Draft reveals sweeping privatisation plans

Draft reveals sweeping privatisation plans

Algeria Interface, April 23, 2002

Algeria Interface has obtained a copy of privatisation plans that go far beyond those for which former Privatisation Minister Hamid Temmar lost his job.

Algiers, 23/04/2002 – Algeria Interface has obtained a copy of a draft of Privatisation Minister Nouredine Boukrouh’s planned « Privatisation Strategy and Programme ». It contains proposals that go much further than those which cost the previous minister, Hamid Temmar, his job in an attempt by President Bouteflika to appease industrial relations.

Mr Boukrouh advocates the privatisation of almost 700 publicly owned companies (known by the acronym EPE which designates commercially oriented companies) irrespective of their size or health over a period « that should not exceed 18 months ». Over 250,000 employees would be affected.

Chapter VII of the draft, « The Scope of Privatisation », clearly states that « all EPEs are eligible for privatisation ».

The enterprises up for privatisation are divided into three groups under the headings, « Financial Health », « Market Position » and « Size », the three sets of criteria are « established on the basis of the principles and objectives stated in the privatisation strategy ».

The meaning behind this loose wording is not made much clearer by closer perusal. There is no easily discernible common denominator the kind of companies and privatisation method under each heading.

Ailing companies under « Financial Health », for example, include the sectors like construction, hotels, heavy manufacturing and textiles among others described as being out-of-date. They are depicted as blighted by unrecoverable debt and the development of a grey market – a description that could match sectors grouped under any of the other headings.

Predictably the aim with companies in less profitable sectors is sell off state assets fast. This wide-ranging category covers the chemical, pharmaceutical and cement industries, though why they could not be bracketed with companies under the heading « Market Position » is not easy to discern.

No mention is made of the sizes of enterprises under the heading « Size ».

Speed of privatisation is always described as « fast » or « as fast as possible », while the same forms of privatisation or part-privatisation are determined across the three categories by the market potential – or lack of it – of different companies.

The baffling, overlapping nature of the three categories lend credence to the grievances of labour confederation UGTA. Alarmed by the sheer scope of Boukrouh’s plans, it has described his attachment to privatisation as dogmatic.

The stance is more than a change in the scope of privatisation. The Preamble reinterprets the restructuring and streamlining that went between 1996 and 1998. Hitherto seen as necessary to bolster high-performance public sector companies, it is portrayed in the document as « a wide-ranging streamlining… without which it would have been illusory to envisage the implementation of any privatisation operations at all ».

In addition, the draft states that « to create a dynamic that encourages investment, attractive companies likely to find buyers must be the first to be put on the market ».

Altogether, it reads much like an article of faith. Chapter II is entitled « The Fundamental Principles of Privatisation ». It might be truer to say that privatisation itself is the fundamental principle.

Yassin Temlali