ESPON project 3.4.1.

Europe in the World

Final Report – Vol.1

3
Co-financed by the European Community through the Interreg III ESPON Programme
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 ESPON 3.4.1
Europe in the World

Final Report – Vol.1

5
This report represents the final results of
a research project conducted within the
framework of the ESPON 2000-2006
programme, partly financed through the
INTERREG programme.

The partnership behind the ESPON

programme consists of the EU
Commission and the Member States of the
EU25, plus Norway and Switzerland. Each
partner is represented in the ESPON
Monitoring Committee.

This report does not necessarily reflect

the opinion of the members of the
Monitoring Committee.

Information on the ESPON programme

and projects can be found on
www.espon.lu”

The web side provides the possibility to

download and examine the most recent
document produced by finalised and
ongoing ESPON projects.

ISBN number: work in progress;

request sent to AFNIL
This basic report exists only in an
electronic version.
Word version:

© The ESPON Monitoring Committee and

the partners of the projects mentioned.

Printing, reproduction or quotation is

authorized provided the source is
acknowledged and a copy is forwarded to
the ESPON Coordination Unit in
Luxembourg.

6
Participants

Scientific coordination

This work was coordinated by Claude Grasland (Professor at University Paris 7,

UMR Géographie-cités) and Clarisse Didelon (Post PhD at University Paris 7,
UMS RIATE)

Core Team

RIATE: Bernard Corminboeuf, Marc Guerrien, Nicolas Lambert and Isabelle

Salmon

IGEAT: Laurent Aujean, Gilles Van Hammes, Pablo Medina, and Christian
Vandermotten

ITPS: Mats Johansson and Daniel Rauhut

LADYSS: Pierre Beckouche and Yann Richard

UMR Géographie-cités: Nadine Cattan, Christian Grataloup, Guillaume Lesecq

and Christine Zanin

Experts

CRS HAS: Györgyi Barta, László Dancs, Imre Nagy, Alexandra Szigeti, and Péter
Strömpl

TIGRIS - "Alexandru Ioan Cuza" University: Octavian Groza, Ionel Muntele,

Alexandru Rusu, Oana Stoleriu and Georgiana Voicu

ETH Zurich: Marco Keiner

GRUPO SOGES: Alberto Vanolo

ORMES: Mohamed Charef and M’hamed Wahbi

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 TABLE OF CONTENTS

Figure p11
Maps p13
Tables p15
Boxes p16

1) EXECUTIVE SUMMARY P17

1.1. New tools for ESPON researchers: WUTS and Euromed template
p18
1.1.1 World unified territorial system p18
1.1.2 The Euro-Mediterranean template p18
1.2 The “size” of ESPON in the World p20
1.3 Area of influence of ESPON p22
1.4 ESPON and its neighbourhood p24
1.5 Internal differentiation of ESPON territory p26
1.6 Policy issues p28

2) INTRODUCTION P29
2.1 Wide Wild World p29
2.2 Which vision of Europe in the World? P33
2.2.1 Centre/Periphery: the Triad and its region p34
2.2.2 The north-south opposition: still not obsolete? P35
2.2.3 Permanent features and geopolitical changes p36
2.2.4 The dialogue between civilisations p36
2.2.5 And still for lack of anything better, the continents p37
2.2.6 Conclusion p40
2.3 Ambitions and limits of the project ESPON 3.4.1. p42

3) PART A: DELIMITATION OF WORLD REGIONS P45

3.1. Introduction p45
3.1.1 Options for World Regionalisation p45
3.1.2 Definition of regions p46
3.1.3 Which method of regionalisation? P47
3.2 In search for World Regions p49
3.2.1 A mental approach: the perception of World Divisions p49
3.2.2 The limits of political division of the World p57
3.2.3 Functional division of the World based on economic and demographic flows
p63
3.2.4 Homogeneous regions and territorial discontinuities: the spatial dimension
of inequalities of development p67
3.3 World Unified Territorial System (Wuts) p82
3.3.1 Introduction: from NUTS to WUTS … p82

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3.3.2 The World in 3 Global Regions (WUTS1) p84
3.3.3 The World in 7 Macro Regions (WUTS2) p87
3.3.4 The World in 17 Meso Regions (WUTS3) p89
3.3.5 The European Neighbourhood in 12 Micro Regions (WUTS4) p91
3.4 Conclusion: A tool for benchmarking between ESPON 29 and the rest
of the world p93
3.4.1 Human development in 2002 p95
3.4.2 Distribution and the evolution of GDP per capita (1980-2004) p97
3.4.3 Financial flows p99

4) PART B: HOW ESPON IS EMBEDDED IN THE WORLD BY FLOWS? p101

4.1 Introduction p101
4.2 A functional approach: Triad and the centre-periphery division
of the World p104
4.2.1 The Place of ESPON in the World Economy p104
4.2.2 Trade and inequalities p107
4.2.3 Trade flows and the Triad p110
4.3 Networking ESPON 29 through air flows p114
4.3.1 Re-thinking the hierarchy, areas of influence, borders and other concepts
p114
4.3.2 The conventional approach based on passenger numbers p115
4.3.3 An alternative approach of World global network derived from Tobler’s
work p120
4.4 Demographic flows towards Europe p126
4.4.1 Potential demographic & economic complementarities and figures of net
migration p126
4.4.3 Migrations toward the ESPON space 130
4.4.4 What it is at stake concerning the migration flows toward Europe p132
4.5 An attempt of delimitation of ESPON29 “influence area” or
“relational networks” in the World p136
4.5.1 The choice of criteria p136
4.5.2 An index of global influence of ESPON29 in the World? P138
4.5.3 Historical heritages as determinant factors of relations p140
4.5.4 A strategic typology of ESPON 29 relations with the World p142
4.6 Conclusion p145
4.6.1 Towards a strategic vision of the ESPON 29 territory in the World
p145
4.6.2 Policy recommendation: aid Flows and Millennium Objectives p147
4.6.3 Promoting a new template for further researches (ESPON II?) p152

5) PART C: ESPON IN ITS NEIGHBOURHOOD P154

5.1 Introduction; two European regionalisms p154
5.2 How the neighbours impact the ESPON territory p157
5.2.1 Neighbours’ weight p157

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5.2.2 Territorial stakes and recent impacts on ESPON territory p159
5.3. Continuity and discontinuity, eastward and southward p161
5.3.1 Methodology for discontinuity and borders analysis p161
5.3.2 The West-East “stair gradient” p163
5.3.3 The double North-South discontinuity p170
5.3.4 Internal discontinuity: the case of Switzerland and Norway p174

5.4 Networking Euromed: flows in the European region p175

5.4.1 People p175
5.4.2 Trade and financial flows p177
5.4.3 Public funds p181
5.4.4 Air flows p185
5.5 Conclusion: Is the whole better than the sum of its parts: in varietate
Concordia
p189
5.5.1 Redistribution of population in Euro-Mediterranean (1950-2050) p189
5.5.2 Ageing and sustainable demographic development p191
5.5.3 Human development as a diffusion process with barriers effects? p193
5.5.4 The past and future evolution of the political weight of European Union in
the World p195
5.5.5 Policy orientations p197

6) PART D INTERNAL DIFFERENTIATION OF EUROPEAN TERRITORY REGARDING

TO THE RELATIONS WITH THE REST OF THE WORLD P201
6.1 Introduction p201
6.2 Internationalization of regions and nations in Europe: p202
6.2.1 Trade flows p202
6.2.2 Regional hierarchy in the world and European economies p214
6.2.3 Air flows and gateway cities: differentiating or re-balancing the ESPON
territory? P217
6.3 The strengths and weaknesses of ESPON regions in the face of
globalization
p222
6.4 Synthesis p225
6.5 Conclusion p231

7) CONCLUSION P232
7.1 The false problem of the boundaries of Europe … p233
7.2 The real problem of multilevel approach p236
7.3 One World, millions of places p240

References p243

10
FIGURES

Figure 1 Discontinuities between ESPON 29 and its southern neighbours 26

Figure 2 Evolution of the share of World population and World GDP (pps)
of the European Union (1950-2020) ............................................26
Figure 3 : More than 4000 deaths in 10 years at the borders of EU........32
Figure 4 : Tectonic plates ................................................................41
Figure 5 : Olympic rings ..................................................................42
Figure 6 : The Centre-Periphery vision of the World........................... 112
Figure 7 : The Network-Archipelago Vision of the World ..................... 112
Figure 8 : external trade of Western Europe by type of product, with North
America, Asia and Latin America (1998-2002), in billions of current $
............................................................................................ 117
Figure 9 : Repartition of migrants according to their education level and
their country of residence in 2000 ............................................. 141
Figure 10 : Repartition of migrants according to their education level and
their WUTS of origin in 2000 (neighbouring countries).................. 141
Figure 11 : Correlation between trade balance and global influence of
ESPON 29 .............................................................................. 154
Figure 12 : Share (%) of intra-regional trade in total trade of each
grouping................................................................................ 162
Figure 13 : Discontinuities between ESPON 29 and its eastern neighbours
............................................................................................ 173
Figure 14 : Evolution of transit traffic in Latvia. ................................ 176
Figure 15 : The territorial organization scheme in Central-east Europe . 177
Figure 16 : Romania in the core of the Euro-Asian peripheries ............ 178
Figure 17 : Discontinuities between ESPON 29 and its southern neighbours
............................................................................................ 180
Figure 18 : UE15’s goods trade 1980-2003 (imports + exports, b Euros)
............................................................................................ 188
Figure 19 : 2000-04 evolution (%, value) of UE25 goods trade with
various neighbours.................................................................. 189
Figure 20 : ESPON countries are the main pole for the neighbours’
economy : The case of Tunisian inflows of FDI, breakdown by
geographical origin.................................................................. 190
Figure 21 : European aid subsidies, by region, 1991-2003 ................. 194
Figure 22 : OECD Countries’ public aid in 2003 and 2004 :Breakdown by
donors and beneficiaries .......................................................... 195
Figure 23 : Comparison of sustainable demographic development of
ESPON, USA, Japan and China (1980-2030) ............................... 202
Figure 24 : Sustainable demographic development in EuroMediterranea
(1955-2045) .......................................................................... 202
Figure 25 : Evolution of the share of World population of the European
Union (1950-2020) ................................................................. 206
Figure 26 : Evolution of the share of World GDP (pps) of the European
Union (1950-2020) ................................................................. 206

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Figure 27 : Evolution of the share of EU25 in the trade of European
countries (1960-2000)............................................................. 218
Figure 28 : Geographical structure of the trade of different types, by
WUTS3, 1996-2000 221
Figure 29 : Regional world cities and their spheres of influence.................. 249
Figure 30 : Hierarchical organisation of system and sub-systems.............. 250

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MAPS

Map 1 : The World in 17 meso regions..................................................................... 19

Map 2 : The European Neighbourhood in 12 micro regions (WUTS4) ......... 19
Map 3 : Evolution of World share of population and GDP (1952-1998)...... 21
Map 4 : Joint evolution of the share of the World population and GDP PPS
from 1950-54 to 1996-2000 ................................................................................. 21
Map 5 : Typology of ESPON29 influence in the World........................................ 24
Map 6 : Synthesis of the regional insertion in the world economy ............... 28
Map 7 : cartographic templates for ESPON............................................................. 34
Map 8 : cartographic template for the World......................................................... 34
Map 9 : International organisations limits ............................................................... 57
Map 10 : Countries limits................................................................................................ 57
Map 11 German firms dividing the World ................................................................ 60
Map 12 : British firms dividing the World ................................................................ 60
Map 13 : French firms dividing the World ............................................................... 60
Map 14 : Non Governmental Organisation dividing the World ........................ 61
Map 15 : International Organisation dividing the World.................................... 61
Map 16 : ESPON community dividing the World................................................... 63
Map 17 : Europe as “Lost Continent” ........................................................................ 65
Map 18 : Spatial and political distribution of World population in 1999...... 67
Map 19 : Spatial and political distribution of World GDP (pps) in 1999 ...... 69
Map 20 : Major bilateral trade flows between states of the World (96-
2000).............................................................................................................................. 72
Map 21 : Regionalisation of the World based on trade flows 96-2000 ........ 75
Map 22 : Terrestrial borders extended to short maritime distances ............ 77
Map 23 : Discontinuities of Human Development in the World in 2002...... 79
Map 24 : The components of Human Development in the World in 2002.. 81
Map 25 : Discontinuities of GDP/inh. in the World in 2002 .............................. 83
Map 26 : Evolution of World share of population and GDP (1952-1998) ... 85
Map 27 : Joint evolution of the share of the World population and GDP PPS
from 1950-54 to 1996-2000 ................................................................................. 86
Map 28 : Demographic potentialities for the XXIth century .............................. 89
Map 29 : The World in 3 global regions (WUTS1)................................................ 94
Map 30 : The World in 7 Macro regions (WUTS2)................................................ 96
Map 31 : The World in 17 meso regions (WUTS3)............................................... 98
Map 32 : The European Neighbourhood in 12 micro regions (WUTS4)..... 100
Map 33 : Share of the trade with ESPON 29 ........................................................ 114
Map 34 : Share of each country in the External trade of ESPON 29 .......... 115
Map 35 : Dominant trade orientations 1996-2000 ............................................ 120
Map 36 : International air traffic............................................................................... 124
Map 37 : International air traffic, EU traffic excluded ...................................... 125
Map 38 : Major international air flows (intra-EU flows included)................. 126
Map 39 : Major International air flows (intra-EU flows excluded) ............... 127
Map 40 : Global air interactions in the World in 2000...................................... 131
Map 41 : Push-Pull Factors in 1999 ......................................................................... 134
Map 42 : Net number of migrants at WUTS4 level 2000-05.......................... 134

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Map 43 : Push-Pull Factors in 1999 in Euromed Area ...................................... 136
Map 44 : Net number of migrants in Euromed 2000-05 ................................. 136
Map 45 : Origin of migrants in ESPON according to the country of birth . 138
Map 46 : Global influence area of ESPON29 in the World............................... 146
Map 47 : Colonial heritage of ESPON 29................................................................ 148
Map 48 : Cultural Networks of ESPON 29.............................................................. 148
Map 49 : Typology of ESPON29 influence in the World ................................... 152
Map 50 : The Euro Mediterranean template......................................................... 161
Map 51 : Imports and exports of EU’s neighbours. ........................................... 166
Map 52 : Bilateral intensity of the Russian trade ............................................... 167
Map 53 : North-South and East –West sample of states used for the
visualisation of discontinuities............................................................................ 170
Map 54 : Number of Moroccan citizens listed in consular services abroad in
2004 – (in Euromed region). .............................................................................. 181
Map 55 : Variation of number of Moroccan citizens listed in consular
services abroad by country from 2002 to 2004.......................................... 181
Map 56 : Egypt tourism ................................................................................................ 184
Map 57 : Net official development assistance to neighbourhood and share
of the EU (members and Commission) from 2001 to 2004 (annual
average) ...................................................................................................................... 193
Map 58 : Major air connexions between Western Europe and its
neighbourhood.......................................................................................................... 196
Map 59 : Internal connexions of the neighbourhood of Western Europe . 198
Map 60 : Population in Europe and its Neighbourhood in 2030 ................... 200
Map 61 : Diffusion of human development in Euromediterranean countries
between 1975 and 2002....................................................................................... 204
Map 62 : opening rate of the trade of European countries with non ESPON
countries, 1996-2000 (ex map 43) .................................................................. 215
Map 63 : Share of ESPON in each ESPON country external trade of
merchadises, 1996-2000...................................................................................... 217
Map 64 : Classification of the countries regarding yo the geographical
orientation of their extra european trade, 1996-2000 ............................. 220
Map 65 : Share of trade of each country with different ESPON countries
........................................................................................................................................ 223
Map 66 : Location of the transnational headquarters, 2005.......................... 226
Map 67 : Location of the offices of advanced service firms ........................... 227
Map 68 : ESPON 29 Global Airports in 2000 ........................................................ 233
Map 69 : Finance and business services in the regional added value, 2002
........................................................................................................................................ 236
Map 70 : Synthesis of the regional insertion in the Wolrd economy .......... 239

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TABLES

Table 1 : Major differences of Human development between neighbouring

states of the World in 2002 ................................................................................... 78
Table 2 : Major differences of GDP per capita pps 1996-2000 between
neighbouring states of the World in 2002 ....................................................... 82
Table 3 : Size of the 3 World global regions (WUTS1)....................................... 93
Table 4 : Size of the 7 World macro regions (WUTS2) ...................................... 96
Table 5 : Size of the 17 World meso regions (WUTS3) ..................................... 97
Table 6 : Size of the 11 micro regions of European Neighbourhood in
EurAfrica (WUTS4) .................................................................................................... 99
Table 7 : Distribution of Human Development with WUTS............................. 104
Table 8 : GDP PER CAPITA. Annual average GDP per capita (in constant
US 2000 dollars) distributed in periods of five years................................ 107
Table 9 : FDI Inflows, Annual average inflows in millions of current US
dollars, distributed in periods of five years (World Bank)....................... 109
Table 10 : Opening rate of Europe, USA and Japan. ........................................ 118
Table 11 : Trade between WUTS3 regions and the Triad in 1996-2000 ... 121
Table 12 : Most important air flows in 2000 (millions of Passengers)....... 129
Table 13 : Most important air connexions in 2000 (millions of
Passengers.km)........................................................................................................ 129
Table 14 : Classification of the World Cities according to air connexions in
2000.............................................................................................................................. 132
Table 15: Criteria of delimitation of ESPON29 Influence Area in the ......... 144
Table 16 : Maximum and minimum values of ESPON 29 Influence............ 146
Table 17 : Trade of ESPON29 with the rest of the World by type of
proximity..................................................................................................................... 154
Table 18 : The Millennium Development Goals ................................................... 156
Table 19 : Evolution of population by state in EuroMediterranea (1950-
2050)............................................................................................................................ 200
Table 20 : Main connexions of ESPON 29 airports according to air traffic
weighted by distance in 2000. ........................................................................... 229
Table 21 : Correlation between internationalisation indicators and the
component 1 of the PCA analysis...................................................................... 238
Table 22 : Correlation between technological indicators and the
component 1 of the PCA analysis...................................................................... 238
Table 23 : Economic performances of some regions includint industrial
districts, 1995-2002 ............................................................................................... 240

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BOXES

Box 1 : Options for World Regionalisation............................................................... 53

Box 2 : ESPON community’s vision of the World (Cf. FR - Vol 3 ) ................ 63
Box 3 : Labour Mobility and education level......................................................... 140
Box 4 : The UE new border in Hungary. Asymmetric relations with
Romania and Serbia ............................................................................................... 174
Box 5 : Russia and Baltic states: the various scales of a difficult relation175
Box 6 : The case of Romania: an “entre-deux” space...................................... 177
Box 7 : The mobility between Morocco and Europe: a common subject of
concern........................................................................................................................ 181
Box 8 : The European policy of the Swiss federal council............................... 183
Box 9 : The geography of Italian internationalisation : relations with
Central Eastern European and South and Easter Mediterranean
countries ..................................................................................................................... 191
Box 10 : Switzerland and the European Union.................................................... 224
Box 11 : The impact of relocalisation on the position of ESPON regions in
value chains: The example of textile value chain in three marshallian
districts........................................................................................................................ 240
Box 12 : Pattern of migration in Europe ................................................................ 241
Box 13 : Definition of the environment of a system ......................................... 246

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1) EXECUTIVE SUMMARY

The World is becoming increasingly complex and thus cannot be analysed in a

spatial framework restricted to the European Union or to the ESPON area even if
the common feeling of “European decline” reinforces the temptation to ignore
what is happening ‘outside’. The elaboration of the ESPON cartographic template
at the beginning of the programme is symptomatic of that fact with its limited
framework of 29 countries. As regards ESPON, important milestones were
reached with the preliminary study ‘One Europe in the World’ in the context of
the ESPON project 3.1, which proposed a new cartographic template at world
scale, and, ultimately, with the launch of the ESPON project 3.4.1 - “Europe in
the World”.

In this project we decided to focus initially on the elaboration of the long term
integrated tools, which we hope will provide the groundwork and a solid basis for
what is to follow in this field of study. We therefore elaborate new databases, a
new hierarchical division of the World and new templates all of which are among
the main outputs of our work (see I). Our main concern however was to
introduce the 4th dimension (the World) into the analysis of the ESPON area,
which entailed the proposing of a joint analysis of the influence of ESPON on the
rest of the World and vice versa.

This first volume presents a relatively short synthesis illustrated by original maps
tables and figures and organized around our four key questions which try to
examine the interaction between ESPON and the World at different geographical
scales. The first part, “The Division of the World” proposes a regionalisation of
the World according different criteria, with the main objective being to propose a
benchmarking of the position of ESPON in respect of other World regions (see
II). The delimitation of the ESPON influence area is then studied (see III) by
examining different types of relations and flows between ESPON and the rest of
the World. The third part focuses on the neighbouring countries and their
functional and (where applicable) their potential political integration into the
ESPON functional area within the perspective of the European Union enlargement
question and the European Neighbourhood Policy (see IV). Finally, in the fourth
part we look at the internal differentiation of the ESPON area according to
globalisation while trying to measure the strengths and weaknesses of ESPON
regions in respect of the demands of the global economy.

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1.1. New tools for ESPON researchers: WUTS and the Euromed
template

1.1.1. World unified territorial system

Many divisions of the World in “regions” (clusters of states) are actually used by
international organisations, either private (transnational firms) or public (UN
agencies etc). A great variety of solutions to this question however exist making
it impossible to use any of them as a reference point for ESPON work. We have
therefore produced a tool that is the elaboration of a harmonised hierarchical
system of the World called WUTS (World Unified Territorial System) (map 1).

Our WUTS proposal is organised into 5 hierarchical levels, from the state level
(WUTS 5) to the World level (WUTS 0). It is based on objective criteria produced
in the context of the various research efforts conducted during the project and
even if it suffers from certain limits we hope that the WUTS system will provide a
useful tool for European policymakers. Its major point of interest is to make a
multiscalar analysis of the position of ESPON in the World easier with the
harmonisation of territorial units on the World scale to fit European questions.

1.1.2The Euro-Mediterranean template

Limiting the research conducted in the ESPON programme to a focus on the EU29
is potentially to generate a number of serious theoretical and practical mistakes
and omissions in the analysis of the main trends shaping the European territory.
The strategic vision of the ESPON area must therefore be broader. We therefore
build a Euro-Mediterranean template widening the vision of ESPON, based on the
analyses conducted in the project and showing the importance of the Southern
and Eastern neighbours for ESPON. The projection used to build the map
template is centred on ESPON and is enlarged to the South by the North African
countries, to the East by the Balkan countries plus Turkey, Russia, the countries
of the Caucuses and finally by those of Central Asia (map 2). This pan-European
view should be taken into account by European policymakers when elaborating
long-term strategies for the European Union.

In addition, a WUTS4 level regionalisation has been elaborated for this new
template for the purpose of analysing in more detail the functional European
neighbourhood. Micro-regions are particularly useful for the analysis of this
functional neighbourhood because they introduce internal divisions both within
the ESPON area and in its northern and Southern peripheries.

18
 Map 1 : The World in 17 meso regions

Map 2 : The Functional European Neighbourhood in 12 micro regions

(WUTS4)

19
1.2. The “size” of ESPON in the World

One of the main purposes of the “Europe in the World” project was to outline a
clear vision of the position of the ESPON area in the World vis-à-vis various
indicators and, if possible, from a dynamic point of view. The acquisition of the
long term “Maddison database” by the coordination unit allowed us to conduct a
number of interesting studies on the evolution of the position of ESPON in the
World, both in respect of ESPON’s share of World population and World wealth.

With the analysis of the share of World population (map 3) and World GDP (pps)
of each state it is clear that a number of very important changes have occurred
during the last 50 years with a global transfer of population and wealth from the
traditional centres of the Triad to their peripheries. The Triad centres have each
experienced a lower increase in their population and wealth compared to the
World trend. Their population and wealth did not decrease in absolute terms but
their World share was strongly reduced in favour of other countries such as China
(in terms of GDP) or India (for population).

However this analysis of population and GDP pps at the state level is not
sufficient for a sound evaluation of the real potential of states. For example, the
stability of the level of GDP per capita (compared to the World mean) of a given
state can be attributed to (1) the joint stability of its share of population and
GDP, (2) a joint decline of both factors or (3) a joint increase of both factors.

A synthetic typology of the evolution of the share of World population and GDP of
the different states of the World (map 4) reveals that the centres of the Triad
have generally experienced a joint decline in their share of GDP and population,
but as the reduction was generally equivalent or higher for population than for
GDP, they maintained or increased their level of GDP per inhabitant (type C and
D). The states located in their immediate periphery have however generally
experienced the reverse evolution, with a joint increase of their share of
population and GDP in the World. Even if their GDP per capita did not necessary
increase more quickly than the rest of the World, their economic and
demographic size has clearly increased. The states in this situation (type A and
B) define a “Golden ring” of growth from Mexico to Brazil, Northern Africa, the
Middle East and south-eastern Asia. It is generally only in the deep peripheries,
located at longer distance from the Triad that the worse situation of an increase
in the share of population and a decrease of the share of GDP (type E) became
manifest.

20
 Map 3 : Evolution of World share of population and GDP (1952-1998)

Map 4 : Joint evolution of the share of the World population and GDP PPS
from 1950-54 to 1996-2000

21
1.3 ESPON’s Area of influence

Another way of defining ESPON’s place in the World is to study how it is

embedded in the World by flows. The ESPON area is in a phase of rapid
integration both inside ESPON but also between ESPON and the rest of the
World. So particular attention should be paid to exchange and cooperation
networks that highlight the integration pattern of ESPON area in the World
economy. 1

The analyses of air, trade and migratory flows (FR - Vol. 1 - part B) suggest that
it is possible to identify a so-called ESPON “area of influence” in the World. As
this area is related to ESPON’s “relational network” the result should not
necessary be a continuous area organised in concentric circles. Four kinds of
criteria have been used gathering 18 variables: accessibility (basic conditions for
the development of relations), networks (common language and/or history),
interactions (trade flows and air flows) and complementarities (difference of
development) (map 5).

A cluster analysis was then applied to the 18 variables in order to define

synthetic types of relation between ESPON and the rest of the World. This
analysis reveals four main types of ESPON external relations.
Type A: Functional Integration: concerns the states localised in the
immediate neighbourhood of ESPON whose trade and air relations are strongly
polarised by ESPON. They do not necessary share a common language or religion
and they have often been in conflict with ESPON states in the past.
Type B: Responsibility: gathers together the states for which ESPON has
significant responsibility for their future development, primarily because of
Europe’s historical responsibility for colonisation and the exploitation of African
countries. Secondly, because Africa could be a major centre of World production
in the future while its young population will provide many opportunities. It is
then strategically advantageous for ESPON to reinforce its historical relations
with these countries forging a new relationship based on ‘common ownership’ of
the political process.
Type C: Opportunity: gathers together countries located far from ESPON but
sharing a common language or history. They could potentially be very close allies
for ESPON in a global World where services represent the major part of ‘added
value’ and where scientific and cultural innovations are major factors in long
term development.
Type D: Challenge, highlights those countries which ESPON is less able to
influence or to easily develop cooperative relations because of differences in

1
This is not to suggest however that the discrete processes of ‘political’ integration within the ESPON space and
‘functional’ integration between the ESPON space as a whole and the rest of the world are necessarily
coterminous.

22
language, geographical distance, or the weakness of historical relations. Many of
these countries are however located in areas where significant stocks of energy
resources are located and/or have dynamic new economies.

23
Map 5 : Typology of ESPON29 influence in the World

24
1.4 ESPON and its neighbourhood

The research conducted on the measuring and cartography of territorial cohesion

in the ESPON programme has established that the spatial organisation of
heterogeneity is a crucial output for territorial planning. Perhaps even more
interesting than the traditional global measurement of inequalities is the spatial
dimension of heterogeneity that underlines the potential consequence of
proximity between regions of different levels of development. From a spatial
point of view (figure 1), this heterogeneity can define either regular gradients (if
transition between different levels is smoothed) or homogeneous areas
separated by territorial discontinuities (if the transition is sharp). This then raises
the question of functional integration: are the ESPON area and its neighbours
converging or diverging?
The West-East “stair gradient”; the differences between countries are
smoothed and relatively gradual when moving from West to East. Each state at
an intermediate level is, at the same time, both attracted by its western
neighbours and attractive to its eastern ones. The potential flows induced by this
organisation are potential vectors for a diffusion of prosperity and development
from west to east.
The double North-South discontinuities were mainly visible, for the social
criteria of life expectancy during the 1950’s In the 1990’s the sharp discontinuity
previously marked by the Mediterranean Sea disappeared and we observed a
gradual transition between Italy and Algeria. At the same time however the level
of discontinuities increased between North African countries and Sub-Saharan
ones.

The potential demographic and economic dynamism of the North African

countries is a major opportunity for ESPON, the harvesting of which probably
provides the only possible way of maintaining its position as a global actor at
World scale. The evolution of the share of population and GDP of ESPON at World
scale decreased between 1950 and 2004 (figure 2). During this period however
although this structural trend towards demographic and economic decline
continued it was always balanced by the political dynamic of EU enlargement.

It is important however to underline the fact that the question of political

enlargement is a false one when considered from a strategic perspective. Many
potential political solutions are however available to insure continuing strong
linkages between the European Union and its neighbours. What is not at issue
here is however the fact that the European Union will be obliged to further
develop these linkages in the future if it wants to maintain its global influence in
the next 20 years.

25
Figure 1 Discontinuities between ESPON 29 and its southern neighbours

Figure 2 Evolution of the share of World population and World GDP (pps)
of the European Union (1950-2020)
15% 30%

12% 25%
Share of world population

Share of world GDP (PPPs)

9% 20%

6% 15%

3% 10%

0% 5%
1950 1960 1970 1980 1990 2000 2010 2020 1950 1960 1970 1980 1990 2000 2010 2020

UE6 UE9 UE10 UE12 UE12+ UE15 UE25 UE27 UE28 UE UE6 UE9 UE10 UE12 UE12+ UE15 UE25 UE27 UE28 UE

26
 1.5 Internal differentiation of ESPON territory

The final objective of the project “Europe in the World” is to provide a general
overview of the relations between regions and cities of ESPON and the rest of the
World, i.e. to study “the World in Europe”, or the influence of globalisation on the
ESPON territory.

The structural strength and weakness of the ESPON area have been evaluated on
the basis of the sectoral economic structure as well as in relation to a number of
indicators addressing the technological levels of the regions. A qualitative
typology of regions according to these indicators allows us to identify the
competitive or vulnerable regions or cities in respect of the World economy (map
6). Four major types of spaces can be identified according to their relations with
the rest of the World.
The highly internationalized metropolitan regions, i.e. most of the major
ESPON cities; however there are differences in the level of internationalisation
that allow us to identify the biggest world metropolises of London and Paris and
some very internationalized but less important cities that function as gateways
between Europe and the rest of the world.
Central regions of Europe, the “blue banana”, without large international
metropolises; Most of these areas are characterized by a solid economic
structure with a relatively high share of business and financial services, as well
as a high technological level.
Peripheral and intermediary regions with a high share of personal
services; they have low average technological and internationalization levels
and are, to a certain extent, relatively indifferent to the rest of the world. These
regions are often more dependant on national or European transfers
Peripheral and intermediate regions with a high share of low-level
technological manufacturing industries; They are subjected to international
competition, notably in the textiles sector with low cost labour countries.
However, in Eastern Europe, these regions mostly benefit from the spatial
reorganization of this sector.

27
Map 6 : Synthesis of the regional insertion in the world economy

28
1.6 Policy issues

- Aid flows and millennium objectives

ESPON countries have an important external role to play as they belong to the
developed World. Development aid flows are a pillar of Millennium development
Goal number 8 (“a global partnership for development”) where Europe has taken
on a special role. But in order for this aid to be effective three conditions must be
met: (1) Aid must be adequate enough to spark human development; (2) it must
be cost effective with low transaction costs and (3) recipient countries must have
primary responsibility for its use, that means that aid must be untied (FR – Vol.1
- part B).

- Lisbon strategy and the neighbourhood policy

The main challenge for the European Union in the next 20 years is the decision to
either integrate or to ignore the neighbourhood in general and North Africa in
particular in its economic and political strategy. A “bunker strategy” designed to
protect an economically declining and demographical ageing Europe from
migrants would have tragic effects (FR – Vol. 1 - part C). The key to maintaining
Europe’s place in the World could thus be the setting up of a Marshall plan
directed to ESPON’s neighbours, primarily to the south, which would have many
advantages for both Europe and its neighbouring countries.

- Territorial cohesion / ESDP

The concept of territorial cohesion elaborated by European Union through the
ESDP and actually applied inside the ESPON 29 territory should be reformulated
in the wider context of an enlarged space towards both east and south. The
spatial structure of heterogeneity (gradient or discontinuity) is not the same in
each direction and different strategies thus need to be elaborated, in particular
through a new shaping of INTERREG cooperation areas. Strategies for regional
development elaborated inside ESPON territory could be transposed to
neighbouring countries, in particular in the border regions.

- Polycentrism and gateway cities

Gateway cities linking ESPON 29 to the world remain concentrated in the
Pentagon, though opportunities exist for their development in peripheral regions,
including cities located outside ESPON territory (Istanbul, Moscow, Tel Aviv,
Dubai, and Jeddah). What is at stake here is the creation of a strategic plan for
the elaboration of a pan-European network of network of cities insuring
specialised functions : (i) connection to the global level (London, Paris, Frankfurt,
Zurich, Amsterdam) (ii) specialised connections to selected area like Latin
America (Madrid), Sub-Saharan Africa (Paris, Brussels), Central Asia and the
Middle East (London, Istanbul), Russia (Frankfurt, Moscow), etc. (iii) internal

29
north-south connections between northern Europe and both shores of
Mediterranean Sea.

30
2. INTRODUCTION

2.1. Wide Wild World

You know I've seen a lot of what the World can do

And it's breakin' my heart in two
Oooh, baby, baby, it’s a wild World
It’s hard to get by just upon a smile
Cat Stevens, Songs

In a famous paper entitled “Story of the Blues” 2 , two reporters from The
Guardian newspaper attempted to follow the geographical path of the production
of a pair of Lee Cooper LC10s that cost £19.95 at Cromwell's Madhouse in
Ipswich in 2001. After a fascinating survey which led from Ipswich (UK) to Ras
Jebel (Tunisia) and Saklo Agoume (Benin), the reporters identified that a
minimum number of 13 states had contributed to the production of the cloth sold
in Ipswich and thus to the elementary flows or connections between firms in
these countries. The reporters estimated that, “At a very rough, very
conservative estimate, [this pair of LC10s has undergone] a journey of about
40,000 miles 3 on which components and raw materials criss-cross the globe in a
sort of jerky, deranged dance”.

This example is a perfect illustration of the idea that the world is becoming
increasingly complex and thus that it cannot simply be analysed in a spatial
framework restricted to European Union. In the production chain of the LC10s, 6
states in the ESPON area are included (France, the UK, Germany, Hungary, Italy,
and Spain) although the main task of production is carried out in a neighbouring
country (Tunisia) with important inputs also emanating from countries located all
around the rest of the world (Turkey, Benin, Namibia, Pakistan, Australia, Japan,
…). As such, when European policymakers come to take a decision on a subject
like the complete liberalisation of the international trade in textiles and clothing,
they should be aware that the consequences are not only sectoral and economic
but also geographical. This geographical consequence has to be evaluated in
different territorial frameworks (inside the EU, in the functional ESPON
neighbourhood, and in the rest of the world) and at different scales (national,
regional, local). This then is an exceptional opportunity for the ESPON
programme to demonstrate that space does matter and that sectoral problems
(trade, research, the internal market …) are not independent and should thus be
analysed in their territorial dimension according to a systemic approach at
different scales.

2
“Story of the blues”, F. Abrams & J. Astill, The Guardian, Tuesday May 29, 2001
3
About 65 000 kilometres.

31
Globalisation is not only a purely economic process characterised by the
increasing mobility of capital in a borderless abstract space. It is also a strong
social and territorial reality which can be illustrated, in the European case, by the
increasing number of migrants who try to gain access to the European Fortress
and die trying. According to official registration returns, P. Rekacewicz and O.
Clochard have established that a minimum number of 4000 people died during
the last ten years while trying to gain access to Schengen territory (Figure 3).
This is however a minimum estimation and in reality the real figure is probably
much higher …

Figure 3 : More than 4000 deaths in 10 years at the borders of EU

Source : P. Rekacewicz & O. Clochard, Le Monde Diplomatique, Mars 2003

According to Cat Steven’s song, we are leaving in a ‘wild world’ where European
policymakers often act as if Europe is increasingly less able to influence the
events taking place around them. The common feeling of “European decline”
reinforces the idea that after the golden age of the 19th century, our old
continent is no longer able to propose any relevant vision of the future to others.
There is then a palpable temptation to ignore what is happening outside and to
close our minds to the world beyond. This is indeed what was done at the
beginning of ESPON programme when the cartographic template of an area of
interest limited to 29 countries was elaborated completely ignoring the fact that

32
contemporary spatial dynamics cannot be correctly analysed in such a limited
territorial framework (map 7).

The preliminary study of Europe in the World launched in the framework of the
cross-thematic project ESPON 3.1 played a crucial role in the evolution of minds,
when it proposed a new cartographic template at world scale which intentionally
avoided placing Europe at the centre (map 8). As stated by C. Grasland and C.
Grataloup:

“The right planisphere does not exist. The transformation from sphere to plane implies necessarily
a deformation of areas and/or angles and/or global shapes. Furthermore, a map of the World can
get no satisfaction because the global world is economically organised as a ring around the earth
when a map is a plane representation with edges defining a single centre. The more traditional
projections (e.g. Hammer Aïtoff, or Mercator), directed toward the north and centred on Europe,
express rather well the world‘s organisation of the XIXth century when the Old Continent ruled the
other regions of the Earth. But today we live in a polycentric world. And pictures which try to
provide evidences of multiple centralities and competitive influence areas should not induce biases
related to false polarisation introduced by the choice of map projections. This is the reason why we
proposed to ESPON to choose a polar projection, setting the Northern Hemisphere at the centre,
simply because it is the place where 90% of the human beings live. Such a map can easily be
revolved in order to emphasize the various centralities. Finally, it appears useful to keep the
continuity of the earth surface, avoiding aphylactic maps where continents are floating in an
unspecified mixture of ocean and “nothing”. In the ESPON context, it is important to bring to the
fore a map projection which gives the opportunity of a polycentric, but also universal,
representation. Of course, the Southern Hemisphere is badly treated (the disappearance of
Antarctica), which proves that any planisphere introduces an implicit subjectivity. But, when
looking at the maps in the second part of this report, we can verify that not only rich people but
also the majority of the world’s poor are fairly represented with this map projection. Finally, none
of the world economic centres are advantaged, as the user of such a map can rotate it in any
direction. This implicit message is essential for the analysis of a polycentric Europe in a polycentric
world.”
ESPON 3.1, July 2003, Third Interim Report, Annex B: “Europe in the World”, p. 7

This preliminary study was an important milestone on the way to producing a

new vision of ‘ESPON in the world’ though it alone was not sufficient to change
traditionally ingrained ways of thinking. Until the decision was made by the
ESPON Monitoring Committee to launch project 3.4.1 “Europe in the World” in
2005, the cartographic production of ESPON remained clearly limited to the
traditional template of ESPON 29. What was missing was not only technical tools
(such as a database elaborated at world scale) but also clear understanding, on
behalf of both researchers and policymakers, of the need for ESPON to produce a
collective vision of the situation of ‘Europe in the World’ in addition to the
continuing lack of an intermediary level between ESPON and the rest of the
World, which was suggested but not achieved in the preliminary study realised
by ESPON Project 3.1.

33
Map 7 : cartographic templates for ESPON

Map 8 : cartographic template for the World

34
2.2 Which vision of Europe in the World?

How many times must a man look up

Before he can see the sky?
Yes, 'n' how many ears must one man have
Before he can hear people cry?
Yes, 'n' how many deaths will it take till he knows
That too many people have died?
The answer, my friend, is blowin' in the wind,
The answer is blowin' in the wind.
Bob Dylan, Songs.

The collective mental representation of societies does not follow the same rules
as that of scientific knowledge. Scientific knowledge is a social product
constructed in a precise spatial and historical environment. Scientific activity
always maintains a critical view avoiding facile conclusions. Collective
representations, on the other hand, appear as natural facts with clear limits and
eternal validity. A factor of identity as powerful as “Europe” is therefore
necessary related to strong mental representations which cannot be easily
modified. The boundaries of the so-called “continent” of Europe determined
therefore the other divisions of the World. They are considered as secondary
when compared to the main opposition between Europe and the rest of the
World. As with the prisoners of the Cave in Plato’s allegory, we are unable to
produce any relevant visions of the situation of Europe in the World as long as
we remain unable to walk out of its limits. Moreover, the situation is further
complicated by the fact that we ignore the interminable question of the
delimitation of the borders of Europe.

It is not a paradox to suggest that, among the different institutions in charge of

policymaking at the European and national levels, DG Regio and the ministers of
spatial planning should be seen as those most likely to support a renewal of the
vision of Europe in the World. This is so precisely because they are not in charge
of external relations (as in DG Trade, DG Relex and the related national foreign
and external trade offices). Working mostly at the local and regional level, spatial
planners are particularly interested in the question of territorial division while not
ignoring the fact that many solutions can be provided in relation to the
establishment of various regional typologies based on flows, similarities,
accessibility, and networks etc. They are also acutely aware of the effect of
globalisation at the local scale. “Thinking globally and acting locally” is second
nature to spatial planners, something that is not necessarily the case for other
researchers and policymakers who are often rather oriented to sectional
approaches and thus do not share this particular sense of space and scales.

It is therefore not by chance that a project called “Europe in the World” was
launched precisely in the framework of an ESPON programme supported by DG
Regio and the ministers in charge of spatial planning. The beginning of the 21st

35
century is an historical moment where all of our traditionally accepted
representations of the World appear to be in crisis. To support this point, let us
briefly recall the various dominant models of representation of the World that are
actually currently available, each of which provides only partial evidence of the
reality of the contemporary World 4.

2.2.1 Centre/Periphery: the Triad and its region

The development of a World trade space does not mean a dilution of economic
hubs indeed, quite the opposite. While manufacturing activities are affected by
relocation this is not generally the case for the core business activities (the stock
exchange, management of large firms, high level research etc) all of which
remain concentrated in few central places. These core activities are embedded in
three major urban areas, three megalopolises. The most important, and the one
for which the word itself was coined 5, is still the North-Eastern United States. The
European axis, from Milan to London is the older, while the urban area of
southern Japan has, for the last thirty years or so, been the third centre. This
‘triple core’ is often called the “Triad”, and it is continuously recomposing itself,
both concerning the internal structure of each of its parts (with for example the
development of Shanghai in East Asia) and in relation to the continuing
competition between them. However, at a global scale, the stability of the
“World-cities” is striking as compared to the flexibility of the shapes and
localisations of common production activities. The stability of the World economic
core can be explained by means of the rarity of the activities and tasks
undertaken here but also by the systemic cohesion of the whole that allows for a
certain level of continuity. In essence, the triad operates around three eight-hour
shifts, while on the global stock exchange the sun never sets; when a stock
market closes in Europe another opens in the far east. As a testimony to this
interdependence the major global economic flows take place between those three
centres.

Peripheries are organised around those major centres. Other big cities and/or
high level industrial centres, with areas of intensive agricultural production are
often located in close proximity. A high density of tourist spaces has developed
to the South of each centre (Caribbean, Mediterranean Sea, and South China
Sea). These centres influence the structure of the margins (Central America, the
Maghreb, and South East Asia), which are subject to migratory flows while also
becoming spaces for the relocation of production and service activities. This first
attempt to interpret the nature of the emerging global space associates a ring of
three centres, each one organizing a southern space, a zone innervated by major

4
The following sections are the English translation of a work from C. Grataloup to be published in 2006 in a
“Dictionary of Globalisation”.
5
Gottman, J., 1961, Megalopolis - MIT Press -

36
migratory flows. This image is not however, of itself, sufficient to provide a
complete view of reality.

2.2.2 The north-south opposition: still not obsolete?

We can of course begin from the opposite viewpoint from that which has been
sketched out above. All of the dominated peripheries, where the development
indicator per capita is usually weak, are spaces located to the south of rich
regions. The use of the expression North/South is however an unsuitable
language habit, because the more southern spaces are not always the poorest.
The expression “Little triad” is sometime used to refer to the spaces
counterbalancing the northern centres: Australia and New Zealand, South Africa,
Latin America (Grasland C., Madelin M., 2001). As economic expressions such as‘
underdeveloped countries’ or political ones like, ‘Third-World’ are generally seen
to belong to a bygone era, the use of cardinal points seems instead to be more
apposite. This approach also has the added advantage of avoiding deterministic
expressions, or opposing temperate and tropical regions in an unhelpful manner.

It is difficult, today, to consider the developing countries as a homogeneous

whole, as perhaps was the case in the 1960’s and 1970’s. It remains impossible
however to ignore the importance of the living standards gap between countries.
Indeed, the clear lines that were formerly drawn on the maps, following the
shape of the Rio Grande, the Mediterranean Sea and the Amur River are now
replaced by non continuous gradients from post-industrial countries to less
advanced countries. Indeed, the social gap within each country can now often be
more important than that between national averages. This is not to say however
that social differences between societies have disappeared. The North-South
vision of the World, even if changed in gradients, is thus still meaningful.

The politically organised and motivated ‘Third-World block’ at its height in the
1950’s and 1960’s subsequently disintegrated, shedding members from both its
richest and poorest groups. On one hand, countries considered underdeveloped
fifty years ago, such as South Korea, eventually joined the OEDC (1996), with
other so-called ‘emerging’ countries likely to follow the same path. On the other
hand, less advanced countries, mostly from sub-Saharan Africa are increasingly
mired in civil conflict or facing unmanageable social health care problems and as
a result are slowly sinking into disorganisation. In addition, former members of
the soviet block are now scattered between the rich (Baltic countries),
intermediate (Russia), emerging (Vietnam), and poor (Cuba). If a binary view of
the World is only relevant for caricatures confronting two “hemispheres”, the gap

37
between a World composed of rich people and large (and densely populated)
territories of poverty is still a topical subject, and doubtless will be for some time
to come.

On the other hand, the political aspect of such classifications is becoming less
and less meaningful. During the Bandung Conference (1955), in the middle of
the decolonisation period, the link between underdevelopment and colonial
inheritance seemed obvious. When trying to set up the ‘third’ block of non-
aligned countries, distinct from the blocks of the cold war, Third World leaders
attempted to invert the ‘inheritance’ of imperialism on its head. At the beginning
of the 21st century however, these basic configurations have changed. That does
not mean however that a geopolitical interpretation is no longer accurate,
indeed, it may be more accurate than ever.

2.2.3 Permanent features and geopolitical changes

In line with this north-south polarisation, the east-west conflict highlighted the
major division of the World during the cold war. The Iron Curtain (or bamboo
one) reminded us of this major opposition between two competing projects or
worldviews socialism and capitalism. No school book could give a presentation of
Europe or of the World without a picture of the Berlin Wall. If, since 1991, there
remain a few countries, such as China and Vietnam, which still claim, discretely,
to be socialist, they now often add the epithet “market” to their self-descriptions,
while in North Korea the reference to communism is used only to underline the
regime’s opposition to the rest of the World. Concerning the continuing survival
of the Castroist regime in Cuba, its duration is now surely only due to the US
embargo.
The time of firm great alliances, sealed by fear, is over. NATO remains active
only at the price of becoming the World’s policeman, intermediary between the
unilateral force of the United States and blue helmets of the UN. Moreover, no
formerly privileged link is safe from a simple electoral shift. Even the ‘special
relationship’ between the United Kingdom and the United States is increasingly
being questioned, while Russia has difficulty in maintaining influence in its so-
called “near abroad”. And yet the nuclear arsenals are still there. Their
modernisation is even expected, with a growing number of states trying to join
the nuclear club. Indeed, the victors of the Cold War face increasing difficulty in
constraining a group of large and medium-sized powers whose geo-strategic
games organize the international scene according to “realpolitik” in which
ideology and rhetoric are increasingly inseparable, while the search for economic
advantage remains the name of the game. It is in this context also that a new
China is emerging to regain its world power role.

38
One could be tempted to see this geopolitical game through the prism of
‘clashing civilisations’ outlined by Huntington 6 a phenomenon which appeared to
be re-emerging again at the end of the twentieth century. This effort in
reductionism however conveniently forgot that global politics remains a matter of
States: the state division is still the only structure that clearly divides the World,
while the interrelations between states continue to embody the international
level, contributing to what is a contradictory process and at the same time
remaining an essential part of the global order. Because it is an association of
states, the UN embodied what, at the international level, slows down or speeds
up the reinforcement of World societal level. On one hand a decision can be
blocked if a majority of countries on the Security Council or, simply, one of the
Security Council’s five ‘permanent’ members votes it down. On the other hand,
most global questions are discussed, and even, sometimes resolved. Meanwhile,
many UN agencies or parallel organisations have attained a level of autonomy
that allows them to act as global actors.

2.2.4 The dialogue between civilisations

At the beginning of the 1990’s, missing the clear organising structure of cardinal
points, it became fashionable again to use the major divisional criteria provided
by the notion of competing civilisations initially formulated in the Eighteen
century. 7 This secular vision of the World is itself inherited from a classification of
people according to religion. So, the civilisational criterion is often used to turn
Islam into the adversary of western, capitalist globalisation. Even if this new
binary vision is too simple, (although it is not completely unfounded), the
geography of civilisation is very long-lasting. One cannot simply ignore it, as long
as there is no confusion between civilisation and religion. [Seems more polemical
than scientific….?]

The idea of “great” civilisations however echoes the simplistic ‘evolutionary

biological’ worldview of the nineteen century. But size is often not the
predominant factor. Indeed, there have been, and still are, societies composed of
a small number of people with very particular identity elements. One can even
observe that under globalisation, the state level can be challenged allowing
indigenous peoples to reconstruct their identities, with, perhaps, the Chiapas
Indians of Southern Mexico being a case in point here. [Claude, this whole
paragraph was rather difficult to ‘translate’, and at the end of it I’m still not sure
whether (a) I understood it correctly, or (b) even if I did, whether it actually
adds anything to the argument.]

6
See Samuel P Huntington, ‘The Clash of Civilisations’ Foreign Affairs Vol.72(3) 1993.
7
This debate does however have much older roots, going back to the beginnings of geography with Herodotus
and Pliny, from the rather open ethnography of the former to the ‘us-them’ dichotomies of the latter. In a modern
context Edward Said’s discussion of ‘Orientalism’ is quite apposite here. See, Orientalism Vintage, New York
(1979).

39
There is another trap that must be avoided, namely considering the map to be
fixed. Civilisations exist only through the men and women that live in them,
transform them and transmit them. The present wave of globalisation did not
invent inter-breeding, though it does increase it. For three centuries western
thought has sought to engender an opposition between civilisations in the plural,
by means of the tool of the hierarchical classification of humankind. While the
notion of ‘civilised’, in the singular, or the most advanced way of life (that
obviously they applied to themselves). Today however a global multi-scalar
civilisation can be sketched. Without this, the confrontation between civilisations
becomes only a mask for the game of geopolitics.

2.2.5 And still for lack of anything better, the continents

Sometimes, it is difficult today not to reminisce about the Cold War era when the
potential for War and the political emergence of the ‘Third World’ allowed us to
divide the World in a pedagogical way. This simplicity was however always a
delusion, an obstacle to perceiving the dynamics that were producing our current
World (end of the soviet model, emergence of new industrialised countries,
fundamentalist reactions...). Perhaps the fact that western and eastern points of
view shared a common ‘evolutionist’ origin, both thinking themselves to be the
source of progress, produced a classification that was more temporal than spatial
where the World was divided between backward looking (pro-slavery, feudal and
underdeveloped states), intermediate (developing, capitalist) advanced
(developed countries, liberal or socialist governments). It was however the
“development school” that formalised the couplet “centre-periphery” as a view of
the World, and first proposed a synchronic vision of classifications (development,
underdevelopment). Today the thoughts on the World follow a different stream of
historicity for which great historical visions are however suspicious. Focusing on
the present, they advantage synchronic divisions that are basically spatial. If
however one decides to reject the civilisation view of the World too, the only
remaining approach is to classify according to natural, or supposedly “natural”,
divisions.

A relevant anecdote here is the new museum in Paris which will replace the
“Musée de l’Homme”. The latter opened in 1937 and was totally organised
around the evolutionist point of view, from prehistoric times to the native
peoples of the ethnographer classified as hunter-gatherers, farmers, or pastoral.
Today this point of view is both politically unfashionable and scientifically
unsustainable. No agreement could however be reached on how to classify the
new collection, which will therefore be arranged in four sections: Africa, America,
Asia and Oceania. Moreover, no agreement could even be reached on the name
of the new institution, simply now named the “Musée du Quai Branly”. This

40
illustrates that there is now a basic mistrust of once respected hierarchies
between peoples thus explaining the desire for neutral categories. Of course the
absence of ‘Europe’ here is not accidental!!

Are the continents then really such a neutral way of dividing the World? The
most basic definition of a continent is “large area of emerged land” as opposed to
islands and archipelagos that are separated by sea and oceans. In some cases
the notion of contiguity is added to define a continent. Five continents are usually
distinguished (Europe, Asia, Africa, America, and Oceania) though on occasion
seven continents are cited with the Americas divided into two and Antarctic
added. Let us then have a look at a so-called objective document: the map of the
tectonic plates (figure 4).

Figure 4 : Tectonic plates

Source: http://pubs.usgs.gov/publications/text/slabs.html (U.S. Geological Survey

website)

As the above map illustrates, Europe cannot really be considered, from a

geological point of view at least, to be a continent but should instead be viewed
as the western extremity of the Eurasian Plate. The continent of Asia, as it is
generally understood, is divided between an Arabian Plate, an Indian Plate, a
Eurasian Plate and even a North American Plate. America is not a continent
either in this sense, being instead divided between a North American Plate, a
South American Plate, and a small quasi-oceanic Caribbean Plate. Last but not

41
least, both the usual definition of a continent and the tectonic plate map allow us
to observe that the Antarctic is a continent, though it is usually forgotten,
perhaps because we consider only populated areas as continents, suggesting that
the notion of ‘continent’ is actually rather more a ‘social’ than a simple ‘physical’
construct. The concept of continent seems then to be rather weak particularly in
relation to the realities of physical geography. It is thus simply illusory to pretend
that the continents as we know them are natural facts, and not simply
projections on the World map of the European vision of the world inherited from
the medieval era (Orbis Terrarum Maps). This division of the World was
constructed in the main from a Christian point of view, where the World is
unified, surrounded by an ocean and divided in three parts, Europe, Asia and
Africa, a view itself inherited from the Myth of the son of Noah. Objectively, only
the Americas are an autonomous whole as proximity had effects. Nevertheless, it
is clear that the delimitations between Asia, Europe and Africa are a by-product
of an arbitrary decision within one particular civilisation. In respect of Oceania,
its name alone seems to undercut its continental status.

Figure 5 : Olympic rings

The Olympic Rings logo (figure 5) provides yet another example of the cultural
and civilisation perception of the continents. The Olympic rings are the symbol
used on the legal flag of the Olympic Games, proposed by Pierre de Coubertin, in
1914. They are known all over the World and they are a symbol of the
universality of the Games. The flag itself is made up of five rings each
representing one of the “five parts of the World” as M. de Coubertin said or the
“five continents” as almost everybody says 8, namely, Africa, America, Asia,
Europe and Oceania.
It is often said that the Blue colour is for Europe, the Yellow for Asia, Black for
Africa, Green for Oceania and Red for America. The White colour of the
background then represents the notion of “Peace”. In fact, in the conception of

8
Including the International Olympic Committee (http://www.olympic.org/)

42
M. de Coubertin, the colours do not symbolised the continents at all. The six
colours are those usually used in the national flags of the countries of the World.
Moreover, we could also observe that, in respect of this erroneous interpretation,
three of the rings are assigned to continents according to the usual denomination
of skin colour. The yellow colour is also the one of the Chinese Emperor. Blue
should be logically used for Oceania, but is used for Europe perhaps because the
colour blue is the one that a majority of European people prefer, or because
more recently the predominant colour of the European flag has become blue
(from a European religious point of view blue is also the colour signifying the
Virgin Mary). As such then green is used for Oceania because is it the only colour
remaining.

As such then, the Olympic rings propose a division of the World into five parts,
five continents that could perhaps be seem as objective. The commonly
perceived symbol of the rings’ colour is however, on closer inspection, a kind of
cultural projection of the division based on a perceived division of humankind
according to skin colour.

2.2.6 Conclusion

Globalisation accelerated rapidly when the barriers and frontiers that divided the
World between 1914 and 1989 came tumbling down. This reassertion of the
‘global’ moreover, made it difficult to continue to perceive the division of the
World into subsets, while the simple self/other dichotomies of the Cold War era
were increasingly at odds with a need to reconsider the issue of regional
diversity. After the collapse of the East/West and South/North organisational
couplet however, we now have a single vision of the World, though this currently
remains wedded to the notions of either civilisations or nature.

To take into account all of these individual dimensions thus became increasingly
difficult: the pattern of economic regionalisation does not readily equate to the
historical civilisation areas, or to the usual continental conventions. The
vocabulary is becoming more and more dubious; what then does the term “Asia”
now mean? Increasingly, in both statistical tables or in the newspapers, the
“Middle East” (from a European point of view) is not in Asia, though, on occasion,
Australia is (not absurd when considering economic regionalisation and Triad
zones). But what is not surprising from an economic point of view would become
shocking in a cultural context (if, for example one was, for example, to view
Australia as being Eastern).

What is at stake here then is the need to ‘think of’ or to ‘classify’ the World and
its regions in a more complex way, at least taking into account a multitude of
criteria at the same time. If the global level is to have some meaning, then it

43
must be seen to logically produce a differentiated space. It is inherited from
multiple diversities, it smoothes them or uses them, but it also produces
differentiations in an economic, cultural and political sense. Thinking about parts
of the World cannot then be done without thinking about the world as a whole,
that is to say, all of its social aspects and all of its places simultaneously. What a
great work that would be! Fortunately for us the World is not so simple.

44
2.3. Ambitions and limits of the project ESPON 341

O wonder !
How many goodly creatures are there here !
How beauteous mankind is ! O brave new World
That has such people in ’t !
W. Shakespeare (1612), The Tempest, V.1

With limited resources which were, for example, half of that allocated at the
same time to other new ESPON project launched in 2005, we were immediately
aware that we would be unable to cover everything. We therefore decided to
focus firstly on the elaboration of long -term integrated analysis tools which
could provide a solid basis for those who will follow us in researching this field. In
this spirit, we elaborated new map templates, new databases, new hierarchical
divisions of the World, and a new dictionary of concepts. We consider these
“technical results” to be a major achievement because they are not in fact based
solely on technical considerations alone but actually benefit from all of the
research conducted by the TPG as a whole. Moreover, they are specifically
oriented toward the needs of European policymakers while providing the source
for what we hope, will be a deep renewal of the European vision of the World.
The elaboration of the set of integrated tools presented in volume II of this final
report would not have however been possible without an in-depth analysis of the
more theoretical questions that we decided to organise around four key
questions presented here in volume I. Our approach in this volume was, where
possible, to combine global statistical analysis based on exhaustive databases
available at World scale (the detailed results of which are presented in volume
II) with selected case studies designed to ensure an in-depth analysis of specific
fields (volume III).

Our choice for this volume I was to produce a relatively short synthesis, easy to
read and illustrated by many original maps, tables and figures which are, on
occasion, not comprehensively explained in full methodological or epistemological
detail here, thus keeping the text for volume I at a manageable length. As such
then, the reader is free to continue their analysis and, ultimately, to draw their
own conclusions by referring to the subsequent volumes of the report. Clearly,
the field of investigation was very wide, as such, it was necessary to have clear
targets strongly related to the expectations of the ESPON Programme.

Our analysis of the terms of reference and our knowledge of the existing results
of the ESPON programme led us to the conclusion that the most important
challenge for the TPG of project 3.4.1 was the introduction of the 4th dimension
(the World) into the actual framework of the 3-level approach which has been

45
the main output of previous ESPON research. More precisely, the introduction of
this 4th dimension meant that we had to propose a joint analysis of the influence
of Europe on the rest of the World (“Europe in the World”) and of the reciprocal
influence of the World on the internal differentiation of European territory (“The
World in Europe”). At the same time however we did ignore the issue of what
“Europe” was. As such, we felt that it was logical to use ESPON 29 as a
definitional starting point for a territorial delimitation of the area of interest. In a
sense, the correct title of the project should be “ESPON in the World, the
World in ESPON”. Following on from these central objectives, we have
identified four key-questions which attempt to examine this interaction between
ESPON and the World at different geographical scales.

♦ The division of the World into regions (Part A) tries firstly to

propose divisions of the World according to four groups of criteria
which are mental representation (how firms, associations,
governments etc usually divide the world), accessibility (morphologic
distribution of land, population and wealth), homogeneity (structural
division of the World according to levels of economic and social
development) and interactions (functional organisation of flows in the
World). We derive from this analysis a synthetic tool, the WUTS
system, which proposes a hierarchy of division of the World into
regions of different size. The application of this WUTS system is
demonstrated through a short benchmarking exercise between
ESPON 29 and the other global integration zones.

♦ The delimitation of the ESPON influence area in terms of its

functional neighbourhood and networks (part B) suggests a
global-medium scale approach which attempts to answer the question
of the delineation of a functional area of countries more related to
ESPON than to other parts of the World. Three types of flows are
examined (trade, air, migration) in order to fulfil this objective.
Questions are also asked concerning the morphology of this influence
area. In the case of air flows, the idea of “area” appears to be not
that relevant and thus instead we propose to speak of a “network of
relation” which does not fulfil the condition of territorial continuity. In
the final synthesis, we keep this duality of approach and propose (1)
a view of European influence based on a synthetic quantitative
criterion and (2) a typology of relational networks of Europe in the
World. This typology define four strategic types: integration,
responsibility, opportunity and challenge. The conclusion focuses on
the possible contributions of ESPON 29 to the Millennium Objectives
in relation to their application at world scale.

46
 ♦ The analysis of ESPON’s functional neighbourhood (part C) is a
medium-local scale approach which focuses on the analysis on the
area which has been recognised, in part B above, as that which is, or
can be, most integrated with, or into, ESPON territory. Special focus
is placed here on border regions which are analysed in detailed by
means of a number of case studies. We do not however limit the
analysis to the land borders of the eastern side of ESPON, we also
examine, in detail, the dynamics of those states located on the
southern shore of Mediterranean Sea. The issue at stake here is the
problem of the elaboration of a global Euro-African region linking the
economic core of Western Europe with its eastern and southern
peripheries. The states of the ESPON territory has a crucial choice to
make then between remaining an integrated area based on
homogeneity (“convergence regionalism”) and building a more
ambitious entity with the southern and eastern Mediterranean
countries (“North-South regionalism”). Our analysis supports the idea
that the second option is probably more interesting for the ESPON
territory from a strategic perspective and could be a major factor in
the success of the Lisbon Strategy as it is currently conceived.

♦ The analysis of the internal differentiation of the ESPON

territory according to globalisation (Part D) is a local scale
approach when we take the World as our reference point. We try here
to measure the strengths and weaknesses of European regions and
cities in respect of the threats and opportunities afforded by
globalisation. We focus in the main on the effect of regional economic
structures which fundamentally determine the degree of opportunity
or threat that is induced by globalisation. We also attempt to clarify
the definition of the potential gateway cities able to connect to ESPON
territory at different scales (World, ESPON-Neighbourhood, intra-
ESPON etc). Our conclusion’s focus on the importance of producing
new indexes introducing this ‘world dimension’ for the better
evaluation of ESDP objectives and the goal of territorial cohesion.

♦ The very difficult question of the boundaries of Europe which

was mentioned in the terms of reference is finessed throughout the
main body of the report and it is only in the Conclusion that some
insights are given on this complicated subject.

The scientific coordinators of this project 9 want finally to underline the pleasure
that they had during the preceding 18 months working with a “dream team” of
very motivated researchers. Indeed, this is something that has been absolutely

9
Claude Grasland (UMR Géographie-cités) and Clarisse Didelon (UMS RIATE).

47
invaluable to the success of this collective project. Thanks also go to the ESPON
Coordination Unit and in particular to P. Mehlbye, S. di Biaggio and S. Ferrara for
their constant encouragement and support in the realisation of this study. We
simply hope that the reader will display the same level of enthusiasm, displayed
by the team in the elaboration of this difficult piece of research, with the final
output.

48
3. PART A: DELIMITATION OF WORLD REGIONS

3.1. Introduction

3.1.1 Options for World Regionalisation

The division of the World into 150 to 200 states is a political reality which defines
a system of ‘international relations’ where each state, whatever its size,
theoretically displays full sovereignty, and is therefore considered to be equal in
terms of being the bearer of rights, to all others. This is obviously a fiction
because, in terms of World power, some states are clearly “more equal than the
others 10” and, as such, it does not really make sense to compare the population
of China and Luxembourg or the GDP of U.S.A. and Djibouti. It is also true that
many authors consider the framework of international relations (state-to-state)
to no longer be an accurate way of analysing the World and propose instead that
we focus on supranational relations (e.g. more or less integrated regional
organisation like EU – political and economical - or NAFTA – purely economical)
or transnational relations (e.g. network of international global cities).

But whatever the international economic and political reality of this so-called
“decline of the state”, it is important to underline the fact that the state level
actually remains an important factor in research on the divisions of the World
because the majority of the statistical information covering the World continues
to be produced at the state level. The “monopoly of the legitimate collection and
use of statistical information within a given territory” 11 remains a fundamental
attribute of state sovereignty in the 21th century and we are therefore generally
more or less obliged to use the puzzle of states as a building block in any
attempt to understand the division of the World based on economic or social
criteria.

The heterogeneity of the size of World states in terms of area, population or GDP
is a real problem for the realisation of a study on Europe in the World,
comparable to the problems encountered in other ESPON projects with, for
example, the use of NUTS2 and NUTS3 (ESPON 3.4.3 MAUP). We have thus tried
to limit this problem by selecting only 168 states and eliminating the micro-
states (ESPON 3.4.1 FIR). It nevertheless remained obvious that our capacity to
analyse the World’s dynamics continued to be dramatically hampered by this
basic heterogeneity in the nature of the national building blocks of the states
system.

10
G. Orwell, Animal Farm
11
This is by way of complement to M. Weber’s definition of the state as "a human
community that (successfully) claims the monopoly of the legitimate use of physical force
within a given territory."

49
This is the reason why we decided to establish a hierarchical system of divisions
of the World starting from the state level but attempting to propose different
levels of territorial aggregation which were thought to be more relevant. The
elaboration of this hierarchical system of aggregation of World units is based on
various criteria presented in the following sections.

3.1.2 Definition of regions

In geographical terms a “region” can be defined in a general sense as “first

significant level of spatial organisation under the global level of reference under
investigation”. This definition has the benefit of being easy to understand in the
case of national contexts where the word “region” is widely used for the
description of infra-national territorial divisions, which themselves can be based
on various criteria such as administrative and electoral (e.g. Länder in Germany),
homogeneity for selected criteria (e.g. agricultural or economic regions), the
organisation of flows (water basins, functional areas), etc. But these infra-
national divisions are generally organised in a hierarchical way with various
levels of territorial division and, as such, it is important to bear in mind that, in
the narrow sense that will be used here, the word “regions” should be limited
only to the first significant level of territorial division or spatial organisation under
the reference territory. Smaller divisions will be considered as sub-regions or
regions of a different level defined in a recursive manner.

According to the previous definition, the transposition of the concept of region at

the World level means that the delineation of a World region is an attempt to
define the first significant level of division of the World under the global level of
mankind living on the surface of our planet. Dividing the World as such then is
not the same as dividing the Earth.

· The Earth is a physical and biological system which can be described and
divided in many ways according to various criteria (climate, land use, vegetation
etc) where the influence of human activity is only one parameter among others.
The definition of Earth regions would thus lead to an interesting but complicated
and rather technical debate on the so-called “natural” divisions of the planet.
· The World, on the other hand, is a social system defined by the extension
of mankind i.e. by the location of 6.5 billion human beings. Of course, people do
not live in space and are, as such, localised to the surface of the earth where
they work, love, create etc. This notion of location is not however the full
determinant of human activity as people migrate, exchange goods and ideas,
fight, and develop material and spiritual links. Dividing the World is thus a rather
different task than that of dividing the Earth and can certainly not be based on
“natural” criteria but only on social facts.

50
This distinction between Earth and World does not mean that factors like the
distribution of climate or the repartition of lands and oceans has not to be taken
into account in the proposals of World division. Rather, it is that these factors will
always be considered in their relation to human life and human activity and not
as external independent factors. Moreover, all of the “social” or “natural” criteria
that could be used in the attempt to divide up the World should likewise also be
interpreted in their material, functional and spiritual dimensions.

World divisions are not revealed but are instead produced. They are social forms,
in Simmel’s (1908) sense, which means that they should be considered as
societal tools built in a given societal context in order to fulfil societal objectives.

3.1.3 Which method of regionalisation?

Theoretically speaking, there are two broad approaches to the elaboration of the
synthetic division of the World into regions:

· The thematic approach begins from an examination of criteria according

to the usual scientific delimitations (social, economic, demographic,
environmental, historical etc) examining inside each field of knowledge the
spatial organisation of the World in order to propose synthetic maps in each field.
Doing this, we would propose successive synthetic maps presenting the World’s
economic regions, World historical regions, and the World’s environmental
regions, etc.
· The conceptual approach on the other hand begins from the study of
abstract criteria which can be used in the elaboration of regions (similarity,
network, belonging, contiguity, flows etc) without addressing a priori a particular
content. The same thematic criteria, for example demography, can therefore be
used in different ways: age structure will be used for the elaboration of
homogeneous regions (criteria of similarity); international migration will be used
for the elaboration of functional regions (criteria of flows and networks); laws or
agreement restricting migration will be used for the elaboration of political
regions like the Schengen treaty area.

Both approaches inevitably have their advantages and disadvantages, though

they are in fact complementary. The thematic approach is generally the starting
point for any in-depth analysis of each the above ‘criteria’ by specialists in each
specific research field. Moreover, it is only when this thematic approach is
elaborated that the integrated cross-thematic analysis of the conceptual
approach can be realised. In our final report, we have decided to present the
thematic approach in volume II (where a deeper explanatory discussion is

51
presented) and to restrict the discussion in volume I to the synthetic cross-
thematic results, which favour the conceptual approach.

In the following sections, we propose to compare four different approaches to the

division of the World.

52
Box 1 : Options for World Regionalisation

MENTAL REGION: Defined by observers using subjective criteria based on individual or

collective representations. A typical example of mental regions is the division of the
World into «Continents» which do not fulfil any objective criteria but are nevertheless
very meaningful for our comprehension of the World. The fact that mental regions are
based on subjective criteria does not mean that it is impossible to produce objective
measures of these collective representations.

POLITICAL REGIONS: Defined on the basis of treaty or other juridical criteria limiting the
sovereignty of states participating in its construction, while agreeing to share certain
areas of political decision-making. Various types of political regions can be defined
according to the field of political action shared (economy, army, culture etc) and the
degree of the transfer of sovereignty to the regional level.

FUNCTIONAL REGIONS: Defined by an observer using one or more criteria relating to

effective or potential flows (accessibility) which can be of very different types (people,
money, information, goods, ) or measured in different ways. Functional regions are not
necessarily associated with precise limits and can be organised by gradients (influence
areas) or by specific networks.

HOMOGENEOUS REGIONS: Defined by an observer using one or several criteria of

similarity which can be of very different types but are generally related to structural
situation of the basic territorial units (culture, religion, language, demography, economy,
history, environment, ) and to their relative spatial proximity (e.g. constraint of
contiguity). Homogeneous regions are different from typologies which do not introduce
any constraint on spatial proximity or from continents which are purely based on spatial
proximity and not necessary on similarity.

53
3.2: In search of World Regions

3.2.1: A mental approach: the perception of World divisions

Many different visions of the World co-exist simultaneously. For each type of
observer, if not for each observer per se, each exists as a way of understanding
the World and of organising it according to subjective criteria (Box 1). As such,
the World does not have the same divisions or regions for each individual
observer. It is however possible to produce an objective analysis of these
collective representations and to propose a synthesis of mental regions in
accordance with different kinds of collective actors. This is what we propose to do
here.

International Organisations, Countries, Non Governmental Organisations and

global private firms are the main actors at the global level (EIW - SIR p89). They
divide the World in order to administrate it, to locate their activities and to
organize their relations with other countries / or groups of countries. None of
those global actors have a monopoly on prescribing an official division of the
World, not even the United Nations. Those actors often propose, on their
websites or reports, a map or a picture of the World divided into regions. Those
pictures are not necessarily their operational division of the World, but as they
are exposed to public opinion, it has been assumed that such maps necessarily
have some meaning for the actors involved, and as such at least function as
symbols of their power at the World scale. The compilation and statistical
analysis associated with (SIR, vol. 1, Key question 1), these maps allowed us to
build synthetic representations of World regionalisation according to each type of
actor studied, and to observe whether common representations exist.

Two types of cartographic document are presented here. One focuses on the
limits between world regions proposed by the actors and presents the stronger
mental borders. The second type focuses on linkages and derives from the
frequency of common belonging. It is a hierarchy of clusters which summarise
the most frequent associations of states in wider World regions for each type of
actor.

Continents and geographical factors

The maps of limits proposed by each actor clearly highlight two interesting
phenomena. Firstly, none of the actors studied dared to divide a country into two
in order to put them into different regions. This was not however the case with
European researchers involved in the ESPON programme surveyed on their
representations of the World. As such, this perhaps indicates that a very
diplomatic – or pragmatic residual level of respect exists among global firms for

54
‘national entities’. The second phenomenon, and the most important one for our
analysis, is that, in most cases the limits subconsciously drawn when grouping
countries follow those relating to the traditional political outlines of the
continents.

Stronger limits (maps 9 & 10) are located between two continents in the sea or
ocean (limits crossing the Atlantic, Indian and Pacific oceans and even Red Sea
between Africa and the Arabian Peninsula). Terrestrial limits are always thinner
than maritime ones, except in the case where they are used to distinguish
between two very different spaces from a cultural and development point of
view.

This trend using the traditional figure of the continents can also be seen in the
average number of regions usually drawn by such actors, namely between 5 and
7, which clearly aligns with the usual number of continents in common opinion.
The use of continents to draw World regions makes the divisions more
consensual and more legitimate in respect of public opinion as such a division is
not based on contestable criteria but on the so-called objective “facts" taught by
geography.

If however one cautiously observes the synthetic regions formed by the most
frequent partitions (maps 11 to 15) one immediately notices that their size and
composition are quite different for each kind of actor. For example, Europe, for
German firms, stops at the Russian border. For International Organisations it
goes to Vladivostok but, in some cases, excludes Turkey. 12 This shows that the
concept of continents is a dynamic one and that other criteria are used to
produce World regions. Geographical discourse is not therefore a "hard fact" in
this context. The so-called ‘neutral’ continental division of the World is in fact a
socio-political construct representing and interpreting an aggregation of other
criteria.

Those other criteria used in the drawing up of World regions can be identified
when observing the stronger terrestrial limits (maps 9 & 10) and the regions of
medium and small size located between two large "continental" bodies. The
stronger terrestrial limits are those for example between the Russian Federation
and China, and North America and Mexico. A thinner limit can also be observed

12
The UN in particular is rather troublesome in this respect, as while many of its agencies place Turkey outside
Europe, Turkish representation at the UN General Assembly, and on the Security Council relates to their
membership of the WEOG, the West European grouping of states at the UN. Similar functional differentiation
occurs in respect of other organisations, with Turkey being ‘in’ Europe as far as the International
Telecommunications Union is concerned, but ‘outside’ for the International Postal Union! Generally, we can
however say that, while a simple majority of the organisations surveyed place Turkey ‘outside’ the key
organisations place Turkey firmly within Europe.

55
between North African countries and Sub-Saharan ones. For each of these three
limits a combination of cultural and economic factors (i.e. level of development)
is clearly used.

56
Map 9 : International organisations limits

Map 10 : Countries limits

57
Cultural factors

The cultural factor is particularly striking in the identification of a North African

region. In most synthetic maps, Africa appears as a continent, without any
further sub-division, even when the rest of the World is divided into smaller
pieces. But for some of actors, some countries (France, the USA, China, Canada
and the UK) as well as for many NGOs, a North African region clearly does exist,
clearly following the spread of Islam as for all of them this North African region is
conjoined with the Arabian Peninsula. Neither firms nor international
organisations however dare to postulate the existence of such a region.

The use of the cultural factor can be also be perceived in the appearance of small
sub-regions, such as Southern India on USA’s map of the World, Central Asia in
many International Organisations’ synthetic maps, but also in the fact that China
considers Australia and North America as belonging to the same World region,
whereas Australia is more often located as an Asian sub-region by all other
actors.

The question of cultural regions comes to the fore however when observing the
maps dealing with limits. Some territories (Turkey, Sudan, Greenland) or groups
of countries (Eastern Europe, the Caucasian states, Central Asia etc) are totally
encircled by limits, indicating the existence of a certain level of uncertainty in
respect of their possible allocations. Those areas of uncertainty are very often
located between two (or more) cultural areas. The Central Asian countries are
linked by recent history to the Russia Federation, though they are now also
influenced, from a cultural point of view, to a greater or lesser extent by Iran and
Turkey on the one hand, China (West) and Mongolia on the other. The possible
examples here are numerous while they also underline a kind of ‘struggle of
influence’ (Greenland between its administrative belonging to Denmark and its
cultural and geographical proximity to Northern Canada) or an identity crisis
(Turkey between its cultural link with Central Asia and its desire to belong to the
European Union).

Development level factor

Other divisions of the World also exist, namely, those based on the perception of
development levels. Such approaches are more often than not used in the
context of sub-regions proposed by International organisations, which often mix
geographical and developmental criteria to draw World regions. On one hand,
they place the "industrialised developed countries" in the same group without
considering distance and contiguity: North Africa, Japan, Western Europe,
Australia and sometimes also other parts of World such as South Africa. While
the rest of the World is not similarly divided according to development level,

58
even if it is far from being uniform, and mainly according to the geographical
criteria of proximity (South America, South Asia etc). Those representations of
the World are not very visible on the maps proposed here as they are more often
sub-levels of regionalisation.

59
Map 11 German firms dividing the World

Map 12 : British firms dividing the World

Map 13 : French firms dividing the World

60
Map 14 : Non Governmental Organisations dividing the World

Map 15 : International Organisations dividing the World

61
Conclusion: A Eurocentric view of the World.

The dominant criteria used, by the global actors studied here, to divide the World
into regions is clearly the "continental" one. One should not however forget that
this division was inherited from the European medieval vision (Orbis Terrarum
Maps) (Cf. Introduction), where the World is unified and surrounded by ocean,
and divided into three parts, namely, Europe, Asia and Africa.

In our study this Eurocentric perception of the World is well illustrated by the
significant difference in the regions’ sizes. The European region generally
encompasses only a few countries gathering together only a small share of the
World’s surface and population, but it is well identified. Asia, is more variable in
size and of numbering more than twenties countries and including China and
India, each with 1/6th or more of the World’s population. The following chapters
of this volume aim to construct World regions using criteria other than the type
of representation alluded to above to effectively supersede this traditional
Eurocentric approach.

62
Box 2 : The ESPON community’s vision of the World (Cf. FR – Vol. 3)
The survey of the ESPON community took place in May 2005 during the ESPON seminar
in Luxembourg. We asked more than 100 participants to divide the World into between 2
to 15 regions on a map. The main hypotheses was that the resulting maps should reveal
things that people were not generally aware of and could reveal some relations between
the individual attributes (nationality, age etc), the criteria used and the chosen limits and
regions. The methodology used to analyse the results of the survey is detailed in volume
III of this report.

The most common division of the World shared by the participants of the survey was a
division into 4 regions, where the first area to be clearly identified on the World map by
the ESPON community is a large region formed by a large Europe plus the English (and
French) speaking (but not Spanish speaking) parts of North America (blue & gray
colours) showing a kind of cultural cluster. The fact that this space was identified first,
confirms our perception that the World is indeed organised from our Eurocentric point of
view. Southern America (brown), Africa (purple) and Asia (red to yellow), were
subsequently identified though they were more often than not perceived as continents.
The World in 15 regions shows large spaces such as Africa and Southern America, which
are probably perceived as continental objects; while the lack of general knowledge about
the internal differentiations of those spaces in Europe could explain this perception. Then
we can observe medium spaces that have a strong cultural identity or at least that are
perceived as such by the ESPON community: Europe, the China-Japan region, Central
America and Middle East. Finally, one can observe smaller regions formed by one or two
territories (Greenland, Turkey, the Caucasian states). Those small regions are mainly
located between Europe and other regions, illustrating on the one hand the hesitations
about their possible inclusion in Europe, and their role as transition areas between
Europe and the rest of the World on the other.
Map 16 : ESPON community dividing the World

63
3.2.2: The limits of the political division of the World

The division of the World into continents is not an objective scientific reality but a
social and historical production, a tool of power established by Europe and for
Europe during its period of World domination. This realisation thus leads to the
question: what would an objective definition of continents based on a scientific
criterion of refutability entail? 13

3.2.2.1. Potential of land area and “geographical continents”

The word “continent” came from Latin terra continens which means continuous
land and is usually defined as “any of the World’s main continuous expanses of
land (Europe, Asia, Africa, North and South America, Australia, Antarctica) 14”. In
scientific terms, such a definition is clearly not sufficiently precise and cannot
provide the basis for an objective delimitation of World regions based on the
repartition of Land and Sea. The list of continents proposed by dictionaries or
atlases cannot however be refuted by any experiment which means that we have
moved beyond the field of science. Let us now consider then an alternative
approach where what is measured is the potential of a land area located in a
given spatial neighbourhood around each point of the earth’s surface. We have of
course different solutions for choosing the neighbourhood’s function, once the
parameters of this function have been defined. We believe, moreover, that it is
possible to propose a mathematical objective measure of “continentality”
associated with a cartographic representation of the main concentrations of land
on the earth.

We have chosen a Gaussian neighbourhood span 1000 km (map 17) with which
we obtain a representation of the World in 5 to 6 concentrations of land more or
less according to the common list but with an important difference: it is
impossible to define any such area as Europe! According to the famous quotation
of P. Valery “What is Europe? It is a kind of cap of the Old Continent, a western
appendix of Asia” 15. We also notice here that the limit between the so-called
continents of Asia and Africa is not clear and that the Mediterranean Sea appears
to be a kind of “Gulf” between Asia and Africa. The idea that Europe is a kind of
‘lost continent’ located somewhere between Asia and Africa fits very well with the
Hellenistic Myth which localises the wedding of Jupiter and Europe to Crete:

13
For Popper, a theory is scientific only if it is refutable by a conceivable event. The existence of Europe as a
continent is typically a proposal which cannot be scientifically demonstrated though different scientific
experiments can be proposed in order to delineate objectively parts of the World. See K.R. Popper (1959). The
Logic of Scientific Discovery. London: Hutchinson.
14
Definition taken from the Compact Oxford English Dictionary (http://www.askoxford.com).
15
Valery P., 1919, « La crise de l’esprit », reprinted in Valery P (1978), Variété 1 et 2, Gallimard, Paris, pp. 13-
51.

64
“Europa was the beautiful daughter of the Phoenician king of Tyre, Agenor. Overwhelmed
by love for Europa, Zeus, the king of the gods, transformed himself into the form of a
magnificent white bull and appeared in the sea shore where Europa was just having fun.
The great bull walked gently over to where Europa stood and knelt at her feet. His
movements were so gentle that Europa spread flowers about his neck and dared to climb
upon his back overcoming her natural fear of the great animal. But suddenly, the bull
rushed over the sea abducting Europa. Only then the bull revealed its true identity and
took Europa to the Mediterranean island of Crete. There, Zeus cast off the shape of the
white bull, and back into his human form, made Europa his lover beneath a simple
cypress tree.” 16

As such then, while history seems unable to provide a definitive answer to the
eternal question of - “What is Europe?” - the answers provided by geography
may not be that palatable either.

Map 17 : Europe as “Lost Continent”

16
http://europaprojekt.ensign.de/

65
3.2.2.2. Potential of population and “demographic continents”

Having established that Europe certainly cannot be considered a “geographical

continent” at World scale, we now propose to repeat the same type of analysis
by considering the distribution of the World population in 1999.

The analysis of the political distribution of World population by states (Map 18)
indicates firstly the exceptional demographic size of China and India which
account respectively for 21% and 16% of the World population. These two
demographic giants are followed by a group of large states representing between
2 to 5% of World population: namely, the United States, Indonesia, Brazil,
Nigeria, Russia, Japan, Pakistan, and Bangladesh. None of the 29 ESPON states
belong to the top 10 of the most important states from a demographic point of
view, and the ESPON territory itself appears as a concentration of small and
medium-sized demographic units.

The situation appears completely different however if we analyse the spatial

distribution of World population in terms of borderless potential 17. Given the
present context of globalisation with the increasing mobility of people and
capital, we assume that it makes sense to examine the distribution of population
or wealth without referring to the political borders between states. As shown in
map 18, World population is most densely concentrated in the two main regions
of South Asia and South-Eastern Asia where the peaks of population potential in
1000 km reach 10 to 15% of World population. What is really new, as compared
to the state distribution, is the fact that the third peak of population
concentration in the World is clearly centred on the territory of the enlarged
European Union with a maximum of 6% of World population located in a
neighbourhood of 1000 km around Prague. The other peaks of population located
in America, Africa and Oceania are clearly less important than the European one.

Using the methods of mathematical morphology developed by Matheron &

Serra 18, it is possible to derive from the map of population potential a division of
the World into regions corresponding to the “water basin” of each peak of
population concentration. In the case of the peak of population located in Europe,
the limits of the region clearly involve northern Africa, the Middle-East and
Western Russia and define therefore a Euro-Mediterranean continent from a
demographic point of view. This is the first important proof that, from a
morphological point of view, the ESPON area is only the core of a wider World
region.

17
We use the Gaussian neighbourhood span of 1000 km applied to the borderless UNEP grid of population,
following the methodology explained in Grasland C., Madelin M., 2001, The unequal distribution of
population and wealth in the World, Population & Sociétés, Mai 2001, n° 368,
18
Serra J., 1988, Image Analysis and Mathematical Morphology, London, Academic Press.

66
Map 18 : Spatial and political distribution of World population in 1999

67
3.2.2.3. Potential of GDP (pps) and “economic continents”

Following the same methodology as that used in previous sections, we propose

now to examine the World distribution of economic resources from two points of
view, from a political point of view, particularly as it relates to states) and from a
borderless spatial point of view as it relates to potential. An important difference
with previous analyses of this type 19 is the choice to use GDP pps here instead of
GNP in $ and to use more recent statistics (1999 instead of 1990).

According to the political division of the World into states (map 19), the United
States of America concentrates, in 1999, the most important share of the World
economy according to the criteria of GDP pps (21.8%). They are followed by a
second group of big states including China (10.7%), Japan (7.4%) and India
(6.3%). But it is only in a third group of medium-sized states that Germany
(4.7%), Italy (3.2%), the U.K. (3.1%) and France (3.1%) appear, followed by
Brazil (2.8%) and Russia (2.2%). It is true that this classification of economic
power would have been different with economic size measured by GNP in $
instead of GDP pps. But in every case the ESPON territory would appear a very
fragmented area with national economies of smaller size than their chief
competitors in the World.

Interest in a borderless spatial vision of World economic poles is obvious in the

case of ESPON member states (map 19) which are located in the neighbourhood
of the greatest peak of economic concentration in the World. This map classically
reveals the existence of 3 major economic poles in northern hemisphere (The
“Great Triad”) and symmetrically three minor poles in southern hemisphere (the
“Little Triad”), but it also makes visible the existence of an emerging 7th pole
located in Southern Asia, in India. From an economic point of view, these 7
peaks of economic potential are associated with 7 economic regions polarised by
economic cores. In the case of the ESPON area, the economic core is clearly
located in the western part of the region (which was not the case in demographic
terms) while the peripheries are organised in concentric circles to the south and
east. Much of Africa (except those states located in the south), the majority of
the Middle East and more than half of Russia and the former soviet republics are
clearly involved in the potential economic influence area of what can be called
the economic continent of Euro-Africa.

We have however to carefully interpret these delimitations based on accessibility

and potential because they define only the existence of opportunities for social
and economic relations. We have now to verify whether these opportunities are
really exploited by flows whether the economic and demographic continents

19
Grasland C., Madelin M., 2000, op. cit.

68
revealed by this mathematical morphological approach are also functional
realities.

Map 19 : Spatial and political distribution of World GDP (pps) in 1999

69
3.2.3: Functional division of the World based on economic and
demographic flows

3.2.3.1. Bilateral trade flows 1996-2000: a triadic organisation?

The distribution of major international trade flows (bilateral) between the states
of the World during the period 1996-2000 (map 20) does not exactly provide the
expected picture of a “triangle” of major flows between each node of the Triad.
The major international trade flows are indeed influenced by the political division
of the World into states. Moreover the different parts of the “Triad” are not
equivalent in terms of political fragmentation: one dominant economy in
Northern America (USA), two dominant economies in Eastern Asia (Japan and
China), at less four dominant economies in Western Europe (Germany, the UK,
France, and Italy). As a consequence, this first map indicates the clear
domination of the USA which is embedded in 6 out of the 10 major bilateral
international trade flows and accounts for 16.0 % of World trade, followed by
Germany (8.6%), China (8.5%), Japan (7.2%), the UK (5.1%) and France
(5.0%). The important shares of World trade held by Western European states is
partly an illusion however reflecting as it does, in the majority of cases, internal
EU trade.

The aggregation of EU25 into a single territorial unit provides a much better view
of the organisation of trade flows at World scale (map 20). Despite the fact that
the internal trade flows within EU have been removed, the share of World trade
of the EU25 (17%) is now comparable to that of the USA (20%) which is
advantaged by the fact that its ‘internal’ trade in the context of NAFTA has not
been removed. The duality of Eastern Asia is now clearly visible and the
aggregation of China, Japan (and South Korea) into a single unit would produce a
perfect “triangle” linking together the three poles of the Triad. Each pole of the
Triad has a clear influence on its neighbouring states. In the case of the EU, all of
the southern Mediterranean countries are clearly embedded in the EU’s direct
periphery. Russia is also clearly linked, even if is still strongly embedded in the
former Soviet area.

70
In terms of regionalisation, the World
is clearly divided into three areas of
influence, each composed of a major
northern centre and a minor
southern centre. The internal political
structure of the major nodes is
however somewhat different:
showing a Monocentric structure in
the case of Northern America (USA),
a duo-centric one for Eastern Asia
(China and Japan), and a polycentric
one in the case of Euro-
Mediterranean (Germany, U.K., Italy,
France,).

71
Map 20: Major bilateral trade flows between states of the World (1996-
2000)

72
3.2.3.2 Barriers and regional preferences in trade 1996-2000

The economic division of the World into three major areas polarised by the centres
of the Triad is without doubt a major structure to be taken into account in our
proposal of a hierarchical division of the World, and will thus be used as the first
level (WUTS1). We can however ask whether, behind this major structure it is not
possible to discover regional organisations of a lower level, especially in the
peripheral and semi-peripheral areas, which are not well represented on previous
maps. We have therefore decided to apply an economic equilibrium model of
interaction, which controls the capacity of each state to import and export but does
not control geographical distance, in order to define the regional aggregate of states
that has more commercial relations than expected thus defining what economists
call “natural geographical regions” 20.

All things being equal in terms of economic size, some states develop clear regional
preferences which are revealed by the map of positive residuals (Map 21). Omitting
distance in this interaction model helps to reveal how the cost of transportation and
other types of historical and cultural proximities influence trade relations between
states. At less 12 integrated trade regions can be derived from this analysis, some
with clear limits (e.g. Southern Africa) but the majority with overlaps, as in the case
of the Euro-Mediterranean area, which in 1996-2000, clearly crossed the area of
preferential relations with Russia in Eastern Europe. From these regional
preferences, the map also reveals long distance preferential trade relations,
especially in the case of relations between the USA and Eastern Asia but also
between Eastern Asia and the Persian Gulf. Looking at the negative residuals, we
can symmetrically define barrier effects between regions which have a lower level of
trade relations than was expected, given their economic size (Map 21). This is
obviously the case when we consider trade relations between the European Union,
Northern America and Eastern Asia. The cost of transportation and the preferential
trade agreement between EU members and associated neighbours is clearly
revealed by this map which confirms that globalisation does not mean the “End of
Geography” (transport costs) and the end of international regulation (political
agreements). The negative residuals are less frequent between Northern America
and Eastern Asia. They concern mainly Canada and Mexico which are strongly
polarised by the USA and, accordingly, do not develop as important relations with
the rest of the World. The USA then clearly has a preferential orientation towards

20
Double constraint model on the form Fij = aiOibjDj with Fij = trade flows between state i and state j, Oi = sum of
export from state i, Dj= sum of import from state j , ai = constraint parameter for origins and bj constraint parameter
for destination.

73
Eastern Asia while barrier effects are clearly discernable in respect of the European
Union.

74
Map 21 : Regionalisation of the World based on trade flows 1996-2000

75
3.2.4: Homogeneous regions and territorial discontinuities: the spatial
dimension of the inequalities of development

We have established in previous sections that the World organisation is strongly

defined by the existence of the Great Northern Triad (Northern America, Western
Europe, and Eastern Asia) which defines a major system of three interlinked centres
surrounded by semi-peripheral and peripheral areas. We have also established the
existence of 8-10 minor centres which produce local regional integration at another
scale (Oceania, Southern Africa, Southern America, the Persian Gulf, the former
Soviet Union, Southern Asia, and South-Eastern Asia). This vision of the World was
based on a borderless approach which analysed the economic and demographic
flows in a global way, without considering the existence of national borders and
without analysing in detail the spatial pattern of transition between major centres of
the World and the peripheral or semi-peripheral areas located all around.

We will now focus on the practical consequence of this major centre-periphery

structure in terms of the inequalities of development. In particular, we will analyse
whether the spatial transition between more and less developed countries takes the
form of a regular gradient (which would imply the existence of continuous spatial
diffusion processes of development) or the form of an abrupt transition with spatial
discontinuities (which would imply the existence of more conflictual contacts
between homogeneous regions of different levels).

One crucial problem for this analysis of discontinuities was the choice of the borders
to be taken into account. Indeed, the definition of contiguous states is not really
simple (see. FIR and SIR) because some states are connected by a very small
border (e.g. Morocco and Spain by Ceuta and Melila, or the UK and Spain by
Gibraltar) while others are connected by areas which do not belong to the mainland
(e.g. France has a border with Brazil through French Guyana). Moreover, some
states exist in close proximity without actually having a common terrestrial border
(e.g. Italy and Albania) while other states share a common terrestrial border though
their economic and demographic centres are far and the border, which is located in
a very lowly populated area (e.g. Algeria and Niger).

We have therefore decided to propose an extended definition of political contiguity

through the construction of a buffer area of 450 km which allows us to define
contiguity between states separated by short maritime distances (Map 22). On the
other hand we have decided to ignore the contiguity between states that do not
share a border of minimum 10 km. This theoretical choice has consequences of
course for the elaboration of the maps and tables, particularly in respect of the

76
highest discontinuities of development between the states of the World presented in
next sections.

Map 22 : Terrestrial borders extended to short maritime distances

77
3.2.4.1. Inequalities and discontinuities of Human Development in 2002

Map 23 presents the distribution of the Human Development Index (HDI) in 2002
thus helping to define the relative part of reality and illusion for the so-called North-
South division of the World (see Introduction). It is first and foremost obvious that
the “north-south” epithet is a poor and indeed largely false geographical description
of the spatial pattern of inequalities of spatial development. The distribution is
better summarised by a geographical opposition between 3 regions which are more
or less distributed according to latitude: very highly developed countries in the
temperate zone of the northern hemisphere, less developed countries in the inter-
tropical area and relatively highly developed countries in the temperate zone of the
southern hemisphere. This division of the World into 3 regions however remains a
simplification of reality as there are many exceptions, and as transitions between
each zone can often be smooth but are also on occasion quite abrupt.

Table 1 : Major differences of Human development between neighbouring

states of the World in 2002
State HDI State HDI Difference Rank
Libya 0.79 Niger 0.29 0.50 1
Libya 0.79 Chad 0.38 0.42 2
Algeria 0.70 Niger 0.29 0.41 3
Australia 0.95 Papua New Guinea 0.54 0.40 4
Algeria 0.70 Mali 0.33 0.38 5
Cuba 0.81 Haiti 0.46 0.35 6
Colombia 0.77 Haiti 0.46 0.31 7
Spain 0.92 Morocco 0.62 0.30 8
Libya 0.79 Sudan 0.51 0.29 9
Oman 0.77 Yemen 0.48 0.29 10
Saudi Arabia 0.77 Yemen 0.48 0.29 11
Dominican Republic 0.74 Haiti 0.46 0.28 12
Oman 0.77 Pakistan 0.50 0.27 13
Algeria 0.70 West Sahara* 0.44 0.27 14
Saudi Arabia 0.77 Sudan 0.51 0.26 15
Japan 0.94 North Korea* 0.68 0.26 16
Australia 0.95 Indonesia 0.69 0.25 17
China 0.75 Pakistan 0.50 0.25 18
China 0.75 Nepal 0.50 0.24 19
Algeria 0.70 Mauritania 0.47 0.24 20
* estimations

The analysis of discontinuities presented on map 23 and in table 1 clearly reveals

that the most important differences in development terms do not generally take
place between the Triad countries and their immediate neighbours which have
generally benefited in developmental terms over the last 25 years. It is rather
between this semi-peripheral countries and the less developed part of the World

78
that such discontinuities are at their most important. This situation is particularly
obvious in the case of Europe where the major line of discontinuities in a southerly
direction is not located on the southern shore of the Mediterranean Sea but rather
on Sahara.

Map 23: Discontinuities of Human Development in the World in 2002

79
More precisely, we note the existence of a double line of discontinuities: a minor
one between the north and south shores of the Mediterranean Sea and a major one
between the north and south of the Sahara, with the World record of differences of
HDI between Libya and Niger or Chad. In the rest of the World, major
discontinuities are also observed between the northern and southern parts of Asia,
between Australia and Indonesia or Papua, between Northern and Southern Korea,
etc. In some cases, discontinuities are related to political crisis as in the case of Iraq
or Haiti. As the HDI is a synthetic index which combines three different components
of development (life expectancy, education level, economic level), we have decided
to apply a cluster analysis on the 168 states of the World in order to delineate the
factors of development and eventually revealing specific combinations (map 24).
The resulting typology reveals the existence of 4 types of countries:

Very Highly and Highly developed countries (type A and B) actually cover the
majority of the World, although it remains possible to observe differences between
countries with very high levels in all criteria (A.1), countries with high levels in all
criteria (A.2) and countries with a high level of education and life expectancy but
medium economic levels (B.1). In Europe, these 3 types are clearly illustrated by
EU15 (e.g. Germany), NMS (e.g. Hungary) and candidate countries (e.g. Romania,
Turkey). This type B.1 is also represented in northern Africa (Algeria, Libya, and
Tunisia) and is observed in most countries of Latin America and in China. The type
B.2 is characterised by a very low economic level combined with relatively high
levels of education and life expectancy. It can be especially observed in former
socialist countries (Serbia, Moldova, Armenia, Vietnam, and Outer Mongolia) and
some other countries subject to recent economic crises (Peru, Indonesia).

Medium and Less developed countries (type C and D) are mainly located in
Africa and southern Asia, with the addition of some of the countries of Central
America. The case of countries from type C with relatively high levels of education
and economic development, but a dramatically low level of life expectancy due to
the impact of AIDS since 1985 presents a very specific situation. Most countries of
southern part of the African continent have experienced reductions in life
expectancy of more than 10 years and are terribly hampered by the economic and
social consequence of this tragedy. The countries with medium development are
differentiated according to their relative advantages in education (type D.2,
characteristic of eastern Africa) or life expectancy (type D.1 characteristic of India
and some Muslims countries). The worse situation of a very low level of
development for all criteria (type D.3) is characteristic of sub-Saharan African
countries without access to the sea (e.g. Niger, Chad) or countries subject to recent
political crisis or wars (Afghanistan, Liberia).

80
Map 24 : The components of Human Development in the World in 2002

81
3.2.4.2. Discontinuities of GDP per inhabitant (pps) in 1996–2000

The research developed in the context of ESPON on the measurement and the
cartography of economic discontinuities between neighbouring regions (Cf. ESPON
3.1, FR) revealed that results can vary according to the criteria used between
neighbouring regions. The same is of course true at World scale and table 2
indicates that the highest economic discontinuities are not the same in absolute or
in relative terms. In the first case, major discontinuities take place between the
cores of the Triad and their immediate neighbours (e.g. USA/Mexico or
Norway/Russia). In the second case, discontinuities can also appear between less
developed countries (e.g. Congo/Zaire or Malaysia/Cambodia).
Table 2 : Major differences of GDP per capita pps 1996-2000 between
neighbouring states of the World in 2002
rank Highest absolute differences Highest relative differences
State i State j Xi-Xj State i State j Xi / Xj
1 U.S.A. Cuba 24400 Japan North Korea 17.4
2 U.S.A. Russia 21900 U.S.A. Cuba 12.0
3 U.S.A. Mexico 19900 Australia Papua N.G. 11.5
4 Japan North Korea 19500 South Korea North Korea 10.9
5 Norway Russia 18900 Kuwait Iraq 9.9
6 Australia Papua N.G. 18500 Saudi Arabia Sudan 9.2
7 Singapore Indonesia 17500 Iran Afghanistan 8.6
8 Australia Indonesia 17000 Congo Zaire 8.5
9 France Suriname 16600 Saudi Arabia Eritrea 8.2
10 Japan Russia 16000 Saudi Arabia Iraq 7.6
11 Italy Albania 15600 Italy Albania 7.4
12 Italy Serbia/Mont. 15600 Italy Serbia/Mont. 7.4
13 Italy Bosnia 15300 Malaysia Cambodia 7.3
14 Italy Algeria 15300 France Suriname 7.3
15 Luxembourg Germany 14400 Bahamas Cuba 7.2

The cartography of relative differences was preferred for map 25 which confirms
and completes the previous analysis of the discontinuities of HDI. On the one hand,
we observe that important economic discontinuities can be seen all over the World
and not only between the richest countries and their neighbours. On the other hand,
the map reveals that discontinuities are organised as “concentric lines” around the
major peaks of wealth and define different aureoles which help to clarify the
delimitation of semi-peripheral regions. It is very clear in the case of European
Union, which is surrounded by a double line of discontinuities to the east and to the
south. The same situation can be observed to the south of U.S.A. where Mexico is
clearly in an intermediate position, lower than USA but much better off than the
Central American countries. The same scheme could be observed in Eastern Asia if
regional data was used in China in order to differentiate the coastal area (integrated

82
into World economy) and the inner continental regions which currently remain
somewhat less developed.
Map 25 : Discontinuities of GDP/inh. in the World in 2002

83
3.2.4.3. Dynamics of economic and demographic growth (1950 –2000)

The analysis of social (HDI) and economic (GDP/inh pps) inequalities which has
been presented in previous sections has revealed the existence of strong lines of
discontinuities between the central and peripheral regions of the World. More
precisely, it has demonstrated the existence of concentric lines of discontinuities
around the poles of the Triad, defining intermediate zones of semi-periphery in
terms of economic and social development. These inequalities are not static realities
however and, as such, it is important to evaluate their dynamic in the medium
term.??

A detailed analysis of the evolution of population and GDP pps of the states of the
World over the last 50 years (FR- Vol. II) reveals that the analysis of GDP per capita
is not sufficient for a sound evaluation of the real comparative advantages of states
in terms of World competition. For example, the stability of the level of GDP per
capita of a given state (as compared to the World mean) can be associated either
with (1) a joint stability of its share of population and GDP (2) a joint decline of both
factors (3) a joint increase in both factors.

When we analyse the evolution of the share of World population and World GDP
(pps) of each state of the World (Map 26), it is clear that very important changes
have occurred over the last 50 years with a global transfer of population and
economic production from the traditional centres of the Triad to their peripheries.
The fact is that the USA, Canada, the European Union and the states of the former
Soviet Union have experienced lower rates of increase in terms of their population
and their GDP than the rest of the World. Their population and wealth did not
decrease in absolute terms, but their share of the global World was strongly
reduced in favour of other countries such as China (for GDP) or India (for
population).

A synthetic typology of the evolution of the share of World population and GDP of
the various states of the World reveals differentiated patterns (map 27). The
centres of the Triad have generally experienced a joint decline in their shares of
GDP and population. As the reduction was generally equivalent or higher for
population than for GDP however, they maintained or indeed even increased their
relative level of GDP per inhabitant (type C and D). The states located in their
immediate periphery however experienced rather the opposite with a joint increase
of their share of population and GDP in the World. Even if their GDP per capita did
not necessary increase more quickly than the rest of the World, their economic and
demographic size has clearly increased. The states in this situation (type A and B)

84
define a “Golden ring” of growth from Mexico to Brazil, Northern Africa, the Middle
East and South-East Asia. It is generally only in the deep peripheries, located at
longer distance from the Triad that the worse situation of an increase in the share of
population associated with a decrease in the share of GDP was manifest (type E).

Map 26: Evolution of World share of population and GDP (1952-1998)

85
Map 27 : Joint evolution of the share of the World population and GDP PPS
from 1950-54 to 1996-2000

86
87
3.2.4.4. Demographic potentialities for the XXIth century

The analysis of past trends has revealed a relatively simple pattern of diffusion in
terms of economic and demographic growth from the centres of the Triad to a
“golden ring” of growth located in their immediate neighbourhood. What then of the
future? It is always difficult to propose scenarios of future spatial trends at the
World scale with recent history providing many cruel examples of predictions which
proved to be erroneous. One of the best examples here is the famous report on the
“Limits to Growth” published by the Club of Rome in 1972, which predicted a
dramatic divergences of all factors (energy, population, economy, food ) at World
scale and proposed as the only solution a “halt to growth”. 21 Benefiting from the
work done in the context of the ESPON 3.2 project (TIR), we propose at least to
analyse one crucial prospective parameter which is the Index of Sustainable
Demographic Development (ISDD) defined as the combination of the median age
and the life expectancy of a population. The ISDD is based on the assumption that
population ageing is not necessary a problem if life expectancy is growing at the
same rhythm. In this case, the “remaining life” of a population is maintained at the
same level. It is also based on the assumption that “remaining life” is an important
characteristic of states with higher opportunities for social and economic
development.

Looking at the typology presented in map 28, it is clear that the states located in
the “Triad” (type 9) are actually characterized by a combination of important ageing
and important life expectancy, thus producing a medium value of ISDD. The
historical trajectories indicate that this situation will probably evolve negatively if
migrations of the younger population are not developed in order to reduce ageing.
Russia, the Ukraine and Belarus are characterized by an important trend towards
ageing without important progress on life expectancy, which defines a very low level
of ISDD (type 7). East central Europe presents something of an intermediate
situation (type 8).

The states located in the periphery of the Triad actually present an excellent
demographic situation with a very high level of ISDD due to the recent growth in life
expectancy combined with a low level of ageing. This is particularly true for states
located in Latin America, northern Africa and the Persian Gulf (type 5) where the
difference between median age and life expectancy can be greater than 50 years.

21
The irony of this example is that most authors criticized the pessimistic conclusion of this report in the 1990’s
when economic growth came back and when population increases appeared to have been much lower than expected.
But actually, in the context of the potential risk of an oil crisis, many authors are now asking if, after all, there were
not some truth in the Club de Rome’s predictions after all. See Matthew R. Simmons, 2000, Revisiting The Limits to
Growth: Could The Club of Rome Have Been Correct, After All? , http://www.energybulletin.net/1516.html

88
The situation is not so good in China or Thailand (type 6) where an intensive policy
of birth control developed in the 1970’s produced a significant reduction in birth
rates and consequently saw an important ageing of population, but one which was
not balanced by equivalent progress in terms of life expectancy. The rest of
southern Asia (type 4) presents something of an intermediate situation here with
lower ageing than in China but lower life expectancy than in America. The countries
of Africa are actually characterized by low levels of ISDD because populations are
young but with low (type 3) or very low (type 1) life expectancy. Southern Africa is
a specific case related to the high incidence of AIDS (type 2). The situation is
however evolving, and we can imagine that states actually in types 1-2-3 will evolve
into type 4-5-6 which themselves will evolve towards types 8-9. Demographic
factors evolve slowly but with powerful consequences in the long run.

Map 28: Demographic potentialities for the XXIth century

89
3.3: WORLD UNIFIED TERRITORIAL SYSTEM (WUTS)

3.3.1: Introduction: from NUTS to WUTS …

The analysis of the position of Europe in the World is realised through the
compilation of statistics elaborated at the state level. But the definition of the state
is not clear, and one of the biggest challenges that this ESPON project has had to
face (See: the FIR, and the elaboration of a precise list of 168 states which
represent a minimum of 1/10 000 of the population, GDP or area of the World). This
list of 168 states provides a clear basis for data collection in a harmonised way, all
states being identified by their 3-digit ISO code (like HUN for Hungary or NZL for
New Zealand).

Having secured the collection of elementary data in an harmonised way, we then

started to build a more ambitious tool with the elaboration of an harmonised
hierarchical system of World division, entitle, WUTS (World Unified Territorial
System) which is directly inspired by the NUTS (Nomenclature of Territorial Units
for Statistics) created by Eurostat 22 more than 25 years ago in order to provide a
single uniform breakdown of territorial units for the production of regional statistics
for the European Union.

Many divisions of the World into “regions” (clusters of states) are actually used by
international organisations, either private (transnational firms) or public (UN
agencies) but the case study that we have developed on this topic clearly
demonstrates the great variety of solutions which are actually proposed, making it
impossible to use any of them as a reference point for ESPON work. Moreover, it is
very clear that each proposal for the division of the World into regions implies the
elaboration of a “Weltanschauung” (vision of the World) which is not neutral and has
a strong influence on political decisions.

Benefiting from the fact that a preliminary elaboration of World regions had already
been proposed in the context of project ESPON 3.1 Integrated Tools, we decided to
further elaborate on this in ESPON 3.4.1. In particular, a revised version was
produced and a more general proposal of WUTS organised into 5 hierarchical levels,
from the level of States (WUTS 5) to the level of the World (WUTS 0), produced.
The different approaches to researching such questions developed in the context of
the ESPON 3.4.1 project on the regionalisation of the World (see. part A.1)
convinced us that one level of regionalisation was not sufficient and that corrections

22
http://europa.eu.int/comm/eurostat/ramon/nuts/introduction_regions_en.html

90
had to be undertaken in respect of the preliminary attempt to delimit regionalisation
undertaken in the context of project ESPON 3.1.

The WUTS system which is presented in this final report is not intended to be a
perfect, or indeed, definitive proposal of World regionalisation and as such it is clear
that it suffers from certain limitations:

♦ Many regionalisation criteria are possible, from a thematic and

conceptual point of view (see. A.1) while their results are sometimes
contradictory. As a result, it is always necessary to make choices or
compromises between alternative solutions.
♦ The availability of data at the World scale limits dramatically the choice
of criteria in terms of regionalisation. For example, the fact that trade flows
are more easily available and more complete than migratory flows has
certainly influenced the results of the regionalisation proposed in this report
and explains why the centre-periphery model plays a predominant role in the
elaboration of the results.
♦ The focus on areal division rather than on networks and the archipelago
of World cities is also a questionable choice which is explained by the
domination of database elaborated at the national level. With a good
database on cities of the World, we would certainly have proposed a different
approach to the division of the World.
♦ The lack of infra-national data has also hampered our work as it obliged
us to consider each state as a whole despite the existence of important
regional differences. It is not a real problem for small states but it is an
important issue in the case of continental states like Russia, the USA,
Canada, China, Brazil, Australia or India. In the case of China, it is obvious
that we should have split the territory into different regions from the very
developed provinces of the pacific coast to the lagging regions of the interior.

Despite these limitations however, we hope that the WUTS system will prove in
future to be a useful tool for European Union policymakers, and as such will be more
useful than the usual delimitations of regions elaborated by the UN or other
organisations. Indeed, this division of the World has been elaborated from an
ESPON perspective which leads us to identify regions of interest for Europe which
could be considered as not relevant in other part of the World.

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3.3.2: the World in 3 Global Regions (WUTS1)

The level WUTS1 (map 29) proposes a division of the World into three “Global
Regions” clearly based on the economic model of the Triad. At this level, we assume
a vision of the World which is based on the classical “Centre-Periphery” model and
where the delimitations are mainly based on economic criteria like trade flows or
Foreign Direct Investment flows.

• Euro-Africa (W1) is the part of the World which is mainly polarised by

Western Europe in economic terms and also in terms of accessibility. The
preliminary results of project EIW produced in the context of ESPON 3.1
demonstrate clearly that in terms of trade flows (1996-2000) and in terms of
air flows (2000), we can see that the influence area of Europe covers a wide
area from Vladivostok (Russia) to Cape Town (Southern Africa).
• The Americas (W2) is the part of the World economically and politically
dominated by the influence of United States or which, at least, is considered
as such with the imposition of the “Monroe doctrine” (1823) and particularly
by the end of the 19th century, by which time the United States became able
to effectively enforce it..
• Asia-Pacifica (W3) is the remaining part of the World which cannot be
considered as polarised by one centre but rather by an oligopoly of developed
(Japan, Australia, Southern Korea) and developing (China, India) countries.
This area fits with the new delimitation of ASEAN which is now actually
enlarging towards India.

92
 Table 3 : Size of the 3 World global regions (WUTS1)
Code Name SUPTO SUPAG POPTO POPUR GDPPS CARBO

W1 Euro-Africa 113 47.8 41.1 30.3 35.7 34.3 35.9

W2 The Americas 29 29.9 26.1 13.7 22.1 32.1 32.0
W3 Asia-Pacifica 26 22.3 32.8 56.0 42.2 33.6 32.1

W World 168 100 100 100 100 100 100

Nbstate Number of states of the ESPON database

SUPTO Surface area (sq km), 1999, (AG.SRF.TOTL.K2)
SUPAG Land use, arable land (sq km), 1999, (AG.LND.ARBL.HA)
POPTO Population, total (inh.),1999, (SP.POP.TOTL)
POPUR Population, urban (inh.), 1999, (SP.URB.TOTL)
GDPPS GDP, PPP (current international $), 1999, (NY.GDP.MKTP.PP.CD)
CARBO CO2 emissions (t), 1999,
(EN.ATM.CO2E.KT)

Source: World Development Indicator 2002, 2003, + Estimations of Project ESPON 3.4.1.

This division of the World into global regions is certainly not perfect and can be
further improved. But it has the great statistical advantage of proposing a simple
view of the World into three main areas of equivalent economic size, each
representing more or less one third of the World’s GDP and of the World’s emissions
of Carbon Dioxide at the beginning of the 21st century. Differences are more
important in geographical terms (larger area of Eurasia) or in demographic terms
(larger population of Asia-Pacifica) but it is certainly the best compromise that can
be achieved at this scale (table 3). An interesting characteristic of Euro-Africa is its
significant political divisions (113 states) as compared to the Americas (29 states)
and Asia-Pacifica (26 states).

93
Map 29: The World in 3 global regions (WUTS1)

94
3.3.3 The World in 7 Macro Regions (WUTS2)

The WUTS2 level (Map 30) proposes a division of the World into 7 macro regions
which displays more homogeneous areas inside each of the previous global regions.
The level of economic development is a major criteria for this second level of
division (division of Asia-Pacifica in two parts) but other criteria are also taken into
account such as language (Latin America), common history (Europe and Northern
Asia, Southern Mediterranean and eastern Asia) or integration zone (Northern
America). As it is impossible to combine all criteria without producing a
multiplication of regions, the results must necessarily be seen as a compromise
where many choices could be further discussed by the ESPON Monitoring Committee
and improved by future researches developed in ESPON II.

Concerning the division of the global region of Euro-Africa (W1) into 3 macro
regions, we took into account the results of the survey on the “Weltanschauung of
the ESPON community” when we established the limits of “Europe and Northern
Asia” (W11) reflecting that which is commonly accepted by the majority of ESPON
members in their subjective delimitation of Europe. Russia and Turkey 23 were
involved in this macro region because, historically, they have, perhaps since the
Middle Ages, been strongly linked with the dynamic of European development. The
elaboration of a specific area for Sub-Saharan Africa (W13) appears obvious
according to all demographic, social and economic criteria. While the creation of a
specific area for Western Asia and Northern Africa (W12) appeared rather more as a
default choice than as an attempt to isolate a so-called ‘cultural area’, based on
religious criteria like the “greater Middle East” in the United States. In our opinion,
the identity of this area is not only cultural but also demographic, economic and
social with intermediate levels between Europe and Sub-Saharan Africa.

In terms of size at World scale (Table 4), the 7 macro regions are relatively equal in
terms of their surface area (more or less 10-20% of the World for each) which is
interesting for cartographic reasons alone. They are however very different in terms
of all other economic and demographic criteria. Once more then, we note the
extraordinary political fragmentation of the macro regions located in Europe and its
neighbourhood as compared to those of the rest of the World.

23
We discussed an alternative solution which saw Turkey relocated into region W12, making possible the
elaboration of a complete cluster of “South and East Mediterranean countries” at a lower level (W121). But doing
this would have run contrary to the fact that Turkey is officially candidate for EU membership, which is not the case
for the other Southern Mediterranean countries. This discussion proved very clearly that the elaboration of the
WUTS system is not a purely technical question but a very deep political problem as it is linked to the political
vision of the future of the EU. We have no doubt that a significant discussion would have to take place at the
political level before the WUTS system was adopted by the European Commission as a prospective tool.

95
 Table 4: Size of the 7 World macro regions (WUTS2)
Code Name Nbstate SUPTO SUPAG POPTO POPUR GDPPS CARBO
W11 Europe & Northern Asia 44 18.1 23.4 13.6 20.9 27.3 26.7
W12 Wes. Asia & North. Africa 25 11.6 6.3 6.0 7.1 4.2 7.0
W13 Sub-Saharan Africa 44 18.1 11.4 10.8 7.7 2.7 2.2
W21 Northern America 3 16.1 18.1 6.8 11.1 25.5 28.0
W22 Latin America 26 13.8 8.0 6.9 11.0 6.6 4.0
W31 Southern and Eastern Asia 15 13.7 26.3 47.2 30.9 19.7 20.4
W32 Western Pacifica 11 8.6 6.6 8.9 11.2 13.9 11.7
W World 168 100 100 100 100 100 100
Legend: see. table A.3
Source: World Development Indicator 2002, 2003, + Estimations of Project ESPON 3.4.1.

Map 30: The World in 7 Macro regions (WUTS2)

96
3.3.4 The World in 17 Meso Regions (WUTS3)

The WUTS3 level (map 31) proposes a division of the World into 17 meso regions
similar to the division elaborated in the preliminary study on EIW developed in the
context of project ESPON 3.1. But it is partly modified in order to take into account
the constraints of hierarchy (compatibility with WUTS1 and WUTS2) and in
accordance with the advice of the experts embedded in project ESPON 3.4.1. This
meso-regions level is crucial for statistical and cartographic analysis, especially in
the case of flows where the previous WUTS1 and WUTS2 levels are too general and
where the national level (WUTS5) is not relevant because of the heterogeneity of
the economic and demographic sizes of states. We started typically from the largest
states of the World (USA, China, and India, ) in order to build an equivalent
aggregate based on groups of states which are strongly related (European Union) or
which are sufficiently homogeneous to keep the maximum aggregation in the
aggregation procedure.

Table 5: Size of the 17 World meso regions (WUTS3)

Code Name Nbstate SUPTO SUPAG POPTO POPUR GDPPS CARBO

W111 Western Europe 21 3.0 5.6 6.5 11.0 21.1 13.9

W112 East. Europe & North Asia 23 15.1 17.8 7.1 9.9 6.2 12.8
W121 SE Mediterranean 11 4.7 2.2 2.8 3.3 1.9 2.0
W122 Middle East & Central Asia 14 6.9 4.2 3.1 3.8 2.4 5.0
W131 Central Africa 7 4.0 1.4 1.3 1.0 0.2 0.1
W132 Eastern Africa 11 4.4 3.1 3.1 1.5 0.5 0.1
W133 Western Africa 15 4.6 4.2 3.9 3.2 0.6 0.3
W134 Southern Africa 11 5.2 2.8 2.4 2.0 1.4 1.7
W210 Northern America 3 16.1 18.1 6.8 11.1 25.5 28.0
W221 Central America & Carrib. 21 4.4 1.8 3.1 4.4 2.3 1.8
W222 Southern America 5 9.5 6.1 3.8 6.7 4.3 2.3
W311 Eastern Asia 3 8.4 8.8 21.5 16.4 10.8 13.7
W312 Southern Asia 8 4.3 15.6 23.1 13.4 7.7 5.6
W313 South-East Asia 4 0.9 1.8 2.6 1.2 1.3 1.1
W321 Western Pacifica 3 0.4 0.9 3.3 5.4 9.9 7.9
W322 South-Western Pacifica 5 2.2 2.0 5.2 5.1 2.7 2.2
W323 Oceania 3 6.0 3.6 0.4 0.7 1.3 1.7
W World 168 100 100 100 100 100 100
Legend: see. table A.3
Source: World Development Indicator 2002, 2003, + Estimations of Project ESPON 3.4.1

An important criterion here was the choice of aggregates, which could be relevant
for the elaboration of European policy recommendations or for the development of
strategic plans. The Southern and Eastern Mediterranean region (W121) is typically
a region which makes sense from a European point of view as it is related to the
Barcelona process. Concerning East- Central Europe and the Balkans, a difficult

97
choice was face in relation to the decision to split this area between the new
Member States, Russia, Turkey and Balkans, at this level or to wait for the next
level (WUTS4). We decided, ultimately, to let this aggregate as a whole at the
WUTS3 level in order to make comparisons between Eastern Europe and SE
Mediterranean region easier (Table 5).

Map 31: The World in 17 meso regions (WUTS3)

98
3.3.5 The ESPON space and its surrounding areas in 12 Micro Regions
(WUTS4)

The WUTS4 level (Map 32) was elaborated only for the purposes of analysing in
more detail the ESPON space in its wider geopolitical and socio-economic context
and, more generally, in the context of what we termed the global region of Euro-
Africa (W1). In the other parts of the World, this level is not particularly interesting
because it is smaller than the size of the largest states and could not be properly
realised without the desegregation of the largest countries (the USA, China, India,
and Brazil) which is actually impossible, or at least very expensive, and of minimal
interest for the ESPON Programme. Micro-regions are particularly useful for the
analysis of this wider ESPON space because they introduce internal divisions both in
the ESPON area and in its northern and southern peripheries. In terms of
migrations, for example, it is interesting to distinguish two aspects: the various
origins (Maghreb, Mashreq, the Balkans, and Central Asia) and the various
destinations (Northern Europe, West Central Europe, and Southern Europe) and to
establish matrixes at this level which is more homogeneous than the level of states.
More generally, it is interesting to produce statistical tables where the reference is
not the World but the wider ESPON space or the wider area of European ‘influence’
defined at the level of WUTS1 by the region of Euro-Africa (W1).

Table 6: Size of the 11 micro regions in the Wider ESPON space in Euro-
Africa (WUTS4)
Code Name Nbstate SUPTO SUPAG POPTO POPUR GDPPS CARBO

W1111 Northern Europe 8 3.0 2.7 4.8 7.3 14.2 9.6

W1112 West Central Europe 7 1.7 6.0 10.1 15.1 30.5 18.6
W1113 Southern Europe 6 1.6 4.8 6.6 8.3 17.1 10.5
W1121 East Central Europe 8 1.2 5.3 4.1 4.7 5.1 7.0
W1122 Balkans & Turkey 8 2.2 8.0 6.7 7.2 4.5 4.9
W1123 Caucuses & Dnepr 6 1.6 7.8 4.5 5.2 2.1 5.9
W1124 Russia 1 26.6 22.3 8.1 10.7 6.3 17.8
W1211 Maghreb 5 7.8 3.8 4.0 4.3 2.5 2.3
W1212 Mashreq 6 2.0 1.5 5.3 4.9 2.9 3.3
W1221 Northern Middle East 5 6.2 5.4 3.1 2.3 1.1 3.4
W1222 Southern Middle East 9 8.1 4.8 7.2 8.4 5.8 10.6
W13 Sub-Saharan Africa 44 37.9 27.7 35.5 21.5 7.9 6.0
W1 Euro-Africa 168 100 100 100 100 100 100
Legend: see. table A.3
Source: World Development Indicator 2002, 2003, + Estimations of Project ESPON 3.4.1.

If we consider for example table 6 we can see very important differences in the size
of each micro-region in respect of the different criteria. In geographical terms
(surface area) the more important regions are typically the peripheral areas of

99
Russia (27%) and Sub-Saharan Africa (38%). In demographic terms, each micro-
region has more or less the same size (5-10%) with the exception of Sub-Saharan
Africa which accounts for one third (36%) but has not been divided into micro-
regions. In economic terms, there is a clear concentration in West Central Europe
(30%), Southern Europe (17%) and Northern Europe (14%) but it is interesting to
observe that many other regions are important when they are considered as a
whole and are not split into states. Finally, the table underlines the fact that the
repartition of Carbon Dioxide emissions is very different from the distribution of
economic or demographic sizes, especially in the case of Russia which produces as
much as West Central Europe (18%).

Map 32: The Wider ESPON Space in 12 micro regions (WUTS4)

100
3.4 Conclusion: A tool for benchmarking between ESPON 29 and the
rest of the world

In our answer to the tender, we defined the essence of this ESPON project as
“grounding globalisation”. The concept of globalisation is fundamental to a study of
Europe in the World, but globalisation takes many forms and the concept can
become very loose and descriptive. ESPON as a spatial planning observatory is
primarily concerned with the spatial forms that globalisation takes and the spatial
strategies that are being developed within and outside Europe to take advantage of
the opportunities created by globalisation while also addressing its risks. In this
project, perhaps more than in any of the others, ESPON has to address the trans-
scalar dimension – the connections between global structures and flows and their
replication, impacts and policy initiatives at the macro, meso and micro levels. It is
important to recognise the complex nature of these trans-scalar relationships, and
the multi-directional nature of the flows and actions. Globalisation is a dynamic,
differentiated, contested process infused with risk, not a one-way, top-down,
controlled and predictable agency imprinting change on maps.

In seeking to “ground globalisation”, to survey its trans-scalar spatial dynamics and

spatial policy implications, we need to combine quantitative analysis with qualitative
concepts and investigations. For example, Swyngedouw (1997, p.140) argued that
“different scalar narratives indicate different causal moments and highlight different
power geometries […] Scale is consequently not politically or socially neutral, but
embodies and expresses power relationships.” Thus the way in which scale and
global spatial relationships are conceptualised and discussed is an important
dimension of research into Europe in the World.

Our most crucial task was therefore to propose new divisions of the World despite
the fact that traditional modes of thinking remained strong in the collective
perception of European policy-makers. The survey of the ESPON community
undertaken in relation to their visions of the World was a milestone in attaining this
objective as it helped the members of the ESPON community to gain awareness of
the fact that what they considered “natural” (the division of the World into
continents) was in fact a social and historical production, not necessarily relevant
for the understanding of the contemporary World.

It was thereafter much easier to propose alternative divisions of the World into
regions elaborated in a scientific framework according to accessibility, flows or
dissimilarity, proposing different solutions for the regionalisation of the World,
exactly as we do in the usual practice of the ESPON programme where each project

101
proposes different typologies of the ESPON territory in accordance with the specific
criteria in question.

The major difficulty here was the elaboration of a synthesis of this result which took
the form of a hierarchy of World divisions in regions of different sizes within the
context of the WUTS system. As in the case of the internal division of the ESPON
territory via the NUTS system, the WUTS system elaborated here is not perfect and
should certainly be revised and further improved in the future. It is nevertheless a
pragmatic tool with the specific advantage of having been elaborated precisely for
the European context, as its use in respect of other contexts is not envisaged.

The example of the benchmarking of World regions presented in the final section of
the chapter illustrates the potential of this tool and hopefully also the level of
interest likely to be shown in it from the community of European Spatial Planners.
In addition, it also provides, more generally, the basis for further research
developed in the next chapters.

The ‘added value generated by the WUTS system for ESPON 3.4.1 is the rendering
of the multi-scalar analysis of the situation of Europe in the World at various scales
of analysis and with harmonised territorial units which have been specifically
elaborated in order to fit to European questions (which is not necessarily the case
with the regions of the World elaborated by UN agencies), much easier. To illustrate
this point, we propose two examples which indicate how the combination of the
WUTS levels 0 to 3 can be used in order to produce synthetic tables which can
easily be presented on a single page.

102
3.4.1: Human development in 2002

We propose firstly to summarise the World distribution of the Human Development

Index in 2002 (table 7).

• At the level of Global Regions (WUTS1), Euro-Africa is the least

developed part of the World with an HDI equal to 0.67 which is below the
World mean (0.70), comparable to Asia-Pacifica (0.68) but much lower than
the Americas (0.84). The detailed analysis of the three components indicates
that the low level of Euro-Africa main relates to low life expectancy (0.63) as
compared to the World level (0.70). For education and GDP, the situation of
Euro-Africa is more or less equal to the World mean.
• At the level of Macro Regions (WUTS2), there appears to be a strong
differentiation between the various parts of Euro-Africa, with a clear North-
South gradient. Indeed, the HDI level is equal to 0.86 in Europe & Northern
Asia (W11), 0.69 in Western Asia and Northern Africa (W12) and 0.44 in Sub-
Saharan Africa (W13). This means that the global region of Euro-Africa is
characterised by a high level of heterogeneity, which is not the case for the
Americas or for Asia-Pacifica where internal differences are not so large.
• At the level of Meso Regions (WUTS3) we observe further spatial
differentiation inside W11 between Western and Eastern Europe which have
different levels of HDI (0.93 and 0.79). They are related to differences in life
expectancy (0.89 and 0.75) and economic development (0.93 and 0.71) but
are limited for education level (0.96 and 0.91). We do not observe such
important differentiations inside the macro regions of Western Asia &
Northern Africa (W12), nor inside Sub-Saharan Africa (W13) where the
economic level is better in southern Africa but where AIDS produces a
significant reduction in life expectancy.

What is interesting with such a table combining different WUTS levels is the
opportunity to combine analysis at different levels, and to introduce various
contexts into the evaluation of the situations. Completed by a map at the state level
(WUTS5), this table provides a perfect synthesis of the phenomena of most interest
for European policy-makers (and researchers ).

103
 Table 7: Distribution of Human Development with WUTS
World Unified Territorial System Size Human Development Index
Code Name States Pop Life Educ GDP TOT
W WORLD 168 6236 0.70 0.75 0.64 0.70

W1 EURO-AFRICA 113 1882 0.63 0.75 0.63 0.67

W11 Europe & Northern Asia 44 814 0.82 0.94 0.82 0.86
W111 Western Europe 21 392 0.89 0.96 0.93 0.93
W112 Eastern Europe & Northern Asia 23 422 0.75 0.91 0.71 0.79

W12 Western Asia & North Africa 25 385 0.73 0.70 0.64 0.69
W121 SE Mediterranean 11 183 0.75 0.67 0.64 0.69
W122 Middle East & Central Asia 14 202 0.71 0.73 0.64 0.70

W13 Sub-Saharan Africa 44 683 0.36 0.55 0.41 0.44

W131 Central Africa 7 84 0.30 0.53 0.37 0.40
W132 East Africa 11 206 0.38 0.53 0.39 0.43
W133 West Africa 15 238 0.42 0.50 0.39 0.44
W134 Southern Africa 11 155 0.28 0.67 0.50 0.48

W2 THE AMERICAS 29 856 0.80 0.90 0.81 0.84

W21 North America 3 424 0.86 0.94 0.92 0.91

W210 North America 3 424 0.86 0.94 0.92 0.91

W22 Latin America 26 431 0.75 0.86 0.70 0.77

W221 Central America & the Caribbean 21 192 0.75 0.82 0.65 0.74
W222 Southern America 5 239 0.75 0.89 0.74 0.79

W3 ASIA-PACIFICA 26 3499 0.70 0.72 0.60 0.68

W31 Southern and Eastern Asia 15 2948 0.69 0.70 0.58 0.66
W311 Eastern Asia 3 1320 0.76 0.83 0.64 0.74
W312 Southern Asia 8 1466 0.62 0.56 0.53 0.57
W313 South-East Asia 4 162 0.71 0.82 0.59 0.70

W32 Western Pacifica 11 551 0.79 0.87 0.73 0.80

W321 Western Pacifica 3 197 0.91 0.95 0.91 0.92
W322 South-Western Pacifica 5 330 0.71 0.82 0.61 0.71
W323 Oceania 3 24 0.89 0.99 0.92 0.94
Legend
WUTS Code of WUTS units
Name Name of WUTS units
States Number of states
Pop Population in 2002 (thousands)
Life Life component of Human Development Index in 2002
Educ Education component of Human Development Index in 2002
GDP Economic Component of Human Development Index in 2002
TOT Human Development Index in 2002
Source: Human Development Report 2004; Missing values estimated by ESPON 3.4.1

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3.4.2: Distribution and the evolution of GDP per capita (1980-2004)

Concerning the distribution of GDP per capita, in constant dollars (2000 prices), the
hierarchy is not the same as for the HDI (table 8), with Euro-Africa performing
better here. At the WUTS 1 level it is number one, exceeding the scores of both the
Americas and Asia-Pacifica, despite the low GDP per capita in several parts of sub-
Saharan Africa. This hierarchy has changed significantly since the 1980s when the
Americas led the field in this respect. Each upper level WUTS (WUTS 1, 2 and 3) has
seen a regular increase in its performance. At the lower level (WUTS 11, 12, etc.),
there are however dramatic contrasts between clusters of states. As far as Euro-
Africa and Asia-Pacifica are concerned, there are huge gaps between WUTS 11 and
13 and between WUTS 32 and 31. Such gaps also exist between Latin and North
America though the average GDP per capita is higher in WUTS 22 than in WUTS 13
and 31. Comparing this third level WUTS, one also notices that North America tops
the hierarchy, followed by Western Pacifica and then, only at the third rank, by
Europe and Northern Asia burdened by the low performances of WUTS 112.

Within these hierarchies, the evolution of Euro-Africa’s rank is somewhat different

from that outlined above. Euro-Africa’s performance has stagnated somewhat in the
last 25 years for several economic and political reasons (from 6.239 to 6.394 with a
significant decrease in the Middle East), while GDP per capita has dramatically
increased in the Americas and Asia-Pacifica. At a lower level, Western Europe is not
the richest region in the World, in term of production per inhabitant, coming in
second after the Western Pacifica. In addition, the table also shows a growing gap
between Western Europe and North America. This evolution is due to two main
factors:
- The NAFTA (WUTS 210) includes a developing country with growing
population (Mexico) which reduces the global level of GDP per capita. ,
- The rapid increase of the GDP per capita in Western Europe is largely due to
what has been called the “golden decline” in previous interim reports of this
project. The population has almost stagnated in Western Europe (from 368 to
392 million inhabitants) whereas it has increased from 327 to 420 in North
America.

Inside Euro-Africa, the gap between Western Europe and other WUTS of the same
level has also enlarged. Western Europe increasingly appears to be a wealthy island
surrounded by poverty, especially in sub-Saharan Africa, which can be compared
only to Southern and Eastern Asia in actual performance. These 25 year tendencies
are not necessarily however complementary, as for instance, the positive evolution

105
of Western Pacifica (WUTS 31) has been much more rapid than the evolution of
Subsaharian Africa (WUTS 13), as shown in table 8.

106
Table 8: GDP per capita Annual average GDP per capita (in constant US 2000
dollars) distributed in periods of five years
World unified territorial system Size
Code Name States 1980-84 1985-89 1990-94 1995-99 2000-04
W0 WORLD 164 6657 6915 7340 8018 8900

W1 EURO-AFRICA 108 6239 5462 5331 5898 6394

W11 Europe & Northern Asia 43 9083 10244 11010 12070 13809
W111 Western Europe 19 15592 17575 19332 21482 24383
Eastern Europe & Northern
W112 Asia 24 2574 2914 2689 2657 3235

Western Asia & Northern

W 12 Africa 22 8877 5404 4261 4855 4500
W 121 South & East Mediterranean 10 3064 3077 3291 3644 4040
W 122 Middle East & Central Asia 12 14689 7731 5232 6065 4960

W 13 Sub-Saharan Africa 43 759 738 720 771 873

W 131 Central Africa 7 1225 1073 1001 1139 1337
W 132 Eastern Africa 10 437 534 578 599 676
W 133 Western Africa 15 353 324 287 292 309
W 134 Southern Africa 11 1023 1022 1016 1052 1170

W2 THE AMERICAS 28 9176 10056 10591 11690 12767

W 21 North America 3 14950 16720 17535 19268 21665

W 210 Northern America 3 14950 16720 17535 19268 21665

W 22 Latin America 25 3401 3392 3648 4111 3869

W 221 Central America & Caribbean 20 3116 3127 3269 3529 3149
W 222 South America 5 3687 3657 4026 4694 4589

W3 ASIA-PACIFICA 25 4557 5227 6099 6744 7539

W 31 Southern & Eastern Asia 12 458 436 511 577 686

W 311 Eastern Asia 2 322 458 480 551 706
W 312 Southern Asia 6 292 344 397 465 532
W 313 South-East Asia 4 761 505 655 727 819

W 32 Western Pacifica 13 8655 10018 11687 13170 14393

W 321 Western Pacifica 2 14234 17129 20903 23001 24863
W 322 South-Western Pacifica 5 2759 3229 4218 5272 5791
W 323 Oceania 3 8972 9696 9939 11237 12525
Source: World Bank

107
3.4.3: Financial flows

Regarding the geographical distribution of FDI inflows, the actual hierarchy is

different (table 9). Euro-Africa is by far the top destination of FDI flows in the
World, attracting far more (more than double) that of the Americas and more than
five times more than Asia-Pacifica. Once again however dramatic contrasts within
the Euro-Africa zone are easily discernable. This is particularly so in relation to parts
of the Middle East and the majority of sub-Saharan Africa, both of which are highly
unfavoured in this respect. Such contrasts should be a major subject of concern for
Europe. Such regions need huge amounts of investment to support their social and
economic development, where the current historical level of GDP increase is not
enough to counteract and absorb the increases in their population. In other words,
financial capital is stored up on the northern shore of the Mediterranean Sea while
population levels and the labour force are growing without sufficient financial
support on the southern shore.

As noted in respect of GDP, such contrasts do not exist in the Americas or in Asia-
Pacifica, where the distribution of inflows is better balanced, especially at the WUTS
3 level, where the attractiveness of China (WUTS 311) makes it the primary
destination of FDI flows with almost 50% of the total. The rest of Asia-Pacifica,
mainly WUTS 321 and 322, however displays surprising figures with relatively low
inflows. The countries of this region seem to be less engaged in financial
globalization than Western Europe and North America. This conclusion is confirmed
by the average level of openness of European economies, in terms of their share of
external trade in relation to their GDP. As such, the economies of Western Europe
are much more open that the other economies of the Triad such as Japan and the
United States.

The evolution of Europe in the last 25 years has been spectacular. Trailing in a
distant second position, far behind Northern America at the beginning of the 1980s,
it now tops the hierarchy, attracting much more than 50% of the total FDI inflows in
the years after 2000. This optimism must however be qualified. In fact, a large part
(about two thirds) of FDI inflows to Western Europe come from other countries in
Western Europe, which is obviously not the case in the United States for example.
Nevertheless, this table confirms the notion that Europe is the most attractive place
in the World for investors.

108
Table 9: FDI Inflows, Annual average inflows in millions of current US
dollars, distributed in periods of five years (World Bank)
World unified territorial system Size 1980-
Code Name States 84 1985-89 1990-94 1995-99 2000-04
W0 WORLD 165 56 277 123 968 196 722 579 324 854 674

W1 EURO-AFRICA 106 22 779 48 935 96 271 271 620 524 600

W11 Europe & Northern Asia 43 16 051 47 147 90 526 258 252 505 943
W111 Western Europe 19 15 893 46 758 86 272 236 901 473 946
Eastern Europe & Northern
W112 Asia 24 158 389 4 254 21 351 31 997

W 12 Western Asia & North Africa 19 6 012 1 553 3 846 7 489 10 133
W 121 South & East Mediterranean 8 1 062 1 578 1 928 4 540 7 988
W 122 Middle East & Central Asia 11 4 951 -25 494 1 918 2 948 2 145

W 13 Sub-Saharan Africa 44 715 1 135 1 898 5 879 8 523

W 131 Central Africa 7 227 181 63 245 1 779
W 132 Eastern Africa 11 51 76 100 612 1 227
W 133 Western Africa 15 324 826 1 402 2 329 2 060
W 134 Southern Africa 11 112 52 334 2 693 3 547

W2 THE AMERICAS 36 26 846 58 894 58 853 219 347 237 354

W 21 North America 3 22 789 55 061 48 848 170 694 197 620

W 210 Northern America 3 22 789 54 089 48 848 170 694 197 620

W 22 Latin America 33 4 056 3 833 10 005 48 653 39 734

W 221 Central America & Caribbean 18 1 177 972 3 918 13 179 11 760
W 222 Southern America 15 2 879 2 861 6 087 35 474 27 974

W3 ASIA-PACIFICA 23 6 652 15 440 41 998 88 358 92 721

W 31 Southern & Eastern Asia 13 9 871 3 570 19 875 50 981 55 092

W 311 Eastern Asia 2 529 2 487 16 066 40 574 46 440
W 312 Southern Asia 7 167 348 1 028 3 893 4 592
W 313 South-East Asia 4 291 735 2 781 6 514 4 060

W 32 Western Pacifica 10 5 665 11 870 21 723 37 377 37 629

W 321 Western Pacifica 2 333 789 2 189 8 143 12 042
W 322 South-Western Pacifica 5 2 867 4 182 11 971 19 957 13 528
W 323 Oceania 3 2 464 6 899 7 563 9 277 12 058

109
4. PART B: HOW IS ESPON EMBEDDED IN THE WORLD BY FLOWS?

4.1 Introduction

We have seen in the general introduction of this report that globalisation is not a
new phenomenon; neither is the fact that regions are interacting in networks
something new. During the first globalisation boom – the century prior to 1914 –
trade, migration and capital flows in the Atlantic community played an important
role in promoting economic prosperity. Such activities took place in networks and
were a regional phenomenon rather than a national one (O’Rourke & Williamson
2000). This is not a new scientific finding – on the contrary. Several major works in
economic history have stressed the importance of regions and how they interact
through trade, migration and capital flows (Dillard 1967, Kenwood & Lougheed
1989, Pollard 1991, Veltz 1996, Castells 1996). Yet, in many current analyses the
functionality of a network of relationships is rarely taken into account. There is
much reluctance to take these insights on board, with institutional, methodological
and ideological inertia still providing significant obstacles to the necessary need to
rethink these issues.

In this part of the report we will try to balance the findings of the previous
chapter on the “Divisions of the World”, especially that part on the elaboration of a
hierarchical territorial division into WUTS, which could have given the false
impression that globalisation can be reduced to the simple emergence of a new level
of territorial organisation between the level of states and the World level. In
particular, we will try to show that, in the European territory which is currently in a
new phase of rapid integration, particular attention should be paid to exchange and
cooperation networks, inside ESPON 29 of course but also between ESPON 29 and
the World. By viewing territories and networks of cities and regions in terms of the
way they articulate one with another and in terms of functional relationships, rather
than principally in terms of locality and distribution, this part of the report highlights
possible future integration patterns for the European space in the emerging World
economy.

The issue is not to set out a new normative model, or a new dominant theory. The
objective of the analysis is to show why it is now relevant to read spatial dynamics
in terms of interconnections and reticulations rather than being viewed in a
polarised and pyramidal manner. The main objective of defining the place of ESPON
29 in the World is to provide a necessary counterweight to the dominant visions and
perceptions of the research on the World and European networks and cities
dynamics. Indeed, on the one hand, the description of European and World flows

110
leads many researchers to define, between countries or between several regional
blocs, the main roads of international exchange (Dollfuss 1994). On the other hand,
the great majority of existing research in this area seeks to produce knowledge on
the cities or regions themselves, to evaluate their strengths and weaknesses, and to
estimate their growth rates (Sassen 2002). Consequently, this means that a large
majority of studies constantly produced and reproduced urban and regional
typologies. Peter Taylor (2002) denounces the paradox of research on the World
cities in the following way: “Whereas the essence of World cities is their relations to
each other, studies continue focusing on case studies and comparative studies
evaluating patterns within cities and neglecting ipso facto intercity relations”.

During the scientific elaboration of this part of ESPON 3.4.1 “Europe in the
World”, heated internal discussion took place between a group of researchers who
considered that the centre-periphery model (Figure 6) was the most relevant one of
World organisation and that it was possible to define an influence area for Europe or
any other group of countries which utilised the World archipelago model (Figure 7),
which, they argued, better fits the new reality of a World where networks are more
important than territories. It is clear however that the empirical analysis of flows
ultimately presented in this chapter provides different answers to the question of
the best model choice:

• The analysis of economic flows developed in B.1 clearly provides arguments

in favour of the centre-periphery vision of the World.
• The analysis of air flows presented in B.2, on the contrary, clearly supports
the network-archipelago vision of the World.
• The analysis of migration trends presented in B.3 in the main supports the
centre-periphery vision of the World, but also demonstrates that the pattern
of migration is different according the educational level of the migrants.
Migrations of low-skilled workers follow the centre-periphery pattern while
those of high-skilled workers are rather more closely aligned to the
archipelago model.

