Advice For Algeria: Go Back to the Drawing Board

Algerians feeling left out of economic boom clash with police over housing policies

When Money Alone is not Enough and Sound Policies Matter: In preparing for an issue of special report for The North Africa Journal, we spent a great deal of time checking what North Africa is doing in building up its infrastructure to prepare for a 21st century economy. We were rather astonished at the numbers we tallied as to the amounts each country is spending on building up. Algeria is no exception.

In fact, the money that country has amassed over the past few years is fueling an economic activity unparalleled to what we know of, and Algeria may be a leading spender on such infrastructure build up in the region. Billions of dollars in roads and highways, billions more in rail, ports, constructions and the numbers begin to exceed the types of figures we are used to.

In this context, one can only assume a trickling down of these investments into job creations and growing opportunities for all. After all, isn’t economic progress meant to create a healthier and wealthier middle class and eliminate poverty, violence and unrest?

That’s in theory. In practice, the ongoing clashes between groups of youth and security forces in some poor neighborhoods of the capital Algiers are a stark reminder that having billions in the bank and pouring it into projects here and there is no guarantee of social peace and stability. So the question is why after all these macroeconomic gains so praised by the IMF, many Algerians feel left out? The answer may be complex, but can be boiled down into a simple fact: benefiting from an oil boom and hydrocarbon exports without an intelligent economic and industrial policy leads to nowhere. It means that Algeria’s regulatory reforms meant to stimulate activity have failed, period. The country continuous to drop in the global ranking of countries in terms of conducting business there. The environment in which businesses and entrepreneurs that create jobs and wealth has deteriorated. Most indicators measuring a country’s business environment have worsened. From the time it takes to open a business to the time it takes to close it, and everything else in between. In these conditions, it is no surprise that building homes, the very reason why people are clashing in Algeria, face enormous challenges. It is no surprise, as we found in our infrastructure report that virtually all projects in Algeria face substantial delays. Bureaucracy is a killer of initiatives and needs to be tackled.

So what is the cure for Algeria then? Sadly, Algeria inherited an old colonial practice of bureaucracy and administration that are so broken and out of line with current global trends. Unless Algeria and its president take the political courage to completely overhaul the administration, and even destroy these outdated practices, the country will continue to swim in a substandard world.

While billions are being spent on improving critical areas of the national economy, bureaucracy, mediocrity and the administration itself are all playing an offsetting role, virtually nullifying and eliminating any gains made elsewhere. And that’s a shame. A recommendation for Algeria: go back to the drawing board.

This is an opinion piece and represents the views of its author. It may not represent those of the North Africa Journal analysts and contributors. The North Africa Journal encourages critical thinking and invites anyone with thoughts and opinion to submit their views. Let us know at daoud@north-africa.com. 

Arezki Daoud
daoud@north-africa.com