Djoudi: Algeria's economic reforms remain on the agenda

[Al-khiyal]

Algeria reforms likely to slow further in 2008

ALGIERS, January 15, 2008 (Reuters) - Algeria's sluggish economic reforms are likely to slow further in 2008 with the government steering clear of any move that could stir unrest and derail an expected bid by President Abdelaziz Bouteflika for a third term.

The north African country's first bank privatisation and the sale of a stake in state-owned Algérie Télécom could be among ventures quietly put on hold, analysts say.

"2008 will be a political year, not an economic year. No major economic decisions are expected as Algeria will focus on presidential elections," economic analyst Lyes Kahouadji said.

Economic specialist Slimane Hamiche at top-selling El Khabar newspaper told Reuters: "Unpopular decisions won't be taken in an electoral year. Public opinion as well as unions still perceive privatisations as a tool to sack workers."

A flurry of statements in December from groups linked to Bouteflika's National Liberation Front (FLN) party called on him to change the constitution to allow him to seek a fresh mandate when his second and final term expires in April 2009.

He has yet to confirm he will seek to stay on, but experts say it is likely. To win a constitutional referendum Bouteflika will need the support of the bulk of a 33 million population hit by deep unemployment, lack of housing and rising food prices.

In a country with a long tradition of rural-based rebellion that support cannot be taken for granted. Unemployment among those under 30 is 70 percent. A social malaise fed by post-traumatic stress caused by civil war in the 1990s pushes thousands of unemployed youths to migrate illegally every year.

"Fifteen months ahead of an election, speeding economic reforms could be a risk," Hamiche told Reuters, adding: "It's much easier and safer to take populist decisions such as raising wages and subsidising food."

He added: "As long as oil prices continue high, no major privatisations will be concluded. Algérie Télécom, CPA as well as other projects will continue to be on the waiting list."

A multi-billion dollar economic reconstruction push launched after the undeclared civil war in the 1990s will continue, providing new homes, highways, hospitals, schools and airports.

And the energy and mines ministry has just launched a long-awaited oil and gas exploration licensing round.

But analysts say the government, encouraged by windfall oil revenues, will be tempted to slow its flagging, 20-year-old effort to liberalise a Soviet-style command economy dominated outside the hydrocarbon sector by loss-making state banks.

The most visible effects could show up in privatisation.

The government postponed the sale of a stake in state-owned bank Credit Populaire d'Algérie (CPA) indefinitely last year, explaining the global credit crisis was having "unclarified" impact on a number of foreign banks seeking a stake.

Algeria originally short-listed six foreign banks for the contest - BNP Paribas, Societe Generale, Credit Agricole and Natexis of France, Citigroup of the United States and Spain's Banco Santander.

Officials say the sale will resume when the time is right, but Algerians suspect that may be a year or more away.

Algeria is also involved in another flagship privatisation, that of Algérie Télécom, the main fixed-line carrier, but has repeatedly delayed starting the process.

Among those said to be considering competing for a stake are Abu Dhabi-based Emirates Telecommunications Corp (Etisalat) and Kuwait Mobile Telecommunications Co.

Less visible, but as important, would be a slowing down of work on other goals - strengthening bank regulation, widening access to loans, bolstering judicial independence and modernising farming, a sector hurt by a 1970s experiment with collective ownership.

Experts don't expect much movement on some other targets either - improving management of water and a breaking of the industrial sector into more manageable units after a 1970s state-led foray into heavy industry produced loss-making giants.

State-dominated banks remain plagued by a legacy of Soviet-style economy management, red-tape, corruption, and a tradition of lending to loss-making state firms, analysts say.

The effort to carve out a greater role for private firms has never really recovered from the 1990s violence, which forced officials to focus on security at the expense of the economy.

The bloodshed also triggered a spate of land grabs that have worsened the already tight availability of commercial property.

Decade-old World Trade Organisation accession talks, a move experts say would need a big effort to boost bank transparency, are unlikely to advance, newspaper commentators have said.

Pascal Lamy, WTO Director-General, was quoted by Algerian newspapers in November as saying that accession was evidently not Algeria's "number one priority".

Former Prime Minister Mouloud Hamrouche, a possible challenger to Bouteflika in 2009, said in a recent speech that the push for constitutional change meant no major policy changes were likely.

