Country Economic Memorandum

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    A Medium-Term Macroeconomic Strategy for Algeria : Sustaining Faster Growth with Economic and Social Stability, Volume 1. Main Report
    (Washington, DC, 2003-05) World Bank
    This study is part of a series of analytical works on Algeria prepared by the Bank, with the aim of laying out the framework, and facilitating the dialogue for elaborating the Bank's Country Assistance Strategy for Algeria. Companion studies include: "A Private Sector Development Strategy Note: A Diagnostic on Foreign Direct Investment in Algeria" (FIAS). This report is divided into three parts. It presents a diagnostic of the slow growth performance, by benchmarking Algeria's performance against other comparator countries, with the aim of identifying the key bottlenecks to better long-term growth performance in Algeria". Building on this analysis, experience from transition economies, and diagnostics in the companion reports, the second part reviews options in structural reforms to encourage the development of the private sector, by strengthening the investment climate and furthering Algeria's transition to the market. the third part examines options to strengthen the fiscal framework, to insulate the fiscal stance from volatile hydrocarbon fiscal revenues and secure fiscal sustainability, so as to achieve a sustained acceleration of growth. More technical background material of the analysis is presented in the annexes, in volume two.
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    Iran - Medium Term Framework for Transition : Converting Oil Wealth to Development
    (Washington, DC, 2003-04-30) World Bank
    Iran is about 10 percent of Gross Domestic Product (GDP) off an economic equilibrium that will reduce unemployment and improve significantly people's welfare by converting oil wealth into sustainable development. 1) It is about 10 percent of GDP short in the additional savings and investment needed to attain growth that will reduce unemployment. 2) Optimal management of Iran's oil to provide the above needed savings and achieve an optimal balance between consumption and savings that will sustain the benefits from oil after it is exhausted, requires that it allocate about 10 percent of GDP more for savings and investment and less to consumption from its oil wealth. 3) That 10 percent adjustment can come from the reform of Iran's inefficient energy subsidy system, which also happens to average about 10 percent of the GDP a year. These expenditures can be transformed into budget surpluses that will provide ample credit to the private sector to grow. This adjustment -at the core of Iran's medium and long term fiscal strategy- is a main pillar of Iran's transition to a market economy led by the private sector. Hence, the critical importance of alternative management strategy of oil wealth in providing the needed additional savings to enable private sector financing and promote the transition to a private sector led economy.