An undiscovered but attractive market: Algeria

                                                                                                                                              

With rich petroleum and natural gas resources accounting for 96.5% of revenues, Algeria is attempting to make its economy less dependent on oil and natural gas by diversifying its export products.

The roots of Algerian civilization goes back thousands of years to the Phoenicians. In addition to a rich historical heritage, the country's economic data are also quite impressive. However, the country has a need for investment and consumer products in many areas. The initiation of an economic liberalization scheme, the country's need for investment and consumer products in almost every area and a decrease in terrorist activities have made the country an attractive market. With these new developments and its goal of economic improvement, Algeria has significant potential for Turkish investors.

Emir Abdelkader Square in Algiers

10 percent for Turkey
The first official visit by the office of the Prime Minister in 21 years took place last May. The "friendship and cooperation agreement" that Algeria signed during the visit with Spain, Portugal, Italy and Turkey provides for Turkey to receive a 10 percent share of the 80 billion dollars of investment.

Know – how and technolgy TOne of Turkey's most important African trading partners, Algeria is the largest country in North Arfica in terms of land area and has the most extensive petroleum and natural gas reserves in the region. A variety of initiatives aimed at opening up to the outside world and attracting foreign investment in terms of know-how and technology are among the steps being taken to liberalize the economy. Algerian GNP grew at a rate of 5.2 % in 2004, cooling off only slightly in 2005 to 4.8%. The IMF predicts that the Algerian economy will grow 5.3% in 2006. Third largest oil producer in Africa Algeria is the 3rd largest oil producer in Africa and 12th in the world. It is the world's fourth largest producer of natural gas and 3rd largest exporter. Naturally, the majority of Turkey's imports from Algeria are petroleum products. A 20-year contract for annual natural gas purchases/imports of 4 billion cubic meters was signed 10 years ago between BOTAŞ and SONATRACH, marking a turning point in commercial relations between our countries.

Ryad El Feth Monument

Robust demand & a wide range of products
A large share of Turkey's exports to Algeria are finished or semi-finished goods. A wide spectrum of products are in demand on the market, ranging from textiles to foodstuffs, iron/steel goods to electrical machinery. However, even though the tendency of this market to import cheap goods has resulted in the import of low-quality Turkish products, increased Turkish investment in local production and the fact that a number of products ranging from foodstuffs to ceramic have penetrated the market in recent years and achieved name brand recognition has boosted the image and quality of Turkish goods.
The value of Turkish goods that reach Algerian markets through re-export from Spanish, French and Italian ports, transit via countries which are members of the Arab Maghreb Union or the suitcase trade are estimated to be around 500 million dollars.

One of Turkey's top target markets
The Customs Union signed between the European Union and Turkey, as well as the Partnership and Cooperation Agreement signed between the EU and Algeria connect both of these countries to the EU. This is why Algeria has become a top target market for Turkey and requires that many important steps be taken. With the signing of the Free Trade Agreement, which was had been left unconcluded since 2002, the trade volume between Turkey and Algeria which has increased rapidly in recent years will accelerate even more increasing Turkish influence in the country.

Cezayir Port

The balance of trade is in Algeria's favor
The process of liberalization in the Algerian economy has made economic relations between the two countries more dynamic. However, in spite of positive developments in recent years, the foreign trade balance is still in Algeria's favor. Exports 10 years ago amounted to 269 million 187 thousand dollars but had grown to 806 million 371 thousand dollars by 2005. Imports rose from 447 million 970 thousand to 1 billion 693 million dollars. According to data from the first 5 months of 2006, the value of our exports fell 14.6 percent to 305 million dollars. Exports, on the other hand, grew 19.3 percent to 851 million dollars.

Cheap energy and labor
There is extensive Turkish investment in Algeria in foodstuffs, furniture, electronics and pharmaceuticals, but primarily in construction. With its low-cost energy and labor, as well as a number of tax advantages, Algeria, is a developing country that Turkish investors would do well to become familiar with. The Algerian government has allotted 10 billion dollars a year to investment in a number of sectors for the five-year period beginning in 2005 within the framework of the plan to revitalize the economy. Furthermore, there is also 55 billion dollars of funding available in the construction and contractor sectors for the reconstruction of the country.

Barbaros and Oruç Reis went to their aid
A country which has seen the development of many civilizations throughout history, Algeria's relations with Turkey go back to Ottoman times. Following the occupation of two Algerian cities by the Spanish at the beginning of the 15th century, the Algerians appealed to the Ottoman Empire for assistance. When Oruç Reis and Barbaros Hayreddin Pasha came to Algeria in 1514, it marked the beginning of more than 3 centuries of Ottoman protection. Due to this common cultural bond rooted in history, Turks are warmly welcomed here. It is possible to take advantage of this trust and the warm relationship to develop business relations and to make investments in Algeria.