A Reuters April 16, 2006 report, datelined Algiers, cited information from Banque d'Algerie-the central bank of Algeria-saying that the economy grew 5.1 percent in 2005. The figures were made public on April 14, 2006.
The report said, too, that growth for the past four years exceeded an average 5.0 percent.
Algeria, of course, is an oil producing country. In regard to Algeria's solid growth numbers, the Banque d'Algerie confirmed that "the growth engine was the hydrocarbons sector."
Oil has delivered a measure of economic stability to Algeria's consumers, which institutions, including the government, have been slow to provide. It is worth noting that the current president has been able to bring to an end what amounted to a long civil war. The civil war began in the early 1990s, and followed a decade plus long war of independence from France, which ended in 1962.
The rising price of oil, and Algeria's competitive position in hydrocarbons worldwide put the government in a position to be able to act to repair and enlarge the country's crumbling infrastructure, and provide not only a safety net for its citizens, but also developmental programs that would enhance the country's ability to attract foreign investment. This, in turn, could lead to growth in Algeria's industrial sector, reducing the country's dependence on oil and its vulnerability to oil price shocks.
According to an October 19, 2005 announcement by the International Monetary Fund (IMF) the government understands the opportunity. "The additional hydrocarbon resources generated by the hike in oil prices are increasing the authorities' leeway for modernizing the infrastructure, strengthening the available human and institutional capital, and implementing the priority reforms, with a view to supporting private sector development and the creation of productive jobs."
According to the Oxford Business Group, a London-based consultancy, Algeria is looking toward affiliation with the World Trade Organization (WTO) and the European Union (EU) in 2006. Both moves will speed reform in the country.
REFORMS CAN CREATE JOBS AND...