countries developing, these
economies of agglomeration can contribute to a significant reduction of the
costs of transaction in those zones where or industrialist exists a woven
minimum and certain infrastructures). The agglomeration economies have been
object of analysis in the case of the European single market and from the
United States to the light of the new theories of the international trade in
conditions of imperfect competition and of the models of endogenous growth[ 22 ], but practically they have been ignored
until now in the economic analysis of the processes of integration between
developed countries and countries developing[ 23 ] and, in individual,
the case of the ZLCEM and the possible projects of horizontal integration
between the countries of the Maghreb.
The location of
these poles of investment comes determined by the geographic proximity to the markets
(that is to say, the transport costs), the physical availability of capital
human, infrastructures and services of support to the companies and, last, but
not less important, the regulatory frame and the legal security (mechanisms of
fulfillment of contracts and rights of property). Given to the size of the
markets, the level of relative development and the perspective of growth of the
three countries of the Maghreb that we are considering, it is very little
probable that the region can accommodate more than one of these industrial
poles.
If we took into
account a) the size from its respective national markets, b) the just fear of
the investors to the reversibility of any process of integration between the
countries of the Maghreb (combined, these two factors they practically exclude
Tunisia like possible pole of regional investment, in spite of being the most
modern economy of the region), c) the advance in the application in the
Agreements of Association with the UE (the Agreement with Algeria follows sunk
in a difficult process of negotiation, without it has still been signed), and
d) the progresses in the reforms of the regulatory frame and the programs of
structural adjustment, Morocco it seems to be the country that more
probabilities it has to become pole of attraction of the investments in all the
region.
In individual, the
region better located seems to be the economic axis Kenitra-Rabat-Casablanca,
that counts on two great ports (Kenitra and Mohammedia), an important financial
center (Casablanca), a certain industrial weave (Casablanca by itself
concentrates 40% of the manufacturing plants of Morocco) and the accomplishment
of the project of construction of a new freeway throughout the Mediterranean
coast that crosses las provinces of the Moroccan north (from Tánger to
Uxda, in the border with Algeria) that will connect that axis with the other
two countries of the region (financed partly with European bottoms).
Of course, this
preliminary evaluation does not replace the necessary detailed investigation of
the possible guidelines of space distribution of the IED within a possible zone
of free magrebí commerce, that must consider in any analysis of this question.
That yes, contributes a new explanatory element to understand the interests and
attitudes of each one of the countries of the region before intramagrebí
commercial integration.
3.3
an Association for the investment
But nowadays to
attract IED demands something more than to create the conditions adapted for
its yield. In extremely competitive international surroundings, it is necessary
to adopt measures of active promotion, and the Euromediterránea Association
offers the suitable channel to do it. But for it it is necessary to equip it
with content in this respect, which until has not been made now. Although the
Euromediterráneos Agreements make reference to the right of establishment (that
is to say, to the freedom of IED) of the companies in general terms, does not
exist no commitment nor concrete term in this respect (in fact, it is a
question that will have to be decided by the bilateral Councils de
Association). In the same line, the Euromediterráneos Agreements do not
establish either the national treatment to the foreign investors[ 24 ]. This it
means that it is not possible to wait for no additional improvement of the
surroundings for the investment of the Euromediterránea Association like so
beyond the "anchorage" of the economic reforms to which or has been
alluded to (whose effects basically or have been exhausted). In order to
compensate this lagoon, a new approach is needed the question of the promotion
of investments of the Euromediterránea Association within the framework,
turning it an authentic "Association for the investment".
Even that seems to
exist conscience of it (the Conference on investment of London of March of
1997, the Conference on markets of capitals of London of March of 1998 and the
Euromediterránea Conference see, for example, on investments of Lisbon of March
of 2000), until now has had one more a dimension than nothing declaratory, when
what they are needed they are political commitments and structural measures
that contribute to canalize the IED towards the countries of the Maghreb. Some
concrete actions possible that certainly they would contribute to promote to
the countries of the Maghreb as attractive destinies for the IED and to
facilitate an effective mobilization of this one would be the following ones:
- confidence: to develop to the political dimension and of
security and the cultural and social aspects of average the Euromediterránea
Association like impelling the political stability, increasing the transparency
and to fortify the independence of the judicial systems of the countries of the
South and the East of the Mediterranean;
- financing: the creation of a Development bank
Euromediterráneo (in the same line of the European Bank for the Reconstruction
and the Development) that would finance projects of risk capital, would act as
center of information dissemination and would support the investment projects
(an idea that already were contemplated when the Euromediterránea Association
was negotiating, but that finally was not able to mobilize the necessary
resources);
- information and promotion: the organization of a periodic
conference specifically dedicated to the investments in the Maghreb under the
auspices of the UE and the optimization of the data bases on investments that
already exist;
- guarantee: the creation of an Agency of Guarantee of
Euromagrebí Investments that covers the noncommercial risks with the European
investors in the region[ 25 ];
- planning: to elaborate a list of control of the obstacles
to the IED and the actions that must carry out the countries partners of the
Maghreb in this scope (a species of "road map" similar to that is
elaborated for the countries candidates to the adhesion to the UE) with
concrete terms and scheduled inspections.
