Algeria

ALGERIA

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS ALGERIANS
DEPENDENCIES
BIBLIOGRAPHY

Democratic and Popular Republic of Algeria

Al-Jumhuriyah al-Jaza'iriyah ad-Dimuqratiyah ash-Sha'biyah

CAPITAL: Algiers (Alger)

FLAG: The national flag consists of two equal vertical stripes, one green and one white, with a red crescent enclosing a five-pointed red star in the center.

ANTHEM: Kassaman (We Pledge).

MONETARY UNIT: The Algerian dinar (da) is a paper currency of 100 centimes. There are coins of 1, 2, 5, 10, and 50 centimes and 1, 5 and 10 dinars, and notes of 10, 20, 50, 100, and 200 dinars. da1 = $0.01395 (or $1 = da71.67) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year's Day, 1 January; Labor Day, 1 May; Overthrow of Ben Bella, 19 June; Independence Day, 5 July; Revolution Day, 1 November. Muslim religious holidays include 'Id al-Fitr, 'Id al-'Adha', 1st of Muharram (Muslim New Year), and Milad an-Nabi. Christians observe their own religious holidays.

TIME: GMT.

LOCATION, SIZE, AND EXTENT

Situated in northwestern Africa along the Mediterranean Sea, Algeria is the second-largest country on the continent. Comparatively, it is slightly less than 3.5 times the size of Texas, with a total area of 2,381,740 sq km (919,595 sq mi). Extending about 2,400 km (1,500 mi) ew and 2,100 km (1,300 mi) ns, Algeria is bounded on then n by the Mediterranean Sea, on the e by Tunisia and Libya, on the se by Niger, on the sw by Mali, on the w by Mauritania, and on the w and nw by the Western Sahara and Morocco; the total boundary length is 6,343 km (3,933 mi). Land boundary and claims disputes with Libya were unresolved as of late 2002.

Algeria's capital city, Algiers, is located on the northern boundary of the country on the Mediterranean Sea.

TOPOGRAPHY

The parallel mountain ranges of the Tell or Maritime Atlas, comprising coastal massifs and northern inland ranges, and the Saharan Atlas divide Algeria into three basic longitudinal zones running generally eastwest: the Mediterranean zone or Tell; the High Plateaus, including the regions of Great and Small Kabilia; and the Sahara Desert, accounting for at least 80% of Algeria's total land area. About half of Algeria is 900 m (3,000 ft) or more above sea level, and about 70% of the area is from 760 to 1,680 m (2,500 to 5,500 ft) in elevation. The highest point is Mount Tahat (3,003 m/9,852 ft), in the Ahaggar Range of the Sahara.

Only the main rivers of the Tell have water all year round, and even then the summer flow is small. None of the rivers are navigable. The mountainous areas of the High Plateaus are poorly watered; most of the rivers and streams (oueds) flow irregularly, since they depend for water upon an erratic rainfall. In the High Plateaus are many salt marshes and dry or shallow salt lakes (sebkhas or shotts). Farther south, the land becomes increasingly arid, merging into the completely dry desert.

Algeria lies on the African Tectonic Plate. Northwestern Algeria is a seismically active area. Earthquakes on 10 October 1980 in a rural area southwest of Algiers left over 2,500 persons dead and almost 100,000 homeless.

CLIMATE

Northern Algeria lies within the temperate zone, and its climate is similar to that of other Mediterranean countries, although the diversity of the relief provides sharp contrasts in temperature. The coastal region has a pleasant climate, with winter temperatures averaging from 10° to 12°c (50° to 54°f) and average summer temperatures ranging from 24° to 26°c (75° to 79°f). Rainfall in this region is abundant38 to 69 cm (15 to 27 in) per year, and up to 100 cm (40 in) in the eastern partexcept in the area around Oran (Ouahran), where mountains form a barrier against rain-carrying winds. When heavy rains fall (often more than 3.8 cm/1.5 in within 24 hours), they flood large areas and then evaporate so quickly that they are of little help in cultivation.

Farther inland, the climate changes; winters average 4° to 6°c (39° to 43°f), with considerable frost and occasional snow on the massifs; summers average 26° to 28°c (79° to 82°f). In this region, prevailing winds are westerly and northerly in winter and easterly and northeasterly in summer, resulting in a general increase in precipitation from September to December and a decrease from January to August; there is little or no rainfall in the summer months.

In the Sahara Desert, temperatures range from -10° to 34°c (14° to 93°f), with extreme highs of 49°c (120°f). There are daily variations of more than 44°c (80°f). Winds are frequent and violent. Rainfall is irregular and unevenly distributed.

FLORA AND FAUNA

Characteristic trees of northern Algeria are the olive and the cork oak. The mountain regions contain large forests of evergreens (Aleppo pine, juniper, and evergreen oak) and some deciduous trees; the forests are inhabited by boars and jackals, about all that remain of the many wild animals once common. Fig, eucalyptus, agave, and various palm trees grow in the warmer areas. Esparto grass, alfa, and drinn are common in the semiarid regions. On the coastal plain, the grape vine is indigenous.

Vegetation in the Sahara is sparse and widely scattered. Animal life is varied but scarce. Camels are used extensively. Other mammals are jackals, jerboas, and rabbits. The desert also abounds with poisonous and nonpoisonous snakes, scorpions, and numerous insects.

ENVIRONMENT

Algeria's principal environmental problem is encroachment of the desert onto the fertile northern section of the country. Soil erosion from overgrazing adds to the effect. To impede desertification, the government in 1975 began a project to erect a "green wall" of trees and vegetation 1,500 km (930 mi) long and 20 km (12 mi) wide along the northern fringes of the Sahara. The annual cost of this 20-year afforestation project was about $100 million. In 2000, about 0.9% of the land was forested. As of 2003, about 5% of the total land area was protected. The country has two Ramsar sites: Karavasta Lagoon and Butrint.

Other significant environmental problems include water shortages and pollution. The small amount of water available in Algeria is threatened by regular droughts. The problem is further complicated by lack of sewage control and pollutants from the oil industry, as well as other industrial effluents. The Mediterranean Sea has also been contaminated by the oil industry, fertilizer runoff, and soil erosion.

As of 2002, there were at least 92 species of mammals, 183 species of birds, and over 3,000 species of higher plants. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), the number of threatened species included 12 types of mammals, 11 species of birds, 2 types of reptiles, 1 species of amphibian, 10 species of fish, and 2 species of plants. Endangered species include the Barbary hyena, Barbary leopard, Barbary macaque, the Algerian nuthatch, the North African fire salamander, the African lion, the common otter, and the Mediterranean monk seal. The red gazelle and the Sahara oryx were listed as extinct as of 1994.

POPULATION

The population of Algeria in 2005 was estimated by the United Nations (UN) at 32,814,000, which placed it at number 35 in population among the 193 nations of the world. In 2005, approximately 5% of the population was over 65 years of age, with another 31% of the population under 15 years of age. There were 102 males for every 100 females in the country. According to the UN, the annual population rate of change for 20052010 was expected to be 1.5%. which the government feels is too high. The government has placed emphasis on reproductive health, with a resulting decline in fertility rates from 4.7 births per woman in 1990 to 3.6 in 2005, due in part to increased use of contraceptives. The projected population for the year 2025 was 40,604,000. The population density was 14 per sq km (36 per sq mi).

The UN estimated that 49% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 2.45%. The capital city, Algiers (Alger), had a population of 3,060,000 in that year. Other large cities and their estimated populations include Batna, 948,000; Oran, 794,200; and Constantine (Qacentina), 688,100.

