Historical profile

Algeria, a gateway between Africa and Europe, has been battered by violence over the past half-century. More than a million Algerians were killed in the fight for independence from France in 1962, and the country has recently emerged from a brutal internal conflict that followed the scrapped elections in 1992.

A large country, more than four-fifths of Algeria's territory is covered by the Sahara desert. Part of the Turkish Ottoman empire from the sixteenth century, Algeria was conquered by the French in 1830. The country was given the status of a departement in its own right. The struggle for independence began in 1954 headed by the National Liberation Front, which came to power on independence in 1962.

Algeria was originally inhabited by Berbers until the Arabs conquered North Africa in the seventh century. Staying mainly in the mountainous regions, the Berbers resisted the spreading Arab influence, managing to preserve much of their language and culture until the present day. The Berbers are Muslim but identify with their Berber rather than Arab cultural heritage. They have long agitated for autonomy, which the government is unlikely to grant but in 2001 it did agree to officially recognise the Berber language, after months of unrest involving Berber youths pressing for greater cultural and political recognition. It has now offered to teach the language in schools. Seventy per cent of the population over 15 years of age can read and write.

1830 Algeria was conquered by the French.

1848 It was made a département of France.

1954 The Front de Libération Nationale (FLN) (National Liberation Front) led the struggle for independence.

1962 Algeria gained independence and Ahmed ben Bella of the FLN was designated Algeria's first president.

1965 Ahmed ben Bella was ousted by Colonel Houari Boumédienne.

1976 Boumédienne won the presidential elections. He introduced a new constitution, which confirmed commitment to socialism, the FLN as the sole political party and Islam as the state religion. A programme of industrialisation was introduced.

1973–76 The Frente Popular para la Liberación de Saguia el Hamra y Río de Oro (Polisario) (Popular Front for the Liberation of Saguia el Hamra y Río de Oro) was formed with Algerian support, wanting self-determination for Spanish Sahara (later known as Western Sahara). Spain handed the territory over to Morocco and Mauritania, Polisario announced the formation of the Saharawi Arab Democratic Republic (SADR) and formed a government-in-exile.

1977–85 Fighting continued between Moroccan military and Polisario forces. Morocco left the African Unity in protest at the SADR's admission to the body.

1988 Full diplomatic relations with Morocco were resumed.

1978 President Boumédienne died and the FLN candidate, Colonel Chadli Benjedid, was elected president; he was re-elected in 1984 and 1989.

1986–91 Rising inflation and unemployment, exacerbated by the collapse of oil and gas prices, led to strikes and violent demonstrations. A UN-monitored cease-fire began in Western Sahara.

1989 The National People's Assembly revoked the ban on new political parties and the Front Islamique du Salut (FIS) (Islamic Salvation Front) was founded.

1991 The FIS won the first round of the parliamentary elections and the second round was cancelled when it seemed certain the FIS would gain an absolute majority in the next round.

1992 Outbreaks of violence followed the cancellation of the elections. The National People's Assembly was dissolved by presidential decree and President Chadli, apparently under pressure from the military leadership, resigned. A five-member Haut Conseil d'Etat (HCE) (High Council of State) was instituted. Violent clashes broke out between FIS supporters and security forces; after a state of emergency was declared, the FIS was banned. Mohammed Boudiaf, chairman of the HCE, was assassinated, allegedly by Islamists. The Armée Islamique du Salut (AIS) (Islamic Salvation Army), the military arm of the FIS, launched a campaign of guerrilla warfare, which killed an estimated 150,000 people.

1994 Liamine Zeroual became chairman of the HCE.

1995 Zeroual was elected president in the first multi-party democratic elections.

1997–98 The newly created Rassemblement Nationale Démocratique (RND) (National Democratic Rally) won the parliamentary elections.

1999 President Zeroual stood down (one year early) and Abdelaziz Bouteflika was elected president. A referendum approved Bouteflika's law on civil concord and thousands of members of the AIS and other armed groups were pardoned.

2000 Attacks continued by small groups of dissidents opposed to the civil accord.

2001 The Berber community were granted greater cultural and political recognition following months of unrest involving Berber youths in the Kabylie region.

2002 The Berber language, Tamazight, was officially recognised as a national language. Berber activists in Kabylie and several opposition parties elsewhere boycotted the parliamentary elections, which were won by the FLN.

2003 A major earthquake hit northern Algeria, the worst since 1980. The leader of the banned FIS and his deputy were freed from prison after serving 12-year sentences. Prime Minister Ali Benflis was dismissed by the President and Ahmed Ouyahia became prime minister.

2004 President Bouteflika was re-elected on 8 April and re-appointed Prime Minister Ouyahia.

2005 In January, Nourredine Boudiafi, the head of the AIS was arrested and his deputy killed. The government promised Berber leaders more investment in the Kabylie region and greater recognition for the Tamazight language. In March an official inquiry concluded that security forces abducted and killed over 6,000 citizens during the 1990s civil unrest. In September there was overwhelming agreement in a referendum, granting amnesty to many who were involved in the post-1992 killings.

2006 On 24 May, Ahmed Ouyahia resigned as prime minister and Abdelaziz Belkhadem was appointed in his place. Measures to increase Sonatrach's role in oil and gas exploration and refining were introduced in October.

2007 In parliamentary elections on 17 May, the FLN was returned with a reduced majority, losing seats on a low turnout to its coalition partners. Prime Minister Belkhadem resigned and was re-appointed by the president along with a new government, on 4 June.

Political structure

The 1976 constitution has been amended three times.

In 1997, the government banned religion-based parties and imposed a law restricting the formation of political parties. All political parties must hold a founding conference attended by 400–500 delegates elected by 25,000 supporters from 25 of the country's 48 provinces. This policy is intended to limit the number of political parties and place at severe disadvantage all parties that lack funding – particularly those, such as the FIS (Islamic Salvation Front), without access to state funds.

Republic

The head of state is the president, elected by universal suffrage for five years. He appoints a prime minister, who in turn appoints a government.

The president has the power to dissolve the government and request elections.

The parliament is composed of the 380-member Al Majlis al Sha'abi al Watani (Assemblée Populaire Nationale) (National People's Assembly) and the 144-member Al Majlis al Umma (Conseil de la Nation) (National Council). Members of the National People's Assembly, which holds legislative power, are elected for five years by universal suffrage. Members of the National Council (the lower house) are elected by communal councils and the president.

The legal system is based on French and Islamic law.

The judicial system consists of 183 courts and 31 appeal courts organised on a regional basis.

There are three special criminal courts in Oran, Constantine and Algiers, which deal with economic crimes against the state (against which there is no appeal) – the Court of State Security which is composed of judges and army officers, the court of audit and the Supreme Court in Algiers, which is the ultimate judicial authority.

Algeria has not accepted International Court of Justice (ICJ) jurisdiction.

17 May 2007 (parliamentary); 8 April 2004 (presidential).

Presidential: Abdelaziz Bouteflika won 84.99 per cent of the vote; Ali Benflis won 6.42 per cent; and Abdallah Djaballah 5.02 per cent. Turnout was 58.07 per cent.

Parliamentary: FLN won 136 seats out of 389; RND 61; MSP 52; Parti du Travail (PT) (Workers' Party) 26; Rassemblement pour la Culture et la Démocratie (RCD) (Rally for Culture and Democracy) 19 seats; and independents 33. Turnout was 35.65 per cent. The ruling three-party coalition of FLN, RND and MSP retained their majority with 249 seats.

2009 (presidential); 2012 (parliamentary).

Political parties

Coalition: Front de Libération Nationale (FLN) (National Liberation Front), Rassemblement National pour la Démocratie (RND) (National Rally for Democracy) and Mouvement de la Société pour la Paix (MSP) (Movement of the Society for Peace) (since 2002; re-elected 17 May 2007)

Parti du Travail (PT) (Workers' Party).

Population

32.88 million (2005)

June 1998: 29,100,867

Population

Nearly 60 per cent of the population is under the age of 25 and approximately 38 per cent is under the age of 14.

The majority of Algerians are of Berber descent. The other significant ethnic group is Arab, although as a result of centuries of integration the two ethnic groups have become increasingly indistinguishable. The distinct Berber culture and language is best preserved in the north and eastern regions of Algeria.

