Working towards better integration in the Mediterranean Financial Area
In its study for the French Caisse des Dépôts (CDC), McKinsey Company assessed public projects in the pipeline over the next 5 years as totalling €200 billion in nine activity sectors in 11 SEMCs (excluding Turkey and including Libya), i.e. €40 billion per year for 5 years. The EIB has also estimated needs over the coming ten years in the sole South of the Mediterranean €100 billion in the energy sector, € 110 billion for urban planning (water, sanitation,
waste treatment and urban transport), € 20 billion for logistics (ports, airports and highways), and €20 billion for supporting company development to contribute to the 50 million jobs that SEMCs need to create before 2020.
Funds from current stakeholders taken together, i.e. South and East Mediterranean countries, local banks, multilateral institutions for funding development and private stakeholders, are insufficient to cover these needs. Investment remains low in the region and private investment even more so, particularly when it comes to investing in infrastructure for the long term, which is perceived as too risky for the profitability expected. Gross fixed capital formation
(public and private investments) related to gross domestic product is below 25% in the Middle East and North Africa (MENA), compared to 40% for East Asia and the Pacific. Savings available locally are currently rarely mobilized by standard financial systems, because the region is characterized by low intermediation rates and limited development of its financial markets.
Authors :
- Eric Diamantis: Member of the Paris Bar (France).
- Michel Gonnet: President of Eudoxia Conseil (France).
- Abderrahmane Hadj Nacer: Former Governor of the Bank of Algeria (Algeria).
- Radhi Meddeb: President of IPEMED, Chief Executive Officer of COMETE Engineering Group (Tunisia).
