Algeria .. Misty political scene foreshadows a severe economic crisis

Mohamed Amir-Algeria

Many economic experts in Algeria are concerned about the impact of the current political crisis on the country and the blurring of the political scene and its repercussions on the social front, without being clear of the tasks of the next phase and the end of the crisis, which threatens an economic crisis.

Some experts do not rule out Algeria's intervention in an economic crisis if the political problem is not resolved as soon as economic stability is closely linked to the political stability, which is witnessing a noticeable disturbance in light of the intransigence of opinions and the absence of urgent solutions that bring the country to safety.

Political instability threatens to hinder the progress of economic reforms, which could lead to a delay in issuing new laws in line with vital sectors such as hydrocarbons, which could undermine the country's ambitions to increase or even maintain oil and gas export levels.

"The economy of Algeria is tied to the income and the budget of the state, and any imbalance affecting the budget confuses the national economy," he said.

Obscure mode
Bukhalka said that the vaguely political situation in Algeria will affect the national economy even slightly, but its continuation will have a very negative impact, although the state budget covers the deficit for two full years.

He warned of the delay of the political benefits of presidential elections, which should be short-term and as soon as possible, so as to avoid Algeria's economic crisis is indispensable.

The former Minister of Finance that the year 2019 pivotal for the Algerian economy, where it should jump to what was planned, noting that the political atmosphere does not serve the economy, and reduces the determination of investors.

The economic expert Kamal Rizig that the Algerian community has been living for more than three months popular movement within the political crisis has negatively affected the economy of the country and increased the depth of the financial crisis.

According to Rezaq, the previous government's decision to print money instead of borrowing from abroad, has caused great problems, pointing out that on December 31 last exceeded the value of printed money $ 50 billion.

"The gross domestic product (GDP) fell compared to the previous year of $ 200 billion and the services and tourism sector lost between 70 and 80 percent of its business," Zureik said.

He added that the losses of Algeria's metro - which became inactive on Friday - was estimated in five collection only about 1.1 billion Algerian dinars (about nine million dollars), pointing out that the right of the Metro company to ask for compensation from Algeria's decision to stop work.

Oil revenues
Although the revenues of the Algerian economy are mainly concentrated on oil revenues and other fuels whose prices are witnessing a remarkable recovery in the global market, some measures remain hostage to political instability, which in turn hampers the legal arsenal and impedes the progress of the required reforms. This will affect Algeria's ambitions to increase or maintain The same levels of production and export.

However, economist Abdulkader Hadeer said in his speech to Al Jazeera Net that as long as oil prices are high, any deficit in the economy or the exit of capital will not have a significant impact.

He believes that foreign investment in Algeria is very weak, most of it in the oil sector, and argues that the damage will only happen if the state intends to open up to foreign investment.

He says Algeria will face economic difficulties later if oil prices fall, calling for immediate reforms that give reassuring signals to investors to launch major projects and avoid damage to the national economy.

Increase exports
Economic experts also warned that domestic demand and lack of progress on new projects could make it difficult for Algeria to achieve its goal of increasing its gas exports to the Asian market in the medium term.

"It is essential that Algeria review the energy sector management laws to stimulate domestic supply, at a time when the current financial conditions of the country remain unattractive," economist Ismail Lalmas told Al Jazeera.net.

He added that the hydrocarbons law, which is currently being amended, contains a contribution to reduce the burden on investors, and introduces tax incentives to encourage investment in exploration and development projects.

According to Lalmas, it is not currently clear whether the amendments provided are sufficient to attract large investments, because of the weakness of the government.

He pointed out that the performance of the government has become unconvincing, and contributed to the legislative instability that has become a concern for foreign investors.

The economist said that the current situation does not encourage foreign investment at all, and makes most investors wait for the clarity of the political scene and fear of adventure in such circumstances where the profit becomes unprofitable, calling for the exploitation of the popular movement to achieve a strong start of the national economy and encourage and attract foreign investment.

He said Algeria should get rid of a quick political solution that would make state institutions - especially economic institutions - reduce economic losses this year.