Dr Mebtoul talks to American Herald Tribune

Dr Mebtoul talks to American Herald Tribune

 

“Any Destabilization of Algeria would have Geo-strategic Repercussions on all the Mediterranean and African Space” stated Dr Mebtoul talking to American Herald Tribune‘s Mohsen Abdelmoumen, journalist in an extensive interview published on 28th December 2016.

American Herald Tribune is a genuinely independent online media outlet.  AHTribune is dedicated to strengthening and supporting independent journalism, and to improving the public’s access to independent information sources.

Here are some excerpts but the whole interview could be accessed in its original setting.

Mohsen Abdelmoumen: We are following your work for a long time. For the economist that you are, does Algeria respect international commitments?

Dr Abdulrahmane Mebtoul: You are referring to the Association Agreement signed in full sovereignty on September 1st, 2015. For Algeria, speaking through the Director-general of economic relations and international cooperation at the Ministry of Foreign Affairs, it is not question of calling into question the general architecture. Europe having acceded to the Algerian demand and agreed to a partial revision of some articles allowing a win/win partnership while underlining for the European part, that the structural reforms for a diversified economy depend first of the Algerian government, in order to benefit from this agreement. There is again talk of a possible membership of Algeria to the World Trade Organization (WTO) which constitutes 97 % of the world trade and 85 % of the world population. End of July 2016, the organization had 164 member countries and 20 observer countries, including Algeria. To date, Algeria led 12 rounds of multilateral negotiations, during which it treated 1,900 issues related primarily to its economic system. For my part, I am favorable to this membership and for the respect of the international agreements, Algeria having always respected them. The recent law passed of the return of the import licenses is part of the respect for the international commitments of Algeria. Freedom of trade and industry is the basis of the economic and trade policy of the Algerian government, enshrined in all the measures of the Algerian legislation. In this context, this legislation following the example of what is planned by the legislation of several countries with economy opened in Europe and elsewhere, offers the possibility of using, in specific and predefined cases, a transitional period in order to upgrade the productive apparatus, to the neutral import or export licenses in their application and administered in a fair and equitable way to manage exceptions to this freedom of trade, in accordance with the rules of the WTO. In general, Algeria’s accession to the WTO will require it to open borders and the increased specialization aroused by globalization. Indeed, both agreements with the European Union than with the WTO are planning to develop trade by putting in place the conditions for the gradual liberalization of trade in goods, services and capitals. Recently, newspapers have poured into the guesswork by taking out the content of its context. There has never been any question, either on the part of the European Union or the USA, of freezing economic cooperation with Algeria. The wish, faced with the fall in the price of long-term hydrocarbons, is a change in the Government policy which will have to accelerate reforms in order to avoid the destabilization of Algeria and, thereby, the region, what the international community does not want. This was confirmed to me during my conference at the invitation of the European Parliament and recently by officials of the European Union. The fight against terrorism by the ANP (Algerian army) and Algeria’s security forces is strongly welcomed by the international community; there are dialectical links between security/development that must over time be pooling the spending by a regional agreement. In the event of an economic recession in Algeria and in the whole of Maghreb, the integration to which I am deeply attached for decades, with the strong demographic pressure, it is all the Maghreb which risks the destabilization and by extension Africa and Europe, especially after the announcement of Daesh’s penetration in the region, by the US intelligence services. This stability depends on the deepening of the internal comprehensive reform which will depend greatly on the relations of political forces between the reformers and the seated on rentier revenues conservatives. To conclude with your question, indeed there have been international disputes in cascade for certain Algerian companies including SONATRACH with their foreign partners, but there is an awareness that a law must conform to international standards in order to encourage both domestic and international private investment. This also raises the issue of the 49/51% rule generalisable that the Algerian Government has not introduced in the new investment code whose I have advocated the easing to the Government since 2010, both to the segments hydrocarbons for the marginal deposits and other non-strategic segments in order to boost non-hydrocarbons exports. The “non-hydrocarbons” exports which remain always marginal with only 5.46% of exports’ global volumes, equivalent to $2.06 billion in 2015, have experienced a 20.1% reduction in year 2014. Exported products apart from hydrocarbons are essentially half-finished products that represent 4.48% of the global volume of exports, equivalent to $1.69 billion, food products with a part of 0.62%, equivalent to $234 million, raw products with a part of 0.28%, in absolute value equivalent to $106 million, and finally industrial capital goods and non food consumer goods with respective parts of 0.05% and 0.03%.

Will the American election and the future French election have repercussions on Algeria?

The United States of America, France and Algeria maintain relations of friendships for a long time. For the USA, it must be recognized that with the Oil/Shale Gas revolution, they became competitors to SONATRACH, and this has had an impact on the value of the trade balance, which increased from $12 billion in year 2008 to $5 billion by 2015. But major US non-hydrocarbon investments are underway. We may recognize that the main customers and suppliers are the Europeans with a breakthrough for China in terms of imports. Despite some seasonal turmoil, like for an old couple, economic relations with France are excellent. Spain remains a key partner of Algeria. In short, the situation is different from that of the 1986 crisis: foreign exchange reserves, although declining, are substantial by more than $112/116 billion at the end of 2016, external debt is low. Algeria has the potential to emerge from the crisis and has become aware of the urgency of boosting non-hydrocarbon production in the context of an open economy. Any destabilization of Algeria would have geo-strategic repercussions on all the Mediterranean and African space, hence the importance of development based on a win/win partnership.

How is it going with the partnership with the United States and Great Britain?

The objective in the face of the new global geo-strategic changes, and the establishment of America as the first world economic power, energy competitor of Algeria with Oil/Shale Gas. As customer, in 2015, the United States represents $1.977 billion that is to say a decrease of 59.04% compared with 2014 and, as supplier, $2.710 billion, that is a decrease of 5.48% compared with 2014. While in 2012, Algerian exports to the US (source Algerian Customs) were estimated at $10.778 billion and imports of $1.651 billion.

At current prices, the US GDP for a population of 324 million inhabitants in 2015 was $17,698 billion, the United Kingdom of $3,371. The European Union, including Great Britain, with a GDP of $18,812 billion for a population of 510 million inhabitants, remains the world’s largest economic power. The USA and Europe for less than a billion inhabitants add up to more than 40% of the world GDP considered at $73,400 billions in 2015 and $75,700 billions in 2016.

Commercial prospects exist between the USA and Algeria outside hydrocarbons, Algeria being primarily interested in the transfer of technical and managerial know-how with the presence of major American companies having to boost cooperation, especially in the fields of new technologies, industry, services, agriculture and buildings, public works and hydraulics industries, not forgetting training. Recently, except for hydrocarbons where the USA are present, the last contract in date is the one signed in 2013 between the group SONELGAZ and the American group General Electric (GE) for a partnership in an industrial complex manufacturing gas turbines in Algeria, for an investment of $200 million. This company, which will be held in 51% by SONELGAZ and 49% by GE, will produce as from 2017 between six and ten gas turbines a year, that is to say a capacity of 2,000 MW, a part of which could be exported. GE also won a market of supply of gas and steam turbines with a capacity of 8,400 MW for a total of $2.2 billion, intended to equip the six power stations that Algeria plans to build by 2017. But relations go beyond the economic framework.

The US recognizes that Algeria is the dominant military and economic power in the Maghreb region. It represents a key partner to the United States in the fight against terrorism, according to a document compound of 6 chapters of the Security Research Service of the American Congress which essentially deals with the question of government and politics in Algeria. Approaching the relations between Algeria and the United States, the report notes that Algeria is an increasingly important country in the US efforts to fight international terrorism and represents a key partner in the fight against terrorism-related groups. But let us never forget that the USA have a global strategy which does not differ fundamentally from that of Europe (except for certain tactical discrepancies) based on economic interests and insist on the Maghreb integration under segment of the continent Africa, whose economic control through the rivalries of China in particular will be a major issue of the 21st century.

Britain with 64 million inhabitants has a GDP (2014) of €2231.5 billion. It is the 5th world economy with exports of €407.4 billion and imports of €493.8 billion. In 2015, for the Algerian-British trade, we have $903 millions in the import representing 1.75% and $2,883 million in exports, or $3.8 billion, compared to $2.5 billion in 2012. So, let us recognize that the Algerian-British cooperation knew a real development since lord Risby’s appointment, who as Special Envoy of the British Prime Minister for Economic Partnership with Algeria, has explored a number of business opportunities in Algeria. The United Kingdom is present in the traditional hydrocarbon sector, notably through BP, Shell and BG, but also in other fields such as education (Linguaphone), infrastructure (Biwater), pharmaceutical industries (GSK), consumer products (Unilever), financial services (HSBC), and transportation (BA). Not forgetting the recent contracts signed with Hospital Group for the construction of a 500 beds hospital in Tlemcen. Petrofac obtained a $970 million-contract, in an association between Algerian Sonatrach (40%), Spanish Repsol (29,25%), German RWE (19,5%) and Italian Edison (11,25%), for the construction of a gas processing plant in the country’s South.

