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Foreign Investors Feel the Pinch in Turkey

Turkish authorities in recent months have taken steps to reign in what they believe are activities that harm the Turkish economy. Global banks such as Goldman Sachs, Barclays and UBS have been sanctioned by the banking regulator and the Istanbul stock market.

Observers say that the sanctions have come as a reaction to the weakness of the country’s currency and concern by the government that the coronacrisis and a plunge in tourism revenue will exacerbate the troubles of the lira.

Read more in the following article that was posted on finews.ch in German.

The Mediterranean: Yet Another Year of Challenge

With this brief overview, the PoliticsBlog is picking up the thread on events around the Mediterranean, going into a new year bound to be challenging. Many countries bordering on the Mediterranean have strong links to Russia and therefore are indirectly affected by the war in Ukraine. Withstanding any negative impact will be a test to their resilience.

One of the side effects of the invasion of Ukraine by Russia was the shift in focus away from previous hotspots – for instance Sudan, Libya, or Ethiopia. Regionals wars, military coups, famine and drought lost the attention of the general public and decision-makers occupied by the destruction of a large European country and the potential widening of the conflict.

Unfair or not – this shift is manifest and real. And all the same, the many countries around the Mediterranean and in the Northern half of Africa have huge challenges to deal, challenges that are worth looking at. The following overview attempts to highlight a few of the hotspots along the shores of the Med that may or will make headlines this coming year. In a second part, the PoliticsBlog will look at some of the African nations’ developments.

Turkey

The NATO-member and bridge between Europe and Asia is due for what likely will be the last election for President Recep Tayyip Erdogan. His hold on power seems fragile following the massive economic difficulties of the past years, difficulties that are far from over and that strongly impacted on the livelihoods of ordinary citizens. With surging prices and high interest rates, the times are hard for the Turks. The government also faced the huge task of accommodating some 5 million Syrian refugees. Under such circumstances, having to go to the polls is not an enviable task for any government.

Erdogan is a shrewd tactician and pounced on the opportunity the war presented him – despite the complicated relationship between Russia and Turkey. Being on reasonable terms with the Russian president, Erdogan quickly positioned himself as a possible interlocutor between Ukraine and Russia and brokered the deal that allows the export of such vital goods as wheat from the region. He also pounced on the chance to extract a maximum price for the accession of Sweden and Finland into NATO, given the need of unanimity. The president has arguably had a better time dealing with foreign affairs than matters closer to his home. But elections tend to be fought over food prices, wages and inflation and less so over things far from home.

The question therefore is whether his maneuvering against his arguably strongest opponent – Istanbul city chief Ekrem Imamoglu of the CHP – will suffice to keep his AKP in power. The pretty transparent judicial attack on Imamoglu on allegations of insulting functionaries of the state, might backfire and help the opposition gain popularity.

The coming months will show how effective Erdogan has been in kindling a patriotic sentiment among those voters who could be tempted to vote for the opposition. This obviously also hinges on the question who can and will stand for the coalition of parties challenging Erdogan’s AKP. The elections are slated for June.

Tunisia

A country where the votes already have been counted is Tunisia. Though, of course, that was a fairly limited exercise by any standard. Fewer than one in ten voters bothered to take part on December 17, 2022. The parliamentary elections called by President Kais Saied had been boycotted by the opposition an even supporters of the president seem less than enthusiastic. This lackluster event doesn’t bode well for the country, where the Arab Spring was started.

Where once a spirit of democratic awakening swept away the old dictator, people seem to have descended into a sense of depression. Said an old xxx professor, had dissolved parliament in March 2022 and put in place a new constitution in the summer in a bid to break a political stalemate, combat corruption and kickstart an ailing economy hurt by the pandemic. While the maneuver of Said originally had been welcomed by many, he evidently has now lost the support of most people. Reports of a wave of migration by the young to Europe are a clear indication of what the mood in Tunis is like.

The situation is complicated by the role of Ennahda, the Islamic party that has been part of several coalition governments ruling Tunisia since Ben Ali was kicked out of the country. The group is said to have links to the Muslim Brotherhood, but has maintained a more moderate profile under long-term leader Rached Ghannouchi. When Saied dissolved parliament, he also removed Ghannouchi from his role as speaker. Essentially, there seems currently a lack of credible political force able to move the country out of the lethargy.

Lebanon

But the troubles of Tunisia bleak in comparison to those besetting the Lebanon. Situated in a region with a history of never-ending conflict between nations, religious and ethnic groups, this is a nation with little attention granted yet with a particularly unfortunate combination of problems. With Israel to the South and Syria to its East and North, Lebanon has not particularly “easy” neighbors by any standard, but what has made life even worse are the perennial tensions between Sunni and Shiite Islam and the implication of the sponsors of respective groups. To make matters worse, the local elites stand accused of having failed the population.

The most blatant example of this failure was the explosion of a silo in the harbor of Beirut in 2020. The absence of a capable government, the situation was deemed so precarious that French President Emmanuel Macron travelled to Beirut to promise his help, but also made clear that he wouldn’t entrust his money with the Lebanese government. The government of Prime Minister Hassan Diab resigned and Lebanon was left with an interregnum of 13 months, before a new prime minister, Najib Mikati, mustered the courage to take over. Elections held last summer raised the hope for a step towards a more stable future. Hezbollah and the allied groups lost their majority in parliament, while the reformist Lebanese Forces Party gained.

