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IMPORTANT NOTICE:
The information in this PDF file is subject to Business Monitor International’s full copyrightand entitlements as defined and protected by international law. The contents of the file are for thesole use of the addressee. All content in this file is owned and operated by Business MonitorInternational, and the copying or distribution of this file, internally or externally, is strictly prohibitedwithout the prior written permission and consent of Business Monitor International Ltd.If you wish to distribute the file, please email the Subscriptions Department [email protected], providing details of your subscription and the number of recipientsyou wish to forward or distribute this information to.
DISCLAIMER
All information contained in this publication has been researched and compiled from sources believed tobe accurate and reliable at the time of publishing. However, in view of the natural scope for human and/ormechanical error, either at source or during production, Business Monitor International accepts no liabilitywhatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part ofthe publication. All information is provided without warranty, and Business Monitor International makes norepresentation of warranty of any kind as to the accuracy or completeness of any information heretocontained.
Business Forecast report
Q4 2010
issn 1746-5788published by Business Monitor international Ltd.
www.businessmonitor.com
nortH aFricaincludes 10-year forecast to 2019
European Debt Crisis: Economic Impact Assessed
4 Business Monitor international ltdwww.businessmonitor.com
nortH aFrica Q4 2010 n
or
tH a
Fric
a –
Ma
cr
oe
co
no
Mic
Da
ta a
nD
Fo
re
ca
sts
alg
eria
2005
2006
2007
2008
2009
e20
10f
2011
f20
12f
2013
f20
14f
nom
inal
Gd
P, u
s$b
n [2
] 10
3.3
117.
113
4.1
156.
913
4.0
160.
316
9.4
190.
520
7.0
222.
0
rea
l Gd
P g
row
th, %
cha
nge
y-o-
y [2
]3.
73.
63.
13.
52.
33.
13.
95.
24.
13.
7
Bud
get b
alan
ce, %
of G
dP
[2]
14.1
13.5
6.6
10.6
-7.5
-2.2
-2.4
1.6
3.3
4.9
con
sum
er p
rices
, % y
-o-y
, eop
[3]
1.7
4.4
3.9
6.4
5.7
4.0
3.0
3.0
3.0
3.0
exc
hang
e ra
te d
Zd/u
s$,
eop
[4]
73.5
870
.11
66.8
970
.46
71.9
175
.00
74.0
072
.00
70.0
070
.00
cur
rent
acc
ount
, % o
f Gd
P [5
] 20
.524
.722
.822
.09.
717
.815
.917
.616
.515
.3
tota
l gov
ernm
ent d
ebt,
% o
f Gd
P [5
] 25
.922
.011
.919
.621
.623
.022
.421
.320
.219
.1
e/f =
BM
I est
imat
es/fo
reca
sts.
Sou
rces
: 1 IM
F/B
MI;
2 O
NS
/BM
I; 3
BM
I; 4
Min
istry
of F
inan
ce/B
MI.
Liby
a
nom
inal
Gd
P, u
s$b
n [2
] 49
.261
.675
.989
.771
.568
.673
.179
.786
.193
.6
rea
l Gd
P g
row
th, %
cha
nge
y-o-
y [2
] 11
.15.
74.
92.
7-0
.93.
83.
46.
04.
95.
5
Bud
get b
alan
ce, %
of G
dP
[2]
24.6
32.3
23.2
24.6
3.2
16.8
17.9
22.0
22.0
22.4
con
sum
er p
rices
, % y
-o-y
, eop
[3]
9.8
2.8
7.3
9.8
0.4
3.0
3.0
3.0
3.0
3.0
exc
hang
e ra
te l
yd
/us
$, e
op [4
] 1.
351.
281.
221.
301.
201.
251.
251.
251.
251.
25
cen
tral B
ank
polic
y ra
te, %
[1,2
] 4.
004.
004.
005.
005.
005.
005.
005.
005.
005.
00
cur
rent
acc
ount
, % o
f Gd
P [2
] 30
.436
.037
.639
.810
.024
.818
.818
.311
.77.
2
e/f =
BM
I est
imat
es/fo
reca
sts.
Not
es a
nd s
ourc
es: 1
Dis
coun
t rat
e; 2
IMF/
BM
I; 3
Cen
tral B
ank
of L
ibya
/BM
I; 4
BM
I.
Mor
occo
nom
inal
Gd
P, u
s$b
n [2
] 59
.065
.975
.289
.293
.994
.999
.010
2.1
104.
210
7.7
rea
l Gd
P g
row
th, %
cha
nge
y-o-
y [2
] 2.
67.
73.
14.
34.
63.
64.
44.
33.
93.
6
Bud
get b
alan
ce, %
of G
dP
[3]
-4.8
-2.2
0.2
0.4
-2.0
0.5
1.7
1.7
2.3
2.7
con
sum
er p
rices
, % y
-o-y
, eop
[1,2
] 2.
13.
32.
04.
21.
52.
02.
02.
02.
02.
0
exc
hang
e ra
te M
ad
/us
$, e
op [4
] 9.
258.
427.
718.
017.
888.
008.
158.
458.
758.
80
cur
rent
acc
ount
, % o
f Gd
P [6
] 1.
82.
2-0
.1-5
.2-5
.0-1
.7-0
.60.
30.
81.
1
tota
l gov
ernm
ent d
ebt,
% o
f Gd
P [3
] 63
5.0
579.
851
3.0
438.
443
3.3
441.
343
5.7
435.
143
9.3
436.
5
e/f =
BM
I est
imat
es/fo
reca
sts.
Sou
rces
: 1 H
aut-C
omm
issa
riat A
u P
lan,
BM
I; 2
Min
istry
of F
inan
ce/B
MI;
3 B
MI.
tuni
sia
nom
inal
Gd
P, u
s$b
n [1
] 27
.631
.636
.737
.139
.142
.146
.050
.253
.657
.3
rea
l Gd
P g
row
th, %
cha
nge
y-o-
y [1
] 4.
05.
46.
34.
62.
43.
95.
86.
05.
75.
5
Bud
get b
alan
ce, %
of G
dP
[2]
-2.0
-2.7
-2.7
-1.6
-0.2
0.4
-0.6
-0.5
-0.4
0.1
con
sum
er p
rices
, % y
-o-y
, eop
[3]
3.9
3.1
5.2
4.2
4.3
3.0
3.0
2.5
2.5
2.0
exc
hang
e ra
te t
nd
/us
$, e
op [4
]1.
361.
301.
221.
311.
321.
321.
321.
321.
341.
35
cen
tral B
ank
polic
y ra
te, %
[4]
-5.
255.
255.
255.
254.
504.
755.
005.
005.
00
cur
rent
acc
ount
, % o
f Gd
P [5
] -1
.1-2
.0-2
.5-7
.0-4
.6-4
.7-4
.6-4
.3-4
.0-3
.6
e/f =
BM
I est
imat
es/fo
reca
sts.
Sou
rces
: 1 IN
S, B
MI;
2 IN
S/B
MI;
3 IN
S; 4
BM
I; 5
IMF/
BM
I.
5Business Monitor international ltd www.businessmonitor.com
executive summary ................................................................................................................................................ 15north africa: Good prospects in 2010........................................................................................................................................15
chapter 1.1: political outlook - algeria ................................................................................................ 17Domestic politics..................................................................................................................................................... 17corruption, unemployment and inflation still pervasive
algeria’s political risk profile will remain characterised by persistent corruption.
Long-term political outlook .................................................................................................................................. 18stagnation or upheaval: Government’s unpalatable choice
algeria’s political stability faces challenges from islamist radicalism, high unemployment and an unclear leadership future.
taBLe: aLGeria poLiticaL oVerVieW .................................................................................................................................18
chapter 1.2: economic outlook - algeria ............................................................................................. 21economic activity ................................................................................................................................................... 21oil Driven path to Budget surplus
We expect algeria’s budget to stay in deficit due to diminishing hydrocarbons revenues and a public spending growth rate in 2010.
chapter 2.1: political outlook - Morocco ............................................................................................. 23Domestic politics..................................................................................................................................................... 23political risk profile to improve
ongoing efforts to improve living standards, fight terrorism and reform the judiciary all have the potential to bolster Morocco’s political risk profile.
taBLe: Morocco poLiticaL oVerVieW ..............................................................................................................................23
chapter 2.2: economic outlook - Morocco ......................................................................................... 25economic activity ................................................................................................................................................... 25economy and Budget Looking Good For the Long term
While we expect a slowdown in Morocco’s economic growth to 3.6% in 2010, down from an estimated 4.6% in the previous year, we believe this will be a one-off downturn with average growth over the 2011-2014 period coming in at 4.0%.
Balance of payments .............................................................................................................................................. 26current account position to improve, But Deficit remains
We expect Morocco’s current account deficit to narrow in 2010 based on a pick up in goods exports and solid growth in current transfers.
6 Business Monitor international ltdwww.businessmonitor.com
nortH aFrica Q4 2010
chapter 3.1: political outlook - Libya ................................................................................................... 29Domestic politics..................................................................................................................................................... 29sK spat Highlights Diplomatic risks to Business
We maintain our relatively cautious political outlook for libya, and draw attention to several emerging risks.
taBLe: LiBYa poLiticaL oVerVieW ......................................................................................................................................29
chapter 3.2: economic outlook - Libya ............................................................................................... 31economic activity ................................................................................................................................................... 31Market Liberalisation Will support Long term Growth
We view libya’s efforts to encourage foreign investment in the oil sector and attempt to diversify the economy positively.
chapter 4.1: political outlook - tunisia ............................................................................................... 33Domestic politics..................................................................................................................................................... 33unemployment concerns raise political risks
We hold our view that, owing to tunisia’s authoritarian but stable government, the country will remain politically stable for the medium term.
Long-term political outlook .................................................................................................................................. 34political challenges For the coming Decade: scenarios For political change
tunisia boasts one of the most stable political climates in the region, and we forecast relatively tranquil conditions for the foreseeable future.
taBLe: tunisia poLiticaL oVerVieW ...................................................................................................................................34
chapter 4.2: economic outlook - tunisia ............................................................................................ 37economic activity ................................................................................................................................................... 37GDp Growth expected to reach 3.9% in 2010
tunisia’s economy appears to be recovering well after the fall in eurozone demand for its exports and tourist sector gave way to a slowdown in GdP growth in 2009.
chapter 5: BMi Global assumptions .................................................................................................... 39Global outlook ......................................................................................................................................................... 39us slowdown in H210 Looking LikelytaBLe: GLoBaL assuMptions ...............................................................................................................................................39taBLe: GLoBaL & reGionaL reaL GDp GroWtH ..............................................................................................................40taBLe: consensus Forecasts ...........................................................................................................................................40taBLe: eMerGinG MarKets aGGreGate GroWtH .........................................................................................................41
BMi ratings – Brief Methodology
composite ratingThe composite rating is an unweighted geometric mean of the short-term political and short-term economy ratings, allowing a ranking
of all countries in BMI’s emerging markets universe.
political ratingsThe political ratings are an indicator of political stability, seen as a pre-requisite for a stable economy and business environment.
The long-term political rating considers more structural elements such as: Is there a functioning democracy? Are there free and fair
elections? Is there separation between party and state? Have recent governments pursued similar, enlightened policies amid a stable
political environment? The short-term political rating considers more transient influences such as: Have there been recent large-scale
demonstrations or strikes? To what extent have these threatened the political status quo? Is unemployment currently a potential source
of political instability? What is the current position in the political cycle – to what extent is this contributing to political risk? Is the
government having trouble passing legislation?
economy ratingsThe economy ratings assess the degree to which the country approximates the ideal of non-inflationary growth with contained fiscal
and external deficits and manageable debt ratios. The ratings use as raw material historical data and forecasts fed in from BMI’s
country databases: as historical data are revised and forecasts change, so the ratings change. Factors in the long-term rating include
GDP growth, unemployment, inflation, real interest rates, exchange rates, the fiscal balance, the current account balance and external
debt. A number of other structural factors are also thrown into the equation, including dependence on the primary sector, reliance on
commodity imports, reliance on a single export sector and central bank independence. The factors included in the short-term rating
are a subset of those in the long-term rating.
Business environment ratingThe business environment rating is a broad indicator of the investment climate, for both domestic and foreign players. While areas
such as competitiveness, finance, openness and environment comprise the bulk of the rating, there is also an important feed from the
political and economy ratings. The factors considered include: the state of the national infrastructure, the education system, cronyism/
corruption, red tape, the legal framework, property rights, market access and the corporate tax regime.
Brief Methodology
7Business Monitor international ltd www.businessmonitor.com
algeria
BMi risk ratings – algeriaLatest rating* previous rating** trend region avg Global Mkts avg
s-t composite rating 50.6 50.6 = 44.6 53.7
l-t Political rating 60.3 60.3 = 53.4 63.2
s-t Political rating 61.3 61.3 = 59.9 66.7
l-t economic rating 61.7 61.7 = 42.2 53.2
s-t economic rating 60.4 60.4 = 45.0 52.4
Business environment rating 31.9 30.1 = 33.5 46.9
Trends reflect two consecutive months of movement in same direction. ~ indicates rating is below global markets average † out of 133 global markets rated *12/08/2010 **27/05/2010
BMi’s ratings rank states in terms of political risk, the economy and the
quality of the business environment. there are four ratings: a composite
rating, a political rating, an economic rating and a business environment
rating. these are reviewed every month and the results posted on BMi’s
online service (www.businessmonitor.com). the political and economic
ratings have short- and long-term components. the long-term ratings are
designed to reflect more structural considerations and will not change
greatly in the short term. the short-term ratings will change frequently
in response to more transient influences. all ratings are expressed as a
number between one and 100. a high rating is an indicator of lower risk.
poLiticaL risK persisting corruption to Weigh on political risk profile
corruption continues to pose major risks to further economic develop-
ment in algeria and to the improvement of its business environment. a
fast growing population combined with anaemic private sector demand
and relatively low foreign direct investment inflows will make it difficult
for the government to meet popular demands. consequently, workers’
strikes demanding wage raises will fuel instability, a general lack of sup-
port towards the algerian government and in extreme cases, support for
Business enVironMent interventionism Hurting investors’ confidence
the increasing government intervention in algeria’s private sector
will continue to harm the business environment. the ongoing conflict
with egyptian orascom’s unit djezzy, in which the government keeps
raising taxes for telecom companies, with the apparent aim of nation-
alizing the company, will scare off foreign investors and hold back
algeria’s economic progress. Given all these risks, algeria ranks third
from last among its Mena counterparts, with only iraq and yemen
scoring lower.
8 Business Monitor international ltdwww.businessmonitor.com
BMi ratings
LibyaBMi’s ratings rank states in terms of political risk, the economy and the
quality of the business environment. there are four ratings: a composite
rating, a political rating, an economic rating and a business environment
rating. these are reviewed every month and the results posted on BMi’s
online service (www.businessmonitor.com). the political and economic
ratings have short- and long-term components. the long-term ratings are
designed to reflect more structural considerations and will not change
greatly in the short term. the short-term ratings will change frequently
in response to more transient influences. all ratings are expressed as a
number between one and 100. a high rating is an indicator of lower risk.
poLiticaL risK public approval Lowering
libya’s rising oil wealth and large-scale infrastructure projects
should increase employment levels and therefore dissipate sources of
public discontent. However, fundamental issues, including the lengthy
incumbency of leader colonel Qadhafi and the uncertain timing of his
eventual succession, bring down our long-term political risk ratings. as
a result, the lack of a constitutional framework is not likely to change
in the long run, which could fuel underlying dissent as people expect a
more democratic system of leadership.
econoMic risK onward and upward
on the back of libya’s rising oil exports and revenues, the budget
surplus should continue to rise in the medium term. Moreover, a refresh-
ing commitment by the government to invest in the public sector through
construction projects and liberalise core sectors will drive the momentum
to economic growth. However, the erratic behaviour towards foreign
investors could jeopardise private sector growth.
Business enVironMent attractive, But uncertain
the potential for high growth in several sectors has continued to
attract investor attention since libya was reintegrated into the global
economic community in 2004, but more so after the government began
liberalising its economy to encourage growth in the private sector in
early 2010. However, political risk factors and poor market orientation
policies weigh down our business environment rating. Business deals
are still vulnerable to political interference, leading us to conclude that
investors will be highly cautious about entering libya.
BMi risk ratings – LibyaLatest rating* previous rating** trend region avg Global Mkts avg
s-t composite rating 54.5 54.5 = 44.6 53.7
l-t Political rating 59.5 59.5 = 53.4 63.2
s-t Political rating 65.8 65.8 = 59.9 66.7
l-t economic rating 56.5 56.5 = 42.2 53.2
s-t economic rating 70.4 70.4 = 45.0 52.4
Business environment rating 37.4 37.4 = 33.5 46.9
Trends reflect two consecutive months of movement in same direction. ~ indicates rating is below global markets average † out of 133 global markets rated *12/08/2010 **27/05/2010
9Business Monitor international ltd www.businessmonitor.com
nortH aFrica Q4 2010
MoroccoBMi’s ratings rank states in terms of political risk, the economy and the
quality of the business environment. there are four ratings: a composite
rating, a political rating, an economic rating and a business environment
rating. these are reviewed every month and the results posted on BMi’s
online service (www.businessmonitor.com). the political and economic
ratings have short- and long-term components. the long-term ratings are
designed to reflect more structural considerations and will not change
greatly in the short term. the short-term ratings will change frequently
in response to more transient influences. all ratings are expressed as a
number between one and 100. a high rating is an indicator of lower risk.
poLiticaL risK improving conditions But terrorism still a problem
over the medium term, we expect the planned judicial reform and
the implementation of an e-government strategy to improve Morocco’s
political risk profile. With unemployment and low living standards re-
maining the greatest challenges for the Kingdom, several measures
have been taken to tackle these matters. according to the un-Habitat
regional coordinator Jean-yves Barcelo, Morocco ranks second world-
wide in terms of the proportion of its population living in slums. despite
measures taken to counter terrorism, it continues to pose a risk to the
country’s political stability.
econoMic risK Low Demand Holding Back economic Growth
We expect Morocco’s economic growth to slow to 3.6% this year,
down from an estimated real growth rate of 4.6% in 2009. the drawdown
in fiscal stimulus will be the key factor, with government consumption
growth forecast to fall from 11.5% in 2009 to 6.0% in 2010 as a result.
furthermore, the pace of household consumption growth is also set to
fall, with unemployment (stagnating at 9.0% in 2010) still obstructing the
expansion of private sector demand.
Business enVironMent progress confirmed By Major trading partners
Morocco is in the process of improving its international trade posi-
tion, through economic reforms and fighting terrorism. along those
lines, on the occasion of the King’s day on July 31, the french state
secretary for european affairs Pierre lellouche praised the Moroccan
government’s mobilisation and modernity. this marks good progress
on the path to making the Moroccan business environment more at-
tractive to foreign investors.