The population is concentrated in the cultivated areas of the northern Tell region near the Mediterranean coast. More than 90% of the populace lives in approximately one-eighth of the country. The plateau and desert regions are sparsely populated.

MIGRATION

In 1962, some 180,000 Algerian refugees were repatriated from Tunisia and Morocco; after independence was declared in July 1962, about 650,000 French Algerians and more than 200,000 harkis (Algerian Muslims who fought on the French side during the war of independence and chose to retain French citizenship) emigrated to France. The exodus reduced the French population from about 10% of the total in 1961 to less than 1% in 1981. There were around 24,000 displaced persons from Mali and Niger located in the southern Algerian region of Tamanrasset, Adrar, and Illizi. In 1995, the United Nations High Commissioner for Refugees (UNHCR) started the repatriation of the Tuareg refugees back to Mali and Niger. Repatriation was complete as of June 1998, benefiting some 6,302 Malians and 3,259 Nigerians. At the closing of the refugee camps, some 200 residual refugees remained. As of May 1997, there were an estimated 4,000 Palestinians that were well integrated in Algerian society. As a result of the war between the Polisario guerrillas and Morocco over the Western Sahara, about 150,000 Sahrawi refugees fled to Algeria. In November 2005, the UN Office for the Coordination of Human Affairs reported that 165,000 refugees from Western Sahara have remained in the region of Tindouf in southwestern Algeria since 1999. In 2003, there were approximately one million internally displaced persons (IDP) within the country. As of 2004, there were 169,500 refugees remaining in Algeria. In 2004, the main countries in which over 9,700 Algerians sought asylum were France, Spain, the United Kingdom, Switzerland, Belgium and Germany.

The estimated net migration rate for Algeria for 2005 was -0.37 migrants per 1,000 population. The government views the migration levels as satisfactory.

ETHNIC GROUPS

The population consists almost entirely of Arabs. They are primarily of Berber origin, particularly in the Kabilia and Aurès areas and in the Sahara oases, or admixtures of Berbers with invaders from earlier periods. The Berbers, who resemble the Mediterranean subrace of Southern Europe, are descendants of the original inhabitants of Algeria and are divided into many subgroups. They account for 99% of the population. The Kabyles (Kaba'il), mostly farmers, live in the compact mountainous section in the northern part of the country between Algiers and Constantine. The Chaouia (Shawiyyah) live in the Aurès Mountains of the northeast. The Mzab, or Mozabites, include sedentary date growers in the Ued Mzab oases. Desert groups include the Tuareg, Tuat, and Wargla (Ouargla).

Europeans are of French, Corsican, Spanish, Italian, and Maltese ancestry. Algeria's European population was estimated at less than 1% of the population in 2005. About half the Jews in Algeria were descended from converted Berbers, and the remainder were mainly descendants of Spanish Jews. Within a month after Algeria became independent, about 70,000 Jews emigrated to France and 10,000 to Israel. Almost all the rest left Algeria during the next seven years; fewer than 100 Jews remained as of 1998, and virtually all synagogues had been converted to mosques.

LANGUAGES

The official and majority language is Arabic, with many variations and dialects, but many Algerians also speak French; "Arabization" has been encouraged by the government. About one-fifth of the population speaks a wide variety of Berber dialects, particularly in Kabilia, in the Aurès, and in smaller, relatively protected areas in the mountains and the Sahara. Berber is a distinct branch of the Hamitic language group; dialects vary from district to district. In antiquity, the Numidians wrote Berber in script form.

RELIGIONS

About 99% of the population adheres to the practice of Islam, which is named in the constitution as the state religion. Except for a small minority of Kharijites (Ibadhis) in the Mzab region, most Muslims are adherents of the Maliki rite of the Sunni sect, with a few Hanafi adherents. The law prohibits assembling for purposes of practicing any faith other than Islam. However, there are Roman Catholic churches that conduct services without government interference. Non-Muslims usually congregate in private homes for worship services. Proselytizing of non-Muslim faiths is and the importation of non-Muslim religious materials are legally prohibited. In practice, however, the government does not actively interfere in religious conversions. Foreigners who practice non-Muslim faiths are generally shown a greater degree of social tolerance than non-Muslim citizens.

The number of non-Muslim residents has been estimated as being less than 5,000. Many non-Muslims have fled the country because of the civil war and acts of terrorism by Islamic extremists. The number of Christians and Jews is thus significantly lower than in the early 1990s. The largest non-Muslim groups are Methodists and Evangelists, followed by Roman Catholics and Seventh-Day Adventists.

TRANSPORTATION

In 2004, Algeria's nationally owned railroad had about 3,973 km (2,471 mi) of track, which consisted of 2,888 km (1,796 mi) of standard gauge right of way (283 km electrified), and 1,085 km (675 mi) of narrow gauge track. The system consists principally of a main eastwest line linked with the railways of Tunisia and Morocco and of lines serving the mining regions of Béchar (formerly Colomb Béchar); the esparto grass country on the High Plateaus; the date-producing areas of Biskra, Touggourt, and Tebessa; and the main port cities.

Roads are most adequate in the Tell zone, but in the mountainous and rural areas, they are relatively poor. In 2002 there were 104,000 km (64,625 mi) of roads, of which about 71,656 km (44,527 mi) were paved, including 640 km (398 mi) of expressways. In 2003, there were 372,300 passenger cars and 528,000 commercial vehicles. The French colonial administration built a good road system, partly for military purposes, which after independence was allowed to deteriorate to some extent; however, new roads have been built linking the Sahara oil fields with the coast. Algeria's portion of the trans-Saharan highway, formally known as the Road of African Unity, stretching about 420 km (260 mi) from Hassi Marroket to the Niger border south of Tamanrasset, was completed in 1985.

Algiers is the principal seaport. Other significant ports are Arzew, Bejaïa (Bougie), Skikda (a large gas-exporting center also known as Philippeville), Oran, Annaba, Ghazaouet, and Mostaganem. Algeria's merchant fleet numbered 56 ships of 1,000 GRT or over, totaling 837,676 GRT as of 2005

An extensive air service used an estimated 137 airports and airstrips in 2004. As of 2005, a total of 52 had paved runways, and there was one heliport. The main international airport, H. Boumediene Airport, is about 20 km (12 mi) from Algiers. Constantine, Annaba, Tilimsen (Tlemcen), and Oran have smaller modern airports that can accommodate jet aircraft. Air Algérie, the national airline, provides international service. In 2003, a total of about 3.293 million passengers were carried on domestic and international flights.

HISTORY

Before the period of recorded history, the North African coastal area now known as Algeria was inhabited by Berber tribal groups, from whom many present-day Algerians are descended. Phoenician sailors established coastal settlements, and after the 8th century bc, the territory was controlled by Carthage. Roman dominance dates from the fall of Carthage in 146 bc. Completely annexed in ad 40, the region, known as Numidia, became a center of Roman culture. Christianity flourished, as did agriculture and commerce; Numidian wheat and olives were shipped to Rome. By the mid-3rd century there were some 20 Numidian bishops. Despite the prosperity of the Roman cities and the cereal-growing countryside, there were frequent Berber revolts. The Roman influence gradually declined, especially after the Vandal invasion of 43031. The Byzantine conquered eastern Numidia in the 6th century.

