Algeria Economic Conditions Between 1990 and 2003

Still in the course of the transition from a centralized and planned economy to a market-driven liberal economy, the Algeria recorded a significant turnaround after the mid-1990s. Real GDP increased by 2.3% per annum on average over the period 1990-2003; inflation fell from a peak of 20% in 1992 to 1.9% (2005 estimate), and foreign exchange reserves ($ 43.5 billion in 2004, compared to $ 12 billion at the end of 2000) they reached the highest level recorded after the conquest of independence (1962).

The main challenges facing the Algeria it faces on the way to development are essentially: to use the proceeds of gas and oil for the benefit of the Algerian people in the long term; create growth and employment in economic sectors other than those linked to the exploitation of hydrocarbons to take advantage of the increase in the workforce and to avoid the social tensions caused by unemployment; to provide better public services in order to involve all Algerians in the 21st century market economy. For Algeria 2000, please check

Unemployment, one of the most visible signs of the malaise of the Algeria, is slowly, gradually decreasing (17.1% of the active population in 2005). It also tends to improve the human development index, a particularly significant composite indicator of the level of social and economic development, which combines data relating to life expectancy at birth (71.1 years in 2003), the literacy rate ( 69.8%) and per capita income adjusted for purchasing power capacity (US $ 6107). But, despite the dramatic improvement in per capita income (0.5% per year in real terms in the period 1990-2003), it is estimated that a quarter of the population still lives below the poverty line, a predominantly rural phenomenon,

1 Agricultural and livestock activities. Algeria is traditionally a producing country of cereals (wheat, barley), which is used for about half of the cultivated area, and of wine, widely exported (viticulture, widely practiced in Roman times and completely disappeared after the Arab-Islamic conquest, returned to play an important role with the French colonization). The production of olives, renowned in the Roman and Arab age and then neglected, was again developed by the French. Other products are citrus fruits, in favored locations on the coast, vegetables, partly exported as first fruits. Among the industrial plants, tobacco and cotton stand out. A prized product of the Saharan oases (Biskra, el-Oued, Ghardaïa and Ouargla) is the date. Cork is obtained from the forests, partly exported.

The livestock population includes cattle (1.6 million head in 2003), which find favorable conditions for a good yield of meat and milk in some modern farms in the Tell; sheep (18.7 million) and goats (3.2 million) remain the animals most frequently reared in the steppe and pre-desert regions. Food production is insufficient and the country has to import about half of its internal needs for wheat. The government is pursuing plans that should create 500,000 jobs by expanding arable land by 700,000 ha and investing in irrigation and machinery. The development of agriculture must also face often adverse weather and climatic conditions, with prolonged periods of drought, such as that which began at the end of 1999, or torrential rains and floods (autumn 2001),

2 Mineral resources Oil and natural gas have been the driving forces of the Algerian economy since their discovery in 1956, and it is foreseeable that they will continue to do so in the future. In the early 21st century. the production of hydrocarbons contributed 95% to the value of exports. According to 2004 estimates, proven oil reserves amount to 12 billion barrels, 70% concentrated in the Hassi-Messaoud fields, while natural gas reserves amount to almost 4800 billion m 3 (but the potential resources are of far greater). THERE. has become one of the major gas suppliers of the countries of the European Union, especially Italy and France. Much of the gas is exported through a vast network of gas pipelines linking the Maghrib to Europe, the main sections of which are the Transmediterranean (Transmed) line for Italy and the new Maghrib-Europe (MEG) line for Spain and the Portugal. The strong increase in revenues from hydrocarbon exports of which the Algeria in recent years, it has benefited from a substantial increase in foreign exchange reserves, an appreciable decrease in foreign debt (22 million dollars in 2004) and an easing of pressure on government finances.

In addition to hydrocarbons, the Algeria possesses significant mineral resources (phosphates, iron ores, and local deposits of coal, lead, zinc, mercury, copper, as well as gold and diamonds). Recently the government has decided to enhance some of them by resorting to modern extractive technologies and by enacting a law that encourages foreign companies to invest in exploitation. Iron ore production has doubled in recent years, reaching 3 million tons per year, and steel production has also increased from 700,000 to 1.5 million tons.

3 Industrial and tourist activities. The transformation industries include petrochemicals, with plants in Skikda and Arzew, which produce 284,000 tons per year of methanol, resins and plastics. An important plant for the production of fertilizers (800 tons per year) is located in Arzew, another in Annaba. The industries in this sector are interested in expansion projects that include new production complexes. In 1999, the construction of a vehicle assembly plant was completed, with a capacity of 300,000 cars per year. The privatization process underway in all sectors, including telecommunications and transport, is rapidly integrating the Algeria in the global economy of the 21st century.

Tourism, although it has great potential, is still underdeveloped due to the difficulties and restrictions on travel in inland regions, due to the ongoing tension between the security forces and Islamic militants. However, the government is taking steps to develop this sector as well.

Algeria Between 1990 and 2003

About the author