Dubai’s
Illusive Dream and Impact on North Africa
Seeing through the
Arabian Mirage
(Photo:
Dubai investments in Tunisian infrastructure)
Ancient
Chinese philosopher Laozi once said “a country is
never as poor as when it seems filled with riches,”
and that may be very true for Dubai. That country has been
the center of attention of all that is capitalism. An island
of wealth, at least on the surface, led by a regime always
praised in the West for its modernist stances, forward looking
views, and an expertise in managing an economy into the 21st
century that is unparalleled in the Arab world. So much so
that the name Dubai has become synonymous of luxury and wealth,
and a case study that many governments elsewhere are trying
to mimic. Libya for example has been looking for ways to turn
its country into the Dubai of the Mediterranean. Other capitals
in the region, including Tunis, are planning to build so-called
“off-shore” financial centers to follow the footsteps
of Dubai. Continue
here.
The
Moroccan Monarchy Launches Plan ‘B’ to Counter Multi-Front
Turbulence
The
King of Morocco, Mohammed VI has ordered a reshuffle of
the executive branch with focus on security, justice and
economic development. The reshuffle is substantial in that
it involves very critical posts but is also a culmination
of many years of unfulfilled social, political and economic
promises. The changes in the cabinet are motivated by various
ongoing issues and problems facing Morocco, with the most
important one being the continued lack of support for Morocco
from African nations on the Western Sahara conflict. The
sacking of the Interior Minister has something to do with
that. The lack of progress in democratization, the chaos
affecting the parliament, and the troubled tourism industry,
which has suffered not from a lack of performance but because
of the global economic crisis also played a key role in
the decision. Continue
here.
A
Nuclear North Africa
Oil
and gas remain critical sources of power and energy for North
Africa nations. In the medium term, hydrocarbons will remain
the predominant sources of energy, whether it is for the OPEC
countries of Algeria and Libya or the less oil-endowed nations
of Tunisia and Morocco. But in the longer term, the nuclear
source appears interesting to all as oil reserves are depleted
and securing new sources of energy becomes a strategic priority.
On the ground, all North African nations have been working
somewhat to develop nuclear capabilities for civilian and
industrial use. Each country has put in place programs that
have been supported or endorsed by a Western super power,
notably France, which has obvious economic interests in helping
develop such industry. Continue
here.
Where
to Invest in the Moroccan Economy
Although
2009 was a difficult year for those looking to place their
money in Moroccan investments, 2010 may not bring immediate
relief either. Companies and businesses active in the North
Africa country have had their own share of troubles and many
see continued difficulties this year. But despite the downturn,
or perhaps because of it, there are opportunities to grab
here and there. Analysts of CFG say that investors looking
to acquire equities through stocks in the Casablanca Stock
Exchange should adopt a stock-picking approach, favoring stocks
with solid fundamentals and a good visibility on earnings
over the next few years. Some cyclical stocks can also prove
to be worthy investments. The recommended strategy for these
stocks is to acquire shares when the economy is on a descending
cycle as these stocks have proven throughout history to anticipate
economic revival. But trouble still looms. The same analysts
estimate that a glance at banks’ 2009 interim financial
statements foreshadows how that sector, for example, will
evolve in the short run. The banking sector is facing a slowdown
in its traditional business activities along a tightening
in interest margins. Banks are encountering deterioration
in risk levels which may lead to a surge in their cost of
risk. This report looks at what investors should expect as
the new year begins. Continue
here.
Algerian
Solar Power for Europe: The Tough Road Ahead
Known
for its fossil and hydrocarbon resources, the Sahara desert
could be a major source of a new kind of clean energy to Europe,
if the promoters of this project get their way. And with the
Europeans looking to boost the share of solar power to 15%
of their electricity needs, all the North Africa nations,
including Egypt are positioning themselves to be one of the
chosen suppliers. The project in question is an ambitious
one, one that may cost up to €400 billion to build. It
has already gathered the participation of a dozen giant European
engineering firms like ABB, E.ON, RWE and Siemens. Over the
next 3 years, Desertec will start with three-one gigawatt
power stations. The Desertec Industrial Initiative or DII
project was launched by twelve European companies in July
2009. This came as a result of the signing of the Mediterranean
Solar-Plan (MSP) by 43 participants of the Union for the Mediterranean
summit headed by France and Egypt. Continue
here.
Total
Strengthens its North Africa Operations
The
French oil giant Total has begun to work on the highly sought
after Mauritanian acreage called Taoudenni. Located north
of Mauritania, this strategic basin has been the subject of
intense lobbying by several oil companies given its important
potential. French, British and American oil firms have been
battling over who would operate in the region, and so far
Total of France seems to have the upper hand with the first
drillings that have started in late September 2009. In Southern
Algeria, Total is developing the Timimoun gas project in Algeria,
in partnership with Algeria’s Sonatrach and Spain’s
Cepsa. Total controls a 37.75% stake in the project, compared
to 51% for Sonatrach and 11.25% for Cepsa. The project was
approved in fall by the Algerian National Oil and Gas Development
Agency (ALNAFT), Algeria’s main authority that oversees
oil and gas contracts. Continue
here.
