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Eureka: 10 ways to fix the Algerian economy Eureka: 10 ways to fix the Algerian economy
by Akli Hadid
2018-04-10 06:04:01
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There have been calls to fix Algeria's receding economy. Algeria is Africa's wealthiest nation, but growth has slowed considerably over the last few years because of declining oil and gas prices, on which the country relies heavily. Here are 10 areas where the country needs improvement, so it can get its economy back on track again.

alger0001_4001 - Banking reform

Algeria is one of the rare countries where you need more than valid ID to open a bank account. You also need proof of residence and employment. This means a lot of money that could be in banks and could be invested is actually in a box somewhere under people's pillows. Because the banking system is slow, bureaucratic, restrictive and overbearing (you need to justify why you withdraw money, where the money you put in comes from) a lot of times people buy everything with cash. Cars with cash, housing with cash, rent with cash.

Because the banking system is so slow and a thing of the past, many who would otherwise start businesses don't.

Solution: more banks, make it easy to open a bank account, don't be too invasive about where people got their money from and how they want to spend it.

2 - Real estate – corporate

You want to start a business. First thing you need is a bank account. Second thing you need is a place for your corporation. Many corporations operate factories or offices from places which used to be residential homes, and there are no plans to build corporate buildings. There are plans for industrial zones, but one wonders where the offices will be.

Solution: Invest in corporate real estate, work with city councils to reserve zones to corporate real estate.

3 - Real estate – residential

You want to start a business. You now need a place to live. Rental property exists, but is very expensive in the big cities and safe areas are also the more expensive areas. Plus it's going to be very hard to find a place to live near your workplace.

Solution: encourage people to move to smaller cities.

4 - Human resources

Human resources is a buzzword. Trained human resources is a buzzword. Algeria's problem is there are a lot of people with degrees, but very few people with long years of work experience. This is due to several factors. Workplace environments tend to be abusive, many employees at corporations don't feel the need to help the corporation move forward, communication lacks between employees and turnover rates tend to be incredibly high. This means few employees have the kind of work experience it takes to perfect skills, craft or to have the kind of business common sense you need when you work at a company.

Solution: punish companies with high turnover rates. If too many employees are leaving, there's something wrong with the corporation. Or encourage websites like “glassdoor.com”

5 - Communication

So now that you have your business, you want advice and consultation on how to move your business forward. Legal advice, advice on where to find the best human resources, advice on logistics and transportation, taxation advice. Those are very hard to find. Not to mention cultural advice, which tends to be off limits for both local and foreign businesses.

Solution: encourage a free flow of business communication. Encourage Algerians to discuss business rather than politics and football.

6 - Advertising and reaching customers

Advertising is another buzzword. You need to communicate your product with a tribe of loyal consumers. Social media exists, but other than that only one website called ouedkniss.com is really a place where people meet online. Plus a lot of people tend to get confused, but advertising in Arabic is a lot more effective than advertising in French because Arabic media has way more readership than French language media. A lot of people think it's the other way around.

Solution: create more advertising spaces where producers and consumers find each other.

7 - The media

Ideally people will review your product in the press and in Internet forums. “Politician politics' is a national pastime, where people keep speculating about which public politicians hail from the almighty Intelligence services and news about the executive branch resembles celebrity big brother. As for product reviews, no one's really passionate about that. The bloggosphere is also dedicated to politicians and their relations with the Intelligence services and to army generals and their eating habits, not to product reviews.

Solution: encourage the creation and consumption of economic and business-related media

8 - Transportation

Traffic, bumpy roads, lack of highways and freeways. Getting your product to retailers won't be an easy ride.

9 - Paperwork

Starting a business is an incredibly complex venture where you need to hand in a lot of papers, which don't always match the reality on the ground. For security measures for example, it's going to be hard to find the kind of real estate that matches legal security measures.

Solution: adapt paperwork to the reality on the ground.

10 - Rule of law

The legal system is complicated. The good thing is mediation and arbitration tends to be the norm and most conflicts are solved “amicably.” But a lot of people are breaking the law, sometimes without knowing it.


      
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