VYTAUTAS MAGNUS UNIVERSITY SOLVEIGA KURGONAITĖ EU S IMPACT ON REGIONALIZATION PROCESS IN THE MIDDLE EAST. Master thesis

Transcription

1 VYTAUTAS MAGNUS UNIVERSITY FACULTY OF POLITICAL SCIENCE AND DIPLOMACY DEPARTMENT OD POLITICAL SCIENCE SOLVEIGA KURGONAITĖ EU S IMPACT ON REGIONALIZATION PROCESS IN THE MIDDLE EAST Master thesis Diplomacy and International Relations programme, state code 621L20004 Political science study field Supervisor dr. Ieva Karpavičiūtė Defended prof. dr. Šarūnas Liekis Kaunas, 2016

2 List of tables LIST OF TABLES, SCHEMES AND GRAPHS Table 1 Current regional outcome 14 Table 2 Paradigms 15 Table 3 Template for assessing a national culture of peace 33 Table 4 Agglomeration coefficient in the US & France 36 Table 5 Equation of models for inflation and labor productivity in the US and France 38 Table 6 Equation of models for GDP per capita and employment rate in the US and France 39 Table 7 Equation of the models for economic growth and carbon emission 40 Table 8 Democratic participation in the Levant 49 Table 9 Open communication in the Levant 49 Table 10 Political Terror and Societal Violence Scale in the Levant 50 Table 11 Military expenditure (% of GDP) in the Levant 50 Table 12 Equitable & sustainable development (GDP per capita (Euros)) 51 Table 13 Societal cohesion and tolerance in the Levant in Table 14 Valuing of women and nurturance in the Levant 61 List of graphs Graph 1 Occupied Palestinian Territory Trades in Goods with the EU 43 Graph 2 Lebanon s Trade in Goods with the EU 44 Graph 3 Jordan s Trade in Goods with the EU 45 Graph 4 Israel s Trade in Goods with the EU 45 Graph 5 Syria s Trade in Goods with the EU 47 Graph 6 Economies per region with restrictions on the types of jobs women can do 52 Graph 7 Female participation in the labor force 53 Graph 8 Tigris and Euphrates 54 Graph 9 Projected Water Scarcities by Graph 10 Israel water delivery system and the Dan River (Shebaa Farms) 56 Graph 11 Sheeba Farms 58 List of schemes Scheme 1 Life cycle of clustering effect 19 Scheme 2 Localization and subsidiarity 23 Scheme 3 Cobweb model 28 Scheme 4 Kuznets curve: the ratio of GDP (%) and carbon emission (%) 31 Scheme 5 The EU s normative constitution 34 Scheme 6 European Union and its immediate neighborhood 42 2

3 TABLE OF CONTENTS SANTRAUKA 4 ABSTRACT 5 INTRODUCTION 6 1. THEORETICAL APPROACH ON REGIONALIZATION REGIONALIZATION ACCORDING TO LIBERALISM PARADIGM REGIONALIZATION ACCORDING TO CONSTRUCTIVISM PARADIGM RESEARCH DESIGN Methodology for measuring Regional Performance according to Liberalism Methodology for measuring Regional Performance according to Constructivism EU S REGIONALIZATION TECHNIQUES EMULATION METHOD EUROPEAN NEIGHBORHOOD POLICY MAIN OBSTACLES FOR REGIONALIZATION IN THE MIDDLE EAST POLITICAL ASPECT SOCIO-ECONOMIC ASPECT ENVIRONMENTAL ASPECT SOCIETAL ASPECT EU S IMPACT ON REGIONALIZATION PROCESS IN THE MIDDLE EAST 61 CONCLUSIONS 64 List of Literature and Sources 67 3

4 SANTRAUKA Regionalizacija apjungia bendradarbiavimo, integracijos, sanglaudos ir tapatumo kūrimo procesus regionininėje erdvėje, kurie yra susiję tiek su valstybiniais, tiek su nevalstybiniais subjektais, dariniais. Regionalizacija tarnauja kaip konfliktų sprendimo ir taikos užtikrinimo tarp tautų įrankis. Žinia, dauguma konfliktų Vidurio Rytuose savo apimtimti ir sklaida kelia grėsmę tarptautiniam saugumui, todėl užtikrinti regioninį stabilumą ir taiką yra vienas svarbiausių tarptautinės bendruomenės uždavinių. Transformuoti regionus ir pereiti nuo karo zonų į pliuralistines saugumo bendruomenes tampa aktualu tiek politiškai, tiek ekonomiškai. Besitęsiantis laipsniškas regioninis formavimas remiasi Makiavelio-Keynes o ir Porterio-Florido geopolitinio racionalumo teorijomis. Šios teorijos akcentuoja šiuolaikinę saugumo aplinką, kurioje tam tikros rūšies konkurencingumo elementas iš dalies pakeičia kariniais pagrįstus saugumo klausimus. Šios teorijos akcentuoja dėmesį į endogeninius procesus, regioninius išteklius, institucijas; skatina klasterizaciją, kuri tampa vienintele galimybe nacionalinei ekonomikai tapti pasaulinės rinkos dalimi. Inovacijos, konkurencingumas, klasterių grupės, masto ekonomija, tinklai yra priimtini kaip pagrindiniai principai regioniniuose ir strateginės svarbos ilgojo laikotarpio dokumentuose ir planuose. Atlikdama tyrimą, autorė įvertina regionalizaciją Vidurio Rytuose politiniu, socio-ekonominiu, aplinkosauginiu ir visuomeniniu aspektais. Palyginamoji ir regresinė analizė išsamiai ir detaliai paaiškina, kodėl Europos Sąjungos regionalizacijos modelis nėra galimas pakartoti Vidurio Rytuose, Levanto regione. Raktiniai žodžiai: Europos Sąjunga, Vidurio Rytai, regionalizacija 4

5 ABSTRACT Regionalization refers to the process of cooperation, integration, cohesion and identity creation in a regional space and involves state as well as non-state actors. Regionalization serves as a tool for settling conflicts and securing peace among nations. The conflicts and the spillovers they produce in regions such as the Middle East are acknowledged as being of paramount concern to international security. Building regional peace and security is a stepping stone to the construction of a more secure global order. Transforming regions into pluralistic security communities, moving from zones of war to stable zones of peace, has assumed increasing importance. The ongoing spatial formation is defined and explained as a gradual regional transformation movement from a Machiavellian- Keynesian geopolitical rationality toward a Porterian-Floridian one. These political rationalities are motivated by the perceived nature of the contemporary security environment in which a specific type of competitiveness (competitive regionalism/city-regionalism) has partly superseded militarybased security issues. There is a growing emphasis on endogenous processes, utilizing regional assets, institutions and knowledge and promoting intra-regional links via cluster policies as the key to regional economic success in a global political economy. It is acknowledged that innovation, competitiveness, clusters, networks, and top quality are key shibboleths in the plans which present long-term future visions for the regions. The author is crafting a research that could measure regional performance in political, socio-economic, societal and environmental aspects with respect to regionalization processes, regional security and regional transformation. Rather than using European Union as the standard from which to explain all other cases of regionalization, or excluding European Union altogether in theorizing attempts, author emphasizes that it is important to enhance the comparative regional analysis. In order not to be restrained to the European Union model, the volume encompass multi-paradigmatic and eclectic analysis that could explain in detail why the European Union regionalization model cannot be replicated in the Middle East, in the core countries of the Levant in particular. Key words: European Union, Middle East, regionalization 5

6 INTRODUCTION Relevance of the topic. Regionalization usually refers to the process of deeper cooperation, integration, and cohesion and identity creation in a regional space and involves state as well as nonstate actors. The EU is considered to be the most advanced model of regionalization, and regional integration. However, some political scientists (N. Ripsman, E. B. Haas) underscore that this kind of successful regionalization example is difficult to replicate in other parts of the world, in the Middle East in particular. It is observed that the regionalization, economic integration and successful development in the Middle East (for the purpose of the volume the Middle East is geographically defined as the core countries of the Levant: Lebanon, Syria, Israel, The Occupied Palestinian territories, and Jordan) is hampered by the Arab-Israeli conflict. Furthermore, new-types of conflicts emerge in the region defined as the current civil war in Syria and ISIL/Da esh threat. The situation is very complex in the Levant region with its highly conflict prone structure and a weak regional resilience to external impact. Though the states of the Levant agreed to show an initiative to find common ground under the Euro-Mediterranean Partnership (EMP) and European Neighborhood Policy (ENP), they have not yet built effective frameworks for communication and cooperation. This part of the world is still considered as unfinished by the most political scientists (L. Fawcett, F. Halliday) - it is still shaken by rivalry, negative historical memories and mistrust. There is absence of trust between core countries of the Levant and distrust towards global and regional powers (bearing in mind the recent US policy war on terror); the role of the EU s in the region becomes highly important if not crucial. Recent events in France and other countries in Europe only underline how much EU s and Middle Eastern societies, geography, politics and security have become inextricably bound up. The EU seeks to create an order in the Middle East that is peaceful and self-sustaining, it moves towards near-term possibilities for international peace and economic advance in the core countries of the Levant. Problem of the research: Regional integration theories and approaches aimed at explaining regionalization such as the New Regionalism could to be improved with the aim to better explain the regionalization of the Middle East in order not to be limited/straitjacketed by the European Union model. A central question is how relevant the EU can be as an actor in influencing the regionalization patterns in the Middle East. The EU has demonstrated the potential in the development of the Euro-Mediterranean Partnership Program (1995) in both, normative and policy terms. One of the major tasks for the future studies is to combine state-of-the-art theorizing with an up-to-date analytical work undertaken by regional specialists. Scholarship on the Middle Eastern region needs to rethink security in this part of the world from both top-down and bottom-up with an eye on the practical implications of their own thinking on the subject of research (the theory- 6

7 practice relationship). There is a need for alternative futures that try to address the multiple dimensions of regional (in)security. There is a need for more coherent, holistic approach to be developed and applied in order to better perceive the political processes ongoing in the region itself. Object of the thesis: EU s impact on the regionalization process in the Middle East. Goal of the thesis: to evaluate the impact of the EU s on the regionalization process in the Middle East Regionalization, regional integration is defined as a process when neighboring states enter into an agreement in order to upgrade cooperation through common institutions and rules, and work closely together to achieve more peaceful, stable, prosperous and sustainable life. Since there are no common institutions between the EU and the Middle East, what is left in common are rules and more for more principle that is needed to be adopted in both ways - if the external power/actor uses the local conflict management tools/techniques that might lead to a long-term conflict settlement in the region. The objectives of the thesis: 1. To present the theoretical approaches on regionalization, regional evolution. 2. To analyze and present the main obstacles for regionalization process in the Middle East region. 3. To evaluate the impact of the EU and its role in the Middle East (in the Levant countries in particular) regionalization process. Theoretical approach: Author aims the volume to be innovative and holistic, encompassing multidisciplinary perspectives from Political Science, International Relations (in particular Regional Studies), Security Studies, International Political Economy, as well as taking into account insights from Sociology, Business Studies, Social Anthropology, and Economics. Rather than using European Union as the standard from which to explain all other cases of regionalization, or excluding European Union altogether in theorizing attempts, author emphasizes the importance to bridge the gap, and enhance communication in comparative regional analysis. Author is seeking to explain regionalization through two paradigms - liberalism and constructivism by: - improving B. Buzan s and O. Wæver s Securitization and Regional Security Complex Theory. Author created and adapted an econometric model that might explain how contemporary security environment in which specific type of competitiveness (competitive regionalism/city-regionalism) partly supers military-based security issues; - enhancing L. Fawcett s approach, arguing that the Middle East is still unfinished region encompassing divergent ideas, norms and domestic consideration - intermestics. Author is using 7