Without doubt, these
measures would contribute to improve the surroundings for the IED in the
countries of the Maghreb and, therefore, to advance towards scene B in Graph 1.
4.
CONCLUSIONS
In any case, the
logic of the present process of Euromediterránea Association leads to an
intensification of the competition to attract foreign investments between the
three countries of the Maghreb by means of the supply of location advantages
(fiscal exemptions, tariff concessions, free transference to the foreigner of
the dividends and currencies, cheap energy, relaxation of the labor
legislation, etc.).
In this context, in
the future foreseeable only Tunisia, in all the region, it seems able to offer
a competitive combination of certain sociopolítica stability and legal
surroundings (that is to say, under risk), levels surely adapted of wages,
qualifications and productivity (that is to say, elevated yield) and,
therefore, the potential to advance towards a IED of greater quality in sectors
of greater added value, which could possibly lead to a process maintained of
industrialization and its integration in the chains of value of the
multinational companies. In fact, in agreement with the official data the
foreign companies already concentrate one third part of the Tunisian exports.
On the other hand,
Algeria does not seem in conditions, in the present circumstances, to attract
significant volumes of foreign investment, if the one is excluded that
continues generating the operation of the opportunities in the sector of
petroleum and the gas and the precise operations of privatization of great
public companies or the concession of services public like the second license
of anticipated telephony GSM for the 2002.
This seems to lead
to a horizon of investments in the Maghreb in which Algeria is formed like
power power station of the region (and of all suroccidental Europe), Morocco
choose to become pole of investment for the IED oriented to the pick up of the
markets of the region (as long as advance in economic integration among them)
and Tunisia will be due to deepen in its competitive strategy like attractive
location for the IED in search of efficiency of companies that look for a cheap
and relatively qualified manual labor next to the European market to integrate
it in their chains of production on world-wide scale (or at least on European
scale). This profile seems to see itself corroborated by the Report on Africa
Competitiveness (2000), that shows that Tunisia is the most competitive country
of the continent, while Morocco occupy promising a fifth seat (and the first
place of the ranking with regards to the improvements experienced between 1996
and 1999). Algeria was discreetly and significantly outside the report.
The implications of
policy of a situation as this is the following ones. To national level,
considering which has been said before on the determinants of the IED, the
first recommendation for any country of the Maghreb must go in the sense to
invest in resources able to attract IED, that is to say, human capital (in
individual, the low educative level of the Moroccan manual labor[ 26 ] it constitutes one of the main threats
to its perspective to become a pole of regional investment, and Tunisia must
put the emphasis in the qualifications of manual labor if it wishes that its
industrial structure evolves towards processes of greater added value) and
infrastructures (in individual, transports and telecommunications). Equally
important, from this point of view, it is to maintain the credibility of the
orthodox macroeconomic policies applied from end of the Eighties and to
complete the modernization of the legal and regulatory surroundings (with
object to make it more attractive for the investment). In this respect, the key
is in the independence of the legal and judicial system with respect to the
political swings, which is only possible in strict sense within the framework
of a process of democratization of these societies.
In any case, the
political and social stability is another key factor for the IED (and, in the
case of Algeria, surely it is what explains the meager flows of IED), but is a
variable on which the degree of control of the national authorities often is reduced,
because indeed it is the own nature of the governing regimes the one that is in
the base of that instability. Yet, an evident recommendation consists of
fortifying the social safety nets and giving priority to the fight against the
poverty - what it could be incompatible with the programs of permanent
structural adjustment -, since it would undermine the broth of social and
political culture of radical the islamistas groups and would contribute to
palliate the awaited negative social consequences of the ZLCEM, reinforcing its
political viability.
