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Economic Growth Not a Religious Discourse

Original Title: Moroccans Would Like to See Economic Growth Not a Religious Discourse

Written by Said Temsamani*

“Islamism is a term that has been used to describe two very different trends,” wrote Maha Azzam, an associate fellow at Chatham House, in a recent paper on the implications of the Arab spring for British foreign policy earlier this year.

“First, [it describes] the non-violent quest for an Islamic-friendly society based on the ‘principles of Islam’, which can involve a more liberal application of Islamic teachings and tradition or a more strict interpretation. Second, Islamism is also associated with violent extremism, most notably that of al-Qaida in the promotion of terrorism.”

For about two centuries now, Moroccans, like the vast majority of Arabs and Muslims, have been searching for a magical formula that would allow them to stay true to their traditions and faith and, at the same time, catch up to the scientific, commercial, and political prowess of Europe and the West.   Delegations were sent to France to check out the wonders of modern French civilization; individuals travelled and lived in European and American capitals; Western products fill the shelves of every Arab and Muslim supermarket, from Dubai to Casablanca; we get dressed in Western-style military uniforms and carry Western weapons; we proudly fly Western-style flags and recite national anthems at sports events; we use the Internet, cell phones, and every Western-made gadget to show that we are as capable as anyone else to live in the modern world; we travel the world in Western-made planes, fuelled by Western-extracted and processed technologies; we seek—no, demand—Western-style democracy and a long list of social and human rights, while condemning the West for its arrogance and gross materialistic culture.

Abdellah Laroui, the great Moroccan historian, noted a long time ago that we are alienated (note that the word in Arabic, taghrib, is, etymologically, tied to the West, as if to be alienated is to be Westernized) between modernity and tradition. It is a fairly safe bet to expect that most of my fellow Moroccans reading this article are major consumers of Western products, but they most probably find refuge in an imagined past of upright ancestors, hazily pictured as ideal and wholesome, thanks to the sermons (khutab) that inundate our streets and souks, and stream through radio waves and the Internet. No Western-made medium exemplifies this schizophrenic state better than Al Jazeera television.  A slick Western-style production, financed by a state that is deeply embedded in the global financial system, is keeping hundreds of millions of Arabs and Muslims stultified in front of their TV sets—raging at the West, but incapable of finding their way out to the freedom they have long sought.

As much as anything else, what we need in Morocco right now is to be what we choose.  All Moroccans should have the right to live as they please and question and write about any subject that interests them. Moroccan artists and scientists should have absolute license to create and invent; men and women should pursue their dreams and desires however they imagine them; and businesspeople should have ironclad guarantees that their investments are protected by strong laws.  If our model of freedom is France, Britain, or Canada, then we have no option but to enshrine these freedoms, which include the right to any opinion, however offensive it may be to tradition, without being harassed by self-appointed guardians of ancestral ways.

The new mudawwana (family law) and women’s right to share their Moroccan nationality with their children are gifts of secular policies, not religious ones.  But now, we are back to the Middle Ages, when religion ruled supreme in both Europe and the world of Islam. For one of the fundamental tenets of modern political systems is the separation of religion from politics. Technically, as the founders of democracy in ancient Greece knew, gods may be worshipped privately at home or in temples, but they have no place in a political, citizen-based system. Democracy, properly understood, and theology, do not mix well.

We may move, however slowly and frustratingly, toward more political accountability, but we will not make much progress if we don’t open our own selves to inquiry.  Each of us, I am afraid, hosts a little tyrant inside.  We have a hard time accepting differences in our midst. We want our friends and neighbors to share our beliefs; if they don’t, we hammer them with advice and what we call maw`idha. Few Muslim Moroccans have Christian, Jewish, Buddhist, or atheist Moroccan friends. We wake up and go to sleep in a vast ocean of sameness. We like the West for the liberties it offers, but we don’t do much to have them at home. This is why political revolutions are far easier to implement than cultural ones. Yet, without a solid cultural foundation that emancipates people from the fear of ghosts and spirits, we will remain mugharrabun, alienated between a future we desire and a past that pulls hard at our coattails and jellabas.

We may need another protest movement after the one known as “February 20th” does its work and recedes into the margins of Morocco’s new future. The democracies that are emerging now of the debris of war and turmoil—Iraq, Tunisia, Egypt, Libya—and regimes that seem to be on the verge of collapse— Syria—are lessons for Moroccans to ponder. The non-Muslim people who have lived in Iraq since ancient times—including Jews and Christians—have either left the country for good or are in the process of doing so. Christian Arabs are threatened in most Muslim-majority nations.  If we stay on this path, Arab states will more likely resemble the Iran of the ayatollahs than Spain or Switzerland. Is that what we want for our country?

A society, or nation, reaches its maximum potential when it allows its members to create and prosper without fear from cops or imams. If our political, social, and economic systems were to be well regulated—as the new constitution calls for—Moroccans could potentially unleash their intellectual and economic powers to create and share, invent and sell.  The state could then collect more taxes to finance education, medical care, and major national projects.  Poverty will diminish, prosperity could become more widespread, faith will be genuine, and more people will experience life at its fullest.

