The EastWest Institute is pleased to release its 2018 Annual Report, chronicling the programmatic activities, achievements and new initiatives in the past year and reflecting key geopolitical trends around the world.
The institute remains focused on tackling these evolving issues, as well as on forecasting challenges in other topics and regions.
To access the complete report, please click below:
EWI Releases Final Joint U.S-Russia Report on Afghan Narcotrafficking
The EastWest Institute (EWI) has released Afghan Narcotrafficking: A Joint Policy Assessment, the sixth and final report from the institute’s Joint U.S.-Russia Working Group on Afghan Narcotrafficking, which provides a comprehensive and updated assessment of the Afghan drug trade and the role that both the United States and Russia might be able to play in countering this shared threat.
The Joint Policy Assessment represents a consensus assessment by both U.S. and Russian technical and policy experts and is intended to serve as a toolkit based on which relevant stakeholders can formulate policy solutions on cooperative bilateral and multilateral measures to reduce the threat of Afghan narcotrafficking. These key stakeholders include policy officials and interlocutors in the United States, Russia, Afghanistan and its neighboring countries, as well as regional and global organizations.
“The scale and intensity of the Afghan narcotrafficking threat has increased in past years, and despite differences in the national priorities and interests of the United States and Russia, this remains an issue of mutual strategic concern for the two countries and the region as a whole,” notes Ambassador Cameron Munter, CEO & President of the EastWest Institute. “It is critical for both countries to manage and mitigate the Afghan narcotrafficking threat and foster cooperation on this issue—even in this prohibitive climate for improved U.S.-Russia relations.”
The final installment under EWI’s Afghan Narcotrafficking series, the Joint Policy Assessment follows five successful consensus-based reports: Afghan Narcotrafficking: A Joint Threat Assessment (2013); Afghan Narcotrafficking: Post-2014 Scenarios (2015); Afghan Narcotrafficking: The State of Afghanistan's Borders (2015); Afghan Narcotrafficking: Finding an Alternative to Alternative Development (2016); and Afghan Narcotrafficking: Illicit Financial Flows (2017).
Established in 2011, the Working Group has also garnered positive feedback and support from the Drug Enforcement Administration (DEA), the United States Department of State Bureau of International Narcotics and Law Enforcement Affairs (INL), the United States Senate Caucus on International Narcotics Control, the Ministry of Foreign Affairs of the Russian Federation and the Federal Drug Control Service of the Russian Federation (FSKN), in addition to various multilateral organizations/agencies such as the North Atlantic Treaty Organization (NATO), Collective Security Treaty Organization (CSTO), Shanghai Cooperation Organization (SCO) and United Nations Office on Drugs and Crime (UNODC).
Fully committed to the critical importance of Afghanistan, and the urgent need for continued U.S.-Russia cooperation, the EastWest Institute will establish a new Joint Working Group to assess the threat of terrorism in the war-torn country. Over the course of two years, the Working Group plans to convene in Moscow, Washington, D.C., Brussels and Astana and produce a joint threat assessment, which will be disseminated to key policy officials and interlocutors.
Please click here for the full report.
Click here for the executive summary.
Writing for the Nikkei Asian Review, EWI Senior Fellow Jonathan Berkshire Miller reassessed the recent Qatar diplomatic crisis through the lens of Japanese business interests. Although the impact might have been minimal up until now, Miller contends that Japan should remain vigilant and closely monitor the conflict's evolution over the next couple of weeks and months.
For now, Miller writes that Japan should be wary of entangling itself any further in the geopolitics of the region, even as it needs to juggle cordial business ties with both Qatar, one of its largest liquefied natural gas (LNG) suppliers, and the Saudi-led coalition, which provides it with most of its energy needs. That being said, Tokyo should look into taking advantage of the instability in order to secure a more Japan-friendly contract with Qatar's state-run petroleum company. The sanctions of the Saudi-bloc have weakened Doha's hand and Japanese utility providers could definitely demand greater flexibility at the negotiating table. Moreover, Miller highlights that "the unfolding drama in the Gulf should be a stark reminder to Tokyo of the need to diversify its LNG suppliers to ensure reliability."
Click here to read the full article at the Nikkei Asian Review.
On December 16, the EastWest Institute (EWI), together with its partners at the German Chambers of Commerce in Algiers and Casablanca (AHKs), held a webinar entitled “The Renewable Energy Sector: Challenges and Opportunities for Cooperation”—the concluding event in a series of virtual meetings that have formed the backbone of EWI’s Algeria-Morocco Business Dialogue. The webinar brought together five business leaders, three Algerian and two Moroccan, to take part in a cross-border business dialogue aiming to promote greater economic connectivity between the two countries in the renewable energy sector.
The energy sector is one of the few industries where Algeria and Morocco enjoy some degree of economic cooperation. According to the latest figures of the Observatory of Economic Complexity (2018), almost 90 percent (approximately 622 million USD) of Algeria’s total exports to Morocco came in the form of petroleum gas and refined petroleum. Despite these numbers being a vast improvement in comparison with trade in other sectors between the two countries, these figures remain dwarfed by the sums both Algeria and Morocco trade with third parties in Europe and beyond.
The renewable energy sector, however, represents a more sustainable and environmentally friendly means for both countries to pursue new avenues of economic cooperation, both with one another and in their respective trade relations beyond the Maghreb, particularly towards Europe. Unlike other countries in the Middle East and North Africa region, Morocco is a net importer of energy, relying on imports for almost 90 percent of its energy needs. Algeria, on the other hand, desperately needs to identify more sustainable means to wean itself off oil and gas exports and diversify its economy.
Governments in Algiers and Rabat have proposed ambitious plans to harness green energy, which they share across several sources: wind, solar, hydro and geothermal. Yet, there remain significant divergences in their respective accomplishments in this regard with Algeria failing to meet its self-imposed targets to harness wind energy and Morocco beginning to gain international recognition for its commitment to source 52 percent of its electricity needs from renewable energies.
Webinar participants provided astute insights as to the situation on the ground in Algeria and Morocco in terms of successes and failures when it came to their own and government initiatives in renewable energies and energy consumption. A common problem shared by entrepreneurs in the sector on either side of the border is the inability to connect their products to the national electricity grid.
According to participants, some solar energy in the region is connected to the national grids, however, there remains a lot of room for improvement given the potential in the market and the necessity to become less reliant on non-renewables sources of energy. Currently, participant initiatives include the installation of solar pumping systems for farmers who often experience issues with power shortages, while others provide electricity to individuals in isolated areas. However, the inability to connect to the national grids means entrepreneurs are unable to transfer surplus energy reserves.
Nevertheless, despite these challenges, participants pointed out the complementarity between Algeria and Morocco in terms of knowledge and expertise and proceeded to highlight several means by which they could exchange competencies. Algeria could learn from Morocco’s proficiency in financial access and institutionalization given the lack of cooperation amongst several ministries in Algiers. At the same time, Algeria is more adept at injections of renewable energy and more advanced in terms of marketing and distribution of renewable energy than its neighbor. Furthermore, both countries could also learn from their regional neighbor Tunisia in terms of developing appropriate regulations for market development. With these ideas and insights in mind, EWI, the AHKs in Algiers and Casablanca, and the participants developed the following policy recommendations.
Utilize hybrid energy systems to combine current energy infrastructure with the renewable energy sector. Algeria already has some experience with hybrid energy systems, which are fully convergent, making them useful for cross-border cooperation. Both countries need to develop reliable electricity supplies, which could be achieved via hybridization by combining biogas and solar power.
Revitalize the DESERTEC project by developing new models to address drawbacks that jeopardized initial enthusiasm for the initiative. Originally envisioned to harness the Sahara’s vast solar energy to produce electricity to meet local and European needs, the project still offers a viable avenue for Algeria and Morocco to develop a large, multinational project, which cannot only meet their own energy needs, but diversify sources of income.
Offer tax or customs exemptions to locally made goods originating from the region. This could address two of the main issues that have resurfaced throughout the project. It would enable Algerian or Moroccan goods to enter each other’s market, while enabling their local consumers to gain an understanding of the products available across the border. In turn, this would address the purveying lack of trust in Arab or Maghreb-made products in both countries’ respective markets.
