IMFBlog on December 2, 2019, posted this excellent article The Adaptive Age by Kristalina Georgieva whose advice is that No institution or individual can stand on the sidelines in the fight against climate change, for ever that is.
When I think of the incredible challenges we must confront in the face of a changing climate, my mind focuses on young people. Eventually, they will be the ones either to enjoy the fruits or bear the burdens resulting from actions taken today.
I think of my 9-year-old granddaughter. By the time she turns 20, she may be witness to climate change so profound that it pushes an additional 100 million people into poverty. By the time she turns 40, 140 million may become climate migrants—people forced to flee homes that are no longer safe or able to provide them with livelihoods. And if she lives to be 90, the planet may be 3–4° hotter and barely livable.
Unless we act. We can avoid this bleak future, and we know what we have to do—reduce emissions, offset what cannot be reduced, and adapt to new climate realities. No individual or institution can stand on the sidelines.
Ready or not, we are entering an age of adaptation. And we need to be smart about it.
Our efforts to reduce greenhouse gas emissions through various mitigation measures—phasing out fossil fuels, increasing energy efficiency, adopting renewable energy sources, improving land use and agricultural practices—continue to move forward, but the pace is too slow. We have to scale up and accelerate the transition to a low-carbon economy. At the same time, we must recognize that climate change is already happening and affecting the lives of millions of people. There are more frequent and more severe weather-related events—more droughts, more floods, more heatwaves, more storms.
Ready or not, we are entering an age of adaptation. And we need to be smart about it. Adaptation is not a defeat, but rather a defense against what is already happening. The right investments will deliver a “triple dividend” by averting future losses, spurring economic gains through innovation, and delivering social and environmental benefits to everyone, but particularly to those currently affected and most at risk. Updated building codes can ensure infrastructure and buildings are better able to withstand extreme events. Making agriculture more climate resilient means investing more money in research and development, which in turn opens the door to innovation, growth, and healthier communities.
The IMF is stepping up its efforts to deal with climate risk. Our mission is to help our members build stronger economies and improve people’s lives through sound monetary, fiscal, and structural policies. We consider climate change a systemic risk to the macroeconomy and one in which the IMF is deeply involved through its research and policy advice.
Mitigation plus adaptation
On the mitigation side of the equation, this means intensifying our work on carbon pricing and helping governments craft road maps as they navigate their way from brown economies dependent on carbon to green ones that strive to be carbon-free. Carbon taxes are one of the most powerful and efficient tools at their disposal—the latest IMF analysis finds that large emitting countries need to introduce a carbon tax that rises quickly to $75 a ton in 2030, consistent with limiting global warming to 2°C or less. But carbon taxes must be implemented in a careful and growth-friendly fashion. The key is to retool the tax system in fair, creative, and efficient ways—not just add a new tax. A good example is Sweden, where low- and middle-income households received higher transfers and tax cuts to help offset higher energy costs following the introduction of a carbon tax.
This is a path others can follow, strategically directing part of the revenues that carbon taxes generate back to low-income households that can least afford to pay. With the revenues estimated at 1–3 percent of GDP, a portion could also go to support firms and households that choose green pathways.
While we continue to work to reduce carbon emissions, the increasing frequency of more extreme weather like hurricanes, droughts, and floods is affecting people all across the world. Countries already vulnerable to natural disasters suffer the most, not only in terms of immediate loss of life, but also in long-lasting economic effects. In some countries, total economic losses exceed 200 percent of GDP—as when Hurricane Maria struck Dominica in 2017.
Our emergency lending facilities are designed to provide speedy assistance to low-income countries hit by disasters. But the IMF also works across various fronts on the adaptation side to help countries address climate-related challenges and be able to price risk and provide incentives for investment, including in new technologies.
We support resilience-building strategies, particularly in highly vulnerable countries to help them prepare for and rebound from disasters. And we contribute to building capacity within governments through training and technical assistance to better manage disaster risks and responses.
We work with other organizations to increase the impact of our climate work. One of our most important partnerships is with the World Bank, in particular on Climate Change Policy Assessments. Together, we take stock of countries’ mitigation and adaption plans, risk management strategies, and financing and point to gaps where those countries need investment, policy changes, or help in building up their capacity to take the necessary action.
Moving forward, we must also be open to stepping in where and when our expertise can help, and there are other areas where we will be gearing up our work. For example, we will be working more closely with central banks, which, as guardians of both financial and price stability, are now adapting regulatory frameworks and practices to address the multifaceted risks posed by climate change.
Many central banks and other regulators are seeking ways to improve climate risk disclosure and classification standards, which will help financial institutions and investors better assess their climate-related exposures—and help regulators better gauge system-wide risks. The IMF is offering support by working with the Network of Central Banks and Supervisors for Greening the Financial System and other standard-setting bodies.
Central banks and regulators should also help banks, insurers, and nonfinancial firms assess their own exposures to climate risk and develop climate-related “stress tests.” Such tests can help identify the likely impact of a severe adverse climate-driven shock on the solvency of financial institutions and the stability of the financial system. The IMF will help push forward efforts around climate change stress testing, including through our own assessments of countries’ financial sectors and economies. Careful calibration of stress testing for climate change will be needed, because such testing requires assessing the effects of shocks or policy actions that may have little historical precedent.
All these efforts will help ensure that more money will flow into low-carbon, climate-resilient investments. The rapid increase of green bonds is a positive trend, but much more is required to secure our future. It is that simple: we all need to intensify our efforts to work together to exchange knowledge and ideas, to formulate and implement policies, and to finance the transition to the new climate economy. Our children and grandchildren are counting on us.
The Summary of this paper dated 9 September 2019 is reproduced for all intents and purposes below and the paper can be read online or as a Download PDF (opens in new window)
In the Middle East and North Africa, a growing number of internationally recognized (de jure) states with formal borders and governments lack de facto statehood. Often, governance vacuums are filled by alternative actors that perform state-like functions in place of, or alongside, weakened official institutions. This results in hybrid orders where the distinction between formal and informal actors in the state is blurred, as too are the lines between the formal, informal and illicit economies.