This is what freedom is all about.  To me, it is less about what political parties do or don’t do, and more about maximizing the enrichment of human experience on earth. It is about equal opportunity and fulfilling work, whether one is white or black, Muslim or Christian, young or old, man or woman. We could still seek salvation through religion, but that won’t stop our society from developing and join more scientifically advanced nations. Let’s hope we get a taste of this new social order soon.  Moroccans all lucky to have a legitimate religious institution (Commander of the Faithful) that guarantees freedom of worship to all faiths (Muslims, Jews and Christians) with no restriction.   Moroccans would like to see powerful political parties with clear platforms that answer their immediate needs and expectations for a real economic growth and not a religious discourse that unfortunately sometimes becomes extremist.

—–

Said Temsamani

Said Temsamani

 Said Temsamani is a Moroccan Political analyst and consultant who follows events in his country and across North Africa. He is a former Senior Political Advisor at the US Embassy in Rabat.

Potential Pitfalls in the EU’s “More for More” Approach to Democratization in North Africa

5+5 Nations
President Chirac’s address at the closing of the 5+5 Dialogue Summit in 2003, with disgraced Ben Ali and now defunct Gaddafi there. Will Europe change its views of North Africa?

Since June of last year, the European Union has been touting its new reform plan for its European Neighborhood Policy (ENP), which calls for a complete revamping of the Union’s political and economic relations with the ‘Southern Mediterranean’ countries, most notably North Africa.  Among the central tenets of the new ENP is the “more for more” approach, which stipulates greater rewards in economic assistance and EU market access for partner countries in exchange for substantive and far-reaching political reforms.  While at first this seems to be a welcome change in rhetoric, and hopefully policy, from the EU, questions remain as to whether this really represents a true policy shift that will help strengthen reform and democratization in North Africa, or if such an approach will simply perpetuate a cycle of mismanaged EU-North Africa relations.

One of the glaring failures of the pre-Arab Spring ENP is that despite democratization rhetoric, the policy was largely aimed at promoting stability and the status quo.  The Neighborhood Policy itself was borne out of the European Security Strategy, and was initially intended to build a ‘ring of friends’ around Europe.  Over the years, rather than promoting democratic governance, the ENP simply reinforced “firm” governance.  Part of the failure of the ENP to illicit democratization in countries like Morocco or Tunisia stemmed from miscalculations over incentives.  What the EU was willing to offer the countries of the Maghreb in terms of economic cooperation was not sufficient to move these regimes to make any real changes to their government structure or practices.  However, an equally important part of the ENP’s failure also stems from the EU’s rush to offer the Moroccan and Tunisian governments “Advanced Status” negotiating terms despite little to no progress on the reform front, thus removing remaining incentives for change.  On the whole, for the pre-Arab Spring era, it would appear that the EU greatly overestimated its influence and miscalculated its way into insignificance.

While Tunisia is in the process of a real, if not completely smooth, transition, Morocco’s progress on reforms remains in flux.  The EU recently concluded an agricultural trade deal with Morocco, allowing it access to the EU market.  This is the trade agreement that Morocco has been desperately pursuing for years to little avail.  The deal came on the heels of a Constitutional referendum, changes to the enumerated powers of the Prime Minister, and a parliamentary election where the Islamist PJD won a majority, a first in a country where Islamists have been routinely imprisoned for political activity.  On the surface it would seem like the ‘more for more’ approach is working; substantive political reforms for greater economic benefits from the EU.  Yet, Morocco’s reforms over the last year aren’t nearly as substantive as they appear to be. 

The King still has de-facto full executive power, leaving the Prime Minister extremely weak, with a newly begun judicial reform process still dependent on the King’s executive privilege.  The constitutional reforms have come under scrutiny for the differences between the French and Arabic versions of the texts regarding the King’s title of “Commander of the Faithful,” meaning that it remains a crime to publicly criticize the monarchy or the state, and any of its institutions.  Mouad Belghouat, a 19 year old Moroccan rapper, better known as El Haqed (“the enraged”), knows this well.  He now sits in jail for a protest song “Dogs of the State,” where he blasted the country’s National Security Agency for its corruption and political oppression in subservience to the monarchy.  His defense team at his trial was not allowed to make a closing statement.  Additionally, the makhzen, or royal court, continues to maintain its grip over Morocco’s ‘private sector’ further enriching itself and the monarchy at the economic expense of ordinary Moroccans.  This hardly resembles the rosy facade of Morocco as, “a model for the region,” painted by European officials.

Additional concerns are now emerging over Algeria, with its recent election where the ruling party consolidated its hold on power and increased its share of seats in parliament.  Unlike Morocco, Algeria has an Association Agreement with the EU but not an Action Plan (AP).  Algeria expressed interest in beginning AP negotiations with EU in December 2011 and subsequently invited EU election observers to monitor the May legislative elections.  Beyond this, Algerian progress on reforms has been perfunctory.  Protests in the capital, Algiers, remain banned.  Although the government lifted the emergency law on the rest of the country, Amnesty International notes that protests still require authorization from the government which is routinely denied, amounting to a de facto ban on demonstrations.  Most recently, Algerian artists and intellectual launched a petition calling for true freedom of expression in the country.  The signatories heavily criticized the Ministry of Culture’s stranglehold over artistic expression citing its tendency to threaten and intimidate anyone who does not follow its strict directives and rules regarding cultural expression.

