Event

ECOWAS, the Economic Community of West African States, is to deploy a 3300-strong force in Mali backed by Western training, equipment and logistics in order to free the three northern seceded regions controlled by Islamist groups. As a major regional power, Algeria is being pushed by the Western states to give support to the African force despite Algeria’s fear for spill-overs into the wide area bordering Mali when mingling in the conflict. The threat Salafi rebels pose to the regional stability of Western Africa is of great concern for the UN, United States and the European Union. The recent UN Security Council Resolution does not directly mandate an intervention but calls for greater training and planning assistance towards future military action while a detailed action plan has to be provided by December 2012. As the profoundly weak Malian army still demands to lead the mission, the run-up to the deployment and the actual intervention might encounter additional difficulties and delays. The actual take-off of regional military intervention is not expected before spring 2013.

Impact on country risk

Ever since the UN resolution in October 2012, an implicit acceptance by Western and regional players of Mali’s transitional government  arose despite its weakness, unaccountability and lacking willingness to progress towards restoring democratic institutions while ex-junta members are still comprised. Given their upcoming partnership, the risk for re- imposition of paralyzing economic and financial sanctions by ECOWAS and the Central Bank of West African States against the interim government decreased. Despite the projected economic recession of 4.5% for 2012, export revenues are expected to stay relatively stable given their dependence on resilient gold exports and remittances. Moreover, since the military coup in Bamako (March 2012) and the subsequent secession of the northern states, violence and irregularities in the South stayed limited. Unless Northern violence spills over to the South or sanctions against the government are re-imposed, economic activity is expected to relatively sustain. However, the risk for regional destabilization throughout Western Africa and the displacement of  armed groups is ever more imminent.

Analyst: Louise Van Cauwenbergh, l.vancauwenbergh@credendogroup.com