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Algeria: Boutef's Moroccan connections

May 2006
Everyone involved is very scared to talk about it, but Algerian state companies are increasingly drawing on the Moroccan experience of reforms, bringing in managers and expertise from the neighboring kingdom in a number of key sectors. This process has the support of the top echelons of decision makers in both countries although probably not with elite and popular nationalist opinion, hence the extreme discretion that surround these exchanges.

Algeria Focus understands that President Abdelaziz Bouteflika has been directly involved in talks about involving Moroccan business more deeply in Algerian affairs.

This is despite the two countries' borders having been closed since 1994; land frontiers show little sign of reopening, as the standoff over the disputed Western Sahara continues. However, exchanges continue in the formal economy, as well as the informal sector. Air Algerie , Royal Air Maroc and Tunis Air are among those with regular flights"and these are pretty full," a Moroccan source said.

Usually very reliable sources canvassed by Algeria Focus in Morocco say that an increasing number of Moroccan managers have been drafted in to help prepare Algerian state companies for privatization. Fellow Maghrebis, Moroccan businesspeople are at least a decade ahead of their Algerian counterparts. Managers and experts from the kingdom have practical experience of pre-privatization restructuring that Algeria needs.

Algeria Focus has been told that two major Moroccan banks have been asked to bid in the privatization of an Algerian bank Credit Populaire d'Algérie ( CPA ), we understand. A small delegation of senior Moroccan bankers visited Algiers to examine this project and met Bouteflika himself, two sources close to the meeting confirmed.

Whether the banks will participate in the privatization of CPA or another institution is uncertain, however.

We believe the bankers were given a significant political push to attend, but found potentially irreconcilable differences with the Algerians.

Bouteflika as Algeria Focus has pointed out before remains an advocate of state domination of finances, as he showed muscling local private and international banks out of project financings for Sonatrach , Sonelgaz and other state companies. In talks with the Moroccans, he expressed surprise that the big Casablanca banks themselves, not the Moroccan state or central bank, set their own credit limits (as any normal international bank would do). He could not conceive of this being possible for a privatised Algerian bank suggesting that commercially-minded Moroccan bankers, as with their French and other international counterparts, may be somewhat relieved if they are allowed to pull back from any buy-in (of a minority stake) in an Algerian institution.

Also in the current issue of Algeria Focus
Policy Focus
Deja vu in Algiers and Paris as Bouteflika bites back
Talk about succession
Refighting old battles
Tactics or substance
Divergent views
What is Sarko talking about
Algeria a touchstone issue for the nationalist French right
Presidential health: rumours will not go away
Manipulation and manoeuvre
Boutef's Moroccan connections

Politics & Security
Ouyahia plays the loyalty card
FLN seeks stronger presidency
RND defends multi-party system
Re-arrest for Islamist militants wanted abroad

Geopolitics
Qadhafi's pan-Saharan rhetoric is empty but still unwelcome
General Gaïd goes to Washington

Energy Industry
Authorities hurry to elaborate new superstructure before launch of seventh
International licensing round
Seventh round prospects
Gassi Touil gets going
ExxonMobil closes in on Sonatrach 's Niger portfolio
Sonatrach scuppers GDF-Dana asset swap
Plenty of discoveries plenty of exaggeration?
FCP gets breathing space and funding
Energy in brief

Business Environment
Asians run off with motorway contracts
Algiers public transport upgrades
ADP secures Algiers airport contract
BT eyes stake in Algérie Telecom
Macro-economic indicators looking good
Avian flu panic hits poultry industry

For further details about Algeria Focus see www.menas.co.uk

© Menas Associates 2006