3 November 2016, Marseille

 

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Dear Ministers, distinguished guests, dear colleagues,

First of all, I am delighted to be here today to exchange views on the role of digital technology in the job market: we have all witnessed the increasing economic, social, and political impact of Information and Communication Technologies (ICT) in recent years.  A vibrant digital economy can make a significant contribution to growth, create jobs and contribute to the strengthening of the Euro-Mediterranean Partnership.

I thank FEMISE and the Cercle des Economistes for organising the Mediterranean Economic Rendez-Vous, which has become a leading event for economists, policy makers and the private sector from both sides of the Mediterranean.

 

There have been deep political and socio-economic challenges in the Mediterranean, and throughout Europe. But one thing has not changed: economic development, innovation, trade, investment and a vibrant private sector remain key to stability, growth, job creation and regional cooperation.

Key challenges

Job creation is the biggest challenge of the region and a top priority of the European Neighbourhood Policy. It is closely related to the sustainability of democratic reforms and to political stability.

It is a daunting challenge: given demographic trends, at least 5 million new jobs need to be created every year to employ a growing work force and to ensure social inclusion.

To create this amount of jobs, economic growth in the region should accelerate from the 2.5% to 3.5% of recent years to above 6%. Though this is a very ambitious target, I believe that the innovative possibilities offered by digital technology, can help to achieve it.

The development of micro, small and medium – sized enterprises (MSMEs) is crucial. In fact, the 6 million MSMEs in the region represent the largest opportunity for economic growth and job creation, since they account for 90% of total employment. We must therefore focus on supporting  MSMEs, especially in terms of access to finance. It is one of the main bottlenecks that prevent smaller enterprises from expanding.

To unleash the potential of the private sector, partner countries also need to make every possible effort to have the fundamentals at a macro level in place, including:

  • good economic governance;
  • strong market institutions; and
  • an enabling environment for the private sector.

Much still remains to be done to improve the business environment. According to the 2015 World Bank Report on the cost of doing business, many Mediterranean partner countries still suffer from a weak regulatory and administrative environment, which hampers both domestic and international business.

Trade and investment is another area for concern. Trade remains oriented mainly towards Europe, while trade among Southern partners themselves is limited to less than 5% of total Euro-Mediterranean trade. This figure has hardly changed over the past twenty years. This is something we can no longer ignore.

Equally worrying, inflows of foreign direct investment to the Southern Neighbourhood region decreased by almost half between 2008 and 2015. While latest data shows an upward trend, FDI has still not reached pre-2010 levels. Private domestic investment is also low in most of these countries, at below 15% of GDP compared to 30% in Central Europe or Asia.

There is clearly a great need for the creation of new trade and investment opportunities. I know that many of our partners are working on this and I commend them for it, especially Tunisia which is negotiating a Deep and Comprehensive free Trade Agreement with us. Openness to trade and investment stimulates job creation, technological progress and innovation.

Role of digital technologies in growth & job creation

I would like to share a few thoughts on how to promote private sector-led growth and employment, in particular with regard to digital technology.

Digital technologies and services are now part of the daily lives of most of the global population, bringing efficiency and affordable communication. They have created new services and products, giving access to vast amounts of information and raising the voice of ordinary citizens. There is no doubt that the sustainable society of tomorrow will be a digital one.

Ensuring this will depend on many factors: in particular the availability of appropriate infrastructure, common standards, interconnected networks, cross-border regulatory and administrative cooperation and the matching of skills with a healthy, competitive market.

This Digital revolution, however, also brings new challenges, such as new power asymmetries and influences, data protection concerns, debates on jurisdiction as well as cyber-security threats.

Ladies and Gentlemen,

These challenges are significant and I assure you that we face similar challenges also in Europe.

We must therefore use every opportunity to work together to find joint solutions to the problems we face in common.

I am glad to note that there is an active policy dialogue on digital economy at the regional level, following the Union for the Mediterranean ministerial meeting on Digital Economy in 2014.

This meeting also identified common challenges to be addressed and cooperation on this is on-going to tackle big data, e-infrastructure, a sound e-communication framework, privacy, Internet governance and other areas.

Moreover, we have other examples of cooperation which I would like to illustrate:

  • The GEANT research and education network is an initiative originally intended to connect European research and education institutions with their peer institutions. This has now been extended beyond the EU and is available in the Mediterranean region.
  • The EU also supports the Euro-Mediterranean Regulator Group to ensure better consolidation and harmonisation between electronic communications regulators.
  • A new programme in support of innovation is about to be launched; it will help to support technology clusters and start-ups, especially by linking them with private investors and business angels.

EU investment in socio-economic development

Ladies and gentlemen,

Nevertheless, this cannot work unless we improve the overall environment within which these actions can flourish.

For this reason, the EU has invested significant resources and expertise in economic development in the region, with 1 billion Euros disbursed since 2011.

We provide support to partners both at country level as well as at regional level with projects that are open to all partner countries.

Our actions cover a wide range, from supporting reform to the business climate, promoting enterprise development, SMEs, facilitating trade and investment, strengthening links among business institutions, to enhancing employment creation and income generation for the poor.

We also provide considerable support for reforms in vocational training and education, with a particular focus on the employability of young people and women.

In addition, the Neighbourhood Investment Facility (NIF) mobilises another 2 billion Euros per year for project financing in the Southern Neighbourhood. The EU works very closely with European and International Financial Institutions, using blending between grants and loans to finance infrastructure development in sectors such as transport, energy and water as well as access to finance for SMEs.

Moreover, just a few weeks ago, the European Commission launched the EU External Investment Plan, to encourage investment in the EU Neighbourhood and Africa to strengthen our partnerships and contribute towards achieving the Sustainable Development Goals.

Ladies and Gentlemen, to conclude,

Support for economic stabilisation and development has been an important pillar of the Euro Mediterranean Partnership in the past and remains a key priority for the future. I look forward to hearing your views on how digital technologies and the digital economy can contribute to this goal.

Thank you.