Algeria facing Sub Saharan Migration with Difficulty

And it needs a strategy adapted to the new realities

Algeria facing sub Saharan migration with difficulty is currently a very sensitive subject that divides the Algerians and in the opinion of the majority of the experts I consulted it is more complex than it appears. The migration issue would, to paraphrase the military language require having a strategic vision, taking account of the present world’s socio-political mutations. So it will be a matter of posing the real problems in order to perhaps get real solutions away from any demagoguery and one-upmanship. If the security aspect has to be looked at, so be it but as guarantor of national security.

We are in the era of globalization where migration flows are a reality.   Transhumance as it were migration are fundamentally for the same causes of rapid urbanization and metropolization of the world, over-population pressures, sporadic unemployment, rapid spread of news and literally transnationalization of migratory networks.

The categories of migrants and countries have become more complex, the globalisation of migration with a regionalisation of migratory flows. Globally, migrations are organized geographically where complementarities are built between start and host areas. These correspond to geographical proximity, historical, linguistic and cultural ties to transnational networks built by migrants and smugglers that form a formal or informal traffic, with space or no institutional facilities of passage.

Migration has more than tripled since the middle of 1970s: 77 million in 1975, 120 million in 1999, 150 million in the early 2000s, nearly 300 million in 2017. In 2016, immigration from the Africa of 1.2 billion people exceeded the Syrian, Iraqi, and Afghan arrivals in Europe. What will it be when that continent will accommodate 2.5 billion people, or a quarter of the world’s population in 2050?

According to an article by Le Monde of January 6, 2017 citing Frontex, the European Border and Coast Guard Agency, 93% of those who landed in Italy, came from that continent. This agency estimated that “this reflects the growing migratory pressure on the African continent, and particularly in Western Africa that is responsible for the bulk of the growth in arrivals by this route in 2016”.

African immigration is mixed, consisting of eligible refugees in Asylum Law (Eritreans, Sudanese, Ethiopians), but also economic, particularly from the West African migrants. The main communities arriving in Italy, the Nigerians constituted 21% of the entrants, followed by Eritreans (11.7%), Guineans (7.2%) and the Ivoirians (6.7%). This reflected the factors of mobility for different reasons: discrepancies between the levels of human development, political and environmental crises producing refugees and displaced, decreasing costs of transport, generalization of passports issuance, role of the media, rising consciousness that change to life by international migration is feasible.

Global warming that is already affecting Africa is anticipated to hit it harder by 2025/2030/2040, thus will most certainly accentuate this exodus.

 The reasons are multiple and could be that : a prevailing hopelessness in all those poor countries that are badly governed. It is up to the leaders of the South to take their responsibility instead of always taking advantage of the exceptional wealth of resources of this continent whilst encouraging corruption and enabling purchases of luxury assets deposited in tax havens.

If there is a corrupted, then there must be a corruptor. A recent report by the United Nations shows illegal capital transfers from Africa to the rest of the world between 1980 and 2010 exceeded the current gross domestic product of Africa and all related cumulated aid.  The Valletta summit in November 2015 that brought European and African leaders together was devoted to this topic, but the measures announced are not considered sufficient despite the €1.8 billion cheque signed by the European Union to these countries.

Lack of good governance and total absence of a real fight against corruption, hence demonstrating a certain lack of morality, the African leaders, would go as far as instead of avoid these fratricidal wars for either seizing power or any other objective not always honourable.  The majority of them leaders were unable to lay real development programs, not to mention having a very contemptuous attitude for their elite pushing its members to a certain brain drain, unlike their speeches that under a false guise of “nationalism” that does not carry anymore.

These factors highlight the bipolarization between three worlds that of the wealthy, the emerging and the poor countries that push their people of the latter to a certain and continuous exodus as we can daily witness from this tragic collective suicide of thousands trying desperately to cross seas and land borders for a better and / or safe life. Leaders of the North and equally of the South are largely responsible for this state of affairs.

Faced with this situation, the Algerian leaders must have a different vision because Algeria is no longer considered a transit or passage only, but a country where Africans and others settle permanently.

The agreement between the EU and Turkey, signed in March 2016 and by which Ankara agrees against finance to control the passing emigration to Europe through its territory, is an explanation to what many Africans decide to settle permanently in the neighbouring countries including Algeria.

Today Africans from south of the Sahara represent barely 10% of migrants in the world, and most of these ‘displaced’ just moved into a neighbouring country of their own. According to the IOM, in 2015, I quote from the report: “on the 32 million who took to the road, half of them have asked their bag on their continent.

A new situation is before us and it is that of the African migrants who did not come of their own accord but have fled misery and war, no longer pass but settle permanently at the level of the regions of the Maghreb including Algeria as per international agreements.

This new situation therefore calls for new solutions; certainly not from a vision of xenophobic, racist, or from a behaviour alien to the nature of the Algerian population. It comes from adapting the Algerian legislation, but especially to coordinate all actions with Europe, with neighbouring countries, with all concerned African leaders with any involved repatriation, without devaluing the human person.  Also there is need to establish some of residence and transitional system of identification for a chosen emigration depending on the particular needs of Algeria in agriculture, tourism, building and infrastructure development, etc. all whilst avoiding any demeaning assistance.

The position of Algeria since independence has been a consistent one towards Africa, its natural economic space.  It would be a trial of intention to, as we currently see it through the majority of the international media to misrepresent it as efforts against these migratory flows.  These must be pooled, Algeria being unable to endure the financial weight to it, on its own.

As such I would think that the words of the Chief Clerk of the Presidency, speaking as a supporter as a Secretary General. of a leading party can only be as or poorly formulated and therefore have been widely misinterpreted. It simply belongs to the Algerian leaders to speak with one voice so as to avoid misinterpretation. 

In short, immigration raises the issue of global security that would require quick involvement with an overhaul of international relations based on win/win partnership but also and especially a renewed governance of each and every African country.  Africa is endowed with a high and rich potential but is presently enduring growing hardship with no end in sight.  For as far as Algeria is concerned, his Excellency Mr. the President of the Republic has always paid a particular attention as demonstrated with the NEPAD initiative. 

 ademmebtoul@gmail.com 

 

The Industry of the Future & the Future of the Industry

Believe in the industry of the Future and the Future of the Industry Is a Report to the French Government on the impact of the Fourth World Economic Revolution and is believed to be as relevant to the new Algerian growth model as global geostrategic challenges of 2030 as it is to that of France itself. 

Hoping for a concrete application and meaning for the well-being of Algeria, I have with few experts worked free of charge, on what I was and still am advocating the reasonable solution of deep reforms, as always taking into account the social reality.

Several international media have recently asked me about Algeria and its economic choices that affect its future sustainable growth, taking account all of the geostrategic changes that lie ahead between 2020 and 2030. My reply was that I have discussed the very topic between 2010 and 2016.  Would these be applied by the new Government, I wondered ?

So, instead of indulging in the installation of yet again other commissions or to rush to other expensive consultancies, I would with all due respect recommend to the Government to study so as avoid the mistakes of the past and in order to adapt it to the country’s reality the important and useful white paper titled “Believe in the industry of the future and the future of the industry”; a report addressed to the French Government (2017) in 84 pages based on a survey of French industry leaders.  It is as a matter of fact, the backbone of the economic program of the French president Emmanuel Macron (1).