As for Algeria, nominal Gross Domestic Product (GDP) is expected to reach $166 billion in 2016 against $172.3 billion in 2015, according to IMF forecasts, for a population exceeding 40 million. Concerning the trade balance between Algeria and the rest of the world, in 2015, hydrocarbons represented the main part of our exports abroad with 94, 54% of the overall volume of exports, and a 40.76% decrease in 2014. Exports of “non-hydrocarbons”, which remain always marginal, with only 5.46% of the overall volume of all exports, equivalent to $2.06 billion, experienced a 20.1% drop in 2014. The groups of exported products outside hydrocarbons consist essentially of semi-finished products that represent a part of 4.48% of the overall volume of exports, equivalent to $1.69 billion, food products with 0.62%, that is $234 millions, crude products with 0.28%, that is in absolute value $106 million, and finally industrial capital goods and non food consumer goods with respectively 0.05% and 0.03%. In 2015, according to statistics, Spain was the main customer of Algeria, with $6.56 billion, followed by Italy ($6.16 billion), France ($ 4.92 billion), Great Britain ($2.88 billion), the Netherlands ($2.28 billion) and Turkey ($2.07 billion). Among the main suppliers of Algeria, China ranks first for the third consecutive year with ($8.22 billion), followed by France ($5.42 billion), Italy ($4.82 billion), Spain ($3.93 billion), Germany ($ 3.38 billion) and the United States ($ 2.71 billion). According to the official statistics, these figures also reveal that 63.49% of Algeria’s imports come from the OECD countries which are also the destination of the 82.64% of Algerian exports. Member countries of the European Union are the main business partners of Algeria which imports over 49.21% of its products and exports over 68.28% of the goods that it produces, dominated by hydrocarbons. The trade with the Maghreb countries (UMA) remain very marginal, having known a 40% decline in 2015, moving from $2.28 billion up to $3.8 billion in 2014, and trade with Arab countries decreased by 2.68%, with $ 2.54 billion against $2.61 billion. As for trade with Africa, it is marginal.and relatively modest, reaching $2 billion in 2010, Including $1.260 billion Algerian exports and $771 million of imports, but these increased strongly between 2012 and 2014.

In terms of the economic model, according to our sources, the authorities did not listen to you when you sounded the alarm right from the start. Are you listened to today?  We had echo that you had undergone pressures about the work you do and the analysis you developed, isn’t it too late to rectify the current economic situation?

No, it is not too late, Algeria having significant potentialities to emerge from the crisis subject to renewed governance and the primacy of the economy, of knowledge, far from the rentier vision which can only lead the country to collective suicide. Besides, I would like to underline that I have never undergone of pressures, being independent expert. A technical model has no significance if it is not carried by economic social forces and policies responsible for its implementation. Let’s get away from the doom and gloom, everything that has been achieved between 2000/2016 is not totally negative. Many achievements were made after the bloody decade of 1989/1999, but also many errors that must be corrected imperatively. At the end of 2013, still as an independent expert, I had directed for the government, with more than 20 experts, an important file followed by many recommendations, between 2014/2016, by insisting on the urgency to review the current social-economic policy. If we had had good governance, more rigor in management, better allocation of resources favoring the economy and knowledge, pillars of development, far from the outdated material vision of the 1970s, taking into account the non-maturation of projects with various reassessments and the additional costs that were sometimes between 25-30% for certain projects (spend lavishly), according to the World Bank report, Algeria could have saved more than 130 billion dollars between 2000/2016, an amount that exceeds current foreign exchange reserves, while creating growth dynamic. When the Government invokes tourism, industry, agriculture, services such as sector dynamic between 2016/2020 to achieve a growth rate of 7%, we need to have a precise vision project by project and to figure within the framework of internationalized sectors according to the standards cost-quality in touch with the new world transformations and not to speak about sector on the whole. Like the free trade agreements with Europe since September 01, 2005 must be taken into account with a gradual tariff reduction of zero by 2020, not to mention the constraints of the WTO in the case of accession. Will we have competitive companies in this short time? The import substitution policy to lighten the import invoice must be based on careful analysis of the import, product by product, starting from large masses. Algeria, if it wants to become an emerging country, and it has the capabilities, does not need a non-industrial strategy, a vision of the years 1970/1980, but of a corporate strategy within the framework of internationalized channels. A growth rate in real terms of 9/10% between 2016/2020 is necessary to boost non-hydrocarbon exports and reduce social tensions. All the more Algeria should face fiscal tensions by 2016/2020 with the decline in hydrocarbon prices being utopian to predict a course upper to $75/90 between 2017/2020, OPEC representative 33% of world production marketed with a declining impact. To govern means to make plans, it will be necessary, according to the quantified and dated results, to put in place strategies of adaptation, in economic, social and political, assuming a broad national front, taking into account different sensitivities, local and international changes, being at the dawn of the fourth world economic revolution with profound geo-strategic upheavals. I am convinced that Algeria suffers from a crisis of governance and not from a financial crisis, the situation being different from that of 1990. But in the absence of reforms, this governance crisis risks turning into a financial crisis, because Algeria will depend for a long time on the hydrocarbons revenues. It should be reminded that, according to the official data produced by the Council of Ministers in 2015 following the report by the Minister of Energy, Algeria’s gas reserves are 2,700 billion cubic meters and 10 billion barrels of oil, going to, in view of the exports and of the current consumption, in the exhaustion on the horizon 2030. We are currently focusing on the oil price by forgetting the price of gas, representing 33% of SONATRACH’s revenues, whose long-term contracts expire by 2018/2019 with a very strong competition, before attending a revision of prices downward. It is a strategic error to reason on a linear consumption model focused on traditional fossil energies. The world is preparing for an energy transition between 2020/2030, as has happened from coal to hydrocarbons, hence the urgency of a new economic policy 2016/2025. Faced with a situation both geo-strategic and socio-economic worrying for the future of Algeria, beyond the State, all the players in society must be mobilized if Algeria wants to return to sustainable growth outside hydrocarbons within the framework of international values.

How can we not remind that countries that have successfully performed reforms, in particular emerging countries, leaned on a mobilization of the opinion. The need to reform is imperative in Algeria. Despite unprecedented monetary spending, economic outcomes are mixed and can lead to political social crises if we continue to spend lavishly, urging the inevitability of the structural changes to be made. Strong growth can return in Algeria. But it presupposes the combination of different factors: a dynamic active population, a knowledge, the sense of adventure and technological innovations constantly updated, the fight against all forms of harmful monopoly, an effective competition, a renewed financial system capable of attracting capital and a foreign opening. These reforms fundamentally pass through a living democracy, a stability of legal rules and equity, and policies will speak of social justice. The general conduct of these reforms cannot be delegated to any particular minister or placed in the hands of any particular administration. It can only be carried out if, at the highest level of the State, a strong political will (which only the President of the Republic and the Prime Minister carry) leads it and convinces the Algerians of its importance, hence, with the era of internet, a permanent transparent active communication. Then, each minister will have to receive a personal “road-map” supplementing his mission letter and taking up all the decisions that are within his competence. Given the importance of the measures to be launched and the urgency of the situation, the government will have to choose the mode of implementation best suited to each decision: the acceleration of existing projects and initiatives, the passing of a law accompanied, as soon as it is presented to Parliament, by the implementing decrees necessary for its implementation, and for urgent matters, only decisions by order can be used.

