Government Insists on Privatization and State Withdrawal

North Africa Journal, 22 April 2000

ALGIERS—The minister in charge of reforms and privatization, Hamid Temmar, has been touring Algeria to convince the public that privatization of state-owned companies is the only option left to the thousands of state companies that have not been able to bounce back from their financial turmoil.

Temmar met last week with officials, political leaders and business executives of state companies based in eastern Algeria. He reiterated that the mission of his department was to create jobs on one hand and to attract foreign investment on the other.

As to emphasize the failure of previous policies, Temmar added it was time to do away with centrally planned management inviting provincial authorities to begin launching real privatization programs with their own initiative.

During his meetings with officials in eastern Algeria, Temmar was rather direct when he spoke of the failure of the privatization authorities, the CNP and the state bureaucracies known as Holdings in charge of improving the performance of state industrial and service companies. The government’s privatization policy aims at creating the conditions for a sustained economic growth and job creation in a country that is the victim of a major unemployment problem. It is the role of my ministry to coordinate such reforms since the two administrations created to lead this effort, the CNP and the Holdings, have not succeeded.

For Temmar, privatization is the only way to save what is left of state enterprises given the inability of the State treasury to indefinitely sustain their existence.

Meeting with executives of companies recently privatized in Annaba, Temmar said we (i.e. the public sector) live in a catastrophic situation due to unfair competition from the private sector. All of our efforts to improve the situation of public firms have ended in failure.

The mission of Temmar across Algeria is a form of response by the government to the position of labor unions and other interest groups including the very administrations in charge of the industrial sector that have increased their attacks against reforms based on privatization. Temmar hinted that the end of the Holdings is approaching.

While avoiding to be direct, the speeches of Temmar and other officials accompanying him gave strong indications that massive privatization operations would be launched under the Benbitour cabinet. Companies that have been the pride and joy of the centrally planned economy, such SNVI, Sider and Ferrovial which have massive operations in eastern Algeria are on the privatization agenda.

But Temmar has also told interest groups that such privatization program will be conducted in orderly manner so as to avoid social disruptions.