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III UNUSED (OR UNDERUSED) INDUSTRIAL CAPACITIES

It has "been found that there is a great proportion of unutilized capacity in many existing industries, due to the smallness of the

market and the lack of coordination between the similar industries in the four countries. This constitutes considerable waste of the

sub-region's resources, which could be allocated to other productive

activities if there was a sound industrial policy for the whole Maghreb.

The under-utilized industrial capacity in the four countries was estimate between 20 to

80fc.

In Table 1 a somewhat detailed account

is given of the lost capacity in different industries. For instance,

in the heavy mechnical industries the utilization rate could be improved by the creation of mechanical precision workshops for manufacturing small series of complicated parts with the same goal. If specializa¬

tion agreements can be conoluded between the four countries, the market

will be enlarged for accumulators, electric batteries, threads, wires

and bars, heavy electrical material and transformers, plastics and rubber, as well as to start joint bitumen manufacturing, to open markets for liquified gas and ammonia.

(ï) (We

shall give some examples of individual industries in the following

section).

(ï)

See 'The industrialization policies of the four Maghreb countries

in an economic integration prospect,1 in French, a PCPM document.

See also 'Report of the Industrial Mission to Algeria, Libya,

Morocco and Tunisia' ECA, May

1966,

T

66/15-TABLE 1

Examples of the industrial production capacities

utilization in the Maghreb countries

(1964) (in 'fu

of the production capacity of the

sector)

I Mechanical industries

Mechanical industries ...

Brass founding andfinishing ..

Galvanized metal and iron sheet household articles ...

Fire drawing and wire manufac

turf _xg

Accumulators

Utilization of the entire capaci¬

ty of the electrical and

elect-tronic industries Source : Report of the industrial mission op.cit.

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SOME GUIDING FBINCIPLES IN THE ALLOCATION OF IINDUSTRIES BETWEEN THE MAGHREB COUNTRIES

To establish a sound, long-lasting

Maghreb

economic community based

on industrialization some principles are deemed necessary to guide the

investment policy of the community and particularly to help in allocating

the industries agreed upon between the member countries.

1. A good understanding of the role of economic integration

A _proper understanding of the role of economic integration in the development of the member countries of the proposed Maghreb economic community is a necessary prerequisite for a solid agreement between these

countries. If they each realize that by joining forces with their

neighbours and by the fusion of the national markets they will each achieve

a rate of development and industrialization higher than if they depend

upon their small national markets, then a firm integration scheme could

be established.

In the Maghreb, as well as in the other sub-regions of Africa, ^one

finds certain countries relatively more, or less, developed than others.

Both types of country should know that economic integration will not be

a source of net gains at the expense of the other members. If a relatively

more developed member realizes that the larger market of the integrated

area comprising the market of the less-developed members would create favourable conditions for its growth, it must accept offering compensating

benefits to the latter to speed up their economic development. The less developed country, on the other hand, should consider whether by joining

the integrated markets its growth will be more rapid than it would have been if development had taken place in national isolation. If this is the case, the least-developed member would join the relatively developed

countries in the integration agreement, provided that policies to off-set

the "back-wash effects" are adopted.

The understanding of the problem of economic integration ,is more

essential as a basis for any agreement. Inspite of brotherly,\ and cultural

ties, the political harmony between the member countries are factors

which would help in creating a favourable atmosphere for an economic integration agreement, but thay are not in themselves a sufficient pre¬

requisite. Indeed, there must exist a minimum of mutual confidence be¬

tween the countries planning to form an integrated area. This con:if.once

would be established by factors such as geographical proximity, cultural

and historical relations, the political outlook of the leaders as well

as the people of these countries. ïïithout this confidence the politicians

could not even sit together to discuss the possibilities of economic integration.

There is an example of ^an integrated ^area where the political systems, ideology, political and economic struot-ure anI ins &i tut ions, and cultural ties, are more or less the ^same. This is in the integration scheme of

the Comicon countries of East Europe. ITavcr, tehees there aro great

difficulties hindering complete integration between thoso countries.

This does not mean that they have not benefited from economic cooperation.

Indeed, the industrial joint projects between two or more of thoso

countries have proved to ho successful and can be studied by the Maghreb

countries in order to begin similar attempts. Put who difficulties ob¬

structing an ambitious integration union are still intricate. A brother politician will not surrender his country's economic interest purely

on the grounds of an ideological principle. A genuine understanding of

what a member country can achieve from ^nr. integration agreement, and what

it must sacrifice as well, would croate a realistically solid economic community.

2. 'The distribution of gains end losses

This _proper understanding of the role of economic integration high¬

lights the importance of sharing tiro gains ari losses cf the integration

scheme. It goes without saying that Libya is the least develored country

in the Maghreb group. Paradoxically enough it has the highest per capita

income or per capita domestic prod, at t ^{. .} asy":earn as well as in the whole of Africa, That only demonstrados the fallacy cf the

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aggregate average indicators such as per capita income or per capita GDP, etc. Unless ^we take into account

considerations such

^as

income

distribution, the share of the GDP accruing to foreign companies

and

organizations as mentioned before, as well ^as the standard

of education,

degree of literacy, health services, skills, the

organization and

administration of the economy etc., the per

capita

income

would be

meaningless.

Petroleum is, of course, the cause of this high per capita.

GDP

and

until its products as well as its yields are transformed into industrial plant with its infrestructurai needs and until it is used to promote the agriciltural sector, Libya will remain underdeveloped inspite

of

the

high

per capita income and will continue to be considered the least developed country in the area.

If we examine the studies made so far on the proposed Maghreb economic community, we find that most of the studies undertaken by the ECA

missions, The

CPCM,

and other individual authors, concentrate their effort

on the three traditional Maghreb countries ^- Morocco, Algeria and Tunisia,

and neglect Libya to a considerable extent. The reasons for this are historical as well as economic. Prom the historical point of view Libya

was subject to foreign occupation different from the other three. It

was subject to Italian as well as English rule, while the other three

countries were occupied by France, which has resulted in a more harmonious culture, language and literature between them. Their economic problems

have been dealt with at length in books, magazines and periodicals in French, and hence a great body of research and information has been

published ^on their economies while the situation in Libya is different,

either because Italian is not so widely read as French, or perhaps be¬

cause the Italians did not stay in Libya as long as the French stayed

in the other Maghreb countries.

French administration and French enterprise had their impact on the

economic life of the three eX French-territories. Resource endowment has played a role in giving them similar economic features, whereas

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