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Morocco and China’s Haite Group signed an agreement on Monday to launch an industrial park near Tangiers for 200 Chinese companies that will create tens of thousands of jobs.
The agreement was signed in a ceremony at the royal palace in the port city attended by King Mohammed VI.
With an initial investment of $1 billion, “Mohammed VI Tangier Tech City” aims to generate 100,000 jobs, including 90,000 for employees from the Tangiers area.
“Chinese economic operators are looking for competitive platforms and they have chosen Morocco as one of those platforms,” Industry Minister Moulay Hafid Elalamy told AFP.
“The project is scheduled to take 10 years” and work will start in the second half of 2017, he said.
It will serve as the North Africa base for Chinese companies operating in the sectors of automobile manufacturing, aeronautics and textiles.
Total investments by companies from China over 10 years will amount to $10 billion, said Li Biao, president of the Chinese group, quoted by Morocco’s news agency MAP.
Morocco has launched an industrialisation drive centred on Tangiers which is being turned into a hub with a free trade zone and deepwater harbour.
Destination & Tourism – Janeen Christoff
PHOTO: The quiet city of Rabat in Morocco. (photo via Flickr/Anthony Tong Lee)
Rabat is like a visitor’s “starter Morocco.” It hits all the cultural marks without overwhelming travelers with its bustle. A new report in Traveller gives some insight into how to explore this marvelous city.
“The capital is a conservative, orderly and uncrowded town of wide avenues and French-era squares with a quirky medina (old town) at its center and an imposing kasbah (fortress) overlooking the sea and its river,” writes Brian Johnston.
Definitely include a visit to the Chellah, says Johnston.
“The Chellah has the remains of an old Roman trading post and later fortifications, topped with storks’ nests and scented with orange trees,” he says.
Experience traditional Moroccan cuisine at Le Dinarjat.
“The traditional Moroccan cuisine is as good as the romantic decor in this Andalusian-style courtyard house in the medina,” he says.
And the big must-do before you leave is the Kasbah des Oudaias.
READ MORE: 4 Reasons Morocco is Best Experienced By Group
“Check out its ornate and monumental entrance gate, Andalusian Gardens, old mosque and tea houses before browsing art galleries and admiring the views,” says Johnston.
For more on traveling to Rabat, read on here.
by Samia Errazzouki
Morocco’s Central Bank said on Tuesday it was holding its benchmark interest rate unchanged at 2.25 percent and that it expects economic growth to reach 4.3 percent due to a recovery in agricultural output.
The bank said inflation had remained stable at 1.6 in 2016, as forecast. In January 2017 inflation rose to 2.1 percent, but it is expected to fall to 1.1 later in the year, the bank said.
(Reporting by Samia Errazzouki; Writing by Aidan Lewis; Editing by Robin Pomeroy)
by Stephanie Petit
Chrissy Teigen and John Legend‘s daughter Luna Simone hasn’t even celebrated her first birthday yet, but she already has some impressive stamps on her passport!
The family of three jetted off to Marrakech, Morocco, with the 31-year-old model documenting the entire trip on social media. She posted a romantic shot with her husband of three years in a picturesque foyer. Teigen showed off her modeling skills in a mustard colored dress, cupping Legend’s face as they posed for the snap.
Luna got some love on Instagram from both of her parents. Teigen shared a photo holding her daughter at a marketplace, both covered by a pink shawl.
Legend, 38, also gave a look at his “vacation vibes,” posting a cute selfie with his daughter before sharing an adorable picture of Luna looking through some books while sitting on the floor.
“Light vacation reading,” he captioned the image.
Teigen and Legend managed to enjoy some alone time during their getaway as well. Their friends celebrity hairstylist Jen Atkin and photographer Mike Rosenthal — who joined them on the trip — took on babysitting duties for their pals’ 11-month-old daughter, with Atkin sharing photos of her husband carrying Luna on Snapchat.
Atkin and Rosenthal also put their own spin on their pals’ photo in the foyer. The hairstylist rocked a white jumpsuit ahead of a double date with their pals.
The model and her actor-musician husband recently revealed to PEOPLE that they weren’t always #couplegoals.
“We were always different,” Legend said. “I was always a little bit more buttoned-up, and she was always more brash and free.”
