France's Havas Advertising originally planned to open a new Euro RSCG division in the Algerian capital of Algiers last March. The expansion plan, directed by Euro RSCG's Moroccan affiliate Klem-Casablanca, wasscheduled to have been completed in October, but has now been put on holduntil early 2000 pending formation of a new government and passage of aframework publicity law.
"Everything was more or less in place for an October launch, but then the government fell before the publicity law was finalized, which means that the rules of the game are still unclear," says Hamid Kadiri, president of Klem-Casablanca and Euro RSCG's point man for the Algerian expansion.
He adds: "At this point, we have decided that it is better to wait for the new government to be formed and the new publicity law passed, so we can enter the market under conditions that will allow us to have high visibility from the first day."
The framework advertising law aims to set the conditions under which advertisers and ad agencies will operate in the rapidly deregulating Algerian economy. A draft of the law was approved by the Algerian National Assembly last February, but later rejected by the Senate, leading to the resignation of key ministers supporting the bill and partially prompting a political crisis surrounding economic liberalizationthat has yet to be solved.
Euro RSCG officials had put high hopes on the Algerian expansion, aimed at taking advantage of the economic upsurge expected to accompany the election last April of reform-minded President Abdelaziz Bouteflika. Mr. Bouteflika has pledged to end the bloody civil war that has cost more than 50,000 lives since 1992 and lead Algeria's transition to a market-based economy.
Havas is betting that the transition, which will include a wide-ranging privatization campaign and the opening of various sectors of the Algerian economy to both domestic and foreign competition, will lead to an advertising boom as new entrants seek to stake out turf in the wealthy Algiersmarket.
Top American agencies, including Interpublic Group of Cos.' McCann-Erickson Worldwide and Omnicom Group's TBWA International, have also laid thegroundwork for expansion into the Algerian market.
Copyright November 1999, Crain Communications Inc.