New York (CNN Business) The epic American oil boom is just getting started. OPEC, on the other hand, is stuck on the sidelines. US oil production is on track to spike to a record 13.4 million barrels per day by the end of 2019, according to a recent report by energy research firm Rystad Energy. Texas alone is expected to soon top 5 million barrels per day in oil production — more than any OPEC member other than Saudi Arabia. Oil plunges back into bear market The surge in American barrels — led by the Permian Basin in West Texas — has offset oil blocked by US sanctions on Venezuela and Iran. But all of that US oil is also contributing to a supply glut that last week sent crude into another bear market. OPEC has been forced to scale back its output — a trend that could continue as the cartel tries to prop prices back up. “We continue to see the Permian representing the key driver of global oil supply growth for the next five years,” Goldman Sachs analyst Brian Singer wrote to clients on Monday.
US daily output could soon top 14 million
The shale oil revolution has made the United States the world’s leading producer, surpassing Saudi Arabia and Russia. The ferocity of the US shale oil revolution has caught analysts off guard several times over the past decade. Rystad Energy ramped up its year-end US output forecast by 200,000 to 13.4 million barrels per day. In May, the United States likely produced a record 12.5 million barrels of oil per day, the firm added. All but four million of those barrels were from shale oilfields. That growth is expected to continue. The United States is on track to end 2020 by producing 14.3 million barrels per day, Rystad projects. That’s slightly higher than the firm previously estimated and nearly triple 2008’s output. Of course, analysts could have to rein in those blockbuster forecasts if oil prices crash significantly further. That would force American frackers to preserve cash and pull back on production.
OPEC’s production hits five year low
OPEC remains in retreat as the cartel tries to balance the market by putting a floor beneath prices. OPEC’s oil production tumbled to 29.9 million barrels per day in May, the lowest level in more than five years, Rystad said. OPEC output is down 2.6 million per day since October 2018 — the month before oil prices crashed into the last bear market. Khalid al-Falih, Saudi Arabia’s energy minister, said on Friday that OPEC is close to a deal to extend its production cuts. Those cuts, which Saudi Arabia has borne the brunt of, are due to expire at the end of June. The stock market is ‘spoiled’ by rate cuts” We think that OPEC will at least maintain its output cuts, and maybe even deepen them at their next meeting,” Caroline Bain, chief commodities economist at Capital Economics, wrote in a note to clients on Monday. Rystad dimmed its projection for Saudi Arabia’s oil production from 10.6 million barrels per day to 10.3 million.
Venezuela, Iran under pressure
OPEC’s output could be further hurt by problems in some of its member countries. Iran’s oil exports have plunged because of US sanctions. The years-long collapse of Venezuela’s oil industry has been accelerated in recent months by US sanctions and sprawling blackouts in the South American nation. “There appears little prospect of a recovery in output from Iran or Venezuela any time soon,” Bain wrote. Violence is also threatening oil production in Libya and Nigeria. All told, Rystad Energy estimates 1.3 million barrels per day of oil production is at risk in those four OPEC nations. “Risks to short-term supply are undoubtedly still plentiful,” Rystad analyst Bjørnar Tonhaugen said in the report.
Will crude slide below $50?
Despite all this, analysts aren’t predicting a spike in oil prices. If anything, forecasters are bracing for more pressure on prices, due in part to robust US production. Brent, which has tumbled about 15% since late April to $63 a barrel, should finish the year at around $60 a barrel, according to Capital Economics. The US economy is about to break a record. These 11 charts show why US oil prices, trading at about $54 a barrel, are down nearly 19% since late April. Recent selling has been driven by a spike in oil inventories that suggest demand for crude is deteriorating. Goldman Sachs said that a reversal in the oil demand metrics will be required to prevent US oil prices from sinking below the $50-$60 range.”Our real concern is over demand weakness,” consulting firm Facts Global Energy wrote in a report on Monday. “Have we entered an era where demand will keep falling and we have a lot more oil on our hands than expected?”
Since time immemorial, and all in the MENA region know that growth or rather the lack of it for centuries, has brought only dire consequences. Why has growth been the panacea to any development never questioned? Richard Heinberg, author and speaker, gives us his straightforward opinion in this article of ensia republished here below.