8 J. Rivera s research model/template for assessing and analyzing societal norms, political stability, and environmental characteristics that might hamper regionalization process in the Middle East. Methodology: Author employs a longitudinal comparison method that encompasses causal, quantitative and qualitative methods interchangeably. This study includes statistical data analysis in order to identify the respective regional changes in political, socio-economic, environmental and societal aspects. Three hypotheses are going to be tested using correlation analysis, the method of Ordinary Least Squares and SPSS (Statistical Package for the Social Science) and two cases are going to be analyzed and presented. Sources and Literature overview: Author is highly interested in the main obstacles that hamper regionalization process in the Middle East. Author categorized these obstacles into four groups since they have political, socioeconomic, environmental and societal aspects. The Coller-Hoeffler model of civil war presented in the research paper Why is there so much conflict in the Middle East? written by Mirjam E. Sørli, Nils Petter Gleditsch and Håvard Strand and it provides the starting point of the analysis. The study has found no support for Middle East exceptionalism regarding the causes of conflict (having independent variables as poverty, ethnic dominance-islam; oil, authoritarianism, or both combined). Nevertheless, it was found that the Israeli-Palestinian conflict has spurred both interstate and intrastate conflict and hampered economic integration and social development in the region. The authors Cilja Harders and Matteo Legrenzi of Beyond Regionalism? use a broad range of approaches: this theoretical pluralism was used in order to address the plurality of experiences and stages of Middle Eastern regional cooperation. Notwithstanding, the paper brings the relevance of informal type of regionalization: Israeli entrepreneurs perception towards economic cooperation with its immediate neighborhood - Arab countries. Israel is in many ways the big non-issue of regional cooperation in the Middle East: this country complies with high EU s standards, while other core countries of the Levant fall far behind the average: the polarization effect exists. However, Israel is the center of both conflict and cooperation in the region. Combining the collective identity formation theory of Alexander Wendt with Barry Buzan and Ole Waver s regional security complex theory, the process of desecuritization as well as a process of transforming the conflict from fragile/unstable peace to cold peace and finally positive peace is possible. Despite this observation, the complete absence of trust prevents the move from a securitized to a de-securitized environment in the core countries of the Levant. 8

9 Local Middle Eastern scholars Hussein Tarabeth, Dr. Deborah Shmueli and Dr. Rassem Khamaisi present the volume on local conflict management tool which is called Sulha (peace, act of settlement in Arabic) in their paper Towards the implementation of Sulha as a cultural peacemaking method for managing and resolving environmental conflicts among Jews and Arab Palestinians in Israel. It is emphasized that after a conflict erupts, the Sulha serves to facilitate the transformation to the attitudes of the disputants extended families from a desire to revenge (with its potential implication of endless blood revenge cycles), to a willingness to forgive. Here, honor, as a folkloristic, emotive value has long been recognized as central to the Middle Eastern inter- and intra-communal dispute resolution tradition of Sulha. Their research draws on the existing literature, interviews, and case study analysis to highlight the primacy of honor needs above health and safety needs (something opposite to Maslow hierarchy of needs). This article examines conflict contexts in which disputants perceive their honor to be a higher priority then their health and safety, and consequently, they tend to act accordingly to satisfy their perceived honor needs first, often ignoring obvious health and safety-related needs. Another scholar Doron Pely in his articles Resolving Clan-Based Disputes using the SULHA, the traditional dispute resolution process of the Middle East, Where East Not Always Meets West: Comparing the Sulha Process to Western-Style Mediation and Arbitration, Role of Honor in Deadly Disputes within Israel s Arab Community analyzes the role of Sulha in modern Arabian world - the Sulha process is different from mediation in that once the parties agree to participate, they are bound to accept the Sulha Committee s verdict. He explains that Sulha ritual has a major similarity to both mediation and arbitration - it also uses some mediation-like techniques. Colin P. Kelley, Shahrzad Mohtadi, Mark A. Cane, Richard Seager, and Yonathan Kushnir in their paper Climate change in the Fertile Crescent and implications of the recent Syrian drought analyze how the Syrian uprising began in 2011: they claim that Syria experienced the most severe drought in the instrumental record, and for Syria, country marked by poor governance and unsustainable agricultural and environmental policies, the drought had a catalytic effect, contributing to political unrest in the country. They also confirmed the climate theory that most conflicts in the Middle East are anthropogenic by nature. Ali Massoud in his research Years of Drought: A Report on the Effect of Drought on the Syrian Peninsula explains how rapidly growing urban peripheries in Syria, marked by illegal settlements, overcrowding, poor infrastructure, unemployment, and crime, were neglected by the Assad government and became the heart of the developing unrest. Jack A. Goldstone in his paper Population and security: How demographic change can lead to violent conflict shows how government failure, exacerbated by large influx of migrants may 9

10 cause a violent conflict. He argues that the conflict in Syria, in the context of government failure, exacerbated by the singular circumstance of the large influx of Iraqi refugees caused the population shock in Syria s urban areas and further increased the strain on Syria s resources. Further research: author excludes military/coercive/hard power analysis in the matter, since the best model of regionalization excludes this element while fostering soft power mechanism. The other external power s impact and interest in the region are not being analyzed as well. The thesis is not addressing the impact the refugees crises is posing to the Middle East and how it might affect regionalization process in the Middle East. Author doesn t analyze pre-historical reasons for the new type of conflict (Syrian civil war). Structure of the thesis: first part of the thesis is dedicated to present the theoretical approach on regionalization, regional transformation, and coherent regional security. The second part of the research aims to present the EU s regionalization techniques: emulation method and European Neighborhood Policy. The third part of the thesis is dedicated to overview the complexity of the main obstacles for regionalization process in the Middle East: political, socio-economic, environmental and societal aspects are being analyzed. The last part of the analysis assesses the EU s impact on the regionalization process in the Middle East, in the core countries of the Levant. 10

11 1. THEORETICAL APPROACH ON REGIONALIZATION Defining region has been a challenging exercise in the International Relations literature, with differences between perspectives which focus on geographic proximity as central to identifying regions on the one hand, and those that contend that some form of cultural uniformity is the crucial variable on the other. 1 Few scholars have focused on ideational variables to argue that regions are socially constructed 2 and they are not simply geographical constants but expressions of changing political practices with distinctive institutional forms. 3 T.V. Paul defines region as: a cluster of states that are proximate to each other and are interconnected in spatial, cultural and ideational terms in a significant and distinguishable manner <...> from a systematic perspective, regions develop into subsystems because of the regularized interactions and interconnectedness among states that comprise them. 4 According to Paasi (2002) region exists in geographical research in three modalities: the most common approach, though not the oldest one, is to take the region as a given (statistical, administrative) unit that provides a spatial frame for the phenomena or processes that are to be scrutinized or compared. The second, older approach is to see a region as a construct, the end product of a research process. The third modality relates regions to social practices/discourses: that is, regions condition and are conditioned by politics, culture, economics, governance, and power relations. Later Paasi (2014) adds that region as a given administrative context and an object of strategic planning process is simply spatially bounded: borders exist only because they show the power and power exists of course in the act of making the plan inside the border. While regional planning occurs today in the relational context of soft spaces and fuzzy boundaries, borders may still effectively disturb and limit both visionary thinking and planning practice (Haughton, 2010). 1 Amitav Acharya has brought forth the value of regional worlds a concept originally used by the now defunct regional world s project at the University of Chicago. Here regions are defined as those that not only self-organize their economic, political and cultural interactions and identity, but also produce their own mental image of other regions and the global space in general. Acharya A. Regional Worlds in a Post hegemonic Era. SPIRIT Working Papers, June Others have spoken in terms of regional identity which implies the mixing of cultural-historical and political economic contexts. Anssi P. Region and Place: Regional Identity in Question. Progress in Human Geography 27, no. 4, p Buzan B., Wæver O. Regions and Powers: The Structure of International Security. Cambridge University Press, p Katzenstein P. J. A World of Regions: Asia and Europe in the American Imperium. Ithaca, NY: Cornell University Press, p Paul T.V. International Relations Theory and Regional Transformation. Cambridge University Press, p

12 Elden (2010) proposes that territory consists of political-economic (land) and politicalstrategic (terrain) relations, also dependent on political-legal (law) and political-technical (calculative technologies) elements. Territory becomes as a part of a specific rationality, a political technology that is dependent on calculation as much as on control and conflict. Supra- and sub-state regions have become increasingly important examples of bounded spaces in political geography and political science/international relations studies (Paul 2013). Regional transformation has emerged as a major topic of research the past few decades. T.V. Paul argues that transformational change, regional change, may happen when the existing power structures and interstate relationships are uprooted and an order based on deep peace or deep conflict emerges, explaining that transformational change in a region could occur through the introduction of democratic order, robust economic interdependence, or an institutional framework among the core countries that constitute a region. 5 More spontaneous and endogenous processes which involve a variety of state, market and civil society actors organized in formal and informal networks are categorized as regionalization or cross-border micro-level regionalism (Söderbaum 2011; Jessop 2003) and, hence, treated as distinct from regionalism (Hurrell 1995). Regionalization refers to the process of cooperation, integration, cohesion and identity creation in a regional space (issue-specific or general), and involves state as well as non-state actors; at its most basic it means no more than a concentration of activity of trade, peoples, ideas, even conflict at the regional level - this interaction may give rise to the formation of regions, and in turn, to the emergence of regional actors, networks, and organizations (Fawcett, 2013). In some contexts the interest and emphasis on regions and regionalization reflects the endurance of a long, gradually transforming tradition where regions or regional borders do not matter significantly even if both can be mobilized in the service of regional planning activities (Paasi, 2012). Hence, the current regional outcome is explained in Table No Paul T.V. International Relations Theory and Regional Transformation. Cambridge University Press, p

13 Table 1. Current regional outcome Western Europe Region Initial Subsequent Current outcome Cold War/US Umbrella Institutions, economic interdependence, collective identity Pluralistic security community Middle East Regional rivalry/cold War Regional rivalry Enduring rivalry South Asia Regional rivalry/cold War Regional rivalry Enduring rivalry East Asia Regional rivalry/cold War Regional preponderance; economic interdependence Stability/limited conflict Southeast Asia Regional rivalry/cold War Regional preponderance; economic interdependence Partial security community Preponderance/limited Latin America Preponderance/Cold War economic interdependence, Partial security community institutions Source: Paul T. V. International Relations Theory and Regional Transformation. Cambridge University Press, p. 32. Several eclectic perspectives on regions have been developed over the years by individual scholars who do not claim allegiance to any single International Relations paradigm (see table No. 2) 6, they include B. Buzan s and O. Wæver s securitization and regional security complex models 7 - security concerns link the states to the extent that national securities cannot realistically be considered apart from one another. 8 Furthermore, B. Buzan adds that the eclectic approach is necessary if one is to keep the concept of security coherent, while adding new security sectors economic, environmental (ecological) and social (societal) beyond the traditional military and political ones. The new formulation allows for a deeper analysis of non-state actors and informality and also that regions are even less given. 6 Analytical eclecticism means borrowing explanatory variables and causal logic from two or more distinct traditions or approaches in order to gain greater purchase on the cases or issue areas that scholars want to analyze. Eclectic approaches: Sil R. and Katzenstein P. Beyond Paradigms: Analytic Eclecticism in the Study of World Politics. Basingstoke: Palgrave Macmillan, 2010; Paul T.V. The Tradition of Non-use of Nuclear Weapons. Stanford University Press, Hall J. A., Paul T. V. Preconditions for Prudence: A Sociological Synthesis of Realism and Liberalism.International Order and the Future of World Politics Cambridge University Press, p Buzan B., Wæver O. Regions and Powers. The Structure of International Security. Cambridge Studies and International Relations, p Buzan B. People, States and Fear: The National Security Problem in International Relations. Chapel Hill: University of North Carolina Press, p

14 Table 2. Paradigms Paradigm Main variable Outcome Realism Balance of power; hegemonic preponderance Stability Liberalism Institutions; democracy; economic interdependence Peace Constructivism Proper ideas, identity, practices Security community Source: Paul T.V. International Relations Theory and Regional Transformation. Cambridge University Press, p. 30. Machiavellian dimension of political rationality 9 was born after the war; emphasizing neutrality and good relations with neighbors as well as the internal coherence of the state. Though the whole planning system was legitimized as a means to accelerate economic growth, it simultaneously involved larger societal ambitions related to military security and rooting out political radicalism throughout the state space. 10 The ongoing spatial formation can be conceptualized as a gradual movement from a Machiavellian-Keynesian geopolitical rationality toward a Porterian-Floridian one. The latter form of rationality, baptized after the political economy theories of Michael Porter (who accentuated the determinants of national competitive advantage, national productivity and the loss of national advantage, etc.) and Richard Florida (who emphasized the role of attractive spaces in economic success in knowledge-based economies). The expansion of Porterian-Floridian rationality does not implicate that the state is governing less territorially - the new rationality is motivated by the perceived nature of the contemporary security environment in which a specific type of competitiveness has partly superseded military-based security issues. After the turn of the millennium, new keywords such as competitiveness, resilience or assemblage have been deployed, often in a relational spirit, to broaden the regional concept (Pike, 2007). New regionalist claims for competitiveness, social cohesion and identity in promoting regional development (Paasi, 2012). Relational thinking suggested that region should be seen as non-bounded in the current mobile, globalizing world. This approach emphasized that increasingly economic and transnationally oriented geopolitical calculation of space is taking place in the ongoing governmental interventions aimed at modifying both the spatial structures and the qualities of populations in the name of national competitiveness. 9 the existence of a governmental intervention thus entails the existence of certain political rationality (where political rationalities are explained as ways and styles of rendering reality thinkable in such a way that it is amenable to calculation and programming) and governmental technologies (explained as tools, devices, personnel, which enable authorities to imagine and act upon the conduct of persons individually and collectively). 10 Moisio S., Paasi A. From Geopolitical to Geoeconomic? Changing Political Rationalities of State Space. University of Oulu, Finland, p

