Best bet for U.S. firms is to promote our technology - Algeria

Best Bet for U.S. Firms Is To Promote Our Technology U.S. exports to Algeria grew slightly in 1986, despite a lack of growth in Algerian spending for imported goods. However, the budget, with its emphasis on existing investment and the employment of Algerian resources, does not augur well for traditional U.S. sales to Algeria in the near term outside of the agricultural area. The challenge will be to find creative new ways over the next few years of promoting U.S. technology.

The fall in oil prices brought a 41 percent drop in overall government revenues in 1986. Algeria remains highly dependent on its hydrocarbon sector, which provides virtually all of its foreign exchange earnings.

The 1987 budget, which projects a deficit of $2.6 billion, calls for real austerity. Imports are expected to drop 35 percent below their 1985 level (about equal to the 1986 level), and "non-priority" imports will stop. Education and health receive the largest budget increases, with most other ministries remaining close to their 1986 levels. The investment budget will remain at its reduced 1986 level, with priority being given to completing projects already under way, to better integrating and maintaining the production system, and to satisfying the population's basic needs.

Following a period of refusing to permit letters of credit to pay for imports, the Algerian government appears to be authorizing their use on a limited basis. Requests for delays in payment, however, continue to pose problems for foreign suppliers. Companies appear willing to entertain these extended payment terms, because they are on a protected payment basis, and the costs can be added to the original invoice.

The Commerce Department is continuing its tradition of mounting a biennial U.S. Pavilion at the annual Algiers International Fair, which will be held June 17-28. The fair is the major trade event of the year in Algeria and attracts large numbers of officials, managers, and buyers. Firms interested in participating should contact Len Heimowitz at (202) 377-0558 for further details. Trade missions planned will feature medical equipment (June 1987), refrigeration/air conditioning equipment (October 1987), and operations management/maintenance services (January 1988).

For further information about trade prospects, contact the Algerian desk officer at (202) 377-4652.

COPYRIGHT 1987 U.S. Government Printing Office
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