Breaking Algeria’s Economic Paralysis

Breaking Algeria’s Economic Paralysis

Algeria is a resource-rich, huge country in
North Africa, in the southern Mediterranean and it plays a very strong role in regional
diplomacy and has weathered the Arab Spring without any real upheaval, which was a great
relief to the country, which has been on a course of stability and had a high degree
of security even compared to Europe for the past five to ten years. Now, Algeria is heading
into a phase where it faces severe economic challenges linked to the drop in oil prices
in 2014, and these challenges are bringing Algeria face to face with the need to transform
its economy and move away from a dependence on hydrocarbons and invest more in productive
capabilities. So it’s really an opportunity to diversify its economy but it’s also a
very difficult economic transition to make at a time when the political situation is
a bit unclear and there is uncertainty surrounding succession. In order to push through a diversification
program, which is an immense challenge, there needs to be a really strong consensus and
strategy for reform. In terms of going up against vested economic interest and risking
alienating large swathes of the population who are very dependent on government subsidies,
the challenges of reforming the economy are certainly considerable. One area that Algeria
has had success in reforming has been in its security sector. It has pushed through professionalising
reforms in terms of its security services and in terms of its army and police. If we
see the same political will for change in the economy, Algeria can move toward the kind
of diversification that it needs to undertake, but it must be very careful to do so in a
way that doesn’t open the floodgates for corruption on the one hand or for setting
off waves of popular resistance to dramatic cuts on the other.

4 thoughts on “Breaking Algeria’s Economic Paralysis

  1. Algeria need to reform its parliament mainly the two ruling parties that hold tight to power since the independence. While also fighting corruption which is still a big deal.

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