15 Political rationalities approach refers to the processes by which states seek to accumulate wealth through market control rather than through acquisition and control of territory (Cowen, Smith, 2009). In short, national territory is no longer neatly aligned with national economic interest: the state becomes an entrepreneur in its own right, a player in the market first and foremost rather than a regulator of the market s excesses. Cowen and Smith s conceptualization resonates with advanced liberalism, from Keynesian-national welfare state regimes to Shumpeterian post-national competition state regime, or from geopolitics to biopolitics of security (Dillon, Lobo-Guerrero, 2008). Cowen and Smith refers to the political rationalities and governmental techniques which are mobilized in various contexts to regulate both state space and the conduct of populations. City-regions came to be seen as key nodes in global economic networks defined as competitive regionalism or city-regionalism. Nowadays, the minor city-regions represent stabilizers of the regional structure of the state. There is a growing emphasis on endogenous processes, utilizing regional assets, institutions and knowledges and promoting intra-regional links via cluster policies as the key to regional economic success in a global political economy. Regional identity as well as other contemporary key terms such as competition, innovation, cluster, social capital and learning region, are widely used in regional plans, bearing witness to the adoption of international planning concepts. There is EU s example of the relativization and transnationalization of contemporary planning spaces: thus in strategic and national planning document, competition is cited almost 1400 times in 39 plans, innovation 1150 and cluster 650 whereas regional identity is noted 202. Regional identity seems to be simply something which is good for regional development, a term which conjures up visions of the future offering unspecified benefits to regional populations - the European Union becomes as a political enterprise. Planners also suggested relationally that people are living in a complex, multicultural environment and wondered whether regional identity could still be meaningful, especially as regional development is related to wider, often international agencies such as the EU. It is stated that innovation, competitiveness, clusters, networks, and top quality are key shibboleths in their plans which present long-term future visions for the regions. The rise of the relational approach in planning is a fitting example of policy transfer, and the embracing this thinking causes a planning paradox: in strategic planning, planners need to think increasingly in terms of open, porous borders despite the fact that in concrete planning activities, politics and governance the region continues to exist largely in the form of bounded and territorial political units. Thus, just as state spaces transform in a dynamic matrix of internal and external relations, the local, national and international roles of borders change perpetually as well. If territories and borders change perpetually, boundary/border studies too move on and transform. 15

16 Cross-border regionalization has become a crucial strategy for the integration and rescaling of the state system around the world, but particularly in the European Union where more than 150 such regional arrangements exist (Deas and Lord 2006). As globalization proceeds apace, regionalization might provide global governance format. Regionalization is seen to provide a meditating level of governance between the nation state and the global system, enabling states and non-state actors to collectively deal with a variety of global governance issues on a regional scale whilst not isolating themselves from the benefits of globalization REGIONALIZATION ACCORDING TO LIBERALISM PARADIGM Liberalism, the significant alternative perspective to Realism, offers the Kantian tripod: democracy, economic interdependence (international trade, foreign direct investment), and institutions 11 for transformational regional change. Usually interdependence is measured using the economic importance of bilateral trade relative to the countries gross domestic products (GDP). 12 It is stated that if these three mechanisms are fully developed in a region, the emergence of a pluralistic security community is possible. Crucé (1623) offered a sociological explanation for why commerce causes peace; foreshadowing a current scholarly debate he also argued that the causation runs the other way, that universal peace encourages international commerce, 13 while other scholars prefer the importance of industrialization. 14 Most empirical quantitative research on the commercial-liberal themes affirm that states that have more economic ties tend to have fewer violent conflicts and other variables such as alliances, hegemony, democracy, and geographical proximity are controlled for. 15 T.V. Paul thinks that there will be no one-size-fits-all solution for achieving regional stability because each region needs to find its own way of reconciling its particular cultural and political legacy with modernity, but the EU remains the world s most extensive and intensive form of regionalism, its relative success is fostering peaceful relations and economic stability has spurred 11 Russett B., Oneal J. R. Triangulating Peace: Democracy, Interdependence and International Organizations. New York: W. W. Norton, Owen J.M. Liberal Peace, Liberal War: American Politics and International Security. Ithaca, NY: Cornell University Press, This data is primarily taken from the International Monetary Fund and the World Bank. 13 Crucé É. The New Cineas.(translated by C. Frederick Farrell, Jr. and Edith R. Farrell. New York: Garland, 1972). Crucé even called for an international standardization of money and weights to ensure that trade was fair; ibid., p Mueller J. E. Retreat from Doomsday: The Obsolescence of Major War. New York: Basic Books, Russett B.M., Oneal J.R. Triangulating Peace: Democracy, Interdependence, and International Organizations. New York: W. W. Norton,

17 regionalism worldwide. Integration in Europe has fundamentally concerned the extension of capitalist relations, as is clear with regard to the huge proportion of legislation in the Union: more than 20 percent of European GDP is traded internally, a figure which amounts to half of all world trade. 16 Stated briefly, the EU model is an extremely demanding one and its replicability is questioned. Managing economic interdependence, coping with (non-traditional) security threats and securing regime survival provide powerful accounts for why states and other actors engage in regional institution-building. Transforming regions into pluralistic security communities, moving from zones of war to stable zones of peace, has assumed increasing importance since the weapons of war/conflict have become more deadly. It is known that the main drivers for regionalism are (material) gains states expect to reap from trading with each other. These include reduced transaction costs, policy externalities, economies of scale, technological innovation due to greater competition, more foreign direct investments, and greater economic and political weight in international markets and institutions: states seek to create the clustering effect. Stable economic functioning according to the neoclassic theorist J. Schumpeter (1942) the growth potential lies in innovation, which leads to qualitative changes in the economy. Augmenting international competition between countries is increasingly turning back to one of the strains of innovation - the clustering effect and its benefits for both - regional and economic development. Today, perhaps, the most widely known definition of a cluster is formulated by M. Porter (1990): clusters are organizations and other affiliates of associated technologies and skills that are geographically close to each other. They normally exist in a particular geographical area, where it is relatively easy to access peer communication, logistics, and interpersonal communication. Clusters are normally concentrated in a particular region, and sometimes - in one city. Cluster concentration and its measurement can be calculated by the agglomeration rate formula:, where n number of regions in a country; a number of employees in industry b in region n; A number of employees in industry b in a country; t total number of employees in region n; T total number of employees in a country. 16 Fligstein N. Euroclash: The EU, European Identity, and the Future of Europe. Oxford University Press,

18 If the agglomeration coefficient Ak is greater than 1 (Ak>1), this means that the country s industry is concentrated in particular regions (states), if the agglomeration coefficient is less than 1 (Ak<1), this means that the industry is distributed around the whole country (source: European Commision, 2014). A group of European Commission experts made a study on clustering effect (2005) and supplemented the concept of a cluster clarified by M. Porter: cluster is a group of independent companies and related organizations which cooperate and compete with one another they are geographically concentrated in one or several regions, although sometimes the cluster can have their branches and on a global level specializing in a particular field, linked common technologies and skills; clusters are traditional and scientific; clusters can be institutionalized (may have the head of the entity) or not institutionalized. Above the traditional concept of a cluster, has emerged the definition of exlusive and innovative cluster a cluster that is using innovation in its broadest sense, since innovation can affect both clusters and cluster organization of participants, both in product and development, manufacturing, commercialization, distribution. Innovative cluster is constantly evolving, learning from experience and adjusting to changing environment conditions. It is well placed to exploit the new opportunities arising in the ordinary course of business, at the same time, combining flexibility with cluster s inner strength, stability and targeted action. This is neseccary because the traditional knowledge generation and the market spreading limits are constantly changing there are new and alternative ways of knowledge utilization; changing products and pricing; the mechanisms of entrepreneurship, the nature of financing mechanism is constantly changing; old institutions and organizations are abandoning previous practices and habits through the learning process of transformation (Porter, 2000). However, innovation as well as clustering effect have its limits, its life cycle (see Scheme No. 1). Scheme 1. Life cycle of clustering effect Source: Regional Economic Development, Cluster infusion phase (usually generates innovations and inventions); 18

19 Cluster growth phase (increasing market share, increasing competition); Maturity phase (services, goods, technologies are no longer evolging); Decline phase (goods, services, technologies are fully replaced by lower price of goods, services and technologies). According to Porter s (1998) theory, there are five reasons why countries can compete on international level: demand conditions the nature of domestic demand and strong features, users needs, perceptions and satisfaction levels; term factors labor skills, roads and rail infrastructure, and natural resources; corporate strategy structure and competition, organization and management of the companies, local level of competition; related and supporting industries supporting business services; level of manufacturers qualifications; Government policies including business competition rules, state intervention in industrial and regional development policies. Furthermore, major findings of Porter s extended analysis are following: lack of national resources (e.g. oil, labor resources, minerals) may boost country s high level of innovation in order to be succesfull countries have to move away from economy based on term factors and concentrate on economy based on innovation. Another scholar, Nobel Prize winner E. Phelps study (1966) reveals that there may be situations where capital resources are so great that it is possible to increase the well-being of all people by reducing the saving rate. Professor applied this golden rule considering investment on education, research and development of technology. He insists that in order to achieve a maximum long-term consumption, as well as the growth of the gross domestic product (GDP), the return of investment on research and development must be equal to annual GDP s growth rate. Innovation at its very essense has become the main engine of economic development, making possible to achieve a high level of operational productivity and appropriate quality of life. The traditional factors of production based on economic growth are inevitably short-lived, and the high productivity of the national systems in the long term can only be based on corporate innovation activities. Innovation leads to success of not only internal innovation mechanisms, but also the interaction with the external environment. Innovation infrastructures encompass research institutions, innovation and business centers, science and technology parks, business incubators, agencies, financial institutions and clusters. Analyzing clustering effect in a more precise manner, it should be noted that operating clusters have a positive influence on national/regional economy: clustering processes can positively influence development of innovation and competitiveness of enterprises, economic growth and long-term business dynamics, skills formation and information flows. Close relationships between cluster s organizations enables specialization, boosts economies of scale that allow access to 19

20 unique specialized resources (the latest knowledge, information, labor, capital, know-how) and thus enhances both cluster actors and the entire region s competitive advantage. Clusters are named as the most effective instruments at sectoral, national or regional level since innovation, rapid deployment of utility are the essential conditions for economic success. However, innovation must result in an adequate environment the more productive enterprises and organizations belong to inner cluster activities, the more productive the whole group, the whole cluster and then the whole macro-system/branch/region/state. The global success of exclusive and innovative technologic clusters are being widely analyzed and debated. It is said that clusters working as a center of business, research, educational, financial and state-owned enterprises network activities, is the decisive force and almost the only opportunity for the national economies to become a part of global market. Clustering effect and clustering processes are directly linked to industrial/regional development and technology/innovation policies since the main objectives of the policies mentioned above to increase country s competitiveness in the region (Porter, 2006) - to transform the region. Cluster provides benefits such as: easier access to specialized information, greater profitability, qualified force of labor, high competition in domestic and international markets, easier access to other markets, operational diversification, socialization and community culture. Cluster benefits in intensifying the competitiveness and economic efficiency, increasing productivity and reducing prices. Intense competition involves new techniques, products, services and ideas, and the economic phenomenon of long-term positive effect on the balance of payments. Investment on innovation leads to a general rise on standards of living and the country s growing influence in the global market. Stated briefly, clusters should be focused on producing high added value goods, services or technologies; foreign trade and export, and that is highly related within the field of international relations REGIONALIZATION ACCORDING TO CONSTRUCTIVISM PARADIGM For constructivists regions are not seen as natural, organic, essential or material objects, but rather as dynamic settings for social interaction, with a particular focus on the process through which they are becoming, and the way they are constructed/reconstructed by reflective actors. In this context, social constructivism has also gained a more prominent place in the study of regional integration and regionalization (Christiansen et al, 2001). It is stated that there is a way in which ideas shape regional order: the preexisting ideas (or cognitive priors) of individuals or societies - 20

