===
Planned economy (1962-1978) === The period from independence in 1962 to 1971 was marked by the
nationalization of key economic sectors and the creation of public enterprises like
Sonatrach and
Sonelgaz, as well as the establishment of an industrial sector and the finishing of public institutions. In 1966, a year after
Houari Boumédiène seized power in a
coup d'état, he nationalized mines and foreign insurance companies and signed a cooperation agreement with France. In 1971 the government acquired 51% of the assets of French oil companies in Algeria, effectively nationalizing the
hydrocarbon industry At the same time, it launched the
socialist management of enterprises.
Crisis, restructuring, and privatization (1979-1993) In the early 1980s, while the Algerian economy was being structured, the economic crisis was exacerbated by an
oil glut. The decline of crude oil prices in mid-1985 brutally accelerated in 1986. The fall of oil prices by 40% brutally exposes the Algerian economy's structural dysfunctions and reduced massively the illusion of the industrial potential of Algeria and reveals the dependency and fragility of a system built on solely the performance of the hydrocarbons sector. The 1980s oil glut had profound impact on the country's socioeconomic plan.
An uprising in 1988 ended the one-party socialist regime that had ruled Algeria up until then. In 1991, as parliamentary elections were held, the
Islamic Salvation Front (FIS) was poised to win, prompting the military to cancel the elections, thus resulting in the
Black Decade, which only made the crisis worse. In 1993, hydrocarbons accounted for 98% of export revenue and 90% of medical needs while the country became increasingly dependent on food imports. The
1986 oil price crash and the Black Decade declared a double crisis. As a result, the country found itself externally indebted to avoid a humanitarian crisis and keep the
nomenclature for import contracts, which worsened the already fragile situation. Between 1989-1993, debt servicing absorbed 70% of the country's resources and by 1993, this level reached 80%. Consequently, the functioning of the economy and basic needs of the population were less guaranteed and debt continued to rise. Import bans on several products led to the decline of what little industry was present as well as a significant deterioration of production tools. The financial situation of
state-owned enterprises (SOEs) which make up for 90% of Algerian production deeply deteriorated. By 1990, there were attempts at
economic liberalization under the government of
Mouloud Hamrouche (and then reviewed by his successors), but Algeria as a result of the Black Decade would not attract foreign investors or return immigration capitals === Transition to a
market economy === In early 1994, the transition from a
command economy to a
market economy was confronted by the devaluation of the dinar, the liberalization of foreign trade and prices, and external
debt rescheduling. With the anchorage of the market economy, the middle class primarily composed of
civil servants, would be decimated in a few years. Burdened with a heavy
foreign debt, Algiers concluded a one-year standby arrangement with the
International Monetary Fund in April 1994 and the following year signed onto a three-year extended fund facility which ended 30 April 1998. In March 2006, Russia agreed to erase $4.74 billion of Algeria's Soviet-era debt during a visit by President
Vladimir Putin to the country, the first by a Russian leader in half a century. In return, president
Abdelaziz Bouteflika agreed to buy $7.5 billion worth of combat planes, air-defence systems and other arms from Russia, according to the head of Russia's state arms exporter
Rosoboronexport. Some progress on economic reform,
Paris Club debt reschedulings in 1995 and 1996, and oil and gas sector expansion contributed to a recovery in growth since 1995, reducing
inflation to approximately 1% and narrowing the
budget deficit. Algeria's economy has grown at about 4% annually since 1999. The country's foreign debt has fallen from a high of $28 billion in 1999 to $5 billion. The end of the Black Decade with the defeat of Islamic insurgents, the spike in oil prices in 1999–2000 and the government's tight fiscal policy, as well as a large increase in the trade surplus and the near tripling of foreign exchange reserves has helped the country's finances. However, an ongoing drought, the after effects of the floods of 10 November 2001 and an uncertain oil market made prospects for 2002-03 more problematic. The government has pledged to continue its efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector. .
President Bouteflika has announced sweeping economic reforms, which, if implemented, will significantly restructure the economy. Still, the economy remains heavily dependent on volatile oil and gas revenues. The government has continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, but has had little success in reducing high unemployment and improving living standards. Other priority areas include banking reform, improving the investment environment, and reducing government bureaucracy. The government has announced plans to sell off state enterprises: sales of a national cement factory and steel plant have been completed and other industries are up for offer. In 2001, Algeria signed an Association Agreement with the
European Union. In June 1987, Algeria started accession negotiations for entry into the
World Trade Organization, but negotiations ceased in 2014. In the 2000s the country enjoyed several years of strong economic performance, with solid non-hydrocarbon growth, low inflation, an overall budget surplus and a positive trade balance. == Data ==