Considering that both models are complementary, the final synthesis will propose
two different approaches: (1) an “areal oriented approach” which tries to delimit, in
a quantitative manner, a so-called ‘ESPON Influence Area’ in the World and (2) an
“network oriented approach” which tries to elaborate, in a qualitative manner, a
typology of connections between ESPON and the rest of the World

111
 Figure 6: The Centre-Periphery vision of the World

Figure 7: The Network-Archipelago Vision of the World

112
4.2 A functional approach: The Triad and the centre-periphery division of
the World

In opposition to some of the ideas circulated by, among others, major international
institutions such as the OECD, who see in the development of globalization the
expansion of major opportunities for all 24, we would like, on the one hand, to qualify
the globalization process and, on the other, to insist on the hierarchies and
imbalances provoked by this process at a moment where many doubts has recently
emerged against the former “Washington consensus”. 25

4.2.1 ESPON’s Place in the World Economy

It is first necessary to recall some of the major elements of the structure of the
World economy and to evaluate the place occupied by ESPON in this context. From
an historical point of view, let us remember that globalization is a process with a
long heritage, in which Western Europe has played a major role (Wallerstein, 1980,
2002). Since the sixteenth century, the old continent has built the World in
accordance with its own views and interests.

In this first part, we use only the centre-periphery vision of the world and we do not
introduce the alternative vision of world as global cities or archipelago. We consider
in fact several centres, that is to say, the three poles of the Triad (Western Europe,
North America, and East Asia), and peripheries which, per definition, are very
diverse in their structures and forms of dependence.

Centres are characterized by their weight in terms of global production and flows,
and by their social and economic structures as well as their leading role in the World
economy. This is illustrated for example by their position in the World economic
institutions or the location of transnational headquarters.

The concept of centres however only assumes its meaning in the context of the
dialectical relations which take place between the poles of the Triad and their
peripheries: centres only exist through their dominant relation with their
peripheries. These links are characterised, from the trade flows point of view, by a
relation of dependence, on both quantitative and qualitative aspects.

24
As an example, we produce this extract from an OECD publication (OECD observer, Sept. 2001), ”trade is not an
end in itself [….] But it creates jobs. It fosters vital learning processes […] It increases foreign exchange earnings.
Above all, it contributes to generating the resources for sustainable development and the alleviation of poverty.”
25
Joseph Stiglitz (2002), Globalization and Its Discontents (New York: Norton)

113
From the quantitative approach, these imbalances can be observed in terms of the
exclusive relations of the peripheries with their centres, while centres mostly trade
between themselves. This reality is well illustrated by maps 33 & 34: the first shows
the commercial area of influence of ESPON 29, that is to say, the countries that
count for ESPON, while the second shows the areas with which ESPON trades. The
most caricatured example is the one relating to sub-Saharan Africa: while it is of
negligible importance for European trade, the inverse is true for Sub-Saharan
African countries as Europe is vital for the existence of this part of the World.

Map 33: Share of the trade with ESPON 29

114
Map 34: Share of each country in the External trade of ESPON 29

115
 4.2.2: Trade and inequalities

From a qualitative point of view, the imbalance is shown by the types of products
that are exchanged: while centres mostly sell products of high or average
technologies or advanced services, peripheral countries sell low technological labour
intensive products and services (textiles, call centres etc) or primary products.
Figure 8 shows the exchanges between Europe, on the one hand, and North
America, Asia and South America, on the other hand. While the trade with North
America and Asia illustrates the specializations of the different poles of the Triad
(for example chemistry for Europe, office equipment for North America, textiles for
some Asian countries, and machinery for Japan), the trade relation with South
America displays a classical centre-periphery trade pattern, with centres selling
industrial products and the periphery, primary products.

We can draw the conclusion from these analyses that globalization is a very
hierarchical process: while the poles of the Triad are involved in interdependent
relations, the links between the centres and peripheries are marked by the
dependence of the latter on the former. As we have already underlined however,
this does not mean that the periphery as a whole is a vast homogeneous mass. On
the contrary, some countries have been able, or will in future be able, to change
their position in the World economy. Nevertheless, this does not affect the model in
itself if we consider that the gap between developed and underdeveloped countries
has generally been rather stable over the last fifty years. Moreover, some could
argue that in each peripheral country, there are poles strongly connected to the rest
of the World and with an emergent middle class, which in some ways can benefit
from globalization process. As such then, rather than invalidating our model, this
urban bourgeoisie plays an active role in the permanence of the domination of the
centre.

116
Figure 8: External trade of Western Europe by type of product, with North
America, Asia and Latin America (1998-2002), in billions of current $

117
Against some networking approaches, which insist for example on the consideration
of realities such as the importance of the relations between the major poles of the
peripheries (Sao Paulo, Johannesburg, Bangkok etc) and the centres, we would like
to recall that:

o the importance of these links should not be overestimated if one

compares them to the links between poles inside the centre ;
o the centre/periphery approach is a multi-scalar one, that is to say, that
inside the centre and inside the periphery at the World scale, a
geographical structure in centres and peripheries exists at a finer scale,
which implies real processes of domination between poles which are
the decisions and areas that are subject to these decisions.

Finally, we would like to strongly qualify the importance of the globalization process,
particularly for the EU. We have thus made an evaluation of the openness rates 26 of
the three poles of the Triad (for Asia, we only consider Japan). For each of the three
areas, the openness rate is about 14 percent of GDP (table 10). This means that
these economies depend mostly on themselves, since investment is for example a
very regionally-oriented process. In other words, and despite the intense growth of
trade in recent decades the major poles still have relatively closed economies.

Table 10: Openness rate of Europe, USA and Japan

Share of the
Openness rate trade outside the
1996-2000 (%) commercial area
(%), 1996-2000
EU 25 14,1 31,7
ESPON 29 14,3 31,6
NAFTA 13,5 69,4
Japan 17,5 100,0

26
Openness rates are defined by the ratio between the sum of exports and imports and global GDP. This indicator
overestimates the opening of the economies since it compares sales (imports and exports) to added values (GDP).

118
4.2.3: Trade flows and the Triad

Using a variant of the methodology proposed in the preliminary ESPON study on

Europe in the World (ESPON 3.1, FR), we have tried to evaluate for each state the
importance of its bilateral trade flows with each pole of the Triad and with the rest
of the World. The practical problem of the delimitation of states who are members
of the Triad has been empirically solved by using the WUTS level 3 delimitation for
Western Europe (W111) and North America (W211), but not for Asia where Western
Pacifica (W321) has been aggregated with China 27.

The distribution of the economic polarisation of the states of the World by the Triad
reveals a very interesting spatial pattern (Map 35) which does not fit exactly with
the simplistic view of concentric circles of decreasing influence around each centre
of the Triad.

• The most important states located in the cores of the Triad are generally less
polarised by their own region than the smaller states localised in their
immediate neighbourhood. This is obvious in the cases of Japan and the USA
and, to a less degree, in the cases of Germany or the United Kingdom. It is
apparently a simple statistical effect (internal economic relations of these
core-states are not taken into account) but it also reveals a real asymmetry
between this core-states which are more likely to play a role as global
economic actors than the smaller states that they polarised.

• The area of influence of Western Europe in terms of trade is spreads far to

the south, but is clearly limited in an easterly direction (where Russia remains
the major partner for most states created after the collapse of the Soviet
Union) and to a lesser degree a the south-easterly direction, where the oil-
rich states of the Persian Gulf are mainly oriented toward Eastern Asia. This
specificity of oil trade is also visible in Africa where Gabon and Angola are
more oriented toward North America than Western Europe.

• Very important and strategic parts of the contemporary World cannot be

considered as polarised by one of the three poles of the Triad. The former
Soviet Union (with the exception of the Baltic countries which joined the EU in
2004) clearly remains an integrated economic zone. Latin America is now also
beginning to form an area of economic integration (MERCOSUR) and has

27
Normally, we should have included only the coastal regions of eastern China in the definition of the Asiatic core of
the Triad. This is not a major problem however as the majority of China’s international trade is located in these
costal regions.

119
equal trade relations with Western Europe (26%) and North America (24%).
A similar situation can be observed in India where the equilibrium of influence
of each pole of the Triad and the importance of flows with the rest of the
World ensures a situation of strategic independence. The situation is however
rather different in East Africa where Western Europe remains a major partner
(40% of trade) but where trade flows with rest of the World are basically
equivalent, due to a relatively high level of local regional trade between the
Eastern and Southern African countries.

Map 35: Dominant trade orientations 1996-2000

120
 Table 11: Trade between WUTS3 regions and the Triad in 1996-2000
World Unified Territorial System Size Economic orientation
Code Name Billions $ World% W.Eu N.Am E.As Rest
W WORLD 10668 100.0 37 23 18 22

W1 EURO-AFRICA 5003 46.9 60 11 9 20

W11 Europe & Northern Asia 4490 42.1 63 10 8 20

W111 Western Europe 3979 37.3 64 11 8 18
W112 Eastern Europe & Northern Asia 512 4.8 52 6 6 36

W12 Western Asia & Northern Africa 367 3.4 37 14 23 26

W121 SE Mediterranean 152 1.4 56 17 7 19
W122 Middle East & Central Asia 216 2.0 23 12 34 31

W13 Sub-Saharan Africa 145 1.4 41 17 15 27

W131 Central Africa 12 0.1 47 26 12 15
W132 East Africa 16 0.1 41 7 13 40
W133 West Africa 47 0.4 41 20 11 27
W134 Southern Africa 70 0.7 39 16 18 26

W2 AMERICAS 2765 25.9 18 43 19 20

W21 North America 2400 22.5 18 44 20 18

W210 North America 2400 22.5 18 44 20 18

W22 Latin America 365 3.4 22 36 11 32

W221 Central America & Caribbean 159 1.5 16 51 7 25
W222 South America 206 1.9 26 24 13 38

W3 ASIAPACIFICA 2900 27.2 16 23 34 27

W31 Southern and Eastern Asia 1156 10.8 17 21 41 21

W311 East Asia 912 8.5 16 21 44 18
W312 Southern Asia 104 1.0 28 20 17 34
W313 South-East Asia 141 1.3 17 18 35 31

W32 Western Pacifica 1744 16.3 16 25 29 30

W321 Western Pacifica 1043 9.8 16 28 26 30
W322 South-Western Pacifica 550 5.2 15 21 33 32
W323 Oceania 151 1.4 19 18 35 29
NOTES
Definition of Trade areas Specialisation index
W.Eur. EU15, Switzerland, Norway > 1.5
N. Ame. USA, Canada, Mexico 1 to 1.5
E. Asia Japan, S. Korea, China, Taiwan 0.5 to 1
Rest Rest of the World 0.5<
Source: PC-TAS, Completed by ESPON Projects 3.1 & 3.4.1

121
4.3 Networking ESPON 29 through air flows

4.3.1 Re-thinking hierarchies, areas of influence, borders and other

concepts

Several studies underline the fact that today new forms of territorial organisation
and spatial integration 28 are emerging as a result of the spectacular growth in
mobility, rapidly changing transportation networks and the spread of communication
and information technologies. Nevertheless this dynamic phenomenon does not
produce the same effects at either a World level or at the level of ESPON territory.
One cannot therefore understand the processes of territorial integration without first
taking into account the complexity of the spatial integration schemes.

Indeed, World and ESPON territorial integration has often been reduced to two
conventional models: the centre-periphery one, and the hierarchical model of urban
networks. The World or the ESPON space are thereby depicted in one or other of
these two ways: either in terms of strong centres to which peripheral territories
manage to tie themselves to greater or lesser degrees, or of major metropolises in
whose shadow secondary cities lie hidden.

Limiting territorial integration to these two schema means that such integration will
be fragile and limited. The mode of organisation of the World and of the ESPON
territory is in reality much more diversified. On the one hand, territorial organisation
is supported by specialised networks of cities as defined by common patterns of
either material or non-material production, while on the other, territorial
organisation takes place through networks of cities that are either economic or
political capitals. Intensified exchange between these types of city networks is
currently the most dynamic force for territorial organisation operating across the
World space and the ESPON territory. These forms of territorial organisation can be
defined as Metropolitan polycentrism. Freed from the constraints of distance, urban
hierarchies and political boundaries, the spatial integration processes tends to
emphasise the interrelations among cities in a network, and in this way they are the
vectors of a dynamic polycentric organisation of the World as well as the ESPON
space (Cattan, Saint-Julien 1998).

In this section we focus on the analysis of networks and cities that connect ESPON
to the rest of the World. It is a trans-scalar approach which does not work with an

28
Note here that we are referring not to political integration in the context of the EU, but rather to the spatial
integration of the wider ESPON 29 area. The two should not necessarily be conflated.

122
assumption of contiguity (continuous territoriality) but rather with an assumption of
connectivity (discontinuous territoriality). A strong hypothesis is proposed in relation
to the fact that many human activities are not present in all points of a territory but
are concentrated in several specific areas strongly connected to each other. We do
believe, for example, that the new “frontier” of the EU is to be found in several
international gateways cities and not only on the external borders of the EU territory
either at its Eastern limits or at its Southern ones. We also accept the common
notion that the World metropolitan archipelago is not necessary connected to the
states, regions or macro-regions where the metropolitan areas are located.

The analysis proposed here helps us to answer the following question: Is ESPON a
dynamic vector for a polycentric organisation of the World space?

This study opens up a huge avenue into discovering the way in which the World and
the ESPON space are organized vis-à-vis international air flows. Thanks to their
relatively large capacity to adjust to the rigours of supply and demand, the air
network is a very relevant indicator of globalization and is thus one of the best
synthetic indexes of contemporary societal trends. As such, air flows highlight the
way in which current integration processes shape the relations of society to space
and reorganise the territorial structures at different scales.

4.3.2: The conventional approach based on number passengers

In a first step we have tried to analyse air traffic between cities by using the simple
number of passengers in 2000, according to ITA database (see Volume II for a
precise description of the source)

EU: The centre of the international monocentric air network?

The image of the main nodes of international traffic shows the European cities to be
the main supporters of this internationalization process (map 36). In this image, air
traffic draws a World organisation rather monocentrically concentrated on Europe.
The main reason for this is that intra-EU traffic, considered as international (=flows
exchanged by two cities of two different countries), is included in the calculation
whereas intra-US traffic, considered as national, is not. This figure highlights the
fact that definitions of World cities rely very much on the interpretation of the word
“international”.

123
 Map 36: International air traffic

The EU: At the centre of the international polycentric air network….

When excluding intra-EU traffic, the image is more equilibrious, providing a rather
polycentric representation of the World through air traffic networks (Map 37). The
three classical poles of internationalisation (the EU, the USA, and Japan-South
Asia), namely the Triad, appear very clearly. One could again question here the
weight of the JSA area: indeed if we consider for example the ASEAN countries as
one entity as we have done for Europe what would the resulting image be?

124
 Map 37: International air traffic, EU traffic excluded

By focusing on flows in a relational approach to territories, following the concept of

Manuel Castells’ “space of flows” rather than “space of places”, the following figures
attempt to go further showing how Europe is connected to the World system.

EU traffic is the major contributor to the internationalisation of air flows

Charting the major air links on a World level makes it possible to highlight privileged
associations between places. The World air traffic map shows that the majority of
the largest international flows occur in the Northern hemisphere. Major flows go to -
and return from - a few select poles, reinforcing the North-South contrast which is
voluntarily reinforced by the specific cartographic projection chosen in this section.
The main international inter-city flows show that four World interconnection systems
summarize the major international air routes, namely EU inter-city connections
(among the 15 highest flows, 5 are European), South-eastern Asia connections, EU-
US transatlantic city linkages, and trans-pacific city links (Map 38). The World air
crossroads can be identified to coincide with the main metropoles: national capitals,
such as London and Tokyo, or prominent economic capitals such as New York.

125
 Map 38: Major international air flows (intra-EU flows included)

Some other regional patterns of globalisation

Focused on the connections between Europe and the rest of the World, and
considering the EU as one entity (i.e. excluding intra-EU traffic), one can also point
out that several regional connections emerge, as for example between Buenos Aires
and Santiago and Sao Paulo on the one hand and between Mexican cities and Los
Angeles on the other (Map 39). This means that several integration processes at the
regional level are actively engaged in these territorial integration processes at the
global level.

126
Map 39: Major International air flows (intra-EU flows excluded)

127
4.3.3 An alternative approach to the World global network derived from
Tobler’s work

We have seen in the previous sections that the measurement and cartography of
global integration by air flows is highly dependant on the level of political
aggregation. As such, retaining or eliminating internal traffic within the United
States, the European Union or the Western Pacific coastal area introduces crucial
differences in the resulting pattern of the World network of cities. From a theoretical
point of view 29, the problem that we have to faced is then to distinguish between
flows which are really global (i.e. connecting different global integration zones) and
flows which can be better described as regional (i.e. connecting sub-parts of the
World which are strongly integrated and are in practice already global integration
zones). The paradox of the previous section is that (1) we analyse flows in order to
define relevant GIZ but (2) we need to know what the limits of these GIZ’S are in
order to properly analyse these flows. Breaking this vicious circle is possible if we
use an alternative measure of flows as suggested by W. Tobler who argues that a
good measure for the evaluation of flows is not the single traffic (number of
passengers) indicator, but the traffic weighted by distance (number of passengers
multiplied by km) indicator, which is in physical terms the “quantity of work” of the
relation. This is correlated in economic terms with the “total cost” of the relation
and in ecological terms with its “ecological impact”.

The comparison of the top 25 air connections in the World according to the usual
criteria of passengers (table 12) and the criteria of passengers/km (table 13)
indicates that the second solution is probably better when the need is to measure
the global connections established between World cities. For the classical criteria of
passengers, the majority of the connections take place at short distances (less than
5000 km) and are connecting cities located in the same state (USA) or in the same
pole of the Triad (Western Europe, Eastern Asia). On the other hand, for the criteria
of passengers multiplied by distance, we obtain a majority of flows at long distance
(around 10 000 km) which are precisely those that connect the three poles of the
Triad or those which connect distinct parts of a global integration zone (e.g. the
eastern and western coasts of the USA). This criterion is also sensitive to specific
connections that can be established at long distance for historical and political
reasons, as with the connections between the USA and Israel or the connection
between France and its remote territories of the Antilles.

29
The problem that we have to face here is very similar to that of “weak ties” in a sociological network. “Weak ties”
are specific connections which establish “bridges” between clusters of strongly connected individuals. According to
Granovetter, they play a major role in the diffusion of innovations as they do not suffer from redundancy as is the
case for links observed inside a cluster that is highly connected.

128
 Table 12: Most important air flows in 2000 (millions of Passengers)
Rank I j F D FD
1 SEOUL PUSAN 6.0 337 2035
2 NEW YORK FORT LAUDERDALE 5.5 1728 9545
3 TAIPEI HONG KONG 5.5 805 4430
4 NEW YORK CHICAGO 5.3 1145 6025
5 ORLANDO NEW YORK 5.1 1514 7723
6 NEW YORK LOS ANGELES 5.1 3953 20020
7 NEW YORK BOSTON 5.0 306 1533
8 SEOUL CHEJU 4.9 451 2200
9 NEW YORK ATLANTA 4.9 1214 5919
10 WASHINGTON NEW YORK 4.4 346 1528
11 NEW YORK LONDON 4.2 5524 23337
12 LONDON DUBLIN 4.1 438 1790
13 SAN FRANCISCO NEW YORK 3.9 4130 16304
14 MADRID BARCELONA 3.9 484 1885
15 LOS ANGELES LAS VEGAS 3.7 379 1399
16 PARIS NICE 3.4 674 2289
17 LONDON AMSTERDAM 3.2 401 1288
18 OAKLAND LOS ANGELES 3.1 543 1701
19 PARIS MARSEILLE 3.0 628 1877
20 TOULOUSE PARIS 3.0 574 1712
21 PARIS LONDON 2.9 365 1067
22 NEW YORK MIAMI 2.9 1760 5069
23 NEW YORK LAS VEGAS 2.9 3590 10331
24 SAN FRANCISCO LOS ANGELES 2.8 544 1517
25 LOS ANGELES ** CHICAGO ** 2.7 2820 7659

Table 13: Most important air connexions in 2000 (millions of Passengers.km)

Rank I j F D FD
1 NEW YORK LONDON 4.2 5524 23337
2 NEW YORK LOS ANGELES 5.1 3953 20020
3 SAN FRANCISCO NEW YORK 3.9 4130 16304
4 LONDON LOS ANGELES 1.5 8748 12799
5 TOKYO LOS ANGELES 1.4 8809 12435
6 TOKYO HONOLULU 2.0 6187 12364
7 SINGAPORE LONDON 1.0 10903 10938
8 TAIPEI LOS ANGELES 1.0 10895 10666
9 NEW YORK LAS VEGAS 2.9 3590 10331
10 TOKYO LONDON 1.0 9614 10043
11 SYDNEY LOS ANGELES 0.8 12053 9772
12 SAN FRANCISCO LONDON 1.1 8608 9739
13 TOKYO NEW YORK 0.9 10850 9641
14 LONDON HONG KONG 1.0 9670 9602
15 NEW YORK FORT LAUDERDALE 5.5 1728 9545
16 LONDON CHICAGO 1.5 6318 9298
17 PARIS NEW YORK 1.6 5837 9225
18 LONDON SYDNEY 0.5 17038 8984
19 SEOUL LOS ANGELES 0.9 9591 8785
20 TEL AVIV NEW YORK 0.9 9120 8600
21 PUSAN LOS ANGELES 0.9 9604 8563
22 LONDON JOHANNESBURG 0.9 9072 8421
23 TOKYO PARIS 0.9 9733 8358
24 TOKYO CHICAGO 0.8 10141 7857
25 POINTE A PITRE PARIS 1.2 6748 7847

129
The map of global air connections in 2000 established by means of the
passengers/km criteria (Map 40) provides an excellent illustration of the structure of
the network of World cities which appears as an archipelago of cities linked to each
other without consideration of national borders or continents (which have been
voluntarily excluded from the map).

The Western European Archipelago

is clearly monocentric and is
dominated by London which is the most
important international airport in the
World. Amsterdam, Paris and Frankfurt
are also major gateway cities but are in
a sense part of the same cluster as
London. Madrid is a secondary gateway
but with specific connections to southern
and central America.

The North American Archipelago is

clearly organised into two separate
clusters dominated, respectively, by
New-York and Los Angeles. Chicago and
San Francisco are alternative World
gateways of the second level. Miami
plays the same role as Madrid inside
ESPON territory, with specific
connections to Central and South
America.

The East Asian Archipelago is

organised in an axial pattern of gateway
cities dominated by Tokyo, Hong-Kong
and Singapore but with important World
connexions also in Osaka, Pusan, Seoul,
Taipei and Bangkok. If Tokyo and Hong-
Kong are well connected to Europe and
America, Taipei, Pusan and Seoul are
clearly oriented to America while
Singapore and Bangkok are more closely
connected to Europe.

130
Map 40: Global air interactions in the World in 2000

131
 Table 14: Classification of the World Cities according to air connections
in 2000
World Cities National and International Flows International Flows
Passengers/.km Passengers Passengers/.km Passengers
rank % Rank % Rank % Rank %
LONDON 1 13.24 1 10.20 1 16.94 1 15.91
NEW YORK 2 10.95 2 8.99 3 7.97 6 4.60
LOS ANGELES 3 8.53 5 5.60 6 6.77 13 2.85
PARIS 4 7.37 3 6.45 2 9.16 2 8.71
FRANKFURT 5 6.02 6 4.65 4 7.68 3 6.60
TOKYO 6 5.84 19 2.43 5 7.57 8 4.19
CHICAGO 7 5.23 4 6.08 14 3.00 30 1.73
SAN FRANCISC 8 5.22 9 3.54 12 3.26 35 1.38
AMSTERDAM 9 4.50 8 3.78 7 5.84 4 6.47
HONG KONG 10 4.21 10 3.24 8 5.46 5 5.58
SINGAPORE 11 4.03 18 2.52 9 5.23 7 4.34
BANGKOK 12 3.04 26 1.96 10 3.94 10 3.38
ATLANTA 13 3.00 7 4.03 27 1.58 48 0.94
MIAMI 14 2.89 17 2.55 18 2.67 17 2.50
SYDNEY 15 2.71 62 0.85 11 3.52 34 1.46
SEOUL 16 2.54 15 2.68 13 3.08 14 2.77
BOSTON 17 2.52 11 3.05 53 0.86 79 0.60
WASHINGTON 18 2.36 13 2.84 38 1.28 66 0.71
MADRID 19 2.27 14 2.77 17 2.70 12 2.98
PUSAN 20 2.20 28 1.93 15 2.73 22 2.01
LAS VEGAS 21 2.15 12 2.91 180 0.12 292 0.05
OSAKA 22 2.09 44 1.25 16 2.71 21 2.15
SEATTLE 23 2.08 25 2.02 69 0.62 135 0.26
ORLANDO 24 2.05 16 2.59 70 0.57 116 0.33
TAIPEI 25 1.92 38 1.58 19 2.49 15 2.71
ZURICH 26 1.90 27 1.95 20 2.46 11 3.17
HOUSTON 27 1.89 22 2.27 48 0.95 49 0.91
MANCHESTER 28 1.66 36 1.71 21 2.12 16 2.56
DENVER 29 1.63 21 2.28 155 0.15 203 0.13
KUALA LUMPUR 30 1.61 53 1.01 22 2.09 29 1.74

Whatever the criteria used for the evaluation of the size of cities in terms of air
connections (national or international, measured in passengers or weighted by
distance), the ESPON territory appears particularly well connected to the rest of
the World via London (1st rank whatever the criteria), Paris (2nd to 4th rank),
Frankfurt (3rd to 6th rank) and Amsterdam (4th to 9th rank) (table 145). But if
ESPON clearly dominates the top of the list of World cities in respect of air
connections, this is less so when considering the following ranks of cities where
we find a majority of American and Asian cities and very few European ones,
except for Madrid, Zurich and Manchester. This confirms the reality that ESPON
World gateways are efficient but also very concentrated in the Pentagon area.

132
4.4 Demographic flows towards Europe

The main problem that we had to face with the analysis of demographic flows
concerned the shortage of reliable data available in respect of the origin and
destination of migrants. As a consequence, it is not possible to estimate gross
flows and this then hampers the analysis of convergence and divergence,
integration and disintegration, and symmetrical and asymmetrical migration
patterns. It is then, also not possible to propose an equivalent picture of the
World organisation of migrations as in other sections of this part of the report.
We have therefore used a simulation model describing the potential flows of
migration and investments which could be induced by the unequal repartition of
population and wealth in the World (B.4.1). We then referred to the net-
migration data to compare the potential of flows and the observed figures of
migrants (B.4.2), and finally we used the most reliable, but very partial, source
of data on migration flows, the OEDC database, in an attempt to draw a picture
of the origin of migrants from the rest of the World flowing toward the ESPON
space (B.4.3).

4.4.1 Potential demographic & economic complementarities and figures

of net migration

This model of potential demographic and economic complementarities proposed

by C. Grasland (2001) is based on the research on local equilibrium between
allocations of GDP and Population at various scales of spatial interaction. For a
given scale, we define areas with relative accumulations of wealth as compared
to their neighbours which are represented in red and regions with relative
accumulations of population, which are in blue 30. The main assumption of the
model is that the contact between these two types of region can induce either
flows of migration (from “blue” to “red”) or flows of investments and activity
relocations (from “red” to “blue”). According to traditional push-pull theories,
these disparities should, in a free labour market, give rise to high migration from
low wealth/high population growth countries (sub-Saharan countries) to high
wealth/low population growth ones (such as the EU25). This implies that a labour
surplus and low wages in the developing countries will be the determinant factors
behind the migration decisions. In some cases however the mobility of capital
can be the driving force with flows directed in the opposite direction.

30
This model has also been applied to the analysis of internal economic and demographic polarisation inside the
ESPON territory and is explained in the dictionary of tools proposed in the Final Report of ESPON Project 3.1.
133
 Map 41: Push-Pull Factors in 1999

Map 42: Net number of migrants at WUTS4 level 2000-05

134
Considering long distances of spatial interaction (Map 41) (500-2000 km)
provides a simple picture of the ‘push- pull’ factors at the World level which fit
very well with the actual trends of migration and FDI. The three attractive poles
of the great Triad are clearly visible (Japan, Europe and North America) as are
their equivalents of the ‘little Triad’ in the southern hemisphere. Those poles
appear as very attractive for migrants. One can also note the potentially highly
attractive area formed by the Gulf’s oil-rich countries. The net migrations (map
42) in 2000-05 at the WUTS 4 level confirm, to a certain extent, the model of
potential migrations. Europe is, together with North America, the main
immigration destination of the World. Some differences in intensity and some
exceptions and particular cases have however to be underlined. The main pole of
attraction, according to the model, should be Japan. However one can observe
that the major net-migration poles are the USA and Southern, West-Central and
Northern Europe. Japan seems to have relatively few migrants, due to migration
laws and historical and geographical particularities of the region (high densities).
The potential map is however confirmed in Japan by the fact that the country is a
great exporter of FDI to China and to the other countries of Western Pacifica.
What is striking too is that despite parts of South America, South East Asia and
Africa (South Africa), appearing as potentially attractive, they are actually net
senders of migrants, or receive few migrants. Moreover, a highly unlikely zone,
from a migration potential point of view, namely, Central Africa appears to have
a positive net number of migrants, probably as it borders m conflict zones such
as those of the Democratic Republic of Congo (in the South), Rwanda (in the
East) and the Sudan (in the North East).

Considering interactions of a rather short distance (250-1000 km) in the

Euro-Mediterranean area, we can observe a relatively more complex picture of
the complementarities in economic and demographic terms (Map 43). The two
main (potentially attractive) poles for migrants (and emissive poles) for capital
and investments) are North Western Europe and the Persian Gulf. The net
migration map 44 confirms that they are indeed the main poles of net
immigration observed in the region. The high number of net migrants in
Southern European countries (Spain and Portugal) is striking as in the 1950’s
they were net-exporters to the rest of Europe. 31 Southern Mediterranean
countries (Morocco, Algeria, Tunisia and Egypt) and the Eastern European ones
shown as potential senders are effectively net emigration countries. For each
space the possible impact of this migration is quite different. In the first case
migration is related to the growing population and in particular to the many

31
We must note here that an important part of the migrant in those countries come from Latin America (long
distance spatial interaction but short cultural distance). In addition, much of the immigration currently
experienced by Spain via the Canary Islands is transitory, with migrants often aspiring to move on to other
European countries. This is something that is specifically addressed in the Dublin Convention. (See: Official
Journal C 274, 19.09.1996).
135
young people without work. In the second case, net emigration correlates more
to the low fertility rate and even to decreasing population rates in the case of the
Ukraine, which could worsen the demographic situation.

Map 43: Push-Pull Factors in 1999 in Euro-Med Area

Map 44: Net number of migrants in Euro-Med 2000-05

136
4.4.3 Migrations toward the ESPON space

4.4.3.1 Historical Migration pattern

The migration pattern within Europe and even the migratory flows towards
Europe after Second World War can be divided into four phases. The first phase
was characterised by “forced migration” as a consequence of the war. The
second was more of a redistribution phase as a consequence of differing labour
market conditions particularly in respect of the movement from the Southern to
the North-western countries in Europe. The slow-down in the European economy
also resulted in a slow-down in the demand for imported labour and the labour
market related migratory movements began to decrease. As such, refugee
migration subsequently increased in importance and, by the middle of the 1980s,
labour market related immigration had almost disappeared even if family reunion
migration continued to grow. The fourth period was characterised by the
migratory effects of the collapse of the Soviet Bloc and the upheaval of the
former Yugoslavia. Both cases resulted in significant migratory movements with
an impact on the demographic development and the demographic structure in
both the origin and the destination countries.

4.4.3.2 Origin of flows toward ESPON

Map 45 shows the country of birth of migrants living in the ESPON countries at
the end of the 1990s. Migrants have come to ESPON countries from nearly all
parts of the World. Only the Central Asian and Central American countries have
very low numbers of migrants in the ESPON space, not only because they are not
highly populated, but also as the flows of migrants from those areas are probably
attracted respectively by Russia and North America. Concerning the flows toward
ESPON, two main spaces can be identified as source of migrants: the Maghreb
countries (Morocco, Algeria and Tunisia) and Balkan countries plus Turkey, i.e. all
countries in very close proximity to the European Union

It must, however, be kept in mind that the 1990s was an exceptional decade in
respect of upheavals, wars and other catastrophic situations that had impact on
these migratory movements. The collapse of the Soviet Bloc and the war and
turmoil in the Balkans, which brought about the dissolution of Yugoslavia, were
only some of the events that shook the World and resulted in both human
catastrophes and increasing refugee migrations. It was, however, not only the
turmoil in the former Yugoslavia and the breakdown of the Soviet Bloc that
contributed to selective migratory movements.

Colonial ties continued to have an impact on the origin and destination of these
migrants. This was not a new phenomenon but together with the new migration
137
patterns alluded to above it probably accentuated the choice of Western Europe
as a destination and more, as the destination for many of the World’s migrants
Colonial ties explain the migration from South Asia (mainly towards the United
Kingdom), from Southern America (towards Spain and Portugal), and from the
Maghreb, Sub-Saharan Africa or the former Indochina toward France.

Map 45: Origin of migrants in ESPON according to their country of birth

138
4.4.4: What is at stake concerning the migration flows toward Europe?

4.4.4.1 Migration, the prime driver behind the population change

As a consequence of the slowdown in fertility rates – for most of the European

countries below the reproduction rate today – migratory movements and then
inflows of people have been even more important for population development
than before. Many western European countries would have had a negative
population development without the immigration surplus. Foreign-born people
contribute to the population development in two broad ways – one by
immigration and the other by natural population increase. The second can then
be divided into two other parts – higher fertility rates among foreign-born
women and a more positive age structure from a reproduction point of view.
Without migratory flows towards Western Europe the “population crisis” would be
even worse than it is today. The continuously rising share of females among
migrants also ought to have positive effects on population development. There
seems, however, to have been a change in the motives among the female
migrants – from being “passive players” accompanying their husbands to a
situation where they are now, more or less, migrants on their own account.
Increased family reunions have also contributed to this rise in the female share
among migrants in the developed countries and the social and economic situation
for women with access to significant educational and employment opportunities
has also stimulated female migration to Western Europe and Northern America in
particular. 32 The higher share of female labour migrants may perhaps counteract
the effects of family reunification but the rising female share ought to have
positive effects on natural population change. So, in this case increased
immigration may possibly result in higher fertility rates and a rising population.

4.4.4.2 Territorial polarisation

The most accentuated migration pattern is however the huge flows – and then
redistribution of people – within Europe, which seems to have a huge impact on
the population development and polarisation processes. From other studies it
seems obvious that West Central Europe was the “winner” and the peripheral
areas the “losers” here. 33 These migratory flows from the peripheral areas to the
central ones were more often than not characterised by asymmetrical rather then
symmetrical flows. This is valid both concerning the amount of people and the
structure of the migrants. There are signs that many of the immigrants to ESPON
from other parts of the World contributed to the polarisation process while also
stripping many regions of highly qualified people.
32
Zlotnik, 2005
33
See e.g. ESPON 1.1.4, “Spatial effects of demographic trends and migration”
139
Box 3: Labour Mobility and educational levels

No common labour market currently exists at World scale – not even in Europe and its
surrounding areas - and there is still a long way to go before this point is reached. This
implies, therefore, that the following reasoning will be very hypothetical. According to
traditional ‘push-pull’ theories, economic disparities should, in a free labour market, give
rise to high migration from the low-income countries to high income ones. This implies
that labour surplus and low wages in the developing countries determine migration
decisions. Moreover, the high wages in the developed countries further stimulate this
labour mobility process.

However, according to the segmented labour market theories, these workers are
demanded neither in the private nor in the public sectors in the EU. The transformation
of the European activity structure in a post-industrial direction has reduced demand for
traditional blue-collar workers. Instead, there has been rapid employment growth in the
service sectors, especially the upper segments related to the knowledge economy. One
result of this transformation process is the looser connection between the business cycles
and labour force migration from the second half of the 1970s and 1980s. During these
years, migration was a function of political events in other parts of the World and, since
the beginning of the 1970s the majority of immigrants have been refugees working in the
lower segments of the economy where the educational level is low. The structural
transformation of the European economy changed the employment opportunities for
immigrants. Instead of blue-collar work in the goods-producing sector, immigrants are
now predominantly employed in the lower segments of the service sector. As a
consequence of the structural transformation of the European economy, the push factors
are now stronger than the pull factors concerning these immigrants. This has also
resulted in a change in the employment structure, with a large share of the immigrants
working in jobs refused by the domestic labour force – the 3D jobs, “dirty, dangerous
and degrading”.

Looking at figures 9 & 10 provides evidence that the migratory fields are not
homogeneous in terms of the qualifications of the labour force, both in respect of
countries of origin and countries of destination.

♦ Concerning countries of destination (B.4) the highest levels of education are

observed for migration toward northern Europe (Sweden, Norway, the UK, Ireland)
and to a less degree toward central Europe (Germany, Switzerland, Luxembourg,
Slovakia, and Hungary). The lowest levels of education are observed on the
contrary for migrations toward south-western Europe (France, Spain, Italy, and
Portugal).

♦ Concerning countries of origin (B.5) the highest levels of education are observed for
migrants coming from Asia, the Middle East and Eastern Europe. The lowest level
are observed for migrants coming from southern Europe, the Maghreb, the Balkans
and Turkey.

This pattern suggests that immigration cannot have the same economic impact in all
ESPON countries but that it is important to keep in mind the fact that immigrants does
not necessarily stay in their country of arrival and that what is therefore at stake is the
elaboration of a global migratory policy at the EU level.

140
Figure 9: Repartition of migrants according to their education level and their
country of residence in 2000

Figure 10: Repartition of migrants according to their education level and their
WUTS of origin in 2000 (neighbouring countries).

141
4.5 An attempt to delimit the ESPON 29 “influence area” or “relational
networks” in the World

The analysis of air, trade and migratory flows presented in previous sections
suggests the possibility of identifying a so-called “area of influence” of ESPON 29
in the World as requested in the T.o.R. It also suggests that it is perhaps better
to speak of the “relational network” of ESPON 29 in the World and to admit that
the results should not necessary be a continuous area organised in concentric
circles. This synthetic exercise is based on 4 groups of criteria which try to
provide the most complete view in accordance with the statistics available (table
15)

4.5.1 The choice of criteria

♦ Accessibility is a basic condition for the development of relations of any type. But the size
of places is also important in the development of such relations. An important population is
more likely to spread itself across the World (e.g. the Chinese diaspora) than is a small
human group while a large economy is more likely to develop networks of relation all over
the World (e.g. Transnational Firms). We have therefore decided to propose three measures
of potential influence in respect of ESPON 29 weighted by area, population and GDP in 1999.
We have completed these measures of accessibility by the criteria of existence of a common
land border or a short distance maritime border.
♦ Networks define another condition for the development of relations based on the existence
of a common language (official or not) or a common history (ancient or recent). A common
history is frequently associated with former colonial relations with countries which have been
dominated by ESPON 29 states (e.g. France in Africa) or which have dominated ESPON 29
states (e.g. Turkey in Balkans) and is not necessary associated with friendship-type
relations. But, even in the case of conflict, it is a form of knowledge that has been
established between different parts of the World and can be used in current circumstances.
♦ Interactions are effective relations established in the present but also defining further
relations in the future. In terms of “influence”, the simplest way here is to evaluate the share
of ESPON 29 in international air or trade flows of each country of the World. But an
important share is not necessary associated with a high intensity of relations. It is therefore
necessary also to measure the effective influence of flows with ESPON 29 in respect of the
economy (Trade / GDP) or on society (Air flows / population).
♦ Complementarities are both the cause and consequence of flows. The differences in
development measured by the three components of HDI (life expectancy, education and
GDP) and by the level of population ageing (median age) have been introduced as factors
defining different degrees of the structural asymmetry between ESPON 29 and the other
states of the World. We assume that states which are less developed than Europe but with
younger populations are likely to develop fruitful relations of complementarity with ESPON 29

142
in the future, which is not true in the case of states with equivalent levels of development
and ageing.

143
 Table 15: Delimitation criteria for the ESPON 29 Influence Area
CODE Definition Source Year

Weight factor
POPTO99 Population, total (inh.),1999, (SP.POP.TOTL) WDI 1999

Accessibility Criteria
A_GDP Contribution of ESPON29 to potential of GDP pps 1999 WDI+CEPII 1999
A_POP Contribution of ESPON29 to potential of Population 1999 WDI+CEPII 1999
A_SUP Contribution of ESPON29 to potential of Area WDI+CEPII 1999
A_BO1 Existence of a common land border with ESPON29 CEPII 2000
A_BO2 Existence of a common maritime border with ESPON29 RIATE 2005

Network Criteria
N_LA1 Share with ESPON29 at less one common official or national CEPII 2000
languages and languages spoken by at least 20% of the
population of the country
N_LA2 Share with ESPON 29 at least one language (mother tongue, CEPII 2000
lingua franca or second languages),
spoken by at least 20% of the population of the country.
N_CO1 Colonizers or colonised by at less one ESPON29 country for a CEPII 2000
relatively long period of time and with a substantial
participation in the governance of the colonized country.
N_CO2 idem, but with colonial relations still active in 1945 CEPII 2000

Flows Criteria
F_EXP Ratio between observed and expected exportations toward PC-TAS 1996-2000
ESPON29 (under the assumption of random allocation of
trade flows according to capacity of import and export of
World states)
F_IMP Ratio between observed and expected importations from PC-TAS 1996-2000
ESPON29 (under the assumption of random allocation of
trade flows according to capacity of import and export of
World states)
F_AIR Ratio between observed and expected air flows with OACI 2000
ESPON29 (under the assumption of random allocation of air
flows according to total sum of air relations of each state)
F_TRA Intensity of trade flows with ESPON 29 measured by the ratio PC- 1996-2000
between bilateral trade flows 1996-2000 and GDP pps 1999 TAS+WDI
(normalised to 1)
F_AIR2 Intensity of air flows with ESPON 29 measured by the ratio ITA+WDI 2000
between bilateral air flows 2000 and population 1999
(normalised to 1)

Dissimilarity Criteria
S_LIF Ratio between HDI life component of ESPON29 and HDI HDR 2002
Life component of the state
S_EDU Ratio between HDI Education component of ESPON29 and HDR 2002
HDI Education component of the state
S_GDP Ratio between HDI Economic component of ESPON29 and HDR 2002
HDI Economic component of the state
S_AGE Ratio between median age of population of ESPON29 and UNPP 2002
median age of population of the state

144
4.5.2. An index of the global influence of ESPON 29 in the World?

A Principal Component Analysis applied to the 18 criteria defined in previous

sections has revealed the existence of a 1st Component which is correlated with
all the criteria and with the expected sign. This first component thus defines an
index of global influence of Europe which is positive for states which (1) have
good accessibility to ESPON 29 (2) share a common language and a common
history with ESPON 29 (3) are strongly dependant on ESPON 29 for trade and air
flows, and (4) are less developed in economic and social terms than ESPON 29
but have younger populations (map 46). Of course, all of the criteria are not
necessary fulfilled by any single state but a positive sign on this component
indicates that a majority of the conditions are available while a negative sign
indicates the contrary.

The influence level of the ESPON 29 space is clearly at its maximum value in the
Balkans, Turkey, northern Africa and in the north Atlantic (Iceland and
Greenland) (table 16). It remains very important in Western Africa and Russia
and rather important in the rest of Africa and the Middle East (except for the
Persian Gulf). In terms of the medium value of influence, we observe interesting
developments in relation to states such as Brazil, India and Iran. In the rest of
the World, the potential influence of ESPON 29 is low (South America, Central
Asia, the Persian Gulf) or very low (North America, South -East Asia, and
Oceania). The minimum level of influence is however reached in Eastern Asia for
countries like Japan, China, Korea, Thailand and Mongolia.

The use of the word “influence” for the qualification of this index is a little
ambiguous as it suggests a relationship of geopolitical domination where several
distinctions can be made, for example between ‘hard’ and ‘soft’ power. 34 It is
certainly true that the strong asymmetries which characterise the relationships
between the ESPON countries and the neighbouring countries of Balkans, Turkey
and Northern Africa can support this idea of power and domination. Asymmetries
can however also be considered as vectors of complementarities and it seems to
us better to use the word “functional integration” for the qualification of what is
really measured by this index. It is moreover perhaps a little politically incorrect
to speak of integration of these new countries into the EU, even if it is from a
‘functional’ rather than a political point of view. Nevertheless, our results clearly
indicate the geographical direction that should be taken to further elaboration the
Neighbourhood Policy and where those situations where the European Union
could perhaps seek to develop stronger partnerships.

34
For an interesting discussion of the similar situation in respect of the USA see J S Nye, Bound to Lead –The
Changing Nature of American Power, New York, Basic Books 1991. In particular, note his apposite discussion
of the difference between what he terms, ‘hard’ and ‘soft’ power. The former entails getting people to do what
you want them to do, while the latter involves getting them simply to want what you want.
145
 Map 46: Global influence area of ESPON 29 in the World

Table 16: Maximum and minimum values of ESPON 29 Influence

Maximum influence of ESPON 29 Minimum Influence of ESPON 29

Rank Score State Rank Score State
1 9.36 Croatia 1 -3.19 Japan
2 9.12 Iceland 2 -3.14 Taiwan
3 8.90 Tunisia 3 -3.01 North Korea
4 7.93 Serbia/Montenegro 4 -2.85 Korea, Rep. of
5 7.92 Albania 5 -2.46 China
6 7.46 Macedonia, TFYR 6 -2.31 Thailand
7 7.19 Morocco 7 -2.08 Bhutan
8 7.15 Turkey 8 -2.02 Mongolia
9 7.12 Algeria 9 -1.59 Myanmar
10 7.12 Greenland 10 -1.56 El Salvador
11 7.09 Libyan Arab Jamahiriya 11 -1.51 Uruguay
12 6.38 Liberia 12 -1.51 Mexico
13 6.00 Bosnia-Herzegovina 13 -1.46 Australia
14 5.62 Sierra Leone 14 -1.46 Philippines
15 5.06 Russian Federation 15 -1.44 Indonesia

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4.5.3 Heritage as a determinant factor of relations

The index of global influence of ESPON 29 in the World was based on the 1st
component of a Principal Component Analysis which summarise only 34% of the
information on the 18 criteria. The detailed analysis of results revealed the
existence of 2 others significant components which reveal different patterns of
relation in respect of ESPON 29 with the World which are related to the issue of
heritage.

• The exploitation of the Third World countries by European colonial

empires clearly defines a second component of the analysis (24% of
information) which is characteristic of countries with low or very low levels
of development, young populations and common languages with Europe
(French, English, Spanish, Portuguese etc) inherited from the colonial
period (map 47). This situation is typically observed in sub-Saharan Africa
where the official breakdown of colonial links took place very late, after
the Second World War, and where the influence of Western European
states remained strong even after independence. Indeed, official political
domination was in many cases simply replaced by informal political and
economic networks of influence which maintained the exploitation of these
territories – often termed ‘neo-colonialism’. This situation can also be
observed, though to a less important degree, in Southern Asia and in
Central and the northern part of South America. In terms of migration this
countries are typically potential providers of low-skill labour to ESPON.

• The existence of cultural networks linking Europe with territories

of historical emigration defines the third component of the analysis
(12% of information) (map 48). It is characterised by countries which are
generally at the same level of development as those of ESPON 29 (North
America, Australia, New Zealand etc) or which have experienced important
progress in human development and are located around or above the
World mean (South America, Southern Africa etc). These countries are no
longer ‘dominated’ by ESPON but nevertheless remain strongly connected
by common language and common history defining what can be called
“cultural networks”. As a result, these countries are actually well
connected to Europe by air flows, despite the fact that they are generally
located far from the core ESPON 29 area. In terms of trade relations, they
are not in the main oriented towards ESPON 29 but they are important
partners, generally with a balance that favours the ESPON 29 countries. In
migratory terms, these countries are characterised by the movement of a
highly-skilled labour force in both directions, from or toward ESPON 29.

147
Map 47: The colonial heritage of ESPON 29

Map 48: Cultural Networks of ESPON 29

148
4.5.4 A strategic typology of ESPON 29 relations with the World

A cluster analysis was then finally applied to the 18 criteria of ESPON 29 relations
with the World in order to define synthetic types combining all of the information
revealed by the Principal Component Analysis. Seven clusters of states were
identified were then rearranged into 4 strategic types for ESPON 29 external
relations (map 49).

Type A: Functional Integration: This situation is characteristic of those states

located in the immediate neighbourhood of ESPON 29 and which share a
common terrestrial border (type A.1) or are separated by a very short maritime
distance (type A.2). The eastern neighbours (Russia, the Ukraine, Belarus, and
Moldova), the Balkan countries (Croatia, Bosnia, Serbia, Macedonia, Montenegro,
Albania, and Turkey) and the southern Mediterranean countries (Morocco,
Algeria, Tunisia, Libya, Egypt, Syria, Lebanon) are all characterised by a very
strong polarisation of their trade and air relations toward Europe, despite the fact
that they do not necessary share the same language or the same religion and
that they have historically often been in conflict with ESPON 29 countries.
According to Bopda (2003) the problem of functional integration is particularly
crucial and a source of conflict in this situation where a discrepancy exists
between physical proximity and mental distance between social groups. The
asymmetry of relations between the European Union and its immediate
neighbourhood is a source of conflict but, at the same time, these conflicts are a
factor of functional integration in the long run according, for instance, to
Simmel’s analysis of the concept of the Stranger. The specific strategies utilised
by ESPON 29 in respect of this area are further developed in following chapter.

Type B: Historical Responsibility: In the case of the sub-Saharan African

countries (except those of the southern part of the continent, which belong to
another type); ESPON 29 has a clear responsibility for the future development of
this part of the World. In addition to their historical responsibility for colonisation
and for the exploitation of the African countries, the ESPON 29 countries also
have objective reasons to engage in a strong and voluntary policy of cooperation
and development with this part of the World. With a very young population and
an important rate of natural increase, the countries of sub-Saharan Africa will
increasingly be the main sources of emigration towards the rich and ageing part
of the World.

The European Union is currently active in developing a strategy of protection

against these south-north migratory flows which cross the Sahara and try to
reach Europe through the gateways of the Canaries, Ceuta & Mellila, Lampedusa,
and Gibraltar. Indeed, this migratory pressure is generally considered a threat,
and the northern African countries are more or less obliged to play the doubtful
149
role as the border guards or gatekeepers of fortress Europe. In 20 or 30 years
however, these countries will probably be engaged on the same path of
development as that currently experienced by the countries of northern and
southern Africa and, as such, could be among the most dynamic parts of the
World. At this moment, where ageing will be generalised all over the World,
Africa could become a major centre of World production and its young population
will provide many an opportunity. The ESPON countries should not overestimate
the strength of their actual influence in Africa and as such could find strategic
advantage in the reinforcement of its historical relations with these in a more
equilibrious, and fairer manner than was previously the case.

Type C. Opportunity: States located at long distances from ESPON but sharing
a common language and a common history are particularly important in a global
World where services represented the major part of ‘added value’ and where
scientific and cultural innovation are a major factor in long term development.
Such links are actually well developed with highly developed countries such as
the USA, Canada, Australia and New Zealand. But they could certainly be more
developed with Latin America (Brazil, Argentina, and Chile), Southern Asia
(India, Pakistan, and Bangladesh) and Southern Africa, all of which are
particularly dynamic from an economic, scientific and cultural point of view.
These emerging states could thus become important partners for ESPON 29 in
the World because they are actually relatively independent from the major poles
of the Triad and are keen to develop autonomous strategies of development. The
European Union is often seen as a model by these countries, in particular in
terms of its political construction.

Type D. Challenge: States located on a great diagonal running from Sudan to

Arabia, Iran, China and Japan define that part of the World where the ESPON 29
countries are significantly less able to have an influence or to easily develop
relations because of differences in language, geographical distance, or the
weakness of historical relations. But it is precisely this area in which the majority
of the ESPON media and, by extension, the policy-makers actually focus most of
their attention because of the location here of the most important energy
resources (oil and gas in Persian Gulf and Central Asia) and the most dynamic
economies (China, Korea, Taiwan, etc). In economic terms, this diagonal is
globally in a stronger position than the European countries in respect of most
criteria and has a regular positive balance in its trade exchange with ESPON.
Both private and public actors from the ESPON countries regularly fight to be
present in this part of the World and invest a significant amount to simply be
“present”. We have here a major subject of debate inside the European Union
because, in the perspective of growing political integration, We can really
legitimately ask whether this is really a rational strategy in the long term for
European states and companies to invest economically so much in the part of the
150
world where they are politically so weak. It probably benefit some transnational
firms and financial investors looking for higher profits in the short term, but it is
probably not in the interests of ESPON societies to let their resources flow
towards an area that will clearly remain outwith their area influence and one
which in the main is, or in the future will become, organised and defined by the
competition between the other global players (China, the USA, Russia, and
Japan).

151
Map 49: Typology of ESPON 29 influence in the World

152
4.6 CONCLUSION

4.6.1 Towards a strategic vision of the ESPON 29 space in the World?

The elaboration of (1) a global index of proximity with ESPON 29 and (2) a
typology of proximities linking ESPON 29 with the World will hopefully prove to
be a major tool for the development of a strategic vision of the situation of
ESPON 29 in the World, ultimately with the potential for it to be applied to many
topics (education, trade, research and development etc). As a very simple
example of the usefulness of this tool, we will analyse the asymmetry of the
trade balance of ESPON29 with the rest of the World during the period 1996-
2000.

With an annual average of US $690 billions in exports and US $647 billions in

imports, the 29 countries of the ESPON area experienced a global deficit of US
$42 billions per year during the period 1996-2000. This deficit is primary related
to oil and gas imports (which are paid for in US dollars), while ESPON also
experiences a generally negative balance with other countries exporting energy
such as Russia (US $22 billions ), Libya (US $6 billion), Algeria (US$3 billion),
Saudi Arabia (US$2 billion), Iraq 35 (US $2 billion), Nigeria (US $2 billion), Iran
(US $1 billion) and Cameroon (US $1 billion). The importing of oil and gas are a
major concern for European external policy and it is important to observe that
the majority of sources of energy for Europe are located in its direct
neighbourhood, with a major challenge related to the case of Russia. If we
exclude this particular question of energy, we notice however that the balance of
trade relations with the rest of the World is clearly influenced by the global factor
of influence that we have already identified (Figure 11). A significant positive
correlation can be identified between the level of influence of ESPON 29 and the
positive or negative equilibrium of trade flows. Countries with high scores of
proximity generally have a trade balance in favour of ESPON while the contrary
situation is observed for remote countries without important links of any type
with the ESPON 29 space, in particular in East Asia and Western Pacifica.

The aggregation of trade balances in accordance with the typology of proximities

with ESPON 29 (table 17) indicates that the relations with integrated countries
(type A) are globally in equilibrium (slightly negative) as the deficits in respect of
energy are balanced by the export of other manufacturing goods. In the case of
sub-Saharan countries (type B) we can also see a slightly negative equilibrium
but with a very low volume of exchange. The countries described as ‘opportunity
based’ because of historical links (type C) are the most favourable for ESPON

35
Note, after a decision taken by Saddam Hussein in 2000, Iraq subsequently became the first country to sell its
oil in Euros rather than dollars.
153
countries which obtains a positive balance with them, primarily related to the
good performance in respect of exports to the Americas. The situation is clearly
more difficult with countries such as India (type C.2) which currently export
more than they import in their trade relations with ESPON 29. In the case of
those countries described as ‘challenging’ because of weakness across all forms
of proximities (type D) the balance of trade is strongly negative and ESPON 29
records major deficits which are generally not related to the energy market.

Figure 11: Correlation between trade balances and the global influence
of ESPON 29

N.B. Countries that are mainly oil exporters are excluded

Table 17: ESPON 29 trade with the rest of the World by type of proximity
Type of Trade flows of ESPON 29 in 1996-2000 Asymmetry
proximity (in billions of US $ / year)
with ESPON 29 Import Export Volume Balance /Volume
A : Integration 101 93 194 -7 -4%
A1 : Ukraine 67 62 128 -5 -4%
A2 : Tunisia 34 32 66 -2 -4%
B Responsibility 19 16 35 -3 -9%
C : Opportunity 310 364 674 55 8%
C1 : India 16 13 29 -3 -9%
C2 : Brazil / USA 294 351 645 57 9%
D : Challenge 260 174 433 -86 -20%
D1 : Vietnam 31 20 51 -11 -22%
D2 : China / Japan 228 154 382 -75 -20%
Total 690 647 1337 -42 -3%
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4.6.2 Policy recommendation: Aid Flows and Millennium Objectives

Europe has an important external role to play in the world. The Gothenburg
European Council of 2001 recognized the external dimension of EU policy and
practices as crucial in attaining sustainable development. As the countries of the
European Union are included in the developed world, they have a special
responsibility to support the further development of the least developed
countries (LDCs). They also have a collective responsibility to uphold the
principles of human dignity, equality and equity at the local level and in
particular to ensure that “globalisation becomes a positive force for all the
world’s people” 36

The Millennium Development Goals (MDG) (table 18) adopted by the countries of
the United Nations in 2000 specifies eight ambitions goals. At present most of
them are far from being achieved (UNFPA, 2003). The MDG #8 – “A global
partnership for development” – is particularly focused on reforming aid and trade
with special treatment for the LDCs and on reducing debt. Thus this final goal
can be seen as a one of the means by which all other seven goals could be met.

Development aid flows are a pillar of MDG #8 and an area where the European
Union has taken on a special role. The European Council agreed, on the basis of
a Commission proposal, to double aid to developing countries between 2004 and
2010, and to allocate half of it to Africa. By making this commitment, the EU is
likely to reach the UN target of allocating 0.7% of its GNI to development aid by
2015. The EU is well placed for such work as the largest donor of development
aid (55% of global ODA), the largest trading partner for the developing countries
and a major source of direct private investments. 37

4.6.2.1 Making aid flows work

In light of the volume of aid flows from Europe to the developing world,
international aid, while effective, is also seen as a potential weapon to fight
poverty that is “underused, inefficiently targeted and in need of repair” (UNDP,
2005). In order for aid to be effective three conditions must be met:
1) Aid must be adequate enough to spark human development,
2) It must be cost-effective with low transaction costs,
3) Recipient countries must have primary responsibility for its use. Aid must
be untied.

36 United Nations General Assembly resolution A/res/55/2

37 “Towards a global partnership for sustainable development (2002). COM (2002) 82 Final, Brussels 31.3.2002.

155
 Table 18 : The Millennium Development Goals
Goal
Eradicating extreme poverty and hunger
Achieving universal primary education
Promoting gender quality and empowering
women
Reducing child mortality
Improving maternal health
Combating HIV/AIDS, malaria and other
infectious diseases
Ensure environmental development
Building a global partnership for
development
Source: UNFPA (2003) Achieving the millennium development goals. Population and Development strategies
n°10. United Nations Population Fund
Target
• Halve, between 1990 and 2015 the proportion of people
whose income is less than one dollar a day
• Halve, between 1990 and 2015 the proportion of people
who suffer from hunger
• Ensure that, by 2015, children everywhere, boys and girls
alike, will be able to complete a full course of primary
schooling
• Eliminate gender disparity in primary and secondary
education preferably before 2005 and in all levels of
education no later than 2015
• Reduce by two-thirds, between 1990 and 2015, the under-
five mortality
• Reduce by three-quarters, between 1990-2015, the
maternal mortality ratio
• Have halted by 2015 and begun to reverse the spread of
HIV/AIDS
• Have halted by 2015 and begun to reverse the incidence
of malaria and other major diseases
• Integrate the principles of sustainable development into
country policies and programmes and reverse the loss of
environmental resources
• Halve, by 2012, the proportion of people without
sustainable access to safe drinking water and basic
sanitation
• By 2020, to have achieved a significant improvement in
the lives of at least 100 million slum dwellers
• Develop further an open, rule-based, predictable, non-
discriminatory trading and financial system
• Address the special needs of the least developed countries
• Address the special needs of landlocked countries and
small island developing States
• Deal comprehensively with the debt problems of
developing countries through national and international
measures in order to make debt sustainable in the long
term
• In co-operation with developing countries, develop and
implement strategies for decent and productive work for
youth
• In co-operation with pharmaceutical companies, provide
access to affordable, essential drugs in developing
countries
• In co-operation with the private sector, make available the
benefits of new technologies, especially information and
communications
156
Providing sufficient aid to developing countries is obviously not enough. The
goals of cost-effectiveness and the ownership of aid initiatives are crucial.

The EU, in the 2005 revision of the Cotonou Agreement from 2000 supports
initiatives on the untying of aid; in particular in the framework of ACP (Africa,
Caribbean and Pacific) cooperation. Tied aid is aid where the provision of supplies
and services provided by the donor country is contingent upon the purchase of
donor country products or services. Former European Commissioner for External
Relations Chris Patten, in a public addressed reiterated: “Tying aid runs counter
to the internal rules on the free movement of goods and services”. 38 Untying aid
would thus boost the effectiveness and impact of EU aid flows.

Achieving cost-effective aid with low transaction costs is an unwieldy task in light
of the heavy bureaucracy that often characterises some of the governments of
the LDCs as well as the donor aid agencies. Corruption within some of the
developing country governments and ‘unofficial’ transfers of aid into the informal
market is also a risk with poorly managed aid flows.

Private aid and remittances from abroad are sometimes seen as a good way to
avoid the bureaucratic jungle that can characterise ODA. Many studies have
shown that the transfer of money by immigrants from developing countries to
Europe is generally higher and more efficient than the official transfer of money
from rich to poor countries. The common conclusion is that opening European
borders to people from Less Developed Countries may be a more efficient way in
which to help them. Alas, this conclusion is misleading: development aid is
generally used for investment in infrastructure and social overhead capital, while
remittances from family members abroad are used for private consumption and
investment in family property.

Although remittances are a very important source of capital for developing

countries, foreign direct investment (FDI) is still the most important source of
capital. Aid, investment, development programmes and remittances are not
supplementary, but rather complementary. In practice however it may be
difficult to distinguish between private remittances, whether from family
members or private donors, and private investment, the fruits of which may not
always be transparent in the recipient countries. While private investments
certainly have a place in achieving the millennium goals and in encouraging
development, it is important to be able to distinguish between investment, trade
and aid in order to achieve cost-efficiency and evaluate the impacts of each.

38 Address by Chris Patten, European Commissioner for External Relations. Europe in the World: CFSP & its relation to development. ODI, 7 Nov 2003, p.4

157
4.6.2.2 More impact for the money

On October 12th 2005, the European Commission adopted a new EU strategy for
Africa with several elements focussed on achieving the cost-effectiveness of
development aid and enhancing the European-African partnership. Initiatives
focus on not only the targets of the Millennium goals, such as health, water and
infrastructure, but also on security, peace and good governance. Fighting the
“root causes” of the development gap between Europe and Africa stated
President José Manuel Barroso, is the only way of addressing problems on the EU
territory such as illegal immigration due to poverty. 39

In terms of good governance, all aid and development programmes should be

enriched with a capacity building element in order to work with local recipient
communities in achieving their own Millennium goals. Such aspects of aid should
focus on the recipient communities in a true spirit of partnership, with
communities having ownership of aid implementation. However with capacity
building measures such as increasing transparency of implementation of projects
and increasing participation of civil society, perhaps corruption could be better
tackled from the bottom up.

4.6.2.3 International migration and the MDG’s

International migration is a sensitive subject. Many countries have not been able
to agree on the convening of a UN conference to provide guidance to countries
addressing the issue of international migration (UNFPA, 2005).

Migration is a fundamental dimension of the MDG without being defined as one

and the MDG’s, though goals 1, 3, 6, 7 and 8 are connected with it. If they are
achieved international migration will be affected. However, the relationship
between migration and the MDG’s are complex and multifaceted; the impact of
migration on development can both challenge and achieve the MDG’s. Migration
can either increase or decrease inequality and poverty depending on the
circumstances; migration can also lead to brain drain or brain waste (Usher E.,
2005).

There is a demand in the developed countries for cheap labour doing the “3D-
jobs” (dirty, dangerous, degrading) natives refuse to do. At the same time there
is a supply of labour willing to take these jobs, believing that this will lead to a
better life. In addition to the fact that migrants end up in the “3D”-sector of the
economy, they will also have lower labour force participation rates than natives

39 EurActive.com, http://www.euractiv.com/Article?tcmuri=tcm:29-145748-16&type=News. Accessed on 13 October 2005.

158
and face a higher risk of unemployment as they work in a sector which is very
sensitive to short-term economic fluctuations (OECD, 2005; Taran P., 2003).

Keeping weak economic sectors afloat by using cheap imported labour will
counteract a structural change in the economy, which has negative effects on
economic and social sustainability (Gaspar et al., 2005). These negative effects
hit both the country of immigration (structural change is counteracted) as well as
in the sender countries (less remittances).

Some scholars in the field argue that there is a temptation to build barriers to
migration with the purpose of slowing down or even reversing these population
flows. Any such temptations must be resisted at any cost however since they
slow the progress of narrowing the gap between the developed and developing
countries (Skeldon R. 2005). This appears, however, to be a rather unbalanced
picture of the situation; policies built on laissez-faire liberalism are unlikely to
solve either the building of barriers or the economic problems of the developing
countries.

The UNFPA’s Expert Group suggests the following measures on migration and
development (UNFPA, 2005).
1. Policies must be formulated on migration and development as very
few countries (if any) have them. One consideration in this regard will be
ensuring that national development strategies recognize the role of
migration. Government must thus work to integrate migration into their
poverty reduction strategies, encompassing a wide array of components
including: the labour market, health services, and access to health, trade,
etc.
2. On migration and the MDG’s, proposals for a set of “minimum
common denominators” to measure the progress towards
achieving the MDG’s were suggested. Even if the MDG’s make no
specific reference to migration, “migration impact statements” could be
developed with different follow-up policies envisaged.
3. Despite the progress made in incorporating non-State actors in the
migration policy dialogue, this dialogue should be institutionalized so as
to occur on a more consistent basis and to ensure their interdependence
as important actors in their own right.
4. Young academics in major migration countries should be
supported by assisting indigenous research centres, which
potentially deliver insights and perspectives that cannot be gained outside
the country. Moreover, indigenous research and dissemination can have a
positive impact on public opinion by helping to break down negative
stereotypes as well as having an impact on policy through reform.

159
4.6.3. Promoting a new template for further researches (ESPON II?)

To limit the research conducted in the context of the ESPON programme to the
EU 29 potentially generates misconceptions and induces mistakes in analysing
the main trends shaping the European territory. In many cases, the perception of
inequalities, potentialities, polarizations, etc. will be fully transformed according
to the geographical shape and the basic territorial units used. It is obvious that
the situation of the ESPON area would appear to be very different if the future
scenarios included peripheral areas which are strongly related to Europe such as
the S.E. Mediterranean countries, or Africa.

The strategic vision of the ESPON 29 territory must therefore be approached in a

larger Europe. We have chosen a relatively broad definition of the wider ESPON
area thus viewing ESPON in its wider context. This broadening eastwards and
southwards is based on the analyses produced in this part of the report and
therefore on objective criteria showing why taking the Southern and Eastern
countries beyond the borders of the EU into account is so important for ESPON
29. One could argue that the Middle East and the Persian Gulf are not particularly
well integrated with ESPON 29. In fact they form a second attractive pole in the
region that could compete with it. Their integration into the further analysis to be
developed here will thus help to promote a systemic point of view of the Euro-
Mediterranean region.

In what follows, we will build a pan-European template using a special projection

that shows all the features of Europe and its close neighbours (Map 50). The
projection is centred on ESPON 29 and is enlarged to the South by the North
African countries (some of the analyses show a special limit formed by the
Sahara borders) and to the East by the Balkans countries plus Turkey, Russia,
Azerbaijan and Kazakhstan. The southern and eastern limits are not actually
precisely defined. This will depend on the subjects and research results. In
addition, the preliminary study on Europe in the World developed in ESPON
project 3.1 had shown that the ESPON view was certainly the most interesting
one from a short term perspective. But the pan-European view and the global
view should be taken into account when European policy-makers try to elaborate
strategies in a long-term perspective. The next part of the report (Part C) will
use this template to review the European neighbourhood relationship and its
institutional instrument the European Neighbourhood Policy Instrument.

160
Map 50: The Euro-Mediterranean template

161
5. Part C: ESPON in its ‘neighbourhood’

5.1 Introduction; two European regionalisms

Regionalisation is the dominant form of globalisation, for two reasons. Firstly, the
enlargement of exchange scales provokes global flows but above all enhances all
types of exchange between a nation-state and its bordering areas. Firms find
many interests in locating in more remote but dynamic areas. They also find it
very convenient to « near-shore » too. In this respect, the EU building process is
one of the numerous regional processes that are being energised by globalisation
(figure 12). The strategic advantages of proximity are growing as the oil price
rises and travel and transportation costs thus rise also.

Figure 12: Share (%) of intra-regional trade in total trade of each

grouping

Secondly, the need to re-balance or re-regulate the World economy is an

important driving force here in response to the excesses of the era of borderless
or ‘footloose’ capitalism. Of course some rules have been implemented at the
global scale such as those on trade (WTO). However, the failure of the WTO’s
Cancun meeting concerning the Doha programme and the Millennium goals, the
failure of the Kyoto’s agenda, and the lack of common global legislation on

162
labour or public health shows how difficult it is to regulate the wide World. The
regional scale however can be seen as more relevant for the introduction of new
public policies, due to the complementarities between the national economies
concerned, common environmental stakes (pollution of rivers, seas and air),
shared cultural values – or at least an understanding of each other’s cultural
values, historical links, migratory flows, and any other assets important in
creating win-win co-development. This is why regional trade agreements have
multiplied worldwide in the last fifteen years, and why existing agreements have
been re-invigorated with new environmental or social concerns, and why new
ones are being formed to include developing countries. UNCTAD (2005) counts
more than 200 such Regional Trade Agreements 40 and states that regionalism is
becoming an active interface vis-à-vis the globalisation.

This regionalisation response occurs in two different ways. Type I is what could
be called “convergence regionalism”: it sees the gathering together of
comparable countries, its main goal is convergence, and it is promoted mainly by
States, through public policies. The European Union is the principal example of
this type of regionalisation. In the developing World, MERCOSUR provides
another example. Type II relates to “North/South regionalism”. This type gathers
together uneven countries, its main goal is economic development it is mostly
promoted by private firms, with ALENA being the main example here. The
growing association between ASEAN and North-Eastern Asia (“ASEAN Plus
Three”: Japan, Korea, China) is another relevant example. The December 2005
Kuala Lumpur Summit enhanced the notion of an “East Asian Region” or “ASEAN
Plus Five” since Australia and New Zeeland attended the Summit and discussed
their participation. This ‘type II’ form of regionalisation presents much better
results than traditional ‘type I’ regionalisation when it comes to employment and
the economy. The reason being that it is based on the complementarity between
rich countries with a great deal of capital, technology and ‘know-how’ on the one
hand, and developing countries with rapidly growing markets and large –
increasingly educated – labour forces (dramatically lacking in Japan or Europe)
on the other. For instance, since the beginning of the NAFTA agreement, Mexico
has significantly increased its exports to the USA (and even to Canada), and now
benefits from a positive trade balance. The country is now regarded as a
“Northern country” by investors and it thus now benefits from a significant inflow
of FDI. There is, moreover, no need to provide any proof about the economic
dynamism of Eastern Asia, while it is undoubtedly the case that the Japanese
recovery since the beginning of the 2000 is partly due to its increasing North-
South integration.

40
Unctad, Mina Mashayekhi & Taisuke Ito, ed. 2005, “Multilateralism and Regionalism. The New
Interface”, Unctad, New York and Geneva.

163
The goal for European Union then is to take this North-South regionalism step.
The European Union has plainly already derived most of the advantages it is
likely to make from type I regionalisation. It has taken advantage of its enlarged
territory, by extending market forces eastwards. But (i) it is well known that the
main opportunities for new workers and markets are located beyond the New
Member States and in particular on the Southern shore of the Mediterranean. (ii)
These neighbours already have many links with the EU, they interact
economically, politically, socially, and demographically, there is however a strong
need to regulate such links.

This is the reason why it is of utmost importance to distinguish between the two
notions of “Europe”:
- The first notion is the institutional one. “Europe” means the EU (ESPON, in
a wider sense). Its borders are established, not necessarily forever
(Romania, Bulgaria and Croatia should enter in 2007, perhaps the rest of
the Western Balkans and Turkey later on), but at any time they are
precisely defined.
- The second one is that of what we may call the functional “Europe.” This
means the Euro-Mediterranean (Euro-Africa in a wider sense) which is the
socio-economic region in which ESPON is embedded. We have seen in the
conclusion of part B of this report that its geography is unclear; its borders
vary according to the index one uses (very large when it comes to
commercial trade, closer when it comes to sea pollution). But in any case
its dimension is broader than the institutional definition of the EU and
ESPON. The geographical difference between the two definitions is the
“neighbourhood” which covers the integrated area defined as type A
(integration) on map 49.

The questions this chapter addresses then relate to how these two definitions of
Europe deal with one another. Should the EU seek to increasingly integrate its
neighbourhood, or will cultural differences mean that we are likely to experience
a growing divide? Is the answer the same on the eastern and on the southern
borders of the EU? How does this regional relationship impact EU territory? Does
the European Neighbourhood Policy (ENP) adequately cope with these high
territorial stakes? What about future Interreg programmes?

This chapter assumes a definition of the Euro-Mediterranean which covers

WUTS11 (Europe and Northern Asia) and WUTS12 (Southern Mediterranean and
Western Asia) with eventually the northern margins of WUTS13 (Sub-Saharan
Africa). It shows how the neighbourhood impacts European territory (case
studies illustrate the cross-border integration issue), while outlining what the
main territorial stakes of regional integration are (C.1). It raises the issue of the
form of the territorial contact (smooth transition or brutal discontinuity) between
164
the ESPON space and its neighbourhood (C.2). It argues that while there is not
yet in place a common regional production system beyond the ESPON countries,
nevertheless, many flows associate the ESPON space with its surrounding
countries (C.3). Our policy orientations (Conclusions) highlight the way in which
the ENP could help the European Union to achieve North-South regionalism,
highlighting the role that DG Regio’s regional policy has to play in this process.

5.2. How the neighbours impact ESPON territory

5.2.1. Neighbours’ weight

The oil and gas stake tells us how much Russia impacts the European economy
and territory. The Ukrainian desire for European membership is backed by
Poland. What is less known, is the importance of our southern neighbours. They
are reported to have weak economies, significant labour forces but limited since
they entered into a period of demographic transition. Indeed it is often perceived
that they are likely to provide Europe with more trouble than with resources. The
available statistics however do not agree. From now until 2025, their population
will rise from 240 to 340 millions when it comes to Mediterranean partners and
from 380 to 540 millions when it comes to the whole Middle East and North
African (MENA) area (Morocco to Iran, Afghanistan excluded). Meanwhile the
whole “European” population (ESPON + the Balkans) will only increase from 513
to 515 millions. Europe’s (ESPON + the Balkans) current share of World GDP
(PPP) is a little more than 20%, the MENA region weighs almost 5%, which is not
inconsequential in global terms. The aggregated economy of the Southern
Mediterranean countries, from Morocco to Israel and Turkey, is thus much larger
than that of the ten New Member States (NMS’s), and almost as large as that of
Russia and Ukraine altogether. The economic annual growth of the MEDA 41
countries reaches 4 or 5%: this is not enough for their employment needs but it
is much more than ESPON (map 27). Last but not least, the Euro-Mediterranean
area (ESPON + Eastern and Southern neighbours) is certainly the most
complementary and historically the most inter-linked among all of the major
regions of the World (see map 46).

The bilateral intensity of the trade exchanges of each neighbour defines a region
polarized by the ESPON space. The Commonwealth of Independent States (CIS)
countries have a high intensity of exchanges with other CIS countries and
secondarily with Central Eastern Europe countries (CEE). The Maghreb countries
have a high intensity of exchange with the EU (map 51). The East Mediterranean
countries have a lower intensity of exchanges with Western Europe and a higher

41
Morocco, Algeria, Tunisia, Egypt, Jordan, Palestine, Lebanon, Syria, Turkey
165
one with the Near and the Middle East. The role of the ESPON space comes from
the fact that, contrary to what occurs inside the CIS, the Mediterranean
neighbours show a low intensity of exchanges between themselves, especially
between the West and the East of the Mediterranean Sea. Inside the ESPON
space, interfaces with the neighbours appear clearly: European Mediterranean
countries have a high intensity of exchanges with their Mediterranean
neighbours; CEE countries and Finland with one or several CIS countries.

Map 51: Imports and exports of EU’s neighbours.

166
 Map 52: Bilateral intensity of the Russian trade

5.2.2 Territorial stakes and recent impacts on ESPON territory

Unemployment (how to attract eastern and southern elites without provoking a

‘brain drain’), the regionalisation of production process (how to develop a ‘win-
win’ regional division of labour that would benefit from the North-South
regionalism pattern), energy (how to secure the European oil and gas
procurement from the Arab countries and Russia), environment (how to reduce
the pollution of rivers, common seas and air in the region), and security (how a
common border management regime can ensure stabilisation for both the EU and
its neighbours) - these are some of the major issue in the Euro-Mediterranean
region

The way in which these issues are dealt with or resolved will have a major impact
on the ESPON space. Paradoxically, since the collapse of the socialist block the
Russian Federation has tried to entertain direct relations with Western Europe,
without passing through its neighbours’ territory (Box 4). For its part, during this
period Romania faced a complicated situation relating to its ‘in-between status
due to the delay in its accession to the EU (Box 5). The situation in the Balkans
provides another example of the impact of neighbouring political contexts on the
ESPON territory (Box 6).
167
Actual or potential impacts are even larger to the south. Almost all of the
Mediterranean neighbours face high rates of structural unemployment, due to
their economic structures, their lack of economic reform, the need to modernise
their agricultural systems which will have severe effects on employment, and the
persistence of numerous internal and external conflicts. In addition, they also
face growing competition from other developing countries (e.g. the entrance of
China into the WTO, and the dismantling of import quotas in the textile industry,
etc).

The EU has a vital role to play here however. Firstly, the EU must help its
neighbours to create a reliable legal background for investments in order to help
in the creation of the thousands jobs urgently needed. Otherwise, a continuing
flow of undocumented immigrants will turn ESPON’s borders into ramparts.
Secondly, the EU will increasingly need labour force recruits in order to
compensate for its demographic decline and labour force shortage. This labour
force could in large part be taken from the neighbouring countries. As noted
previously however, the need to avoid a ‘brain drain’ that deprives the EU’s
neighbours of their local development base is fundamental here. The lack of a
common policy framework, particularly in respect of teacher training, prevents
the southern neighbours from tackling the huge increase in new students that
confronts with. Trans-Mediterranean cooperation in training is developing,
especially in Spain, France, Italy and Greece, and could become a significant
industry in these areas. The political path is important, though the institutions
designed to deal with it, namely, the ‘Barcelona process’ regime has faced
significant difficulty in engineering a consensus.

The issue of a regional production process is central to ALENA 42 and East Asia 43.
As section C.3 shows, a genuine division of labour is developing between the
western and the eastern parts of the European continent, and this is extending to
the eastern new member states. What is lacking however is a trans-
Mediterranean division of labour, which would locate some of the activities of
European firms, and a higher part of the value chain, on the southern shore of
the Mediterranean. Of course this would provoke problems on the northern shore
because of the loss of unskilled jobs. In any case however these types of jobs are
already leaving Europe. Building a coherent region would however alleviate the
shortcomings of such a delocalisation.

42
See Martine Azuelos, Maria Eugenia Cosio-Zavala & Jean-Michel Lacroix ed, 2004, Intégration
dans les Amériques, dix ans d’Alena, Presses Sorbonne Nouvelle.
43
See Heribert Dieter, ed., 2006, « Report on East Asian Integration », Studies & Research n°47,
Notre Europe.
168
One of the most relevant examples of this ‘win-win’ need for a regional
production process is agriculture and the food industry. The current situation is
suboptimal. Some typically southern products such as citrus fruits or olive trees
are also produced along the northern shore, while some typically northern
products such as wheat are produced on the southern shore. In Morocco, 1.3 out
of the 1.4 million agricultural farms produce wheat, most with incredibly low
productivity and small profit margins. The inescapable downsizing of agricultural
subsidies, on both shores of the Mediterranean Sea, will moreover see this
situation progressively worsen. The winner however will be neither the Northern
nor the Southern shore of the Mediterranean, but rather Chile, Australia or
California all of which are currently industrializing their food production
industries. What has to be done then is a rational re-location of production within
the Euro-Mediterranean area, the development of the food industry related to
these products along the Southern shore, and the common promotion of regional
Mediterranean products. Actual trends as well as possible common responses to
the challenging nature of international competition will have an increasing impact
on the rural areas of both shores of the Mediterranean. Highlighting the necessity
of an overall regional view would help in the modernization of the Common
Agricultural Policy, especially its second pillar (rural development) in the
framework of the ENP.

Several environment issues also have a regional dimension. These include, the
pollution of common seas (Black and Mediterranean Seas, for which, pollution
was one of the main issues of the November 2005 Barcelona Euromed Summit);
air pollution, nuclear risks (relating to the upkeep of the antiquated power-plant
stock in the East and the potential building of new plants in the Mediterranean
(potentially in Turkey after 2010). Many actions already link the two shores of
the Mediterranean. When it comes to pollution for example, the UNEP Map
(Mediterranean Action Plan) has its headquarters located in Athens and is
networking with the main Mediterranean cities on both shores. Moreover, the
professional and intellectual bases for a regional partnership on the
environmental issue already exist; what is at stake is the need to achieve the
final operational step. European Mediterranean actors such as local firms, local
authorities in the context of decentralised cooperation, and NGOs, have a lot to
do in this regard.

5.3. Continuity and discontinuity, eastward and southward

5.3.1: A methodology for discontinuity and border analysis

The research developed on the measurement and cartography of territorial

cohesion in the ESPON programme (ESPON 3.1 Final Report, ESPON 3.2 Second
Interim Report) has established that the spatial organisation of
169
heterogeneity is a crucial output for territorial planning. The global measures of
regional inequality derived from statistical parameters (coefficient of variation) or
economic models of equilibrium (Gini coefficient) do not take into account this
spatial dimension of heterogeneity and are therefore blind to the potential
consequence of proximity between regions of different levels of development
which can define either regular gradients (if the transition between different
levels is smoothed) or a homogeneous area separated by territorial
discontinuities (if the transition is abrupt between groups of regions of different
levels). This regional pattern raises the question of integration: is the ESPON
space and its neighbours truly integrating, are they converging or diverging? It
also provides some input into the (false) 44 problem of the limits of Europe: is it
possible to identify precise limits where economic and social criteria are
characterised by abrupt changes? Or rather can we detect a kind of “smoothed”
transition between the core of Europe and its margins?

Our answer to this question is firstly based on a benchmarking of the contact

between ESPON 29 and its neighbours to the East and the South based on the
evolution of GDP/inh and life expectancy at birth between 1950 and 2000. As we
do not want to predefine in any way the limits of Europe, we have built “cut-
lines” which cross ESPON 29 territory in West-East and North-South directions
and which define samples of states linked by relations of contiguity (land border
or short maritime distance) (map 53).

♦ The WEST-EAST sample goes from Ireland to the Ukraine through the UK,
France, Belgium, Luxembourg, Germany, Austria, Hungary, Romania and
Moldova.
♦ The NORTH-SOUTH sample goes from Norway to Niger through Sweden,
Denmark, Germany, Switzerland, Italy, Malta, Tunisia, Algeria and Mali.

Map 53: North-South and East–West samples of states used for the visualisation
of discontinuities

44
In a speech entitled, “A Wider Europe – A Proximity Policy as the key to stability”, given in Brussels on 5th
December 2002, then Commission President Romano Prodi first publicly expressed his notion of ‘sharing
everything but institutions’. This seemed to offer a kind of ‘functional’ integration to the countries on the borders
of the EU while, at the same time heading off the question of further enlargement. As such, the notion emerges
that ‘political enlargement’ alone, in the traditional institutional sense, may not be the only future option being
considered in context of the rather vexed question over the ‘limits’ of Europe.
170
The “cut-lines” presented below are useful tools in the visualisation of territorial
discontinuities because they provide a very intuitive picture of spatial
homogeneity, gradient or discontinuities. The reader should however bear in
mind that these samples are not necessarily fully representative of all of the
possible forms of contact between ESPON 29 and its eastern and western
neighbours and that they should rather be considered as archetypes in Max
Weber’s sense.

A complete spatial vision of discontinuities can be obtained through maps of

discontinuities. This spatial vision has to be combined with a dynamic vision
(evolution of discontinuities through time) and a cross-thematic approach
(discontinuities for different criteria) developed in volume II of this FR. Last but
not least, the analysis of discontinuities should not remain an abstract
mathematical exercise but should rather be grounded on concrete examples of
the effects of discontinuities in terms of induced flows. Several case studies on
the border regions of ESPON 29 have thus been elaborated which are presented
in volume III of this FR and are summarised here in short boxes.

5.3.2. the West-East “stair gradient”

Thanks to German reunification and the recent enlargement of European Union in

an easterly direction, the differences between countries and regions are relatively
smooth and gradual in term of most criteria when going from Western Europe to
Central Europe, Eastern Europe and Central Asia (figure 13). Of course, very
abrupt differences remain along some borders in respect of some criteria
(particularly in terms of economics). Discontinuities are not however observed

171
for all criteria and the spatial transition between high and low levels of
development is generally sufficiently gradual to limit the formation of global
territorial discontinuities. The main trend then appears to be a “stair gradient”
with 3 of 4 levels of decrease, which means that each group of states located in
the intermediate levels is at the same time attracted to their western
neighbouring upper level and attractive for their immediate eastern neighbouring
level. For example, Hungary is attracted by Austria but is attractive to Romania
which is attractive for Ukraine and Moldova.

The potential flows induced by the “stair gradient” organisation are potential
vectors for a diffusion of prosperity and development from West to East. This
potentiality will not necessarily be realised easily while political and economic
conflicts are likely to develop if this diffusion of prosperity is only realised by
market forces beyond political control (migration of people from east to west,
relocation of industrial plants from west to east). Gradients can indeed be used
by criminal organisations (the trade in people-trafficking, money laundering and
sex slaves, as well as human organ-donor traffic) or cynical policymakers and
private companies (transfer of environmental damage to the poorest countries).
The European Union clearly has a very important responsibility in the
organisation of this “stair gradient” and can use many political instruments for
this purpose:

• Extension of cooperation areas of the Interreg Programme in a West-East

direction in order to efficiently cover the most important axes of the “stair
gradient”.
• Clever regulation of flows induced by discontinuities in order to limit the
negative effects of asymmetric relations without limiting the positive effects of
social and economic convergence induced by their development.
• Strong control of criminal activities or other undesirable speculation that can
be induced by the opening of borders in areas affected by discontinuities.

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Figure 13: Discontinuities between ESPON 29 and its eastern neighbours

The three case studies presented in the following pages help to clarify some of
the concrete effects of this particular spatial organisation of the eastern gradient.

173
 Box 4: The new EU border in Hungary. Asymmetric relations with
Romania and Serbia
The post socialist reforms have affected the cooperation of Hungary and Romania at all
levels. These relations are mainly based on an asymmetric pattern. For instance, since
the middle of the 1990s, Romania has been one of the favourite destinations of
Hungarian direct investments, particularly in regions inhabited by ethnic Hungarians and
in Bucharest. But the contrary is not true. Besides, in spite of the improvement in
relations between the two countries, the Eastern regions of Hungary are often bypassed.
They do not take advantage of the proximity of Romania. This low level of attractiveness
of eastern border regions, except for some illegal seasonal workers employed in
agriculture, is not likely to change in the near future. Migration flows from Romania to
Hungary are strong whereas the contrary is not true. Most of the Romanians primarily
choose to settle either in Budapest or in Western Hungary. At the local level, a special
effort has been made by the governments and local authorities to improve the legal
framework of the cross border cooperation, to establish Euro-regions, small organisations
and even the twinning of cities.

The recent accession of Hungary to the EU had unwanted effects. Taking advantage of
the very low cost of labour in Romania, many foreign investors who had previously
settled in Hungary decided to relocate some of their manufacturing plants to Romania.
These investors are also interested in Romania as a growing market. This process is
enhanced by the legal context in Romania where FDI is more secure thanks to Romania’s
EU accession strategy.

Relations with Serbia-Montenegro, namely with Voivodina, are different. The close
relations that had been established in the 1970s and 1980s between Yugoslavia and
Hungary were disrupted by the war. Southern Hungary directly faced up to the
consequences of the civil war in former Yugoslavia, with a massive inflow of refugees
coming mainly from Serbia during 1993, with dramatic economic consequences. The gap
between levels of development on both sides of the southern Hungarian border is more
dramatic than along the Hungarian-Romanian border. But the accession of Hungary to
the EU has had a favourable impact on relations between the two countries. (i) Many
issues of common interest have been approached with a higher degree of responsibility
and with a European consciousness. (ii) Because of accession, Hungary has been obliged
to introduce a strict regime for entering its territory and has adopted the Schengen
border regulations, while trying to make its migration policy go along well with the
necessity of maintaining the network of relations with Hungarians living abroad. (iii)
Cross border cooperation programmes have been launched in various fields (migration,
environmental cooperation etc). Other projects have not yet been successful, though the
regional political context is more favourable than previously.

In spite of the dramatic improvement in relations with Serbia, bilateral exchanges have
not increased as rapidly as they could, while the cross border cooperation suffers from
the absence of a relevant regional-local level in the public administration on the
Yugoslavian side. Although there is an obvious readiness to carry out real cooperation
projects, large scale concrete achievements remain elusive.

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 Box 5: Russia and the Baltic states: the various scales of a difficult
relationship
Since the 1990s, the relationship between Russia and the European Union has developed
apace, particularly in terms of trade relations (not only because of oil and gas). Russia is
becoming increasingly integrated into the European economic region, but remains
reluctant to receive too high a level of foreign direct investments. The FDI flows
represent a low percentage of the Gross Fixed Capital Formation. At a lower level, the
evolution is not the same. Almost all of the CEE countries still have a high bilateral
intensity of trade with Russia but their trade relations (mainly their exports) with the
Federation have dramatically decreased since the 1990s for various political or economic
reasons.

In the case of the relationship between Russia and the Baltic states, with the exception of
Lithuania a strong barrier effect exists. The most striking evolution has taken place
between Russia and Latvia whose external trade has steadily grown with all its European
partners while decreasing with Russia. The evolution is roughly the same for Estonia. The
inward stocks and flows of FDI have increased significantly in Estonia and Latvia while
the Russian share has remained very low. Estonia and Latvia have totally shifted the
orientation of their economic relations to the West, namely to the Baltic region (Finland,
Sweden, Germany). The decreasing flow of exports to Russia is a consequence of the
great changes that have taken place in the economic structure of the Baltic States and
poor political relations with Russia. The Baltic States no longer play their traditional role
of providing an interface between Russia and the rest of Europe. To a certain extent, they
have been bypassed.

At the local level, cross border cooperation between Latvia and Estonia on the one hand,
and Russia and Belarus on the other, has not made significant progress since the end of
the 1990s, although administrative procedures were significantly improved in 2001 and
2004. Russia’s central government is reluctant to encourage such cooperation projects.
Cross border relations roughly follow the same evolution with Belarus. Such economic
and political evolutions have consequences on the Baltic States’ territory. The lack of
permeability across the border contributes to the poor social and economic performances
of some regions in Estonia and Latvia, especially those located along the EU’s external
border.

The inauguration of ports such as Primorsk and the construction of a gas pipeline through
the Baltic Sea illustrate well the policy followed by the Russian administration. In 2002,
Transneft (Russian pipeline monopoly) decided to stop the crude oil transit coming from
northern Russia to the port of Ventspils through Latvian territory. This decision had
serious consequences for the energy supply in Latvia, and caused a major economic loss
for the port of Ventspils which lost one third of its traffic in 2003. Latvia has a declining
relationship with Russia, Belarus and the rest of the World (see Figure 14); Belarus has
imported almost nothing through Latvian territory since the second part of the 1990s.
Meanwhile, the cargo Latvian transit traffic from and to the other Baltic States has
regularly increased since 1999, which suggests a rapid Baltic sub-regional integration.

By the end of the 1990s, economic crisis in Russia had had an impact on Eastern Europe.
Combined with the implementation of tariff barriers, the abrupt fall in Russian demand
caused losses for many firms located in Central and Eastern Europe. This had a negative
impact on regions whose trade is mainly oriented towards Russia, among which for
example was the region of Narva in North Eastern Estonia. All social and economic
indicators in this county are now far below the national average; North Eastern Estonia
reports the lowest GDP per inhabitant since 1998 and the highest unemployment rate
(Unemployment rate of Estonia’s counties, 1997 to 2004).

175
 Figure 14 : Evolution of transit traffic in Latvia.

The economic situation of the border regions located in neighbouring countries can
burden the performances of the EU’s peripheral regions. The impoverishment of Russian
and Belarusian regions such as Pskov or Vitebsk oblasts, hampers the development of
their counterparts located in Eastern Latvia and Estonia, except those where there is an
important urban centre (Tartu). While the capital regions of the Baltic States are now
increasingly EU oriented, the Eastern regions are left without any opportunity to
cooperate with bordering regions. Furthermore, Russia and Belarus have undergone a
strong process of re-centralization since the mid-1990s. This further hampers cross
border cooperation because Russian and Belarusian border regions do not have any
autonomy in the field of external relations.

176
Box 6: The case of Romania: an “entre-deux” space
Romania, which will achieve full membership in 2007, is an “entre deux” space, in which the
external forces, generally in competition, have always counted for more than internal ones and
have reinforced or created ancient regional internal cleavages. Romania is a relatively new State
based on a recent territorial settlement; it displays many of the features of a certain type of
modernity based on European concepts and values, temporarily displaced by the values of the
communist model. This “entre deux” situation may finally however have positive effects, helping
Romania to find efficient and original solutions to problems such as inter-ethnic relationships, the
regulation of migration flows, rural-urban and regional-national-international relations. Romania is
now in the core of the potential relational field between East and West.

This “entre deux” situation has territorial consequences, as can be illustrated in what follows. (i) As
far as migration flows are concerned, the central and east European space shows dual features
(dual gradient of development for example at the national and infra-national level from West to
East). Such a space functions (simultaneously) in a similar manner to that of a periphery and as a
core area: Western regions attract people coming from Eastern ones. (ii) The diffusion of
innovations in space is shaped by this East-West pattern. The western regions of Romania have
more rapidly responded to the economic stimuli which came from abroad (together with the region
of Bucharest). (iii) The investments made by foreign actors reveal different spatial strategies,
based on the search for absolute or comparative advantages offered by some regions. These
foreign investment flows strengthen regional disparities. Most of the foreign firms are concentrated
in the Western part of Romania, in Bucharest and its region and in the region of Constanţa. The
southern and north-eastern parts of Romania do not attract such amounts of FDI because their
nearest neighbourhood is composed of the poor regions of Moldova and Bulgaria. (iv) The pre-
accession process has enhanced the attractiveness of Romania as an FDI target and increased the
presence of EU investors, while investment from the USA has declined. Asia, too, is a growing
factor in these FDI flows. Middle-Eastern investors supply only a minor part of the FDI stock but
their share in the total number of firms, totally or partially based on foreign capital, is quite high,
revealing strong relationships between Romania and the Middle-Eastern countries. (v) The
dynamics of external trade also shows a strong East-West pattern revealed by huge regional
differences in the customs’ organisation. The western part of Romanian border has five regional
custom divisions while the eastern part, where trade flows are negligible, has only one.

Figure 15 : The territorial organization scheme in Central-east Europe

177
 Figure 16 : Romania at the core of the Euro-Asian peripheries

From a demographic point of view, Romania stands at the crossing point of forces generated by the
great assembly of population from the Central Europe, Turkey and that of Moscow/ Sankt
Petersburg, and the western Ukraine. Described by the interaction potential between the
populations localized in the cities with over 50,000 inhabitants from the given space, these fields of
forces represent, in fact, potential waves established between the three great demographic
assemblies/clusters.

178
5.3.3 The double North-South discontinuity

The spatial organisation of north-south discontinuities is different and it is based

on different criteria not perceived in the same way by the majority of European
policymakers (figure 17). Contrary to the opinion of the majority of ESPON
members (see the results of the survey on the ESPON vision of the World) the
Mediterranean Sea does not represent a line of abrupt discontinuity for all
criteria. If we consider for example the social criteria of life expectancy at birth in
1995-2000, we observe a relatively gradual transition between countries located
on a north-south axis from Italy (78 years) to Malta (77) Tunisia (72) and Algeria
(69). It is only when we arrived at the sub-Saharan countries that an abrupt line
of discontinuity appears with Mali (47) and Niger (43). This is a rather new
situation as compared to that of the 1950’s where the Mediterranean Sea did
indeed act as the borderline for such extreme differences - Italy (66), Malta (66),
Tunisia (45), Algeria (43) - and where sub-Saharan countries where not so
different from northern ones – Mali (32), Niger (36).

The situation in respect of discontinuities is a little different in relation to other

criteria such as education levels or GDP per capita but, in every case, we can
observe a spatial configuration of double lines of discontinuities: the first located
on the Mediterranean Sea and a second one on the Sahara desert. This spatial
configuration of double discontinuities means that the North African countries
actually function as a “buffer zone” or “shatter-belt”, which is in a sense
comparable to the situation of new member states at the end of the cold war and
which is similar to the actual situation of Bulgaria and Romania (See Box 6)

The great difference between the semi-peripheral regions of the Southern

Mediterranean states and those of Eastern and Central Europe is however, in
part, to be found in the globally negative perception – or lack of perception – of
the potentialities of this area by the majority of European policymakers. The
demographic situation and also potential for economic dynamism of those
countries located on the southern shore of the Mediterranean Sea may actually
provide a major development opportunity for both the European Union and the
countries of the Southern Mediterranean. Moreover, some kind of long-term
‘engagement’ here is probably the only possible way for the EU to maintain its
situation as a global actor at World scale.

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 Figure 17: Discontinuities between ESPON 29 and its southern
neighbours

The consequences of this double discontinuity to the south are crucial for many
topics. The case study on Morocco presents the effects of this particular
structural situation on migratory channels and paths toward Europe (Box 7). But
the challenge of north-south relations is much wider and can be illustrated by the
Lisbon Strategy policy recommendations presented in the conclusion.

180
Box 7: Mobility between Morocco and Europe: a common subject of
concern.
About 7 million migrants came from Africa to the OECD countries in 2003 and 3.2 million
from Northern Africa. A large majority of them migrate in order to find work. These
migrants are traditionally highly concentrated, with 94% residing in 10 countries,
especially in Western Europe.

This is the case for Morocco. In the 1990s, more than 80% of the Moroccans registered
in Moroccan consulates abroad lived in Europe, 12 % in Arab countries, 5 % in North and
Latin America…

Map 54: Number of Moroccan citizens listed in consular services abroad

in 2004 – (in Euro-med region).

However migration flows from Morocco are becoming increasingly globalized. Europe
continues to be the main destination because Spain, Italy and Portugal are becoming
increasingly attractive. But the relative importance of traditional destinations such as
France, Belgium, Germany, the Netherlands and even other Arab countries is decreasing.
More and more migrants choose Northern America, especially highly educated ones.

In addition, the migration flows from Morocco are increasingly diversified, while the
numbers of students, highly educated workers and women are increasing. Of the total
number of foreigners studying in the European Union, Moroccans are the most numerous.

In addition, although authorized migration is more difficult, flows have actually increased
because of the development of illegal migration. According to various estimates, 100 000
Moroccan illegal migrants leave the country each year.

Map 55: Variation in the number of Moroccan citizens listed in consular

services abroad, by country, from 2002 to 2004.

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Morocco is not only a country of origin for international migrants. It is increasingly also a
country of transit. It has become an interface between Europe and Africa. Indeed,
migration flows from Moroccan have stagnated since 2002, while the migration of sub-
Saharan people trying to reach Europe has increased significantly since the middle of the
1990s.
Migration flows are a major subject of concern for both the Moroccan authorities and the
European Union. Efficient cooperation between Morocco and its European counterparts in
this area has emerged only recently. Morocco has made significant progress and has
dramatically improved its obsolete legislation (bill n° 02-03 passed in 2003). Its laws are
now more in line with various international conventions. But to fight efficiently against
illegal migration is expensive and up to now, the Moroccan government has lacked
sufficient financial support.

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5.3.4 Internal discontinuity: the case of Switzerland and Norway

Discontinuities are not only localised at the periphery of the ESPON territories. As
such, it is important to mention the cases of Switzerland and Norway which are
not members of the European Union and, despite significant integration in the
context of the EEA agreement (Norway) and the EU-Switzerland bilateral
agreements, remain relatively different in terms of regional development.

Box 8: The European policy of the Swiss federal council

In 2001, the Federal Council reaffirmed the key elements of its European policy after the rejection
of the popular initiative "Yes to Europe!", which was intended to oblige the Federal Council to open
immediate negotiations on EU entry:
• in the short term, the implementation of the seven bilateral agreements, their
extension to the ten new EU Member States and the conclusion of the second series of negotiations
are the top priority.
• in the medium term, priority will be given to obtaining approval of the second series
of agreements by the Federal Assembly and the Swiss people and their subsequent
implementation.
• the longer-term aim of the Federal Council’s European policy is to take Switzerland
into the European Union. The Federal Council is convinced that in the long-term Switzerland can
better safeguard its interests within the EU than outside it. Today, many problems can no longer be
resolved through the lone actions of individual states, but only in acting together at European level.

The continuation of the existing pragmatic policy of small steps with all its known advantages and
drawbacks is less an integration policy option as far as the Federal Council is concerned, than the
expression of a reality which remains valid until the policy change, which the Council seeks, finally
comes about. Accession of Switzerland to the European Union would be compatible with the Federal
Constitution. (Article 89 of the Federal Constitution, which requires a popular and cantonal majority
for such a decision, was revised in 1977 precisely with a view to EU accession). If Switzerland
became part of the EU, the Swiss people and possibly also the cantons could continue to exercise
the people’s rights embodied in the Federal Constitution (referendum, initiative). However, the
outcome of a referendum must not be allowed to influence obligations arising under the treaties
establishing the Communities. Studies by various Swiss universities have shown that, had
Switzerland already been an EU Member since 1993, the number of concrete conflicts between
Community law and referendum proposals at either Federal level or voting procedures at cantonal
level would have been very small. In prosperity terms, the following summary conclusions can be
put forward:
· thanks to EU accession, future economic growth of Switzerland would tend to be higher
although this growth would also depend significantly on other factors such as internal reforms;
· EU accession would exceed the benefits of an EEA solution, even if the net transfer to the
EU in the event of accession must be taken into account in this comparison;
· the loss of monetary policy independence means that monetary policy can no longer build
on a different economic development; other mechanisms of adaptation, such as flexible prices and
wages, would also be needed;
· the adaptation requirements – adjustment to the real interest rates prevailing in Europe or
agricultural measures – must not be underestimated;
In the welfare sector, the Federal Council would make a further study of the following internal
measures in event of accession:
· Action already existing in the draft stage to prevent social and wage dumping.
· In the area of agricultural policy, measures must also be verified to compensate the
inevitable structural adaptations
· The conversion of the Swiss tax system, including social insurance, would be a matter for
consideration by the political system in Switzerland in the next few years.

To support the enlargement of the European Union, which is also in Switzerland's interest, the
Federal Council has decided to make a contribution to the economic and social cohesion of the
enlarged EU. The Swiss contribution amounts to CHF 1 billion over a period of five years.

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5.4 Networking Euro-med: flows in the European region

The study of the flows between the ESPON space and its neighbours potentially
provides another answer to the integration issue. Here we draw on the picture
for migrations and their related remittances, then for trade and finally for
financial flows. The conclusion that North-South regionalisation is much deeper
than one usually thinks, except for firms and particularly in relation to the lack of
North-South FDI, is by far the major shortcoming for the region.

5.4.1 People

Tourism flows to or from one of the countries of the European region show an
incredible level of integration. For instance, almost 90 out of 100 tourists who go
to visit Egypt (map 56) come from the European region: 52 from the ESPON
space, 4 from Central and East European Countries (CEEC), 9 from the CIS, 13
from the MEDA countries and Turkey, and 10 from the Middle East. The numbers
for Northern America (3) or Asia (4) are very low indeed, and decreasing. Flows
of German tourists tell the same story, the bulk of whom visit a country
belonging to the region.

Map 56: Egypt tourism annual average (2001-2003)

184
When it comes to migrations, and despite the geographical diversification of the
flows, the ESPON neighbourhood has up to now been a major point of origin
(roughly 45%) of the migration flows coming to the European Union. The
traditional relations between the two shores of the Mediterranean Sea were even
reinforced in the 1980s when Italy and Spain became major destination
countries. The importance of ‘neighbour’ countries is also high in the stock of
foreign population: 20 million foreigners lived in the EU25 countries before its
enlargement in 2004; of this total only 5 million came from other EU countries,
and 6 million from the Southern and Eastern Mediterranean countries. 45 Besides,
there is no doubt that a majority of the migrants who leave Eastern neighbours
are residing in the EU25 territory. Russia traditionally attracts the majority of
migrants who leave CIS countries but even this is changing: in 2003 Germany
attracted 40% of the outflow leaving the Federation.

A few ESPON countries are not as concerned by migrations coming from the
neighbourhood as we have defined it, namely the United Kingdom, Luxembourg,
and Portugal. In all other countries however such migratory inflows represent a
significant proportion of the foreign residents. For instance former Yugoslavian
and Turkish migrants represent 70 % of the foreign population residing in
Austria. Countries such as France, Belgium and the Netherlands are strongly
related to the Southern Mediterranean countries. In Spain, Switzerland and Italy
the foreign residents mainly come from Mediterranean countries and from South
Eastern Europe (Balkans). In Hungary and the Czech Republic, the majority
come from the former USSR, former Yugoslavia, Romania and Bulgaria. As a
whole, migrations draw a clear picture of growing regional integration.

This increased regional integration is however jeopardized by two important

features. The first relates to skilled migrants: the main result of the Carim study
is that skilled migrants are increasingly being attracted to North America. The
second relates to other regional processes. In particular, North America hosts
many more Latin Americans than the ESPON space hosts migrants coming from
its Eastern and Southern ‘neighbourhoods’. 15% of the US population are
foreigners (of which 4% are undocumented); the sole share of Mexican is almost
10%. By comparison, at most 7% of the EU15’s population are foreigners (of
which less than 1% are undocumented), the share from South Mediterranean is
less than 4%.

45
The Euro-med Consortium for Applied Research on International Migrations estimates that 10 to
15 million international migrants (first generation) come from the Southern and Eastern
Mediterranean countries, of which 5 to 6.4 million live in the EU 15. See Fargues Ph., ed, 2005,
“Mediterranean Migration, 2005 Report”, Carim, European Commission.
185
Remittance flows provide another view of the intense demographic and economic
integration ongoing within the region. The region has 13 of the first 15 issuing
countries (mostly European plus Saudi Arabia and Kuwait), and several of the
largest beneficiaries of these flows in the World: Jordan, Morocco, Egypt, then
Tunisia, and the Lebanon 46. Georges Corm (2005 47) demonstrates that during
the 1990s the MEDA countries received much more money from remittances
than from all the other kinds of financial flows accumulated (aid, loans &
repayment, FDI). In other words, the region is integrated by means of a North-
South dependency. Only Turkey shows a virtuous path. The share of remittances
in its GDP total has been declining since the end of the 1990s, thanks to the level
of overall economic development (growth of GDP), to the rise in FDI and to the
creation of a true productive system, generating profits rather than rent
incomes.

5.4.2 Trade and financial flows

During the last fifteen years the potential for economic integration across the
region have increased considerably. In particular, the end of communism and the
demise of the former Soviet Union, recovery after the end of the Yugoslavian
war, the continuing Barcelona Process and Association Agreements, and the
generalisation of economic strategies across the region based on international
exchanges rather than on autarchy (even in Syria), have all contributed to this.

The question remains however whether the EU is becoming more involved,

commercially, with its closest neighbours, or whether it is becoming increasingly
bound into ‘globalised’ trading relationships with remote industrial and emerging
countries? As such then, can we really expect the consolidation of a Euro-
Mediterranean Region from Morocco to Russia polarised by Western Europe? Or
will a commercial geography emerge led by remote networks connecting the
poles of the Triad?

The answer is both. Almost a half of the consolidated EU15’s external trade is
made with “neighbours” that include Central and Eastern European Countries
(CEEC). Those countries and the EU are increasingly linked as they represented
3% of its trade in the 1980s, and more than 11% today. Should we add
Switzerland, Norway and Russia (commercial partnership between the EU and
Russia has risen during the last decade), what could be termed a process of
European continental integration is clearly on the way. Southern neighbours do
not show such integration. Taken altogether (the MEDA countries, the Middle
East and the Arab peninsula, Turkey and Israel), they represent 12% of the

46
World Bank, 2005, “Technical Meeting on Measuring Migrant Remittances”.
47
Corm, G., 2005, « Coopération et mobilisation des ressources financières pour le développement
durable en Méditerranée », Plan Bleu.
186
EU15’s trade today, which is not insignificant, but their relative weight was twice
as large 25 years ago. Figure 18 shows that Europe is increasingly connected to
the major poles of the Triad, and less and less to the developing countries – even
with those that belong to its close Mediterranean neighbourhood. Moreover, the
position of the US in terms of Mediterranean trade is low, but growing.

187
Figure 18: EU15’s goods trade 1980-2003 (imports + exports, in Euros)

Economic flows between Europe and its neighbourhood show one major
shortcoming however, for firms Europe still ends at the shore of the
Mediterranean. At the beginning of the 21st century European FDI stocks per
inhabitant in the MEDA countries were eight times smaller than in Central and
Eastern Europe (figure 19). This illustrates rather well that there is as yet no
North-South regional productive system. Generally speaking, over the last 15
years the region has experienced only weak progression in terms of economic
flows through the Mediterranean. Regional integration is however ongoing
eastward, for instance through the rapid delocalisation of the western automotive
industry. The divide however still exists southward. The MEDA countries are
highly dependent upon western European markets and investors (figure 20),
though they are not significant partners for European exports and investments as
is demonstrated by the case study on the internationalisation of Italian
enterprises (Box 9)

Nevertheless, the last two years (2004-2005) show the growing attraction of
Egypt, Turkey and Morocco, while annual FDI to the MEDA countries has jumped

188
from 10 to 40 billions Euros 48. The main increase however comes from the Gulf
States and not from ESPON countries, and as such, on its own, this rise is not
sufficient to change the general statement about the low attractiveness of the
Mediterranean. Many criteria (e.g. the role of EU markets for the Mediterranean
economies, migrations of workers, students or tourists, cultural links through TV
programmes, and common environmental threats) show the strong integration of
the two shores of the Mediterranean, though, ultimately, the key figure
concerning FDI hampers this positive view.
Figure 19: 2000-04 evolution (%, value) of EU 25 goods trade with
various neighbours

48
Saint Laurent B., Saint Martin C., Jaffrin S., 2006, « Les IDE dans la région MEDA en 2005 »,
Notes & Documents n°20, AFII, Anim
189
Figure 20: ESPON countries are the main pole for the neighbours’
economy: The case of Tunisian inflows of FDI, breakdown by
geographical origin

190
Box9 : The geography of Italian internationalisation: relations with
Central Eastern European and South and Eastern Mediterranean
countries
The current economic scenario is becoming increasingly globalized, and every enterprise,
regardless of its dimension, has to face international competition. Assuming a rather
oversimplified theoretical framework, there are basically two ways in which a firm can
deal with internationalization: exporting goods or services, or becoming international.
The analysis refers to Italian flows directed towards Central and Eastern European
countries and the Southern and Eastern Mediterranean rim.

Internationalization towards Central and Eastern Europe. Central and Eastern

Europe represents an important destination for Italian investors: it attracted 2,725 firms
in 2004. Investments towards this area are impressive considering that, before the
1990s, they were almost completely absent, as in 1986 they represented only 0.6% of
Italian investments. By 2004 they had surpassed 27%. Concerning destinations,
Romania, Russia and Poland are by far the most relevant markets, followed by Hungary,
the Czech Republic and Bulgaria. However, it has to be noted that such investments are
strongly polarized by a few metropolitan areas, basically the capital regions. At the same
time, trade between Italy and the Central-Eastern European countries has grown in
recent years. This is probably due to the delocalisation of Italian industries in the region.

Internationalization towards the Southern and Eastern Mediterranean

countries. In 2003, the weight of Italian investments directed towards this area was a
mere 1.9%. Moreover, Italian investments are polarized by a few countries, with Turkey
and the Lebanon receiving 63% of Italian investments, while the figure surpasses 70%
when Tunisia is included. The situation is rather different in the case of commercial flows.
The Southern and Eastern Mediterranean countries represent important destinations for
Italian commerce. First of all, it has to be noted that the Mediterranean area in general
represents, for Italy, the pivot of trade flows, absorbing in 2003 more than 30% of
exports and providing 25% of imports. Currently, the most important Italian partners are
Tunisia and the Lebanon – absorbing more than half of the commercial flows directed
towards Mediterranean Africa – while, in the East, Turkey and Israel are important.
Concerning imports, the most important areas are the Lebanon and Algeria, their oil and
methane providing 80% of the value of the imports from the South Mediterranean
countries.

Conclusions
There is however a differentiation in the patterns of Italian internationalization in the
considered areas. The Central and Eastern European countries confirm their nature as
transition economies. They show a strong ability to attract investments. Even if the
investments are concentrated on a few sectors, the investment profile varies more than
in the Southern and Eastern Mediterranean case. The economic relations between Italy
and this rim assume the classical form of those between developed and developing areas,
concerning the mere acquisition of inputs and the delocalization of low value added and
low technology industries. The Central and Eastern Europe countries are becoming
increasingly active in terms of globalization. On the other hand, the Southern and
Eastern Mediterranean countries’ role is more passive and functionally dependent.

The construction of a free trade area between the European Union and Southern and
Eastern Mediterranean Countries is now being discussed. The enlarging of the local
market will support an expansion of the investments directed toward this area.
Considering the progressive integration of the European Union and Central and Eastern
European the future for the Southern and Eastern Mediterranean Countries presents both
opportunities and risks.

191
5.4.3. Public funds

Launched by the Commission in 2003, the European Neighbourhood Policy (ENP)

unifies various previous policies and budgets: MEDA, Phare, Tacis etc. The new
European and Neighbourhood Partnership Instrument concerns
- nine Mediterranean countries: those of the former Barcelona process,
minus Turkey (that will benefit from a specific budget), Cyprus and Malta,
plus Libya
- the three Caucasian countries
- the three eastern countries that are located between the EU and Russia
(Moldova, the Ukraine, Belarus - though the latter is still not included for
well known political reasons).
The Balkan countries are not included because they have been given an ‘entry
perspective’ and are such potential candidates. Nor is Russia party to the ENP,
though it has a specific strategic agreement with the EU the general goals of
which are nevertheless quite similar to the ENP’s: create a common space for
trade, finance, migrations, training, culture and security. 49

The assets of the ENP initially appear quite strong. For the first time, the EU has
a comprehensive view of its regional range. This view is however hampered
somewhat by events to both the east and to the south. In the East, the Ukrainian
call for membership during the December 2004 presidential elections raises a
tough political issue with Russia. In the South, the recent Barcelona Summit in
November 2005 (for the tenth anniversary of the first Agreements), which was
supposed to enhance the Mediterranean partnership through this ambitious ENP,
was a complete failure. While all EU states where represented by the heads of
government, only two Mediterranean partners sent theirs. The reasons for this
failure relate to the inherent limits of the Barcelona process. This is perhaps best
reflected in the statistic that during the past decade, European’s subsidies
reached 27€ per inhabitant in the CEE countries but less than 2€ in the MEDA
countries.

Figures 21 and 22 show, the rising share of the CEE countries in the geographical
breakdown of EU’s public aid. As such, the fear among the EU’s southern
neighbours that the Mediterranean would not be a strategic priority is
understandable. European geographical priorities are often described as
pyramidal with the Balkan and CIS at the pinnacle followed by Africa (with the
exception of the Maghreb); then Latin America; and only then the MENA region –
where US subsidies are also important, particularly in Jordan and Egypt – with
Central & South Asia being least important. Indeed, as the EU concentrated on
the East throughout the 1990s, the partnership with the South – particularly in

49
The 1999 EU-Partnership Agreement is about to run out, negotiations to renew it are ongoing but have proved
to be difficult to conclude. Few details have emerged as to the key points at issue.
192
relation to the problems that have arisen in the context of the Barcelona process
– stalled. Rising tensions in the Middle East, specifically relating to the War in
Iraq and the conflict in the Lebanon have moreover masked the emergence of a
new partnership between the USA and the Arab World (Broader Middle East
initiative, free trade zones with Jordan and Morocco, etc).

One final strategic feature has also to be taken into account. Compared to the
official aid disbursed by the EU states (many of which maintain their relationships
with their former colonial remote areas), that of the European Commission is
much more focused on the CEE countries, Turkey, the Palestinian Territories and,
generally speaking, on the ‘neighbourhood’ as we have defined it. In absolute
terms, EU members give larger subsidies than the Commission to the
neighbourhood. However, the Commission follows a clear political line in making
specifically targeted efforts towards the neighbourhood.

Map 57: shows that the European (Commission + member states) share in terms
of total assistance given to the CEE countries is high, (they are now of course full
members), as they are to the Balkans and to the Maghreb countries. They are
however significantly lower in the Near and Middle East, where the USA’s share is
higher. Furthermore, since the 1990s, the EU’s share has stabilized in the
Western Balkans where reconstruction is largely supported by the EU, though it
has declined in North Africa, in the Near and Middle East and in the CIS
countries. Obviously, regionalisation is still not considered as a strategic priority
by all European member states.

Map 57: Net official development assistance to the neighbourhood and

the EU share (members and Commission) from 2001 to 2004 (annual
average)

193
Figure 21: European aid subsidies, by region, 1991-2003

194
 Figure 22: OECD Countries’ public aid in 2003 and 2004: Breakdown by
donors and beneficiaries

5.4.4 Air flows

The analysis of air flows between ESPON 29 and the neighbouring countries is
particularly interesting as it reveals how these countries are generally more
connected to the core of north-western Europe than to their immediate
neighbours with which they share common borders. In order to clarify this
“tunnel effect”, we have decided to analyse more precisely the flows between
Western Europe (EU15 + Switzerland & Norway) and the rest of the Euro-
Mediterranean area defined in the usual manner. The most important structural
relations in terms of air connections are measured in flows of passengers
weighted by distance in order to eliminate short distance flows which do not
contribute to the global organisation of the Euro-Mediterranean region

The first obvious result of the analysis is the fact that the major regional West
European gateways are fully concentrated along the “blue banana” from
Manchester to Milan and with the domination of Paris and London clearly visible.
The European towns located in the northern and southern peripheries clearly play
a smaller role in the connections of the neighbourhood, even if some cities are
able to build specific links (Madrid, Barcelona, Athens, Stockholm, and Helsinki).
Looking at the neighbourhood, the pattern appears more polycentric and many
cities have important connections with Western Europe, in particular in an
eastern and south-eastern direction with the major nodes of Moscow, Tel Aviv,
Dubai, Cairo and Istanbul which act as stepping stones on the route to Asia.
Medium nodes of connection with Western Europe take place both in east central
Europe (Warsaw, Prague, Budapest, and Bucharest) and in North Africa (Dakar,
195
Agadir, Casablanca, Tunis, Monastir, Djerba, and Charm-el-Cheik). Some states
were however clearly very poorly connected by air to Europe in 2000, generally
for political reasons, as is the case with Algeria, Libya, the Ukraine or Belarus
though, by 2006, the situation is likely to be rather different.

We have also tried to examine whether airports located in the neighbourhood are
specifically connected to some states or airports in Western Europe or whether
the distribution pattern is consistent across all of the core areas of north-western
Europe (map 58).

Map 58: Major air connections between Western Europe and its
neighbourhood

196
The analysis reveals clear specialisation in the distribution of connections
between Europe and its neighbourhood. The Persian Gulf (type 1) is clearly
oriented towards the UK and London’s airports while the Maghreb (type 2 and 3)
is logically connected to France and Paris. Airports from central Europe
(Germany, Austria, and Switzerland) see specific connections with Turkey and
the Balkans as well as the specific destination of Tunisia (type 5 and 6). Multiple
connection-type situations (type 4) characteristic of Tel Aviv, Cairo, Moscow, and
the capitals of the new member states (Prague, Budapest, Warsaw, and
Bucharest) also exist, where these cities are equally related to all major nodes of
the “Blue Banana”.

The analysis of connections between Western Europe and its Euro-Mediterranean

neighbourhood could however give the false impression that the entire
neighbouring region is strongly polarised by the major airports of the Pentagon.
This is not however the case, as can be clearly demonstrated by the analysis of
major flows linking the cities of the neighbourhood of Western Europe.

Looking at map 59, it appears that the Middle-East and the Persian Gulf forms an
area of strong inter-relations organised by a polycentric cluster of major airports:
Jeddah, Istanbul, Tel-Aviv, Cairo, Dubai, Riyadh, Ad Damman and Teheran. This
part of the European neighbourhood defines, in reality, a relatively independent
network which can compete with Western Europe in terms of attraction and one
which has several comparative advantages.

It is obvious that the attraction of the major airports of Saudi Arabia mainly
relates to the religious factor with pilgrims from all of the Muslim countries
travelling to Mecca on the “Hajj” which is one of the five pillars of Islam. The
religious factor is not the only explanation of this convergence of flows which is
also clearly related to the economic prosperity of the oil monarchies from the
Persian Gulf and their need for labour force imported from all of their
neighbouring countries, in particular Egypt and Jordan.

The situation of Istanbul is particularly interesting as this airport appears to act

as a bridge between the Middle-East network of strong air connections and
another network centred on east-central Europe. Istanbul is also able to develop
strong connections with Central Asia (Tashkent) and with the Maghreb (Tunis). If
and when Turkey joins the European Union, Istanbul would, without doubt, be a
major gateway for the European territory, fulfilling the same role as Madrid does
vis-à-vis Latin America.

197
Another interesting situation is that of Ljubljana which remains strongly
connected with most airports across the former Yugoslavia and can be
considered as a specific gateway for the Western Balkans.

Map 59: Internal connections in the neighbourhood of Western Europe

The data used for the creation of this map was unfortunately relatively old
(2000) and probably not complete as it can be deduced from the lack of
connections between Budapest and the rest of neighbourhood or by the fact that
connections between Moscow and the airports of Russia are not registered. There
is no doubt however that the ESPON 29 members should regularly monitor all air

198
connections at this level to regularly check on a situation which is evolving
quickly.

5.5 Conclusion: The whole, better than the sum of the parts: in varietate
concordia 50

In this conclusion, we begin by presenting some of the prospective results

concerning the future situation of the ESPON 29 in 2030 or 2050. This result has
been elaborated in common with the ESPON projects 3.4.1 Europe in the World
and 3.2 Scenarios. We then discuss some of the policy orientations related to the
Neighbourhood Policy and the Lisbon Strategy.

5.5.1 Redistribution of population in Euro-Mediterranean (1950-2050)

The distribution of population by states in the Euro-Mediterranean area (WUTS11

& WUTS12) has completely changed over the last 50 years and this process will
continue during the next 50 years. The population of the ESPON 29 countries is
declining as compared to that of the neighbouring states (Table 19). Using the
actual political division for a better comparison, we can see that 10 of the 15
most populated states of Euro-the Mediterranean area were ESPON countries in
1950, but this had fallen to only 6 in 2000 and will likely fall to 5 by 2050. At this
time, Germany with 79 million inhabitants will be only in 5th position after Egypt,
Iran and Turkey which will all have reached a population size greater than 100
million. Russia will only be in 2nd position as its population would have decreased
from 147 to 112 million between 2000 and 2050.

The expected variation in population over the period 2000-2030 (map 60)
indicates the existence of a strong regional variation with decreasing populations
in East and Central Europe, stability or moderate growth in Northern and
Western Europe, medium growth in North Africa, Turkey and Central Asia, and a
very important growth in Sub-Saharan Africa and the Arabian peninsula. This
diversity in the demographic situation is sometimes considered to be a threat by
some segments of public opinion and by policy-makers in the European Union
countries who talk of a so-called “European demographic decline”, or more
prosaically, of the “danger of invasion by southern migrants”. We can neatly
reverse this common proposal when we analyse the situation at the World scale.
The existence of a growing demographic area in the immediate neighbourhood of
the ESPON 29 countries is at the same time an economic opportunity and a
political challenge.

50
The European motto "Unity in diversity" (In varietate concordia) was officially proclaimed on 4th May 2000
in the European Parliament.
199
Table 19: The evolution of population by state in the Euro-Mediterranean
area (1950-2050)

1950 2000 2050*

Rank Name Pop. Name Pop. Name Pop.
1 Russian Fe. 103 Russian F. 147 Egypt 126
2 Germany 68 Germany 82 Russian F. 112
3 U.K. 50 Turkey 68 Iran 102
4 Italy 47 Egypt 67 Turkey 101
5 France 43 Iran 66 Germany 79
6 Ukraine 37 France 61 U.K. 67
7 Spain 28 U.K. 59 France 65
8 Poland 25 Italy 58 Iraq 64
9 Egypt 22 Ukraine 49 Yemen 59
10 Turkey 21 Spain 41 Italy 51
11 Romania 16 Poland 39 Niger 50
12 Netherlands 10 Algeria 30 Algeria 50
13 Hungary 9 Morocco 29 Saudi Arabia 49
14 Morocco 9 Iraq 25 Morocco 46
15 Czech Rep. 9 Uzbekistan 25 Spain 43
Source: UNPP, 2004 – Estimation for 2050 based on medium variant
Map 60: Population in Europe and its Neighbourhood in 2030

200
5.5.2 Ageing and sustainable demographic development

The demographic question cannot be reduced to the quantitative problem of the

size of the ESPON 29 population and that of its neighbours. It is more generally
related to the qualitative problem of the evolution of the age structure of the
population and the related problems of the dependency ratio (see ESPON Project
1.1.4) which has strong economic and political consequences. The index of
sustainable demographic development (ISDD) which has been proposed in the
ESPON project 3.2 Scenarios for the analysis of trends of territorial cohesion
inside ESPON 29 can be transposed at the Euro-Mediterranean scale in order to
evaluate the possible complementarities in the context of the development of
North-South regionalism.

When the demographic evolution of ESPON 29 is compared to that of its major

competitors in the World (Figure 23) the situations appears much better than
that of Japan, where the ageing process is very strong and is not balanced by an
equivalent increase of life expectancy. We can also forecast that the situation will
soon be better than that of China where a very important ageing process has
been developing since 1975 and where the progress in life expectancy remains
limited to a limited segment of the population. The situation is however clearly
less favourable than that of the United States where important immigration flows
ensure a strict parallel increase of ageing and life expectancy which is not the
case for the ESPON 29 countries.

If we consider that an important difference between life expectancy and median

age is a condition of demographic sustainability (see ESPON 3.2, TIR), the
evolution of the Euro-Mediterranean in the near future reveals four very different
patterns of evolution (figure 24) with (1) important progress in sub-Saharan
Africa, (2) stability at a high level in northern Africa and the Middle-East, (3) high
level but progressive degradation of the situation in Western Europe, (4) low
level without progress in Eastern Europe. But what is perhaps most important is
the fact that, when considered as a whole, the Euro-Mediterranean area presents
a perfect stability of demographic sustainability at a high level (40 years of
difference between life expectancy and median age) which is exactly comparable
to the trajectory of the USA over the same period.

In systemic terms, we can say that each part of the Euro-Mediterranean Region
would face strong demographic problems in isolation - too many young active
people on the southern shore, and; too many old people on the northern shore
The “whole is better than the sum of the parts” and considered together the area
as a whole displays a nice pattern of demographic equilibrium and sustainability.

201
Figure 23: A Comparison of the sustainable demographic development of
ESPON, the USA, Japan and China (1980-2030)

Figure 24: Sustainable demographic development in the Euro-

Mediterranean (1955-2045)

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5.5.3 Human development as a diffusion process with barriers effects?

The comparison of the distributions of the Human Development Index (HDI) in

1975 and 2002 strongly suggest the existence of a diffusion process of prosperity
and development around the core of north-western Europe. But this diffusion
process appears to be irregular in space and time and seems to be directly
related to the degree of the opening or closure of borders. A regression model
applied to the evolution of HDI between 1975 and 2002 helps to clarify this
assumption and reveals which countries have experienced the most important
progress of their level of human development during the period 1975-2002 and
which have experienced a slower increase or stagnation (map 61).

The countries of North Africa and the Middle-East represent the most positive
evolution with an increase of HDI which is greater than the general trend
observed across the Euro-Mediterranean area. This positive situation highlights
those states with open economies that have developed strong economic relations
with the European Union either through trade or migration. On the other hand,
the countries of Eastern Europe experienced a negative evolution which can be
related to the demise of the socialist system and the existence of a strong barrier
with Western Europe until 1989. The situation is less negative in East Central
Europe which had maintained contact with European Union before 1989
(Hungary, Poland) and which, quickly benefited from aid flows after the fall of
the iron curtain and in the context of EU enlargement. Another negative
evolution of HDI can be observed in countries located to the south of the Sahara
which were not involved in the globalisation process and which have sent, until
quite recently, relatively few migrants to the European Union.

The clear message delivered by such historical analysis of HDI is the fact that the
best way for the European Union to ensure the development of its neighbours is
through the encouragement of some level of legitimate migration (South-North)
combined with significant investments (North-South). If the assumptions of the
diffusion process are correct, the analysis also suggests that, in the near future,
the development process will depend on new partnerships between East and
Central Europe on the one hand, and the Northern African and sub-Saharan
countries on the other. The European Union should take the initiative in
encouraging such movements in both directions.

203
Map 61: Diffusion of human development in the Euro- Mediterranean countries
between 1975 and 2002

(a) Situation in 1975 (b) Situation in 2002

(c) Relative performance 1975-2002

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 5.5.4 The past and future evolution of the political weight of the
European Union in the World

As we demonstrated in the FIR the evolution of the population or the GDP level
of the European Union between 1950 and 2004 provides a fascinating example of
what may have been an implicit political strategy. This strategy – if that is
what it was – was designed to maintain Europe’s place in the world, as for the
period as a whole we can observed a distinct structural trend of demographic and
economic decline (Figures 25 & 26) which is only balanced by means of a
reliance on the political dynamic of enlargement to ‘balance the books’.

♦ The population of EU6 in 1950 was more or less equal to 6% of the World
total but would have declined to 3% in 2000 without enlargement. On the
contrary, the share of World population located in the European Union has
remained very stable around 6% when the EU enlarged to 9, 10, 12 and 15
members. With enlargement to 25 members in 2004, the share of World
population located in the EU reached a historical high of 7% and could jump
to 8% with the accession of Romania, Bulgaria and Turkey between 2007
and 2015. In other words, demographic decline need not be fatal for the
European Union from a political point of view.

♦ The GDP (pps) of EU6 in 1950 was more or less equal to 15% but would
have declined to 10% in 2010 without further enlargement. The
membership of the United Kingdom in 1973 produced a decisive increase in
this share which reached 20% and remained very stable around this level
when Europe enlarged to 10, 12, 15 and 25 members. The trend towards
the economic decline of the area remains important and it is only with
further enlargement to countries like Turkey, perhaps in the period after
2015, that the European Union could eventually maintain this 20% share in
future.

What is important to underline here however is the fact that the controversy over
further political enlargement is a false one when considered form a strategic
perspective. There may indeed be many political solutions to creating and
maintaining strong linkages between the European Union and its neighbouring
countries, and while political enlargement is not the only solution, what is not
questionable is the fact that the European Union will be obliged to develop the
mechanisms to manage these linkages and as such must choose a positive policy
of socio-economic engagement over a negative one based solely on
securitisation.

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Figure 25: Evolution of the share of World population of the European
Union (1950-2020)

15%

12%
Share of world population

9%

6%

3%

0%
1950 1960 1970 1980 1990 2000 2010 2020

UE6 UE9 UE10 UE12 UE12+ UE15 UE25 UE27 UE28 UE

Figure 26 : Evolution of the share of World GDP (pps) of the European

Union (1950-2020)

30%

25%
Share of world GDP (PPPs)

20%

15%

10%

5%
1950 1960 1970 1980 1990 2000 2010 2020

UE6 UE9 UE10 UE12 UE12+ UE15 UE25 UE27 UE28 UE

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5.5.5 Policy orientations

5.5.5.1 North-South Regionalism

The results presented here show that the only way in which Europe can compete
with the other large economic regions of the World is to further in its own
regional integration process, not only through the traditional approach to political
integration but also at a North-South regional scale – functional integration 51. In
this respect then it is irrelevant to restrict the neighbourhood issue to a concern
over free-trade or immigration control. The countries neighbouring the ESPON
area to its East and South should instead be functionally integrated in a global
regional programme including labour force and training issues, investment
issues, energy issues, and environmental issues. To complete this integrated
space the EU will need a strong and sustainable, mutually beneficial, strategy
towards both its Eastern and Southern neighbours.

First, it is necessary to maintain and develop a regional and sub-regional

territorial base for the implementation of the neighbourhood policy, while
currently its Action Plans are designed from a purely bilateral perspective
(Commission / each neighbour country). As far as the energy issue, the
environmental issue or the migration and training issues are concerned, the
regional scale is surely the correct one.

Second, the ENP Action Plans should enhance the local dimension of projects,
with a strong commitment from local public and private actors. The EU could
more easily monitor the implementation of such projects, and make regular
evaluations, using a similar system to that used in the context of European
regional policy. The promotion of territorial local projects is one way in which to
encourage decentralisation in neighbouring countries, which happens to be
poorly developed in both Russia and across the Mediterranean region more
generally. Although, realistically, expectations of immediate changes on the
political organisation of these countries regional and or sub-regional structures is
not realistic. Nevertheless, the initiation of such a reform process could,
ultimately, improve the efficiency of cross border cooperation programmes even
in the short to medium term. Many currently do succeed because local
authorities remain too dependent on the central authorities. In addition, the
funding of cross border (Interreg III A) and transnational cooperation (Interreg
III B) projects through different budgets (INTERREG, TACIS and MEDA),
hampers their implementation, with the Commission even referring to this as an
‘inherent design fault’. As such, future cross-border cooperation should be

51
See for instance IFRI, 2003, Le commerce mondial au 21ème siècle, Paris.
207
backed up by one common budget for territories located on both sides of the EU
external border.

The new regional arrangements, and in particular, the future European and
Neighbourhood Partnership Instrument, must have a significant amount of funds
dedicated to cross border cooperation. Furthermore, questions have arisen as to
whether the ENPI will be efficiently handled by the DG Relex. This DG has no
experience in the field of local development or in cross border cooperation. The
European Commission should define more clearly the future connections between
the DG Regio and the DG Relex for the efficient implementation of ENPI funds. 52

5.5.5.2 Lisbon Strategy

In accordance with the results obtained in this project, “Europe in the World”, we
can assert that one of the main challenges for the European Union over the next
20 years will be the decisions to integrate or to ignore the neighbourhood in
general and the Southern Bank of Mediterranean Sea in particular in its wider
economic and political strategy. Many consequences for the future of Europe in
both a territorial and a societal sense depend on this crucial choice which defines
an alternative between two very different futures.

(a) The European Bunker

This first policy option fits with the actual baseline scenario of the European
Union (see ESPON 3.2). The Euro-med strategy launched in Barcelona in 1995
has been definitively closed by the disaster of the ministerial conference of
December 2005 where, with the absence of most of the Southern leaders, the
only important questions discussed were those between the Northern
Mediterranean countries such as how to limit migratory flows induced by the
growing economic and demographic gradient on both side of Mediterranean Sea.
Moreover, security issues and the fear of terrorism have come to preoccupy the
cooperation partnership process which was initially based on a much wider vision
of join economic, social, ecological and cultural development on both sides of the
Mediterranean. In the short term, and out of any moral consideration, this
“bunker strategy” appears pragmatic and realistic for an economically declining
and demographically ageing Europe. In reality, this construction of an island of
prosperity surrounded by oceans of poverty would almost certainly have tragic
consequences.

52
At the current time of writing, October 2006, the Commission had still not concluded its internal consultation
process on how exactly the ENPI would be run. INTERACT meetings had taken place in Helsinki and Rome in
February, and in Brussels in April, with a final meeting scheduled for ‘October/November’ 2006, with the
adoption of the regulation scheduled to take place at this time.
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(1) Migrations have never been stopped by borders when wealth differentials are
greater than 1 to 5 or 1 to 10. In such a scenario, the European Union will be
obliged to invest more and more in the military control of its southern border and
will be therefore be obliged to limit EU budget allocations to other objectives like
social cohesion, sustainable development or R& D.
(2) The developing states of the southern bank of the Mediterranean will
probably never agree to the proposal of being simple “gatekeepers” for the
European Union against the poorest societies of Sub-Saharan Africa. They will
therefore develop economic and political partnerships with other parts of the
World like United States (its Great Middle East project) or China, instead of being
allied to Europe and will develop as a direct competitor in its immediate
neighbourhood.
(3) The integration of immigrants from the southern shore of the Mediterranean
will be profoundly affected by the limitation on travel and family reunification,
multiplying the problems Europe’s inner cities and suburban ‘ghettos’.
Conversely, tourism flows and the retirement of European people to southern
countries will be dramatically affected by the degradation of political relations,
producing increasing economic and ecological pressure on the coastal areas of
the northern shore of the Mediterranean.
(4) Last but not least, the psychological climate of the European Union will be
deeply affected by the climate of fear and guilt produced by Europe’s isolation
from the poorest people of Africa. The universal dimension of the European
project will be seen as hypocrisy. Moreover, this global degradation of the
international image of Europe could have significant negative consequences from
an economic and political point of view.

(b) A Marshall Plan for Southern Countries

An alternative to the ‘bunker’ of traditional fortress Europe conceptions is a

political option which seems at first glance to be based on pure utopia but on
deeper consideration is in fact probably the only realistic path to achieving the
goals of the Lisbon Strategy. The crucial point, presented in Figures 25 & 26, is
that the European Union will not be able to remain a major actor in the new
globalised economy if the EU is not able to maintain its economic and
demographic size at World scale. Over the last 40 years, the European Union has
consistently represented, more or less, 6% of the World population and 20% of
World GDP, thus ensuring that it ahs a decisive capacity to influence
developments despite its low military capacity as compared to United States or
to the former Soviet Union during the cold war. But this “6/20” level of power
has only been maintained by successive enlargements of the EU from 6 to 9, 12
15 and 25. (see. C.4.4.) without this successive political enlargement, the

209
influence of Europe would have been halved demographically and economically,
and its capacity to influence would have been dramatically reduced in political,
economic and cultural terms. Moreover, the ability to maintain a separate “social
model” or to propose an “ecological dimension“, (e.g. the Kyoto protocol) despite
the international tendency towards deregulation, would have been impossible
without the power that is provided by the economic size of the EU at World scale.
The difficult debates around the candidature of Turkey and the problems of
political integration revealed by the European Constitution Treaty referenda
failures in France and The Netherlands in 2005 proves that political enlargement
is probably not the easiest solution to maintaining Europe’s capacity to influence
the World, at least in the short term. There are other paths worthy of exploration
and perhaps one of the most promising would be the development of a kind of
Marshall Plan directed toward the European neighbourhood and especially to the
Southern Mediterranean countries. What would be the advantages of such a
policy option?

(1) The Southern Mediterranean countries are actually in the most favourable
demographic situation for economic development, with a good proportion of
young adults with relatively high life expectancy and a stable fertility rate. This
moment in history where a state has its maximum proportion of active
population provides a unique opportunity both for these countries and for the EU.
(2) The development of higher education in the Southern Mediterranean
countries is of common interest for the countries concerned and the EU.
Increasing the flow of educated workers into the ESPON space would help Europe
to balance its negative brain-drain with North America while at the same time
helping to nurture the growth and development of technical and scientific elites
in the Southern Mediterranean countries. Such positive outcomes could be
expected by enlargement of the territorial scope of the Erasmus or 7th
Framework Programmes with a related increase in funding. (3) European
economic investments in the Southern Mediterranean countries will not
necessary stop immigration to Europe though such policies will better ensure
some kind of equilibrium in the flows across the Mediterranean where, for
instance, tourism and the migration of old European people of pensionable age
are included to balance the South-North flow of young workers.
(4) As a hedge against the collapse of globalisation (due perhaps to increasing
energy prices or a financial crisis), the development of integrated relations with
the immediate neighbourhood of Europe will contribute to limiting the effects of
such external turmoil on the European economy. Conversely, Europe will be
better able to balance the influence of new economic powers like China if it can
rely on a wider integrated area of common prosperity.
(5) Last but not least, the psychological effect of the opening of a new frontier
linking the development of Europe and the development of its neighbouring
countries could produce a mental revolution in Europe and help to develop a
210
more optimistic view of the future with important economic, political and social
consequences.

211
6. Part D Internal differentiation of European territory regarding its
the relations with the rest of the world

6.1: Introduction

The aim of this final part of the report is to provide a general overview of the
relationship between the regions and cities of Europe and the rest of the world.
This is one of the key questions of the whole study, because it is an attempt to
evaluate the consequences of the relationship Europe has with the rest of the
world within the ESPON space. This is not an easy challenge however because,
on the regional level, direct indicators are either scarce or missing completely.
For example, trade is mainly measured at the national scale while airflows are
measured at the city level.

Since we have no direct and comparable indicator on this theme, we will work
with indirect indicators. Two main hypothesises will guide our approach:
- Hypothesis 1: the level of the internationalization of territories is a priori
an advantage in terms of global economic competition.
- Hypothesis 2: Weaknesses and strengths vis-à-vis global economic
competition are dependant on the economic structure at the regional level.
This general hypothesis implies at least four sub hypothesises:
H2a: a high share of light industry is a weakness because these low
technological industries are submitted to higher international competition
H2b: a high share of financial services is an advantage as it is a good
indicator of the level of economic command and, consequently, economic
independence
H2c: a high technological level is a strength in the global competition since
it gives the region the ability to produce innovations, which are a source of
economic growth
H2d: a high share of market and non market personal services (education
retail trade etc) is an indicator of an economy more indifferent or at least
less endangered by globalization.

The first hypothesis is based on the fact that the regions which are most
integrated into the world economy already have the assets needed to effectively
face up to international competition, especially if they have a leading role in the
world economy. This point is related to the concept of metropolisation, which
supposes among other things that the largest most commanding towns are the
most advantaged in the new globalized World (Veltz, 1996; Sassen S., 1998;
Marissal P., Vandermotten C., 2004). Many of the empirical statements of ESPON
have supported this hypothesis by showing that the largest towns and
metropolitan regions had higher economic growth rates than their national or
212
regional environments; even if their insertion into the world economy is not the
main cause of the metropolisation process (see p. 68 of the 3.4.2. FIR)
However, this assertion raises many questions and needs at least to be qualified.
Firstly, the level of internationalization could also be a weakness if the economic
structures are not adapted to global competition. Secondly, the ‘globalization
effect’ should not to be overestimated since we have already insisted on the long
term tendency of the “Europeanization of Europe” (p. 229-232 of the SIR). Such
an observation could mean that most of the competition is intra-European
(“regional”) and that the global competition concerns only a limited share of the
economy. Consequently, while some regions may be concerned by the rise in
global competition (metropolises, textile regions etc), many others will remain,
relatively speaking, indifferent to global competition. The share of services to
households, including non-market services, could thus be a useful indicator of
this relative indifference to globalization (see hypothesis H2d). This leads us to
conclude that the level of internationalization should not be used as a single
indicator but should rather be combined with the other parameters defining the
regional structure.

6.2 Internationalization of regions and nations in Europe

The objective of this part of the report is to measure the level of

internationalization at the regional level in Europe. The level of
internationalization will be evaluated by a set of indicators such as trade flows
(only at national level), airflows, migration flows, transnational headquarters,
and the existence of stock exchanges.

6.2.1 Trade flows

As we already noted, trade flows are only considered at the national scale as
European-wide regional trade statistics do not exist. Some countries do publish
regional trade statistics but this data is currently neither comparable nor
exhaustive at the ESPON level.

6.2.1.1: The openness rate of ESPON countries

The openness rate has been defined as the ratio between the sum of exports and
imports with non ESPON countries divided by global GDP. This could be
interpreted as an indicator of “how important the relationship with the rest of the
World is for the different ESPON countries”. We already noted that this opening is
relatively weak for Europe as a whole, though it is interesting to compare the
213
geography of this relative openness to that of the rest of the World (map 62). In
so doing, we can observe here the higher openness to the rest of the World of
Ireland and the United Kingdom: this again confirms the very high degree of
globalization of their economies. Some Eastern European countries such as the
Baltic States or Bulgaria are also much more open to the rest of the world. This
can be clearly explained by the persistence of traditional commercial relations
with the Community of independent States (CIS), and in particular by a
continuing energy relationship with Russia. On the other hand, the Mediterranean
countries, Poland and a number of the smaller economies such as Denmark and
Austria register as least open to the rest of the world, since most of their trade is
Europe-oriented.

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Map 62: Openness rate of the trade of European countries with non
ESPON countries, 1996-2000 (ex map 43)

215
6.2.1.2 The geography of trade of the ESPON countries

The intra or extra-ESPON trade pattern seems to be influenced by several factors

(map 63). The geographical position of the country seems to play a role, since
for instance Bulgaria, Cyprus or Malta have a relatively weak share of their trade
with ESPON countries because of their peripheral position in Europe. Several
Western European countries, such as Germany, the United Kingdom, Ireland or
Italy, have a high share of their trade outside the ESPON area (comparative to
the rest of ESPON countries) because of their traditional commercial relations
with other world regions. Inversely, despite their very recent integration into the
European Union, the Central European countries have a clearly ESPON-oriented
trade pattern. Note should also be made of the basic ‘European orientation’ of
the trade patterns of the small countries, even those that are not members of
the EU25, such as Norway and Switzerland.