The end of growth will come one day, perhaps very soon, whether we’re ready or not. If we plan for and manage it, we could well wind up with greater well-being.
January 8, 2019 — Both the U.S. economy and the global economy have
expanded dramatically in the past century, as have life expectancies and
material progress. Economists raised in this period of plenty assume that
growth is good, necessary even, and should continue forever and ever without
end, amen. Growth delivers jobs, returns on investment and higher tax revenues.
What’s not to like? We’ve gotten so accustomed to growth that governments,
corporations and banks now depend on it. It’s no exaggeration to say that we’re
collectively addicted to growth.
The trouble is, a bigger economy uses more stuff
than a smaller one, and we happen to live on a finite planet. So, an end to
growth is inevitable. Ending growth is also desirable if we want to leave some
stuff (minerals, forests, biodiversity and stable climate) for our kids and
their kids. Further, if growth is meant to have anything to do with increasing
quality of life, there is plenty of evidence to suggest it has passed the point
of diminishing returns: Even though the U.S. economy is 5.5 times bigger now than it was in 1960
(in terms of real GDP), America is losing ground on its happiness index.
So how do we stop growth without making life
miserable — and maybe even making it better?
To start with, there are two strategies that many
people already agree on. We should substitute good consumption for bad, for
example using renewable energy instead of fossil fuels. And we should use stuff
more efficiently — making products that last longer and then repairing and recycling them instead of tossing them in a landfill. The reason these
strategies are uncontroversial is that they reduce growth’s environmental
damage without impinging on growth itself.
But renewable energy technology still requires
materials (aluminum, glass, silicon and copper for solar panels; concrete,
steel, copper and neodymium for wind turbines). And efficiency has limits. For
example, we can reduce the time required to send a message to nearly zero, but
from then on improvements are infinitesimal. In other words, substitution and
efficiency are good, but they’re not sufficient. Even if we somehow arrive at a
near-virtual economy, if it is growing we’ll still use more stuff, and the
result will be pollution and resource depletion. Sooner or later, we have to do
away with growth directly.
Getting Off Growth
If we’ve built our institutions to depend on
growth, doesn’t that imply social pain and chaos if we go cold turkey? Perhaps.
Getting off growth without a lot of needless disruption will require coordinated
systemic changes, and those in turn will need nearly everyone’s buy-in.
Policymakers will have to be transparent with regard to their actions, and
citizens will want reliable information and incentives. Success will depend on
minimizing pain and maximizing benefit.
The main key will be to focus on increasing
equality. During the century of expansion, growth produced winners and losers,
but many people tolerated economic inequality because they believed (usually
mistakenly) that they’d one day get their share of the growth economy. During
economic contraction, the best way to make the situation tolerable to a
majority of people will be to increase equality. From a social standpoint,
equality will serve as a substitute for growth. Policies to achieve equity are
already widely discussed, and include full, guaranteed employment; a guaranteed
minimum income; progressive taxation; and a maximum income.
These are ways to make economic shrinkage
palatable; but how would policy makers actually go about putting the brakes on
Meanwhile we could begin to boost quality of life
simply by tracking it more explicitly: instead of focusing government policy on
boosting GDP (the total dollar value of all goods and services produced
domestically), why not aim to increase Gross National Happiness — as measured by a
selected group of social indicators?
These are ways to make economic shrinkage
palatable; but how would policymakers actually go about putting the brakes on
One tactic would be to implement a shorter
workweek. If people are working less, the economy will slow down — and
meanwhile, everyone will have more time for family, rest and cultural
We could also de-financialize the economy,
discouraging wasteful speculation with a financial transaction tax and a 100
percent reserve requirement for banks.
Stabilizing population levels (by incentivizing
small families and offering free reproductive health care) would make it easier
to achieve equity and would also cap the numbers of both producers and
Caps should also be placed on resource extraction
and pollution. Start with fossil fuels: annually declining caps on coal, oil
and gas extraction would reduce energy use while protecting the climate.
Altogether, reining in growth would come with a
raft of environmental benefits. Carbon emissions would decline; resources
ranging from forests to fish to topsoil would be preserved for future
generations; and space would be left for other creatures, protecting the
diversity of life on our precious planet. And these environmental benefits
would quickly accrue to people, making life more beautiful, easy and happy for
Engineering a happy conclusion to the growth binge
of the past century might be challenging. But it’s not impossible.
