Oct 5, 2011 - EMMA/CNRS Communication / University of Tunis, Sousse. ...... between the government, the general union of Algerian workers (UGTA), and ...
Last revision: October 5, 2011
2010
Young, educated and unemployed: a review of Algeria’s labour market reality Nacer-eddine Hammouda
Contents Page Introduction ............................................................................................................................................... 5 1.
Overview of the Algerian labour market ........................................................................................ 6 1.1. 1.2. 1.3. 1.4. 1.5. 1.6.
2.
Increasing demographic pressures ........................................................................................ 6 Labour force participation, employment, unemployment, and inactivity ............................. 7 Labour market segmentation .............................................................................................. 13 Education and training ........................................................................................................ 14 Wages and working conditions ........................................................................................... 17 Employment in the informal economy ............................................................................... 19
Labour market policies, programmes and institutions .................................................................. 22 2.1. 2.2. 2.3. 2.4. 2.5. 2.6.
Labour legislation and administration ................................................................................ 22 Active labour market policies ............................................................................................. 24 Passive labour market policies ............................................................................................ 28 Equity and accessibility ...................................................................................................... 30 Social dialogue.................................................................................................................... 30 Employment services .......................................................................................................... 32
Conclusion ............................................................................................................................................... 34
iii
Introduction Following a decade of low economic growth in the 1990s, Algeria grew at an average annual rate of close to 4 percent during the 2000s, which contributed to certain improvement in the employment situation as unemployment rates declined. However, Algeria’s labour market faces several important challenges. First, demographic trends are putting pressure on the labour market. The average annual growth of the labour force over the last ten years has been around 1.9 percent while the growth of the population as a whole has been 1.5 percent, meaning the labour market has seen a persistent increase in the number of jobseekers. Since the early 1990s, the labour market has been characterised by a rapid increase in the female economically active population that is expected to continue in the near future. Between 1990 and today, the female economically active population has more than tripled. 1 However, when compared to their male counterparts, female participation is very low. Second, the employment situation has improved quantitatively, but the quality of jobs created remains low. Employment deteriorated between 1986 and 1990 due to economic difficulties, but has improved since. The employed population increased from around 4.7 million in 1990 to 6.2 million in 2000, and stood at 9.7 million in 2009, representing the creation of over 3 million new jobs in less than a decade. The main employment trends have shown a decrease in the share of agriculture within total employment, the overall dominance of the tertiary sector and a decline in wage employment. Third, despite the steady decline in unemployment, it remains one of the main challenges of Algeria today. Albeit a steady decrease from 29 percent in 2000, 15.3 percent in 2005 to 10 percent at the end of 2009, unemployment among women and youth currently remain high at 19 and 21 percent respectively. Furthermore, those with higher levels of education present higher unemployment rates particularly young people. The mismatch between the aspiration of graduates as well as their educational outcomes and the job opportunities available is a devastating phenomenon. This is an indicator of important institutional ineffectiveness as well as serious structural productive challenges. Lastly, the informal economy has a dynamic of its own and has continued growing steadily since the 1990s. This development may be explained by the inability of the formal economy to create new jobs combined with a massive arrival of young people into the job market. While data on informality is scarce, estimates show that the share of the informal economy in the non-agricultural private sector has risen from 59.1 percent to 75.6 percent. Between 1997 and 2005 the number of informal workers in the nonagricultural sector rose from an estimated 1.2 million to 2.8 million, representing a significant increase in the share of informal employment in total employment (from 21.9 percent in 1997 to 35.8 percent in 2005). The Algerian government has not remained insensitive to these challenges. The 5year economic and social pact adopted in 2006 contributed to social peace. The civil service pay scale has also been revised to reduce demands for higher pay. The existence of a minimum wage serves several economic and social purposes. A new Labour Code
1
See ILO Economically Active Population Estimates and Projections 1980-2020 http://laborsta.ilo.org/STP/guest
5
containing all the texts in a more simplified format should allow for an improved understanding of the current legislation. There is a commitment to improving the capacity of the government institutions, in particular reorganising the General Labour Inspectorate and the National Employment Agency (ANEM). The modernisation of the ANEM is an important priority for the Algerian Government and the management of a new active labour market intervention introduced in 2008 is a key issue. Furthermore, employment promotion is a main concern of the Action Plan to implement the President’s Programme (2009–2014). 2 The Action Plan foresees the creation of 3 million jobs, an average of 400,000 jobs per year and places particular emphasis on the youth population. For this purpose, an Action Plan to promote employment and to combat unemployment (2009–2013) 3 has been adopted. Youth employment is one of the key priorities of the Algerian Government, and a major area of intervention of the action plan and specific measures have already been envisaged. 4
1.
Overview of the Algerian labour market 1.1. Increasing demographic pressures Algeria’s population more than tripled between independence in 1962 and 2008, standing at 35.1 million in January 2008. The natural growth rate remained over 3 percent per annum between 1962 and 1985, but declined since, reaching 1.9 percent per year in 2008. Life expectancy in 2008 was 75.7 years, 16 years longer than in 1980. Women have a life expectancy of 76.6 years, slightly higher than the one for men (74.9 years), matching the universal trend for female longevity. The present demographic structure is favourable in terms of the level of dependence of the young population (below 20 years of age) and the elderly population (60+) in relation to the working age population. In 1998, the share of those below 20 was less than half of the total population for the first time since independence. Since then this proportion has diminished even further, reaching 38.8 percent in 2008. The population of those 60+, on the other hand, increased rapidly in the period 1987–2008, reaching 7.4 percent of the population in the latter year. Fertility has drastically declined since the 1960s and according to United Nations population prospects will continue declining. However, a recent phenomenon which is expected to impact the number of labour market entrants from 2015 onwards is the slight increase in the birth rate observed since 2000 as a result of the baby-boom generation reaching marriageable age. New births rose from 589 thousand to 817 thousand in 2008, after having declined between 1985 and 2000. This trend is expected to continue given the unprecedented increase in the number of marriages between 2000 and 2008.
2
Plan d’Action du Gouvernement pour la mise en oeuvre du Programme du Président de la République, http://www.premier-ministre.gov.dz/images/stories/dossier/Plan_action_2009_fr.pdf. 3 67 Algeria Action Plan to promote employment and combat unemployment (2009-2013), http://www.mtess.gov.dz/mtss_fr_N/emploi/2008/OBJECTIFS%20ET%20AXES%20DU%20PLAN %20D'ACTION.pdf. 4 Quatrième axe du plan d’action pour la promotion de l’emploi et la lutte contre le chômage. La promotion de l’emploi des Jeunes, in: www.mtess.gov.dz/mtss_fr_N/emploi/2008/PROMOTION%20DE%20L'EMPLOI%20DES%20JEU NES.pdf.
6
1.2. Labour force participation, employment, unemployment, and inactivity Labour force participation Over the last ten years the labour force has grown by an annual average of around 1.9 percent against a growth in the total population of 1.5 percent. As we can see in table 1, labour force participation rates have slowly increased over the past decades, resulting in a substantive increase in the number of new jobseekers. Male participation rates fall within average parameters. However, despite increases, female participation is extremely low. Table 1: Labour force participation rate, total and by gender (in percent) 2003
2004
2005
2006
2007
2008
2009
2010
Total (15+)
39.8
42.1
41
42.5
42.5
40.9
41.4
41.7
Women (15+)
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
13.9
14.2
n.a.
n.a.
n.a.
n.a.
n.a.
68.7
68.9
Men (15+) n.a. Source: ONS, Algiers.
Young people display a low participation rate (about 46.5 percent for the age bracket 15-24), possibly due to the longer time spent in education and training. Between the ages of 30 and 49 male participation is at its peak of 90 to 95 percent. At age 50 this rate begins to decline although the retirement age is set at 60 for wage-earners. Female participation in the labour force has grown in the past decades but remains at low levels. The share of women in the total labour force was 4.3 percent when the first census took place in 1966; by 2010 their share had only risen to 14.2 percent. At the same time, in 2010 women accounted for 15.1 percent of the total number of employed persons and 19.1 percent of the total number of jobseekers. All this can be attributed to substantive gender inequalities in the labour market. The level of women’s education is an important determinant of their rate of participation (Figure 1), and this in turn is associated with their social environment. Women in cities are more likely to participate in the labour force than those living in rural areas, with the exception of women who have no education at all. Figure 1: Labour force participation rate of women by educational level in 2006 (percent) Higher education Secondary school Middle school
Rural areas
Primary school / literacy
Urban areas
No schooling 0
5
10
15
20
25
30
35
40
Source: Employment survey 2006, ONS, Algiers.
