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Employment Policies and Active Labour Market

Programs in Algeria

ALGERIA - Background Paper

European Training Foundation (ETF)

Final Version

Drafted By

Mohamed Saïb Musette

Centre de Recherche en Economie Appliquée pour le Développement (CREAD)

(In collaboration with Moundhir Lassassi & Mouloud Mohamed Meziani)

Algiers, July 2013

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Acronyms ADS Social Development Agency

ANGEM National Agency for the Management of Microcredit

ANSEJ National Agency for Supporting Youth Employment

ANEM National Agency for Employment

ALEM Local Employment Agency

AWEM Departmental Agency of Employment

CAP Algerian Confederation of Employers

CID Integration Contract Graduates CIP Contract for Professional Integration

CFI Training Contract / Insertion

CGEA General Confederation of Employers of Algeria

CNAC National Unemployment Insurance Fund

CNAS National Fund of Social Insurance

CNES National Economic and Social Council

CNPA National Confederation of Employers of Algeria

CNR National Pension Agency

CPE Pre-Employment Contract

CTA Subsidized contract work

DAIP Professional Insertion Measures program

DGFP Directorate General of Civil Service DIP Social integration of young graduates measures

DREM Regional Directorate for Employment (ANEM)

ESIL Local Initiative for Wage Workers

FCE Lead Employers Forum (NGO-DZ)

FNSEJ National Fund for Support to Youth Employment

IAIG Allowance for Public Works

IGT General Labour Inspectorate

INT National Institute of Labour

MSN Ministry of National Solidarity

MTESS Ministry of Labour, Employment and Social Security

ONS National Office Statistics SEVE Algerian Association for Women Entrepreneurship (NGO-DZ)

SNMGs Guaranteed National Minimum Wage

TUPHIMO Works of Public Utility - High Intensity

UGTA General Union of Algerian Workers

UNEP National Union of Public Sector’s Manager

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Table of contents

Acronyms ...........................................................................................................................................2

Table of contents ................................................................................................................................3

Preface................................................................................................................................................4

1. Global Overview .............................................................................................................................5

2. Main Features of the Algerian Labour Market .................................................................................8

3. Employment Policies and Strategies .............................................................................................. 13

4. Employment Services and Active Labour Market Programs (ALMPs) ........................................... 14

4.1. Job placement services for the unemployed ............................................................................ 15

4.1.1. The National Employment Agency (ANEM)...................................................................... 15

4.1.2. The Social Development Agency (ADS) ........................................................................... 16

4.2. State support services for the creation of micro-enterprises ................................................... 17

4.2.1. The National Agency for Employment Support of Youth (ANSEJ) .................................... 18

4.2.2. National Unemployment Insurance Fund (CNAC) ........................................................... 18

4.2.3. National Agency for the Management of Micro Credit (ANGEM) .................................... 19

5. Key Findings of the Analysis ........................................................................................................ 21

5.1. Apparent contradiction of labour market statistics ................................................................... 21

5.2. Discussion of ALMPs implemented ........................................................................................ 23

5.3. A qualitative assessment of employment policies .................................................................... 23

5.3.1. How do they assess these programs? ............................................................................... 24

5.3.2. What are the good practices identified? ........................................................................... 24

5.3.3. What measures need to be revised? .................................................................................. 24

5.3.4. What is the bad practice?................................................................................................. 25

5.3.5. What do they think on the national employment policy? ................................................... 25

6. Policy Conclusions and Recommendations ................................................................................... 26

List of persons consulted ................................................................................................................... 28

References ........................................................................................................................................ 29

Annexes ............................................................................................................................................ 31

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Preface

Since 2011 the Southern and Eastern Mediterranean countries have seen a succession of revolts and regime changes, the so-called Arab Spring. Revolts have focused attention on (lack of) employment as one of the main

causes of social instability in the region and highlighted the importance of EU cooperation with the neighbours

in the field of employment. As a policy response, a Euro-Med Employment Policy Dialogue was initiated since

20081, and the 2011 reform of the European Neighbourhood Policy2 attributed a greater importance to job

creation and inclusive growth in the region.

Along the process of structured Euro-Mediterranean policy dialogue on employment, ETF has provided regular

inputs to the European Commission (DG Employment) through three employability reports presented in 2007,

2009 and 2011 in the Euro-Med Employment and Labour High Level Working Groups preparing the Ministerial

Conferences (Bardak 2007, ETF 2009, Martin & Bardak 2012). The aim has been to contribute to the policy

dialogue between the EU, ETF and partner countries through providing good quality analyses of employment policy and employability in the region.

As part of this process, ETF launched another round of analysis on employment policies in selected countries of

the region. The focus of the country analysis is not labour market trends and challenges, but mapping of the

existing employment policies and active labour market programs and their qualitative assessment for results and

effectiveness in addressing the employment challenges. A brief discussion is also included on the recent political

context; i.e. the impact of the Arab Spring on economy and employment issues, the new players/actors involved,

the recent policy changes in government, donors and funding etc.

This report has been drafted by Mohamed Saïb Musette (Centre de Recherche en Economie Appliquée pour le

Développement - CREAD) in collaboration with Moundhir Lassassi and Mouloud Mohamed Meziani in July

2013 in Algiers. Besides the desk review and statistical data analysis (LFS 2011 survey and administration data released in 2011), ten stakeholders from government officers, ex-executives of employment agencies,

representatives of the social partners (trade unions and employers’ organizations) and civil society were

interviewed for their opinions on the employment policies and active labour market programs.

The main problem in drafting this report is due to the actual political context of Algeria. There is a reluctance to

disseminate information on the activities of the various agencies: it’s a real blackout. The only recent data

available on national employment is that issued by the Prime Ministry on its website. The results of the last

labour force survey (LFS) run by National Statistics Office (ONS) in October 2012, are not yet released.

Moreover, the two main data sources do not give the same picture of the labour market in Algeria. They both

have some interesting data but also many limitations. Nevertheless, thanks to the efforts of Mohamed Saïb

Musette, the country report attempts to give an overview of employment policies and active labour market programs implemented in Algeria and some qualitative assessments are made on their results.

Ummuhan Bardak

ETF, September 2013

1 See the first Euro-Mediterranean Conference of Ministers of Labour and Employment held in Marrakech in November 2008, followed by the second Union for the Mediterranean Labour and Employment Ministerial Conference held in Brussels in November 2010, in which a Framework for Actions on job creation, employability of human capital and decent employment was adopted by the participants. 2 EC Communication COM(2011) 200 final, A Partnership for Democracy and Shared Prosperity with the Southern Mediterranean, Brussels, 8.3.2011, http://eeas.europa.eu/euromed/docs/com2011_200_en.pdf, and EC Communication COM(2011) 303, A new response to a changing Neighborhood, Brussels, 25.5.2011,

http://ec.europa.eu/world/enp/pdf/com_11_303_en.pdf.

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1. Global Overview

Even if Algeria has been spared the "Arab Spring”, there have been social uprising in many cities. These social

outbursts have been stabilized by the authority. Two reasons can explain this stability (i) Algeria came out of a black decade (the nineties) marked by intense violence resulted in deaths, injuries and trauma, and (ii) the

economic climate is rather good, with high financial ease, mainly income from the export of oil and gas. Social

peace has been recovered by the government approvals of wage demands, which remained unsolved since 2008,

following changes in the Public Service Act3.

In the light of these macro-economic indicators, Algerian economy was in good health in 2010: a sustainable

growth rate (with a rate of 4%), reserves of 150 billion U.S. dollars, a level of inflation relatively under control at

3.4% annual average. On the social level, the human development indicators in 2010 also indicate a significant

improvement in standard of living in terms of income, health and education4. Unemployment rate in 2010 is

estimated at 10%, with 8.1% for men and a little more than double for women (19.1%)5. Unemployment rate is

higher for young people with a university education.

With these indicators, the government set up a five-year plan 2010-20146. To encourage job creation, an initial

budget 350 billion dinars (4.7 billion U.S. dollars) is adopted: "Encouraging job creation benefits 350 billion

AD over the five-year plan to support the employment of university graduates and vocational training, support

the creation of micro-enterprises and support youth transition to work program. The results of public incentives

for employment will be added to the massive volume of recruitment that will result from the implementation of

the five-year program and the effects of economic growth. All this will achieve the objective of creating three

million jobs over the next five years”7.

According to the LFS data, the situation of the Arab Spring has had no real impact on the labour market. In

2011, as in 2010, unemployment rate remained stable at around one million unemployed, i.e. one in six

households is facing the problem of unemployment. Administration data give another picture: there were nearly 2 million new jobs created in 2011. This is a real impact of the Arab Spring as many people have accessed

labour market (even temporarily) due to the increased number of active programs provided by the Government.

The essential characteristics of the labour market have been the same for twenty years: low overall activity rate,

pulled down by the low female participation rates, high youth unemployment, mostly for young women and a

dynamic informal sector. These stylized facts have always been restated by all analysts.

In early 2011, following the social uprising, the Council of Ministers8 provide more facilities to access to youth

employment program with more funding. These decisions are supposed to boost investment and improve the

efficiency of public employment programs. We can say this is the first impact of Arab spring on easing the path

to youth employment. These decisions confirm tax exemptions, hiring subsidies, government-backed credit

guarantees for start-ups created by new entrepreneurs (aged 19 to 50 years’ old), and microcredit for poor households. Although employment policies have been developed since the late 1980s, they have been reinforced

over time with the reorganization of the ANEM and the creation of four new agencies: CNAC, ADS, and the

ANSEJ recently ANGEM. These five agencies (ANEM, ANSEJ, CNAC, ADS & ANGEM) are the main actors

of employment policies and managing active labour market programs in Algeria. By the end of 2011, all existing

agencies are provided with more funds to cover new facilities offered, and the authorities published on the prime

minister’s website that nearly 2 million new jobs have been created. This result is illustrated in the following

chart 1.

3 Public Service Act - JORADP. http://www.joradp.dz/hfr/Dgfp.htm 4 Annex to the policy statement, in October 2010, website access May 2013. http://www.premier-ministre.gov.dz/media/PDF/declarationpg2010.pdf 5 LFS 2010, data published by ONS, website 6 See Press Council of Ministers of 24 May 2010 - http://www.mae.dz/photos/gov/programme.htm 7 Unofficial translation. 8 Council of Ministers of 22 February 2011 http://www.premier-

ministre.gov.dz/index.php?option=com_content&task=view&id=1561&Itemid=261

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Chart N° 1. New Jobs created in 2011

Source: Data published on the Prime Minister’s Website, 2012

Moreover, the new Prime Minister recently stated9 that the objective of five-year plan has reached 80% by the

end of 2012. So there is only 20% left to be met the objective of the creation of 3 million new jobs planned by

2013. On the other side, the LFS survey run in October 2010, reported a slight decline in the participation rate

and the employment level and unemployment rate remains almost unchanged at (10%) between 2010 and 2011.

