Bouteflika puts economic spin on political crisis

Published June 3rd, 2001 - 02:00 GMT

Following a massive demonstration of force on Thursday, May 31, which ― according to whom you choose to believe — included between 100,000 and 200,000 protestors, most of whom were Berbers marching through the streets of Algiers, Algerian President Abdelaziz Bouteflika announced that he was reshuffling his cabinet. 


The march had been called to protest police brutality, but the ministerial changes announced by Bouteflika indicated his preference to put an economic spin on the crisis, rather than tackling the intricate political issues that he faces. 


Despite earlier rumors that up to 11 ministerial posts would be affected, in the end the cabinet reshuffle was not particularly dramatic. The main fall guy was Finance Minister Abdellatif Benachenhou, who was replaced by the trade minister, Mourad Medelci. Noureddine Boukrouh, former minister for small businesses, took over from Hammid Temmar as privatization minister.  


But most of the hard-line ministers in the protestors’ sights held on to their jobs. They included Interior Minister Nourreddine Yazid Zerhouni, who is leading the suppression of the Berbers rebellion in the Kabylie region, and Justice Minister Ahmed Ouyahia, who currently is easing a bill through the Algerian parliament that will curb the country’s already restricted press. For his part, Bouteflika held onto the defense portfolio.  


The opposition’s response was swift. Quoted by the BBC, a spokesman for the Rally for Culture and Democracy, the main Berber party, said "The reshuffle does not meet the expectations in Kabylie. We think the government should resign as it is responsible for the incidents that soaked the region with blood." The Socialist Forces Front termed the reshuffle a "non-event." 


But Bouteflika was determined to press home his economic program. "This measure, which comes at the start of a support program to restart the economy, is based on a desire for the best cooperation possible between different sectors and a better coherence and effectiveness in government action," a statement released by his office said. ”The time of protectionism is over. We've finished with an administered economy," the statement added. 


Bouteflika’s insistence that the economic state of the country is driving political discontent is not an altogether unreasonable assumption. According to figures provided at a national forum for health in Al-Bleida province by Abu Jerra Sultani, the minister of labor and social protection, 1.9 million Algerian families live under the poverty line and 11 million Algerians are poor, out of a population of about 31 million. Unemployment officially stands at 22 percent, although observers claim it to be as high as 30 percent. 


But the economy is the one area in which his government appears to have been making some progress. After registering 2.6 percent growth in 2000, the Algerian economy is expected to grow between four and six percent per annum over the coming few years. Inflation in 2000 was 0.3 percent, down from 2.6 percent in 1999. 


According to the National Center of Computing and Statistics (CNIS), Algeria registered a surplus of $3.15 billion in its balance of trade during the first quarter of 2001, somewhat down from a $3.54 billion in the same period last year. This was the result of exports falling 4.7 percent to $5.55, while imports rose 5.03 percent to $2.4 billion. Algeria's foreign currency reserves stood at $5.1 billion, up from $3.1 billion at the end of January 2001. In 2000 the country’s foreign debt fell by 12 percent to $25.2 billion, or 19.8 percent of GDP. 


But the economy is grossly unbalanced, with 98 percent of the foreign currency revenue coming from oil exports. As a result, the Bouteflika government is committed to nurturing the growth of non-oil sectors, and slow but perceptible progress is being made. The non-hydrocarbons industrial sector was reported to have grown by 1.4 percent in 2000.  


Non-hydrocarbons exports increased from $410 million in 1993 to $630 million in 2000. But all the non-hydrocarbon growth in 2000 was registered in the private sector, which expanded by eight percent, compared to a 2.3 percent contraction in the public sector.  


No wonder then that, in the latest cabinet reshuffle, Bouteflika reaffirmed his commitment to privatization. Plans have been announced to open the country’s mobile phone sector to international competition. The government also intends partially liberalizing its oil and gas sectors—a move that it says will lead, over the next five years, to a 30 percent rise in gas sales and to a doubling of LNG production capacity. 


Last week it was announced that Algeria's state-owned Sonatrach and Gaz de France had signed three agreements, which involve the creation of a joint LNG marketing company and the renewal of two existing LNG sales and purchase contracts. Called Med LNG and Gas, its goal will be to secure short and medium term LNG sales, mainly in the European and North American markets. ― (MENA Report)

© 2001 Mena Report (

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