Finally, since the
low levels of foreign investment have seen than compensated more by the volume
of the flight of capitals (specially in Morocco and Algeria), nothing seems
more logical that to promote the repatriation of the deposited national
capitals abroad: the World Bank has considered that the accumulated stock by
the flight of capitals ascends to 11.000 million USS altogether[ 27 ]. These capitals could suppose a
contribution very important to overwhelm the deficit with financial resources
that undergo all the countries of the region.
At regional level,
the countries of the Maghreb would have to consider high-priority to promote
regional integration among them with object to avoid the consolidation of a
system of "radial economic joint" and to reach the critical mass
necessary to attract IED of "pick up of markets" and to take
advantage of the accumulation the norms of origin among them granted by the UE.
Nevertheless, this could give rise to agglomeration economies that favored to a
concrete country of the region in damage of the others, which could undermine its
own political viability. Perhaps this, together with the political obstacles
that regional economic integration has had to confront until now, suggests is
more realistic to begin by more modest steps like the liberalization of the
interchanges in certain concrete sectors. In any case, the elimination of the
barriers of all type to the commerce intraregional (or within the framework of
bilateral, regional or multilateral initiatives - under protection of the
clause of nation the more favored -) will be crucial for all the countries of
the region if they want to make his latent comparative advantages totally.
Finally, since an
important aspect of any process of economic integration is the compatible
development of norms and technical rules (if noncommon), the countries of the
Maghreb do not seem to have no other real alternative, at this point, that to
be satisfied to the norms of the UE in this scope, by unsuitable which they can
be in some cases in relation to his level of development. So that they would
take a very important step if they were decided to adopt them of way it express
and oriented part of programs MEDA towards projects of support to this effort.
Within the framework
of the Euromediterránea Association, until now the obtained thing in the matter
of promotion of the foreign investment in the countries of the Maghreb it has
been rather little. Now either, if one considers that the IED will be a key
factor of the success or the failure of all the Association, does not seem is
preposterous to attribute a central paper to him in its design. Some of the
possible passages in this direction are quite obvious. The volume of external
debt in the three central countries of the Maghreb has become a one of the main
restrictions for its development, absorbing volume too high of its financial
resources. The recent experience in Morocco shows how the programs of reduction
of the debt can be a useful instrument to canalize IED towards certain sectors,
facilitating the arrival of new foreign investors. This experience would have
to be extended and to be talked back in other countries.
In order to avoid a
pernicious competitive race to grant incentives to the investment more and
more, certain mechanisms of coordination of the incentives between the three
countries of the Maghreb would have to settle down, establishing maximum limits
(in necessary case, modulated for the diverse types of incentives and levels of
development of each zone, since it becomes at communitarian level). This is
something that would benefit to all the participant countries, reducing the
cost to attract the IED that as much needs to each country.
Also there is much
to do in the scope of the institutional cooperation of all the participants in
the Euromediterránea Association with regards to the promotion of investments,
for example by means of the creation of an Agency of regional Guarantee of
Investments, the creation of a better information system on investments for all
the countries of the Maghreb and one better direction of the anticipated
bottoms of cooperation in the Declaration of Barcelona towards measures that
impel the IED directly.
Nevertheless, the
reluctant and erratic behavior of the IED in the countries of the Maghreb
during the last decade - that negative slant to which reference, explained
fundamentally by cultural and political factors has become comes to corroborate
the doubts that the prospectivo economic analysis of the determining factors of
the IED in the Maghreb provokes: the IED in these countries could diminish, and
not to increase, as a result of the implantation of the ZLCEM (in a
"effect of deviation of the foreign investment"), and in best of the
cases the its geographic distribution could favor basically to an only
"pole of investment" in the region, in damage of all the other
economic areas of the Maghreb. As much in a case as in another one, the
macroeconomic and political sustentabilidad of the Euromediterránea Association
could be seen it jeopardize.
But leaving to a side
the fact that the IED insufficiency could give to the fret the project of
Euromediterránea Association yet, this situation raises another question of
great openwork. To to stagger one of premises fundamental of project of
librecambio euromediterráneo - the one of which the opening of markets would
attract foreign investment -, the countries of the Maghreb would have logically
to look for alternative strategies of development noncradles in the surely
irrealista assumption that the opening of markets, ortodoxia macroeconomic and
the submission to the interests of the developed countries are conditions
sufficient to generate a flow of foreign investments in which to found a growth
process.
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FOREIGN DIRECT
INVESTMENT INTO
Iván Martín
One of
the main expected benefits from the establishment of the Euromediterranean
Partnership
in 1995 Southern between the European Union and 12 and
sizeable increase in foreign direct investment into the to
latter. Moreover, FDI is to key for Link the
success of the overall development strategies implemented in
those countries in the last 15 years,
and to social phase the economic and costs of the future Euromediterranean
Free Trade Area.