More generally, this figure clearly raises the question of ‘globalization versus
regionalization’, that is to say that the global growth in trade is partially due to
regional integration and not necessarily to intercontinental trade (Siroën J.M.,
2000). Figure 27 shows that the ‘globalization process’ in recent decades has
been, in part, a statistical illusion. Indeed, the growing level of international
trade is mainly intra-regional in nature, as indeed we can also observe from the
growing share of intra-regional trade between the NAFTA or East Asian countries.
For the EU 25 as a whole the share of trade carried out within the customs union
has grown from 52% around 1960 to 66% around 1990, and has hovered around
this level throughout the last 15 years. This has been the case for some of the
less integrated countries in the EU 25 economy, such as the United Kingdom
whose European trade share has grown during the same period from 32% to
58%. However, in the last decade there has been a clear decline of the relative
share of Europe in UK trade, probably linked to the growing internationalization
of the UK economy, and the specific role of the London metropolis. Greece, after
growing integration with EU 25, also now shows a decline in its relative share of
EU 25 trade, mainly because of the growing trade with its neighbouring
countries. Growing intra-regional flows can also be demonstrated by the
integration of the Central and Eastern European countries inside the ESPON area
(see map 63), since we can observe that the rising orientation of their trade
within Europe has clearly preceded their recent political integration inside the EU
25.

216
Map 63: Share of ESPON-based trade in each ESPON country’s external
trade in goods (1996-2000)

217
 Figure 27: Evolution of the EU 25 share of the trade of European
countries, 1960-2000 (ex figure 49)

Map 64 is an attempt to synthesise the geographical orientation of trade of the

ESPON countries (see methodological details in volume 2). This typology is based
on the share of each of the 29 ESPON countries with the WUTS3 level, excluding
ESPON trade. It provides information on the geographical orientation of the trade
of each ESPON country with the rest of the world. The map also shows the share
of extra-ESPON trade because the meaning of the geographical trade structure
with extra-European countries is not the same for all countries, according to
whether they have a European-oriented trade structure or not. Map 63 and
Figure 27 illustrates the trade structure of each type.

218
Type 1 (the United Kingdom, the Netherlands, Germany, Sweden, Switzerland,
and Austria) is the most American-oriented one, if we exclude the very marginal
type 3, which groups only Ireland, Norway and Luxemburg. Trade with East Asia
is also specific to type 1. Type 4 includes Belgium and the South-West European
countries. We find here a strong tendency for trade with Africa, the Middle-East
and South America. Types 5 and 6 include most of the new member states,
whose share of trade with Eastern European countries (non ESPON, which means
mainly Russia) is very high, mainly for the type 6 (Bulgaria, Slovakia, Lithuania,
and Latvia which are still linked to the ex-USSR, and Slovenia, still in trade
relations with ex-Yugoslavia). The type 2 includes only Greece and Finland,
whose share of trade with Eastern Europe is still above the 20% mark.

219
Map 64: Classification of countries in respect of the geographical
orientation of their extra-European trade, 1996-2000

220
 Figure 28: Geographical structure of the trade of the different types, by
WUTS3, 1996-2000

6.2.1.3: The areas of influence of the major ESPON countries or groups

of countries

This approach reverses that of the previous one by indicating which ESPON
country is most important for the different parts of the world. The maps below
allow us to provide an initial definition of the economic areas of influence of the
various ESPON countries, based on the share of the trade of each country with
the European country in question. We will focus on the five largest ESPON
countries (France, the UK with Ireland, Germany with Austria, the Iberian
Peninsula countries, and Italy) as well as some other significant regional
aggregates of smaller countries (Benelux, the Nordic EU countries, and the New
Member States from Central Europe).

Firstly, we can immediately note the large area of commercial influence of each
ESPON country (or group of countries). The importance of the area of influence
of each country seems mainly linked to its size (the most important areas are the
ones relating to Germany, the UK and France), but also to its openness rate, to
historical factors and to technological development levels (Italy, Spain, and
Portugal have less important areas of influence than Germany, the UK or
France). Secondly, one can easily see the differences in the configuration of the
different area of influence. These geographical differences seem to be influenced
by various factors:

221
 • historical and political relations ;
• geographical proximity, even if this aspect is not easy to differentiate from
the preceding ones ;
• type of exported and imported goods. This can be related to economic
structures, for example, German technology gives it a higher weighting in
some developing countries of the Third World.

France is linked to the Maghreb and to former French colonial West-Africa

whereas the British area of influence is more important with the USA and the
Commonwealth. Spain and Portugal have special links with Africa and Latin
America. The Benelux, apart from its strong trade with the Congo, has a
European-oriented trade pattern. Italy’s trade is important with Europe, and
notably with the Central Europe countries, but also with the Mediterranean area
and Africa. The largest area of influence is however that of Germany (with
Austria) since most of the world’s countries have at least 5 % of their trade with
this country. We can however still distinguish a clear geographical pattern in
German trade. The influence of Germany is comparatively more important in
Central and Eastern Europe countries, in some parts of Africa, in Brazil and in
some Asian countries. The extent of this area is related to the role of Germany in
world trade, it is the third largest world exporter and its exports are of a high
technological level.

The global trade area of ESPON in terms of world trade is then actually the result
of a simple addition of the various national trade areas which clearly cover
different parts of the World through a kind of geographical specialisation. The
idea that the “whole is better than the sum of the parts” is particularly
interesting but it is important to use an important distinction here between EU 25
and ESPON 29 as countries which are not members of the EU 25 have developed
original strategies of their own. This is particularly obvious in the cases of
Norway and Switzerland (box 10).

222
Map 65: Share of trade of each country with the different ESPON
countries (or groups of ESPON countries)

223
Box 10: Switzerland and the European Union
The EU is the most important trade partner for Switzerland - politically, culturally and
economically. The EU and Switzerland are founded on common fundamental values such as
democracy, a regard for human rights and the constitutional state. The EU is by far the most
important trading partner of Switzerland: three-fifths of Switzerland’s exports are sent to EU
countries, while four-fifths of Switzerland’s imports originate from the EU.

Switzerland also has close contractual ties with the European Union. 1972 saw the conclusion
of the Free Trade Agreement (for industrial products), while seven bilateral agreements were
signed in 1999 in the areas of free movement of persons, overland transport, air transport,
agriculture, research, and technical barriers to trade and public procurement. These bilateral
agreements (Bilaterals I) came into force on 1 June 2002. Further negotiations in nine new
areas (Bilaterals II) were concluded on the political level on 19 May 2004.

From Switzerland’s point of view, globalisation possibly finds its greatest expression in the
momentum of European integration. The consequences of globalisation and the progressive
enlargement and consolidation of the European integration process are already evident in
Switzerland today and it can be assumed that they will continue to intensify. Considerations of
Swiss trends and future challenges are, therefore, inseparably linked to assumptions
regarding overall international conditions.

The central foreign policy questions and problems that Switzerland will have to confront in the
coming decade have to some extent been part of the fields of Swiss foreign policy activities
for many years. Swiss foreign policy is characterised by continuity and calculability.
Switzerland will concern itself with most of the existing and future international challenges. It
too will be required to reach political decisions and undertake social adjustments as a result.
Switzerland has the strength and vitality to respond to these challenges independently. In so
far as these challenges are of significance for foreign policy, it certainly cannot claim to have
ready answers to every question. But one essential observation surely emerges: these global
issues far exceed the capacity of an individual state to respond and find solutions. If
Switzerland wishes to make any contribution to the realisation of global responses, it will only
be able to do so in close collaboration with other states.

In an era of ever tougher international competition in terms of location and market share,
Switzerland appears to be in a good position judging from cross-sectional data, but judging
from longitudinal data (development trends of productivity, investments, income, taxes, etc.)
its position is less favourable. Unrestricted access to the EU market is vital for Switzerland’s
economic development. Swiss exports obtained easier access to the European single market
when the bilateral agreements came into force in June 2002, which provides some
compensation.
The traditional leading sectors of the Swiss economy (the chemical industry, precision
instruments and watches, banking and insurance) are expected to maintain their competitive
edge. They are the linchpins of economic prosperity. Rationalisation and restructuring will
continue further, service industries such as banks, insurance and management consultancies
will be affected. Certain traditional industries such as mechanical engineering and metal
processing could experience a renaissance. Others are on the threshold of technological
innovations (IT, communications). In the future there is likely to be increased demand in the
health sector. It is anticipated that jobs are more likely to be created in sectors catering to
the domestic market, which are less exposed to the pressures of international competition.

International competition in the tourism sector between the different holiday destinations in
response to the globalisation processes will remain and the changed security situation will
have an influence on visitor figures. In the medium term, further restructuring and
adjustment processes in this sector can be expected.

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6.2.2 Regional hierarchy in the world and European economies

The level of economic “command” is an indicator of strong and solid immersion

in the world economy. The dominant metropolises are those that command
European and, to a certain point, the world economy.

We present here two indicators of the economic level of “command”. The first is
the location of transnational headquarters; the second is the location of
advanced market firms’ offices. The former is a direct indicator of the leading
role of the cities at the world and European level. Paris and London are clearly
the largest world cities. Their position can be explained in a historical and
geographical way. They are the capitals of very centralized states, which built
major empires in the eighteenth and nineteenth centuries. London retains this
imperial inheritance more than Paris, as the importance of the city in the world
financial system remains strong. Randstad Holland appears to be the third
European pole, which may initially appear to be surprising for a small European
country. This is however obviously linked to its historical role in the development
of European capitalism. The decentralization of the German structure appears
very clearly on the map, since we observe at least five towns with a high number
of major transnational headquarters: Frankfurt and Munich but also Stuttgart,
Köln and Wolfsburg. Compared to the three other major European countries,
Italy has a weak leading role in the world economy, which could be partially
explained by the importance of small and medium-sized local enterprises in the
Italian economy. The tri-polarity of the urban structure also appears clearly here
with Turin, Milan and Rome the three leading cities. Outside central Europe, we
can only observe some medium poles, namely, the Nordic capitals and Madrid,
which functions as the centre of the fifth European economy.

The second indicator concerns advanced market services firms, that is to say
large international business services firms (see map 66), which are the key to
the metropolisation process. Compared to the first indicator, this one brings
much more easily into view all of the national and local sub-centres of the
commanding networks of the European and world economy. Thus, in addition to
all of the major leading towns, with London clearly ahead of Paris, we can also
observe a large number of medium towns in Central Europe, as well as the
capitals of peripheral countries, including those of the Eastern European
countries.

225
Map 66: Location of the transnational headquarters, 2005

226
 Map 67: Location of the offices of advanced services firms

Note: Advanced services firms are large international firms in the business services
sector (for example consultancy firms)

227
The fact that metropolitan areas are structural poles in terms of economic power
is both the cause and the consequence of the fact that they are at the same time
major nodes in terms of communications and networking. This can be
demonstrated by the following analysis of air flows.

6.2.3 Air flows and gateway cities: differentiating or re-balancing the

ESPON territory?

Cities are the points at which the internationalization processes of a territory

begin and materialize. The new “frontier” of the EU then can be conceptualised
as several international gateway cities and not only traditionally as external
borders of EU territory either at its Eastern or Southern limits. Moreover, the
World metropolitan archipelago is not necessary connected to the states, regions
or macro-regions where the metropolitan areas are located. Consequently, inter-
city air flows help us to identify the main European gateway cities and to
determine whether they have developed preferential linkages with other specific
world cities or world regional areas, or on the contrary, whether they are
involved in various multi-directional world networks. This study will show how a
Gateway emerges and how a polycentric development could be consolidated that
contributes to the differentiation or to re-balancing of ESPON territory.

Air traffic is a synthetic indicator of various societal trends (tourism, business

trips etc). It thus provides an indication as to the spatial integration of Europe in
wider world networks as well as being a major indicator of European territorial
dynamics. Many internal differentiations in the European space are related to the
air flows that occur inside Europe on the one hand and between Europe and the
rest of the world on the other. We propose here to integrate both dimensions in a
synthetic typology of European Airports which is based on the volume of
interactions between each airport of the ESPON 29 area with the rest of the
World measured in passengers weighted by kilometres. As previously discussed
(see Part B.2), weighting air flows by distance provides a better evaluation of
global connections than the usual non weighted measure of passengers.

The synthetic typology of global airports proposed in map 68 combines

quantitative and qualitative information:

• The global importance of airports is described by the total number of

passengers weighted by kilometres as was done previously in part B.2.
Taking into account the huge differences between airports for this criterion
we have decided to use a double square root transformation on the map in
order to keep visible all airports which would not have been possible with
the usual single square root transformation. The reader should therefore

228
 bear in mind that differences in size between airports are in fact much
larger than they appear on the map.
• The geographical specialisation of connections established by each
airport is determined by a cluster analysis applied to a division of the
World into 16 destinations which are a mixture of WUTS2 (for remote
territories in the Americas and the Asia Pacific regions) and WUTS4 (for
ESPON 29 and its direct neighbourhood). Specialisations are defined as
over- and under-representations of destinations as compared to the
general profile of ESPON 29 presented in table 20.

Table 20: Main connections of ESPON 29 airports according to air traffic

weighted by distance in 2000.

Territorial divisions Air flows weighted by

distance
Code Name billions of km %
Western Europe 734.0 43.8%
W1111 Northern Europe 196.1 11.7%
W1112 West Central Europe 263.0 15.7%
W1113 Southern Europe 274.9 16.4%
Rest of Euro-Africa 197.9 11.8%
W1121 East Central Europe 11.0 0.7%
W1122 Balkans & Turkey 35.6 2.1%
W1123 Caucuses & Dnieper 0.9 0.1%
W1124 Russia 7.9 0.5%
W1211 Maghreb 18.8 1.1%
W1212 Mashreq 37.1 2.2%
W1221 Northern Middle East 1.9 0.1%
W1222 Southern Middle East 26.1 1.6%
W13 Sub-Saharan Africa 58.5 3.5%
Rest of the World 745.0 44.4%
W21 North America 408.2 24.3%
W22 Latin America 85.2 5.1%
W31 South and East Asia 98.7 5.9%
W32 Western Pacifica 153.0 9.1%
Total 1676.9 100.0%

The proposed analysis helps to answer the following question: How do European
gateway cities participate in the world metropolitan archipelago and contribute to
differentiating or re-balancing the ESPON territory? A second crucial topic can
also be added here, namely: Is the degree of international connection always

229
related to the size of cities or is it possible to find specialised connections in cities
of a smaller size?

The cluster analysis undertaken in respect of the geographical orientation of the

air traffic of ESPON 29 airports reveals the existence of 3 major types (A,B,C)
which can be further divided in 10 sub-types.

Type A: global gateways define cities creating global links between ESPON 29
and the rest of the World at long and very long distances, particularly toward s
the Americas and Asia-Pacifica. Not surprisingly we find in this category the 6
major gateway cities previously identified in our SIR on the basis of the volume
of international air flows and the ratio of international extra European traffic:
London, Frankfurt, Paris, Amsterdam, Madrid and Zurich. But the new analysis
provided in the final report helps us to clarify their respective international
orientation and to suggest that it is possible to add other cities to the list of
global gateways connecting ESPON with the rest of the World, including cities or
airports of a relatively small size.
• The subtype “London” A.1 is characteristic of global cities with
preferential relations with all long distance destinations, especially in North
America, Asia, the Middle East and sub-Saharan Africa. This subtype can
be found in the major airports of the Pentagon like London, Frankfurt,
Amsterdam and Zurich but also in smaller airports like: Shannon and
Krakow which display specific long-distance relations, mainly with North
America.
• The subtype “Paris” A.2 is also characteristic of global cities but less so
than the previous one because it introduces specialisations not only at long
distance but also at medium distance with countries from the ESPON 29
‘neighbourhood’, especially in the Southern and Eastern Mediterranean
countries or in Sub-Saharan Africa. In addition to Paris, this situation can
also be observed in Roma and Vienna.
• The subtype “Brussels” A.3 is clearly less global than the previous
subtypes as long distance specialisations are limited to North America but
do not appear for Asia or the Middle East. It does however remain highly
specialised for connections with the ESPON 29 neighbourhood, especially
for the Balkans, Turkey and the Eastern Mediterranean region. In addition
to Brussels this type can also be observed in Munich, Milan, Warsaw, Cork
and Dublin.
• The subtype “Madrid” A.4 provides a very good example of a
specialised gateway, as its only specialisation is toward Latin America (but
with an exceptional intensity more than 7 times the European average).
Connections are also relatively important with North America and the
Mashreq, but less so than for other gateways.

230
Type B: central nodes, is characteristic of the majority of airports in the
northern and central part of the ESPON area and also from some of the major
cities of Southern Europe (Athens, Lisbon, Barcelona, and Naples). Their main
characteristic is to develop important connections with Southern Europe or the
Southern and Eastern Mediterranean countries but to be relatively sparingly
connected to the rest of the World. They thus have a major role in the internal
organisation of the Euro-Mediterranean region where they enable north-south
connections to be exploited by tourist flows or by immigrant populations moving
to and from their countries of origin.
• The subtype B.1 “Düsseldorf” is characteristic of German cities with
important connections to Turkey and Balkans related to the presence of
important immigrant populations from these countries. It can also be
observed in the major industrial cities of the UK (Glasgow and Manchester)
but rather in relation to tourist flows towards the Eastern Mediterranean
region or to immigrant populations from the Middle East.
• The subtype B.2 “Stockholm” is similar to the previous one in terms of
north-south connections related to tourism, but with specific flows more
oriented towards Eastern and East Central Europe rather than the Balkans.
• The subtype B.3 “Newcastle” is observed in smaller airports which
develop strong connections with Southern Europe but very few
connections with the rest of the World (except Maghreb, Turkey and the
Balkans). Tourism is the most important factor and the function of the
regional integration of the Euro-Mediterranean area is clearly less
important than in the previous cases of type B.1. and B.2.

Type C: Peripheral nodes is clearly the reverse of type B as it is characteristic

of airports from the Southern part of the ESPON territory, including ultra
peripheral regions such as the Azores, the Canaries, the Antilles and Reunion.
These airports are characterised by their strong connections with Northern and
Western Europe and by the global lack of international connections with the rest
of the World, except in very specific situations. The cities associated with this
type of airport are very often characterised by an important level of tourist
activity and the importance of air connections is often simply the consequence of
the huge movement of people from north to south during the holiday periods.
• The subtype C.1 “Palma de Majorca” is more connected to continental
Europe than to the British islands or Scandinavia while also being
somewhat connected to North Africa and East Central Europe. Paris,
Frankfurt and Amsterdam as such play the role of major hubs for the
connection of these cities to the Pentagon.
• The subtype C.2 “Larnaka” is mainly concentrated on the tourist cities
of the Mediterranean coast which are strongly connected to Northern
Europe via the major hub of London or by the airports of Scandinavia.

231
• The subtype C.3 “Antilles” is specific to French ultra-peripheral regions
which are mainly connected to the core of Europe by the national airport of
Paris and which do not develop any other important relations with the rest
of Europe or the rest of the World.

232
Map 68: ESPON 29 Global Airports in 2000

233
 6.3 Strengths and weaknesses of ESPON regions confronted by
globalization

The structural strength or weakness of ESPON’s regions will, in the main, be

evaluated on the basis of their sectoral economic structure as well as on
indicators of their technological level (productivity and technological patents).

We have already presented the main hypothesises that will guide our work,
particularly in respect of the structural features that could be seen as strengths
or weakness in terms of economic competition. We will here use three main
indicators.

The first is the share of low-tech light industry. This segment of the
manufacturing sector is that most subject to international competition from low
labour cost countries. This is particularly true of the textiles industry, which has
seen a significant decline in recent years. However, more refined analysis at the
regional level clearly show that the decline of textile employment does not
necessarily lead to a regional crisis, since some textile regions have a diversified
industrial and economic structure based on a dynamic network of small and
medium-sized enterprises (the “Marshallian districts”), for example the third
Italy, or Western Flanders in Belgium. For Eastern Europe, the share of light
industry should not lead to economic decline as Eastern countries currently
benefit from the de-localisation of Western European textile enterprises.

The second hypothesis is the share of financial and business services in the
regional economy (total GDP). This is a clear indicator of regions with a leading
and autonomous role in the global economy in which these types of services play
a major role. Indeed, there is a correlation between this share and the level of
internationalization, as it is illustrated by map 69 for example.

The third hypothesis is the share of services dedicated to the local population,
which includes non-market and market services, such as trade, and
transportation etc. A high share of this type of service indicates a less open
economy, an economy which is less related to the rest of the world. However, a
part of these services could concern relations with the rest of the world, relating
in particular to ports, airports, and international institutions. Moreover, this high
share does not mean that globalization has no impact on these specific regions,
but rather that they are less exposed to external shocks. In spite of these
problems, it is the best available indicator of regional ‘protection’ from the
globalization process.

Finally, we tried to measure the technological level of regions by means of

different indicators, particularly the number of patents and the share of high-tech
234
manufacturing industries. We have already underlined (Hypothesis H2c) the
importance of the technological level, since it gives the region a decisive
advantage in terms of economic competition. For example, innovations and high
productivity largely compensate for the higher cost of labour, at least in non
labour intensive sectors.

235
Map 69: Finance and business services in the regional added value, 2002

236
6.4 Synthesis

Finally, we propose to make an attempt at a qualitative typology of regions by

crossing the different aspects of the strengths and weaknesses of the regions in
relation to the globalization.

Three main aspects have been considered, in accordance with the main
hypothesises: internationalization, structural strengths and weaknesses, and
technological levels. For the first and the third aspects, we produced a single
synthetic indicator with the different indicators of each of these two aspects. For
internationalization, we considered airflows, transnational headquarters, exterior
immigration and offices of advanced services firms. The technological level was
synthesized on the basis of three indicators: number of patents per inhabitant,
productivity (added value per worker), and the share of high-tech manufacturing
industry.

To produce synthetic indicators, we conducted two principal component analyses

(PCA), one for each theme. For internationalization, the first principal component
takes into account 62% of the total information, while for technologies, it takes
only 51% of the information into consideration mainly because productivity is not
well correlated to the two others indicators and is thus taken into account more
by the second component of the analysis. The first components of these two
analyses were used as synthetic indicators of these two aspects.

Tables 21 and 22 show the correlation between the different initial variables and
the first component: the internationalization indicator (component 1 of the first
analysis, see table 21) is very well correlated with the air connections to the
cities of the rest of the world, the number of advanced service firms and the
location of headquarters, while the migratory balance is taken less into account
by the first component; the technological synthetic indicator (component 1 of the
second analysis, see table 22) is mainly correlated with the number of patents
per inhabitant and with the share of high-tech manufacturing industry, and only
weakly with the rough measure of productivity we used.

On our synthetic map, we use the “internationalization indicator” to distinguish

those cities that are highly connected to the rest of the world, and the
“technological indicator” to differentiate all regions on their technological
capacities. In addition to this information, we added the structural features that
could have strong impacts at the regional level, regarding the regions’ possible
reactions vis-à-vis the globalization process. The share of business and financial
services has not been added since it is fundamentally correlated to our
“internationalization indicator”. On the contrary, the share of light low-tech

237
industry, highly subject to world competition, and services dedicated to the local
population are superimposed on the other pieces of information.

Table 21: Correlation between internationalization indicators and the

component 1 of the PCA analysis

Component 1

Exterior air flows/inhab 0,892

Exterior migratory balance 0,477

Number of offices of advanced services firms /inhab 0,807

Number of headquarters of transnationals/inhab. 0,904

Table 22: Correlation between technological indicators and the

component 1 of the PCA analysis

Component1

Patents/inhab. 0,881

Added value/ employment 0,243

Share of high technological manufacturing industry 0,859

The resulting synthesis allows us to isolate four major types of regions, according
to their relations with the rest of the world:

1 – The highly internationalized metropolitan regions. This includes most of

the major ESPON cities which are distinguished by a high level of
internationalization, a high share of financial and business services and a leading
role in the European and world economies. Our indicator allows us to distinguish
between the metropolises in terms of the function of their level of
internationalization. At the first level, we can distinguish the largest world
metropolises of London and Paris and some very internationalized less important
cities. These cities are the gateways between Europe and the rest of the world.

2 – Central regions of Europe, the “blue banana”, without large

international metropolises. Most of these areas are characterized by a solid
economic structure with a relatively high share of business and financial services,
as well as a high technology level. This type also includes southern Sweden.

3 – Peripheral and intermediary regions with a high share of personal

services. These regions have low average technological and internationalization
levels. These regions are mainly specialized in services dedicated to the local
population, which means, to a certain extent, a relative indifference to the rest of

238
the world. These regions are often more dependant on national or European
transfers

4 - Peripheral and intermediary regions with a high share of low-tech

manufacturing industries. Compared to the previous categories these regions
are more subject to the vagaries of international competition, notably in the
textile sector in relation to low cost labour countries. However, in Eastern
Europe, these regions mostly benefit from the ongoing spatial reorganization of
this sector.

Map 70: Synthesis of the regional insertion in the world economy

239
Box 11: The impact of re-localisation on the position of ESPON regions in
value chains: The example of the textile value chain in three Marshallian
districts.
Globalization is supposed to have important impacts on Europe and, as a hypothesis, on its
internal differentiation. The general idea is that the growing economic openness of Europe will
have differential impacts at the regional level in respect of the vulnerability or strength of a
region as it relates to the nature of international competition. The textile industry is a perfect
example in trying to link ESPON regions to the rest of the world. General agreements on trade
have increasingly diminished the economic protection of European textiles, and this sector is
subject to intense competition from the low labour cost countries. The reactions of the textile
regions to this growing competition are very interesting because they clearly illustrate the
ability of some, the so-called Marshallian districts, to progress despite their structural
weaknesses.

Marshallian districts are very dynamic territorial systems characterized by a dense network of
interconnected and very specialized small and medium-sized enterprises, generally oriented
to light industry (Colli, A., 1998). They emerged in very specific historical contexts. Firstly,
most of these districts have a long tradition in the textile industry, clearly pre-dating the
industrial revolution. Regions like the interior of Flanders, Cholet, and Central Italy had an
important ‘cottage’ industry from at least the eighteen century. Secondly, as we noted
previously, these regions have constructed a dense network of small and medium-sized
interconnected enterprises using subcontracting etc, and are often based on strong informal
relations. These enterprises are thus fully engaged in a complex dialectical process of
cooperation and competition. This very flexible organization is able to quickly answer
changing levels of demand in the market. Thirdly, these districts have been able to strengthen
their initial success thanks to a long-term strategy of seeking to rise in the technological value
chain of the textile industry, with innovations that could be dispersed through the entire
regional industrial network (Scherrer F., Vanier M., 1995). Finally, we observe that in most of
these areas specific social features, notably what we could call an inter-class “common
agreement” have become rooted. In concrete terms this means that worker and manager
share the same social and ideological framework.

These areas display a relatively weak level of economic performance (Prato district in the
third Italy, the areas around Kortrijk in Belgium, the Herning-Ikast district in Denmark),
slightly below the national average, except for the Herning-Ikast district. This relative slowing
down is interesting as these areas have shown strong economic performance for much of the
previous decades, as indicated by their high level of GDP/inhab. It seems that, all things
being equal, these specific districts are coming to the limit of their performance. But, this
should not be exaggerated: firstly, economic performance is barely below the national level (it
is thus more a relative decline than a real crisis); secondly, unemployment remains very low;
finally, this tells us nothing about the causes of the process and it seems that economic
performance remains relatively good if one considers the structural weakness of these
districts because of the high share of declining industrial employment. In conclusion, it
appears that most of the Marshallian districts still display a relatively decent level of
performance in the actual context of the crisis of their specialization.

Table 23: Economic performance of some regions including industrial districts,

1995-2002 (National level is between brackets)
Level of
Average annual GDP/inhab in
Unemployment
growth 1995-2002 2002 in % of
European level
South of Western Flanders 4,54 (4,66) 119,5 4,5 (8,4)
Prato 3,57 (3,93) 128 5,6 (8,0)
Ringkoebing 5,19 (4,94) 123 4,7 (5,5)
Source : Eurostat
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Box 12: Pattern of migration in Europe
Migratory movements have occurred since pre-historic times. Distances, origins and destinations
may have changed and the same is true for the numbers of migrants and the motives behind the
decision to move.] International migration is part of a trans-national revolution, which is reshaping
societies and politics around the globe. Over the last few decades, four major areas of immigration
have emerged: North America, Australia, Western Europe and the Arab oil countries. Historically,
countries like the USA, Canada, Australia, New Zealand and Argentina have been the target for
large scale immigration. Over the past 20 years the USA, Canada and Australia have experienced
new large scale immigration, particularly from Asia and Latin America. Northern and Western
Europe experienced a large scale labour migration between 1945 and 1970. Today this area
attracts mainly immigrants from Africa, Asia, Latin America and the Caribbean Islands. The oil-rich
Gulf countries, particularly Saudi Arabia and Kuwait, have become major magnets for immigrants
from the Arab world, Africa and Asia since the rocketing oil prices in the 1970’s (Castles & Miller
1994).
When comparing these global migration movements, Castles and Miller (1994) identify four
general tendencies, which are likely to play a major role in the coming 20 years. The development
discussed by Castles & Miller (1994) is to large extent confirmed by the OECD (2004). (i)
Globalisation of migration: the tendency is that more and more countries are affected by these
migratory movements. The immigrants come from countries further away from the host country
and the immigration countries host entrants from a broad spectrum of cultural, economic and
social backgrounds. (ii) Acceleration of migration: migrations are growing so rapidly in volume in
all major regions at the present time, which only increases the difficulty for and the urgency of
workable government policies. (iii) Differentiation of migration: most countries do not have one
type of immigration – e.g. labour immigration, refugee immigration, family reunion immigration,
student exchange programmes or permanent settlements – but a whole range of them. This
differentiation presents a major obstacle to national and international policy measures. (iv) The
Feminisation of migration: historically, labour migration and refugee migration was dominated by
males, and family reunion migration by females. Since the 1960’s this has begun to change. Today
women constitute a majority of the world labour migrants and the share of women amongst
refugee migrants is increasing.
Migration flows tend to follow previous migration flows. Countries with former colonies, e.g.
France, the U.K. and Portugal, attract migrants from their former colonies, and countries with a
former demand for labour immigrants, e.g. Germany, attracts immigrants from the former sender
countries of labour migrants. Ethnic minorities in neighbouring countries also try to migrate to their
country of origin, e.g. ethnic Hungarian migration to Hungary and ethnic Russians migrating to
Russia.
Just as there are positive aspects of labour immigration, there are also negative aspects: it
can counteract the structural transformation of the economy, as stagnating trades and sectors can
be kept afloat through access to cheaper labour, something which ultimately hampers their
productivity and their international competitiveness.
The existence of dual labour markets in combination with irregular migratory movements
stimulate results in a situation where the migrants fill the “three D” jobs – jobs that are dirty,
dangerous and degrading. These are jobs that natives are not willing to take and despite
unemployment in the destination country – at least in developed countries – it seems to be
relatively easy for migrants to find jobs in the “three-D” labour segments (Taran, 2005). On the
other hand, foreigners in these sectors are more vulnerable to economic fluctuations and
unemployment than nationals. This seems, however, to be not merely a business cycle
phenomenon – instead there has been a long-term rise in the share of unemployed foreigners
compared to nationals over the past decades. It also seems that it is more difficult for foreigners to
find a new job when better times come along. Low-skilled, manual workers – often males – in
declining sectors and branches seem to have little chance of being re-employed (OECD 1997,
2004).
Recent research indicates that these European immigration flows are headed for the
“heptagon” London-Hamburg-Munich-Milan-Paris-London, while peripheral parts of the European
Union face population decline and depopulation (ESPON 1.1.4, 2005). The immigration flows aim,
in general, towards the metropolitan areas (Vandermotten et al. 2004). Many of the European
Union’s new member countries are considered to be potential senders of labour. The effects of
ageing are so marked in these countries that a majority of the immigration to the European Union
must be directed to the new member countries (Gaspar et al. 2005).

241
6.5. CONCLUSIONS

The synthesis of the regional insertion of the ESPON region into the world
economy and the typology of gateway cities that we have elaborated in this final
section of the report cannot be considered as definitive results as their
elaboration was based on a limited number of criteria. Better results could be
obtained in the future if, for example, international trade statistics can be obtain
for the regional level or if coherent time series could be analysed concerning the
evolution of air traffic linking European cities to the rest of the World. The
current set of results does however uncover some important findings in
accordance with the objectives of the ESDP.

♦ Globalisation tends to increase the economic inequalities between

European regions. The metropolitan regions of the Pentagon where the
major gateway cities are localised are actually the most likely to benefit
from the opening up of ESPON territory to internationalisation. Their
structure of activity is not vulnerable to globalisation, on the contrary, it
benefits from it.

♦ Globalisation does not necessarily have negative effects on all

peripheral regions. Depending on their economic specialisation, some
peripheral regions can benefit from the development of tourist flows or from
the relocation of traditional industrial activities for which they display
comparative advantages in terms of their labour force. The problem is of
course to evaluate the time period for which this advantage will be
maintained as there is a clear delocalisation toward towards more and more
peripheral locations.

Taking into account the actual bottlenecks which limit the ability to propose a
precise statistical picture of the strengths and weaknesses of the ESPON territory
in light of globalisation, we have tried to complete our research by means of
more detailed case studies on specific industrial sectors such as textiles (Box
11), on specific countries like Switzerland (Box 8) or on specific flows, like the
regional impact of international migrations which cannot be evaluated for the
whole of the ESPON region but which can be presented in specific situations. The
same is true for regions located along the eastern border of ESPON territory
which suffer from specific problems and for which we have elaborated specific
analysis summarised in Part C. with the examples of the Baltic countries (Box 5),
Romania (Box 6) and Hungary (Box 4). The reader is therefore invited to pay
particular attention to volume C of the report where the complete results of this
case study are presented in more detail.

242
7. CONCLUSION

Is this the Region, this the Soil, the Clime,

Said then the lost Arch Angel, this the seat
That we must change for Heav’n […]
Hail horrours, hail
Infernal world, and thou profoundest Hell
Receive thy new Possessor: One who brings
A mind not to be chang’d by Place and Time
J. Milton (1674), Paradise Lost, I, 242-254

After 18 months of intensive work on this unexpected 53 ESPON project 3.4.1

“Europe in the World”, what have we learned and what are the main
recommendations that we can propose to the community of policy-makers
concerned by spatial planning in the European Union and in its neighbouring
countries? Looking back to the initial ambitions of this project as they were
described in the introduction of our first interim report (FIR, pp. 16-35) we are
obliged to admit that there remains a lot to be done for those who will follow in
our footsteps in the context of ESPON II, and that this pioneering work thus
represents, to paraphrase Winston Churchill, ‘the end of the beginning rather
more than the beginning of the end’ as far as the broad themes covered in this
report are concerned.

Without trying here to summarise the different conclusions obtained on each

key-question and the related policy recommendations (see. conclusion of Parts A,
B, C and D of the present volume) we would prefer to focus this conclusion on a
specific problem that we have voluntary excluded throughout the previous
discussion and which is related to the definition of “Europe”.

Looking back at the different chapters of our final report, the reader has probably
noticed that, each time that it was possible, we have excluded the fuzzy word
“Europe” from our vocabulary and used terms like “European Union (15 or 25)”
or “ESPON 29” which are more precise from a geographical point of view and are
based on a legal or institutional reality. Of course, we were on occasion obliged
to use the term “Europe” for the description of geographical subset of states
(“Northern Europe”, “East-central Europe”, etc.) or when we discussed the
common sense perceptions shared by a majority of people in our research on
mental maps. We tried assiduously however to avoid any usage of this term
“Europe” on our own part.

53
The topic “Europe in the world” was not present in the initial work plan of the ESPON
project launched in 1999. It is only following internal discussion at various ESPON
meetings that the idea for such a project was progressively accepted, tested (in the
framework of ESPON project 3.1) and finally launched in a tender in 2004.
243
Like Georges Perec who produced a novel without the vowel “e” (La Disparition,
1969) and then another with only the one vowel - “e” - excluding all the others,
“a”, “i”, “o”, “u”, “y” (Les revenentes, 1972) we will try in this final conclusion to
completely change our previous approach and accept the task of saying
something about ‘Europe’ rather than just ESPON 29 or the European Union.

7.1 The false problem of the boundaries of Europe …

BOUNDARY, n. In political geography, an imaginary line

between two nations, separating the imaginary rights of
one from the imaginary rights of the other.
Bierce, A., Devil’s Dictionary, 1911

In the 1970’s and 1980’s, many people located in the little cap off the western
extremity of the continent of Asia used the term “Europe” in order to describe a
territory which was certainly not a continent in the usual geographical sense
(see. A.2) but was simply a political and economic union between old nations
linked by a common history, evolving progressively from6 to 15 states. Other
people, located also in this western extremity of Asia – but not so far west -
complained at the same time that their western neighbours did not have a
monopoly on the usage (and heritage) of “Europe” and requested also for
themselves this belonging in the perspective of a future “return to Europe”
(Kundera M., 1984). They were of course under the domination of a large
country located in what H. Mackinder had called, in 1904, the Heartland of the
World while claiming nonetheless another future oriented to the Rimland of the
oceanic countries. Their western neighbours tried to satisfy this request by
calling them “Eastern Europe” but the eastern neighbours preferred to be called
“Central Europe” in order to avoid confusion with this famous Heartland which
had obtained a belonging of sorts to this mysterious “Europe” in the 18th century.
The conventional eastern border of Europe accepted now as “natural” is indeed a
very recent construction. The thorny problem was formally solved by Vasily
Tatischev, the geographer of Peter the Great. In 1730, he suggested the Ural
mountain range as the physical representation of the continental border. The fact
that this eastern delimitation was established for purely political reasons (the will
of Peter the Great to develop the western relations of Russia with the foundation
of Saint Petersburg) has been apparently forgotten by many actual policymakers
who still speak of “natural borders” to the East (the Urals) and to the South (the
Mediterranean Sea). Neither of these are “natural” borders, indeed the
Mediterranean Sea has been a channel of communication between civilisation
rather than a border for millennia (Braudel F., 1984).

244
Once admitted the fact that neither geography nor history or any other “cultural”
criteria can provide any objective and relevant delimitation of Europe, it is easy
to conclude that the delimitation of borders of Europe is a false scientific
problem. But at the same time, it remains a real political challenge because
territorial belonging to “Europe” is used as a condition for countries wanting to
join the European Union 54. Article I.58 of the constitutional treaty state indeed
stated that “The Union shall be open to all European States which respect the
values referred to in Article I-2, and are committed to promoting them together”
but nowhere is it explained what a “European state” is or could be. 55

The reader can probably appreciate now how important it was that the ESPON 29
programme provided us with an initial geographical definition of “something that
could be Europe without being Europe”. Working on a project funded by the 29
states of ESPON, we did not have to start our work by coming to any precise
definition of Europe and thus we could simply work on the basis that the real
name of the project was in fact “ESPON in the World”. Was it really a problem?

As in the case of the functional delimitation of cities, it was necessary of course

to start from an arbitrary core area which could be either too small or too large
but would be further redesigned according to our analysis of flows, similarities,
and networks, etc. The choice of the initial core area was ultimately not very
important in the framework of the systems analysis that we had chosen.
Furthermore, it was clear that our target was not to establish precise limits when
trying to delineate a European functional area which would necessarily need to
be fuzzy and organised on various levels of integration as explained in Box13.

The results obtained, especially in parts B and C, prove that the various
theoretical concepts of the environment proposed by Wallisser (1977) fit
perfectly into the central problem of the project of ‘Europe in the World’ which
was the definition of the influence of globalisation on the spatial organisation and
future trends of the European territory. We have indeed demonstrated that the
economic core of ESPON territory is smaller than ESPON 29. Western Europe (the
former EU 15 plus Switzerland and Norway) is surrounded to the East and South
by a ring of strongly integrated (on the basis of multiple criteria) states which is
larger than ESPON 29. It is true that political and economic integration has taken
place in the main in an easterly direction (with the enlargement from 15 to 25)
54
Or the ESPON Programme. It is after all very strange that Turkey has not been invited to join the ESPON
Programme as it is now an official candidate country.
55
This is perhaps the crux of this most contentious issue. This situation in respect of future accession was
however basically resolved in 1993 with the adoption of what later came to be known as the ‘Copenhagen
Criteria’ for EU entry, which basically stated that prospective entrants must be liberal democracies in which the
rule of law is respected; have functioning market economies that can cope with the competitive pressures of the
market forces of the Union; be capable of implementing the acquis communitaire; and be willing and full
participants in the EMU and CFSP. As such, entry was now, ostensibly at least, to be based on
rational/functional rather than cultural/identity-based criteria.
245
but in functional terms very strong links, effective or potential, also exist with
North Africa, the Balkans, Turkey and probably also Russia.

Box 13: Definition of the environment of a system

The environment of a system is that part of the universe that is in communication with
the system, but is not part of the system. According to the existence of input and output
flows between a given system and various areas of its environment, it is possible to
distinguish between three different situations (Figure 5).

• The integrated environment of a system is a part of the rest of the universe which
is at the same time influenced by and an influence on, the system.
• The active environment of a system is a part of the rest of the universe which
exerts an influence on the system but is not influenced by it.
• The passive environment of a system is a part of the rest of the universe which is
influenced by the system but has no influence on it

Another important distinction here has to be made according to the level of input-output
flows which connect a system to its environment:

• The specific environment is the part of the rest of the universe which can be
considered as important for the analysis of a system, according to a given threshold of
input and outputs.
• The global environment is all that which can be theoretically connected to the
system by input-output flows but which can be practically neglected according to a given
threshold.

Beyond this integrated environment of Europe, the situation is more complex

and our analysis has helped to establish an important distinction between an
active environment which deeply influences European territory but is not,
itself, really influenced by it (Japan, China, the United States, and the Persian
Gulf) and a passive environment which is strongly influenced by Europe
246
without being able to influence it (Sub-Saharan Africa). Notwithstanding this
extreme situation, many of the territories of the world define a more global
environment for Europe in this context, existing in an intermediate situation of
medium level relations with Europe, without the clear domination of one partner
by another. This is the case for major emerging states like Brazil, Argentina,
India or Iran which are potential partners for Europe in the future.

Europe has then to develop a global strategy towards the rest of the World but,
to do so Europe must firstly reinforce its links with its local ‘neighbourhood’. The
main challenge for the near future is therefore the development of an integrated
Euro-Mediterranean or Euro-African World region (Beckouche P., Richard Y.,
2005), in the framework of a “North-South” regionalism which would benefit
from the obvious complementarities that exist between both shores of
Mediterranean Sea. Looking at what is actually happening in North America
(Azuelos & al, 2004) or in East Asia (Dieter H., 2006) we consider that the future
of Europe would be fundamentally undercut if such a strategy were not to be
strongly developed in the near future. It is probably the only solution to
realistically achieving the goals of the Lisbon Strategy while also ensuring the
future rank of Europe as global actor.

The development of north-south regionalism does not necessary mean that

Europe should enlarge politically toward the south and fix a new border on
Sahara 56. Political enlargement is but one tool among others. The political and
institutional question is secondary and what is really at stake is the elaboration
of a kind of “Marshall Plan” for the Southern and Eastern neighbours on the one
hand, and for sub- Saharan Africa on the other. As in the case of the original
“Marshall plan” such action would not necessarily be based on charity but rather
on pragmatic consideration in the common interest of both partners (Hogan M.,
1987).

7.2 The real problem of a multilevel approach

Car enfin qu'est-ce que l'homme dans la nature ? Un

néant à l'égard de l'infini, un tout à l'égard du néant, un
milieu entre rien et tout.
B. Pascal, Les pensées.

The final contribution of systems theory to the theoretical framework of the

“Europe in the world” project relates to the concepts of sub-systems and levels of
hierarchical organisation. If we consider the European Union (or the ESPON area)
to be a system, we can define the level of this system by a certain number of

56
Even if it would not be very different from what happened in the 18th century with the movement of the
eastern border toward the Urals.
247
quantitative parameters (population, GDP, diplomatic influence) or qualitative
parameters (international organisation of states, economic zones of integration,
cultural areas etc,) which can be summarised in the general category of “World
region”.

According to various possible criteria available at world scale (mental maps,

political alliances, air and trade flows, economic demographic and social
structure, dynamics etc) we have tried to check the consistency of these “world
regions of Europe” and to propose a benchmarking exercise with equivalent
World regions. Looking at economic criteria we clearly identified two other “World
regions” on the same level as Europe, namely, North America and East Asia.
These three areas define the “Great Triad” which is a major factor in the
organisation of the contemporary World and which supports the idea of a centre-
periphery organisation (Vandermotten C., Marrisal P., 1998). We also
demonstrated that the contemporary world cannot however be reduced to this
model which is relevant but not complete for several reasons.

Firstly, it appears than many parts of the World are becoming increasingly
independent of the “Great Triad” of the Northern hemisphere. The “Little Triad”
of the Southern hemisphere (Mercosur, Southern Africa, and Oceania) is not a
simple relay or symmetric replication of the Great Northern Triad but rather the
place where new world regions are actually emerging. The same is true for India
which will be without doubt the core of a powerful world region in the near
future. Moreover, the Middle East and Central Asia are also future potential cores
of the world economy even if it they are currently the major geo-strategic
battlegrounds in our contemporary world.

Secondly, the “territorial vision” of the world which is implicit in the classical view
of the centre-periphery model has to be balanced by an alternative “network
vision” which is based on the existence of “global cities” (Sassen, 1991) or the
“world metropolitan archipelago” (Brunet, Dollfus, 1992) which are more
connected to each other than to the states or places where they are located. For
some authors like P.J. Taylor (2000, 2005), the internal organisation of the
“global city” reproduces in fact the classical division of the world into three areas
of influence which are not very different from the classical paradigm of the Triad
(Figure 29). But other authors like N. Cattan (2004) or P. Veltz (1996) argue that
the network is more important than the nodes and that what does really matter
is not to measure the “size” of world cities but rather the degree of inter-
connection that they provide between different parts of the world and at different
scales. Following this approach, we have established that European territory is
certainly well connected to the rest of the World by six major gateway cities
(London, Paris, Amsterdam, Frankfurt, Zurich and Madrid) but that it can also
rely on external gateways which enable more specific connections with the
248
neighbouring countries, in particular, Istanbul, Tel Aviv, Dubai or Moscow.
Moreover, it appears that the internal integration of the European territory is
based on major “north-south” relations which are serviced by many airports of
very different size and which connect northern Europe to both shores of
Mediterranean Sea.

This means that between the global level and the national level, it is also possible
to identify an intermediate situation of regional networks which are specifically
able to organise subparts of the world and contribute to the development of
North-South regionalism. Miami obviously plays this role of north-south
connector in America but the situation is less clear in Europe where the pattern is
more complicated: Madrid enables preferential connections with Latin America,
Paris with North and West Africa, London with the Persian Gulf, Frankfurt with
Central Asia, and Ljubljana with the former Yugoslavia, etc.

Figure 29: Regional world cities and their spheres of influence

Source: P.J. Taylor (2000)

A major output of our research for the practice of ESPON policy-makers and
researchers is the introduction of a supplementary level in the actual “3-level
approach” which has been elaborated by ESPON. Europe, whatever its
delimitation, is indeed not an isolated system and the global level should always
be taken into account in order to obtain a complete view of the nested relations
which take place at all scales (Figure 30)

249
Figure 30: Hierarchical organisation of the system and sub-systems

250
7.3 One World, millions of places

All the world's a stage,

And all the men and women merely players:
They have their exits and their entrances;
And one man in his time plays many parts.
W. Shakespeare, As you Like It, 2-7

In a famous paper entitled “One World, Millions of places: the end of History and
the ascendancy of Geography”, the British geographer R.J. Johnston (1994)
suggests that Fukuyama’s concept of a relatively homogeneous world does not
mean a parallel end to Geography as predicted by O’Brien (1992). On the
contrary, it suggests that the importance of space and place is increasing in the
structuring of the contemporary world, thereby providing a challenge for political
geographers. Johnston’s conclusion is that “Space is both an opportunity and a
constraint to capitalism’s operations; political geographers, in appreciating this,
could build a much more convincing case for the ascendancy of Geography than
Fukuyama has for the end of History.”

The analysis realised in the framework of this ESPON Project 3.4.1. has clearly
confirmed that, whatever the time-space compression and the reduction of
transportation costs, distance in the narrow sense of physical proximity and
territorial contiguity remains a major factor in the organisation of flows in the
contemporary world. According to Krugman (2004), “what seems to have
emerged from the empirical work of the past dozen years is a compromise vision.
Distance matters a lot, though possibly less than it did before modern
telecommunications. Borders also matter a lot, though possibly less than they did
before free trade agreements. The spaceless, borderless world is still a Platonic
ideal, a long way from coming into existence”. The idea of the abolition of
distance and “end of geography” is a dangerous illusion for European
policymakers but also for those European firms actually investing funds in
remote the territories of Eastern and Southern Asia. Our analysis of the so-called
“European influence area” suggested clearly that it investing in remote countries
(like the those along the diagonal between the Persian Gulf and East Asia)
represents a very great challenge for Europe as this is the area where Europe’s
influence is at its lowest ebb in the World. Globalisation does not mean the
abolition of borders but rather the reallocation of national borders to an upper
scale which is that of the world region. The globalisation and regionalisation of
the world have been parallel processes (GEMDEV, 1992) and are as such clearly
interlinked. According to Mashayekhi M. & Ito T. (2005) regionalisation, and
more precisely North-South regionalisation is crucial as (i) it produces more

251
trade creation than trade diversion and (ii) it is the best way to help the
development of those countries from the South (if certain conditions are fulfilled,
in particular limiting the asymmetry of relations) as it helps them to open their
economies and to thus further stimulate South-South relations through further
‘virtuous loops’ connected to the development of intra-regional trade
associations.

There is, finally, a curious dialectical relationship between the progression of

knowledge about the European territory realised within the context of ESPON and
progress on our knowledge of the actual progress of globalisation. On the one
hand, European Spatial planners who generally focus on the local and regional
scales cannot ignore the fact that world trends have a direct impact on the
smallest territorial units and thus that they can no longer seek to develop
projects or policies without considering regional, national, European and now also
world structures and networks. On the other hand, DG Relex or DG Trade,
theoretically concerned in the main with the analysis of the situation of Europe in
the World probably has something interesting to learn from DG Regio and
ESPON, because the tools and concepts which have been elaborated for the
analysis of the internal integration and cohesion of the European territory can be
useful for their own practice if they are transposed upwards to the world scale
and/or ‘neighbourhood’ scales.

As a very simple example, the reader should look again at the transposition at
world scale of the analysis of regional discontinuities which was initially applied
to the internal differentiation of the European territory in ESPON project 3.1.
Instead of mapping the differences of GDP/inh. between NUTS 2 regions, we
have produced here maps of the differences in the Human Development Index in
2002 across 168 states of the world. The criteria and the scale are clearly
different, but interest in respect of the tool remains obvious as the location of the
main developmental discontinuities at world scale relates very much to active
international borders in terms of economic and demographic flows. Focusing on
the European ‘neighbourhood’ we have observed that the spatial transitions
between Western Europe and its Eastern and Southern peripheries are
completely different with a regular gradient in the Easterly direction and double
lines of discontinuity to the South (one on the Mediterranean Sea and the other
on the Sahara) which define a clear “buffer area” corresponding to the Maghreb
countries.

We propose therefore to conclude this research by restating the parallel between

the growing importance of the regional level at both the world and the European
scales. As demonstrated by the French economist J.M. Siroën (2000), the debate
over the economic benefits of multilateralism and regionalisation at world scale is
a false one because both forms of global integration are in fact complementary.
252
What is really important is not the liberalisation of trade (which is not an
objective in itself) but rather “the question of defining the scale where public
goods and services can be produced the most efficiently according to the cost
and the preferences of societies for certain specific characteristics which are
often associated with geographical territories.” The European reader will easily
recognize the principle of subsidiarity here which is the basis for the political
organisation of the European Union.

If the European Union and regional authorities across Europe want to be

recognised by European citizen as new, and meaningful, levels of social and
political organisation, they will have to prove that they are better able to ensure
the efficient and equitous allocation of public goods and services than national
states. In this respect, the development of spatial planning at both the European
and local scales could certainly be a major factor in the legitimisation of the
European project if it focuses on territorial cohesion and the development of
public services and not only on economic competitiveness as is basically the case
with the current interpretation of the Lisbon Strategy. Taking into account the
ESPON ‘neighbourhood’ then in the context of ESPON II and developing better
spatial analysis approaches are clearly fundamental conditions for further
progress.

253
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267
 ANNEX 01: REPORT ON NETWORKING

Internal Networking: The ESPON project 3.4.1. involved since the beginning a
very important number of research teams of different countries with two leading
partners (RIATE & Géographie-cités), 4 core partners (LADYSS, IGEAT, ITPS,
Herriott-Wyatt University) and 5 expert teams (CRH-HAS, TIGRIS, ETH, Gruppo
SOGES, CASA). This diversity was indeed necessary, due to complexity of the
subject and the choice to combine global quantitative analysis with more
qualitative case studies on selected subjects.

Two problems occur, both with British partners.

- In the case of Herriot-Wyatt University, the departure of Cliff Hague from

his university, introduced the removal of a core-partner and the contract
was broken as Herriot Wyatt University was not able to propose researcher
able to replace Cliff Hague. The budget was therefore reallocated to other
research teams which realised the work initially supposed to be done by
Cliff Hague (dictionary of concepts, analysis of environmental questions,
global integration zone…).

- In the case of CASA, the expert was not present at any meeting and they
did not sent any scientific results, out of a preliminary version of their case
study which did not fit with the expectations. One more time, the contract
was broken and the money reallocated to other project partners.

The removal of our both British partners implies that the project had no
researcher which was native English speaker which was a crucial problem for the
rewriting of the report. But a solution was hopefully found (see. next section).

Dynamic enlargement of the research group

A new research team was involved in the project after the beginning with
ORMES, a research team from Morocco which provide an expert case study on
southern external border of ESPON. This was a very difficult problem to involve
this team from administrative point of view, but it was a very precious input for
the project (especially about neighbourhood), and a precious symbol for ESPON
project in general and ESPON 3.4.1. in particular. On the final map of research
teams having contributed to ESPON program, a small dot will appear in Agadir,
saying that European Union is not always turned to its internal problems and can
also have a look at what is around!

We are very grateful to our project officer and to ESPON CU to have agreed to
this extension of the network after the beginning of the project.
268
External networking with other ESPON project

- A structural link exist with project ESPON 3.1 which had initiated the first
research on Europe in the World with a first small atlas of 12 maps and an
evaluation of the interest and feasibility of the project.

- A very strong link was established between project 3.4.1 “Europe in the
World” and project 3.2 “Scenarios”, because it appears quickly obvious
that projection or prediction of future trends are necessary based on an
enlargement of the area of investigation. The more you want to go far in
the future, the more you are obliged to enlarge the geographical scope. In
this partnership, project 3.4.1. provided many material to project 3.2 but
received also precious advices, especially in the field of enlargement and
neighbourhood policy. Chris Smith (Nordregio) which was specialist
from political topics in 3.2 was invited in the meeting of project 3.4.1 and
provided many crucial inputs and critical comments. Finally, Chris Smith
was involved as expert in project 3.4.1 for the final reviewing of language
(as he was native English speaker) and for a general comment of political
topics (as the project had no specialists from this question). Reversely,
Claude Grasland who was leader of project 3.4.1. but partner of project
3.2 provided many materials to scenarios, especially in the field of
demographic trends and north-south regionalism.

- Other links was established with different projects (for example

polycentrism or demography) but rather in the form of reading the reports
and not by direct face-to-face contact, except during the lead partner
meetings or ESPON seminars.

Networking with ESPON CU

As mentioned above, excellent relations with ESPON CU during all the project.
Our project officer (S. Di Biaggio) was invited to internal meeting of the project
and the financial questions was very efficiently solved by direct face to face
contact between S. Ferrara (ESPON CU) and I. Salmon (RIATE) which met
several time in Paris or during ESPON seminars.

269
 ANNEX 02: SCIENTIFIC SUMMARY

A) Methodologies used

Thematic synthesis on a particular field has been based on the use of models
who integrates flows and structure in a systemic way.

A.1. Structural synthesis

Multivariate analyses have been either applied to a homogeneous table of
economic variables or to a table combining social, economical, demographical
and environmental data.

A.2. Flows synthesis

The various types of flows are not independent from each other and correlation
or causal relation can be established between various types of flows. Problems
appeared in the case of introduction of a historical dimension in the analysis of a
given type of flow. As limits of states are changing through time, it is not
possible to introduce any historical dimension in the analysis of flows without
geographical aggregation of territorial units. In many cases, due to lack of
information and difficulty to harmonise various types of criteria, will we limited
our synthesis to the comparison of qualitative variables indicating if flows are, for
example “High”, “Medium” or “Low”. Those typologies introduce a dramatic
reduction of initial information but are probably the most efficient solution for
cross-thematic synthesis of flows in the context of our project.

B) Indicators & typologies

Number of spatial indicators used

- in total: 24
- covering the EU territory: 5
- covering more than the EU territory : 19

Number of spatial typologies applied:

- in total: 14
- covering the EU territory: 5
- covering more than the EU territory : 9

270
C) Concepts

No specific concept has been developed in the ESPON project 3.4.1. “Europe in
the World”. About 12 concepts have been used: Integration Zones, Centre /
Periphery, Regionalisation, Polycentrism, Gateway (cities), Area of influence,
Barrier Effect, Neighbourhood, Territorial cooperation/competition, Territorial
Cohesion, International Division of Labour, Territorial / Spatial differentiation. To
allow partners to have a homogeneous use of those concepts a dictionary of
concept has been developed in the volume two of this report. Definitions are
based on scientific papers and other reports of the ESPON program.

D) Maps
228 maps have been made for the ESPON project 3.4.1. “Europe in the World”.
The following table gives the reparation according the space covered:

ESPON Euromed World Other Total

Volume 1 9 21 58 0 88
Volume 2 2 42 44 0 88
Volume 3 0 11 12 29 52
Total 11 74 114 29 228

E) ESDP policy option

15 policy options have been addressed in the 3.4.1. final report. They can be
grouped in 3 thematic fields, development assistance, relations between regional
development and external relations and cross border cooperation.

Development assistance.

- In order to make the development assistance more effective, EU should support

the following conditions: (1) Aid must be cost effective with low transaction
costs, (2) recipient countries must have primary responsibility for its use, (3) aid
must be untied.

- In terms of good governance, all aid and development programmes should be

enriched with a capacity building element in order to work with local recipient
communities in achieving their own Millennium goals.

271
- EU should support the setting up of a Marshall plan directed to ESPON’s
neighbours, primarily to the south, which would have many advantages for both
Europe and its neighbouring countries.

- EU should not restrict the neighbourhood issue to a concern over free-trade or

immigration control. The countries neighbouring the ESPON area to its East and
South should instead be functionally integrated in a global regional programme
including labour force and training, investment, energy and environmental
issues.

Relations between regional development and external relations.

- The concept of territorial cohesion elaborated by European Union through the

ESDP and actually applied inside the ESPON 29 territory should be reformulated
in the wider context of an enlarged space towards both east and south. The
spatial structure of heterogeneity (gradient or discontinuity) is not the same in
each direction and different strategies thus need to be elaborated, in particular
through a new shaping of INTERREG cooperation areas.

- Strategies for regional development elaborated inside ESPON territory could be

transposed to neighbouring countries, in particular in the border regions.

- It is necessary to maintain and develop a regional and sub-regional territorial

base for the implementation of the neighbourhood policy, while currently its
Action Plans are designed from a purely bilateral perspective (Commission / each
neighbour country). As far as the energy issue, the environmental issue or the
migration and training issues are concerned, the regional scale is surely the
correct one.

- The ENP Action Plans should enhance more obviously the local dimension of
projects, with a strong commitment of local public and private actors. The EU
could more easily monitor the implementation of such projects, and make regular
evaluations, using a system similar to the one used in the European regional
policy.

- Furthermore, questions have arisen as to whether the ENPI will be efficiently

handled by the DG Relex. The European Commission should define more clearly
the connections between the DG Regio and the DG Relex in order to make the
goals of the European regional policy and those of the Neighbourhood policy
meet, in the field of regional development. A higher level of coordination is
necessary to support the successful implementation of cross border and
transnational cooperation, because of strong interactions between what happens
272
in the territory of third countries and what happens inside the territory of EU
members.

- To convince the Russian government to lift the non tariff barriers which still
hamper the growth of external trade in that part of the neighbourhood. This
would have a positive effect on regions whose economy is still much oriented
towards the Russian market.

Cross border cooperation.

- The new regional arrangements, and in particular, the future European and
Neighbourhood Partnership Instrument, must have a significant amount of funds
dedicated to cross border cooperation.

- EU should make an effort for the training of local authorities on both sides of
the border. Local governments usually suffer from a lack of administrative
capability for the conception, implementation and financing of joint cross border
projects in the frame of Neighbourhood Programs.

- EU should determine very clearly the rules of the game about cross border
cooperation. It is necessary to define more clearly each part’s task. For instance,
Baltic authorities want to negotiate only the contents of the projects with Russia
and Russian regions. All the rest must be left to European Commission.

- EU should continue the dialog with Russian authorities, at the highest level, in
order to conceive genuinely joint projects in the domain of transports. A dialog at
the highest level would be a relevant way to by pass the bad relations between
Russia and the Baltic States. Such a dialog should exist also with Ukraine,
Belarus and Moldova.

273
F. Further research issues

Four main research issues have been identified that would be very relevant to
deepened.

More case studies should be launched on neighbourhood countries on cross

border and transnational relations. Case studies should cover all the ESPON
frontiers and especially the southern ones.

Transnational environmental issues between ESPON and neighbours countries;

for example Black Sea and Mediterranean Sea should be more taken into
account.

The comparison between ESPON and comparable macro regions and Global
Integration Zones should be developed.

More in-depth studies on interactions between ESPON and the rest of the world
at different level in Europe should be launched. In the perspective of an ESPON
two, it would be relevant to launch different project on “Europe in the World” in
one hand and “The world in Europe” in the other one. For the later, as
globalisation is mainly linked to urban places, that kind of project should be
associated to work on polycentricism and gateway and implies a database on
cities.

G. Data gap to overcome

Before starting a work on the database building it would be very relevant to

develop links with other DGs that are implied in the same field, namely DG trade
and DG relex.
The main data gaps to overcome that have been identified are the following
ones:
- Long term databases
- Foreign Direct Investments
- Migrations flow (especially o the point of view of origin countries)
- Environment flows and structure.

274
 ESPON project 3.4.1.

Europe in the World

Final Report – Vol.2

Integrated tools & thematic studies

3
Co-financed by the European Community through the Interreg III ESPON Programme
4
 ESPON project 3.4.1.

Europe in the World

Final Report – Vol.2

Integrated tools & thematic studies

5
This report represents the final results of a research
project conducted within the framework of the ESPON
2000-2006 programme, partly financed through the
INTERREG programme.

The partnership behind the ESPON programme consists of

the EU Commission and the Member States of the EU25,
plus Norway and Switzerland. Each partner is represented
in the ESPON Monitoring Committee.

This report does not necessarily reflect the opinion of the

members of the Monitoring Committee.

Information on the ESPON programme and projects can be

found on www.espon.lu

The web side provides the possibility to download and

examine the most recent document produced by finalised
and ongoing ESPON projects.

ISBN number:
This basic report exists only in an electronic version.
Word version:

© The ESPON Monitoring Committee and the partners of

the projects mentioned.

Printing, reproduction or quotation is authorized provided

the source is acknowledged and a copy is forwarded to the
ESPON Coordination Unit in Luxembourg.

6
PARTICIPANTS

SCIENTIFIC COORDINATION

This work was coordinated by Claude Grasland (professor at University Paris 7,

UMR Géographie-cités) and Clarisse Didelon (Post Ph’D at University Paris 7, UMS
RIATE)

CORE TEAM

RIATE: Bernard Corminboeuf, Marc Guerrien, Nicolas Lambert, Isabelle Salmon

IGEAT: Laurent Aujean, Gilles Van Hammes, Pablo Medina, Christian
Vandermotten
ITPS: Mats Johansson, Daniel Rauhut
LADYSS: Pierre Beckouche, Yann Richard
UMR Géographie-cités: Nadine Cattan, Christian Grataloup, Guillaume Lesecq,
Christine Zanin

EXPERTS

CRS HAS: Györgyi Barta, László Dancs, Imre Nagy, Alexandra Szigeti, Péter
Strömpl
TIGRIS - "Alexandru Ioan Cuza" University: Danel Condachi Octavian Groza,
Ionel Muntele, Alexandru Rusu, Oana Stoleriu, Georgiana Voicu
ETH Zurich: Marco Keiner
GRUPO SOGES: Alberto Vanolo
ORMES: Mohamed Charef, M’hamed Wahbi

7
TABLE OF CONTENTS

1 INTRODUCTION ..................................................................................... 17

PART A : INTEGRATED TOOL ........................................................................ 15

2 SCALE, SCALE, SCALE… .......................................................................... 19

2.1 Scales and Levels........................................................................ 19
2.2 Geographical Scale (G-Scale)........................................................ 21
2.3 Time Scale (T-Scale) ................................................................... 25
2.4 Political levels (P-levels) and political scale (P-Scale)........................ 30
2.5 Conclusion ................................................................................. 34

3 MAP TEMPLATES AND GRAPHIC HARMONISATION .............................................. 39

3.1 Which Cartographic Projection? ..................................................... 40
3.1.1 Template 1 « EU29 » ............................................................. 40
3.1.2 Projection 1: The Mercator projection....................................... 41
3.1.3 Projection 2: The Winkel projection ......................................... 42
3.1.4 Template n°2 « World » ......................................................... 42
3.1.5 Template 3 « World 2 » ......................................................... 43
3.1.6 Template 4 « Pan European » ................................................. 46
3.1.7 Template 5: « World and regional MIX ».................................. 46
3.2 Which divisions? ......................................................................... 47
3.2.1 The national level.................................................................. 47
3.2.2 The “regional” level ............................................................... 50
3.3 Which message? ......................................................................... 51
3.4 Map background and countries...................................................... 51
3.4.1 Countries ............................................................................. 52
3.4.2 Countries and regions out of UE29........................................... 52
3.4.3 Legends............................................................................... 52
3.5 Graphic templates ....................................................................... 57

4 DATA MINING AND DATABASE BUILDING ........................................................ 59

4.1 Data mining and database building ................................................ 59
4.1.1 Data and Main Sources: ......................................................... 59
4.1.2 Harmonization of datasets ...................................................... 65

5 METHODOLOGICAL FRAMEWORK FOR THE ANALYSIS OF FLOWS AND STRUCTURES ....... 70

5.1 Preliminary sample of methods for flows analysis ............................ 70
5.1.1 Absolute level of flows and hierarchy ....................................... 70
5.1.2 Relative level of flows and influence......................................... 72
5.1.3 Other measures of flows intensity............................................ 73
5.2 Preliminary sample of methods for structure analysis ....................... 74
5.2.1 Size and hierarchy ................................................................ 75
5.2.2 Dissimilarity and identity........................................................ 77
5.2.3 Differences and complementarity ............................................ 81
5.2.4 Spatial proximity: geographical neighbourhood and network
accessibility...................................................................................... 81
5.3 Preliminary sample of methods for synthetic analysis ....................... 85
5.3.1 Thematic synthesis................................................................ 85
5.3.2 Structural synthesis............................................................... 88

8
 5.3.3 Flows synthesis..................................................................... 89

6 DICTIONNAIRE OF CONCEPTS ..................................................................... 93

6.1 Integration Zones ....................................................................... 93
6.2 Centre / Periphery....................................................................... 94
6.3 Regionalisation ........................................................................... 96
6.4 Polycentrism .............................................................................. 99
6.5 Gateway (cities) ........................................................................101
6.6 Area of influence........................................................................103
6.7 Barrier Effect .............................................................................105
6.8 Neighbourhood ..........................................................................107
6.9 Territorial cooperation/competition ...............................................109
6.10 Territorial Cohesion ....................................................................112
6.11 International Division of Labour ...................................................113
6.12 Territorial / Spatial differentiation.................................................115

PART B : THEMATIC ANALYSIS ................................................................... 114

7 DEMOGRAPHIC THEMATIC ANALYSIS ........................................................... 118

7.1 Demographic flows towards Europe ..............................................118
7.1.1 A background sketch ............................................................118
7.1.2 Demographic flows towards Europe – a selective process...........119
7.1.3 Migration – the prime driver behind population change..............120
7.1.4 Differing factor endowments and factor mobility .......................121
7.1.5 Implications for Capital Mobility .............................................122
7.1.6 Implications for Labour Mobility..............................................123

8 ECONOMIC THEMATIC ANALYSIS ............................................................... 127

8.1 Structural evolution of population and GDP PPS of World States (1952-
1998) 127
8.1.1 Introduction ........................................................................127
8.1.2 Demographic evolution of world states 1952-1998 ....................128
8.1.3 Economic evolution of world states 1952-1998 .........................137
8.1.4 Synthetic typology of joint demographic and economic evolutions of
world states 1952-1998 ....................................................................146
8.1.5 Conclusion: the effect of political enlargement on the economic and
demographic dynamic of the european union .......................................152
8.2 Benchmarking of WUTS Regions and Macroregions. ........................154
8.2.1 Benchmarking the World on the WUTS base.............................155
8.2.2 What about ESPON and other economic macroregions ...............159

9 ACCESSIBILITY THEMATIC ANALYSIS .......................................................... 163

9.1 Distance proximity to ESPON 29...................................................163
9.1.1 Common borders and maritim neighbourhood with ESPON 29 ....165
9.1.2 Colonial relations as factor of proximity with ESPON 29 .............166
9.1.3 Common language as factor of potential interactions with ESPON 29
168
9.2 Typology of ESPON countries, according to the air and trade flows ....169
9.2.1 Methodology .......................................................................169
9.2.2 The typology of ESPON countries on the trade flows..................170
9.2.3 The typology of ESPON countries on the airflows ......................171
9.2.4 Conclusion ..........................................................................172

9
10 ENVIRONMENT THEMATIC ANALYSIS ........................................................... 176
10.1 Romania : future eastern EU border environmental Challenges .........176
10.1.1 EU’s border security. ............................................................176
10.1.2 Air quality. ..........................................................................177
10.1.3 Pesticides............................................................................177
10.1.4 Wastes. ..............................................................................178
10.1.5 Radioactive waste. ...............................................................179
10.1.6 Oil. ....................................................................................180
10.1.7 Chemical weapons. ..............................................................181
10.1.8 Rocket fuel..........................................................................181
10.1.9 Nature, forest and biodiversity. ..............................................182
10.1.10 Water. .............................................................................183
10.1.11 Land resources. ................................................................185
10.1.12 Black Sea and Sea of Azov. ................................................185
10.1.13 References .......................................................................187

11 EUROPEAN NEIGHBOURHOOD THEMATIC ANALYSIS ......................................... 188

11.1 The Neighbourhoods question in the EIW programme. Triad,
Globalisation, Regionalisation ...............................................................188
11.2 The Regional economy. West-East integration, North-South divide ....190
11.2.1 Structures – GDP .................................................................190
11.2.2 Flows - Trade ......................................................................192
11.2.3 Flows – Public aid.................................................................221
11.2.4 Flows - Workers remittances..................................................230
11.2.5 Flows – Tourism...................................................................233
11.2.6 Flows - International migrations .............................................235
11.3 Regional policies ........................................................................243
11.3.1 The ambition of the European Neighbourhood Policy .................243
11.3.2 The shortcomings of the Barcelona process..............................244

12 MENTAL MAP THEMATIC ANALYSIS ............................................................. 248

12.1 Firms, Countries, International Organisations and NGOs’s: World
regionalisation .........................................................................................
...............................................................................................248
12.1.1 Introduction ........................................................................248
12.1.2 Methodology .......................................................................249
12.1.3 How we build the data base ...................................................249
12.1.4 How we get the results .........................................................258
12.1.5 Results ...............................................................................260

10
FIGURES

Figure 2-1 : Comparative demographic and economic evolution of countries from

South and East Mediterranean and East Central Europe .......................... 29
Figure 2-2 : A multiscalar Territorial Analysis of Kyoto’s Protocol ................... 37
Figure 2-3 : A global spatial vision of Kyoto’s Protocol .................................. 38

Figure 3-1 : ESPON Space ........................................................................ 40

Figure 3-2 : Mercator projection................................................................ 41
Figure 3-3 : Winkel Projection................................................................... 42
Figure 3-4 : World North Pole Azimutal Equidistant projections ...................... 43
Figure 3-5 : Template for Flows between Europe and the world ..................... 44
Figure 3-6 : Hammer-Aïtof Template for Flows between Europe and the world . 44
Figure 3-7: Europe Lambert Azimuthal Equal Areas projection ....................... 46
Figure 3-8 : World and regional Template................................................... 46
Figure 3-9 : « WUTS » ............................................................................ 48
Figure 3-10 : « ESPON Europe divisions » .................................................. 49
Figure 3-11 : « WORLD divisions » ............................................................ 49
Figure 3-12: « Pan European » divisions. ................................................... 50
Figure 3-13 : Regional delimitations of European ESPON countries ................. 50
Figure 3-14: Map backgrounds.................................................................. 51
Figure 3-15 : legend propositions .............................................................. 53
Figure 3-16: Minimum and maximum values have always to be written clearly. 54
Figure 3-17 : 4 examples of Pan European layout ........................................ 55
Figure 3-18 : 4 examples of world Layout................................................... 56
Figure 3-19 : 2 examples of ESPON layout.................................................. 57
Figure 3-20 : Graphics layout ................................................................... 57
Figure 3-21 : Colours chart ...................................................................... 58

Figure 5-1 : Size as multivariate dimension ................................................ 77

Figure 5-2 : principle component analysis of economic, social and environmental
dimendations ................................................................................... 79
Figure 5-3 : Classification tree .................................................................. 80
Figure 5-4 : Common border between states in pan-European area................ 83
Figure 5-5 : Discontinuities of GNP/inh. between states along terrestrial borders
...................................................................................................... 83
Figure 5-6 : Synthesis of air and trade flows between selected western
Mediterranean countries..................................................................... 92

Figure 7-1 : Permanent migrant flows .......................................................119

Figure 7-2: A schematic view of migration pattern between regions with differing
economic structure according to a traditional push-pull approach and
according to an SLM-approach ...........................................................126

Figure 8-1 : Evolution of the share of world population of the European Union
(1950-2020) ...................................................................................153
Figure 8-2 : Evolution of the share of world GDP (ppps) of the European Union
(1950-2020) ...................................................................................153
Figure 8-3 : Evolution of GDP ..................................................................160
Figure 8-4 : Share in the World Gross Product (constant 2000 US$) ..............160
Figure 8-5 : Evolution of GDP per capita....................................................161
Figure 8-6 : Annual evolution of GDP per capita (constant 2000 US$)............161

11
Figure 8-7 : Evolution of inward FDI stock in various regions........................162
Figure 8-8 : Share in the World FDI inward stock .......................................162

Figure 9-1 : Share of different WUTS in the extra-espon airflows of the groups of
country ..........................................................................................173
Figure 9-2 : Share of different WUTS in the extra-espon trade of the groups of
country ..........................................................................................174

Figure 10-1 : Dynamics of water abstraction from surface and ground water
systems (1992-1998) (1,000,000 m3) ................................................184

Figure 11-1 : GDP (constant 2000 b US$) .................................................192

Figure 11-3 : Goods trade (a) between consolidated EU25 and its neighbours,
2000-04 .........................................................................................196
Figure 11-4 : Share of EU25 and of Russia in the goods trade of the CIS (2003)
.....................................................................................................198
Figure 11-5 : Goods trade (imports + exports), b € ...................................199
Figure 11-6 : EU Exports and imports (billion €) with : ................................200
Figure 11-7 : Goods trade partners of central Europe countries and Turkey,
1993-2001......................................................................................201
Figure 11-8 : Foreign Direct Investment (inflows) % GDP ...........................212
Figure 11-9 : Geography of FDI of ESPON countries in the neighbourhood
Spanish investments in the neighbourhood (flows) ...............................213
Figure 11-10 : Geography of FDI of ESPON countries in the neighbourhood
German investments in the neighbourhood (stock) ...............................214
Figure 11-11 : Geography of FDI of ESPON countries in the neighbourhood.
Dutch investments in the neighbourhood (stock) ..................................215
Figure 11-12 : Dutch FDI stock abroad, by geographical destination (1994-2003)
.....................................................................................................215
Figure 11-13 : Geography of FDI of ESPON countries in the neighbourhood
Swedish investments in the neighbourhood (stock) ...............................216
Figure 11-14 : Geography of FDI of ESPON countries in the neighbourhood.
Finish investments in the neighbourhood (stock) ..................................217
Figure 11-15 : Inflows of FDI, breakdown by geographical origin ..................219
Figure 11-16 : Stocks of FDI in and out of Slovenia ....................................220
Figure 11-17 : Tourism flows in the European region ..................................234
Figure 11-18 : Inflows of migrants coming to Germany from the Balkans .......238
Figure 11-19 : Migration flows to and from Russia ......................................239
Figure 11-20 : Migration flow from and to the Russia Federation...................240

Figure 12-1 : Pernod-Ricard division of the World .......................................253

Figure 12-2 : Cadbury-Schweppes division of the World ..............................253
Figure 12-3 : Siemens division of the World...............................................253
Figure 12-4 : One of the Alcatel divisions of the World ...............................254
Figure 12-5 : two different divisions of the World proposed by the United Nations
.....................................................................................................254
Figure 12-6 : The presence list version / map version problem (AXA website).255
Figure 12-7 : The double belonging (Peugeot website) ................................255
Figure 12-8 : hierarchical tree for NGOs ....................................................259

12
MAPS

Map 8-1 : Share of the world population in 1952 ........................................129

Map 8-2 : Share of the world population in 1998 ........................................130
Map 8-3 : Annual average growth rate of population 1952-1998 ...................132
Map 8-4 : Difference between share of world population in 1952 and 1998 ....133
Map 8-5 : Typology of demographic evolutions 1952-1998..........................136
Map 8-6 : Share of the world GDP (ppp) in 1952 ........................................138
Map 8-7 : Share of the world GDP (ppp) in 1998 ........................................139
Map 8-8 : Annual average growth rate of GDP 1952-1998 ...........................141
Map 8-9 : Difference between world share of GDP (ppps) in 1952 and 1998 ...142
Map 8-10 : Typology of economic evolution 1952-1998 ...............................145
Map 8-11 : Synthetic typology of demographic and economic evolution (1952-
1998).............................................................................................150

Map 9-1 : Distance score ........................................................................164

Map 9-2 : Contiguity score ......................................................................166
Map 9-3 : Colonial score .........................................................................167
Map 9-4 : linguistic score ........................................................................169
Map 9-5 : typology of European countries on the basis of airflows.................172
Map 9-6 : Typology of European countries based on the trade flows ..............174

Map 11-1 : Geography of Turkish goods trade: a strong euromediterranean

feature ...........................................................................................202
Map 11-2 : Exchanges of goods and bilateral intensity of trade of Belarus with
the Euromed region in 2004. .............................................................204
Map 11-3 : Exchanges of goods and bilateral intensity of trade of Russia with the
Euromed region in 2004....................................................................204
Map 11-4 : Exchanges of goods and bilateral intensity of trade of Ukraine with
the Euromed region in 2004. .............................................................205
Map 11-5 : Exchanges of goods and bilateral intensity of trade of Algeria with the
Euromed region in 2004....................................................................205
Map 11-6 : Exchanges of goods and bilateral intensity of trade of Morocco with
the Euromed region in 2004. .............................................................206
Map 11-7 : Exchanges of goods and bilateral intensity of trade of Tunisia with the
Euromed region in 2004....................................................................206
Map 11-8 : Exchanges of goods and bilateral intensity of trade of Egypt with the
Euromed region in 2004....................................................................207
Map 11-9 : Exchanges of goods and bilateral intensity of trade of Jordan with the
Euromed region in 2004....................................................................207
Map 11-10 : Exchanges of goods and bilateral intensity of trade of Lebanon with
the Euromed region in 2004. .............................................................208
Map 11-11 : Exchanges of goods and bilateral intensity of trade of Turkey with
the Euromed region in 2004. .............................................................208
Map 11-12 : Geographical breakdown of European Commission’s official
development assistance from 2001 to 2004. ........................................223
Map 11-13 : Geographical breakdown of EU 15 members’ official development
assistance from 2001 to 2004. ...........................................................223
Map 11-14 : Geographical breakdown of United States’ official development
assistance from 2001 to 2004. ...........................................................224
Map 11-15 : Geographical breakdown of Japan’s official development assistance
from 2001 to 2004. ..........................................................................224

13
Map 11-16 : Total net official development assistance to the EU neighbourhood
from 2001 to 2004. ..........................................................................227
Map 11-17 : Net official development assistance per inhabitant in the EU
neighbourhood from 2001 to 2004. ....................................................227
Map 11-18 : Net official development assistance to the EU neighbourhood and
share of the EU (Commission + EU 15 members) from 1991 to 1995. .....229
Map 11-19 : Net official development assistance to the EU neighbourhood and
share of the EU (Commission + EU 15 members) from 1996 to 2000. .....229
Map 11-20 : Net official development assistance to the EU neighbourhood and
share of the EU (Commission + EU 15 members) from 2001 to 2004. .....229
Map 11-21 : Official development assistance to the EU neighbourhood and share
of the USA from 2001 to 2004. ..........................................................230
Map 11-22 : Official development assistance to the EU neighbourhood and share
of the Arab countries and Arab agencies from 2001 to 2004...................230

Map 12-1 : French firms dividing the World ...............................................262

Map 12-2 : German firms dividing the World..............................................262
Map 12-3 : British firms dividing the World ................................................262
Map 12-4 : Countries dividing the World....................................................264
Map 12-5 : International Organisations dividing the World ...........................265
Map 12-6 : the limits of zones by International Organisation ........................265
Map 12-7 : NGOs dividing the World in 5 regions........................................268
Map 12-8 : NGOs dividing the World in 8 regions........................................268
Map 12-9 : example of Chinese World map................................................269
Map 12-10 : Division of the World according to the World Bank - Geographical
discount .........................................................................................272
Map 12-11 : Division of the World according to the World Bank - Geographical
areas .............................................................................................272
Map 12-12 : Division of the World according to the Food & Agricultural
Organisation – Development, sub-level ...............................................273
Map 12-13 : Division of the World according to the United Nation Population
Division. Regions, general level & Development, sub-level. ....................274
Map 12-14 : smallest common denominator of regions................................275

14
TABLES

Table 2-1 : Basic information on selected territorial units in 1999 .................. 20

Table 2-2 : Example of G-Scale transformation ........................................... 23
Table 2-3 : Economic and demographic trends in SE Mediterranean and East
Central Europe according to various time-scales .................................... 27
Table 2-4 : Definition of political levels....................................................... 30
Table 2-5 : Draft version of political scales ................................................. 31
Table 4-1 : countries for Europe in the World ............................................ 67
Table 4-2 : Euromed list of countries ........................................................ 68
Table 4-3 : ESPON list of countries ........................................................... 69
Table 5-1 : Mean annual value of trade flows 1996-2000 (millions of US $) .... 70
Table 5-2 : Structural characteristics of selected Mediterranean countries (1999)
...................................................................................................... 75
Table 5-3 : Size as proportion of the whole system ..................................... 76
Table 5-4 : Size as rank of elementary spatial units .................................... 76
Table 5-5 : Selected demographic, economic and environmental characteristic
ratios .............................................................................................. 78
Table 5-6 : Dissimilarity matrix ................................................................ 80
Table 5-7 : Observed trade flows ............................................................. 87
Table 5-8 : Expected trade flows .............................................................. 87
Table 5-9 : Absolute residuals (Fij – F*ij) .................................................. 87
Table 5-10 : Relative residuals (Fij/F*ij).................................................... 87
Table 5-11 : Relation between economic development (GNP/inh.) and belonging
to EU. ............................................................................................. 89
Table 5-12 : Relation between Ecological efficiency (CO2/GNP) and belonging to
EU. ................................................................................................. 89
Table 5-13 : Synthesis of three types of flows between Mediterranean countries
...................................................................................................... 91
Table 8-1 : Distribution of GDP ...............................................................156
Table 8-2 : Distribution of GDP (in percentage of the world total). Average
annual percentage distributed in periods of five years ...........................158
Table 11-1 : The three territorial paths of the world economy ......................189
Table 11-2 : The index of regionalisation ...................................................190
Table 11-3 : GDP per inhab. (PPP, constant 2000 US$) ...............................191
Table 11-4 : Consolidated EU15’s trade of goods (%).................................194
Table 11-5 : Spanish FDI flows abroad, by geographical destination (1999-2004)
.....................................................................................................213
Table 11-6 : German FDI stock abroad, by geographical destination (1994-2003)
.....................................................................................................214
Table 11-7 : Swedish FDI stock abroad, by geographical destination (1994-2003)
.....................................................................................................216
Table 11-8 : Finish FDI stock abroad, by geographical destination (1994-2002)
.....................................................................................................217
Table 11-9 : The official development assistance disbursed by the main donors in
the world (2002-03, Million constant US dollar, 2003 prices) ..................222
Table 11-10 : Workers’ remittances (current $), in % of the GDP.................232
Table 11-11 : Destination (Germans, Spanish) and origin (Egypt) of tourists, %
.....................................................................................................233
Table 11-12 : Evolution of population in CIS neighbours ..............................238
Table 11-13 : France, main inflows of foreign population by nationality
(thousands) ....................................................................................242

15
Table 11-14 : Portugal, major origins of foreign population (stock) by nationality
(thousands) ....................................................................................242
Table 11-15 : EU’s subsidies to the CEEC and the Mediterranean partners Annual
average, 1995-2004.........................................................................246
Table 12-1 : list of NGOs.........................................................................251
Table 12-2 : first step of building the matrix. To which zone belongs a country?
.....................................................................................................257
Table 12-3 : second step of building the matrix. For each questionnaires a matrix
has been built .................................................................................257
Table 12-4 : third step of building the matrix. Sum of all individual matrixes .257
Table 12-5 : number of regions................................................................261
Table 12-6 : composition of regions formed by the most significant partition ..266

16
1 INTRODUCTION

The first part of this second volume of the final report of the ESPON project
3.4.1. Europe in the World is dedicated to the presentation of the methods used
by the project partners and the tools they produce (new map templates, world
databases…) to achieve it. It first focus on what it is at stake when one introduce
the World as a new dimension in European spatial studies especially concerning
the necessity to broaden the time scale. The enlargement of space and time
focuses induces technical adaptations that are described in the chapters about
map templates and database building. The methodological framework for the
analysis of structures and flows are then shortly presented. This part finally
contain dictionary of concepts that detail the main concepts used in this project.

The second part of the volume proposes the thematic analysis that did not find
their way to the first volume, because they are very much detailed, too much for
the synthetic presentations of the first volume. Those analyses are grouped
according the main packages that organised the second work package of the
project: demography, economy, accessibility, environment, neighbourhood,
mental maps…

17
 PART A

INTEGRATED TOOLS

18
2 SCALE, SCALE, SCALE…

On se croit naturellement bien plus capable d'arriver au centre

des choses que d'embrasser leur circonférence. L'étendue
visible du monde nous surpasse visiblement ; mais comme
c'est nous qui surpassons les petites choses, nous nous
croyons plus capables de les posséder ; et cependant il ne faut
pas moins de capacité pour aller jusqu'au néant que jusqu'au
tout. […]
Connaissons donc notre portée: nous sommes quelque chose
et ne sommes pas tout. Ce que nous avons d'être nous dérobe
la connaissance des premiers principes qui naissent du néant,
et le peu que nous avons d'être nous cache la vue de l'infini.
B. Pascal (1671), Les Pensées, art. XVII, Connaissance
générale de l’homme

System analysis offers a good theoretical framework for the analysis of the
situation of Europe in the World but this general method has to be adapted to the
specific problems of an analysis which has to focus on the territorial dimension of
political action. The introduction of a fourth dimension in European Spatial
Planning has many consequences which can be classified into four interrelated
problems: geographical dimension, time dimension, thematic dimension and
political dimension. This notion of “dimension” is indeed not very clear and can
easily be confused with the systemic concepts of “sub-system” or “hierarchical
level” which has been defined in previous section. To clarify the problem, we
propose to introduce the concept of “scale” which is easier to formalise from
mathematical point of view.

2.1 Scales and Levels

The geographical dimension is firstly analysed because it offers a clear and useful
distinction between the notions of spatial scale and territorial levels. To illustrate
this point, we have established a table which displays selected geographical,
demographic and economic characteristics of heterogeneous territorial units
(table 2-1).

19
 Table 2-1 : Basic information on selected territorial units in 1999
TERRITORIAL UNITS Political AREA Pop. 1999 GDP 1999
Level km2 x. 1000 x. Mio. $ pps
WORLD Global 133 828 960 5 976 504 24 987 088

NAFTA Supranational 21 557 900 409 059 8 994 767

Canada National 9 970 610 30 957 664 021
Mexico National 1 958 200 98 807 679 523
USA National 9 629 090 279 295 7 651 223

UE15 Supranational 3 339 370 378 029 6 897 641

Germany National 357 030 82 075 1 483 607
Netherlands National 41 530 15 800 331 670
Greece National 131 960 10 579 122 405
Luxembourg National 3 000 433 14 595
Malta National 300 390 4 356
France National 647 300 60 825 1 196 613
Western France Infranational 86 987 7 854 130 801
Bretagne Infranational 27 811 2 937 48 526
Finistère Infranational 6 882 860 14 773
Ile de France Infranational 12 279 11 060 337 434
Hauts de Seine Infranational 179 1 445 65 240
Paris Local authority 108 2 144 120 643
Source: WDI, Eurostat, Maddisson database.

If we examine this table from political point of view, we can notice that territorial
units belong to at least five different categories which are associated to different
levels of analysis.

ƒ Global level (0) is represented by a single territorial unit which is the world
as a whole.
ƒ Supranational level (1) is represented here by NAFTA and UE15 which are
world regions based on group of states associated by treaties.
ƒ National level (2) is represented by various states (Canada, Mexico,
Germany, Malta…) which are very different in size but display the same
characteristics of political autonomy, existence of independent statistical
system, etc.
ƒ Infranational level (3) is represented by the various levels of
administrative division of states according to national or supranational
criteria. For example, France has official territorial divisions with partial
autonomy and political representation (regions, departments, communes),
but also technical divisions related to supranational organisation of
European Union (definition of NUTS1 regions called ZEAT).
ƒ Local level (4) is represented by Paris which is at the same time a regional
division (from level NUTS 3) and a local authority (from level NUTS 5)
defined as smallest level of administrative organisation or political
representation.

20
If we examine the table from the thematic point of view, we can consider that
the comparison of territorial units of the same political level is not necessarily
relevant and that, in many cases, empirical comparison would be more relevant
through a combination of territorial units of different political levels because the
scales of territorial units are completely different.

ƒ From a geographical point of view, does it really make sense to compare

two states like Malta (300 km2) and Canada (9 970 610 km2) or two
NUTS 3 regions like Hauts-de-Seine (179 km2) and Finistère (6882 km2)?
ƒ From a demographic point of view, is it relevant to compare Luxembourg
(0.4 millions of inhabitant) to Germany (82.1 millions of inhabitant) or is it
better to decide – as done by Eurostat - that Luxembourg can also be
described as a NUTS3 region which can be more easily compared to
Finistère (0.9 millions of inhabitant) or Hauts-de-Seine (1.4 millions of
inhabitants)?
ƒ From an economic point of view, is it interesting to compare the
Netherlands (332 billions of $ pps) to a small Mediterranean island like
Malta (4 billions of $ pps) or a continental economy like United States of
America (7651 billions of $ pps) and isn’t it more interesting to establish
comparison with another metropolitan area of comparable size like Ile-de-
France (337 billions of $ pps), despite the fact that it does not belong to
the same political level?

The answer to such questions is not obvious because, according to the target of
the analysis, we can either decide to focus on political criteria or thematic criteria
when we select the basic territorial units which will be the basis of the analysis. A
thematic harmonisation of the territorial units presents many advantages for the
description of spatial trends and helps to avoid many traps in the interpretation
of results. But at the same time, the introduction of heterogeneous political
levels makes the elaboration of policy recommendations more difficult because
territorial units of different political levels have not the same degree of autonomy
in political action.

2.2 Geographical Scale (G-Scale)

The proper solution to the previous problem is not to oppose the political
approach (levels) and the thematic approach (scales), but to find a coherent and
clear way for their combination in the framework of ESPON project “Europe in the
World”. One important milestone for an objective approach is the concept of G-
Scale proposed by Hagget (1965). When he introduced the concept of G-Scale,
the initial idea of P. Haggett was to find an homogeneous mathematical solution

21
for the measure of surfaces which was expressed in different statistical units
(spare kilometres, square miles, acres, hectares…). Therefore, the purpose of G-
scale was to establish a universal measure of “Geographical scale” based on the
decimal logarithm of the area of the Earth’s surface divided by the area of the
target portion of space according to equation (1)

G (AREAi) = log10 ( AREAEarth/ AREAi) (1)

As an application of initial Hagget’s proposal, we can try to evaluate the G-Scales

value of the area covered by NAFTA (21.6 millions of km2). As the total area of
the earth is approximately equal to 510.1 millions of km2 (including both land
and oceans), NAFTA represents 21.6/510.1= 4.22% of earth surface which
correspond to G=1.37. In the case of Mexico (1.96 millions of km2), the share of
earth surface is only 0.38% which corresponds to G=2.41. At first glance, these
figures seem rather abstract, especially because of logarithmic transformation,
but they offer very interesting properties:

ƒ The G-scale is based on a natural referential (the whole Earth surface)

which is equal to the reference value G= 0
ƒ The interpretation of the values of G is very easy if we notice that they are
related to the power of 10: G=1 represents 10%, G=2 represents 1%,
G=3 represents 0.1 %, etc…
ƒ The change of a referential to another one is obtained by simple difference
of the value of G. For example, if we want to compare the area of Mexico’s
to the referential of NAFTA, we just have to subtract their respective G-
values: 2.47-1.31 = 1.13 which indicates immediately that the area of
Mexico is more or less equal to 10% of the area of NAFTA.

Of course, we can also address some criticism to Haggett’s initial proposal and
propose some adaptation. For example, we can estimate that the good
referential for the estimation of the surface of NAFTA is not the whole area of the
Earth but only the land area (148.8 billions of km2) without oceans (361.3
millions of km2). In this case, NAFTA represents 14.5% of the land areas and
obtains a better score with G= 0.84. We could also develop a more political
approach and decide to exclude Antarctica from the definition of land area,
because it is a common property of mankind and not the property of a given
sovereign states. In this case, the “political area” of the World is reduced to
133.8 millions of km2, from which NAFTA represents 16.1% with a value
G=0.79.

The reader has probably noticed that in the last proposed measure of the scale of
NAFTA, we have replaced the term “Earth” by the term “World”. Indeed, the
term “Earth” is related to the natural subsystem of Universe which is our Blue

22
Planet whereas “World” is related to the global system of mankind which, as far
as we know, is not included actually in a social system of upper level. This crucial
distinction between Earth (natural system) and World (social system) leads us to
propose another version of Hagget’s scale which will keep the initial name of G-
Scale but with another meaning where G will be the abbreviation of “Global” and
not “Geographical”. This new version of Hagget’s scale can now be applied to any
kind of phenomena distributed across the world, not only area but also
population, wealth, water resources, carbon dioxide emission, etc… Each
phenomena which is defined as a raw count variable (X) can indeed be measured
on the Global scale of the World according to equation (2):

GWorld (Xi) = log10 ( XWorld/ Xi) (2)

As an example, we have transformed all initial information of table 2-1 into their
equivalent on the Global Scale of the World (table 2-2).

Table 2-2 : Example of G-Scale transformation

% World G-scale
TERRITORIAL UNITS AREA POP GDP AREA POP GDP
WORLD 100% 100% 100% 0 0 0

NAFTA 16.11% 6.84% 36.00% 0.79 1.16 0.44

Canada 7.45% 0.52% 2.66% 1.13 2.29 1.58
Mexico 1.46% 1.65% 2.72% 1.83 1.78 1.57
USA 7.20% 4.67% 30.62% 1.14 1.33 0.51

UE15 2.50% 6.33% 27.60% 1.60 1.20 0.56

Germany 0.27% 1.37% 5.94% 2.57 1.86 1.23
Netherlands 0.03% 0.26% 1.33% 3.51 2.58 1.88
Greece 0.10% 0.18% 0.49% 3.01 2.75 2.31
Luxembourg 0.00% 0.01% 0.06% 4.65 4.14 3.23
Cyprus 0.00% 0.01% 0.02% 5.65 4.19 3.76
France 0.48% 1.02% 4.79% 2.32 1.99 1.32
Western France 0.06% 0.13% 0.52% 3.19 2.88 2.28
Bretagne 0.02% 0.05% 0.19% 3.68 3.31 2.71
Finistère 0.01% 0.01% 0.06% 4.29 3.84 3.23
Ile de France 0.01% 0.19% 1.35% 4.04 2.73 1.87
Hauts de Seine 0.00% 0.04% 0.48% 6.09 3.45 2.32
Paris 0.00% 0.02% 0.26% 5.87 3.62 2.58

The comparison of table 2-1 and table 2-2 proves that the transformation of
initial information into standardised value (share of the world and Global World
Scale) presents many advantages for the analysis to be developed in the project
Europe in the World:

23
ƒ Immediate evaluation of the size of territorial units at the world scale: with
table 2-1, it was not easy to define the size of a territorial unit at the world
scale and the reader was obliged to make really complicated arithmetic
operations to perform this evaluation. For example, the demographic size
of Netherlands (15.8 millions of inhabitants) had to be compared to the
world population (6 billions of inhabitant) when the results is immediately
obtained in Table 2-2 (0.26 % of world population, G=2.58).
ƒ Immediate comparison of the size of a territorial units for different criteria:
with table 2-1, it was not easy to compare the geographic, demographic
and economic size of territorial units at the world scale, because they were
measured in different units (km2, inhabitants, $ pps) and the total sum of
the World was not the same. With table 2-2, we can see immediately that
the size of France dramatically varies according to the criteria and is the
most important for economy (4.8% / G=1.32), then demography (1.02% /
G=1.99), then geographical area (0.48% / G=2.32).
ƒ Immediate building of objective typologies for size criteria: due to the
standardisation of criteria and the proprieties of logarithmic scale, it is
very easy to build typologies according to size criteria when using G-Scale.
We can for example consider as “Very Large” the units situated between
10% and 100% of the World (G comprise between 0 and 1), as “Large”
the units between 1% and 10 % of the World (G comprise between 1 and
2), as “Medium” the units between 0.1% and 1% of the World (G
comprise between 2 and 3), as “Small” the units between 0.01% and
0.1% of the World (G comprise between 3 and 4) and finally as “Very
small” the units under 0.01% of the world (G lower than 4) and can be
neglected in the analysis as their contribution to the result is less than
1/10 000e of the target phenomena. The fact that the size of a unit is
decreasing when the value of G increase appears at first glance something
difficult for the reader. But we can notice that the form of scale is in fact
consistent with the notion of “level” which has been presented in previous
section. G scale is also consistent with natural language when we say, for
example, that from a demographic point of view USA is a state of “first
level” (G≈1), France “second level” state (G≈2) and Greece a “third level”
state (G≈3).
ƒ Easy transformation of scale according to a hierarchy of levels: As noticed
previously about initial formulation of Haggett’s scale, it is easy to change
the referential of any measure based on G-scale by simple computation of
arithmetic differences between the G-scale of a territorial and the G-scale
of any territorial unit of upper level. For example, the demographic size of
Paris is “Small” at the world scale (GWorld= 3.62), but “Medium” at the
EU15 scale (GEU15 = 3.62-1.20 = 2.42), “Large” at the national scale
(GFrance = 3.62-1.99 = 1.63) and “Very Large” at the regional scale (GIle
de France= 3.62 – 2.73 = 0.89).

24
 ƒ Easy computation of standardised ratio and distribution indexes: Last but
not least, the normalisation of raw count variables according to the world
total makes very easy the computation of all derived ratio and all related
indexes of unequal economic allocation of resources to population or
unequal geographic distribution of population. For example, the fact that
USA represents 4.7% of world population and 30.6% of world GDP (pps)
indicates immediately that their GDP (pps) per inhabitant is equal to
(30.6/4.7) = 6.6 times higher than the average value of GDP/inh of the
world. We can also immediately deduce that their population density is a
bit lower than world population density because the ratio of their share of
population and area is equal to (4.6/7.2) = 0.65.
ƒ Opportunity to distribute statistical results with limited copyright
problems?: The fact that we do not use initial raw count variables or ratio
but share of world population and standardised index could be an
opportunity to distribute the results of ESPON project “Europe in the
World” without being obliged to face a huge number of copyright. It is a
point to check from a legal point of view, but if the transformation or raw
count variables into share of the world and G-scale can be considered as
an intellectual added value, ESPON can probably be allowed to distribute
more easily related tables and maps1.

2.3 Time Scale (T-Scale)

The previous proposals on geographical scale of analysis of phenomena (G-Scale)

is not independent from another discussion related to the choice of time scale (T-
Scale) to be chosen in the analysis about the situation of Europe in the World.
The link between space and time scales is related to the general empirical rule
according to which systems of large size offers a higher level of stability through
time than systems of smaller size. There are of course many exceptions to this
heuristic observation but it remains generally true and suggests that the analysis
of spatial trends at the world scale should necessary be based on longer time
periods than other analysis realised at regional scale in the framework of the
ESPON program.

Another argument in favour of the use of longer time scales in the framework of
project ESPON 3.4.1 is the fact that it is easier to obtain long term time-series
1
G-Scale transformation can be considered as a very basic system of cryptography. For example, the G-
scale value of the population of USA in 1999 (1.16) is the encrypted value of the real figure of population (279.3
millions of inhabitant) through the application of the cryptographic formula G(X) = log10 (Key/X) , where the
key of the code is the total population of the world in 1999 (5976.5 millions of inhabitants). Without this key
value, it is not possible to obtain the real figure which was in the initial database. The legal problem is to
evaluate if the cryptographic system is sufficient to protect initial information and if the added value of the G-
scale transformation is sufficient to consider that it is an intellectual creation.

25
when basic territorial units are states than when it is NUTS2 or NUTS3 regions.
During the last lead partner meeting of the ESPON project (March 2005), the
panel group on ESPON core indicators noticed that only 4 indicators on an
amount of 110 was dynamics, 2 of them related to past trends and 2 others to
estimated future trends. This strong limitation of dynamic indicators is obviously
related to the difficulty to elaborate complete statistical databases at NUTS2 or
NUTS 3 levels for the 29 different states of the ESPON project and also to the
many changes of administrative territorial divisions which took place in Europe
during the period 1989-1995 (see. SIR of ESPON Project 3.2 on long term
database). But it is a crucial problem for a spatial planning program like ESPON
which can not elaborate long or mid-term scenarios without information on past
trends.

Even if the spatial resolution is lower, the database elaborated by the ESPON
project 3.4.1 should enlarge the time focus to longer period in past (1960-2000)
and future (2000-2030) in order to provide this information to other ESPON TPG,
especially project 3.2 which has to elaborate a long term database for the
quantitative evolution of political scenarios. The time series elaborated at the
state level by ESPON 3.4.1 will indeed be transformed into regional estimations
according to various procedures of desegregation. But in the case of other
projects like ESPON 3.3. Lisbon Strategy, the time series elaborated at state
level by ESPON 3.4.1 can also contribute to the development of a historical
perspective of benchmarking of economic growth and competitiveness between
Europe and other parts of the World.

The introduction of a historical perspective for the analysis of the situation of

Europe in the World is something which can dramatically modify the approach of
European Spatial Planning because it implies a multiscalar evolution of trends not
only in space but also in time. To illustrate this notion of time scale, we propose,
as we have done for G-Scale, to analyse an empirical example which is the
comparison of economic and demographic trends in southern and eastern
neighbourhood of Europe (figure 2-1 & table 2-3)

26
 Table 2-3 : Economic and demographic trends in SE Mediterranean and East Central Europe
according to various time-scales

South and East

East Central Europe
T-scale Mediterranea
Pop GDP Pop GDP
0 Very Short 1999/2000 1.8% 5.1% -0.2% 4.4%
1 Short 1993*/1998* 2.0% 4.2% -0.3% -0.2%
2 Medium 1988*/1998* 2.2% 3.8% 0.0% -3.0%
3 Long 1978*/1998* 2.4% 3.9% 0.2% -0.9%
4 Very Long 1958*/1998* 2.5% 4.9% 0.6% 1.7%
(*) indicate five year mean. For example, 1993* is the mean value of the period 1991-1995
Source: Maddisson database.

The aim of this example is not to discuss the interest of a benchmarking between
eastern and southern part of the western European neighbourhood but to
introduce the interest of a multiscalar analysis of trends in time and to propose
simple rules for the definition of T-scale in future research of project developed
by ESPON project “Europe in the World”.

ƒ Very short term evolution (T-scale=0) will be defined as all trends which
are based on a time span lower than 5 years. Between 1999 and 2000 the
countries of East Central Europe (ECO) have a rate of economic growth
which is very high and approximately equivalent to that of countries of
South and East Mediterranea (SEM). But this information is of low interest
because it is based on the evolution of a single year.
ƒ Short term evolution (T-Scale=1) is related to evolutions observed on a
period of 5 years 2 which can be considered as the minimum period of
time for the observation of significant trends at world scale. According to
this criteria, we can say that countries from SEM have experimented
positive trends from a demographic (+2.0 %/year) and economic point of
view (+4.0%/year) over the recent period, when countries from ECO were
characterised by slightly negative rates on both criteria (-0.3% and -0.2%
/ year
ƒ Medium term evolution (T-scale=2) is related to evolution on a period of
10-15 years. They are related to more structural evolution and, in the case
of ECO, this time scale characterises typically the evolution since the fall of
the iron curtain in 1989. The change of T-Scale has little effect on the
measure of trends in SEM countries but produce an important change in
the appreciation of economic trends in East Central Europe which appears

2
Which means not only the evolution between two different years separated by 5 years (1995/2000) but
the evolution between two period of five years (1991-1995 and 1996-2000) for which we have computed the
average value before calculating the mean (average?) rate of evolution (1993*/1998*). We could also use a
regression model of linear (X=a.t+b) or exponential (logX=exp(a.t+b)) form for the estimation of trends at
various time-scales.

27
 very negative (-3.0%) when they were just slightly negative in a short
term (-0.2%) and highly positive (+4.4%) in a very short term.
ƒ Long term evolution (T-Scale=3) is related to evolution on a period of 20-
25 years, which begins to be mainly related to structural factors but can
be influenced by cyclic factors. At this scale of time, the situation of
countries from ECO is not as negative as previously, at least from a
demographic point of view (+0.2%/year).
ƒ Very long term evolution (T-Scale=4) is related to evolutions observed on
a period of 40-50 years which is in fact very short from a historical point of
view but can be considered as the maximum time for most political
decisions. In our example, it is clear that the economic and demographic
growth of SEM countries has been much higher than that of ECO countries
during the last 50 years. In 1950, the population and economic size of
SEM countries was 50% of the size of ECO countries, but they have
become equal for both criteria at the beginning of the 1990’s and we can
suppose that the situation will be reversed around 2020-2030.

28
 Figure 2-1 : Comparative demographic and economic evolution of countries from South and East
Mediterranean and East Central Europe
(a) Population 1950-2000

250

200
Millions of inhabitants

150

100

50

0
1950 1960 1970 1980 1990 2000

South and East Mediterranea East Central Europe

(b) GDP (pps) 1950-2000

1500

1200
Billions of $ (pps)

900

600

300

0
1950 1960 1970 1980 1990 2000

South and East Mediterranea East Central Europe

Source: Maddisson database

East Central Europe: Albania, Armenia, Azerbaijan, Bulgaria, Bosnia, Belarus, Czech Republic, Estonia,
Georgia, Croatia, Hungary, Lithuania, Moldova, Macedonia, Poland, Romania, Serbia/Montenegro, Slovakia,
Slovenia, Ukraine.
South and East Mediterranean Sea: Cyprus, Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Latvia, Malta,
Syria, Tunisia, Turkey, Morocco, West Bank &Gaza stripe.

29
2.4 Political levels (P-levels) and political scale (P-Scale)

The previous technical discussion on G-Scale and T-Scale was necessary to

define the ground basis of political scales (P-scale) to be used in the framework
of project Europe in the World for the elaboration of the 4th dimension of political
action. As explained in the beginning of this section, we have to face a difficult
problem of definition in order to distinguish between political levels and political
scales. Political levels can be defined as a hierarchy of systems and subsystems
with alternative clear and unclear territorial definitions (table 2-4).

Table 2-4 : Definition of political levels

Political basic TERRITORIAL
LEVELS units
0 World
1 World regions
2 States
Administrative regions Bayern, Arkansas, Basel-Stadt,
3 (because various possible levels of
& Metropolitan areas
4 Local authority
5 Local neighbourhood
Examples
World
NAFTA, Western Europe,
EU25, ESPON29, Asia, …
USA, Germany, Liechtenstein,
Southern Korea, ...
Wallonia, Greater London, ...
London, Ixelles, Paris, Sucy-en
Brie,…
Paris XIIIe, Manhattan,
Ramblas, Mala Strana , ...
SPATIAL
definition
Clear
(at least for land areas but not
necessary for oceans)
Unclear
(cross-cuting divisions according to
criteria)
Clear
(with some exceptions like Western
Sahara, Tai-Wan )
Unclear
administrative divisions)
Rather Clear
(when defined on an
administrative basis )
Unclear
(not necessary based on fixed
administrative division, )

The clearest definitions are related to political levels 0, 2 and 4. The level of the
World (0) is the global level of political organisation of mankind considered as a
whole. Local authority (4) can be defined in a symmetric way as the first level of
political organisation. State level (2) is the central level of political organisation
which defines the system of international relation. But between each of this
relatively clear levels of political organisation, we can find an intermediate
system (1,3,5) which has gained growing importance over the last twenty years
but without clear definition in most cases. In the case of world regions (1), the
problem relies on the great variety of criteria that can be employed for the
divisions of regions (juridical, economical, demographical, mental maps, flows,
…), producing cross-cutting divisions of the world without clear solutions for the
definition of a “best partition” (see Key Question 1). In the case of administrative
regions (4), the problem is not related to the fact that administrative division are
fuzzy but to the fact that there is a great number of regional divisions in each
state according to geographical scale and to functional criteria. The

30
administrative division of each state are the result of national culture and history,
which means that they are generally not comparable from one state to another
(Cf. the MAUP problem for NUTS2/NUTS3 divisions in Europe). Another problem
is related to the fact that towns which are major functional realities generally do
not fit perfectly to administrative units. In the case of local neighbourhood (5)
the problem is related to the fact that social groups have various
representations, various mental maps of the place where they live which can not
necessary be taken into account by local administrative authorities. But at the
same time, these local neighbourhoods (“my street”, “mon quartier”) are
perceived as a major reality by citizens and are often the crucial level of
democratic organisation of society.

The notion of political scale is different from the notion of political level because
political scale is not based on the political definition of territorial units but on
their functional capacity to influence the evolution of the rest of the World. The
political level can contribute to the definition of the political scale (e.g. an
increase political integration of European Union can increase its capacity of action
at world scale) but the notions are fundamentally different. The definition of
political scale (P-Scale) is clearly related to the previous defined geographical
scale and time scale, which can be illustrated by a draft version of political scales
presented in table 2-5.

Table 2-5 : Draft version of political scales

Political scale Power level Exemple G-scale T-scale
0 Global USA (?) 0.5< >4
1 Macro-regional EU25, Japan-China 0.5 to 1 >3
2 Regional Russia, India 1 to 1.5 >2
3 Micro-regional Sweden, Benelux > 1.5 variable

As a very preliminary proposal, we propose to distinguish between 4 different

levels of political scale, which are presented here in a general way but should be
adapted to different criteria (economic, demographic, environmental, social,
cultural …) with different results in terms of classification of territorial units.

ƒ Global political scale (0) characterises states or international organisation

which have the power to influence the evolution of the rest of the World
and which are subject to no limitations in their political decisions. This
situation implies a situation of global domination (G-Scale) for a set of
criteria which corresponds to an important share of world resources for
these criteria. In practical terms, a share of 30% of the world resources
(G<0.5) is generally sufficient if any other potential challenger has a share
of resource greater than 10-15%. This situation is actually typically
observed for the United States for a great number of criteria (economy,

31
 military power, cultural influence …). From the point of view of time, the
global domination implies the development of long term strategies on at
least half a century (T-scale > 4) both for the establishment of the global
power and for its reproduction in the future. Once more, the situation of
the United States is typical with very powerful think-thanks (private or
public) which provide analysis, visions and scenarios for the realisation of
long term objectives.
ƒ Macroregional political scale (1) characterises states or international
organisations which can influence the evolution of the rest of the world but
at a less degree than before and with a higher level of dependency to the
evolutions observed in the rest of the world. In territorial terms, this
situation is generally associated to a dominant influence on a limited part
of the world and a less important capacity of actions in the rest of the
world. European Union on the one hand, China and Japan on the other
hands are typically representative of this category of political scale. But
with the important difference that European Union is an emerging political
level when China and Japan are rather engaged in a competition for
political and economic domination in eastern Asia. In both cases, the G-
Scale is comprised between 0.5 and 1.0, which means that these entities
account for 10 to 30% of world share on several criteria. In terms of T-
Scale, the strategies developed by these entities are generally shorter 20-
25 years but are based on important administrative bodies (European
Commission, Japan minister of industry and economy …) linked with
research institutes and expert groups.
ƒ Regional political scale (2) corresponds to a lower level of states or
international organisations which is submitted to world trends and has a
limited influence on them or only for certain criteria or functions. Their
territorial influence is generally limited to the states with which they have
common border but which can represent an important part of the world in
geographic or demographic terms. Good examples of this situation are
provided by India, Russia and Brazil, but with very different situations
according to the nature of their relations with neighbouring states
(conflict, common history, economic treaties …). Once more, the political
scale defines potentialities which are more or less used and can be
negatively or positively influenced by the evolution of political levels. The
G-Scale of regional political construction is limited from 3 to 10% of the
world share and the associated T-Scale is limited to evolutions which are
generally not planned or predictable on time periods greater than 10
years.
ƒ Micro-regional political scale (3) can be applied to the case of states or
international organisations of large to medium size but which benefit from
the lack of powerful challengers in their immediate neighbourhood, which
offers them a local area of influence. The regional influences of Sweden in

32
 the Baltic Sea, or Vietnam in former colonial region of Indochina, are good
examples of such situation. In both cases, the micro-regional area of
political influence is included in a wider political area at regional or macro-
regional scale which indicates that they can be analysed as sub-systems
more or less integrated to systems of upper level. The G-Scale of such
micro-regional political organisation can be very different but does not
represent generally more than 3% of world share. In terms of T-scale, the
situation is not simple because such micro-regional construction can be
very solid and based on long term period of historical existence. The fact
that micro-regional scale is based on relations between a limited number
of states can make easier a strong integration, as in the case of Benelux
which still exists as an important political reality inside the European
Union. We can assume that a good knowledge of the micro-regional
political scale is a crucial topic for the understanding of political
constructions of upper level to which they provide elementary bricks.

The definition of a political scale is a useful tool for the analysis of the situation of
Europe in the World and for the analysis of the consequences of globalisation on
the development of the European territory. But we have to be aware that this
very hierarchical approach of international relations (mainly based on the
geopolitical concept of power) is not always relevant and that many other
aspects of globalisation are based on transnational flows and networks which can
not be captured by these classical concepts. For example, transnational firms
developed territorial strategies which are not necessary the same than those of
states or international political organisations to which they belong originally and
in many cases it is difficult to define their nationality. The economic size of
biggest world firms can be equivalent to the size of states of medium and large
size (G-Scale between 2 and 3) but their strategies are often developed on
shorter periods of time (T-scale lower than 2) and they can introduce a very high
level of uncertainty in spatial planning. The same is true for World Cities like
New-York, London or Tokyo which are parts of a global network of
communication which is partly independent from the political territorial division
of the world and can not be analysed through the classical geopolitical grid of
levels of power. World is definitively complicated …

33
2.5 Conclusion

Is this the Region, this the Soil, the Clime,

Said then the lost Arch Angel, this the seat
That we must change for Heav’n […]
Hail horrours, hail
Infernal world, and thou profoundest Hell
Receive thy new Possessor: One who brings
A mind not to be chang’d by Place and Time

J. Milton (1674), Paradise Lost, I, 242-254

Some reader of these pages has probably been disappointed by the huge number
of theoretical and methodological considerations which has been introduced as
preliminary to the research. But the clarification of concepts and tools is, in the
author’s opinion, the necessary condition for the development of good empirical
results related to relevant policy recommendations. The introduction of a fourth
dimension in the actual practice of European Spatial Planners is not a trivial
question and it is necessary to obtain a good agreement on concepts and
methods, from both scientific and political points of view, before to develop
intensive research on the subject. The time which is apparently wasted on
theoretical boring consideration can be in fact a gain for future research in a
longer term perspective like the one of ESPON II (T-Scale > 1 ….).

As a form of apologize to the reader which accepted to follow the authors in this
difficult introduction to the project, we propose a simple political application
which, we hope, demonstrates the interest of the way we propose to follow in
future development of project 3.4.1. We have chosen for this the example of the
application of Kyoto’s protocol on the reduction of carbon dioxide emission.

The classical approach of the problem is the international approach which is

based on the negotiation between independent states which agree or disagree to
sign the protocol of Kyoto, with a minimum number of states requested for the
application of the international treaty. As we can see on figure 2-2 it is possible
and interesting to transpose at world scale the multiscalar territorial approach
which was used in the ESPON program for the analysis of regional situations. The
basic territorial level of analysis is the distribution of world population and CO2
emission by states (Figure 2-2-c) where we can easily compare the share for
both criteria (application of G-Scale). According to the fact that CO2 emission are
not limited to the territory of a given states but produce a global change of the
climate of the earth, it is logical to consider that it is a common responsibility and
that, in a situation of international justice, each state should not produce a share
of CO2 greater than its share of population without prejudice for the rest of
mankind. From this point of view, the map indicates clearly that all states of the

34
ESPON area in a situation of excess of CO2 emission according to their
population3. At this level of analysis, it is very difficult to obtain an international
consensus, especially if we take into account the historical dimension of the
phenomena (T-scale>4) and the fact that a major part of the actual stock of the
CO2 has been produced by industrial countries from Europe and Northern
America in XIXth and XXth centuries. Emerging countries have full right to invoke
this historical responsibility of most developed countries and to suspect them to
use sustainable development as a way to limit their actual economic growth.

To analyse the phenomena at different territorial scales like division of the world
in 17 regions or 3 macro-regions (figure 2-2-b) is especially interesting because
it introduces alternative political approaches of the solution to the global problem
of climate change. At regional level (figure 2-2-b), we can for example notice
that the fusion of China, Japan and Korea into a single unit produces equilibrium
between the share of population and CO2 emission. It means that the objective
of global equilibrium could be achieved in this case by a technical cooperation
between the states of the region instead of separate actions at national level.
Japan has indeed proposed to obtain delays for the reduction of its own emission
of CO2 but to help China to develop industrial technologies producing less CO2.
This is typically a pragmatic win-win political solution if it is correctly applied. The
European Union has also proposed to fix a global objective for all members
States in order to have more smoothness in the application of Kyoto’s protocol.
But in this case the solution is not sufficient to obtain equilibrium because all
members States have excess of CO2. It is only at the upper level of world
divided in 3 macro-regions (figure 2-2-a) that Europe can eventually develop the
same strategy as Japan. In this scenario, Europe should develop partnerships
with all states of Africa, middle-east and former Soviet Union in order to really
fulfil its obligation at the world level. A unilateral reduction of CO2 emission in
UE25 would probably be economically difficult to support for European industry
and it would not necessary be efficient at the world scale because industries
producing CO2 would certainly decide to relocate in neighbouring eastern and
southern periphery of Europe. It is typically a lose-lose solution, derived from the
fact that the geographical scales of political action is not the good one. To
complete the picture, we can notice that USA are not able to develop an
equivalent strategy of macro-regional cooperation because, even if they involve
Northern and Southern America in a common project, there would remain a
strong excess of CO2 as compared to population of Americas. It is only through
cooperation with major States of Asia, such as India, that USA could achieve the
same political objective as EU or Japan.

3
The so-called « economic ecological efficiency » which is based on the comparison between share of
emissions of CO2 and share of world GDP (expressed in $ and not pps) is a real moral failure which is
nevertheless used by many states to justify their actual excess of CO2 emission. If European policy makers have
a minimum sense of responsibility, they should not use such argument in negotiations!

35
Of course the approach developed above is strongly influenced by the choice of
territorial divisions which has been used for the delineation of world regions and
macro-regions. We can suspect that another definition of the ESPON regions
would have produced another political result. Therefore it is necessary to
complete the analysis by another cartographic approach which computes the
global potential of CO2 emission in a neighbourhood of 1000 km without
considering political boundaries (figure 2-3). This map of CO2 potential which
was presented in the preliminary report of ESPON 3.1 on “Europe in the World”
displays a perfect representation of the ”Economic Triad” and is strongly
correlated with the map of GDP potential established with the same parameter. It
indicates clearly that it is impossible to build a world policy of reductions of CO2
without an international policy at macro-regional level, with at least three big
agencies of objective in northern part of the earth and eventually three smaller
agencies in southern part (because of equivalent small peaks of CO2 emission in
southern Africa, southern America and Oceania).

This small example demonstrates that it is not possible to build new policy
without building new tools of analysis and representation: “the limits of my
language mean the limits of my world” (L. Wittgenstein).

36
Figure 2-2 : A multiscalar Territorial Analysis of Kyoto’s Protocol

37
Figure 2-3 : A global spatial vision of Kyoto’s Protocol

38
3 MAP TEMPLATES AND GRAPHIC HARMONISATION

The objective of the work package on databases and maps is to make « proposal
for an effective statistical and cartographical framework for the needs of the
research, in particular in relation to the questions of geographical projection and
by adapting the level of aggregation to the specific needs European policy ». This
work package is more generally responsible from the harmonization of maps
produced by the partners. The thoughts for maps harmonization will be present
here with the template proposed to partners for each scale /theme of analyse.

One of the tasks for the ESPON Project 3.1 was to develop new cartographic and
spatial analysis tools that could be used by all other TPGs of the ESPON
Programme, and at a later stage also by end-users. ESPON is not a single
institution. Instead, it is a research project network. Every project includes a
team of partners from different European countries. It was sensed from the
outset that ESPON needed some common base and means to steer the various
TPGs so as to achieve coherence and identity in the ESPON outcome. The TPG
3.1 proposed a few templates for the design of European territory maps
(projection, shape, design …).

As ESPON is above all about spatial patterns and trends, it was clear that most of
the outcomes would be shown on maps. Therefore, a common ESPON map
layout, for all separate TPGs, was essential. Project 3.1 designed a first draft for
map layout. The design of maps showing the European situation in the world
entails many technical questions (projection, framework, aggregation level …) of
crucial importance from scientific and political viewpoints. The third Interim
Report (annexe-b) brought to the fore a map projection which gives the
opportunity of a polycentric, but universal representation. This polycentric
projection had been justified: “none of the world economic centres is stressed, as
far as it can be used in any direction. This implicit message is essential for the
analysis of a polycentric Europe in a polycentric world”.

All those thoughts were very useful but now, we need to settle down our choices
for map presentation. It ensures coverage of all regional levels for the ESPON
countries (an EU29, a pan European and a world templates). For a complete
cartographic presentation, adjacent parts of the surrounding countries were
added (the “non ESPON space”), including the map background, borders, and
coasts. The Remote Areas and islands are included as insets.

Thus, the ESPON TPGs obtained a unique tool to generate based thematic maps.
The standard ESPON map is already used in the cartographic representations in

39
all Interim Reports. Now it is necessary to offer similar rules for the design of
maps of Europe in the world, which implies many possible choices.

3.1 Which Cartographic Projection?

The ESPON program decided to harmonize the maps that are produced in the
network and the TPG 3.1 has proposed specific templates for the design of map
of the European territory (projection, shape, design …) (Templates 1).

3.1.1 Template 1 « EU29 »

3.1.1.1 Projection

The map is projected in Lambert azimuthal equal area with the centre of 50°N
and 15°E

3.1.1.2 Geographical influence

Figure 3-1 : ESPON Space

For the representation of world data and comparisons and as Claude Grasland
and Christian Grataloup explained in Annex B of the third interim report, the
right planisphere does not exist. The transformation from sphere to plan implies

40
necessarily an undesirable bending of areas and/or angles and/or global shapes.
Furthermore, a map of the World can be unsatisfactory because the global world
is economically organized as a ring around the earth while a map is a plane
representation with edges defining a single centre. The more traditional
projections (projections 1 and 2), like Mercator or Winkel projections directed
toward the north and centred on Europe, show an acceptable world organization
of the XIXth century at the time when the Old Continent ruled the other regions
of the Earth.
Today we live in a polycentric world. And pictures that try to provide evidence of
multiple centralities and competitive influence areas should not induce biases
related to false polarization introduced by the choice of map projections. It is the
reason why C. Grasland and C. Grataloup proposed ESPON to choose a polar
projection, setting Northern Hemisphere at the centre, simply because it is the
place where 90% of the human beings are living. Such a map can easily be
underlined in order to emphasize the various centralities (Template 2).

3.1.2 Projection 1: The Mercator projection

Figure 3-2 : Mercator projection

While Mercator maps do not have a grid (except in latitude and longitude), there
is an implicit grid, and since this is how they are constructed. The Easting and
Northing values shown here are for a 1:1 scale chart, and also note that these
values are measured on the chart, not on the earth! Mercator’s projection
preserves exactly what sailors needed: shapes and directions. On a globe, the
lines of longitude (measuring east-west position) converge at the poles and the
lines of latitudes (measuring north-south position) are unvarying distant apart.
In a Mercator projection, the lines of longitude are straight vertical lines equal

41
distance apart all latitudes, and horizontal distances are stretched above and
below the equator this stretching is exaggerated near the poles.

3.1.3 Projection 2: The Winkel projection

Figure 3-3 : Winkel Projection

In true azimuthal projections, all directions are preserved from the reference
point, usually tangent at the centre of the map. The third and best known of
Oswald Winkel's hybrid projections is defined by a simple arithmetic mean
including the equidistant cylindrical projection, using an arbitrary value for
standard parallels (the author preferred approximately 50°28"N/S; another
common value is 40°N/S); Winkel's Triple projection is peculiarly irregular: it is
neither equal-area nor conformal; parallels are straight at Equator and poles,
curved elsewhere; scales are constant (but not equal) only at the Equator and
central meridian. Nevertheless, it manages to present a pleasant and balanced
view of the world, which led to its choice by several popular atlases.

3.1.4 Template n°2 « World »

3.1.4.1 Projection

The map is projected in North Pole Azimutal Equidistant with the centre of 90°N
and 0°E.

3.1.4.2 Geographical influence

None of the world economic centres is advantaged; the map can be turned in any
directions. This implicit message is essential for the analysis of a polycentric
Europe in a polycentric world.

42
 Figure 3-4 : World North Pole Azimutal Equidistant projections

In the ESPON context, it is important to bring to the fore a map projection which
gives the opportunity of a polycentric, but also universal, representation. Of
course, Southern Hemisphere is badly treated (the disappearance of Antarctica),
which proves that any planisphere introduces an implicit subjectivity. With this
polar projection none of the world economic centres is stressed, as far as of such
map can be used in any direction. This implicit message is essential for the
analysis of a “polycentric Europe in a polycentric world”.

3.1.5 Template 3 « World 2 »

Some flows Europe/ World are not always well represented with this polar
projection. In order to improve these representations we offer an additional
template (template 3a and 3b): a polycentric projection projection with a zoom
on Europe and a Hammer-Aïtof projection. This projection allows a pleasant and
balanced view of the world and to puts forward the particular relations between
Europe and the world in terms of the directions shown. This template is still
under preparation.

43
 Figure 3-5 : Template for Flows between Europe and the world

The Hammer-Aitoff equal-area projection, also called the Hammer projection, is a

map projection that is a modification of the Lambert azimuthal equal-area
projection. It consists of halving the vertical coordinates of the equatorial aspect
of one hemisphere and doubling the values of the meridians from the center.
Like the Lambert azimuthal equal-area projection, it is equal area, but it is no
longer azimuthal. This projection is often used for thematic maps of the world
and very effective to represent flows between Europe and the rest of the world.
It’s the one we choose as an alternative to the North Pole Azimuthal Equidistant
projection

Figure 3-6 : Hammer-Aïtof Template for Flows between Europe and the world

44
Another template has to be produced so as to have a European vision in its wider
context, a pan European vision (Template 4). The strategic vision of ESPON 29
territory can also be approached in a large Europe. A pan-European template has
been build. We have chosen a relatively large definition of the European
neighbourhood, both in eastern and southern direction, in order to have a
European vision in its wider context. European widening eastward and southward
is based on objective criteria. This is why, considering southern and eastern
countries of Europe becomes so important. Middle East and Persian Gulf, not
within Europe, are in fact, a competitive area. Such a template allows for a
systemic view point.
The fact of limiting ESPON research program to EU27 or EU29 can generate
illusions and induce mistakes in the analysis of main trends shaping the
European territory. In many cases, the perception of inequalities, potentialities,
polarizations …will be fully transformed according to the geographical shape and
the basic territorial units used by observers. It is obvious that the situation of
Europe would appear very different if the future scenarios included peripheral
areas which are strongly related to Europe like S.E. Mediterranean countries,
Africa. This special projection allows for showing all the features about Europe
and his close neighbours. The projection is centred on EU29 and is enlarged to
the South by the North African countries (some of the analyses show a special
limit formed by the Sahara borders) and to the East by the Balkans countries
plus Turkey, Russia, Azerbaijan and Kazakhstan. The South and east limits are
not actually precisely defined. It will depend on subjects and research results.
Besides the previous ESPON report had shown that the ESPON view was certainly
the most interesting one in a short term perspective. But the pan-European view
and the global view should be taken into account when European policy makers
try to elaborate strategies in a long-term perspective.

45
3.1.6 Template 4 « Pan European »

3.1.6.1 Projection

The map is projected in Lambert Azimuthal Equal Areas with the centre of 50°N
and 18°E.

3.1.6.2 Geographical influence

Figure 3-7: Europe Lambert Azimuthal Equal Areas projection

3.1.7 Template 5: « World and regional MIX »

Figure 3-8 : World and regional Template

46
3.2 Which divisions?

For a better comparison of maps, different levels of divisions have been defined
so as to provide enough layouts for all ESPON projects and data levels. The
European Union as any international organization should produce geographical
divisions of the world adapted to their statistical, scientific, and political needs.

3.2.1 The national level

The list of States that should be included in the ESPON database “Europe in the
world” is not a trivial question. For example, it is well known that Taiwan is never
present in the statistical databases of the United Nations because China does not
recognize its existence as an independent State. But, on the other hand, the CIA
has introduced Taiwan in its “World Fact book” 2 which presents the official
position of US Government. An ESPON Atlas of the world would necessarily lead
to difficult political questions because, as in the case of the World Fact book, it
could be considered as a form of official position of the European Union.

More complicated but more important is the question of the delineation of

“regions” of the world because it implies necessarily a mixture of ideological,
scientific and political constraints. Likewise Nuts divisions, we create special
“world-regions” divisions in order to be able to analyse phenomena in different
visions the WUTS

47
 Figure 3-9 : « WUTS »
WUTS 0 WUTS 1

WUTS 2 WUTS 3

WUTS 4 WUTS 5

48
The list of States that should be included in the pan European database depends
on the subject matter. The South and East limits would be chosen by authors.
Choices of the national level are presented in figure 3-10, 3-11 and 3-12.

Figure 3-10 : « ESPON Europe divisions »

Figure 3-11 : « WORLD divisions »

49
 Figure 3-12: « Pan European » divisions.

3.2.2 The “regional” level

Figure 3-13 shows the regional delineation of European ESPON countries. We

choose NUTS 2 or 3 according to the statistic information.

Figure 3-13 : Regional delimitations of European ESPON countries

50
3.3 Which message?

The maps are very powerful tools of communication and they can convey implicit
or explicit political message. These different templates have been discussed and
approved in a scientific and political sense. You can read more details on Volume
1 Part A of this report.

3.4 Map background and countries

Figure 3-14: Map backgrounds

51
3.4.1 Countries

Fill colour: R,G,B = (255,255,240)

Outline colour: R,G,B = (255,255,255)
Outline width: 0.2pts

3.4.2 Countries and regions out of UE29

Fill colour: R,G,B = (251,247,242)

Outline colour: R,G,B = (255,255,255)
Outline width: 0.2pts

3.4.3 Legends

The previous choices have to be completed by colours and graphic

representations. The discussions focused mainly on choropleth and proportional
maps, selection of class intervals and tonal shadings. In fact it is very important
to avoid the failure resulting not from different graphical traditions, but from
theoretical uncertainties concerning the general principles of the graphical
language. Graphical signs are assimilated to a discourse that could be read,
understood and criticized on grounds of efficiency, and not simply for reasons of
personal preference or style.

In order to obtain comparable maps, a precise protocol is proposed at each step.

We propose a monochromatic system, gradual shading of two tones, graduated
symbols, qualitative shadows, typology with or without hierarchy. We tried to
explore each possibility, every alternative for cartographic keys and every
possible graphic treatment of information. A few examples of layout are offered
so as the whole of ESPON members' maps are homogeneous in presentation
while adhering to graphic semiology rules.

Quantitative figures for rates are often given as sorted data. It is possible to use
up to 8 categories when gradation is simple and up to 3 categories both sides,
when gradation is double. These gradations must be monochrome or a matching
gradation (rainbow gradation).
A G scale is proposed. It allows to get a data presentation based on a weighted
index in accordance with size and order of what is shown. Such a scale is a
proxy for a rainbow gradation in 5 categories (beyond this, it would be difficult to
grasp any information).

Qualitative data or typologies exclude any particular order. When what is at

stake, is an opposition between two elements, one should select red and blue

52
colours. Conversely, when many meanings must be shown together at the same
time, several colours should be selected with same graphical weighting. Finally,
gross quantitative data should be shown in accordance with different sizes:
circles for fixed geographical data and arrows for flows. For any additional
information, a colour can be added to circles in accordance with above-described
principles.

Figure 3-15 : legend propositions

53
Some examples:

Figure 3-16: Minimum and maximum values have always to be written clearly.

54
Pan European Layout

Figure 3-17 : 4 examples of Pan European layout

55
World Layout
Figure 3-18 : 4 examples of world Layout

56
Espon EU29 Layout

Figure 3-19 : 2 examples of ESPON layout

3.5 Graphic templates

Graphics templates are realised in order to insure strong harmonisation of further

production and opportunity to present coherent graphics collection at the end of
the project.

Figure 3-20 : Graphics layout

57
 Figure 3-21 : Colours chart

Simple opposition Typology without hierarchy

CMJN CMJN
- 0,5,85,0 45,0,0,0

+
90,5,95,0 55,0,45,0

20,85,0,0 0,40,20,0

10,80,95,0 0,0,50,0

80,80,5,0 0,20,45,0

0,40,95,0 10,40,0,0

58
4 DATA MINING AND DATABASE BUILDING

4.1 Data mining and database building

One of the objectives of the project Europe in the World is to provide the ESPON
program with datasets that will allow to conduct future analyses on the position
of ESPON area in the World and/or ESPON countries relations with the World. It
is then compulsory to build standardised databases in order to allow the
comparison of analyses, the common use of the results in cross thematic
questions and to allow the reproduction of statistical analyse step in the future,
for example if we could get some updated data on our subject in next few years.
What is quite new for the project 3.4.1. “Europe in the World, the World in
Europe,” in comparison with other projects, is that we aimed to build databases
related to the world i.e. at State scale and that we did not use very often
databases at larger scales like NUTS2 or NUTS3, except in the part related to the
influence of the World in ESPON area (Internal differentiation of European
territory, FR – Vol.1 – part 6). More, we aimed to build, whenever it was
possible, databases taking into account long time period in order to introduce
dynamic analysis of ESPON in the World. The list of variable and indicators used
in the project change over time according to the discovery of new databases that
match with our concerns, the rise of new issues on which we focus our attention
and most of all, the quality and availability of the datasets.

The following part is a synthetic presentation of the databases used (Data and
main sources used) and finally describes the building and harmonisation of the
databases that have been used in the project (Harmonisation of database).

4.1.1 Data and Main Sources:

The ESPON program gathered a vast amount of data and indicators, either in
each TPG either provided by Eurostat. The table 8 of the Nijmegen Guidance
paper provide a helpful list of all the indicators gathered in the ESPON program.
However in the framework of our project it was quite difficult to use them
intensively. First because those indicators have not been collected on a long term
basis, but above all because, most of them have been gathered at a NUTS2 or
NUTS3 level and are only available for European or ESPON countries. Some parts
of the projects (WP 3.4 internal differentiation of European territory) fruitfully
used the indicators provided by other TPG but it will not be the case for most of
our work package related to the world. As a consequence a specific database has
been built and that have been done mainly by RIATE and Géographie-cité with an
active collaboration of the ESPON project 3.2 on scenarios.

59
 4.1.1.1 Structural databases

Concerning population and GDP we mainly used the Maddison databases. This
database is published by the OECD and freely available on Mr Maddison website
(http://www.ggdc.net/~Maddison/). However due to copyright matter and in
order to provide those data to the ESPON database the C.U. has to buy the rights
to Mr Angus Maddison. This dataset provide the populations and GDP of all
national territorial units of the world from the first year after J.C. to 2001.
Concerning far past time a lot of data are missing. From 1900 to 1950 all the
African continent and some parts of Asia are missing. After 1950 there are very
few missing data. All the data are derived from “The World Economy: Historical
Statistics”, OECD Development Centre, Paris 2003. GDP figures are in millions of
1990 US$ (converted at Geary Khamis PPPs). This database providing long term
data on population and GDP have been very useful for our exploratory analysis.

The UNCTAD Handbook of Statistics On-line, (http://www.unctad.org/), provides

numbers of development indicators for the most recent years for more than 220
countries but a lot of data are missing. Some trade data (value of exportations /
importations by countries) are available from 1950. This website provide too the
Foreign Direct Investments from 1970. The World Development Indicators, 2003,
a World Bank publication provide also a large number of indicators (575),
describing about 210 countries. Indicators are related to demography,
environment, economy, state and market, and global links. Available periods
range from 1960 to 2001. UMS RIATE owns the DVD-ROM providing the data,
but they can be used only by the transnational project group while the project is
going.

Some demographic databases at the World and ESPON level have been built
from the United Nation World Population Prospect 2004 by the project 3.2. at
ESPON level and at the World level conjointly with the project 3.4.1. This source
provides estimates of demographic data (fertility, mortality, median age,
migrations…) from 1950 to 2005 for all World countries. It also provides
prospective according four scenarios (low, medium, high and constant) from
2005 to 2050. This database can be used among participating partners in the EU
Project "European Spatial Planning Observation Network" (ESPON), but however
they have to stay within the boundaries of the ESPON network and they must be
cited as follow when used: “United Nations (2005). World Population Prospects:
The 2004 Revision. CD-ROM Edition - Extended Dataset. New York, NY:
Population Division of the Department of Economic and Social Affairs of the
United Nations Secretariat”.

60
Finally we also used the CEPII database (Centre d’Etudes Prospectives et
d’Informations Internationales) that provides data on countries and their main
city or agglomeration. Variables, which applied to 238 territorial units, describe
languages, historical links (like the colonizer country), the belonging to one
continent, or the fact that the territorial unit is landlocked or not. It is available
on the CEPII website at the following address:
(http://www.cepii.fr/anglaisgraph/bdd/distances.htm).

4.1.1.2 Flows databases

The program ESPON 3.4.1 Europe in the Word will use two distinct kinds of flows
databases. The first ones concern the flows between cities, the second ones
between countries.

The Europe in its network key question takes into account world inter-city air
flows database at two different periods during the last ten years. While air flows
are among the worldwide data that are the easiest to obtain, the different
sources are not compatible the ones with the others and it is not evident to
harmonize them. In addition, one should, from the begin, be also aware that a
database that collect data on flows between the airports/cities gives different
figures from a database that collect data on the traffic of each airport/city. This
difference comes, in particular, from the through traffic.

Working on air flows for more than ten years, and having tested different sources
from different international institutes and organization, the responsible team of
this question has chosen, for the flows figures, two major databases : from OACI
and from ITA. Several reasons can explain this choice. In particular: the OACI
database is quite the only one to provide a database that is comparable for a
long period of time. While the ITA database is for a few international linkages
more accurate and could constitute a complementary source of information.

The other main difficulty of this key question relates to the air freight figures.
While main analysis and conclusions will be drawn from the number of air
passengers that travel all over the world, one cannot avoid taking into account
the tons of freight that are carried between the cities. Indeed, for the last ten
years, the air cargo recorded considerable increases taking into account the fall
in the costs in air transports. But at that stage the collection of such data is not
guaranteed partly because of the reliability of the sources.

Some figures and databases have already been tested and used in Nadine
Cattan’s previous researches and in particular in ESPON 1.1.1.

61
Other Flows databases. The program ESPON 3.4.1 Europe in the Word will
also use flows databases describing bilateral relations between countries. Here
we could use trade flows between countries like the International Trade Centre
database (UNCTAD/WTO United Nations Statistics Division) about export and
imports flows.
The DG trade (http://europa.eu.int/comm/trade/index_en.htm) provide also a
database on trade flows for extra European countries quoting for each of them
the 20 first importing and exporting partners. The files provide also data on
imports and exports by 21 kinds of products (like vegetable products, wood and
article in wood, textiles and textiles articles, miscellaneous manufactured
articles). Relation for a country is describing for Europe as a whole and not
detailing all European countries. 127 countries and groups of countries are
described than mean it is not a exhaustive database. More, data are available
only for the year 2004.
Flows databases seem to be more difficult to obtain, particularly concerning
subjects like migration flows and long term databases are scarce.

Proximity databases. In order to analyse the relation between the flows

intensity between two countries and their proximity is useful to have a distance
database between each countries. The CEPII bilateral file provide different kind
of distances between 28 224 pairs of countries (168 * 168). Two kind of simple
distances are provided one between the most important cities or agglomeration
in term of population and one between the capitals cities. Some weighted
distances (by to population) are also proposed. This database describes also
some common cultural or historical facts as a common official and ethnic
language, a common colonizer between two countries. This database provides
also a very precious variable describing the fact that two countries were part of a
same administrative entity for a long period in the past. This is especially useful
to take into account the common past between territorial units that formerly
belonged to the same Empire as Austria and Hungary, and countries that have
been split in two or more parts as the former Czechoslovakia or Yugoslavia.

4.1.1.3 Specific databases

A specific database will be built by the UMS RIATE based on a survey on the
ESPON community members, i.e. researcher, administrative and politicians of the
ESPON program. The questionnaire is now in a test phase and the survey will be
held during the ESPON meeting in May in Luxembourg. Apart from description
data (sex, age, activity in the ESPON program), the survey is about, first, the
delimitation of Europe, second the delimitation of world regions. The Europe

62
database describes for each country its belonging of Europe or not. The World
Regions database is build in the same way than a matrix of flows, describing the
belonging of two territorial units to the same region.
Another specific database on mental maps will be built. It aims to gather the
divisions of the world proposed on maps by big firms, non governmental
organizations and international organisations websites.

4.1.1.4 databases for the neighbourhood studies

OECD: Official development Assistance data base (http://www.oecd.org/).

The DAC statistics measure the flows of aid and other financial resources to
developing countries and countries in transition, broken down by major category
of expenditure. Such historical series make possible useful comparisons between
major donors whether they are countries (22 donors among which EU 15
members…) or multilateral organizations and international institutions such as
European Commission, Arab development agencies or regional banks. DAC
Statistics are collected annually since 1960 from the Members of the OECDs
Development Assistance Committee (DAC). The data cover aid loans and grants,
other official flows, private market transactions and assistance from non-
governmental organisations to each recipient country and recipient countries
combined. The data make a useful distinction between the commitments of the
official assistance and the really observed disbursements. Other useful data
concern the destination of Private Direct Investment and Other Private Capital.
The aid flows are measured in constant 2003 dollars, which make possible
comparisons of long periods of time.

OECD: SOPEMI. For several years, the team SOPEMI (système d’observation
permanente de migrations internationales) has been analysing trends in
international migration - flows or stocks - and policies in all OECD member
countries and in selected non-member economies. Its publications provide the
researchers with detailed descriptions and useful tables of the flows, the different
channels of immigration and the diversity of nationalities involved. The SOPEMI
database releases useful tables (by country) about a broad range of topics
related to international migrations: origin and category of migrants, inflows and
stocks of foreign populations by nationality and country of origin, geographical
breakdowns of foreign labour force… A significant part of the data, which the
yearly publication of the SOPEMI is based on, is available on the website of the
OECD, at the following address:
http://www.oecd.org/document/36/0,2340,en_2649_33931_2515108_1_1_1_1,
00.html

63
FMI: International trade Statistics Yearbook. This annual publication,
released since 1996 by the Direction of Trade Statistics of the International
Monetary Fund, provides data on the country and area distribution of countries’
exports and imports as reported by themselves or by their partners. Thanks to
this yearbook, one knows the geographical breakdown of the international trade
of good of about 186 countries: the destination of their exports and the origin of
their exports, in value (millions of current dollars). These data are available for
seven years in each annual volume. This publication allows the researchers to
build an o/d matrix of international trade. More detailed data, in the DOTS
quarterly issues, are available for each quarter of the current and of the previous
years for about 156 countries, and for ten quarters and five years for the world
and area tables. The yearbook is not available on the web. Some data are
missing but gaps are very few.