After the Arab conquest began in 637, the area was known as Al-Maghrib al-Awsat, or the Middle West and continued for a century. The Berbers accepted Islam but preserved their own traditional political and social institutions, in effect absorbing the invaders. Arabs from the east attacked in the 11th century. These newcomers, unlike their predecessors, were nomadic herders rather than farmers; they destroyed many of the towns and farms and reinforced a more pastoral type of economy. Almoravids from Morocco also took possession of part of the region in the 11th century, and they were succeeded by Almohads a century later. Although these and other dynasties and individuals united the territory and consolidated it with Morocco and Spain, local rulers retained considerable autonomy. Meanwhile, seafaring and piracy became important.

Spain conquered part of the coast in the early 16th century, and Algerians asked the aid of 'Aruj, known as Barbarossa, a Turkish pirate. He expelled the Spaniards from some of their coastal footholds, made himself sultan, and conquered additional territory. The area of Barbarossa's control was extended by his brother, Khayr ad-Din, also called Barbarossa, who placed his territory under the suzerainty of the Ottoman sultan in Constantinople. Until 1587, Algiers was governed by beylerbeys; from 1587 to 1659, by pashas, who were appointed for three-year terms; and after 1659, by aghas and finally by deys (28 deys in all, 14 of whom were assassinated). Other parts of what is now called Algeria were ruled either by Turkish officials or by local chieftains. Spain held a small area around Oran until 1708 and controlled it again from 1732 to 1791.

Algiers became increasingly independent of Constantinople and, joining with other states of the Barbary Coast, thrived on piracy. At this time, it had diplomatic and trade relations with many European countries, including France. But with the defeat (though not suppression) of the Barbary pirates by US and European fleets during 181516, and with the growing European interest in acquiring overseas colonies, Algiers was seen as a possible addition to either the British or the French empire. In 1830, the French took over the principal ports; they gradually subjugated the Berbers, annexed the northern regions, and set up a system of fortified posts. Thereafter, sporadic revolts broke out, notably the guerrilla war from 1830 to 1847, led by the legendary hero, Abd al-Qadir, and the Kabyle rebellion in 1871. Other sections, however, remained independent of France until the first decade of the 20th century.

Al-Jazair, as it was called in Arabic, became, in French, Algérie, a name that France applied to the territory for the first time in 1839. In 1848, northern Algeria was proclaimed an integral part of France and was organized into three provinces. Following the Franco-Prussian War of 187071, large numbers of Alsatians and other French colonizers settled the most fertile confiscated lands, as did other Europeans at the invitation of France. Muslims had no political rights except for limited participation in local financial delegations.

Following World War I, France took the first steps toward making all Algeria an integral part of France. In 1919, voting rights were given to a few Muslims, based on education and military service qualifications. French citizenship had previously been open to Muslims who renounced their Koranic status.

During World War II, in exchange for loyalty to France, many Muslims hoped for political concessions, and moderates believed that France might be persuaded to grant Algeria a separate status while retaining close diplomatic, economic, and defense ties. In 1957, all Muslims became French subjects, but about nine million Muslims and 500,000 Europeans voted on separate electoral rolls for a joint assembly. Unsuccessful in obtaining further reforms and faring poorly in several apparently rigged elections, the moderate Muslim nationalist group led by Ferhat Abbas was greatly weakened.

The war in Algeria toppled several French governments before causing the demise of the Fourth Republic in May 1958. Gen. Charles de Gaulle was then brought to power by French rightists and military groups in Algeria. To their surprise, however, he pursued a policy of preparing for Algerian independence. He offered self-determination to Algeria in September 1958. Referendums in France and Algeria on 8 April and 1 July 1962 approved a settlement, and independence was formally proclaimed on 3 July, despite a program of counterterrorism by the French Secret Army Organization in Algeria. Meanwhile, younger nationalists had formed what would become known as the National Liberation Front (Front de Libération NationaleFLN), and a guerrilla war was launched on 1 November 1954. The FLN's National Liberation Army (Armée de Libération NationaleALN) perpetrated acts of terrorism and sabotage throughout Algeria and gained increasing mass support. Eventually, France was forced to maintain at least 450,000 troops in Algeria. During the hostilities, the French army completely cleared many rural areas of their civilian populations and evacuated some two million Muslims to army-controlled regroupment centers or new large villages. Although the army gradually eliminated the power of the FLN to carry out large-scale attacks, the latter continued its terrorist acts against the French army, French settlers, and pro-French Muslims. Terrorist activities, mainly as a result of factional disputes, also were carried on by Algerian Muslims in France. During more than seven years of civil war, well over one million Muslim guerrillas and civilians and 10,000 French soldiers lost their lives.

With independence achieved, a seven-man Political Bureau, set up as the policy-making body of the FLN, took over effective control of the country on 5 August 1962. Ahmed Ben Bella became the first premier, and Ferhat Abbas was chosen speaker of the Assembly. The Assembly adopted a constitution, which was endorsed by referendum in September 1963.

Elected president in October, Ben Bella began to nationalize foreign-owned land and industry. Opposition to his authoritarian regime led to an outbreak of armed revolts in the Kabilia and Biskra areas in July 1964 and to open attacks on the regime by leading political figures. On 19 June 1965, the Ben Bella government was overthrown in a bloodless coup directed by Col. Houari Boumedienne, first deputy premier and defense minister. The 1963 constitution was suspended, and a revolutionary council headed by Boumedienne took power. The new government shifted to a gradualist approach to national development, with deliberate economic planning and an emphasis on financial stability. During the 1970s, the council nationalized the oil industry and initiated agrarian reforms. Boumedienne ruled by decree until June 1976, when a national referendum approved a Socialist constitution providing for a one-party state with a strong presidential system and an elected National Assembly. Boumedienne was elected president in December 1976 but died two years later.

The FLN Central Committee, with strong army backing, chose Col. Chadli Bendjedid as the party's leader, and his presidential candidacy was ratified by the electorate on 7 February 1979. He was reelected without opposition in January 1984 for a second five-year term. After a period of maintaining continuity with the previous regime, the Bendjedid government moved toward more moderate policies, expanding powers for the provinces and state enterprises and attempting to revitalize the FLN and government agencies. In foreign affairs, Algeria reduced its earlier support for liberation groups around the globe and for hard-line nonaligned positions. It patched up its dispute with Morocco over the Western Sahara and sharply reduced its aid to the Polisario. Algeria played a key role in helping the United States resolve the hostage crisis in 1981 and worked hard for the Arab Maghreb Union, a planned EC for North Africa. Serious internal trouble developed in 1988 when young Algerians rioted over high prices, unemployment, and the dictatorship of an aging, inept, and corrupt revolutionary regime. Shocked by the 500 deaths in the streets, Bendjedid moved to liberalize his government. Political parties were allowed to form outside the FLN and the prime minister and cabinet were made responsible to the National Assembly. He won a third term in 1989, supported by 81% of the electorate.

Burdened by heavy debts and low oil prices, Bendjedid was obliged to pursue austere economic policies and to abandon socialism for the free marketactions which further inflamed his opposition, now led by the Islamic Salvation Front (FIS). In 1989, the party won 55% of urban election seats while the FLN maintained power in the countryside. Elections to the National Assembly, postponed six months, were held in December 1991 under relatively free conditions. FIS candidates won 188 out of 231 contested seats, needing only 28 more places in a second vote to control the 430-member Assembly. The FLN won only 16 seats.

The army intervened, arresting FIS leaders and postponing indefinitely the second stage vote. Bendjedid resigned under pressure from the army and Mohammed Boudiaf, a hero of the revolution, returned from exile to lead the High State Council which the army established. A harsh crackdown on Islamists began; the FIS was banned and its local councils were closed. As acts of terrorism continued by both sides in 1992 and 1993, the regime declared a state of emergency, set up special security courts and arrested more than 5,000 persons. Boudiaf was assassinated in June 1992 to be replaced by Ali Kafi with Redha Malek as prime minister in August 1993. In January 1994, Defense Minister Liamine Zeroual was named president and the five-man presidential council was abolished.

