Economy

Algeria can claim the title of having the 48th largest economy in the world, as estimated by the CIA. The country has rich deposits of both petroleum and natural gas, which is evident by the fact that Algeria derives 30% of its GDP and 95% of its export earnings from the production and sale of hydrocarbons, which is a fuel source extracted from petroleum. Algeria's largest trade partners are the United States (24.9% of Exports), France (18% of Imports), Italy (17.5% of Exports), and China (10.6% of Imports). The prevalence of crude oil in the country (16th largest oil reserve) lead to Algeria's inclusion in the Organization of the Petroleum Exporting Countries (OPEC).

Graph #1

Although Algeria obtains a large portion of its GDP from the export of energy sources, 32% of the labor force works for the government. This is a lasting legacy of the country's socialist policies following its independence from France. The problem has also been exacerbated by the recent financial crisis, as the government has been forced to offer public grants and benefit increases to help support the local economy. There are also more people working in the agricultural sector (14%), than in the industrial/energy sector (13.4%). The inability of the capital-intensive energy sector to provide a proportional amount of jobs to the wealth it provides has resulted in unemployment of 9.7% in Algeria.

Graph #2

The current condition of Algeria's economy has determined the country's main long-term economic goals. These goals include the diversification of products from just oil and natural gas, allowing privatization to occur on a larger scale, and reducing the unemployment rate, especially for the sake of the next generation of Algerian workers.

Also, in recent news, there has been talk about the creation of the Arab Maghreb Union (AMU), which would unite Tunisia, Libya, Morocco, Mauritania, and Algeria in a North African trading bloc. Renewed interest in an economic union has arisen as a consequence of the recent Arab Spring movement and the progressive thinking it has brought; however, due to previous Morocco-Algeria border disputes, the idea has stalled.


BONUS: A Historical Look at the Algerian Economy




Sources


CIA World Factbook, Algeria: https://www.cia.gov/library/publications/the-world-factbook/geos/ag.html

The liberated Maghred looks to economic union: http://www.thenational.ae/news/world/middle-east/the-liberated-maghreb-looks-to-economic-union#full

Graphs #1 and #2: http://www.imf.org/external/pubs/ft/fandd/2008/06/country.htm

Annual trends charts: http://www.ciaonet.org/atlas/DZ/index.html

Algerian Economy: Industrial, Political and Agricultural Changes: http://www.youtube.com/watch?v=X9ZAWhGD1A8