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The Algerian Ambassador to Germany

Article - July 2, 2012
Interview with Madjid Bouguerra
Please describe how Algeria plans to diversify its economy and its implications for foreign investors from Germany.

We have recognised that, since the economy of the country is dependent on hydrocarbons, which represent 98% of our exports, it has become necessary if not vital, to act quickly in order to diversify the economy and the sources of our revenues. This is the only way to reduce our vulnerability to price shocks of oil and gas, safeguard our national economy from dependency on one product and thus protect our future.

We cannot remain in a situation where hydrocarbons represent 97% of our revenues, and where hydrocarbons, given their attractiveness, take the bulk of foreign direct investments. To ensure diversification and make it a reality, one must recognise that Algeria has great potential in terms of natural resources, financial resources, opportunities for investment and partnerships offered by the massive five-year plan of development. Plus there are the attractive conditions for business and investment, and many incentives to facilitate the diversification – including the creation of a national agency, ALGEX, whose mission is to promote the development of companies with a potential for export. German companies already doing good business in Algeria will encourage others to grasp these opportunities.

What are the prospects for German-based companies looking to participate in renewable energy projects in Algeria?

Given its huge potential in terms of renewable energy, particularly solar energy with more than 3,500 hours of sun per year, Algeria seeks to diversify its energy base, in order to satisfy increasing demand at home and export electricity to Europe.
We have made an evaluation of our potential in renewable energy, and on that basis, issued a programme to develop this alternative energy, which mainly focuses on thermal solar, photovoltaic and wind. By 2030, the country could have about 7,200 MW from thermal solar, 3,000 MW from photovoltaic and 2,000 MW from wind. This program could be of great interest to German companies: they have the most efficient technology and the necessary experience. The German producer of photovoltaic equipment Centrotherm will supply equipment for a plant aimed at production of solar modules which is an investment of Sonelgaz.

Desertec is in contact with Sonelgaz and other departments in Algeria, to see how we could co-operate to make this project become a reality. We need to continue exchanging views on how best to get the necessary conditions together, including how to resolve all the difficulties which are still ahead – like the impact of the UE renewable energy policy, in order to realise this project.

Given our commitment towards renewable energy, the massive programme adopted in that regard, the potential existing in the country, the needs of the local market and the prospect for exports, foreign companies and particularly German ones have a unique opportunity to invest in the manufacture of components and equipment, the production of electricity, vocational training, counselling, etc.

What is the outlook for Algeria’s relations with Germany in the near future?

Algeria and Germany have enjoyed high quality relations for many years, based on friendship, mutual confidence and understanding. The regular exchanges of high level political, economic and commercial delegations between the two countries, as well as the multiplication of economic forum or the presence in Algeria of over 200 German companies, are a clear indication of the significant development of our relations.  The volume of trade exchanges for 2011 surpassed $3 billion.

Since the official visit of the Chancellor Merkel to Algeria in July 2008 and the official visit of President Abdelaziz Bouteflika to Germany in December 2010, the bilateral relations have entered a phase of new dynamic, full of promising perspectives. The new impetus given to our relations by the visit of President Bouteflika, which resulted in the finalisation of many projects, particularly in the fields of automotive, electronics and mechanics, have put our relations in a strategic perspective.

This visit resulted also in the creation of a joint commission for economic cooperation, which will serve as a mechanism to follow-up and intensify the economic and trade relations. Relations between the two countries will jump to new heights and I hope that will open the way for the establishment of a solid, fruitful, sustainable and mutually beneficial partnership.

In what areas would you like to see further cooperation between the two countries?

Today the level of our economic and trade relations is satisfactory. But we can do more and better, particularly in terms of partnership and investments. The sector of mechanics, automotive and electronics have already, with the projects agreed during the visit of my President in December 2010, opened the way.

In fact when the joint commission met for the first time in Berlin in March 2011 and for the second time in Algiers in April 2012, both countries have identified sectors like energy, renewable energy, agriculture, pharmaceutical industry, tourism, environment and water resources as the priorities to be  developed in the coming years.

We in Algeria have a great interest not only in German products which enjoy a good reputation, but also in German technology, know-how and the German system of vocational training. We have already submitted some draft agreements on that matter to the German side and we hope to agree on them very soon.

A final message for the readers of FT Deutschland?

After years of economic, financial and social reforms, another package of political reforms was launched by President Bouteflika last year. These reforms, which comprise new electoral laws, new laws on political parties, a law which guarantees a much bigger role for women in the political decision-making process, and a new law on media which opens audiovisual media to the private sector, will culminate with the reform of the constitution itself. This program, which resulted in the organisation of our legislatives elections on the 10th May 2012, in a democratic and transparent manner as testified by international observers,  is aimed at consolidating and deepening democracy in Algeria and thus, meeting the aspirations and expectations of the Algerian people. At the same time, Algerians know that the political advancement goes hand in hand with economic and social progress which is a matter of national efforts and of smart cooperation and partnership. For that Germany can play a big role and we in Algeria stand ready to go a long way with Germany.