The goal of the Algerian government, based simply on the public rhetoric of its officials, has been to stave off the possibility of large-scale protest movements that would fundamentally challenge the government’s ruling authority.  The government has been fairly successful in preventing a Tunisia/Egypt/ Libya style revolt and even a Moroccan style youth protest movement.  Since it is relatively clear what the government’s intentions are and have been since the beginning of the Arab Spring, the recent election looks more like electoral theater aimed at placating European and Western criticism than substantive reform.  EU electoral monitors and high officials have already declared the election a success and are ready to offer Algeria the Action Plan it desires.  

The prospect of EU officials being naively unaware that these non-democratic governments are attempting to finesse favorable outcomes within the ENP at low political cost to themselves seems rather unlikely.  Behind the laudatory press releases and friendly diplomatic statements, EU diplomatic staff and Brussels bureaucrats must surely be aware of the blatant shortcomings of these countries’ respective reform processes.  Rather, the rush to provide rewards to these regimes for largely cosmetic reforms results from the belief that the EU can lure these governments into more genuine reforms if it can convince them it is offering the new ‘more for more’ approach in good faith.  While the EU has rightly calculated that it does indeed need to offer more, it has yet to recalibrate its tendency to offer too much too soon.  That Morocco has now achieved its long stated goal of an agricultural deal means that the EU has relatively little left to offer that is so highly desired by the government as to elicit further democratic reforms at a level and pace suitable to European sensibilities.  This leaves little optimism that as negotiations with Algeria begin, a new EU-Algeria Action Plan won’t look and feel dismally similar to previous sets of ENP Action Plans that failed to induce democratization and political reform.

France’s New President: Foreign Policy and Where North Africa Stands

President-elect François Hollande of France has his work cut out on the foreign policy front. His predecessor is leaving office with a sense of missed achievements and a series of policies blunders that need urgent fixing. In a five-year period, Sarkozy failed to leverage appropriately and responsibly his country’s global leadership position as a major economic and military power. That started with his failure to impose a more assertive France on the burning issues of the Euro-zone and the serious topic of the future of Europe. Instead, Sarkozy went along with Chancellor Angela Merkel and toed the line to the Germans who insisted on a miserable austerity approach to exorcize the mentality of excessive spending in the EU, not giving economic growth a chance. Hollande is likely to compensate for Sarkozy’s excesses but it remains to be seen how he will be able to convince the Germans to loosen up a bit.

Outside Europe, as Hollande takes office, there is no shortage of crises to dissolve and fires to put out. Problems for the new Hollande administration abound and they are everywhere. They are about reducing France’s involvement in Afghanistan and reclaiming its image in Africa. They are about dealing with the crisis in Syria and the never-ending Israeli-Arab conflict. Relevant to France’s stance in the Maghreb and Sub-Sahara Africa, Hollande will have to work on neutralizing the effects of Sarkozy’s disdain of minorities and immigrants, issues that have reduced France’s image in the southern Mediterranean region. They are about fixing the aggressive negative policies of a divisive President who heightened the divisions among the French people at a time when they needed shared objectives and common purposes. Sarkozy, just like his Italian friend Silvio Berlusconi, will not be missed. Both share common traits, including a complete abandonment of the Mediterranean zone of common interests.

On the foreign policy front, Afghanistan may very well be one of Hollande’s first points of concern, a problem he will have to deal with immediately upon the beginning of his 5-year term. Although the French involvement at first took on the narrative of liberating a people, it has progressively shifted into an unsustainable anti-insurrection campaign, amid a war that most French consider lost anyway. Both Sarkozy and Hollande generally agreed that French troops must be withdrawn; the only difference between them on this issue has been on timing.

François Hollande’s approach to Afghanistan is reminiscent of US President Barak Obama’s own campaign promises of a speedy troop withdrawal from Iraq. Hollande’s campaign position on this issue has been to bring the French troops back before the end of 2012. This may be an aggressive schedule, but one that he plans to inform France’s partners during the upcoming NATO summit schedules to take place in Chicago, on May 21, 2012.

France’s relations with the world’s superpowers will likely evolve on the American front, with Hollande expected to be less accommodating that Sarkozy. And while Holland will certainly use a less aggressive tone than his predecessor vis-a-vis China and Russia, he will likely continue to uphold current French policies vis-à-vis these two nations, in particular on human rights and economic issues.

On the Persian front, while Hollande will keep France in the camps of those who worry about a nuclear Iran, he is expected to lessen the excessive anti-Iranian rhetoric that his predecessor has displayed over the past years. Sarkozy’s pronouncements on Iran made him even more radical than those lobbyists and media commentators who speak of a gloom-and-doom scenario of a nuclear Iran. Hollande is expected to move much closer to the position of most of his European counterparts, acknowledging the Iranian nuclear problem, yet without having to fall victim of the excessive anti-Iranian fear mongering.

On the crisis in Syria, Hollande and Sarkozy generally saw eye to eye on the need to solve the problem within a multilateral context, ruling out the use of force. Getting Russia to pressure the Assad regime is what the two men see as a desirable course of action.

