US State Department May Have Encouraged Algeria Attack

David O. Kuranga, Ph.D.

The author is the Managing Director and Principal of Kuranga and Associates, a full-service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. He is also the author of The Power of Interdependence with Palgrave Macmillan Press.

In an effort to undermine regional efforts to militarily remove militants from Northern Mali that largely came out of Libya, the US State Department Deputy Secretary William Burns appointed Algeria as “lead negotiator in Mali”. The move was a diplomatic “slap in the face” to ECOWAS, the West African regional block that already appointed Burkina Faso as the international lead negotiator almost 6 months prior. While the move was seen as an attempt of the US to undermine the urgent regional call for military action that was supported by France, ECOWAS, and the African Union (AU), it may have had a residual impact that we are now seeing today.

The US has long held a stance of refusing to negotiate with terrorist. However in the case of Mali even their leading military official for Africa Carter Ham, said in the case of the terrorists that occupy Northern Mali “Negotiation is the best way”. I earlier criticized this as an attempt by General Carter Ham, AFRICOMs leader to increase the presence of AFRICOM in Africa. Not only has this served to embolden militant groups in Mali that led to their recent attempts to overrun the Capital of Mali altogether they have also turned and struck inside the territory of the US appointed “lead negotiator” as a way of ending the international operation in Mali. The hypocritical actions of the United States to first endorse a policy of negotiating with terrorists and then select their “lead terrorist negotiator” Algeria may have indeed encouraged the attack in Algeria. While recently the State Department spokeswoman Victoria Nuland repeated that “the United States does not negotiate with terrorist” including those that attacked the oil facility in Algeria which led to the killing of dozens of hostages and Algerian forces, in all actuality they already have. In this case their failed attempts to undermine ECOWAS and delay military action may have caused the tragic deaths of more in Algeria including 3 of their own nationals.

Kuranga and Associates Global Consultancy is a political and economic risk management firm with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2012 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

David O. Kuranga; Ph.D. Managing Director Kuranga & Associates Global Consultancy Phone: 212.363.0936 – Email: david.kuranga@kaglobal.net https://kurangaandassociates.wordpress.com http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga

Algeria & Investment Risks in West and North Africa

David O. Kuranga, Ph.D.

The author is the Managing Director and Principal of Kuranga and Associates, a full-service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. He is also the author of The Power of Interdependence with Palgrave Macmillan Press.

Due to the ongoing operation, all countries that surround Mali in North and West Africa are now subject to the highest levels of security risk. Every mine, oilfield, and infrastructure investment, especially areas with large numbers of foreign nationals are subject attacks from militants allied to the Mali insurgency that originated out of Libya. The ability of the multinational coalition of forces to contain militants may not reduce the risk significantly as their allies may already be spread throughout the region. All governments in the area will need to spend more resources to combat the threat even as many surrounding countries are being forced to use their limited resources to send troops to Mali. Part of the residual affect is the potential for work stoppage. The aftermath of the siege in Algeria may cause investor in the region to become fearful of making future investments preventing any major expansions in the immediate region. Further the governments in the region may find themselves in a position where they need to raise revenue internally to meet security demands and to fund the mission in Mali. This may impact government services or lead to countries seeking higher rents on investors through taxes and fees. This risk will remain heightened in the region for the rest of the year and possibly well into 2014.

In addition to Algeria, Mauritania is the country that is most at risk. Political instability and increased militancy in neighboring Algeria has demonstrated the potential powder keg that could erupt in Mauritania. Further the Mauritanian President may not survive a major security crisis such as the one that occurred recently in Algeria. It is fully possible that the existing political leadership in Mauritania will not survive the war in Mali. Both countries remain at the highest risk levels. Instability in Mauritania is highly likely especially if the conflict in Mali spills over into their territory. Secondly, the situation in Algeria may deteriorate further as security challenges are still likely on the horizon. Finally, Nigeria, and other West African countries may feel the residual impact of the Mali conflict in some form of heightened instability. The Boko Haram terrorist network in Nigeria is known to have close connections with Mali insurgents. This heightened risk level will not change once the operation in Mali is concluded, it will likely continue long after the conflict has ended. Investors in all surrounding countries must remain vigilant and be mindful that what occurred in Algeria is a sign of what is potentially possible throughout the entire region for the foreseeable future.

David O. Kuranga; Ph.D. Managing Director Kuranga & Associates Global Consultancy Phone: 212.363.0936 – Email: david.kuranga@kaglobal.net https://kurangaandassociates.wordpress.com http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga

War in Mali, and so it begins…

David O. Kuranga, Ph.D.

The author is the Managing Director and Principal of Kuranga and Associates, a full-service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. He is also the author of The Power of Interdependence with Palgrave Macmillan Press.

