The Massachusetts Institute of Technology asking Why the Mediterranean is a climate change hotspot came up with A new analysis uncovers the basis of the severe rainfall declines predicted by many models.
17 June 2020
Although global climate models vary in many ways, they agree on this: The Mediterranean region will be significantly drier in coming decades, potentially seeing 40 percent less precipitation during the winter rainy season.
An analysis by researchers at MIT has now found the underlying mechanisms that explain the anomalous effects in this region, especially in the Middle East and in northwest Africa. The analysis could help refine the models and add certainty to their projections, which have significant implications for the management of water resources and agriculture in the region.
The study, published last week in the Journal of Climate, was carried out by MIT graduate student Alexandre Tuel and professor of civil and environmental engineering Elfatih Eltahir.
The different global circulation models of the Earth’s changing climate agree that temperatures virtually everywhere will increase, and in most places so will rainfall, in part because warmer air can carry more water vapor. However, “There is one major exception, and that is the Mediterranean area,” Eltahir says, which shows the greatest decline of projected rainfall of any landmass on Earth.
“With all their differences, the models all seem to agree that this is going to happen,” he says, although they differ on the amount of the decline, ranging from 10 percent to 60 percent. But nobody had previously been able to explain why.
Tuel and Eltahir found that this projected drying of the Mediterranean region is a result of the confluence of two different effects of a warming climate: a change in the dynamics of upper atmosphere circulation and a reduction in the temperature difference between land and sea. Neither factor by itself would be sufficient to account for the anomalous reduction in rainfall, but in combination the two phenomena can fully account for the unique drying trend seen in the models.
The first effect is a large-scale phenomenon, related to powerful high-altitude winds called the midlatitude jet stream, which drive a strong, steady west-to-east weather pattern across Europe, Asia, and North America. Tuel says the models show that “one of the robust things that happens with climate change is that as you increase the global temperature, you’re going to increase the strength of these midlatitude jets.”
But in the Northern Hemisphere, those winds run into obstacles, with mountain ranges including the Rockies, Alps, and Himalayas, and these collectively impart a kind of wave pattern onto this steady circulation, resulting in alternating zones of higher and lower air pressure. High pressure is associated with clear, dry air, and low pressure with wetter air and storm systems. But as the air gets warmer, this wave pattern gets altered.
“It just happened that the geography of where the Mediterranean is, and where the mountains are, impacts the pattern of air flow high in the atmosphere in a way that creates a high pressure area over the Mediterranean,” Tuel explains. That high-pressure area creates a dry zone with little precipitation.
However, that effect alone can’t account for the projected Mediterranean drying. That requires the addition of a second mechanism, the reduction of the temperature difference between land and sea. That difference, which helps to drive winds, will also be greatly reduced by climate change, because the land is warming up much faster than the seas.
“What’s really different about the Mediterranean compared to other regions is the geography,” Tuel says. “Basically, you have a big sea enclosed by continents, which doesn’t really occur anywhere else in the world.” While models show the surrounding landmasses warming by 3 to 4 degrees Celsius over the coming century, the sea itself will only warm by about 2 degrees or so. “Basically, the difference between the water and the land becomes a smaller with time,” he says.
That, in turn, amplifies the pressure differential, adding to the high-pressure area that drives a clockwise circulation pattern of winds surrounding the Mediterranean basin. And because of the specifics of local topography, projections show the two areas hardest hit by the drying trend will be the northwest Africa, including Morocco, and the eastern Mediterranean region, including Turkey and the Levant.
That trend is not just a projection, but has already become apparent in recent climate trends across the Middle East and western North Africa, the researchers say. “These are areas where we already detect declines in precipitation,” Eltahir says. It’s possible that these rainfall declines in an already parched region may even have contributed to the political unrest in the region, he says.
“We document from the observed record of precipitation that this eastern part has already experienced a significant decline of precipitation,” Eltahir says. The fact that the underlying physical processes are now understood will help to ensure that these projections should be taken seriously by planners in the region, he says. It will provide much greater confidence, he says, by enabling them “to understand the exact mechanisms by which that change is going to happen.”
Eltahir has been working with government agencies in Morocco to help them translate this information into concrete planning. “We are trying to take these projections and see what would be the impacts on availability of water,” he says. “That potentially will have a lot of impact on how Morocco plans its water resources, and also how they could develop technologies that could help them alleviate those impacts through better management of water at the field scale, or maybe through precision agriculture using higher technology.”
The work was supported by the collaborative research program between Université Mohamed VI Polytechnique in Morocco and MIT.
Erosion of sandy beaches will endanger wildlife, cause massive losses in coastal cities in the world. Mohammed El-Said, in his Egypt related article titled Egypt to lose 1000 km of sandy coasts due to erosion: Study is by any means not exaggerating the potential impact of climate change on Egypt. The country’s habitable space is very limited to 5 per cent. The rest of the land is uninhabitable desert. The population, therefore, concentrated around the narrow Nile Valley and Nile Delta, with some smaller numbers along the Mediterranean and the Red Sea coasts would want to preserve as much as possible of the seafront.
The world’s beaches represent an interface between land and water, and provide protection for coasts from marine storms and hurricanes, but a new study by the European Commission’s Joint Research Centre indicates that without mitigating the effects of climate change and adapting to it, half of the world’s beaches will be vulnerable to erosion by the end of the century.
Erosion of sandy beaches will endanger wildlife and may cause heavy losses in coastal cities that no longer have buffer zones to protect them from rising sea levels and severe storms. In addition, coastal erosion increases the cost of governmental measures to mitigate the effects of climate change.
In the study published last week in the journal Nature Climate Change, researchers expect erosion to destroy 36,097 km, or 13.6% of sandy coasts around the world, including the Egyptian coast, within 30 years. The situation is expected to worsen in the second half of the century as 9,561 km, equivalent to 25.7% of the world’s beaches are estimated to be eroded.
The study provides forecasts of the shoreline’s shape between the years 2050 and 2100. It links changes in the shoreline directly to climate change based on the concentration of greenhouse gases according to the Representative Concentration Pathway (RCP) approved by the Intergovernmental Panel on Climate Change (IPCC). Thus, the study aims to calculate shoreline changes globally based on the ratio of greenhouse gases in the atmosphere.
In the latest report of the IPCC in 2019, scientists studied the greenhouse gas concentration pathway and expect that, by 2100, if countries in the world do not comply with the terms of the Paris climate agreement, average global sea levels will rise between 61 centimeters to about one meter.
Researchers relied on climate data, models, 82 years’ worth of sea level monitoring, and 35 years of beach satellite imaging. They also simulated more than 100m storms and measured their global coastal erosion.
Based on the RCP of greenhouse gases, the study assumes two scenarios for melting ice surfaces. According to the first scenario, if the world continues to emit carbon at the current rate, sea levels will rise by about 80 cm, which means the coastline will decrease by 128.1 meters, and threatens to sink 131,745 km of beaches.
According to the most optimistic scenarios, sea levels will only rise by 50 cm by 2100, and the average coastline retreat will be 86.4 meters if governments adhere to international agreements to reduce emissions and reduce carbon dependence. According to the results of the study, up to 63% of the world’s low coastal areas will be threatened by flooding due to sea level rise and severe storms.
“Climate change will exacerbate the effects of coastal erosion processes, which threatens densely populated areas,” said Michalis Vousdoukas, a researcher at the European Commission’s Research Centre and lead author of the study.
He added that in the best scenarios, Egypt will lose between 35.1% to 50.5% of its sandy beaches due to erosion, which means the erosion of about 1,000 km of Egyptian sandy beaches. The percentage is likely to be even higher in countries like Saudi Arabia and Libya.
Hisham Elsafti, a coastal engineering consultant, and instructor in coastal engineering at Braunschweig Technical University in Germany, explained that according to the study’s expectations, the coasts of the Nile Delta will retreat by more than half a kilometer at the end of the century due to geological and hydromorphological factors.
But Jeffrey S. Kargel, a senior research scientist at the University of Arizona, believes that although the methodology of the study is good and its conclusions are valid, it did not take into account some detailed changes. These changes include the sediment supply and the increase in the production and transport of sand and silt due to the increased melting glaciers, increased surface runoff of corrosion and more sediment supply from expanded agricultural areas, increased sediment supply from dam construction, and reduced sediment transport due to dams in many parts of the world.
Kargel explained that the melting glaciers do not directly affect Egypt, but affect places like Greenland and Alaska. “Construction of dams is the most important for Egypt due to the construction of the High Dam in Aswan, and then there will be a giant reservoir for the huge dam in Ethiopia,” he said.
He added that “when the silt is blocked by reservoirs, this will be an obstacle to the construction of the delta areas, and thus the delta will drop and seawater will submerge its coast with its cities and villages, which will represent a major problem for Egypt.” But he believes that the Egyptian Delta, despite the problems it faces, is “lucky” because it is not subject to hurricanes.
A previous study by the American Geological Society, published in May 2017, indicated that Egypt is one of the countries most affected by climate change, and that between 20 to 40 km of the coast of the Nile River Delta will be flooded with seawater by the end of the century, due to Sea level rise.
Vousdoukas added that the UK expects to lose 27.7% of its sandy beaches, according to the best estimates, and 43.7% according to worst case scenarios. Australia is also expected to be the most affected, as about 15,000 km of its beaches are at risk, followed by Canada as one of the most affected countries, then Chile, Mexico, China, and the United States. It is also expected that more than 680 million Indian citizens living in the low-lying coastal region will be affected by the coastal erosion and climate change.
Glimmer of hope
“The study provides first-of-its-kind forecasts regarding sand beach erosion, taking into account human interventions as well as the effects of climate change and natural factors,” said Vousdoukas. The researcher explained that there is still a glimmer of hope as it can reduce greenhouse gas emissions to prevent 40% of the coastline retreat, but this requires an international commitment to the Paris Climate Agreement and related protocols, and requires some coastal protection measures to protect populated areas.
Elsafti, however, believes that Egypt should work on two main axes to avoid the negative effects of climate change and protect the beaches. The first is the effective contribution to calls to reduce greenhouse gas emissions, and asking major industrial countries responsible for the problem to contribute more effectively to solving the problem by increasing contributions in initiatives such as the Green Climate Fund, which is already participating in funding studies and work to protect Egyptian beaches.
“The second axis is a scientific axis, as Egypt must increase the funding of scientific studies that cross the disciplines required to find engineering solutions suitable for the Egyptian environment and prepare to change the planning of cities and coastal areas and their uses to adapt to the effects of climate change,” Elsafti said.
According to UNCHR, those fleeing their own countries for fear of persecution travel collectively around two billion kilometres per year to reach a safe haven. To honour their resilience and determination and to remind us of the long and tortuous journeys they are forced to make on their way to safety, the United Nations High Commissioner for Refugees (UNHCR) has launched the www.stepwithrefugees.org campaign to mark 2019 World Refugee Day.
The number of migrant and refugee school-age children around the world has grown by 26% since 2000. Eight years on from the beginning of the Syrian conflict, a new paper released today and at an event in the Netherlands looks at the importance of making sure that education systems are set up to address the trauma that many of these children face before, and during their journeys to new countries. In particular, teachers need better training to provide psychosocial support to these children, including through social and emotional learning.
In Germany, about one-third of refugee children suffer from mental illness, and one-fifth suffer from post-traumatic stress disorder. Unaccompanied minors are particularly vulnerable. One third of 160 unaccompanied asylum seeking children in Norway from Afghanistan, the Islamic Republic of Iran and Somalia suffered from post-traumatic stress disorder. Among 166 unaccompanied refugee children and adolescents in Belgium, 37-47% had ‘severe or very severe’ symptoms of anxiety, depression and PTSD.
Rates of trauma among the displaced in low and middle income countries are also high. For instance, 75% of 331 internally displaced children in camps in southern Darfur in Sudan met diagnostic criteria for post-traumatic stress disorder, and 38% had depression.