BMi risk ratings – MoroccoLatest rating* previous rating** trend region avg Global Mkts avg
s-t composite rating 56.5 56.5 = 44.6 53.7
l-t Political rating 66.9 66.9 = 54.4 63.2
s-t Political rating 69.2 69.2 = 59.9 66.7
l-t economic rating 54.4 54.4 = 42.2 53.2
s-t economic rating 62.5 62.5 = 45.0 52.4
Business environment rating 42.9 43.1 = 33.5 46.9
Trends reflect two consecutive months of movement in same direction. ~ indicates rating is below global markets average † out of 133 global markets rated *12/08/2010 **27/05/2010
10 Business Monitor international ltdwww.businessmonitor.com
nortH aFrica Q4 2010
tunisiaBMi’s ratings rank states in terms of political risk, the economy and the
quality of the business environment. there are four ratings: a composite
rating, a political rating, an economic rating and a business environment
rating. these are reviewed every month and the results posted on BMi’s
online service (www.businessmonitor.com). the political and economic
ratings have short- and long-term components. the long-term ratings are
designed to reflect more structural considerations and will not change
greatly in the short term. the short-term ratings will change frequently
in response to more transient influences. all ratings are expressed as a
number between one and 100. a high rating is an indicator of lower risk.
poLiticaL risK presidential elections Looming
President Ben ali altered the constitution to retain the presidency
before in 2009, and we believe there is a risk he may do so again in
2014, prolonging his already lengthy leadership regime. in our view, the
most pressing driver for political change at that time may come from
the young unemployed, which have risen in number in recent years.
Public unrest or political opposition parties are not tolerated, providing
a base for unresolved tensions – particularly if the president manages
to secure another term in office. if he does, the lack of change or state
accountability could raise the risk of domestic instability, bringing down
our longer term political risk ratings.
econoMic risK productivity Limited By High unemployment
We believe that the government budget balance will continue in
deficit over the medium term, owing to the underwhelming private sector
expansion and associated high unemployment levels. state revenues will
rise slowly, outpaced by government expenditure in the next five years.
We see favourable real GdP growth continuing in the medium term as
tourism and manufacturing sectors expand output. However, much of
the growth in revenues will be directed at debt servicing, leaving the
budget deficit largely unchanged over the long run to 2014, averaging
4.8% of GdP.
Business enVironMent challenging For investors
despite tunisia’s attempt to encourage private sector growth, foreign
investment will remain tentative, which we see as a direct result of its
poor business environment. there are few regulatory authorities in place
to oversee private sector deals and no transparency guidelines in place,
making it challenging to expand business operations in the country.
on the upside, the liberalisation of the economy and the positive real
GdP growth over the long run will be expected to draw in foreign direct
investment, and with it, the expertise to develop core sectors.
BMi risk ratings – tunisiaLatest rating* previous rating** trend region avg Global Mkts avg
s-t composite rating 60.0 60.0 = 44.6 53.7
l-t Political rating 68.6 68.6 = 53.4 63.2
s-t Political rating 79.2 79.2 = 59.9 66.7
l-t economic rating 53.1 53.1 = 42.2 53.2
s-t economic rating 60.2 60.2 = 45.0 52.4
Business environment rating 49.4 49.5 = 33.5 46.9
Trends reflect two consecutive months of movement in same direction. ~ indicates rating is below global markets average † out of 133 global markets rated *12/08/2010 **27/05/2010
11Business Monitor international ltd www.businessmonitor.com
13Business Monitor international ltd www.businessmonitor.com
nortH aFrica Q4 2010
north africa: Good prospects in 2010 While we expect algerian economic real GdP growth to pick up
to 3.1% this year, up from the 2.3% real growth rate recorded in
2009, this only masks weak private sector demand and decreasing
hydrocarbons revenues. in the absence of consistent develop-
ments in the non-hydrocarbon sector, oil price volatility could mean
downside risks to the algerian budget balance. on top of that, owing
to massive government intervention in the private sector, foreign
investors are still cautious about the business environment, which
will cut into potential foreign direct investment (fdi) revenues. Given
the questionable good will of the government as well as its effective
capacity to improve private consumption, we expect turbulent times
to come.
By contrast, libya’s underdeveloped infrastructure and huge oil reserves
will continue to draw in investors, particularly since the government
redoubled its efforts to liberalise the economy, at the start of 2010. in
addition, economic growth will remain highly dependent on oil revenues,
which were helped by the rebound in oil prices during 2010 and are
expected to contribute 83% of the total revenues. the government
has invested heavily in developing manufacturing to diversify the
economy and better distribute its oil wealth while fdi will bring much
needed expertise and knowledge transfer. However, despite this the
government is prone to meddling in business deals, escalating minor
disputes, and this could deter more cautious investors.
the Moroccan economy is set to grow at a slower pace in real
terms in 2010 compared with last year, but revive over the coming
years to 2014. the main grounds for Morocco’s bright outlook are
the government’s efforts to improve the business environment,
creating a good foundation for growth in fdi inflows. on top of that,
the population’s living standards are improving, especially with the
number of those living in the slums around Marrakech and casa-
blanca having consistently reduced. However, the risk of terrorist
attacks still exists, despite the government’s increasing measures
to fight against militant islamists in the Kingdom.
Without large oil reserves, neighbouring tunisia is on the path to
developing its manufacturing and export-led economy with our
projection for real GdP growth averaging 5.4% from 2010 to 2014.
this is favourable in the long run, but high government spending
and slower paced revenue growth will maintain the budget deficit
at an average of 4.8% of GdP in the next five years. Moreover,
unemployment levels are not falling fast enough, which we believe
will limit private consumption growth. the government is keen to
attract fdi, particularly since we believe that encouraging growth in
the private sector will raise employment. However, we believe that
political instability, particularly leading up to 2014, will be driven by
poorly addressed longstanding issues including the undersupply
of jobs.
executive summary
15Business Monitor international ltd www.businessmonitor.com
Domestic politics
corruption, unemployment and inflation still pervasive
BMi VieWAlgeria’s political risk profile will remain characterised by persistent
corruption. We also highlight high unemployment and inflation, and so-
cial discontent towards private employers as key challenges that the
government will have to face over the medium term.
Algeria’s government faces multiple challenges over the
medium term. The high level of corruption makes it difficult
for the government to maintain credibility when seeking to
address socioeconomic pressures arising from relatively rapid
population growth. Despite a pickup in real economic growth,
which we forecast to come in at 3.1% this year, private sector
spending remains subdued, along with under-investment in the
non-hydrocarbon sector. Consequently, poor wages and rising
prices are cutting into the population’s purchasing power.
no signs of reducing corruptionAlgeria’s weak democracy and increasing allegations of nepotism
and kickbacks from lucrative contracts connected to high-ranking
officials prevent us from awarding the country a higher score
in its political rating. After having amended the constitution to
remove the two-term limit on presidential mandates, Abdelaziz
Bouteflika was re-elected for the second time in 2009. This raised
questions about whether the constitution was being shaped to
benefit the career of one man. Meanwhile, the Public Works
Ministry is thought to be run by close allies of the president,
which leaves scope for pork-barrel politics. (That said, some
senior officials have been dismissed and placed under investiga-
tion.) In addition, Justice Minister Tayeb Belaiz is also seen as a
Bouteflika associate, raising questions about the independence
and impartiality of the judicial system. Furthermore, despite
the denial of prosecutors, a recent rumour that a minister’s son
had been placed under criminal investigation for drug money
laundering raises more doubts about the integrity of government
officials and their relatives.
While corruption remains a problem, the public will be most
concerned about high unemployment. The jobless rate came
in at 10.2% last year, after the government failed to reach its
target of bringing it below 10.0%. The lack of jobs remains a
major problem in Algeria, especially among those under 30,
who account for 73.4% of the total unemployed population. The
government has put in place temporary employment schemes,
but these are short-term measures, and the public is increasingly
worried about securing a constant income.
More strikes to Fuel agitation Against this backdrop, and amid rising prices and poor hous-
ing, a successive wave of strikes has ensued, encouraged by the
railway workers’ victory at the beginning of Q210. Following
an eight-day strike, they obtained the 20% wage raise demanded
from the government. Owing to this precedent, we expect further
dissatisfied unions to follow suit, with a national crisis appear-
ing likely in an extreme scenario. The government’s decision
to sell a steel factory to steel giant Arcellor Mittal, the biggest
foreign investor in Algeria, was the main reason behind recent
workers’ discontent, and they demanded that the government
renationalise the biggest steel plant in the country or at least
acquire enough shares to enable it to make decisions. Further-
more, the government’s plan to reduce inflation to 3.0%, after
averaging 5.7% in 2009, seems to be failing. Indeed, although
several consumer items including sugar, milk, water and petrol
are subsidised by the state, June consumer prices increased by
6.1% year-on-year (y-o-y). Overall, Algeria may be braced for
a turbulent period this year.
Brief Methodology
17Business Monitor international ltd www.businessmonitor.com 17Business Monitor international ltd www.businessmonitor.com
Chapter 1.1: political outlook – algeria
Long-term political outlook
stagnation or upheaval: Government’s unpalatable choice
BMi VieWAlgeria’s political stability faces challenges from Islamist radicalism,
high unemployment and an unclear leadership future. While we be-
lieve that economic reform is vital for future growth, the political conse-
quences are unclear.
