SME Policy Index: The Mediterranean Middle East and North Africa 2014

Implementation of the Small Business Act for Europe

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This report assesses the elaboration and implementation of SME policy in eight Middle East and North African economies of the southern Mediterranean shore. The assessment is structured according to the ten policy principles covered in the Small Business Act for Europe (the SBA). One of the main findings is that over the last five years there has been progress in SME policy elaboration and implementation in spite of the political and economic turmoil. However, that progress has been modest, incremental and uneven across economies and dimensions. Political and economic stability, as well as institutional development, had a major impact on policy performance.

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Algeria’s business environment has undergone profound changes since the 1990s. The country’s commitment to the market economy attributes great importance to the private sector. Algeria recorded a sustained growth rate, particularly during the 2000s (IMF, 2013a). In 1994, the value added by the private sector was only 46.5% of the national total, but this proportion has been rising. In 1998, the added value created by the private sector contributed over half of the national total (Gharbi, 2011). Although unemployment dropped from a rate of nearly 30% in 2000 to 10% in 2012, it still disproportionately affects young people (21.5%) and women (19.1%).

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