Economy of Algeria

Energy

Algeria has the first African company in energy, 12th with the world rank of its field, i.e. the Sonatrach. The Sonelgaz deals with the distribution of electricity and gas. Algeria is second oil producer of Africa behind Nigeria and is also the second African producer of gas behind Libya. Sonelgaz does not have any more the exclusiveness in the exploitation and the distribution of electricity, a decree has just removed this monopoly.

Transport

Maritime

Almost the whole of the international business is carried out by the sea route, via eleven ports of commerce : Algiers, Oran, Annaba, Skikda, Arzew/Béthioua, Béjaïa, Mostaganem, Ghazaouet, Djendjen, Ténes and Dellys. Except for the gas and oil terminals, there be very little alteration work of the harbor infrastructures. There is no maritime transport in the coastal traffic neither for the goods (except for gas) nor for the passengers (in spite of some attempts of short durations and the unfinished projects).

In 1964 is created the CNAN, Algerian National company of navigation, which is seen allotting the monopoly of the maritime transport (goods, passengers and hydrocarbons) as well as the towing, harbor handling and the additional activities with the maritime transport (maritime consignment, fuelling of ships, etc). At that time the ports are managed by an organization of State unique : the ONP, National office of the Ports. In the middle of the Years 1980, the CNAN is divided into three compagnies : SNTM /CNAN (in charge of the transport of the goods), ENTMV (National company of maritime transport of passengers which will take later the label of Algérie Ferries ) and the SNTM/HYPROC (National company of maritime transport of hydrocarbons and chemicals). As for the towing, it is allotted to the ports. The handling and the harbor accosting of all the ports are reserved for SONAMA (National company of handling). The ports become SPA (Joint stock company) autonomous which will also take charges handling and the towing with it. The maritime Consignment is reserved as for it for the ENCAATM (National company of consignment and additional activities to the maritime transport) which will take later the name of GEMMATED (General Maritime) and which will keep the monopoly of its activity until in 1997. The SONATMAG (National company of transit and storing) whose activity is clearly defined in its name will take later the name of MTA (Maghrebian of transport and auxiliary).

Air

Sector in full expansion thanks to the very new infrastructures made thanks to the development plans of the president. Air Algérie is also in full phase of modernization.

Truck driver

He also under development full thanks to the modernization program of the transport road and railway (16 billion dollars of public investment) which envisages the realization of the East-West highway (1 216 km) and the realization of 19.000 km road.

Industry

Pharmaceutical

The great Algerian group in the drug company is Saïdal (public). The production of the drugs covers 25% of the national needs. 70 production units concerned with the sectors private and public in addition to 21 units of conditioning operate in Algeria.

Project (2006 and 2007):

79 pharmaceutical industrial projects are under development, 43 are in phase of launching, while 29 factories made important progress, whereas seven others are in experimental period of manufacture.
As regards the production of insulin, the factory of Constantine which one can describe as major realization and his production will exceed the 100% of the national needs. With a production capacity of five million units per annum, Saïdal could certainly claim with export. Algeria currently imports 2,5 million units per annum (insulin). (source : Minister for Health, October 2006, newspaper the Platform )

Agro-alimentary

Lists of the companies algériennes :

Privé :

Cevital
BIMO
Hamoud Boualam
SIM
Ifri

Public :

Auto industry

The SNVI or SONACOME, manufacturer of industrial vehicle and Algerian truck who exports through all the the Maghreb, the West Africa and the the Middle East.

Building, public works

Algeria is under development full and full rebuilding after more than ten years of terrorism and economic embargo imposed by the the United States but which are a large economic partner today. Many companies thus emerged as ETRHB but also the great Algerian group of construction COSIDER which currently works on the Métro of Algiers in collaboration with other companies. It should be noted that this sector is much invstit by Chinese companies, indeed 27.000 Chinese live in Algeria to work in the Building industry.

Chemistry

The ENIP subsidiary of Sonatrach is the company of manufacture of chemicals. The latter is confined in the manufacture of some products such as the Méthanol or the Soude. The other recently privatized company is the Asmidal company which produces Ammoniaque. Although one qualifies the zone of petrochemical Arzew of zone, the latter is actually only one gas terminal or one limits oneself to the purification and liquefaction of gas.

