Algeria has one of the Largest and Best Diversified Economies in Africa
Wednesday, December 12th, 2007
Interview with the Ambassador of the People’s Republic of Algeria, H.E. Hocine Meghar
Sustainable economic development and a policy of national reconciliation is the program of Abdelaziz Bouteflika, the President of the People’s Republic of Algeria. His plans, supported by great oil and gas deposits responsible for 75% of the state revenues, are successful and effective. Oil and gas and the ambitious modernization of the country’s complete infrastructure and education system have transformed Algeria into a booming country and an extraordinarily attractive place for foreign investors. R. Schubert spoke for ARAB FORUM with Algeria’s ambassador in Germany, H.E. Hocine Meghar, about these topics.
ARAB FORUM: Your Excellency, twice this year Algeria was spotlighted in two major business conferences: the 10th German-Arab Business Forum last July and on Lower Saxony’s Foreign Business Day (Außenwirtschaftstag) during the Hanover Fair. Why has Algeria become so attractive? What does Algeria has to offer?
Meghar: The Algerian economy has gone through deep structural reforms over the last fifteen years with excellent results and performance. Today, the fundamentals of our economy are particularity attractive to foreign investors, as well as to domestic businessmen. The national market offers tremendous opportunities for partners wishing to grab them. As a matter of fact, our economy ranks among the emerging ones, thanks to many factors, namely the conducive climate to attract foreign inventors, and the successful process of liberalization and privatization of more than one thousand public corporations. Furthermore, the economic and financial indicators are also very positive; an average growth rate of 5% over the last five years, a rate of inflation of less than 3%, huge foreign exchange reserves amounting to more than 80 million US$ and a large trade surplus of about 35 billion US$ in the last fiscal year.
All in all, Algeria has one of the largest and best diversified economies in Africa, with a gross national product of more than 110 billion dollars in 2006. All these fundamentals explain to a large extent the rush for doing business in Algeria.
ARAB FORUM: The above mentioned business forums revealed that Algeria is making huge investments in its infrastructure. Which of those projects have the highest priority?
Meghar: With the view to revitalizing and upgrading the economy, the government has launched an ambitious five-year program to invest more than 150 billion US$ in infrastructure and development projects in all sectors. These latter are geared to encase better living conditions for the population and to set up a new basis for further and sustained development. They concern the construction of highways (1,200 kilometers), roads, one million apartments, dams, the extension and the modernization of the railway networks, airports and port facilities, water supply and distribution networks, units for waste water recycling and desalination plants.
It also deals with agro industries and food processing, environmental projects, the fight against erosion and desertification, telecommunications, petrochemical industry, renewable energy, opening up financial and banking branches, small and medium enterprises, tourism, vocational training, and education, and more.
ARAB FORUM: Which branches of the European industry, and particularly in Germany, do you want to encourage to invest in Algeria?
Meghar: The German entrepreneurs are more and more aware of the importance of the Algerian market. They have already started to take advantage of these major business opportunities. We do encourage them to do so. They have a good knowledge of our economy. Major plants have been built in the seventies and eighties with German technology and know how, which are highly appreciated by our entrepreneurs. Over the last three years, many business delegations went to Algeria. German firms are very active. Major contracts are currently under discussion in many sectors. That is why trade relations are steadily on the increase.
ARAB FORUM: How helpful is the German-Algerian Chamber of Commerce, newly opened in 2006, for Algeria’s economic programs?
Meghar: As you pointed out, the German-Algerian Chamber of Commerce is playing a commendable role in promoting partnership and investment between our two countries. Others institutions in Germany and Algeria are also contributing to the expansion of these relations. There is a need to create a full-fledged economic partnership. We do share the same willingness to achieve it.
ARAB FORUM: Is tourism another sector that Algeria wants to promote?
Meghar: Tourism is a great asset for my country. A new priority is being given to promote it in the coming years. A national strategy has been drafted to that effect. Tourism is set to be developed on a large scale. Algeria is a large and diversified country with many beautiful and fascinating landscapes. With a shoreline of up to 1,200 kilometers of exceptional sea resorts and beaches, mountains with forests and snow in winter and rather unique deserts, it offers sightseers delight and pleasure. With an exceptional historical and cultural background, the country offers foreign visitors new opportunities to enjoy and discover a land of beauty and diversity.
ARAB FORUM: One of the main topics of the German-Arab Business Forum was the ambitious education program Algeria has launched. But is education alone enough to fight the high rate of joblessness among the youth? Do there exist any job programs targeting the youth?
Meghar: Algeria allocates great financial means to education and vocational training. Education is free of charge to all. More than one million students are enrolled in our universities and others educational facilities. A process of reforming the university has been in process for some time to improve and modernize programs and ameliorate the teaching methods. We already have cooperation with German institutions. Our needs are great in the field of vocational training and discussions are under way with Germany to assist us. The rate of unemployment in Algeria has decreased significantly over the last years. This decline is the result of the booming economy. Nevertheless, job creation is a constant priority of the government, especially to benefit the youth. Many mechanisms to assist the latter has been set and they have yielded rather good results. The real problem lies with low or non-qualified youth and how to give them the appropriate training
ARAB FORUM: Algeria is No. 4 in gas production and No.11 in oil production worldwide. In which fields does Algeria invest the major portion of its oil and gas revenue?
Meghar: Indeed, Algeria has large deposits of gas. A buoyant petrochemical industry has developed since independence. Algeria has invested a lot in the gas industry; today it stands as a large and reliable supplier of natural gas to the European markets. For many years now, pipelines have connected Algeria, Spain and Italy within the framework of related business agreements. These gas relations are set to expand in the coming years. The Algerian corporation SONATRACH and the German E.ON group signed a comprehensive memorandum of understanding last year to boost their relations in the field of liquefied natural gas. Algeria and the EU are partners within the framework of a bilateral agreement that went into force September of last year. Discussions are in progress in the field of energy supply.
ARAB FORUM: Thank you very much, Your Excellency. Do you have a final word to add?
Meghar: In conclusion, let me assert that Algeria has reached political stability. Its economy is very attractive to investors as proven by all its indicators and fundamentals. German firms have the capacity and the experience to take advantage of these tremendous opportunities. As a result, I advise them take a much better look at the largest market in the region and even beyond.
My office in Berlin is indeed available to assist and provide guidance to those who are interested.