International policymakers have struggled to establish political settlements in these contexts. Would-be state-builders have mistakenly assumed a binary distinction between state failure and success. They have sought to recreate an idealized archetype of the ‘orderly’ state, critically failing to recognize the more complex networks of de facto actors on the ground. At times, international policymakers pick or support leaders who lack local legitimacy, capability and power. This stalls and fragments ongoing organic state transformations, and produces hybrid orders as de facto actors adapt by both capturing state institutions and creating parallel ones.
We propose a new model for understanding the fragmentary transformations of the state underway in Iraq and Yemen. It involves the concept of a multi-layered state, consisting of the executive, the formal bureaucracy, the de facto authorities and society at large. The gap in legitimacy, capability and power between the middle two layers in this model – the formal bureaucracy and the de facto authorities – is a critical source of instability and an impediment to reform. Bridging that gap is thus the key to effective peacebuilding and/or state-building.
This paper argues that all states lie along a chaos–order spectrum. No state is entirely chaotic or orderly. Even those that display many features of chaos – as in Iraq and Yemen – contain pockets of order that are all too often overlooked. The larger the gap between the formal bureaucracy and the de facto authorities, the more a state slides towards the chaos end of the spectrum. Effective state-building must find a way of institutionalizing improvised governance arrangements.
To achieve this, we advocate a ‘middle–out’ approach that aims to strengthen the connective tissues between the bureaucracy and de facto authorities. Simplified, this more inclusive approach entails reframing international involvement as playing the role of a ‘referee’ to monitor the transformations of the state while enforcing accountability, as opposed to the practice of picking ‘winners’ and integrating unfavoured actors into unpopular political settlements.
King is dead, long live the King’: Principle applicable in the MENA region. In effect, all countries of the area, be they republics or monarchies tend to abide by this principle. The consequences of such custom have had bearings throughout millennia. The recent advent of oil exports related revenues brought the limelight to shed a little light in the MENA sunny skies.
Libya’s battle for Tripoli alongside ongoing mass anti-government demonstrations that toppled autocratic leaders of Algeria and Sudan demonstrate that both popular Arab protests that in 2011 forced four presidents out of office and the counterrevolution it provoked are alive and kicking.
Protesters in Algeria and Sudan are determined to prevent a repeat of Egypt where a United Arab Emirates and Saudi-backed military officer rolled back the achievements of their revolt to install a brutal dictatorship or of Yemen, Libya and Syria that have suffered civil wars aggravated by interference of foreign powers.
In Libya, Field Marshal Khalifa Belqasim Haftar, the UAE-Saudi-Egyptian-supported warlord, hopes that his assault on the capital Tripoli, the seat of the country’s United Nations-recognized government, will either end the conflict militarily or at the very least significantly increase his leverage in peace talks.
In all three countries, Saudi Arabia and the UAE, the two Gulf nations most determined to maintain the Middle East and North Africa’s autocratic structure at whatever cost, have sought to either bolster military resolve to remain a decisive political force or support the rise of forces that fit their agenda.
The aid package contributed to deepening divisions among the opposition that has vowed to continue street protests until full civilian rule has been achieved despite the ousting of president Omar al-Bashir, the resignation of senior military officers, including the intelligence chief, and the arrest of Mr. Al-Bashir’s brothers.
Mr. Al-Hussein returned to Khartoum this month from two years in exile in the kingdom, where he served as an African affairs advisor to the Saudi court, after having been unceremoniously sacked in 2017 on suspicion that he was a Saudi intelligence asset.
Moreover, the head of Sudan’s military council, Lieutenant General Abdel Fattah Abdelrahman Burhan and his deputy, Lieutenant General Mohamed Hamdan Dagalo, a paramilitary commander known as Hemeti, developed close ties to the Gulf states in their former roles as commanders of the Sudan contingent fighting in Yemen in support of the Saudi-UAE alliance.
A commander of feared Arab militias accused of genocide in Darfur, General Dagalo is widely viewed as ambitious and power hungry. His Rapid Support Forces (RSF) are deployed across Khartoum.
Western officials privately describe General Dagalo as “potentially Sudan’s Sisi,” a reference to Egyptian general-turned-president Abdel Fattah al-Sisi who came to power in 2013 in a UAE-Saudi-supported military coup.
Mr. Al-Sisi has introduced one of the most repressive systems in recent Egyptian history. Western diplomats said General Dagalo’s ambitions virtually guaranteed that the military would not fully surrender power in any negotiated transition.
The military’s role in deposing president Hosni Mubarak as a result of a popular revolt in 2011 and subsequently restoring the military’s grip on power coupled with concern about General Dagalo inspired one of the Sudanese protesters’ chants: “It’s either victory or Egypt.”
Saudi Arabia and the UAE together with Egypt and Bahrain have diplomatically and economically boycotted Qatar for the past 22 months in a bid to force the Gulf state to tow their geopolitical line.
For now, Mr. Haftar’s offensive has way laid a UN-sponsored peace conference that was expected to achieve an agreement that would have ensured that Islamists would continue to be part of the Libyan power structure.
Mr. Haftar, like his regional backers, accuses the Tripoli government of being dominated by Islamists, the bete noir of the UAE, Egypt and Saudi Arabia.
On a visit to Saudi Arabia days before launching his attack on Tripoli, Mr. Haftar reportedly was promised millions of dollars in support in talks with Saudi King Salman, and his powerful son, Crown Prince Mohammed bin Salman, in defiance of a United Nations arms embargo.
The battle for Libya could prove to be Mr. Haftar’s most difficult military offensive. His Libyan National Army (LNA) already controls Libya’s second city of Benghazi and much of rest of the country where it met relatively little resistance.
The battle also serves as a warning to protesters in Sudan and Algeria whose demands for fundamental change risk upsetting the UAE, Saud Arabia and Egypt’s applecart.
With no swift victory in sight in the battle for Tripoli, Libya risks another round of protracted war that could be aggravated by the fact that it is as much a domestic fight as it is a multi-layered proxy war.
Unlike Sudan, Libya has passed the corner. Years of civil and proxy wars have devastated the country and laid the groundwork for further violence. Algeria and Sudan still have a chance of avoiding the fate of Libya, or for that matter Syria and Yemen.
As the battle in Tripoli unfolds, Libya looms large as a live example of what is at stake. Protesters are up against forces whose backers have proven that there is little they will shy away from to achieve their objectives. Libya is but the latest example.
The king’s fate is at stake in the fighting in streets of southern Tripoli. His fate hangs like a sword of Damocles in the balance in the streets of Algiers and Khartoum.
Dr James M. Dorsey is a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, an adjunct senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture.
The World Economic Forum wrote last month that Syria’s revolution of 2011 started as a call for reform and change within the state and, in trying to defeat those calls, accusations of sectarianism and prejudice were used to discredit either side. Most recently, Yemen’s internal struggles have been cast as a sectarian struggle when, at heart, it is one about resources and power. The list goes on.
Almost all republics or labelled as such of the MENA region as opposed to the monarchies, sultanates and / or emirates, are going one way or another through upheaval.
Here is Juliette Harkin, Associate Lecturer, Politics and International Relations atAnglia Ruskin Universitycatching those elements of governance that really count in a Middle Eastern background. A background of generalised state failure or incapacity to share with the rest of the world amongst many things, the benefits of democratic values.
As Syrian president Bashar al-Assad prosecutes his 18th year in office, he is presenting himself as a secular leader in a sea of Islamist extremism and terror. But his record makes a mockery of that claim. However long he stays in office, he will forever be remembered a president who oversaw the devastation of his country and resorted to hideous attacks on civilians in order to remain in power. And as for Assad’s pretentions to secularism, the foundations of his government’s supposed ideology were cast away even before he succeeded his father as president.
The Syrian government’s professed secularism dates back decades, and derives from the school of political thought known as Arab Baathism, the core principles of which were Arab unity, freedom and socialism. In the years after World War II, these were not hollow words, they were political imperatives in the struggle against colonialism and elite rule.
The Syrian branch of the Baathist movement came to power in a coup d’état in 1963. In the 1970s, one of the military officers involved in the coup, Hafez al-Assad, took the helm and steadily entrenched the his family and its political network as the rulers of Syria.
As the Assad family took control, it exploited the infrastructure of the Arab Baath movement and party to retain power. But for all that they paid lip service to Baathist principles, the Assads were less interested in serving the Syrian people than in dominating them. Decades later, the political traditions of Arab Baathism are long dead, and Assadism holds sway in its place.
Government for the few
The gap between these two modes of government is all too apparent. Central to influential strands of Baathist thought was an inclusive definition of what it meant to “be Arab” – a definition that revolved around geographical, cultural and linguistic aspects of being an Arab rather than mere ethnic origin.
Yet the supposedly Baathist Syria was never so inclusive; its Kurds, in particular, have been suppressed for decades. Baathism was supposed to rise above sectarian and ethnic differences among Arabs, but in Assadist Syria, sectarian differences were fanned from the start.
As for notions of equality, the benefits of economic reforms were distributed unevenly and selectively, marginalising communities in the Syrian provinces even as elites enriched themselves.
The older and younger Assads followed similar paths. Where Hafez al-Assad violently crushed dissent in the city of Hama in the 1980s, and nurtured complex social and political allegiances, his son Bashar continued a programme of economic reform that benefited big industry and established a broad patronage network.
In some respects Bashar was a reformist and forward-looking president, introducing the internet and allowing a private media sector to develop. But his reformist agenda ultimately devolved into runaway capitalism and rapacious self-enrichment for a small clique of Syrian families and businesses. Today, it’s these people who are central to the government’s survival.
Locking up power
It didn’t have to be this way. In the early years of Bashar’s reign, there briefly seemed to be a window for civil society to open up – but soon enough, that window was closed. Key opposition figures such as Michel Kilo were imprisoned, and the brief Damascus Spring of 2000-1 was bitterly shut down.
But once we accept that Assadism was never truly concerned with promoting a secular and equal society, it’s easier to understand why today’s government is working so closely with such odd bedfellows as the theocracy in Iran and the religiously conservative Hezbollah.
A longstanding feature of Assadist rule has been a tendency to lock up secular and leftist thinkers and intellectuals. The communists were locked in Syria’s prisons together with the Islamists, and anyone else who spoke out of line. If not imprisoned, anyone who might pose a threat was co-opted. Pockets of space for some Sunni sheikhs to promote their religious thought and practice – notably in the education system – were bartered in exchange for blind loyalty.
Since the 2011 revolution, the government has aligned itself with and promoted a proto-fascist nationalism that encourages an utter disdain for the majority of Syrians, namely the pious Sunnis who live in restive areas of Syria’s provinces and countryside. And any claim the government had to lead a resistance against oppression were severely tested when a new grassroots opposition emerged in Syria’s towns and villages only to be cruelly crushed by government forces.
Claims to resistance and to be the voice of the Palestinian cause merely obscure a politics of pragmatic self-preservation and dictatorial practices. It has always been progressive leftist voices that have posed the most threat to Assad’s rule. The troika of myths about the Syrian state – that it is secular, modern, and leads the resistance against imperial and Zionist threats – simply do not bear scrutiny.
Who actually benefits from the continuation of Assadism? The same people who were embedded in the Assadist networks and enriched themselves before the 2011 revolution and current civil war. They are doing well out of Syria’s war economy, which has made some people very rich. And even as Assad oversees brutal attacks on civilians and one of the world’s worst refugee crises, the war provides disturbing new symbols and ideas to provide a rationale for his continued rule.
A surprising appointment of a New Prime Minister was decided upon yesterday by the presidency of the republic in replacement of the previous three months old government.
Any project is necessarily represented by political, social and economic forces otherwise it would be doomed to failure. The major challenge for Algeria at this conjecture would mean Algeria in need of foresight and adaptation strategies to implement operational instruments capable of identification so as to anticipate changes in the behaviour of the economic, political and social actors at geostrategic level.
There is a dialectic link between development and security, because without sustainable development there is necessarily increase of insecurity that has rising costs. Algeria per the reckoning of many international experts has the full potential, subject to far-reaching reforms, to establish a diversified economy responsible for the creation of sustainable jobs and therefore lead towards more stability not only of the country itself but of the entire region.
In order however to avoid perverse effects that might be harmful to its development, it would be dangerous for the future of Algeria to go into a monologue, fill the void inherited from the rentier culture of the past and allow certain organizations that are unable to mobilize society because of their non-credibility to deliver to activism without real impact.
There is a theory in political science that says 80% of poorly targeted and disorderly actions that are covered by activism have an impact on 20% on objectives and conversely 20% of well-targeted actions have an impact on 80%. The price of oil drop will definitely remain low for at least some medium term duration before being affected by the new on-coming technologies.
This would mean adaptation strategies are urgent and whilst avoiding the illusion of a model of linear energy consumption as of outdated models of the 70s and 80s as based on material development whereas we are at the dawn of the fourth economic revolution. This will predominantly be geared by and through the Internet of Things and Artificial Intelligence, see latest report of the World Economic Forum titled «The Impact of the Fourth Industrial Revolution».
We must imperatively reframe the debate, avoid the utopias of the past and adapt to the new world through a language of truth and tackle the essence and not appearances. As I demonstrated recently in a long interview to the US daily American Herald Tribune of December 28, 2016 and in the French financial daily La Tribune of May 07, 2017, I would like to consider the stability of Algeria, as a strategic element acting in favour of the stability of the entire region, which does not mean some form of status-quo, but to carry out reforms in a positively historical movement. This could be a prerequisite for the recovery of the required national cohesion and the construction of a home front as a solid and sustainable support for political and socio-economic reforms that are in fact challenges of the new world of today and of the future. In the areas of political and economic changes, social and cultural would include the pivot and central element of good governance and the reform of the school taking account of the Foundation of the development era of the 21st century based on knowledge.
The strategic objective must reconcile modernity and cultural authenticity, economic efficiency and a deep social justice if one wants to run to avoid the marginalization of Algeria within the global society with meanings geostrategic implications. Government and Opposition must agree for a national renewal of Algeria.
It will be what the Algerians will want it to be. The devil being in the details it is up to us with regards to healing like involving a broad National Front inclusive of all sensibilities, tolerating all differences of ideas, a source of mutual enrichment. To finish on and regardless of whoever is the appointee as a Prime Minister, prerogative falling exclusively onto the President of the Republic, the important thing is to focus on the best interests of the country.
For this reason I wish every success to Mr. Ahmed Ouyahia, who was head of Government in the past at the time I chaired the National Council on privatization between 1996 and 1999. Gloom apart, Algeria having all potentialities out of the current crisis, because failure would be harmful to the country and thus geostrategic implications of destabilization of the entire region.
Algeria in this difficult environment of fiscal pressures and geostrategic tensions needs stability, to bring together instead of dividing through a productive dialogue and a shared sacrifice generalised to each and every citizen. And through sustainable development, encourage all producers of wealth for the benefit of all its children, taking into account the harsh reality of the world, a world in perpetual motion or any Nation who don’t advance not necessarily stop.
The MENA region is yet again under horrendous pressures not only within the usual northern part of the Middle East and lately in the Gulf area but still in that part of the North African desert. This story is about Libya, a country that has known nothing but unrest and upheaval since its forced change of regime in 2011. More recently a UN report informed that the UAE violated Libya’s arms embargo by secretly supplying the concerned in this article. Would this have any bearing with the outcome as proposed in this article?
Would also this liberation mean reunification and a unique and central authority over the country? Only time can tell but one thing is sure in that all countries surrounding Libya would sight with relief if this is achieved.
Would this be accounted for in the Qatar blockade resolution? In any case, here is the BBC’s story.
The image above is of REUTERS — Benghazi saw fierce clashes between the LNA and Islamist militants this week
The head of the self-styled Libyan National Army (LNA) has said his forces “liberated” the eastern Benghazi city after years of fighting with Islamists.
Field Marshal Khalifa Haftar said the city now enters a new era of “security, peace and reconciliation”.
If confirmed, victory would mark a major advance for the one-time commander in the army of late strongman Muammar Gaddafi.
The LNA is not recognised by Libya’s UN-backed government in Tripoli.
Libya’s unrest since the 2011 ousting of Gaddafi saw extremist organisations, including so-called Islamic State, gain a foothold in the country.
In a televised speech on Wednesday, Field Marshal Haftar said that “after a continuous struggle against terrorism and its agents that lasted more than three years… we announce to you the liberation of Benghazi”.
Image copyright REUTERS – – – – Khalifa Haftar has backing from some foreign powers
His announcement comes after bloody battles this week in Benghazi’s Sabri district in which dozens of LNA fighters and various local Islamist militants died.
Pictures posted on social media sites showed some civilians in Benghazi and other parts of the country celebrating the end of a bitter conflict that left large parts of the country’s second city in ruins and displaced thousands of people in recent years.
But Field Marshal Haftar also has many political and armed opponents in Libya. He does not recognise the government in Tripoli, and instead backs the authorities in the east. Opponents accuse the commander, who has backing from some foreign powers, of trying to impose autocratic rule in Libya.
Divided opinion – analysis by Rana Jawad, BBC North Africa correspondent
Benghazi’s conflict over the last three years at times appeared to have no end in sight, and – as it grew – so too did the Field Marshal Haftar’s political and military ambitions.
This is a significant gain for him, and a city that has been aching for respite from the war. Opinions over the conflict in Benghazi are largely divided; many will be celebrating what they see as a war brought to their doorstep by Islamist militias at a time when political actors in Libya barely acknowledged there was a problem there, despite the near daily bombings and killings in the city.
Others view it as a product of a man who was power-hungry and lumped up all of his enemies under the banner of “Islamist terrorists” to pave the way for a future political role through the might of the gun. His short address dedicated to the people of Libya had an unusually reconciliatory tone, but it is not one that will ease worries over what his, or his opponents’ next move might be.
In Libya today, a military victory in one battlefield often opens the door to conflict in others.
The Council of Ministers, met on Wednesday in Algiers under the chairmanship of the President of the Republic, Abdelaziz Bouteflika. It adopted an Action Plan for the newly appointed Government of Mr. Abdelmadjid Tebounne.
This Action Plan which will be submitted shortly before the National Assembly, is part of the continuation of the implementation of the programme of the President of the Republic, according to a statement of the Presidency of the Republic.
Tebboune Government’s Guidelines from the President
The Government Action Plan as adopted by the Council of Ministers meeting on June 14, 2017, noting first that the oil price crisis has presumably settled in a long term, would require Algeria to face up to major demanding challenges that would include dynamization of reforms for implementing all socio-economic actions, along the lines that I summarise in seven key areas as follows.
The need to continue the implementation of the budgetary policy of the adopted last year’s rationalisation to redress public finances by 2019.
So as to not impact public investment programs, promote non-conventional internal financing that could be mobilized for a financial transition of a few years.
Avoid for as much as possible the recourse to external debt and contain further all imports volumes of goods and services for the purpose of preserving the reserves of foreign exchange.
Continue the implementation of the new model of growth adopted in 2016 by the Council of Ministers, including its component of reforms so as to improve the investment environment, and the modernization of the tax system, public banks and financial market.
Enhance all the country’s riches and resources available, including conventional and non-conventional fossil and renewable energy.
Work on social justice and national solidarity for a greater rationalization of a just social policy, including better targeting of subsidies.
Adopt an effective communication policy towards public opinion, and carry on a continuous dialogue with all economic and social partners.
In short, it will be for the Government to produce at a dated deadline, all reforms and necessary synchronization with all sectoral actions taking into account the unavoidable budget external and internal constraints as highlighted with force during this Council. firstname.lastname@example.org
What are the prospects for the newly appointed Government of Abdelmadjid TEBBOUNE? Will we see the status-quo or reform from June 2017 to April 2019 in Algeria? Or the latter being the country’s next presidential election, will we as stated in some international media, be focusing on the distribution of rent to temporarily appease the social front without strategic visions, Ministers confined in the management of the day-to-day business.
Or, per the great wish of the majority of Algerians, the country whilst confronted to real issues, the resolution of which will involve profound political, economic and social adjustments.
The new Government’s 12 Number challenges could perhaps be as follows.
The strategic objective whilst reflecting on the high rate (70%) of abstention and blank votes of the elections of May 04, 2017, is to put into place some political, social and economic intermediation in order to hopefully avoid direct confrontation of State citizens to allow mechanisms of dialogue between all political, economic and social of society without any exclusiveness, avoiding any form of the authoritarian past. With the world being more and more of a House of glass with the Internet revolution that actually opens up to all facets of society through more space and freedom. All segments of society want their share of the hydrocarbon rent and immediately, not believing anymore in demagogic speeches and empty promises, the goal is to restore confidence in the future, and avoid this growing citizen-state divorce by a deep moralization of the political and economic life of society.
Globalization, a reality that whilst avoiding chimeras will have to be taken into account when considering the impacts of all recent global changes, the geostrategic stakes for the region including the Sahel, the integration of the Maghreb and more generally of North Africa, bridge between Europe and Africa so as to better face up the multiple challenges with the comparative advantage of this country and inscribe it into the Euro-Mediterranean and African space. One must realistically analyze the strategic implications of the Association Agreement that binds Algeria to Europe since September 1st, 2005, after having had a break of three years. How then to arrange for a set-up of competitive enterprises in terms of cost and quality to this horizon? It is similarly of the same with the future agreement which will be even more binding of Algeria’s accession to the Organization World Trade (WTO). In this context, it is urgent to fix all those inconsistent and 1970’s modelled socio-economics and industrial development policies, whilst notably taking into account the fourth world economic revolution.
School reform has not only economic but cultural and political implications in the shaping of tomorrow’s Algerian citizen. It is in this context about how to also integrate the country’s educated youth including that of the emigration with its important potential that is the mother of all reforms. The socio-educational system got itself bureaucratised over the years, from the primary to the higher levels through also the vocational training and continuing education, posing the problem of the mastery of new technologies, having preferred the dominance of quantity over quality with up to 2 million students by 2020. Without however the primacy of the Knowledge Economy, any reform would be doomed to failure and everything else is a merely empty speech (1).
Away from administrative measures, it will be a matter of fighting off the bureaucratic system that discourages any creative initiative and that produced all that informal business sphere of more than 50% of the total country’s economic base where everything is treated in cash, thus promoting tax evasion, referring to the complete overhaul of the State. Basically this involves a debate on the future role of the State, far from the centralized model, so as to achieve a transition to a market economy with social purpose and reconcile efficiency and deep social justice.
Productive private sector characterised specific market does not exist and the State sector would have to evolve towards a competitive framework, frankly address a never too late program of de-monopolization (new local and international private investment sector) and privatization (transfer all or part of existing assets) as a complementary process to allow the transition of economic growth , posing the problem of the role of the State in the transition to a mastered competitive market economy.
Economic regionalization problem not to be confused with the increase in the number of governorates and regionalism, will strengthen the symbiosis Citizen-State through the involvement of local communities that need to optimise public expenditure, streamline its expenses, in order to achieve a grouping around large economic space whose core areas should be vocational training centers, public banks, private companies and regional universities within regional eco-poles so as to develop centers of excellence.
It would be a mistake to focus only on new organizations and legislation to fill the void; Algeria having experienced dozens of new organizations notably in the public without any conclusive economic impact and on the best laws in the world that are rarely applied. It is rather the implementation of good governance, involving the reorganization of the State, based not on custom relationships but on the rule of law and an independent justice. It is also about promoting the plurality of the media with a code of ethics, a fight against corruption that destroyed the cohesion of the social fabric and scared away potential investors. It is thereby about establishing institutions, adapted to both the global and local changes taking into account our cultural anthropology.
Address, without taboo nor pouring into attacks and pernicious analyses, like in all democratic countries, the role in a State of Law of the armed forces and security services within a three to five years program, as well as the functioning of the Department of Foreign Affairs so as to adapt all diplomacy and representations to the new world.
The strict management of the revenues of SONATRACH, the state oil company that is the main pillar of the national economy, must be a priority through transparency of the costs of production, to empower and extend the hydrocarbons ownership to the whole national community. A productive discussion on the future of Shale Oil & Gas and its effects on the environment, the level of the conventional fossils reserves, and their exhaustion timeline taking account of the increasingly strong domestic consumption, the evolution of international prices and the new global energy changes, posing the problem of the generalised subsidies without targeting. Reducing costs by combining Solar and the unnecessarily wasted flared gas, and reviewing with promotion of energy efficiency especially of the conventional methodologies as currently applied in the construction industry.
With a non-existing real wage policy, corresponding to the level of production and productivity, it will be to peacefully address the balancing of the labour market with fairness and flexibility not forgetting the dangers of overstaffing in the public service of more than 2.1 million staff, where one does not solve the problems of employment through administrative or fictitious rentier jobs.
Related to the improvement of the health system with mismanaged hospitals, despite skills, and a reasonably decent sanitation of pension funds must be managed transparently. For that combine the systems of distribution and capitalization otherwise.
