Priority is keeping interest groups on board as the government presses on with radical economic reform

PRIME MINISTER Ali Benflis is keen to diversify and strengthen the economy to avoid over-reliance on the hydrocarbons sector

Following a strong vote of public confidence in parliamentary elections in May this year, the coalition government led by Prime Minister Ali Benflis is determined to press ahead more strongly with the economic reforms it has already begun, to applause from international financial institutions, as well as from trading and investment partners, including the United States.

When he presented the government’s new program in July, Mr. Benflis stressed that dialog would be at the heart of its strategy. That includes dialog with foreign partners, on both the economic front and in the war against terrorism, and dialog between state institutions and the private sector.

The Prime Minister acknowledged the rather meagre results so far of some aspects of economic reform, despite the commitment and action on the part of the authorities. But he drew hope from the strengthening of rights and laws, as well as recent signs of a boost to growth and investment.
Recognizing that the hydrocarbons sector will remain the bedrock of the economy for many years to come, the government is putting much effort into modernizing the sector, with the help of foreign investment and technology, in particular boosting gas production and sales. But diversification of the economy is also a high priority, which means a thorough overhaul of much of the industrial and service sectors.

Minister for Participation and Investment Promotion

Scores of redundant or badly-performing state-run enterprises have been closed down, or else are being prepared for privatization. So far, the latter process has had a slow start, and to date no major state enterprise has yet been privatized, though Mr. Benflis and his colleagues are determined that this will happen.
One of the key economic reformers within the cabinet, Hamid Temmar, the Minister in charge of the privatization program, acknowledges that one problem is keeping the country’s labor unions on board. “We are for privatization and globalization, but there will be no company privatization operation without consulting social partners and employers,” he says.

Nonetheless, a number of assets are now slated for divestment, including stakes in the national shipping company SNTM-CNAN, chemical plants and cement works. And as private enterprise’s potential is increasingly recognized as a catalyst for economic growth and greater personal prosperity, some local entrepreneurs and foreign businesses have begun exploiting new opportunities, especially in import substitution. Sometimes they have encountered resistance from vested interests, which do well out of the important export trade. But the government is clear that the healthy blossoming of the private sector is essential for Algeria’s future.

So, too, is greater competition – a reality that the country will have to face head on if it succeeds in its aspiration to join the World Trade Organization, which was one of Prof. Temmar’s main preoccupations before being switched from the Ministry of Commerce in the post-election government reshuffle.
Already some big investors, including local business families, have successfully challenged previous monopolies. Big commercial groups, such as the Khalifa family’s growing air transport and banking concerns, are a feature of Algeria’s new face.

Speeding up financial reforms is seen as a top priority by the government, to oil the wheels of the changing system. There is a new man at the top of the Finance Ministry, Mohammed Terbeche, who is himself a former banker. By having go-getting, talented men and women in charge of key ministries, President Bouteflika and Prime Minister Benflis are determined to defy the pessimists, both at home and abroad, who argue that it will take a generation to bring the Algerian economy into line with the modern world.

They say life begins at 40. Certainly, the government in Algiers is determined that 2002 will mark a fresh start for the country, which has undergone so much pain since it bloodily wrested its independence from France. More than 200,000 people died in the liberation struggle and, though the vast majority of Algerians today have no personal experience of that period, it is engraved on their collective unconscious.
Young men and women took to the streets and danced on July 5, 1962, after the French packed their bags and left. Such euphoria has rarely been seen since. Nation-building is a painstaking process, even in a land blessed with colossal natural resources. It is all the more difficult when 85 percent of the population is illiterate, and only 2,600 people in the whole country have a school-leaving certificate or higher qualification, as was the case in 1962.

Minister of Communication and Culture

Khalida Toumi, the Minister of Communication and Culture – one of the brightest new stars to emerge from a government reshuffle earlier this year – believes that independence was nonetheless a magical moment. “The 40th anniversary celebrates the most beautiful struggle the Algerian people ever fought,” she says. “It is the best reason to be proud of being Algerian.”
The Minister is all in favor of national pride – as long as it is constructive in nature. “Our educational system ought to promote a healthy patriotism that has been expunged of all forms of narrow nationalism, which is by definition hostile to universal values,” she argues.
Among the universal values that are now being championed is democracy, which is a far cry from the sort of centralized state socialism and military rule the country experienced from independence until the mid nineties. “The main challenge for Algeria, in qualitative terms, is to educate the masses and to inculcate in them authentic democratic values,” Ms. Toumi says.

“Qualitative” is a word you will often hear in her office. “Today’s challenge is to move from the quantitative to the qualitative,” she says. “In other words, democracy. Above all, it is by definition the political instrument of the market economy. There is no democracy without a market economy.”
Such sentiments are music to the ears of the Bush administration. But it does not stop there. In Minister Toumi’s view, the fight against terrorism is central to giving Algeria the sort of future that it needs.
“We have lived through a period in which the priority for Algerians was daily resistance against a program for society that was totalitarian and medieval in its inspiration: Islamic fundamentalism,” she says. “Above all, we had to make terrorism fail before we thought about developing our culture.”

Though the war is not yet won, important victories have been achieved. So now the government can concentrate more on such issues as bringing Algeria fully into the information age, and giving young people both the skills and the employment that they crave.
“Algeria is a country that is open to modernity,” Ms. Toumi declares. “There is a great flood of young people opting for foreign languages – including English, of course.”

Algeria is a republic with a bicameral parliamentary system. The 380 members of the National Assembly (roughly equivalent to the House of Representatives) are directly elected for a five-year term, eight of their number representing Algerians abroad.
The National Council (akin to the Senate) has two-thirds of its members indirectly elected for six-year terms, while a third are appointed by the President.

President Abdelaziz Bouteflika, directly elected in 1999, is also Minister of National Defense. As head of state, he appoints the Prime Minister, currently Ali Benflis.
Mr. Benflis’s party, the National Liberation Front (FNL), had a convincing re-election victory in the May 2002 legislative polls, enabling it to press ahead strongly with political and economic reforms while retaining a certain continuity.

The subsequent, extensive government reshuffle brought five women to the fore, notably Khalida Toumi, Minister of Communication and Culture, who now acts as government spokesperson. Joining her are Fatiha Mentouri, Minister-Delegate to the Minister of Finance, who handles the particularly weighty dossier of Financial Reform, Leila Hamou Boutlelis, Minister-Delegate to the Minister of Higher Education and Scientific Research, who is in charge of scientific research.
Boutheina Cheriet takes the new portfolio of Minister-Delegate to the Prime Minister for Family and Women’s Affairs and Fatma Zohra Bouchemla is Minister-Delegate to the Prime Minister for the Expatriate Community.