Granted, we’re talking about an unprecedented,
coordinated economic shift that would require political will and courage. The
result might be hard to pigeonhole in the capitalist-socialist terms of
reference with which most of us are familiar. Perhaps we could think of it as
cooperative conservatism (since its goal would be to conserve nature while
maximizing mutual aid). It would require a lot of creative thinking on everyone’s
difficult? Here’s the thing: ultimately, it’s not optional. The end of growth
will come one day, perhaps very soon, whether we’re ready or not. If we plan
for and manage it, we could well wind up with greater well-being. If we don’t,
we could find ourselves like Wile E. Coyote plunging off a cliff. Engineering a
happy conclusion to the growth binge of the past century might be challenging.
But it’s not impossible; whereas what we’re currently trying to do — maintain
perpetual growth of the economy on a finite planet — most assuredly is.
The analysis of demographics in some countries, often forgotten in many studies, raises the issue of both development and national security. Because without sustainable development, it eventually could constitute a real social time-bomb. Algeria’s challenges facing its population pressure getting more acute every year will have to be addressed and at the earliest.
Whilst the evolution of the world’s population increased per the below chart.
The demographers estimate that the global human population is increasing by 246,000 inhabitants per day, a result equal to the difference between 403,000 births and 157,000 estimated deaths per day on Earth, representing an increase of 90 million people per year. By geographical area on average in 2017, Asia represents 4,504,4280,000 inhabitants or 59.7%, Africa 1,256,268,000 is 16.6%, Europe, the richest zone in the world, 742,741,000 is 9.8%, Latin America and the Caribbean 645,593,000 or 8.6%, USA and Canada 361,208,000 or 4.8%, Oceania, 40,691,000 or 0.5% and Antarctica 1,500 or 0.0% for a total of 7,550,262,000 inhabitants.
The growth of the African population is going to be more important during this period. According to the INED of France https://www.ined.fr/ , the population of Africa is going to double between 2017 and 2050, it will rise from 1.25 billion inhabitants to 2.574 billion. On the other hand, the population World should Tend towards 10 billion human beings (9.846 billion).
What about the evolution of the Algerian population?
The figures given by the NSO (National statistical Office) on forecasts of the evolution of the Algerian population by 2030 would be 51,26 million. And according to the current rate hypothesis of 2.4 children per woman and by 2050 to reach 65 million inhabitants, data that must be correlated with life expectancy.
While it is 77.1 years for men and 78.2 for women, it will at birth be 81 years for men and 83 years for women in 13 years. The figures of the INED confirm the trends of the NSO, showing that the Algerian population is young, constituted at 29% of under 15 years, the over 65 years representing about 6%. According to the INED, the forecast on the strong growth of the Algerian population over the next 33 years is due to several annual births of 1,103,000 and a relatively high fertility index (number of children per woman) of 3.1 whereas countries of the Mediterranean basin such as Morocco with 2.4, Tunisia, 2.4, France, 1.9 and Libya, 2.4 have much lower rates. Egypt has however a higher one with an index of 3.3 but Niger occupies the first place in the world ranking with the highest index of 7.3.
What is the spatial distribution of the population?
According to data for 2016, the 12 provinces with a density of less than 20 inhabitants per km² account for 89% of the country’s area with just 13% of the population. The 36 other provinces, all located in the north, have a higher density of more than 120 inhabitants per km², representing 11% of the area, approximately 240,000 km2 and includes 87% of the population.
Among these 36 provinces of the north, the highest densities are found around the large agglomerations of Algiers, Oran, Constantine and Annaba, then come the more rural coastal provinces, then the inner land provinces and finally the wilayas close to the Sahara.
More precisely and in descending order we have: Algiers, Oran, Boumerdes, Constantine, Annaba, Mostaganem, Tizi-Ouzou, Bejaia, Tipaza, Jijel, Sétif, Mila, Skikda, Chlef, Bouira, Ain Defla, Ain-Temouchent, Bordj Bou Arredj, Relizane, Mascara, El Tarf, Guelma, Tlemcen, Souk Ahras, Tissemsilt, Médéa, Batna, Oum El Bouaghi, Sidi Bel Abbes, Sila, Saida, Tiara, Khenchela Biskra, Laghouat and Djelfa.