On the Mediterranean front, a unified Mediterranean zone as proposed in his early years by Sarkozy is unlikely to be a priority for Hollande as long as the Israeli-Arab conflict persists. In contrast, Sarkozy’s anti-Islamic and anti-immigration proclamations and policies have degraded France’s stance in the Maghreb and in the countries that France used to exhort enormous influence. Yet, François Hollande is likely to leverage his predecessor’s disastrous record to attempt to recover lost ground, even as Islamists in North Africa gain more political power.

Interestingly, Nicolas Sarkozy’s own shining moment, his contribution to the “liberation” of Libya was a muted topic during the Presidential debate and his own campaigning. This is because Sarkozy’s gung-ho interventionist stance has been perceived by many Europeans as a bullying tactic from a man who was planning his own election campaign. Instead, the Libyan crisis has divided Europe, forcing a state of freeze in the subsequent handling of the Syria crisis today. In Libya itself, a sense of an unfinished business is felt by many observers, a situation essentially caused by the hasty jump to the gun of Sarkozy and his allies, including the British. What should have been a “popular revolution,” in the eyes of many Libyans, it turned into a hasty Western intervention instead and Sarkozy being in the middle of it.

Sarkozy and his foreign policy team have done a poor job understanding African issues in general and failed to anticipate what’s to come. The crisis in Mali, bringing that country of massive French influence into chaos is one example of such mismanagement of French foreign policy in Africa. So much so that French interests are the prime target of Al Qaeda in North and West Africa and the Sahel. Meanwhile, African governments remain suspicious of the French agenda as Sarkozy showed eagerness to intervene quickly as was the case in Libya and Cote d’Ivoire. In their mind, they could be next.

What about North Africa? In Rabat, the Moroccan government showed no significant worries as François Hollande was declared the winner of the Presidential race. However, we picked up some signs of concerns as usually Morocco finds a more open-door policy among France’s right wing leaders and lot less accommodating Socialists. The Moroccans of a certain age remember vividly the cozy and personal relations that existed between the late Hassan II and former rightist President Valéry Giscard d’Estaing. Then in 1981, Giscard d’Estaing was swept away from office by Socialist rival François Mitterrand. The Mitterrand tenure was characterized by lack of trust between him and Hassan II, a period which saw France increased its criticism of the Moroccan monarchy over allegations of human rights abuses. With Jacques Chirac replacing Mitterrand, the honeymoon period between Rabat and Paris returned, and went on during the Sarkozy tenure.

Within the French Socialist world, Morocco initially hoped for a Dominique Strauss-Kahn (DSK) victory. DSK was also a good friend of Morocco, even owning a luxury 19th century villa in Marrakech purchased more than a decade ago for a half million Euros. But Morocco’s lobbying efforts had to quickly refocus on other politicians as DSK faced a legal battle of his own.

With the Socialists back into the Élysée Palace, the Moroccans are minimizing any negative impact such political change could bring, supported by positive comments by Martine Aubry, a friend of Morocco and the current Secretary General of the French Socialist Party. A charm offensive was launched early this year by the Moroccans to seduce François Hollande to insure that France does not open up to the pro-Western Sahara independence movement. Seeking to appease the Moroccans, Martine Aubry held a press conference in Rabat during which she welcomed Morocco’s position on a so-called “reinforced autonomy” for the Sahara. But there is no certainty that France’s position on the Western Sahara front will remain rock solid. The Moroccans remember 2007 when the then Presidential Socialist candidate Ségolène Royal made pronouncements that were constantly in opposition to the Moroccan monarchy.

François Hollande will not only have to deal with various leftist currents that supported him and have more affinity to the aspirations of the independence movement, but he is also looking to fix the battered relations between France and Algeria, a country that is critical to France on both the security front and as an energy supplier amid a reduction of the nuclear power source in France. The French diplomacy will have to walk a fine line to keep both of these feuding nations from thinking that France is against them. But Rabat is bracing for a shift in French policy toward them anyway. Indeed, not only Hollande has extremely limited interaction with Morocco, he has been much closer to Algeria, having worked there for 8 months. Also a point of concern for the Moroccans is the people who surround François Hollande, in particular his high-powered political adviser Faouzi Lamdaoui, a native of the eastern Algerian city of Constantine. Read this associated analysis on the “Rise of North Africans in French Politics.”  Another person to watch in the Hollande circles is Kader Arif, a Member of the European Parliament for the south-west of France. He is a member of the Holland’s Socialist Party and sits on the European Parliament’s Committee on International Trade. A third source of influence is the young Razzy Hammadi who presided over the Movement of Socialist Youth, before becoming a national secretary of the Socialist Party in November 2008. Former Prime Minister Laurent Fabius is also an “Algerianist” who is likely to direct the new administration in favor of Algeria. The Moroccans are not left without their strong cards too. In addition to leveraging their friendship with Martine Aubry, the Moroccans will count on a bi-national, French Socialist militant Najat Vallaud-Belkacem to play a counter weight to the Algerianists.

With Algeria, as issues abound, the Franco-Algerian relations are expected to undergo some corrective measures from Team Hollande. It is worth noting that the emergence of François Hollande in the Presidential race was not anticipated by the Algerians. As in Rabat, all eyes in Algiers focused on DSK. So much so that during a 2010 trip to Algiers, François Hollande was not even received by President Bouteflika, who was said to have had a light schedule and a free calendar that time. Yet, Algiers tried to play catch up during the most recent campaign, dispatching lobbyists in an effort to meet with the likes of Faouzi Lamdaoui. This last minute effort failed as the Hollande team was required to avoid such contacts for the obvious reasons.