In the absence of health centres, schools can play a key role in restoring a sense of stability. Teachers are not and should never be leant on as mental health specialists, but they can be a crucial source of support for children suffering from trauma if they’re given the right training. But they need basic knowledge about trauma symptoms and providing help to students, which many do not have. NGOs, including the International Rescue Committee, iACT, and Plan International, are training teachers to face this challenge through their programmes, but their reach is not enough.
In Germany, the majority of teachers and day-care workers said that they did not feel properly prepared to address the needs of refugee children. In the Netherlands, 20% of teachers with more than 18 years of experience working in mainstream schools reported that they experienced a high degree of difficulty dealing with students with trauma. The vast majority of these teachers (89%) encountered at least one student with trauma in their work. A review of early childhood care and education facilities for refugee children in Europe and North America found that, although many programmes recognized the importance of providing trauma-informed care, appropriate training and resources were ‘almost universally lacking’.
The paper shows the importance of social and emotional learning, as an approach to psychosocial support which targets skills, such as resilience, to manage stress, and is often rolled out through interactive, group-based discussions or role play. It shows the importance of this approach for less acute situations but emphasizes that for more challenging cases trained specialists are needed.
It is also important to involve parents in social and emotional learning so that activities can continue at home. One programme in Chicago looked at addressing symptoms of depression among Mexican immigrant women and primary school children with in- and after- school programmes and home visits, for instance, and improved school work, child mental health and family communication.
Learning environments must be safe, nurturing and responsive.
Teachers working with migrant and refugee students who have suffered trauma face particular hardships and need training to cope with challenges in the classroom.
Psychosocial interventions require cooperation between education, health and social protection services.
Social and emotional learning interventions need to be culturally sensitive and adapted to context. They should be delivered through extra-curricular activities as well.
Community and parental involvement should not be neglected.
There seems to be some race between the USA and Europe with France’s TOTAL that recently signed with Algeria a contract for a polypropylene plant in the country. There were afterwards two days of public demonstrations in different localities close to the country’s oil bases in the South. Locals were out and about shouting out their frustrations of possibly turning into passive witnesses to fracking within walking distance to their familiar and naturally unkind environment. Far from being left behind, Exxon Mobil also signed a gas contract with SONATRACH that was immediately followed by more public anger. Far north, along the 1000 miles long shores, Italy with its oil company ENI is rumoured to most probably sign a historic agreement in Algiers that will allow it to officially win the operation of two offshore oil blocks East and West of the capital city. It looks as if the absent and dormant elites, political or business alike got together, and that people’s rebellion is the only way to fight climate breakdown.
Whether it is a legitimate offshore operation with diversification as its goal or merely a costly stunt to divert attention from the potential fracking of those ginormous pockets of shale oil in the deep Saharan south would remain to be seen.
Meanwhile in the UK, George Monbiot’s thoughts dated October 18, 2018, on the same issue of the country’s future being tossed alternatively between the capital’s plush offices and the countryside’s and villages bucolic streets.
As the fracking protesters show, a people’s rebellion is the only way to fight climate breakdown
Our politicians, under the influence of big business, have failed us. As they take the planet to the brink, it’s time for disruptive, nonviolent disobedience
It is hard to believe today, but the prevailing ethos among the educated elite was once public service. As the historian Tony Judt documented in Ill Fares the Land, the foremost ambition among graduates in the 1950s and 60s was, through government or the liberal professions, to serve their country. Their approach might have been patrician and often blinkered, but their intentions were mostly public and civic, not private and pecuniary.
Today, the notion of public service seems as quaint as a local post office. We expect those who govern us to grab what they can, permitting predatory banks and corporations to fleece the public realm, then collect their reward in the form of lucrative directorships. As the Edelman Corporation’s Trust Barometer survey reveals, trust worldwide has collapsed in all major institutions, and government is less trusted than any other.
As for the economic elite, as the consequences of their own greed and self-interest emerge, they seek, like the Roman oligarchs fleeing the collapse of the western empire, only to secure their survival against the indignant mob. An essay by the visionary author Douglas Rushkoff this summer, documenting his discussion with some of the world’s richest people, reveals that their most pressing concern is to find a refuge from climate breakdown, and economic and societal collapse. Should they move to New Zealand or Alaska? How will they pay their security guards once money is worthless? Could they upload their minds on to supercomputers? Survival Condo, the company turning former missile silos in Kansas into fortified bunkers, has so far sold every completed unit.
Most governments, like the UK, Germany, the US and Australia, push us towards the brink on behalf of their friendsTrust, the Edelman Corporation observes, “is now the deciding factor in whether a society can function”. Unfortunately, our mistrust is fully justified. Those who have destroyed belief in governments exploit its collapse, railing against a liberal elite (by which they mean people still engaged in public service) while working for the real and illiberal elite. As the political economist William Davies points out, “sovereignty” is used as a code for rejecting the very notion of governing as “a complex, modern, fact-based set of activities that requires technical expertise and permanent officials”.
Nowhere is the gulf between public and private interests more obvious than in governments’ response to the climate crisis. On Monday, UK energy minister Claire Perry announced that she had asked her advisers to produce a roadmap to a zero-carbon economy. On the same day, fracking commenced at Preston New Road in Lancashire, enabled by the permission Perry sneaked through parliament on the last day before the summer recess.
The minister has justified fracking on the grounds that it helps the country affect a “transition to a lower-carbon economy”. But fracked gas has net emissions similar to, or worse than, those released by burning coal. As we are already emerging from the coal era in the UK without any help from fracking, this is in reality a transition away from renewables and back into fossil fuels.
“We should start drilling at the beginning of next year,” Abdelmoumene Ould Kaddour told reporters on the side-lines of a signing ceremony with TOTAL for a petrochemical plant that will produce 550,000 tonnes of polypropylene per year.
“The potential is huge. We have gas in the east around Skikda, and oil in the west around Mostaganem,” he added.
SONATRACH and TOTAL have also agreed to invest $406 million to boost the output of the gas field named Tin Fouye Tabankort Sud.
“Our partnership with TOTAL is good and it allows us to implement our long-term strategy,” Ould Kaddour told reporters.
TOTAL Chairman and CEO Patrick Pouyanne said in a statement earlier on Oct. 7 that TOTAL and SONATRACH had signed new agreements, including a contract to develop the Erg Issouane gas field.
In the meantime, here is the same event as reported by the francophone local media: Algeria is officially embarking on offshore oil exploitation. The CEO of SONATRACH, Abdelmoumen Ould K, confirmed that the first offshore drilling would be launched in the first half of 2019.
For Algeria, these new drillings have become more than an alternative to oil extracted onshore. It is important to know that the recurring increase in crude oil and technological advances in offshore operations offer more opportunities and margins for petroleum companies.
In all likelihood, it is the Italian giant ENI who as the partner of SONATRACH for the development of its offshore activities. SONATRACH has long conducted negotiations with ENI’s to launch these explorations. These negotiations have advanced considerably since the conclusion in January 2017 of a memorandum of understanding (MoU) with the Italian company Versalis (a 100% subsidiary of the Italian group ENI) to carry out studies on petrochemical projects.
The MoU with Versalis deals with feasibility studies for the realisation of petrochemical complexes in Algeria, and the strengthening of cooperation between the two companies in the field of Petrochemicals.
It is to be noted that offshore oil exploitation has its peculiarities if compared to the conventional oil exploitation. This difference is due to the environment in which it occurs. In fact, up to 200 m in depth, it is possible to fix the operating platform. More than 200 m, pressures are increasing and becoming less sustainable. The control of operations, even though robots, is then more difficult. In these conditions, floating platforms are more appropriate. Most offshore oil farms do not exceed 500 m in depth.
The first offshore drilling will be carried out in the provinces of Oran and Béjaïa, delimited as offshore exploration zones after seismic studies were carried out in their territorial waters. The interpretation of the 2d seismic data of the 1200 km of the Algerian coasts, led the prospecting to these two provinces. In Algeria, offshore areas that are likely to hold hydrocarbons are located between 2000 and 2500 metres in depth, according to the results of the first seismic studies carried out on the Algerian offshore. As for the cost of single offshore drilling, it is close to $100 million.
Abdelghani Henni, back in January wrote that Algeria ranks third globally after China and Argentina in technically recoverable shale gas reserves with 20 Tcm, according to the U.S. Energy Information Administration. (Source: Shutterstock.com)
Developing abundant shale gas has become a necessity for Algeria to reverse its declining domestic natural gas production and safeguard its economy. Shale gas is however not for NOW. The struggle is ferocious between the French and the Americans and it is not over yet.
Meanwhile, it must be said that all the onshore and diminishing conventional oil reserves are located deep in the Algerian Sahara whereas all offshore are obviously in the country’s territorial waters of its northern shores. Shale gas on the other hand prospected pockets are mostly all located also in the Sahara but close to many inhabited oases whose populations are predominantly and adamantly against any exploration of such fossil resources.
People of the Mediterranean countries know only too well that every summer coincides with mighty forests fires that sometime take days to put out. These peoples have always lived within the Mediterranean Woodland and Forest ecoregion stretches from the coastal plains to the hills of northern Morocco, Algeria and Tunisia, and eventually surrounds of the Atlas Mountains. The variety of substrates and climates leads to a diverse mix of vegetation including holm oak forests, cork oak forests, wild olive and carob woodlands, as well as extensive Berber ‘thuya’ forest. This old, endemic North African conifer species is representative of the great diversity and endemism of both flora and fauna in this ecoregion. This article of Fabrizio Manco, Anglia Ruskin University is about the same phenomenon occurring in the United Kingdom where it is customarily unheard of for Millenia. What is it then? Would it be as put by nature communications, Climate strongly influences global wildfire activity, and recent wildfire surges may signal fire weather-induced pyro geographic shifts.
How climate change is increasing the risk of wildfires
Warmer temperatures in the summer and associated drier conditions desiccate plant materials and create more vegetation litter, providing more fuel for these fires. Several studies have linked the increase of wildfires with climate change in various parts of the world, such as North America and Southern Europe.
For example, a study in California from 2004 found that the warmer and windier weather (brought about by an atmosphere with higher levels of CO2) produced fires that burned more intensely and spread faster in most locations. Despite enhanced firefighting efforts, the number of escaped fires (those exceeding initial containment limits) increased by 51% in the south San Francisco Bay area, 125% in the Sierra Nevada.
It has also been demonstrated that increases in rainfall during winter and spring – which are also known consequences of climate change – provide more favourable conditions for plant growth and therefore more potential fuel for the fires later in the summer.
Even though climate change increases the vulnerability of dry environments to wildfires, a source of ignition is still required. In the UK, it can be natural (such as bolts of lightning) or caused by man either deliberately or accidentally. Various studies have shown that the number of recreational visits to “risky” sites, such as the English Peak District, increase the occurrence of wildfire.
Human activities have shaped heathlands and moorlands in the UK over the centuries, keeping them open and slowing down the natural succession towards more closed forest habitats. Despite the human impact on their origin, moorlands represent important ecosystems for numerous endangered species including reptiles, insects and birds.
But historic poor management has caused a lot of damage in moorland habitats. The introduction of non-native species for the moor, such as Rhododendron or planted conifers, has affected biodiversity. Overgrazing and drainage has increased the risks of erosion and flooding by reducing vegetation cover and limiting the ability for the soil to absorb precipitations. This, in turn, as lead to an increase in aridity of the habitat – which is the perfect environment for wildfires.
Nowadays, most of the UK’s moorlands are associated with red grouse shooting and are managed in relation to that activity. Procedures include rotational burning and control of predators. Some of these processes are controversial with some environmentalists claiming it can turn the moorland into a “monoculture” of low heather which can be highly susceptible to wildfires. But the evidence on this is not clear and a report by the RSPB found little proof of the negative effect of grouse moor management on biodiversity, flooding and wildfires.