After the trauma of the civil war during the 1990s, Algeria has
enjoyed almost a decade of relative political stability under
the leadership of President Abdelaziz Bouteflika. While the
political challenge from Islamist groups has been effectively
neutralised under the Bouteflika regime, the Islamist movement
has morphed into a smaller, more radical organisation that now
operates under the al-Qaeda banner. In recent years the group has
carried out numerous attacks on government targets in Algeria,
as well as attacks and kidnappings in neighbouring countries.
Although the level of public support for the group in Algeria
appears limited, it could grow if job opportunities and economic
prospects remain limited, and if the public grows increasingly
frustrated with what is effectively one-party rule.
challenges and threats to stabilityAQIM: The most direct threat to the government comes from
AQIM – al-Qaeda in the Islamic Maghreb – the group that grew
out of Algeria’s civil war opposition. The group no longer seeks
to challenge the ruling Front de Liberation Nationale (FLN)
through the ballot box, and does not outline a coherent plan for
replacing the current political system. However, its frequent
attacks on the symbols of government – public buildings, police
stations and military installations – undermine the government
and its claims to have brought security to Algeria.
18 Business Monitor international ltdwww.businessmonitor.com
aLGeria Q4 2010
taBLe: aLGeria poLiticaL oVerVieWsystem of Government Parliamentary democracy, universal suffrage. 389-seat lower house (national Popular as-
sembly – aPn).
Head of state President abdelaziz Bouteflika, five-year term. no limit on number of terms following parliamentary amendment in november 2008.
Head of Government Prime Minister ahmed ouyahia.
last election Presidential – april 9 2009.
Parliamentary – May 17 2007.
composition of current Government coalition (so-called Presidential alliance) of fln, rnd and MsP.
Key figures finance – Karim djoudi; energy and Mines – chakib Khelil (currently president of oPec); foreign affairs – Mourad Medelci; Justice – tayeb Belaiz.
Main Political Parties (number of seats in parliament) national liberation front (fln) – 136 seats. Has ruled algeria since independence in 1962. combines nationalism and socialism with islamic and arab identity. since civil war of 1990s, has campaigned on a platform of national reconciliation and pursued greater economic liberalisation.
national democratic rally (rnd) – 61 seats. created in 1997 and led by ahmed ouyahia, former prime minister. loyal to President Bouteflika; in favour of privatisation agenda.
social Movement for Peace (MsP) – 52 seats. conservative, islamist party, in favour of national reconciliation agenda and amnesty for civil war opponents of the government.
Workers Party (Pt) – 26 seats. left-wing, unionist. led by louisa Hanoune, the first woman to contest a presidential election in the arab world.
rally for culture and democracy (rcd) – 19 seats. Mainly Berber, secularist party rooted in Kab-ylia region. Previous attempts to widen its support have been largely unsuccessful and appeared to alienate part of its core non-arab constituency.
a total of 23 parties and 33 independent candidates are present in parliament.
extra-Parliamentary opposition? al-Qaeda in the islamic Maghreb (aQiM) – islamist terrorist group, successor to the GsPc and Gia. accused of carrying out december 2007 attacks on un compound and constitutional court in algiers, as well as several other attacks.
next election Presidential – 2014
Parliamentary – 2012
ongoing disputes Morocco – closure of land border between the two, due in part to algeria’s material and political support of Western saharan secessionist group Polisario.
Key relations/ treaties Member of oPec, arab league, arab Maghreb union. association agreement with eu since 2005, member of euro-Med Partnership. candidate for Wto membership.
BMi short-term Political risk rating 63.8
BMi structural Political risk rating 57.3
Source: BMI
Political Relevancee: The government also faces a struggle
to demonstrate its relevance at a time of demographic change,
now that the defeat of France and the Islamist insurgency are
in the past. The government eventually defeated the immediate
threat from political Islam in the civil war, and Bouteflika has
attempted to base his own, and his government’s, legitimacy
on the delivery of political stability and economic growth.
However, the presence of AQIM and the tendency towards
economic stagnation threaten this balance.
Leadership Question: Though not immediately pressing, the
question of who will replace Bouteflika will become more press-
ing over the next decade. He was re-elected in 2009 to serve
a third term, after a popular referendum approved a change in
the constitution that removed the two-term presidential limit.
However, the president is already 72 and has suffered from health
problems in the past. At present, there is no clear candidate to
succeed him, which risks creating a power vacuum were he to
vacate his post prematurely.
Power of the Military: The military has played a powerful role
in Algerian politics since independence. Although Bouteflika
has sought to wrest some power away from the generals, it is
not certain whether his successor would be able to retain this
power. Uncertainty over Bouteflika’s succession could give the
military the opportunity to assume more power, particularly if
a growing threat from AQIM provided it with the justification
unemployment, % of labour force, eop [1] 15.4 12.3 11.8 11.3 10.2 10.0 9.8 9.7 9.6 9.4
Notes: e BMI estimates. f BMI forecasts. Sources: 1 IMF/BMI. 2 World Bank/BMI calculation/BMI; 3 ONS/BMI.
outlook of the budget’s recovery from 7.5% of GDP deficit last
year to our projected 2.2% in 2010. Brent Crude prices rallied
from US$35.95/bbl at the beginning of 2009 and increased by
134.2% to end the year at US$82/bbl. Our oil and gas team
sees demand growth for OPEC oil to come in at 2.5% in 2010,
outpacing the 2.1% y-o-y rate recorded by supply, boding well
for oil prices and hence Algeria’s budget balance. Nonetheless,
with hydrocarbon revenues accounting for almost 80% of the
budget’s gains, potential volatility in oil prices could obstruct
the consolidation of the Algerian fiscal position.
Going forward, we expect a pick up in hydrocarbon prices to
revive revenues through a boost in exports, suppressing the
need for the government to spend as much. With the economy
expected to be resuscitated by the recovery in global demand,
a lower need for public spending will see the total expenditure
growth rate to 4.0% down from 13.0% in 2010. As such, we see
budget returning to surplus starting 2012, coinciding with the
year when BMI Commodities team expects Brent Crude to trade
at US$92.00/bbl, following a leap from our US$85.00/bbl 2010
projection. The turning point will also be signalled by a 16.1%
y-o-y increase in hydrocarbon revenues, generating 14.3% total
revenue growth. Along these lines, we see the budget surplus
widening further to 4.4% by 2014.
non-Hydrocarbon Growth in the pictureThe likelihood of adverse scenarios in oil prices and the long-
term unpredictability of the market will drive the government
to develop macroeconomic strategic programmes aimed at
reducing the dependence on global economic progress. The
government announced plans to support growth of domestic
firms hence bring stable revenues going forward, making the
non-hydrocarbon private sector becoming more inward oriented.
Already, earlier this month the Algerian government announced
that domestic companies will benefit from preferential treatment
compared with foreign investors, allowing them to obtain shares
of the US$286bn planned to be spent over the next five years
on modernising the economy. Furthermore, the authorities plan
to stimulate private investment by extending tax incentives for
infant industries competing with lower import prices from foreign
more mature companies. Ultimately, business-unfriendly wil
We expect non-hydrocarbon revenues, accounting for around a
quarter of total revenues, to grow by an average 8.0% through-
out our forecast period, supported also by sustained progress
in tax collection. The government’s plans to make clean tax
records a prerequisite for all financial transactions and simpli-
fying the revenue administration bode well in this regard. The
increasing importance assigned to the effectiveness of public
spending will also help to reduce the gap between expenditure
and revenues, turning it into surplus over the long-term. The
reform of budget management will be supported by the activity
of projects assessment house Caisse Nationale d’Equipments
et des Developpement, which has been appointed to evaluate
the rationality and economic profitability of public investments.
risks to outlookDespite all the measures to boost the non-hydrocarbon private
sector, if the global demand downturn scenario plays out, and
oil prices fall, the Algerian public sector would have a hard time
sustaining long-term growth. On top of that, aggressive measures
to give priority to domestic businesses could turn out to be a
double-edged sword for long-term economic growth: the law
according to which contracts must first be offered to a national
tender, with Algerian firms being the only ones eligible, could
scare off foreign investors and develop an aversion towards the
market among foreign investors over the long-term. The attempt
to nationalize the profitable Egyptian mobile phone operator
Orascom’s Algerian unit, after hitting it with tax demands,
stands as a good illustration of the volatile and unpredictable
policies the government came out with. All these would reduce
growth and hence fiscal revenues, posing downside risks to our
projection that the Algerian budget balance will return to surplus
towards the end of our forecast period and instead maintain a
budget deficit, mainly driven by increased public expenditure.
is oil that important? – Yes, it is! Budget revenues & Brent crude Price
Source: BMI
-60
-40
-20
0
20
40
60
80
2000
2001
2002
2003
2004
2005
2006
2007
2008
e
2009
e
2010
f
2011
f
2012
f
2013
f
2014
fBudget Revenues, % y-o-y change
Brent Crude, % y-o-y change, US$/bbl
22 Business Monitor international ltdwww.businessmonitor.com
aLGeria Q4 2010
Domestic politics
political risk profile to improve
BMi VieWOngoing efforts to improve living standards, fight terrorism and reform
the judiciary all have the potential to bolster Morocco’s political risk pro-
file. In turn, this should also improve foreign direct investment inflows
and investor confidence. Militant Islamists remain active and pose risks.
The Moroccan government introduced legislation in three areas in
recent weeks, aimed at improving political stability, stimulating
economic growth and making the business environment more
attractive for foreign investment. We believe that the reforms
will contribute to an ongoing improvement in Morocco’s politi-
cal risk profile.
Domestic recovery on the right pathThe government has initiated a number of successful measures to
tackle unemployment and poverty, which are likely to contribute
23Business Monitor international ltd www.businessmonitor.com
Chapter 2.1: political outlook – Morocco
taBLe: Morocco poLiticaL oVerVieWsystem of Government constitutional monarchy; 325-seat parliament elected by universal suffrage for five-year term. executive power
rests with the King, who can dissolve parliament.
Head of state King Mohammed Vi
Head of Government Prime Minister abbas el fassi
last election Parliamentary – september 8, 2007
composition of current Government coalition of istiqlal (9 ministries), rni (7), usfP (5) and PPs (2). a further 10 government positions are held by ministers with no political affiliation.
Key figures King Mohammed Vi – Head of state, military chief, religious leader
Main Political Parties (number of seats in parliament)
istiqlal (independence Party) – 52 seats. led by abbas el fassi, nationalist and monarchist party (despite previ-ously being opposed to the rule of former king, Hassan ii). Has formed part of several coalition governments since the 1970s.
Justice and development Party (PJd) – 46 seats. Moderate islamist party, formed through the amalgamation of several islamist groups (including the more extremist chabiba islamia) and renamed PJd in 1998. received the highest number of votes in 2007 election but structure of the electoral system meant that it won less seats than istiqlal. Has toned down its criticism of the westernisation of Moroccan society since the 2003 casablanca bomb-ings and adopted a more pragmatic attitude, but other parties have sought to keep it out of government.
Popular Movement (MP) – 41 seats. economically liberal but socially conservative.
national rally of independents (rni) – 39 seats. second largest party in governing coalition. leader Mustapha el Mansouri is speaker of the House of representatives.
socialist union of Popular forces (usfP) – 38 seats. formerly the largest party in parliament but lost ground to coalition partner istiqlal in 2007 polls.
Party of authenticity and Modernity (PaM) – created in June 2008 and conceived as a way of unifying existing political movements. Parties to have joined to date include the environment and development Party, alliance of liberties, civic initiative for development and al-ahd.
a total of 23 political parties are represented in parliament.
extra-Parliamentary opposition? al Badil al Hadari – islamist party. contested 2007 parliamentary elections but outlawed in february 2008, ac-cused of planning terrorist attacks.
Justice and charity – outlawed islamist party. calls for the abolition of the monarchy and establishment of shari’a law.
next election local elections – 12 June 2009; Parliamentary – 2012
ongoing disputes Western sahara – Polisario front demands independence for the territory which has been controlled by Morocco since 1975; land border between the two countries is closed, algeria provides material and political support to the Polisario front; spain – existence of spanish enclaves of ceuta and Melilla
Key relations/ treaties Member of the arab league, organisation of the islamic conference (oic), arab Maghreb union. strong ally of the us and european union.
BMi short-term Political risk rating 69.2
BMi structural Political risk rating 66.9
Source: BMI
to an improvement in living standards and boost support for the
government. According to the UN-Habitat regional coordinator
Jean-Yves Barcelo, Morocco ranks second worldwide in terms
of reducing the population of slums in 2000-2010. This was
achieved through a government voluntary policy setting well-
defined objectives supported by appropriate funding, in order
to meet the Millennium Development Goals.
Furthermore, modernization projects have boosted sectors like
tourism, increasing the number of tourists from 2 million a year
in 2000 to 9 million at the end of 2009, while creating 600,000
new jobs. In addition, the government and various banking
institutions will allocate MAD5.2bn for implementation of the
e-government Maroc Numeric 2013 strategy, focusing on greater
integration and wider use of information technology in public
services, which in turn will reportedly create 26,000 new jobs.
Indeed, while we expect the unemployment rate to come in at
9.9% at end-2010 (the same level as at end-2009), over our
2011-2014 forecast period we see the jobless rate dropping to
8.0% on the back of the government’s strategies.
Business environment reformsWe expect Morocco’s achievements in improving its interna-
tional trade relations, alongside the removal of several trade
barriers, to make the business environment more attractive for
foreign investors, which will also be supportive for growth and
jobs. With France and Spain accounting for Morocco’s main
trade partners as well as primary creditors and investors (the
EU accounted for 73.5% of total foreign direct investment in
2009), improving relations with southern European states has
proven beneficial. Morocco has been granted advanced status
by the EU, deepening free trade agreements, to improve the
new Jobs creation paying off unemployment
Source: BMI
-15
-10
-5
0
5
10
15
20
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
f
2011
f
2012
f
2013
f
2014
f
National Average Unemployment Rate
% change y-o-y
trade of manufactured goods and industrial products between
Morocco and all 27 countries in the bloc.
security situation improvingRecent measures to combat terrorism by increasing surveillance
in public places and allocating more resources for investiga-
tions will contribute to improving security in Moroccan urban
areas. Ever since the 2003 terrorist attack in Casablanca, the
Moroccan government has taken strict action to prevent any
further movements of militant Islamists such as the Salafiya
al-Jihadia (‘Jihad for Pure Islam’) and takfirists. 35 defendants
including 6 political figures were convicted in the Belliraj ter-
rorism case last week, adding to the dismantling of 11-member
cell of takfirists in June and another 24-member network with
ties to al-Qaida in April.
24 Business Monitor international ltdwww.businessmonitor.com
LiBYa Q4 2010
economic activity
economy and Budget Looking Good For the Long term
BMi VieWWhile we expect a slowdown in Morocco’s economic growth to 3.6% in
2010, down from an estimated 4.6% in the previous year, we believe this
will be a one-off downturn with average growth over the 2011-2014 peri-
od coming in at 4.0%. Alongside, we expect the fiscal balance to flip back
into surplus in 2010, averaging 2.2% of GDP over our forecast period.
We see Moroccan economic growth slowing to 3.6% y-o-y in
2010, down from an estimated 4.6% recorded last year. The
drawdown in fiscal stimulus will be the key factor, with govern-
ment consumption growth forecast to fall from 11.5% in 2009
to 6.0% in 2010 as a result. Furthermore, the pace of household
consumption growth is also set to fall, with unemployment
(stagnating at 9.0% in 2010) still obstructing the expansion of
the private sector demand.
Beyond 2010, we see economic growth pushing back up to
4.4%, mainly due to an improvement in household expenditure
and gross fixed capital formation, the major two contributors to
growth. Thereafter, growth is forecast to average 3.9% through
to 2014. Household expenditure is expected to grow by 3.8% on
average throughout our forecast period, based on a decrease in
unemployment (especially youth unemployment) and healthy
demographics (1.2% population average growth rate over 2011-
2014). Gross fixed capital formation growth will average 6.8%
over the same period. Owing to weak European demand, imports
will continue to outpace exports, leaving the trade balance in
negative territory and weighing on aggregate economic growth.
Fiscal consolidation aheadAfter slumping into deficit in 2009, Morocco’s budget is expected
to flip back to surplus in 2010, based on a sharp slowdown in
expenditure growth, on the back of a major fiscal austerity plan.
To that end, after recording a 2.1% of GDP deficit in 2009, based
on a worryingly low 2.5% growth in fiscal revenue (averaging
22.9% in the previous three years), the Council of Government
has adopted a bill, encouraging financial supervision of state
spending Weighing on Growth real GdP Growth Breakdown
unemployment, % of labour force, eop [4] 11.1 9.7 9.8 9.6 9.0 9.0 8.8 8.5 8.0 8.0
Notes: e BMI estimates. f BMI forecasts. Sources: 1 Haut-Commissariat Au Plan, BMI. 2 World Bank/BMI calculation/BMI; 3 IMF; 4 Haut-Commissariat Au Plan.
expenditures and public tenders. As such, we pencil in a budget
surplus of 0.6% of GDP for 2010, with income tax revenues
growing by 3.3% y-o-y.
Throughout 2011-2014 budget revenue will grow by 5.8%
on average, supported by the government’s announcement to
implement austerity measures, controlling the wage bill and
reducing public spending on telephony, fuel, travel, and vehicle
and building procurement. Consequently, expenditure growth
will only average 3.6% over the forecast period, generating an
average budget surplus of 2.2% of GDP.
risks to outlookWith levels of uncertainty vis-à-vis the European economy
remaining elevated, there are major risks to our outlook for
Moroccan real GDP growth and budget. Should European de-
mand fail to recover, reduced exports will cut into international
trade in turn, impacting Morocco’s fiscal position and growth.
Tourism and workers’ remittances could also suffer.
Balance of payments
current account position to improve, But Deficit remains
BMi VieWWe expect Morocco’s current account deficit to narrow in 2010 based
on a pick up in goods exports and solid growth in current transfers.
Over the remaining of the forecast period the deficit will persist, but nar-
row to 1.3% of GDP, despite export growth outpacing that of imports,
due the latter’s superior nominal value.
We are forecasting Morocco’s current account deficit to come
in at 4.3% in 2010, narrowing from an estimated 5.0% last year.
