US exploring an economic solution to Western Sahara conflict after 50 years of stalemate

King Mohammed VI of Morocco had an unusual outstretched-hand message for Algeria in his recent speech to the nation on Throne Day, when he called for negotiations towards a solution “without victors or vanquished” in the long-running conflict over Western Sahara, a disputed territory in northwestern Africa.

The Moroccan monarch’s appeasing message, which was met with silence in Algiers, coincided with a tour of the Maghreb region by Massad Boulos, President Donald Trump’s advisor and father of Michael Boulos, who is married to one of Trump’s daughters. Boulos had visited Algiers the previous week on a diplomatic mission aimed at “boosting trade” as a way to promote stability in the region.

It also coincided with the announcement that the U.S. government is preparing to authorize major investments by its companies in the Morocco-controlled Western Sahara, considered by the United Nations as a non-self-governing territory (pending decolonization) for half a century. Boulos returned to Washington without stopping in Rabat as originally planned.

In the face of official silence regarding the proposals presented during Boulos’ tour, the U.S. International Development Finance Corporation is preparing to greenlight investments by U.S. companies in Western Sahara, according to the Moroccan news website Le Desk. This U.S. public agency plans investments of up to $5 billion [around €4.315 billion], largely in projects with Moroccan partners, in the sectors of renewable energy, minerals (rare earths), aquaculture and tourism, after having carried out exploratory missions at the end of last year.

Before economic operations are authorized in a territory where armed clashes have been ongoing since 2020, when the Polisario Front broke the ceasefire agreed with Morocco in 1991, the U.S. National Security Agency has conducted an analysis of the war situation on the ground.

American companies are not limited by the decisions of the EU courts, which last October annulled, at the request of the Polisario Front, the EU club’s fishing and trade agreements with Morocco. The EU Court of Justice then established that trading in products from Western Sahara meant recognizing Rabat’s de facto sovereignty over a territory that the international community does not recognize as part of Morocco. Furthermore, it emphasized that the consent of the Sahrawi people had not been obtained for these agreements, “violating the principle of self-determination” recognized by the UN.

Last year, the Spanish business group Senator announced the opening of a hotel in Dakhla, in the south of Western Sahara, but the project remains frozen. Also in 2024, the French Development Agency reported a €150 million investment plan for infrastructure, including a a power line between Casablanca and Dakhla. Companies from Gulf countries are also considering investments in the Sahara. According to the Arab economic news outlet Ataqqa, the UAE energy company Taqa, which is already present in Morocco and has negotiated a stake in the Spanish energy company Naturgy, is part of a group of companies considering investing up to $10 billion in Western Sahara in solar and wind power plants to export green energy to Europe.

This is not the first time that the king of Morocco has called for dialogue with Algeria, which provides shelter to the Polisario Front and to thousands of Sahrawi refugees in Tindouf (southwestern Algeria), in a regional dispute that is about to turn 50 years old.

But the offer now comes from a strong international position, with Rabat enjoying support for its autonomy plan from three of the five members of the UN Security Council — the United States, France, and the United Kingdom — and from Spain, a former colonial power in a territory that was known as Spanish Sahara until the mid-1970s. “Faced with the specter of a military escalation [...] a calmer regional climate could have significant economic and strategic repercussions for both countries,” notes analyst Abdelá Turabi in the weekly Tel Quel.

Trump’s advisor Boulos, a Lebanese-born businessman who serves as the White House mediator with Arab and African countries, previously told the Al Arabiya television channel, “The United States desires the best possible neighborly relations between Algeria and Morocco.” Boulos’ return to Washington without having completed his regional tour in Rabat, confirmed on Friday, came without any official explanation for the cancellation.

Despite its special relationship with Morocco, the U.S. maintains close ties with Algeria, whose president, Abdelmayid Tebboun, received Boulos on July 27. Boulos proposed exploring “the immense opportunities opened by commercial cooperation in the energy sector,” according to the Algerian press.

The Moroccan state news agency MAP reported on Saturday on the content of the congratulatory message sent by Trump to King Mohammed VI on the occasion of the Feast of the Throne, celebrated four days earlier. “The United States recognizes Moroccan sovereignty over the Western Sahara territory and reaffirms its support for Morocco’s autonomy proposal as the only basis for a just and lasting solution to the dispute,” he expressly reiterated in his letter to the ruler of the Alawite dynasty. In December 2020, in the final stretch of his first term, Trump recognized Morocco’s sovereignty over the former Spanish colony, reversing decades of U.S. support for UN-led talks, but during the Joe Biden administration no steps were taken to implement the contents of the agreement between Rabat and Washington, such as the opening of a U.S. consulate in Dakhla.

In his statements to Al Arabiya, Boulos clarified that the recognition of Moroccan sovereignty over the Sahara “leaves the door open to dialogue to reach a mutually acceptable solution.” The U.S. adviser hopes to achieve “a quick solution” to the conflict during Trump’s current presidency. The dispute over Western Sahara has poisoned diplomatic relations in the Maghreb region since 1975, when Spain abandoned what was once its 53rd province following the Green March, the massive mobilization of tens of thousands of Moroccan civilians promoted by Hassan II, father of the current monarch, during the death throes of dictator Francisco Franco in Spain.

“A consensual solution”

“I have endeavored to reach out to our brothers in Algeria, expressing Morocco’s willingness to engage in frank, responsible, fraternal, and sincere dialogue on the various outstanding issues between the two countries,” emphasized Mohammed VI in his Tuesday evening speech. At the same time, he affirmed the continued existence of the Arab Maghreb Union, an embryonic forum pursuing regional economic partnership since 1989, which was paralyzed by the Sahara conflict. For the first time, in addition to the usual messages of good neighborliness, the monarch also called for “finding a consensual solution, in which there are no winners or losers, preserving the dignity of all parties.”

Despite the official silence and the suspicion shown by the media in Algeria, the pro-Algerian digital portal TSA, published in France, recognizes that the latest message from Mohammed VI “differs from previous ones,” although it does not define “the contours of the consensual solution.”

The rift between the two countries over Western Sahara has continued to widen. While Algiers believes this is a matter of decolonization that should be resolved within the framework of the United Nations through direct negotiations between Morocco and the Polisario Front — which advocated independence following a self-determination referendum — Rabat is calling for dialogue with Algeria without the involvement of Polisario, to resolve the dispute on the sole basis of its autonomy plan under the red and green flag of the Sharifian kingdom.

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