ALGERIA - FY2010 BUDGET TRANSPARENCY REPORT

UNCLAS ALGIERS 000076 SENSITIVE SIPDIS DEPARTMENT FOR EEB/IFD/OMA BSAUNDERS, NEA/MAG JHPATTERSON, NEA/RA BMGRIMM E.O. 12958: N/A TAGS: AID EAID ECON EFIN PREL SUBJECT: ALGERIA - FY2010 BUDGET TRANSPARENCY REPORT REF: STATE 81177 ¶1. (U) In response to reftel questions, post submits the following information. ¶2. (SBU) The Algerian central government is expected to receive a portion of U.S. foreign assistance using FY10 funds. The USG has allocated USD 950,000 for IMET funding and USD 950,000 for Nonproliferation, Anti-Terrorism, Demining and Related Programs (NADR),which includes USD 150,000 for the EXBS program, USD 400,000 for Antiterrorism Assistance Program, and USD 400,000 for counterterrorism financing. All this funding is for training of GOA officials. The USG provides additional funding to private implementers for programs that benefit the central government. In this regard, the Algerian central government will benefit from funding of programs in the Middle East Partnership Initiative (MEPI) in the form of grants to implementers such as the American Bar Association, the National Conference of State Legislatures, and the National Democratic Institute. ¶3. (SBU) Algeria's budget is publicly available. The government's budget plans are announced each autumn for the following calendar year and debated in parliament. The finance law (the budget law) is published in the Official Journal in early January. A report of the finance law, including policy narratives, year-to-year comparisons, and other fiscal data, is available on the Ministry of Finance website. The 2010 budget can be found on the following website - http://www.joradp.dz/HFR/Index.htm. In addition, Algeria frequently publishes an amended budget (comparable in some ways to a U.S. supplemental budget),called the complementary finance law, in July. In 2009, the complementary finance law was adopted by decree on July 22, 2009 and published in the Official Journal. ¶4. (SBU) Revenue and expenditure figures are made available publicly through the regular finance law and any subsequent complementary finance laws and are believed to be generally accurate. Separate budgets are released for salaries and for public benefit pay-outs (such as veterans' pensions) at each agency (the "budget de fonctionnement" or operations budget) as well as for broad categories of capital investments and equipment costs (the "budget d'equipement" or procurement budget). Revenues are reflected in terms of "ordinary" categories, such as taxes, customs, and royalties, and in the larger category of receipts from oil and gas sales. A portion of petroleum receipts is still diverted to the stabilization fund, a fund designed to shelter excess assets and reduce inflationary pressures in the economy. This process makes accounting for these revenues more complex. ¶5. (SBU) A factor in budget transparency is the finances of large state-owned companies, whose revenues and expenditures form a large part of the national budget. This includes especially the oil and gas monopoly Sonatrach. At the end of each year, the Government of Algeria (GOA) publishes an annual financial report drafted by the General Tax Administration (DGI) in the Ministry of Finance that incorporates information from complete financial reports submitted by each government ministry and by all companies, public and private. That central government report is available on demand. Large public companies, such as Sonatrach and the national gas monopoly Sonelgaz, publicize their financial reports every year, contributing to the transparency of the national budget. ¶6. (SBU) Post is unaware of events that affected fiscal transparency since the 2009 review, and there have been no visible efforts made by the host government to improve fiscal transparency. ¶7. (SBU)In the past year, post has not implemented a strategy to promote such efforts and has not created an action plan to work with the host government on improving fiscal transparency. PEARCE