By: Cormac O’Harrow
We are almost six months into 2020, and everybody can agree upon the fact that this is, to say the least, a tumultuous time to be alive. The country has already seen a global pandemic, an economic recession, impeachment trial, and an upcoming election. But there’s one area that seems everybody has forgotten about: Northern Africa.
The region—often associated with civil war and terrorism—is seemingly on the brink of collapse, and few have batted an eye at what could be catastrophic. Just last month, Boko Haram terrorists successfully struck Chadian military forces leaving 92 dead and dozens more wounded, in what is being called the deadliest attack in the history of the African nation’s military. The terrorist group is infamous for its 2014 capture of 276 school girls in northern Nigeria, and it has since expanded into Chad, where its forces have periodically carried out attacks against government forces, citizens, and villages.
The insurgence of Boko Haram in Chad is not all that stands in the way of progress for the region. Last year’s destabilization in both Sudan and Algeria also posed significant risks for the region because they are two of the most populous states in the region—a destabilization that terrorist groups, like Boko Haram and Al Qaeda, could quickly exploit. The political instability in these states is particularly significant because of the impact that their fall would have on the region. The lack of wealth and rise in the popularity of extremist values among the population places the region in peril. This is because of the already volatile nature of conflict in the surrounding states whose full effect may be perpetuated if a collective fall of states were to occur.
This upward tick in the movements of terrorist cells both within and through the borders of Northern Africa is not just perilous for one ethic group, one state, or the whole region. The combination of this terrorist movement and the many important, but resource-based economies, is troubling for the rest of the world.
In Algeria, oil prices are just above $20 per barrel. Compared with this year’s governmental estimates banking on $50 per barrel, the economic outlook is bleak as inconsistent foreign investment leaves the state. Weakening economies combined with a small private sector and already high unemployment rates have historically precipitated crises for these states and others in the global south. This historic drop in regional oil prices is crippling and allows for the aforementioned terrorist groups to capitalize upon this instability.
In understanding the implications of these threats on the US domestic market, we should recall a crisis many would like to forget: the Global Financial Crisis of 2008. The combination of the housing crisis with rising oil prices crushed the American economy. Today, the similarities between then and now are striking, and even somewhat scary. It must be considered that with every factor dampening economic progress today, if Northern Africa witnesses a domino effect that may befall the region if Chad, Libya, and Algeria stutter, the already damaged American economy will feel much of the fallout. If these and other states were to fall, the adverse effects on the US economy would not come from a lack of trade with these states; they have relatively tiny economic output compared to that of the US. The foreseeable effect on the US economy would stem from the debt those states go in to try and meet the basic living and infrastructure needs of their citizens. Both Algeria and Libya are members of OPEC, meaning they sit on a board of oil producing states whose task it is to monitor and set international oil prices as the group controls collectively more than 80% of the world’s oil reserves. A debt crisis among an entire region of states often dependent on the sale of oil would almost surely mean a huge spike in oil prices, an effect American consumers would surely feel.
To protect the interests of our nation, and all those as dependent on foreign oil as we are, action must be taken. Progress in the region does not beg for conflict, but further integration onto the world stage. Though this is an idea as old as African independence, the approach has historically been flawed. Since the popularization of the idea of assisting African nations in the west, tens of billions of dollars have been spent by governments, individuals, and NGOs in an effort to help African states overcome more than a century of economic oppression, with little to show for it. The nature of conflict has largely stayed the same in the region, but efforts for economic development have faltered. The world has consistently watched people, organizations and governments attempt to alleviate this economic disparity by addressing the symptoms of the abject poverty much of the continent endures that eventually lead to economic failure and religious radicalization and fanaticism. One popular idea among economists who recognize this failure is that of microfinance. Microfinance lenders are small, locally run banks that give small loans to local entrepreneurs upon which they can lift themselves out of poverty on their own terms. This solution to development allows for financial independence in those states that are so often in debt and on the brink of failure–a cyclical process that often ends up with states across the world being burned.
COVID-19 is bad, but it is just the tip of the iceberg in this and coming crises. The economic fallout potential now and in the future must be addressed in a part of the world that many overlook: Northern Africa.