Currently, Lebanon is without a president and has a caretaker government.

Libya

Once a stable dictatorship under Muammar Ghaddafi, today Libya is better known for its failure to conjure up a coalition that might govern for all in this country rich in natural ressources. It is also an example of a country where the influence of foreign players hasn’t always been to the advantage of the population. Essentially, Libya has two rival political factions slugging it out over who can form a government. Fathi Bashagha for the Tobruk-based House of Representatives and Abdul Hamid Dbeibeh for the Tripoli-based Government of National Unity are the two key personalities.

Behind the politicians are the armed militias, the best-known being the Libyan National Army of Khalifa Haftar. And all the militias and armies are supported by one or more foreign powers, including Turkey, Qatar, Russia, the Emirates, Egypt. It’s a complicated situation and what’s more, the country relies on food imports from Ukraine and its neighboring bread baskets.

Libya thus is a very good example of a post-dictatorial countries descending into protracted chaos, where the needs of the population enjoy almost no significance. Anybody’s guess thus for how much longer this situation might continue.

Feverish Political Debate Accompanies Tunis Turnover

Kais Saied, the president of Tunisia, at the end of March dissolved the parliament. The move did little to pacify an increasingly hostile political conflict between two bitterly opposed groups. Ten years after the revolution, this Mediterranean country seems uncertain about its future, writes our correspondent in Tunis./IN

Speaking to the various political groups in Tunis about the president’s decisions it becomes abundantly clear that there is no consensus left in a country that was hailed for its relatively peaceful transition from One-Man-Rule to democracy a little over ten years ago. Add to this the concern over the economic wobbles of the country and the close contact with countries such as Egypt, and it is obvious that the situation should be watched closely.

The two sides of the coin are pretty easily explained. And, not surprisingly, it has a lot to do with the former ruling party of Ennahda, the Islamic grouping led by Rached Al-Ghannouchi. When Kais Saied was elected in 2019, it was on a bill to clean up politics and combat corruption. This pitched him against the party of Al-Ghannouchi, the strongest grouping since the fall of Ben Ali in 2011. They feared that Saied would move against them – probably rightly so.

Suspending Parliament Followed by Protests

Last summer, the president made his hitherto most important move in suspending parliament and in going after some of his foes. This led to street protests organized by a coalition of parties – the Ennahda, the Heart of Tunisia and the Workers’ Party. They said that the move was akin a coup d’état which they would never accept. The protests however never reached a substantial enough following because a large swathe of the political elite and also voters in fact supported the president in his move against what he says is a corrupt system.

Hence, and given the threats from the Islamic former elites, the new president seems to enjoy a lot of support, something that helped him through the ensuing impasse. When the trumped opposition parties in parliament opted to meet within a digital framework, i.e. in contraction to the president’s order, he saw fit to step in and dissolve the parliament. It was now the president’s turn to accuse his opponents of an attempted coup d’état that he needed to prevent.

The International Dimension

What this leaves the country with is an extremely divided political sphere, with one side removed from the political arena, due in large part their performance in government, and the other adamant that the old political elite will not return. Where this conflict will lead in the long run is yet to be seen, but so far it seems that the president is firm in his seat and that the opposition has not been able to gather enough support to overturn the decisions made by President Saied.

What worries people is the international dimension of this infight. While the old Islamist government clearly had its sympathies with Turkey and Qatar – the sponsors of the Muslim Brotherhood – the current president is seen to be closer to Egypt, the Emirates and Saudi Arabia. This dimension is not unique to Tunisia in this region, and its close neighbor Libya could say a word or two about being ripped apart between conflicting interests. So Tunisia knows what’s at stake.

Egyptian Loan Gives President Some Breathing Space

Add to this the economic woes of this nation. A situation that has worsened sharply since the outbreak of war in Ukraine, with observers worrying about social unrest should the situation not improve. Economist Ezzedine Saidan told the Blog that Tunisia essentially was unable to pay its debt and that the International Monetary Fund would pressure Tunisia to restructure the debt before agreeing to a new deal. Saidan added that the IMF was firm in its belief that Tunisia needed to execute reforms to boost the economy and its public finances. If however the government fails to reach a deal with the IMF, it will probably face a liquidity crisis.

To alleviate the pressure, Egypt’s African Export and Import Bank, the Afrixim Bank, agreed to a $700 million loan, running over 7 years to finance the budget. This deal gave the president some valuable room for maneuver.

What his supporters are saying is that the road map designed by the president should be followed. The plan is to organize a popular referendum on July 25 followed by legislative elections in December. They urge the president to follow this path to safeguard the Tunisian choice of a non-sectarian democratic path, not guarded by either a king or the military.

Briberies Cloud the Upcoming Elections in Lebanon

Lebanese voters see the crippling economic crisis that has afflicted the country as a reason to hold officials accountable in the upcoming elections. They hope for change, but reality suggests that there won’t be any forthcoming, writes our correspondent in Beirut.

“Electoral bribery is not new in Lebanon, and with the declining value of the currency and the deepening economic crisis, bribery will again be the basis in the upcoming elections and play a major role in buying consciences. This is well known in the country.” The head of the Lebanese Election Supervision Commission, Judge Nadim Abdel-Malik, says that his commission will not be able to combat the reality of bribery even though there is no lack of will and determination.

It is a case of historical fact that besets Lebanese society, and it is difficult to control, pursue, or end this practice. The elections are the first to take place after the popular uprising in 2019-2020. The citizens protested in favor of fundamental reforms to the political system. And yet, despite the dramatic collapse of the country’s institutions, electoral bribery remains a hinder to equal opportunities, fair results and a parliament reflecting the will of the people.

In fact, it looks as if the deteriorating living conditions have led to an increase in electoral bribery and its effect on influencing the behavior of Lebanese voter, according to election observers. The Lebanese Association for Democratic Elections (LADE) has seen an increase in the frequency of electoral submissions and bribery compared with previous electoral cycles, according to its CEO, Ali Selim.

Bribes in Times of Crisis

Bribes and promises of benefits for voters occur in greater frequency now that Lebanon is facing a huge economic crisis. Four out of five citizens have been reduced to live in poverty, according to United Nations reports, while the unemployment rate has risen to above 40 percent. The Lebanese pound has plunged against major trading currencies – for instance from a previous 1’500 pounds per dollar to 27’000 pounds per dollar, according to the latest exchange rate.

LADE has noted significant offers for sanitary products such as napkins for women in the Bekaa valley, and the distribution of baby milk in the north of the country. Other candidates have donated money to get roads opened after snow storms, paid for the distribution of food rations, established lunch and dinner banquets, while others paid for the removal of garbage.

The Electoral Law Is the Root Problem

Even though it is well established that electoral bribery negatively impacts the integrity and transparency of the electoral process, affecting the will of the voters, while detracting from the principle of freedom of voting, the Lebanese electoral law includes a circumvention of the prohibition of electoral bribery.

Article 62 of the electoral law, which relates to electoral bribery, is divided into two paragraphs. The first states: “Prohibition of obligations and expenses that include providing services or paying amounts to voters, during the electoral campaign period, including, but not limited to, presentations and in-kind and cash assistance to individuals. charitable, social, cultural, family, religious, sports clubs and all official institutions.”

The second paragraph of the article however lifts the ban on the above-mentioned submissions and aid, “if they are submitted by candidates or institutions owned or managed by candidates or parties who have been presenting them in the same size and quantity on a regular basis, for at least three years before the start of the electoral campaign period, in this case, the payments and aid provided during the electoral campaign are not considered subject to the electoral ceiling.”

The head of the Lebanese Election Supervision Commission describes the second paragraph as a bribery legislation in disguise and stressed that the commission had repeatedly demanded the abolition of this paragraph. Abdul-Malik added that “for our part, we rely on the first part of the law to perform our oversight role on the basis of it, but on the other hand, we have not yet received any complaint in this regard, although we see the activities of all candidates, parties and associations, we see in-kind aid and hear about financial amounts and contributions, vouchers, services, and more.”

A Lot of Pessimism, and a Ray of Hope

The supervisory board has issued a clarification of the content of article 62, in which it considered that such submissions listed must be characterized by continuity and maintain a similar level in terms of quantities, quality and the resulting expenditures. The supervisory board is supposed to be the one that monitors such matters, said Salim, but after the recent amendments to the law, he sees that the committee now requires at least one year of work for the implementation.

The commission is formed six months before the day of the elections and its tasks end six months after the elections. “And between the two dates, years pass in which no one monitors aid and donations, and therefore no one who monitors. How do they ensure the quality of the submissions? And who confirms its continuity, according to what the law stipulates?” Salim asks.

The spectrum of the parliamentary elections is clouding the Lebanese atmosphere, politically, socially and economically. In countries where sectarian divisions are fierce, and their system based on the principles of consensus, balance and quotas for the various groups, the outcome of elections are heavily biased by the distribution of religious and ethnic adhesion. Activist Rana Al-Hayek believes that “the upcoming elections will not change anything, but will return the same class to power, and therefore it is null and void.” Her pessimistic outlook may be a reflection of how difficult the situation has become in Lebanon and doesn’t bode well for the future of its body politic.

In a quick tour of the Lebanese street, a large number of citizens indicated that their difficult conditions necessitated them to elect someone who would provide them with financial and personal services that would help them face the hardship. They were ready to re-elect the same class of politicians.

Not all have given up hope though. Akram Zaarour, a journalist in Beirut, asserts that “the upcoming election will witness an unprecedented popular momentum because the people will no longer be deceived by lies and bribes, and the difficulties they face have taught them a lot.” 







	


	





	

		
Not Much Progress in Tripoli
	


	
	

		

The noise emerging from Libya’s capital doesn’t bode well for the future of the war-ravaged yet oil-rich country. With factions and tribes fighting over power, the needs of normal people seem to be ignored entirely.





Speaking to people in Libya about Libya is a treacherous enterprise, because you inevitably get sucked into the eternal game of power between the elites of this vast country on the Mediterranean. While all international observers are pretty clear about the need to get an established and recognized government in place to allow for progress on all fronts, nobody seems to hold the key to get this process going.





