Algeria's Economy - Research Paper Example

Download file to see previous pages... However, the sector does not provide enough employment opportunity for the large Algeria’s population, which mainly comprise of youths. Constant and rapid fluctuations in oil prices directly results in budgetary imbalances. This paper focuses on poverty levels, nutrition, and population growth, history of economic development and urban-rural issues, as well as land issues in Algeria. The paper also compares the economy and other aspect of Algerian economy to other countries in Africa, particularly in the North African region. Algeria’s Economy from the Beginning To 1960 By the start of 20th, Algeria was a French colony and was mainly dependent on agriculture for revenue generation. The settlers had invested in large agricultural territories, constructed manufacturing industries, opened up businesses, and made use of cheap available labor from the locals. The French colonial policies within Algeria calculatingly destroyed of the country’s native social system, which had been built to cater for society’s basic needs. The settlers owned most of the Agricultural land, which resulted in high poverty levels among the Algerians. In the 1940, the population grew vastly which endangered the livelihood of most Algerians. Before Algeria’s independence in 1960, Algeria depended vastly on agriculture in addition to oil export. After independence, Algeria’s agricultural growth slowed down and oil as well as other hydrocarbons became an important source of income. Between 1950 and 1960, new land rights were introduced in which land became nationalized (Colombo, Caridi, & Kinninmont, 2012). Algeria’s Economy between 1960 and 1980 Before its independence in 1962, the minority of European colonizers and their progenies controlled the Algerian economy. The Algerian economy has essentially depended on oil exportation for revenue generation hence for economy development. The economy is thus considered a market based economy. During the seventies, the economic policies were grounded on the command economy style (Paciello, Ayeb, Gillot, & Moisseron, 2012). The macroeconomic policies were flaccid and highly dependent on central organization and administrative guidelines. Market prices remained constant for long periods, while basic requirements were heavily subsidized, which resulted in repressed inflation and superfluous demand for the consumer goods. Public division investment was apportioned centrally by managerial schemes. Utmost investment funding was provided by the treasury and distributed to other subdivisions through the Algerian Bank for Development. The entire investment expenses in infrastructure, agricultural sector, and social schemes were dependent on the budget (Paciello, Ayeb, Gillot, & Moisseron, 2012). The distorted prices, poor infrastructure led to neglect of small enterprises. The industrial sector faced numerous managerial problems attributed to bureaucratic and inflexible management structures. Inadequate marketing facilities, poor transport systems, and unsuitable management resulted in widespread wastage of limited resources, which gravely impaired the long-term welfare of the Algerian economy (Europa Publications, 2012). Algeria’s Economy from 1990 Until Now Agriculture remains a highly valued economic activity in Algeria though it currently provides employment to a small percentage of about 5% of the population. ...Download file to see next pagesRead More