Amid Crisis, Algeria Considers Moroccan Development Policies

Casablanca – Algeria is taking inspiration from its western neighbor’s success as it is introducing a new economic model that closely mirrors Morocco’s.

Algiers’ decades-long insistence on its independent post-revolutionary economic model appears to be coming to an end as Algeria’s regime is aiming to copy Morocco’s successful economic model.

Algeria has presented its new investment plan, which appears to closely mirror Morocco’s approach. Moroccan media presented Algeria’s new plan as an “imitation” of Morocco’s recent economic policies.

Algeria’s New Investment Charter, which Abdelmadjid Tebboune advocated for, is a “pale imitation” of Morocco’s efforts to award the country a new business charter, according to Moroccan news outlet Le360.

Less than a week after the inter-ministerial meeting devoted to the new investment charter, the Algerian government announced a similar meeting to review its new draft investment law that would see Algiers adopt the economic policies that have driven economic success in Rabat.

The debate over Morocco’s pro-Western investment-oriented neoliberal approach and Algeria’s 1960s-style state-run economy appears to have concluded with a remarkable policy shift in Algiers.

“Abdelmadjid Tebboune, Supreme Commander of the Armed Forces and Minister of National Defense, will chair a special meeting of the Council of Ministers on Thursday [May 19] dealing with the study and discussion of the new investment bill,” noted a post from the Algerian president’s Twitter account.

The Algerian new investment law, which looks to be similar to Morocco’s New Development Model, borrows the essence of the new Moroccan investment charter’s principles, procedures, and ideas.

The incentive structure is nearly identical: a “regime of sectors,” a “regime of zones,” and a “regime of strategic investments,” which is reminiscent of the Moroccan strategic device.

Morocco wins economic debate in the Maghreb

Algeria and Morocco have long had very different economic policies. Each country relies on diverse processes to get to where they are now.

Morocco’s economy is characterized by a high degree of openness to the outside world. It has pursued an economic and financial openness strategy since the early 1980s, with the goal of promoting foreign trade liberalization and greatest integration.

The country’s strategy was and continues to integrate the Moroccan economy more deeply into the world economy, and strengthen its contribution to the formation of a multilateral trading system.

Morocco simplified foreign trade procedures, reduced tariff protection, eliminated non-tariff measures, improved the business and investment environment, expanded and diversified economic and trade relations, and finally, made regular contributions to the multilateral trading system.

On the other hand, Algeria’s economy is driven by its petroleum and natural gas export sector, commodities that, despite variations in global prices, produce nearly one-third of the country’s gross domestic product each year (GDP).

In the first two decades after independence, the Algerian government implemented a centrally planned economy inside a state-run socialist framework, nationalizing important businesses and enacting multi-year economic plans.

Thus, Algeria went on to become a socialist, centrally planned economy run by a single political party, the National Liberation Front.

Algeria’s socialist economy is a part of its revolutionary identity. Its regime has long depended on subsidies and state grants to appease a restless population.

But now, Algeria is abandoning its long-held position to try to imitate the success of Morocco, namely by replicating the development tactics Rabat had been implementing for a long time.

Algiers looks to Rabat for economic guidance

Copying Morocco’s development policies is a proud moment for Moroccan economic policymakers since it is a testimony to Morocco’s unmistakable achievement in the economic sector.

From a different perspective, a noted similarity in the two countries’ economic outlooks and development projections can make them more economically aligned, which in turn could be a small but significant step toward tighter diplomatic relations.

But the main question is whether Algeria will adopt its act or continue to be dismissive and refuse as usual to credit Moroccan success with its newly adopted development policies.

Even if Algeria denies its use of Morocco’s development strategies, this will be a risky strategy for Algeria’s elite.

If the country is to succeed in implementing the Moroccan development plan, which is unlikely, Algerians may perceive it as a Moroccan success. And if it fails, the regime could be accused of betraying its ideological economic principles.

With this in mind, it is highly likely that Morocco’s economic policies may assist in alleviating Algeria’s dire crises, and that Algeria could become one of the nations that have learned from and followed Morocco’s successful economic and diplomatic tactics.

If anything, replicating Morocco’s growth strategies is proof of the Algerian government’s admiration of Morocco’s successes over the past two decades. As the Chinese proverb says, “imitation is the greatest form of flattery.”