11TH MEDITERRANEAN LOGISTICS & TRANSPORT FORUM JUNE THE 18TH IN BARCELONA

The Potential of Mediterranean Transport and Logistics Integration

INFRASTRUCTURE + LOGISTICS = Economic transformation

Patricia Veevers-Carter, World Bank

CONTENT

• Why is regional integration of infrastructure necessary?

• Why is it not happening?

• What to do?

• IFI support, including WBG

2

WHY IS THE INTEGRATION OF REGIONAL INFRASTRUCTURE NECESSARY?

• Geography & proximity, density & intensity of traffic mean high returns to integrated infrastructure investments

• Leverages assets for the region’s countries and integrate economies of the region into new and emerging global supply chains => enhanced economic competitiveness, economic diversification

3

WHY IS IT NOT HAPPENING?

$7b

$228 b

$59b

3% vs 17% vs 60%4

WHY IS REGIONAL INTEGRATION OF INFRASTRUCTURE NOT HAPPENING?

• Infrastructure still a serious constraint on supply chain effectiveness, including ports and inland logistics in large urban environments, especially in Mediterranean countries

• However, major issues confronting all MENA countries are soft side issues, namely Non Tariff Barriers, such as Trade/customs procedures => “surcharge”

5

TRADE COSTS VERY HIGH FOR INTRA-REGIONAL TRADE

40% 50% 60% 70% 80% 90% 100% 110%0%

50%

100%

150%

200%

250%

300%

350%

DZA-ESP

DZA-FRA

DZA-ITA

DZA-MARDZA-TUN

FRA-ESPFRA-ITA

ITA-ESP

MAR-ITA

MAR-ESPMAR-FRA

MAR-TUN

TUN-ESPTUN-FRA

TUN-ITA

Comparison Maghreb Europe

Industrial Products

Agric

ultu

re

“surcharge” explains the low level of intra-regional trade 6

WHY IS REGIONAL INTEGRATION OF INFRASTRUCTURE NOT HAPPENING?

• Weak public- private dialogue due to structure of the productive sector and the small share of manufacturing, especially in oil countries => Regional integration agenda is more government-led with less voice of the private sector.

• Cooperation between countries, and trade levels, including neighbors are especially low in MENA. With exception of GCC, little implementation of cross border projects, including where there is an existing REC such as the Arab Maghreb Union (UMA) => despite Pan Arab Trade Area, countries apply more restrictions to trade between themselves than with third countries in the form of non-tariff barriers.

• No incentives nor mandates to prioritize regional integration, even at sub-regional levels, eg UMA

7

DRIVERS FOR IMPROVEMENT OFTEN EXTERNAL TO REGION

8

WHAT TO DO?

Action Plan depends on which group of countries:

• Maghreb (Algeria, Libya, Morocco and Tunisia): Morocco and Tunisia have done comparatively well in trade facilitation and logistics; Libya yet to catch up, while Algeria at an intermediate stage.

• Mashreq (Iran, Iraq, Jordan, Lebanon, Syria): Iran, Iraq, Syria are yet to catch up, while Jordan and Lebanon have done comparatively well in trade facilitation and logistics.

• Egypt: intermediary stage

• GCC : much more advanced =>moving towards a customs and monetary union

9

WHAT TO DO?

• Regional studies have been prepared for Mashreq and Maghreb, with accompanying action plans.

• Action plans combine parallel capacity building and plurilateral activities to be implemented at the sub-regional level

• Examples of parallel capacity building: Trade Facilitation assessments

• Examples of plurilateral activities: Customs Integration, LOGISMED

10

IFI SUPPORT

• Regional Studies on Trade facilitation and Infrastructure prepared by WB - Maghreb study prepared in liaison with UMA secretariat and participation of the five Maghreb countries). Linkages of the proposed Maghreb Action Plan with ongoing EU/EIB/UfM initiatives

• LOGISMED - an initiative launched by the EIB to develop the logistic sector in Mediterranean Partner Countries (MPCs) through creation of a network of Euro-Mediterranean Logistic Platforms (EMLP)

• TRANSTRAC – an initiative launched by the EIB enhancing economic development and employment creation in the Transition Countries (Deauville partnership) by building up the transport sector capacity to identify, prioritise, prepare and implement projects that are consistent with both national and regional objectives, and that can meet the due diligence requirements of potential international funders and as a result help connect the region and integrate it into the global economy, support trade, boost development and address key transport challenges

11

THANK YOU

Pveeverscarter@worldbank.org