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Algeria Set to
Join WTO
Arab News, by Tim Kennedy
December 5, 2004
WASHINGTON, DC- “Our
economy is based too much on
hydrocarbons. We must diversify our
economy. If not, Algeria will become
lost in the global marketplace,”
Minister Abdelhamid Temmar, chief
economic counsel to President Abdelaziz
Bouteflila, said last week during
meetings with finance and trade leaders
in Washington. “We have to reform our
banking system. We have to open our land
markets for foreign investment. And we
have to promote the private sector,
which — quite frankly — is
disappointingly too small."
Presidential financial advisors are
seldom so candid, but Algeria - and its
successful handling of its nearly
bankrupted economy - is a unique case.
Virtually abandoned by investors in the
late 1980s due to decades of violent
political unrest, the country had an
unemployment rate of 32 percent,
negative economic growth and a debt load
that was about to exceed its annual
gross domestic product.
Elected in 1999 on the promise of
implementing political, economic and
social reforms, President Bouteflila
kick-started the Algerian economy with
$18 billion worth of infrastructure
improvements that yielded four years of
steady economic growth (it now stands at
a robust 6 percent), a 40 percent
increase in individual purchasing power
and a net increase of over 1.2 million
jobs that has pushed unemployment down
to a more acceptable 23 percent.
“In 2002, the situation in Algeria was
quite bad. Instability was all around,”
said Minister Temmar at a dinner hosted
by the Washington-based US-Algeria
Business Council. “But when we look at
the situation now, things have changed
dramatically: We are enjoying political
stability; democracy is flourishing;
we’ve resolved many of our debt
problems; and we’ve managed to put most
of our economic woes behind us.”
Minister Temmar said Algeria’s
remarkable economic recovery is largely
the product of an economic policy that
believes “the role of government is to
spend only what it should spend while
allowing the economy — with all its
traditional market forces — to do what
it should do.”
To accomplish this, said Minister Temmar,
Algeria has based its economic doctrine
on two propositions: First, the country
must have a free market; second, Algeria
must become integrated in the global
economy. “We live in a globalized
world,” Minister Temmar added. “In order
for us to succeed we must seek out and
find markets where we can compete.”
Minister Temmar’s early December visit
to Washington was the culmination of
months of negotiations that will likely
see Algeria join the World Trade
Organization (WTO) in 2005.
Membership in the WTO will enable
Algeria to take the important step of
signing a Free Trade Agreement (FTA)
with the United States. Minister Temmar
and leaders from key sectors of the
Algerian economy used their Washington
visit to pay calls on the World Bank,
the International Monetary Fund and the
White House Office of the US Trade
Representative.
“The Trade and Investment Framework
Agreement Council discussions between
the US and Algeria were extremely
productive,” Cathy Novelli, assistant US
trade representative for Europe and the
Mediterranean told Arab News. “We
advanced our bilateral economic agenda
in such areas as investment, and we also
held informative talks on Algeria’s WTO
accession. We have a rich list of
opportunities to follow up on over the
next year.”
Minister Temmar said Algeria has already
enacted many reforms, including, the
reorganization of its tariff system,
reform its tax laws and enacting legal
protections for investors. “Ultimately,
we have done our best to create a good
business environment that is enticing to
business,” he added. “But our work is
not finished, and we hope the
international business community will
help up finish what we have started.”
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