The ecological role of fire
Landscapes and their plant and animal communities are not fixed in time. They are under the influence of dynamic processes that can be recurrent (such as marine tides and seasonal flooding) or catastrophic (volcanic eruptions or storms). Fire – whether natural or man-made – is an important factor that will drive the structure and wildlife composition of ecosystems.
Some areas, such as the Mediterranean region or the African savannah, have been shaped by fire for thousands of years. Plants and animals have evolved to cope with the periodic perturbations due to it. For example, some seeds can only germinate after they have been burnt.
There are even some plants and animals that are contributing in the propagation of wildfires. In Australia, some raptor birds have been observed picking up burning sticks and dropping them in unburned areas to force potential prey out of their burrows.
Despite its destructive power, fire is an important ecological process that can benefit several endangered species by maintaining their habitat. It is an important tool in the management and preservation of heathlands and moorlands in the UK when used appropriately and in a controlled way.
But climate change and human activities increase the vulnerability of those habitats to uncontrolled wildfires and higher population densities near these areas will potentially put more people and houses at risk. In addition to the global battle against climate change, appropriate management procedures are necessary to maintain those habitats and ensure the risks of uncontrolled fires are minimised and the potential spread of them reduced.
The National Office of Statistics (ONS) has this month announced unemployment that is worrying but predictable is on the increase. Moreover, despite all investment and employment agencies opting for a maximum of projects with financial and tax benefits, it should however be asked if these projects were fit for purpose as per a global vision of the country’s development. And, whether these are promising segments of sustainable growth or just some cosmetic operations for the redistribution of the rentier annuity to calm the social front? This contribution would want to look at Employment policy in 2017 – 2020 for Algeria and here it is as compiled from various write-ups of mine as leader of a multidisciplinary team of economists, sociologists and demographers between 2007 and 2008 on an audit (1) for the Algerian Government on employment and wages (eight volumes 980 pages).
Algeria according to international observers, as reiterated on November 2, 2016 in Algiers by an independent expert with the delegation of the European Parliament in Algiers chaired by Mr. Antonio Panzeri, Chairman of the Delegation for Relations with the Maghreb countries, has a full potential, subject to far-reaching reforms, to establish a diversified economy responsible for the creation of sustainable jobs and therefore the stability of the Mediterranean region and Africa
Structure of employment and unemployment between 2013 / 2017
The Algerian population has grown to 41.30 million on January 1st, 2017 and in April 2017, according to the ONS, the workforce reached a total of 12.27 million people with 2.52 million (20.60%) of women, against 12.12 million in September 2016, and a positive balance of 160,000 people, or an increase of 1.3%..
By the end of 2015, the active population was 11.93 million and unemployment for the same period, according to the ONS, was 11.2% with a 29.9% of youth unemployment.
According to the ONS, quoted by the Algerian Press Service (APS), the active population, was in April 2017 estimated at 10.769 million against 10.845 in September 2016, registering a negative balance of 76,000 people as compared to September 2016 where six out of ten people are on average long-term unemployed, which means 62.2% are looking for a job for 1 or over a year.
The unemployed population reached thereby 1.50 million, or 12.3% nationally, an increase of 1.8 point compared to September 2016. Youth unemployment rate for the 16-24 years was 29.7% and the distribution according to education, it was found that 787,000 unemployed had no degree , or more than half of all the unemployed population (52.2%). Thus, unemployment without qualification rose from 7.7% in September 2016 to 10.1% in April 2017, whereas that of graduates of vocational training increased from 13% to 14.8% between the same periods.
On the other hand, unemployment amongst university graduates declined slightly from 17.7% in September 2016 to 17.6% in April 2017. Still according to the ONS, the decline in the volume of employment between September 2016 and April 2017 has affected the sector of the construction industry with a negative balance of 91,000 people, and that of trade, services, and public administration a negative balance of 84,000 whereas, a positive balance was recorded for the sector of agriculture (63,000) and industry (36,000) compared with September 2016.
The preliminary report of the International monetary Fund (IMF) on the global economic outlook for Algeria shows that if in 2016, the growth of real GDP was 4.2%, the situation is expected to significantly deteriorate in 2017 and 2018. Indeed, the IMF expects growth of 1.4% of GDP in Algeria in 2017 and 2018; the Algerian economy should know stagnation, with a growth rate of GDP of only 0.6%. A direct result of the economic slowdown, the unemployment rate should substantially increase over the same period up to an estimated 13.2% in 2018 with an inflationary trend always according to the IMF that we are trying to compensate by creating jobs to very low value added.
An April 2016 investigation of the ONS confirmed that services sector were the trend of the economy with its correlation in employment. But these services sector are basically small trade and services representing 83% of the economic area with very low productivity and not comparable to those of the developed countries where the services sector notably through the information and communication technologies create opportunities for economic growth and generate productive employment.
Indeed, in April 2016, the structure of employment by sector of activity highlights market and non-market services to absorb 61.6% of the total work force, followed by construction (16.8%), industry (13%) and agriculture (8.7%). In a more precise way, on administration, according to the public service, the number of staff on January 1, 2015 is of 2,020,172 officials including 1,608,964 full time (79,64%) and 411,208 (20.30%) contractual agents.
State central administration is represented by 313,171 agents or 15.50% and 813,725 of decentralised national authorities officers or 41.57%, 312,009 local authorities administration agents or 15.4%, public administrative bodies 449,268 agents, or 22.24%, and all public scientific and technology 105,999 agents, or 5.25%. the young represent 274,074 agents, the 30 to 40 year old 735,756 agents, the 41/50 year old 668,725, the 50 to 59 years 92,580, and the more than 60 years only 20,944.
By sectors, the Interior represent 29,22%, education 29,34% with 592,831 of which 297,394 female agents, public health 13.19% with 138,581 out of a total 266,525 agents, higher education with women’s 8.50% of a workforce of 95,118 out of 171,761 total agents, finance with 4.15% vocational training with 2.80%, justice with 2.16% and other sectors 10.64%.
Investment between 2000 and 2017 allocation
Knowing that the industrial sector represents less than 5% of the gross domestic product (GDP), and on these 95% are SMIs/SMEs making up the Algerian productive fabric today going through difficulties because of bureaucratic, sclerotic financial system, socio-educational system not adapted, land disorganisation, in addition to competition from an informal sphere that controls 40 to 50% of the money in circulation. It must be asked if the young developers approved by programs such as the National Agency of Investment Development (ANDI), “Agence Nationale de Soutien a l’emploi des Jeunes” (ANSEJ) and other agencies responsible for the promotion of employment, have the qualification and above all the experience necessary to manager projects, like what is happening everywhere in the world, running a business in a competitive environment in order to have competitive prices.
Is there not a risk of wastage of oil revenues related financial resources and the use of Treasury towards the reorganization of public enterprises? As this is currently the case for El Hajar real financial chasms despite its public euphoric promises of the resolution of all problems between 2014 and 2015.
Because the current political industrial, without coherence is based on the material age (iron-cement) of the 1970s believing it to be the silver bullet.
Was it not a reasonable path meanwhile a real revival of non-hydrocarbon segments, to invest in the acquisition of knowledge by additional training and internships so as to prepare seriously for insertion in active life permanently?
How can we not forget that, according to official data in terms of the distribution of projects by sectors is transport that has attracted the most investment, closely followed by the building, public works, followed by far less than 15 to 20% of the industry and agriculture sectors with a low foreign direct investment FDI.
Large firms choose to settle in the neighbouring countries and trade with us mainly because of the 2009 Finance Act with its widespread share ownership rule of 49 / 51% is considered too protectionist by all foreign investors hence slowing the momentum of the IDEs towards the SMIs/SMEs. In General, the results of employment of the ANDI, the ANSEJ and the CNAC agencies with reference to projects and not in intention are mixed despite many benefits.
As according to some sources, more than 50% of the projects are abandoned after receiving benefits and the many disputes with banks about non refunds attest to this.
However, before any costly operation without analyzing its profitability in terms of dynamics in the light of the new technological changes and global managerial systems, a serene balance would mean to answer the following questions and this in a way specific and quantified:
What is the assessment of the ANDI, “Caisse Nationale d’Assurance Chomage” (CNAC) and the ANSEJ since their existence in the effective realisation of these projects and not those filed in and their legal status;
What is the time limit for projects carried out between the time of the deposit and the actual realization knowing that time management is of the essence;
For those realised projects how many got bankrupt according to the rules of the commercial code;
What is the share of hard currency vs. Dinars of these projects;
What is the level of bank debt of projects with the amount of bad debts;
What is the breakdown of bank credit per projects;
What is the exact amount of tax benefits for both the realised projects and those not carried out;
What is the breakdown of the jobs with the level of qualification per projects and those created insofar as the development of the 21st century is based on the development of knowledge;
What is the contribution to the country’s real added value of these projects;
Are these projects notably those realised up to international values insofar as with globalization, that despite the crisis, we have an open economy due to the fact to Algeria’s international commitments.
Also, to get an idea of the necessary balance and in order to go beyond the current entropy, it is necessary to assess the impact of public spending thus:
On the rate of growth, the unemployment rate and the purchasing power of citizens
Conducting surveys so as to highlight the distribution of income and consumption by strata model and determine the concentration index in real and not fictitious terms, and according to a dynamic medium and long term vision
The share of markets granted to national (public and private), distinguishing also self-financing and borrowing from banks and especially their production capacities,
Clearly distinguish within the investment part of hard currencies and part in Dinars;
The share of contracts awarded to foreigners;
Have these contributed to the accumulation of the organizational and technological know-how or was it turnkey contracts ;
What is their equity contribution and the share covered by Algerian banks;
What has been the amount of the flow of foreign direct investment and transfers of capital to Algeria;
What is the amount of currency outflow (goods – services often ignored of 10 to $12 billion dollars per year between 2010 and 2016) and legal capital transfers and finally analyze the impact of the implementation of the import licenses that must be part of a strategic goal of boosting without complacency the national productive fabric, being transitional and granted in total transparency to avoid pension situation and respecting international agreements.
For a new political job and wages policy
There is a universal law; the employment rate is a function of the rate of growth and of the structures of the productivity rates of competitive value-added enterprise. Jobs are not created through decrees or State voluntarism; the solution of ease is creating jobs in the administration.
The official unemployment rate of 12.3% for April 2017 is heavily biased including overstaffing in both Governments as in public companies, the fictitious temporary jobs and jobs in the informal sphere.
Paradoxically, because of the sectoral allocation of investment through public spending, strongly biased emphasis on jobs with very low qualifications such as the construction industry, graduates are more likely to be unemployed. This sector will create between 300,000 / 400 000 jobs a year between 2017 and 2020, which are in addition to the current unemployment rate underestimated due to demographic pressure, the entry on the labour market of women underestimated in the statistics, in order to solve the nagging problem of unemployment.
What will become of the 2 million students out of universities between 2018 and 2020? In general, foreign exchange reserves are only a monetary sign to stabilise the currency against the Dollar and the Euro and no sign of development.
Inflation and unemployment that we might artificially be compressing through the rentier revenues of hydrocarbons are the consequences of the disease of the social body, i.e. of the inconsistencies of the socio-economic policies. Without widespread subsidies, non-targeted, combined with the slippage of the Dinar, in the case of non-increasing production and real productivity, of the decline in foreign exchange reserves that sustain the Dinar value by up to 70%, the inflation rate could, in the coming years, reach double-digit with inevitable social tensions.
With the decline in receipts from hydrocarbons, this situation of widespread subsidies, tax benefits and subsidized interest granted in many areas without impact analysis, is untenable. Without the unproductive jobs and more in case the reduction of public expenditure, the growth rate being pulled to 70 and 80% directly and indirectly by public expenditure through hydrocarbons related revenues, including the construction industry, with the risk of a property bubble, with the decline in purchasing power, the unemployment rate beyond the official rate.
