“Algeria is still important strategic partnernot only in the economic and commercial sphere, but also in the sphere of security, defense and home affairs.” That’s how convincing the economic report on Algeria prepared by the Spanish Economic and Trade Office in Algiers is. Even after last year the country activated a number of restrictions that caused millions in losses to Spanish companies whose main or even the only market is Algeria.

Spain buys Algeria energy productsespecially gas and hydrocarbons. Our country exports paper, ceramic materials and agri-food products. For this reason, the trade balance has always been on the side of Algeria, and even more so after the rise in energy prices. According to the UN, in 2021 Spain was the second buyer of Algeria after Italy.with which the North African country has agreements on energy issues.

But in 2022, Spain’s shifting stance on the Sahara led to a diplomatic crisis with Algeria that has yet to be resolved. Prime Minister Pedro Sanchez in a letter to King Mohammed VI of Morocco expressed his support for the autonomy of Western Sahara. and after that, Algeria suspended the Neighborhood Treaty and facilitated the blockade of foreign trade operations in Spain.

Since then, Spanish exports began to plummet. In May, Spain exported goods worth 197.3 million euros to Algeria. In June, overseas sales fell to 66.6 million euros. and in the last month of the year, exports were below 11 million euros. The falls are almost 95%, according to the Secretary of Commerce.

President of the Algerian-Spanish Circle of Commerce and Industry (CCIAE), Djamel Eddin Bouabdella, sums up the conflict as a “political issue”. And this is what Abdelmajid Tebboune, President of Algeria, believes that The source of the conflict is the executive branch of Pedro Sanchez.. For this reason, the President of the CCIAE believes that “Algeria does not want to unblock the situation, they believe that the ball is in the Spanish side. The strategy at the moment is to wait for the next election.

“Algeria doesn’t want to unblock the situation, they think the ball is in the Spanish side”

The desire to resolve differences between Spain and Algeria exists not only on the Spanish borders, but also the solution is also supported in the European Union. This week, the High Representative of the Union for Foreign Affairs and Security Policy, Josep Borrell, called for “a solution to the current restrictions.” I mean, for example, the obstacles introduced since June 2022 for trade with Spain that need to be removed. I am also thinking about the restrictions on European investment in Algeria, which have a direct impact on the application of our Association Agreement. Finding a solution to all this is in our common interest.”

Companies affected

As the newspaper reported, more than 20 Spanish companies have begun the process of filing a property claim against the state for the consequences of a change in position on the Sahara. loss for them more than 800 million euros. “Companies have high hopes that this problem will be solved, we are making an effort,” emphasizes Bouabdella.

One of the risks is that the clients of these companies are looking for opportunities in other markets not banned by Algeria. Italy and Portugal are rivals of Spain. However, Bouabdella believes that trade relations between Spain and Algeria have “advantages” in terms of price and transport, which he hopes can be restored at some point. “There would be many sectors in Algeria with investment potential if there were adequate conditions for investment,” admits the Trade Authority in the country’s economic report.

Morocco, reverse side of the coin

While exports to Algeria continue to fall, Spain has chosen its preferred partner: Morocco. During Sanchez’s visit to Rabat, during which about twenty bilateral agreements were signed, the financial protocol 800 million euros, to encourage investment in strategic sectors such as tourism, railways or water management. In addition, Cofides and Ithmar, Morocco’s sovereign wealth fund, have begun looking for joint investment opportunities.

In contrast to the decline in exports to Algeria, foreign sales in Morocco up 23.68% in 2022, up to 11,748 million euros. In 2021, goods worth $9.499 million were exported.

“We went through years of lead, with terrible relations with the administration, with obstacles and delays, and this was immediately corrected,” he explains. Aldo Olchese, Spanish businessman with business in Morocco. Olchese points out that The business fabric of Morocco is much better than that of Algeria. and in addition, the country is a “platform to reach other African countries”.

For this reason, he believes that “Morocco is a better option for Spain than Algeria” and points to the energy opportunities of the coming years. The businessman believes that the North African country “will become center energy with the support of Spain and the European Union”. At all, He does not believe that he will become a “competitor” for our countryin terms of renewable energy production, but “ally.”