Electric and electronic industry

The electronics industry recorded a fast growth these last Année S from 5 to 10% per annum. According to the ministry for industry, the Turnover of the sector of the electricity and electronic reached in 2001 approximately 33 Billion S Dollar S

Among the most active Undertaken S in this sector it there a:

Bya Electronic (SPA) (Private), joint stock company of Algerian right, located to Ain El Bya (Constantine) whose Capital is of 180 Million S of Dinar S (1,8 million Euro) and its manpower is of 150 people
the Maghreb Vision (Private); FRIGOR (tizi ouzou)
several giants world of electronics one established their factories in Algeria such SAMSUNG, LG, CONDOR…
large companies launched by the known state a long ago one kept one tré broad by market like ENIE (sidi beautiful abes) or encort ENIEM (tizi ouzou) for lelectronmenagé and biensur the ENEL (tizi ouzou) which has encort has this days the greatest industrial complex of Africa in the manufacture of condensateure and product for the transport of electrical energy

Companies

Education

Apart from the public sector, many private schools and institutes are born in Algeria for the formation of high-level technicien and frameworks.

Health

In Algeria, health remains a problem which resou gradually thanks to the creation of many hospitaux and of reform medical which adds an financial aid of the social security type.

Agriculture and fishing

The fisheries sector is in full rise because of many fishing port are modernized or modernization on the Algerian littoral what accelerates the economic dynamic in these areas. The sector of agriculture is under development full because Algeria has enormous potential in agricultural terms of pieces (Mitidja, Sebaou, Soumam, etc).

History of the economy of Algeria

Since independence Algeria launched economic great projects which allowed the installation of a dense industrial base. What enabled him to benefit from the oil revenue of which a good part was reinvested in the development projects economic.

At the years 1980, the Algerian economy had remarkable problems. Indeed, against oil crisis of 1986 an hard blow to an economy almost rentière carried. It is the period which knew the anti-shortage plans and of stabilization. With the beginnings of the year 1990, Algeria approaches the institutions of Bretton Woods in order to conclude a first agreement from structural adjustment, agreement in virtue of which, Algeria engages of the structural reforms thus concretizing the passage to the market economy whose results depend on the current and future changes of the economy world in the context of the free trade and universalization.

A planned economy and centralized centered on the oil revenue and the public investment

The period 1962 - 1971 of the Algerian economy are marked mainly by the nationalization of the key sectors of the economy and the creation of state enterprises as well as the installation of a centralized process of planning. Of this fact series of measure were undertaken with an aim of allowing the Algerian economy an extension beyond the sector of the hydrocarbons which represented up to that point, the generating sector of the financial resources for Algeria.

Indeed the Algerian State chose the nationalization of the mining and banking sector (1966), the nationalization of the sector of distribution of the oil products (1967), the launching of the triennial pre-plan (1967 - 1969) in seen installation of the average materials for the realization of the future plans, and the nationalization of the sector upstream of the hydrocarbons (1971).

Thus the Algerian State followed a development policy having for objectives: “consolidation of national independence, introduction of a company freed from the exploitation of the man by the man, the promotion of the man and his free blooming”. The State aimed through this strategy at setting up an industrial structure as well as the finishing of the public institutions. Thus the Algerian economy was characterized by a big change of the public sector in Rough the Interior Production (PIB) which passes, according to the ministry for Finances, of 34,07% in 1969 to 65,42% in 1978, the investment multiplied by 15 during the same period. This growth sometimes consists of 50% of the GDP. This irrefutable fact is due to the fact that in 1962 Algeria was mainly an agricultural country where industry was developed little and dice 1967, with the pre three-year plan, a socialist model of growth was implemented, it is characterized by a autocentré development, privileging the policies of substitution for the importation and the development of hydrocarbons in order to have financial resources to finance the great projects the investment.

