Alexandre Kateb: “The Maghreb states do not trade enough with each other”

In 2011, the Arab Spring broke out. Driven by growing frustration among citizens faced with leaders who are deaf to their emancipatory aspirations, “revolutions” have spread in the region. With disparate political and social consequences. If Tunisia has succeeded in its democratic bet, Libya has plunged into chaos. But for the past few years, another revolution has been underway. It is economical. New technologies, environmental issues and concerns around governance have upset Maghreb leaders, forcing them for some to review their development model. And to turn, also, to other, less traditional partners. Where are the different Maghreb countries on these issues? Is there also an intra-regional dynamic? Alexandre Kateb, economist and author of the book Arab Economies on the Move * agreed to decipher the situation at Point Afrique.

Le Point Afrique: Why did you publish your book now? Are we at a crucial moment for the economies of the Arab world?

Alexandre Kateb: This publication responds to several observations. First, the one I was able to make from my experience in Algeria, where I participated in the work on the elaboration of a new development model. I then wanted to widen my scope. By documenting myself, I realized that other countries in the region had the same problems. However, there was little work on the subject. So I wanted to draw up an inventory, turned towards the future with positive perspectives.

And what was your observation?

I realized that over the past twenty years, despite political, social or economic crises, there had been a real economic transformation in these countries, driven by a new generation that came to business. Their posture differs from older managers. Environmental and digital issues have also contributed to this upheaval.

Alexandre Kateb, author of “Arab Economies on the Move”.

© DR

2011 was a turning point for some of the Arab countries. But Libya has plunged into chaos. To what extent has this conflict upset the economy of the region?

It is Tunisia which has suffered the heaviest consequences. The war led to the repatriation of many Tunisians who worked in Libya and sent funds to their country. The conflict therefore deprived Tunisia of a substantial financial windfall. But she absorbed the shock. Over time, it has adapted.

How? ‘Or’ What ?

Those forced to return to the country have created businesses, and invested in real estate, which has boosted the national economy. Libyan migrants with high purchasing power also contributed. Tunisia therefore compensated with this return of capital and people. Today, the Libyan conflict is no longer a problem for the country. Even if unemployment remains high. Algeria, on the contrary, was little impacted, because the exchanges with Libya were few. Informal flows, on the other hand, have greatly increased. It is especially on the security level that the country has suffered the consequences of the Libyan conflict.

Read also The Maghreb letter – Libya, the new Vietnam

Nine years after the revolutions, what is the overall state of the Maghreb economies?

The economic situation has not changed since 2010. Instability and political uncertainty have weighed on economies. In Morocco, the austerity measures taken in 2013 spurred a timid recovery. But the economic slowdown is still in the news. Algeria, which suffered the full force of the fall in oil prices in 2014, is now in a recession. The government is split between austerity and social risk management.

In Tunisia, debts contracted following the revolution limited the investments that should have been made in education and health. It’s a real problem. The economy was doing better under Ben Ali, it’s true. But the country has done a real job of upgrading governance, which could bear fruit later. You have to be patient.

Read also Maghreb-Machrek: a downturn in the economy

The development model adopted by the older generation of leaders is today subject to criticism. His detractors accuse him in particular of widening inequalities. Are the Maghreb countries aware of this?

There is a dynamic. Governments have understood the need to focus on SMEs in countries where there are few large companies except the public sector. Morocco and Tunisia, for example, have greatly increased their subsidies to small companies. In Algeria too, but in a slightly different way. The country has set up credit facilities for microenterprises, supported measures for entrepreneurship among the unemployed or for housewives wishing to open a home business.

Morocco, for its part, has focused on the development of new technologies. Technoparks and start-up incubators have really spread and inspired other countries in sub-Saharan Africa, such as Côte d’Ivoire. The democratization of the Internet and telecommunications has also made access to microcredit services more accessible. The key now is how to speed up the tempo.

Morocco has also launched, a few months ago, a special commission on the development model, whose work aims to reduce inequalities, very persistent in the kingdom. What do you think ?

It is better late than never ! For the past twenty years, Mohammed VI has put infrastructure at the heart of his priorities. But only urbanized Morocco has benefited from this policy, even if there have been investments in the rural environment, in the electrification and distribution of water in particular. We can now see that the measures taken at the time were not enough. Some populations are literally trapped in poverty traps. Today, good initiatives have been taken for a more inclusive development model.

For example ?

The kingdom is currently reviewing its taxation, so that the wealthiest contribute more to the economy. A wealth tax and the elimination of tax loopholes for foreign owners are avenues to explore. The idea is not to become dependent on public aid, to gain autonomy. Promoting non-agricultural activities in rural areas and boosting household consumption would bridge the gap that persists in the country. Today, we are facing a two-speed Morocco.

Read also The IMF’s eye on the Maghreb

Where is Algeria, still very dependent on hydrocarbons, on this issue?

There is a will to change the model. It accelerated after the fall in oil prices in 2014. This was the subject of the task force set up thereafter. Unfortunately, the prerequisites for change, such as the establishment of the rule of law and an independent judiciary, were lacking. However, these are essential conditions for national and foreign companies. In order for them to establish themselves durably, everything that is arbitrary must be reduced.

In Algeria, there is a real problem on this side. This is what emerged from the discussions I had during my mission in the country. Distrust of governments has generated chronic instability, which frightens businesses. The entire Maghreb will now have to reindustrialize the region and develop services. Without following the model of China 30 years ago. Morocco has already launched initiatives in this area, with industries in the sectors of low tech and food.

One year after the start of the hirak, how is the Algerian economy doing?

The political uncertainty and the various blockages which resulted from it were negative for economic activity. Some companies have suffered in particular from the imprisonment of their managers. Rash, brutal decisions made the crisis worse. But the hirak also had a positive impact: it put the emphasis on issues of governance and accountability. Essential conditions for a profound change.

Read also Algeria: does the hirak worsen the economic crisis?

Is dependence on hydrocarbons, in Algeria as in Libya, still a reality? Have there been efforts to diversify the economy?

This dependence remains significant. Algeria still relies on a barrel of $ 100 to ensure its balanced budget, and its exports are 97% dominated by hydrocarbons. It is a whole system of redistribution of rent that must be changed. The problem is that the country must export this resource to become more independent thereafter. By selling its hydrocarbons, Algeria can then invest in other sectors. The vote, in 2009, of the 51/49 rule [qui fixe la part de participation d’un investisseur étranger dans une société́ de droit algérien à 49 %, NDLR] did not help. It was seen as a negative signal abroad.

What do you think of the turning point made by Morocco towards the economies of sub-Saharan Africa?

These exchanges are mainly concentrated in West Africa, and remain limited to a few countries such as Mauritania and Senegal. In view of all Moroccan exports to the world, the volume of those that concern sub-Saharan Africa is not significant. There has been progress in this area, including investments from Moroccan banks, telecoms and insurance companies. But the exchanges are few. And the fallout on Moroccan growth weak.

Read also Maghreb: heading for sub-Saharan Africa

And at the regional level? What is the state of intra-Maghreb exchanges?

What is certain is that the Maghreb states do not trade enough with each other. The very low volume of trade, at 5%, could double or even triple. To go further, a common market project should be set up. But it is not current. Except between Tunisia and Algeria, there are no free movement measures. Where the reluctance manifests most is between Morocco and Algeria, a country that thinks it will gain nothing.

If they do not exchange among themselves, who are the privileged partners of the Maghreb countries?

Europe keeps pole position, followed by China. But it is difficult to trace these exchanges, because part passes through hubs, like Dubai for example. But it is Chinese products that are exported. If consumers have gained purchasing power, producers have lost a lot. The end of the multifiber agreement in 2007, which limited trade in the textile sector, caused a massive influx of Chinese textiles. And thereby ruined the Moroccan and Tunisian industries. Over the past decade, Turkey has also become an important partner. The country has also signed free trade agreements with Tunisia and Morocco. But their trade balance is in deficit. This is the backlash phenomenon.

Are south-south dynamics likely to develop?

I do not think so. The Maghreb countries remain very turned towards Europe, which has been able to benefit from it. The region indeed guarantees him protection from security and migratory threats. If it wants to limit the risks, it has every interest to develop economic exchanges with the Maghreb. On this point, Morocco has managed to fare well. On the other hand, some countries do not take sufficient advantage of the opportunities offered to them. Algeria, for example, is very critical of the European Union customs tariff liberalization agreement, even though the country only exports gas and oil.

* “Arab Economies on the Move”, Alexandre Kateb.

Editions De Boeck Supérieur, 189 pages, 19.90 euros.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *