Potential for increased trade: OBG talks to Shigeo Matsutomi, Director-General, Middle Eastern and African Affairs Bureau, Japanese Ministry of Foreign Affairs

The Report: Algeria 2012 – Country Profile

What can be done to increase trade and investment between Japan and Algeria?

MATSUTOMI: Japan exported $107bn to Algeria in 2011, which is about one-and-a-half times greater than in 2006. On the other hand, the amount of Chinese exports tripled in 2011 to $474bn from $171bn in 2006, while Korean exports quadrupled to $162bn from $45bn in 2006. There is potential for Japan to expand exports further because the main components of Algerian exports are limited to liquefied natural gas and oil. I believe the diversification of goods is key to expanding Algerian exports to Japan. We will make an effort to heighten Japanese companies’ interest in Algeria and the diversification in traded goods through exchanges between the two countries.

In which sectors do you see the greatest potential for increased bilateral capital flows?

MATSUTOMI: Algeria’s large market, boasting 36m people, has the potential to raise the volume of direct investment by Japanese companies greatly. Furthermore, Japan is interested in the Maghreb’s regional integration and diversification. From this standpoint, we believe we can invest in projects in fields other than energy or infrastructure. However, negotiations over an agreement on the promotion and protection of investment between Japan and Algeria have been stalled since they started in November 2011. For Algeria, there is room for further measures, such as improving predictability to expand inward investment. Additionally, both sides need to accelerate efforts for an early conclusion of the negotiations over the agreement.

What sort of scope do you see for increased and improved links in the fields of renewable energy and environmental sustainability?

MATSUTOMI: Because the Maghreb is suitable for utilising solar power both in terms of geography and climate, Japanese companies are interested in solar projects in regional countries, and we recognise that it is essential to construct cooperative relationships with each of them. Japan has already worked on solar power projects with Tunisia and Morocco, and we hope to broaden such partnerships and strengthen links between the academic and private sectors.

How can democratisation and socioeconomic development be supported in the Maghreb?

MATSUTOMI: For the success of democratisation, economic, social and political reforms are as essential as wheels on a cart, and there is a long way to go before such reforms are complete. Japan will support the efforts of countries in the Middle East and North Africa (MENA) region to reform by working in close partnership with our private sector, based on the experience of contribution to economic growth and stability in Asia. Japan will assist those countries with a focus on fair political and administrative processes and governance, human resource development and job creation/fostering industries, including through the G8 Deauville Partnership established in May 2012. In addition, we will continue efforts to advance economic relationships and mutual understanding with MENA countries. In line with this policy, Japan dispatched an election monitoring team to Tunisia, extended an additional yen loan worth approximately $1bn, and provided approximately $80m to MENA countries through UN organisations to projects aimed at supporting youth employment and democratisation. Similarly, the Fourth Tokyo International Conference on African Development (TICAD IV) Ministerial Follow-up Meeting was held to review progress made on implementing the Yokohama Action Plan (YAP) in 2011 and to commence discussions on TICAD V. The meeting encouraged TICAD partners to accelerate efforts to achieve the remaining targets of the YAP by June 2013. The gathering also provided impetus to reprioritise and mobilise resources to ensure that the Millennium Development Goals (MGD) are realised in Africa by 2015. Suggestions regarding a post-MDG agenda were also put forward.

Countries: Algeria and Japan
Topics: Getting Started
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