This report first recalls that industrial history would without doubt that the formalization of the concept of industry of the future was born in Germany under the heading “industry 4.0”as of a will to drive upmarket the German machine tool industry in the face of competition from Asia. But with the gradual rise in power of the processing of industrial data and acceleration of innovations, the concept took a whole other dimension.

Meanwhile, the avalanche of new technologies that occurred in recent years has indeed an important potential for transformation and improvement of the performance of the industry which could make the assumption of re-industrialization of our country credible again.

The goal is to customize mass production that has not yet been reached, the ecosystems that will be the first to provide a “digital continuity” will also be those that help get production that much closer to the final customer.

The report is structured as follows:

Part I – Industry of the future: framing, context and issues

1. Framing and context
2. What economic issues?

Part II – The five challenges of the industry of the future:

1. How to think the transition?
2. L’ industry of the future must be thought of in terms of performance, not technology.
3. Do not underestimate the emergency, nor the competitive pressure
4. Make transformation a matter of skills and organization
5. Adopt a broader vision of the value chain
6. Place the internal operational model and the ecosystem management at the heart of transformation plans.

Part III – different degrees of mature businesses: an industry of the future with variable geometry

1. Introduction and definition of the criteria taken into account
2. Variable maturities
3. Putting into perspective of the model

Part IV – threat or opportunity of an industry of the future

1. What are the prospects for French industry?
2. The French specificities
3. What decisions are at stake? –

Conclusion

1. Business leaders
2. Public leaders
3. A shared vision?
4. Survey methodology and assumptions of the model.

It must be said that the majority of the experts including those of the Economic and Social Council of Algeria use to always say the opposite of what is proposed today by the Government. How then can they be now that credible?

In several of my contributions from several years ago, I drew the attention of the Government that hydrocarbons price will be low and for a long-time; refer my conference before the Prime Minister and the members of the Club of the Pines of Algiers on November 4, 2014 and before the senior executives of the National Security Department on May 15, 2015

I elaborated on the policy of widespread subsidies that together with current industrial policy could lead Algeria right against a brick wall.  Short of ideas, the country must avoid living on the illusion and outdated patterns of development, such as conventional mechanical industries of which car assembly of very low capacity, highly capital-intensive with Algeria taking on all costs with the rule of 49 / 51% is at the forefront.

Without a serious shift in economic policy, based on good governance and the development of knowledge, Algeria may end up deadlocked by 2018/2020 with the risk of depletion of its foreign exchange reserves when foreign operators, not getting remunerated, may decide to leave it altogether.

As far as the “emergence of an economy” and a globalized product of development of today’s capitalism is concerned, the process is not yet complete, and since the end of the Cold War and the disintegration of the Soviet Union, questioning on the one hand of the ability of nation States to do in the face of these changes.

This is no longer the time where the wealth of a Nation identified with its major firms, large firms having been modelled on military organization and have been described with the same terms: chain of command, job classification, scope of control with their leaders, operating procedures and standard guidelines.

All jobs were defined in advance by rules and pre-established responsibilities. As in the military hierarchy charts determined internal hierarchies and great importance was attached to the permanence of control, discipline and obedience. This rigour was necessary in order to implement plans with accuracy to benefit from economies of scale in mass production and to ensure a strict control of prices in the market.

As in the operation of the army, strategic planning required a decision on where you want to go, followed up by a plan to mobilize the resources and troops to get there. In the totally outdated mechanical era, the production was guided by predetermined objectives and sales by pre-determined quotas. The innovations were not introduced by small progress, but by technological leaps due to the rigidity of the organization.

At the top, large bureaucracies occupied the rectangle of the chart, halfway up middle managers and right at the bottom the workers. Education, from elementary to upper education through high school, was only a reflection of this process, orders being transmitted by the hierarchy, the schools and universities in large sizes to ensure economies of scale as well.

These analyses have also been widely developed between 2012 and 2017 in the Algerian press and internationally under the titles as shown below.

• How to improve the Climate of Business in Algeria
• Knowledge and Technology Transfer
• Impact of non-conventional Finance in Algeria
• The Council of Ministers, met on Wednesday in Algiers
• The challenges for the new Government of Algeria
• Impact of non-conventional Finance in Algeria
• The Reasons for the Slippage of the Algerian Dinar 
• Status-Quo or Reform from June 2017 to April 2019 in Algeria
•  Knowledge and Technology Transfer
• Automotive Industry in North Africa or Assembly Plants
• Algeria, a major player for the stability of the Euro-Mediterranean 
• Quotidien international français La Tribune.Fr « Comment développer la coopération entre l’Algérie et la France du président Macron? » 11/05/2017
• Dr Mebtoul talks to American Herald Tribune
• Legislative Elections of May 4, 2017 in Algeria
• Algeria to prepare for Energy Transition
• Entretien avec le professeur Abderrahmane Mebtoul Finantial Afrik  Paris le 23 juin 2015 (in French)

A new organization is currently taking place showing the limits of the old organization with the emergence of new dynamic sectors in order to adapt to the new global configuration. We are seeing the successive passage of the so-called Taylorism organization marked by integration, the Divisional, matrix organization that are intermediary organizations and finally to the recent organization in networks where the firm focuses its strategic management on three segments: research and development (heart of value added), marketing and communication and under the Treaty all the other components.

And with more and more oligopolistic organizations of a few companies controlling the production, finance and marketing networks are no more national. Even those said small and medium-sized enterprises connected as networks of subcontractors to large ones could be among these.

Jobs in current production tend to disappear involving mobility of workers, the widespread use of temporary employment, and therefore a permanent flexibility of the labour market with the permanent recycling training called upon in the future.

Thus, other types of jobs appear including the breakthrough of producers of symbols whose conceptual value is higher than the added value from the classic economies of scale, questioning the ancient theories and economic policies inherited from the mechanical age era like the old political “industrialising industries” based on the model of the old Soviet Union while the 21st century is characterized by the dynamism of large firms but especially those linked in networks to them SMIs/SMEs all devoting a good portion of their budget to research and development.

With the predominance of services that have a more and more merchant character contributing to the increase in the added value, the firm turns into a global network, and it is impossible to distinguish between individuals affected by their activities that as a consequence would be a large, diffuse group, around the world. In this global village, there exist only consumers/producers cross networks.

This will have implications for the future organization at all political, economic and social systems levels.

Finally, this analysis raises the issue of national security. Since 2012, I did not do enough warning the Government on the inconsistency of its policy of subsidies, the inconsistency of its industrial policy and against a policy of hidden import of car assembly plants as well as other industrial segments living off a certain rentier situation.

Two lessons are to be learned.

• First, the money capital does not create wealth; it is only a means to an end. In fact it’s the work and intelligence that are the source of permanent and sustainable wealth of a Nation.
• Second, globalization is a reality and time is never caught back in economics. There is urgent need for a strategic vision as an adaptation to this unstable and turbulent world, a Nation that does not move forward, would necessarily step back.

I would not remind enough that the engine of any development process lies also in research and development, and that without the integration of the knowledge economy, no industrial and economic policy would have a future in the 21st century, where technological innovations would be inevitably have a constant changing feature.