While not having a mainly negative view, there were lots of achievements, perhaps with many deficiencies but there is urgent need for a strategic vision to move beyond the current situation in this world in perpetual motion and a discourse of truth would be required. The fact is that Algeria still in 2017 in transition, is neither a State-controlled economy still very far from a true market economy that is characterised by a productive and competitive economy.
During this difficult period of transition from a State to a competitive market economy and the rule of law is that the reforms are timidly initiated despite speeches that contradict daily social practices, and always restrained especially as the price of oil increases. Banks or rather rentier pension distributers continue to operate as administrative shops, and often by doing so delay reforms issues through attacking the technical more than the organizational aspects, whilst they are the driving reforms; with privatization and partnership as a means of investment and value-added trampling due to lack of consistency and transparency; food bill is high despite the famous agricultural program (NADP) which should take stock of the fact of several billions of dollars in spending and bureaucracy and corruption continue to plague.
As consequence of the inconsistency and lack of visibility of the socio-economic policy and practice for many decades not only for the current period, the currency, we are witnessing the dizzying fall of the Dinar in the official market and on the parallel market with the return to inflation that is compressed by widespread unfair subsidies via the rentier pension whereas the targeting is necessary, in the speculative activities, the discouragement of knowledge and the enterprising creator of wealth, to the extension of the informal sphere, to social tensions through the various local governorates that reflected the difficulties of the economic system to generate growth away from hydrocarbon, only condition to deal with this social unrest.
Facing inevitable budget tensions between 2017 and 2020 and the price of oil being down for a long time, it will be as based on the results quantified and dated a matter to implement both economic and social strategies on adaptation and solidarity policy, assuming a broad national front, taking into account the different sensitivities of all local and international, the mutations at the dawn of the fourth world economic revolution with geostrategic upheaval (1).
A broad social front is necessary to accelerate all structural reforms. Algeria needs to avoid the lethargy and sterility that all of its children in their diversity join forces in a same economic and social development objective. Because, a multidimensional crisis in today’s Algerian society is fundamentally systemic, beyond the strictly economic scope, referring to political aspects involving renewed governance and therefore the reestablishment of the State would be the wisest. Moreover per all international observers, Algeria having all the required potential, it is only a matter of far-reaching reforms, that are aimed at establishing a diversified economy that will in the end be the guarantor of stability not only in the country but also in the Mediterranean region and the African continent. firstname.lastname@example.org
Europe – North Africa Cooperation in High Education comes in as education in the MENA generally and more specifically in its western half of North Africa has been for some time prioritised with various efforts being made to improve it through notably innovation with a view to creating job opportunities for the youth.
Illiteracy however remained and is still rampant although varying from country to country and from cities to rural areas within each country.
Historically, education systems of the Maghreb countries having within the last 50 years undergone since independence, reform processes whose main objectives was to prepare for the nationalization take over through European inspired education curriculums while stressing the need to respond as closely as possible to the aspirations of the indigenous cultures by providing teachers in re replacement of the predominantly European body of educators.
The situation nowadays is best described by an article on University World News Issue No. 456 of April 21, 2017 by Wagdy Sawahel who elaborated on Europe and North African higher education cooperation plans for the future.
It is well known to all around the Mediterranean basin that education and innovation are mechanisms of progress in the 21st century, whilst all ideas related to that goal resonate as being somewhat impossible to attain in most capital cities across North Africa without as it were, a hand from Europe.
In efforts to promote cooperation in science, technology, innovation and higher education, five countries of the Arab Maghreb Union and five European countries have approved a two-year cooperation plan aimed at stimulating economic growth, job creation and social cohesion in the Western Mediterranean region.
The 10 countries are known as member states of the “5+5 Dialogue initiative: A sub-regional forum for dialogue”.
The five Maghreb countries involved are Algeria, Libya, Mauritania, Morocco and Tunisia. The five European countries include Western Mediterranean nations, namely, France, Italy, Malta, Portugal and Spain.
The new two year plan (2017-18) was announced at the third conference of the ministers of research, innovation and higher education of the member countries of the forum for the dialogue in the Western Mediterranean, held under the theme “Promotion of Higher Education, Research and Innovation to Achieve Social Stability and Economic Development”, in Tunis, Tunisia from 30-31 March.
According to a dedicated website for the 5+5 Dialogue initiative launched in Tunis, the plan encompasses several initiatives and projects, including the setting up of a network of higher education institutions, the formation of teams of researchers and engineers around joint projects, the development of a rectors’ network, along with the promotion of exchanges of best practices in quality assurance and governance.
The network of higher education institutions within the Dialogue 5+5 will focus on encouraging cooperation between higher education institutions in the Western Mediterranean Basin.
Based in Tunisia, the regional network will focus on strengthening existing university linkages and developing newer partnerships around novel cooperative projects.
The network will participate in the construction of ‘Mediterranean spaces’ dedicated to research, innovation and higher education approved and outlined in the 2013 Rabat Declaration and endorsed at the first conference of ministers of research and higher education of the 5+5 Dialogue states, held in Morocco.
Mediterranean spaces will be based on the principle of free movement of researchers between the two western shores of the Mediterranean and on a connection to regional and global scientific networks to facilitate the exchange of scientific data and development of skills.
It will also focus on intellectual property, patenting and exchange of students, academics and research between countries.
The network will also support initiatives that promote institutional partnerships, including scientific networks, the mobility of students, faculty and administrators, multi-diploma or thesis co-supervision, and the development of online training and research
Collaboration with researchers in the region will be enhanced under the Horizon 2020 programme known as PRIMA – Partnership for Research and Innovation in the Mediterranean Area – that will help bridge the gap and regulate the brain drain through the creation of poles of excellence in member countries.
The proposed Dialogue 5+5 rectors’ network will focus on specific initiatives including organising regular encounters between rectors and presidents from all Dialogue 5+5 countries, with visits to universities and polytechnic institutes as well as international meetings of students and researchers, and the holding of conferences and seminars on mobility and academic interchanges.
Besides sharing quality assurance practices, the plan will enhance exchanges on governance with a focus on the organisation of teaching, research and innovation in order to improve the management, efficiency and financial autonomy of institutions.
At the opening of the conference, Tunisian Prime Minister Youssef Chahed said that a national conference on higher education reform will take place in Tunis in the period from 30 June-1 July to present a higher education reform plan that will focus on five major axes, including university training, employment, human resources, governance and innovation, according to a local press report.
Energy issues and their geo-strategic impact in the Mediterranean regions of 2020 / 2030
Economic dynamics alter the balance of power on a global scale and affect the political compositions within States as regional areas nationwide. Energy is at the heart of the sovereignty of States and their security policies. Energy revitalizing the Regions of the Mediterranean Basin is in this framework that befits as per this modest contribution with the urgency of a controlled energy transition.
Because, if humanity were to widespread this mode of energy consumption in the wealthy countries, we would need the resources of 4 to 5 planets hence the urgency of a new model of consumption on a global scale; this raises the issue of energy efficiency and social consensus, the technical choices of today, engaging society in the long term: how much is this transition, how much it is worth and who will be the beneficiaries?
Promoting interconnections in the Mediterranean
Electrical interconnections in the Mediterranean can be a factor of co-development. Europe’s energy dependency is about 53%. A Mediterranean energy community: as such, it is possible where trade links are important. The countries of the southern Mediterranean export about 80 percent of their gas and 60 percent of their oil to Europe. Electrical needs are complementary: the cutting edge of electricity consumption in Europe (France, Germany, North country…) is usually in winter, while in the countries of the South, given cooling systems (expected to develop with the improvement of the standard of living), it is in the summer.
In Algeria, per a study by Medgrid, the acquisition of turbines needed to satisfy this consumption peak would cost more that the interconnection with the North grid which, given any holidays and/or mild temperatures, could be not so cost loaded. We also know that the South of the Mediterranean is better placed than the North to exploit renewable energy. The sunshine there is twice more important. As for wind power, there are extremely favourable sites, particularly on the Atlantic border and in Algeria and Morocco, with run times that are about double those of German or French sites.
Thus, it is highly advisable to swap electricity power in either direction alternatively: conventional power from Europe to Africa in summer and renewable energy from Africa to Europe in winter. Corresponding interconnections will allow also to better manage the intermittency grid problems inherent to conventionnel with solar and wind power and vice-versa.
We can consider the use of grid lines that allow costs reduction and losses to about 3% per thousand kilometers; power production costing twice cheaper in the South, would have a significant bearing at the level of the average prices on the European markets. All conditions therefore are there for Africa producing massive renewable energy and for planning ambitious programs. Energy exchanges between the two shores of the Mediterranean must be considered in the context of the Energy Transition that is as off these an absolute necessity.
Both North and South Mediterranean shores markets should grow at a rate of more than 7 percent in the South and 2 to 3 percent in the North. The Energy Mix of the future would be electricity dominated, as per Shell Inc., the electricity market is expected to increase by up to 80 percent by 2040.
It is important to know that solar power, be it thermal and / or photo-voltaic for internal consumption needs should represent the most important resource for the electric generation. Hybridisation with gas should allow it to be competitive with alternatives such as nuclear power. Indeed, hybridisation in specific cases is now able to achieve a very competitive cost of production. Electric highways running continuous across the Mediterranean would be used to satisfy the growing needs of the Mediterranean coast of Europe.
Superconductivity completed through liquid hydrogen cooling will be the solution in the medium term to meet the needs of Northern Europe. It is understood that one must be realistic in the short and medium term as traditional fossil energy will still be critical in the light of new discoveries in the Mediterranean.
Energy emerged as a powerful factor of cooperation and integration between the two shores of the Mediterranean. Climate and energy can provide the structural link which will not only realize the Mediterranean cultural goal in the design and implementation of a series of concrete projects, but also to prepare the development of a strategic Euro-African concept. Certainly, there are however some technological limitations that would not allow high voltage cables in great depths but these could easily be circumvented through appropriate routing.
Energy changes in the Mediterranean
Should be taken into account soonest .
My friend, Polytechnician Jean Pierre Hauet of KB Intelligence, France quite rightly noted that “energy markets’ situation and prospects is that since barely 10 years making the energy scene come alive again in the Mediterranean with at least three large fields of manoeuvre which it would be interesting to try to understand the ins and anticipate the outs.”
There are three theaters of operations.
– The first one would be that of all renewable energies (wind, photo-voltaic and concentrated solar) which was characterized by launching major initiatives based on the idea that the technical progress in the current transmission lines continuous would take advantage of the complementarity between the electricity needs of the countries of the North and the availability of space and Sun of the countries of the South. We talked then about €400 billion investment and the satisfaction of 15% of Europe’s electricity needs.
Today project Desertec is rather on the back burner, notably because of the withdrawal of major industrial concerns, Siemens and Bosch, and the consumed disagreement between the Desertec Foundation and its industrial arm the Desertec Industrial Initiative (Dii). Dii carries on with its ambitions of integration of European, North African and Middle Eastern networks, however in favour of bilateral initiatives in Cameroon, Senegal and Saudi Arabia.
The second theatre of operations is more recent: it relates to the discovery from 2009, oil and gas resources in deep offshore Mediterranean’s Levantine basin. Israel is the first to have made important discoveries on the deposits of Dalit, Tamar State and more recently of Leviathan. The last deposit, located under the layer of ‘Messinienne’ salt seems very important. Drilling is underway in order to explore the deeper layers that could hold oil.
Greece and Cyprus have also found considerable reserves of gas, always in the same geological theme which had remained largely unexplored until now. According to the author, Cyprus, Greece and Israel acknowledged their exclusive economic zones in the Mediterranean and on August 8, 2013 have signed a memorandum of understanding on energy described as historic, including the construction of an LNG plant in Limassol and laying of a cable of 2000 MW between Cyprus and Israel.