“I would get a little nervous at first with some of the things she would say, because I didn’t know how people would react,” the La La Land star admitted. “I usually played it more safely.”
But Teigen’s bold, infectious spirit quickly had him head over heels, and changed him for the better.
“I think she’s brought me out of my shell a bit, and made me enjoy life a little bit more,” Legend adds. “It’s been fun to grow together in that.”
Morocco believes in Africa’s capacity to rise to the challenges facing it and to ensure sustainable human development for its peoples, thanks to its vast natural and human resources, King Mohammed VI said on Friday.
“Achieving the African renaissance we yearn for hinges, however, on how much belief we have in ourselves, how far we rely on our own capacities and potential, and how well we exploit them, within the framework of mutually-beneficial South-South cooperation and solidarity-based, strategic partnerships,” the king said in a message addressed to the participants in the 2017 edition of the Crans Montana Forum, which kicked off in the southern city of Dakhla.
“I am sure we can rise to these challenges,” he insisted, saying that Africa is governed today by a new generation of pragmatic leaders, uninhibited by outdated ideologies who are working with a high sense of patriotism and responsibility to achieve their countries’ stability, political openness, economic development and social progress.
The King said that South-South cooperation, which is based on the culture of sharing and solidarity, is “the mechanism that will enable our countries to exchange their expertise directly and immediately. It will help improve our field experience, make the most of our complementarities and expand our national markets.”
This cooperation “will also open up new opportunities for efficient and beneficial investment and achieve effective sustainable human development, while respecting each country’s national sovereignty, as well as the principles of mutual esteem and equality,” the Sovereign noted.
Crans Montana Forum is attended with the participation of more than 150 countries represented by high-level personalities.
AGC Automotive Induver Morocco Lays Foundation Stone For Its Automotive Glass Plant In Kenitra (Morocco)
The foundation stone for the new automotive glass production plant being built for AGC Automotive Induver Morocco was laid on Wednesday 15 March in the presence of the Moroccan minister of Industry and Commerce, Mr. Moulay Hafid Elalamy, together with many other personalities from the worlds of politics, industry and the media.
© AGC Glass Europe
Joint venture between AGC Automotive Europe and Induver
The project for the new plant being built at Kenitra in the northern coastal region of the country is the result of a joint venture between AGC Automotive Europe and the Moroccan glass producer Induver.
This initiative marks the AGC Group’s first operations in Africa. AGC Automotive Induver Morocco will produce toughened glass for backlites and sidelites together with laminated glass for windscreens.
The plant will have sufficient capacity to supply around 1,100,000 car sets per year and should be operational in 2019, employing around 600 people.
Plant promises local development
The new plant is ideally situated to meet the demand for automotive glass in North Africa and the South of Europe. It will also benefit from a free trade zone set up to attract companies operating in the automotive industry and so to develop a major industrial concentration in this sector.
“Once the AGC culture of automotive excellence has been properly established here, our ambition is to see this plant managed 100% by a local team, in line with our policy in this area,” declared Jean-Marc Meunier, General Manager of AGC Automotive Europe.
Hakim Abdelmoumen, General Manager of Induver, for his part welcomed the prospect of producing the complete carset (windshields, backlites and sidelites) in large series for the first time in Morocco. “This wider offer will further raise the local content of vehicles built in Morocco and boost the added value created locally.”
by Weixin Zha18
The Group of 20 meeting of finance ministers and central bank governors in Baden-Baden, Germany, was a “first step” to kick start private investment in Africa, Moroccan Finance Minister Mohamed Boussaid said.
“This new initiative is completing and accelerating the visibility the continent will have on the worldwide private sector,” Boussaid said in an interview on Saturday. The finance ministries of the G-20 will support partnerships that for the first time will focus on promoting private investment, he said.
Germany, the European Union’s largest economy, started a program called “Compact with Africa” as part of its presidency of the G-20 to build up the continent’s economies and stem migration to the bloc, which has attracted more than 1 million refugees since 2015. Talks on so-called investment partnerships have started with the Ivory Coast, Morocco, Rwanda, Senegal and Tunisia, according to the German Finance Ministry.
The initiative started with the most dynamic, most economically and politically stable African countries and will expand further, Boussaid said. Existing investments in Morocco should be complemented by attracting more companies into the sectors of renewable energy, automotive, aeronautics, tourism and agriculture.
The G-20 can set the right conditions with international organizations and partner countries for investments in infrastructure and in small- and medium-sized companies, German Finance Minister Wolfgang Schaeuble told reporters after the gathering. “We may not leave Africa’s potential unused,” he said.
by Samia Errazzouki
Morocco’s trade deficit rose 21.7 percent to 26.71 billion dirhams ($2.66 billion) year-on-year in January and February, the foreign exchange regulator said on Friday, citing increased imports.
(Reporting by Samia Errazzouki; Writing by Aidan Lewis; Editing by Gareth Jones)
by Samia Errazzouki
Morocco’s Saham Assurance on Friday reported a 17.2 percent fall in 2016 net profit to 282 million dirhams ($28.2 million), the insurance company said in a statement.
(Reporting by Samia Errazzouki; writing by Aidan Lewis; editing by Jason Neely)
Middle East Monitor
“Morocco is the TRUTH!” Hollywood actor Will Smith wrote on Facebook after his recent trip to the North African country earlier this month.
In a post published on Wednesday, Smith said: “Special Shout Out to photographer Hassan Hajjaj and all my people in Marrakech. Morocco is the TRUTH!”
Images accompanying the comment showed a number of locals in traditional dress and Smith himself wearing a multi-coloured outfit and traditional Moroccan shoes. Unfortunately, he had the shoes on the wrong foot and instead of the Arabic writing reading “biladi”, my country in Arabic, the shoes read “di” “blah”.
Smith paid a visit to Morocco’s artists’ residence of Al Maqam, outside of Marrakech, where he appeared in a YouTube video dancing to the traditional rhythms of Gnawa in traditional dress.
Smith’s Morocco visit comes after a trip to Egypt where pictures emerged on local media showing excited fans taking selfies with the actor at Cairo’s International Airport.
by Ale Russian
She may be Hollywood royalty thanks to her famous grandfather, but Kiera Chaplin isn’t afraid to get a little extreme.
The 34-year-old granddaughter of Charlie Chaplin is participating in the Rallye Aïcha des Gazelles du Maroc — an off-roading rally in the Moroccan desert that has the women-only participants rely on old-school navigation techniques to get through a series of obstacles and checkpoints every day. After two weeks, the team who completes the race with the fastest time and the least number of miles wins the rally — but Chaplin isn’t thinking that far ahead.
“I’m a little scared and nervous,” the New York luxury realtor admits to PEOPLE about her first time in the rally. “But I’m going for the experience, I’m not going in thinking I need to win. I just want to go in and do the best that I can do.”
Every morning, the teams receive a Road Book — a document that contains only the geographic coordinates or headings and distances of the day’s checkpoints and finish line. Using a compass, a navigational plotter and maps, the “Gazelles” plot their route and plan their itinerary to find the most efficient route to get to the finish line. In the end, the teams will be driving a total of eight days — and Chaplin says it’s all about strategy over driving skills.
“My driving is as bad as it gets — I got my driver’s license in L.A.,” Chaplin, a former model, says. “I live in New York so I don’t drive that often, but this is more about technique. It’s fun that I’m not a big driver and I’m doing this — it shows anyone can do anything if they set their mind to it. I’m excited about meeting all of these incredible women from all walks of life and all around the world that are doing it and feeling empowered by the experience.”
Chaplin was born in Ireland but grew up in Switzerland in the same town where her iconic grandfather immigrated to in 1952 after political persecution in the United States. And although she had a normal childhood in a quiet European town, she always knew about her famous roots.
PICTORIAL PARADE/ARCHIVE PHOTOS/GETTY
The Chaplins from left to right: Kiera’s dad Eugene, Charlie with daughter Jane on his lap, Geraldine, his wife Oona holding Annette, Michael, Victoria and Josephine
“It was fairly normal, except that half of the bars and restaurants are called Chaplin’s or Charlie’s,” she jokes. “It’s very quiet compared to L.A. — no one really bothered me when I was growing up and it didn’t seem like anything special. Whereas when I moved to L.A. suddenly people started saying to me, ‘Oh you’re Hollywood royalty!’ “
Still, there was a moment in her early childhood where she says she decided to look in the dictionary at school and found him mentioned. It was the moment when she realized, “Wow, okay, he must be a bigger deal than I think.”
But Chaplin insists she didn’t know how wide-reaching her grandfather’s fame was until she started traveling through her modeling work and encountered people from all walks of life who would fondly remember the famous Charlie.
“I feel like he always gets such a positive response, people really admire him and respect him a lot and he brought a lot of laughter,” she says. “It’s nice to see so many people that loved him and still love him. So many people have little stories to tell and they ask me questions.”
From Coinage: Top 5 Most Expensive Movie Collectibles
By Samia Errazzouki
Moroccan King Mohammed VI is replacing Prime Minister Abdelilah Benkirane and will ask another member of the Islamist Justice and Development Party (PJD) to form a government after five months of post-election deadlock, a statement from the royal cabinet said on Wednesday.
The king took the decision “in the absence of signs that suggest an imminent formation” of a government and due to “his concern about overcoming the current blockage” in political negotiations, the royal statement said. It did not say who he would name to replace Benkirane.
Benkirane had been reappointed after the PJD, which first came to power in 2011, increased its share of the vote in October elections, maintaining its position as the biggest party.
Under Morocco’s election law, no party can win an outright majority in the 395-seat parliament, making coalition governments a necessity in a system where the king still holds ultimate power.
But the PJD’s relations with a former coalition partner, the conservative Istiqlal party, soured over economic reforms, and talks over formation of a government with the centre-right National Rally of Independence (RNI) stalled.
Benkirane’s efforts have met with resistance from parties that critics say are too close to the palace. Royalist supporters have been reluctant to share power with Islamists since the king ceded some powers in 2011 to ease protests.
The palace says the king maintains the equal distance from all parties and dismisses claims of royal interference.
Concern has mounted about the impact of the political impasse on Morocco’s economy. This year’s budget, which should have been approved by parliament by the end of 2016, cannot be passed until a government is in place.
Speculation had been building that King Mohammed would attempt to break the political deadlock following his return on Tuesday from a tour of African states.
The palace statement said the king would receive the new prime minister soon, and would task him with forming a government.
The king thanked Benkirane for his service as prime minister, praising him for his “effectiveness, competence and self-sacrifice”.
A source in the PJD told Reuters the party will be meeting Thursday morning to discuss the king’s decision, which Benkirane said he accepted.
“This is our king and he came to a decision under the framework of the constitution, which I’ve always expressed support for,” he told Reuters.
“I’m going to perform ablution, pray, and continue working on the ground.”
(Writing by Aidan Lewis; Editing by James Dalgleish and Lisa Shumaker)
by The Associated Press
A Lebanese businessman that the U.S. says has provided millions of dollars to the Hezbollah militant group has been arrested by Moroccan authorities, his lawyer said Thursday.
The lawyer for Kassim Tajeddine said he was arrested in Casablanca on Sunday while on his way from Guinea to Beirut.
“We now know there is an extradition order from the U.S. authorities,” attorney Chibli Mallat said in an emailed response to questions from The Associated Press.
Mallat said another lawyer who was appointed in Morocco saw Tajeddine in prison in Sale, near the capital, Rabat. “He is in good spirits and is treated adequately,” Mallat said.
The U.S. Treasury Department says Tajeddine is “an important financial contributor to Hezbollah” who was listed as a Specially Designated Global Terrorist in May 2009.
Tajeddine’s family issued a short statement saying the businessman is with Moroccan authorities and “is in good health.” It urged those seeking further information about Tajeddine to contact the family.
The U.S. treasury says Tajeddine funneled proceeds from Tajco, a multi-national business venture, to Hezbollah. The Shiite militant group has gone to war with Israel in the past and is now fighting alongside Syrian President Bashar Assad’s forces.
Hezbollah, which has members in Lebanon’s parliament and Cabinet, is considered a terrorist organization by Washington.
by Samia Errazzouki
Top Moroccan miner Managem reported a 41 percent rise in annual net profit to 289 million dirhams ($29 million) on Thursday helped by higher output and a rebound in metals prices.
Managem said significant discoveries had led to higher production, including a 32 percent rise in silver, 4 percent in cobalt, and 8 percent in zinc.
Increases in copper and silver production mitigated a decline in gold production in the Bakoudou mine in Gabon, it said.
Operating profit rose 9 percent to 673 million dirhams on consolidated sales up 1 percent at 4.377 billion dirhams.
Managem subsidiary Imiter Metallurgical Co (SMI), which operates in the Imider area, said its net profit rose 25 percent to 293 million dirhams.
The world’s seventh-biggest producer of silver, SMI said it saw a 32 percent increase in production in the second half of the year.
Managem said it would propose a dividend of 21 dirhams per share, while SMI said it would propose a dividend of 150 dirhams.
Managem produces gold, silver, cobalt and copper in Morocco and Gabon and is controlled by SNI, the Moroccan royal family’s holding company.
It recently signed a $100 million mining contract with Guinea which is projected to produce 100,000 ounces of gold a year.
(Reporting by Samia Errazzouki; editing by Aidan Lewis and Jason Neely)
Morocco’s magic carpet, from Marrakech to Agadir
WHO CAME first to Morocco, the Arabs or the Berbers? “Morocco was our land before the Arabs ever came,” our irascible guide to Marrakech, Boushab El Attar states. In long kilim dress, as many are in this heart-stoppingly beautiful city, he helps negotiate the medina’s good-humoured miles of trade, showmanship and hustle, on foot and by horsedrawn carriage.
Night and day, Marrakech’s sunset-pink magnificence has to be witnessed. At 460m above sea level and beyond the Atlas Mountains, it heaves with a hot pulse, 25 celsius in February and 45c in summer. Shade is plentiful.
Wide and wealthy streets connect quarters that host parks and clubs and mosques with equal embrace, as with street hawkers and banks.
Stroll through Les Jardonelles, Yves St Laurent’s shady oasis; and the sprawling Palace Bahia. Here the changing of the guard was sounded by jumping on wooden sentry points as the Sultan entertained in gorgeous chambers intact today. A busy chap, plenty on his hands.
Do you know of ‘sexual ablutions’ as prescribed by the Koran? Boushab the Berber explains them to our mixed-faith group, ritualistic washing of body parts according to decree and repetition. The Sultans at the Palace must have been fragrant for their four wives each, seven concubines and 24-strong harem comprised of chosen girls Miss Almond, Miss Orange Blossom, Spice Girl.
“It was a great honour to be chosen from your village, representing the harvest of life. Her family was elevated socially”. A year beyond her induction, the Misses were married forward into a secure life with Palace staff.
Continue reading below…
Morocco’s longstanding King Mohammad V1 and his engineer wife Princess Salma have changed the legacy of millennia to introduce free education for women into university level. It’s one of many egalitarian initiatives put in place by the respected monarch.
In the Jewish quarter, mosaic arches and bellydancers balancing candles at El Chwarma wrap around feasting and Berber musician singers. Another banquet in a Touareg tent near Agadir. This time we are welcomed by milk and dates and horsemen firing rifles. Traditional high octane dancing fills the scene, robes and instruments and limbs building intensity.
The white city of Agadir curves around a 10-mile sweep of golden sand. The promenade is phenomenal, Le Bleu Pavilion lined with beach parasols, hotels, a marina. Electric skateboards traverse its length if jet skis intimidate. There’s a laidback, strolling vibe.
Restaurant life is rich on the ocean front, divided between the cheaper but quality non-alcohol serving (three courses €8; lamb tagine €5) and those with a bar. Le Jetée has delicious Moroccan soup and Atlantic views for €1.50, or go downtown for the 1001 Nights restaurant and L’Etoile off Rue President Kennedy. Anticipate three courses for €4 and BYO takes care of alcohol.
Restaurants and hotels with full service are many and a source of live music by night. Le Nil Bleu attracts fine local singers. Its neighbour Camel has rosemary scented olives, glass of wine at €2 and beach beds on the sand.
The Golden Gate on tourist strip Boulevard de 20 Auot offers fish and pasta that wake the dead, singer Adou and a plush karaoke lounge that lures in songbirds. As everywhere, the welcome is sunny.
Rose Rushe was a guest of Sunway.ie at Hotel Kenzi Europe (4*). Season ends April 29, Dublin to Agadir direct.
News from The Associated Press
Negotiations are under way to find a new prime minister for Morocco following the king’s decision to oust the previous premier in a surprise intervention into the country’s politics.