The Algerian companies were charged to carry out the infrastructures which they needed for their development and to also help the local government agencies which, at that time, had few human and material means. Indeed, the role of the Algerian company was not limited to a quite precise, creative economic activity of richness. A hundred economic State enterprises (national) and 1200 regional State enterprises and local installations within the framework of the total planning coordinated by a secretariat of State in the Plan. Each state enterprise had its own annual plan, the ministries concerned approved these plans, controlled the imports, the fixing of the selling prices and the investment plans over multiannual periods were studied, approved and implemented.

The Treasury directly financed (100%) these investments in the form of loans in the medium and long term and guarantee all the external appropriations mobilized for the investment. This allowed the state a better control on the investments, a greater mobilization of the financial resources and their drain towards “the most profitable sectors socially”. The profit companies of this way of financing should, n the other hand, take part in the budget of the State and convert the equipments with depreciation into goods of equipment (good of Treasure). Nevertheless, this contribution did not exempt them the refunding of the debt of investment.

These two measurements were quickly repealed, since the major part of the state enterprises was to face many financial problems and were unable to release from the positive cash-flows necessary to the refunding of the debt, even less to take part in the budget of the state and to buy goods of treasure.

Before the possession of the contracts of realization, a project is subjected to three levels of decision: • The approval of the ministry for the supervision on the basis of technico-economic study presented by the company; • The decision of individualization of the ministry for planning on the basis of request made by the company and the ministry in charge; • The decision of financing of the ministry for finances on the basis of financing suggested by the company and discussed on the level of the board of management of the Algerian Bank of the development (BAD). This financial institution belongs to the Algerian Banking system of the time, which is also made up of the central bank, the Treasury and the trade banks.

The state enterprises had the characteristic to build the totality of their infrastructures of production of goods and of been useful on the internal and external debt, as they had the characteristic to be able to accept the foreign partnership in their capital or the assembly of new industrial projects or others. The programs of realization and work were so many and complex and the completely mobilized local potentialities, an exemption: the creation of mixed companies of work with foreign partners. Moreover, each state enterprise can treat only with only one of the five State Banks, which provide them in a systematic way of the working capital in the form of bank overdraft ata rate very low fixed by the government.

This strategy was rather profitable since it allowed, according to the Bank of Algeria, a ratio (investment rate): investissement/PIB from approximately 45% during the period 1968-1980, a rate definitely higher than that of the countries with average revenue which accounts for 26%. According to the same source, during the same period, average annual growth rate was of 6%. The development of the economic infrastructure and social knew the same type of growth and it is thus, for example, which, according to company SONELGAZ, the electrification of the hearths passed from 20% to independence to more than 96% in the year 2000 and this in spite of a tripling of the population and which more than 1,5 million hearths is connected by drain to natural gas.

The sector of the state enterprises knew a strong growth although these last knew deficits of operations. Indeed, the administration covers on the whole, their deficit. The state enterprises were highly capital intensive, depended on the importation of inputs, were not very active on the development of employment, enjoyed a total protection of their interior market and were not held to export to satisfy a certain part of their requirements in foreign currency. For the private sector and up to 1973, its share in the production was higher than that of the state enterprises. Period during which, the private companies could benefit from the effects of valorization of the receipts of hydrocarbons while spreading with an induced request.

For agriculture, as of independence and by fustigating the despoiling system of colonization, it was set up the system of the Committees Self-managed within the framework of the self-management of the exploitations before at the hands of the colonists. The experiment turns short, before my installation of “the Agrarian Revolution” where the Algerian landowners were expropriés their fruit-bearing grounds and plantations with the profit of the Funds national of the agrarian revolution (FNRA).

But food independence, one of the broad objectives of the agrarian revolution, was a dream. Indeed, the agricultural produce and the condensed milk were cruelly lacking. Algeria did not produce half of these requirements in agricultural produce and used a good part of these hydrocarbon receipts at the time of the first oil crisis (1973) for its food invoice which did nothing but increase year per year.

The precariousness of agriculture and light industry generated the increase in the importations of goods of consumption. To cure it, the State chose the external financing, while benefitting from a favorable situation from the financial markets and tankers to finance the imports by hydrocarbon exports and the foreign debt.

