Interview: Mohamed Chami
In the last 10 years, what have been the major reforms improving the business climate in Algeria?
MOHAMED CHAMI: Perhaps most notably, we have facilitated access to industrial land. To accompany this we have created the National Agency for Land Intermediation and Regulation to manage Algeria’s industrial zones correctly. We have also been able to simplify business creation processes, such as company registration. Additionally, it is now much easier to access up-todate information on the Algerian market.
However, there are still improvements to be made. The revision of the investment code will help to improve the investment climate, and this should soon be approved by the parliament. Algeria also has room for improvement in terms of communication, which is key to boosting investor confidence.
What impact are low oil prices having on the economy and, in particular, on the private sector?
CHAMI: First, if we want to analyse the growth of the economy we should not always focus on hydrocarbons as the backdrop. If there has been growth, it is due to the fact that major projects have been undertaken and achieved regardless of hydrocarbons. Nevertheless, in future budgets we need to take care to make a place for non-hydrocarbon revenues.
Low oil prices do not have a direct impact on the private sector, given that it is not financed by the state. However, the banks used to be excessively generous, given the prosperous economic situation, and this led to many imports. Today, the banks are returning to a more normal way of functioning, which should bring renewed focus on boosting domestic production.
What are Algeria’s needs in terms of human resources development and professional training?
CHAMI: The national education system is composed of three principal elements: general, professional and higher education. In Algeria, the majority of pupils will pursue professional training. As companies’ needs become more complicated, the professional training programmes that are available will need to adapt to this increasing complexity.
The Ministry of Professional Training is working on promoting dual training, whereby learning takes place in both the classroom and the workplace. The goal is to help avoid problems related to unemployment by creating a well-trained workforce that is ready to meet the needs of a complex labour market. To draw candidates to certain vocations, salary incentives can be created and the higher value of certain jobs will likely cause a reaction in the market.
What strategies should Algeria adopt in order to diversify its economy and promote exports?
CHAMI: When we speak of diversification and exports, we need to speak of our policies on the whole. We need to look at what are our local resources are and identify our comparative advantages. Today there is a recognition that we need to support many sectors that were previously underexploited. However, the diversification of the economy cannot simply come from a decree. There need to be effective public and private actors, as well as financing and the necessary labour force, among other factors. We cannot simply begin exporting next year because it seems like a good idea, we need to bring together the necessary conditions to make production and exportation sustainable. This is a strategy that needs to be executed over several years. Profitability will be a key driver of interest and investment as the economy diversifies.
We see that there is a real willingness to develop underutilised resources such as mining, renewable energy and petrochemicals. Their development will truly help diversify the economy. The private sector has been identified as a key driver of this growth, but there are great expectations, so the private sector needs to show that it is capable and responsible.
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