the north africa journal



226th Issue: June 2011 ---- Download full PDF version here

Transition in Tunisia and the Economy
Massive Challenges Cripple the Tunisian Economy, Expect Recession

Despite the promises of democracy, the Jasmine Revolution has had the expected debilitating impact on the conduct of business and the Tunisian economy at a large. The multi-billion dollar support packages promised by the likes of the G8, the World Bank, the EU and individual nations are not for trivial purposes. They are about keeping a country from moving into chaos and economic bankruptcy as entire industries and almost all companies are struggling to survive. As the first quarter of 2011 ends, an abundance of data points to a very difficult economic environment and the country is clearly moving into recession. As objective analysts would predict, all the indicators of business activity worsened as the impact of the political turmoil affected the labor market, production, the supply chains, the inventories, orders and bookings and all other possible indicators that measure industrial activity...

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Transition in Tunisia and the Economy
Painful Recovery for the Business Sector

As if the Jasmine Revolution was not enough in itself, the Tunisian economy is also suffering from a massive drop in trade with its troubled eastern neighbor of Libya. Government data suggests that during the recent disturbances, Tunisia lost in all between 5 to 8 billion dinars as a consequence of the inevitable crisis. While tourism revenues were the most affected, major Investment projects were suspended and thousands of jobs vanished. Although the government estimates the loss at about 4% of GDP, we think it is a much bigger figure, which is currently driving the economic on the path to recession...

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Al-Qaeda and the Maghreb Revolts:
Inside Al Qaeda’s New Offensive in North Africa

As we warned in an earlier assessment, Al Qaeda’s North Africa franchise, AQIM (Al Qaeda in the Islamic Maghreb) appears to be on the move with what may be a fresh offensive in the region. Having been sidelined by the popular revolts that have swept the Greater Mid-East North Africa zone, the death of Osama Bin Laden, the fragile state of Tunisia’s transition, the state of nervousness in Algeria and Morocco amid calls for democracy, and the chaos in Libya are providing an opening for AQIM to both position itself in light of a new geopolitical environment and to strike again to regain global opinion’s mind share. But there is also no conclusive evidence that all the criminal acts committed by alleged Al Qaeda elements are indeed AQIM’s work. There is also no doubt that as governments are toppled or at risk, it is highly possible that shadowy elements are at work to undermine any progress on the democratic front. A good example of that would be the sabotage and other criminal acts perpetrated by pro-Ben Ali agents, many of whom were arrested, others still unaccounted for. Their acts can be often disguised as AQIM’s acts for the purpose of creating confusion. The same must be said about Libya’s Gaddafi clan. While they clearly hired mercenaries to conduct their misdeeds, they is a strong likelihood that Gaddafi agents may be stirring trouble in the name of Al Qaeda. Other nations may be involved in similar practices...

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Morocco Politics:
Competing for Morocco’s Political Future: Different Generations, Ideologies and Visions

In announcing a major reform of the Constitution, Mohammed VI has caught the political establishment by surprise, provoking a debate that is now going far beyond the legacies and prerogatives of the advisory committee handling the matter. Despite pushing the envelope, the street remains suspicious. Abdellatif Menouni’s mission of reforming the nation’s political system is a tall order. Appointed by the king as head of the Advisory Commission to Revise the Constitution (CCRC), he must submit his recommendations and roadmap in June 2011, before a constitutional referendum takes place in the fourth quarter of 2011.

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Transparency in Business and Politics:
Analyzing the Case of Algeria versus Orascom: What’s this all about?

A Conflict that Underscores Lack of Transparency and Weak Business Rules: The case of Orascom Telecom Algerie (OTA), which has raised a great deal of concerns in foreign investor circles, has not been settled yet. It underscores that the rules of engagement when doing business in Algeria are still unclear and that many leaders of foreign companies remain dangerously ignorant of operating conditions and the business environement in the North Africa country. Not understanding the culture surrounding business affairs there could lead to unexpected outcome. The country is one of the most underperforming economies in the world due to stifling bureaucracy, inefficient administrations, arbitrary actions, and a legal system in need of a major overhaul, among other things. And nationalistic sentiments often surpass logical economic factors given the political climate. Although in this report, we are not necessarily siding with Orascom given that many key facts are still unknown, there is no doubt that Algeria’s substandard, inefficient and costly business environment are part of the problem and feed into the feud pitting Algeria against Orascom one way or another.

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Corruption in Business:
Corruption is Major Hurdle for Economic Growth in North Africa, Energy Sector Particularly Vulnerable

Corruption in North Africa is a widespread and deeply rooted problem. So much so that pro-democracy activists that are driving the revolts in the Arab world say many of ills that have been crippling economic, social and political progress originate from corruption. While corrupt practices such as paying bribery are widespread in administrations, the business sector is particularly entrenched in corrupt practices as well. And while efforts are underway to reduce the impact of corruption, there is a strong possibly of a status-quo, if the conservative forces prevail. Cases of corruption abound, most evolve with impunity, enabling many people to thrive. A few cases end up in the front pages of newspapers, partly as a result of political fights within regimes that use corruption cases to undermine their political competitors. Because of the amounts of money involved, the energy sector is particularly vulnerable to white collar criminal predators.

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Painful Transitions, Hopeful Future
By Arezki Daoud

North Africans are going through unusual times. Most nations there are attempting to plan the reformation of their political systems in an environment full of risks. One of them, Libya, precipitated into a civil war and the embattled Muamar Gaddafi is still entrenched in his bunkers directing the terminal destruction of his nation. Libya’s recovery when the conflict ends will not be smooth either. A new Libya will have to reinvent a new constitution, new institutions, new leaders and tribes willing to respect each others...Continue here.

With Tourists Staying Away from Tunisia, State Airline’s Revenue Falls, Records a Loss

Al Baraka Banking Group Maintains Aggressive Growth Strategy in North Africa despite Uprisings

Corruption is Major Hurdle for Economic Growth in North Africa, Energy Sector Particularly Vulnerable

Algerian Telecom Firm Mobilink Headed for Bankruptcy

Analyzing the Case of Algeria versus Orascom: What’s this all about?

World Bank Money to Support Egypt and Tunisia

Morocco, Cameroon Begin Talks on a New Trade Agreement

Tunisian Economy Facing Recession with Painful Recovery for the Business Sector

Massive Challenges Cripple the Tunisian Business Sector, Expect Recession

Can Tunisia Afford a Bigger Written Press?

With Shortage of Skilled Domestic Construction Firms, Algeria is Prime Target for Foreign Contractors

Paris Subway Operator to Take Over Algiers Metro upon Completion

Voice after Exit: Revolution and Migration in the Arab World

Can Bouteflika Deliver Democracy to the Algerian People? Analysis

GCC Transforming itself into a Protection club for Arab Kings

How Saudi Arabia Inhibits Democracy and Progress in the Arab World

Competing for Morocco’s Political Future: Different Generations, Ideologies and Visions

Tunisia: the Road to Democracy Goes through a Minefield, not Jasmine

Marrakech Terror Attack Risks to Derail Political Progress in Morocco and Could Slow Rapprochement with Algeria

Bin Laden’s Death Likely to Heighten Tension in North Africa and Europe

Inside Al Qaeda’s New Offensive in North Africa