Algerian government reassures people on financial stability
2008-10-10
Algerian officials say the country will not be affected by the global economic crisis due to their financial strategy, but experts fear negative effects.
By Nazim Fethi and Achira Mammeri for Magharebia in Algiers – 10/10/08
 [Getty Images] The global financial crisis will not affect Algeria, government officials say. |
The Algerian government has taken pains to assure the public that the world's current economic crisis will not hit the country because officials have an effective financial strategy in place, but economic experts remain sceptical.
Prime Minister Ahmed Ouyahia emphasised the issue during a cabinet meeting on Tuesday (October 7th).
"The Algerian economic and financial system is sheltered... from the financial crisis," Ouyahia said, "because our system has not evolved and our stock market is not fully integrated into the world financial markets."
Calling the Algerian economy "a little behind", Ouyahia explained that its relationship with the world economy is based primarily on the export of hydrocarbons. However, he did not dismiss the possibility that Algeria may be affected by this crisis in the future.
Governor of the Banque d’Algérie, Mohamed Laksaci, spoke to parliament this week and reassured them on the same issue.
"Although the Algerian economy is having to face certain external impacts inherent in the international financial crisis," Laksaci said, "Algeria's early payment of its external debts has spared the country." This means Algeria did not face increased interest rates or a liquidity crisis.
According to Laksaci, unpublished analysis by the World Bank estimates that countries in the Maghreb have not seen inflation run as high as in other countries.
Three causes could lead the crisis to hit Algeria, Laksaci said: falling returns on Algeria's investments in the case of a recession, a reduction of worldwide market rates and a possible downturn in the oil market.
Finance Minister Karim Djoudi and Energy Minister Chakib Khelil made similar promises to Algerians last Saturday, claiming the global crisis will have no effect on the country's economy.
"I don’t think a country like Algeria, with a foreign currency reserve of more than 130 billion dollars, will be affected by this crisis," Khelil said Saturday.
Because of the government’s financial strategy, Djoudi said, "we have protection in place."
Nevertheless, Algerian financial experts warned of a possible sudden impact on the economy.
"The fact that we do not have a modern financial market with a developed share market, and we do not have a developed, modern banking system which is perfectly integrated into the world economy, is no reason to celebrate," said Lachemi Siagh, an international finance expert.
"The crisis will generate a general slow-down in the world’s economy and a resulting fall in demand for energy and therefore in prices."
Siagh said that if the crisis is poorly handled, oil prices could drop below $50 a barrel, which in turn would cause a reduction in investment programmes in every field.
"We must therefore think seriously about this crisis," Siagh said, "and work out some strategies even if we are not directly affected… if the plane crashes, everyone dies."
Former Finance Minister and economist Mourad Benachenhou rejected the idea that Algeria is safe from the crisis.
"The financial cataclysm is in fact only just beginning," he said. "No one can predict how the crisis will develop."
Benachenhou said that more than 80% of Algeria's imports come from countries that trade in currencies other than the American dollar, and as the dollar continues to lose value, Algeria is going to feel the effect on its economy.
"I'm not sure that Algeria is protected against the disastrous effects of this crisis," said 25-year-old Souhil. He thought Algerian economy will eventually feel the impact.
Karima, in her thirties, also believes the financial crisis will come to Algeria sooner or later. "Algeria is not on another planet," she said. "Algerian authorities must work out a solution to minimise the damage."
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Linda Chergui Posted 2008-10-10
In an interview conducted a few days ago for the newspaper “Quotidien d’Oran”, the former Finance Minister, Mr Abdelatif Benachenhou flew in the face of this assertion, demonstrating with simple logic how our country managed a loss of $45 billion US in the United States with a growth rate of 2%. This negative rate cannot even compensate for the United State’s inflation rate, estimated at 4%. According to Mr Benachenhou, in five years, when this $45 billion will have matured, it will be worth no more than $40 billion. Our Arab “brothers” from Saudi Arabia and Qatar are the one who so strongly advised Belkhadem to place this money in Lehman Brothers investment bank, which just declared bankruptcy because it did not repay its creditors, who are for the most part Arabs. Exactly how big is Algeria’s loss? The Head of State and the Finance Minister have provided us with rather unconvincing explanations. Yet, our country is not lacking in Algerian experts who are capable of providing it with advice that is, moreover, more beneficial and sound. But, the Algerian government prefers to continue trusting foreigners. What a shame!
ahmed /batna Posted 2008-10-10
Hello dear Magharebia staff members, Algeria does not have an economy; rather it is managing a “broken” oil-rents system. In the image of a woman of poor morals, it sells off its finite natural resource to guarantee its rents for the day. Therefore, Algeria is truly immune to economic crises, as it does not have an economy itself.
رشيد Posted 2008-10-11
Firstly, reassurances of the government don’t concern in any way the oppressed citizens who represent 95% of the state. They concern the individuals who have thousands of billions of dinars or in foreign currency. Algeria will ultimately be affected by that crisis. But even if it doesn’t feel its impact, it will declare that it is affected for no other reason but because they (rulers) haven’t found this time the cause, which is most of the times reasonable, to take and steal money reaped from underground resources including oil. They argue initially that there debts, then they say that there is chaos and terrorism. Today, something else has come to help them to take them. It is the world financial crisis. SO congratulations in advance to them to our rulers for the billions in which the people have no share.
thecar1 Posted 2008-10-13
If you have nothing to lose, take a deep sleep.
عزالدين Posted 2008-10-14
All the acts of the Algerian government are of no interest to the citizen in any way. This country doesn’t have an economy to fear that it will collapse. There is just a group in this country that controls and manages the economy as they wish. They use it as they want to make more profits. To sum up, this group has found a new reason to deal illegally. It is the world financial crisis after the crisis of terrorism. In this way, plundering will continue.
Mohamed al saud Posted 2008-11-04
Who cares if algeria is lousing money in foreign countrys, the money isnt going to be invested in algerias good being its going to be stolen by the members of the government so u should be cearing that the government stops stealing and start cearing that the government invests in somthing that will bring income to the country because after the gas and oil is gone their will be no more money and the country will not modernize and stay the same as it has for te past decaids.But algerians will always stay ignorant unlike other countrys such as DUBAI BAHRAIN...PLEASE DONT BE A SHAME TO THE ARAB CLTURE AND DO SOMTHING CUZ AM STARTING TO THINK U GUYS SHOULD HAVE STAYD COLONIZED BY THE FRENCH AND ATLEAST YOU WOULDNT HAVE STAYD AS A THIRD WORLD COUNTRY AS U SEEM TO BE WHEN UR VISITED....
Benyoucef Posted 2009-03-14
the algerian economy will be moor healthy if the investers,big campanys,and athers to keep there funds in sid banks for the benifits of the peopels and the inssurance of colapce biy the way i'm not going to vote for Botaflika inlesse he promess to fighte and eliminate the (rachoi)this probleme is very serieuse block all the ways for the contry and peopels to move forwards causes krimes poverety and deaths thank you
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