What diplomatic and economic measures can the UK undertake to expand its ties with North Africa following the Arab Spring?
KAWCZYNSKI: The UK could be more engaged with North Africa than it is today. Both the government and private sector should do more – not only via the EU – and take a more active role in several areas. There is scope for us to help with diplomatic issues. The Western Sahara provides a good example, where we could help arbitrate amongst the Moroccans, the Polisario and the Algerians to facilitate discussion. After all, this is a serious issue which is limiting North Africa’s potential.
In fact, this ties into – and could directly benefit – another area where the UK could do more: trade. The whole of North Africa’s GDP would increase by 2-3%, if the border between Morocco and Algeria was fully opened. We want North African countries to do well economically, since this region is of huge strategic importance to the UK. They certainly are close enough to us and have enough productive capacity for the UK to benefit from substantial trade with them, whether we are talking about Morocco, Algeria, Tunisia, Libya or Egypt. But we are not trading with these countries to anything like the extent our European partners are.
This is partially because many British firms are either unwilling or uninterested to work in North Africa for a number of reasons – whether it is fear of the unknown, security concerns, such as in Libya, or the language barrier. To overcome this, we need a revamping and reorganisation of UK Trade and Investment (UKTI), with champions for each country, someone who speaks the local language and with staff that can report directly to the head of government and companies the various opportunities and when they become available.
There has to be a better mechanism by which the information of contracts is disseminated to British suppliers. The French do this extremely well. In fact, the state helps French companies, via its own connections to North African countries, to secure contracts. There is Compagnie Française d’Assurance de Commerce Extérieur (COFACE), for example, which helps with export credits, guarantees and insurance for small French companies entering these markets for the first time. The Turkish government is also doing similar things, and doing them all over the region.
Yet we cannot seem to marry politics and commerce.
British exports in North Africa are totally negligible.
There needs to be a cohesive strategy to ensure that government and businesses are working together to maximise British exports to the region.
What opportunities are there for UK investors to support sustainable job creation in the region?
KAWCZYNSKI: We will never compete with China in terms of selling cheap goods, but we can substantially help with technology transfer. For example, CGI Consulting, a British company, helped implement the car production operations in Iran for Khodro, the “national” car. This was long ago, but now the Iranians export the car all over the world and make a fortune doing so.
As such, our key focus as investors should be to think of projects that would allow North Africa to manufacture on their own, which benefits both sides. Here is an example: let’s say North Africa imports refrigerators.
But why buy a foreign refrigerator when you can make it yourself? A North African market could make calculations assessing how much it spends on importing refrigerators each year, and the cost of setting up a refrigerator factory. If it is cost feasible, we can send our experts and through joint ventures help set up production for the refrigerator factory, which the North African market can then use to not only supply domestic consumption, but also export abroad.
Huge opportunities exist for joint manufacturing projects, bringing benefits to us as foreign investors.
By setting up a production facility in Tunisia, the UK could in fact piggyback on separate trade agreements that Tunisia has with other countries that are far more favourable than even our own direct EU ones, thereby gaining access to a third country to supply its market.