Foreign Relations of the United States, 1981–1988, Volume XXIV, North Africa

142. Telegram From the Embassy in Algeria to the Department of State¹

46.

Algiers, January 6, 1985, 1622Z

Commerce for Dennin. USDA for Sims. Subject: President Bendjedid Orders a Strengthening of U.S.-Algerian Relations.

1. Confidential—Entire text

2. Summary: President Bendjedid’s strengthened mandate after the FLN Party Congress² will apparently be used in part to push forward more rapidly improving relations with the United States. Senior MFA officials are now looking closely at specific actions that can be taken in this area. Mid-February joint commission meeting will be used to signal publicly that U.S. and Algeria are cooperating in more significant ways. End summary.

3. In both a luncheon with Ambassador Sahnoun on January 4 and in my January 6 meeting with MFA SecGen Hamdani; I was told that President Bendjedid had personally ordered that strengthening of Algeria’s relationship with the United States be moved forward more quickly now. Hamdani and Sahnoun indicated that the President came out of the FLN Party Congress with a stronger mandate to carry forward the policies he wants, and further improvement of ties with the U.S. is a very high priority. Hamdani, in particular, left no doubt that he is under instructions to get the job done.

4. Hamdani asked me for my appraisal of where we stand and which areas are most amenable to early improvement. I told him that we have had good policy direction within both governments favoring improved ties but that we suffer from the weight of sluggish bureaucracy. I noted that we have put several offers on the table for the sale of U.S. military equipment but have not yet registered any notable success. I also noted that we have encountered problems in the way our two countries do business in agricultural trade. GOA is state-oriented while we leave sales and technical transfer issues mostly in the hands of the private sector. These two have had trouble connecting, I said, and we have to work harder to find ways of getting them together.

5. I also brought up the Pullman Kellogg Boufarik Airbase case as an example of the frustrations American companies encounter in trying to get business in Algeria. I noted that Pullman Kellogg feels badly treated since it made such a large investment in designing the Boufarik project, only to see the contract go to what can only be called an unqualified bidder.³ These cases are complicated, I went on, by the common practice in Algeria of only starting the “serious” negotiations for a contract once the contract letting and bidding phase is completed. American companies are not accustomed for the most part to doing business this way, and they feel there is an element of bad faith in GOA practice of shaving deals after bids have been accepted or contracts signed. If we want to see more American companies active in the Algerian market, I noted, we have to examine issues like these.

6. Hamdani, and the MFA’s Director for Europe-North America (Mohamed Ghoualmi), seemed anxious to focus directly on specific cases—apparently so that they can tell President Bendjedid that they are taking concrete steps to carry out his order. Ghoualmi asked for an informal paper on the Boufarik Airbase issue. We will provide this soonest on the basis of our knowledge and information provided by USDOC.⁴

7. In a broader sense, Hamdani said GOA is looking forward to Joint Commission meetings in mid-February as an opportunity to make progress and remove blocks. Ghoualmi added that there are some areas where the GOA would like to put particular focus. He was concerned that Algerian use of the U.S. higher education system had been too haphazard, with a large number of students failing to take optimum advantage of their study in the U.S. He proposed that we seek ways to organize and direct this activity. Ghoualmi also brought up the close relationship between Boeing and Air Algerie. He said Algeria was very happy with Boeing as a partner, especially Boeing’s excellent record in the area of technology transfer. He thought the Joint Commission might be a venue for stimulating similar relationships and he intimated (albeit vaguely) that there might be some important development for Boeing at that time.

8. Comment: Bendjedid seems firmly committed to path of improving ties with the U.S. and is likely to try to make and portray JEC meeting as a highly successful event. We are pursuing advance preparations at this end via working level meetings among Embassy econoff, commercial officer and ATO with MFA, MinAg and Ministry of External Commerce.

Johnstone

1. Source: Department of State, Central Foreign Policy File, Electronic Telegrams, D860011–0371. Confidential; Immediate. Sent for information to USDOC and USDA.
2. The FNL’s 5th Party Congress took place in December 1984.
3. In telegram 536 from Algiers, February 7, 1983, the Embassy described the GOA’s cancellation of the contract, under which a U.S. company was scheduled to upgrade Boufarik airbase, as “unprecedented. We are frank to say we do not know for certain what led to this surprising development but suspect that Presidency itself had second thoughts about political advisability of high cost, high visibility aircraft dedicated exclusively to presidential travel.” Nevertheless, the Embassy stated it was “inclined to accept Algerian assurances that cancellation had nothing to do with bilateral relations.” (Department of State, Central Foreign Policy File, Electronic Telegrams, D860069–0511)
4. The informal Commerce paper was not found.