The war to recapture Northern Mali has begun. The military mission is bolstered by French led Air Strikes that are being conducted from bases in neighboring countries. Further several hundred French troops have already arrived in Bamako along with hundreds if not thousands of troops from several neighboring West African countries. The airstrikes and military mission which has already been approved by ECOWAS, the AU, and most recently the UN Security Council was triggered by the military advances made toward the Mali capital, Bamako, by the armed militants that occupy northern Mali since last April. Despite the fact that regional decision-makers elected to engaged in prolonged negotiations with the militant groups, without a credible military threat on the ground, negotiation appears to have succeeded in little but giving time for militant groups to train equip and plan an offensive on the Malian capital. The actions of the militants is a clear rebuke of the Secretary General of the United Nations, his Special Envoy Romano Prodi, the United States lead Africa military official General Carter Ham, and diplomatic representatives that continued to emphasize that negotiations were the best route to dealing with the crisis. The prolonged negotiations appears to have only made things worse, something that is already being felt by the advanced French military that is now actively engaged in an offensive campaign to dislodge them.

African leaders for long had stressed that military action was inevitable and that the armed forces now in Mali, were there as a result of the NATO-led mission in Libya. Thus they called on the international community to support their efforts to eradicate the militant groups from the West African region. From the onset, France appeared to be the only major international player in support of regional efforts. The United Nations, and the United States advocated a passive approach that involved protracted negotiations, even holding elections while militants still occupied Northern Mali. The military advances recently made by militant groups in Mali proved that these strategies were not only futile and unproductive, they would have potentially led to a catastrophic collapse of Mali at the hands of Libyan-armed militants that were forced from Libya by a NATO-backed bombing campaign. The UN Secretary General and his Special Envoy Romano Prodi have all been proved to be completely out-of-touch with the situation in Mali and have very little credibility at this time as a result of their statements and their now embarrassing attempts at down-playing the urgency of the situation there. The usefulness of Romano Prodi as a UN Special Envoy to Mali going forward will be very limited at best. The United States has also gone on the record as also being out-of-touch with the reality in Mali. The assertions made by a top military official that negotiation with the militants and terrorist was the best policy was among the most outlandish positions. In addition top US Military and US foreign service officials, including their UN Ambassador, and Secretary of State, and Deputy State Secretary, that elections in Mali should be held before a military operation only served to give more time for militants to recruit, train, arm and equip fighters and prepare a campaign to overrun Mali altogether.

Moving forward African troops will do most of the direct engagements of the remaining militants on the ground while the French led air campaign will eliminate many of their bases and hideouts from the air. Many of the newly recruited militants will flee Mali if they have not done so already. Only the battle-hardened fighters will remain. While the campaign may take a few months to complete, predictions that the Northern Mali territory cannot be captured in less than six months will prove to be incorrect. The groups that occupy Northern Mali are comprised of some Malians but also many foreigners. The local populations that remained behind do not support them and will not aid them or provide them cover or support. They have destroyed historic monuments, and terrorized the populations with floggings and amputations and other extreme measures not seen in Mali until recently. Thus they face both a hostile population, international airstrikes, and regional forces that will be pursuing them. It is quite possible that they could be routed from Mali much quicker than they were ousted from Libya.

After the military mission, ECOWAS officials will organize a political reconciliation that will unite Mali and bring the country back to a constitutional order. Above all, both militarily and otherwise, the ECOWAS agenda will prevail and will occur as they have outlined. All other parties that do not support it will be edged-out and potentially disgraced unless they change course. This now includes the United States and the United Nations in this case. Their attempts to undermine the ECOWAS and AU mandated agenda was ill-advised and has and will continue to be shown to be futile and unproductive. As I outline in my book; The Power of Interdependence, just like the EU in Europe, the agenda in Africa is set by African supranational organizations, the AU & ECOWAS being prime examples. International actors need to pay closer attention to this phenomenon in order to avoid missteps like the ones taken by the UN Secretary General and the UN Special Envoy Romano Prodi when they down-played the urgency of the situation, openly disagreeing with ECOWAS. Also the US Ambassador Susan Rice and Secretary of State and Under-Secretary Johnnie Carson and William Burns when they tried to appoint Algeria has lead negotiator instead of working with the ECOWAS appointed negotiators in Burkina Faso, and also advocated holding elections and prolonging negotiations instead of engaging the militant groups military as had been advocated by regional leaders, which ultimately failed and proved to be useless.

The political risks to investors in Mali remain high and contrary to some views that believe the military threat to be the greatest political risk, the transition will bring about greater political risks for investors. Once the transition occurs political risks such as rent-seeking taxes and attempts to carve out greater stakes from mining concessions may indeed occur and may be inevitable. The likelihood of this will increase as Mali stabilizes. Further, neighboring countries like Mauritania and Algeria may also face substantial political risks particularly if fighters in Mali flee into their territory and their security forces are forced to engage them. There may indeed be a regime change in Mauritania and lingering instability in Algeria if this occurs. Investors in all these countries should be mindful of the heightened risks that now exists in all these countries and take appropriate steps to manage them.

Kuranga and Associates Global Consultancy is a political and economic risk management firm with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2012 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

David O. Kuranga; Ph.D. Managing Director Kuranga & Associates Global Consultancy Phone: 212.363.0936 david.kuranga@kaglobal.net https://kurangaandassociates.wordpress.com http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga