President Tebboune bans Algerian companies from dealing with Moroccan peers

Algeria’s president Tebboune ordered the government as well as public and private companies to refrain from doing business with what he called “foreign entities”, targeting in particular Moroccan operators.

Blinded by hostility to everything Moroccan, Algeria’s new ailing president Tebboune is desperately seeking to distract the Algerian people from the worsening economic and social crisis by attempting in vain to pin the crisis on Morocco and other foreign entities which he did not name.

The President singled out Moroccan operators to blame two Algerian insurance groups SAA and CAAR for signing deals with Moroccan counterparts.

Such contracts were conducted without prior approval of the Presidency, Tebboune said in his Presidential decree which amounts to extreme protectionism and ignorance of free market fundamentals.

Algeria, a closed state-controlled and heavily subsidized economy, has yet to join the World Trade Organization and maintains a protectionist policy that further undermines the competitiveness of Algerian operators.

Economists say that the protectionist and hostile moves of the Algerian president will backfire at the Algerian economy on the short term.

Tebboune ordered the companies that contracts with Moroccan companies and other unnamed “hostile” entities should be terminated within 10 days in order to halt the depletion of hard currency.

But such anti-Moroccan rhetoric sugar coated in unfounded economic arguments are drawing mockery to a corrupt regime that squandered Algeria’s earth and put it on verge of bankruptcy.

Conspiracy theories are not fooling protesters in Algeria where the regime threatened to deploy the army to quell any peaceful marches.

It is the lack of vision and failed policies as well as endemic corruption that will bring Algeria to its knees. The country, where oil and gas represent 95% of the country’s exports, refuses to pull its head from the sand as its President and cabinet continue to act as if oil prices are still above $100.

The North African country has seen its foreign exchange reserve drop from $193 billion in 2014 to less than $40 billion by the end of 2020. The country also braces for a widening budget deficit estimated at $22 billion this year.

Algeria would need at least a barrel price of $160 to balance a budget burdened by subsidies. For a population that has been used for decades to state largess with a very weak private sector and low diversification, any austerity measure could be faced with fierce street opposition.

Yet, Algeria rejects foreign debt. Instead, the country indulges in helicopter money or cash printing further worsening inflation and undermining the value of the dinar and along with it the already weak purchasing power of its citizens.

To hold off an inevitable collapse, the Algerian government adopted a protective trade policy preventing imports of vital food stuff. The result was long queues in front of stores in scenes that can only be seen in war-torn countries.

Cooking oil, milk and even some medicine are in high shortage in the country where the government opts for cosmetic measures to prevent the few remaining hard currency from leaving the country.

While cash printing may delay an impending finance collapse of the state, it has no value when it comes to financing imports. Hence the drastic measures such as the ban on car imports and raising customs duties on other goods.

The combustible mix is piling for Algeria where anaemic growth, youth unemployment, dependence on oil and gas, corruption, underdeveloped banking system and the unfriendly investment climate are combined with the impact of the pandemic.

  1. Assalamou Alaykoum from Morocco to all our brothers and sisters in Algeria,

    You may already know this, but your daily life issues and economic crisis are not the result of the Moroccan government, on the contrary, so instead of focusing on real issues in your country your leaders (may Allah guide them in the right path) are the ones that creating this unbearable situation between our two beloved countries, trough their bad governance and lack of knowledge in their foreign policy that needs to be challenged and possibly improved in order to to lift this burden which weighs heavy on the shoulders of the people which broke their back and which has only lasted too long.
    Your actual leaders are blinded by misplaced arrogance and are aware of this however, they don’t want to admit that the country’s interests are far greater than their youthful whims, in other words when it comes to the interests of your nation, your leaders do not want to grow and thus act in a more responsible and mature way for the development of your country and consequently the improvement of the living conditions of the Algerians.
    it is therefore them that should be blamed because Morocco had always extended its hand to open the borders and build relations between the two countries for their success and mutual development.

    Reply
  2. Good, their dates taste like shit.

    Reply

Leave a Reply

Your email address will not be published.

three × 2 =

WP2Social Auto Publish Powered By : XYZScripts.com