Following the demise of the old dictator, Muammar Ghaddafi, the country descended into violent strive between east and west, with shifting allegiances and international supporters. In recent years, the main global players involved in the armed struggle were Turkey and its allies on the side of the central government (internationally recognized) and Russia, with General Haftar coming fairly close to capturing the capital, before the Turkish military hardware and battle-hardened fighters from Syria stopped his advance.





Two Governments, None Too Powerful





Today, the eternal squabbling is continuing, but at least mostly in a non-violent context. At the moment, Libya again has two governments, one under Abdul Hamid Dbaiba, the other under Fathi Bashaga. Dbaiba has been there longer and was meant to oversee elections on December 24, 2021. They never happened and instead parliament kicked the old government out and voted in Bashaga on February 10, 2022.





Only for Dbaiba to refuse to leave and announcing that elections were going to be held in June. Both Dbaiba and Bashaga seem to enjoy a significant degree of support among the various influence groups. But neither is strong enough to overcome the opposition from the other groups.





Corruption and Violence





The experts interviewed suggest that at least there is no violence on a major scale taking place and that Bashaga doesn’t seem keen on conflict. But it also appears fairly naïve to expect general elections to be free and fair in an environment of tribal allegiances, international influence-taking and corruption that is hampering any progress.





What is particularly worrying in this context are the frequent reports about human rights violations voiced in particular by international groups such as Amnesty International. The frequency of the reports suggest that armed groups in various regions are allowed to roam free and to exert their power over those who dare to voice their opinion.





History of War





The international NGOs, which have no vested interest in getting any particular group in power, are vocal in their criticism about the lack of basic freedoms. Because in this situation, free and fair elections are nigh on impossible to hold.





Of course, with the extreme violence in mind that Libya has seen (starting with the bloody revolution and the killing of Ghaddafi), it doesn’t come as a big surprise that democracy seems a remote concept yet.





So the question remains, how the country might possibly emerge from this squabbling and fighting – because the population is definitely yearning for a return to normalcy, a guarantee of basic human rights and peace. If one had hoped for a solution spurned on by a group of international guarantors, the situation with the war in Ukraine will have put a question mark over those. Russia is pitched against not only the West, which has the U.S., Italy and France present in Tripoli, but also Turkey, which is also a powerbroker. Getting those international players to agree on any deal seems utterly remote. Maybe it will have to become a matter for the Gulf states and regional power Egypt instead?

	


	





	

		
Sudan Urgently Needs a Government, Says United Nations Envoy
	


	
	

		

The United Nations envoy has spoken at length about the progress achieved in the broad consultation process in Khartoum. He also warned that there was in fact an urgent need for establishing a government to avoid an economic collapse and significant humanitarian crisis.





The Security Council of the United Nations on Tuesday learned about the steps forward made by its envoy to Sudan, Volker Perthes. The special representative of the secretary general reported that the 800 or so participants in the UN-led broad consultation had found «visible» consensus on a great deal of issues. The main goals were to end all violence and to establish a technocratic government. Sudan has been without a functioning government since the October 25 coup d’état, which did away with Prime Minister Abdalla Hamdok.





The months since the military coup have been marred by intermittent violence and strong citizen protests in favor of democracy. There has been little sign of a return to the transition process which had been due to end in November 2022. Observers have said that one of the main reasons why the military rulers booted out the civilian government was their concern about being prosecuted over their involvement in the killing of peaceful protesters during the revolution as well as about losing control over economic assets.





Creation of Single Professional Army





One of the points on which the participants of the dialogue had agreed upon was the creation of a single, professional army, the establishment of judicial entities, for the conditions of credible elections and an inclusive constitutional process. Also, the participants agreed that women should constitute at least 40 percent of the transitional institutions.





The leverage used by the international community to get the participants to take a step forward are mostly economic. Perthes told the Security Council that a lack of progress and establishment of a government would lead to far tougher consequences for Sudan, with billions of dollars of external support and payments by the World Bank, International Monetary Fund and other donors still frozen.





As a consequence of the outcome of the consultation process, Sudan will now embark on an intensive phase of talks, due to stark in coming weeks with a view to return to constitutional order and civilian-led government.

	


	





	

		
Egypt Takes Precautions Against Food Price Increases
	


	
	

		

The rise in basic food prices as a consequence of the invasion of Ukraine has raised concern in countries such as Egypt, the biggest importer of wheat. The government has reacted with crisis meetings, precautionary measures to improve stockpiles and measures to counter speculation, our correspondent in Cairo writes.





Ukraine is one of the biggest suppliers of food staples in the world and the invasion by Russia is threatening to disrupt supplies to countries such as Egypt. The government of Egyptian President Abdel Fattah El-Sisi has taken a range of measures to secure the strategic stockpile of wheat. While the strategic reserve had fallen to as low as 12 days in 2017, the government has since improved the provisions to last for four months for the population of 110 million.





When the current crop is harvested in April, reserves will last for nine months, a consequence of the government’s strategy of bolstering the provision of the key food. The action by the government is testament to its concern that a shortage might provoke social unrest in a country where bread, made with wheat, is the main source of nutrition.