Coordinated actions synchronized over time will require the courage to reform quickly and massively, not of cyclical measures, but profound structural reforms at all levels with a strategic vision for the medium and long term, to rehabilitate strategic planning and management. Algeria can do so within a reasonable time. It has the means. For this, it must relearn to consider its future with confidence, securing to protect, preferring risk to annuity, unleashing initiative, competition and innovation, because the main challenge of the 21st century for Algeria will be the mastery of time. The world does not await us, and every nation that does not advance, necessarily moves back. Delaying reforms can only lead to slow disintegration, impoverishment, loss of confidence in the future because with the exhaustion of the hydrocarbons’ annuity, Algeria will no longer ways to prepare these reforms and will live in the grip of fear, seeing everywhere threats where others see opportunities. This growth requires the commitment of all, not just the State, by organizing solidarity to reconcile economic efficiency and equity through citizen participation and ongoing productive dialogue. The Algerian power has long lived on the illusion of eternal annuity. The majority of Algerians whose income is based on more than 70 %of the hydrocarbon annuity must know that the future of employment and their purchasing power is no longer in the public service and that of companies is no longer in recurring subsidies. The majority of the action is in the hands of the Algerians, who will have to want change and share a desire for the future, learn more, adapt, work more and better, create, share, and dare. The character of power must also change, assuming a progressive overhaul of the State through genuine decentralization around major regional economic poles, implying that it passes from the administering State to the regulating State, reconciling the social costs and the private costs, being the heart of the collective consciousness, by a healthier management of its different structures.

To be part of global growth, Algeria must first establish a true knowledge economy, developing the knowledge of all, from computer science to teamwork, Arabic, French, Chinese, English, from primary to higher education, from nursery to research. It must then facilitate competition, the creation and growth of enterprises, by introducing modern means of financing, reducing the cost of labor and simplifying the rules of employment. It must encourage the development of new areas, including: digital, health, biotechnology, environmental industries, services to the person with the aging of the population. At the same time, it is necessary to create the conditions for a social, geographical and competitive mobility and to allow everyone to work better and more, to change jobs more safely. In order to carry out these reforms, the State and local authorities must be reformed to a very large extent. It will be necessary to reduce their share in the common wealth, to concentrate their resources on the social groups that really need it, to give way to differentiation and experimentation, to systematically evaluate all decisions, a priori and a posteriori. Algeria has to adapt to the fourth economic revolution with important geostrategic implications that are expected between 2020/2030/2040, far from the material era of the 1970s. New information and communication technologies (NICTs), a set of technologies used to process, modify and exchange information, more specifically digitized data that combine innovations in storage and rapid processing of information as well as its transport through digital technology and new means of telecommunication, have implications for political governance, the management of companies and administrations, and an impact also on our new way of life referring to the knowledge and the permanent innovation. Policies, entrepreneurs, citizens, we are all living today in an electronic, pluralistic and immediate communication society that forces us to make decisions in real time. Time control being the main challenge of this 21stcentury, engaging national security, and any maladjustment to these changes would further isolate the country. Every nation can not distribute more than what it produces annually, if it wishes to avoid social drift. The main obstacle to development in Algeria stems from the entropy that must be surpassed imperatively, referring not only to economic factors but also social and political factors, including the profound moralization of leaders and society.

Where goes Algeria, in your opinion? Is not Algeria in danger of depleting its foreign exchange reserves by 2019/2020 and what are the proposals you have put forward to the Algerian government?

Algeria has a respite of only three years to change course and avoid strong social tensions in 2018/2020. So what to do to keep at an acceptable level the foreign exchange reserves that hold the value of the Dinar, because to 10/20 billion exchange reserves, would the official valuation of the dinar be more than 200 dinars for a dollar?

The first solution is a new central and local governance, a moralization of political, social and economic life, the fight against corruption and tax evasion for a shared sacrifice, and genuine decentralization around regional centers energizing the enterprise and the knowledge economy.

The second solution is the rehabilitation of work, source of the wealth of any nation, avoiding this income distribution without productive counterparts, avoiding these fictitious jobs for an ephemeral social peace that veils the official unemployment rate.

The third solution is the improvement of the business climate, the bureaucratization of society, the reform of the financial system, socio-educational, and the thorny problem of landed property.

The fourth solution is that any project must be thought of in terms of cost/quality/competition, so according to international standards by a fight against the extra costs which have taken exorbitant proportions, sometimes 20/30%, and thus to have a strategic vision within internationalized sectors.

The fifth solution is the development for structuring projects, in particular in the infrastructure of the Build, Operate and Transfer (B.O.T), which would alleviate short-term tensions in the State’s currencies budget, but be aware that in the long term, there will be transfers of profits. Remind that the B.O.T. technique relies mainly on the “Project financing/Project finance” model, which is essentially a financing technique where lenders agree to finance a project based solely on its profitability and its own value. In practice, repayment of the loan mainly depends on the cash flow generated by the project itself, so that the project’s ability to generate income that will be used to repay the loan is the cornerstone of the Project financing.

The sixth solution is the relaxing of the 49/51% rule (mixed assessment to date) for non-strategic segments, which need to define precisely what is strategic and what is not, where Algeria bears all the extra costs without the foreign partner often sharing the risks, replaced by a blocking minority.

The seventh solution is a higher export of hydrocarbons, the price of which depends on factors entirely outside Algeria and there, pay attention to false calculations, such as those carried out by Venezuela which is on the brink of bankruptcy. SONATRACH’s revenues at a price of $60 per barrel, the majority of gas contracts whose price is indexed to it in the long term expiring between 2018/2019 are valued at $34 billion, deducting expenses of 20%, resulting in a net profit of $27 billion in addition to current foreign exchange reserves.  At $50, the net profit is $21 billion, and at $40, the profit is $15/16 billion. Between 2016/2020, it is utopia to count on non-hydrocarbon exports (the maturation and the profitability of any project implemented in 2016 would require at least in Algeria 4/5 years in view of the bureaucratic constraints).

The eighth solution is a necessary arbitrage between satisfaction of the internal market and exports posing the problem of widespread subsidies, a source of waste and social injustice, whereas these must be targeted. Algeria is likely to be a net importer of oil to horizon 2025/2030 that needs to invest on gas and especially its transformation, in a win/win partnership. This is because the majority of medium-term contracts expire between 2018/2069, needing to align with the free market, known as market spot, being impossible to compete with Russia (famous Siberian-China gas pipeline) and Iran on the Asian market, no longer having to rely on exports to the USA which themselves export to Europe, the natural market of Algeria being the European market, hence the urgency of the energy transition and a new consumption model based on an energy mix, including renewable energies, taking into account strong international competition.

The ninth solution, which I have advocated to the government for two years, is long-term targeted external debt, but only for segments with competitive advantages of 30/50 billion dollars between 2017/2020, in order to maintain the level of reserves. The World Bank’s forecast of $ 60 billion, according to my information in Washington, from the 2014/2016 data of the Bank of Algeria to the horizon 2018, are realistic.

The tenth solution, the safest, is to have a strategic vision, the tactics to paraphrase military experts to fit into a strategic objective function, which is sorely lacking at present, as the President of the Republic has instructed, is to move towards deep structural reforms without which a diversified economy can not emerge.

In many of your writings since 2009, you have alerted the government to the impacts of lower hydrocarbon prices. You have not been listened to. Can you remind us of your proposals for an energy transition?

We must move from speech to action. There should no longer be any illusion about a barrel’s price higher than 70/80 dollars between 2017/2020. Indeed, taking into account the evolution of rising costs, new global energy changes and competition from new producers, exports and strong domestic consumption induced by new investments in doubling the capacity of power plants that will operate from gas turbines, favored by low prices, Algeria will import oil in 10 years and conventional gas in 15 years. Hence the importance, from now on, of foreseeing the energy transition that I will summarize in seven guiding axes:

The first is to improve energy efficiency because how can be programmed two (02) million dwellings according to the old building standards requiring high energy consumption, while modern techniques save 40 to 50% of consumption?

The second axis is to rethink the policy of subsidies that must be targeted for energy products, File that I directed with the American consultancy Ernst Young and with the managers of Ministry of Energy and Sonatrach of that I personally presented to the Economic Committee of the NPA (National People’s Assembly) in 2008, referring to a new price policy (price of gas sale on the domestic market about one tenth of the international price causing a waste of resources that are temporarily frozen for social reasons). With this in mind, the Algerian government must consider the creation of a National Compensation Chamber, that any subsidy must be endorsed by Parliament for greater transparency, Chamber intended to realize an equalization system, segmenting the activities in order to encourage sectors structuring and taking into account the income by social strata, implying a new wage policy.

The fourth axis, Algeria has decided to invest upstream for new discoveries. But for the profitability of these deposits, everything will depend on the price vector at the international level and the cost, discovering thousands of unprofitable deposits, posing the problem of the profitability of the $ 100 billion announced by the Department.

