Fight against poverty in rural areas: European Union finances Morocco

  • 27 November 2012

«The unstoppable process of globalization that the Mediterranean region faces calls for special attention to be devoted to the state of the countryside. Rural poverty, low expectations of an uncertain future, widespread unemployment, the more than 30% rise in the price of basic foodstuffs and the urge for democracy have triggered an unexpected process of change in the most strongly entrenched political regimes in the Mediterranean. The causes of the crisis are complex and the ramifications are difficult to predict: organized civil society was not at the root of the revolt, but it has the key task of steering reforms and new power structures towards public policies that closely reflect the needs that local populations have been voicing for many years».

This is the introduction of a European Economic and Social Committee study on rural development and employment in the Euro-Mediterranean region.

«The EU should set an example in this regard by opting for a new trade model in which the social and environmental aspects are taken as seriously as the economic aims. Trade instruments will not be enough if Europe is to contribute to the process of democratic transformation under way in the southern Mediterranean: backing must be given to economic reforms at domestic level geared to the sustainable development of employment. The rural economy on both sides of the Mediterranean is strongly affected by unemployment, particularly among women and young people. One of the objectives of any employment policy in rural areas must necessarily have to bring women and young people onto the labour market through specific, bold initiatives».

Brussels, according to this European Economic and Social Committee study, has allocated 25 million of euro to the fight against poverty in rural communities in Morocco. especially the European Union finances the second phase of the project “National Initiative for Human Development” (2011 -2015) which propose to support the fight against poverty in rural areas of the country, job insecurity, youth unemployment (now reached 30%) and social inequalities (especially in urban areas).

In Morocco, in fact -according to the report of the Economic and Social Committee- «65% of the unemployed are first-time job-seekers, for whom entering the labour market is becoming increasingly difficult in spite of the role played by the public sector which however is displaying signs of saturation as a source of employment. The informal economy absorbs many young people coming from the countryside, who also find work as street vendors, in repairs and in building. Agriculture employs 8.5 million people in spite of a downward trend which has gathered momentum in recent years».

European aid is inscribed on the heels of a previous European program (64 million of euro) implemented with the cooperation of Germany and Belgium and a loan of $ 300 million provided by the World Bank.

EU Neighbourhood Policy Commissioner Stefan Fule says that this initiative «has unquestionably set in motion development and strengthened local government in the most disadvantaged areas of the country», and the Brussels action aims «to significantly reduce poverty. The measures focus on increasing the amount of investment and the quality of the social services available, as well as bringing in more revenue for rural populations and greater participation by women and the young in the development process».

Cyprus

  • 6 November 2012

Geography:

                                       

–          Location: Middle East. Cyprus is an island in the Mediterranean Sea, and at the south of Turkey.

–          Total area: 9,251 km2

–          Capital: Nicosia

–          Natural resources: copper, pyrites, asbestos, gypsum, timber, salt, marble, clay earth pigment

–          Natural hazards: moderate earthquake activity; droughts

–          Environment current issues: water resource problems (no natural reservoir catchments, seasonal disparity in rainfall, sea water intrusion to island’s largest aquifer, increased salination in the north); water pollution from sewage and industrial wastes; coastal degradation; loss of wildlife habitats from urbanization

 

Demography:

 

–          Population: 1,138,071 (July 2012 est.)

–          Median age: 35.1 years

–          Population growth rate: 1.571%

–          Birth rate: 11.44 births/1.000 population

–          Death rate: 6.48 deaths/1.000 population

–          Urban population: 70% of total population

–          Rate of urbanization: 1.3% annual rate of change

–          Ethnic groups: Greek 77%, Turkish 18%, other 5% (2001 census)

–      Languages: Greek (official),Turkish (official),  English

–          Religions: Greek Orthodox 78%, Muslim 18%, other 4%

–          Literacy rate:  97.6% (male: 98.9%, female: 96.3%).

 

Government:

 

–          Government type: Republic

–          Independence: 16 August 1960 (from the UK);

Note: Turkish Cypriots proclaimed self-rule on 13 February 1975 and independence in 1983, but these proclamations are only recognized by Turkey.

–          Constitution: 16 August 1960

note: from December 1963, the Turkish Cypriots no longer participated in the government; negotiations to create the basis for a new or revised constitution to govern the island and for better relations between Greek and Turkish Cypriots have been held intermittently since the mid-1960s; in 1975, following the 1974 Turkish intervention, Turkish Cypriots created their own constitution and governing bodies within the “Turkish Federated State of Cyprus,” which they then called the “Turkish Republic of Northern Cyprus (TRNC)” when the Turkish Cypriots declared independence in 1983; a new constitution for the “TRNC” passed by referendum on 5 May 1985, although the “TRNC” remains unrecognized by any country other than Turkey.

–          Suffrage: universal.

