War-Torn or Systemically Distorted?

Abstract

Algeria today is emerging slowly out of more than a decade of civil war, during which perhaps as many as 150,000 Algerians died. Sporadic violence in the country persists, with roughly 700 insurgents and unknown numbers of government-backed militias still operative. Nonetheless, the climate of fear and insecurity of the mid-1990s is no more. However, the economy, which went into a downward tailspin in the mid-1980s when oil prices plummeted, and did not even begin a recovery until the late 1990s with the dramatic increase in the price of oil, has remained more or less moribund, and this despite several World Bank and IMF interventions— including both structural adjustment programs and massive rescheduling of foreign debts—and incessant talk of reform. The hydrocarbon sector and the parallel sector remain the only vibrant terrains of economic activity.