7. The framework for carrying out the
Programme of the Mediterranean NGOs
7.1. Overcoming
poverty: a precondition for sustainable development and peace
7.2. The creation of a free
trade zone and the situation of the environment
The sustainability of development in the Mediterranean basin is inextricably linked to the explicit consideration, adoption and performance of the measures necessary to confront both existing problems and ones that may arise from the agreements on integration. The most urgent of the current priorities is the elimination of poverty. The most important one that may arise is the reduction of the profound economic and commercial differences between the North of the Mediterranean and the South and Southeast.
From this perspective we need to take into account the imbalances between the two coasts. This imbalance is not limited to the huge, and frequently paralysing, difference in per capita income and living standards (the ratio of the GDP of EU member States to that of EU non-members in the Mediterranean is 20 to 1) but extends to the unequal capacities of the different countries of the Mediterranean Basin to meet the challenges inherent in the creation of a free trade zone and its implementation within a context of sustainable development.
7.1. Overcoming poverty: a precondition for sustainable development and peace
Economic inequalities imply economic power on one side, and the absence of economic capacity on the other. Economic inequality and its increase are the cause of social injustice, impede the proper and efficient functioning of the economy, and results in ever-increasing dependency and diminishing freedom. Sustainable development is incompatible with social injustice, increasing inequalities and the consequent loss of freedom.
The profound inequalities which exist in the Mediterranean basin require the adoption of a very carefully planned strategy and overall policy of sustainable development. In this context we must not confuse free trade with a laissez faire attitude and an uncontrolled functioning of the market system. In a situation of pronounced inequalities, letting the economy operate without intervention carries considerable risks, not only because it fails to ensure optimal distribution of resources but, above all, because it leads to unemployment, injustice and social conflict which, besides impeding sustainable development, are obstacles to peace in the region.
Freedom requires certain economic conditions to be fulfilled; poverty, unemployment, unstable exchange rates and significant economic dependence on foreign countries are all threats to freedom and to sustainable development, because they provoke class conflict and sociopolitical unrest. Sustainable development requires economic stability, full employment (or a tendency towards full employment), economic fairness and freedom of choice. Overcoming poverty, generating good, well-paid jobs, achieving a minimum standard of living, and controlling and limiting the concentration of economic power are, among others, the economic objectives which foster freedom, fairness, social justice and peace.
An income is one of the first and most important requisites for freedom and peace, since it confers status, permits participation in the market and in society, and provides independence. In contrast, absence of income leads to poverty and restricts liberties: a society with growing poverty is a society where individual liberties are progressively undermined. Poverty makes for marginalization and little or no participation. Sustainable development in the Mediterranean is impossible if poverty is not reduced first, and this should be the objective of first priority.
According to the latest report on Human Development of the United Nations Development Programme (UNDP), poverty reaches alarming levels in some Mediterranean countries. In Algeria 5% of the population lives on less than a dollar a day per person, and 32% of the population lives below the poverty line. For Tunisia the figures are 4% and 14% respectively, and for Morocco, 1% and 13%. In Egypt, 8% of the population lives on less than one dollar a day per capita. If we apply the new indicator developed by UNDP, called the Human Development Index (HDI), which takes into account factors such as longevity or life expectancy, literacy rates, access to health care and clean drinking water, the percentage of children under 5 that are malnourished, etc., the situation in the Mediterranean is even worse.
7.2. The creation of a free trade zone and the situation of the environment
Economic relations between the northern Mediterranean and the south are based mainly on bilateral agreements of various types and on highly unbalanced trade relations. This imbalance is manifested in simple figures, such as the enormous surplus in the EU's balance of trade with the other Mediterranean countries. This surplus reflects the structure of trade between the EU and the others: almost all EU exports are manufactured goods, the exports of the rest of the Mediterranean countries to the EU consists mainly (35%) of energy-related goods (basically petroleum and its byproducts) and a high percentage of agricultural products. Spain, France and Italy represent 2/3 of the North's petroleum imports from the southern Mediterranean. Hydrocarbon exports thus represent a major percentage of the foreign exchange earnings of some southern economies: 42% in Egypt, 66% in Syria, 91% in Libya, and 96% in Algeria.