In spite of substantive progress in terms of school attendance of both compulsory basic education and secondary and higher education, unfavourable labour market conditions have not allowed for substantive increases in female labour force participation. Moreover, there is evidence that the female labour force is underestimated,
7
particularly in rural areas. 5 Furthermore, projections foresee substantive increases in female educational attainment. This trend combined with postponement of marriage and a dramatic fall in the birth rates 6 will substantively increase the number of women actively participating in the labour market. Furthermore, a longer life expectancy 7 may exert further pressure on the labour market. In the absence or low level of transfer incomes older people may have to continue working later in life in order to afford a living. Poverty and the large informal economy will imply that people will continue to work as long as they are physically able. Given that women have longer life expectancy than men, this may mean longer periods living in poverty. Employment Employment increased rapidly between 1970 and 1984 due to the implementation of job creation schemes but slowed down in the second half of the 1980s in response to the economic crisis. Since 1990, employment rose from 4.7 million to 6.2 million in 2000. In 2010 it stood at 9.7 million, representing an increase of 5 million jobs in two decades. Table 2: Male and female employment, 2003 – 2010 (in thousands of persons) 2003 2004 2005 2006 2007 2008 Male
2009
2010
5751 6437 6869 7372 7248 7 718 8 025 8261
Female 933 1360 1173 1497 1348 1 428 1 447 1474 Total
6684 7797 8042 8869 8596 9 146 9 472 9735
Source: Results of ONS employment survey 2003 - 2008
The participation of agricultural employment in total employment has fallen, ceding ground to the dominance of the tertiary sector in general and administration in particular. In 2010, the service sector takes up over half of overall employment (55.2 percent) followed by construction and public works (19.4 percent), industry (13.7 percent) and finally agriculture (11.7 percent). The increase in employment has been observed mainly in urban centres and among the male population. Urban areas account for about 60 percent of jobs and in both urban and rural areas the majority of people and particularly women are employed in the service sector.
Table 3: Employment population according to sector and urban/rural, 2010, in thousands Men
Women
5
Total
Charmes and Musette, 2002. EMMA/CNRS Communication / University of Tunis, Sousse. Tunisia. According to UN population prospects, total fertility (children per women) declined from 7.4 in 1970-75 to 2.1 in 20102015 and it is foreseen to fall to 1.66 children per women in 2045-2050. Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision, http://esa.un.org/unpd/wpp/index.htm, Accessed Monday, August 29, 2011 7 According to UN population prosects, life expectancy has increased from 54.5 in 1970-75 to 73.5 in 2010-215 and it is expected to increase to 79 years in 2045-2050. Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision, http://esa.un.org/unpd/wpp/index.htm, Accessed Monday, August 29, 2011 6
8
Urban Agriculture Industry Construction & public works Services Total urban Rural Agriculture Industry
Total
In %
Total
In %
Total
In %
268 673
5.1 12.9
19 301
1.7 26.7
287 974
4.5 15.3
1112
21.2
20
1.8
1132
17.8
3182 5234
60.8 100
786 1126
69.8 100
3968 6360
62.4 100
773
25.5
76
21.8
849
25.1
251
8.3
112
32.2
363
10.8
Construction & 748 public works Services 1254 Total rural 3027 Total urban and rural Agriculture 1040
24.7
5
1.5
754
22.3
41.4 100
155 348
44.5 100
1409 3375
41.8 100
12.6
95
6.5
1136
11.7
Industry
924
11.2
413
28
1337
13.7
1860
22.5
25
1.7
1886
19.4
4436 8261
53.7 100
941 1474
63.8 100
5377 9735
55.2 100
Construction & public works Services Total
Source: ONS
Employment rates are higher for men than for women. Despite increases in female employment rates, in 2010 the female employment rate was estimated at 11.5 percent compared with 63.3 for men. Employment rates of young people (15-24) have shown a slight improvement over the last years. The number of young people in employment rose substantially between 2003 and 2007 (from 1.2 million in 2003 to 1.6 million in 2007) distributed more or less equally among genders. Nevertheless the youth employment to population ratio in 2010 remains low (5.6 percent for young women and 22.1 percent for young men) Rising education levels The educational attainment of the labour force has substantially increased, and available data on the structure of employment by educational level (Figure 2) shows certain improvements. While there is certain improvement for those with higher levels of education, these improvements are not very significant. That is, less than 15 percent of those employed have higher levels of education. In contrast, those with lower levels of secondary education and primary education present the highest levels. Figure 2: Structure of employment, by educational level, 2004 – 2007 35 Higher education
30 25
Secondary school
20
Middle school
15 10
Primary school / literacy
5 0
No schooling 2004
2005
2006
2007
Source: ONS employment survey 2004 -2007.
9
The slight improvement noted in the graph above is due to the improved educational level of female workers. Figure 3 suggests an improvement in the educational and labour market situation of female workers. A breakdown of the educational level of employed women shows that in 2004, women with no education represented the largest share of the total, at 23 percent, whereas women with higher education were less than 20 percent of the employed. By 2007, women with higher education were the largest group, accounting for more than 30 percent of the total. Women with no education at all had fallen to less than 15 percent. The qualitative improvement of the female labour force is particularly due to the entry of the young and highly educated women in the labour market. Figure 3: Educational level of employed women 2004 – 2007 Higher education
2007
Secondary school
2006
Middle school
2005
Primary school / literacy No schooling
2004 0
10
20
30
Source: ONS Employment survey 2004 – 2007
Unemployment Unemployment has remained high, pointing to another weakness of the Algerian labour market. Since 2003, unemployment has showed a decreasing trend from 23.7 percent recorded that year to 11.3 percent in 2008 and to 10 percent in 2010. This was due to a decline in male unemployment. The number of unemployed men fell by 1 million persons between 2003 and 2010 (from 1759 thousand to 729 thousand). Unemployed women, however, slightly increased by 30 thousand (from 318 thousand to 348 thousand). Table 4: Male and female unemployment, 2003 – 2010 (in thousands of persons) Male
2003
2004
2005
2006
2007
2008
2010
1759
1371
1199
988
1072
868
729
Female
318
301
249
253
303
301
348
Total
2078
1672
1448
1241
1375
1169
1076
Source: Results of ONS Employment survey 2003 -2008
With regard to the area of residence, urban areas showed the highest rate of unemployment in 2010, at a rate of 10.4 percent compared to 8.7 percent in rural areas. Male rates are higher than for females and the highest unemployment rate is that of men in rural areas. The low levels of female unemployment, however, are largely due to their very low levels of participation in the labour market. Table 5: Total, urban and rural unemployment rates by sex, 2010 (in percent) Urban Women
Men
Rural Total
Women
Men
10
Total Total
Women
Men
Total
8.6
18.8
10.6
7.2
20.1
8.7
8.1
19.1
10.0
As illustrated in figure 4, youth is strongly affected by unemployment particularly when compared to their adult counterparts. 8 Despite the gap between adult unemployment (age 25-59) and youth (age 16-24) narrowed considerably in the last years (falling from nearly 29 points in 2003 to 16 points in 2009) youth unemployment is three times higher when compared to their adult counterparts. In 2010 youth unemployment stood at 21.5 percent compared to 7.1 percent for the adult population. Youth unemployment is particularly high for young women, 37.4 percent compared with 18.6 per cent for young men. The gender gap in the unemployment rate is also much higher for young people than for adults (over 20 percentage points for youth and 10 percentage points for adults). Figure 4: Youth and adult unemployment rate, 2003 – 2009 (in percent) 50 45 40 35 30 25 20 15 10 5 0
National Adults Youth
2003
2004
2005
2006
2007
2008
2009
Source: Results of ONS Employment survey 2003-2009.
Unemployment levels by educational attainment reveal that the Algerian economy functions mostly with low skilled employment. As we can see in the graph below, those with secondary and higher levels of education suffer the highest levels of unemployment. Those without education, instead, show an unemployment rate of less than 5 percent. This issue is particularly acute for young people. For the same period (2004-2007) those without any education presented unemployment rates close to zero while those with secondary education had unemployment rates above 50 percent. 9 Figure 5: Unemployment rate by educational attainment, 2004 – 2007
25
Primary Secondary and higher
No schooling Middle school
20 15 10 5 0
8 9
2004
2005
2006
2007
See report on Youth Employment in Algeria, ILO, 2009. N. Hammouda. Unpublished See report on Youth Employment in Algeria, ILO, 2009. N. Hammouda. Unpublished
11
Source: Employment survey 2004 - 2007, ONS Algiers
Inactivity In Algeria the four mains reasons for inactivity are related to disability, educational enrolment, women working at home and retirement. The proportion of people with disabilities is low and has remained relatively stable over time. Enrolment in education essentially concerns youth. It may be longer or shorter depending on the individual and the period under consideration. A survey done in 2001 revealed that there is a sizeable student working population, particularly during vacation periods (Table 6). Table 6: Share of students of higher education with a remunerated job, by gender Remunerated work Vacation work During the university year, part time Permanent remunerated work Source: MESRS-CREAD 2001
10
M 40.5 8.9 5.5
F 9.3 3.0 3.1
Total 24.6 5.9 4.3
Algiers
Household work affects women who stay home, estimated at over 7 million in 2008. These women are classified as inactive, although their ‘production’ has been estimated to range between half to three quarters (depending on the method used) of GDP. 11 This group also holds an important reserve for the labour force. In 1985 a survey quantified this reserve asking inactive women who were not students if they were prepared to go to work and under what conditions. An estimated 200,000 declared that they would like to work; of these, slightly over half said they would like to do so under certain conditions (distance, labour conditions, etc.) and the other half (42 percent) would like to do so unconditionally. Currently, their number reaches 500,000. Pensioners include those that benefit from a retirement, accident or widowhood pension including Chahid widows. 12 This group consists mainly of elderly persons. Pensioners who have a paid job are considered employed. In contrast, pensioners who are seeking remunerated employment to complement their income are not classified as unemployed if they are over the age of 60. Other inactive population includes persons for whom the reasons for inactivity are unknown and include discouraged workers, workers in the informal economy as well as young persons who have been excluded from the educational system. Overall, this group is comparatively young and their number varies between one and two hundred thousand. Thus, this group forms a manpower reserve. The largest group of the inactive population are women. The employment surveys of 2004 and 2006 focusing on inactive women found that a certain number declared that they had worked in the past. Inactive women who had engaged in commercial activity (vendors) in the past had worked for an average of 74 months; 70 months in urban areas and 87 months in rural areas. Overall, they started work very young: 45.4 percent began to work as vendors before the age of 20 and 75.6 percent before the age of 24. They were also still young when they left work: the average age of women that started work was 21 and they left employment at age 26. These findings pose
10
CREAD survey on behalf of MESRS on a sample of 2,190 students, April 2001 ATSAMENA Akila and LALLAM Ratiba “La Contribution des femmes à la production nationale élargie” 195p, Mémoire d'ingénieur d’état en planification INPS Sept 1991. This work was updated in 2004 at the time of preparation of an engineering paper supervised by N. Hammouda. 12 Chahid, Arabic word for those who died in the protests of the Algerian Revolution (1954 - 1962). 11
12
an interesting question regarding the decision of these women to stop their commercial activity at a prime time when they were beginning to gain experience and skills. Data suggests that this may be due to a change in marital status. Data from 2006 indicate that out of the total of unmarried women at the start of their activity, 69 percent were married by the end of their period of activity. This trend is more notable in rural areas where 70.8 percent were married by the end of their active period compared to 69.2 percent in urban areas. The fact of having young children does not seem to prevent married women from working as vendors: 76.9 percent of married inactive women who had previously worked had children when they started work. The nature of their job and especially the location mean that the number of children they have does not stop women from carrying out this activity. Inactive women who had worked in the past, particularly in rural areas, usually worked from home, which enabled them to look after their children at the same time. Nearly 40.3 percent of women who had had a job as vendors in the past had worked from home: 35.3 percent in the cities and 53.8 percent in rural areas.
