Economy of Algeria
Template:Update Template:Economy of Algeria table In the economy of Algeria the hydrocarbons sector is the backbone, accounting for roughly 52% of budget revenues, 25% of GDP, and over 95% of export earnings. Algeria has the fifth-largest reserves of natural gas in the world and is the second largest gas exporter; it ranks fourteenth for oil reserves. Algiers' efforts to reform one of the most centrally planned economies in the Arab world stalled in 1992 as the country became embroiled in political turmoil.
Burdened with a heavy foreign debt, Algiers concluded a one-year standby arrangement with the International Monetary Fund in April 1994 and the following year signed onto a three-year extended fund facility which ended 30 April, 1998. Some progress on economic reform, Paris Club debt reschedulings in 1995 and 1996, and oil and gas sector expansion contributed to a recovery in growth since 1995, reducing inflation to approximately 1% and narrowing the budget deficit. Algeria's economy has grown at about 4% annually since 1999. The country's foreign debt has fallen from a high of $28 billion in 1999 to its current level of $24 billion. The spike in oil prices in 1999-2000 and the government's tight fiscal policy, as well as a large increase in the trade surplus and the near tripling of foreign exchange reserves has helped the country's finances. However, an ongoing drought, the after effects of the November 10, 2001 floods and an uncertain oil market make prospects for 2002-03 more problematic. The government pledges to continue its efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector. However, it has thus far had little success in reducing high unemployment, officially estimated at 30% and improving living standards.
President Bouteflika has announced sweeping economic reforms, which, if implemented, will significantly restructure the economy. Still, the economy remains heavily dependent on volatile oil and gas revenues. The government has continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, but has had little success in reducing high unemployment and improving living standards. Other priority areas include banking reform, improving the investment environment, and reducing government bureaucracy.
The government has announced plans to sell off state enterprises: sales of a national cement factory and steel plant have been completed and other industries are up for offer. In 2001, Algeria signed an Association Agreement with the European Union; it has started accession negotiations for entry into the World Trade Organization.
Since Roman times Algeria has been noted for the fertility of its soil. About a quarter of the inhabitants are engaged in agricultural pursuits. More than 7,500,000 acres (30,000 km²) are devoted to the cultivation of cereal grains. The Tell is the grain-growing land. During the time of French rule its productivity was increased substantially by the sinking of artesian wells in districts which only required water to make them fertile. Of the crops raised, wheat, barley and oats are the principal cereals. A great variety of vegetables and of fruits, especially citrus products, is exported.
A considerable amount of cotton was grown at the time of the United States' Civil War, but the industry declined afterwards. In the early years of the 20th century efforts to extend the cultivation of the plant were renewed. A small amount of cotton is also grown in the southern oases. Large quantities of crin vegetal (vegetable horse-hair) an excellent fibre, are made from the leaves of the dwarf palm. The olive (both for its fruit and Petroleum) and tobacco are cultivated with great success.
Throughout Algeria the soil of favours the growth of vines. The country, in the words of an expert sent to report on the subject by the French government,
- "can produce an infinite variety of wines suitable to every constitution and to every caprice of taste."
The growing of vines was undertaken early by the colonists, but it was not until vineyards in France were attacked by phylloxera that the export of wine from Algeria became significant. In 1883, despite precautionary measures, Algerian vineyards were also attacked but in the meantime the quality of their wines had been proved. In 1850 less than 2000 acres (8 km²) were devoted to the grape, but in 1878 this had increased to over 42,000 acres (170 km²), which yielded 7,436,000 gallons (28,000 m³) of wine. Despite bad seasons and ravages of insects, cultivation extended, and in 1895 the vineyards covered 300,000 acres (1,200 km²), the produce being 88,000,000 gallons (333,000 m³). The area of cultivation in 1905 exceeded 400,000 acres (1,600 km²), and in that year the amount of wine produced was 157,000,000 gallons (594,000 m³). By that time the limits of profitable production had been reached in many parts of the country. Practically the only foreign market for Algerian wine is France, which in 1905 imported about 110,000,000 gallons (416,000 m³).
Fishing is a flourishing but minor industry. Fish caught are principally sardines, bonito, smelt and sprats. Fresh fish are exported to France, dried and preserved fish to Spain and Italy. Coral fisheries are found along the coast from Bona to Tunis.
Algeria is rich in minerals; the country has many iron, lead and zinc, copper, calamine, antimony and mercury mines. The most productive are those of iron and zinc. Lignite is found in Algiers; immense phosphate beds were discovered near Tebessa in 1891, yielding 313,500 tons in 1905. Phosphate beds are also worked near Setif, Guelma and Ain Beida. There are more than 300 quarries which produce, amongst other stones, onyx and beautiful white and red marbles. Algerian onyx from Ain Tekbalet was used by the Romans, and many ancient quarries have been found near Kleber, some being certainly those from which the long-lost Numidian marbles were taken. Salt is collected on the margins of the chotts.
Under French administration the commerce of Algeria developed greatly: the total imports and exports at the time of the French occupation (1830) did not exceed £ 175,000. In 1850 the figures had reached £ 5,000,000; in 1868, £ 12,000,000; in 1880, £ 17,000,000; and in 1890, £ 20,000,000. From this point progress was slower and the figures varied considerably year by year. In 1905 the total value of the foreign trade was £ 24,500,000. About five-sixths of the trade is with or via France, into which country several Algerian goods have been admitted duty-free since 1851, and all since 1867. French goods, except sugar, have been admitted into Algeria without payment of duty since 1835. After the increase, in 1892, of the French minimum tariff, which applied to Algeria also, foreign trade greatly diminished.
By far Algeria's most significant exports, financially, are petroleum and natural gas. The reserves are mostly in the Eastern Sahara; the Algerian government curbed the exports in the 1980s to slow depletion; exports increased again somewhat in the 1990s. Other significant exports are sheep, oxen, and horses; animal products, such as wool and skins; wine, cereals (rye, barley, oats), vegetables, fruits (chiefly figs and grapes for the table) and seeds, esparto grass, oils and vegetable extracts (chiefly olive oil), iron ore, zinc, natural phosphates, timber, cork, crin vegetal and tobacco. The import of wool exceeds the export. Sugar, coffee, machinery, metal work of all kinds, clothing and pottery are largely imported. Of these by far the greater part comes from France. The British imports consist chiefly of coal, cotton fabrics and machinery.
- See also : Algeria