The third relates to exploration and to the eventual development of shale gas; the first producer of which is the United States of America have managed to reduce costs by about 50 percent over three years’ time period. Large deposits are profitable at a price ranging between $40 – 50 and the marginal ones at $55 – 60.
Energy at the service of development
The strategic goal is to put energy at the service of growth and employment of the Mediterranean two shores and Africa.
In the face of the recent geo-strategic upheavals, the problem confronting Algeria, North Africa and Europe, is that of security in the Sahel-Saharan zone. It becomes imperative to study the impacts of changes in the geopolitics of the Middle East and the Saharan region on the consequences for the region. In this context, one must avoid utopia, by a return to protectionism on a national basis that would not go in the direction of the history of the multi-polar world that is organized around large areas North-South including the protection of the environment. The Mediterranean, a large basin like five times France, represents only 0.7% of the surface of the oceans, but is one of the major reservoir of the marine and coastal biodiversity, with 28% of endemic species, 7.5% of the fauna and 18% of the world marine flora.
It is however one of the most polluted sea in the world. It is a no-tide sea, water of which takes more than a century to renew itself but nevertheless sees 30% of world maritime traffic and fauna and flora are endangered. “Rogue ships” release nearly 200,000 tonnes of oil into the Mediterranean each year and 290 billion micro floating plastic drift in thick and large areas of the sea, according to data collected during two scientific Expedition MED campaigns, conducted in the North-Western Mediterranean basin. Economic and financial crises brought to the forefront issues of growth and competitiveness to solve unemployment and pay off an increasing debt of domestic product gross seem to have set aside any environmental issues.
Production of a single kilogram of beef requires 4 to 5 kg of fodder, feed, etc. and 15,000 litres of water worldwide. More than a billion people do not have access to drinking water and 250 million people are affected by desertification. And if China and India adopted with respect to their food and transportation, the same consumption model of the developed countries, what would happen to our planet ?
The competitiveness of a country may decrease if there is environmental deterioration, that result in a decline of the collective surplus by allowances incurred by the community as the cost of disease, sick leave and the destruction of biodiversity. For example, the decline of bee populations affects agricultural productivity. According to numerous scientific studies, including Universcience, France, 12 percent of bird species, 23 percent of mammals, 32 percent of amphibians, 42 percent turtles, and a quarter of coniferous species are threatened with global extinction.
Every day, 50 to 100 species disappear, such as the sole which has seen its population drop by 90% in 25 years at the global level. And yet green economy in the context of a symbiosis of sustainable development between the North and the South, knowing that water shortage and desertification creeping northward are not best to be overlooked. While being realistic, fossil fuels will still be prevailing for at least two more decades as main source of energy. This is to make strategic choices today, to make decisions that will determine the profile of the productive system of tomorrow.
A common Mediterranean future
The EPIMED report shows that the European structural deficit and the sharp rise in demand for the South shore will involve in the future building of the elements of a partnership that goes beyond the classic model of supplier-customer.
This report focuses on European gas dependency moving from 53% today to possibly 80% in 2030. Additional uncertainty factor, the share of supply gas from the spot market in Europe will be stronger with the rise of LNG deliveries in an open world market. The volatility of prices and insecurity of available volumes will be more important in such a configuration despite the multiplicity of suppliers. The Mediterranean countries are also all facing the problem of Energy security. It is before anything a matter of strengthening cooperation particularly in the field of energy as being a fundamental element of economic activity, a factor of human security that can represent a very strong link between the North and South of the Mediterranean.
The geographical situation of the Mediterranean, as a transit corridor for global energy markets and an important crossroads for global energy markets cannot be more emphasized as perhaps another axis to struggle against water shortage, source of global conflict. This will affect the area with desertification, caused partly by demographic and economic changes, human activities and above all climate change which will not be a chimera by 2020/2030. Desalination of sea water, to reduce these tensions is an option but costs need are definitely to be neglected.
Only production on a large scale of components can substantially reduce costs, the respective States to temporarily support all related projects by targeted subsidies. Efforts to strengthen infrastructure, expansion of trade and markets open to local and international investors, and most importantly energy interconnections between Europe and the Maghreb as per the directive of European gas/electricity, will have a significant impact, in the coming years on the Euro-Mediterranean area.
As so aptly noted by a good friend of mine, Professor Jean Louis Guigou, delegate of the IPIMED, it should be that, in the interest of both the Americans and the Europeans and all the southern Mediterranean populations, the borders of the common market of the future, the borders of Schengen in the future, the borders of social protection in the future, the borders of the environmental requirements of tomorrow must be South of Morocco, South of Tunisia and Algeria, and in the East of Lebanon, Syria and Jordan through a lasting peace in the Middle East; Europeans, Jewish and Arab populations having a millennial history of peaceful coexistence.
So as advocated by this author, it would be desirable that a collective thinking revolving around four thematic axes should be engaged as of now.
First, territorial governance: it will be in this sense to identify the key actors (private and/or public, individual or organizational), to analyse the institutional contexts and to propose a framework of modes of coordination of these actors.
Second, the attractiveness of the territories: it is a matter of putting into perspective certain public policies to be implemented (regulations and incentives) and strategies for the actors of globalization to better understand the movements of relocation and the nature of outsourcing relationships.
Thirdly, new productive dynamics on the basis of a sectoral approach, the logic of agglomeration and productive organization to highlight in the process of deindustrialisation, restructuring and/or industrial emergence.
Fourth, spatialization of production activities and of analyzing the (urban) spatial organization of the productive dynamics in order to highlight the methods of planning, organization and management of the territories, and explain the logic of localization and intra-urban agglomerations of businesses.
In conclusion, a stabilization policy for Iraq and for Syria where pipelines have to transit and Libya whilst not forgetting the enormous potential of Iran, could all lead towards a deep upturn of the energy map in the Mediterranean, oil and traditional gas, explaining the Russian position (1). As I had to say at different international conferences, co-development, co-locations, which cannot be limited to economics, including anthropological and social component, antinomy of the effect of domination, taking into account cultural diversity, may be the area of implementation of all innovative ideas at the level of the Mediterranean so as to turn it into a shared Lake of Peace and Prosperity.
(1) – Contributor to conferences in the European Parliament – Brussels, the Senate and the French Parliament – Professor Abderrahmane Mebtoul, expert international of Algeria was invited by the Executive Chairman of the Institute of the Mediterranean of Barcelona, Spain to participate by a contribution that will be contained in the fourth edition of the Yearbook of IEMed Mediterranean 2017. This directory is for global dissemination, in Arabic-English-French and in Spanish – will address with 60 eminent international personalities, (former and current Ministers, scientists, politicians, economists, lawyers, historians, sociologists, writers) from the two shores of the Mediterranean basin on topics, interesting the Mediterranean and Africa, geopolitical, cultural, social and economic related subjects.
Professor Abderrahmane Mebtoul being member of the Scientific Council of the World Forum on sustainable development, to hold its 15th Forum in Paris on March 13, 2017 where he will address the theme “Facing the 4th global economic revolution, the axes of the energy transition of Algeria”.
“Any Destabilization of Algeria would have Geo-strategic Repercussions on all the Mediterranean and African Space” stated Dr Mebtoul talking to American Herald Tribune‘s Mohsen Abdelmoumen, journalist in an extensive interview published on 28th December 2016.
American Herald Tribune is a genuinely independent online media outlet. AHTribune is dedicated to strengthening and supporting independent journalism, and to improving the public’s access to independent information sources.
Here are some excerpts but the whole interview could be accessed in its original setting.
Mohsen Abdelmoumen: We are following your work for a long time. For the economist that you are, does Algeria respect international commitments?
Dr Abdulrahmane Mebtoul: You are referring to the Association Agreement signed in full sovereignty on September 1st, 2015. For Algeria, speaking through the Director-general of economic relations and international cooperation at the Ministry of Foreign Affairs, it is not question of calling into question the general architecture. Europe having acceded to the Algerian demand and agreed to a partial revision of some articles allowing a win/win partnership while underlining for the European part, that the structural reforms for a diversified economy depend first of the Algerian government, in order to benefit from this agreement. There is again talk of a possible membership of Algeria to the World Trade Organization (WTO) which constitutes 97 % of the world trade and 85 % of the world population. End of July 2016, the organization had 164 member countries and 20 observer countries, including Algeria. To date, Algeria led 12 rounds of multilateral negotiations, during which it treated 1,900 issues related primarily to its economic system. For my part, I am favorable to this membership and for the respect of the international agreements, Algeria having always respected them. The recent law passed of the return of the import licenses is part of the respect for the international commitments of Algeria. Freedom of trade and industry is the basis of the economic and trade policy of the Algerian government, enshrined in all the measures of the Algerian legislation. In this context, this legislation following the example of what is planned by the legislation of several countries with economy opened in Europe and elsewhere, offers the possibility of using, in specific and predefined cases, a transitional period in order to upgrade the productive apparatus, to the neutral import or export licenses in their application and administered in a fair and equitable way to manage exceptions to this freedom of trade, in accordance with the rules of the WTO. In general, Algeria’s accession to the WTO will require it to open borders and the increased specialization aroused by globalization. Indeed, both agreements with the European Union than with the WTO are planning to develop trade by putting in place the conditions for the gradual liberalization of trade in goods, services and capitals. Recently, newspapers have poured into the guesswork by taking out the content of its context. There has never been any question, either on the part of the European Union or the USA, of freezing economic cooperation with Algeria. The wish, faced with the fall in the price of long-term hydrocarbons, is a change in the Government policy which will have to accelerate reforms in order to avoid the destabilization of Algeria and, thereby, the region, what the international community does not want. This was confirmed to me during my conference at the invitation of the European Parliament and recently by officials of the European Union. The fight against terrorism by the ANP (Algerian army) and Algeria’s security forces is strongly welcomed by the international community; there are dialectical links between security/development that must over time be pooling the spending by a regional agreement. In the event of an economic recession in Algeria and in the whole of Maghreb, the integration to which I am deeply attached for decades, with the strong demographic pressure, it is all the Maghreb which risks the destabilization and by extension Africa and Europe, especially after the announcement of Daesh’s penetration in the region, by the US intelligence services. This stability depends on the deepening of the internal comprehensive reform which will depend greatly on the relations of political forces between the reformers and the seated on rentier revenues conservatives. To conclude with your question, indeed there have been international disputes in cascade for certain Algerian companies including SONATRACH with their foreign partners, but there is an awareness that a law must conform to international standards in order to encourage both domestic and international private investment. This also raises the issue of the 49/51% rule generalisable that the Algerian Government has not introduced in the new investment code whose I have advocated the easing to the Government since 2010, both to the segments hydrocarbons for the marginal deposits and other non-strategic segments in order to boost non-hydrocarbons exports. The “non-hydrocarbons” exports which remain always marginal with only 5.46% of exports’ global volumes, equivalent to $2.06 billion in 2015, have experienced a 20.1% reduction in year 2014. Exported products apart from hydrocarbons are essentially half-finished products that represent 4.48% of the global volume of exports, equivalent to $1.69 billion, food products with a part of 0.62%, equivalent to $234 million, raw products with a part of 0.28%, in absolute value equivalent to $106 million, and finally industrial capital goods and non food consumer goods with respective parts of 0.05% and 0.03%.
Will the American election and the future French election have repercussions on Algeria?
The United States of America, France and Algeria maintain relations of friendships for a long time. For the USA, it must be recognized that with the Oil/Shale Gas revolution, they became competitors to SONATRACH, and this has had an impact on the value of the trade balance, which increased from $12 billion in year 2008 to $5 billion by 2015. But major US non-hydrocarbon investments are underway. We may recognize that the main customers and suppliers are the Europeans with a breakthrough for China in terms of imports. Despite some seasonal turmoil, like for an old couple, economic relations with France are excellent. Spain remains a key partner of Algeria. In short, the situation is different from that of the 1986 crisis: foreign exchange reserves, although declining, are substantial by more than $112/116 billion at the end of 2016, external debt is low. Algeria has the potential to emerge from the crisis and has become aware of the urgency of boosting non-hydrocarbon production in the context of an open economy. Any destabilization of Algeria would have geo-strategic repercussions on all the Mediterranean and African space, hence the importance of development based on a win/win partnership.
How is it going with the partnership with the United States and Great Britain?
The objective in the face of the new global geo-strategic changes, and the establishment of America as the first world economic power, energy competitor of Algeria with Oil/Shale Gas. As customer, in 2015, the United States represents $1.977 billion that is to say a decrease of 59.04% compared with 2014 and, as supplier, $2.710 billion, that is a decrease of 5.48% compared with 2014. While in 2012, Algerian exports to the US (source Algerian Customs) were estimated at $10.778 billion and imports of $1.651 billion.
At current prices, the US GDP for a population of 324 million inhabitants in 2015 was $17,698 billion, the United Kingdom of $3,371. The European Union, including Great Britain, with a GDP of $18,812 billion for a population of 510 million inhabitants, remains the world’s largest economic power. The USA and Europe for less than a billion inhabitants add up to more than 40% of the world GDP considered at $73,400 billions in 2015 and $75,700 billions in 2016.
Commercial prospects exist between the USA and Algeria outside hydrocarbons, Algeria being primarily interested in the transfer of technical and managerial know-how with the presence of major American companies having to boost cooperation, especially in the fields of new technologies, industry, services, agriculture and buildings, public works and hydraulics industries, not forgetting training. Recently, except for hydrocarbons where the USA are present, the last contract in date is the one signed in 2013 between the group SONELGAZ and the American group General Electric (GE) for a partnership in an industrial complex manufacturing gas turbines in Algeria, for an investment of $200 million. This company, which will be held in 51% by SONELGAZ and 49% by GE, will produce as from 2017 between six and ten gas turbines a year, that is to say a capacity of 2,000 MW, a part of which could be exported. GE also won a market of supply of gas and steam turbines with a capacity of 8,400 MW for a total of $2.2 billion, intended to equip the six power stations that Algeria plans to build by 2017. But relations go beyond the economic framework.
The US recognizes that Algeria is the dominant military and economic power in the Maghreb region. It represents a key partner to the United States in the fight against terrorism, according to a document compound of 6 chapters of the Security Research Service of the American Congress which essentially deals with the question of government and politics in Algeria. Approaching the relations between Algeria and the United States, the report notes that Algeria is an increasingly important country in the US efforts to fight international terrorism and represents a key partner in the fight against terrorism-related groups. But let us never forget that the USA have a global strategy which does not differ fundamentally from that of Europe (except for certain tactical discrepancies) based on economic interests and insist on the Maghreb integration under segment of the continent Africa, whose economic control through the rivalries of China in particular will be a major issue of the 21st century.
Britain with 64 million inhabitants has a GDP (2014) of €2231.5 billion. It is the 5th world economy with exports of €407.4 billion and imports of €493.8 billion. In 2015, for the Algerian-British trade, we have $903 millions in the import representing 1.75% and $2,883 million in exports, or $3.8 billion, compared to $2.5 billion in 2012. So, let us recognize that the Algerian-British cooperation knew a real development since lord Risby’s appointment, who as Special Envoy of the British Prime Minister for Economic Partnership with Algeria, has explored a number of business opportunities in Algeria. The United Kingdom is present in the traditional hydrocarbon sector, notably through BP, Shell and BG, but also in other fields such as education (Linguaphone), infrastructure (Biwater), pharmaceutical industries (GSK), consumer products (Unilever), financial services (HSBC), and transportation (BA). Not forgetting the recent contracts signed with Hospital Group for the construction of a 500 beds hospital in Tlemcen. Petrofac obtained a $970 million-contract, in an association between Algerian Sonatrach (40%), Spanish Repsol (29,25%), German RWE (19,5%) and Italian Edison (11,25%), for the construction of a gas processing plant in the country’s South.
As for Algeria, nominal Gross Domestic Product (GDP) is expected to reach $166 billion in 2016 against $172.3 billion in 2015, according to IMF forecasts, for a population exceeding 40 million. Concerning the trade balance between Algeria and the rest of the world, in 2015, hydrocarbons represented the main part of our exports abroad with 94, 54% of the overall volume of exports, and a 40.76% decrease in 2014. Exports of “non-hydrocarbons”, which remain always marginal, with only 5.46% of the overall volume of all exports, equivalent to $2.06 billion, experienced a 20.1% drop in 2014. The groups of exported products outside hydrocarbons consist essentially of semi-finished products that represent a part of 4.48% of the overall volume of exports, equivalent to $1.69 billion, food products with 0.62%, that is $234 millions, crude products with 0.28%, that is in absolute value $106 million, and finally industrial capital goods and non food consumer goods with respectively 0.05% and 0.03%. In 2015, according to statistics, Spain was the main customer of Algeria, with $6.56 billion, followed by Italy ($6.16 billion), France ($ 4.92 billion), Great Britain ($2.88 billion), the Netherlands ($2.28 billion) and Turkey ($2.07 billion). Among the main suppliers of Algeria, China ranks first for the third consecutive year with ($8.22 billion), followed by France ($5.42 billion), Italy ($4.82 billion), Spain ($3.93 billion), Germany ($ 3.38 billion) and the United States ($ 2.71 billion). According to the official statistics, these figures also reveal that 63.49% of Algeria’s imports come from the OECD countries which are also the destination of the 82.64% of Algerian exports. Member countries of the European Union are the main business partners of Algeria which imports over 49.21% of its products and exports over 68.28% of the goods that it produces, dominated by hydrocarbons. The trade with the Maghreb countries (UMA) remain very marginal, having known a 40% decline in 2015, moving from $2.28 billion up to $3.8 billion in 2014, and trade with Arab countries decreased by 2.68%, with $ 2.54 billion against $2.61 billion. As for trade with Africa, it is marginal.and relatively modest, reaching $2 billion in 2010, Including $1.260 billion Algerian exports and $771 million of imports, but these increased strongly between 2012 and 2014.
In terms of the economic model, according to our sources, the authorities did not listen to you when you sounded the alarm right from the start. Are you listened to today? We had echo that you had undergone pressures about the work you do and the analysis you developed, isn’t it too late to rectify the current economic situation?
No, it is not too late, Algeria having significant potentialities to emerge from the crisis subject to renewed governance and the primacy of the economy, of knowledge, far from the rentier vision which can only lead the country to collective suicide. Besides, I would like to underline that I have never undergone of pressures, being independent expert. A technical model has no significance if it is not carried by economic social forces and policies responsible for its implementation. Let’s get away from the doom and gloom, everything that has been achieved between 2000/2016 is not totally negative. Many achievements were made after the bloody decade of 1989/1999, but also many errors that must be corrected imperatively. At the end of 2013, still as an independent expert, I had directed for the government, with more than 20 experts, an important file followed by many recommendations, between 2014/2016, by insisting on the urgency to review the current social-economic policy. If we had had good governance, more rigor in management, better allocation of resources favoring the economy and knowledge, pillars of development, far from the outdated material vision of the 1970s, taking into account the non-maturation of projects with various reassessments and the additional costs that were sometimes between 25-30% for certain projects (spend lavishly), according to the World Bank report, Algeria could have saved more than 130 billion dollars between 2000/2016, an amount that exceeds current foreign exchange reserves, while creating growth dynamic. When the Government invokes tourism, industry, agriculture, services such as sector dynamic between 2016/2020 to achieve a growth rate of 7%, we need to have a precise vision project by project and to figure within the framework of internationalized sectors according to the standards cost-quality in touch with the new world transformations and not to speak about sector on the whole. Like the free trade agreements with Europe since September 01, 2005 must be taken into account with a gradual tariff reduction of zero by 2020, not to mention the constraints of the WTO in the case of accession. Will we have competitive companies in this short time? The import substitution policy to lighten the import invoice must be based on careful analysis of the import, product by product, starting from large masses. Algeria, if it wants to become an emerging country, and it has the capabilities, does not need a non-industrial strategy, a vision of the years 1970/1980, but of a corporate strategy within the framework of internationalized channels. A growth rate in real terms of 9/10% between 2016/2020 is necessary to boost non-hydrocarbon exports and reduce social tensions. All the more Algeria should face fiscal tensions by 2016/2020 with the decline in hydrocarbon prices being utopian to predict a course upper to $75/90 between 2017/2020, OPEC representative 33% of world production marketed with a declining impact. To govern means to make plans, it will be necessary, according to the quantified and dated results, to put in place strategies of adaptation, in economic, social and political, assuming a broad national front, taking into account different sensitivities, local and international changes, being at the dawn of the fourth world economic revolution with profound geo-strategic upheavals. I am convinced that Algeria suffers from a crisis of governance and not from a financial crisis, the situation being different from that of 1990. But in the absence of reforms, this governance crisis risks turning into a financial crisis, because Algeria will depend for a long time on the hydrocarbons revenues. It should be reminded that, according to the official data produced by the Council of Ministers in 2015 following the report by the Minister of Energy, Algeria’s gas reserves are 2,700 billion cubic meters and 10 billion barrels of oil, going to, in view of the exports and of the current consumption, in the exhaustion on the horizon 2030. We are currently focusing on the oil price by forgetting the price of gas, representing 33% of SONATRACH’s revenues, whose long-term contracts expire by 2018/2019 with a very strong competition, before attending a revision of prices downward. It is a strategic error to reason on a linear consumption model focused on traditional fossil energies. The world is preparing for an energy transition between 2020/2030, as has happened from coal to hydrocarbons, hence the urgency of a new economic policy 2016/2025. Faced with a situation both geo-strategic and socio-economic worrying for the future of Algeria, beyond the State, all the players in society must be mobilized if Algeria wants to return to sustainable growth outside hydrocarbons within the framework of international values.
How can we not remind that countries that have successfully performed reforms, in particular emerging countries, leaned on a mobilization of the opinion. The need to reform is imperative in Algeria. Despite unprecedented monetary spending, economic outcomes are mixed and can lead to political social crises if we continue to spend lavishly, urging the inevitability of the structural changes to be made. Strong growth can return in Algeria. But it presupposes the combination of different factors: a dynamic active population, a knowledge, the sense of adventure and technological innovations constantly updated, the fight against all forms of harmful monopoly, an effective competition, a renewed financial system capable of attracting capital and a foreign opening. These reforms fundamentally pass through a living democracy, a stability of legal rules and equity, and policies will speak of social justice. The general conduct of these reforms cannot be delegated to any particular minister or placed in the hands of any particular administration. It can only be carried out if, at the highest level of the State, a strong political will (which only the President of the Republic and the Prime Minister carry) leads it and convinces the Algerians of its importance, hence, with the era of internet, a permanent transparent active communication. Then, each minister will have to receive a personal “road-map” supplementing his mission letter and taking up all the decisions that are within his competence. Given the importance of the measures to be launched and the urgency of the situation, the government will have to choose the mode of implementation best suited to each decision: the acceleration of existing projects and initiatives, the passing of a law accompanied, as soon as it is presented to Parliament, by the implementing decrees necessary for its implementation, and for urgent matters, only decisions by order can be used.