The country’s last year was driven by a huge hit in trade, due
to weak demand in the debt crisis-impacted eurozone. Goods
imports fell by 20.2% y-o-y, while exports contracted by 28.1%
compared to the year before, caused by an unprecedented 63.5%
drop in phosphate exports. Nevertheless, a pick up in world
commodity prices and a recovery in European demand over
the coming years should act as a remedy for Morocco’s current
account deficit. Tourism will also be a major contributor to nar-
rowing the current account deficit going forward. We expect the
services balance to grow consistently over our forecast period,
based on continuous investment in the tourism sector.
trade: Key Driver of the Deficit narrowingAlthough from a low base, monthly exports grew by an av-
erage rate of 12.5% y-o-y over the January to May period,
signalling an improving situation regarding Morocco’s trade
solid revenues Going Forward Budget Balance
Source: BMI
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
-10
-5
0
5
10
15
20
25
30
2004 2006 2008 2010f 2012f 2014f
Revenue, y-o-y % changeExpenditure, y-o-y % changeBudget Balance, % of GDP
narrowing trade and current account Deficit Budget Balance
Source: BMI
-25
-20
-15
-10
-5
0
5
10
15
20
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
f
2011
f
2012
f
2013
f
2014
f
Goods Balance, % of GDPServices Balance, % of GDPCurrent Transfer, % of GDPCurrent Account Balance, % of GDP
26 Business Monitor international ltdwww.businessmonitor.com
LiBYa Q4 2010
balance. Encouraged by these figures as well as a weakening
dirham against the euro over the past one and a half months, we
pencil in 10.0% overall export growth in 2010. We see further
downside for the Moroccan currency against the euro, with our
global team expecting the euro to stabilize against the US dollar.
Imports also recorded impressive growth rates in the first five
months of 2010, yet lower than those of exports. We see goods
imports growing by only 4.0% in 2010, with weak domestic
demand (3.0% growth in real terms expected in 2010) holding
down orders. Despite the superior growth rates expected from
exports, the nominal value of exports will remain almost twice
as big, keeping the trade deficit at MAD131.9bn (US$16.4bn).
Beyond this year, we see exports expanding further by 6.75%
y-o-y on average over 2011-2014. With the eurozone expected
to recover to average 1.8% real growth over 2011-2014 period
in after a 4.1% contraction in 2009 and accounting for more than
50% of Morocco’s exports, we see potential for an improvement
in the Kingdom’s trade position. An expansion in Morocco’s ag-
riculture and manufacturing industries will diversify the exports
base, contributing to an increase in volume over the long-term.
On the other side of the balance, imports over the long term will
grow by a smaller 4.8% y-o-y rate, contributing to a narrower
trade deficit of 15.6% of GDP in 2014 compared to 18.2% in
2009. The 10-year plan to build wind energy farms, increasing
the share of the country’s energy consumption from renewable
energy sources to 42%, will reduce the country’s dependency
on oil imports, in turn undermining overall import volume.
tourism outperforming the regionDespite world tourism being strongly affected by the global
financial crisis and economy slowdown, Morocco was the only
country among its North African counterparts to show strong
growth. Compared to the 6.9% y-o-y contraction in tourism
in 2009, the first 5 months of this year have recorded a 11.1%
increase. The monthly data suggests that tourism bottomed out
in August 2009, with the figures having been improving, ever
since November flagging up a 35.0% increase compared to the
same month previous year. Nonetheless, as with goods exports,
the European demand outlook will play a key role in the future
readings of the services balance. For the time being, with tour-
ism accounting for more than 95% of total services, we pencil in
receipts from this sector to see 5.0% growth in 2010. We forecast
a 16.0% expansion of the services balance, closing the year with
6.0% of GDP surplus. Continuous investment plans in the sec-
tor will increase tourism receipts by 15.0% from 2009 to 2014.
Current transfers will return to positive growth in 2010, after
contracting by 5.0% in 2009. In 2010, we see remittances from
Moroccans abroad growing by 6.0% y-o-y, encouraged by the
data for the first five months showing an 11.0% y-o-y rise.
Going forward, we expect remittances to continue at the same
pace throughout 2011-2014, pushed by increasing labour force
migration towards more developed neighbouring eurozone
countries, and a recovery in the economies of the host countries.
risks to outlookAlthough BMI’s outlook for oil prices is one of potential down-
side risks over the medium term, a spike in Brent Crude prices
along a drop in phosphate prices could impact Morocco’s trade
balance. Should this scenario play out, the share of phosphate
exports to total could drop further after halving from 2008 to
2009, while imports could grow faster than our predicted 5.0%,
Eurozone Real GDP Growth, % y-o-yGoods Exports, y-o-y growth RHS
imports Benefitting From Demand pick up Goods imports & Private expenditure, y-o-y chg, real terms
Source: BMI
-40
-30
-20
-10
0
10
20
30
40
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
f
2011
f
2012
f
2013
f
2014
f
Goods Imports, % y-o-y change
Household Expenditure, % y-o-y change
27Business Monitor international ltd www.businessmonitor.com
econoMic outLooK
Domestic politics
sK spat Highlights Diplomatic risks to Business
BMi VieWWe maintain our relatively cautious political outlook for Libya, and draw
attention to several emerging risks. While we believe that Libya has
domestic security under control, its relations with other countries re-
main fraught. In our view, although disputes do not tend to escalate to
conflict, disagreements often affect foreign investment, which in turn
could potentially lower public favour for the government in the long run.
Libya is no stranger to international spats, even with its trade
and business partners. Two key events of this nature in 2010
underline our concerns that the private sector is still highly
vulnerable to government interference, even when these are
entirely separate matters. We also highlight that with foreign
direct investment picking up in several core sectors with con-
current government investment; the spilling over of political
matters into business deals may become more frequent and
deter investors over the long run.
south Korea issue still unresolvedIn July 2010 Libya deported a South Korean national, on the
premise that he was allegedly conducting covert intelligence
while working in Libya. The Libyan government has offered
a resolution in the form of a hefty US$1bn fine, to be paid by
South Korea and more specifically, in the shape of a construc-
29Business Monitor international ltd www.businessmonitor.com
Chapter 3.1: political outlook – Libya
taBLe: LiBYa poLiticaL oVerVieWsystem of Government revolutionary republic or Jamahiriya (state of the masses). Most decision-making power is held
by the revolutionary committees and, ultimately, the head of state. legislative functions are car-ried out by ‘People’s congresses’ at municipal, regional and national level (national General Peo-ple’s congress – GPc), with executive functions held by the corresponding ‘People’s committees’
Head of state leader of the revolution – Muammar Qadhafi
Head of Government Prime Minister and General secretary of the GPc – Baghdadi Mahmudi
last election no national parliamentary elections. local People’s committees elect their own leadership and secretaries of local People’s congresses every four years. delegates from these make up the regional People’s congresses. around 2700 regional representatives constitute the GPc, which elects the General People’s committee (cabinet) every year at its annual meeting. in reality, cabi-net ministers can be moved or replaced by Qadhafi.
Key figures saif al-islam – Qadhafi’s son, head of the Qadhafi international foundation for charity associa-tions; imbarek al-shamekh – deputy Prime Minister; abdelfatah obidi – Public security Minister
Main Political Parties (number of seats in parliament) no political parties. libya’s political system is nominally based on the philosophy put forward by Qadhafi in his Green Book, which combines islamist theory with socialism and a rejection of parlia-mentary democracy and political parties.
extra-Parliamentary opposition? opposition to the regime is limited. the government has effectively neutralised the threat from islamist militant groups. the establishment of non-governmental organisations (nGos) is allowed, although they must conform to the goals of the revolution. trade unions do not technically exist, but numerous professional associations are integrated into government structures and may send delegates to the GPc.
ongoing disputes us – switzerland – relations frozen following arrest of one of Qadhafi’s sons in geneva in 2008. the two swiss businessmen were released in early 2010; compensation for victims of various libyan-sponsored terrorist attacks and organisations (such as ira); niger – libya’s alleged sup-port for tuareg rebels in niger border areas; israel
Key relations/ treaties relations with West have been improving since the 2003 dismantling of nuclear programme and renouncement of support for international terrorism. strong links with fellow arab states (member of arab league, organisation of the islamic conference, arab Maghreb union) and africa (african union, african development Bank). Member of un security council (2008-09)
BMi short-term Political risk rating 65.8
BMi structural Political risk rating 59.5
Source: BMI
tion project of this value. Coupled with a token warning that
South Korean firms in Libya will face restrictions otherwise,
we believe that South Korea is likely to pay the fine to protect
its operations in the country. However, the fact that the matter
has reached such unwelcome heights further supports our view
that the Libyan government is not averse to resorting to drastic
measures – even when this has negative implications for both
diplomacy and foreign led business ventures.
risk to outlookWe also believe that Libya’s fractious dealings with other
countries, even those on which it is on relatively amicable
terms, could lead to internal security issues in the long run, in
turn pulling down our already weak long term political risk
rating of 59.5 out of 100. Given that Qadhafi appears to be in
good health and has not alluded to stepping down, or even his
eventual succession, we believe that he is likely to stay in power
for the medium term, maintaining our current rating. Those in
favour of reform may grow frustrated with sporadic progress in
economic development and attempt to form opposition groups
but the security infrastructure will ensure that their success is
limited. Under the current regime, this would be regarded as
dissent and would likely be quashed, fuelling further tensions
and raising internal political risks. Our long term political risk
ratings favour a democratic system in which discontent can be
resolved legally and non-violently, even if it means lower day-to-
day policy stability (and a lower short term political risk rating).
Nonetheless, Qadhafi’s tendency to interfere in the private sec-
tor is unlikely to mellow, and he will continue to use business
issues between Libya and its trade partners as political leverage.
Therefore, we hold to our view that a key downside political
risk for Libya is the unpredictable nature of its leader, and the
far-reaching implications of seemingly minor diplomatic disa-
greements. The two altercations this year (with Switzerland and
South Korea) point to frequent discord between Libya and its
investors. Both matters reached near disaster in international
relations terms, and underscore the country’s low political and
business environment risk ratings.
taking the rough With the smoothOn the internal front, we believe that there are no serious threats
to domestic stability in the short to medium term. The removal of
economic sanctions in 2004 and the subsequent rise in oil exports
drove popular support for fairer income distribution and to this
end, the government’s plans to invest heavily in infrastructure
should placate any discontent arising from this. After years of
sanctions, the strong growth in real GDP and GDP per capita
will only improve living standards.
