Algeria Reforms Investment Laws, Seeks to Attract Major US Players
Author: alkhabar Posted May 1, 2012
Algerian Finance Minister Karim Djoudi noted that the foreign-investment laws passed under the 2009 Complementary Finance Act are gradually being implemented in the dynamics of current Algerian business projects. This statement came in response to questions raised by major US institutions on this issue and on the general investment climate in Algeria.
Djoudi gave a detailed presentation on the investment policies and framework that organize business partnerships in Algeria. This took place during a meeting arranged by the Anadarko Petroleum Corporation and the US Business Council for International Understanding (BCIU), an organization founded on a proposal by the US government. The BCIU is designed to encourage dialogue between US companies and various governments around the globe. It holds meetings in Washington with the participation of officials from companies like General Electric, Dow Chemical Company, Northrop Grumman Corporation and Exxon Mobil, as well as with consulting and accompanying companies specializing in investment.
According to Algeria's news agency, Djoudi noted during his presentation that Algeria has adopted an investment policy that focuses on building a lasting legal and financial framework. This policy also seeks to diversify the economy in terms of production and profit while also hoping to limit the deficits of public facilities. Other goals are to expand economic development throughout the country and to provide for the public's social needs. Djoubi discussed Algeria’s efforts to support investment by reducing taxes and customs rates. He also discussed amendments to investment laws that provide investors with more guarantees and strengthen the capabilities of the banks to help small and medium-sized businesses.
The minister defended the 49-51% rule (which requires a 51% Algerian share in all foreign direct investments), a controversial issue for US companies. Djoubi affirmed that this rule aims to grant the Algerian side a greater share of financial investment in a given project, while giving the foreign side managerial control. Meanwhile, both sides participate in risk-sharing. A number of projects have been implemented based on this rule, and partnerships have been formed in various fields — notably in pharmaceuticals, iron, steel and insurance.
The US businessmen discussed the relationship between Algeria and the EU and how this relationship affects the businesses and investments coming from other countries. Djoubi called it "indisputable" that the EU countries, due to an impasse in their own markets, are trying to find other markets characterized by high demand and financial abundance. However, he stressed that EU investments do not meet the aspirations and expectations of Algerian businessmen and that these businessmen would benefit more in the future by investing with US partners.
In response to a question about integration between the Maghreb countries, Djoubi said that Maghreb integration is underway. However, he adds that this cannot be completely implemented until each party first guarantees that its own interests will be upheld.
Read More: http://www.al-monitor.com/pulse/business/2012/04/us-institutions-ask-about-the-in.html