Unify market operators in the renewable energy sector so that they cooperate and act in unison in their efforts to influence and lobby local governments. Again, this policy requires a two-pronged strategy targeting local decision-making and cross-border cooperation, which can then be used in negotiations with third-party stakeholders, particularly Europe.
Pool resources to target the European market. The EU’s objective to drastically reduce carbon emissions in the bloc, coupled with the reality that the continent needs to seek alternative energy sources, presents North Africa with an immense opportunity to combine its collective bargaining power in future energy negotiations with the EU.
Despite its vast potential, the Maghreb region is often cited as being one of the least economically integrated regions in the world. The Algeria-Morocco Business Dialogue project has sought to bring together Algerian and Moroccan business leaders from multiple economic sectors with the aim of overcoming obstacles to bilateral trade between the two neighbors.
The dialogues have focused on several industries and topics vital to successful entrepreneurship in Algeria and Morocco such as food security, agriculture, healthcare, the impact of digitalization and new technologies and energy—with a particular focus on how to attract quality investment, ensure environmental protection and empower businesswomen.
COVID-19 unfortunately had a detrimental effect on the overall operation and schedule of the project. Each meeting was originally envisioned as an in-person conference such as the first event on the agricultural industry, which took place as a two-day delegation to Berlin to attend the city’s Green Week—one of the world’s largest international agriculture trade affairs. Travel restrictions and the ongoing pandemic inevitably forced the institute to adapt and change the format of the project from face-to-face meetings to several webinars. Although this meant the discussions between participants were less interactive than originally planned, they proved no less intensive nor productive as the following policy recommendations from our last and previous webinars attest.
Click here to read a French translation of this event report.
Click here to read an Arabic translation of this event report.
Cooperation in the Automobile Industry
Women’s Empowerment and Entrepreneurship: Challenges and Opportunities
On October 21, the EastWest Institute (EWI), together with its partners at the German Chambers of Commerce in Algiers and Casablanca, held a webinar entitled “The Automobile Industry: Challenges and Opportunities”—the third in a series of virtual meetings as part of EWI’s ongoing Algeria-Morocco Business Dialogue. The webinar brought together six business leaders, three each from Algeria and Morocco, to take part in a cross-border business dialogue aiming to promote greater economic connectivity between the two countries in the automobile sector.
In recent years, the governments in both Algiers and Rabat have promised and pushed to establish a more prominent export-focused automobile industry. Under former President Abdulaziz Bouteflika, Algeria sought to found a local car industry in order to reduce imports. So far, these ambitions have largely failed to materialize, with Volkswagen and Kia both shutting down plants recently. Contrastingly, in Morocco, over the past decade the government has successfully signed several free-trade agreements with the U.S. and the EU, helping establish a healthy export-driven auto industry worth 6.19 billion USD. Despite varying successes in the automobile industry, these shared ambitions should precipitate both countries to seek opportunities to collaborate and trade more frequently. However, automotive and transport related trade between the two countries remains small to almost non-existent.
According to the latest figures from the Observatory of Economic Complexity (2018), Morocco exported only 51,200 USD worth of transport and automotive related goods, including spare parts, to Algeria; less than 0.5 percent of the country’s total exports in this industry. This, almost insignificant, sum is all the more surprising when contrasted with the fact that in the same year, Algeria imported goods worth 5.09 billion USD. These figures are unfortunately consistent with the trade policies of each country towards the other, with both Algiers and Rabat focusing their attention towards the European markets. Nevertheless, the space for complementarity between both countries in the industry remains evident.
During the webinar, participants shared testimonies of their experiences attempting to conduct trade across the border in the neighboring country, providing some insight as to why the above figures are so low. For instance, one of the Moroccan participants explained that in order to send a shipment to Algeria, the whole process can take up to three months. Upon sending a request, the initial domiciliation period can take up to a month, as funds are frozen before being shipped, which then takes up to an additional two months for their arrival. Other Moroccan participants attested to this, stating that the biggest impediment to trade in Algeria was significant delays in transit. True to the objectives of the project however, the Algerian participants were quick to offer solutions to such problems by suggesting their Moroccan counterparts should opt to use a pro-forma invoice that enables them to decide how their products are shipped step by step.
In other testimonies, participants discussed previous experiences in conducting business with counterparts across the border in third countries, such as Tunisia, because of the difficulties in doing business directly. It was stressed, however, that this business practice is far from ideal. The practicality of such a method is only applicable when shipping large quantities, as the transport costs incurred during the transaction are then passed on to the consumer, which in turn makes them less competitive in the respective market. With this in mind, the following recommendations, gathered from industry professionals on the ground in both countries, are intended to address structural obstacles that prevent the automobile industry from fulfilling its potential in the region.
Develop a Regional Brand Strategy: Business leaders should collaborate in jointly formulating a “Maghrebi” or “Arab” brand. Both countries currently focus their attention on European markets, overlooking the potential on their own doorsteps. A long-term strategy and vision is required to overcome this economic tunnel vision, especially given that both local automotive industries specialize in manufacturing spare parts for European automobile giants.
Leave Politics for Politicians, Continue Economic Cooperation: The political problems between Algiers and Rabat are well documented. Nevertheless, local business leaders should seek and continue to collaborate with one another in order to demonstrate to political leaders in both capitals that there are more benefits to cooperation than in maintaining the current status quo. Participants at the webinar agreed they should work hand-in-hand to develop commercial relations across the border, thereby encouraging politicians to lift the current bureaucratic hurdles preventing greater economic gains.
Organize Trade Shows: A major part of continuing economic cooperation between both countries could be the organization of more country or trade-specific fairs and exhibitions. Both countries host their own trade fairs, which admittedly have little or no representation from the neighboring country. Addressing this issue would represent a big step in addressing the lack of cooperation between business leaders in both countries and could also take the form of a two-pronged approach whereby the aforementioned brands of each country and the region are built over a period of time to increase the flow of trade between the two countries and outside the region.
Encourage Educational and Training Exchanges: There are multiple means by which the automobile sectors in each country can benefit from training and knowledge exchanges. Webinar participants noted the industrial specialties of each country and how they stand to benefit from collaborating and sharing knowledge. Online webinars are an option to address this issue during the ongoing coronavirus pandemic. Equally, business trips and seminars between similar or complementary organizations offer a more practical solution when the global situation is more conducive to international travel.
Despite its vast potential, the Maghreb region is often cited as being one of the least economically integrated regions in the world. The Algeria-Morocco Business Dialogue project seeks to bring together Algerian and Moroccan business leaders from multiple business sectors with the aim of overcoming obstacles to bilateral trade between the two neighbors.
The dialogues center on topics vital to successful entrepreneurship in Algeria and Morocco such as food security, agriculture, healthcare, the impact of digitalization and new technologies and energy—with a particular focus on how to attract quality investment, ensure environmental protection and empower businesswomen.
COVID-19 has unfortunately had a detrimental effect on the overall operation and schedule of the project. Each meeting was envisioned as a two-day conference such as the first event on the agricultural industry, which took place as a two-day delegation to Berlin to attend the city’s Green Week—one of the world’s largest international agriculture trade affairs. Nevertheless, EWI has moved the project online in order to maintain the good momentum of the project generated in Berlin. Although this means the discussions between participants are less interactive, they proved no less intensive nor productive as the following policy recommendations attest.
Click here to read a French translation of this event report.
Click here to read an Arabic translation of this event report.
Women’s Empowerment and Entrepreneurship: Challenges and Opportunities
BY: ADNAN TABATABAI, CEO OF CARPO
The seventh edition of the Brussels MENA Briefing, co-hosted by the EastWest Institute (EWI) and the Center for Applied Research in Partnership with the Orient (CARPO), in partnership with the Rethinking Yemen’s Economy initiative, was dedicated to the economic impact of the ongoing conflict in Yemen—a war that started in 2014/15 and has since turned the country into the world’s worst humanitarian crisis according to the UN.
