MICRO, SMALL AND MEDIUM ENTERPRISES IN THE MEDITERRANEAN: A POLICY ROADMAP TO UNTAP THE POTENTIAL FOR JOB CREATION
The objective of this policy brief is to formulate a policy roadmap to untap the potential for employment creation by MSMEs in SEMCs, with a particular focus on Egypt, Jordan, Morocco and Tunisia – building on the findings of four years of research on MSME development carried out under EMNES. MSMEs have an important role to play in creating much needed employment opportunities, but their development is currently hindered by a number of obstacles related to both the structural features of private sectors that remain underdeveloped in most SEMCs and specific issues, such as lack of access to finance, the high incidence of informality and low integration into global value chains.
The proposed policy road map provides a comprehensive framework to formulate, implement and monitor a fully-fledged MSME policy and to mainstream a ‘Think Small First’ principle in all policy areas relevant to the development of MSMEs. The policy road map is designed to complement the assessments of SME policies within SEMCs conducted by the OECD, EU and ETF (2008; 2014; 2018) and includes a discussion on the role that the EU can play to support its implementation.
POLICIES FOR LABOUR MATCHING WITHIN AND BETWEEN COUNTRIES IN THE MEDITERRANEAN REGION
The objective of this policy paper is to provide an overview of the current state of affairs in Algeria, Egypt, Jordan, Lebanon, Morocco and Tunisia regarding the formulation, implementation and monitoring of labour matching policies. To this purpose, a definition of labour matching policies encompassing both policies aimed at matching skills and jobs within countries – labour market policies – and between countries – labour migration policies – and a novel analytical framework for their assessment were proposed and used, to conduct interviews with key informants within institutions responsible for labour matching in the six countries considered. The survey results attest that the latter made substantial efforts to develop active labour market policies in recent years but, for the most part, these are not backed with an adequate allocation of funds, whilst well-functioning labour market information systems remain to be developed. The same cannot be said of labour migration policies, which are basically inexistent, except in those countries having signed Mobility Partnerships with the European Union – Jordan, Morocco and Tunisia – where national strategies for migration were developed and some migrant support measures implemented, albeit largely under the impulse and with the support of international donors. The paper concludes with the formulation of a policy road map for the development of a Euro-Mediterranean platform for the matching of skills and jobs between countries of origin and destination, and a supporting Euro-Mediterranean labour market information system.
POLICY AGENDA FOR AN INCLUSIVE, JOB-CREATING FINANCIAL DEVELOPMENT IN THE SOUTHERN AND EASTERN MEDITERRANEAN
Recent empirical evidence shows that financial development in the Southern and Eastern Mediterranean Countries (SEMCs) is lagging behind. The exclusion of a substantial part of households and micro, small and medium-sized enterprises (MSMEs) from financial services, hampers economic development and job creation in the region. Moreover, financial development suffers from the absence of institutional diversity, high inefficiency and prohibitive lending costs.
In view of EMNES research, our findings provide justification for the following policy recommendations:
- Achieve macro and financial stability by
- ensuring sustainable government finances;
- ensuring monetary stability by targeting low inflation;
- tackling the high level of non-performing bank loans.
- Increase financial system diversity and enhance lending efficiency via
- financial market development (private bonds issuance, private placements, equity and IPO markets, etc.);
- developing legislative regimes for alternative financial structures and facilitating the adoption of new financial technologies (technology neutral approach, sandboxes, etc.).
- Widen the access to affordable financial services for households and MSMEs by
- developing credit registries and guarantee schemes for MSMEs;
- developing and promoting digital financial services and increasing the role of postal offices for provision of basic financial services for households;
- requiring banks and insurers to provide basic financial services for households;
- investing in enhanced financial literacy for the low skilled.
The EU can contribute to this policy agenda for inclusive and job-driven financial development through funding, assistance and expertise in SEMCs:
- It can fund the development of a guarantee fund to cover losses of defaulted loans and promotion of financial inclusion initiatives;
- It can assist in the development of an action plan for financial market integration;
- It can provide expertise to develop alternative EU financial instruments within the EU for SEMCs.
The objective of this policy paper is to review the most salient trends in financial development, to identify the main challenges and to provide policy recommendations to achieve financial development that is inclusive and that contributes to economic growth and job creation in SEMCs.