As my family and I embark on a summer sojourn to a Greek island, it seems only fitting to write about what could either be an ambitious political effort with great architecture or a hollow shell with 43 countries and little substance.
The cradle of civilization without even a Plato-inspired debate lies at the heart of the
In traditional French style, Sarkozy invited leaders to
German Chancellor Angela Merkel was not going to sit idle and let President Sarkozy design a non-E.U. driven structure, which would have seen only those countries bordering the
This would explain where we are today with 43 countries cobbled together. What is now being called Club Med is not a new initiative; it goes back to the so-called
A lot has changed since then. For one, there is economic stability and pretty decent growth-- 4.4 percent since the turn of the century. While no one can contend the non-E.U. countries represent a cradle for democracy, they do represent a handful of countries that have embarked on real economic reforms –
Those reforms caught the eye of some very wealthy Gulf neighbors who can clearly claim first mover status. Large development companies are building new cities, ports, factories and oil and gas facilities throughout Club Med.
As the Chief Executive of one Gulf real estate company aptly noted, “we are not a charity; we are out to make money, but if we help stabilize our region at the same time, so much the better.”
This is not the International Monetary Fund or World Bank at work, but the private sector smelling value.
European Trade Commissioner Peter Mandelson acknowledges the frustration many North African leaders have felt after a decade of limited leadership from Brussels, but sees the merits of this effort after the wave of investment.
“I think that it will bring greater political stability on the back of greater prosperity to the countries of the Southern Mediterranean and North Africa and that’s certainly in the interests of
The not-so-foreign direct investment from the Gulf (since they are in the same neighborhood) is the deciding factor for President Sarkozy. The economic risks are low, but the political upside is high and he could even carve out a role for
The challenge for all leaders is to make sure wealth can be distributed more evenly. This bloc trails only
That certainly is changing. DP World has, for example, a $3.5 billion port under construction in Tangiers and Renault Nissan has an automobile plant designed within the same facility. FDI is up six fold since the start of the century, with again Gulf players leading the modern day caravan across the Med.
"The Arab world today is in a dramatically different situation and a significantly more promising economic situation than it was in the mid 1990s,” says Florence Eid, President of Arabia Monitor. “On the back of six years of the oil windfall now, we are seeing dramatically different methods of investment."
The investment will provide a foundation for growth and hopefully long term job creation. It is the most pressing issue. Unemployment stands at about 12 percent in the non-E.U. Med countries; most experts contend it is double that amongst the youth.
If successful it will help stem the tide of immigrants who literally wash up on the shores of
President Sarkozy, with his Parisian hospitality, was out to make a statement that the Union of the Mediterranean can be grand, can lower barriers to trade, create jobs and assist in addressing one of
The Club Med launch party was relatively easy to pull off; the real work, however, just begins.
ABOUT THIS BLOGJohn Defterios’ blog accompanies the weekly business program, Marketplace Middle East (MME) that is dedicated to the latest financial news from the Middle East. As MME anchor, John Defterios talks to the people in the know, finding out their opinions on the big business moves in the region, he provides his views via this weekly blog. We hope you will join the discussion around the issues raised.
SHOWTIMESFriday: 08:15, 19:45
ALL TIMES GMT