Interview: Jaime García-Legaz
What factors have driven the increased activity of Spanish companies in Algeria?
JAIME GARCÍA-LEGAZ: Spanish companies have been present in Algeria for many decades. Some, like Dragados, continued working and executing projects in Algeria even in the 1990s. Since the beginning of the 21st century, when Algeria embarked upon the normalisation of economic life and the reconstruction and expansion of its infrastructure, Spanish companies have played a significant role in a number of sectors including construction, infrastructure, water desalination, the agro-food industry, transportation and engineering, amongst others.
In the aftermath of the 2008-09 crisis and the downturn of the Spanish economy, many Spanish companies looked for ways to further increase their operations in foreign markets. Many of these companies started operations in Algeria, which is an important neighbouring market with a growing population of more than 40m people, rising income levels and a burgeoning demand for many different products and services.
Looking forward, what sectors offer strong potential for additional collaboration?
GARCÍA-LEGAZ: Collaboration with Algeria is already established in different sectors, some of which have Spanish companies playing a major role, as is the case with agro-food industries, energy, the production of fertilisers, transportation, and water, among others. There is great potential in many other sectors as well, such as agriculture, fisheries, aquaculture, waste management and treatment.
How can Algeria further boost its non-energy exports to Europe?
GARCÍA-LEGAZ: There is huge potential for exports of agricultural products from Algeria to the EU, but so far exports have been marginal. Prior to developing the export sector, Algeria must develop the agricultural sector internally, implementing systems for quality and pesticide control, improving the logistics of transportation and distribution of agricultural produce to the market. In all these aspects Spanish experience can be extremely helpful for Algerian agricultural exporting companies.
In industrial sectors the situation is similar. Some measures should be implemented in order to develop the sectors nationally and to prepare them for the export markets. The contribution of foreign companies, either Spanish or from other countries is probably essential in this process.
What challenges do Spanish companies face working in Algeria?
GARCÍA-LEGAZ: The relationship has been fruitful and satisfactory, though not exempt from occasional troubles, most of which are resolved after a relatively short period of time. Algeria must make a significant effort to improve its business climate if the private sector is to develop and to play an important role in the diversification of the economy.
My vision for this process is the opening up of the private sector to foreign investment, in such a way that there can be a transfer of business dynamism and of know-how. However, foreign companies will only invest in Algeria if the conditions for investing are attractive. At present Algeria stands in 163rd place in the World Bank’s “Doing Business Report” 2016 ranking of 189 countries.
This implies that conditions for foreign firms to work in Algeria are not adequate, and that an effort has to be made to improve the situation and eliminate barriers to foreign investment. Reforms have to be implemented to allow the private sector, both foreign and national, to flourish. Spain is very willing to cooperate with Algeria in this field of reforms as well as in the promotion of foreign investment.
Read More from OBG
