Petrostates and non-petrostates alike in the Middle East and North Africa (MENA) are vulnerable to shocks in the global economy. The worldwide spread of coronavirus combined with the Saudi-Russia oil price war have been the latest and most dramatic examples that prove this point. Although energy prices have started to recover from the abyss, demand will take months to return to pre-coronavirus levels, which will come with devastating consequences for the entire MENA region.
Wealthy Gulf states like the United Arab Emirates (UAE), Qatar, and Kuwait have embraced austerity measures while still being able to draw from deep financial reserve wells. Energy producing countries with large populations (Algeria, Iran, Iraq, etc.) will have to share those reserves among many more citizens. Austerity measures will have a more painful impact on populations, which were already coping with gloomy economic situations before the pandemic. The push for rapid economic diversification will increase and it will need foreign investment and engagement – both economic and political – and less on oil profits, direct or indirect.
Even MENA countries that don’t rely on oil and gas, including Egypt and Jordan, will suffer given the extent to which they have for many decades depended on Gulf money. Stability is also increasingly threatened in other parts of the Arab world such as Lebanon, where protests that began in October 2019 are still gripping the country as the currency falls. Additionally, violent conflicts continue raging across parts of MENA, such as in Libya and Yemen—two countries that could possibly undergo partition (either formally or informally), despite the COVID-19 crisis.
More Pragmatic Engagement with the Maghreb and Beyond
Amid the pessimism, there is an opportunity for the coronavirus-triggered global economic crisis to force a rethinking of globalization itself. If China’s Belt Road Initiative (BRI) was gaining momentum before the pandemic, many countries will be seeking to strengthen their supply chains by outsourcing and investing closer to home. This means that European countries of the Mediterranean could revitalize their economic links to the MENA region.
The pandemic may finally turn years of talks and debates into concrete action to better and more fairly integrate MENA into Europe’s economic sphere.
The pandemic may finally turn years of talks and debates into concrete action to better and more fairly integrate MENA into Europe’s economic sphere, reducing the region’s reliance on oil revenues. Propitiously, there has been a renewed impetus to facilitate development in the Mediterranean region to fill the North-South cracks that the pandemic has exposed within the European Union (EU). Beyond the EU, the focus will be on supporting countries such as Morocco and Tunisia, as well as those which have developed stronger institutions, favoring political progress and stability.
Turkey’s “Strategic Depth”
Turkey will likely play the dominant role, rather than Italy or France. Turkey’s successful military operations in Libya have opened unexpected areas for increasing its political and economic influence across the Maghreb, especially in Tunisia. Turkey’s presence might prompt competing powers—chiefly Saudi Arabia and the UAE—to increase their investments in order to prevent a loss of influence.
European countries like Spain and Italy could start “repatriating” businesses, while also focusing on their security by investing in countries which are the places of origin of Europe-bound migrants. Tunisia and Morocco have some of the best industrial infrastructures of the Arab world. Under a re-conceived partnership, the Maghreb could reap unexpected benefits from the post-pandemic “reconstruction.”
Under a re-conceived partnership, the Maghreb could reap unexpected benefits from the post-pandemic “reconstruction.”
Similarly, the EU might step up the implementation of its Neighborhood, Development and International Cooperation Instrument (NDICI) as other players move into its sphere, and as European companies reconsider their industrial outsourcing strategies. The NDICI proposes to help promote sustainable development and eradicate poverty, among other key goals and cooperation activities in Africa, Asia and the Pacific, Americas, and Caribbean.
The instrument establishes an investment framework to support small and micro enterprises and job creation as well as strengthen public and private infrastructure, renewable energy, and agriculture. The NDICI is aimed at the Sahel and Sub-Saharan Africa; nevertheless, the increased attention on these regions enhance the level of cooperation between the EU and North Africa.
North Africa as a Gateway to the Sahel
North Africa could play the vital role as a bridge between Europe and the Sahel. EU member-states have typically looked to North Africa without going beyond the perimeter of the Mediterranean. In a post-pandemic world, this is an obsolete strategy because North African countries are increasingly turning their attention toward countries to their south to establish new markets amid high economic and demographic growth expectations for sub-Saharan Africa in the coming years. Put simply, it would be myopic for the EU to pursue closer relations with North Africa without also considering the opportunities to reach deeper in the continent.
It would be myopic for the EU to pursue closer relations with North Africa without also considering the opportunities to reach deeper in the continent.
A recent report by Anthony Dworkin, Senior Policy Fellow at the European Council on Foreign Relations (ECFR) urges greater European engagement in these areas in order to reap important security and economic advantages. Dworkin suggests that the EU follow a pragmatic European approach, which fosters regional dialogue while also respecting North African countries’ thorny national interests. He observes that countries like Egypt and Ethiopia need help resolving their quarrel over the Grand Ethiopian Renaissance Dam on the Nile while Algeria and Morocco need diplomatic support to help resolve their Western Sahara dispute—a decades-old conflict that has tragically obstructed past efforts aimed at achieving regional integration and economic cooperation throughout the Maghreb. In turn, the conflict in West Sahara has also hampered Maghreb-Sahel cooperation, both in economic and security aspects.
The Sahel is a region that has become known for its nefarious groups, ranging from Salafi-jihadist terrorist organizations to smugglers of cocaine and poor migrants, hoping to reach the Mediterranean shore. Indeed, Italy, Spain, and France in particular would welcome greater cooperation and integration of security strategies to control migratory flows in the Sahel – and enhance stability in North Africa. In March 2020, France and 13 other European countries, including Italy and Portugal, officially established the Takuba task force to suppress armed groups in the Sahel in coordination with Mali and Niger.
Perhaps as a consequence of COVID-19, European powers will begin to approach the Maghreb and Sahel regions of Africa in different ways which could be positive for people of both continents.