What the Med Union will bring
From The Economist:
Already there is substance in the haze. The Mediterranean’s southern and eastern coasts are pulling in huge quantities of foreign direct investment, on a scale second only to China among emerging economies (see chart 1). The wave started about five years ago (…).
This is not the story usually told about the Mediterranean’s poorer coasts. The MEDA ten (a group of southern and eastern economies) have an average income per head of only $6,200, putting them roughly where western Europe was in 1950 and Romania was in 1975. Even though the gap in GDP per head has been closing, thanks to falling fertility rates as well as relatively faster economic growth, at today’s pace it would take almost 160 years for the MEDA ten to catch up with the European Union average. Unemployment is probably between 20% and 30%, even though official figures say it is around 12%.
This last figure helps to explain why Europeans have tended to see the other side of the sea as more of a threat than an opportunity: a source of immigrants, often young and illegal, mainly Muslim and frequently unwelcome. In Italy, Spain and tiny Malta, illegal arrivals are of especial concern. Another reason is nervousness about the region’s political health. Work your way around the map below and you will find few true democracies and much instability, actual or potential.
Yet commerce is scarcely a novelty in the Mediterranean. Centuries ago, the Middle Sea was a hub of world trade: to the Romans, it became mare nostrum—“our sea”—surrounded by the empire. Now the inflow of foreign direct investment may be reversing a long relative decline in the fortunes of the southern and eastern shores. The MEDA economies have managed to step up their growth rates to 4.4% since the turn of the century. A summit to be held in Paris this weekend may give the Mediterranean’s revival a further push.
(…) Twenty years ago, Europe’s car industry stopped building new factories in low-wage Spain and Portugal, and turned to eastern Europe, including Turkey. The step across the Med, to a country where wages are one-fifth of what they are on the northern shore, is of great significance. (…) Now the capital is moving to the labour: the mountain is moving to Muhammad, if you will.
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