Mediterranean Policy ProgramSeries on the Region and the Economic Crisis Prepared in Partnership with Paralleli Euromediterranean Institute

(Turin)

Policy Brief
October 2012

Summary: The current transition phase in the Middle East and North Africa region goes along with relevant social and economic transformations. What will the immediate repercussions on foreign direct investment coming from the main transatlantic countries be? Are there already significant variations? Are we facing a disruption of sorts? Or, on the contrary, are the main actors laying the groundwork for new economic agreements, which will substantially change the existing balance? What will be the role of Brazil, Russia, India, and China in the near future?

Foreign Direct Investments (FDI) to the Middle East and North Africa Region: Short- and Medium-Term Developments
by Sergio Alessandrini*

Relevant Social and Economic Transformation More than a year after the beginning of the uprisings that overthrew the autocracies in several North African countries, it is possible to assess their economic cost and impact on the Euro-Mediterranean integration process. The political and social crisis started by affecting the economies of Egypt, Tunisia, Libya, and Syria, which entered recessions due to the contraction of the revenues from exports, tourism, and migrants remittances. The negative effects were amplified in 2011 by the progressive deterioration of the economic fundamentals in the eurozone, North African countries most important trading partner. The long-term perspective of Euro-Mediterranean integration, focused on trade
* Sergio Alessandrini has been the chair of political economy at the University of Modena and Reggio Emilia, Faculty of Law since 1991. He is member of the Scientific Committee of FEMISE, the EU-Mediterranean network that gathers more than 90 members of economic research institutes. His research interests cover the broad range of theoretical and empirical studies of the impact of economic integration, in particular international trade and investment, as well as related policy and measurement issues. In the last 20 years he has served as an international expert for the World Bank, UNCTAD, UNIDO, and EU/DG Industry and RELEX on projects in the EuroMediterranean region.

integration and direct investments, has been questioned and criticized for both the nature1 and the efficiency2 of its political and economic instruments. From both sides of the sea, the longterm vision has been replaced with a wait and see policy. In the meantime, prospects for foreign investments changed dramatically. In 2011, the six southern Mediterranean countries3 lost $7.2 billion in FDI, from $17.7 billion in 2010. The general concern that arose within the financial community about this double-digit reduction tends to distort the dimension of both political and economic changes, risking the failure to understand the firms investment decisions from a long-term perspective. In fact, it is important to consider the following aspects: The decrease originating with the Arab Spring revolutions overlaps a declining

1 Joel Peters (2012), The European Union and the Arab Spring: promoting democracy and human rights in the Middle East, Lexington Books, Plymouth U.K. 2 FEMISE (2010), The Euro-Mediterranean Partnership at Crossroads, Marseille. 3 Algeria, Egypt, Jordan, Lebanon, Morocco, and Tunisia. The drop is even larger when considering Libya and Syria.

1744 R Street NW Washington, DC 20009 T 1 202 683 2650 F 1 202 265 1662 E info@gmfus.org

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Policy Brief
trend in total inflows that began in 2008 and continued in the following years. The investors perceptions and expectations will also depend on the role assigned to foreign investors in each hosting country. Yet, the most notable examples are the different leaders reassuring statements in favor of the continuation of the pro-FDI pre-revolutionary legal framework. Despite that, the business climate has dramatically changed, inside and outside the region. North African economies are affected by wasted human resources. Because of insecurity and decreasing revenues from tourism, exports, and remittances, those countries depend on foreign investment more than ever to help fund job creation and improve productivity. The international community is waiting for the new economic programs before making long-term decisions. Table 1: FDI net inflows to MED region, 2006-2011 ($ millions) 2006 2007 2008 2009 2010 2011 7,553 6,082 7,839 6,387 5,351 6,233 Maghreb 1,795 1,662 2,594 2,748 2,264 2,571 Algeria 2,449 2,805 2,487 1,952 1,574 2,519 Morocco 3,308 1,616 2,758 1,688 1,513 1,143 Tunisia Mashreq Egypt Jordan Lebanon Syria Libya MED Region Percentage Variation
17,377 10,043 3,544 3,132 659 2,064 26,994 18,818 11,578 2,622 3,376 1,242 3,850 28,751 6.5% 18,121 9,495 2,826 4,333 1,467 3,180 29,140 1.4% 15,442 6,712 2,413 4,804 1,514 3,310 25,139 -13.7% 14,167 6,386 1,651 4,280 1,850 1,909 21,426 -14.8% 5,245 -483 1,469 3,200 1,059 0 11,478 -46.4%

Source: UNCTAD, WIR 2012

Political Course: Different Paths and FDI Slowdown The transition has taken very different paths in each country. Tunisia replaced its former authoritarian government quickly, which prevented a further deterioration in the balance of payments after some relevant disinvestments and capital outflows in the first quarter of 2011. Other countries, like Egypt, Libya, and Syria are stuck in transition phases, which led to a steady deterioration of the economy. A third group of countries, which includes Morocco, Jordan, and Lebanon, was only indirectly affected by the revolutions and did better, although FDI inflows towards these countries did decrease in 2011 (partially counterbalanced by generous development aid from Gulf Arab neighbors).4 All these developments occurred within a deteriorating global context and after a robust growth in the last decade. In general, FDI inflows decreased after 2008 international
4 Energy-exporting Gulf Arab states decided at a summit on December 20, 2011 to set up a $5 billion Gulf development fund for development projects in Jordan and Morocco, ANA News Agency, December 21, 2011. The amount is more than twice the value authorized to EIB in September 2011 for the five Deauville Partnership countries ($1.28 billion special fund to start investments in in Egypt, Morocco, Tunisia, Libya, and Jordan in response to the wave of political change).

crisis (Table 1 and Figure 1) and are still far below the pre-crisis level;5 thus, it was the recession in the European markets that led to a sharp reduction of imports and international financial flows. The crisis curbed FDI by 15-20 percent in the following two years. Then FDI inflows plummeted in 2011 from $21.4 to $11.5 billion (-46 percent). The evolution of the North African economies has been varied because of the differences in their economic structures. The first countries to be hit were Egypt and Morocco, which were highly exposed to U.S. and European banks and with well-developed equity and bond markets. Other countries (Tunisia, Lebanon, Jordan) were more resilient, thanks to their greater ability to safeguard their foreign exchange reserves and control their budget deficits.6 The Arab revolutions caused a further shock that modified the investment decisions in three countries: Egypt and Libya, the most affected, and Tunisia. Only two countries Morocco and Algeria avoided the crisis and experienced a significant rise in FDI inflows, 60 and 13 percent respec5 UNCTAD (2012), World Investment Report 2012: Towards a New Generation of Investment Policies, Geneva 6 FEMISE-FEMIP (2011), The crisis and ways out of it in the Mediterranean countries, Marseille.

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Figure 1 FDI net inflows (US$ milliions)
14000 12000 10000 8000 6000 4000 2000 0 -2000 2006 2007 2008 2009 2010 2011 Algeria Egypt Jordan Lebanon Morocco Tunisia Syria Libya

of some Egyptian corporates towards other North African countries (cement in Algeria and Syria, telecommunication in Tunisia), and smaller inflows (from 3.1 percent of GDP in 2007-2008 to less than 1 percent in 2011). Regarding investment sectors, while foreign investors have actually shown a high degree of resistance in the natural resource-based and energy sectors (Figure 3), major drops are reported in manufacturing, tourism, and real estate projects, which are driven in particular by Arab and domestic investors.

Source: UNCTAD and statistics from Central Banks for 2011

tively. Lastly, some countries Syria, Lebanon and Jordan were negatively affected by the situation in other partner countries. Main Actors

Egypt In 2011, Egypt experienced the biggest drop in incoming Although the BRIC-states (Brazil, Russia, India, and China) FDI, which fell from the 2008-2009 peak (more than $10 have also targeted Egypt as an attractive destination, their billion) to $6.4 billion (2010). In 2011, the disinvestments role as foreign investors is still marginal, as they prefer to exceeded the value of new invested capitals and, for the first time in its recent history, Egypts FDI net Figure 2 Egypt: FDI inflows (US$ millions) balance is negative (-$483 million, Figure 2). The attractiveness for business that Egypt built 6000 up during the last decade has been eroded or even lost. 5000 On closer examination, however, it seems that Egypts loss of attractiveness has far more to do with the 2008 financial crisis than with the Arab Spring, although the two shocks are now tied together. A severe capital outflow occurred in the second half of 2008, as foreign investors pulled out of equity and government debt; capital leaving the country accounted for more than 1 percent of GDP. In the following two years, this percentage doubled. The figures also reflect a structural change in the balance of payment: larger outflows for investment
4000 3000 2000 1000 0 -1000
INFLOWS NET Foreign Direct Investment

The result is a change in the FDI origin. U.S. companies, which accounted for more than one-third of the FDI inflows, reduced their commitments just after the 2008 financial crisis, while European companies, in particular in the oil sector, held their position but lowered their financial commitments. The decline of U.S. investments was offset by larger European investments in the energy, manufacturing, and banking sector. By 2011, on a total inflow of $8.1 billion, almost two-thirds came from Europe (Figure 4).

Source: Central Bank of Egypt, Monthly Statistical Bulletin

06q3 06q4 07q1 07q2 07q3 07q4 08q1 08q2 08q3 08q4 09q1 09q2 09q3 09q4 10q1 10q2 10q3 10q4 11q1 11q2 11q3 11q4 12q1 12q2

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Figure 3 Egypt: inflows by sector (US$ millions)
16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2008 2009 2010 2011
Source: Central Bank of Egypt, Monthly Statistical Bulletin

downturn. In 2009, Egypt has been selected by China as one of five African locations to host a Chinese-led Suez Economic and Trade Cooperation Zone (SEZ).
Others Tourism and real estate Banking and finance Manufacturing Petroleum

The disorder following the parliamentary and presidential elections is not encouraging, since it shifted the attention away from the economic issues. Investors are beginning to wonder if the situation will ever return to the previous, solid and diversified economic position. Prolonged political uncertainty and worsening security conditions would dent confidence, further delaying the recovery of the economy and triggering Egypts enormous economic potential.

Tunisia The Tunisian evolution has been different, as Figure 4 Egypt: inflows by country (US$ millions) the exposed sectors are more integrated with the European economies. The distribution of 16,000 FDI through different sectors resembles the 14,000 Egyptian case, with a large share of investments in the energy sector, but with larger 12,000 manufacturing and re-export sectors. Tunisia 10,000 Other countries in 2011 showed a 21 percent drop in FDI inflows, while at the same time only 153 Arab Countries 8,000 enterprises (out of more than 3,100) departed United States 6,000 the country. The effects of disinvestments are Europen Union limited to a small number of companies and 4,000 cannot be considered as a potential systemic risk. In particular, the exceptional amount of 2,000 disinvestments in the first quarter of 2011 is 0 explained by the sale of the Tunisian subsid2007 2008 2009 2010 2011 iary of an Egyptian telecom company, rather Source: Central Bank of Egypt, Monthly Statistical Bulletin than a general disenchantment of the foreign companies that have invested in Tunisia over the last decade focus on the promotion of bilateral trade. Some large Indian (Figure 5). The slowdown in energy investment during companies opened subsidiaries or bought companies in the 2009-2010 recession has been compensated for by an the last decade, especially in the energy, infrastructure, increase in investment in the manufacturing sector, the consumer goods, and chemicals sectors. Nevertheless India most dynamic component of the development model within remains a small investor, despite the fact that it has become the Euro-Mediterranean Free Trade Area (EMFTA) frameEgypts fourth trading partner. work. The Incentive Code has a positivist approach, as it dictates the sectors in which FDI are allowable, although China is also a dynamic partner, with some $200 million the presence of different authorities has created some invested, but these are great expectations to shore up ambiguities in the approval process. Agrarian lands cannot dwindling overseas investments after the global economic be bought by foreign entities, but industrialized land is

Mediterranean Policy ProgramSeries on the Region and the Economic Crisis

Policy Brief
Figure 5 Tunisia: FDI Inflows (US$ millions)
1,200 1,000 800 600 400 200
08q1 08q2 08q3 08q4 09q1 09q2 09q3 09q4 10q1 10q2 10q3 10q4 11q1 11q2 11q3 11q4 12q1 12q2

Inflows Net Foreign Direct Investment

0 -200 -400 -600

lative reduction of over 50 percent in the manufacturing sector (Figure 7). The disinvestments after the material damages in some governorates and the temporary closures for labor disputes with the trade unions in two large cable factories in late 2011 and 2012 are signs of the ongoing tensions between trade unions and foreign companies due to the fear of losing jobs during the recession in the eurozone, but the effects are confined to specific regions or factories. Morocco The Arab Spring has only marginally affected the Moroccan economy, which differs significantly from those in Tunisia and Egypt. Development policies have focused on achieving higher levels of investments, both internal and external, oriented to the non-farm sectors. The main aim was to support the economic growth and to diversify the economic structure, which is still strongly focused on agriculture. The overall average level of FDI net inflows increased in 2011 from $1,574 to $2,519 million, which is a value substantially aligned with the 2007-2008 average (Figure 8). The reduction of $1.4 billion FDI inflow from France, due to the completion of investment program in the communication sector, has been compensated by a 40 percent investment increase from the Emirates, Saudi Arabia, and the United States.

