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    Expect an Uneven Rebound in MENA and Central Asia

    Projections, no matter how well-grounded in analytics, are a messy business. Three years ago, COVID-19 was unheard of and then-US President Donald Trump’s politics caused uncertainty in international relations, with democracy in retreat across the world. Despite the best-informed prognostications, predictions failed to capture cross-border variables such as immigration and civil conflict that have yet to play out in rearranging local and regional economic prospects.

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    No region is more complex in terms of confusing signals than the Middle East and North Africa (MENA) and Central Asia. This is the subject of the latest report by the International Monetary Fund titled, “Regional Economic Outlook: Arising from the Pandemic: Building Forward Better.”

    What is clear from a review of the data is that 2020 was an outlier in terms of trend lines earlier in the decade, skewed by the COVID-19 pandemic, erosion of oil prices, diminished domestic economic activity, reduced remittances and other factors that have yet to be brought into an orderly predictive model. Even the IMF had to recalibrate its 2020 report upward for several countries based on rising oil exports, while decreasing marks were given countries slow to vaccinate against COVID-19 and that rely on service-oriented sectors.

    Mixed Outlook

    The numbers indicate a mixed picture, ranging from Oman growing at 7.2% and the West Bank at 6.9%, to Lebanon receiving no projection and Sudan at the bottom of the range with a 1.13% real GDP growth rate. Yet, so much can impact those numbers, from Oman’s heavy debt burden to continuing turmoil in intra-Palestinian and Palestinian-Israeli affairs.

    The good news is that real GDP is expected to grow by 4% in 2021, up from the projection last October of 3.2%. Much of the lift has come from two factors: a more optimistic trend line for the oil producers and the rate of vaccinations in countries that will promote business recovery.

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    As CNBC pointed out, Jihad Azour, director of the IMF’s Middle East and Central Asia department, noted that recovery will be “divergent between countries and uneven between different parts of the population.” Key variables include the extent of vaccine rollout, recovery of tourism and government policies to promote recovery and growth.

    In oil-producing countries, real GDP is projected to increase from 2.7% in 2021 to 3.8% in 2022, with a 5.8% rise in the region’s sector driven by Libya’s return to global markets. Conversely, non-oil producers saw their growth rate estimates reduced from 2.7% to 2.3%. In fact, Georgia, Jordan, Morocco and Tunisia, which are highly dependent on tourism, have been downgraded in light of continuing COVID-19 issues such as vaccination rollout and coverage.

    As the IMF report summary notes, “The outlook will vary significantly across countries, depending on the pandemic’s path, vaccine rollouts, underlying fragilities, exposure to tourism and contact-intensive sectors, and policy space and actions.” From Mauritania to Afghanistan, one can select data that supports or undercuts the projected growth rates. For example, in general, Central Asia countries as a group seem to be poised for stronger results than others. Meanwhile, Arab countries in the Gulf Cooperation Council face greater uncertainty, from resolving debt issues to unforeseen consequences of negotiations with Iran.

    So, how will these projects fare given a pending civil war in Afghanistan and the possible deterioration of oil prices and debt financing by countries such as Bahrain and Oman? Highlighting this latter concern, the report goes on to say that public “gross financing needs in most emerging markets in the region are expected to remain elevated in 2021-22, with downside risks in the event of tighter global financial conditions and/or if fiscal consolidation is delayed due to weaker-than-expected recovery.”

    An Opportunity

    Calling for greater regional and international cooperation to complement “strong domestic policies” focused on the need “to build forward better and accelerate the creation of more inclusive, resilient, sustainable, and green economies,” the IMF is calling on the countries to see a post-pandemic phase as an opportunity. This would involve implementing policies that promote recovery, sustain public health practices that focus on sustainable solutions, and balance “the need for debt sustainability and financial resilience.”

