Note
Rome, 18 May 2011
Object: Mediterranean Partnership Fund (MPF)
1. Regional dimension
The regional dimension of the “Arab Spring” in the Mediterranean area calls for a global, coordinated response to rebuild the cooperation policies related to political dialogue, security, development, migration and civil society.
A renewed approach entails an effort to promote:
- integration among economies and markets of the region;
- further trade liberalisation;
- infrastructural integration, namely in the energy and transport sectors, promotion of SMEs and micro-credit;
- involvement of IFIs and private sector;
- mobility for students and a comprehensive approach to migration;
- support to production and job creation.
2. Existing International Financial Institutions, Regional Development Banks and experiences
The Mediterranean area is the only one without a dedicated Multilateral or Regional Bank. Financial support for the development of the African continent is provided by the African Development Bank (AfDB), which partially covers the Mediterranean shore. The European Union operates programmes targeted to the region. The Facility for the Euro-Mediterranean Investment and Partnership (FEMIP) – a European Investment Bank/EIB – supports partner countries of the Mediterranean in economic and social modernization and regional integration. The European Bank for Reconstruction and Development (EBRD), is dedicated to Central and Eastern Europe to foster the transition towards a market-oriented economy, promote private initiatives in countries committed to the principles of rule of law, multi-party democracy and open economy. An important step forward would be upgrading the FEMIP into an autonomous institution, participated by EIB and Government (or other institutions) of the MENA region. This could be coupled with the extension of the EBRD area of intervention and the set-up of a financial instrument specifically oriented to support SME’s.
3. Elements for a “Mediterranean Partnership Fund”
In order to foster economic and social development of the region, Italy is considering a new instrument – a Mediteranean Partnership Fund (MPF) – to support the private sector and SMEs , open to public investors of European and non-European countries, MENA region coutnries including interested Development Funds, as well as private investors (e.g. Investment Funds) with the support of existing IFIs.
The MPF shall be complementary to existing financial institutions. It hall be innovative in approach, funding and instruments. Main features would be strong cooperation and partnership between governments and private actors. It shall act as instrument of corporate banking, project innovation, protfolio diversification and risk management with focus on SMEs and venture capital for the whole region concerned. Such an instrument would entail broader spill-over in domestic economic and social structure, build up of human capital, transfer of technology and special skills, attenuation of rationing and inefficient local capital markets, support for institutional capabilities.
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