1.3. Labour market segmentation The Algerian labour market is highly segmented (Table 7). For the analysis, the employed population has been broken down into eight segments under three categories. In the first category, employment has been divided into agricultural (segment 1) and nonagricultural employment. In the second category, non-agricultural employment has been broken down into public and private sector employment. The public sector has been divided into those working in administration (segment 2) and those working in national enterprises (segment 3). Private sector employment has been divided into those dedicated to household work (segment 4) and wage earners and the self-employed. 13 In the third category, the self-employed have been divided into those who direct formal firms (segment 5) and informal ones (segment 6). Private sector wage earners have been divided into wage earners declared to social security (segment 7) and those who remain undeclared (segment 8). Between 1997 and 2005 agriculture contributed more than the non-agricultural sector to job creation, with agricultural employment growing at an average annual rate of 5.8 percent, compared to 4.4 percent for non-agricultural employment. However, agricultural employment has stagnated in recent years, reducing its share within the total. Agricultural workers are younger in general and have migrated to the cities searching better job opportunities. Table 7: Employment by segment 1997 – 2005 (thousands) Segment N° 1
Type Agricultural employment Non-agricultural employment Public sector
2
13
Administration
830
15.3
1'305
16.7
475
57.2
Average annual growth rate 5.8
4'614
84.8
6'516
83.3
1'902
41.2
4.4
2'599
47.7
2'817
36.0
218
8.4
1.0
1'362
25.0
2'012
71.4
650
47.7
5.0
Difference Cumulative 1997 Weight 2005 Weight (2005-1997) growth
Given the small size of segment 4 it could be included in self-employment.
13
3
National enterprises Private sector
4
Domestic employment Self-employment
1'237
22.7
804
28.6
-433
-35.0
-5.2
2'016
37.0
3'699
47.3
1'684
83.6
7.9
159
2.9
202
2.6
43
27.1
3.0
1'147
21.1
1'667
21.3
520
45.4
4.8
5
Formal self-employment
579
10.6
488
6.2
-91
-15.7
-2.1
6
Informal self-employment
568
10.4
1'179
15.1
611
107.7
9.6
709
13.0
1'840
23.4
1'121
158.0
12.6
Wage earners 7
Declared wage earners
244
4.5
413
5.3
168
68.8
6.8
8
Undeclared wage earners
465
8.5
1'417
18.1
952
204.9
15.0
5'445
100.0
7'821
100.0
2'377
43.7
4.6
Total employed Source: ONS Employment survey 1997 and 2005
The jobs created in the non-agricultural employment segment owe more to the private than the public sector. While private sector employment expanded by close to an average of 8 percent per year between 1997 and 2005, public sector employment only did so at an annual rate of 1 percent. Within the public sector, employment was generated exclusively in administration, with an average annual growth rate of 5 percent and accounting for a total of 650 thousand jobs between 1997 and 2005. In other words, public administration generated about by 81,000 jobs per year, of which 16,000 were temporary. This has been the main source of employment for university graduates (two thirds) and to a lesser extent of secondary school leavers (one third). This growth is linked to growing demand for social services (education, health, social security). But recruitment of young people into the public administration services is declining substantially. Recruitment for jobs in this sector begins at age 25 and most likely involves those who have acquired initial work experience in temporary jobs. Public administration is also the main employer of women. Public employment in enterprises fell during the period of analysis, posting an average annual contraction of 5.2 percent. In the private sector segment, wage employment consists mainly of jobs that are undeclared to social security. This form of employment increased at an average annual rate of close to 15 percent during the period under analysis. The number of undeclared workers has risen even among those over 55 years of age, raising concern regarding the employment of older persons. Jobs declared to social security rose at a slower rate, by 6.8 percent per year on average. Self-employment augmented on average by 4.8 percent per year. This was entirely explained by a pronounced growth of employment in the informal economy, which increased by 9.6 percent per year. Instead, self-employment in the formal economy declined between 1997 and 2005, falling at an average annual pace of -2.1 percent. Recently, there seems to have been a reversal in the flows from rural to urban areas, as urban dwellers return to agricultural work. However, it is important to note that some of the rural districts were reclassified as urban areas in 1997 at the time of the 1998 census.
1.4. Education and training The education system in Algeria over the past years has been characterized by notable growth in the number of children attending school. This is due to the rather fast rate of overall population
14
growth (allowing for large cohorts of children) combined with large scale investment in school infrastructure that has been possible due to the financial and budgetary capacity of the country. In 2008, public expenditure on education was 4.3 percent of GDP and 20.3 percent of total government expenditure. Participation in education has substantially increased in the last decades and gross enrolment rates for the three levels of education are higher than the regional average. However, these rates are noticeably lower in rural and mountain areas and in particular for girls in these areas. It is also interesting to note that at secondary and tertiary levels of education female enrolment rates are higher than for men (Table 8). Literacy rates have also substantially increased and these are quite high particularly for youth. However, female literacy is lower than for men and despite progress is quite low for adult women (Table 9). Table 8: Gross enrolment rates (GER) 14 1991 1999 2009 MF 96 105 108 Primary M 103 110 111 F 88 100 104 MF 60 75 96 M 67 73 96 Secondary F 53 77 97 MF 11 18 31 Tertiary M n.a. n.a. 25 F n.a. n.a. 36 Source: Unesco statistics, 2011 http://stats.uis.unesco.org/
Table 9: Youth and adult literacy (in percent) 1987 2006 MF 49.6 72.6 Adult literacy (15+) M 63.4 81.3 F 35.8 63.9 MF 74.3 91.8 Youth literacy (15-24) M 86.2 94.4 F 62.2 89.1 Source: Unesco statistics, 2011 http://stats.uis.unesco.org/
Two important trends that have been characteristic of the education sector since the 1990s are the low levels of male enrolment rates as well as the increasing rate of school dropouts at all levels of education. According to the National Economic and Social Council 15 dropout rates are high among children aged 6-15 and even higher among the 16-19 year-olds. University dropouts during the first year are estimated at about one fifth (lower for men than women). This means that each year about half a million young people drop out of
14
GER is the number of pupils enrolled in a given level of education regardless of age expressed as a percentage of the population in the theoretical age group for that level of education.
15
Report by the national economic and social council (CNES), Algiers, on training and employment, p. 27, 2001
15
school, of which fewer than half go into vocational training. Vocational training attracts very few young people as it is perceived to be designed solely to fill the gap left by dropping out of school and therefore not being very useful in terms of labour market outcomes. The enrolment in vocational training has steadily fallen from 19.2 percent in 1970 to just over 10 percent in 2007. An important difficulty encountered by Algeria is how to establish the needs of the labour market in terms of skills and qualifications and establish the linkages between education and the labour market. Vocational training Vocational training in Algeria refers to in-house training 16 and apprenticeship. The number of students receiving in-house training has continued to grow, confirming this is an important option for a large number of students that would otherwise be excluded from the educational system. The number of students in in-house training rose from 128 thousand in 1996 to 211 thousand in 2006. Training by apprenticeship is undertaken jointly by the employer and the Centre for Professional Training and Apprenticeships (CFPA), which is in charge of the theoretical aspects of training. Throughout the duration of an apprenticeship, the employer is exempt from taxes and social contributions on the wages paid to the apprentice. The number of apprentices increased over the last few years from 104 thousand in 1997 to 202 thousand in 2006. Initially, when this format was first introduced, employers showed a certain lack of interest but over time they have become aware of the advantages for them and have developed interest in this type of initiative. The dropout rate, however, is quite high about 12.6 percent as a national average. Dropouts in rural areas are even higher due to a shortfall between the training available and the needed requirements, and inadequate information and counselling of the candidates. A high number of vocational training candidates refuse to undertake training in occupations in demand of trainees such as construction, crafts and all other manual work and they wish to undertake training in occupations related to new technologies and services. Encouraging trainees to undergo training in occupations in demand by the labour market remains an important challenge. An evaluation 17 of the vocational training system showed that there was a relative loss of prestige for vocational training tracks, stagnation in the classification of the fields of study and a high concentration of trainees in a small number of branches. According to the study the sector suffers from the low level of the training provided due to teachers’ low qualification level - only 27 percent of them are specialised vocational education teachers, and the deterioration in the student-teacher ratio due to a lack of teachers (40 percent of positions are filled by temporary staff). The reform which began in 2006 seeks to alleviate this situation to improve the system’s internal and external outputs and train young people who have dropped out of the general education system, and to ensure a better correspondence between training and employment.
