A Quest for North Africa’s Economic Recovery: Lessons from Post-Communist Europe

In May 2012, leaders of the G8 countries met in France in order to discuss an eventual support of the ongoing revolutionary processes of the Arab Spring. Although a number of countries have already helped financially or otherwise, the current amounts of aid implicitly suggest that another Marshall Plan in not going to take place. Instead, President Obama hinted in his Middle East speech in May this year that the post-communist Central European countries could be a more appropriate development model for North Africa – however, a close examination reveals that the underlying conditions were diametrically opposite.

Central and Eastern European countries had plunged into their revolution-making with a unity of purpose and a clear goal. More than democracy or economic and political freedoms, the potential possibility of joining the EU and NATO had served as a perpetual motivator to undergo the difficulties of the transition years. North African countries, by contract, touched off their revolutions all of a sudden to the surprise of the whole world. People were dissatisfied with what they had, but a clear message of what they want has not yet been sent – and knowing your goal is half the way to get there. The Arab Spring is simply anything but congruous in its desired outcomes.

“Population of the Arab spring countries is, moreover, rather young and expectant of jobs with the majority of women excluded from labor market. In then-communist Central and European countries, population was fairly well educated, which made a relative quick absorption of the technological boom of the 1990s much easier.”

Under communism, there was not much choice and work was compulsory for everyone – including women. As joblessness was artificially kept alive, the fall of communism brought about considerable unemployment. In North Africa, however, unemployment was one of a few stimuli for the revolution rather than its intrinsic effect. Thus, whereas post-communist Central Europeans felt that high unemployment in the early transition years was a necessary sacrifice on the way towards the West, North Africans might get disgruntled unless their newly elected governments manage to tackle unemployment sooner rather than later – and this is disconcerting enough to make the international community opt for an aid plan.

The World Bank, for instance, launched “The Enhancing Access to Micro and Small Enterprises Project” in Egypt to support the vital role of such businesses in the creation of employment. Micro and small business account for roughly 99 percent of the country’s all enterprises, 85 percent of its non-agricultural employment and 40 percent of the total Egyptian employment. Moreover, the program was signed for five-years, it has a continuous character, and focuses especially on women.

The European Bank for Reconstruction and Development, whose traditional focus has been the post-communist world, has expanded its mandate in order to assist the fragile businesses in North African countries. While a number of European countries and international organizations embraced the Bank’s initiative to get engaged in the region, its aid was, however, said to be conditional upon “a firm commitment to the core principles of democracy, political pluralism and the market economy.”

The European Union, on its part, organized the “Five-Plus-Five” summit (October 6-7, 2012 in Malta) – the first EU-Maghreb meeting since the beginning of the revolts in the region. The EU had previously increased the budget for the North Africa partnership by 1.7 billion euro, and its primary concern is mainly humanitarian situation in this vital region on its southern flank. Given the influx of Maghreb migrants heading for the European coast following the riots, the EU is trying to alleviate immediate poverty in order to curb the migratory pressures.

Furthermore, the international aid focuses also on the sound macroeconomic stability in the region. The International Monetary Fund set up a task force for the countries that had asked for assistance, such as Egypt or Morocco. As the latter’s domestic economic indicators have continued a downward slide, Morocco may be forced to dip into a $6.2 billion IMF fund that would shield it from the deteriorating European debt crisis.

Apart from the international bodies, individual countries aid the Maghreb countries as well. The U.S. President Obama has brushed off the old slogan “trade not aid” and promised to increase trade volumes with North African countries. France had already in 2011 sent about 350 million euro to Tunisia – the money was quickly spent on governmental projects linked to training, unemployment and better governance. Last, but not the least, Germany helped Tunisia earlier this year by providing the country with 32 million in aid as well as by rescheduling Tunisia’s 60 million in debt. Berlin has also provided significant technical and humanitarian assistance to Libya, where German doctors are already stationed.

Apparently, North Africa is not lacking volunteers in the process of its economic recovery. Needless to say, it is in the interest of the whole international community that the Maghreb region is sound and safe. Yet, the question remains as to whether the region itself is able to identify the goal it wants to achieve with all this Western money.