An Algerian-French Intergovernmental Committee 3rd meet in Paris : Balance Sheet and Outlook?

French President Emmanuel Macron’s visit to Algeria last Wednesday is seen by many as a step towards the future and turn the page on the colonial past for good. It is in this spirit that an Algerian-French Intergovernmental Committee 3rd meet in Paris was arranged so as to look at the Balance Sheet and Outlook to date in the special relationship between the two countries..

This brief contribution would be no different from and could even be a synthesis of two interviews of mine given to the Ennahar TV and Beur TV following this intergovernmental Committee meeting that was held in Paris on December 7, 2017.

Franco-Algerian relations have undergone a new dynamic in recent years, notably since the visit of the President Bouteflika, in 2000, to France and that of President Holland to Algeria in 2012. It is in this framework, that a 3rd session of the High-level Intergovernmental Committee was held in Paris under the joint chairmanship of the Prime Ministers, Ahmed Ouyahia, and his French counterpart, Edouard Philippe. This Committee’s foundation is the strengthening of the economic partnership and the identification of new investment prospects as a pilot instrument of the exceptional relationship between the two countries. It was established on the official visit to Algeria in December 2012 of President Holland, with the first session being held in Algiers in December 2013, resulting in nine cooperation agreements. The 2nd session took place in Paris in December 2014.  

More recently and according to the Algerian Press Service as of the end of the day of December 7, 2017, both parties concluded eleven agreements in sectors of the strategic sectors of the economy, higher education, vocational training, health, SMEs and Culture.

A declaration of intent was signed by the PSA-Peugeot Group, by the Algerian Ministry of Education and vocational training and the French counterpart, which established a training centre in Oran for the professions in the automotive industry. Various other agreements in higher education, in particular the creation of a mixed network of high-schools, with amongst its members ae 16 Algerian national schools, 15 Algerian preparatory schools and 7 French engineering schools.

Two other agreements in the field of health have been signed. This is a memorandum of understanding between the SANOFI-Pasteur group and the SAIDAL for the production of vaccines and an agreement for the production of oncology and family health products in Algeria by the IPSEN laboratory as well as an agreement for the promotion of the SMEs.  

Further intergovernmental visits are planned to prepare the state visit to be carried out by President Emmanuel Macron in 2018. This is a continuation of the holding in Algiers of the fourth meeting of the Franco-Algerian Economic Joint Committee (COMEFA), on the one hand, and the day after the visit of the French President, Emmanuel Macron in Algeria, for friendship as well as for work.

However, these exchanges are to be replaced in their own contextual dynamics. For 2016 the value imports exports Algeria France dids not exceed $8 billion. However, Algeria’s imports were $46 billion million and $29 billion for exports of which 95% made of hydrocarbons. Total imports/exports were $75 billion excluding services that Algeria imported in 2016 for more than $10 billion, giving a total of goods and services imports/exports of approximately $85 billion.

With reference to the international trade, in 2016, the countries of the European Union are still the main partners of Algeria (47.47% of imports and 57.95% of exports). The main customer is Italy, with more than 16.55% of sales, followed by Spain at 12.33% and France has only 11.05%.

For the main suppliers, France ranks first in the EU countries with 10.15%, followed by Italy and Spain, with 9.93% and 7.69% of total imports respectively.

The first five customers of Algeria, during the first seven months of 2017, were Italy with $3.5 billion (16.9% of the Algerian global exports), followed by France with $2.60 billion (12.55%), Spain with $2.32 billion (11.23%), United States with $2.09 billion (10.11%) and Brazil’s $1.39 billion (6.74%).

As for the main suppliers of Algeria, China is still at the forefront  with $5.21 billion (19.40% of Algerian global imports), followed by France with $2.35 billion (8.77%), Italy with $1.98 billion (7.37%), Germany with $1.84 billion (6.85%) and the Spain with $1.75 billion (6.53%). 

According to the data of the embassy, France is however the first non-hydrocarbon investor and the first foreign employer in Algeria, representing 40,000 direct jobs and 100,000 indirect jobs, for about 500 companies, including thirty large companies. Thus, after the visit to Algeria, the French President went to Qatar where he signed contracts of nearly $13 billion on December 7, 2017

So, while respecting the sovereign decision of Algeria, the wish of the French President in his conference in Algiers on December 6, 2017 is in favor of a relaxation of the 49/51% rule that dates back to the Ouyahia government of 2009, which is not introduced into the new investment code and to be defined in the finance statutes in accordance with the Government’s policy. I recall that since 2010, I have proposed to the Algerian Government to stick to the technological balance and in positive currencies, to make its balance sheet, to apply it to the strategic segments that need to be precisely defined and to apply a blocking minority of 30% for the other segments in particular for the SMEs.

Exchanges between Algeria and France which are essentially limited to hydrocarbons for the Algerian side, to services, banking, agri-food, pharmaceuticals and products from the automotive industry for The French part can be empowered in the context of mutual respect. But care would be to limit the economic factors; i.e. it would be like to point out beforehand that there is a dialectic link between security and development, hence the importance of a win/win partnership based on co-development. It goes without saying any destabilization of Algeria’ could directly and / or indirectly lead to the instability of the Mediterranean and North African region and only an impetus of development would therefore warrant a definite stability of the region.