16 17
“Formation residentielle”, in French: When both, theoretical and practical training takes place in the enterprise. Source AfDB/ OECD 2008 African development outlook: http://www.oecd.org/dataoecd/14/40/40573850.pdf
16
1.5. Wages and working conditions Statistics on wages are scarce. The last survey on employment and wages carried out by the ONS dates back to 1996. In 2009, this survey was re-launched among companies, providing limited information as it only records average wages. Another potentially rich, yet underutilized, administrative source is the pay declaration made by employers to CNAS. 18 At the macroeconomic level, the National Account System provides a breakdown of household income, distinguishing between wage and non-wage income, and between major sectors of activity. Patterns and trends in the total employee compensation 19 Over the period 2001-2006, the total compensation of employees (EC) increased by an annual average of 9 percent, with 6.3 points coming from changes in wage employment. 20 The most substantive increase has taken place in the private sector (11.2 percent compared to 7 percent for public enterprises and 8.6 percent for the civil service), which modified the structure of total compensation: private enterprise gained 3 percentage points, reaching 32 percent in 2006, while public administration decreased slightly but continued to be significant at 46 percent), and public enterprise also slightly declined standing at 22 percent in 2006. Compared to the evolution of value added (VA), increases in the total employee compensation have been smaller, revealing a persistent fall in the ratio EC/VA both in the private sector (falling from 17.2 to 15.5 percent) and in the public sector (declining from 13 to 7.8 percent). The share of employee compensation in value added is not only weak but has also decreased. A comparison of the public and private sectors is somewhat misleading since public sector performance is strongly linked to oil and in the private sector compensation of self-employed comes from operating surplus. Trends in employee compensation have been characterized by a decline of its weight in the national disposable income. This decline registered between 2001 and 2006 benefitted net profits, which are the return on capital and whose participation in the national disposable income rose by nearly 10 percentage points, reaching 66 percent of national disposable income. In relation to GDP the share of employee compensation was 23 percent in 2001 and 17.7 percent in 2007. By way of reference, this ratio was nearly 50 percent in 2005 for the entire euro zone (average). Similarly the share of employee remuneration in gross household income 21 also shows a downward trend (35.5 percent in 2001 and 34.5 percent in 2006), to the advantage of independent workers whose share rose by 1.4 percentage points to reach 45.3 percent of gross household income. Related to changes in employee
18
http:// www.cnas.dz. Last published data is from October 2006.
19
Employee compensation is defined as the total remuneration in cash or kind payable by an enterprise to an employee in return for work done by the latter during the accounting period. It has two main components: Wages and salaries in cash or in kind and the value of the social contributions payable by employers. See Measuring Globalization: OECD Economic Globalization Indicators, OECD, 2005. 20 With an annual average inflation rate of 2.3 percent, the purchasing power of wage earners went up by 0.2 percent per annum between 2001 and 2006. 21 Gross household income = total employee remuneration + income from private enterprise and individuals + financial transfers (government, social security and other transfers).
17
remuneration, the share of household consumption in GDP has also gone down, from 43 percent in 2001 to 32 percent in 2006. The main conclusion that can be drawn from employee remuneration trends is that wage earners benefitted less from the favourable economic situation compared to selfemployed (the participation of their income in the gross household income having gone up) and the holders of capital (rise in the participation of operating surplus in the available national income). The weak participation of employee remuneration in the creation of wealth (available national income) indicates low wage levels. The weakness of the unions and the weak role played by collective agreements have reduced employees’ bargaining power and thereby certainly contributed to this downward trend. Declared wages The number of employees that reported to CNAS in 2006 was 2.5 million, of which only 18 percent were in the private sector (445,000 workers, representing barely 7 percent of the total employment estimated by ONS for this sector in the same year). Private sector contributions to social security were at 15 percent in 2006. The gross average declared wage (combining all sectors) is estimated at 21,844 DA per month (about US$300), or 2.2 times the Algerian minimum national wage (SNMG). The public enterprise sector has the highest average (24,872 DA), followed by administration (20,770 DA) and the private sector (17,841 DA). The gaps become greater depending on the branch of activity. In the private sector, where the services and oil sectors pay the highest wages (nearly 73,000 DA), the difference between the highest and lowest average wage (leather industries) is a ratio of 1 to 6.7, while the ratio is 1 to 4.3 in administration and 3.7 in public enterprise. Compared to 2005, the total average wage rose in 2006 by 11.4 percent. Allowing for inconsistency in the basic CNAS data, with a rate of inflation of 2.1 percent (inflation in the first 10 months of 2006), the purchasing power of the average declared wage has improved by over 9 percent. This improvement is led by public administration, where the average wage increased by 16.4 percent (14 percent rise in purchasing power), a consequence of the negotiated rises. Public and private enterprises had a poorer performance in terms of purchasing power (7 percent each, giving a 5 percent rise in purchasing power). Working conditions Data on labour conditions is also limited. In 2005 a survey was conducted on a small representative sample of competitive companies with 10 or more employees. 22 This segment only represents 14 percent of total employment as it does not include agriculture, administration, the big monopolies, or microenterprises. The survey revealed the existence of several forms of pay discrimination, particularly towards women and uninsured workers. There is also limited information regarding the number of hours worked. For accidents at work or occupational illness CNAS publishes only annual statistics related to declared employees.
22
ROSES survey (2005) in the context of the FEMISE programme.
18
Given the lack of regular surveys on working conditions, the partial results presented below are based on a survey conducted in 2005 23 on firms with 10 or more employees, which only represents 14 percent of employed. The main conclusions of the analysis were: the existence of difficult working conditions and prevalence of notable labour market flexibility that is reflected in the type of contracts, particularly for the less qualified workers. The survey on working conditions found that over 60 percent of workers experienced physical discomfort related to ergonomic problems. It also revealed that 80 percent of workers felt psychological discomfort related to work duties, the worst of which related to schedule controls. The survey also identified notable levels of disturbances, such as noise, dust, and dirt, affecting 45 percent of employees, particularly those with low levels of responsibility. Figure 6 shows the inverse relationship between the level of responsibility of workers within a firm and having an employment contract. The lower the level of responsibility, the less those workers had been employed with a contract: 80 percent of employees with managerial positions were employed with a contract vis a vis 55 percent of manual labourers. This may indicate a frequent practice on the part of firms which involves non declaration of these workers to social security services. Figure 6: Employment contract by level of responsibility Management First line supervisor Other Office clerk Apprentice Unskilled worker Skilled worker Manual worker 0
20
40
60
80
100
Source: ROSES survey, conducted in the context of a CREAD meeting on a proposed FEMISE programme, 2005 (EU) Report available on the FEMISE website.
1.6. Employment in the informal economy Until now, Algerian institutions have not adopted a definition of informality and no statistical survey has been carried out to evaluate the situation of employment in the informal economy. The weight of the informal economy in the Algerian economy as a whole remains unknown, particularly its contribution to GDP. Nevertheless, labour force surveys provide some indicators for an initial assessment. 24 An analysis of ONS data suggests that employment in the informal economy is concentrated in micro-enterprises, that is, firms with fewer than five employees. These micro-enterprises often rely on family members who do not have a recognised
23 ROSES survey, conducted in the context of a CREAD meeting on a proposed FEMISE programme, 2005 (EU) Report available on the FEMISE website. 24 See for example CREAD report on Informalisation of economies in North African countries, Supervised by Saib Musette & Jacques Charmes, Algiers, 2006.
19
employment status. This is fundamental for understanding the Algerian production system and represents the core difficulty of setting up adequate employment policies. Structural adjustment policies implemented in the 1990s contributed to atomizing the production system. A reduction in the number of public sector jobs and the restructuring of national enterprises added to this effect. These micro-enterprises account for more than half of industrial employment. This production system is hardly favourable for the employment of young university graduates. Regarding enterprise registration, available data shows that in 2006, more than 2/3 of the 2.8 million employers and self-employed essentially from the private sector were not registered in chambers of commerce. The share of non-registered employers accounted for approximately one quarter of the total and the share of non-registered self-employed, which is a considerably larger group, stood at more than 70 percent. Furthermore, in 2006, 53.1 percent of public sector employees and 69 percent of workers in the private sector were not affiliated to social security. 25 The highest shares of non-affiliation are among employees on temporary contracts and apprentices, of which 86.4 percent are not registered, followed by employers self-employed, of which 73.2 percent (68.5 percent for men and 92.7 percent for women) are not registered either. The majority of employees with permanent contracts are affiliated (about 34 percent are not). There is evidence that registration with social security increases with level of education and age. The size of the informal economy can be estimated in three different ways using the data below: Table 10: Estimated size of employment in the informal economy in Algeria 1997
2005
Non-agricultural jobs in the informal economy (thousands) % total employment % non-agricultural employment
1,192 21.9 25.8
2,798 35.8 42.9
% non-agricultural private sector
59.1
75.6
Source: Application of results of ONS employment surveys, Algiers, 1997 and 2005
The number of informal workers in the non-agricultural sector more than doubled between 1997 and 2005, representing a significant increase of jobs in the informal economy as a share of total employment. The participation of the informal economy in total employment increased from 22 percent to 35.8 percent within the same time frame. This general picture, however, conceals various realities. Employment in the informal economy exists for structural reasons, largely related with the need to reduce the costs of small and micro enterprises A marked characteristic is total or partial non observance of the social and fiscal regulations (non-payment of insurance contributions and tax, wages below the minimum, etc.) of these enterprises. The rationale behind this is that it allows microenterprises to reduce their costs, gain a comparative advantage in terms of cost flexibility, and thus increase their economic viability. This is claimed to compensate for inadequate financial reserves and limited
25
There are two social security schemes, CNAS and CASNOS, but comparison of the administrative data is not straightforward. Since 1992 ONS Employment surveys include a question about social security registration. However, it is likely that the survey data probably overstate the number of insured jobs.
20
access to credit, allowing them to face market fluctuations. Beyond a certain threshold and depending on the sector and business characteristics, microenterprises become more visible and therefore must meet their social and fiscal obligations. If a microenterprise grows and employs more workers, it adds to its costs and reduces its profits and flexibility. Thus to reduce the risk of bankruptcy, these businesses often choose to create a new establishment while maintaining the mode of operation (Marniesse and Morrisson, 2000; Hammouda, 2002). The cost of regulations and measures to counter the informal economy The cost of regulations, such as duration and number of registration procedures and granting of licences, impacts the establishment of non-exporting small and medium size businesses, as well as their activity during the first year (Djankov et al. 2002). In Algeria, the costs of starting up a business are high. Furthermore, it may take up to 2 years before a contract which has gone to litigation comes into force. Additionally, corruption and bureaucratic delays that increase the cost of entry into the market are not measured. Since the mid-2000s, the government has made substantive efforts to improve observance of rules providing incentives for the private sector. This presupposes improved coordination of central government decisions and improved capacity to deliver interventions. It also requires the involvement of the local authorities. Despite these efforts, there is evidence the business climate has not changed significantly. Other actions implemented by the government to regulate business activities more effectively include the introduction of a tax identification number, the establishment of a relationship between the trade register and the tax office meaning that in the case of fraudulent or illicit commercial practices sanctions are applied to the trade register, to the beneficiary and to the notary or any other person involved, stronger sanctions for offences against invoicing regulations, and the establishment of an inter-ministerial coordination committee to fight fraud and tax evasion, among others. Incentive measures for businesses revolve around more flexible procedures and simplification of the tax rules. In 2007, modalities for registering with the Chamber of Commerce became more flexible, with the number of documents required for registration decreasing from 12 to 8, and a substantial reduction since 2007 in the registry response time, which has fallen from at least 2 months to 24 hours. Nevertheless the formalities 26 remain numerous and complicated. Affiliation with the social security system (CASNOS) requires registration with the chamber of commerce or to have some other form of official authorisation. Furthermore, more flexible procedures concerning commercial rental agreements, especially regarding duration have been put in place. This is now set by common agreement between the parties, in a simple notary contract. The 1991 tax reform called for a reduction both in the number of taxes and in the taxation rate: the marginal tax rate on household income (IRG) fell from 70 percent in 1991 to 40 percent in 1999. The non-taxable threshold for wage earners corresponds to the minimum wage (SNMG). Furthermore, taxes went down from 18 different rates in 1991 to 2 rates in 2001. The corporate tax rate was halved, down to 25 percent by 2005. Business taxes are going down or being removed: the business activity tax (taxe sur l’activité professionnel - TAP) went down from 2.55 percent to 2 percent in 2001, the
26 Auditing operations and re-registration with the Chamber of Commerce in 1997-2002 revealed nearly 200,000 irregular registrations.
21
fixed contribution was abolished in 2005. Registration duty was also simplified and reduced. However, implementation of the tax reform has in practice been slow and uneven, gaining ground only until 2005. For imported products, the accumulated taxes in 2001–customs duties (30 percent), the provisional tax known as droit additionnel provisoire DAP (36 percent) and VAT (25 percent) – added up to around 90 percent of the price of the imported product; with reduced VAT and DAP abolished in 2006, tax is now no more than 50 percent. In 2012, association with the EU should considerably reduce duties and taxes.
2.
Labour market policies, programmes and institutions Employment promotion is a priority in the Government Action Plan for implementation of the President of the Republic’s Programme (2009-2014). 27 The objective of the Plan is to create three million jobs in the course of 5 years. Under this scheme besides a major government public investment programme, several measures are envisaged namely: a) “Pre-employment” contracts designed to improve certain public services, particularly in the local municipalities, while offering young persons useful job experience; b) assistance to labour market integration particularly targeting businesses, which can generate up to 400,000 placements per year; c) various schemes targeting micro enterprises. Regarding the latter, significant support measures have been put in place namely: i) strengthening bank loan guarantee mechanisms, ii) setting up investment funds in all the wilayas 28 to support the creation of micro enterprises by young persons, iii) setting up dedicated departments in the universities and vocation training institutes to assist young entrepreneurs, and finally iv) reserving premises to accommodate young micro entrepreneurs in the new industrial and business parks. In 2009, the Ministry of Labour, Employment and Social Security also presented a Plan for the Promotion of Employment and Combat against Unemployment which establishes a new scheme for youth. 29 The new scheme includes ‘active’ labour market measures as opposed to the old scheme that relied on passive measures.
2.1. Labour legislation and administration The reforms that begun in the 1980s focus on an institutional framework matching the new context of the market economy, introducing contractual provisions and collective bargaining as a means of regulating labour relations, and also introducing standards and other provisions with a view to make labour more flexible and improve its mobility. Law 90-11 dated 21 April 1990 encourages flexibility through fixed term contracts, part-time work, and reduction in the number of employees for economic reasons. For a better implementation of the new laws and regulations, amendments were passed in the mid-1990s, affecting in particular the conditions of termination of contract, legal working hours and definition of the content of collective agreements. A committee
27
Plan d’Action du Gouvernement pour la mise en oeuvre du Programme du Président de la République http://www.premier-ministre.gov.dz/images/stories/dossier/Plan_action_2009_fr.pdf. 28 Wilaya is the Arabic word for province. 29
Plan summary is downloadable at the Ministry of Labour website http//:www.mtess.gov.dz.
22
is currently working to unify the labour legislation in a simplified Labour Code to be subsequently promulgated 30. Substantive efforts are also being undertaken in terms of capacity building of institutions. The performance of the central employment administration has progressively improved due to territorial organisational reform in which it was brought into line with all the services relating to labour administration. The current organisation is the result of government restructuring of issues related to labour, employment, social protection and vocational training. According to the latest government restructuring in 2008, the Ministry of Employment, Labour and Social Security, including all the agencies (ANEM, CNAS, CNR, CNAC, ANSEJ) operating at both regional and local levels, and with the support of the labour inspectorate (IGT) is the responsible institution to enforce current labour legislation. The national statistical information system entrusts ONS, under the direction of the general planning committee (Commissaire Général au Plan et à la Prospective) in the Ministry of Finance with the mission of regularly producing economic statistics, including on employment. An important challenge, however, remains how to produce quality and reliable data on the labour market in order to properly monitor and evaluate existing policies and programmes. The central government also has a research body which trains labour inspectors. The capacity of the National Labour Institute (INT) is currently being strengthened in order to improve research and analysis on employment issues. INT also has responsibilities in matters related to working conditions, wages, prices, household consumption, training and the advancement of labour legislation and regulations. Two surveys on child labour were carried out in 2003 and 2004 and a survey on wages was carried out in 2002. Two crucial institutions with important implications for the functioning of the labour market are the General Labour Inspectorate (IGT) and the mechanism for fixing the basic minimum wage. The IGT and all its regional and local branches were reviewed in 1990 and restructured in 2005 in order to keep up with changes in labour legislation. 31 The IGT, however, has a limited capacity and does not have the means to combat informal activities and practices on the labour market. For this reason a programme was set up in 2006 to strengthen IGT’s capacity, and recently IGT has been assigned with new tasks. 32 The guaranteed Minimum National Wage (SNMG) is decided in tripartite meetings between the government, the general union of Algerian workers (UGTA), and the employers’ organisations. According to the texts governing the minimum wage, 33 its level should in principle take into account changes in the average national productivity, the consumer price index, and the general economic situation. The basic text does not define the criteria for measuring economic performance, does not describe any procedure
30
See recent article : Le gouvernement prêt à revoir la loi: Travail : le nouveau code August, 2011 http://www.presse-dz.com/revue-de-presse/revue-de-presse-11-08-2011.html 31 Decree N° 05-05 dated 6 January 2005 on the organisation and operations of IGT http://www.joradp.dz/JO2000/2005/004/F_Pag.htm. 32 Decree N° 09-218 dated 23 June 2009 on the organisation and operations of IGT http://www.joradp.dz/JO2000/2009/037/F_Pag.htm. 33 Article 87 of Law 90/11 dated 21 April 1990 on labour relations
23
for revision and adoption of a new SNMG and leaves room for a subjective appreciation of the general economic situation. 34 Minimum wage negotiations increasingly take place on an ad-hoc basis. This is mainly due to the low visibility of the social partners as there is no institutionalised timetable for wage negotiations. Furthermore, any negotiated minimum wage increases may have a severe economic impact if the knock-on effect on other wage scales is high. Increasing the minimum wage (12,000 DA/month since 2007) is an issue that is constantly being raised. The minimum wage is revised every two to three years at a high rate (an annual average of +8.7 percent since 1996, peaking at 43 percent in 2001, against 3 percent inflation), resulting in a considerable improvement in the purchasing power of the minimum wage. However, this improvement can be offset during the periods in which the minimum wage does not vary. Very often it is this latter situation which gives rise to demands for an increase in wages. In 2007, the SNMG in Algeria was equivalent to the minimum wage (SMIG) in Tunisia (11,500 DA). 35 This was the result of a certain effort on the part of the Algerian government to raise wage levels in response to demands for higher pay. This was fuelled to some extent by comparison with the higher wage levels in neighbouring countries.
2.2. Active labour market policies Active labour market policies (ALMP) are said to be important tools for reducing social inequalities in access to employment. Algeria has a long tradition on this matter and the first active labour market interventions were adopted in the late 1980s. Twenty years later the measures are still in place after undergoing few reforms. However, little efforts have been done in terms of monitoring and impact evaluation of such policies and programmes. 36 A tentative draft external evaluation has been undertaken by the Commissariat Général à la Planification et à la Prospective (CGPP) but it does not evaluate the impact of interventions. 37 In Algeria, the main target group of ALMPs is youth. Out of the 6 measures implemented before 2008, the analysis below considers four measures that directly encourage employment, namely: microenterprise development, first time employment contracts, the labour intensive public works (Travaux d’Utilité Publique à Haute Intensité de Main-d’œuvre, TUP-HIMO), and microcredit. Interventions in the context of the local employment initiative Emploi sur Initiative Locale (ESIL) and the general benefit scheme Initiative d’Activité d’Intérêt Général (IAIG) are closer to passive employment policies, discussed further on. Creation of microenterprises. Under the aegis of the national association for the support of youth employment (Agence Nationale de Soutien à l’Emploi des Jeunes -
34
ILO Algiers report on the social functions of the minimum wage, supervised by Saïb Musette (2003), Algiers. Evaluated at an hourly rate of 1.228 DT and an exchange rate of 01 euros to 01.752 DT (source: www.ins.nat.tn) and 95 DA (source: CGPP economic report, 4th quarter 2007) 36 Among these are an external evaluation by the national economic and social council (CNES) consisting of a compilation of interviews with various organizations, a World Bank technical workshop on the labour market (2006), and an ILO comparative analysis of intermediation in three North African countries with some comments on the active labour market policies. 37 See l'intermédiation sur le marché du travail dans les pays du Maghreb. Etude comparative entre l'Algérie, le Maroc et la Tunisie J. Paul Barbier, BIT 2006 35
24
ANSEJ), the programme targets highly qualified young persons aged 19-35 who are unemployed. This programme offers incentives for young people to set up their own enterprise. Specific measures include: favourable interest rates, interest free loans, creation of a guaranteed fund, counselling for the young investor and a broad range of tax advantages. The main obstacles faced by these interventions are reticence on the part of the banks, often in conflict with government policy, to finance such projects; and the other is the difficulty of obtaining suitable premises. First time employment contracts (CPE). This programme encourages integration of first time job seekers with university or higher technical training institute degrees. The scheme funds the salaries of graduates recruited by public and private employers for one year, which may be extended for an additional 6 months maximum. Use of the scheme remains limited, especially in the private sector, most likely due to a lack of adequate information regarding the programme. Furthermore, selection criteria is not well defined, affecting transparency in the choice of beneficiaries. It has been noted that it is more difficult for graduates from disadvantaged backgrounds to enter the scheme than for graduates from wealthier backgrounds. At the start of the programme the recruitment target was set at 31,000, but by the end of the year 2000 only 19,000 placements had been made, of which 63 percent were in public administration. Only 12 percent of the candidates recruited obtained permanent jobs at the end of the period. Job creation schemes include the TUP-HIMO scheme for labour intensive public works, work sites of general interest (activités d’intérêt général – AIG) and community development programmes. The number of new jobs registered under these programmes, even if they are only temporary, has had a positive effect on the distribution of wealth, social and labour market integration and improvement of infrastructures in disadvantaged areas. These schemes combat unemployment in general and youth unemployment in particular by creating temporary jobs on work sites, mainly roads, forests, development of building sites, small scale water works and agriculture, located in underdeveloped areas. They are financed by the state budget (via the Social Development Fund and a loan from the World Bank). About 140,000 workers have found temporary jobs, equivalent to 52,000 permanent posts. Altogether, job creation schemes have mobilised financial resources going from USD 112 million in 1997 to nearly USD 192 million in 2000, an average annual increase of 16.9 percent. The financial effort in favour of employment is visible. However, its impact in terms of long term job creation is relatively small because, in addition to many of the jobs being temporary, the procedures remain complex and selective. Microcredit. Microcredit schemes are intended to encourage self-employment, working from home and the creation of small businesses. They were initially managed by the Social Development Agency (Agence de Développement Social - ADS) until the specialised agency ANGEM was set up. The goal is to provide access to small scale loans for small scale projects at favourable interest rates supported by the State. The scheme was set up in 2000 and organised access to credit for small scale projects. In the first year 73,000 cases were filed of which 7,402 were approved. Only 974 obtained bank approval and 103 started operating. The scheme, however, did not explicitly target the poor and did not include associations, like most international schemes of this type. Furthermore, projects had to meet tough guarantees and profitability criteria and the banks were reluctant to provide the loans. The result was that the scheme – in its first form at least – did not have positive results in terms of the creation of microenterprises and employment. The scheme may have been more successful if the decision making process had been more flexible, as has been shown by programmes set up in other countries.
25
Between 2001 and 2005, all the job creation and employment promotion schemes had mobilised nearly 100 billion DA. The management of the schemes remained relatively centralised. It is likely that greater ownership of the programmes on the part of local authorities would have led to greater impact of the mobilised resources. The efficiency of the programmes was also affected by the highly segmented mode of operation. The table below shows job creation under the government employment schemes for the period 2001-2005. Table 11: Job creation under government employment schemes (in number of posts) Scheme
2001
2002
2003
2004
2005
ESIL*
74,700
72,700
70,000
72,500
62,000
IAIG*
132,400
166,100
180,000
183,500
185,000
CPE*
6,600
4,700
4,800
59,800
48,000
TUP-HIMO*
28,000
30,000
30,500
14,000
7,000
Micro-enterprises**
20,200
19,600
28,100
19,100
30,000
Microcredit**
3,800
11,800
-
-
6,500
265,700
304,900
313,400
348,900
338,500
Total
* equivalent number of permanent posts ** direct employment Source: Ex-Ministry of Employment and National Solidarity, Algiers, 2007
None of the employment generation schemes focused on standardising wages or compensating for loss of purchasing power. Remunerations were decided individually for each programme, thus varying greatly from programme to programme. 38 In post-2008 schemes, pay and indemnities range from 4,000 to 12,000 DA/month gross (sometimes pay is regressive, as under the assisted employment schemes – see below). These rates of pay are calculated by reference to civil service posts in categories 8 - 11 as a percentage that may vary from 36 percent to 55 percent of the civil service salary. All these measures are still in force but have remained under the control of the Ministry of National Solidarity. On the other hand, the Ministry of Labour has a National Plan with a different series of measures that may be described as ‘active’, under the new label of the Programme to Support Labour Market Integration (Dispositif d’Aide à l’Insertion Professionnelle - DAIP). The DAIP scheme consists of three new types of targeted labour market integration:
Contract to facilitate labour market integration for graduates: (Contrat d’Insertion des Diplômés - CID) aimed at first time job seekers with a higher education degree or technical diploma. Beneficiaries benefit from support and appointment to permanent priority posts in public and private enterprises (for a period of one year, non-renewable) and in public administration (for a period of one and a half years). They receive a monthly salary paid by the government, calculated according to the starting salary of a senior civil servant (12,300 DA per month for a university graduate and 10,100 DA per month for a technical high school graduate). The government also pays the employer’s contribution to
38 It may be 2,500 DA/month in the ESIL programme, 3,000 DA/month under IAIG, 4,000 DA/month for higher technicians and 6,000 DA/month for university graduates in first time employment contracts (CPE).
26
social security. The employer is responsible for integrating the graduate into the working environment and for making regular assessments. If ANEM judges that the graduate needs an assisted employment contract (Contrat de Travail Aidé CTA), the graduate is obliged to accept under penalty of losing the CID.
Contract to facilitate labour market integration: (Contrat d’insertion professionnelle - CIP) aimed at young first time job seekers leaving secondary school or agricultural college (including apprentices), a population estimated at 21 percent of total unemployed in 2008. Beneficiaries of the CIP scheme are placed in public institutions and offices (for one year, renewable) and in public and private enterprises (for one year, fixed term). They receive a salary of 6,100 DA/month in public administration and 8,000 DA/month in business enterprise. As for a CID, the government pays the employer’s social security contributions and ANEM has the right to propose an assisted employment contract in a company. If the candidate refuses, they lose the right to a CIP.
Training and labour market integration contract: (Contrat de Formation et d’Insertion - CFI) aimed at young job seekers who have no training or qualifications. According to ONS, in 2008 this group constituted 59 percent of the unemployed. The young beneficiaries are either placed on general work sites supervised by the local authority or by other sectors of activity for the duration of the site, or they are apprenticed to a master craftsman (for one year, fixed term). They receive a grant of 4,000 DA/month during an apprenticeship and the normal pay for the job if they are placed on a work site (current laws and regulations apply to them in this case).
These different programmes of labour market integration contracts have been operational for over a year. Their objective is to support 400,000 young first time job seekers every year, as follows: 110,000 CID (70,000 university graduates and 40,000 technical high school graduates), 200,000 CIP (60 percent in the business sector and 40 percent in public administration) and 90,000 CFI (22,500 equivalent or permanent posts). Overall 130,000 young beneficiaries found permanent jobs by the end of the period, 33 percent of those employed within the framework of the vocational integration support programme DAIP. In total, for the period 2009-2013 when DAIP and other business support schemes are being implemented the target is 185,000 new permanent posts per year, including 130,000 salaried posts (DAIP) and 55,000 start-up businesses. Measures have been agreed to encourage and support businesses offering permanent jobs to young persons who have benefitted from CID or CIP labour market integration programmes; the State also finances additional occupational training in the form of an employment and training contract (Contrat Emploi/Formation - CEF) at the request of the employer. This scheme was set up in June 2008 by ANEM and its local agencies (see below for the structure of the ANEM network). The number of young persons placed under this scheme since its implementation, grouping all types of contracts together, is approximately 200,000. Table 12: Budget forecast 2008-2009 for labour market integration interventions DAIP Programme CID CIP CFI Training (15 % of the budget) Training incentive bonus
billion DA 2008 2009 12.8 12.8 17.5 17.5 3.3 3.3 6.4 6.4 1.20 1.20
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CTA 2009 1.14 2.40 2.34 -
Number of beneficiaries 110,000 200,000 90,000 -
Operational expenses Total
1.30 42.5
1.30 42.5
5.88
400,000
CID : 70,000 university graduates and 40,000 technical high school graduates CIP : 60 percent business sector and 40 percent public institutions and administration (IAP) CFI : 22,500 equivalent permanent posts. Source: National Plan / Ministry of Labour, Algiers, 2008
Table 13: Financial impact of employment support contracts, 2009-2013 (in billion DA) CID CIP CFI TOTAL
Number p.a. 15,000 50,000 65,000 130,000
2009 1.14 2.40 2.34 5.88
2010 3.77 9.00 4.68 17.45
2011 5.27 10.20 4.68 20.15
2012 3.61 8.40 4.68 16.69
Source: National Plan / Ministry of Labour, Algiers, 2008
2013 5.02 8.40 4.68 18.1
TOTAL over 5 years 18.81 38.40 21.06 78.27
For the period 2009-2013, under the youth labour market integration support schemes, the young enterprise schemes (ANSEJ) and assistance to the unemployed aged 35-50 (CNAC) the target is 185,000 new permanent posts per year, including 130,000 salaried posts (DAIP) and 55,000 start-up businesses. These 185,000 jobs account for 6274 percent of the annual additional jobseekers. Table 14: Annual average number of new posts under DAIP for the period 2009-2013 DAIP Annual average number of new posts
130,000
Job creation ANSEJ
CNAC
45,439
9,561
Annual total 185,000
It is likely, however, that this additional supply of labour is under-estimated as it does not take into account the new patterns of female activity. As it stands the new scheme does not set a quantitative objective for female employment. As previously discussed, the rise in women’s educational attainment levels, as well as trends that point towards postponement of marriage and declining birth rates will inevitably increase the labour force participation rate of women, particularly within the younger age groups that are entering the labour market.
2.3. Passive labour market policies Similar to ALMPs, Passive Labour Market Policies (PLMPs) lack a serious external evaluation of the impact of the measures adopted. Algeria is one of the few countries in the continent with an unemployment benefit system, which was set up in the 1990s. National unemployment insurance scheme: an exception? In the mid-1990s, confronted with a profound economic crisis because it was unable to honour its foreign debt, Algeria adopted a Structural Adjustment Programme with the assistance of International Monetary Fund (IMF). The Algerian government took an ‘unusual’ approach based on social solidarity and The National Unemployment Benefit Scheme (Caisse Nationale d’Assurance Chômage - CNAC) was created in 1994, together with a scheme to reduce working hours and also introduced early retirement policies. The main objective of the CNAC is to manage the unemployment benefit system. The scheme provides regressive indemnities exclusively to workers who have been laid
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off for economic reasons by companies who have paid into the scheme. Between 1994 and 2006, out of over 200,000 workers who were dismissed, 190,000 obtained an indemnity for three years, calculated according to their length of service. Apart from an indemnity, the unemployed are offered a number of services to assist their reintegration to the labour market. Three services in particular merit attention: (i) training or retraining measures (ii) job search assistance; and (iii) a support services on self-employment. CNAC targets those unemployed, whether they receive benefits or not, particularly in the age range 35-50. Social integration of youth Passive labour market interventions also include a series of measures under the programme called Social Integration of Young Graduates developed by the Ministry of National Solidarity. This programme fights poverty and unemployment among youth and is managed at the national level by the social development agency (Agence de Développement Social) and executed at the local level of wilayas by the social action departments (Directions de l’Action Sociale - DAS). The graduate social integration programme (DIP) is aimed at young university graduates and technical high school graduates, between 19 to 35 years old, who have no income, are in a precarious situation or have a disability, and do not benefit from any other scheme. A committee in the wilaya examines and pronounces on the eligibility of the candidates. The duration of integration is set at one year, renewable once, and the ‘integration bonus’ payable is 10,000 DA/month for university graduates and 8,000 DA/month for technical high school graduates. There are various other measures to encourage the recruitment of unemployed youth, such as:
A bonus of 2,500 DA/month to encourage training towards a qualification may be granted for a maximum period of six months. The scheme is financed exclusively from the government’s budget by the Ministry of National Solidarity and is administered by ADS together with the social action departments (DAS) in the wilayas.
Under the scheme for assisted employment (Contrats de Travail Aidé - CTA) the government pays a contribution to the remuneration for a period of three years. There are a number of other support measures: reduction in the employer’s contribution and social security contributions for those not on the payroll, employment grants, job creation incentives under Section 3 of the 2008 Action Plan, reduction in total income tax (impôt sur le revenu global – IRG) and business profit tax (impôt sur le bénéfice des sociétés – IBS) for four years and tax at a nominal rate for master craftsmen, etc.
Financial incentives to employers who recruit young job seekers and wage subsidies
Funding for initial training and in-house training actions during the integration period, at the employer’s request (15 percent of the budget for integration contracts goes to funding such training)
A system of employment and training contracts (60 percent of training costs come from the government’s budget for a maximum of six months)
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The government also funds other support measures to give the maximum aid to integration and employment of potential young entrepreneurs and to youth in search of wage employment, in particular communal work sites of various types are awarded preferably to microenterprises created through the standard schemes; an incentive grant of 3,000 DA/month for further training to beneficiaries who follow a training course in branches or specialities that are in short supply in the labour market; and specific measures for youth living in disadvantaged districts, with easier access to employment in construction and public works.
2.4. Equity and accessibility National legislation on labour relations prohibits discrimination against workers, whether by age, sex, social situation or any other criterion. 39 In order to promote equity and accessibility, special measures are in place to target more vulnerable groups such as people with disabilities and youth. The special conditions to favour the vocational integration of workers with disabilities include an obligation to reserve positions for disabled persons (1 percent) in the ordinary working environment and the creation of sheltered workshops and aid centres for workers with a serious disability. Furthermore, in August 2005, Algeria ratified Arab Convention N°17 on retraining and employment of persons with disabilities. As we have seen, special youth employment schemes have been set up (DAIPANEM) to achieve labour market integration via wage employment, training, apprenticeships and promotion of small businesses. 40 All the schemes apply both to men and women, but there are no special ones designed to target women’s specific needs. However, both national and international NGO’s are active in the promotion of female employment in rural and urban areas, in collaboration with the Ministry of Agriculture and Rural Development (MADR) and the Ministry for Small and Medium Enterprises and Crafts (MPMEA). Given the previously discussed, demographic, labour market, social and educational trends improving employment opportunities for women and in particular young women is a key challenge.
