Sunday, March 13, 2011

A Marshall Plan for North Africa

After the uprisings in Tunisia, Egypt, Lybia, Algeria, Morocco and Jordan, European leaders should rethink their strategy for the Mediterranean area. The  Union for the Mediterranean launched by Sarkozy was ill-conceived and largely expected to fail in the absence of political support. 

An influential opinion leader, P.Defraigne, secretary-general of Madariaga foundation wrote recently in a Belgian newspaper (la Libre Belgique 05 March): "the euro-mediterranean alliance was that of rent and fear. Despotic and corrupted regimes unable to build a fair development sought support from the West by the oil, the ambivalent view about Israel and repression of islamism. The Barcelona process (...)  has failed. EU money has been spent. Reforms did not follow. For too lon, large member States neutralised European action due to  their bilateral interests. Now, the EU has to regain control, because Europe and the Mediterranean area share a common destiny in the face of globalisation. (...) The EU does not need now to buy reforms. For people are asking them..."

Euromed Rights*   issued  in its Executive Committee session (4-6 March) hel in Geneva a declaratioon in which it urged the international Community to bring the necessary political and financial support to make sure that transition in Tunisia and Egypt could lead to the introduction of democracy and full respect of human rights and recommends " an independent mechanism of surveillance of the electoral process" in those countries. 

For the time being, European leaders are determined to act to resolve the Lybian conflict in particular by humanitarian means as there are profound divisions on military intervention. But, they should think ahead in terms of  stabilisation of the whole Mediterranean area. Socialists MEPs support the idea of a Marshall Plan for the area. Remember : the Plan  - officially called the European Recovery Program -was launched in 1947 (and finished in 1951) to rebuild European economies after WWII  with a transfer of about 1% of the US gross national product per annum. As usual, some big member States opposed the idea arguing that in times of budgetary restrictions they cannot afford to spend large amounts of money. Let's be clear : 1% of  EU GDP corresponds  to about 100 billion euros, a bit less of total loans granted to Greece to resolve its debt crisis. 

In the 80s, Reaganites were opposed to any form of aid to poor countries and their favorite motto was: Trade but not aid". Now, if we want to stabilise our southern neighbourhood, Europeans will have to spend money and pursue at the same time the creation of a free trade area with North Africa. It is a long time endeavour but it is worth doing as the costs of non action would be much higher.

* , a network of more than 80 human rights organisations based in 30 countries of the euro-mediterranean area was set up  in 1997  in response to the Barcelona Declaration and the establishment of the Euro-Mediterranean partnership

Tuesday, March 1, 2011

Growth is not a measure of society's success

Society's success cannot be measured only by economic growth. This view is gaining wider acceptance among academics as well as policy makers.

Kenneth Boulding wrote with great sense of irony: "the only people who believe in infinite growth in a finite world are madmen and economists". There are limits to growth because of the scarsity of natural resources and its overexploitation which makes growth  uneconomic in the sense that marginal costs may exceed marginal benefits*. Natural disasters, for example are known to increase gross domestic product. But since many large costs, to repair the damage such as providing temporary housing to displaced people, are not considered as real costs and are kept off balance sheet, policy makers continue to pursue growth no matter the cost.

Several economists have challenged this conventional wisdom and have advanced a set of ideas that put in question growth as a paradigm and outline a vision of progress based on qualitative measures. Nobel prize, Joe Stiglitz, together with Amartya Sen and Jean Paul Fitoussi issued in 2008 a report about alternative measures of economic progress.

It is hopeful to see a modern nation such as Japan stepping off the ever-accelerating machine of infinite economic growth and finding that societal well being remains high (FT January 6). Japan is not Bhutan, a country which is proud of being at the forefront of measuring happiness as an indicator of  social welfare.
What do we have for all the growth of recent times? Flat screen televisions and other incredible innovations, but also deforestation, climate change and stagnant incomes for all but the richest households. Shouldn't we rethink radically our model of economic development as a way out of the crisis?  

As Robert Kennedy said in a speech in 1968, GDP "measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile". 

* See the work of Herman Daly, an ecological economist credited of having originated the concept of uneconomic growth and the paradigm of steady state economy ( )