Therefore, we believe that the government is likely to view
its public sector investments as a tool to retain public favour,
particularly since we also expect employment levels to pick up.
Also, if the state adopts a more friendly approach to its foreign
partners, the momentum for private sector growth will continue
to bolster public opinion and reduce the threat of militant group
formation, which usually arises from the lack of opportunities.
30 Business Monitor international ltdwww.businessmonitor.com
Morocco Q4 2010
economic activity
Market Liberalisation Will support Long term Growth
BMi VieWWe view Libya’s efforts to encourage foreign investment in the oil sec-
tor and attempt to diversify the economy positively. In the short-to-me-
dium term, we believe that higher oil prices and rising oil exports will
have the greatest impact on growth. In the long run, the privatisation of
strategic sectors will reduce market inefficiencies and increase output,
providing ongoing momentum for GDP growth.
A combination of UN sanctions and decades of under-investment
by the government has meant that Libya’s oil output has only
been a fraction of its proven reserves. Bringing in outside ex-
pertise through either entirely private or part-private ownership
programmes are now considered by the government to be the most
optimal ways of achieving higher oil production and revenues.
economic Growth still oil DrivenLibya’s relative economic isolation buffered it from the worst of
the global financial crisis, increasing its appeal to foreign inves-
tors looking for new growth opportunities. Our real GDP growth
forecast for 2010 is 3.8% y-o-y, which is largely attributed to
an increase in oil prices. We believe that government efforts to
privatise some state-owned enterprises and attract foreign inves-
tors, particularly in core sectors like oil and gas, infrastructure
and transport, should be good news for the economy. Indeed,
market liberalisation should help erode structural inefficiencies
and foster job creation in the private sector. Going forward, we
see GDP growth reaching 5.8% in 2015, although as mentioned,
higher oil exports are expected to form the bulk of this growth
– contributing 2.5 percentage points.
We also believe that consumer spending will gain on the back
of rising investments in the oil and construction sectors and the
resultant job creation. Although we forecast that private con-
sumption will contract by -16.7% in 2010, we expect spending to
rebound in 2011, reaching 7.0% growth in 2015 and accounting
for 2.9pp headline economic growth.
On the external front, the trade balance will stay firmly in sur-
plus, helped by a slowdown in import growth from 10.0% in
2010 to 6.0% in 2015 and alongside a pickup in export growth
from 1.5% in 2010 to 4.2% by 2015. The rise in exports will
widen the trade surplus, raising its contribution toward final
a change For the Better contribution to real GdP Growth, pp
BMi VieWWe hold our view that, owing to Tunisia’s authoritarian but stable gov-
ernment, the country will remain politically stable for the medium term.
There is no strong opposition group to the current government and any
signs of dissent, even news coverage that could cast the regime in a
negative light, are quickly stifled. However, we note that rising unem-
ployment levels among graduates will form a base of public discontent,
which presents a risk to political stability in the long term.
Grumpy GraduatesThe latest data release from the institute of statistics in Tunisia
shows that unemployment rose to 13.3% in 2009, from 12.4%
in 2008 and which we project the level will reach 15.2% by
2014. Unemployment among graduates was recorded at 21.7%
in 2009, and the government expects this to fall to 13.6% by
2014. We are not optimistic that this is realistically achievable.
The jobless rate, including graduates, has been on the rise and
has seemingly gone unaddressed for decades in spite of official
claims to be prioritising the problem.
In our view, the government has not put forward sustainable
policies for reducing unemployment significantly in the me-
dium term and therefore growing dissatisfaction among youth
will continue unabated. In a conference held by the Ministry
of Employment and Vocational training in July 2010, the state
championed entrepreneurship as a potential driver for employ-
ment and focussing on reforming the education system to ac-
commodate relevant market skills, including languages and IT.
For the current unemployed, the outcome of this meeting will
make little difference to their immediate job prospects, with most
graduates spending up to three years looking for work at present.
We see this as further evidence whatever policies the govern-
ment is taking to encourage private sector expansion, which
would otherwise create jobs, are not working- certainly not fast
enough. Given that the Tunisian government is keen to raise
exports, tourism and promote growth in high value sectors, we
believe that bringing unemployment down will require a more
pragmatic approach to both realigning education with business
needs in mind.
But no threat to social stability Yet President Zine El Abidine Ben Ali’s tight grip on the media will
ensure any form of uprising is censored to prevent the potential
for a wave of small scale protests erupting around the coun-
try. Given the stronghold the government has on free speech,
protests are unlikely to occur. However, the next presidential
elections are due to take place in 2014, and according to the
current constitution, at 78, Ben Ali will be three years older than
the maximum age limit to run for the position. If he amends
the constitution for a second time to his favour and goes on to
win the next election, we believe that the pace of change for
lowering unemployment will remain slow or stagnate, in line
with previous years.
Despite the potential for long term public discontent and even
the possibility of protests, the government has thus far shown
no signs of urgency in linking the private sector with university
programmes to correct the misalignment between private sec-
tor needs and education. A major downside risk therefore, is
that the young unemployed are more likely to support opposi-
tion parties – particularly when by 2014, the date of the next
scheduled presidential election, the current incumbent will be
ineligible to stand.
risks to outlookWe also believe that 2014 could also present an ideal opportu-
nity for the discontent unemployed to bring about a refreshing
change of government, particularly if Ben Ali accepts the current
terms and does not run for office again. Aside from the issue of
succession, we believe that simmering unrest among the youth
could form a destabilising base during that time.
However, this could require substantial democratic progress over
the coming years. Tunisian politicians will be watching events
in Egypt closely: an increasingly free political situation there
33Business Monitor international ltd www.businessmonitor.com
Chapter 4.1: political outlook – tunisia
could encourage agitation in Tunisia. Without such a trigger,
the presidential election is more likely to bring a senior Con-
stitutional Democratic Rally (CDR) figure to power, resulting
in no real substantive policy shift. Tunisia is one of the most
closed political societies in the MENA region (already the
world’s laggard as far as democracy is concerned). As such we
do not expect it to lead any regional move towards democracy:
it will more likely follow a more influential country like Egypt.
Long-term political outlook
political challenges For the coming Decade: scenarios For political change
BMi VieWTunisia boasts one of the most stable political climates in the region,
and we forecast relatively tranquil conditions for the foreseeable future.
Although we highlight four potential sources of political instability, we
do not expect a fundamental rupture in the country’s political develop-
ment in the coming decade.
Tunisia consistently ranks the highest in the MENA region in
our proprietary short-term political risk rating, typically scoring
high in the policy-making process and security/external threats
categories. This in large part reflects Tunisia’s strong execu-
tive and relatively efficient bureaucracy and effective security
apparatus. The opposition is weak and fragmented, the media
strictly controlled, and dissent subject to systematic repression.
When combined with relatively strong economic foundations
and few international constraints on government, this makes for
a high degree of political stability in the short term.
In the longer term, however, authoritarianism is likely to be a
liability rather than a strength. Tunisia scores just 40.3 out of
100 in the ‘characteristics of polity’ category of our long-term
political risk rating, which measures the openness of the political
system and the level of democratic representation. Within this
category, Tunisia scores particularly low in the ‘constitutional
framework’ sub-category, where it scores 0 for media freedom
and independent judiciary and 1 for political parties and civil
society. These shortcomings represent the biggest threat to po-
litical stability going forward, in our view, given our underlying
assumption that undemocratic systems of government are more
34 Business Monitor international ltdwww.businessmonitor.com
tunisia Q4 2010
taBLe: tunisia poLiticaL oVerVieWsystem of Government Presidential republic. 189-seat parliament, 20% of seats reserved for opposition.
Head of state President Zine el abidine Ben ali – five year term, no limit to renewal
Head of Government President Zine el abidine Ben ali; Prime Minister Mohamed Ghannouchi
last election Presidential – 26 october 2009
Parliamentary – 26 october 2009
composition of current Government all ministers appointed by president and come almost entirely from the ranks of the rcd.
Key figures President Zine el abidine Ben ali – exercises considerable control over executive, which in turn dominates parliament (latter never originates legislation and passes almost all bills put forward by executive); Minister of finance – Mohamed rachid Kechiche; Minister of defence – Kamel Mourjane
Main Political Parties (number of seats in parliament) democratic constitutional rally (rcd) – 161 seats. Previously tunisia’s only political party, cur-rently controls 75% of parliamentary seats. Broadly left-wing, socialist ideology (member of the socialist international) but functions largely to support President Ben ali.
Movement of socialist democrats (Mds) – 16 seats. founded in 1978. nominally an opposition party but officially supports the rule of President Ben ali.
Party of People’s unity (PuP) – 12 seats. Won 3.4% of the popular vote in the 2009 election.
unionist democratic union (udu) – 9 seats. arab nationalist party.
Movement ettajdid – 2 seats. evolved from the tunisian communist Party.
social liberal Party – 8 seats. liberal democratic party.
extra-Parliamentary opposition? opposition to government (including human rights groups and nGos) tightly controlled. islamist terrorists have targeted government targets, although attacks have been far less frequent and militant groups far less visible than in algeria.
next election Presidential and Parliamentary – 2014
ongoing disputes none
Key relations/ treaties Member of arab league, arab Maghreb union, organisation of the islamic conference, african union, african development Bank (currently headquartered in tunis), Wto. strong economic and political ties with europe – member of euro-Med Partnership. Political ally of the us.
