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Cooperation between the United States of America and Algeria

Cooperation between the United States of America and Algeria

“Lesson in geo-strategy in the United States of America”

Few years ago, in a trip in the United States from Washington to Chicago, South Carolina, Virginia and New York, I met important political, financial and economic personalities that I shall always remember, in particular a discussion with a senior official of the Department of the Treasury in Washington. I told him “there must be cooperation between the United States of America and Algeria and a strengthening of this cooperation in the economic and security fields and beside that I am wary of some of the French positions.

His answer was the following and served me later on as a lesson; I quote as of my memory:

“Mr Mebtoul, you are a serious intellectual, so let us avoid any emotions…  There are no differences of policy between the United States and Europe including France but only tactical divergences. North Africa and particularly the Maghreb region formerly French colonies, the USA work closely with the French economic and security services because of their knowledge of this region and the US do take any of their comments into consideration. . .”

“As for your country, Algeria, we consider cooperation with it as strategic and this is in all areas.”

In conclusion, may be a few small changes, but in the light of experiences, ikl is unlikely, foreign policy in its broad directions and constants of the States United of America and the France change for electoral reasons.

In conclusion, perhaps a few small changes, but in the light of experience, it is unlikely that foreign policies of the United States of America and France would change for electoral reasons.

That was then and in the light of the recent statements of some US officials, in the face of the new global geostrategic changes, the prospects for both safe and economic cooperation between the new administration of the United States of America and Algeria should be based on shared prosperity.

We must never forget that the power of a Nation and its diplomatic efficiency are based on its economy and that the United States has a global strategy; American officials I contacted speak about the necessary stabilization of North Africa and give priority to the integration of the Maghreb. The Deputy Under-Secretary of State for Egypt and the Maghreb, John Desrocher welcomed Algeria’s efforts on February 3rd, 2017 in the stabilization of the region and “its quality contribution” towards the resolution of the Libyan crisis and stabilization of the region, pointing out that the American economic operators could contribute to this effort as long as Algeria carries on “improving its business climate and diversify its economy”.

Cooperation.  In the security and economic fields only ? 

Due to the weakness of Trade in 2015, for several factors, including the economic downturn in China, a severe recession in Brazil, a drop in oil and other commodity prices and the volatility of exchange rates, according to the IMF and the WTO official statistics, world trade in volume growth remained slow in 2015, at 2.7%, and was roughly equal to that of the world GDP, which amounted to 2.4%.  Despite positive growth in the volume of trade, the value in current Dollars of exports of goods has decreased by 14% in 2015, falling to $16,000 billion, due to the decline of 15% of the export price.

At current prices, the gross domestic product (GDP) of the USA for a population of 324 million people, in the 4th quarter of 2016, reached $18,861 billion with a soft growth in 2016 according to the Department of Commerce as of end January 2017 of 1.6%. For 2015, the GDP of China was $11,385 with relatively lowest growth in 15 years (6.5% in 2016), Japan $4,116, Germany $3,371, the UK $2,849, France $2,488, India $2,183, Italy $1,819, $1,800 Brazil, Canada $1,573, South Korea $1,393 and Spain $1,235 billion. The European Union including Britain, with a GDP of $18,081 billion for a population of 510 million, remains the world first economic power; its rate of growth in 2016 has been higher than that of the USA.  Thus the USA and Europe for less than a billion people represent more than 40% of global GDP estimated at $75,700 billion in 2016.  Yet to have an objective assessment, the GDP per capita should be considered.

Meanwhile, the United States economy remains a key driver of growth for the global economy. Fluctuations in its GDP, the level of its international trade and monetary policies are followed closely by world Governments and international financial markets. Major trading partners of the United States are China, Canada and Mexico, the two partners in NAFTA, Japan, Germany and the United Kingdom; Germany and China ranking second and third, respectively. The United States remains the first trading nation (in value), their imports and their exports.

Commercial opportunities between the U.S. and Algeria outside hydrocarbons, Algeria being after all interested in the transfer of technical know-how and managerial expertise with the presence of important American companies, so as to promote cooperation especially in the field of new technologies, industry, services, agriculture and the building and infrastructure sector not to mention training. In 2013 a contract between the Algerian SONELGAZ group and the US General Electric (GE) was signed for a partnership in an industrial complex of manufacture of gas turbines in Algeria for an investment of $200 million. A company was agreed, as owned 51% by SONELGAZ and 49% by GE, will produce between six to ten turbines for gas by year 2017 — a capacity of 2,000 MW, part of which could be exported. In addition, GE won a supply contract of turbines for gas and steam with a capacity of 8,400 MW for an amount of $2.2 billion, intended to equip six power stations that Algeria plans to build by 2017.

In 2015/2016, directly and indirectly the Algerian economy was dependent on hydrocarbons to 97% of receipts in foreign currency and exports of nonhydrocarbon at 6% being made up of more than 60% of derivatives of hydrocarbons. The nominal GDP of Algeria, deflated by the Dollar that averaged of DZD109/110 per Dollar is projected to be $166 billion in 2016 against $172.3 billion in 2015, according to forecasts by the IMF for a population exceeding 40 million inhabitants.  On the trade balance as a customer in 2015, the United States represented $1,977 billion, a drop 59.04% from 2014 and as provider $2,710 billion, down from 5.48% in 2014. While exports to the USA in 2012 (source Algerian Customs), were estimated in 2012 at $10,778 billion and imports of $1,651 billion.

The United States, future energy competitor to Algeria?

Energy security is the paramount economic strategy of the USA which imported between 2011/2012 nearly 20% of its energy needs primarily from Mexico and Venezuela, the Gulf countries and few countries of Africa including Nigeria and Algeria.

What was the impact of the recent rebound of US production of oil and gases, led by technology advances that allowed extracting these non-conventional resources, and reduce their imports of oil and gas and recently in 2016 to become exporter to Europe?

The developments of unconventional resources in the U.S., such as shale oil and gas, have a major impact on prices. In view of these forecasts, the country should reach the Holy Grail of energy independence by 2020. Self-sufficiency in energy announced by the first world power will no doubt have geopolitical consequences. In the first place, the U.S. policy in the Near and Middle East will probably undergo few strategic modifications insofar as changes in the factor “energy dependence” or more precisely, “securing access and energy supply” will become less sensitive.

This will lead to a redefinition of the American national objectives, where the United States, which was in the recent past, the largest importer of oil in the world, did not hesitate to trigger or promote wars and conflicts in Africa, in the Near and the Middle East or Latin America, in order to secure their energy supply. Now soon be self-sufficient, their intervention in these areas will be based on new considerations, including that linked to the growing influence of China. This new situation can only lead to geostrategic upheaval in both political and economic arenas especially of the Algerian economy.

The development of unconventional gas in North America has closed this market to Algerian exports and weighed on prices in the spot markets, which raises the question of the profitability of exports of LNG. The ‘profitable price’ of an MBTU, the unit of measurement of the gas industry, would be for SONATRACH from $9 to $10 for the pipeline and $13 to $14 for LNG. Could Algeria that has averages LNG units size with relatively high costs compared to its competitors, requiring significant transport costs, compete to its supply to Asia, with Russia, Iran and even Qatar?

Security co operation

Moreover, the data sheet as of end of January 2017 of the Department of State of the new American administration notes that Algeria is a “strong partner including its intense work in the field of counter-terrorism and its efforts for the stabilization of the region of the Maghreb and the Sahel… These analyses come together with classified documents of the CIA and FBI and a document composed of 6 chapters of the security of the U.S. Congress research service dealing essentially with the question of Government and politics in Algeria, developed between 2013/2014 whereby the USA recognize that Algeria’s military power and dominant economy in the Maghreb region represented a key partner to the United States in its efforts to combat international terrorism

This cooperation in the area of security has taken such intensity that the leaders of the two countries have decided to structure them in a formalised framework and give a regular character in the bilateral consultations, for a better organization and visibility of the relationship between the two countries. It is for this purpose that the strategic dialogue Algeria-USA was established and the first meeting of which was held in October 2012 in Washington, after the 5th session of the 2 countries joint military dialogue. The United States considers this strategic dialogue as “the Foundation” on which the United States and Algeria aim to strengthen their future relations in political, economic, cultural, scientific and security areas. This rapprochement between the 2 countries therefore translates the convergence of views on issues of regional and international interest.

But let us not forget that the United States has a global strategy that does not fundamentally differ from that of Europe (existing tactical differences) with as a base its economic interests and its insistence for the integration of the Maghreb, under segment of the Africa continent, whose economic control through rivalries including China will be a major challenge of the 21st century.