These imbalances reveal the enormous vulnerability and dependence of the south with respect to its trading partners in the north, whereas this susceptibility or vulnerability does not exist in the countries of the northern shoreline. It is common for more than 25% of the foreign trade of a southern Mediterranean country to be with a single country of the northern Mediterranean, while for a northern country, such as France or Italy, trade with any one southern country represents only between 1% and 3% of its total foreign trade. The EU, for example, accounts for 78% of Libya's total exports, 77% of Tunisia's, 76% of Malta's, 71% of Algeria's, 62% of Morocco's, 59% of Cyprus's, 54% of Turkey's and 38% of Egypt's. On the other hand, for France, Italy and Spain, the combined markets of the southern and eastern Mediterranean represent between 1% and 2.5% The situation is aggravated by the fact that export growth in the developing Mediterranean countries is very slow, or even negative, as it was in 1992.
Finally, we must not ignore the weight of external debt upon the southern Mediterranean countries. Debt service accounts for between 71% and 16% (?)of the total value of exports for Algeria and 16% for Egypt, and generally exceeds 20%: 32% for Turkey, 24% for Morocco, 21% for Tunisia, etc.
This brief outline of the economic relations between the industrialized northern Mediterranean and the developing south shows both the difficulty of establishing a free trade area and the necessity of significant regional cooperation as a component of a Mediterranean strategy of sustainable development.
This regional cooperation must be understood in the true, strict meaning of the term, that is, as a series of joint actions between Governments or individuals directed toward common goals. This implies that the different parties must determine their policies by common agreement, adapting them to the objectives, needs and capacities of their partners. The following is an attempt to respond to the prevailing biased and reductionist view of cooperation as the mere transfer of resources from the north to the south, which confuses cooperation with donations and aid - development aid, humanitarian aid, etc. Real international cooperation only takes place when a government's policies are perceived by its partners as facilitating the fulfilment of their own objectives, that is, when they are the result of a process of political coordination.
In practice, cooperation may take different forms, which vary according to their scope, strength and length. The scope refers to the breadth or range of the issues or areas of cooperation, and which can run from efforts limited to controlling specific common sectorial or point problems (for example, pollution in certain areas, sectors or industries) to broad cooperation programmes (for example, the monitoring, mitigation and reduction of pollution at the regional level) and even to the inclusion of cooperation in the development plans and strategies of individual governments and of the region (in this case the Mediterranean) as a whole. The strength of the cooperation refers to the degree to which the States honour binding agreements and to the firmness of the commitments and responsibilities which they contain. Finally, the length of the cooperation is significant: short-term transitory cooperation may well serve as a catalyst to resolve some situations and incidents of common concern, or alleviate immediate and urgent problems, but does not necessarily guarantee a sustained process of development.
The Euro-Mediterranean Conference of November, 1995, adopted the following resolutions with the aim of increasing cooperation in the Mediterranean Basin:
- Establish a free trade zone by the year 2010.
- Increase EU financial assistance to other Mediterranean countries.
- Reinforce and expand cooperation in the economic, social and environmental sectors.
The creation of a large Mediterranean free trade zone forms part of a strategy of sustainable development for the Mediterranean that sees cooperation, in the strict sense above, as a strategic element.
The Barcelona Declaration in its call for the creation of a free trade area recognizes that the nations of the Mediterranean basin share a geographic space which is highly interrelated and interactive, and that proper management of environmental problems in the Mediterranean must be undertaken on a regional scale. Nevertheless, the Declaration makes no mention of the effects, both positive and negative, the creation of this free trade zone may have.
The goal of free trade areas is to increase the commercial exchange of goods and services and, possibly, of capital between the countries which are partners to the agreement, by means of the reduction and elimination of tariffs and non-tariff trade barriers. The basic theoretical argument is that a free trade zone eliminates the distortions which prevent countries from benefiting from their respective comparative advantages; it allows more efficient use of resources, including natural and environmental resources; and thus helps to reduce the pressure on the natural environment. The full exploitation of the comparative advantages of each country leads to economic expansion, promotes the more efficient use of resources, increases productivity and consequently promotes rises in income levels and standards of living. The proponents of the creation of a free trade zone argue that its potential benefits are too great to be ignored.
More explicitly, it is argued that the elimination of trade barriers allows an increase in the overall efficiency of the economic system, both in the individual countries and in the region encompassed by the free trade agreement.
Free trade is often interpreted, in some sectors, as unregulated, arbitrary and therefore subject to the interests of the dominant economic groups and to their competition with the exclusive desire for short-term profit. In this context the fear exists that a free trade area will give rise to over-exploitation and the predatory utilization of those resources not adequately internalized within the rationale of the marketplace, particularly over-exploitation of natural resources and of environmental goods and services or functions. More explicitly, some environmentalists are afraid that the economic expansion promoted by a free trade area may translate into an additional pressure on the natural system through the over-exploitation of land and water resources, a loss of biological diversity, new and bigger industrial waste discharges, an increase in soil, air and water pollution, and increased production of dangerous, potentially toxic, waste. If this were the case, we would clearly risk exacerbating rather than solving the environmental problems outlined in Chapter 2.
