DISCUSSION WITH FORMER ALGERIAN PM GHOZALI

C O N F I D E N T I A L SECTION 01 OF 02 ALGIERS 001957

SIPDIS

E.O. 12958: DECL: 09/19/2015
TAGS: PREL PGOV ECON AG INRB
SUBJECT: DISCUSSION WITH FORMER ALGERIAN PM GHOZALI

Classified By: Ambassador Richard W. Erdman,
for reasons 1.4 (b) and (d).

SUMMARY AND COMMENT
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1. (C) Over coffee September 13, former Algerian Head of
Government Sid Ahmed Ghozali told PolEc Chief that he opposed
President Bouteflika's plan for National Reconciliation in
its current form because there could be no forgiveness
without a sincere effort to establish the truth, and without
forgiveness there could be no reconciliation. He admired the
U.S. Constitutional system, complained that the GOA's
campaign against corruption was for show, and said if the GOA
had a true economic and financial reform plan the Government
would be spending Algeria's financial reserves on preparing
Algeria for the future.


2. (C) While his critique is somewhat overdrawn and
simplistic, there is no question that the pace of reform has
been slow and less decisive than most reformers would like.
Despite his intellect and candor, Ghozali is not a political
force in the country and did not particularly distinguish
himself during his brief premiership from 1991-1992. He is
generally viewed as the perfect technocrat. With his
trademark bow tie and debonaire style, he also suffers from
an image of being a Westernized Algerian, even though he
comes from a strongly religious family in Setif where Arabic
was the family's first and only language in his formative
years. In the 1999 presidential elections, he was unable to
gather the required 75,000 signatures for his candidacy to
proceed. The Ministry of Interior also refused to allow the
political party he founded, the Democratic Front, to
organize. Algerians might be more receptive to his views if
the GOA, which controls all radio and television in Algeria,
permitted him to appear on camera or behind a microphone.
(End Summary and Comment.)

OPPONENT OF NATIONAL RECONCILIATION PROPOSED BY BOUTEFLIKA
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3. (C) Ghozali said he would vote against the referendum on
National Reconciliation scheduled for September 29. He said
the GOA held a referendum on the Civil Concord in 1999. That
referendum, like the current one, was sold to the public as a
necessary step to do away with terrorism and create national
unity. Since in 2005 a second referendum was necessary,
Ghozali argued somewhat simplistically (since in fact the
proposed charter is far more sweeping and controversial than
the 1999 Civil Concord),the GOA was lying either in 1999 or
today. In any event, he thought it unlikely the pending
referendum would resolve matters permanently any more
successfully than had the adoption of the Civil Concord in

1999. Ghozali also opposed the September referendum because
Algeria, unlike South Africa, had not confronted the facts
and sought the truth of what happened during the dark years
of terrorism in the 1990s. Absent a sincere effort to
establish the truth, there could be no forgiveness, in
Ghozali's view. Without forgiveness, there could not be true
reconciliation.

U.S. SHOULD PROMOTE DEMOCRACY IN REGION
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4. (C) Ghozali said he was an admirer of the U.S.
Constitution. He said when people thought of a political
structure in France, a republic came to mind. When people
thought of Belgium, a constitutional monarchy came to mind.
For the United States, the system could only be described as
"constitutional," which was truly extraordinary. While he
admired the U.S. and its constitutional system, Ghozali said
he did not agree with many U.S. policies. He hoped the
President was sincere about wanting democracy for the Middle
East, but remained skeptical. Would the U.S. hinder
democratic development in the Middle East as the peoples of
the region sought to rid themselves of dictatorship? Would
the U.S., wherever possible, help promote democracy? He was
not convinced the Administration wanted democracy if it meant
that elected governments opposed U.S. policies.

GOVERNMENT'S CAMPAIGN AGAINST CORRUPTION WAS FOR SHOW
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5. (C) Asked about the corruption charges brought against
managers at Sonatrach, which he headed for over a decade,
Ghozali said it was a show for the press. One executive
charged with corruption a few years ago had been named
executive of the year. Which was the lie? According to a
Director General at Customs who recently met with Ghozali, 70
percent of senior executives at Customs were corrupt.
Corruption was endemic in Algeria, said Ghozali, and the
government was employing smoke and mirrors before the media
rather than tackling the problem at its roots: the
insufficient salaries that bureaucrats earned.
GOA LACKS A PLAN FOR FINANCIAL AND ECONOMIC REFORM
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6. (C) Asked for his views on economic and financial reform,
Ghozali said the GOA had made progress in privatizing state
firms. Unfortunately, private monopoly had replaced public
monopoly in important areas, such as in pharmaceuticals and
sugar. Noting that ordinary Algerians complained that the
GOA was hoarding its reserves from oil revenues and not
spending on infrastructure needs and other improvements that
would benefit ordinary Algerians, Ghozali said the large
reserves demonstrated that the GOA did not really have an
economic development plan. If the Government had such a
plan, he reasoned, the reserves would be spent on projects
that would prepare Algeria for the future. How, asked
Ghozali, could Algeria profess to be making good progress on
financial and economic reform when the country had no real
banks and no capacity to make payments by check? Serious
reform was lacking.

BIO NOTE
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7. (C) Ghozali was Head of Government 1991-92, Minister of
Foreign Affairs (1989-1991),Finance (1988-89),and
Ambassador to France and Belgium, also in the 1980s. Ghozali
is also considered to be the founder of Sonatrach, the
state-owned oil company, which he headed from 1966 to 1979.

ERDMAN