Algeria Refuses to Borrow from IMF to Ease Financial Crisis

A vendor wearing a protective face mask serves customers inside his shop, ahead of the holy month of Ramadan, amid concerns over the coronavirus, in Algiers, Algeria. (Reuters)
A vendor wearing a protective face mask serves customers inside his shop, ahead of the holy month of Ramadan, amid concerns over the coronavirus, in Algiers, Algeria. (Reuters)
TT
20

Algeria Refuses to Borrow from IMF to Ease Financial Crisis

A vendor wearing a protective face mask serves customers inside his shop, ahead of the holy month of Ramadan, amid concerns over the coronavirus, in Algiers, Algeria. (Reuters)
A vendor wearing a protective face mask serves customers inside his shop, ahead of the holy month of Ramadan, amid concerns over the coronavirus, in Algiers, Algeria. (Reuters)

Algerian President Abdelmadjid Tebboune has declared his country will not approach the International Monetary Fund (IMF) for loans, despite a financial crisis triggered by a collapse in global oil prices and coronavirus lockdowns.

“Accumulating debt harms national sovereignty,” Tebboune told reporters in a meeting with Algerian media, broadcast late Friday.

Algeria fell into heavy debt with the IMF during the 1990s, an episode Tebboune referenced in his address.

Algeria is heavily dependent on oil production, which generates over 90 percent of its export receipts.

A collapse in hydrocarbon prices this year – caused by plunging demand due to societal lockdowns designed to combat the spread of coronavirus, and exacerbated by a brief price war between key players Russia and Saudi Arabia – is putting even greater pressure on Algeria's external accounts.

Even before this year’s crisis took hold, Algeria’s foreign exchange reserves had fallen to $62 billion at the end of 2019, from $180 billion in 2014.

But Tebboune stressed he prefers “to borrow from Algerian citizens, rather than the IMF or the World Bank.”

He also expressed reluctance to borrowing from foreign banks, saying that doing so prevented Algeria from making its position clear on issues including the fate of the Palestinian cause and Western Sahara.

Tebboune also said that several “friendly” nations had offered loans, which had been declined for the time being. he did not name these countries.

He ruled out relying on extra printing of the local currency by the central bank, noting that this could cause inflation.

Tebboune also revealed plans to develop new natural resources, including uranium, gold and phosphate, with the help of foreign investors, after the end of the health crisis caused by the novel coronavirus.

“The novel coronavirus has frozen several plans and projects. But they will be launched after the health crisis is overcome,” he said.

A sharp fall in oil and gas revenue in recent years has deepened the country’s financial problems, widening the budget and trade deficits.

Algeria still relies heavily on energy earnings despite previous announcements that it would carry out reforms and develop the non-hydrocarbon sector.

The coronavirus outbreak has worsened the economic situation with energy earnings dropping further, forcing the government to cut spending and planned investment for 2020.

“We are determined to develop our agriculture and reduce significantly the value of purchases from abroad,” Tebboune stressed.

Elected in December 2019 after mass protests demanding political and economic reforms and the removal of the ruling elite, Tebboune has vowed to open up the economy and amend the constitution to give a greater role to parliament.

“A political change will take place and strong institutions will be created,” Tebboune said, referring to demands by the protest movement known as Hirak.

The government has decided to postpone loan payments for state and private firms financially hit by the coronavirus, and Tebboune said more measures would be taken to benefit companies and the self-employed.

“Losses of firms are being assessed. We are ready to provide financial support. Even self-employed people such as taxi drivers and hairdressers will be helped,” he said.



US and UK Announce Plans for a Trade Deal That Trump Says Would Cement Their Relationship

British Prime Minister Keir Starmer (C) speaks to the media after a phone conversation with US President Donald Trump, at a Jaguar Land Rover automobile manufacturing plant in the West Midlands, Britain, 08 May 2025. (EPA)
British Prime Minister Keir Starmer (C) speaks to the media after a phone conversation with US President Donald Trump, at a Jaguar Land Rover automobile manufacturing plant in the West Midlands, Britain, 08 May 2025. (EPA)
TT
20

US and UK Announce Plans for a Trade Deal That Trump Says Would Cement Their Relationship

British Prime Minister Keir Starmer (C) speaks to the media after a phone conversation with US President Donald Trump, at a Jaguar Land Rover automobile manufacturing plant in the West Midlands, Britain, 08 May 2025. (EPA)
British Prime Minister Keir Starmer (C) speaks to the media after a phone conversation with US President Donald Trump, at a Jaguar Land Rover automobile manufacturing plant in the West Midlands, Britain, 08 May 2025. (EPA)

The United States and Britain announced plans for a symbolically important trade deal on Thursday, likely lowering the financial burden from President Donald Trump’s sweeping tariffs while creating greater access abroad for American goods.

The announcement provided a political victory for UK Prime Minister Keir Starmer and provided a degree of validation for Trump's claims that his turbulent approach on trade may be able to rebalance the global economy on his preferred terms. Yet the terms of the deal have yet to be completed so that it can be signed, a reminder that a process Trump has promised would be quick could take weeks as other nations with which the US runs a trade deficit worry that the Republican president's import taxes will drag down economic growth across the world.

“The final details are being written up,” Trump told reporters. “In the coming weeks, we’ll have it all very conclusive.”

The president said that the agreement would lead to more beef and ethanol exports to the UK, which would also streamline the processing of US goods through customs.

Starmer, speaking over the phone to Trump, stressed the importance of the relationship between the two countries as the anniversary of the World War II victory in Europe was being commemorated.

“To be able to announce this great deal on the same deal 80 years forward, almost at the same hour and as we were 80 years ago with the UK and the US standing side by side, I think is incredibly important,” Starmer said.

Britain said its deal with the United States will cut tariffs on UK cars from 27.5% to 10% and eliminate tariffs on steel and aluminum.

The British government said the deal sets a quota of 100,000 UK vehicles that can be imported to the US at a 10% tariff. It said the Trump-imposed 25% tariff on British steel will fall to nothing.

The UK said the agreement includes new reciprocal market access on beef and removes the tariff on ethanol going into the UK from the US, down to zero.

The planned deal was the first outlined since Trump began his stutter-step efforts to rewire the global economy by dramatically increasing import taxes in an attempt to increase domestic manufacturing. The Republican president quickly rolled out tariffs after returning to the White House, targeting traditional allies such as the UK with import taxes on steel, aluminum and autos.

Trump announced near universal tariffs on April 2, then partially retreated a week later and announced that his administration would seek individual agreements with various countries over the next few months.

The US already runs a trade surplus with the UK, making it a bit easier to find common ground as Trump has staked his tariffs on specifically eliminating the annual trade deficits with multiple nations he says have taken advantage of the US.

No new deals have been reached with America's largest trading partners, including Canada, Mexico and China. Trump has left the highest tariffs in place on China, sparking a confrontation between the world's two biggest economies. Washington and Beijing are sending officials to Switzerland this weekend for an initial round of trade talks.

Trump promised on Thursday that there are "many other deals, which are in serious stages of negotiation, to follow!”

Starmer, speaking at a defense conference in London, said “talks with the US have been ongoing, and you’ll hear more from me about that later today.”

The US and the UK have been aiming to strike a bilateral trade agreement since the British people voted in 2016 to leave the European Union, allowing the country to negotiate independently of the rest of the continent. Then-Prime Minister Boris Johnson touted a future deal with the US as an incentive for Brexit.

Negotiations started in 2020, during Trump’s first term. But the talks made little progress under President Joe Biden, a Democrat and a critic of Brexit. Negotiations resumed after Trump returned to office in January and intensified in recent weeks.

A major goal of British negotiators has been to reduce or lift the import tax on UK cars and steel, which Trump set at 25%. The US is the largest destination for British cars, accounting for more than a quarter of UK auto exports in 2024, according to the Office for National Statistics.

Britain has also sought tariff exemptions for pharmaceuticals, while the US wants greater access to the British market for agriculture products. Starmer’s government has said it won’t lower UK food standards to allow in chlorine-rinsed American chicken or hormone-treated beef.

The British government will see a deal as a vindication of Starmer’s emollient approach to Trump, which has avoided direct confrontation or criticism. Unlike the European Union, Britain did not announce retaliatory tariffs on US goods in response to Trump’s import taxes.

A trade deal with the United Kingdom would be symbolically important and a relief for British exporters. But an agreement would do little to address Trump’s core concern about persistent trade deficits that prompted him to impose import taxes on countries around the world.

The US ran a $11.9 billion trade surplus in goods with the UK last year, according to the Census Bureau. The $68 billion in goods that the US imported from the UK last year accounted for just 2% of all goods imported into the country.

The US is much more important to the UK economy. It was Britain's biggest trading partner last year, according to government statistics, though the bulk of Britain’s exports to the US are services rather than goods.

Trump has previously said that his leverage in talks would be US consumers, but he appeared to suggest that the UK would also start buying more American-made goods.

“I think that the United Kingdom, like every other country, they want to ... go shopping in the United States of America," he said.

A trade deal with the US is one of several that Starmer’s government is seeking to strike. On Tuesday, Britain and India announced a trade agreement after three years of negotiations. The UK is also trying to lift some of the barriers to trade with the EU imposed when Britain left the bloc in 2020.