Zeroual released two top FIS leaders in September 1994 and began a dialogue with the FIS. After six weeks of apparently half-hearted talks, Zeroual ended the dialogue and called for new presidential elections. Opposition partiesincluding the FLN, the FIS, and other Islamist groupsmet in late 1994 and early 1995 under the auspices of the Sant' Egidio Roman Catholic community in Italy to produce a national contract to end the violence through a transitional government that would include all parties. Zeroual rejected the meeting as foreign interference in Algeria's internal affairs and condemned the contract that it produced. He continued to attempt dialogue with the legalized opposition parties with no results.

While parties accounting for nearly 80% of the vote in the 1991 parliamentary elections were excluded from participating, Zeroual did have three opponents for the presidency in the November 1995 elections. The elections went ahead as scheduled. Despite widespread calls for boycotts and threats of violence, the government claimed 75% of registered voters participated in the election, which gave Zeroual the office of presidency with 61% of the votes. Opposition groups disputed the turnout figures.

Zeroual's first objective after election was the passing of a new constitution greatly expanding presidential powers. The referendum approving the new constitution was passed with nearly 80% of the registered voters participating and 86% approving the new constitution. While there were widespread electoral irregularities, the vote was generally viewed as reflecting Algeria's weariness with civil war (which, as of 2003, had claimed approximately 100,000120,000 lives since 1992) and a willingness to give the government the power to end it. At the very least, the elections showed that few of Algeria's registered voters respected the boycott calls made by opposition parties, even when those calls were backed up with threats of violence.

However, the elections did not stop the cycles of violence. When the government thought it had effectively stopped the terror campaign, the Ramadan of 1997 (the traditional high point of terrorist activity) was the bloodiest ever, with daily reports of bombings and massacres.

Despite the violence and instability, Zeroual continued to hold elections as he reshaped Algeria's government. In June 1997, parliamentary elections were held. Thirty-nine political parties registered for the elections with over 7,000 candidates contesting for the 280 seats in the National People's Assembly. Violence continued throughout the campaigning. The result of the election was a victory for pro-government parties. However, though the FIS and other religious parties were barred from participating, two other more moderate Islamist parties won more than 100 seats and received over 20% of the votes cast. Regional and municipal council elections were held in October 1997, with the RND (Rassemblement national pour la démocratie or National Democratic Rally) winning more than half of the seats.

In September 1998 President Zeroual gave a surprise address announcing that he would step down from power in February 1999, two years before his term was to expire. The decision was most likely due to infighting in the regime, which had become increasingly public. Forty-seven candidates presented themselves for election, but only seven made it to the final list, with Abdelaziz Bouteflika quickly emerging as the leading candidate. Tarnishing the results of the election, four of the candidates officially withdrew from the contest two days before the 15 April election day claiming massive fraud in favor of Bouteflika in the forming of election lists. They were joined the following day by the other two candidates. The fraud claims were rejected by the minister of the interior and the election went ahead with Bouteflika as the single candidate.

Following his election victory, Bouteflika instituted dialogue with opposition groups and at the end of 1999 moved against corruption. Within weeks of his election, Bouteflika announced a "Civil Concord Plan" based upon a 1997 truce between the military and the FIS's Islamic Salvation Army (AIS). In September 1999, a referendum was held on the plan, which was approved by more than 98% of the voters; voter turnout was over 85% nationwide, but was below 50% in eastern regions of the country, which are dominated by the opposition. The plan included an amnesty for those Islamists who renounced violence; up to 5,500 rebels participated in the amnesty, and the AIS formally disbanded in 2000. Those guilty of murder, rape, or the placing of bombs were to be prosecuted; however, the death penalty would not be used, and no prison sentence would be longer than 20 years. The plan was supported by the FIS; however, violence continued, and was still ongoing as of March 2003.

In April 2001, a Berber youth taken into custody by the police was killed, sparking months of demonstrations and rioting in the northeastern region of Kabylie. More than 90 people died in the unrest, which also spread beyond Kabylie. The Berber protesters' complaints went beyond the act of police brutality, addressing concerns of ethnic discrimination, corruption, housing shortages, unemployment, repression, and violence. In May, the mainly Berber party, the Rally for Culture and Democracy, withdrew from the government in protest against the government's handling of the unrest. In October, Bouteflika agreed to a constitutional amendment granting national recognition to the Berber language, Tamazight. However, the language would not be granted "official" status, like Arabic.

In the aftermath of the 11 September 2001 terrorist attacks on the United States, the United States called upon all states to implement counterterrorism measures. Algeria pledged its support for the Bush administration's campaign against terrorism, and sent the United States a list of 350 Islamic extremists known to be living abroad who may have had contacts with Osama bin Laden's al-Qaeda network. Bouteflika made two official state visits to President Bush in 2001, the first such visits by an Algerian president in 15 years. In return for Algeria's aid, the Bush administration agreed to ease restrictions on arms sales to Algeria.

In parliamentary elections held on 30 May 2002, the FLN won 199 of 389 seats in the National Assembly; it was one of 23 parties participating. Four parties, including two Berber parties, boycotted the elections, which were marred by violence and low voter turnout (47%).

On 3 March 2003, French president Jacques Chirac visited Algiers, the first state visit by a French president since Algeria won independence in 1962. Chirac stated that the two countries could not forget the brutal war for independence that had created "countless victims, tore families apart, and shattered destinies and dreams." He laid flowers at a monument for Algerians who fought the French during the war, which was regarded as an act of reconciliation. Chirac also called on the government to use dialogue to end the Islamic insurgency ongoing since 1992.

On 21 May 2003 an earthquake, which measured 6.7 on the Richter scale, struck along Algeria's northern coast. The worst hit areas were east of Algiers. More than 2,200 people were killed, over 9,000 were injured, and over 1,000 people were missing, while 51,000 were made homeless in the Algeria's most devastating quake in more than 20 years. On 27 May an aftershock of a magnitude of 5.8 was centered just a few miles away from the epicenter of the May 21 earthquake. Buildings damaged earlier fell down and survivors accused the government of a slow response and of turning a blind eye to shoddy construction in a quakeprone area. President Bouteflika was pelted with debris as he attempted to tour damaged villages.

Under Bouteflika the security situation in Algeria improved noticeably. However, terrorism was not totally eliminated. Terrorist incidents still occurred, particularly in the provinces of Boumerdes, Tizi-Ouzou, and in the remote southern areas of the country. An estimated 5060 Algerians were killed monthly in the early 2000s, down from a high of 1,200 or more in the mid-1990s. In a landslide victory Bouteflika was reelected to a second term in April 2004. Promising to devote himself to seeking "true national reconciliation," the government promised the Berber leaders more investment in the Kabylia region and greater recognition of the Tamazight language.

Algeria assumed a two-year seat on the UN Security Council in January 2004.

In January 2005, the arrest of rebel Armed Islamic Group (GIA) head Nourredine Boudiafi was announced. His deputy was killed. It was declared that the group was virtually dismantled. GIA was an Islamic extremist group that since 1992 aimed to overthrow the secular government and replace it with an Islamic state. In August 1992, GIA's founder, Mansouri Miliani, was arrested for his role in the attack on Algiers airport. He was executed in May 1993. GIA's violent terrorist campaigns were aimed at entire villages, journalists and foreign residents. Between 1992 and 1998, GIA violence was responsible for some 100,000 deaths, averaging 1,200 per month, leading to a civil war. Killings continued at a rate of 300 civilians per month well into 2002; more than 100 expatriates were killed since 1993. In March 2005 a government-commissioned report stated that security forces were accountable for the disappearances of more than 6,000 people during the 1990s civil conflict.

