OBG talks to Anne Ruth Herkes, German State Secretary, Federal Ministry of Economics and Technology

Interview: Anne Ruth Herkes

How can emerging markets like Algeria encourage growth of their industrial small and medium-sized enterprises (SMEs)?

ANNE RUTH HERKES: The "Mittelstand" is a frequently mentioned example when discussing the success of the German economic model. The strength of the German Mittelstand is characterised by its ability to innovate, and the commitment of its entrepreneurs with a strong sense of responsibility. Its creativeness, motivation and skilled workforce are decisive factors driving the success of these companies. One key element for the success of our industrial SMEs is the German dual training system. Initial efforts are already being made by German and Algerian representatives to analyse which aspects of this system can be applied in Algeria. Such training could help both to reduce unemployment and to strengthen SME growth. Moreover, strong cooperation, links between research institutes and businesses, a banking system with strong regional ties, as well as a reduction of bureaucracy all help to strengthen the growth of SMEs in Germany. They could be important steps for the development of SMEs in Algeria.

How have economic relations between Algeria and Germany evolved?

HERKES: Since the last visit by President Abdelaziz Bouteflika to Germany in 2010, we have continued to deepen and widen our bilateral economic relations across all areas. Chancellor Angela Merkel and President Bouteflika agreed to set up a Joint Economic Commission to take place on an annual basis. The third session of the Commission was held in Berlin in May 2013. Together with the Algerian Minister of Industry, SMEs and Investment Promotion, Chérif Rahmani, I co-chaired the very successful session. More than 100 representatives of the public and private sectors of both countries attended the meeting, and many fruitful business-to-business contacts were made. We are noting a growing interest of German companies in investing in Algeria. The Commission aims to discuss the potential for investments and possible co-operation projects between Germany and Algeria. More than 220 German companies are operating in Algeria: they are interested in long-lasting partnerships, including the transfer of technology and the provision of vocational training to young Algerian employees.

What are the challenges that must be overcome in order to carry out the Desertec project?

HERKES: Desertec is an important project that caters to all countries of the Mediterranean region. The joint relationship for the promotion of renewable energy sources can bring substantial added value to the development of this project. Desertec is indeed an important project that envisions a long-term integration of electricity in the European and Mediterranean region based on renewable energies.

With its vast natural resources for solar and wind energy, its rising population and industrialisation – and thus its steep increase in energy demand – Algeria can play a key role in making the Desertec project a reality. This will produce renewable energy not only for domestic needs, but also for exports to neighbouring countries.

Germany's renewable energy sector is one of the most innovative and successful worldwide, and German companies are producers and providers of world-class technology. The envisaged joint energy cooperation project between Germany and Algeria is consequently intended to enable an in-depth exchange at the government and enterprise levels on possible applications of renewable energies in Algeria. This also offers collaboration on domestic manufacturing and possibilities for a long-term electricity exchange with Europe. However, the high level of subsidies still being granted to fossil fuels in the region remain a challenge to our joint efforts to scale up investment in renewable energies.