Yet, Algeria wants to be recognized as a key regional player, a position that Sarkozy refused to recognize. But with an Algeria increasingly positioned as a critical player in regional affairs, Hollande will likely reduce the tension that exists between Paris and Algiers under the Sarkozy regime, starting with the possibility of the new French government recognizing, to a limited extent, its colonial past and role during the Algerian war of liberation. Hollande is said to be willing to make a gesture, albeit symbolic toward Algeria, but may not go as far as a full recognition.

In addition, Sarkozy has been lobbying hard to re-negotiate the Franco-Algerian 1968 treaty, creating heightened tension with Algiers. The treaty provided greater rights to Algerians in France compared to other nationals, a situation that Sarkozy insisted on reducing. Under his watch, Hollande is not likely to rush to revisit France’s political and human framework deal with Algeria.

But what France is facing in North Africa in a more dramatic way is the political upheaval that has occurred in Tunisia, Libya, Egypt and the security problems extending into Mali, Niger and the rest of the Sahel. This is while there is a certain constancy in France’s relations with Algeria and Morocco. In the Tunisian case, outgoing President Sarkozy failed to anticipate the outcome of the crisis that has led to the ousting of Ben Ali. The same could be said about Egypt and the inability of Sarkozy to project. On Tunisia, some creative strategy has to be adopted with the stabilization of that nation and a bit of touch-and-go process dominating the approach. Hollande’s pronouncements regarding Tunisia and all other countries that had a revolution of sort focus largely on insuring that democracy is the chosen political path. In an interview, Hollande was clear that France’s views and policies will not change because of changes in regimes in the Élysée.

During a visit to Tunis in May 2011, Hollande suggested that the international community should transform Tunisia’s debt into donation so as to not burden Tunisia with financial liabilities. The Tunisians have been ecstatic that Hollande won, in part because Sarkozy was “booted out like his friend Ben Ali,” as commentators there noted.

But some contentions are likely to take place on ideological grounds. As a Westerner, Hollande has been insistent on democracy as the only ideology to adopt in nations that underwent their own popular revolts. While this sort of pronouncement might have been welcomed a while ago by the Islamists, it is possible that they have a different views now that they have a grab over governance in the region. Equally a point of difference between Hollande and the Islamists is the role of women and gender equality as conservative groups in North Africa are pushing for a dangerous reduction in women’s rights. But Hollande remains more conciliatory when he speaks of the right of Muslims in France to live in peace and without any fear of government.

Specific to Libya, Hollande recognizes that he approved of the French intervention to oust Muamar Gaddafi, but he says he regrets the lack of follow up that would have stabilized that nation. He also regretted the impact the Libyan crisis has had on the deterioration of security in the Sahel region, further heightened by a proliferation of weapons and fighters previously active in Libya and spreading into Mali and Niger. There in the Sahel, Hollande believes that stabilization will require foreign support on economic growth. Within the Sahel, Hollande appears to be concerned by an increase targeting of French interests there, in particular with nuclear giant Areva active in Niger.

As France engineered a smooth transition from Sarkozy to Hollande, we should expect also foreign policies to evolve, and hopefully this time, a Hollande pragmatism will supersede provocative Sarkozy rhetoric.

Salaries in the Maghreb: The Land of Equality?

While no one expects their government leaders to earn the same wage as the average guy, North Africa governments tend to pay generous salaries to ministers and the likes. However, compared to corporate executive jobs, or even mid-level managers in the West, the salaries in question are not that great. They generally do not exceed the $150,000 ceiling, but that does not inlcude the perks and bonuses that most of these officials benefit from. That includes allowances for housing, travel, cars, gasoline, etc. If you include all of that and more, government people in North Africa are rich.

In the region, the most humble officials are those of Tunisia. The Prime Minister there does not get more than $48,000 per year, when his Algerian and Moroccan colleagues get almost triple that amount. Interestingly, in the spirit of good governance, the Interim President of Tunisia, who was entitled to a wage equivalent of $240,000 per year, has downgraded his pay to a symbolic $20,000 per year instead. We salute Mr. Marzouki for doing so as the Tunisian people continue to struggle with their evolving Jasmine Revolution.

What do the others make compared to minimum or median wages? Judge by yourself.

Top Algerian Leaders' Salaries

Top Algerian Leaders' Salaries

 

Moroccan Ministers' Wages

Moroccan Ministers' Wages

 

Wages in Tunisia

Wages in Tunisia

Algeria’s Unsustainable Food Situation

Algerian agriculture Analyst Mohamed Naïli speaks about the price of potatoes in Algeria reaching the unprecedented level of DZD 100 per kilo [read here in French]. But potatoes are not alone in becoming out of reach for millions of Algerian households. Their grocery bills are increasing with the sudden spike in prices for such basic commodities as tomatoes, dry legumes, chickpeas, and virtually everything else in the list. The nation’s food and agriculture policy is out of touch as we discussed in detail in our latest issue.

