North Africa

What economic reforms were introduced within North Africa countries?

In the past decade, many North African nations have tried to introduce substantive economic reforms, largely aimed at privatizing formerly government-owned industries. Bowing to pressures from the International Monetary Fund, for example, under the governance of President Hosni Mubarak, Egypt has been "seeking to throw off Egypt's Arab socialist past in favor of free market economic policies" (Murphy, 2007, p.1.). Egypt's stock and property markets have boomed and dozens of state companies have been sold to private investors. Foreign investment in has Egypt has tripled (Murphy, 2007, p.1.)

However, while foreign investment has increased, unemployment has also gone up. Inflation has reached double digits while wages have stagnated. Thus, for average workers, little prosperity has resulted from privatization (Murphy, 2007, p.1.). The government also put an end to employee profit-sharing, once the norms at government-owned firms. Strikes have become rampant and unrest is of great international concern, given that the opposition party, the radical Muslim Brotherhood is pro-socialist, as well as fundamentalist in its attitude towards Islam.

Morocco has fared better under the stewardship of the IMF-promoted policies. The IMF called Morocco "a pillar of development in the region" and praised King Mohammed VI and the Moroccan Central Bank for its management of fiscal and monetary policy (IMF, 2008, Reuters). Although Morocco has not been immune to the effects of the global recession, after instating more stringent fiscal policies and pursuing a policy of greater privatization, it experienced an unprecedented nonagricultural GDP growth of 6.6% in 2007 and has better absorbed "the impact of difficult international economic conditions" than its neighbors (IMF, 2008, Reuters). "Among the indicators of Morocco's economic progress are its Free Trade Agreements with key economic partners, including the United States, which open tariff-free Moroccan goods to a market of over 1 billion people worldwide" (IMF, 2008, Reuters). Morocco's greater political stability than Egypt has also made economic liberalization a far easier journey for the nation as a whole.

Works Cited

International Monetary Fund praises Morocco's economic performance and reforms.

(2008, July 31). Reuters. Retrieved May 30, 2009

http://www.reuters.com/article/pressRelease/idUS290096+31-Jul-2008+PRN20080731

Murphy, Dan (2007, December 2). Egypt's economic reform meets unprecedented wave of labor resistance. The Christian Science Monitor. Retrieved May 30, 2009

athttp://www.csmonitor.com/2007/1207/p25s05-wome.html