Status-Quo or Reform from June 2017 to April 2019 in Algeria

What are the prospects for the newly appointed Government of Abdelmadjid TEBBOUNE?  Will we see the status-quo or reform from June 2017 to April 2019 in Algeria?  Or the latter being the country’s next presidential election, will we as stated in some international media, be focusing on the distribution of rent to temporarily appease the social front without strategic visions, Ministers confined in the management of the day-to-day business. 

Or, per the great wish of the majority of Algerians, the country whilst confronted to real issues, the resolution of which will involve profound political, economic and social adjustments. 

The new Government’s 12 Number challenges could perhaps be as follows.

1. The strategic objective whilst reflecting on the high rate (70%) of abstention and blank votes of the elections of May 04, 2017, is to put into place some political, social and economic intermediation in order to hopefully avoid direct confrontation of State citizens to allow mechanisms of dialogue between all political, economic and social of society without any exclusiveness, avoiding any form of the authoritarian past. With the world being more and more of a House of glass with the Internet revolution that actually opens up to all facets of society through more space and freedom.  All segments of society want their share of the hydrocarbon rent and immediately, not believing anymore in demagogic speeches and empty promises, the goal is to restore confidence in the future, and avoid this growing citizen-state divorce by a deep moralization of the political and economic life of society.
2. Globalization, a reality that whilst avoiding chimeras will have to be taken into account when considering the impacts of all recent global changes, the geostrategic stakes for the region including the Sahel, the integration of the Maghreb and more generally of North Africa, bridge between Europe and Africa so as to better face up the multiple challenges with the comparative advantage of this country and inscribe it into the Euro-Mediterranean and African space. One must realistically analyze the strategic implications of the Association Agreement that binds Algeria to Europe since September 1^st, 2005, after having had a break of three years. How then to arrange for a set-up of competitive enterprises in terms of cost and quality to this horizon?  It is similarly of the same with the future agreement which will be even more binding of Algeria’s accession to the Organization World Trade (WTO).  In this context, it is urgent to fix all those inconsistent and 1970’s modelled socio-economics and industrial development policies, whilst notably taking into account the fourth world economic revolution.
3. School reform has not only economic but cultural and political implications in the shaping of tomorrow’s Algerian citizen. It is in this context about how to also integrate the country’s educated youth including that of the emigration with its important potential that is the mother of all reforms. The socio-educational system got itself bureaucratised over the years, from the primary to the higher levels through also the vocational training and continuing education, posing the problem of the mastery of new technologies, having preferred the dominance of quantity over quality with up to 2 million students by 2020. Without however the primacy of the Knowledge Economy, any reform would be doomed to failure and everything else is a merely empty speech (1).
4. Away from administrative measures, it will be a matter of fighting off the bureaucratic system that discourages any creative initiative and that produced all that informal business sphere of more than 50% of the total country’s economic base where everything is treated in cash, thus promoting tax evasion, referring to the complete overhaul of the State. Basically this involves a debate on the future role of the State, far from the centralized model, so as to achieve a transition to a market economy with social purpose and reconcile efficiency and deep social justice.
5. Productive private sector characterised specific market does not exist and the State sector would have to evolve towards a competitive framework, frankly address a never too late program of de-monopolization (new local and international private investment sector) and privatization (transfer all or part of existing assets) as a complementary process to allow the transition of economic growth , posing the problem of the role of the State in the transition to a mastered competitive market economy.
6. Economic regionalization problem not to be confused with the increase in the number of governorates and regionalism, will strengthen the symbiosis Citizen-State through the involvement of local communities that need to optimise public expenditure, streamline its expenses, in order to achieve a grouping around large economic space whose core areas should be vocational training centers, public banks, private companies and regional universities within regional eco-poles so as to develop centers of excellence.
7. It would be a mistake to focus only on new organizations and legislation to fill the void; Algeria having experienced dozens of new organizations notably in the public without any conclusive economic impact and on the best laws in the world that are rarely applied. It is rather the implementation of good governance, involving the reorganization of the State, based not on custom relationships but on the rule of law and an independent justice.  It is also about promoting the plurality of the media with a code of ethics, a fight against corruption that destroyed the cohesion of the social fabric and scared away potential investors. It is thereby about establishing institutions, adapted to both the global and local changes taking into account our cultural anthropology.
8. Address, without taboo nor pouring into attacks and pernicious analyses, like in all democratic countries, the role in a State of Law of the armed forces and security services within a three to five years program, as well as the functioning of the Department of Foreign Affairs so as to adapt all diplomacy and representations to the new world.
9. The strict management of the revenues of SONATRACH, the state oil company that is the main pillar of the national economy, must be a priority through transparency of the costs of production, to empower and extend the hydrocarbons ownership to the whole national community. A productive discussion on the future of Shale Oil & Gas and its effects on the environment, the level of the conventional fossils reserves, and their exhaustion timeline taking account of the increasingly strong domestic consumption, the evolution of international prices and the new global energy changes, posing the problem of the generalised  subsidies without targeting.  Reducing costs by combining Solar and the unnecessarily wasted flared gas, and reviewing with promotion of energy efficiency especially of the conventional methodologies as currently applied in the construction industry.
10. With a non-existing real wage policy, corresponding to the level of production and productivity, it will be to peacefully address the balancing of the labour market with fairness and flexibility not forgetting the dangers of overstaffing in the public service of more than 2.1 million staff, where one does not solve the problems of employment through administrative or fictitious rentier jobs.
11. Related to the improvement of the health system with mismanaged hospitals, despite skills, and a reasonably decent sanitation of pension funds must be managed transparently. For that combine the systems of distribution and capitalization otherwise.

12. To energize the lethargic stock exchange, through a reform of the financial system and the State-owned banks. In this context, after pondering on why non-oil foreign direct investment is not appealing and the binding rule of 49 / 51% that is generalized to strategic and non-strategic sectors resolve, the thorny problem of both agricultural and industrial land allocation and deeds.

In short, meditate the negative experience of the war economy of previous governments in similar conjecture.  For this a change of course is needed. Subsidized interest rates, the purchasing power of the Algerian people as much as the value of the Dinar correlated to foreign exchange reserves, depends up to 70% on the hydrocarbons revenues.  Grants, direct and indirect social transfers having represented 27 to 30% of GDP in 2015/2016; would we see the State carry on in this way if the price of oil were persistently low with Algeria of 2010/2014 running on the basis of a price of a barrel higher at $100/110 and $88 in 2016?

As I demonstrated on numerous occasions to several international and national agencies, Algeria is at the crossroads with all possible scenarios, in order to achieve or not its transition from a rentier economy to a diversified economy and in the context of international values based on the enterprise with in its bedrock Knowledge but taking into account protection of the environment.

As per the founders’ teachings of economics, any existing technical determinism of a dialectical link between the political, economic, social and cultural would largely be influenced by globalization.  It is therefore necessary to distinguish between the dynamic stability and the involvement of citizens through democracy source of social stability and economic progress. Without democracy, the rule of law and the return to confidence, there may not be any development.

 

Note (1) :

• see algerie.com 26/05/2017 “New economic challenges of the Government of Abdelmadjid Tebboune”
• Interview with Prof. Abderrahmane Mebtoul on Ennahar TV “on the challenges of the Government Tebboune’ on 26/05/2017
• “the impact of the agreements of Vienna” on daily governmental Horizon and
• Chorouk Arabic daily of Sunday 29/05/2017
• Professor Mebtoul will debate on 29/05/2017 at 2300 – TV Dzaiar News on these topics .