IMF urges Maghreb’s economic integration

The IMF said regional integration could raise each AMU member’s GDP growth by an average of 1 percentage point.
Sunday 24/02/2019
Challenges and hopes. A 2016 file picture shows Tunisian Foreign Minister Khemaies Jhinaoui speaking during a meeting of the Arab Maghreb Union (UMA) Foreign Affairs Council in Tunis.    (AFP)
Challenges and hopes. A 2016 file picture shows Tunisian Foreign Minister Khemaies Jhinaoui speaking during a meeting of the Arab Maghreb Union (UMA) Foreign Affairs Council in Tunis. (AFP)

TUNIS - The International Monetary Fund (IMF) spurred North African countries to work for improved economic integration to achieve higher economic growth and improve global trade positions.

“Greater regional integration should be complementary to Maghreb countries’ global integration,” the IMF said in a report assessing gains each country could realise from integration as the region marked the 30th anniversary of the creation of the Arab Maghreb Union (AMU).

Leaders of Algeria, Morocco, Mauritania, Tunisia and Libya exchanged messages February 17, the anniversary of the 1989 launch of the AMU, speaking of the hope of reviving the union as a “strategic choice” despite a stalemate in achieving the group’s bold goals.

“Great ideas like the AMU never die but, for now, the progress of the AMU train is blocked by the Western Sahara issue,” said Mauritanian expert Mohamed El Mokhtar Ould El Khalil at a meeting of regional intellectuals in Hammamet, Tunisia.

“Algeria and Morocco have failed to reach a solution on that issue while the three other countries have yet to succeed in unblocking the impasse,” he added.

The AMU, which includes Algeria, Morocco, Tunisia, Libya and Mauritania, has yet to deliver on closer security cooperation, coordinated diplomatic stances or on achieving greater economic complementarity, despite its members’ historical and cultural bonds. The IMF report said individual countries of the Maghreb are the least integrated in the world.

“The share of intra-regional trade is less than 5% of the Maghreb countries’ total trade, substantially lower than in all other regional trading blocs around the world.”

The IMF said regional integration could raise each AMU member’s GDP growth by an average of 1 percentage point.

“While strong domestic policies remain the main economic driver, intra-regional trade may double as a result of integration and would support growth, increasing employment,” the IMF said.

AMU Secretary-General Taieb Baccouche credited the AMU with “several achievements, including the continued efforts to build a Maghreb highway network and the progress made by studies related to a Maghreb railway, which has become an achievable dream.”

The AMU received a grant from the African Development Bank to modernise the integrated railway network between Morocco, Algeria and Tunisia. The plan involves the expansion of 2,350km of railway by 2060. More than 36,000 passengers could then travel on trains every day between Morocco and Algeria and more than 22,000 tonnes of merchandise would be transported.

Population and merchandise flow between Maghreb countries has been hampered by the lack of a free trade agreement, strife in Libya and the closure of borders between Algeria and Morocco since 1994.

The IMF study stated that many benefits would accrue to the Maghreb from integration, as “openness promotes poverty reduction by accelerating growth. Also, removal or reduction of import tariffs on imported goods reduces their prices to consumers.”

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