* Draft budget law increases spending by 25 percent
* Customs duties waived on imports of sugar, cooking oil
* Govt trying to head off an Egypt-style revolt
By Christian Lowe
ALGIERS, May 2 Algeria announced a sharp
increase in budget spending and waived duties on staple foods on
Monday in a move designed to stop public discontent spilling
over into the kind of revolts rocking other Arab states.
Algeria, one of the European Union's biggest suppliers of
natural gas, has been trying to head off an Egypt-style uprising
by using its cash reserves to soothe grievances and by offering
cautious political reforms.
At a cabinet meeting chaired by President Abdelaziz
Bouteflika, the government approved amendments to the 2011
budget which would increase public spending by 25 percent,
according to a government communique.
The extra spending would be concentrated on pay increases
for public sector workers, higher state subsidies on flour,
milk, cooking oil and sugar, creating work for young unemployed
people and building new houses.
All these have been the focus of discontent among Algerians
and have led to protests and riots in the past few months --
though none has so far coalesced into the kind of national
movement that could challenge the government's hold on power.
"This draft (budget law) is, in particular, aimed at ...
preserving the purchasing power of citizens, meeting the demand
for jobs for young people and better promoting the development
of a productive economy," said the government communique, which
was carried by the state-run APS news agency.
The budget measures are contained in a draft supplementary
budget for 2011 that was approved by the cabinet. It still needs
to be approved by parliament, but this is usually a formality
because Bouteflika allies have a majority.
The draft supplementary budget law also waived value added
tax (VAT) and customs tariffs on imports of cooking oil and raw
and white sugar.
In January, after sharp rises in food prices sparked riots
around the country, the government suspended customs duties and
VAT on sugar imports until Aug. 31. The budget law will extend
the waiver until the end of the year.
Bouteflika gave some details on Friday of a plan he
announced last month for political reforms -- a concession to
calls for change that have been gathering momentum since the
uprisings in Egypt and neighbouring Tunisia.
The 74-year-old president said in a speech on April 15 that
he would ensure freer elections, amend the constitution and end
the jailing of journalists.
In a statement released after the cabinet meeting, he said
he was asking the head of the upper house of parliament,
Abdelkader Bensalah, to lead consultations with political
parties and civil society about the planned reforms.
Bouteflika said the proposed political changes should be
ready for submission to parliament later this year, but the
constitutional changes would not be submitted until after the
next parliamentary election, due in May 2012.
Bouteflika did not specify what political reforms he was
proposing or how the constitution would be changed. His critics
say his reform plan is too vague and that if he is serious about
change he should start by dismissing his government.
(Writing by Christian Lowe; Editing by Tim Pearce)