Source: Central Bank of Tunisia, Financial Statistics Bulletin

Figure 6 Tunisia: inflows by sector (US$ millions)

3,000 2,500 2,000 1,500 1,000 500 0 2007 2008 2009 2010 2011
Source: FIPA, Report on FDI in Tunisia December 2011

Others Tourism and real estate Manufacturing Petroleum

available to foreigners. Since the 1980s, these opportunities attracted a large number of continental European companies, with minor interests from Britain and the United States (Figure 6). A large part of investments is made by small and medium enterprises (SMEs), which outsourced the production of some important labor-intensive or medium-technology sectors, from clothing to electronics. The Arab Spring has almost entirely suspended new investment in the tourism and real estate sectors, with a cumu-

Unlike other North African countries, the leading sectors in 2011 are tourism and construction (more than half of FDI inflows), with large participation by French, Swiss, British, and Arab investors. In addition, the completion of the major projects in the free zone of Tangier and the Tanger-MED increased the value and the share of the manufacturing sector (Figure 9). In only five years, the development of port infrastructure and the presence of several large projects attracted more than 450 foreign firms, with significant positive fallouts on employment and future exports. As a results of these trends, we notice a contraction of the EU share in total FDI inflows from 76.8 percent to 58.3 percent in 2011, and the increase

Mediterranean Policy ProgramSeries on the Region and the Economic Crisis

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Figure 7 Tunisia: inflows by country (US$ millions)
3,000 2,500 2,000 1,500 1,000 500 0 2007 2008 2009 2010 2011
Source: FIPA, Report on FDI in Tunisia, December 2011

Europe; a similar strategy of indirect penetration has been implemented by Chinese banks. Other Mediterranean Countries For the other Mediterranean countries, the impact is even more varied. Although at a slower rate, foreign investments continued to flow into the Algerian energy sector. Natural resources and oil and gas exploration remain the basic attraction for investors, despite some attempt to diversify in industry and services (banking and finance). An investigation into the Algerian national oil companys management and its subsequent replacement in 2010 did not slow down the ongoing investment projects either from North America and Europe or from newcomers (Brazil, Argentina, and China). A series of reforms avoided the deterioration of the business climate in Jordan, a small economy highly sensitive to external shocks because of its dependence on energy imports, worker remittances, and foreign investments. However, FDI inflows dropped for two consecutive years to $1.5 billion (from $2.5 billion in 2009). From a geo-political perspective, but also for its immediate economic consequences, it should be noted that in September 2011, Jordan was invited to join the Gulf Cooperation Council,7 strengthening its relationships with the Arab investors. The immediate result is the commitment of the Qatari government to finance Jordanian infrastructure projects for $2.5 billion.

Other countries Arab Countries United States Europen Union

Figure 8 Morocco: FDI Inflows (US$ millions)

2000 1500 1000 500

07q1 07q2 07q3 07q4 08q1 08q2 08q3 08q4 09q1 09q2 09q3 09q4 10q1 10q2 10q3 10q4 11q1 11q2 11q3 11q4 12q1

0 -500 -1000 -1500 -2000

Inflows (credit) Inflows (net)

Source: Office des Changes, Balance des paiements trimestrielle, Rabat

of those from Arab countries in real estate and tourism, up to 29.4 percent from a 15.2 percent in 2010 (Figure 10). The U.S. share, as well as that of the BRICs, remains marginal despite the active presence of some Pakistani, Indian, and Brazilian companies in the mining sector (fertilizers and high-purity phosphoric acid for export) and retail. Recently, an Indian group has diversified its traditional investment to other business opportunities, such as outsourcing and automobile sectors, taking advantage of Moroccos geographic position and linguistic history to target Francophone

Finally, Lebanon was also affected by the recent events. FDI inflows dropped to $3.2 billion in 2011 from $4.8 billion in 2010. Despite the decrease, Lebanon remains the largest recipient of FDI in the Arab world with a share of 12 percent of GDP.