    There is great uncertainty assigning these projections without more conclusive data on the impact of the pandemic, the stress on public finance and credit available to the private sector, and overall economic recovery across borders that relies on factors such as the weather, oil demand, external political shocks and international monetary flows. The IMF report is a very helpful bellwether for setting parameters for ongoing analyses and discussions.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Not All Quiet on the Western Sahara Front

    On October 21, groups of Polisario Front’s supporters blocked the highway at Guergarat, in the extreme southwest of the Western Sahara. This is in the buffer zone between territory controlled by Morocco and the land claimed by the Polisario — the Popular Front for the Liberation of Saguia el-Hamra and Río de Oro, the rebel movement fighting for the independence of the former Spanish territory of Western Sahara, now under Rabat’s control — effectively blocking transportation between Morocco, Mauritania and countries further south. Moroccan troops responded quickly and cleared the road so that more than 100 trucks could resume carrying goods. The Polisario claimed no knowledge of the action and labeled Morocco’s response as an “act of war.”

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    What happens next could determine the fate of the 29-year-old ceasefire that marked the cessation of hostilities and the beginning of UN efforts to resolve the status of the territory that Morocco claims is part of its kingdom. While Rabat has offered broad autonomy to the region under its sovereignty, the Polisario Front and its backer, Algeria, are demanding a referendum that the UN Security Council dropped from its agenda in 2007 after multiple failed attempts at compiling a mutually agreed voter list stymied any credibility for that option.

    So far, 16 African countries, the UAE and Jordan have opened consulates in the region, providing Morocco with crucial international support for its territorial claims. As per Al Jazeera, “The strategy has been effective: Out of 84 countries that previously recognized the Polisario, 44 recently rescinded their support and recognition.”

    Tension Builds

    Morocco described the blocking of the road by Polisario supporters, allegedly backed by armed fighters, as a breach of the ceasefire. The Polisario said the Moroccan army’s entry into the buffer zone had fatally undermined the ceasefire. And so the tension builds. Behind it are lingering questions of why (and why now), of what the end game is, and of why Algeria and the Polisario are of one mind on this latest conflict?

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    The UN is now on alert despite the lack of a special envoy to monitor the crisis after the previous representative resigned last year due to health issues. The African Union has also indicated its concern, although it has not proposed a concrete intervention. Among the Arab states, only Algeria condemned Morocco’s reaction to the blockade. The war of words continues.

    For years, supporters on both sides have indicated displeasure at the lack of formal and realistic negotiations between the parties. Morocco has garnered broad international support for its autonomy proposal, which has been called “serious and credible” by the US and many others. While in the Polisario camp, its youth are becoming increasingly restive at the lack of more aggressive action by the leadership to change the status quo and push for independence or something more acceptable than the present doldrums.

    To some analysts, this is what lies at the core of the current tension — actions by a small group of unhappy camp-dwellers, fed up with the cronyism and corruption of the leadership. The Polisario Front and Algeria had no option but to follow behind this tiny minority as neither has a better alternative other than engaging in negotiations. The status quo has many benefits regionally and internationally. First of all, Algeria, which is in a serious domestic crisis with its own people and competing leadership cadres, sees this as a way to help relieve some of the dissonance at home. However, this does not seem to be working as there have been no public expressions of support for the Polisario’s announced withdrawal from the ceasefire.

    Similarly, the Polisario elite, who have refined their autocratic leadership and kleptomania for more than four decades, cannot allow the dissidents to draw them into a war that they are neither prepared for nor capable of carrying out effectively. Morocco benefits from the perception that the Polisario — and, by inference, Algeria — are more interested in fomenting instability in a critical region where terrorism in the neighboring Sahel is of concern rather than in engaging in formal negotiations to resolve the conflict.

    The UN, the United States and France, the major international players at the scene, would be happy with the former status quo as it relieved parties of using diplomatic leverage to move the combatants to proactively engage in peaceful steps for conflict resolution. It has become increasingly obvious that the modus operandi here goes along the lines that if no crisis exists, there is no point in starting something that no one wants to intervene in. In his statement, UN Secretary-General António Guterres voiced “grave concerns” surrounding the most recent developments in Western Sahara, warning against “violations of the ceasefire and the serious consequences of any changes to the status quo.”