After the rise in global prices due to the repercussions of the Russian-Ukrainian war, all government institutions in Egypt intensified their efforts to mitigate the increase in prices on the income of Egyptian citizen. Egyptian President El-Sisi assembled his key ministers to hammer out a strategy to avoid a shortage. Ambassador Bassam Radi, official spokesman for the presidency, said that the meeting dealt with «following up on providing strategic stocks of all basic food commodities, especially wheat, with the approach of the holy month of Ramadan.»





In this context, Minister of Supply and Internal Trade, Dr. Ali El-Moselhy presented the position of the strategic stock of all basic food commodities, stressing their availability in the appropriate quantities for citizens. He also mentioned the attempts by some merchants to exploit the situation created in the markets to monopolize and store food commodities and then raise prices, thereby taking advantage of citizens’ urgent need for such commodities. These monopolistic practices were countered by massive control campaigns by the ministry of interior, which launched campaigns targeting monopoly crimes, raising prices, and manipulating goods in the markets.





Supply Directorates Besiege Violators With Campaigns





The directorates of supply and internal trade launched intensive campaigns on bakeries, markets and shops to control prices.





Prime Minister Mostafa Madbouly recently held an emergency meeting to follow up on efforts to provide basic commodities locally, and to procure the necessary financing for them. The meeting was attended by Tariq Amer, governor of the central bank, Mohamed Muait, minister of finance, Nevin Gameh, minister of trade and industry,  Ihab Abu Eish, deputy minister of finance, Jamal Negm, deputy governor of the central bank, and Ramy Abul-Naga, deputy governor of the central bank.





Ambassador Nader Saad, the official spokesman for the presidency of the council of ministers, said that the developments of the Russian-Ukrainian crisis are being followed up, and the resulting development in the prices of basic commodities. In this regard, the prime minister made it clear that he is closely monitoring the availability of basic commodities and the stability of markets together with officials in the central bank, the ministries of supply and finance, the ministries and concerned parties the situation of the availability of basic commodities, and the stability of markets.





For his part, Said Saleh, advisor to the minister of agriculture for follow-up, said, «The strategic stock of wheat is sufficient for 4 to 6 months, and we are on the verge of harvesting the new season of wheat next month. We must commend the government’s decision to encourage farmers to grow wheat, and I ask farmers to be very careful about supplying wheat to the government. »





Saleh added, «The price of wheat was increased last year, and today another increase of EGP 65. That is, the price of wheat yards was increased by EGP 165 in less than a year, and therefore there is no justification preventing citizens from supplying wheat to the government. »





Tough Timing





Observers believe that the time is not right now to increase the price of the subsidized loaf in Egypt in light of the jump in inflation. Consumer price inflation in Egyptian cities jumped an annualized 8.8% in February, which is the highest rate in nearly 3 years, when it reached 9.4% in June 2019. Inflation figures have surpassed the 7% target of the Central Bank of Egypt. Inflation in Egypt jumped after the state liberalized the exchange rate of the pound at the end of 2016.





The amendments that President  El-Sisi seeks to implement in the subsidy system, especially his announcement that the time has come to raise the price of bread, may provoke grumbling from citizens, but street protests are prohibited and very rare. The El-Sisi regime relies largely on the army as well as on senior officials loyal to him in the government and state agencies to strengthen the president’s grip on the country and prevent social unrest.





A loaf of subsidized bread costs the government about 80 piasters, while it sells for only 5 piasters, Finance Minister Mohamed Muait said in February. The subsidy for a loaf of bread in the current fiscal year’s budget amounts to EGP 50 billion, but Muait expects the amount of this subsidy to increase to EGP 58 billion due to the rise in global wheat prices.





Wheat prices have jumped strongly in the past few days with the outbreak of the Russian-Ukrainian crisis. Russia provided about 50% of Egypt’s wheat imports in 2021, while 30% came from Ukraine, according to data from the Egyptian grain industry.





Food Security





The escalation in Ukraine will have very serious consequences for food security in the Middle East and North Africa region (MENA), which accounted for 40 percent of Ukraine’s corn and wheat exports in 2021.





What makes the situation worse is that the expected rise in prices as a result of the crisis comes at a time when food prices have already reached record levels, especially in the Middle East, where prices have risen during the past two years as a result of a combination of conflict, political grievances and economic difficulties.





Countries such as Egypt, which is the largest importer of wheat in the world, Lebanon, Yemen, Oman, Libya and others find themselves in a difficult situation, especially if we keep in mind the role that food security played in the outbreak of the Arab uprisings more than a decade ago.





What About Alternatives?





In theory, there are alternatives available to Egypt, such as the U.S., Canada and Australia, but they are expensive. Also, the loss of Russian and Ukrainian supplies could increase the influence of the U.S. on food imports in the region. In addition, even if the money is available to import wheat from these countries at a higher cost, there is still a problem with regard to having the appropriate infrastructure and preparing to bring in these supplies. Most MENA countries depend on the Black Sea as a way of entering agricultural commodities, which means that these countries will have to import these commodities via alternative routes.





In Egypt, it is important to note that the slogan «bread, freedom and social justice» was a key demand of Egyptian protesters during the January 2011 uprising that toppled the late President Hosni Mubarak. Because bread in Egypt is heavily subsidized and its price is a very sensitive issue.