2.5. Social dialogue In Algeria, dialogue and consultation between social partners are a well-established tradition. Social dialogue processes began in 1995, particularly during the structural adjustment and post-adjustment period. It was at first practised in tripartite meetings between the government, the unions and the employers. More recently the meetings have been bipartite gathering the government and the unions. The meetings have included discussions on several points of economic and social policy related to employment and to other social aspects of government policy such as social housing and privatisation. The various working groups that have been set up have helped ease industrial relations and have supported the government in its political, economic and social
39
Law n°90-11 dated 21 April 1990. The legal framework in support of youth employment is contained in Presidential Decree n°96-234 dated 02/07/96 on support for youth employment and in Executive Decree n°08-126 dated 19 April 2008 on aid for labour market integration. 40
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interventions. This experience and way of working has been somewhat eroded over the last few years. Recently the government relaunched the idea, a positive move towards good governance. Recently an economic and social pact was adopted, hoping to ease tensions in the labour market. Social partners The social partners are represented by employers’ organizations that include the Union Nationale des Entrepreneurs Publics (UNEP), the Confédération Algérienne du Patronat (CAP) and the Confédération générale des entrepreneurs Algériens (CGEA), and the General Union of Algerian Workers (Union Générale des Travailleurs Algériens - UGTA). Despite the existence of a number of trade unions, 41 only UGTA (the oldest union) actually participates in the tripartite consultations. It is also the only union which has a seat on the administrative councils of CNAS and CNR. These four partners are active and officially recognised. From time to time, depending on the subject of discussion, the government also widens the membership to associations like the business forum Forum des chefs d'entreprise (FCE) and SEVE, the association of women CEOs. 42 UGTA possesses a fairly active women’s section. The main problem for all the unions is how to obtain real representation. Although legislation allows for freedom of association, in reality very little happens on this front. Wage setting mechanisms Since 1996 pay levels in the public sector are negotiated under collective agreements between UGTA and the employers. In practice, it is the administrative bodies in public enterprises (administration councils and SGP) that, following negotiations with the unions, have the power of decision in matters relating to wages. Wage setting in the private sector, where the unions are weakly represented, remain a matter for the employer. The employer has a considerable advantage in terms of using wage levels to improve competitiveness (flexible labour costs). The minimum guaranteed wage (SNMG) is set by consensus in tripartite meetings involving the government, UGTA and employers’ organisations. The government’s wage policy consists in setting the salary scales for the public sector and specifying the minimum wage, SNMG. Decisions on wage increases are slow and are characterised by the absence of adequate measures of impact (related to levels of production, productivity, purchasing power, etc.). Trade unions and employers’ organisations do not necessarily share the same concerns as the government. The claims for higher wages are a recurrent issue at stake to compensate for the loss of purchasing power and are brought about by the hopes for an
41
There are 52 trade unions recognised by the Government but none have an inter-sectorial or national dimension in their brief. 42 Other relevant associations include consular chambers such as: National Chamber of Crafts and Trades (Chambre Nationale de l’Artisanat et des Métiers -CNAM), National Chamber of Industry and Commerce (Chambre Nationale de l’Industrie et du Commerce -CNIC), and Chambers of Industry and Commerce of Wilayas (Chambres de l’Industrie et du Commerce de Wilayas -CIC). Associations and NGOs (civil society) active in the fight against unemployment include: National Association for Development and Employment Promotion (Association Nationale de Développement et de Promotion de l’Emploi -ANDDPE), Association for Support of the Integration of Youth (Association de Soutien à l’Insertion des Jeunes -ASI), Forum of Business Managers (Forum des Chefs d’Entreprises -FCE), and the Association for Women Entrepreneurs (Association des Femmes Entrepreneurs -SEVE).
31
improvement in the standard of living. During recent tripartite discussions on wages, employers organizations accepted a significant increase in the minimum wage SNMG (+25 percent in 2004 and +20 percent in 2007, for example). Supposing that these increases will be effectively applied, there will inevitably be a knock-on effect on all pay scales, and even when this has been absorbed, the impact on wage costs will be considerable. However, the fundamental question remains the effective and generalised application of the minimum wage.
2.6. Employment services National Employment Agency The National Employment Agency (ANEM) is the successor to ONAMO, 43 an agency set up after independence to aid Algerians to find jobs abroad. It had offices throughout Algeria as well as in other countries, particularly France. In 1990, ONAMO was replaced by ANEM and restructured concomitant with the economic reforms. It was not very efficient, working alongside other agencies such as CNAC and ADS without having the complementary means to fulfil its objectives. In 2006, a large programme to build the capacity of the ANEM and to improve job matching between jobseekers and employers was set up. The programme however, was overambitious as the field of intervention was very extensive, covering aspects of organisation, knowledge of the labour market, management of supply and demand (including public employment programmes such as the recent scheme for youth labour market integration, DAIP), and aspects of employment policy (including training). Recently a private agency was approved to support ANEM with its goals. There have been several internal evaluations of the public service but the reports have not been published, with the exception of a quarterly report with limited circulation. The only external evaluation of the public employment service was carried out in early 2001. 44 It is difficult for ANEM to attain any significant achievements. Currently, its only role is to serve as an intermediary between supply and demand. Registration has increased over the last few years (nearly 900,000 jobseekers on file in 2007 including first time employment contracts), most likely because jobseekers are obliged to register with the agency in order to be eligible for unemployment benefits. Given the size of the country, there is a relatively limited network of employment services (around 170 in the country as a whole), and the monthly data are not sufficiently representative of overall movements in the Algerian labour market. The geographical coverage of this agency is difficult in a country as large as Algeria. For this reason there is a plan to add 75 local agencies in order to reach a 16 percent coverage rate of the districts. In reality each local agency covers several districts but the jobseeker is required to move. Arrangements for itinerant services to reach rural residents in the less accessible areas would be of great help, given that the cost of transportation for an unemployed person can be very high.
43 44
ONAMO (Office National de la Main d’Œuvre) or National Labour Office. Bodin & Isli (2001), Evaluation of the public employment service, Algiers.
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According to the ONS data, ANEM’s performance seems fairly limited. As seen in Figure 7, personal networks are the most common method of job search, used by almost 80 percent of the unemployed. But it is important to note that jobseekers use different methods of job search. When the analysis is done according to area of residence, data shows that the rural population is at a disadvantage compared to cities with respect to access to public employment services: 29.6 percent of unemployed in rural areas use these services compared to 42 percent in cities. Regarding age groups, the unemployed between 25-35 years are the main users of ANEM.
Figure 7: Methods of job search used by the unemployed, 2007 Personal network Applications to firms Other ANEM / ALEM - employment agency 0
20
40
60
80
100
Source: Derived from the ONS Employment survey results, Algiers, 2007
ANEM also suffers from the constraints of highly disorganised information and a lack of credibility due to the weak role it has held over the last decades. The figures published by this agency refer to the number of requests rather than the number of candidates. Since the candidates are not identified separately and there is an obligation to re-register every quarter, it is difficult to avoid double counting. Similarly, as there is no liaison with the social security system, there is no figure for those leaving the list of unemployed beyond the placements directly negotiated by the agency. Another means of assessing the performance of employment services is the method by which candidates find a job. Figure 8 shows the weak position of ANEM even if we include the services offered by the local authorities (Assemblée populaire communale - APC). It is, however, encouraging that despite the low placement rate, those who benefitted most from the agency’s services were rural inhabitants (7.2 percent) and women (16.1 percent). Figure 8: Methods used by employees to obtain employment in 2007 Placed by school / training course Other Placed by ANEM or APC Reply to a job announcement Entry examination Contacted by an employer Personal or family relationship 0
10
20
30
40
Source: Derived from the ONS Employment survey, Algiers, 2007
33
50
A 3-year reorganization programme of ANEM was launched in 2007 seeking to increase the volume of job offers received and passed on to jobseekers at a rate of over 200,000 per annum, to devote 20 to 30 percent of staff time to ‘relations with companies’ and 20 percent of staff time to counselling and orientation of jobseekers. Measures include: the establishment of a major recruitment programme; a training programme aimed at managers and staff from the employment services; a renovation programme of 170 existing agencies and development of the agency network with the opening of 75 new agencies; a modernisation programme including setting up an intranet and acquisition of IT equipment; a programme to renew equipment, improve working conditions and provide more efficient intervention tools in the agencies. This new configuration for ANEM should make it more efficient in its new mission to implement active labour market policies, with DAIP acting as the central axis of intervention. Private employment offices The legal framework regulating the labour market in Algeria expanded its borders with the establishment of private recruitment agencies. New rules were defined to enable private recruiting organisations to operate. Private placement agencies were approved by a national committee set up for this purpose. They are intended to contribute to the implementation of the national employment policy and the national effort for promotion of employment and the fight against unemployment. The participation of the private sector in this governmental mission, however, is still limited. In 2007 the conditions and modalities for granting and withdrawing approval to private placement agencies and to define the conditions under which they might exercise the public service of job placement were determined. However, what has happened in practice is that this form of private mediation is functioning in an informal manner through social networks.
Conclusion The past two decades have shown positive results in terms of growth, job creation and reduction in unemployment. Nevertheless several issues remain a cause for concern. The level of unemployment, particularly among youth, women and graduates, and the large informal economy suggest that certain parts of society are being excluded from the labour market. The changes in the labour market observed over the last twenty years and the development that is yet to come raise the question of how to make the necessary institutional changes to address these issues adequately. For example, women’s participation in the economy, although increasing, remains very low, and the jobs created are of a distinctly precarious nature. Inevitably the labour force participation rate of women will continue to grow, due to better education, marriage at a later age, and the fall in the birth rate among younger women forming the new entrants to the labour market. The employment policy introduced in 2008 breaks with the old concept which was limited to the management of unemployment. The integrated package of interventions and the targeted approach towards specific segments of the population, namely youth and in particular those with higher education levels, is commendable.
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However, an important shortfall is that other key groups facing major labour market challenges such as women and the rural population remain overlooked. The exclusion of these participants brings forth more questions. Are these groups adequately represented by the social partners? Are desirable levels of social and macro-economic equilibrium reachable if more than half of the labour force is excluded? Social exclusion is an observable reality in the Algerian labour market. The ‘outsiders’ organise themselves to survive on the fringes of the formal world. Despite the awareness of the existence of a large informal economy, no action has been taken to protect informal work, even in its legitimate, legal and lawful forms. Furthermore, the Algerian productive system where low skilled jobs are in high demand and the unemployed are highly qualified is a major challenge. Productive transformation, technological upgrading and skills development have a key role to play to meet these challenges. In this respect, there is an imperative need to reform the education and training system in order to improve its linkages with the labour market, as well as to address other major issues such as the pronounced school dropout rates. Data collection and analysis remains another important challenge in Algeria. The national statistics office would benefit from deep reform if it is to serve as a basis for forecasting, policymaking and objective evaluation policies and programmes. Rigorous follow up and evaluation of policies and programmes is essential. Similarly, it is also important to target programmes accurately. Mid-term and long term employment perspectives will be strongly influenced by greater interdependence of the Algerian economy with the rest of the world. Algeria is currently negotiating accession to the World Trade Organization and has signed an Association Agreement with the European Union. Further integration of Algeria into the global economy will imply greater competition as well as greater opportunities, and employment policies will have to match the new challenges.
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