Highlights:
– Foreign investments in oil and gas industries will likely increase in Algeria and Morocco
– AOIM will increase in strength and continue to shift between targeting local government sites and Western institutions
– Egypt will push forward with economic reform initiatives, however, continues to stall democratization policies
Algeria and Morocco Will Compete for Foreign Business
In 2007, Algeria and Morocco enjoyed an increase in revenues relating to foreign investments in oil and gas than in previous years. Algeria, specifically, has attracted increased European investors, including Spain and Italy, and currently is Italy’s number one exporter of oil.
• In 2008, it is anticipated that economic prosperity for the two North African neighbors will continue to improve, amidst internal conflicts stemming from terrorism, corruption, and geopolitical strife (Previous Report).
In the last two years, Algeria has made considerable progress toward reducing internal violence, improving economic conditions, and reforming some public institutions in order to attract additional investors. Morocco has implemented an ambitious nation-wide initiative for increased economic prosperity and political reform, known as “2010 Vision,” whereby the Kingdom hopes to gain 10 million tourist visits, create 600,000 new jobs, and increase investments to nine billion Euros, among a number of other objectives by the year 2010. The Kingdom has received close to six and a half million tourists this year.
With regard to Morocco, local and foreign business communities are most concerned with the Kingdom’s intellectual property laws. To this end, King Mohamed VI appeared in front of Parliament this year and strongly advocated to reform Morocco’s judiciary branch, which should ease the pressures relating to intellectual property requirements for foreign investors. Although the process of such reforms is slow to materialize in Morocco, the business community is content with the level of economic stability. In 2008, Morocco will likely host more foreign investment opportunities as the economic environment continues to strengthen.
Terrorist Will Conduct More Attacks
The al-Qaeda Organization in the Islamic Maghreb (AOIM) has experienced a turbulent year in 2007. Suffering from deaths and arrests, internal fragmentations, and leadership changes, AOIM’s attack strategy has shifted between targeting local government sites and Western-based institutions or governments according to its capabilities and leadership at the time of attack. However, one major factor has been gradually growing throughout 2007 and will continue to develop in 2008: capability of attack.
The most recent attacks against the United Nations (UN) and the Supreme Court buildings in Algiers on December 11, 2007, illustrate AOIM’s ability to carry out a successful al-Qaeda style attack against a heavily guarded area of the capital . Although the group’s intentions for attacking such targets are not new, AOIM has, over the past the year, conditioned and sharpened its tactics in order to remain inline with al-Qaeda strategies and prove its commitment to global jihad.
AOIM is taking steps toward expanding the group and, ultimately, carry out a major attack in Europe. Throughout 2007, al-Qaeda leaders have release numerous video messages encouraging and ordering AOIM members and North African Muslims, in general, to carry out attacks against Westerners, including French nationals and Americans. By recently claiming that the Islamic Maghreb includes Spain and France, Ayman al-Zawahiri insists that the group “cleanse” its land of the “infidels” and carry out an attack against the “intruders” there (Previous Report).
• Although AOIM has not yet conducted such an attack in Europe, given the rate of advancement in capabilities and level of impudence exuded by the group, it is likely that it will attempt to carry out a major attack in Europe in 2008.
Security officials in Algeria and Morocco, specifically, have been boosting counter-terrorism measures to combat militants. In 2008, it is anticipated that international monetary contributions to combat terrorism in North Africa will increase, primarily from the United States and France.
Egypt Will Develop Commerce, Remain Politically Stalled
Egypt, an important nation in the Middle East and Africa, has kept its firmly forward pace of social and economic reforms in 2007 and has also played an important and indispensable role in promoting regional peace in the Middle East. In November 2007, the leading National Democratic Party (NDP) held its annual convention in Cairo, focusing its agenda on economic liberalization and privatization legislation, as well as political reform policies (Previous Report).
However, the initiatives most likely to transpire in the next 12 to 24 months will be economically driven and not political. A number of reforms including a significant reduction in both the capital and the time needed to start a business, led to a top ranking in the World Bank’s 2008 Doing Business report on national economic reformers in 2007. On the other hand, investors cite a cumbersome bureaucracy and a dense taxation system as key obstacles to doing business in Egypt.
In 2008, Egypt will continue to move forward with economic development plans, however, it will neglect to address the concerns of civil servants. Though Egypt’s GDP growth is recorded as one of the highest in Africa, at 6.8 percent, the majority of Egyptians enjoys virtually none of it. As time inches closer to the next legislative and presidential elections in 2010 and 2011, respectively, the NDP will continue to push for the succession of Gamal Mubarak for president (Previous Report). Since Egypt, along with the rest of North Africa, will enjoy steady financial gains in 2008, it will be less motivated to make any political or democratically inspired changed.