With wheat prices soaring, $763 million is expected to be added to Egypt’s already massive $3.2 billion bread subsidy bill this year. Prime Minister Mostafa Madbouly announced plans for the first increase in the price of a loaf of bread since 1988, but said the government aims to do so without hurting poor Egyptians.





Egypt is the largest importer of wheat in the world and the second largest from Russia. Egypt had bought 3.5 million tons of wheat as of mid-January, according to S&S Global. Egypt expects the volume of government imports of wheat to decrease in 2022 to 5.3 million tons, supported by an increase in domestic production. Egypt’s government imports of wheat reached 5.5 million tons in 2021.





In light of these conditions and developments due to the war in Ukraine, it is likely that Egypt will become a powder box waiting to ignite from one moment to another. It is a very dangerous situation and it is being tested by the ongoing war in Ukraine.

	


	





	

		
Algeria Caught Between Economic Depression and Social Discontent
	


	
	

		

The government in Algeria is caught between an expensive policy of food subsidies and a population dependent on food aid. It is trying to find a structural solution, but stumbling over the economic realities, our correspondent in the Maghreb writes.





Algeria spends about 19 billion dollars on subsidies of basic commodities a year. Researchers argue that the consequence of the measure is a loss of fiscal resources for the state, which has a negative impact on its budget and public spending.





The economy of Algeria needs urgent recalibration after years of over-spending. The economic depression has even caught the attention of the International Monetary Fund (IMF) which in its latest report published in October 2021 urged the government to undertake structural reforms. This call for reform has not fallen on deaf ears. The current government of President Abdelmadjid Tebboune approved a new finance bill, which was accepted by parliament in November 2021.





The new law raised some concerns among the population giving the basic thrust of lifting generalized subsidies for food staples. The main concern focuses on the question whether the government is jeopardizing the socio-political stability in the country, which depends largely on the capacity of the state to provide for the needs of the most disadvantaged in order to guarantee social peace.





One after another of Algeria’s governments, part of an elite that has been in charge of the government since independence, opted to retain the social policy based on the subsidization of basic necessities. A choice that seemed warranted in their eyes because it was part of a social contract that allowed them to ensure a certain level of social stability in exchange of a recognition of the government’s legitimacy.





Wave of Protests and Social Discontent





Opting for a new social policy and the lifting of subsidies for basic necessities, the state finds itself in an uncomfortable position, facing protests from a segment of the population. Prices have been rising since the announcement of the government’s new policy choice. The increases on some products have reached 100 or even 200 percent. For example, the price of a kilogram of potatoes rose to 150 dinars (0.95 euro) from 60 (0.38 euro).





The discontent reached the middle class, which to a certain extent was unexpected. But with salaries ranging from 200 to 400 dollars, it is the middle class that is paying a heavy price for the new law. The uproar also has reached sectors of the economy including education and health care, with teachers going on regular two-day strikes since November.





Not to mention the Hirak movement that was the cause of the ouster from power in 2019 of former President Abdelaziz Bouteflika. On March 6, the flames of this movement were rekindled with anti-government protests reaching European capitals such as Paris, Marseille and Berlin. The slogan used by demonstrators was an end of social injustice, dictatorship, and oppression.





With the lifting of general subsidies the government has also introduced a law against illegal speculation. The sale of table oil to minors is forbidden, with the law prescribing prison sentences ranging from 3 to 30 years and financial fines of up to 14,000 dollars. The government hopes to curb the soaring prices of basic foodstuffs. The speculation had boosted the prices of oil and thus created an unnatural form of inflation. A risky situation for the Algerian economy which according to the latest report of the World Bank published on December 22, 2021, has recorded a historical inflation rate of 9.2% during the last ten months of the previous year.





Financial Compensation for the Needy





To compensate for the painful changes to the subsidy regime, which considerably affected the purchasing power of Algerian citizens, the regime opted to pay financial compensation directly to low-income households. However, the impact of these financial compensations leaves much to be desired. Despite the aid, Algerians are increasingly struggling with the erosion of their purchasing power, soaring prices, shortages and especially the gradual impoverishment of the middle class. It should be noted that in Algeria, the prevalence of poverty has increased significantly.

	


	





	

		
Egypt Is Looking for Partners to Implement Its Water Plan
	


	
	

		

Financing its generational plan for managing water resources is one of the biggest challenges currently facing the Egyptian government. It is well aware that spending on that level won’t be available out of the general budget and is therefore looking for international partners, our correspondent in Cairo writes.





When it presented its strategic water plan, Egypt estimated that the investment needed to implement plan amounted to $50 billion. Spread out over fifteen years through 2037, the bulk of the funding would come from the state’s general budget. However, it was equally clear that government funding alone wouldn’t suffice. Hence, the issue of securing the necessary funds for this key program in the economic development of the country has become a focal point for Egypt.





With the increasing water scarcity, managing these funds and investing in the water sector, becomes a top priority as Egypt desperately needs to economize its use of water both in terms of quantity and quality. This includes agriculture, which is the main user of water, households and industry.





Investments Planned in Water Infrastructure





The Ministry of Water Resources and Irrigation developed the plan based on an integrated approach, aimed at enhancing the planning cycle and developing a unified system for investment planning and follow-up. This will ensure that lenders can better evaluate potential investments in terms of their merits and value for money, which in turn should lead to more investments in the national plan. Here are the most important projects included in the plan:





– Mixing stations: aims to improve the efficiency of water use and irrigation condition at the end of canals, reusing drainage water. The establishment of 250 stations has been completed, in addition to the implementation of 116 agricultural drainage water-mixing stations on the canals at a cost of about EGP 500 million.





– Wastewater treatment: the government plans to construct 52 wastewater treatment plants. In mid-2019, the government had completed 26 stations in Upper Egypt, with a further 26 in the implementation phase. Once completed, these stations will have a total capacity of 418 million cubic meters per year, sufficient for 8 million people. The total cost of these stations is estimated at EGP 8.1 billion.





– Seawater desalination plants: The seawater desalination plan foresees spending of EGP 134.2 billion until 2050 in coastal regions, providing 6.4 million cubic meters per day. The plan consists of six phases, starting with the construction of 47 stations by 2025 at a cost of EGP 45 billion. In August 2018, the government announced its intention to build 39 desalination plants with a capacity of 1.4 million cubic meters per day. These stations cost about EGP 29.3 billion, and are being built in the governorates of Marsa Matrouh, the Red Sea, South and North Sinai, Port Said, Dakahlia and Suez. Among these plants, 16 were implemented in 2019.





– Irrigation projects: aims to transform agriculture from floodwater irrigation systems to modern irrigation systems in the old lands of the valley and delta. Modern irrigation systems include sprinklers, drips, or subsurface irrigation. About EGP 40 billion have been allocated to develop irrigation.





– Rehabilitation and development of canals: aims to develop the main canals and drains to reduce loss from leakage. The total length of canals and drains in Egypt is 30,000 km. The total cost of the project is EGP 80 billion. The government is currently implementing the first phase of it, which takes two years to rehabilitate and line 7,000 km of major canals and drains at a cost of EGP 18 billion. The rehabilitation of 3’200 kilometers has already been completed in March 2021. The Ministry of Water Resources and Irrigation has spent about EGP 8.4 billion pounds to develop 383 canals in 19 regions, and EGP 12 billion have been allocated to lining the canals.





Egypt to Spend 300 Billion Pounds on Water Treatment Plants within 5 Years





Egypt aims to take a lead in how to use water more economically and it is determined to spend billions of pounds on sewage and agricultural drainage stations throughout the country.





Egyptian Minister of Irrigation Mohamed Abdel-Aty indicated that Egypt allocates investments of about EGP 700 million each year to implement water projects, including a project for the rehabilitation and lining of canals. Abdel-Aty said «the national project is very important, as the visual and environmental pollution has been removed, and it leads to improving the water in the canals, and creating roads and corridors for people, and we have reached 3,500 km. At the end of this year, we will reach 7,000 km, and in 2025 we will be finished with 20,000 km.»





Eman Sayed, Head of the Planning Sector at the Ministry of Irrigation, stressed the importance of choosing priority projects for implementation, given that funding will be provided from the state’s general budget at the beginning, and if it is not available, resort to other government agencies to search for external loans.





She added that the Ministry of Irrigation and Water Resources is currently reviewing the National Water Plan 2017-2037, with regard to the financial cost.





Local, Regional and Global Corporates Interests in the Construction of Projects





PERI Egypt, a subsidiary of German-based Berry International, implemented the Nile River Barrages project in the city of Naga Hammadi in southern Egypt. The project consists of 330 meters long barrages with a hydropower station with a capacity of 64 megawatts.





Metito Company has participated in the implementation of a number of projects in light of the expansion of urban communities that need water, especially the new cities built by the sea. Among the most prominent projects that the Egyptian government is currently implementing is the Al-Hamam plant for treating agricultural wastewater, which is the largest of its kind so far in the world. Metito is participating in the implementation of this project through a consortium of companies that includes Orascom, Arab Contractors and Hassan Allam.





The American companies Diplomatic and BG Titan intend to inject investments in the Egyptian market estimated at $5 billion, including in the production of green hydrogen. Hanan Taher, the economic advisor to the two companies, said that Diplomatic Corporation submitted a request to the government to invest in Egypt in the field of green hydrogen production as well as a project to desalinate and treat seawater. She indicated that the investments in these two projects were estimated at $3 billion.





International Financial Institutions Implicated in the Planning





Participants from global financial institutions discussed the most important challenges that impede the implementation of water desalination projects in Egypt during a seminar called Opportunities and Challenges within the framework of Cairo Water Week. The seminar was organized by the European Investment Bank and backed up by the EU Embassy, the German Development Bank, and the French Development Agency.





Mamdouh Raslan, head of the Holding Company for Water and Wastewater said that the holding company and its subsidiaries are working on implementing water desalination projects, with financing exceeding $3 billion.





Alfredo Abad, head of the European Investment Bank’s regional office in Egypt, said that the bank is the largest lender to global water sector projects so far, with more than 66 billion euros for more than 1,400 projects.





