Doing business ‘Dubai-style’ in Algiers

ALGIERS – There are no tourists, no pop stars, no shopping festivals and no gleaming cars for sale.But in a huddle of dusty side streets in Algeria’s capital Algiers, business at a market dubbed Dubai is booming thanks to the same attractions that launched its glamorous Gulf namesake – affordable prices and a choice of goods.

“You can find anything except your mother and father at the Dubai bazaar,” jokes trader Nouredine, standing on a sidewalk where merchandise spills from cardboard packing cases. Not so long ago, Nouredine and the scores of other budding entrepreneurs at the informal trading centre in the Bab Ezzouar district would have been shooed off the street by police.Until the early 1990s, the North African oil-exporting country had a state-dominated, Soviet-style economy thanks to the dirigiste views of its founding fathers who won independence from France in 1962 after an eight-year war.A pair of jeans, a bottle of Coca Cola or a slab of imported cheese were expensive rarities.Most people wanting basic items such as shoes had to go to a state-run shoe shop.That began to change when Algeria, a member of Opec, lifted a ban on private-sector foreign trade in 1991.The authorities also began turning a blind eye to street traders who took advantage of the reform to ship in goods on the black market for sale on street corners.Now that the conflict has wound down, private enterprise is stirring.Algerians say their country of 33 million is engaged in a slow-motion version of the post-Cold War liberalisation that began taking hold in eastern Europe 10 to 15 years ago.Much of the activity is in the informal sector, which the National Economic and Social Council estimates is worth 32 to 38 per cent of non-oil gross domestic product.NESC estimates 700 informal markets like Dubai have sprung up in recent years selling everything from car spare parts to gold.Officials, conscious of the need to create wealth and jobs in order to shore up political stability, seem unsure whether to cheer the phenomenon or condemn it.On the plus side, retail markets provide about 100 000 jobs in a society where lack of work creates big social strains that sporadically break out into riots in major towns.On the negative side, the markets pay no tax and the trade in mostly Chinese-made items undercuts locally assembled goods.”The informal economy is a serious threat to the local economy.It has already killed the textile sector,” economy specialist Hafid Sualili said.It is not just in retail.Experts suspect US$900 million to US$1,5 billion of Algeria’s non-convertible currency is exchanged annually on the black market.The informal sector as a whole, including company employees who have not been declared to tax authorities, may employ 1,5 million of the eight million economically active Algerians, experts say.-Nampa-ReutersNot so long ago, Nouredine and the scores of other budding entrepreneurs at the informal trading centre in the Bab Ezzouar district would have been shooed off the street by police.Until the early 1990s, the North African oil-exporting country had a state-dominated, Soviet-style economy thanks to the dirigiste views of its founding fathers who won independence from France in 1962 after an eight-year war.A pair of jeans, a bottle of Coca Cola or a slab of imported cheese were expensive rarities.Most people wanting basic items such as shoes had to go to a state-run shoe shop.That began to change when Algeria, a member of Opec, lifted a ban on private-sector foreign trade in 1991.The authorities also began turning a blind eye to street traders who took advantage of the reform to ship in goods on the black market for sale on street corners.Now that the conflict has wound down, private enterprise is stirring.Algerians say their country of 33 million is engaged in a slow-motion version of the post-Cold War liberalisation that began taking hold in eastern Europe 10 to 15 years ago.Much of the activity is in the informal sector, which the National Economic and Social Council estimates is worth 32 to 38 per cent of non-oil gross domestic product.NESC estimates 700 informal markets like Dubai have sprung up in recent years selling everything from car spare parts to gold.Officials, conscious of the need to create wealth and jobs in order to shore up political stability, seem unsure whether to cheer the phenomenon or condemn it.On the plus side, retail markets provide about 100 000 jobs in a society where lack of work creates big social strains that sporadically break out into riots in major towns.On the negative side, the markets pay no tax and the trade in mostly Chinese-made items undercuts locally assembled goods.”The informal economy is a serious threat to the local economy.It has already killed the textile sector,” economy specialist Hafid Sualili said.It is not just in retail.Experts suspect US$900 million to US$1,5 billion of Algeria’s non-convertible currency is exchanged annually on the black market.The informal sector as a whole, including company employees who have not been declared to tax authorities, may employ 1,5 million of the eight million economically active Algerians, experts say.-Nampa-Reuters