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Chapter Six

A New Economic Model for North Africa

Pages 113-130 | Published online: 13 Nov 2015
 

Abstract

The 2011 Arab uprisings began in North Africa and toppled the leaders of Tunisia and Libya, but the forces that wreaked this profound change also touched their fellow Maghreb states of Algeria and Morocco. This Adelphi book examines how the politics, security and economies – which were largely stable for decades prior to 2011 – have changed in the four states. It asks why the popular revolutions in Tunisia and Libya did not spread to Algeria and Morocco; how the revolutionary states have fared since 2011; why Libya descended into a deadly civil war while the others did not; and whether the sitting governments in Algeria and Morocco have applied sustainable strategies to address the new political climate.

The book includes chapters on each of the four core Maghreb states, together with regional assessments of the jihadist threat and economic challenges. It analyses the tension between security and political reform, and argues that without persistent and comprehensive development of government institutions focused on creating jobs and providing security, the region risks future protests, terrorism or even revolution – a lesson that states throughout the Middle East should take to heart.

Notes

1 For example, in Tunisia, Articles 10 and 16 of the investment code stipulate that firms that export at least 70% of their output do not have to pay profit and turnover taxes. According to a World Bank study, ‘All in the Family: State Capture in Tunisia’, ‘this has helped Tunisia attract foreign investors and accolades from the international community, despite the onshore sector being highly protected and largely closed to foreign competition.’ See Bob Rijkers, Caroline Freundand and Antonio Nucifora, ‘All in the Family: State Capture in Tunisia’, Policy Research Working Paper, no. 6810, March 2014, http://documents.worldbank.org/curated/en/2014/03/19291754/all-family-state-capture-tunisia.

2 US Energy Information Administration, ‘Libya: Country Report’, October 2013, http://www.eia.gov/countries/cab.cfm?fps=ly.

3 Ibid.

4 Mohsin Khan and Karim Mezran, ‘The Libyan Economy After the Revolution: Still No Clear Vision’, Atlantic Council, 28 August 2013, http://www.atlanticcouncil.org/publications/issue-briefs/the-libyan-economy-after-the-revolution-still-no-clear-vision.

5 ‘Algeria: Country Report’, US Energy Information Administration, May 2013, http://www.eia.gov/countries/analysisbriefs/Algeria/algeria.pdf.

6 Mohsin Khan and Karim Mezran, ‘No Arab Spring for Algeria’, Atlantic Council, May 2014, http://www.atlanticcouncil.org/images/publications/No_Arab_Spring_for_Algeria.pdf.

7 Mohsin Khan and Svetlana Milbert, ‘Middle East Protests: Can Money Buy Peace?’, Peterson Institute Real Time Economic Issues Watch, 9 March 2011, http://blogs.piie.com/realtime/?p=2068.

8 Khan and Mezran, ‘No Arab Spring for Algeria’; ‘Algeria: 2013 Article IV Consultation’, IMF Country Report, no. 14/32, February 2014.

9 ‘Morocco Taps $6.2 Billion Precautionary Loan from IMF’, IMF Survey Magazine, 3 August 2012, http://www.imf.org/external/pubs/ft/survey/so/2012/car080312b.htm.

10 ‘Tunisia: Request for a Stand-By Arrangement—Staff Report’, IMF Country Report, no. 13/161, June 2013.

11 From end-2013 to end-2014. See Feras Bosalum and Ulf Laessing, ‘Libya's Foreign Reserves Fell by a Quarter Last Year,’ Reuters, 4 May 2015, http://af.reuters.com/article/commoditiesNews/idAFL5N0XV2SI20150504?pageNumber=1&virtualBrandChannel=0.

12 Paolo Verme, Khalid El-Massnaoui and Abdelkrim Araar, ‘Reforming Subsidies in Morocco’, Economic Premise, no. 134, February 2014.

13 Tarek Amara, ‘Tunisia Raises Petrol Prices by 6.3 Percent to Trim Budget Gap’, Reuters, 1 July 2014, http://uk.reuters.com/article/2014/07/01/tunisia-energy-idUKL6N0PC3OI20140701.

14 ‘Tunisia: Third Review Under the Stand-By Arrangement, Request for Modification of Performance Criteria and Waiver of Applicability’, IMF Country Report, no. 14/123, May 2014.

15 Khan and Mezran, ‘The Libyan Economy After the Revolution’.

16 ‘Morocco: 2013 Article IV Consultation’, IMF Country Report, no. 14/65, March 2014.

17 ‘Tunisia Needs a New Economic Model to End Poverty’, Morocco World News, 30 March 2013, http://www.moroccoworldnews.com/2013/03/84674/tunisia-needs-new-economic-model-to-end-poverty-president-2/.

18 ‘The Arab World Competitiveness Report’, World Economic Forum, 6 March 2013, http://www3.weforum.org/docs/WEF_AWCR_Report_2013.pdf.

19 Masood Ahmed, ‘Youth Unemployment in the MENA Region: Determinants and Challenges’, World Economic Forum, June 2012.

20 United Nations Development Programme and International Labour Organization, ‘Rethinking Economic Growth: Towards Productive and Inclusive Arab Societies’, 2012, http://www.ilo.org/wcmsp5/groups/public/---arabstates/---ro-beirut/documents/publication/wcms_208346.pdf.

21 Gita Subrahmanyam et al., ‘Tackling Youth Unemployment in the Maghreb’, African Development Bank Economic Brief, 2011, http://www.unevoc.unesco.org/fileadmin/up/subrahmanyam_-_tackling_youth_unemployment_in_the_maghreb.pdf.

22 ‘Growth Slowdown Heightens the Need for Reforms’, MENA Quarterly Economic Brief, no. 2, January 2014.

23 Masood Ahmed, ‘Creating Jobs in the Middle East and North Africa’, Asharq Al Awsat, 20 May 2011, https://www.imf.org/external/np/vc/2011/052011.htm.

24 ‘Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises’, Doing Business, no. 11, 29 October 2013.

25 Roberta Gatti et al., Jobs for Shared Prosperity: Time for Action in the Middle East and North Africa (Washington DC: World Bank, 22 April 2013).

26 Elena Ianchovichina, Susanna Lundstrom and Leonardo Garrido, ‘What is Inclusive Growth?’, World Bank, 10 February 2009, http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-1218567884549/WhatIsInclusiveGrowth20081230.pdf.

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