The fifth axis is the development of renewable energies combining the thermal and the photovoltaic, whose global cost of production has decreased by more than 50% and will be more in the future. With more than 3,000 hours of sunshine a year, Algeria has everything to develop the use of solar energy, or almost. The sun alone is not enough. We need technology and equipment to turn this heaven’s gift into electrical energy. Large-scale production would substantially reduce costs while at the same time promoting a multitude of SME-SMEs, strengthening the industrial fabric from clean energy (ecological industries). The promotion of renewable energies requires substantial financial resources for investment and research-development. The Renewable Energy Technology Fund decided by the Council of Ministers from 0.5% to 1% of the hydrocarbon annuity should be increased to a minimum of 3% in order to allow support between the guaranteed rate allowing the profitability of the investment. Through to the hydrocarbon revenues feeding this Fund, Algeria can avoid making to bear these investments on the low-income consumer, in the same way as Germany where the difference between the guaranteed price and the market price is transferred to the consumers’ invoices via surtax, following its decision to leave nuclear power by 2022. Algeria has received in mid-July 2011 the hybrid power plant in Hassi R’mel, with an overall capacity of 150 MW, including 30 MW from the combination of gas and solar. This experience is interesting. The combination of 20% conventional gas and 80% solar seems to me to be an essential focus for reducing costs and mastering the technology. To this end, the CREG (the regulatory agency) announced the publication of decrees intended to accompany the implementation of the Algerian program for the development of renewable energies. Incentives measures are provided by a proactive policy through the granting of subsidies to cover the additional costs incurred on the national electricity system and the setting up of a National Energy Control Fund (FNME) to ensure the financing of such projects and the granting of unpaid loans and guarantees for borrowing from banks and financial institutions. The Algerian program consists of installing a power of renewable origin of nearly 22 000 MW of which 12 000 MW will be dedicated to cover the electricity national demand and 10 000 MW for export. By 2030, Algeria’s objective would be to produce 30 to 40% of its electricity needs from renewable energy sources. The amount of public investment devoted by Algeria to the implementation of its program of development of renewable energies, by the 2030 deadline, is contradictory: announced once to $100 billion according to the Ministry of Energy, and another time to $60 billion. Indeed, the Algerian government had announced $100 billion in Council of ministers in 2009 and $60 billion by the end of 2015. In September 2016, he announced that, due to the financial crisis, the program would become a national and international public private partnership without announcing the exact amount. The call for tenders for the construction of a capacity of 4 000 megawatts of renewable energy from public-private partnerships will be launched at the beginning of 2017, announced recently by the Algerian Energy Minister Nouredine Boutarfa  at the opening of the energy conference in the framework of the African Investment and Business Forum held in Algiers. The problem is this: will Algeria have absorption capacity, technological control to avoid the additional costs, control of the world market, and will it not be preferable to carry out these projects in the framework of a national, international partnership, and why not in the framework of the integration of North Africa, bridge between Europe and Africa, natural market of the Maghreb and Europe, a continent with multiple challenges that, by 2030/2040, will drive the growth of the world economy?

The sixth axis, Algeria plans to build its first nuclear power plant in 2025 for peaceful purposes to meet a demand for galloping electricity where, according to the Minister of Energy and Mines, on May 19, 2013, the recently created Institute of Nuclear Engineering, must train the engineers and the technicians in partnership who will be responsible for operating the plant. Algeria’s proven uranium reserves are close to 29 000 tons, enough to operate two nuclear power plants with a capacity of 1,000 megawatts each for a period of 60 years, according to data from the Ministry of Energy. The human resource being the key, as the production of all forms of energy and to avoid the massive brain drain that Algeria is experiencing, the services item with the exit of currencies having increased from $2 billion in 2002 to $10/12 billion between 2010/2015, a large part of which destined for the hydrocarbon sector, SONATRACH emptied of its substance, it is necessary to resolve the recurring problem of nuclear researchers (this applies to all researchers) who for years have been asking for clarification of their status, the revaluation of their remuneration and above all an environment conducive to the removal of the bureaucratic obstacles that hamper research.

The seventh axis, the option of oil/shale gas (3rd world reservoir according to international studies) introduced in the new hydrocarbon law of 2013, which I have the honor to lead on behalf of the government and delivered in January 2015. In Algeria, while avoiding clear positions for or against, a broad national debate is necessary, as the risks of groundwater pollution in the South can not be minimized. Algeria being a semi-arid country, the problem of water is a strategic stake at the Mediterranean and African level and arbitration for the consumption of fresh water must be carried out (since new water-saving technologies have not yet been developed despite recycling, what will be the cost, depending on the purchase, the know-how), one billion cubic meters of gas requiring 1 million cubic meters of fresh water to be taken into account in costs (in addition to the purchase of patents), and several hundred average wells have to be drilled for one billion cubic meters of gas, not to mention the short life span of these deposits and the necessary agreement with riparian countries sharing these aquifers. The sixth axis, which falls within the framework of the resolutions of COP21 and COP22, is the climate action that can not be conceived within the framework of a nation, will involve a broad consultation with, in particular, the countries of the Maghreb and Africa. In general, for the Maghreb, including Algeria, water resources are vulnerable to climatic variations. Water and its management are problems conditioning its future, the maximum volume of water mobilizable being deficit by 2020 according to Femise (Euro-Mediterranean network on the MENA region). In the Maghreb region, the negative effects will affect the production of vegetables whose yields decrease by 10 to 30% and a drop in wheat to nearly 40. Thus, climate change could lead to a real migratory crisis. The Blue Gold will be the challenge of the 21st century which, unresolved, could cause planetary wars.

In summary, the transition can be defined as the passage from a human civilization built on an essentially fossil, polluting, abundant and inexpensive energy, towards a civilization where the energy is renewable, rare, expensive and less polluting, with the objective of eventually replacing stock energies (oil, coal, gas, uranium) with flux energies (wind, solar). The energy transition refers to other technical subjects, posing the societal problem.

Read more on the original Herald Tribune

WRITER

International Cooperation to Combat Trafficking and Terrorism

International Cooperation to Combat Trafficking and Terrorism

International cooperation to combat trafficking and terrorism, factors in destabilizing the MENA region by University professor, international expert Dr Abderrahmane MEBTOUL is given on the occasion of U.S. Defense Secretary Mark Esper’s Maghreb tour in Tunis, Algiers and Rabat.

This visit is officially aimed at strengthening ties with these three North African countries to combat terrorist threats. This visit to Algiers follows that of the head of the US Africa Command (Africom) Army General Stephen Townsend. It is not an insignificant visit because the United States of America considers Algeria, through the actions of its armed forces and its various security services,  as a critical player in the stability of the Mediterranean and African region. This is because the stakes in the MENA region foreshadow significant geopolitical and geoeconomic reconfigurations. This region has become a sensitive area with significant rivalries between Russia, China and Europe.  

With recent geostrategic tensions, traffic has increased in particular with the conflicts in Iraq, Syria, Mali, Niger and Libya. Transnational crime refers to organized criminal networks and consequently to terrorism that benefits from the sale of illegal goods. These international illicit markets, anonymous and more complex than ever, generate billions of dollars each year. This threat is worrying, not only for Algeria but also for the world and especially Europe. In the Sahel, armed groups have increased their capacity for nuisance, diversified into terrorists, insurgents, criminals and militias with a convergence that unites these groups. The most troubling aspect of the connection seems to be how the illegal drug trade undermines efforts to pursue the political reforms and development needed to stem the radicalization and rise of terrorist groups in several already fragile African countries. There is a deep vulnerability of states in the region characterized by poor governance and strong population growth. Only the Sahel, which will see its population double in 25 years, and has more than 100 million inhabitants by 2020. This growth affects human security, especially food security in the region as a whole. This is compounded by inequalities that promote radicalization, due to a combination of factors related to the individual, his relationships, his community and his relationship to society. Nevertheless, there are economic issues, where the Sahel is a space with critical departmental resources. Hence the foreign interference that manipulates different actors in order to position themselves within this strategic corridor and to take control of wealth are numerous. Libya, a wealthy country with a population of no more than 7 million, is an example where different foreign actors clash in interposed groups. The Sahelian arc is rich in resources: after salt and gold, oil and gas, iron, phosphate, copper, tin and uranium are all riches feeding the lusts of powers wishing to ensure control. The drug trade, for example, has the potential to provide terrorist groups with recruits and sympathizers among impoverished, neglected and isolated farmers who can not only cultivate on behalf of traffickers but also popularize and strengthen anti-government movements. More recently, with the impact of the coronavirus epidemic, this situation of vulnerability is likely to increase. The world of tomorrow will never be the same again because of the geostrategic implications in the political, social, security and economic fields at the level of North Africa and Black Africa.  In an interview given to the American Herald Tribune of 23 April 2020, the author said: “We Have Witnessed a Veritable Planetary Hecatomb and the World Will Never Be the Same Again.”