However,
five years to thereafter this FDI increase there are not eats forward in the
(
in Maghreb countries which allows
The
conclusion is that only market integration between the three countries and
proactivates FDI-
promoting strategies complementing market liberalisation within
the framework of the
Euromediterranean
Partnership could boost FDI levels in the region.
* A first rough
draft of this article was presented/displayed in the First Social Mediterranean
and Political Research Meeting, celebrated from the 22 to the 26 of March of
2000 in the European University Institute of Florence. It wanted to be thankful
to the Prof. Alfred Tovias, of the Hebrew University of Jerusalem, by its
valuable discussion of my communication in one of the work groups of this
conference, as well as to the Prof. Samiha Fawzi, of the for Egyptian Centre
Economic Studies, by its additional commentaries. My gratefulness also to the
Prof. Mohamed Lahouel, of the Université Tunis III, to share with me its
investigation on this same subject (it see the bibliography), as well as to the
Prof. J. of the Church, the Complutensian University of Madrid, by its
opportune practical suggestions. Of course, only the author is responsible for
all the deficiencies of the article. For any consultation related to this
article, to go to ivanmartin@retemail.it is.
[ 1 ] For an analysis of the flows of resources
between the Countries of the South and the East of the Mediterranean and the
European Union - favorable to this last one in about 30.000 million annual USS
-, it see Martín (2001b).
[ 2 ] Although in
geographic terms the region of the Maghreb also includes Libya and Mauritania,
in this article I will denominate Maghreb to the three countries of the central
Maghreb: Algeria, Morocco and Tunisia.
[ 3 ] In addition to
the Provisional Agreement of Association with the National Authority Palestine,
the only Agreements of Association which they have taken effect until now are
the Agreement with Tunisia (1 of March of 1998), with Morocco (1 of March of
2000) and with Israel (1 of June of 2000), in addition to the Agreement of
Association with effective Turkey from 1964 (from 1996, a customs union between
this country exists and the UE). The Agreement of Association with Jordan
already has been signed, but he is pending of ratification.
[ 4 ] The way in which
the economic theory predicts that the elimination of tariffs and the consequent
increase of the imports can contribute to the development is by means of the
reduction of the prices of the insumos for the potentially competitive sectors,
an increase of the competition that must confront the local companies and the
transference of technology, with the consequent increase of the productivity.
But it estimates a massive reassignment of the productive resources between the
different sectors from the economy, that necessarily has to have high costs
(the denominated costs of adjustments). For a discussion of the theoretical
aspects of the zones of free commerce between developed countries and countries
developing, it see Martín (2001a).
[ 5 ] it deals with a basically European option. The
Euromediterránea Association was a project negotiated and designed within the
European Union that later appeared to the countries partners of the South and
"the invited" East of the Mediterranean to the Conference of
Barcelona (Libya was excluded) so that they authenticated it.
[ 6 ] It see, for
example, Souleyman (1978). No I will enter here the question of the supposed
relation of existing causality between the IED and the economic growth in the
countries developing (for a critic of the "outlandish affirmations on the
positive effects" of the IED in economic Literature, it see Rodrik 1999,
p. 37). Therefore, I will assume the deseabilidad of the IED, as it is
perceived at the moment by the political people in charge of the own countries
developing.
[ 7 ] In Morocco, the
Law of marocanisation of the 1973 companies, for example, it prevented
that the foreign investors had more of 50% of the share capital of any company,
a restriction that was only abolished with the new Letter of Investments
approved in October of 1995. In Algeria, the foreign investments were only
assimilated to the nationals by means of the Code of Investments of 1993,
except in some strategic sectors, and in any case they follow subject
administrative authorization. The Tunisian Code of Investments goes back to
1994, and imposes forts restrictions in the sectors of the distribution, the
finances, the mining, and the energy, that historically has absorbed two third
parts of the IDE in this country, but even grants very generous tariff fiscal
exemptions and in other sectors, mainly in the case of the foreign investment off-shore
oriented to the export (that is to say, when it is exported more of 80% of
the production).
[ 8 ] The Algerian sector of petroleum and
the gas were opened to the foreign investment in 1991, in spite of maintaining
the monopoly of the state company Sonatrach. Since then, 24 foreign companies
have signed 45 contracts of operation, exploration or development.
[ 9 ] In the case of the textile industry of the
main industrial center of
[ 10 ] For econométrica
evidence in this respect, it see Petri (1997), where a regression model is
considered using determining like the size of the economy, level of
development, the human dowry of capital, the dowries of resources and the
macroeconomic stability, as well as a measurement of the political risk.