7 The GCC is a political and economic organization whose members are the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait

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Figure 9 Morocco: inflows by sector (US$ millions)
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2007 2008 2009 2010 2011
Source: Office des Changes, Balance des paiements trimestrielle, Rabat

Other services Tourism and construction Telecommunications Banking and Finance Mining Mining

ness climate in the last decade, asking for the alignment of the incentives to the international standards, or for more liberal and deeper bilateral trade agreements? Employment and job creation have become a first-order priority, more than trade and economic modernization obtained through technology, knowledge transfer, or technological and managerial spillovers to domestic producers. Today, the governments common aim is not only creating more jobs, but also improving the quality of jobs for educated young people.8 Egypt is definitively the country that, during the last decade, managed better to attract a significant amount of market-seeking and resource-oriented foreign investments. Its performance during the EMP moved along these traditional lines. Tunisia, Morocco, Jordan, and Lebanon, on the other hand, moved on a different path. Because of their small size, they could not compete in market-seeking investment, so they opened to efficiency-seeking investment, especially textile, clothing, metals and, more recently, electronics and aeronautics. In these cases, the size of the market is less relevant for investors, whereas the emphasis lays on operative conditions, domestic regulations, governance, political stability, rule of law, and bilateral agreements with major partners.

Figure 10 Morocco: inflows by regions (US$ millions)

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2007 2008 2009 2010 2011
Source: Office des Changes, Balance des paiements trimestrielle, Rabat

Other Countries ARAB COUNTRIES USA EU

The Economic Impact: EMP at Risk? Excluding Egypt and Lebanon, the EU continues to be the largest investor in the MENA region, with an average share higher than 50 percent. However, it is difficult to consider North Africa and the Middle East as a common subject of partnership resulting from a shared experience of economic and political cooperation. The Arab Spring has opened new paths and new risks. Is it still possible to continue with the same old logic of the Euro-Mediterranean Partnership, which improved the busi-

At a regional level, attracting foreign companies is not simply a matter of improving the investment climate, reducing the cost of doing business, offering cheap credit, tax holidays, or introducing market-friendly economic reforms. It is a political problem: how far implementing a liberal framework of rules goes toward enhancing the competitiveness and the productivity of the private sector and creating income flows independently from the patronage network of the regime, thereby challenging the rulers position.
8 Since the public sector has been dismantled under the directives of structural adjustments in the 1990s, 70 percent of the work is in the informal sector or self-employment in the large cities, with massive immigration from the agricultural periphery to the center.

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It is essential to recognize the unique challenges that foreign firms face when they decide to enter and start negotiation with the local partners and authorities in the Mediterranean (MED) region. Foreign investments are protected by national laws (with different degrees of restrictions among the North African countries) and none of the North African countries has changed the incentive system. Some projects have been suspended by decision of the foreign investors, some other (in Egypt and Tunisia) were suspended by the decisions of the courts. What has changed, and the courts have made it clear, is that the former rulers and their authoritarian regimes have been overturned by the civil society and their replacement has weakened all informal agreements with the former political elites and their cronies.9 New opportunities and responsibilities will be created for the newcomers, but this will take time. Ownership rules are another important issue. Apart from large state-owned enterprises, which have been largely privatized during the last decade (with the exception of Algeria), the vast majority of companies are family-owned with a strong commitment with the ruling class.10 For countries with low domestic savings and relaying on FDI for their development policies, the deterioration of the revenues from tourism and migrant remittances has boosted the financial characteristic of FDI in the growth process, instead of its intrinsic capacity to enhance the productivity growth and the employment development. Stabilization on the 2011 level could lead to a further recession if FDI goes toward less productive, speculative, or protected sectors. Instead, the non-financial aspects ask for renewed attention to the entrepreneurial characteristic and the degree of competition in the region. Local companies in Egypt, Tunisia, Morocco, and Lebanon, even large ones, are familyowned firms that have grown in the last decade and tend to be widely diversified conglomerates, typical of markets with strong economic growth, little competition, and no shortage of capital. They are run by the family and for the family. The past experience has shown that foreign investors may find
9 Grant C. (2011), A new neighbourhood policy for the EU (Policy Brief). London: Centre for European Reform. 3 and 4. 10 This entrepreneurial character and the negative effects on growth have been discussed in the World Bank report From Privilege to Competition. Unlocking Private-Led Growth in the Middle East and North Africa, Washington, DC, 2009 Although countries across the region have reformed at different times and paces, the business elites share similar characteristics in the way that they emerged their privileged relation to the states that often ensured their prosperity and to the successive waves of new entrants, page 187.

obstacles to compete with them and they had to accept the local rules and conditions,11 which are often unpredictable and discretionary. The absence of a vibrant private sector of SMEs has been seen as a regional failure, not simply a failure of individual countries. The Mediterranean region remains fragmented in isolated geographic units with limited economic linkages among them, despite the efforts made by the Agadir Agreements and the EMFTA. There are very few examples of MED-MED investments in the industrial sector (paper and carton board, chemicals, pharmaceutical products) or in services (distribution and banking), but the impact is poor, while the attention of the policymakers has moved to the BRICs. Such fragmentation carries a heavy cost for the regional economy. Conclusions The lesson learned from the recent experience is that FDI policies must aim at different goals. Investments must generate jobs and employment opportunities. This is important for Egypt, Tunisia, and Libya, where investments are concentrated in the less labor-intensive oil and gas sectors, while a better distribution in other manufacturing or service sectors has improved and stabilized Morocco and Lebanon. A second aspect is whether the drop in FDI in North African countries has been exacerbated by the eurozone financial crisis. This is true for Morocco, as EU share of FDI dropped to 58 percent in 2011 from 76 percent in the previous years, but not for Egypt and Tunisia, where the European share increased after the contraction of Arab and U.S. investments. The softer position of the U.S. investors, in Egypt in particular, has not been replaced by more inflows from European and Arab investors, and the dramatic figures of 2011 justify the aim to diversify from their traditional partners. There are signals in the economic agreements and bilateral contacts that the region seeks to reduce dependence on European countries and that it is interested in attracting more Gulf (in Morocco and Jordan) or Brazilian and Chinese investment (in Morocco, Egypt, and Algeria).
11 An interesting case study is the history of a chemical foreign enterprise that had to face the local monopoly. See Roncolato G (2007), Al.Che.Mi Odissea in Egypt, Vol 1 and Vol 2, Cairo, September 2007.

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FDI trends indicate that the BRICs are bound to become economically more important in the future. They are emerging economies that benefitted from globalization, and their recent investments are definitively oriented to the mineral-rich North African countries, in particular to Morocco (phosphates and chemical industry), Egypt (chemical industry), and Algeria (energy and construction). This strategy of securing a stable source of imports may evolve into less traditional sectors in order to gain an increasing share in the local consumer markets (as China intends with the Egyptian SEZ or Russia in the Egyptian telecom sector). This stepping-up approach will probably lead to a further developments where the final destination might be the larger European market.
About the Partners

The German Marshall Fund of the United States (GMF) is a non-partisan American public policy and grantmaking institution dedicated to promoting better understanding and cooperation between North America and Europe on transatlantic and global issues. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has seven offices in Europe: Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, and Warsaw. GMF also has smaller representations in Bratislava, Turin, and Stockholm. www.gmfus.org

Paralleli Euromediterranean Institutes mandate is to contribute to the creation of a Euro-Mediterranean area of freedom and of economic and social development. The institute acts at the local, national, and international level with the aim of meeting the needs of the North-West region of Italy concerning its relations with the other sides of the Mediterranean Sea. The activities of the Institute fall within the process of Euro-Mediterranean partnership initiated by the European Union with the 1995 Barcelona Process and currently undergoing a major relaunch through the Union for the Mediterranean, since July 2008. Paralleli intends to contribute to the reinforcement of political relations, economic cooperation, cultural exchange, and human flows between the European and the South-East Mediterranean countries. Its main objective is to promote dialogue at cultural, social, and political level between the societies of the Mediterranean countries, with the aim of encouraging and improving economic relations between them, with a particular focus on the dimension of sustainability and co-development. For this reason, the institute has decided: to involve civil society in the development of Euro-Mediterranean relations; to create and to support networking in the Mediterranean area; and to increase the value of research in order to suggest truly effective policies to local, national, and international actors. www.paralleli.org