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luxembourg main natural resource was iron ore but thio mineral has been depleted by the 1980s.also it was a country born from political reasons and not the amount of natural resources

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Although my primary interest and focus is high quality translation, I've always maintained that working in languages in any way requires you to at least have a general interest and proficiency in history, cultural understanding, and politics and current events. Language is, after all, a living, breathing thing, and you never know when an anomaly you notice in the way people use language will turn out to be the beginning of a new phase in history.

In the modern world, in fact, everything is interconnected more than it has ever been before - a country like Luxembourg, small but fiercely independent, with its own language (Luxembourgish) but an economy too small to be self-sustaining, has to be a part of a larger pattern in order to survive. As independent as Luxembourg is, it depends completely on its relationship with the rest of Europe for survival.
Changing Times
A common pattern for small countries in the modern world is a transformation from an old-style economy that relied on goods and manufacturing to an economy that relies on trade, finance, and tourism. The relative merits of each approach is best left to economists, except to note that to my untrained eye it isn't possible for a tiny country like Luxembourg to compete against giants like the USA or China in those fields.

Until the 1960s or so, about 80% of Luxembourg's economy was based on iron and steel exports. As their ability to meet international demand and price points plummeted, Luxembourg transformed itself into a financial powerhouse, crafting banking and other services that were very attractive to international investors. This gave the country a level of affluence it had never experienced before, and it wisely invested in information technology industries. Today Luxembourg is one of the wealthiest nations in the world, and one of the most modern in terms of infrastructure.
Resources
Luxembourg has had to remake itself because its small size has left it little choice. Iron ore deposits were more or less depleted by the 1980s, and there is not much productive farmland within its borders - Luxembourg is, in many ways, a leftover from medieval politics, when it was strategically located. It is a country born of political necessity, not natural resources.

Although Luxembourg has plenty of timber and water resources, it would need to be much larger to truly leverage them into a prosperous economy. As a result it really had little choice as the 20th Century progressed but to turn itself into a financial and technological haven, because it had very little else aside from history and beauty to offer the world. As a result, it is entirely dependent on the market of greater Europe for its success. Without its friendly neighbours, it would not be able to sustain itself for long.

Image courtesy geolocation.ws

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Although my primary interest and focus is high quality translation, I've always maintained that working in languages in any way requires you to at least have a general interest and proficiency in history, cultural understanding, and politics and current events.

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money from the oil extraction is pumped back into the military.

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What's new?  Since the 2014 oil price drop, Algeria's economic model, which emerged from the civil war in the 1990s, appears increasingly unsustainable. Despite repeated reform promises, the political system remains paralysed, led by an aging and ailing president who seems primed to embark on another five-year term following elections in 2019.

Why does it matter?  An adaptation of Algeria's economic policy is long overdue. Yet uncertainty surrounding an eventual presidential succession and a state-dependent entrepreneurial class seeking to protect the status quo are hindering progress on imperative reforms needed to navigate the challenges of the decade ahead.

What should be done?  Cautious initial steps could include improving transparency of public finances, launching a broader discussion on the challenges Algeria faces and how best to address them, and placing young Algerians - the bulk of the population, whose future is at stake - at the centre of discussions on reform.

Algeria's longstanding need to diversify its economy away from hydrocarbons has gained fresh urgency since oil prices started falling dramatically in 2014. New financial realities have rendered the preceding decade's high spending unsustainable, rapidly emptying state coffers and increasing the deficit. But despite successive governments' vows to implement reforms and rebalance state finances, political paralysis has militated against decisive policy. Recent history - memory of the economic recession of the 1980s and the ensuing political instability which led to civil war in the 1990s - hinders government efforts to seek a political consensus on reforms and implement them. Yet a failure to reform could precipitate a new period of instability. To resolve this conundrum, the government should pursue greater transparency and better communication about the economic challenges the country faces, greater inclusivity vis-à-vis socio-economic stakeholders, and a sharper focus on the youth demographic in particular.

Two chief obstacles stand in the way. Politically influential vested interests seek to protect the status quo, which benefits a state-dependent business class. And political factors dampen enthusiasm for a more aggressive approach: memory of the political turmoil and bloodshed that followed austerity measures and political reforms in the 1980s and 1990s lingers. Acknowledgement that generous state spending helped pacify the country in the aftermath of the "black decade" of the 1990s, when as many as 200,000 Algerians died in fighting between the state and Islamist groups, has made the government understandably cautious to reverse it. And the question of presidential succession and what legacy Abdelaziz Bouteflika, president since 1999 and the architect of national reconciliation, will leave behind looms large. Bouteflika appears intent on running for a fifth five-year term in elections next April, despite his poor health and public calls for him to pass the torch to a new generation, a factor that contributes to a general sense of paralysis.

Despite an increase in revenues in 2018 due to a recovery in oil prices, a potential economic crisis could come as soon as 2019.

Despite an increase in revenues in 2018 due to a recovery in oil prices (which might not last), a potential economic crisis could come as soon as 2019. It could thus overlap with tensions surrounding the presidential election (which Bouteflika is expected to win easily should, as expected, he run again), and, beyond that, a looming leadership transition. To stave off a crisis, the government has carried out successive rounds of spending cuts, which will take time to deliver results, and implemented an expansionary monetary policy, which fuels inflation and merely serves to buy the government time without addressing underlying problems. Although officials have outlined a broader agenda of industrial diversification and subsidy reform, among other measures, both local and foreign experts say an overarching strategy for reform is still missing. Entrenched political and business interests have too many incentives against change and are squandering the opportunity to get ahead of the curve of a potential fiscal crisis that, if handled too late, will demand more painful and destabilising policies.

The political uncertainty surrounding economic policymaking was evident under Prime Minister Abdelmajid Tebboune in 2017, who was ousted after attempting aggressive changes to economic policy. His replacement, Ahmed Ouyahia, is a three-time former prime minister and a pillar of the establishment; what he lacks in novelty he makes up in experience and ability to navigate the government's murky internal divides. Ultimately, however, any government is limited by the growing paralysis - whether on economic policy or elsewhere - of Algeria's strongly presidential system, a reflection of Bouteflika's health and the uncertainties around how his eventual successor will reshape the relationship between political power, the public sector and the private sector.

In time, Algeria will have to make more than marginal technical adjustments to its economic policy. It should seek to renegotiate an implicit social contract between the state and its citizens long constrained by the advantages (and disadvantages) of its oil-based "rentier" economy, namely that the state should provide and the people should abide. Cracks in that arrangement have become more apparent, manifesting themselves chiefly in frequent socio-economic protests across the country. However, since the late 1980s, contestation that expressed the desire for change - mass protests, calls for political reform and various other forms of activism that sometimes resulted in concessions from the state - often generated profound instability and conflict. Nearly twenty years after the end of the civil war of the 1990s, it is time to begin moving away from a model that, for all the stability and peace it brought, increasingly appears unsustainable.

In order to begin this process, the government should take modest steps to establish a roadmap for economic reform:

Be more forthcoming and transparent to the public on the state of public finances and how it intends to address it. The government should avoid introducing new policies without consulting with and preparing state institutions. It should also seek to address mounting public concern with corruption, for example by appointing a commission to review how to best curtail it through administrative and legislative reforms. This would be a more effective way to curtail corruption in the long term than through trials that the public perceives as politicised and doing little to deter future corruption;

Include a wider range of business and civil society actors in its consultations on economic policy, beyond the business associations and trade unions that are currently its chief interlocutors;

Put particular emphasis on youth, from jobseekers to entrepreneurs, in shaping a reform agenda. This could take place, to begin with, through surveying the needs of younger Algerians and creating consultation mechanisms to integrate their views into the development of the reform agenda.

Algiers/Brussels, 19 November 2018

Algeria faces two challenging transitions. The first, compelled by the drop in oil prices since their peak in the early 2010s, is a move away from an economic model based predominantly on oil and gas revenue and heavy government spending. The second is an uncertain presidential succession, as President Abdelaziz Bouteflika, 81 and severely weakened by a 2013 stroke, approaches the end of his fourth five-year term in 2019. These two transitions are related: the Bouteflika era coincided, until 2014, with a period of steadily increasing oil prices that boosted the economy as the country recovered from the civil war of the 1990s. Yet it also gave rise to an entrepreneurial class that stimulated growth but whose growing political clout and deepening corruption present obstacles to reform. Negotiating these twin transitions simultaneously will be crucial to sustaining Algeria's relative stability in a turbulent region.

This report outlines why the current economic model is unsustainable, something authorities openly recognise but have difficulty addressing. This challenge is common in "rentier" states - countries overly reliant on oil income for their annual budget - facing the imperative of change: cutting state spending is unpopular with a public accustomed to subsidised fuel and other basic goods. In Algeria, the task is complicated by the tacit link between economic prosperity and the national reconciliation process undertaken since Bouteflika became president in 1999. The economic dimension of the post-civil war years, including a period of high oil prices that enabled both social spending and the development of a new business elite, helped avoid a reprise of violence. The lingering trauma of the civil war - which began as a popular movement for political and economic reforms and ended in widespread bloodshed - hinders reform, as does the ability of influential interest groups that have prospered in the Bouteflika era to block policy changes that could adversely affect them.

The 2011 Arab uprisings and their aftermath underlined the fragility of existing economic and political models across the region. Algeria sees itself as different from those countries in that it experienced and eventually overcame its own major political and social upheavals in the 1980s and 1990s. Largely as a result of this history and associated trauma, it saw no significant unrest in 2011, and the ruling establishment, while oft-criticised, retains historic legitimacy stemming from the war of national liberation with France as well as popular support, in part due to the absence of clear alternatives. Yet it shares many fundamentals with its neighbours, including a young population, a laggard economy resisting reform and an uncertain leadership transition on the horizon. Its sense of immunity from regional trends should not be cause for complacency.

This report is based on research conducted in Algeria in 2017 and 2018, including interviews with government officials, politicians, entrepreneurs, civil society actors, academics and journalists. It addresses how best to balance the prevailing desire to avoid a socio-economic shock at a time of political transition against the imperative to adapt to a rapidly changing economic environment and keep pace with Algerians' expectations as the country faces the next decade.

A. A Dangerous Dependency on Shrinking Hydrocarbon Reserves

Algeria is over-dependent on hydrocarbons revenues. Oil and gas accounted for 97 per cent of total exports, two thirds of state revenues and one third of gross domestic product in 2014.In better times, this resource wealth enabled the state to spend lavishly to buy elite loyalty and social peace. Oil revenues have for the most part insulated the government from popular demands for greater participation and transparency. When financial incentives such as generous subsidies and free housing proved insufficient in stifling popular dissent, these revenues helped the security apparatus acquire the coercive means to repress it.

