South Mediterranean Countries Research Articles

Financial Openness and Technology Catch-up

This study analyses the effects of financial openness on productive efficiency and technology catch-up in four countries in the Basin (Algeria, Egypt, Morocco and Tunisia), as compared to a group of developed countries (France, Germany, Japan and the UK) over the 1985–2005 period. Using the stochastic production frontier with variable inefficiency approach (Battese and Coelli, 1995) and the metafrontier technique (Battese et al., 2004), we show that, with the exception of Tunisia, the productive efficiency of countries under consideration has continuously declined. We also identify an ever-widening technology gap for the South Mediterranean countries caused by among others, a slowdown in the opening-up of their financial markets starting from the second half of the 1990s.

Dynamic Specialization and Convergence of MENA Countries

Specialization plays an important role in economic performances. Theories of international change predict that countries tend to specialize in the product where they have a relative advantage. In this case, developing countries cannot catch-up the developed ones. However, some growth theories predict that developing economies converge toward the developed ones since they realize a higher growth rate. That has been the ultimate object of some Mediterranean countries when they have signed an association agreement with the European Union. The aim of this paper is to verify if that has been a convergence of the per capita income of four Mediterranean countries (Egypt, Morocco, Tunisia, and Turkey) toward the one of the two richest European Union (Germany and France). The results issues from an empirical investigation denote that there is a divergence of per capita income and this one is the result of a bad specialization of the south Mediterranean countries.

Financial Liberalization, Banking Crises and Economic Growth: The Case of South Mediterranean Countries

The central aim of this paper is to empirically assess the effects of financial liberalization on economic growth in the presence of banking crises. Our empirical investigation is based on a dynamic panel model for a sample of 10 South Mediterranean countries during the period 1980-2005. Results suggest that equity market liberalization positively affects economic growth in these countries, especially in the period of fragility and banking crises. Capital account liberalization, however, has no significant effects. As expected, banking crises exert negative effects on economic growth. When we control for the presence of macroeconomic stability and appropriate openness sequencing, the anticipated effects of capital account liberalization become significant. We conclude that macroeconomic reforms and trade opening are both crucial prerequisites for the success of the capital account liberalization process.

The Role of Monetary Policies and Macroeconomic Convergence in the Development of Financial Systems in South Mediterranean Countries

This MEDPRO Technical Report shows that the monetary and exchange rate policies conducted by central banks in the south Mediterranean region display apparent homogeneity in their operational frameworks, albeit with some specificities and differing degrees of advancement. While central banks state that price stability is their ultimate objective, failures to control interest rates as operational objectives of monetary policy result in monetary authorities resorting to quantitative approaches to monetary policy, meaning that monetary aggregates and credit targets are being used as intermediate targets of monetary policy.An econometric exercise limited to Maghreb countries (Algeria, Morocco, and Tunisia) has been conducted to analyze the potential scenarios of convergence and monetary policy coordination. Given the high structural heterogeneity and the slow pace of real convergence due to weak commercial integration in the Maghreb, results nevertheless show alternative dynamics in the integration of effective nominal exchange rates, as well as a complete convergence dynamic in exchange rate policies. Partial convergence of monetary policies regarding the stabilization of inflation rates remains an open option for a transitional phase where financial integration is low.

The Impact of Exchange Rate Volatility on Trade Integration Among North and South Mediterranean Countries

The volatility of exchange rates leads to reduction of the international trade volume, mainly in the emerging economies in which all the Mediterranean South countries belong to. Thus, this study discussed the impact of exchange rate issue on South- North trading flow, which comes timely after increasing volatility between Euro and Arab national currencies during the last few years, and after the 2008 financial crisis which led to a sharp reduction of trading in 2008. Therefore, this paper investigates the impact of exchange rate volatility on trading between South- North parts, using monthly time series data for the last ten years from 2000 up to 2011. We use a Vector-Autoregressive Regression model with exogenous variables (VARX) in order to find the reactions of exports and import to point out the impact of the currencies on trade volume between North and South Mediterranean countries. A sample of three South Arab countries is selected including Egypt, Jordan, and Morocco. The causality test was conducted to examine the hypotheses. The study found that the exports of goods from the Egypt to the EU decreases in comparison with the baseline by about 3% as they have become more expensive. The imports from the EU, on the contrary, become cheaper. For Morocco, the increase in imports from the EU in reaction to a 10%-appreciation of the Moroccan dirham increases even by almost 20%. Jordan exports fall sharply in case of a 10% appreciation of the Jordan dinar vis-a-vis the euro. The exports seem less sensitive to an appreciation. Finally, we can conclude that the exchange rate changes can be quite high.