The general secretariat of the Islamist Party of Justice and Development party met Thursday to decide its next moves after King Mohammed VI ordered Prime Minister-designate Abdelilah Benkirane to leave office. The king was frustrated with Benkirane’s five months of failed efforts to form a coalition government.
The PJD is expected to propose a new prime minister Saturday. Names that have surfaced include Saadeddine El Othmani, a former foreign minister, outgoing Justice Minister Mustapha Ramid and outgoing Transport Minister Abdelaziz Rebbah.
The deadlock was weighing on Morocco’s economy and reputation for political stability after years of upheaval in the Arab world.
Losing money fast amid low energy prices and declining output, the Algerian government will work to trim its expenses.
Despite popular pressure to ease up on austerity measures, Algiers will have no choice but to continue implementing its much-needed reforms.
Algeria will look to foreign investors for help in overhauling its energy sector, making incremental progress toward liberalizing its economy in the process.
Since the Arab Spring swept across North Africa in 2011, Algeria has been an immovable anchor in a region struggling to find stability in the face of wave after wave of change. Many of Algeria’s Mediterranean neighbors, including Tunisia, Egypt and Libya, are still recovering from the cataclysmic upsets that political and economic reforms have brought over the past six years.
Morocco, meanwhile, has just reclaimed its seat in the African Union after a decades long absence, and it is working furiously to re-engage with its African neighbors while preserving its friendship with the West. Morocco’s quest to improve its standing on the African continent could soon pose a threat to its longtime rival, Algeria, if Algiers does not move quickly to match Rabat’s ambitions.
But unlike its neighbors, Algeria has kept a fairly steady course in the two decades since its bloody civil war ended. Despite serious and persistent health issues, President Abdelaziz Bouteflika has held onto his seat in power. The country’s approaching parliamentary elections — the sixth since Algeria adopted a multiparty political system in 1989 — will do little to empower the legislature to mount a more effective challenge to the longtime leader and his entourage.
Even so, change is on the horizon for Algeria’s economy, despite the government’s reluctance to risk the unrest reforms would likely bring. The country’s economic growth and diversification have lagged in recent years, and in the face of persistently low oil prices and declining output, Algeria cannot afford to delay the overhaul of its lucrative but flagging energy sector any longer. And as it cautiously reshapes its economy, Algiers will gradually abandon its historical preference for isolation by courting foreign investors — a shift that could someday lead to a more open foreign policy as well.
Time (and Money) Is Running Out
Few North African economies can claim to be faring well at the moment, but Algeria’s financial problems are especially burdensome. The country depends on oil and natural gas for 94 percent of its total exports (most of which go to Europe) and 60 percent of its budgeted revenues. When oil prices plunged in 2014 before leveling out below $40 per barrel, Algiers was forced to drain its coffers to keep paying for its imports, pushing its budget deficit to a record high of 16.4 percent of gross domestic product in 2015. Of course, Algeria still holds a massive amount of oil wealth, boasting a higher GDP per capita than even its more diversified competitor, Morocco. But high levels of income inequality continue to plague the country.
Algeria’s foreign exchange reserves, moreover, are being rapidly depleted. Tucked away in the Revenue Regulation Fund, these reserves currently stand at just over $112 billion, down from $143 billion in 2015 and $177 billion in 2014. According to the International Monetary Fund, this figure will probably keep falling in the years ahead, dropping to $91 billion in 2017 and to $76 billion in 2018.
Keeping Up With the Times
Algeria’s spending decisions over the past few years matter less than the choices it makes next. Algiers will have to funnel some of its oil wealth into diversifying the economy, even as it keeps existing social spending programs and state industries afloat. (It will also maintain its defense spending, which the government is not eager to shrink amid its ongoing rivalry with Morocco.) Despite being Europe’s second-largest supplier of natural gas, behind only Russia, Algeria has had a tough time making ends meet as prices and demand in Europe have dropped. Declining output in Algeria’s own energy sector over the past decade has only made matters worse.
The government has dipped into its considerable reserves to pay the bills and prop up the Algerian dinar, with the unfortunate side effect of boosting inflation. In an effort to stanch the bleeding, Algiers recently slashed its spending by 14 percent, deepening the cutback of 9 percent outlined in last year’s budget. In 2017 alone, Algeria will try to reduce its imports by $5 billion, in keeping with the more than $10 billion in imports it has trimmed over the past two years. Though Algeria intends to remedy the situation in the long run by investing in growth beyond the oil sector, it has been slow to follow through with its plan.
Part of the problem is that restructuring the energy industry would threaten the patronage networks that have been built up around Algerian oil and natural gas giant Sonatrach. Since 2007, Algeria’s consumption of oil and natural gas has risen by more than 50 percent while its oil production has fallen by 25 percent. With less oil available for export, the government’s revenues have been hit hard — as have the payouts and perks that the ruling elite dole out through Sonatrach to keep their supporters satisfied. Leaders have moved hastily to invest in shale and enhanced recovery projects in an effort to counteract declining output in oil, but so far they have had little success in turning the energy sector around. All the while, Algiers’ fears of stoking unrest by revamping the country’s long-standing economic norms have grown.
An Unsustainable Status Quo
For the first time in decades, Algeria has turned to the international community for help. Algiers is eagerly seeking foreign investment into its agricultural industry to help offset its hefty import bills and spur development in what was once a significant sector for the country. And this is but one of many small steps the government is taking to bring in money from abroad. In 2013, for example, Algeria tried to stave off drops in hydrocarbon production by reforming its regulatory laws. Though the country’s infamous rule capping foreign ownership of any business operating in Algeria at 49 percent is still alive and well, calls to remove barriers to foreign investment are growing louder.
The country’s new constitution, which was updated early last year, also includes several clauses designed to open the Algerian economy to external funding. For example, the document explicitly prohibits the formation of new monopolies and directs lawmakers to “improve the business climate” of Algeria. Nevertheless, the decrees’ vagueness doesn’t inspire confidence in the government’s ability to see them through. After all, Algeria is known for bungling one of the most expensive infrastructure projects in the world, the East-West Highway, and ultimately tripling the expected cost of $6 billion with rampant graft. (The debacle has become even more embarrassing in light of Morocco’s success in championing its own public-private infrastructure project over the past decade.)
Algeria has had similar trouble keeping its economy up to date in the realm of Islamic finance, an increasingly favored option for diversifying financial sectors in the Muslim world. Like many other Muslim countries, Algeria is toying with the idea of issuing its first sukuk, or Islamic bond that pins its value to an asset without accruing interest. But the country lacks a legal framework to support Islamic finance, an area of growth that nearby Morocco, Egypt and Tunisia have recently and readily embraced. In fact, Algeria’s entire banking sector is woefully out of touch with modern banking standards, and its central bank has a reputation for being one of the most opaque institutions of its kind in the world. Hoping to skirt these issues while still attracting much-needed investment, Algerian officials have proposed a plan to issue interest-free bonds. This would bring in the immediate funding the government needs without labeling it an Islamic finance instrument.
Over the past two years, Algerian leaders have shown their willingness to implement unpopular reforms, especially those that target fuel subsidies and taxes. Algiers has already bumped up the national sales tax from 15 to 17 percent, sparking protests in several provinces. If the government deepens its resolve to double down on subsidy cuts and tax hikes, the demonstrations could certainly grow and spread. Though Algiers is trying to pare down its massive subsidy payments, which currently top $45 billion, at a reasonable pace, Algerian citizens are unhappy with the effect the cutbacks will have on their own pocketbooks and standards of living.
The government has encountered pushback from the ruling elite as well. As Algiers moves to modernize its energy sector — and, in doing so, disrupt the entrenched patronage networks within it — high-ranking officials have taken steps to ensure that the reforms do not impact their access to state wealth. But they are only delaying the inevitable. No matter who follows in the footsteps of Bouteflika, a president known for his aversion to reform and equated with national stability, the country cannot protect the status quo for much longer.
Morocco’s King Mohammed VI will appoint another Prime Minister from the Islamist Justice and Development Party (PJD) after its leader Abdelilah Benkirane failed to form a new government, a statement from the king’s office announced.
In October, the king re-appointed Benkirane as a PM with the task to form a new government, but he has not been able to achieve this goal after five months.
Given his constitutional powers to ensure respect for the constitution, the proper functioning of institutions and the supreme interests of the homeland and citizens, the king decided to appoint as a new PM another member from PJD, the statement said.
The king took notice that the negotiations, which lasted for five months, has not resulted in the formation of a governmental majority and that there is a lack of any prospects suggesting its near formation, the statement noted.