In the face of these complex geostrategic situations at the regional level, international coordination is needed, including Maghreb integration, a bridge between Europe and Africa thus contributing to shared prosperity for the Mediterranean and African region to reduce migration flows.  (see two important works coordinated by Professor Abderrahmane Mebtoul and Dr Camille Sari (from the Sorbonne) were published between 2014/2015 at Paris Edition Harmattan “The Maghreb facing geostrategic issues” – volume 1-dealing of institutions and governance (480 pages) and Volume 2 of the economic strands in different aspects (500 pages) bringing together for the first time -36 international experts, military-political scientists, economists, lawyers, sociologists, historians, Algerian-Moroccan- Tunisian- Mauritanian and Libyan- European).

Faced with these new geostrategic challenges that are upsetting the planet, international terrorism takes advantage of the dysfunctions of state regulation and has at least five characteristics in common. First,  on networks often established in large geographic areas where people, goods and money circulate. Second,  command control and communication. Third,  is their need to process large amounts of money, launder them and transfer them across countries and continents. Fourth, criminals and terrorists tend to have private armies, hence the need for training, camps and military equipment. Fifth,  terrorists and criminals in the Sahel region share common characteristics: frequent clandestine operations seeking legitimacy in supporting populations with the use of durable guerrillas to control territory and populations; sixth, contempt for international norms, the rule of law, or the notion of human rights, and a desire to kill those who oppose them; seventh,  these guerrillas also create specialized cells specializing in the use of the media and the Internet to disseminate their propaganda and their demands. Thus, we have different forms of transnational organized crime that is an ever-changing industry, adapts to markets and creates new forms of illicit trade that transcend cultural, social, linguistic and geographical boundaries, and knows no limits or rules.

The combination of these various elements in too complex patterns induces a climate of increasing insecurity conducive to the destabilization of the states of the region with different forms of trafficking numbering eight interdependentFirst,  the traffic of goods amplified for some countries that subsidize necessities such as Algeria, accentuated by distortions in exchange rates. Secondly,  the “black” market for weapons and their ammunition, necessarily derived from the “white” market since each weapon is manufactured in a legal factory, is a theme that allows us to understand the wills of power of various geopolitical actors around the world. Arms trafficking is regulated by states that profit from it and the advantage of arms trafficking for terrorists is that they can both use it and make a profit. The best prevention remains a sales control, a contractual framework, i.e. define beforehand the use of weapons and the establishment of international conventions on the sale of automatic or non-automatic firearms.  Thirdly,  the rise of drug trafficking at the regional level has implications for all of North Africa and Europe where we can identify actors with geostrategic implications where drug traffickers create new national and regional markets to transport their products. In order to secure the transit of their goods, drug traffickers resort to the protection that terrorist groups and various dissents can provide, by their perfect knowledge of the terrain, thus contributing to their financing.

Moreover, according to some intelligence sources, if drug traffickers were a country, their GDP would rank them 20th in the world.  Fourth,    human trafficking is an international criminal activity in which men, women and children are subjected to sexual exploitation or exploitation through labour. Fifth, as we are currently seeing in the Mediterranean through migrant trafficking, which is an organized activity in which people are displaced around the world using criminal networks, many smugglers do not care whether migrants drown at sea, die of dehydration in a desert or suffocate in a container. Each year, this trade is valued at billions of dollars.  Sixth, the trafficking of natural resources which includes the smuggling of raw materials such as diamonds and rare metals (often from conflict zones) and the sale of fraudulent drugs that are potentially lethal to consumers. Seventh,   cybercrime,  which is linked to the revolution in information systems, can destabilize an entire country militarily, security and economically, encompassing several areas, including increasingly exploiting the Internet to take private data, access bank accounts and sometimes fraudulently obtain strategic data for the country. Digital technology has transformed just about every aspect of our lives, including the notion of risk and crime, so that criminal activity is more effective, less risky, more cost-effective and more accessible than ever. Eighth, money laundering is a process in which money earned by a crime or an illegal act is washed away. It is a matter of hiding the origin of the money to use it after legally (investment, purchases). The multiple tax-havens, clearing companies (also Off Shore) allow hiding the origin of the money.

This different traffic linked to the importance of the informal sphere produces malfunctions of the state apparatuses, in fact, governance, the weight of bureaucracy that maintains diffuse relations with this sphere and exchange rate distortions, representing in Africa according to the latest ILO-2020 report – more than 75/80% of employment and more than 20 50% of gross domestic product (GDP)  (Study of Professor Abderrahmane Mebtoul – French Institute of International Relations (IFRI) Paris December 2013- The informal sphere in Maghreb countries and its geostrategic impacts).   The main determinants of informality can be summarized as follows. First, the weakness of formal employment is obvious. This is a factor that explains the evolution of the informal sector in both developed and developing countries. As a result, the supply of formal jobs in the labour market can no longer absorb all the demand as the labour force; particularly the unskilled labour force is growing at an accelerated rate. Second, when taxes are numerous and too high, businesses are encouraged to hide some of their income. Third, the weight of regulation or the complexity of the business environment discourages business registration. Where the institutional framework is not conducive to the creation of businesses in a formal way, entrepreneurs prefer to operate in the informal sector and avoid the burden of regulation. Fourth, the quality of public services provided by the government is an important determinant of the informal sector because it influences the choice of individuals. Individuals active in the informal sector cannot benefit from public services (protection from theft and crime, access to financing, protection of property rights). That is one of the drawbacks of this sector. Fifth,  as a result of economic policy, the primacy of bureaucratic administrative management is required when transparent economic mechanisms refer to governance are required.

In short, Algeria’s security is at its borders; with Mali, 1376 km; with Libya 982 km; with Niger 956 km; with Tunisia 965 km as can be imagined not an easy task  It is because the reading of the threats and challenges facing the world and the region is based on the need to jointly develop a collective and effective response in a strategy on international terrorism, human trafficking and organized crime through drugs and money laundering. All safe for security has limitations that exist dialectical links between development and security. Also, the fight against terrorism implies, first of all, an internal development, linked to new governance of Africa, of regional sub-integrations where inter-African trade according to the UN only exceeds 16/17% in 2019, and to put an end to this inequality where a minority takes over a growing fraction of the national income giving birth to misery and therefore terrorism, referring to the morality of those running the show.  

ademmebtoul@gmail.com

The West Mediterranean, a basin for the mixing of cultures

The West Mediterranean, a basin for the mixing of cultures

The West Mediterranean, a basin for the mixing of cultures and fruitful dialogue between different civilisations.

Following a Meeting of the 5+5 in Marseille 23 and 24 June 2019, this contribution was my intervention as member of Algeria’s delegation headed by the Minister of Foreign Affairs before the various foreign representations and the President of the French Republic as part of The 5+5 Dialogue.  A sub-regional forum for the ten Western Mediterranean countries that take part since its creation, five from the north of the Mediterranean (Spain, France, Italy, Malta and Portugal) and five from the southern shore (Algeria, Libya, Morocco, Mauritania and Tunisia), all working in the hope for concrete results for the benefit of both sides of the Mediterranean western basin.

The Algerian delegation delighted with Marseille, the seat of different cultures and venue for this final meeting where in a few months, we have carried out an important work showing the vitality of civil society in the western Mediterranean. It was not that obvious at the outset.  From April to June 2019, civil society in the western Mediterranean on both sides worked together to bring concrete solutions to the region “through the implementation of concrete projects for human, economic and sustainable development. We hope that all of these reflections and proposals for initiatives will be shared today with leaders at this summit in Marseille to determine which ones will be implemented as a priority, the means and mechanisms to be implemented to forge strong links in all areas around the Mediterranean in order to boost cooperation, based on the conviction that civil society must be fully involved in the definition of a new “positive” agenda. I recall that recently with renowned experts from Algeria, Morocco, Tunisia, Mauritania and Libya and 15 European personalities during 2015 and 2016, we produced under my direction and that of my friend Camille Sari two books (1050 pages), one on political institutions, the other economic in all its diversity entitled “The Maghreb in the face of geostrategic issues published by Harmattan Editions, following on from my contributions on this subject at the level of The French Institute of International Relations between 2011 and 2013 on Europe-Maghreb relations.

