“Developing an angel investor pool in the Middle East will create more opportunities and will strengthen regional economic growth” said Ramesh Jagannathan, Managing Director of startAD when introducing his article for Arabian Business weekly dated March 16, 2019.
Financing the angel investment market in Africa, Asia, Europe and America is estimated to be worth $50bn
We live in an exciting age for entrepreneurs. Fuelled by governments in the Middle East, the desire of transforming to an entrepreneurial based economy and boosting investment into building a healthy start-up ecosystem is high-up on the agenda. While there are sufficient funds to fuel potential start-ups in the ecosystem, the risk averse nature of venture capital (VC) firms mean they tend to concentrate their investments in later stage start-ups with crisper valuations. In a mature ecosystem, less than 1 percent of start-ups receive VC funding, and in emerging markets, this number drops by a factor of two. As VC investments continue to move towards more mature start-ups, there is a widening void of funding for early stage start-ups. The effect is not as severe in mature ecosystems as in an emerging ecosystem for a number of reasons.
Angel investors have traditionally filled this void. For example, in the US, annual angel investments of $24bn are being made in over 64,000 start-ups. In fact, 74 percent of all Silicon Valley investments are from entrepreneurial angels, who were previously a founder or a CEO of their own start-up. The phenomenon of “founders funding founders” highlights the organic nature of the process, that they are “local” and have a deep understanding of the entrepreneurship ecosystem and play a vital role in building the ecosystem. This deep knowledge helps to mitigate some of the risks that come with ambiguous valuation of early stage start-ups. More than 60 percent of the angels become active mentors of the start-ups they have invested in and generally take a board seat. More than half of them have a technology background.
By 2030, 88 percent of the next billion people joining the middle class will primarily come from India and China
Having the “right” angel investor tends to de-risk the entrepreneurial process and increases the start-ups’ success rate in raising funds in future rounds. Angels generally see 11 percent of their portfolio producing positive returns.
On the other hand, in emerging ecosystems, there is a dearth of previously successful entrepreneurs, thereby creating a “catch 22” situation. The time scale of the process to build a sustainable entrepreneurial ecosystem is made more acute by the fact that 67 percent of start-ups fail at some point in the process due to inability to raise a subsequent round of financing. The paradox is this: to have a healthy, sustainable entrepreneurial ecosystem, one needs a significant pool of high quality start-ups to cater to a large consumer middle-class and angel investors who have been successful entrepreneurs, preferably within the ecosystem. In other words, while having significant individual or group (eg syndicates) wealth is necessary, they are definitely not sufficient to build a robust ecosystem in an emerging economy, if the wealth is not “hard-wired” to local entrepreneurial experience. Ecosystems are organic in nature.
In India and China, this enigma has been resolved. While the pool of technology talent in these two countries has always been immense, due to the absence of middle-class, post WWII saw a significant “brain drain” from India and China to the US and Silicon Valley. The exodus of the “cream of the crop” from India, especially from the Indian Institutes of Technology (IITs), was unstoppable after the 1970s and from China since 1979, when the Chinese government started to send its best and brightest students and scholars to the US to catch up with western science and technology. By 1990, about 33 percent of all scientists and engineers in Silicon Valley were from India and China. Of these. 71 percent of these Chinese and 87 percent of these Indians arrived after 1970.
Going forward, by 2030, 88 percent of the next billion people joining the middle class will primarily come from India and China. We are now seeing a significant reverse “brain drain” of Indians and Chinese engineers, scientists and investors back to their homelands. About 80 percent of those returning hold graduate degrees in science, technology or business. China now boasts a sound angel investment culture, and while it’s still in its early stages in India it is gaining steam rapidly as the VC infrastructure is getting foundationally strong.
Turning our focus now to the UAE, and the GCC countries, the opportunity to “ride the wave” of India and China’s global tech dominance is crystal clear. But there are still gulfs to cross, such as the absence of a large, local technology talent pool. Without a disciplined and informed state-of-the-art process that dovetails to a VC infrastructure – by leveraging the local societal sensibilities and strategic inter-governmental alliances – the strength of access to large sums of local capital could quickly become our Achilles’ heel.
By all the ingredients for a master recipe to create a dominant UAE digital economy are in place and we need to diligently prepare, suit up and ride the long wave
Peter Thiel, co-founder of PayPal, discussed the role of governments in stimulating entrepreneurial ecosystems and compares the strengths of funding (supply side) versus founding based (demand) policies. Thiele recommended supply side policies as a mechanism to catalyse growth. However, in emerging economies, we could describe it as a “many body problem”.
