en News from The North Africa Journal

News from The North Africa Journal – Algeria

http://www.north-africa.com, Week ended April 4, 2000

Privatization Port Management Open to the Private Sector

Algeria will separate ports’ public services and commercial services to allow private operators to be involved as stipulated by article 891 of law 98-05.

Three regional port authorities have been set up to manage the public service activities in the nation’s ports and will handle services such as cleaning and the preservation of public domain areas in ports.

Meanwhile, the government has officially opened competition for commercial activities to any public or private enterprises. Companies seeking to operate a commercial activity can be domestic or foreign.

Among the commercial services open to competition are handling operations, towing, etc.

These commercial services should certainly hope to earn substantial revenues as the government is liberalizing large commercial activities. Four enterprises have already declared that they will invest in maritime services such as shipping, passenger transport and ferry services, cable servicing, etc. But the head of the Algerian port authority said that the issuance of authorizations and licenses will be subject of transparent procedures and all partners, including labor unions, will be allowed to follow the process.

Algeria’s ten largest ports are subject to new measures allowing the private sector to handle specific activities. These ports are those of Algiers, Oran, Annaba, Bejaia, Ghazaouet, Arzew, Mostaganem, Tenes, Skikda and Djendjen.

The ports of Arzew, Skikda and Bejaia together account for 84% of total traffic (import/export) given their role as petroleum and gas shipping hubs. These three ports handle 79.14 million tons of cargo a year with 95% representing hydrocarbon products.


Industry and Trade Mitsubishi Enters the Algerian Auto Market

One of Japan’s largest corporations, Mitsubishi, has opened this week its office in Algiers. The company is to do business in Algeria through its local partner Falcon Motors.

The company’s new office is located in the Bir Mourad Rais locality in the capital. The ceremony leading to the official opening of the office was held with the presence of the Japanese ambassador in Algeria and a Saudi executive whose company controls a substantial stake of Falcon Motors.

Falcon intends to help Mitsubishi enter the Algerian auto market and will sell auto parts as well.

However, in spite of Falcon’s ambitions, Mitsubishi will certainly face serious difficulties in the Algerian market, dominated by competitively priced Korean automobiles.

While the head of Falcon, Mr. Allouche, justified the late arrival of Mitsubishi in the Algeria by blaming the former vehicle import monopoly Sonacome for not having purchased Mitsubishi models in the past, he said that it was not late as the market in Algeria is evolving.

The Japanese ambassador added Japanese companies are expected to pay much more attention in terms of direct investment as the security issue is being addressed.


Relations Camdessus’ Long Meeting with Bouteflika

Sources in Algeria said that the outgoing head of the IMF, Michel Camdessus has spent at least 5 hours with president Bouteflika during their recent meeting in Algiers. Many say that the session has been the longest Camdessus has ever had with a head of state.


Energy Sonatrach to Sell its Services to Chad

Algeria is to provide expertise in oil production and technical training for the African state of Chad. The Algerian oil and gas company Sonatrach will implement the details of an agreement signed between the two governments.

Sonatrach will operate a number of oil fields in Chad and technicians from that country will be trained in Sonatrach’s oil fields in Hassi Messaoud in the Saharan desert.

This agreement was finalized on February 24h during the visit of Chad’s energy and mining minister, Mokhtar Moussa.


Relations Bouteflika to Visit Canada in April

Diplomatic sources in Algeria say that president Bouteflika is to go to Ottawa on an official visit at the invitation of the Canadian government. The visit, which has not been made official yet, is scheduled for the month of April and would last at least 5 days. A number of Algerian corporate executives are to take part to the trip. Bouteflika will represent both Algeria and the Organization of African Unity (OAU)


People Zerhouni Hospitalized in Maryland

Le Matin newspaper reports that the Algerian minister of the interior, Yazid Zerhouni, is currently hospitalized in an unnamed Baltimore hospital in the American State of Maryland.

