Confidence and serenity: President Abdelaziz Bouteflika on a decade of growth

The Report: Algeria 2012 – Country Profile

Algeria has made important achievements over the past decade, thanks to crucial measures taken in terms of legislation and regulation to help ensure more sustainable development of economic activity. All these measures fall under a more global strategy of reinforcement, modernisation and diversification which seeks to help strengthen the competitiveness of the national economy in the international context and to move it away from its dependence on hydrocarbons, while also supporting the role of companies as drivers of economic growth. These policy measures have covered many topics, including a redefinition of investment promotion regulations, an update and redefinition of the state’s involvement in terms of industrial capacity, support and capacity building for private companies and a diverse range of incentives with regards to domestic companies and the promotion of the local production. Furthermore, the rational and careful management of our country’s natural resources have made it possible for Algeria to sustain the process of growth – and even to intensify it – in terms of investment and development, even as we are able to build up our strategic external savings – all of which allows Algeria to consider the future with both confidence and serenity. As a result, Algeria’s people have benefitted from economic growth, through the efforts to improve the living conditions of all the population as well as through the rise in their incomes. And alongside the increase in their purchasing power, the government has been able to roll out welfare protections to help safeguard and strengthen the gains citizens have made, whether through subsidies and price support for commercial products or services, or through poverty alleviation measures under our national solidarity. The five-year development programme which we started in 2010 will reinforce the process of economic growth while giving detailed attention to the improvement of the living conditions of our citizens. Policies to support improvements in our human development indicators, for example, are receiving roughly half of public investments today. We will take particular care to ensure an equitable and just distribution of the income and fruits of Algeria’s development, through the continuing articulation of a policy of national solidarity that is more adequate and better targeted to the needs of the weakest and poorest.

The creation of jobs and a reduction in the level of unemployment constitutes one of the strategic objectives for our national development policy. Thanks to the efforts made through a number of public investment programmes – including a wide variety of measures that have facilitated the entrance of young first-time applicants to the marketplace and given assistance to the creation of micro-companies by the young entrepreneurs – job creation by companies has increased. Thanks to this, the rate of unemployment, which was almost 30% in 1999, went down to 10% by 2009.

The fight against unemployment – and more specifically the fight against unemployment among our young people – will be continued with determination. From this point of view, I have fixed as a key objective for this current five-year period the addition of 3m new jobs, half of which will be created thanks to the large volume of capital which is being invested during this period. The other half will be created through implementing new public initiatives which focus primarily on employment creation and promotion.

To maintain this progress, additional efforts have been made to ensure greater participation by the local economy in public initiatives and capital programmes, which had a significant impact on employment and enabled Algerian companies to contribute more significantly to this job creation.

The mechanisms and the sources of financing for companies were further reinforced through the creation of the National Investment Fund. In addition, a local investment fund, at the local level and managed by the banks, was created to facilitate the mobilisation of capital to help give assistance to small businesses.

The development of small and medium-sized enterprises (SMEs) has been a priority for Algeria, and important initiatives have focused on expanding the SME segment, through the establishment of advice centres, the reinforcement of credit guarantees, the installation of several new financing mechanisms and the implementation of a national upgrade programme. This national initiative is currently helping strengthen 20,000 SMEs over the 2010-14 period.

As far as the rehabilitation of public companies is concerned, I should stress that the broader policy for reviving our national industries also relies on the economic rationale of providing our companies with sufficient capacity for production, which will take time and modernisation. The companies will be supported in this process by the state, with policies that will help provide the means for rehabilitating the industrial sector.

This requires all participants within the economy to do their part in contributing towards the state’s objectives, which for 10 years now have been seeking to improve the level of productivity and competitiveness of our companies, as well as the quality of Algerian products. For its part the state will undertake the necessary changes to the structural plan, to install the needed economic and regulatory instruments, alongside capacity building and support, to improve the business climate and to support productive investments.

Firmly committed to protecting the national economy, the Algerian government has also placed the fight against parasitic corruption and fraudulent practices at the centre of our economic policies. The legal parameters and the necessary preventative mechanisms to counter this have already been established, but the state will continue to devote any needed means to reinforce and support it. This is why in 2010 the state was equipped with a legislative arsenal that aimed at preventing and at reducing the level of corruption and any related fall-out within the national economy.

As an example and to illustrate this, we can look to the overhaul of the law against the corruption, which finally allowed for the creation of an enforcement office dedicated to combating corruption across our national territory, and which obliges firms tendering for public contracts to produce a declaration of probity engaging their responsibility in front of the courts.

We could also refer to the revision of the law on the Court of Auditors, which emphasises the need for transparency in commercial transactions, through proper invoicing, the justification of profits and a renewed fight against those who fail to observe social security and industrial legislation. These measures were obviously legislative in nature, but were accompanied by the dedication, within the framework of the five-year 2010-14 programme, designed to improve the level and quality of public administration and regulation.

All these measures fall under a more general objective of the construction of a strong economy – an economy with sustained high growth that nonetheless ensures a social wellbeing for all the participants within it, through an equitable distribution of the profit created and a rehabilitation of the value of work. We all are challenged so that each one of us – the state, the employers and the workers – could bring his or her full and entire contribution to the reach this objective, within in a climate of peace and social stability.

All of our economic operators must widen the spectrum of their activities while better directing themselves towards the activities of production, which is the only way we can ensure and consolidate Algeria’s economic self-sufficiency while generating steady profit and regular employment. They should also reduce reliance on imports, which accentuate dependency.

Lastly, everyone must strive to increase labour productivity, to reinforce the practice of social dialogue, and to support state efforts in the fight against corruption and any form of economic predation.

I remain convinced we are ready to take up the challenge of economic development and social progress, and build a society where each Algerian will be able to reach out and contribute to the prosperity of the nation.