However, the current reality is that of highly regulated trade or, in other words, free trade limited by perfectly established rules. What is important is that these rules should also reflect specific environmental issues.
In any case, this debate reveals unmistakably that questions of trade and the environment are closely interrelated and, consequently, that we cannot deal with the one without addressing the other. In other words, free trade and rational environmental management must be considered together. It is worth remembering that Agenda 21 States that environmental and trade policies should support each other in favouring sustainable development.
For this reason environmental issues should be incorporated explicitly and from the outset in the planning and conduct of any negotiations concerning the establishment of a free trade zone. Moreover, environmental issues must be integrated into the binding texts of the free trade agreements and not be treated, as has happened in the past with other free trade zones, as an ancillary or secondary dimension which often ends up as a dead end within the process.
The logical complement to the previous position is that adequate political and financial measures must accompany the agreements, to ensure that each member of the free trade area is able, in a real and viable way, to contribute its potential capacities and at the same time benefit from the results of the creation of the free trade area.
Among the imbalances which characterize the Mediterranean, we should remember the following: different levels of development of institutions and of environmental legislation, specifically with respect to the severity of the environmental regulations and the ability to enforce them; inequalities in the physical infrastructure needed to confront crucial problems of the environment and of sustainable development, such as access to potable water, sewer systems, waste water treatment and energy; availability of waste disposal and treatment facilities; scientific and technological capacity (above all, the unequal access to clean, environmentally rational technologies) or the enormous differences in the availability of human as well as financial resources.
The harmonization of environmental regulations seems to be a priority for the establishment of a free trade area. If it is not treated as such, we will in effect be creating the permanent risk of the use of environmental policies and regulations as instruments of protectionism and, in other contexts, as forms of environmental conditioning factors. That is to say, homogeneous environmental legislation among the free trade zone partners appears to be a necessary step in order to prevent, or at least minimize, the possible contradictions between environmental regulation and foreign trade policy. Environmental regulations can in fact constitute trade barriers that are as hard, or harder, to overcome than the traditional kind. From this angle the constant fear is that adoption of environmental measures will be a means of establishing de facto protectionist barriers in disguise. It is well understood and accepted that an environmental regulatory scheme must not be discriminatory and must clearly evidence its environmental purpose or, in other words, it must obviously be directed at a legitimate environmental target and must not create unnecessary obstacles to trade.
Nevertheless, we must not deceive ourselves as to the magnitude and difficulty of this task. The establishment and harmonization of a set of environmental regulations requires a tremendous effort of negotiation, cooperation and commitment among a relatively large number of countries, with different environmental features and problems, despite the apparent similarity of conditions throughout the region.
On the other hand, without effective environmental regulation, the opening up of trade and the expansion of economic activity could lead to additional pressure on the environment. This possibility is even more likely if we consider the enormous disparities between the north of the Mediterranean and its southern coast. The negative impact may be accentuated by short-term environmental policies directed exclusively toward making the most profit from short-lived situations.
The impact of trade on the environment will thus depend on the existence of strategies and policies of sustainable development, implemented on the national and regional levels. If these policies exist and are carried out properly, the economic growth and development brought about by more open trade can be sustainable.
In view of the foregoing, the movement to create a free trade area must go hand in hand with the commitment of each individual country to establish a rigorous regulatory scheme and to enforce it properly. The process of harmonization of environmental regulations is a priority task. In addition, it must be accompanied by mechanisms which guarantee openness, adequate information and public participation, access and careful oversight in the design of the environmental regulatory scheme, as well as of the administrative and judicial procedures for its enforcement.
In order to achieve the creation and harmonization of environmental regulations in the Mediterranean basin, there must be significant technical and financial cooperation oriented toward, among other goals:
- Promoting and guaranteeing the regular flow of information about environmental regulations in the Mediterranean countries.
- Improving and strengthening the institutional machinery responsible for environmental policy.
- Creating capacity-building schemes regarding the relationship between trade and the environment.
- Providing technical assistance to improve the conduct with respect to the environment of key sectors of the economy and, in particular, of the export-aimed activities.
- Providing technical and economic assistance to increase and improve the capacities of the Mediterranean countries in controlling product standards, their verification, certification and other forms of control over environmental quality and processes.
- Transferring technology (especially clean technologies) with preferential economic treatment for the Mediterranean countries.