Do Italian expatriates adapt to different cultural contexts? Some evidence from South Mediterranean countries

This study explores Italian expatriates’ inclination to adapt to different cultural contexts, such as Southern Mediterranean countries (SMCs). In emerging countries, expatriates play a very important role: they control the activities delocalised in the host market, they monitor the market, and they overcome the lack of qualified employees. However, cultural differences can limit expatriates’ results. When the home and the host culture are too distant, communication between headquarters and subsidiaries becomes difficult, and performances in the host market can be limited by a different work philosophy and by local employees’ reluctance to accept foreign managers’ knowledge. Expatriates’ capability to adapt becomes consequently very important. This is the case of Italian expatriates assigned to SMCs. The capability to understand local culture and to respect diversity is crucial to build profitable relationships. Considering the observations above, our paper explores Italian managers’ capability to understand distant behaviour, and to adapt to different levels of performance orientation and assertiveness.

Challenges Arising from Capital Account Liberalisation in the Countries of the South Mediterranean Region

This MEDPRO Technical Report confirms the importance of commercial openness and macroeconomic performance (i.e. the control of inflation and stability of current account balance and exchange rate) on growth dynamics in the south Mediterranean countries. In particular, the positive impact of capital account liberalisation is conditioned by the imperative reinforcement of institutional quality, country risk reduction, and government stability. An examination of the Tunisian case shows that only sectors subject to tariff dismantlement within the framework of the Association Agreement with the EU appear to benefit from capital account liberalisation.Furthermore, the report shows that a scenario of capital account liberalisation requires the anticipation of monetary policy reaction functions. It follows that the mechanisms for interest rate adjustment, or inter alia, the interest rates’ reaction to price fluctuations, are weakly volatile. In turn, the analysis shows that an active control of inflation mismatches occurs essentially through exchange rate corrections, thus highlighting the greater interest central banks have in exchange rate stability over real stability. A capital account liberalisation scenario would hence impose a tightening of monetary policy.

Food Prices, Government Subsidies and Fiscal Balances in South Mediterranean Countries

Soaring food and energy prices sparked the revolts in Northern African countries at the end of 2010. Despite government subsidies, consumer price inflation rose, which reduced consumers’ purchasing power. This article empirically investigates the impact of world food prices on inflation and government subsidies for Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the occupied Palestinian territories and Tunisia during the ten-year period 2002-2011. Our findings show an asymmetry in the response of consumer price inflation to world food price shocks, in that soaring world food prices made inflation rise fast while nominal rigidities prevented inflation from falling. Moreover, this paper shows that government balances deteriorated up to 2% of GDP in 2008 and 2011 due to the incremental government food subsidies while they hardly improved in value terms when world food prices sharply fell in 2009.

Средиземноморская политика ЕС в свете интеграционных процессов

The evolution of the EU strategy towards South-Mediterranean countries is investigated in the article. The author addresses main stages of the new transregional interaction model formation (in a multilateral and bilateral format): Barcelona Process, Euromed Partnership, Union for the Mediterranean, European Neighborhood Policy. The assessment of weak points is given, and the prospects of further integration are defined, in particular of the free-trade zone, single route and energy network creation.

Sudden Death due to an Unrecognized Cardiac Hydatid Cyst

Echinococcosis is a human infection caused by the larvalstage of Echinococcocus granulosus. The most commonsites of infection are the liver and the lungs. Cardiac in-volvement is very rare (0.5-3%) even in regions in whichhydatic disease is endemic (the south Mediterranean coun-tries and Africa). We report a case of a 28-year-old man,who died suddenly. According to his family he was an ap-parently healthy man without medical history; he was founddead in the bathroom. The post-mortem examination re-vealed a large cyst (6×8 cm) in the left ventricle of the heartwith an intact wall (Picture 1) and a small daughter cystprotruding in the pericardial cavity (Picture 2, panel A). Thecytologic examination of the cyst fluid demonstrated thepresence of the characteristic scolices and hooklets and con-firmed the diagnosis of cardiac hydatid cyst. Causes of car-diac sudden death involve different mechanisms (1) includ-ing ventricular arrhythmia, cardiac outflow obstruction orconduction tract disturbance, pulmonary and cerebral embo-lism, cardiac tamponade, and myocardial ischemia.

Viral hepatitis a to e in South mediterranean countries.

Viral hepatitis represents an important health problem in the South Mediterranean countries, Egypt, Libya, Tunisia, Algeria and Morocco. Emerging natural history and epidemiological information reveal differences in the overall epidemiology, risk factors and modes of transmission of viral hepatitis A, B, C, D, E infections in the South Mediterranean region. The differences in the in incidence and prevalence of viral hepatitis across North African countries is attributed to variations in health care and sanitation standards, risk factors and immunization strategies. The active continuous population movement through travel, tourism and migration from and to the South Mediterranean countries contribute to the spread of infections due to hepatitis viruses across borders leading to outbreaks and emergence of new patterns of infection or introduction of uncommon genotypes in other countries, particularly in Europe.