Zerhouni, according to the newspaper, has been admitted in the hospital for a few days due to heart related problems but the Algerian government has not confirmed or denied the news.

In the past, Zerhouni was Algeria’s ambassador to the US.


Construction Australians to Build Social Housing Units in Algeria

A group of executives representing Australia’s Universal Design & Construction (UDC) was in Algeria seeking business opportunities for its members, a group of Australian construction firms. The executives told the press that their group has partnered with the Algeria government to secure private loans to finance the construction of 100,000 housing units nation-wide at a cost of $1 billion. These units will be made available to low and middle-income earners in Algeria. The loans a said to be originating from OECD countries but no details were made available

In 1999, demand for housing has exceeded 1.33 million units according to official figures. But while demand is high, the pace of construction has remained slow with 140,000 new units built last year.

As such, Algeria has identified the need to seek foreign assistance in both financing and actual construction work and technology.


Relations Head of UNACTAD in Algeria

The secretary general of theUNACTAD is scheduled to visit Algeria at the end of March. His visit there will be followed by a mission of trade experts. Their goals of their mission in Algeria have not been disclosed yet.

Algeria is currently discussing with various trade organizations on how they can support it in obtaining membership at the WTO and market access to the European Union.

Also Algeria is preparing to resume talks with the WTO planned for the second quarter this year. Membership to the WTO is contingent to Algeria implementing further reforms and modernizing its economy.

This modernization requirement necessitates massive investments that Algeria is currently seeking among its trading partners. It is also taping into its vast expatriate community that it hopes would contribute to invest in their country.


Politics Constitutional Changes Next Automn

Once again, Algerian voters will be called to vote for a referendum on changes in their constitution. No date has been set yet but the referendum is likely to be held next autumn. The commission set up to propose changes has completed its work.

The current constitution has been heavily criticized by the president during interviews given to the foreign media, and new amendments will be made probably next autumn. Analysts do not expect major changes but predict that amendments will be made that would provide more power to the president and the executive branch in general.

In the future constitution, there will not be a second legislative Chamber. Thus, the Senate will be dissolved. To replace it, the president has proposed the establishment of a « Counseil de Sage » [Sage Council] that would be composed of 70 personalities known for their ‘integrity.’ These personalities will be designated by the president.

The commission advising on constitutional changes proposes to expand the presidential term from 5 years to 7 years. The proponents of this expansion argue that a president and his team need more time to implement a new legal framework to establish a real market economy and a true large-scale privatization.

The new constitution would, for the first time, allow Algerians who did not participate in the independence war (1954-62) to be eligible to compete for the presidential office. The current constitution restricts participation for the presidential election to only those who can prove that they are veterans of the war, a group that is quickly declining in Algeria.


Law Draft Law on Information and Farm Land Sale Before Parliament

Algeria’s legislators will soon debate a new draft information code and new laws related to the sale of farm land. Both areas are very controversial issues given their very sensitive nature in the country’s political and economic arenas.

While there is no clear indications on the content of the draft of the information code, sources in Algeria believe that president Bouteflika may introduce measures of positive nature to the press. The industry and the nation’s journalists are expected to take part to the debate

But while the new information code is expected to be better than the current one, Algerian journalists remain very skeptical regarding the new laws. The president is often considered by the independent press as an individual that has not been helpful given « his rhetoric against the press, » as one journalist stated. The president’s position vis-à-vis the liberalization of the audio-visual media and in particular television has created a sense of suspicion among the media world in Algeria regarding the intentions of the current administration.

In spite of their future participation to the debate, journalists and the media in general fear that additional restrictions may be included in the new law that would make their work even more scrutinized.

Within the media industry there is a fraction favorable to the establishment of a more liberal information code, a set of laws that are also linked to the civil and penal codes. There is a second group that is calling for the complete elimination of the current code and the opening of a debate to establish a new one, and finally there is a third group that is calling for the replacement of the current laws by a set of ethical codes that would govern the press.