World Tourism Organization. The Compendium of Tourism Statistics provides

a short quick-reference guide on the major tourism statistical indicators in 209
countries and various territories around the world from 2000 to 2004. Data are
provided about the following topics: inbound tourism, domestic tourism,
outbound tourism, tourism industries. The Yearbook of Tourism Statistics
contains useful information and data for the analysis of the economic impacts
and of the geographical distribution of tourism in most countries around the
world (206 countries in the two volumes of the 2006 issue), especially the total
arrivals and overnight stays associated to inbound tourism and the breakdown by
country of origin for the period 2000-2004: statistics about the arrivals of
tourists or visitors at the national borders, statistics on accommodation
establishments, statistics about the overnight stays. Such a publication allows
the researchers to know the destination of tourist from each ESPON country and
the origin of tourists who go to the neighbour countries of EU.

World Bank. The World Bank's Data Group provides data on all aspects of social
and economic development. For example, the World Development Indicators
includes more than 900 indicators in over 80 tables related to many topics:
agriculture, environment, finance, infrastructures, purchasing power, GDP,
demography, etc. Data are available for 208 large and small economies. Every
registered user has a total access to an extensive online database which provides
statistics about hundreds of indicators on long time series, from 1960 up to
2005. The data base is updated each year. Nevertheless, it shows significant
gaps for many countries before 1990, especially for former Soviet Republics and
East Asia countries. In such case, data must be extracted form other sources and
harmonized with those of the World Bank as much as possible. For the period
after 1990, the database is much more complete.

64
Statistical offices in the Baltic States. The Central Statistical Office of Estonia
is based in Tallinn. A large part of its statistics is available on its web site
(http://pub.stat.ee/px-web.2001/dialog/statfileri.asp), sorted in two major
categories: a general statistical database and a regional development database.
The second one is divided into six major chapters: economy, environment,
population, social life, population census of 2000 and agricultural census of 2001.
Inside each topic, it is possible enter an interactive database which allows the
researchers to build their own datasheets and to download them as excel files. A
majority of these statistics are available for the period running from 1990 to
2005. The Central Statistical Bureau of Latvia also has a website in which the
database is built on a same pattern. The address is:
(http://data.csb.lv/EN/dialog/statfile1.asp?xu=&yp=&lang=1). Many useful data
are not available on this website and have to be purchased directly in Riga and
Tallinn.

4.1.2 Harmonization of datasets

In order to allow the cross thematic analysis of results elaborated by each

partner teams in WP2, the statistical harmonisation is of great importance.

4.1.2.1 World databases: 168 countries

We established a minimum list of territorial units that necessarily have to be

covered by data collection. First, we use, as a criteria, the share of the world
surface, population and GDP of each territorial unit. If a territorial unit count less
than one millionth of the world surface OR the population OR the world GDP, we
decided to consider it as being a part of the rest of the world.

Before using any statistical criteria of selection, the choice of territorial unit is
first of all drive by the question of their sovereignty. First we included the full
sovereign territorial units with their main parts and overseas part (i.e. France +
Martinique, Guadeloupe, Guyana and Reunion). Then there the question of
associated territories has to be considered (In the case of France: Mayotte,
Saint-Pierre & Miquelon…). They have not been added to the database. The
remaining territorial units are more problematic between States that are not fully
sovereign (Puerto Rico) and those States that are not recognised by all the other
(Taiwan, Western Sahara, West Bank & Gaza…).

The following table gives the list of the 168 countries kept in our analyses (Table
4-1).

65
As shown in the table, each territorial unit is represented by a code in three
letters (ISO) that is the first column of all the databases we build to allow to
cross the databases (for multivariate analysis for example). In the second
interim report, the native codification used by statistical organisation or project
partners will be systematically compiled in a dictionary of territorial unit. More,
we’ll build a table of correspondence for territorial units which has been subject
to modifications in order to establish coherent time series in a medium or long
term perspective).

4.1.2.2 Euromed database

For the specific analyses undertaken under the following Work-Packages, WP 2.5
(European Neighbourhood) & WP 3.3 (Delimitation of European territory), we
decide to build intermediate databases that would provide a shorter list than the
all world but larger than those related to the conventional ESPON space. This
intermediate space should be able to provide a framework for the analysis of the
influence area of Europe and the main discontinuities (in term of demography,
wealth etc…) between the European space and the neighbours.

During the project 3.4.1. kick-off meeting, discussions were on the meaning of
neighbourhood. They are two different kinds of neighbour countries: those that
are very close to Europe (spatial neighbourhood) and those that have very
strong links with one (or more) European country (networking neighbourhood).
According to the fact that, in this field, our objective is related to the delimitation
of European influence area Europe limits, it seems more relevant to choose the
spatial neighbourhood. (More, the networking neighbourhood should be analysed
in the WP3.2 networking the world, at the world scale.

The choice to make analysis in an intermediate space implied to build a specific

map template whose construction is detailed in the following part: Standards for
cartography.

The table (Table 4-2) gives the list of the 82 Euromed countries kept in our
analyses.

66
 Table 4-1 : countries for Europe in the World
ISO Name ISO Name ISO Name
AFG Afghanistan GHA Ghana NIC Nicaragua
AGO Angola GIN Guinea NLD Netherlands
ALB Albania GMB Gambia NOR Norway
ARE United Arab Emirates GNB Guinea Bissau NPL Nepal
ARG Argentina GNQ Equatorial Guinea NZL New Zealand
ARM Armenia GRC Greece OMN Oman
AUS Australia GRL Greenland PAK Pakistan
AUT Austria GTM Guatemala PAN Panama
AZE Azerbaijan GUY Guyana PER Peru
BDI Burundi HND Honduras PHL Philippines
BEL Belgium HRV Croatia PNG Papua New Guinea
BEN Benin HTI Haïti POL Poland
BFA Burkina Faso HUN Hungary PRI Puerto Rico
BGD Bangladesh IDN Indonesia PRK North Korea
BGR Bulgaria IND India PRT Portugal
BHR Bahrain IRL Ireland PRY Paraguay
BHS Bahamas IRN Iran QAT Qatar
BIH Bosnia IRQ Iraq ROU Romania
BLR Belarus ISL Iceland RUS Russian Federation
BLZ Belize ISR Israel RWA Rwanda
BOL Bolivia ITA Italy SAU Saudi Arabia
BRA Brazil JAM Jamaica SCG Serbia/Montenegro
BTN Bhutan JOR Jordan SDN Sudan
BWA Botswana JPN Japan SEN Senegal
CAF Central African Republic KAZ Kazakhstan SGP Singapore
CAN Canada KEN Kenya SLE Sierra Leone
CHE Switzerand KGZ Kyrgyzstan SLV El Salvador
CHL Chile KHM Cambodia SOM Somalia
CHN China KOR South Korea SUR Suriname
CIV Côte d'Ivoire KWT Kuwait SVK Slovakia
CMR Cameroon LAO Laos SVN Slovenia
COD Zaire (Congo DRC) LBN Lebanon SWE Sweden
COG Congo LBR Liberia SWZ Swaziland
COL Colombia LBY Libya SYR Syria
CRI Costa Rica LKA Sri Lanka TCD Chad
CUB Cuba LSO Lesotho TGO Togo
CYP Cyprus LTU Lithuania THA Thailand
CZE Czech Republic LUX Luxembourg TJK Tajikistan
DEU Germany LVA Latvia TKM Turkmenistan
DJI Djibouti MAR Morocco TTO Trinidad and Tobago
DNK Denmark MDA Moldova TUN Tunisia
DOM Dominican Republic MDG Madagascar TUR Turkey
DZA Algeria MEX Mexico TWN Taiwan
ECU Ecuador MKD Macedonia TZA Tanzania
EGY Egypt MLI Mali UGA Uganda
ERI Eritrea MLT Malta UKR Ukraine
ESH West Sahara MMR Burma (Myanmar) URY Uruguay
ESP Spain MNG Mongolia USA United States
EST Estonia MOZ Mozambique UZB Uzbekistan
ETH Ethiopia MRT Mauritania VEN Venezuela
FIN Finland MUS Mauritius VNM Vietnam
FJI Fiji MWI Malawi WBG West-Bank and Gaza
FRA France MYS Malaysia YEM Yemen
GAB Gabon NAM Namibia ZAF South Africa
GBR United Kingdom NER Niger ZMB Zambia
GEO Georgia NGA Nigeria ZWE Zimbabwe

67
 Table 4-2 : Euromed list of countries
ISO Name ISO Name
ALB Albania KWT Kuwait
AND Andorra LBN Lebanon
ARE United Arab Emirates LBY Libya
ARM Armenia LIE Liechtenstein
AUT Austria LTU Lithuania
AZE Azerbaijan LUX Luxembourg
BEL Belgium LVA Latvia
BGR Bulgaria MAR Morocco
BHR Bahrain MCO Monaco
BIH Bosnia MDA Moldova
BLR Belarus MKD Macedonia
CHE Switzerland MLI Mali
CYP Cyprus MLT Malta
CZE Czech republic MRT Mauritania
DEU Germany NER Niger
DNK Denmark NLD Netherlands
DZA Algeria NOR Norway
EGY Egypt OMN Oman
ERI Eritrea POL Poland
ESH West Sahara PRT Portugal
ESP Spain QAT Qatar
EST Estonia ROU Romania
FIN Finland RUS Russian Federation
FRA France SAU Saudi Arabia
FRO Fareo Islands SCG Serbia/Montenegro
GBR United Kingdom SDN Sudan
GEO Georgia SEN Senegal
GIB Gibraltar SJM Jan Mayen
GRC Greece SMR San Marino
GRL Greenland SVK Slovakia
HRV Croatia SVN Slovenia
HUN Hungary SWE Sweden
IMY Isle of man SYR Syria
IRL Ireland TCD Chad
IRN Iran TKM Turkmenistan
IRQ Iraq TUN Tunisia
ISL Iceland TUR Turkey
ISR Israel UKR Ukraine
ITA Italy UZB Uzbekistan
JOR Jordan WBG West-Bank and Gaza
KAZ Kazakhstan YEM Yemen

68
 4.1.2.3 Espon database

For projects that will analyse more in detail the European space according to the
world influence, (W.P. 3.4 Internal differentiation of the European territory, and
some cases studies). In those cases the databases and indicators built by other
ESPON projects (at NUTS2 or NUTS3 level) will have to be used. The following
Table 4-3 reminds the ESPON countries.

Table 4-3 : ESPON list of countries

ISO NAME
AUT Austria
BEL Belgium
CYP Cyprus
CZE Czech republic
DNK Denmark
EST Estonia
FIN Finland
FRA France
DEU Germany
GRC Greece
HUN Hungary
IRL Ireland
ITA Italy
LVA Latvia
LTU Lithuania
LUX Luxembourg
MLT Malta
NLD Netherlands
POL Poland
PRT Portugal
SVK Slovakia
SVN Slovenia
ESP Spain
SWE Sweden
GBR United Kingdom
BGR Bulgaria
NOR Norway
ROU Romania
CHE Switzerland

69
5 METHODOLOGICAL FRAMEWORK FOR THE ANALYSIS OF FLOWS AND
STRUCTURES

The aim of this part (based on an annex of answer to the tender) is to illustrate
the methodology which will be developed in WP6. To make the reading of this
part easier, we have systematically take example of simple datasets of flows and
structure related to 7 western Mediterranean countries (France, Spain, Italy,
Morocco, Algeria, Tunisia and Libya).

5.1 Preliminary sample of methods for flows analysis

It is not the place to define all possible methods which can be applied to the
analysis of flows but it is important to give a first overview of the different
interpretations and applications which can be derived from matrix flows in
conceptual terms. To illustrate this, we will analyse a very simple sample matrix
of trade flows between selected states from Northern and Southern
Mediterranean that will be considered for simplicity as an isolated system.
Normally, the rows define the origin of flows and the column their destination as
in table 5-1 where, for example the figure located in 1st row, 2nd column
indicate that the average annual value of exportation from France to Italy was
27.6 billions of dollars during the time period 1996-2000.

Table 5-1 : Mean annual value of trade flows 1996-2000 (millions of US $)

Fij FRA ITA ESP ALG MAR LBY TUN Total
FRA 0 27626 24224 2145 2322 297 2103 58717
ITA 27446 0 12873 830 561 977 1564 44251
ESP 19739 9525 0 664 966 162 334 31391
ALG 1878 2137 1665 0 124 1 79 5884
MAR 2533 427 739 14 0 107 53 3873
LBY 467 4269 1199 2 58 0 241 6235
TUN 1640 1209 276 35 40 225 0 3425
Total 53703 45193 40976 3689 4071 1770 4374 153775

5.1.1 Absolute level of flows and hierarchy

The hierarchy of flows in absolute terms is the first information to consider in the
analysis. It is of course related to the size of territorial units which send (push
factor) and receive (pull factor) but it has also a specific significance and can
help to define a hierarchy of relations between territorial units. In the example of
table 5-1, this analysis of the magnitude of flows reveals a clear typology of
relations of high magnitude between northern Mediterranean countries (10-30
billions of dollars), low magnitude between southern Mediterranean countries

70
(less than 0.3 billions of dollars) and medium magnitude between northern and
southern countries (0.5-5 billions of dollars).

The symmetry/asymmetry of flows is a topic of crucial importance for the

political analysis of relation between territories. For this reason, the geographer
W. Tobler has propose to transform systematically the initial matrix of flows F
into a symmetric component F+ which describe the sum of flows in both
directions (Fij+Fji) and an asymmetric component F- which describe the
difference between flows in both directions (Fij-Fji).

The volume of relation is described by Tobler’s symmetric component of flows F+

and defines the global level of connexion between both territorial units, under
the consideration that, whatever the direction, a flow create a non-oriented
linkage. In our example the most important volume of relation is observed
between France and Italy and the less important between Algeria and Libya.

F+ij FRA ITA ESP ALG MAR LBY TUN Total

FRA 0 55072 43963 4023 4855 764 3743 112420
ITA 55072 0 22398 2967 988 5246 2773 89444
ESP 43963 22398 0 2329 1705 1361 610 72367
ALG 4023 2967 2329 0 138 3 114 9573
MAR 4855 988 1705 138 0 165 93 7944
LBY 764 5246 1361 3 165 0 466 8005
TUN 3743 2773 610 114 93 466 0 7799
Total 112420 89444 72367 9573 7944 8005 7799 307550

The balance of relations is described by Tobler’s asymmetric component of flows

F- and defines the gains and loses of a territorial unit in relation with another
territorial unit. The matrix present symmetric values with opposite signs and
create an oriented linkage. In our example, the most important differential in the
commercial balance is observed between France and Spain, in favour of France
(+4.9 Billions of dollars).

F- FRA ITA ESP ALG MAR LBY TUN Total

FRA 0 180 4485 267 -211 -170 463 5014
ITA -180 0 3348 -1307 134 -3292 355 -942
ESP -4485 -3348 0 -1001 227 -1037 58 -9585
ALG -267 1307 1001 0 110 -1 44 2195
MAR 211 -134 -227 -110 0 49 13 -198
LBY 170 3292 1037 1 -49 0 16 4465
TUN -463 -355 -58 -44 -13 -16 0 -949
Total -5014 942 9585 -2195 198 -4465 949 0

The directional asymmetry of relations can be also described in relative terms by

the index F-/F+ which is strictly comprise between -1 and +1. A negative value

71
indicates that a territorial unit receive much more than he receives (as Morocco
toward Algeria) and a positive value indicates the reverse situation (as Algeria
toward Morocco). An index value equal or near to 0 indicates that the relations
are more or less equal in both direction. The exchange between France and
Spain which had the highest balance in previous analysis (±4.5 Billions of $) are
in fact characterised by a low level of directional asymmetry (±0.10) as compare
to the balance of exchanges between Morocco and Algeria which has a lower
absolute value (±0.11 billions of $) but with a very high level of directional
asymmetry (±0.76)

F+/F- FRA ITA ESP ALG MAR LBY TUN Total

FRA 0.003 0.102 0.066 -0.043 -0.223 0.124 0.045
ITA -0.003 0.149 -0.441 0.136 -0.628 0.128 -0.011
ESP -0.102 -0.149 -0.430 0.133 -0.762 0.095 -0.132
ALG -0.066 0.441 0.430 0.797 -0.333 0.386 0.229
MAR 0.043 -0.136 -0.133 -0.797 0.297 0.140 -0.025
LBY 0.223 0.628 0.762 0.333 -0.297 0.034 0.558
TUN -0.124 -0.128 -0.095 -0.386 -0.140 -0.034 -0.122
Total -0.045 0.011 0.132 -0.229 0.025 -0.558 0.122 0.000

5.1.2 Relative level of flows and influence

The analysis of flows in relative terms introduces a completely different type of

analysis because the importance of flows is not evaluated from an external point
of view but from the internal point of view of origins and destinations. The
transformation which is applied consist in the division of each line (or column) of
the matrix by the marginal sum. As an example, we will consider the analyse of
the volume of relations between two states (F+) which is normally a symmetric
linkage in absolute terms but which can produce very important asymmetry
when it is analysed in relative terms.

The structural asymmetry of relation is related to the difference of size (capacity

of import and export of units) which is fundamental for the definition of influence
areas. In our isolated system, Morocco account for 4% of France’s volume of
trade which is mainly linked with Italy (47%) and Spain (41%). But in the same
time, France account for 65% of Morocco’s trade relation which has also
secondary important relations with Spain (19%) and Italy (11%). This
asymmetry is not related to the direction of flows (we have taken the example of
the matrix F+) but to the structural difference of size between the partners of
the relation. This structural asymmetry introduces a relation of power and
dependency between the territorial units. Indeed, in the case of a commercial
conflict between the two partners of the relation, one of them will be much more

72
vulnerable than the other (respectively 4% and 65% of the trade relation to be
reoriented toward other partners).

codei FRA ITA ESP ALG MAR LBY TUN Total

FRA 47% 41% 4% 4% 1% 4% 100%
ITA 62% 29% 2% 1% 2% 4% 100%
ESP 63% 30% 2% 3% 1% 1% 100%
ALG 32% 36% 28% 2% 0% 1% 100%
MAR 65% 11% 19% 0% 3% 1% 100%
LBY 7% 68% 19% 0% 1% 4% 100%
TUN 48% 35% 8% 1% 1% 7% 100%

The structural asymmetry of relations is strongly dependant from the spatial

framework used for its computation. In previous example, we have neglected the
relations between our isolated system and the rest of the World, which can
produce false conclusions on the real level of dependency between the selected
countries. For example, the structural influence of France on Tunisia is divided
by 2 (48% to 27%) if we take into account the trade relations between Tunisia
and the rest of the World. But we can notice that at the same time the small
influence of Tunisia on France is divided by 5 (3.6% to 0.7%) because the
northern Mediterranean countries like France are much more connected the rest
of the World (70-80% of their trade relations) than the southern Mediterranean
countries (40-60% of their trade relations).

codei FR ITA ESP AL MA LB TU Rest of the Total

A G R Y N world
FRA 0% 10% 8% 1% 1% 0% 1% 79% 100%
ITA 13% 0% 5% 1% 0% 1% 1% 79% 100%
ESP 19% 10% 0% 1% 1% 1% 0% 69% 100%
ALG 17% 13% 10% 0% 1% 0% 0% 59% 100%
MAR 28% 6% 10% 1% 0% 1% 1% 54% 100%
LBY 5% 36% 9% 0% 1% 0% 3% 45% 100%
TUN 27% 20% 4% 1% 1% 3% 0% 43% 100%

5.1.3 Other measures of flows intensity

Measures of flows intensity can be produced by adding structural information out

of the flow matrix. This topic is of special importance when the diagonal of the
matrix of flows is not filled i.e. when the internal movement inside each
territorial unit are not taken into account4. Many measures of flows intensity can
be produced according to the nature of the flow and the assumption made by the

4
Many mistakes in the interpretation of flows are related to this problem of lack of information on the
internal moves of territorial units. For example, an analysis of international air flows can give the false
impression that Europe plays a major role in air traffic at world scale, simply because the internal air traffic of
United States is not taken into account

73
observer of the relations. It is not possible to specify a general solution as it
depends strongly on the type of flows which are analysed. For example the
intensity of migratory flows can be divided by the population of territorial units
(in- and out- migration rates) when the intensity of economic flows can be better
related to the GDP of the territorial unit (dependency to external trends).
Modelling of flows according to various assumptions on structural factor
determining the relations between states are certainly the most important topic
as its aim is to go behind the simple description of relations toward their
explanation and their simulation. A classical solution is the family of the gravity
model of spatial interaction which propose to explain the flow Fij between two
territorial units i and j by structural factors characterizing the origins, the
destination and the distance between origin and destination. Many other
variables can be added, as it will discuss in the following part on the concept of
structure and the linkage approach.

5.2 Preliminary sample of methods for structure analysis

As in the case of flows, we will not try here to define all possible methods which
can be applied to the analysis of structures but it is important to give a first
overview of the different interpretations and applications which can be derived
from structural information in conceptual terms and how it can be linked to the
analysis of flows. To illustrate this, we will analyse a very simple sample matrix
of attributes of the previous sample of states from Northern and Southern
Mediterranean. As in previous case, we consider for simplicity the 7 selected
states as an isolated system.

74
 Table 5-2 : Structural characteristics of selected Mediterranean countries (1999)

Name SUP AGR POP BIR GNP GDP CO2

France 552 195 59.1 709 1550 1130 391
Italy 301 109 57.7 519 1160 1040 436
Spain 506 192 39.4 355 571 555 251
Algeria 2382 80 30.8 924 46 91 102
Libya 1760 21 5.0 140 10 24 44
Morocco 447 96 28.2 649 36 102 30
Tunisia 164 49 9.5 209 20 50 17
Total 6112 742 229.7 3505 3393 2992 1271
Definition of variables
SUP Area in 1999 (thousands of km2)
AGR Agriculture area in 1999 (thousands of km2)
POP Population in 1999 (millions of inh.)
BIR Birth Rate in 1999 (thousands of
births)
GNP Gross National Product in 1999 (in billions of US $)
GDP Gross Domestic Product in 1999 (in billions of US
$ p.p.a)
CO2 Carbon Dioxide Emission in 1998 (millions of tons)

5.2.1 Size and hierarchy

The hierarchy of sizes of territorial units is the first dimension to introduce in

structural analysis, whatever the family of criteria under consideration
(economic, demographic and environmental). Size is defined by raw count
variables (“stocks” of population, area, GDP…) which can be added and
transformed into a proportion or rank of the system which is analysed for better
comparability. Sizes define the potential influence of a given element in the
system under consideration and are directly related to their ability to establish
flows with the other elements of the system (push and pull factors). The choice
of the size criteria should be made very carefully and clearly related to the
problem to be analysed. For example, if we are interested on agricultural
matters, the potential of states should be evaluated by agricultural area (where
France and Italy represent 52% of the total) and not simple area (where Algeria
and Libya represent 68% of the total). When several criteria are considered to be
important for the elaboration of a synthetic index of size is a very complicated
question because it is related to the selection of variables, to their possible
transformation (rank, proportions, standardised values, …) and to the
methodology used for the elaboration of the synthesis (arithmetic mean,
weighted mean, factorial analysis, …).

75
For example, the size of Libya appears greater than the size of Tunisia when we
use the methodology of the mean proportion on all criteria (because Libya has a
very larger area) but the situation is reversed when we consider the mean rank
on all criteria (because Tunisia has better ranks on most criteria).

Table 5-3 : Size as proportion of the whole system

Name SUP AGR POP BIR GNP GDP CO2 mean

France 9% 26% 26% 20% 46% 38% 31% 28%
Italy 5% 15% 25% 15% 34% 35% 34% 23%
Spain 8% 26% 17% 10% 17% 19% 20% 17%
Algeria 39% 11% 13% 26% 1% 3% 8% 15%
Libya 29% 3% 2% 4% 0% 1% 3% 6%
Morocco 7% 13% 12% 19% 1% 3% 2% 8%
Tunisia 3% 7% 4% 6% 1% 2% 1% 3%
Total 100% 100% 100% 100% 100% 100% 100% 100%

Table 5-4 : Size as rank of elementary spatial units

Name SUP AGR POP BIR GNP GDP CO2 mean

France 3 1 1 2 1 1 2 1.6
Italy 6 3 2 4 2 2 1 2.9
Spain 4 2 3 5 3 3 3 3.3
Algeria 1 5 4 1 4 5 4 3.4
Libya 2 7 7 7 7 7 5 6.0
Morocco 5 4 5 3 5 4 6 4.6
Tunisia 7 6 6 6 6 6 7 6.3

It is of crucial importance to notice that size can not always been reduced to a
single dimension when several criteria are taken into consideration. In many
cases, it is necessary to consider size in a multidimensional way according to the
groups of correlation between attributes defining the size of the units. In our
example, the 1st factor of a Principal Component analysis define a global size of
states on the criteria of Population, GDP, GNP, Agriculture area and CO2
emissions. But this factor account only for 68% of the initial information and a
second factor define a secondary component of size which is rather related to
birth rate and area of states and ads complements for 19% of the initial
information. Typically, Algeria has a medium score on the first dimension but a
very high level on the second one.

76
 Figure 5-1 : Size as multivariate dimension

Principal Com ponent Analysis of Sizes (axes F1 et F2 : 88 %)

2.5

Algeria
2

1.5

1
SUP BIR
0.5
P OP France
0
Morocco A GR
GNP
GDP
Libya CO2
-0.5
Italy
Spain
-1
Tunisia
-1.5
-1.5 -1 -0.5 0 0.5 1 1.5 2
- - a xe F 1 ( 6 8 %) - - >

5.2.2 Dissimilarity and identity

The analysis of similarities/dissimilarities between economic, social and

environmental structures of the territorial units defines a second field of
investigation where the attributes are not necessary related to size and will
rather focus on the relative intensity of the factors, all things being equal with
the size of the territorial units5. As an example, we will consider a set of
variables which are ratio between initial variables describing the size of territorial
units and where the initial size effect has been formally removed. The variables
which have been selected in various fields normally result from the work of an
expert which will choose the most relevant index, according to the phenomena
under consideration and the political demand to be addressed. In our example, a
specialist of demography can consider that simple population density (DEN1) is
not sufficient because many states like Libya and Algeria has whole part of their
territory with desert areas. Therefore, the expert could provide an additional
index which is a proxy of net density based on the ratio between population and
agricultural area (DEN2). The same is true in the case of economics where the
expert can consider that two different measures of wealth per inhabitant
introduce complementary information (ECO1, ECO2). And finally, the
environmental expert can propose two different measures of the consumption of
CO2 according to the fact that one focus on a social approach (ENV1) or an
economic approach (ENV2) of the problem of pollution.

5
But it is not an absolute rule and, in certain cases, factors related to size and relative intensity of
phenomena can be combined together in the same analysis.

77
 Table 5-5 : Selected demographic, economic and environmental characteristic ratios

Name DEM1 DEM2 DEM3 ECO1 ECO2 ENV1 ENV2

France 107 303 12 26200 19100 6.6 0.35
Italy 192 529 9 20100 18000 7.6 0.42
Spain 78 205 9 14500 14100 6.4 0.45
Algeria 13 385 30 1500 3000 3.3 1.12
Libya 3 238 28 2000 4800 8.8 1.83
Morocco 63 294 23 1300 3600 1.1 0.29
Tunisia 58 194 22 2100 5300 1.8 0.34
West. Medit. 38 310 15 14800 13000 5.5 0.42
Definition of variables
DEM1 Gross population density in inh/km2 (POP/SUP)
DEM2 Net population density in inh/km2 (POP/AGR)
DEM3 Birth rate (BIR/POP)
ECO1 GNP in $ per inhabitant (GNP/POP)
ECO2 GDP in p.p.a per inhabitant (GDP/POP)
ENV1 CO2 in tons per inhabitant (CO2/POP)
ENV2 CO2 in kg per $ of GDP (CO2/GDP)

As in the case of the analysis of size, it is possible to introduce many

transformations in the initial table (rank, standardisation…) and we do not further
develop the crucial importance of this step but insist on the fact that it can
heavily modify the following results of the analysis. We would rather insist on the
fact that they are two complementary ways for the analysis of such a table,
according to the fact that the focus is made on the variables (correlation) or the
territorial units (similarities). Each type of analysis produces different output
which has different applications for political decision in the ESPON program.

Correlation analysis focuses on the analysis of dependencies between variables

describing the territorial units in order to propose more synthetic parameters like
factors which summarise the initial formation in a more synthetic way. In the
sample of data on Mediterranean countries it is possible to identify more or less
trivial relations: it is obvious that the two measures of GDP/inhabitants are
highly positively correlated (+0.99) and has a negative correlation with the birth
rate (-0.86 and –0.92); but less trivial relations can be noticed as in the case of
gross population density which is correlated with the previous variable which is
not the case of net population density. The lack of significant relation between
the environmental variables and the economic and demographic parameters is
also interesting, even if it is partly related to the small size of the sample.

78
 DEM1 DEM2 DEM3 ECO1 ECO2 ENV1 ENV2
DEM1 1 0.618 -0.841 0.765 0.815 0.251 -0.643
DEM2 0.618 1 -0.212 0.353 0.349 0.209 -0.085
DEM3 -0.841 -0.212 1 -0.864 -0.919 -0.376 0.641
ECO1 0.765 0.353 -0.864 1 0.986 0.540 -0.438
ECO2 0.815 0.349 -0.919 0.986 1 0.573 -0.448
ENV1 0.251 0.209 -0.376 0.540 0.573 1 0.452
ENV2 -0.643 -0.085 0.641 -0.438 -0.448 0.452 1
in black, values significant at level alpha=0.05 (bilateral test)

As in the previous case of the analysis of the size variables, the factorial analysis
is very helpful for summarizing the correlation matrix in order to propose more
global factors of spatial differentiation. In our example, a first factor is defined by
the combination of economic and demographic variables with a clear opposition
between northern and southern Mediterranean countries. But the environmental
dimension (emissions of CO2 per inhabitants or $) reveals another opposition
between southern Mediterranean countries with an economy based on oil
resources (Libya, Algeria) and countries with a different industrial basis (Tunisia,
Morocco).

Figure 5-2 : principle component analysis of economic, social and environmental dimendations

Principle component analysis of economic, social end

environmental dimensions (axes F1 et F2 : 84 %)
2.5

2
Libya
1.5

1
ENV2 ENV1

0.5
Algeria DEM 2
ECO2 Italy
0
DEM 3
ECO1
France
DEM 1
Spain
-0.5

-1
Tunisia
Morocco
-1.5
-1.5 -1 -0.5 0 0.5 1 1.5 2
- - a xe F 1 ( 6 2 %) - - >

79
Similarity analysis focus on the differences between state which can be
expressed by a typology (cluster analysis) but can also provide a very previous
information on linkage between states through the elaboration of a similarity
matrix between states which can be directly connected to other linkage matrixes,
as we will see in next section. In our example, the dissimilarity matrix6 reveals a
very strong pattern of opposition between two groups of states located in North
and South of the Mediterranean See. But they are some exceptions, like in the
case of Spain which has a higher level of dissimilarity with Italy (3.68) than with
Morocco (3.43) or Tunisia (2.97). Libya is also very different from Morocco (4.20)
and Tunisia (3.96) but difference are also very strong with northern countries.
The related classification tree7 confirms the strong opposition between the two
groups of states and introduces some minor differences inside northern group
(Italy / France & Spain) and southern group (Algeria & Libya / Morocco and
Tunisia).

Table 5-6 : Dissimilarity matrix

Frau Ita Spa Alg Lib Mor Tun

France 0.00 2.66 1.81 4.89 5.15 4.30 4.10
Italy 2.66 0.00 3.66 5.52 6.12 5.14 5.35
Spain 1.81 3.66 0.00 4.22 4.25 3.43 2.97
Algeria 4.89 5.52 4.22 0.00 2.76 2.28 2.67
Libya 5.15 6.12 4.25 2.76 0.00 4.20 3.96
Morocco 4.30 5.14 3.43 2.28 4.20 0.00 1.00
Tunisia 4.10 5.35 2.97 2.67 3.96 1.00 0.00

Figure 5-3 : Classification tree

Dendrogramme
30.00

25.00

20.00
Dissimilarité

15.00

10.00

5.00

0.00
Tunisia
Spain
Italy

Algeria

Libya
France

Morocco

6
Based on the classical Euclidean distance between standardised variables.
7
Based on Ward’s criteria applied to Euclidean distance between standardised values

80
5.2.3 Differences and complementarity

The analysis of differences (or gradient) is statistically very near from the
previous topic of dissimilarities but is conceptually very different because it
introduces an asymmetric dimension in the analysis of the structural relations
between states. As we have seen before, the dissimilarity is a symmetric linkage
where the value which describe the link between 2 territorial units i and j is equal
to the value which define the link between j and i. In the case of differences, the
relation is asymmetric and the relation between i and j is the opposite (or the
inverse) of the relation between j and i. This crucial difference can be explained
through the simple example of the differences of GNP/inhabitants between the
sample of Mediterranean countries.

The absolute differences can be measure in a very simple way as the arithmetic
difference between the territorial units. For this criteria, the difference of GNP/inh
between France and Italy (±6100 $/inh.) is considered as much more important
than the difference between Tunisia and Algeria (±600 $/inh ).

Xi-Xj Fra Ita Spa Alg Lib Mor Tun

France 0 6100 11700 24700 24200 24900 24100
Italy -6100 0 5600 18600 18100 18800 18000
Spain -11700 -5600 0 13000 12500 13200 12400
Algeria -24700 -18600 -13000 0 -500 200 -600
Libya -24200 -18100 -12500 500 0 700 -100
Morocco -24900 -18800 -13200 -200 -700 0 -800
Tunisia -24100 -18000 -12400 600 100 800 0

The relative differences take into account the relative level of GNP/inh. or the
couple of state and can be measure in a very simple way as the ratio of the value
of the indicator for each couple of territorial units. For this criteria, the difference
of GNP/inh between France and Italy (1.3.) is considered as much more
important than the difference between Tunisia and Algeria (±600 $/inh).

Whatever their method of evaluation, matrix of differences are a crucial

structural component for the analysis of flows because they define opportunities
of relation related to the concept of complementarity. It is conceptually very
different from the matrix of dissimilarities which can also have an effect on flows
but are rather related to the concept of identity.

5.2.4 Spatial proximity: geographical neighbourhood and network

accessibility

The various measure of spatial proximity can also be considered as structure as

far as they determine in several ways the possibility of flows between territorial

81
units according to time or cost of relation. It is not the place to develop in detail
the various measure of spatial proximity which can be introduced in the analysis
of the position of Europe in the World but it is important to make a clear
distinction between two very different forms of structural links according to the
fact that they define a continuous (geographical neighbourhood) or discontinuous
(network accessibility) approach of space.

Geographical neighbourhood can be defined as information which is mainly

related to the geometry of spatial units and based on the existence of common
borders (contiguity) or the physical distance in kilometres between various points
of the area of each territorial unit. The geographic definition of European
neighbours under geographical criteria is not trivial as it can be seen on the
example proposed in figure 5-4. If we use a map with a low level of spatial
resolution –indicating only the main area without small islands or territories
located out of the main territorial body of each state – we will eliminate many
case of contiguity between territorial units. For example the common border
between Spain and Morocco through Ceuta and Melilla or the common border
between Russia and Poland or Lithuania through the district of Kaliningrad. In
certain cases, the question is not only technical but also political as in the case of
the definition of contiguity between Cyprus and Turkey which would be, de facto,
recognition of the occupation of the northern part of the island… The existence of
a common border between two states is a very fundamental topic for many types
of flows (e.g. juridical consequence of unofficial migrations toward the territories
of Ceuta and Melilla) but it is also very symbolic information which modifies the
representations of people and policymakers. We have limited here our example
to the case of the pan-European area but it is obvious that the question should
be analysed in a world wide perspective in ESPON 341 because many states of
Europe (in particular France and UK) has remote territories which create
geographical neighbourhood between EU and many other continents (e.g.
contiguity between France and south American countries through the French
department of Guyana).

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 Figure 5-4 : Common border between states in pan-European area

The question of the definition of contiguities has also important consequences on

the cartography of structure. If we decide, for example, to produce a map of
relative discontinuities of GNP/inh. at international level (Figure 5-5) we will
produce a map where important discontinuities can be pointed in central and
eastern part of Europe (e.g. between Finland and Russia) but we will not provide
any information on the discontinuities which exist between northern and
southern coast of the Mediterranean See and are of comparable importance, as
we have seen in the previous section. We will neither sea the discontinuities of
wealth between European Union and the Balkan countries, despite the high level
of flows which are related to this structure (e.g. migrations between Albania and
Italy).

Figure 5-5 : Discontinuities of GNP/inh. between states along terrestrial borders

83
In this situation it is of utmost importance to propose other measures of
geographical proximity, based for example on the minimum distance between
the borders of states separated by sea and to consider that the neighbourhood
exist if the minimum distance is lower than a given threshold (e.g. 50 or 100 km)
and if the sea can be crossed easily. But we see that, in this situation, the
geographical neighbourhood is not based only on geometry and take into account
other information on the possibility for migratory flows to cross channels which
mean that we are in fact introducing a proxy of the concept of network
accessibility.

Network accessibility is not based on a hypothetical effect of physical distance

but introduce explicit assumptions on the technical or practical solutions which
contribute to the realisation of flows between territories. According to the nature
of flows which are considered of interest, various form of network accessibility
can be defined related for example to different modes of transportation (air, rail,
road…) and their possible connexion in multimodal networks. In the framework of
the limited budget of ESPON project 3.4.1, it will probably not be possible to
analyse this point in too much details but it is important to keep in mind that
network accessibility does not exist without consideration of the flows which can
be related to a particular infrastructure of communication. It is also of utmost
importance to introduce a social dimension in the measure of network
accessibility because all types of networks can not be used by all social groups
according to their resource or knowledge (e.g. internet).

From conceptual point of view, network accessibility is fundamentally different

from geographical neighbourhood because it is often related to connexion
between nodes which are located in a discontinuous space (e.g. gateway cities).
It is related to difficult questions concerning the scale of analysis, the basic
territorial units of the study. Indeed, the fact that a state has a good airport
connexion in a given point of his territory does not mean that all other parts of
the territory of this state can benefit from this infrastructure, depending on
internal networks which connect secondary centres to the main Hub. Reversely, a
State which does not have a good airport on his own territory can benefit from
the infrastructure of other neighbouring states, at less in the border area.

Geographical neighbourhood and network accessibility are complementary

structure which should both be taken into account if we want to get a sound
interpretation of flows between Europe and the rest of the World

84
5.3 Preliminary sample of methods for synthetic analysis

We will now briefly explain how the various types of synthesis can be made,
without going in too many details.

5.3.1 Thematic synthesis

Thematic synthesis on a particular field will be based on the use of models who
integrates flows and structure in a systemic way. As a very simple example, we
will illustrate the methodology of gravity model of spatial interaction applied to
the economic exchanges between northern and southern Mediterranean states
which has been previously analysed.

We propose to estimate the trade flows (Fij) between two states as a function of
the economic capacity described by the GNP of the country of origin (GNPi) and
the GNP of the country of destination (GNPj). We introduce also an assumption
on the role of geographical distance (Dij) and geographical neighbourhood
described by the presence of a common border (Cij). The structure of the model
is a classical gravity assumption that:

Fij = α. (GNPi) β1. (GNPj) β2. (Dij)γ . δ(Cij)

The parameters are estimated by linear regression after logarithmic

transformation:

Log(Fij) = a0 + a1.log(GNPi) +a2 log (GNPj) + a3 log(Dij) + a4.Cij

=> With α= exp(a0) ; β1=a1 ; β2=a2 ; γ=a3 ; δ=exp(a4)

The analysis of the results of multiple regression indicates that both push and
pull factors (GNPi and GNPj) has significant positive effect on the level of trade
flows between partner state but not the geographical distance (Dij) and the
geographical neighbourhood (Cij) which do not appears to have a significant
influence of trade flows between the set of countries which has been selected.
The value of geographical parameter indicate that the presence of a common
border has a slow positive effect on trade flows (+36%) but it is not significant
has it is not a regular result. More surprisingly, distance appears to have a small
positive effect, which means that trade increase when distance increases, which
is very unusual but can be explained by the relative homogeneity of distance and
the fact that we have use a very rough definition of proximity (Euclidean distance

85
between geometrical centres of states). As we will see later, this contradiction is
related to a bad specification of distance.

The proposed model explains 72% of the variation of flows between states but
let unexplained 28% of the initial information on trade flows. The analysis of the
residuals of the model is therefore a very interesting way for the discovery of
other explanatory variables which has been introduced in the initial formulation
of the model. Absolute residuals are computed as the difference between
observed and predicted flows and relative residuals as the ratio between
observed and predicted flows (see. below)

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 Table 5-7 : Observed trade flows
Fij FRA ITA ESP ALG MAR LBY TUN Total
FRA 27626 24224 2145 2322 297 2103 58717
ITA 27446 12873 830 561 977 1564 44251
ESP 19739 9525 664 966 162 334 31390
ALG 1878 2137 1665 124 1 79 5884
MAR 2533 427 739 14 107 53 3873
LBY 467 4269 1199 2 58 241 6236
TUN 1640 1209 276 35 40 225 3425
Total 53703 45193 40976 3690 4071 1769 4374 153776

Table 5-8 : Expected trade flows

F*ij FRA ITA ESP ALG MAR LBY TUN Total
FRA 36728 20346 1479 431 1255 725 60964
ITA 37274 8682 1173 355 956 546 48986
ESP 21409 9001 666 379 589 338 32382
ALG 1769 1383 757 57 83 98 4147
MAR 558 452 465 62 28 17 1582
LBY 1520 1141 678 84 26 83 3532
TUN 905 672 401 102 16 86 2182
Total 63435 49377 31329 3566 1264 2997 1807 153775

Table 5-9 : Absolute residuals (Fij – F*ij)

F*ij FRA ITA ESP ALG MAR LBY TUN Total
FRA -9102 3878 666 1891 -958 1378 -2247
ITA -9828 4191 -343 206 21 1018 -4735
ESP -1670 524 -2 587 -427 -4 -992
ALG 109 754 908 67 -82 -19 1737
MAR 1975 -25 274 -48 79 36 2291
LBY -1053 3128 521 -82 32 158 2704
TUN 735 537 -125 -67 24 139 1243
Total -9732 -4184 9647 124 2807 -1228 2567 0

Table 5-10 : Relative residuals (Fij/F*ij)

Fij FRA ITA ESP ALG MAR LBY TUN Total
FRA 0.75 1.19 1.45 5.39 0.24 2.90 0.96
ITA 0.74 1.48 0.71 1.58 1.02 2.86 0.90
ESP 0.92 1.06 1.00 2.55 0.28 0.99 0.97
ALG 1.06 1.55 2.20 2.18 0.01 0.81 1.42
MAR 4.54 0.94 1.59 0.23 3.82 3.12 2.45
LBY 0.31 3.74 1.77 0.02 2.23 2.90 1.77
TUN 1.81 1.80 0.69 0.34 2.50 2.62 1.57
Total 0.85 0.92 1.31 1.03 3.22 0.59 2.42 1.00

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The analysis of the margin of the matrix of residual indicates firstly that some
states are more involved in the trade of the area than other. For example, we
can notice that northern Mediterranean countries export less than expected with
other countries selected when southern countries export much more than
expected. The situation is not exactly the same for importation where we can
notice exception to the previous rule (Spain, Libya).

The analysis of the internal part of the matrix of residuals reveals specific
linkages between couples of states which have significant positive or negative
residuals, indicating preferences or barriers effects according to the variables
introduced in the model. For example, if we focus on north-south trade relations,
we can observe that France has significant positive residuals in both directions
with Morocco, Tunisia and at a less degree Algeria (only for exportation) but
negative residuals with Libya. Italy has significant positive residuals in both
direction with Tunisia and at a less degree with Libya and Algeria (only for
importation) and Morocco (only for exportation). Spain has positive residuals
with Morocco in both directions and at a less degree with Algeria and Libya (only
for importations). The analysis of residuals suggest very clearly missing variables
in the model like historical heritage related to colonisation (France with Maghreb
and Italia with Libya) or common language (France and Maghreb). It can also
reveals some misspecification in the parameter introduced in the model like
geographical distance which has been measured as distance between gravity
centre of area but would be better described by minimum distance between
external borders (explaining therefore the intensity of relations between Italy
and Tunisia or Spain and Morocco).

This example indicate clearly how the step of joint modelling of flows and
structure help to discover hidden factors and suggest connexion with other
thematic fields of interest for a better estimation of the model which can be
improved and calibrated in a hypothetico-deductive process.

5.3.2 Structural synthesis

This point will not be developed as most methods for joint analysis of several
thematic structures are similar to the methods which have been presented for
the analysis of a single structure (see. B.2). Multivariate analysis (factorial
analysis, classification, similarity, discontinuity can be either applied to a
homogeneous table of economic variables or to a table combining social,
economical, demographical and environmental data.

88
The only point to precise is the mathematical type of variables introduced in the
analysis (quantitative, qualitative, ordinal…) because it can modify the choice of
the most relevant statistical tools to be applied to structural analysis. For
example, if we want to analyse the correlation between the qualitative variable
“Belonging to EU” and other quantitative variables we will not use classical
correlation or regression model but variance analysis. For example, the variance
analysis indicates clearly the existence of a very significant opposition between
and northern and southern Mediterranean countries on the criteria of economic
development measured by GNP/inh (90% of variance explained, significant at
level 0.001). But this opposition is not systematic and, for example, it is not
possible to define a significant north-south opposition on the criteria of ecological
efficiency measured by CO2 per $ of GNP (20% of variance explained, non
statistically significant). In this case, the real opposition is rather between
countries with oil production (Libya, Algeria) with emission of CO2 per $ and all
other countries of the area.

Table 5-11 : Relation between economic development (GNP/inh.) and belonging to EU.

Source ddl SSQ Mean F - Fisher Pr > F

Square
Model 1.000 589360119 589360119 42.748 0.001
Residual 5.000 68934167 13786833
Total 6.000 658294286
r2 = 90%

Table 5-12 : Relation between Ecological efficiency (CO2/GNP) and belonging to EU.

Source ddl SSQ Mean F - Fisher Pr > F

Square
Model 1.000 0.409 0.409 1.274 0.310
Residual 5.000 1.604 0.321
Total 6.000 2.013
r2 = 20%

Many ideas for structural synthesis are related to the research on synthetic
indexes of human or sustainable development which are actually analysed in
ESPON 3.2 in the work packages related to the construction of a European
Territorial Cohesion Index. Therefore, the TPG ESPON 3.4.1 will take benefit from
this existing material in order to gain complementarity between the different
parts of the whole ESPON program.

5.3.3 Flows synthesis

As it was explained in part B.1, the various type of flows are not independent
from each other and correlation or causal relation can be established between

89
various types of flows which link states together. The synthesis of various types
of flows is not necessary difficult if the methodology used by the different
partners in charge of the various thematic flows is made similar and coherent at
the very beginning. As they are many solutions for the transformation of initial
matrix of flows (see B.1), it is crucial to introduce common methodology and
common indexes in all work packages, even if some adding methodologies and
variables should be applied on particular types of flows (like air connexion). It is
obvious that the elaboration of a cross-thematic database of flows, which is a
main concern of project ESPON 3.4.1. will introduce a sensible reduction of the
initial information because, for example, the territorial units available in each
matrix of flows will not be exactly the same and because the elaboration of a
common territorial breakdowns will oblige to reduce the spatial resolution of the
analysis.

As an example, the analysis of air connexions should normally be realised at city

or airport level in a first step, but data will be further aggregated at national level
in order to be combined with economic or migratory flows which can not be
obtained at city level.

The same problem will appear in the case of introduction of an historical

dimension in the analysis of a given type of flow. As limits of states are changing
through time and that many states has been broken in several others after 1989
(Soviet Union, Yugoslavia, Czechoslovakia…) it will not be possible to introduce
any historical dimension in the analysis of flows without geographical aggregation
of territorial units. In certain cases, it is possible to try a reconstitution of past
flows in new borders but is very expensive and impossible as regard to the
limited resources available in ESPON 3.4.1. In certain cases, it is only between
very big aggregates of world region that it is possible to proceed to such
evaluation of flows through time.

In many cases, due to lack of information (holes in matrixes of flows) and

difficulty to harmonise various types of criteria, will we limit our synthesis to the
comparison of qualitative variables indicating if flows are, for example “High”,
“Medium” or “Low”. Those typologies introduce a dramatic reduction of initial
information but are probably the most efficient solution for cross-thematic
synthesis of flows in the context of our project.

In our Mediterranean example, we have seen that it was relatively easy to

distinguish three levels of trade flows, because of strong discontinuities in the
statistical distribution8. According to the level of bilateral commercial exchanges
(Trade), we can associate to each couple of origin and destination a qualitative

8
Many statistical methods like Jenk’s algorithm can help in the objective determination of typologies of
quantitative variables, but it is also important to take into account the expert advices on each subject.

90
value according to level of flows. We do the same for two other matrixes of flows
describing the number of air passengers between states (Air1) and the number
of couples of cities connected by a minimum number of passengers (Air2)9. As
variables are strongly correlated, it is relatively easy to define a global synthesis,
except in particular case where we can observe a heterogeneous combination of
high and low flows (e.g. France and Libya with low level of commercial trade but
high level of air connexions).

Table 5-13 : Synthesis of three types of flows between Mediterranean countries

Origin/Dest. Quantitative Qualitative flows Flows

flows
I j Trade Air1 Air2 Trade Air1 Air2 Synthesis
FRA ITA 55072 5494041 284 3 3 3 3
FRA ESP 43963 5052059 288 3 3 3 3
FRA ALG 4023 1448096 42 2 3 3 3
FRA MAR 4855 3144 4 2 1 2 2
FRA LBY 764 2121522 79 1 3 3 2*
FRA TUN 3743 2656246 67 2 3 3 3
ITA FRA 55072 5494041 284 3 3 3 3
… … … … … … … … …
… … … … … … … … …
LBY TUN 466 53002 2 1 1 1 1
TUN FRA 3743 2656246 67 2 3 3 3
TUN ITA 2773 105502 10 2 2 2 2
TUN ESP 610 213556 24 1 2 2 2
TUN ALG 114 0 0 1 1 1 1
TUN MAR 93 0 0 1 1 1 1
TUN LBY 466 53002 2 1 1 1 1
Trade = bilateral commercial flows; Air1 = number of passengers; Air2 = number of city connexions
3 = Main flows; 2= Medium Flows; 1 = Small Flows; * indicate a mixture of high and low flows.
Qualitative transformation is based on statistical discontinuities in the distribution of each type of flow

It is now easy to propose a synthetic analysis of flows between Mediterranean

countries which can be represent in matrix or graphic form.

9
Notice that the introduction of this variable help to limit the lose of information introduced by the
aggregation of flows between airport at state level.

91
 Figure 5-6 : Synthesis of air and trade flows between selected western Mediterranean countries

nt. FR IT ES AL M LB TU Tot
A A P G AR Y N al
FRA 3 3 3 2 2 3 16
ITA 3 3 2 1 2 2 13
ESP 3 3 2 1 2 2 13
ALG 3 2 2 1 1 1 10
MAR 2 1 1 1 1 1 7
LBY 2 2 2 1 1 1 9
TUN 3 2 2 1 1 1 10
Total 16 13 13 10 7 9 10 78

The synthetic pattern of flows which is derived from the synthesis demonstrate
clearly a high level of integration between northern Mediterranean countries
which are connected by high level of flows on all criteria and, reversely, the lack
of integration between southern Mediterranean countries which has always low
level of flows in their relation to each other. Concerning north-south relations,
the major role is played by France which has high level of flows with Algeria and
Tunisia and medium level of flows with Morocco and Libya. Italy and Spain has a
medium level of relation with all southern Mediterranean countries, except
Morocco which appears as the less connected to the rest of the area for the
selected criteria of flows (trade and air connexions). Those results are not
surprising but they illustrate the way we propose to deliver relatively simple and
synthetic messages, useful for political decisions.

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6 DICTIONNAIRE OF CONCEPTS

6.1 Integration Zones

The geographical integration is a process by which places become clearly linked
with other ones and eventually become interdependent. They can constitute a
new space or a new territory. The integration can involve either equally or
unequally developed territories. The places constituting that new territory
become then distinct from other places, with which they constituted before
another geographical unit. One has to distinguish between spatial integration and
territorial integration and take into account the different levels at which the
process occurs.
In the case of spatial integration, places are connected by functional
economical, demographical, informational, cultural links eventually without any
institutional support. This kind of integration involves contiguous portions of
space belonging to different countries. What P. Mehlbye (2000) defined as
European Global Integration Zones (GIZs) can be included in this first definition.
The GIZs are clusters of metropolitan urban areas linked by strategic cooperation
programs. This kind of zone offers “high quality global economic functions and
services, which enable a high-income level and a well-developed infrastructure”.
The core area is characterized by “a more dense and dynamic territorial structure
both in term of its node (metropolitan regions, cities and towns) and links
(external and internal communication network)”. Nevertheless, the process of
integration is not necessarily based on voluntary programs of cooperation in such
domains as policy, spatial planning, regional development, economics, etc…

The territorial integration implies several countries in a project set up in order

to face the process of globalisation. This process can be understood as the
gradual integration of all societies in the highest geographical level: the World. In
order to face globalization which is more or less perceived as a constraint, the
necessity to reach the relevant size (that of United States or China) encourages
numerous countries to be part of regional integration zones. This project can be
based on an institutional basis for which European Union is seen as a model. In
such case, the idea of a common belonging or future is promoted. However, EU
integration zone, in which the different member states become step by step
economically interdependent, remains an exception. The process of integration
can also be based on lighter ties and fewer cooperation programs, involving only
a few domains, economic and financial for instance, like trade agreements or
customs unions (Viner, 1950).
There are also connexions between the general concept of integration zone and
that of optimal monetary or commercial zone, first defined by economists among
which Mundell (Mundell, 1961 & 1969). Optimal monetary zones are large, and
eventually multinational, groupings of territories. They are homogeneous enough

93
to allow the mobility of the factors of production at a reasonable cost (money
and labour force for instance), economies of scale, implementation of well
balanced public policies and finally good governance.
The process of integration which gives way to the emergence of integration
zones has evident connexions with the process of regionalization because each
integration zone, spontaneous or politically planned, whatever its size is, is
always a subset of a wider ensemble (see Regionalization).

References
• List, F., 1966, The National System of Political Economy, New York, Kelley.
• Mehlbye, P., 2000, “Global Integration Zones – Neighbouring Metropolitan
Regions in Metropolitan Clusters”, Informationen zur Raumentwicklung, vol
11.
• Mundell, R., 1961, “A theory of optimum currency areas”, American
Economic review, n°51.
• MUNDELL R., 1969, Monetary problems of the international economy,
Conference on International Monetary Problems, University of Chicago,
University of Chicago Press.
• Rollet, P., 1987, Spécialisation internationale et économie européenne,
Paris, Economica.
• Siroën, J.M., 2000, La régionalisation de l’économie mondiale, Paris, La
Découverte.
• VINER J., 1950, The Customs Union Issue, London, Carnegie Endowment
for International Peace.

6.2 Centre / Periphery

The geometrical metaphor of the centre and the periphery is often used in order
to describe the opposition between two basic types of places in a spatial system
in the frame of hierarchical and dissymmetrical relations. In this spatial system,
the centre benefits from peripheral zone and controls it; the peripheries are
subjected to the centre. This conceptual couple has been lasting since at least
Werner Sombart (1909), if not since Marx, and has been used by the
theoreticians of the imperialism (Luxemburg, 1972; Boukharine, 1977). The
economists who work on the development disparities gave it its current meaning
(Samin Amin, 1973). Alain Reynaud (1988) extended the use of the notion to the
field of geography. According to him, the centre is a place of concentration of
population, wealth, information, innovation capacity and decision power and the
periphery is the contrary.
The concept can be applied to all geographical levels (village, town and region).
However it has been mainly used at the global level as an equivalent to
developed/developing worlds or North/South. The couple centre/periphery allows

94
to describe the opposition between two spaces but above all it suggests an
explanation of this differentiation: the periphery is dominated because the centre
dominates. As a consequence, this concept has been mainly used in third-
worldism thoughts more or less as a way to give bad conscience to the people of
western countries. This usage is very restrictive and the concept is more
efficient. Indeed asymmetric relations do not necessarily mean that the centre
exploits the periphery. To think about centre and peripheries makes possible
thoughts about the interaction between places in the World: mutual dependence
links in which the disparities are the norm.

Without relation between those two kinds of spaces, and therefore flows (of
people, goods, capitals, information, decisions) the couple has no meaning. But
more, the relations have to be asymmetric (unbalanced flows, power relations
hierarchy). The centre is central only because it benefits from this difference and
peripheries undergo a deficit that maintains its dominated situation. This system
is thus self-regulated: the centre reproduces the conditions for its centrality.
Because it is based on unbalanced exchanges, the system is dynamic. If some
peripheries can become blind spots (they are then so called neglected) others
can benefit from their situation: interface with places located outside the spatial
system, final comparative advantages that are in line with the principle of
international division of labour. That can lead to polarity inversion within the
same scheme or to changes of system. The possibilities for action toward
changing the position of peripheries involve of work of continuous positioning
inside different networks and creation of new networks (Castells, 2001).

The centre/periphery model has therefore a strong heuristic capacity if it is not

too much simplified. The model is not obviously dual: in theoretical level the
semi-periphery has already existed, but in the empirical research some other
categories can appear: core area, dynamic side, inner periphery and external
periphery. To overpass the schematic representation of domination of peripheries
by centres it can be useful to introduce the concept of urban or metropolitan
archipelago (Veltz, 2005).

References:

• SOMBART W., 1909, Die deutsche Volkswirtschaft im neunzehnten Jahrhundert,

Berlin, G. Bondi.
• LUXEMBURG R., 1972, L'accumulation du capital. Contribution à l'explication
économique de l'impérialisme, volumes 1 et 2, Paris, Maspero.
• BOUKHARINE N., 1977, L'impérialisme et l'accumulation du capital, Paris,
Études et documentation internationales.
• SAMIR A., 1973, Le Développement inégal, Éditions de Minuit.

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 • REYNAUD A., 1988, Analyse régionale : application du modèle centre et
périphérie, Travaux de l'Institut de géographie de Reims, n°75/76, Reims.
• CASTELS M., 2001, L'ère de l'information, La société en réseaux, Paris,
Fayard.
• VELTZ P., 2005, Mondialisation, villes et territoires : l'économie d'archipel,
Paris, Presses universitaires de France.

6.3 Regionalisation

A region is a subset of a geographical entity whatever its scale is. Using the word
“region” is always done with a scalar perspective: the upper level is implied. For
classical geography as for French administrative terminology a region is the first
level of subdivision of the national territory (as the Lander in Germany). Today
the word “region” is frequently used to refer to parts of the World grouping
together several countries.

The regionalisation is therefore the subdivision, spontaneous or intentional, of a

geographical entity. Part of the debate on the impacts of Europeanization uses
the term “regionalisation” in reference to processes of subdivision of the national
state into regional sub-authorities. These processes manifest themselves into the
(partial) decentralisation of national governments functions to the regions and to
the increasing demand for more regional autonomy of self-government. In
European states where the regional level (institutional, geographical or cultural)
was not defined, there is an arbitrary definition of “paper regions” which are
often an artificial set up for the purpose of finding a suitable institutional level for
the targeting of EU structural aids. The latter phenomenon is particularly evident
in the new member states (Poland, Slovenia) and in some older ones as well
(Portugal). The implication of this subdivision is the “coming to life” of new actors
and therefore of new powers in the decisional and implementation networks of
important European policies, a structural change whose implications are still
undefined.

The economic literature uses the word “regionalisation” in an original meaning

referring more to grouping than to division. It was already the case in the French
political vocabulary, where “regionalisation” referred to the grouping of
departments in a wider set that could remind the former provinces. Nowadays,
“regionalisation” refers to the voluntary construction of a supranational and sub-
global entity by contiguous countries. The European Union construction is the
archetype of this process. The subdivision of the World justifies the use of this
word. However that should not hide the fact that a non negligible number of
World countries are not concerned by any regionalisation or are very weakly
involved. That makes any thought on world “region” difficult. If some subset can

96
be clearly identified (for example large States and their peripheries like USA or
China, or advanced regionalisation construction like European Union), for the rest
of the World every thing is confusing. According this viewpoint, it is not that
obvious to consider the regionalisation as a functional subset of the globalisation
process. That would imply that the world system needs large subdivision and not
an anomy of isolated countries nor the coexistence of large and small groups and
nor badly structured places. With such a viewpoint the regionalisation of some
part of the world appears as an effort of construction of concurrent poles, even if
their hierarchy is strong, in a polycentric world where a large part of the
humankind is still in the periphery.

Theoretical debates about regionalization.

In the field of economic research, several theories have been proposed about the
process of integration since the works of F. List. According to him, the formation
of a common economic territory (such as the Zollverein) was the best way to
protect recent industries. The classical and neoclassical approaches are market
based theories: then, the process of regional integration is criticized because it
hampers the development multilateral free-trade. According to other economic
theories, regional protectionism is considered as a highly relevant solution for
small and large countries in the context of increasing competition between firms
of all countries. The commercial integration may provide many advantages. For
example, Mundell showed that a process of integration involving poor countries
can enhance the mobility of capital towards them (Mundell, 1968). The inward
flow of investments in these countries makes possible the convergence of capital
endowments between small and large countries. The formation of a customs
union by small and poor countries is then a relevant solution to create the
conditions of a greater competitiveness at the international level. In a static
approach, other economists have proposed various theories about the customs
unions (Viner, 1950; Tinbergen, 1954; Meade, 1955; Scitovsky, 1958). These
unions mean that a group of countries decide to turn down every barrier and
obstacle in order to support the trade flows between them. In the same time,
they establish a common external tariff for their imports. Therefore, a customs
union can have two possible effects:
- the replacement of imports previously coming from non member countries by
an internal flow coming from a member country of the union, even if this internal
flow is more costly (trade diverting).
- a production made in a member country can be replaced by a new one, made
by another member state of the union but less costly.
In a more dynamic approach, some economists emphasize the idea that a
customs union is likely to affect the conditions of the economic growth. They
underline the following effects of the establishment of such unions: creation of
economies of scales (the productivity increases and the production costs

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decrease, see Krugman, 1995); increase of the competition between firms of
member countries (diminution of prices); diminution transaction costs (market
extension)…
Another subject of discussion about the process and the forms of regionalization
is its connections with that of globalization. The question is then: multilateralism
versus regionalization? Or multilateralism going along with regionalization?
Economists usually think that multilateralism (i.e. the extension of the most
favoured nation status to every country in the world) is the best way to increase
the level of well being at the global level. But this idea is relevant only in the
context of a “concurrence parfaite” on a totally transparent market, which is
actually not the case (trade barriers, fluctuation of exchange rates…). In this
frame, economists have discussion about the following topics: does the increase
of intraregional trade cause a decrease of interregional trade flows? Can the
formation of a regional market have any consequence on the level of well being
of non member countries (Viner, 1950)? To the second question at least, it is
hard to give any definitive answer: to have a clear idea of the effects of
regionalization on the rest of the World, one must be able to identify many
variables. But some economists, such as P. Krugman, have tried to estimate the
number of market zones which would make the level of well being of the World
decrease (Krugman, 1991). These debates are based on the idea that these
unions are politically planned. But, in some cases, the process of regionalization
is more spontaneous and is not based on any external common tariff barrier
(Eastern Asia). The effects of such process may be different.

References:
• Krugman, P., 1991, “The move toward free trade zones”, Federal Reserve
of Kansas City Econpmic Review, 1991.
• Krugman, P., Obstfeld, M., Economie internationale, Bruxelles, De Boeck.
• List, F., 1966, The National System of Political Economy, New York, Kelley.
• Meade, 1955, The Theory of Customs Unions, Amsterdam, New Holland
Pub Co.
• Mundell, R., Swoboda, A., 1970, Monetary Problems of the International
Economy, Chicago, London, University of Chicago Press.
• Mundell, R., 1961, “A theory of optimum currency areas”, American
Economic review, n°51.
• Scitovsky, T., 1958, Economic Theory and Western European Integration,
G. Allen and Unwin.
• Tinbergen, J., 1954, International Economic Integration, Amsterdam,
Elsevier.
• Tinbergen, J., 1954, Customs Unions: Influence of Their Size on Their
Effects.
• Viner, J., 1950, The Customs Union Issue, New York, Carnegie Foundation
for International Peace.

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 • Frankel, J.A. (ed), 1998, The Regionalization of the World Economy, NBER,
University of Chicago Press.
• Fouquin, M., 1993, “Le développement du régionalisme commercial”, La
Lettre du CEPII, Novembre, released in Problèmes Économiques, 2. 366,
March 1994, pp. 29-32, p. 29.

6.4 Polycentrism

“Polycentricity” is used as a self-explanatory concept, characterising something

that is opposite to monocentricity on the one hand and dispersal and sprawl on
the other. It is supposed to contribute to balanced regional development,
European competitiveness and sustainable development, and to facilitate new
urban-rural partnerships.

Two structural aspects are of particular relevance to polycentricity.

The morphological aspect. The urban pattern may be either strongly or
weakly hierarchical. Two extreme patterns can be identified: Mono-nuclear
pattern where dominant city and several peripheral/dependant cities or poly-
nuclear pattern where cities are quite similar in size and where there is no
dominant city.
The relational aspect. Polycentricity is based on the networks of flows and co-
operation between urban areas at different scales that may be oriented in
different ways between centres. Two extreme patterns can be identified. Mono-
oriented relations are preferentially oriented towards one centre whereas multi-
directional relations have no obvious orientation.

The development of synergies of cities implies the development of significant

mutual connections between cities, and not just linking up with a main node.
Accordingly, a mono-oriented relational pattern is therefore incompatible with
polycentricity. Thus, in general it is supposed that polycentric urban relations are
most likely to develop in systems of even-sized cities that could see an
opportunity in achieving the advantages of one larger “city” by establishing
binding political relations and co-operation across complementary urban
functions. However, urban relations based on urban specialisation might also
occur between cities of different size. Polycentricity is facilitated by a poly-
nuclear pattern, but polycentric policies may still be successfully implemented
within a hierarchical spatial configuration without necessarily remodelling the
balance between the concerned nodes.

Urban relations of polycentric systems may be identified as follows:

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Institutional, based on voluntary co-operation; Institutional or political
polycentricity relies on co-constructions, co-operation, and on the willingness of
territorial agencies to work together on joint projects and strategies. The cities
may, or may not, be complementary with regard to urban functions. The
functional complementarity is not a pre-condition for cooperation. What is
important here is that two or more cities develop common projects in order to
build thematic and joint projects, actions and strategies, to exchange knowledge,
best practices etc. and to share equipment and upgrade infrastructure (cultural,
social, transport, etc.).

Structural, resulting from “spontaneous” spatial development. Structural

polycentricity is related to the organisation of a territory via spatial patterns of
economic or functional relations and flows. Structural relations and flows are not
necessarily nested in urban strategies. Rather, they are “spontaneous” products
of overlapping housing or labour markets, of specialised networking between
urban located actors or simply historically established cultural, economic or social
relations. Thus, structural polycentricity may be identified as road, rail and air
traffic, financial flows, information flows, etc.

Different kinds of polycentricity are related to different spatial levels. Distant

urban areas may be connected through various types of relations such as
market-based flows or exchanges, or co-operation directed towards the sharing
of experiences, methods, or information, or by participating in a development
project, etc. These relations are characterised by connectivity rather than
proximity.

Spatial proximity between urban areas potentially allows other forms of co-
operation and integration: economies of scale through shared infrastructure,
such as universities and hospitals; common strategies to manage flows and
exchanges generated by commuters, telephone calls, etc… The most frequently
used indicator for economic integration is travel-to-work intensity between cities.
A situation with intense commuter flows in both directions would be a sign of
integration and of polycentricity. Examples of institutional polycentricity are co-
operation in spatial planning, common visions, shared functions etc. The EU has
encouraged cooperation in cross-border regions through Interreg IIIA
programmes.

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6.5 Gateway (cities)

ESPON 1.1.1 definition of Gateway city

Basic definition

The geographical concept of gateway, in the current framework of economic

globalization, refers to the capability of some territories to attract flows and to
built up relations with actors operating at different geographical scales. Basically,
gateway territories represent transversal geographical entities operating at
different scales in the local-global dialectic (Conti, 1997).
In case of cities, gateways are poles in a system of relationships of which the
distinctive feature is that all flows pass through them. On the one side, they
attract flows of all kinds – material or informational – from abroad, re-
disseminating flows on the continent. On the other side, gateway cities are
nested in local network spaces, connecting low-level local cities that have not
direct access to supra-level networks, assuming the function, in this sense, of
connecting regional economies to the global space (Camagni, 2002). Moreover,
this “gate”-like function is in favour of both the development of interface
activities, which, in a highly competitive environment, must challenge a greater
free flow, and the development of activities enhancing those flows.
Nevertheless, the concept of gateway may be applied at larger geographical
scales, for example the national ones. In some cases, many peripheral regions or
states have not the capability to fully interact with global flows, and therefore
they relate to other transversal regions acting as gateways: this is the case of
many peripheral territories whose economic activities are linked to relations with
semi-peripheral states, according to Wallerstein’s terminology: this is the case of
some African countries, leaning on Northern African countries in order to built up
economic flows with Europe (Società Geografica Italiana, 2005). Even more
important, the concept should not be considered in a strictly hierarchical way
(central regions connecting peripheral ones), and it has to be considered how
spatial proximity still plays a fundamental role in shaping economic flows,
favouring or hampering the penetration of products, investments, commercial
flows, the movement of workers, etc.(see Dunning, 1993; Shatz and Venables,
2000). In this sense, for example, Mexico (and particularly the territories next to
the US border) constitutes an important gateway for European and Asian
multinational enterprise willing to penetrate the US market (without paying the
high costs of an US location; de la Martínez and Ramírez, 2002). In a different
sense, Japanese enterprises historically developed some export functions in
semi-peripheral Asian newly industrialized countries, in order to use these
regions as cheap gateways for the exportation of goods in the Pacific area (Le
Heron and Park, 1995).

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Links with other concepts

The presence of gateway territories is strictly connected to the construction of a

more polycentric space: not every territory has the possibility to interact with
every geographical level, and the presence of gateways allows an ampler
participation of the regions in the global economic dynamics. Obviously, the
presence of gateways does not imply, per se, the presence of a more balanced
territorial structure, since every gateway is basically selective in its connection,
reflecting different spatial structures of power, connecting some territories and
not others. For example, the situation of a country strongly polarized by the
national capital (acting as a gateway) is quite different from a more balanced
territorial system.
At urban level, gateway-cities enjoy the most favourable situations for the
formation of poles of development. It is assumed that as regards the expansion
of such poles, the diversification and the increasing complexity of their functions
have everything to gain from the reinforcement of this inter- and intra-
continental polarisation.

Territorial impact

Harbour-cities, so as some border cities, have often been great gateways of

national and continental territories. Following the development of air transport
and the fast and massive flow of non-material commodities on the new networks,
the models of gateway-cities have diversified and now new continentally based
locations can fulfil this traditional role. These indisputable advantages for the
development of a greater territorial polycentricity are not definitely secured. With
the improvement of the speed of circulation, the extension of the distances of
commerce, the gradual elimination of national borders, these gateway functions
have become extremely competitive. The towns concerned – or liable to become
concerned – must attempt to diversify these functions and gain other activities
that, in a very unstable context, can position them in a favourably competitive
situation. These particularly demanding conditions appear to be more in favour of
the development of large metropolises, which themselves enjoy a relatively more
advantageous position.

Development strategies

The attention given by the SDEC to the European “gateway-cities” is related to

their potential development. In a polycentric territorial system, the Hubs, multi-
modal platforms are among many of the assets inevitably associated with the
development of real gateway-cities. However, they (the hubs and multi-modal
platforms) do not guarantee the development of gateway-cities. This
development requests that the advantages offered by the new gateway-cities be

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enhanced further than those strictly resulting from well-organised transport
infrastructures, for example by furnishing competitive functions, high-skilled and
knowledge intensive services; in this sense, Malecki (2002) ironically assessed
that “both clicks and bricks are required”, emphasizing the importance of
traditional material infrastructures and “new” economic functions.

References:
• CAMAGNI R., 2002, “On the concept of territorial competitiveness: sound
or misleading?” Urban Studies, v. 39, n. 13, pp. 2395-2411.
• CONTI S., 1997, Global-local perspectives: a review of concepts and
theoretical proposals, in M. Taylor e S. Conti (eds.), Interdependent and
Uneven Development. Global-local perspectives, Ashgate, Aldershot, pp.
15-45.
• MARTINEZ (de la) M.E. & RAMIREZ C.Q., (eds.), 2002, Globalización,
trabajo y maquilas: las nuevas y viejas fronteras en México, Fundación
Friedrich Ebert, Centro de Investigaciones y Estudios Superiores en
Antropología Social, México.
• DUNNING J.H., 1993, Multinational Enterprises and the Global Economy,
Addison-Wesley, Reading (Ma).
• LE HERON R., & PARK S.O., (eds.), 1995, The Asian Pacific Rim and
Globalization, Ashgate, Aldershot.
• MALECKI E.J., 2002, “Hard and soft networks for urban competitiveness”,
Urban Studies, v. 39, n. 5-6, pp. 929-945.
• SHATZ H.J., and VENABLES A.J., 2000, The geography of international
investments, in G. L. Clark, M. Feldman and M. S. Gertler (eds.), The
Oxford Handbook of Economic Geography, Oxford University Press,
Oxford, pp. 125-145.
• Società Geografica Italiana, 2005, Scenari italiani 2005. L'Italia nel
Mediterraneo. Gli spazi della collaborazione e dello sviluppo, Rapporto
annuale della Società Geografica Italiana, Roma.
• WALLERSTEIN I., 1974, The Modern World-System, The Academic Press,
New York.

6.6 Area of influence

The expression “area of influence” supposes a centre which polarises a portion of

space. This concept can be implemented a different levels. It was first defined in
urban geography and referred thus to cities whose areas of influence are more or
less wide according to their level in the urban hierarchy (W. Christaller; G.
Chabot, 1952). To make an evaluation of their influence, geographers use
various criteria such as the commercial attraction, the number and the frequency
of flows of commuters working in the centre, flows of persons seeking services

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not available in their towns of residence and provided only by the centre. The
areas of influence vanish progressively with the distance from the centre. The
concept of area of influence has thus much to do with the couple centre /
periphery, the latter being to a certain extent subjected to the former.

The expression “area of influence” has also a (geo)political meaning. It refers to

the capacity of a country to exert its authority by the mean of a more or less
strong pressure on other countries. These “influenced countries”, whether they
are contiguous or not, form the area of influence. In that sense, it was
commonplace to talk about the area of influence of the United States and of
USSR during the cold war. The influence of a country is based on asymmetric
relations and can be exerted through various means: the force of the arms, the
economic power (for instance the production of oil, gas and rare natural
products), the official development aid, the food aid and agricultural exports…
The influence can also be based on a soft power which designates the capacity of
a country, or a group of countries, to convince other countries without the usage
of any direct explicit constraint.

But the word influence must be used with precautions. On one hand, its meaning
in the organization of geographical space is quite vague. The limits of an area of
influence are generally fuzzy. They may be overlapped by other areas of
influence. And areas of influence often happen to be constituted by not
contiguous countries. On the other hand, the word influence is relevant to the
action of a person on another person. Is it then possible to extend its meaning to
cities, to states or groups of states?

When one tries to apply this concept to EU, it becomes even more confusing and
tricky. The area of influence of EU would be constituted either by a set of
countries located in its neighbourhood or by all the countries functionally linked
to it through trade or investment flows and official aid. This first definition is very
problematic because the word “neighbourhood” can be defined in several ways:
geographical proximity, functional integration, connectivity?

The area of influence of EU would be composed by countries economically

dependent to it. It would be thus more efficient to use the expression “attraction
area” than “area of influence”. Which criteria can be used to estimate the level of
economic influence or the economic power exerted by EU?

What about the political influence of EU? Some countries belonging to EU have a
real political influence but EU as a whole do not have any, excepted on the
official or unofficial candidate countries such as Rumania, Bulgaria, Turkey,
Croatia, FYROM, eventually Ukraine… in so far as these countries are or will be
soon obliged to implement various reform to enter EU. As a consequence, the

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economic influence of EU spreads over a much wider part of space than its
political one. According to the domain concerned (migrations, trade,
investments, remittances…), the influence area of EU is more or less wide and its
shape is different. Consequently, its limits can not be clearly determined.

The cultural influence of EU at last is even more uneasy to define and to

determine in space. Every one knows the cultural influence of the United States.
But even in this case, one can wonder if there is a area of US cultural influence.
As far as Europe and EU are concerned, they are culturally so fragmented that it
would be more relevant to seek the cultural influence of its members (Great
Britain, France, Spain, Germany…). In the case of France, the limits of the
“francophonie”, that is to say the countries where French has the status of official
language are a kind of cultural influence. In the case of Great Britain, is it still
possible to take the English language as a mean of cultural influence? This
language is now associated to the cultural leadership of the USA.

References:
• CHABOT G., 1948, Les villes, Paris, Armand Colin.
• CHABOT G., 1961, Carte des zones d’influence des grandes villes
françaises, CNRS, Mémoires et documents du CRDCG.
• COHEN S.B., 1963, Geography and Politics in a World Divided, New York,
Random House.
• CHRISTALLER W., 1966, Central places in Southern Germany, Englewood
Cliffs, Prentice Hall.
• LACOSTE Y., 1983, Dictionnaire de géopolitique, Paris, Flammarion.
• LOSCH A., 1953, The Economics of Location, New Have, Yale University
Press.

6.7 Barrier Effect

The border effect is a methodology, initiated by McCallum (1995), in order to

estimate the negative impact of crossing a border on trade flows. It allows to
measure the degree of economic integration among several countries or the
degree of fragmentation of great markets such as NAFTA or EU. To measure the
border effect between two territories, it is necessary to use a gravity model. The
gravity model predicts that the exportations from a country (or a region) i to two
other countries j and k, characterized by the same population and located at the
same distance from the country i, should be equivalent. When the exportations
are lower than the predictions of the gravity model, there is a border effect.

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The conclusions of all the studies dedicated to this effect are the same.
Notwithstanding the formation of multinational regions in the context of the
globalization, the political borders still have an impact on the international flows.
In spite of all the agreements signed and implemented by EU and the neighbour
countries, the border effect can be a way to measure the level of integration or
fragmentation inside the great Euro-Mediterranean region.
The border effect may not reach the same intensity at every level. An
international border can hamper the increase of goods and commuters flows for
instance at the local level, and the local cross border cooperation maybe
unsuccessful, while trade and migration flows can increase rapidly at the national
or macro regional level (country to country level).

This concept, which can be used in various domains such as migratory flows,
trade flows, investments flows, is weak and should be used only in a heuristic
way. It is not able to make any distinction between two things:
What is relevant to the level of interaction between two territories separated by a
border (international border, external border of a custom union, free trade
agreement zone or common market)…
What is relevant to the preference of social and economic agents for exchanges
with other agents in the same territory (Community preference in the EU).

The concept of barrier effect can be used in other contexts. It is relevant as far
as cross border and transnational cooperations are concerned. In many border
regions, the implementation of genuine joint project of local development is
hampered by administrative, economic or cultural differences. In that case, the
barrier or border effect can not be estimated by statistics methods any more. It
is only a fact that can be overtaken by administrative of economic reforms.

References:

• Mc Callum, J. (1995), “National Borders Matter: Canada-US Regional Trade

Patterns”, American Economic Review, vol 85, pp. 615-623.
• HELLIWELL J.H (1998) How Much Do National Borders Matter ?, Brookings
Institution, Washington D.C.
• Freudenberg, M., Gaulier, G., Ünal-Kesenci, D., 1998a. La régionalisation
du commerce international : une évaluation par les intensités relatives
bilatérales, CEPII, Document de travail 98-05.
• Freudenberg, M., Gaulier, G., Ünal-Kesenci, D., 1998b. La régionalisation
du commerce international, Économie internationale 74, 15-42.

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6.8 Neighbourhood

The concept of neighbourhood is quite vague. In a current and empirical

meaning, the word designates a localised group of persons living near one’s own
place of residence. For example, the persons that are living in the same building.
But even at this very simple level, one has to face up with confusion. Where does
the neighbourhood start? Where does it end? Is it limited to the persons living
only on the same floor of one’s building? Or does it encompass the totality of the
residents of the building what ever its size is? One can also wonder if the people
living in the building located on the opposite side of the street are also
neighbours. The confusion can also come from the context in which the word is
used: urban or rural context for example. In a rural area featured by low
densities of population and scattered human settlements, the distances between
neighbours may cover several kilometres. This idea is well illustrated by an aerial
photography of the agricultural Middle West in the United States or in Canada,
where each farm is isolated.

In spatial analysis, the word neighbourhood is used as a real concept firmly

defined. It designates places which are next to each other and eventually form a
contiguous ensemble. One can consider that two places are neighbours when
they are adjoining. They can be considered also as neighbours when they are
close to each other, but not necessarily adjoining, if interactions exist between
them. In that sense, the neighbourhood of a place (a country, a town, an
ensemble such as EU) involve more or less wide portion of space which interacts
with that place. The neighbourhood ends when one reaches a certain distance (a
threshold or limit). Between the place and the limits of its neighbourhood, the
interactions between them progressively decrease and then vanish. This
decrease of interaction with the distance is a gradient. In another way, the limit
of the neighbourhood can correspond with a discontinuity which is a rapid
variation of one or several statistic indicators.

European Neighbourhood Policy, functional neighbourhoods, « Euromed »: definitions

Since the declaration of the Commission in March 2003, a new term has
appeared in the European spatial analysis: the term of « Neighbourhood ». The
European Neighbourhood Policy was launched in 2004. from 2007 onward, the
European Neighbourhood Partnership Instrument will replace the former Meda
and Tacis funds, for the following « ENP » countries:
- the previous « Euromed » partners of the Barcelona process launched in
1995 minus Cyprus and Malta of course and minus Turkey (since it has
become an formal applicant for UE), that’s is: Morocco, Algeria, Tunisia,
Egypt, Palestinian Authority, Jordan, Syria, Lebanon, plus Libya now on;

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 - the western NIS: Armenia, Georgia, Azerbaijan, Moldova, Ukraine,
Belarus.
Russia will benefit from a special policy, with the same main objectives than that
of the ENP (the four spaces of free trade, services, capital and persons: «
everything but institutions ») but in the framework of a specific partnership.

This institutional definition of the « Neighbourhood » has two limits. The first one
is geographic. The large region that encompasses Europe entails other countries
than that of the official list (Espon + European Balkans + ENP countries). For
instance, Western Kazakhstan is clearly a part of this region due to the growing
importance of the Caspian’s oil for European procurements; the whole Middle
East including Irak, Saudi Arabia and partly the Persian Gulf too; for Europe’s
sake, all these countries are characterized by a risk of political and social
instability, important flows of migrants transiting or departing from a country or
a group of countries, presence of highly strategic natural resources, etc. It is of
utmost importance to have a broader view of the European region, because this
large regional issue is becoming a relevant scale of the global competition that
Europe tackles. See the role of the East Asian integration in the economic
success of Japan, Tigers and China; see the importance of the integration of
Mexico in the North American economy and the growing integration of other
Latin American economies. Thus, it is necessary to distinguish two different
categories:
- The official list of countries that are concerned by the ENP (« ENP
countries » in the report when it comes to an institutional definition) form
what can be called the “political neighbourhood”. Of course this list is
firmly defined;
- The countries that belong to the large European region form the
« functional neighbourhoods » in the report when it comes to a functional
definition). This functional definition cannot be delimitated precisely and
for eternity, since it varies according to variables and periods. For instance
as far as migration flows are concerned, and given historical and linguistic
links, a part of Western Africa happens to be a part of this region.

The second limit of the word « Neighbourhood » is political, because it stresses

on the asymmetry of the relationship between Europe and surrounding countries.
This was already a problem for the previous term « Euromed », because it
implicitly meant the association between Europe and… a sea, the Mediterranean
(whose southern shore would be not even named). The failure of the last
Barcelona summit in November 2005, where only two Arab leaders joined, shows
that an efficient method should be based on symmetry. It is true that, up to now,
the region that encompasses Europe has been very much polarised by the
European countries. But for both historical (colonisation) and actual political

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reasons, it is obvious that its governance on the long run can not be based on
such an asymmetry.

6.9 Territorial cooperation/competition

For the dictionary of concepts, the expression “territorial competition” is not

relevant because it refers explicitly to animal behaviour. Competition can not be
compared to animals or individuals struggling to conquer and dominate a single
territory so that they can ensure their preservation. It is much better to talk
about “competition of territories”. This expression refers to different territories
which are competing in order to attract investments, eventually foreign
investments, and other economic factors (firms, high skilled labour force, etc…).

There is already a huge amount of economic literature dedicated to the topics

such as competitiveness, process of agglomeration of economic activities and so
on. But the question of the competition has been largely neglected either by
economists, geographers or spatial planners. This conceptual black hole is due to
several causes:
- Policy makers have been really aware only recently of the heterogeneity of
territories.
- In the seventies, policy makers and scientists became aware of the fact that a
territory might be attractive for a firm, not only because of its geographical and
physical features but thanks to the social, economic and legal environment that
is given to economic agents.
- The clear conscience of this economic phenomena was later fostered by the
implementation of the European regional policy, through the process of allocation
of structural funds. This allocation has always been achieved on a regional basis,
in order to reach socio economic convergence between the eligible territorial
units.
- Later, anyone who was involved in the regional policy could notice that the
process of convergence was moving on more rapidly at the national level and
more slowly at the regional level with regional disparities rapidly increasing
inside each country.
- Last, because of the decentralization which is now moving forward in many
European states, local authorities are trying to set up incentives in order to
attract firms and investments. They are trying not only to be more competitive
than before but also more competitive than other regions. To remain attractive,
the territories are condemned to underline their differences. These differences
can be classical comparative advantages, but it is no more enough.

The word “competition” is confusing:

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- can we speak of a competition of territories and compare them to firms which
are competing to dominate a market?
- does it simply deal with territories which compete to attract more investments
and value producers than others, by offering what the others do not offer?
- the term supposes that these territories are no more some passive pieces of
the Earth surface which offers comparative advantages such as natural
resources, good geographical locations or cheap labour force and so on. The
territories have become real actors having into their hands the factors of their
own development. They must send to firms and investors explicit signs that they
are ready go along with them in a mutually advantaging association for long
periods. They must show that they are able to offer them a high quality
environment based on elements which are not delivered anywhere else.

The word “territory” is also confusing:

- does it refer to the states? We know that in the context of commercial and
financial globalization, the states are engaged in a competition for the attraction
of investments made by firms. This competition is now more visible through the
process of relocation of industrial activities and services.
- does it refer to the institutional regions? Because of the decentralisation, which
has gone very far in many countries, regions are progressively becoming
economic agents.
- does it refer to smaller territorial units and local productive systems, such as
industrial districts which are based on networks of small and medium size firms
and networks of social relations, without any institutional basis?

In order to overrun these conceptual difficulties, we can propose a large

definition of the word territories which does not refer to only one type of
territorial unit:
- A territory is a piece of space organized and handled by political, economical
and social actors who are able to set out non explicit or explicit rules, legally
based or not, in order to support their relations. That means that a territory does
not have only a geographical base. It can be defined as a mixture of certain
kinds of relations between actors.
- Each territory is based on widely shared rules and on its own rules. These rules
may be totally different in different territories.
- These rules are a subject of competition between territories in order to attract
economic actors, in order to reach a status as high as possible in the value
chains and to guarantee to their inhabitants a high level of well being.

Many authors have recently reminded that we do not have a clear representation
of all the pull factors taken into account by firms and investors when they make
decision for the location of their activities (Veltz). There is no absolute factor,
which would be efficient every where and every time. It depends a lot on the

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type of activity and on the size of the firm concerned. The word « competition »
must not let us think that every thing is politically planned by these territories.
As we said above, some of these territories are not institutionally based. And
even in the case of real political regions, many pull factors are not explicitly
related to institutions. The problem is that non institutional factors are quite
uneasy to identify and eventually to implement. Moreover, one factor may be
efficient only for a certain period of time but not for ever. And the economy is
less and less based on the territorial frames such as regions and States.
Economical relations are more and more unstable and flexible, whereas regions
and states are necessarily engaged in long run processes. To be efficient, every
political or institutional response proposed by territories must be based on
“Taylor-made adjustments”. It is a necessary condition to make local conditions
and global economy meet.

What kinds of advantages are researched by firms and all economic actors?
- A large consumption market as close as possible which is a kind of insurance
against the variations of the consumption levels and economic contingence.
- Low costs of production.
- High quality of infrastructures and presence of many externalities.
- High quality of environment (that is to say high standards and quality of life for
inhabitants) and possibility of a high level of well being for the labour force (with
high employment rates).
- High quality of local social relations, well adapted to the flexibility of modern
economy.
- Institutional partners which are able to offer them a long term beneficial
association. The firms need to receive insurances that the territories (that is to
say local institutions) where they decide to settle down show a firm commitment
in a process of exchanges in various domains, for long periods of time: training
of labour force, exchange of useful information.
The firms need to feel that that can rely on a territory which can eventually
become an insurance against possible commercial and economic risks.

References:
• ADAMS J., ROBINSON P., (ed), 2002, Devolution in Practice. Public Policy
Differences within the UK, Ippr.
• BENKO G., LIPIETZ A., 2000, La richesse des régions, Paris, PUF.
• CAMAGNI R., 2002, « On the concept of territorial competitiveness: sound
or misleading?”, Urban Studies, vol 39, n°13, pp 2395-2411.
• Commissariat général du Plan, 1996, Systèmes productifs, emplois,
territoires.
• KRUGMAN P.R., 1994, « Competitiveness, a dangerous obsession »,
Foreign Affairs, vol 74, n°2.

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 • PORTER M.E., 1990, The Competitive Advantage of Nations, Free Press,
New York.
• SCOTT A.J., 2001, Les régions et l’économie mondiale, Paris, L’Harmattan.

6.10 Territorial Cohesion

Territorial cohesion is more a political agenda than a scientific concept. Recently,

it has been used frequently in the European spatial policies debate and the
definition given here will be mainly based on the European institutions approach.

Classically the term “cohesion” was used concerning the “economic and social
cohesion” that is to say the aim of a balanced development throughout the EU. It
refers both to the idea of balanced growth and the idea of supplying a minimum
of essential services to every inhabitant of the European territory.

According to the history of the concept, (ESPON 3.2 Report), the idea appears for
the first time in the Single European Act (1986) with the idea of reducing
disparities of development of the various regions. However, at this moment the
disparities were measured only in terms of economic level (GDP/inh). Later, the
concept “territorial cohesion” appears in the Amsterdam Treaty (1997) related to
the services of general economic interest. Recently, the territorial cohesion is
integrated more clearly to the political objectives of the European Union, notably
in the Treaty establishing a Constitution for Europe (2004): “The Union shall
promote economic, social and territorial cohesion, and solidarity among Member
States” and its meaning is more detailed in the Third Report on Cohesion.
As the Third Cohesion Report expresses: “The concept of territorial cohesion
extends beyond the notion of economic and social cohesion by both adding to
this and reinforcing it”. In policy terms, the additional objectives are to make
more coherent sectional policies (which have spatial impacts) and regional
policies. The concern is also to improve territorial integration and encourage
cooperation between regions.

According to the European orientations, the territorial cohesion is multi-

dimensional taking into account the reduction of economic disparities, the
cohesion between regions and the social and environmental perspectives. A
central idea is that citizens must have access to any essential services and basic
facilities, wherever they live in the European Union. The article 16 of the Treaty
“recognises that citizens should have access to essential services, basic
infrastructure and knowledge by highlighting the significance of services of
general economic interest for promoting social and territorial cohesion.”

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Another pattern of the concept is the multi-scale approach: problems are seen
firstly at the European level with the disparities between European regions, then
at each national scale, with the differences between metropolitan areas and the
less favoured regions, until the local scale with the question of intra-urban
discontinuities and the ghetto issues.

Adding the “territorial cohesion” objective is crucial to take into account all the
problems that might concern Europe in terms of spatial planning. Promoting this
objective implies to measure it. The classical economic aspect of the cohesion is
easy to measure with indexes of distribution (Gini index). But the data
concerning environmental and social perspectives do not exist for the moment
(ESPON 3.2).

6.11 International Division of Labour

Definition
The international division of labour (IDL) means that countries specialise in
certain productions and exchanges. This concept can be seen as the
implementation of the idea of division of labour but at the scale of the
international economic relations. The idea of social division of labour, notably
developed by Adam Smith in economics, is based on the interest of individuals of
specialising and exchange the output of their work, in particular on the level of
the productivity.
The concept of spatial division of work also exists. It is a more general concept
and refers to the fact that the generalisation of trade has developed a spatial
division of labour, in the form of relative or absolute specialisations of places and
regions. In this sense, international division of labour is one form of the spatial
division of labour which includes it.

Theoretic base and stakes

The IDL has direct links with the Ricardo theory of comparative advantage which
explains that a country must specialise in the production (and exportation) of
goods for which its comparative advantage (the production cost relative to others
products) is the best relatively to the other countries. This theory pushes
countries to specialise in certain productions, stimulate international trade and
IDL, because, according to this theory, it is necessary beneficial for any countries
to specialise and participating to the international trade.
However some economists explain that the way the IDL is distributed has very
significant implications. In theory, this distribution is based on the comparative
advantages of the various countries: the country equipped well in factor work will
produce goods containing much of this factor, while the country having capital
and engineers will produce goods of high technology. However these various

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choices will not lead in the long term to the same advantages, in particular
because the world demand does not grow in the same way for all the products.
The developing countries which export especially one or two basic commodities
will clearly be the losers of the IDL which marginalise them rather than integrate
them. The Marxist economists claim that, by the existing IDL, the capitalist
countries do exploit the developing countries in an “unequal exchange”. The
theory of comparative advantages has been questioned by P. Krugman.
When discussing the international division of labour there are two key concepts:
the principle of comparative advantage (absolute or relative) and
specialisation. To understand the principle of comparative advantage it can be
useful to look at the simpler principle of absolute advantage.
A country (or region or individual) has an absolute advantage in the production
of goods or services if it can produce those goods or services with fewer
resources than other countries (or regions or individuals). The opportunity cost is
the alternative foregone. If two individuals (or regions or countries) have
different opportunity costs of producing goods and services, the individual (or
region or country) with the lower opportunity cost has the comparative
advantage in that good or service. The country (or region or individual) will
specialise in the production of the good or service in which they have the
comparative advantage. A specialisation means that productivity will increase,
but a specialisation requires exchange i.e. trade. If this system is going to be
profitable for all countries (or regions or individuals) specialisation and trade are
needed.

The historic mutation of the IDL

The IDL is not fixed at all and has changed considerably since the 1970’s.
A classical type of IDL, arisen from the colonial period, has prevailed for a long
time: the one in which poor countries export their raw materials in exchange of
manufactured goods coming from Northern countries. This distribution of work
between countries can be regarded as being an IDL of complementarity since the
exchanged goods are not of the same nature. This is what we call an “inter-
branch” trade.
Thereafter, there was a change in this traditional IDL. Firstly, an IDL of
competition appeared between industrialized countries, with a great growth of
the “intra-branch” trade; in addition, some developing countries, mainly from the
Southeast Asia, having become new industrialized countries entered the market
of the manufactured goods, first of all basic goods, then technological goods
also.
For measuring the international division of labour, one has to study the trade
structure of countries or zones. An analysis of the trade between European
countries shows for example a very intra-branch pattern, which comes notably
from the differences of taste of the consumers.

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However there is another type of intra-branch trade which exist between
countries having great different levels of development and which is organised by
transnational firms in their production process. One product is made by
processes taking place in different countries. A great part of the actual trade of
manufactured goods is now organised by transnational firms which split their
production spatially according to each implantation’s advantages. That explains
why the trade of intermediary goods reaches roughly 40% of the value of total
international trade. There is obviously a direct link to the concept of value chain
since more and more, the different stage of the production processes are split
between different countries. Consequently that kind of strategy implemented by
transnational firms it’s a powerful factor of regional integration.

Refrences:
• RICARDO D., 1993, Des principes de l’économie politique et de l’impôt,
Paris, Flammarion.
• BAUD P., BOURGEAT S., & BRAS C., 2003, Dictionnaire de géographie,
Paris, Hatier.
• SMALL J., & WITHERICK M., 1996, A modern dictionary of geography,
third edition, Arnold, London.
• SMITH A., 1991, Recherches sur la nature et les causes de la richesse des
nations, volumes 1 & 2, Paris, Flammarion.
• KRUGMAN P., & HELPMAN E., 1987, Market Structure and Foreign Trade:
Increasing Returns, Imperfect Competition, and the International
Economy, Boston, MIT Press.
• DUNNING J.H., (ed.), 2000, Regions, Globalization, and the Knowledge-
Based Economy, Oxford, Oxford University Press.
• SHATZ H.J., & VENABLES A.J., 2000, “The geography of international
investment”, in G. CLARK L., FELDMAN M., & GERTLER M.S., (eds.), 2000,
The Oxford Handbook of Economic Geography. Oxford University Press,
Oxford, pp. 125-145.
• WONNACOTT T.H. & WONNACOTT R.J., 1986, Free Trade between the
United States and Canada, Review of Economics and Statistics, vol. 68,
November, pp 618-627

6.12 Territorial / Spatial differentiation

The concept of spatial differentiation is the central object of geography, which

aims to understand any form of spatial inequality.

Space has a complex and dialectical relation with the social reality as a whole. On
the one hand, space is always building on the existing space, and emerging
social systems remodel permanently the spatial “material” on which they act. On

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the other hand, the space itself plays a major role in the social novelty and in the
emergence of new social systems, since they always appear in a more or less
definite territory, diffuse and rebuilds as they advance.

The emergence of the nation-state gives a perfect illustration of this dialectical

relation between the social and spatial reality. The modern state has shaped in a
given space, with specific historical paths but which all end up at the
correspondence between nation and territory with a political entity: this political
construction is thus eminently spatial. In return, the political delimitation of the
territory, or territorial delimitation of the politics, will produce spectacular
homogenizing effects on the space: cultural homogenization by the mean of
education or mass media, socio-economic homogenization by the mean of social
transfers, political and ideological standardization. These effects are so powerful
that actual boundaries often correspond to clear spatial splits about politics,
languages or landscape, including inside the European space.

This dialectical relation has also to be found in the field of social and spatial
inequalities. As it is argued in the “Words of geography”: “the fact of being here
or elsewhere is a creator of social difference, taking into account the
geographical oppositions of systems, of accessibility; membership of class
involves differentiations in the settlement, the choice and the frequentation of
the places, and in the end true segregations”

Reference:
• BRUNET R., FERRAS R. & THERY H. (1992), Les mots de la géographie :
dictionnaire critique, Montpellier, Reclus.

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 PART B

THEMATIC ANALYSIS

117
7 DEMOGRAPHIC THEMATIC ANALYSIS

7.1 Demographic flows towards Europe

Mats Johansson
Daniel Rauhut
KTH/ITPS

7.1.1 A background sketch

During the past decades Europe (WUTS1111- WUTS1122) has experienced an

aggregate immigration surplus form other parts of the world. Europe is –
together with North America, Oceania and the Arab Oil Countries – an
immigration region. This fact hides, however, that not all European countries are
immigration countries - and even some redistribution of people have been a
central ingredient in the population development within Europe.

The big problem in analyses of migratory movements between nations and

regions is the shortage of data with regard to origin and destination. One
consequence is that gross flows are difficult to estimate and this has impact on
analyses of convergence and divergence, of integration and disintegration, of
symmetrical and asymmetrical migration patterns. This also means that much of
the analysis must be hypothetical and theoretical based on available data. In a
project like “Europe in the World” this means that existing data over net-
migration – both total number of people and net-migration rates - will be the
point of departure for description and analyses. More detailed analysis is possible
only for selected states and is presented in case studies.

The migration pattern within Europe and even the migratory flows towards
Europe can be divided in four phases after WWII. The fist phase was
characterised by “forced migration” as a consequence of the war. The second
was more of a redistribution phase of people as a consequence of differing labour
market conditions and especially then from the Southern to the Northwestern
countries in Europe. The slow-down of the European economy resulted also in a
slow-down in the demand for labour import and the labour market related
migratory movements began to decrease. Instead refugee migration got an
increased importance and in the middle of the 1980s the labour market related
immigration almost disappeared even if family reunion migration continue to
grow. The fourth period was characterised by the migratory effects of the
collapse of the Soviet Bloc and the upheaval of the former Yugoslavia. Both cases
resulted in huge migratory movements with impact on the demographic

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development and the demographic structure in the origin as well as the
destination countries.

The figure below gets a hint about the migratory movements during the 1990s.
It confirms the observation mentioned above that North America, Europe
(excluding the eastern part and Balkan), Japan, Australia and New Zeeland were
the immigration areas at world level and that South America (including Mexico),
Asia (excluding Japan), Africa were the large emigration areas.

7.1.2 Demographic flows towards Europe – a selective process

Figure 7-1 : Permanent migrant flows

From the map above it seems obvious that the redistribution of people is a
selective process. North America is a net-immigration region from all other parts
of the world including Europe. The latter is also an immigration country with
regard to all other parts of the world with the exception of North America,
Australia and Japan during the 1990s. The most accentuated migration pattern is
instead the huge flows – and then redistribution of people – within Europe that
seems to have huge impact on the population development and the polarisation
process. From other studies it seems obvious that West Central Europe was the
winner and the peripheral areas were losers.10

10
See e.g. ESPON 1.1.4, “Spatial effects of demographic trends and migration”

119
These migratory flows from the peripheral areas to the central ones were more
characterised by asymmetrical flows than of symmetrical. This is valid both
concerning the amount of people and the structure of the migrants. There are
signs that many of the immigrants to Europe from other parts of the world
contributed to the polarisation process and then also eroded many regions of
highly qualified people.

It must, however, be kept in mind that the 1990s was en exceptional decade
concerning upheavals, wars and other catastrophic situations that had impact on
the migratory movements. The collapse of the Soviet Bloc, the war and turmoil
on Balkan with the dissolution of Yugoslavia were only some events that shaken
the and resulted in both human catastrophes and increased refugee migration.
That this had impact on the population development and structure in Europe is of
course not surprising. Housing segregation and problems to get a foothold on the
labour market were only some of the problems that were accentuated during the
1990s in Europe with the result that new “populist” parties were taken place on
the political agenda. The immigration policy became “hot potatoes” in many
European countries.

It was, however, not only the turmoil in the former Yugoslavia and the
breakdown of the Soviet Bloc that contributed to selective migratory movements.
Colonial ties still had impact of the origin and destination of the migrants. This
was not a new phenomenon but together with the new migration pattern it
accentuated probably the immigration to Europe. These migrants are, however,
not in the same situation as refuges as they often have relatives and friends in
their new home countries.

7.1.3 Migration – the prime driver behind population change

As a consequence of the slow down in fertility rates – for most of the European
countries below the reproduction rate today – migratory movements and then
inflows of people have been even more important for the population development
than before. Many European countries should have had a negative population
development without immigration surplus. Even in this case the pattern is quite
different between differing European countries – some countries with a low
fertility rates may still have a natural population development as a consequence
of the age structure. Many countries with a sharp drop in the total fertility rates
may still have a young population as a consequence of earlier high fertility rates
and low life expectancies. It must, thus, be kept in mind that natural population
development is a consequence of a combination of fertility rates and the share of
women in fertile ages.

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Foreign-born people contribute to the population development in two broad ways
– one by immigration and the other by natural population increase. The second
can then be divided in two other parts – higher fertility rates among foreign-born
women and a more positive age structure from a reproduction point of view.
Without migratory flows towards Europe the ‘population crisis’ would be even
worse than it is today.

The continuously rising share of females among the migrants ought also have
positive effects on the population development. There seems, however, to have
been a change in the motives among the female migrants – from being “passive
players” accompanying their husbands they are now more or less migrants on
their own “premises”. Increased family unification has contributed to the rise in
the female share in the developed countries and the social and economic
situation for women with access to a lot of educational and employment
opportunities have also stimulated female migration to especially Europe and
Northern America.11 The higher share among the female labour migrants may
perhaps counteract the effects of family reunification but the rising female share
ought to have positive effects on the natural population change. So, in this case
the increased immigration may possibly result in higher fertility rates and a rising
population.

7.1.4 Differing factor endowments and factor mobility

The point of departure for the following theoretical reasoning is that there exist
two regions at different stages of economic development. Region A - e.g. Europe
and especially then EU15 - is in transition from an industrial to a post-industrial
society while region B - e.g. developing countries - is in transformation from a
society dominated by self-employment and an old industrial structure. There also
exist varying "vintages" of both capital (K) and labour (L). Substitutability is
limited - instead there exists complementarity between the different vintages of
capital and labour. According to this there exist the following relations and
connections:

K1: capital with old technology

K2: capital with new technology.

L1: unskilled labour

L2: highly educated labour.

Between regions at same development stages, there are only small differences in
factor endowments – differences, which in much are effects of differences in

11
Zlotnik, 2005

121
natural resources. Between regions at differing development stages, there are, at
least according to the theory of “revealed comparative advantages”, large
differences in factor endowments. This results in the following inequalities with
regard to factor endowments:

K2A>K2B
L2A>L2B

The different economic structures in the two regions have also led to an income
gap:

WL1A>WL1B
WL2A>WL2B

However, there is not only the wage gap within the same categories. Instead the
following wage relation is valid:
WL1A>WL2B

Capital intensity is also differing:

K2A/L2A>K2B/L2B
K1A/L1A>K1B/L1B.

7.1.5 Implications for Capital Mobility

Different regions have differently composed capital and labour markets, which
implies that the development possibilities are not equal regarding choices of
technology available for adoption. Since there exists a mutual dependence
between the labour force's competence structure and the introduction of new
technology, a lack of competence is a restriction to innovative activities and
technology renewal. This relationship applies especially in old industrial regions
or rural areas characterised by economic backwardness. In these regions, there
is often a surplus of labour, but the "wrong" type of labour from the employer's
point of view. A labour force such as this constitutes an obstacle to economic
change as the technology which is suited to it tends to maintain the structure of
the periphery or the backward regions, which develop an obsolete industrial
structure based on old investment patterns, where the only location factor is
cheap labour.

Even if capital moves to labour, this type of investment pattern is not post-
industrial. Instead, it is a defensive investment pattern, which to a great extent
characterises the early phases of the industrial society in some regions at the
same time as it is a sign of the development of a post-industrial investment

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pattern in other regions - in regions where these types of investments are
beginning to be history and standardised cheap labour is no longer a competitive
advantage. Such technology may be socially desirable, but the risk exists that
regional segmentation and polarisation are reinforced leading to knowledge-
based production in the centre and standardised production in the periphery. This
polarisation will thus be accentuated by a post-industrial investment pattern
where highly-educated labour will increasingly be a location factor for mobile
capital in the knowledge-based sectors.

On the other side, this investment pattern will stimulate the growth of the
purchasing power in these countries with an expansion of the home market of
both consumer and capital goods. Besides exporting agriculture and cheap
industrial goods these countries and regions are turning into a large market
themselves.

According to the economies outside Europe there are signs of foreign penetration
of the economies that are very apparent. The location factor here is cheap labour
in standardised production - knowledge-intensive activities are still located in
areas where highly educated labour and good infrastructure are the dominating
location factors. This development will surely reach the countries in the
neighbourhood of the EU too, where the labour costs are still low. However, the
purchasing power is also lower in these countries, which will be a restriction on
investment in more sophisticated goods production and direct investment
towards more standardised labour-intensive production

To summarise, the composition of the labour force affects the industrial and
post-industrial location patterns in differing parts of the world. Post-industrial
activities like knowledge-based industries are most frequent in regions with a
high share of highly educated labour. Traditional labour-intensive industrial
activities are concentrated in areas with low labour costs and a surplus of low
educated labour. These differences in factor endowments and labour markets
accentuate both regional segmentation and polarisation in the transition from an
industrial to a post-industrial society.

7.1.6 Implications for Labour Mobility

If there are some hindrances with regard to capital mobility, these are even more
obvious with regard to labour mobility. There is no common labour market at
world level today – not even in Europe and its neighbourhood - and there is still
a long way to go before this point is reached. This implies, thus, that the
following reasoning will be very hypothetical.

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According to traditional push-pull theories, these economic disparities should, in
a free labour market, give rise to high migration from the low-income countries
to high income regions and countries. This implies that labour surplus and low
wages in the developing countries will be one of the determinant factors behind
the migration decisions. Even the high wages in the developed part of the world
will, however, give some hopes about the future, which will further stimulate the
labour mobility process. (For simplicity’s sake, in the following, capital mobility
has been excluded from the discussion on labour mobility across the borders.)

However, according to the segmented labour market theories, this should result
in those workers who are released in the continually structural transition of the
economies not being in demand in either the private or the public sectors in the
EU. The more far-reaching transformation of the European economy in a post-
industrial direction has reduced the demand for traditional blue-collar workers.
Instead, there has been rapid employment growth in the service sectors - both
private and public. Especially the upper segments in the private service sector
have, in recent years, been associated with the transformation of the economy in
a knowledge-intensive direction. One result of this transformation process is the
looser connection between the business cycles and labour force migration from
the second half of the 1970s and 1980s. During these years, migration has
rather been a function of political events in other parts of the and, since the
beginning of the 1970s, the majority of the immigrants have been refugees
working in the lower segments of the private service sector where the
educational level is low.

The structural transformation of the European economy, with a great increase in

employment in the service sector, has also changed the picture with regard to
employment opportunities for the immigrants. Instead of blue-collar work in the
goods-producing sector, immigrants are nowadays predominantly employed in
the lower segments of the service sector. As a consequence of the structural
transformation of the European economy, the push factors are now stronger than
the pull factors concerning the immigrants. This has also resulted in a changed
employment structure, with a large share of the immigrants working in jobs
refused by the domestic labour force – the 3D jobs, “dirty, dangerous and
degrading”.

The economic transformations in the developing countries will not only has
implications on the international migration - even the internal migration will be
affected. When the unemployment increase and the regional unemployment
levels and living standard diverge, the internal migration pattern will be changed
in a way more alike the migration pattern in developed countries. This will result
in an out-migration from rural areas to larger towns and metro areas, where the
labour market is more diversified. From a human capital approach this is rational

124
even if there are no jobs directly in the destination areas. The more diversified
labour market in these areas will give the migrants a better chance to find a job
compared to staying home. Many of the potential jobs will, however, be found in
the lower segments of the private service sector and many of the migrants will
be self-employed in these kind of jobs.

When discussing migration, mobility and labour shortage it is of utmost

important to distinguish between short and long term. In a short-term
perspective increased immigration can reduce negative effects of bottlenecks in
production while in a long-term perspective it can hamper structural
transformation and competitiveness. Labour shortage stimulates substitution
between labour and capital but also between different segments of labour.
History can also witness about that structural transformation of the economies
has been one of the most important factors behind higher productivity and
increased incomes and well-being. If migration shall be a central ingredient to
obtain the “Millennium Development Goals” there is still a long way to go and to
hamper migratory movements is not a way out of the population problems in the
and especially not for Europe.

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 Figure 7-2: A schematic view of migration pattern between regions with differing economic
structure according to a traditional push-pull approach and according to an SLM-approach

Low-wage High-wage
region/country region/country

SL1
SL2 DL
SL2
DL

SL1

SLhigh

DLhigh
SLlow

SLhigh ?

DLhigh
DLlow

SLlow

DLlow

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8 ECONOMIC THEMATIC ANALYSIS

8.1 Structural evolution of population and GDP PPS of World

States (1952-1998)

Claude Grasland
Clarisse Didelon
Nicolas Lambert
UMS RIATE – Géographie-cités

8.1.1 Introduction

The aim of this preliminary study on demographic and economic evolutions at the
world scale is not to provide final results on thematic topics which will be
analysed in depth by specialised research teams (IGEAT for Economy and ITPS
for Demography) during the development of the project ESPON 3.4.1 with much
more detailed indicators and interpretation. It is rather to explore basic
exploratory tools related to cartography and statistical analysis and to propose a
validation of the methodology which will be applied in the future.

To provide such an experiment, we have decided to focus on a long term

database realised by Angus Maddisson on the economic and demographic
situation of World States from 1950 to 2000, available on his personal website
and published in 2003 by OECD. This database has been completed by
estimation for some missing values but initial information established by A.
Maddisson has been fully respected when available.

The most important modification introduced in our analysis was the application of
a five-year smoothing on all figures of population in order to reduce the influence
of exceptional fluctuations and to focus the analysis on main trends of evolution
during the whole period. Due to this five-year smoothing, the time span is
reduced from 1950-2000 to 1952-1998 because 1952 represents in fact the
mean value of 1950-54 and 1998 the mean value of 1996-2000.

Another important modification of the initial information was the transformation

of each absolute count of population or GDP into a frequency of the world sum.
For example the population of France in 1998 (60 Millions of inhabitant) is
divided by the population of the World (6 Billions) in order to obtain a frequency
of world population (1%) which can be easily compared to the frequency of GDP
of France at the same time or the frequency of population of France from another
year.

127
It is finally important to keep in mind that the table of GDP proposed by
Maddisson is expressed in PPPs which has an important influence on all results
which would have been strongly different if we had chosen to measure the
economic size of world States in current US $. Concerning population, the figures
proposed by Maddisson are very similar to those proposed by other international
sources (UN, CIA) and using another type of source would not modify the results
except in some very specific cases.

Last, we decide not to take into account in our analysis States of whose
population, GDP or surface represent less than 1 millionth of the world. Those
very small states could have introduced bias in our results as they often have
very specific evolution of GDP or population.

8.1.2 Demographic evolution of world states 1952-1998

8.1.2.1 The evolution of the demographic sizes of European

States at the world level

The distribution of demographic size of States during the whole period is

characterised by a strong concentration in a very limited number of States. The
European territory is characterised by the lack of very large States and the great
heterogeneity of demographic size, from very small to medium or large (map 8-1)

Very large States (G>1: more than 10% of world population)

From 1950 to 2000, China and India are the only States which can be considered
as “very large” (G<1: more than 10% of world share) and they always represent
together at least the third of the World population.
Large States (1<G<2: between 1% and 10% of world population)
In the 1950’s, the ESPON area accounted for 5 States which could be considered
as “large” from a demographic point of view at the world scale: Germany12,
U.K., Italy, France and Spain. But actually, only France and Germany remain in
this category and still represent more than 1% of the world population, and
probably not for a long time in the case of France. In the particular case of
Eastern Europe, the former USSR which could be considered as a “large State” in
the 1950’s has been replaced by new States among which two can be considered
as “large” actually (Russia and Ukraine). In the rest of the World – and
considering actual political boundaries - some States remain demographically
“large” on the whole period (USA, Mexico, Brazil, Japan, Indonesia, Nigeria,
Pakistan, Bangladesh and Vietnam) and some others are moving from “medium”
to large. This last category is particularly interesting because it concerns at least
3 States located in the neighbourhood of Europe: Turkey, Egypt and Iran.
12
Even if we take into account the geopolitical division of this period, western Germany represented
more than 1% of world population in 1952 and could be considered as « large ».

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Medium States (2<G<3: between 0.1% and 1% of world population)
The third level of demographic size defines the medium situation which is
characteristic of the majority of the ESPON States in the 1950’s as in 2000. But
with a double movement of former “large States” becoming “medium” (UK, Italy,
Spain) and former “medium States” becoming “small” at the world level
(Denmark, Norway, Finland, Austria…).

Small States (G>3: less than 0.1% of world population)

As described above, an increasing number of ESPON states are becoming
member of the category of “small” or “very small” States at world level, from a
demographic point of view. The political division of former federations
(Yugoslavia, USSR, Czechoslovakia) has enhanced this trend which was basically
related to slower demographic growth in Europe than in the rest of the World.

Map 8-1 : Share of the world population in 1952

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 Map 8-2 : Share of the world population in 1998

8.1.2.2 The evolution of the European population in absolute

and relative terms

Evolution of world population in absolute terms

The annual average growth rate of population of ESPON States over the period
1950-2000 is clearly among the lowest at the world scale but we do not observe
any case of negative evolution of population. The lowest rates of population
increase at the world scale (less than 0.4% /year) are observed in central Europe
(Austria, Czech republic, Hungary, Bulgaria, Portugal) but the majority of ESPON
States are rather characterised by a small increase of population growth

130
(between 0.4% and 1.2% / year), which is comparable to the situation observed
in Japan and former republics of Soviet Union (except central Asia). ESPON area
is a part of a continuous area of low population increase (the “yellow banana”?)
which covers all States located between Tokyo and Lisbon. Out of this central
area of demographic weakness, we can identify a group of States with medium
evolution of population at the world level (between 1.2 and 2.1% / year) which
combines non-European industrialised States (USA, Canada, Australia, New
Zealand, Chile, Argentina, Southern Korea, …) and the biggest countries of the
Third World (China, India, Indonesia) which have developed policies of birth
control. The highest levels of population growth concern the rest of the World
and associate both emerging and underdeveloped countries which have
experimented with some difference in timetable the demographic transition
during the period 1950-2000.

Evolution of world population in relative terms

The evolution of the share of world population represented by each State in 1952
and 1998 provide a very different picture of the demographic recombination of
the World during the last 50 years (map 8-3). Indeed, States which have
increase their population in absolute terms but with a rate of increase lower than
the world trend will necessarily experiment a reduction of their share at the
world scale. For example, the share of France in world population has declined
from 1.66% of world population in 1952 to 1.02% in 1998, which means a
reduction of –0.64 pts, in terms of world demographic share (blue circle). In the
same time, Turkey moved from 0.85% to 1.08% of the world population, which
represents an increase of +0.23 pts in terms of world demographic share (red
circle).

Looking at the map 8-4 it is very clear that all States located in the ESPON
territory are characterised by a dramatic reduction of their share of world
population, but we can notice that it is also the case of Japan, Russia and China
which are all characterised by a strong reduction of their share of world
population during the period 1952-1998. The most important gains of world
population share are firstly observed in India (where birth control was not as
much strictly applied as in China) and more generally all States of southern Asia,
Africa and Latin America (except for the southern part).

This translation of the world gravity centre of population from north to south is a
major feature with very important political and economical implications for
Europe, especially if (as we will see in the next section) it is not followed by an
equivalent translation of world economy.

131
Map 8-3 : Annual average growth rate of population 1952-1998

132
 Map 8-4 : Difference between share of world population in 1952 and 1998

8.1.2.3 Typology of demographic evolution of world States

(1952-1998)

The aim of the synthetic typology presented in map 8-5Erreur ! Source du

renvoi introuvable. is to take into account the specificity of the demographic
evolution of each State with a cluster analysis which takes into account all years
of the period and not only the situation at the beginning and the end13.

13
The methodology used for this cluster analysis is euclidean distance weighted by population of states
after transformation values of population in index 100=1952

133
Type A: Regular increase
States from type A are characterised by a regular increase of their demographic
weight in the World during the period 1950-2000. This situation is mainly
determined by the fact that States of this category are at the core of their
demographic transition, at the moment when mortality has strongly declined but
fertility remains temporary at a high level, causing a very strong natural
increase. In certain cases, this natural increase is reinforced by migratory
attractiveness, producing cumulative effects as in the case of States with oil
resources (Persian Gulf, Venezuela, Libya …). In the detail, it is possible to
distinguish subtypes with exceptional increase (A.1), important increase (A.2)
and medium increase with reduction of growth rate in the 1980’s (A.3).

Type B: Global stability

States from type B are characterised by a rate of population increase which is
more or less equal to the world trend of the period 1950-2000, even if their
demographic curve can be slightly different (with periods of lower or higher
increase than the World). This situation is typical of new industrialised countries
(Australia, Canada, Argentina, Southern Korea) which can balance their relative
low level of natural increase by strong level of immigration. It can also be
observed in the biggest countries of Third World which have developed a policy
of birth control (India, China, Indonesia). And finally in some countries where a
high level of natural increase is balanced by strong flows of out-migration toward
other countries and peaks of mortality due to political or economic crisis (Angola,
Ethiopia, Chad, Afghanistan, Argentina). In the detail, it is possible to distinguish
a subtype B.1 more dynamic than subtype B.2.

Type C: Regular decrease

States from type C are characterised by the regular decline of their share in the
world population, mainly due to their situation of post demographic transition
(low fertility and low mortality) with ageing population and low proportion of
young adults. According to this structural demographic situation, States from this
category are not able to reach important rates of population, even if they are
subjects to flows of in-migration. In the case of United States (type C.1), the
demographic decline is relatively limited because the ageing of population is
balanced by important and regular flows of young in-migrants. But in the case of
European countries, Russia and Japan, the mean age of population is higher and
the in-migration flows are able to balance the structural evolution. In this group,
one can distinguish between countries with medium decrease of their share of
world population (C.2) like France, Russia and Japan and countries with more
important decrease. This last subtype (C.3) is characteristic from northern and

134
central part of Europe (Sweden, Finland, Germany, Italy, Hungary, Austria,
Czech Republic, Bulgaria) and also from UK and Portugal.

135
Map 8-5 : Typology of demographic evolutions 1952-1998

136
8.1.3 Economic evolution of world states 1952-1998

8.1.3.1 The evolution of the economic sizes of European States

at world level

The distribution of the economic size of States during the period 1952-1998
appears more stable than the evolution of demographic size, even if some
important changes can be pointed (Map 8-6 & 8-7)

Very large States (G<1: more than 10% of world GDP ppps)
The only State which remains “very large” during the whole period is United
States of America which represents 27% (G=0.6) of world GDP in 1952 and 22%
(G=0.7) in 1998. China which represented only 5% (G=1.3) of world GDP in
1952 has started to increase very quickly its share of world GDP after 1975 and
can be considered actually as very large with 12% of world GDP (G=0.9).

Large States (1<G<2: between 1% and 10% of world GDP ppps)

In the 1950’s, the ESPON area accounted for 7 States which could be considered
as “large” from economic point of view at world scale: Germany14, U.K., Italy,
France, Spain, Netherlands and Poland. Despite a general reduction of their
share of world economy, (except in the case of Spain), most of these States can
always be considered as “large” at the world scale but Poland and Netherlands
(around 1980) have decreased under the level of 1% of world GDP and have
moved to the category of “medium” economic size. In Eastern Europe, the
former Soviet Republics of Russia and Ukraine could be considered as
economically “large” in the 1950’s but it remains true only for Russia. In the rest
of the World, the list of economically “large States” has remained very stable
(Japan, India, Indonesia, Australia, Mexico, Canada, Brazil), the only exceptions
being Argentina (which left the group of “large” States at the beginning of the
1980’s), Turkey and Thailand (which joined the group of “large” States at the
end of the 1980’s).

Medium States (2<G<3: between 0.1% and 1% of world GDP ppps)

The members of the European Union and the candidate or associated countries of
the ESPON program are generally classified in the category of “medium”
economic size at the world scale during the whole period 1952-1998. We do not
observe the move towards the category of “small” States that was noticed for the
demographic criteria.

14
Even if we take into account the geopolitical division of this period, western Germany represented
more than 1% of world population in 1952 and could be considered as « large ».

137
Small States (G>3: less than 0.1% of world GDP ppps)
In 1998, 7 States from the ESPON area belongs to the category of ”small”
economic size (Estonia, Latvia, Lithuania, Cyprus, Malta, Luxembourg, Slovenia)
which is more or less the symmetric of the number of “large” States. The great
diversity of economic and demographic sizes of neighbouring States is a major
characteristic of the European territory which can not be observed at such degree
in other parts of the World.

Map 8-6 : Share of the world GDP (ppp) in 1952

138
Map 8-7 : Share of the world GDP (ppp) in 1998

139
 8.1.3.2 The evolution of the world GDP (ppps) in absolute and
relative terms

Evolution of world GDP (ppps) in absolute terms

According to the figures of Maddisson database the GDP expressed in constant
US $ of 1990 (Geary-Khamis PPPs), has experimented a positive variation in all
selected 168 countries of the World without exceptions during the period 1952-
1998. To avoid any misunderstanding of Map 8-8, it is important to pay attention
to the fact that:
• the evolution of the volume of GDP is not necessarily correlated to the
evolution of the ratio of GDP per capita. If the growth of population is
higher than the growth of GDP, the result is a decrease of economic well
being.
• the evolution of GDP expressed in PPPs reflects the internal situation of
States (corrected by level of prices) but not necessarily their international
situation (i.e. their economic power on the global market) which is better
described by GDP in current US $.
• the evolution of the GDP at the State level does not provide any
information on potential inequalities in the social or territorial distribution
inside each State .

Having this in mind, we can notice the high level of heterogeneity of the variation
of GDP PPPs both at the world level and inside the subgroup of States belonging
to the ESPON area. If we exclude the small States with exceptional increase
(multiplication by 15 for Malta), the most positive variations in the ESPON area
are observed for Mediterranean countries like Spain, Portugal or Greece and the
less favourable for UK, Switzerland and new member countries or candidate
countries of East-Central Europe (Czech and Slovak republic, Bulgaria, Romania,
Hungary, …)

Evolution of world GDP (ppps) in relative terms

Looking at the map 8-9 it is clear that most States located in the ESPON territory
(except above mentioned Mediterranean countries and Ireland) are characterised
by a more or less important reduction of their share of world GDP PPPs. This
reduction is generally less important than that observed for demographic criteria
which means that, in practical terms, the level of GDP per capita has increased
during the period 1952-1988 (see next section). The most important reduction of
world economic share is observed for United Kingdom but should be cautiously
interpreted because it is related at the same time to the long historical trend of
decline of the British Empire and to the specific situation of world economy in the
1950’s. The economic situation of United Kingdom and United States of America
at the end of the Second World War remained more favourable than that of

140
Germany, France or Japan which had to rebuild a large part of their economic
infrastructure destroyed by the war. This initial situation explains why reduction
of the economic share is more important for these countries and also for States
which did not participate to war like Switzerland and Sweden. In the case of
Soviet Union and former socialist countries, the explanation is different and the
strong reduction of world share of GDP took place mainly after 1989 during the
economic collapse which was produced by the transition towards market
economy. Economic crisis explains also the reduction of world share of GDP in
Argentina. The States which benefit from the most important increase of their
share of world GDP PPPs are concentrated in Eastern Asia (especially Japan,
China and South Korea) but can be described more generally as a “golden ring”
which involves all States located southern from Europe, United States and
Russia: Mexico, Brazil, S.E Mediterranean, Middle East, south and east Asia,
north of Oceania).

Map 8-8 : Annual average growth rate of GDP 1952-1998

141
Map 8-9 : Difference between world share of GDP (ppps) in 1952 and 1998

142
 8.1.3.3 Typology of economic evolutionS of world States
(1952-1998)

As in the previous case of demography, the aim of this synthetic typology is to

evaluate the specificity of the economic evolutions of each State with a cluster
analysis. To take into account all years of the period 1952-1998 appears very
important because the economic evolutions are more complex than the
demographic ones (Map 8-10).

Type A: Growth followed by stability

States from type A are characterised by a very important increase of their
economy during a first period (1950-1975) where their rate of increase of GDP is
much higher than the world trend. After the increase of oil prices and the
beginning of world economic crisis, a first subgroup (A.1) was able to maintain a
rate of economic development higher than the world trend, either because they
benefit from the increase of oil prices (Libya, Saudi Arabia, …) or because they
were able to adapt to a new economic situation (Japan, Thailand, Tai-Wan, South
Korea). A second subgroup (A.2) suffers much more from economic crisis and,
after an important increase in the 1970’s, turned to simple stabilisation of their
world share of GDP: Brazil, Mexico, Spain, Turkey …

Type B: Stability followed by growth

States from type B are characterised by an opposite situation where the first
period 1950-1975 was characterised by chaotic evolution of their economy, due
to many political perturbations causing a rate of economic increase lower or
equal to world trend. A first subgroup (type B.1) began to experiment an
exponential economic growth since the 1970’s and reached the highest rate of
growth at world scale in the 1990’s (China, Indonesia, Pakistan, Egypt). In
another subgroup (type B.2), the same movement took place but ten years later
and it is only after 1980 that they turned from decline to increase of their share
of world economy (India, Vietnam, Chile, …).

Type C: Regular decline

States from type C are characterised by the regular decline of their share in the
world economy, whatever their initial situation of economic development was.
This group can combine very industrialised States where the relative decline of
the share of world GDP is a simple consequence of the low rate of population
increase. But it can also be observed in underdeveloped countries with a lack of
any significant economic take-off. The subgroup C.1 concerns a group of States
of Western Europe (France, Germany, Italy …) where a slow increase of world
share of GDP was followed by a slow decline after economic crisis of 1975. The
subgroup C.2 is rather characteristic from countries of Central Europe (Poland,
Hungary, Sweden …) which followed a regular trend of economic growth lower

143
than world trend. The subgroup C.3 is similar but with lower rate of increase and
an important reduction of world economic share: it is observed only for United
Kingdom in Europe.

Type D: Stability and brutal decline after 1989

States from type D are mainly former republics of Soviet Union, or States which
experimented war at the beginning of the 1990’s (Yugoslavia, Iraq). They are
characterised by a relative stability of their world share of GDP until 1980 and a
beginning of slow decline during the period 1980-1990, which is very similar to
the evolution of previous type C.1. Their main characteristic is the exceptional
decline of their GDP between 1990 and 1998, due either to economic collapse
(consequence of market liberalisation) or to political crisis (war).

144
Map 8-10 : Typology of economic evolution 1952-1998

145
8.1.4 Synthetic typology of joint demographic and economic evolutions
of world states 1952-1998

The separated analysis of demographic and economic dynamics which has been
realised in previous sections did not take into account the joint effects of both
criteria which combines at the same time the evolution of social cohesion (if we
suppose that GDP/inh. is an approximate measure of the welfare of inhabitants)
and the evolution of economic attractiveness (positive or negative evolution of
GDP and population). As in previous sections, we use the global economic and
demographic trend of the World between 1952 and 1998 as reference which
means that we focus on relative situation and not on absolute situations of
countries (map 8-11).

8.1.4.1 Group A: Positive divergence

The most favourable situation according to our criteria is the situation of States
which have simultaneously increased their share of population and GDP at world
scale but with a higher rate of increase for GDP than for population. The States
belonging to this group (A) have simultaneously increased their demographic and
economic sizes which make them attractive from an economic point of view
because they represent a potential market of growing size. At the same time,
they have increased the GDP/inh. at a higher level than in the rest of the World,
which means that social welfare have potentially been improved. But this
improvement of social welfare is only a potentiality and depends also strongly on
the equal or unequal repartition of the benefits of economic growth between
social groups and regions of the States belonging to this category. Two different
types can be distinguished in this group A.

Type A.1: Very strong economic growth associated with important

demographic growth

The group A is characteristic of States of small or medium economic and

demographic size which have developed exceptional comparative advantage in
the global market during the whole period 1952-1998, generally associated with
a strong level of specialisation. This specialisation can be related either to the
presence of precious mineral resources (Libya, Saudi Arabia, Qatar, Botswana) or
to high level of foreign direct investments and industrial relocation in an initial
context of low wages (Southern Korea, Taiwan, Thailand), or to the massive
support of the economy by diasporas and allied countries (Israel). Most countries
of this group are characterised by very high level of social inequalities and the
existence of minorities or foreign workers excluded from the redistribution
process. This type of exceptional growth concerns 13 States but a rather limited

146
amount of world population (2.3% in 1952 and 3.0% in 1998) and world
economy (1.2% in 1952 and 5.2% in 1998).

Type A.2: Very strong economic growth after 1975

The group B is limited to 5 countries. It involves two demographic giants (China

and Indonesia) and 3 very small States or territories (Mauritius, Equatorial
Guinea, West Bank and Gaza). The main characteristic of this group is the very
high level of economic growth after 1975, associated with a stabilisation or at
least a reduction of the rate of demographic growth. The combination of both
effects is a very important increase of GDP/inh during the 1980’s and the 1990’s.
This group B represents more or less for a quarter of the world population during
the whole period (25.1% in 1952 and 24.7% in 1998) but its share of world GDP
has been multiplicated by two (6.4% in 1952 and 13.9% in 1998). Actually, the
GDP/inh. of the States of this group is more or less half of the mean of the
World.

8.1.4.2 Group B: Positive equilibrium

The group B is composed by States which have experienced a significant growth

of their share of world population and GDP but without advantage for one
criteria. It means that the ratio of GDP/inh. of these States has more or less
followed the world trend. Accordingly, the States of this group are economically
attractive because the size of their market is increasing and the social welfare of
their inhabitants has followed the “mean” evolution of the World which means
that their “social attractivity” has not changed positively or negatively during the
period. This group of 34 countries is mainly located in the “golden ring” of
countries located in southern periphery of the triad. It associates States of large
size (Mexico, Brazil, Egypt, Turkey, Iran, Pakistan, Philippines or Malaysia) with
small and medium States (Ecuador, Colombia, Algeria, Tunisia, Syria, Mongolia
…). It can be noticed than some countries of equatorial Africa also belong of this
group (Côte d’Ivoire, Kenya, Congo …). Between 1952 and 1998, this group of
emerging and new industrialised countries has increased its share of world
population from 11.3% to 16.2% and its share of world GDP from 7.4% to
11.3%.

8.1.4.3 Group C: « Golden decline »

The group C is characterised in the same time by a strong demographic decline

and an increase or relative stability of GDP. We propose to call this very original
situation “golden decline” because it characterises States where declining

147
population are becoming more and more rich as compared to the world trend of
GDP/inh.

Type C.1: Japan’s variant of golden decline

The most extreme example of this model of “golden decline” is provided by Japan
which has multiplied by two its share of world GDP (3.4% in 1952 and 7.7% in
1998) while its share of world population was strongly reduced (3.3% in 1952
and 2.1% in 1998). As a result, the GDP/inh of Japan which was more or less
equal to the world average in 1952 is actually 3.7 times greater!

Type C.2: Europe’s variant of golden decline

Another variant of the model of “golden decline” can be found in Europe where
many States has experimented an important decline of their share of world
population associated with a stability or very small decline of their share of world
GDP. This situation is very frequent in western part of Europe (Spain, Portugal,
Netherlands, Germany, Italy, Norway, Austria) but also in Balkans (Romania,
Bulgaria, Greece…). This type C.2 is not observed out of Europe, except in the
very particular case of Puerto Rico. The population of the 20 States of this type
has experimented a severe decline at the world scale (10.5% in 1952 and 6.0%
in 1998) but their GDP has been very few reduced (17.9% in 1952 and 15.9% in
1998). As a result, the GDP/inh of these States which was more or less the
double of world average in 1952 is actually the triple.

8.1.4.4 Group D: Negative equilibrium

The group D defines States which have experienced a significant decline of their
share of world population and GDP but without advantage for one criterion. It
means that the ratio of GDP/inh. of these States has more or less followed the
world trend as in the case of previous group B, but for opposite reasons.
Accordingly, the States of this group D are less and less attractive because the
size of their market is decreasing demographically and economically at the world
scale. The States of this group are firstly United States, United Kingdom and
former republics of soviet Union (Russia, Ukraine, Belarus …) and Warsaw Pact
(Poland, Hungary, Czech and Slovak republics, …) for which one possible
explanation of the low level of increase of GDP could be the expenses of armies
(nuclear weapon, ships, …) during the cold war. This situation is also
characteristic of States which did not participated to the Second World War and
took benefit from their neutrality (Switzerland, Sweden) which explains their
very high level of GDP in 1952 and their relative more important decline later.
Despite its decline, this group of 20 States still represents a very significant part

148
of the world GDP (46.7% in 1952 and 31.2% in 1998) and the world population
(17.1% in 1952 and 11.2% in 1998).

8.1.4.5 Group E: Negative divergence

States from group E are characterised by the most critical situation which is an
increase of their share of world population associated with a decrease of their
share of world GDP, which implies that their GDP/inh. is growing more slowly
than the world trend or eventually becomes negative. Two different types can be
defined according to the level of divergence between economic and demographic
trends.

Type E.1: Small negative divergence or global stability

An important group of States of medium and large size (Canada, India, Australia,
Southern Africa, Nigeria, Peru, Vietnam, Bangladesh …) and some States of
smaller size (Cameroon, Gabon, Venezuela…) presents the characteristics of
small negative divergence which can recover in certain cases a perfect stability of
the share of world population and GDP in other cases, small oscillations during
the period 1952-1998. The 37 States of this group which has more or less
followed the world trends is a significant part of world population (22.2% in 1952
and 26.8% in 1998) and world economy (12.3% in 1952 and 11.8% in 1998).

Type E.2: High negative divergence with increasing poverty

With this group of 36 States of small and medium size, except for some cases,
we explore the most negative scenario of evolution which is exactly the contrary
of the situation of “Golden decline” observed in group C. For many States from
group E.2, the diverging evolution of GDP and population produces not only a
lower rate of increase of GDP/inh. than in the rest of the World but and absolute
and effective decline of economic conditions in absolute terms. In many cases
the economic problems are reinforced by political crisis and wars (Afghanistan,
Congo R.D., Sudan, Laos …) or by the action of international organisation which
claim for structural reforms producing growing social poverty (Argentina, Chile
…). The small size of most States of this group make very difficult any action of
State and any policy of economic or political independency. In 1998, the 36
States from type E.2 counts for 10.0% of the world population (8.2% in 1952)
with only 2.9% of world GDP (4.7% in 1952).

149
Map 8-11 : Synthetic typology of demographic and economic evolution (1952-1998)

150
151
8.1.5 Conclusion: the effect of political enlargement on the economic
and demographic dynamic of the european union

In conclusion, we would like to underline that the fact to use the division of
World between States for the analysis of territorial evolution of Europe is a
strong limitation because it doesn’t take into account the regional dimension of
the phenomena (region is understood here has division of the World) and the
dynamic of political divisions. The evolution of population or GDP of the European
Union between 1950 and 2004 is a very fascinating example of dynamic of
political division because during the whole period we observe a structural trend
of demographic and economical decline (figures 1 and 2) which is always
balanced by a political dynamic of enlargement.

• The population of EU6 in 1950 was more or less equal to 6% of the

World but would have declined to 3% in 2000 without enlargement. On
the contrary, the share of world population located in the European Union
has remained very stable around 6% when EU enlarged to 9, 10, 12 and
15 members. With the enlargement to 25 members in 2004, the share of
world population located in the EU has reached an historical record of 7%
and could jump to 8% with the adhesion of Romania, Bulgaria and Turkey
between 2007 and 2015. In other words, demographic decline is not a
fatality for European Union from a political point of view.

• The GDP of EU6 in 1950 was more or less equal to 15% but would have
declined to 10% in 2010 without further enlargement of the political union.
The membership of United Kingdom in 1973 has produced a decisive
increase of this share which reached 20% and remained very stable
around this level when Europe enlarged to 10, 12, 15 or 25 members. But
the trend to economic decline of the area remains important and it is only
with further enlargement to countries like Turkey in 2015 that European
Union can eventually maintain this share of 20% of world economy in the
future.

152
Figure 8-1 : Evolution of the share of world population of the European Union (1950-2020)

15%

12%
Share of world population

9%

6%

3%

0%
1950 1960 1970 1980 1990 2000 2010 2020

UE6 UE9 UE10 UE12 UE12+ UE15 UE25 UE27 UE28 UE

Figure 8-2 : Evolution of the share of world GDP (ppps) of the European Union (1950-2020)

30%

25%
Share of world GDP (PPPs)

20%

15%

10%

5%
1950 1960 1970 1980 1990 2000 2010 2020

UE6 UE9 UE10 UE12 UE12+ UE15 UE25 UE27 UE28 UE

153
8.2 Benchmarking of WUTS Regions and Macroregions.

Yann Richard, LADYSS

Alberto Vanolo, Grupo Soges

Every comparison of regions in the world, i.e. clusters of states, should be

embedded in a homogeneous statistical frame and should be based on an
homogeneous method. The WUT system offers such an opportunity in providing
the ESPON TPG with a unique and flexible territorial framework. In this part, this
statistical tool will be largely used for the following indicators:

GDP in constant US dollars (2000 prices) in value term and in percentage of the
World Gross Product.
GDP growth.
GDP per capita (see Final Report – Volume 1 – Part A) and GDP per capita
growth.
Net FDI inflows in current US dollars (see Final Report – Volume 1 – Part A).

These indicators are almost all related to economics. They have been chosen
because they are among the most relevant ones to show the place and role of EU
and ESPON 29 in the global space and in the globalisation process, which is
mainly an economical process. Besides, thanks to the World Bank database, it
was possible to base the following tables on historical series (from 1980 up to
2004 or 2003). Therefore, each region (each WUT) of the world can be replaced
in an global, macroregional or regional context, but it can also be situated in
relatively long tendencies. Taking into account the historical evolution is useful to
bring more light and meaning to the actual hierarchies at different levels.

For all these indicators, each table presented below is based on the World Bank
database, which is entirely built on the same methodology. In almost all cases,
the number of states taken into account is roughly the same that is between 162
and 167, in order to match roughly the number of 168 which was proposed in
the second interim report (see SIR - Volume 1 – page 42). The number is always
inferior to 168, which is due to inevitable data gaps. Some States (Myanmar,
Cuba, North Korea…) do not regularly provide the World Bank with data, such as
GDP, GDP per capita, FDI inflows etc… In some tables, it may happen that
historical series are not complete for several states. At last, as all these data are
extracted from the World Bank database, they never take into account Taiwan.
This situation is explained by the fact that there is still no official
acknowledgement of Taiwan by the United Nations.

154
The globalization process is tightly combined with another one, which is called
“regionalization” or “regional economic integration” at macro or regional levels
(see Final Report – Volume 1 - Part C – Introduction). These expressions put the
stress on increase of trade and financial flows between states all situated in the
same region (clusters of states). This process can develop itself on a legal basis
(free trade agreements, union customs, common markets…), or without any
legal basis as it is the case in Eastern Asia where there is no such agreement at
macro regional level yet (between Japan and China for instance). This process,
largely described in the part C dedicated to the ensemble composed by ESPON
and neighbourhood, must be taken into account when one makes comparisons
between Europe and other regions in the world. ESPON is not only a territory for
spatial planners. It is also an economic region where states are more and more
interrelated. It must therefore be compared to other economic regions, which do
not totally match the WUTS framework, except for NAFTA which perfectly
corresponds to the WUTS 21 and 210. That is why this benchmarking part is
divided into two subparts. The first one is based on the WUTS framework. It aims
to complete the synthetic analysis provided in the first volume of the final report
(part A). The second one is based on other clusters of states which will be
defined and justified below.

8.2.1 Benchmarking the World on the WUTS base

Concerning the distribution of GDP, the hierarchy between upper level WUTS
brings no surprise, showing a clear domination of Americas, followed by Eurafrica
and Asiapacifica (table 8-1). This hierarchy has been the same for several
decades but it is likely to change in the nearest future. The surprise comes from
the contrasts inside WUTS 1, 2 and 3. The gap between rich countries and poor
ones is much more visible in the WUTS 1, especially between WUTS 11 and
WUTS 13, than in other ones. One can see for example that the geographical
distribution of production is much better balanced in Asiapacifica between WUTS
31 and 32. The gap is wider between WUTS 21 and 22, but the GDP of Latin
America is much higher that that of WUTS 12 and 13.

155
 Table 8-1 : Distribution of GDP
Average annual GDP distributed in periods of five years (billions of constant US 2000 dollars)
Source : World Bank
World unified territorial system Size
Code Name States 1980-84 1985-89 1990-94 1995-99 2000-04
W0 WORLD 162 21636 24452 25382 28932 32338

W1 EURAFRICA 110 6995 7998 9587 10605 11549

W11 Europe & Northern Asia 43 5633 6518 7798 8478 9479
W111 Western Europe 19 5406 6108 6901 7622 8488
W112 Eastern Europe & Northern Asia 24 226 410 896 856 990

W 12 Western Asia & Northern Africa 23 467 499 631 763 890
W 121 South & East Mediterranea 10 186 219 264 341 419
W 122 Middle East & Central Asia 13 280 279 367 422 471

W 13 Subsaharian Africa 44 213 239 263 299 344

W 131 Central Africa 7 21 25 22 23 26
W 132 Eastern Africa 11 23 29 34 41 50
W 133 Western Africa 15 47 52 61 71 82
W 134 Southern Africa 11 120 133 144 163 185

W2 AMERICAS 29 7958 9378 10584 12509 14143

W 21 Northern America 3 6122 7330 8307 9783 11313

W 210 Northern America 3 6122 7330 8307 9783 11313

W 22 Latin America 26 917 1023 1138 1363 1415

W 221 Central America & Caribean 21 289 317 367 428 430
W 222 Southern America 5 627 700 724 934 984

W3 ASIAPACIFICA 23 3506 4260 6237 7348 8279

W 31 Southern & Eastern Asia 13 - - 1027 1532 2034

W 311 Eastern Asia 2 - - 525 865 1219
W 312 Southern Asia 7 - - 389 515 644
W 313 South-East Asia 4 - - 113 150 170

W 32 Western Pacifica 10 3506 4260 5210 5816 6245

W 321 Western Pacifica 2 3084 3756 4586 5024 5334
W 322 South-Western Pacifica 5 172 208 294 391 444
W 323 Oceania 3 248 294 330 400 466

This hierarchy is not new. Things were roughly the same in the 1980s. What has
changed is the size of discontinuities between WUTS. The gaps between WUTS
have undergone significant evolutions. The contrasts between WUTS 1 and 2 and
between WUTS 2 and 3 are wider than 25 years before. The evolution is the
same between WUTS 1 and 3 is not the same. The increase of GDP has been
more rapid in Asiapacifica than in Eurafrica since the 1980s. The former is much

156
likely to overtake the latter in the current decade if this tendency goes on this
way. This is due to a rapid and steady economic development in Eastern Asia.