Since 1976 Algeria has supported the exiled Sahrawi Polisario Front (Polisario) in the Western Sahara and rejects Moroccan administration of Western Sahara. Algeria experiences continuing border disputes with Libya and Morocco and incursions from armed bandits of the Sahel region who destabilize southern Algerian towns. Algeria and Morocco each accuse the other of harboring militants, smuggling arms, and have imposed visa requirements on each other that Morocco lifted in mid-2004; Algeria has not reciprocated the gesture.

GOVERNMENT

Algerian voters approved a new constitution in 1996 that strengthened the role of the already-dominant executive. Under the constitution, a second legislative body called the Council of the Nations (Senate) would join the already existent National People's Assembly, or Al-Majlis Ech-Chaabi Al-Watani. The number of seats in the National People's Assembly was changed from 380 seats to 389 seats in the 2002 elections; members are elected by popular vote to serve five-year terms. In the Council of Nations (Senate) with 144 seats; one-third of the members of the Council are appointed by the president, two-thirds are elected by indirect vote (local and regional government); members serve six-year terms. The constitution requires half the Council to be renewed every three years. This body must approve, by a three-fourths vote, any legislation proceeding from the National Assembly. The president is elected for a five-year term, renewable once. A second round is held if no candidate obtains a simple majority in the first round.

Since the annulment of the 1991 election, the military has been the ultimate power in Algeria. In 1994 it appointed a retired general, Liamine Zeroual, to the presidency. In somewhat irregular elections, Zeroual was elected with 61% of the vote over three other candidates. In 1998, Zeroual announced he would step down as president before his term ended. Abdelaziz Bouteflika won the presidential election of April 1999. He was the lone candidate after all of his rivals pulled out on the eve of the poll, protesting massive fraud.

Elections for the National Assembly were held in June 1997, with pro-government parties winning 57% of the 380 seats. Moderate Islamic parties won over 100 seats, with the rest of the seats going to independent candidates and an ethnic Berber party. Several opposition parties, including the FIS, were barred from participating. Regional and municipal council elections were held in October 1997, with the government's RND winning more than half of the seats.

Elections for the National Assembly were next held on 30 May 2002. The FLN took 199 of the now 389 seats; the National Democratic Rally, Bouteflika's party, took 48 seats; Islah, the Movement for National Reform took 43 seats; the Movement for a Peaceful Society won 38 seats; the socialist Worker's Party won 21 seats; and smaller parties and independents took the remaining 40 seats. Again, the FIS was banned from participating. In local elections held 10 October 2002, the FLN won a majority of town councils and provincial assemblies.

On 8 April 2004 a presidential election took place. The election was democratically waged throughout for the first time since independence. Incumbent president, Bouteflika, competed against five other candidates. Although the Opposition candidates complained of some discrepancies and unfair media coverage, the election was considered the most untainted in Algerian history. Bouteflika was reelected in the first round of the election with 84.99% of the vote. Just over 58% of Algerians eligible to vote participated in the election.

POLITICAL PARTIES

One of the earliest active figures in the struggle for Algerian self-determination was Messali Hadj, who in 1925 formed the Star of North Africa (Étoile Nord Africaine) movement among Algerian workers and intellectuals in Paris and in 1937 founded the Algerian People's Party (Parti Populaire AlgérienPPA). Banned in 1939, the PPA operated illegally and militantly under the Vichy regime, with strong support from students and workers.

In 1944, Ferhat Abbas formed the Friends of the Manifesto and of Liberty (Amis du Manifeste et de la LibertéAML), a moderate reform group that was later transformed into the Democratic Union of the Algerian Manifesto (Union Démocratique du Manifeste AlgérienUDMA). In 1946, some AML members joined the PPA and, under Messali Hadj's leadership, formed a legal front organization, the Movement for the Triumph of Democratic Liberties (Mouvement pour le Triomphe des Libertés DémocratiquesMTLD). On a program favoring "the return of the Algerian people to national sovereignty," the MTLD won 5 of the 15 elected seats in the National Assembly elections of 1 November 1946; in 1948, however, the MTLD lost all its seats and was reduced to semi-illegality. Two years later, it was suppressed by the police.

In 1951, an Algerian Front was formed by the MTLD, the UDMA, the Algerian Communist Party, and the Society of 'Ulema, a political-cultural organization. Policy differences in the following years resulted in the creation of three groups: supporters of Messali Hadj; centrists, who hoped to obtain constitutional advances by cooperating with the French administration; and a militant group who proposed violent action. By 1954 there was an open split. The centrist majority repudiated Messali Hadj's leadership. An activist group of nine members formerly associated with an MTLD splinter group calling for armed rebellion then established the Revolutionary Committee for Unity and Action (Comité Révolutionnaire d'Unité et d'ActionCRUA) with headquarters in Cairo, divided Algeria into six military zones and appointed commanders for each, and launched a war with France on 1 November 1954.

Shortly thereafter, the CRUA changed its name to the National Liberation Front (Front de Libération NationaleFLN), and its forces became known as the National Liberation Army. The FLN was an amalgamation of various nationalist tendencies in Algeria. Its membership gradually incorporated most members of the former MTLD, most members of the UDMA, and members of the Society of 'Ulema, as well as former independents and young people with no previous political allegiance. Its goal was the complete independence of Algeria, and it appeared to have the support of the great majority of Muslims. After Messali Hadj broke with the FLN, he formed the National Algerian Movement (Mouvement National AlgérienMNA), supported mainly by Algerians in France. The MNA attacked both the FLN and the war through acts of terrorism in France, but became almost completely without influence following Messali's imprisonment.

In August 1956, an FLN congress established an embryo parliament, the 34-member National Committee of the Algerian Revolution, enlarged in 1957 by 20 more members to a total of about 50, and a 5-member executive body, the Executive and Coordinating Committee, enlarged in Cairo in 1957 by additional members. In September 1958, a provisional government was established with Ferhat Abbas as president and with headquarters in Cairo and Tunis. (Benyoussef Ben Khedda succeeded Abbas as premier in August 1961.) President de Gaulle in effect recognized the FLN as the only political organization that had the authority to speak for the Muslims during peace negotiations with the French government. During this period, French expatriates in Algeria organized the Secret Army Organization, which violently opposed Algerian independence.

After independence, differences of opinion arose among the members of the Political Bureau, the FLN's policy-making body, regarding the organization of the FLN. While Ben Bella envisaged the creation of an elite party, Mohammed Khider (assassinated in Spain in January 1967) sought to create a broader mass party. The FLN mobilized popular political participation by forming mass organizations for peasants, youth, guerrilla veterans, and women. It organized itself into departmental federations, sections, and cells, staffed largely by former guerrillas (mujahedin). In April 1964, the first congress of the FLN adopted the Charter of Algiers, a guideline for government policy that provided for a wide range of agricultural, industrial, and social reforms. The FLN's National Charter of April 1976 outlined a plan for creating a Socialist system commensurate with Islamic principles. A new National Charter adopted in January 1986 de-emphasized Socialism and placed greater stress on Islam. The chief organs of the FLN are the Central Committee, the highest policy-making body of both the FLN and the nation, the Political Bureau and the Secretariat. The Islamic Salvation Front is an umbrella organization of groups, which support a government guided by Islamic law. In September 1989 the government approved a multiparty system, and by 31 December 1990, over 30 legal political parties existed, including Islamic Salvation Front (FIS), National Liberation Front (FLN), and Socialist Forces Front (FFS).

