Russia and Algeria open a new chapter for Bilateral cooperation

Algerian President Abdelmadjid Tebboune and his delegation visited Russia, from June 14 through 16, to forge strategic partnership between the two countries. He went to Moscow at the invitation of Russian President Vladimir Putin. This special invitation had been conveyed by Foreign Minister Sergey Lavrov during his visit to Algiers in May last year with the aim of strengthening relations of “friendship and cooperation” between the two countries. Some Algerian media have criticized the visit amid Russia’s war in Ukraine.

The Algerian leader brought an extensive ministerial delegation to attend the 26th International Economic Forum (SPIEF)held at the ExpoForum Convention and Exhibition Centre in St. Petersburg, the second largest city in the Russian Federation. The significance of this visit are that (i) Algeria intends to convince potential Russian investors about the economic opportunities available in this North African country and (ii) to make conscious attempts at seeking support for its ascension into the BRICS which includes Brazil, Russia, India, China and South Africa.

On June 14, Chairman of the Delovaya Rossiya (Business Russia) Association, Alexey Repik, at the Russian-Algerian business forum stressed that “Russian business welcomes Algeria’s application for admission to the BRICS+ format,” but the final decision would be determined on the basis  and criteria set the BRICS. South Africa hosts the next  BRICS summit in August in Johannesburg.

In addition to above, Alexey Repik further noted that a number of measures should be taken to expand economic cooperation between entrepreneurs of the two countries. According to my research sources, Delovaya Rossiya comprises 72 regional and 43 sectoral unions. It’s influence has grown substantially over these years. Evidence of this resides in the tangible results of its activities and, of course, in the growing role in industrial production businesses in the Russian Federation.

That’s quite a serious organisation. Therefore it is important that Russia keeps its competitive edge on this market, in this volatile north Africa. Like many African countries, Algeria favours foreign investment but its political situation restricts and drives away potential western businesses. The country has experienced a wave of economic protests and demonstrations over the previous years.

There’s nothing to be afraid of as risk management is part of business. It implies that Russian business leaders from this organisation are desirous to explore the geographical proximity, but still there are doubts if investment be undertaken due to instability in the Maghreb region, especially in Algeria and Libya.

In particular, it is necessary to extend a visa-free regime to business representatives and to expand travel opportunities. This could be the first step to facilitate travel possibility between Russia and Algeria. There are some more challenges including logistics, trade preferences and customs tariffs. Delovaya Rossiya Chairman Repik stressed, during his discussions and with entrepreneurial optimism, that the potential for cooperation has not been fully fulfilled, primarily in the field of agricultural exports: Russian grain and Algerian olives and dates.

According to reports, Russia in 2021 exported $1.48 billion worth to Algeria, while during the same year Algeria only exported $17.3 million, primarily tropical fruits to Russia. More attention should be paid to projects related to innovation as an additional step to widen economic cooperation. It is, however, believed that “Russian technologies can help increase the competitiveness of Algerian products on world markets.”

Prior to their arrival in Moscow this mid-June, Advisor to the President of the Russian Federation Anton Kobyakov held discussions with Ambassador Extraordinary and Plenipotentiary of Algeria to Russia Smail Benamara. Kobyakov emphasized the noticeable strengthening of multifaceted strategic cooperation between the countries: “Last year marked the 60th anniversary of the establishment of diplomatic relations between our countries, and we can say with all certainty that the bonds of friendship and cooperation between our countries and peoples have stood the test of time. The People’s Democratic Republic of Algeria has proven itself a reliable partner. I am sure that the Algerian delegation’s participation in SPIEF will facilitate further all-encompassing Russian-Algerian cooperation.”

One important task involves increasing and diversifying trade between the countries. Algeria has been one of Russia’s most important trading partners in Africa for many years now. As of the end of 2022, Algeria ranked third in terms of trade turnover among Russia’s African partners, though great potential still remains for further commercial and economic interaction.

“It means a lot to us that Russian partners also attach such importance to our delegation’s attendance at the Forum and that they would like to further develop relations between Russia and Algeria. We will do everything we can to accelerate mutually beneficial projects,” Benamara re-assured, of course as this constitutes one of his diplomatic tasks in the Russian Federation.

In this changing geopolitical situation, Algeria could become Russia’s outpost in North Africa and a partner in the global gas market. Weighing the prospects for Russian-Algerian cooperation, Stanislav Mitrakhovich, an Expert at the Financial University and the National Energy Security Fund, named the field of energy as one of the top priority areas for joint initiatives.

“Algeria is one of the largest gas suppliers to the EU, and European politicians have been trying to convince this Arab country to increase gas supplies. However, domestic consumption there is growing and increased production demands large-scale investments. Algeria will increase liquified natural gas supplies but the situation is more complicated with pipeline exports: Algeria is not happy with Spain’s position in the Western Sahara conflict, where Madrid supports Morocco. So, the gas pipeline from Algeria to Spain via Morocco has ceased to function as an export route to Europe, only an underwater pipeline from Algeria to Europe remains,” he told Financial daily Kommersant before the presidents’ official talks.

