Next door neighbour: An open border could further boost economic cooperation

An open border between Morocco and Algeria would enhance growth in the Oriental, and raise trade activity across North Africa. The closing of the Moroccan-Algerian border in 1994 represented a direct hit to the Oriental’s economic prospects, prompting a fall in trade and the prevention of movement of people between the two countries. Indeed, the impact of the event was felt at all levels of the region, with implications that extend beyond eastern Morocco and western Algeria. It has been a source of contention that has stalled negotiations aiming for stronger regional ties, and has become a touchy subject blocking political and economical cooperation between the region’s countries.

The centuries-old trade route that would allow traders from the old Moroccan capital of Fez to do business with what is present-day Algeria was the source of a strong cultural flow between the Oriental region and cities in present-day Algeria. Nonetheless, and despite associated economic costs for both sides, the closed border is seen more as an issue between the two governments than the two peoples. Citizens and civil society on both sides have expressed willingness for an open boundary.

In October 2012 Algerian and Moroccan activists staged a peaceful protest, during the second Maghreb Social Forum held in Oujda. The sit-in attendees were demanding the free circulation of people between different Maghreb countries and underlined the benefits of increased trade for the two nations. The issue is especially pertinent for families that are spread out between Algeria and Morocco, who cannot cross easily to visit relatives on opposite sides of the border.

OFFICIALLY CLOSED: The border between Morocco and Algeria has been closed since 1994. The border issue has region-wide implications, especially regarding the development of the Arab Maghreb Union. Created as a regional trade block to facilitate commercial exchanges between Morocco, Algeria, Libya, Tunisia and Mauritania in 1989, the union has barely held a meeting since 1994.

CREATING UNITY: A report published in 2012 by the African Development Bank (ADB), titled “Unlocking North Africa’s Potential through Regional Integration”, argues that the low level of economic cooperation among countries represents a loss for the entire region. “Despite strong ties due to a common history, religion and language, the North African region remains poorly integrated. The economic cost of this lack of integration is estimated to be around 2-3% of GDP,” the report states. The report further argues that the North African region remains one of the continent’s most important economic regions, representing a third of Africa’s annual GDP and encompassing a population of 170m.

STILL FEELING THE PINCH: Intra-regional trade remains weak; as an example, trade with other countries in the Maghreb represents 5% of Morocco’s total trade and only 3% of Tunisia’s, according to the ADB, among the lowest of any regional economic grouping on the continent. The current economic situation in Europe might help shift focus to stronger cooperation. North African economies, long dependent on European growth to encourage investment and industrial output, have in some cases been heavily affected by the continent’s economic woes. Furthermore, economic consequences of the Arab Spring, which have been especially prevalent in Tunisia, Libya and Egypt, have also weakened growth expectations across the region. This has put an emphasis on the need for closer integration between the neighbours in order to spur growth.

The Arab uprisings encouraged regional capitals to begin engaging again for integration. In February 2012 the various foreign ministers of the Arab Maghreb Union countries met in Rabat. It was the group’s first meeting in 18 years. Other steps that have already been taken in 2013 might help open a path to eventually solve the border issue. In January 2013 the five countries of the Maghreb Union (Morocco, Tunisia, Algeria, Mauritania and Libya) announced the creation of an investment bank to foster infrastructure development across the region. The plan, in discussions since 1991, had been stalled by the ongoing dispute between Morocco and Algeria. The bank will have an initial capital of $100m, in which the five countries participate equally.

Relations between the two countries were framed under encouraging signs last year. In January 2012 Morocco’s foreign minister, Saad Eddine El Othmani, visited Algiers with the goal of reviving the Arab Maghreb Union discussions. The trip was the first by a Moroccan foreign minister to Algeria in 10 years. Additionally, in a televised speech, King Mohammed VI said, “Morocco will carry on with its endeavours to reinforce its bilateral relations with all its Maghreb partners – including our neighbour and sister nation Algeria – in order to respond to the pressing, legitimate aspirations of peoples in the region.”

LOCAL IMPLICATIONS: For the Oriental, a closed border with Algeria has had an impact on the local economy, prompting a rise in the exchange of contraband products between the two sides, and making it more expensive and time-consuming for local industries (and companies in most other areas of Morocco) to export the their products to the large and wealthier market next door. For businesses in the Eastern Region, Algeria is frustratingly close, as it is far from easy to access. However, the flow of investment that has filtered through to the Oriental is a sign that local authorities have decided to develop the region rather than relying an open border to neighbouring Algerian as a precondition for economic growth.

AT THE READY: For the Eastern Region, waiting is no longer an option, but nor is it now an obligation. The investment in roads, ports, urban renovation, agriculture and technology training are geared at transforming the Oriental into a new economic centre in the Mediterranean.

“The border could open tomorrow, in six months or in 10 years,” said Ali Belhaj, the president of the regional council for the Oriental. “Since we do not know when the border will open, we need to develop in accordance to the reality today, preparing the region so it can survive with a closed border, but be ready for when the border opens,” he told OBG.

The impact of an open border could be considerable for all Maghreb countries by facilitating regional integration. Local commerce would be considerably enhanced and trade between Algeria and Morocco would also be facilitated. A large amount of exports would begin to pass through the region. Regardless of the border situation, however, investment in infrastructure and industry looks set to continue apace, meaning the Eastern Region will develop without having to depend on its eastern neighbour.