Bilateral Business Councils, An Inclusive Lever of Algeria’s Economic Diplomacy

NESA Center Alumni Publication
Dr. Arslan Chikhaoui – Geopolitics expert, member of the Advisory Council of Experts of the World Economic Forum, and stakeholder in various ‘Track 2’ working groups of the United Nations System (UNSCR 1540).
5 July 2024

 

Algeria is undoubtedly moving towards a new era where it is active in aligning itself with the new global context. With a revival of its presence on the international scene, it is forging its path in a regional and international landscape in turbulence and in full change and where competition is becoming increasingly tough. This political-diplomatic dynamic initiated by Algeria marks its desire to position itself on the international scene as a credible, reliable, and main partner in the region of the three “areas of common interest.” The strategy of openness and economic diversification as well as the desire to attract Foreign Direct Investment (FDI) and the desire to create a substitute economy for the oil-based economy are the main motivations for this new Algeria’s foreign policy impulse. The revitalization of its economic diversification policy and the creation of suitable business climate conditions are gradually taking shape in order to attract potentially interested foreign investors while taking into account a major fact, that of fierce competition on an international scale for capturing FDIs.

The contemporary history of geopolitical developments tells us that diplomatic practice has undergone a major transformation in the last decades, seeing its objectives turn towards the economy, trade and business interests but also towards science, technology, energy, and mining resources. As a result, new actors have entered the diplomatic scene. Indeed, overall, diplomacy has undergone significant developments over the course of political cycles. Economic themes have now become central so that the term “economic diplomacy” is often used by the media or by political institutions and representatives. If the practice of diplomacy was for a long time the exclusive prerogative of States, new international actors have appeared for more than a quarter of a century.

In a world in constant shift, diplomacy is not the only instrument of foreign policy. The field of diplomacy has been broadened by the inclusion, in recent decades, of economic, commercial, technical, cultural, scientific, health, and technological matters, while traditionally, only contacts between States relating mainly to political issues are reserved to diplomacy. Consequently, there are several types of diplomacy: direct or classic diplomacy, parliamentary diplomacy, civil society diplomacy, ad hoc diplomacy, proxy diplomacy, secret diplomacy, open diplomacy, preventive diplomacy, multilateral diplomacy, oil and gas diplomacy, dollar diplomacy, mining diplomacy, scientific diplomacy, economic and commercial diplomacy, and networking diplomacy.

Currently and in a context of geopolitical and alliances reshaping, diplomacy is increasingly directed towards the economy and trade. The boundary between traditional political diplomacy and economic diplomacy is sometimes complex to distinguish, so that it becomes difficult to find out the existence of a line of division between the two. As a result, traditional diplomacy has for several decades been shadowed by economic diplomacy. State strategies are increasingly based on conquering new markets for their companies. In this context, diplomacy is oriented towards the triple mission: (i) Facilitate overseas opportunities for national public and private companies (support for exporters); (ii) Attract foreign investment on national soil; (iii) Bend international rules in the direction of domestic interests. In the sense that economic diplomacy touches on diverse and varied areas such as trade, investment, migration, development aid, and uses relationships, personal networks, persuasion, direct and indirect lobbying, influence, and negotiation as tools. It is clear that lobbying is not a “secret society” or a malicious activity, but it is a strategic communications force that allows it to play a major role of influence in nowadays world. Lobbying is an activity which, through a planned and continuous effort, makes it possible to establish a dialogue between the different components of the political and economic arena. This concept originates from an expression by General Grant, President of the United States of America. After the fire that destroyed the first White House, President Grant, who was staying in a hotel, was concerned about the presence of all the people waiting for him in the lobby (ground floor) to try to influence him. Consequently, this concept has transformed over time into a persuasive communication tool for international relations.

As the globalization of trade has created an increasing interaction between politics and economics, influence strategies are developing in parallel. The geopolitical reshaping is found under the influence or even the impetus of numerous interconnected non-state actors. Increasingly, political leaders are using leverage instruments involving non-institutional actors from civil society and opinion leaders (Key Opinion Person -KOP-), NGOs, professional organizations, employers’ organizations, chambers of commerce, and in particular, bilateral business councils to carry out their foreign policy and influence actions in addition to institutional diplomacy.

Algeria, aware of this contextual reality, has decided to rely, in particular, on the lever of bilateral business councils to boost its economic and commercial diplomacy. The Minister of Foreign Affairs, Ahmed Attaf, during a forum on “The role of business councils in strengthening economic diplomacy” held at the end of June 2024 in Algiers, highlighted these mechanisms of economic diplomacy, which “… mark out the path to establishing mutually beneficial trade and investment partnerships…,” he pointed out. From the point of view of analysis, the role of bilateral business councils is not to carry out commercial marketing only but to be a network of exchange and reflection and, consequently, a force of proposal to support political decision-making. To achieve this objective, these business councils must have a clear vision to actively participate in the game of useful and non-malicious lobbying. According to the statement of the head of Algerian diplomacy, Attaf: “… Algeria was among the first countries at the continental level to set up such mechanisms, starting in the 1990s …” and “… Algeria created, up to day, more than 40 business councils with Arab, African, European, Asian countries and the two Americas countries.”

Indeed, in terms of analysis, we can say that there were three stages of evolution of these mechanisms. Since the economic and commercial opening of Algeria in 1990, while the country was going through a period of multidimensional turbulences and crises, bilateral friendship and cooperation societies were created which subsequently evolved into business councils, and we mention notably, the Algerian-South African Friendship and Cooperation Association, the Algerian-South Korean Friendship and Cooperation Association. A decade later, the country saw the birth of the first bilateral business councils with an increase in number over time and of which we can name for example, the Algerian-British Business Council, the Algerian-American Business Council, the Algerian-German Business Council, the Algerian-Spanish Business Council, the Algerian-Dutch Business Council, the Algerian-Swiss Business Council, the Algerian-Mauritanian Business Council, and others.

From the point of view of analysis, currently and in addition to the bilateral chambers of commerce, over forty bilateral business councils exist but have not all reached a threshold of dynamism for being a real leverage. The fact remains that these lever tools of economic diplomacy are called upon to constantly adapt to the evolving global context. However, some of the existing business councils have established themselves as real bridges for facilitating dialogue and mutual understanding and have the merit of having promoted the image of Algeria among their respective political and business communities to counteract the impact of the distorting prism of the media during the so called “black decade” or “decade of violent extremism.” This made it possible to dispel misunderstandings and support the consolidation of bilateral economic and commercial relations by organizing several B2B, B2G, G2B meetings and promoted frameworks for exchange and consultation. Among other issues, they have supported as well the establishment of non-double taxation agreements or free trade agreements.

In short, what is being certain is that nowadays, non-institutional diplomacy is an unquestionable support for institutional diplomacy. The major challenge in a world in full geopolitical reshaping lies in the approach tactics to be implemented and the strength and capacity for rapid adaptation. This reshaping geopolitical map of the new world has been in motion for more than three decades with the participation of numerous interconnected non-state actors and with the impetus of “Smart Power.”

For Algeria, the recovery of trust and confidence on the horizontal and vertical scale is the driving force of this approach combined with networking diplomacy which moves from a passive mode to an inclusive proactive mode.