Encouraging transformation in North Africa and the Middle East: the Deauville Partnership

Textile company Sathya Clothers near Tangier, Morocco

Textile company Sathya Clothers near Tangier, Morocco

© Thomas Köhler/photothek

In June 2014 Germany took over the G7 presidency and thus also the chairmanship of the Deauville Partnership. The Deauville Partnership was established by the G8 in 2011 in response to the transformation under way in North Africa and the Middle East (MENA region). The Partnership aims to provide political and financial support to Arab countries in transition (ACTs) and to better coordinate that international support.

The Deauville Partnership includes

  • countries in transition – Egypt, Tunisia, Morocco, Jordan, Libya and Yemen,
  • the G8 countries,
  • international and regional financial institutions, the OECD and
  • regional partners – Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Turkey.

The Partnership seeks to foster small and medium-sized enterprises (SMEs), improve the legal environment, encourage investment, foster civil society, and improve the participation of women. After a period of political and social upheaval, the MENA region is faced with chronically high unemployment, which constitutes an obstacle to democratic transformation. The high rate of unemployment among young people leaves the region's youth with poor prospects.

Under Germany's co-chairmanship, the finance track of the Deauville Partnership has focused on two issues: financial inclusion and job creation. The BMZ is actively involved in generating input for this agenda.

In cooperation with the German Finance Ministry, various expert conferences and discussions on the two issues are being held in the course of 2015, for instance on financial inclusion (April) and on promoting employment (September).

In 2012, the MENA Transition Fund (TF) was set up. This platform for coordination and exchange, which is unique in terms of its setup, facilitates the implementation of specific actions in the countries in transition. To that end, the countries submit proposals for consultancy and training projects to the Fund. Decisions on funding are taken by a steering committee that meets twice a year and takes democratic votes on project proposals.

In January 2015, the BMZ became one of the co-chairs of the committee, the other being Egypt. In its role as co-chair, Germany intends to make the Fund even more outcome-oriented. Good progress was made in this regard at the steering committee's most recent meeting in May. This is an important signal for the continuation of the Partnership, which was also given a prominent place in the Elmau summit document. To date the Federal Foreign Office and the BMZ have provided nine million euros in funding towards the Transition Fund.

High-Level Conference on Financial Inclusion

More than 100 high-ranking representatives of central banks and regulatory authorities from the MENA region came together in Berlin in late April for a conference on financial inclusion in the Middle East and North Africa in the context of the Deauville Partnership.

At the conference, participants from the private sector, international financial institutions and the G7 countries exchanged ideas and information on success stories of political initiatives for financial inclusion in Arab countries.

One concrete outcome of the conference was the adoption of a regional action plan on financial inclusion. The plan highlights the special importance of providing financing for small and medium-sized enterprises, using digital technologies and fostering responsible finance, and it invites players to increase their activities in these areas. The panellists emphasised that the regional action plan on financial inclusion was of importance even beyond the G7 context, particularly in connection with the G20 Global Partnership for Financial Inclusion (GPFI) and other international processes.