Author:
Abstract:
The author concentrates on the issues of energy production, consumption, foreign trade and public finance in Egypt and Algeria – the two North African states with the largest-scale economies and the biggest energy industries in the middle of 2010s.
The negative trends, which disrupted Egyptian energy balance in the first half of 2010-s have inevitably transformed ARE from an energy-exporting to an energy-importing country. Among their most important macroeconomic consequences have been the increasing foreign-trade deficits, deteriorating foreign accounts and financial positions in general. From the production point of view the principal way of solving Egyptian energy issues has become the adopted and implemented long-term strategy of the development of atomic electricity power-plants with the economic and technical support from Russia. From the consumption point of view, no less important for Egyptian energy strategy have become all the means of energy saving and more effective utilization, as well as the macroeconomic instruments: decisive, even harsh liberal market reforms including severe cuts in electricity and fuel subsidies since 2014.
So far as the principal problems of economic diversification for independent Algeria have been in the forefront of its national agenda for decades, yet the prospects of their solving are rather dim, the export revenues from hydrocarbons and their immediate derivatives remain almost the only viable source for financing development, social and most other government expenses for the foreseeable future. Naturally, all the ways and means of increasing these revenues are extremely important. The events of 2010s have once again confirmed the very limited influence of developing energy-exporting countries, even as big as Algeria, on the market conditions in the world energy and raw-materials trade, whether that influence relied on a single-state or organized collective activities, e.g. of OPEC members. That is why the country can only rely on two main strategic methods to support and/or increase the financial gains from its hydrocarbon resources: firstly, to increase their absolute volumes of production; secondly, (but better all at once) to raise the export quotas of the oil and gas industries (the shares of foreign sales in their total output). In the first case the principal driving force should be the attraction of foreign investments, as well as the involvement of new fossil-fuel resources into the economic activities. In the second case, the application of more rational models of energy production and consumption, which should allow maximum saving of hydrocarbons as the most marketable Algerian export products and generators of rental income. Since 2016, the implemented gradual cuts in the government subsidies on electricity, natural gas and oil products (up to that year among the highest in the world) are expected to become a new and very important factor of energy saving.
Keywords:
socioeconomic transformations, liberal market reforms, restructuring of the energy sector, energy balance, energy subsidies, state budget reforms
References:
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