in the form of new industries assigned to them. This is not to say that the establishment of new industries should occupy a second place in
the Maghreh economic integration strategy. Indeed
they
arecrucial
in the development of the Maghreh and as we have seen the
meagre proportion of the industrial product in xne
GDP
in theMaghreh
countries.
The previous policy issue reminds us of one of the most important principles of an overall policy for the Maghreh that
duplication should
he avoided. We have seen" the excess capacity which characterises a great number of industries in the
Maghreh^
thewasted capacity ranged
from 20 to
QOfc
: under these circumstances not onlyis
thecost of
pro¬duction %
Jarce
resources such as capital, skilled labour and managerial abilities are wasted.Determining the location where an industry is to he established in
order to ensure a sufficient balance among the Maghreh countries is
very difficult. Indeed, it is particularly
difficult to work out
a completely balanced distribution of industrial projects between the Maghreh countries, as they differ according to number ofpopulation,
per capita income, and level of development, as the case of
Libya
demonstrates. The projects suggested in the last chapter which can be
considered as a "package" of industries to be distributed among the four countries, cannot be said to be comparable in relation to the size of
investment needed, the employment opportunities offered or the prospects
of gain. It is extremely difficult to estimate in advance the evolution
of technology and the amount of employment which the industry might
offer in the future.
Some measure could countervail the imbalance in distributing the package of projects, other than the fiscal compensation which we have
classified as short-run and not decisive in the industrial development
IDEP/ET/2340.
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of"'thé less favoured' country. Each country should he offered an
equivalent number of shares and this share in the capital of these projects can be calculated according to the country's consumption of
the goods produced by the project. Here Libya's capital can play an essential role in financing these projects which would bo owned collectively. Here Libya can bave a share in the gains not only as
proportional to the goods it consumes, but would share a profit on its capital, It should be recalled that this is by no means an alternative
to having a direct share in the industrial projects contained in the package, as this is the essence of our idea of integration, but it can be considered an auxiliary measure to offset the imbalance in distributing
industries among the member countries,
(ï)
Even after agreeing on the integration industries and their loca¬
tion, a private enterprise economy, like, that of Tunisia and
Morocco,
would find it difficult to induce the private entrepreneurs to channel
their investments to the agreed upon areas. Meanwhile, it seems easier
for a country like Algeria or Libya, where the government owns and
controls a great part of the national economy, resources and activities,
to direct the investment to the desired activities. Here Tunisia and Morocco would probably need to rely on the public enterprise or the
mixed economy enterprise in order to implement the agreed regional in¬
vestment policy.
(1)
It is assumed here that Libya would use those yeilds in it industrial and economic development effort.(2)
There are some measures suggested to reduce the likelihood ofundesirable locations5 the governments would refuse national
licences to plants that have not been agreed upon. Also they would not eliminate trade barriers on products or investments
that have not been agreed upon. They could agree to consult in
advance before any of them authorized or carried out an invest¬
ment in the agreed-upon sectors. Only projects which have been agreed upon would enjoy fiscal incentives', state aide and techni¬
cal assistance etc. A regional financial institute could be established to favour the projects agreed upon.
4. The strategy of the development plans and the distribution of industries between the Maghreb countries.
An effective economic national plan should exist in each of
the fojar countries of the Maghreh as an essential prerequisite for
a meaningful investment policy for the area. This would give each government an awareness of the priorities and investments available
to implement them. Ideally, the plans of each government at the
different stages of plan formulation should already have taken full
account of the planning in the other three countries. Unfortunately
that did not happen when the four countries formulated their present and future plans. So there are substantial differences in the
strategies and objectives of those plans.
But luckily those differences furnished what may be termed an
"accidental complementarity" or "accidental harmony" betvreen the
economic policies of these countries as shown in their own national development plans.
We have seen in the second chapter of this study how Algeria
laid emphasis on industrialization and particularly on heavy in¬
dustries. Morocco is giving priority to agriculture and light
industries
(and mining).
Tunisia is laying some stress on chemical industries, especially fertilizers, while Libya's aim under the old plan is to develop the infrastructure and housing. One wouldexpect that after the change of the political, regime... in Libya, this country would adopt a more ambitious industrial development plan and, as shown above, the heavy items of industry would be suitable, especially in the field of ammoniac and other petro—chemical pro¬
ducts.
Hence these differences in the political outlook which reflects themselves in the strategy of economic development would probably
be considered a favourable factor for the integration of the
Maghreb and not an unfavourable one as many writers used to think.
IDEP/ET/2340
Page
85.
It follows that Algeria would, be assigned the heavy items her plan envisaged. Paradoxically enough, not only
will this coincide
with Algeria's economic development strategy, but it
would
alsobe possible according to its natural resources' endowment. As this study demonstrates, Algeria is well-endowed with rich resources of natural gas, oil, iron and other
minerals, the important
in¬puts for iron and steel industry, petro-chemioal industries and cheap energy which can be useful to the neighbouring countries
like Tunisia, and Morocco.
This emphasis in the Algerian Plan for development on these
basis products agree with the previous reports of the ECA, GPCM
and other experts who assigned these products to Algeria in a Maghreb integration context. It supports also the de facto in¬
dustries which were established in Algeria by the French entre¬
preneurs.
For Morocco, whose plan gives priority to agriculture and light industry, her share in the "package of projects" would be directed to these two sectors according also to the objectives prescribed by its plan. In the field of light industry, several projects can be chosen to cater for the whole Maghreb market.
Regarding heavy industry which already exists in Tunisia
(Menzel
Bourguiba Steel
Factory),
or inMorocco,
they can be assignedcertain production items according to their capacities and according
to an overall Maghreb plan to produce iron and steel. The ferti¬
lizer industry can continue according to the lines suggested in the previous chapter.
Tunisia can co-operate with Libya in the development of its chemical industries on the one hand and with Algeria on the other
in an attempt to benefit from these two countries' petroleum and natural gas. A general coordination plan for the chemical products oould- be worked out between these countries taking into considera¬
tion the strategy of the Algerian plan, and the: very favourable
natural resources it has. In this plan a kind of specialization between Tunisia and Algeria could be agreed upon.
5. Policies in other sectors
The development of agriculture is necessary to enhance the
. industrial integration of the Maghreb and hence the economic development., as has been streesed before. The co-ordination of agricultural production, the joint research work on soil, climate
and different kinds of crops, the special fertilizers and insecti¬
cides needed would achieve a considerable economy and increase
agricultural productivity, and would result in a profitable speciali¬
zation. Although the four countries produce more or less the same
agricultural products, a kind of specialization according to dynamic comparative cost could be achieved for instance if Morocco were to specialize more in the production of oranges, mandarines, and vegetables, Algeria and Tunisia in lemons| the latter probably has
an advantage in producing olives as well. Libya also can specialize
in olives and groundnuts. Dates also can be developed in Algeria,
as well as grapes for wine, which is already produced in large quantities there, A kind of specialization could be sought in this field.
Joint bodies should be established for marketing the agricultural
and other products in the world market. By combining resources,
skills, and experiences, the world market needs could be studied
more efficiently with the least cost. These studies would show the different brands needed of each community, and thus help in classi¬
fying these commodities and assigning them to each country according to the principle of a dynamic comparative advantage. These joint marketing bodies would also sell in the best markets, and would in¬
crease the bargaining power of the Maghreb countries, and ameliorate
their terms of trade, obtain better terms for their similar products, especially in those items like phosphates, wines, citrus fruit,
vegetables, olive oil etc.
Agriculture production should also be directed to produce the items which can be processed locally in order to encourage industria¬
lization in processing food products and other agricultural items.
Needless to stress the vital role which.the infrastruetural network
IDEP/ET/2340.
Page 87.
can play in facilitating the development of agriculture and in¬