Algeria would be best in investing in democratic institutions than in segments where it can temporarily have some comparative advantages: agriculture, tourism major deposit, new technologies and in sub segments of industrial sectors taking into account the profound technological changes. I would suggest a Monitoring Committee to coordinate the investment policy which must synchronize with the dialectical relationship between the complementary roles of the State and the market, put an end to the present distortions which may cause losses, due to lack of visibility and strategic coherence. ademmebtoul@gmail.com

(1) « Croire en l’Industrie du futur et au futur de l’industrie » as translated by “Believe in the industry of the future and the future of the industry” – white paper – report to the French Government – (2017) in 84 pages – A survey of french industry leaders with (1) to Ernst Young by Opinion Way between September and October 2016 directed by Alain Galloni and Olivier Lluansi associate, Ernst & Young Advisor (Paris 2017) . The same report in PDF format is at

http://www.ey.com/Publication/vwLUAssets/ey-resultats-enquete-industrie-du-futur/$FILE/ey-resultats-enquete-industrie-du-futur.pdf

Qatar crisis impacts on the rest of the MENA region

The “Qatar vs GCC + Egypt” crisis carries on at not only the expense of Qatar but to also all concerned such as Saudi Arabia, the UAE and Bahrain.  We elaborated on this last aspect in our Latest Diplomatic Crisis impacts Dubai City  where we anticipated significant losses for Dubai, Riyadh and Manama alike.  Life carrying on unabated, there must surely be drawbacks for everyone during and after this semi-political upheaval between the parties.  The Qatar crisis impacts on the rest of the MENA region have yet to be measured and accounted for. 

Following is a Chatham House conference of Qatar’ Foreign Affairs Minister’s response to the 13 points demand of Saudi Arabia and its allies.

The Crisis in the Gulf: Qatar Responds

The foreign minister of Qatar outlined his country’s position and response to the accusations made and diplomatic measures taken against Doha by a number of countries including Saudi Arabia and the UAE.

https://youtu.be/8ksR1C8B2HA

05 July 2017

HE Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani, Minister of Foreign Affairs, State of Qatar
Chair: Dr Robin Niblett CMG, Director, Chatham House

Overview

The foreign minister of Qatar outlined his country’s position and response to the accusations made and diplomatic measures taken against Doha by a number of countries including Saudi Arabia and the UAE.

More information at The Crisis in the Gulf: Qatar Responds

The Crisis in the Gulf: Qatar Responds The foreign minister of Qatar outlined his country’s position and response to the accusations made and diplomatic measures taken against Doha by a number of countries including Saudi Arabia and the UAE. Play 0:00 / 1:09:37 Fullscreen Mute Share 05 July 2017 HE Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani, Minister of Foreign Affairs, State of Qatar Chair: Dr Robin Niblett CMG, Director, Chatham House 01:09:37 Overview The foreign minister of Qatar outlined his country’s position and response to the accusations made and diplomatic measures taken against Doha by a number of countries including Saudi Arabia and the UAE. More information at The Crisis in the Gulf: Qatar Responds

Libya, a country that has known nothing but unrest

The MENA region is yet again under horrendous pressures not only within the usual northern part of the Middle East and lately in the Gulf area but still in that part of the North African desert. This story is about Libya, a country that has known nothing but unrest and upheaval since its forced change of regime in 2011. More recently a UN report informed that the UAE violated Libya’s arms embargo by secretly supplying the concerned in this article.  Would this have any bearing with the outcome as proposed in this article?

Would also this liberation mean reunification and a unique and central authority over the country? Only time can tell but one thing is sure in that all countries surrounding Libya would sight with relief if this is achieved.

Would this be accounted for in the Qatar blockade resolution? In any case, here is the BBC’s story.

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Libya eastern commander Haftar declares Benghazi ‘liberated’

From the section Africa

The image above is of  REUTERS — Benghazi saw fierce clashes between the LNA and Islamist militants this week

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The head of the self-styled Libyan National Army (LNA) has said his forces “liberated” the eastern Benghazi city after years of fighting with Islamists.

Field Marshal Khalifa Haftar said the city now enters a new era of “security, peace and reconciliation”.

If confirmed, victory would mark a major advance for the one-time commander in the army of late strongman Muammar Gaddafi.

The LNA is not recognised by Libya’s UN-backed government in Tripoli.

Libya’s unrest since the 2011 ousting of Gaddafi saw extremist organisations, including so-called Islamic State, gain a foothold in the country.

In a televised speech on Wednesday, Field Marshal Haftar said that “after a continuous struggle against terrorism and its agents that lasted more than three years… we announce to you the liberation of Benghazi”.

Image copyright REUTERS – – – – Khalifa Haftar has backing from some foreign powers

His announcement comes after bloody battles this week in Benghazi’s Sabri district in which dozens of LNA fighters and various local Islamist militants died.

Pictures posted on social media sites showed some civilians in Benghazi and other parts of the country celebrating the end of a bitter conflict that left large parts of the country’s second city in ruins and displaced thousands of people in recent years.

But Field Marshal Haftar also has many political and armed opponents in Libya. He does not recognise the government in Tripoli, and instead backs the authorities in the east. Opponents accuse the commander, who has backing from some foreign powers, of trying to impose autocratic rule in Libya.

Divided opinion – analysis by Rana Jawad, BBC North Africa correspondent

Benghazi’s conflict over the last three years at times appeared to have no end in sight, and – as it grew – so too did the Field Marshal Haftar’s political and military ambitions.

This is a significant gain for him, and a city that has been aching for respite from the war. Opinions over the conflict in Benghazi are largely divided; many will be celebrating what they see as a war brought to their doorstep by Islamist militias at a time when political actors in Libya barely acknowledged there was a problem there, despite the near daily bombings and killings in the city.

Others view it as a product of a man who was power-hungry and lumped up all of his enemies under the banner of “Islamist terrorists” to pave the way for a future political role through the might of the gun. His short address dedicated to the people of Libya had an unusually reconciliatory tone, but it is not one that will ease worries over what his, or his opponents’ next move might be.

In Libya today, a military victory in one battlefield often opens the door to conflict in others.

Read more :

• Libya’s military strongman Khalifa Haftar
• Why is Libya so lawless?

 

Qatar will not Negotiate with Arab States during Blockade

Qatar will not Negotiate with Arab States during Blockade unless they reverse their measures,” Qatar Foreign Affairs minister was reported as saying by the Saudi owned and Dubai based TV channel Al Arabiya on June 19, 2017.  This was presumably in response to the non-equivocal statement of the UAE’s minister of FA who confirmed that his country together with Saudi Arabia, Bahrain and Egypt are standing firm on their decision of 2 weeks ago to isolate Qatar from the rest of the GCC countries and that this isolation could last years.

Meanwhile, the Financial Times‘ Gideon Rachman warned its readership that the Qatar crisis could have global implications before adding that the Gulf States have been untouched by Middle Eastern turmoil but that is changing.  Elaborating further, the author sustains that for the past six years, there have been two Arab worlds.  “The world of violence and tragedy; and the world of glitz and globalisation.  Syria, Iraq, Libya and, to a lesser extent, Egypt — have been engulfed by conflict.  But Qatar, Abu Dhabi and Dubai have prospered as global hubs for travel, leisure, business and finance.”  And that “The booming Gulf metropolises seemed untouched by the violence in the rest of the Middle East.  They even profited indirectly, as safe havens in a region in turmoil.”