“Under current conditions, Russia could potentially offer Algeria, if not complete market sharing, at least assistance in coordinating issues concerning priority export destinations and counteracting attempts by Western countries to introduce gas price limit mechanisms, as well as in fighting discrimination by (Green-oriented) European politicians against gas as an energy resource,” Stanislav Mitrakhovich concluded, adding that “Russia has proposals for Algeria on nuclear energy and on agriculture. Additionally, Russia, and previously the USSR, supported Algeria precisely on the sensitive issue of Western Sahara.”

On June 15, Algerian President Abdelmadjid Tebboune’s talks with Russian President Vladimir Putin touched on the strategic partnership and international issues, including the Middle East, the Sahel region, as well as energy cooperation within the OPEC+, the Kremlin’s information portal said. Russia and Algeria are working closely together as part of OPEC+ and the Gas Exporting Countries Forum. There was also a declaration signed which aims at deepening cooperation. It bolsters the Russia-Algeria relations.

“Cooperation between Russia and Algeria is now truly multidimensional and has considerable potential for further development. The declaration on deepening the strategic partnership between Russia and Algeria, which marks the beginning of a new, even more advanced stage of our bilateral relations,” Putin said.

According to him, regular political dialogue plays an important role. “We are in almost constant contact with you, our colleagues are working,” the Russian president pointed out, and added that Algeria is one of the three leading trade partners of Russia on the African continent. Speaking about the Russia-Algeria Business Forum, Putin said that he hoped the interest of both sides in such events “will only grow.”

Putin reminded that “relations with Algeria are of particular importance for our country and are of a strategic nature, we recalled that relations between Russia and Algeria began to take shape back in the mid-1950s and developed. We can say that they were already strategic in nature – without any exaggeration.”

Last year marked the 60th anniversary of the establishment of diplomatic relations between both countries. The USSR provided significant support during the liberation struggle, and in the early years of Algeria’s independence, it contributed to the formation of Algeria as an independent, sovereign state, the formation of its economy in a number of areas.

Regular political dialogue plays an important role, constantly working with colleagues: Minister of Foreign Affairs Sergey Lavrov, Secretary of the Security Council Nikolai Patrushev, and with Chairman of the Upper House of the Russian parliament Valentina Matvienko. There is also an intergovernmental commission coordinating the development in various spheres of mutual interest.

Algeria is one of the three leading trade partners of Russia on the African continent. “I would also like to note that Russian-Algerian coordination within the framework of multilateral formats and organizations is also at a good level. Our efforts through OPEC Plus and the Gas Exporting Countries Forum contribute to the stabilization of world energy markets,” Putin said in conclusion.

President Abdelmadjid Tebboune expressed deep satisfaction with this meeting. This testifies to the depth of friendship that exists between Algeria and the Russian Federation. “First, we must preserve our independence – thanks to the support of the Russian Federation, which provides us with weapons so that we can maintain our independence in these difficult conditions. We almost agreed – even before we started negotiations – on all the points that relate to the international situation. As you know, the situation is very tense. It is necessary that we speed up the process, that we enter the BRICS group and that we accept not dollars, not euros. This will be beneficial for Algeria,” he told Putin.

“As for the geopolitical situation, relations here, we must touch on the Libyan issue. Libya is a friend of Russia and Algeria, so we always want stability in this country. With regard to the Sahel region, we support the relations that exist between Mali and the Russian Federation. Mali is a neighbor of our country. In all conditions, we must talk and discuss all issues. We have an agreement called the Algiers Agreement,” he underlined in his speech in the Kremlin.

Russia previously signed agreements within the framework of the Joint Military-Technical Cooperation. Besides importing military weapons and equipment, Russia has little investment in its economic sectors. Most of Algeria’s weapons are imported from Russia, with whom they are close allies. For instance, in 2007, the Algerian Air Force signed a deal with Russia to purchase 49 MiG-29SMT and 6 MiG-29UBT at an estimated cost of $1.9 billion. Russia is also building two 636-type diesel submarines for Algeria.

Down the years, Algeria has been looking forward to expanding commercial and economic cooperation with Russia. The economy remains dominated by the state, a legacy of the country’s socialist post-independence development model. In recent years, the Algerian government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy.

Considered as part of the Maghreb region and along with the Mediterranean Sea, Algeria has an estimated population of 44 million. It has large untapped quantities hydrocarbons. Algeria has the 10th largest reserves of natural gas in the world and the sixth largest gas exporter, and since 1969 a member of the Organisation of the Petroleum Exporting Countries.

Gas-rich Algeria is in a delicate position regarding its long-standing ties to Russia. With drastically less capacity, Algeria is increasingly eyed by European countries looking to reduce their reliance on Russian energy amid the war in Ukraine. The North African nation has replaced Russia as Italy’s No. 1 energy supplier. Russia has long supplied Algeria with military equipment.

The theme of the 26th St. Petersburg forum: ‘Sovereign Development as the Basis of a Just World: Joining Forces for Future Generations’ and significant questions discussed were related to the key trends and changes in the Russian and global economy, aspects of the emerging multipolar world. Business issues were connected with Eurasia and Asian-Pacific region. As expected, Africa featured on the sidelines.

SPIEF is an annual gathering of influential Russian and international politicians and government officials, businessmen and representatives of academic community. The St. Petersburg International Economic Forum was launched in 1997 and since 2006 it has been held under the patronage and with the participation of the President of the Russian Federation.