Political Association and Maghreb Economic Development

Extract

Certain problems and prospects of economic development are common to Morocco, Algeria, Tunisia, and Libya. Any discussion of the Maghreb must consider the restrictive influence of the limited size of the national markets. Perhaps nowhere is this more apparent than in Libya with its population of only about 1, 800,000. Naturally, it is the spending or consuming capacity of that population rather than its actual size which is the limiting factor. Studies by Chenery, amongst others, suggested a national product of $30,000 million as the minimum optimal market size for an economy, with a $300 income per capita.¹ Furthermore, the lower the average income per person, the higher the total national product needed to support efficient manufacturing plants and, particularly, an industry producing capital goods. By the mid- 1960s the independent countries of Africa together had a ‘continental product’ of about $40,000 million, and a population of about 300 million, often with extremely low income per capita. In short, the entire independent continent provides market conditions of just about the minimum optimal size for rapid development; the market of any subcontinental group, and obviously of any individual economy, is less than a quarter of the optimum size. When one considers countries like Chad, Malawi, and Togo, it is a case of national market sizes smaller than those of medium-sized European cities.