Outlook for 2011-12

Despite popular uprisings sweeping across the region as people agitate for democratic expression and employment opportunities, the president, Mohamed Ould Abdel Aziz, will continue to consolidate his grip on power. However, increased political activism-which may be beneficial for the country's long-term democratic prospects-has increased the outlook for political instability in the short term. That said, the ruling Union pour la République (UPR) is expected to win a majority of seats in the municipal and legislative elections scheduled to take place in 2011, consolidating Mr Abdel Aziz's control over legislation. Aid pledges have begun to materialise and the current-account deficit will narrow to 5% of GDP in 2011, before widening slightly to 6.2% of GDP in 2012 as a result of increased imports to finance mineral and hydrocarbon exploration and increased public investment. Moreover, mining, private investment and greater emphasis on capital spending in the national budget will boost economic growth, which is forecast to pick up further, to an average of 6.2% a year in 2011-12.

The political scene

A Mauritanian named Yacoub Ould Dahoud, imitating the Tunisian street vendor who ignited the popular uprisings in the region, set himself on fire in front of the presidential palace in the capital, Nouakchott, on January 17th. This started a period of heightened political tension: a youth movement, called the February 25th Movement, has formed; worker's unions have demanded improved working conditions; and single-issue protests, such as for access to water in the east of the county, degenerated into open fighting between protestors and security services. The protestors, however, have so far failed to reach a critical mass that would threaten the regime.

Economic policy

Clearly mindful of the wave of social unrest sweeping across North Africa, the government has announced various populist measures over the past several months. The largest programme, a food-production and -subsidy scheme, dubbed Opération solidarité, was announced by the president on January 20th.

The domestic economy

According to a report by a US government humanitarian agency, the Famine Early Warning Systems Network (Fewsnet), malnutrition declined during 2010.

Foreign trade and payments

Mauritania continued to receive disbursements on aid agreements signed in mid-2010.

Land area

1,030,700 sq km

Population

3.3m (UN 2009 estimate; 2.5m in December 2000 census result)

Main towns

(Population estimates 2009, World Gazetteer)

Nouakchott (capital): 798,725

Nouadhibou: 113,400

Kiffa: 80,612

Climate

About 80% desert (less than 200 mm rainfall per year); only the southern extremity supports rain-fed vegetation; temperatures average more than 25°C, with wide daily and seasonal fluctuations

Weather in Nouakchott (altitude 21 metres)

Hottest month, September (24-34°C); coldest month, December (13-28°C); irregular rains occur from July to October

Languages

Arabic (official), French, Pular, Soninké, Wolof

Measures

Metric system

Currency

Ouguiya (UM)

Time

GMT

Public holidays

Fixed: January 1st (New Year), May 1st (Labour Day), May 25th (African Unity Day), July 10th (Armed Forces Day), November 28th (Independence Day); all Islamic holidays are observed in accordance with the lunar calendar, which means that the following dates are approximate: Mawlid al-Nabi (the birthday of the Prophet, February 15th 2011); Eid al-Fitr (end of Ramadan, August 30th); Eid al-Adha (Feast of the Sacrifice, November 6th); Islamic New Year (November 26th)

Official name

République islamique de Mauritanie

Form of state

Arab and African Islamic republic

Legal system

Based on the 1991 constitution, strongly influenced by sharia (Islamic law)

National legislature

The bicameral parliament consists of the Senate, with 56 members, and the National Assembly, with 95 seats

National elections

July 2009 (presidential), November 2009 (legislative); next municipal elections and National Assembly elections in 2011 and presidential election in 2014

Head of state

Mohamed Ould Abdel Aziz

National government

On July 18th 2009 the leader of a military coup in August 2008, Mohamed Ould Abdel Aziz, won a presidential election in one round of voting, securing 53% of the vote; following his election, Mr Abdel Aziz appointed a new government

