The Warm Embrace

Official France last week showed how the phrase "turn the page" is uttered in the language of diplomatic protocol. When Algerian President Abdelaziz Bouteflika arrived at Orly Airport for his country's first full-fledged state visit to its former colonial ruler since 1962, he was greeted not just with the standard red carpet, honor guard and military band, but with the rare personal turnout of President Jacques Chirac himself. Bouteflika's speech at the National Assembly the next day delivered in the French language that official Algeria has long spurned as the idiom of the oppressor brought the deputies to their feet. Roundly criticized last year by France for the irregularities surrounding his election, the diminutive President was praised by Chirac at a state dinner as "the statesman who has brought hope and courage back to a suffering Algeria."

That warm if slightly cloying reception was not the only sign that Europe is keen to freshen up its offhand relationship with the states of the Maghreb, which lie just 13 km across the Strait of Gibraltar but are a world away economically, culturally and politically. In the coming weeks the European Commission will flesh out its plan to reinvigorate the European Union's ties with the states of the Mediterranean, and France has declared that improved relations with the region are a key goal of its coming six-month E.U. presidency culminating, it hopes, in an autumn summit of European and Mediterranean heads of government in Marseilles.

Such noble intentions, however, have frequently foundered on the Rock of Gibraltar. Europe thinks the Maghreb countries Morocco, Algeria, Tunisia and Libya have to make more resolute efforts themselves to open their markets, make peace with each other and foster democracy. But many in the Maghreb see such preconditions as European excuses for keeping the region at arm's length while it focuses on eastern, rather than southern, E.U. enlargement. "In trade, finance, money and people, we are more integrated with Europe than some European states themselves," says Andre Azoulay, a counselor to Morocco's King Mohammed VI. "Europe cannot be stable and secure if on its southern border there are no institutional political relations."

But political relations often grow from commercial ones, and from the E.U.'s viewpoint these are negligible. Less than 1% of foreign investment from E.U. countries is destined for the Maghreb. One reason is that relations within the region's states remain parlous at best, creating a fragmented market that doesn't lure investors the way Latin America, South Asia or East Asia do. The U.S. government and Europe are both running initiatives to unify the market, but there are big obstacles. For one, Algeria and Morocco have been at loggerheads for a quarter century over the Western Sahara, a former Spanish colony. Morocco claims sovereignty over the territory despite an Algerian-backed independence movement led by the Polisario Front. Despite international pressure for a settlement, prospects for a referendum, mandated in 1991 by the United Nations, look dimmer than ever.

Quelling that conflict is just part of the challenge. Tunisia does more than 80% of its trade with the E.U., Algeria more than 60%, and Morocco well over half, but transaction costs hinder further expansion. It costs more to ship a container the 825 km from Tunis to Marseilles, for example, than it does from Marseilles to the Far East, according to a European Commission official.

And from a market perspective Tunisia remains, as one French diplomat says, "head of the class" for the region. Morocco has begun some gradual reforms, and the advent of a new King brings hope they'll move faster. The government has sold off more than 60 state enterprises since 1992, and among those slated for privatization this year are Maroc Telecom, the largest bank, Banque Centrale Populaire, and the national airline, Royal Air Maroc. The economy also got a boost last year when the government sold a mobile phone service licence, netting a $1.1 billion windfall for the treasury.

Algeria, the largest country in the Maghreb, is also its largest problem. It has been wracked by civil war since the military intervened in January 1992 to prevent a fundamentalist victory at the polls, and some 200 Algerian citizens a month are still dying from political violence. Bouteflika's plans to speed up privatization and other market reforms impressed his French hosts, but there are doubts that he can meet the challenges of a booming population: with more than half the population under the age of 20, the Algerian economy would have to grow by a consistent 7% annually to avoid deeper impoverishment, according to E.U. estimates.

Europe brings a few knotty problems of its own to the trans-Med relationship. Morocco and Tunisia have signed free trade agreements with the E.U. and would like to see better access for their agricultural products, but their competitors in Southern Europe with France at the forefront won't countenance that. And while the Commission has allocated $7.8 billion for development aid to the Mediterranean region for the next seven years, bureaucracy so hinders that spending that it would take Brussels nine more years at the current rate to spend the money committed for the last seven years.

The Maghreb is also hampered by Europe's stance on immigration one of "sniveling hypocrisy," according to Anthony H. Cordesman, a Middle East expert at the Center for Strategic and International Studies in Washington. Under public pressure to keep immigrants out, member states have put the screws on legal migration, making temporary student visas and even trips to family weddings in Europe almost impossible for citizens of North Africa. But at the same time Europe's economy depends on the black market labor of millions of illegal migrants a need bound to increase in coming decades as Europe's population shrinks.

"The Mediterranean is a barrier," says Benjamin Stora, a scholar at the Center for Social Sciences in Rabat. "Europeans see it as their protection against stereotypes like immigrants, poverty, violence, Islamic fundamentalists." Some Europeans certainly do. But those who look ahead recognize that merely trying to hunker down on their side of the Strait isn't a viable option.

With reporting by Akram Ellyas and Thomas Sancton/Paris, Barry Hillenbrand/Washington and Scott MacLeod/Rabat