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Monday, 21 January 2008

Algeria urges Arabs to invest more

By Lamine Chikhi

ALGIERS, Jan 20 (Reuters) - North African energy exporter Algeria urged on Sunday Middle Eastern Arab countries to invest more and help reduce its economic reliance on oil and gas.
Prime Minister Abdelaziz Belkhadem told reporters at an economic forum that he wanted Arab investors to be "more aggressive" in helping create jobs in what he called a very attractive economy.
"Intentions are good but we need to go beyond that," PM Belkhadem said.
According to the Algerian Investment Promotion Agency (ANDI), 227 Arab investment projects were registered in Algeria in the past six years, of which 53 were Algerian-Arabian joint ventures and 174 direct Arab investment projects.
Figures compiled by the Algerian Chamber of Commerce and Industry show that out of $40 billion of pledged foreign investments, including Arab investments, for 2007 only $9.5 billion were actually started.
Algeria is enjoying a petrodollar windfall, earning about $1 billion a week in oil and gas exports, but has been slow to create more jobs. Unemployment among adults under 30 is running at about 70 percent.
Arab investors are already significant investors outside the energy sector. They say privately they would like to invest more but find Algeria very bureaucratic.
Top Arab investor is Egyptian company Orascom with almost $10 billion already invested in the booming telecom sector, cement, and water desalination. Kuwaiti Wataniya is also present in the mobile sector.
UAE's Emaar company is planning to invest $20 billion in development projects, but observers say they fear that it could be years before the projects are implemented due to red tape and lack of access to property.
UAE's Etisalat has also shown interest in buying shares in the privatization of Algerie Telecom, but the government has not yet decided when and how much it would sell.
"Algeria should do much more to attract investors. It should reduce bureaucracy, fight corruption, and be more transparent" Algerian economic expert Malek Serrai told Reuters.
He added that red tape and graft were helping to prevent the implementation of President Abdelaziz Bouteflika's $140 billion, five year investment programme aimed at rebuilding the country after 15 years of political violence.
Algeria sank into violence in 1992 when the military-backed government scrapped elections an Islamic party was poised to win. Up to 200,000 people were killed in subsequent violence.
"The government is unable to transform the oil money into concrete projects that provides jobs to the youth," Serrai told Reuters. (Reporting by Lamine Chikhi; editing by Elizabeth Fullerton)

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