The European population, most of whom are French, has declined from over one million before independence in 1962 to less than 50,000 in 2001.

Islam is the official religion. Approximately 99 per cent of the population is Sunni Muslim, while Christians make up about one per cent.

Education

Primary education lasts for six years. Secondary education, which begins at age 11, is divided into two courses of four years and three years. Approximately 13 per cent of students remain at tertiary level. Teaching is carried out in Arabic, although at higher levels French is widely used.

The government has encouraged girls to attend school to reduce the difference in literacy rates. A total of 86 per cent of girls are now educated to primary level, and 53 per cent to secondary level.

Total expenditure on education is 4–5 per cent of GDP.

Health

Per capita total expenditure on health (2003) was US$186; of which per capita government spending was US$150, at the international dollar rate, (WHO 2006).

All Algerians are entitled to free medical care. Medicines are sold through the state monopoly at subsidised prices, and are provided free to children and the elderly, though there have been some cutbacks. Health indicators point to a deterioration in public health, with infant mortality ratios and infectious diseases increasing. Health care infrastructure and personnel show considerable urban-rural disparities.

Welfare

During the 1990s, unemployment rates increased dramatically, poverty doubled and the purchasing power of the middle class experienced a huge drop.

Government expenditure on social protection is relatively high, but the welfare system is criticised as unsustainable and inefficient. The most serious challenge to the government is tackling unemployment.

The government continues to play a major role in providing housing and basic health services, particularly to urban populations. Substantial housing shortages have proven persistent, despite the deregulation efforts the government undertook to promote private sector construction.

Main cities

Algiers (capital, estimated population 1.5 million in 2005), Oran (771,066), Constantine (507,224), Annaba (383,504), Batna (317,206)

Languages spoken

Arabic (modern standard), known as Fus'ha, is used in the courts, mosques, most of the media and in education.

About 80 per cent of Algerians speak the North African dialectal Arabic, Darja.

French is widely spoken, especially as a language of commerce.

In 2003, Tamazight (the Berber language) was categorised as a national language, but the Berbers want it to have equal status alongside Arabic as an official language. Tamazight belongs to the Afro-Asiatic family and is related to ancient Egyptian and Ethiopian. Berber groups and their dialects include: Kabyles (Taqbaylit), Kabylie region, Kabyle dialect; Chaouia (Ishawiyan), Eastern Algeria, Tashawit dialect; Mozabites (Imzabiyan), northern edge of Sahara, Tamzabit dialect; Tuaregs (Tamachaq), extreme south, Tuareg dialect.

Arabic

Media

Despite laws guaranteeing freedom of access to information and freedom of expression in accordance with the constitution journalists are regularly targeted by not only the authorities but also militant Islamists. There are libel laws with large fines and Sharia (Islamic moral principles) that can curb the media’s ability to question and investigate; self-censorship is prevalent.

The law allows the formation of privately owned newspapers, but any new non-Arabic publication must first be approved by the independent Information Council.

Most newspapers are in private ownership.

In Arabic, Ech Chaab (www.ech-chaab.com) is state-owned, Ech Chourouk (www.echoroukonline.com) and El Khabar are privately owned, with English editions. In French, El Moudjahid (www.elmoudjahid-dz.com) is state-owned, El Watan (www.elwatan.com), Liberte (www.liberte-algerie.com), La Tribune (www.latribune-online.com), and Le Soir d’Algeria (www.lesoirdalgerie.com) an evening newspaper, are all privately owned. Le jeune indépendant (www.jeune-independant.com) is a publication for the young.

In French, a privately owned, current affairs magazine is Algérie Actualité, while El Hakika is an Arab tabloid.

In French, there are three publications, Le Maghreb (www.lemaghrebdz.com), is an influential daily along with Liberte Economie (www.liberte-economie.com), with wide ranging topics, Le Journal d’Affaires (www.lejournaldaffaires.com) is more informal.

In French and Arabic, El Manchar is a bi-monthly satirical magazine.