All that is fine or at least up until the author wonders whether the glitzy world of the Gulf could collapse in the same way it rapidly climbed to the shining lights of the world of fame and fortune.

In the meantime, there seems to be a wall as advanced by Gideon Rachman that is rammed down by this sudden irruption of the Qatar crisis of a blockade by its neighbours.

To well understand the underlying culture, it is worth remembering that since time immemorial, there has always been some sort of divide between the nomads and sedentarized populations of the Arab World.  It is no surprise that all Arab countries of today having recently gone through historical phases of Ottoman domination and rule, European domination and rule followed by independence through a well-publicized panarbism and self-rule via differing forms of governance.  Hence countries belonging to one or the other group have settled into on one hand monarchies, sultanates, emirates and on the other republics.  These latter are as well known to all in a very derelict situations but the other up until this Qatar crisis have with the advent of oil shone in their multi-faceted exploits of surging into the international limelight.  The latest exploit of individual countries are countless but most importantly is the Gulf wide exploit of the rail project development that should span traffic from Kuwait to Oman, along the western shore of the Arab-Persian Gulf.  This project as well as many others all in and / or around Qatar such as the Expo 2020 in Dubai as well as the Qatar 2022 World Cup will no doubt bear some consequences of this crisis.  Referring to the map of the Gulf above, could the proposed Alternative extension linking Qatar to the rest of the GCC pay the price of such regional skirmish.

The Council of Ministers, met on Wednesday in Algiers

The Council of Ministers, met on Wednesday in Algiers under the chairmanship of the President of the Republic, Abdelaziz Bouteflika.  It adopted an Action Plan for the newly appointed Government of Mr. Abdelmadjid Tebounne.

This Action Plan which will be submitted shortly before the National Assembly, is part of the continuation of the implementation of the programme of the President of the Republic, according to a statement of the Presidency of the Republic.

Image APS

Tebboune Government’s Guidelines from the President

The Government Action Plan as adopted by the Council of Ministers meeting on June 14, 2017, noting first that the oil price crisis has presumably settled in a long term, would require Algeria to face up to major demanding challenges that would include dynamization of reforms for implementing all socio-economic actions, along the lines that I summarise in seven key areas as follows.

1. The need to continue the implementation of the budgetary policy of the adopted last year’s rationalisation to redress public finances by 2019. 
2. So as to not impact public investment programs, promote non-conventional internal financing that could be mobilized for a financial transition of a few years. 
3. Avoid for as much as possible the recourse to external debt and contain further all imports volumes of goods and services for the purpose of preserving the reserves of foreign exchange. 
4. Continue the implementation of the new model of growth adopted in 2016 by the Council of Ministers, including its component of reforms so as to improve the investment environment, and the modernization of the tax system, public banks and financial market.
5. Enhance all the country’s riches and resources available, including conventional and non-conventional fossil and renewable energy. 
6. Work on social justice and national solidarity for a greater rationalization of a just social policy, including better targeting of subsidies. 
7. Adopt an effective communication policy towards public opinion, and carry on a continuous dialogue with all economic and social partners. 

In short, it will be for the Government to produce at a dated deadline, all reforms and necessary synchronization with all sectoral actions taking into account the unavoidable budget external and internal constraints as highlighted with force during this Council. ademmebtoul@gmail.com

 

Fast Going Encroachments on Egypt’s State Lands

Egypt’s 95% of populations live in the Nile delta and along its banks.  The most heavily populated country of the MENA region that is like all countries of the Middle East going through rapid urbanisation has an issue of settlement of its population’s habitable space and yet not compromises its vital agricultural lands. Despite the successive governments trying to encourage the move towards some greened lands of the surrounding desert but in vain; fast going encroachments on Egypt’s state lands spread in those relatively small but habitable lands.  Employment, higher standards of life, etc. were obviously difficult to get over, up until recently where the newly “voted in” president Al Sisi has embarked on a mission of clearing the rare and so-called State lands of its squatting occupants.

This article proposed here below of Al-Monitor written by Khalid Hassan, Contributor, Egypt Pulse is more than illustrative on the issue.

Egypt’s Sisi vows to recover state land from squatters

CAIRO — Egyptian President Abdel Fattah al-Sisi recently expressed his anger at the illegal acquisition of state lands and issued a strong warning to those encroaching upon these lands. “It is no longer acceptable for anyone in Egypt to encroach upon state lands. It is no longer acceptable for people to take lands that belong to the state,” he said in a May 14 speech delivered during his visit to Qena province to inaugurate a set of projects.

Sisi tasked the armed forces and the police with putting an end to the illegal seizure of state lands and fully reclaim all the usurped state territories by force by May 31. “We are all for new investment projects and for facilitating the work of investors. As a state, we are trying to organize the process so that it does not spin out of control. It is not acceptable and will never be acceptable for people to [illegally] acquire such lands.”

During a June 7 conference to reveal the results of the campaign to retrieve state lands, Prime Minister Sherif Ismail said the government, with the help of its executive agencies, had managed to reverse 69% of the infringement cases so far. He added that during the next phase, the governors will play a more active role and government efforts will continue, with the aim to protect state lands from encroachment and prevent any new violations, while continuing to remove any previous violations.

This was not the first time that Sisi sought to confront the illegal use of state lands across the republic. On Feb. 18, Sisi issued a presidential decree to form a committee tasked with retrieving seized public land in all possible legal ways as well as drafting reports on the factors that led to their seizure, in order to propose solutions aimed at preventing future cases.

Encroachments on state lands spread like wildfire in Egypt following the January 25 Revolution in 2011, as the government failed to fight the phenomenon amid a state of chaos and the breakdown of the state apparatus. Those involved include businessmen and farmers.

The committee — headed by the assistant to the president of the Republic for National and Strategic Projects, Ibrahim Mahlab — includes Minister of Local Development Ahmed Zaki Badr; representatives of the ministries of justice, defense and interior; and representatives of the General Intelligence, the Administrative Control and the Public Funds Investigation departments within the Ministry of Interior, the Notaries Union of Egypt and the Egyptian Survey Authority.

This committee, however, failed to achieve the objective for which it was established, as the government and the executive bodies were not so cooperative, Majdi Malak — member of the Committee on Agriculture in the House of Representatives — told Al-Monitor.

Malak added, “President Sisi ordered the armed forces and police to get rid of all kinds of encroachments on the state lands due to the committee’s failure to deal with the issue. There are thousands of acres of agricultural lands that have been seized for the establishment of resorts and luxury compounds. This led to the accumulation of irregularities and to the rise of a complicated process to reverse them.”

“After the Jan. 25, 2011, revolution and the ensuing chaos and insecurity that plagued the country, Egyptian governorates witnessed several encroachments on agricultural lands for construction purposes, as the state stood silent without taking a decisive position against the aggressors,” he said.

On April 30, an official report from the Ministry of Agriculture’s Central Committee for Land Protection pointed out that the violations of fertile agricultural land since the January 25 Revolution until April 23, 2017, amounted to 1,690,734 cases, covering an area estimated at ​​75,216 acres. The report pointed out that only 377,490 cases covering 21,204 acres have been reversed.