21 whether they are world views, causal ideas, or principled ideas - can be the foundation around which regional orders may develop. 17 Constructivism, in particular, has helped to open up the possibility of a more nuanced approach to the roles that culture or identity may play in international politics. International anarchy and the self-help behavior that characterizes it, as one of the early constructivist works remind us, is not a given; rather, it is socially constructed (Wendt, 1992). Leading the way in making the connection between the roles that identity may play in defining the behavior of the Middle East states, Barnett (1998) has offered a narrative of politics that is theoretically distinctive and historically instinctive. He claims that identity is ultimately rooted in shared history, faith and language, facilitated by social communication and aroused by conflict with the other over land or resources. Constructivists claim that if proper norms, ideas and practices are developed, war can be prevented and peaceful order can be developed, a region can transform into a pluralistic security community, that is, a transnational region composed of sovereign states whose people maintain dependable expectations of peaceful change, where organized violence is no longer the means to settle disputes. 18 Ideas, norms, and practices, is given considerable significance in the formation and persistence of a given regional order - these norms can be created and diffused internationally with the help of norm entrepreneurs. 19 However, norms can be both positive and negative, and often constructivist scholars (similar to liberals) focus on the positive aspects of norm creation and diffusion. Adler and Crawford argue that regions are no longer conceptualized in terms of geographic continuity, but rather in terms of purposeful social, political, cultural, and economic interaction among states which often (but not always) inhabit the same geographic space. 20 Beyond interactions, regions are built around shared identities. 21 What Adler calls cognitive regions are 17 Goldstein J., Keohane R. Ideas and Foreign Policy: An Analytical Framework in Ideas and Foreign Policy, ed. Judith Goldstein and Robert Keohane. Ithaca, NY: Cornell University Press, Adler E., Barnett M. Security Communities. Cambridge University Press, p Finnemore M. National Interests and International Society. Ithaca, NY: Cornell University Press, Adler E., Crawford B. Constructing a Mediterranean Region: A Cultural Approach, paper presented at the conference The Convergence of Civilizations? Constructing a Mediterranean Region, Lisbon, Portugal, June 6 9, p Wæver O. Culture and Identity in the Baltic Sea Region, in Cooperation in the Baltic Sea Region, ed. Pertti Joenniemi London: Taylor & Francis, p

22 those whose people imagine that...borders run, more or less, where shared understandings and common identities end. 22 Scheme 2. Localization and subsidiarity Source: Paul T.V. International Relations Theory and Regional Transformation. Cambridge University Press, p. 216 Fawcett (2013) claims that the key to constructivist approach is the notion of discourse; where discourse refers not only to the language, rhetoric, and symbols that states use to express their identities and interests, but also to the practices that they undertake in order to carry out their strategic objectives. In R. B. J. Walker s (1984) words, it is important to recognize that ideas, consciousness, culture, and ideology are bound up with more immediately visible kinds of political, military and economic power. The question of how threats emerge has sparked the growth of securitization theory, a branch of constructivism that deals with the puzzle of why aspects of everyday life sometimes get transformed into matters of national security (Balzacq, 2011). Regions that lack economic interdependence (African, Latin American, Arab and Asian), democratic or not, have supported regional cooperation and integration as a way to control, manage and prevent regional conflict, deal with non-traditional security threats or as a source of domestic power and consolidation of national sovereignty (Acharya, 2011). It is noted that weak states, in particular, should be more inclined to engage in such regime-boosting regionalism (Söderbaum 22 Adler E. Imagined (Security) Communities: Cognitive Regions in International Relations. Millennium: Journal of International Studies 26, no. 2, p

23 2011) because they are more dependent on economic growth to forge domestic stability, tackle societal problems, and strengthen their international standing in terms of bargaining power and legitimacy. Moreover, non-state actors can more easily circumvent their governments in seeking transnational exchange (Bach 2005). Yet, Edi (2007) notes that states must not be too weak either political instability can be a major obstacle to regionalization. Furthermore, Acharya (2001) argues that regionalization has served as a tool for settling conflicts and securing peace among (former) rival nations and, more recently, for consolidating and promoting democracy in member states. What national governments lose in authority to regional institutions, they gain in legitimacy and problem-solving capacity, particularly since many societal problems and non-traditional security threats, such as environmental pollution, pandemics, drug trafficking or migration, are no longer confined to the boundaries of the nation-state (cf. Börzel and van Hüllen 2015). The popular and persistent perception of the region, and one that has permeated into academic as well as popular circles, is that of a zone of conflict and war. It is stated that collectively shared meaning structures, norms and values are important for a regional identity facilitating mutual trust and rendering armed conflict unconceivable (Adler and Barnett 1998; Acharya 2001). However as Haas (2005) had correctly noted, the gap between the European and non-european processes of regional integration cannot be easily bridged because of the absence in the latter of some of the key background conditions: situations controlled by social groupings representing the rational interests of urban-industrial society, groups seeking to maximize their economic benefits and driving along regional homogenous ideological-political lines. 23 Regions like Asia, Latin America, the Middle East, and Africa offer plenty of examples of norm subsidiarity 24 - in the Middle East norm subsidiarity can be described from what Barnett calls the norms of Arabism, whose principal elements were quest for independence, the cause of Palestine, and the search for [Arab] unity, as well as non-alignment. 25 Scholar James M. Goldgeier proposed two worlds theory where postmodern open-access orders are associated with zone of peace and thicker forms of international society, while premodern and modern natural states - with zone of conflict and thinner forms of international society. He explains that open-access orders are a necessary but not sufficient condition for security communities, while natural states are more likely to generate conflict formations. 23 Haas E.B. International Integration p Acharya A. Norm Subsidiarity and Regional Orders: Sovereignty, Regionalism, and Rule-Making in the Third World. International Studies Quarterly Vol. 55: p Barnett M. N. Dialogues in Arab Politics. Columbia University Press p

24 There are scholars who measure regional interdependence using militarized interstate disputes (MIDs). 26 The finding that wars and MIDs cluster among a handful of states raises the question of why some episodes of armed confrontation get transformed into recurrent military contests (Mor, 2003), as well as why enduring rivalries eventually come to an end. Huth (1996) finds that disputes over territory are particularly likely to set the stage for the emergence of enduring rivalries. Today, conflicts and the spillovers they produce in regions such as the Middle East are acknowledged as being of paramount concern to international security. The definition of a conflict is given: it is overt, coercive interactions of contending collectivities; a state of discord caused by the actual or perceived opposition of needs, values and interests; a disagreement through which the parties involved perceive a threat to their needs, interests or concerns (Mitchell, 1981). It s a situation in which two or more parties seek to undermine each other because they have incompatible goals, competing interests, or fundamentally different values. 27 As Fawcett (2013) notes, the Middle East is still unfinished region, like other parts of developing world, with weak states and regional institutions, where territory and borders are contested, and interstate conflict persists. While the term conflict appears unproblematic when applied to the Middle East and its international relations, cooperation might be harder to observe. Other scholars of the region remain cautious of the new paradigm shifts, as work by the later Halliday (2005) reveals: critical of what he calls the post-realist fetish for culture, he emphasizes that when it comes to the Middle East, the cultural perspective was always there. Another work by Stephen Walt (1987), using the Middle East as its case study, argues for a modified balance-of-power approach in which the behavior of states is based on threat assessment. Kaldor (1999) characterizes the new type of wars/conflicts/asymmetric warfare as following: a typical new phenomenon is armed networks of non-state and state actors; they include: paramilitary groups organized around a charismatic leader, warlords who control particular areas, terrorist cells, fanatic volunteers, organized criminal groups, units of regular forces or other security services, as well as mercenaries and private military companies in the use to create extreme anxiety and/or fear-inducing effects in a target group larger than the immediate victims with the purpose of coercing that group into acceding to the political demands of the perpetrators, it s also any action that is intended to cause deaths or serious bodily harm to civilians or noncombatants, when the purpose of such an act, by its nature or context, is to intimidate a population 26 Two such sets, the Conflict and Peace Databank (COPDAB) - Principal investigator Edward P. Azar; available at and the World Event Interaction Survey (WEIS) Principal investigator Charles McClelland; available at 27 Mona B. Translation and Conflict. A Narrative Account, p

25 or compel a government or an international organization to do or to abstain from doing something (the UN High Level Panel, A More Secured World, 2004). The Arab-Israeli conflict naturally tops the list of security threats within the region: it is protracted social conflict - that is, multidimensional one in which religious, political, cultural, economic, and psychological elements pile up and feed on each other to create a seemingly indissoluble impasse (Fawcett, 2013). Building regional peace and security is a stepping stone to the construction of a more secure global order. In economic terms, the Middle East is the periphery and Europe the core. European policies in the Middle East have relied primarily on soft power and socio-economic strategies toward their neighbors (Behrendt and Hanelt, 2000). Thus, in their dealings with each other, the Europeans and the Arabs have maneuvered around the imperatives of economic interdependence and attendant security issues in a way that suggests that both are as influenced by political considerations as by economic imperatives (Fawcett, 2013). The failure of the Euro-Mediterranean Partnership (EMP) to transform the Mediterranean into a cohesive new economic area of shared prosperity and security cooperation stemmed from the continuation of disputes between the partner states (not least the Arab-Israeli conflict, Lebanon War broke out). Realization of the limited achievements of the EMP led to rethink and the launch of a new European Neighborhood Policy (ENP) in The core concept of the ENP was to complement the EMP with a differentiated approach to bilateral relations with each of Europe s neighbors, taking account of the size and relative level of development of partner economies. The EU undertook to assist with indigenously generated reform programs, and Action Plans were agreed and signed accordingly RESEARCH DESIGN This paper brings together a group of IR theorists from all the key perspectives with the intent of exploring the regional order, regional performance and transformational change through multidimensional and multi-causal pathways. This research is multi-paradigmatic: the author is interested in crafting a research trajectory using the insights of IR theory and in developing policyrelevant ideas; meaning: to address regional transformation through an intra- and inter-paradigmatic exchange, each IR theoretical paradigm, whether from the realist, liberal, or constructivist tradition, can only partially account for patterns of regional conflict, co-operation or integration. Therefore, an eclectic approach is needed: analytic eclecticism, an eclectic framework also considers broader range of alternative explanations by casting a wider theoretical net and by updating and adapting realism, liberalism and constructivism. Author s attention is heavily focused on the European model since it is the best known regionalization model so far. As it was mentioned in the previous chapters: national securities 25

26 cannot realistically be considered apart from one another; as well as regional securities. Furthermore, Buzan adds that the eclectic approach is necessary if one is to keep the concept of security coherent, while adding new security sectors economic, environmental (ecological) and social (societal) beyond the traditional military and political ones. The political and military sectors of security that are identified by Buzan are accompanied by three others that are more difficult to define: economic, societal and environmental. Economic threats, for example, are difficult to determine due to the nature of economics itself. On the other hand, societal security is difficult to separate from the political sector - societal threats are about identify and the balance (or lack there of) that can be found within any given state. The environmental sector also proves difficult to define and can be considered the most controversial of the five sectors. In regard to this matter, author is crafting the research that could measure regional performance in political, socio-economic, societal and environmental aspects with respect to regionalization processes, regional security and regional transformation Methodology for measuring Regional Performance according to Liberalism Economic aspect: Clustering effect benefits economy in these aspects: increases productivity of labor force and corporate profits, export, foreign direct investment and decreases costs. In order to develop country s economy and to meet the ever growing needs of the the population at large, society have constantly increase the variety of material goods production and the level of services. This can be done only through labor productivity and efficient use of labor force. Labor productivity shows the brightest workforce efficiency. The growing labor productivity increases the volume of production, the work itself becomes more and more productive and society at large becomes wealthier. When the productivity is rising, businesses, without increasing the prices, could increase wages, dividends to shareholders/use this to expansion. The growth of labor productivity is important for individual firms and the whole country. The so-called Cobweb model, where demand shock causes unreasonable wage increases (see Figure No. 2), does not occur since cluster companies hire more employees because of increased labor productivity and the employment growth is natural. 26