The ideas are not new but unfortunately have not been realized. I recall that during a meeting almost similar at the UNESCO in 1993 at the initiative of Pierre Moussa with Mr. Thom Bekki then Vice-President of South Africa on the theme – Africa-Maghreb as part of the strategy Euro-Mediterranean, I had advocated in my speech the creation of both a Euro-Mediterranean university as a place of fertilization of cultures, against intolerance, and a Euro-Mediterranean bank and stock exchange with financial instruments adapted to the situation for the realization of concrete projects by promoting decentralized networks of economic, social and cultural actors, involving international financial institutions and traditional banks.  I reiterate these proposals for this summit of 5+5 in addition to the creation of an economic and social council at the level of the Western Mediterranean (5+5) whose vocation is to bring together the different segments of civil society, experience if successful could be extended to a global civil society bringing together the different regions of our planet in order to combat insecurity, migration and thus promote a balanced and global solidarity space.

It is in this context that I would like to welcome the initiative of His Excellency the President of the French Republic, Mr Emmanuel Macron, to whom Algeria has given its support from the outset. This initiative, it seems to me, is part of the new transformation of the world, ecological challenges, the breakthrough of digital and artificial intelligence to witness between 2025/2030/2040 a fourth global economic revolution based on knowledge, which will influence all international relations, recalling the conclusions of COP 21 and COP 22, which calls on all humanity for a solidarity future. The 21st century will have three strategic actors forging dialectical links: states that must adapt to globalization (the centralized bureaucratic Hegelian state is outdated, the North African states have unfortunately copied the French Jacobin system, a blocking factor for reforms as shown by my friend Jacques Attali, the international institutions that need to be renovated with the massive entry of emerging countries including China, and civil society which will play an increasingly important role more predominant, non-antinomic with the other two players but complementary. The common hope is that this important meeting will be able to turn the Mediterranean basin into a lake of peace, tolerance and shared prosperity based on a win/win partnership far from any spirit of domination, through tolerance and dialogue cultures of which I am deeply attached.

Algeria is a strategic player in the Mediterranean and Africa since it played an essential role in the various meetings in preparation for the 5+5 meeting where it proposed concrete projects with a regional impact, favouring economic interests and the stability of the region, taking into account the transformation of the world. Algeria, endowed with the issue of Energy Transition, proposed projects from civil society, where the work of the Forum in Algiers organized in the form of four thematic sessions, namely: Renewable Energy and Energy efficiency; Electrical interconnections, Natural Gas as the engine of an energy transition and the digital transformation of the energy sector.  It is that energy will be at the heart of the sovereignty of states and their security policies and their economic dynamics alter the balance of power on a global scale and affect political recompositions within countries as regional spaces. The energy transition refers to other subjects than technical, posing the societal problem. It can be viewed as the passage of human civilization built primarily fossil, polluting, abundant, and inexpensive energy, to a civilization where energy is renewable, scarce, expensive, and less polluting with the objective of eventually replacing energies stocks (oil, coal, gas, uranium) with flows of energies (wind, solar). This raises the problem of a new model of growth and consumption: all economic sectors and households are concerned. The important potentials of all forms of energy in the Mediterranean, that of wind or sun, or of fossil fuels present in its subsoil, can make this area contacts between millennia-old civilizations, which have always been subject to political tensions, a new energy region of the world, at the gates of Europe, Africa and the Middle East. Crossroads of three continents, fragile from an environmental point of view, the Mediterranean basin is also a region that provides energy, such as those of the wind or the sun, or fossil fuels present in its subsoil. The energy mix of tomorrow will be electrically dominant, as the electricity market is expected to increase by almost 80% by 2040. Solar thermal for export, combined with photovoltaic for internal consumption needs, is expected to be the most important resource for electricity generation. Hybridization with gas should already allow it to be competitive. Electric highways in continuous current to cross the Mediterranean could be used to meet the growing needs of Europe’s Mediterranean coast and superconductivity completed by liquid hydrogen cooling will be the most medium-term solution to meet the needs of Northern Europe.

After the mixed results of the Barcelona Agreement and the Union for the Mediterranean, let us hope that this summit can lead to concrete results for the benefit of the people of the region. I am convinced only the culture of tolerance will allow our space, in the face of the new challenges of globalization, to meet the challenges of the 21st century in the face of fierce competition, including the breakthrough of emerging countries, the rise of global terrorism threat, the rise of protectionism detrimental to the growth of the world economy, existing a dialectical link between security and development, to the dangers of populism.  Finally, co-development in the Mediterranean via the continent Africa issue of the 21st century can, as I pointed out recently in interviews with AFRICAPRESSE.PARIS and the American Herald Tribune, curb ensure security and avoid destabilization that would have geostrategic repercussions for the entire Mediterranean and African region.

I wanted to stress during this meeting on behalf of Algeria, that a strategic player at the regional level will contribute to the success, based on a win-win partnership, of this enormous undertaking, an old dream, forging our common Mediterranean consciousness.  I quote the conclusion of my speech: “Mr. President of the French Republic, you, who are the age of my son, hope that all together leaders of the 5+5 and civil societies of our region, supported by international institutions, will realize this old dream that I defend with the many Maghreb and European friends, for more than 30 years the Mediterranean, a place of mixing of cultures, tolerance and fruitful dialogue between different civilizations, our common destiny being to do business together.”

Finally, as I pointed out in an interview with Jeune Afrique, Paris on June 24, 2019, far from any vision of disaster, Algeria’s future holds immense hope as at the end of my interview, and I quote: “Our youth and the National People’s Army have shown unwavering maturity. But it is imperative to move beyond the current status-quo before the end of 2019 with transparent elections, as a longer transition period could inevitably lead the country to an economic and social drift. And as in economics, lost time is never caught back, the productive dialogue with concessions on both sides for Algeria being its benefit, accompanied by a profound restructuring of parties and civil society based on new networks, is the only way out of the current crisis.”

ademmebtoul@gmail.com

A Global Revolution in the Information System

A Global Revolution in the Information System

Institutions and businesses face a global revolution in the information system that unlike in the past, results in too much information especially if left unused or mishandled. The consequences of such a situation are debated here by Professor A. Mebtoul of Algeria.

With the new information system, unlike in the past, there is too much information. The credibility of the statistical apparatus and the operative selection of this mass of information could induce problems of adapting to the new global digital revolution. That has an impact on the behaviour of citizens as well as on the management of institutions. It is because the further information and communication technologies (ICTs) have implications for political governance, business and administrative management, and also have an impact on our modern way of life, which refers to knowledge and continuous innovation.

Politicians, entrepreneurs, citizens, we all live today in a society of electronic communication, plural and immediate that forces us to make decisions in real-time. The mastery of time being the main challenge of the century, in this 21st century, committing national security any inadequacy to these changes would further isolate the country. This analysis of these global information and technological changes and the impact on the Algerian economy, I developed at length in the American Herald Tribune of August 11, 2018[1].

The new information system, a global revolution

ICT is a set of technologies used to process, modify, and exchange information specifically digitised data. The birth of ICT is due to the convergence of IT, telecommunications and audiovisual. The development of high-speed Internet, the democratisation of computers and new technologies are the result of lower rates offered by ISPs and growing demand from customers.

The boom in blogs and e-mail is giving ICT an increasingly important place in our society. This interaction between electronics and computing explains why ICT applications can meet the needs of businesses and the state as well as households and individuals. Now subject to the same market laws as any other market production activity, ICT is also a sector where competition is directly played out on a global scale.

The globalisation of companies, markets and financial circuits has not only involved a reshaping of economic structures and exchange flows, but it has also led to the professionalisation of communication and information, as well as an increasingly advanced integration of the phases of product design, creation and consumption. , in parallel with the merger of spheres of activity that were once separated or even opposed. More than opening up to the general public, ICT is revolutionising the internal organisation of the business world. Management software called ERP (Enterprise Resource Planning) manages different tasks such as inventory or treasury, collaborative work.

Through the use of intranet and messaging, the “wireless” or “online” system maintains a permanent link with employees on the go as well as video conferencing, all of this generates better sharing and internal information flow. Thus, the world became a large glasshouse.  The Internet’s infrastructure is now spreading across the globe to create a massive global network thanks to the computing that today allows information to be digitised and new systems managed. The integration of telecommunications, it and audiovisual technology has given rise to the Information Society, which is the subject of specific attention from states and international organisations.

