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The Emerging New Economic Climate in Algeria – Susa Africa Analysis

Algeria possesses substantial mineral resources, including quantities of gold, zinc, copper, and phosphates. Many of them have been left unexploited, but now the country is counting on them to diversify its economy and government changing her rules of doing business, attracting foreign investors and creating job opportunities for her citizens.

Similarly, Algeria has the tenth-largest proven reserves of natural gas in the world, is the sixth-largest gas exporter and has the third largest reserves of shale gas. It also ranks sixteenth in proven oil reserves. There has been some diversification in exports, but oil and gas still account for more than 90% of revenue. With deposits of gold, zinc, copper and phosphates, Algeria has significant mineral resources. The International Monetary Fund (IMF) has indicated that medium-term economic prospects would rise with sustained reforms to diversify the economy (thus reducing dependence on the hydrocarbon sector) and create higher and sustained growth and job creation. Such reforms would require steady implementation of the government’s action plan, higher private investment and improvements in the business climate more generally, more developed domestic financial markets, and new export opportunities for nonhydrocarbon products—as the authorities are currently pursuing.

Abdelmadjid Tebboune won the December 2019 presidential election from a field candidates all associated with the era of Abdelaziz Bouteflika, the long-serving head of state forced out of office by mass protests in April. However, Algeria is scene to subtle changes on sociopolitical, economic, and foreign policy levels that are likely to shape the country’s future. The Tebboune administration has muzzled the political scene and proved more prone to populist social welfare policies while reclaiming a proud foreign policy stance. These shifts also highlight a systemic attempt to redefine the “new Algeria” all while social actors struggle to safeguard historical gains on individual and collective liberties.

In the meantime, prioritization of Algeria’s economic and social development mirrors its value to China’s foreign policy. Algeria became the first Arab nation to establish a comprehensive strategic partnership with Beijing in 2014. Historically, both partners stood united against the forces of imperialism and colonization and remained unwavering in their support for one another’s sovereignty at the United Nations. Authorities say, to attract foreign investors, the country has come up with a number of legal reforms such as tax incentives, legislative stability, lease of land for up to 10 years, guarantees for the transfer of funds and less bureaucracy. In 2019, the country’s parliament approved a new investment law to spur economic growth. With the hope that it will eventually improve the business climate.

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