27 Scheme 3. Cobweb model Source: Exploring of Universe Acknowledge, 2015 E. Phelps (1966) studied how the more educated workforce facilitates the development of new technologies. He also offered an explanation of why education is provided in return to considerable rapid technological change. It is alleged that educated workforce is essential in order to achieve expanding productivity (this is the main explanation why the higher educated staff s salaries were picked up significantly when due to the information technology revolution, the innovation has been spreading across the countries/states). This might be explained as following: the employment and competition among the workforce are increasing, as well as labor productivity, and the wage goes up. Thus, whenever the labor productivity is not being developed, the wage-spiral might appear: Low unemployment rate leads to higher nominal wage. Responding to increasing nominal wage, the companies increase its prices. Prices are rising. Responding to higher price levels, employees are determined to seek higher nominal wage. This continues regularly and the result is as follows permanent wage and price inflation. The lower inflation rate (discount rate) not only promote clearer signals and better investment decisions for economic agents and policy makers but also protect the fixed-income people. This is the main premise of promoting the sustainable development of economic activities. Inflation has a negative impact on the balance of payments, because the rising prices impact the decline in national competitiveness, worsening export conditions, promoting the import of goods and capital outflows. This kind of economic situation adversely affects the country s entire economy and its development prospects: the country becomes unattractive to foreign investors (and it is known that general factors affecting the volume of foreign direct investment are these: the interest rate, inflation rate, expected rate of return, political stability, legal system, monetary and fiscal policy, banking system 27

28 activity, labor market indicators, the natural resources of the country, development of infrastructure, the industry rate in the country (Balčiūnas, 2002). Phelps research reveals the international trade influence on the wealth of countries that previously did not have competitive internal markets. The economist discussed the complex interdependence between the relevant economic factors such as employment rate, wages, prices, and foreign currency. It is emphasized that only by remaining competitive and productive, it is possible to increase employment and wages at the same time without increasing inflation in the country. Social aspect: Clustering processes run the national economy in the social dimension as well decrease unemployment, boost social services, walks differentiation decline. It is known that unemployment is one of the country s main macroeconomic problems. Unemployment means economic and social costs both for individuals and the country as a whole: the loss of the country s material prosperity (for non-produced GDP), unemployment affects jobless people by financial, psychological problems and the loss of skills. Unemplyment is one of the most difficult macroeconomic problems to solve. According to Keynesian point of view in order to reduce unemployment rate, it is necessary to regulate aggregate demand, meanwhile, neo-classic therorists suggest the contrary to increase employment aims to solve the problem of adjusting the aggregate supply. Recent studies show that the unemployment problem is related to supply and demand, simultaneously: employment-raising projects are based on a synthesis of the two theories. Meanwhile, in general, the cost of unemployment is being treated as non-produced potential GDP. Another economist Okun (1962) expressed the relationship between unemployment rate and GDP backwardness mathematically: this ratio shows that when the actual unemployment rate exceeds the natural unemployment rate by 1 %, GDP is lagging aproximately by 2.5 %. The long-term means of resolving the unemployment rate is to increase the emplyment rate: this means investment in innovation; cluster presence has a positive impact on country s development in both economic and social aspects: setting up new businesses, the real attraction of foreign direct investment and creation of new jobs and work places. Setting up the conditions for the growth leads to reduction of poverty, improvement of living standards, and in decline of public social disparities. Growing and expanding country s economy creates a favorable environment for attracting foreign dirent investment and increasing investment in human resources, as one of the most important factors, is influencing economic development. Investment in human resources is formed and accumulated in a particular health, knowledge, skills, abilities, motivation inventories that are specifically used for the reproduction of labor productivity and the efficiency of production in the 28

29 markets. Studies have confirmed that the educational potential factors are closely related to the country s production potential and the country s economic growth rate and level: expenditure on education and labor improvement have been identified as one of the main economic sources of growth with falling unemployment, decreasing social tensions between different sections of the population. Stated briefly, one of the preconditions is as follows: clustering effect increases region s occupancy rates, which in turn increases the amount of GDP per capita. Environmental aspect: Clustering processes affect the country s economy and ecology as well in decline of environmental pollution and environmental issues. The critics of economic growth argue that growth and industrialization are causing more climate pollution and that the environmental problems are caused by the increase of carbon emision. It is believed that in order to ensure a balanced development of the country, maintain a clean and healthy natural environment and optimize the nature of use, it is needed: to promote energy efficiency, renewable energy sources, to reduce electric and thermal power plant pollution by streaming the instalation process, to use less polluting fuels. In order to reveal how the economic development influences environmental problems and describe their correlation, the GDP per capita and industrial emission and concentration levels are being used this ratio is called environmental Kuznets curve (see Figure No. 3). This curve is viewed as a relationship between growth and environmental quality hypothesis, it is calculated as the ratio of GDP and CO 2. It is believed that after a certain time, it acquires a negative slope of curve, since to create (produce) the same amount of GDP, the more carbon dioxide is emitted. In this case this means that the energy is not being used as effectively as in the previous periods,while it is known - the main objective of the developing countries is to use energy as efficiently as possible. 29

30 Scheme 4. Kuznets curve: the ratio of GDP (%) and carbon emission (%) Source: Ecological Future, 2015 Assessment of clustering effect using econometric model: In order to assess the magnitude of investigated statictic results and forecast the possible values, the correlation and regression analysis are going to be used in this paper - the method of Ordinary Least Squares (OLS) is going to be used in the empirical part of the paper. Correlation analysis a statistical method, which analyzes the random variables with normal distribution and the relationship between the general plurality (Kėdaitis, 2009). According to the tendency to form, correlation is divided into linear and nonlinear, while the direction of development direct and reverse. Linear correlation is called a link when the two atrribute values are moving in one and the same direction increasing or decreasing. Inverse relationship is when the two atrribute values change in the opposite direction the increase of y decreases x, and vice versa. Correlation measures the relationship between the variables. Regression equation is obtained to determine a tied variable (Y) values. The correlation coefficient indicates the closeness of communication, and its symbol the nature of communication and direction. If the correlation coefficient is positive and closer to 1, the connection is direct, if negative in reverse. The correlation coefficient indicates the strength of linear relationship, so if its value is close to 0, one cannot claim that there is no correlation between the variables (Martišius, 2000). It is easier to interpret the squared correlation coefficient. The obtained value R 2 is called the coefficient of determination it shows what a tied variable (Y) of the total variation of its mean is caused by the change of independent variable X (Kėdaitis, 2009). In order to reveal the relationship between the studied factors both linear and nonlinear regression models will be used. The Fisher criterion is the value to determine and evaluate the statistical significance of the variables. 30

31 Methodology for Regional Performance according to Constructivism Regional integration theories and approaches aimed at explaining regionalization such as new-regionalism need to be enriched and revised so as to better explain Mediterranean integration and not to be restrained to the European model. 28 Understanding the behavior of the Middle Eastern states in the international relations system demands a flexible and inclusive theoretical framework - one that incorporates the politics of power and influence, but also the role of diverging ideas, norms and domestic considerations - intermestics, because taken together, liberal theories of interdependence, or institutionalism, have not helped in explaining regional cooperation - the Middle East remains an outlier in this case (Fawcett, 2013). For this particular matter the use of the European Union as a model for regional cooperation is arguably limited. On the other hand, the region has a long history of external interference and dependence explaining the attractiveness of realism, structuralism and liberalism, but the short lives and artificial nature of many states, together with the common, often transnational, bonds of history, language, and religion - among the Arab states at least - highlight aspects of constructivism (Fawcett, 2013). As it was stated before, regionalism is a policy-driven process in which states (and other actors) pursue goals and policies in any region how regionalism in world politics is instructive in identifying how regions take shape, not only internally, but also in relation to one another. However, new regionalism (after the Arab Spring) is flourishing in the Middle East - foreign policies are shaped by national situations, values and perceptions of policy makers and global and regional environments. Joseph de Rivera in his paper Handbook on Building Cultures of Peace presents the template for measuring, comparing and assessing the national cultures of peace in societal norms, states structures to achieve political stability and environmental characteristics (see table No. 3). 28 When regionalism refers to cooperation between regional partners through the creation of multilateral regional institutions, institutionalism. Regionalization refers to bottom-up sociopolitical processes and is tied to notions of identity. 31

32 Table 3. Template for assessing a national culture of peace Aspect of culture and area of action Objective measures available Needed measures Societal norms Peace education: to what extent are people educated (or socialized) to see themselves as a peaceful people with norms that emphasize cooperation and resolution of conflict dialogue, negotiation, and violence Percent GDP devoted to education* Number of peace education programs per capita Valuing of women and nurturance: to what extent are the Percent of seats in legislature held by voices of women, as important as those of men, and to women (UN gender empowerment what extent are children and nurturance valued? includes other measures) Availability of maternity/paternity leave, daycare programs Societal cohesion and tolerance: to what extent do understanding, tolerance, solidarity, and mutual obligation form the basis of a cohesive society (rather than the image of a common enemy or a rigid set of norms?) State structures achieve political stability by Democratic participation: to what extent is there democratic participation, with a civic society that enables freedom of advocacy so that personal needs can be met? Number of refugees admitted (minus refugees generated or displaced within the nation) relative to total population Vanhanen Democratization index Number of national celebrations in which different ethnic groups participate Number of NGOs relative to population Open communication: to what extent is there open communication with transparency and accountability, rather than press control and corruption? Freedom House s Press Freedom Ratings Publicly debated issues (e.g. (Corruption scores by Transparency war in Iraq, gay marriage) International are also available) minus (e.g. military budget) Human rights and the inclusion of all groups: to what extent are human rights ensured by a government that include all groups and has enough authority to insure these rights are maintained? Environmental characteristics International security: to what extent does the society encourage international security rather than compete for power and sell arms? Inverse of Gibney s political terror rating Measure of group inclusion of Amnesty International Data Military expenditure as a percent of GDP Number of vetoes of Security Council Resolutions Equitable and sustainable development: to what extent is GDP per capita; life expectancy; adult there equitable and sustainable development so that literacy needs are met in ways that are in harmony with the Gini inequality index and environment? Homicide rate A composite of current measure of recycling, waste generation, and environmental degradation *Currently, there are no measures of the extent to which nonviolent education is being taught in different societies. Source: Rivera J. Handbook on Building Cultures of Peace, p

33 2. EU S REGIONALIZATION TECHNIQUES The promotion of regional integration has become part of the governance package the EU seeks to export, particularly to its immediate neighborhood, and inter-regionalism (the cooperation between regions) as a way to promote socio-economic development, democracy and good governance through dialogue and mutual cooperation (partnership) has developed into one of the foundations of its foreign policy (Smith 2008, Grugel 2004). Scheme 5. The EU s normative constitution Source: Elgström O., Smith M. The European Union s Roles in International Politics. Concepts and analysis, 2006, p. 70. It is known that regional economic and political cooperation, the building of issue-related regimes, and the creation of joint institutions for consultation and decision-making in its neighborhood and beyond as well as between the world regions is the highest priority for the EU. Furthermore, it is stated that the EU is on a mission to achieve peace, wealth and social justice - the EU s goal is to ensure (regional) security, stability and prosperity at the EU s borders and beyond (Magen, 2006) while using emulation method. The EU s goal in fostering regionalization internally and externally is twofold: 1. To create regional cohesion and development in the member states; The period from 2000 until 2013 was dedicated to create clustering effect in each member state. Financial instruments were used for regionally-clustered high technology small and mediumsized enterprises (SMEs) and collective learning. The term high-technology is widely used as a catch-phrase usually denoting industries producing technologically-advanced, sophisticated and changing products. The focus on high-technology SMEs can be justified on various grounds. The 33