All broadcasting is state controlled. National public broadcasting is provided by Radiodiffusion Télévision Algérienne (RTA).

Algerian Radio (www.algerian-radio.dz), operated by RTA, has 35 stations providing three radio networks with local and international services in Arabic, French and Tamazight. International services are also provided in Spanish and English.

The state-run Enterprise Nationale de Télévision (ENTV) (www.entv.dz) provides services are in Arabic and French with online programmes. Satellite programming is provided by ENTV through Canal Algérie and Thalitha. ENTV also has collaborative links with French-based Berbère TV (www.brtv.fr).

Although advertising is allowed and adverting agencies operate in Algeria, over 50 per cent of all advertising is placed by government entities and is controlled by the National Publishing and Advertising Agency (ANEP). The market is underdeveloped and the foremost form of advertising is through the print media.

Economy

Algeria has benefited from the sharp rise in global oil prices since 2005, tripling its record foreign exchange reserves between 2000–06. Oil and gas accounts for almost 30 per cent of GDP, 60 per cent of budget revenues and 95 per cent of export earnings. It has been able to pay back around 50 per cent of its outstanding debts to its Paris Club creditors, since the government introduced new hydrocarbon laws that opened up the market to redevelopment with deregulated oil and gas prices.

The IMF warned that the revenue from oil production could suppress growth elsewhere in the economy and should be diversified and reinvested to expand the economy. The government embarked on a five-year US$55 billion spending programme in 2004 and the results have shown improvement in infrastructure and employment prospects. GDP growth was good in 2005 at 5.3 per cent, while unemployment fell from the high of 28.4 per cent (and as much as 50 per cent in the youth group) in 2003, to 13.4 per cent in 2006.

Algeria has huge potential, mainly due to its rich natural resources but also its strategic position close to the fast growing and fuel-hungry EU, to which Algeria has gas pipelines.

The government's policy of turning Algeria's command economy into a market economy is an unpopular one. Industrial action in protest at the sale of public enterprises has continued and the IMF is cautious about the balance between deregulating the market and the sharp rise in job losses this would cause, against the long term good of the market.

Government policy includes improving the investment climate in the tourist sector and the production of non-oil related goods. In reality, obstacles remain for non-oil trade, primarily due to the repatriation of revenues in foreign currencies. A climate of unrest and violence has resulted in a reluctance on the part of private investors to put money into Algeria. This may improve with the pending WTO membership and the EU trade association agreements, although the current ban on alcohol imports is undermining these trade agreements.

Algeria is taking tentative steps towards breaking the stranglehold oil and gas has on its economy, but it remains to be seen if it can diversify at a time when windfall revenue from high oil prices negates the value of any other industry or business.

External trade

The strict control of imports has begun to be relaxed, nevertheless the government still has a great influence in planning the economy, with hydrocarbon exports providing a huge trade surplus each year. Algeria has large gas and oil reserves and a ready market for its natural gas, with a major pipeline already connecting, through Spain, to the rest of Europe.

Algeria has moved closer to full membership of the WTO with changes to its foreign trade policy and the backing of the US, both of whom signed a free trade agreement in 2004. However, in a bid to become a member Algeria must revise legislation on the importation of alcohol that may prove unpopular.

Algeria has an Association Agreement, including free trade with the EU signed in 2005, which provides for the gradual removal of import duties on industrial products and the liberalisation of Algeria's agricultural export market by 2012.

Principal imports are capital goods electrical and electronic goods, semi-finished goods, food and tobacco, transport equipment and raw materials.

France (28.2 per cent of total 2005), Italy (7.8 per cent), Spain (7.1 per cent), China (6.6 per cent), Germany (6.3 per cent), US (5.5 per cent)

Principal exports are hydrocarbons; chemical fertilizers, iron and steel, wine, tobacco and foodstuffs.

US (22.5 per cent of total 2005), Italy (16.2 per cent), Spain (10.4 per cent), France (10.0 per cent), Canada (8.0 per cent), Belgium (4.4 per cent), Belgium (4.4 per cent), Germany (4.2 per cent)

Agriculture

The sector employs about 25 per cent of the labour force and contributes around 10.5 per cent of GDP. Just over 40,000,000 hectares (ha) are given over to agriculture, or around 16 per cent of total land available, of which over 8,250,000ha are under arable and permanent crops.