This interest has been increased for more than a decade because of the socio-economic and cultural benefits of new Information and Communication Technologies (ICT): the “digital divide” transcends geographical divides and crosses all human societies. This is because the new means of telecommunications facilitate the exchange and dissemination of knowledge. These new ICTs are therefore profoundly changing the daily lives of citizens, the functioning of businesses and the state. All of this leads to new mental and social representations. This is more obvious at the multimedia level (TV, video on demand, GPS, music) on mobile phones.

On the macroeconomic front, new ICT processes have implications for the value of products and services, which will be more life-cycled, which tends to be shortened and influences productivity gains and ICT-related growth. ICTs also influence scientific and technical research and indirectly enable discoveries that have a new macroeconomic effect. Finally, ICTs have an impact in many other areas such as leisure, culture, health, time management and social behaviour. The advent of the Internet and the tremendous development it has undergone through in recent years have practically put the company, of any importance, at a critical notice to adapt and make the most appropriate and productive use of it. Competitiveness requires it to obtain or give information in real-time; the company will indeed invest the Web and use electronics to face competition and develop its activities. In recent years, ICTs have been able to set up models of work organisation, the main characteristics of which are decentralisation and flexibility. The phenomenon of offshoring of employment is mainly due to the search for productivity gains and opportunities offered by ICT to companies, especially those that are large: online remote work is an everyday reality.

Mastering Economic Intelligence, the Foundation of National Security

Economic Intelligence and its strategic management have become for a nation and enterprise in a particular way, one of the essential drivers of its overall performance and safety. In practice, economic intelligence is a process arising from the intelligence cycle. The information collected helps build a conviction throughout processing and not confirms the erroneous opinion that an actor might initially have.

A formalised need-expression step allows research to be “targeted” by defining a limited perimeter, an essential step to avoid the accumulation of unnecessary data and thus to be equipped with counterproductive information overload. All the fields that complement Economic Intelligence, such as knowledge management, information protection, lobbying, can be grouped into the global concept of Strategic Intelligence. Economic intelligence incorporates two additional dimensions compared to the previous day: decision-making and knowledge of information.

The Economic Intelligence model covers three concepts. We first have data that are numbers, words, current events outside a conceptual frame of reference. Then we have the information, which is the accumulation of data, processed and transformed that become information, validated, and confronted, that begins to make sense. Finally, we have the knowledge that is the set of interpreted information that makes it possible to make decisions. The passages through these three concepts are done in the following way. I want the right information at the right time. For this, it is necessary to define objectives; search and collect data sort and store the data and finally have relevant information. How can I make the information useful? Once the overall information objectives have been set, and research, collection, sorting. Storage missions have been validated, and information must be analysed, results used to highlight aspects that help in decision-making. From then on, the transition from knowledge to intelligence arises. The culture of managers, both political, military and economic, must be changed.

The decision-making system is not a fixed system. It must adapt and evolve; for this, it is necessary to share information, assess the quality and relevance of decisions and the question itself. It is essential to integrate it into the functions of administration and business to make economic intelligence a real competitive advantage. The process approach allows for better coordination of steps to make the most of the information repository for effective action on the administration or the company or its environment through complex interactions. A nation or a company will be better than its competitors if it has, before the others, the right information at the right time, whether it is market knowledge, legal, technological, normative or other information.

A nation or an enterprise must be able to create an information asymmetry to its advantage to build its competitive advantage concerning security, political, economic and technological issues. It is also for this reason that governments are assisting in the education and education of business leaders so that they can use economic intelligence to strengthen their management skills. Hence the support to companies for access to the large volumes of information on international trade held by departmental departments and agencies, the Intelligence and Counterintelligence Services, setting up an economic information service for the benefit of companies engaged in foreign trade. Industrial property in various aspects (patents, trademarks, models, know-how, copyrights, technology monitoring, secrecy, software protection, technology transfer, licensing agreements, competition law, etc.) is becoming a major issue. Many companies try to extract from their competitors’ technologies, customer files, trade secrets, product cost structures, product manufacturing specifications and procedures, and development plans. Since the advent of intranets and extranets, information has spread more quickly and widely across borders, acquiring such strategic value that the challenge now is to appropriate it. This is why currently, the majority of developed states contribute to ensuring the security control of internal databases within companies to deal with data hacks. The motivations of hackers have evolved: from software piracy by amateurs whose main motivation was to steal for their personal use, we have moved to “professional” hacking of an economic nature (misappropriation of money) and industrial hacking, close to espionage. Beyond the technical risks imposed by the Tic, the security of computer data begins with securing and raising awareness of human resources. Communications interceptions have also evolved. From wiretapping, we’ve gone to intercepting e-mail. When an e-mail is sent in the usual way, it is not encrypted and can pass through a dozen proxies that mark the route to its destination. However, for technical but also legal reasons, they keep a copy of the messages received. The information contained in the message and the attached files can, therefore, be read by as many proxies managers. Document thefts occur not only remotely or not accessing a computer or server but also in the most unexpected way by photocopiers. Each time a document is copied on a modern copier, the machine’s hard drive stores a copy. As a result, they have become real computerised storage centres, often without the knowledge of company managers and employees. The most modern copiers and multifunction machines store information before printing it. Computer experts can, therefore, retrieve this information, especially since most of them are usually connected to a network, either via a PC (shared printer) or through a clean IP address.

Algeria faces the challenges of the globalisation of the information society

Every day, new technological advances make previous advances more obsolete.  The challenges – in terms of opportunities and risks of marginalisation – the ICT’s influence on growth and social development. This delay is also due in part to the problem of negative attitudes and attitudes that hinder the implementation of innovative and exciting projects, proposed by specialists. An Algerian study shows that only 15% of Algerian SMEs out of the 321,000 surveyed use information and communication technologies (ICT) in their activities according to the National Agency for the Development of SMEs. In the 2019 ranking of the Bloomberg Innovation Index, which measures the impact of innovation in the economy, it is also based on seven criteria: research and development, manufacturing value-added, productivity, high-tech density, tertiary sector efficiency, the concentration of researchers, number of patents.  Algeria is absent from the top 50.  This absence is due to the lack of use and development of ICT in daily life, notably the absence of E-payment and E-Education.   Another ranking is that Algeria has one of the slowest Internet connections in the world. In the latest “Worldwide broadband speed league 2018”,  which annually reports on the speeds of no less than 200 countries (the ranking having been established based on 163 million tests concerning 200 countries),

Algeria, with a download speed of 1.25 Mbps (Megabits), found itself in 175th place. According to this report, it would take 9 hours and 7 minutes for an Algerian Internet user to download a 5GB film (gigabit). In contrast, this time is only 11 minutes and 18 seconds in Singapore, first in the ranking, with a speed of 60.39 Mbps. Furthermore, according to the 2018 edition released on December 5, 2018, of the Global Knowledge Index, developed by the United Nations Development Programme (UNDP), that measures the multidimensional concept of knowledge based on seven sector indices, Algeria is ranked 104th out of the 134 studied countries. As for the Global Innovation Index, a global ranking of countries based on their capacity and results of economic innovation published annually by Cornell University, the European Institute of Business Administration (INSEAD) and the World Intellectual Property Organization (WIPO) in 2018, out of a total of 126 countries, Algeria achieved a score of 23.87 points out of 100, down two places from 2017.   According to the latest edition of the biennial United Nations survey on India’s 2018 E-Government Development in the world, published on July 19 2018 “as a general rule, there is a positive correlation between the country’s income level and its ranking in electronic administration. High-income countries have very high or high EGDI scores. It is not universal, however. Twenty-two upper-middle-income countries and 39 lower-middle-income countries have EGDI scores below the global average of EGDI, and ten countries in the lower-middle-income group have scores above the global average. On the other hand, low-income countries remain lagging due to the relatively low level of development of all components of the index.”

For national security reasons, Algeria’s information system needs to be redesigned 

Statistics are now abundant at all national, regional and global levels, and playing an increasingly important role in our societies and public administrations. They inform public debates, policy formulation and business decision-making, thus raising the issue of the intrinsic quality, compilation and selection of information. In Algeria, however, this information-gathering system needs to be redesigned.  Ideally, it would be a Ministry of the Economy with a strategic planning directorate and a National Statistics (ONS) that like the INSEE in France, Great Britain, Germany or the United States of America, is an independent body with an analysis department. It must be part of another institutional organisation that is moving towards the consolidation of ministries for greater efficiency and budgetary rigour, economic regionalisation.