With the annulment of elections, several parties, notably the FIS, were outlawed. The main parties that participated in the June 1997 elections included the official government party known as the National Democratic Rally (Rassemblement national pour la démocratieRND); the Movement for a Peaceful Society (formerly Hamas); Ennahda (a moderate Islamic party); two ethnic-Berber parties, the Socialist Forces Front and the Rally for Culture and Democracy; and the FLN.

Twenty-three parties participated in the May 2002 parliamentary elections. Two Berber parties boycotted the elections, including the Rally for Culture and Democracy and the Socialist Forces Front. The FLN took a majority of seats in the National Assembly. Also winning seats were Islah, the National Democratic Rally, the Movement for a Peaceful Society, the Workers' Party, the Algerian National Front, the Islamic Renaissance Movement, the Party of Algerian Renewal, and the Movement of National Understanding. Independents won 29 of 389 seats.

In June 2003, the leader of the outlawed Islamic Salvation Front (FIS) Abassi Madani and his deputy Ali Belhadj were freed after serving 12-year sentences.

LOCAL GOVERNMENT

In 1969, a governorate of 48 provinces (wilayats ) system replaced the departments that had been established by the French. Each wilaya has its own elected people's assembly, executive council, and appointed governor (wali ), who is responsible to the Ministry of the Interior. The 48 wilayats have subdivisions called da'iraats (districts), which are further subdivided into 1,541 communes. The commune is the basic collective unit, governed by an assembly elected for four years. Winning a majority of local council and assembly seats in the 10 October 2002 elections was the FLN, taking control of 668 communes and 43 of the country's 48 cities. The National Democratic Rally lost its previously held majority, taking control of 171 communes. The Socialist Forces Front won 65 communes and independents took control of 77. Islamic parties declined in popularity overall.

JUDICIAL SYSTEM

After independence in 1962, Algeria's judicial system was reorganized. The former French magistrates were replaced by Algerians and the judiciary was extended into regions of the country previously ignored.

The judicial system now includes civil and military courts. Within each wilayat is a court of first instance for civil and some criminal cases. At the head of the system is the Supreme Court. The Special Court of State Security was abolished in 1995.

The constitution guarantees independence of the judiciary. However, executive branch decrees have restricted some of the judiciary's authority. Judges are appointed by the executive branch without legislative approval, and the government can remove judges at will. A judge's term is 10 years.

Algeria's present legal codes, adopted in 1963, are based on the laws of Islam and of other Northern African and Socialist states, as well as on French laws. Efforts were made to harmonize the laws and legal procedures with those of the Maghreb nations. A first plan for judicial reorganization was approved in 1965; this was followed in 1966 with the beginning of large-scale structural reforms. A new civil code was promulgated in 1975 and a new penal code in 1982.

In civilian courts, Shariah (Islamic law) is applied in resolving social issues. Defendants in civilian courts are afforded a wide range of procedural protections including a public trial, right to counsel, right to confront witnesses, and right of appeal.

Military courts have jurisdiction in cases involving military personnel and have heard some cases in which civilians are charged with security-related and terrorism offenses.

The Constitutional Council reviews the constitutionality of treaties, laws, and regulations. The Constitutional Council is not part of the judiciary but it has the authority to nullify unconstitutional laws. The constitution prohibits torture and other cruel, inhuman, or degrading treatment. The constitution prohibits arbitrary arrest and detention. In criminal cases, the suspect must be charged or released within 48 hours of incommunicado detention. However, the 1992 Antiterrorist Law provides up to 12 days of prearraignment detention.

President Bouteflika announced a major reorganization of the judiciary in August 2000. He changed approximately 80% of the heads of the 187 lower courts and all but three of the presidents of the 37 higher-level courts. By the end of 2001, women sat at the head of 26 courts.

ARMED FORCES

Six months of military service is compulsory for males. Algeria's armed forces in 2005 totaled 137,500 active personnel. The Army had 120,000 officers and men, plus reserves of up to 150,000. Weaponry included 920 main battle tanks, 139 reconnaissance vehicles, 1,084 armored infantry fighting vehicles, 910 armored personnel carriers, and 1,019 artillery pieces. The Navy had an estimated 7,500 active personnel. Major naval units included 2 tactical submarines, 3 frigates, 6 corvettes, 24 patrol/coastal vessels, 3 amphibious landing craft and 3 logistics/support ships. The Air Force had an estimated 10,000 active members. Equipment included 178 combat capable aircraft, including 88 fighter aircraft and 72 fighter ground attack aircraft, and 33 attack helicopters. Algerian paramilitary forces totaled an estimated 181,200 personnel, including 20,000 gendarmerie, 16,000 national security forces and 1,200 Republican Guards. Algeria's defense budget was $2.87 billion in 2005.

INTERNATIONAL COOPERATION

Algeria was admitted to the United Nations on 8 October 1962 and is a member of ECA and all the nonregional specialized agencies, such as the ICAO, IFC, FAO, IAEA, ILO, IMF, UNESCO, UNHCR, UNIDO, WHO, and the World Bank. Algeria is an observer in the WTO and was a temporary member of the UN Security Council until December 2005. Algeria also participates in the African Development Bank, G-77, G-15, G-24, League of Arab States, African Union, the Organization of the Islamic Conference (OIC), the Arab Maghreb Union, the New Partnership for Africa's Development (NEPAD), OAPEC, and OPEC. The country is a partner in the OSCE. Algeria is a member of the Nonaligned Movement and the Organization for the Prohibition of Chemical Weapons. In cooperation on environmental issues, Algeria participates in the Basel Convention, Convention on Biological Diversity, Ramsar, CITES, the Kyoto Protocol, MARPOL, the Montréal Protocol, and the UN conventions of the Law of the Sea, Climate Change, and Desertification.

ECONOMY

Saharan oil and natural gas have been important export items since 1959, and they now dominate Algeria's economy, accounting for over 96% of total export value, 60% of government revenue, and 30% of GDP. Algeria is the largest supplier of natural gas to the EU. During the late 1970s, as oil prices rose, real economic growth topped 20% annually, with the manufacturing sector averaging about 15%; during 198081, however, the rate dropped to 78% because of the weakening oil market, and a decline of 5% was registered in 1982, followed by an average annual growth rate of 4.5% during 198386. Because of the weak oil market, growth continued to fall, to 3.4% in 1989, 1.1% in 1990, and negative growth in 1994 of -1.1%. Debt restructuring accomplished in 1994 and 1995 allowed increased imports and restored economic growth to an estimated 3% per year. The real growth rate in 1998 was 3.2%, and was estimated at 6.1% in 2004. It was expected to reach 6.9% in 2005. These healthy growth rates in the early 21st century were driven by real export growth, based on expanding crude oil production, although government consumption played a role. As of 2005 Algeria had a large trade surplus, high foreign exchange reserves, and had reduced its foreign debt.

Although 14% of Algerians make their living directly from the soil, agriculture produces only about 1011% of Algeria's GDP in an average year, and 9% in drought years, and meets only a small portion of the country's needs. The government targeted agricultural development as a priority in the late 1990s, but drought in 1997 dimmed agricultural prospects. However, good rains in 2002 produced a stronger performance for cereals in terms of real growth.