[ 11 ] It see the UNCTAD
(1998, pp. 106-108). It see also the revision of Literature on the determining
factors of the IED in Deardorff and others (1996), Section III.
[ 12 ] Véanse the
results of the survey on the factors of attraction of the carried out IED by
Foreign Investment Advisory Service (FIAS) analyzed in Michalet (1997, pp.
46-47).
[ 13 ] Most of the academic debate and
policy on the determining factors and the flows of IED is based on numbers and
studies of cases relative to multinational companies, since those are the data
gathered and analyzed by the international organisms, specially the UNCTAD.
Without embargo, the greater positive effects of the IED in most of the
countries developing, and particularly in the Maghreb, come from medium
companies of other countries developing of greater size (some South Korean
companies made some great investments in the region, as the plant of Daewoo in
Morocco, until the financial crisis of 1997) or of developed countries emergent
(like Spain, Portugal or Italy).
[ 14 ] The transport of a container from
[ 15 ] Normally, these programs entail some
type of concession for the investing potentials. In the case of France, for
example, these advantages are equivalent approximately to a subvention of 10%
for the French investors. In relation to the program of Spanish interchange of
debt, it see Montalvo (1998, pp. 109-115).
[ 16 ] Tapinos, Cogneau,
Lacroix and Of Rugy (1994), Rutheford, Rutström and Tarr (1995), Kébabjian
(1995), Deardorff, Brown and Stern (1996), and Tovias see (1999). The five talk
about the economies of Morocco and/or Tunisia (only the last one also includes
Algeria).
[ 17 ] For example, in
Kébabjian (1995) a duplication of the IED is translated in a positive impact on
the GIP of 7%. Nevertheless, Deardorff and others (1996, p. 30), after to have
recognized the little predictive value of their methods of estimation, reaches
the opposite conclusion: not even a duplication of the flows from IED to
Tunisia would contribute probably to induce a significant increase of the
well-being.
[ 18 ] For an analysis of those cases,
Blomström and Kokko see (1997, Section 3).
[ 19 ] Kowalczyk and Wonnacott (1992) were
first in developing an economic model of the dynamics of a system of
"radial" joint for the GASOLINE.
[ 20 ] An example of IED of "pick up of
markets" can be extremely enlightening in this respect. North American
multinational Procter & Gamble counts on a plant of production of diapers
in Mohammedia, in Morocco, in which it anticipates to invest 100 million USS.
According to its calculations, as opposed to the 10 million USS that exports at
the moment, the elimination of the commercial barriers with Algeria and Tunisia
could suppose the immediate duplication of the exports and reach the 50 million
USS to the year in the 2004.
[ 21 ] De fact,
in March of 1999 signed an agreement of free commerce among them that has still
not taken effect, returning to renew their commitment to create a zone of free
commerce that also includes to
[ 22 ] It see Krugman (1991). It follows the
debate open on if the commercial adjustments caused by the processes of economic
integration as such foment the real convergence between the participant regions
or contribute to exacerbar the economic differences among them.
[ 23 ] Venables (1999) tries to formalize this
phenomenon at a level of abstraction very elevated starting off of the relative
dowry of factors of the countries that integrate a zone of free commerce. Its
conclusion is that the countries developing surely will obtain more benefits in
an agreement of integration with a developed country that with other countries
developing (unless it is developed countries much less), which in the case of
the Maghreb would give a rational sustenance to the strategy to reinforce the
commercial dependency with respect to the UE in damage of the creation of a
magrebí economic space.
[ 24 ] It see Table 1.
So and as they indicate Hoekman and Djankov (1995, pp. 20-21), both are central
elements in the European Agreements signed between the UE and the countries of
Central and Eastern Europe. The GASOLINE also contemplates to a "complete
system of norms and obligations in the matter of foreign investment"
(Lahouel 1999, p. 17).
[ 25 ] It see Sabkani
(1998, p. 22) for more details on a proposal of creation of an Agency of
Guarantee of Euroárabe Investments and other measures for the creation of a
euromediterráneo financial space.
[ 26 ] The illiteracy
affects 57% of the adult population (World Bank 1999). For a social situation
analysis in Morocco, it see Martín (2000).
[ 27 ] Nevertheless,
other estimations aim much more at important volumes: 37.000 million USS only
in Algeria according to some official sources, and more than 50.000 million USS
in Morocco according to the political opposition, a number superior to its GIP.
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