The Rethinking Yemen’s Economy initiative aims to contribute to peacebuilding and conflict prevention, economic stabilization and sustainable development in Yemen by building consensus in crucial policy areas through engaging and promoting informed Yemeni voices from all backgrounds (the "Development Champions") in public discourse on development, economy and post-conflict reconstruction in Yemen, and by positively influencing local, regional and international development agendas. It is implemented by CARPO, DeepRoot Consulting and the Sanaa Center for Strategic Studies and is generously funded by the European Union and the Embassy of the Kingdom of the Netherlands to Yemen.
The speakers of this briefing were Laila Tawfik Anaam, development champion, co-founder and managing director of the Yemen Loan Guarantee Program at the Social Fund for Development in Yemen, and Rafat al-Akhali, founder and managing director of DeepRoot Consulting. CARPO President Marie-Christine Heinze moderated the session.
When discussing the economic impacts of the war in Yemen, what needs to be emphasized first, the speakers argued, is the plight of the Yemeni population. 80 percent of Yemenis are living in poverty with approximately 70 percent of them lacking access to water, sanitation and health care. This leaves 24.3 out of 29 million Yemenis in need for humanitarian aid. A spike in unemployment further complicates the living conditions, particularly among the youth, where unemployment is estimated at 50 percent.
One of the speakers explained that approximately 40 percent of Yemeni households have lost their primary source of income in both the private and public sectors. It was emphasized that fisheries and agricultural entrepreneurs, in particular, had been hit hard by the devastating effects of the war.
In addition to that, it was outlined that the banking sector has effectively collapsed and that the monetary system has become dysfunctional. Both speakers referred to the severe consequences caused by the split of the Central Bank of Yemen, which has led to conflicting monetary policies. It was highlighted that those government agencies that provided regular income for both public servants, as well as recipients of social welfare have either halted or interrupted their services.
The experts shed light on the grim prospects for small and medium-sized enterprises (SMEs) in Yemen, which are heavily impacted by closures of and restrictions at sea and airports, as well as land border crossings, which make any form of cross-border trade extremely difficult and cost-intensive. Mobility within Yemen has been reduced massively, it was pointed out, because of the country’s infrastructure—i.e., roads, bridges, tunnels, etc.—being destroyed during the war and because of the high number of checkpoints and lines of conflict that need to be crossed.
Basic needs of companies, such as electricity, pose serious challenges for entrepreneurs, it was explained. They are dependent on private generators, which too often cannot operate due to fuel shortages in the country.
What SMEs in Yemen direly need, according to one speaker, is a legal framework which enables them to operate at sea and airports and border crossings, an overall easing of taxation and the establishment of supporting microfinance institutions with lending capital. It was reiterated that the agricultural sector (fishery, livestock, etc.) should be prioritized in this effort as this would help to address food insecurity.
In general, the war should be seen through the lens of economics, one speaker argued. It is a battle for the “commanding heights” of the country’s economic resources and institutions. It was highlighted that there are currently no real economic incentives for any party to stop the war.
It is important, it was established, that any peace agreement for Yemen entail a clear roadmap for economic stability. The ongoing UN-led peace efforts, it was argued, fall short of addressing the economic drivers of the conflict.
What needs to be put on the agenda, one speaker urged, is the need to re-establish one Central Bank, ensure the resumption of the payment of public sector salaries, define a way to reach an agreement on how to allocate natural resources revenues, and to clearly outline the path towards reconstruction and economic recovery.
While this is a major task, one speaker recalled precedents and blueprints of similar approaches in the past, namely the Dayton Accords and their focus on the Central Bank board and governor in Bosnia and Herzegovina; the Accra Agreement, which entailed a Governance Reform Commission and a Contract and Monopolies Commission; and the case of Angola, where economic power-sharing in the Cabinda Province was part of the conflict settlement strategies.
It was recommended by both speakers that for the European Union to play a role in conflict-resolution in Yemen, these economic factors not only serve as important issues to raise, but as points of departure for European initiatives to support the Yemeni process through diplomacy, aid, investment, capacity-building and efforts for reconstruction and reconciliation.
About the Brussels MENA Briefings
The Brussels MENA Briefings are in-depth round-table discussions on topics of current significance in the MENA region hosted by EWI and CARPO bimonthly, the first week of every second month. As in-person-briefings are impossible due to COVID-19, EWI and CARPO have temporarily turned this series into a monthly webinar. Please note that attendance is by invitation only.