The other provinces like El Oued, Naama, Ghardaia, El Bayath, Ouargla, Bechar, Adrar, Tamanrasset and Illizi come from far behind.
Good governance and social purpose
Satisfying the needs of a given population must obligatorily whilst considering the new transformation of the world, link economic and social dynamics to achieve some reliability.
The set of previous data shows that in the event of non-development, the demographic pressure would constitute a real social timebomb. As demographic pressure involves increasing needs such as more food consumption and durable consumer goods, more infrastructure, more schools, more training centres and hospitals. Hence the importance for any government to have a forward-looking vision
It is also a matter of thinking already of the diversification of the national economy to create more jobs to meet the needs of an increasingly demanding population. For that, with the scarcity of financial resources, which is likely to impact development projects, the urgency of a new governance re-foundation would be required.
Would it suffice to say that a reorientation of the current socio-economic policy to have necessarily a growth rate higher than the population growth rate otherwise the rate of unemployment will increase (rate of Growth greater than 7/8% over several years to create 350,000 / 400,000 new workstations per year)?
Does not this mean also the imperative to abandon the old patterns of the 1970s especially in the field of industrial policy, to adapt to the Fourth World Economic Revolution which promises to be irreversible and on us by 2020 through 2030, based on networks, more social dialogue and more decentralization, not to be confused with deconcentration.
In its well-known IMF Country Focus blog, it holds that Egypt’s economy is recovering, supported by prudent macroeconomic policies and initial bold reforms aimed at addressing the major challenges that have confronted the economy in recent years. The task now is to deepen reforms to raise economic growth further, make it last, and spread its benefits to Egypt’s rapidly growing population and its youth and women, the IMF says in its latest economic health check.
Young women in Al-Azhar Park, Cairo, Egypt. The country must integrate its women and youth into the workforce to keep its economy growing (photo: iStockPhoto/jcarillet
After more than a year since the launch of the economic reform program, GDP growth is strengthening and inflation is declining. The government trimmed the budget deficit, tourism revenues and remittances are increasing, and the country’s foreign exchange reserves have been rebuilt. The floating of the pound and the initial steps to improve the business climate have helped boost growth.
“This macroeconomic turnaround at home and the supportive global economic environment provide a unique opportunity to carry the reform momentum into areas that have historically been hard to tackle. Deep and lasting structural reforms are needed to create jobs as speedily as needed for Egypt’s growing population,” said Subir Lall, head of the IMF team for Egypt.
Below are the IMF’s key recommendations.
Making stability last
Egypt must entrench the stability attained thus far. This entails preserving the flexibility of the exchange rate and further reducing inflation. The government should also continue to lower the budget deficit to contain public debt. For this purpose, the IMF suggests:
Collecting more revenue to pay for much-needed social services and to invest in education, health, and infrastructure. Reducing tax exemptions, making the tax system more progressive (richer people pay progressively more in taxes), and making tax administration more efficient will facilitate this process. Revenue could grow by 4 percent of GDP in the medium term as a result, analysis in the report suggests.
Eliminating most fuel subsidies, which benefit mainly the rich, and allowing fuel prices to change in line with costs: This would protect the budget from movements in global oil prices and the exchange rate, and safeguard priority spending on social programs and necessary infrastructure.
Egypt launched a reform program when its economy faced rising imbalances that led to weakening growth, high public debt, a widening current account deficit, and declining official reserves. To support the homegrown reforms, in November 2016 the government initiated an IMF-supported arrangement to restore the stability of the country’s finances and promote growth and employment, while shielding lower-income households from the adverse effects of the changes. On December 20, 2017, the IMF Executive Board approved the third installment of the three-year, $12 billion Extended Fund Facility.
Helping low-income families
Although economic stabilization is critical, Egypt also needs to protect its lower-income families. This requires continuously improving the efficiency of social assistance by reducing price subsidies and expanding better-targeted cash transfer programs such as Takaful and Karama to free up resources for those who need them most, while avoiding the buildup of unsustainable public debt.