Main political parties

The main political parties are: Union pour la République (UPR); Parti républicain pour la démocratie et le renouveau (PRDR); Rassemblement des forces démocratiques (RFD); Union des forces du progrès (UFP); Alliance populaire progressiste (APP); Union pour la démocratie et le développement (UDP); Rassemblement pour la démocratie et l'unité (RDU); Parti mauritanien pour l'union et le changement (Hatem); Front populaire mauritanien (FPM); Pacte national pour la démocratie et le développement (PNDD); Union des forces démocratiques (UFD); Alliance pour la justice et la démocratie/Mouvement pour la rénovation (AJD/MR); Rassemblement national pour le renouveau et le développement (RNRD or Tawassoul); El Wiam

Prime minister: Moulaye Ould Mohamed Laghdaf

Key ministers

Civil service: Comba Ba

Culture, youth affairs & sports: Cissé Mint Cheikh Ould Boyde

Defence: Ahmedou Ould Idey Ould Mohamed Radhi

Economic affairs & development: Sidi Ould Tah

Education: Ahmed Ould Baya

Energy, oil & mines: Taleb Ould Abdi Vall

Finance: Thiam Diombar

Fisheries & maritime economy: Ghdafna Ould Ehih

Foreign affairs & co-operation: Hamadi Ould Hamadi

Health: Housseynou Hamady Ba

Infrastructure, urban planning & housing: Ismail Ould Bedde Ould Cheikh Sidiya

Interior & decentralisation: Mohamed Ould Boilil

Justice: Abidine Ould el Khair

Rural development: Brahim Ould M'bareck Ould Mohamed El Moctar

Trade, tourism & crafts: Bomba Ould Daramane

Transport & equipment: Yahya Ould Hademine

Central Bank Governor

Sid'Ahmed Ould Raiss

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Overall, the Economist Intelligence Unit's central forecast remains that the president, Mohamed Ould Abdel Aziz, will remain in power until the next presidential election, in 2014, despite the protests sweeping across the region. However, the outlook for political instability has risen markedly in the past several months. Supporting the president is the fact that he won an election, which was generally endorsed as fair by independent observers. Although most opposition parties still cry foul over the poll and the fact that it derived from a military coup, the issue no longer resonates with the wider public, which mostly accept that Mr Abdel Aziz's election was fair or is at least a fait accompli to be accepted grudgingly. Somewhat hindered by the country's low population density, so far the February 25th Movement, a youth movement inspired by the mass protest movements elsewhere in the Arab world, has not developed a critical mass so as to threaten the existence of the regime through the street, and the movement has not engaged the regime in genuine dialogue to advance practical issues such as electoral reform.

The government's campaign against a regional Islamist terrorist group, al-Qaida in the Islamic Maghreb (AQIM), is expected to reduce the number of attacks perpetrated by the group. In addition, the positive outlook for economic activity and foreign aid inflows will reduce the potential for popular unrest, as this will have a positive impact on local livelihoods (although it may be unevenly distributed) and development spending. Furthermore, the opposition appears to be increasingly willing to negotiate with the regime rather than simply insist that the election of Mr Abdel Aziz in 2009 was illegitimate.

The primary threat to the stable forecast stems from the handling of popular protests. The government has attempted to placate protestors by offering to increase civil service recruitment and by subsidising food prices. However, poor handling of local single-issue protests (such as the recent water shortage protests in Vassala) and of violent repression of February 25th Movement protests may undermine the regime's credibility and generate support for the movement. Moreover, although the opposition political parties have preferred to follow events rather than lead them, a popular and credible leader such as Messaoud Ould Boulkheir-the leader of the Alliance populaire progressiste (APP), the National Assembly president and the leading runner-up in the 2009 presidential election-may be able to crystallise support against the regime, particularly if the National Assembly elections scheduled for the end of April are considered to be unfair.