Looking for More Partners





The Egyptian Sovereign Fund is looking for partners to invest in a $2.5 billion initiative to build more than ten desalination plants powered by renewable energy. Officials are planning 17 new plants powered by solar energy and other green sources, each of which will be built, owned and operated by the Egyptian Sovereign Wealth Fund in partnership with a group of local and foreign investors, according to the fund’s CEO, Ayman Soliman.

	


	





	

		
Chad: Confrontation Between France and Russia?
	


	
	

		

The recent rumblings about a rebel leader in Chad who wants to use Russian mercenaries to get rid of the head of the transitional military council in N’Djamena has caught the attention of a wider audience wary of the developments in a region where the Western powers are challenged by old foes.





The leaked transcript of a phone call between Timan Erdimi, the leader of the Chadian «Union of Resistance Forces» (UFR) and a former adviser of the president of the Central African Republic has received a lot of attention because of the implications it could have on the ongoing peace process. Timan Erdimi and the man from the Central African Republic discussed the removal of General Mahamat Idriss Déby, the head of the transitional military council and de facto president of Chad. The key aspect about the discussion between the two men however was the implication of the Wagner Group, the infamous Russian mercenary group, in their plan.





The Ominous Wagner Group





The mentioning of Wagner Group, which has long been active in neighboring Libya and since a couple of months back also in Mali, is particularly poignant now that Russia has invaded Ukraine, a move that sparked widespread condemnation, not least in Paris. And many observers in the Sahel region consider France to back Idriss Déby.





Further to the threat to French interests in Chad, the alliance between the UFR and Wagner is also a concern for the ongoing process to establish peace talks between Idriss Déby’s council and various rebel groups. Hassan Mahamat Al-Jid, a political analyst told «PoliticsBlog» that Erdimi clearly was looking for a way to break his isolation in which he found himself during the process underway in Qatar. According to his reading of the situation, Qatar is seen as working closely with the West and particularly France in trying to move forward the road to national reconciliation. Both Qatar and Turkey are in favor of a settlement and one should keep in mind that Turkey especially has been pitched against the Russians in Libya, where the latter were firmly rebuffed by a Turkish-led offensive.





Still, the government of Chad doesn’t seem overly convinced about Erdimi’s isolation and Ahmed Badi, an adviser to the transitional council said that it wasn’t only the Central African Republic that was involved in the case, but that the government was also interested in knowing about the role of Qatar, because the latter had tried to convince Erdimi to participate in the national dialogue.





Anti-French Sentiment Stirred Up





Bringing in the Russians is a blatant attempt to stir up anti-French sentiment by recalling the old ties to the Soviet era. The Chadian revolution had close ties to the Soviets and therefore luring the Russians back into the country isn’t such as surprising move, as Moussa Ishak Chicheley, a military advisor to the Accord Front told «PoliticsBlog».





While some seem not overly surprised about the move by Erdimi, others say clearly that he is wrong about the ongoing process. Replacing France with Russian mercenaries seems not such a clever idea, even though the French aren’t always welcome in a region they for a long time dominated as a colonial power.





Much Is at Stake





N’Djamena in recent days has seen demonstrations by young agitators against French interests, urging them to leave and welcoming the Russians in. This echoes the recent scenes from Bamako, where the military junta welcomed the French departure and, what’s more, also welcomed in the Wagner Group mercenaries.





Following the attack by the Russians in Ukraine, the recent dealings of its mercenaries in Northern Africa will come under very heavy scrutiny in Europe no doubt. It is very unlikely that the governments of France and its allies are going to give up on Idriss Déby under the current circumstances. Too much is at stake.

	


	





	

		
Pressure on Sudan’s Military Rulers to Engage in Political Process
	


	
	

		

With more than four months gone since the putsch by the military in Sudan pressure on the rulers to go back and engage in a political process is mounting.





The so-called Friends of Sudan group of nations on March 3 published a statement on the UN Integrated Transition Assistance Mission in Sudan (UNITAMS) report. UNITAMS reported on the consultations it held with Sudanese stakeholders about a possible way forward and out of the stalemate. 





It cited the unwavering commitment of civil society groups to finding a way back to a democratic and peaceful Sudan and mentioned a number of key findings which the groups had rallied around. Number one priority for the participants in the consultation process was the installation of a transitional cabinet of civilian technocrats. Also, they urge a reduction in size and powers of the transitional sovereign council, a body that had become synonymous with conflict over how to proceed between civilians and military representatives.





Free and Fair Elections





The civil society groups also want a civilian transitional parliament as well as an electoral body capable of delivering free and fair elections. Other areas of agreement include the need for the establishment of judicial accountability and the equitable inclusion of women in the political process and its institutions.





At this time of political tension, it is important to note the will of civil society to keep the process Sudan-led and not to pass responsibility to some outside actor. The Friends of Sudan said in their statement that they welcomed the commitment of UNITAMS, the African Union, the League of Arab States and Inter-Governmental Authority on Development to support the process. 





The UNITAMS report stated that there was consensus on the need to stop the violence and killings, and to lift the state of emergency and to uphold the right to free expression and assembly. “The Friends of Sudan call on all relevant Sudanese stakeholders to engage in the next phase of a political process to resolve the political crisis in Sudan.