Climatic conditions and the availability of water for irrigation directly affect crop yields. Despite extensive irrigation programmes and the dividing of state holdings into smaller units, agricultural output has failed to keep pace with the rate of population growth. Imports typically represent around 25 per cent of import costs. Government policy had been to reduce reliance on imported food, now, however, an open market is developing as state owned agricultural land is returned to private hands.

Underlying constraints to growth include soil erosion, desert encroachment, inefficient management in the state sector, poor marketing, recurrent droughts and the inability of farmers to secure loan finance due to problems with land security.

Government plans to reduce dependence on imports by a series of measures, included investing in new technology, financial incentives for state and private sector farms to buy equipment, encouraging foreign investment, less interference in the private sector and tree planting to arrest desertification.

There has been a large increase in the number of vineyards now operating in Algeria, providing a boost in export revenue. Although wine consumption is banned under Islamic law, production has been increasing; since the end of the 1990s it has doubled to around 500,000 hectolitres by 2005. It has provided a healthy income for farmers, in semi-arid regions, when other food crops have failed.

Main cash crops are grapes, oranges, olives, dates, tobacco, sugar beet and tomatoes. Hard and soft wheat and barley are grown for the home market, as are vegetables, and pulses.

Estimated crop production in 2005 included: 3,996,000 tonnes (t) cereals in total, 2,600,000t wheat, 1,314,000t barley, 1,800,000t potatoes, 560,090t citrus fruit, 170,000t olives, 880,000t tomatoes, 200,000t chillies & peppers, 33,000t treenuts, 40,000t garlic, 135,000t apples, 275,000t grapes, 63,000t figs, 470,000t dates 6,5000t tobacco, 1,892,890t fruit in total, 49,647t oilcrops, 52,580t pulses, 3,258,200t vegetables in total. Estimated livestock production included: 581,219t meat in total, 125,000t beef, 3,400t camel meat, 177,350t lamb and goat meat, 253,000t poultry, 165,000t eggs, 1,668,100t milk, 2,720t honey, 24,250t sheepskins, 20,000t greasy wool, 12,900t cattle hides.

The fisheries sector largely consists of small-scale private sector operators, virtually all of whom do their fishing in the Mediterranean. Main catches include sardines, anchovies, sprats, tuna and shellfish.

The government plans to boost fisheries by modernising the Mediterranean ports, where most of the catch is landed. It has also set up a partnership with West African states for fishing in the Atlantic Ocean.

In 2004 the total marine fish catch was 135,929 tonnes and the crustacean catch was 2,631 tonnes.

Less than 2 per cent of Algeria's total land area is covered with forest or wooded land and the country is one of the largest importers of wood in Africa.

Algeria's forest resources cover some 3.5 million hectares (ha), with the state monopoly processing some 272,000 cubic metres of wood annually. All of the forest and arable land is in a broad coastal strip, around 400km wide. As part of plans aimed at reducing desertification the government has established an extensive tract of plantation forests.

Algeria is among the world's largest producers of cork. Other forestry products include sawn timber, wood-based panels and paper based on non-wood fibres. Most domestic demand for forest products is met through imports.

Timber imports in 2004 amounted to US$273 million while exports amounted to US$2.8 million.

Production in 2004 included 7,663,603 cubic metres (cum) roundwood, 118,600cum industrial roundwood, 12,800cum sawnwood, 48,200cum wood-based panels, 7,545,003mcum woodfuel, 604,059t charcoal.

Industry and manufacturing

Industry represents 50 per cent of GDP and employs 23 per cent of the labour force. Algeria's industrial sector is dominated by large, inefficient state-owned companies that have largely survived only due to the credit extended them by the country's state-owned banks. Government attempts to privatise these industries have been frustrated by a lack of investor interest and the fear that the possible mass redundancies which may result will cause further social instability.

The largest company in Algeria is the state-owned hydrocarbons concern, Société Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures (Sonatrach).

