President Abdelaziz Bouteflika on realising potential

Over the past year, Algeria has continued the economic expansion that it has been pursuing since the start of the millennium. Our overall strategy is marked by efforts to reinforce, modernise and diversify our economy and to help strengthen its competitiveness abroad and move away from dependence on hydrocarbons, all the while supporting the role of home-grown companies as primary drivers of economic growth.

In the past, policy measures have focused on securing an enabling business environment facilitated by sound investment promotion regulations, a redefinition of the state’s involvement in terms of industrial competence, and support and capacity building for private firms. Furthermore, prudent management of our country’s natural resources has enabled durable and progressive economic growth, attracted investments from domestic and foreign sources, and helped build up our strategic external savings. Hydrocarbons revenues directed towards the realisation of major public projects are benefitting the nation, as well as training and development programmes, energy independence, efficient public facilities and a competitive industrial base. This has played an important role in reducing the investment deficit incurred during the decade of terrorism and will prepare our economy for a future without revenues accrued from oil and gas extraction.

Economic policies in 2013 have worked to underpin this trend, all the while anticipating economic and political developments at the regional and global levels. As such, recent legal provisions are characterised by encouragement of investment and youth employment, promotion of national production activity, alleviation of fiscal pressures, simplification of administrative processes and continued support for housing needs, as well as external trade and investments.

The five-year development programme that we started in 2010 remains the main priority for all ministries. Algerians should expect members of government to show their full commitment to executing new projects and programmes in optimal time and conditions. These programmes go beyond the standard assignments as specified in annual budgetary allocations and comprise vital objectives to achieve the human development standards that we have set ourselves.

As such, in 2013 we introduced new laws that incentivise research and development for mining sites and encourage investment in new exploration projects in an effort to turn this industry into a stable source of revenue and employment. The sector’s benefits will particularly apply to remote, deprived areas where extractive activity has the potential to result in dynamic industrial and economic growth bases. Consolidation and expansion of our industrial base constitutes a primary focus for our ongoing development plans. To that effect, the government will continue working through new relationships to promote a national economic development plan based on strengthening domestic firms that, thus far, have been the primary source of wealth and employment creation.

Of particular importance is agriculture, for which the government has already undertaken major efforts that are likely to lead to qualitative and quantitative improvements of production standards, and even to nationwide food security. Agriculture plays a vital role in the future of our country and in order to guarantee its sustainable development we must create the optimal conditions for modern rural development, technology transfers and practices adapted to our specific economic, social and ecological context. To that effect, Algeria is involved in various initiatives to promote more efficient water usage through improved agricultural techniques, a change in consumption patterns and regulation of the global food market. We also take an active part in processes promoting the attainment of the Millennium Development Goals, including those that reference the dangers posed by environmental degradation. Our investment plans for vital infrastructure, such as water dams, transnational pipes and regional water reserves, have allowed Algeria to double the total surface of irrigated land in the past year.

The development of small and medium-sized enterprises has been another priority, and important initiatives have focused on their expansion through the establishment of advice centres, the reinforcement of credit guarantees, the installation of several new financing mechanisms and the implementation of a national upgrade programme. Moreover, the emergence of a modern and competitive national industrial base hinges on state support for entrepreneurs and investment promotion. All sectors need to step up their dynamism and initiative to encourage new enterprises and innovation that will lead to more durable revenues and jobs. It is, therefore, important that we mobilise efforts and resources in line with the scale of the tasks before us.

Firmly committed to protecting the national economy, the Algerian government has also placed the fight against corruption and fraudulent practices at the centre of our economic policies. The legal parameters and the necessary preventative mechanisms to counter this have already been established, but the state will continue to devote any needed means to reinforce and support it. This is why in September 2013 we amended Decree No. 05-06 of August 23, 2005 with reference to the fight against smuggling in a bid to reinforce judicial powers and increase efficiency when protecting the national economy.

This followed earlier moves to equip the state with a legislative arsenal aimed at preventing and reducing the level of corruption and any related fall-out within the national economy. Another example is the revision of the law on the Court of Accounts, which emphasises the need for more transparency in commercial transactions through proper invoicing, the justification of profits, and a renewed fight against those who fail to observe social security and industrial legislation.

At the macro-economic level the approach is paying off. For 2014 we estimate that our economy will grow by 4.5%, and the inflation rate will be maintained at levels below 3.5%, all the while ensuring a consistently sound budget balance and focusing on presidential economic development programmes aimed at increasing diversification of our sources of income.

But while sound top-line performance is important, the bigger story lies in the socioeconomic impact that lies at the heart of our economic approach. In the definition and roll-out of development programmes, we take particular care to ensure an equitable and just distribution of the fruits of Algeria’s economic growth through a policy of national solidarity that targets the needs of the weakest and poorest. The creation of jobs and a reduction in the level of unemployment play a central role within this context. In recent times, a number of public investment programmes have facilitated the entrance of young, first-time applicants to the marketplace and provides assistance for the creation of micro-companies. The fight against unemployment, especially among our young people, will be continued with determination. Meanwhile, the government will pursue its programmes to help safeguard and strengthen the gains citizens have made, whether through subsidies and price support for commercial products or services, or through poverty alleviation measures.

Today’s globalised business world is marked by high levels of competition and Algeria has the capacity to become a competitive player. In order to achieve this, we must engage all economic players in our country and construct a structured and durable economy that can drive commerce with the rest of the world. Thanks to the significant sacrifices our country has had to make in the past, today’s Algeria, as well as its institutions, is strong and stable. To keep it that way we need to redouble our efforts and assure our citizens of an efficient and transparent administration based on modern standards of public service with minimum bureaucratic disruptions. Thus, I call on all public institutions, in particular the government, to be at the disposal of our society and to develop appropriate channels for dialogue and consultation. Our ambitions may be big, but they are in direct proportion to the stature of our country as well as the aspirations of its children.