Around the Maghreb: Algeria Finds Green Gold in Cactus Production, Looks for Stability in Upcoming Election Result; Tunisia and France Strengthen Economic Ties; Morocco Looks to Continue Robust Vehicle Production – Jean R. AbiNader

Jean R. AbiNader
February 20, 2019

Jean R. AbiNader, Moroccan American Center

Oil production and other uses of the prickly pear are revolutionizing the quality of life for farmers in northeast Algeria. Since forming coops in 2013, and with technical help from Mexico and the United Nations, farmers have been able to build a thriving local economy around growing and harvesting the Opuntia species of prickly pears, which has many nutritional and medical benefits.

In the past, it was the soft inner flesh that was consumed. Now the outer green spiny discs are used for fodder, and oil extracted from the seeds of fruit has antioxidant benefits and is used in cosmetics for its anti-ageing properties, besides being rich in vitamin C, calcium, and magnesium,” according to an article from the Macau News Agency. The article also pointed out that “The flowers of the cactus go into making herbal tea while the pulp of the red fruit is turned into juice, vinegar, jams, and even sorbets.”

The prickly pear, according to a 2017 study by the United Nations Food and Agriculture Organization (FAO), is also useful to promote food security and prevent soil erosion, support planting of barley and other crops among the cacti, and possibly help limit the emissions of greenhouse gases. The FAO study concluded that “Climate change and the increasing risks of droughts are strong reasons to upgrade the humble cactus to the status of an essential crop in many areas.”

There is no mystery in Algeria’s upcoming presidential election, as President Bouteflika formally announced his candidacy, much to the relief of the country’s power brokers. As Haim Malka writes in a CSIS brief, “Ultimately, it doesn’t matter who wins Algeria’s next presidential election. What matters for Algerians and the country’s partners is whether Algeria’s powerbrokers—the military, presidency, and influential business clans—can build a consensus on how to address widespread socioeconomic grievances while maintaining public security and stability.”

In addition to adopting a more aggressive strategy to build the country’s economy away from its dependence on hydrocarbon revenues, Algeria is challenged to ensure domestic security by growing jobs and more opportunities for people in the interior, while simultaneously maintaining security on its borders against smuggling, terrorists, and weak states in the region. Its 42 million people, half of whom are under 30, face a government responsible for a stagnant economy that shows few signs of effective reforms. “Algeria is nearing a critical juncture that requires decisions,” according to Malka. He points out that its strong dependency on energy revenues to subsidize consumption, public employees, and bloated budgets has resulted in an imperiled social contract when funds are less available. Government decision-making and policy formulation is at best opaque and relies on consensus among elites in the top echelons of government, the military, key ministries, and business elites tied to different “clans” in competition for power, influence, and wealth. Malka writes that “These figures are generally risk-averse and feel a responsibility to steer the country on a safe and steady path. Their conservative approach and consensus-driven politics are directly shaped by the horrors of the Black Decade when Algeria was thrown into economic and political turmoil following the collapse of oil prices.”

This model of consensus politics and its rigidity in decision-making are not uncommon in the MENA region. From autocratic rulers to fragile democracies, “Consensus politics means that decisions are made slowly and implemented incrementally, if at all.” This may not satisfy new generations of voters who are more than ready to take to the streets to voice their opposition and demands.  While this model has led Algeria to the point where reforms must come sooner rather than later, it is relying on partners, such as China, to bail it out. A rather large band-aid approach, as China does not insist on reforms in exchange for its investments, it only postpones the inevitable need to adopt reforms that will diversity the economy and build a sustainable middle class.

France seeks to increase its role in Tunisia, by signing six new cooperation agreements during the visit of Prime Minister Youssef Chahed this past week. The agreements cover digital technology, transport, higher education, and health, and are aimed at both generating jobs for youth and improving social services. According to sources familiar with the visit, the goal is to double French FDI through medium and large French companies “with at least 100 million additional euros ($113 million) investment.”

Although France is the largest investor in Tunisia with more than 1,400 companies, and its second largest partner “with 14.3% market share in 2018, Paris wants to clearly anchor its position and probably win the first place on the commercial front.”

Morocco’s vehicle manufacturing is on a steady growth trajectory, according to Fitch Solutions Macro Research. The recently released report points to three indicators for the optimistic projection: the country’s improving economic performance will motivate new vehicle purchases; Morocco’s expansionary fiscal policy will also drive demand; and locally produced vehicles at low costs will enable more consumers to own vehicles.

Overall, it projects sales expansion for cars and light trucks to expand by 4.3% in 2019, 4.8% in 2020, and an average of 4.7% over the 2019-2018 period. For 2019, the report expects passenger vehicle sales to grow by 4.0%, while light commercial vehicles will increase by 8.0%,

Looking at the forecast for 2019, the report said that “we expect passenger vehicle sales to expand by 4.0% and light commercial vehicle sales to increase by 8.0%. Both Peugeot (PSA) and Renault are planning to double their local production capacity by 2020 and 2022 respectively,” which will keep costs down and make more vehicles available.

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