Diversify the economy so as to establish the effectiveness of Algeria’s diplomacy

Protectionism and the advent of populist regimes are likely to accelerate this trend with a slow growth of the world economy with a negative impact on the price of oil, accentuated by the new US policy of subsidizing non-conventional energy, distorting all forecasts of OPEC countries strategy which incidentally doesn’t represent in 2016 more than about 33% of the world marketed production.

 We must not overlook the fact that the hydrocarbons based rentier economy would not be a guarantee of development if it is wasted and that the power of a Nation and diplomatic effectiveness were based on its economy. Recent events, in Libya, in Mali, in the Sahel, in Syria, the important discoveries of oil and especially gas in Eastern Mediterranean and Israel security to which the USA place strategic importance, foreshadow important geostrategic compositions at the level of the region. The USA intend to play a major role in this reconfiguration and Algeria, subject to improved governance and greater realism in new international relations, is a key player for the stabilization of the region

Adaptation strategies are required both in the economic, the political as well as in security policies, taking into account the new fourth global economic revolution which looks inevitable, at horizon 2020/2030, away from the outdated patterns of the mechanical age and the building and infrastructure development models of the 1970s / 1980s.  That might involve some sort of a cultural revolution in the Algerian leadership and would certainly raise the urgency of the transition from a rentier economy to an economy away from hydrocarbons, that would be dependent on good governance, as based on enterprise and knowledge and to glimpse at the start of the energy transition (new model of consumption) taking into account the strong domestic consumption, where widespread and poorly targeted subsidies risk to bring a premature exhaustion of the rentier cushion by year 2025/2030 with a population exceeding 50 million inhabitants.

 

Conferences and debates of Professor Abderrahmane MEBTOUL, who is guest of MaghrebEmergent‘s RadioM in Algiers on Wednesday 08/02/2017 – 9:30am – 11:30am  where he will be discussing before a panel of journalists ‘the socio-economic situation and prospects of the Algerian economy and economics of the future legislative election set for May 04, 2017’.  He will also be discussing “Algeria facing the fourth economic revolution and the energy transition” and questions of national and international news.

– All are cordially invited .

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Informal Meeting of OPEC in Algiers this September

Informal Meeting of OPEC in Algiers this September

Miracle solutions are not expected . . .

The oil price fell to a level never reached in more than four years losing more than 60% as of 2014, though rallying slightly a month earlier; the Brent managing $47,19 and the WTI $44.72 whilst at the same time, the Dollar lost some ground to the Euro.  An Informal Meeting of OPEC in Algiers this September was envisaged in this context.

opec-map-606-1024x807

The Organization of Petroleum Exporting Countries (OPEC) 14 member countries have agreed to meet however informally on the side-lines of an energy forum scheduled for September 26th through 28th in Algiers.  Miracles are not expected but potential solutions would rather depend on an agreement between Saudi Arabia and Iran, on the one hand, and on the other between Saudi Arabia and non-OPEC Russia and the US.

Avoiding to both reason on a linear model of consumption or to making risky predictions and whilst some experts predicted the price of $70/80 by late June 2016, misleading public opinion (1), I would like to think that we are in presence of 12 basics as follows :

1 – OPEC, composed of Algeria, Angola, Ecuador, recently reintegrated Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela, whilst having the largest world conventional oil reserves would represent only a third of the world’s marketed production.  Algeria and Venezuela, campaigning for a reduction of the quotas by 2 million barrels per day (2 Mb/d), are marginalized leaving Saudi Arabia and the Gulf countries a freehand in the cartel strategy.

2 – The non-OPEC countries’ strategy of expansion represent 65 to 67% of global market.  Russia home to Gazprom oil & gas main producer is in need of finance, and tensions in Ukraine do not seem to have affected its exports to Europe where its market share for gas was 30% between 2014/2015.  It is well known that Russia has taken market share when OPEC was reducing its quotas.  Any decrease in the production of the non-OPEC countries for productivity’s sake, would impact the supply side and in case of expansion of demand would act positively to raise prices and vice versa.  The countries of the Gulf, notably Saudi Arabia, confirmed on several recent occasions that they would reduce their production only if producers outside the cartel, notably Russia whose production lately reached record levels, also embarked on this path.

3 – Slow growth in the world economy, including that of the emerging countries, Argentina, Brazil and India between ½% and China’s 7%, mainly due to the increase in interest rates with the construction industry contributing to more than 25% of its GDP, in order to pre-empt a real estate bubble, would explain present demand.

