Algeria: an economic approach to the crisis

The Algerian civil conflict has been explained in terms of cultural, religious and political processes, if not considered either as a test case for the "clash of civilizations" or as an evidence of the purported fundamentalist drift of islam at odds with modern society. However, an analysis of the socioeconomic development model implemented by the post-colonial Governments from 1962 through 1988 delivers a revealing, albeit partial logical framework for the crisis. The Algerian development model relied on the income from hydrocarbons exports as the only source of finance for development and capital build-up. The absolute priority attached to a capital- and foreign technology intensiveindustrialization policy focused on heavy industries combined with neglect of agriculture to cause a massive rural migration to city suburbs lacking all kinds of infrastructure and even housing facilities, as well as a virtually full food dependency. This resulted in the exclusion from the economic system of large segments of the population, bound to unemployment or outright poverty. Algeria became a paradoxical case of dual, outward-looking, specialized, dislocated economy. The fast population growth and the young demographic structure, together with this lack of economic opportunities, built the sociological background in which the islamic political groups thrived as the only real social policy alternative. The Algerian crisis may be understood in terms of political economy of oil income appropriation.