Comparisons at the lowest WUTS level show that Western Europe (WUTS 11) has
maintained its second rank in the world production. But this positive assumption
must be qualified.
1. The gap between Western Europe and other regions of Africa and Western or
Central Asia has increased a lot. One can wonder if EU and ESPON can foster
their own economic development on such a situation, being surrounded by poor
or eventually extremely poor countries.
2. The gap between Western Europe and Northern America is wider the 25 years
before. Whereas the average difference was only 500 billion dollars in the first
period (1980-84), it has reached a 2.825 billion dollars level in the last period
(2000-04). This shows that the economic growth has been much steadier in
America than in Europe.

All these conclusions are confirmed by the table which presents the share of each
region in the World Gross Product (WGP) in percentage terms (table 8-2). This
indicator is even more appropriate to show the tendencies followed by each
WUTS. One can see the relative decline of Eurafrica and Americas in the global
production, whereas the share of Asiapacifica is nothing less than spectacular.
But the decline of Eurafrica is more dramatic than that of Americas. These
geographical differences are more obvious at the third WUTS level (WUTS 11, 12
and so on). The decline of Northern America is not that dramatic (from 33,21%
to 32,94%) and it is largely due to the fact that the countries of the WUTS 31 are
not taken into account before 1990 (due to data gaps). On the contrary, the
decline of WUTS 11 is more significant (from 30,57% to 27,92%), whereas
WUTS 31 has gone up from 3,89% in 1990-94 to 5,44% in 2000-04.

157
 Table 8-2 : Distribution of GDP (in percentage of the world total). Average annual percentage
distributed in periods of five years
World unified territorial system Size 1980- 1985-
Code Name States 84 89 1990-94 1995-99 2000-04
W0 WORLD 162 100 100 100 100 100

W1 EURAFRICA 110 37,9 36,95 36,34 34,86 35,03

W11 Europe & Northern Asia 43 30,57 30,16 29,61 27,92 27,92
W111 Western Europe 19 29,34 28,3 26,2 25,09 25,08
W112 Eastern Europe & Northern Asia 24 1,23 1,87 3,42 2,82 2,83

W 12 Western Asia & Northern Africa 23 2,54 2,32 2,39 2,51 2,57
W 121 South & East Mediterranea 10 1,01 1,02 1 1,12 1,2
W 122 Middle East & Central Asia 13 1,53 1,3 1,39 1,39 1,38

W 13 Subsaharian Africa 44 1,12 1,07 0,97 0,96 0,98

W 131 Central Africa 7 0,12 0,12 0,09 0,08 0,08
W 132 Eastern Africa 11 0,13 0,14 0,13 0,14 0,14
W 133 Western Africa 15 0,26 0,24 0,23 0,24 0,24
W 134 Southern Africa 11 0,62 0,58 0,52 0,51 0,52

W2 AMERICAS 29 43,21 43,48 40,17 41,18 41,37

W 21 Northern America 3 33,21 33,96 31,51 32,17 32,94

W 210 Northern America 3 33,21 33,96 31,51 32,17 32,94

W 22 Latin America 26 5 4,76 4,33 4,5 4,21

W 221 Central America & Caribean 21 1,59 1,49 1,39 1,43 1,3
W 222 Southern America 5 3,41 3,28 2,94 3,08 2,91

W3 ASIAPACIFICA 23 18,89 19,57 23,48 23,96 23,6

W 31 Southern & Eastern Asia 13 - - 3,89 5,03 5,44

W 311 Eastern Asia 2 - - 1,98 2,84 3,24
W 312 Southern Asia 7 - - 1,48 1,69 1,74
W 313 South-East Asia 4 - - 0,43 0,5 0,46

W 32 Western Pacifica 10 18,89 19,57 19,59 18,93 18,16

W 321 Western Pacifica 2 16,73 17,38 17,41 16,55 15,79
W 322 South-Western Pacifica 5 0,8 0,81 0,92 1,04 1,01
W 323 Oceania 3 1,36 1,38 1,27 1,33 1,36
Source: World Bank

What happens at the lowest WUTS level? Western Europe has lost more than 4
points of percentage whereas Northern America has almost maintained its share
in the WGP. Only a few regions have significantly increased their part in the
World total: Eastern Europe and Northern Europe (WUTS 112) and Eastern Asia
(WUTS 311 that is to say mainly China). In the same time, some contrasts
between WUTS of third and fourth levels have been reduced. In Eurafrica for

158
example, the gaps between WUTS 111 and 112 is less wide than in 1980, but the
situation of subsaharian Africa remains disastrous. Whereas Eastern Europe has
apparently taken advantage from the outbreak of economic structural reforms,
the situation of Africa does not show steady signs of improvements.

The analysis of the average annual evolution of GDP partly confirms what is said
above. The rhythm of the economic growth has been superior to the World
average in Eurafrica only in the last period, and it has been always lower before:
2.39 % per year in WUTS 1 in 1980-2004, and 3.4 % for the World average. The
conclusions are the same at lower levels, for WUTS 11 (only 2.16 %, due to the
economic crisis which followed the collapse of the soviet and socialist block in
Central and Eastern Europe) and WUTS 12 (1.83 %). In the same time, the
regions composing Americas have shown a more regular growth without any
negative evolution throughout the whole period. The most rapid rhythm is the
privilege of Southern and Eastern Asia, where average economic growth has
been systematically superior to the world average: 4.8 % for the WUTS 3 and
5.7 % for WUTS 31.

8.2.2 What about ESPON and other economic macroregions

In order to match the so-called process of regionalization, the WUTS framework

is not sufficient and ESPON, considered as an economic integrated whole, must
be compared to other economic regions. These regions have already reached a
high level of integration, based on various patterns. Others are on their way to
higher and higher integration. The delimitation of these clusters of states is
based on the level of intraregional trade, or its evolution, and on the importance
of intraregional FDI flows. In some cases, the existence of legal base (free trade
agreement etc) has been taken into account but not necessarily. For example:
Eastern Asia and ASEAN have been included in the same whole: there is not such
agreement involving all the states of this region yet, but the intraregional trade
and financial flows are growing fast.
In almost all graphs, Latin America (without Mexico and Caribbean) has been
chosen and not Mercosur. Such a choice is based on the increase of intraregional
trade at all Latin American level and on a step by step process of enlargement of
Mecosur: almost all the countries of South America are nowadays more or less
directly linked to Mercosur with various status.

The graphs below show a process of relative decline of EU 15 and ESPON

compared to other economic macroregions. The increase of GDP in NAFTA has
always been more rapid than in ESPON, EU 15 and even in the Monetary Union.
Besides, nothing less than alarming, it appears that ESPON and EU 15 were
already overtaken by the macroregion composed by Eastern Asia and ASEAN in
1987! This confirms the idea of a shift of the centre of gravity of the World

159
economy from the Atlantic region to the Pacific Rim. In addition, it is clear that
ESPON has not only been overtaken in absolute terms, but also in relative terms,
losing almost 5 points of percentage. Over the same period, NAFTA has slightly
increased its share and Eastern Asia (that is to says Eastern Asia + ASEAN) has
gained a bit more than 5 points.

Figure 8-3 : Evolution of GDP

Evolution of GDP

1,4E+13

1,2E+13

1E+13 EU 15
Constant 2000 dollars US

ESPON 29
8E+12 European Monetary Union
CIS
6E+12 East Asia
Nafta
4E+12 Latin America

2E+12

0
70

72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04
19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

20

20

20

Figure 8-4 : Share in the World Gross Product (constant 2000 US$)

Share in the Word Gross Product (constant 2000 US $)

40

35

30
ESPON 29
Percentage

25
Eur. Mon. Union
20 East Asia
Nafta
15
Latin America
10

0
72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04
19

19

19

19

19

19

19

19

19

19

19

19

19

19

20

20

20

As far as the GDP per capita is concerned, the evolution is somewhat different,
due to a slower demographic increase in EU and ESPON than in Asia. The gap
between ESPON and Eastern Asia is roughly the same in 2004 as in the 1970s,
while the gap with NAFTA has dramatically widened, because of two brutal falls
in the 1970s and the 1990s. The evolution of the European Monetary Union is not

160
the same, almost keeping the contact with the performances of NAFTA and
widening the gap with Eastern Asia.

This process is partly due to the lack of demographic vitality of Europe. This idea
is confirmed by the fourth graph. It shows than the annual growth of GDP in
ESPON and Euro Monetary Union has always been dramatically inferior to that of
Eastern Asia since the 1970s. Nonetheless, the gap between both regions has
widened.

Figure 8-5 : Evolution of GDP per capita

Evolution of GDP per capita

25000

20000
Constant dollars US 2000

ESPON 29
15000 European Monetary Union
CIS
East Asia
10000 Nafta
Lat America

5000

0
70

72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04
19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

20

20

20

Figure 8-6 : Annual evolution of GDP per capita (constant 2000 US$)

Annual evolution of GDP per capita (constant US 2000 dollars)

15

10

5
ESPON 29
0 European Monetary Union
Percentage

CIS
-5
East Asia

-10 Nafta
Latin America
-15

-20

-25
70

72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04
19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

20

20

20

161
On the contrary, the place of EU 15 and ESPON at first location of FDI stock in
the world has been more than confirmed since the 1980, either in absolute or in
relative terms. The gap between EU and other regions has been widening more
and more rapidly since the 1990s. This confirms several ideas. The attractiveness
of EU for investors is still very high. The economies of EU and ESPON are much
more engaged in the financial globalization than others, even if a large part of
this FDI stock comes from Western Europe. These graphs confirm what is said in
the first volume of the final report about the geography of foreign investment
flows. Reversely, graphs dedicated to the FDI outward stock would show that EU
is definitely the first investor in the World, far before the United States and Asian
countries.

Figure 8-7 : Evolution of inward FDI stock in various regions

Evolution of inward FDI stock in various regions

4500000

4000000

3500000
Millions of current US dollars

EU 15

3000000 ESPON 29
Nafta
2500000 Mercosur
2000000 Latin America
East Asia
1500000
ASEAN
1000000 E Asia + Asean

500000

0
1980 1985 1990 1995 2000 2004

Figure 8-8 : Share in the World FDI inward stock

Share in the world FDI inward stock

60

50

40
ESPON 29
Percentage

Nafta
30
Latin America
E Asia + Asean
20

10

0
1980 1985 1990 1995 2000 2004

162
9 ACCESSIBILITY THEMATIC ANALYSIS

9.1 Distance proximity to ESPON 29

The attempt to delimitate a so-called ”ESPON Influence Area” can be based on a

first group of indicators which are related to the general concept of ”proximity”.
What we try to identify here is not the actual flows but the various factors which
can make easier the relations between the countries of the World and the 29
countries of the ESPON. In other words, we focus of potentialities of relations
based on ”hard facts” which are not likely to change in a near future and which
are strategic realities for long term political decisions.

The most obvious reality is the physical distance between each country of the
World and ESPON 29. Whatever the mode of transportation, physical distance is
necessarily related to a time or a cost which limits the interactions and the flows.
Of course, the correlation is never perfect and it can happen that the cost or time
for a travel at 6.000 km is lower than the cost or time for a travel at 2.000 km,
but the technical and economic conditions can change and, on the long term,
physical distance remains always strongly correlated with functional distances.
Furthermore, many crucial phenomena are really related to physical distance and
not to network distance: it is sufficient to keep in mind the accident of
Chernobyl or the actual diffusion of new virus of H5N1 bird's flu to be convinced
that many diffusion process are directly related to ”bird fly distance” and not to
networks . Last but not least, we can notice that physical distance is not only a
material reality but also a mental one, as it is associated to visual proximity on
the maps which are observed and learned by students all around the world.

The measure of physical distance between states is based on the database of

CEPII15 which propose an estimation of distance between main urban centres of
each couple of states, weighted by their population. This measure is much more
precise than the usual distance between capitals or conventional centroïds of
territories and can be considered as a good approximation or mean distance
between inhabitants of different states. Notice that this distance is not equal to 0
inside a state but is a measure of mean internal distance between inhabitants of
the country.

To obtain a measure of distance to ESPON29, we have computed for each state

of the world the mean of its 29 distance to the ESPON members. We did not
weight results (by population or GDP of the ESPON countries) as we had no

15
http://www.cepii.fr/anglaisgraph/bdd/distances.htm

163
reason to choose a particular criterion. Among the 168 countries of our database,
the largest distance to ESPON29 are obtained by New Zealand (18.000 km), Fiji
(16.200 km) and Australia (15.700km) and the minimal distance by Czech
Republic (990 km), Austria (1.010 km) and Germany (1.030 km). It is
interesting to notice that this distance can be higher for ESPON countries like
Portugal (2.260 km) or Cyprus (2.400 km) than for non ESPON countries like
Turkey (2.020 km), Moldova (1.490 km) or Tunisia (1.800 km).

As our purpose is to combined various criteria of proximity which are both

qualitative and quantitative, it is necessary to transform all of them in dummy
variables (0/1) which can be further associated in an homogeneous table for
statistical synthesis. In the case of distance, we decided therefore to establish
four dummy variables indicating if the mean distance to ESPON 29 is lower than
1.500, 3.000, 4.500 and 6.000 km. We obtain therefore an implicit distance
score which is ranking from 4 (for states located at less than 1.500 km from
ESPON 29) to 0 (for states locate at more than 6.000 km from ESPON29).

Map 9-1 : Distance score

164
The statistical breakdowns have been chosen in order to fit as much as possible
with concrete facts. We can see on Map 9-1 that the maximum distance score
defines the geographical core of ESPON29 area, excluding only most peripheral
ESPON countries (Ireland, Spain, Portugal, Greece, …) but including some non
ESPON members (Balkans, Moldavia, Belarus). The distance score 3 defines
clearly the European Neighbourhood, including both eastern and western
peripheries of ESPON area. Lower distance scores (1 and 2) are associated to
most remote regions of Sahara and Central Asia which are clearly located on the
margins of the ESPON space but can nevertheless remain important for political
action on many subjects (migrations, security…). We considered as not
necessary to distinguish further classes of distance after 6.000 km and we can
notices that this threshold of distance is often related to major barriers like
Atlantic Ocean or Himalaya mountains.

9.1.1 Common borders and maritim neighbourhood with ESPON 29

The countries which are located at a short distance from ESPON can be
differentiated according to the fact that they share or do not share a common
terrestrial or maritime border with ESPON countries. For example, Bosnia and
Herzegovina is very near from all ESPON countries according to distance (1.190
km) but do not have any common terrestrial border with ESPON member states.
On the contrary, Brazil is located in average at a very long distance from ESPON
countries (9.500 km) but shares a long terrestrial common border with French
Guyana which is a piece of France and therefore of European Union and ESPON.
Common borders are strong material and symbolic realities which can not be
confused with distance, even if it is partly correlated. The problem with this
criterion of contiguity is the difficulty to measure it because different solutions
are possible. Concerning the existence of terrestrial borders, the database from
CEPII which has been used here does not mention some borders like the very
symbolic one between Morocco and Spain around Ceuta and Melilla. This
omission could probably be explained by the small length of this terrestrial
border, but it is a full reality from juridical point of view. The poor migrants who
risk their life to cross this golden curtain are perfectly aware of the fact that it is
a limit of European Union which provides rights to the happy few which succeed
in their attempt. The borders of ESPON should be considered as potential or
active political interface and not only as barriers dedicated to the control of
external flows. That is the reason why we decided to extend the concept of
terrestrial contiguity proposed by the CEPII to the case of states separated by a
short maritime distance which can be easily crossed by official or non-official
flows. We obtain therefore a differentiated score of contiguity equal to 2 for
common terrestrial borders and to 1 for short maritime distance borders (Map 9-
2).

165
 Map 9-2 : Contiguity score

9.1.2 Colonial relations as factor of proximity with ESPON 29

The analysis of borders completes nicely the measure of proximity based on

distance. But it has to be completed by an historical dimension because borders
are changing through time. In the case of Europe, it is especially important to
take into account this historical dimension as European people has dominated, at
less for a while, most part of the World during the period of great expansion of
the 15th-19th centuries. Thanks to the CEPII database, it is possible to measure
for each couple of states in the world if they have been in historical relationships
(mainly colonial) during the last 4 centuries and/or if they were always in colonial
relationship in the more recent period (1945). An aggregation of the matrix of
colonial relationships of the CEPII has been realised in order to measure for each
state of the world if they have been in colonial relationships with at less one of
the 29 states of ESPON, both in the long term and in the recent period. We
obtain therefore a score of colonial proximity which can reach the values 0, 1 or
2 according to the fact that: the state was never in colonial relation with Europe
(0); the state has been in colonial relation with Europe in the past but obtained
its independency before 1945 (1); the state was still in colonial relation with

166
Europe in 1945 (2). Note that colonial relations are not always directed from
ESPON states to the rest of the world and that, in the case of Russia and Turkey,
it is precisely the reverse situation which explains their high scores of historical
proximity. The resulting map 9-3 indicates clearly that this historical factor
remains an important factor of ESPON influence in the world, even if – according
to CEPII – we can observe an important group of states located on a diagonal
from Ethiopia and Arabia to China and Japan which has never been colonial
relation with ESPON countries. This result should be considered as preliminary
and probably questionable as colonial relations are not the only modality of
historical contact between countries. We can for example be surprised that the
CEPII database does not mention any relations between Belarus and Ukraine on
the one hand, and Poland or Lithuania on the other hand as they belong to
common political construction in modern age. We can more generally consider
that the focus on colonial relations is not sufficient to provide a perfect picture of
relations between states in the past. If we have considered former commercial
relation like “Silk road” we would probably not have obtained such lack of
relations between Europe and central and eastern Asia.

Map 9-3 : Colonial score

167
9.1.3 Common language as factor of potential interactions with
ESPON 29

One major output of colonial relations developed between European countries

and the rest of the world has been the diffusion of European languages,
especially English, French, Spanish and Portuguese, in many other countries of
the world where these languages can be the official ones or, at least, can remain
spoken by an important part of the population. Whatever the criteria of
interaction between states (migration, trade, culture…) is, a common language is
a very precious advantage in international competition or, simply, for the
development of partnerships and better understanding. Thanks one more time to
the CEPII database which has established two matrixes of linguistic proximity
between states of the world. The first one is based on the existence of a common
official language which can produce multiple links as some states has several
official language. For example, Cameroon has two official languages (French and
English) which means potential connexions with 7 ESPON states which are
officially speaking French (France, Belgium, Luxembourg, Switzerland) or English
(UK, Ireland, Malta). The second criterion is based on common communication
languages, official or not, which are identified by CEPII on the criteria to be
spoken by at less 20% of the population. The CEPII consider here that two
countries are potentially able to interact as long as they share at least one
communication language. By aggregating the CEPII matrix, we have established
a matrix of linguistic proximity between all countries of the world and ESPON
members, following the same principle as for historical relations and ranking
from 0 (no common language, official or not, with ESPON countries) to 2
(existence of at least one common official language and one communication
language with ESPON countries). The resulting map is interesting as it reveals a
large diffusion of European language all above the world except in Asia and
Middle-East. But one more time, the results should be cautiously interpreted and
some limits of the database should be pointed. For example, the language
identified in Belarus and Ukraine are considered as different from language
spoken in other ESPON countries but this result underestimate the great
proximity between slave language and the fact that people from Poland or
Slovakia can generally easily understand the dialects spoken in western parts of
Belarus or Ukraine. We can also ask – despite the fact that it is not a politically
correct question – if Russian language is really not spoken by minimum 20% of
population in some new member states, especially Baltic countries. We could also
consider that the aggregation of China, Hong-Kong and Macau in the same
political units lead to a false conclusion concerning the lack of common language
with Europe. It is certainly true that less than 20% of Chinese are speaking
English. But it is certainly also true that more than 50% are speaking English in

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Hong-Kong or Macau and that this language is commonly used in western cities
like Chang-Haï.

Map 9-4 : linguistic score

9.2 Typology of ESPON countries, according to the air and trade

flows

9.2.1 Methodology

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Both typologies have been realized on the basis of a similar methodology. The
data basis of the classification is a flow matrix of 29 ESPON countries x 168
countries of the world. Since it is difficult to classify countries on a so disparate
basis, we transform this matrix into a 29 ESPON countries x 17 WUTS3 world
regions matrix, which gives a more stable result. However, it is true to say that
the geographical divisions we choose a priori does have a significant impact on
our classification.

Our indicator is the share of each WUTS 3 region in the trade or airflow of each
ESPON country, excluding the relations inside the ESPON area. We thus only
evaluate the geographical orientation outside the ESPON space. However, the
interpretation of such a classification is different whether the ESPON space
represents a very high share of the air and trade flows: for some countries,
extra-ESPON flows are so weak that the geographical orientation is not very
significant.

The classification has been realized with a hierarchical ascendant cluster analysis
with the Ward method. This method allows to avoid the classical problem of
these kinds of cluster analysis, that is to say the formation of a very big group
with an average profile. The number of types is a compromise between
readability and richness of the information, since the loss of variance for each
grouping does not present big gaps that could allow to choose on a more
objective basis.

9.2.2 The typology of ESPON countries on the trade flows

The typology on the geographical orientation of trade flows of ESPON countries

includes six types. The point of departure is a seven groups typology, where
Malta forms a group in itself. This peculiarity is related to strong relations with
Singapore. This is anecdotic and we opted to include Malta in the nearest group,
that is to say, the south-western type (type 4).

The type 1 is the more American-oriented one, if we exclude the very marginal
type 3. It includes United Kingdom, Netherlands, Germany, Sweden, Switzerland
and Austria. The trade with Eastern Asia is also specific of this type.

Slightly less important, the type 4 groups south-western countries and Belgium.
We find here a strong specificity of the trade with Africa, Middle-East and
Southern America. On the other side, eastern Europe and Eastern Asia does not
count much for this type.

Types 5 and 6 group new member states of central and Eastern Europe, which
distinguish by the weight Eastern Europe in their trade (non ESPON Eastern

170
Europe, that is to say mainly Russia). For the type 6, the share of Eastern Europe
is twice than for the type 5 : it includes Bulgaria, Slovakia, Lithuania, and Latvia
still very linked to ex-USSR, as well as Slovenia, which keeps links with the rest
of ex-Yugoslavia.

Type 2 only includes Greece and Finland, whose trade with Eastern Europe is still
more than 20 % (less than types 5 and 6) : the second one with Russia, while
Greece has strong relations with neighbouring countries (Albania, Yugoslavia).

Type 3 only includes Ireland, Norway and Luxemburg, whose trade is very
northern-America-oriented : Ireland has become a workshop country which
attract high US investments, while Norway exports a significant part of its oil to
USA.

9.2.3 The typology of ESPON countries on the airflows

This typology gives a different picture of the geographical orientation of the

relations between ESPON countries and the rest of the world.

We underline first that Luxemburg and Slovakia have not been considered, since
all their airflows are oriented inside the ESPON space.

We also begin with a seven group’s typology, and we then choose to put malta
and Cyprus in the same group than Greece and Czech Republic, all countries
characterized by the importance of relations with Middle-East and Northern
Africa.

Type 1 includes United Kingdom, France, Belgium, Italy, Netherlands and Poland.
They distinguish by the weight of their relations with Northern America. Only
type 3 (Ireland and Norway) has a higher proportion of relations with Northern
America, but with a very weak volume.

Type 2 is the second major type: it includes Germany, Sweden, Finland,

Switzerland and Austria. Relations with Eastern Europe are the most specific
ones, with a similar share to the links with Northern America.

Type 4 groups both countries of Iberia peninsula, which have strong relations
with Latin America.

Finally, type 6 has nearly sole relations with the rest of Eastern Europe, mainly
Russia and ex-Yugoslavia: it includes Bulgaria, Romania, Baltic countries and
Slovenia.

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9.2.4 Conclusion

We find in both classifications strong similarities: Eastern ESPON countries which

keep strong relations with ex-USSR and ex-Yugoslavia; inside these Eastern
countries, central eastern countries distinguish by the lower weight of the ex big
soviet brother; the Iberia peninsula keeps strong relations with Latin America;
some countries are characterized by the importance of the relations with
Northern America (United Kingdom, Ireland, Norway).

Map 9-5 : typology of European countries on the basis of airflows

172
 Figure 9-1 : Share of different WUTS in the extra-espon airflows of the groups of country

100
Type 1
90 Type 2
Type 3
80
Type 4
70
Type 5
60 Type 6

50

40

30

20

10

0
eb

ie
e
d
N

C
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st

ac

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rW

si
Su

Pa
AM
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an
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AM
af

SU
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hr

Af

tP
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ce
as

SW
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es
AF

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Eu

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173
Map 9-6 : Typology of European countries based on the trade flows

Figure 9-2 : Share of different WUTS in the extra-espon trade of the groups of country

174
70,00

Type 1
60,00

Type 2
50,00
Type 3
Type 4
40,00 Type 5
Type 6
30,00

20,00

10,00

0,00
W111 W112 W121 W122 W131 W132 W133 W134 W210 W221 W222 W311 W312 W313 W321 W322 W323

175
10 ENVIRONMENT THEMATIC ANALYSIS

10.1 Romania : future eastern EU border environmental

Challenges

Danel CONDORACHI
TIGRIS

The attempt to make a brief presentation of these challenges can make one
overpass aspects that may be important later, when we envisage these problems
from a systemic point of view. However, as far as we can foresee, we will sketch
the most important ones. There is no specific order or classification, just a mere
presentation of them.

10.1.1 EU’s border security.

This is a major issue because the migration pressure may increase from eastern
European countries (Moldova, Ukraine, all other European countries of former
USSR) and from Middle East and Asia. The causes are mostly economic (income
opportunities, illegal work, generous asylum system, etc) but also political. The
Romanian EU future border is presently under an elaborate reform but still has to
undergo enhancements regarding technical infrastructure, policies and
regulations for reducing human smuggling and illegal immigration which tend to
be more and more ingenious.

This study outlines some examples of routes frequently used for people
smuggling. Migrants from Asia mainly use the route via Kazakhstan, Kyrgyzstan,
Uzbekistan, Tajikistan and Turkmenistan to Russia and from there, via Ukraine,
Slovakia and the Czech Republic, to western European countries or even further
to the United States and Canada. At the same time, the Balkan route from Asian
countries via Iran and Turkey and from there, via Balkan states, to Western
Europe is used for the smuggling of migrants as well as illegal goods such as
drugs, firearms, etc.

It is currently estimated that at least 10% of all the migrants who arrive in the
member States do so through the Balkans. This extensive use of many of the
Balkan countries to enter the European Union is an issue that should be
monitored very closely, particularly in light of the fact that some of these
countries will become part of the European Union in a near future (EUROPOL).

176
On the other hand, it is necessary to develop specific measures for checking and
banning “official” hazardous transports viewed as “harmless” exports from or into
EU (nuclear or chemical wastes, precursors, byproducts, biological materials,
narcotics, other goods etc) that may lead to import or export insecurity, public
annoyance etc.

10.1.2 Air quality.

European regulations for air quality have been improved. The newcomers in EU
and their eastern neighbors have to respect these regulations and directives for a
longer period of time due to their need of industrial facilities modernization,
energy efficient technologies implementation, etc. Former soviet European
countries are largely dependant from Russian Federation for their fossil fuels
imports and for their attempt to overcome their last decades’ economic decline
will continue to stick for some time to their inherited technologies. Switching to
cleaner fuels like natural gas will increase their dependence from Russia.
Alternate energy sources will be delayed due to their financial problems (or
difficulties in acceding international credits or funds) in order to make huge
investments like in nuclear energy or ecological solutions (hydroelectric, solar,
wind, hydrogen, etc).

Thus, the pollution of the air is still worrying, especially in urban areas and
industrial platforms. Industrial decline has caused a substantial reduction in
emissions of chemicals in many European countries of former Soviet Union. But
air quality has not improved that much in most cities. The main reasons are the
very sharp growth of private cars (in Moscow, for example, the number has
doubled in the last few years) and the poor quality of the domestically produced
petrol they use. Enterprises also pay practically no attention to environmental
protection measures in the current economic hardships. Their purification
equipment is often obsolete and they often cannot afford to replace it.

10.1.3 Pesticides.

The production and use of pesticides in Eastern European countries increased

since the 1960s and their use peaked in the second half of the 1980s. They
became too expensive in practically all countries of the region with the onset of
economic reforms. But fortunately, their use is now gradually decreasing.

Nevertheless, pesticide concentrations in soils remain high in many places. A

selective review of soils in the spring of 1994 by Russia's State Committee on
Land Resources showed that about 9.4 % of samples were polluted with
pesticides above safety levels. The situation in the Aral Sea basin is very serious:

177
the Uzbek Ministry of Nature Protection reports that concentrations of pesticides
in this area's surface fresh waters on average exceed safety norms more than
five times.

Socialist, collective agriculture required large, homogeneous fields which could be

cultivated by large machines. Pesticides were mainly applied from the air, which
often meant they were widely spread. Soil in the fields of Uzbekistan, for
example, was quite commonly contaminated by DDT and other chlorine-
containing pesticides at levels 100 to 300 times the MPC. The maximum, in the
Termez region, was 4,800 times the MPC. Concentrations in soil in fields used for
agricultural planes exceeded the MPC level by 25,000 to 30,000 times. Recently
these concentrations have gradually decreased.

In Moldova, also in Ukraine noteworthy is that, in the recent years, chemical

fertilizers use has been substantially reduced. There is little monitoring of large-
scale ecosystem impacts of pesticides in the Republic of Moldova and recently a
special monitoring program was set up, which needs financial and technical
assistance.

Specialized places for storing and processing pesticides on collective farms were
very rare. Often, they did not even have a primitive roof. In many countries old
pesticides present a very serious problem. The Ministry of Environmental
Protection of Ukraine says there are about 10,700 tons of them on farms, while
Russia has about 40,000 tons spread throughout the country (an amount roughly
equal to the chemical weapons stored there) and there are thousands of tons in
Azerbaijan, the Central Asian Republics, Moldova and elsewhere. They are
usually stored in very poor conditions. There are simply no facilities to transport
or use them safely and they often penetrate to groundwater, causing serious
contamination.

10.1.4 Wastes.

The mountains of solid wastes and lakes of liquid ones, near most heavy
industrial plants in Moldova, Ukraine, Russia, Kazakhstan and other countries are
probably the most visible environmental legacy of the former system. Storing
wastes in open ponds or on the ground (with practically no protection against
percolation) was common.

Ukraine's extremely serious problems exemplify the situation for every country of
the former Soviet Union. Its Ministry of Environmental Protection reports that
about 4 billion tons of toxic wastes - containing high concentrations of mercury,
cadmium, lead, copper, nickel, vanadium and other heavy metals - have already

178
been accumulated there. They are often stored in absolutely inadequate
conditions. In many places, especially in the east of the country, aquifers are
already contaminated and inadequate for water supply.

The country produces about 100 million tons of toxic waste a year. Although the
output of metallurgical and chemical industries was cut by about a half between
1992 and 1994, their generation of toxic waste fell by only 25 to 30 per cent. As
industry declined, the recycling of toxic wastes also fell down: in 1994 it reached
only 41.3 per cent of its 1990 level.

The Azerbaijan Government reports that 97 % of waste goes to dumping sites

with practically no groundwater protection. Often toxic wastes are dumped at
sites designed for domestic rubbish. There is practically no control. Meanwhile in
Uzbekistan, its Government adds that more than 2 billion tons of wastes have
been accumulated in dumping sites (1.3 billion tons from the mining industry).
These wastes often contain high concentrations of heavy metals, such as lead,
mercury, cadmium, arsenic, nickel, zinc and copper amongst many others.
Practically none of these sites are ecologically safe: leakages and the percolation
of pollutants are observed everywhere.

The list could be endless, including all countries of the region. The situation is
very serious in many parts of Russia (Urals, the Moscow region, Kuzbass, to
name just a few), Kazakhstan, and practically everywhere throughout Eastern
Europe (after Ruben Mnatsakanian, Budapest).

10.1.5 Radioactive waste.

There is an 11 ha radioactive waste disposal site at the special Centre for

Radioactive Waste in the eastern part of Chisinau (Republic of Moldova). Only
low and medium-level wastes need to be decommissioned, causing no special
problems. A significant increase in waste generation appears between 1980 and
1985 for Co-60 (factor of 7) and C-14 (factor of 5). Between 1985 and 1990, a
significant increase was registered: by a factor of 3 for Sr-90, by a factor of 6 for
Cs-137 and by a factor of 8 for Pu-239. There is a gradual significant decrease
over the whole period only for Ra-228 and Tl-204 (Source: UNDP Moldova 1993 -
Studies carried out by Moldavian consultants).

Nuclear power is an important part of the energy complex of Ukraine. At present,

nuclear energy output equals 75,239 million kilowatt-hours, which is more than
43 % of the total energy production. 14 energy units are in use in 5 nuclear
power stations (NPS). 4 units at Rivenska NP and Khmelnitska NPS are under
construction. 2 energy units at Chernobyl NPS (units n° 1 and n° 2) are being

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prepared for shutdown. Chernobyl NPS (‘Ukrittia’), uranium or mining and
processing enterprises close to Zhovti Vody and research reactors in Kyiv and
Sevastopol are under constant surveillance.

Ukraine does not have any national or regional storage for spent nuclear fuel,
except one storage place near the Chernobyl NPS. Spent nuclear fuel from an
NPs with VVER-type reactors is transported to Russia for recycling and burial.
Work for the construction of storage facilities for spent nuclear fuel has begun at
Zaporizhska NPS. A complex program of solving Ukrainian NPS nuclear fuel cycle
problems is being prepared. A major part of this program is dedicated to RW
problems (source: UNEP).

For Ukraine, the nuclear accident in Chernobyl (1986) and its effects throughout
Europe are already famous and need no further comment. Financial aid for
Ukraine for non-nuclear energy alternative is also well-known as well as logistics
for neutralizing the damaged facility.

There is no organized disposal site for hazardous industrial and chemical waste.
Most toxic industrial wastes are stored on industrial sites while awaiting a
solution. Currently, only 5% of the industrial wastes generated annually are sent
to proper disposal sites. Three quarters are dumped informally on communal
tips, mixed with municipal wastes. Surface water and groundwater have been
polluted to an unknown level. There are many concerns over illegal and
uncontrolled dumping of both municipal solid waste and industrial wastes at
numerous locations (R. of Moldova, Department for Statistics, 1997).

10.1.6 Oil.

Pollution by oil and its products by the Soviet/Russian oil industry is a permanent
disaster. The majority of pipelines were built in the 1970s and 1980s, in a great
rush, in permafrost or acid peat soils in east Siberia, and they very frequently
corrode and discharge oil. Only major incidents (like last year's disaster in the
Komi Republic) attract international attention, but smaller leakages are very
common. There are about 60,000 minor leaks from Russian pipelines every year,
and the annual loss of oil and oil products is estimated to reach at least 3.5 per
cent of total extraction. In eastern Siberia alone, according to the estimates of
the Security Council of the Russian Federation, the leaks reach between 3 and 10
million tons of crude oil each year. Arctic ecosystems have very little ability to
purify themselves; so oil, heavy metals, radionuclides and other pollutants
remain for decades if not centuries.

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Oil pollution of the seas, especially in the Arctic, also reaches high levels. The
Barents and Kara seas are heavily polluted as a result of many violations of
technical rules during extraction and transport. As an example, 10 % of the
bottom sediments of the Ob estuary, where sturgeons used to winter, are now
made up of heavy fractions of oil. The situation is not much better in Azerbaijan:
bottom sediments in Baku Bay, its Government reports, are extremely polluted.

10.1.7 Chemical weapons.

Appalling facts on the production and storage of chemical weapons in Russia

(kept absolutely secret during Soviet times) have recently become known. Seven
factories produced chemical weapons in five cities - Berezniki, Chapaevsk,
Dzherzhinsk, Volgograd and Novocheboksarsk. The last four are located on the
banks of the Volga river which is Europe's largest river and the source of drinking
water for millions of persons. Production, testing and storage of chemical
weapons were accompanied by numerous violations of safety rules. In 1990-
1992 - before it signed the International Convention on Chemical Weapons -
Russia announced that it had 40,000 tons of poisonous substances, including
32,000 tons of phosphorous-organic compounds.

The problem of how to destroy the weapons is still unresolved because public
protests have blocked the use of a specially designed factory at Shikhany, near
Saratov, also located on the banks of the Volga. In the past, large quantities
were commonly dumped in the sea. Data collected by L. A. Fedorov, in his 1995
book (Undeclared Chemical War in Russia: Politics against Ecology), shows that
the dumping took place in hundreds of locations in the Baltic Sea, Black Sea,
Barents Sea, Kara Sea, White Sea, Sea of Japan, Sea of Okhotsk, and probably
others to. He also produced some evidence that chemical weapons were buried in
rivers and peat bogs throughout Russia.

10.1.8 Rocket fuel.

The Soviet and Russian industries produce an extremely toxic substance - non-
symmetric methylhydrazine – to be used as a liquid rocket fuel. Like chemical
weapons, this substance belongs to the first class of toxicity. During the course
of a launch, unspent fuel enters the atmosphere with discarded sections of
rocket. Considering that there were thousands of launches in the former USSR
and Russia, pollution of vast territories in the Archangelsk region, in Gorny Altai
and in Yakutia is now a serious problem, according to Prof. Alexei Yablokov, head
of the Interagency Committee on Ecological Security of Russia.

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At present, there are about 200,000 tons of rocket fuel in store in different
facilities in Russia, that is five times the amount of chemical weapons.
Production, storage, transportation and utilization of fuel may have serious
ecological consequences, as yet barely known to the public. For example,
according to an unofficial source, the mysterious death of more than 2 million
starfish and thousands of other species in the White Sea in 1990 is linked with an
unsuccessful rocket launch from a submarine. The rocket was destroyed and fuel
entered the sea with devastating ecological consequences. The official
commission that investigated the case immediately after the incident said that
the causes of the deaths were 'not known'.

In addition, we can notice the presence in Transnistria of the 10th Russian army
which can be viewed as an instability factor in the area which makes a political
and maybe ecological pressure on Moldova and Ukraine.

10.1.9 Nature, forest and biodiversity.

The natural steppe ecosystems are dominant in Ukraine. The scattered and small
remains of virgin and old fallow steppes on the slopes of river valleys, ravines,
high banks and sea limons continue gradually to degrade under the impact of
various anthropogenic factors (cattle grazing, construction, recreation, pollution,
destruction of vegetation sites, etc.). This tendency has been somewhat reduced
since cattle grazing has become less intensive because herds have considerably
diminished in the agricultural enterprises. However, large natural pasture zones
in the steppe strips are in the third and fourth stages of degradation. If the
isolated steppe remains in this condition for a prolonged period of time, the
result will be an irreversible loss of biodiversity. More and more botanists express
concern that species and regional specificity of the steppe flora might be in
decline, and worry about the introduction of species related to human activity
into the local flora. Evidently, these phenomena are most clearly pronounced in
the southern and eastern parts of Ukraine.

In terms of forest areas and timber stands, Ukraine is experiencing a shortage of

forests (on 1 January 1996, the forest resource area in Ukraine is 10.8 million
hectares, 9.4 million hectares of which were covered with forest vegetation and
percentage of forest area is 15.6%).

In Moldova forests cover 9.6% of the territory, 86% of these are planted and the
rest are steppe formations generally transformed in arable land. Natural
formations represent only 4% of the total cover. The largest forests are located
in central and western regions (Codri). Forest cover is low everywhere else.
Moldovan forests have the highest proportion of broadleaved species of any

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temperate zone country (over 99% of the growing stock of 35.3 million m3). Oak
(Quercus robur, Q. petraea and Q. rubescens) is the predominant species (52%
of area). The second most common species (26%), namely robinia (Robinia
pseudoacacia), has been introduced to stabilize poor soils. The rest covers a wide
range of other indigenous species, such as ash, beech, lime, maple, hornbeam,
birch, and poplar. The 1995 survey undertaken under the Convention of Long-
range Transboundary Air Pollution showed that 25.6% of trees were healthy,
40.4% were damaged (classes 2-4), and 1.0% were dead. 43.0 % of oaks and
27.6% of sessile oaks were affected. In comparison with 1994, the percentage
of trees showing over 25% defoliation increased. This situation can be explained
by excessive drought during the past 15 years and the effects of air pollution.
Moldovan forests are also vulnerable to insects and fungi. (Source: DEP,
National Strategic Action Programme (1995) and the Red Book for Moldova).

The human pressure upon natural resources is high and requires large funds to
protect, to make a sustainable development and to make eastern countries’
economies more efficient. Synanthropization in the Republic of Moldova and the
extensive anthropogenic activity challenged the invasion of anthropophyle
(synanthropogenic) species in degraded agrarian and natural ecosystems and
brakes the processes of natural development and restoration of natural
biocenosis.

On the other hand, over 12,000 species of plants and trees were introduced on
the territory of the Republic of Moldova. Flora of the republic's forests is
characterized by a high proportion of introduced species (38.7%) from other
floristic regions.

Concerning wildlife we can appreciate that, especially for birds in transit, the
migration channels represented by the big rivers like Prut (Romania-Moldova
border), Danube with Danube Delta, Dniestr, Dniepr, Volga, etc. may be natural
highways to spread recent biological threat of the bird flu inside the continent.

10.1.10 Water.

The Republic of Moldova as well as most of Ukraine is located in a region of

insufficient precipitation with a torrential regime and has limited water resources.
For Moldova medium and moderate droughts (respectively 70% and 90% of
normal rainfall) have been reported 40% of the time over the past 50 years;
severe droughts (less than 45% normal rainfalls) 4% of the time only (for
Moldova).

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The available overall aquatic resources in Moldova represent 6.3 billion m3 in a
typical year, 4.9 billion m3 in a dry year and 3.4 billion m3 in an extremely
droughty year. About 3.2 billion m3 of water are needed annually for all national
economic sectors and for the supply of drinking water - of which about 2 billion
m3 are used at the Moldovan Thermal Power Plant. The rest (1.2 billion m3) is
used as follows: 63% for agriculture, 15% for household water supply, 14% for
industry and 8% for building, transport and other uses. The Republic draws 56%
of its water from the Dniestr River, 16% from the Prut River, 8% from small
rivers and 20% from underground resources (these data do not include phreatic
water sources from rural regions).

Likewise, for Ukraine the retrieval from water bodies comprised 19,027 million
m3 of water in 1998, which is 6% less than in 1997. The withdrawal of
underground water was 9% less and reached 3,363 million m3.

The intake of sea water was over 790 million m3. On the whole, the share of
irreversible water use in Ukraine was 6,946 million m3 or 36% of the total
intake. From this quantity of water, 4,635 million m3 are lost in the process of its
use.

Figure 10-1 : Dynamics of water abstraction from surface and ground water systems (1992-1998)
(1,000,000 m3)

In 1998, 13,044 million m3 of water were used, which is 1,685 million m3

(11.4%) less than in 1997. The main reason of this decrease in water retrieval
and use volumes is the decline of productive activities in Ukraine. Introduction of
payment for special use of fresh water resources was one of the factors
influencing the volumes of water abstracted and used (GRID-UNEP – 1999).

184
10.1.11 Land resources.

For the best part of European former Soviet countries, land is an important
asset. Due to improper exploitation during communism different types of land
degradations are extensive.

As is shown by data released by the State Committee for Statistics of Ukraine,

the land resources of Ukraine amounted to 60.4 million hectares at the beginning
of 1999. Agricultural land covers 72% of the country’s surface, out of which 69%
is arable land, including 54.4% of tillage, 0.4% of virgin land, 1.6% of perennial
plantations, 3.8% of hayfields and 9.1% of pasturelands. A large area – that is
159,000 hectares - is occupied by radioactively contaminated arable lands, which
are not used for agricultural production, plus 161,400 hectares of deteriorated
land.

In Moldova, torrential rain affects about 85% of agricultural land, i.e. that
located on slopes, covering roughly 2 million ha. According to data from 1993,
886,000 ha, or about 25.8% of the total land area including agricultural land,
have been affected by different forms of primarily water erosion. More than
310,000 ha are considered to be eroded to a medium to high degree. The rapid
soil erosion has serious implications for the long-term sustainability of
agricultural production in Moldova, as the natural regenerative capacity of soils
on slopes is low. Moldova's soil has also some unusual chemical features, with a
high level of fluoride in the north-west, an iodine deficit in the north, and a
manganese deficit in other regions. Reportedly, these characteristics, combined
with the heavy application of mineral fertilizers including traces of heavy metals,
have led to special reactions and conditions. As a result, the humus content of
the soils in question has dropped sharply, leading to a negative balance of
nitrogen and phosphorus. Additionally, a recent study from the Centre for
Hygiene and Epidemiology shows that 1.4% out of 660 soil samples did not meet
the standards because of high nitrate (5 samples) or metal content.

10.1.12 Black Sea and Sea of Azov.

The Sea of Azov and the Black Sea are the most distant Seas from the ocean in
the world, and the surface of their catchment basin largely exceeds their own
areas. This has conditioned their extreme sensitivity to the effects of human
activity. What is more, during the last decades, there took place an explosive
development of the eutrophication processes, pollution of the sea shelf by toxic
agents, sea shore abrasion, loss of biological diversity and fish resources,
together with a considerable waste of recreational resources.

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The Azov – Black Sea Basin includes 98% of Ukrainian and Moldovan drainage
network. The catchment basin of the Sea of Azov and Black Sea covers 2.4
million km3. The coast of the Black Sea and the Sea of Azov constitutes a
considerable part of the southern borders of Ukraine. The total length of the
coastline is more than 3,000 km. The total length of the Ukrainian coastline
within the limits of the Sea of Azov and Black Sea is nearly 3,000 km, while
Romania has only 245 km.

Intensive economic development has led to considerable ecological pressure on

the ecological systems of the Black Sea and Sea of Azov. A pollution level of the
above seas exceeding the assimilating capacities of the seas’ ecological systems,
introduction of alien biological species, utilization of the natural sea resources in
a volume exceeding their potential, implementation of ecologically hazardous
technologies of sea resource development, transportation and reloading of sea
cargoes, etc., have brought about great changes in the natural conditions during
the last thirty years. Microbiological pollution of the coastal waters by the waste
of municipal enterprises often makes this water unfit for recreational use. Wave
abrasion aggravates the dangerous geological processes along the entire
seashore. One example of negative effects upon the sea environment is the
dredging and hydro-mechanical works, which are conducted in the territorial
waters and on the Black Sea shelf.

For Romania and international ecological organizations, the recent proposed

construction of the Bystroe channel in the Danube Delta is of great concern. That
may have important ecological implications. The proposed project could damage
the unique Danube Biosphere Reserve, which received UNESCO status in 1991
and is part of RAMSAR convention. Experts estimate that, if this project is
completed, the Danube Biosphere Reserve will be partially cut off. Over 1,500
hectares of land may be lost together with some forested areas.

In Ukraine another important problem of the sea coast zone is seashore erosion.
According to estimates, about 2,600 km of the coastline has experienced the
effects of erosion and washing-away of soil. Around 100 hectares of land are
washed away annually, which prevents its useful utilization. That causes a
shrinkage of territory available for town planning and tourism development and,
in some cases, negatively affects the coastline’s ecological system. The measures
to protect the seashore are fragmented and do not create a joint protection
system all along the entire Ukrainian coastline. Following the adoption of several
decrees of the government, about 150 km of the shore have been reinforced.

Same problems can be identified on Romanian shore. Also most remarkable are
the beach erosion, cliffs degradation by abrasion and even Constanţa city area
instability.

186
The most sensitive area to the anthropogenic pressure is the coastal zone of the
Black Sea and Sea of Azov, especially the port areas and river estuaries along
with the large metropolitan areas located close to the sea. A considerable
contribution to the pollution of the coastal zone of the Black Sea is made by the
industrial enterprises situated on the coast, which discharge the sewage into the
seas.

The state of the Black Sea biological resources does not show any tendency
towards an improvement. The poor economic situation in the country not only
makes any improvement impossible, but also the maintenance on a necessary
level of scientific research activities, which could monitor and forecast the
development of the state of the biological resources, and make possible the
development of new approaches in artificial sea-farming of various species of fish
in the sea industry.

10.1.13 References

Berge E., Bartnicki J., Olendrzynski K., Tsyro S.G., 1999, “Long-term trends in
emissions and transboundary transport of acidifying air pollution in Europe”, in
Journal of Environmental Management, Volume 57, Number 1, pp. 31-50 (20).

http://enrin.grida.no/htmls/moldova/soe/
http://enrin.grida.no/htmls/moldova/soe/waste/recycle.htm
http://nature.org.ua/nr98/englv/region/5_2.htm
www.un.org/esa/earthsummit/moldo-cp.htm
www.efi.fi/fine/resources/moldova.html
http://www.belgium.iom.int/STOPConference/Conference%20Papers/20%20Brug
geman%20Brussels%20IOM.19.09.02.pdf
http://www.interpol.int/Public/TechnologyCrime/CrimePrev/default.asp

187
11 EUROPEAN NEIGHBOURHOOD THEMATIC ANALYSIS

Pierre Beckouche
Yann Richard
LADYSS

11.1 The Neighbourhoods question in the EIW programme. Triad,

Globalisation, Regionalisation

How is the Neighbourhoods question related to the Europe-In-The-World

concern? In order to make it clear (even if a little too simple maybe), we can
assume that, from a geographical point of view, the world economy is going
three territorial paths. The first one is the well-known Triad, which is ongoing for
numerous decades. It is based on the long run dominance of Europe and then
Northern America, caught up by Japan and more recently by the Asian Tigers.
This view focuses on the leading transnational corporates and especially TNC of
the northern leading countries, linked by a mix of both competition and
cooperation. This view emphasizes the gap between the North and the South –
except a few Tigers.

The second one is the Globalisation view, driven by the revolution of transports
and communication and the general surrender of tariffs. In this highly accessible
world, the key-word is networks, the main territories are gateway cities. This
view emphasizes the actual or potential connection of emerging countries in the
South.

The third one is Regionalisation, due to the advantages of proximity (especially

since the rise of oil price and – maybe – the end of decreasing travel costs
trend). This view focuses on the need for re-regulate a world economy that has
been developing during the two last decades through a huge deregulation
pattern. The regional scale (i.e. Europe, Northern America, Latin America, South
Asia, Eastern Asia etc) could be a relevant scale for new public policies, due to
complementarities of concerned national economies, common environmental
stakes, shared cultural values, historical links, migratory links, and any other
assets for win-win co-development. In several of these Regional cases, a leading
economy pulls the developing countries of its neighbourhoods. The “North-South
regionalism” notion means complementarity between rich countries with a great
deal of capital, technology and know how on the one hand, and on the other
hand developing countries with large – and more and more educated – labour
forces (which are dramatically lacking in Japan or Europe for instance) and
rapidly growing markets.

188
 Of course these three paths are relevant, and certainly intermingled. The goal of
this chapter is to show that the third one – Regionalisation and Neighbourhoods
– is certainly the less known but the surging one.

Table 11-1 : The three territorial paths of the world economy

Triad Globalisation Regionalisation
long run chronology (2 modern background (1/2
time rising issue (1 decade)
centuries) century)
Need for re-regulation of the
driving idea power openness, accessibility world economy. New (possible)
scale of public policies
-revolution of mobility,
valorisation of proximity for
leadership succession in time: ‘synchronisation’ of world
driving forces both economic development and
Europe; USA ; Eastern Asia economy
policy making
diffusion of development
principles of space shaped by large firms (mix
networks polycentrism
organisation of competition and cooperation)
relevant North integration vs. South Neighbourhoods, North-South
gateway cities
territories marginalisation regionalism

The table 11-2 highlights the way one can assess Regionalisation. One can use
economic, cultural, environmental and political index. These index show:
-the convergence or divergence of structures (for instance does the level of
economic development of the Northern and the Southern shore of the
Mediterranean, converge / or diverge?)
- the links between the countries that make up a Region. Here the question is:
do exchanges within the Region grow quicker or slower than exchanges between
this Region and the rest of the world?

In the case of the European region (Espon space + surrounding countries,

including Russia and Caucasian states, Mediterranean states and Middle East),
we address here two questions: does EU economically and socially integrate its
neighbourhoods more and more, or on the contrary are we experiencing a
growing divide? Is the answer the same of the eastern and on the southern sides
of Europe?

189
 Table 11-2 : The index of regionalisation
STRUCTURES FLOWS
. Quicker increase of economic regional
exchanges (intra-zone) than at global scale
economy . Level of development: continuity rather than (inter-zones)
discontinuity . Important intra-industrial exchanges, rather
. Evolution of development : convergence rather than international division of labour (inter-
than divergence industrial exchanges)
. Complementarity rather than competition . “North-South regionalism”: South = increasing
labour forces & markets, lack of capital and
technology; North = shortage in labour forces
and markets, lot of capital and technology

. Presence of regional foreign people of the Region . Workers; students ; tourism ; retirements :
among local population Regional migrations bigger than global
culture migrations
. Diffusion of press and TV programs
environment . Common threats . Interaction of pollutions

Coordinated management of Regional public

policies . Common values goods :
. General agreements (e.g. Free Trade Areas) . justice and security
. Common architecture of education & diplomas . transports and planning
mutual recognition (e.g. “LMD”-Bologna process) . education exchanges
. Common institutions and common representation . gestion of environmental crisis, etc.

11.2 The Regional economy. West-East integration, North-South

divide

11.2.1 Structures – GDP

On the long run (half a century), disparities have not increased between the
European economy and the southern Mediterranean one. But the economic
development of this southern shore has gone badly in the very last decade. The
recent evolution of GDP – were it currant dollars or PPP – shows that the region
is experiencing a North-South divergence rather than a convergence. The 10 new
member states (NMS) are (slightly) filling the gap with Western Europe, whereas
the MEDA countries are clearly experiencing an increasing gap. The other
Mediterranean countries, that is Turkey and Israel, are in between. After a
terrible decline since the end of the 19980ies, NIS countries such as Ukraine
have been recovering a little for a couple of years. In a word, during these recent
years, the worst figures concern the MEDA countries.

190
 Table 11-3 : GDP per inhab. (PPP, constant 2000 US$)

30 000

W. Europ
25 000

20 000 Israël

15 000

10 NMS

10 000 Ukrainia

Turkey

5 000
MEDA

0
1987

1989

1991

1993

1995

1997

1999

2001

2003

Note. « Western Europe » : UE15 plus Switzerland and Norway. « 10 NMS » : new EU member states (2004).
« MEDA » (excl. West Bank and Gaza) : Morocco, Algeria, Tunisia, Egypt, Jordan, Lebanon, Syria. Source :
World Bank

Nevertheless, Southern neighbourhoods should not be considered as a derelict

area for Europe. Consolidated as one general sub-region, the Mediterranean
neighbours (i.e. Meda countries + Turkey and Israel) represent a bigger
economy than NMS’s, and almost as big as western NIS including Russia and
Ukraine (figure 11-1). This means that, in the framework of the actual and
potential North-South regionalism, the Mediterranean neighbourhoods has to be
considered as a very relevant potential economic partners for the EU.

191
 Figure 11-1 : GDP (constant 2000 b US$)

10 000

9 000

8 000

7 000
Western Europe

6 000
NMS 10

5 000
Russia + Ukraine

4 000
Medit. neighbours
(incl. Turkey and
Israel, excl. WB&G)
3 000

2 000

1 000

0
1987

1989

1991

1993

1995

1997

1999

2001

2003

Source : World Bank

11.2.2 Flows - Trade

11.2.2.1 Links grow eastward and decline southward

During the last fifteen years the conditions of economic integration in the region
have considerably increased: end of Comecon, recovery after the end of the
Yugoslavian war, Barcelona Process and Association Agreements, generalisation
of economic strategy based on international exchanges rather than on autarchy
(even in Syria). Still, is the UE commercially rather linked to its close neighbours,
or is it more and more related to remote industrial and emerging countries? Do
we really experience the consolidation of a Euromediterranean Region from
Morocco to Russia polarised by Western Europe? Or rather a commercial
geography lead by remote networks connecting the poles of the Triad?

192
The answer is both. Table 11-4 deals with EU15’s trade of goods since 1980. It
shows that almost a half of the EU15’s trade is made with “neighbours” –
“neighbours” in a wide sense, CEEC included. CEEC are more and more linked to
the Western Europe: they represented 3% of UE’s trade in the 1980s, they
represent today more than 11%. Should we add Switzerland and Norway and
Russia (since commercial partnership between EU and Russia has risen during
the last decade), what could be called the European continental integration is
clearly on the way.

Despite intense deregulation and international opening – not less than in the
central or eastern part of Europe – the southern neighbours do not show such
integration. Taken altogether (Meda countries, Middle East and Arab peninsula,
Turkey and Israel), they represent 12% of EU15’s trade today, which is not little;
but their relative weight was twice as big 25 years ago. These figures show that,
as a whole, the Region trading integration has been reducing during the 1980ies,
and has been recovering somewhat during the last decade thanks to the
commercial integration of the CEEC only.

193
 Table 11-4 : Consolidated EU15’s trade of goods (%)
----------exportation------- ---------importation------- -------export+import----
--- -- ---
1980 1995 2003 1980 1995 2003 1980 1995 2003

CEEC (a) 3,4 7,4 11,8 2,5 6,4 10,9 2,9 6,9 11,3
European Balkans 3,7 2,9 3,9 1,8 2,2 2,7 2,6 2,6 3,3
(b)
-of which Bulgaria 0,4 0,4 0,5 0,2 0,3 0,4 0,3 0,3 0,4
-of which Romania 0,9 0,7 1,3 0,7 0,6 1,1 0,8 0,6 1,2
-of which Croatia 0,0 0,7 0,7 0,0 0,3 0,3 0,0 0,5 0,5

Other Europe (c) 16,6 13,2 10,9 10,3 13,2 11,2 13,0 13,2 11,1

Σ .Europe stricto 23,7 23,4 26,7 14,6 21,9 24,8 18,5 22,7 25,7
sensu (=a+b+c)

Russia (d) 4,8 2,8 3,4 5,3 3,9 5,3 5,1 3,4 4,4
Ukraine 0,4 0,6 0,3 0,4 0,3 0,5

Turkey 1,0 2,3 2,9 0,4 1,7 2,4 0,6 2,0 2,7

Near & Middle 12,8 6,9 6,9 20,8 4,3 4,1 17,4 5,6 5,5
East(e)
-of which Israël 0,9 1,7 1,2 0,6 0,9 0,8 0,7 1,3 1,0
-of which Lebanon, 1,5 0,9 0,7 0,4 0,4 0,3 0,9 0,6 0,5
Syria & Jordan
(f)

North Africa (g) 8,1 4,5 3,4 6,3 3,9 4,2 7,1 4,2 3,8

Total Meda (=f+g) 9,7 5,4 4,1 6,6 4,3 4,5 7,9 4,8 4,3

Σ Eastern and South. approx. approx. approx

Neighbours (h) 27,0 16,9 17,2 33,0 14,1 16,4 . 30,5 15,5 16,9

North. America 15,9 19,9 24,8 20,5 21,2 16,8 18,5 20,5 20,8

Latin Am. & 8,0 7,0 5,2 7,3 6,1 5,4 7,6 6,6 5,3
Antilles

Eastern Asia 8,3 21,4 16,7 11,9 25,2 27,8 10,3 23,3 22,3
-of which Japan 2,5 5,7 4,1 5,5 10,0 6,7 4,2 7,8 5,4
-of which China (i) 2,0 5,3 6,0 2,2 6,1 10,6 2,1 5,7 8,3

Other Asia 2,1 2,5 2,2 1,2 3,9 2,7 1,6 3,2 2,5

Oceania 0,2 2,4 2,2 1,6 1,4 1,3 1,0 1,9 1,8

Africa (except North 10,5 4,5 3,7 9,3 4,7 4,1 9,8 4,6 3,9
Africa)

Grand Total 100 100 100 100 100 100 100 100 100
(a) Poland, Slovakia, Czech Rep., Hungary, Baltic States. (b) Former Yugoslavia (excl. Slovenia), Albania,
Bulgaria, Romania. (c) Switzerland, Norway, Cyprus, Malta… (d) USSR before 1995. (e) Near East (excluding
Turkey), Arabic peninsula, Iraq, Iran. (g) From Morocco to Egypt. (h) Russia, Ukraine, Turkey, Near and Middle
East (including Iraq and Arab Peninsula), North Africa. (i) including Hong Kong.
(NB: no data on Belarus and Caucasian countries in this table)
Source: Eurostat Statistical Yearbook, UE Trade 1958-2003.

194
Southward, the sole exception is Turkey; in particular Turkish exports to UE are
rapidly growing. For decades, Turkey has developed a true productive system of
small and medium sized firms, run by an active middle class. The severe
economical and financial crisis of 2000-01 has lowered the internal market. But
Turkish economy could counterbalance this difficulty by enhancing exportation
world wide, including Europe - the half of its exportation. Another positive step is
that those exportations are less and less primary agricultural or rough clothing
exportations. A decade ago, textiles, clothes and food products were the bulk of
Turkish exports to EU; today textile-clothes is still in first rank but the share of
transport equipment and automotive production items is rapidly growing. These
quite advanced industrial products are dominating EU’s exports to Turkey too;
this means that EU and Turkey have entered an intra-industrial trade that
resembles developed countries trade or “north-South regionalism” (like
US/Mexico trade for instance), rather than classical trade between developed and
developing countries.

Since 2000 (table 11-3), and except Israel of course, no other Mediterranean
country – not even Tunisia – shows such trading features. The Turkish
commercial dynamism is the only one that copes with commercial integration
between EU and its continental neighbours eastward: European Balkans and
namely Bulgaria and Romania – where a rising trade with EU seem to anticipate
the UE membership; Russia and NIS both western and Caucasian. As a whole,
Eastern neighbours have suddenly become bigger commercial partners for UE
than Southern – even including Turkey.

195
 Figure 11-2 : Goods trade (a) between consolidated EU25 and its neighbours, 2000-04
2004 2004 2004/2000
(values, evol (%),
M €) (% total) values
Island 3 612 0,2 5
Norway 86 642 4,4 18
Switzerland 136 369 6,9 1
Σ Western Europe (out of EU) 226 623 11,4 7
Bulgaria 10 709 0,5 56
Romania 32 051 1,6 76
Σ Bulgaria + Romania 42 760 2,1 71
Turkey 68 931 3,5 41
Macedonia FYR 1 721 0,1 -28
Serbia & Mont. 6 635 0,3 103
Croatia 13 688 0,7 56
Bosnia-Herz. 3 325 0,2 35
Albania 1 610 0,1 44
Σ Western Balkans 26 979 1,4 50
Russie 126 203 6,3 51
Belarus 5 287 0,3 77
Ukrainia 17 675 0,9 82
Moldavia 1 184 0,1 79
Σ Western NIS 24 146 1,2 81
Armenia 564 0,0 43
Azerbaidjan 2 404 0,1 78
Georgia 794 0,0 59
Σ Caucasian countries 3 762 0,2 68
Syria 4 884 0,2 -10
Jordan 2 209 0,1 20
Lebanon 3 435 0,2 8
Palestine 38 0,0 -53
Egypt 11 557 0,6 -1
Libya 17 073 0,9 9
Tunisia 14 298 0,7 11
Algeria 24 580 1,2 8
Morocco 15 394 0,8 10
Σ MEDA countries 93 468 4,7 7
Israel 21 334 1,1 -20
Iran 20 044 1,0 44
Iraq 3 925 0,2 -47
Seoud. Arabia 28 659 1,4 2
Kuweït 5 487 0,3 -7
Σ Middle East 58 115 2,9 5
TOTAL Europ & East.
Neighbourhoods 450 473 22,6 27
TOTAL MEDA, Israel & Middle East 172 917 8,7 2
Turkey 68 931 3,5 41
World 1 990 541 100,0 7
(a) Imports + exports. Source : Eurostat

196
Is this continental integration symmetric? Western Europe trades more and more
with European Balkans and CEEC, do the latter trade more and more with
Western Europe? The answer is yes. See figure 11-4: trade with EU increases
faster than with the rest of the world in the case of Romania, and nowadays for
Bulgaria. Eurostat says the same concerning the western Balkan countries
(former Yugoslavia and namely Croatia): 1999-2003 trade growth rate has been
higher with the EU than with the rest of the world; those countries now make
84% of their trade with the EU (Eurostat 2005). The evolution is more balanced
in the case of Turkey, which opens world wide – but all the same much more
towards EU than towards USA or even towards the Meda countries: local sub-
regionalisation is weak compared to the polarisation of the whole region by
Western Europe.

Balkans countries and CEEC have experienced a very rapid westernisation of

their trade since the end of the soviet era. They trade more and more with EU
(even though with a strong trade deficit, see fig. 5 which proves that the regional
trade integration is a positive process for European economy!), and clearly less
and less with Russia.

Meda countries have been very much polarised by Western Europe for a long
time. They still are, even if less and less in the Near East. Especially Maghreb,
these countries continue to be enormously dependant upon European markets,
with strong trade deficit and dissymmetry: MEDA countries provide EU with 7%
of its imports – but this represent more than the half of MEDA countries
exportations. EU provides these countries with 58% of their importations – but
this represent only 7% of our exportations. The Mediterranean most dependent
country upon European markets is Tunisia, which makes the three quarters of its
exportations there. Tunisia’s exportations depend more upon European markets…
than France or Germany do! In a way, one could say that Tunisia is a “European
Puerto Rico” but without the political link.

As far as the eastern neighbourhood of EU concerned, almost all the states that
belong to CIS are progressively shifting their foreign trade from an intra regional
CIS pattern to a western oriented pattern. It is obvious for the three Caucasian
countries: EU has become by far their first trade partner. Although Russia is still
a major trade partner for each one of them, its share in their external trade has
regularly decreased since the 1990s. Obviously, the progressive enlargement of
the European economic region eastward involves not only Russia but CIS as a
whole. This process is largely due to the recent enlargement of EU to the 10 new
member states which have kept economic relations with Russia and former USSR
despite their own strong commercial reorientation from East to West. Only the

197
countries of Central Asia are still keeping Russia as their first commercial partner
before EU 25 – but not all of them and certainly less and less.

Figure 11-3 : Share of EU25 and of Russia in the goods trade of the CIS (2003)

Armenia

Azerbaijan

Belarus

Georgia

Kazakhstan

Kirghizstan EU 25
Russia
Moldavia

Tadjikistan

Turkmenistan

Ukraine

Uzbekistan

0% 10% 20% 30% 40% 50% 60% 70%

Source : Eurostat

198
 Figure 11-4 : Goods trade (imports + exports), b €

Turkey

60
50
with EU15
40
rest of the world
30
with USA
20
with Medit. Basin
10
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Bulgaria

8
7
6
5 with EU15
4 rest of the world
3 with Russia
2
1
0
1994

1995

1996

1997

1998

1999

2000

2001

2002

Romania

25

20
with EU15
15
rest of the world
10
with Russia
5

0
1994
1995

1996

1997

1998

1999

2000

2001

2002

Source : Eurostat

199
 Figure 11-5 : EU Exports and imports (billion €) with :

Turkey

40
35
30
25
EU Exports
20
15 EU Imports
10
5
0
1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004
Croatia

7
6
5
4 EU Exports
3 EU Imports
2
1
0
1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Bulgaria

3 EU Exports
2 EU Imports

0
1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Romania

14
12
10
8 EU Exports
6 EU Imports
4
2
0
1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Source : Eurostat

200
 Figure 11-6 : Goods trade partners of central Europe countries and Turkey, 1993-2001
------central Europe (b) countries-- ------------------Turkey---------------
----
Importations Exportations Importations Exportations
1993- 1999- 1993- 1999- 1993- 1999- 1993- 1999-
Trading partners:
1994 2000-01 1994 2000-01 1994 2000-01 1994 2000-01
Western Europe (a) 59,6 62,4 59,9 71,5 49,5 51,2 50,1 53,7
Central Europe (b) 8,3 9,2 10,5 11,3 1,3 1,0 2,2 1,6
Baltic States 0,4 0,3 0,5 1,1 0,1 0,2 0,1 0,2
European Balkans (c) 1,1 1,2 2,2 3,2 2,1 2,2 2,5 3,3
Russia 9,8 7,8 5,4 1,8 4,9 7,1 4,0 2,5
West. & North. NIS (d) 1,4 1,1 1,7 1,7 2,2 2,3 1,3 2,3
Maghreb (e) 0,2 0,2 0,6 0,2 1,5 4,0 3,0 2,9
Near East (f) & Turkey 0,5 0,7 1,8 1,0 1,3 2,3 5,7 6,4
Middle East (g) 0,5 0,0 0,5 0,2 8,1 3,6 7,0 2,7
Σ region 81,8 83,1 83,2 92,2 70,9 74,0 75,8 75,6

North. America 3,8 4,2 3,1 3,7 11,6 8,0 8,0 10,9
Latin America 1,2 1,0 0,9 0,6 1,6 1,1 0,6 1,0
Africa (others) 0,8 0,4 0,9 0,3 1,1 1,1 0,7 1,1
Asia (others) 6,2 10,5 4,1 2,5 13,0 12,5 13,2 6,3
Oceania 0,1 0,1 0,2 0,1 1,1 0,5 0,2 0,4

World 100,0 100,0 100,0 100,0 100,0 100,0 100,0 100,0

How to read this table : at the beginning of the 1990ies (average of 1993 and 1994), 49,5% of Turkey’s imports
came from western Europe; at the beginning of this century (average 1999-2000-2001), the number was 51,2%.
(a) UE15 plus Switzerland and Norway
(b) Czech Republic, Slovakia, Hungary, Poland
(c) Albania, former Yugoslavia, Romania, Bulgaria
(d) Belarus, Ukraine, Moldavia, Caucasian countries
(e) Morocco, Algeria, Tunisia, Libya, Malta
(f) Cyprus, Lebanon, Syria, Jordan, Israel, Palestine, Egypt
(g) Iran, Iraq, Saudi Arabia, Kuwait.
Source : OECD

201
Map 11-1 : Geography of Turkish goods trade: a strong euromediterranean feature

202
 11.2.2.2 Mapping the bilateral intensity of trade

The value of the external trade of goods is not sufficient to draw a

comprehensive picture of economic regionalization, because it is biased by
parameters such as the economic (the GDP) or the demographic size of
commercial partners. The bigger the partners, the more their trade exchanges
are likely to be massive. It is empirically easy to understand that Russia makes
more trade, in absolute terms, with Germany than with Estonia or Slovakia.

The coefficient of relative bilateral intensity of trade is a relevant way to measure

the real trade proximity between two commercial partners. It compares the
observed bilateral flows between them with the theoretical flows that reflect their
overall capacity of trade (Freudenberg 2005). It is not per se better than the
value of exchanges; it must be combined with it to have a more detailed view of
what goes on between EU and its neighbours. The maps give a representation of
trade between 11 countries located in the neighbourhood of EU. Each map
combines two variables: the volume of observed trade flows in absolute terms in
2004, and the coefficient of relative bilateral intensity of trade.

These maps show a clear sub-regional phenomenon: the neighbouring countries

are often commercially linked to the close parts of the Espon territory. They
highlight a Russian-East European area, a Western Mediterranean regional area -
but in the Eastern Mediterranean, trade intensity does not really link neighbours
to the Espon territory. Despite the decrease of transport costs which has made
possible a strong process of globalization, the distance between countries still
plays a major role in the geography of trade flows. Other factors such as
economic structures (and consequently economic specializations) and differences
in levels of economic development also play their part in this geography of trade
intensity. At last, the legacy of former colonial ties is still visible between France
and Maghreb, Russia and former Soviet Republics, etc.

The CIS countries have a high intensity of exchanges with other CIS countries
and secondarily with CEE Countries. Despite the outbreak of the Soviet Union
and of the Socialist bloc and despite a strong process of commercial polarization
by Western Europe, CIS can still be considered as a commercial region based on
a relatively high trade bilateral intensity between its members. Besides, Russia,
Ukraine and Belarus have a higher trade bilateral intensity with CEE Countries
than with Western Europe.

203
Map 11-2 : Exchanges of goods and bilateral intensity of trade of Belarus with the Euromed region
in 2004.

Map 11-3 : Exchanges of goods and bilateral intensity of trade of Russia with the Euromed region
in 2004

204
 Map 11-4 : Exchanges of goods and bilateral intensity of trade of Ukraine with the Euromed region
in 2004.

The Maghreb countries have a high intensity of exchange with the Mediterranean
members of EU (France, Spain, Italy).

Map 11-5 : Exchanges of goods and bilateral intensity of trade of Algeria with the Euromed region
in 2004.

205
 Map 11-6 : Exchanges of goods and bilateral intensity of trade of Morocco with the Euromed
region in 2004.

Map 11-7 : Exchanges of goods and bilateral intensity of trade of Tunisia with the Euromed region
in 2004.

The South East Mediterranean countries have a relatively low intensity of

exchanges with EU and a high intensity with the countries which belong to the

206
Near and the Middle East. Even Turkey has a higher intensity of exchanges with
East Mediterranean and Central Asian countries than with Western Europe.
Map 11-8 : Exchanges of goods and bilateral intensity of trade of Egypt with the
Euromed region in 2004.

Map 11-9 : Exchanges of goods and bilateral intensity of trade of Jordan with the Euromed region
in 2004.

207
 Map 11-10 : Exchanges of goods and bilateral intensity of trade of Lebanon with the Euromed
region in 2004.

Map 11-11 : Exchanges of goods and bilateral intensity of trade of Turkey with the Euromed region
in 2004.

208
Contrarily to what happens inside the CIS region, the Mediterranean neighbours
often show a surprisingly low intensity of exchanges between them, especially
between those of the western and those of the eastern Mediterranean basin. To
this respect, the case of Turkey is rather exceptional because it shows a
relatively high coefficient with a majority of South and East Mediterranean
countries.

Thanks to these maps, one can also distinguish three types of countries inside
the ESPON space. European Mediterranean countries have a relatively high
intensity of exchanges with Mediterranean neighbours. Maps of trade bilateral
intensity of France, Italy and Spain would certainly show higher coefficients with
Maghreb countries than with other EU members. CEE Countries and Finland show
a high intensity of exchanges with one or several CIS countries. Northern and
Scandinavian countries have a relatively low intensity of exchanges with both
East and South neighbour countries.

11.2.2.3 Flows - FDI

FDI draw the same geography of integration eastward and divide southward.
During the last decade (1993-2003), Maghreb, Egypt, Syria, Lebanon and Jordan
altogether did not receive more foreign direct investments than the sole Israel ;
CEEC received for times as much as them16. Syria, Algeria and Egypt got
particularly few FDI. It is a fact that the Mediterranean attracts more foreign
capital since the mid 1990s and the first Association Agreements, but much less
than Eastern Europe. Furthermore, investors now reach new eastern countries in
the region: Croatia, Macedonia FYR and Bulgaria, because the cost of labour is
cheaper than in NMS and because they will be one day member of the EU; also
Georgia and Azerbaijan (because of oil of course in the latter); even Ukraine
attracts proportionally more FDI than the Mediterranean neighbours – but it is
true that the country remains unstable and that a important part of the FDI
comes from Russia or from Ukrainian oligarchs who use international network as
a laundering tool. Last, investors say that former Yugoslavia (Serbia and Bosnia)
will be a relevant target when stabilised. EU has already spent a great deal of
money for this stabilisation, with no doubt this part of Europe will quite soon be
in the influence of western European investors.

16
In some cases this foreign investment might be considered as too high. In Hungary for
instance, 45% of industrial jobs, the three quarters of exports and of R&D expenditures are made
by local subsidies of foreign companies. On the other hand, it is well known that Ireland, which has
been hosting a great deal of FDI, has also managed to develop its economy (infrastructures,
training…).

209
The annual average FDI during the years 2002-2003-2004 in Meda countries was
9 billions dollars, whereas it was 18 in the CEEC, and 18 in the sole Mexico
(mainly from United States and Canada)! Many criteria (role of EU markets for
the Mediterranean economies, migrations of workers, students or tourists,
cultural links through TV programs, common environmental threats) show the
strong integration of the two shores of the Mediterranean, but indeed the key
figure about FDI attraction hampers this view. There is not yet a trans-
Mediterranean productive system.

It has to be added though, that the very recent years show a growing attraction
of Meda countries for foreign investors. The ANIMA report (Saint Laurent 2006)
says that the FDI there would have jumped to 40 billions dollars in 2005. But (i)
the bulk of these investors come form the Gulf oil countries, and (ii) the sectors
in which they invest still belong to the classical rent economy sectors such as
real estates, tourism, or privatised public services. Of course the ongoing surge
of Algerian financial resources thanks to the booming oil price, could contribute
to this new Meda FDI feature; but until today, one can say that the Meda
countries are highly dependent upon western European markets and investors,
but are not significant partners for European exports and investments.

The figure 11-8 draws the geography of several Espon countries’ investment
abroad. What is striking in the case of Spain, is that this Mediterranean country
invests a very low amount of FDI in Meda countries (the pattern would be the
same for France or Italy). In the Spanish case, the share of Latin America is
high, although the crise of the Argentine economy has considerably reduced the
huge Spanish invesment there since 2000. Like in all the other Espon examples
showned here, the bulk of FDI are made in other Espon countries, especially in
Western Europe. The Spanish invest more in CEEC than in the close Meda
countries, despite a very recent rush to Morocco.

Germans invest essentially in other European countries and in Northern America

(including Mexico: as it is well known now, since the Alena Agreement investors
regard Mexico as a “North American country”). The part of CEEC in the German
FDI is quite relevant, especially for the central European countries which depend
quite a lot on German investments. Meda countries are insignificant.

The feature is quite alike for Dutch, Swedish and Finish investment. For all these
countries, CEEC are quite significant, although much less than Western Europe or
North America. For all these countries, Meda is insignificant. In a word, the CEE
Countries benefit from the investments abroad of both close EU15 countries
(Germany, Sweden, Finland) and remote EU15 countries (Spain, but also France,
Italy...). The Southern neighbours benefit from neither. This make a striking
difference with the American region and with the East Asian region: whereas

210
United States and Canada invest very significantly in the developing countries of
their region (Central, Caribbean and South America); whereas Japan and
nowadays South Korea and Taiwan invest in China and in the ASEAN countries,
the European countries do not invest in the developing countries of their regional
neighbourhood.

211
 Figure 11-7 : Foreign Direct Investment (inflows) % GDP

6,0
W.Europe

5,0

4,0

3,0

10 NMS
2,0

MEDA

1,0

Turkey
Ukrainia
0,0
1987

1989

1991

1993

1995

1997

1999

2001

2003
b$:
25

20

15

10

10 NMS
5
Isr.
MEDA
Turk.
Ukr.
0
1987

1989

1991

1993

1995

1997

1999

2001

2003

Note. « W. Europe » : UE15 + Switzerland & Norway (Luxembourg excluded); « 10 NMS » : ten new member
states, Malta excluded. « MEDA » (excl. Gaza & West Bank) : Morocco, Algeria, Tunisia, Egypt, Jordan,
Lebanon, Syria. Source : World Bank.

212
 Figure 11-8 : Geography of FDI of ESPON countries in the neighbourhood Spanish investments in
the neighbourhood (flows)
Destination of Spanish FDI outward flows Variation of Spanish FDI outward flows (1999-
(Σ 1999-2004) 2004*)

% of Spanish FDI, & % of the receiving countries’ % of total Spanish FDI, and € per receiving
GDP (2003) countries’ inhab. (2003)

Table 11-5 : Spanish FDI flows abroad, by geographical destination (1999-2004)

-----------------total amounts----------------- -------------weight in the world total-------------
b €, years b €, years %, period %, period
1999-2000-01 2002-03-04 evol (%) 1999-00-01 2002-03-04 evol (pts),
Regions (a) (b) (b)/(a) (a) (b) (b)-(a)
Western Europe 72,2 81,4 13 45,6 66,3 20,8
CEE Countries 1,7 3,1 85 1,1 2,6 1,5
New Independent States 0,1 0,3 355 0,0 0,2 0,2
Turkey 0,1 0,1 -40 0,1 0,1 0,0
MED Countries 0,4 2,0 440 0,2 1,6 1,4
Middle East Countries 0,0 0,0 ns 0,0 0,0 0,0
Subsaharian Africa 0,1 0,5 333 0,1 0,4 0,4
North America, Mexico 18,0 13,3 -26 11,4 10,9 -0,5
Latin America 61,3 17,8 -71 38,7 14,5 -24,2
Southern Asia 0,0 0,1 191 0,0 0,1 0,1
Eastern Asia 2,1 1,7 -16 1,3 1,4 0,1
Oceania 0,2 1,3 711 0,1 1,1 1,0
Offshore places 2,2 0,9 -57 1,4 0,8 -0,6
World 158,3 122,7 -23 100,0 100,0 0,0
Source : Unctad.
Notes. CEE Countries : Bosnia, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Poland, Roumania,
Serbia and Montenegro, Slovakia, Slovenia. Med Countries : Algeria, Cyprus, Egypt, Israel, Lebanon, Libya, Malta, Morocco, Syria,
Tunisia. Middle East: Bahrain, Iran, Koweït, Oman, Qatar, Saudi Arabia, United Arab Emirates.

213
Figure 11-9 : Geography of FDI of ESPON countries in the neighbourhood German
investments in the neighbourhood (stock)
Destination of German FDI outward stock Variation of German FDI outward stock (1994-
(2003) 2003*)

% of German FDI, & % of the receiving countries’ % of total German FDI, and € per receiving
GDP 2003) countries’ inhab. (2003)

Table 11-6 : German FDI stock abroad, by geographical destination (1994-2003)

---annual average (b €)--- weight in the world total
1994-1998 1999-2003 evol (%) % evol (points)
Regions: (a) (b) (b) / (a) (b) (b) - (a)

Western Europe 133,1 273,4 105 45,2 -9,9

CEE Countries 9,1 30,1 229 5,0 1,2
Med Countries 0,8 1,7 103 0,3 -0,1
Turkey 0,6 1,7 164 0,3 0,0
New Independent States 0,6 2,3 267 0,4 0,1
Middle East Countries 0,2 0,4 120 0,1 0,0
Subsaharian Africa 1,8 3,1 70 0,5 -0,2
North America, Mexico 67,3 233,1 246 38,5 10,7
Latin America 11,1 11,7 5 1,9 -2,7
Southern Asia 2,4 6,6 179 1,1 0,1
Eastern Asia 9,2 26,3 187 4,3 0,6
Oceania 2,7 6,7 152 1,1 0,0
Offshore Places 2,7 6,4 136 1,1 -0,1
World 241,7 604,8 150 100,0 0,0
Source: Unctad. Notes: see table 11-5

214
 Figure 11-10 : Geography of FDI of ESPON countries in the neighbourhood. Dutch investments in
the neighbourhood (stock)
Variation of Dutch FDI outward stock (1994-
Destination of Dutch FDI outward stock (2003) 2003)

% of total Dutch FDI, and % of the receiving % of total Dutch FDI, and € per receiving countries’
countries’ GDP (2003) (2003) inhab.

Figure 11-11 : Dutch FDI stock abroad, by geographical destination (1994-2003)

--- annual average (b €) --- weight out of world total
1994-1998 1999-2003 evol (%) evol (points)
Regions: (a) (b) (b) / (a) % (b) (b) - (a)

Western Europe 84,0 207,3 147 58,3 3,7

CEE Countries 2,8 10,2 262 2,9 1,0
Med Countries 0,6 1,5 138 0,4 0,0
Turkey 0,4 1,1 146 0,3 0,0
New Independent States 0,3 2,1 534 0,6 0,4
Middle East Countries 0,4 1,0 170 0,3 0,0
Subsaharian Africa 1,1 2,8 154 0,8 0,1
North America, Mexico 41,4 89,6 116 25,2 -1,7
Latin America 4,7 8,6 82 2,4 -0,6
Southern Asia 1,8 4,0 114 1,1 -0,1
Eastern Asia 7,0 13,6 94 3,8 -0,7
Oceania 1,6 4,9 212 1,4 0,4
Offshore Places 5,4 3,0 -45 0,8 -2,7
World 154,0 355,8 131 100,0 0,0
Source: Unctad. Notes: see table 11-5

215
Figure 11-12 : Geography of FDI of ESPON countries in the neighbourhood Swedish
investments in the neighbourhood (stock)

% of total Swedish FDI, & % of the receiving

Destination of Swedish FDI outward stock (2003) countries’ GDP (2003)

Variation of Swedish FDI outward stock (1994- % of total Swedish FDI, and € per receiving
2003) countries’ inhab. (2003)

Table 11-7 : Swedish FDI stock abroad, by geographical destination (1994-2003)

--- annual average (b €) --- weight out of world total
1994-1998 1999-2003 evol (%) % evol (points)
Regions: (a) (b) (b) / (a) (b) (b) - (a)

Western Europe 40,9 87,2 113 69,6 0,2

CEE Countries 0,6 4,2 592 3,4 2,3
Med Countries … 1,0 .. 0,2 ..
Turkey … 1,0 .. 0,2 ..
New Independent States 0,0 0,8 .. 0,7 0,7
Middle East Countries … … .. .. ..
Subsaharian Africa … … .. .. ..
North America, Mexico 10,0 24,9 150 19,9 2,9
Latin America 1,6 2,3 38 1,8 -1,0
Southern Asia 0,6 0,5 -21 0,4 -0,7
Eastern Asia 0,8 1,3 69 1,1 -0,3
Oceania 0,5 0,8 40 0,6 -0,3
Offshore Places 0,5 0,7 46 0,6 -0,3
World 58,9 125,3 113 100,0 0,0
Source: Unctad. Notes: see table 11-5

216
 Figure 11-13 : Geography of FDI of ESPON countries in the neighbourhood. Finish investments in
the neighbourhood (stock)
Variation of Finish FDI outward stock (1994-2002
Destination of Finish FDI outward stock (2002) *)

% of total Finish FDI, and % of the receiving % of total Finish FDI, and € per receiving countries’
countries’ GDP (2003) inhab.(2003)

Table 11-8 : Finish FDI stock abroad, by geographical destination (1994-2002)

annual average (b €) weight out of world total
1994-1998 1999-2002 evol (%) evol (points)
Regions: (a) (b) (b) / (a) % (b) (b) - (a)
Western Europe 11,77 41,66 254 79,4 4,4
CEE Countries 0,08 1,34 ns 2,6 2,1
Med Countries .. 0,07 .. 0,1 ..
Turkey 0,02 0,01 -51 0,0 -0,1
New Independent States 0,04 0,33 ns 0,6 0,3
Middle East Countries .. 0,01 0,0 ..
Subsaharian Africa 0,01 0,04 ns 0,1 0,0
North America, Mexico 2,81 6,87 145 13,1 -4,8
Latin America 0,22 0,48 115 0,9 -0,5
Southern Asia 0,08 0,19 ns 0,4 -0,1
Eastern Asia 0,20 1,14 474 2,2 0,9
Oceania 0,07 0,22 207 0,4 0,0
Offshore Places .. .. .. .. ..
World 15,70 52,48 234 100,0 0,0
Source: Unctad. Notes : see table 11-5

217
The figure 11-15 shows how highly European neighbours depend on western
European FDI. The two-thirds of FDI in Tunisia, Estonia or Bulgaria, three-
quarters in Poland or Slovenia come from Western Europe. It is less true in
Russia and Algeria where the US investors play a bigger role (in oil industry can
one imagine, but in both case inflows of FDI remains very low). As a whole, our
neighbours depend incomparably more on European investors than on American.
Another outcome of these figures is the noticeable emerging role of regional or
sub-regional investors who are not western European: Cyprus financial place is a
quite important investor in Bulgaria or Russia, Egyptian, Saudi and Kuwait (which
numbers would much higher for 2005 data) investors in Tunisia and Algeria. A
last striking thing is the very small and declining role of Russia among investors
in Estonia as well as in all the other countries of Central and Eastern Europe. The
only European countries where Russian plays a significant role among foreign
investors are Belarus and Ukraine.

218
 Figure 11-14 : Inflows of FDI, breakdown by geographical origin

Algeria Estonia

100% 100%
90% 90%
80% 80% others
70% others 70% Russia
60% 60%
Egypt Latvia+Lith.
50% 50%
North America Cyprus
40% 40%
30% Western Europe 30% North America
20% 20% Western Europe
10% 10%
0% 0%

1994

1996

1998

2000

2002
1994

1996

1998

2000

2002

Tunisia Poland

100% 100%
90% 90%
80% 80%
70% others 70%
60% 60% others
Kuw ait,S.Arabia
50% 50% North America
40% North America 40% Western Europe
30% Western Europe 30%
20% 20%
10% 10%
0% 0%
1994

1996

1998

2000

2002
1994

1996

1998

2000

2002

Russia Bulgaria

100% 100%
90% 90% others
80% 80%
S.Korea
70% others 70%
60% 60% Russia
Cyprus
50% 50% Turkey
North America 40%
40% Cyprus
30% Western Europe 30%
20% Caribbean
20%
10% 10% North America
0% 0% Western Europe
1994

1996

1998

2000

2002
1994

1996

1998

2000

2002

Source : Unctad

219
Figure 11-16 shows another process of sub-regional integration: Slovenia has
recovered as a financial place for the whole former Yugoslavian space, where it
invests the bulk of its FDI abroad.

Figure 11-15 : Stocks of FDI in and out of Slovenia

Stocks in Slovenia

100%

80%

60% others
former Yugoslavia
North America
40%
Western Europe

20%

0%
1994 1995 1996 1997 1998 1999 2000

Sloven stocks abroad

100%

90%

80%

70%
others
60% fomer Yugoslavia
50% Liberia

40% North America

Western Europe
30%

20%

10%

0%
1994 1995 1996 1997 1998 1999 2000

Source : Unctad

220
11.2.3 Flows – Public aid

11.2.3.1 Where does the European official development assistance go?

EU, that is to say European Union members together with the European
Commission, is the first donor of Official Development Assistance to developing
countries. The aid delivered by the EU 15 members almost matched the aid
distributed by the United States in the 1960 and the beginning of he 1970s.
Since then, the gap between these two donors has widened. In 2004, the aid
really disbursed by the EU 15 members and the European Commission together
represented more than 42 % of the total aid disbursed by all the donors in the
world, 43 % in 2003, 42.5 % in 2002, 45 % in 2001 and 44 % in 2000. This –
slight – decrease in relative terms, is counterbalanced by the absolute terms,
since the total amount of the aid flows disbursed have grown up from 53.300
billion dollars in 2000 to 72 million in 2004.

The major donors official development assistance since 1985

90000
80000
Million dollars (2003 prices)

70000

60000 All donors

UE*
50000
US
40000
Japan
30000 Arabs**
20000

10000

0
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

Although EU is by far the first donor, its official aid is not harmoniously
distributed. The table 11-9 shows the share of each important OECD member in
the total aid disbursed in six developing regions. This document can be
interpreted in two different ways. It shows where EU (EU 15 members +
European Commission) is the more important donor in percentage terms. EU is
the first donor in almost all the receiving regions, except in Oceania and Eastern
Asia, where Japan is the first one. The status of EU as first donor is mostly
obvious in sub-Saharan Africa, in Eastern Europe (CEE, NIS and Balkan countries
together) and secondarily in Latin America. It also shows that EU gives the most
important amount of aid in absolute terms in sub-Saharan Africa, and secondarily

221
in Central and Southern Asia and in Northern Africa and in Near and Middle East.
The aid sent to the neighbourhood (clusters 1 and 2) represented only 23.5 % of
the total aid disbursed in 2002 and 2003.

Table 11-9 : The official development assistance disbursed by the main donors in the world (2002-
03, Million constant US dollar, 2003 prices)
1 2 3 4 5 6
Japan 252 630 932,4 118,4 3011,4 6615
Etats-Unis 1213,8 3559,82 5048,4 2410,9 2831,6 1100,3
Eur Commission 1153,7 1048,28 2900,92 540,62 613,14 336,24
EU 15 membres 3338,28 3465,37 17986,63 4180,39 4756,71 3560,96
Other OECD countries 657,7 463 222 643,8 1000,3 1544
Source: OECD, DAC base.

The maps (11-12 to 11-15) show dramatic difference in the distribution of aid
disbursed by the main donors. The two first maps show surprising differences
between the geography of aid delivered by the European Commission and the
one delivered by the EU members, the latter being largely higher than the former
(roughly 7.2 and 23.3 million dollars in 2004). The official aid of the European
commission is very much focused on certain regions. It is clearly oriented
towards the CEE Countries, Turkey and Palestinian Territories. It shows that the
European Commission makes special efforts towards the neighbourhood, and
secondarily to sub-Saharan Africa. The aid disbursed by the EU members does
not show the same patterns at all. The CEE Countries also receive huge amounts
of aid. But the aid is geographically better balanced than in the previous case,
although some countries of southern Africa received significantly more during the
last period. Contrarily to the aid of the European Commission, the neighbourhood
is not particularly pointed by the aid of the EU members. Among other factors,
this situation is mainly due to the existence of strong relations between certain
European countries and their former colonies (Latin America for Spain, Africa for
UK, Belgium and France…). The geographical pattern of the aid disbursed by the
United States is quite different. This map highlights the concentration of the US
aid on a few regions: Central America and the northern part of Southern
America, Near and Middle East, Southern Asia, Eastern and Central Africa. The
importance of Middle East is reinforced on the map by the aid disbursed in Iraq
consequently to the war against Saddam Hussein. It shows to which extent the
United States are involved in the aid towards Mediterranean countries such as
Jordan, Palestinian Authority, Lebanon, Egypt and so on. The aid delivered by
Japan is more oriented to countries of South, South-Eastern and Eastern Asia.
In this case, the regional pattern is much more obvious than in the cases of USA
and EU members: Africa and Latin America are clearly left to other donors.

222
Map 11-12 : Geographical breakdown of European Commission’s official development assistance
from 2001 to 2004.

Map 11-13 : Geographical breakdown of EU 15 members’ official development assistance from

2001 to 2004.

223
 Map 11-14 : Geographical breakdown of United States’ official development assistance from 2001
to 2004.

Map 11-15 : Geographical breakdown of Japan’s official development assistance from 2001 to 2004.

224
 11.2.3.2 What is the evolution of the European aid in the
neighbourhood?

In the neighbourhood, the breakdown of EU’s official assistance has undergone

dramatic evolutions since the 1990s. The graph in the volume 1 (graph n°XX,
volume 1, page XX) shows a rapid increase of the aid disbursed in the CEE
Countries by the European Commission. This increase is due to the
implementation of various development financial programs such as Phare, Ispa,
Sapard. All these programs aimed at facilitating the structural reforms of post
socialist countries in order to help them on their way to reach the EU member
status. These programs still exist nowadays, although those countries are
already or will soon be members, but they are gradually stopped and replaced by
structural funds.

The graph shows that the growing importance given to CEE Countries by the
European Commission, whose official aid reaches the same amount of money as
in the rest of the world, is unique. The other neighbours of EU have not enjoyed
such an aid increase, except for the Western Balkans. This growing gap between
the CEE Countries and the South and East Mediterranean neighbours is worrying
because, in the same time, the flows of foreign direct investment have remained
tragically low. Such a lack of international financial flows is not that harmful for
oil and gas producers such as Algeria, but it is harmful to other countries without
such resources. The financial base of the MEDA program is not sufficient at all.
Besides, the aid flows sent to CIS countries have also stayed very low despite
the implementation of the TACIS program. Such aid is not that vital for the
Russian Federation, thanks to oil and gas exports, but it is a major subject of
concern for other countries such as Ukraine, Moldova, Armenia or Georgia which
do not export such primary resources.

The aid disbursed by the EU members does not show the same pattern. Although
EU members give more money than the Commission to the neighbour countries
in absolute terms, the share of the neighbourhood in the total aid disbursed by
them in the world is much weaker than in the Commission’s case.

225
 11.2.3.3 What is the weight of Europe as an assistance donor in the
neighbourhood, in comparison with other donors?

There are two methods to present the geographical distribution of aid flows in
the neighbourhood: in absolute terms and in dollars per inhabitant. In absolute
terms, the list of major receivers of aid development has changed since the
beginning of the 1990s (map 11-16). The countries of the Balkans and of Central
and Eastern Europe received small amounts of assistance in the first half of the
1990s. Their share has even sharply increased throughout the whole period up to
2004. The amounts received by CIS countries have either increased (Caucasian
countries) or decreased (Russian Federation, Ukraine, Central Asia). Apart from
Iraq the amounts received by Middle East (Egypt, Palestinian Authority, etc.) and
North Africa have also decreased. In the same time, those received by Sahelian
countries remained stable.

In dollars per capita (map 11-17), the top list of receiving countries is not quite
the same. The two following maps allow to qualify what is said above about the
weakness of aid flows oriented to Northern Africa compared to Central and
Eastern Europe. The major receivers are countries of the Middle East, Western
Balkans and some countries of Central and Eastern Europe and Caucasus. The
maps show that the gap between Northern Africa and central Europe is not that
wide. There are doubtlessly huge difference between the Western Balkans and
Northern Africa. But Morocco, Tunisia and Egypt have received roughly the same
amounts of dollar per inhabitant as many CEE Countries.

226
Map 11-16 : Total net official development assistance to the EU neighbourhood from 2001 to 2004.

Map 11-17 : Net official development assistance per inhabitant in the EU neighbourhood from 2001
to 2004.

227
The share of EU (map 11-18 & 11-19) in the flows oriented to the neighbourhood
of EU 15 varies a lot. It is not surprising that its share is higher in the CEE
countries, which are no more neighbour countries since they are full members),
in the Balkans and in the Maghreb countries. But its share is lower in the Near
and Middle East. Besides, one can notice several evolutions since 1990:
- A slight but regular decrease of the share of EU (EU 15 + European
Commission) in Northern Africa.
- A significant decrease in the Near and Middle East and in the CIS.
- A relative stability in the Western Balkans where the reconstruction and the
financial support of fragile economies is largely supported by EU (CARDS
programme and other financial assistance).

Meanwhile, the Near and Middle East receives more development assistance from
the United States than from the EU (map 11-21). US assistance is very much
focused toward a few countries. In absolute terms, it is concentrated in Israel,
Iraq, Jordan and Egypt. In percentage terms, it dominates in Israel, Jordan, Iraq
and also in Russia. Such a geographical distribution is not really traditional. Only
Israel received significant amounts of development assistance in the 1990s while
the other countries did not. The recent increase in Iraq is due to the
reconstruction of the country after the war. Besides, it is clear that Turkey is
much more supported by EU than by the United States.

At last, the aid disbursed by the Arab countries (map 11-22) and development
agencies is very much focused on the Middle East (Arabic peninsula), in the East
Mediterranean (Palestinian territories, Turkey, etc.). Generally speaking, their
share on the assistance is not dominant but significant in many countries located
in Central Asia, in the Caucasus, in Northern Africa and even in the Balkans
(Albania, Bosnia) where the Muslim populations are in majority.

228
Map 11-18 : Net official development assistance to the EU neighbourhood and share of the EU
(Commission + EU 15 members) from 1991 to 1995.

Map 11-19 : Net official development assistance to the EU neighbourhood and share of the EU
(Commission + EU 15 members) from 1996 to 2000.

Map 11-20 : Net official development assistance to the EU neighbourhood and share of the EU
(Commission + EU 15 members) from 2001 to 2004.

229
 Map 11-21 : Official development assistance to the EU neighbourhood and share of the USA from
2001 to 2004.

Map 11-22 : Official development assistance to the EU neighbourhood and share of the Arab
countries and Arab agencies from 2001 to 2004.

11.2.4 Flows - Workers remittances

Workers remittances constitute a huge amount of financial flows (hundreds of

annual billions dollars worldwide). OECD and the World Bank have recently
created a working group to study these flows, which have several advantages for
the developing countries: (i) they are often bigger than public international
subsidies, and sometimes than the FDI inflows; (ii) they show quite stable, which
is accurate for development strategies; (iii) they are bottom up (individual
workers send money to their individual family), which prevents from corruption
or bad governance and is good for local projects.

The region entails several of the largest beneficiaries of these flows in the world:
Jordan, Morocco, then Tunisia, Lebanon... The numbers have been decreasing in
the European countries that used to be emigrant countries: see the case of

230
Portugal and Malta for instance in fig. XX. They show quite stable and high in the
southern neighbouring: for Jordan, Morocco and Tunisia, remittances are some
sort of a “build in” component of development. It used to be the case in Egypt,
but the return of the enormous mass of migrant workers from Libya and the Gulf
since a decade has lowered this financial manna. The most erratic evolution in
the one of Lebanon, whose diaspora, that boomed during the civil war,
constitutes along with the banking sector the main source of national revenues.

Remittances are useful revenues, but they are in fact a mixed blessing. In the
case of countries that depend highly – and more and more in the case of Egypt
for instance – on rent economy, remittances are a part of the difficulty. Many
Arabic countries hardly make profits, they rely on rent revenues, internally
(urban land and real estates revenues) and internationally (remittances, tourism,
oil, Suez Canal’s fees for Egypt). The WB report on development in the Arab
world (World Bank 2004) criticizes that this rent economy runs the bulk of
relations between Europe and its southern neighbours.

Turkey shows another profile: the share of remittances in the GDP has been
declining since the end of the 1990ies, thanks to the overall economic
development (growth of GDP) and to the rise of a true productive system,
generating profits rather than rent incomes. That is also the path followed by
CEEC by the way (see Poland).

Some new players appear in the south-eastern neighbouring: Albania after the
country was opened a decade ago, which provoked a soaring emigration to
Greece (that would host today almost a million Albanese?); Moldavia since 2000,
and Serbia too since the middle of the 1990ies (linked to a new emigration?). On
the contrary Bosnians seem to have returned to their country, and reduce
remittances. Much work is still to be done on this linked remittances and
migration regional geography.

231
 Table 11-10 : Workers’ remittances (current $), in % of the GDP

35,0

30,0

25,0

20,0 Portugal
EU Monetary
15,0 Malta

10,0

5,0

0,0
1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999
2001

2003
35,0

30,0

25,0 Jordan
Morocco
20,0
Lebanon

15,0 Tunisia
Egypt Arab R.
10,0 Turkey

5,0

0,0
1975

1977

1979

1981

1983

1985

1987

1989

1991
1993

1995

1997

1999

2001

2003

35,0

30,0

25,0 Serbia & M.

Albania
20,0
Bosnia-H.

15,0 Moldova
Georgia
10,0 Poland

5,0

0,0
1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

Source: Word Bank

232
11.2.5 Flows – Tourism

Tourism flows show the quite high degree of regional integration. The countries
of the region make roughly 90% of their tourism exchanges within the region
(fig. XX). Transmediterranean flows have somewhat decreased since 2001
09/11, but they have almost recovered, and the rise of Turkish destinations has
largely counterbalanced these Mediterranean losses. Table 11-11 gives the
number for the arrivals in Egypt: 52 tourists out of 100 who arrive in Egypt,
come from Western Europe, 4 from the CEEC, 9 from the NIS, 13 from the Meda
countries and Turkey, 10 from the Middle East. Very few indeed – and less and
less – come from other regions (3 from Northern America, 4 from Asia, see
figure 11-17 too). Undoubtedly, tourism mobility is growing in the
euromediterranean region (that is Espon + neighbours) as a whole. Of course
tourism is only a peculiar index of mobility. But it clearly demonstrates that this
growing mobility is a strong component of the regional pattern.

Table 11-11 : Destination (Germans, Spanish) and origin (Egypt) of tourists, %

From Germany From Spain to Egypt
ann. average 2001- ann. average 2001-
04 04 ann. average 2001-03

Western Europe 77,4 84,2 51,9

CEEC and NIS 8,7 3,4 12,9
Turkey 4,3 0,5 0,5
North Africa and Middle East 2,7 2,6 22,5
Σ European Region 93,2 90,6 87,8

Americas 3,5 7,3 3,8

South & South-East Asia, Oceania 2,5 1,7 4,9
Sub-Saharian Africa 0,8 0,4 2,1
Total 100,0 100,0 100,0
(number, millions) (77) (18) (5)
Source: OMT Yearbook of tourism statistics, 2003.

233
 Figure 11-16 : Tourism flows in the European region
Arrival of non resident tourists at national borders, and % Destination of Spanish tourists (annual average 2001-
in countries’ population in 2004 2004) and evolution (1997-2004)

Destination of German tourists (annual average 2001- Origin of tourists in Egypt (annual average 2001-03) and
2004) and evolution (1997-2004) evolution (1997-2003)

234
11.2.6 Flows - International migrations

Northern America has been the dominant receiver of international migrations

during the second half of the XXe century, both with respect to the relative size
of net in-migration and of the total number of international migrants. But the
importance of EU in the geography of migrations has been growing since the
1980s up to present. According to the data provided by OECD, EU has become a
major receiver and is on the way to catch up with the United States. Meanwhile,
the international migrations flows between EU members have stayed at a very
low level although there is a total liberty of movement inside the EU territory for
EU citizens.
Despite a strong process of globalization, the migration issue from neighbour
countries is a major subject of concern for EU members for several reasons:
- As far as the North South model of regional integration is concerned, it is
impossible for EU to reorganize its value chain on a wider territorial base,
encompassing neighbour countries, if these countries are deprived from their
highly skilled and educated workers.
- Europe should take care of recent developments with growing flows of highly
educated workers from Northern Africa to Northern America whereas those who
leave this region to Europe are less educated (Fargues, 2005).

To study the international migration flows is very challenging. There are many
types on international migration flows: migrations of workers, migrations of
refugees, definitive or temporary migrations, local and long distance flows, etc.
There is no unified statistical tool: each country utilizes its own definitions which
are often not strictly comparable to those implemented in other countries. Many
countries, especially the developing countries, do not provide the analysts with
data about out-migrations. This explains why the in-migration flows are much
better known than the out-migration ones. Consequently, there is generally no
correspondence between data provided by Mediterranean and European
countries about the trans-Mediterranean migrations. This data problem also
explains why the South-North flows are better known than the South-South
ones, and why they are analysed from the point of view of the receiving
countries (that is Northern America, European countries, etc.). For instance,
Middle East (Arabic peninsula mainly) is a major migration destination, but one
would hardly find reliable data about the flows converging to this region. Besides,
a significant part of the migration flows is composed by illegal migrants. Although
many reports regularly try to do so, it is hardly possible to give any relevant
estimation of their number, especially because a majority of them legally enter
their country of destination, with a tourist visa for example. At last, the
geography of international migrations is more and more complex: the traditional
regional patterns, mainly based on proximity and eventually former colonial
relations, are step by step replaced by more distant flows. In addition, former

235
regions of departure have also become regions of destination – this is the case of
Maghreb for example.

Nevertheless, the available statistical sources and several reports make possible
a study of migration flows between EU (ESPON) and the neighbourhood
countries. This subpart aims at answering the following questions: what is the
relative importance of neighbouring countries in the migrations flows oriented to
EU and ESPON? Is there one or several neighbourhoods - each one being
characterized by its on migration patterns? What is the impact of migrations
coming from the neighbourhood in the internal ESPON territory?

11.2.6.1 What is the relative importance of the

neighbourhood in the migration flows converging
towards European Union and ESPOIN space?

Throughout the 1980s and 1990s up to now, the neighbourhood has been a
major origin of the migrants coming to Europe (see Final Report – Volume 1 –
Map 45 – Page 129). There are tight relations between France and Northern
Africa countries for example. These relations between both shores of the
Mediterranean have even been reinforced in the 1980s since countries such as
Italy and Spain have become major in-migration countries. In the 1990s, these
traditional flows have been brutally combined with new kinds of flows coming
from the Eastern neighbourhood and the Balkan countries. First, after the
collapse of the socialist bloc, migration flows coming from Central and Eastern
Europe (mainly for economic reasons or even eco-ethnic reasons in the case of
the German Aussiedlers) have grown up rapidly. But they were never as massive
as those coming from the South. Secondly, because of the long lasting political
instability of the Balkans, Western Europe had to handle massive flows of
refugees coming from former Yugoslavia (mainly form Bosnia).

It is impossible to evaluate the relative importance of the flows coming from the
neighbourhood in the total of flows converging to EU and ESPON. The statistical
sources of receiving countries are not based on the same statistical definitions.
Nevertheless, the existing sources allow us to draw some conclusions. In the
1990s and in the 2000s, the international migrants who entered EU countries
and who came from other EU countries were a minority in the total flows: around
25 % per year. Those who came from the neighbourhood (Northern Africa, Near
and Middle East, Turkey, Balkans, CEE countries and Western CIS) represented
between 40 and 45 % of the whole (OECD, 2005).

As far as the stock of foreign of population residing in the EU is concerned, the

importance of the neighbouring country is also high. It is estimated that roughly
20 million foreigners lived in EU before its enlargement in 2004. Among this

236
total, only 5 million came from EU. According to a study recently released by the
CARIM (Fargues, 2005), in 2002 5.8 million came from the South and East
Mediterranean countries. A large majority were of Turkish (around 2.7 million),
Moroccan (around 1.6 million, see Final Report – Volume 1 – Part C – Box 7 and
Volume 3 – Case study about Morocco) and Algerian (around 0.75 million). That
means that the migrants from all neighbour countries represent largely more
than one half of the total. It is more difficult to give any comprehensive appraisal
of the share of residing migrants coming from Balkans and the CIS because of
serious data gaps. According to the OECD, they represent a large share of
foreigners in certain ESPON states: more than 24% in Switzerland in 2001,
45.3% in Austria, 13.5% in Germany, 13 % in Denmark and roughly 10 % in
Hungary (OECD, 2005). Their number was higher in the 1990, while and just
after the war in former Yugoslavia.

The importance of EU and ESPON as destinations for the migrants coming from
neighbour countries is high in certain cases. But it is difficult to measure the
share of EU and ESPON as destinations in the out-migrations flows, because of
data gaps in the countries of origin. The CARIM estimates that there are between
10 and 15 million international migrants coming from South and East
Mediterranean countries in the World (first generation only). A bit less than half
of them are living in EU. Besides, there is no doubt that a majority of the
migrants who also left Eastern neighbours are residing in the EU territory. One
can see an increase of the flows coming from CIS in Czech Republic and in
Hungary for example. Their number has also been growing in West European
countries such as Germany, Italy and Portugal since the beginning of the 2000
but we still miss precise studies about the size of such flows.

11.2.6.2 Is there one or several neighbourhoods?

One can not consider the neighbourhood as a homogeneous whole. Not all the
migration flows coming from neighbour countries are oriented to EU. Some
neighbour countries send much more migrants to the rest of the world. Some of
them are even destination countries and show positive net-migration rates while
others have negative rates. To these respects, one can distinguish several sub-
regions in the EU neighbourhood, characterized by various patterns of
migrations.

The main difference lies between the Southern and the Eastern neighbourhoods.
The South and East Mediterranean countries emit much more out-migration flows
than the Eastern neighbours. Only the former Yugoslavia could be compared to
Mediterranean countries but only in the 1990s, for the out migrations from this

237
region have strongly decreased since the beginning of the 2000s, as it is shown
by the graph below based on the German example.

Figure 11-17 : Inflows of migrants coming to Germany from the Balkans

Inflows of migrants coming to Germany from the Balkans

160,0

140,0

120,0

100,0 Fed. Rep. of Yugoslavia

Thousands

Romania
80,0
Croatia
60,0
Bosnia-Herzegovina
40,0

20,0

0,0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

The huge difference between South neighbours and others is due to very
different demographic situations. A majority of eastern neighbours show bad
demographic performances since the end of the 1980s and have even lost
population. They are themselves in need of migrants, as it is the case in Russia
whose migration rate has been positive most of the time since the outbreak of
the USSR. That is why the flows coming from the East have never been as
massive as they were expected – or feared – to be by the Western European
countries in the beginning of the 1990s. The migration rate was still positive in
2003 in Russia, but the flows have been sharply falling since the 1990s. Since
2005, President Vladimir Putin tries to change the Russian legislation related to
the acquisition of citizenship and to the management of migration flows. This
decision has been followed by new bills voted by the State Duma, which aim at
attracting especially ethnic Russian who still live in former Soviet Republics.
According to various sources, the number of illegal migrants in the Russian
Federation lies between 7 and 14 million but Russia must face up with a serious
demographic deficit (see table below).

Table 11-12 : Evolution of population in CIS neighbours

1990 1995 2000 2004
Russian Federation 148292000 148141000 146303000 143849600
Ukraine 51892000 51512300 49175850 47451290
Moldova 4363950 4338750 4274639 4217911
Source: World Bank

238
 Figure 11-18 : Migration flows to and from Russia

Migrations flows to and from Russia

700000

600000
500000

400000 In-migrations
300000 Out-migrations

200000
100000

0
1997 1998 1999 2000 2001 2002 2003

Middle East countries also send relatively few migrants to EU. Those who leave
Syria, Jordan and Egypt are going mostly to oil producing countries of the
Persian Gulf and mainly to Saudi Arabia where the needs for workers are high. In
almost all the countries of the Arabic peninsula, the international migrants
represent more than half of the labour force. Middle East foreign residents almost
never appear in the top list origins in the OECD members, except for Irak. But, in
this case, these migrants are probably composed by a significant share of
refugees.

A large majority of migrants who leave Algeria, Morocco, Turkey and Tunisia go
to EU. Whereas those who leave Egypt mainly go to Arab countries, and those
who leave Lebanon go to other countries (mainly in Northern America). Almost
all the temporary Egyptian labour force working abroad in 1999 (1.9 million) was
concentrated in the Middle East countries: 924 000 in Saudi Arabia, 333 000 in
Libya, 227 000 in Jordan, 191 000 in Kuweit, 95 000 in the United Arab Emirates
(Fargues, 2000; Wihtol de Wenden, 2005).

The situation is almost the same in the former USSR where Russia attracts the
majority of migrants who decide to leave CIS countries (de Tinguy, 2004). But
the situation has been changing since the middle of the 1990. It seems that the
migratory system of Russia is getting step by step less CIS based and more
connected to the rest of Europe. As far as the out-migration flows from Russia
are concerned, the share of non CIS countries as destination countries is now the
same as that of CIS countries; the sole Germany represents roughly 40% of the
total outflow leaving the Federation (Goskomstat Rossii, 2005).

239
 Figure 11-19 : Migration flow from and to the Russia Federation

Migration flow from and to the Russian Federation

700000

600000

500000
In-migrations from CIS
400000
In-migrations from non-CIS

300000 Out-migrations to CIS

Out-migrations to non-CIS
200000

100000

0
1997 1998 1999 2000 2001 2002 2003

At last, it is possible to distinguish different kinds of neighbourhood with respect

to the evolution of their migration rate. The box below shows that it is impossible
to draw a unique view – thus an unique policy – of migrations in the
neighbourhood.

Migration rates in the neighbourhood : a great variety of situations

In the Soviet bloc, during the period up to the end of the 1980s, the net-
migration rates were relatively stable. During the 1990s, they began to drop.
Especially sharp was the fall in Armenia and Georgia. The explanation is probably
the same as for the Baltic States – the Russians returned home (one indication
that many Russians went back home during the 1990s is that Russia shows a
small but constant upward trend, from negative to positive; this trend seems to
develop). Besides, the three Caucasian states (Armenia, Azerbaijan and Georgia)
are localised in an area with wars, conflicts and disorder – things that hamper
immigration and stimulate emigration. Moldova has shifted from being an
immigration part of the Soviet Block, to a country with a relatively high migration
deficit nowadays. It is a small country with low living standard – one of the
lowest in Europe – and many people seem to try to find a way out of the
situation by emigrating westwards. Ukraine is another country that has
transferred from being an immigration to an emigration country. In this case it is
probably the Russians that have returned but migration westwards is another
part of the explanation. On the other hand, Belarus shows an upward trend
regarding net-migration. From being an emigration part of Russia, it is today a
country with net-immigration.

240
All the three countries in Central Asia - Kazakhstan, Turkmenistan and
Uzbekistan - have experienced long-term negative development with respect to
the migration rates.

The Maghreb countries experienced different migration patterns during the

second half of the 20th century. During this time, many political events took
place and these countries lost their colonial ties during the 1950s. Morocco,
Algeria and Tunisia have had negative migration rates during all the period. Libya
shows quite another pattern; in this case the immigrants are probably coming
from the surrounding countries in Africa.

Mashreck is also a region that has been characterised by wars, conflicts and
turmoil during all the time since WWII. Despite this, Israel has had a migration
surplus during all the time since the nation was founded. There also seems to be
two peaks in the net-immigration rates: one during the 1950s and 1960s and
one in the beginning of the 1990s. The other countries, with the exception of
Egypt, have very fluctuating migration rates. The Palestinian migration rate has,
however, been relatively constant since the beginning of the 1970s. Egypt has
had a relatively stable net-migration rate since the beginning of the 1950s. Since
the beginning of the 1970s it has been negative. In the second half of the 1970s,
it was 150,000 persons annually on an average and during the second part of the
1990s the migration deficit was 100,000 persons yearly on average.

In the Arabic peninsula and the Persian Gulf, most of the countries have had
migration surplus almost all the time. The Kuwait-war had also a clear impact.
Kuwait lost one fourth to one third of its population as en effect of net-emigration
between 1985/90 and 1990/95. A lot of people working in the service sector
have come from other parts of the World – e.g. Asia and from the former Soviet
bloc – and this has contributed to the immigration surplus.

11.2.6.3 What is the impact of migrations coming from the

neighbourhood in the internal ESPON territory?

All over the world, there is a diversification of migration flows (Bernard, 2002;
Castles and Miller, 2003; Simon, 1995). They are still mainly based on the
proximity between countries of origin and countries of destination. But this
pattern is not predominant anymore. Foreign residents residing in EU are more
and more coming from non neighbour countries: Senegal, Pakistan, Afghanistan,
China, Sri Lanka and so on. It is possible to make some distinction between EU
countries with respect to the relative importance of migrants coming either form
neighbour or from non neighbour countries. The process of diversification is
obvious in the table below, showing the example of France. Mediterranean

241
countries still top the list of origins but new ones appeared in the 1990s, such as
Brazil, Democratic Republic of Congo, Japan, China and even Russia.

Table 11-13 : France, main inflows of foreign population by nationality (thousands)

Country of origin b 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Morocco 16,4 13,8 8,1 6,6 6,6 10,3 16,1 14,1 16,9 18,7
Algeria 12,3 13,1 9,7 8,4 7,8 12,2 16,7 11,4 12,4 15,1
Turkey 9,2 6,8 4,7 3,6 3,4 5,1 6,8 5,7 6,6 6,9
Tunisia 4,0 3,5 2,3 1,9 2,2 3,6 5,3 4,0 5,6 6,5
United States .. .. 2,4 2,4 2,7 .. .. 2,7 2,6 2,6
China .. .. 1,3 0,9 0,7 2,8 5,7 1,7 1,8 2,1
Haiti .. 3,2 1,9 1,4 0,8 1,9 1,9 1,4 1,8 2,1
Sri Lanka .. .. .. 0,8 0,9 .. .. 1,2 1,3 2,1
Japan 1,3 1,2 1,1 1,0 1,1 1,2 1,1 1,4 1,2 1,4
Switzerland .. .. .. .. .. .. .. .. 1,4 1,4
Fed. Rep. of Yugoslavia .. .. .. .. .. .. .. 1,4 1,2 1,4
Romania 1,1 1,0 0,7 0,6 0,5 0,6 0,9 0,9 1,1 1,4
Russian Federation .. .. .. .. 0,6 0,7 0,9 1,0 1,1 1,4
Dem. Rep. of Congo .. 2,2 1,3 0,9 0,9 2,9 4,6 1,5 1,0 1,3
Brazil .. .. .. 0,9 0,7 0,6 0,7 0,8 1,0 1,2
Total .. .. 91,5 77,0 75,5 102,4 139,5 114,9 126,8 141,0

Source: OECD, 2005

Some ESPON countries are not very much concerned by the migrations coming
from the neighbourhood. But they are very few and they are mainly located in
Northern Europe: United Kingdom, Luxembourg, Portugal and, to a certain
extent, Sweden. In Luxembourg, the majority of foreign residents come from EU
countries. Not surprisingly, Luxembourg is incidentally the only EU members
where European Union is the first reference of identification, before the national
reference. In Portugal, despite the increase of residents coming from CEE
countries (Romania, Ukraine) in the last few years, the majority of them come
from former colonies: Southern Africa, Guinea Bissau, Brazil, Cape Verde…
Neighbouring counties do not appear in the top list of origins among resident.
And it is the same for the migrations flows.

Table 11-14 : Portugal, major origins of foreign population (stock) by nationality (thousands)
1989 1991 1996 2001
Cape Verde 28,0 29,7 39,6 49,9
Brazil 10,5 12,7 20,0 23,5
Angola 4,8 5,7 16,3 22,6
Guinea Bissau 3,4 4,8 12,6 17,6
United Kingdom 7,8 8,9 12,0 15,0
Spain 7,3 7,6 9,3 13,6
Germany 4,5 5,1 7,9 11,1
United States 6,4 7,2 8,5 8,1

242
 France 3,0 3,4 5,1 7,8
Sao Tome and P. 1,9 2,2 4,2 6,2
Mozambique 3,0 3,4 4,4 4,7
Netherlands 1,7 1,9 2,9 4,5
China 1,1 1,4 2,4 3,9
Venezuela 4,9 5,1 4,2 3,5
Italy 1,1 1,2 2,0 3,4
Total 101,0 114,0 172,9 223,6
Source: OECD, 2005

The features of UK’s migratory system are very close to those of Portugal with a
majority of foreign residents coming from distant countries and namely the
former colonial empire: India, United States, Pakistan, Somalia, South Africa, Sri
Lanka, Jamaica… From neighbour countries, only Former Yugoslavia appears in
this list, at the 14th rank.

In all other countries, the residents coming from neighbour countries represent a
significant proportion of the total number of foreign residents. It is possible to
make distinction between them in taking into account their origins (OECD, 2005).
The extreme situation is shown by Austria, where former Yugoslavian and
Turkish residents represent together almost 70% of the total foreign population
residing in the country. Countries such as France, Belgium and Netherlands are
strongly related to the South Mediterranean countries. In Netherlands, residents
of Turkish and Moroccan nationality represented 30% of all foreign residents in
2001. In France, those of Turkish, Moroccan, Tunisian and Algerian nationality
represent 41 % of the total. In other countries such as Spain, Switzerland and
Italy, the foreign residents mainly come from Mediterranean countries and from
South Eastern Europe (Balkan countries or Romania). In Hungary and Czech
Republic, the majority come from former USSR, former Yugoslavia, Romania and
Bulgaria. Sweden is more oriented to Near and Middle East and to former
Yugoslavia. At last, in Finland, foreign residents of Russia nationality represented
more than 22% of the total.

11.3 Regional policies

11.3.1 The ambition of the European Neighbourhood Policy

Launched by the Commission in 2003, the European Neighbourhoods Policy

(ENP) aims at unifying various existing policies and budgets: Meda, Phare, Tacis
etc. The new Partnership financial Instrument concerns:
(i) Nine Mediterranean countries: those of the former Barcelona process, minus
Turkey (that will benefit from a specific budget), Cyprus and Malta (now member
states), plus Libya.
(ii) The three Caucasian countries (Azerbaijan, Armenia, Georgia)

243
(iii) The three NIS that are located between UE and Russia (Moldavia, Ukraine,
Belarus - but the latter is still not included for political reasons).

European Balkans countries are not included because they are potentially state
members. Neither is Russia, because of a specific strategic agreement with EU,
which general goals are nevertheless quite similar to the ENP’s: create a common
space for trade, capital, migrations, training, culture, and security. The idea is to
“share everything but institutions”, in order to develop one integrated region that
would encompass the EU and its neighbours. The ENP enhances a common tool,
the Action Plans (definition of specific goals for each neighbouring country, with a
three to five years programme of precise actions – energy, transports,
governance…). The budget could be around 15 billion euros (2007-2013), to be
compared to the 8,4 billions for the 2000-2006 period.

Yet, this view is hampered both eastward and southward. Eastward, the
Ukrainian call for membership since December 2004 presidential elections, raises
a tough political issue with Russia. Southward, the recent Barcelona Summit in
November 2005 (for the tenth anniversary of the first Agreements), which was
supposed to enhance the Mediterranean partnership through this ambitious
European Neighbourhoods Policy, was a crude failure: whereas all UE states
where represented by the head of their government, only two Mediterranean
partners sent theirs. What are the reasons of this failure?

11.3.2 The shortcomings of the Barcelona process

The Barcelona Agreements, which entailed an economic chapter (enhancing

market economy and launch a free trade area in 2010), a political and a cultural
chapters, had created a great hope. Ten years after, everyone can see the
positive steps. First, the Barcelona process is a quite unanimously accepted
policy. Its goals are shared by all the countries involved. Its procedures are
making cooperation more natural; it is the only forum where European and South
Mediterranean countries representatives – and namely where Israelis and Arabs
officials – attend the same conferences. Second, the Association Agreements
have become a well known framework for bilateral (UE/Med partner) and
regional economic cooperation. Some have been signed very recently (Syria’s is
still to be confirmed) but many came into force several years ago (Palestine,
Israel, Morocco, Tunisia and Turkey are the eldest). A set of technical
committees and sub-committees ensure practical implementation of the
agreements; they progressively build the habit of a partnership in the Region.
Third, the institutionalisation of the partnership has gone a step further in Mach
2004, when the Euro-Mediterranean Parliamentary Assembly (EMPA) held in
Athens its inaugural meeting. In 2005, the EMPA held its plenary session in

244
Cairo, and the Anna Lindh Euro-Mediterranean Foundation for the Dialogue
between Cultures (financed by all partner countries and the Commission),
devoted to the civil society networking, intellectual and cultural exchanges, was
inaugurated in April in Alexandria. Forth, networking among civil societies
through NGOs has developed North-South and also South-South.

But shortcomings are real too. They go far beyond the conflict between Israel
and Palestine, beyond the effects of international terrorism or of the war in Iraq.
First they are economic. Economic reforms remain insufficient in the southern
shore of the Mediterranean. In these countries except in Turkey, the activity
remains dominated by the rent economy, whether it stems from oil and gas,
tourism, or foreign aid. Such a system explains why corruption is rampant. This
is the reason why the economic gap between the two shores has been increasing
in the last years, despite the Association Agreements. These are bad conditions
to prepare a free trade zone, which could be as dangerous for the Southern
neighbours’ balance of trade as the free trade agreement with the EU had been a
decade ago for Turkey’s.

Second, they are political. The South sees the ENP as a form of compensation for
countries that would never be allowed to enter the Union. This is mostly the case
for Turkey, but it is also true for the other countries. The ENP policy seems badly
accepted because it was not created by a negotiation process between the South
and the North like before the Barcelona agreements of 1995; the word of
“neighbour” makes a really dissymmetric sound... In fact, the South sees more
and more Europe as a fortress, with huge financial means dedicated to the
promotion of the “integrated border management” in the neighbouring countries
(e.g. Melilla’s equipments financed by the EU) in order to fight against illegal
immigrants. This strongly security-oriented treatment of the region’s instability
hampers the progress of democracy in the South, and hampers in the North the
idea of a Mediterranean cooperation.

Third, they are geographic. The southern neighbours do not feel that the EU
demonstrates a real integrated view of the region, encompassing both eastern
and southern neighbours. They believe that the Union has a limited interest in
the South of the Mediterranean compared to central and eastern European
countries. Of course there is no clear consensual opinion in the southern shore
that these countries should actively promote a common region with Europe. But
all the same, the idea is rising that the new world context calls for regional
groupings, to cope with eastern Asia or Latin America (see for instance the
growing competition for food industry including for “Mediterranean” products,
that comes from the industrialised south American agriculture, namely Chilean
and Argentinean). Such a regional grouping can not be just an extension of the
Barcelona agreements of ten years ago. Obsessed by the security issue, the

245
2005 Barcelona summit did not propose really ambitious regional policies focused
on key sectors such as agricultural trade in the framework of a win-win regional
pattern, qualifying migration and higher education.

Furthermore, the proposed bilateral cooperation (Action Plans) risks to jeopardize

the regional Euromed partnership by reducing the multilateral actions of the
former Barcelona process, and by diluting it in a vast ENP whose winners are
most likely to be located at the East of Europe. What southern neighbours fear is
a rising competition between them and eastern neighbours to catch the ENP
subsidies.

Are they right? A piece of answer is given by the numbers of the past decade.
The UE has spent six billion euros in the Barcelona process (table 11-15). But
only a half have been really paid, because of weak capability of southern
partners (namely Algeria and Syria) to fulfil the technical European requirements
for applicants. Their capability has improved lately; besides, the UE has settled
down a Delegation in each of these countries which ameliorates this
administrative and technical relationship. But all the same, the difference
between EU’s subsidies to the South and to the East is striking. During the 1995-
2004 period, the EU has spent 20 billion euros for the CEEC but only 3,2 for the
Mediterranean partners. In other words, European’s subsidies reached 27 € per
inhabitant in the CEEC and less than 2 in the Mediterranean.

Table 11-15 : EU’s subsidies to the CEEC and the Mediterranean partners Annual average, 1995-
2004
€/
million € inhabitant
MEDA countries :
-West Bank &
Gaza 38,2 10,0
-Jordan 35,1 6,1
-Tunisia 48,6 4,8
-Lebanon 10,5 2,8
-Morocco 57,1 1,8
-Egypt 51,7 0,7
-Algeria 10,5 0,3
-Syria 3,9 0,2
Together 255,5 1,4

CEEC 1 996,7 27,0

Note. Regional cooperation MEDA funds (70 M € / year, spent for several southern countries altogether) are not
taken into account. Source : European Commission

246
References:

• Eurostat, 2005 : « External Trade of Western Balkan Countries », Statistics

in focus, External trade, 1-2005.
• Fargues, Ph., 2000, Générations arabes. L’alchimie du nombre, Paris,
Fayard.
• Fargues, Ph., 2005 (ed.), Mediterranean Migrations, 2005 Report, CARIM,
Freudenberg, M., Gaulier, G., Ünal-Kesenci, D., 2005, « La régionalisation
du commerce international : une évaluation par les intensités relatives
bilatérales », CEPII, Document de travail n°98-05.
• European Commission, Robert Schuman Centre for Advanced Studies.
• OECD, 2006, International Migration Outlook, Paris.
• OECD, 2005, Trends in International Migrations 2004, Paris.
• Rossijskij Statisticeskij Ejegodnik, Goskomstat Rossii, 2000 and 2005
editions.
• Saint Laurent B., Saint Martin C., Jaffrin S., 2006, « Les IDE dans la région
MEDA en 2005 », Notes & Documents n°20, AFII, Anima.
• Tinguy, A. de, 2004, La grande migration. La Russie et les Russes depuis
l’ouverture du rideau de fer, Paris, Plon.
• Wihtol de Wenden, C., 1999, L’immigration en Europe, Paris, La
Documentation française.
Wihtol de Wenden, C., 2005, Atlas des migrations internationales, Paris,
Autrement.
• World Bank, 2004, The World Bank, Development Report – Unlocking the
Employment Potential in the Middle East and North Africa: Toward a New
Social Contract, Washington.

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12 MENTAL MAP THEMATIC ANALYSIS

12.1 Firms, Countries, International Organisations and NGOs’s:

World regionalisation

Clarisse Didelon
UMS-RIATE

12.1.1 Introduction

International Organisations, Countries, Non Governmental Organisations and

global private firms are the main actors at the global level. They divide the World
in order to administrate it, to locate their activities and to organize their relations
with other countries / groups of countries: in other words, to exert their power
practically or symbolically17.

Those divisions of the World are often available on the different tools used by
global actors for their communication. Those tools can be either reports (for
example the “World Development Report” from the World Bank), or electronic
supports like CD-Rom, or websites. In this study the maps and divisions of the
World mainly come from the websites. All maps have been collected
approximately within the same period of time running from summer to fall 2005.

One should keep in mind that the representations of the World that are published
on websites are not necessary operational division of the World used by the
World actors. However, as they are exposed before public opinion, it has been
assumed that those maps have necessarily some meaning for the actors and are
at less the sign or the symbol of their power at the World scale.

The main questions that we will try to answer in this part are the following ones:
Do all actors divide the World in the same way?
Which criteria are they explicitly or implicitly using?
What can we learn from their maps concerning their vision of the World?

The methodology for the building of the databases and their computation will be
presented in a first step. Then, the criteria that seem to have been used by the
actors will be presented.

17
As explained by C. Raffestin, the fact to establish territorial division is always the sign of a power.
States have the monopole of official internal division inside their borders. Global actors do the same at World
Scale but nobody has a monopole of an official division of the World.

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12.1.2 Methodology

The analysis of the divisions of the World by global actors is quite different from
that displayed in the survey on ESPON community (Cf. Case Study: Europe and
the World, The ESPON community’s point of view), although it is based on the
same principles. The reason is that, contrary to the survey, there is no
“normalised” way for the firms to let one know what their divisions of the World
are. The sources are quite different and may raise problem for the interpretations
of the results because there is generally no information available about the
criteria used to divide the World.

The same methodology has been used to build the databases for International
Organisations, Countries, Non Governmental Organisations and private firms.
That allows us to make comparisons between the different kinds of World
divisions produced by those global actors. In a first step, the strategy used to
build the database will be presented and then the methodology used to formalize
and interpret the results.

12.1.3 How we build the data base

The choice of the sample of actors

International public Organisation. International organisations are many and

some of them have mainly a regional orientation, for example the European
Union and North American Free Trade Agreement (NAFTA). To know which
International Organisation exists, a list available on a Canadian website has been
used: < www.collectionscanada.ca>. All those organisations websites have been
checked and 19 maps or lists of divisions of the World have been collected. Some
of them present the subdivisions of an upper level regionalisation. It is the case
for example for United Nations which provides three different divisions of the
World. The International Organisations included in the survey are the following
ones : United Nations, World Bank, United Nations Educational, Scientific and
Cultural Organization (UNESCO), World Tourism Organisation (WTO), United
Nation Children’s Fund (UNICEF), United Nation Refugees Agency (UNHCR),
International Labour Organisation (ILO), World Meteorological Organisation
(WMO), Universal Post Union (UPU), World Health Organisation (WHO),
International Telecommunication Union (ITU), World Trade Organisation (WTO),
International Monetary Fund (IMF) and finally Food and Agriculture Organisation
(FAO). It is interesting to observe that despite the fact that all these
organisations belongs to the UN system, they do not use any common framework
which means that UN is rather an umbrella than a real power at World scale. The
context of the proposed divisions is quite different from one website to another.
It could be the list of the member States of the International Organisation. That

249
means that the list is not exhaustive as not all countries are members of all the
organisations. So far, 32 countries from our list of 168 countries are not
members of the OMT “Organisation Mondiale du Tourisme”.

Countries. As it was not possible, actually, to collect all the maps and regions
produced by all the countries of the World, it has been decided to take into
account only the documents produced by the countries that are commonly
recognised as the main actors of the World, i.e. the countries that are susceptible
to have a great influence at the World level. It has been decided to take into
account the five permanent members of the security council of the United Nation
(China, United-States, Russia Federation, France, United Kingdom) and the
countries which belong to the informal but powerful G8 (the same as the
previous ones excepting China, together with Germany, Canada, Italy and
Japan)18. Maps have been collected for all those countries on the Foreign Policy
or Foreign Affairs ministries websites, except for Russian Federation whose
website is unusable for a non Russian speaker.

Non Governmental organisations. It was especially difficult to select main

NGOs (Non Governmental Organisations) of the World and to check their
divisions of the World. Moreover, a large number of them are very small ones.
They act locally and they do not need to produce divisions of the World. The
research has concentrated on NGOs having global ambitions. We have first tried
to identify global NGOs by searching “Transnational NGOs”, “Global NGOs”,
“International NGOs” (and the equivalent expressions in French) on the Google
website. Then we used two main lists of global NGOs (one in French, one in
English). The first one is published on <http://www.toile.org/psi/ong/html> and
the second one is available on
<http://billie.lib.duke.edu/pubdocs/ngo/transnational.asp>. The main problem
with this group of actors is that the lists by World regions provided by them are
generally lists of countries associated with types of actions. Therefore, those lists
are too much incomplete to be used as a support in the study of World divisions.
Only eleven maps and divisions of the World have been collected from the NGOs
list (Table 12-1).

Private firms. The number of private firms in the World is high, even when
taking into account only firms having a global orientation. It was not possible to
collect the division of the World for all of them. Moreover, the firms had to be
large enough to have a worldwide presence. In a first step, it has been decided
to study only European firms and then to shorten the list to collect only maps
displayed by the firms included in the stock market index of their countries. The
three main financial markets of Europe have then been selected and finally only

18
Alternative approach could be based one the World share of population of GDP and/or population
including therefore other countries like India, Brazil or Indonesia.

250
the firms from the CAC 40 (40 firms), FTSE 100 (102 firms) and DAX (30 firms)
indexes have been studied. All the private companies included in those indexes
are generally (but not always) oriented towards the global market, but they do
not necessarily provide their websites with their divisions of the World.

Table 12-1 : list of NGOs

Amnesty International - Large regions

Amnesty International – Sub regions
Derechos Human Rights
Directory of Development Organisations
Human rights watch
OXFAM
World Conservation Union
Médecins sans frontière
Reporter sans frontière
Red Cross
Red Crescent

Different kinds of maps: a first vision of the World

The raw material (i.e. maps published on the websites) already provides precious
information on how the firms or other actors perceive the World, or on the way
they want to show to the public their perception of the World. Three major kinds
of maps available on websites can be roughly identified. The first one, Pernod-
Ricard, presents a clear division of the World in form of territorial partition19
(figure 12-1). The Cadbury-Schweppes one shows the will to consider the World
as a whole and is based on a list of regions whose countries lists are published
on another part of the website (figure 12-2). The Siemens map presents an
intermediate situation between the two previous ones. The net surfer first faces a
moving picture of the globe without any division. If he wants to get more
information about both the delimitation of regions and their composition, he has
to click on the globe which then stops to turn. A region is then highlighted in
yellow colour and details about the chosen region appear on the right side of the
globe (figure 12-3).

This kind of presentation is not specific to some type of firms and it is neither
related to their nationality. But it is interesting to note that, apparently, some
firms do not want to let one know immediately how they divide the World on a
pictorial medium. Maybe it is a well-thought-out decision of a firm that does not
consider that showing divisions of the World is “politically correct”. It can also be
a spontaneous representation that could reveal that the firms have a hegemonic

19
Different subset with null intersection and complete coverage of the World

251
vision of the World. The Cadbury-Schweppes map, for example, could mean that
wherever you are in the World, maybe excepted in Siberia or Sahara, you can
find Cadbury products… There is therefore no more division of the World for
Cadbury, as it is united by the worldwide consumption of their products. Indeed,
from a market’s point of view, a division of the World by a firm could be based
on the following criteria: countries were our products are available, countries
where they are not…

Harmonisation maps collection

The raw material used to achieve this study has been the maps published on the
global actor’s websites. Some problems have to be underlined concerning maps
and divisions of the World collections. The first one, and the main one, is the use
of different World divisions on different web pages on a firm’s website.

- More than one division of the World proposed in the same website. It is
possible that firms, international organisations or other actors do not have a
clear vision of the World regions. They can provide websites with different World
divisions on different web pages. One example is the ALCATEL French firm. It is a
communication firm that claims to be present in 130 countries in the World. In
its website, one can find at least three divisions of the World. First, the firm
proposes a list of the local branch companies’ websites
<http://www.alcatel.com/comps/localsites/>. On this web page, three World
regions are proposed: Americas, Asia / Pacific and Europe / Middle East / Africa.
Then comes a presentation of the geographical distribution of sales of the firm
(in a web page called “About Alcatel”) on the English version website, where five
zones are proposed: Western Europe, Other Europe, USA, Asia, rest of the
World. <http://www.alcatel.com/apropos/inbrief/index.htm>. Last, a division of
the World is proposed in the corporate documentation presenting the repartition
of the firm’s employees in the World. This map shows a quite unusual division of
the World <http://www.alcatel.com/apropos/Company_Presentation.pdf> where
France is included in the same region as Africa, Arabic Peninsula and South Asia,
whereas Spain is included in the same region as South and Central America,
Southern Europe with Israel and Georgia… (Figure 12-4).When two divisions
were proposed and when the choice was to be made between a map and a list,
the map was preferred because of its higher symbolic impact, because one is not
likely to remember in detail the division of the World from a list. It was the case
for ALCATEL. When the conflict was between two maps, and when the two maps
were in line with the purpose of a World division in regions, both maps were
used. It was the case for the United National Population division. Its cartographic
department proposes regions of the World that are different from the regions
generally proposed in the reports (Figure 12-5).

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 Figure 12-1 : Pernod-Ricard division of the World

Source : http://www.pernod-ricard.com/

Figure 12-2 : Cadbury-Schweppes division of the World

Source : http://www.cadburyschweppes.com/

Figure 12-3 : Siemens division of the World

Source : http://www.siemens.com/

253
 Figure 12-4 : One of the Alcatel divisions of the World

Figure 12-5 : two different divisions of the World proposed by the United Nations

- Difference between the map and the text. Even when only one division of the
World is proposed, it can happen that a map and a list are presented together.
And, in some cases, it could happen that there is a difference between the maps
showing a division of the World and the list, even if the list is often placed in
front of the map. For example, here are two maps provided on the AXA Group
website (figure 12-6.) <http://www.axa.com/en/group/World/> quoting the
presence of the firm in different countries, illustrated by maps showing the
region. The main problem here is that Turkey appears in the list as belonging to
Europe. But, on the map, Turkey is included in the Middle East region. We chose

254
to follow the text each time the problem will appear. This method seems more
reliable because people who make the websites are probably not cartographers.

Figure 12-6 : The presence list version / map version problem (AXA website)

?
Presence : Austria, Belgium, France, Germany, Presence : Lebanon, The emirates
Ireland, Italy, Luxembourg, Monaco, Portugal,
Spain, Switzerland, The Netherlands, Turkey,
United Kingdom

The double belonging problem is the same kind of problem. It can happen that a
country is shown on two maps showing different World divisions. This is the case
for the French firm Peugeot website (Figure 12-7). Turkey appears on a map as
belonging to Europe and on another one as belonging to Middle-East Central Asia
region. In that case, if a text is available, the only solution is to rely on it.

Limit of Stock Market Firms. The main problem raised by choosing firms that are
in the stock market index is that those large firms are often not composed by
only ONE enterprise but a group of enterprises. As a consequence, it can happen
that all the enterprises from one group do not propose the same divisions of the
World. Consequently, the divisions provided on the firm’s website do not match
that of the branch office. In this study, we focus only on the head firm’s division
of the World.

Figure 12-7 : The double belonging (Peugeot website)

255
Limits from the sample of map collection

The problem with NGOs is that many of them have a global action and wish to
promote the idea of a united World. Therefore they do not propose any division
of the World on their websites20.
Another particular problem can be raised concerning the NGOs division of the
World. When one makes a synthetic analysis, the visions of the World which are
collected have very different origins and they share few common features. The
problem is that it is difficult to analyse such a result: NGOs are from different
countries and they belong to different sectors of activity. It is most likely that
NGOs which deal with HIV epidemic do not have the same vision of the World
than those dealing with the animal protection. In the previous analysis, the
actors had something in common and they were grouped on this base. For
example the firms that have been studied belong to the same country (i.e. we
studied British, German and French firms). In the case of the study about
country’s division of the World the common point was the origin of the data: all
the divisions of the World came from the website of the different Foreign Offices.
For all those reasons, the comments of the divisions of the World displayed by
the NGOs websites have to be used cautiously.

20
The analysis of global actors which refuse to divide the World would demand a specific analysis.

256
 Table 12-2 : first step of building the matrix. To which zone belongs a country?
Quest. n°1 Quest. n°2 (…)
Afghanistan Asia Wider Asian Area (…)
Albania Europe Europe (…)
Algeria Africa Mediter Africa (…)
Angola Africa Sub Equatorial Africa (…)
Argentina South America Latin America (…)
Armenia Asia Wider Asian Area (…)
Australia Australia Pacific area (…)
Austria Europe Europe (…)
Azerbaijan Asia Wider Asian Area (…)
Bahamas South America Latin America (…)
Bahrain Asia Mediter Africa (…)
Bangladesh Asia Wider Asian Area (…)
Belarus Europe Europe (…)
Belgium Europe Europe (…)
Belize South America Latin America (…)
(…) (…) (…) (…)

Table 12-3 : second step of building the matrix. For each questionnaires a matrix has been built
Afghanistan Albania Algeria (…)
Quest. n°1 Asia Europe Africa (…)
Afghanistan Asia 1 0 0 (…)
Albania Europe 0 1 0 (…)
Algeria Africa 0 0 1 (…)
Angola Africa 0 0 1 (…)
Argentina South America 0 0 0 (…)
Armenia Asia 1 0 0 (…)
Australia Australia 0 0 0 (…)
Austria Europe 0 1 0 (…)
Azerbaijan Asia 1 0 0 (…)
Bahamas South America 0 0 0 (…)
Bahrain Asia 1 0 0 (…)
Bangladesh Asia 1 0 0 (…)
Belarus Europe 0 1 0 (…)
Belgium Europe 0 1 0 (…)
Belize South America 0 0 0 (…)
(…) (…) (…) (…) (…) (…)

Table 12-4 : third step of building the matrix. Sum of all individual matrixes
Afghanistan Albania Algeria Angola Argentina Armenia (…)
Afghanistan 110 0 14 7 6 59 (…)
Albania 0 110 9 1 2 19 (…)
Algeria 14 9 110 49 3 19 (…)
Angola 7 1 49 110 4 5 (…)
Argentina 6 2 3 4 110 4 (…)
Armenia 59 19 19 5 4 110 (…)
(…) (…) (…) (…) (…) (…) (…) (…)

257
12.1.4 How we get the results

12.1.4.1 Data modelling

One table and two different matrixes need to be built to make the analysis. In a
first step, a simple table has been built that indicates to which region each
country belongs in each questionnaire (for the survey of the case study) or in
each website (for this Key Question) (table 12-2.). For example, for the
questionnaire n°1, Afghanistan belongs to Asia.
Then, an elementary matrix is issued from each column of the previous table. For
each questionnaire, one matrix is built, checking the common belonging of two
countries to the same region (table 12-3.). The box is filled up with a “1” when
two countries belong to the same region and a “0” otherwise. For example, in the
table 12-3., Armenia and Afghanistan have been included in the same “Asia”
region: the box is filled with “1”.
The synthetic matrix is the sum of all the elementary matrixes (table 12-4.). The
number in a particular box shows how many times two countries have been
included in the same zone by the considered sample of actors or by the ESPON
seminar participants. For example, Armenia and Afghanistan belong to the same
zone for 59 questionnaires obtained from the ESPON community in Luxembourg
in May 2005.

