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Interview Ali Haddad, President of the Algerian Business Leaders Forum (FCE): Public-private partnerships to establish a win-win situation for the economy
još 25 min. čitanja
7. Novembar 2017.

Interview Ali Haddad, President of the Algerian Business Leaders Forum (FCE): Public-private partnerships to establish a win-win situation for the economy

Haddad is also majority share owner and president of Algerian Ligue Professionnelle 1 and the soccer club USM Alger.
Interview Ali Haddad, President of the Algerian Business Leaders Forum (FCE): Public-private partnerships to establish a win-win situation for the economy
Alžirsko tržište je jedno od najdinamičnijih i najisplativijih

Uključivanje privatnog sektora u upravljanje industrijskim zonama je prijedlog koji je alžirska vlada usvojila

As part of an interview series with special guest speakers of the 2017 Transatlantic Economic Forum, we sit down with Ali Haddad, CEO and founder of ETHRB, and President of the Algerian Business Leaders Forum (FCE). He is the recipient of the 2016 Mediterranean Basin Leadership Award.

Haddad is also majority share owner and president of Algerian Ligue Professionnelle 1 and the soccer club USM Alger.

A native of the port-city Azzefoun in Kabylia, Haddad established ETRHB in 1988, while also running a hotel with his brothers. Haddad’s businesses expanded rapidly, especially after winning a 41-million-euro road-building contract in 1993 and, after surviving a kidnap attempt during the Algerian civil war two years later, his company picked up major contracts as Algeria’s new president, Abdelaziz Bouteflika, sought to relaunch the economy after elections in 1999.

Algeria has always had a substantial private sector, despite the state capitalist economy that was created after independence from France in 1962. Economic liberalization began under President Chadli Bendjedid in the 1980s but really took off after the country adopted an IMF debt restructuring program in 1994.

On November 13-15, Haddad will participate in the 5th annual Transatlantic Economic Forum organized by the Center for Transatlantic Relations SAIS at Johns Hopkins University in Washington D.C. in partnership with the U.S. Chamber of Commerce.

In the framework of the new “model” of economic growth adopted by the former government of Abdelmalek Sellal in June 2016, you have recently stated that the management of industrial zones (and industrial parks along the East-West motorway) should be in the hands of the private sector. Why is this so important?

This is indeed a very important issue. Industrial land represents a major concern for the Algerian private sector and poses limitations on investment. Many productive projects that could create jobs have not been realized because of this constraint.

As part of our reflections and our contributions to lift the lock on the availability of industrial land, the Forum of Business Leaders (FCE) formulated in its advocacy "For the emergence of the Algerian economy" a proposal to grant the private sector the possibility of creating, developing, and managing – as part of the concession system – industrial parks along the East-West Highway. This infrastructure, which is connected to the ports, will facilitate the transportation of goods and people and will save time for businesses. The East-West motorway is a solution to the logistical problems faced by businesses. We strongly recommended that the management of these industrial zones be delegated to the private sector, and we are convinced that the private sector can contribute to the elimination of the shortage in industrial land. This would be done by launching a first pilot program covering ten industrial parks of a minimum of 3,000 ha, totaling 30,000 ha, to be developed and managed according to specifications previously established in consultation between government services and employers' representations. FCE is willing to engage its responsibility for the creation of private companies for the realization of such a project. The proposal of involving the private sector in the management of industrial zones has been adopted by the Algerian government as part of its action plan and we very much welcome this development.

Algeria's unemployment rate exceeds 12 percent, according to official figures. In a country of 40 million, where half of the population is under 30, one in three young people is unemployed. What role will the private sector play in countering unemployment and improving the economy?

The private sector contributes significantly to job creation in Algeria. According to figures provided by the National Office of Statistics, private businesses create two out of three jobs in the Algerian economy.

However, the Algerian unemployment rate, which went from 10.5% in September 2016 to 12.8% in April 2017, worries us. The youth unemployment rate of 30% is even more worrying. These numbers are alarming from a societal point of view, but in the overall approach of public authorities, working closely with employers' organizations, several mechanisms have been created to absorb the growing demand for employment, especially among young people. In this context, Algeria has organized several mechanisms, such as ANGEM, ANSEJ and CNAC.

Ali Haddad: Zainteresirani smo za američke stručnjake

As an employers' organization, we work with the government and social partners in the framework of dialogue and negotiation in order to find lasting solutions to unemployment. We consider it essential to adapt employee training to the needs of the labor market. At FCE, we have made several proposals related to the fight against unemployment, the regulatory framework governing labor relations as well as training, whether academic or professional, which must be adapted to the evolution of Algerian companies. In addition, we believe that it is essential to provide new requirements that can encourage companies to create new jobs. These actions must be part of a global strategy to encourage the creation of new SMEs, given that the private sector employs nearly 60% of the working population.

You have previously stated that public-private partnerships (PPPs) are the key for economic development in Algeria. How has Algeria’s private sector worked with the government to install action plans to increase PPPs and develop small and medium sized enterprises (SMEs) and startups?

We are in the phase of drafting regulatory texts to oversee this partnership mechanism. In this sense, there is a need for a legal framework that allows public and private enterprises, domestic or foreign, to cooperate on common objectives by sharing the risks, responsibilities, resources, skills, and advantages. There are requirements for meeting the conditions for successful PPPs. FCE advocates for good governance and management freedom and transparency of public enterprises, the awarding of public contracts, and the undertaking of far-reaching reforms for the administration to focus more on its oversight and market regulation, support and encouragement of investment. We are convinced, at FCE, that PPPs will deliver the state of activities that divert it from its real missions, such as the management of public services (water distribution, electricity, transport air and sea, etc.). FCE perceives PPPs as an opportunity to establish a win-win situation that aims to build a complementary and intelligent relationship between the state and the private sector.

What is your outlook for the economic relationship between the U.S. and Algeria in years to come?

Allow me to reassure the American business community about the business climate that is making major progress and is in a continuous process of improvement. The Algerian market unquestionably presents itself as one of the most dynamic and profitable markets in the region. It is no longer, from my point of view, acceptable that trade between Algeria and the U.S. remains at the current level and is so little diversified. As I have said during my various trips to the U.S., Algeria wants to establish exceptional economic relations and a future with the United States of America. Important opportunities exist in various sectors besides hydrocarbons, such as mines, renewable energy, medicines, agriculture, and agro business. American expertise in the fields of biotechnology, digital technology, and the automotive industry are of interest to us. I invite American companies to focus more on Algeria, which has important investment opportunities. FCE is willing to actively contribute to strengthening cooperation between the businesses of our two countries.

In November, you will participate in the 5th annual Transatlantic Economic Forum in Washington D.C. How do you view private sector partnerships with the countries of the larger Mediterranean?

The countries of the Mediterranean basin were lagging behind other regions, particularly the Americas, which have managed to create very dynamic free trade zones. However, I think we are catching up.

The Algerian private sector has embarked on an approach to strengthen business relations with the economic communities of the countries on the other side of the Mediterranean, which are in very sophisticated markets. In this way, it can strengthen its leadership in the African market.

We are thus for triangular partnerships to widen the scope of opportunities. We are for the diversification and multiplication of partners in all regions of the world and the Mediterranean and America remain important regions for Algeria.