Gene Kwan

Modern World
2nd Period
Algeria’s Economy

Although Algeria may have the world’s fifth largest natural gas reserves, it cannot

depend on crude oil as its main economic resource and should open to more economic

possibilities. Algeria mainly depended on agriculture before gaining independence, which

industrialized the country. By the 1960’s-1970’s, the importance of oil venues would

leave Algeria dependent on this resource. Currently, this dependency has left Algeria with

a number of issues including high unemployment, high underemployment, and great

inequality of income distribution.

Much of Algeria’s economy depends on the present political position of the

country. Prior to the civil violence in 1992, Algeria’s economy was fairly diversified.

Agriculture has seen little advance since the colonial times, and inefficiency as well as

low production have made Algeria transform from being a net exporter to being a net

importer of food. High unemployment and great inequality in income distribution go

hand in hand. Not everyone could be in the crude oil business, the people in the crude oil

business receive the majority of the income while those not in the trade receive much

lower income. Lastly, the world aims to use less and less fossil fuels, but the government

plans to raise crude oil output from 1.5 million to 2 million barrels a day by 2010.

Although an ambitious $60 billion five-year plan for 2005-2009 aims to invest in

infrastructure, social and housing projects, implementation has not yet begun. If Algeria

decided to join the World Trade Organization, there would be a few positive factors as a

result from it. The World Trade Organization is a forum for governments to negotiate

trade agreements, a place for them to settle trade disputes, and operate under a system of
 Gene Kwan
Modern World
2nd Period
trade rules. Algeria could utilize this organization to discuss and perhaps find new

possibilities for the economy to take direction.

Other economic paths that Algeria could take would include having more green

jobs, and also investing agricultural advances. Green jobs would firstly, provide more

jobs in the open to change the currently declining employment rate. Secondly, income

would be distributed more equally with these new jobs. Green jobs also directly

correspond to investments in agricultural advancements. Instead of being one of the

world’s leading crude oil exporters, Algeria could also become one of the worlds leading

bio-fuel exporters. Algeria should put some of its economic dependency on green jobs

and agricultural, then the dependency on the oil industry should dramatically decrease.

Although the economy seems to be growing in Algeria, the details within the

economy regarding stability, income distribution and employment stand problematic. If

Algeria has the money to invest in a $60 billion 5-year plan, then it should really consider

reinvesting that money into reviving the agricultural economy of Algeria, thus opening a

new path to economic growth. Joining the World Trade Organization would open Algeria

up to other countries also in the World Trade Organization for negotiations on agricultural

advancements.