August 19, 2009
Algeria Woos Tourism Investment.... I can only await the successes.
I do so love the Algeria government, it's magnificent incoherence. After bizarrely and abruptly banning consumer credit, now we come out with a tax advantage for investment in tourism (what tourism - I exclude overseas returnees from Tourism proper, they don't generally use much in the way of proper tourism facilities: Algeria woos investors to unlock tourism potential
Where to start on the fabulous, magnificent fuzzy thinking?
Algeria announced on Monday it was slashing taxes on tourism projects to persuade investors that the country, emerging from years of violence, could become a hot new holiday destination.
Indeed. Hot new holiday destination. Sunny & Bomby Algeria. Experience the thrills of Old American West Ambushes on your convoy. Possible extended side visits to the Sahara for brief 'kidnapping' interludes with jocular desert tribes....
Algeria has thousands of kilometers (miles) of Mediterranean coastline a short flight from Europe and vast tracts of Saharan desert wilderness -- yet only a trickle of foreign tourists.
Yes, that would because of the charming ambushes, kidnapping and bombings, which have been on the uptick of late.
Attacks by Islamist militants, though dramatically reduced in the past few years, have kept many visitors away, along with a lack of investment that has left oil-producing Algeria with a shortage of high-quality restaurants, resorts and hotels.Hmmm dramatically reduced as compared to the civil war, but on the uptick in fact. On the other hand, investment in business facilities (which carry over in part to higher end tourism) is sorely needed. Indeed, most likely benefit in this waste of the Algerian Treasury's revenue thinking is that people like me will have a choice of more than two hotels at stunningly expensive prices. Maybe the monolithic El Aurassi might be a face lift, would be quaint if they had chairs from the 1990s at least (on the other hand the fabulous late 1960s / early 1970s relic sky bar must be kept intact, it's a genuine museum piece).
Tourism and Environment Minister Cherif Rahmani unveiled reforms that included tax cuts for tourist firms, low-interest bank loans for tourism investments, reduced customs tariffs, subsidised land and streamlined bureaucratic procedures. ..... [to be unfair chopped out some actually entirely reasonable comments by Tourism Minister on investing for the future]
Despite increases in tourist numbers in the past few years, Algeria lags far behind neighboring Tunisia and Morocco.
Eight million people visited Morocco in 2008, while Tunisia recorded 7 million tourists. The two countries have attracted millions of dollars in foreign tourism investment, much of it from Europe and the Gulf states.
Algerian government figures show that in 2006, the latest year for which data was available, there were 1.64 million tourists. Only 29 percent were foreigners, while the rest were Algerian emigres visiting relatives. [NDLR: I would lay good money on a substantial percentage of those "foreigners" actually being of Algerian origin or foreigners with family ties to Algerians]
Algeria's government is keen to diversify its economy away from oil and gas, which accounts for 97 percent of its exports. It also wants to create jobs -- 7 out of 10 people under the age of 30 are unemployed.
The economy is heavily regulated by the state and has seen only modest investment outside the energy sector.
Some investors questioned the government's commitment to encouraging private investment after it capped foreign stakes in Algerian firms and this month banned banks from issuing consumer loans.
Therein lies the rub, the Government talks about upping non-hydrocarbons sector investment, but has absolutely no understanding of the issues it (the non-hydrocarbons sector or the Gov for that matter) faces. It lurches from one incoherent policy (which too often is isolated and doesn't take into account a web of other tied effects that need to be addressed) to another with neither a genuine strategic vision, nor a depth of understanding of what the economy needs (notably massive privatisation and the state to stop playing command economy via really poorly conceived and thought through regulation).
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Why are they trying to compete with Morocco and Tunisia for European sex tourists? How pathetic. They should be investing in making the educational system conducive to...education. Then they would have the basis for real development. Tourism is not industry, all you need to do is look at the average Moroccan or Egyptian tour guide and you'll see this about the same as putting somebody back up in the trees. No country that depended tourism on anything became an industrialized country. Algeria should be building factories for cars, textiles, microchips, tanks, airplanes, not trying to convince Eurotrash to get sunburned. Even Pakistianis can make their own weapons, why not Algerians? Pouvoir does nothing for Algeria, only for itself and the worst outsiders.
Posted by: Djazairi at August 19, 2009 07:09 PM
Intriguing if stupid stereotypes you have of tourism.
Tourism is in fact an industry, or an economic sector if you are hung up on a primitive understanding of the word industry. And rather clearly not something primarily dependant on "Sex Tourism" (which is an absurd stereotype to apply to most tourists, insofar as there are vastly more attractive destinations for the "sex tourist" than either Morocco or Tunisia).
Of course, posing the question as a binary choice, tourism or X is stupid in itself.
As for your Sovietesque style obsession with heavy industry, Algeria is not capable of doing such on an economic basis. Why the bloody hell you want to waste capital on building weapons - other than your Soviet mentality - escapes me, but that aside, until the economy is reformed to render it more competitive (and address the Dutch Disease syndrome that Algeria suffers from independent of pure bad Sovietesque economic policy), no industry is going to work.
Cars: not until your ports are modernized and privatized, and in addition, the financial sector is privatized such the feeder firms in the private sector can operate. That includes doing away with the 70s style capital exchange controls for investors.
Textiles: Algeria is not going to win in this area, too many countries do it better. Morocco and Tunisia are just working to avoid getting hammered by Asia.
Planes: as autos.
Microchips: Kha. Asia has that market, waste of time and energy to try to beat it.
What Algeria should be doing is reforming to enable private enterprise.
Posted by: The Lounsbury at August 24, 2009 08:37 AM