4 – The emergence of American shale gas/oil did upset the world energy map; with a production from 5 million barrels a day to over the current 10, impacting supply and turning the US in July 2016 into an exporter to Europe.  Cost of Saudi production however is between $5 and $10 per barrel (that of Iraq’s below $5) against that of the US marginal shale gas deposits that is $40 to $60 and that of the larger deposits at $25 to $40, thanks to new technologies helping to substantially cut the costs by more than 30 to 40% in recent years.

5 – Rivalries within OPEC with respect to quotas, include Iran-Saudi Arabia, and for purposes of market share objectives, would increase their supply.  Saudi Arabia with more than 35% of OPEC’s as well as 12% of the world’s production could be the only producer country in the world today that is able to weigh on world supply, and therefore on prices, not existing for geostrategic reasons of rivalries with the USA.  Eventually, the equilibrium price will be basically determined by an agreement between Saudi Arabia and the USA.

6 – The arrival of several new producers must be taken into account on the supply-side, including Libya ranging up to 2 million barrels a day, of Iraq with 3.7 million barrels a day (at a cost of less than 20% compared to its competitors) that can go to more than 8/9 million, and Iran with more than 5/7 million in the medium term, and in a very short period exceeding 3.5 million barrels per day.  Moreover, with new discoveries in the world, especially in offshore sites particularly in Eastern Mediterranean (20,000 billion m of gas) and Africa’s Mozambique that could have the third largest world reserves.  All this is amplified by new technologies that allow the reduction of the cost of the marginal deposits.

7 – We are presently seeing new technologies for energy efficiency in the majority of Western countries, with a forecast of 30% reduction thus questioning Algeria’s continuing regardless of that with its two million housing units development using old methods of construction.

8 – Trends are for a new division and international specialization with concentration of high-intensive energy manufacturing in Asia with 65% of world consumption by 2030 notably in India and China.  Customer-supplier relationships will be to their advantage to have comparative advantages pushing prices down as does currently China for Venezuela and Ecuador.

9 – The upward or downward level of US stocks would intensify speculation of traders in the stock markets.

10 – Terrorism interference in oil and gas fields in Iraq and Syria with flows through to the black market and Turkey at $30 a barrel has some transient and marginal consequences on prices.

11 – Any variation in the exchange rate between the Dollar and the Euro would impact the oil price at between 10 to 15%, although there is no direct linear correlation.

12 – The determining factor in the future will be the energy transition between 2020 and 2040.  It is a strategic mistake to reason on a linear consumption model and make risky predictions without sticking to the fundamentals.  Each year in the world, $5,300 billion ($10 million per minute) are spent by all States to support fossil oils, according to estimates of the IMF in its report for the COP21.  However, it seems that the majority of the leaders of the world have become aware of the urgent need to go for an energy transition.  In the case of a mutation of the model of energy consumption at the global level, (the future in 2030 being hydrogen), this will influence fossil energies pricing down.  .

According to experts of Citigroup, the Saudi strategy preparing for the energy transition, is investing massively in renewable energy so as to reduce its dependence on oil; $2,000 billion could also be seen as a precursor sign of OPEC weakness, as being able of acting sustainably on prices.  Rebalancing also of the market will depend on a series of factors that are outside of OPEC countries.  The financial tensions in many oil-exporting countries reduce the capacity of these countries to mitigate the shock, resulting in a significant decline in their domestic demand.

A spectacular rise in the price of oil that is expected not to occur, we anticipate to have four scenarios :

  • The first scenario is about an expansion of the world economy including China’s where the oil price approaching $60/65 between 2017/2020; no one can predict beyond that but all depend on the energy mix between 2020/2030.
  • The second scenario is moderate growth, and the price would fluctuate between $50/60.
  • The third scenario, with low growth course would fluctuate between $40/50.
  • The fourth scenario a global crisis where the price would plunge below $ 40.

 Dr. Abderrahmane Mebtoul, University Professor, Expert International,  ademmebtoul@gmail.com

Translation from French by Microsoft / FaroL  faro@farolco.onmicrosoft.com

(1) – Professor Abderrahmane Mebtoul, PhD (1974) – Director of Studies at Department Energy/SONATRACH 1974 / 2007.  Audit director, February 2015 on the risks and opportunities of the shale gas assisted by 23 international experts.  – See study by Professor Abderrahmane Mebtoul, published at l’Institut des Relations Internationales (IFRI Paris France November 2011) in French – “Maghreb cooperation / Europe geostrategic challenges”–“for a new strategic management of SONATRACH» – revue international HEC Montréal Canada (2010) – International Conference ADAPES / French Parliament, November 2013 -“new mutations energy global’ – ‘Gas strategy of Algeria facing global changes’ review International Gas today (Paris France – January 2016).

