The army that turned into a political party

In Algeria today, while a succession of cold air waves is planned from Sunday on the north of the country, the current president called the Electoral Corps for the next presidential elections due on April 18, 2019.

Certain members of the opposition stated that as off the country’s independence, it was always the armed forces that appointed the president and that it has now become “The army that turned into a political party”.  

Bouteflika by GettyImages in The Spectator 2016

Meanwhile, per El Kadi Ihsane on El Watan, one of the most damaging consequences of the lack of Algerian political leadership for more than a decade is the loss of the spirit of conquest.  That has a considerable cost in an economic shortfall. The essence of conquest is shaped by the perception that one is made of the trajectory of Algeria as an economic and diplomatic actor on great foresight.  The Bouteflika, current president’s years suggest a minimum reading of Algeria’s potential, and therefore its ability to conquer its shares in the world economy. The damage suffered is slowly spreading.

For the sovereign fund that Algeria did not want to institute in the aftermath of the crisis of the subprime from 2008, to acquire global industrial assets that have become cheap. This strategy was certainly challenged by some economists believing that Algerian exchange reserves were not so ample to fuel a large investment fund. It would not have, for other economists, not amputated these foreign exchange reserves by more than $20 billion: mostly enough to produce the right leverage and “buy time” by taking control of not only some industrial florets in perdition, but also, of some technological values in the strategic fundraising phase in a depressed capital market between 2009 to 2012.

The mental universe of Algerian governance of the Bouteflika years is thus made. He does not see the world as an opportunity but rather as a danger. The Algerian balance of payments would not have baulked from 2021 to the entry of $1 to 2 billion of dividends a year to the Central Bank, a fruit offset from the acquisitions missed ten years ago.  And the real harm is not even there.  It is in the loss of the opportunity to relocate to Algeria segments of the chain of value of some streams of activities that would not have come otherwise. The model CEVITAL with Brandt and Oxxo, but at the scale of sovereign power, PSA (Peugeot – Citroen) could accommodate Algerian capital at the worst of its financial crisis in 2012. This might have changed the specifications of the current automotive assembly solutions launched when the oil market turned.

SONATRACH might have restored a bit of that, with the acquisition of the Augusta refinery in Sicily, that is a fragile tradition of investment abroad. It recalls, in turn, that the failed initiative of an Algerian international investment fund is fundamentally a flaw in perception. Always danger, never an opportunity.

Buy Djezzy or group Orascom?

The frozen idea that Algerian political power has of the potential of its economy leads it beyond the loss of the spirit of conquest. It feeds on the spirit of a besieged fortress.  In a reverse cosmological path, Algeria should have redeemed ORASCOM rather than merely taking the majority of its Djezzy division. Two “quick win” measures that could have supported economic growth in the next few years if these were introduced from 2019: the opening of the land border with Morocco and the reform of the Algerian visa to make it cheaper and exceptionally easy to obtain. The supply of Algerian goods and services on the Moroccan market is not that of August 1994, when the land border had closed.  Electronics, household appliances, medicines, packaging, construction material, agro-industry, solar panels, sanitary products, para-pharmacy, flat glass, industrial gases, petroleum products: Algerian commercial candidates in the Moroccan market are at least as numerous as the Moroccan in the running to come and sell in Algeria. 

Exchanges, lower costs per line of advantage, greater productivity by competition and by the higher size of the target market (37 million more consumers), so the incidence of growth for all. If Algiers does not observe it this way, it is because it measures the capacity of the Algerian economy in the yardstick of public enterprises which must be recapitalised every five years. The open Moroccan market is therefore only a danger. Not an opportunity. Undervaluation, citadel spirit. The same for international tourism. The refusal to open up to a source that can become significant, of income in foreign currencies, is based on the same atavistic fear of the great outdoors.  It is safer than economic this time. The DNA is the same. Algeria is a country, an economy, an ecosystem, fragile that needs to be protected from mixing. Too bad if it does not capture 4 to 5 million foreign tourists per year and with it all related domestic turnover.

Algerians would not enough be ripe civically to receive the rest of the world. They would lose their pre-globalist “naivety”.  Their superb coastline would be polluted by off-shore tourist villages together with their damaged landscape. That the country is environmental and architectural chaos, it is not the problem as it takes place behind closed doors. It is sheltered from the walls of the citadel. To conquer the world by bringing it to the sharing of its breathtaking tourist offer is not in conformity with the assessment of the political power of its country and its economy. To protect, to hide, to close. Because weak, immature, fragile. 

Artificial intelligence in Technology jump mode

The spirit of conquest in economics is a mental disposition to make technological leaps in development.  The transition and digital maturing consultant, Ali Kahlane believes for example that Algeria can quickly become a respectable actor of the Artificial Intelligence industry (AI), third floor (after the computer then Internet) of the Third World technological revolution. The ingredients necessary for the development of AI solutions in the digital world, according to him, be met in Algeria including computer scientists and mathematicians.

Companies in phase with the problem of a digital solution of their trades should direct their budget research and development towards AI.  The state would, as in China and India, put the right incentives to develop the research ecosystem and its applications. One may have more or less failed to be a digital player and make the direct leap to the production of artificial Intelligence, according to Ali Kahlane.  A few conditions above.  Has an essential condition anyway.  Have a government of the country be aware of the potential of its young start uppers.  A government that has the spirit of conquest.  For the AI, as for the rest, we shall have to wait.