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Oil price no threat to Algeria development-Khelil

Tue, 17th Mar 2009 21:32

ALGIERS, March 17 (Reuters) - OPEC member Algeria will have no problem pay
ing for a new $150 billion, five-year national development programme even with an oil price at around $40 a barrel, Energy and Mines Minister Chakib Khelil said on Tuesday.

Years of high energy prices have helped Algeria pay for infrastructure improvements and housing projects as the north African country recovers from a decade-long civil conflict that cost an estimated 150,000 lives.

President Abdelaziz Bouteflika will seek a third term in office in elections next month and has promised to spend $150 billion between 2009 and 2014 on projects that are expected to include roads, railways and dams.

'This programme was formed on the basis of a barrel of oil at $37 and can be carried out without a problem,' state news agency APS citing Khelil as saying in Vienna.

He said previous programmes to boost the economy that had cost a combined $250 billion had been financed successfully when oil was trading below its current level.

'I don't see how crude prices fluctuating between $40 and $50 this year could create financing problems,' he added.

Oil and natural gas sales abroad account for about 97 percent of Algeria's exports and bumper energy income has helped it build massive foreign exchange reserves and pay off foreign debt.

The government's draft budget for 2009 included a 6.3 percent increase in state spending to 5,191 billion dinars ($71.34 billion).

The increase is expected to pay for subsidies on cereals, milk and water, ensure salary payments and complete an existing five-year development plan.

Government officials have repeatedly said the country is shielded from the world financial crisis and will press ahead with its development plans.

(Writing by Tom Pfeiffer; Editing by Marguerita Choy) (For full Reuters Africa coverage and to have your say on the top issues, visit: ($1=72.76 Algerian Dinar) Keywords: ALGERIA ENERGY/

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