12.1.4.2 Methodology for analysis

The aim of the analysis was to propose clusters of countries that were: Always or
often included together in the same region and generally associated with the
same countries.

To build the clusters, we have to chose a similarity index as explained in the

Europe in the World project’s first interim report (part C.3: Methodological
framework for the analysis of flows and structures). A hierarchical ascendant
analysis can then be used in order to build clusters by joining at each step the
two most similar elements or clusters. In the final step, all the elements (i.e.
countries) are gathered in the same cluster.

The problem is that the results depend heavily on the choice of the
dissimilarity/similarity index and that many mathematical solutions are available,
underlying different conceptual assumption. We wanted to join states which are
not only present in the same regions but also excluded from the same ones
which means that the synthetic matrix was not sufficient as it focus only on
common belonging and do not take into common excluding. Consequently, the
solution was to use a correlation index. One well knows coefficient index, Pearson

258
index, can be used in similarity computation. It is a measure of the strength of
the associations between two variables. This method have been used on all the
matrixes that have be built to study the divisions of the World proposed by firms,
NGOs, International Organisation or Countries.

12.1.4.3 Maps of Synthesis of the divisions

To choose the number of region to represent on the synthetic maps of the

division of the World of firms, International Organisation and NGOs we rely on
the hierarchical tree of the hierarchical ascendant analysis and on the related
indexes. The following graph (figure 12-8.) presents the hierarchical tree for
NGOs. Mathematical criteria suggest that the 1st more significant level of
partition is in five clusters. The second one is in four clusters but we did not take
it into account as is make less regions that previously while what it is interesting
is to find sublevels. So we used the 3rd more significant level of partition that
produces a regionalisation in 8 zones.

Figure 12-8 : hierarchical tree for NGOs

One exception has been made for the synthetic maps (12-1 to 12-3) of firms,
because here the aim was to make easier the comparison between the different
countries of origin of firms. We tried to use the more significant partition that
would apply to the three maps and that would allow to observe enough sub
levels.

We choose not to name ourselves the regions produced by the synthetic analysis
of the division of the World by firms, NGOs and International Organisations.
Indeed that would induce to use pseudo “neutral” names, i.e. names linked to

259
the geography and the traditional division in continents, while we precisely think
that the division are not neutral. More, name them would influence the reader by
imposing him our point of view on the composition of the regions. That is why all
synthetic maps identified the regions anonymously.

12.1.4.4 Map of the limits of regions

This map (12-6.) was obtained by adding the limits proposed by the
International Organisations. When an International organisation proposed more
than one division of the World (UNDP or World Bank for example), we used only
one of them for the building of this map. When large and small divisions where
proposed, we used the larger one because the number of zones were closer to
the average number of zones proposed by other organisations. For example, The
United Nation Refugee Agency proposed large regions and sub regions. Only the
large regions have been used to build this map. When zones have been based on
other criteria than geographical ones (indebtness, wealth, development), we
used only the geographical criteria.

12.1.5 Results

12.1.5.1 Continentalisation

The division of the World proposed by the different actors shows a strong
tendency to use the traditional continents figure as a support for the drawing of
the regions. This trend can be first noticed in the average number of zones
drawn and then in the limits used.

Number of regions
The average number of zones, identified by the different actors, ranges between
5.6 (for British firms) and 7.2 (for International organisation) (table 12-5). That
reminds clearly the traditional number of continents that are generally presented
as being 5, but often 6 when two Americas are distinguished (Cf. First Interim
Report, ESPON 3.4.1. Europe in the World).

260
 Table 12-5 : number of regions
British German French International
Countries NGOs
Firms Firms Firms Organisation
Minimum 3 2 4 6 5 4
Average 5,6 6,9 6,6 6,7 7,2 6,6
Maximum 14 9 9 9 10 11
1st cluster level 3 4 4 X 4 5
2nd cluster level 4 2 5 X 6 4

This is particularly true on the countries’ Foreign Office websites (Map 12-4.).
The divisions in regions show a division of the World into 6 to 9 zones. The four
European countries included in the analysis, i.e. France, Germany, Italy and
United-Kingdom show a division in six parts. Northern America countries (U.S.A.
and Canada) propose a division in seven parts. Asiatic countries show a division
in 7 (Japan) and 9 parts (China). But Germany and Italy follow strictly the
traditional division in continents established in the 20th century. The only
difference between them is the limit between North and South America. The
small countries of Central America are included in North America according
Germany but in South America according Italy.

Localisation of limits

Additionally, the synthesis of limits proposed by International Organisation (maps

12-5) clearly shows that continental bodies are privileged in the drawing of
zones. Stronger limits are located between two continents, in the sea or ocean.
That is the case for the limit crossing Atlantic, Indian and Pacific oceans from
North to South. But it is also the case for the far less large Mediterranean Sea
between Europe and Africa and even for the Red Sea between Africa and Arabic
peninsula.

Terrestrial limits are always thinner than maritime ones because it is apparently
more sensible, from a political point of view, to draw a line dividing lands and
people than crossing a neutral aquatic surface. The exceptions are the limits
drawn between Russian Federation and the Chinese World, i.e. Mongolia and
China, and between North America, on the hand, and Mexico and South America,
on the other hand. Those two exceptions will be detailed later.

261
Map 12-1 : French firms dividing the Map 12-2 : German firms dividing the Map 12-3 : British firms dividing the
World World World

262
 12.1.5.2 Other “Geographical” factors for subdivisions?

As International organisations are more likely to build additional subdivisions, is

it possible to find if further geophysical characteristics of a group of countries can
contribute to identify them as a sub-level? Observing the maps 12-4 it seems to
be the case for the Caribbean and the Melanesian regions. Those regions are
defined by the fact that the countries which constitute them are Islands. But, if
so, what are the common geographical characters between Kazakhstan and
Japan that could justify they are put in the same region?

Other factors that could explain the shape of some regions and the position of
some limits are the localisation of natural obstacles like deserts and mountains
that are very low populated area. Indeed, the Sahara often appear like a limit
when global actors identified a North African region and Himalaya too when India
and China are placed in two different regions. However it is difficult to know if
those natural obstacles seem significant in the drawing of the region because
people identified them as such; or if they appear because they had a great role
in the cultural differentiation of population located on each side of the obstacle
and that this is this cultural difference that is used as a criteria to compose the
zones.

263
Map 12-4 : Countries dividing the World

264
Map 12-5 : International Organisations dividing the World

Map 12-6 : the limits of zones by International Organisation

265
Moving composition of “continents”

When using the clustering method to produce a synthesis of the regions

proposed, one has to notice that the first more significant step produces cluster
in 3 to 5 regions; but more often 4 regions. For example, the synthesis of the
division of the World from the International Organisation point of view is done in
four regions. The two first ones to be identified are two zones that have a
coherent shape from on continental point of view. In the pink colour comes first
Africa, as a whole, without any distinction between northern Africa countries and
sub-Saharan ones. In the green colour, International organisations identify South
America countries, including Mexico, Central America and Caribbean countries.
Those two regions seem to have such an internal coherence that they are
identified in the first step and are no more divided till the end of the analysis.
The other regions to be identified are Asia, on the one hand, and the Europe-
North America on another hand. These regions will be then facing more divisions.
But those fourth first steps seem to underline the use of a continental base to
draw the regions, plus another criterion that could be either economical or
cultural in the case of the Europe-North America region.

The following table (12-6) tries to summarize the composition of the regions that
are formed. Even with so few regions, their composition is quite different
according to various actors. That shows that the concept of continent is a moving
one.

Table 12-6 : composition of regions formed by the most significant partition

More significant partitions

British Firms (3 regions) Europe – Americas – Rest of the World
German Firms Europe – Asia – Africa – Americas
French Firms Europe – Africa & Middle East & Central Asia – Asia – Americas
International Organisations Africa - South America – Asia – Europe and North America
NGOs (5 regions) Americas – Europe – Asia – Sub Saharan Africa – North Africa
and Middle East.

Conclusion on continent

Following so clearly continental bodies and avoiding drawing terrestrial limits on

the one hand, and using more often average number of 5.6 to 7.2 regions shows
the will of the different actors studied here to promote the idea that they use all
at some degree the continents to draw their regions. That makes the divisions
more consensual, more legitimate in the public opinion as it is not based on
contestable criteria but on the so-called “real facts” taught by geography. The
question is therefore the following one: is it impossible, in a politically correct
way, to divide the World in less than 5 zones, or in more than 7 or eight?

266
The previous paragraph dedicated to the moving composition of the continents
shows that, in fact, geography is not a “hard fact”. The supposed neutral
continental division of the World that are proposed are still representations and
interpretation of other phenomena which is clearly enlighten by the recurrent
aggregation of Europe and Northern America. The following parts will be an
attempt to show which criteria are often used in the drawing of World regions.

12.1.5.3 Cultural factors

Among the other criteria, the first that seem to be used in the drawing of World
regions are those related to cultural facts.

An Arab-Muslim region

The economic and more probably the so called “cultural”21 differences are
certainly at the origin of the division (map 12-6) between North African Countries
and Sub-Saharan ones. The rest of Africa is nearly not divided except for Sudan
that is sometimes placed together with sub-Saharan countries, sometimes with
North African ones because to the main religion of the country is Islam.
The use of the “cultural” factor is particularly striking when one observes the
maps that make a synthesis of the World regions proposed by NGOs (Maps 12-7
& 12-8). The most significant partition, when studying the division of the World
from NGOs point of view, is a partition in 5 regions. If this number matches the
traditional number of the continents, this division in 5 zones is far less neutral
that it is in the case of the other actors. In fact, the regions proposed include a
“North African – Middle east” region that is mainly based on civilisation criteria,
from Huntington’s definition of civilisation, i.e. mainly religion. Neither firms, nor
international public organisation dare do so, even in nine regions. Only countries
propose a “Muslim region”.

Two interpretations can be given to this Muslim region. Either, the NGOs are
mainly of western origins and adopt their countries point of view. Or the
civilisation aspect is very important for NGOs and they act in different countries
with social workers and the population. In consequence, the religion and
language of North African and Middle East countries may be an essential
parameter to be taken into account, if the action of the NGOs is to work with
woman or child concerns. But therefore, there should be more distinctions inside
Asia, because Indonesia is the first Muslim country of the World. The religion is

21
This fuzzy term is employed here as the conglomerate of linguistic, sociologic, historical, religious etc.
criteria which are generally difficult to measure and to combine on an objective basis.

267
not the only criteria. The linguistic and “ethnic” ones are implicitly used to and
we have here an Arab-Muslim region.

Concerning the countries, actually only two of them do not propose such a
region: Germany and Italy follow a very consensual division of the World that is
the division in continents. Among the others, the size of the Arab-Muslim region
varies very much: Japan proposes a very small zone concentrated on Persian
Gulf that is maybe more related to energetic supplying than to religious criteria.
Another remark concerning this region is the place of Turkey. For Asiatic
countries (Japan and China), Turkey belongs to the Arabic-Muslim Region. For
European countries which draw this zone and North-American ones, Turkey
clearly belongs to Europe.

Map 12-8 : NGOs dividing the World in 8

Map 12-7 : NGOs dividing the World in 5
regions
regions

Australia, a part of Asia?

The position of Australia is another phenomenon that can be studied in the light
of cultural considerations. Australia is sometimes considered as a part of Asia,
sometimes as a specific region that is called Oceania. From the continental point
of view, Australia is perceived as the fifth continent and its history links it with
the Western civilisation. Australia has been populated from Great Britain and it is
still part of the Commonwealth. This suggests that Great Britain, European and
North American countries considered it as something apart and therefore not to
be included in an Asian region. In fact, when observing the maps, one could see
that, on the contrary, only British firms, NGOs and Anglophone countries
consider it as a part of Asia. Maybe only the English speaking World agrees with

268
the claim of Australia to belong to Asia, at least from an economical and
functional point of view. Other countries consider it as a part of Oceania, except
for China that puts it in the same region as North America (i.e. Canada and
United States), in a region that could be defined as a non-European western
civilization region. It is related to the way that China produces World map (Figure
12-9). This western presence on the two shores of the Pacific Ocean can be of
great strategic importance from a Chinese point of view.

Map 12-9 : example of Chinese World map.

Source: China Radio International <http://www.chinabroadcast.cn/>

Struggle for influence

The question of cultural region is raised particularly when observing the spaces
that are sometimes included in a region and sometimes in another one. More
generally, the map 12-6. allows to notice that when a country or a small group of
countries are circled by a limit, those places are zones of conflicts or, at least,
zones of political tension. The tension can come from the challenge between
different geopolitical entities in their attempts to control this space, either
politically or economically speaking.

That is the case for example for the countries of Central Asia, where Russian
Federation tries to keep its historical dominant position, but where other political
actors try to play an important role because of their strategic position in an oil
supplying perspective. European Union and U.S.A. try to control the region, but
also other new coming regional actors such as India and China, for which those
countries are of great importance. Moreover, those countries are mainly Muslim
ones that make them closer, from a cultural point of view to Iran Republic and
Turkey. However the stronger limit is in the south of the Central Asian countries.

269
That may means that the influence of the Russian Federation is still perceived as
the most important one in the region. More, only China draws a specific Russian
region that includes Ukraine, Belarus, Caucasian countries and Central Asian
countries. Maybe from political and strategic point of view, China prefers to have
the former Soviet Empire to its side, unless it is one more time something like a
civilization point of view.

The other countries that are rather isolated between two (or more) different
political and economical influences are Turkey, Greenland and the three small
Caucasian countries. Turkey is isolated between two large limits, between its
claiming to be a part of the European Union, its historical links with it and its
cultural origins that are Central Asian and Muslim ones, even if Mustapha Kemal
tried to make people forget their cultural belonging and to make them feel
European. Greenland is split between its institutional belonging to Denmark and
its cultural and geographical proximity to North America and more precisely
Canada. Georgia and even more Armenia and Azerbaijan (which was formerly a
Persian province), are divided between their former belonging to Soviet Union
and their cultural belonging to Central Asian Muslim region. The synthetic maps
of regions show therefore that they are sometimes included into Asia, sometimes
into Europe, at least in the periphery of Europe. One other strong hesitation is
that between North America, on the one hand, and Mexico and South America,
on the other hand. This limit, from the international organisations’ point of view,
can be drawn by taking the level of development and the language and other
cultural feature into consideration. No matter the trade agreement between
North America and Mexico, Mexico is closer from a cultural point of view to the
rest of South America. The hesitation is quite visible on all maps, but it is maybe
more based on development facts than on cultural ones.

12.1.5.4 Development Perceptions

Sometime, when exploring a website of an international organisation, one can

find other interesting divisions. For example, the discounts allowed for individuals
from some specific countries in the purchasing of the data produced by the
organisation are mapped. They can be seen as a way to divide the World. It is
the case of the World Bank (Maps n°12-9 & 12-12). People or administration of
some developing countries can get a 75% discount. Others from more developed
countries 35% discount. At last, people from developed countries can’t get any
discount. Those divisions are not official ones, but they are effective ones based
on some concrete criteria. In consequence it is interesting to integrate them in
the study, at least to help interpreting the result of the analysis. Strange
divisions of the World are often proposed, mixing geographical criteria and
development ones. Industrialised and developed countries are gathered in one

270
group without any attention paid to their geographical location. Developing
countries or emerging economies are grouped according to their geographical
location and the divisions seem to be made according physical criteria (the
Pacific) or cultural ones (Arab States). It is particularly obvious for the following
map built with the data provided on the World Bank (Map n°12-10) website in a
category that is called “geographical areas”. It is strange to observe that
developed countries “do not need” to be distinguished according cultural or
physical criteria and are not even affected to a specific zone.

But this kind of division is also made by the Food & Agricultural Organization
which proposes a division of the World mixing the development level and the
geography (Map n°12-11). As a consequence, the developed zone is divided into
“industrialised developed country” and “transition developed country”, while
developing countries are classified according to their geographical location
(South America & the Caribbean, South Asia, etc…).

271
Map 12-10 : Division of the World according to the World Bank - Geographical discount

Map 12-11 : Division of the World according to the World Bank - Geographical areas

272
 Map 12-12 : Division of the World according to the Food & Agricultural Organisation –
Development, sub-level

12.1.5.5 Europecentric view of the World

Last but not least, it seems that all the actors, even countries, adopt more or
less a Europecentric view of the World. This European point of view of the World
is clear when considering the maps that make the synthesis of British, German
and French firms division of the World (maps 5.3.1. to 5.3.3.). The first
observation is that there is a great difference between the division of the World
of French firms, on the one hand, and British and German firms, on the other
hand. The latter have distinguished Europe from the rest of the World in the first
step of the analysis. Concerning French firms, they rather make a distinction
between an “old World” (i.e. Eurasia and Africa) and a “new World” (America).

It can be noticed too on the International organisation map (5.3.5). For some
international organisation many divisions of the World exist. In most cases, there
is one upper level division of the World and one lower level. (Maps n°12-12).
What is striking is that for the general level, the word “region” is used in the
subtitle as if they were objective ones. For the subdivisions, they are presented
as “development” sub-levels as if the division were based on economic criteria.
However, one can notice that the names of the zones are geographical ones and
the cardinal points are used to name them (Western, Southern, Northern and

273
Eastern Europe for example). One can also notice the great differences between
their sizes. For example, Western Europe counts 7 countries and a very small
share of World surface and population. Nineteen countries belong to Eastern Asia
sub-region. Some of them are very large (China, India, Kazakhstan, Mongolia
and Iran) in term of surface and two of them are the most populated countries of
the World: China and India, each one gathering more than 1/6th of the
humankind. So what are the justifications for such unequal divisions of the
World? Is the European region divided in 4 sub-level of small size because slight
differences of economic orientation, development level or cultural facts between
the countries are well-known by the people working in the United Nation office?
Does that mean that Asia, from Iran to Japan, is not known as well as Europe?
Or does it mean that a Europecentric perception of the World dominates in the
United Nations Offices?

Map 12-13 : Division of the World according to the United Nation Population Division. Regions,
general level & Development, sub-level.

The other point that has to be noticed is the extension of Europe in the NGOs
point of view. It includes the Russian Federation and the former Soviet countries
of Eastern Europe, Central Asia and Caucasus, and also Turkey and Greenland.
But then, one more time, the European region is further divided, showing a
Western European perception of the World, with, on the one hand, Western
European countries and, on the other hand, European peripheral countries. The
only other region to be further divided is the North African & Middle East one. It
can be due to a good knowledge of those countries by NGOs, maybe because the
programmes implemented in those two spaces are of different kinds.

274
 Map 12-14 : smallest common denominator of regions

The previous map (12-14.) shows the lowest common denominator of the
regions from the countries map collection. Only four regions are identified. In
green are the countries always included in Asia, in purple the countries belonging
to Africa, in blue European countries and finally in yellow southern America
countries. The lighter colours are for the countries that have been isolated
(China) or place in another region (Sudan) only one. All regions are contiguous,
except the Asiatic one because of China that distinguishes itself in its
presentation of World regions. The countries in light cream-colour are those
which are at least once included in another region than that it is commonly
known to belong to. From a European point of view (half of the eight countries
studied are European ones, two are of European origin), this division could evoke
first a definition of Europe that is very different / far from Europe. The cream-
colour countries could be then those that are in an intermediate position between
what those defined by us as European and those defined by an absolute

275
otherness. Does it mean that the countries that rule the World have a European
centrist perception of the World, even Japan? From a functional point of view,
one could identify three peripheral areas and one of the poles of the triad
(Europe). However, some countries belonging to the Asiatic zone can be
considered as belonging to the triad to, such as Japan and some other south-
eastern countries (South Korea, Taiwan...).

276
 ESPON project 3.4.1.

Europe in the World

Final Report – Vol.3: Case studies

3
Co-financed by the European Community through the Interreg III ESPON Programme
 ESPON 3.4.1
Europe in the World

Final Report – Vol.3: Case studies

4
This report represents the final results of a research project conducted within the
framework of the ESPON 2000-2006 programme, partly financed through the
INTERREG programme.

The partnership behind the ESPON programme consists of the EU Commission and the
Member States of the EU25, plus Norway and Switzerland. Each partner is represented
in the ESPON Monitoring Committee.

This report does not necessarily reflect the opinion of the members of the Monitoring
Committee.

Information on the ESPON programme and projects can be found on www.espon.lu”

The web side provides the possibility to download and examine the most recent
document produced by finalised and ongoing ESPON projects.

ISBN number:
This basic report exists only in an electronic version.
Word version:

© The ESPON Monitoring Committee and the partners of the projects mentioned.

Printing, reproduction or quotation is authorized provided the source is acknowledged

and a copy is forwarded to the ESPON Coordination Unit in Luxembourg.

5
Participants

Scientific coordination

This work was coordinated by Claude Grasland (professor at University Paris 7, UMR Géographie-
cités) and Clarisse Didelon (Post Ph’D at University Paris 7, UMS RIATE)

Core Team

RIATE: Bernard Corminboeuf, Marc Guerrien, Nicolas Lambert, Isabelle Salmon

IGEAT: Laurent Aujean, Gilles Van Hammes, Pablo Medina, Christian

Vandermotten

ITPS: Mats Johansson, Daniel Rauhut

LADYSS: Pierre Beckouche, Yann Richard

UMR Géographie-cités : Nadine Cattan, Christian Grataloup, Guillaume Lesecq,

Christine Zanin

Experts

CRS HAS: Györgyi Barta, László Dancs, Imre Nagy, Alexandra Szigeti, Péter
Strömpl

TIGRIS - "Alexandru Ioan Cuza" University: Octavian Groza, Daniel

Condorachi, Ionel Muntele, Alexandru Rusu, Oana Stoleriu, Georgiana Voicu

ETH Zurich: Marco Keiner

GRUPO SOGES: Alberto Vanolo

ORMES: Mohamed Charef, M’hamed Wahbi

6
 TABLE OF CONTENTS

1. Survey on the representation of Europe and the World of the ESPON

community............................................................................................. 19
1.1 Justification of the case studies and link to key question ................... 19
1.2 Scale of the study. Clear indication of the space of study .................. 19
1.3 Hypothesis of the case study ........................................................ 20
1.4 Replicable methodology, problems, questions ................................. 21
1.5 Empirical result of the case study .................................................. 29
1.6 ESPON seminar particiants’ view of Europe ..................................... 31
1.7 ESPON seminar view of the World ................................................. 41
1.8 Limits of the case study ............................................................... 47
1.9 Conclusion ................................................................................. 51

2. The geography of Italian internationalization: relations with Central-Eastern

European and South and Eastern Mediterranean countries ............................ 60
2.1 Justification of the case studies and link to key questions ................. 60
2.2 Spaces and scales of the study ..................................................... 60
2.3 Hypothesis, problems, questions ................................................... 61
2.4 Methodology .............................................................................. 63
2.5 Empirical results of the case study................................................. 63
2.6 Conclusion ................................................................................. 71

3. The impact of delocalisation on the position of European regions in value

chains ................................................................................................... 74
3.1 The example of textile value chain in three marshallian district. ......... 74
3.2 Context of case study .................................................................. 76
3.3 General hypothesis...................................................................... 78
3.4 Replicable methodology, problems, questions ................................. 79
3.5 Empirical result of the case study: Specific reactions of the marshallian
districts to globalization ........................................................................ 80

4. Migration Flows and Implications: Case Studies on France, Hungary and

Sweden ................................................................................................. 91
4.1 Introduction ............................................................................... 91
4.2 Migration Flows........................................................................... 92
4.3 The Immigrants’ Choice of Settlement ........................................... 96
4.4 Factor Prices and Substitutability: A Simple Model .......................... 96
4.5 The Future Immigration Demand................................................... 99
4.6 Scenarios .................................................................................101
4.7 Concluding Remarks ...................................................................104
4.8 References ................................................................................105

5. Russia and Europe: the scales and geographies of a complex neighbourhood

relation ................................................................................................108
5.1 What is the state of the economic relationship between EU and Russia,
at different scales? ..............................................................................109

7
 5.2 A strong barrier effect at the local level: the cooperation for the
implementation of cross border projects is under developed......................122
5.3 Policy orientations ......................................................................136

6. Hungary – the new border of the European Union .................................140

6.1 Introduction ..............................................................................140
6.2 Social and economic differences after 1990....................................142
6.3 Political, social and economic relations between Romania and Hungary,
Serbia and Hungary prior to Hungary’s accession to the EU.......................152
6.4 How does Romania relate to Hungary after its accession to the European
Union?...............................................................................................176

7. Romania as Eastern border of the European Union................................189

7.1 Introduction ..............................................................................189
7.2 General Assumptions ..................................................................190
7.3 L'entre deux: Romania between West and East ..............................193
7.4 Conclusion ................................................................................214

8. Focus on Switzerland ........................................................................216

8.1 Introduction ..............................................................................216
8.2 Development trends of the European union and Switzerland.............217
8.3 The European policy of the Swiss federal council.............................221
8.4 Stages of swiss european policy ...................................................222
8.5 Eu accession .............................................................................230
8.6 Bilateral agreements i between switzerland and the european union of
1999 238
8.7 Blateral agreements ii Switzerland – EU (as of February 2005) .........243

9. Mobilities in Western Mediterranean Sea: the other geographic continuity.

259
9.1 Introduction ..............................................................................259
9.2 Moroccan migrants in Europe and in the World ...............................261
9.3 Migrants: essential contribution to Moroccan economy and society. ...268
9.4 Laws and migration management in Morocco .................................276
9.5 Conclusion ................................................................................282

8
 FIGURES

Figure 1 : gradation in the belonging to Europe ........................................... 23

Figure 2 : example of a problem of codification ........................................... 23
Figure 3 : dealing with the recovering zones .............................................. 25
Figure 4 : solving the problem of recovering zones. ..................................... 25
Figure 5 : a World map from the preliminary survey (P.S.1.3.1) .................... 26
Figure 6 : a World map from the survey (S.51) ........................................... 26
Figure 7 : criteria grouping....................................................................... 28
Figure 8 : ESPON members’ profile ............................................................ 30
Figure 9 : the size of Europe.................................................................... 32
Figure 10 : first (PLAN FACTORIEL (PLOT) of an MCA on European countries. . 35
Figure 11 : A relation between the visits of a country and the appreciation of its
belonging to Europe?......................................................................... 41
Figure 12 : hierarchical tree of the classification .......................................... 42
Figure 13 : Investments as percentage of GDP in Poland, Czech Republic,
Slovakia, Slovenia, Hungary and Romania, Nuts 2 level, 2000 ................. 67
Figure 14 : Exportations (on the left) and importations (on the right) from the
South and Eastern Mediterranean countries, per region, 2003 ................. 71
Figure 15 : The Relation between the Quantity of Labour and the Price of Labour
...................................................................................................... 97
Figure 16 : Intersections between regional trends and EU enlargement .........102
Figure 17 : Evolution of Russian exports and imports to and from the countries of
the Triad.........................................................................................110
Figure 18 : Evolution of UE 15 exports and imports to and from neighbour
countries. .......................................................................................111
Figure 19 : Evolution of exports and imports (in euros) of EU 25 from 2000 to
2004. .............................................................................................112
Figure 20 : Evolution of Russia’s share in the external trade of some CEE
countries. .......................................................................................113
Figure 21 :FDI inward flows and inward stocks. ..........................................114
Figure 22 : Rhythm of evolution of external trade of Estonia and Latvia. ........115
Figure 23 : Foreign direct investments in Estonia and Latvia. ......................117
Figure 24 : Evolution of transit traffic in Estonia and Latvia. ........................120
Figure 25 : Annual income in North Western Russia in 2004, Evolution of gross
.....................................................................................................126
Figure 26 : Evolution of regional economic indicators. ................................130
Figure 27 : Competitiveness of European countries .....................................144
Figure 28 : Telephone penetration in transition economies in 1989 and 1997..146
Figure 29 : The evolution of Hungarian-Romanian foreign trade from 1989 to
2004 ..............................................................................................152
Figure 30 : The evolution of Hungarian and Romanian mutual investment from
1998 to 2003...................................................................................154
Figure 31 : The distribution of Hungarian work permits on nationality criteria in
the first half of 2002.........................................................................156
Figure 32 : Distribution by counties of the effective number of work permits
released to foreigners (31 December 1999.) ........................................157
Figure 33 : The evolution of the residence permits’ number according to
citizenship (2002–2004) ...................................................................158
Figure 34 : The number of Romanian visitors in Hungary according to their travel
destinations ....................................................................................160

9
Figure 35 : The distribution of several-days visitors from Romania to Hungary
according to touristic regions .............................................................161
Figure 36 : The nature of relations between the inhabitants of the settlements
across the Hungarian-Romanian border (measured by their frequency) ...164
Figure 37 : The situation of the Yugoslav enterprises in the counties of South
Great Hungarian Plain (Dél-Alföld) 1996–1999 .....................................167
Figure 38 : The evolution of the residence permits’ number according to
citizenship (2002–2004) ...................................................................168
Figure 39 : Number (thousands) of the arriving tourists from the neighbouring
states.............................................................................................174
Figure 40 : The territorial organization scheme in Central-east Europe...........207
Figure 41 : Comparison between Switzerland, the EU – 15 and new EU members:
average annual growth rate 1994-2000 (in %).....................................255
Figure 42 : Swiss Imports and Exports 2002 ..............................................255
Figure 43 : Swiss direct investments in the EU-15 in CHF bn. .......................256
Figure 44 : Swiss direct investments from the EU-15 in Switzerland in CHF bn.
.....................................................................................................256
Figure 45 : Permanent foreign resident population in Switzerland; proportion (in
%) by nationality at the end of December 2002 ...................................256
Figure 46 : monetary transfers from Moroccan abroad (millions of dirhams) ...269
Figure 47 : Monthly travellers between France and Morocco between 1990 and
1995. .............................................................................................275

10
 MAPS

Map 1 : Countries placed in/out Europe and those that are placed sometime
in/sometime out or that are divided..................................................... 33
Map 2 : Frequency of inclusion of a country (as a whole) in Europe ................ 34
Map 3 : Typology of European margins according to how they are perceived in
the survey ....................................................................................... 37
Map 4 : Number of people who give back a questionnaire who have visited the
country ........................................................................................... 40
Map 5 : The World in four regions ............................................................ 43
Map 6 : The World in eight regions ............................................................ 45
Map 7 : the World in fifteen regions ........................................................... 46
Map 8 : limits and links............................................................................ 48
Map 9 : countries divided in two parts........................................................ 50
Map 10 : location of marshallian industrial districts considered in this case study.
...................................................................................................... 76
Map 11 : Regional Neighbourhood immigration to Hungary in 2000 ................ 92
Map 12 : Regional Neighbourhood immigration to Sweden in 2000................. 94
Map 13 : Gross immigration to France in 2000 ........................................... 95
Map 14 : Gross Domestic Product of Latvian Districts in 2004.......................127
Map 15 : Variation of Gross Domestic Product of Latvian Districts between 1996
and 2004).......................................................................................128
Map 16 : Unemployment Rate of Estonia’s counties in 2004 .........................131
Map 17 : Variation of unemployment rate of Estonia’s counties from 1997 to
2004 ..............................................................................................131
Map 18 : Gross Domestic Product of Latvian Districts from 2000 to 2004 (annual
average).........................................................................................132
Map 19 : External Trade of Estonia’s Counties in 1993.................................132
Map 20 : Gross Domestic Product of Estonia’s Regions in 2003 .....................133
Map 21 : Roads and Railroads in Baltic States ............................................135
Map 22 : Studied countries......................................................................140
Map 23 : GDP per capita in European countries ..........................................143
Map 24 : Regional differences in the GDP per capita of the three countries.....143
Map 25 : Yugoslav enterprises in the settlements of the Southern Great Plains
.....................................................................................................166
Map 26 : European transport corridors and the concession made to Romania:
how the IV European corridor intersects Romania .................................186
Map 27 : The IV corridor at present: motorway with „political detour” in Banat
.....................................................................................................187
Map 28 : Bechtel / Transylvania highway..................................................187
Map 29 : The Romanian territory between 1850 and 1900 ...........................194
Map 30 : Romania as cultural interface .....................................................195
Map 31 : Romania in the core of the Euro-Asian peripheries .........................196
Map 32 : The western tropism of the post-communist Romania ....................197
Map 33 : The search of an international affirmation and national security.......200
Map 34 : Migrations and welfare gradient in Central-east Europe ..................203
Map 35 : The West-East diffusion of the demographic transition in Romania ...205
Map 36 : Spatial diffusion of the automobile in postcommunist Romania ........205
Map 37 : The origin of the FDI in Romania.................................................210
Map 38 : Distribution by county of the FDI stock ........................................211
Map 39 : Spatial patterns of the Romanian external trade............................213

11
Map 40 : Trans-Alpine movements of Goods: Transit Routes ........................257
Map 41 : Number of Moroccan citizens listed in consular services, by region, in
2004. .............................................................................................262
Map 42 : Variation of the number of Moroccan citizen listed in consular services,
by countries, between 2002 and 2004.................................................263
Map 43 : Number of Moroccan citizens listed in consular services in 2004. .....266
Map 44 : variation of the number of Moroccan citizen listed in consular services,
by country, between 2002 and 2004...................................................267
Map 45 : transfer of funds from the Moroccan abroad to Morocco between 1990
and 1994. .......................................................................................270
Map 46 : transfer of funds from the Moroccan abroad to Morocco betwen 1999
and 2003. .......................................................................................271
Map 47 : Evolution of transfer of funds from the Moroccan residents abroad to
Morocco between 1990 and 2003 .......................................................271

12
 TABLES

Table 1 : example of codification ............................................................... 24

Table 2 : Frequency of use of criteria ........................................................ 28
Table 3 : Oppositions in the first axis ........................................................ 30
Table 4 : Oppositions in the second axis .................................................... 30
Table 5 : number of countries included in Europe ....................................... 32
Table 6 : Size of Europe and Physical geography criterion ............................. 36
Table 7 : Ukraine and Turkey in Europe..................................................... 38
Table 8 : Correlation Indexes................................................................... 50
Table 9 : Number of inter-firm shareholdings in Central-Eastern Europe by
geographical area and economic sector ................................................ 66
Table 10 : Number of inter-firm shareholdings in Southern and Eastern
Mediterranean Countries by geographical area and economic sector ......... 70
Table 11 : Scale of the regional case studies around 2002 ........................... 75
Table 12 : Textiles output and employment in Belgium, Denmark and Italy,
1984-1999....................................................................................... 78
Table 13 : Economic performances of some regions including industrial districts,
1995-2002 (National level is between brackets) .................................... 80
Table 14 : Evolution of the industrial structure, from 1958 to 2002 .............. 82
Table 15 : Evolution of the employment in Prato, compared to Toscana and
Italy, 1981-2001............................................................................... 85
Table 16 : Evolution and structure of the employment by section in Prato
province, 2001. ................................................................................ 86
Table 17 : Average annual growth of the employment of the Herning-Ikast
district, in regard to its regional and national environment, 1984-2004..... 89
Table 18 : Evolution of the employment by sector in the Herning-Ikast district,
1994-2004....................................................................................... 89
Table 19 : GDP/capita (Hungary = 100%) ................................................142
Table 20 : Employment rate, 2001 ..........................................................144
Table 21 : Unemployment level in 2001 ...................................................144
Table 22 : GDP and employment by major economic sectors, 1995 and 2001 146
Table 23 : The current situation (2001) and occurring changes in the
infrastructural supply (%) from 1995 to 2001 ......................................147
Table 24 : Infant mortality in 2000 ..........................................................148
Table 25 : Life expectancy at birth in 2000 ...............................................149
Table 26 : Foreign direct investment (net inflows recorded in the balance of
payments) ......................................................................................149
Table 27 : :External debt in 2003 ............................................................150
Table 28 : Transition indicator scores, 2004..............................................151
Table 29 : The number of foreign students coming to Hungary from the
neighbouring countries .....................................................................159
Table 30 : Comparison of some economic indicators of Voivodina and Serbia.165
Table 31 : The evolution of the bilateral trade 2001–2002 ..........................171
Table 32 : The number of the foreign students arriving from the neighbouring
countries in every faculties (persons)..................................................173
Table 33 : Distribution of FDI in Romania (1990-2004 stock)by economic
development region..........................................................................207
Table 34 : Romania: geographical origin of the FDI (1990-2005 stock) .........209
Table 35 : Foreign trade ........................................................................257
Table 36 : Direct Investment ..................................................................257

13
Table 37 : Manpower in Swiss Firms Abroad .............................................257
Table 38 : Commercial Exchange with the EU according to product categories
2001 ..............................................................................................258
Table 39 : Foreigners in Switzerland (12/2002) .........................................258
Table 40 : Swiss Citizens Aboard ( June 2002) ..........................................258
Table 41 : Growth of GNP in % ...............................................................258
Table 42 : Rate of Unemployment in % of Wage-Earners ............................258
Table 43 : ratified conventions by Mediterranean countries .........................281

14
 INTRODUCTION TO CASE STUDIES

This third volume of the final report is especially dedicated to the extensive
presentation of 9 case studies. All of them are already shortly presented inside
boxes, in order to complete and to make more concrete the synthetic
presentations of the first volume. Almost all the case studies presented below
were already provided by the second volume of the Second Interim Report but
most of them had not reached the final stage of their elaboration.

Henceforth, the value added of the third volume lies in the possibility to read the
entire texts of each case study, on the one hand, and to enjoy an impressive set
of graphs, tables and maps which can not be introduced in the first one. All these
case studies are directly connected to the themes developed in the four key
questions. They shall provide the readers of the report with more precise
information. In some cases, they shall also give them the opportunity to raise
questions and to develop analyses which were not necessarily highlighted in the
first volume.

The following case studies can be distributed in several groups according to the
key question they are connected with. The more comprehensive one is a study of
the representations of Europe and the World (page 19) which prevail among the
experts of the ESPON program, who constitute the so-called ESPON community.
This study was set up by the Team RIATE during the Luxembourg ESPON
seminar in May 2005 and during meetings of several TPG groups, which were
held since 2004.

Others are explicitly dedicated to the way that ESPON is embedded in the
globalization. They point at the consequences of this process as an efficient
factor of differentiations inside the ESPON territory, through three examples. Two
of them have an explicit economic content. One aims to show the place and role
of Italian firms in the globalization process and the consequences of this process

15
on the organization of the Italian economic space (page 60). What is the
geographical orientation of the Italian firms? Which Italian regions take
advantage from the internationalisation process? The second one aims to show
the consequences of the growing openness of the European economy on the
recent performances of three marshallian districts (page 74). The last one is
indirectly connected to the economic issue and is more focused on demography
(page 91). It aims at distinguishing various immigration patterns in several
ESPON countries. It addresses the role of international migrations as a response
to the growing problem of labour shortage in a rapidly ageing Europe.

Five other case studies are connected to the “neighbourhood” key question, and
they follow a multiscalar method. They address, more or less explicitly, the
relations of EU with various neighbour countries such as Russia, Belarus, former
Yugoslavia, Morocco, Switzerland, and so on. In a more detailed way, they also
point at the evolution of relations between those neighbours with certain EU
members and eventually with regions of these EU members. Consequently, they
give clues to understand the impact of the neighbourhood’s evolutions on the
ESPON territory at different levels through various issues such as trade,
investments and migration flows, remittance flows, cross border cooperation,
political relations, etc.

What are the main outcomes of these in-depth studies?

1. Some indicators show that the neighbourhood is more and more closely
connected to the European space. Some others show that neighbour
countries and regions more and more look like ESPON ones. Such
conclusions should lead each European citizen to re-evaluate the relevance
of the continental definition of Europe, characterized by would-be “once-
for-all-defined” limits (Mediterranean, Urals, etc.). To this respect, the
ESPON community is in the mainstream, showing opinions perfectly in line
with the prevailing representation of Europe, as a closed and strictly
limited continent. One can wonder what would happen if the outside (that
is the neighbourhood) were more often taken into account for the
conception and implementation of the European regional policy.
2. They all empirically confirm that ESPON and EU are not isolated or closed
entities. They are totally embedded in the globalization. They not only play
a role in the organization and the dynamics of the global space at various
levels. They are opened to the outside: the spatial differentiations of their
territory are partly conditioned by what happens outside.
3. There are conspicuous interactions between internal ESPON’s and outside
evolutions. Such interactions do not follow the same evolutions and do not
necessarily have the same consequences at the macro-level
(neighbourhood and EU relations), the meso-level (neighbour country and

16
 ESPON member state relations) and the micro-level (neighbour regions
and member states’ regions relations).
4. There is an impressive variety of responses of ESPON’s regions and states
to outside evolutions and global processes. It is then hard to foresee their
consequences and to use such evolutions and processes as means for the
spatial planning and the local development in the ESPON states. The case
of migrations flows is particularly relevant. It perfectly demonstrates that
these flows can not be easily used to compensate labour shortage and
worrying demographic trends in rural and peripheral parts of Europe.

We hope that these case studies will provide not only the readers of this report
but also the partners of other ESPON projects with valuable inputs, especially the
projects 3.2 (Scenarios) and 3.3 (Lisbon Strategy). We also hope that the main
outcomes of this third volume will be eventually used by the members of the
ESPON Monitoring Committee, independently from the results of the ESPON
project “Europe in the World, The World in Europe”.

17
 Partie A

ESPON Survey on Europe and the World

18
 1. SURVEY ON THE REPRESENTATION OF EUROPE AND THE WORLD OF THE
ESPON COMMUNITY

Clarisse Didelon
UMS RIATE

Come, here’s the map: shall we divide our

right
According to our threefold order ta’en?
W. Shakespeare, Henri IV, Act 3, Scene1

1.1 Justification of the case studies and link to key question

This case study is integrated to the Key Question “Delimitation of World

Regions”. One of the aims of the “Europe in the World” project is to propose an
efficient World division in regions. This regionalisation of the World is supposed
to serve as a support to the European International policy, especially in the
development of aid flows matters and neighbourhood policy. Therefore, it is
interesting to determine which delimitation of World regions researchers,
administrators and policy makers of the ESPON program have in their minds, in
order to evaluate to which degree the delimitation that will be proposed by the
project is a new one / not obvious one, and consequently how difficult it will be
to make it accepted by policy makers. This survey aims also to determiner to
which degree the mental map of the World of people is determine by their
knowledge of different phenomenon like geographic, climatic, economic, historic,
political ones.

The “Survey on the vision of the World of the ESPON community” was
undertaken under the responsibility of UMS RIATE as a complement to the
databases produced in the work package W.P.2.6. This work package aimed to
gather and analyse official World divisions produced by International
Organisations (ONU, UNDP, FAO and OECD), international Non Governmental
Organisations (Care, Red Cross…) and private global companies. It comes also as
a complement to the provisional system of regionalisation (World Unified
Territorial System – WUTS) that intends to support empirical analysis and
harmonise maps and statistical tables developed in the project.

1.2 Scale of the study. Clear indication of the space of study

The analyses undertaken in this case study are developed at three levels (cf.
annex 01: the questionnaire).

19
- World level. The main part of the survey was the drawing of the limits of
World regions on a World map established with polar projection. Taking the
World as a whole the objective is to produce an “average” or “dominant” vision of
the World division within the ESPON community.
- European level. The second level of analyse is the Europe one. It was
asked to the surveyed people to draw the limits of Europe on an “Enlarged
Europe” map.
- Country level. For specific countries analysis have been made at the
national level in order to explain why they are put in Europe or not.

1.3 Hypothesis of the case study

1.3.1. Hypothesis about the drawings

- By drawing the limits of Europe or of World regions people reveal things

that are not aware of coming from their primary education, their cultural
background
- They can draw limits that they would not necessary agree if they were
asked about it in language form
- Some limits, some parts of the World will be clearly identified other not.
They represent either strong realities as considering Africa as a whole, the
Mediterranean Sea as a limit… Others are blurred realities as the position of
central Asia.

1.3.2. Hypothesis about the relation between individual attributes

and drawing

The survey aims to determine what the dominant representations of the limits of
Europe and of the regions of the World in the ESPON community are. More are
they relations between those limits and regions and the individual attributes
(gender, age, nationality, profession) or the criteria that people claimed to use
(history, economy…)

- Is there a relation between frequency where a country is included in

Europe and the number of people declaring to have visited it? The hypothesis
could be that when a large number of people have visited a country, this country
is better known. This knowledge could modify the previous perception on the
proximity level of this country from European ones.

- Is their relation between the drawing of Europe and the age / nationality /
country of birth of the members of the ESPON community? Those questions are

20
in relation with the fact people are born in Europe Union, live in an old or recent
European Union country. For example: do people from the first six countries of
Europe Union have a narrower of broader view of Europe than people from new
member states?

1.4 Replicable methodology, problems, questions

1.4.1. Steps of the realisation of the survey

The survey has been realised in three stages:

- One on the ESPON project 3.4.1 members during the kick off meeting of
the project in January 2005 in Paris (14 answers)
- One on the ESPON lead partner during the lead partners meeting in
Brussels in February 2005 (21 answers)
- The last one during the ESPON seminar in Luxemburg in May 2005 (88
answers)

Unluckily all 123 answers can not be used because of some mistakes or some
oversights that lead to a usable number of answer equal to:
- 117 for the individual attributes
- 116 for the limits of Europe
- 110 for the World divisions

1.4.2. The question of drawing limits

We asked to the ESPON community member to draw limits of Europe and of

World regions on two specific maps. Concerning Europe it was the European
Neighbourhood Template (cf. First Interim Report of the ESPON project 3.4.1.).
Concerning the World it was a circular map with projection on North Pole. This
then avoid putting Europe in the centre of the World. More, the map was non-
oriented and people can handle it as they want as it was a dish of paper not
attached with the rest of the survey.

To use a drawing on a map rather than a list of country raise a problem and even
more when the name of the countries are not specified. That implicitly implies
that people know to name the countries from a map and therefore where they
are located. We are not sure that people know the location and the name of the
countries in the World map and maybe neither in the Europe map.

However we deliberately chose this procedure because it is far more precise in

the inclusion of a country in a region. A country can belong to a region as a
whole. But the drawer can also split it in two or more parts and affect it to many

21
zones. This gives precious indications on transition zones between two World
regions.

1.4.3. Building the databases

The building of the databases has been a very long process. Many problems have
been faced during the building of the database for the Europe map as well as for
the World one.

1.4.3.1. Specific problems for the Europe map

Concerning the Europe map the codification was rather simple. The answers to
the questionnaire are codified as follow:
- “1” if the country belongs to Europe in a questionnaire
- “0” if the country does not belong to Europe.
- “0.5” if the country is cut in two part one of them belonging to Europe.

However, many problems have been faced during the codification, as some of
people did not following the instructions and imagined creative unexpected
solution…

First in some of the questionnaires two “European” delimitations have been

proposed introducing a gradation in the belonging to Europe (figure 01). The
question was more restrictive and it was assumed that the gradation in the
intensity of belonging to Europe would be found thanks to the frequency of
attribution of a country to Europe or if a country is cut in two parts. It has been
then decided to take into account the larger zone as the delimitations of Europe.
This problem has been found in 6 questionnaires.

Another problem was incoherence between the drawing of Europe and the
written explanation in the part reserved for the criteria used to draw the limits.
For example, many times the criterion “ESPON space” has been used to justify
the drawing of Europe. But sometimes the drawings of the limits include the
Balkans countries, i.e. Albania and the countries from the former Yugoslavia
which are not actually ESPON members. In that case we used the map and
therefore the drawing instead of the justification.

22
 Figure 1 : gradation in the belonging to Europe

1.4.3.2. Specific problems for the World map

For the World each country has been affected to a region according to the
answer of each participant. The fact that a country can be cut in two or more
part raise therefore a new problem (figure 02): the multiplication of the spatial
references. Then, if a country is divided, as much new spatial units as the
number of parts are introduced in the table. A number has been attributed to the
new country line: the larger zone gets the first number, the smaller one the last
one. For example if Iran (figure 02 & table 01) is divided in three part, the larger
one being “Central Asia”, the second one “Oil countries”, the smallest one being
“India World” the codification will be :

Figure 2 : example of a problem of codification

23
 Table 1 : example of codification

Country name Zone name

Iran_01 Central Asia

Iran_02 Oil countries

Iran_03 India World

After the first preliminary survey, it has been discovered that it was very difficult
to deal with zones recovering each others (figure 03). It was then specified in the
instructions of the following surveys that “one place should belong to only one
region”. However some people draw zones recovering each other. In order to
take them into account in the statistical analysis it was then decided to draw a
median line between the intersections points of two recovering zones. This new
line is thus considered as the limit of both zones (figure 04)

A very problem was raised by the fact that some people from the ESPON
community refused to divide the World. As we asked them to divide the World in
at least two parts, few of them draw a small zone in the North Pole area and
then considered the rest of the World as the second zone. This point of view is
very interesting and has to be taken into account in the interpretation of the
results. However it was not possible to include them in the statistical analysis
because that kind of division was not suitable with the methodology used.
It was the same problem for survey proposing an original point of view in the
division of the World but whose divisions was covering a too small part of the
World. For example one questionnaire (figure 05), shows a World in three parts:
1: “my” vacations space, 2: “my” work space, 3: the rest of the World. Another
questionnaire (figure 06), shows a World in two parts: 1: “my” house, 2: the rest
of the universe. The inclusion of such original answers in the statistical analysis
should have introduced too much bias. They have not included in the study but
they will be taken into account in the interpretation of results.

24
 Figure 3 : dealing with the recovering zones

Figure 4 : solving the problem of recovering zones

25
Figure 5 : A World map from the preliminary survey

Figure 6 : A World map from the survey

26
The matrixes have been built with the same methodology used than for the study
presented in the Key Question 01 on mental map. However additional matrixes
have been built:

- The divided and forgotten countries matrix

This matrix aims to take into account the countries that have been divided
between two regions. For each country it establishes the frequency of the
division of a country in two, three or four part. More, some countries have been
forgotten in the drawing of World regions and put in a so-called “rest of the
World” implicit region. This matrix aims also to establish how many times a
country has been forgotten.

- The links and discontinuities matrix

This matrix establishes for each couple of contiguous countries the intensity of
the link or of the discontinuities between them.

1.4.3.3. Criteria

After the drawing of the limit of Europe a question were asking: “Which criteria
did you used for this delimitation?” One hope was that the use of a particular
criterion could explain the spatial extension of the drawn Europe or the inclusion
of a country or not. Six questionnaires did not indicate which criteria were used
in the drawing of Europe and in consequence could not be used in the following
analyses.

No precise criterion was proposed in this open question and therefore many
criteria were quote. In order to make the analysis easier they have been grouped
in 8 categories presented in the table 02. The most frequent criterion used is the
geophysical / geographical one. This criterion is typically used by people who
want to let know that Europe is fact that can be defined by objective factors.
However as is as been shown in the First Interim Report of the ESPON project
3.4.1. and in the attempt to define Europe in the Second Interim Report, the
physical criterion is in fact subjective one and more, often promote with a
political purpose. The culture criteria, more often defined by religion, would join
the Huntington point’s of view on civilisations. The “politic” criterion was more
often used in order to justify the drawing of the present delimitations of
European Union. Last, the History criterion was used to gather countries that
have a common past, even if this past is made both of confrontations and war as
well as peaceful exchanges. That explains the ambiguity of Russia and Turkey
status.

27
 Table 2 : Frequency of use of criteria
Contiguity 4
Functional 9
Economy 13
Feeling / Personal 18
History 32
Politic 40
Culture 44
Physical / Geo 55

Making groups of criteria raise some difficulties, mainly concerning the

interpretation of the criteria listed in the questionnaire as shown is the following
figure 07. Religion has always been considered as “Culture”. More, the
interpretation of a criterion raises other problems. For example, does “economy”
means that people gather countries because they have the same economic
profile (homogeneity) or because it exist a strong economic relation between it
and Europe or that an economic relation could be of some interest
(complementarity)?

Figure 7 : criteria grouping

Christian religion
Scepticism
Humour
Rationality
Declining nationalism CULTURE
Declined competitiveness
Sport fans (less than American)
Football ECONOMY
Beer, pork meat and wine
Individualism
Tolerance

1.4.4. Methodology to analyse the survey

- Statistical univariate and multivariate have been applied to the whole database
in order to reveal main trends related to attributes, frequency of belonging to
Europe or of a specific area in the World.

- Specific tests have been made on specific countries (first bivariate analysis and
then maybe a logistic model will be developed). The choice of countries is very
sensitive but it is first determined by the frequency at which they have been
included in Europe focussing on “in between area”. If the number is too high or
to small it will be not possible to make the analysis.

28
 1.5 Empirical result of the case study

1.5.1. The Typical Espon seminar member

1.5.1.1. The ESPON “ideal-type”

An “ideal type” is a qualitative model constructed out of selected elements of

reality which can maybe never be found as such in reality. It involves an
accentuation of typical characteristics of a phenomenon.

It has been tried here to build an ideal type of the ESPON seminar member. To
do so it has been decided to put the stress on the most frequent answer in some
categories (for example age categories). The value of the more important
frequency could be quite different from one variable to another one because
categories are quite different. For example 28 categories have been made to the
“country of birth” variable, and 2 only for the gender. That is why it could
happen that some statements are contradictory (for the graphs related to each
variable see the annex 02).

The typical ESPON seminar member is a man, born between 1970 and 1979
(however the average date of birth is 1963) in Germany with actual German
nationality. The two other more frequent nationalities are French and Italian and
people from the 6 founder countries of European Union represent 46% of the
ESPON Members. However about 60% of the participants were not born in the
European Union, i.e. in a country that was belonging to European Union at the
date of the birth. The Typical ESPON seminar member is a researcher who
travels abroad more than once a year but less than once a month. In European
Union he has already visited 18 countries mainly Belgium, Italy, France,
Luxembourg and Germany. Outside Europe he has visited an average of 4
countries mainly Canada USA, Russia and Turkey.

1.5.1.2. Profiles from a multivariate analysis

A multivariate analysis on the individual attribute provides a more precise figure

of the ESPON community. The first component (15 % of information) (table 03)
underlines an opposition between older researchers not born in Europe and who
travel a lot and younger people, born in Europe travelling less often. The second
component (11 % of information) (table 04) introduces a differentiation
according to the age, the gender and the date of adhesion of the country of
residence or birth.

29
 Figure 8 : ESPON members’ profile

Table 3 : Oppositions in the first axis

Born in the forties Born in the sixties or seventies

Born before the Roma Treaty and outside Born after the Roma Treaty and inside the
European Union European Union

Live in countries which adhesion occurs Live in one of the six first countries of European
between 1958 and 1989 Union

Visited a lot of countries in Europe and in the Visited few countries in Europe and in the
World World.

Researcher Other (students)

Travel less than once a year or once a year

Table 4 : Oppositions in the second axis

Born in the forties or fifties Born in seventies

Born before the Roma Treaty Born after the Roma Treaty

Live in countries which adhesion occur from Live in countries which adhesion occur after
1958 to 1989 1990

Researcher Administrator

Male Female

Live in the country corresponding to its Do not live in the country corresponding to its
nationality nationality

30
Those profiles underline some trends that seem significant:
- Researchers from the six founder countries are rather young (between 26
and 45 years old) and therefore born in Europe. Some of them are not even
researchers yet as it is from their part that the category “other” (that represents
mainly PhD or post PhD) can be found. But the younger are the people coming
from the very new European countries (adhesion after 1990). They are mainly
policy makers and administrators. The researchers coming from countries of the
second enlargement (between 1958 and 1989, i.e. United Kingdom, Ireland,
Denmark, Greece, Spain and Portugal) are older and therefore not born in
European Union.
- The number of female is more important in the younger age. That can
underline the feminization of the European research.
- The residential mobility of young researchers and administrators. That can
be due to two different facts. First, the residential mobility of the younger can be
due to the opportunity to find a job in another country when there is a lack of
opportunity in their countries. As older researchers live in their countries of birth
that could mean that they ever work in their country or that they are back after
some years abroad. The second solution would underline the existence of a kind
of cycle of the research activity with few years aboard and a return to the
country. But this mobility of young researchers could be also due to the
increasing number of opportunities to work and travel in Europe thank to
European exchanges programs or research programs and to the willing to
discover other European countries. The cause of the residential mobility of young
researcher in Europe is probably a mix of the facts proposed above.
- Globally, the punctual mobility, for work or leisure is rather important
among the ESPON community. It is true that they have to go to the ESPON
seminar twice a year, to LP meeting if they are Lead partners and to
transnational project group meetings…

1.6 ESPON seminar particiants’ view of Europe

Concerning the delimitation of Europe, a clear definition has not been provided.
It could be either the present “European Union” as much as a geographical
Europe, historical one, a wish for the political construction of European Union or
more an utopia of what should be Europe in a more or less far future.

1.6.1. Description

The first surprise has been to discover how large was the Europe drawn by the
ESPON seminar participants in Luxembourg. With an average of 37.9 countries, it
is far larger than the present European Union. In fact the more frequent numbers

31
of countries included in Europe are 37 & 38. That means that about 40% of the
questionnaires add 12 or 13 countries to European Union and 61% between 11
and 14 countries. Only one questionnaire draws a Europe with the European
Union countries and three have been influenced by the ESPON template and
draw a 29 countries Europe.

Figure 9 : the size of Europe

Table 5 : number of countries included in Europe

MIN 25
Median 37,00
Mode 37 & 38
Average 37,97
MAX 55

1.6.1.1. The Map of Europe: countries in, out or cut

− “IN” countries are mainly always members of the European Union. The
number of countries placed in Europe without being divided is 20 that is less that
the number of countries actually being member of the European Union (25).
They actually represent what could be called the core of Europe. We can notice
that Greece, Ireland, Estonia, Cyprus and Malta have been “forgotten” by at less
some participant to the survey.
− “OUT” countries are those located on the South of the Sahara desert area
and Southern and Eastern countries from the Arabic Peninsula excepted Saudi
Arabia which northern part is sometime included in the drawing of Europe. It

32
seems that those countries are clearly excluded from the mental maps of Europe
of the ESPON community.
− Other countries, in light green colour, belong sometime to Europe
sometime not or they can be divided in too parts. Eastern and Southern
countries could be consider as a transition area, were the probability to be part
of Europe have to be more precisely evaluate. Indeed, their situations are quite
different from one country to another one. Some of them like Ireland, Greece
belong to European Union and are nearly always placed in Europe. Others, like
Norway, Switzerland or Balkan countries are very often placed in Europe. And
the situation is quite different for other countries: some of them being put in
Europe in only one questionnaire.

Map 1 : Countries placed in/out Europe and those that are placed sometime
in/sometime out or that are divided

33
1.6.1.2. Frequency of integration to Europe

Map 2 highlights the situation of countries that were placed sometime in Europe
sometime not. A gradation from West to East is very clear showing that when
one draws the limit of Europe on a map the proximity with the core of Europe
makes it highly probable for a country to be included in Europe. The more
impressive example is related to Albania and the countries from the former
Yugoslavia. It is very rare when they are excluded from Europe mostly because
they are located between the core of Europe, Greece and two candidate countries
Bulgaria and Romania. Consequently maybe the drawer does not take time to
ask himself if Serbia or Bosnia belong to Europe. If the question would have been
posed rather than asking for a drawing it is likely that those countries would
have not been so frequently included in Europe or would have been more
differentiated (Croatia). The situation of Ukraine, Turkey, Georgia and Armenia is
quite different as they have often been divided in two parts, one belonging to
Europe, the other not. In consequence could those countries be considered as a
first sign of a limit of Europe?

Map 2 : Frequency of inclusion of a country (as a whole) in Europe

34
The inclusion of all Russia in Europe is a plunge that few questionnaires dare to
take, maybe because the country is too large and because a big part of it is
located in what people consider as Asia. Less than 17% of questionnaires placed
it fully in Europe.
The Mediterranean Sea acts like a frontier between the core of Europe and other
countries. There is no gradation like the one that could be observed in the East
and the number of questionnaires that include them in Europe is small or very
small.

1.6.1.3. In-depth analysis of margin

This analysis aims to go further than the simple description of the frequency by
defining profile of inclusion of group of countries in Europe.

The first component of the multivariate analysis (graph n°02) presents a

gradation of the frequency of inclusion of countries in Europe. A group of 19
countries are very often put in Europe. The second component globally makes an
opposition between questionnaires that draw a Europe toward the East (Belarus,
Serbia, Albania, Ukraine and Moldova) and those making it toward the South and
Middle East.

Figure 10 : MCA on European countries.

35
The following map (03) presents a classification that allows to stress on two
great trends in the inclusion of countries in Europe. First, the frequency of
inclusion in Europe. The first group is composed of countries that are often or
very often included in Europe (red & orange). The second group is composed of
the countries that are not often included in Europe with different intensities
(green, light greens) and the last one of Central Asia Countries (blue) that is only
once included in Europe.
The second trend that can be observed is a regionalisation of countries. The red-
orange cluster is clearly the drawing of Europe towards the East whereas green
clusters concern Southern Mediterranean Sea countries and Middle East ones.
This regionalisation is also visible in the subdivision of the green category as Iraq
and Jordan (medium green) are close from Syria, Israel and West-Bank & Gaza
in the classification even if the frequency of inclusion in Europe is equivalent to
the one of Egypt, Libya and Algeria. The case of Tunisia and Morocco are specific
as their smaller size allow people to put them in Europe as a whole without going
too much to the south as it is the case for Algeria (that is very often cut).

1.6.2. Explanations

1.6.2.1. Criteria used to draw the limits Europe

Among all the criteria presented in table 02 only the “Physical / Geographical”
criteria has a significant relation with the variation of the number of countries
included in Europe. (Chi Square value is 6.9 and the “α” value is 0.032). The
relation is the following one: people using the geographical criteria drawn a
medium Europe (37 & 38 countries) and people not using it draw a small Europe
(less than 36 countries).

Table 6 : Size of Europe and Physical geography criterion

Do not
use Phys Use Phys
/ Geo / Geo Total
Large 22,95 34,55 28,45
Medium 34,43 45,45 39,66
Small 42,62 20,00 31,90
Total 100 100 100

36
 Map 3 : Typology of European margins according to how they are perceived in
the survey

An analysis on criteria used could explain their use in relation with the drawing of
Europe.

- The “Politic” criteria is significant but on the other side of the group
significant variable describing the integration of different countries in Europe
suggesting that to draw a large Europe the “Politic” criteria is not used.
- The physical criteria is used to included in Europe the Eastern countries
and the political one by people including Southern Mediterranean countries and
middle East that sounds strange according to the fact that the previous
interpretation of this criteria as the “European politic construction”.

37
- The “feeling” criteria is used by people considering Russian federation,
Egypt, Algeria, Libya, Kazakhstan, Turkmenistan and Uzbekistan as being a part
of Europe.
- Functional and economical criteria are used by people considering Estonia,
Albania, Croatia, Iraq and Jordan as being a part of Europe.

1.6.2.2 .Could individual attributes explain the drawing of limits of

Europe

The individual attributes we gathered are not only used to describe the typical
ESPON seminar member, but also to try to find if there is a relation between
them and the drawing of Europe i.e. the number of countries included in Europe.

Unfortunately, as it was the case previously concerning the criteria used, very
few tests have significant result. Only one was very significant, but it is very
difficult to interpret: the gender (significance level of 0.011). Men draw a larger
Europe than women. The average number of countries included in Europe is 38.7
for men and 36.4 for women. This result seems actually very difficult to explain.

1.6.2.3. Turkey and Ukraine

Specific tests have been conducted for two countries that are in an intermediate
position, both in the survey and in the geopolitical point of view: Turkey and
Ukraine.
Turkey is now an official candidate country to be part of the European Union.
Ukraine is in a sensitive position between its historical links with Russia
Federation and the proximity of the European Union. More, both countries have
sometimes been divided in two or more pieces in the survey (table 07).

Table 7 : Ukraine and Turkey in Europe

In Europe Outside Europe Cut

Ukraine 92 15 9

Turkey 25 41 50
Source: Survey ESPON 3.4.1. Europe in the World

For both countries two different tests have been made: one using the three
modalities (In & Out and Cut) and one other using two modalities (In & Out). For
the second one, only 66 questionnaires were taken into account for Turkey and
107 for Ukraine.

38
Turkey in Europe

Absolutely none of the criteria used has a significant relation with the fact to
included Turkey in Europe or not. However significant relations can be found
when studying the personal attributes. Once again the gender is significant to
explain the inclusion of Turkey (in both In & Out and Cut and In & Out tests).
Women significantly put Turkey out of Europe and men in Europe. It is coherent
with the test of the size of European Union but still very difficult to explain.
The two other variables that have significant relations are the number of
countries visited in the World and in Europe.
Number of countries visited in the World has significant relation with the
inclusion of Turkey in the In & Out and Cut test. But the test is not very
significant and quite difficult to explain. People that have visited few countries in
the World include Turkey in Europe… or exclude it. And people who travelled a lot
in the World cut it in two pieces. Does that mean that people travelling a lot are
more conscious of the internal differentiations of Turkey or that they are more
likely to have a balanced point of view and not a clear-cut one?
The question can be raise also for people who visit Turkey: Are they more likely
or not to include it in Europe? The relation is significant for both tests and show
that people who have not visited Turkey are over represented among the people
that exclude it from Europe and vice-versa. Would that mean that a better
knowledge of Turkey lead to include it in Europe? But maybe that people that
went to Turkey was previously more well-disposed toward Turkey.

Ukraine in Europe

Concerning Ukraine, again the same gender variable can significantly explain its
belonging to Europe or not and again: women are more likely tempted to exclude
it from Europe than men.
The new discovery for Ukraine is that some criteria have a significant relation
with its inclusion in Europe and that for both tests. The first criterion to be very
significant is the “politic” one. People who declare to use this criterion exclude
Ukraine from Europe that is quite logical because Ukraine does not politically
belong to European Union and remains clearly in the geopolitical influence of
Russia from economic point of view (cf. recent gas crisis).

The other criterion to be significant is the “geographical” one. People who use the
geographical criteria are more likely to include Ukraine in Europe. That seems
quite logical too because, the physical criteria that is traditionally used to define
the East frontier of Europe is the Ural Mountain one despite the lack of evidence
of real physical frontier (c.f. dictionary of concepts).

39
1.4.2.4. A travel explanation?

A better knowledge about a specific country could lead people to more easily
consider it as belonging to Europe or the contrary. So the following question is:
is their a relation between the number of people that visit a country and the
number of people considering this country belongs to Europe?

This map has to be compared with map 2 showing the frequency of inclusion of a
country to Europe. There is no a strong tendency showing that more a country is
visited more it is included in Europe. For example countries from former
Yugoslavia are not very much visited but they are included in Europe in more
than 85% of questionnaires. It is the same for countries like Belarus or Moldova.
The trends of tourism flows can explain the cases of Egypt and Jordan that are
more visited than the number of questionnaires that put them in Europe.

Map 4 : Number of people who give back a questionnaire who have visited the
country

The existence of a relation can be easily checked with a simple correlation

analysis. For this analysis only the intermediate countries (i.e. countries that are
not always or never placed in Europe) are taken into account. The correlation

40
index in not high and the relation between the two variables could explain only
20% of the information. That could be a good beginning in the try to explain the
fact that a country is included in Europe or not, but the pattern of the correlation
plots shows that in fact there is no relation at all. In consequence, the frequency
of visit of a country can not be consider as a way to explain the fact that people
consider that country belonging or not to Europe.

Figure 11 : A relation between the visits of a country and the appreciation of its
belonging to Europe?

1.7 ESPON seminar view of the World

Our main objective when doing this survey at the World level was to define if the
individual representation of the World regions of ESPON members could allow to
identify strong groups of countries always put together in the same region. That
would mean those countries are perceived as linked either by flows, similarity or
accessibility. But then for which reason are they so perceived and could those
countries be seen as a core group of countries that could be used in
regionalisation process? One other question was to identify “blurred areas”. By
blurred area we mean areas that are put sometime with one group of countries
sometime with another group. We should have then to define those areas. Are
they transitions areas between two relatively homogeneous or integrated groups
of country?

41
1.7.1. The significant steps in the division of the World.

We asked the ESPON members to draw on a round map the limits of 2 to 15

World regions according to them. The following maps were obtained thanks to a
hierarchical ascendant classification 1. This part is based on the comment of two
more significant steps (cf. figure 08) as it was presented in the key question on
the Mental Maps plus the last limit of fifteen zone because it was the maximum
number of zones that it was allowed to draw.

Figure 12 : hierarchical tree of the classification

1.7.2. World in four regions

The first space to be clearly identified by the ESPON members is a World region
formed by Europe plus the English speaking North America. Those two spaces
are considered here as only one maybe on cultural criteria: this region look like
the Huntington’s Western civilization except the fact that Australia is not included
and Europe is larger than Huntington’s one because it includes Eastern Europe,
Greece and Turkey that are not included by him. But it is also likely that this
zone have been drawn by using wealth and development level criteria as they
were often put in the same “north” or “developed” region in some
questionnaires. More, this region is isolated and in the first step all the reminding
countries belong to the same region “Rest of the World”. This regionalisation
reminds the strong tendency to Euro-centrist point of view of the World that is in
the Key Question on mental maps of global actors.

1
The methodology is detailed in the Key Study on the Division of the World in this report.

42
The second entity to be also clearly revealed is a large South America that
includes Mexico and the Caribbean Islands. This region is associated to the
continents point of view but it is mainly a cultural one with the extension of the
region to Caribbean and Mexico that do not belong to the South American Plate.
Mexico and some of the Caribbean belongs to the North American plate and other
Caribbean Islands and Central America form a specific plate (See Figure 31 in the
ESPON 3.4.1. First Interim Report).

Map 5 : The World in four regions

43
Africa is also perceived with an evident continental existence and it is defined in
the third step. This regionalisation follows very precisely the tectonic plate shape
as Madagascar and Mauritius are nearly always included in this Africa region. At
this stage a first significant step is reached in the partition The remaining
countries form a very large contiguous region that can be considered as Asia, as
it is mainly composed by Asiatic countries plus Russia Federation and Oceania.
One should just notice that Turkey and Georgia are rather considered as
European countries. Those four parts of the World can be considered as “strong
realities”. That means those spaces are the basic entities that are identified
firstly by the majority of the ESPON Community and that will be further divided.

1.7.3. A World in eight regions

Turkey appears then, with Georgia, as a small transition zone between Europe
and Middle East and the rest of Asia. Turkey is then placed in the peripheral of
Europe but more to serve as a “buffer zone” vis-à-vis other Middle East countries
of the region. That position of Turkey underlines that Turkey has been more
often placed in Europe in the questionnaires than in Asia or another region. The
next country to be isolated is the Papua New Guinea. Its level of development
and the geographical share of an Island with Indonesia make it closer from it and
Philippine. But it seems that Papua New Guinea is cultural more similar to
Oceania countries and the former dependency toward Australia plays a great role
when one put it in the same region as Australia. However the hesitation is strong
and that is what it is underlined by this quite isolated position on the World map
produced by the ESPON community. It is quite the same situation for Greenland
that is divided between its proximity to North America, and mainly Canada, and
its institutional belonging to the Denmark sovereignty. The two very small
Caucasian countries of Armenia and Azerbaijan are then split between the
Russian, Turkish and Persian influence. Finally the Central America and
Caribbean split from the rest of South America, maybe because of specific
cultural features of more likely to the geographical characteristics. The countries
of the Central America peninsula are very small ones and the other are islands
that distinguished clearly them from the large and continental countries present
on the Southern America Peninsula like Brazil, Argentina and Peru…

The last step has no statistical meaning. We decided to stop to study the
partition here only because it was asked to the ESPON seminar participant to
divide the World in fifteen regions. The previous significant partition would have
been in 11 regions that means before the identification of Greenland like a
region. However the last step is an interesting one because it may mark that we
reach a new stage where once more medium size regions are identified. The
remaining Asia region is then divided in two large regions, one that comprise

44
China, Japan, both Korea and Mongolia and the other one that comprise all the
South Asia Countries (except Pakistan), and the South-eastern Asia Countries.

Map 6 : The World in eight regions

45
 Map 7 : the World in fifteen regions

Now that we have our fifteen regions some remarks can be done on the
divisions that one could except and that did not appear in the study.
One can note than despite the disparities of development Japan is, in those
stages, not separated from China neither North African countries from sub
Saharan countries; neither North African countries from the rest of Africa. In
both cases the mental map regionalisation is different of what has been proposed
in WUTS (Cf. Vol 1) by using expert criteria and statistical analysis of flows and
similarities. For Japan, maybe its particularity in term of development vis-à-vis
the rest of the region would suggest to put it alone in a region, but its relative
proximity with China in cultural term, and from a European point of view, lead to
put it in the same region than China. Concerning North Africa, one can note than
in fact none region has been identified within Africa. That underlines the fact that
Africa is badly known in Europe and that the continental perception is dominant

46
to define African countries. It seems that few among us know Africa sufficiently
to draw African sub regions even if the differences between African countries and
populations are very numerous (see analysis on discontinuities).
To conclude one should notice that very large areas (like Africa our South
America) coexist with very small spaces formed by only one country (Greenland,
Papua New Guinea), a couple of countries (Turkey and Georgia, Azerbaijan and
Armenia) and groups of countries (Europe, Central America and Central Asia).
That underlines the existence of well defined regions among the ESPON
community and the existence of transition areas for which the knowledge is more
hesitant or that are the place of confrontation between two influences or more.

1.8 Limits of the case study

The analysis of the questionnaires allows to draw the limits of the regions,
according to the number of questionnaires that draw that limit between
contiguous countries. Moreover it is possible to draw the links according to the
number of time two contiguous countries have been put in the same region. The
following map 08 therefore shows the main limits (in blue) and the main links
(orange) between two (terrestrial and extended) contiguous countries.

1.8.1. The frontier of Europe

One can observe that the strongest division of the World for the ESPON
seminar participants is the one drawn through the Mediterranean Sea between
Europe and North African countries. Would that means they feel that European
countries are very much different from the North African ones? Could that mean
that for the European researchers and policy makers that attend the seminar, the
Mediterranean Sea should be considered as the more evident frontier of the
World, and consequently the frontier of Europe? The terrestrial western frontier
of Russia Federation is also a strong one. It could reveal, from the ESPON
members point of view the Eastern frontier of Europe, meaning that for them
Belarus, Moldova and Ukraine should be included in Europe. The limit is less
strong between Turkey and Ukraine, Greece and the Balkan countries. It is even
less strong than the frontier between Turkey and Iraq and Syria. The fact that
Turkey is circled by two medium strong limits shows that there are great
hesitation in the ESPON community to decide whether Turkey belong to Europe
or not.
The strength of the limit around Europe and of the links between European
countries clearly shows that this map has been drawn by European people. How
strong the links between European countries are, comparing with the links with
other countries in the World! Even if on the previous synthetic maps it appears
that African is not split during the first 15 steps of dividing the World it is not as

47
coherent, according to the ESPON community, than Europe is. Europe, from
France to Ukraine, and Norway to Malta is the better defined space in the World.

Map 8 : limits and links

48
1.8.2. Continentalisation and development

The second strongest division of the World is the one between Russia Federation
and North America (Alaska). It also crosses a maritime strait and could be a
remaining of the Cold War. However those two countries belong to two different
continental bodies and in consequence this limits could be just considered as a
continental limit. In fact, the mains limits proposed by the ESPON seminar
participants are continental ones (even the one between Europe and Africa). That
is the case for the limit between the Arabic peninsula and Africa and the South
Eastern Asia / Oceania one. In that case the difference of development level that
exists between Indonesia and Australia could also explain that limit. The limit
between North America and Caribbean and Mexico is less due to
continentalisation that the fact that despite the trade agreements, Mexico is not
perceived as belonging to North America. The number of thin limits in the Iran,
Afghanistan and Pakistan neighbourhood show of it is difficult, from our
European point of view to define a coherent space in this region.

1.8.3. Correlations of discontinuities

A correlation test has been made in order to understand the meaning of the
discontinuities. Is there a relation between the values of the discontinuities and
other indicators like economic or social ones?
The following table 08 shows that the most significant relation is between the
value of the limit and the absolute value of GDP in 1986-90.
Then comes nearly all indicators related to the GDP either in absolute or relative
terms. The Human Development Index in 2002 is also correlated with the value
of discontinuities from the survey, but more than each of its components. Two
things can been learned from this short analysis: first, it seems that the inertia of
knowledge is such that we evaluate the countries on outdated data. So the limits
drawn by the ESPON seminar participant are based on old data or knowledge.
Second, we have more a global impression about the level of development of a
country, than the knowledge of the different indexes that are used to evaluate
this development. That could underline an ability to perceive a average situation
of a country despite the fact that the details are not known.

One of the first factors of vulnerability is obviously the size of a country (Russia
- China). When a country has a large size is more susceptible to be cut in
different part as people have knowledge about the internal spatial
differentiations. Thus large countries can belong to different cultural areas or at
least their different parts can be under different cultural influences. The
development disparities between spaces can also lead to cut a country, but in the
case of this survey that never happens: surprisingly nobody makes a distinction
between the eastern coast of China and the rest of the country.

49
 Table 8 : Correlation Indexes
VALDIS
Relative differences GDP in 56-60 0,17
Relative differences GDP in 66-70 0,22
Relative differences GDP in 76-80 0,25
Relative differences GDP in 86-90 0,30
Relative differences GDP in 96-2000 0,30
Absolute differences GDP in 56-60 0,05
Absolute differences GDP in 66-70 0,13
Absolute differences GDP in 76-80 0,25
Absolute differences GDP in 86-90 0,41
Absolute differences GDP in 96-2000 0,37
Human development Index in 2002 0,22
Life expectancy Index in 2002 0,17
Education Index in 2002 0,15
GDP Index in 2002 0,20

Map 9 : countries divided in two parts

50
The second factor of vulnerability could be attributed to the shape of the
country. That is the case for Indonesia and Malaysia, Philippines. When a country
is formed by more than one entity it is then likely to be more often cut in
different parts, and even more when this country is an archipelago. Indonesia,
that is the larger archipelago of the World (17 000 islands) is the second more
often divided country in the questionnaires. Malaysia is also often divided even if
its superficies is not so important but because it is formed by one peninsula and
the northern part of the Borneo Island that are far one from each other.

Then a third factor could be the geographical position between two distinct
zones that are different from a cultural or economical point of view. That is more
precisely the case for Turkey, Ukraine, Mongolia and Mexico. People drawing the
limits of the World regions hesitate to attribute them to one space or another one
and find a solution in cutting them. One can note that, in addition to the
countries named above, the main vulnerable countries in this situation are the
countries of Central Asia from Kazakhstan to Pakistan and Iraq.

1.9 Conclusion

There are more analyses to do in order to exploit all the information get thanks
to this questionnaire. For example, it would be interesting in the next step of the
work to compare the size and the composition of Europe in the European map
and in the World map of the questionnaires.
Analysis of the explanations of World regions by the individual attributes of
respondents should also be further developed.
However this case study is wealthy in term of knowledge we get about the
European researchers and policy makers vision of the World and vision of
Europe. The analyses made here have been very helpful to the interpretation of
the ones made in the Key Question 1 (Volume 1) on mental maps, because we
get here information about the criteria that where used and that where not
available on global actors websites.
In the final report, the results of this case study will be helpful to, because, as
we know what the common representations of Europe and of the World in the
ESPON community are, it will be easier to introduce our proposals on World
regions. In a psychoanalytic sense, we can consider that further progress in the
perception of reality can not be achieved as long that unconscious facts are not
put to awareness of actors.

51
 Annexe 01: the questionnaire

ESPON 3.4.1. « EUROPE IN THE WORLD »

SURVEY
REPRESENTATION OF THE WORLD OF THE ESPON COMMYNITY
___________________________________________________________________________

I. INDIVIDUAL ATTRIBUTES

Sex: ...................................................................
Birth date: .........................................................
Country of Birth: .............................................

Actual Nationality (ies): ..............................................................................................................

Former Nationality (ies) if any: ...................................................................................................
Actual country of residence: .......................................................................................................
Former countries of residence (more than six months) if any: ...................................................
.......................................................................................................................................................

What is your higher degree level ? ...............................................................................................

Activity : - Researcher or teacher

- Administrator or policymaker
- Other : ..........................................................

Could you precise on which frequency you go abroad for your job or your vacations?

Less then once More than once More than once

Once a year Once a month
a year a year a month

Indicate in which following countries you’ve been and add those that are not listed.
Austria Greece Poland
Belgium Hungary Portugal
Bulgaria Ireland Romania
Cyprus Italia Slovakia
Czech Rep. Latvia Slovenia
Denmark Lithuania Spain
Estonia Luxembourg Sweden
Finland Malta Switzerland
France Netherlands United Kingdom
Germany Norway

52
 II. WHAT IS YOUR DELIMITATION OF EUROPE

A) Draw on the following map a line showing your delimitation of Europe.

B) Which criteria did you used for this delimitation?

.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.....................

53
DIVIDE THE WORLD IN 2 TO 15 REGIONS

C) Draw on the following map lines showing your World divisions in 2 to 15

spaces. One place should belong to only one region but a country can be
divided between two or more regions. If a country must be divided be sure you
know why and explain it below.

D) Name your areas (please remind the number and report it on the map)
Name

E) Which criteria did you used for this delimitation?

.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................

54
 ANNEX 02:
THE ESPON COMMUNITY MEMBERS

Gender repartition

Nationality of the participants

55
Country of birth according to its date in European Union

Date of birth of the participants

56
Frequency of travel abroad

Number of people born in European Union

Activity of the participants

57
Number of participants having visited… in Europe

Number of participants having visited… in the World

58
 Partie B

ESPON & Globalisation

59
 2. THE GEOGRAPHY OF ITALIAN INTERNATIONALIZATION: RELATIONS
WITH CENTRAL-EASTERN EUROPEAN AND SOUTH AND EASTERN
MEDITERRANEAN COUNTRIES

Alberto Vanolo
Grupo Soges

2.1 Justification of the case studies and link to key questions

The case study refers to Italian economic internationalization – in terms of

commercial flows and investments – with reference to Eastern European and
South and Eastern Mediterranean countries. Using the classic “centre –
periphery” geographical metaphor in order to describe the world economy, Italy
is certainly a central country, while Eastern European and South Mediterranean
countries belong to the periphery or semi-periphery. However, the situation is
certainly not so simple, and plain metaphors such as “centre-periphery”, “North
and South”, “developed and developing countries” hinder a number of different
roles, positions and problems. This complex panorama is well represented in the
case study: not only the situations of Eastern European countries and South and
Eastern Mediterranean ones are quite different, showing two different ways of
being “peripheral” in the global economic scenario, but also the “central” position
of Italy is not free from problems and perils connected to the building up of a
new division of labour and the constant fear of a progressive productive
delocalization, moving more and more industrial plants to countries characterized
by lower labour costs.

2.2 Spaces and scales of the study

The analysis refers to Italian flows directed towards Central and Eastern
European countries and the South and Eastern Mediterranean rim.
The first group refers to Albania, Byelorussia, Bosnia and Herzegovina, Bulgaria,
Czech Republic, Croatia, Estonia, ex-Macedonia, Latvia, Lithuania, Moldavia,
Poland, Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia, Ukraine
and Hungary.
South and Eastern Mediterranean countries comprehend Cyprus, Malta, Turkey,
Algeria, Libya, Morocco, Tunisia, Egypt, Jordan, Israel, Lebanon, Syria,
Palestinian territories. This group refers to the countries signing the EU-
Mediterranean partnership, with the sole addiction of Lebanon, with the status of
mere observer.

60
 2.3 Hypothesis, problems, questions

It is well known how the current economic scenario is becoming more and more
globalized, and every enterprise, regardless its dimension, has to face
international competition. This international dimension is emphasized by many
interconnected socio-economic phenomena, such as a growing new division of
labour (just to cite the famous Hymer’s expression), the rise of transnational
corporations, the geographical widening of the strategic horizons of firms,
organizations, and economic actors in general. These phenomena are so complex
and interconnected that it is difficult to built up an exhaustive and realistic
interpretative scheme (or even a simple typology) in order to interpret and
analyse economic internationalization.
Assuming a quite oversimplified theoretical framework, there are basically two
ways a firm can deal with internationalization: exporting goods or services, or
becoming international (i.e. a transnational corporation). In this sense, from an
analytical point of view, trade and investments statistics (FDIs 2) are two
important measures (proxies) of economic internationalization.
Calling back the classic work of Dunning (1981, 1993) and his OLI paradigm
(acronym of Ownership, Localization e Internationalization), there are essentially
two reasons why an enterprise choose to become international: the first one
deals with the desire to penetrate and “coming near” to a new local market; the
second one refers to the search for low-cost inputs.
Investments directed towards new output markets for goods and services are
usually called horizontal FDIs. These concerns typically the duplication of parts of
the productive process by building or acquiring new industrial plants in order to
furnish different geographical areas, and in this sense horizontal investments
may be considered ideally as a substitute of commercial flows, in that firms
replace exportations with local productions (Shatz and Venables, 2000). The
advantages connected to this strategic choice refer both to the reduction of some
sorts of costs, such as those of transportation or those linked to exportation
tariffs, and to the pursue of particular strategic goals, such as the strengthen of
the competitive position of one firm in a specific market.
Differently, investments driven by the search for low-cost inputs are vertical
FDIs: these concern the division of the productive cycle by localizing some
functions in geographical areas characterized by low-cost productive factors. This
partition is based on the premise that different parts of the production process

2
It is useful to mention that, according to UN (2004), foreign direct investment (FDI) is defined as an investment
involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one
economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of
the foreign direct investor (FDI enterprise or affiliate enterprise or foreign affiliate). FDI implies that the investor
exerts a significant degree of influence on the management of the enterprise resident in the other economy. Such
investment involves both the initial transaction between the two entities and all subsequent transactions between
them and among foreign affiliates, both incorporated and unincorporated. However, FDI may refer to the
building up of a new industrial plant: these are usually called greenfield investments.

61
need different inputs. Since the prices of the inputs differ strongly from one
country to another, and particularly labour costs, it is convenient to implement a
multinational structure: this is a simple interpretative scheme, formerly proposed
in the famous product cycle model by Vernon (1966). This is probably the case of
many Italian investments directed towards Eastern European countries. The
search for low-cost inputs may concern, apart from labour costs, also basic
materials, intermediate goods, but also economic advantages of quite different
nature, such as a certain facility in bypassing environmental regulations and
toxic wastage norms, a phenomenon denounced not only by environmentalists,
but also by United Nations and World Trade Organization (UNCTAD, 2004; WTO,
2004).
Differently from horizontal FDIs, vertical ones support international commerce, in
that imply the movements of intermediate goods between the various places
involved in the productive process. This is the reason why about one third of
total international trade happens within multinational enterprises, that is
between plants localized in different countries, but belonging to the same
company structure.
The case of horizontal FDIs shows how firms facing the possibility of an
international expansion have to choice between producing in the new market
(becoming a multinational enterprise) or exporting their own products or
services. The opening of a new plant implies a variety of additional costs, for
example in terms or bureaucratic or administrative difficulties, or costs
connected to foreign legislative of fiscal systems. Some of these costs may be
limited by cooperative agreements with other enterprises or by other juridical
tools, which represent a sort of “third way” (after trade and multinational
structures) in order to deal with internationalization (Grandinetti and Rullani,
1996). Among these, particularly relevant is the case of acquisitions, joint
ventures and strategic alliances.
In a similar manner, the choice of substituting exportations with the construction
of a new plant involves a number of advantages, such as the reduction of
transport costs and the bypass of some commercial barriers. Moreover, in the
case of some kinds of products, it has not to be underestimated the importance
of the closeness to the destination markets, the reduction of supply times and a
stronger flexibility in adapting to local needs and specificities of the local
demand. Such choice, however, is also conditioned by the typology of
production: in the case of massive economies to scale, for example, it is
preferable to have a singular, huge, production plant, and therefore to choose
the exportation option (for an exhaustive discussion concerning these topics, see
Helpman e Krugman, 1985). And, of course, also non-economic factors play an
important role: consider for example the cumulative aspect of investments:
investors facing the uncertainties and the risks of the global market tend to
observe and imitate well-known successful stories, causing the cumulative

62
growth of investments directed towards a few areas that have gained a certain
reputation in the international scenario.

2.4 Methodology

The internationalization phenomenon has been estimated with simple data

concerning trade and investment flows. Such data have been provided, at
national level, by Unctad (2004) and Wto (2004). However, some integrations
and focus have been proposed by referring to specific Italian sources, particularly
the Istituto Nazionale per il Commercio Estero (Ice, 2004) and Mariotti and
Mutinelli (2004).
Even if any exhaustive analysis of internationalization certainly requires deeper
qualitative and quantitative investigations, these data provide useful information
concerning the role and magnitude of economic integration between Italy and the
considered geographical areas.
In the case of investments, only active internationalization has been considered,
i.e. Italian investments directed towards the considered areas, since inward
investments from these areas are almost absent. Differently, in the case of
commerce, flows have been considered in both directions, since economic
integration and international division of labour originates flows of finished or
semi-finished goods both inward and outward.

2.5 Empirical results of the case study

General features of Italian internationalization

Concerning the involvement in international trade, in the years from 1995 to

2003 (with the sole exception of 1997), the number of exporting firms has
grown. However, in the last years, the growing price of euro vis-à-vis other
currencies has reduced this positive trend, above all in terms of the total value of
the exportations. However, the widening of commercial internationalization is
evident also from the geographical point of view, as shown by figures relative to
the average number of foreign markets served by Italian exporters: 4,8 in 1995,
and more than 5,4 in 2003. Such commercial openness is strongly based on the
contribution of small and medium sized enterprises, the backbone of Italian
industrial system: 90% of the exporters refers to enterprises employing less than
50 workers, contributing for 30% of the total value of Italian exportations; big
enterprises’ (more than 250 workers) contribution is 42%. However, considering
the degree of commercial internationalization as the share of exporting firms on
the total firms (for example in terms of the number of employees), this value
tends to become higher with bigger enterprises.

63
Considering the geographical destinations, European Union is the most important
market for small, medium and – above all – big enterprises. Outside the EU,
Eastern European and South and Eastern Mediterranean Countries represent the
most important destinations for enterprises employing less than 50 workers,
while big ones tend to export more to North America.

In the field of internationalization through multinational structures – i.e. through

FDIs – the aperture of the country has strongly grown during the 90s: if in 1995
the value of foreign investments as percentage of GDP was 8,8%, in 2002 such
figure had almost doubled. However, compared to other OECD countries, Italy is
still quite poor in terms of internationalization of production: in the same period,
for example, French shares grown from 13,2% to 45,8%, while in Germany from
10,5% to 29% (UNCTAD, 2004). These Italian low performances may be partly
explained by the well known accent on small and medium sized enterprises: the
multinational choice implies the use of financial, informative and managerial
resources not so easily available for small enterprises. However, it has to be
noticed that other countries characterized by similar industrial structures show a
stronger productive internationalization: this is the case, for example, of Spain
(from 6,2% in 1995 to 33% in 2002) and Portugal (from 3% to 26,2%).
In 2003, Italian outgoing FDIs involved 14.104 foreign enterprises (2,1% more
than 2002). From the geographical point of view, the most important destination
is European Union (39,5%), and particularly France (1.426 firms), Germany
(1.088) and UK (1.029). North America plays an important role with 11,4%
(1.414 are located in USA). The concentration of the investments in few countries
seems to confirm the importance of imitative and cumulative processes involving
investors. Concerning the differentiations of the Italian space, firms located in
Central and Northern Italy provide 96% of total foreign participation. This is
partly due to the lack of seats of multinational enterprises in Southern Italy; the
most active regions are Piedmont, Lombardy, Emilia Romagna and Lazio. Among
the Southern regions, Puglia and Sardinia are showing quite positive trends, in
the first case due to the geographical proximity to Balkans, in the second one
mainly because of the expansion of the ICTs sector.
However, productive internationalization may concern also incoming foreign
investments. Compared to other European countries, this aspect of
internationalization is extremely poor: the contribution of foreign-owned
enterprises (almost 6.000 in 2003) in terms of employment has been 7% in
2001, while the analogous figure in France in 1999 has been 14%. The panorama
of foreign participated firms is dominated by big size enterprises: those
employing more than 500 workers involve more than half of the employment of
this typology of firms. These firms comes above all from other countries of the
European Union (60% of the enterprises, 56% of the employees), followed by
North America (almost one third of the employees in the case of USA). Within
European Union, France and Germany are by far the most important investors.

64
Such firms locates almost exclusively in Central and Northern Italy (95%), and
particularly in Piedmont, Lombardy and Lazio, confirming the importance of
major urban centres in the attraction of investments and, more generally, global
flows.

Internationalization towards Central and Eastern Europe

Central and Eastern Europe represents an important destination for Italian

investors: data concerning 2004 shows the participation in 2.725 firms. In the
same year, Italian participation in Western Europe (EU-15) has involved 5.921
firms, in North America 1.727, and in Asia 1.721. In terms o employees,
shareholding in Central and Eastern Europe concerns 228.329 workers (20,6%).
Investments towards this area are even more impressive considering that, before
the 90s (i.e. before the collapse of the Berlin wall), they were almost absent: in
1986 they represented 0,6% of Italian investments, in 1996 reached 20,8%, and
in 2004 surpassed 27%.
Table 1 present some data concerning investments (shareholdings) in 2003.
Basically, most of the investments comes from Northern Italy (Lombardy
accounts for almost 37%, followed by Veneto and Emilia Romagna) and refers to
manufacture. Particularly, in the last years, the typical made in Italy sectors
increased their incidence, as testified by the importance of the clothes, leather
and textile sectors. Important firms like Benetton, Max Mara and Tollengo, for
example, invested heavily in Hungary and Poland in recent years. It has to be
noticed that the scarce presence of investments in high-tech sectors is a general
problem of Italian investments, not only in Central and Eastern Europe.

Concerning destinations, Romania, Russia and Poland are by far the most
relevant markets, followed by Hungary, Czech Republic and Bulgaria. It has to be
noticed, from the geographical point of view, that many empirical analysis (such
as that of Rey and Molinari, forthcoming) has emphasized that such investments
are strongly polarized by a few metropolitan areas, basically the capital regions,
while the vast majority of the areas are basically excluded from the phenomenon
(Figure 1).

65
 Table 9 : Number of inter-firm shareholdings in Central-Eastern Europe by
geographical area and economic sector
Number of participated foreign firms
Economic sector North- North- Central Southern Sicily and
Total
Western Italy Eastern Italy Italy Italy Sardinia
Extractions 1 1 5 0 0 7
1.4
Manufacture 609 563 184 68 5
29
Food, beverage and tobacco 35 77 20 2 0 134
Clothes, leather, textile 193 209 79 33 1 515
Wood and furniture 27 91 27 13 0 158
Paper and publishing 32 9 9 1 0 51
Oil derived and fuel 1 0 2 1 0 4
Chemical 42 13 4 1 0 60
Rubber and plastic 28 23 7 1 1 60
Materials for constructions,
31 28 6 7 0 72
glass, ceramics
Metal 88 54 11 5 2 160
Machinery 50 30 7 2 0 89
Electric machinery 42 24 12 2 1 81
Equipments for transports 40 5 0 0 0 45
Energy, gas, water 17 6 3 1 0 27
Constructions 31 33 24 16 1 105
Commerce 315 210 154 14 5 698
Logistic and transport 27 54 33 5 0 119
Information and
11 10 14 0 5 40
communication
Other services 76 33 8 0 1 118
1.0 2.5
Total 910 425 104 17
87 43
45. 30.
11. 1.1
Employment 133.335 600 014 221.329
206 74
Turnover (millions euro) 8.923 3.2 4.9 17.500
305 77
82 13
Source: http://www.ice.gov (on May, 2005)

66
 Figure 13 : Investments as percentage of GDP in Poland, Czech Republic,
Slovakia, Slovenia, Hungary and Romania, Nuts 2 level, 2000

Note: Figures refers to total inward investments (not just from Italy)
Source: The Vienna Institute for International Economic Studies

At the same time, trade between Italy and Central-Eastern European countries
has grown in recent years. This is probably due to phenomena of industrial
relocalization by Italian firms; it is a fact that more than 10% of total Italian
importations and exportations is centred on this area. Such growing phenomena
is particularly focused on Italian exportations: during 2003, for example,
exportations’ growth has been 5,7%, while importations’ 3,7%, producing a
commercial credit balance, with respect to this area, of 2 billions euros. Italy is
one of the most important European suppliers of the area – the second European
country concerning the increase in the incidence of Italian products in this area
during the period 1999-2003 (the first has been Spain). The eight EU countries
of this area involve 6% of total Italian exportations, and such figure is showing
positive dynamics. The most important country in terms of importations is
Poland. However, particularly important is the position of Romania: in the last
ten year its weight in terms of Italian exportations is basically doubled, and in

67
2003 the country has surpassed Russia, becoming the second most important
importer of the area. Similarly, Czech Republic is becoming a more and more
relevant commercial partner: during 2003, Italian exportation rose by 16,2%.
Considering the typology of products, Italian exportations concerns above all
machinery, (5.947 millions of euro), followed by textile (2.692), leather (2.454),
electric and optical machineries (2.416). Differently, importations refers above all
to minerals and fuels (7.395 millions of euro), metals (3.643), motor vehicles
(2.166) and leather products (2.103).
On the side of Italian importations, from a geographical point of view, the most
important commercial supplier is Russia, providing more than 30% of total flows.
Such trend is strongly growing (4,2% in 2003) – with the sole exception of year
2002.

Internationalization towards South and Eastern Mediterranean countries

Despite the growing importance of inward investments in most geographical

regions, the South and Eastern Mediterranean area is basically characterized by
scarce performances, both at world level and in the framework of developing
countries (Salabé, 2001). While world inward FDIs between 1991 and 2000
growth from 159 to 1.271 billion dollars, in South and Eastern Mediterranean
countries the increase has been much lower, passing from 2,3 to 9,8 billions.
Moreover, considering such data in a different perspective, the weight of the area
at global level has decreased from 1,4% to 0,8% of world inward flows.
It is a common discussion whether the construction of a free trade area between
European Union and South and Eastern Mediterranean Countries, by enlarging
the local market, will support an expansion of the investments directed toward
this area. In facts, one of the most important aspects of the Euro-Mediterranean
Partnership proposed in Barcelona in 1995 concerns the promotion of economic
integration until 2010, both by encouraging cooperation and by removing
normative (for example legal and fiscal) “brakes” for the free movement of
financial and commercial flows. However, considering the progressive integration
of the European Union in Central and Eastern European markets, the future for
South and Eastern Mediterranean Countries probably deserves both opportunities
and risks. Consider, for example, that one of the most evident reasons to invest
in the Mediterranean area is certainly connected to the low labour costs. It has to
be noticed that such “low” labour costs, however, is higher than in Central and
Eastern European countries, not to mention Asian ones. Considering, in addiction
to all this, the growing economic integration between Eastern and Western
Europe, together with the political instability and scarce infrastructural
endowment of the South and Eastern Mediterranean rim, the general framework
behind this low attractiveness becomes more and more clear.
Data concerning Italy confirm these world trends. In 2003, the weight of Italian
investments directed towards this area is a mere 1,9%. Moreover, Italian

68
investments are polarized by a few countries: Turkey and Lebanon get 63% of
Italian investments, and the figure surpass 70% including Tunisia.
A strong polarization is evident also considering the regions of origin of the
investments. Considering the number of foreign firms with an Italian participation
in 2004, 718 out of 932 enterprises concerns North-Western Italian regions
(Table 2). The role of Central Italy is far lower, with 111 firms, while North-
Eastern regions contribute with 80. Southern Italy participates with 23
enterprises: despite the geographical proximity of the area, Southern Italy
confirms poor performances in terms of industrial internationalization. It is
therefore easily to understand the presence of strong patterns of specialization
that reflects the economic orientation of Northern Italian industrial structure:
63% of the participations (67% in terms of sales, 89% in terms of employment),
concerns manufacture, and particularly textile, leather and clothes productions;
Veneto is the most important region regarding investments in these sectors.
Lombardy and Piedmont tend to invest more in chemical and mechanical
industries, while Lazio in extractive ones.

The situation is quite different in the case of commercial flows. Southern and
Eastern Mediterranean countries represent important destinations for Italian
commerce. First of all, it has to be noticed that the Mediterranean area in general
represent, for Italy, the pivot of trade flows, absorbing in 2003 more than 30%
of exportations and providing 25% of importations. Though most of these figures
refers to the European rim (referring to 24% of exportations and 18% of
importations), it has to be noticed that the importance of the Southern and
Eastern side has grown during the 90s, particularly due to the rising role of
Algeria, Lebanon, Turkey, Syria and Israel. The penetration of Italian products in
the area is quite higher than in the case of other European countries, like France
and Germany. Currently, the most important Italian partners are Tunisia and
Lebanon – absorbing more than half of the commercial flows directed towards
Mediterranean Africa – while, on the East side, Turkey and Israel. The Italian
exportation profile includes some high-value products, particularly machinery,
but is above all focused on many semi-fished products of the clothes and leather
industry. In this framework, in 2003 Italy has been the most important
commercial partner for Algeria and Lebanon, the second for Tunisia (the first is
France), the third for Egypt, Morocco and Turkey, the fourth for Jordan, Israel
and Syria. Exportations comes basically from Northern Italy, and particularly
from North-Western regions, accounting for 44%. Considering the various
regions, Lombardy is the most important (31%), followed by Veneto (11%),
Emilia Romagna (10%) and Tuscany (7%).

69
 Table 10 : Number of inter-firm shareholdings in Southern and Eastern
Mediterranean Countries by geographical area and economic sector

Number of participated foreign firms

North- North-
Economic sector Central Southern Sicily and
Western Eastern Total
Italy Italy Sardinia
Italy Italy
Extractions 12 0 6 0 0 18
49 58
Manufacture 36 43 4 2
9 4
Food, beverage and
25 4 4 2 1 36
tobacco
27 29
Clothes, leather, textile 15 7 0 0
6 8
Wood and furniture 20 2 4 0 0 26
Paper and publishing 13 0 0 0 0 13
Oil derived and fuel 7 0 2 0 0 9
Chemical 17 0 3 0 0 20
Rubber and plastic 22 1 1 1 0 25
Materials for
constructions, 27 3 10 0 0 40
glass, ceramics
Metal 20 1 2 0 0 23
Machinery 19 4 5 0 0 28
Electric machinery 34 4 3 0 1 42
Equipments for transports 19 2 2 1 0 24
Energy, gas, water 3 0 0 0 0 3
Constructions 28 7 21 4 0 60
12
Commerce 87 22 15 1 2
7
Logistic and transport 36 9 13 1 6 65
Information and
21 2 4 0 1 28
communication
Other services 32 4 9 1 1 47
71 11 93
Total 80 11 12
8 1 2
73. 5.7 10. 90.
34
Employment 161 88 704 92 087
2
Turnover (millions euro) 6.4 50 2.6 19 9.6
33
43 8 41 44
Source: http://www.ice.gov (on May, 2005)

Concerning importations, the most important areas are Lebanon and Algeria,
providing with their oil and methane 80% of the value of the importations from
South Mediterranean countries. The importation of these products is so relevant
that the commercial balance between Italy and the African rim is negative (while
it is positive in the case of the Asian one). It has to be noticed that such figures
are quite lower that a decade ago, due to an Italian policy of diversification in the
energetic supply (in favour of Venezuela and ex-URSS territories). The second
typology of importations concern clothes and leather, due to the discussed
process of relocalization of parts of the product cycle in the area, particularly

70
towards Morocco and Tunisia. Differently from the exportations, importations are
not only focused on Northern Italian regions, but also on some Southern
territories, particularly Sicily (28%) and Sardinia (9,6%), due to the acquisition
of crude oil (Sicily presents a certain specialization in chemical productions).
Among the Northern regions, Lombardy is the most significant, providing 20% of
the importations (Fig. 1)

Figure 14 : Exportations (on the left) and importations (on the right) from the
South and Eastern Mediterranean countries, per region, 2003

Source: Società Geografica Italiana (2005)

2.6 Conclusion

This brief analysis emphasizes a certain differentiation in the patterns of the

Italian internationalization in the considered areas. First of all, the Italian
weaknesses in terms of internationalization are evident: not only the investments
are scarce, but quite limited to labour intensive sectors: such an emphasis on
vertical investments testify a scarce orientation towards technology, strategic
alliances, foreign market penetration. Moreover, it is evident that such kind of
investments reveal some perils of labour-loss in the home country, a
phenomenon often debated in Italy with the progressive closure (and
relocalization) of labour-intensive industrial plants. This is certainly a problem
that every developed country has to face nowadays, but the progressive erosion
of Italian competitiveness, declared by international organizations such as OECD
and World Economic Forum, emphasize the need for more (and maybe different)
internationalization.

71
Concerning the two considered areas of destination of Italian internationalization,
it is possible to conjecture the presence of two rather different roles in front of
globalization processes. Central and Eastern European countries confirm their
nature of transition economies: they show a strong capability to attract
investments. Even if the investments are concentrated on a few sectors, the
investment profile is more various than in the South and Eastern Mediterranean
case. Moreover, the import and export orientations are slightly different: Italy
buys, besides minerals and oils, finished or semi-finished motor vehicles and
clothes, probably as a consequence of multinational relocalization of Italian
production chains. At the same time, Italy sells machinery and production tools
of different nature, as a further evidence of a certain division of labour
concerning high value sectors.
In the case of Southern and Eastern Mediterranean Countries, such
internationalization patterns are quite weaker, not only in quantitative terms, but
also in qualitative ones. The economic relations between Italy and this rim
assume the classical form of those between developed and developing areas,
concerning the mere acquisition of inputs and the relocalization of low value
added and low technology industries, notably leather and textile productions. The
exportation of machinery, production tools and technology in general is, in this
case, quite scarce. In terms of globalization typologies, the situation of Central
and Eastern Europe seems to be that of a somehow active and increasing role in
globalization processes; on the contrary, South and Eastern Mediterranean role is
more passive and functionally dependent. This situation in even more severe if
we consider the strong polarization of internationalization processes: few
countries plays a relevant role, while the lack of infrastructures and political
stability put other countries of the area in a position of functional and economic
periphery. Such narrative on polarization, however, is not absent in Italy, where,
at a different geographical scale, the peripherality of the Southern regions is, still
today, an evident reality – being external to many forms of international
economic integration.

72
References

ƒ Dunning J. H. (1981), International Production and the Multinational

Enterprise, Allen & Unwin, London.
ƒ Dunning J. H. (1993), Multinational Enterprises and the Global Economy,
Addison-Wesley, Reading (Ma).
ƒ Grandinetti R. and Rullani E. (1996), Impresa transnazionale ed economia
globale, Nuova Italia Scientifica, Roma.
ƒ Helpman E. and Krugman P. (1985), Market Structure and Foreign Trade,
MIT Press, Cambridge (Ma).
ƒ Istituto Nazionale di Statistica (Istat) and Istituto Nazionale per il
Commercio Estero (Ice) (2004), Commercio estero e attività internazionali
delle imprese. Annuario 2003, Istat e Ice, Roma.
ƒ Istituto Nazionale per il Commercio Estero (Ice) (2004), L'Italia
nell’economia internazionale. Rapporto Ice 2003-2004, http://www.ice.it.
ƒ Mariotti S. and Mutinelli M. (2004), Italia multinazionale 2004. Le
partecipazioni italiane all'estero ed estere in Italia. Sintesi, Istituto
Nazionale per il Commercio Estero, Roma.
ƒ Salabè C. (2001), Investimenti diretti esteri nei paesi del Mediterraneo,
Note di approfondimento, Istituto Nazionale per il Commercio Estero. Area
Studi, Statistica e Documentazione, dicembre; http://ww.ice.it
ƒ Sayer A. and Walker R. (1992), The New Social Economy, Blackwell,
Oxford.
ƒ Shatz H. J. and Venables A. J. (2000), The geography of international
investments, in G. L. Clark, M. Feldman and M. S. Gertler (eds.), The
Oxford Handbook of Economic Geography, Oxford University Press,
Oxford, pp. 125-145.
ƒ Società Geografica Italiana (2005), Scenari italiani 2005. L'Italia nel
Mediterraneo. Gli spazi della collaborazione e dello sviluppo, Rapporto
annuale della Società Geografica Italiana, Roma.
ƒ United Nations (Unctad) (2004), World Investment Report 2004, United
Nations, New York and Geneva.
ƒ Rey V. and Molinari P. (forthcoming), L’Europe de l’Est entre
européanisation et mondialisation.
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the Product Cycle”, Quarterly Journal of Economics, v. 80, pp. 190-207.
ƒ World Trade Organization (Wto) (2004), International Trade Statistics
2004, Wto Publications, Geneva.

73
 3. THE IMPACT OF DELOCALISATION ON THE POSITION OF EUROPEAN
REGIONS IN VALUE CHAINS

Laurent Aujean
Gilles Van Hamme
IGEAT

3.1 The example of textile value chain in three marshallian

district.

3.1.1. Justification of the case study and links to key question

This case study comes within the scope of the key question about the internal
differentiation of Europe. Globalization is supposed to have important impacts on
Europe and, as a hypothesis, to its internal differentiation. One can discuss about
this too general concept of globalization but the fact is that Europe becomes
more and more open to the rest of the world because of the openness of
economic boundaries.

The general idea is that this growing economic openness of Europe will have
different impacts at regional level regarding to the vulnerability or strength in the
international competition. Textile industry is a perfect example when one is
trying to link European regions to the rest of the world. General agreements on
trade have more and more diminished the protection of European textile, and
this sector is subject to an intense competition with the low labour cost
countries. The reactions of textile regions to this growing competition is the main
question we will focus on through the examples of three marshallian districts in
Belgium, Denmark, and Italy.

3.1.2. Scale of the study

Our study will focus on three cases of regions very specialized in the textile
industry. These three areas could be considered as industrial or marshallian
districts since they built a coherent network of small and medium interconnected
enterprises mainly specialized in the textile industry, and often considered as the
origin of good economic performances.

These three industrial districts, located in the map 10, are:

• Courtraisis, inside the Western Flanders ;
• Prato, inside the Toscana (Third Italy);

74
• Herning-Ikast, inside the Ringkoebing County of western Jutland.

The table 11 gives a general idea of the importance of these three areas. As one
can observed, the scale of these three examples is not the same, especially the
Danish area covered is a much more restricted one, even if the dynamics we will
put into the fore on this area concern a larger area. But in all cases the
population of these areas are relatively small.

Another spectacular difference is the local specialization in the textile industry:

whereas Prato is a nearly mono-industrial region, the Courtraisis in Belgium and
the Herning-Ikast municipalities in Denmark have a much more diversified
economic structure. Finally, let’s notice the “Courtraisis” area represents nearly
37,8% of the national textile (for 5 % of the population), the Herning-Ikast
district 26% of the very limited Danish textile industry, while this part is about
6% of Italian textile for the Prato province (only 0,4% of the national
population).

Table 11 : Scale of the regional case studies around 2002

Part of the
Share of
Share of the Textile local
Population in national
NUTS areas national employment employment
2003 textile
population in 2002 in textile
employment
industry
South of western Three nuts 3 areas
506900 4,9 19466 37,8 8,2
Flanders (arron-dissement)
Herning-Ikast 2 nuts 5 areas
82303 1,5 3803 26,0 7,8
districts (municipalities)
1 nuts 3 area
Prato district 232300 0,4 37017 6,1 40,4
(province)
Sources: http://www.istat.it/ pour l’Italie
- O.N.S.S. et I.N.A.S.T.I pour la Belgique
- http://www.dst.dk/

75
 Map 10 : location of marshallian industrial districts considered in this case
study.

3.2 Context of case study

3.2.1 The concept of Marshallian districts and the conditions of

their emergence

Marshallian districts are very dynamic territorial system characterized by a dense

network of interconnected and very specialized small and medium enterprises,
generally oriented in light industry (Colli A., 1998). They emerged in very specific
historical contexts.

In most of the marshallian districts in Europe, we can identify from the literature
several common characteristics which could explain the emergence of such
specific local industrial network.

Firstly, most of these districts have a long tradition in the textile industry, clearly
anterior to the industrial revolution. Regions like interior Flanders, Cholet,
Central Italy had an important homework industry from at least the eighteen
century. This activity was a complement to agricultural production in very dense
overpopulated areas and was dominated by a merchant class residing in the very
dense urban regional network (Houssel J.P., 1995). This specific organization

76
leaded to a social and economic crisis in the nineteenth century as they miss the
train of the industrial revolution, but often more or less survived until the
beginning of the twentieth century. Slowly, a local modern entrepreneurship
emerged from the crisis. Nevertheless, the real expansion came after the Second
World War with a complete renewal of the industrial infrastructure. It is
interesting to notice that this expansion occurred in sectors of light industry
completely abandoned by the big fordist industry. These activities never really
interested the fordist transnational firms and the fordism-taylorism system has
never been easily applicable in these sectors with the result that these specific
flexible local networks have been able to concentrate some of these light
industries. This dynamism has been prolonged after the crisis of the seventies,
since the productive system of the marshallian districts were very adapted to the
requirements of a post fordist flexible economy. We could say that they have
been flexible before the flexible capitalism even emerged.

Secondly, as we noticed briefly, these regions have built a dense network of

small and medium interconnected enterprises using subcontracting and
constituting strong informal relations. These enterprises are thus fully engaged in
a complex dialectical process of cooperation and competition. This very flexible
organization is able to answer quickly to the changeable demand of the market.

Thirdly, these districts have been able to strengthen their initial success thanks
to a process of rising in the technological value chain of textile industry, with
innovations that could disperse through the entire regional industrial network.
They could consequently evolve to the most promising segments of the textile, or
even diversify to other sectors strongly linked to the textile value chain, such as
metal production often developed on the basis of textile machinery (Scherrer F.,
Vanier M., 1995).

Finally, we observe in most of these areas specific social features, notably what
we could call an interclassist “common agreement”. It means concretely that
from the worker to the manager, there is the same social and ideological
framework. For example, the “Courtraisis” (south of Western Flanders) is
dominated by what we could call the social-Christian pillar, while in Toscana, the
communist hegemony guarantees the social cohesion even in business.

3.2.2 The international context

The general context of these case studies is related to the so called globalization,
which induces three main evolutions in our field.

77
Firstly, there is a growing competition in the textile industry. This growing
competition that Europe has to face is linked to the W.T.O. rules, notably the
suppression of all limits of imports which came into force the 1.1.2005, and to
the enlargement to the East and Central European countries.

Secondly, related to this competition but mainly to gains in productivity, there

has been a dramatic drop in the textile employment as you can notice from the
table 12. On the same period of time (1984-1999), the production has
significantly grown, except for Denmark, whose production is relatively marginal.
These general evolutions don’t tell us about the evolution of the districts covered
by this study but gives us the general context of crisis which they have to face.

Table 12 : Textiles output and employment in Belgium, Denmark and Italy,

1984-1999
Output (ECU million in constant Change Employment Change
1990 prices)
1984 1994 1999 1984-99 1984 1994 1999 1984-99
Belgium 5112 5243 5612 9.8 61312 45326 41417 -27.8
Denmark 1375 1041 1069 -22.2 17395 12549 9941 -36.6
Italy 27861 32507 31874 14.4 434967 364324 338823 -22.4
EU12 101713 96809 90287 -11.2 1817611 1323711 1149535 -38.3
Source: DUNFORD M. (2004), The changing profile and map of EU textile and clothing industry

Finally, if we consider the impacts of globalization on regional level, one has to

consider the re-metropolisation process. This process describes the economic
recovery of the big metropolitan areas in the context of a post fordist flexible
capitalism. In this new economic context, the old vertical firm is replaced by
enterprises limited to their core activities, with a growing tendency of
subcontracting the rest of their tasks. Metropolises are supposed to be better
placed to answer this reorganization since they can offer a range of diversified
service activities and sometimes strong connections between them. In this new
context, the place of marshallian districts has to be discussed in a deeper way.

3.3 General hypothesis

As a general hypothesis, we can suppose two kinds of reaction of the textile

industrial districts regarding to the context of crisis and globalization they have
to face, especially the growing competition with low wages countries of Central
and Eastern Europe or eastern Asia. In one hand, these evolutions could produce
a general crisis due to their specialization in a declining sector. But, on the other
hand, the economic structure of interconnected small and medium enterprises is
sufficiently strong to diversify and improves the economic activity. In this
hypothesis, several ways are possible to face the crisis: diversification of the
structure for example to other light industries, rising in the value chain with the
production of textile machinery or chemical products, restructuring in favour of

78
specific segments of high quality and added value. Our three case studies will
perfectly illustrate these different possibilities.

More generally, it is interesting to discuss the place of the marshallian districts in

the new flexible capitalism, described here over, but also in this knowledge-
based economy, where research and development, on one hand, and
information, on the other hand, are supposed to be the key for the future
growth. This structural change could have both positive and negative impacts on
the marshallian districts. On one side, these regions are characterized by their
flexibility and could be able to benefit of this new flexible economy, because of
their capacity to adapt quickly to a very unstable market. On the other side, the
insufficient diversification and the reduced size of the enterprises could be
disadvantages in a knowledge-based economy, notably because of a relatively
low qualified labour or the insufficient level of Research and Development. So,
the future technological progress could be limited by the insufficient levels of
education of the workforce, often trained from a very young age inside the
enterprises, and by an insufficient access to research and development, as
illustrated by their low level of patent.

3.4 Replicable methodology, problems, questions

Our methodology will be followed in three steps:

1. To analyze the general response at both UE and national scales to the
globalization and the textile crisis. Except the global indicators of output and
employment in the textile sector, we will particularly focus on the structure of
imports and exports flows at national level, drawn from the ITCS data base
(trade on 7000 commodities between the OECD countries and all the other
countries). Through these data, we could observe the evolution of the European
countries in the international division of work in textile and clothing industry. Are
these exports collapsing or do we observe a restructuring towards more
technological segments of the value chain? More globally, this analysis could
allow us to draw a general picture of the international division of labour in this
industry and especially the place of Europe in it.
2. To search for the specific answers of the marshallian districts covered by
this study. This will be firstly evaluated by general indicators: evolution of the
GDP in a long time period if possible; evolution of the employment market and
the level of unemployment. Secondly, we will focus on more specific and
structural indicators: evolution of the employment textile, evolution of
employment in the different segments of the textile value chain, the general
evolution of the economic structure, especially the evolution of the research and
development or in business services sector, which are often considered as the
keys for the actual and future economic growth. These indicators will be as much

79
as possible treated at the local scale described here over. But in some cases,
notably to have longer time series, we should be obliged to use a less refined
scale, to evaluate the regional evolution in which the districts are inserted.
3. Beyond this quantitative approach, the literature will be the main basis of
this study, as it provides the best lighting to evaluate the structures and the
recent evolutions of the areas covered here. Moreover, literature offers us a
qualified and often relevant explanation of this industrial success which allows to
replace it in specific historical contexts.

3.5 Empirical result of the case study: Specific reactions of the

marshallian districts to globalization

3.5.1. Global evolutions of the marshallian districts

The table 13 evaluates the general economic wealth of the three districts
considered here, as well as their recent evolution.

Table 13 : Economic performances of some regions including industrial districts,

1995-2002 (National level is between brackets)
Level of GDP/inhab
Average annual
in 2002 in % of Unemployment
growth 1995-2002
European level
South of Western Flanders 4,54 (4,66) 119,5 4,5 (8,4)
Prato 3,57 (3,93) 128 5,6 (8,0)
Ringkoebing 5,19 (4,94) 123 4,7 (5,5)
Source: Eurostat

The recent evolutions show relatively low economic performances of these areas,
lightly inferior to the national average, except for the Herning-Ikast district. This
relative slowing down is interesting to underline as these areas have known
strong economic performances for the last decades. We have no long term data
at the scale we are working with, but we can still draw some conclusions from
the level of GDP/inhab in some nuts 2 regions, in which the areas covered by this
study are included. For example, Toscana was around 87% of the European level
of GDP/inhab in 1960, while in 1984, its level was 114% of the European
average, and maintains around 112% in 1990. During the nineties, regional
accounts have been completely reviewed, and it is difficult to compare the data.
We observe the same evolution in Western Flanders, with the level of GDP/inhab.
in comparison of the European level which has grown from 85% to 106%
between 1960 and 1990.

It seems that, all things being equal, these specific districts are coming to the
limit of their performances. But, this should not be exaggerated: firstly,
economic performances are hardly below national one (it is thus more a relative

80
decline than a real crisis); secondly, unemployment remains very low; finally,
this tells nothing about the causes of the process and it seems that economic
performances are relatively good if one considers the structural weakness of
these districts because of the high share of declining industrial employment.

3.5.2. The case of southern Western Flanders (or Courtraisis)

The Belgian Courtraisis is limited (Musyck B., 1995), at least in the statistics
presented here, to three district South Western Flanders province: Kortrijk, Tielt
and Roeselaere.

Emergence of a marshallian district

Coutraisis in the south of Western Flanders is very representative of the

European marshallian districts. Innner Flanders has a very ancient tradition in
the linen textile industry, in the form of homework industry in complement of a
relatively poor agriculture, especially in the Lys valley, from at least from the
seventeenth century. Industrial revolution has thrown this area in a deep crisis in
the nineteenth century, except in Gent which has been the only pole of early
modernization at the very beginning of this century. Elsewhere, local urban
merchants continued to benefit from low cost of labour and have been unable to
adapt to the new technologies that were taking place at the time. However,
slowly, a local entrepreneurship emerged and modernized the industrial
infrastructure on the basis of the existing structure, still very specialized in linen
industry. It is interesting to notice that the big Belgian finance has never been
interested in these crisis areas, where the industrial structure was very
dispersed, with the result that local entrepreneurship has never been dominated
by national investors.

The post war development

It is really after the textile crisis of the fifties that this region, still relatively poor,
has emerged as a real endogenous area of strong development. As we already
noticed, the GDP/inhab has grown from 85% of the European average in 1960 to
106% in 1990.

This success is due to the conjunction of a new international context and the
specific structure of this area. Europe has known exceptional growth in the post-
war period, in a fordist context, where the biggest investors focused on specific
fordist industries, those which allow high gains of productivity thanks to a
segmentation of the work process. Light industry has been largely excluded from
this process and remained more dispersed. Regions as inner Flanders have thus

81
been able to modernize and diversify their industrial structure in specific sectors
on a very endogenous basis. The table 14 illustrates the diversification of the
industrial structure between 1958 and 2002.

This autonomous growth is illustrated by the emergence of a local banking

system to support this development and by the fact that most of the enterprises
are still family-owned, even when they spread outside the region (Musyck B.,
1995). The first thing to notice from this table is the remarkable stability of the
industrial employment, whereas in the same time the national industrial
employment has dropped from more than 1260000 to 680 000! As we can
observe from the table, the district has been able to compensate the dramatic
drop in textile and clothing industry by two main structural evolutions. On one
hand, there has been a horizontal diversification to other light industry,
especially furniture developed on the basis of an industry of panel of linen fibre,
and food industry, strongly linked to the development of a vegetable culture. On
the other hand, there has been a vertical diversification with a rising in the value
chain of textile, for example by the production of textile machinery (45% of the
national production) or even synthetic fibres (15% of the national production).

Table 14 : Evolution of the industrial structure, from 1958 to 2002

Structure of Structure of
Employment in the industrial Employment the industrial
1958 employment in 2002 employment
in 1958 in 2002

Textile industry 36950 50,1 17676 25,2

Clothing industry 9286 12,6 1912 2,7
Wood-furniture 7050 9,6 7931 11,3
Food industry 4292 5,8 10167 14,5
Electric, Mechanic , transport machinery and
equipment 4291 5,8 10418 14,8
Smelting works, lamination and forges 3243 4,4 4025 5,7
Non ferrous ores 3149 4,3 2742 3,9
Metal works 1977 2,7 5426 7,7
Printing 777 1,1 2454 3,5
Precision instruments 620 0,8 481 0,7
Other manufacturing industry 2081 2,8 6989 10,0
Total manufacturing industry 73716 100,0 70220 100,0
Sources: Muysick (1995) for 1958; own evaluation on the basis of ONSS for 2002

In conclusion, south of Western Flanders has created a dense integrated network

of small and medium enterprises, inserted in a very interdependent local civil
society (the social-Christian pillar system). It has built a solid economy, less
subject to delocalization than the industrial spaces dominated by transnational
capitals (Vandermotten Ch., Marissal P., 2003).

82
Recent Economic performance

Because of its flexibility, the district has shown a remarkable capacity of

adaptation to the new economic environment emerging in the seventies, the so-
called flexible capitalism (Boyer, 1986). The economic performances (table 15)
have remained very good after the seventies crisis and until the middle of the
nineties. From 1981 to 2001, the employment has grown at the average rhythm
of 0.45% each year while national employment remains stable. Unemployment is
near the frictional level, around 4% of the active population.

But when one looks at the most recent performances, signs of decline could be
observed: between 1995 and 2002, the annual growth of the GDP has reached
3.40 % at maket prices, that is to say a performance lightly inferior to the
national level (3.54 %). It appears that the drop in the textile employment is not
anymore compensated by the development of integrated new industrial
activities, and the tertiary growth is not always sufficient to compensate the
industrial decline.

It seems that the local flexibility and know-how are not sufficient anymore to
face the strong competition with the rest of the world. They may have reached
the limit of their capacity to improve their technology in the value chain, because
of a lack of research and development and also may be qualification. Indeed, the
level of diploma is relatively low in the Belgian context, with a strong
predominance of technical education related to the traditional activities, and the
workforce is traditionally trained inside the enterprises (Vandermotten Ch.,
Marissal P., 2003).

However, one has to qualify such a dark picture of the situation. In no way, we
can speak of a crisis, hardly a slowing down in the remarkable long term
performances of the district. Moreover, most of this slowing down is due to
structural effect more than a lack of local dynamism. It means that if you
eliminate the fact that this region has a structure very oriented to some declining
industrial sectors, the performances are still remarkable.

3.5.3. The marshallian district of the Prato

The specific historical and cultural context

The marshallian district of Prato is in many aspects very similar to the

“Coutraisis”.

83
Firstly, there is long pre-industrial tradition in the textile industry, mostly based
on the wool weaving. From this long tradition, and despite of the crisis during the
industrial revolution, survived a local network of active entrepreneurs and
workers and a specific sectorial specialization.

Secondly, the dense network of small towns from which the merchants organized
the production is another common point with inner Flanders.

Thirdly, and more importantly, there is this exceptional socio-cultural

homogeneity, based on common ideological and political local culture. Here the
communist party has played the role of the social-Christian pillar in the
Coutraisis. These “subcultures” have endowed the necessary flexibility to such a
complex economic system, especially in the working relations. In this context, we
can speak of a real cooperation of workers and capitalists (Colli A, 1998) instead
of class struggle. Indeed, the distinction between workers and managers is not
always as clear as it could be in other production systems since many workers
have founded their own enterprises. This creates a very sure economic
environment which reduces considerably the cost related to work struggles and
also allows confident relations between the different actors of the production
system. We can also outline this apparent paradox of a dominant communist
party which allows social peace rather than favour class struggle. Indeed, this
domination dates from the second world war and is very linked to the specific
social networks that pre-exist such a domination, for example a strong tradition
of local democracy (the Italy of the municipalities typical of the central Italy) or
the communitarian familiar system. In other terms, the social cohesion was
strong before the communist party became dominant, and it only reinforces the
cultural homogeneity.

Industrial structures and recent economic performances

The recent economic performances of the Prato districts are not what we could
observe in Coutraisis. After a severe drop in the eighties, there is a significant
recovery of the Prato district in the nineties. The most significant aspect is the
growth of the industrial sector in a context of global de-industrialization. The
pattern is thus quite different than the one observed for the Belgian district. But
from this evolution, we cannot draw any general conclusion about the economic
wealth of the Italian marshallian districts.

84
 Table 15 : Evolution of the employment in Prato, compared to Toscana and
Italy, 1981-2001

Average annual growth, Average annual growth,

1981-1991 1991-2001
Manufacturing Manufacturing
Total Total
industry industry
Prato -2,60 0,07 0,24 0,93
Toscane -1,76 0,65 -0,60 0,66
Italie -1,07 1,15 -0,72 0,76
Source: 8° Censimento generale dell'industria e dei servizi 22 ottobre 2001, http://www.istat.it/

The table 16 will help us to understand this evolution, as it gives the structural
evolution between 1991 and 2001.

The first thing to underline is the exceptional weight of the manufacturing

industry, mostly in the textile sector. While this part is about 31% of the
employment for whole Italy and 33% in Toscana, it reaches the level of nearly
50% in the Prato, whose 40% in the textile industry. This means clearly that this
district has never known the diversification we observed in the “Coutraisis”
district in Belgium. The structure is more conform to a “pure” industrial district
since we can observe a large amount of very small family enterprises, in different
complementary segments of the same sector. Beyond this diversification inside
the textile sector, the diversification has been very weak, except in the textile
machinery.

A priori, this overspecialization should be considered as a weakness but it

appears that after the drop of the eighties, the district has known positive
evolutions and even maintained in a difficult context the employment in the
textile industry. Most recent data should be needed to confirm these evolutions
for the last years, when the international competition increased severely.
Nevertheless, we can argue that this district had an efficient answer to the
challenge of globalization. This is due to a certain level to reorientation of the
industry: the growth of the clothing industry, generally less qualified, means in
fact the development of specific fashion industry; other specific segments have
been developed such as “ennoblissement textile”, which is a sign that a
technological rising in textile value chain.

However, the resistance of the textile industry is not all, since we can notice that
business services, often considered as the key for a actual and future growth in a
post fordist economy, have nearly doubled in the nineties. It represents nearly
12% of the total employment (14 % in whole Italy), which is remarkable if you
consider this sector has a tendency to concentrate in big towns.

85
All these observations confirm the remarkable ability of the district to adapt its
structures in a very changeable and unstable economic environment, notably
with the growing competition of the eastern European and Asian countries.

Table 16 : Evolution and structure of the employment by section in Prato

province, 2001.

Structure of
Employment Employment the
in 1991 in 2001 employment
Section Sector in 2001
Agriculture 134 112 0,1
Extraction 5 0 0,0
Food industry 602 750 0,8
Textile and clothing industry 38020 37017 40,4
Whose Mills 10920 10330 11,3
Weaving 10800 7485 8,2
"Ennoblissement textile" 7081 7581 8,3
Other textile industry 9219 11621 12,7
Clothing 3019 5053 5,5
Leather and shoes industry 201 350 0,4
Wood industry 430 377 0,4
Paper ; printing; Edition 559 615 0,7
Chemistry, rubber and plastic industry 763 924 1,0
Non metallic ores 264 285 0,3
Metallurgy and metal works 848 1160 1,3
Machinery and equipment 1602 2315 2,5
Electrical Machinery 455 787 0,9
Fabrication of means of transport 15 42 0,0
Other manufacturing industry 586 601 0,7
Manufacturing industry 44345 45223 49,4
Distribution of gas, electricity and water 324 12 0,0
Building 6550 7953 8,7
Trade 17008 15826 17,3
Hotel-restaurant 1720 2211 2,4
Transportation and communication 2348 3258 3,6
Finance 1631 1968 2,1
Business services 5734 10836 11,8
Education 213 249 0,3
Health and social action 1106 1264 1,4
Collective, social and personal services 2299 2433 2,7
Total 83417 91545 100,0

86
3.5.4. The Herning-Ikast district in Denmark

The emergence of the marshallian district

The late industrialization of Denmark at the end of the nineteenth century has
begun in Copenhagen and in the others towns of the eastern part of the country.
Less densely populated, Western Jutland remains a very rural and relatively poor
region. However, in the last decades, the industry has considerably grown in the
counties of Ribe, Rinkgoebing, Viborg, south and north Jutland, with a part of the
national industrial production going up from 18% to 30% between 1971 and
1989.

The Herning-Ikast district illustrates this dynamism. The textile production has
begun in the seventeenth century, as a complement to a poor agriculture in a
region dominated by sheep landes. The wool has given birth to a specific
production of socks, mostly exported.
This production has survived to the industrial revolution: local firms have
manufactured and commercialized homework industry of hosiery. The social
protection system has allowed these firms to survive from the crisis in the
thirties.

In the fifties and sixties, most of the experts foresaw the collapse of the hosiery
industry, because of a stagnating market, of high production costs, of low level
of qualification of the workforce, and of a relative isolation. Nevertheless, the
district did survive, firstly thanks to taylorian rationalization, and then by the
specialization of each production unit in specific niches, inside a broader network
of enterprises; all evolutions which are typical of a marshallian district.

Due this specific organization, these firms have shown a remarkable capacity of
adaptation to the new flexible capitalism, characterized by a strong requirement
of flexibility in a very changeable market. They pay a growing attention to the
design and the quality; they modify frequently their products to adapt them to
new demands. They also use the most modern machinery, but they invest more
in research and development and design.

In the working relations, the system has replaced the taylorian division of work
by a specific management of the staff in small groups in order to avoid too
repetitive tasks. Very significant of the working relations is the general attitude
of the trade unions: despite of the high share of union members among the
workers, it appears that their attitude pays more attention to the interests of the
firms than to the national watchword.

87
Recent evolutions

We will now focus on the answer of this district to the growing international
competition. The table 17 shows clear signs of low performances compared to
regional and national environment: while until 1994, the Herning-Ikast district
keeps good economic performances, in the last decade, the situation has
deteriorated.

The structural evolutions, as shown in table 18, will allow us to better understand
these evolutions. Let’s notice first the structural differences with the two others
marshallian districts. Firstly, textile industry represents only about 6% of the
total employment, a share comparable to the southern Western Flanders, very
inferior to what we observed in the Prato district. However this level reached
15% in 1994. Secondly, as we observed for the Belgian districts, there has been
a clear diversification to other light industries, such as food, wood products and
fabrication of metal products. However, unlike the southern Western Flanders,
this district is not producing textile machinery, and forms a less complete textile
value chain.

In terms of performance, the evolutions shown in table 18 are spectacular, since

the textile employment drops from 7300 to less than 2900 employees between
1994 and 2004. In the same time, others industrial sectors resist much better,
with even a significant growth for metal products (+ 500 employees). The global
level of employment could be maintained thanks to growth in some tertiary
sectors, notably business activities and social institutions. Briefly, it seems clear
that the textile crisis affected severely the Herning-Ikast districts.

But, one has to qualify such a conclusion. Despite of this dramatic shift, the
district could maintain a certain level of production and firms have still high
levels of profit. As an answer to the growing competition, the labour intensive
activities have been subcontracted to low wages countries, for example to Lodz
in Poland. So it appears that the district has specialized in the fashion while the
production has been delocalized in central and Eastern Europe.

In conclusion, if the crisis could not be avoided because of the international

competition, local firms have been able to react to this new environment: they
developed new strategies, by delocalizing the labour intensive activities.

88
 Table 17 : Average annual growth of the employment of the Herning-Ikast
district, in regard to its regional and national environment, 1984-2004

Annual growth of the employment

1984-1994 1994-2001 1994-2004*
Herning-Ikast district 0,53 0,28 -0,26
Ringkoebing County 0,53 0,47 0,00
Denmark 0,27 0,72 0,31
* After 2002, figures are not perfectly comparable over the time. Thus the evolutions should be read only to compare regional performances.
Source: http://www.dst.dk/

Table 18 : Evolution of the employment by sector in the Herning-Ikast district,

1994-2004

Absolute Employment
Employment Employment
evolution structure in
in 1994 in 2004*
1994-2004 2004
Agriculture, horticulture and forestry 1839 1313 -526 2,86
Fishing 19 14 -5 0,03
Mining and quarrying 22 33 11 0,07
Mfr. of food, beverages and tobacco 1411 1276 -135 2,78
Mfr. of textiles and leather 7308 2855 -4453 6,22
Mfr. of wood products, printing and publ. 1788 1862 74 4,06
Mfr. of chemicals and plastic products 140 173 33 0,38
Mfr. of other non-metallic mineral products 441 370 -71 0,81
Mfr. of basic metals and fabr. metal prod. 2463 3042 579 6,63
Mfr. of furniture; manufacturing n.e.c. 1917 1435 -482 3,13
Manufacturing industry 15468 11013 -4455 23,99
Electricity, gas and water supply 289 154 -135 0,34
Construction 2062 2646 584 5,76
Sale and repair of motor vehicles sale of auto. fuel 1236 1160 -76 2,53
Wholesale except of motor vehicles 2654 3317 663 7,22
Re. trade and repair work exc. of m. vehicles 2797 3474 677 7,57
Hotels and restaurants 995 1122 127 2,44
Transport 1542 1817 275 3,96
Post and telecommunications 751 661 -90 1,44
Finance and insurance 1129 1037 -92 2,26
Letting and sale of real estate 537 597 60 1,30
Business activities 2326 3486 1160 7,59
Public administration 1963 1540 -423 3,35
Education 2837 2979 142 6,49
Human health activities 2130 2421 291 5,27
Social institutions etc. 3713 5052 1339 11,00
Associations, culture and refuse disposal 1708 1933 225 4,21
Activity not stated 289 144 -145 0,31
Total 46306 45913 -393 100
* after 2002, figures are not perfectly comparable over the time. Thus the evolutions should be read in order to evaluate main structural evolutions.
Source: http://www.dst.dk/

89
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90
 4. MIGRATION FLOWS AND IMPLICATIONS: CASE STUDIES ON FRANCE,
HUNGARY AND SWEDEN

DANIEL RAUHUT
ITPS

4.1 Introduction

Much of the debate regarding “replacement migration” has taken for granted that
if Europe opens up its borders the needed labour will show up. This is, of course,
an exaggerated view, something which has been pointed out by scholars in the
field (Browne, 2002, Gee & Gutman, 2000, W.W. Rostow, 1998). To master
the population decline, United Nations calculated that 1 840 million net
immigrants are needed during the period 2000 to 2050 (UN Population
Division, 2000). This figure is so high that it is not realistic to think that
immigration is the one and only solution to the demographic challenges.

The need for labour immigration and “replacement migration” is neither evenly
spread between countries, nor between regions in the developed countries.
Recent research indicates that the immigration flows are headed for the
metropolitan areas in the “heptagon” (London-Hamburg-Munich-Milan-Paris-
London) (Vandermotten et al., 2004), while peripheral parts of the European
Union and the candidate countries face population decline and depopulation
(ESPON project 1.1.4 Final Report).

Three case studies will be undertaken to illustrate the differences in the

migratory movements to countries in the European Union. The three studied
countries are France, Hungary and Sweden. These countries do not only
represent three different types of migratory movements, but also three different
types of economic structures; the demand for labour is a part of the economic
structure.

This paper will start discussing the migration flows to the studied countries and
the immigrants’ choice of settlement. A simple theoretical model will then be
presented, followed by empirical evidence in the studied countries. Some
scenarios for the future development will be then be discussed, and the
concluding remarks will discuss the findings.

91
 4.2 Migration Flows

4.2.1. Hungary

The migratory movements to Hungary are very modest; in 2000 the net
migration to Hungary was only 18 000 persons plus 7 800 asylum seekers. A
vast majority of the immigrants immigrated to Hungary from the neighbouring
countries; approximately 50 per cent of all immigrants came from Romania, 10
per cent from Slovak Republic, 10 per cent from Ukraine and 10 per cent from
Former Yugoslavia. 3 This migration flow was dominated by ethnical Hungarians
(Castles & Miller, 1994; Szoke, 1992). Another 10 per cent of the immigrants
came from the European Union, and roughly 10 per cent of the remaining
immigrants come from countries from the rest of the world (e.g. USA, China and
Russia). 4 Ethnical Hungarians moving to Hungary constitute about 80 per cent of
the net migration to Hungary. Less than 10 per cent of all immigrants come from
countries outside Europe. One reason for the large immigration from Romania is
that the number of check-points between Hungary and Romania increased after
the fall of the Communist system (Ilies, 2005).

Map 11 : Regional Neighbourhood immigration to Hungary in 2000

3
The OECD Migration Database.
4
Idem

92
In 2000 about 7 800 asylum seekers entered Hungary, of which 1 500 were
recognised as asylum seekers by Hungary before entering the country. An
additional 900 were accepted as refugees by Hungary after an investigation. The
asylum seekers were dominated by persons from Afghanistan, Bangladesh, Iraq,
Turkey, India and Serbia-Montenegro. 5

After the collapse of the Communist system the Hungarian Government never
feared a mass emigration of Hungarian, but to become a transit country for
migrants who wanted to make their way to the European Union. Together with
Poland, Czech Republic and Slovak Republic, Hungary had a relative affluence
and a bad or under developed institutional structure to deal with immigration,
which made the country attractive for refugees and want-to-be-immigrants
(Castles & Miller, 1994; Toth, 1992; Szoke, 1992). In October 1991, the
Hungarian government implemented new visa rules, which lowered the number
of entrants to Hungary with 41 000 within a few days! (Szoke, 1992).

4.2.2. Sweden

The labour immigration until the 1970’s was dominated by Nordic and South
European labour. When the labour immigration declined around 1970, labour
immigration was replaced by refugees and tied-movers, mainly from non-
European and East European countries (Scott, 1999; Bevelander, 2000).

Map 12 shows net migration to Sweden in the year 2000. More than 75 per cent
of the net migration came from European countries, Russia, Turkey and the
Middle East. About 400 net immigrants came from India, 700 from China and
about 1 400 from Africa, which constituted about 10 percent of the net
immigration to Sweden (Rauhut, 2004)

For 2000, about 25 000 temporary work permits (valid for 3 until 48 months)
were issued, together with just less than 450 permanent work permits (Rauhut,
2004). However, only 3 300 of them actually immigrated to Sweden. 6 Relatively
low salaries for well educated and relatively high taxes repel many presumptive
migrants from immigrating to Sweden (Utrikesdepartementet, 2002; Lindh,
2002 and Rauhut 2002, 2004).

5
Central Statistics Office of Hungary
6
Statistics Sweden (2005)

93
 Map 12 : Regional Neighbourhood immigration to Sweden in 2000

4.2.3. France

It must be stated clearly that there is no emigration data for France; France does
not keep a record on the country of destination for persons emigrating. As a
result, it is not possible to calculate the net migration between France and other
countries. Furthermore, the result for France is therefore not fully compatible
with the results for Hungary and Sweden. In 2000 France had a net migration of
40 000 persons.

A very large share of the immigration to France comes from the former French
colonies; in 2000 (Castles & Miller, 1994), approximately 160 000 persons
immigrated to France and just less than 60 000 came from the former French
colonies in Africa. 7 Much attention has been given the East-West migration in
Europe, (Layard et al., 1992) but the migration from the former French colonies in
North Africa is just as interesting. This area has for long served as a French
labour reserve, legal as well as illegal. Since migration flows have a tendency of

7
INED database

94
following former migration flows, this area will most likely continue to send
migrants to France (Castles & Miller, 1994).

Besides the strong immigration from Maghreb and the former French colonies in
Africa, the second biggest migration came from the countries of EU15 (about
43 000) and Asia (about 21 000). About 6 500 persons immigrated from North
America and the same number from South America in 2000 (see map X.3). The
immigration from the New Member Countries in Eastern Europe was very modest
in 2000, only 3 000 persons. Another 2 000 came from Romania, 2 000 from the
former Yugoslavian countries, and 2 000 from Russia. Just less than 6 000
persons emigrated from Turkey.

Map 13 : Gross immigration to France in 2000

95
 4.3 The Immigrants’ Choice of Settlement

In general, immigrants are headed for the major metropolitan areas. In the
United Kingdom 12 percent of the population is located in London during the
period 1996-1000, while the share of immigrants in London was more than 40
per cent; more than 40 per cent of the immigrants to Italy settle down in Rome
and Milan; Paris attract 36 per cent of the French immigrants (Vandermotten et
al., 2004). In the case of Hungary, the immigrants favour Budapest
(Vandermotten et al. 2005; Eurostat, 2005).The three metropolitan areas in
Sweden attract most of the immigrants too (Häll, 1997).

However, compared with map X.4 the settlement patterns of immigrants above
do not fully correlate for France and Sweden. For France, the highest migration
rate is for Languedoc-Roussillon and Alsace, with Paris only on third place.
Languedoc-Roussillon attracts many retired persons from Europe due to its
climate; the same kind of immigration of retired people is found in e.g. Spain and
Portugal (ESPON project 1.1.4, 2005). Strasbourg is located in Alsace, and the
European Parliament is situated in Strasbourg. This is probably the reason why
the international immigration is so high to Alsace.

In Sweden all regions in the country show a strong or very strong international
net migration rate for 2000. One explanation is that the rural areas (Norra
Mellansverige, Mellersta Norrland, and Övre Norrland) are sparsely populated.
Quite modest immigrant flows will therefore indicate a “strong” international net
migration rate, which is a statistical illusion. A second explanation is that asylum-
seekers are placed in camps all over Sweden. When the Asylum-seekers receive
a permission to stay in Sweden they get registered as immigrants in the county
which the camp is situated in. Generally, there are no or few jobs in the rural and
peripheral Sweden for immigrants, so they move to the three metropolitan areas
and to the major cities where job opportunities are better (Häll, 1997,
Hammarstedt, 2003).

8
4.4 Factor Prices and Substitutability: A Simple Model

In economic theory, the demand for labour depends on the total demand in the
economy and on the alternative cost for replacing labour with capital. A labour
shortage occurs when the demand for labour is higher than the supply and when
the alternative cost for substituting labour with capital is too high. According to
standard economic theory, the demand for labour depends on the fluctuations of
short-term business cycles. In a short-term perspective, the opportunity cost for
replacing labour with capital, i.e. investing in new technology, will be too high. If

8
This section is taken from chapter two in Gaspar et al. (2005)

96
the labour shortage continues, or even worsens, over time, the opportunity cost
of not replacing labour with capital will be too high. In a long-term perspective,
labour shortage is not about being short of labour, but about lacking the capacity
to adjust to the structural changes in the economy (Begg et al., 1987,
Wonnacott & Wonnacott, 1986; Elliott, 1991; Fallon & Verry 1988).