We need to stimulate the process of accelerating the flow of global start-up talent into the ecosystem through the UAE.
Besides the government, this process should embed the local competency private sector stakeholders, such as in aviation, energy, transportation and logistics and finance industries. The Venture Launchpad programme at startAD is a classic example that shows significant promise.
Simultaneously, we should educate the regional angel investors about the mechanics and rigors of angel investment in digital start-ups and democratise access. The annual Angel Rising Symposium, now in its fifth year, brings the best minds from around the globe to discuss the best practises that are regionally relevant. The third piece of the puzzle is about building local capacity. StartAD and Khalifa Fund are partnering together to build the acceleration ramp to the global digital economic highway through programmes such as Ibtikari and Pitch@Palace.
All the ingredients for a master recipe to create a dominant UAE digital economy are in place and we need to diligently prepare, suit up and ride the long wave, leading the MENA region.
The Gulf island kingdom of Bahrain is said to ask Allies for Aid. As a minuscule islet tucked between Qatar’s and the Arabian peninsulas, it has been among the hardest hit in the Gulf Cooperation council countries by the currently low oil prices. As a matter of fact, all countries of the Gulf are reported to be facing yearly state budgets restrictions, developments curtailment and investments restraints generally.
Per a recent Bloomberg report, Bahrain has asked its Gulf allies, notably Saudi Arabia, the United Emirates and Kuwait for financial aid whereas ironically, it was once promoted as a potential financial center of the region. This request is believed to be critical to help prevent a potential devaluation of its currency.
This past summer, the IMF mentioned that the country’s budget deficit although narrowing this year, would very likely to remain the largest in the region.
Bahrain has asked Gulf allies for financial assistance as it seeks to replenish its foreign-exchange reserves and avert a currency devaluation that could reverberate across the region, according to people with knowledge of the talks.
Saudi Arabia and the United Arab Emirates were approached, two of the people said. A third person said Kuwait was also asked. The countries responded by requesting the island kingdom do more to bring its finances under control in return for the money, the people said on condition of anonymity because the discussions were private. The talks are at an early stage, one person said.
The slump in oil prices has battered the six-member Gulf Cooperation Council, at times raising questions over whether a dollar peg seen as a bedrock for economic stability for more than three decades was sustainable. While bets against the region’s currencies have subsided this year, a devaluation of a GCC member would risk shifting the attention to others. Gulf central banks, including Bahrain’s, have repeatedly brushed aside talk of abandoning their exchange-rate regimes.
“Most people are fully expecting the other Gulf countries to come to Bahrain’s aid,” said Jason Tuvey, a London-based economist at Capital Economics. “If Bahrain was forced to devalue its currency it would probably start to raise questions about other currency pegs.”
Bahrain, the Gulf’s smallest economy and a close Saudi ally, has been more vulnerable to slumping oil prices and regional political instability than richer neighbors. Several countries in the region have cut spending and curtailed handouts to their citizens. The International Monetary Fund expects Bahrain’s budget deficit to be the highest in the GCC this year even as it narrows.
The central bank’s foreign reserves, including gold, have tumbled about 75 percent since 2014 to just above 522 million dinars ($1.39 billion) in August, according to the most recent official data. Without aid or a recovery in oil revenue, authorities may struggle to keep the currency’s peg to the U.S. dollar — maintained at 0.376 Bahraini dinars.
Expectations among investors and credit-rating companies that rich Gulf states would prevent Bahrain’s difficulties from morphing into a full-blown financial crisis have cushioned its assets and allowed it to tap global bond markets as recently as September, when it raised $3 billion. Bahrain’s debt risk, measured by five-year credit default swaps, has dropped more than 60 basis points to 241 as of Tuesday, according to data compiled by Bloomberg.
Saudi Arabia led a military intervention to support Bahrain’s government during protests that broke out in 2011. Authorities have repeatedly blamed the instability on Shiite-ruled Iran. Bahrain is also a member of a Saudi-led coalition boycotting neighboring Qatar.
A bond prospectus in September included a warning from authorities that falling reserves carried the risk of a currency depreciation. The central bank, being a “significant” lender to the government, may not be able to maintain the peg, according to the document seen by Bloomberg News. Bahrain didn’t cite that risk in its prospectus in 2013.
Officials in Bahrain, the U.A.E. and Kuwait didn’t immediately respond to requests for comment on the aid talks. Saudi officials couldn’t immediately be reached.
November 23, 2017 Local Elections : harbingers of an uncertain future ?
A presidential decree to call for the elections of the Municipalities and Governorates assemblies scheduled it to take place on Thursday, November 23, 2017. We propose well in advance of these local elections to review the New Missions of Local Authorities amidst budget pressures.
The crisis linked to the fall in the price of oil and its impact on the country’s budget must bring the authorities to change their discourse on the economic role of both the central State and Local Authorities.
The pursued policies in recent years regarding the Local Authorities management need to be reviewed, because the era of transfers of the State budgets to overcome deficits of management is over. Sources of funding because of budget restrictions would have to move in the direction of a rationalisation of expenditure; management in Local Authorities remains imprinted with a strong tendency to spending.
Local Authorities’ welfare of local business/citizens
The Department of Municipal Affairs made up of 48 Local Authorities (Wilayas or provincial councils as shown in the map below) and 1541 towns and cities (APC) that must have other missions than to be limited to one stop shop windows for support of certain basic public services other than by relying mainly on the State budget.
Reports prepared by the services of this Department show a negative record of boosting the local economy, taxes being insufficiently recovered, some goods are exploited without compensation and others diverted from their vocation. Local officials in the future must have a vision and visibility for the development of their municipalities, considering the specific features and potential of each and the aspirations of its citizens, officials of governorates and elected officials looking for interest restricted to patronage, and populist discourse without projection into the future.
The collection of local taxes, not being a priority, local authorities have not directed significant funds allocated by the State to the valorisation and the case of multiple resources available to them. For the efficient management of the spaces, it comes to have a snapshot of the current situation. In the Algerian system, as recalled earlier, local authorities are essentially constituted of entities assisted by a State which, in addition to its own prerogatives, was intended to be the single manager of the economy.
Local officials were then only performers of policies and decisions taken at central level and which were reflected at the municipal level by the completion of actions and programmes in arbitration hearing by the central organ of the planning, annual plans and budgets. For example, in addition to highly directional guidance involved already allocated programs, municipalities and governorates were under the close supervision of the central State through the Ministry of the Interior.
The State supported virtually all social policy and management of land and urban planning. Guidelines were thus given at one time to the governorates, for the transfer of land for building and all the housing policy was almost entirely entrusted to the governorates. This situation resulted in a disempowerment of the central authority whilst de-responsibilise governors whom with their sub governors and head of cities were directly confronted with all citizens’ grumbling, which is driven by the needs of housing, quality of life, employment and other.
Anarchy as currently evidenced by growth and disorderly extensions of our cities, and especially the largest of them, can only increase, if we continue to accept that local authorities are still left to themselves to meet, under duress, all social demand for space to build. Because, excessive centralization, promotes an mod-operandi of authoritarian management of public affairs, governance by Decree, i.e. a governance that is needed by the force and authority away from the real needs of the populations and produces the blocking of society.
History clearly shows that if centralization was necessary in a first phase, it quickly reaches its limits and the countries that have developed real decentralisation and not de concentration only, synchronizing local and central governance are those to have succeeded best in their development. A reorganization of local authorities whose base is the city, for a more participative and citizen oriented society would assuming other ways of managing departments in the central State be best in the current entanglement.
It is in this context that local authorities should appear as unifying all initiatives that contribute to the improvement of the territorial space and make the transition from welfare fed communities to locally committed companies and citizens responsible for their own development and marketing of their respective territory. More generally, the implementation of effective decentralization involving the local players, must lead to better real Government as felt as such by the population, the argument of base residing in geographic proximity.
This would mean that there is a local solution to a local problem and that this is necessarily better than a national solution.
The structure that seems most appropriate to create such dynamism, is that of regional Chambers of Commerce that bring together State, public and private enterprise, banks, professional training centres, and universities.
Decentralization means not de concentration
The process of decentralization, a modern State must allow local communities, to take all prerogatives and all means enabling them to ensure full responsibility for management of their respective territories, while preserving the uniqueness of the national policies and strategies which, generally, must transcend local conditions. In addition to the redesign of the status of the local administration, it goes without saying that new prerogatives resulting for the local authority can be exercised only if they are accompanied by a reform of local finances.
Thus, every local Governorate must have a separate budget and a certain autonomy of its use, so that the citizen can judge the capacity of the local administration to manage its territory of residence and to improve their living conditions. At the same time, the State must safeguard its fundamental missions of guarantor of everything that makes the interests of the national community (cohesion and social justice, preservation of public heritage, equal opportunities for the development of all citizens).
Autonomy of the local management may be exercised in respect of policies and strategies that the State implements, both to adjust and guide the economic and social development of the country, to help and organize the equitable development and management of all components of the national space. The full success of this eminently political complex process involves querying the role of the State and its articulation with the market in the future socio – economic strategy, which refers to both local and international mode of governance.
All the mentioned previously actions would involve a reappraisal of the current political, social and economic arrangements that must be based on good governance, on the knowledge economy and on entrepreneurs of wealth creation within a context of the rule of law. The goal is to foster a participatory and citizen society through the restructuring of the party system as well as civil society as a powerful network of mobilization to avoid confrontation direct citizens/security forces. firstname.lastname@example.org
Creating three million jobs would require a growth rate between 2017 and 2020 of a minimum of 7 to 8%. The results of the bodies responsible for employment of the ANDI, the ANSEJ as much as of the NACC, are mixed despite their many allowed benefits. This is the New Government vs. social and budgetary tensions dilemma that the country’s newly appointed Prime Minister has to face up to within the remaining time of the president’s mandate.
However, the growth rate is relatively low in reference to public spending of 3% on average between 2000 and 2016. According to the ONS, quoted by APS, in April 2017, the employed population was estimated at 10.769 million against 10.845 million people in September 2016, registering a negative balance of the 76,000 people where six unemployed on ten on average are long-term unemployed.
Utopias or real socio-economics of Algeria
The International Monetary Fund (IMF) report on the global economic outlook for Algeria shows that if in 2016, the growth of the real GDP was 4.2%, the situation could significantly deteriorate in 2017 and 2018. Indeed, the IMF expects growth of 1.4% of GDP in 2017 and 2018, the Algerian economy should know a stagnation, with a growth rate of its GDP of only 0.6%.
A direct result of this economic slowdown would be the unemployment rate that should substantially increase over the same period and is estimated at 13.2% in 2018 with an inflationary trend always according to the IMF that we are trying to compensate by creating jobs with very low added value. This is mainly due to the decline in spending in infrastructure, up to now key engine of growth and the business climate.
Similar countries with spending of a 1/3 of that of Algeria have more significant growth rates.
What will happen if the oil price stagnated at 50 – 55 Dollars a barrel or even less at between 40 – 45 dollars? Would the risk of social tensions in the case of dwindling financial resources, while posing no problems for three years be on the increase? But what are the $100 billion of foreign exchange reserves in July 2017, with an output of currency goods-services and capital transfers of $60 billion and inflows of foreign currency of only $29 billion or $32 – 35 billion dollars by end of 2017 if the price of a barrel is maintained between $50 – 55 despite all restrictions on import?
According to various statements of Mr. Ahmed OUYAHIA, prior to his appointment as Prime Minister saying : “If we don’t get over not standing on the economic plan, we risk ending up at the IMF” So what to do?
Contents of the Finance Act 2018?
Would we still hold on, in the Finance Act 2018 for budgetary calculation the $50 dollars a barrel like for 2017’s?
Would we above the regular 11% tax?
Can we have a VAT increase from 7% to 9% for the reduced rate, and 17% to 19% for the higher band even with the risk of inflation and unfair indirect taxes applied to all; direct tax being a sign of a greater citizenship?
Will we restrict all spending: where the capital budget that has been reduced to $22 billion by 2016 as a result of the latest budget cuts as much as the operating budget of about $41 billion that is incompressible unless of a deep public service redesign?
Will we establish a tax of wealth as based on accurate assessment of the distribution of income and the model of consumption by social strata and mastering of the importance of the informal sphere?
Will we to avoid external debt go towards a de-monopolisation program and further privatization with partial or total transfer of ownership of a number of public companies whose financial situation is deteriorating due to workload and management issues where Public Treasury has supported for more than $70 billion dollars in sanitation between 1974 and 2016 or with over 70% returned to the starting block?
Will we go for targeted subsidies where according to the Government about $18 billion was spent transfers in 2016, while revenues in foreign currency during the year fell by $37 billion,?
What will the socio-economic policy be?
Will it always use the Dinar (DZD) skidding to more than DZD127 a Euro as a means of adjustment of the deficit of the balance of payments?
Would the current industrial policy lead the country to debt therefore dependence and to correct it how would a dynamic industrial sector which represents less than 5% of the gross domestic product and 80 / 85% of raw materials of public and private sector coming from overseas and what would without proper analysis, the rush into car assembly plants with a low rate of integration bring?