Also – See different contributions in MaghrebEmergent.com  (2014/2016) and Interviews of Professor Abderrahmane Mebtoul, on :

  • CNN Arabic on August 25, 2015
  • The weekly London based Arab Economic News
  • Al-Arabiya TV, London, August 27, 2015
  • The Spanish official agency E.F.E., main agency in Spanish, «Global energy changes, impacts of the decline in the price of oil on the Algerian economy and prospects»
  • RFI (Paris, France in December 2014) “what Algeria must do to avoid the crisis”
  • Report of the IMF/Bank world level of foreign exchange reserves 2018 and impact of the informal meeting of OPEC in Algiers
  • ENNAHAR TV on August 13, 2016
  • El Chaab on August 13, 2016
  • 14 August 2016 to El-Bilad daily and Le TempsDZ
Facing the fourth industrial revolution

Facing the fourth industrial revolution

What path of development for the 2016 to 2030 Algeria ? 

I would like to thank Mr Prime Minister for extending his kind invitation to me as an independent expert, to the Tripartite meeting of June 5th, 2016, where in its final resolution, it adopted the proposal of a follow-up Committee that I had already suggested back in November 2014 and which I recently renewed prior to the start of the tripartite. Algeria, Facing the fourth industrial revolution, and how to cope with its imminent upcoming, and during the meeting, the Prime Minister had a discourse of truth, avoiding both the free pessimism, as well as being lulled into complacency,   reiterated that the country has, though subject to certain strict conditions, all potentialities out of the crisis.

We must nevertheless be aware of the seriousness of the situation: the cash-cow milking of SONATRACH days are over; I’ll stick to the growth model that engages the future of the country, hence its security.

1.– The growth model must clearly be the future challenge of Algeria which is to grasp the dialectical relationship between the progressive evolution of the State – annuity – market functions in the context of globalization, of the fourth industrial revolution and the new global environmental challenge. The rapport must be synchronized in time, by dated and precise quantification.  It should not be based on a deterministic as if in linear vision and Algeria mastered all endogenous and external factors by offering a unique solution.   As from my experience in international institutions, and as a universal rule, any realistic operational model, engaging the future of any country should provide decision-makers, and the society at large, assuming a social and political consensus, two to three scenarios, that depend on the evolution of different energy, economic, geostrategic mutations of a turbulent world.

Then, the model must, as a factor of adaptation to these changes, take into account the internal interactions between macroeconomic and macro-social frameworks, that themselves evolving through demographic pressure, atomisation of the family and the tribes, cultural impact of new technologies are shaping new behaviours.  The purpose of the new governance, pillar of the new model of growth, must be to relieve all enterprise, be they public or private, local and / or international, without any distinction as stipulated in the new Constitution by the reform of the institutions (Decentralization with involvement of local actors), of the socio-educational system (improvement of the level of the knowledge-based economy), of the financial system (one-stop shops), and by the lifting of the constraint of land.  Ultimately it is the rehabilitation of the competition, and moving far from any monopoly detrimental to both the economic sectors and all collective services through outsourcing.

All this implies a change in the functions of the State.   According to the different budgetary constraints, (far from the Venezuelan type of populism that lead to bankruptcy of all State social welfare), it will be to reconcile economic efficiency with that of equity as per all economists whereas politicians speak of social justice policies.   It is a social model that should be adapted to the new situations (Labour Code reconciling flexibility and fairness, with management of pension funds to prevent their implosion).  This is by any mean unique to Algeria hence the importance of social dialogue.