    No Simple Way

    There is no simple way forward or return to the status quo without Algeria facing up to its role in sponsoring the Polisario Front for over 40 years and enabling some kind of diplomatic movement. In the words of the Organization for World Peace, “As the Polisario’s main backer, Algeria has a responsibility to prevent this situation from escalating or being manipulated by other organizations. Working with Morocco, both sides should encourage a peaceful de-escalation of the current violent rhetoric in order to prevent the conflict from reigniting.”

    Similarly, Morocco should take no action beyond its setting up a military outpost in the buffer zone until the Polisario Front returns to the ceasefire agreement. It should also work with the UN to restart formal and comprehensive negotiations on its autonomy proposal. Algeria cannot, for its own domestic reasons, escalate military threats that destabilize the area. It should work to calm the situation so that it can more effectively mediate its own Hirak movement going on now for more than a year.

    Finally, the incoming Biden administration in Washington — quite familiar with the Western Sahara as it is comprised of many members of the Obama administration, which was a strong supporter of delaying any proactive US push to resolve the conflict — should understand the larger potential disaster if regional destabilization accelerates, terrorist cells expand from ungoverned spaces, and other players agitate for their own interests in the area. This is not the best scenario for starting out the new US administration’s North Africa strategy.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Does Saad Hariri Really Believe He Can Save Lebanon?

    My parents used to say, “Eat with your mouth and not your eyes.” This may be good advice for newly-minted Lebanese Prime Minister Saad Hariri. He is clearly unable to resist trying once again to raise Lebanon from its deathbed, and this time the consequences may be more disastrous than just a bit of heartburn. Yes, I’m sure his supporters see this as the ultimate act of patriotism, and hopefully, he will be successful, but the odds are against him.

    First of all, Hariri is a well-known figure who understands the political calculus of his supporters and opponents. Yet this is not similar to his deal that brought the presidency to Michel Aoun in 2016. The reforms called for, and that Hariri has said he supports, are literally aimed at dismantling the edifice of economic and political corruption that has led to the erosion of Lebanon’s well-being.

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    Secondly, there is the matter of the timeframe called for under the French plan for change that serves as Hariri’s point of reference. It calls for significant reforms underway in six months as well as capital controls, anti-corruption measures, a robust social safety net and radical changes to how the government and banking system operate. Hariri, a three-time prime minister, has said that he will accept a government with a shelf life of six months and focus on the political and economic reforms to refresh and reinvigorate the country.

    Will the oligarchy, of which he is a member, yield to his office the necessary executive authority to bypass parliament to enact laws and regulations? There is no brotherly bond or even public tolerance between Hariri and Gebran Bassil, leader of the Christian Free Patriotic Movement. So, will the prime minister’s reliance on Hezbollah’s support bring him into the cross-hairs of US sanctions?

    A major sticking point will be the composition of the Hariri cabinet, which he promised will be made up of “nonpolitically aligned experts with the mission of economic, financial, and administrative reforms contained in the French initiative road map.” The downfall of the most recent prime minister, Mustapha Adib, was over this exact point, and it is a road too far for many of the political elites.

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    Finally, how much longer will the Lebanese people put up with leaders who are more concerned with their patrimony and their constituents rather than the health, safety and well-being of the country? Hariri may have the best of intentions, but we know which way that road can lead. As Al Jazeera reports, “Hariri’s return marks the biggest challenge yet for activists involved in the nationwide uprising against the country’s corrupt political class that had led to the resignation of Hariri and his coalition government last year.”

    The economic realities are well known, ranging from extensive corruption to government mismanagement and a failed government model built on cronyism. Soon, more than 70% of the people could be below the poverty line as the Lebanese pound has lost 80% of its value, unemployment is around 35% and people struggle with restrictions limiting access to their funds in banks. According to journalist Souad Lazkani, as many as 1 million will be unemployed by 2021 unless, by some miracle, reforms are urgently implemented by the new government.

    Deja Vu

    Hariri’s restart as prime minister is dreaded by many in the street who feel a sense of deja vu from the last decade. “Hariri’s return is the peak of the counter-revolution,” Nizar Hassan, a political activist told Al Jazeera. “A pillar of the political establishment, a multi-millionaire who represents the banks and foreign interests, and a symbol of inefficient governance and widespread corruption: He represents everything we revolted against.”

