In recent years, Algeria has rebuilt its economy from the ground up. Despite various limitations, this North African oil-supplying country is striving to reach the maturity it needs to harness its potential as a regional economic power. To this effect, a panoply of reforms in various sectors is being established.
Determined to make the most of this particularly bright spell in the Algerian economy, President Bouteflika’s administration, endowed with liquid reserves of nearly $126 billion thanks to oil profits, has fast-tracked the realization of close to 100 major projects. Public works have been a cornerstone of the Algerian government’s policy and figured prominently in the presidential campaigns in 1999 and 2004. The president and his administration are supporting diverse infrastructural projects that are capable of responding to the challenges of economic imperatives, as well as respond to the needs of the population.
New cities, like Sidi Abdellah to the west of Algiers and Boughezoul in the Djelf province, trains, metros, tramways, airports, desalination plants, an ambitious East-West autoroute, dams — the list of large-scale public works launched almost simultaneously stretches on and on. Even religious projects, such as the construction of the great mosque of Algiers, are being encouraged by Bouteflika. According to the developers, the Algiers mosque will be the third-largest mosque in the world, after those in Medina and Mecca. Finally, the Algerian president has committed to building one million social housing units by 2009, which is, perhaps not coincidentally, an election year.
Emphasis on infrastructure
These great public works projects form part of the five-year plan launched by the administration in 2004. With a budget of $155 billion, the program has earmarked infrastructural projects for 40% of the budget. As for foreign investment, international operators from various regions are rubbing shoulders in the capital city, and for good reason: the market is huge and shows signs of a promising future. “There are immense markets, and so much to do,” said one ex-minister. Furthermore, projects like the East-West highway will have available financing of up to $13.5 billion. “The highway will definitely develop local wealth,” said Public Works Minister Amar Ghoul during a press conference in which he also announced the creation of no fewer than 150,000 permanent jobs for various frameworks of the public works projects.
The country is also generously funding housing development and has allotted $9 billion to a program for building one million social housing units. But as delays are reported, citizens wonder if the government will manage to achieve goals such as these by the rapidly approaching end of the five-year plan. Up until now, only 60% of the housing unit construction targets have been met.
One important victory that has Algerians celebrating is that in the battle for water. The Hamma Water Desalination Facility will use Reverse Osmosis (RO) desalination technology to provide potable water to more than one million people in the capital city. Ranked the largest desalination plant in Africa, the station was conceived on a foundation of latest-generation technology. RO desalination techniques are more energy efficient and cost-effective for poorer nations, and they have a reduced environmental footprint compared to other desalination techniques.
On the other hand, Bouteflika’s highly-publicized “largest-mosque-in-Africa” project is facing some setbacks, in spite of personal commitment on the part of the president. Many potential builders have proposed models to the president, but not one has been retained. According to a source close to the issue, the president himself has turned down each proposal. “He has decided to personally watch over the choice of the project. This is his wish,” the sources said. The budget for this project, which has not been released, is estimated to be somewhere between $1.3 and $3 billion.
Riding the rails
In the all-important transportation sector, the National Company of Railway Transport (SNTR) has committed itself to the task of gradually renovating its trains, building 17 railroads which will service several provinces throughout the country and are anticipated to be in operation by the end of this year. Construction on the East-West highway is proceeding more or less according to schedule and the Trans-Saharan Highway Project, which was begun in the mid-1970s as the “Road of African Unity” achieved 75% completion in 2007.
Algeria has a significant retard in infrastructural development to make up for. The country’s objective is to responsibly invest its current financial cushion, as 97% of its income derives from the hydrocarbon sector. But lost time and insufficient development could place major stumbling blocks on the path of development, particularly in project management and perpetual bureaucratic struggles. Investments in Algeria have been marred by corruption, bribery, and a lack of transparency. President Bouteflika himself has complained on several occasions of the poor management style of his own, hand-picked ministers and recently admitted that his investment policies had not led to the kind of economic growth he had hoped for.
