Euro-Mediterranean integration beyond the crisis Fabrizio Onida Università Bocconi, Milano EIPA and SSPA, Rome, October 28, 2009 21/12/2015 1 A V-shaped recovery (so far…) 21/12/2015 2 Rebounding trade (WEO October 2009) 21/12/2015 3 Export orders decline stabilized in Europe 21/12/2015 4 China and other BRICs 21/12/2015 5 Consumer confidence still weak 21/12/2015 6 Business confidence recovering 21/12/2015 7 0il and commodity prices up again: impact of recovery or volatile speculation? 21/12/2015 8 Trade-output elasticity: will it go back to about 2 after crisis? 21/12/2015 9 Risks of W-shaped recovery • 1. Unemployment on rise • 2. Premature exhuberance in financial markets • 3. Delayed policy responses to regulations of derivatives • 4. (Medium term) uncertainty on debt/GDPO ratios “A dull, heavy calm” (Economist, October 3, 2009) 21/12/2015 10 Growth, inflation, current account balance (IMF, World Economic Outlook, October 2009 Africa Maghreb Algeria Morocco Tunisia Sub-Sahar Middle East Oil exporters Mashreq Egypt Syrian Arab republic Jordan Lebanon Turkey Israel Emerging Europe CSI Advanced economies Euroarea 21/12/2015 Real GDP growth 2008 2009 2010 5.2 1.7 4.0 4.1 3.2 3.6 3.0 2.1 3.7 5.6 5.0 3.2 4.6 3.0 4.0 5.5 1.3 4.1 5.4 2.0 4.2 4.9 1.3 4.2 7.0 4.5 4.4 7.2 4.7 4.5 5.2 4.0 4.2 7.9 3.0 4.0 8.5 7.0 4.0 0.9 -6.5 3.7 4.0 -0.1 2.4 2.9 -5.2 1.8 5.5 -6.7 2.1 0.6 -3.4 1.3 0.7 -4.2 0.3 Consumer Prices 2008 2009 2010 10.3 9.0 6.5 4.4 3.9 3.2 4.5 3.4 3.9 2.8 2.8 5.0 3.5 3.4 11.9 10.5 7.3 15.0 8.3 6.6 15.8 7.0 6.3 12.3 13.0 7.5 11.7 16.2 8.5 15.2 7.5 6.0 14.9 0.2 4.0 11.0 2.5 3.5 10.4 6.2 6.8 4.8 3.3 2.0 8.0 4.7 4.2 15.6 11.8 9.4 3.4 0.1 1.1 3.3 0.3 0.8 Current account balance/GDP 2008 2009 2010 2.5 -3.1 -1.7 10.6 -1.1 1.8 23.2 2.7 7.3 -5.4 -5.5 -4.7 -4.2 -3.8 -2.9 18.3 2.6 7.9 18.3 2.6 7.9 21.8 4.0 10.4 -2.7 -4.1 -4.4 0.5 -2.4 -2.8 -4.0 -3.2 -4.3 -11.3 -11.0 -8.8 -11.6 -11.3 -10.5 -5.7 -1.9 -3.7 1.0 3.2 2.4 8.0 4.7 4.2 4.9 2.9 4.4 -1.3 -0.7 -0.4 -0.7 -0.7 -0.3 11 World import shares (a), geographical weights on Italy’s export (b), Italy’s world export shares (a) (b) (c) (d) (e) UE-27 38.7 60.0 5.5 153.0 5,611 Russia 2.5 2.7 5.9 164.0 -4,776 Svizzera 1.2 3.7 9.7 270.0 2,295 Africa settentrionale 1.1 2.8 10.7 297.0 -15,243 Altro Africa 1.8 1.3 2.8 78.0 -1,968 11.5 7.6 1.7 47.0 14,367 America Latina 5.7 3.4 2.3 64.0 1,381 Medio Oriente 4.7 4.7 5.0 139.0 733 Asia Centrale e Meridionale 1.8 1.3 2.2 61.0 -2,471 27.0 6.2 1.0 28.0 -15,845 Cina 8.9 1.8 1.0 28.0 -15,453 Giappone 5.1 1.2 1.1 30.0 -1,022 1.3 100.0 0.9 100.0 2.4 3.6 67.0 100.0 1,689 -9447 Nord America Asia Orientale Oceania Mondo a) b) c) d) e) Quota di ciascun mercato sulle importazioni mondiali Peso mercato su export Italia Export Italia/export Mondo su ogni mercato Quota c) rapportata a quota media Export Italia/Export Mondo (3.6%) Saldo (export – import) in milioni di euro 12 Fonte: ICE, Rapporto 2007-08 World trade shares: Africa and Middle East low but rising 21/12/2015 13 Value and Shares of World Exports 1948 – 2005 billion dollars and percentage 21/12/2015 14 Value and Shares of World Imports 1948 – 2005 billion dollars and percentage 21/12/2015 15 World merchandise exporters (excluding intraEU 27 trade), 2007 Rank Exporters 1 2 3 4 5 6 7 8 9 10 11 12 14 22 23 28 29 31 36 37 38 46 48 49 Extra-EU 27 China United States Japan Canada Korea, Republic of Russian Federation Hong Kong, China domestic exports re-exports Singapore domestic exports re-exports Mexico Taipei, Chinese Saudi Arabia U.A.E. Turkey Iran, Islamic Rep. Kuwait Algeria Israel Lybian Arab Jamahiriya Qatar Iraq Egypt Tunisia Morocco Total leading 50 exporters W orld (excl. Intra-EU 27 trade) value. Bn.