    So, the demonstrators who have been protesting for several months have to decide whether to publicly oppose these latest steps to maintain the status quo or come up with an alternative that, hopefully, will be nonviolent. With the hyperinflation that has caused shortages of basic goods like medicine and foods, the growing instability and dwindling prospects for change, Lebanon faces a very difficult winter.

    This is Hariri’s multilayered and multifaceted challenge. As he assembles his cabinet and prepares his ministerial statement of his government’s vision, he will be watched closely by people hoping that he can rise above the sectarian politics of the past, as well as by those who are most threatened by reforms. It is a difficult road ahead indeed.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Reworking US Policy in the Middle East and North Africa

    US foreign policy has shifted dramatically from just a brief 20 years ago. This is not the making of Donald Trump, Xi Jinping or Vladimir Putin. Rather, they are symptoms of forces that have been building since the post-Soviet era. With the ascendency of the US as the global superpower and the “Washington Consensus” as the pillar of economic development, it was easy to assume that Pax Americana was our legacy to the world.

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    In less than three generations, we are now less sure of our leadership and concerned — as are other nations — with the contradiction of a great power festering internally. Yes, the US certainly retains the world’s strongest military, economy, number of Nobel Prize winners and sometimes even Olympic gold medals. But America’s leaders are unsure of its place in the world, and they disagree on key issues: climate change and the environment, sustainable economic growth, support for international organizations, reengineering the social contract and similar deep-seated concerns.

    The US in the Region

    It is no surprise that there are many opinions on what US foreign policy in the Middle East and North Africa (MENA) region will look like under an administration led by Joe Biden or Donald Trump. The only clear agreement is that there is no going back to 2000, 2008 or 2016. The world has changed in many respects. While we can discern a pattern of Trump’s preferences, Biden’s policies would reflect what he and his team learned from their time in the White House under Barack Obama and, hopefully, what he has learned in his almost 50 years of being in Washington. 

    Opinions about a return of Trump’s world vision run the gamut from doomsday to what could be better? For example, writing for Brookings, Thomas Wright exclaimed that “a second Trump term would make a lasting impact on the world right when it is at a particularly vulnerable moment. U.S. alliances would likely crumble, the global economy would close, and democracy and human rights would be in rapid retreat.”

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    This is hardly the view of the president’s supporters. They believe that international alliances, the global economy and promoting democracy and human rights have not secured stability or prosperity for the US, so why continue with policies that do not serve America’s vital interests? This brings us to the nub of the question: What are those interests that are literally worth fighting for?

    On the macro-level in the MENA region, it used to be simple: Israel and oil, with a secondary nod to trade and arms sales. This is no longer the case. Trump has put Israel on the road to control over its future by pressuring Iran and Hezbollah, continuing bilateral defense arrangements that enhance Israel’s qualitative edge, sealing the normalization of relations between the Israelis and some Arab countries, and ensuring that the UN Security Council will never pass another annoying resolution challenging Israel’s worldview.

    In world energy markets, Saudi Arabia has found itself outmaneuvered as the US can shift the supply paradigms to Asian markets by increasing its exports, which now makes America a more dangerous competitor than Russia. Even in arms sales and commerce, the US finds itself in tough competition with Russia, China and a host of regional producers — from Turkey to France and the UK.

    Regarding who are US allies and who are not, it appears that Trump favors leaving the Middle East and North Africa to its own devices, which includes supporting leaders who reflect his values of disdain for democratic limitations on their exercise of decision-making. This includes Turkey’s Recep Tayyip Erdogan, Egypt’s Abdel Fattah el-Sisi, Saudi Arabia’s Mohammed bin Salman and the UAE’s Mohammed bin Zayed. Trump’s penchant for transactional diplomacy is well illustrated by his treatment of the Kurds, Iraqis, the Syrian opposition, Turks, Iranians and others, often viewing diplomacy as a zero-sum competition.