A consequence of labour shortage is that the cost for labour will increase, which
is illustrated in figure 1. When the quantity of labour, QL, diminishes, and the
quantity moves from Q1 to Q2, the price for labour, PL, will move from P1 to P2.
As a result, a new equilibrium will be achieved (see figure 1).

Figure 15 : The Relation between the Quantity of Labour and the Price of Labour

PL

P2

P1

QL
Q2 Q1

Labour shortages can be “partial” and “general”. A partial labour shortage occurs
when there is a shortage of labour in a specific profession or sector of the
economy, e.g., farm workers, nurses, bus drivers or construction workers. A
general labour shortage is a result of demographic changes in the population,
i.e., there is a shortage of labour in all professions and sectors of the economy
(Rauhut, 2002).

According to economic theory, it is possible to estimate the effects of changes in

the relative prices of a factor commodity (as shown in figure 1), especially when
it comes to the demand for that specific factor commodity and substitution
effects. Given the assumption that a company is profit-maximising, a shortage of
a factor commodity will result in an increase in its price. As a consequence, this
specific factor commodity will be replaced by another, cheaper, factor
commodity. If it is labour that is in relative shortage, capital will be substituted
for labour. Elliott states that the “substitution effect distinguishes the firm’s

97
reaction to the change in the relative price of capital and labour, holding constant
the scale of production” (Elliott, 1991)

Begg et al. state that “the substitution effect leads the firm to produce a given
output using a technique which economizes on the factor that has become
relatively more expensive. Thus, a rise in the wage rate of labour leads to a
substitution effect towards more capital-intensive production methods at each
output” (Begg et al 1987). According to Wonnacott & Wonnacott, “in a
competitive, fully employed economy, the wage rate increases as productivity
increases. This conveys a clear message to those producers who can no longer
afford the higher wage. The message is: society can no longer afford to have its
scarce labour employed in your activity. There are now too many other, more
productive pursuits. This may seem harsh, but it is the sign of economic
progress” (Wonnacott & Wonnacott, 1986).

There are, in general, five ways to deal with a relative change in the price of
labour (Rauhut, 2003).
i. If the relative factor price for labour increases on a short-term basis, the
increase in cost will be paid by the consumer of the commodity or service.
ii. If the relative factor price of labour increases on a long-term basis, capital
will, if possible, be substituted for labour.
iii. If the relative factor price of labour in labour-intensive production
increases on a long-term basis, organisational or institutional changes will
take place in order to use the labour more efficiently.
iv. If the relative factor price of labour increases on a long-term basis, labour
in-migration can be used, provided that imported labour can replace
domestic labour. This is easily done for some sectors of the economy, but
for others, it is more troublesome to replace domestic labour with
immigrated labour.
v. If the relative factor price of labour increases on a long-term basis, labour-
intensive production will be moved to countries where labour is cheap and
in abundance.

An increase in wages is to be expected when labour is scarce, which leads to an

increasing wage ratio in the production. When the marginal cost of a continued
increase in production is higher than the marginal cost of substituting capital for
labour, institutional, organisational and technological changes will be required in
order to replace the scarce and expensive factor commodity labour in production.
Despite using less labour, production will be kept up due to increased
productivity. This is so not only because firms are profit- maximising, but also
because they are cost minimising (Fallon & Verry, 1988).

98
However, there are no clear-cut results (whether theoretical or empirical) that
show a link between a change in the population structure and its economic
effects. The results are dependant on the assumptions that have been made.
Depending on the institutional and organisational changes that take place at the
time of the population changes, population decline can result in both positive and
negative economic developments (Rosenberg & Birdzell, 1986; Easterlin,
1996; Kelley & Schmidt 1994; Coale & Hoover 1958).

Historically, situations of long-term labour shortage have led to labour being

replaced through technological, institutional and organisational changes. This has
meant that productivity improvements have resulted in increased growth. The
creation of an economic surplus through economic growth is a condition of
welfare (Boserup, 1981; Rosenberg & Birdzell; 1986; Dillard, 1967; Rider,
1995; Cameron, 1997). How threatening or challenging are the unfavourable
future demographic development, causing depopulation and short-term labour
shortage? It is not a question of just getting immigrants to fill up population
gaps; it is a question of getting the right labour with the right competence and
skills as well as getting them to the right geographical areas.

4.5 The Future Immigration Demand

The labour immigration to the industrial sector in Sweden until the 1970’s was
dominated by Nordic and South European labour. In the Fordist production
system in the 1960s, labour could generally be put to work quickly after arriving
in the new country. The immigrant was given a short introduction to the
workplace and was then able to carry out the work in a Fordist production model.
There were no requirements for location specific knowledge – e.g., knowledge of
language and culture – for these labour immigrants in industrial production
during the 1960s. In other words, substitutability between foreign and domestic
labour was high. Unfortunately, there was a negative aspect of the labour
immigration: it counteracted the structural transformation of the Swedish
economy, as stagnating trades and sectors could keep afloat through access to
cheap labour. When the crisis came in the 1970s, the bubble burst and
companies within these trades and sectors went under. The immigrants
remained, and since then, they have had a weak tie to the Swedish labour
market (Lundh & Ohlsson, 1994, 1999). Today, Sweden’s economy is not
based on industrial production, but on services. Within the areas of nursing,
education and care, location-specific knowledge is usually required to carry out
the work; this means that substitutability between foreign and domestic labour is
limited. 9

9
For a more detailed discussion on substitutability, see Rauhut (2002, 2004). For some occupational groups
within nursing, education and care, the production value is so high that it is worthwhile for the employer to

99
A study on replacement migration to Sweden showed that it will be more difficult
than many might think to find labour for female-dominated professions within
the public sector (nursing, education and care) in the rural and peripheral parts
of Sweden; in the metropolitan areas around Stockholm, Gothenburg and Malmö
there is no shortage of labour. Most of the professions require tertiary education.
It is far from obvious that Sweden will succeed in recruiting male labour to the
female professions from countries where gender equality has not come very far
or is non-existent (Rauhut, 2004).

The former French colonies, especially Tunisians, Algerians and Moroccans,

served for long as a labour reserve during the Fordist production era. A large
share of the immigrated labour was employed in the industrial sector in the
1960s, and in particular the automobile sector (Vandermotten et al., 2004;
Castles & Miller, 1994), where substitutability between foreign and domestic
labour was high. However, these immigrants “were relegated to the bottom of
the labour market, often working in highly explorative conditions. Housing was
frequently segregated and very poor in quality – indeed shanty towns (known as
“bidonvilles”) appeared in France in the 1960s” (Castles & Miller, 1994).

The immigrant profile in France looks different in the 1990s: the share of women
is higher, and the level of education is higher, many “white-collar” workers and
high level managers. It’s not only young, low educated single men immigrating
to France anymore; many immigrants are tied-movers who come to be reunited
with the family (Vandermotten et al., 2004). Since such large shares of the
immigrants come from francophone countries and former French colonies, the
immigrants do not suffer from an insufficient location specific knowledge as
immigrants do in Sweden. Contrary to Sweden, substitutability between foreign
and domestic labour in France is still high. However, similar to Sweden,
immigrants chose to settle in the metropolitan areas.

International migration was rare in Hungary during the Communist era.

Immigration was close to zero, and the only emigration that took place occurred
in 1956; after the Soviet Union invaded Hungary to crush the reformist
movement, a large number of political refugees escaped Hungary. After the
collapse of the Communist system in Eastern Europe, Hungary was used as a
transit country for migrants headed for Western Europe. Many ethnical
Hungarians in the neighbour countries have immigrated to Hungary after the
collapse of the Communist system (Castles & Miller, 1994). Most of the post-

send a person recruited from abroad, for example, a doctor, on a six-month intensive course in Swedish and
then six months experience to learn how the Swedish healthcare system works. Within other professional
groups such as staff nurses in old-age care, the production value is too low and it is not worthwhile for the
employer to make the same investment (Rauhut 2004).

100
war emigration and immigration to Hungary has not had economic causes, but
political and socio-cultural causes (Rothschild, 1989; Szoke 1992).

The substitutability between foreign and domestic labour in Sweden is low, the
migration flows to Sweden are small and presumptive immigrants with work
permit in Sweden never enter the country. The greatest demand for labour is in
the rural and peripheral parts of the country, while immigrants in general settle
down in the three metropolitan areas. Unless a future immigration aims at just
filling up a population gap, immigration is not an option for Sweden to solve the
future demographic challenges. Sweden must chose a long-term solution by
favouring technological, institutional and organisational changes and use a very
selective immigration policy to ensure the immigration of specialists.

France has a steady flow of immigrants from its former colonies, and the
substitutability between foreign and domestic labour in France can be assumed
to be high. The share of well-educated has also increased amongst the
immigrants to France. Contrary to Sweden and Hungary in the European
periphery, France is situated within or just outside the “heptagon”, an area
considered to be the heart of Europe and an area attracting immigrants.
However, similar to Sweden, the immigrants are headed for the metropolitan
areas, and not the rural or peripheral areas in France where they are needed the
most. Nevertheless, immigration can be used to deal with the demographic
challenges in France.

Hungary has had no colonies nor established international immigration flows.

When the immigration of ethnical Hungarians ends, the immigration will be even
smaller. As a member of the European Union immigrants headed for the
European Union cannot use Hungary as a transit country anymore. Just as in the
case of Sweden, immigrants are needed in the peripheral parts of the country,
while the immigrants prefer to settle down in the metropolitan area of Budapest.
Furthermore, as the old industrial sector and planned economy is transformed
into a service sector based capitalist economy, the substitutability between
foreign and domestic labour in Hungary is low (except for ethnical Hungarians).
Immigration cannot be a solution to the demographic challenges in Hungary.

10
4.6 Scenarios

Each region in France, Hungary and Sweden will be under the influence of
structural changes at the industry level, which renders changes in the labour
demand for given skills in the short and medium term. Changes in the
composition and production portfolio of sectors will change the demand in the

10
This section is based on Edvardsson et al. (2005)

101
regional labour market for low, medium and high skilled labour and for specific
competences associated with sector specificities. The impetus for these changes
may originate from many sources. One source is the competitive pressure from
“outside”. This competitive pressure may come from changes in policies or may
come from the exhaustion of previously regional strongholds in the production
process in specific sectors. The policy change may relate to national or
international measures. The national measures may relate to the location of
national knowledge resource centres, which may be pivotal for the destiny of
sectors dependent on such resource centres. The international measures relate
to the strong forces towards integration of product markets internationally.
Tradable goods have increasingly reach accessibility to a wider set of geographic
markets through policies of free trade and the adjoin changes in transport
technologies making transportation a minor portion of the total cost of products.
EU enlargement is one such example of the emphasis of extending market access
to increase international trade and thereby increasing the presence of regional
structural change. The competitive pressure may also originate from the
exhaustion of regional resources. The presence of bottlenecks on the labour
market and the possibly associated increases in regional wages will make the
firms located in a region less competitive relative to region with ample resources
at their disposal. 11

Figure 16 : Intersections between regional trends and EU enlargement

Region i
Regional Regional
Attrac- Attrac-
tiveness tiveness

Structural Demographic
transformation Change
(short-term) (long-term)
Demand Supply

OUT-SOURCING Labour migration

(short-term)
Supply
”IN-SOURCING”

International compe-
titive pressure from
low cost countries

11
The extent that such pressures from regional resources in the competitiveness will materialise will to a large
extent depend on the labour market mechanisms present in the regional labour markets, which has at a Nordic
scale previously been analysed by e.g. Persson et al. (2004).

102
Source: This is a slightly revised model originally sketched out by Edvardsson et
al. (2005)

Firm choices will obviously be interconnected with the individual choices in a

region. Individual choices will in the medium and long run change the labour
supply from regional residents. Migration to other regions will change the labour
supply in the medium and short run, but ageing and a low fertility will reduce the
regional labour supply without any out-migration. The demographic changes in
the incumbent population of the region will therefore reduce labour supply of all
skill types in the long-run. Demographic renewal from other regions is one
solution. 12 The present analysis will therefore focus extensively on the possible
demographic renewal that may possibly be obtained from immigration to the
different regions of the Nordic countries. Immigration from the enlarged EU or
countries outside the EU may solve for the problems of skilled labour supply in
the medium and long run and thereby contribute to the solution of the
competitiveness of regional industries. The individual choices of immigration to
the regions in France, Hungary and Sweden may solve for the labour shortages
that may pose problems for sector competitiveness faced under the firm choices
in the same region.

Above all these mechanisms of interaction between regional trends determined

by choices of incumbent firms and individuals and international trends of
competition from low cost countries and immigration from the same countries
will be a rather intangible regional attractiveness. This regional attractiveness will
influence both firm choices and individual choices and thereby endogenously
determined the outcome for regions. This indicates that this factor is to a large
extent endogenous. It may though also capture trends in regional policies in the
different countries and preferences among individuals for certain characteristics
of the region of residence. Shifts in these factors may in dynamic ways influence
the regional attractiveness of different regions with different urban structures
and different degrees of peripheral status. Regional attractiveness may also
depend on the actions taken by regions themselves. Regions may through
different regional policies be able to change their relative position on the national
and international scale of regional attractiveness. This is most clearly seen in
national contexts, where metropolitans compete internationally for investment.
National policies may though also contain elements that promote the regional
attractiveness. Given regions have some autonomy in terms of settling policies
that are adapted to the specificities of the region and are able to finance such
policies either though decentralised tax collection or national subsidies, the

12
This has also been analysed by Persson et al. (2004), as has the medium and short run effects of out-migration
from regions. See also Gaspar et al. (2005) and ESPON project 1.1.4 (2005)

103
regions may furthermore change their attractiveness through means such as
investments in culture, knowledge and infrastructure. The exact outcomes of
regional attractiveness are accordingly diverse depending on the location of
regions and the different policy measures at hand to promote regional
attractiveness.

4.7 Concluding Remarks

The immigration to France, Hungary and Sweden show three quite different
patterns. The immigration to Hungary mainly comes from the neighbour
countries; in the case of Sweden, the sender countries are European or in the
European neighbourhood. The migration flows to France are from all over the
globe.

Sweden has experienced a labour immigration during the 1950’s and 1960’s, but
since then the demand for foreign labour has been low. Contrary to this
immigration has remained high, based on refugees and family reunions. France
has experienced a high immigration for a long time, especially from their former
colonies. Hungary has not faced immigration in a larger scale until the 1990’s –
immigration during the Communist era was rare. Since the 1990’s ethnical
Hungarians are headed for Hungary as well as some refugees.

Compared with the results on demographic trends and depopulation from ESPON
project 1.1.4, the settlement patters of immigrants presented here are not the
optimal settlement patterns to achieve a sustainable population development in
the European regions. To achieve sustainable population development
immigration is needed to the rural and peripheral parts of Europe, but these
areas are rejected by immigrants as they are headed for the metropolitan areas.

The demand for foreign labour will depend on the regional structural change in
the economy. In what extend domestic labour can be substituted with foreign
labour is also of great importance here. The exact outcomes of regional
attractiveness depend on the location of a specific region and on the different
policy measures at hand to promote regional attractiveness. There is no “one-
size-fits-all” solution to this.

104
4.8 References

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Change in Sweden 1970-1995. Almqvist & Wiksell International
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University Press
ƒ CASTLES S., & MILLER M.J., 1994, The Age of Migration. MacMillan
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ƒ RAUHUT D., 2002, Arbetskraftsbrist och arbetskraftsinvandring: hot eller
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 Partie V

ESPON & Neighbouring countries

107
 5. RUSSIA AND EUROPE: THE SCALES AND GEOGRAPHIES OF A COMPLEX
NEIGHBOURHOOD RELATION

Yann Richard
LADYSS

Russia is a very particular neighbour of EU. It is by far the largest one, with a
surface covering roughly 17 million km². And in the political and economic
agenda of the European commission and of the EU members, its importance is
growing up rapidly for several reasons.
The dependency of EU from imported energetic resources such as crude oil and
gas is increasing and is foreseen to grow rapidly in the nearest future. Russia is
the second largest producer of crude oil in the word and possesses the largest
reserves of natural gas. Besides, its territory is so large that it is a transit
territory for energetic imports coming to EU from other countries (Central Asia).
At last, Russia is by far the first supplier of energy resources for a significant
number of EU member states whose dependency on Russia reaches 90 or 100%
in some cases. Over the last decade, the share of Russia and CIS in the energetic
imports of EU has been increasing dramatically.
The political relations between EU and Russia are complex, mainly because of
chaotic relations between this neighbour and the new member states. There is
still no definitive agreement yet between Russia and Latvia and Estonia about
their common border. The agreement had been signed by foreign ministers in
2005, but Russia has finally decided not to ratify it. There are many other
subjects of discontents: political relations of Russia with the Baltic States are bad
since the middle of the 1990s because of the EU and NATO enlargement process;
the relations with Poland are so bad that many diplomats from both countries
have been recently evicted; the status of Russian minorities; the Kalinigrad
issue... One could say the same about Belarus. Its relations with Poland, for
instance, have been bad for a long period of time and they have even worsened
since 2005 because of the treatment of the Polish minority. This is of course not
a complete list. In addition, this part of the external border of EU seems to be
quite closed.

The goals of this study are the followings:

- To analyze the evolution of EU – neighbourhood relations at different scales
since the 1990s and to explain these evolutions. Does this relation evolve the
same way and at the same pace for EU as a whole, for CEE countries, for Latvia
and at last for border regions?
- To understand the place and role of the Baltic States in the frame of relations
between Russia and EU. Are they still a part of the interface between Russia and
Europe or not?

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- To know if there is any relation between this border problem and the most
recent evolutions of Latvia’s and Estonia’s territories.

Several topics are taken into consideration:

- The economic relations: foreign trade at various scales;
- Foreign direct investment flows and stocks;
- The cross border cooperation in the frame of the Interreg III A Priority North
(Estonia-Russia) and Priority South (Latvia-Belarus).

5.1 What is the state of the economic relationship between EU

and Russia, at different scales?

As far as the economic relations (mainly trade and foreign direct investments)
are concerned, one can notice that Russia is getting more and more incorporated
in the European economic region. Nevertheless, on the one hand, this process is
not going along the same way or with the same rhythms at each level. On the
second hand, it varies a lot according to the topic taken into consideration (trade
of goods, services, investments…).

Evolution of economic relations between Russia and EU: Russia is getting more
and more integrated in the European economic region.

Except for the period that followed the Russian economic crisis, the exchanges of
goods between Russia and EU have dramatically increased since the 1990s in
both directions. The increase of oil and gas tariffs is not enough to explain this
increase. The exports from EU to Russia have followed the same evolution. In
addition, the imports of EU from Russia had already increased a lot between
2000 and 2001 before in the oil crisis which caused the increase of oil tariffs.
EU 25 is now the first external trade partner of Russia, which is partly due to the
recent enlargement in 2004. The share of EU 25 now represents more than 50 %
of the total external trade of Russia. Reversely, the share of Russia in the total
external trade of EU 15 has also increased since the end of the 1990s, from 1.9
% to 3 % between 1999 and 2002. As far as UE 25 is concerned, one can draw
the same conclusions, according to the data released by Eurostat. The trade with
Russia has undergone a 51 % jump between 2000 and 2004. The share of Russia
in EU 25 total external trade has gone from 4.5 % up to 6.3 %. These figures
show that Russia is getting more and more involved in a process of economic
regionalisation along with the rest of Europe. Russia is not the only one
concerned by this process. While the share of EU 15 has constantly decreased in
the external trade of EU 15 members since the 1990, the share of other
neighbour countries has constantly grown up showing an enlargement of the
European economic region.

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Figure 17 : Evolution of Russian exports and imports to and from the countries
of the Triad.

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Figure 18 : Evolution of UE 15 exports and imports to and from neighbour
countries.

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 Figure 19 : Evolution of exports and imports (in euros) of EU 25 from 2000 to
2004.

However, this assumption must be qualified.

The process of regional integration is mainly based on exchanges of goods and

raw materials. Besides, it concerns more the EU 15 and EU 25 as a whole than
the new CEE members of EU. The total external trade of CEE countries has
dramatically increased since the 1990s, but the share of Russia in that trade has
fallen down for all of them. The only cases of stability are the Czech Republic and
Slovakia whose exports towards Russia have always remained stable, around 5
% of their total exports. As far as the imports of the CEE are now concerned, the
flows have been staying roughly up to the level since the 1990s until the 2000s.
This is largely due to the importance of Russia as the main supplier of oil and gas
for the best part of Central and Eastern Europe. The reorientation of CEE

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countries exports from the East (former USSR) to the West has given way to the
formation of a border line between former USSR and the central part of the
European continent. The Russian market has become less attractive for the CEE
countries because of the economic crisis. Besides, their economic structure has
significantly changed with a shift from industries towards service activities.
Consequently it no more matches the needs of the Russian economy.

Figure 20 : Evolution of Russia’s share in the external trade of some CEE

countries.

As far as the foreign direct investments are concerned, one must say that Russia
remains a closed economic space. It remains relatively unattractive for foreign
investors and nothing has been made for years to attract them. Flows and stocks
of foreign direct investments have dramatically increased in the world from the
1990s onward, going up to 8 250 billion dollars in 2003 from 693 billion dollars in
1980. The FDI stock has also increased in Russia, but it remains modest, as well
as in the other western CIS countries such as Belarus, Moldova and Ukraine. In
2002, the FDI inward stock in Russia was only 48 USD per inhabitant, but it was
3 554 USD in the Czech Republic and 1 846 USD in Estonia. And in the CIS,
Russia is only rated 10th for the amount of FDI per inhabitant: the CIS average is

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242 USD and it reaches 938 USD in Kazakhstan. The situation has changed a
little in 2004 thanks to the reforms set up by president Putin’s administration,
especially in the fiscal area. The FDI stock in Russia has jumped up to the record
level of 99 billion dollars.

However, nothing indicates that this change is the starting point of a long term
trend.
- Such a phenomenon had already taken place in the beginning of the 1990s but
it brutally ended because of the economic crisis in 1998.
- 99 billion dollars is almost a twofold increase compared to the cumulative stock
in 2003. However it remains modest for a country of 143.5 million inhabitants
with a rapid economic growth (FDI stock in Poland in December 2004 reached
more than 84 billion dollars). FDI flows are somewhat more diversified than
before, going to economic sectors such as retail trade, transports, food industries
and so on. Nevertheless, oil is still playing an important role, attracting a large
part of FDI flows but without a significant number of new jobs created and
without significant transfers of technologies.
- An important part of the direct investment stock officially comes from foreign
countries but is actually composed by Russian capital returning to Russia through
Luxemburg, Cyprus, Virgin Island, UK, Gibraltar...
- At last, even if EU is the first foreign investor in Russia, it concerns a relatively
modest stock. It still represents less than 1 % of the Russian GDP and only 11 %
of the gross fixed capital formation.

Figure 21 :FDI inward flows and inward stocks.

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How are the economic relations between Russia, Estonia and Latvia
going on?

The decrease of trade relations.

Figure 22 : Rhythm of evolution of external trade of Estonia and Latvia.

The evolution of trade relations with Russia is not going on the same way for
Latvia and Estonia. It can be seen on the graphs above dedicated to the
evolution of the exchanges of goods. As far as Estonia is concerned, the external
trade has strongly increased with the new members of EU (candidate countries),
and secondarily with EU 15 and the Baltic region. The external trade with Russia
has also grown up, with a roughly 150 % increase, but this is much less than
with other trade partners. In the case of Latvia, the evolution is a bit different.
This country is getting rapidly integrated in the Baltic region and its external
trade with EU 15 has increased a lot whereas its trade relations with Russia have
decreased.

Consequently, the share of Russia in the external trade of Estonia and Latvia has
fallen down. Russia’s share in Estonian’s export reached 36.5 % in 1997 but fell
down to 12.3 % in 2003. Its share in Latvia’s export has gone from 41 % in

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1997 down to 14 % in 2003. The imports of goods have followed the same
evolution. Russia’s share in the total imports of Estonia has decreased from 35.7
% to 18.4 %, and it has decreased from 33.4 % to 17.8 % in Latvia’s imports.
Although Lithuania is not taken into account in this case study, we can remind
here that the evolution of its external trade towards Russia has followed the
same evolution. Its exports to Russia reached 24 % of the total in 1996 but
10.1% in 2003; the share of Russia in its imports was 29% in 1996 and only
22.1 % in 2003.

The border effect on foreign direct investments.

As far as the foreign direct investments stocks are concerned, one can notice two
main facts:
- The presence of Russian investment stock is weak in both Baltic States as it can
be seen on the second graph concerning Latvia. Russian investments are mainly
oriented towards the countries of the CIS (especially Ukraine and Belarus) and
secondarily towards certain countries belonging to the EU 15.
- In the opposite direction, the outward FDI stock owned by Baltic States abroad
is clearly concentrated in the Baltic region and especially in the other Baltic
States but not to Russia. As it is shown on the graph below, the Estonian
outward FDI stock has been increasing rapidly from 2000 onward but it has
remained very low in Russia. This country is not attractive for Estonian investors,
and investors from other countries in general, because of several burdens:
unclear legislation especially regarding the fiscal domain; insufficient level of
liberalisation and high level of state control in economic sectors such as energy
and transports; inadequate business climate because of unclear administrative
rules…

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 Figure 23 : Foreign direct investments in Estonia and Latvia.

How to explain the decreasing trend in the commercial relations?

The successive Latvian and Estonian governments have never managed to

entertain long term normal political relations with Russia, because of various
problems shortly presented in the introduction of this study. As a matter of fact,
the external economic relations of Russia seem to be partially shaped by political
concerns. Consequently, the political tensions with Estonia and Latvia, which
have been prevailing over the best part of the post soviet period (from 1992
onward), partly explain the decreasing trends of economic relations between
Russia and that part of its “near abroad”.

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Estonia and Latvia have been directly affected by various Russian trade
discriminatory measures since the middle of the 1990s. Among these measures
was the so-called double tariffs system which prevented these two countries
from the status of the “Most Favored Nation”. This situation has seriously
affected imports of Estonian and Latvian goods, such as foodstuffs, which
suddenly became uncompetitive on the Russian market because of a twofold
increase of duties supported by exported products. It has come to an end with
the recent extension of the Partnership and Cooperation Agreement signed by EU
and Russia. Before this extension, many companies in the Baltic countries had
already successfully reoriented their exports to the West. Nevertheless, other
companies, especially those located in the North Eastern part of Estonia, have
not been able to do so. Some have disappeared. Some have been standing idle
because of the loss of their Russian market. The double tariff system was
accompanied by various non tariffs measures against Estonia and Latvia certain
of which are still into force:

- Double toll control for goods on both sides of the border.

- Import ban imposed by Russia on goods requiring an Estonian phytocertificate

from August 2004 to May 2005...

- Decision made by Moscow to raise the tariffs of railroad shipment towards

Estonia, whereas the tariffs of freight transport to Russian ports remained lower
for a large range of goods. This decision has automatically increased the
competitiveness of Russian ports such as Saint-Petersburg, Ust-Luga, etc…

The shift of Baltic States’ economic structure since the outbreak of USSR also
played a role in the decreasing trend of trade relations with Russia. During the
Soviet period, in the frame of the planned economy, Baltic States had been
specialized on the productions of goods needed mainly by Russia. That is why
they became, among other specializations, a food and agricultural base oriented
to the Russian “market”. Since then, the situation has changed. The dominating
items of exports of the Baltic States have now little connection with the needs of
Russian economy. In Estonia’s and Latvia’s exports, not any commodity creates
10 % or more of total exports in each commodity chapter. Lithuania is an
exception because its economic structure much better matches the needs of
Russian market (vehicles, transport equipment, machinery and equipment…).

The evolution of transit trade flows through Estonia and Latvia.

Since the beginning of the 18th century and the victory of Russia upon Sweden,
the Baltic shore is a strategic interface between Russia and Europe. The Baltic
ports (Tallinn, Riga, Klaipeda, Ventspils, Liepaja, Butinge…) have always been
major outlets for Russian exported goods and gateways for Russian imports.

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Since the outbreak of USSR, the situation has changed. The political relations
between Russia and its Baltic neighbours are quite bad, particularly because of
the border issue which has not come to any definitive solution yet. And Russia,
whose economy is more than ever based on the extraction and exports of raw
materials, tries to diversify the corridors for its exports of oil and gas. That is
why Russia has made major investments in the north western part of its territory
where several new infrastructures have recently been built, especially the port of
Primorsk. The recent signature of an agreement with Germany for the
construction of a submarine gas line in the Baltic Sea is quite in line with this
strategy. What is the actual situation of Estonia and Latvia in this particular
political context?

The evolution is not the same in Estonia, in Latvia and even in Lithuania. To sum
up what follows, one can say that Latvia may suffer from a border effect with
Russia and Belarus, whereas the role of Lithuania as a major transit place for
Russia and Belarus is more and more obvious. Estonia may be progressively
confirmed as a transit place for Russia in the future (as it is shown by recent
Russian investments made in port facilities in Sillamae and Tallinn), although its
political relations with Russia could be much better, but it still suffers from
political decisions made by Russia.

As it appears on the graph above, the situation of Latvia as a gateway to Russia

and Belarus is more and more fragile. For instance, the flows of oil transiting
from Russia or Belarus to the rest of the world by pipeline have undergone brutal
changes several times in the 1992. They have undergone a rapid decrease after
2001 because of the decision made by Russia to send its crude oil directly to the
Russian ports of the Baltic shore. In a way, Latvia’s territory and mainly the port
of Ventspils have been short-circuited by this decision. This decision is also partly
due to the bad relations between Russia and Latvia on several issues: the
accession to NATO and EU, the would-be bad status of the Russian minority in
Latvia, a major disagreement about the border between countries... As a
consequence, Russia decided to stop the flow of crude oil going to Latvia. This
caused a rapid decrease of the cargo traffic in the port of Ventspils (roughly one
third) which is specialized in the transit of crude oil. Latvian government has
tried to replace the transit of crude oil by pipeline with the transit of oil products
by railway. But it has not compensated the loss of the Russian crude oil flows.
Generally speaking, Latvia is less and less playing the role of an interface
between Russia, Belarus and the rest of the world. It is particularly obvious in
the case of Belarus. This country has imported almost nothing through the
Latvian territory since the second part of the 1990s. Meanwhile, in Estonia,
Latvia and Lithuania, the cargo transit traffic from and to the other Baltic States
have regularly increased since 1999. It has even been stabilized at a very high
level for Lithuania since 2000.

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Figure 24 : Evolution of transit traffic in Estonia and Latvia.

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The situation of Estonia is different. Its territory is used as a transit place mainly
by Latvia, Finland and Sweden. The traffic coming from and going to Russia is
relatively low and has even decreased during the 1990s. But, meanwhile, the
transit of oil products by train has increased since the beginning of the outbreak
of the USSR. It seems that the geographical situation of Estonia is a great
subject of interest for Russian business. The Russian political power has bad
relations with Estonia for the same reasons as with Latvia. But the growth of
investment flows coming directly or indirectly from Russia in the sector of
transports shows that the relations of Estonia with the Russian business are
much better. Recently, the first part of the new part of the port of Sillamae,
located near the border with Russia, has been opened to traffic. This
infrastructure will be able to handle 10 million tons of goods a year. It has been
financed by Estonian and Russian investors (50 % / 50 %), who are attracted
here for several reasons: the location of the port; its free zone status; its
connection to the Saint-Petersburg-Tallinn highway with new roads. Numbers of
investments have been made by Russian investors in other ports of Estonia
(Muuga, Tallinn). And, as it can be seen on the graph, the increase of the traffic
of Tallinn’s port is in majority due to the increase of transit outbound traffic. That
shows that Estonia is becoming anew a transit place for Russia and for other
neighbour countries. According to transport specialists, is due to the following
factors: the geographical proximity of Saint-Petersburg, which is richer and more
industrialized than the Russian average, the good quality of transport
infrastructures and mainly of railways, the high quality of services in the ports,
the insufficiency of Russian port infrastructures in this region. Estonia is more
likely than Latvia to take profit from these factors because of its proximity with
Saint-Petersburg.

Contrary to Latvia, the role of the Lithuanian territory as a transit place has
dramatically increased both for Russia and Belarus. For Russia, it is due to the
geographical situation of Kaliningrad and the necessity to keep as much as
possible connected with this oblast separated from the rest of the Federation.
Besides, Lithuania has become one of the major outlets for Belarussian exports
of goods, together with Kaliningrad, because of its geographical proximity.

As a conclusion, one can say that the role of Baltic States as transit places for
exports and imports of Russia and Belarus has changed a lot since the outbreak
of the USSR. While the transit traffic from and to other Baltic countries and other
EU members has increased, the transit from and to CIS countries has decreased,
except for Lithuania. For instance, Latvia is much more used as a transit place by
Lithuania and Estonia than by Russia. There is a risk for Latvia to be
marginalized. Besides, there is a growing competition between Baltic countries to
attract transit traffics from and to former USSR. This traffic is economically very

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important for the transport sector represents around 7.5 and 9 % of the GDP in
each Baltic country (in Latvia, transit transports represent around 10 % of the
GDP according to various sources). In this context, the decision of Russia to stop
its exports of crude oil through the Latvian territory can have serious
consequences.

5.2 A strong barrier effect at the local level: the cooperation for
the implementation of cross border projects is under developed.

Russia is involved together with Latvia and Estonia in transnational cooperation

(Interreg III B) and in cross border cooperation programmes (Interreg III A
Priority North and Priority South). For the period going from 2004 to 2006, 7.8
millions euros of Tacis funds have been allocated to the Russian and Belarusian
Partners involved in the Interreg III programme. From this allocation, in the
framework of Tacis 2004 Action Programmes, 1 million EUR has been made
available to the Belarusian partner's participation in the South Priority projects
and another 1 million EUR to Russian partner's participation in North Priority
projects. The total amount of ERDF funding is 7.8 million euro s for Priority North
and 10.4 million for Priority South. 13

Russia and Belarus were not concerned by the first call for proposals but they
participated to the following calls. The 2nd call for proposal for the Priority North
took place between February 28 and April 18, 2005. In 9 of the received
projects, 35 partners were from Latvia, 21 partners from Estonia and 5 partners
from Russia. After the 2nd call for proposals, five projects were approved in the
INTERREG IIIA North Priority (involving Russia and Estonia), by the Steering
Committee (SC). Russia is involved in none of these projects which concern only
Estonia and Latvia. That shows the lack of commitment of Russia in cross border
cooperation with its neighbours until 2005. Nine projects were approved in the
INTERREG IIIA South Priority, in June 2005 by the Steering Committee (SC).
Belarus is involved in four proposals:
- Development of cycling net in the Baltic Country of Lakes (development and
marketing of 45 bicycle routes);
- Developing cooperation among bordering Latvian, Lithuanian and Belarusian
local administrations with an aim to define potential spheres of economic

13
All the paragraphs dedicated to the issue of cross border cooperation are partially based on meetings in Riga
and Tallinn with various experts, mainly on long discussions with the members of the joint secretariat in Riga
(especially with Ieva Kalniņa, head of Riga Office, whom I want to thank for her patience and her competency),
and with members of the Estonian government (mainly Kadri Jushkin and Jaak Mandi, whose work is oriented
towards the issue of the regional development in the Ministry of the Interior). Special thanks to Kadri Jushkin
whose role is central to this part of the report and who accepted to provide us with precious informations, and
explanations, about the mechanisms and current developments of the crossborder cooperation with Russia.

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development and define diversification possibilities for each of the involved cities
in the region;
- Conservation and sustainable management of biodiversity in Lake Druksiai
which is a transboundary wetland complex of international importance
(safeguard the biodiversity in the Lake Druksiai situated on Lithuanian-
Belarusian border);
- Improvement of financial management of import / export procedures in order
to improve the financial management related to import / export procedures of
small and medium sized enterprises located in border territories of Latvia,
Lithuania and Belarus.

The 3rd Call for Proposals for INTERREG IIIA Priority North, supporting cross-
border cooperation between Estonia, Latvia and Russia, was launched on 5
September 2005. The steering committee met in January 2006 in order to
discuss the submitted projects. Among 48 projects proposed for the Priority
North, 16 were approved among which 9 with Russian partners. In the frame of
Priority South, 36 applications were received by the steering committee and 15
were approved but only one with a Belarusian partner which is less than in the
second call.

The fourth call for proposals was launched on 27th February 2006 and closed on
2nd May 2006 for the Priorities North and South. Priority North is supported by
2.2 million euros for ERDF funding and roughly 3 million euros for Tacis action
programme. As for the Priority South, the budget is 2.7 million euros from the
ERDF funds and 0.8 euros from Tacis action programme. The fourth call shows a
higher level of commitment of partner countries. One of the projects submitted
has a Russian Lead Partner and 53 Russian partners are involved in various
projects among the 31 submitted to the steering committee. As for the Priority
South, 50 project applications were received. One had a Belarusian lead partner.
And 36 Belarusian are involved in other projects.

The Russian administration has long been reluctant to get firmly involved in cross
boeder cooperation with Estonia. As an example, one can remind that the Federal
Government signed the Tacis Financial Agreement Memorandum of the year
2004 only in June 2005. Consequently, the programmes of cross border
cooperation implemented with Baltic States, which would support cross-border
cooperation with Russia, worked only partially. That means that up to now,
Russian partners were obliged to participate in the projects on their own financial
resources. That seriously hampered the progress of cross border cooperation
projects with Estonia. Thanks to the signature of the Financial Agreement in
June, Tacis CBC funds could finally be transferred to INTERREG (now
"Neighbourhood") programmes on the EU external border. That enabled the
implementation of "genuine" joint projects with Russia. This is why Russia was

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able to take part to the third call for proposal under Priority North. Russia has not
signed the memoranda for 2005 and 2006 yet. And if they finally happen to do
so, it will be too late to work in close connection with the Estonian side because
most of the Interreg programmes currently going on are committing their own
fund at the moment and no ERDF fund will be left soon. By the way, the relations
between the two states are pretty bad: in a recent seminar dedicated to cross
border cooperation, organised by Putin’s administration representatives, Russia
refused to deliver a visa to Estonian Minister of Foreign Affairs. The next
memorandum (2005) does not include only cross border cooperation. It also
includes Tacis national funds. If the memorandum is signed, Russia will be able
to use these funds, but it seems that those dedicated to Tacis-CBC will not a
priority to the Russia administration. As far as Belarus is concerned, the
Lukashenko’s administration signed the Tacis financial agreement in December
2004. That means that the level of cooperation of this country has also remained
very low up to 2005. But Belarus has been able to participate to the second call
for proposals under the Priority South with real Tacis CBC funds.

The principle failure of the crossborder cooperation is here. The preparation of

Neighbourhood programmes went along very well in 2003-2004, in close co-
operation with Russian regional administrations, and the programmes were ready
to be launched in autumn 2004. But the signature from Russia was very long to
come. So the Member States have actively used the ERDF part of the budgets to
finance their parts of the projects. Meanwhile, the Russian partners generally
wait their own financing for a long time. Perhaps the Tacis CBC money will be
available too late, Russia only starting using Tacis when the Member States have
already used most or all of the ERDF funds. One can say that there is no
cooperation anyway, although the preconditions were very good. Somehow, the
Russian Federal Government has apparently been hindering all the hard work the
regional administrations did to elaborate these programmes.

Russia and Belarus have participated to the autumn calls for proposals (3rd call)
in the frame of the cooperation programme BSR IIIB, North IIIA and North IIIB.
That maybe means that they have decided to get more involved in the
conception of joint projects with their neighbours. But this apparent return of
interest from Russian and Belarusian partners does not necessarily mean that
Russian and Belarusian central authorities will fully support the implementation
of future approved projects. In addition, since last couple of months, and
gradually more, Russia and the Baltic States started to prepare in common for
the next programme period (2007-2013). For a while, almost weekly,
negotiations were going on with the European Commission over the draft
Regulations for 2007. The regulations were hoped to be ready by autumn, in
order to start the writing of new programmes. During this period, co-operation

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with Russia will be financed under the ENPI (European Neighbourhood and
Partnership Instrument) regulation.

But Estonia, as many other member States, is not at all satisfied with the
Commission proposals. There are several crucial points in which Estonian
authorities do not agree. They will be extensively presented and discussed in the
final draft version. But the main problem for most member States is that they
should, according to the Commission’s plans, take the full responsibility for all
the programme funds, including funds spent in Russia. At the same time,
Estonian and Latvian administrations know already now that they are not willing
to take this responsibility, because Russia would never let e.g. Estonian auditors
to come to Russia to check the spending of funds. On the other hand, they are
not willing to trust Russian auditors as well, if they are bearing the responsibility.
They want Russia itself to be responsible for all the wrongdoings, i.e. they have
absolutely no intention to pay any funds back to the Commission from Estonian
national budget just because Russian partners would have committed an
irregularities or management mistakes. This is a very problematic subject and
the initial optimism that cooperation with Russia would be much easier since
2007 has now vanished. If there is any cooperation at all, it would most probably
be at least the same difficult.

The low quality of the cross border cooperation with Belarus and Russia is also
due to other causes:
- A political problem: Russia has bad relations with Estonia and the profound
disagreement about the border between the two countries hampers the
possibility of cross border cooperation. Such a border disagreement has also
been worsening the relations of Russian with Latvia for years.
- Russia and Belarus are very centralized States: that means that it is quite
difficult for regional authorities to get fully involved in the negotiation and the
implementation of joint projects. They have no real autonomy to get in touch
directly with local authorities of other countries (Pskov, Leningrad, Vitebsk and
Grodno regions). They do not have financial resources either and they are fully
dependent from the central authorities from this point of view.
- There is a serious lack of administrative competency on both sides of the
border for the conception of joint projects and for the application after calls for
proposals. Maybe Leningrad oblast is more likely to develop these competencies
thanks to its large population. But it will be more difficult in less populated
districts such as the Eastern part of Latvia (Latgale), the Eastern part Estonia,
Pskov and Vitebsk regions.
- It is not that easy to carry out cross border cooperation projects along the
external border of EU because the majority of the areas concerned are also
relatively poor. That was a crucial point during the first call for proposals as
Russian and Belarusian oblasts were obliged to get in CBC projects only on their

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own funds. And the problem was the same in the second call for Russian oblasts,
deprived form Tacis CBC funds. For example, Pskov region (graph n°9) is one of
the poorest of the North Western part of Russia, whose wealth is slightly inferior
to that of the Federation (thanks to a few regions which possess oil resources).
In addition, the north-western region of the Federation has lost a significant part
of its population. One could say the same for the region of Vitebsk, which is the
poorest in Belarus. This relatively under developed context hampers cross border
cooperation projects for two main reasons: the lack of local financing possibilities
and the lack of cooperation opportunities because of bad social and economic
context presenting very few incentives for the conception of joint programmes of
development. These regions are not attractive. Besides, the border regions of
Russia, Belarus, Latvia and Estonia are not complementary on the economical
point of view. Their economic structures are almost the same. Such a situation
grounds more the conditions for competition than for cooperation.

Figure 25 : Annual income in North Western Russia in 2004, Evolution of gross

product per inhabitant and Evolution of the population.

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- Such problems also exist on the Estonian and Latvian side of the border. The
cross border cooperation is there hampered by a bad social and economic
background characterized by the following features: low GDP and GDP per
inhabitant which means a lack of local financing capacities; a regular and rapid
decrease of the number of inhabitants since the 1990s, which causes a lack of
local administrative capacities; a low personal real income, etc.

Map 14 : Gross Domestic Product of Latvian Districts in 2004

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Map 15 : Variation of Gross Domestic Product of Latvian Districts between 1996
and 2004).

As cross border cooperation with Belarus and Russia has been working only for
roughly one year, it is hardy possible to draw the balance sheet of the
implemented projects. According to the joint secretariat of Riga, the first
evaluations will be available next spring. It will be then possible to see how
things are going on.

5.1.1. DOES THE FRONTIER WITH RUSSIA HAVE A TERRITORIAL IMPACT ON

LATVIA AND ESTONIA?

128
It is tempting to say that there is a direct relation between what has been
presented above as a border effect and the relative backwardness of the Eastern
regions of Estonia and Latvia. Especially in Estonia where the geographical
pattern of development is now the opposite to what it was during the Soviet
period. The region of Narva, for instance, located in North-Eastern Estonia, was
much more developed than today. Indeed, in both countries, almost all the social
and economic indicators are beneath the national averages in the eastern regions
and the gap between most and less developed regions is still widening. The
regional GDP, regional GDP / inhabitant and the real personal income are
generally low and the unemployment rate is higher than the national average.
Maps will be displayed in the final version of this case study.

An accurate analysis of the cause of such regional disparities shows that the
relation between the border and the local low level of development is not that
obvious. Two short examples will be enough to highlight this idea. The district of
Tartu is located in South-East Estonia along the border with Russia, near the lake
Peipsi. This geographical situation could be considered as a burden, hampering
every possible development. But one can empirically notice that it is not the
case. In this county, the unemployment rate is much lower than the average

129
Figure 26 : Evolution of regional economic indicators.

130
 Map 16 : Unemployment Rate of Estonia’s counties in 2004

Map 17 : Variation of unemployment rate of Estonia’s counties from 1997 to

2004

Besides, many other regions in Estonia and Latvia show a low level of
development but they are not located in the eastern part of these countries. It is
particularly obvious in Latvia where one can notice a decreasing trend in
development indicators as one moves away in every direction from Riga.
Nevertheless, these examples are not sufficient to prove that there is not any
relation between the low level of development of these districts and their eastern
location near the border. The border location is not enough to explain local social
and economic evolutions but it certainly plays a role in these evolutions.

131
Map 18 : Gross Domestic Product of Latvian Districts from 2000 to 2004 (annual
average)

Before their accession to EU, Estonia and Latvia had already started to
implement radical reforms of their economic structure, wiping away the soviet
legacy rather rapidly. This process was extremely rapid in Estonia and began a
bit later in Latvia. In the mean time, partly thanks to Association agreements
signed with EU in the 1990s, Latvia and Estonia opened themselves to the West,
attracting many foreign investments from EU and mainly from the countries
surrounding the Baltic Sea. Both countries fastened onto Western Europe
through their capital regions, that is Riga and Tallinn which are located in the
western part of these territories. This « capital effect » is due to the higher
attractiveness and accessibility of national metropolises. Capital regions, not only
in the Baltic States but also in most of the post socialist CE countries, have been
more able to attract investments thanks to various causes: numerous and well
trained labour force, more diversified economic structure, higher quality and
more numerous infrastructures, better accessibility, large demographical size
providing labour force and consumers… Tallinn and Riga became rapidly parts of
the European economic space. They integrated themselves in the Baltic urban
network, establishing intense relations with Helsinki, Stockholm and other
European metropolises. As it is shown on the maps n° 6, Tallinn realizes the
major part of Estonian external trade and realizes the major part of Estonian
GDP. This shows how much the prosperity and economic activity is concentrated
far from the eastern border.

Map 19 : External Trade of Estonia’s Counties in 1993

132
 Map 20 : Gross Domestic Product of Estonia’s Regions in 2003

But until now, the rest of Latvian and Estonian territories have not really taken
benefit from this “capital region effect”. Consequently, one can wonder about the
role of Riga and Tallinn. Are they interfaces between their respective territories
and the rest of the World? Are they « continental islands » taking benefit form
their high insertion in the European urban archipelago but sailing away from the
rest of their national background? In fact, according to Latvian and Estonian
geographers, and officials of the Regional Development Department of the
Ministry of the Interior in Tallinn, the low level of development of the eastern
regions is partly due to a distance effect. Their backwardness is partly due to the
distance between them and the capital regions. That explains why the western

133
part of Latvia, far from the Russian and Belarusian border but also far from the
capital, is under developed.

Other factors have played a role in the regional disparities of development level,
among which the choices made by national governments in the domain of
regional development. For instance, from the beginning of the 1990s onward,
Estonia has been ruled by liberal governments whose main subject of concern
was the implementation, very successful, of a liberalisation programme based on
quick structural reforms and attraction of foreign direct investments. Meanwhile,
regional disparities have not really been attended to because that was not a
priority. The interest for the regional issue emerged in Estonia only in the end of
the 1990s, that is to say after 1997. Estonian authorities tried to handle this
problem in creating in each region appropriate conditions and climate for
business development. This political choice has not been really effective because
efficient tools for regional development such as transport infrastructures (mainly
railways) had been privatized, hampering the leverage power of governmental
decision in this domain. Consequently, the gap between regional levels of
development is still widening.

Nevertheless, the border plays a role in the internal geography of Estonia and
Latvia in some cases.

In Estonia, the region of Narva is very much dependent from Russia. It is located
on a major transport axis linking Russia to Estonia and Leningrad region to
Tallinn. Besides, the local industries strongly depend from goods imported form
Russia and from Russia as an export market. Consequently, local business needs
an open border as much as possible. But the statistics displayed by the State
office of statistics in Estonia show that Narva region is a secondary actor in
Estonia’s foreign trade, as well as other Eastern districts (Jögeva Pölva), far
behind the capital region (Harju county and Tallinn city) and behind Pärnu and
Tartu counties.

134
 Map 21 : Roads and Railroads in Baltic States

During the soviet period, this region underwent an industrialization process as a

part of the whole soviet economic system based on strong interrelations between
Soviet republics and regions. Soviet authorities developed there industrial
specializations which were mainly related to the needs of Russian and Soviet
economies. The manufacturing companies of Narva region have not been able to
set out efficient restructurations. The local economic structure, inherited from the
Soviet large scale industry, is roughly the same as in the beginning of the 1990s,
presenting a high share of manufacturing activities and a very low share for
service activities in the regional GDP. In addition, the image of this region is bad
for many investors (Tallinn attracts more than 81 % of the FDI inward stock in
Estonia) because a various factors: bad environmental quality, high
unemployment rate, problems related to the presence of the Russian minority,
backwardness of local industries, lack of local capital, insufficiently skilled labour
force… The proximity of Saint-Petersburg, whose development level is rather

135
high compared to the Russian average, could be an advantage: presence of
financial capital and high level service activities, large customer market…
Besides, Narva could take benefit form its situation between Saint-Petersburg
and Tallinn, as a transit territory.

The border between Estonia and Russia still strongly hampers the growth of
trade relations of Narva region because of non tariffs barriers, which were
presented above, and also because of bottlenecks at the crossing points along
the border. The bridge between Narva and Ivangorod is too small. In addition,
trucks which go to Russia have to cross the city of Narva whose infrastructures
are not sufficient to handle this daily massive influx. The Estonian national
authorities have sent an official letter to the Russian central administration in
order to propose the common financing of a second bridge over the river Narva
which separates to two countries. They have not received any answer yet. In the
same time, Finland and Russian governments have announced that they will
venture to modernize the rails links between saint-Petersburg and Helsinki. The
journey between the two cities will be cut from five hours and a half to three.
The involved rail companies will not only modernize the rail infrastructures. They
have also decided to speed up the border crossing procedures. It seems that the
external relations with Russia are developing more rapidly than with the Baltic
States in the transport issue. Meanwhile, there is still a strong barrier effect
between Estonia and the nearest Russian region due to frequent traffic jams on
both sides of the border.

Figures given by various sources show that Estonia is not among the main trade
partners of Northwest Russia for the exports of goods. And it rates only ninth for
the imports. The modernization of transport infrastructures would enhance these
exchanges. Such a modernization is necessary not only for Estonia but also for
Russian companies because the Russian ports located on the Baltic shore
between Finnish and Estonian border are not sufficient to handle the increase of
Russia’s exports and imports. Recent investments in the Estonian port of
Sillamae, located in Estonia 25 km from the border, shows that Estonia could
take profit from this situation.

5.3 Policy orientations

To have comprehensive view of the policy recommendations related to the Key

Question Neighbourhood, it is necessary to refer to the Volume I. Here are
presented only the recommendations directly connected to this case study.
- To continue the dialog with Russian authorities, at the highest level, in order to
conceive genuinely joint projects in the transport issues. The ports located on the
350 km long coast line around Saint-Petersburg are not enough to handle
Russian imports and exports. For instance, the port of Ust-Luga is burdened by

136
natural shortcomings, its sailing channel being not deep enough to handle large
ships. Russia needs Baltic ports (especially Sillamae and Muuga in Estonia). But
the bad quality of politic relations of Russia with its nearest western abroad has
negative effects. It hampers the development of high quality crossing point of
the border, whereas it would be necessary to modernize bottlenecks such as
Narva and Koidula. Several months ago, Estonian authorities have sent to the
Russian government an official proposition about the modernization of Narva-
Ivangorod crossing point and about the construction of a new bridge. They have
received absolutely no answer yet but the cargo volumes at the Ivangorod-Narva
border checkpoint have jumped 33 percent just in the first five months of this
year, according to local newspapers. And the traffic is expected increasing since
Estonia has opened the port of Sillamae.
- To negotiate with Russia in order to convince the government to lift non tariff
barriers which still hamper the growth of external trade in that part of the
neighbourhood. This would have a positive effect on regions whose economy is
still much oriented towards the Russian market.
- To maintain the effort towards the conception and implementation of real joint
projects with Russia and Belarus. This effort may convince the central Russian
authorities to move to a higher level of decentralisation. This is the only way to
make the projects bases on Interreg III A initiative going on. Without any real
autonomy, local governments of Pskov, Leningrad, Vitebsk, Grodno and Minsk
are not able to cooperate directly with their Baltic counterparts.
- To make an effort for the training of local authorities on both sides of the
border. Local governments usually suffer from a lack of administrative capability
for the conception, implementation and financing of joint cross border projects.
- To determine very clearly the rules of the game about cross border
cooperation. Baltic States authorities sometimes do not receive enough support
from the European commission in this domain. That is to say that they feel
somewhat isolated in front of Russia when they negotiate cross border projects.
It is necessary to define more clearly each part’s task. Baltic authorities want to
negotiate only the contents of the projects with Russia and Russian regions. All
the rest must be left to European Commission. For instance, according to the
future legal framework for cross border cooperation for the period 2007-2013,
Estonian authorities will have to handle auditing, irregularities and even recovery
of funds in case of wrongdoings on Russian side. According to the recently
published regulations, if Estonia really happens to become the Managing / Paying
authority, Estonian government will be obliged to perform control on the financial
activities of Estonian and also on Russian partners. Estonia does not agree with
that type of procedure and Russia is not likely to let any Estonian official come to
Pskov or Leningrad oblasts in order to make financial controls. European
Commission should first negotiate the distribution of responsibilities between all
potential partners and then let them negotiate only the content of cross border
projects.

137
- To define more accurately the status and the amount of funds dedicated to
cross border cooperation dedicated inside the future European and
neighbourhood Partnership Instrument. Nothing clear has been said about this
issue until now.

138
REFERENCES

ƒ « Espace baltique. Isthme russo-européen ? (L’) », Courrier des pays de

l'Est, n°1048, March April 2005, Paris, La Documentation française.
ƒ Estonia, Economist Intelligence Unit, Country Report, Country Profile, IMF,
2004.
ƒ Estonian Railways Ltd., Annual Report 2003.
ƒ Estonian Statistics, Statistical Office of Estonia, monthly volumes, 2003 &
2004.
ƒ Integration of Latvia’s Economy into the European Union, University of
Latvia, Human and Social Sciences, 2, 41, 2004, Riga.
ƒ “Estonie : y a-t-il un pilote dans l’avion”, Courrier des Pays de l’Est, august
2005, n° 1050, pp 68-82.
ƒ Fédération de Russie, Progrès et enjeux de la Réforme, Examens de
l’OCDE des politiques de l’investissement, Paris, OCDE, 2004.
ƒ Fédération de Russie. Quel environnement pour l’investissement ? Lois,
politiques et institutions, Paris, OCDE, 2002.
ƒ Lautso K., Venäläinen P., Lehto H., 2005, Transport connections between
EU and Russia. Current status and outlook for the future, Ministry of
Transport and Communications of Finland.
ƒ “Lettonie : que personne ne décide pour nous”, Courrier des Pays de l’Est,
juillet – août 2005, n° 1050, pp 101-115.
ƒ Monthly Bulletin of Latvian Statistics, Central Statistical Bureau of Latvia,
2003-2004.
ƒ Ojala L., Naula T., Hoffmann T., 2005, On a Fast Track to Economic
Development, Trade and
ƒ Transport Facilitation Audit of the Baltic States, World Bank.
ƒ Purju A., 2004, Foreign trade between the Baltic States and Russia: rends,
institutional settings and impact of the EU enlargement, Turku School of
Economics and Business Administration, Pan European Institute.
ƒ Republic of Estonia, Economist Intelligence Unit, Country Report, Country
Profile, IMF, 2004.
ƒ Transport Connections between EU and Russia, Current Status and
Outlook to the Future, Ministry of Transport and Communications, Helsinki,
2005.
ƒ Transport Side, Estonian Statistical Office, annual publication, 2000, 2001,
2002, 2003 & 2004.

139
 6. HUNGARY – THE NEW BORDER OF THE EUROPEAN UNION

Györgyi Barta,
László Dancs
Imre Nagy
Alexandra Szigeti
Péter Strömpl
CRS HAS:

6.1 Introduction

Hungary has common borders relations with seven countries: Austria, Slovakia
and Slovenia are EU members while Slovakia, Slovenia and Romania joined
NATO. Romania stands good chances of becoming an EU member in 2007. It is
generally assumed that borders should not divide but unite, however Hungary
shapes up its present neighbourhood policies in accordance with the realities of a
still divided Europe. Different circumstances obtain at the regional level across
soft or hard borders (depending on whether the neighbouring country belongs to
the EU and/or NATO or not).

The aim of this research is to examine the development of relationships between

Hungary and two neighbouring countries (Romania and Serbia-Montenegro) after
the fall of the communist regime (Figure 1).

Map 22 : Studied countries

140
After 1989, Hungary’s two neighbours evolved in completely different directions.
Impacting on these countries neighbourhood policies are elements such as: the
international relations and perceptions, economic growth, the pace of progress
made during the transition, inner social tensions, political, social, economic
conditions, etc. Nevertheless, a number of similarities are to be found across the
border regions of the three countries. First of all, large Hungarian minorities live
in the areas close to the borders. Moreover, economic differences across the
borders are less dramatic. These regions in particular as well as countries in
general are characterized by a history of multicultural coexistence. The political
system change had special relevance to the borderlands, as isolation could be
brought to an end, borders became transparent and hence they could develop
new connections with the rest of Europe.

Hungary’s early EU accession created a novel situation. Once again, borders

serve to separate Hungary from neighbouring non-EU countries, only temporarily
in the case of Romania, but for a longer time in the case of Serbia-Montenegro.

Bilateral relations between Hungary and Romania form the cornerstone of the
stability in Eastern Europe. The relationship between the two countries suffers
from a painful past, mainly due to the partly unresolved situation of the
Hungarian minority. After 1989 this became a key issue in Hungarian foreign
policy and a highly divisive, politicized and manipulated topic in Hungarian
domestic politics. Right wing parties prefer to portray themselves, rightly or
wrongly, as champions of the cause of Hungarian minorities (e.g. grievance for
cultural autonomy for Hungarian minority in Romania, the so-called Status law,
double citizenship, etc.). On the other hand, the parties constituting the actual
liberal-socialist governing coalition tend to put the emphasis on the improvement
of bilateral relations and the support of Romania’s accession to the EU, thus
hoping that the situation of minorities would improve as a consequence of it. This
policy line was given special emphasis at the meeting of the governments of the
two countries, in October 2005 in Bucharest. Some voices went as far as to
compare the importance of this joint session to the beginning of French-German
reconciliation after World War II.

Relations between Serbia-Montenegro and Hungary were not deeply influenced

by minority conflicts (at least not after World War II). However, the Yugoslav war
put an end to what had been a more or less peaceful relationship. Tensions have
been sparked off in the beginning by the influx of Yugoslav (as well as Hungarian
minority) refugees and later by drastic altering in the social and economic
situation in Voivodina (where Hungarians primarily live). This has been mainly
due to the massive Serbian immigration. As a result, political participation of

141
Hungarian minority has been much more restricted. The new conflicts cast the
shadow on current Hungarian-Serbian cooperation as well.

We seek in this study to expose economic and social differences among the three
countries both at the national level and in border regions. Consequently, we
attempt to focus on the old and new elements of the emerging forms of
integration, and the obvious consequences of EU membership of Hungary for its
neighbourhood policies with Romania and Serbia –Montenegro.

6.2 Social and economic differences after 1990

Economic potential

With 22 million inhabitants and a surface of 238 000km2, Romania is considered

to be a large country both at regional level – compared to its other two
neighbours – and at European level. Hungary and Serbia-Montenegro have
similar size: Hungary counts 10 million inhabitants on 93 000 km2, whereas the
8,3 millions inhabitants of Serbia-Montenegro live on 91 000 km2. According to
their economic capacity, Hungary finds itself in leading position: in 2003 the
Romanian GDP reached 69% and the Serbian one 25% of Hungary’s value.
Economic development (GDP/capita) in Hungary reached in 2003 less than 55%
of the European average (E-15), while in Romania 26 % and in Serbia-
Montenegro 17% of it only. (Table 1. and Figure 2)

Table 19 : GDP/capita (Hungary = 100%)

Country 1998 1999 2000 2001 2002 2003

Romania 40,3 33,3 35,5 35,4 32,5 31,7
Serbia-M. 31,8 43,5 17,9 27,2 29,0 30,1
Source: Transition report 2004. European Bank for Reconstruction and Development,
London, UK.

142
 Map 23 : GDP per capita in European countries

Data source: World Bank: World Development Indicators 2005.

Hungary’s relationship with the two neighbouring countries has been deeply
influenced by the sharp economic differences existing between them. Despite
their rapid growth (in 2001 and 2002 the growth of Hungarian GDP was 3,8 and
3,3%, while in Romania 5,3 and 4,9%, and in Serbia-Montenegro 5,5 and 4,0%),
these economic differences remained at the same level.
Differences are less visible in the border region (40–80% in favour of Hungary)
compared with the three times differences of the countries’average (Figure 3.).

Map 24 : Regional differences in the GDP per capita of the three countries

143
Employment and unemployment

The employment rate significantly decreased after 1989, affecting women in

particular. The socialist inheritance – the high level of employment – has longer
persisted in Romania and Serbia-Montenegro (much more than in other
Southeast- European countries such as Italy, Greece or Turkey). At the same
time, the employment rate has been following a downward path (Table 2).

Table 20 : Employment rate, 2001

Top % Studied % Proportion Bottom %

countries in countries of women countries in
Europe % Europe
Sweden 78,4 Romania 62,2 46,2 Greece 48,7
Island 74,3 Serbia-M. 59,9 42,9 Turkey 48,7
Norway 73,3 Hungary 53,3 44,4 Italy 48,0
Source: Trends in Europe and North America – 2003, UN Economic Commission for
Europe

Unemployment could not be analyzed in connection with employment partly due

to the calculation method of unemployment registration and partly because of
the unknown extend of the black economy. The unemployment level is relatively
low particularly in Hungary but also in Romania. On the contrary, not only that
the unemployment level is extremely high in Serbia-Montenegro but it has been
continuously going upwards (Table 3).

Table 21 : Unemployment level in 2001

Top countries in Unemp- Studied Unemp- Bottom Unempl

Europe loymen countries loyment countries in oyment
t rate rate % Europe rate %
%
Luxemburg 2,0 Hungary 5,7 Bosnia-H. 39,9
Island 2,3 Romania 6,6 Macedonia 30,5
Switzerland 2,6 Serbia-M. 27,9 Serbia-M. 27,9
Netherlands 2,7 Bulgaria 19,4
Slovakia 19,2
Poland 18,2
Source: Trends in Europe and North America – 2003, UN Economic Commission for
Europe

Competitiveness

Figure 27 : Competitiveness of European countries

144
Source: Based on Lengyel, I. (2003) Verseny és területi fejlődés. (Competition and regional
development). JATEPress, Szeged. p.357. (author’s own calculations)
Notes: B: Belgium, DK: Denmark, D: Germany, GR: Greece, E: Spain, F: France, IRL: Ireland, I:
Italy, L: Luxemburg, NL: Netherlands, A: Austria, P: Portugal, FIN: Finland, S: Sweden, GB: Great
Britain, CZ: Czech Republic, EST: Estonia, H: Hungary, LT: Lithuania, LV: Latvia, PL: Poland, RO:
Romania, SLO: Slovenia, SK: Slovakia, CY: Cyprus, M: Malta, BG: Bulgaria, SM: Serbia and
Montenegro.

At the European Union level, countries’ competitiveness has been measured on

the basis of employment rate and productivity. Figure 4. shows that the
countries from Central and Southeastern Europe and Baltic area fill in the
unfavorable bottom-left corner. The lowest productivity level is registered in
Serbia-Montenegro, Romania, Latvia and Bulgaria while the lowest employment
level can be found in Bulgaria, Poland, Hungary and Slovakia. Only Czech
Republic and Slovenia could catch up with the countries from the European
middle-group.

Changing the economic structure

A strong correlation can be noticed between economic development and

economic structure. In other words, in the countries where economic
development (GDP/capita) is high, the proportion of the tertiary sector is also
significant whereas that of the agriculture is generally low. There are nonetheless
several exceptions: Malta, Greece and Latvia showed high tertiary proportion
although their economic development is at a medium level. In Austria, Finland,
Norway, Ireland the proportion of industry is extremely high. In Island
agriculture plays an important role at present, too. However, our research

145
countries, Hungary, Romania and Serbia-Montenegro could not be included in to
this „exception” group. (Table 4)

Table 22 : GDP and employment by major economic sectors, 1995 and 2001

1995 2001
Agriculture Industry Tertiary Agriculture Industry Tertiary
Hungary 6,8 (8)* 30,9 (33) 62,3 (59) 4,3 (6) 31,3 (34) 64,4 (59)
Romania 20,9 (40) 40,3 (31) 38,8 (29) 14,8 (43) 34,0 (26) 51,2 (31)
Serbia-M 19,3 (6) 37,8 (52) 42,9 (42) 21,1 (6) 32,1 (63) 46,8 (30)
* the employment rates in brackets
Source: Trends in Europe and North America – 2003, UN Economic Commission for Europe, p 174,
155.

Economic transition had a significant impact on Hungarian agriculture (before

1989 the agriculture gave almost 30% of GDP, and 20% of employment). At the
same time industry has kept its importance. The present employment structure
in Hungary shows some similarity with Austria, Finland, Ireland or Norway: low
proportion of agriculture (1-4%), and relatively high proportion of industry (32-
42%).

As of Romania, the slow modernization process is translated into the large

proportion of agriculture in country’s economy. It is however true that the
contribution of the traditional industry (metallurgy, particularly) has significantly
decreased. In Serbia-Montenegro the main tendencies are somehow opposite to
the other two countries: the proportion of agriculture amongst GDP indicators
and the employment in the industry sector have been growing while the
importance of the tertiary sector has been decreasing. These trends can be
explained by the unstable economy and the extremely high unemployment level.

Infrastructural supply

The main driving sectors of a modern economy are transports,

telecommunication and informatics. We shall analyze these branches in the
countries under research.
Under state socialism, Hungary was on the last place at building infrastructure
even among the COMECON countries (Figure 5).

Figure 28 : Telephone penetration in transition economies in 1989 and 1997.

146
 40
fixed line penetration rate per 100 inhabitants
35

30

25

20

15

10

0
a

ia

ia

ia
ry
ic
ia

nd
tia

ne

ia

sia

ia
a
ni

ni
ni

ss
tv

ak
bl
ar

on

an
ga

ai
oa

la

s
e

ua
to

ru
La
lg

pu

Ru
ov
ov

kr

m
ed

Po
un
Cr

Es

th
Bu

lo

Ro
Re

U
Sl
Sl

ac
H

Li

Be

M
h
ec
Cz

1989

1997
Source: World Telecommunications Development Report, ITU; and World Bank.

During the transitional period, Hungary improved its position compared to its
neighbours but it is still lagging behind the EU countries. Rapid progress has
been made in infrastructure development (motorway building, railway
modernization, infrastructure of telecommunication) following the EU accession.

Table 23 : The current situation (2001) and occurring changes in the

infrastructural supply (%) from 1995 to 2001

Hungary 1995- Romania 1995- Serbia- 1995- Germany Ireland Sweden

2001 2001 2001 2001 M. 2001 in 2001
% % 2001 %
Telephon* 374 10 183 6 229 3 635 485 739
Mobil* 498 64 172 175 187 187 683 729 790
PC* 85 17 32 19 23 10 336 359 507
Internet* 145 84 36 117 38 111 292 207 456
Cars* 244 – 139 – 161 – 534 361 455
Motorway(m)* 45 – 5 – 45 – 142 31 171
* pieces (or meter) per 1000 inhabitants
Source: Own data compiled by using the database of Trends in Europe and North America – 2003,
UN Economic Commission for Europe

A comparison between the three countries under study and the most developed
or the most dynamic European countries has been drawn (Table 5).

147
Consequently, it can be argued that the three countries are significantly
backwarded as general differences between them and the chosen developed
countries are 2-3 fold. The PC spreading is alarmingly lagging behind: the
difference in the number of PCs per 1000 persons is 6-fold between Sweden and
Hungary, and 22-fold between Sweden and Serbia-Montenegro.

Amongst the three countries, Hungary enjoys the most favorable position,
particularly in regard to the use of PCs and the Internet. Due to its high-pace
infrastructural development during the socialist era, Serbia-Montenegro could
preserve relatively good standards concerning the telephone supply and the
length of motorways (per 1000 inhabitants).
It can be generally concluded that the fastest rise was registered in the use of
mobile telephony within the three countries. At the same time, the development
of information technology was relative and very slow. .

Social differences

Infant mortality is a basic indicator of public health. If one draws a comparison

between our research areas and the most developed European countries, one
can distinguish among highly significant differences, even amongst these three
countries. (Table 6)

Table 24 : Infant mortality in 2000

Infant mortality Countries

rate (per 1000 live
birth)
<4 Finland, Spain, Sweden, Iceland, Norway
5–10 Czech Republic, Croatia, Estonia, Hungary (9,2), Lithuania,
Poland, Slovakia, Slovenia
10–20 Albania, Bosnia-H., Bulgaria, Latvia, Romania (18,6), Serbia-
M. (13,3), Macedonia
36,6 Turkey
Source: Trends in Europe and North America – 2003, UN Economic Commission for Europe, p. 191

As far as life expectancy is concerned, several similarities are to be noticed

among the three countries – especially their serious lagging behind developed
Europe. In the cases of the Baltic countries, Hungary and Romania, men formed
“the club with the least hopes” in 2000 (Table 7).

148
 Table 25 : Life expectancy at birth in 2000

Woman Men
Hungary 75,6 67,1
Romania 74,2 67,0
Serbia-Montenegro 75,1 70,3
Sweden 82,1 77,5
Italy 82,9 76,7
France 83,0 75,5
Source: Trends in Europe and North America – 2003, UN Economic Commission for Europe p. 187

During the last 10-15 years, tertiary education all over Europe was characterized
by a dynamic increase of students’ number. Finland has been at the top of the
European list (52 students per 1000 population) whereas Norway, Ireland,
Estonia, Latvia, Poland and Slovenia belong to the „top group” as well (with more
than 40 students per 1000 inhabitants). The above cited countries show that the
fast absorption level in higher education has not been only a consequence of the
country’s development level but also of political decisions. It is a fact that in
Hungary (30 students/1000 capita) and Romania (24 students/ 1000 capita) the
number of students tripled from 1990 to 2000. Nevertheless, the gap between
these countries and the leading ones is still wide. Unfortunately, Serbia-
Montenegro did not benefit from any increase during these 10 years
(16students/1000 capita).

Macroeconomic stability

Foreign direct investments (FDI), inflation, current account and external debt
have been chosen as indicators of the macroeconomic situation of the three
countries.

Table 26 : Foreign direct investment (net inflows recorded in the balance of

payments)

Cumulative FDI Distribution among Cumulative FDI

Countries inflows 1989–2003 CEB and SEE inflows per capita
in USD mln countries* (%) 1989–2003
in USD mln
Hungary 33 641 18,8 3 364
Romania 10 536 5,9 486
Serbia-Montenegro 3 112 1,7 374
Source: IMF, central banks and EBRD

149
The starting days of FDI were different in each of the three countries. Hungary
initiated a massive privatization process immediately after the regime change,
opening the biggest supply branches of the economy (except of the land and the
banking sector) to foreign investors. In the first part of 1990s, Hungary was the
leading host country in Eastern Europe. Between 1998 and 2002 Czech Republic
and Poland experienced the golden years of privatization and of FDI, namely
right after the end of the Hungarian privatization. Nowadays, Slovakia became
an important host country for FDI. FDI penetrated the Romanian economy
starting with 1997 while its top year was 2004. Nonetheless, foreign investors
have not shown too big interest in Serbia-Montenegro’s economy so far. (Table
8)

During the transformation years every post-socialist country has been hit by an
extraordinarily high rate of inflation: in Hungary this happened between 1992
and 1996 with a rate of 23–28% (annual average retail/consumer price level). In
Romania, 1993 was the „top” year, with 256% inflation rate; from 1997 on
(155%), a continuous, downwards trend of inflation can be noticed. Because of
the Yugoslav war, hyperinflation marked the beginning of the 1990s (9237% in
1991); after a period of oscillation, the radical decrease of inflation started in
2002. In 2003 the inflation rate was 15,4% in Romania, 11,2% in Serbia-
Montenegro while in Hungary it went under 5%.

As far as general government balance is concerned Hungary has shown some

instability in 2003 when the budget deficit was 6,1%. This level remained high in
2005 too, in spite of the strict expectations of the EU. Romania and Serbia-
Montenegro could control the governmental sector in a more effective way, thus
pushing this indicator under 2% in Romania, and under 4% in Serbia-
Montenegro.

Between 2000 and 2003, the external debt remained the same in Serbia-
Montenegro, while it increased by 50% in Romania and it doubled in Hungary. If
one is to compare the external debt with the economic capacity, Serbia-
Montenegro proves to be in serious financial crisis; meanwhile Hungarian debt
has been more or less financed by important FDI. (Table 9)

Table 27 : External debt in 2003

Countries External debt in USD External debt/GDP (%)

million
Hungary 40 157 62,3
Romania 11 588 34,6
Serbia-Montenegro 10 753 68,9
Source: Transitional Report 2004. EBRD p. 165, 173, 137

150
The progress in transition

Since 1994, the European Bank for Reconstruction and Development elaborated
some transition indicator scores in order to be able to formulate judgments about
the country-specific progress in transition. The transition indicators are grouped
into four main fields: enterprises, markets and trade, financial institutions and
infrastructure. The indicators from 1 to 4+ represent little or no change from a
rigid, centrally planned economy, whereas 4+ stand for standards of an
industrialized market economy. The EBRD report also points at the private
sector’s share in the GDP (Table 10).

According to the present EBRD report (2005) Hungary leads the movement of
transition among the post-socialist countries, Romania has important debts in
the governance and enterprise restructuring, the competition policy and the
securities markets. Serbia-Montenegro could show important progress only in the
case of price liberalization.

Table 28 : Transition indicator scores, 2004

Indicators Hungary Romania Serbia-

Montenegro
Large-scale privatisation 4 4- 2+
Small-scale privatisation 4+ 4- 3+
Governance and enterprise restructuring 3+ 2 2
Price liberalisation 4+ 4+ 4
Trade and foreign exchange system 4+ 4+ 3+
Competition policy 3 2+ 1
Banking reform and interest rate 4 3 2+
liberalisation
Securities markets 4- 2 2
Infrastructure reform 4- 3+ 2
Total 34 28 21
Private sector share of GDP (%) 80 70 50
Source: Transition report – 2004. EBRD

151
 6.3 Political, social and economic relations between Romania and
Hungary, Serbia and Hungary prior to Hungary’s accession to the
EU

6.3.1. Cooperation forms between Hungary and Romania prior to

Hungary’s accession to the EU

Following the signing of the Trianon treaty at the end of the First World War,
borders between Hungary and Romania had been redesigned and bilateral
relations had been rather frozen throughout several decades. Only after the
overthrow of the Ceausescu regime in 1989 did hopes for a normalization of
relations flourish again. The difficulties arising from the transition to a market
economy as well as the significant economic differences posed additional burden
on the initiation of cooperation forms. The unfolding of cross-border cooperation
has been hindered by the fact that the Hungarian regions in the vicinity of
Romania are economically underdeveloped and have been particularly affected
by the transitional changes. The social tensions foregrounding minority-related
problems and nationalism intensified. However, strained relations between the
two countries have progressively been left behind and bilateral relations at
national, regional and local levels were enhanced in the last one and a half
decades.

Economic Relations

Foreign trade between the two countries still registered a low turnover in the first
period of the 1990s. Although the exchange of goods went upwards in the last
decade, genuine prosperity could be felt only after 2000. In the years following
2000, imports and export figures steeply rose (Figure 6) so that the import-
export turnover was three times higher by the end of 2004. Hungarian foreign
trade has always had positive figures in relation to Romania. Hungarian exports
primarily consist of electrical machines, vehicles, mineral fuel, medicaments and
meat products. The accession to the EU had a negative impact on the exports of
agricultural products to Romania, i.e. the export of cereals had been reduced
with 70%. Aluminum and its derivatives, atomic reactors, boilers, machines and
mechanical equipment, electric machines and accessories, clothing items form
the bulk of imports of Romanian products.

Figure 29 : The evolution of Hungarian-Romanian foreign trade from 1989 to

2004

152
Source: KSH
Notes: Magyar Export: Hungarian Export, Magyar import: Hungarian import, Egyenleg: Balance

Mutual capital investments unequally evolved. After the change of regime,

Romania continued to be a preferred destination for Hungarian capital. Already in
1998, Hungarian capital investment in Romania overtook 61 million EUR. Even
though capital export has been continuously increasing ever since, a real jump of
more than 45% was made in 2001, while in 2003 growth registered almost 59%
rise. Within 6 years the value of Hungarian investment in Romania became three
times higher and in 2003 it rose above 165 million EUR. If other elements of
corporate investment are also taken into account - credits, assets, securities and
the capital market operations – only in the first half of 2005 the real value of
Hungarian capital in Romania was more than 700 million EUR (Figure 7).

153
 Figure 30 : The evolution of Hungarian and Romanian mutual investment from
1998 to 2003

millió Euro 180

165,9
160 151,6
140
120

100 95,4
80 65,7
61,2 64,6
60
40
20
0,1 4,2 5,4 7,0 6,9 12,2
0
1998 1999 2000 2001 2002 2003

Román befektetések Magyarországon

Magyar befektetések Romániában

Source: Figure compiled on the basis of the data provided by the Hungarian National Bank
Notes: Román befektetések Magyarországon: Romanian investments in Hungary, Magyar
befektetések Romániában: Hungarian investments in Romania.

Hungary is ranked only 14th among the countries with investments in Romania.
However, in respect to the number of joint ventures created, Hungary fills in the
5th position. On the other hand, even though the value of Romanian investments
in Hungary continues to go upwards too, Romania does not count as a significant
investor in its neighbouring country (in 2003 the value of investment was 12,2
million EUR, meaning less than one tenth from the value of Hungarian
investments in Romania). Industrial sectors (chemical industry/engineering) as
well as the banking sector are mostly attractive for Hungarian investors. 30% of
the Hungarian companies have investments in the Romanian heavy industry,
whereas 16% of them flourish in the retail industry, 24% in the industrial sector
and 14% in the services branch.

Contrary to investments from other countries, Hungarian capital is primarily

placed in the Romanian regions inhabited by Hungarians, namely in the four
counties along the Romanian-Hungarian border (Szatmár, Bihar, Arad, Temes)
and in the inner counties of Transylvania (Kolozs, Kovászna, Maros, Hargita). In
addition, prominent Hungarian investments are directed towards the otherwise
geographically isolated Bucharest. The presence of Hungarian investors is
explained by the fact that Transylvania is among the more developed Romanian

154
regions, moreover, by the use of a common language and by prior investments
made there. Investment in the farther regions is impeded by several factors such
as: the low capacity of absorption, the unqualified labour force and the backward
infrastructure. However, one has to note that Hungarian entrepreneurs investing
in the areas near the border generally bring less capital value: the average size
of their investment barely counts as a quarter of the non-Hungarian investments.
These entrepreneurs are predominantly micro and small enterprises.
Nevertheless, the major Hungarian businesses (OTP, MOL, TriGránit and Richter
Gyógyszergyár, etc.) have also invested – mainly in Bucharest and in the larger
towns from Transylvania (MOL Rt. is largely present in Bucharest and operates
the petrol station in the Székely county).

Romanian export of capital to Hungary has been mainly directed to Budapest.

This trend can be mostly explained by the fact that the Eastern part of Hungary
is economically underdeveloped and that there is not a significant Romanian
minority over the border (namely it did not settle there because of the language
difficulties). In addition, Romanian companies take Hungarian capital for a safe
stepping stone in the direction of the EU or they choose to invest in the Western
part of the country. Several assistance schemes have been designed under
Hungarian – Romanian cross-border economic cooperation programs with the
purpose of remedying the unfavorable status of the border region (euroregions,
agencies of regional development, chambers, business development
endowments, etc). With the exception of the PETROM investment started up in
1999, these attempts have had little success in the Southern plain so far.

As earnings in Romania are significantly lower and living standards poorer than
in Hungary, it is not surprising that the number of Hungarian citizens in
possession of a Romanian work permit is not representative. On the contrary,
the number of Romanian citizens working legally and illegally in Hungary is
highly representative. On the basis of the number of work permits distributed to
foreigners of different nationalities in the first half of 2002 it can be argued that
most of the workers come from Romania, Ukraine and Slovakia (these ratios are
still sound). The majority of comers originating from the neighbouring countries
are of Hungarian nationality, thus not facing integration difficulties in the guest
country (Figure 8).

The number of foreigners officially in possession of work permits –thus not even
the large number of Romanians - does not influence the dynamics of the labour
market. If one takes into account both the figures of those officially unemployed
and of those filling in vacancies their number is at an acceptable level. Greater
problems arise from the fact that the period of time spent for performing
seasonal work has an upward trend, however not in those areas where seasonal
work would be needed indeed.

155
In a retrospective analysis, the great majority of foreign labour force has been
seeking jobs in Budapest and Pest county, while only a fraction of the comers
have found incentives to settle in the counties along the border with Romania
(Figure 9). As the ratios on the figure show, they were not significantly modified
in the last years, although smaller variations occur every season. As of figures
effective on 30 June 2002, 41 972 work permits were released to foreigners. Out
of these, 23 338 sought jobs in Budapest, some seven thousand in Pest county,
whilst barely 300 worked in Borsod-Abaúj-Zemplénben county, 510 in Hajdú-
Bihár and 530 in Szabolcs-Szatmár-Beregben county. Compared to the previous
year, the regional differences slightly decreased, inasmuch as the share of the
capital and Pest county did not rise any further. At the same time, the proportion
of foreigners with work permits in the Southern and Western regions went
upwards. In other words, this means that due to the lower wages on the
Hungarian market, the high rate of unemployment and the scarce work
opportunities, the Eastern region of Hungary will not be able to attract foreign
workers in the future either.

Figure 31 : The distribution of Hungarian work permits on nationality criteria in

the first half of 2002

Európán kívüli
Egyéb európai országok
országok 8%
EU tagállamok össz.
3%
6%

Lengyel
2%
Jugoszláv
2% Román
Szlovák 60%
6%

Ukrán
13%

Source: Figure compiled by Balcsók I. on the basis of the data provided by the Labour Office
Notes: Román: Romanian, Ukrán: Ukrainan, Szlovák: Slovakian, Jugoszláv: Yugoslavian, Lengyel:
Polish, EU tagállamok össz.: EU total, Egyéb európai: Other European countries, Európán kívüli:
Out of Europe.

Romanian citizens working on the Hungarian black labour market essentially get
seasonal jobs in agriculture and constructions. There are no accurate data in
connection with their status but it can be argued that a great deal of them work

156
in compliance with the legal provisions. In many cases, illegal/black work is just
a statutory concept. Sometimes the only way to respond quickly to the demands
of entrepreneurs in exchange of modest rewards is to hire Romanian citizens
ready to come to the small Hungarian settlements along the Romania-Hungarian
border. It often happens that it is more advantageous to transport the group of
illegal workers over the border in the required area for only half of the usually
charged daily-work fee. This is explained by the fact that the accommodation
cost for several days is still cheaper than hiring the services of Hungarian
employees. In addition, guest workers on the black market are not interested in
meeting all formal requirements in order to get a legal work permit. Generally,
the usual procedures for getting a work permit can take up to two months and
the related costs (for workers from abroad who anyway get lower incomes)
amount to some 40 thousand forint (about 200 EUR). To sum up, even though
the black market already seriously affects the regional labour market along the
border with Romania, the rate of unemployment is still high in these areas. It
could be therefore concluded that this phenomenon does not exert a significant
influence so far.

Figure 32 : Distribution by counties of the effective number of work permits

released to foreigners (31 December 1999.)

60%

49,0%
50%

40%

30%
19,4%
20%
11,2%
10% 4,8% 4,2% 3,2% 2,7% 1,4% 1,7% 1,1% 1,3%
0%
d

ok
st

om

s
st

en
r

eg
rá

jé

ké

ha
Pe
pe

ln

es
Fe

er
ng

rg

Bé

Bi

zo
da

-B

sz
te
o

ú-

-S
Bu

Cs

ár
sz

ös
jd

un

m
-E

Ha

ye
at
yk
om

eg
z
ag

-S
ár

im
cs
-N
m

bb
sz

ol
Ko

ab
Já

tö
Sz

Source: Table compiled on the basis of the data provided by the Labour Office
Note: distribution by counties; A többi megye összesen: other counties

157
Migration

It can be argued that migration tendencies are similar to the work patterns. That
is to say that the number of Hungarian citizens settling in Romania is not at all
representative, whereas for Romanian citizens Hungary is one of the cherished
destinations. For years, the proportion of Romanian citizens in possession of
residence permit has been the highest in comparison to other nationalities
settling in Hungary. From 2002 to 2004 their number doubled, while their ratio
systematically exceeds 60% (Figure 10). Accordingly, at the end of 2004
Romanian citizens were in possession of 55 723 immigration permits (58.9%
from the total number released to foreign immigrants) and of 11 865 residence
permits (68,4% from the total number of residence permits attributed to
foreigners). Romanian citizens settling in Hungary are predominantly of Hungary
nationality. Their migration is not merely justified by ethnic reasons but also by
the encouraging economic prospects that re-settling entails. It is not easy to
identify accurate data/trends from the distribution of Romanian immigrants in
the Hungarian regions. However, on the basis of the distribution of work permits
it can be argued that most of Romanians choose to settle primarily in Budapest
and Pest county and in Western Hungary. Only a few prefer to reside in the
regions along the Romanian border, nevertheless they still constitute more than
half of those settling close to the border.

Figure 33 : The evolution of the residence permits’ number according to

citizenship (2002–2004)

7000

6000

5000

4000

3000

2000

1000

0
2002 2003 2004

román ukrán szerb-montenegrói

kínai vietnámi orosz

amerikai egyéb

Source: The Office for Immigration and Citizenship

Notes: roman: Romanian, ukrán: Ukrainan, szerb-montenegrói: Serbian, kínai: Chinese, vietnámi:
Vietnamese, orosz: Russian, amerikai: American, egyéb: others

158
Education

The number of Romanian citizens coming to study in Hungary is also significant.

They are solely Hungarian nationals from abroad and mainly graduating from
higher education institutes. Unsurprisingly, as Hungarian is the language of
instruction, they are not confronted with language problems. Many years of
experience have shown that a great deal of these students do not go back to
Romania, trying instead to settle themselves in Hungary.

In the past years, out of the total number of Hungarian students from Romania
enrolled in basic training only less than 10% pursued their studies in Hungary
(the ratio of Hungarians from Ukraine approached 50%). From the perspective of
Hungarian nationals outside the borders, training pursued in their country of
origin is still very important, since certain special training programs are made
available there in Hungarian and at an adequate level. At the same time, among
12913 foreign students enrolled in Hungarian institutes in the academic year
2003-2004, almost a quarter of them (3105 persons) came from Romania. The
majority of Romanian students – similarly to students from other neighbouring
countries – benefit from college and university training. Besides, the number of
students from Romania enrolled in Hungarian PhD and DLA programs is more
than half from the total number of foreigners. (Table 11)

Table 29 : The number of foreign students coming to Hungary from the

neighbouring countries

Higher College University Further

Phd, DLA Total
Country education level level specialization
Number of students receiving training
Austria 1 14 8 5 4 32
Croatia 3 32 168 13 9 225
Romania 13 1 647 1 001 122 281 3 064
Serbia and Montenegro 0 601 469 8 17 1 095
Slovakia 5 1 223 1 115 37 67 2 447
Slovenia 0 14 18 1 2 35
Ukraine 5 662 437 10 58 1 172
Total no. of foreigners 28 5 016 7 049 240 580 12 913
Source: Table compiled on the basis of the data provided by the Ministry for Research

159
Tourism

Tourism between Romania and Hungary became an important sector. Most of the
foreigners visiting Hungary are from Romania. In 2004, a fifth (6922 thousand
people) from the total number of foreigners came from Romania, thus overtaking
the visitors from Slovakia, Austria, Serbia and Montenegro, Germany, Ukraine
and Croatia. Close to 80% from the total figure of tourists visiting Hungary in
2004 came from these six countries and Romania. From the number of Romanian
visitors in Hungary, 71,5% came here only for one-day visit, 19% spent from
one to three nights here, whereas 9,4% four or more nights. Altogether 8,7%
from the amount of one-day visitors traveled for touristic purposes (leisure
tourism 14 – 385 thousand persons, business tourism 15 – 48 thousand persons).
The rest of visitors only passed through Hungary or they came to do shopping
here. From the number of tourists spending more days in Hungary almost half
came for tourism, however, among these the number of visitors in transit is still
high (Figure 11).

Figure 34 : The number of Romanian visitors in Hungary according to their

travel destinations

4,2% 5,5%

többnapos látogatók 44,3% 36,0% 10,0%

1,0% 1,5%

egynapos látogatók 7,8% 30,1% 59,6%

0% 20% 40% 60% 80% 100%

szabadidős turizmus üzleti turizmus vásárlás átutazás egyéb*

Source: Table according to KSH data

Notes: többnapos látogatók: several-day-visitors, egynapos látogatók: one-day-visitors.
Szabadidős turizmus: leisure toursm, üzleti turizmus: business tourism, vásárlás: shopping,
átutazás: transit, egyéb: other

From examining the distribution of Romanian tourists visiting Hungary for several
days according to tourist regions, it can be concluded that Budapest has been the

14
Leisure tourism: holiday; round trip; sightseeing; hiking; visiting relatives, friends, acquaintances; medical
treatment; wellness treatment; taking part to cultural and sport events; hunting; religious purposes.
15
Business tourism: conference, congress; business trip; exhibition; market

160
most preferred destination. Nevertheless, the South and Northern Great plain
regions at the border with Romania receive a significant proportion of visitors
(Figure 12). On the other hand, the per capita daily expenditures of Romanian
one and several- days visitors are quite low. In 2004, the 4,8 thousand forint
expenditures were significantly behind the average of 8,4 thousand forint of the
other foreign visitors in Hungary.

Romania is a preferred destination for Hungarian citizens, too. According to the

figures, in 2004, on the second place after Austria, Romania received the highest
number of Hungarian tourists (3286 persons). Nonetheless, this figure is less
than half from the total number of Romanians coming to Hungary. The
proportion of one-day visitors is 72,1%, out of which the majority certainly
travelled to Romania for shopping and “petrol” tourism. Unfortunately, KSH does
not provide detailed data on the motivations of travellers, but from experience it
can be concluded that Hungarian tourists go to Romania for several-days visits
for leisure tourism. First of all, they visit areas populated by ethnic Hungarians,
especially places of interests and holiday resorts in Transylvania and the Székely
region.

Figure 35 : The distribution of several-days visitors from Romania to Hungary

according to touristic regions

Budapest; 27,1%
Dél-Alföld; 21,2%

Dél-Dunántúl;
4,1%

Észak-Alföld;
Közép-
12,1%
Dunavidék; 4,2%

Észak- Balaton; 8,2%

Magyarország; Tiszató; 5,4%
4,3% Közép-Dunántúl;
Nyugat-Dunántúl; 7,2%
6,2%

Source: Own compilation on the basis of data provided by KSH

In addition to the above, Hungarian-Romanian relationships entail several other

aspects, from cultural relations and twinning settlements to environmental
cooperation. A series of treaties regulated the cross-border cooperation between

161
the two countries. Besides border control and patrolling agreements, a series of
state treaties with direct impact on cross-border cooperation had been signed
between Romania and Hungary. Among these, the Hungarian-Romanian
Comprehensive Agreement (1997. yearly code XLIV.) is the most important, as it
enforces the cooperation framework. The intergovernmental expert committees
(i.e. the Committee concerning cooperation among minorities, the Committee
concerning economic, trade and tourism - related cooperation, the Cross-border
cooperation Committee respectively that for cooperation among local
governments, the Committee for infrastructure, traffic, water and environmental
management cooperation, etc.) set up in terms of the treaty the most important
tasks. In other words, who is to work out and to monitor the cooperation
between Hungary and Romania in “joint affairs”.

Numerous bilateral comprehensive cooperation agreements have been and are

enforced at the social economic level (i.e. the convention on multimodal
forwarding of goods, the Hungarian-Romanian agreement on the protection of
investments, diplomas issued by accredited research institutes, diplomas, official
certificates and bilaterally recognized academic degrees, the Hungarian-
Romanian cooperation agreement on privatization, etc). Among these, due to
geographic conditions, the agreements on water management and environment
protection receive special attention.

Cross-border relations
The fundamental framework has been defined on the grounds provided by the
Hungarian – Romanian Border Rivers Convention signed in 1986 and by the
Treaty on “Cooperation in regard to environmental protection” in effect from
2000. In addition, several agreements on water conservation have been enforced
(i.e. the Agreement on the Flood Control, the Agreement regarding drainage, the
Rule on the Exchange of Information, etc). In fact, the need for closer
cooperation has arisen from the fact that the border line cuts in two the natural
ecosystem (among which a great deal of ecological corridors) and that the two
areas are connected through a network of surface – underground water systems
(with numerous water flows across the border). Moreover, enhanced cooperation
is justified by the existence of common surface and underground water supplies
in the area, by the fact that the industry in the border region – especially on the
Romanian side – is outdated and makes use of environmental-polluting
technology. This entails high environmental risks, as for instance in the case of
Tisza and its related tributaries which are regularly contaminated with cyanide
and heavy metal residuals.

The establishment of euroregions in the 1990s as well as of new and smaller-

sized euro-regional organizations and agencies significantly contributed to the

162
intensification of the cross-border relations. The Hungarian and Romanian
counties along the border line share two large-scale, very diverse euroregions
given their development and operational patterns: the Carpathians Euroregion
and the Duna-Körös–Maros–Tisza Euroregion. The western part of the border line
incorporates the Carpathians Euroregion – facing the Duna-Körös-Maros-Tisza
Euroregion, in place from 1997 on. This has not been the result of a self-
developing, “bottom-up” initiative but its framework has been enforced in
connection with greater political objectives, in a “top-down manner”. The
Carpathians Euroregion has a “multinational” character. Oversized historical-
territorial-ethnical and other sort of problems prevent the large organizations
from working efficiently there. Once this has been acknowledged by local actors,
they came to realize that smaller-sized and hereby more efficient Euroregional
organizations should be created. Two organizations at county level are already in
place: the Interregion, formed at the border between Romania-Ukraine and
Hungary and the Hajdú-Bihar-Bihor Euroregion respectively. Moreover, the
Bihar-Bihor Euroregional Organization has come into being on the two sides of
the border, as merger of the associations created by the inhabitants of the Bihar
and Bihor regions.

In addition, the agreements between settlements have a significant importance

for cross-border relations. Among these, the most efficient framework in vue of
daily, operational agreements is the twinning of cities (i.e. Nyíregyháza –
Szatmárnémeti, Debrecen – Nagyvárad, Békéscsaba – Arad, Szeged –
Temesvár). Many Hungarian settlements have a Romanian twin town. It can be
nevertheless argued that these relations could essentially come into being due to
the existence of Hungarian-Hungarian relationships. In other words, amongst
Romanian settlements, the majority of partners are Hungarian. Consequently, we
could distinguish among the cross-border relations on one hand those that
render cooperation more operational and on the other hand most of the cultural
relations existing between twin towns. Many Hungarian settlements are involved
in such relations, whereas most of the Romanian towns participating in twinning
projects are from the Székely region.

Frequent and diverse relations develop between the inhabitants of the very
border region in particular. With regard to the nature of cross – border relations
with the neighbouring country, Romanian and Hungarian respondents have
equally placed personal relations (visits of relatives, friends, and acquaintances)
as the most frequent motivation. Furthermore, both parties have emphasized the
frequency of resting and leisure – related as well as of shopping- driven
motivations (Figure 13).

163
 Figure 36 : The nature of relations between the inhabitants of the settlements
across the Hungarian-Romanian border (measured by their frequency)

egyéb
tanulás
megélhetési kereskedelem
munkavállalás
üzleti kapcsolat
bevásárlás
pihenés, szabadság
barátok, ismerősök látogatása
rokonlátogatás
romániai átlag magyarországi átlag

0% 10% 20% 30% 40% 50% 60% 70% 80%

Source: Data collected from a questionnaire-based survey, administered by Debrecen Institute of

MTA RKK ATI
Notes: egyéb: other, tanulás: education, megélhetési kereskedelem: smuggling (?),
munkavállalás: work, üzleti kapcsolat: business relationship, bevásárlás: shopping, pihenés,
szabadság: recreation, barátok, ismerősök látogatása: visiting friends and relatives, romániai
átlag: Romanian average, magyarországi átlag: Hungarian average.

A development concept and programme, with particular relevance to the

Hungarian-Romanian cross border relations, was designed in September 2000.
Its priorities were revisited in 2003. According to the main document entitled The
Development Concept and Program for the Hungarian-Romanian Cross-Border
Region, its objectives are formulated at the county level. The counties concerned
from the Hungarian side are Szabolcs-Szatmár-Bereg, Hajdú-Bihar, Békés and
Csongrád, whereas from the Romanian side Satu Mare, Bihor, Arad and Timis
counties are included in the programme.

6.3.2. Forms of Cooperation Between Hungary and Serbia–

Montenegro Before the EU Accession

The social and economic differences between Hungary and Serbia after 1990 are
due to the different paths that systemic changes undertook. While Yugoslavia has
been involved in a civil war (although a multi-party system has been also
established there, the power was practically in the hand of the post-communist
nationalists) Hungary started and - as the most relevant indicators show -
completed the transition period to a market economy. .
As argued in the previous chapter, Serbia-Montenegro and Voivodina have been
completely ruined by the war. The economy continued to be in a shattered state
after 2000 and development is very slow. Transition is an ongoing process; the

164
country’s social, economic situation is not stabilized yet. Unemployment level
remained high, inflationary effect is strong, corruption is overwhelming whilst
politics and cohabitation of nationalities are poisoned by nationalism. In spite of
their pre-war dynamism, the state of affairs in the border area with Hungary and
Voivodina resembles this picture.

The economic situation of Voivodina

Similarly to the general situation in Serbia, Voivodina is characterized by slow

economic growth rate (in 2002 it was 2%), high unemployment, outdated
technology, low competitiveness level, non-transparent legal regulation system
and stagnating industrial production. In 2001-2002, Voivodina’s economy was
deeply confronted with stagnation in almost every economic sector. Import rates
were higher than export ones and in August 2002 industrial production was less
than half of the 1990 level. At the same time, territorial indicators are in many
respects better than the indicators of Central-Serbia or the whole republic (Table
12):

Table 30 : Comparison of some economic indicators of Voivodina and Serbia

Voivodina Serbia Central-

Serbia 16
2001-2002 industrial production growth 2,1 1,7 1,6
(%)
2001-2002 wholesale trade turnover 9,5 3,1 1,7
growth (%)
2002 per capita average real income 10 480 8 742 9 208
(dinars)
Source: Socio-Economic Trends, 2002, 9.

27% of the active population is unemployed in Voivodina. Since 2001 on, the
unemployment level has been growing with 10% (there are 500 thousand
employed and 270 thousand unemployed persons). Factory bankruptcies are also
frequent nowadays. Employment is in many cases (according to the estimations
in the case of 200 thousand employees) translated by a formal or a minimal
salary. The post- civil-war influx of Serbian refugees exacerbated economic
stagnation, generating further unemployment (in 1996 the unemployment level
was below 20%). Thus, in this regard the situation is worse here than in the case
of Central-Serbia or of the whole country. While in Voivodina there are 123
unemployed persons to 1000 inhabitants, in Serbia this value is 101 and in
Central-Serbia is 93. 17

16
Without Voivodina and Kosovo Autonomous Regions
17
31 December 2001 data

165
Cross border cooperation between Hungary and Serbia

Even though Voivodina is considered to be one of the most developed regions of

Serbia, it is still quite backwarded in comparison to the areas at the Hungarian
border. This area bears the ruinous consequences and aftermath of the civil war
whereas in the southern Hungarian border area “only” signs of backwardness and
very slow development are to be noticed.

Some words on the civil war period

During the civil war in the 1990s, fleeing ethnic Hungarians from Serbia, Serbs
and other Yugoslav ethnic groups transferred significant wealth over the border,
in Hungary. The number of Serbian enterprises has risen in the southern border
region, strong migration processes have started, trade and other relations have
been enhanced. Szeged became the central settlement of entrepreneurial capital
investment. The refugees located their new enterprises near to the border, by
this indicating their wish to return to the origin country. Only 15% of the capital
investments were real, 85% of them consisted of fictive family enterprises with
insignificantly subscribed capital.

Map 25 : Yugoslav enterprises in the settlements of the Southern Great Plains

166
Wealth was transferred in the banks from Szeged at the end of the 1980s. Many
people bought flats, which significantly pushed up flat prices in Szeged; others
invested their capital in enterprises. During the 1993 immigration wave period,
many enterprises came into being in the Bács-Kiskun County. In regard to
Hungary‘s territory, the Szeged–Kecskemét–Budapest axis became especially
attractive for investors (Figure 14).

After the war

At present, Hungarian entrepreneurs are highly reluctant to invest in Voivodina

or in other Serbian territories. Since 2001, some 140-150 investments have been
registered in Voivodina. Hungarian SMEs mainly opened branches there by
establishing joint ventures with local partners. Hungarian firms often look there
for work partners that could use the significantly cheaper Serbian labour. The
presence of Hungarians in Voivodina is favorable to Hungarian investors as they
represent cultural and information capital for them; their language skills and
local knowledge facilitate the Hungarian intrusion into the Voivodina market. In
the communities led by Hungarian local governments Hungarian firms can count
on the local governments’ political support. Moreover, they enjoy certain
economic benefits by cooperating with local Hungarian entrepreneurs (Figure
15).

Figure 37 : The situation of the Yugoslav enterprises in the counties of South

Great Hungarian Plain (1996-1999)

4000

3000

2000

1000

0
Magyar Dél- Bács- Bék és Csongr
orsz ág Alföld Kisk un m. ád m .

1996 3209 2419 1052 47 2419

1999 3984 2767 956 67 2767

Source: CD Céghírek (Firm news) 1996, 1999.

Migration

167
Political tensions, fleeing away from the capital and family unifications 18
significantly contributed to the migration processes. These processes have
mainly been a feature of the first half of the 90s, however, they are still ongoing.
Figure 16. illustrates migration processes in the first years of the new
millennium, analyzed on the basis work permits, settlement permissions and the
naturalization processes. The current share of immigrants from Serbia-
Montenegro is significantly lower than in the 90s, yet there is a slightly growing
tendency.

Figure 38 : The evolution of the residence permits’ number according to

citizenship (2002–2004)

7000

6000

5000

4000

3000

2000

1000

0
2002 2003 2004

román ukrán szerb-montenegrói

kínai vietnámi orosz

amerikai egyéb

Source: Office of Immigration and Nationality, 2004

Notes: roman: Romanian, ukrán: Ukrainan, szerb-montenegrói: Serbian, kínai: Chinese, vietnámi:
Vietnamese, orosz: Russian, amerikai: American, egyéb: others

Economic relations with Hungary

Yugoslav-Hungarian and cross-border economic relations had been very lively

before the change of the system. During this period, the reclusive policy of the
socialist countries was mitigated by the so-called “small border traffic” 19, very
prolific at the beginning of the ‘80s. In the trade sector, the department store
cooperations 20 were in favour of a higher export-import rate, and their primary
aim was to diversify the product offer.

18
The male family members abroad aimed at family reunification.
19
The border area population’s freer traveling, border crossing were made possible by an interstate agreement.
20
It was not an accepted socialist solution; the corporations generally were not authorized to directly cooperate.

168
 Under the cooperation framework of the food processing industry, Hungarian
sugar beet and soy bean productions were also processed in Voivodina. In the
‘70s and ‘80s, cooperations were set up in the milk industry, meat industry, plant
improvement and in the field of seed grain production. Moreover, relations
between agrar experts supported the experience exchanges launched at the
higher education level and in the seed grain producing institutions (Bácsalmás).
Seed grain production and research carried out in the Agricultural Faculty of
Újvidék University were opened to Hungarian producers until the mid-‘80s.
In other words, a dynamic division of labour remained in place until the
beginning of the 90s. On the other hand, inter-institutional and interpersonal
relations extensively developed. At that time, Yugoslav firms had better relations
on the global market as technology and product development had been in place
in Voivodina earlier than in Hungary. There was a significant rate of “shopping”
tourism, but of real tourism too. Although in a quite formal way, the process of
twinning settlements also started at the time. In addition, contacts were initiated
and developed between economic organizations too.

The dynamic relations that had existed before the systemic change have been
disrupted by the civil war when Yugoslavia disintegrated. As currently incurring
sanctions, the small economy of Yougoslavia has been not able to establish
significant economic and trade relations so far. These relations show an upward
tendency only since 2000 on. But opportunities are open in the region; the
“relations/connections” capital could be immediately activated under favorable
circumstances (e.g. the Kunbaja producers buy the seed grains from the
mentioned Újvidék research institution).

Since 15 August 1996, ambassadorial relations exist between Hungary and

Serbia-Montenegro. There is an embassy and trade agency in Beograd and a
foreign economy attaché in Subotica/Szabadka.

Several important bilateral agreements have been signed between the two
countries:

– Total visa exemption agreement (27 April 1967);

– The most favored nation status ensuring economic and trade agreement
(1996);
– Agreement aiming the avoidance of the double taxing; Investment protection
agreement (20 May 2001);
– Bilateral free trade agreement (7 March 2002) 21.

Although bilateral trade relations were enhanced since Autumn 2000, no

significant results could be registered. Moreover, the implementation of the free

21
Business2Hungary.yu, Hungarian Investment and Trade Development Agency Our bilateral economic relations,
http//www.business2hungary.hu/.

169
trade agreement and of the so-called ‘six points economic package 22’ is quite
slow.

The cooperation forms between the enterprise development foundations, firms,

commerce and industry chambers, and by different exhibitions, fairs, business
people meetings 23 organized by the county and local governments contributed to
the strengthening of cross-broder economic relations. In spite of the differences
between the Hungarian and the Serbian Chambers, they can still significantly
assist in the enlargement of direct corporate relations, in the mutual participation
to exhibitions and fairs, in the organization of cross border business meetings
and in the exchange of information.
The target areas of cooperation are commerce, wood industry, food processing
industry, confection industry, furniture industry, and business consulting. As a
result of cooperation, it is worth mentioning the setting up of the Cross Border
Coordination Working Committee; it coordinates the work of regular chamber
meetings, the mutual fair participation and the business meetings.

Hungarian direct investment

Cooperation possibilities and expectations are much higher than the actual
involvement of the Hungarian capital in the Serbian economy. In fact, the
Serbian party suggested that the Hungarian government should send experts to
the Serbian Ministry for Economy and Privatization, in order to promote
participation to privatization programs 24. An agreement was signed by the
General Consul of Szabadka and the Economic Chamber of Zombor district,
aiming at the higher participation of Hungarian investors to the privatizations in
Voivodina. Accordingly, the Zombor economic chamber will provide on-line
information regarding the district’s economic possibilities and the firms to be
privatized 25.

22
- free trade agreement
- energy systems’ cooperation
- SMEs credit guarantee based support
- Building of the Budapest-Beograd motorway
- participation in the reconstruction
- tourism cooperation
23
East-West Expo, Farmer Expo International Agricultural and Food Processing Industry Professional
Exhibition, Csaba-Expo
24
Meetings on the Hungarian enterprises’ participation in the Serbian privatization Magyar Szó (Hungarian
Word) 7 December 2002
25
Visa requirement and economic relations Magyar Szó (Hungarian Word) 7 December 2002

170
Commerce

The free trade agreement between Hungary and Yugoslavia came into force on 1
July 2002. According to this agreement, Hungary contributes to the temporary
insurance of certain, one-side advantages in connection with the elimination of
customs; this is the first such agreement, when Hungary accepts certain
asymmetry in the benefit of the other party. Concerning Yugoslavia, this is the
first free trade agreement which was concluded in line with the norms of the
World Trade Organization (WTO). The evolution 26 of bilateral trade in the last two
years is illustrated by Table 13.

Table 31 : The evolution of the bilateral trade 2001–2002

Trade turnover Hungarian export Increase of the Hungarian import Increase of the
(million USD) into Yugoslavia Hungarian export from Yugoslavia Hungarian import
Year (million USD) (The same period (million USD) (The same period
of the previous of the previous
year=100) year =100)
2001 258,6 194,0 109,5 63,0 106,9
2002 350,0 224,5 115,0 66,8 120,6
Source: HCSO 27 Foreign Trade, 2002. 12. 5/b
Foreign trade turnover concerning the relatively important countries
www.ksh.hu/pls/ksh/docs/hun

In 2001 Hungary was on the eighth place in regard to Yugoslav exports. As far as
imports are concerned, it was on the fifth position, with significant Hungarian
bilateral foreign trade surplus 28. As for Hungarian export, the share of processed
products is the largest, but food, beverages and tobacco are significant
Hungarian export items too; Serbia-Montenegro mainly exports products
processed in Hungary. Following the free trade agreement, the barter turnover
between the two countries increased, thus reaching the pre-war level. It is
difficult to objectively judge the role of the free trade agreement in the upswing
of the foreign trade as the normalization of bilateral relations contributed to the
development of trade independently from it. Contrary to the desired pace of
bilateral relations, several unpleasant circumstances prevented potential
Hungarian partners from initiating contacts. The cautiousness of Yugoslavia
towards Hungarian entrepreneurs is justified because of the relaxed paying
attitude, backed by the current state of the economy and the events of the

26
Concerning the relations with Hungary, the trade between the Voivodina and Hungary grew 18% between
2001 and 2002 due to the effect of the free trade agreement.
27
Hungarian Central Statistical Office
28
IMF, 78–79.

171
previous years. The economy is characterized by mutual indebtedness of
enterprises, no remedy has been found to it so far whereas it is only made more
difficult by the restrictive financial policy. Cash or ready-made transactions
dominate the foreign trade. Open transportation, delayed payment, application
for product credit without bank deposits are not offered. The indebtedness, the
lack of financial assets makes highly risky the collection of non-paid accounts,
products and services. In case of a product bought in Serbia it is mandatory to
avoid advance payment because of the “product elimination" risk. The collection
of the expired claims via legal means is quite uncertain too. Due to the
uncontrollable character of corporate transformations and financial channels, the
payment of debt is questionable in the implementation phase as well.
Transportation and technology discipline are insecure and unreliable, the custom
procedure is slow and complicated and there are problems with the property
registry (this latter is significantly better in Voivodina than in Central Serbia) 29.

Education

During the 90s, but mainly since 1993, in the hope of a more secure education,
high school pupils and university students went to study to Budapest, Szeged or
other centers where it was possible to get specialized education (wood
processing high school, horticultural high school, actor training high school). The
education-driven migration reached its peak between 1992 and 1995, and
another intense period was around 1999, during the Yugoslavia NATO attacks.
However, die to the economic and politic difficulties, this process is still ongoing.

From Yugoslavia’s point of view, the unprecedented higher education relations

have been established during the most difficult times of embargo. Although there
is a symbolic and formal-like cooperation between Szeged University and the
Natural Science Faculty of the Újvidék University, the Zenta - based distance
education center at the Horticultural Engineering Faculty of Saint Stephen
University is much more significant for practical reasons. Through this
connection, 80 horticultural engineers from North-Bácska got degrees and
remained in Voivodina! The local branch of the Technical College from Gábor
Áron University similarly operates in Szabadka and recently a SZÁMALK local
branch opened in Topolya.

As a result of cooperation in the higher education field, it could be mentioned

that students from Hungary-based university and colleges could organize their
summer training in Voivodina too, starting with the summer of 2000.
The following table (Table 14.) refers to, amongst others, the 2005 share of the
students arriving from Serbia.

29
Interview with András Pallos

172
Table 32 : The number of the foreign students arriving from the neighbouring
countries in every faculties (persons)

Higher Professio
level Universiti nal
Colleges PhD, DLA Total
Country name vocationa es further
l training education
Number of students
Austria 1 14 8 5 4 32
Croatia 3 32 168 13 9 225
Romania 13 1 647 1 001 122 281 3 064
Serbia-Montenegro 0 601 469 8 17 1 095
Slovakia 5 1 223 1 115 37 67 2 447
Slovenia 0 14 18 1 2 35
Ukraine 5 662 437 10 58 1 172
Total foreigners 28 5 016 7 049 240 580 12 913
Source: data of the Ministry of Education

There is a continuous health care migration from the Hungarian inhabited

Voivodina areas, i.e. the Voivodina people travel to Szeged to get specialized
private treatment.

Tourism

The former Hungarian inbound tourism from Serbia, which mainly meant the
mass arrival of the Voivodina people to the Hungarian spas, the Lake Balaton,
Budapest, completely collapsed (1992–93). This is due to the change of system
and the transition to a market economy, following which prices increased and
Serbian economy found itself in decline. Only “shopping” tourism reappeared
after the Serbian change in 2000, however there is a slight increasing tendency
in other tourism branches as well. Transit tourism stayed alive during the 90s
whereas education tourism is also significant. The structure of visits underlines
this fact as well. In the first part of 2005 the share of one-day stay (transit
tourism) was 81% while the share of stays over 2-3 days was minimal. The
number of nights that visitors spent (in the first half of 2005) was 47000,
indicating a 13% increase in comparison with the same period of the previous
year (Figure 17).

173
 Figure 39 : Number (thousands) of the arriving tourists from the neighbouring
states

7000

6000 Austria
5000
Romania
4000
Ukraine
3000
Serbia–Montenegro
2000

1000 Slovakia

0
1997 1998 1999 2000 2001 2002

Source: HCSO

Water management and environmental protection

Water management relations, re-opened in 1955, contributed to the
development of more intensive and fair cooperation forms. The number of water
management organizations engaged in cooperation programs went up. In fact, it
is indispensable to ensure continuous cooperation in view of fulfilling the
professional requirements (the effective flood control and catastrophe protection
presumes cooperation).
In the field of environmental protection, the Kiskunság National Park Directorate
and the (Serbian) Voivodina Nature Protection Institute attempt to establish
cross-border cooperation, with particular emphasis on concerted management of
Szabadka forests and the Körös-ér Landscape Protection Area.

Regional, settlement cooperation

During the years after the change of system in Hungary, the Yugoslav-Hungarian
cross border cooperation has been exclusively handled in the form of relations
between settlements. This has been due to the absence of a proper “middle
level” from the Yugoslav public administration. However, the local governments
of Bács-Kiskun and Csongrád counties maintained relations with the Zombor and
Szabadka municipal governments. Although these relations were restricted to a
formal level during the 90s, they became more vivid in the context of regional
cooperation carried out between Szabadka–Szeged and the Zombor–Baja
regions. The Hungarian villages on the Serbian side (Ada, Becse, Bácstopolya,
Magyarkanizsa, Zenta and newly Törökkanizsa) set up significant contacts as
well. The twin-town relations between smaller settlements are more or less
restricted to cultural and sport activities.

174
The Voivodina Autonomous Region (VAR) is a member of the Danube–Körös–
Maros–Tisa Euro region since 1997. Its greatest achievement was to assure full
membership status for Szabadka city in this organization, in addition to the VAR
membership.

In line with the Euroregion development strategy, closer cooperation of the

region’s member counties is enhanced. However, this cooperation could be made
more effective through developing communication strategies (border crossing
points, public roads, regional information technology) and through European
economic development methods (incubator houses, innovation centers, industrial
parks). The reopening of the former Szeged–Temesvár–Kikinda railway as well as
the assurance of the navigability on Béga and Temes Rivers are taken into
account. In the context of the cross border regional development cooperation, in
2003 in Moravica an initiative was launched for the establishment of the
Kunbaja–Bajmok Industrial Park and Logistical Center.

The readiness for cooperation is well proven by the existence of the border-
related regional development concepts and strategies. Among the Hungarian
documents there are direct references to this aspect e.g. in the South Great
Hungarian Plain Regional Development Strategy, Csongrád County Regional
Development Strategy 30as well as from the Serbian side in the Serbian Land Use
Plan 31 and the Voivodina Economic Development Concept 32. The Upper-Bácska
and North-Voivodina Cooperation Program as well as the DKMT Euro region
Development Strategy 33 are made possible with the participation of both states’
experts. All documents underline the importance of cooperation, emphasizing the
significance of traditional economic sectors’ (food processing industry, seed grain
production and trade) and the new EU forms and opportunities for cooperation
(industrial parks, establishment of incubator houses).
The success of cooperation is also acknowledged in the 80 PHARE CBC – where
participants with small projects signed in , as in this case the fundamental
application requirement was the involvement of Voivodina partners. All
successful applicants had Zombor, Bajmok, Zenta-based partners. There were
nearly 450 applicants for the 2005 Neighborhood Program applications
(INTERREG III A - CARDS 34). In spite of the relatively small amount (2 million
EURO) available, the great responsiveness of applicants proves the viability of
these renewed connections (economic, chamber, self government, and research
institutes related fields).

30
MTA RKK ATI (Great Plain Research Institute of the Center of Regional Studies of the Hungarian Academy
of Sciences) Békéscsaba Group , 2000
31
Prostorni Plan Srbije, 1996
32
GTZ, 2003
33
MTA RKK ATI Békéscsaba Group, 2005
34
CARDS-program – Community Assistance for Reconstruction, Development and Stabilization – It is related to
Albania and the Yugoslav successor states

175
 6.4 How does Romania relate to Hungary after its accession to
the European Union?

From 1 May 2004, Hungary became member of the European Union and thus the
only neighbour of Romania with communitarian status. This paper discusses how
Hungary’s accession to the EU affects relations between the two countries.

Bilateral relations have always evolved against the backdrop of disputes

concerning the situation of the large Hungarian minority in Romania. However,
Hungary’s recent EU membership sets the traditional topics of this debate in a
broader European context and raises new challenges. This paper argues that
Hungary’s accession in the EU did impact the relationships between the two
countries. Since 1 May 2004, the two post-communist countries addressed
mutual problems not only from a strict neighbourhood perspective but mostly in
the light of Hungary’s already EU membership and Romania’s candidacy
respectively.

My main argument is that the status differentiation (EU member vs. EU

candidate) had a maturing effect on bilateral relations, in the sense that issues of
common interest were approached with a higher degree of responsibility and
European awareness. This status differentiation contributed at leaving behind
past tensions and opening up new channels of dialogue and cooperation. At the
same time, Romania could indirectly experience the immediate effects of the EU
accession and acknowledge various changes that European integration brings
about.

Political developments: leaving behind conflicts of the past, focusing on future

challenges
Even though Romania and Hungary have been solidary in their efforts towards
European integration in the past 15 years, the different perceptions of the status
of the Hungarian minority living in the north-west part of Romania (Transylvania)
generated sometimes critical moments in the bilateral relations.
Soon after 1 May 2004, relations between the two countries witnessed a critical
moment: Hungarian officials proposed that regional autonomy for Hungarians in
Transylvania should become a pre-condition for Romania’s accession to the EU.
Without having any direct impact on the rapports of Romania with the EU, the
statement made a few eyebrows raise in Bucharest. Regional autonomy counts
as the highest grievance of the Democratic Union of Hungarians from Romania
(DUHR). Even though enlarged minority rights have been conceded in the last 15
years, successor Romanian governments failed to confer regional autonomy
proper to Hungarians in Transylvania. In the light of this state of affairs,
Romanian political class qualified Hungary’s usage of authority derived from the

176
EU membership as a tactless interference in the internal affairs of an EU-
candidate with a large Hungarian minority. Moreover, the declaration did not
match the external policy line promoted by the Union itself. As the commissary
for enlargement Olli Rhen repeatedly stated, to confer or not regional autonomy
is a matter of domestic politics, to be solved internally by each member or
candidate country (www.divers.ro, no. 40 (186) 4 November 2004, 26 (218)/7
July 2005; http://www.hatc.hu/editorspicks.php, www.bbc.co.uk/romanian ).
Further burden has been put on bilateral relations in autumn 2004, when a
referendum was called in Hungary on dual citizenship for Hungarians outside
Hungary’s borders. The referendum held in December and soon after the
Romanian general elections, provided ground for heated discussions both in
Hungary and in Romania. The referendum was declared invalid due to low
turnout. It nevertheless revealed a complicated anatomy of relationships
between the two countries, in connection with the grievances and envisaged
migration trends of Hungarians from Transylvania. As its representative, DUHR
officially voiced the will of the Hungarian minority to enjoy double citizenship,
thus having unrestricted access to the space and market of the European Union.
On the other hand, as a major actor of Romanian domestic politics, DUHR is
nevertheless aware that by supporting the dual citizenship it may jeopardize its
own interests in the long run: if dual citizenship is enforced, a high number of
Hungarians from Transylvania could relocate to Hungary/EU, therefore the
electoral basin of DUHR could be seriously affected and the political stakes of the
union endangered.

While it still remains an open question, there is however reason to hope that
despite these temporary setbacks, with the change of prime minister in Hungary
and a newly elected government in Romania, relations will by and large continue
to evolve in a positive, friendly manner. In early 2005, the recently appointed
Hungarian prime minister stated in the course of bilateral talks held in Budapest
that Romanian internal issues such as “regional autonomy” are to be exclusively
addressed by UDMR, the official representative of Hungarian rights in Romania.
In the course of several bilateral meetings held in 2005, both Hungarian and
Romanian prime ministers called for European “compromise solutions” to matters
of mutual interest and stated that both countries should primarily focus on a
common future and leave the cumbersome legacy of the past behind.

Migration trends in Hungary and Romania after 1 May 2004

As its living standards have been approaching the Western ones, Hungary
became an attractive target for work and residence. Moreover, the country is
considered to be a “tampon zone”, an interface between the rich West and poor
East. The Hungarian minority from Transylvania is the main pole of migrants
from Romania to Hungary.

177
In this regard, Endre Sik, director of the International Center for Research on
Migration and Refugees argues that “with the exception of ethnic Hungarians
from neighbouring countries, almost no one else speaks Hungarian and this is a
sort of natural system of defense against economic migration”
(http://www.bbc.co.uk/romanian/news/story/2005/05/050530_traile
r_arena_dunare.shtml). The presence of Hungarian minority in general and
the Hungarian minority from Romania in particular, in the overall migration
towards Hungary is quite obvious if we consider the data disclosed by the Office
of Immigration and Nationality of the Hungarian Ministry of Interior in respect to
2003. The number of foreigners having immigration permit to Hungary by 31
December 2003 was nearly 100 000. Nearly 60% of these permits (exactly
57 847) was issued to Romanian citizens (Király András, ‘Migration problems and
minority rights in Europe’, Government Office for Hungarian Minorities
Abroad,http://www.goethe.de/ms/buk/archiv/material/Migration/KiralyTheHunga
rianapproachFinal.doc). Mr. Egyed Zoltan, director of the Immigration Office of
the Ministry for Domestic Affairs argues that 48 000 applications for residence
visas were handed in only in 2004. Three quarters of these applications were also
in connection to getting a work permit (BBC Romanian,
http://www.bbc.co.uk/romanian/news/story/2005/05/050530_trailer
_arena_dunare.shtml).

As EU member, Hungary became in 2004 gateways to the world’s largest

economic market and the rise in illegal migration on its eastern border was
inevitable. For this reason, the European Union had thought reasonable to
introduce careful and strict regimes for entering its territory to filter out
‘unwanted guests’ already from November 2003. Thus, as a preliminary step
towards its integration in the EU in May 2004, Hungary adopted the Schengen
border regulations in regard to Romanian citizens. Before this date, Romanian
citizens could renew every month their staying in Hungary, fact which led to an
exodus of Romanians seeking work and residence abroad, often through illegal
means. Since November 2003, Romanian citizens are allowed to spend without a
visa 90 days in 6 months on the territory of Hungary.
Given the large Hungarian minority from Romania, the adoption of the EU border
regulations created new challenges to be met. How could Hungary comply with
the strict EU regulations concerning access to the EU territory and simultaneously
follow its own priorities regarding the flux of Hungarians in and out of Hungary
(Király András, ‘Migration problems and minority rights in Europe’, Government
Office for Hungarian Minorities Abroad,
http://www.goethe.de/ms/buk/archiv/material/Migration/KiralyTheHungarianapp
roachFinal.doc)? Hungarian minorities from abroad regard Hungary as their kin-
state and are in favour of enjoying more subsequent privileges. On the other
hand, as an EU member, Hungary has to enforce strict border regulations against

178
illegal migration, which can often conflict with its identity-preserving policies
towards Hungarians abroad.

The effects of enforcing the EU border regulations could be experienced without

delay. The provisions mainly aimed at cutting down the number of illegal
immigrants to Hungary and other EU countries by initiating more thorough
control of passengers at the border, closer examination of the valid visas, a
better tracking down system at the Romanian-Hungarian border control points.
In fact, once Romania would reach full EU membership, it will become itself a
“tampon zone” between the farther east and the west of the continent and will
have to deal with the same frontier issues as Hungary at present. (Judit Juhász,
“Hungary: Transit Country Between East and West”, at:
http://www.migrationinformation.org/Profiles/display.cfm?id=181). On the
other hand, these regulations made it harder for Hungarians outside
Hungary to keep contacts with relatives and friends inside Hungary, as the
number and duration of visits became more limited. In the long run, the
newly enforced measures could entail some psychological effects of those
ethnic Hungarians who feel that the door of possibilities is being closed in
their face.

Consequently, Hungary made attempts to further shape its migration policy

along the lines of EU requirements as an international obligation but at the same
time not to destroy the network of manifold relations with Hungarians living
outside its borders. For instance, in order to counterbalance the failure of the
referendum on double citizenship, the Hungarian state introduced, effective from
March 2005, “national visas” for citizens from neighboring countries, i.e. multiple
entry visas for a period of 5 years. These visas are intended to help preserve the
identity of ethnic Hungarians beyond the borders without however, automatically
conceding to them the right to work in Hungary (BBC Romanian, 06 Ianuarie,
2005 - Published 16:46 GMT).

Enlarged regional cooperation within an European framework

Intensified programs of regional cooperation and border management have been

already envisaged by Hungary and Romania in accordance with general European
policies. As previously argued, Hungary acts as a “buffer country” between the
EU space and the non-EU countries. Its border with Romania became external
frontier of the European Union and serves as a filter to prevent illegal
immigration into the EU.

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Romania’s own capacity to ensure efficient border management is a key area of
concern for the European Union, as the country aims at full membership in the
bloc on 1 January 2007. When Romania joins the EU it will manage more than
1500 km of the enlarged Union’s external border and Brussels has interest in
making sure that Romania could fulfil this role. “It should be able to prevent the
illegal trade in goods and people, without erecting a new iron curtain between
the EU and the countries which will be left outside the enlarged Union”, explains
Jonathan Scheele, the European Commission’s chief negotiator in Bucharest
(Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-
/1/hi/world/europe/4110754.stm, Published: 2005/06/21, 15:35:19 GMT).

In addition to being able to act as a filter against illegal migrants and products
from countries such as Moldova and Ukraine towards the EU, Romania has also
the duty to make sure that its own citizens do not abuse the right to free
circulation within the Schengen space. In 2004, the border police managed to
stop more than 1.5 million Romanians from traveling to the EU, but the filter is
not perfect. One of the reasons is corruption among some border police, who is
ready to accept money in return for turning a blind eye to irregularities in the
travel papers of fellow Romanians.

The Romanian border police chief argues that this is a “particular concern” on
Romania’s western border with Hungary, now EU member. Such an incident
caused by corruption and mere incompetence took place in March 2005, when
several coaches with more than 200 Romanian citizens on board were refused
entry to Spain, motivated by lack of valid travel documents. The Arad Border
Police was found guilty, as it failed to check that passengers have valid
passports, hotel bookings, return tickets and enough money for their journey.
“Everybody is allowed to make a mistake once”, said European Commission’s
chief negotiator in Bucharest. “But it shouldn’t happen again, because it would
undermine confidence in Romania’s ability to control its border with Hungary,
hence with the EU”. Should Romania not register considerable progress at the
chapter of frontier security, its EU entry could be delayed with one year till 2008.

However, progress has gradually been made and common strategies of border
management as well as various projects of cross-border cooperation between
Hungary and Romania have been launched. According to the Trans-Border
Cooperation Program 2004, signed on 8 April 2005, the CBC program Romania-
Hungary has a budget amounting to some 5 million EUR from PHARE funds and
some 1.58 million EUR from Romania’s budget. The CBC programs incorporate
Romania’s western and Hungary’s eastern parts. The funds are mainly being
allocated for projects of infrastructure development between Romania and
Hungary, promotion of tourism and environmental protection.

180
Cooperation with Hungary in the environment field is now very efficient, and the
bilateral relations are developing at a fast pace, Hungary's Minister of
Environment and Water Miklos Persanyi said. "Environment protection has no
boundaries. No country can have a clean environment, unless its neighbour is
concerned with the same aspect. We depend on each other," the Minister added
(Mediafax, http://www.roinfocentre.be/media_news_358.asp). Moreover,
according to Magdolna Kalapati, Head of the South Great plain Regional Office of
the National Agency for Regional Development in Hungary, 18 economic
development and infrastructure projects will be financed within the framework of
the PHARE CBC program (Bucharest Daily News,
http://www.roinfocentre.be/media_news_224.asp) in the near future.

Broader forms of future cooperation between the two countries are directly
facilitated by the infrastructure projects carried out in the western part of
Romania. Building at least one motorway that could link Romania to the major
European traffic corridors is first priority for the country, given its speculated
accession date to the EU in 2007. However, it has been a much disputed and
politicized topic as to which route the motorway should cover and how should its
building be financed.

In the late ‘90s, on the occasion of the European Conference for setting the Pan-
European transport corridors, Romania took the responsibility to build up the
fourth Pan-European corridor, cutting its way from Romania’s western to the
eastern border: Arad - Timisoara - Sibiu - Rimnicu-Vilcea - Pitesti - Bucuresti,
Constanta. The project is to be financed from European structural funds,
disposed through the European Investment Bank. Its works have actually started
and some financing channels have been already activated. However, the Nastase
government (2000-2004) decided to initiate works for a new motorway, cutting
through the middle of Transilvania, from Brasov to Bors, at the expense of
continuing works for the “IV Pan-European corridor”.

This other motorway has a much better coverage of the region inhabited by
Hungarians, hence its emphasis on the political agenda of the Democratic Union
of Hungarians from Romania (DUHR). The motorway construction works were
commissioned to the American company “Bechtel”. Two main objections were
voiced in connection with this contract: apparently the project was commissioned
to Bechtel in the absence of a public tender, and at odds with the interest of
some European bidders; secondly, all construction costs are deducted from the
state budget, which poses additional burdens on the Romanian tax-payers. The
“Bechtel highway” was a constant topic of dispute in the electoral campaign of
2004. After the new government PNL-PD came into power, works have been
stopped in the first months of 2005 and only 213 million EUR (instead of 500
million EUR) construction costs have been allocated from the state budget for

181
2005.( stiri.acasa.ro, 30 May 2005, 09:59 am, „Doua variante pentru legatura
cu Occidentul”).

The incumbent government has clear-set objectives: “If Romania wants to pose
in a serious country and the current government in a credible institution, then we
need to respect certain European engagements” stated prime-minister Tariceanu
(http://www.expres.ro, 11 July 2005, „Autostrada se muta de la Cluj la Sibiu”).
At present, the works at the “IV European corridor” are given priority but the
building up of the Bechtel highway will also continue, even though at a slower
pace.

To choose the routing of the motorway linking Romania to Europe is in fact a

political decision. The topic stirred some debates within the current governing
coalition. DUHR is unmistakably in favour of the “Bechtel” project, as developing
the road system in the middle part of Transylvania, where most Hungarians live,
is a necessity. Such a motorway would directly link Hungarian communities from
there to Hungary and to EU further. Regional advantages are significant: it would
be a clear incentive for Hungarian investors to startup new trades, relocate and
intensify already existing businesses in the western part of Romania, inhabited
by their co-ethnics.

On the other hand, building up the motorway along the “IV European corridor”
has its own advantages. The connection with European traffic corridors and
international economic exchanges is anyway made through Hungary.
Additionally, it seems that Hungary itself has plans to build a motorway up to
Szeged - Nadlac, giving priority to the European corridor as well
(www.cotidianul.ro, 29 May 2005). It follows from here that this route would
connect not only the west of Romania with Hungary/EU but also the country’s
south-eastern regions. It therefore provides stronger incentives for a larger
category of European investors, interested in setting the foot in Romania,
anywhere from Transylvania to the Black Sea. In other words, building the
motorway in accordance with the IV corridor would enhance the economic
attractiveness of Romanian regions both at a regional and wider European scale.

Economic consequences of Hungary’s accession to the EU for Romania

Hungary’s integration in the EU created important economic opportunities for

Romania but also highlighted certain difficulties and threats having mainly to do
with the implementation of common European market policies.

During the period 2000-2004, Hungary’s business figures from trade with
Romania amounts to 2.113,6 million dollars. Cars, electronic devices and high
tech products are the bulk of Hungarian exports to Romania. In exchange,

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Hungary imports from its Eastern neighbour garment products and accessories,
mechanical devices, paper, furniture, etc. (www.cotidianul.ro, 23 January 2005).

An analysis regarding the regional distribution of foreign investments in Romania

in the last 14 years shows that Hungarian investments had mainly been focused
in the north-west and central part of the country. The Hungarian company MOL
has been reported as the biggest investor in the area, with some 104 million
dollars invested in the purchase of the petrol distribution company in
Cluj/Kolozsvár.
(http://webzter.ro/resurse_investitii_straine_prezentare_zonala.php). At the end
of November 2004, the export of Hungarian capital to Romania summed to 345,
08 million dollars (the real value of investments amounted to 720 – 740 million
dollars) through some 4.948 Hungarian functional companies. At the same time,
it is worth mentioning the presence of Romanian capital in Hungary, summing up
50-55 million dollars through some 6 010 companies with Romanian capital. The
largest Romanian investor is SN Petrom, with a social capital of 17 million dollars
(www.cotidianul.ro, 23 January 2005).
The increasing presence of Hungarian investments in Romania is directly related
to the low wage costs in the country. The Economist Intelligence Unit shows in a
study that wages in Romania are the lowest in the region (BBC Romanian, 30
November 2004, published 16:37 GMT). For instance, in the course of 2004,
Romanian companies spent on average 0,95 dollars for one hour of work of an
employee whereas 7,71 dollars were spent in Slovenia and 4,37 dollars in
Hungary. Even though this affects the purchasing power of Romanians, it can
also bring economic advantages to the country, the study shows.

After 2004, when Hungary entered the EU, an increasing number of European
companies which used to have their production plants in Hungary started
thinking about ‘délocalisation’, that is shifting factories and jobs to the lower-
wage economies of the non-EU members, such as Romania (“European Union
Enlargement”, April 28th 2005/ From “The Economist” print edition). Another
reason for which Western companies invest eastwards is the access to the local
market. “Romania with its 23 million inhabitants and with wage costs under 1
dollar per hour is a very attractive target. Moreover, unlike its neighbours, such
as Ukraine, the implementing of the pre-accession strategy to the EU
considerably reduced the political risks”, it is argued in the study.

Hungarian companies such as OTP, MOL and Gideon Richter had massively
invested in Romania. For instance, OTP bought the bank RoBank, MOL is now the
owner of Shell (a carburant distribution network), whereas Gideon Richter
invested in a large research and development center in Tirgu Mures, in
Transylvania. “Broader urban investments amounting to 1.2 billion USD are
expected to be achieved through the construction of urban and commercial

183
centers in the areas around Bucharest and Cluj in the next few years, as well as
the enlargement of the RoBank network and investments in
telecommunications”, stated János Halasz, director of the Romanian-Hungarian
section of the trade development agency ITDH, (www.cotidianul.ro, 23 January
2005).

Romania’s upcoming EU entry is a sound explanation why an increasing number

of Hungarian businesses expand to Romania. The number of inquiries to the
ITDH regarding investment opportunities in Romania went up by 80% last year
(Vilaggazdasag, pp.1&2; Hungary Around the Clock,
http://www.hatc.hu/editorspicks.php, 14 July 2005). Hungary is rated as the
seventh largest investor in Romania, with over 5,100 companies in the country,
of which 674 were registered last year alone. Hungarian businesses are most
active in food processing, software development and auto spare parts.
(http://www.hatc.hu/editorspicks.php). Hungarian companies are setting foot in
the Romanian market by acquisitions and/or by setting up new subsidiaries in a
bid to expand regionally, Halasz explained. This signals that many SMEs are
financially sound enough to make the jump, he noted. Moreover, as already
benefiting from EU development programs and financing schemes, a series of
Hungarian SMEs have been involved in expertise and training programs for their
Romanian homologues, in order to facilitate their integration in the European
market (http://www.hatc.hu/editorspicks.php).

After 1 May 2004, the price of basic products, especially sugar and oil, doubled in
Hungary in line with the provisions of the common European market. This led to
a massive import of sugar from the western part of Romania to Hungary. The
imports determined Hungarian sugar producers to file complaints to the
Hungarian Finance minister in Budapest asking for a solution to be worked out
against this market disequilibrium (BBC Romanian, 14 July 2004 - Published
11:02 GMT).

In exchange, following the same provisions of the common market, the wheat
overproduction registered in 2004 in the new member countries of the EU
(Hungary, Czech Republic, Poland) could pose a serious threat to the Romanian
existing stock, considered to be the most expensive in Europe – the president of
the Romanian National Association of Flour Milling and Baking Industries argues
that while a tonne of wheat produced in the EU costs around 100 EUR, Romanian
wheat is sold with 20-30 EUR more per tonne.
(http://www.expres.ro/afaceri/?news_id=182664, 29 March 2005). In order to
avoid a market collapse, the EU had to intervene by purchasing and transporting
large quantities of cereals resulted from the wheat overproduction registered in
Hungary, Poland, Czech Republic in 2004.

184
It is said that at the beginning of 2005 the European Union had the largest
stocks of cereals in the last ten years
(http://www.expres.ro/afaceri/?news_id=182664,29 March 2005). Unlike in the
EU countries where mechanisms of intervention in cases of overproduction are
enforced and made use of, the non-EU countries face a high risk of massive
imports of cereals at a very low price.

There is reason to believe that although Romania signed an agreement with the
EU based on which only 124.000 tonnes of wheat could be imported without
customs tax in 2005, the actual imports could be even higher, due to cheaper,
tax-inclusive prices (http://www.expres.ro/afaceri/?news_id=182664, 29 March
2005). At any rate, starting with 2007 – the envisaged date for Romania’s
accession to the EU- Romanian producers will not enjoy any state support or
subsidies in connection with the cereal production. Thus, they will have to enter
in direct competition with other cereal producers from the EU member countries.

However, the effects of Hungary’s accession to the EU were visible at the daily
level too. Lower prices in Romania provided an incentive for Hungarian citizens to
cross the border on a weekly basis seeking cheaper food, clothing and household
products. As a result, so-called “border supermarkets” have mushroomed after
Hungary’s accession. It was reported that the number of Hungarian citizens
crossing the eastern border with Romania doubled since 1 May 2004
(www.capital.ro, 7 April 2005). (Figure 18., 19., 20)

A short summary

After 1 May 2004, Romania has as neighbour at its Western border not only
Hungary but the European Union itself. In the last one and a half years, the
status differentiation in connection with the EU (Hungary – already EU member
and Romania – still EU candidate) had a significant and positive impact on the
bilateral relations at various levels. As an EU member, Hungary is in a position of
supporting Romania’s expected accession to the EU in 2007 and of enhancing
diverse forms of regional cooperation within an European framework.

Paradoxically, as presently left out of the common European market, Romania

became a more attractive target for European/Hungarian investors, interested in
bringing capital and expertise in a country with cheap and qualified labour force
and strong EU prospects. On the other hand, Romania could learn from
Hungary’s experience how the EU membership and the implementation of
common market policies impact the country at different levels.

185
Map 26 : European transport corridors and the concession made to Romania:
how the IV European corridor intersects Romania

186
Map 27 : The IV corridor at present: motorway with „political detour” in Banat

Map 28 : Bechtel / Transylvania highway

187
References

Balcsók István: A diplomásoktól a napszámosokig – külföldiek a „keleti végek”

munkaerőpiacán. In: Határok és határmentiség az átalakuló Közép-Európában.
Nemzetközi tudományos konferencia, 2002. szeptember 30. - október 1. Szerk.:
Süli-Zakar I. Debrecen: DE Kossuth K, 2003. 160–167. p.

KSH: A nemzetközi idegenforgalom és a turisztikai kereslet jellemzői 2004. KSH

Szolgáltatásstatisztikai főosztály Közlekedés- és Idegenforgalom-statisztika
osztálya, Budapest, 2005. 29 p. www.ksh.hu
Belügyminisztérium Bevándorlási és Állampolgársági Hivatal (BM BÁH):
Kiadványfüzet 2002-2004, http://www.bm-bah.hu/statisztikak.php

Oktatási Minisztérium: Statisztikai tájékoztató - Felsőoktatás 2003/2004.

Budapest, 2005. 311 p. www.om.hu

Magyar Nemzeti Bank: Foreign Direct Investment Hungary, 1995-2003. 100 p.

www.mnb.hu
SAR Policy Brief No. 15, August 2005
http://www.goethe.de/ms/buk/archiv/material/Migration/KiralyTheHungarianapp
roachFinal.doc).
http://www.migrationinformation.org/Profiles/display.cfm?id=181
http://news.bbc.co.uk/go/pr/fr/-/1/hi/world/europe/
http://www.hatc.hu/editorspicks.php
www.economist.com
http://www.expres.ro
stiri.acasa.ro
www.cotidianul.ro
www.capital.ro
http://www.expres.ro/afaceri/?news_id=182664
www.euractiv.ro
www.divers.ro
www.sar.ro / http://www.sar.org.ro/Policy%20memo15.pdf
www.evenimentulzilei.ro
www.adevarul.ro
http://webzter.ro/resurse_investitii_straine_prezentare_zonala.php
http://www.roinfocentre.be
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_arena_dunare.shtml)
www.gazetadecluj.ro

188
 7. ROMANIA AS EASTERN BORDER OF THE EUROPEAN UNION

Octavian Groza
Daniel Condorachi
Ionel Muntele
Alexandru Rusu
Oana Stoleriu
Georgiana Voicu
TIGRIS

7.1 Introduction

The aim of this study is to show the territorial and general features of the
Romania’s evolution in the framework of the regional and global dynamics. It
aims not only at determining the influence of the geographical location 35, but
also that of the geohistorical evolution, in defining those points of strength or
weakness which influence the possible trajectories of the Romanian territory.

Our choice is justified by the following two considerations:

a) The location of a territory is the only stable element in its socio-political and
cultural evolution. Consequently, the total inertia of the geographical position
becomes the parameter which controls the place and the role played by that
territory in a given combination of circumstances. The territory is rather the
object than the subject of the forces which manifest themselves in particular
socio-political circumstances. This corresponds to a large extent to the Romanian
case.

b) The geohistoric evolution of a territory derives directly from its geographic

position. The long term global trends tend to induce a strong inertia and force
that space to remain in a kind of geoecological niche which is hard to be
abandoned. Thus, that “in between” location or in the close proximity of a core
area imposes to the territory a extrovert behaviour, based on a continuous action
or at least on immediate responses to internal or external stimuli. On the
contrary, the location in peripheral areas or in those in contact with the great
cultural areas imposes a rather reserved behaviour, a more reflective one, with
rare moments of initiative and with long moments of inertia in front of the

35
The geographical position is considered here not only from its geo-mathemathic perspective (the location in
accordance with the absolute and relative coordinates) but also from the socio-economic and cultural one (the
location depending on the great cultural world’s area).

189
internal or external stimuli. This second case better describes the evolution of the
Romanian territory.

These considerations generate a series of questions related to the Romanian

integration in the European Union and to the impact of this process upon the
neighbourhood policy:
- What is the specific of the geographical position of Romania in the context of
the past, present or future dynamics of the world’s driving forces?
- What is the specific of the geohistorical evolution of Romania and what are the
past, present and future consequences on its geopolitical behaviour?
- What are the forces that influence the territorial dynamic of Romania and what
are the probable consequences of these forces?
- What are the important spatial scales for the study and understanding of these
forces?

The first part of our research proposes a qualitative approach, followed by a

evolution in the second part.

7.2 General Assumptions

Our study is based on a series of assumptions considered to have a certain level

of certainty. These assumptions set up the theoretical background of the
research and they constitute working hypotheses.

7.2.1. The modern Romanian territory is much more an object than

a subject of the history

The modern evolution of Romania makes plausible the location of this state in a
entre-deux space, a concept developed by professor Violette Rey of École
Normale Supérieure LSH in Lyon: “…I understand this concept of d’entre deux
space, as a space in which the external forces, being in competition, counts more
that the internal forces in the process of constructing the territorial architecture,
and in which the time stands under the sign of the adversity and of a eternal new
beginning” (Rey, 2001, p.241). This concept is illustrated mostly evidently in the
cases of Romania and Poland, two countries which were shaped and reshaped
ceaselessly on long periods by external forces.

