OBG talks to Mohamed Seghir Babes, President, National Economic and Social Council (CNES)

Interview: Mohamed Seghir Babes

How can a better focus on training reduce activities in the informal sector?

MOHAMED SEGHIR BABES: The informal economy occupies a prominent position in various markets, and its impact is widely seen. Far from being constructive, it is leading to the development of illegal, unhealthy and unproductive practices. Training and target-oriented actions will help people previously employed in the informal sector by encouraging them to fit within the official framework. Naturally, this is already being done through vocational training as well as on-the-job training and work-study programmes. A decline in unemployment will come about in part due to the recognition of continuous training as a key element of the employment contract, i.e. creating a real obligation to train people, and by acknowledging the absolute priority to focus on people with a low level of qualification. Nevertheless, this requires greater transparency in training procedures.

What has been the impact of the various initiatives targeting youth unemployment?

BABES: Several measures and frameworks have been initiated to encourage personal initiative. Agencies created for this purpose aim to assist our youth. Aid is also granted to young developers in the form of subsidised investment loans for sectors such as agriculture, fisheries, construction and the processing industry. However, these projects’ impact on youth unemployment, particularly recent graduates, remains limited. This is largely due to the fact that they are perceived as a way to reap benefits, rather than as a driver fostering entrepreneurial spirit. Deficiencies must be addressed through synergy between different businesses for future entrepreneurs to benefit from expertise, engineering and modern management and marketing techniques.

What efforts need to be undertaken to reduce inflation and preserve purchasing powers?

BABES: It is true that in the last months of 2012 we observed a spike in inflation, eroding the purchasing power of Algerian households. Large increases in public expenditures and imports in recent years have exacerbated this issue. In addition, the effects of currency depreciation on the Algerian dinar compared to the euro or US dollar and a strong informal sphere, which has had negative knock-on effects on speculative markets, are obvious. Efforts will include a readjustment of subsidies granted to households. In the same way, policies must aim to boost saving by increasing the remuneration of deposits – at rates higher than inflation – while facilitating proven investment opportunities.

How has the process of decentralisation impacted local development?

BABES: An interactive method was used by the CNES in its national debate on local development. The recommendations that arose from this discussion focus on institutional changes in the implementation of reforms directly affecting local communities. Cooperation between the state, provincial and municipal administrations must be based on criteria that take into account the organic and functional links between executives and elected officials at all levels. The gradual decentralisation of the decision process marks a milestone for the CNES, and it must enable economic actors to fully participate in the development of their territory. Decentralisation efforts must focus more on giving local communities the means to effectively carry out their responsibilities.

In what way does civil society promote socioeconomic development?

BABES: The relationship between civil society and sustainable socio-economic development entails the responsible participation of civil society actors in socioeconomic processes and the public policies governing their future. In order for this relationship to take shape, it must be linked to consultation platforms and concerted action. We must reveal common interests to provide a catalyst for public action in different areas.