Algeria

Overall View

Algeria, the second-largest country in Africa, with a population of some 32 millions, ranked 100th out of 177 countries in the 2003 Human Development Index.

After almost 15 years of civil strife, Algeria is now in a process of internal pacification and can look forward to a period of peace and relative prosperity. The country is undertaking legislative, social and economic reforms to move from a centralized, planned economy to a more open-market economy, including privatization and opening up to foreign investment. These are usually accompanied by measures to limit possible negative social repercussions, such as reinforcing social protection schemes to balance declines in real wages, and substituting subsidies on basic goods with compensations to low-income persons.

Its economy and income depend heavily on the price of oil and rainfall. Hydrocarbons account for about 60% of budget revenues, 30% of GDP, and 95% of export earnings; while agriculture for some 10-11% of GDP in average years and 9% in drought years. Thus, increasing oil prices have boosted economic growth in the 2000-2004 period from 2.4% to a robust 7%, and per capita income from $1,580 to $2,280. However, the high capital intensity and high proportion of foreign workers in this industry limit considerably the impact of this growth on employment opportunities.

Indeed, it is estimated that 35% of the workforce is either unemployed or underemployed. Unemployment mainly affects youths (73% of the unemployed are under 30), women and urban areas. Although the expansion of public employment and high growth rates managed to compress unemployment rates from 23.7% in 2003 to 17.7% in 2004, this improvement remains fragile, and job creation remains a high priority.

Poverty, affecting in 2000 a mere 12% of the population, albeit somewhat more in rural areas, is on the decline. This positive level and trend is mainly linked to high oil prices and increased public expenditures, including social transfers.

Recent and ongoing key areas of reform include consolidation of the tripartite dialogue, tripartite discussions of a new labor code, development of MSEs, particularly in handicrafts, revision of the family code aimed at promoting women and fighting poverty, acceleration of privatization, fighting corruption, and a special focus on the employment-intensive sectors of tourism, agriculture and construction.

Activities

• Employment

  • Backing up the creation of micro and small enterprises
  • Promoting entrepreneurship culture
  • Establishing a network among major MSE stakeholders engaged in MSEs development
  • Training trainers specialized in entrepreneurship and management training, using ILO training tools for micro- and small entrepreneurs
  • Stimulating local economic development through promotion of income-generating activities in rural areas, using tourism as a vector
  • Developing social dialogue on vocational training in the construction sector.

• Social protection

  • Providing advisory technical assistance to the Ministry of Labour in establishing a National Occupational Safety and Health (OSH) Institute
  • Establishing the National profile on OSH, to serve as a basis for developing a National OSH programme, in consultation with Workers’ and Employers’ Organisations.

• Social dialogue

  • Developing social dialogue on vocational training in the construction sector.