Arab Maghreb Union needs a whole new foundation

Arab Maghreb Union needs a whole new foundation

Arab Maghreb Union needs a whole new foundation
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This year marks the 33rd anniversary of the establishment of the Arab Maghreb Union. At one time, the union was an ambitious undertaking, curiously timed and influenced by the changing tides of peak globalization giving way to rapid regionalization, amid a rising tide of knee-jerk protectionism. The plan was simple. Algeria, Morocco, Tunisia, Libya and Mauritania were going to form an economic and political union, integrating a geographically contiguous and culturally cohesive part of the world into a formidable pan-Arab bloc for interdependence, free trade and mutual cooperation.
In hindsight, however, such a project was perhaps too far ahead of its time, given the glaring contraindicatory realities on the ground, not excluding the permanent lack of political will to realize such a vision, resulting in the union’s disappointing state today.
Nonetheless, the rationale for this strange union remains solid even to this day, despite its dormant status. The Maghreb is strategically located between the Americas across the Atlantic, with Europe to the north, the Sahel and sub-Saharan Africa to the south, the Middle East and wider Eurasian continent to the east — in addition to a contiguous coastline straddling the Mediterranean’s busy maritime routes.
A fully integrated union could have, and can still, become a major global hub rivaling the growth of a now mostly fully consolidated Gulf Cooperation Council founded earlier in 1981.
In the late 1980s, at the time of the union’s founding, roughly four decades of record growth in global gross domestic product had begun tapering as the West’s advanced economies moved to undercut an emergent China, as well as stall the rise of Japan and the four Asian Tigers, Singapore, Hong Kong, Taiwan and South Korea. Singular economies could no longer attain or maintain high levels of global competitiveness unless they formed or joined regional blocs to further develop their competitive advantages, in turn boosting waning growth rates and reducing the numbers of jobless.
Over the years, increased regionalization — not protectionism or unilateralism — that allowed integrated economies to specialize has proven key to achieving sustainable development principles and long-term resilient growth, particularly across the developing world. Given the present high levels of global interdependence and sophistication, the union’s overall strategic location, particularly its proximity to a now $17 trillion European common market, would have fueled periods of unprecedented growth, potentially lifting millions out of poverty and transforming Maghrebi rentier economies.
After all, foreign trade practices and policies have historically influenced domestic resource allocation, economic growth and development that are essential to maintaining competitiveness and external equilibrium. Additionally, with greater integration and cooperation, rentier states would theoretically be able to undergo less costly or painful transitions as they move to diversify their economies away from a massive dependence on, for example, the extraction and export of hydrocarbons. A series of external economic shocks since the 1980s has consistently demonstrated why vulnerable rentier states ought to prioritize transitions and embrace interdependence to boost resilience.

A fully integrated Arab Maghreb Union could have, and can still, become a major global hub.

Hafed Al-Ghwell

Unfortunately, the Maghreb remains among the most fragmented regions in the world today, despite its more than 100 million-strong population and a combined economic output of $325 billion. In comparison, other regional organizations and associations on the African continent, for instance, have expanded in scope and sophistication in recent years to the point of attracting North Africa to join the ranks of, say, the Common Market for Eastern and Southern Africa, and the Economic Community of Western African States.
It is a stinging indictment of years of stagnation, intransigence, critical failures in and outright hostility toward Maghrebi cooperation that is now bleeding the region’s untapped potential to the tune of roughly $7 billion a year. In other words, had the Arab Maghreb Union succeeded in establishing a formal trading bloc by eliminating barriers, adhering to a joint trade policy and creating a common market, the region could have realized a nearly $225 billion growth in GDP over the three decades since its founding.

However, the painful reality today is that intra-regional trade remains at a dismal half a percent of the region’s total imports and exports, despite obvious, well-documented upsides to relinquishing harmful protectionist and isolationist policies that continue to shrink opportunities for growth. Worse yet, the profound implications of a confluence of global challenges such as a pandemic-induced economic downturn and supply chain disruptions, plus climate change and the looming post-oil world, have yet to raise serious questions about renewed prospects to re-examine Maghrebi integration.

Currently, the region trails all six major trading blocs on the African continent. The extremely low levels of intra-regional trade are mostly due to long-standing rivalries and unresolved tensions between the Maghreb’s two biggest economies, Algeria and Morocco, as well as logistical constraints and trade protections, that make it difficult for companies to seamlessly operate within the region.
Maghrebi countries already possess the required economic structures and resources to boost trade, cooperation and integration within the region. They also do not lack the capacity to reform current investment and trade policies in order to liberalize the movement of goods, capital, people and services.
Deeper and more comprehensive integration would make a renewed Maghreb Union a more attractive and stable partner for trade and other forms of cooperation. It would also enable Maghrebi countries to enter into mutually beneficial tripartite agreements with other regional blocs spanning the globe, opening the door to enhanced cooperation in other arenas, such as counterterrorism, counterinsurgency and irregular migration.
The key to accelerating intra-Maghreb cooperation, however, should not be limited to patchwork interventions designed to overcome notable socioeconomic deficiencies or disparities. Sustainable integration will require a consistent, coherent and convergent set of economic policies and systems that cater to the Maghreb’s idiosyncrasies, as well as long-term coordination on trade volumes and investment allocations in shared projects.
This is not unique to the Maghreb alone — boosting intra-Arab trade is only possible via similar prioritizations in production growth, distribution and division of labor as well. Should any attempts at rekindling cooperation emerge, Maghrebi leaders must dispense with the propensity to maintain the status quo in favor of launching a much more radical effort that can overcome high levels of protectionism, wide policy disparities and the lack of coordination, especially at the legislative level.
In other words, the Arab Maghreb Union may need a whole new foundation that is more sensitive to the need for a comprehensive framework for cooperation suited to addressing today’s and the future’s urgencies instead of becoming just another avenue for airing grievances.
More importantly, however, time is quickly running out and the window of opportunity is considerably narrower than it was 33 years ago.

Hafed Al-Ghwell is a non-resident senior fellow with the Foreign Policy Institute at the John Hopkins University School of Advanced International Studies. He is also senior adviser at the international economic consultancy Maxwell Stamp and at the geopolitical risk advisory firm Oxford Analytica, a member of the Strategic Advisory Solutions International Group in Washington DC and a former adviser to the board of the World Bank Group. Twitter: @HafedAlGhwell

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