The other threats to the positive outlook stem from AQIM and, to a lesser extent, the military. On the first point, the government will continue to pursue a carrot-and-stick approach to AQIM and militant Islam, targeting AQIM militarily while offering amnesties to militants. We expect this strategy to succeed in limiting AQIM's capacity to carry out attacks and to recruit. However, although the number of attacks is expected to diminish, they will not cease altogether, given the difficulty of policing the vast desert areas where AQIM operates. Furthermore, there is considerable opposition among both nationalist and mainstream Islamist groups to the involvement of Western intelligence and security services in the government's campaign against terrorists. Invaluable though such foreign support is, it could turn popular opinion against the campaign, particularly if civilians are harmed during joint operations. The terrorists, aware of this, will continue to portray themselves as national defenders against "infidel" invaders, despite the fact that their own ranks comprise many foreign militants. Furthermore, a recent assassination attempt against the president, although apparently poorly organised, highlights the institutional risk of the concentration of power in a single figure. The president, who is a former general, still commands the respect of the army. However, another coup attempt cannot be ruled out altogether, given Mauritania's recent history of military interventions in politics.

Following Mr Abdel Aziz's victory in the presidential election, the ruling Union pour la République (UPR) has evolved from a hastily constructed vehicle of presidential power into a fully fledged political party. The president's campaign against terrorism and his tough rhetoric on fighting corruption in public service has increased his popularity. Moreover, the return to constitutional rule has been associated with the return of global economic growth, a coincidence that Mr Abdel Aziz will take advantage of to strengthen his popularity. Meanwhile, the main opposition alliance, Coordination de l'opposition démocratique (COD)-which formed in response to Mr Abdel Aziz's presidential victory-is fragmenting. At the outset the COD refused to accept the legitimacy of the president, and it has been side-stepped by the regime in policymaking and weakened by defections to the presidential camp. The COD has since indicated that it is willing to negotiate with the president, but it will do so from a weakened bargaining position and may alienate its members in the process. In the National Assembly election scheduled for end-April 2011 the UPR is expected to build on its performance in the 2009 presidential election, gaining a majority of seats in local councils and the parliament. However, there is a possibility that opposition parties will find a way to harness popular discontent to increase their support in the polls.

Mauritania's international relations may be strained by unfolding events in North Africa. Mauritania hosted a high-level African Union (AU) committee on March 19th-at the same time as a meeting in Paris attended by the UN, the Arab League, the US and European nations to discuss a no-fly zone over Libya-which was seen as a deliberate snub by Mr Abdel Aziz and the AU in favour of Libya's leader, Muammar Qadhafi. However, at this stage we do not think that Europe (Spain and France in particular) or the US will jeopardise their close relations with Mr Abdel Aziz, for the sake of their strategies to reduce illegal immigration and to combat terrorist activities in the region. Relations with China, now Mauritania's largest trading partner, are set to become closer, especially in the development of ancillary infrastructure for the oil industry. Economic and political ties with the Arab world will strengthen, particularly following recent generous aid pledges to Mauritania.

The government's closer collaboration with Algeria in the fight against AQIM may strain historically strong ties with Morocco, which resents Algeria's stance in relation to the disputed region of Western Sahara. Following the suspension of diplomatic ties with Mali in 2010, in protest at the supposedly soft line taken by the Malian authorities towards AQIM, ties have been restored and co-operation in the fight against terrorism will continue to increase.

The government is expected to finalise a new poverty reduction strategy paper (PRSP)-a national development strategy that is often required for development programmes with the IMF and World Bank-before the middle of 2011, and a draft has already been shared with key development partners. In addition to improvements in the provision of basic public services, such as healthcare and education, the government will focus on efforts to maintain economic stability and improve the efficiency of the public administration, as well as improving energy and transportation infrastructure to reduce the cost of exploiting the country's natural resources. Protests across the country, along the lines of protests elsewhere in the Arab world, have also led the government to offer large food price subsidies as well as promises of public-sector job creation to employ educated youth. The government will continue to engineer popular public-spending projects in the next six months in order to placate protestors.

In September 2010 the IMF concluded the first review under the extended credit facility (ECF), which resulted in the disbursement of SDR11m (US$17m), given an overall positive assessment. The programme with the Fund identifies a number of structural reforms, to improve the prudential oversight of the banking sector and to restructure public enterprises, although the government may struggle to reach quantitative performance criteria related to fiscal consolidation in advance of the 2011 legislative elections.

