1. NORD-SUD VENTURES Strategy & Lobbying Consultants Building up Confidence: Prospects and Challenges by Arslan CHIKHAOUI Economic & Political Specialist and CEO Middle East Association Seminar on Algeria London November 6 th, 2008 Head Office : 3, rue Gara Djebilet (ex. Jean Macé), 16000 Algiers-Algeria Tel: (+213) (0)21 632 429 / Fax: (+213) (0)21 632 430 E-mail: contact@nsventures.net

2. Socio Economic Overall view and perspectives DesignationReal 2007 Probable 2008 Prediction 2009 Estimate 2012 World growth of GDP (%)3.72.72.13.2 MENA growth (%)5.56.15.55.9 Potential Algeria GDP growth (%)4.22.54.75.3 Real Algeria GDP growth (%)4.64.24,56,4 Trade balance (bn USD)34,338,234,137,9 Population (million)33,934,434,936,4 GDP per capita (USD at the market exchange rate) 3,8804,8105,0006,220 Household consumption per capita (USD)1,2201,4601,5701,830 Inflation (%)3.55.44.23.6 Banks Commercial rate of loan (%)88.18.27.5 Interest rate at deposit (average %)1.822.5 Labor (million)9,4 9,59,8 Jobs (million)8,18,38,59,2 Unemployment rate (%)11.81512,510,1 Net foreign direct investments (bn USD)1,722,63 Total external debt (bn USD)432,73,2 Total external debt (% of GDP)31.81.61.4 Debt/exports ratio (%)5.73.53.13 Predictions and estimates: NSV Business Intelligence Unit

3. Country risks OECD grading confirms that Algeria is one of the best country risks in the North African region. The main handicaps for investment is still the banking system and the bureaucratic red tape. Corruption Fighting corruption is a priority for the Algerian Government. In June 2005, an anti-corruption bill was adopted by parliament. The Law reinforces existing legislation to comply with the UN Convention against Corruption which Algeria ratified in 2004. Nevertheless, a lot of efforts remain to be done in this field. Money laundering On January 2005, the Government adopted a Law pertaining to money laundering and terrorist financing to comply with international standards and measures against organized crime. A Financial Intelligence Unit (CRTF) has been set up.

4. Transparency International Notation of North African Countries Country Rank (out of 180) Corruption perception index Score Algeria993,0 Tunisia614,2 Morocco723,5 Libya1312,5 Egypt1052,9

5. Grading of the security risk in Algeria General score in 2008 = 3,25 / 4 Specific scores Social climate = 3 Terrorism = 3 Criminality = 4 Kidnapping = 3 Key: 1: Low; 2: Moderate; 3: Sensitive; 4: High; 5: Very High Source: NSV

6. Evolution of the terrorist acts (executed) in Algeria from 1992 to Sept 2008 Year Number of actions 199202 199307 199415 199526 19961889 19971424 19981082 1999775 2000712 2001373 2002320 200301 200401 200500 200603 200709 Jan – Sept 200806 Source : NSV Intelligence Unit and National Institute for Defence Studies

7. Evolution of the terrorist acts (executed) in Algeria from 1992 to Sept 2008

8. Overview of the global security situation in Algeria from 1992 to Sept 2008

9. PROSPECTS  Algeria is not the dangerous place to do business it once was. The level of overall violence will continue to decrease. Crime and banditry to replace terrorism.  The aim of the next presidential run is to strengthen the political stability and to move toward a sustainable economic growth.  Constitutional amendment is seen more as institutional reforms in order to create an environment of political stability. The PM’s role is to be empowered.  Opening up Algerian economy will progress. No question to go backward.  The next step forward of economic reforms is to speed up the financial structural reforms.  Opening up new opportunities for private sector and FDI.  Reform of the army will progress moving to a professional one.