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AFRICA MACRO Party capturing 13.8% of the vote and 30 seats, and a left-wing Party, Ettakatof, winning 9.7% of the vote and 21 seats. These two parties are engaged in talks with Nahda over the formation of a coalition government. Nahda has been eager to dispel suspicions that it has a fundamentalist Islamic agenda. It reassured women that their rights will be protected and they will be represented in the government. They have also reassured the business community that they are pro-free market. In a meeting with stock exchange executives on October 26, Rachid al-Ghannouchi, the head of Nahda indicated that he strongly supported foreign investment and favored more companies listing on the stock exchange. Rachid al-Ghannouchi also said Nahda has no intention of making Islamic banking “universal”, the “market is central to Nahda’s economic philosophy”, the tourist industry would be protected and alcoholic drinks and bathing suits on beaches would not be prohibited. Not everyone in Tunisia was reassured by the moderate stance adopted by Nahda. There is suspicion that Nahda has an alternative agenda to impose Islamic values. The urban secular communities in Libya, Egypt and Tunisia are clearly concerned that elections will empower Islamists parties who are the best organized political force and they will use their political influence to impose Islamic law and roll back women’s and civil rights. The Islamist parties, however, have denied seeking to impose religious rule and curb the rights of women and minorities. Despite this, there is much unease about what policies they would pursue if indeed they gained control over the levers of power. Foreign investors are clearly worried about the political and economic risk that might prevail in the event that Islamic forces gain the upper hand in the political process. It is too soon to know which way the winds are blowing as it will be some time before the dust settles. In the meantime, the poor economic environment in Egypt, Libya and Tunisia suggests there will continue to engender much discontent and anger which may spark more protests. There is also concern that the unstable political environment in North Africa could provide a sanctuary for AlQaeda of the Maghreb which has been active in the Sahel region where they have kidnapped Western tourists. Europe would be very worried by such a development given North Africa’s proximity to it. Other countries are watching events in Egypt, Tunisia and Libya with nervousness and concern. There have been demonstrations in Morocco urging a relaxation of King Hassan’s powers. He responded in June by outlining a series of reform measures to change the constitution. These proposals would reduce his nearly absolute powers and create a political system in which the prime minister would be the leader of the party with the most seats in Parliament instead of being selected as now is the case by the King. The prime minister would have the authority to appoint government officials and ministers and Joab’s Technologies and Research, Natu Court Flat B.

POLITICAL AND ECONOMIC OVERVIEW

have the power to dissolve Parliament. The judiciary, meanwhile, would become an independent branch of government. Currently, the king heads a council that approves all judges. The proposed changes to the constitution were approved in a July 1 referendum. The approval of the referendum appears to have taken the steam out of much of the protest movement in Morocco. Algeria is clearly concerned about the possible rise of Islamic parties which might come to power in Egypt, Tunisia and Libya. It was plunged into a brutal civil war in December 1991 when the ruling National Liberation Front (NLF) cancelled elections after the first round of voting that saw the Islamic Salvation Front (ISF) capture 48% of the popular vote and win 188 of the 232 seats in Parliament. The ISF began a guerrilla war against the government and its supporters after it was denied the opportunity to form a government. Violence spread throughout the country igniting a bloody civil war that lasted till 2003. The government was able to defeat the ISF and remain in power, but the cost of doing so was very high. An estimated 150,000-200,000 people died in the conflict. There is discontent in Algeria particularly among the large numbers of young people who are out of work. Corruption is another major issue that is fueling discontent and dissatisfaction. There have been sporadic demonstrations in Algeria against the government but the police have been quick to put them down and disperse demonstrators. Presidential and National Assembly elections will be conducted in August, and if they are rigged as they always have been, it may prompt demonstrations and protests that would challenge the NLF’s continued hold on power. According to a US Embassy cable, the 2009 presidential elections were "carefully choreographed and heavily controlled", with the official turnout figure "exaggerated" by at least 45%.” The Arab Spring Seeps into Sub-Saharan Africa The Arab Spring has inspired democratic movements and antigovernment protests in Sub-Saharan Africa. There were major demonstrations in Senegal in June to protest the changes President Wade wanted to make to the constitution that would have assured him a third term. Under the proposals, the threshold for victory in a Presidential election would have been lowered to just 25% in the first round instead of 50%. Furthermore, Wade proposed that a vice presidency be created. This was seen as a means of anointing his son as the next leader since the president under the proposal would have the ability to transfer power to the vice president at any time. In the face of public protests, President Wade quickly retracted the proposals. In Malawi, there were anti-government demonstrations in July protesting the increasingly heavy handed role of President Page 46 of 104

Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...

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