BMi short-term Political risk rating 79.2
BMi structural Political risk rating 68.6
Source: BMI
vulnerable to political unrest in the long term than liberal ones.
That said, the overall long-term political risk rating (68.6/100)
compares favourably with the rest of the region, reflecting the
country’s relatively strong institutions, high standard of living,
and homogenous society.
threats and challenges to stability1. Political Succession: President Zine el Abidine Ben Ali is
now in his last term as president, having achieved another crush-
ing victory in the presidential election of October 2009. Under
current rules, which bar anyone older than 75 from standing for
presidency, he will be ineligible to run again in 2014 (Ben Ali is
73). While we do not discount the possibility that he may amend
constitution to allow him to govern for another term – there is
certainly precedent for this, given that in 2002 he abolished term
limits for presidents – we maintain that political succession in
the coming decade is very probable. The president will be 78 by
the time of the election and there have been growing rumours
that he has prostate cancer.
Speculation currently surrounds the President’s son-in-law,
Sakher Materi, who has taken on a senior role in government.
However, he has repeatedly denied having political ambitions,
and at only 30 years of age he will probably be considered too
young for the top job. Crucially, he also lacks close ties to the
military-security establishment or patronage networks within
the RCD, where many oppose the idea of family succession.
As things stand, the list of likely candidates include several
senior members of the politburo, including the former defence
minister and newly appointed foreign minister Kamel Mourjane,
RCD’s general secretary Mohamed Ghariani, and Prime Minister
Mohamed Ghannouchi. The first is the leading contender, in our
view, given his rising status in recent years, which indicates that
he enjoys the confidence of the ruler. Yet none of these figures
has a particularly high profile in comparison with the president,
and Ben Ali’s dominance of the political scene risks creating a
vacuum upon his eventual exit.
2. Authoritarianism: Authoritarianism is a key pillar of Ben
Ali’s regime, and as such it poses two main threats to stabil-
ity. First, the ongoing suppression of dissent runs the risk of
further fuelling resentment and opposition to the government,
increasing the potential for major political upheaval. Groups
such as Human Rights Watch and Amnesty International have
repeatedly accused Tunis of suppressing internal dissent and of
muzzling the domestic press. Tunisia consistently scores low in
Freedom House’s political freedom and civil liberties ratings – 7
and 5 respectively (on a scale of one to seven, with seven being
the least free), ranking ‘not free’. Despite the rising chorus of
disapproval from the international community and promises of
change from the regime, there is no indication it will change
tack any time soon.
The government has historically justified its tight controls on
the grounds that it is necessary to avoid the kind of conflict
witnessed in Algeria, where the authorities fought a bloody
civil war with Islamist militants. However, denying Islamic
groups an outlet for the expression of legitimate grievances
and opposing political views could actually strengthen such
groups in the longer term. Secondly, human rights issues have
proved a sticking point in diplomatic relations with the EU and
other Arab states. There is a possibility – albeit distant, in our
view – that political change will be forced from abroad, for
example, through the withholding of ‘advanced partner’ status
that is sought from the EU.
3. Economic Pressures: To the extent that Ben Ali has pinned
much of his legitimacy on his effective economic stewardship,
long-term political stability remains vulnerable to adverse eco-
nomic shocks. While our outlook for the Tunisian economy is
bright – we are forecasting headline real GDP to average 5.6%
for the remainder of the forecast period (2011-2019) – the country
is plagued by relatively high rates of unemployment, especially
among youth. This was made manifest in 2008 when large-scale
protests erupted over rising inflation and a lack of employment
opportunities. We project the unemployment rate to reach 15.1%
in 2010, up from 14.7% the year before, and exceed 10% for the
rest of the decade. Accordingly, structural unemployment will
remain a permanent thorn in the government side, although we
do not expect it to threaten the regime’s survival.
4. Islamist Militancy: In comparison with Morocco, and particu-
larly Algeria, the terrorist threat appears very slight in Tunisia.
Islamist militant activity has largely abated since the govern-
ment’s crackdown in the early 1990s and again in early 2003.
Like governments in Algeria, Tunis has taken a zero-tolerance
approach to radical Islam, particularly after the 2003 bombing
of a synagogue on the island of Djerba,. The constitution bans
the participation of religious parties in politics, and outward
symbols of religion are discouraged – women wearing the
hijab are banned from entering public buildings, for example.
With Ben Ali resolutely opposed to the existence of an Islamic
opposition, a change in the law is highly unlikely while he re-
mains in power. The longer term danger is that Islamist groups
channel frustrations about high unemployment and political
35Business Monitor international ltd www.businessmonitor.com
poLiticaL outLooK
exclusion to recruit new members to their cause. In addition,
the improving security situation in Iraq could result in militants
returning home to join or form local terror networks focusing
on domestic targets.
scenarios For political changeIn our view, the main bifurcation in Tunisia’s political develop-
ment is towards (a) increasing authoritarianism or (b) greater
political liberalisation, both of which will likely occur within the
established constitutional framework. We assign slightly more
weight to the former given that the incumbent will retain a say in
charting the way forward, either directly through his re-election
in 2014 or via the appointment of a like-minded successor.
More Authoritarianism: Our core scenario is for the regime
to continue to stall on political reform or even revert to more
authoritarian ways of governing. This is in keeping with the
trend of the past decade that has seen repression progressively
extended beyond the illegal Islamist and leftist groups to the
legal secular opposition, human rights activists, and regime
critical journalists. Ben Ali has shown increasingly autocratic
tendencies since coming to power, personally appointing min-
isters and using cabinet reshuffles and other tactics to ensure
that no figure within the government builds up a base support
to challenge his position. We believe similar authoritarian
tendencies can be expected of Ben Ali’s successor. It can be
presumed that the President’s pick will be status-quo oriented
since he (or less likely she?) will need the endorsement of the
military-security establishment as well as the dominant factions
within the RCD. These have a vested interest in preserving the
existing political set up.
Political Liberalisation: Our best case scenario would be a
move towards a more competitive political landscape and a
strengthening of basic political freedoms, on the basis of our
view that liberal democracies are the most conducive to long-term
stability. At a minimum this would entail the easing of restric-
tions on political activism and the media, more transparency in
government, and an overhaul of the judicial system.
The chances of this happening under the current regime are
remote, but not unthinkable. An impetus could come from
Brussels, which has made good governance a key tenet of its
preferential trade agreements with ‘neighbour’ countries. Several
EU officials have threatened to withdraw the offer of ‘advanced
partner’ status if the government does not make good on its
promises of political liberalisation and respect for human rights.
This would put Tunisia at a significant disadvantage relative to
its main competitors in Eastern Europe and Morocco, and may
induce the government to change its policies for appearance sake.
However, any concessions that follow from external pressures
are likely to be of little substance. The West is equally (if not
more) concerned about terrorism and immigration as it is about
human rights, and as a result it may turn a blind eye to periodic
lapses in its democratic conduct.
36 Business Monitor international ltdwww.businessmonitor.com
tunisia Q4 2010
economic activity
GDp Growth expected to reach 3.9% in 2010
BMi VieWTunisia’s economy appears to be recovering well after the fall in euro-
zone demand for its exports and tourist sector gave way to a slowdown
in GDP growth in 2009. We believe that low interest rates and rising
private consumption will drive economic growth in the medium term.
Government at the Helm in 2009During the worst of the global economic downturn, Tunisia’s
GDP growth slowed down but did not contract, largely driven
by government spending. We estimate that this rose to15.4%
of GDP in 2009 – a 5.5% increase in real terms from 2008 and
outpacing the growth in private consumption.
We estimate that the government spent TND17.2bn in 2009 – a
7.1% rise on 2008 – with the proportion of capital outlays rising
modestly from 20.8% to 21.0%. Latest data given by the Tuni-
sian Central Bank indicates that real GDP growth increased by
1.9% q-o-q during Q409. In the previous quarter of 2009, the
country experienced economic growth of 2.6%, going against
global trends.
We expect the growth in GDP to rise from an estimated 2.4%
y-o-y in 2009 to 3.9% y-o-y in 2010 before making a full re-
covery to a 5.8% growth by 2011. The reliance on government
spending should ease as exports increase (which we estimate
will contribute 1.7 percentage points toward GDP during 2010)
while private consumption will contribute 2.2pp toward real
GDP growth in 2010. On the back of rising exports, we believe
that Tunisia’s longer term growth prospects are also favourable
– with GDP expansion expected average 5.4% over the next
five years to 2014.
Focus shifts to private consumption Private consumption increased by an estimated 3.0% in 2009.
Our forecast indicates that private consumption will undergo a
recovery with a 3.5% increase in 2010, making a higher contri-
bution to GDP growth of 2.2pps. By 2014, private consumption
will contribute 3.0pp toward economic growth.
Heading up GdP Growth outlook (%)
Source: Institut National de la Statistique, BMI
0
1,000
2,000
3,000
4,000
5,000
6,000
0
1
2
3
4
5
6
7
2004
2005
2006
2007
2008
2009
e
2010
f
2011
f
2012
f
2013
f
2014
f
Real GDP Growth (%), LHSGDP per Capita (US$), RHS
37Business Monitor international ltd www.businessmonitor.com
analyst: roxy nader, filip tarleaeditor: liz Martinssub-editor: delaina Haslamsubscriptions Manager: yen lyMarketing Manager: Joanna ashtonproduction: lisa church, chuoc lampublishers: richard londesborough, Jonathan ferozecopy Deadline: 12 august 2010
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