The government budget law for 2011 accounted for expenditure of UM269bn (US$984m), rather than the UM500bn reported in the local media. However, the total budget is estimated to reach UM400bn, UM130bn of which is not included in the budget law and will be financed by external grants and loans that were agreed in June 2010 during a donor-government roundtable in Brussels. Efforts to restrict the recurrent spending are likely to be frustrated in the face of popular expressions of discontent with the regime and several populist policy announcements. Military spending will also increase as the president seeks to maintain the loyalty of the armed forces and as the country's fight against terrorism continues. The capital budget will be expanded heavily, although absorptive capacity constraints will limit its execution and will result in an under-execution of the overall capital and recurrent budget, by roughly 5%, which still represents a 30% increase in spending from 2010.

Mauritania's revenue will be boosted by the aid bonanza, a large share of which the government has already received. In addition, a mining conference held in mid-November led to a spate of new mining permits being purchased, which will boost revenue. Moreover, economic activity is forecast to improve further in 2011 and 2012, which will support the tax base. In view of these trends, we expect the fiscal deficits to fall, from an estimated 4.1% of GDP in 2010 to 1.3% of GDP in 2011. The deficit will then return almost to balance in 2012, recording a deficit of 0.6% of GDP as donor inflows remain strong and commodity prices buoyant.

The ECF with the IMF has committed the government to greater prudence in monetary policy. In particular, the Fund will seek to promote improved co-ordination of monetary and fiscal policies. Although the IMF supported the cautious and gradual easing of monetary policy to underpin recovery, it has cautioned against further policy loosening to maintain low inflation expectations. However, supporting the banking sector and economic growth will be prioritised over containing inflation during the forecast period. As a result, the repurchase (repo) rate is expected to remain at around 9% in 2011, before increasing by 100 basis points towards the end of 2012. Although foreign reserves fell slightly in the first quarter of 2010 (from US$225m in December 2009 to US$211m in March 2010, the latest figures available), reserves are expected to increase modestly over the forecast period in line with financial inflows, although they will remain well below three months of import cover.

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The resumption of donor support in 2009 will remain on course, contingent on political stability, as will the inflow of foreign direct investment. Economic growth is therefore expected to pick up in 2011-12. Non-ferrous metals exploration and investment will be a major driver of growth. Oil exploration will also contribute to economic growth, but the lag between prospecting for viable oilfields and their coming on stream means that overall oil production is expected to continue to decline in 2011. Agricultural output will remain broadly steady owing to continued government neglect of the sector, with the exception of fisheries, where the total catch is expected to maintain the upward trend reported in recent years.

Global commodity prices are forecast to remain strong in 2011 and, to a lesser extent, 2012, following their sharp rebound in 2010. This has heightened investor interest, and exploration and output from the non-oil minerals sector will support the medium-term growth outlook. This will hold particularly for non-ferrous metals, such as copper and gold, which have witnessed rapid growth since production began in 2006. Investor interest in uranium mining will also remain strong, as prices continue to be well above historical levels; we expect that a fall in the price of uranium following a nuclear leak in Japan will be temporary. The national iron producer, Société nationale industrielle et minière (SNIM), has received funding for its large investment programme and will oversee construction and expansion activities costing over US$1bn over the next five years. A master plan for the electricity sector has been finalised and the national electricity company will be restructured and recapitalised with the support of donors. Dynamic services such as banking and telecommunications will grow, as firms that were previously deterred from expanding operations will now have more confidence in the regulatory environment and the government's willingness to honour contracts. Overall, we forecast real GDP growth of 6% in 2011, picking up further, to 6.3%, in 2012.

Historically, consumer prices have broadly tracked movements in prices for international commodities, particularly food and fuel, given that they account for such a large proportion of household spending and that reliance on imports of these commodities is high. In this respect the expected mild appreciation of the ouguiya will help to contain inflation. However, global food, feedstuffs and beverage prices are expected to increase by 28.9% in 2011. On balance, we expect that annual average consumer price inflation will pick up slightly, to 6.5% in 2011, before falling back to 6% in 2012. However, there are significant risks to this forecast, and inflation will be much higher if the ouguiya appreciates less than currently expected (or not at all) or if unfavourable weather conditions lead to higher international food prices, which made up 22.3% of the import bill in 2009, according to the IMF.

