Economy of Mauritania

Economy - overview:A majority of the population still depends on agriculture and livestock for a livelihood, even though most of the nomads and many subsistence farmers were forced into the cities by recurrent droughts in the 1970s and 1980s. Mauritania has extensive deposits of iron ore, which account for almost 50% of total exports. The decline in world demand for this ore, however, has led to cutbacks in production. With the current rise in metal prices, gold and copper mining companies are opening mines in the interior. The nation's coastal waters are among the richest fishing areas in the world, but overexploitation by foreigners threatens this key source of revenue. The country's first deep water port opened near Nouakchott in 1986. In recent years, drought and economic mismanagement have resulted in a buildup of foreign debt. In March 1999, the government signed an agreement with a joint World Bank-IMF mission on a $54 million enhanced structural adjustment facility (ESAF). The economic objectives have been set for 1999-2002. Privatization remains one of the key issues.

Macro-economic trend

This is a chart of trend of gross domestic product of Mauritania at market prices [http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbginim.cfm estimated] by the International Monetary Fund with figures in millions of Mauritanian Ougulyas.

[http://earthtrends.wri.org/text/economics-business/variable-638.html Current GDP per capita] of Mauritania grew 82% in the Sixties reaching a peak growth of 166% in the Seventies. But this proved unsustainable and growth consequently scaled back to 14% in the Eighties. Finally, it shrank by 29% in the Nineties.

Average wages in 2007 hover around $4-5 per day.

Diversification

In 2007, mining industries accounted for well over 95 per cent of the Mauritanian economy.Fact|date=March 2008 Diversification of the economy into non-mining industries remains a long-term issue. Mauritania is a net importer of food, reportedly importing 70% of its domestic food needs. [IRIN 2008, [http://www.irinnews.org/report.aspx?ReportID=77366 'MAURITANIA: Record hunger predicted in 2008'] , "www.irinnews.org", 19 March. Retrieved on 20 March 2008.]

Dispute with Woodside Petroleum

In February 2006, the Mauritanian government denounced amendments to an oil contract made by former leader Maaouiya Ould Taya with Woodside Petroleum, an Australian company. In 2004, Woodside had agreed to invest $US 600 million in developing Mauritania's Chinguetti offshore oil project. The controversial amendments, which Mauritanian authorities declared had been signed "outside the legal framework of normal practice, to the great detriment of our country", could cost Mauritania up to $200 million a year, according to "BBC News". Signed by Woodside two weeks after the February 1, 2005 legislation authorizing the four amendments, they provided for a lower state quota in the "profit-oil", and reduced taxes by 15 percent in certain zones. They also eased environmental constraints, and extended the length and scope of the exploitation and exploration monopoly, among other measures.

The disputed amendments were signed by former oil minister Zeidane Ould Hmeida in February 2004 and March 2005. Hmeida was arrested in January 2006 on charges of "serious crimes against the country's essential economic interests".

Nouakchott's authorities declared that the government would likely seek international arbitration, which Woodside (which operated for Hardman, BG Group, Premier, ROC Oil, Fusion, Petronas, Dana Petroleum, Energy Africa and the Hydrocarbons Mauritanian Society) also contemplated.

Discovered in 2001, Chinguetti has proven reserves of about 120 million barrels of oil. At the end of December 2005, authorities estimated that in 2006, the oil profits would be 47 billion "ouguiyas" (about US$180 million) and represent a quarter of the state budget, according to "RFI". [ cite news |title=Mauritania and firm row over oil |publisher=BBC News |date=2006-02-06 |url=http://news.bbc.co.uk/1/hi/business/4684836.stmcite news |title=Crise ouverte avec la compagnie pétrolière Woodside |publisher=Radio France International |date=2006-02-06 |url=http://www.rfi.fr/actufr/articles/074/article_41704.asp]

The Australian Federal Police are currently investigating Woodside for allegations of bribery and corruption in Mauritania (according to the Sydney Morning Herald [http://www.theage.com.au/news/business/police-start-woodside-probe-over-bribery-claim/2006/10/12/1160246263011.html] [http://www.smh.com.au/news/business/slick-operator/2006/06/02/1148956541283.html?page=fullpage#contentSwap2] ).

ee also

*Economy of Africa
*Mauritania

References

External links

*dmoz|Regional/Africa/Mauritania/Business_and_Economy/Economic_Development