Coordinated actions synchronized over time will require the courage to reform quickly and massively, not of cyclical measures, but profound structural reforms at all levels with a strategic vision for the medium and long term, to rehabilitate strategic planning and management. Algeria can do so within a reasonable time. It has the means. For this, it must relearn to consider its future with confidence, securing to protect, preferring risk to annuity, unleashing initiative, competition and innovation, because the main challenge of the 21st century for Algeria will be the mastery of time. The world does not await us, and every nation that does not advance, necessarily moves back. Delaying reforms can only lead to slow disintegration, impoverishment, loss of confidence in the future because with the exhaustion of the hydrocarbons’ annuity, Algeria will no longer ways to prepare these reforms and will live in the grip of fear, seeing everywhere threats where others see opportunities. This growth requires the commitment of all, not just the State, by organizing solidarity to reconcile economic efficiency and equity through citizen participation and ongoing productive dialogue. The Algerian power has long lived on the illusion of eternal annuity. The majority of Algerians whose income is based on more than 70 %of the hydrocarbon annuity must know that the future of employment and their purchasing power is no longer in the public service and that of companies is no longer in recurring subsidies. The majority of the action is in the hands of the Algerians, who will have to want change and share a desire for the future, learn more, adapt, work more and better, create, share, and dare. The character of power must also change, assuming a progressive overhaul of the State through genuine decentralization around major regional economic poles, implying that it passes from the administering State to the regulating State, reconciling the social costs and the private costs, being the heart of the collective consciousness, by a healthier management of its different structures.
To be part of global growth, Algeria must first establish a true knowledge economy, developing the knowledge of all, from computer science to teamwork, Arabic, French, Chinese, English, from primary to higher education, from nursery to research. It must then facilitate competition, the creation and growth of enterprises, by introducing modern means of financing, reducing the cost of labor and simplifying the rules of employment. It must encourage the development of new areas, including: digital, health, biotechnology, environmental industries, services to the person with the aging of the population. At the same time, it is necessary to create the conditions for a social, geographical and competitive mobility and to allow everyone to work better and more, to change jobs more safely. In order to carry out these reforms, the State and local authorities must be reformed to a very large extent. It will be necessary to reduce their share in the common wealth, to concentrate their resources on the social groups that really need it, to give way to differentiation and experimentation, to systematically evaluate all decisions, a priori and a posteriori. Algeria has to adapt to the fourth economic revolution with important geostrategic implications that are expected between 2020/2030/2040, far from the material era of the 1970s. New information and communication technologies (NICTs), a set of technologies used to process, modify and exchange information, more specifically digitized data that combine innovations in storage and rapid processing of information as well as its transport through digital technology and new means of telecommunication, have implications for political governance, the management of companies and administrations, and an impact also on our new way of life referring to the knowledge and the permanent innovation. Policies, entrepreneurs, citizens, we are all living today in an electronic, pluralistic and immediate communication society that forces us to make decisions in real time. Time control being the main challenge of this 21stcentury, engaging national security, and any maladjustment to these changes would further isolate the country. Every nation can not distribute more than what it produces annually, if it wishes to avoid social drift. The main obstacle to development in Algeria stems from the entropy that must be surpassed imperatively, referring not only to economic factors but also social and political factors, including the profound moralization of leaders and society.
Where goes Algeria, in your opinion? Is not Algeria in danger of depleting its foreign exchange reserves by 2019/2020 and what are the proposals you have put forward to the Algerian government?
Algeria has a respite of only three years to change course and avoid strong social tensions in 2018/2020. So what to do to keep at an acceptable level the foreign exchange reserves that hold the value of the Dinar, because to 10/20 billion exchange reserves, would the official valuation of the dinar be more than 200 dinars for a dollar?
The first solution is a new central and local governance, a moralization of political, social and economic life, the fight against corruption and tax evasion for a shared sacrifice, and genuine decentralization around regional centers energizing the enterprise and the knowledge economy.
The second solution is the rehabilitation of work, source of the wealth of any nation, avoiding this income distribution without productive counterparts, avoiding these fictitious jobs for an ephemeral social peace that veils the official unemployment rate.
The third solution is the improvement of the business climate, the bureaucratization of society, the reform of the financial system, socio-educational, and the thorny problem of landed property.
The fourth solution is that any project must be thought of in terms of cost/quality/competition, so according to international standards by a fight against the extra costs which have taken exorbitant proportions, sometimes 20/30%, and thus to have a strategic vision within internationalized sectors.
The fifth solution is the development for structuring projects, in particular in the infrastructure of the Build, Operate and Transfer (B.O.T), which would alleviate short-term tensions in the State’s currencies budget, but be aware that in the long term, there will be transfers of profits. Remind that the B.O.T. technique relies mainly on the “Project financing/Project finance” model, which is essentially a financing technique where lenders agree to finance a project based solely on its profitability and its own value. In practice, repayment of the loan mainly depends on the cash flow generated by the project itself, so that the project’s ability to generate income that will be used to repay the loan is the cornerstone of the Project financing.
The sixth solution is the relaxing of the 49/51% rule (mixed assessment to date) for non-strategic segments, which need to define precisely what is strategic and what is not, where Algeria bears all the extra costs without the foreign partner often sharing the risks, replaced by a blocking minority.
The seventh solution is a higher export of hydrocarbons, the price of which depends on factors entirely outside Algeria and there, pay attention to false calculations, such as those carried out by Venezuela which is on the brink of bankruptcy. SONATRACH’s revenues at a price of $60 per barrel, the majority of gas contracts whose price is indexed to it in the long term expiring between 2018/2019 are valued at $34 billion, deducting expenses of 20%, resulting in a net profit of $27 billion in addition to current foreign exchange reserves. At $50, the net profit is $21 billion, and at $40, the profit is $15/16 billion. Between 2016/2020, it is utopia to count on non-hydrocarbon exports (the maturation and the profitability of any project implemented in 2016 would require at least in Algeria 4/5 years in view of the bureaucratic constraints).
The eighth solution is a necessary arbitrage between satisfaction of the internal market and exports posing the problem of widespread subsidies, a source of waste and social injustice, whereas these must be targeted. Algeria is likely to be a net importer of oil to horizon 2025/2030 that needs to invest on gas and especially its transformation, in a win/win partnership. This is because the majority of medium-term contracts expire between 2018/2069, needing to align with the free market, known as market spot, being impossible to compete with Russia (famous Siberian-China gas pipeline) and Iran on the Asian market, no longer having to rely on exports to the USA which themselves export to Europe, the natural market of Algeria being the European market, hence the urgency of the energy transition and a new consumption model based on an energy mix, including renewable energies, taking into account strong international competition.
The ninth solution, which I have advocated to the government for two years, is long-term targeted external debt, but only for segments with competitive advantages of 30/50 billion dollars between 2017/2020, in order to maintain the level of reserves. The World Bank’s forecast of $ 60 billion, according to my information in Washington, from the 2014/2016 data of the Bank of Algeria to the horizon 2018, are realistic.
The tenth solution, the safest, is to have a strategic vision, the tactics to paraphrase military experts to fit into a strategic objective function, which is sorely lacking at present, as the President of the Republic has instructed, is to move towards deep structural reforms without which a diversified economy can not emerge.
In many of your writings since 2009, you have alerted the government to the impacts of lower hydrocarbon prices.You have not been listened to.Can you remind us of your proposals for an energy transition?
We must move from speech to action. There should no longer be any illusion about a barrel’s price higher than 70/80 dollars between 2017/2020. Indeed, taking into account the evolution of rising costs, new global energy changes and competition from new producers, exports and strong domestic consumption induced by new investments in doubling the capacity of power plants that will operate from gas turbines, favored by low prices, Algeria will import oil in 10 years and conventional gas in 15 years. Hence the importance, from now on, of foreseeing the energy transition that I will summarize in seven guiding axes:
The firstis to improve energy efficiency because how can be programmed two (02) million dwellings according to the old building standards requiring high energy consumption, while modern techniques save 40 to 50% of consumption?
The second axis is to rethink the policy of subsidies that must be targeted for energy products, File that I directed with the American consultancy Ernst Young and with the managers of Ministry of Energy and Sonatrach of that I personally presented to the Economic Committee of the NPA (National People’s Assembly) in 2008, referring to a new price policy (price of gas sale on the domestic market about one tenth of the international price causing a waste of resources that are temporarily frozen for social reasons). With this in mind, the Algerian government must consider the creation of a National Compensation Chamber, that any subsidy must be endorsed by Parliament for greater transparency, Chamber intended to realize an equalization system, segmenting the activities in order to encourage sectors structuring and taking into account the income by social strata, implying a new wage policy.
The fourth axis, Algeria has decided to invest upstream for new discoveries. But for the profitability of these deposits, everything will depend on the price vector at the international level and the cost, discovering thousands of unprofitable deposits, posing the problem of the profitability of the $ 100 billion announced by the Department.
The fifth axis is the development of renewable energies combining the thermal and the photovoltaic, whose global cost of production has decreased by more than 50% and will be more in the future. With more than 3,000 hours of sunshine a year, Algeria has everything to develop the use of solar energy, or almost. The sun alone is not enough. We need technology and equipment to turn this heaven’s gift into electrical energy. Large-scale production would substantially reduce costs while at the same time promoting a multitude of SME-SMEs, strengthening the industrial fabric from clean energy (ecological industries). The promotion of renewable energies requires substantial financial resources for investment and research-development. The Renewable Energy Technology Fund decided by the Council of Ministers from 0.5% to 1% of the hydrocarbon annuity should be increased to a minimum of 3% in order to allow support between the guaranteed rate allowing the profitability of the investment. Through to the hydrocarbon revenues feeding this Fund, Algeria can avoid making to bear these investments on the low-income consumer, in the same way as Germany where the difference between the guaranteed price and the market price is transferred to the consumers’ invoices via surtax, following its decision to leave nuclear power by 2022. Algeria has received in mid-July 2011 the hybrid power plant in Hassi R’mel, with an overall capacity of 150 MW, including 30 MW from the combination of gas and solar. This experience is interesting. The combination of 20% conventional gas and 80% solar seems to me to be an essential focus for reducing costs and mastering the technology. To this end, the CREG (the regulatory agency) announced the publication of decrees intended to accompany the implementation of the Algerian program for the development of renewable energies. Incentives measures are provided by a proactive policy through the granting of subsidies to cover the additional costs incurred on the national electricity system and the setting up of a National Energy Control Fund (FNME) to ensure the financing of such projects and the granting of unpaid loans and guarantees for borrowing from banks and financial institutions. The Algerian program consists of installing a power of renewable origin of nearly 22 000 MW of which 12 000 MW will be dedicated to cover the electricity national demand and 10 000 MW for export. By 2030, Algeria’s objective would be to produce 30 to 40% of its electricity needs from renewable energy sources. The amount of public investment devoted by Algeria to the implementation of its program of development of renewable energies, by the 2030 deadline, is contradictory: announced once to $100 billion according to the Ministry of Energy, and another time to $60 billion. Indeed, the Algerian government had announced $100 billion in Council of ministers in 2009 and $60 billion by the end of 2015. In September 2016, he announced that, due to the financial crisis, the program would become a national and international public private partnership without announcing the exact amount. The call for tenders for the construction of a capacity of 4 000 megawatts of renewable energy from public-private partnerships will be launched at the beginning of 2017, announced recently by the Algerian Energy Minister Nouredine Boutarfa at the opening of the energy conference in the framework of the African Investment and Business Forum held in Algiers. The problem is this: will Algeria have absorption capacity, technological control to avoid the additional costs, control of the world market, and will it not be preferable to carry out these projects in the framework of a national, international partnership, and why not in the framework of the integration of North Africa, bridge between Europe and Africa, natural market of the Maghreb and Europe, a continent with multiple challenges that, by 2030/2040, will drive the growth of the world economy?