Algeria is redoubling efforts to raise production, including through controversial techniques such as fracking.While official ambivalence about greater foreign participation in the oil and gas sector has repeatedly stymied legal reforms, the state might have to resort to more radical moves, such as making Algeria a more attractive investment destination for multinational corporations that can boost output of existing wells and develop new resources such as shale gas.The government's plan to boost output by 14 per cent by 2019 and invest billions in exploration is unrealistic, in part because protracted corruption scandals have paralysed Sonatrach, the state-owned oil company; these were widely seen as a tug-of-war between officials and the intelligence services.With four energy ministers and six heads of Sonatrach since 2010, erratic leadership has affected the oil sector's stability. As an industry analyst put it:

That said, Algeria still has considerable autonomy to devise a new approach, primarily due to its low foreign debt, which is less than 2 per cent of GDP. Its partners - particularly European countries that want strong states in the southern Mediterranean to cooperate on regional security and stemming migrant and refugee flows - are willing to provide support. Experts expect foreign currency reserves, though depleting, to fund government spending for roughly another two years. As an expert at an international financial institution put it:

When oil prices collapsed in June 2014, Algeria had a comfortable cushion in the form of significant savings. It had $178 billion in foreign reserves and $37 billion in its sovereign wealth fund ( Fonds de régulation des recettes, FRR, which is financed by surplus hydrocarbon revenues). Yet, at the beginning of 2018 only $97.3 billion of reserves remained, while the government had exhausted the FRR in 2017 to finance successive budget deficits.Authorities, optimistic that oil prices would rebound, calculated the state budget for 2017 on the basis of an oil price recovery to $70 barrel by 2020 - a level reached by the first quarter of 2018, but which may not be sustained.

Cautiously and inconsistently, the government has acknowledged the crisis.It introduced tentative austerity measures in the 2016 budget, trimming state spending by 9 per cent. At the start of 2016, it raised the prices of subsidised gasoline. Facing no significant opposition, it became more aggressive, adopting a budget in 2017 that reduced government spending by 14 per cent. It took other measures as well, introducing import restrictions and allowing a controlled depreciation of the Algerian dinar. The 2018 budget, adopted in December 2017, includes further cuts. These have been accompanied by a resort to "quantitative easing" - the increase of money supply by the central bank through issuing government bonds - to stimulate the economy.

These measures carried great risks. While some have praised them, the question remains whether they amount to an overall strategy for economic reform rather than a superficial response to an urgent crisis. Economic experts and financial institutions criticised quantitative easing in particular. An economist said the measure was "adding fuel to the fire" of inflation and would raise living costs, discourage foreign direct investment and possibly depress industrialisation efforts.A European diplomat summarised the criticism: "The purpose of quantitative easing is to buy time, not to implement change. It is just propping up liquidity at the risk of creating inflation".

One reason for this inaction is that the transition fromstate socialism to a more market-oriented economy from the late 1980s to early 1990s is intertwined in Algerians' minds with the violence of the black decade that followed. When oil prices crashed in October 1985, revenues from gas and oil exports fell by more than 40 per cent. A crisis followed on multiple fronts: authorities shelved investment plans and cut back large-scale social programs. Unemployment rose and productivity plummeted as factories closed. And the government, believing that prices would soon rise again, dipped into its foreign reserves and borrowed externally to finance budget deficits.Between 1985 and 1988, the debt-to-service ratio more than doubled, from 35 to 80 per cent.

The social and economic crisis that followed the 1985 oil price collapse set the stage for the riots of October 1988, when thousands took to the streets to protest rising prices, unemployment and austerity measures. Starting in Algiers and spreading to other parts of the country, they were Algeria's most serious riots since independence in 1962. The deployment of the army to put an end to the unrest resulted in clashes that killed 500 (mostly when the army fired upon protesters) and wounded over 1,000.These events precipitated the fall of the single-party system and, in 1991, the country's first free elections, followed by a military coup that ushered in civil war during the so-called black decade. As a board member of the Forum des Chefs d'Entreprise (FCE), a business lobby, said, looking back on those times: "We can't go back to the 1990s, when the country was ravaged by terrorism and people joined the rebels because they had no prospects and no visibility".

In the Bouteflika era from 1999 onward, Algeria has been able to avoid repeating such a scenario. Bouteflika's first three terms represented fifteen years of recovery from civil strife, the restoration of security and stability, and mounting prosperity. Through his call for a "civil concord" Bouteflika offered Algerians a new social contract when he was first elected in 1999: forget the "black decade" and questions of accountability; instead, focus on economic development. Taking advantage of nearly two decades of buoyant oil prices,he gradually and partially shifted power away from the country's entrenched establishment - the army, the Département du Renseignement et de la Sécurité (DRS, the intelligence service), and the Front National de Libération (FLN, the historic single party until 1989) - popularly referred to as le pouvoir. In its place, he restored the primacy of the presidency that had been eroded in the turmoil of the 1980s and 1990s, building a regime in which business elites gradually gained the kind of influence previously reserved for senior military officers and other officials.

The Arab uprisings of 2011 provided the first real test of this new system. The government relied heavily on public spending to quell domestic discontent. This entailed lavish subsidies, infrastructure investments and an ambitious free housing program, embracing handout politics that offered economic security to many Algerians in exchange for continued social peace. In 2011, the government added thousands of new jobs, particularly in the security sector, and oversaw a 330 per cent increase over the previous year in interest-free cash loans distributed to young entrepreneurs through the Agence nationale de soutien à l'emploi des jeunes (ANSEJ). In such a context, popular concerns relayed by the media about corruption and wasteful spending did not gain traction, and Algeria weathered the region's turmoil largely unscathed.

A. The Fashioning of Economic Policy

Algeria has a presidential system in which the head of state has the final say on economic policy. Since 2014, an economic policy advisory board works to produce compromises among three institutions collectively known as the Tripartite: the Union Générale des Travailleurs Algériens (UGTA, a trade union federation), the Forum des Chefs d'Entreprise (FCE, an entrepreneurs' lobby) and the cabinet.In theory, this arrangement is inclusive and stabilising, bringing together ministers, an association of business leaders that has rapidly gained in clout since 2014, and the country's most powerful and historically significant trade union federation. In practice, the Tripartite is top-down and imposes loyalty to the government as a precondition for participation in economic debate. The exclusion of important actors, such as autonomous unions and dissident entrepreneurs, limits the reach and scope of the policy debate.

In an environment in which decision-making remains highly opaque, the leaders of both the UGTA and FCE - respectively Abdelmajid Sidi Said and Ali Haddad - enjoy a high degree of influence and prestige given their proximity to Said Bouteflika, the president's brother and a senior adviser.

