Algerian Gov't Paves the Way for Foreign Financial Institutions

Algeria’s Interim President Abdelkader Bensalah Wednesday signed the “finance law” which defines the 2020 fiscal budget, reduces public spending, eliminates some conditions for foreign investments, and allows indebtedness with International Financial Institutions (IFIs).

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This happens just 24 hours before citizens attend the presidential elections through which Algeria will choose a successor to former President Abdelaziz Bouteflika.

Acting president Bensalah, whose presence in power has been questioned since the July elections were postponed, decided to implement economic reforms that the Hirak, the popular protest movement, has strongly criticized.

Besides signing a new law for the oil sector, he reduced next year’s public spending by 7.7 percent and opened up the possibility that the Algerian state can apply for international loans.

"The 2020 Finance Law allows the use of financing from IFIs for structural economic projects," the official APS agency reported.​​​

Devant Algiers central post office. "Murdering Power."

This new law also repeals a previous rule that forced joint ventures not related to the energy sector to keep 51 percent of their shares in the hands of Algerian investors.

On Wednesday the streets of Algerian cities were filled again with protesters who oppose an electoral process in which none of the candidates is seen by citizens as an option for change.

Two former Prime Ministers participate in the elections: Ali Belflis and Abdelmajid Tebboun, who led the Executive Branch for three months in 2017 when it was no longer known who was really in power.

Other candidates are Azzedine Mihoubi, who is former Culture Minister; Abdelkader Bengrina, who is former Tourism Minister, and Adelazis Belaid, who is former lawmaker of the National Liberation Front (FLN), which governs the country since the 1960s.

Algeria has been going through an acute economic crisis since 2014 when international oil prices plummeted, which affected 95 percent of the country’s export-related income.

Over the last five years, the Algerian government has been depleting its monetary reserves in order to maintain subsidies related to gasoline, housing, and essential products.

Experts believe that Algeria will most likely request loans from the IFIs as their reserves have fallen from 178 billion euros in 2014 to 90 billion euros in 2019.