MEA Risk Podcasts MEA Risk Podcasts

This podcast hosted by Arezki Daoud of MEA Risk LLC focuses on some of the most important events in North Africa and the Sahel that we are monitoring as of Friday, 23rd of December 2022. So this is a sort of week in review. This week was dominated by a couple of big events, the first is the political stalemate in Tunisia, and the second is about the collapse of the peace deal that was signed some 7 years ago by the government of Mali and rebel groups in the north. Each of these events are harbingers of more problems ahead.

Winter is near and Europe is facing an energy crisis after Russian attacked Ukraine. The EU and its member-countries have been looking for natural gas everywhere they can but the prospect of replacing Russian gas supplies on short notice will be difficult. Can Algeria and Africa fill the gap? In this podcast, Arezki Daoud argues that a short contribution from Africa will not be possible, but the longer term feels more optimistic.

Download the MP3 file here

 

Arezki Daoud of MEA Risk and The North Africa Journal visits Tunisia this November and is bringing better understanding on the challenges facing the Tunisians in their day-to-day living. Below is the transcript.



- Download the MP3 file for on-the-go listening:







 



- View the vlog:

 

 



Today, I am in the Sidi Bou Said district of the Tunisian capital Tunis, an upper scale neighborhood dotted with beautiful villas overlooking the Mediterranean. It takes about 50 minutes to reach Tunis from Rome, and so there is clearly a European feel here even though, linguistically, Tunisia is probably the most Arabized country in the Maghreb region.  In Sidi Bou Said things seem normal, until the owner of the apartment I rented, a visibly wealthy Tunisian, apologized for not supplying milk, which she could not find in Local markets.



The shortage of milk in Tunisia is pretty widespread and it is symptomatic of a nation whose leaders face major difficulties in bringing political stability and economic growth for the time being. Blame the Russian war on Ukraine as much as you want, that does not absolve the country’s political and governance system of any wrongdoing. Political leaders here are always reminded over and over again that the cost of milk production is higher than the prices imposed through price control and regulation. The government decides what price to impose on milk and other products in an effort to prevent social unrest.



On the shelves of supermarkets, each customer is only allowed  two units of milk. A unit consists of one liter. But the shortages have gone beyond milk, affecting many foodstuffs, such as white sugar, coffee, rice, butter and even soft drinks and bottled mineral water. Most of these products are sold in limited quantities.



Once a thriving business, cattle breeding is now in big trouble.  Cows are no no longer looking healthy and animals with protruding bones produce half the milk they did a few months ago, forcing many breeders to look for ways to sell them.  The breeders have been struggling with the rise in the world price of animal feed, based on imported corn and soybeans. An increase that has reached 30% to 40% this year due to the war in Ukraine, a major grain producer. As a result, the livestock population in Tunisia fell by 20 to 30% in recent months.



As I stated a moment ago, the selling price of milk in Tunisia is set by the State, which partly subsidizes the sector to support consumers. But, in recent years, the cost of production has been much higher at an estimated 1.35 dinars versus an estimated cost of 1.80 dinars.  Obviously If you are a milk producer, then you are losing money.   and so many farmers, if not most,are working at a loss.



This risk of the sector collapsing is just one example of structural  dysfunctions of the Tunisian economy, as evidenced by the shortages of recent weeks. Many are due to problems in importing certain products, while Tunisia lacks the budget and foreign exchange to cope with the global increase in food prices, a consequence of the war in Ukraine.



Beside Russia’s war on Ukraine, economic management has been a big problem for Tunisia, essentially highlighting the lack of skills and consensus on how to solve these problems. Take the example of white sugar, which is mostly purchased abroad. The product has not been seen in markets for several weeks. The Trade Office of Tunisia (OCT), responsible for its importing, justified the disruption by evoking the cancellation of a contract by one of its suppliers, without mentioning payment problems. Tunisia ordered, at the beginning of September, 47,000 tonnes of sugar to secure its stocks, and 20,000 tonnes have already been flowing in from Algeria. But experts will tell you that the authorities have failed to set up a strategic stock of sugar and...

The Maghreb’s biggest nations and regional rivals, Algeria, and Morocco, so far have refrained from choosing a side in the Russian-Ukrainian conflict. For its part, Tunisia has had ambivalent positions due to a number of factors, which we will cover in a moment. In general, though, these nations have had no intention on openly support one or the other party in the conflict and have assumed some neutrality based on multiple geopolitical factors. Broadly speaking and setting aside Ukraine as a sovereign nation, North African states see this conflict as one that opposes Russia, an extension of what used to be the Soviet Union, against the West, a group of nations that encompasses Western Europe and the United States. In some way, they see the conflict as the continuation of the cold war that pitted the USSR to the USA. Other major factors, such as North Africa’s proximity to and neighborhood with western Europe, the developing gas market, Russia’s military weight and its growing economic influence on the region are among the many factors that have been weighing on decision makers in North Africa on how to deal with this thorny conflict.

The visit of President Emmanuel Macron to Algiers at the end of August shook up and challenged the Algerian authorities in their once again excellent relations with Russia. The French security and ministerial deployment that accompanied the trip of the French president and the most recent visit of a delegation of 16 French ministers to Algiers, was intended to solicit Algerian help to stop the Russian advance in the Sahel and West Africa and its deployment in Mali. And that’s how competition between Paris and Moscow on the heart and soul of Algeria has been intensifying.

The escalating rivalry between Algeria and Morocco has had a destabilizing effect on the Maghreb region of North Africa. In fact, the entire western Mediterranean region is feeling the impact of the two countries’ strange competitive postures. Instead of cooperating to improve the living standards of their populations, the two countries have created a toxic environment in the Mediterranean allowing human smuggling, illegal emigration and drug trafficking to overwhelm parts of southern Europe, to say the least. In this podcast, Arezki Daoud, principal analyst at MEA Risk LLC and Editor of The North Africa Journal unpacks some of the realities surrounding the competition between Algeria and Morocco for the influence of the Maghreb region.