Before independence, the Algerian economy was almost completely dependent on the Europeans, who employed more than 90% of those working in industry and commerce, accounted for about 90% of gross business earnings, and provided some 90% of the country's private investment. The exodus of most Europeans in 1962 temporarily disrupted Algeria's economic life. The FLN governments established a Socialist economy by nationalizing the mining industry and creating state farms and state-owned industries on abandoned farms and on expropriated French landholdings. The nationalization with compensation of all foreign-owned companies was completed in 1974, although certain companies operating in partnership with Algerian state enterprises were allowed to continue. In the 1980s, decentralization was emphasized, with over 90 state corporations split into 300 specialized units. It was announced in 1987 that these enterprises would adopt their own annual plans, decide on the prices of their products, and invest their profits freely. In 1990 the money and credit law opened the way for substantial international participation in Algeria's economy. The 1993 investment code opened up Algeria to foreign investment, and investment promotion agencies were created in 1995 in order to stimulate the economy. Since then, Algeria has taken steps to liberalize foreign trade, the price structure, and foreign exchange system, and to reevaluate the public sector while encouraging the private sector and competition.

The dramatic decline in oil prices in 198586 affected Algeria at a time when it also faced a heavy foreign debt burden. The Algerian government thus attempted to diversify the economy and privatize business. In the late 1990s and into the 2000s, challenges to the Algerian economy included civil strife, inefficient agricultural methods, and an unemployment rate of 25.4% in 2004 (and possibly as high as 50% for those under the age of 30) that extended into the ranks of professionals, engineers, and highly trained workers. Although the government remains committed to greater economic deregulation and will continue to solicit foreign investment in such sectors as telecommunications, water, and power, the hydrocarbons sector remained the engine of GDP growth in 200506. With average crude oil prices rising during that period, Algeria was able to increase its export earnings and trade surplus.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Algeria's gross domestic product (GDP) was estimated at $237.0 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $7,300. The annual growth rate of GDP was estimated at 7.1%. The average inflation rate in 2005 was 4.7%. It was estimated that agriculture accounted for 10% of GDP, industry 59.5%, and services 30.5%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $1.090 billion or about $34 per capita and accounted for approximately 1.6% of GDP. Foreign aid receipts amounted to $232 million or about $7 per capita and accounted for approximately 0.4% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Algeria totaled $27.37 billion or about $861 per capita based on a GDP of $68.0 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 0.7%. It was estimated that in 1999 about 23% of the population had incomes below the poverty line.

LABOR

In 2005, the estimated workforce stood at 10.15 million. The government employed around 32% of the labor force in 2003, with agriculture accounting for 14%, industry 13.4%, construction and public works 10%, trade 14.6%, and other occupations 16%. An estimated 22.5% of the workforce was unemployed in 2005.

Algerian law permits collective bargaining for all unions. While there is no legal restrictions on a worker's right to join a union, government approval is required by those workers seeking to form a union. Approximately two-thirds of Algerian workers were unionized as of 2005. Minimum wages are set by the government with the advice of the General Union of Algerian Workers (Union Générale des Travailleurs AlgériensUGTA). The standard workweek is 37.5 hours, and those employees who worked past the standard workweek were subject to recieving "time-and-a-half " or "double-time," on whether they worked during a holiday, a weekend, or on a normal work day. As of 2005, the minimum wage was around $138 per month. This amount does not provide a family with a decent standard of living. Health and safety regulations are also specified by law, but enforcement is irregular. The minimum age for employment is 16 years. However, child labor remains a problem in agriculture and in the informal economy. UNICEF last reported in 2003, that around 3% of Algerian children worked in some capacity.

AGRICULTURE

Although almost 24% of the population is engaged in agriculture (including subsistence farming), only 3.5% of Algeria's land is cultivated. The soil is poor and subject to erosion, and the water supply is generally irregular and insufficient; about one-quarter of northern Algeria is completely unproductive. Agriculture contributed 13% to GDP in 2004.

Before independence, European-owned agriculture accounted for about two-thirds of vegetable production and employed about 800,000 farm laborers, 700,000 of them Muslims. Most Muslim-owned farms were small10 hectares (25 acres) or lessand were located mainly in marginal areas on the interior plains and on mountain slopes. The Muslim sector, comprising the bulk of the agricultural population, accounted for only one-third of vegetable production but nearly all the livestock raising.

Within six months after independence was declared, at least half the European-owned land had been vacated. Algerian peasants soon began to work on these abandoned farms under a self-management system. During the 1960s, the government established more than 2,300 state farms on expropriated French landholdings; by the end of the decade, these farms accounted for two-thirds of total agricultural production and employed about 500,000 workers. In July 1971, President Boumedienne announced an agrarian program providing for the breakup of large Algerian-owned farms and their reorganization into cooperatives. The first stage of the plan, the registration of land ownership, began in March 1972. In the second stage, many absentee landlords were forced to hand over part of their land to the state. By July 1973, of a total of 5 million hectares (12.4 million acres) of public land, 1 million hectares (2.5 million acres) of cultivable land had been redistributed to 54,000 families of landless peasants (fellahin ), and 1,348 cooperatives had been created. By 1980, the number of cooperatives had increased to about 6,000; in the early 1980s, however, the government split large cooperatives into smaller units to improve efficiency. In 198283, about 450,000 hectares (1.1 million acres) of land previously nationalized were returned to private ownership, mostly in plots of 10 hectares (25 acres) or less. In 1987, a further breakup of large state-owned farms into private cooperatives was implemented. Long-term leases of land to cooperatives were begun. Farmers were given autonomy in production and investment decisions, including the right to keep profits. The National Union of Algerian Peasants, established in March 1973, played a leading role in the land reform program and has about 1.2 million members. By 1995, most of the cooperatives had been dispersed because of internal disputes and land was divided into individual plots. The government does not officially endorse this development, which compels farmers to sell their output on the black market. The Ministry of Agriculture is considering land privatization as a way to stimulate private investment.

Government policy aims at increased use of fertilizers and improved seeds, conversion of vineyards to the production of cereals and other staple foods, and achievement of self-sufficiency in food production. The main agricultural products continue to be wheat, barley, pulses, fresh vegetables, dates, table and wine grapes, figs, olives, and citrus. Grain and pulse production varies significantly and depends upon the frequency and amount of rainfall during the growing season. Estimated agricultural output in 2004 included 2,600,000 tons of wheat; 1,314,000 tons of barley; 1,800,000 tons of potatoes; 815,000 tons of tomatoes; 360,000 tons of oranges; 275,000 tons of grapes; and 450,000 tons of dates. In 2002, nearly 7.6 million tons of cereals were imported. Modest agricultural productivity growth along with rapid population increase makes Algeria one of the world's largest agricultural import markets; imports of food and agricultural products amount to about $3 billion per year. Food and agricultural products accounted for over 22% of all imports in 2004.

ANIMAL HUSBANDRY

Algeria has 31,800 hectares (78,600 acres) of permanent pastures and grazing land, 13% of the country's total area. About half of the livestock is owned by only 5% of the herdsmen. In 2004 there were an estimated 18,700,000 sheep, 3,200,000 goats, 1,560,000 head of cattle, 245,000 camels, 170,000 donkeys, 44,000 horses, and 43,000 mules. There were also 125 million chickens. Algeria is self-sufficient in poultry meat and eggs, but must import all inputs (chicks, hatching eggs, feed, veterinary products, equipment). Algeria has a severe shortage of milk, meat, and cheese and must therefore rely on imports. Algeria produces about one billion liters of milk annually, while consumption amounts to three billion liters.

FISHING

Fishing is fairly extensive along the coast, but the industry is relatively undeveloped. Sardines, bogue, mackerel, anchovies, and shellfish are caught. The 2003 catch was 142,000 tons, 54% sardines.

