Algeria Economy in the 1980's

Algeria Economy in the 1980’s


The most recent demographic census dates back to April 20, 1987, and at the time the population was 23,038,900 residents; according to official estimates, in 1998 the number of residents was 30,081,000. Despite being in evident decline, population growth continues to remain at rather high levels; however, the symptoms of a progressive overcoming of the most acute phase of the demographic transition tend to consolidate. Birth rates are slowly contracting and death rates are also settling on those found in more developed countries. In the first half of the 1980s, the average annual growth rate was around 30 ‰, while in the second half it had dropped to 26 ‰ and in the first five years of the 1990s to 23 ‰. The average annual birth rate, in the range 1990 – 95, he was still stood at 29 ‰, while the mortality rate was of 6, 4 ‰.

The distribution of the population is strongly conditioned by physical factors and, compared to the past, is even more concentrated in the main cities and in the northern part of the country. Data relating to the 1990s are lacking except for the capital, Algiers, which in 1995 had a population of 2,168,000 residents (3,702,000 in the entire urban agglomeration). In 1987 the same it counted 1, 7 million or so (2, 6 million in the agglomeration); far exceeding the other major cities (Oran, a little less than 600. 000 residents; Constantine, 450.000 ; Annaba, 230. 000 ; Sétif, 186,000 ; Batna, 185,000). Overall, still at the date of the 1987 census, there were about twenty urban centers with populations over 100. 000 residents.

The climate of insurrection and political violence, which followed the 1991 elections and their subsequent annulment and which – at the end of the decade – continues to persist, has profoundly altered the social, economic and territorial frameworks of the Algeria and has confined the country to progressive international isolation. The succession of very serious bomb attacks and the equally ferocious responses of the police have made traditional forms of organized and civil life precarious, as well as scarce and unreliable information on the internal situation.

Economic conditions

The dramatic political situation in which the country finds itself has had repercussions especially in the economic field. Attempts to diversify the production structure to make it less dependent on the resources of the subsoil, through a progressive process of liberalization of the economy and encouragement of foreign investments, are continually frustrated by the climate of uncertainty that reigns within. The large external debt is addressed through the export of hydrocarbons, but it is increasingly evident how the Algerian dependence on oil and natural gas makes the country’s economy fragile and vulnerable (for example, it is too tied to the dramatic fluctuations in prices on international markets). For Algeria economics and business, please check

Over 40 % of the Algerian population must be considered rural; in an attempt to avoid accelerated forms of urbanization, measures have been introduced to encourage the growth of agriculture. However, the sector remains overpopulated due to the very high extension of arid and semi-arid areas, in which only subsistence agriculture can be practiced, with traditional means and with very low yields. The only region characterized by fair fertility is the coastal strip, and overall it extends over just over 7 millions of hectares. Most of the fertile land is used to cultivate products for export, and if we add to this the significant increase in domestic demand, linked to the rapid demographic growth of the past years, this explains the sharp decrease in the country’s self-sustaining capacity: currently three quarters of food products intended for domestic consumption must be imported. Moreover, the situation is not favorable even for crops traditionally destined for export (the quantity of wine produced halved between 1988 and 1995). Total agricultural production, partly conditioned by the unfavorable meteorological trend, is in decline, unit yields are very low and only citrus growing has shown expansion capacity. Livestock is growing slightly, but the sector requires significant organizational improvements to develop (eg, strengthening water supply, disease control, expansion of pastures, growth of storage capacities).

The real hub of the Algerian economy continues to revolve around the resources of the subsoil. The country is rich in iron, phosphates, lead, zinc and antimony. The monopoly of SONAREM (Société Nationale de Recherche d’Exploitations Minières) has been dismantled and the sector has been entrusted to private capital and foreign investors. The coordination functions of the mining companies are carried out by an office for geological and mining research. As far as iron ores are concerned, it should be noted that their content is particularly high, but the productions are low and for the most part they are exported to Italy. Hydrocarbons represent the great wealth of Algeria: oil and natural gas are extracted in large quantities and for the most part are exported. Société Nationale de Transport et de Commercialisation des Hydrocarbures) continues to manage the entire sector, and to enhance exploitation agreements have been entered into, as well as with US, Italian and Spanish companies, also with Japanese companies. The refining potential has been expanded and thirteen local companies are in charge of this operation.

Large financial resources have been devoted to the manufacturing sector since the early 1970s. The steel industry, considered of strategic importance by virtue of its characteristic of propulsiveness towards other industrial sectors, has been strengthened and, currently, its production capacity is close to 2 million tons per year. For many reasons, to which internal instability is certainly not unrelated (several times the plants have suffered sabotage), the utilization rate of the plants is however low, being just over 50%. Increasing refining capacities and strengthening the chemical industry remain priority objectives of Algerian industrial policy. As for the other industrial sectors, in the country there is a certain number of companies specialized in the production of medium and low technology goods for domestic consumption. The craftsmanship is very lively, however, as well as tourism, it suffers from the situation of internal instability.

Algeria Economy in the 1980's

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