Press Release No. 05/256

Press Release: IMF Managing Director Rodrigo de Rato's Statement at the Conclusion of his Visit to Algeria

November 22, 2005

Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Algiers at the conclusion of his visit to Algeria:

"It has been a pleasure to return to Algeria, my second visit as Managing Director of the International Monetary Fund. In addition to participating in the important and successful conference on trade facilitation in Algeria, Morocco, and Tunisia, admirably hosted by the Algerian government, I have had productive bilateral meetings with the Algerian authorities, and with the Moroccan and Tunisian delegations to the conference.

"I have had the privilege during this visit to meet President Abdelaziz Bouteflika. In addition, I met Prime Minister Ahmed Ouyahia, Minister of Finance Mourad Medelci, and Central Bank Governor Mohammed Laksaci.

"Our discussions have revealed a common understanding of Algeria's accomplishments and its challenges. Remarkable success has been achieved in restoring macroeconomic stability, and progress has been made in liberalizing foreign trade, and increasing economic growth. I congratulated the authorities on these achievements.

"Algeria's main challenge is to quicken the pace of sustainable growth in order to reduce further the level of unemployment. The increased political stability and Algeria's strong financial position create an ideal window of opportunity to tackle this challenge.

"We share with the Algerian authorities the view that macroeconomic stability is a prerequisite for growth, foreign investment, and expanding trade. In this respect, sound management and efficient use of hydrocarbon wealth that takes into account infrastructure and social spending needs, together with the importance of maintaining macroeconomic stability, is key. It is also important for the Algerian authorities to take advantage of the hydrocarbons revenue to reduce debt, in order to reduce macroeconomic vulnerabilities. In this context, I congratulate the authorities for having decided on early repayment of outstanding obligations to the IMF.

"In our discussions, we also agreed that macroeconomic policies alone are not enough. Higher growth rates that generate employment and increase general standards of living also require deep structural and institutional reforms. At the core of these reforms lie the modernization of the banking system, including through privatization, and the further integration of Algeria in the world economy.

"I also had separate meetings with the Moroccan and Tunisian delegations, including, from Morocco, Minister of Finance and Privatization Fathallah Oualalou, Minister of External Trade Mustapha Mechahouri and Governor Abdellatif Jouahri; and, from Tunisia, Minister of Commerce and Handicrafts Mondher Zenaidi, Governor Taoufik Baccar, and Secretary of State at the Ministry of Finance Moncef Bouden. I congratulated them on the economic achievements in the two countries and encouraged them to accelerate the ongoing reforms aimed at increasing growth and reducing unemployment."