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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