Editorial by Arezki Daoud: As the militaries and security services manage to control, to a certain extent, the terror threat, the region is facing unprecedented social tension and economic despair. Data for all countries in the North Africa zone, extending to the Sahel, look awful. All nations in the region as facing growing budget and trade deficits, growing debts, and currencies that have consistently weakened over the past years. All of them are having hard time attracting foreign investors and stress is on the rise everywhere:
Economically, Morocco is facing challenges that threaten its 2017 economic growth, with potential impact on broader society. For instance, GDP growth was its slowest in a decade in 2016 at 1.1%. The government insists it will do better in 2017. But FDI went down 28% and foreign debt reached $32 billion in mid-2016. Many other statistics show the potential for a difficult year to come. A divided government may not mean anything since key decisions come from the King, but the difficulties of Prime Minister Benkirane to form a government is symptomatic of an executive branch poorly prepared to make coherent policy decisions.
Algeria’s economy is perhaps in a tougher position considering its oil fortunes have dwindled rapidly these past years owing to the drastic fall in oil prices. A recent recovery in oil prices remains to be seen if it is sustainable. But the country’s biggest problem is its politics. It President’s illness, resulting in his virtual disappearance from the public eye has allowed his entourage to call the shots, constitutes the country’s biggest wildcard related to its stability.
Tunisia’s economy too is in distress. Its budget and trade deficits have been increasing, FDI was down 7% in 2016, tourism revenues have been down by over 8%, and the country’s political leaders have been making visits to Saudi Arabia, seeking some help. Yet the country’s biggest problem is the predicted return of a large number of militants from war zones in Syria and Libya. They are some 6,500 Tunisians out there fighting abroad, and their return could spell trouble.
Libya’s economy is non-existent and this year, it will be war as usual. Strong man Haftar is working to become the next Muamar Gaddafi, and has gotten support from Moscow, Riyadh, Cairo and many others whose priorities may not meet those of the Libyan people. And then there is Trump and Theresa May, and even may be French extreme right wing Marine Le Pen. Yet another cycle of uncertainty for the region.