The strong ambition of the development and the favorable situation of the international financial markets have, in addition, leads the public authorities to consider the realization of several projects. The costs of the investments and the incapacity of the companies to release from cash the flows positive led to the installation of the system of saving in debt. Planning not being controlled, one witnessed an adequacy between the development of the sectors of industry, agriculture, hydraulics, public works, distribution of the oil products and the building like between the various areas of the country.

Reorganization of the state enterprises and crisis of the Algerian economy

With the beginning of the year 1980, the hundred national companies was restructured in addition to five hundred state enterprises, and the vertical mode of integration of each national company was broken, to see transforming into horizontal integration or rather into separation of the functions of the upstream and the downstream. As we underlined in the first chapter, company NAFTAL was born from this reorganization of SONATRACH in 1982 then the separation of refining and the distribution in 1987.

During this period, the dynamics of the productive investment being slowed down and the financial resources of the state were mainly diverted towards consumption. The producer prices were fixed by the law and a very great number of goods and services continue to be subsidized by the Treasury.

Moreover, the establishment of the monopoly on foreign trade, its exercise allotted at commercial large companies as well as the monetary expansion involved a strong demand impossible to satisfy and, its corollaries, the shortage and the development of corruption. This rigidity of central planning and the policy laxist in term of assistances and subsidy to consumption appeared fully with against oil crisis of 1986: a fall of 50% of the budget revenue coming from hydrocarbons, believer to an economic situation limited in time, the State continued its economic policy laxist by increasing the budget deficit and while incurring massively with the foreign debt to finance the inputs of industry in the short run and of large building sites of infrastructure. The debt of the country worsened in value and for a very unfavourable structure.

For agriculture, and under the impulse of the landowners expropriés within the framework of the agrarian revolution, one attended the end of this agrarian experiment which however had, on the social plan, much of positive aspects like the construction of agricultural villages and the fixing of the rural population as solution with the rural migration. In 1982, four years before against oil crisis, the agrarian revolution is abandoned as a philosophy of revival of agriculture and in cost with the system of the Fields Self-managed with the DAS (socialist Agricultural domains).

In 1987, at most extremely of the manifestations of the expropriés farmers who asked for their grounds, the ministry for the Agriculture of the time set up the Collective Farms (EAC), another collectivist project likely to fail. It is in fact the third great Shock of Algerian agriculture. Consequently, the sector suffers from land problems that before. If the landowners expropriés within the framework of the agrarian revolution took again their fruit-bearing grounds and their plantations, other speakers intervened in the sector by creating a vast market of land agricultural that the State does not control. The problems since 1990, however, started to be stamped, but relatively.

Started into 1983/1984, the economic crisis in Algeria was worsened, dice 1986, by the falls of the oil prices and the dollar which reduced the incomes of exports, based to 95% on hydrocarbons. Until, consolidated by its surpluses in currencies, the country spent (while borrowing) to import mainly, 80% of its food consumption. Algeria had access without problems up to 1988, at the market international of the capital. The oil revenues started to fall, the annual growth falls, monetary reserves decrease and impoverishment worsens.

Crisis of debt, intervention of the institutions of Bretton Woods and beginning of liberalization

In 1988 the first contacts of Algeria with the World Bank (BIRD) were undertaken. Algeria had then preferred to negotiate with the World Bank a financing intended for the structural adjustment having to touch the whole of the economic sectors. In this moment, and according to the Bank of Algeria, the receipts of exports had still fallen into 1988 of 12% compared to 1987 after having already moved back of 35% between 1985 and 1986 passing from 13,08 M$ with 8,06M$. The imports which were for a great part incompressible were brought back from 8,8 M$ in 1985 to height of 7,88 M$ in 1986. At the time when exports and the imports dropped, the amount of the debt expired passes from 4,93 M$ in 1985 to 4,95 M$ in 1986, thus carrying the ratio: debt servicing/export from 35% to 54,3%, against 27,6% in 1979; 29,63% in 1982 and approximately 33 to 35% between 1982 and 1984.

In end of the year 1988 this ratio made a dramatic rise with 78,2% of the receipts of exports. In such a situation, it was not surprising D `to arrive at a level of deficit of the balance of payments - currents of more than 2,09 M$ is the equivalent of 30% of the imports. The forecasts for the year 1989 did not lend either to the optimum. The instability of the world oil market on which strongly the nation's economy depended was such as was difficult to see the future clearly. Thus the government was constrained to start again the discussions of Bretton Woods.

