Table 4. Algeria : Employment needs by 2030 Scenario B: Limiting the Scenario A: Maintaining rates increase of the number of of inactivity and unemployment inactives and unemployed of of 2007 SCA by 50% Jobs to create 2007-2030
Annual rate of Annual rate of Jobs to create needed jobneeded job2007-2030 creation 07/30 creation 07/30
Observed rate of employment change
2011
2012*
Algeria
3 710 613
1.57%
7 666 398
2.81%
1.50%
2.10%
MPs (average)
3 423 581
1.65%
6 461 494
2.74%
…
…
Source : Blanc (2011) for scenario projections. EIU for observed rates of employment change.
voring insider versus outsider workers. The paper stresses that improvement in labor market conditions could have a significant impact in reducing unemployment both in the short and medium run. Taking into consideration demographic trends as well as trends in economic activity, Blanc (2011) calculates the employment needs of the Mediterranean labor markets for the next decades. Several « target scenarios » are taken into account and two of them are presented in Table 4. The first scenario highlights the number of jobs that are going to be necessary to maintain the unemployment and inactivity rates of 2007, a year which was taken as a benchmark since in the 2005-2007 period there was no issue in MPs regarding shortage of labor for newcomers (employment creation of 2%). In the case of Algeria the study finds that the country will need to create about 3.7 million jobs by 2030 if it wishes to just maintain its 2007 unemployment and inactivity rates. This implies a 1.57% annual rate of job creation to ensure the feasibility of this scenario. But if the authorities are more ambitious in their strategy and wish to reduce the increase in the number of the unemployed and in the number of inactives by 50% then they will need to create about 7.7 million jobs by 2030. This supposes an even higher annual rate of job creation of roughly 2.8%. One would ask the following question, can any of these scenarios be fulfilled by Algeria? When looking at the rate of employment growth in 2011 (1.5%) one notes that it is below the needed rate of job-creation in both scenarios. This means that
the current trend of job creation is not even sufficient to cover the needs of the newcomers into the labour market. Thus, in a long-term perspective, if authorities did not manage to improve their efficiency in creating more jobs, unemployment would be expected to rise even more. There is however some room for hope since current projections suggest that employment will grow in Algeria in 2012 at a rate close to 2.1% which, while not high enough to cover for the needs of “Scenario B”, would be sufficient in covering the annual needs to maintain unemployment and inactivity rates stable. Undeniably, more jobs are necessary for the Algerian youth. According to the Chairman of the Forum of Heads of Enterprises (Northafricaunited. com, 2012) the Algerian economy will need to create roughly 350 000 job positions every year which, despite recent initiatives, is far from what is happening currently since the real economy only creates between 100 000 to 150 000 jobs. Initiatives for employment creation seem to often be precarious which means that after a while the young recipients are going to lose their benefits. There also seems to be an inability to generate a large number of employment positions due to the limited number of SMEs; Algeria is currently home to around 600 000 units a figure that is far from what it should be. It is believed that Algeria should have a number closer to 1.5 million companies but such a possibility finds the obstacle of a mismatch between the industry framework and the needs of the economy, with training being below expectations.
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