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