Lending Institutions, Healthcare and Human Capital in Algeria

1365 Words Jul 15th, 2014 6 Pages
Lending Institutions, Healthcare and Human Capital in Algeria

Lending Institutions, Healthcare and Human Capital in Algeria
The central bank gives the system its overall consistency and provides resources to other bodies. In addition, laws and regulations underpinning bank supervision may not be formally deficient. However, the extensive state ownership of banks severely undermines regulatory governance (IMF, 2004). Many uncertainties also surround the preconditions for effective banking supervision and sustainable macroeconomic policies. These uncertainties also hinders well-developed public infrastructure, effective market discipline, efficient resolution of banking problems and appropriate level of systemic protection.
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Development of Algerian private banking sector is still modest. Due to its size, it continues to suffer a number of shortcomings. For example, some banks are a family business whose operations and accounts lack transparency. This is a great weakness in emerging private sector, which can be overcome by dutifully adhering to the strict application of the principles of proper supervision, particularly regarding licensing and imposing sanctions on institutions that fail to observe prudential regulations (IMF, 2004).
Certainly, the structural adjustment programs (SAPs) initiated jointly by IMF and world bank have done little to foster the social, political and economic conditions that could contribute to the development of stable sate society in Algeria (Senghor & Poku, 2007). For example, the promotion of export for debt repayment and cutting of public expenditure on welfare in a region where majority of people are undernourished is tantamount to scandal.
The primary aim of the adjustment policies has been to give more incentive to production in the rural economy. In Algeria, most poverty is located in the countryside; therefore, through SAPs it was argued that the rising world market prices for tradable agricultural goods by reducing taxes and the devaluing currency would increase rural incomes (Senghor & Poku, 2007). However, the reality has been different, the Algerians in rural production areas have not been able to expand the production of tradable

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