$ share 1697.8 1217.8 1162.5 712.8 419 371.5 355.2 349.4 18.1 331.3 299.3 156 143.3 272 246.4 234.2 173 107.2 86.1 62.4 60.2 54.1 45.4 42 41.6 16.2 15 14.7 16.4 11.8 11.3 6.9 4.1 3.6 3.4 3.4 0.2 3.2 2.9 1.5 1.4 2.6 2.4 2.3 1.7 1 0.8 0.6 0.6 0.5 0.4 0.4 0.4 0.2 0.1 0.1 10003.5 10622 96.9 100 Fonte: W TO, W orld Trade Report 2008 16 World merchandise importers (excluding intraEU 27 trade), 2007 Rank Importers 1 2 3 4 5 6 7 8 9 10 11 12 13 18 22 26 30 35 36 40 41 42 43 44 46 48 50 value, bn. $ United States Extra-EU 27 China Japan Canada Hong Kong,China retained imports Korea, Republic of Mexico Singapore retained imports Russian Federation Taipei, Chinese India Turkey U.A.E. Saudi Arabia Israel Iran. Islamic Rep. Iraq Morocco Algeria Egypt Croatia Kuwait Qatar Tunisia Serbia Syrian Arab Rep. Total leading 50 importers W orld (excl. Intra-EU 27) share 2020.4 1952 956 621.1 589.6 370.1 93.3 356.8 296.3 263.2 119.9 223.4 219.6 216.6 170.1 132 90.2 59 46 32 31.7 27.6 27.1 25.8 23.6 22 19 18.4 14.5 19 18.4 9 5.8 3.7 3.5 0.9 3.4 2.8 2.5 1.1 2.1 2.1 2 1.6 1.2 0.8 0.6 0.4 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.1 10188.4 10622 95.9 100 Fonte: W TO, W orld Trade Report 2008 17 Leading exporters-importers 21/12/2015 18 North Africa’s import origins Africa Settentrionale, 2007 Composizione geografica delle importazioni (129 bn$) UE-27 50.7 Francia 13.2 Italia 10.7 Germania 6.9 Spagna 5.8 Altri Europa 9 AFRICA 4.1 Nord America 8.1 America Latina 4.2 Medio Oriente 6.4 Asia Centr. Merid. 1.6 Asia Orientale 14.8 Cina 8.1 Giappone 2.1 Sud Corea 1.7 Oceania 0.6 Fonte: ICE, Rapporto 2007-08 21/12/2015 19 Middle East: intra-regional and EU integration 21/12/2015 20 “Natural resource curse”: Africa and Middle East slower decline than other Developing economies 21/12/2015 21 More and less favourable macro-structural indicators • Developing Mediterranean countries vs. other developing African and Asian countries: 1. More favourable: - reduction in child mortality 1990-2005 - gross enrollment ratio in secondary education (% of relevant age group) - public debt/GDSP - ODA/GDP 2. Less favourable: - population rate of growth 90-05 and forecast 2005-15 - unemployment - poor infrastructures - oil-gas export dependence (Algeria, Lybia, Siria, Egypt) “The creation of the Union for the Mediterranean is hardly the rebirth of imperial Rome, but it may just be the start of something exciting” (The Economist, “Club Med”, July 12°, 2008) 21/12/2015 22 21/12/2015 23 FDIs: still rising in developing areas in 2008, unlike developed ones. How heavy 2009 fall? 21/12/2015 24 FDI into developing areas: no crush in 2009 21/12/2015 25 Egypt largest recipient of M&A investors from Europe and Gulf 21/12/2015 26 Euromed integration and outward oriented development: catching the opportunities and a long way to go! All the best! 21/12/2015 27