The average ouguiya:dollar exchange rate depreciated during 2010, although it appreciated slightly between the third and fourth quarters. We expect that, despite the Mauritanian government's obvious preference for exchange-rate stability with the dollar, the exchange rate will appreciate slightly over the next two years as a result of the large influx of foreign exchange, the outlook for increased foreign direct investment and exports. As a result, we forecast that the exchange rate will appreciate to an average of UM273.3:US$1 in 2011 and further to UM267.8:US$1 in 2012.

Exports, dominated by oil and other minerals, are expected to remain strong in 2011-12, although the trade surplus will remain roughly constant in 2011 and slide into a deficit in 2012 as imports are boosted by increased oil and gas exploration as well as public investment. The country's dependence on imported services is expected to increase over the forecast period, again primarily as a result of increased activity in the hydrocarbons sector. Meanwhile, tourism receipts are expected to remain depressed given the media attention on recent terrorism attacks in Mauritania. As a result, the deficit on the services account is expected to widen in 2011-12. The income deficit is set to remain broadly stable, as repatriation of foreign firms' profits will not rise significantly until new oilfields come on stream. Renewed ties with the country's donors-coupled with an increase in remittances from expatriate Mauritanians as developed economies return to growth-will lead to an increase in the current transfers surplus to US$346m in 2011 and US$421m in 2012. Overall, the current-account deficit is forecast to narrow from an estimated 8.8% of GDP in 2010 to 5% of GDP in 2011 (driven by the transfers balance), before returning to 6.2% of GDP in 2012 as imports outpace exports. There will be no difficulties financing the current account, as the capital account will post a large surplus owing to high foreign investment in the extractive industries.

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Following the spontaneous popular uprising in Tunisia that led to the overthrow of the country's long-serving president, Zine el-Abidine Ben Ali, unrest quickly spread across the Middle East and North Africa as citizens agitated for greater freedom. The spark for the uprising in Tunisia was the self-immolation of a street vendor, Mohamed Bouazizi, in the town of Sidi Bouzid in central Tunisia, on December 17th. Aspiring martyrs across the region, inspired by Mr Bouazizi, emulated the act in the following weeks and months, drawing attention to their own lack of democratic expression and poor standard of living. A Mauritanian named Yacoub Ould Dahoud, a 40-year-old who was reportedly from a well-off family, set himself on fire in front of the presidential palace in Nouakchott, the capital of Mauritania, on January 17th. A suicide letter published on a social networking site, Facebook, which has been used across the region for communicating and organising the popular movements, indicated that he sought to motivate his countrymen to demand peaceful constitutional reform. Mr Dahoud's suicide and the sight of mass protest movements elsewhere in the Arab world inspired a period of popular protest in Mauritania that has yet to either fully abate or gather sufficient momentum to seriously threaten the regime.

Three days after Mr Dahoud's self-immolation, the president, Mohamed Ould Abdel Aziz, announced an extensive price subsidy and agricultural production programme to control living standards, particularly for the urban poor. This appears to have been a direct attempt by the regime to pre-empt Mr Dahoud's actions from catalysing a groundswell of support against the regime, as his suicide note called on the government to monitor the "obscene price hikes" of staple food items. In addition to the immediate promise to control food prices, the government announced that it would recruit 250 more civil servants (a move calculated to pacify educated yet unemployed youth), and that it would build new homes for an implausibly large number of families, 100,000. The latter initiative is unlikely to be achieved on anything like the scale promised. However, the government's intention is probably to provide the short-term prospect of so many new homes-and employment of unskilled labour to build them-to prevent the urban poor from threatening the regime.

