Washington DC – French car maker Peugeot Citroen’s decision to build an assembly plant in Morocco came as a slap in the face for the Algerian authorities. Algeria unsuccessfully lobbied to host the factory in the city of Oran. As French, American and Chinese companies continue to invest in Morocco, Algerian officials have been intensifying their anti-Morocco rhetoric in an effort to distract domestic public opinion from the government’s failures to attract investors and create jobs.
Peugeot Citroen and Renault, another major French car maker, opened factories in Morocco and not Algeria because the Kingdom has a state of the art port in Tangiers, highways and freight train systems that help in transferring exportable goods and laws and regulations that protect investors. On the other hand, Algeria doesn’t have ports that will meet international exports demands, lack fitting transportation infrastructures and requires 51% national ownership in multinational ventures.
Morocco, with all its challenges, is an emerging market that will continue to show strong promises. King Mohamed VI personal involvement in outreach efforts made a difference in attracting big name companies and boosting the economic attractiveness of the Kingdom. Foreign-investor interests will likely remain static for the near future as long as the country delivers on the economic and infrastructure undertakings pledged by Rabat.
Peugeot’s decision highlights the Bouteflika government’s incapability to address the countries dire socio-economic situation. Algeria’s inability to attract foreign investments is a result of years of economic mismanagement by successive incompetent governments and not a Moroccan “plot” as some Algerian officials claim.
As Morocco keep “rejuvenating” its government and boosting its business and entrepreneurship leadership with young, energetic and highly skilled Moroccans, Algeria continues to be governed by Soviet Union-educated politicians and oligarchs in their seventies. It is no surprise that investors from around the world prefer Morocco for their financial services, heavy industry and communication projects.
Algerian governments, past and present, view foreign direct investments in Morocco as “an attack” on them and an attempt by the Kingdom to weaken the Algerian economy. Seldom when Algerian officials self-assess the impact of their archaic financial and labor laws, Soviet era economic policy and endemic corruption on the decision of big companies to set up shop in the Kingdom rather than in Algeria.
The incompetence of the current government of Prime Minister Salal is the true obstacle behind Algiers powerlessness to attract investments. If the military backed government doesn’t address the political impasse facing the nation, including the presidency of an incapacitated President Bouteflika, the Algerian economy will remain a hostage of oil and gas prices. In fact, attracting substantial ventures will remain elusive as long as the politics is dominated by the old guard and the economy is run by the military establishment.
As big multinationals continue to boost their presence in Morocco, Algerian officials persist in their denials of the true reasons behind their neighbor’s success and their own failures. Business leaders make decisions based on sound financial analysis and not on political favors.
Foreign direct investments flow to Morocco because the Kingdom is more attractive than Algeria. Despite Algerian accusations, no amount of bribes or political favoritism will bring foreign direct investment into a country. Morocco lured International corporations by showcasing the country’s infrastructure and promising more liberalization of its economic policies.
Algeria’s economy will take off once the government addresses its s economic shortcomings. Turning Morocco’s diligent efforts to attract investors into a conspiracy doesn’t serve the interests of the Algerian people. In fact, this approach will plunge the country into further economic and political abyss.
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