Meanwhile, one of the most recent scientific studies of the government’s National Authority for Remote Sensing and Space Sciences revealed June 1, 2015, through satellite images analyzed by its scientists, that the rate of urban encroachment on agricultural land has increased by 23% annually in recent years in several governorates, thus resulting in a shortage in agricultural lands.

Scientists in the said authority predicted that by 2050, Egypt will lose about 17% of the delta area as a result of indiscriminate urbanization.

On Dec. 19, 2013, Ayman Farid Abu Hadid, then-Minister of Agriculture, pointed out in television statements that the ​​agricultural areas in Egypt did not exceed 8.5 million acres, and he said that the surface is very small compared to the large population. He stressed that the area needed by Egypt to cover the needs of its population goes up to 18 million acres.

The Central Agency for Public Mobilization and Statistics said April 5 that Egypt’s population reached 92.75 million at home and 8 million people abroad. Thus, it added, Egypt has officially surpassed 100 million people, and the population growth rate reached 2.4%.

In a government effort to increase the ​​size of agricultural lands, Prime Minister Ismail’s government announced on Feb. 1, 2016, the start of the new Egyptian Countryside Development Company activities to reclaim 1.5 million acres with a capital of 8 billion Egyptian pounds ($441.9 million).

The spokesman for the Ministry of Agriculture, Hamed Abdel Dayem, told Al-Monitor that Sisi’s initiative to reclaim all the usurped state land significantly contributed to confronting the mafia looting state lands, and several provinces succeeded over the past few days in completely recovering agricultural land from looters.

Maj. Gen. Khaled Said, the governor of al-Sharqiya province, announced May 26 that 736 cases of infringement covering 48,112 acres in al-Sharqiya have been eliminated.

Meanwhile, Dakahlia Gov. Ahmed al-Sharaoui announced May 20 that the governorate got rid of 90% of the cases of infringement on state property.

“Agricultural land is a national security issue, and its protection is a national duty because constructions on agricultural lands threaten food insecurity, especially in light of Egypt’s food needs, dependence on imports and constantly increasing population,” Abdel Dayem said.

A study by the National Center for Agricultural Research, a government agency, revealed on July 18, 2016, that Egypt imported 65% of its food needs, including 9 million tons of wheat, 6 million tons of corn and 1 million tons of soybean.

“I expect the state to declare soon that it has reclaimed all of its territory, has reversed all of the related encroachments and will prevent any further infringements on its territory, especially after the adoption of a new agriculture law,” Abdel Dayem concluded.

The Egyptian parliament is currently discussing several bills to amend the current Agriculture Law and the provisions related to the penalties of building on agricultural land. Each bill includes different penalties for building on agricultural land ranging from fines of up to 5 million Egyptian pounds ($275,520) to up to five years’ imprisonment. The parliament is seeking to increase the penalty in order to deter violators. In addition, some of the bills call for the establishment of a new police under the Ministry of the Interior under the name of the Agricultural Land Protection Police, which has an internal building and is responsible for eliminating any encroachment on agricultural lands as soon as it occurs.

Under the current law, offenders face a penalty of imprisonment and a fine ranging from 10,000 to 50,000 Egyptian pounds ($551 to $2,755), depending on the number of irregularities. The parliament’s Constitutional and Legislative Affairs Committee is still discussing the draft laws for approval.

 

The challenges for the new Government of Algeria

TEBBOUNE faces a productive fabric weakness and foreign exchange reserves declining, dire imports restrictions, and exports awkward regulations.

The challenges for the new Government of Algeria will be such that it will probably be before budgetary tensions between 2017 and 2020 with the current outflow of hard currencies (goods and services – legal transfer of funds) of approximately $60 billion by end of 2017, and very limited revenues to account for.  Except for blind restrictions which are likely to lead to great social tensions by a push of the inflationary process, the amount of foreign exchange reserves only $109 billion in February 2017, whereas the importance of the renewed governance, shared sacrifice, and an urgent reorientation of the entire socio-economic policy adapting to the new global changes.

1 – On June 9^th, 2017 morning, the price of Brent is $47.65 and the WIT at $45.42.  Pondering in retrospect on the negative experience of the war economics of the years 1991/1993, leading the country right to the IMF, a discourse of truth is needed for as much as realism is concerned but away from bureaucratic injunctions of the past.

In 2017 rather than in the 1970s, the economic situation is made up of 83% of small business / enterprises, the industrial sector representing less than 5% of the Gross Domestic Product, (97% of small innovative SMI/SMEs); the informal sphere holding more than 50% of the economic life and 97% of Dollar revenues are directly and indirectly hydrocarbons related.  And above all, the lack of vision of adaptation is noticeable while the world is at the dawn of the fourth economic revolution of 2017/2030 with major geostrategic upheavals including Africa and the Middle East (1).

Taking data from the ‘Office National des Statistiques’ (ONS) for the first four months of 2017, imports of goods will roughly be about $46/47 billion.  According to data from the IMF for 2017 outflow of hard currencies on services would be of $10.5 billion, against $9.9 billion for 2016 and between $3.5 and 4 billion of legal transfers of capital (this amount is bound to increase with the rule of 49 / 51% according to the IMF to $7/8 billion by 2019/2020) and giving us single reference document at the level of the balance of payments, and not trade balance, an extrapolated outflow of about $60 billion.

However, currency entries would vary between $30/32 billion, if the average price of 2017 were between $50/52 a barrel.  Impact of the fall in the price of hydrocarbons, presumably being of long term, disturbing forecasts growth for Algeria by the IMF and the World Bank (WB) dated June 5^th, 2017 for the years 2017 and 2018, are below the rate of population growth.  This would bring the official unemployment of 11% in 2016 to more than 13% in 2018. So the WB brought back its growth projections for Algeria in 2017 to 1.8% against 2.9% as projected in its report last January and for 2018, real GDP growth is expected to be even lower at 1% down from 1.6% compared to the 2.6% as anticipated in January.

According to Jean François Dauphin, the head of mission of the IMF, Algeria has the capacity to diversify its economy through ambitious structural reforms that would allow it to move out of its dependence on hydrocarbons. And, one of the tasks facing the new Government Tebboune would be to put these reforms into the works, through a pedagogical format, requiring a return to confidence without which no development is possible, in the direction of the population on rail.

The most important, for the Government will be to cope with the economic and social situation which will have to face an exceptional crisis with the long-lasting low prices of hydrocarbons and deepen a comprehensive reform, reconcile economic efficiency and bring some necessary social cohesion to which I am deeply attached.  We can hypothesize that it is the State which is lagging behind society that produces rules that allow functioning.  An economic model that is not represented by political, economic and social forces would have no chance of being operationally carried through.

It will be to first identify the different stakeholders in the process of economic reforms, whether favourable or unfavourable, be they national or foreign. In a second step, it will be to proceed with the analysis of the strategies that they are implementing to support reforms, block them or, in default, slow them down, in assessing the means put at the service of these strategies.  This is a good chance for Algeria, where it will manage all structural reforms between 2017 and 2020 perhaps difficult in the short term but hopefully fruitful in the medium term by 2019/2020 .

Summarising, in 2017, a blind import restriction may paralyze the economic machine, 70% of the needs of public and private companies are indeed from overseas with a rate of integration exceeding not 15% and eventually lead to social tensions. There is above all a matter of lowering costs, especially in services, improve on management and fight off corruption so as not to penalize the disfavoured and by the same prevent a dumbing down of the middle classes.

I would recommend meditating the Venezuelan experience, one of the largest oil reserves in the world or the Romanian ex-Communist camp experience that with a zero foreign debt has left an economy in ruins. For my part, I am convinced that Algeria has significant potential to confront this multidimensional crisis which it is facing.  For this, there is an urgent need for a political will for change represented by social forces for the development of economic, social and political freedoms.

In the recent history of Algeria, the issue of reform – be it economic or political gave rise, because of the worth that they represent, to the development of conflicting strategies that work to the defence and promotion of these or, instead, their blocking and, failing that, to their perversion or their slowdown.

• – Conference of the Professor Abderrahmane Mebtoul at the invitation of the European Parliament (2013) -“the Maghreb the geostrategic challenges” – Dr. Camille Sari (2 volumes 1080 pages – edition L’Harmattan Paris 2015).
• – Conférence at the ‘Direction Générale Sûreté Nationale Ecole Supérieure de Police,’ Algiers may 2015 “Global changes, fall of the oil prices and its impact on macroeconomic and macro-sociaux balance.”
• – On the same theme, May 2016 at ‘l’Ecole Supérieure d’Administration de la 2^ème Région Militaire’ – Oran, Algeria.
• – interview on 28/12/2016 by American Herald Tribune: “Assessment of the Algerian economy its prospects: destabilisation of Algeria having geostrategic repercussions on African and Mediterranean space.”

Status-Quo or Reform from June 2017 to April 2019 in Algeria

What are the prospects for the newly appointed Government of Abdelmadjid TEBBOUNE?  Will we see the status-quo or reform from June 2017 to April 2019 in Algeria?  Or the latter being the country’s next presidential election, will we as stated in some international media, be focusing on the distribution of rent to temporarily appease the social front without strategic visions, Ministers confined in the management of the day-to-day business. 

Or, per the great wish of the majority of Algerians, the country whilst confronted to real issues, the resolution of which will involve profound political, economic and social adjustments. 

The new Government’s 12 Number challenges could perhaps be as follows.

1. The strategic objective whilst reflecting on the high rate (70%) of abstention and blank votes of the elections of May 04, 2017, is to put into place some political, social and economic intermediation in order to hopefully avoid direct confrontation of State citizens to allow mechanisms of dialogue between all political, economic and social of society without any exclusiveness, avoiding any form of the authoritarian past. With the world being more and more of a House of glass with the Internet revolution that actually opens up to all facets of society through more space and freedom.  All segments of society want their share of the hydrocarbon rent and immediately, not believing anymore in demagogic speeches and empty promises, the goal is to restore confidence in the future, and avoid this growing citizen-state divorce by a deep moralization of the political and economic life of society.
2. Globalization, a reality that whilst avoiding chimeras will have to be taken into account when considering the impacts of all recent global changes, the geostrategic stakes for the region including the Sahel, the integration of the Maghreb and more generally of North Africa, bridge between Europe and Africa so as to better face up the multiple challenges with the comparative advantage of this country and inscribe it into the Euro-Mediterranean and African space. One must realistically analyze the strategic implications of the Association Agreement that binds Algeria to Europe since September 1^st, 2005, after having had a break of three years. How then to arrange for a set-up of competitive enterprises in terms of cost and quality to this horizon?  It is similarly of the same with the future agreement which will be even more binding of Algeria’s accession to the Organization World Trade (WTO).  In this context, it is urgent to fix all those inconsistent and 1970’s modelled socio-economics and industrial development policies, whilst notably taking into account the fourth world economic revolution.
3. School reform has not only economic but cultural and political implications in the shaping of tomorrow’s Algerian citizen. It is in this context about how to also integrate the country’s educated youth including that of the emigration with its important potential that is the mother of all reforms. The socio-educational system got itself bureaucratised over the years, from the primary to the higher levels through also the vocational training and continuing education, posing the problem of the mastery of new technologies, having preferred the dominance of quantity over quality with up to 2 million students by 2020. Without however the primacy of the Knowledge Economy, any reform would be doomed to failure and everything else is a merely empty speech (1).
4. Away from administrative measures, it will be a matter of fighting off the bureaucratic system that discourages any creative initiative and that produced all that informal business sphere of more than 50% of the total country’s economic base where everything is treated in cash, thus promoting tax evasion, referring to the complete overhaul of the State. Basically this involves a debate on the future role of the State, far from the centralized model, so as to achieve a transition to a market economy with social purpose and reconcile efficiency and deep social justice.
5. Productive private sector characterised specific market does not exist and the State sector would have to evolve towards a competitive framework, frankly address a never too late program of de-monopolization (new local and international private investment sector) and privatization (transfer all or part of existing assets) as a complementary process to allow the transition of economic growth , posing the problem of the role of the State in the transition to a mastered competitive market economy.
6. Economic regionalization problem not to be confused with the increase in the number of governorates and regionalism, will strengthen the symbiosis Citizen-State through the involvement of local communities that need to optimise public expenditure, streamline its expenses, in order to achieve a grouping around large economic space whose core areas should be vocational training centers, public banks, private companies and regional universities within regional eco-poles so as to develop centers of excellence.
7. It would be a mistake to focus only on new organizations and legislation to fill the void; Algeria having experienced dozens of new organizations notably in the public without any conclusive economic impact and on the best laws in the world that are rarely applied. It is rather the implementation of good governance, involving the reorganization of the State, based not on custom relationships but on the rule of law and an independent justice.  It is also about promoting the plurality of the media with a code of ethics, a fight against corruption that destroyed the cohesion of the social fabric and scared away potential investors. It is thereby about establishing institutions, adapted to both the global and local changes taking into account our cultural anthropology.
8. Address, without taboo nor pouring into attacks and pernicious analyses, like in all democratic countries, the role in a State of Law of the armed forces and security services within a three to five years program, as well as the functioning of the Department of Foreign Affairs so as to adapt all diplomacy and representations to the new world.
9. The strict management of the revenues of SONATRACH, the state oil company that is the main pillar of the national economy, must be a priority through transparency of the costs of production, to empower and extend the hydrocarbons ownership to the whole national community. A productive discussion on the future of Shale Oil & Gas and its effects on the environment, the level of the conventional fossils reserves, and their exhaustion timeline taking account of the increasingly strong domestic consumption, the evolution of international prices and the new global energy changes, posing the problem of the generalised  subsidies without targeting.  Reducing costs by combining Solar and the unnecessarily wasted flared gas, and reviewing with promotion of energy efficiency especially of the conventional methodologies as currently applied in the construction industry.
10. With a non-existing real wage policy, corresponding to the level of production and productivity, it will be to peacefully address the balancing of the labour market with fairness and flexibility not forgetting the dangers of overstaffing in the public service of more than 2.1 million staff, where one does not solve the problems of employment through administrative or fictitious rentier jobs.
11. Related to the improvement of the health system with mismanaged hospitals, despite skills, and a reasonably decent sanitation of pension funds must be managed transparently. For that combine the systems of distribution and capitalization otherwise.

12. To energize the lethargic stock exchange, through a reform of the financial system and the State-owned banks. In this context, after pondering on why non-oil foreign direct investment is not appealing and the binding rule of 49 / 51% that is generalized to strategic and non-strategic sectors resolve, the thorny problem of both agricultural and industrial land allocation and deeds.

In short, meditate the negative experience of the war economy of previous governments in similar conjecture.  For this a change of course is needed. Subsidized interest rates, the purchasing power of the Algerian people as much as the value of the Dinar correlated to foreign exchange reserves, depends up to 70% on the hydrocarbons revenues.  Grants, direct and indirect social transfers having represented 27 to 30% of GDP in 2015/2016; would we see the State carry on in this way if the price of oil were persistently low with Algeria of 2010/2014 running on the basis of a price of a barrel higher at $100/110 and $88 in 2016?

As I demonstrated on numerous occasions to several international and national agencies, Algeria is at the crossroads with all possible scenarios, in order to achieve or not its transition from a rentier economy to a diversified economy and in the context of international values based on the enterprise with in its bedrock Knowledge but taking into account protection of the environment.

As per the founders’ teachings of economics, any existing technical determinism of a dialectical link between the political, economic, social and cultural would largely be influenced by globalization.  It is therefore necessary to distinguish between the dynamic stability and the involvement of citizens through democracy source of social stability and economic progress. Without democracy, the rule of law and the return to confidence, there may not be any development.

 

Note (1) :

• see algerie.com 26/05/2017 “New economic challenges of the Government of Abdelmadjid Tebboune”
• Interview with Prof. Abderrahmane Mebtoul on Ennahar TV “on the challenges of the Government Tebboune’ on 26/05/2017
• “the impact of the agreements of Vienna” on daily governmental Horizon and
• Chorouk Arabic daily of Sunday 29/05/2017
• Professor Mebtoul will debate on 29/05/2017 at 2300 – TV Dzaiar News on these topics .

May 19, 2017 Iran’s presidential elections

Internal and geo-strategic issues

Iran is at a crossroads in its history; 56.4 million voters are called to the polls to elect their new president.  These May 19, 2017 Iran’s presidential elections with a risk of having a high abstention rate happen in a background of a general situation that is much better than in the past, inflation is under control although unemployment is relatively high.  For these elections of 2017, it is mainly a duel between Hassan Rouhani, 68, reformer elected in 2013 and a 56 year old conservative Ebrahim Raissi, former Attorney general.  Whatever the results, after these elections, the prospects for growth in the medium and long term are dependent on the pace of reintegration of Iran into the global economy, the speed of the reforms as detailed in the new five-year development plan and especially how to apply, to implement and to boost non-oil segments by creating a level playing field between existing players and new entrants, (winners of the reforms of the future are not those of today) but also to work to improve the business environment and the efficiency of the labour markets but also to work to improve the business environment and the efficiency of the labour markets balancing flexibility and fairness and enter the workforce of the informal sphere within the real sphere.

According to the first partial results as per Reuters on May 20, 2017, the Iranian outgoing president Hassan Rouhani is said to be widely re-elected totaling approximately 56%.  The results will officially be announced on Sunday May 21, 2017.

Iran’s Geopolitics details

The Islamic Republic of Iran proclaimed on April 1, 1979 has a population that rose from 21 million in 1960 to 80 in 2016 with by extrapolation upto 84 million in 2020 for an urban population in January 1^st, 2016 of 73.4% of the total population, life expectancy of 71.15 years and ranked second in 2010, behind Egypt in the MENA’s most populous countries.  

Iran has an area of 1,648,000 km² with a density of 48.4 hab per km², and Tehran as capital and Karaj, Tabriz, Isfahan and Mashhad as major cities. It holds the world’s fourth oil reserves with more than 160 billion barrels (13 / 14% of world reserves).  In general Iran is a strategic player that could help stabilize the tensions in the region with a definite impact on the supply of oil.

Iran which produced around 2011/2015 more than 2.5 million barrels a day can produce more than 5 to 6 million barrels per day today. These factors are in addition to a production outside OPEC of 67% market share compared with 33% for the OPEC, not counting all those newcomers on the world market.  It has also more than 34,000 billion cubic metres of gas or more than 16% of world reserves, not to mention that Iran if agreements are respected, will then access between 50 to 100 billion Dollars in foreign banks, which will increase its exports and attract foreign investment.

Iran has significant resources. It is located on the belt of the reserves of copper in the world and benefits from considerable reserves of other minerals, such as iron, aluminium, lead and zinc and as a country with borders it shares with 15 other countries, making it easily an emergent country, especially as it safely invested in human resources, the elite without which no country can develop.

According to the studies of the OECD and the IMF, its population has a literacy rate of 93% for the 19 to 40 years old.

The head of State is the Supreme Leader of the Islamic Revolution that is named for life by the Assembly of Experts and the President is Hassan Fereidun RUHANI since August 3^rd, 2013.  The Supreme Leader is the Commander-in-Chief of the Armed Forces and controls all the army intelligence and security operations.

The head of Government is the president elected through universal suffrage for a term of four years. The Council of Ministers is selected by the president, with the approval of the legislature. The president holds control over the executive, but shares power in the areas which are the prerogatives of the Supreme Leader.

Parliament is made up of the Islamic Consultative Assembly, which is a legislature that is unicameral.  It has 290 seats, and its members are elected by universal suffrage for four years. Parliament needs to validate the laws by the Council of Guardians, which checks if the proposed laws do not contradict Islamic principles. The Parliament has real power in Iran, particularly regarding removal of a Minister.  The president may dissolve the Parliament directly, and can recommend the dissolution of the Supreme Leader.

The entire international community except Israel, had welcomed the lifting of the embargo against Iran once the International Atomic Energy (IAEA) Agency has certified on January 16, 2016, the steps taken by Tehran for not committing to produce a nuclear bomb.

After nearly a decade of diplomatic isolation, Iran has returned to the international community. Since his election in June 2013, president Rohani had expressed the wish to improve relations of Iran with the international community on the nuclear file degraded during previous presidencies, while trying to soothe its relations with regional powers including its relations with Sunni powers, especially Saudi Arabia.

According to many military experts, Yemen, at the tip of the Arabian Peninsula and preserve of Saudi Arabia’s via the USA, is not a strategic priority for Tehran, much less in any case to that of Iraq or Syria, where Iran is a major player in the current crisis.  At the regional level, it is an actor as evidenced by its priority, which is the struggle against ISIS.  Iran gave its support to the Iraqi regime, but also since the outbreak of the Syrian crisis a full support to Damascus. This is however a position that can evolve according to its strategic interests.

Socio-economic and financial details

With a GDP estimated in 2016 to be $ 412.2 billion, Iran is the second largest economy in the MENA region after Saudi Arabia. Per capita GDP in 2015 was 5306 US dollars.  The growth rate as compared to the previous period, was 4.6% in 2015, 4.5% in 2016, thus reflecting some dynamism and should be no less than 5.2% in 2017, 4.8% in 2018, 4.5% in 2019.

According to the IMF, inflation rate was 15.6% in 2014, 12.0% in 2015, 8.9% in 2016, a new figure for 25 years, under the effect of the tightening of monetary policy and a forecast of 8.2% in 2017. Unemployment was 12.20% in 2012, 10.60% in 2014, 11.67% in 2015 and 11.3% in 2016 after Q2 2016, 12.7%, its highest level for three years (or 3.3 million unemployed), is explained largely by the increase in the employment rate of the population, to 40.4% compared to 35.4% in January-March 2014.

Yet, there is the importance given to education where the number of students in universities increased significantly over the past 20 years.  In 2015, 4.8 million Iranians have begun university studies, representing almost 6.2% of the total population (from about 3.5% in France).

As to financial indicators, the Iranian Rial (IRR) was quoted at 14777,90 to the Euro in 2011, 15643 a Euro in 2012, 24456 a Euro in 2013, 34653 a Euro in 2014, 32188 a Euro in 2015 and in May 19, 2017 to 36335 IRR a Euro thus showing a strong depreciation of the Iranian currency.

The current balance in 2014 was 3.8% compared to the GDP’s of 0.4% in 2015 and less than 0.6% in 2016 with a forecast of zero in 2017, while the GDP / public debt ratio was 15.6% in 2014, 17.1% in 2015, 17.5% in 2016 with a forecast 17.7% in 2017.  The trade balance of Iran with a share of trade in GDP of more than 31% (World Bank, 2015) is structurally positive, oil exports have increased by 70% in 2016 trend which should continue in 2017 with a trade surplus of 1.8 billion US Dollars in  2016.

The main customers of Iran are China, Iraq and the UAE.  Besides oil and gas, Iran exports are mainly pistachios, carpets, petrochemicals, organic chemicals, aluminium and plastic materials.  Its three main suppliers are the UAE (that in fact play the role of Iran’s Center of re-export), the European Union and China. Iran’s imported goods are mainly machinery, iron and steel, electrical and electronic equipment and cereals.

The Iranian economy remains dominated by the public sector that controls much of the economy with a relatively fragile banking sector. Structurally, the economy is dependent on oil revenues, which account for nearly half of all State revenues.  So, the lifting of international sanctions in July 2015 allowed the resumption of trade and investment (FDI stock in 2015 has been $45,097 million), while exports of oil have found their level prior to the sanctions.

The agricultural sector, whose main crops are pistachio of which iran is the largest producer in the world, wheat, rice, oranges, tea and cotton all contributed to 9.3% of GDP in 2016, and employing 17.9% of the active population. Oil production, which has seen a drastic fall in 2012 following the introduction of international sanctions, has quickly picked up since their lifting, reaching in March 2017 its highest level in 7 years (3.8 million barrels per day).

The industrial sector employs 33.8% of the active population and contributes to 38.2% of the GDP. The textile industry is the second largest sector after the oil & gas. Sugar refining, the industrial preparation of food, petrochemicals, cement and construction are the other major industries. Traditional crafts, such as weaving of carpets, ceramics, silk and jewellery manufacturing, are also vital for the Iranian economy. The tertiary sector contributes to 52.4% of the GDP using 48.3% of assets.

Prospects for the Iranian economy

In order to diversify its economy, the Iranian Government has decided to launch a plan of privatization and open most of the sectors of its economy to foreign investment.

Thus, in 2016 the projects of FDI in Iran increased significantly. The Iranian Government through the country’s Central Bank intends, in accordance with the recommendations of the IMF, to conduct a recapitalisation of distressed banks. The State should implement new reforms to stimulate the private sector as the public sector no longer has the resources to create the needed jobs.

The Iranian authorities have adopted a comprehensive strategy of reforms based on the market, as declared in a document on prospects in the future 20 years and in the 6^th five-year plan of development covering the period 2016-2021. So this plan revolves around three main axes: the development of a resilient economy, the scientific and technical progress, and the promotion of cultural excellence. On the economic front, the plan tables on an annual growth of 8%, with three main priorities for the next five years, e.g.: reform of public enterprises, financial and banking sector, distribution and management of oil revenues, greater budgetary rigour, the fight against waste and corruption.

Because of the important thing for the Iranian Government is to drive the economy out of recession, the goal is economic recovery.  Reducing unemployment and control of the inflation to maintain social cohesion, knowing that the economy is highly dependent for its funding on the oil revenues, the Government of Iran with the lifting of the embargo will as a consequence increase the supply of oil, which will allow it to boost its economy and intends to carry out internal reforms to increase tax term revenues.

Thus Iran plans privatizations and disposals of assets that show strong growth as compared to the current budget combined with the reduction of the State’s lifestyle (operating expenditures, salaries of civil servants, etc.).  So, the Government of Iran will be facing significant internal challenges that require major structural reforms at three levels:

First, review all un-targeted widespread subsidies, that are wasteful and source of rentier situations and diversions of funds, establishing another cause of this permanent bleeding in the Iranian economy that prevent the channelling of resources into the system of domestic production so as to drive effectively the development of the country.

It is in this context that the indirect subsidies, whose cost was estimated at 27% of GDP in 2007/2008 (approximately $77.2 billion), has been replaced by a program of direct cash transfers to Iranian households.

The second part of the subsidy reform, launched in the spring of 2014, provides a more gradual oil price envisaged before adjustment and a wider targeting of transfers for the benefit of low-income households. Nearly 3 million of higher income households have already been removed from lists of beneficiaries.  As expected, the poverty rate declined by 13.1 to 8.1% between 2009 and 2013 (based on a poverty line of $5.5 in parity of purchasing power in 2011.

This evolution according to the IMF is probably attributed to the establishment, by end of 2010 of a universal program of monetary transfers, prior to the removal of subsidies. The program seems to have more than offset the expected increase in the less affluent and contributed household energy bills, doing so to improve the purchasing power of the poorest 40% of the population. This approach would have led to a reduction in the expenses of the targeted subsidies organisation (TSO) of 4.2% of GDP in 2014 to 3.4% in 2016.

Second, whilst ensuring its security protection, limit the huge spending on the military because of the regional tensions including the nuclear project for military purposes as per the agreement for nuclear power for civilian use, the colossal ballistic program and interventionist policy at the international level that require significant financial aid are believed to be no more;

Third; it involves adjustments at the level of the Iranian authorities power, the limitation of that of the Pasdaran whose control is an essential part of the Iranian economy, without being subject to the law on taxation, monopolizes all economic activity with colossal revenues in the sectors of oil, gas, petrochemical, telephony, computer, automotive, steel, cement, food, pharmaceuticals as well as roads, banks, insurance. According to analysts, the Pasdaran are among the largest cartels of the world and control more than 50% of imports and one-third of Iranian exports

In summary, the agreement, signed in July 2015, has allowed the lifting of economic sanctions against Iran and the resumption of partnership with overseas while we are witnessing an ambiguous positron of the U.S. president, who seems to take this legacy without ceasing to criticize claiming that in April 20, 2015, Iran was not in breach of the nuclear agreement, but that he violated the spirit.  Anyway, the return of Iran into the community of Nations would help defuse the climate of tension that runs across the region and foreshadows a significant geostrategic and energy reconfiguration at the level of the Middle East.

Please address any comments to Dr A. Mebtoul  ademmebtoul@gmail.com