These are the most important economic challenges for the expected Algerian president
The presidential elections will be held in Algeria next Thursday, December 12th, which does not receive the approval of a good part of the popular movement that started since the beginning of 2019, as the movement demands the exclusion of all officials during the era of “Bouteflika” as well as representatives All institutions that supported the environment of political and economic corruption during the last period before any elections were held there.
And if presidential elections are held on the time between five candidates, whoever wins the position of the next president awaits a bloated agenda at the economic level, to meet the high aspiration of the popular movement on the street, as well as recovering the economy from its chronic dilemmas.
It is noted that the government of “Bouteflika” and its regime were in the process of achieving a full response to a program with the International Monetary Fund, due to the negative repercussions of the oil price crisis that occurred in mid-2014, and its repercussions are still present, with its negative effects on the economy of Algeria, as an oil country.
Challenge economic identity The Algerian economy is still largely dominated by the public sector, and it is run by the government, at a time when most of the countries of the world have moved to the so-called market economy, which allows the private sector more space to lead economic activity, at the expense of the declining government role.
The challenge here is that most of the experiences in developing countries, including the Arab countries, have had bad experiences in this regard, there was not a sufficient transition period to qualify the national private sector, in terms of financing capabilities and assimilation of technical aspects, and the private sector was not directed to a national development agenda.
The result is that the experiences led to the focus of the private sector on rapid profit, so its activities focused on trade and dependence on import, and the manufacturing movement stopped, and was not developed, as well as technology has not been localized or developed.
Consequently, these economies have become mere markets for products of developed and emerging countries alike, which is what the experience in Algeria might gain, and therefore the challenge is for the new president to carry his country’s economy into a successful experiment into a market economy, in which development maximizes, national technology is built, and the private sector contributes Real production efforts away from rentier activities.
Privatization and anti-corruption Without a doubt, the president’s agenda will have to enter into an economic reform program by signing an agreement with the International Monetary Fund, leading to the adoption of the well-known agenda of privatization of the public sector, trade liberalization, the devaluation of the local currency exchange rate, the reduction of government employment, and so on.
And if it is, and it is necessary, the president must compute the corruption operations that take place in privatization programs, where the capital assets of the public sector are evaluated for less than their value, or there are local brokers who buy the public establishments offered for privatization and own them for a short period, then sell them for the benefit of foreigners, so that the market is controlled In important and vital areas, foreigners practice monopoly in the Algerian market later.
Algeria does not need a statement on corruption practices, as it has a poor record over the past years, according to the results of the Corruption Perceptions Index for Transparency International, wherein 2018 it obtained 35 degrees of the index scores of one hundred and ranked 105 out of 180 countries included in the index worldwide.
In general, Algeria’s score on the index is less than the world average by about ten degrees, as the global average is 45 degrees.
Perhaps the trials that were announced recently to try the symbols of Bouteflika’s rule, whether from businessmen or former officials of the governments and government institutions in effect, result in a real start to fighting corruption, and it requires clear rules and real spaces for the monitoring institutions there, and they enjoy real independence, the result of which is transparency and exchange. Information, whether for the civil society, or for the rest of the institutions concerned with the control of public money, and indeed for all public affairs.
Economic diversification The Algerian economy is classified as oil, as it relies on oil rent. According to the data of the World Bank, the GDP there was \$ 213 billion in 2013, but with the decline in oil prices, the value of output declined to 160 billion in 2016 and then improved somewhat in 2018 and the value of the output increased to 180 billion, due to a relative improvement in oil prices In the international market, its stability is higher than sixty dollars a barrel since 2017.
Significant evidence of the rentiers of the Algerian economy and the large role that the oil sector plays is that, with the crisis in the collapse of oil prices on the global market, the value of the country’s foreign exchange reserves decreased to 87.3 billion dollars in 2018 from 201.4 billion in 2013.
It is worth noting that Algeria’s oil reserves amount to 12.2 billion barrels at the end of 2017, according to the data of the unified Arab Economic Report for 2018, and its reserves of natural gas are four trillion cubic meters, while production of oil according to the same source amounted to just over one million barrels per day, And about 91 billion cubic meters annually of natural gas.
The challenge that awaits the new president is to adopt a development agenda that relies on building and strengthening a production base based on the agriculture and industry sectors and liberalizing production and distribution activities in these two sectors of government bureaucracy, and this does not mean that these spaces are left to corrupt the private sector, so Algeria will have achieved the negative results of countries Arabia by replacing the public sector bureaucracy with the private sector bureaucracy.
It has been observed during the past two years to bring in some auto assembly activities, and to give the name of the car industry to this activity, without any movement in the industrial sector is required, but the development maker must focus on manufacturing production lines and spare parts, to ensure the stability of the industry and achieve added value, as well On its permanent contribution to GDP with positive values, as well as providing stable employment opportunities.
The same is true in the agricultural sector. It requires revitalizing research centers, encouraging local production, developing agricultural industrialization, and adopting a strategy to provide food security through large proportions of local production. This approach – if pursued – would spare the country the severity of fluctuations in the balance of payments, which result from dependence on oil as the main source of income for Algeria.
Youth unemployment Although the movement in the street includes all age groups, the youth are strongly present and corresponds to what took place in the majority of the movements in the Arab Spring revolutions in its first and second waves, and according to the data of the National Bureau of Statistics in Algeria, the unemployment rate in late 2018 reached about 11.7%, except The unemployment rate among young people (16-24 years) is about 29.1%.
The challenge for the next president is to create non-marginal jobs, especially if oil prices improve and allow for better public revenues.
What tempts young people now to have a real role and contribution, and therefore it is necessary to truly reconsider between the outputs of the educational institution and the needs of the labor market so that migration is not a haven and a dream for young people.