Since February 2012, Algerian consumers noticed unusual rises in food prices, in a trend that according to Naïli contradicts the political discourse heard from government officials and politicians. These politicians’ assurances to the contrary are happening while the country is preparing its legislative elections. With a government contradicting itself, the likelihood of an Islamist victory based on yet another populist discourse is as strong as ever.

Government ministers in charge of the food sector, from agriculture to trade keep promising price readjustments in the coming days and the news of potato prices dropping slightly in towns like Mostaghanem adds to the idea that they are in control. But the Algerian consumer does not buy the politicians views. There is a widespread belief that the food sector in Algeria is dominated by speculators that are simply untouchable and above the law. If they are not engaged in the import sector, which affects all products, perhaps with the exception of potatoes, they control the supply chains, logistics and distribution that influence availability and pricing.

According to Naili, these speculators are also involved in politics to a certain extent. He quoted the head of the Algerian consumer protection association as saying that those price hikes are the result of a conspiracy to sabotage or influence the May 10 parliamentary elections. He pointed the figure to those who control the distribution sector, in particular, as being behind it. For what reasons and purposes, it is unclear, but there are plenty of reasons to believe that lobby groups are there to influence politics to gain economic favors. If lobbying happens everywhere else in the world, why not in Algeria too?

For observers within Algeria the question is increasingly about whether the various regulatory bodies, watchdogs and law enforcers are too weak and vulnerable to face these highly influential speculators. Their conclusion is that such institutions are worthless and without any power to apply the law and bring to justice wrongdoers. While no single institution has managed to prevent the current price crisis, politicians currently running for Parliament seats keep pledging to the masses that they would do the right things if they were to be elected.

Although a great deal of Algeria’s problems can be blamed on powerful speculators and a leadership crisis in governance, the concept of the curse of oil is real in the case of that particular country. While other nations with similar oil wealth managed to diversify their economies as they learned a lesson from the 1980s oil crises, Algeria’s financial well-being remains deeply rooted in the oil and gas sector. Virtually all of its foreign currency income comes from petroleum-related exports.

Despite efforts to diversify exports, at least in speeches, the country’s policy makers and government leaders are unable to create the proper environment to open trade, while lobby groups continue to pressure in favor of more import so they continue to expand their control of domestic markets. Consider that for a country that has Africa’s largest territory and enormous farming potential, the agricultural sector exported only $30 million worth of food in the entire 2011. Morocco typically exports at least 33 times that value, in fact exceeding the $1 billion mark.

The agricultural sector accounts to a meager 5% of non-petroleum exports, which by themselves account for a low single-digit share of all export value. Most of what Algeria exports in terms of food do not include what it really can potentially export like vegetable, fruits or grains, but mostly pastas, sugar, cooking oil and dates.  In fact, date exports accounted for half of the $30 million earned in 2011.

While agricultural experts are quick to blame the nation’s bad policies such as the unavailability of such products as fertilizers, machinery, bad financing offerings, etc, they tend to avoid discussing the thorny issue of speculators, many of whom are major influencers of politics.  Additionally, in the agro-industry sector, problems abound in the way businesses are managed. Most of the 22,000 firms involved in food processing, for instance are small businesses with no management skills and resources to improve their productivity and up their profitability, let alone crack foreign markets. Yet, some 150,000 people work in the food processing sector.

As Algeria faces a new parliament, most likely dominated by Islamists, it may be time for its new legisltive leaders to revisit the nation’s food policy. It is unsustainable that Algeria continues to rely on imports to feed itself when it has good arable land, an abundance of labor, and a very good domestic market. Unless the new leaders are in cahoots with speculators!

Sahel: As Security in Sahel Worsens, Niger’s Uranium Production Set to Increase

Over the past decades, Niger has attracted foreign investment to increase and diversify their mineral resources sectors – particularly uranium, gold, and iron ore.  Sustained high prices for oil have also attracted companies from Africa, China, Malaysia and Canada to explore potential production centres. Niger has also received international attention from France for its uranium deposits, which fuel France’s nuclear power stations run by Areva SA (OTCOTHER: ARVCF). Niger is the world’s fifth largest uranium producer. More recently, gold deposits are being exploited in southern Niger. There are also minor deposits of oil and coal, which have not been fully developed yet, but which could be important engines for growth and stability. The government wants to attract foreign investment, diversify the economy and implement policies that support sustainable development.

Niger has considerable gold and uranium reserves and some of the world’s largest mining companies from Australia and Canada are expanding prospecting for new production centers. Mining is one of the most important sectors of Niger’s economy, particularly in terms of attracting foreign investment.  Major resources in that country include gold, coal, and uranium, the latter of which is the main resource. SOMAIR, a branch of the French state-owned nuclear power utility Areva, controls most of the uranium mines in Arlit, Tassa and Aouta.

In 2009, Areva received a permit to develop one of the largest single uranium deposits in the world at Imouraren with the potential to produce 5,000 tons of uranium a year.  Areva plans to invest some USD$ 1.5 billion in the project.  The mine was intended to become operational in 2012 but has been delayed. Nevertheless, there is continued demand for uranium, as worldwide power generation prices continue to rise and tensions in the oil producing Persian Gulf show no sign of quelling. The Nigerien government’s drive for economic growth is pushing the Imouraren ahead. Uranium production is slated to begin in 2014 after the government managed to secure a higher extraction price, which reached 73,000 CFA Francs per kilogram (about USD$ 150), up from 70,000 CFA Francs.

The Imouraren project is expected, by itself, to raise Niger’s uranium production by as much as 5,000 metric tons per year or 20%, which would make it the world’s second largest producer. The government of Niger is also very pleased that its uranium will be sold in Euros, which will help boost its economy. Areva is not the only producer of uranium in Niger, demonstrating that global demand for uranium may only be increasing. China’s SinoU, is running a joint venture to extract uranium with the Government of Niger in a project that is targeting an annual production of some 700 tons. Indeed, it is very likely that Niger will see growing interest from companies from all over the world as Areva is losing its almost monopolistic control of the country’s uranium resources. Until a few decades ago, France, the former colonial power of Niger, which produces almost three quarters of its energy from its nuclear power, maintained virtually complete control over Niger’s uranium resources. More recently, the Government of Niger opened the uranium sector to mining and exploration companies from countries such as Canada and China. Several foreign companies continue to prospect for uranium, including Canadian Bayswater (OTCOTHER: BYSWF), Cameco Corporation (NYSE: CCJ), Niger Uranium Limited of South Africa (SEAQ: URU) and Oklo Uranium of Australia (OKU:ASX), among others. Chinese companies are also very interested in competing for uranium prospecting rights.

The China Nuclear International Uranium Company has become the main investor in Niger’s uranium mining sector. To facilitate concessions, China has agreed to improve Niger’s electrical power supply system. China will also deliver electrical power units that will enable Niamey to receive some 30% more electricity. Niger is also expected to boost economic growth thanks to development of its oil and gold potential. The China National Petroleum Corporation (CNPC) has signed an agreement valued at USD$$5 billion to extract oil at the Agadem Block. The agreement includes the construction of a 2,000 kilometer pipeline and a refinery capable of processing 20,000 barrels per day. The Agadem Block is considered Niger’s most attractive asset and there remains intense competition to secure rights to develop its proven reserves.

Why is Mali so Important to Mining Companies

Mali is going through a very difficul phase as the nation faces political infigthing in Bamako following the recent military coup that toppled the President. Mali is also facing the Touaregs in the north who have been seeking independence for the Azawad State. The nation is also the target of AQIM.

The coup generates considerable business risk as well, especially as far as the mining sector is concerned. Mali aspires to become one of the world’s leading gold producers. Mining giants such as AngloGold Ashanti Ltd. (ANG) and Randgold Resources Ltd. (RRS) have significant operations in the country. However, to their benefit, gold is largely extracted in the south, which is unaffected by the rebellion in the north. Canadian AVion Gold and Iamgold are also operating in Mali. Other Canadian mining companies are indirectly exposed to the intensified Mali risk. They include Kinross which has commitments in Mauritania, LaMancha, which operates in Ivory Coast and Semafo, which still has some operations in Niger.

The greatest risk is to mineral companies operating in and around the Taoudeni basin, which is in the very region seeking autonomy from Mali and the area most exposed to the MNLA of the Azawad. The Basin is believed to be rich in oil as well as other resources. Petroplus and Simba Energy are among those operating in the area. The rebellion has already forced the displacement of thousands of residents and the new leadership in Bamako appears ready to intensify military activity. Our security report on the Sahel region provides details of the investment landscape. Contact us if interested.

A Fast Evolving Landscape

We felt rather guilty for releasing to you an 80+ page issue. For a moment we thought we should split it into two installments, but here’s the problem: North Africa is a never ending source of critical matters at this very important junction of its history. The news and fast developing stories keep on pouring at such a speed that they inevitably require large amounts of reporting. Problems abound and political leaders, including their military patrons are unable to find suitable solutions. There are no groundbreaking creative ideas going around in the region. Although we would love to share the occasional good news, we admit that there is a serious shortage of such positive matters.

Within North Africa itself, events are unfolding at a rapid velocity. Most here see them as part of a greater “revolution” that promises equity, better resource distribution, and more rights and civil liberties to the peoples of the region. So far, although revolutions have toppled a few dictators and frightened Kings and Generals, they have paved the way for the conservatives under the banner of the Islamist movement to take over the political agenda. And for the moment, that does not bode well. Their actions so far are rather disappointing and often alarming as they take over governance. As we report in this issue and in the most recent ones, human rights and civil liberties are taking a beating by the conservatives in Tunisia, Morocco, Algeria and elsewhere. There is no guarantee that the conservatives will win in the long run, as the moderates and liberals are fighting back, but expect a long process and may be some collateral damage along the way.

Speaking of collateral damage, some companies are facing greater scrutiny about their dealings with the Gaddafi regime. In a previous issue we reported about Canada’s SNC Lavalin. In this one, we look at two other companies that are dealing with the same unwanted media and government scrutiny for their work in Libya. More is likely to emerge over time and companies that have conducted business in Libya are advised to revisit the way their executives dealt with the regime.

As the Islamists and conservatives take over the reign of government, they face very difficult economic conditions. High unemployment, soaring food prices in the international market, weather conditions that are destroying crops, greater political demands from citizens forcing governments to increase their subsidies to consumption are some of the many problems facing non-creative political leaders in the region. With expanding budget deficits and worsening finances, these nations’ governments will meet increasing difficulties in meeting their citizens’ demands and that too spells trouble.