Table No. 1. Evolution of activity from 2010 to 2011

Year 2010 2011

Labour Force (in million) 10 811 10 661

Employed (in million) 9 735 9 599

Unemployment (in million) 1 076 1 062

Unemployment rate (%) 9.95 9.96

Activity rate (%) 41.71 39.99

Source: LFS Employment surveys, 2010 & 2011, ONS, Algeria

As expected, these results have been challenged by the Algerian authorities, particularly by the former Minister

of Statistics and Prospects. The latter will even prohibit the dissemination of the results of the LFS 201110. The

same scenario is reproduced in 2013. The LFS 2012 results are not yet released. But the Algerian authorities are

already anticipating a decline in the unemployment rate to 9.7% in 201211. This contradiction between

administrative data and survey results is quite apparent. An in-depth analysis is needed to explain why these two

sources shed different light on the labour market issues. In fact, each source produces labour market insights but

also have their own limits, in regard to methods of collecting and producing data. The labour market is not so far

out of social turbulences.

Early 2013, a new player comes in. Unemployed youth in the south of Algeria12 organized many sit-in requiring

immediate action from the government to combat against "exclusion and discrimination” in the national labour

market. Algerian authorities’ response was immediate. The government enacts new decisions13

to promote the

economic integration of unemployed youths living in the southern region. These decisions enforced all firms to

privileged unemployed youth in hiring in areas of the south, to limit wage discrimination, improve the education

system, to remove all the constraints to the development of micro-enterprises and implement inter-sectoral

9 PM remarks during at the national assembly (APN), 2013. http://www.elmoudjahid.com/fr/actualites/33203 10 As reported by the national press, 201 3. The ONS will publish a few months later, the results of the 2011 survey on the website in 2012. http://www.latribune-online.com/index.php?news=66285 11 In a press interview, the new Minister of Statistics and Planning certifies that this rate is acceptable, but at the same time,

he questioned the effectiveness of different programs: "In our case, we have confidence that comes from the ONS. The unemployment rate of 9.7% should be accepted as the sole national rate for unemployment". http://www.algerienews.info/wp-content/uploads/2013/04/Fr-07-04-2013.pdf To reinforce the Algerian position, an IMF expert says that Algeria has the means to reduce "the unemployment rate around 5% " http://www.algeriedz.info/2013/03/13/algerie-une-croissance-de-6-et-un-chomage-a-5-cest-possible 12 The region of southern Algeria covers 10 Wilayat: Adrar, Laghouat, Tamanrasset, Biskra Bechar, Ouargla, Illizi Tindouf El Oued Ghardaia. 13 Prime Minister “Circular decision” dated 11 March 2013-

http://www.minagri.dz/pdf/Divers/2013/Mars/Communique_APS_11_03_2013.pdf

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coordination at the local labour market. Failure to follow these decisions will be condemned. These social

unrests in the labour market are quite contrary to the “satisfecit” of Algerian authorities regarding the

implementation of “South Special Economic Program”: labour market in the South remains a challenge.

In brief, during Arab Spring in the region, Algeria has been spared from any attempt to radical change. Many

analysts14

have developed reasons why Algeria has not experienced a revolution, though all ingredients were

present. In fact, Algeria is a rich country. It has been able to buy social peace. The trauma of the black decade is

still alive. But we can note indirectly Arab Spring has impacted on the government decision to improve youth’s

access to labour market. The more so, we need also to point out that following the Arab Spring in Tunisia, Egypt and Libya, the Algerian effort to combat unemployment has been supported also by many other programs funded

by UN agencies (UN system: UNDP, ILO, World Bank), the European Union and NGOs, for example of GIZ,

Frederick Ebert or USAID, added with other bilateral agreements with France, for example. These external

contributions, albeit modest in relation to the investment of the Algerian authorities, have been a great support to

strengthen its employment policy and fight against unemployment.

Beyond the controversy over data, current debates on the labour market, according to various analysts, are based

on three levels.

At the macro level, analysts based on data from the Labour Force Survey of the NSO (Bouklia, 2012, IMF 2012

Lassassi & Hammouda, 2012) argue that economic growth is insufficient to generate sustainable jobs. This

growth is mainly pushed by the state expenditures with no real impact on labour market. Similarly, it is noted that the decrease of unemployment rate has resulted inversely an increase in jobs in the informal economy. It is

also recognized the low level of activity rate. This rate is pulled down particularly by the female activity rate.

Vocational training is recognized also to be not attractive.

At the meso level, the last uprising in southern Algeria highlights a flaw in the labour market with the lack of an

early warning system by region15. The observatory of employment and poverty16, adopted by the government in

2006, was abandoned. The establishment of inter-sectoral coordination at the local labour market is expected to

compensate for a weakness of a national coordinating.

At the micro level, employment schemes have reached a third generation. These schemes are still able to reduce

social tensions on the labour market but always with additional budgets. In other words, the costs of these programs are becoming heavier. The current economic situation calls for prudence. Or else, reduction in social

expenditures will be inevitable.

These three levels is an overall framework. It calls to focus the strategy of the Algerian economy on its ability to

significantly change the behaviour of labour force, to establish a territorial equity and job creation and regularly

adjust the cost of the programs. Maintaining these expenses remains a challenge for the authorities.

The current financial context reminds us of the fragility of the Algerian economy. In the first quarter, 2013, we

witness the volatility of energy prices on the world market. There has been a decline in the volume of oil

exportation, the first external resource. A downward trend is observed “the balance of payments is estimated at

only U.S. $ 0.846 billion against a surplus of 4.164 billion U.S. dollars in 2012", states recently the Algerian

Minister of Finance17. This decline is reflected in the level of reserves which mark a first change after a period of steady increase. The outstanding reserves’ amount is estimated at 189.768 billion U.S. dollars against 190.661

billion US dollar at the end of 2012. Similarly, we observed an increase in importation of about 8.6%.

It should also be noted that a budget deficit of 40 billion U.S. dollars has been experienced in 2013. The

absorption of this deficit is drawn from the “Regulation Fund Reserve” (RFR), estimated at 77.2 billion U.S.

dollars. Clearly, the situation becomes unsustainable. If the same scenario occurs in 2014, the RFR will be

exhausted. Hence, growth, driven by strong injections of the state budget, would experience a slowdown.

14 Cf. Speeches explaining why Algeria has been spared of the Arab Spring drafted by France TV5 15 The current monitoring system is based on administrative data and an annual national survey conducted by the NSO with a sample of 15 000 households, with a single turn. See http://www.ons.dz/NOTE-METHODOLOGIQUE, 58.html 16 Cf. Executive Decree No. 05-212 8 June 2005 on the establishment, composition and functioning of the National Observatory of Employment and the fight against poverty. http://www.joradp.dz/JO2000/2005/040/FP12.pdf 17 Bank of Algeria – 1st Quarterly Report, 2013.

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2. Main Features of the Algerian Labour Market

The main features are the labour market can be identified from LFS. Two sources of information provide some

lights (ONS and CNAS) on wage level.

Rise of population growth and stagnation in female participation rates In recent years there has been an upturn in the birth rate. This is due by a sudden growth in marriage rate and a

decrease of the mortality rate (Table N°1 – Annex). Studies on demographic transition in Algeria had omitted

this possibility. Algerian population is estimated at 37 million residents in 2012. The birth rate increased by 1.3

‰ between 2011 and 2012. We will reach a million births in 2014. If this trend continues it may have the effect

of pressure on the labour market in the future.

The overall activity rate is estimated at 42% in 2010, declining to 40% in 2011 on nearly 27 million potential

labour force. The low rate of activity for a population is a heavy burden for active labour force. This rate is

pulled down partly because of behaviour women's activities. The female participation rate has stagnated between 2010 and 2011, with 14.2% according to LFS data. In general, it peaks for women aged 29 -25 years, and then it

reduces gradually up to old ages (Chart 2).

Chart N° 2: Female activity there rate by age groups from 2009 to 2011

Source: designed from LFS Data, ONS, Algiers

Weakness of the productive system The Algerian economy is characterized by a strong service sector, 69% of workers in the sectors "trade and

services”. The construction sector comes second with 16% of jobs. Then industry with 14% and finally

agriculture has only 11% of labour force in 2011. The evolution of the employment between 2001 and 2010 by

sector shows a significant decrease in agriculture less than 10 points. We witness also instability of the

workforce in the industry sector (less than 0.4%) (Cf Table 2 – Annex). An increase is observed in the

construction and public works (8.8 points) and in the trade and services (1.7). As shown in Table 2, in 2011

employment declined in agriculture (0.9) and in the construction sector (2.8 points), however, the volume has increased in “trade and services” (3.2 points) and a slight increase in the industrial sector (0.4).

Table No. 2. Evolution of employment shares of economic sectors from 2003 to 2011

Economic sectors 2003 2005 2007 2010 2011

Agriculture 21.13 17.16 16.05 11.67 10.77

Industry 12.03 13.16 10.62 13.73 13.72

Construction 11.97 15.07 13.99 19.37 16.62

Services/Trades 32.58 35.36 36.46 55.23

58.89

Administration 22.29 19.25 22.88

Total 100.0 100.0 100.0 100.0 100.0

Source: LFS surveys, National Office of Statistics

Dominance of the private sector, with a continuous rise in temporary jobs The labour market is characterized by the dominance of employment in the private sector. The latter took over

the public sector since the 1990s. It should be noted that in 1989 the public sector was the biggest employer, with

54% of jobs. By 2011, the share of public sector employment decreased to 40%, while the share of private sector

jobs increased to 60%. Non-market public service has the highest share with 77%, while public economic

enterprises employ only 11% (See Tables 3 and 4 Annex). However, most of wage workers in the private sector

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are employed on a temporary basis (79.5% in 2011), while permanent wage workers are concentrated in the

public sector. This graph shows the overall evolution of the wages from 2003 to 2011. The two curves have

crossed in 2010. A break appeared in 2011. Permanent wage workers curb climb slowly, while the non-

permanent one declines slightly. Is this a contextual break? A risk of a return to the trend is not definitely

avoided.

Chart N° 3. Evolution of Wage Workers (permanent and non-permanent) from 2003 to 2011 (%)

Source: designed from LFS Data, ONS, Algiers

Unemployment is particularly an urban factor, with greater vulnerability of women and young By geographical dispersion (urban/rural), in 2011 as well as in 2010, unemployment rate is higher in the urban

world with a rate of 10.7% against 8.7% for rural areas. It is quite sure that regions’ unemployment rates are

diverse with high inequalities, but as the LFS’s sample is drawn on a national level, no one knows exactly the

unemployment rate by Wilaya or region. Demand and supply registered by ANEM are used by Local Authorities

but these data are not released to the public.

The overall trend indicates a greater vulnerability of women, with an unemployment rate twice more than that of

men. A slight variation was observed in 2011, unemployment rate for males rose slightly, it goes from 8.1% to

8.4% while women’s rate curbed down almost 2% from 19.1% to 17.2% between 2010 and 2011. This decrease

is caused by a drop in the unemployment rate (less than 2.4%) of adult (over 25 years) in particular. There is a

persistent gap in 2011 between youth unemployment (16-24 years) and adults (25-60 years). The youth unemployment rate is estimated at 24%, with a strong gender disparity, girls’ rate rises to 38%, against 19.1%

for men. Women’s employment behaviour can be explained by level of education (cf Chart N° 7, infra).

Chart No.4. Evolution of Labour force, Employment and Unemployment from 1982 to 2011 (in million)

Source: designed from LFS Data, ONS, Algiers

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Chart No. 5. Youth versus Adult Unemployment by Sex from 2001 to 2011 (%)

Source: designed from LFS Data, ONS, Algiers

Slowdown in the Informal Employment The dominance of the private sector has resulted in a growing dynamics of the informal sector. Social unrest in

January 2011, were leaded by these outsiders. After a period of tolerance, Algerian authorities have conducted

enforcement actions, accompanied by integration measures of informal trade in structured markets. The level of

informality (defined by the absence of social protection18 of the non-agricultural employment) is estimated at

40.7% in 2011 against 45.6% in 2010. If we calculate the informal employment rate only in the private sector,19 much higher rate is found than the first one (classical rate for the total employment).20 According to the

calculations based on the Labour Force Survey of 2011, the informal employment rate reaches to 73.3%,

meaning 7 in 10 employed people do not have social security coverage in the non-agricultural private sector.

This proportion increased by 5 points between 2001 and 2011.

According to the World Bank (2011), the size of informality as a percentage of GDP is 34.8%, the share of self-

employment in total employment is 29.6%, and the share of labour force who are not covered by social security

is 63.3% in Algeria. The national estimation is solely based on the LFS annual data, while the World Bank

estimate was an average rate between 2000 and 2005.

Chart No. 6. Evolution of formal/informal employment rates and unemployment rate (2001-2011) (%)

Source: designed from LFS Data, ONS, Algiers

This chart shows the reverse trend between the rise of employment in the informal sector and the decline in the

unemployment rate, observed particularly since 2003. A slight drop in informal employment is visible in 2011,

coupled with an increase in formal employment. This revival of the modern sector was only possible with a

18 Registration to social security is a legal requirement in Algeria cf. the law No. 83-11 of 2 July 1983 on social insurance. 19 Informal employment%* = [(employed population (non-agricultural) in the private sector not affiliated to social security) / (total employment (non-agricultural) in the private sector)] * 100 20 % Informal employment = [(employed population (non-agricultural) not affiliated to social security) / (total employment

(non-agricultural))] * 100

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renewed recruitment in the public service21. Return to the former trend is expected due to the external shock to

the Algerian economy in early 2013.

Employment and training: skills mismatch High unemployment rate of graduates from higher education, as well as vocational training is also a feature of

Algerian labour market. This situation is somewhat paradoxical given low education level of the economy: only

12% of employed labour force has a higher education level. In addition, import policy of skilled foreign workers

is maintained by the government. Skills mismatch is hence an important challenge.

Figure N° 7. Evolution of Unemployed by Level of Education and by Sex (%)

7.1. Female 7.2. Male

Source: designed from LFS Data, ONS, Algiers

Unemployed by level of education shows that the rate has decreased for those with a lower level of education. In

contrast, the unemployment rate has increased significantly (more than 13 points) to the category of people with

a higher educational level. The situation is more critical for women. Unemployed rate for women, with a higher

level of education, has increased significantly (more than 24% between 2001 and 2011). More educated women

are unemployed compared to women with a lower level to higher level. We can note also a decrease of 6 points

for university women between 2010 and 2011.

This is different for men. Even the number of unemployed has increased (6 points) for men with a university

level, but their numbers are lower than those with lower levels. Those with a medium level of education are

increasingly concerned about unemployment. In 2011, unemployment fell for all education levels except for the middle level, where it increased by 6 percentage points between 2010 and 2011. Graduates of vocational training

are at greatest unemployment especially during the first year, for boys as well as for girls. The average

unemployment rate for graduates of vocational training has more or less stagnated. It is estimated at 12.5% in

2010 and 12.4% in 2011.

Migration flows

Algeria maintains its strategy (launched in 2003) to import foreign workers for the achievement of its major

economic programs mainly in construction sector (see Table 3 below). The Chinese labour is the most important

part of legal immigration. There are also irregular migrations (most sub-Saharan). The trend has slowed since the

outbreak of conflict in the Sahel and rising border insecurity in southern Algeria (Mali, Niger), East (Tunisia,

Libya) and West (the Morocco). Irregular migration “Harga” is still a challenge. Other routes22 are devised during the last decade by migrants to counter security systems set up by Algerian and European maritime forces

in the Mediterranean.

21 The permanent employment in the public sector increased by 200 000 new jobs in 2011. LFS, ONS. 22 Cf. Departure by plane to Turkey, Greece and entry into the Schengen area - procedure observed in 2012.

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Table No. 3. Number of foreign workers by economic sectors in Algeria

Economic sector Number of foreign workers with work permits

Construction 25,967

Industries 18209

Service 1584

Agriculture 37

Total number of foreign workers 45,797

Number of foreign employers 9558

Total number of overall foreigners 55,355

Regular Algerian emigration has witness a shift to other destinations. Data from the Ministry of Foreign Affairs

reports a stock of 1.9 million of Algerian registered abroad. France still remains the dominant destination along

with Spain, North Africa and other Gulf countries. This new age of regular migration is distinguished by a new

profile23. In a recent study (2009 –IIES/ILO), it was observed that Algerian moving to work in North Africa do

have a higher education than those in France. There are also women workers moving abroad now, a pattern

rather new for Algeria. The dynamics of returns, engaged since the 2000, experiencing a slowdown in 201224.

Wages system

The wage system has undergone deep changes with the slowdown of permanent employment and the rise in

temporary employment. The minimum wage (SNMG) was set up in the nineties for all sectors, public and

private, national and foreign. Under the SAP, the Tripartite Dialogue has introduced a new clause (87 Bis), in

order to include all bonuses in the minimum wage. After the SAP, having stabilising all macroeconomic

indicators, UGTA plead for the withdrawal of this article in every Tripartite Dialogue meeting, but in vain.

Algerian authorities have readjusted the minimum wage (SNMG) in 2012, which was increased to 18 000

AD/months, without cancelling the clause 87bis. 25 This clause was added in the 1990s, introduced in the

calculation of the minimum wage, inclusion of all bonuses and allowances for the position of labor. The

increased cost of minimum wage (18000 DA) is perceived to be unbearable by companies, which remain still in

debate between the government and the unions. Its application is problematic in the actual context.

Wages in the public sector follows two logics. Wage in the public service is fixed, according to a national grid,

based on a value of an index point. Bonuses are added to salaries, according to sectors, following negotiations

with the union workers. In the public economic sector, the salary is based on negotiations between the sectoral

authorities (company management) and the workers' union. Wages in the private sector depend on the

negotiations between trade union and employers. Unionism is often lacking in very small economic units, which

represent 95% of SMEs in Algeria.

There is no systematic and regular monitoring of wage developments in Algeria. The National Office of

Statistics has run two surveys on wages (2009 & 2010) in public and private companies, with a staff of over 20

employees. The results are necessarily limited as they do not cover all firms. Another source, more or less

reliable, is that of CNAS, who publish (in 2006 and in 2011), the salaries of the various contributors sector (public and private, domestic and foreign). The data (ONS and CNAS) reflect only the formal sector wages. The

wages in the informal sector is unknown. No investigation has been conducted to identify the evolution of wages

in this sector (See Table 4 below).

23 Some authors speak of a 4th age of migration (cf. Michael Collyer, 2012). Moving targets: Algerian state responses to the challenge of international migration, p. 107-122 in Revue Tiers Monde 2012/2 (210) 212 pages, Paris http://www.cairn.info/resume.php?ID_ARTICLE=RTM_210_0107 24 Algerian Customs Data on changes in residential end of 2012 25 This section was added in the 1990s, introduced in the calculation of the minimum wage, all bonuses and allowances for

the position of labor. Its costs are perceived to be unbearable for companies following an increase of SNMGs to 18 000 DA. http://lestrepublicain-annaba.com/article/?id=5360

13

Table No. 4. Average Wages by Public and Private Sectors in Algeria (AD/ month)

Sectors 2006 2011

Public sector (excluding administration) 24842 42681

Administration 20770 45164

Other public sector 7911 13315

Private sector 18842 27759

Other private sector 18866 39636

NGO organisations 19695 33098

Foreign organisations 40743 52259

National average 21667 36273

Source: National Agency for Social Security - 2006 & 2011,

http://www.cnas.dz/SiteFrancais/index.php?p=telchrg

3. Employment Policies and Strategies

The Ministry of Labour has the first role (with three agencies ANEM, ANSEJ and CNAC). However, the

Ministry of National Solidarity keeps some activities linked to the fight against poverty (ANGEM and ADS).

Other sectors are involved (less actively) in employment policies, such as the Ministry of Agriculture, the

Ministry of Industry and Handicrafts and the Ministry of Industries with the agency ANDPME and ANDI.

At the strategic level, Algeria has not innovated in employment policies. The path taken in 2008 has been simply

strengthened. There are many sets of labour laws which are regularly updated but still remain confusing. Some ten years ago, it was decided by the Tripartite Dialogue to produce a new Labour Code. Nothing has been

released up to now, so the Labour Code is still pending. Some adjustments were made in the wage increases.

The guaranteed minimum wage was revised upwards without impacting on economic sectors. Retirement has

had a slight increase in 2013. Union struggles, including trade unions “autonomous sections” continue to

challenge Algerian authorities in order to obtain a national and international recognition.

"National Employment Policy" (NEP) adopted in 2008 "National Employment Policy"26, adopted by the government in 2008, remains up today, the only reference on

the orientation and strategies to promote of employment and to fight against unemployment. As we have already

noted, the principle of the call for foreign labour is maintained only for foreign operators. There were additional

facilities to access employment programs in February 2011. Recently (March 2013) and other facilities have been granted, including the integration of unemployed people living in the southern region of Algeria. The

employment sector will be further strengthened with the program "Youth and Employment” (EU Funds)

program to be experimented on four departments27.

National Employment Policy fixed 11 targets

1. The fight against unemployment by an economic approach

2. Promotion a skilled work in the short and medium term

3. The development of the entrepreneurial spirit

4. Adapting courses and training profiles to the needs of the labour market

5. Support for productive investment to generate jobs

6. The creation of inter-sectoral coordination bodies

7. Modernization of services for monitoring, control and evaluation

8. The improvement and consolidation of intermediation in the labour market

9. The continued effort to create 2 million jobs under the presidential program the horizon 2009 10. Strengthening the promotion of youth employment and improving recruitment rates after the induction

period

11. Reducing the unemployment rate to less 10% in the 2009-2010 horizon'' and less than 9% between

2011 and 2013.

