|
|
Q
In recent years, privatization seems to have gained solid acceptance among the country‘s policy makers, but no majority privatization has yet taken place.
A
It is true that privatization is no longer considered taboo for Algerians. President Bouteflika managed to achieve this. But on practical terms, the privatization process has not been launched for the large state companies because of two essential elements. First, the relatively high price of oil has reduced the pressure on the government‘s balance of payments, and hence also reduced some of the incentive to push through what is a very difficult program. And this leads me to the second element. Political instability still exists in Algeria and the authorities are concerned about the direct effect this has on the country‘s social climate, which is not explosive but is still characterized by a latent instability. So the question is: If we engage in the privatization process for the public companies, will all that have an effect on the social environment or not? I answer yes, of course it will.
In my opinion, the privatization process in Algeria will mean more companies getting liquidated than privatized. These companies are unprofitable and obsolete, and in the era of globalization, the market liberalization, management, marketing, and even the product itself remain outdated. And since 98% of our exports are oil and gas, we have not created any other source of wealth that will absorb the existing high level of unemployment or address the redundancies resulting from privatization and liquidation.
If we want to have a healthy economy, to reduce the rate of unemployment, and to achieve a growth rate of 5% to 7% in order to absorb all the new workers coming onto the market each year, then a new economy – a new source of wealth outside of the hydrocarbons sector – is a must.
Q
Isn‘t privatization the key to creating that new economy?
A
Of course. The state can‘t do it. It has to set up the necessary framework to allow the development of a parallel economy, which can only be done by the private sector. There are huge opportunities in Algeria that can create wealth and employment. The country is missing only one thing, which is to reassure the investor. We have to create a favorable investment framework by developing telecommunications, agriculture, and infrastructure. On the regulation side, the government should set up rules to avoid discrimination between local and foreign investors and to liberalize requirements regulating the set up of companies in Algeria and so on. I am sure that Algeria will do it because we have to adapt to the international environment; if we stand against this our entrepreneurs will invest in neighboring counties, which offer opportunities and an adequate framework for investment. Whatever the investment, small, medium, foreign, or local, it should not be constrained by bureaucracy. This is the role of the government today – to create a climate of confidence essential to attract investors – and a priority for President Bouteflika. It‘s difficult to change mentalities overnight in Algeria, which was for a long time a monopolistic system where the only shareholder, producer, and entrepreneur was the government. I think this mentality will eventually change with the influence of foreign investors coming to Algeria
Q
Regarding foreign investors, the official view in Algiers these days is that the security crisis is essentially over. What is your opinion regarding the subject?
A
The political situation has changed dramatically, but nevertheless it is not 100% stable. Recently created political institutions are reaching a level of stability and understand the rules of democracy. The civil consensus put in place by President Bouteflika has allowed for major improvements in the security climate, however this does not mean that we are totally rid of terrorism. Security and political instability are linked to the economy. When you have 4 million unemployed people, 75% of the population under 30 years of age and without expectations for a job and accommodation, these accumulated frustrations create the potential for social instability. The transformation process in Algeria is also dependent on the military, which liberated the country 30 years ago. You can‘t pretend that the military institution will say OK, we will close our eyes, agree to everything, transform ourselves, and open up everything. Political and economic decisions directly affect the army, especially because of our autocratic past. So when I say that this process is global, it means that it concerns the political, social, and economic institutions, and the army as well.
Q
So this affects the pace of reform?
A
I think so. What is missing today is a political courage to say “OK, this is the way it is and we‘re going to do it this way.” And in a way it is understandable, since we are coming out of civil war. If I were in that position, would I have the courage to go ahead? I‘ll try to explain in a different way. Everyone knows the path to follow is inevitable and the aim is a simple objective: In Algeria we must have a fully liberal market economy. The process is irreversible and there is no way back. The global environment does not allow us to stay aside from the rest of the world any longer. We are committed to this process. Algerian politicians and decision-makers understand that we have to move toward an organized and structured liberalism, not an anarchic one, which is why a stable political climate is required.
Q
What would you say to international investors who are considering coming here?
A
I chose to stay in Algeria during the most difficult period for only one reason, and that is that I believe there is huge potential in this country. I would not be telling the truth if I said I am not here to make money. Each businessman or company manager is interested in expanding his market and increasing turnover and that is what you can do here. The Algerian market is huge and any investor today could find an opportunity that interests him. The country has a well-trained labor force that by international standards is extremely cheap and the comparative advantages offered by Algeria do not exist anywhere else. The more foreign investors come to Algeria, the better the economic environment will be, because he will bring his know-how, his technology, and of course his capital.
|