Despite the president's attempts to placate the population, sympathetic youth gathered at the airport to greet Mr Dahoud's remains when they returned from Morocco, where he had died in hospital, and several single-issue protests have taken place over the past months. Complaints over water shortages in the eastern province of Hodh ech Chargui on February 18th, for example, escalated into open conflict between local tribesmen and the police-and later the military. Fighting erupted after the prefect apparently insulted protestors, and the military had to be called into the town of Vassala to control protestors after they set fire to the town hall. Local media reported that several protestors had been beaten and arrested.

Unions have also become agitated in the past quarter. On February 13th the country's main unions-the Confédération nationale des travailleurs de Mauritanie, the Confédération générale des travailleurs de Mauritanie and the Confederation libre des travailleurs de Mauritanie--demonstrated in Nouakchott, Nouadhibou, Zouérate, Aleg and elsewhere to demand dialogue with the government over better working conditions. In mid-March healthcare workers threatened to strike on April 7th unless the government increased their pay and provided better equipment. The union demonstrations passed off peacefully, a sign that the government views the unions as an organised force that it must treat carefully. In a further sign of the fragility of domestic political stability, a regional Islamist terrorist group, al-Qaida in the Islamic Maghreb (AQIM), claimed responsibility for a failed attempt to assassinate the president in early February, during which over a dozen soldiers were injured.

In addition to the single-issue protests, youth inspired by the mass protest movements elsewhere in the Arab world organised nationwide demonstrations on February 25th to express discontent with political, economic and social conditions. Disaffected young people sent out calls to demonstrate in central squares through social networking websites-such as Twitter and Facebook-and mobile-phone text messages. The protestors' demands were wide-ranging and generally related to grievances such as the lack of jobs and the rising cost of staple items. A common list of demands that has circulated on social networking sites is similar in nature to Mr Dahoud's suicide note, calling for:

• the complete withdrawal of the military from politics;
• a practical separation of powers between the legislative, judicial and executive branches of government;
• strengthened national unity and the establishment of a national agency to eradicate slavery;
• sweeping constitutional amendments, including the reform of the electoral system;
• a public declaration of government officials' assets;
• the abolition of an appointed regional prefect-level administrative post (Haakem); and
• elections, rather than appointments, for director-level civil servants.

The protests were small in scale-comprising a few thousand demonstrators in Nouakchott and a few hundred demonstrators at most in each of the other locations-and passed off relatively peacefully, with few arrests or allegations of police brutality. However, official patience with subsequent protests proved finite on March 8th, when efforts to stage a fourth day of protest were thwarted by the police, who prevented demonstrators from gathering in the main square of Nouakchott, Place des Blocs, on the grounds that the protest lacked proper authorisation. In other towns the security services broke up protests in similar fashion and made arrests. Videos of police brutality circulated on social networking sites. One video showed a protestor in foetal position being beaten by several police officers and then thrown into the back of a police truck. Inevitably, the heavy-handed reaction by the government only served to stoke the anger of the protestors. So far, the protestors have refused to negotiate with the regime, hopeful that they will be able to force concessions from the street. However, the protestors have so far failed to reach a critical mass that would threaten the regime.

While much of the world was deliberating over the imposition of a no-fly zone over Libya in Paris on March 19th-a meeting that included the UN, the Arab League, France, the US and other NATO countries-Mauritania hosted a high-level African Union (AU) committee on Libya that included the host country, a handful of African presidents and envoys and the head of the AU commission, Jean Ping. The so-called Nouakchott meeting was seen by many as a snub to the European-led effort-as the AU had been invited to participate in the Paris meeting held on the same day-but it primarily served to highlight the AU's impotence when confronted with conflict and human rights violations on the continent. Notably, the communiqué for the Nouakchott meeting expressed "regret" at not being able to, "as they had envisaged", travel to Libya to meet with the Libyan government as a result of the no-fly zone that the Paris meeting had implemented.

Soon after the failed Nouakchott meeting the president dismissed Naha Mint Hamdi Ould Mouknass as minister of foreign affairs and co-operation and replaced her with the minister of defence, Hamadi Ould Hamadi. Speculation is rife that the president was displeased with Ms Mouknass as a result of the poorly organised AU meeting. Ahmedou Ould Idey Ould Mohamed Radhi replaced Mr Hamadi as defence minister. Mr Abdel Aziz also replaced the minister of health, demoted the minister of finance, Amedi Camara, after only two months in the job, and appointed the former head of the national mining company, Société nationale industrielle de Mauritanie (SNIM), as the head of the newly constituted Ministry of Energy, Oil and Mines. It is unclear whether these appointments indicate any discord within the government as a result of sympathy with the February 25th Movement. Such internal disunity is an unlikely explanation given the limited number of desertions by officials. High-level civil servants, military leaders and diplomats have defected elsewhere in the Arab world in a show of solidarity with protestors. So far in Mauritania the highest-level casualty of the protests has been the mayor of Aoujeft in central Adrar region, and even that may have had more to do with the handling of a severe outbreak of Rift Valley Fever (a viral infection of animals that is commonly spread through mosquitoes and may also affect humans).

Clearly mindful of the wave of social unrest sweeping across North Africa, the government has announced various populist measures over the past several months. The largest programme, a food subsidy scheme dubbed Opération solidarité, was announced by the president on January 20th-three days after Yacoub Ould Dahoud set himself on fire in the capital, Nouakchott, in protest against the regime. Under the scheme, 600 government-established shops, 250 of which are in the capital, will sell a one-day family ration of imported rice or wheat, sugar and oil at prices roughly 30% below market rates until June 2011-control of such prices was a key demand in Mr Dahoud's suicide note. The scheme was reportedly well received at first. However, stocks per shop are sufficient for only 200 families, and the distance that some rural families in need of assistance would need to travel makes the journey prohibitive. Moreover, as a US government humanitarian agency, the Famine Early Warning Systems Network (Fewsnet), points out in a recent report, the impact of the programme on livelihoods will be limited by the fact that it is due to end prior to the lean, pre-harvest months of August and September.

In addition to subsidising consumer prices for staple foodstuffs, Opération solidarité will target improvements in agricultural production. The programme includes a new government scheme for buying local cereal produce, supplying farmers with good quality inputs and improving irrigation infrastructure. In late March the government announced that the total cost of the programme would be UM26.6bn (US$97m; over 2% of GDP), of which some UM1.7bn has been pledged by the Japanese government. At least 80% of the programme will be funded by additional domestic revenue sources identified by the government: taxes, land sales and a levy on the national oil fund, and probably also through under-execution of the capital budget.

In addition to replacing his minister of foreign affairs, the president, Mohamed Ould Abdel Aziz, has reorganised the ministers responsible for key economic policymaking. Notably, Mr Abdel Aziz combined mining, oil and energy into a single ministerial portfolio and appointed Taleb Ould Abdi Vall, the former head of the national mining company, Société nationale industrielle de Mauritanie (SNIM), to manage it. Mr Abdi Vall is well placed to be energy minister by dint of both his experience and his training. He has a doctorate in geology and has considerable experience of the sectors encompassed by his new ministerial portfolio, gained not only at SNIM but also as the chief executive of the national electricity utility, Société mauritanienne d'électricité, and as a senior employee of the UK-Australian mining giant, Rio Tinto. However, an industry newsletter, Africa Energy Intelligence, has speculated that, in addition to his having extensive skills and experience, the fact that Mr Abdi Vall hails from the economically powerful but politically under-represented Idawali clan may have been a contributory factor in his appointment. Merging the oil, mining and energy portfolios under one ministry should allow for better co-ordination between these three crucial sectors. It could also allow for economies of scale in terms of administrative staff, although given that the government has announced its intention to create 250 new civil service posts to appease youthful protestors, this may not come to pass. Meanwhile, taking over from Mr Abdi Vall at the helm of SNIM is Mohamed Abdallahi Ould Oudaa, who has twice served as mines and industry minister, as well as working for ten years at SNIM itself. On being appointed, Mr Ould Oudaa, an electrical engineer by training, announced that his priorities included boosting the company's operational capacity, improving and diversifying research, and responding to the threat posed by competitors.