Will we still keep to that out of date policy from the 1970 – 1980 years at the time of the fourth economic revolution looming between 2020 and 2030 as based on good governance, the economy of knowledge and environmental challenges?
What will a program that is dated, accurate and taking into account of the transformation of the new world of structural reforms to combat the prevailing central and local bureaucracy through to a real decentralization of the financial system onto a social and educational system as hub of the creation of value and the thorny problem of land?
Will we hang on to the same 2009 ownership share rule as applicable to all sectors instead being targeted and thus encouraging FDI in nonhydrocarbon sectors?
What will the proposed import licenses without any strategic vision nor taking into account that the Algerian economy is dominated by the service sector where small trade and services represent 83% of the economic area with dominance of the informal sphere?
How to apply one of the articles of the new Constitution and not differentiate the State sector from that of the private sector for all national and international creation of wealth enterprise by the lifting of all constraints of the business community?
And finally how do we go about organizing an economic and social dialogue so as to carry out reforms with economic and social credible intermediation?
Strategic vision within the new world
All political, social and economic actors are riveted to the presidential deadline of April 2019, but maintaining the status-quo until then could be suicidal. We must as of now envisage through the right strategic vision certain short-term economic policies and not appearances that might increase economic and social tensions and ultimately lead to a further deterioration in the purchasing power of the Algerians.
Any increase in the rate of inflation will involve primary banks interest rates rising, to avoid bankruptcy and discouraging investment. Without structural reforms related to good governance, there may not be genuine development in Algeria with the added risk of returning to the IMF in 2019 – 2020.
There are, for Algeria, opportunities to increase its growth rate because of its substantial potential that despite the crisis would assume a new strategic governance
The major challenge for Algeria would mean to implement operational instruments capable of identification, 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, and because without sustainable development there is necessarily increase of insecurity which has a growing cost. Strategic objective must reconcile modernity and authenticity, economic efficiency and a deep social justice if Algeria wants to avoid its marginalization from within the global societies. The passage of the status of ‘support against the rentier economy’ to that of the rule of law “based on work and intelligence” is a major political gamble since it simply involves a new social contract and a new political contract between the Nation and the State.
The MENA region countries are made of two types of countries, those of oil and gas producers and those that are not. In the first group, countries are ranked according to the size of their gross domestic product, taken as such or as per its capita version. Other means of sizing up economies have been conjured up over time, but most importantly, it was the need to look closer into each economy and try to discern any prevailing trend that caught on. This notion of ranking as proposed by Statista on August 1, 2017 according to the size of hydrocarbons related exports revenues has lately become some sort of normative piece of knowledge from amongst the digital data plethora of today.
Commenting such chart would be irresistible when assessing positions and percent of oil dependency of the various countries not only for the countries themselves but also for all those countries that are linked one way or another to each or to a group of these countries. As a matter of fact, it should be noted that there is no greater linkage of countries as that of those of the MENA region obviously for historical reasons but above all for the region’s interrelated and long established human settlements.
The oil price has slumped by some 50 percent since 2014. This has bad repercussions for states that are highly dependent on revenue from oil exports, of which most are members of the Organization of the Petroleum Exporting Countries (OPEC). Nigeria, Venezuela and Saudi Arabia are most dependent on oil revenue. As our chart shows, the current price (even though it has recovered somewhat lately) is still far too low for most OPEC members to balance their budgets. Only Iran and Kuwait are in the clear – if the price stayed stable, which is highly unlikely.
A concoction of sinking oil prices and higher costs for production combined with more state expenditures has undermined OPEC countries’ ability to siphon off enough revenue from oil exports. The organization’s market might has also been undermined by proliferation of alternative production methods, such as the exploitation of shale oil in the United States. This means OPEC’s traditionally high ability to steer prices has dwindled.
This brief analysis is a synthesis of the Doing Business Report 2017 data compiled upto and as of June 1, 2016. The indicators are used within the context of Algeria to analyze economic outcomes of countries of the same calibre as first reviewed back in October 2016 and identify the regulatory reforms of all legislation that are required so as the economies where they have been adopted and the reasons for which they have been implemented have born fruits. The question that such report brings to mind would therefore be about how to improve the Climate of Business in Algeria and how to go about it.
In the meantime, the above mentioned report findings are excerpted below:
Starting a business
Algeria made starting a business easier by eliminating the minimum capital requirement for business incorporation.
Dealing with construction permits
Algeria made dealing with construction permits faster by reducing the time to obtain a construction permit.
Algeria made getting electricity more transparent by publishing electricity tariffs on the websites of the utility and the energy regulator.
Algeria made paying taxes less costly by decreasing the tax on professional activities rate. The introduction of advanced accounting systems also made paying taxes easier.
The authors state at the outset that there are some important areas not covered by the Doing Business report and that it does not evaluate all of the factors such as policies and institutions that affect the quality of the framework of the economic activity of an economy or its competitiveness. It does not for example, consider the macroeconomic stability, the development of the financial system, the size of the market, the frequency of bribery and corruption, nor the quality of the workforce, deadlines and costs as related to the logistics of the import and export of goods, indicators on the cross-border trade, or the cost of international transport as well as the effect of roads, rail, ports and inadequate communication systems that can have on operating a business and their consequences in terms of competitiveness.
However, if this report does not evaluate and/or is not intended to assess the benefits of all social and economic programs funded by tax revenues, assessing the quality and efficiency of the business regulation is something to take into account in the debate on the burden on enterprises regulatory objectives, which may vary from one economy to another.
The score awarded to each country on entrepreneurship is based on the following criteria.
– Procedures, deadlines, costs and supply minimum capital required to create a limited liability company.
– Obtaining a building permit:-procedures, time and costs related to execution of all required formalities and controls of quality and security in the system of obtaining a building permit.
– Connection to electricity: procedures, time and costs of connection to the electric network, electricity supply reliability and transparency of prices.
– Transfer of property: procedures, delays and costs of ownership transfer, and quality of the land administration system.
– Getting credit: laws on the pledging of movable property and credit information system.
– Protection of minority investors: rights of minority shareholders in transactions between related parties and corporate governance.
– Taxes and payments: payments, delays and total pay for a business applying all tax legislation as well as procedures subsequent to its declaration.
– Cross-border trade: delays and costs associated with the export of a product with a comparative advantage.
– Performance of contracts: delays and costs of settlement of a trade dispute and quality of court proceedings.
– Insolvency regulation: delays, costs, results and recovery rates in insolvency cases and solidity of the legislation in this area.
– Regulation of the labour market: labour regulation flexibility and aspect of the quality of employment.
The three main conclusions of this report are:
Europe and Central Asia have improved significantly more commercial regulatory over time than any other region.
It is in the area of entrepreneurship that economies have improved their regulatory processes the most.
The economies in which it is easy to create a business tend to have lower levels of inequality in income on average.
Doing Business 2017 in its 14th Edition gives the following classification:
The first ten are :
New Zealand with a note of
Classification of the major countries.
Ranking of middle of the pack countries
Ranking of countries at lower grades than 50 requiring deep reforms
Ranking of countries with less than 40 points
Républic of Congo
In summary, the deplorable ranking at the 159th of Algeria that belies the euphoric statements of the former Minister of Industry having induced on the line the country’s authorities, and which I had been cautioning against on several occasions the Government, does not reflect the country’s significant potential. There is no more a justifying speech that in anyway no-one believes in, therefore the only way is to go towards the necessary reforms to improve the business climate that primarily depend on Algerians themselves.
This ranking together for that matter many others would explain the collapse of the productive fabric and the importance of all hard currency services outflow and legal capital transfer that annually amounted between 2010 and 2016 to $14 / $15 billion to which the value of imports of goods need to be added for the calculation of currency. These were $60 billion in 2013 and were brought back to $45 / $47 billion in 2016 and are currently extrapolated to be around $45 / $46 for 2017 giving approximately a total of $60 billion still less than what could paralyze the entire economic machine whose integration rate does not anyway exceed 15%.
Let us remember that the reserves of $114 billion as per the official data of both the IMF and the Bank of Algeria as at December 31, 2016. The Governor before the National Assembly on April 12, 2017 gave the amount of $109 billion as at end of March 2017 and as recorded by the official press agency APS.
With the deficit of the balance of payment as shown, during the first five months of 2017 customs statistics and those of the Office of National Statistics, reflecting an outflow of currency between April, May and June 25, 2017, the amount should be less than $109 billion on July 1, 2017.
According to this report, which gives a central place to the analysis of the informal sphere, an effective regulation would facilitate access of companies to the market, creation of jobs, productivity and the improvement of the levels of economic development in general; each new reform of the regulation is associated with a substantial increase in economic growth and thus improvement of the standard of life of the citizens. This report points out to what Haidar & Hoshi (2015) made 31 recommendations to achieve this goal for reform, classified into six different categories, depending on whether the reform is administrative or legal, and according to the level of potential resistance at the political level.