"Those who want reforms don't have power, and those who have power don't want reforms," Hamrouche said.

[Al-khiyal]

Algeria reforms remain on agenda - Finance Minister

RIYADH, January 16, 2008 (Reuters) - Algeria wants to pursue delayed telecoms and bank privatisations but timing depends respectively on the domestic communications market and the international subprime crisis, Finance Minister Karim Djoudi said on Wednesday.

The north African country also seeks to advance financial reforms including strengthening links between public and private banks and partnerships involving the entry of foreign banks, Djoudi added in a Reuters interview.

Speaking during a visit to Saudi Arabia, he said Algeria planned to sell stakes in Algerie Telecom, the main landline operator, and Credit Populaire d'Algerie (CPA) despite repeated delays to both projects.

"The privatisation process of Algerie Telecom is still on the agenda ... Developments will be announced in due course," he said.

But he added: "The privatisation depends on the situation of the domestic telecoms market. It's important to take into consideration what the market is ready for at this stage."

On CPA, which would be Algeria's first bank privatisation, he said: "CPA's privatisation process is launched, all the preliminary requirements have been achieved. We only needed to select a partner, but the subprime crisis happened.

"We have to wait and see the true repercussions of this crisis on these major banks' balance sheets and investment strategies. Their investment strategies might need to be reassessed because of the crisis."

The government postponed the sale of a stake in CPA indefinitely last year, explaining the subprime lending crisis was having "unclarified" impact on a number of foreign banks seeking a stake.

Algeria originally short-listed six foreign banks for the contest - BNP Paribas, Societe Generale, Credit Agricole and Natexis of France, Citigroup of the United States and Spain's Banco Santander.

"We want this privatisation to help strengthen the financial market," he said.

Among those said to be considering competing for a stake in Algerie Telecom are Abu Dhabi-based Emirates Telecommunications Corp (Etisalat) and Kuwait Mobile Telecommunications Co. (Zain).

Commentators in Algeria have said economic reform is likely to take a back seat in 2008 with the government steering clear of any move that could stir unrest and derail an expected bid by President Abdelaziz Bouteflika for a third term.

Public opinion as well as labour unions perceive privatizations as a tool to sack workers, analysts say.

Djoudi said reform would continue.

"We will develop synergies between public and private banks and partnerships to pave the way for the entry of foreign banks," he said.

During Djoudi's visit, Algeria and Saudi Arabia agreed to set up a joint investment company with a capital of $100 million to mainly attract Saudi investments to the north African country, mainly in petrochemicals, he said.

[Al-khiyal]

Karim Djoudi refuse d’annoncer un calendrier pour la privatisation d’Algérie Télécom et du CPA

Jeudi 17 Janvier 2008 -- Près deux mois après la décision de suspendre la privatisation du Crédit Populaire d’Algérie (CPA), le gouvernement algérien tente de rassurer les investisseurs étrangers sur la poursuite du processus de privatisation des entreprises publiques. En visite en Arabie Saoudite, le ministre des Finances, Karim Djoudi, a évoqué les deux dossiers sur lesquels le gouvernement est particulièrement attendu : l’ouverture du capital d’Algérie Télécom et la reprise de la privatisation du CPA, suspendue le 23 novembre 2007 officiellement à cause de la crise des « subprimes » aux États-Unis.

Dans un entretien à l’agence d’information Reuters, Karim Djoudi a indiqué que l’Algérie souhaitait poursuivre le processus de privatisation dans ces deux secteurs stratégiques. Mais le lancement des opérations de mise en vente d’Algérie Télécom et du CPA dépendra de l’évolution du marché des télécommunications en Algérie et de la durée de la crise des « subprimes » qui secoue les banques internationales.

« Le processus de privatisation d’Algérie Télécom est toujours à l'ordre du jour... des annonces seront faites en temps utile », a souligne M. Djoudi. Mais a-t-il précisé : «la privatisation dépend de la situation du marché domestique des télécoms. Il est important de prendre en compte la situation du marché et à quoi il est prêt». Après Hamid Temmar, c’est le deuxième ministre du gouvernement qui contredit Boudjemaa Haichour sur le dossier de privatisation d’Algérie Télécom. Le ministre des télécommunications avaient en effet indiqué récemment que la privatisation d’Algérie Télécom serait lancé avant la fin du premier trimestre de l’année 2008.

Dans le domaine bancaire, l’Algérie cherche aussi, selon M. Djoudi, à accélérer les réformes financières via un renforcement des alliances entre banques publiques et privées et des partenariats avec des banques étrangères.

[Al-khiyal]

Algeria vows to press on with banking reform despite blow

February 1, 2008 -- Algeria insists it will move ahead with reforms to the financial sector in spite of the postponement of the first sale of a state bank, a key privatisation that would have gone some way to convincing doubters that the government was serious about change.

The government has gradually implemented changes to the banking sector. It has opened up to foreign groups, which make up all 17 of the private-sector banks, introduced modern payment systems and begun to restructure the six public sector banks, which account for about 90 per cent of the sector in terms of assets and loans.

But a critical step in the process was to be the sale of 51 per cent of Crédit Populaire d'Algérie. It would have been the first state bank to be privatised, delivering a message in a nation struggling to shake off its socialist past and convincing doubters that Algiers is serious about reform.

However, the subprime crisis and its impact on international groups forced the drawn-out sale, expected to raise about $1.5bn (€1bn, £754m), to be put on hold, government officials say.

In late November the government should have been receiving bids. But Citigroup, one of several foreign banks short-listed, declared it could no longer participate after the resignation of the group's CEO, Chuck Prince. Citigroup had viewed CPA, with 140 branches, as a "good fit" to expand into the retail market, says Kamel Driss, managing director at the US bank.

With Crédit Agricole of France requesting its presentation be delayed, and the earlier withdrawal of Banco Santander of Spain, the government was left with a shortlist of three French banks.

"With just three banks we felt the competition was false so we decided to postpone the privatisation," Fatiha Mentouri, minister for financial reform, told the Financial Times. "Those who were blaming us can now see that we were right after the situation with Société Générale."

SocGen, reeling from huge losses and alleged fraud from a rogue trader, was on the short-list.

Mrs Mentouri said the sale of CPA would resume "when we see things are clear and the uncertainty is removed", and insisted reforms would continue. The government was preparing to begin the process of selling a 30 per cent stake in the smallest state-owned bank, Banque Développement Local, which had specialised in financing smaller companies, she added.

With CPA, the government insisted bidders had a capital requirement of at least €3bn ($4.4bn, £2.2bn) and at least 400 branches in their home markets to restrict the offer to large institutions. However, with BDL it was seeking a regional group with experience of small and medium-sized enterprises, hence the decision to move forward on that sale, Mrs Mentouri said.

International groups still appear keen to enter a market that is hugely under-banked, with just one branch per 26,000 people and where debit cards and automatic teller machines are only beginning to appear.

Bankers say significant potential exists in the hydrocarbons-rich nation, which has reduced its debt and built up foreign reserves of $110bn, even if the nonhydrocarbons economy and private sector are severely underdeveloped.

"There are scores [of groups] which are applying because they see very large potential in a country where you have the economic fundamentals," says Lachemi Siagh, managing director at Strategica. "In 2010 we project foreign exchange reserves at $150bn, while foreign debt is less than 5 per cent of GDP."

Last May, Deutsche Bank acquired a 51 per cent in Strategica, an Algerian investment house. The group is applying for a licence and will have the option for the remaining 49 per cent.

HSBC hopes to open its first branch in May to target large international and domestic corporates. The group has agreed a partnership with Banque Extérieure d'Algérie, the largest state bank, which services the accounts of Sonatrach, the state oil company. BEA will be the key financier of the government's multibillion dollar plans to develop petrochemicals and other downstream industries.

The agreement gives HSBC the right of first refusal to provide management and advisory services to the project financing, giving it access to the hydrocarbons sector.

SocGen and BNP Paribas are already active in the retail market. But complaints persist about the general pace of reform.

"You have those who are conservative and whatever change you bring they consider it very fast and fraught with risks," says Mr Siagh. But for those who "wanted to see things happen very quickly to bring the country up to what is happening elsewhere, for them the change is very slow".

[Al-khiyal]

Karim Djoudi interrogé sur les sujets de l'heure :
Le ministre des finances en exclusivité au Quotidien d’Oran

[Al-khiyal]

Réformes financières en Algérie :
Les bons points de la Banque mondiale

Samedi 23 février 2008 -- Les réformes financières engagées par notre pays commencent à porter leurs fruits. L’institution de Bretton Woods (Banque mondiale) est allée dans ce sens, confirmant également les propos du président de l’Association des banques et établissements financiers (ABEF), M. Mohamed Djellab, qui a estimé que «l’Algérie est conforme aux normes internationales en ce qui concerne la mise en œuvre d’un cadre légal dans ce domaine».

«Tous les pays de la région, y compris l’Algérie, ont beaucoup avancé dans cette réforme», a déclaré Mme Zoubida Allaoua, représentante de la BM, à nos confrères de l’APS, jeudi en marge des travaux d’une conférence euro-méditerranéenne sur la transition économique qui s’est tenue à Bruxelles et à laquelle était convié aussi le président de l’ABEF. Il faut dire que les réformes entamées par notre pays ont touché à une partie importante du système financier. Selon M. Djellab, les réformes ont touché à la diversification et à l’élargissement de la place bancaire (de cinq banques publiques à 30 établissements bancaires et financiers publics et privés actuellement), au développement du réseau des agences (de 1 200, il y a 2 ans, à 1 400 aujourd’hui), ainsi qu’à la mise en œuvre d’instruments de financement de l’économie (leasing, factoring, capital investissement et crédits hypothécaires).

Par ailleurs, M. Djellab a souligné que l’Algérie continue de persévérer en renforçant les moyens humains et matériels et en améliorant davantage l’environnement lié au système bancaire et financier. «Tous les pays de la région se sont engagés dans des réformes de leur secteur financier et de leur climat des affaires afin de créer les conditions d’une croissance soutenue et durable, bénéficiant à une plus large frange de la société», dixit Mme Zoubida Allaoua.

Pour le système de paiement, la représentante de la BM a constaté que des progrès sont enregistrés en citant le cas de l’Algérie à travers le lancement réussi du système ARTS (Système de paiement de gros montants en temps réel) et le projet de la centrale des risques que la Banque d’Algérie envisage de mettre en place dans les mois à venir.Ce constat, selon la représentante de la BM, est la conclusion d’une évaluation de la BM qui passe en revue la mise en œuvre des réformes financières par ces pays à travers le Programme d’évaluation du secteur financier (FSAP) et d’enquêtes auprès d’entreprises sur le climat des affaires. L’évaluation faite par la Banque mondiale porte sur trois axes sous-tendant les réformes : le renforcement des structures et des institutions de régulation et de supervision du secteur financier, la mise en place d’une infrastructure pour un meilleur fonctionnement du marché et la participation du secteur privé financier. «Une grande partie des pays de cette région est bien avancée sur cette première génération des réformes», a-t-elle affirmé.

Cependant, la représentante de la BM estime que le défi actuel est «de développer les ressources humaines capables de gérer un secteur financier de plus en plus intégré au marché global et d’identifier les risques inhérents dans un système financier dominé par les banques privées qui, sous l’impulsion d’une compétitivité croissante, sont amenées à innover pour prendre des risques». A propos du secteur privé, elle a indiqué que des pays de la région ont opté pour un programme de privatisation de leurs banques et compagnies d’assurances, alors que d’autres ont privilégié l’installation de filiales de banques étrangères. Même si le constat est globalement positif, la Banque mondiale a constaté qu’il reste que l’accès des PME au financement (notamment bancaire) de leurs investissements demeure difficile.

Une délégation algérienne du secteur financier algérien a participé à la conférence euro-méditerranéenne qui a pris fin jeudi et à laquelle ont pris part de hauts responsables du secteur des finances des deux rives de la Méditerranée ainsi que des représentants des institutions financières internationales, des experts et des universitaires. Ces conférences annuelles sont une partie régulière du dialogue économique entre l’UE et ses partenaires méditerranéens afin de favoriser une meilleure compréhension des politiques et des questions liées au processus de transition économique dans les pays partenaires méditerranéens. La conférence de cette année est intervenue après celle des ministres des Affaires étrangères de la zone euro-méditerranéenne tenue en novembre 2007 à Lisbonne, durant laquelle les ministres ont renouvelé leur engagement à soutenir l’investissement, la création d’emplois et les réformes économiques et sociales, tout en se félicitant également des stratégies fondées sur une gamme plus large d’instruments financiers pour la promotion du secteur privé.