Morocco, Algeria and the AMU.

The Arab Spring has proved that the cost of unemployment and disillusion amongst the young, low economic growth and  weak productivity are be unacceptably high. Moreover  the eurozone crisis means that Europe cannot continue to be the main  market and economic driving force for Morocco and Algeria.

The economies of  South East Asia and Latin America are in better shape and regional economic integration can only strengthen the two countries. The Frontier between Algeria and Morocco has been closed since 1994.It is an obstacle to the free circulation of its populations, products and capital. Inter Maghrebian commerce does not amount to more that 2 to 4 per cent of the trade of these countries. In Asean it is 21 per cent, in  the Mercosur region 19  per cent and the West African Economic Community 10.7 per cent. The AMU reckons that  its countries would gain 2.1 billion dollars a year (980 million dollars without including hydrocarbons. If their economies were better integrated the AMU countries would gain 2  points of  economic growth.

The IMF has said that if the AMU became a real commercial bloc and liberalised its services with an  attractive international investment climate it would result in an increase in GNP between 2005 and 2015 for Algeria of 57 per cent and Morocco 38 per cent. With a regional market of 67 million consumers with common regulations and economies of scale it would be possible to create far more employment opportunities and would encourage research and better product development. It would also mean that international investors would be able to invest across the whole of the AMU rather than uncoordinated investments in single countries. A disunited Maghreb risks marginalisation as regards international investment.

Algeria and Morocco complement each other economically as Morocco has phosphates and Algeria’s Sonatrach has the petrochemical facilities, together they could dominate the world fertiliser market. Morocco needs Algeria’s energy and Algeria a major food importer could benefit from Morocco’s agricultural products.

Jeune Afrique points out that Algerian Renault Logan cars come from Roumania and there is a Renault factory in Morocco. However now that Renault and Algeria are signing a manufacturing agreement this may mean that Algerian manufactured Renaults may compete with Morocco’s.

Entrepreneurs are also penalised as payments have to be made via Europe  and Small and Medium Enterprises need a better integration to be more competitive. Whilst political factors have kept the Moroccan Algerian borders closed businessmen on both sides of the border have reached out to each other to conduct business forming the Union of Maghrebian Employers and the Union of Maghreb Fairs. The number of Moroccan companies attending the Algeirs International Fair has increased. The economic rational is clear but political factors  have still to be resolved.

Some commentators argue that Algeria is not yet ready to agree to open the border and sees it as being more in Morocco’s favour that Algeria’s. There is also the antagonism dating back to La Guerre des Sables in 1963 but it is above all the issue of the Western Sahara. Benjamin Stora argues that the two matters , the opening of the Algerian Border and the Western Sahara must be treated separately to avoid this impasse.

The Western Sahara situation has after all lasted 37 years and is one of the world’s most intractable disputes. Whilst the young and the business community call for the Maghreb to be united and the two peoples are closely related yet the political factors and antagonism remain in place. All sides have said that they want to move forward on the AMU and hopefully they will find a way to achieve this. The rise of terrorism in the Sahel makes a resolution of the Western Sahara issue all the more urgent.