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 -------------- ¶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 -------------- -------------- ¶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 -------------- ¶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 -------------- -------------- ¶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 -------------- -------------- ¶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 -------------- ¶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