Economy
From The Report: Algeria 2012
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Oil and gas production continues to dominate the Algerian economy, accounting for almost all of exports, close to half of government revenue and over a third of GDP. Hydrocarbons accounted for 34.7% of GDP in 2010, up on 2009 rates, but still lower than the figures of between 43% and 45% seen in the three preceding years. The decline is primarily attributed to a fall in oil prices. To diversify the economy away from a reliance on hydrocarbons revenues, one of the government’s aims is to boost industry’s share of GDP to 10% by 2014. The government also plans to spend €228.7bn on public works between 2010 and 2014 on both new and existing projects. However, limited administrative capacity means it is doubtful whether the government will be able to meet the investment commitments on schedule.

This chapter contains interviews with Khedidja Belhadi, President and Founder, Association of Algerian Managers & Entrepreneurs (AME); Jim O’Neill, Chairman, Goldman Sachs Asset Management; and Réda Hamiani, President, Forum des Chefs d’Entreprises.

Articles from this Chapter

Overview

Diversifying the structure: Leveraging stability to push ahead
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Oil and gas production continues to dominate the Algerian economy, accounting for almost all of exports, close to half of government revenue and over a third of GDP. In recent years non-hydrocarbons GDP has outstripped wider economic growth, though this is largely driven by public spending rather than private sector activity. The government, flush with revenues from sustained high oil prices, is investing in infrastructure and undertaking initiatives to support business, particularly small…

Interview

OBG talks to Khedidja Belhadi, President and Founder, Association of Algerian Managers & Entrepreneurs (AME)
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Interview: Khedidja Belhadi How can gender inequality be reduced amongst senior executives in the private sector? KHEDIDJA BELHADI: Algerian women have come a long way in terms of pushing for political, social and economic reform, taking decisions, creating enterprises, and making investments. There is, to some extent, less stigma and fewer misconceptions with regards to female access to high-level positions. This has been helped in part by the government increasing the participation of women in…

Analysis

Balancing relations: Maintaining trade with the EU while looking after national interests
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Ties between Algeria and the EU are of key importance to both the North African republic and Europe. The EU is Algeria’s most important trading partner by a wide margin, and Algeria represents a crucial supplier of energy, in particular of natural gas, to the bloc. Highlighting the importance of these links, in November 2012, EU High Representative for Foreign Affairs Catherine Ashton described Algeria as a “strategic partner” upon her visit to the country. However, Algeria has managed…

Analysis

Finding the funds: A rigid investment climate complicates development
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Among the important benefits that have made Algeria keen to attract foreign direct investment (FDI) is access to foreign technology and know-how to boost local industry. However, current FDI levels remain low, stymied in part by perceptions that it is difficult to do business in Algeria. There have been calls for changes to measures introduced between 2008 and 2010 that limit the activities of foreign firms in Algeria, though some claim these restrictions are not so grave. However, based on revisions…

Interview

OBG talks to Jim O’Neill, Chairman, Goldman Sachs Asset Management
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Interview: Jim O’Neill In July 2012 the European Central Bank and the Central Bank of China reduced interest rates. What does this mean for these economies? JIM O’NEILL: We’ve started to see evidence of things slowing in many places. We’ve also recently had disappointing job numbers in the US. Obviously the European crisis will have its own ongoing negative consequences. But I wonder whether there are bigger challenges ahead for some countries – and I don’t just mean the BRICs and emerging…

Interview

OBG talks to Jim O’Neill, Chairman, Goldman Sachs Asset Management
OBG
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Interview: Jim O’Neill In July 2012 the European Central Bank and the Central Bank of China reduced interest rates. What does this mean for these economies? JIM O’NEILL: We’ve started to see evidence of things slowing in many places. We’ve also recently had disappointing job numbers in the US. Obviously the European crisis will have its own ongoing negative consequences. But I wonder whether there are bigger challenges ahead for some countries – and I don’t just mean the BRICs and emerging…

Interview

OBG talks to Réda Hamiani, President, Forum des Chefs d’Entreprises
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Interview: Réda Hamiani How can Algeria improve both knowledge transfer and local participation in large-scale projects? REDA HAMIANI: The reality is that in 2025 Algeria will no longer be in a position to rely on its oil resources, as they will be exhausted. There is thus an urgency to find other ways of financing national economic development. It’s time to remodel the economy, even if we can continue to benefit from its hydrocarbons assets. To do this requires a larger role for the private…

Analysis

Expanding ties abroad: More goods are headed to new destinations
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exchange expanded to almost $5bn in 2011 and stands to increase further, as Algeria concluded a free trade agreement (FTA) with Brazil in February 2012. RAPID RISE: As elsewhere in Africa, however, it has been China that has risen through the ranks the fastest. The Asian giant has played a key role in sustaining Algeria’s exports in recent years. According to the Ministry of Finance’s 2011 foreign trade statistics, China was the country’s second-largest source of imports in 2011, at a value…