Rabat - Nicolas Sarkozy, Former French President and current head of the Répulicains party, main opposition party, has expressed his concern about the instability that is affecting Algeria.
Rabat – Nicolas Sarkozy, Former French President and current head of the Répulicains party, main opposition party, has expressed his concern about the instability that is affecting Algeria.
While the presidential hopeful lauded Morocco’s stability in a destabilized South Mediterranean region, he expressed his concerns regarding Algeria.
“At the gates of Europe, we have an almost complete destabilization of the entire southern Mediterranean, apart from Morocco where we can rely on a great king – and wish him long life,” Sarkozy in a speech about defense on Tuesday.
Sarkozy said that Algeria’s main cause of concern is the unprecedented drop in oil prices and the country’s dependence on revenues from its hydrocarbons sector.
“I will say nothing of our Algerian friends because I know that the subject is sensitive,” said Sarkozy.
“And I will oppose a formal denial to all who would come tell me there is no question, especially with the collapse of commodity prices and the dependence of this great country on fossil fuels” has added.
Algeria’s economy depends heavily on the hydrocarbon sector, which represent a third of GDP and account for about 98 of exports and of fiscal revenues. Oil revenues and government spending drive the country’s economic growth. With the steep drop in oil prices, the country’s coffers are depleting.
This lack of cash will not only push the government to make unpopular measures, such as laying off civil servants and employees of state-owned companies, cutting off subsidies, but also resort to the international financial market to obtain loans.
The gravity of the measures that the government may be forced to make in the coming years can only be understood when taking into account that the public sector employs 31% of the country’s labor force and 76 .1 percent of total permanent employment.
According to an article published on Algerian news website Tout sur l’Algérie on May 7, the country’s savings will not suffice to cover its spending for the current year. This will obligate the government to contract loans in order to maintain its ongoing spending and avoid a collapse of the whole economy.