Visit our website: HTTP://WWW.STOPNATO.ORG.UK --------------------------------------------- Will American Companies Come When Bouteflika Calls? World Algerian Action Coalition (Washington, DC) OPINION July 26, 2001 Posted to the web July 26, 2001 Steve Barnes Can President Bouteflika convince American companies outside of the hydrocarbons sector to set up shop inside Algeria? While ostensibly Mr. Bouteflika came to Washington, DC in July for an important head of state visit with US President George W. Bush, significant emphasis was placed on the behind-the-scenes meetings between the Americans and Algerians during the economic portion of Bouteflika's visit. The US ranks third after France and Italy as a trading partner to Algeria, and has roughly 3.5 billion dollars worth of investments in the North African country. Unquestionably Bouteflika views Algeria as over-reliant on France as an economic partner, and to stimulate his domestic economic recovery program he wants and needs powerful American firms to invest in key areas: in Algeria's substandard information and telecommunications infrastructure; in the agricultural sector; and critically into the housing and construction sector. Of course, Bouteflika wants to improve investment into the hydrocarbons sector, which accounts for roughly 95 percent of Algeria's foreign currency and helped raise currency exchange reserves to over 15 billion dollars this year. Mr. Bouteflika's US visit provided opportunities for private meetings with such powerful US officials as Energy Secretary Abraham Spencer, as well as John Robson of the US Eximbank. But Bouteflika's main challenge is to persuade private American firms to come to Algeria and do business outside the spheres of energy and military equipment. During his visit, he appealed to a diverse collection of American companies, reminding them that Algeria was open for business. But the US has made clear to the Algerian president that for American firms in such sectors as telecommunications and construction to invest, some key issues need to be addressed. First and foremost the US government and private companies cannot ignore the fact that political instability and corruption are rife in Algeria. The most recent protests throughout the country are indicative of a regime that is out of favor with most of the country's population. Additionally, a radical Islamist insurgency continues to claim a steady stream of Algerian lives throughout the countryside. The Western Sahara issue overshadows any trade with Algeria's neighbor, Morocco. All of these issues were discussed at length with American officials during the visit. Beyond the issue of domestic and regional stability, the biggest issue for the US is reform. Publicly and privately, Americans need to see legal, financial and political reforms before they perceive Algeria as having opportunities in the areas where Bouteflika seeks US dollars. For example, the US would like to see substantial progress made in Algeria's commerce laws to promote trade and investment, as well as see a faster pace of privatization and restructuring of Algeria's poorly performing state-owned banks and corporations. President Bouteflika is aware that to attract American investors, reform in these areas is necessary, and he must bring this message home to Algeria's present, inefficient bureaucracy and to le pouvoir, the not-so-secret coterie of generals that run the country from behind the scenes. According to a US State Department official who spoke to this writer on condition of anonymity, the big question for the US is, "Can Bouteflika transmit the key message that real action is necessary, upon his return to Algeria?" Notably, some progress is being made. During his visit to Washington, Mr. Bouteflika addressed a meeting of the Corporate Council on Africa (CCA), a US-based organization that attempts to promote African countries as worthy business partners for American companies. Besides the usual list of diplomats and government officials in attendance, executives from such firms outside the hydrocarbons sector such as 3M, Coca Cola, and Motorola came to hear Bouteflika tell of his programs aiming to promote job creation and liberalize Algeria's economy, while assuring current and potential investors that his government was "restoring political stability and consolidating economic and social development." But the majority of private sector attendees at the CCA gathering read like a who's who of energy companies: Anadarko Petroleum, BP, Chevron, Conoco, ExxonMobil, Halliburton, and Shell. Bouteflika's dream of getting substantial US investments in information technology, housing construction, and agriculture appear to be a long way off at this point. Despite Mr. Bouteflika's eloquence and charm speaking with US trade officials and at public gatherings, the sad fact is that under the present military-backed government, investors will find only one guaranteed return on investment: hydrocarbons. While oil and gas represents the backbone of the Algerian economy, lack of US dollars to other segments of the economy limits Bouteflika's ability to deliver on his economic development program. American companies do see opportunities in Algeria, but president Bouteflika and his government must realize actions, not words, which remove the legal, financial, and political barriers to trade and investment will be the only means by which US firms heed his call. ------------------------------------------------- This Discussion List is the follow-up for the old stopnato @listbot.com that has been shut down ==^================================================================ EASY UNSUBSCRIBE click here: http://topica.com/u/?a84x2u.a9spWA Or send an email To: [EMAIL PROTECTED] This email was sent to: [email protected] T O P I C A -- Register now to manage your mail! http://www.topica.com/partner/tag02/register ==^================================================================
