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RUEHFR/AMEMBASSY PARIS 2545
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UNCLAS ALGIERS 000157 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON PREL AG MO TS
SUBJECT: ALGERIAN BUSINESS GROUP LOBBYING FOR MAGHREB 
INTEGRATION 
 
¶1.  (SBU)  Summary: The often outspoken head of a prominent 
Algerian business association told Ambassador January 13 that 
together with other North African business leaders he is 
lobbying for the Maghreb governments to take steps promptly 
to enable Maghreb economic integration.  The business leaders 
developed an action plan last November that includes a public 
awareness campaign about the benefits of a Maghreb-wide 
market as well as the establishment of a business information 
center for Maghreb businesses and perhaps even of a 
private/public Maghreb bank to help finance projects.  The 
businessman noted that the Algerian government is moving 
forward on bilateral trade liberalization agreements with 
Tunisia, Mauritania and Libya but not Morocco because of 
political sensitivities.  He and his business association 
think this is a mistake.  He welcomed our help with a public 
awareness campaign highlighting the benefits of an integrated 
market in the Maghreb, perhaps by sharing the experience of 
NAFTA.  End Summary. 
 
¶2.  (SBU)  Boualem M'rakach, the President of the Algerian 
Business Owners Association (in French, CAP) told us that a 
group of business associations is trying to lobby the five 
Maghreb governments to dismantle barriers and enable economic 
integration.  M'rakach said the CAP has agreed on an action 
plan with Hedi Djilani of the Tunisian Industry, Trade and 
Crafts Union (in French, UTICA), El Alami Moulay Hafid of the 
General Confederation of Moroccan Businesses (CGEM), Shaban 
Ibrahim alMuntaser of the Libyan Businessmen's Council (CPL) 
and Mohamed Ould Bettah of the Mauritanian National Business 
Owners Confederation (CNPM).  These five business 
associations have joined into a multinational association 
called the Maghreb Employers Union that is to establish an 
office in Algiers, M'rakach said.  The first president of the 
Maghreb Employers Union (UME) is to be Hedi Djilani. 
 
¶3.  (SBU)  M'rakach said the UME leaders last met in Tunis 
November 28-29 and focused their discussions on how to 
attract more foreign investment.  (He asserted that the 
Moroccan delegation was disappointed at the scale of direct 
foreign investment into Morocco, but he said the Algerian 
team bemoaned the dearth of foreign investment in Algeria.) 
The business leaders are quietly lobbying for a new Maghreb 
bank to be established, but M'Rakach said the Algerian 
Finance Minister is not, so far, sympathetic.  The UME 
leaders also agreed to organize a fund to finance feasibility 
studies. 
 
¶4.  (SBU)  In a communique issued at the end of the November 
28-29 meetings, the five associations together as the UME 
called for the five governments to take steps such as the 
following to promote private investment and enable regional 
economic integration: 
 
--  reducing red tape in establishing businesses and 
setting up a one-stop shop for Maghreb investors' projects; 
--  introducing new technologies for the preparation of 
administrative paperwork; 
--  removing all barriers to capital flows within the 
Arab Maghreb Union; 
--  ensuring business laws in the five countries are 
compatible; 
--  simplifying tax codes; 
--  improving the laws governing the labor markets; 
--  establishing a Maghreb business arbitration center; 
--  establishing industrial zones along borders. 
 
¶5.  (SBU)  M'Rakach noted that January 13-14 a Tunisian 
delegation had visited Algiers to promote a bilateral 
economic agreement that would reduce barriers to goods and 
investment flows.  Algeria, he observed, already had similar 
agreements with Mauritania and Libya.  Ambassador asked how, 
if the politics were ever right, Algeria would go from a 
series of bilateral agreements to a broader 
regional deal.  M'Rakach said the only real challenge was the 
Algeria-Morocco relationship, but even there both Algerian 
and Moroccan businessmen wanted trade and investment barriers 
to come down.  Moroccan banks and insurance companies, he 
claimed, want to invest in Algeria.  (Comment:  the Moroccan 
ambassador told Ambassador in early December that a 
delegation of Moroccan bankers had visited in Algeria and 
were looking at establishing small bank offices here.  End 
Comment.)  M'Rakach quickly admitted that the Western Sahara 
dispute is a huge impediment between Morocco and Algeria.  In 
the end, he concluded, the two countries should learn to 
 
develop business relations and isolate the Western Sahara 
dispute from commercial relations.  He was strongly in favor 
of opening the border. 
 
¶6.  (SBU)  M'Rakach said the five associations met with 
Murilo Portugal, Deputy Managing Director of the IMF, during 
their November 28-29 meetings in Tunisia.  M'Rakach said the 
Maghreb Employers Union hopes to secure some financial help 
from the IMF for its plans to promote investment in the 
Maghreb and establish at least one Maghreb-wide business 
center.  Ambassador noted that this seemed well outside the 
normal IMF role of balance of payments support.  Ambassador 
observed that the kinds of microeconomic reforms the UME had 
in mind seemed closer to the kind of issues the World Bank 
addresses.  M'Rakach acknowledged that the UME had had no 
contacts with the World Bank.  (Comment:  As we reported 
reftel, the IBRD withdrew its resrep late in 2007.  We'll 
link up M'Rakach with the IFC representative here at least. 
End Comment.)  M'Rakach noted that the UME hopes to develop a 
more detailed set of recommendations to present to the 
Maghreb ministers and central bank governors gathering for 
the spring 2008 IMF/IBRD meeting. 
 
¶7.  (SBU)  M'Rakach showed Ambassador the approved action 
plan that also includes organizing a forum to tout the 
benefits of Maghreb regional integration and bring together 
businessmen to talk about investment projects.  M'Rakach said 
it was essential in Algeria to highlight the economic 
benefits of regional integration to move government officials 
who are more focused on the Western Sahara dispute.  He said 
presentations by experts who could talk about the NAFTA or EU 
experiences of regional economic integration would be very 
helpful in highlighting the benefits and changing the lexicon 
of Maghreb integration from political disputes to business 
and investment.  (There is no time planned for such a 
conference but he would like to see it organized in 2008.) 
 
¶8.  (SBU)  COMMENT:  M'Rakach is one of the more outspoken 
business association leaders in Algiers.  Under his 
direction, the CAP published a detailed assessment of the 
2007 Algerian government budget which included criticisms of 
some government policies.  M'Rakach has been particularly 
critical of GoA policies to bail out flailing state-owned 
enterprises.  He clearly views lobbying for change to be one 
of his Algerian association's main functions, and he thinks 
the UME can and should do the same.  The Algerian Prime 
Minister met the UME leaders in September 2007, but M'Rakach 
said there is still very far 
to go in convincing the Algerian authorities to move forward 
in practical ways on regional integration.  Finding ways to 
help associations lobby for prompt steps towards building a 
Maghreb-wide market would help our own long-term interest in 
Maghreb economic growth and stability. 
 
 
FORD