The possibility of widening the negotiations in the IMF, without going however until requesting a programme of stabilization as known and conceived by this institution, not being isolated. What was made thereafter since a first agreement Stand Bay signed between Algeria and the IMF on May 31st, 1989. This agreement was accompanied by a compensatory Easy financing term (FFC) for an amount of 560 m $. A second similar agreement was signed in June 1991 for a financing of 400 m$. The consumption of this credit was not total, because the fourth section was blocked by the creditor because of nonrespect by Algeria, some closed in relation to the criterion of performance. A third agreement Stand Bay was signed in May 1993.

The Algerian government had profited in accordance with the provisions of this agreement, of a compensatory financing about 1M$. The engagement of negotiation with the IMF (Funds international currency) with an aim of supporting the program of economic revival led the State to accept in 1989 a liberalization partial of the foreign trade. A more flexible mechanism of allocation of currencies to the companies thus came to replace the centralized control system of the imports. From now on, only the imports financed on appropriations of more than 90 days were subjected to the authorization of the Central bank. For the imports of an amount of less than 2 million $, law 90-10 of April 14th, 1990 relating to the currency and the credit was supplemented in August of the same year by a finance law respective envisaging, amongst other things the opening of the Algerian market to the installation of dealers and wholesalers who contributed thereafter in a very significant way to progressive dismantling of the monopolies of importation. These dealers who enjoy exclusive rights of distribution of the products of foreign suppliers were nevertheless to obtain as a preliminary the Council of the Currency and Credit the authorization necessary to the importation or the acceptance of the overseas investments. The approved importers are also authorized to import certain goods without restriction no, provided that they are financed on their own resources in currency. Moreover, the imports lower than 10.000 $ are by no means regulated. The reform of the mode of the foreign trade especially made it possible to bring back the obligation of retrocession of the currencies coming from exports to 50% for the agricultural produce, 20% for the re-entries under tourism and the wine, and with 10% for transport, the insurances and the finance departments.

The widening of measurements of demonopolisation of the foreign trade as from 1991 allowed any natural person or morals registered with the register of trade of Algeria to have easily access to the importation of goods is for its own use or in order to resell them as wholesalers, except for the products whose importation is prohibited by the law. The access of the importers to the currencies to official foreign exchange rate was completely free. This flexibility in the financing of the imports was somewhat moderate in 1992, following the complication of the situation of financial balances of the nation's economy. The list of the goods prohibited to import was extended to new products and the trade banks were not obliged to make approve by the central bank their assets in currencies coming from loan abroad or the export of hydrocarbons.

During three years 1990-91-92, the crisis was choked thanks to the increase in the crude courses following the bursting, in January 1990, of the war of the Gulf. According to the Bank of Algeria, the amount of Algerian hydrocarbon exports was of 12,384 M$ in 1990, against 11,975 M$ in 1991, and 10,848 M$ in 1992, it was necessary that this amount goes down to 9,59 M$ in 1993, so that the vase overflows and that the crisis, deferred several times, emerges from only one cost. At the same year, Algeria had refunded, within the framework of servicing debt, some 9,05 M$, that is to say a ratio servicing debt/export of almost 83% and monetary reserves are descended on a catastrophic level not being able to cover more than one month and half of imports. The nation's economy failed to know the situation of suspension of payment similar to that which Mexico with the beginning of the year 1980 or Argentina knew at the end of decade 90.

The reforms 1989-1993 did not almost change anything with the situation. To start with the reorganization of the state enterprises which was started with the beginning of the year 1980 without leading in end to redesign true economic sectors able to be producers of wealths instead of of being consumers.

Quite to the contrary the reorganization of the state enterprises had worsened the situation of their treasury insofar as their autonomy had not been preceded by the cleansing of their deficit accumulated during several years of directed economy and administered prices. The government had also not envisaged a compensation system of the losses induced by a series of devaluations of the dinar which doped the costs of the intermediate consumptions imported for more the share and volume of their debts. Certain companies were sometimes with a wage bill exceeding their turnover. Others did not manage to pay their workers only on bank overdraft…

In 2006 Vladmir Putin, Russian president was in official visit has Algiers to reinforce the bonds between Algiers and Moscow: successful bet, Algeria carried out a Russian purchase of armament to the point of technology for the moderate amount of 14 billion dollards. In Moscow exchange made cancelled the debt of Algeria which was of 26 billion dollards. Algeria is thus only and first country with a debt with 0 dollards without to have had recourse to the assistances of UNO

Program structural adjustment and passage to the market economy

This crisis had the merit to highlight in a final way the dysfunction of the planned economy such as it was conceived and to be directed towards the structural reforms in a decisive way contrary to the hesitations noted of 1989 to 1993. An agreement of rééchelonnement of the debt was signed with the Club of Paris and the Club of London (BIRD), accompanied by a Program of structural adjustment (NOT) whose application by Algeria is strictly controlled by the IMF, the World Bank (BIRD) and the European Union. In accordance with the provisions of this agreement, the Algerian government had profited from a widened Easy financing term (FE) of a value of 1,8 M$. This agreement which is spread out over one 3 years period allowed, with the agreement of May 1993, to cure imbalances of the balance of payments strongly affected by the fall of the courses of hydrocarbons and the weight of the foreign debt.

The Program of structural adjustment (NOT) is articulated around four objectives:

• To support a strong growth so as to absorb the increase in active population and to reduce unemployment gradually. • To ensure a fast convergence of inflation towards the rates in force in the industrialized countries. • To attenuate the provisional repercussions of the structural adjustment on the most stripped layers population. • To very restore the viability of the external position by constituting sufficient monetary reserves.

The STEP relates to the liberalization of the mode of the exchanges, the liberalization of the foreign trade, the liberalization of the prices, the reforms of the state enterprises and the development of the private sector, an orthodoxe financial policy and the reform of the land system, the modernization and the reform of public finances, a device of social protection, the development of the job market and in end the sector of agriculture by a limitation of supports prices of cereals, a reform of the land mode as well as the privatization of the grounds and the agricultural activities.

The STEP contains 76 well defined actions and whose application programmed in time was strictly implemented between April 1994 and December 1997 by the Algerian authorities and economic operators and social.

The passage of an economy directed to an market economy is consolidated by the devaluation of the dinar of more than 75%, the liberalization of the foreign trade, the freedom of the prices, the promulgation of a law on competition similar to what exists in the liberal economies (January 1995), the promulgation of a law on privatization (August 1995) as well as the separation of the State public power of the State shareholder through the law on the Management of the commercial Capital of the State (September 1995). That without of course omitting the reform in 1995 of the code of the trade and the Algiers Stock Exchange installation thereafter.

At the conclusion three years of application, the STEP produced recessive effects which touched certain sectors, of which that of industry. Indeed, according to the ministry for Industry the index of productivity fell of a little more than 11 points between 1994 and 1997. In fact especially manufacturing industries were most particularly affected by the recession, since their production fell of more than 21 points between the two dates. On the other hand, only industries having recorded a regular growth are well logically the branches of energy and hydrocarbons. The branch of construction materials also knew a growth of its production, although less regular than the preceding branches. As for agribusiness industries they seem to have better resisted, even if their decline is relatively important between 1994 and 1997, since the index of their production fell all the same of 13 points.

The constraints structural of the nation's economy contributed to the aggravation of the situation of the national companies. The State disengaged economic spheres, while deciding not to protect, as in the past, the national companies. These last had, without being prepared there, facing an environment resulting from the macro-economic decisions. Indeed one could notice a strong correlation between the devaluation of dinar and the swelling of the bank overdrafts. This last passes, according to the ministry for Industry, for the whole of the industrial sector, from a little more than 90 M of dinars in 1995 with more than 113 M of dinars to the end of the year 1996. It accounts for 28% of the total turnover, that is to say 3,4 less receipts on average. The overdraft of the state enterprises strongly increased since 1993, passing 10 M of dinars at the end of December 1994 to 92 M of dinars at the end of December 1995.