The emergence and evolution of Romania were two historical processes strongly
tributary to the main features of the European geostrategic scene in the past two
centuries. The political and divergent interests of the Great Empires (Russian,
Ottoman, Austrian-Hungarian) and then, that of the modern states (France,

190
Great Britain, Germany, Russia, Hungary, Turkey) exerted extraordinary strong
pressures over Romania. These pressures materialized especially through losses
and regains of territory in a context of a relative diplomatic “isolation” on the
European ground. Besides, the significant demographic size and the great
surface of Romania, compared to the neighbours’, have enhanced the regional
ambitions of Romania which politically and military took a part in the evolutions
of Central Europe and the Balkans (military interventions in the Balkan wars,
containment of the bolshevik revolution from Hungary, the alliance with Germany
against Soviet Union). This regional role, encouraged by the Great powers, led
Romania to the idea that it had to strengthen its position as a regional leader
(visible after 1989) and to find a political niche in the interstitial spaces between
the Great Powers. This fact came into sight during the communist period (the
relative independence towards Moscow, the keeping of relations with Israel, the
exportation of the socialist revolution towards the Third World) and goes in the
present time.

To be not only a political object shaped by the global forces but also a political
subject limited in action to just some peripheral zones had some very important
consequences:
- Long lasting conflictual relations with neighbour countries.
- The establishment of the very flexible, unstable and full of distrust political
relationships with the Great Western (Western Europe) and Eastern (Russia)
powers.
- The conception of an external policy based on the increase of the political
influence in Eastern and South-Eastern Europe and on efforts to turn itself into a
buffer-space between the Great World Powers.

7.2.2. The Romanian territory experiences the implementation of a

repeated modernity never ended

The unification of the three principalities (Moldavia and Valahia in 1859 and
Transylvania in 1918) brought on the European scene an important state in
terms of surface and number of inhabitants, enjoying a very important geo-
strategic position in the European context of the end of 19th century and of the
beginning of the 20th century. This state was formed by three historical regions
with their own different legacies connected to different cultural areas: the Central
European one (Translvania), Eastern and Balkan ones (Moldavia and Valahia).
These huge internal fractures proved dangerous in the political context of the
past 150 years. The Romanian government found a solution, a normal one for
that period, with a rapid and aggressive construction of a Romanian national
identity and with an immediate import of modern Western European institutions
and values.

191
The creation of this national identity was built on European norms, between
1850-1950, with the exacerbation of an ethnic nationalism at the expense of a
civic patriotism. Formed in a very rapid way, the Romanian national identity was
confiscated by the communist regime and reinforced by the national communist
identity. The extreme ideological manipulation and the cultural isolation, between
1950 and 1990, had two main consequences: the national identity underwent a
decrease of its content and the alterity was impossible to be invented.

The importation of western institutions and values was rapid. This led much more
to imitation than to a real appropriation. The modern institutions (the state, the
political parties, the Parliament) and the bourgeois values (art, fashion,
architecture, social behaviors) were transplanted in a space characterized by an
agrarian economy and a rural way of living (at the beginning of the 20th century
over 80% of the population lived in villages). But the emergency of the
construction of the national union has legitimated this fact. Moreover, it has even
encouraged it (in arts and especially in literature was proposed for example the
forms without content theory, which invited or even lured the artist to imitate the
West, hoping that they will built a know-how which led finally to original
creations). Even in these extreme and precarious conditions, the western
modernity started to flourish: the democratic institutions started to work, the
economy began to move toward industrialization and fine arts gave signs of
originality. But the experience was suddenly interrupted by the inclusion of
Romania in Moscow’s sphere of influence and by the importation of socialist
modernity, which completely destroyed the incipient western European
structures. Archipelago of places which took part to that western modernity
(industrial regions in formation, urban regional networks which evolved naturally
towards an urban and unitary system, the intellectual cores) was brutally
replaced by the monolithic and standardized structure of a communist modernity.
The failure of this model became obvious after 1990. It made possible the return
of the post war one.

This evolution of the modern elements places Romania in an entre-deux space

and has a series of important consequences:
- The confirmation of the territorial and institutional inertia in front of the
changes because of a succession of repeated starts and unexpected and
uselessly repeated stops.
- The increasing risk of a superficial imitation of institutions and values imposed
from the outside together with the undercover upholding of some conservatory
and profound dimensions of the cultural local/regional structures.
- The burdening of the invention of alterity. This caused some difficulties of
communication with the outside at individual or collective level. It made more
difficult the regularization the relationships with neighbour countries and the

192
implementation of some policies promoted by the European Union (i.e. the self-
governance of the national minorities).
- The emphasis of the regional cleavages in the inner country (between
cosmopolitan and ethnically “pure” regions, between the more extroverted and
those conservative ones, etc.).

7.2.3. The Romanian territory is a space of invention and of

promoting of negotiating territorial techniques
The entre-deux position, extremely uncomfortable and burdened by visible
negative dimensions in the context of modernity, reveals itself more and more as
an advantage in the conditions of postmodernity. The flexibility, not only of the
production techniques, the permeability of the frontiers, the growth of the human
mobility, but also of the capital and of information, all these are phenomena
which transform, reduce very much or even annihilate the great structures of the
Western modernity. The fact that in Romania, these structures of the industrial
age did not have the time to imprint themselves profoundly in the territory, sets
free the assumption according to which its territory is a space in which territorial
techniques of negotiation, able to combine the inertia of the territorial structures
with the acceleration of the conjunctive structures, can be invented freely. The
inter-ethnic relationships, the rural-urban, regional-national, regional-
international, emigration-immigration, foreign and national policy are many
processes and phenomena which seem to find original solutions in Romania. This
idea will be more deeply demonstrated in the second version of our study case.

7.3 L'entre deux: Romania between West and East

The construction of the Romanian modern territory is the clear expression of

external forces’ action. The initial nucleus, the United Principality, was formed in
1859 with the support of France, in the context of a powerful territorial
compression coming from the neighbour Empires (figure 1). The subsequent
territorial losses or enlargements were also placed under the same sign of such
external factors, that all the internal political and social projects had to take into
consideration.

193
 Map 29 : The Romanian territory between 1850 and 1900

The historical evolution of the Romanian territory did not show only violence. The
profound dynamics of this entre-deux space put into contact, for a long time,
different cultural areas (figure 2), with consequences of an extraordinary
importance. At the peripheries of the ethnic areas, the populations melt
continuously, forming mosaic belts which allowed the occurrence of alterity and
the peaceful and profitable coexistence of the inhabitants. Transylvania,
especially south-western Romania (the Banat region) shows this kind of spaces,
because the historical accidents which troubled Western Europe were unknown
here (religious wars, for example).

At more fine and individual levels, cultural convergences came to reality as

common structures which held myths, popular believes, similar gastronomies and
music, close styles of living, etc.

The setting up of the modern eastern states (1850-1920) caused the coming out
of the national frontiers and the emergence of different national projects,
founded on the Western European modernity pattern. The result was successful
became very sensible in the places mostly closed to the core, that is Western
Europe. Progressively, Romania found itself at the periphery of the European
space and entered, as it was expected, the Russian area of influence, asserted at

194
the end of the Second World War and laid down by theYalta Conference between
the victorious powers.

Map 30 : Romania as cultural interface

The stopping of the west European modernity and its replacement by of the
soviet one hurled the country into another periphery, that of Moscow. From
Moscow towards the West, Romania was yet the most modern state, an obvious
expression of the initial cultural western choice. This advantage which could have
been transformed in a structure of resistance against of the soviet model was
annihilated in 1965, when the process of getting out from the soviet influence,
decided by the president Ceauşescu, became the beginning of a “modernity” in
an original Romanian style. The complete failure of the latter left Romania
weakened and bewildered after the outbreak of the communist coalition.

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The geographical analysis of the current situation shows that Romania lies it into
the core of the potential relational field between East and West, in an entre-deux
position, which would be qualified as the centre of the Euro-Asian peripheries.

Map 31 : Romania in the core of the Euro-Asian peripheries

From a demographic point of view, Romania stands at the crossroads of forces

generated by the great amounts of population in the Central Europe, in Turkey
and in Western CIS (Moscow/ Saint Petersburg, western part of Ukraine).
Described by the interaction potential between the populations localized in the
cities with more than 50,000 of inhabitants, these fields of forces represent, in
fact, potential waves established between the three great demographic

196
ensembles. In this case, Romania’s position would be a privileged one, because it
potentially controls the major part of these waves. Unfortunately, the breaking
up of the analysis through the introduction of the urban GDP, demonstrates that
the force of attraction of the demographic ensembles decreases dramatically,
except that of the Central-European. The situation would have been clearer, if
the huge potential from the Pentagon had been taken into consideration. In the
absence of the valorisation of its interface position, nothing remains to Romania
but a single solution, namely that of asserting vehemently its position towards
West, hoping that the economic welfare state of Russia, Ukraine and Turkey will
considerably improve in the recent future.

Map 32 : The western tropism of the post-communist Romania

197
Romania’s orientation towards West became obvious immediately after the
collapse of the communist system in December 1989 (figure 4). In 1983, the
external trade of the country was dominated by the COMECOM (83.6% from
imports and 63.6% from exports). In 2004, the European Union provided 62.7%
of Romanian imports and attracted 67.1% of Romanian exports. COMECOM
(inclusively the former Soviet space and former Republic of Yugoslavia) does not
hold more than 20.4% and respectively 10.6%. The same assumption is also
valid for air and earthly transports, tourism, intercultural exchanges, investments
and the infrastructure projects.

The oscillation between East and West, resulting from national decisions but
strongly influenced from the exterior, seems to come off, once again, at the
expense of the East. What does the instability of Romania’s trajectories mean?

7.3.1. Political consequences

Romania’s status as an entre-deux space compelled the involved parts to make

difficult decisions and had depraved political consequences during its entire
modern history. The western traditional allies had been many times obliged to
betray Romania, if only through indifference (the Dictate of Vienna and the loss
of Transylvania, the Yalta Conference). As well, Romania was forced to betray its
allies, either chosen or imposed ones (Romanians turning back their arms
against Wermacht’s soldiers, who were allies between 1941 and 1944; growing
hostility towards Soviet Union). Such instability of the choices raised a wall of
distrust between Romania and Euro-Asiatic states.

What kind of influence had this state of being after 1989? What will be the future
behaviour of Romania? These are important questions in the context of the near
accession of Romania to the European Union.

7.3.1.1. The long way of the European Union to Romania (and

vice-versa)

The misunderstanding of Romania’s profound problems, the abominable mass-

media manipulation in the December 1989 revolution and then the image of
Romania in general, made the European Union extremely reserved concerning
the wish and capacity of Romania to join it. The countless destructions provoked
by the 40 years of communism and by the so-called Romanian “modernity”
promoted by the Ceauşescu’s regime, overlapped the incomplete adoption of the

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western modernity during the inter-war period and offered less chances of rapid
economic recovery.

Moreover, the political renewal after 1989 was made only at the ideological level,
in a superficial way, because the politicians were in fact former activists of the
secondary echelon of the Communist Party. The creation of the “historical
parties” (which existed before the installation of the communist regime),
respectively the National Peasant Party and the National Liberal Party, was rapid
but inconsistent and immediately discredited by the power which was controlled
by the former communists (the National Salvation Democratic Front, transformed
later in a Social-Democrat Party of Romania and then in the present Social-
Democrat Party).

Under these circumstances, the transformations imposed by the new regime

(privatisation, restructuring, construction of the democratic institutions and of
the market economy) generating social instability, were, at the beginning, less
promoted by the non-communist political power, eager to consolidate their
position by promoting some demagogical policies in order to guarantee the
popular support.

The refusal manifested by the European Union in the first years after 1989 did
nothing but to enhance these tendencies and to induce an acute feeling of
frustration and isolation among the Romanian population. This fact (the
emergence of a negative image of the European Union because of errors of
communication) must be kept in mind by the officials from Brussels with view to
the enlargement process.

It is not an astonishing fact that, in terms of foreign policy, Romania found its
whereabouts, initially, towards Russia, with which the president Iliescu signed in
1991, just before the implosion of the ex-Soviet Union, the first international
post-communist treaty. Immediately after that, in the period when the former
Soviet Republics regained their independence, in spite of a popular unfavourable
opinion, Romania hurried to recognize the independence of the Moldavian
Republic. It can be interpreted as a gesture to guarantee its security on its
Eastern flank. But this fact made difficult an eventual union with the Moldavian
Republic with Romania, by complicating the situation along the future eastern
border of the European Union. The connections/relations established afterwards
with Ukraine in order to control the armed conflict between Moldavian Republic
and Transnistria completed what could be considered as the first international
political axis of the post-communist Romania.

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 Map 33 : The search of an international affirmation and national security

The classical threat represented by Russia, stiff deeply in the unconsciousness of

the Romanians, caused this political behaviour, but also permitted a very active
and ardent searching of an ally, so as to counteract the eventual hostile actions
of Moscow. Thus, all these efforts were directed towards the integration in NATO,
which manifested a clear tendency of extension to the East. The popular
adhesion to this project was larger and more obvious than that to the European
Union, whose image remained confused and who seemed to raise conditions for a
doubtful and distant result. In other respects, the population has always been
disturbed by a visible overlapping between the two organizations (NATO =
European Union type). Thus, although the negotiations with EU had almost
started, the emergency of the national security issue made that president
Constantinescu explicitly closer to the foreign policy of the United States of
America than that of the European Union. The proof is the
authorization/agreement of for the passage of American aircrafts, over the
Romanian territory, which dive-bombed the Serbian territory, despite of the
opposition of Brussels. In addition, the opacity and uncertainty proved by the
European Union about the future of the country broke out the slight desires of
regional leader of Romania and allowed president Constantinescu to give priority
to the Bucharest-Ankara-Tel Aviv political axis, which signified less a movement
towards Turkey or Israel than a rapprochement with USA.

A second element appears which must be taken into account by the European
Union in its relations with the neighbours, even without a continuation of the
enlargement process: as long as EU cannot offer itself security guaranties, it
must pay more attention to the national priorities of the neighbour countries.

200
The return to power in 2000 of the president Iliescu and of the Social-Democratic
Party brought an equilibrium in the priorities between NATO (in fact the USA)
and the European Union. Despite all these facts, Romania (and Poland, in a
similar entre-deux situation) decided to move closer to the positions of the
United States, supporting them in the Iraki conflict, sending also troops, in spite
of the protests of Brussels. In this context, a declaration of the European Union,
according to which Bulgaria could access to the Union before Romania,
sharpened the tensions between the two candidate countries and generated an
unhealthy competition between Romanians and Bulgarians. In order to limit
these tensions, the Prime ministers of both countries decided to set out an
official tandem: together inside or outside the EU.

We can highlight here another idea. The strategy promoted by the European
Union of creating a competition between the different candidate states can
generate popular undesirable attitudes and can reactivate older conflicts (as it
happened between Czech Republic and Slovakia, between Slovakia and Hungary,
between Hungary and Romania, etc….).

The official accession to NATO and the end of the negotiations with the European
Union (2004) let the president Băsescu, and the centre-right alliance who
reached the power, enjoy a calmer foreign policy. In spite of this, the small
blackmail related to the Unites States offered a new mean to answer to the
pressures exerted by Brussels: in December 2004, the president Băsescu
indicated that the essential axis of the Romanian foreign policy was between
Bucharest, London and Washington. His speech was more temperate during his
visit to Paris in November 2005, where he indicated another possible axis,
between Bucharest, Berlin and Paris…But just on the 6th of December, the
American United States secretary, Condoleezza Rice, coming from Poland where
she had done the same thing, was signing at Bucharest the agreement through
which Romania accepted the presence of American military base on its territory.

This fact did not generate objections from Brussels, but Moscow strongly reacted,
declaring however that “…it won’t get even to another cold war”. For Romania,
this fact means the growth of the tensions with Russia. Romania had already
begun to be bitterer since Russia cut its electric energy supplies to the Moldavian
Republic, and its pro-European views became stronger and stronger. Romania
replied and immediately cancelled a project of connection of its own electrical
networks with that of Moldova in order to supply its neighbour with Romanian
electricity, a fact that couldn’t be accepted too easily by Russia, especially since
the president Băsescu, being into visit through Georgia, declared that Moscow
wanted to turn the Black Sea into a Russian lake.

201
The affirmation of this obvious pro west attitude and that of a moderate critical
attitude towards Russia reveals that Romania engaged with all its confidence in
the refoundation of the Western European values and that it expected it to be a
way with no return.

7.3.2. Territorial consequences

The functioning of entre-deux spaces points out a series of processes and

phenomena hard to find in other places. Forced to evolve in a context of unstable
equilibrium, to lead or to be led by circumstantial tropisms, these spaces tend to
become spaces of discovering of some structures and resisting behaviours,
incorporated in the territorial architectures by which they to mould them in a
subtle way. The specific of the migratory phenomenon from the Central and
Eastern Europe is just an example in this sense.

The collapse of the communist regime and then the process of the European
Union enlargement increased the fear of a massive invasion of the Eastern
Europeans in the Western Europe. This fact did not happen or, if it happened,
was just a circumstance and was due to some unpredictable causes (the shock
therapy in the economy of Poland, the conflicts in the Western Balkans). Just
after a couple of years, the migration flows to the EU decreased significantly (in
favour of other destinations such as USA, Canada, New Zealand and Australia),
replaced by circulatory migrations characterized by the recurrence or the
periodical leaving of the migrant. What is more interesting is the fact that the
phenomenon started to develop also between the CEE countries and those from
the former soviet space (Ukrainians in Poland, Moldavians and Ukrainians in
Romania, Russians - of Bulgarian origin - in Bulgaria…). Another fear of the
Occident was the fact that the Eastern countries could become large gateways to
the European Union for the poor populations coming from Africa and Asia.
Neither this fact became a reality, although there is a transit flow of illegal
migrants through the territories of the CEE countries. More important are the
definitive migrations from Asia (and to a lesser extent from Africa) to the new
member or candidate countries. Thus, the Czech Republic, Hungary, Poland,
Bulgaria and Romania tend to become destination countries for the migrants
from who come from Eastern Asia (especially China) or from the Middle East
(figure 6). These migrants have established or opened some sort of business in
the CEE countries and they are getting more and more integrated in their new
country of residence.

202
 Map 34 : Migrations and welfare gradient in Central-east Europe

This confirms the fact that the Central and East European space presents dual
features. It functions in the same time as a periphery, as well as a core area. Out
of the classical nucleus’ proximity, that is the European Union, the explanation
can also derive from the particular territorial organization of the states
concerned, due to their geographical position and their geohistorical evolution.
Thus, the study of the Central and East European countries sets off a certain type
of territorial and curious regularity and namely a double gradient of development
(of modernity?), at the national and infranational level. In other words, the
parameters of the gradient decreases from west to east, not only from a country
to another, but also inside the country, from the western regions to the eastern
ones (figure 6). From state to state, the decrease of the welfare level can be
explained by the increase of the distance from the generating and promoting
centre of modernity. At the infranational level, things seem to be not that simple.

In the first case, the functioning of the state institutions proves to be an explicit
and satisfactory factor. All the modern states in Central and Eastern Europe are
recently born states, of which the actual territorial shape was an outcome of the
First World War. The replacement of the imperial or royal structures by modern
state was achieved in a short period of time. The quality and depth of such a
shift was directly proportional to the distance from the emitting centres of the
west-European modernity and inversely proportional the distance from Eurasian
centres of power.

At the infra-national level the explanation can not be the same. The great
distance from the European West and the decisive influence of the Ottoman

203
Empire, or that of the Russian Empire, can maybe explain the situation of regions
located in eastern Poland and southern Romanian. But it can not explain the
differences between Bohemia and Moravia or those between the east and west of
Hungary. To find out the explanations for the differences between regions
situated on opposite sides of the borders between Austria and Hungary, Germany
and Poland, Hungary and Romania, is difficult as well.

We believe that, if an explicative general structure exists for these inter-regional

differentiations, it stands in the modernity spatial diffusion mechanisms. By this
time, there is no rapid diffusion through the “export” or “import” of official
elements of modernity (such as institutions, laws, activities), but a slow
diffusion, over the centuries, of the behaviours, traditions and individual
attitudes. This spreading, from near to near, created a long run continuous field
of inter-relationships across Central and Eastern Europe. These networks of
relationships were cut off by the borders of modern states, much more
impermeable than those of the former empires and kingdoms.

The diffusion of the modern demographic behaviours in Romania (figure 7)

illustrates this process of construction of some extremely powerful territorial
structures, which withstood even to the brutal interventions of the communism.
The entrepreneurial spirit, the private initiative, the spatial and professional
mobility or the opening to novelty, are basic features of the modern behaviours,
which preserved better in the western regions and were the first which reacted to
the transformation of the regime after 1989.

The map 36 shows the spatial diffusion of the automobile after the fall of the
communist regime. The differences of behaviour between western and eastern
parts of Romania can not be put on the reckoning of the economic pre-existent
discrepancies (Transylvania has always been perceived as the richest one).

To have an offer, first of all, a supply must exist. The Western part of Romania
reacted more rapidly to the new economic stimuli. The process of economic
privatisation was also made faster. The private initiative developed earlier and
the recapitalization of the economy started as early as possible. The existence
and rapid increase of some small financial capitals allowed the development of a
second-hand automobile offer, imported from Western Europe by small firms, by
private persons or illegal speculating networks. The legal system spread
afterwards to the eastern and southern parts of Romania, up to the present the
automobile market being one of the most dynamic from the national economy
(250,000 new cars sold in 2005 with 50% more than in 2004).

204
Map 35 : The West-East diffusion of the demographic transition in Romania

Map 36 : Spatial diffusion of the automobile in postcommunist Romania

205
The functioning of these resisting territorial structures, slowly developed at the
infra-national levels, is also boosted in present times by the macro-dynamics of
the global economy (figure 9). In search of rapid profits and in the circumstances
of an international hardening of the competition, the foreign direct investments
revealed a different spatial strategy depending on the comparative advantages
offered various regions in the world.

The diminishing of the state’s power in negotiations with great international firms
grants to them a large freedom of movement, without any consideration to the
programmes of regional (well balanced) development set up by the
governments. Thus, expensive national programmes (the technopole programme
in Hungary) or attractive legislative packages (the disadvantageous zones/areas
from Romania) are ignored by FDI, which follow their own interests, leading to
the emphasizing of regional differentiations. Thus, the spatial dynamic of FDI
does not make anything but to strengthen the remarked West-East gradient at
the continental scale, not only at the state’s level (through the preferential
orientation of the capital towards the core proximal countries), but also at of the
regional level (by the selective interest granted to the comparative or
competitive advantages) (figure 40 and table 33).

206
 Figure 40 : The territorial organization scheme in Central-east Europe

Table 33 : Distribution of FDI in Romania (1990-2004 stock)by economic

development region

Economic Number

development foreign Stock FDI Stock FDI Stock FDI

region enterprises % 000 RON % 000 USD % 000 EUR %

BUCHAREST-ILFOV 52241,0 52,3 12900737,9 49,8 7065351,8 55,5 5847657,9 55,5

WEST 11240,0 11,3 1356586,1 5,2 805856,5 6,3 666969,3 6,3

NORTH-WEST 10077,0 10,1 1521215,6 5,9 815905,4 6,4 675286,3 6,4

CENTRE 9612,0 9,6 1223037,1 4,7 626599,7 4,9 518606,9 4,9

SOUTH-EAST 5751,0 5,8 3719978,6 14,4 1317174,6 10,4 1090163,2 10,4

NORTH-EAST 4205,0 4,2 777441,1 3,0 354877,5 2,8 293715,3 2,8

SOUTH 4111,0 4,1 4000042,1 15,4 1540128,3 12,1 1274691,4 12,1

SOUTH-WEST 2614,0 2,6 415393,7 1,6 198017,2 1,6 163889,5 1,6

Total ROMANIA 99851,0 100,0 25914432,3 100,0 12723910,9 100,0 10530979,9 100,0

Source: National Bank of Romania

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The profound structure of the Central and East European territories, including
Romania, combined with the economic circumstantial dynamics of the current
period, makes the region the most relevant spatial level for analysis and the
management of the territorial evolutions.

Unfortunately in Romania, as well as in other states in the same region, the

regional level lacked a relevant official administrative organization, because of
the fears that the regional identities might put in danger the state’s unity. Under
the pressures exerted from the European Union, all the countries have rapidly set
up this regional level, but most of them, including here Romania, preferred to
consider the regions as entities without judicial personality and gave them only
the role of administrating the structural European funds.

7.3.2.1. Being/living l'entre-deux

The analysis of the FDI is just a mean of testing the assertions and hypotheses
advanced up to now. The geographical origin of the FDI (figure 10 and table 2)
emphasizes a state of being which confirms the entre-deux position of Romania.

For a long time, the distrust of the European Union towards Romania also
manifested through a limited presence of the direct investments, excepting two
notable situations: Germany and Netherlands. The promotion of the adhesion
negotiations modified this situation, nowadays the European Union providing
52.3% from the foreign capital firms and 74.3% from the FDI stock. This fact
reduced in relative terms the presence of the USA, which, between 1990 and
1993 was the most important foreign investor. The acceptance of the American
military bases of operation on the national territory was done by the power from
Bucharest hoping that the great companies from the USA will invest more,
improving thus the actual shares of only 4% from the firms and of 5.3% from
the stock volume of FDI.

On the second place of the foreign investors stands Asia, with a share majority of
the Middle East countries. In comparison with the western investors, the Asian
countries presents an inversed report of the FDI parameters: although
contributes with only 7.1% from the total volume of the investments, it covers
only 37.4% (respectively 39,581) from the foreign capital firms subscribed
between 1990 and 2005. This report means numerous investments but reduced
as volume, and can be translated in many cases through the definitive
settlement in Romania of citizens from Lebanon, Syrian Arab Republic, Irak,
Jordan, China, India. The strong relations between Romania and the Middle East
countries are described by the frequency of the TAROM company flights towards
this region (see figure 4). This situation leads the thought to the interface

208
position that the communist Romania had between the West, Israel and the Arab
world and to the perenniality of the diplomatic and economic relationships
established in that period, which can be proved as the best card from present.
The crisis of the Romanian and French journalist hostages in Irak, solutioned in
favour of them and with the help of the Romanian secret services, is an example
in this sense. The traditional markets in the Arab countries from the Middle East
and Africa, with a socialist orientation, can also constitute the trump for the
foreign companies which invest in Romania.

A notable absence on the investors’ shortlist is that of Russia, although present

in Romania in the petroleum industry, gas distribution, metallurgy... The
explanation deals with the fact that the Russian investments get through the
agency of the off-shore firms (especially from Cyprus). This so-called “shyness”
refer to Japan’s situation after the Second World War, when its investments from
the Pacific were seen with a kind of hostility by the population of those states
which had been occupied and had bore the rigours of the Japan occupation. The
historical animosities between Romania and some of its neighbours, respectively
Russia and Ukraine, launch for many times nationalist outbursts from both parts
and prevented from the establishment of some common economic and diplomatic
between the given parts.

Table 34 : Romania: geographical origin of the FDI (1990-2005 stock)

Foreign Foreign
enterprises enterprises FDI stock FDI stock
(number) (%) (000 euros) (%)
EUROPE 58246,0 55,0 9437262,3 78,0
from which EU 55349,0 52,3 8994817,6 74,3
ASIA 39581,0 37,4 859939,4 7,1
from which Middle East 31380,0 29,6 593211,8 4,9
NORTH AMERICA 5245,0 5,0 692191,5 5,7
from which USA 4195,0 4,0 645693,4 5,3
OTHER 2459,0 2,3 199829,8 1,7
OFF- SHORE 392,0 0,4 918061,7 7,6
Total ROMANIA 105923,0 100,0 12107284,7 100,0
Source: National Bank of Romania

209
 Map 37 : The origin of the FDI in Romania

The distribution of the investments in Romania favours the capital, Bucharest,

and the western regions (see table 1). Only the Bucharest municipality
concentrates almost 47% from the investment stock and 50% from the total
amount of the foreign capital firms subscribed up to year 2005.

210
 Map 38 : Distribution by county of the FDI stock

The western regions (see figure 11) derive advantage from a double advantage:
there are the most developed areas from the country besides having an
important Magyar minority represents a preferential target for the proximity
investments in the immediate neighbourhood of Hungary (see WP8.7.). The
major part of the Hungarian investments (353 millions of EUR, respectively
2.91% from the total amount) exist under the form of small but numerous firms
(5250, respectively 4.96% from the total) and tend to concentrate in those areas
in which the Magyar minority is localized, what brings up the risk of outlining
some new spatial lack of balances.

211
The eastern and southern, rural and less developed regions do not attract either
the international financial waves, or the investments of proximity, because the
neighbours are countries which were in an economic dilemma (Serbia, Bulgaria,
Republic of Moldova, Ukraine). For example, the Republic of Moldova invested
only 15 millions of EUR (0.12%) in 1992 through small firms (1.88%) and
Bulgaria 9.2 millions EUR in 584 firms.

The analysis of the FDI location after the investment stock shows the tropism
created by the comparative advantages, the major part of the investments being
attracted by the western regions and by the diagonal axis Bucharest-North-West,
with an acknowledged industrial tradition. To those latter is also added the
Constanţa county which profits from the existence of the greatest port in the
south-east of Europe, stream-lined and in directly bound with the Danube-Main-
Rhine corridor.

Because all the communist economies were de-capitalized, the main engine of
the present economic dynamics is represented by the FDI, the only ones that can
support the transformation charges of the production structures and those of the
services. The regions which take advantages from the FDI consideration are,
consequently, in a great evident advantage towards those left in shadow.

The analysis of the spatial organization of the Romanian custom and that of the
spatial intensity of the exterior trade (figure 12) confirms this fact. If the western
part of Romania has five regional customs divisions (Timişoara, Arad, Oradea,
Cluj-Napoca and Braşov), in the eastern side of the country only one appears,
centered on Iaşi municipality. This fact can be explained only through the greater
intensity of the trade activities in the regions from the western side, the eastern
border/frontier being in many parts inert. In the south, the regional customs
divisions are organized around the seaport (Constanţa), fluvial ports (Galaţi) and
around the capital (Bucharest) which tends to become a regional metropolitan
area.

The spatial organization of the customs and the intensity of the exterior trade –
symbols of some profound territorial structures – are governed consequently also
by the external forces (FDI preferences, transcontinental commercial flows,
borders opacity degree, metropolization).

212
Map 39 : Spatial patterns of the Romanian external trade

213
 7.4 Conclusion

The present stage of the research achieves a qualitative analysis of the

Romania’s geographical position and of its territorial consequences, using a
concept which seems to be adequate to the aim, respectively that of the entre-
deux. In fact, Romania is used as a pretext of this study, the latter aiming to
grasp a general pattern for those states from the close proximity peripheries.
The preliminary results of the research, which follow to be verified,
quantitatively, in the next stage, lead to the following conclusions:
- The integration into the European Union of the peripheral states from the
Eastern Europe do not increase their feeling of the national security; from here
some distinctions between the foreign policy of the Union and that of the new
state members or candidates, which seek new strategic alliances. The policy of
the “sanitary belt” seems to impose from itself: a privileged status for the
neighbour states (Ukraine, Republic of Moldova, Caucasian countries…) can bring
an extra-advantage in terms of stability at the European Union borders.
- The policy of the European Union of including new members or of creating a
new belt with a privileged status in the close proximity, must not release an
attitude of competition between these states, because their entre-deux position
keeps alive the memory of the past conflicts, and from this, the nationalist
outburst can be launched anytime.
- The entre-deux states rise problems in the integration view under a form or
another in the European Union (tensions at the frontiers, cultural differentiations,
fragility in front of some processes such as the administration of the FDI
claims/pretentions or globalisation) but it also deals with some advantages (pre-
existent diplomatic relations with sensitive spaces, the know-how necessary to
the joining of the profoundly inert structures with the circumstantial dynamics,
the keeping of the architecture and of the regional spirit).
- The states of the entre-deux represent another valid relay in the reception and
for the diffusion of the western modernity towards outside, not only at the official
level (through the rapid and coherent promotion of its values and institutions),
but also at an officious level (on long term, through the promotion from near to
near of the individual and group behaviours and attitudes based on alterity and
on the respecting of the human values).

214
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323 in Historiens et Géographes- La transition post-communiste dans les pays
d’Europe centrale et orientale, Tiré à part des numéros no 377 (janv.-févr. 2002)
et 382 (mars 2003), Paris
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p. 123-136 in Belgéo – Revue Belge de Géographie, no 1-2, 2001, Bruxelles
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Horváth (eg.) - « Regions and Cities in the Global World », Centre for Regional
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East Europe since 1990 and Perspectives of Regional Developpment : Romania as
an Example, Sudosteuropa Studies, 62, Sudosteuropa Gesellschaft, Munchen
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Reclus/La Documentation Française, Montpellier-Paris
ƒ Rey, V. (2001) – Les Europes orientales, la force des différences, pp. 241-251 in
Y. Michaud – “Université de tous les savoirs”, vol. 6 – “Qu’est-ce que la culture ?”,
Editions Odile Jacob, Paris
ƒ Rey, V. (dir., 1998) – Les territoires centre-européens. Dilemmes et Défis.
L’Europe Médiane en question, Editions La Découverte, Paris
ƒ Rey, V. (1996) – Les Europes orientales, pp. 10-45 in « Géographie Universelle »,
vol. 10, Brunet, R. et Rey, V. – Europes Orientales, Russie, Asie Centrale, Belin-
Reclus, Paris

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 8. FOCUS ON SWITZERLAND

Marco Keiner,
ETH Zurich

8.1 Introduction

In Europe and the World, Switzerland is associated with features like

• Direct democracy
• Fiscal paradise
• Neutrality
• Specific high quality products (watches, chocolate, cheese, and
manufacturing)
• Transit corridor between Western Europe and Italy, and
• The divide between its Government (the Federal Council) and its
population in regard of joining the European integration process

This text will highlight the political and economic relations between Switzerland
and the European Union and show the process and the state of the mutual
negotiations of coming together.

It is a compilation of the following official documents:

Federal Council: Integration Report 1999. Berne 2000,

http://www.europa.admin.ch/europapol/off/ri_1999/e/index.htm
Federal Council: New Foreign Policy Report of the Federal Council (Foreign Policy
Report 2000) - Presence and co-operation: Safeguarding Switzerland's
interests in an integrating world. Berne, 2000;
http://www.europa.admin.ch/europapol/off/ap/e/index.htm
Swiss Federal Chancellery: Trends and possible future issues in federal policy -
Challenges 2003-2007, Berne 2002;
http://www.admin.ch/ch/e/cf/herausforderungen/
Swiss Integration Office DFA/DEA: The Seven Bilateral Agreements Between
Switzerland and the European Union of 1999 – Report on the Agreements and
Companion Measures, with Explanations. Berne, 2002.
Swiss Integration Office DFA/DEA: Explanatory documents on Swiss European
policy; http://www.europa.admin.ch/europapol/expl/e/index.htm
Swiss Integration Office DFA/DEA: Bilateral Agreements I;
http://www.europa.admin.ch/ba/e/index.htm
Swiss Integration Office DFA/DEA: Bilateral Agreements II;
http://www.europa.admin.ch/nbv/e/index.htm

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 8.2 Development trends of the European union and Switzerland

8.2.1 Switzerland and Europe

The process of European integration has entered a new important phase. Eight
central and eastern European countries, together with Malta and Cyprus, have
joined the EU in 2004. A further two countries from eastern Europe, Bulgaria and
Rumania, and most probably Turkey as well, are set to become members at a
later date. The European Single Market has become more clearly defined with the
introduction of the common currency.

Overall, Europe is finding its way towards a state of political and economic order
that will bring it peace, stability and prosperity. Apart from the European Union
(EU), NATO remains a stabilising power factor complemented by the mechanisms
of the OSCE (Organisation for Security and Cooperation in Europe).

The EU is the most important partner of Switzerland - politically, culturally and

economically. The EU and Switzerland are founded on common fundamental
values such as democracy, regard for human rights and a constitutional state.
The EU is by far the most important trading partner of Switzerland: three-fifths
of Switzerland’s exports are sent to EU countries, while four-fifths of
Switzerland’s imports come from there.

Switzerland also has close contractual ties with the European Union. 1972 saw
the conclusion of the Free Trade Agreement (for industrial products), while seven
bilateral agreements were signed in 1999 in the areas of free movement of
persons, overland transport, air transport, agriculture, research, and technical
barriers to trade and public procurement. These bilateral agreements I came into
force on 1 June 2002. Further negotiations in nine new areas (Bilaterals II) have
been concluded on a political level on 19 May 2004.

8.2.2 Assumptions on overall future development trends

Over the last 15 to 20 years, the basic international conditions for the Swiss
economy and society but also for federal policy have radically changed.
Technological advances in transportation, in electronics and in their areas of
application such as IT and telecommunications, in the development of transport
infrastructure and the lowering of transportation costs, as well as the sustained
trend towards liberalisation, increasing international competition through the
reduction of trade and customs barriers, particularly also at regional level (EU,
NAFTA, etc.) increasingly enable companies, institutions and individuals to
extend their activities to the regional and global level. The end of the Cold War

217
and the transformation of the former planned economy state block have had a
legitimising, reinforcing and accelerating effect. These developments form the
foundation for an exceedingly manifold and complex process, which for
simplicity’s sake is referred to in this report as ‘globalisation’. Many
developments evolving today will probably not fully unfold before the first or
second decade of the 21st century, but are still fraught with considerable
uncertainties and could cause far-reaching global structural changes (new
technological system, further integration of the global economy through multi-
national enterprises, shift in the balance of global economic power, accentuation
of global environmental problems, etc.).

From Switzerland’s point of view, globalisation possibly finds its greatest

expression in the momentum of European integration. The countries of Europe
see European integration primarily as Europe’s answer to the increasingly global
challenges. In the 1990s, the EU was enlarged to include Sweden, Finland and
Austria and has been consolidated with the treaties of Maastricht, Amsterdam
and Nice. The most evident changes in recent years have been Economic and
Monetary Union with a common central bank and the highly symbolic single
currency, as well as the efforts to establish a Common Foreign and Security
Policy including a European Security and Defence Policy. The coming years will
be characterised by the structural reform of the EU and the arrival of new
Member States. The accession to the EU of eight Central and Eastern European
states together with Malta and Cyprus is set to take place in 2004. Two further
Eastern European countries (Bulgaria and Romania) and possibly Turkey should
be able to join at a later date.

The consequences of globalisation and the progressive enlargement and

consolidation of the European integration process are already evident in
Switzerland today and it can be assumed that they will continue to intensify.
Considerations on Swiss trends and future challenges are, therefore, inseparably
linked to assumptions regarding overall international conditions, while because of
the emerging cooperative global integration movement at two levels (cooperation
within and between global regions), a distinction is made between global and a
European level for practical reasons.

Developments in the international environment over the coming ten years:

• Slightly accelerating economic growth at both the global and the European
level, however, with the possibility of temporary setbacks; weaker growth
in Asia as compared to the early 1990s; initially only a slight shift in
balance of power within the global economy.
• Continuous reinforcement of global networks within or between various
companies and research institutions through alliances, mergers etc;
further increasing mobility of capital within the frame of liberalised and

218
 highly modern capital markets; sustained intensity of geographic
competition in particular between OECD countries, but also with the
emerging markets.
• Accelerating modernisation processes towards the information, knowledge
and service society, especially in OECD countries.

The central foreign policy questions and problems that Switzerland will have to
confront in the coming decade have to some extent been part of the fields of
Swiss foreign policy activities for some years already. Swiss foreign policy is
characterised by continuity and calculability. Switzerland will concern itself with
most of the existing and future international challenges. It too will be required to
reach political decisions and undertake social adjustments as a result.
Switzerland has the strength and vitality to respond to these challenges
independently. In so far as these challenges are of significance for foreign policy,
it certainly cannot claim to have ready answers to every question. But one
essential observation surely emerges: these global issues far exceed the capacity
of an individual state to respond and find solutions. If Switzerland wishes to
make any contribution to the realisation of global responses, it will only be able
to do so in close collaboration with other states. The fact that these “other
states” are, in Switzerland’s case, primarily the states of Europe is clear on the
basis of common values, traditions, convictions and interests. Self-righteousness
and absence can endanger the country's major interests.

8.2.3 Economic and Population Trends in Switzerland

In the even tougher international competition in terms of location and market

share, Switzerland appears to be in a good position judging from cross-sectional
data, but judging from longitudinal data (development trends of productivity,
investments, income, taxes, etc.) its position is less favourable. Unrestricted
access to the EU market is vital for Switzerland’s economic development.

As a result of the introduction as planned of Economic and Monetary Union in

1999 there was initially a sideways development in the exchange rate of the
Swiss franc to the Euro. From mid-2000 there was an appreciation of the Swiss
franc, which has continued and is set to put a strain on the Swiss export
economy. However, Swiss exports obtained easier access to the European single
market when the bilateral agreements came into force in June 2002, which
provides some compensation.

The assumption is that a high level of private consumption and a growth in

exports of 2.2% in the period up to 2015 will result in average economic growth
of 1.5% per annum.

219
The traditional leading sectors of the Swiss economy (chemical industry,
precision instruments and watches, banking and insurance) are expected to
maintain their competitive edge. They are the linchpins of economic prosperity.
Rationalisation and restructuring will continue in the wake of European Monetary
Union and further service industries such as banks, insurance and management
consultancies will be affected. Certain traditional industries such as mechanical
engineering and metal processing could experience a renaissance. Others are on
the threshold of technological innovations (IT, communications). In the future
there is likely to be increased demand in the health sector. It is anticipated that
jobs are more likely to be created in sectors catering to the domestic market,
which are less exposed to the pressures of international competition. The
tertiarisation of the economy will increase, not least on account of the fact that
many new occupational images in the industrial sector are taking on the
character of services as a result of the new ICT. It cannot be ruled out that
Switzerland could degenerate into a dual economy with dynamic sectors
characterised by high productivity and few available jobs and sectors with lower
productivity, which can offer employment, to a certain extent on account of state
funding mechanisms and regulations, but do so under unfavourable working
conditions.

The construction industry can keep ticking over in the event that major
government investments (Rail 2000, NRLA, national road construction) are
realised and due to essential maintenance of existing buildings. There is no
expectation of a boom as the weak development of demand in the construction
of housing (population development is the main reason here) and overcapacities
in the industrial-commercial sector are likely to continue to have a dampening
effect.

International competition in the tourism sector between the different holiday

destinations in response to the globalisation processes will remain and the
changed security situation will have an influence on visitor figures. In the
medium term further restructuring and adjustment processes in this sector can
be expected.

As a result of the increasing number of gainfully employed persons and stable

economic growth as well as the smooth operation of the labour market,
unemployment will fluctuate around the 3% mark depending on the economic
trend. Productivity will only be able to grow to about 1.5% per annum under the
same competition conditions.

The clearly discernible trend since the 1990s towards flexibilisation of the labour
market will continue. The number of invalidity cases and welfare claimants
(welfare offices) offsets this.

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Location attractiveness of Switzerland:
• Losing ground
• Unrestricted access to EU market is key

Exchange Rate:
• Franc goes from strength to strength
• Easier access to European domestic market

Economic growth:
• 1.5% pa on average up to 2015

Structural change:
• Existing market leaders remain linchpins of economic growth
• Increased pressure due to EMU
• Continuing tertiarisation of the economy
• Accentuation of dual economic structure?

Construction industry:
• Stabilisation in the event that major projects are realised

Tourism sector:
• Further restructuring

Labour market 1:
• Unemployment level to remain below 3% to 2007, then slight fall possible

Labour market 2:
• Flexibilisation to continue

8.3 The European policy of the Swiss federal council

The Swiss Federal Council approved the new Foreign Policy Report at its closed
meeting on 15 November 2000. The Report replaces the previous "White Paper
on Switzerland's Foreign Policy in the 90s" of 29 November 1993. The "Foreign
Policy Report 2000" summarises how the Federal Council shaped Switzerland's
foreign policy in the past decade and sets out its objectives and priorities for the
decade ahead.

221
In its Foreign Policy Report of 15 November 2000 the Federal Council set out its
long-term aim of taking Switzerland into the EU as well as the three
preconditions for the commencement of entry negotiations:

Firstly: Switzerland first wishes to gather experience with the seven bilateral
agreements from 1999. It wants to see how these agreements work out in
practice.

Secondly: The effects of joining the EU on central areas of Swiss statehood must
be thoroughly clarified and convincing answers found to any outstanding
questions. The Federal Council will publish a report on the pros and cons of EU
membership in the second half of this legislative period outlining the
consequences for the country’s federalism, popular rights, neutrality, system of
government organisation, finances, economic and monetary policy, agriculture,
migration policy, not to mention its foreign and defence policy.

Thirdly: There needs to be broad domestic support for the aim of EU entry.

On 4 March 2001 the people and the cantons overwhelmingly rejected the
popular initiative "Yes to Europe!". This initiative was intended to oblige the
Federal Council to open immediate negotiations on entry to the EU. Voters
heeded the Federal Council’s recommendation to reject this popular initiative
because the preconditions for the commencement of negotiations on entry to the
EU had not yet been met.

The Federal Council reaffirmed the key elements of its European policy after the
vote on 4 March 2001:
• in the short term, the implementation of the seven bilateral agreements, their
extension to the ten new EU Member States and the conclusion of the second
series of negotiations are the top priority.
• in the medium term, priority will be given to obtaining approval of the second
series of agreements by the Federal Assembly and the Swiss people and their
subsequent implementation.
• the longer-term aim of the Federal Council’s European policy is to take
Switzerland into the European Union. The Federal Council is convinced that in
the long-term Switzerland can better safeguard its interests within the EU than
outside it. Today, many problems can no longer be resolved through the lone
actions of individual states, but only in acting together at European level.

8.4 Stages of swiss european policy

222
Switzerland has consistently adopted a European policy aimed at closer
cooperation with the other nations of Western Europe. At each step it has been
careful to ensure that this policy is firmly anchored in public law and
intergovernmental agreements. It nonetheless followed the development of
European integration in the supranational framework of the European Community
(EC) with scepticism, preferring a European free trade area, as indeed did the
United Kingdom. The European Community (EC), the objective of which was to
reconcile the belligerents of the two world wars, in particular France and
Germany, and to prevent any further outbreak of conflict between participating
countries, was created without any thought being given to Swiss participation.
And indeed Switzerland had never seriously considered joining, nor had its
membership been sought by the EEC member nations. Quite the opposite in fact,
since the demand for association which Switzerland eventually presented in 1962
was put in a bottom drawer due to the influence exerted by the French President
Charles de Gaulle. Switzerland thus ran the risk of being cut off by customs
barriers from its principal trading partner, Germany. This problem was not
overcome until Switzerland signed a free trade agreement with the EC in 1972.
Although the United Kingdom joined the Community in 1973, seven years of
stagnation in the process of European integration made it possible for
Switzerland to just coast along without feeling any real pressure to negotiate.

However the conclusion in 1985 of the Single European Act and the effective
creation of the single market with the four freedoms (freedom of movement of
persons, goods, services and capital) that resulted from this, forced Switzerland
and the other countries of the European Free Trade Association (EFTA) to
reconsider their position, eventually leading at the end of the 1980s to
negotiations for the creation of a European Economic Area (EEA) based on the
same four freedoms. Ultimately however the limited objectives which the EFTA
states had set for themselves in these negotiations were overtaken by a number
of major events that reshaped the world: the fall of the Berlin Wall, the collapse
of the Soviet Union, and the superpowers' renunciation of their Cold War
commitments in Germany and Europe. It became clear to all the states of the
"old continent" that henceforth they must themselves accept responsibility for
peace and prosperity in Europe, for indeed there was no other choice. The vast
majority of EFTA countries (Austria, Finland, Sweden, Norway and Switzerland)
consequently decided to apply for membership in the European Union.
Switzerland suspended its application in 1992, after the Swiss electorate rejected
the government's proposal to join the EEA.

In Switzerland's case relations with the EU were eventually to be given a new

lease of life by the decision to seek sector-by-sector bilateral agreements. After
lengthy negotiations, seven such agreements were signed with the EU in 1999.
These were approved by a large majority of the electorate in the referendum of

223
May 2000. The agreements came into force on 1 June 2002. Further bilateral
negotiations between Switzerland and the European Union on ten new areas are
also in course since June 2002.

8.4.1 First Stage: from the end of World War II to the foundation of
EFTA

At the end of the Second World War, there was great need for political and
economic unity in Europe. Switzerland however did not feel tempted to
participate in the West European integration process, for her economy was
flourishing and the policy of neutrality had proven its worth. Its leaders therefore
decided against joining the European Council at the time of its creation in 1949
as the first step towards a federation of European states. It was not until the
Treaty of Rome did found the European Economic Community in 1957 that her
hesitation about joining the European Council was finally overcome. The
Confederation became a member of the European Council in May 1963.

An event of singular importance to the Swiss economy occurred in 1960 with the
creation of the European Free Trade Association, EFTA. When France opposed the
idea of extending the six-member EEC, the United Kingdom, Denmark, Norway,
Sweden, Austria, Portugal and Switzerland decided it was time to get together to
defend their economic interests and create a free trade area of their own. Some
of these nations, the UK and Denmark in particular, saw it as a transitional step.
Switzerland on the other hand had its eye on a free trade agreement with the
EEC. Thus it was that in the Sixties, Switzerland laid the foundations of a policy
based on step-by-step pragmatism in the context of bilateral negotiations. The
coordination instrument of this pragmatic policy would be the Integration Office
DFA/DEA, created in 1961.

8.4.2 Second Stage: from the free trade agreement to the Single
European Act

In 1972, Switzerland achieved one of her goals in the form of a free trade
agreement (FTA) with the EEC. While ensuring that Switzerland would not be left
entirely out of the EC integration process, this agreement did not require
relinquishing any sovereignty, and also left it open for the Swiss to negotiate
additional trade agreements. The only institution the partners had in common
was the Joint Committee, which was not however endowed with any
supranational powers. This arrangement allowed Switzerland to keep intact its
neutrality, federalism and direct democracy. The FTA allowed plenty of scope for
new agreements. Over the next 20 years, Switzerland took full advantage of this

224
leeway, concluding well over 100 special bilateral treaties with the EC. Most of
these involved trade in goods. The two sides did have talks on other key policy
areas however, such as transport, the environment, research and development.
And they reached several understandings in these areas too. The participation of
Switzerland in the Community's efforts to co-ordinate standardisation is also
worth mentioning in this context.

This sector-by-sector approach, at the level of bilateral negotiations, was seen as

the most viable solution over the long term. It was thanks to the success of this
approach, in the atmosphere of economic and political crisis that prevailed within
the EEC at the beginning of the 80s, that there would be no need for serious
discussion on the "Europe question" in Switzerland for many years to come.
Despite intensification of the West European unification process, culminating in
the Single European Act (SEA) of 1986, this state of affairs continued in
Switzerland.

It was only with the Swiss people's decision not to become a member of the
United Nations that same year that doubts began to set in, being first expressed
in the French-speaking cantons of western Switzerland, fearful of the country's
increasing isolation. But concern was also spreading in the rest of the country,
which was as much worried by the prospect of economic discrimination as by
political isolation. This resulted in a more active policy on Europe, and efforts to
ensure the compatibility of all new Swiss legislation with the laws of the EC (the
so-called Acquis Communautaire), which began in May 1988. In August of the
same year, the Federal Council published its first major report on Europe,
entitled "Switzerland's position on the European integration process". In this
document, while advocating an integration policy based on sector-by-sector
negotiations, the Federal Council recognised that times had changed, and
admitted for the first time that full EC membership should not be categorically
ruled out.

8.4.3 Third Stage: Switzerland seeks its place in the Europe of the
21st century

In January 1989, Jacques Delors who was still President of the European
Commission, presented his EEA project to the European Parliament in
Strasbourg. Switzerland's dream of a "golden mean" solution seemed to be
coming true, for the EEA would require neither a common policy with regard to
third countries, nor a common economic and monetary policy. Moreover, there
would be little need to adapt Swiss legislation. Switzerland was also ready to
accept the Single European Market part of EC law (Acquis Communautaire) as
the sole basis for negotiations, on the condition that she be granted the right to

225
participate in the legislative decision-making process. It was at this point, at the
end of 1989, that the bargaining began, on the one hand between the EC and
EFTA, but also between the different EFTA partners, which had been unable to
agree on a unified negotiating position. It was not until October 1991, in
Luxembourg, that the breakthrough came, which allowed Switzerland to share in
the so-called four freedoms (the free movement of goods, persons, services and
capital). Following the sweeping changes that had been wrought in the world's
political map, EEA membership could no longer be said to really meet
Switzerland's interests, except partially. For the situation of the countries of
Eastern Europe had changed entirely, the Soviet Union had crumbled, and the
superpowers no longer had the same engagements in Germany and Europe. In
any case the EEA agreement did not allow Switzerland to participate in the
decision-making process. After signing the EEA agreement in Porto on 2 May
1992, the Federal Council submitted its request for EU membership to Brussels
on 26 May 1992. The Swiss government's "Eurolex" programme, aimed at
bringing Swiss law into line with that of the EC, was unveiled on 1 June.

Less than two months later however (6 December 1992), the EEA option was
rejected by 50.3% of the electorate, as well as by 14 cantons and four half-
cantons. The government interpreted the result as a mandate to eliminate or at
least to minimise the main disadvantages of Switzerland's continued non-
participation in the EEA, by negotiating agreements with the EU, sector by
sector. At the same time, the government decided that a revitalisation
programme was needed to improve Switzerland's attractiveness as an economic
centre, to be achieved by the dismantling of various "barriers", and by
liberalising the internal market and the cartels that exist in different sectors of
the economy. The application to join the EU was frozen.

At the end of 1993, in its report on Swiss foreign policy in the '90s, the Federal
Council confirmed Switzerland's commitment as a partner to Europe, and
consequently the maintenance of full EU membership as the long-term objective
of the country's integration policy. Next, the government focused its attention on
the only objective capable of implementation in the short term – the sector-by-
sector bilateral negotiations with the EU. These negotiations were begun in
December 1994 and concluded in December 1998. Signed in Luxembourg on 21
June 1999, the agreements have entered into force on 1 June 2002.

With the publication of its 1999 Report on Integration the Swiss government
gave parliament, in February of that year, a new summary of its view of relations
between Switzerland and the EU. The Report on Integration is intended to serve
as a solid basis for an objective and comprehensible discussion for everyone
interested in the debate on European integration. It is on the strength of this
debate that the Federal Council will eventually determine whether or not

226
domestic conditions are suitable for the beginning of negotiations with the EU for
Swiss membership.

The «Yes to Europe» popular initiative was rejected by a clear majority on 4

March 2001. 77% of the voters said no to this request for the Federal Council to
open immediate negotiations on accession to the EU. Swiss citizens therefore
endorsed the position of the Federal Council not to seek EU membership at this
stage because the conditions necessary for such a step do not exist at present.

The Federal Council set out its European policy clearly in its foreign policy report
of November 2000. Implementation of the seven bilateral agreements with the
EU is the immediate priority. In the medium-term, Switzerland wishes to
negotiate further bilateral agreements with the European Union in new areas.
These negotiations are in course. EU accession continues to be the long-term
objective. The Federal Council is convinced that Switzerland will be able to
safeguard its interests more effectively as a member of the EU than if it stays
outside. This is the only way in which it can have its stay and help to shape
decisions, which have a direct bearing on Switzerland, too.

However, before negotiations on accession are opened, the Federal Council

believes that three conditions must be satisfied: in the first instance, Switzerland
wishes to acquire experience of the seven bilateral agreements. Secondly, the
implications of EU accession for central areas of the Swiss constitution must be
studied in detail and proposals made for the necessary reforms. Thirdly, broad
domestic policy support for the goal of accession must be secured.

The history of the negotiations brought the following facts to light:

• One advantage of the sectoral route is that, in the choice of the subjects
for negotiation, Switzerland has an equal say with the EU while the
implementation and application of the conventions takes place
autonomously in Switzerland and the direct costs remain low. This is
because contributions to the budget of the European Union only have to be
paid in certain specific instances (for example for research).

• The following arguments militate against the sectoral route as a long-term

instrument of Swiss integration policy:

• The EU shows great reluctance to choose further negotiating areas

because of its own diverse internal interests. Negotiations can only be
conducted on matters, which are of some interest to all fifteen Member
States.

• The length and complexity of the negotiations are considerable because of

227
 the special circumstances prevailing in the EU. With fifteen Member States
the EU has achieved a degree of complexity, which makes sectoral
approaches difficult. Whenever one specific problem is examined (e.g.
freedom of movement for persons), new imbalances of interests may arise
between the EU Member States, which in turn have to be compensated by
concessions in other areas (such as agriculture). The systematic absence
of Switzerland from meetings between the fifteen EU States makes it
difficult to effectively clear up real or imaginary misunderstandings as to
Swiss positions in due time.

• There are also institutional barriers to the completion of further sectoral

treaties: on central matters of mutual interest, a treaty solution could only
be arrived at if Switzerland were to transfer sovereign rights to the EU
and, in particular, acknowledge the supreme judicial authority of the EU
Court of Justice and the legislative and political majority decisions of the
Council of Ministers. These matters, which cannot be settled by sectoral
treaties but only by EU accession, include e.g. the elimination of the
customs union frontiers for the trade in goods, comprehensive cooperation
on internal security on a basis of parity, institutional safeguards for
monetary and exchange rate stability and membership of economic
treaties between the EU and other regions of the world (NAFTA, Mercosur,
Apec, Mediterranean region etc.).

• A negative counterweight to the acceptability of sectoral agreements in

terms of sovereignty is the circumstance that an adjustment of the
treaties to changing circumstances (for instance progress in technical
criteria for products or in environmental protection legislation) may be a
cumbersome process, especially if parliamentary approval of the treaty
change is necessary in all fifteen EU States.

The Federal Council has made a thorough identification of the sectoral route in
the past years and will continue on this road jointly with the European Union to
the extent that this is possible and both parties have an interest in doing so
(entry into force of the sectoral conventions; in addition, modernization of the
rules on free trade in food industry products, membership of Europol,
negotiations on a parallel agreement to the Dublin Convention on Initial Asylum
Seekers, Swiss participation in EU programmes, e.g. in education, film,
promotion, statistics and environmental monitoring). On the other hand, the
Federal Council is well aware that the limits in terms of content and procedures
for sectoral agreements between Switzerland and the European Union will soon
have been reached

8.4.4 EEA participation

228
Swiss membership of EEA as compared to EU accession is facilitated by the
limited implications in terms of formal constitutional policy and lower costs.

As compared to EU accession, the need for adaptation in agriculture would not

exist; there would be no need to change our financial regulations (no acceptance
of the EU minimum value added tax), while adaptations to comply with the
conditions of Economic and Monetary Union would also not be necessary.

In the event of an unsuccessful outcome to the ratification procedure for the

sectoral conventions, the EEA would be of interest in terms of its content (the
four freedoms); the solutions which remain to be negotiated in all areas, in
particular in national transport and social insurance law would be much the
same for Switzerland as the solutions arrived at in the sectoral conventions
concluded at political level on 11 December 1998.

However, factors against participation in EEA, even as an intermediate step to

EU accession, include institutional weaknesses and shortcomings in terms of
content (no customs union or common foreign trade policy, no common
agricultural policy, no full rights of co-decision), the obligation of the EFTA
countries to speak with a single voice and the circumstance that the EEA
increasingly fails to cover important areas which will play a vital role in the
European future of Switzerland (monetary stability, policy on asylum seekers,
internal security, external policy).

The opinion that is sometimes voiced to the effect that the relationship between
Switzerland and the EU might be permanently governed by an association treaty
going beyond the content of the EEA Convention and specifically tailored to suit
Switzerland would presuppose a willingness of the EU to negotiate in that sense
and fails to recognize the fact that only EU Member States can exercise rights of
co-decision.

8.4.5 Switzerland remains outside

The continuation of the existing pragmatic policy of small steps with all its
known advantages and drawbacks is less an integration policy option as far as
the Federal Council is concerned, than the expression of a reality which remains
valid until the policy change which the Council seeks finally comes about.

On the other hand, measures to shadow EU policies or the maintenance of an

offshore position are not integration policy instruments, which the Federal
Council is examining in more detail at this juncture. The declared systematic and
unilateral shadowing of legal developments in the EU would be politically
dubious and economically risky as Switzerland would constantly have to make
unilateral contributions if it adopted this approach. The offshore policy would

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result in a fundamental change in the economic and social situation of the
country from which a few people might profit greatly, but would cause the
nation as a whole to lose its present character. Mixed forms of the policy of
remaining in isolation would repeatedly come into conflict with the constitutional
and economic policy deficits referred to earlier.

8.5 Eu accession

8.5.1 Identity, independence, federalism and people’s rights

In the area of federalism, the cantons would have to cooperate in decision-

making in all matters of relevance to them, which are discussed and decided in
the EU. The Federal and cantonal Authorities would conduct an in-depth
dialogue on appropriate measures in the run-up to EU accession. The main
emphasis would be on measures to strengthen information for the cantons,
improve cantonal consultation in preparation for decisions and ensure suitable
representation of the cantons in some EU bodies.

The regional policy of the Federal Council could be continued as at present and
adjusted still more effectively than is the case today to Swiss needs through
cooperation within the EU.

Accession of Switzerland to the European Union would be compatible with the

Federal Constitution. Article 89 of the Federal Constitution, which requires a
popular and cantonal majority for such a decision, was revised in 1977 precisely
with a view to EU accession.

Clearly, the fifteen Member States of the EU have retained their sovereignty. As
an EU Member, Switzerland would have an opportunity to influence and help to
shape the rules, which are applied on an ever-growing part of our continent.
Given the central geographical, demographic, political and economic values of
Switzerland and the EU, for many years now, Switzerland has no longer been
able to escape the growing influence of EU decisions. Accession would in fact
strengthen Switzerland’s independence firstly by enabling the country to take
part in decisions which concern it (it might adopt a joint approach with other
Member States, depending on the circumstances and needs) and secondly
because it could benefit from the substantial weight of the EU if efforts were
made to exercise pressure on Switzerland.

If Switzerland became part of the EU, the Swiss people and possibly also the
cantons could continue to exercise the people’s rights embodied in the Federal
Constitution (referendum, initiative). As the Council of Ministers stressed in an

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answer to a parliamentary question on the compatibility of national referenda
with the Community treaties, the organization of referenda is an exclusive
preserve of the respective constitutional orders of the Member States. However,
the outcome of a referendum must not be allowed to influence obligations
arising under the treaties establishing the Communities. Studies by various
Swiss universities have shown that, had Switzerland already been an EU
Member since 1993, the number of concrete conflicts between Community law
and referendum proposals at either Federal level or voting procedures at
cantonal level would have been very small.

In 1991 – in the context of the EEA negotiations and also with a view to possible
EU accession – the Federal Assembly adopted a statutory provision permitting
the participation of Parliament in the area of external policy. On this basis, the
Federal Council would, in the event of EU accession, systematically consult the
Foreign Policy Committees before adopting its own position on acceptance of
decisions of the Council of Ministers which would be directly applicable in Swiss
law (regulations) or entail an amendment of Swiss legislation (directives). In
this field too, it remains to be seen whether the existing procedures would be
sufficient in the event of EU membership. At all events the Federal Council takes
the view that accession would not weaken the role of Parliament or that of the
cantons in our political system. The weight of the national parliaments of the EU
Member States shows this to be possible.

As to the organization of justice, Switzerland would remain autonomous in the

event of accession, save that its own procedural law would not be allowed to
discriminate against Community law and threaten the legal validity of the latter.

In addition, Switzerland has always been well integrated into overall European
cooperation in matters of civil and criminal law through the Hague Conference
and the Council of Europe. As far as the Brussels Convention on the mutual
recognition and enforcement of legal decisions of 1968 is concerned, the parallel
Lugano Convention has so far guaranteed Switzerland’s integration into the legal
area. If the cooperation can be continued in its existing form, there would
therefore be no significant problems for Switzerland in these domains.

In the Federal Council’s view, internal constitutional policy measures would have
to be considered in detail in the following areas in the event of EU accession:

• measures would have to be discussed with the cantons to enable them to

play an appropriate part in the definition of the Swiss negotiating position
at the time when accession negotiations begin. The extent to which the
cantons could enforce their right of consultation in the negotiations,
especially in cases where their own competencies are concerned, would
also have to be determined.
• in the area of people’s rights, concrete proposals would have to be made

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 in an explanatory statement on EU accession, defining the instruments by
which the most evident cases of conflict could be resolved. It would also
be necessary to examine how the involvement of the Federal Assembly in
the definition of Switzerland’s negotiating positions on European policy
could be ensured.
• the organization and working methods of the Federal Council and Federal
Administration would have to be reviewed.

8.5.2 Prosperity

An attempt to assess the impact of EU accession on Swiss prosperity, shows –

as is hardly surprising – that only the financial costs can be effectively
calculated, while the impact on economic growth, prices, interest rates, wages,
tax and rents can only be estimated. This is because economics are not an exact
science and economic growth depends significantly on the parameter of private
initiative by entrepreneurs, which cannot be measured, and on the development
of the social environment (for instance the social partnership). The situation
here resembles that prevailing in any economic risk analysis. The costs, which
arise, are relatively easy to calculate, while the loss of profit caused by the
slowness to take business opportunities can only be determined by comparative
study and estimates. This conclusion, which the Federal Council already reached
in the run-up to the EEA vote in 1992, means that the economic arguments for
or against a change of the background conditions, i.e. in this case for or against
EU accession, generally strengthen scepticism. The opponents of membership
are able to set a relatively precise figure to the cost of the changes (e.g. an
annual net payment to the EC budget of around 3 billion francs), while the
advocates of liberal background conditions are only able to show trends,
expectations and comparative values.

That being so, the following summary conclusions can be put forward:

• within the EU, and even within the same linguistic area, there are no
significant population migrations;
• wage differences remain considerable and effective action to prevent
abusive social dumping remains possible in the EU;
• thanks to EU accession, future economic growth would tend to be higher
although this growth would also depend significantly on other factors such
as internal reforms;
• in the present state of our knowledge, it can be assumed that EU
accession would exceed the benefits of an EEA solution, even if the net
transfer to the EU in the event of accession must be taken into account in
this comparison;

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 • the initial adaptation costs must therefore be seen against a more
sustained and enhanced economic dynamic;
• the loss of monetary policy independence means that monetary policy can
no longer build on a different economic development; other mechanisms
of adaptation, such as flexible prices and wages, would also be needed;
• the adaptation requirements – adjustment to the real interest rates
prevailing in Europe or agricultural measures – must not be
underestimated;
• preparatory and accompanying steps must therefore be decided and
transitional periods stipulated in the negotiations at domestic level;
• the inevitable conversion of State revenue and spending would of course
also constitute a complex political venture.
• The proposals would obviously have to satisfy the following conditions:
o annual net payments to the EU would be financed by additional
revenue from the indispensable increase in the standard rate of
VAT which would in turn bring higher state revenue
o the attractiveness of Switzerland as a business location from the
tax angle could only be safeguarded by extensive compensation of
the higher rate of VAT in other areas, such as income tax and social
security contributions
o the conversion of the tax system would have to be economically
acceptable and viable in terms of social compatibility.

In principle, it must be remembered that accession cannot be seen as the

panacea for all our economic problems. But it would be equally misguided to
suppose that strictly internal measures could offset the economic drawbacks of
standing aside from integration policy. Economic dynamism is particularly likely
if an outward-looking economic policy goes hand in hand with continued internal
reform.

In the welfare sector, the Federal Council would make a further study of the
following internal measures in event of accession:

• Action already existing in the draft stage to prevent social and wage
dumping. These measures have been drawn up by a working group with
the participation of the social partners and will shortly be laid open to
consultation by the Federal Council to enable preparations for
implementation of negotiated solutions to be put in hand in the
framework of the sectoral conventions in Switzerland

• In the area of agricultural policy, the steps already taken by the Federal
Council to improve competitiveness will be continued; measures must also
be verified to compensate the inevitable structural adaptations

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 • The conversion of the Swiss tax system which will be rendered necessary
by possible EU accession and the efforts to coordinate financial policy
more effectively with a view to compliance with the Maastricht criteria at
the different policy levels in Switzerland, including social insurance, would
be a matter for consideration by the political system in Switzerland in the
next few years. The Federal Council has in mind to approach the question
of compensation of additional revenue from the higher rate of VAT on the
occasion of the renewal of the financial regulation, which expires in the
year 2006. Decisive criteria for the measures to be chosen would be
economic and social compatibility and the preservation of the financial
autonomy of the Federal and cantonal authorities.

8.5.3 Switzerland’s Position in the world

There is no doubt that EU membership is legally compatible with the status of

permanent neutrality. With the external and security policy of the EU in its
present form, Switzerland could preserve its neutrality even as a EU Member.

The question as to the preservation of Swiss neutrality would only arise if the EU
States were one day to create a common defence and security structure by a
unanimous decision. As an EU Member, Switzerland would have to play an active
part in the creation of such a system and would be fully involved in the decision-
making process. If a European security architecture were to be created which
would offer Swiss citizens at least as much security as armed neutrality, the
latter might become meaningless.

In the security policy sphere, and regardless of possible EU accession,

Switzerland will find it necessary to redefine some of the conditions underlying
its existing policy. The Federal Council has therefore commissioned a security
policy report for 1999. The reorientation of Swiss security policy will presumably
entail reforms, which will improve the ability of Switzerland to shape the joint
external and security policy of the EU.

From the external economic policy standpoint, Switzerland could continue to

defend its economic interests even after EU accession and help to shape the
external trade policy of an economic world power as a Member enjoying equal
rights to all the others

8.5.4 Internal security

If Switzerland does not wish to become a bolt hole for criminals who are wanted
all over Europe or a hub and logistic base for international criminal organizations
acting from Switzerland – in short an island of insecurity – it must seek still

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closer international cooperation to counter this threat. That is also in the interest
of the EU. One step in this direction consists of bilateral police cooperation
treaties already negotiated with neighbouring countries or under negotiation
today. The same goal is pursued by the police liaison officers stationed at certain
focal points of international crime. But these instruments on their own are
inadequate compensation for the institutional deficit and reduced access to
information.

Whether the EU Member States will be willing, after the entry into force of the
Amsterdam Treaty, to open negotiations with Switzerland on internal security
cannot be predicted at this juncture. Existing experience shows that such
negotiations will be difficult, time-consuming and carry a price in terms of
sovereignty. It seems likely therefore that EU accession would be the best
means of fully making good Switzerland’s security deficit. This could be achieved
by participation of Switzerland in the Schengen information system and
cooperation at Federal level by appropriate central agencies in Europol.

On the subject of asylum seekers, non-accession would have the consequence

that, because of the increasingly close cooperation prevailing between the EU
Member States, Switzerland might become a place of first refuge for second
asylum seekers in Western Europe. That would lead to a massive increase in
asylum requests and entail very high extra costs.

In the area of internal security and asylum, the Federal Council will be
examining how, in the event of accession, the disappearance of Swiss border
controls could be compensated by internal measures. Border controls might be
replaced by controls in the area close to the frontier (secondary searches, as
they are known). A Federal body might be set up for certain specific
interventions while the staff and material resources of the cantonal police forces
might be increased. An adaptation of that kind could be achieved without any
fundamental change to the existing system.

8.5.5 Contribution of Switzerland to the economic and social

cohesion of the enlarged EU

The enlargement of the European Union (EU) represents a major step towards
securing peace, stability and prosperity in Europe, from which Switzerland will
also profit. To support this process, which is also in Switzerland's interest, the
Federal Council has decided to make a contribution to the economic and social
cohesion of the enlarged EU. The Swiss contribution amounts to CHF 1 billion
over a period of five years. With this cohesion contribution, Switzerland is
continuing its tradition of solidarity with Eastern Europe and is contributing

235
toward lessening the economic and social gap between the old and the new
member states of the EU. Switzerland shall support specific projects in different
areas. They will be chosen and carried out autonomous by Switzerland. The
financing will not affect the budget.

8.5.6 Reasons for and against EU accession

The following compilation of advantages and drawbacks of Swiss accession to

the European Union can only be a guide to help each Swiss citizen to weigh up
the respective interests at his or her own individual level. Working with its own
overview which focuses less on particular interests than on the overall well
being of Switzerland itself, the Federal Council wishes to give guidance by
highlighting the key issues in a flood of information.

The question of Swiss accession to the EU is essentially one of constitutional

policy, which also has economic, population and peace policy aspects. For many
European States, EU accession is the right strategy to secure lasting peace,
economic prosperity and co-decision rights on matters of continental
importance.

In our present state of knowledge, the costs of EU accession can be estimated

at about 3.1 to 3.9 billion francs annually. This must be set against a loss of
decision-making autonomy and freedom of action. Benefits of accession to
Switzerland as an economic location (especially for the production of goods and
tourist services) are probable in the long term, but cannot be proved at this
juncture. Better education and job opportunities for our young people,
researchers, cultural creators and job seekers also weigh favourably in the
balance as do the mechanisms of solidarity between the Member States to resist
attempts by non-European authorities to exert pressure on Switzerland. Another
factor in favour of accession is that Switzerland would have to be an EU member
to enjoy equal rights with the overwhelming majority of European States to seek
solutions to problems and reach decisions which can best be resolved on the
continental level (liberal and social internal market conditions, continental
freedom of movement for persons, business ventures and ideas, effective action
against crime, fair distribution of burdens in the refugee sector, worldwide
representation of European basic values). This benefit must be set against the
drawback that the positions represented by Switzerland on these matters may
be outvoted and that some of the institutional particularities of Switzerland
which are so dear to Swiss citizens (people’s rights, Federal balance, tax
system, numerically small government) may be affected or limited and have to
be adapted to the changed circumstances.

A factor in favour of early EU membership is that some important questions for

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our country have not yet been settled in the EU (central matters of security, tax
competition, social order and EU institutional framework). Switzerland could
therefore provide inputs for future decisions. On the other hand, Switzerland
would have to accept the fact that most matters of cross border economic law
have already been settled in the EU and that law is made by majority voting in
the remaining areas. Switzerland would of course take part in those votes.
Another factor in favour of accession is that introduction of the single currency
(the euro) after a transitional period, which would have to be negotiated will
result in lower transaction costs and put an end to the risk of harmful
speculation on the Swiss franc. On the other hand, in the first instance, some
painful adaptation costs would have to be accepted, for instance in the form of
higher interest and rental costs and also in the shape of wage and price
reductions.

Accession would probably be conducive to a more equitable distribution of

burdens in asylum policy and would also result in the disappearance of checks
on persons and goods at the national border; problems of internal security
would then have to be countered by effective European police cooperation (joint
control of the EU’s external frontiers, Europol).

Accession to the EU would be detrimental to the extent that Switzerland, like all
the other EU States, would lose its right to conclude separate trade agreements
with non-European countries. On the other hand, Switzerland would profit from
the economic strength of the EU, which concludes such trade agreements on
behalf of its Member States.

The citizens would enjoy greater legal protection as they could enforce the
rights granted to them by European Community law in the ordinary courts. They
would also have certain rights of appeal to the EU Court of Justice against some
measures taken by European Community bodies.

Like some commercial activities and services, which have been protected so far
against foreign competition, our agriculture would lose its protection in relation
to the EU. The prices paid for products and services would fall. On the other
hand, the means of production imported from other European countries would
become cheaper and the market for Swiss high quality products would be
greatly enlarged. The process of structural adaptation of Swiss agriculture will
continue in any case, with or without EU accession. However, EU accession
would require certain transitional periods because of the extensive adjustments
necessary in agriculture. The conversion to 15% VAT would bring substantial
extra revenue to the Federal Authorities (over 15 billion francs annually,
disregarding the impact of any VAT increases in the context of the 11th AHV
Review). Depending on the short-term economic situation, this might prove
prejudicial to economic growth in Switzerland and would have to be

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compensated by a reduction of other State burdens on the population (such as
direct taxation, social charges). The accompanying increase in the State share
and the related restructuring of the Swiss tax system would lead to severe
internal policy controversy.

EU accession would have no impact on the preservation of Swiss neutrality, as

the examples of Finland and Austria prove. By staying neutral, Switzerland
would undertake when it joins the Union to participate in the creation of a
comprehensive continental security system and would ultimately gain a security
margin from that system. However, it could preserve its position in situations
with a critical bearing on neutrality by exercising the constructive right of
abstention.

In weighing up the overall interests, the Federal Council identifies another

important consideration: Swiss accession to the EU would promote national
cohesion and the country’s influence beyond its borders, while the
representation of State interests could be substantially improved by taking a
seat on the many multilateral bodies of the European Union. The apparatus of
the State and the density of regulation would hardly increase. On the contrary
they would tend to diminish and the policy of openness to Europe which EU
accession implies, would increase the pressure of competition and therefore
promote the reforms and revitalization of national strength that are necessary
internally.

8.6 Bilateral agreements i between switzerland and the european

union of 1999

Agreed at the political level in December 1998 at a meeting in Vienna, the

sector-specific bilateral agreements between Switzerland and the European
Union cover seven areas: civil aviation, overland transport, the free movement of
persons, research, public procurement markets, agriculture and the elimination
of technical barriers to trade. The most distinctive feature of these agreements is
the fact that they are thus limited to specific areas. It is for this reason that they
are frequently referred to as "sector-specific" agreements.

The seven agreements were initialled in Berne on 26 February 1999 and signed
in Luxembourg on 21 June 1999. In the following they had to be ratified by
Switzerland and the EU, the agreement on free movement of persons additionally
by every EU-member state. After the completion of this process of ratification the
seven agreements have come into force on 1 June 2002. The agreements can be
terminated at anytime.

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8.6.1 Research

The research agreement allows Swiss research establishments to participate on

an equal footing in all programmes and activities of the fifth Framework Research
Programme (FRP) of the European Commission and the fifth Euratom framework
programme. However, as the agreement will already expire on 31 December
2002, its financial provisions, which apply from 1 January of the year following
the entry into force of the bilateral agreements, will not be able to take effect.
This in turn means that the research agreement will not take full effect even
after its entry into force in the first half of 2002. However, the agreement does
provide for the possibility of renewal to allow full participation by Switzerland in
the sixth EU framework programme (2003-2006). After its entry into force,
renewal negotiations will therefore be opened between Switzerland and the EU.

8.6.2 Public procurement

The World Trade Organisation (WTO) agreement in the area of public

procurement has been in force since January 1 1996. The federal government,
the cantons and public law companies active in the water, transport and energy
sectors must comply with WTO rules on tendering and the signing of contracts
for goods, services and construction, if these go beyond certain thresholds. The
WTO agreement served as the basis for the agreement on public procurement
markets between Switzerland and the EU, which involves an even broader range
of applications than in the case of the WTO text. The procurement of local
authorities, the telecommunications and rail transport sectors and the
procurements of private enterprises operating on the basis of concessions or an
exclusive right are thereby liberalised if the agreed thresholds are exceeded.

8.6.3 Technical barriers to trade

The agreement calls for the mutual recognition of declarations of conformity

(tests, certificates, product approvals etc.) for most industrial products. To the
extent that Swiss legislation is recognised as being the equivalent of EU
legislation, a single test of conformity will henceforth be sufficient for
commercialisation of the products in question in the markets of both Switzerland
and the EU. Duplicate testing to establish conformity to specific Swiss or EU
requirements will no longer be necessary.

In cases where Swiss specifications differ from those of the EU, further testing
will remain necessary, in the one case to demonstrate conformity with Swiss
legal requirements and in the other conformity with EU laws. In both cases

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however Swiss certification bodies may now carry out the tests.

8.6.4 Agriculture

The agricultural agreement between Switzerland and the EU will make it much
easier to conduct trade in agricultural produce by reducing or even eliminating
non-tariff barriers, through mutual recognition of technical requirements in the
veterinary field, in pesticides and similar products, in "bio" agriculture, in relation
to quality standards for fruit and vegetables, and so on. The agreement calls for
improved access to the agricultural markets of each party for products of
particular interest. As negotiated, the agreement would open the EU market to
some of the most competitive Swiss products including fruit and vegetables. For
cheese, free trade will be introduced five years after the date of entry into force.
This is in Switzerland’s interest because it exports more cheese than it imports.
Switzerland has agreed to make concessions for fruit and vegetables during the
period when there is no harvest (winter) and for items that are not produced in
Switzerland, or at least not in appreciable quantities (e.g. olive oil). Fresh meat,
wheat and milk on the other hand are not affected by the removal of customs
duties.

The agreement necessitates a supplement to Swiss agricultural policy, which

requires a stronger market-led strategy on the part of farmers. In an effort to
make Swiss agriculture more competitive, the federal government has provided
for certain companion measures, designed above all to "help farmers to help
themselves" when it comes to bringing their produce to market.

8.6.5 Civil aviation

The agreement defines the terms by which Swiss airlines will be allowed access
to the deregulated European civil aviation market on a reciprocal basis. The
gradual acquisition of transport rights* and the prohibiting of discrimination will
put Swiss airlines virtually on an equal footing with the companies of Europe,
making it possible for them to become majority shareholders in other EU airlines.

8.6.6 Overland transport

The agreement in the area of overland transport calls on both parties to work for
the creation of a co-ordinated policy in this field. Some aspects of this agreement
involve improving conditions for mobility, environmental protection,
comparability of general conditions, and the guarantee of the most direct transit

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routes possible.

The accord includes provisions for gradual opening by Switzerland and the
European Union of their respective road and rail transport markets, for both
persons and goods, on a reciprocal basis. It provides for a transitional period for
road traffic, which ends in the year 2005, with a definite arrangement to be in
place by 2008 at the latest.

The overland transport agreement is one of the main pillars of Switzerland's

transport policy. It is the basis on which Switzerland plans to reorganise its
railways, in co-ordination with Europe, developing new infrastructure (New
Transalpine Railway, "NEAT" + traffic upstream and downstream) while
introducing a new tax on heavy goods vehicles (HGVs) based on the kilometres
travelled, while increasing transit taxes to levels considerably higher than those
existing at present.

In an effort to implement the provisions of the constitutional article on the

protection of the Alps, the Swiss government and parliament decided on a series
of companion measures aimed at reducing the volume of goods traffic crossing
the Alps by road to about 650,000 passages per annum. In effect this would
amount to a 50 per cent reduction in HGV traffic compared to the situation
today.

8.6.7 Free movement of persons

The agreement on freedom of movement between Switzerland and the EU

provides for the progressive opening of the employment market. After seven
years, Switzerland can decide whether it wishes to extend the agreement. This
decision will be the subject of an optional referendum.

The agreement covers workers of all kinds, the self-employed and persons
without gainful employment who have sufficient financial means of their own. On
entry into force of the agreement on freedom of movement, persons in gainful
employment and the self-employed only benefit directly from the rights granted
if at that time they are already authorized to pursue an employment activity on
the territory of the contracting parties. Persons who wish to take up employment
on the territory of the other contracting party will only benefit from freedom of
personal movement two years after the entry into force of the agreement. For
employed persons from the EU the transition to free movement will take place in
several stages extending over a period of 12 years.

The agreement on the freedom of movement is supplemented by mutual

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recognition of professional diplomas and coordination of social insurance. To
prevent abuse of the freedom of movement of persons, the federal government
and parliament have taken accompanying measures to protect Swiss employees
against wage dumping.

The advantages include the opportunity of living and working freely anywhere in
Europe, the know-how acquired as a result of participation in European research
programmes, the improvement in relations between Switzerland and the
European Union, and the guarantees given by the latter for Switzerland's
environment policy, all of which are factors that are of inestimable value.

The economic advantages have been estimated as equal to about 2 per cent of
the gross domestic product (GDP), i.e. about SFr8 billion. This includes the
anticipated price reductions of benefit to consumers.

For example the Swiss sector that includes machine manufacturing, electrical and
metallurgical products expects to increase its turnover by some SFr300 million
each year thanks to the bilateral agreements. This figure has been calculated
taking the following into account:

• The volume of additional orders from public procurement markets

• The ability to make unlimited use of the outcomes of European research
programmes
• Greater flexibility in the utilisation of employees
• The growing competitiveness of Swiss products following the elimination of
costly technical barriers to trade.

Once the seven-year transitional period comes to an end, the total cost will
amount to SFr350-450 million each for the Swiss Confederation and for the social
security service, i.e. about 0.2 per cent of GDP. These figures are maximum
values based on pessimistic assumptions (high unemployment rate). In fact
these costs will be considerably less if the economy grows at a good rate. Each
percentage point of additional growth will bring an extra SFr400-500 million into
the coffers of the Swiss Confederation. The gains would be even greater in the
cantons, whose tax revenues are significantly higher.

8.6.8 Legal and institutional framework

The seven agreements are all inextricably linked together, with the exception of
special provisions for the agreement on research. The agreements have been
concluded and approved as a whole, to take effect simultaneously. The
extinguishment of a single agreement would automatically render the others

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inapplicable.

The agreements can be separated into three categories: the five agreements that
involve deregulation, one based on co-operation (in research) and a partial
integration agreement (civil aviation). Another difference is that, unlike the six
other accords the civil aviation agreement extends the so-called acquis
communautaire (existing Community legislation) to Switzerland.

All the seven agreements will be supervised by joint committees, within which
each of the two parties must make rulings on a unanimous basis. These joint
committees only have decision-making powers in the cases stipulated in the
agreements. Each party is responsible for the proper application of the
agreements on its own territory. However, the European Commission and the
European Court of Justice monitor compliance with the rules of competition in the
area of civil aviation.

None of the seven agreements involves a transfer of legislative powers to a

supranational body. The majority are based on the mutual recognition of each
other's legislation by the two contracting partners. It is in the interest of both
parties to maintain this legislative equivalence. It is with this in mind that specific
procedures have been laid down for the exchange of information and for
consultations when one party intends to amend its regulations.

8.7 Blateral agreements ii Switzerland – EU (as of February

2005)

The Bilateral Negotiations II are the continuation of the Bilateral Agreements I

1999 and thus constitute further progression along the bilateral path. This was
pursued after rejection of Switzerland’s accession to the European Economic Area
in 1992: It involves on the one hand the pragmatic settlement of outstanding
specific interests and problems in the relationship between Switzerland and the
EU through bilateral, sector-specific negotiations and agreements, and on the
other hand involves improving on and structuring the existing treaty framework
where this is in both sides’ interest.

After conclusion of the Bilateral Agreements I, the EU-Commission was

essentially sceptical regarding new negotiations with Switzerland. The reason
why, despite this scepticism, a second round of bilateral talks has come about, is
because the EU itself discovered two fresh concerns: Firstly, Switzerland should
be integrated into the system planned by the EU for cross-border taxation of
savings. Secondly, Brussels wanted to increase cooperation with Switzerland with
regard to the fight against fraud in the area of indirect taxes (especially against

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cigarette smuggling).

8.7.1 Parallelism of negotiations

Switzerland acceded to the requests made by the EU, but also set three
conditions:
1. Negotiations should not only be conducted in the two dossiers required by
the EU, but should also extend to cover additional areas of importance for
Switzerland: These include Switzerland’s participation in Schengen/Dublin
(cooperation in the fields of police and justice, asylum and migration) and the
seven remaining dossiers (“leftovers”) from Bilateral Negotiations I. In a joint
statement on the Bilateral Negotiations I, Switzerland and the EU had already
come to an agreement on negotiations in the following areas: processed
agricultural products, statistics, the environment, Media, education, pensions
and services.
2. Negotiations proceeded in parallel in all dossiers and were concluded
simultaneously. This parallelism of negotiations ensured that a balanced
overall outcome was achieved that also took account of Swiss interests.
3. Switzerland’s interests as a financial centre, i.e. banking secrecy, must be
protected at all times.

From June 2002 negotiations between Switzerland and the EU were conducted in
parallel for ten dossiers: On the one hand, these concern economic interests
(e.g. of the food industry, the financial centre or tourism). But they also extend
to cover the cooperation between Switzerland and the EU in other crucial political
areas: e.g. domestic security and asylum policy (Schengen/Dublin) or in areas
such as the environment, statistics, culture and training.

With regard to the dossier concerning the liberalisation of services, Switzerland

and the EU agreed in March 2003 that, in view of the large number of issues still
outstanding and the complexity of the dossier, negotiations in this area will be
continued separately and concluded at a later date.

In the summer of 2003, seven of the remaining nine dossiers of the Bilateral
Negotiations II were essentially completed: taxation of savings as well as the six
leftovers. An important step was taken in June 2003 with the political agreement
with regard to the taxation of savings. The agreement is based on the principle
that Switzerland imposes a withholding tax of up to 35% on behalf of the EU
states and pays back three quarters of this to the EU states. This means that, on
the one hand income from savings received by EU citizens can be taxed
efficiently in Switzerland, whilst the Swiss legal system and banking secrecy
remain protected.

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Politically sensitive differences were still outstanding in the closing phase for the
dossiers relating to the fight against fraud and Schengen/Dublin. These
concerned the question of the exchange of information with regard to tax
offences within the scope of judicial and administrative assistance.

8.7.2 Political agreement

On May 19th, at a summit meeting between Switzerland and the EU in Brussels,

political agreement was also reached with regard to these final questions.
Agreement on the final points consists of the following provisions:
• With regard to Schengen/Dublin, Switzerland receives the guarantee that,
in the area of direct taxes, banking secrecy remains protected. In the
event that a future Schengen provision revokes the principle of double
liability with regard to direct tax offences thus giving rise to an obligation
for legal assistance with regard to evasion offences, Switzerland receives,
an opt out without the need to withdraw from the Schengen cooperation.
• In the area of fight against fraud, i.e. matters relating to indirect taxes
(customs duty, VAT, excise duty, for example on tobacco and alcohol)
Switzerland makes available the same legal instruments to the EU as
those used in Swiss proceedings (national treatment); i.e. cooperation is
extended to include all cases involving serious offences. Cooperation with
regard to cases of money laundering is also extended. However the
definition of money laundering according to the Swiss criminal code
remains unchanged. There are no new reporting requirements for Swiss
financial intermediaries.

8.7.3 Balanced overall result

The Swiss Federal Council considers this agreement to be well balanced, with
Switzerland’s key requirements (conclusion of all dossiers including
Schengen/Dublin, protection of banking secrecy) being fulfilled. Switzerland
provides reciprocal cooperation with regard to cross-border taxation of savings
by deducting a withholding tax on income from savings earned by EU citizens
(taxation of savings). Swiss cooperation is also extended to cover all serious
offences relating to indirect taxation (smuggling, customs fraud, VAT fraud)
(fight against fraud).

The bilateral agreements provide Switzerland with the following benefits:

Firstly, the agreements cover significant economic interests:

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 • Finance sector: The interests of the Swiss finance sector are protected
(taxation of savings, fight against fraud), and banking confidentiality in
relation to direct taxation is preserved (Schengen/Dublin).
• Food industry: Reduced customs duties improve export opportunities for
the food industry. This also benefits Swiss agriculture as a supplier
(processed agricultural products).
• Tourism: The Schengen visa encourages tourism in Switzerland
(Schengen/Dublin).
• Tax benefits for holdings: Swiss holdings operating throughout Europe pay
less tax (taxation of savings).

Secondly, cooperation is extended to other important political areas:

• Security policy: Cross-border crime can only be fought effectively by -
Security policy: Cross-border crime can only be fought effectively by
means of international police and judicial cooperation. Schengen provides
the tools for this purpose.
• Asylum policy: The Dublin cooperation offers measures against “asylum
tourism” and thus relieves pressure on the national asylum system.
• Environment: The European Environmental Agency is an important means
for international cooperation on protection of the environment. By being a
member of the Environmental Agency, Switzerland can contribute towards
this cooperation.
• Statistics: Broad-based statistical information is essential to support key
political and economic decisions. The statistical agreement harmonises and
optimises the exchange of comparable statistical data between Switzerland
and the EU.
• Culture: Participation in the EU film promotion programmes (MEDIA)
strengthens the role of film as an important part of Swiss cultural heritage.
• Education: Cooperation within EU training programmes provides access to
a wide range of training for Swiss nationals, and increases the quality of
training. This provides improved opportunities in the employment market.

8.7.4 Next steps: Signature and approval

There are nine negotiation results ensuing from the Bilateral Negotiations II.
Eight of these are agreements (processed agricultural products, statistics,
pensions, environment, media, Schengen/Dublin, fight against fraud, taxation of
savings), which need to be approved by Parliament. Three of the agreements
(MEDIA, Schengen/Dublin and taxation of savings) require amendments to
legislation in order to be implemented. The ninth negotiation result
(Education/vocational training/youth) consists of a declaration of intent.

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The Swiss Federal Council will submit the agreements as separate proposals to
Parliament. However, the agreements shall be submitted to Parliament
collectively. At the same time the Federal Council submits the application for an
accelerated parliamentary approval process. The agreements should be
discussed in both councils in the same session.

The Federal Council also submits seven of the Bilateral Agreements II (statistics,
pensions, environment, media, Schengen/Dublin, fight against fraud, taxation of
savings) to the optional referendum in accordance with Article 141 of the Federal
Constitution. The Federal Council bases this recommendation to Parliament on
the constitutional clarifications provided by the interdepartmental “approval
process” work group led by the Federal Office of Justice. The agreement
concerning processed agricultural products does not meet the requirements for
the optional referendum, as it is merely an adaptation of the existing protocol 2
of the 1972 Free Trade Agreement.

None of the agreements meet the constitutional criteria for submission to the
compulsory referendum (Article 140 of the Federal Constitution). This would
require accession to a supranational community or organisation for collective
security. Nor are these conditions fulfilled with regard to the Schengen/Dublin
association agreement. Switzerland’s participation in Schengen does not amount
to accession to a supranational community, but is instead a normal contract
covering international cooperation. On the basis of the negotiation results
achieved, it will only be possible for Switzerland to adopt any future Schengen
law after conclusion of a new contract under international law. This requires each
time a new Swiss approval process each time (Federal Council, Parliament,
Referendum). Consequently no transfer of sovereignty to a supranational
community takes place. Failure to adopt any new Schengen law would ultimately
result in certain termination of the agreement.

On 25th June 2004 the agreements were initialled and then underwent
consultation procedures. The results of this clearly showed that Bilaterals II were
supported unanimously by industry, and by the majority of parties, organisations
and federations. The cantons, too, were unanimous in their support. The
agreements were strongly rejected only by the Swiss People’s Party (SVP). The
Federal Democratic Union (EDU) and the Campaign for an Independent and
Neutral Switzerland (AUNS) expressed opposition to Schengen/Dublin. Numerous
shooting associations criticised the proposed changes in weapons laws, and the
Federal Council has dealt with the main concerns by amending its proposed
amendments to the Swiss Weapons Act.

The Federal Council issued the message on Bilaterals II on 1 October 2004, and

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the agreement was signed in Luxembourg on 26 October 2004. Parliament
debated the message and the agreement during the winter session: All the
agreements were accepted in the National Council with a clear majority, and in
the Council of States, with the exception of Schengen/Dublin, the result was
unanimous. The Schengen/Dublin association agreement met with somewhat
more resistance. In the National Council, this agreement was accepted with 129
votes in favour and 60 votes against it and in the Council of States, with 36
votes in favour and 3 votes against it.

In line with the application of the Federal Council, the Federal Assembly will
submit seven agreements (statistics, pensions, environment, media,
Schengen/Dublin, fight against fraud, taxation of savings) for the optional treaty
referendum. None of the agreements shall be submitted for imputation of the
compulsory referendum. The countdown for the referendum started with the
publication of the Federal decrees on December 21, 2004, in the federal journal.
The deadline for the referendum is March 31. The earliest possible date for a
vote is June 5, 2005.

8.7.5 Overview of Bilateral Agreements II Switzerland - EU

• Cooperation in the fields of justice, police, asylum and migration

(Schengen/Dublin)
• Taxation of savings
• Fight against fraud
• Processed agricultural products
• Environment
• Statistics
• MEDIA
• Education, occupational training, youth
• Pensions

8.7.5.1 ooperation in the fields of police, justice, asylum and migration

(Schengen/Dublin)

Criminals who are specifically choosing to operate across national borders

commit an increasing number of crimes. This development presents new
challenges for security measures tailored to individual countries, and calls for
greater international cooperation. The individual countries also face a similar
challenge in combating illegal immigration and coping with asylum migration.

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The EU is Switzerland’s most important partner in these areas. For some time
the EU has been promoting determined and well-targeted cooperation for
security and migration. Central to this cooperation is the Schengen/Dublin
security and asylum system, in which Norway and Iceland, non-Member States of
the EU, have also been participating since 1999. With a bilateral agreement to
Schengen/Dublin, Switzerland will have access to the instruments for cooperation
on security and asylum within the EU.

• Schengen promotes free movement of person’s traffic by essentially

removing controls on persons at the internal boarders of the EU. At the
same time as reinforcing internal security, controls on external borders of
the “Schengen area” are tightened and cross-border cooperation between
police forces and judicial authorities within Schengen states is
strengthened. Connection to the Schengen Information System (SIS), the
pan-European electronic investigation database, is particularly important
for Switzerland. This has proved to be an efficient means of fighting cross-
border crime (such as illicit smuggling of migrants, and also the trafficking
of persons, drugs and arms). The ability to exchange information rapidly
by computer has increased the effectiveness of inspections and of
international arrest warrants. Legal assistance is also regulated within the
scope of Schengen cooperation. A special provision ensures that Swiss
banking secrecy is protected with regard to direct taxes. Switzerland does
not have formal co-decision rights in relation to future Schengen law, but
it does have extensive possibilities to participate in the decision shaping
process. However, new laws are not adopted until they have been
approved under the Swiss legislation process, consisting of the Federal
Council, parliamentary approval and a referendum if necessary. Failure to
adopt a legal act could ultimately result in termination of the agreement,
so Swiss sovereignty is thus preserved.

• The Dublin cooperation lays the foundation for sharing the burden of
managing asylum migration fairly, efficiently and equally. Only one EU
state is ever responsible for conducting the procedures relating to an
asylum case. The state responsible is determined by means of various
criteria, this in turn ensures the right to an asylum hearing. The tendency
towards countries trying to reduce the attraction they hold for asylum
seekers in relation to other countries can be moderated. At the same time
the burden is reduced from national asylum systems. Thanks to the
electronic database, EURODAC, which stores and identifies the fingerprints
of asylum seekers, repeated applications can be identified and the
applicant can be repatriated to the state responsible for the asylum
proceedings. Asylum proceedings due to “asylum shopping” are inefficient
and cost-intensive. With Dublin, their number can be reduced. According
to unofficial estimates, currently around every fifth application in

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 Switzerland is a second application. By participating in Dublin, the burden
on the Swiss asylum system would be significantly reduced. At the same
time, a participation in Dublin would help to prevent a further tightening of
Swiss asylum law. By not participating in Dublin, the reverse would be
true. Switzerland would be the sole second port of call for asylum
applications in western Europe and it would need to be prepared for an
increase in asylum applications, and therefore in additional costs.

8.7.5.2 Taxation of savings

The Federal Council has always shared the viewpoint of the EU, that income from
savings should be taxed appropriately. It stresses that it is not in Switzerland’s
interest to attract businesses that are seeking to avoid the planned EU regulation
for cross-border taxation of savings. For this reason, Switzerland has already
declared that it will use its legal system to make its financial centre unattractive
for these types of financial transactions. However, this is on condition that the EU
introduces an efficient system for the taxation of all income from savings.
Furthermore, this system should not just apply to Member States and their
dependent or associated territories, but also to the relevant financial centres
outside the EU.

Under the agreement negotiated with the EU, Switzerland undertakes to impose
a withholding tax on all income from savings originating abroad, which will be
effective for natural persons with tax residency in an EU Member State. This
withholding tax increases progressively up to 35%. It can be replaced by a
voluntary disclosure of the interest payment, on the express advice of the person
receiving the interest, to the revenue authorities of the country of domicile for
tax purposes. In addition, Switzerland undertakes to provide administrative
assistance on request to the EU Member States in cases of tax fraud or similar
serious offences.

There will be no automatic exchange of information between tax authorities. With

the withholding tax model, Switzerland can be sure on the one hand that the EU
directives for the taxation of savings cannot be avoided by using Switzerland. On
the other hand, the Swiss legal system and banking secrecy remain protected.

The agreement also provides for the abolition of tax on payments of dividends,
interest and licence fees between affiliated companies.

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8.7.5.3 Fight against fraud

The agreement on combating fraud aims for more intensive cooperation against
smuggling and other types of offences, in the areas of indirect taxes (customs
duty, value added tax, consumer tax), and subsidies as well as in public
procurement. With this in mind, administrative and legal assistance will be
organised more effectively and the exchange of information with administrative
and legal authorities in the EU strengthened.

Stronger cooperation against criminal activity is as much a benefit for the EU as

it is for Switzerland. The EU benefits by being able to conduct the fight against
cigarette smuggling and other fraudulent activity more efficiently, thereby
avoiding revenue losses. Switzerland benefits as its financial centre has no desire
to be abused as a hub for fraudulent business activities.

8.7.5.4 Processed agricultural products

The agreement on processed agricultural products satisfies one of Switzerland’s

main economic interests within the second series of bilateral negotiations: In
future, companies within the Swiss food industry will be able to make duty-free
exports of a wide range of products to the EU market. For Swiss agriculture, this
improved competitiveness for the food processing industry opens up new
opportunities. And prices for the consumer will tend to fall as a result of stronger
competition.

Processed agricultural products (e.g. chocolate, biscuits, soups, sauces, pasta,

instant coffee) occupy a unique place between industry and agriculture, in so far
as they consist partly of agricultural raw material and partly of an industrially
manufactured product. Customs duties have already been abolished on the
manufactured part of the product. On the agricultural part, the “raw material
handicap” can be compensated by means of a price compensation mechanism.
That means that competitive disadvantages due to large differences in the price
of raw materials can be compensated by customs duties and export subsidies at
the level of the price differences.

The bilateral agreement on processed agricultural products results in the

following improvements:
• Revision of the price compensation mechanism: As part of a simplified
price compensation mechanism, the EU undertakes to completely abolish
its customs duties on Swiss products and also to waive export subsidies.
For its part, Switzerland will reduce its customs duties and export
subsidies or, in certain cases, will likewise abolish them completely.

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 • Extension and revision of scope of application: The range of products
covered by the agreement has been extended.

8.7.5.5 Environment

The European Environmental Agency (EEA; founded at the beginning of the

1990s) is responsible for gathering and analysing data on the state of the
environment in European countries, as well as ensuring that this data is
comparable. The EEA thus provides the scientific basis for a sound EU
environmental policy. In view of the cross-border nature of environmental risks,
the EEA has become a key instrument for cooperation on environmental policy
between the European states.

Closer cooperation in environmental matters through Switzerland’s membership

of the European Environmental Agency is the subject of an environmental
agreement between Switzerland and the EU. Switzerland can thus increase its
commitment to environmental protection at a European level. Until now,
Switzerland has only participated informally in EEA activities, on the basis of
selective participation in projects. Membership of the EEA means Switzerland will
actively participate in organising projects and research at a European level, gain
full access to the EEA’s pan-European comparable environmental data and, for its
part, will be able to submit comparable Swiss data as a basis for an effective
environmental policy.

8.7.5.6 Statistics

As the world we live in becomes more and more complex, statistical data
becomes an increasingly indispensable basis of information for well-founded
decisions. Statistics play a major part in providing a source of factual, reliable
and relevant information in politics and the economy, as well as in day-to-day
life.

Eurostat, the Statistical Office of the European Union (EU) is responsible at a

European level for gathering and publishing data supplied by the national
statistical institutes. Eurostat is also responsible for the comparability and
monitoring the comparability of national data on the basis of standard definitions
and criteria for data collection.

The bilateral agreement on cooperation in the area of statistics regulates the

progressive harmonisation of statistical data collection between Switzerland and
the EU. Comparability of Swiss and European data in such important areas as

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trade relations, the employment market, social security, transport and the
environment is thus guaranteed in the medium term. Switzerland also gains
improved access to data published in the EU and gains prominence in Europe, in
so far as greater quantities of Swiss data are published in statistics compiled by
Eurostat.

8.7.5.7 MEDIA

One of the priorities within the EU audiovisual policy is the promotion of

European films. The EU has set up the MEDIA promotion scheme to help
European production overcome various difficulties in the face of non-European
competition. The EU terminated Switzerland’s participation in this programme as
third country after rejection of the EEA in 1992.

The aim of an agreement for Switzerland to participate in both MEDIA

programmes currently running (MEDIA Plus and MEDIA Training programmes)
highlights Swiss interest in the cooperation to promote European audiovisual
productions. Participation gives Swiss television programmes and filmmakers
equal rights of benefit from EU support measures.

The agreement grants full participation in the EU programmes – MEDIA Plus

(promoting the creation and distribution of Community audiovisual works) and
MEDIA Training programmes (training programmes for professionals in the EU
audiovisual programme industry). Current Swiss legislation in the audiovisual
field is already largely compatible with Europe, which satisfies a key requirement
for participation in the MEDIA programmes. An amendment to Swiss legislation is
necessary only in the matter relating to quotas for European productions, fixed
at 50%.

8.7.5.8 Education, occupational training, youth

The EU promotes the mobility of students, apprentices and young people within
the framework of the Community programmes known as SOCRATES (general
education), LEONARDO DA VINCI (occupational training) and YOUTH (extra-
curricular work). These people can build their international experience at either
an academic or a practical level through periods of residence abroad or
cooperative projects under the education, vocational training and youth
programmes. Not only does studying abroad enrich young people on a personal
basis, it also improves their future prospects in the labour market.

Over thirty countries currently participate in these three EU programmes. At the

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moment Switzerland is only able to participate on a project basis, supported by
federal funds. It would like to raise this status, with participation to be legally
established and thus guaranteed, which would grant equal rights to Swiss people
participating in projects relating to the three programmes with regard to project
initiatives and input to projects.

Swiss participation in the current programmes (2000-2006) was not possible for
the EU for legal reasons. For this reason the EU Council of Ministers and the
European Commission have declared their intention to allow Switzerland to
participate in the future generation of programmes (from 2007).

In the meantime the current project-based cooperation will be consolidated.

Switzerland and the EU have agreed in the form of an exchange of letters that
both partners will have a high-level meeting once a year to set about
consolidating cooperation as well as preparing for talks on full participation.

8.7.5.9 Pensions

In the absence of an agreement between Switzerland and the EU on double

taxation, pensions of retired EU officials living in Switzerland are taxed twice:
The EU imposes a tax at source on pensions paid to retired officials and
Switzerland subjects these people to income tax on the residual amount. Within
the scope of the Bilateral Negotiations II, Switzerland waives this tax. However
this tax exemption is only granted if the EU also effectively taxes income from
pensions at source. This arrangement only affects around 50 pensioners.

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 - ANNEX: STATISTICAL GRAPHICS -

Figure 41 : Comparison between Switzerland, the EU – 15 and new EU

members: average annual growth rate 1994-2000 (in %)

Figure 42 : Swiss Imports and Exports 2002

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 Figure 43 : Swiss direct investments in the EU-15 in CHF bn.

Figure 44 : Swiss direct investments from the EU-15 in Switzerland in CHF bn.

Figure 45 : Permanent foreign resident population in Switzerland; proportion (in

%) by nationality at the end of December 2002

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 Map 40 : Trans-Alpine movements of Goods: Transit Routes

Table 35 : Foreign trade

Total in
EU in EFTA in Germany France Italy in USA in Japan
Year Million
% % in % in % % % in %
CHF
Swiss Exports
1999 114445.5 62.6 0.5 23.3 9.4 8 11.4 3.6
2000 126549.1 62.6 0.5 23.3 9.4 8 11.4 3.6
2001 131717.1 61 0.5 22.2 9 8 10.6 3.9
2003 130380.5 60 0.4 20.8 9.2 8.3 11 3.8
Swiss Imports
1999 113415.6 79.7 0.3 32.5 12.5 10.2 6.1 3
2000 128615.3 79.7 0.3 32.5 12.5 10.2 6.1 3
2001 130052 79.9 0.3 32.2 11 10.2 5.3 2.4
2002 123125 80.4 0.2 32.3 10.4 10.8 5.3 2.1
Source : La vie économique; dec., 2003

Table 36 : Direct Investment

Swiss Investements Abroad Foreign Investment in
switzerland
Year Total / million In Eu / in % Total / million In Eu / in %
CHF CHF
1999 311 258 48.2 121 561 62.0
2000 381 910 48.8 142 055 59.5
2001 415 646 47.2 149 731 61.5
Source: La vie économique; dec., 2003

Table 37 : Manpower in Swiss Firms Abroad

Year Total EU / in% North America
/ in %
1999 1 640 957 48 17.8
2000 1 763 022 46 19.4
2001 1 718 681 44.3 19.5
Source : La vie économique; dec., 2003

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 Table 38 : Commercial Exchange with the EU according to product categories 2001
Part commercial trade with the EU in %
Products Exports Imports
Agriculture and forestry 3.2 8
Chemical products 34.4 22.1
Metals 7.5 7.6
Machines 24.3 22.1
Precision instruments, watches, jewels 17.3 6.6
Source : La vie économique; dec., 2003

able 39 : Foreigners in Switzerland (12/2002)

Number In %
Eu & EFTA 816 152 56.4
Serbia and Montenegro 198 092 13.7
Turkey 78 846 5.4
Others 354 222 24.5
Total 1 447 312 100
Source : La vie économique; dec., 2003

Table 40 : Swiss Citizens Aboard ( June 2002)

number In %
EU 345 208 59.5
EFTA 5 902 1
USA 67 929 11.7
Canada 34 192 5.9
Australia 24 924 4.3
Others 102 241 17.6
Total 580 396 100
Source : La vie économique; dec., 2003

Table 41 : Growth of GNP in %

1997 1998 1999 2000 2001 2002
Switzerland 1.7 2.4 1.5 3.2 0.9 0.2
Germany 0.8 2 2 2.9 0.8 0.2
France 1.9 3.5 3.3 4.0 2.2 1.2
Italy 2.0 1.8 1.6 3.2 1.8 0.4
Great Britain 3.4 2.9 2.4 2.9 2.1 1.7
EU 2.6 3 1.2 3.1 1.8 1.1
USA 4.5 4.3 4.1 3.8 0.3 2.4
Japan 1.8 -1.1 0.1 2.8 0.4 0.1
OECD 3.6 2.4 3.1 3.9 0.8 1.8
Source : La vie économique; dec., 2003

Table 42 : Rate of Unemployment in % of Wage-Earners

1999 2000 2001 2002
Switzerland 2.7 2.0 1.9 2.8
Germany 10.5 9.6 9.4 9.8
France 10.8 9.5 8.7 9.0
EU 8.7 7.8 7.4 7.7
USA 4.2 4.0 4.8 5.8
Japan 4.7 4.7 5.0 5.4
OECD 6.7 6.3 6.5 7.0
Source : La vie économique; dec., 2003

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 9. MOBILITIES WESTERN
IN MEDITERRANEAN SEA: THE OTHER
GEOGRAPHIC CONTINUITY.

Mohamed Charef
M’Hammed Whabi
ORMES Université Ibn Zohr d’Agadir Maroc

9.1 Introduction

In this 3rd millennium beginning, Morocco faces strong changes in the migration
pattern which are the consequences of an endogenous and exogenous paradox.
Because of its specific geographical position, Morocco has to act more and more
like a glacis at the European Union frontier. After being for years an emigration
country, it tends to become an immigration one, but above all a transit space,
like Mexico located on the United States border.

Some preliminary observations will lead us to evaluate the real issue of labour
migration in Western Mediterranean Region and in Morocco in particular.

In the World, the number of migrants grew from 75 millions in 1960 to 100
millions in 1980 and finally reached 175 millions in 2000. The latest data
proposed by the CMMI 36 are 200 millions international migrants (only those that
lived out of their country of origin for more than one year) and 9.2 millions of
refugees. Those figures are equivalent to the population of Brazil. This report
underlines the attractiveness of developed countries where the number of
migrants grew from 48 millions in 1980 to 110 millions in 2000. Majority of
migrants are in United States (35 millions), followed by the Russian Federation
(13.3 millions), Germany (7.3 millions), Ukraine (6.9 millions) and India (6.3
millions). China is the country that sends the most numerous migrants with 35
millions Chinese abroad, followed by India (20 millions) and Philippines (7
millions). So, at the World level during the last four decades, the figures show
the increase of migratory flows, even if they vary a lot between each macro-
region. After the domination of South-North flows, the South-South flows
increased during the 1980s. That is the consequence of the increasing number of

36
Les éléments ci-dessous sont transposés du site web : Migration in an interconnected world : New directions
for action. Report of the Global Commission on International Migration (GCIM). 2005. Switzerland. 88

259
political and “environmental refugees” 37. According to the UNHRC in 2000,
5,473,000 refugees (among the 21,798,000 who are under its responsibility) are
in Africa. Among them 3,627,000 are “refugees” and 1,846,000 are “displaced”
persons.

African migrants go to Asia, United States but above all to Europe. The number
of migrants of African origin in OECD countries is estimated at 7 million (2004)
from 82 millions African migrants, i.e. 8.5%. Among those 7 millions, the
migrants from Northern Africa are 3.2 millions (45%), which is very similar to
the number of Asian migrants (3.1 millions). 94% of Sub-Saharan African
migrants and 98 % of North African are concentrated in 10 countries. France
gathers respectively 39% and 72% of them. The second country for the number
of migrants from North African is Spain with 400 000 migrants. African migrants
are numerous in United States and in United Kingdom (2 millions).

In the same time, the European Union tends to reduce the immigration flows by
increasing the controls at the borders and the difficulties to obtain a visa.
However, meanwhile, another trend encourages the migration of skilled migrants
toward developed countries, leading to the brain drain of competent people from
the less developed countries.

Without real migration policy, one could believe or fear that the closure of the
borders would lead to limit the departures from emigration countries. However,
considering the demographic and economic conditions in those countries and the
growing disparities with developed countries, the departures would certainly be
maintained if not increased.

More and more, the main factor of migration is the search of an employment.

That is true for Morocco and other sub-Saharan countries and particularly West
African ones. A survey on Moroccan migrants (Hamdouch B., 2000) set out
during the summer 1998, showed that it was the main reason for migration for
40% of migrants since 1975, (even if the number of departure because of family
reunification, or upper academic studies increased). The figure was less that 17%
before that date.

37
When the equilibrium is broken between the population and resources is durably broken, but also starvation
and epidemics or other natural catastrophes.

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 9.2 Moroccan migrants in Europe and in the World

Migratory movements have been for many years an important feature of the
Moroccan socio-economic development, particularly for peripheral regions such
as Souss and Rif. The first destination was Western Africa that has rapidly been
replaced by Algeria and Tunisia as destinations but also as stopover to Europe.
From First World War to the beginning of the 1970s, Moroccan migration
matched the classical pattern of “repulsion/attraction” between two places.
Mobilization to take part to the 2 World Wars and requisitioning of colonial
workers to sustain the French economy increased the migratory movements 38.
Then, the first Moroccan migratory flows toward France were mostly imposed.
The situation is quite different now. More, until 1973, in most of European
countries and both from host countries and migrants’ points of view, migration
was considered as provisional.

Since 1986 Moroccan migration undergoes a slowdown because of European

border restrictions. However, it quickly set up appropriate strategies in order to
by pass the European regulations. Now migration patterns are quite different. On
the one hand, spouses and children join the fathers and students and educated
people migrations increased, causing a brain drain (AMERM, 2002). Women and
children migrations increased too (Charef M., 2002). On the other hand,
voluntary illegal migrations replaced involuntary legal ones toward Europe or
elsewhere. Each year, more than 100,000 candidates to migration mix
themselves with tourists in Moroccan ports and airports. No other country in the
World has even faced such a population drain during so long a period of time
(Bertoin, 2005).

Nowadays, Morocco depends as much on this phenomenon that provides the

financial resources necessary to its economic stability, as on strategic economic
sectors as agriculture, phosphate exploitation and tourism.

9.2.1. A globalized migration

The economic crisis during the 1970s, the first oil crisis, the increase of
unemployment and the coming back of xenophobic and demagogic discourses
lead numerous States to close their borders and to encourage migrants to go
back to their countries of origin. In the same time, the family reunification is set
up in order to soften this politic option. This measure leads to the feminisation

38
One should note that the pro-Franco Spain requisite numerous Moroccans during the civil war, but that did not cause any
migratory flows.

261
and rejuvenation of the migratory flows and reduces the number of men living
alone in hotels, boarding house or residential hotels that were the main
characteristic of Moroccan migration till 1975.

The closure of European borders leads people who wish to migrate to choose
other destinations. That leads to the broadening and therefore the globalisation
of the migratory system since the 1970s. Moroccan migrants are still numerous
in Europe but some of them choose now to go to North America, to Asia,
particularly Japan, and to South America.
Map 41 : Number of Moroccan citizens listed in consular services, by region, in
2004 39.

39
All the maps of this case study have been produced by the Moroccan partners. The drawing of borders
represented on these maps do not necessary reflect the opinion of the other partners of the project nor the opinion
of the ESPON monitoring committee.

262
 ƒ Moroccan migrants are attracted by developed countries where their
number is still growing. According to the Moroccan Ministry of Cooperation
and Foreign Affairs, it grew from 1.03 million in 1995 to 2.2 in 2001 to
reach 3.08 millions in 2004. That represents nearly 10% of the Moroccan
population and that makes Moroccan migrants more and more visible in
the World. The 31st December 2004, 2,616,871 Moroccan resided in
Europe, 282,772 in Arab countries, 178,914 in Americas, 5,371 in Africa
and 5,167 in Asia and Oceania. The growth of the Moroccan migrants
varies according to the regions or the countries considered. Their number
is increasing in new destination countries like Spain, Italy, Canada and
United States whereas the most important flows were previously oriented
to France, Belgium, Netherlands and Germany.

Mp 42 : Variation of the number of Moroccan citizen listed in consular services,

by countries, between 2002 and 2004.

263
To conclude, the Moroccan migration shifts from traditional destinations where
the borders are now closed, to new and more distant horizons as Canada and
United States.

9.2.2. A presence still important in Europe

For historical reasons, France was for a long time the main destination of
Moroccan migrants. But after the Independence, the labour demand of other
Western European countries broke this “tête-à-tête”. The spatial pattern of
Moroccan migration in Europe changed with the raise of new destinations like
Belgium, Netherlands and Germany. When those countries started to close their
borders after the oil crisis and economic depression, migrants chose other (and
more discrete till there) destinations such as Spain and Italy. In those countries,

264
migrants can not pretend to salaried works like in the industry sector but to
marginal works or sub-contracting ones that are in the same time mostly illegal
and insecure.

The presence of migrants of Moroccan origin started in the 1930s but it was
never important in number. It was only after the pro-Franco period and the
economic take off that it really started to increase to reach actual numbers.
Spain, which was an emigration country, was first a stopover between 1975 and
1985 before to become a attractive pole and destination country (Colectivo Ioé,
1994) welcoming mostly Moroccan migrants. In 1985, the proportion of
Moroccan residents in Spain was 5% compared to those in Belgium or
Netherlands. In 2000 this proportion is respectively 180% and 1987%. This
increase is very rapid, even if the numbers are still low in the new destination
countries, such as in Portugal. In traditional immigration countries, the number
are stabilising or even decreasing in African and Arab countries. In France, there
were 260,000 Moroccans in 1975 40, 441,300 in 1982 and 584,708 in 1990. In
Netherlands, the increase is also impressive (about 10 in 1960, 21,000 in 1969
and 156,000 in 1990). In Germany, the Moroccan presence is weaker, with
30,000 persons at the beginning of the 1970s and 62,000 twenty years later.
That distribution was roughly similar during the 1990s, even if the destinations
diversified and even if the sociologic profile of migrants changed.

40
Ces statistiques sont issues de l’article de Mohammed Charef, elles ne comprennent que les individus
immatriculés par les services consulaires. Elles permettent pourtant d’avoir un panorama relativement clair.

265
 Map 43 : Number of Moroccan citizens listed in consular services in 2004.

Those numbers are not really the exact ones because of the development of
naturalizations among the Moroccan community residing abroad (Belbah M.,
Chattou Z., 2002). For example, between 1961 and 2000, more than 183,000
persons of Moroccan origin became French. That phenomenon concerns women
and men of all ages and all socio-professional categories. It started slowly before
1973 with less than one thousand naturalizations per year. It increased between
1974 and 1990 with an average of 2,500 per year. After that date, more than
10,000 were naturalized each year.

Today, following the formation of “installed and stabilised ethnic communities”,

Moroccan migration became the place of a real migratory circulation (Charef
1999). It is “complex”, despite its apparent simplicity, and changing, despite the
multiplication of rules that try to slow down or stop the flows. It is supported by
the development of the means of transports and communication. The
establishment of nation states, with closed borders and national laws, reduced
the space left to migratory flows and forced the migrants to circulate in tightened
spaces. Each time a migrant tries to cross a border, he faces many obstacles like
material obstacles, social norms or laws and does not have other choice than to

266
“burn” them, as Moroccan migrants say. Henceforth, despite the growing closure
of borders, the Moroccan migration increase and diffuse all over the World.

Map 44 : variation of the number of Moroccan citizen listed in consular services,

by country, between 2002 and 2004

9.2.3. Moroccan students in Europe and in France.

One can observe a decrease of the number of departures. Many factors could
explain that phenomenon: to proceed to the inscriptions in universities aboard is
more and more difficult; the Moroccan government stopped to deliver fellowship
to students abroad; the increased difficulties to find a job, even with a diploma;
the raise of a new generation, more arabized that scarcely speaks foreign
languages. However the number of departures is still high and it concerns more
and more Ph D students. Moroccan students abroad are about 33,340 in 1992,
i.e. 13.1 % of the total of Moroccan students.
In 1990-91, 25,894 Moroccan students were in France, 4,737 in Belgium, 849 in
Spain, 422 in Germany, 53 in United Kingdom. The small numbers of students in
those countries can be explained by language problems, but also because the
fees for the studies are higher than in France. More historical links and the
presence of numerous Moroccans in France explain such a high number. France

267
attracts a lot of Moroccan students that are the most important foreign group
with more than 15% far before Algerian ones with 8.5%. In France, 40.7% of
Moroccan students are women in 2000-01.
In 2000-01 they were distributed in the following academic fields:
- 26.3% in science and technique and “Grandes Ecoles”
- 23.2% in letter and human science
- 20.9% in economic science
- 11.5% in medicine
- 9.8% in laws in politic science
- 7.9% in IUT

Moroccan students represent 33.6% of students from South-Mediterranean

countries in European Union. Morocco is the 3rd sender of students in the World,
with 3.1% of foreign expatriated students, after China (8%) and Japan (3.4%).
Hallary C. (1994) notes that Morocco has the most numerous and diversified
student diaspora in European Union. For that reason, he compares Morocco with
Asian new industrial countries. Morocco has the same role toward France as
South Korea toward the United States.

9.3 Migrants: essential contribution to Moroccan economy and

society.

Like Tunisia, Morocco is interested by the earnings of its nationals living abroad,
certainly because it does not possess gas and oil resources, contrarily to Algeria.
As soon as in 1966, it tried to set up a system to collect the money of migrants
and to transfer it to Morocco by the mean of the Banque Populaire and its branch
offices in European Union, and by incentive actions like the parity between
French Franc and Dirham, or the attribution of constructible lands (Charef,
1999). Some private banks followed this example contributing to set up a
network of Moroccan bank offices in the main European cities where Moroccans
are concentrated. This policy happens to be a success as the number of financial
transfers is still growing. Each time a slowdown occurred, the authorities set up
appropriate incentives.

9.3.1. Profitable states efforts

Financial transfers from migrants have been multiplied by four between 1966
(158 millions of Dirhams) and 1972 (640 millions). That growth is correlated to
the number of Moroccan residents abroad, but also to the increase of salaries in
European Union and to the development to seasonal migrations. During the
1980s, the transfers have been multiplied by 3, even if an important fall occurred

268
in 1988 (20% compared to 1987). That kind of fall contributes to mobilise the
State authorities (Belguendouz, 1992) and policy makers that try to restore the
confidence of the banks and of real estate and investment sectors (Errachidi,
1993).

The first years of the 1990s have been characterised by an impressive increase
of transfers that reach the amount of 16.5 billions of Dirham in 1990. That is due
to the devaluation of that money by 10% in 1990. Observing the variations
during that decade, one should note that the Gulf War did not really affect the
Moroccan transfers. In 2001, the level of 30 billions was reached. That ranks
Morocco on the 5th position in the World for the amount of remittances, after
large countries like India, Philippines or Mexico.

Figure 46 : monetary transfers from Moroccan abroad (millions of dirhams)

20000

18000

16000

14000

12000

10000 Amounts

8000

6000

4000

2000

0
68

70

72

74

76

78

80

82

84

86

88

90

92

94

96
19

19

19

19

19

19

19

19

19

19

19

19

19

19

19

Source: Bank of Morocco

9.3.2. Geography of fund transfers

The numbers of origins of transfers follows the geographical dispersion of

Moroccan migrants. In the 1960s and 1970s, France was the main destination of
Moroccan migrants and therefore the main origin of transfers: it represented
93% of transfers toward Morocco (Baroudi A. 1978). Since the middle of the
1970s, Belgium, Netherlands and Germany also contribute to these transfers.
But what has to be underlined is the increasing share of Spain, Italy and Arab
States, even if in the two first ones the illegal migration is numerous, that means
that workers are concentrated in low wage sectors and send no money by a legal

269
way. The increase of migrations toward North America at the beginning of the
1980s leads to a relative decrease of the share of transfers from Europe which
still represented 81% of the total flow in 1985.

9.3.3. Moroccan bank network in Europe

In Europe the "Banque populaire du Maroc" is the most present with 36 windows
and 197 employees, far before the "Banque commerciale du Maroc" (B.C.M.) and
the "Banque Marocaine du Commerce" (BMCE). However, the latter is in the
second position as regard to the share of transfers (9%) when the B.C.M.'s share
is 7%. Those banks have branches all over Europe, in France, Belgium,
Netherlands, Great Britain, Italy and Germany and aim to help the external
Moroccan trade and to attract the money of Moroccan residents.

Map 45 : transfer of funds from the Moroccan abroad to Morocco between 1990
and 1994.

270
Map 46 : transfer of funds from the Moroccan abroad to Morocco between 1999
and 2003.

Map 47 : Evolution of transfer of funds from the Moroccan residents abroad to

Morocco between 1990 and 2003

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9.3.4. Transfer usage

This financial godsend supports the balance of payments. The remittances are
one of the main resources of the country. That is why the authorities pay a lot of
attention to it and sets out different policies in favours of transfers.

From a social point of view, the migrant's role is more and more important and
nearly vital for the development of their home region. They set up projects to
improve the standard of living of their families: house building, shop or small
enterprise opening, improvement of farming techniques, well digging… But they
can also aim to help the village community. So migrants are organised in
collective development actions within the framework of associations. Acting as
genuine "small firms", those non governmental associations have a dense
network of relations and a high level of know-how in various domains. They can
contribute to well digging, electrification, repairing of roads and trails, building of
schools and medical dispensaries, buying of means of transports for the village…

Because of this monetary support, migrants could play a great role in the
regional and local development. But this support can have reverse unwanted
effects, and eventually no effects at all, if it is not integrated in a broader spatial
planning document which aims to reach a homogeneous development at the
regional scale.

But in addition, migrants are also a kind of mediators between their home
country and the rest of the World. Therefore, they play the role of "bridge-men".
They contribute to the diffusion of ideas and techniques. Their actions broaden
the local horizon in establishing connections between their home place and the
rest of the world. This action upgrades the image of voluntary work. The
transformation of local and regional society mechanism are on their way, but
they have to be supported and even more when one considers that the effects of
the intervention of migrants will be less and less perceptible in the future
because they more and more belong to an other space, that is the country of
residence. That is why it is essential to set up a policy to stimulate investments
and to root the migrants in the regional society, economy and culture.

The Moroccan government knew, first, how to attract the transfers. But, since
then, it did not succeed, or did not want to use it as a lever to develop the
country. Nevertheless, some local or regional studies (Charef M., Gonin P.,) show
the role of those transfers for the creation of new jobs in construction and
agricultural sectors (Berriane M., 1993). Moreover, this money helps maintaining
the social stability as it helps large joint families’ everyday life.

272
9.3.5. Migration: a bridge between the two shore of the
Mediterranean Sea.

Mobility is one of the most striking social phenomena at the beginning of the 21st
century. The life of migrants is punctuated by returns for the vacations of familial
events. Travels between country of residence and Morocco take place all the year
long, but especially during the summer vacation. The “season” starts officially on
June 15th and stop on September 15th. Rush periods are the following ones: from
June 25th to Jully 7th; from July 25th to August 7th; from August 25th to September
5th. In 1994, the number of entries of national in Morocco between June 15th and
September 5th were about 820,000 (that is an average of 10,000 entries each
day and 3,500 cars). But the variation is very important according to the period
with a concentration between the end of July and the beginning of August. Till
2000, the registered travels hardly reach one million. In 2003, more 2.3 millions
Moroccans resident abroad came in Morocco, 2.5 in 2004. Tanger is the main
point of entry and regularly undergoes dramatic increases of the traffic.

9.3.6. Holiday migrations: an other way to connect Morocco and

Europe

Until recently, each country crossed by Moroccan migrants for vacation had its
own laws. There was no harmonisation and coherence with the neighbour
countries’ to this respect. The lack of coordination in the implementation of
facilities and rest areas (lay-by) lead to the increase of road accidents, the
disorganisation of the dense traffic on roads and the congestion of port cities.
That compels Morocco and Spain, which are the most affected countries, to
coordinate their action in order to face the migrant flows.

A shy and nearly informal coordination started in 1983, initiated by the Spanish
“Traffic General Direction”, the Embassy of Morocco in Spain and some NGOs as
Spanish Red Cross and Moroccan Red Crescent. It led to the building of six rest
areas on the Spanish territory. This operation has slowly been institutionalised
and leads to a change in the Moroccan-Spanish relations. This seasonal
operation, called “transit operation”, has been improved each year and became
in 1991 the “Strait crossing operation” that implied in Spain:
- the General Direction of Traffic
- the General Direction of Civil Protection
- Malaga, Almeria, Ceuta and Melilla ports

On the Moroccan side, the following actors are involved:

- Moroccan Embassy in Spain
- Moroccan Red Crescent

273
 - Royal Gendarmerie
- National Commission for the Prevention of Road Accidents
- Under-secretary's Department of Ministry of Foreign Affairs in charge of
the Abroad Moroccan community.
- Hassan II Foundation for Moroccan Residents Abroad
- Local Authorities

The mixed Moroccan-Spanish commission meets several times a year to organise

the seasonal travel of Moroccan migrants. At the national level, the actions have
one objective: to make the travel easier. The actors of the Moroccan
transportation sector are implied in the operation and they are asked to set up
efficient equipments to face the seasonal flows.

9.3.7. The travel back actors

In 2004, Royal Air Maroc Company estimated that more than 230,000 Moroccan
workers used its aircrafts between Morocco and Europe that means around 20%
of the total number of passenger without taking into account the persons of
Moroccan origin who travel with a foreign passport. About 67% of the Moroccan
air traffic is with Europe. Since then, the share of Moroccan travellers on Royal
Air Maroc reached 33%. A new fact is the dispersion of those travels all over the
year, because of the retired migrants who are used to travelling 5 or 6 times a
year. They represent a precious clientele when the season is over.

Each year, under the impulse of authorities and in coordination with other
transportation actors, Royal Air Maroc sets up supplementary flights between
Morocco and the main migration countries. In 1994 the company added 175,000
seats and 230,000 in 2004 in order to handle the number of returns. The
importance of migrants is revealed by the creation of seasonal connections, for
example Al Hoceima-Amsterdam or Oujda-Bastia, Oujda-Dusserldorf. The main
customers of Oujda airports are migrants because tourism is not well developed
in the north-easter part of Morocco.

Some other air companies propose flights to Morocco such as Air France, in
accordance with bilateral agreements. The two countries companies have to
share the traffic in an equitable way: prices are often imposed and charter
companies are not allowed to transport Moroccan citizens (even if the double-
nationality allows travellers to benefit from the charter prices). But charters are
oriented to touristy places which are not the same as migrations regions.

With the implementation of the “open sky”, air transport between Morocco and
Europe will be more and more affordable. Without too high prices for Moroccan

274
residents abroad, the plane would have already attracted more passengers. Even
with the 30% reduction off granted by the companies to people that have a work
permit, tariff are still too high.

Figure 47 : Monthly travellers between France and Morocco between 1990 and
1995.

EVOLUTION MENSUELLE DES VOYAGEURS ENTRE LA FRANCE ET

LE MAROC ENTRE 1990 ET 1995

90000

80000

70000

60000

50000

40000 1995
1994
30000 1993
1992
20000
1991
1990
10000

0
Janvier Mars Mai Juillet Septembre Novembre

The “Compagnie Marocaine de Navigation” and other maritime companies in the

Gibraltar strait make more efforts to reduce the waiting time in ports, either by
renting additional boats or by increasing the frequency of travels. Migrants are
the main customers of those companies. Between June 1st and July 30th 1994,
there were 694,523 passengers. Most of them transited by one point of the
triangle Algésiras-Tanger-Ceuta (85%). The main reason of the domination of
those ports is that the fare to cross the Mediterranean Sea is very high from
other ports located out of the Strait (Malaga, Almeria and Melilla). It is so high
that even those who living in the north-eastern part of Morocco chose the Strait
path.

9.3.8. A perennial link between Europe and Morocco

In order to face the growth of exchanges between Europe and Morocco, and to
link the two continents, a perennial link through the Gibraltar Strait has been
evoked during Fes Meeting in June 1979, by the kings of Morocco and Spain. In

275
October 1980, a cooperation agreement was signed in which both countries
decided to create a commission aimed at programming and coordinating the
preliminary studies and to set up two civil societies in charge of those technical
and scientific studies.

Two projects are considered as possible, from a technical point of view: a railway
tunnel and a highway bridge between Cap Malabata in Morocco to Punta Paloma
in Spain.

- The railway tunnel would have between 38 and 53 kilometres lengths. It

would be made of two main galleries with a railway in each one, plus a
service gallery. Cars would be carried on a rail shuttle between two railway
stations. It is roughly the same functioning principle as for Euro-tunnel.
- The highway bridge will be made of a succession of spans of 3,000 to
3,500 metres long, in the part of the Strait where the depth is more than
50 metres. The concrete pillars could reach a depth of 300 metres.

9.4 Laws and migration management in Morocco

The tragic events of the 5 to 6 October night had to happen at Ceuta and Melilla
to attract the attention on the migrations realities in Morocco, and in the region,
and on the relations of Morocco with its northern and southern neighbours. The
global economic situation can turn people from all over the World into potential
migrants toward a small number of destinations. The increase of the
development level gap between northern rich and southern poor countries
reinforces the European attraction.

The continuous migration movements through Morocco results from the addition
of numerous factors that hamper the social and economical development of
Africa, such as the rapid demographic growth 41, the multiplication of armed
conflicts, the environmental problems, the more and more difficult socio-
economic situation and the lack of democracy and meritocracy. In addition, the
possibilities to migrate in wealthier and more stable neighbour African countries,
such as Côte-d’Ivoire, are more and more scarce.

The migration pressure its highlighted by dramatic events that are reported
nearly each day by media which publish the macabre list of the victims that
bump into the more and more hermetic border.

41
221 millions people in 1950 ; 800 millions today.

276
Because of its geographical situation, Morocco has to face growing flows of illegal
transiting migrants. European Union asks it to make more efforts to discourage
and stop those flows, trying then to externalise its border management and to
make it done by other countries (in Maghreb, in Eastern Europe and in Turkey).
Morocco then became the ultimate southern frontier of the Schengen space. But
it is very difficult for Morocco to handle alone the migration problem. Legal and
illegal migrations became a recurrent social and political issue in the African-
Mediterranean relations, as during the Barcelona meeting, but without any
concrete effect till now on the departure and transit countries. It seems that
European Union, like the United States and Canada, considers casually the
dramatic consequence of their migration policies. More, they are interlinked with
the contradiction that they argue on the benefit of liberalism but try to limit the
migrations of workers. In other words, they encourage the circulation of people
that make possible the capital circulation and in the same time they try to stop
the migration of people who are the victims of the circulation of capital
(relocation, flexibility, unemployment). And in the same time, numerous
European economic sectors welcome this illegal and exploitable work force. One
example is the employment of seasonal workers for fruits ad vegetable
harvesting that rarely follows the employment laws as it is shown by the living
and working conditions in some farms in Southern Spain. One can remember too
the dramatic events of El Ejido. Other economic sectors do not hesitate to recruit
illegal migrants: construction, textile, catering and hotel business.

9.4.1 Morocco between the devil and the deep blue see

Previous migration pattern was characterised by a place of departure and a place

of destination, without any twist and turn. Nowadays, migration paths are more
and more complex both in time and in space. In this context, Morocco plays an
important role as an interface between Africa and Europe in general, and
between Iberian Peninsula and Canary Island in particular, because it is placed in
a geographical strategic location, so close to the highly coveted European
continent.

Candidates to emigration come from numerous countries. They include the illegal
national migrants, whose number is slowly decreasing since 2002, due to the
security dissuasive measures set up by the Moroccan government and public
awareness campaign about the illegal migration dangers. The transit migrations

277
have increased since the mid-1980s, and the law-and-order measures to contain
illegal migration can not break the dream of a better life.

The desperate rush to force the way to Ceuta and Melillia by night contributed to
the production of striking pictures. The video surveillance cameras that
punctuate the railings provided quasi-instantaneous pictures of the assault. The
worldwide diffusion of these pictures will offend the sensibility of public opinions
on the both side of Mediterranean Sea and even further. However, the migrant is
far from being a breakage-neck or an adventurer.

9.4.2. Illegal migration, a long uneasy way.

From Agadès, that is the crossroad of the illegal migration, a way leads the
migrants to Tamanrasset and from there to Morocco, crossing a large desert and
inhospitable space. Migrants are vulnerable to controls (they have to circumvent
the check points or to pay the “controllers”), mechanical breakdown, climatic
risks like sandstorms, health problems (dehydration, diarrhoea, fever…), robbers,
swindler and other people that denounce them, and above all they have to find
an opportunity (administrative, human, temporal…) to cross the border. Some of
them have left their home and families for years, between 2 to 5 years according
to the testimony of Gambian and Congolese migrants. They stay for weeks or
months in some regions or cities, trying to take advantage from this forced stop
by working to earn something that will allow them to go on. Numerous examples
are in Algeria in the construction sector. More, women illegal migrants try to
compensate their low income by prostitution.

After many obstacles, the luckiest ones reach Eastern Morocco, near Oujda.
Some of them settle in frontier cities like Maghnia, (attracted as they are by the
closest locations near the frontier and the view on the Spanish coast from the
Moroccan shores), waiting for an opportunity to cross the border, alone or with
the help of a runner. They are then stopped very close from Europe. Each new
group which arrives increases the number of candidate migrants waiting for
departure.

9.4.3. Oujda, a crossroad

The migrants who manage to cross the border near Oujda, generally stay for a
while. Probably to have a rest, to get in touch with a frontier runner and to
choose the best option for their travel to Europe. Different testimonies underline

278
the permanent presence, for years, of illegal sub-Saharan migrants who stay in
the mountains, organised in small groups of 6 or 7 persons. During the day, they
stay in the universities and in campus, because those spaces are legally
preserved from police incursion but also because they receive help from
Moroccan and foreign students and teachers.

Some of them choose to carry on travelling. First, they take the public transports
by small groups, mixing with the population. But as their number increases, they
become more and more visible and the controls are more frequent and severe.
They have to take the informal way of transportation whose fare does not stop to
increase. The “normal” fare, plus the “risk” supplement puts a serious strain on
their migration budget and risks to jeopardize the payment of the travel through
the Mediterranean to Europe. The amount paid for the crossing is conditioned by
the location of the boarding point, by that of the arrival point in Spain, by the
offer, by the season and by the politic context.

9.4.4. the necessity to take short-cuts

When the Algerian-Moroccan border in crossed near Oujda, they are 3 solutions
to reach the Mediterranean Sea or Atlantic shores. Sub-Saharan migrants make
their choice by taking into account the controls intensity, the contacts at the
destination point and the existence of networks.
- The Nador direction leads to a crossing at Melilla or to an attempt to reach
the Spanish shore between Malaga and Almeria. The space between Oujda
ad Nador is a densely populated agricultural area. That is also a point of
departure of international migrants. A significant part of the local
population earns its living thanks to the smuggling of illegal migrants
between Algeria and Melilla. This way is not often chosen by migrants
because of geographical difficulties and because it is far from the Spanish
shores. In the “Gourougou” forest, 400 to 1000 policemen set up 113
actions between January and October 2005 and managed to arrest of
6,000 illegal migrants.
- Another option is to cross the Tanger region toward Ceuta or the Andalusia
coasts. It is the most utilized path, but also the more controlled one both
by Spanish and Moroccan troops. To cross the sea to Spain is very risky,
not to say fatal. The crossing is made by fragile fishermen small boats, the
so-called "pateras", equipped with a 40 to 60 horsepower engine and
overcharged. Sometimes, they carry 90 persons, as it was a case in 2005

279
 when one of these small boats sank near Tanger. A majority of departures
take place all along the Northern Moroccan coast, sometime until Kenitra.
- The third way cross Guercif, Fes, Rabat, Casblanca reaches the Saharan
region via Agadir. The aim is to get closer from the Canary Islands. When
the migrants, who travel in small groups, reach Rabat or Casablanca, they
are handled by a dense quasi-mafia network composed by touts,
sometimes compatriots of them who try to make little money and guide
them to Agadir. When they have reached Agadir, a new tout drives them
by truck or Land Rover toward Tan Tan. Then, they can be hosted in some
house or they camp near the city. Frugal meals are sometimes given to
them, generally water and bread with canned sardines.

9.4.5. All the Moroccan territories in concerned, but particularly the

Eastern part

Observation posts are set up and some 7 000 men are durably mobilised to
check the point of passage of illegal migrants, helped by 4 000 men from the
Royal Army Forces, Gendarmerie and other helps mobilised after the charges of
Sebta and Melilla. That leads to the arrest of some frontier runners and touts and
the seizure of the boats.

In the same time European Union puts the pressure on Morocco in order to make
it discourage the illegal migration flows. In counterpart, it offers logistic and
financial support. During the last meetings of Morocco and European countries,
since the end of the 1980, the illegal migration question was most frequently
raised. Each time, Moroccan authorities insist to make some European country
regularised the Moroccan migrant's situation. But each time European countries
seem to be more interested in the identification of presumed Moroccan citizens
that have to be expulsed.

One can wonder whether Morocco and other North African countries are able to
conceive and to implement a comprehensive migration policy. For the time being,
they simply try to cope with the phenomenon because they can not even control
the flows of departure from their own countries. Moroccan authorities are aware
of the sensible situation of Morocco as a transit area and try to attract the
attention of the international public opinion, without any positive effect until now.

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9.4.6. Moroccan migration laws.

Till now, as an emigration country, Morocco did not pay very much attention to
immigration phenomenon even if it is one the rare Arab country which has
ratified a large number of international texts that protect the migrant workers.
However, its old fashioned laws in that field dated from the French protectorate
and were no more useful till their abrogation by the 02/03 law. The analysis of
the legal framework is useful to observe the management of migration flows by
Morocco. This management mostly relies on United Nation principles even if
some countries in the region have not ratified them yet.

Table 43 : ratified conventions by Mediterranean countries

Convention 1989 Convention 143 Convention 1990

Country
WTO WTO United Nation
Algeria 19.10.62
Morocco 21.06.1993
Tunisia
Mauritania
Libya
France 19.03.1953
Italia 22.10.1952 23.06.1981
Spain 21.03.1967
Greece
Portugal 12.12.1978 12.12.1978
Malta

This situation is not specific to the Maghreb. The convention n°97 (1949) has
been ratified by only 42 countries and the n°143 by 18 countries only. According
to the WTO survey on worker migration, , in 2003, the main reasons invoked are
the principles of the equality of consideration between national and migrants, the
existence of free public services… Morocco is the only country that ratified the
United Nations convention (1990) on that aim to protect migrant workers and
their family members.

Morocco has voted laws that try to organise the migration and to protect the
migrants: the n°02-03 law (11 November 2003) that unified and harmonised the
previous laws and penal code, rationalised the rules of the strangers’ stays and
codified the infractions linked to illegal migration. The "stranger" is defined as
someone who does not have the Moroccan nationality or none nationality.
Generally Moroccan laws connected to the migration issue are harmonised with

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international norms. More, Morocco is now part of international organisations
that aim to protect the rights of migrant workers.

In the same time, a "Direction de la Migration et de la Surveillance des

Frontières" has been created in order to set out a national strategy to fight
against the smuggling of human beings and to monitor the borders. It has to
fight against the illegal migration.

9.5 Conclusion

The assault to barbed wire walls of Ceuta and Melilla are not only security
questions. Those walls are the symbol of the developing disparities between two
spaces and draw one of the most economic unequal borders of European Union.
Those assaults and migration flows are neither the responsibility of the sole
Morocco nor that of Spain. They set up the term of the relations between rich
and poor, North and South, European and African spaces. They have to question
us about the amount of sadness they are made of: poverty, starvation, armed
conflicts and lack of future prospect in most of African countries. Those events
were not only dramatic for the sole European and International consciences.
They also strike the Moroccan public opinion on a question they were hardly
aware of.

Nowadays, to think about the Mediterranean Sea Region, one have to think
globally, to think about complementarities, to find the way to mutual confidence
and to underline the convergences. It is necessary to understand the mobility by
underlying what phenomena are interlinking people and spaces instead of focus
on law-and-order policies.

There is an emergency for Europe to set up a global strategy on the migrations,

where Morocco should have a real place and not only the role of a watchman or
guard. Europe and particularly countries of the southern bank of the
Mediterranean must help Morocco and North-African countries in general to
become regional powers, for the interest of both spaces. In this perspective,
migrations should not be seen as a problem but as a bridge between shores, as a
window on the World for Africa and the living expression of our interdependency.

282
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