 

Economy:

A former British colony, Cyprus became independent in 1960 following years of resistance to British rule. Tensions between the Greek Cypriot majority and Turkish Cypriot minority came to a head in December 1963, when violence broke out in the capital of Nicosia. Despite the deployment of UN peacekeepers in 1964, sporadic intercommunal violence continued forcing most Turkish Cypriots into enclaves throughout the island. In 1974, a Greek Government-sponsored attempt to seize control of Cyprus was met by military intervention from Turkey, which soon controlled more than a third of the island. In 1983, the Turkish Cypriot-occupied area declared itself the “Turkish Republic of Northern Cyprus” (“TRNC”), but it is recognized only by Turkey. The election of a new Cypriot president in 2008 served as the impetus for the UN to encourage both the Greek Cypriot and Turkish Cypriot communities to reopen unification negotiations. In September 2008, the leaders of the two communities began negotiations under UN auspices aimed at reuniting the divided island. The talks are ongoing and the leaders continue to meet regularly. The entire island entered the EU on 1 May 2004, although the EU acquis – the body of common rights and obligations – applies only to the areas under the internationally recognized government, and is suspended in the areas administered by Turkish Cypriots. However, individual Turkish Cypriots able to document their eligibility for Republic of Cyprus citizenship legally enjoy the same rights accorded to other citizens of European Union states.

The area of the Republic of Cyprus under government control has a market economy dominated by the service sector, which accounts for four-fifths of GDP.

Tourism, financial services, and real estate are the most important sectors. Erratic growth rates over the past decade reflect the economy’s reliance on tourism, the profitability of which often fluctuates with political instability in the region and economic conditions in Western Europe. Nevertheless, the economy in the area under government control has grown at a rate well above the EU average since 2000. Cyprus joined the European Exchange Rate Mechanism (ERM2) in May 2005 and adopted the euro as its national currency on 1 January 2008.

An aggressive austerity program in the preceding years, aimed at paving the way for the euro, helped turn a soaring fiscal deficit (6.3% in 2003) into a surplus of 1.2% in 2008, and reduced inflation to 4.7%. This prosperity came under pressure in 2009, as construction and tourism slowed in the face of reduced foreign demand triggered by the ongoing global financial crisis. Although Cyprus lagged behind its EU peers in showing signs of stress from the global crisis, the economy tipped into recession in 2009, contracting by 1.7%, and has been slow to bounce back since, posting an anemic growth rate of 1.0% in 2010. The economy experienced no economic growth in 2011.

Serious Cypriot financial sector problems surfaced in early 2011 as the Greek fiscal crisis and euro zone debt crisis deepened. Two of Cyprus’s biggest banks are among the largest holders of Greek bonds in Europe and have a substantial presence in Greece through bank branches and subsidiaries. A liquidity squeeze is choking the financial sector and the real economy as many global investors doubt the Cypriot economy can weather the EU crisis. Cyprus’s borrowing costs have risen steadily because of its exposure to Greek debt. The budget deficit is on the rise and reached 7.4% of GDP in 2011, a violation of the EU’s budget deficit criteria – no more than 3% of GDP. In response to the country’s deteriorating finances and serious risk of contagion from the Greek debt crisis, Nicosia is promising to implement measures to cut the cost of the state payroll, curb tax evasion, and revamp social benefits.

 

Economy of the area administered by Turkish Cypriots: The Turkish Cypriot economy has roughly half the per capita GDP of the south, and economic growth tends to be volatile, given the north’s relative isolation, bloated public sector, reliance on the Turkish lira, and small market size. The Turkish Cypriots are heavily dependent on transfers from the Turkish Government. Ankara directly finances about one-third of the Turkish Cypriot “administration’s” budget. Aid from Turkey has exceeded $400 million annually in recent years. The Turkish Cypriot economy experienced a sharp slowdown in 2008-09 due to the global financial crisis and to its reliance on British and Turkish tourism, both of which declined due to the recession. The Turkish Cypriot budget deficit also deteriorated in 2009 due to decreased state revenues and increased government expenditures on public sector salaries and social services. The Turkish Cypriot economy declined about 0.6% in 2010.

 

–          Currency : Euro

–          GDP (Gross Domestic Product): $24. 95 billion (2011 est.)

–          GDP-per capita: $29,400 (2011 est.)

–          Real growth rate: 0.5% (2011 est.)

–          Unemployment rate: 7.7% (2011 est.)

–          Public debt: 65.8% of GDP (2011 est.)

–          Inflation rate: 3.5% (2011 est.)

–          Central Bank discount rate: 1.75% (31/12/2011)

 

Production:

–          Agriculture : citrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese

–          Industries: tourism, food and beverage processing, cement and gypsum production, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone and clay products

–          Industrial production growth rate: 0.7% (2011 est.)

 

Energy sector:

 

–          Electricity:

  • Production: 4.887 billion kWh
  • Consumption: 4.698 billion kWh
  • Exports: 0 kWh
  • Imports: 0 kWh

 

–          Crude Oil:

  • Production: 0 bbl/day
  • Exports: 0 bbl/day
  • Imports: 0 bbl/day
  • Proved reserves: 0 bbl

 

–          Refined Petroleum products:

  • Production: 0 bbl/day
  • Consumption: 58,450 bbl/day (2011 est.)
  • Exports: 0 bbl/day
  • Imports: 60,310 bbl/day (2008 est.)

 

–          Natural gas:

  • Production:  0 cu m
  • Consumption: 0 cu m
  • Exports: 0cu m
  • Imports: 0 cu m
  • Proved reserves: 0 cu m

 

–          Exports: $2.165 billion

  • Commodities: citrus, potatoes, pharmaceuticals, cement, clothing
  • Main exports partners: Greece (26.2%), UK (10.2%), Germany (5,6%).

 

–          Imports: $ 8.034 billion

  • Commodities: consumer goods, petroleum and lubricants, machinery transport and equipment
  • Main imports partners: Greece (21.5%), Israel (10.4%), UK (9.2%), Italy (8.3%), Germany (8.1%), France (5.7%), China (4.8%), Netherlands (4.6%).

 

–          Reserves of foreign exchange and gold : $1.207 billion

 

–          External debt: $ 35.87 billion (2011 est.)

 

–          Stock of direct foreign investment :

  • At home : $28.2 billion
  • Abroad : $13.41 billion

 

 

Transportation:

–          Airports : 15

–          Roadways : 14,671 km

–          Ports and terminals :

  • area under government control: Larnaca, Limassol, Vasilikos
  • area administered by Turkish Cypriots: Famagusta, Kyrenia

Political and economic equilibriums in the Mediterranean: increase trade relations with China

  • 5 November 2012

In the last ten years, there was a new phenomenon in political and economic equilibriums all over the world: the intensification of the relations between China and the southern Mediterranean Countries.

Chinese investments in Africa become enormous, both for quality and quantity, and there are also addressed to African banking institutions.

Obviously, the most important Chinese interest is about the natural resources potential in African Countries. Specially, the huge and growing of the energy demand led China to give priority to economic relations with the countries in the area are the largest producers of oil and gas.

In addition to hydrocarbons, China needs many other natural resources: for example phosphates and other extracted minerals. Based on this need, Chinese trade relations with Morocco, third largest producer and holder of the world’s largest reserves of phosphates, are initiated and developed.

It is possible to identify various factors that could modify, in the near future, the trend and the increase of economic relations between China and Southern Mediterranean Countries.

Firstly, the bad economic situation of European Countries could lead Southern Mediterranean Countries to diversify their international relations at the detriment of Europe and in favor of high-growth economies such as China.

Secondly, the rapid technological development could also allow China to extend the range of exports and investment in Southern Mediterranean Countries.

Thirdly, an economic sector not yet developed, but that could play an important role in the future, is the tourism. If the flow of Chinese tourists will increase, also Southern Mediterranean Countries could have benefits.

Finally, the “Chinese Diaspora” all over the world, will be a strong support for the development of economic relations in the next years.

However, the Chinese companies policy about the factory moved to Africa could work against the development of economic relations in the next years. In fact, Chinese companies in Africa use, quite only, staff of the mother country. And also career advancement is for Chinese employees only.

The motivation behind this choice is probably to encourage Chinese workers to work abroad for a long period of time. This gave also the possibility for the migrant’s families to benefit from migrant workers money remittances, increasing spending capability.

Morocco aims to achieve macroeconomic balance and cooperation with the United Arab Emirates

  • 1 November 2012

The Moroccan government has identified as a priority the restoration of a progressive budget balance, conscious that the achievement of economic goals depends on the preservation of macroeconomic balances.

Rabat will apply some strategies that, according to figures released by the press Map, consisting in the increasing of the costs efficiency, the enhance income and the use of different financing forms, such as partnership between public and private.

In order to rationalize the costs, the first expenditure to reduce is the compensation cost, which must be resized to a sustainable level. Secondly, unproductive expenses must be completely eliminated, and also the resources devoted to public administration should be reviewed.

The improvement of the revenue should be done through the mobilization of tax resources (also the customs fees), the partnership between public and private, the value of active management of the State’s property portfolio and a new policy of dividend distribution of public enterprises.

Moreover, Morocco needs to attract more foreign direct investments. This requires improving the investment security and increasing the competitiveness of productive factors. In this field it’s important to underscore the relations between Morocco and the United Arab Emirates. This has a recently remarkable evolution.

Thanks to the willingness of the two Heads of State, in fact, the relations between two countries have been consolidated and developed, being able to start bilateral cooperation in various fields.
The economic partnership between Morocco and the United Arab Emirates therefore appears promising. Proof of this is the current volume of trade and increased investment from the United Arab Emirates and direct in Morocco. These data are compatible with the particular Emirate interest for the strategic position and for the economic and political stability in Morocco.

Analysts of the newspaper of the Emirates Al Bayane argue that, after the accession to the throne of King Mohammed VI, Morocco recorded considerable progress, particularly in political, economic and development fields.

The process of reforms undertaken by the Kingdom under the leadership of Mohammed VI, such as the adoption of the new Family Code, the consecration of human rights and the creation of the Royal Institute of the Amazigh culture, would have enabled the Country to open its society to the world and to explore the promising prospects for development and investment.