26 cf. website of the Ministry of Labour and Social Security. http://www.mtess.gov.dz/mtss_fr_N/emploi/2008/OBJECTIFS% 20AND% 20AXES 20DU%%% 20Plan 20D'ACTION.Pdf 27 EU-funded project is still pending at the Ministry of Labour, which is the beneficiary of this program, approved in 2012

14

To achieve its objectives, the authorities defined 7 areas of intervention:

1. Support for the economic sector by creating jobs

2. Promoting skills training (including on-site to facilitate integration in the world of work)

3. Promoting a policy of incentives for enterprises to encourage job creation

4. Promoting youth employment

5. Improving and modernizing of the management of the labour market

6. Monitoring, control and evaluation of the management mechanisms of the labour market

7. Creating and establishing inter-sectoral coordination bodies

The labour legislation needs adjustments In terms of legislation, no major changes have been made since 2011. The tripartite decision to produce a

“Labour Code” since the 2000s is still under progress28. As noted before, it seems that no one knows the exact

content of the Labour Code! Social movements and negotiations between the government and trade unions approved in 2011 are related to the rules laid down by the Public Service Act, agreed last 2008. The revaluations

of wages have been negotiated and admitted by both parties with a three years’ retroactive effect.

Minimum wage increase with no implications for the private sector SNMG has been readjusted by the tripartite dialogue in January 2012. It has been fixed 18 000 AD/month29 i.e.

an increase of 20% in relation to the threshold in 2010. We already have noted that the minimum wage (since

1994) include bonuses paid to employees. Bonuses are fixed by the branch or enterprises collective agreements

and they are compulsory for both sectors. Thus, it is not surprising that employees are paid well below the

minimum wage.

The increase SNMGs has an impact on the salary scale of the economic sector at the time of negotiations on the

revision of collective agreements between workers to employers. A range of other benefits (such as retirement, unemployment allowances) are indexed on the SNMGs. There was also a rise of retirement pension, with an

increase of 11% recently30.

Organisation of independent Trade Unions as an alternative

The actors in the labour market remain unchanged the State, UGTA, Employers' Organizations and other

professional organizations. Composition of the tripartite evaluation of the economic and social pact is –

according to press reports and interviews of union and employers: there are four Private and one Public

Employers’ Organizations in the Tripartite Dialogue. Two other NGOs also attend the Dialogue (FCE and

SEVE). The weight of UGTA is really unknown. Unionization rate is only known under strike with their

participation rate, which is always controversial.

The struggle over representation of workers in the national and international level is still a challenge. Within the

tripartite, only UGTA represents workers and is recognized at international level (within the ILO). There are

other registered unions. But they don’t have national scope which is required for admission to the (national and

international) social dialogue. Some autonomous trade unions (compared to the UGTA) and other non-registered

unions regularly try demonstrations to support workers' demands but fail to be invited by the government in

tripartite social dialogue.

4. Employment Services and Active Labour Market Programs (ALMPs)

Public services for the implementation of the employment policy and active labour market programs are shared

between several departments and/or agencies that are shared between two Ministries. ANEM ANSEJ and CNAC

are under the Ministry of Employment, Labour and Social Security (MTSS), while ADS and ANGEM are under

the Ministry of National Solidarity. These Agencies have representatives at the local government level, the

Department of Employment Wilaya (MTSS) and the Department of Social Affairs (MSN).

For the presentation of these services, we have grouped them into two groups: services for easing social tensions

(ANEM and ADS) and services for the creation of economic activities (ANSEJ, CNAC and ANGEM).

28 Speech to the Labour Code, cf. Press - interview INT / 29 Increased SNMGs, cf. text - interview CNR 30 Cf. Press note of the Ministry of Labour in 2013

15

4.1. Job placement services for the unemployed

The two agencies are involved in reducing tensions on the labour market are ANEM and ADS. Yet the mission

of the ANEM a public service of intermediation is now classified as its classical activity. The agency is invested

through the DAIP, support socially young people looking for a job. The mission of the ADS originally aimed to

reduce poverty by providing a social safety net following the implementation of the structural adjustment

program in the 1990s.

4.1.1. The National Employment Agency (ANEM)

The organization of ANEM was revised in 200631. This decree fixed its missions and the organization. It is under

the supervision of the Ministry of Employment, Labour and Social Security. This decree also defines its

functions on the regulation of the labour market.

To accomplish its tasks, the Agency32 has:

7 Central Departments;

11 Regional Centres (AREM) whose jurisdictions extend several provinces;

48 Wilaya offices;

167 Local offices (ALEM), whose jurisdictions extend to one or more municipalities. It should be noted that since 200433, ANEM reinstated its monopoly on labour intermediation: integrating private

placement services, municipalities, companies must to refer to ANEM for any vacancies or new job creation.

ANEM continues its modernization to improve its public services. Since 1990 up to 2004, it was compulsory for

all employers to inform ANEM all their vacancies. But employers were not condemned or fined if they fail to do

so. After 2004, this is now the case, except for public service. Vacancies for civil servants are published on the

website of the Public Service Directorate.

Beyond public investment, the agency has received other financial support for training (France, EU and UNDP).

The Agency has a workforce of 3 097 workers to conduct its missions, spread across its services in the country.

Apart of its classic mission, ANEM has also a new program for youth employment, since 2008.

Classical mission: job intermediation The classical activity of ANEM is based on intermediation of the labour supply and job demands. Its activities

have been somewhat accelerated from 132 000 vacancies in 2006 to 234 000 in 2010, falling down to 182 000 in

2011 (see Figure 1 in the Annex). Job demands have also recorded an increase during the same period, rising

from 96 000 in 2006 up to 181 000 job-seekers in late 2010. The placement rate increased slightly from 73% to

77%. This implies the existence of a rate of unsatisfied vacancies34. This classical mission of ANEM is quite

distinct from other programs. Jobseekers are placed in the vacancies offered by employers, mainly private.

DAIP (Professional Insertion of Youth)

ANEM also inherits since 2008, in addition to its core mission of intermediation in the labour market, the management of youth employment programs devised in the light of "National Employment Policy" (see Table 5

for the programs managed by ANEM). With the inclusion of the DAIP (see box next page) in 2008, ANEM has

become an important player in the easing of tensions on the labour market. The three components of DAIP (CID,

CIP and CFI) provided contracts to 278 000 beneficiaries in 2009, 273 000 beneficiaries in 2010 and much

higher 661 000 beneficiaries in 2011. According to unofficial data, in 2012, the number of beneficiaries would

be roughly 240 000, which is a drastic fall in relation to previous year.

Similarly, an additional measure (CTA) has been implemented in the last years. The coverage of this program

has increased within the years. In 2009 there were only 8 000 beneficiaries of the three components, who were

able to obtain a formal employment in 2010. The volume grows to 24 000 people in 2011, who are permanently

inserted to companies with a state contribution to subsidize wages for a period of three years. In 2012, ANEM

have recorded about 41 000 recruitments in the CTA measure, an improvement of ‘sustainable’ integration of DAIP beneficiaries.

31 Decree of 1986 on the reorganization of the ANEM 32 Presentation ANEM - workshop World Bank, 2011. 33 Law No. 04-19 of 25 December 2004 concerning the placement of workers and the control of the job that allows the private sector to engage in investment activity, especially following the ratification of Convention 181 the International Labour Organization (ILO) adopted in 1997 and entered into force in 2000 34 It should be noted also that there are private services for intermediation. Their role is still marginal, with less than 10,000

jobs/ year. All private agencies must report regularly to ANEM all the demand and supply they registered.

16

Table No. 5. ANEM and Youth Employment Programs

Programme Nature Duration Compensation Observations

DAIP (Professional Insertion of Youth Program)

Ministry of Labour, Employment and Social Security (MTESS), consists of three distinct components

Graduate

Integration

Contract (CID)

intended for first job seekers,

tertiary education or senior

technicians who receive support for their sustainable recruitment

priority within public and private

economic

Economic

enterprises:

One year

Administration:

A year and a half

University Degree

15 000 AD/month

Senior Technician:

10 000 AD / month

The employer's

contribution to

Social Security at

the expense of the

state

This measure

replaces the CPE

(Pre-employment for graduates)

Professional

Integration

Contract

(CIP)

aimed at young first job seekers

leaving secondary education or

VET Centres (CFPA) (including

apprentices)

Firms:

One year

non-renewable

Public

Administration: One year

renewable

In Firms: 8 000

AD/month

In Public

Administration: 6

000 AD/ month

Employer's share

of contributions to

the Social Security

Scheme in charge

of the State

At the end of the

contract CIP

ANEM may

propose a contract

Subsidized Work

(CTA) in firms and if the person

refuses, he loses

the right to remain

in CIP.

Training

Insertion

Contract

(CFI)

Targeted young jobseekers

without training or qualification.

These young people are placed

either in various work projects

initiated by local authorities or by

different sectors for the duration of the project, either in training for

craftsmen

One year

non-renewable

Bursaries

4 000 AD/month

during their

training for

craftsmen and the

pay of the position occupied if they are

placed starts (the

laws and

regulations in force

are applicable in

this case).

Subsidized

work

contracts

(CTA)

Is proposed after the end of one

of the contracts cited above (and

sometimes earlier if the employer

agrees)

Three years Sharing of labour

costs between the

state and employer

4.1.2. The Social Development Agency (ADS)

ADS was created in 199635. Its main mission is to combat poverty, to support unemployment and fight against

social exclusion, management of all employment pro-poor programs (CPE, ESIL, TUP-HIMO and IAIG) under

the Structural Adjustment Program (SAP). These programs also target the social integration of job seekers,

especially young graduates. The programs managed by ADS range from measures to help the integration of

young people, in the sense that their transition would increase their employability when they finish the program.

It is supposed that people who went through in one of its programs will acquire some working skills and

experience, hence reinforcing their employability on the labour market.

The Agency has its Headquarters in Algiers, 11 Regional Offices, 48 Wilaya Offices and 254 Field Social Units

(CPS), an average of 4 per Wilaya. The total workforce (2012) is 3528 workers: 1576 at local level (Communes) 179 at the Wilaya Office (DAS) and 981 in the Field Social Units (CPS). Like ANEM, ADS helps to ease social

tensions on the labour market with several programs grouped under the label “program for social inclusion”

(DAIS) and “program for youth graduates” (PID) (See Table 6).

35 The Executive Decree No. 96232 of June 29, 1996, amended by Executive Order No. 03241 of July 2, 2003

17

This Agency classical mission is to combat poverty. The Agency leads many programs with the contribution of

all Communes (Municipalities) targeting poor families, within working age limit (16-65 years). The TUP-HIMO

is a program for rural unemployed – mainly for Public Collective Works. ESIL and IAIG provide an allowance

for public works mainly in public services and other government schools. It runs also other community program

for rural villages, sometimes with international assistances.

