Social Welfare in Algeria

Algeria like all countries of North Africa must rethink its economic and social protection policies . . .

Any Nation cannot distribute more than that it has produced, if it wants to avoid social drift.  The development of new protection needs tends to question inherited forms that eventually invite the rethinking of the existing institutions and procedural techniques.  But it is through social dialogue, that all North Africa’s countries alike, would need a new strategic vision, so as to develop a fully fledged Social Welfare in Algeria for instance, that is far from those obsolete patterns of the past, through binding economic and social dynamics within an increasingly globalized world.

Taking the typology of Denis Kessler, sociologist, I discern six forms of typical social protection models in Algeria.  These do not cover but do nevertheless play a decisive role in covering all social risks, in both concurrent and complementary forms.  They are not necessarily in this order, the religious institutions, the informal sector, the family, the business circles, markets and finally the State.

1. Religious institutions

These play an invaluable role in North African societies and are widely spread throughout the vast territories.  They cover all aspects of not only children education, adults counselling and helping and / or assisting the vulnerable but also have an indispensable social assistance role at all levels of each specific country.

2. Informal sectors

In the real world, the informal spheres of small commerce of goods and services are relatively more active and have more social impact than those supported by the State.  It is fundamentally a by-product of the long lasting malfunctions of the State, employing more of ¼ of the active population in Algeria which contributes through diffuse networks to ensure social cohesion, for the impairment of the State.  Because when a State issues laws or economic policy that does not respond or correspond to the real society needs, it brings forth laws that allow it to operate, developing informal codes much stronger than laws that the State wants to impose.  (see study under the direction of Prof. A. Mebtoul in the Institute of International Relations – IFRI – Paris France, December 2013 –  titled in French :  “Face aux enjeux géostratégiques, poids et fonctionnement de la sphère informelle au Maghreb”.

3. The Family

Its role is as always to ensure the upbringing of responsible citizens, preserve society, and balance the desires of individual liberty with the demands of community responsibility.  The family can be regarded, from an economic point of view, as a “small company”, where it pools the risk within an extended family.  Paradox is the family income that helps combat the deterioration of purchasing power and social cohesion.  With the contraction of the extended family, the development of family instability, in the case of resolution of the crisis of housing without economic recovery, also with urbanisation, the lack of planning with the construction of these ghetto without a soul, the Government unintentionally prepares the risk of a social implosion, a household capita only needing one income minimum between DZD40.000 to 60.000 per month.  Social changes have generated new risks, family dislocation being at the origin of risks which are then supported by the State, and it can be a strict correlation between the need of welfare State and disintegration of the family unit where revenues are unable to cover the needs of the gold, with the decline of the annuity of hydrocarbons , without renewal of the productive unit, assuming other governance, support the State when the risk of becoming ill, disabled, or to lose his job if he is more shared within the family, will become more and more difficult.

4. The Company

It is called in the future, to play as a factor of life’s risks management.  Yet the future strategy of enterprises in the 21^st century unlike that of the 20^th where the re-internalisation being predominant will increasingly move towards the externality.  This issue of risk-sharing opens the debate on the development of new forms of corporate citizenship in a competitive global environment, on the creation of pension funds or health insurance which, because these would be managed in a more competitive world, they would turn into a business function.

5. The Markets

Linked to the previous item, it is has been a fairly historical actor of social protection and it still is.  The great economic historian Fernand Braudel in his description of capitalism for example, clearly demonstrated the decisive role of the market in the coverage of the risks.  Industrial and financial but also social risks.  Savings, insurance and welfare were raised at the beginning of the 19^th century as the primary means to protect themselves against the risks of existence with the creation in France of the savings banks in 1818 and the encouragement of the insurance.  This function of saving in protection against risks remained dominant until the 1929 crisis, which resulted in relays by the State increased in the aftermath of the second world war, where the collective income distribution mechanisms have tended to substitute mechanisms based on financial markets or the insurance markets. But since the end of the 1990s a return there some of the markets that appear safer today than some collective devices.

6. Family, Business and Markets

Between these three sets of institutions family, business, markets, comes the role in several stages which has largely evolved from the regulatory State as an institution. The State first intervened in social protection as an employer, to develop the staff regulations of officials: retirement, for example, makes for a very long time, an integral part of the status of the official. The State then encouraged the forms of social protection implemented within the family, business or markets a range of incentives and support. Thirdly, Governments have sought to organize and standardize the forms private social protection. With the imposition of social security, the State makes protection social one of its core functions. Economic crisis throughout contemporary history, the most recent being that of October 2008, clearly show that the State is trying to provide, in a targeted way, to disability in the private sector, even as shown in bankruptcy, but not return to the welfare state.

In conclusion, social protection raises the issue of the objectives pursued in the re-distributions made between individuals and between generations.  The world in general lived on a simple egalitarian model; the State as owner and manager administered all aspects of economic and social activity, thus bringing in some reduction of inequalities and development of social services for all, although some object that this model has been fair. But this compromise is questioned with the evolution of a more open, more individualistic society requiring more personalized, with backdrop of treatments more selective.  As such it calls into question the overall statistical treatment which is less and less faithful to the more complex reality.  Market society naturally inciting towards more efforts and dynamism and solidarity in the competition implying refraining from excluding for fear of becoming a society of decadence. Thinking about the future of social welfare assumes knowing what will be the role of each of these institutions and  the existing combinations between them. It is that analysis of the re-allocations is complicated due to the variety of social transfers that a household can receive. To restore the efficiency of the system, while ensuring social cohesion, there is need to redefine the boundaries between what is the responsibility of individuals and that of families, business, social partners at the branch level or at the national level, and what is that of the State and other public authorities.

The positive experiences of the Nordic countries that ensured harmony between the flexibility of the labour market and social protection is to meditate. Surveys for some African countries show that the welfare system implements often transfers so diffuse that nobody knows who pays and who gets.  We know exactly the circuit of re-allocations between age-classes, between generations and still less so well on re-distributions between levels of income or heritage…

In summary, for the rulers of North Africa, the only lasting solution involves political and social intermediation credible enough to pre-empt any direct confrontational disputes with colossal costs.  A new social model is required and it should be sticking to economic realities and specifics of each country.  A revision therefore of the current political socio-economic of the far-outdated past patterns through far-reaching structural reforms, away from the vagaries of the up-to-now economics reconciling efficiency and equity, by unfailing solidarity.

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