AMU SLUGGISH, BUT STILL HAS A PULSE

C O N F I D E N T I A L RABAT 000256

SIPDIS

DEPT FOR NEA/MAG, EEB/TPP/BTA - EGAN AND S/P - BEHRMAN
TUNIS ALSO FOR USED AT THE AFDB

E.O. 12958: DECL: 03/30/2019
TAGS: ECIN PREL ETRD EINV PTER XI MO
SUBJECT: AMU SLUGGISH, BUT STILL HAS A PULSE

REF: A. 08 RABAT 0532

B. 08 RABAT 0156

C. SECRETARY 0015 (NOTAL)

D. RABAT 0236

Classified By: CDA Robert P. Jackson for reasons 1.4 (b) and (d).


1. (C) Summary: Secretary General of the Arab Maghreb Union
(AMU) Habib Ben Yahia told the Charge and Department
representatives on March 18 that the North African countries
continue to make modest advances in functional economic
integration, but prospects for political rapprochement remain
remote. He observed that trade, while tiny, was growing, and
the private sector leads integration efforts, including
through finance. Work was continuing on critical regional
infrastructure with the Trans-North African highway nearly
complete but for the borders. Ben Yahia regretted the
situation in Mauritania, but implied that the AMU had to
accept the current political situation, while security in the
border regions remained a priority. Resolving the core
Algerian-Moroccan conflict may require generational change,
he mused. The AMU, an organization consisting of Algeria,
Libya, Mauritania, Morocco and Tunisia, is currently
celebrating its twentieth anniversary but has little to show
for the last decade. Both Moroccan officials and AMU staff
from Ben Yahia down have welcomed past USG contacts with the
AMU, and urge enhanced USG high level engagement to support
regional integration. End summary.

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Economic Integration Work Continues
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2. (SBU) During a discussion of the AMU's goals and projects
with the Charge, A/DCM, EconCouns, and visiting EEB Officer
Julie Egan and MEPI Officer Greg Howell, Secretary General
Habib Ben Yahia reiterated his goal of using economic
convergence in "sectors of common interest" to spur the
long-moribund AMU toward greater regional integration (Ref
A). Ben Yahia, a former Tunisian Foreign Minister and
Defense Minister, noted consistent IMF and World Bank
support. (Note: IMF head Dominique Strauss-Kahn had
co-chaired, with Ben Yahia, the November AMU Finance
Ministers and Central Bank governors meeting in Tripoli. End
note.)


3. (SBU) Ben Yahia said that AMU financial integration
working groups contribute to a growing network of banking
relationships throughout the Maghreb. A further step will
occur when the Maghreb Investment Bank in Tunis is up and
running. This, he said, will enable financing of
"horizontal" projects throughout the region.


4. (SBU) On trade, Ben Yahia highlighted an AMU study
committee to examine how to harmonize policy and increase
trade. Such intraregional trade flows remain tiny, he
conceded, and are dominated by the relatively large
Libyan-Tunisian trade (approximately USD 2.5 billion). Key
to allowing intraregional trade to flourish will be the
completion of the Trans-Maghreb Highway, currently under
construction in each country on a national level. The AMU is
working with technical experts to ensure that highway and
rail connections across the Morocco-Algeria border will be
possible when political conditions allow. AMU Director for
Economic Affairs Saida Bendili told EconOff in a separate
meeting that trade between AMU members accounts for only 2.6
percent of the total trade volume of the five countries, but
there is a lack of detailed trade statistics. The AMU hopes
to obtain funds from the African Development Bank for a
detailed database of its own, instead of relying on numbers
from the IMF.


5. (SBU) Ben Yahia highlighted the Maghreb Businessmen's
Union, which unites each nation,s business associations, as
a means to reinforce private sector links. The association
is organizing a conference for later this spring. He also
noted efforts to adopt a unified Maghreb Code of Investments,
to ensure that investors have common privileges, and
successful efforts to ensure that insurance is valid
throughout the region.

