Remarks to U.S. ABC construction symposium 

 

I'll try not to speak too long but I do want to make a few points.
 
First, it's a great pleasure to be here today to welcome you to the US-Algeria Business Council Construction Symposium.  The USABC has played an important role in promoting U.S.-Algerian economic ties and in alerting U.S. firms to investment and commercial opportunities in Algeria.  So we thank the Council and its President and CEO, Dr. Chikhoune, for bringing us here today to focus on one of the most important areas where U.S. firms can contribute to Algerian modernization.  We also thank Mr. Tibaoui of the World Trade Center in Algeria for their help in organizing this symposium. 
 
Second, in coming here today, you have really come to the right place at the right time.  For Algeria, having passed through a difficult period in its history, is now poised for growth and there is abundant opportunity here -- and now.   To be sure, there are many challenges to be met and Algeria is experiencing the growing pains of an economy, a people, and a system in transition.  But Algeria has charted a course toward a new model based on democracy and open markets.  And this reformist vision is one that the United States shares and wants to help realize.  Because an Algeria that is democratic and prosperous and that can meet the political and economic aspirations of its people will be a bulwark against terrorism and a factor for peace and stability in the region.  And this is in the interest of Algeria, the United States, and the region. 
 
You have come to the right place because Algeria IS making progress.  It has embarked on a broad program of modernizing reform.  It has turned its financial situation around.  It has moved toward the final stages of its WTO accession bid.  It has embarked on privatization, recognizing that governments don't create wealth, they only distribute it.  Algeria also has an economy that has been growing at a steady 5-6% for the past few years.  It has abundant reserves and resources.  And it has important human capital that, with sustained investment in education, expanded opportunity, and a more transparent and investment-friendly environment, can be an engine for progress and prosperity.
 
Third, and most important for this conference, Algeria has undertaken an ambitious multi-year program to modernize its infrastructure -- its highways, its railroads, its ports, its airports, its dams, its urban transport, its electricity and water systems, and its housing pool, where 2.8 million new housing units are required.  So it is an exciting time to be here.  The commercial and investment opportunities are great and -- I am happy to say -- U.S.-Algerian economic ties are stronger than ever.  Just in the two plus years I have been serving in Algeria as Ambassador, the change has been remarkable.  In 2004 the United States became Algeria's largest trading partner, with over $8.5 billion in two-way trade.  Trade statistics through November suggest we will maintain our role as Algeria's principal trading partner in 2005 by an even larger margin.  To be sure, U.S. hydrocarbon imports account for most of this trade.  But U.S. exports to Algeria roughly doubled last year to over $1 billion, and are expected to be even higher this year.  And with Algeria's pending accession to the World Trade Organization, non-hydrocarbon trade can be expected to grow even more in coming years. 
 
Fourth, experience shows that with increased trade come new ideas, innovation, increased investment, jobs, and greater prosperity.  It's notable, for example, that each year many of the first-time participants in our trade fair pavilion have come not just to sell but to learn the Algerian market with a view to future investment.  High tech ventures now underway, the newly announced investment in housing construction, and U.S. investment in grain mills that will process over 1,600 tons of wheat a day demonstrate the growing interest of U.S. firms outside the hydrocarbon sector.  So do other business ventures and investments by firms such as Porteks, FedEx, Ionics, Metrica, RIA Financial, Motorola, Africair, Tempurpedic, Active Power, and Northrup Grummon's Algeria Industrial Development Group, to name a few.  While most of these non-hydrocarbon investment steps are modest -- which is logical for new entrants in a new market -- it is a beginning.  There are also some much larger investment projects that are under active consideration, and we can expect this partnership between our countries to expand as Algeria opens up its economy, transforms its banking system from an obstacle to an engine for growth, and prepares a legal environment for the arrival of American franchises.  To state what should be obvious, what is important about foreign investment is not the amount of capital that is brought into the country, but its ability to mobilize domestic capital, create jobs, and transfer know-how and management skills.  
 
The Open Skies agreement we hope to conclude in the near future is another example of the potential for expanded U.S.-Algerian economic ties.  While the establishment of direct flgihts between our countries will be determined by market forces, both of our governments are working to create the legal framework that will make direct flights possible.  The Science and Technology Cooperation Framework Agreement that our two countries will sign in coming weeks is yet another sign of our expanding cooperation and future possibilities.  And so is our granting Algeria preferential trade treatment under our Generalized System of Preferences -- a program designed to promote non-hydrocarbon exports from developing countries to the United States.
 
Finally, Algerians themselves will have to decide how best to proceed in what Tom Friedman, a leading U.S. thinker, calls our flattening world.  The flattened, technologically connected world we live in today is a world where technology is leveling the playing field, putting a premium on education, empowering individuals and countries, blurring the national identities of economic actors, and radically reshaping the global economy and the way we all do business.  The question is not whether these global trends are good or bad.  They are real and they pose significant challenges.  Not only for developing economies like Algeria but also for advanced economies like the United States and Europe.  And so the only question that really matters is whether and how countries prepare themselves and their citizens to respond to these new challenges posed by this new global environment.   It is a question of adapting or falling behind.   
 
In the case of Algeria, it's pretty clear that assuring a better life for the Algerian people requires moving as quickly as possible to carry out the government's program of economic reform.  It means moving forward on privatization.  It means creating a more transparent business and legal environment that will bring foreign investment and innovative technologies to Algeria.  It means ensuring no further time is lost in modernizing the banking system, perhaps Algeria's single highest economic priority.  It means ensuring that small enterprises, especially those in the export sector, have ready access to credit in order to grow their businesses.   It means taking the difficult but necessary decisions that will enable Algeria to fully embrace international trade norms and join the World Trade Organization.  It means resisting the dangerous temptation to think that reform is not so urgent because oil revenues are high.  It means wisely investing in your youth and in education like Ireland did.  In the course of just one generation, Ireland transformed its economy from one of the poorest to one of the wealthiest in Europe.   And it means explaining clearly to the Algerian people why these steps are necessary and why building a more prosperous Algeria and more prosperous lives for all Algerians will require a commitment to hard work, not simply reliance on the state.

In closing, I want to thank the American firms with us today for coming and to wish you well as you pursue the significant trade and investment opportunities that Algeria offers.  Algeria is an important country, the United States has an increasingly important relationship with it, and it is in our interest that Algeria succeed.  Your contributions to Algeria's modernization process contribute directly to this goal, to strengthened friendship between our two countries, and to increased economic opportunity for all.  Thank you.