    Does this mean a Trump foreign policy in the MENA region is without merit? Not if you are a supporter of Israel’s security, a hard-line approach on Iran’s dysfunctional role in the region and beyond, pro-arms sales as a tie that binds the US to its friends, and ending what seem to be “endless wars” that make no sense to many American voters.

    A Second Trump Administration?

    If Trump wins a second term in office, his administration would further refrain from direct action in places like Yemen, Libya, Jordan, Morocco, Tunisia, Algeria and Egypt, again focusing on the benefit to US interests as the guiding principle. For weak states like those in North Africa as well as countries such as Lebanon, it will continue to be a tug-of-war within the State Department as to how best to support US interests in any bilateral relationship. The bigger the country (Egypt), the better endowed with energy resources (Algeria) or the more likely to be convinced that normalizing ties with Israel will be tolerated by its citizens (Sudan), the more attention it will get. As has been noted by a former US ambassador, “This will become a major priority of the next Trump administration and they will make foreign aid contingent on normalization agreements.”

    How this shakes out for Morocco and Saudi Arabia, both of which are targets of US-Israel diplomacy, is not clear as the two countries have special ties to Jerusalem not easily superseded by realpolitik. Don’t plan on seeing any reduction in US support for the Saudis in Yemen unless the Senate goes to the Democratic Party, which may force the president to deal with his friends in the Gulf.

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    Somalia remains an outlier, although its fits and starts toward democracy may draw the attention of policymakers who realizes the threat of the geostrategic encroachment of China and Russia in the Horn of Africa. As for Mauritania and Djibouti, like many Americans, most members of Congress can’t find them on a map, which leaves these countries open to the jaws of Russia and China.

    The great powers game in the MENA region is just beginning to be engaged as China has expanded its ports to the Red Sea and the Mediterranean. Its economic diplomacy is making inroads in a long and patient march to North Africa. Russia is not leaving Syria anytime soon and will continue to press Lebanon and Egypt to accept military assistance, as it will also do in Iran, much to the detriment of US–Israel interests.

    It would be quite short-sighted to minimize the roles of Iran and Turkey as regional powers in being able to affect key issues: Libya, Lebanon, Syria, eastern Mediterranean energy, Hezbollah, Hamas, the Muslim Brotherhood, Qatar, the use of mercenaries, arms sales and taking risks that are considered illogical to some Washington policymakers. Each must be considered on its own terms and with a close eye on their often expressed interests and weakening domestic support. While a paper can be written on each of these countries, suffice it to say that a second Trump administration will have to use much greater diplomatic finesse in convincing Erdogan to work with rather than against Washington’s interests.

    And a Biden Administration?

    The biggest challenge to an incoming Biden administration is to indicate how it will retain the best policies of the Obama administration while introducing initiatives that will strengthen perceptions of US commitment to act decisively. Many people in the Middle East and North Africa look at President Obama’s hesitation to act firmly in Syria and Libya, the hands-off treatment over Hosni Mubarak in Egypt, and the uneven commitment to human rights as indications of weakness and inconsistency.

    A Biden administration would begin from a different set of values that define different interests than the Trump White House. Ironically, Joe Biden’s values have more in common with the internationalist agendas of Bill Clinton, George W. Bush and George H.W. Bush than with the current Republican administration. The cornerstones of Biden’s platform include the primacy of diplomacy, building relationships and alliances, emphasizing multilateralism for conflict-resolution, and greater attention to human rights and rule of law.

    As an open letter of endorsement for Biden by former US ambassadors and Middle East experts states, while “each country faces its own unique issues, the core complaints of poverty, corruption, and a scarcity of freedom are a common challenge.” Many of Biden’s positions are aspirational — for example, assuming that the right combination of sticks and carrots will bring Iran back to the bargaining table while Russia and China are already working to bolster their regimes militarily and economically.

    Promoting human rights and democratic values are front and center, but one wonders how those values resonate with the current generation of leaders, many of whom ignore and suppress expressions of dissension and calls for change. Part of Biden’s pledge is to support economic and political reforms, which may be opposed by those regimes he seeks to move toward. These reforms include greater inclusiveness and economic development for the young, women and marginalized groups.

