Algeria

Algeria became independent from France in 1962 and has since been ruled by the National Liberation Front (FLN). Throughout the years, discontent toward the FLN grew and the Islamic Salvation Front (FIS) won the first round of elections in 1991. Perceiving the FIS as an extremist organization that wanted to take power, the government exercised its military influence and delayed the second elections. In 2004, Abdelaziz BOUTEFLIKA was reelected into office, after his 1999 win through pseudo-elections, and he has been struggling with the same kind of problems such as unemployment and limited housing. In 2006, the country offered amnesty to Islamic militants, who have not committed rape, bombings or massacres, provided that they surrender, but not many accepted.

Main Airports

Algiers (ALG) (Houari Boumediène), Annaba (AAE) (Les Salines), Oran (ORN) (Es Senia)

U.S. Embassy

4 Chemin Cheikh Bachir El-Ibrahimi, Algiers
tel. 213 (21) 691255

Statistics

GDP: purchasing power parity:

$233.2 billion (2005 est.)

GDP - real growth rate:

6% (2005 est.)

GDP - per capita: purchasing power parity:

7,200 (2005 est.)

Inflation rate (consumer prices):

1.9% (2005 est.)

Labor force:

10.15 million (2005 est.)

Exports:

$49.59 billion f.o.b. (2005 est.)

Exports - partners:

US 22.9%, Italy 16.6%, Spain 10.4%, France 10%, Canada 7.9%, Brazil 5.7%, Germany 4.4%, Belgium 4.2% (2005)

Imports:

$22.53 billion f.o.b. (2005 est.)

Imports - partners:

France 27.8%, Italy 7.6%, Spain 7%, Germany 6.6%, China 6.5%, US 5.4%, Turkey 4.5% (2005)

Population:

32,930,091 (July 2006 est.)

Population growth rate:

1.22% (2006 est.)

Population Below Poverty Line:

25% (2005 est.)

Major Industries:

petroleum, natural gas, light industries, mining, electrical, petrochemical, food processing

Employing Workers: 93*

Registering Property: 152*

Enforcing Contracts: 61*

Closing a Business: 41*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Algeria	Region
Procedures (number)	14	10.3
Time (days)	24	40.9

Algeria Risk Assessment

Country Rating

Rating: A4

A somewhat shaky political and economic outlook and a relatively volatile business environment can affect corporate payment behaviour. Corporate default probability is still acceptable on average.

Risk Assessment

The non-oil economy posted strong growth in 2007 estimated at 6 per cent underpinned by continued public investment under the economic growth support programme and buoyant household consumption, spurred by civil service wage increases. Construction, the automotive industry, pharmaceuticals, and the food sector outperformed. However, an oil production slowdown, reflecting the external demand trend, undermined overall economic growth estimated at 4.8 per cent. The growth outlook for 2008 is bright with the economy's growth rate expected to accelerate at 5.2 per cent. The planned increase in gas production will foster an oil sector recovery. In the non-oil sector; domestic demand (public investment and household consumption) will drive economic activity. An expansionary budget, rising wages, and the increasing cost of imported products, attributable to the dinar depreciation against the euro, should continue to stoke inflationary pressures. Prudent monetary policy should, however, hold inflation to about 4 per cent.

The country currently enjoys unprecedented financial health with very limited foreign debt and very amply foreign exchange reserves sheltering it from a liquidity crisis. With the prospect of continuing high oil prices, external and public accounts should continue to show large surpluses. Although companies have benefited from very buoyant economic conditions, progress on the structural reforms that could also benefit them, particularly those in the banking sector, has been lagging as exemplified by delays in the privatisation programme. Moreover, developments in the security situation will continue to bear watching.

The business environment has occasional shortcomings, (poor corporate transparency and red tape) and can be responsible for late payments and claim collection difficulties.

STRENGTHS

• The country boasts substantial natural wealth and Europe provides it with an immense market.
• The Oil Stabilization Fund, intended to allow the country to weather an oil market downturn, has contributed to financing the economic growth support programme.
• The government achieved its debt reduction policy successfully.
• The country is engaged in a reform and economic liberalisation process.

• The economy is very dependent on oil revenues.
• Unprofitable, overstaffed state-owned companies continue to weigh on public sector finances.
• High youth unemployment, although trending down, has been a source of social tensions and an impediment to certain reforms.
• A lack of infrastructure and a deficient banking system, despite the reforms under way, have affected the business environment.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation