The Future of Korea's Trade and Business Portfolio in North Africa: A Deep Horizon Political Economy Scan of Algeria, Morocco and Tunisia

Abstract

Since 2000, Korea's trade volume with North Africa has increased to over $15 billion and a trade surplus of $7 billion. However recent political unrest across North Africa, especially in Algeria, Morocco and Tunisia, could threaten to significantly impact Korea's trade, investment and diplomatic activities across the region. As economists have long established the relationship between political stability, economic growth and foreign direct investment, this study performs a deep horizon scan on domestic political stability in Algeria, Morocco and Tunisia. We use an agent based computational economics (ACE) model called SENTURION to anticipate likely political stability outcomes, scenarios and potential macroeconomic impact. We then offer specific policy and investment advice for Korean business, trade and investment activities in each country, focusing on risk, sectoral and investment strategies given likely political and macroeconomic performance and resiliency in each country.