Another important debate will be held at the parliament soon. It concerns the legislation regulating the sale and lease of agricultural land. The draft law has been established years ago but the former administrations under Zeroual and Ouyahia refused to send it to parliament for a reading. The former administrations were pressured by the ultra-nationalists under the leadership of the former ruling FLN party and what is known as « the revolutionary family. »

The actual law may go against huge interests of specific individuals and groups that are benefiting from a situation to earn enormous profits.

But for the current government, the liberalization in agriculture is an important element of its global economic restructuring. If a new law is enacted regarding the sale of agricultural land, it is likely that we will see a new beginning in Algeria’s agricultural sector. Fresh investments will stimulate much needed production which, as a consequence, would reduce Algeria’s heavy reliance on food import.


Relations Algerian-German Businesses to Meet in Berlin

The 7the session of the Algerian-German business forum is scheduled to be held on the 29th and 30th of March in Berlin according to APS news agency

The location of this forum that began in 1997, alternates between Algeria and Germany. This upcoming forum will be co-chaired by the Algerian reform minister and by the heads of the German federation of industries BIS and the confederation of chambers of commerce and industry.

This forum will be held after the trade missions that brought into Algeria large numbers of French, Italian and Swiss executives. The Algerian-German forum is seen as an opportunity for the Algerians to sell the image of their country as an investment destination to companies of Europe’s strongest economy.


Broadcasting Canal Horizons in Algeria

An agreement has recently been reached between the Algerian-Swiss Mosaic Networks, a subsidiary of the Swiss-based Akoleo S.A. and Canal Horizons for the distribution in Algeria of its new television programs via satellite. The satellite TV program will debut in the next few days and will be broadcast over the entire Maghreb region.

With the assistance of Canal Horizons, Mosaic Networks will establish a distribution network across Algeria to sell subscriptions to the new broadcast service in local currency.

Canal+ Horizons, a subsidiary of the French network Canal+, focuses on the Maghreb region, sub-Saharan Africa, and the Middle East. Its current subscriber base is 152,000 of whom 48,000 are Tunisians and 32,000 are Moroccans.


Emerging Company Go-Fast Goes Fast

The French publication Figaro-Economie published a special report on Go-Fast, a France-based company owned by a group of Algerians nationals. These same individuals are the main shareholders of the newly created Antinea operating in Algeria. Antinea, which is 49% owned by Go-Fast, is involved in both air and maritime freight. It is the only freight service in the oil and gas sector active in Algeria.

The newspaper revealed that the company hopes to expand not only in Algeria but also in neighboring Morocco and Tunisia. The company is also monitoring Libya so as to begin operating there once the company judges that it safe to conduct business.

Go-Fast’s Antinea unit is the only player in the stimulated petroleum sector in Algeria. A combination of a new petroleum law and high oil prices have boosted demand for logistic services.

Figaro-Magazine reports that this family controlled company forecasts FF 120 million ($22 million) in sales this year alone. In 2001, Go-Fast anticipate to see its revenues increase by an additional FF 40 million.

In 1994, Go Fast generated FF 6 million (About $1 million) but the company has grown so fast that in 1999, its revenues reached FF 118 million.

The bulk of this business comes from its American subsidiary. The Houston-based company accounted for 70% of the company’s global sales. Its clients include Exxon and offers services to global oil companies like France’s Total in oil producing countries like Venezuela and Mexico.


Relations Youcef Yousfi Visits Italy, Proposes Airline Alliance

The Algerian top diplomat, Youcef Yousfi, went to Italy at the invitation of his Italian counterpart, Lamberto Dini.

Yousfi held high level meetings with Italian officials including president Carlo Azeglio Ciampi, trade minister Enrico Letta and the Italian parliament, Luciano Volante.

During his visit, two agreements were signed, the first relates to political consultation between Algeria and Italy and the second accord relates to the movement of people between Algeria and Italy.

Yousfi has also discussed by the Italian transport minister, Mr. Bersani Peirluigi, on a possible alliance between the national airline carriers of Algeria and Italy.