Algeria - Algerian President Abdelmadjid Tebboune announced in his last interview with the local media on December 22, 2022 that Algeria is in the fourth phase of the process of raising wages, and that the increases will continue in order to ensure a decent life for the Algerian citizen.

And in implementation of the decision, the Minister of Labor, Employment and Social Security, Youssef Shorfa, recently revealed to Parliament that the increases will affect two million and 800 thousand public employees, and two million and 980 thousand retirees with regard to raising pensions.

The government official also confirmed that 1,900,000 young men of both sexes benefited from the new value of the unemployment grant, estimated at 15,000 dinars ($110 per month, according to the bank exchange rate), while the International Monetary Fund expected in its latest report that unemployment in Algeria would drop to 9.8% in 2023.

The Minister of Labor later stated to Algerian radio that the financial cover to cover salary increases amounts to about 900 billion dinars ($6.5 billion), which is a total amount that includes 3 years according to the new financial system, in addition to 147 billion dinars ($1.05 billion) allocated to raise pensions.

For his part, the Director General of the Budget at the Ministry of Finance, Abdel Aziz Fayed, announced that 350 billion dinars ($2.5 billion) have been allocated within the framework of the 2023 finances to ensure an increase in workers’ wages, and the same amount is allocated for the next year, to cover a fifth increase pledged by President Tebboune in 2024.

And the government announced the payment of new salaries next March, with a retroactive effect, which is calculated starting from this January.

Extensive professional integration process

In a related context, the government has appointed more than 600,000 temporary employees to permanent positions who were part of the "Social Support Apparatus" at a total cost of 100 billion dinars ($700 million).

According to the Finance Law, the mass of wages expected this year will reach 4629 billion dinars ($34 billion), which represents 47.36% of the management budget, and contributes to raising the treasury deficit to an average value of 6586 billion dinars ($48 billion) during the period 2023- 2025 (23.7% of the gross domestic product), according to the statement of the Minister of the Sector.

It is noteworthy that 7 million workers in the private sector (63% of the total employment in the country) are not covered by the new increases, in addition to 1.4 million workers in the industrial and commercial public sector (that is, outside the public service system according to Algerian labor legislation), according to figures from the National Bureau of Statistics. in the country.

Expert Omar Haroun excludes the impact of inflation on new wage increases (Al Jazeera Net)

Purchasing power support strategy

On the background of the presidential decision to raise wages and pensions and grant unemployment in the current context, economic and financial expert Omar Haroun included it within the "strategy used to support the purchasing power of the Algerian citizen."

Haroun explained in a statement to Al-Jazeera Net that it is based on 3 main axes, which are support for widely consumed commodities and support for the Algerian dinar to avoid imported inflation, especially since Algeria still imports $30 billion of goods and raw materials annually, and thirdly, support for the purchasing power of the citizen.

He stressed that the increases will be in the range of 47% between 2022 and 2024, according to a well-studied plan aimed at helping the Algerian citizen overcome the consequences of "Covid-19" and the Russian-Ukrainian crisis.

The spokesman also attributed the government's decision to Algeria benefiting from significant financial surpluses ranging from $55 billion in fuel revenues, the increase in foreign exchange reserves to more than $60 billion, and the increase in non-fuel exports to more than $6 billion, which are indicators that supported the 2023 budget to be the largest in Algeria's history. 98 billion dollars.

Demands for workers to guarantee a minimum standard of living and an effective wage policy (Algerian press)

Minimum subsistence guarantee

For his part, Masoud Boudiba, the official spokesman for the Independent National Council for Teaching Personnel for the three-phase sector of education, said that the low purchasing power, high prices, and the inability of the citizen to meet the required needs are a reality that requires an urgent review of the wage policy and raising it to a level that allows reducing the large difference between the minimum standard of living. The minimum wage, which currently does not exceed 20,000 dinars ($150 per month).

Boudiba revealed in a statement to Al-Jazeera that his labor organization, in coordination with the Algerian Confederation of Trade Unions, conducted an economic study according to the data of the Algerian market, which confirmed that the minimum living standard for a family of 5 members should not be less than 80,000 dinars ($600).

He added that the average wage today in the civil service does not exceed 40,000 Algerian dinars ($300), which means that "the difference is large and confirms the displacement of the middle class into the circle of poverty."

The representative of the workers called for increases to bring his colleagues closer to the minimum standard of living, and to "build the wage policy on studied scientific standards that make salaries compatible with the living reality and the requirements of life in order to provide social stability."

He also expressed the employees' fear of "the evaporation of the planned increases in the wind of inflation, which the government must curb through productive mechanisms," as he put it.

Inflation predictions are inaccurate

In turn, expert Omar Haroun believes that talking about the impact of inflation in the future is just "inaccurate and unrealistic speculation", justifying his analysis by the fact that Algeria divided the purchasing power support strategy into 3 previously mentioned axes.

In addition, direct financial incomes were also distributed over 3 years, to avoid inflationary pressures resulting from high demand. Rather, "reliance was placed on gradually supporting demand, a mechanism that is consistent with the general strategy of the national economy, which works to develop productive branches," the spokesman adds. .

The government expects an inflation rate of 5.1% in the new year, compared to 9.4% on an annual basis in July 2022, according to the indicators of the National Bureau of Statistics, while President Tebboune pledged to take several measures in this regard in order to “control inflation and prices while raising production.” ".

For his part, the head of the National Association of Tax Advisers, Boubaker Salami, completely rules out "the going of new increases in the winds of inflation and devouring them with flames of prices."

recovery of the public treasury

Salami said in a statement to Al-Jazeera Net that the goals of the increases are not only social, but also economic by "moving the consumption process and activating the demand for production, which is expected to move strongly with the application of the investment law starting from the current year, to create wealth, tax resources, job positions and hard currency through Non-oil exports.

However, this will not be achieved - Salami adds - except by devoting a suitable climate for real investment in a clean environment of parallel market practices, ambiguity, bureaucratic practices and corruption, which is "what the Algerian authorities are working on by reviewing legal texts to restore the confidence of the citizen and the local and foreign investor alike."

And if the measures taken in the framework of improving incomes in general have cost the treasury huge amounts of money, then the government's consolation in Algeria lies in the results of the reforms that will affect most areas, which will lead to the recovery of the public treasury, says Salami.