In regard to employment actions, we observe a downward trend in the last three years for the different programs

of the ADS (PID, DAIS, AIG, IAIG, TUPHIMO). In spite of this, the amount of beneficiaries is higher than the different programs of ANEM (see Figure 1 in the Annex). The number of PID beneficiaries were 48 000 in 2010,

they fell to 42 000 in 2011 and to 13 000 in late 2012. The DAIS has the same trend: 90 000 beneficiaries in

2010, the volume increased slightly in 2011, then dropped to less than 37 000 in late 2012. IAIG is still attractive

with 252 000 beneficiaries in late 2012. The last program (IAIG) is merged within the DAIS since 2012.

TUPHIMO follows the same trend, with a decrease in activity from one year to another. In 2010, the number of

jobs generated by this measure is estimated at 33 000, the volume drop at 24 000 in 2011 and a further fall is

observed in late 2012, with only 19 000 jobs created by the various projects undertaken in this program.

Table No. 6. Social Inclusion Programs

Program Nature Duration Compensation Observations

Social Inclusion programs developed by the Ministry of National Solidarity, is an instrument to

fight against poverty and youth unemployment It is directed towards a social treatment of unemployment and is

managed by the Social Development Agency (national level) and implemented locally by the Departments of

Social Action at Wilaya level (DAS).

PID

(Insertion

Program for

Graduates)

Target young university

graduates and

technicians without

income in precarious

situations or with

disabilities. Second criteria: youth aged 19 to

35 years, no income.

one year, renewable

once

University:

10 000 AD/month

Technicians :

8 000AD / month

+ Social insurance

supported by the state.

AIG (Allowance

for Activity or

Community

Service)

Its objective is social

inclusion of

disadvantaged people in

active and employable

age. It addresses the

social categories that

have no income.

One year

renewable but

Indeterminate in the

ground realities

3 000 AD / month

+ Social insurance

supported by the

State.

DAIS Public

works for social

integration,

replaces ESIL (Jobs Employees

Local Initiative)

and IAIG (or

Allowance

Activity of

General Interest)

This measure aims to

place unemployed 18 to

59 years, without

qualification in temporary employment

positions in work or

utilities requested by any

firms or public

administration.

Two years

renewable 2 twice

6 000 AD / month

+ Social insurance

supported by the

State.

ESIL is integrated

under this new label

IAIG also is

integrated under this label since march

2012

4.2. State support services for the creation of micro-enterprises

Three agencies (ANSEJ, CNAC and ANGEM) are involved in supporting the creation of activities, by

promoting entrepreneurship, for youth but also for other social groups. The mission of the CNAC originally is to

ensure that unemployment benefits to laid-off workers for economic reasons under the SAP during the nineties, like ADS. More than 400 000 workers, mainly from public firms, were fired. This agency turns to support

entrepreneurship in 2011. Microcredit funding has always been focused to fight poverty. This program was

anchored in the ADS. It was only during the 2000s, the mission of microfinance has led to an Agency -

ANGEM.

18

These agencies now are configured almost the way, with a Headquarter in Algiers, some Regional Agencies and

at least 48 Local Agencies, covering the whole of Algeria. Since 2011, these three agencies also operate in the

same way for granting funds to create activities, generating employment, with distinction to the amount of

credits and ages groups. Two modes of contracting credit are offered (i) bilateral: personal contribution (70%)

and Agency support with no interest (30%), and (ii) triangular: personal contribution (1% or 2%), Agency

support with no interest (28% or 29%) and Bank loan with interest rate (70%). The bank loan is guaranteed by a

Fund created by the State, and beneficiaries’ contribution to this fund is fixed at 1% of credit granted. Each

agency develops also other specific attractive programs. The Agency grant with no interest is the advantageous

part, but it must be paid back only after the payment of the bank loans with interest are.

4.2.1. The National Agency for Employment Support of Youth (ANSEJ)

ANSEJ was created in 199636. It supports youth employment and aims to encourage the creation and expansion

of production activities of goods and services by young entrepreneurs, through the program of micro enterprise.

The mission is ANSEJ (i) to support, advise, support and provide training for young people with project ideas,

and then (ii) to fund projects initiated by young entrepreneurs and finally (iii) to monitor micro-businesses

created by young people. ANSEJ was operational two years later37. Promoting micro-enterprises is accompanied

with a series of benefits38 for a period of three years or more, including a tax exemption on the income tax, corporate tax, the lump sum payment and property tax. They are also exempt from transfer duty and registration

fees for all equipment imported.

All facilities are offered by this agency are available on internet39 for young promoters. The notion of “young” is

extended in Algeria: 19-35 years’ old and up to 40 for the managers40. This age requirement is also backed by

one’s qualification and /or know-how recognized. To conduct its program, ANSEJ employed now some 1942

employees, 526 of which are women. The two funds pattern is proposed: Bilateral or Multilateral with a

maximum of 5 million AD (with 2% personal contribution), and 10 million AD (with 1% personal contribution).

Other specific programs are offered – as a loan to buy Mobile Working Car (example for plumbers or

electricians) or a loan for renting a local to run a collective Cabinet (example, group of lawyers or architects).

In terms of implementation, ANSEJ has experienced ups and downs since its creation (See Figure 2 in the Annex). Only 7 279 projects were funded by ANSEJ in 1998, 10 000 projects in 2000 and 6 700 projects in

2004. In 2005 it reached 12 000 projects, then doubled to 24 869 in 2009, and exceeded 30 000 projects from

2010 onwards. Thanks to facilities offered after the Arab Spring, the number of funded projects reached to

42 621 in 2011 and further increased to 62 812 in 2012. The number of actual jobs created by these micro-

enterprises is not really known. An estimation is provided with a ratio of 2.5 jobs per project, with an estimation

of 164 530 new jobs created in 2012. The multiplier is supposed to be an average number of jobs created per

project. In order to get a reliable pictures of these jobs, a regular monitoring and evaluation of the projects must

be conducted, but this is not done.

4.2.2. National Unemployment Insurance Fund (CNAC)

The CNAC was created in 199441 in the context of reducing the social costs of the SAP. Its main mission is to

grant unemployment benefits to workers fired for economic reasons. This initial mission is still valid but there

very few people on dole, who benefit from this benefit now. The Agency is very rich in terms of financial

resources.

It has expanded its activities to support its beneficiaries the creation of an economic activity. Since 200342 it acts,

like ANSEJ, in supporting fired workers under its scheme, aged 35-50 years, to the creation of activities of goods

36 Executive Order No. 96296 of September 8, 1996, establishing and determining the status of the National Agency for Supporting Youth Employment, amended and supplemented by Executive Order No. 98231 of July 13, 1998, and Executive Order No. 03288 of September 6, 2003. 37 Executive Decree No. 96-296 of 8 September 1996 establishing and determining the status of ANSEJ, amended and

supplemented by Executive Decree No. 98-231 of 13 July 1998, and Executive Order No. 03 -288 of 6 September 2003. 38 Ordinance No. 96-31 of 30 December 1996 Finance Act, 1997, amended and supplemented by Law No. 3-22 on the Finance Act 2004. 39 http://www.ansej.org.dz 40 Executive Decree No. 03-290 of 6 September 2003 laying down the conditions and level of assistance to young entrepreneurs. 41 Executive Order No. 94188 of July 6, 1994 on the status of the National Unemployment Insurance Fund. 42 Presidential Decree No. 03-514 of 30 December 2003 on the support to the creation of activities by older unemployed

entrepreneurs thirty five (35) to fifty (50) years. ( jo No. 84 of December 31, 2003

19

and services. After the Arab spring43, the program is open to all unemployed, aged 30 to 50 years. Its exclusivity

for people who were fired and on dole is discarded. Formerly, the agency was opened only to its beneficiaries

that are workers fired for economic reasons. Since 2011, the CNAC micro-enterprise support program is opened

to all unemployed in Algeria.

The Agency develops the two modes of loans (bilateral and triangular) as mentioned above. The only difference

with ANSEJ is the age group. And CNAC also offers specific training program on employability within its clubs.

Its organization remains unchanged, with a Headquarter in Algiers, 13 Regional Offices and 48 Local Agencies

in each Wilaya. It has just strengthening its capacity (1762 employees), with the hiring of more than 200 new employees in 2011 to carry out its new mission, without abandoning its traditional mission in regard to workers

fired for economic reasons.

In terms of implementation, the CNAC has funded 18 490 projects in 2011, doubling to 34 801 projects in late

2012. The number of jobs generated by these projects in 2012 is estimated at 87 000 with the same method of

measurement provided by ANSEJ; i.e. a ratio of 2.5 jobs per each funded project. Both CNAC and ANSEJ state

that only1.5% of micro-enterprises have had difficulties to pay back the bank loans. Despite the ups and downs

of the implementation of both programs (ANSEJ and CNAC) and the evolution of micro-enterprises and jobs

created since 1998, we see a positive trend after 2008 that shows increasing number of enterprises financed and

jobs created in the last years (Figure 2 in the Annex).

4.2.3. National Agency for the Management of Micro Credit (ANGEM)

ANGEM created in 200444. As mentioned before, its main mission is to alleviate poverty by providing a

microcredit to poor persons. Microcredit was introduced by the state at the end of the nineties. The regulatory

system of microcredit, established and implemented by the government in 199945, falls at first with a view to

promoting small economic activities "independent, work at home, small business, craft goods and services up to

the limit of the micro business." By actively participating in the promotion of employment, "the micro-credit is

an instrument to fight against unemployment and poverty".46 As for the creation of activities and employment,

microcredit would have the effect of reducing unemployment, alleviating poverty and social exclusion, and

gradually eliminating the informal economy.

This agency, like the ADS has a Headquarter in Algiers, 10 Regional Offices, 49 Local Coordination (Wilaya

level) and 549 Support Units. In 2012, the employment agency employed 1825 workers, 634 of which are

women. Before Arab Spring, ANGEM has developed two programs providing funds “with no interest” (i) to

buy raw materials and (ii) to create an activity, not necessarily an enterprise (for example, home-based activity

for women). After Arab Spring, there has been a change in its program. It is aligned on the ANSEJ model:

bilateral and triangular – with a maximum fixed at 100 thousand AD to 1 million AD. Anyway, its classical

mission continues, funding people to buy raw materials. This is the bulge of its activity. According to the data of

the agency, we have a steady increase: the two types granting loans without interest: to purchase of raw materials

and to create an activity (project). The majority goes in the first category.

In 2005, ANGEM started with less than 4 000 loans, with a very positive evolution after 2008 in the number of

enterprises financed (Figure 2 in the Annex). It has reached the threshold of 451 608 projects at the end of 2012,

with nearly 423 000 of which were for the purchase of raw materials in home-based activities. In terms of

employment, we do not have an accurate assessment. Estimation is used with a multiplier of 1.5 jobs / loans.

From its creation up to now, the agency would have generated nearly 680 000 jobs during its existence. More

than a half (56%) of this amount comes after Arab Spring..

These five institutions are the key actors on the labour market, each equipped with different functions,

programs and target groups. Table 7 below presents a summary of information given on these five labour market

institutions and their instruments for an easy record of readers. According to official sources, they contributed to

72% of the jobs generated in 2011, while three agencies involved in microfinance (ANSEJ, CNAC and

ANGEM) contributed to 15% of jobs in late 2011. However, it should be emphasised again that no regular monitoring and evaluation is conducted on the beneficiaries after the programs ended. This brings the number of

43 Presidential Decree No. 10-156 of 20 June 2010 relating to Support the creation and expansion of activities by older unemployed entrepreneurs thirty (30) to fifty (50) years. ( jo No. 39 of June 23, 2010 44 Executive Decree No. 04.14 of 22 January 2004 establishing and determining the status of the National Agency for the Management of Micro Credit 45Implemented initially by the Social Development Agency (ADS), this program has had mixed results, the mode of action has been made with the creation of a National Agency for the Management of Microcredit 46 Idem.

20

newly created jobs under suspicion, possibly with inflated numbers of jobs which are possibly temporary jobs,

with no follow-up.

Table No. 7. A summary of labour market institutions and instruments in Algeria

Name of agency, affiliated ministry

and main organisational structure

Functions and services, target groups and annual number of

beneficiaries, 2012

National Employment Agency

(ANEM), Ministry of Employment,

Labour and Social Security

ANEM was reorganised in 2006, covers the entire country with: 7 central

departments, 11 regional centres

(AREM), 48 Wilaya offices, 167 local

offices (ALEM)

ANEM has a total of 3097 staff

http://www.anem.org.dz

Job intermediation, LM information, main target group is young

unemployed, since 2008 the implementation of youth employment

programs called DAIP (Professional Insertion of Youth Program) with

four components

In 2010, ANEM received a total of 234.000 job vacancies and 181.000 job-seekers, with 77% placement rate.

DAIP has four components:

CID: 1-year graduate integration contract for university graduates

CIP: 1-year vocational integration contract for secondary/technical

graduates

CFI: one-year training insertion contract for jobseekers with no

qualification

CTA: 3-year subsidized work contract after the end of one contract

above

In 2012, first three components received a total of 240.000

beneficiaries (44% females), last component received 41.000 beneficiaries.

National Agency for Employment

Support of Youth (ANSEJ), Ministry

of Employment, Labour and Social

Security

ANSEJ was created in 1996 and covers

all the country with: 1 headquarter, 11

regional centres, 48 Wilaya offices.

ANSEJ has a total of 1942 staff (526 of

which are women) http://www.ansej.org.dz

Support youth employment through the creation and expansion of

micro-enterprises by young entrepreneurs (including business advice,

training, credits and grants, tax exemptions and monitoring of micro-

business). It includes facilities provided by the National Support Fund

for Youth Employment (FNSEJ).

Main target group is youth aged 19-35 (up to 40 years old)

Two modes of funding:

(i) bilateral: 70% personal contribution, 30% credit with no interest

(ii) multilateral/ triangular: 1-2% personal contribution, 70% bank loan

and 28-29% agency grant

Funds provided between 5-to-10 million AD, extra loans for mobile working cars (electricians, plumbers) and renting local offices for

collective offices (lawyers, architects).

The number of funded projects was 30.000 in 2010, 42.621 in 2011

and 62.812 in 2012. It is calculated that with a ratio of 2.5 jobs/

project, an estimated 164.530 new jobs were created in 2012.

National Unemployment Insurance

Fund (CNAC), Ministry of

Employment, Labour and Social

Security

CNAC was created in 1994 and covers

all the country with: 1 headquarter, 13

regional centres, 48 Wilaya offices.

The exact number of total staff is not

available, but estimated to be nearly

1000 employees.

http://www.cnac.org.dz

Unemployment benefits to laid-off public workers (400.000) under the

Structural Adjustment Programme, since 2013 active support to the

creation of micro-enterprises for the unemployed aged 30-50 years.

The only difference from ANSEJ is the older age group of

beneficiaries and CNAC also developed the same mode of funding.

CNAC has funded 18.490 projects in 2011 and 34.801 projects in 2012.

It is calculated that with a ratio of 2.5 jobs/ project, an estimated

87.000 new jobs were created in 2012.

Social Development Agency (ADS),

Ministry of National Solidarity

ADS was created in 1996 and covers all

the country with: 1 headquarter, 11

regional centres, 48 Wilaya offices

(DAS), 254 social field units (CPS).

Combat poverty, pro-poor employment programmes (CPE, ESIL,

TUP-HIMO, IAIG), social inclusion programmes (PID, AIG, DAIS)

Main target is poor and rural families within working age (16-65),

main disadvantaged sections of the population

TUP-HIMO: public works for the rural unemployed

ESIL and IAIG: allowance for public works in social services and

schools and community programmes for rural villages DAIS: replaces ESIL and IAIG programmes, temporary employment

21

ADS has a total of 3528 staff

http://www.ads.org.dz

for 2-year duration renewable twice (public works), for unemployed

aged 18-59 without qualification

PID: 1-year graduate programme (renewable once) for youth aged 19-

35 and who are without income in precarious situations or with

disability

AIG: Allowance for public works and community services, 1-year

renewable temporary work for people without income

CPE: pre-employment contract

In 2012, PID received 13.000 beneficiaries, DAIS has 37.000

beneficiaries, IAIG has 252.000 beneficiaries, TUP-HIMO has 19.000 beneficiaries

National Agency for the Management

of Microcredits (ANGEM), Ministry of

National Solidarity

ANGEM was created in 2004 and covers

all the country with: 1 headquarter, 10

regional centres, 49 Wilayale offices,

549 support units.

ANGEM has a total of 1825 staff (634

of which are women) http://www.angem.org.dz

Alleviate poverty through providing micro-credits to the poor,

reducing social exclusion, informal economy and unemployment

Micro-credits are considered useful instrument to finance the self-

employment, work at home, small business, crafts work, initiated by

the poor

Before the Arab Spring, it provided funds with no interest to buy raw

materials and to create an economic activity (not necessarily an

enterprise). Now, it aligned the funds based on ANSEJ model of

bilateral and triangular funding, and it includes facilities provided by

the National Microcredit Support Fund (FNSMC).

Funds provided between 100 thousand-1 million AD. Number of loans provided between 2005 and 2012 is 451.608 projects,

with nearly 423.000 for the purchase of raw materials to home-based

activities.

It is calculated that with a ratio of 1.5 jobs/ project, an estimated

680.000 new jobs were created by ANGEM between 2005 and 2012.

5. Key Findings of the Analysis

What we know about labour market is in the light of information provided in 2011 by administrative data47 and

the results of LFS. There are certainly many other actions in support of entrepreneurship in the employability of

young people and women (GIZ, 2013) but also in the green economy (GIZ, 2012). There is also a program of

UNDP support ANEM about the employability of first-time job seekers and a United Nations program on gender

equality and empowerment of women (2012), with studies planned (including unpublished results, to date).

Data provided by administrative sources indicates the efforts made the state for the promotion of employment

and to fight against unemployment. No comprehensive assessment has yet been conducted48. The state

interventions have certainly had an impact on labour market and consequently, the level of unemployment. In

the absence of impact evaluation, conducted according to technical and scientific standards, it is not easy to discuss the relationship between state action (according to administrative sources) and the level of

unemployment in Algeria (according to LFS). This will be our first discussion. Secondly, we invited a panel of

high officers to discuss the future of ALMPs.

5.1. Apparent contradiction of labour market statistics

Our findings, through the use of survey data and administrative source pave the way for a critical discussion on

the visibility of the labour market.

About the labour force survey

Through the LFS data, we have seen an upturn in the birth rate, a low rate of general activity, pulled down by the

female employment, a high youth unemployment rate, particularly girls and graduates in the cities, the mismatch

between training and employment.

47All attempts to obtain accurate data were unsuccessful due to the blackout imposed by the authorities on the dissemination of data other than official. 48 In the 2000s, there were evaluations conducted by CNES or by the World Bank.

22

LFS results are rather limited. It is focused on a week, once a year (investigation time in the first week of

October - autumn) based on a sample of 15,000 households out of 6 million total households in Algeria. This

photograph of the labour market cannot produce the dynamics of the labour market, the intensity of seasonal

work in agriculture in particular. The labour force, in rural areas work, needs a specific measurement tools

adjusted to seasonal and part-time activities. That’s why female employment in rural areas is not entered

correctly surveyed.

The small sample also produced a distorted picture of reality. Without detailed data on economy, the productive

system analysis is not possible: we have a broad picture of five major branches. Data on informal are also approximates. The interconnection between the formal and the informal is not visible. Last, access to FLS data is

strictly forbidden. This is a prohibition of an old age. In other words, we can examine the characteristics of the

labour market only through the variables that the Algerian authorities feel good to disseminate.

Measuring the unemployment rate is a very hot issue. This means that we have one million of unemployed out 6

million households in 2011. While administrative sources claim that there has been the creation of nearly 2

million new jobs, in reality this may show the number of temporary employment measures implemented for 2

million unemployed. If those unemployed people are counted automatically as ‘employed’ after they attended

state programs, then we do have nearly 3 million persons unemployed! The unemployment rate would hence be

nearly 23% for 2011. Given the temporary nature of measures and no monitoring and guarantee of stable/ regular

jobs after the end of programs, the numbers are not reliable although the government maintains that unemployment rate should be fewer than 10%.

Finally, the LFS has the merit to exist but it is designed neither to make an assessment of the effectiveness nor to

measure the impact of employment policies on labour market.

About the Administrative Data

Administrative data on employment is deduced from the agencies management account. The two million new

jobs created is just an estimation which cannot be verified by field work. It is true that accounting is important,

particularly in terms of staffing and consumption budget. There is clearly confusion between monitoring data

and evaluation data. Administrative sources best reflect the management effort on the stock of project but not on

flows of finance provided (inflows and outflows)

The volume of jobs generated by the system of microcredit appears to be the most important. These are "jobs" as

the cheapest as they accounted by the provision of some dinars to buy raw materials without any formal

registration or social protection affiliation. There is also a ‘double accounting’ in the administrative data. To

receive the benefits of programs ANSEJ, CNAC or ANGEM, individuals must first be registered at ANEM.

Registrations must be renewed each quarter. So the same person accumulates four entries per year within ANEM

and if funding is granted by an agency, the person is also registered as new job creation for him and two others

(according to the multiplier used: 2.5 or 1.5), who need also be registered at ANEM.

There is no individual statistics identification in Algeria. Hence, there is no possibility to follow the path of

anyone, if s/he applied from one agency to another, except on personal declaration. These Agencies are supposed

to have a national file where statistics can be calculated on bankruptcy, on changes in activities, in location, on payment back. Up to now, no information is released on people who have already paid back their bank loan or

the agency credit or the mortality rate of projects financed.

We do have a system to check whether the same person is applying to one of the three above mentioned

agencies. It is through the service of the registration of enterprises at the National Centre for Trade, the Fiscal

Authority and Social Security National Centre. However, these Centres also use different modes of

identification. In conclusion, no proper system is in place to follow-up how many of temporary work contracts

continue and become permanent after the end of program?

In brief, Agencies proceed globally by cumulating their data in order to establish a retrospective for each quarter

(on one year) or on an annual basis since their existence. They do not take into account of the outcome of

funding. A follow up is granted until the fund is reimbursed. This rate is also unknown. Once out of a program,

one may very well goes up in another, knowing that there is weak communication between agencies and between

government departments.

In short, these two sources do not contribute to shed light on one another but just give a pre-viewed information

on labour market, if they are in line with Algerian authorities expectations. As we point out, each source has its

own logic and its limitations. In order to have an appraisal of these programs, we have interviewed (by mail) a

23

panel of resource persons, well acquainted with labour markets issues and Youth Employment Programs. They

are ex-director of agencies, high government officials, experts for UN agencies or, civil servants still in job in

one of these agencies. Their opinions are kept anonymous in our thematic analysis.

5.2. Discussion of ALMPs implemented

The ALMPs have been implemented all over the world. Algeria is not an exception to this rule. Implemented

since 1989, following the revolt of young people (October 1988)49, the “Youth Employment Programs” have

experience three historical phases since its implementation by Algeria, including all agencies reviewed before.

ANEM implemented its youth programs only since 2009.

Between 1989 and 1996, the programs were intended to respond to the demands of Youths, to support economic

reforms and finally, to overcome the effects of the structural adjustment program. It was a phase of improvisation. It was an act of emergency. Government reorganize ANEM in 1990, create an Agency (CNAC

in 1994) to support workers fired upon implementing the SAP and ADS en I994 to combat poverty by providing

a Safety Net, the creation of several associations for youth employment, including the Ministry of Youth and

Sports and initiatives at local level, with the ESIL program. ANSEJ also was created by 1996 but this Agency

will not be active, until 1998. The objective was not really to create jobs, but the elimination of workers

redundancy, the closure of non-viable firms and the entry of Algeria in the open labour market. With the

introduction of guaranteed minimum wage, the State only sets the minimum wage and firms set wages in the

negotiations and collective agreements.

Between 1997 and 2007, the Programs are reviewed with the aim of promoting employment and fighting against

unemployment. The structural adjustment program just ended. New presidential election is organized after a long time of political violence. ANSEJ is reactivating to finance micro-enterprises. ADS innovates with micro-

credit financing and community development. Microcredit is detached from the ADS. It has an autonomous

agency, the ANGEM in 2004.

ANEM, in the first run, is faced with a very high demands and very few labour supplies. Changing its status was

even in discussion. In 2006, its monopoly on intermediation is reinstated. The government launches a program of

modernization management of national public service. At the same time, the Directorate of Employment went

under the aegis of the Ministry of National Solidarity. Few effects are recorded on the labour market, despite a

drop in the unemployment rate is observed by LFS. At a high level meeting in October 2007, the President

stressed the implementation of a genuine employment policy. We can say that Agencies has a quite good

experience during this period.

Since 2008 up to day, a third generation of ALMPs is launched with a certain maturity. The Directorate of

Employment reintegrated Ministry of Employment, with its three Agencies - ANEM, ANSEJ and CNAC. A

National Employment Policy (NEP) was drafted in 2008 to set the direction of policies and adopted within the

Government Five-Year Plan 2010-2014. The main goal is to reduce unemployment to below 9% in 2013, with

the creation of 3 million new jobs. The DAIP is created - with three components and a subsidized program and it

is incorporated within the National Public Service (ANEM). The Ministry of National Solidarity continued its

activities with ADS and ANGEM for microcredit, hence justifying its mission to combat poverty.

5.3. A qualitative assessment of employment policies

To examine the future of employment policies, we interviewed some resource persons with different profiles.

They range from government officers, ex-executives who run the agencies, representatives of the social partners

(trade unions and employers’ organizations) and civil society. Our analysis is oriented on four directions: the

benefits of these programs, good practices, measures to be reviewed and the need for a national policy on the

labour market. In order to respect the ethical principles of content analysis, we provide different positions of the panel members interviewed without any comments of our own. These positions are not accompanied by any

evidence, as the resource person statements are drawn from their present or past official position. This

assessment provides different positions which are discussed in high policy level. Following this presentation, our

position is to be presented in the section on policy conclusions and recommendations.

49 This was the first youth revolt in Algeria which brought an end to State/FLN – on party socialist system. That’s why Algerian authorities state that we have had our Arab Spring in October 1988. Multiparty political system as well as an open economy has been established since then, with more space for private sector. Unfortunately this outcome did not last. We

have had a “black decade” – Algeria has been left alone to deal with international terrorism.

24

5.3.1. How do they assess these programs?

Public opinions expressed on the assessment of these programs include three different points of views: (i) The

programs are essentials and must be maintained as such (ii) there is need to revise these programs (iii) new

approach to employment policies must be designed.

(i) Maintaining the programs The maintenance is supported because “they provide a concrete answer to a real problem of unemployment,

particularly among young people. They are thus not only a source of income for the unemployed, and often their

families, but also (a source) of dignity, respect and self-esteem. They contribute greatly to the social inclusion of

beneficiaries, as employment remains the primary means to access other needs. For first-time applicants, it is

their first contact with the world of work. In addition to (the first contact) affect their career path, it can also

significantly impact their future attitude vis-à-vis the value of work (at least in short and perhaps medium-

term).” Others emphasize on the fact that the program established “networks have the advantage of covering a

large part of the national territory”. Such a network offers an employment infrastructure to develop programs

on “home-based activity, wage works … as well as entrepreneurship”. It is believed also that the programs

might set a “reservoir for SMEs tomorrow” and that they contribute to “reduce informal" activities.

(ii) The programs need to be revised

Unlike the first position, others emphasize the need to ensure "permanent jobs for the unemployed” and

strengthen the “relationship between vocational training and the labour market”. There is a doubt about the

capacity of the programs to respond to "the magnitude of youth unemployment”. There is also a “lack of a real

public service employment and observation instruments of labour market”.

(iii) A new approach is needed Finally, the last position argues "Who benefits? For government: Social peace is bought with the distribution of

a portion of the (energy) rent. For recipients, (it is simply) an analgesic". Similarly, it is reported on the political

use of these measures because there would be "no measurable benefit, these programs do not take into account

the needs of labour market at local level. The various programs are more focused on non-economic policy".

It is true that programs create just temporary jobs, and no information is available for their long-term impact or

permanency. So they do not address the underlying problems of real economy and facilitate its job creation

capacity, but rather postpone the real problems.

5.3.2. What are the good practices identified?

Opinions differ as to the identification of best practices among all the measures implemented. Two extreme

positions can be identified from the panel. For some experts, some of the active and passive measures do present

“good practices”. For others, these measures are very similar and duplicating each other, “no distinction appears, neither assessment and nor analysis of their effectiveness are possible”.

Most measures present good practices. Whether active or passive, these measures are important mechanism to regulate the labour market. The three

agencies enabling the creation of activities are most often cited as “good practices” to boosting the economy.

For some, “the ANGEM gets stronger results". For others, “for vocational training programs that use its

products more training are first, ANSEJ and that of ANGEM”. And finally others mentioned, "the CNAC

program is more dynamic", according to its data the last two years this agency is financing micro-enterprises.

However, it is also observed that the passive measurement of ANEM can be considered as a good practice

because ”the DAIP, strengthened its training component seems likely to best meet the objective employability".

The measures are similar and their efficiency is not measurable The panel also highlights the reign of confusion “it is the same, their distinction is purely institutional”. In the

confusion observed, there is also a certain lack of clarity about the results “it is not possible to measure

effectiveness”. Finally, measures are estimated in the whole as "symptomatic treatment of unemployment ". And

they are «certainly an important factor, but not the most important".

5.3.3. What measures need to be revised?

The opinions of the panel concerning the need for revision of employment programs are linked to the problems

observed both internally and externally. There is also a need to develop a long-term vision of employment.

25

Inside the programs, the measures suffers from dysfunctions

Employment policies are multiple and there is a need to review their internal coherence: ”This is their logic

(redundant targets and revisit) and especially their operation (marked centralization, lack of transparency, lack

of assessment, ...) should be discussed".

Outside the programs, the inter-sectoral relationships are missing In addition to the internal problems, it is also observed sectoral compartmentalization "Different sectoral

systems, despite their relevance in each case, suffer from lack of communication and visibility with respect to the

most distant of public employment, lack of synergy and qualitative assessment." This meant that there is no link between the ministries involved in employment policies.

Similarly, it is noted as not only "a fragmentation of responsibilities” but also "a scattering of financial

resources". Finally, the establishment of links between sectors is deemed necessary. ”For recipients, the

ANGEM: they cannot go above (for example ANSEJ) because one of the conditions of eligibility is to be

unemployed 50".

5.3.4. What is the bad practice?

Measures to fight against graduate unemployment is one of the bad practices which needs revision: "a general

observation for both types of programs: They cater to the same categories with poorly differentiated access

criteria except that of age in some cases, but they are particularized by the benefits they offer and are subject to

a discriminatory (difference between insertion time, level of compensation, the loan amount).

The coexistence of CID and PID programs with a single source of funding, a single customer, a similar mode of

management, showing confusion among candidates and has inconceivable discrimination: As an illustration

and to draw the line: two young people got together the same degree in integration in a common employer,

receive different benefits when they are enrolled in the CID or PID".

5.3.5. What do they think on the national employment policy?

For the respondents, there is some consensus about the need for a comprehensive evaluation of the measures.

Then they call for the development of a new "National Employment Policy".

Principles of evaluation These words perfectly illustrates the general idea of the evaluation “develop statistical information system ...

multiply and decentralize the monitoring tools and evaluation, studies and analysis to understand in particular

the political relationship with economy and employment..."

Development of a new national employment policy Interviewees advocated the development of a new national employment policy, as part of basic policy "Make the

adoption of a national employment policy an element of fundamental policy which will be liable to the highest

authorities of the country, all members of the government (in a word employment is everyone's business, all

Ministers and not just that of the Minister of Employment).”

Similarly, a new political system, based on the national interest, is suggested in order to bring "a new political

system based on the national interest, a clear and ambitious vision, competence and integrity”. Such position

claims for radical change in the “political system” which according to the statement is not sufficiently opened to

private sector.

This new political system should involve both the private and the public sectors: "Part of a coherent and comprehensive approach that is an expression of political will to promote employment in public and private

industries". These actions should result in the implementation of a strategy for youth employability: " It is now

essential to develop a strategy for youth employability (…) it must necessarily rest on an integrated and

sustainable global socio-economic policy. All partners must be involved at the outset in the development of this

policy; the local dimension must be a central concern for the definition of specific policies for jobs suited to

regional diversities".

50 These employment facilities are designed only for unemployed people. Employed worker who decides to create an activity

can do so through other sectoral Agencies (be it Crafts, Trade, Bank, Industries, Agriculture or Fishing…).

26

6. Policy Conclusions and Recommendations

The core of employment policies in Algeria has been the implementation of ALMPs by various public agencies,

each assigned with different programs and substantial resources. Despite the substantial amount of resources

they absorb, however, there is limited information on their features, such as the number and characteristics of

beneficiaries, drop-out rates, the follow-up of beneficiaries and evaluation of the policy effectiveness in terms of

job placement rates, impact on duration of unemployment and quality of employment (e.g. average earnings,

formality).

This short overview indicates an overwhelming emphasis on ALMPs and much less emphasis on policies of job creation, education system and social security. Longer-term solutions may require deeper reforms in labour

market; e.g. improving business environment and economic restructuring, changing legislative framework and

institutions, rationalizing public sector, rapprochement of working conditions between public and private sectors,

SME growth and strong private sector development, improving the conditions in informal sector etc. There is a

need to focus more on improving the quality of education and lifelong learning system. Although education has

been priority with significant public investments and significant progress was achieved toward universal access,

there has been low return on investment in terms of meaningful educational outcomes. The system is hindered by

low quality, irrelevancy and inequity (Martin& Bardak 2012). A solid and good quality early education is

probably cheaper, more cost-effective prevention than later remediation through ALMP measures.

The findings provide a global portrait of only employment and active labour market policies. The recent

Economic Forum (June 2013) organized by the CNES come to the same conclusion. A real evaluation is important. We know that ALMPs may have positive effects on individuals but also may have “zero” or negative

impact on the economy: for example, deadweight losses, substitution effect in regard to subsidized wages or

even displacement effect. We have no evidence to support any impact (positive or negative) without prior

evaluation, although we know that programs create mostly temporary jobs and no information is available for

their long-term impact or permanency.

Therefore the programs do not address the underlying problems of real economy and its job creation capacity,

but rather postpone the problems. Algeria is generally considered a country with strict business environment,

limiting its private sector development. If the private sector cannot grow bigger, there is little possibility to solve

unemployment problem without permanent injection of public money. Thus the recommendations are based only

on accessed information and our findings.

For the government

1. Establishment of a National Observatory for Employment and Training (studies exist) - producing reliable

data with

An annual employment survey (lesser questions) with a higher sample size, run four times /year, and partial

replacement of the sample each time. Dissemination of data and results must be guaranteed (ONS or any

other research centre would only execute LFS for the Observatory);

Run in-depth studies under regular frequencies on specific topics such as: female, informal, youth

employment, children at work, senior jobs, rural labour market;

Run salary surveys regularly covering all forms of wage labour, including very small enterprises;

Reactivate the Higher Council of Statistics;

Training of staff of administrative services for the preparation of data according to standards and scientific

standards, in terms of flows, in particular, with input and output programs.

2. Maintain existing programs with some adjustments for the short term, with a view to total reform for the

medium term;

The two agencies - ANSEJ and ANGEM – can be transformed into one ‘Microfinance Institution’;

Microfinance institution should be opened also to private sector;

The three other agencies (ANEM, CNAC and ADS) must return to their initial missions: intermediation,

unemployment insurance and combat poverty, respectively.

3. All the employment and active labour market programs must be planned together with private sector with their

higher involvement from the design phase to implementation, monitoring and evaluation phases, and the public

funds should strategically support the development of certain economic sectors.

27

4. As labour market is a horizontal program, it is unrealistic to look for strong inter-sectoral coordination at

national level. Such coordination, however, can develop and exist efficiently at local level. All ‘national

coordination’ should be driven by the Prime Minister. The National Observatory on Employment should hence

be placed under the management of the prime Minister. An Inter-Sectoral Directorate (ISD) must be created to

manage all labour market issues. Employment should not the sole responsibility of the Minister of Employment,

Labour and Social Security.

For the European Union 1. The involvement of the EU in providing funds for some programs do have little impacts (for example.

Observatory training and employment program, program management ONS, current programs with ANEM)

The new program “Youth and Employment", signed last year with an EU contribution amounted to 23

million EU, is still not launched. And this, in a context supposed to be critical for youth employment. A

deep assessment regarding the impact of these programs and their implementation by relevant authorities is

important.

2. All EU intervention to support programs related to employment should be directed to the Inter-sectoral

Directorate for Employment, if only entitled by the Government, to the implementation of actions and

ownership of results.

3. Technical support to the organization of the transition of some agencies to the microfinance institution may

be considered.

28

List of persons consulted

Name

and Surname

Function Institution / Agency Date reply

registered

El Mahfoud

Megateli

General Secretary

CGEOA

08/06/13

Bashir

Boulahbel

Expert / Consultant

Former

Government High Officer

04/06/13

Mohamed

Bouchakour

Expert / Consultant

International Expert

04/06/13

Tayeb

Louati

Advisor

UGTA

07/06/13

Mahrez

Ait Belkacem

Expert / Consultant

Former PDG -CNAC

04/06/13

Azzedine

Brahimi

Director

Director

Ministry of Training

08/06/13

Nassira Merouani

Director

ADS

06/05/13

Kamel

Laleg

Expert

World Bank

06/05/13

Aziz

Lahlou

Director

Ministry National Solidarity

04/06/13

Yazid

Ouada

Expert

Bank & Finance

07/06/13

29

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OFFICIAL REPORTS & DATA

Premier Ministre

Bilan des réalisations économiques et sociales de l’année 2011

http://www.premier-ministre.gov.dz/media/PDF/bilan2011.pdf

Ministère du travail, de l’emploi et de la sécurité sociale

Dossier Emploi des Jeunes

http://www.mtess.gov.dz/mtss_fr_N/emploi/2008/PROMOTION%20DE%20L'EMPLOI%20DES%20JEUNES.

pdf

Données sur l’emploi 2008

http://www.mtess.gov.dz/mtss_fr_N/emploi/2008/EMPLOI%20ET%20CHOMAGE.pdf

Objectifs et axes du plan d’action pour la promotion de l’emploi et la lutte contre el chômage

http://www.mtess.gov.dz/mtss_fr_N/emploi/2008/OBJECTIFS%20ET%20AXES%20DU%20PLAN%20D'ACT

ION.pdf

Ministère de Commerce

Rapport de conjoncture du Ministère de Commerce 2012, version PDF,

http://www.mincommerce.gov.dz/fichiers12/conjucture12/controleprati12.pdf

téléchargé le 3 avril 2013

Office national des Statistiques (ONS)

Salaire en Algérie, N° 598 - ONS 2010

http://www.ons.dz/IMG/pdf/Publication_finale_enq.salaires_2010_.pdf Téléchargé le 3 avril 2013

Enquête Emploi auprès des ménages, 2011

http://www.ons.dz/IMG/pdf/PUBLICATION_EMPLOI2011.pdf

Téléchargé le 3 avril 2013

Enquête Emploi auprès des ménages, 2010

http://www.ons.dz/IMG/pdf/PUBLICATION_EMPLOI_2010.pdf

Téléchargé le 3 avril 2013

31

Annexes

A. Tables:

Table N°1 – Births, marriages and fertility rates in Algeria

Years Birth in

thousand

Birth rate Fertility rate in

thousand

Number of

marriage

Marriage rate

1990 775 30.94 4.50 149345 5.97

2000 589 19.36 2.40 177548 5.84

2008 817 23.62 2.84 331190 9.58

2010 888 24.68 2.87 344819 9.58

2011 910 24.78 2.87 369031 10.05

2012 978 26.08 3.02 371280 9.90

Source : ONS- Algiers, 2012 (Website)

Table N° 2 – Value added to GDP by Economic Sectors in Algeria

Value added 2007 2009

Public sector Private sector Total Public sector Private sector Total

Agriculture 3166.4 701,034.30 704,200.70 1337.6 925034.4 926372

Hydrocarbons 3843139.4 246,169.20 4089308.6 2847269.2 261809.7 3109078.9

Public energy

construction 92368.8 0.00 92368.8 94967.1 -200 94767.1

Other (not

hydro)industries 268745.8 211,065.30 479811.1 311952.1 261114.5 573066.6

Construction 139628.9 593,091.80 732720.7 128971.6 871083.3 1000054.9

Transport &

Communication 162147.6 660,259.00 822406.6 169947.7 744414.7 914362.4

Trade 57088.6 806,108.70 863197.3 73876.7 1077746.9 1151623.6

Services 26672.1 220,930.10 247602.2 35909.9 282664.2 318574.1

Sub-total 4592957.6 3,438,658.40 8,031,616.00 3664231.9 4423667.7 8087899.6

TVA 399328 542063.2

Customs Tax 133126 169055

GDP Total 8,564,070.0 8,799,017.8

Source: ONS website, Unit: Thousands Algerian Dinar (AD)

Table N° 3 – Number of Employees by Economic Sectors, Unit: Thousands, LFS 2011

Economic sectors Public sector Private sector National total

Total Female Total Female Total Female

Agriculture 34 7 999 40 1,033 47

Extractive industries 130 8 62 4 192 12

Manufacture 281 30 895 306 1,176 336

Construction 128 9 1,467 16 1,595 25

Trade 28 5 1,204 53 1,232 58

Transport& communication 148 20 479 13 627 33

Market services 122 33 201 33 323 66

Non-market services 2973 824 449 160 3,422 984

Total in thousands 3844 936 5756 625 9600 1561

Total in % 40.0 9.8 60.0 6.5 100.0 16.3

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Table N° 4 – Employment Shares of Public and Private Sectors, %, LFS 2011

Economic Public Female % Private Female % Total Female %

Agriculture 0.9 0.7 17.4 6.4 10.8 3.0

Extractive industries 3.4 0.9 1.1 0.6 2.0 0.8

Manufacture 7.3 3.2 15.5 49.0 12.3 21.5

Construction 3.3 1.0 25.5 2.6 16.6 1.6

Trade 0.7 0.5 20.9 8.5 12.8 3.7

Transport& communication 3.9 2.1 8.3 2.1 6.5 2.1

Market services 3.2 3.5 3.5 5.3 3.4 4.2

Non-market services 77.3 88.0 7.8 25.6 35.6 63.0

Total % 100.0 100.0 100.0 100.0 100.0 100.0

B. Figures:

Figure 1: Number of beneficiaries (in thousands) within each program implemented by ANEM and ADS

in 2011

270

226

165

704

272

29

86

2 30

100

200

300

400

500

600

700

800

Number of beneficiaries (thousands) within the

programs implemented by ANEM and ADS in 2011

ANEM

ADS

33

Figure 2: Number of projects supported for the creation of micro-enterprises and related jobs by ANGEM

and ANSEJ / CNAC between 1998 and 2012

0

50

100

150

200

250

300

350

400

450

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Thousands

Evolution of state support services for the creation of micro-

enterprises and related jobs (1998-2012)

Jobs ANSEJ/CNAC Projects ANSEJ/CNAC Jobs ANGEM Projects ANGEM