2 – The repayment of the debt in advance which has been negotiated by the Ministry of Foreign Affairs, currently allows a margin of flexibility.   Per the (central) Bank of Algeria, the exchange reserves of Algeria were $162.2 billion by end of 2010 against $148.9 billion at end of 2009, of $193.3 billion at end of June 2014, and $185,273 billion in late September 2014, $178.9 billion dollars at end of 2014 and $143 billion by end of 2015 and the Prime Minister announced that in May 2016 there is a relatively low external debt of $136 billion.   Due to the weakness of internal productivity and production, the value of the Dinar is correlated with 70% of foreign exchange reserves that themselves come mainly from the production of hydrocarbons.   At ten billion Dollars of foreign exchange reserves, the Central Bank would value the Dinar at more than DZD200 a Dollar with an impact on production costs on both public and private companies alike as well as on the purchasing power of households all outsourced from abroad.   Therefore, it is a matter of maintaining the level of Reserves Exchange at a tolerable level.   And this is how the issue of well-understood debt comes in where only competitive productive sectors should be concerned.   You want to draw at any price on reserves could inevitably lead to a creeping devaluation of the Dinar.   Thus for SONELGAZ, according to the APS as of June 5th, 2016, SONELGAZ Group is in negotiations with foreign creditors to contract credits for the purpose of financing its investment as, according to its CEO: “deficit is huge, we have no other choice but go to external debt. . . .   For the moment, there are proposals, but we expect the financial conditions that will be certainly costly because despite the implementation of the bank overdraft bought back in late 2010 by the Treasury for DZD370 billion together with granted facilities for the financing of investment, the low income of the Group has generated, according to this assessment, a deficit of DZD98 billion, in 2015″.

Furthermore, we must be rather pragmatic avoiding decisions based on ideological reasons.   Let us remember the Romanian communist experience, of one zero debt but an economy in ruins.

What is actually offered by those who are against targeted debt in case of the oil price fluctuating between $40 to $50 a barrel, the price of gas (more than 33% of the revenue of SONATRACH) being linked to oil, Algeria running as based on a more $90 per barrel in 2016 and as compared with the $110 of between 2014 and 2015 according to the IMF, but take advantage of the current low rates offered by the international institutions at levels fluctuating between 0 and 1%  ?

3 – The economy war that some want to apply today, which was advocated in 1992 was a failure and has led the country right to the suspension of payments and rescheduling in 1994.   Renewing this experience in 2016, would disconnect from both local and global realities those who defend the interests of Rentier annuity under false nationalist discourses can only lead to depletion within three years of foreign exchange reserves, and return to the IMF between 2018/2019 with implications of social and geostrategic tensions at the level of the region.  While the Algerian people have been traumatized by recourse to the IMF in 1994, while it should analyse the bad policies of the time, the target debt is not synonymous with underdevelopment.  It is the case of the majority of developed countries that are indebted but have powerful productive sectors, managing their debt with caution in order not to pass on this burden to future generations.   Thus, the global public debt rises between 2014/2015 to almost $55,000 billion compared with $26,000 billion in 2005.   If we add private debts, world debt reached even $100,000 billion according to a study recently published by the Bank of International Settlements.

By comparison, global GDP in 2013 was $74 000 billion.  The American government debt rises in 2015 to $18,300 billion, or 110% of the national GDP.   France’s debt has reached more than €2,100 billion by 2015 approaching 98% of GDP.   The public debt of the Italy exceeds 135% of GDP, Portugal 130% and Japan 230% of GDP.   According to international studies, household and corporate debt reached 270% of GDP in Ireland, 222% the Denmark.   If one combines public and private borrowing, debt reached in 2015 approximately 270% of GDP.

4 – Four solutions are on offer for the Government of whose three are short term: either the budget deficit;  reduce operating expenses and better manage expenditures by targeting segments with real added-value.  In any case, avoid prestige investments, assuming also the easing of the ownership rule of 49 / 51% where in fact, Algeria bears all additional costs, or move towards a targeted external debt.   But the lasting solution, and the great challenge in the medium and long terms is to have a strategic vision within the framework of the new global changes, in order to achieve both energy transition as well as the economic transition.   One could not revive economic activity by a government Decree or neither through investment legislation without strategic objectives nor through State voluntarism of an obsolete vision of the rentier mentality.

The new model of growth must ensure the supremacy of the real sphere onto the financial sphere, by synchronizing these; whilst reconciling the economic dynamics and the social dynamics for the “right” distribution of national revenue between the different social strata, which cannot mean egalitarianism source of motivation.

Algeria is at a crossroads path.   There is now some sort of consensus amongst international institutions and credible Algerian experts that Algeria is before the alternative of either deepening its structural reforms related to freedoms and social cohesion, or go straight back to the IMF (1).

Dr. Abderrahmane Mebtoul, University Professor, Expert International, ademmebtoul@gmail.com

(1) – Interviews with Professor Abderrahmane Mebtoul by TVEnnahar – TVDzair – TvChorouk of  4 and 5 June 2016 on the new model of economic growth in Algeria.

:)