The State is not providence to face oil crisis in Algeria, says expert

The ball is still in the government’s court in spite of financial crisis premises which may hit the Public Treasury soon. A plan can be adopted to settle situation by opening markets to businessmen, relaunching 12 frozen sectors and exploiting 500,000 higher degrees, according to experts.

The Treasury does not have enough money to continue subsidy

Although the Algerian Prime Minister Abdelmalek Sellal said the government will never stop subsidy, former State Secretary in charge of Prospective and Statistics Bachir Msitpha expected that it would be frozen by 2018.

“The Treasury does not have enough money to continue subsidy,” he said on Monday in Echorouk’s conference in Algiers.   

Speaking about the general economic situation in Algeria, Msitpha said the State will have to review subsidy by taking new measures.

2015 crisis more dangerous than 86 tragedy

In comparison to the 1986 economic crisis, Msitpha said the same scenario may happen in 2015 as oil price falls. “Yet, the 1986 crisis was created by market speculators and did not last for a long time. Oil price went up again to $100 while the current situation is different. The crisis is structured and linked to shale gas and energy mutations in Algeria and the whole world. Because of that, oil price may not go up once again.”

“No one can confirm that oil price will reach $100 in the next few years. The crisis will last for a long time,” he added.

12 sectors should be relaunched in Algeria

Msitpha also said 12 sectors in Algeria need to be relaunched. Of them, there are agriculture, industry, tourism, petrochemistry and human resources.

“Even in hydrocarbons sector, the government relies only on oil and gas. It does not exploit renewable energies neither phosphate, iron nor mines,” he added.

According to the expert, a large number of 600,000 Algerian researchers are living abroad.

Dinar reduction saved $2 billion in record time

Speaking about the government’s policy to face oil crisis, Msitpha said dinar reduction enabled to inject $2 billion to the State’s Treasury in a short time.

“This amount will relatively reduce deficit. Yet, it will have serious negative consequences in the next year such as inflation increase to 10 percent,” he added.