34 vital importance for high-technology SMEs competitiveness and growth of continuing innovation, especially in products and services, is powerfully attested by numerous empirical and theoretical studies showing significantly greater basic income for regional and national economies. Both national and regional governments in the EU try to foster close linkages and cross-fertilization amongst various business sectors as well as between science and business by promoting the establishment of clusters and other sites of knowledge-intensive economic value creation. Thus, all over Europe, science and technology parks, science-business-transfer centers, and business incubators have been set up in order to foster innovation (Keeble, 2000). 2. To pursue stability, peace and security in the member states and in the immediate neighborhood. Former German foreign minister Joschka Fischer also has called for a new Middle East order bringing together the Arab countries and their neighbors, which could learn from Europe s evolution from the ECSC to the EU. 29 It is believed that the EU s close interest in Middle Eastern affairs was provoked by the OPEC oil embargo and the 1973 Arab-Israeli war (Yan Kipur). Since then, EU policies towards the Middle East have been shaped by the three major concerns: energy security, regional stability (understood as the maintenance of domestic stability in the countries in the geographically close North Africa) and the cessation of the Arab-Israeli conflict. Accordingly, EU policy-makers have sought to create cooperative schemes with the countries mentioned above to encourage and support economic development and growth. It was hoped these steps would serve to reduce refugees flows from the Middle East into Europe, and prevent regional conflicts being exported into this region as well EMULATION METHOD As an example to illustrate the clustering effect and what kind of emulation method the EU is pursuing to foster regionalization and coherent regional security California and Île de France will be compered in economic, social and ecological aspects starting from 2000 until The main objective of this chapter is to calculate the agglomeration coefficients in the US and France accordingly, to assess the extent of clustering effect in high-technology industry, IT in particular, and identify existing clustering effect on the economic, social and environmental aspects at regional and national levels. First of all, there is a need to check wether cluster derivatives do exist in the US and France: in order to do so, the agglomeration coeffcient must be calculated. If the obtained value is greater than 1, this means that the tested country s industry is concentrated in a few regions (states), if less than 1, this means country s industry is allocated across the country (see Table No. 4). 29 Salem P. Building Cooperation in the Eastern Middle East. Carnegie Endowment,

35 Table 4. Agglomeration coefficient in the US & France US France Number of regions (states) in a country* Number of employees in IT industry in particular region (state) of the country Number of employees in IT industry in a country Total number of employees in a particular region (state) Total number of employees in a country Agglomeration coefficient A k : * The number of regions (states) is taken without colonies & islands. Note: made by the author, statistical information is taken from the national statistic departments (the US and France), After calculating the agglomeration coefficient, the hypothesis was affirmed the US IT industry is mainly concentrated in a few regions, Ak = 8.74 > 1. The same case was in France the value of the agglomeration coefficient Ak = 7.14 >1. Following the examination of both cases, it can be said that the two countries are developing clustering effect, in IT sector, in particular. The US. One of the first world-class business clusters was established in California, the US, and named as Silicon Valley. The major components of technological cluster Silicon valley are these: infrastructure (buildings with modern, fast communication system with prominent global companies and branches of government research institutions), favorable taxation system, venture capital, and skilled labor force. As the result of the cooperation and networking activities, Silicon Valley companies are constantly going on merging or separation, preparation of business plans and the adjustment of the tactical and strategic meetings, public companies stock sales, business angels and venture capitalists associations in open meetings. In this way, the Silicon Valley cluster evolves efficiently and flexibly adapting to changing market conditions. France. According to the statistics (for more detailed information see here: < Île-de-France region creates about new jobs and more than computer engineers and IT professionals acquire diploma in this field annualy. Many countries wish to adapt clustering effect, but in order to produce positive clustering effect, a cluster trade (production) should be focused on overseas export market, and on the creation of high-value added goods/products. Many factors are determined the terms of bureucracy in a country itself, which is measured with the index of economic freedom. The way the cluster is financed is also very important, whether it is financed by government or venture capitalists, or using the method of private-public-partnership. Clustering effect assessment: economic aspect. It is noted that positive changes in consumer behavior and expectations are influenced by rapidly evolving industrial technological clusters market which at the same time increase foreign direct investment per capita in a country. These changes correspond with the increased consumption and hence with the increased GDP. The 35

36 trend is as following: consumption increases, the unemployment goes down, the trade turnover is increasing, the exchange rate is rising and the inflation is in decline stage. According to the US Census Bureau (2014), increasing labor productivity resulted in decreasion of inflation rate in the state of California during the time of investigation ( ). This can be explained in a way competition in the labor market increases productivity: cluster companies are constantly competing with one another, as well as the universities and the employees - the minimum wage per hour increases in the US from 0.3 % in 1940 to 7.25 % in 2014, while in California it reached 8 % accordingly (Source: US Department of Labor, 2014). However, we have a different case scenario in France - from 0.4 % to 5.7 % during the same period of time at national and regional levels accordingly (Source: Institut national de la statistique et des études économiques, 2014). This, again, might lead to the product (technology) life cycle theory and the related development stages. This is where the Cobweb model might be used as an explanation model as well - when augmenting labor productivity increases average wage in the country. Clustering effect assessment: social aspect. This part of the research is aimed to assess the social impact of the clustering effect in a particular region. It is known that this process is slow, but one of the most important advantages given as a result of this phenomenon is increased employment in the region, and this result also leads to decreasing social tensions. The economic freedom given to people promotes entrepreneurial activities in the region and accelerates high value-added products/services/technologies creation and its export, which in turn increases the aggregate demand and at the same time the GDP. While comparing the statistical results of both countries during the time of investigation, it was observed that GDP per capita increased in both countries at national and regional levels (Sources: the US Census Bureau & Institut national de la statistique et des études économiques, 2014). However, the employment rates differ: in California it is in decline, while in France it is on the contrary - at regional level it is increasing and all over the France is in decline. This might be explained by the cluster life cycle as well: Californian cluster Silicon Valley has reached the stagnation phase, while in Île-de-France cluster is still in a phase of development. Clustering effect assessment: environmental aspect. The main aim of this part of the research is to reveal the changes of economic growth and evolution of carbon emission in these two particular countries at national and regional levels. The changes of economic growth (%) and carbon emission (%) are being taken for comparative analysis during the time of investigation ( ). As it was mentioned above, the relationship betwen economic growth and carbon emission in scientific economic literature is called environmental Kuznets curve. According to statistical data (Source: US Census Bureau, 2014), the Kuznets curve ( GDP/ CO 2 ) was augmenting in the US until This means that economic growth was higher 36

37 than the carbon emission then (bln. T). Meanhile, in California these measures were quite stable - this means that in comparison with the US, state of California requires less energy while providing the same quantity of production/goods/technologies. There is a similar situation in France (Source: Institut national de la statistique et des études économiques, 2014). To conclude, the cluster is more economically efficient than average region of the country since less energy is needed to create the same quantity of production/services/technologies. While assessing the ecological clustering effect aspect it is noted that in both countries, the US and France the carbon emission rates at regional levels are lower than at national levels. These above mentioned research results show the effectiveness of the cluster. Regression analysis. The main aim of this chapter is to describe briefly how cluster processes affect the country s economic development in the economic, social and environmental aspects for the general assessment using the regression analysis (Ordinary Least Squares - OLS) and SPSS methodology, also to calculate when both countries reach the same level of development - cohesion - at regional and national levels; while all other factors remain constant. Economic aspect. Hypothesis: when labor productivity is increasing in the country/region, inflation rate goes down and vice versa H 0 : r=0 H 1 : r 0 Table 5. Equation of models for inflation and labor productivity in the US and France National level R Equation of the model Signifiquance of the model US Inflation = 4,255 0,314* labor productivity Significant France Inflation= 11,756 0,856* labor productivity Significant Regional level California Inflation = 8,037 0,043*labor productivity Significant Ile-de-France Inflation = 8,198 0,470* labor productivity Significant Note: made by the author This means that if the labor productivity in the US increased by 1 % that should lead to the decrease of the inflation rate by %, and if the same is done in California that should lead to the decrease of inflation rate by %. The correlation coefficients are and accordingly. Since p < α (0,000 < 0,05), hypothesis H o is rejected, and this means that econometric model explaining the relationship between labor productivity and inflation rate in the US at national and regional levels is statistically significant. In France we have this scenario for explaining the same kind of equation: increase in labor productivity by 1 % leads to decrease of inflation rate by % at national level and by % at regional level. The correlation coefficients are and accordingly. Since p < α (0,000 < 37

38 0,05), hypothesis H o is rejected, and this means that econometric model explaining the relationship between labor productivity and inflation rate in France at national and regional levels is statistically significant. However, the chosen models and equations explain approximately 50 % of the sampling variation, it means that not only labor productivity has influence on the inflation rate, it might as well be influenced by Government s monetary or fiscal policies, force majeure and other preconditions. Social aspect. Hypothesis: if employment rate is increasing in the country/region, then GDP per capita is increasing and vice versa H 0 : r=0 H 1 : r 0 Table 6. Equation of models for GDP per capita and employment rate in the US and France National level R Equation of the model Significance of the model the US GDP per capita = 35786, ,567* employment Not significant France GDP per capita = ,189* employment Significant Regional level California GDP per capita =208968, ,561*employment Not significant Ile-de-France GDP per capita = -7909, ,234* employment Significant Note: made by the author This means that if the employment rate in the US is increased by 1 % that should lead to the decrease of the GDP per capita by 4676 EUR, and if the same is done in California that should lead to the decrease of GDP per capita by 2093 EUR. The correlation coefficients are and accordingly. Since p > α (0,15 > 0,05) and p > α (0,085 > 0,05), hypothesis H o is accepted, and this means that econometric model explaining the relationship between lemployment and GDP per capita in the US at national and regional levels is statistically insignificant. This means that if the employment rate in France is increased by 1 % that should lead to the increase of GDP per capita by 6318 EUR, and if the same is done in Ile-de-France region that should lead to the increase of GDP per capita by 812 EUR. The correlation coefficients are and accordingly. Since p < α (0,000 < 0,05), hypothesis H o is rejected, and this means that econometric model explaining the relationship between employment rate and GDP per capita in France at national and regional levels is statistically significant. 38

39 Environmental aspect. Hypothesis: if the economic growth is increasing, the carbon emission is in decline and vice versa H 0 : r=0 H 1 : r 0 Table 7. Equation of the models for economic growth and carbon emission National level R Equation of the model Significance of the model US Carbon emmision =2,131-0,465*economic growth Not significant France Carbon emission = 1,203-0,59* economic growth Not significant Regional level California Carbon emission = 3,321 0,123* economic growth Significant Ile-de-France 0,952 Carbon emission = 2,012+ 0,358* economic growth Significant Note: made by the author This means that if the economic growth in the US is increased by 1 % that should lead to the decrease of the carbon emission by %, and if the same is done in California that should lead to the decrease of carbon emission by %. The correlation coefficients are and accordingly. Since p > α (0,83 > 0,05) and p < α (0,000 < 0,05) accordingly, hypothesis H o is accepted in case of national level and rejected of regional one: and this means that econometric model explaining the relationship between economic growth and carbon emission in the US at national level is statistically insignificant, while it is on the contrary at regional level. In France we have similar case: if the economic growth in France is increased by 1 % that should lead to the decrease of the carbon emission by 0.59 %, and if the same is done in Ile-de- France that should lead to the decrease of carbon emission by %. The correlation coefficients are and accordingly. Since p > α (0,07 > 0,05) and p < α (0,000 < 0,05) accordingly, hypothesis H o is accepted in case of national level and rejected of regional one: and this means that econometric model explaining the relationship between economic growth and carbon emission in France at national level is statistically insignificant, while it is on the contrary at regional level. Regional cohesion: assessment. In order to find out when both countries reach the same level of development - cohesion - the below written formula is being used. GDP A = GDP B0 + GDP B * t ; Using the given formula, it was found that GDP per capita in the US and GDP per capita in France under the conditions of ceteris paribus will reach the same level approximately in 61 year. Using the same formula for measuring regional performace (California vs. Ile-de-France), it was found that the same should happen in about 6 years. This investigation leads to the final conclusion of this chapter: the region where the cluster processes take place is evolving/developing/raising GDP per capita about 10 times faster than the average region of that particular country. 39

40 The next EU s strategic decision is to create clustering effect in Europe as a whole. In order to address this goal the policy called Smart specialization has been initiated. Smart specialization is a strategic approach to economic development through targeted support to research and innovation (from 2014 until 2020). More generally, smart specialization involves a process of developing a vision, identifying competitive advantage, setting priorities and making use of smart policies to maximize the knowledge-based development potential of any region, strong or weak, high-tech or low-tech. (Source: European Commission, Innovation-driven Growth in regions: the Role of Smart specialization; EUROPEAN NEIGHBORHOOD POLICY The goal set out in the Barcelona Declaration was to turn the Mediterranean basin into an area of dialogue, exchange and co-operation granting peace, stability and prosperity (Barcelona Declaration 1995). The EU adopted a Mediterranean policy (under the European Mediterranean Partnership) that addressed not only the traditional trade and financial issues, but also a wide range of non-traditional political security issues such as the inter-religious dialogue, racism, and xenophobia. However, the practice had shown that the domestic political and socio-economic system which proved successful in Western Europe and which has been extended to Eastern Europe through the enlargement process cannot be replicated to Med countries. A decade of EMP cooperation has resulted in only limited changes in some Med countries. Notwithstanding, the EU s activities are focused on creating a ring of countries around the EU with which the EU has close, peaceful and cooperative relations (COM 373 final, 2004). This goal is coherent with the broader goals of the European Security Strategy, which strives to achieve a secure Europe by enhancing stability in its neighborhood and around the world. Under the European Neighborhood Policy (ENP), the EU works together with its partners to develop democratic, socially equitable and inclusive societies, and offers its neighbors economic integration, improved circulation of people across borders, financial assistance and technical cooperation toward approximation with the EU standards (Source: The more for more principle applies to all incentives proposed by the EU: policy developments as well as to financial assistance (excluded humanitarian assistance, refugee & external borders funds and support to civil society). It is believed that the main strength of the ENP perspective stems from the fact that it has a relatively neutral conception; it does not a priori exclude some states or have colonial baggage. Though it has very few backers in the core countries of the Levant, it does not have many enemies either; and this may eventually turn out to be its greatest strength in the long run. Moreover, it remains the only scheme that managed to bring Syria, Lebanon, Israel, the Occupied Palestinian 40

