countries face similar challenges to create jobs and foster more inclusive growth. The current environment of likely durable low oil prices has exacerbated these challenges.
The non-oil private sector remains relatively small and, consequently, has been only a limited source of growth and employment.
Because oil is an exhaustible resource, new sectors need to be developed so they can take over as the oil and gas industry dwindles.
Over-reliance on oil also exacerbates macroeconomic volatility.
Greater economic diversification would unlock job-creating growth, increase resilience to oil price volatility and improve prospects for future generations.
Macro-economic stability and supportive regulatory and institutional frameworks are key prerequisites for economic diversification...
This Selected Issues paper for Algeria analyzes the growth prospects of the Algerian economy. Drawing on the findings of the empirical growth literature, the paper combines growth accounting and cross-country growth regressions to examine the role of macroeconomic and institutional factors in driving economic growth. It reviews the past growth performance in Algeria and explores the reasons underpinning the recent pickup in nonhydrocarbon GDP growth. The paper also analyzes labor market developments and assesses the factors that may hinder employment creation in Algeria.
This Selected Issues paper for Algeria analyzes the potential economic impact of Algeria’s Association Agreement with the European Union (AAEU). The paper lays out the major elements of Algeria’s AAEU and makes a comparison with other AAEUs. It discusses the potential economic implications (costs and benefits) of the agreement, and elaborates economic policy issues and challenges. The paper also takes stock of Algeria’s business climate as the authorities consider the use of the fiscal space created by higher hydrocarbon revenues to tackle Algeria’s jobs challenge.
This paper, based on the considerable practical experience of the IMF’s Fiscal Affairs Department, sets out a successful strategy for modernizing customs administration. The essence is to establish transparent and simple rules and procedures, and to foster voluntary compliance by building a system of self-assessment supported by well-designed audit policies. Having set out this strategy--and its benefits--the paper discusses in depth what is required in terms of trade policy, valuation procedures, dealing with duty reliefs and exemptions, controlling transit movements, organizational reform, use of new technologies, private sector involvement, and designing incentive systems for an effective customs administration.
Given the tendency of the oil sector to appreciate the equilibrium real exchange rate (RER) in Algeria, trade liberalization with its depreciating impact on the RER is important for diversification of exports. This paper shows that reduction in trade protection would depreciate the RER in Algeria, which in turn would improve competitiveness of, and incentives to invest in, non-oil exports. The paper then discusses existing levels of protection in Algeria and directions for reform.
This Selected Issues paper and Statistical Appendix examines the possible policy responses of Algeria to the reduction of fiscal revenue and the deterioration of the external balance, and more generally the negative wealth effect on the country, stemming from the decline in oil prices. The paper highlights that in policymaking, a distinction between permanent and temporary shocks is necessarily blurred and does not contribute to working out pragmatic solutions. The paper also examines the privatization process in Algeria.
This paper attempts to assess the incremental external financing requirements occasioned by changes in world food prices, due to implementation of the Uruguay Round Agreement on Agriculture, for a sample of 57 developing countries. Based on estimates of changes in food prices due to the Round obtained in previous studies, and on detailed data on food trade by country and commodity, the present study shows that the increase in net food import costs are likely to be smaller than 4 percent of net food imports over a period of six years for the countries considered, although for some of the larger trading nations the effect may exceed US$10 million.
The IMF has been a major participant in the challenge of transforming many African, Asian, and European countries from centrally planned to market economies. The authors of this book, mainly staff members of the IMF, have distilled their firsthand experience with fiscal reform in transition economies into 15 case studies of these countries. In doing so they analyze issues of privatization, fiscal federalism, social safety nets, and the net worth of the Soviet Union. The editor of the volume is Vito Tanzi, Director of the IMF's Fiscal Affairs Department.