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Algeria Seeks Brazil's Help in Agriculture

28 January 2009

ALGERIA - Algeria wants Brazil to help it develop sectors of its economy, particularly agriculture and industry.

The issue was discussed yesterday during a meeting between the minister of Development, Industry and Foreign Trade, Miguel Jorge, with the Algerian prime minister, Ahmed Ouyahia, and in the Brazil-Algeria business seminar held at the Sheraton Club des Pins hotel, in Algiers. Jorge heads a Brazilian trade mission to North Africa. Algeria is the second leg of the trip.

The minister said that there is a possibility of the Brazilian Agricultural Research Corporation (Embrapa) and the Brazilian Agency for Industrial Development (ABDI) transferring technology to the segments of dairy cattle, grain farming and different areas of the industry.

“They are in need, for instance, of industrial planning, because their industry is almost entirely state-owned. Now, a process of restructuring and privatisation is underway,” stated the minister. Representatives of the ABDI and Embrapa are part of the delegation.

In the seminar, the Algerian minister of Trade, El Hachemi Djaaboub, said that the main concern of his country in the field of economy is the fact that it is based on “export-oriented monoculture,” namely the oil and gas industry. At the same time, Algeria needs to import everything, and that often follows a triangulated scheme, with purchases not made directly from suppliers, but rather by means of third parties.

Besides promoting direct trade between exporters and importers, the Algerians want to develop industries such as those of vehicles, medication, petrochemicals, fertilisers, steel, textiles, shoes and the agroindustry. In agriculture, the country wants to develop production of milk, wheat, soy and maize.

In the case of milk, for example, Algeria, which is currently one of the leading importers of powdered milk from Brazil, intends to replace foreign purchases with local production. Djaaboub stated that the country would like to have access to the dairy cattle breeds bred in Brazil, more resistant to hot weather than European cows, for instance, and to handling techniques used in Brazilian cattle farming.

The same holds true of wheat, soy and maize cultures. Especially with the two latter, Brazil has developed varieties of plants and cultivation techniques that enable high levels of productivity in hotter and drier areas. “Cooperation between our two countries is an example of South-South cooperation,” said the Algerian minister.

In order to enable this technology transfer, the Algerians not only want help from the Brazilian government, but also private investment by means of bi-national joint ventures.

To Jorge, this type of partnership is feasible, especially in areas such as food processing, the textile industry and information technologies. During the seminar, representatives of the Algerian government and private sector highlighted the incentives that the country grants to foreign investment and the facilities it offers for exports of finished goods, such as, for instance, the European Union Association Agreement, which allows for the entry of Algerian products in the bloc without the charging of tariffs.

The president of the ABDI, Reginaldo Arcuri, listed other segments in which there may be cooperation, such as auto parts, medical and hospital equipment and mineral exploration.

“We propose that Algeria be used as a base for manufacturing and exports to Europe, other Arab countries and Africa,” said the president at the Algerian Chamber of Commerce and Industry, Brahim Bendjaber. The idea is exporting inputs to Algeria, processing them in the country and then re-export them as finished products.

Invitation

The president of the Arab Brazilian Chamber of Commerce, Salim Schahin, stated that for many years now, the organisation participates and supports actions turned to fostering trade relations with Algeria. “We are glad to improve the development of our relations,” he declared. He mentioned some events in which the Chamber had an intense participation, such as the visit of the Algerian president, Abdelaziz Bouteflika, to Brazil, in 2005.

“We would like to invite the Algerian businessmen to visit Brazil and witness the country's potential as a supplier and buyer of products and services, aiming to increase the business volume between the two countries,” said Schahin. “We hope that the Algerian companies will resort to the Arab Brazilian Chamber when seeking opportunities,” he added.

Algeria has approximately 35 million inhabitants, a Gross Domestic Product (GDP) of US$ 135 billion and foreign exchange reserves of around US$ 110 billion. The trade balance with Brazil generates a US$ 1.9 billion surplus for the Arab country.

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