The sixth axis, Algeria plans to build its first nuclear power plant in 2025 for peaceful purposes to meet a demand for galloping electricity where, according to the Minister of Energy and Mines, on May 19, 2013, the recently created Institute of Nuclear Engineering, must train the engineers and the technicians in partnership who will be responsible for operating the plant. Algeria’s proven uranium reserves are close to 29 000 tons, enough to operate two nuclear power plants with a capacity of 1,000 megawatts each for a period of 60 years, according to data from the Ministry of Energy. The human resource being the key, as the production of all forms of energy and to avoid the massive brain drain that Algeria is experiencing, the services item with the exit of currencies having increased from $2 billion in 2002 to $10/12 billion between 2010/2015, a large part of which destined for the hydrocarbon sector, SONATRACH emptied of its substance, it is necessary to resolve the recurring problem of nuclear researchers (this applies to all researchers) who for years have been asking for clarification of their status, the revaluation of their remuneration and above all an environment conducive to the removal of the bureaucratic obstacles that hamper research.
The seventh axis, the option of oil/shale gas (3rd world reservoir according to international studies) introduced in the new hydrocarbon law of 2013,which I have the honor to lead on behalf of the government and delivered in January 2015. In Algeria, while avoiding clear positions for or against, a broad national debate is necessary, as the risks of groundwater pollution in the South can not be minimized. Algeria being a semi-arid country, the problem of water is a strategic stake at the Mediterranean and African level and arbitration for the consumption of fresh water must be carried out (since new water-saving technologies have not yet been developed despite recycling, what will be the cost, depending on the purchase, the know-how), one billion cubic meters of gas requiring 1 million cubic meters of fresh water to be taken into account in costs (in addition to the purchase of patents), and several hundred average wells have to be drilled for one billion cubic meters of gas, not to mention the short life span of these deposits and the necessary agreement with riparian countries sharing these aquifers. The sixth axis, which falls within the framework of the resolutions of COP21 and COP22, is the climate action that can not be conceived within the framework of a nation, will involve a broad consultation with, in particular, the countries of the Maghreb and Africa. In general, for the Maghreb, including Algeria, water resources are vulnerable to climatic variations. Water and its management are problems conditioning its future, the maximum volume of water mobilizable being deficit by 2020 according to Femise (Euro-Mediterranean network on the MENA region). In the Maghreb region, the negative effects will affect the production of vegetables whose yields decrease by 10 to 30% and a drop in wheat to nearly 40. Thus, climate change could lead to a real migratory crisis. The Blue Gold will be the challenge of the 21st century which, unresolved, could cause planetary wars.
In summary, the transition can be defined as the passage from a human civilization built on an essentially fossil, polluting, abundant and inexpensive energy, towards a civilization where the energy is renewable, rare, expensive and less polluting, with the objective of eventually replacing stock energies (oil, coal, gas, uranium) with flux energies (wind, solar).The energy transition refers to other technical subjects, posing the societal problem.
Mohsen Abdelmoumen is an independent Algerian journalist who wrote in several Algerian newspapers such as La Nouvelle République, AlgériePatriotique. He started his career in Alger Républicain, founded in 1938.
Sfax in Tunisia is to play host to an International Business Meetings on the Tunisian Olive Oil on November 9 through 11th . It is organised by the Chamber of Commerce and Industry of Sfax (CCIS) with the aim to promote worldwide the Tunisian olive oil in all its varieties. Tunisian Olive Oil International Sfax Meetings aim also at giving opportunities to establish links between Tunisian exporters, purchasing groups and world importers, through partnership meetings and other exhibitions on the region’s agricultural capabilities.
Trade and exports are ultimately at the base of these three-days’ international meetings that are meant to like elsewhere in the Mediterranean to revitalize the now fashionable ‘Med Diet’.
According to the World Bank and , five years after the Revolution, Tunisia’s economic performance remains weak, with growth too low to make a significant dent on unemployment, poverty and inequality amid widening fiscal and current account deficits. The country is presently relying on agricultural development, performance of which made a commendable effort in 2015, as driven by outstanding production notably in olive oil exports that generated €917.2m. This combined with falling oil prices helped reduce the trade deficit from €6.3bn of 2014 to €550.3m in 2015.
(TAP) – The 1st Sfax international olive oil business meetings, organised by the Chamber of Commerce and Industry, with support from the Middle East Partnership Initiative (MEPI) Programme kicked off Wednesday
In addition to official representatives of four foreign embassies in Tunisia (China, Turkey, Spain and South Africa), the event saw a significant participation of importers and purchasing groups from 11 countries.
Foreign importers participating in this event come from countries that are promising markets for Tunisian olive oil (Russia, Canada, United States, Great Britain, Brazil, Thailand, South Africa, India, Portugal and France).
Speaking at the opening of the event, President of the Sfax Chamber of Commerce and Industry, Ridha Fourati, highlighted the good reputation of Tunisian olive oil in the international business spheres, outlining the programmes initiated by the Chamber to enhance this product and prospect new markets.
Mohamed Namli, CEO of an import / export company based in Russia, said in a statement to TAP correspondent, on the sidelines of the event, that Russia is a promising market for Tunisian olive oil, which enjoys great interest on the part of Russian consumers.
He also predicted an increase in Tunisian exports, especially those of olive oil, dates, fruits and vegetables, and seafood, to the Russian market after the opening of a new shipping line linking the ports of Sfax and Novorossiysk (Russia).
He also said that this line, which has been operating for a week, has allowed exporters to reduce the time needed to transport goods to Russia and to avoid passing through Genoa.
US agricultural expert Paul Miller considered that Tunisia has developed important traditions in the production of extra virgin olive oil, which is highly appreciated in such countries as China, the United States, Japan, Australia, Germany, for its curative properties, its quality and its taste.
He also stressed the importance of valorising the Tunisian olive oil and ensuring its compliance with international standards, noting that the chosen orientation of developing organic oil is a good choice that must be consolidated.
For his part, Omar Béhi, Secretary of State for Agricultural Production raised problems related to the variability of olive oil production which generates a variability in the export of olive oil.
He stressed the need to redouble efforts to improve the yield and quality and valorise this product, by developing, in particular, the packaging of olive oil, which remains below expectations.
In this connection, he said the government is working to regenerate olive groves and develop their yield through the planting of 10 million olive trees, in addition to the measures and incentives provided for in the new law and which will further stabilize olive oil production.
The Secretary of State also recalled the importance of the Tunisian olive sector which has 80 thousand olive trees, making Tunisia the second largest producer of olive oil after Spain, with exports accounting for 44% of exports which in turn account for 70% of agricultural production.
Chokri Bayoudh, CEO of the National Oil Board (ONH), said Tunisia’s olive oil sector could take advantage of opportunities to achieve a qualitative leap in production and export, which would make it a sector with a knock-on effect on the national economy and social development.
The event saw a large professional exhibition of olive products, representing the different stages of olive production, from collection to export, through processing, packaging and valorisation.
27 Tunisian companies operating in the olive sector participated in this exhibition. They will have the exclusive right to participate in partnerships planned with importers and foreign purchasing groups participating in this event.
The Brookings published on September 8th, 2016 this article written by Beverley Milton-Edwards on the current situation of the country that contrary to all beliefs, seems to have some difficulty gathering itself as one country. It is as if at this conjecture, Libya’s implosion is anticipated and that it is a matter of assessing what it means for the West, that is mainly Europe. Libya’s historical difficulties in maintaining unity have left its remote borderlands areas porous with problems of migrants passage. To the point that Instability Threatening Libya’s Implosion is not only anticipated but seriously taken into consideration as of now.
Libya is a country in the Maghreb region of North Africa, bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, aLibya’s Instability Threatens Regional Borderlands. Historical difficulties in maintaining unity have left its remote areas vulnerable to security problems.nd Algeria and Tunisia to the west: Wikipedia.
The chaos in the Middle East today is thought to have a clear epicentre: Syria. But as diplomats and policymakers in the United States, Europe, and Russia continue to direct their energies there—including specifically on containing the threat posed by the Islamic State—Libya’s downward spiral has serious implications for the same actors. As such, Libya should be kept within strategic sightlines.
There is a risk that the Syria diversion makes the United States and the world more vulnerable to the dangers brewing in Libya—which in many ways are equally pressing as Syria’s. While the U.S. campaign season has highlighted discord over whether America should play a greater or lesser role in the world, these threats continue to grow—and they’ll affect U.S. policy options in the wider Middle East in any case.
THE CHAOS WITHIN
Libya’s U.N.-backed Government of National Accord (GNA) has, until recently, been a timid beast. Sequestered in the Abu Sitta naval base in Tripoli, its governance orders and strictures largely fell on deaf ears as divisions within and across Libya’s regions fissured even deeper. Many observers—having built low expectations—were surprised that the GNA both sacked some of its absent ministers this July and relocated to official government headquarters in Triq al-Sikka in Tripoli in the searing heat. Neither move went unprotested locally, including particularly by the prime minister of the self-declared National Salvation Government (NSG), also in Tripoli, Khalifa al-Ghwell. Libya clearly has a long way to go in truly establishing unified power and governance across the country.
Forces affiliated with the GNA, NSG, and other militia elements are still competing fiercely and violently, seeking power by consolidating their grip on a country characterized by endemic regionalism. The Islamic State, meanwhile—which has faced setbacks in Syrian and Iraqi territory—is expanding in Libya in terms of fighters, as well as attempts to grab territory and economic resources. Even though ISIS has been displaced from its stronghold in Sirte, it has not been destroyed, and its ambition to endure in Libya remains as strong as ever. Misrata’s militias have recaptured some territory, but this does not alleviate concerns that escaping ISIS forces will merely relocate, regroup, and resume launching attacks across the country. That would, among other things, likely prolong and even deepen U.S. military and strategic involvement.
The warring factions are focused on economic resources also, considered vital to political legitimacy. This was all too evident in July when the state-owned National Oil Corporation (NOC) announced a merger with a competing oil company based in Libya’s east, where a third government in Benghazi is led by Prime Minister Abdullah al-Thinni. His government demanded that the NOC be based in Benghazi and that it receive as much as 40 percent of net oil revenues. Those demands highlighted the unfolding power contest between it and the GNA, and oil ports only reopened following an intervention by U.N. envoy Martin Kobler. But there are suspicions that the Petroleum Facilities Guard, which protects oil ports, effectively strong-armed payment (including salaries for their armed forces) to keep the ports open. The fear is that this will only encourage other militias to do the same, leaving this oil-dependent economy in an even more vulnerable state. Already, the Libyan dinar has plunged to new lows, cash is short, and renewed protests over the state of the economy and foreign intervention have compelled the GNA in Tripoli to declare a state of emergency.
Now add foreign interventions to this context. U.S. airstrikes via Operation Odyssey Lightning—an air campaign launched in early August in support of Libyan ground forces, mostly in and around the coastal city of Sirte—are a short-term, exogenous shock. And the haunting consequences of NATO’s 2011 intervention remain pertinent, but they are now measured against what appears to be a growing stealth intrusion in the east involving French special forces and other Western militaries, in cooperation with the Libyan National Army. (They allegedly now have a joint command operations center in Benina.) France also supports the powerful General Khalifa Haftar, who continues to reject the GNA.
The Libyan public isn’t keen on such interference, to say the least. Protests have broken out: some dispute the GNA’s very claim to power, for example, and others specifically target France due to its links to Haftar. The French experience—intervening in the Libyan quagmire and hoping it has backed the right players—highlights the dangers to the United States.
U.S. strikes speak to the seriousness of the Libyan situation, and the truth is that recent developments in the country have important consequences for the West. Europe, in particular, is already contending with a terror threat and an ongoing surge of migrants and refugees from Libyan waters—and a worsening humanitarian crisis in Libya could destabilize its North African neighbors. No matter how much the leaders of the 2011 intervention in Libya console themselves that they acted correctly, the United States and its allies must account for the consequences of that decision.
For the foreseeable future, Libya will only implode further, animating strategic debates in many Western capitals. At present, much of this debate focuses on whether to engage or disengage (from the Middle East or even more broadly), but this is the wrong debate. Under the Obama administration, disengagement was the goal (and in many cases became a reality), but the United States found itself intervening anyway, with significant security consequences at home and abroad for its citizens. Re-thinking intervention is surely the challenge ahead.
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