Back to Algeria

Yesterday a Russian-Algerian business agreement was signed in Algeria. The process had been initiated by the Commerce and Industry Chambers of Russia and Algeria through establishing a special body meant to push the development of the links between the two countries. The official name of the body is the Russian Algerian Business Council. The first meeting of the Council was held shortly before President Vladimir Putin visited Algeria.

“We are pleased to welcome Russia’s President coming to the friendly country,” said Kamel Abdel Rahim co-chairing the Council and heading its Arabian section. Previously a distinguished military official, Kamel Abdel Rahim is currently running a first-rate pharmaceutical company in Algeria closely cooperating with Russian firms. He said that nowadays the once-close commercial and economic ties are being restored and that these tied actually came to naught during the time of economic stagnation in both countries.

“Renascent period in both our countries affects policy and economics and naturally suggests recovering the bilateral relationship,” – said Kamel Abdel Rahim. “Apart from trading we are interested in joint industrial projects. We also would like Russia to participate in privatization of Algerian state-controlled enterprises. Soviet specialists contributed their share to the construction of quite a lot of plants and factories in Algeria. Nowadays these enterprises are to go private and Russian business might proficiently modernize and make good use of them. With all that going on, Russian property in Algeria may be a stabilizing element in our economic connections.”

“We are coming back to the country with which we have kept our friendship going for many scores of years,” said prominent Russian businessman Mikhail Gutseriev, the Co-Chairman of the Russian-Algerian Business Council and President of Oil Company RussNeft OAO. “This friendship springs from when the Algerian people fought for their independence and Moscow supported them in every possible way.” According to Gutseriev, the potential of this cooperation is extremely high and is not confined solely to the traditional cooperation of the two countries in oil and gas sector. 

Currently Algeria is recovering its economy after many years of disarray and civil war and trying to reform it at the same time. Therefore direct contacts in private business are replacing the old intergovernmental economic ties. According to Gutseriev, now Russian companies are willing to make such contacts, and the Algerians seem to be ready for that as well.

In the course of the last meeting of the Russian-Algerian Business Council businessmen met each other. They discussed further deliveries of Russian wheat to Algeria, purchase of metal tubing, construction of some industrial facilities including a big ammonia plant.

Moreover, the Algerians were interested to know whether it was possible to use in Algeria Russia’s oil and gas wells recovery technologies. The participants of the meeting were of the opinion that the businessmen of the two countries showed more interest in promoting mutual cooperation which hopefully was going to boost both two-way sales and Russian investments in Algeria.
“The Russians are renewing the old friendship,” that was how the Al-Watan, one of the major local newspapers, reacted to Putin’s visit to Algeria when this visit had just started.  According to the newspaper, Russia has managed to achieve a high rate of economic growth and is now turning to face the world around with a good sense of realism in the global environment where keen competition has come to take the place of ideology. Al-Watan assumes that “Algeria and Russia are coming back to their foreign policy guided by pragmatism.”
 
According to the daily, the economic interests are stepping into the spotlight in the bilateral relations of Russia and Algeria and during his visit Putin is going to place primary importance on them. The central issue of the negotiations will be Algeria’s debt to Russia reportedly amounting to $4.5 billion. In particular, the Parties are going to discuss ways of reducing the debt partially through transforming it in investments in Algerian economy.

Algerian experts believe that resolving the debt issue will undo the tight knot impeding the development of bilateral economic ties and thus will spur the progress. Over the last year the Russian-Algerian turnover was $364 million with Russia’s investments worth $50 million.   

Quite the most important issue of the bilateral relations is armament. Russia has closed several weapon deals with Algeria ranking it as one of the major arms suppliers to Algeria. In 2001 there was a contract signed for Algeria to buy $500 million worth of arms followed by a 50 MIG-29 fighters contract in 2004 to a total of $1.5 million. In the same year Algeria bought some ten Su-30KM bombers.

Algerian experts say that the tendency shown by Algeria to diversify its foreign contacts cannot lead the country to decline the arms deliveries from Russia because thus changing the make of the armaments will cost too much. And so, local analysts believe that Russian arms companies may still count on 85% of the Algerian market.