41 territories and a wide spectrum of non-state actors together under one umbrella. The Action Plans for each country were created corresponding with the main goals of Horizon 2020 and Europe2020 strategies. 30 Scheme 6. European Union and its immediate neighborhood Source: The EU claims trade to be as a mean of economic growth, jobs creation, greater variety of goods, reduction of poverty, securing economic ties between the nations, easiness of doing business, boosting competition as well as competitiveness, exchanging innovative or hightechnology products, and the main driver of prosperity. Europe remains the principle market for exports from the Middle East and is dependent on energy supplies from North Africa and the Persian Gulf. European efforts to promote Arab-Israeli peace are an expression of Europe s own security interests and ties on both sides of the divide, but there is little to show for EU enlargement 30 The Europe2020 is Europe s blueprint for a smart, sustainable and inclusive future, providing a ten year roadmap for growth and jobs. Horizon2020 is the financial instrument implementing the Innovation Union, a Europe2020 flagship initiative aimed at securing Europe s global competitiveness. Programs Europe2020 and Horizon2020 are being initiated responding to the economic crisis to invest in future jobs and growth; addressing people s concerns about their livelihood, safety and environment; strengthening the European Union s (EU) global position in research, innovation and technology. 41

42 in the Israeli-Palestinian peace process, except the dependence of the Palestinian Authority on the EU financial support. The ENP and its action plans for Arab reform, intertwined with the deals done by the Europeans with the Arabs dictators to protect European security, have contributed to the problems that led to the Arab uprisings, while the forces of political Islam, which the European had hoped to contain, are resurgent (Fawcett, 2013). Palestine (Occupied Palestinian Territory - West Bank and Gaza Strip). The EU believes that greater trade with Europe can offer a potential source of economic growth and stability for Palestine. However, imports from Palestine to the EU are very low, only 14 million euros in 2014; they consist mainly of agricultural products and raw materials, and also articles of stone, plaster and cement. 31 Palestinian participation in the ENP takes place in the context of the overall political situation in the region which affects the scope of actions: there are numbers of constraints and limitations resulting from the ongoing Israeli-Palestinian conflict and the continuing occupation, including settlement activity, restrictions to movement as a result of the closure policy and the separation barrier. Notwithstanding, the EU remains the biggest donor of financial assistance to Palestine - the Action Plan concluded with the Palestinian Authority set up the agenda of the economic and political cooperation with the EU. 32 Graph 1. Occupied Palestinian Territory Trades in Goods with the EU Source: Eurostat, 2015 Lebanon. The EU seeks to help Lebanon develop into a stable, democratic, politically open and economically strong neighborhood. Lebanon benefits from the EU financial assistance, Ibid. 42

43 receiving annually approximately 50 million euros from the European Neighborhood Instrument - this amount is supplemented by various regional and thematic programs. 33 Graph 2. Lebanon s Trade in Goods with the EU Source: Eurostat, 2015 Jordan. It is claimed that the EU has excellent relations with Jordan based on an advanced status partnership from In a difficult regional environment, Jordan continues to exert a stabilizing and moderating role while pursuing efforts to strengthen democracy and rule of law. In response to the conflict in Syria and Iraq as well as the Da esh threat, the EU regional strategy was adopted in March 2015, drawing together the different strands of current future EU action covering diplomatic, political, humanitarian aid and stabilization, counter-terrorism, peace-building measures and also covers neighboring countries including Jordan

44 Graph 3. Jordan s Trade in Goods with the EU Source: Eurostat, 2015 Israel. The EU and Israel committed themselves to establishing a partnership which provides for close political and mutually beneficial trade and investment relations together with economic, social, financial, civil scientific, technological and cultural cooperation; also, for the first time, there is a financial assistance element to EU-Israel cooperation - Israel is eligible for 14 million euros in European Community financial cooperation over the next seven years (under the Horizon2020). 35 Graph 4. Israel s Trade in Goods with the EU Source: Eurostat, 2015 However, following the decision by the EU foreign ministers in December 2012 stating that all agreements between the state of Israel and the EU must unequivocally and explicitly indicate

45 their inapplicability to the territories occupied by Israel in 1967, the European Commission issued guidelines for the 2014 to 2020 financial framework covering all areas of cooperation between the EU and Israel, including economics, science, culture, sports and academia. 36 According to the directive all future agreements between the EU and Israel must explicitly exclude Jewish settlements and Israeli institutions and bodies situated across the pre-1967 Green Line - including the Golan Heights, the West Bank and East Jerusalem. EU grants, funding prizes or scholarships will only be granted if a settlement exclusion clause is included, forcing the Israeli government to concede in writing that settlements in the occupied territories are outside the state of Israel to secure agreements with the EU (Horizon2020 Road Map): in conformity with the EU s longstanding position that Israeli settlements are illegal under international law and with the non-recognition by the EU of Israel s sovereignty over the occupied territories, irrespective of their legal status under domestic Israeli law. Syria. In May 2011, the EU suspended its bilateral cooperation programs with the Syrian Government under the ENP. The EU Foreign Affairs Council of 20 October 2014 endorsed the Syria and Iraq: Counter-Terrorism/Foreign Fighters Strategy, which is an integral part of the EU regional strategy for Syria, Iraq and the Da esh threat adopted by the Council of 16 March It is stated that the EU has reiterated the urgent need to find a political solution to the conflict, and will continue to work with all interested parties: the UN, the League of Arab States, and regional and international partners. The EU recalls that the overall objective remains a Syrian-led process leading to a transition that meets the aspirations of all the Syrian people, based on the Geneva Communiqué of 30 June 2012 and in line with the relevant UN Security Council resolutions - it is emphasized that the Syrian crisis has become the world s worst humanitarian and security disaster Ibid. 45

46 Graph 5. Syria s Trade in Goods with the EU Source: Eurostat, 2015 Notwithstanding the information analyzed above, the economic co-operation between the EU and the Middle East, economic interdependence creation, security, peace and stability in the region, in the core coutries of the Levant in particular, are still hampered by the old type of conflicts (Arab- Israeli and Israeli-Palestinian), new type of conflicts (civil war in Syria) and the new augmenting threat - ISIL/Da esh. 46

47 3. MAIN OBSTACLES FOR REGIONALIZATION IN THE MIDDLE EAST At the core of liberalism is a belief in reason and the possibility of progress. Liberalists believe that economic interdependence leads states to develop mechanisms to resolve conflict, which reinforces the material incentive to avoid wars that inhibit business opportunities. Constructivists argue that agents (supranational entities) shape society, and society shapes agents through reciprocal interaction. However, liberalism and constructivism school of thoughts have bee challenged in the Middle East, in the core countries of the Levant, in particular. For more than a century, the Middle East has been the setting for one of the most dangerous, seemingly intractable conflicts in the world - the struggle between Jews and Arabs. For this particular situation the UN identifies this place as the world s trauma center. The situation becomes even more difficult with the ongoing civil war in Syria, Da esh threat and massive refugees flows to Europe. Author of this paper is crafting her research based on other scholars research results. Mirjam E. Sørli, Nils Petter Gleditsch and Håvard Strand wrote a study Why Is There So Much Conflict in the Middle East? analyze the conflict regionalization in this part of the world. Their study has found no support for Middle East exceptionalism regarding the causes of conflict (having independent variables as poverty, ethnic dominance-islam; oil, authoritarianism, or both combined). Nevertheless, it was found that the Israeli-Palestinian & Arab-Israeli conflict has spurred both interstate and intrastate conflict and hampered economic integration and social development in the region. The EU urges all international actors, in particular the countries in the region, to play a constructive role in addressing the crises as their engagement is necessary in order to achieve regional and international stability and to find durable solutions. Joseph de Rivera in his paper Handbook on Building Cultures of Peace presents the template of the appropriate environment to build cultures of peace. He emphasizes on the societal norms, political-economic stability and environmental characteristics. Statistics shows that in many aspects the core countries of the Levant still fall behind the average POLITICAL ASPECT It is argued that states structures achieve political stability by democratic participation, that is defined by electoral process and pluralism, functioning government, political participation, political culture and civil liberties; open communication (hence, a total score of 0 to 30 results in a Press Freedom; a status of Partly Free; a status of Not Free) and by political and societal terror. The worst case scenario measuring democratic participation remains in Syria (see Table No. 8) - it scores 1.74 in 2014 (according to Vanhanen Democracy Index). 47

48 Table 8. Democratic participation in the Levant Vanhanen Democracy Index (2014) Lebanon 5.12 Occupied Palestinian Territory 4.72 Syria 1.74 Jordan 3.76 Israel 7.63 Source: The Economist Intelligence Unit, 2015 The worst case scenario for the open communication is in Syria too: scores at 90 - this is not Press Free country. The second scores Jordan - 66 (no Press Free) and the third is Lebanon - 55 (as partialy Free), while the U.S. scores 18 and France 23. Table 9. Open communication in the Levant Press Freedom (2014) Lebanon 55 Syria 90 Jordan 66 Palestine n.d. Israel 30 Source: Freedom House, 2015 Measuring the political terror and societal violence scale in the Levant it becomes clear that the worst situation is in Syria as well, then - Israel and the Occupied territories, and Lebanon. In Syria political terror and societal violence scores 5, and this means that terror has expanded to the whole population. The leader of this society Bashar al-assad places no limits on the means or thoroughness with which he pursues personal or ideological goals. Israel and Occupied territories score 4 on political terror, this means that civil and political rights violations have expanded to large numbers of the population. Murders, disappearances, and torture are a common part of life. In spite of its generality, on this level terrors affects who interests themselves in politics or ideas. The third 48

49 place belongs to Lebanon, here political terror scores 3, this means - there is extensive political imprisonment. Execution or other political murders and brutality are common. Unlimited detention, with or without a trial, for political views is accepted. Table 10. Political Terror and Societal Violence Scale in the Levant Political Terror scale (2014) Societal Violence Scale (2013) Lebanon 3 4 Syria 5 5 Jordan 3 3 Israel and Occupied Territories 4 2 Source: Gibney s political terror rating, 2015 Moreover, military expenditure is increasing few years in a row in these particular countries. The EU seeks to create peace, stability and prosperity in its immediate neighborhood. However, EU s regionalization techniques are hampered by the Old type (Arab-Israeli and Israeli- Palestinian) and New type (civil war in Syria) of conflicts. There is a possibility that the risk of a spill-over to neighboring countries - Lebanon and Jordan. Table 11. Military expenditure (% of GDP) in the Levant Military expenditure (% of GDP) Lebanon 4.6 Jordan 3.5 Israel 5.2 Syria Palestine n.d. n.d. Source: World Bank Data, 2015 Furthermore, shadow regionalism, a situation where two somewhat parallel structures of power exist in regard to the regional integration process, is taking place all over the Levant. Nonstates actors like Hezbollah 39 and ISIL/Da esh 40 organization threaten regionalization processes in 39 Hizbollah, Hizbu'llah is a Shiite Muslim political party and militant group that the United States and European Union consider a terrorist organization. 49