Should you be interested in being considered for the invitation list, kindly send an email to Desirée Custers mentioning your name, affiliation and geographical or thematic area of interest and expertise in the Middle East.
Dates for upcoming Brussels MENA Briefings:
Tuesday, November 3, 2020
Links to Reports of Previous Briefings:
Jordanian Foreign Policy in Light of Regional Geopolitical Shifts
How to Rescue Sudan’s Transition Process?
A New Iraqi Government in Place: Challenges and Opportunities for Iraq in its Neighborhood
The Status Quo of the Libyan Conflict: Is the Berlin Process Obsolete?
Post-Sultan Qaboos Oman: Transition Opportunities and Challenges
On August 12, the EastWest Institute’s (EWI) South Asia program, in cooperation with the Corporate Pakistan Group (CPG), hosted a webinar discussion on “South Asia’s Economic Future in the Post COVID-19 World.”
Moderated by South Asia Program Director Farwa Aamer, the webinar invited expert perspectives on the impacts of COVID-19 on South Asian economies and how the region can work towards improving its socio-economic conditions in the post-COVID world.
Speakers included EWI President Bruce McConnell; Dr. Jagannath Panda, research fellow at MP-IDSA, New Delhi; Nathan Sivagananathan, co-founder of Hatch and venture partner at Patamar Capital; Dr. Shamshad Akhtar, chairperson at Karandaaz; and Ikram Sehgal, chairman of Pathfinder Group and EWI board member.
Please find full coverage of the webinar here.
On July 7, the EastWest Institute convened a webinar entitled “Women’s Empowerment and Entrepreneurship: Challenges and Opportunities,” in cooperation with its partner organizations, the German–Algerian and German–Moroccan Chambers of Industry and Commerce.
The webinar brought together four high-ranking female business leaders, two each from Algeria and Morocco, to take part in a cross-border business dialogue aiming to promote greater economic connectivity between the two countries. It marked the second event in a year-long project, which commenced with an initial conference early this year on “Food Security and Agriculture” in Berlin.
Funded by the German Foreign Office, the project seeks to promote a climate of trust by bringing pragmatic business professionals together to identify creative solutions for circumnavigating the closed border currently preventing the two countries from conducting greater cross-border trade.
During the two-hour discussion, participants highlighted the shared economic complementarity from which both countries could and should profit. A border closure since 1994 is the chief reason behind both countries’ inability to tap into this economic potential. All parties participating in the webinar argued the political standstill behind the installation of the closure is the primary trade complication that unnecessarily drives the business communities on either side of the border to export to third countries in Europe rather than with each other.
Even during these unprecedented times of the COVID-19 crisis, the political situation between Algiers and Rabat continues to prevent both countries from governing in more practical terms, as personified by the fact Moroccan-made face masks and other PPE are still mainly exported to Europe rather than across the border, despite a huge demand in Algeria.
A particularly noteworthy topic during the debate centered on female cooperatives and women’s business organizations, with participants noting these types of female associations are much more prevalent among rural women in Morocco than in Algeria. Participants from both countries agreed that a much more intense exchange between female-run cooperatives at this level would greatly benefit rural communities on either side of the border by providing employment, as well as special know-how and marketing for region-specific agricultural products. Furthermore, all parties identified trade fairs as a unique platform for entrepreneurs to work closer together and exchange ideas.
Finally, towards the end of the discussion, the German-Algeria Chamber of Commerce AHK, together with German Society for International Cooperation (GIZ), launched the creation of a business platform for the regional medical sector. This initiative is a first step in generating greater contact between business professionals from Algeria and Tunisia (with the hope of eventually incorporating Morocco) to exchange information, experiences and modes of best practice as a catalyst for greater cooperation and regional integration.
EWI’s Algeria-Morocco Business Dialogue is an ongoing project within its Middle East and North Africa program and its next conference is scheduled to take place in October this year either in Berlin or via video conference.
Click here to read a French translation of this event report.
Click here to read an Arabic translation of this event report.
