BOUTEFLIKA URGES WALIS TO TAKE GREATER STAKE IN

UNCLAS ALGIERS 001209

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON AG
SUBJECT: BOUTEFLIKA URGES WALIS TO TAKE GREATER STAKE IN
ALGERIA'S DEVELOPMENT

REF: ALGIERS 0694

SUMMARY
--------------


1. In a two-hour televised speech June 25 before Algeria's 48
walis (presidentially-appointed provincial governors),
President Bouteflika vociferously criticized his government
for allowing red tape, corruption, and nepotism to impede
plans to meet the basic needs of its citizens, particularly
Algeria's youth. He sounded a positive note on jobs created
and public works projects completed or underway, but stressed
that the GoA could do better by decentralizing many of its
infrastructure development programs, for which it plans to
spend USD 80 billion by 2009. In this vein, and in an
apparent attempt to empower his walis to take greater
ownership of programs under their purview, Bouteflika
announced that he would allocate an additional USD 2 billion
this year, to be distributed at the walis' discretion. He
largely eschewed mention of political reform or details
regarding the proposed hike in public sector salaries until,
commentators expect, another speech scheduled for Algerian
independence day, July 5. (End Summary.)

RED TAPE, LACK OF TRANSPARENCY LIMIT
PROGRESS AGAINST ALGERIA'S WOES
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2. President Bouteflika, in a two-hour televised speech June
25 addressing the annual conference of the nation's 48 walis,
enumerated the severe and multipronged challenges facing
Algeria today. He emphasized that Algeria must improve living
conditions in underdeveloped and rural regions; mitigate
economic disparities by combating poverty; promote human
development; and better prepare Algerian youth to contribute
to the future of the country. He stressed that Algeria must
favor, in particular, areas most touched by delays in
economic development and the lost decade of terrorism,
including the vast desert regions of the south and the high
plateaus.


3. The President amplified a previous speech expressing
frustration with his ministers' lack of candor on the pace of
economic development (reftel) when he stressed the need for
honesty from Algerian government officials. "It is
imperative," he said, "to reinforce the struggle against the
too frequent practices of corruption and nepotism... which
destroy the state and ruin the confidence of the citizen." He
further declared the need "to put an end to the lack of
transparency and communication." Departing from his prepared
remarks, Bouteflika declared that "we are neither prophets,
nor capable of miracles, but we must be sincere with the
people."


4. Bouteflika also cited Algeria's red tape as "one of the
greatest evils that hobbles the development of our country."
He highlighted the poor accounting and lack of planning that
have marred many government projects. Citing the nation's
housing construction program, the President veered from his
prepared remarks in noting that "the quality and the
architectural conception of these lodging units are
catastrophic. We must review the entire concept because it's
simply rotten."

PRESIDENT TOUTS SOME SUCCESSES
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5. A few outbursts aside, Bouteflika was careful to cast his
comments as constructive criticism of how the GoA could
better approach its challenges rather than a complete rebuke
of the government's record. In this light, he accepted credit
for progress to date, touting his 2001-2005 economic
development plan that raised investment spending per person
by 237 percent, from 55 USD per person in 2001 to USD 190 per
person in 2005. These funds, the President noted, greatly
improved the country's educational and administrative
infrastructure and helped curb the country's rural flight.
The GoA had realized some 45,000 projects and created 376,000
jobs, which Bouteflika claimed were largely permanent
positions. Algeria had also succeeded in developing leisure
infrastructure that would benefit 17 million youth; improving
schools for millions of others; providing access for 24
million inhabitants to potable water; and increasing rural
access to electricity and gas networks.

EMPOWERING LOCAL OFFICIALS
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6. Bouteflika repeatedly stressed the imperative that "local
elected officials must involve themselves in listening to
their citizens, in order to become sources of proposals,
approaches, and projects." To help accomplish this, the
President announced that the 2006 supplemental finance law
would allocate an additional USD 2 billion to be distributed
under the purview of the walis. The President remarked that
"the major thrust of this supplemental program rests in the
fact that it will be implemented based on proposals of the
walis in coordination with elected officials.... It rests
with (the walis) to choose the most judicious projects based
on the demands expressed by the people and their
representatives." Such projects, he added, could be in the
fields of employment, lodging, access to potable water,
desalination, provision of electricity and gas,
communication, and transport.


7. In addition to empowering the walis, Bouteflika emphasized
the role of women and non-governmental organizations in the
future development of the country. He stated that
"non-governmental organizations in various fields could, if
we really involve them, develop a capacity to mobilize human
efforts, and constitute an important element of development
based on the effective participation of citizens." To
ameliorate planning problems, the President called for the
immediate deployment of 1,500 engineers and architects
throughout the country, followed by another 1,000 next year.

COMMENT
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8. Although his frustration bubbled over at times, Bouteflika
largely kept to his remarks in what appeared to be an effort
to convince Algeria's walis to take a larger stake in the
nation's economic development. Bouteflika's offer of an
additional USD 2 billion -- with wide latitude on how the
funds could be spent -- came on the strict condition that the
walis do a better job of choosing appropriate projects that
the Algerian people needed, and implementing them in a
transparent, cost-effective manner.


9. Bouteflika did not limit his high expectations to the
walis. He clearly laid out the responsibility of the central
government to coordinate the role of various actors in the
development process; equitably allocate national resources;
and promote employment and investment within an adequate
judicial and administrative framework. Bouteflika was
explicit that he would hold his ministers to the same high
standards as the walis, at one point jabbing that "whichever
(minister) wants to assume his duties, we support. And
whoever does not want to assume his duties, he should quite
frankly tell us and leave. We have plenty of youth who can
assume the responsibility."

ERDMAN