Samouel Beji, Le développement financier pour les pays du sud de la Méditerranée à l’épreuve de la mondialisation financière

The central theme of the thesis is the financial development issue in a context of financial globalization for the south Mediterranean Sea countries. The choice of this theme is motivated by the importance of the economic development and the growth in these countries, which are usually the subject of political instabilities and are distinguished by weak political institutions. The aim in this thesis is to point out that the financial openness in the conditions of the south Mediterranean Sea countries would be detrimental to its financial development. By contrast, the financial openness would be beneficial to the financial development, in the presence of the adequate legal and institutional development. The model used links financial development indicators to institutional and legal indicators, in order to calculate institutional thresholds. Further, on the one hand, we check the nature of the relationship existing between institutional development, banking regulation and banking development. On the other hand, we test the relationship that exists between banking development and economic growth. To claim so, we used the GMM (General Method of Moments) system on dynamic panel data for nineteen countries of the MENA region, between 1980 and 2005, in the 2 estimations.

Euro-Med Partnership, Agadir Agreement and the Need for Exchange Rate Policy Cooperation

This research analyzes the need for deep regional cooperation between the South-Mediterranean countries in order to minimize the negative effects form the “Hub and Spokes” nature of the Euro-Mediterranean Partnership. Such a deep cooperation requires coordinating the interdependent exchange rate and macroeconomic policies, but our empirical results demonstrate that the determinants of the behavior of the Egyptian, Tunisian, Jordanian and Moroccan exchange rates diverges a lot. Therefore, we recommend that macroeconomic policy harmonization and strong exchange rate cooperation shall take place within the framework of the Agadir agreement in order to render these economies less prone to regional crisis contagion and more attractive to foreign investors.

The Impact of Spatial Externalities on the Economic Convergence in the Euro Mediterranean Countries

Recent models of economic growth have underlined the importance of external effects on the accumulation of factors of production (ROMER 1986, 1990; LUCAS 1988). The technology knowledge rises with stock of factors of production (human capital, physical capital, R&D, etc.) to witch all the producers contribute with identical manner. The idea is that the knowledge is considered as a free good and spread in entire economy. However, this new approach brings more explanation of economic growth; but it doesn’t integrate the spatial dimension of these externalities.To make better this new theory, we add for fundamental hypotheses of this approach, the hypothesis that these external effects have a geographic dimension affecting the economic convergence.Adopting this new hypothesis, we derive an equation of convergence with external effects issue from the Mankiw, Romer & Weil (1992) model, and we propose to estimate it with the recent methods of spatial econometrics to test the presence of these externalities and to estimate their effects on the economic convergence.For the empirical validation, relying on a panel of 26 euro Mediterranean countries over the period 1995-2004, and using the matrix of distance and the matrix of contiguity to measure the interactions between these countries, we estimate the equation of convergence with spatial externalities derived from the model of Mankiw, Romer & Weil (1992).The results of estimation based on the integration of spatial dimension of externalities permit to appreciate better than the a-spatial growth theory, the effects of these externalities on the economic convergence in the case of economic integration in space. They allow to quantify a double effect of geographic spillovers and to valid the hypothesis that taking account of spatial externalities doesn’t necessarily reduce the divergence between the North and the South Mediterranean countries. The reason of the persistence of this divergence is related to the absence of efficient interactions and coordination between these countries. Key words: External effects, economic convergence, spatial econometrics, economic integration.

The Timing of Work and Work-Family Conflicts in Spain: Who Has a Split Work Schedule and Why?

Spain, as other south-Mediterranean countries, is characterized for the predominance of split work schedules. Split work schedules typically consist of 5 hours of work in the morning (typically from 9 am to 2 pm), followed by a 2 hour break and another 3 hours of work in the afternoon/evening (typically from 4 pm to 7 pm). Because of the evening work hours, split work schedules are contributing to work-family conflicts in the midst of significantly higher female labor force participation. Our purpose is to examine who has a split work schedule and why. We focus on full-time working women with full-time working partners, for whom the need to reconcile work and family responsibilities is likely to be more pressing. We first find that women with partners with a split work schedule or without children (less than 20 percent our sample) are more likely to have a split work schedule. Yet, despite the revealed preference for a continuous work schedule of the remaining women in our sample, we fail to find evidence of a compensating wage differential for having a split work schedule. We thus examine why and find that younger and less educated women more likely to be constrained in their job choices are more likely to work in the private sector, where split work schedules are primarily found.