The State, whose the production at the state enterprises was withdrawn, made an effort however, to cleanse the situation in which its entities evolved/moved. Subjected to severely tested, the national companies did not succeed in adapting to the new economic situation, and this, in spite of the colossal sums from which they profited. According to the CNES, meadows of 800 billion dinars were injected into the process of cleansing of the companies whose results are always made wait. Presented like an ambitious program intended to revive the production units, the recovery packages were applied not without difficulties. Reforms which produced perverse effects in the world of the company: hundreds of production units were dissolved and of the thousands of workers were laid off. Indeed, more than 800 companies were touched by measurements of dissolution involving, according to the ministry for Employment, the removal of 211.960 employees.

For the latter, it is advisable to add the voluntary departures 50700 (financed by the Treasury within the framework of the financial cleansing of the companies) and the personnel put in layoff (100 840 agents) and for abnormally long durations. In addition, according to the UGTA (Union general of the Algerian workers), the volume of the compressed personnel is equivalent to meadows of 5% of the whole of the population working in the sector structured in 1997 (4,7 million people); if one adds the retirements anticipated to compressed manpower, one obtains the figure of 264.000 touched employees, which accounts for 6% of the occupied population. Massive compressions by the means of the voluntary departure and the early withdrawal related to the most qualified personnel and most tested; that explains the collapse of manufacturing industries and irons and steel industry, metallurgical, mechanical, electrotechnical and electronic where the experiment, individual dexterity and the collective formation constitute a share fundamental of the capital and inheritance of the company.

The improvement in 1994 of the situation of the balance of payments thanks to the financial assistance of the Funds international currency (FMI) and rééchelonnement of the national debt with the Club of Paris (June 1994) which made it possible to release from the additional liquidities of 12 M $, made it possible to into force raise new commercial restrictions between 1992 and 1994. To start with the obligation for the importer of certain particular consumables and to finance them by its equities, the importation of industrial and professional material of occasion, until the minimal expiry applicable to the import credits. According to the ministry for the Trade, by concern of preparing the integration of the Algerian economy in universalization, the highest rate of the customs duties applicable to the imports was the subject of two reductions to pass from 60% in 1994 to 50% in 1996 and to 45% in January 1997. Concerning exports, the prohibition which struck a list of 20 products approximately was removed to arrive in June 1996 at a mode of foreign trade free from all quantitative restrictions. The liberalization of the exchanges with outside was sanctioned by an increase in the value of the imports in 1994 and 1995 without reaching however the level recorded in 1990. The retreat of the quantum of imports in 1996 finds its explanation in the contraction of the agricultural imports thanks to exceptional domestic harvests, the rationalization of the companies of their intermediate consumptions to be able to face the competition which started to make its anchoring on the local market, and the contraction of the actual value of the incomes of households.

With the liberalization of the foreign trade accompanied by a drastic fall of the purchasing power of the population, the Algerian companies were vis-a-vis a fall of the request, products inadequate, hard to get rid of because of bad quality and immense raw material stocks, intermediate goods and end products. According to the ministry for industry, the ratio stocks/turnover accounts for 29% in February 1995, 25% in 1996 and 22% at the end of first half of the year of the year 1998.

The principal macro-economic results of the STEP are the following:

• Inflation, after having reached 39% in 1994, fell to 6% in 1997. • Monetary reserves passed from 1,5 M$ in 1993 to 2,1 M$ in 1995 then 8 M$ in at the end of 1997 is eight month of imports. • The ratio of the external debt servicing was brought back from 83% in 1993, to 30% in 1997

• The GDP, after having regressed of 2% in 1993 regressed only of 1% in 1994 to post growth rates of meadows of 4% in 1995 and 1996 and higher than 4,2% in 1997. • A system of price based on the market was established, the price control and the subsidies generalized having been abolished.

The disengagement of the State of the productive and commercial activities went hand in hand with the establishment of a banking system more centered on the market, which imposed budgetary constraints on its customers, including the state enterprises.

The research of the growth after the STEP

Support program with economic revival (PSRE) and consolidation of macro-economic balances

See too

List of Algerian companies
Algeria

External bonds

Economy of Algeria
Algeria and the IMF
Sector of finance in Algeria

Random links: