Interview: Réda Hamiani
How can Algeria improve both knowledge transfer and local participation in large-scale projects?
REDA HAMIANI: The reality is that in 2025 Algeria will no longer be in a position to rely on its oil resources, as they will be exhausted. There is thus an urgency to find other ways of financing national economic development. It’s time to remodel the economy, even if we can continue to benefit from its hydrocarbons assets. To do this requires a larger role for the private sector, with capacity to create wealth and to favour a greater employment rate. Frankly, Algeria does not capitalise enough on its enormous assets and resources; its economic potential could and should lead the country to a double-digit growth rate. Furthermore, the national dependence on the outside world is oppressive. Indeed, Algeria has very high rates of importation both for products and services. To improve this, we need a business climate with conditions more amenable for creating companies and financing – a general economic policy more encouraging and facilitating of entrepreneurship. The administration must put itself in a position of support so that companies can develop themselves.
What can be done to encourage more public-private partnership schemes?
HAMIANI: The recurrent introduction of complementary finance laws reveals legislative instability and the lack of a real dialogue among stakeholders. Given that there are technical documents designed to address circumstances unforeseen by the ordinary finance laws, their scope nonetheless does not allow for a proper and comprehensive economic policy. The repeated use of amendments to the complementary finance law means that investors will always feel unsafe and must wait for new legislation every year. It would be worthwhile to create a mechanism for dialogue and a debate between the government and its partners on various economic matters. Tunisia has had this strategy in place since the 1990s within the framework of the Tunisian Chamber of Commerce. This allows for a consensus on economic policies, ensures stability of legislation and helps attract national and foreign investments. A spirit of consensus and a higher interest in the Algerian economy requires all economic players work together to implement a social plan and a common economic development project emphasising unity over underlining differences.
To what extent does the large role of the state in the economy affect private sector growth?
HAMIANI: A policy of having national “champions” requires a huge injection of capital as well as top management, high innovation and clear market data. As such, the government’s presence does not prevent private sector growth. The private/public duality can coexist, and many countries have successfully pursued policies by employing both government-owned strategic operators and regulators.
The private sector is not opposed to strengthening the role and the scope of the public sector, provided that the private sector would not be adversely affected by public sector operations. On the other hand, the public sector should not continually benefit from operating or balancing subsidies, which distort competition. Eventually, the champions may become private operators and the government should help them using the same conditions as in the public sector.
How can growth be spurred in southern Algeria?
HAMIANI: Financial incentives are required to develop the south. We should enable flexible decentralised decision-making, which will reduce delays, allow for arbitration on projects and facilitate funding. For example, the introduction of committees for investment promotion and land regulation (Calpiref), which help manage property more flexibly, are a major innovation that helps meet investors’ expectations. This kind of decentralisation should extend to even more development projects, upgrades and infrastructures.
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