Political sketch
Formerly Río de Oro, Saguia el Hamra, and Spanish Sahara. Today a colony of Morocco.
In 1346 the Portuguese discovered a bay that they mistakenly identified with a more southerly Río de Oro, which was probably the Senegal River. The coast was little explored until Scottish and Spanish merchants arrived in the mid 1800s. In 1884 a representative of the Sociedad Española de Africanistas y Colonistas (Spanish Society of Africanists and Colonists) went to Río de Oro Bay and signed treaties with the coastal tribes. Later the Spanish government claimed a protectorate over the coast. Spain achieved control over the interior in 1934. Soon after becoming independent in 1956, Morocco asserted historical claims to Spanish Sahara. Spanish troops repelled Moroccan incursions, and in 1958 Spain formally united Río de Oro and the southern region of Saguia el Hamra into Spanish Sahara. In 1960 newly independent Mauritania laid claim to Spanish Sahara. In 1963 huge phosphate deposits were discovered in the north of the territory, a valuable prize for the country that could gain possession. In the meantime, a guerilla war by the native Saharawi people began in the early 1970s. They sought independence.
In 1975 Spain declared its intention to withdraw; the same year, the World Court ruled that Morocco and Mauritania's legal claims were irrelevant. From November 1975 the area was administered jointly by Spain, Morocco, and Mauritania; and, when in February 1976 the Spanish departed, Morocco and Mauritania divided the area between themselves, Morocco gaining the northern two-thirds of the area, including the phosphates. Algeria supported the guerillas of the pro-independence Polisario Front (from Popular Front for the Liberation of Saguia el Hamra and Río de Oro). Mauritania reached a peace agreement with the Polisario Front in 1979 and withdrew its troops, but Morocco annexed the area Mauritania had vacated. Sporadic fighting continues today between the Polisario Front and Morocco. The position of the Polisario Front has been weakened by a reduction in Algerian support and Morocco's move of tens of thousands of settlers into Western Sahara.
Wars since 1500
Spanish conquest, early 1900s; Spanish Saharan War, 1976-1991 (Morocco and Mauritania against Algerian-supported Polisario Front Saharan guerillas).
Convertibility
Spain established exchange rate controls on 31 May 1931 as a result of the Great Depression. It established multiple exchange rates on 3 December 1948 and unified them on 20 July 1959. Exchange controls continued until after Spain ceased to have colonies.
Other
Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): None.
Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): None.
Currency crashes None independent from those of countries whose currencies Western Sahara has used.
No exchange rate data in Reinhart and Rogoff (2003).
References
Primary sources:
--Laws and decrees:
Morocco. Gazette. Bulletin officiel. 1976-present. Rabat: Imprimerie Officielle. (Also in Arabic, Al-jardah al-rasmyah.)
Spain. Gazette. 1836-present. Gazeta de Madrid (1836-1936); Gaceta de la República (1936-1939, Republican forces); Boletín oficial del Estado (1936-1939, Fascist forces; 1939-1961, Spain); Boletín oficial del Estado-Gaceta de Madrid (1961-1986); Boletín oficial del Estado (1986-present). Madrid: Imprenta Real (1836-1936); Imprenta Nacional (1936-present). (The Fascist gazette was printed in Burgos 1936-1939.) Online at <http://www.boe.es>.
--Publications of monetary authorities:
Banco de España. Annual report. 1856-1976. Memoria (1856-1960); Informe sobre la evolución de la economía española (1961-1962; from 1957-1960, published as part of the Memoria); Informe sobre la economía española (1963-1965); Informe anual (1966-1976). Madrid: Banco de España.
--Web site of the current monetary authority (viewed 20 September 2005):
The currency in use at present is the Moroccan dirham, issued by Bank Al-Maghrib, <http://www.bkam.ma>
--Other publications or Web sites:
Instituto de Estudios Africanos (Consejo Superior de Investigaciones Cientificas [Spain]). 1969. Resumén estadístico del Sahara español. Madrid: Consejo Superior de Investigaciones Cientificas.
Main secondary sources:
Diego Aguirre, José Ramón. 1988. Historia del Sahara español. Madrid: Kaydeda. (Contains very slight information on the monetary system.)
IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.)
Mateu y Llopis, Felipe. 1948. La moneda española (breve historia monetaria de España). Barcelona: Editorial Alberto Martín. (History of Spanish currency.)
Monetary authorities: Western Sahara
| Dates | Type | Name | Source | Remarks |
| 1884
-about January 1976 |
dollarization | Spanish peseta (issued by central bank Banco de España [headquarters Madrid, Spain]) | Spain, decree-law of 24 March 1874 (granting monopoly of note issue to Banco de España), cited on Banco de España Web site, viewed 10 December 2005 | Spain began conquering Western Sahara 1884 and imposed the Spanish peseta, though Saharans used money little until 1960s. The first bank and second bank were the Banco Exterior de España and Banco Español de Crédito (headquarters for both Madrid, Spain), presumably in El Aaiun, dates and order of precedence unknown (both are mentioned in Instituto de Estudios Africanos 1969). Western Sahara has never had its own unique coins. |
| about January 1976
-mid 1979 |
dollarization (another type) | Moroccan dirham (issued by central bank Bank al-Maghrib [headquarters Rabat, Morocco]) and Mauritanian ouguiya (issued by central bank Banque Centrale de Mauritanie [headquarters Nouakchott, Mauritania]) | general histories | Moroccan and Mauritanian invaders introduced their national currencies in the northern and southern parts of the country, respectively. |
| mid 1979
-present (2005) |
dollarization (another type) (or, according to Morocco, currency union) | Moroccan dirham (issued by central bank Bank al-Maghrib [headquarters Rabat, Morocco]) | general histories | Mauritania withdrew its army from Western Sahara, leaving Morocco to occupy the whole country. |
Exchange rate arrangements: Western Sahara
| Dates | Official arrangement | Source | Unofficial arrangement, if different | Remarks |
| 1884
-about January 1976 |
fixed; used Spanish peseta | Spain, decree of 19 October 1868, cited in Mateu y Llopis (1946: 289-90) | See the table for Spain on parallel market data for the Spanish peseta. | Spain began conquering Western Sahara in 1884. Saharans used currency little until 1960s. Bales of cloth were often used as money. The Spanish peseta was a decimal currency. "Peseta" was the name of a type of coin issued in Catalonia as early as the early 1400s. |
| about January 1976
-mid 1979 |
fixed (as part of a currency unions); used Moroccan dirham and Mauritanian ouguiya | general histories | Moroccan and Mauritanian invaders introduced their national currencies in the northern and southern parts of the country, respectively. "Dirham" is an Arabic word deriving from the Greek drachma coin. "Ouguiya" is a Mauritanian word whose meaning I have been unable to trace. | |
| mid 1979
-present (2005) |
fixed (as part of a currency union); uses Moroccan dirham | general histories | Mauritania withdrew its army from Western Sahara, leaving Morocco to occupy the whole country. |