Algeria blighted by youth unemployment despite recovering oil prices

Economists have predicted that the government of veteran President Abdelaziz Bouteflika, 81, is likely to spend any increased revenues on imports, not on job-creation initiatives. (Reuters)
Updated 12 September 2018
0

Algeria blighted by youth unemployment despite recovering oil prices

  • More than one in four Algerians under the age of 30 are unemployed in a country that remains heavily reliant on exports of oil and gas
  • Unlike neighboring Tunisia or Morocco, Algeria has made little headway in attracting foreign tourists, and foreign investors outside the energy sector give it a wide berth

ALGIERS: Two years after graduating from university, Ali Lamir, 26, has been spending his days sitting in a cafe in central Algiers thinking about how to land a job.
He is not alone — more than one in four Algerians under the age of 30 are unemployed in a country that remains heavily reliant on exports of oil and gas, despite numerous official promises of economic diversification.
Economists see little prospect of improvement despite a recovery in global oil prices. They have predicted that the government of veteran President Abdelaziz Bouteflika, 81, is likely to spend any increased revenues on imports, not on job-creation initiatives.
“My university degree is of no use. I have been looking for a job for two years but to no avail,” said Lamir, a graduate of the Algiers Institute of Law and Administrative Sciences.
Unlike neighboring Tunisia or Morocco, Algeria has made little headway in attracting foreign tourists, and foreign investors outside the energy sector give it a wide berth, deterred by security concerns and bureaucracy.
A scheme of interest-free loans, introduced two decades ago to encourage young Algerians to start their own businesses, has not fulfilled early hopes that it could boost the non-energy sector, which today accounts for only 6 percent of exports.
“I have applied for jobs at many firms, but get nothing other than promises. I am willing to accept any position even with a low salary,” said 24-year-old Aziza Bari, a graduate in economics from Algiers University.
Overall unemployment stood at 11.1 percent in the first quarter of 2018, official data shows, but was 26.4 percent among the under-30s, who make up more than two thirds of Algeria’s 41 million people.
Such figures do not make for happy reading for Bouteflika, who has been in power since 1999 and is considering seeking a fifth term next year, despite poor health.
The recovery in global oil prices led to a 15 percent increase in Algeria’s oil and gas revenues in the first seven months of 2018 to $22 billion. Energy exports account for 95 percent of its foreign earnings.
Algeria has also gradually opened up industries such as food, home appliances and mobile phones to private investors, helping the non-energy sector to grow by 3.1 percent in the fourth quarter of 2017, according to the most recent available data.
But business leaders have demanded bolder steps. “Our country is in need of accelerating the transition movement to an economy of knowledge and innovation,” Aliu Haddad, head of the country’s largest business association Algerian Business Leaders Forum, told a conference.


Crisis at India’s Jet worsens as it grounds planes, faces strike

The debt-laden carrier has delayed payments to banks, suppliers, pilots and lessors. (Reuters)
Updated 20 March 2019
0

Crisis at India’s Jet worsens as it grounds planes, faces strike

  • More than 20,000 people are employed in the company
  • The company had to stop more than 50% of their aircraft due to insufficient funds

MUMBAI: India's Jet Airways was fighting multiple crises Wednesday after grounding six planes, leaving it with only a third of its fleet flying, while pilots have threatened to walk out and a major shareholder is reportedly looking to offload its huge stake.

The problems at India's number-two carrier come as other airlines struggle to turn a profit despite the sector rapidly expanding in the country over recent years.

Jet, which employs more than 20,000 people, is gasping under debts of more than $1 billion and has now been forced to ground a total of 78 of its 119 aircraft after failing to pay lenders and aircraft lessors.

In a statement late Tuesday announcing its latest grounding, the firm it said it was "actively engaging" with lenders to secure fresh liquidity and wanted to "minimise disruption".

But with hundreds of customers left stranded, Jet's social media accounts have been flooded with often suddenly stranded passengers demanding information, new flight tickets and refunds.

"@jetairways We book our flights in advance so that we save on travel cost and you are sending cancellation (message) now?", read one irate tweet on Wednesday.

"I have sent a DM (direct message) regarding my ticket details. Please respond!", said Sachin Deshpande, according to his Twitter profile a design engineer.

Another, Ankit Maloo, wrote: "Received an email for all together cancellation of flight days before departure without any prior intimation or communication over phone!"

The firm is also facing pressure from its many pilots who have not been paid on time, with unions threatening they will walk off the job if salaries do not arrive soon.

"Pilots will stop flying jet planes from 1st April 2019 if the company does not disburse due salaries and take concrete decisions," a spokesperson for the National Aviator's Guild, a pilots union, told AFP.

India's aviation regulator on Tuesday warned Jet Airways to ensure that staffers facing stress are not forced to operate flights.

Meanwhile, Bloomberg reported that Etihad Airways of the United Arab Emirates has offered to sell its 24 percent stake in Jet to State Bank of India (SBI).

A collapse would deal a blow to Prime Minister Narendra Modi's pragmatic pro-business reputation ahead of elections starting on April 11.

India's passenger numbers have rocketed six-fold over the past decade with its middle-class taking advantage of better connectivity and cheaper flights.

The country's aviation sector is projected to become the world's third-largest by 2025.

But like other carries, Mumbai-based Jet has been badly hit by fluctuating global crude prices, a weak rupee and fierce competition from budget rivals.

Alarm bells for Jet first rang in August when it failed to report its quarterly earnings or pay its staff, including pilots, on time. It then later reported a loss of $85 million.

In February, it secured a $1.19 billion bailout from lenders including SBI to bridge a funding gap, but the crisis has since deepened.

"Jet Airways is rapidly reaching a point of no return and running out of assets to keep itself afloat," Devesh Agarwal, editor of the Bangalore Aviation website, told AFP.

"The only solution is equity expansion by diluting its stakes but Jet is just trying to cut losses and running out of options," Agarwal said.

Shares in Jet Airways were down more than five percent on Wednesday.