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Food and Resources
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6. (SBU) Ben Yahia identified food security as another
preoccupation of his organization. Counter-intuitively, one
of the best areas for cereal cultivation is a 140,000 hectare
swathe of Mauritania that could be naturally irrigated by the
Senegal River. Noting the accompanying challenge of
desertification, he said that the AMU promotes
anti-desertification and water use policy coordination among
member countries. The AMU has worked, in cooperation with
UNESCO, to establish a regional framework to govern pumping
in the "deep aquifers" in the southern parts of region, to
combat overuse and competition over this resource. The AMU,
he said, is also reaching out across the Sahel to ECOWAS and
other West African institutions to work bilaterally with them
to address desertification. West Africa, he noted, is even
more afflicted by desertification than is the AMU, leading to
migration and other issues that pose serious challenges for
North Africa.


7. (SBU) Energy is one area in which the private sector has
successfully pushed integration without awaiting political
leadership, according to Mendili. A Maghreb Electricity
Committee (COMELEC),regrouping the electric utilities of the
five countries, coordinates interconnections between
neighboring countries, including a November 2008 upgrade of
the Morocco-Algeria interconnections and agreements for
Morocco to transport Algerian power for export to Spain. The
Maghreb countries also boast complementary energy resources,
including oil and gas in Algeria and Libya, and wind and
solar potential in Algeria, Mauritania, and Morocco. Ben
Yahia stated that work groups are developing a strategy for
solar power, part of an effort to develop a renewable energy
charter for AMU members. The key challenge in solar power
development is the enormous investments that are required.
Ben Yahia expressed hope that future cheaper solar panels
would make the option more realistic.

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Collaboration Helps, But It's Not Enough
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8. (C) Ben Yahia said his goal is to use these "federative"
sectors to achieve practical links that will lay the
groundwork for deeper integration when political conditions
allow it. Mendili told EconOff that AMU working groups leave
the Morocco-Algeria dispute over Western Sahara "at the UN
level," and goodwill exists among all working level
participants to promote regional integration. All of the
working sessions include representatives from all five member
countries, she emphasized, and integration is a shared
vision. Asked how the U.S. could improve regional
integration, Ben Yahia told the Charge that the "more you
(the USG) voice your opinion on the necessity of accelerating
integration," the more priority it will receive from
countries in the region. He argued that it is important for
the U.S. to take a role, and to help the region make up the
gap between current efforts and the momentum needed to
achieve meaningful integration. Economic cooperation, along
with the similar ethnic makeup of countries in the region, is
a "necessary but not sufficient condition to push
integration," he said. "We need a push from the big powers,
you and especially the European Union, given its role in the
region."

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Radicalization, Economic Opportunity and Mauritania
-------------- --------------


9. (SBU) Ben Yahia pivoted from economic integration to the
link between economic opportunity and de-radicalization. He
noted that security is a multi-faceted issue, implicating
security policies, education, training and leisure. The key
for countries of the AMU, he argued, is to increase job
opportunities, and thereby minimize the impact of radical
philosophies. The EU is assisting in defining areas of
concentration for an AMU strategy to address this
radicalization, he said, a process that began in Rabat last
year. Ben Yahia appreciated the dialogue on radicalization
with the USG that began in September 2007, including
discussions with S/CT General Dailey and the April 2008
meeting of AMU experts in Washington.


10. (C) On Mauritania, which he characterized as the "soft
underbelly" of the Maghreb, Ben Yahia expressed concern about
the "explosive" situation on the Mali-Mauritania border, and
suggested that the problem in the uncontrolled desert spaces
outweighed the political considerations. He spoke uneasily
about the political situation in Nouakchott but observed he
was "certain" that the Mauritanian junta's proposed June 6
elections will proceed. He told us that Mauritania had
submitted a request to the AMU for election observers.
Noting the coming elections in Algeria, Ben Yahia regretted
that resolving the core Morocco-Algeria disputes may well
require generational change in political leadership.

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Political Obstacles Remain
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11. (C) Comment: Ben Yahia, a former Ambassador in
Washington, does not appear to have much authority over
member states, but he can be a facilitator of efforts by the
USG and others to promote rapprochement and integration in
North Africa. While AMU officials and supporters hope that
private enterprise on both sides of the Morocco-Algeria
border will overcome the political estrangement to promote
real integration, without political pressure to open borders,
integration efforts and economic growth will continue to fall
short of their potential. Continued USG engagement with the
AMU as a group (excluding Mauritania),along the lines of the
past successful Foreign Ministers dialogues with the Under
Secretary for Political Affairs, and joint Foreign Minister
meetings with the Secretary, are essential to maintaining the
momentum of regional integration and keeping political
leadership focused. End comment.


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Jackson