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
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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.


Russia’s RDIF to boost investment deals in Saudi Arabia

Updated 13 min 32 sec ago
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Russia’s RDIF to boost investment deals in Saudi Arabia

  • Fund's CEO Kirill Dmitriev leads a delegation of more than 20 Russian business figures to the Kingdom
  • The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services

RIYADH: Russian sovereign wealth fund RDIF said on Wednesday it would significantly boost its investments deals with Saudi Arabia in 2019.

The fund’s CEO Kirill Dmitriev led a delegation of more than 20 Russian business figures to the Kingdom to discuss new projects.

Saudi Energy Minister Khalid Al-Falih met Dmitriev in Riyadh and expressed his happiness on the progress they made in the talks and the cooperation between the two countries. 

“Its not only commercial cooperation, but we are also working on scientific research, and we have opened a research center in Moscow University,” Al-Falih said.

The minister said the Russian delegation will also meet officials from Saudi Basic Industries Corporation SABIC and mining company Ma’aden among other companies during their three day visit to the Kingdom.

The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services sectors, a Russian Direct Investment Fund statement said.

Al-Falih added that the Russian side has started a rubber plant project in Al-Jubail with Total and Novomet.

RDIF already has a $10 billion investment partnership with the Saudi Public Investment Fun (PIF), with more than $2 billion already invested in projects.

“We extend our cooperation not only on oil cuts but to cooperate in oil services, technology, LG and petrochemicals,” Dmitriev said. “We believe Saudi Aramco can be one of the greatest partners of Russia.”

The CEO said they were continuing to cooperate with PIF in Saudi Arabia through a number of energy investments.

Russian companies are also keen to invest in the Kingdom’s planned $500 billion mega-city NEOM.

“We have companies that have interest to invest in NEOM, we would like to build a port in NEOM, it can be a big port,” Dmitriev said.