August 2, 2012

Wealth in the Maghreb

[I want to preface this post by pointing out that poverty remains prevalent in the Maghreb region (in some countries, more than others) and this, in no way, seeks to gloss over the dire socioeconomic realities lived by the people of this region.]

After Mona put together a great post that addresses the serious issue of poverty in the Gulf, naturally, I thought to make a post that shifts this subject and looks at wealth in the Maghreb, where it's present in the region, and what it's led to.

Unlike most of the Gulf countries who share a more common source of income (read oil), the economies of the Maghreb span from rent-based, to heavily dependent on tourism. Algeria and Libya are the two main rentier economies in the Maghreb and this is reflected on their higher rankings in the Human Development Index (HDI).

Here is where Algeria stands in the region and the world (source):
And here is where Libya stands in the region and the world (source):

The way Algeria and Libya use their rent varies and that is reflected through the political climate in both countries, which also vary significantly. 

On the lower side of the Human Development Index are Morocco and Mauritania. The agricultural sectors in both Morocco and Mauritania are major employers. Morocco depends heavily on tourism and remittances, while the production of phosphates makes Morocco the top exporter in the world. Mauritania's fish and mining industries dominate their economies. 

Here is where Morocco stands in the region and the world (source):
And here is where Mauritania stands in the region (the UNDP compares Mauritania's position with Sub-Saharan Africa, instead of Arab states) and the world (source):
Tunisia's economic structure is more diversified in relation to its neighbors and has a far smaller population. Along with the other factors measured by the Human Development Index, here is where Tunisia stands (source):

What Algeria, Libya, Morocco, Mauritania, and Tunisia share is a fairly recent colonial history that shaped the future of the state-led economic reforms. These reforms, in all the countries mentioned, sustained the regimes, which grew more authoritarian over time. Actors within the regime, along with the regime's allies, eventually became the most wealthy. These actors used their position vis-a-vis the regime to advance their personal business interests, creating a vast network of government officials and businessmen who crossed the line between the government and the private sector. It came to a point where the success of a businessman's large-scale investment, for example, depended on his political loyalty to the regime.

There is wealth in the Maghreb, but it's trapped within a small portion of the population that also makes all the decision-making. These practices of crony capitalism and nepotism created conditions that would eventually spark the uprisings that initially began in the Maghreb with Tunisia, and later, Libya. 

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