Subject to specific objectives, with several local authorities and institutions not telescoping each other nor making information opaque for reasons of individualised strategies.  What are short-term parameters can become variable in the medium term, and what is the strategic sector today may not become so tomorrow. Of course, the ONS not meant to assess current public policies delivers what others interpret its figures by recognising that better inter-institutional coordination between the various and abundant administrative sources and the board would be desirable, calling for more “coherence and integration”. It is because the ONS starts from the micro-economic data of administrations and companies by consolidating them at the macro-economic level. This inconsistency, fostered by an inconsistent pricing system in which administered prices and market prices compiled together, does not allow us to identify the sincerity of the accounts and can lead to mismanagement and even corruption. If the essential information is biased, it gives results at the global level that does not reflect reality. And this is what we see with the crumbling of the information system, where the polling bases are different from one organisation to another resulting in data that contradicts the reality. Therefore, survey methods need to be standardised, whether comprehensive or surveyed. Above all, information must be democratised by opening up the massive media to a broad and contradictory economic debate, as no one has a monopoly on nationalism. However, monetary policy errors can amount to losses of tens of billions of dollars to the country. The crumbling of the information system explains the contradictory discourses of several senior officials; entropy has reached an unacceptable level in recent years.

For transparency, the foundation of good governance, accelerate the digitisation of institutions and companies

The 21st-century world is on the cusp of a fourth economic and technological revolution, based on two fundamentals of good governance and knowledge economy.  This revolution, with the trajectory of the digital transition and the energy transition, means that any nation that does not advance is going backwards, that there is no static situation. The majority of paper newspapers are likely to disappear by 2020/2025, if they do not adapt to the new revolution, replaced by online sites that give real-time information. I recall that, as Director-General of Economic Studies and first advisor to the Court of Auditors, I was appointed by the then Presidency in 1983 to deal with the issue of demurrage. This issue is still relevant and made urgent, given budgetary constraints. These numerous raft boats cause large foreign exchange outflows. I had suggested, about the services of the Ministry of Commerce, of the finances and various ministerial departments concerned, the urgency to combat both demurrage and overcharging the establishment of a value table by setting up a networked and real-time information system between ports, customs, banks, tax services and connected to international networks to know the real-time prices of imported goods. 

“The statistics available are not accurate; those who oppose digitisation do not want transparency”:  Abdelmadjid TEBBOUNE, President of the Republic.

As the President of the Republic has pointed out, those who oppose the digitisation of institutions and businesses do not want either to move forward nor plan for a future in full knowledge of all potential possibilities in as clear an atmosphere as can be had.  An example would be the management of ministries, governorates (wilayas) and the majority of services that still follow the methods of the 1960s/1970s with techniques. The urgency of transparency in the management of SONATRACH which provides 98% of the country’s foreign exchange revenues, the financial system as a whole, which must make its transformation, being currently, mere administrative counters, place of interest struggles and distribution of the oil rente. A rentier oligarchy has used, the customs system for overcharges for lack of a table of value linked to the international network, (price, weight costs/quality).  The present state system that promotes land squandering; the undigitised tax system that leads to tax evasion, the public banking system that allows enormous loans without real guarantees and interest rate bonuses, with collaboration, without correlation of business would require a radical change.  In this context, bureaucracy, the legacy of an administered economy, is one of the heaviest constraints and whose eradication is necessary.  The new system should instil the dynamics of development in the context of a controlled liberalisation reconciling economic efficiency and social justice.  The latter not being antinomic with efficiency, on the contrary, would prompt the mobilisation of citizens for a new Algeria. The less different the reforms, the more we will deplete the foreign exchange reserves, and this crisis of governance risks turning into a financial, economic and political turmoil with the risk of regional destabilisation.  ademmebtoul@gmail.com


[1] “Dr. Abderrahmane Mebtoul: “Algeria Still Faces Significant Challenges” and three parts in the international site AfricaPresse Paris on the challenges of Algeria 2018/2020/2030 as follows:

  1. “Algeria’s development involves the reform of the political system”
  2. “There is an urgent need to adapt Algerian political parties, for the majority related to rentier interests” and
  3. “No development for Algeria without strategic vision of the transition to a non-hydrocarbon economy”
Development Overruns of an Algerian Motorway

Development Overruns of an Algerian Motorway

In an article titled Dr. Abderrahmane Mebtoul: “Algeria Still Faces Significant Challenges” written by Mohsen Abdelmoumen of the American Herald Tribune, a question relating to the development overruns of an Algerian motorway that crosses the country from its western Moroccan border to its eastern Tunisian one was tabled at the university professor.
In few words, the East-West motorway project was launched in 2009. Costing $11.2bn, it is considered as Algeria’s most important road project, and probably the most extensive public works project in the world.
It was scheduled for completion in the fourth quarter of 2013 but was delayed by about a year. Some penetrating stretches to link coastal towns and seaports to this motorway are still pending to date.
The Algerian Government financed the project as part of a $60bn national economic and social recovery programme started in 2005. , and the works have generated over 100,000 jobs.
The project will cut travel times and provide better and safer access to the north of the country, stimulating economic development..

The picture above is of CREECUSA .


What are the reasons for the delays and additional costs accumulated on the East-West motorway and how administrative deficiencies can be explained?

The east-west motorway has a distance of 1 216 km with a cross-profile: 2 × 3 lanes where 24 Wilayas (Governorates) are served by having provided rest areas, service stations, truck stops and maintenance and operation centres of the highway. The East-West motorway has not changed the national road landscape since it has mainly followed the route of the National 4 and 5, which rally Algiers to Oran and Algiers to Constantine. On the other hand, it risks upsetting the economic life of the 19 Wilayas directly crossed and 24 served. In a country where 85% of trade is carried out by road, the impact is likely to be felt quickly. Eleven tunnels were drilled on two three-lane track, and 390 engineering structures have been completed, including 25 viaducts, to join the borders Tunisian, in the east, and Moroccan, in the west. The equipment program consists of the construction of 42 service stations, 76 rest areas (motels, parking areas, playgrounds, etc.), 57 toll stations, 70 interchanges and 22 ‘gendarmerie’ guard posts, as well as guard points of the Civil Protection. To that, it will be necessary to foresee the maintenance costs because one often forgets that a road is maintained and, according to the international standards, it varies between 84,000 Dollars to 135,000 Dollars/year and per km. This raises the problem of toll costs. Programmed initially at 7 billion Dollars and to be delivered in 2010, the last segment delivered at the beginning of the year 2019 with 12 lanes to connect the east-west motorway to the Highlands highway project with a cost estimated by the government in 2017 at about 13 billion Dollars for 1,216 kilometres, which sets the average completion price of one kilometre of highway at nearly $11 million. To the $13 billion already spent, annual maintenance costs will have to be added. These amounts will, no doubt, be higher than average because of the numerous malfunctions committed during its implementation and the delay in the transition to the paying plan. Motorists will pay for travel on the East-West motorway starting in 2018. According to the project prepared by the Ministry of Public Works and Transport, the toll on this highway will be calculated on the basis of a tariff of 1.2 Dinar (DZD) per kilometre. Some directors of public works justify the delay in delivery of the East-West motorway by problems related to the compensation of landowners who have been expropriated. To illustrate their comments, some of these directors stated that in the city of Medea, the price per square meter does not exceed DZD450 (average price DZD115 = one Dollar in 2017) and between 700 and DZD1,000 in Bejaia. In the Wilaya of Tizi-Ouzou, the services of the estates offered the expropriated sum of DZD1,200 per square meter and between 700 and DZD900 in Bouira. A large part of the owners refused the proposed price. To return to the cost of the East-West motorway, any reliable project must clearly highlight the hierarchy of objectives, the expected results by sector, scope, performance indicators, indicators of specific objectives and deadlines, and finally the risk hypothesis. However, the people in charge of this project stick vaguely to the technical description without worrying about the costs, which should in principle be the main concern of the government, the minister, and the managers. For international comparisons, variations are depending on whether there is a constraint or not, but it is necessary to avoid risky comparisons and to compare only what is comparable. In Algeria, all the factors are favourable: the labour force is at least 10 times less expensive than in Europe; there is relatively little bad weather; the materials used in large quantities, aggregates (tuff, sand, and gravel) cost practically only their extraction costs and crushing, fuel is 5 to 7 times cheaper, rents, electricity and gas too, the temporary occupations of land that cost fortunes in Europe are not even paid in Algeria when it comes to the public domain; but there are administrative problems and bureaucratic procedures, not to mention the expropriations and demolitions that are sources of extra costs.

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