72522 v1 World Trade Indicators 2009/10 Algeria Trade Brief Trade Policy several restrictive measures on foreign investment (such as restricting foreign ownership to 49 percent, Algeria started 2008 having made progress in and increasing regulation on initial establishment, and reforming its trade regime towards achieving WTO resale of assets and imported goods), and setbacks in accession. Based on its 12.4 percent MFN Tariff Trade the privatization initiative.3 Restrictive Index (TTRI)1 for 2007 the openness of Algeria’s trade regime is similar to that of an average Middle East and North Africa (MNA) country (11.9 External Environment percent), but more restrictive than that of an average upper-middle-income country (6.9 percent). Similar to Algeria’s exports face a very favorable trading the majority of other countries in the region, Algeria is environment, especially when compared to its region more protective of its agricultural goods (13.8 percent) and income comparators. Algeria’s Market Access than of its non-agricultural ones (12.1 percent). Based TTRI4 (including preferences) of 0.6 percent is below on the TTRI, it ranks 105th out of 125 countries the regional and income group averages of 2.1 and 2.3 (where 1st is least restrictive). The simple average of its percent, respectively. The simple average of the overall MFN applied tariff has been relatively constant in the rest of the world tariff (including preferences) faced by 2000s (an indication that Algeria’s trading regime has the country’s exports is 10.7 percent. When its trade not changed considerably) and in 2008 it was 18.6 flows are taken into consideration, it is apparent that percent. Taking into account preferences does not Algerian exports have very good access to change the simple average of the applied tariff international markets. Algeria mainly exports significantly (18.0 percent). Algeria has a maximum hydrocarbons, which explains the low weighted rest of MFN applied tariff, excluding alcohol and tobacco, of the world tariff (including preferences) of only 0.2 only 30 percent, which is much lower than the regional percent. The Algerian dinar has appreciated by 2.9 average of 387.6 percent. However, the share of tariff percent in real, trade-weighted terms in 2008, making lines with zero MFN is only 1.8 percent, and the share exporters less competitive abroad. However, as oil of tariff lines with duties higher than 15 percent revenues declined, the dinar has been depreciating (international peaks) is 40.3 percent. against the dollar and the euro since October 2008.5 As food prices soared, the Algerian government The last round of negotiations for Algeria’s WTO increased the allowed amount of meat that could be accession ended in January 2008, and as of June 2009, imported in the period between May and August WTO had not scheduled any new meetings since they 2008.2 In the context of the global crisis and the have not received any inputs from the Algerian plummeting of oil prices, there has been significant government.6 Algeria has announced in early 2009 that backsliding of reform since December 2008. These it will be joining the Arab Free Trade Area.7 include additional requirements for imports (such as financing imports only through letters of credit), Behind the Border Constraints Global rankings point to a somewhat weak institutional environment in 2009, with Algeria being Unless otherwise indicated, all data are as of August 2009 ranked 136th in the Ease of Doing Business index, and are drawn from the World Trade Indicators 2009/10 which looks at the business environment in 183 Database. The database, Country Trade Briefs and countries. Additionally, Algeria’s Logistics Trade-at-a-Glance Tables, are available at Performance Index score, which reflects the extent of http://www.worldbank.org/wti. trade facilitation in the country, is slightly above the If using information from this brief, please provide the regional but below the income group average. Algeria following source citation: World Bank. 2010. ―Algeria scores 2.47 on a scale of 1 to 5, with 5 being the Trade Brief.‖ World Trade Indicators 2009/10: Country Trade highest performance, while the regional and income Briefs. Washington, DC: World Bank. Available at group averages are 2.42 and 2.85, respectively. Algeria http://www.worldbank.org/wti. ranked 140th out of 150 countries and 10th in the MNA World Trade Indicators 2009/10 Algeria Trade Brief region. The logistics indicator on which it performed 3. World Bank, Fall 2009, p. 6. the best is domestic logistics costs, while it needs most 4. MA-TTRI calculates the equivalent uniform tariff of improvement in increasing the efficiency and trading partners that would keep their level of imports effectiveness of customs and other border procedures. constant. It is weighted by import values and import demand elasticities of trading partners. 5. World Bank, Fall 2009, p. 5. Trade Outcomes 6. World Bank, Fall 2009, p. 5. Algeria’s trade growth, in real (constant 2000 U.S. 7. TSA, May 19, 2009. dollar) terms, has accelerated in 2008, rising to 8.1 8. World Bank, Fall 2009, p. 2. percent from an average rate of 2.7 percent over the 9. Bank of Algeria, March 2008, p. 10; March 2009, p. 15. 2005–07 period. This was influenced by acceleration in 10. World Bank, Fall 2009, p. 2. the growth rates of both imports (from 5.1 to 12.3 percent) and exports (from 1.0 to 5.0 percent). However, it is expected that both exports and imports References will decline in 2009, with a steeper fall in exports. Bank of Algeria. March 2008. Bulletin Statistique Trimestriel (Quarterly Statistical Bulletin). August 12, 2009. An exporter of oil (hydrocarbons account for around . 98 percent of export revenue since 2003),8 Algeria ———. March 2009. Bulletin Statistique Trimestriel benefited from high oil prices which peaked at (Quarterly Statistical Bulletin). August 12, 2009. US$147 per barrel in July 2008. Its exports, in nominal . U.S. dollars, grew by an estimated 43.2 percent in Economist Intelligence Unit (EIU). 2008. Country Profile: 2008, compared to 2.6 percent the year before. Its Algeria. EIU. import growth has also increased to an estimated 36.3 ———. July 2009. Country Report: Algeria. EIU. percent from an estimated 29.2 percent, resulting in a steep acceleration of trade growth in nominal terms, Food and Agriculture Association of the United Nations from an estimated 10.8 percent in 2007 to an (FAO). 2009. ―Policy Measures Taken by Govern- estimated 40.7 percent in 2008. But, as fuel prices fell ments to Reduce the Impact of Soaring Prices (As of in the second part of 2008, to around US$40 in early 15 December 2008).‖ FAO. June 26, 2009. . of 2008 its exports fell by 26.1 percent on year-on-year TSA. May 19, 2009. ―Zone arabe de libre échange: la basis,9 and the decline continued in 2009 when its CACI défend l’adhésion de l’Algérie (Arabic Free exports fell by 40 percent the first six months Trade Zone: CACI defends Algeria’s accession).‖ compared to the same period in 2008. This decline July 27, 2009. . which fell by 50 percent in the first half of 2009 on World Bank. Spring 2009. ―Algeria Economic Update.‖ year-on-year basis.10 July 27, 2009. World Bank, Washington, DC. . ———. Fall 2009. ―Algeria Economic Update.‖ Notes September 3, 2009. World Bank, Washington, DC. 1. TTRI calculates the equivalent uniform tariff that would keep domestic welfare constant. It is weighted by import shares and import demand elasticity. 2. FAO, 2009.