Algeria’s Political Economy (1999-2002): an Economic Solution to the Crisis?

This article provides a detailed critical analysis of the economic policy implemented by the Algerian Governments between 1999 and 2002 (under the presidency of Abdelaziz Bouteflika), of its results, and of the advance of their structural reforms program. In this context, the social base of these reforms and the degree of social and political consensus about them are considered. Finally, the paper reviews the principal aspects of economic policy that will determine how far this policy will contribute to offering a solution to the serious crisis that Algeria has been undergoing since 1988 and to deactivating the risk of social instability that haunts the country: the issue of employment, the creation of a free trade area with the European Union and its impact, the role of the private sector and export diversification, foreign investment, and the regulation of the nation’s principal economic sector, the hydrocarbon sector. Within this framework, the matter of the viability of the reforms is raised, in a country dominated by the informal economy and the circuits for rent appropriation and realization that are parallel to the market, as well as the matter of the interaction between economic reform and political reform.