Mali’s risks remain heightened as its conflict continues to evolve. French-led international military intervention since 11 January has successfully repelled rebel forces to the more remote northern regions. Yet the country remains vulnerable to reprisals from both secular Tuareg separatist fighters and Islamist guerrillas linked to Al-Qaeda, which have regrouped among the safety of the Tegharghar Mountains in the Saharan north-east.
While opening up a new front in the international war on terror (which itself poses risks), the instability in Mali has had other more immediate effects. Activity and transport links in the north of the country have been affected, contributing to food and fuel shortages there, with the attendant rise in prices inflicting considerable economic pain on local populations. Civilian atrocities by the Malian army are also being claimed, and the separatist National Movement for the Liberation of Azawad has been inadvertently strengthened.
The presence of some 3,500 French forces in Mali, alongside 2,000 troops from Chad and Niger as well as a UN-backed African mission of some 6,000 troops soon to be deployed, raises questions over how Mali’s post-conflict security interests will be handled and what repercussions there will be for political stability, the economy and foreign investment. Many fear the Jihadist threat will spill over Mali’s porous borders; others say that it will return in force. And against this backdrop there are wider questions over what may ultimately involve a three-way tussle for superiority both within the country and in the wider region, as China, the U.S. and Europe battle for its scarce resources. But the biggest problem may be in agreeing a longer term secularist solution to the separatist threat.
The recent hostage crisis at an Algerian oil facility operated by BP has also caused many firms operating in the region to reassess their security programs, with French interests the particular, but not exclusive, targets. Still, with the French efforts having released Timbuktu and Kidal from the grip of religious extremism, as well as Gao (despite a reprisal attack by the rebels), the goodwill shown toward the liberators can only cement future relations between Paris and Bamako, boosting the pecking order for French and other western firms seeking to invest in the mining sector.
From an economic viewpoint the military intervention has helped to secure the more prosperous south and the investment returns have been considerable, despite the unsettling instability. The South African company Randgold Resources has reported favourable results for both gold production and profits on its Malian operations for 2012, in spite of the civil turmoil.
The IMF has also approved an $18.4 million Rapid Credit Facility to ensure a sufficient cash-line for the government to maintain payments, replacing a previous IMF program for 2012-14 that was put on hold by the coup d’état in March 2012. The country’s security problems, combined with a deficient business environment — including a poor infrastructure and financial system, and high corruption levels, among other negative features — will nonetheless limit private sector activity and investment.
Yet, despite concerns about the northern areas, and a contraction of real GDP last year (culminating from drought and the euro crisis, as much as the domestic instability), economic growth of 4 percent — perhaps more — is still predicted for 2013. Economic activity is in any event mostly determined by the agricultural and mining production that takes place in the south where the overwhelming majority of the population resides. But inflation may escalate beyond the 5 percent mark estimated for December 2012, the current account deficit will remain large, raising financing issues, and political/election uncertainties will underpin investor risks.
If ever a crisis takes place on local grounds, foreign businesses will definitely feel a pinch whether on a small or a large scale. Improvements or advances that the companies had planned initially would need to be put to a temporary halt until the situation recovers. For instance the idea for a http://supercheapselfstorage.com.au/blog/storage-facilities/storage-facility-expansion/">storage facility expansion needs to be delayed even if works are already underway.
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