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Algeria And France… Political Divergences Mortgaging Economic Friendliness

October 4, 2021

Economists unanimously agree on the imperious need to review the Algerian-French partnership file, by ending the “priority” and “exclusivity” that French dealers have enjoyed in the Algerian market for decades, and seeking to diversify the portfolio of strategic partners.

“Deals must be granted to those who bring technology, hard currency, experience and capital, and not those who prefer passing through traditional tunnels represented by politicians, acquaintances and friends to win a deal in the Algerian market,” they asserted.

The economic expert, Ishak Kherchi, stated, in a statement to “”Echorouk”, that the Algerian-French economic relations are characterized by strength and durability, given the investment balance between the two countries, as French investments in Algeria amount to 2.6 billion Euros, led by the insurance sector, which accounts for 36 percent of the partnership shares. The mechanical and automobile industry, represents 20 percent of French investments in Algeria, and the extractive industries, represent the latter’s share equivalent to 23 percent.

In terms of numbers, Kherchi said that 450 French contractors are active in the Algerian market, running 100,000 direct jobs, while ensuring the reinvestment of profits by 80% in the national market on an annual basis. In all respects, especially since France is the second supplier of the Algerian market after China, adding, “Going to diversify partnerships today has become more than a necessity, but the process must take place gradually and not through a boycott”.

According to Kherchi, the most important strategic partners for the next phase are China and Turkey, given that China is today the largest partner of Algeria and the first supplier of the Algerian market with products and goods, in addition to Turkey, which has achieved penetration in the sectors of extractive industries, reconstruction, construction, tourism and textiles, and the new partners can guarantee the provision of the best options in the field of prices and quality, adding, “Political relations should not affect economic relations, but rather the logic of interest, which must prevail, and it is what imposes diversification of the portfolio of Algeria’s economic partners”.

Our interlocutor considered that the recent moves of the Algerian economic diplomacy and its quest to diversify partners and attract new investors to the Algerian market provoked panic among the French who fear losing their share in the Algerian market each time in deals in these countries, in addition to shares in the reconstruction program for Libya.

In this context, the economic expert, Ahmed Haidoussi, confirmed, for his part in a statement to “Echorouk”, that the volume of trade exchanges between Algeria and France, which exceeds $5 billion dollars annually, proves that the economic relationship between the two countries is deep, and is not emerging today, which is what is required before seeking to diversify investments. The foreigners active in Algeria and the withdrawal of the right of preference in the Algerian market from the French, require deliberate and gradual decisions, especially since France remains Algeria’s first European partner, and has an important share in the sectors of the petrochemical industry, water desalination, the pharmaceutical industry and the transport sector.

The expert stressed that the option of opening up to new markets is inevitable, and diversification of investments has become more than a necessity, but the process must take place away from decisions to terminate partnership contracts at random.

The latter commented on the termination of the partnership with both Seaal and the Algiers Metro Company, and said that this right choice was more than necessary, given that these deals were not strategic, and that their formulation did not entwine in a good way from the beginning, which forced the correction of errors as a result of the failure of the partnership process.

However, he noted that in the future, the Algerian economic relations must be based on new economic axes based on conglomerates and diversification of the partnership portfolio, with no preference for France or others, although it is a pivotal country and is at the fore in Algerian dealings with the European Union.

echoroukonline