Sudden, unexpected turnover in senior leadership has added to the confusion and highlighted the role of influential entrepreneurs in politics. Bouteflika appointed Abdelmajid Tebboune, housing minister in the previous cabinet and a member of the FLN said to be close to him, to replace Sellal as prime minister in May 2017. As interim trade minister from January to May 2017, Tebboune made a name for himself as an establishment figure willing to challenge import barons - businesspeople with privileged political connections whose success depends on securing import licenses (and sometimes monopolies) in lucrative markets.To reduce a burgeoning trade deficit due to lower oil prices, he quickly moved to suspend a wide range of imports, sending prices up and freezing industrial investment. His open targeting of importers as a privileged and overprotected interest group raised hopes that his economic reforms would extend to addressing corruption.Tebboune tackled politically delicate issues ranging from import licenses to public land reform with a zeal that threatened the established order, in particular stepping on the toes of FCE leader Ali Haddad.

Even as it gained breathing space, the state has used veiled threats to defend its economic policy, including the suggestion that the violence of the 1990s might return.

Within weeks of his appointment, Ouyahia moved to implement quantitative easing, thus enabling the government to finance the budget and buy time, in part gambling that oil prices might soon recover. For the moment, the gamble appears to have paid off. The government has been able to avoid deeper cuts, while the rise in oil prices that began in early 2018 has relieved pressure on the budget.

Even as it gained breathing space, the state has used veiled threats to defend its economic policy, including the suggestion that the violence of the 1990s might return. In September 2017, defending his decision to implement quantitative easing, Ouyahia told parliament that without it the government would lack funds to pay civil servants' salaries within two months, implying imminent unrest. In October 2017, the state television station ENTV broadcast, for the first time on Algerian television, explicit and deeply upsetting images of the slaughter of the 1990s. This was widely interpreted as a warning to the public to keep quiet and be grateful for the country's stability.The intention appears to be, as it was in 2011, to warn the population against rocking the boat by protesting or otherwise challenging the state's decisions.

Since the end of 2016, with the announcement of the trimmed-down 2017 budget, popular dissent against austerity has surfaced in multiple ways. Protests have mostly been spontaneous, lacking larger organisational frameworks and failing to mobilise large numbers, with a few exceptions.After the approval of the 2017 budget, a five-day "stay at home" protest planned for 2-7 January, combined with calls for a general strike by a shopkeepers' union in opposition to import restrictions, tax hikes and penalties, turned violent.

From 2 to 4 January, protesters clashed with security forces across multiple towns in the province of Bejaia in the eastern Kabylia region, as well as in Bouira and Ain Benian, both just outside Algiers. Young men attacked symbols of the state such as the Office of National Education, looted goods from technology stores and blocked roads. Security forces used teargas to disperse them and dozens of protesters were reported wounded, as well as 39 police officers in the Bejaia area alone.Security services diffused or disrupted several other marches.Similar protests took place in 2018, with the notable case of a six-month doctors' strike that ended with government concessions after they brought the public health sector to a near-standstill.

During Bouteflika's tenure, Algeria has invested much in reforming and professionalising its security services, rebuilding confidence both at home and abroad, in the realisation that forms of violence and surveillance seen as legitimate or necessary in fighting an insurgency are no longer so.Pre-emptive arrests and targeting protest leaders with harassment and persecution are more effective in stamping out public dissent than other less discriminating methods, which encouraged escalation in the 1990s in Algeria and during the more recent Arab Spring uprisings elsewhere. But the state has not yet tested this change in policing tactics on a large scale, and accumulating resentment could erupt unpredictably. Authorities are exercising particular caution in handling protests in the south, a site of rising contestation.

A. A Newly Relevant Political Class

The Forum des Chefs d'Entreprise 's (FCE) power has waxed since 2014 and it appears poised to gain even more political influence. Private sector growth is a welcome development that stands to bring jobs and a more diversified and competitive economy, but vigilance and oversight will be necessary to harness, coordinate and guide its growth. Critics see in the post-2014 rise of the FCE - which lacks the historical legitimacy of the military or FLN - the advance of a politically influential oligarchy more likely to shape state policy in line with its own interests than to develop the economy.Although the FCE describes itself as a force lobbying for economic reform, its growing political influence has garnered more attention than its declared reform objectives.

Since 2014, when Haddad financed Bouteflika's campaign for a fourth term and then became FCE head, this business lobby's influence has steadily risen.It reached new heights in the public eye in December 2016, when - against protocol and after being denied permission to do so - Haddad insisted on speaking before Foreign Minister Ramtane Lamamra at the Algeria-Africa Business Forum, prompting a walkout by Sellal.For experts and society alike, Bouteflika's decision to sack Tebboune in August 2017 - soon after the latter directly targeted Haddad's construction empire - signalled that Haddad's clout now trumped the head of government's.Haddad's influence derives principally from his real and perceived proximity to Said Bouteflika, the president's brother; many Algerians noted that Tebboune's sacking came just days after the two men were pictured in the media laughing together and entering a government vehicle.

The FCE's rise echoes the growing political relevance of the entrepreneurial class generally. The May 2017 parliamentary elections marked the first time that business personalities ran directly as candidates, especially in the FLN and its partner in the pro-Bouteflika presidential coalition, the Rassemblement National Démocratique (RND).Their growing influence - in part paved by the open role several businessmen played in financing Bouteflika's re-election campaign in 2014 - was perceived as a victory for representatives of business and, leftist critics say, a loss for representatives of the people.This trend in recent years has made some Algerian commentators argue that, in future presidential elections, financial backing from the business community may become as important as the political backing of traditional power centres such as the military.

FCE leaders see themselves as the custodians of a transition from centralised statist socialism to a market economy that started in the late 1980s and was disrupted by the black decade. As a FCE board member put it:

Critics charge that the FCE embodies a backward rather than forward-looking aspect of Algerian private enterprise. An Algerian economic analyst said:

The FCE has paid a cost for its increased political visibility: its critics now often paint it as a parasite granted special favours and playing a pernicious political role.This is in part a caricature that does not reflect the diversity of its members, but is also the predictable result of its politicisation, which rewards business leaders for supporting the government and punishes others for challenging it. Independent-minded entrepreneurs are often actively obstructed, as the public tussle between the government and billionaire industrialist Issad Rebrab, whose Cevital group produces the majority of the country's non-hydrocarbons exports, has shown.

Algeria stands at a delicate juncture. Bouteflika's administration, having leveraged Algerians' past traumas into its own overextension, is unable or unwilling to confront succession. For several years, prominent Algerians have repeatedly and publicly questioned whether Bouteflika is governing the country in reality, and have become increasingly bold in demanding that he not run for a fifth term.Important elements of the opposition have tried, in vain, to call for a negotiated transition that would also address pressing economic issues.Yet in the face of such calls, the presidency and the political coalition that supports it have chosen to either remain silent or double down on another extension of Bouteflika's tenure as the glue that binds the system together. The latter build on a sense of confidence that many Algerians are grateful for the peace they have enjoyed since 1999 and are more worried about what an unknown future will bring.

Whether needed economic changes arrive suddenly in response to crisis or more gradually if higher oil prices can buy more time, a first step for the government is to improve its communications and outreach. This is necessary to explain the challenges ahead and the necessity of reforms - including some that may be unpopular - and what they are expected to deliver. In recent years, the government has tended to underestimate or obfuscate worrisome economic data, including the evaporation of export earnings for savings and investment.An effort to be more transparent about the state of the treasury and how public money is spent would be important in explaining the country's economic situation and avoiding the type of alarmist responses that can prevail when no reliable information is available.

A related issue is the need to address the distrust many Algerians harbour towards both the state and the private sector, given the public perception that a small elite has captured the state. Neither policymakers nor their partners in the private sector and labour movement should underestimate the role corruption plays in the popular imagination; the Khalifa Bank and Sonatrach scandals in particular have eroded trust among both Algerians and foreign investors.The seizure of over 700 kilos of cocaine in a shipment of frozen meat belonging to a well-connected businessman in mid-2018 provoked consternation about the alleged complicity of senior security officials in organised crime.

Accountability for at least the most egregious of past excesses could be one option if policymakers want to address public concern about corruption, even if a politically fraught one because of the likelihood it will harm vested interests. An anti-corruption crackdown also runs the risk of becoming a politicised witch-hunt, particularly in the context of a looming leadership change. A more palatable option might be to lower the risk of repeating such occurrences, for instance by appointing a commission of experts to review existing legislation and administrative procedures and suggest reforms to improve oversight of public spending.

The question of the relationship between a handful of powerful officials and politically influential economic elites is intertwined with the wider public's perception that corruption is widespread among a small power elite of entrepreneurs and officials. "Separating money from political power", as former Prime Minister Tebboune promised to do and what many believe he was sacked for, is a politically charged slogan at odds with the reality that powerful businesspeople organise to defend both corporate and personal interests, and that the struggle against corruption is too often used to settle political scores. A better approach is to expand the number of stakeholders in the formulation of economic policy.

Part of the controversy about the FCE's influence is ideological, reflecting typical right/left or liberal/statist divides that generally can be resolved through elite power rebalancing and electoral outcomes. But the FCE's problem also largely lies in the perception that despite being the lead reformer, it embodies the interests of the establishment and a new elite rather than the economic interests of the country as a whole. As an economic policy adviser said: "The Tripartite should be widened. In terms of building a popular consensus around reforms, having representation be restricted to the UGTA and FCE has a negative impact".Reaching out to outliers in the business world, including those seen as critics of the Bouteflika government such as Issad Rebrab, could not only infuse the debate over economic policy with different ideas but also defuse charges that it lobbies for a particular faction more than the interests of the private sector as a whole.

Algeria has a mixed inheritance from the black decade. It has learned some lessons about how not to liberalise too quickly under sudden pressure due to mounting foreign debt, and it has a strong will to avoid repeating past mistakes. It must now balance the need for an economic adjustment against vested interests that range from privileged businesspeople to elements of society who consider rapid and substantial changes to the redistributive model as too disruptive. That model, for all its inefficiencies, has lifted many out of poverty and helped stabilise a war-torn nation.

Implementing a transition away from the current economic model will require more transparency and openness at all levels, and more accountability from both state institutions and the private sector. Ultimately, the deep reform that Algeria needs requires a strategic opening, externally but also internally, to embrace a diversity of economic, political and societal actors in building a new model that can ensure both stability and growth. The government's current attitude, be it toward making major economic decisions or tackling broader political and societal questions, is too often aloof, arrogant and at odds with Algerians' expectations.

Despite the political uncertainty before the 2019 presidential election and, more generally, a looming presidential transition that may or may not align with the electoral calendar, some cautious initial steps are possible. They could include improving transparency on the state of public finances and widening the discussion on the challenges Algeria faces and how best to address them to a broader range of business and civil society actors than those currently involved in the policymaking process. Young Algerians in particular - who constitute the bulk of the population and whose futures is at stake - should be at the centre of any effort to define a long-term response to the country's economic challenges.

Like many issues crucial to Algeria, questions of economic reform have tended to be postponed, with proponents of change waiting for a more forward-leaning political leadership. This may not emerge for some time, however, and today's decision-makers should consider that getting ahead of the curve of a future crisis would be wiser - for their own sake as well as Algeria's - than dealing with a shock when it comes. It is not too early to start widening the framework of a debate that is as much about how the Algerian social model should evolve as it is about technical steps toward remedial reform.

Algiers/Brussels, 19 November 2018

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Algeria's Economy: The Vicious Circle of Oil and Violence

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What's new?  Since the 2014 oil price drop, Algeria's economic model, which emerged from the civil war in the 1990s, appears increasingly unsustainable. Despite repeated reform promises, the political system remains paralysed, led by an aging and ailing president who seems primed to embark on another five-year term following elections in 2019.

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Russia is trying to pump back some contaminated oil from Belarus oil was contaminated in the pipelines back in April with organic chloride and dirty crude.

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MOSCOW/WARSAW (Reuters) - Russia will pump dirty crude oil back from Belarus as it tries to clear a major pipeline of the contaminated oil that has caused the worst ever disruption to its oil exports, sources and officials said on Friday.

Some 5 million tonnes of oil were contaminated in April with organic chloride and the dirty crude is now stuck in pipelines in Belarus and further West - in Poland, Germany, Ukraine, Slovakia, Hungary and the Czech Republic.

The sources said it could take months to fully resolve the crisis.

The crude is blocking the 1 million barrels-per-day Druzhba pipeline, shut since late April, and the evacuation of dirty barrels is complicated by the fact that no firm wants to pay for or refine them as organic chloride can damage refining equipment.

Four industry sources familiar with the latest Russian plan told Reuters Moscow would reverse the Druzhba pipeline and pump back around 1 million tonnes of contaminated oil from Belarus, thus cleaning up the link all the way through to Belarus's border with Poland.

Another 1 million tonnes stuck in Poland and Germany though, will be left there to be dealt with by those countries, the sources said.

"The Russians are open to agreeing to take back the polluted oil from the Belarus section which has not come to Poland yet, but there is no agreement on compensation," one industry source said.

The source attended a meeting in Warsaw on Thursday between Russian, Belarussian and European companies to discuss how to resume oil exports via Druzhba, the loss of which is costing Russia $80 million per day.

Three other people present at the Warsaw talks or briefed on what was discussed also said the plan was for Russia to take back the oil from the Belarus section.

"This is a bit under 1 million tonnes. They plan to take it back to Russia," one of four sources said.

The pipeline supplies Poland and Germany via its northern leg and goes to Ukraine, Hungary, Slovakia and the Czech Republic in the south. The routes split at the Mozyr refinery in Belarus.

ROAD MAP

On Friday, Russia and Belarus signed a protocol agreeing to clean the pipelines by pumping back the oil to Russia but the protocol gave no specific volume to be pumped.

Russia has not yet determined the amount it will pay in compensation, Economy Minister Maxim Oreshkin told reporters, adding Transneft had the resources to deal with the issue.

Russia's energy ministry and Transneft, the Russian state pipeline operator, did not reply to requests for comment.

Belarus state energy company Belneftekhim, which manages the country's two refineries, declined to comment. Polish oil refiners PKN Orlen and Lotos also didn't respond to a request for comment.

Polish pipeline operator PERN said on Friday it had dealt with over 30% of oil contamination in its system but it may take several months to completely clean the network.

Germany's economy ministry and oil industry association said on Friday that ongoing Druzhba problems did not pose a threat to the security of oil product supply and that there were no plans to release oil from strategic stocks.

It remained unclear where Russia is planning to send the contaminated crude after pumping it back, the four sources said. It previously sent contaminated oil via the Baltic port of Ust-Luga via a pipeline, while a small volume was sent by rail to the Black Sea port of Novorossiisk where it got mixed with clean oil.

Russia is also exporting oil via other ports in the Baltics, as well as in the south and east of the country. These supplies were not affected by the contamination.

So far, Russia has managed to remove around 2 million tonnes, using rail, storage tanks and ships, restoring, at least partially, clean flows to the Ust-Luga port and to Slovakia.

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oil and gas refining and marketing (trbc)

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oil and gas transportation services (trbc)

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Exclusive: Russia to pump dirty oil back from Belarus - sources

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MOSCOW/WARSAW (Reuters) - Russia will pump dirty crude oil back from Belarus as it tries to clear a major pipeline of the contaminated oil that has caused the worst ever disruption to its oil exports, sources and officials said on Friday.

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Vietnam abolishes the taxing on imports of crude oil

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Vietnam abolishes the taxing on imports of crude oil

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Vietnam's demand of crude oil is expending.thus the government is planning on abolishing the taxes on crude oil important the import of the oil for the country's need is easier

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(Adds detail, background)

By Khanh Vu

HANOI, Sept 17 (Reuters) - Vietnam will abolish an import tax on crude oil from November, the government said on Tuesday, as the Southeast Asian country becomes more reliant on imported crude for its refineries.

The country has required more imported crude to offset slowing domestic output as its reserves decline at existing fields and because of China's increasingly assertive stance in the region hampers offshore exploration.

The 5% import tax will be abolished from Nov. 1, the Vietnam government said on its website.

Vietnam has two operational oil refineries with combined processing capacity of 330,000 barrels of crude oil per day.

Binh Son Refining and Petrochemical bought 1 million barrels of Bonny Light crude in its first import of Nigerian crude last month

Vietnam's crude oil imports for the January-August period more than doubled from a year earlier to 5.57 million tonnes as domestic oil output fell by 6.9%, official data shows. (Reporting by Khanh Vu Editing by David Goodman)

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oil and gas refining and marketing (trbc)

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UPDATE 1-Vietnam to abolish import tax on crude oil from November

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(Adds detail, background) By Khanh Vu HANOI, Sept 17 (Reuters) - Vietnam will abolish an import tax on crude oil from November, the government said on Tuesday, as the Southeast Asian country becomes more reliant on imported crude for its refineries.

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people are practicing corruption in the extraction industries in Myanmar. Due to the amount of profit the extraction has been gaining over the years .especially as Burma state of affair is marked by corruption.

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Myanmar's extractive industries have long been saddled with corruption, while its government has contended with myriad socioeconomic, geopolitical and humanitarian crises over the decades, making for a leaky supply chain that's failing to benefit the population as much as it could

When British explorers stumbled across a village in central Myanmar in 1795 comprising a network of hand-dug wells, they likely didn't realise they'd found the origins of a major oil and gas producer that would still be expanding 200 years later.

The country's extractive industries have grown ever-more prolific over the decades, enriching its economy and securing its place as a global supplier of oil, LNG and a plethora of mineral resources including the jade with which it has become synonymous.

But an abundance of natural resources does not guarantee an extractive economy entirely free of problems, and Burma's current state of affairs is one marked just as much by corruption as sky-high production.

"It's difficult to pinpoint exactly what the biggest issue in Myanmar is with regards to the extractive industries," says Marie Gay Alessandra Ordenes, Asia and Pacific director of the Extractive Industries Transparency Initiative (EITI).

"Certainly corruption in the gemstone sector, state-owned enterprises and the beneficial ownership structure [where a company's legal owners are concealed] are at the top of the list, but there's also a real lack of public awareness concerning the situation."

The EITI is a global standard for the good governance of oil and gas companies, as well as mineral resource extraction, around the world, which Burma joined in 2013 in a bid to pave the way for a more equitable extractive network and supply chain.

It has been working with the country towards that end ever since, but a number of factors, including the outbreak of the Rohingya refugee crisis in 2015, have created a malaise that has slowed progress to a crawl.

Here we take a closer look at the performance of Myanmar's extractive industries, the ways in which they've been exploited at the expense of the local population and how the government might overcome the inertia which has made achieving any progress so difficult.

An analysis of Burmese oil, gas and jade

Burma's oil and gas industry has been growing steadily over the past couple of centuries, but has only started to attract global attention in the last decade off the back of a series of seminal resource discoveries.

According to the Myanmar Oil and Gas Enterprise (MOGE), the country produced 2,003,419 barrels of condensate and 676,954 million standard cubic feet per day (MMscf) of natural gas in its offshore blocks between April 2015 and March 2016.

Over the same period, its onshore blocks produced 1,506,345 barrels of oil and 713 MMscf of natural gas, making for a total value during the year of Myanmar Kyat (MMK) 60,948m (£30m) and MMK 4,633,290m (£2.3bn), respectively.

The MOGE claims the revenues collected from the sale of the state's share of oil and gas production across both offshore and onshore blocks between April 2015 and March 2016 by the Burmese government amounted to MMK 1,133,624m (£579m).

This represents roughly 53% of the total oil and gas revenues generated in the country over the 12 months, and it was collected in addition to MMK 425,593bn (£213m) in royalties, equivalent to 19%.

Meanwhile, the Myanmar Gems Enterprise reports 13,483,383 carats, 23.6 tonnes of gems and 36,059 tonnes of jade were produced in Burma over the course of the financial year 2015-2016.

Subsequently, 1,903,437 carats, 420.71 kg of gems and 6,573 tonnes of jade were sold by the country, making for a total value the Central Statistical Organization (CSO) estimates is more than $580m (£445m).

London-based campaign group Global Witness claims the jade trade in Burma, which accounts for 90% of the viridescent mineral's proliferation around the world, is worth more than $30bn (£23bn).

In an interview with Oxford Business Group, Myanmar's minister of natural resources and environmental conservation U Ohn Winn ruminated on the numbers, arguing the extractive industries were largely responsible for his country's recent economic growth.

He was, however, mindful of the many problems his country's oil and gas and gemstone sectors are currently contending with: "We have been facing many challenges in relation to social and environmental issues.

"In this regard, strong institutions, clear environmental regulations and governance, law enforcement and social safeguards are undoubtedly required, along with social, economic and environment factors to achieve sustainable development.

"Therefore, Myanmar has been trying to be a EITI-compliant country to ensure transparency and accountability in natural resources exploitation and financial management."

Despite the work, reports suggest Mr Winn's people still see a disproportionately small amount of the capital produced by the country's oil, gas and jade empires, with the majority of the cash flow redirected by unknown business owners.

The crippling effect of beneficial ownership

Beneficial ownership structures exist in virtually every industry in the world, across all levels of business in both major and developing economies, and present an issue in so far as they conceal the owner or owners of a particular company from public record.

Adding a layer of obscurity to the corporate ecosystem, they allow for all manner of crimes from drug trafficking to illegal logging, as well as the diversion of government resources and tax evasion, all at the expense of a government and its citizens.

They have become one of the primary ways in which fraudulent activity manifests itself in business today: A study by World Bank of corruption cases in 80 countries between 1980 and 2010 revealed 70% involved the deliberate suppression of ownership details.

In Myanmar, questions over missing state-bound revenues from extractive companies have been all but irrefutably tied to beneficial ownership, prompting the government to publicly declare its commitment to eradicating the deceptive practice.

Meanwhile, the EITI recommended in 2013 that all oil and gas companies in the country, as well as those operating along the gemstone supply chain, release their holding information - but only a handful have done so since.

To this day, Burma remains without an exhaustive register of the ultimate owners that bid for, operate and invest in its extractive assets - the situation has, perhaps predictably, proved considerably more complicated than to enable such transparency so quickly.

Ordenes explains: "Really there just isn't the legal framework in place in Myanmar for this to work yet, the companies there will not comply unless there is a law mandating them to.

"We are having some really important discussions with the government, and much progress has been made over the past few years towards improving the situation, but the building blocks for real change aren't quite there yet."

Grave costs of all kinds

A study released earlier this year by the Natural Resource Governance Institute (NRGI) suggests up to two thirds of the jade sold by Myanmar is not subject to tax, costing the country billions annually.

One of Havard's leading experts on southeast Asian economics, David Dapice, said in his own report on the issue: "Practically nothing is going to the government.

"What you need is a modern system of public finance in which the government collects some part of the rent from mining this stuff."

However, it's not just the prospect of economic transformation that the country is missing out on as result of the murky governance of its extractive industries - the lucrative jade trade, in particular, claims dozens of Burmese lives every year.

The patchwork of Hpakan mines carved into the hills of Kachin State - Burma's northernmost province - are home to some 300,000 workers, all of whom are in perpetual danger from landslips and machinery malfunctions.

Illegal drugs are less expensive and more readily available than safety equipment, so rather than prevent injury in advance the miners simply assume their vulnerability and turn to heroin to numb the pain after the occurrence of nigh-on inevitable disaster, often becoming addicted shortly thereafter.

That is if they aren't killed in the process: Late last month, a mud filter at one of the mines collapsed, causing a landslide that engulfed nearby workers and left more than 50 lost, presumed dead, overnight.

Many observes have laid the blame for both the emergence and continued lacklustre governance of this notoriously fatal industry at China's president Xi Jinping's feet, given his country's demand for jade and the abundance of Chinese state-owned enterprises in Myanmar.

Whatever the root cause, there can be no question that a robustly-regulated industry combined with frequent and preemptive state intervention from the Burmese government would go a long way to solving the issue.

For any of that to work however, greater transparency across the entire extractive supply chain in the country is needed - an ambition the potential of which the EITI proved last year.

Causes for optimism

In January 2018, the EITI launched the Beneficial Ownership Data Pilot in a bid to provide a "significant learning opportunity" in advance of the day when full disclosure is brought to Myanmar's extractive industries.

Working in tandem with 21 volunteer companies from the oil and gas, gems and forestry sectors, the intention was to provide governments, reporting entities, independent administrators and regulators with greater guidance going forward.

The study will likely prove a foundational milestone in the years ahead, having highlighted the importance not just of transparency, but also a heightened focus on state-owned and publicly-listed companies, as well as cut-and-dry clarification.

"The pilot showcased avenues to allow authorities to better deal with tax planning issues by including the disclosure of intermediaries and country of incorporation," it read.

"Whereas the provided data could only be partially verified, the pilot offered some learnings on future validation mechanisms, such as by requiring additional documentation or through spot-checks.

"Beneficial ownership disclosure is only scalable in Myanmar if companies receive sufficient guidance on the beneficial ownership concept and template, and that more capacity building will be necessary for both companies and regulators.

The signs of progress are there, it seems, but nobody at the EITI or the Burmese government is getting ahead of themselves.

Significant challenges lie ahead in terms of reshaping Myanmar's regulatory framework in order to ensure private sector compliance with the changes, hopefully, to come.

Ms Ordenes observes: "A lot of this goes outside of the EITI's scope, and because of that it's difficult to predict exactly when the changes needed will come into effect.

"You can pass a piece of regulation but ultimately that doesn't mean companies will comply - it has to go further than that.

"The best case scenario would be a situation were the Directorate of Investment and Company Administration (DICA) is enforcing greater transparency, but we aren't there yet.

"There also needs to be awareness of the issue - we have been engaging in workshops with civil society and the government to that end - but more work is needed."

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videos & industry opinion - compelo energy

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How can oil and gas in Myanmar become as transparent as it is profitable?

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Myanmar's extractive industries have long been saddled with corruption, while its government has contended with myriad socioeconomic, geopolitical and humanitarian crises over the decades, making for a leaky supply chain that's failing to benefit the population as much as it could When British explorers stumbled across a village in central Myanmar in 1795 comprising a network of hand-dug wells, they likely didn't realise they'd found the origins of a major oil and gas producer that would still be expanding 200 years later.

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mining re opens after the war between Ethiopia and Eritrea

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mining re opens after the war between Ethiopia and Eritrea

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after the end of the 20 year border war between Eritrea and Ethiopia extraction of minerals is starting to happen which is suspected to increase the country's economy

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China's Sichuan Road & Bridge Mining Investment Development Corp. is gearing up to kick off copper, zinc, gold and silver production in Eritrea next year, following the country's recent end to its 20-year border war with neighbour Ethiopia.

Asmara will be the third operating mine in the northeast African country, home until now to Nevsun Resources' Bisha gold-copper-zinc mine and Shanghai SFECO's Zara gold operation.

The Asmara project, a group of four deposits on the outskirts of the capital, holds 574,000 tonnes of copper, 930,000 ounces of gold and 1.2 million tonnes of zinc.

The project, a group of four deposits on the outskirts of the capital, is estimated to contain 574,000 tonnes of copper, 930,000 ounces of gold and 1.2 million tonnes of zinc, according to The Africa Report.

A fourth mine could soon join the list, as the Colluli potash project, jointly owned by Australia's Danakali and the government, is expected to begin being built before year-end.

Eritrea, which ended two decades of conflict with Ethiopia on July 9, is already seeing a renewed interest in the country by foreign investors.

The new friendship raises the prospect of Ethiopia - which has Africa's fastest-growing economy and a population of more than 100 million people -using Eritrea's ports again. Asmara is, in fact, considering building a port at the Bay of Anfile, on the Red Sea, which be located 75 km (47 miles) east of the 1.2 billion-tonne Colluli deposit, Bloomberg reports.

The role mining could play to boost Eritrea's economy is not hard to see. The country's National Mining Corporation (Enamco) gets a 10% stake in every mining project, and it also has the option to buy an additional 30% share, as per the Western Australian mining code, on which Eritrea based its mining laws.

Bisha mine alone has contributed more than $755 million to the nation's economy since it began production in 2010, according to Nevsun, the Canadian miner that owns 60% of the mine. The other 40% is held by the State of Eritrea.

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China's Sichuan Road to mine copper in Eritrea starting in 2019

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China's Sichuan Road & Bridge Mining Investment Development Corp. is gearing up to kick off copper, zinc, gold and silver production in Eritrea next year, following the country's recent end to its 20-year border war with neighbour Ethiopia.