To energize the lethargic stock exchange, through a reform of the financial system and the State-owned banks. In this context, after pondering on why non-oil foreign direct investment is not appealing and the binding rule of 49 / 51% that is generalized to strategic and non-strategic sectors resolve, the thorny problem of both agricultural and industrial land allocation and deeds.
In short, meditate the negative experience of the war economy of previous governments in similar conjecture. For this a change of course is needed. Subsidized interest rates, the purchasing power of the Algerian people as much as the value of the Dinar correlated to foreign exchange reserves, depends up to 70% on the hydrocarbons revenues. Grants, direct and indirect social transfers having represented 27 to 30% of GDP in 2015/2016; would we see the State carry on in this way if the price of oil were persistently low with Algeria of 2010/2014 running on the basis of a price of a barrel higher at $100/110 and $88 in 2016?
As I demonstrated on numerous occasions to several international and national agencies, Algeria is at the crossroads with all possible scenarios, in order to achieve or not its transition from a rentier economy to a diversified economy and in the context of international values based on the enterprise with in its bedrock Knowledge but taking into account protection of the environment.
As per the founders’ teachings of economics, any existing technical determinism of a dialectical link between the political, economic, social and cultural would largely be influenced by globalization. It is therefore necessary to distinguish between the dynamic stability and the involvement of citizens through democracy source of social stability and economic progress. Without democracy, the rule of law and the return to confidence, there may not be any development.
Note (1) :
see algerie.com 26/05/2017 “New economic challenges of the Government of Abdelmadjid Tebboune”
Interview with Prof. Abderrahmane Mebtoul on Ennahar TV “on the challenges of the Government Tebboune’ on 26/05/2017
“the impact of the agreements of Vienna” on daily governmental Horizon and
Chorouk Arabic daily of Sunday 29/05/2017
Professor Mebtoul will debate on 29/05/2017 at 2300 – TV Dzaiar News on these topics .
Iran is at a crossroads in its history; 56.4 million voters are called to the polls to elect their new president. These May 19, 2017 Iran’s presidential elections with a risk of having a high abstention rate happen in a background of a general situation that is much better than in the past, inflation is under control although unemployment is relatively high. For these elections of 2017, it is mainly a duel between Hassan Rouhani, 68, reformer elected in 2013 and a 56 year old conservative Ebrahim Raissi, former Attorney general. Whatever the results, after these elections, the prospects for growth in the medium and long term are dependent on the pace of reintegration of Iran into the global economy, the speed of the reforms as detailed in the new five-year development plan and especially how to apply, to implement and to boost non-oil segments by creating a level playing field between existing players and new entrants, (winners of the reforms of the future are not those of today) but also to work to improve the business environment and the efficiency of the labour markets but also to work to improve the business environment and the efficiency of the labour markets balancing flexibility and fairness and enter the workforce of the informal sphere within the real sphere.
According to the first partial results as per Reuters on May 20, 2017, the Iranian outgoing president Hassan Rouhani is said to be widely re-elected totaling approximately 56%. The results will officially be announced on Sunday May 21, 2017.
Iran’s Geopolitics details
The Islamic Republic of Iran proclaimed on April 1, 1979 has a population that rose from 21 million in 1960 to 80 in 2016 with by extrapolation upto 84 million in 2020 for an urban population in January 1st, 2016 of 73.4% of the total population, life expectancy of 71.15 years and ranked second in 2010, behind Egypt in the MENA’s most populous countries.
Iran has an area of 1,648,000 km² with a density of 48.4 hab per km², and Tehran as capital and Karaj, Tabriz, Isfahan and Mashhad as major cities. It holds the world’s fourth oil reserves with more than 160 billion barrels (13 / 14% of world reserves). In general Iran is a strategic player that could help stabilize the tensions in the region with a definite impact on the supply of oil.
Iran which produced around 2011/2015 more than 2.5 million barrels a day can produce more than 5 to 6 million barrels per day today. These factors are in addition to a production outside OPEC of 67% market share compared with 33% for the OPEC, not counting all those newcomers on the world market. It has also more than 34,000 billion cubic metres of gas or more than 16% of world reserves, not to mention that Iran if agreements are respected, will then access between 50 to 100 billion Dollars in foreign banks, which will increase its exports and attract foreign investment.
Iran has significant resources. It is located on the belt of the reserves of copper in the world and benefits from considerable reserves of other minerals, such as iron, aluminium, lead and zinc and as a country with borders it shares with 15 other countries, making it easily an emergent country, especially as it safely invested in human resources, the elite without which no country can develop.
According to the studies of the OECD and the IMF, its population has a literacy rate of 93% for the 19 to 40 years old.
The head of State is the Supreme Leader of the Islamic Revolution that is named for life by the Assembly of Experts and the President is Hassan Fereidun RUHANI since August 3rd, 2013. The Supreme Leader is the Commander-in-Chief of the Armed Forces and controls all the army intelligence and security operations.
The head of Government is the president elected through universal suffrage for a term of four years. The Council of Ministers is selected by the president, with the approval of the legislature. The president holds control over the executive, but shares power in the areas which are the prerogatives of the Supreme Leader.
Parliament is made up of the Islamic Consultative Assembly, which is a legislature that is unicameral. It has 290 seats, and its members are elected by universal suffrage for four years. Parliament needs to validate the laws by the Council of Guardians, which checks if the proposed laws do not contradict Islamic principles. The Parliament has real power in Iran, particularly regarding removal of a Minister. The president may dissolve the Parliament directly, and can recommend the dissolution of the Supreme Leader.
The entire international community except Israel, had welcomed the lifting of the embargo against Iran once the International Atomic Energy (IAEA) Agency has certified on January 16, 2016, the steps taken by Tehran for not committing to produce a nuclear bomb.
After nearly a decade of diplomatic isolation, Iran has returned to the international community. Since his election in June 2013, president Rohani had expressed the wish to improve relations of Iran with the international community on the nuclear file degraded during previous presidencies, while trying to soothe its relations with regional powers including its relations with Sunni powers, especially Saudi Arabia.
According to many military experts, Yemen, at the tip of the Arabian Peninsula and preserve of Saudi Arabia’s via the USA, is not a strategic priority for Tehran, much less in any case to that of Iraq or Syria, where Iran is a major player in the current crisis. At the regional level, it is an actor as evidenced by its priority, which is the struggle against ISIS. Iran gave its support to the Iraqi regime, but also since the outbreak of the Syrian crisis a full support to Damascus. This is however a position that can evolve according to its strategic interests.
Socio-economic and financial details
With a GDP estimated in 2016 to be $ 412.2 billion, Iran is the second largest economy in the MENA region after Saudi Arabia. Per capita GDP in 2015 was 5306 US dollars. The growth rate as compared to the previous period, was 4.6% in 2015, 4.5% in 2016, thus reflecting some dynamism and should be no less than 5.2% in 2017, 4.8% in 2018, 4.5% in 2019.
According to the IMF, inflation rate was 15.6% in 2014, 12.0% in 2015, 8.9% in 2016, a new figure for 25 years, under the effect of the tightening of monetary policy and a forecast of 8.2% in 2017. Unemployment was 12.20% in 2012, 10.60% in 2014, 11.67% in 2015 and 11.3% in 2016 after Q2 2016, 12.7%, its highest level for three years (or 3.3 million unemployed), is explained largely by the increase in the employment rate of the population, to 40.4% compared to 35.4% in January-March 2014.
Yet, there is the importance given to education where the number of students in universities increased significantly over the past 20 years. In 2015, 4.8 million Iranians have begun university studies, representing almost 6.2% of the total population (from about 3.5% in France).
As to financial indicators, the Iranian Rial (IRR) was quoted at 14777,90 to the Euro in 2011, 15643 a Euro in 2012, 24456 a Euro in 2013, 34653 a Euro in 2014, 32188 a Euro in 2015 and in May 19, 2017 to 36335 IRR a Euro thus showing a strong depreciation of the Iranian currency.
The current balance in 2014 was 3.8% compared to the GDP’s of 0.4% in 2015 and less than 0.6% in 2016 with a forecast of zero in 2017, while the GDP / public debt ratio was 15.6% in 2014, 17.1% in 2015, 17.5% in 2016 with a forecast 17.7% in 2017. The trade balance of Iran with a share of trade in GDP of more than 31% (World Bank, 2015) is structurally positive, oil exports have increased by 70% in 2016 trend which should continue in 2017 with a trade surplus of 1.8 billion US Dollars in 2016.
The main customers of Iran are China, Iraq and the UAE. Besides oil and gas, Iran exports are mainly pistachios, carpets, petrochemicals, organic chemicals, aluminium and plastic materials. Its three main suppliers are the UAE (that in fact play the role of Iran’s Center of re-export), the European Union and China. Iran’s imported goods are mainly machinery, iron and steel, electrical and electronic equipment and cereals.
The Iranian economy remains dominated by the public sector that controls much of the economy with a relatively fragile banking sector. Structurally, the economy is dependent on oil revenues, which account for nearly half of all State revenues. So, the lifting of international sanctions in July 2015 allowed the resumption of trade and investment (FDI stock in 2015 has been $45,097 million), while exports of oil have found their level prior to the sanctions.
The agricultural sector, whose main crops are pistachio of which iran is the largest producer in the world, wheat, rice, oranges, tea and cotton all contributed to 9.3% of GDP in 2016, and employing 17.9% of the active population. Oil production, which has seen a drastic fall in 2012 following the introduction of international sanctions, has quickly picked up since their lifting, reaching in March 2017 its highest level in 7 years (3.8 million barrels per day).
The industrial sector employs 33.8% of the active population and contributes to 38.2% of the GDP. The textile industry is the second largest sector after the oil & gas. Sugar refining, the industrial preparation of food, petrochemicals, cement and construction are the other major industries. Traditional crafts, such as weaving of carpets, ceramics, silk and jewellery manufacturing, are also vital for the Iranian economy. The tertiary sector contributes to 52.4% of the GDP using 48.3% of assets.
Prospects for the Iranian economy
In order to diversify its economy, the Iranian Government has decided to launch a plan of privatization and open most of the sectors of its economy to foreign investment.
Thus, in 2016 the projects of FDI in Iran increased significantly. The Iranian Government through the country’s Central Bank intends, in accordance with the recommendations of the IMF, to conduct a recapitalisation of distressed banks. The State should implement new reforms to stimulate the private sector as the public sector no longer has the resources to create the needed jobs.
The Iranian authorities have adopted a comprehensive strategy of reforms based on the market, as declared in a document on prospects in the future 20 years and in the 6th five-year plan of development covering the period 2016-2021. So this plan revolves around three main axes: the development of a resilient economy, the scientific and technical progress, and the promotion of cultural excellence. On the economic front, the plan tables on an annual growth of 8%, with three main priorities for the next five years, e.g.: reform of public enterprises, financial and banking sector, distribution and management of oil revenues, greater budgetary rigour, the fight against waste and corruption.
Because of the important thing for the Iranian Government is to drive the economy out of recession, the goal is economic recovery. Reducing unemployment and control of the inflation to maintain social cohesion, knowing that the economy is highly dependent for its funding on the oil revenues, the Government of Iran with the lifting of the embargo will as a consequence increase the supply of oil, which will allow it to boost its economy and intends to carry out internal reforms to increase tax term revenues.
Thus Iran plans privatizations and disposals of assets that show strong growth as compared to the current budget combined with the reduction of the State’s lifestyle (operating expenditures, salaries of civil servants, etc.). So, the Government of Iran will be facing significant internal challenges that require major structural reforms at three levels:
First, review all un-targeted widespread subsidies, that are wasteful and source of rentier situations and diversions of funds, establishing another cause of this permanent bleeding in the Iranian economy that prevent the channelling of resources into the system of domestic production so as to drive effectively the development of the country.
It is in this context that the indirect subsidies, whose cost was estimated at 27% of GDP in 2007/2008 (approximately $77.2 billion), has been replaced by a program of direct cash transfers to Iranian households.
The second part of the subsidy reform, launched in the spring of 2014, provides a more gradual oil price envisaged before adjustment and a wider targeting of transfers for the benefit of low-income households. Nearly 3 million of higher income households have already been removed from lists of beneficiaries. As expected, the poverty rate declined by 13.1 to 8.1% between 2009 and 2013 (based on a poverty line of $5.5 in parity of purchasing power in 2011.
This evolution according to the IMF is probably attributed to the establishment, by end of 2010 of a universal program of monetary transfers, prior to the removal of subsidies. The program seems to have more than offset the expected increase in the less affluent and contributed household energy bills, doing so to improve the purchasing power of the poorest 40% of the population. This approach would have led to a reduction in the expenses of the targeted subsidies organisation (TSO) of 4.2% of GDP in 2014 to 3.4% in 2016.
Second, whilst ensuring its security protection, limit the huge spending on the military because of the regional tensions including the nuclear project for military purposes as per the agreement for nuclear power for civilian use, the colossal ballistic program and interventionist policy at the international level that require significant financial aid are believed to be no more;
Third; it involves adjustments at the level of the Iranian authorities power, the limitation of that of the Pasdaran whose control is an essential part of the Iranian economy, without being subject to the law on taxation, monopolizes all economic activity with colossal revenues in the sectors of oil, gas, petrochemical, telephony, computer, automotive, steel, cement, food, pharmaceuticals as well as roads, banks, insurance. According to analysts, the Pasdaran are among the largest cartels of the world and control more than 50% of imports and one-third of Iranian exports
In summary, the agreement, signed in July 2015, has allowed the lifting of economic sanctions against Iran and the resumption of partnership with overseas while we are witnessing an ambiguous positron of the U.S. president, who seems to take this legacy without ceasing to criticize claiming that in April 20, 2015, Iran was not in breach of the nuclear agreement, but that he violated the spirit. Anyway, the return of Iran into the community of Nations would help defuse the climate of tension that runs across the region and foreshadows a significant geostrategic and energy reconfiguration at the level of the Middle East.
Please address any comments to Dr A. Mebtoul email@example.com
The people of Britain voted for a British exit from the European Union (EU) in a historic referendum on 23 June 2016. What does the Brexit as labelled by all, mean for the United Kingdom of Great Britain and Northern Ireland countries and their peoples? How about each and every aspect of its life and relations with its neighbouring countries of Europe? Could Empire 2.0 for the Brexit from the European Union be the panacea? What about all those countries of the MENA region that never adhered to the Commonwealth proper and yet were and still are either under or within the British sphere of influence?
Here is a view from The Conversation as narrated by Stan Neal , Teaching Fellow in Colonial/Global History, University of Leicester on the present happenings following that seismic Brexit vote. This is literally trying the British parliamentary system to an unprecedented straining level. The Conversation reviews the historical background of the currently debated rebound jump as a palliative replacement to the now vanishing away EU.
As Britain prepares to leave the EU, its new international trade secretary is talking up the potential of trade with the 52 nations that make up the old British empire. Some have even dubbed Liam Fox’s meeting with Commonwealth leaders to discuss trade “Empire 2.0”.
There is an irony here. It comes at a time when populist critiques of the economic consequences of globalisation are frequently combined with nostalgia for Britain’s imperial past. But these views neglect the fact that the British Empire was itself a key agent for economic globalisation and the mass movement of migrant workers in the 19th century.
There appears to be a consensus that Brexit and the election of Donald Trump in the US are the result of low and middle income workers rejecting globalisation – specifically the integration of economies, industries and markets, and the connected movement of goods and workers across national borders.
Brexit is framed as a “backlash” against globalisation, led by those who have been “left behind” as they struggle to find jobs due to competition from migrant workers, while traditional manufacturing jobs move overseas.
At the same time, the historical links afforded by the British Empire have been presented as an alternative to economic over-reliance on Europe. Since the referendum, these Commonwealth nations have been described as “desperate” to agree to free trade deals. And Fox’s meeting with 30 Commonwealth ministers in London appears to confirm that there is more than just imperial nostalgia at play.
Overlooking some facts
There are two big issues with the imperialist view of Britain’s global future. It is based on an over positive view of the British Empire. As argued by the academic Alan Lester, public discussion of Britain’s imperial past tends to focus on positive rather than negative aspects. Plus, it tends to overlook the historical role of the British Empire in facilitating economic globalisation and mass migration.
The First Opium War (1839-1842) is among the most infamous examples of the British Empire’s role in economic globalisation. The opium trade involved private companies smuggling the highly addictive, and prohibited, drug from British India to China. When the Chinese destroyed British-owned opium in an attempt to stop the trade, the British government dispatched gunboats to both restore national honour and guarantee access to this lucrative export market.
At the end of the conflict, in which Britain’s naval technology ensured a decisive victory, the Treaty of Nanjing opened up China’s economy to the world. The treaty required large compensation payments from China, ceded the island of Hong Kong to the British, opened five Chinese treaty ports to foreign trade and ensured that British subjects in China were protected by British laws.
This opening of China to British traders was a key moment in economic globalisation. The Treaty of Nanjing was the first of a number of “unequal treaties” that saw China grant similar concessions to foreign powers. In Chinese history it is seen as the start of China’s “century of humiliation” at the hands of foreign imperialism.
Free trade, free movement
British advocates of opening China to foreign trade, such as the opium smuggler James Matheson, criticised the Chinese market as an archaic monopoly. The Opium War was justified as part of the necessary destruction of economic protectionism, which was heavily criticised by British proponents of free trade.
But the free movement of British goods into China was matched by the movement of people out of China. The opening of the Treaty Ports to foreign powers, economic crisis in Southern China (a consequence of the opium trade) and the discovery of gold in various colonial locations provided the context for some of the largest mass migrations of the 19th century.
A popular destination for Chinese migrants were the British colonies in Australia. Around 55,000 migrants left southern China for Australia between 1851 and 1875. But Chinese immigration met with opposition from Australia’s white working class. Beginning in Victoria in 1855, the second half of the 19th century saw a series of colonial measures designed to prevent Chinese immigration. This culminated in the White Australia policy in 1901.
The contradiction between the British Empire’s role as an agent of economic globalisation and the opposition of white colonists to Chinese immigration was pointed out by Chinese migrants in 1879. In response to the exclusionary political rhetoric sweeping Australia, Lowe Kong Meng, Cheok Hong Chong and Louis Ah Mouy argued:
This outflow of our population was never sought by us. Western powers, armed with the formidable artillery with which modern science has supplied them, battered down the portals of the empire; and, having done so, insisted upon keeping them open.
Empire, economic globalisation and mass migration were connected.
The British Empire did not just open economic markets to trade, it facilitated the movement of migrant workers in the 19th century and beyond. To suggest that the empire offers a potential model for Britain’s role in the world today is to misunderstand this history.