As if the take-over of conservatives is not enough trouble, the region is surrounded by an ocean of regional crises. Europe’s economic crisis is another soar point for North Africa, creating problems on at least two fronts: first is the fact that Europe is a heavy weight as an economic partner to North Africa. And when Europe sneezes, North Africa catches a bad flu. In this case, expect reduced economic activity and trade between the two regions, with the strong likelihood of also reduced European investment in the Maghreb.

The second is on the human front. All these boiling problems are having a spillover effect on human and social policies affecting millions of immigrants living in Europe. The financial crisis hurting Europe affects first the lower wage demographics, among them the North Africans living in the EU, and an anti-Islamic backlash in Europe risks creating more drama and insecurity, expanding the gap between the immigrants and the Europeans. France, which is in the middle of a heated presidential election season is reaching out to Algeria to discuss a reduction by half of Algerian residents in France. Although such reaction may be an expected knee-jerk reaction after the Mohamed Merah saga, it may be unbearable for the millions of African immigrants who selected Europe and France as their new home and shelter.

To the south of North Africa is also the long-lasting multiple crises of the Sahel region. Mali with its coup-d’états and Touareg war in the north, Niger with its famine, Nigeria with its religious divide, Guinea-Bissau with its own political meltdown, let alone the nebulous Al Qaeda and the proliferation of criminal gangs in the region. Sandwiched between a troubled southern Europe and an exploding Sahel, North Africa is itself in the limelight dealing with a multi-front crisis of its own.

Then again, as some say, it is in the middle of a crisis that opportunities knock. Not the best ending for an op-ed but consider the fact that for many companies, it is business as usual despite the crises. Many Tunisian firms, as reported here, announced healthy dividends for fiscal year 2011. That is something good considering the turmoil of 2011. More interesting for the future is the fact that many of these companies are in the process of raising capital. This is because business executives are feeling more optimistic about the future and that bodes well.

The mood in Libya is also improving ever slightly. There is still plenty of drama in that country, but with a big budget and foreign companies willing to come back, the economic machine is slowly recovering, and even in a symbolic gesture, the Tripoli Stock Exchange reopened in March 2011.

In Algeria, oil giant Sonatrach is also looking for a way forward. After many years of a multi-dimensional crisis, financial scandals, and numerous jail sentences, the company, which generates the bulk of Algeria’s foreign currency income, has a new CEO who is focused on bringing hope to the tens of thousands of employees. His role is very critical as Algeria plans to expand the scope of oil and gas in the nation’s economy. Not only to up the rate of household penetration of natural gas, but to help stimulate the rest of the economy with such industries as refining, exploration and production.

In Mauritania, small independent foreign oil companies are not hesitating to invest their resources to explore for oil and gas. And that’s good as well.

As these domestic economies and the business leaders look for bright spots toward the future, foreign investors do not remain neutral in this game. And China and India appear competing against one another in getting Africa’s attention. In this game, as we report in this issue, China is the uncontested player, but do not disregard India. Bollywood is knocking on Africa’s door and may already be in a cinema near you. But China, just like Russia does not always find the doors of new markets wide open. Beijing and Moscow’s siding against the Libyan “revolutionaries” is costing them dearly today. They are simply unable to get the attention of the current Libyan authorities because the bet on the wrong horse.

In contrast, we are now seeing the small Gulf state o f Qatar almost everywhere in North Africa. Flush with billions of dollars, the Qataris are spending money to buy influence, including within France itself to get the hearts and souls of North African immigrants.

As we release this 229th issue of The North Africa Journal, we would like to propose a special focus on the crisis in the Sahel.

- First is our view that the solution to securing the Sahel has to include the Touareg people. In fact, we argue here that they are the only ones who can bring peace and stability in the region.  Read here.

- While we see the Sahel as a  source of trouble, we often forget that there is real economic activity. My colleague Alessandro Bruno reports as to why Mali is important to the mining sector (read here) and predicts that despite a worsening security climate in the Sahel, uranium production in Niger will increase (read here).

- The talented Yasmine Wozniak tackles head on two very difficult topics, which I suspect will get a great deal of feedback. The first is about the bad agricultural policies put in place in Algeria that are hurting people’s budgets [read here], and the second concerns the irrational relations between Algeria and Morocco [follow this link].

- Redouane Benhemdi also tackles explosive topics, starting with his views on the Islamists in power in Morocco and while they are unable to solve Morocco’s economic problems, their focus recently has been on imposing cultural changes for ideological purposes [read here]. Equally difficult for Redouane as his own country, Tunisia, is facing some degress of insecurity, here he focuses on Libya, arguing as I did in favor of federalism. [Read here]

For our Premium subscribers, there is plenty to ready with nearly 90 pages of Premium Content.  Please visit the dedicated site where you can either download the PDF or read online. The address is:

http://www.north-africa.com/premium/issues/229.htm

Finally, in our Opinions site [http://www.north-africa.com/premium/opinions/], you will notice on the top right corner a link that says “Submit your Article.” Well, it is exactly what we want and that is to hear from you.

Thank you.

Arezki Daoud
daoud@north-africa.com