The Future
Algeria’s economy made a slow recovery after the civil war that ended in 1962. The conflict damaged or destroyed many towns, farms, and industries. In addition, skilled workers, technicians, and business managers left the country immediately after independence. These factors made rebuilding the economy a difficult task for the new Algerian leadership. Since 1962 the FLN government has nationalized major industries, services, banks, mining companies, and many farm estates. By this action, the government hoped to foster economic recovery while controlling prices, wages, and production. Algeria heavily taxed workers and businesses to pay for new job benefits and social services. But nationalization and high taxes discouraged foreign companies from investing in Algerian firms. Despite its weak economy, Algeria gained income throughout the 1960’s and 1970’s by exporting crude oil and natural gas. This money enabled the government to develop new industries and to begin increasing food production in the late 1980’s. After coming to power in 1979, President Chadli Bendjedid sought to improve the economy by lessening government controls over state-owned businesses. Bendjedid also lowered taxes on small, privately owned firms. Allowed to operate and compete more freely, many Algerian companies began to prosper. Others continued to lose money through inefficiency and outdated methods and equipment. In the late 1980’s and early 1990’s high unemployment and food shortages caused strikes and violent demonstrations. Continuing public unrest has put pressure on the Algerian government to make further economic reforms.
In 1995 Algiers was a city of 3.7 million people. The future will be very exciting and challenging for these inhabitants. The conditions of the Casbah continue to be deplorable. The great number of people and the gross lack of housing must be addressed. Algiers will continue to rely on its natural resources of oil and natural gas. The privatization of many industries will lead to a more efficient and developed city. However, at the same time, the effects of globalization will take their toll on the under class.