Production is dominated by heavy industries such as steel, petrochemicals, fertilisers and cement, but the focus of development is changing to light industry. In November 2005 the first laptop computers produced in Algeria went on sale. The manufacturers, EEPAD, an Algerian Internet service provider, aim at producing one million units a year, enough to supply every home in Algeria, by 2010.

Traditional agri-allied industries are also important, particularly textiles, food processing and tobacco and cigarette production. However past lack of investment and inefficiencies in these industries resulted in generally low productivity. In an effort to modernise the government has allowed some entities to be expanded, charge competitive prices and invest profits. Industry is opening up to more foreign involvement, particularly in large-scale projects such as motor vehicle assembly.

Main constraints to development are shortages of vital inputs and skilled labour, high production and transport costs and maintenance problems. Industrial development is centralised in the northern coastal strip, but plans exist to extend industry to the high plateaux in the south.

Tourism

Algeria's tourism, which always lagged behind that of neighbouring Morocco and Tunisia, was wrecked by the civil war in the 1990s, from which it has not yet recovered. Now that the violence and insecurity is likely to be rare, the government is trying to revive the sector, with the focus on up-market rather than mass tourism. Capital investment in the sector is estimated at 5.9 per cent of the total. New hotels are being built along the Mediterranean coast and adventure holidays are planned for tourists to the south.

French tourists are the largest group visiting, followed by Tunisian and other Arab citizens. The tourist sector only contributes around 1 per cent of GDP, and less than 6 per cent of total employment, however the potential for growth is great. There are a good supply of airports and docks that could be utilised quickly, although the countrywide infrastructure still has to be redeveloped to cater for the 5.1 per cent per annum growth rate (2005–15) expected in travel and tourism.

Mining

The mining and hydrocarbons sector employs 4 per cent of the labour force and contributes 40 per cent to GDP.

Algeria is rich in minerals, including iron ore, uranium, zinc, phosphates, gold, antimony, bituminous coal, tungsten, manganese, lead, mercury and salt. The mining of iron ore and phosphate for feedstocks (for local steel and fertiliser production, respectively) and for export are the most important.

Also located near the Moroccan border are iron-ore reserves estimated at two billion tonnes. The remote location and the Western Sahara/Morocco conflict have so far prevented exploitation.

Hydrocarbons

In 2004, oil reserves stood at 11.8 billion barrels, although new oil discoveries, improved data on existing fields and a recent increase in exploration are likely to mean that Algeria's reserves will be revised upwards.

Natural gas reserves stood at 4.55 trillion cubic metres in 2004 with production of 82 billion cubic metres in 2004, a decrease of 1 per cent on 2003.

Coal represents approximately 1 per cent of total energy consumption. Algeria's total recoverable coal reserves are estimated at 40 million tonnes.

The state-run Sonatrach announced, in 2005, that the responsibility for the oil and gas sectors will be divided between exploration, Agence Nationale pour la Valorisation des Resources en Hydrocarbures (Alnaft) and control and regulation of activities, Autorité de Régulation des Hydrocarbures (ARH). Alnaft will deal with technical regulations and the ARH with investment and development.

Approximately 90 per cent of Algeria's crude oil exports go to Western Europe, with Italy as the main market followed by Germany and France. The Netherlands, Spain and Britain are other important European markets. Algeria's Saharan blend oil, 45 degrees API with negligible (0.05 per cent) sulphur content, is considered among the highest quality in the world.

Energy

Algerian energy demand has been increasing by 5 per cent per annum and is expected to continue to grow at this rate as the government housing programme unfolds.

The existing 6,600MW of generating capacity is produced by oil and natural gas. Three new generating stations are under construction to add an extra 2,525MW to the network. In September 2005 Sonelgaz subsidiary electricity supply company announced a US$7 billion investment in a new power grid, incorporating high voltage power lines.

Financial markets

The Algiers stock exchange (Bourse d'Alger) was formally opened in 1999.

Banking and insurance

The Algerian banking sector is dominated by six state-owned banks. There is a total of 17 commercial banks and 10 financial institutions. The banking sector remains inefficient, with the large state banks acting mainly as depository institutions and financing loss-making public sector companies.

Banque d'Algérie.