Economic sectors and country effects on the return on equity of European firms: a look at tourism and the electronic sectors of the South Mediterranean countries

This work studies the leverage effect on the return on equity in 17 European Union countries, in 14 economic sectors and in greater detail in five Southern European countries which are operating in the tourism and electrical and electronic sectors. The return on equity was used as a measure of the financial leverage effect. The main results indicated significant differences in the average return on equity among firms from different sectors and in the different countries studied. The detailed analysis further showed that in the tourism sector, the return on equity is higher in firms in Iberia, compared with the other Southern European countries. The results of this study are useful for investors, business leaders, and policy makers. From the perspective of potential investors, investment opportunities can be evaluated based on the return on equity of the sectors and countries studied.

Genetic Screening of the G2019S Mutation of the LRRK2 Gene in Southwest European, North African, and Sephardic Jewish Subjects

The G2019S mutation in exon 41 of the leucine-rich repeat kinase 2 (LRRK2) gene accounts for 3-6% of familial dominant Parkinson's disease (PD) and for 1-2% of sporadic PD. It seems that there is a north-south gradient of G2019S frequency in Europe in PD patients, and the frequency of the mutation is up to 41% in North African cases. To obtain a precise estimate of G2019S frequency in populations with relatively elevated incidence of mutation carriers, we have tested for the presence of the G2019S in the south Mediterranean countries. Three thousand one hundred healthy European subjects were compared for the G2019S incidence with 597 healthy Arab subjects originating from five populations in North Africa and with 361 healthy Sephardi Jews from five other populations. The main incidence of G2019S carriers is 1/46 in our sample of North African Arabs, the most elevated carrier incidence (1/30) being found in Moroccan Berbers. An elevated incidence (1/72) is also found in our sample of Sephardi Jews. These results contrast with the ones we found (1/1550) in a sample of 3100 healthy subjects originating from 15 populations of southern Europe. Six microsatellite markers were used in the 20 G2019S carriers we found, to conduct a haplotype analysis. Our finding on the elevated incidence of the G2019S mutation in North African Arabs and in Sephardi Jews, Berbers being the people where the mutation probably originates from, has some important consequences for future genetic diagnosis and counseling for PD in these populations.

The sustainability of fiscal policy: evidence from a panel of six South-Mediterranean countries

This article aims at assessing the sustainability of fiscal policies in a panel of six South-Mediterranean countries, namely Egypt, Israel, Lebanon, Morocco, Tunisia and Turkey. First, using panel data unit-root tests proposed by Im et al. (2003), Maddala and Wu (1999), and Choi (2001), econometric findings reveal that the variables of public expenditure, revenue and domestic debt in level are not stationary. However, employing panel cointegration tests designed by Pedroni (1999), it is found that government spending and revenue are cointegrated. This implies that fiscal policies in these countries are sustainable in the long run, i.e. they are consistent with inter-temporal budget balance in accordance with the present-value approach.

Seawater desalination using nuclear heat/electricity — Prospects and challenges

The desalination of seawater using nuclear energy is a feasible option to meet the growing demand of potable water. Over 150 reactor-years of operating experience of nuclear desalination have been accumulated worldwide. Several demonstration programs of nuclear desalination are also in progress to confirm its technical and economic viability under country specific conditions, with technical co-ordination or support of IAEA. Recent techno-economic feasibility studies carried out by some Member States indicate the competitiveness of nuclear desalination. This paper presents the salient activities on nuclear desalination in the Agency and in the interested Member States. In particular, some data from the feasibility studies carried out in the two south Mediterranean countries — Egypt and Tunisia — for their nuclear power and desalination projects are presented. Economic research on further water cost reduction includes investigation on utilization of waste heat from different nuclear reactor types for thermal desalination, preheat reverse osmosis using condenser cooling water return as feed and hybrid MED–RO desalination systems. The details of these are discussed. The main challenge for the large-scale deployment of nuclear seawater desalination is the lack of infrastructure and resources in the countries affected by water scarcity problems which are, however, interested in adoption of nuclear desalination for the sustainable water resources in the coming years. Socioeconomic and environmental aspects and the public perception for the nuclear desalination projects are also important factors requiring greater information exchange. These aspects are discussed while considering an integrated nuclear desalination system.

Benefits and barriers to the implementation of renewable electricity clean development projects: the case of the south Mediterranean basin

This paper shows how Clean Development Mechanism (CDM) projects in renewable electricity (RE-CDM projects) may contribute to the sustainability of South and East Mediterranean Countries (SEMCs). It also shows that several factors make the implementation of these projects difficult, including the relatively weaker CDM institutional capacity of SEMCs. Therefore, countries in this region should individually analyse the extent to which they can profit from them. If they believe these projects can bring them substantial benefits, then they should develop a coherent CDM strategy and strengthen their institutional capacity to host them.