50 the Middle East. Considering the economic and environmental impacts of Lebanon War in 2006, when Israel and Hezbollah fought each other, it is known that oil prices climbed to a new record high of $78 USD per barrel 41 and the Israeli airstrikes into fuel tanks at the Jiyeh power station in Lebanon caused the spillage of over tons of oil into the Mediterranean Sea. 42 The impact of this spillage was so large-scale that by the time it was controlled it had reached as far as the coastlines of Syria and Turkey. Moreover, the indiscriminate use of cluster bombs at the tail end of the conflict continues to hunt civilians within the catchment area of the conflict. 43 The conflict in Syria and the ISIL/Da esh acts caused in the high number of registered and unregistered refugees in Lebanon (approximately 1.2 million in January 2015, representing more than 25% of the Lebanese population) that is exacerbating existing tensions within Lebanese society, institutions and communities at the same time placing a strain on scarce natural resources. While the Lebanese Government opted for the so-called 'disassociation policy' from the conflict in Syria, based on the Baabda Declaration of June 2012, Hezbollah and Sunni terrorist groups have gradually enhanced their direct participation in the conflict - ungoverned spaces enable criminals and terrorists to thrive. This is why it is crucial and equally important to encourage inclusive and rules-bound reconciliation in old and new conflicts embedded within a new regional security architecture in the wider Middle Eastern space SOCIO-ECONOMIC ASPECT Table No. 12 indicates the similarities between core countries of the Levant in terms of GDP per capita. This table shows that there is a polarization effect under the ENP: Israel s GDP per capita is significantly higher than neighboring countries - it is higher from 3 to 13 times. Table 12. Equitable & sustainable development (GDP per capita (Euros)) Equitable & sustainable development GDP per capita (euros) Lebanon Jordan Israel , , , ,022,5 8, , , , , , , , , , , The so-called Islamic State of Iraq and the Levant, whose acronym in Arabic is Da esh. 41 Assel T. Meg Huby, Sofia Frantzi. Dealing with pollution from conflict: Analysis and discourses around the 2006 Lebanon oil spill, Ibid. 43 International Committee of the Red Cross. Lebanon: cluster munitions set to haunt civilians for years to come,

51 Equitable & sustainable development GDP per capita (euros) Syria West Bank & Gaza Strip ,117.1 n.d. n.d. n.d. n.d. n.d. n.d. n.d. n.d. n.d. Source: World Economic Outlook, 2015 This might be explained by the diffusion of technological innovations, flow of capital and high-tech clustering effect that is taking place in Israel, while neighboring countries has only modest achievement in high-tech industry or not at all: Syria has no high-tech export experience, Israel scores better than Jordan 124 times, better than Lebanon 233 times, better than West Bank and Gaza Strip times. Furthermore, the land of neighboring countries is dedicated mainly to agriculture: Lebanon - 64 %, Syria - 76 %, West Bank & Gaza Strip - 44%, Jordan - 12%. Another very important indicator in economics is youth unemployment in the Levant: female 66 % and male 23 % in Syria; female 56 % and male 28 % in Jordan; female 56 % and male 35 % in West Bank and Gaza Strip; female 24 % and male 19 % in Lebanon. Far better situation is in Israel. The youth unemployment scores 11 % for both - male and female. It is very important to note that despite the fact the majority of youth female are educated, there are very high restrictions on the types of jobs women can do in this part of the world (see Graph 6). This might explain why female unemployment rate is this high in this region (see Graph 7). Graph 6. Economies per region with restrictions on the types of jobs women can do Source: World Bank, Business and the Law,

52 Graph 7. Female participation in the labor force Source: ILD, Key indicators of the Labor Market 3.3. ENVIRONMENTAL ASPECT Although natural disasters including earthquakes, hurricanes, floods, and droughts hit rich and poor countries alike, such events can have far more dire economic, political, and security consequences in countries that are more vulnerable as a result of past conflicts and chaos - serious natural disasters in these countries may lead to renewed conflict as different groups fight to have their losses and grievances redressed (Castillo, 2011). The poor, women, people with disabilities, migrants, minorities, children, the elderly, youth - the whole community becomes vulnerable to natural disasters, climate change, industrial hazards; low social cohesion, unresponsive institutions, poor governance lead to conflict, civil unrest, even war. The term Anthropocene was formally introduced in 2000 by Nobel laureate Paul Crutzen and Eugene Stoermer. It is stated that humans have changed the planet in a number of fundamental ways (Syvitski and Kettner 2011), many of which are far less known than global warming: deforestation for wood and land clearing for cultivation is an obvious example; the direct effects include soil erosion, hill slope failure and downstream sedimentation, but infrastructure - dams, cities, transportation networks and coastal management measures - has led to lasting and profound impacts. Ongoing international disputes and tension over water scarcity, water pollution, and water allocation may be escalated and fueled by climate change (Trondalen, 2008). Climate change is a complex phenomenon with differentiated impacts across countries, regions, sectors, income groups, age groups, ethnic groups and sexes. Those standing to lose most from climate change are those already very exposed, especially smallholder farmers. Changes in rainfall and temperature are felt most acutely by the people who depend on natural systems for growing crops and raising livestock and by those who depend on them for food. These groups already face water scarcity, especially in the Middle East. 52

53 Global warming is causing extreme weather events that are nudging water supply issues from bad to desperate. On their own, vanishing rivers or droughts could devastate a year's worth of crops but combined and over time, they pose a civilizational threat. At this point, the U.S. intelligence agencies consider the prospect of water shortage a threat to be considered alongside terrorism and weapons of mass destruction 44 - this latest trend in global land grabbing - that for outsourced food production - is only one part of a larger attack on land, territories and resources. Living from the land is becoming more difficult and, in many parts of the world, more dangerous by the day. Extremely dangerous situation is in the Middle East - the most water-stressed region in the world (see Graph No. 8): Tigris and Euphrates are also looked at because of their strategic, political, economic, energy and agricultural significance for Turkey, Syria and Iraq. Graph 8. Tigris and Euphrates Source: The world has about 42 trillion cubic meters of available freshwater, but distribution is drastically uneven. The Middle East with North Africa stand with 0.5 % of global renewable freshwater resources. 45 At 226 billion cubic meters, the region has only 673 cubic meters of water per person, the lowest among developing regions; by contrast, Latin America and the Caribbean, with 32 percent of world resources, has 22,810 cubic meters per person; Europe and Central Asia, with 12 percent, has 12,516 cubic meters per person; and East Asia and Pacific, with 21 percent, has 44 United Nations University. Institute for Water, Environment and Health. Water in the World We Want. Catalysing National Water-Related Sustainable Development, Human Development Report,

54 4,446 cubic meters per person 46 - water isn't always where people need it when they need it, and all societies need it for everything: health, sanitation, agricultural production, energy and industry - it s about distribution. Water shortages are the greatest threat to global security: nowadays according to a UN report 47, about 2.9 billion people in 48 countries will be facing water shortages within 10 years that could destabilize and jeopardize the very existence of some countries. Graph 9. Projected Water Scarcities by 2025 Source: The notion of water security in this context is linked to different actors need to attain control and access to water resources in order to secure their vital interest on various scales and geographical levels, seen from a strategic, political, economic, cultural, environmental and social perspective. The fact that different actors have incompatible, competing, or conflicting strategic interests often create conflicts with varying intensity (Trondalen, 2008). UN warns of climate change effects on water shortages: the UN Food and Agricultural Organization has warned in a new report that climate change is likely to reduce agricultural output and make water shortages in the Middle East worse, threatening the poor of the region. The report warns of an increased risk of conflict over scarce resources, and predicts that an extra million people could experience additional water stress in temperatures increases by a few degrees (Source: 46 Ibid. 47 United Nations University. Institute for Water, Environment and Health. Water in the World We Want. Catalysing National Water-Related Sustainable Development,

55 Corresponding with what was mentioned above, the politics of the Israeli-occupied Shebaa Farms, a rugged sliver of mountainside wedged between Lebanon, Israel and Syria, have long overshadowed what some Lebanese environmentalists call the real issue of the disputed area: it s water resources. Now activists are calling for hydro-diplomacy to take precedence over political maneuvering as the most effective solution to one of the key stumbling blocks to Middle East peace: there will not be enough water for our generation or the next. We will see social, economic, political and military conflict - and in that order - within the next 20 years. 48 Graph 10. Israel water delivery system and the Dan River (Shebaa Farms) Source: The decline in our ability to predict the flow of the world's water based on historical patterns, called relative hydrological stationarity in the scientific community, is a game changer - this is how water shortage breeds conflict. As water supply experts Shira Yoffe and Aaron Wolf argued, scarcity of clean freshwater has contributed to many episodes of acute violence on a small geographic scale across the world, bloody conflicts between states. Adel Darwish, co-author of Water Wars: Coming Conflicts in the Middle East, has argued that access to water has played a significant role in the Arab-Israeli conflict, including the 1967 war. Bassam Jaber, a water expert at Lebanon s Ministry of Energy and Water, argues the Shebaa is critical to Israel s water needs, especially because fresh water is critical when all sources within Israel are salty <...> Israel is 48 Analysis: Shebaa Farms key to Levant hydro-diplomacy,

56 worried that if Lebanon gains control of the Shebaa, it can then controls the flow to the Dan River 49. The absence of hydro-diplomacy between Israel and Lebanon, the continued Israeli occupation of the Shebaa Farms will remain a key trigger to renewed conflict between these actors. The Helsinki Rules on the Uses of the Waters of International Rivers was the first attempt by any international association to codify the entire law of international watercourses. The Helsinki Rules treat international drainage basins (watershed extending over two or more states) as indivisible hydrologic units to be managed as a single unit to assure the maximum utilization and development of any portion of its waters (Helsinki Rules, ref. 5, art. II). 50 While uncertainty of legal right can induce cooperation among those sharing a resource, it can also promote a severe conflict (Radinsky, 1994). Some of the relevant consequences of climate change that may foster waterrelated or induced conflicts could be summarized as follows: sudden hydrological shocks as well as slow onset changes can increase the risk of conflict in unstable states and regions because the governments lack capacity to respond, adapt and recover SOCIETAL ASPECT Most of the time, international conflicts are driven when competing public narratives take place - stories are constructed, not discovered, in the course of making sense of reality, and they guide public behavior and interaction with other conflicting party; here Zionism fights against Pan- Arabism. Finding peace has proven to be difficult task, especially in deeply divided societies where competing narratives and a range of structural features keep societies in constant threat of renewed violence. 51 Narrative - is the principal and inescapable mode by which a person experiences the world and public narratives are very similar to but not quite the same as shared or collective narratives - public narratives are also adapted domestically within the same culture in response to evolving reconfigurations of the political and social space (Naude, 2005). The awareness that every acceptance of a narrative involves a rejection of others makes the issue politically and personally vital: in a critical sense the differences among competing narratives give all of them their meanings (Beker, 2006). History is replete with conflicts in which people fight to death over what appears to be territory of questionable value. This is because territory is simultaneously a divisible, quantifiable 49 Kaufman A. The Israel-Hezbollah Conflict and the Shebaa Farms, 13 November Helsinki Rules Article No. 10 cites in the event of a conflict between uses of an international watercourse, it shall be resolved with reference to the principles and factors set out in articles 5 and 7, with special regard being given to the requirements of vital human needs. International law is simply too primitive to solve the continuing management problems in a timely fashion. 51 Neuroscience and Social Conflict: Identifying Approaches for the 21st century. MIT, Cambridge, February 9-11, The Project on Justice in Times of Transition. International Conference. 56

57 object and indivisible and romantic subject. Borders and boundaries can be redrawn, place-names changed, and people move from here to there. Yet in many places of the world, borders and boundaries seem fixed in time and in the imagination. The name of the land has remained the same for generations, and the people inhabiting that land would rather die than lose the hope or right to return. In this context territory takes on a meaning that far exceeds its material and objective description. It becomes not an object to be exchanged but an indivisible component of a group s identity. Territories are objects that are physically divisible; at the same time they become intractably and eternally indivisible. Ancient-hatreds arguments explain violent conflict as stemming from long-standing historical enmities among ethnic groups. These ties are passed down from generation to generation. One of the following examples is a small strip of disputed land at the intersection of the Lebanese-Syrian border and the Israeli-occupied Golan Heights. The territory is about 11 kilometers long and 2.5 kilometers wide. Hezbollah cites the occupation of this land called Shebaa Farms as one of the reason for its continued attacks on Israel: from 2000 till 2005 Hezbollah attacked the IDF at Shebaa/Har Dov 33 times, resulting in seven Israeli soldiers killed in action, three taken prisoner, and dozens wounded. 52 Graph 11. Sheeba Farms Source: Several reasons have been assigned as the root causes of the conflict between Israel and Lebanon. While some have argued that this conflict is part of a wider disagreement in the Middle East in response to Israeli occupation of West Bank and Gaza Strip, others have also argued that 52 A. Kaufman. Understanding the Shebaa Farms dispute. Palestine-Israel Journal, 22 July