Also notable was the promotion of the budget director and former treasurer-general, Thiam Djombar, to the position of finance minister. He replaced Amedi Camara, who was demoted to minister-delegate for the environment and sustainable development after just two months as finance minister. The reasons for his swift ejection from the Ministry of Finance are not clear, but may relate to the confusion over the 2011 budget (January 2011, Economic policy). One of Mr Djombar's first acts in office was the popular announcement of a temporary relaxation of import restrictions on various classes of automobile.

According to a report by the Famine Early Warning Systems Network (Fewsnet), funded by the US Agency for International Development (USAID), published in late February, the availability of food in early 2011 was the best for five years. In addition to the government's recently announced food-subsidy programme, Opération solidarité, food availability has improved in neighbouring countries and the local production of coarse grains was "excellent", according to Fewsnet. Despite rapidly rising international food prices, improved production has led to a fall in prices for sorghum in key markets, particularly in southern Mauritania, compared with early 2010. Fewsnet expects no acute food insecurity in most of the country in the first quarter of 2011, although food insecurity is expected to be moderate in the areas surrounding the capital, Nouakchott, and in the second-biggest city, Nouadhibou. Fewsnet does not expect this picture to change in the second quarter, except for a pocket of moderate insecurity emerging in the area of the Senegal River valley south of Aleg. The positive news will probably be used by the regime as it tries to demonstrate its effectiveness at improving living standards.

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Agricultural results have not been positive across the board. An outbreak of Rift Valley Fever (RVF) in late 2010 in the central-northern area around Atar, Aoujeft, and Chinguetti has led to sharp reductions in many pastoralists' herds. Fewsnet estimates that up to 20% of the livestock was killed in the infected areas and that the rate of livestock miscarriage has increased significantly. Although this has dealt a severe below to the livelihoods of herders, it has been mitigated to some extent by the extra income derived from agricultural labour, demand for which has increased. According to data from the UN Children's Fund (UNICEF) published in the Fewsnet report, the RVF outbreak did not lead to an increase in malnutrition in the affected areas. Nationally, estimates of malnutrition dropped or remained steady between July 2010 and January 2011 in all areas except Nouadhibou, where a slight rise may be attributable to the seasonal ban on fishing in August-October, which reduces household incomes for the duration.

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The prospects for uranium mining in Mauritania remain strong despite the recent catastrophic earthquake and tsunami in Japan, which caused radiation leakages at nuclear reactors there and a sharp fall in the price of uranium. The disaster has led many governments worldwide to announce their intention to review plans to build nuclear power stations, the main market for uranium. In the days following the damage to the Japanese nuclear reactors, global uranium prices fell by roughly 10%, to below US$60/lb. According to a uranium sector analyst, Sydney Warwick Grigor-quoted by an Australian magazine, Business Spectator-US$60/lb is the minimum price to encourage investment in new mines. However, The Economist Intelligence Unit expects the market for uranium to recover, as it remains the most practical alternative to increased dependence on polluting fossil fuels. The sector currently accounts for close to 14% of global electricity generation, and several countries, notably China and India, have ambitious plans to build new power stations; China aims to increase its nuclear generation capacity by 700% by 2020. If anything, the disaster in Japan will lead to heightened safety standards and may be used as a justification, in China's case, for a lowering of targets to more achievable levels. Overall, while uranium prices may remain suppressed in the short term, the price is expected to recover and to support Mauritanian production. Meanwhile, by late March, Forte Energy-an Australian-owned company that has been conducting surveys in Bir en Nar, Zednes region, in the north of the country (January 2011, The domestic economy)-had completed 17 test drills and reconfirmed their previous positive results.

Over the past quarter Mauritania has continued to receive disbursements on agreements that were signed during a donor-government roundtable that was held in Brussels in June 2010 (October 2010, Foreign trade and payments). Of the US$3.1bn pledged, 20% has reportedly been disbursed to the government. This is already sufficient to finance the UM130bn (US$476m) externally financed development budget for 2011-equivalent to roughly 48% of the domestically financed budget.