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]
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