    Biden claims that his administration would not countenance regimes that deny the basic civil rights of their citizens, nor ones built on widespread corruption and cronyism or those that meddle in the affairs of neighboring states. There is a gnawing fear among pro-Israel Americans that he will veer from his traditional uncritical support for Israel and insist on an end to actions that undermine the possibility of a two-state solution between the Israelis and Palestinians. These include halting the construction of Israeli settlements in the West Bank and stopping the annexation of Palestinian territory. Biden has already noted that he will restore economic and humanitarian assistance to the Palestinians and reopen the US Consulate in East Jerusalem that serves the Palestinian communities.

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    Regarding Lebanon, the former vice president favors assisting its civil society and citizens to develop and implement policies that will be inclusive, and also supporting a dynamic state that reflects democratic values of equality and fairness. He mirrors the Trump administration in promising to continue support for the Lebanese armed forces. Biden also recognizes the need to sustain extensive humanitarian assistance to Syrian refugees and host communities in Jordan, Lebanon and Turkey. What Biden won’t do, according to his statements, is continue to tolerate support for Saudi Arabia’s war in Yemen and its pursuit and punishment of dissidents and critics inside the kingdom and elsewhere.

    While no specifics are mentioned regarding Biden’s policy on Syria beyond “standing with civil society and pro-democracy partners on the ground,” his campaign platform maintains the role of US leadership in the coalition to defeat the Islamic State group and restore stability and promote a political solution in partnership with others in the region.

    Although not an Arab country, Iran plays an outsized role in the Middle East. Biden has already noted that he will renegotiate the Joint Comprehensive Plan of Action — the 2015 nuclear deal with Iran — with a broader focus on ending Tehran’s regional interference, support of terrorism and militias, and production of missiles. A similar agreement tailored to the specifics of Erdogan’s endgame in the region is also critical if any of the goals mentioned by a Biden administration are to be realized.

    While these goal statements are well-crafted, the lack of details — while understandable — raises concerns considering challenges, such as needing to reenergize a dispirited US diplomatic corps, indifferent or hostile players in the region, and unsure allies in Europe and the Middle East and North Africa. The critical need to focus on America’s domestic economic and psychological revival in the coming years will also compete with international priorities. Of course, the disposition of the races in the Senate and House of Representatives are also critical to closing the gap between aspiration and implementation.

    The authoritarian regimes in the MENA region prefer the devil they know. Yet the youth, women and those who are marginalized are desperate for changes that incorporate their aspirations and are built on equality, justice and opportunity. Donald Trump and Joe Biden are both known in the Middle East and North Africa. It will be quite interesting to see how the region reacts on November 4.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Morocco Looks to a Future After COVID-19

    Many countries are facing declining growth rates due to the coronavirus pandemic, and Morocco is no exception. Given lockdowns and flight restrictions implemented worldwide from March, the tourism and hospitality sectors — usually the third-largest component of GDP — have suffered enormous losses and almost collapsed during the first 90 days of the global response to COVID-19, the disease caused by the novel coronavirus.

    In the latest World Bank report, “Morocco Economic Monitor,” it is projected that the Moroccan economy will contract in the next year, which would be the first severe recession since 1995. “Over the past two decades, Morocco has achieved significant social and economic progress due to the large public investments, structural reforms, along with measures to ensure macroeconomic stability,” the report notes.

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    The World Bank’s forecast indicates that Morocco’s real GDP is projected to contract by 4% in 2020, which is a sharp swing from the 3.6% positive growth rate that was predicted before the pandemic. Consequently, the bank expects Morocco’s fiscal deficit to widen to 7.5% of GDP in 2020, around 4% more than expected before the COVID-19 outbreak.

    Meanwhile, the country’s public and external debt is to set rise but still remains manageable. In assessing the government’s well-regarded response to the crisis, the World Bank puts an emphasis on moving from mitigation to adaptation, which is key “to ensuring a resilient, inclusive, and growing Moroccan economy.” It also points out that despite this year’s setbacks, Morocco can still “build a more sustainable and resilient economy by developing a strategy to adapt,” similar to what it has done to address issues of climate change and environmental challenges.

    A Strong Position

    When viewed in comparison to the rest of North Africa and the Middle East, let alone its sub-Saharan neighbors, Morocco is in a strong position to capitalize on global changes as companies rethink supply chains and vulnerabilities in logistics. Globally, and especially in Europe and the US, corporations are rethinking their reliance on China as a key supplier, and Morocco is poised to benefit, as I mentioned in a previous article on Fair Observer.

    The European Union, in particular, is already calling for “strategic autonomy” in sectors such as pharmaceuticals by focusing on more reliable and diversified supply chains. The new strategy is expected to entail tighter rules on human rights and environmental protection on imported goods, a move that experts say would boost local manufacturers, and Morocco is near the top of the list.

    Guillaume Van Der Loo, a researcher at the Center for European Policy Studies in Brussels, spoke to DW about the opportunities for Morocco. “If you look at Morocco, there are more favorable conditions there for specific areas in particular, in relation to renewable energy and environmental related sectors, [and] Morocco is quite a frontrunner and the EU tries to chip in on that,” he said. “The idea that the European Commission has already expressed about diversifying supply chains could be beneficial for Morocco and that could accelerate negotiations on the new trade agreement.”

    Morocco is one of few countries that have free-trade deals with both the United States and the European Union, and it is seen as an entry point for Western investment in Africa. As Alessandro Nicita, an economist at UN Conference on Trade and Development (UNCTAD), says, “Morocco is very well positioned because of its proximity [and] because it’s part of [the] EU’s regional trade agreements, its rules of origin are kind of integrated with those of the EU.”

    The Challenges

    Yet Morocco faces challenges in grabbing these economic opportunities, including restrictive capital controls and a paucity of high-skilled workers. Having been overhauled in the 1980s, the country’s education system “has failed to raise skill levels among the country’s youth, making them especially unsuitable for middle management roles,” DW reports.

    Another concern has been raised by the National Competitive Council in Morocco, which said that if the country was to move forward efficiently, it had to end monopolies in key sectors. These include fuel distribution, telecoms, banks, insurance companies and cement producers, which have created an oligopolistic situation in the country.

    The Oxford Business Group (OBG) has also released a study focusing on the success that Morocco is achieving in terms of combating the effects of COVID-19. “Morocco boasts a robust and diversified industrial base, developed through years of heavy investment, which enabled the country to take actions to control the pandemic and mitigate supply chain disruptions,” the OBG notes. The investment-friendly climate and robust infrastructure, with Africa’s fastest train network, will enhance the country’s attraction for manufacturers looking to relocate Asia-based production, as supply-chain disruptions due to distant and vulnerable suppliers have resulted in many companies pursuing a strategy of near-shoring, the report adds.

    So, Morocco’s future in manufacturing, agro-business and technology may well determine the country’s capacity to recover its positive GDP growth rate as it overcomes the COVID-19-induced recession. To do so, it will need a robust marketing campaign as a country for reliable and relatively inexpensive supply chains and a skilled workforce.

    *[An earlier version of this article was published by Morocco on the Move.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Morocco Sets Out a Post-Coronavirus Recovery Strategy

    Morocco is committed to finding opportunities to restructure and redirect its economy to be better prepared for other potential calamities, such as the coronavirus pandemic. The economy is already facing a downturn due to drought, which may result in as much as a 42% decline in cereal production for 2019-20. However, given advances in the agricultural sector […] More

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    Will COVID-19 Change Algeria, Morocco and Tunisia?

    The novel coronavirus known as COVID-19 spread to North Africa more than two months ago. Since then, there has been speculation among observers that the effects on society, the economy and political life may be changed in both the short term with people’s habits and the long term as governments take measures to contain the […] More

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    How the Middle East Reacts to the Coronavirus Pandemic

    Combating the coronavirus pandemic requires reliable data for projecting infection rates, the effectiveness of mitigation steps and casualties. There are many subsets to consider: where it is spreading, transmission sources, demographic profiles, assessment of mitigation and treatment options, and lessons learned. But all of this is tentative at best given that we are not even […] More