Letting the private sector flourish
Egypt’s growing population needs about 700,000 new jobs every year, which is possible only if the private sector becomes the main engine of growth. For that to happen, the state—which has a prominent role in the Egyptian economy—needs to step back from certain sectors and make room for the private sector to invest and grow.
To this end, priorities include ensuring fair competition for private companies in the markets for their inputs and products, improving the governance and transparency of state-owned enterprises, reducing the perception of corruption, improving access to financing and land, and integrating more women and youth into the labor market.
The global economic recovery that has started mid-2016 is gaining momentum with growth accelerating according to a report by the International Monetary Fund (IMF) published with however a warning that this 2017 global recovery is incomplete with MENA’s share modest.
Growth in the MENA countries dropped from 5.1% to 2.2% so far in 2017 but is anticipated to get back to 3.2% in 2018.
Political unrest was found to be still hampering and / or delaying economic recovery generally, but more specifically in the MENA region where different tensions subsist in several of its countries. Geo-political risks continue to weigh on all investments whether domestic and / or international.
Nevertheless, Djibouti has the highest growth in 2017 with 7%, followed in this order by Morocco, Egypt, Mauritania, and Sudan and Kuwait.
Yemen, Syria, Iraq would obviously be going through recession because of either their on-going political tension or unrest. The effect of oil prices’ drop would be affecting all hydrocarbons exports related economies of the Gulf and North Africa with budgetary restrictions. With money oversupply in these latter countries, inflation is bound to reach unforeseen heights but is nonetheless forecast to generally reach an estimated 7.1%.
Excerpts of the IMF blog written by Maurice Obstfeld on October 10, 2017, follows;
The global recovery is continuing, and at a faster pace. The picture is very different from early last year, when the world economy faced faltering growth and financial market turbulence. We see an accelerating cyclical upswing boosting Europe, China, Japan, and the United States, as well as emerging Asia.
The latest World Economic Outlook has therefore upgraded its global growth projections to 3.6 percent for this year and 3.7 percent for next—in both cases 0.1 percentage point above our previous forecasts, and well above 2016’s global growth rate of 3.2 percent, which was the lowest since the global financial crisis.
For 2017, most of our upgrade owes to brighter prospects for the advanced economies, whereas for 2018’s positive revision, emerging market and developing economies play a relatively bigger role. Notably, we expect sub-Saharan Africa, where growth in per capita incomes has on average stalled for the past two years, to improve overall in 2018.
The current global acceleration is also notable because it is broad-based—more so than at any time since the start of this decade. This breadth offers a global environment of opportunity for ambitious policies that will support growth and raise economic resilience in the future. Policymakers should seize the moment: the recovery is still incomplete in important respects, and the window for action the current cyclical upswing offers will not be open forever.
Global recovery still incomplete
First, the recovery is incomplete within countries. Even as output nears potential in advanced economies, nominal and real wage growth have remained low. This wage sluggishness follows many years during which median real incomes grew much more slowly than incomes at the top, or even stagnated. Drivers of growth including technological advances and trade have had uneven effects, lifting some up but leaving others behind in the face of structural transformation. The resulting higher income and wealth inequalities have helped fuel political disenchantment and scepticism about the gains from globalization, putting recovery at risk.
Second, the recovery is incomplete across countries. While most of the world is sharing in the current upswing, emerging market and low-income commodity exporters, especially energy exporters, continue to face challenges, as do several countries experiencing civil or political unrest, mostly in the Middle East, North and sub-Saharan Africa, and Latin America. Many small states have been struggling. About a quarter of all countries saw negative per capita income growth in 2016, and despite the current upswing, nearly a fifth of them are projected to do the same in 2017.
Finally, the recovery is incomplete over time. The cyclical upswing masks much more subdued longer-run trends of productivity and demographics, even correcting for the arithmetical effect of more slowly growing populations. For advanced economies, per capita output growth is now projected to average only 1.4 percent a year during 2017–22 compared with 2.2 percent a year during 1996–2005. Moreover, we project that fully 43 emerging market and developing economies will grow even less in per capita terms than the advanced economies over the coming five years. These economies are diverging rather than converging, going against the more benign trend of declining inequality between countries due to rapid growth in dynamic emerging markets such as China and India.
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.