FORESTRY

Only 1.6% of the land area is forested. The mountain ranges contain dense forests of evergreens (evergreen oak, Aleppo pine, and cedar) and deciduous trees, whereas the warmer regions contain large numbers of fruit and palm trees. Algeria is an important producer of cork; other forestry products are firewood, charcoal, and wood for industrial use. Roundwood production was estimated at 7.5 million cu m (94.7 million cu ft) in 2003.

Two-thirds of the French-planted forests in eastern Algeria were burned by French forces during the 195462 war. Reforestation was begun on 12,100 hectares (30,000 acres) of unused land in the semiarid region in 1960. By 1964, 25 million trees had been planted: eucalyptus in clay soils, Aleppo pine in calcareous regions, and olive trees. Current reforestation projects include the planting of a "green wall" across Algeria from the Moroccan to the Tunisian frontier to halt the encroachment of the Sahara. During the first half of the 1980s, reforestation proceeded at a rate of 52,000 hectares (128,000 acres) per year, but from 1984 to 1994, deforestation averaged about 45,000 hectares (111,200 acres) per year, so that Algeria now has 10% less forested land than in 1979.

MINING

In 2000, the government proposed allowing foreign investors to develop mineral deposits held by the national mining companies. The national geologic and mineral research office has identified many mineral deposits. However, they were located in remote areas that lacked infrastructure or government funding for development. With Algeria's proximity to Europe, its major minerals customer, the country's base and precious metals are of interest to foreign investors. Guerrilla activity, though, remains a significant deterrent.

Algeria's phosphate deposits at Djebel Onk, in the northeast, are among the largest in the world, covering about 2,072 sq km (800 sq mi), with an output of 905,000 metric tons in 2003, down from 1.16 million tons in 1998. There are deposits of high-grade iron ore at Ouenza, near the Tunisian border. Production totaled 1.378 million metric tons in 2003; half is exported. Among other mineral production in 2003, zinc concentrate output was 2,796 metric tons, down from 10,452 metric tons in 2000; bentonite, 25,346 metric tons in 2003, up from 22,708 metric in 2000; lead concentrate, 1,105 metric tons in 2002, the last year for which there is any data, according to the US Geological Survey, and up from 818 metric tons in 2000; mercury, 175,00 kg in 2003, down from 215,625 kg, in 2000; crude barite, 45,649 metric tons in 2003, down from 51,925 metric tons in 2000; salt (brine and sea salt), 183,000 metric tons in 2003, up from 182,000 metric tons in 2000; hydraulic lime, estimated at 100,000 metric tons in 2003, up from an estimated 96,000 metric tons, in 2000. Marble, silver, kaolin, sulfur, fuller's earth, and strontium are also mined.

ENERGY AND POWER

Algeria is an important producer and exporter of oil and gas and supplies a significant portion of Europe's energy requirements. Natural gas and petroleum dominate the economy; in 2003, estimated exports of hydrocarbons were valued at more than 90% of total exports, and around 30% of gross domestic product (GDP). In the 1950s, natural gas was found in the east, near the Libyan border, and at Hassi R'Mel in the Sahara. Algeria's proven natural gas reserves are among the world's largest, totaling an estimated 4.5 5 trillion cu m (160.4 trillion cu ft) as of end 2004. Algeria produced 82 billion cu m (2.9 trillion cu ft) of natural gas in 2004. A 500-km (310-mi) main pipeline connecting Hassi R'Mel to Arzew (between Oran and Mostaganem) was opened in 1961, and branch lines to Oran and Algiers were completed four years later. Since then, six other pipelines have been constructed, including the first trans-Mediterranean gas pipeline (Transmed) to Europe via Sicily, built at a cost of $3 billion. The Transmed consists of three segments, linking Algeria, 550 km (342 mi); Tunisia, 370 km (230 mi); and the Mediterranean to Sicily, 154 km (96 mi) underwater. In 2001, Algeria's total LNG export capacity amounted to over 6 billion cu m (212 billion cu ft) per year. The $2.3-billion Gazoduc Maghreb-Europe pipeline to Spain and Portugal via Morocco began operating in November 1996. Total dry exports of natural gas amounted to 2,066.28 billion cu ft in 2002. Algeria's total natural gas export capacity as of 2001 was 57 billion cu m (2 trillion cu ft).

Oil was discovered at Edjeleh and Hassi Messaoud in 1956 and at Al-Gassi in 1959; by 1969, the Franco-Algeria Cooperative Association (ASCOOP), a petroleum development company, had discovered eight major fields. Proven reserves of crude oil amounted to 11.8 billion barrels as of end 2004; crude oil production averaged 1,933,000 barrels per day in 2004. There are four main pipelines linking the wellheads in the eastern Sahara with Algerian ports and a fifth with the Tunisian port of Sekhira; there are also several branch pipelines. In late 2002, Algeria's total refinery capacity was 450,000 barrels per day. There were four gas liquefaction plants in 2000, three at Arzew and one at Skikda, all operating well below capacity because of disrepair and lack of funds for spare parts. In 2000 Algeria was the world's second-largest exporter of liquefied natural gas (LNG); its exports, which went mainly to Western Europe, accounted for 19% of the world's total.

The Société Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbons (Sonatrach), founded in 1964 as the state-owned petroleum company, handles the distribution and transport of oil. On 24 February 1971, President Boumedienne announced the Algerian takeover of controlling interest in all French oil company subsidiaries and the nationalization of all pipelines and natural gas deposits. Holdings of all other foreign petroleum interests in Algeria were nationalized by the end of 1971. Subsequent agreements have generally treated foreign companies as minority partners in Algerian state enterprises. Contracts for sales of natural gas to Western Europe and the United States increased spectacularly in the 1970s but decreased in the 1980s as world energy prices fell, pushing Algeria into severe debt. By 1991, Sonatrach was reversing its monopolistic policy, and forming joint ventures for new exploration contracts. The company planned to invest $20 billion through 2004 to develop Algeria's oil and gas fields, focusing on wet gas field development, enhanced oil recovery techniques, pipeline expansion, exploration, and dry gas field development. In April 2000 Sonatrach announced a $500 million joint venture with Amerada Hess to develop the el-Gassi, el-Agreb, and Zotti oilfields, with the goal of increasing production to 45,000 barrels per day by the end of 2003.

In 2002, net electricity generation was 25.992 billion kWh, of which 95.6% came from fossil fuels, and the rest from hydropower. In the same year, consumption of electricity totaled 24.151 billion kWh. Total capacity in 2002 was 6.4 million kW.

In 1996, Algeria signed a nuclear cooperative agreement with China, which built the two nuclear reactors in Algeria. Algeria claims that these reactors are for research and the peaceful exploitation of nuclear power. Algeria has signed a cooperative agreement with the International Atomic Energy Agency and has opened its reactor facilities to agency inspectors.

INDUSTRY

The industries of Algeria, which traditionally have been concentrated around Algiers and Oran, have included carpet mills, cement factories, chemical plants, automobile assembly plants, food-processing installations, oil refineries, soap factories, and textile plants. Other major industries have produced bricks and tiles, rolled steel, farm machinery, electrical supplies, machine tools, phosphates, sulfuric acid, paper and cartons, matches, and tobacco products.

Before independence, industry made significant gains. New enterprises were developed in food processing and packaging, textiles, leather, chemicals, metalworking, building materials, and farm machinery. A new large steel plant was built at Annaba, a petroleum refinery at Algiers, a petrochemical complex at Arzew, and a phosphate production center at Djebel Onk, near the Tunisian border. Other industries were set up to produce automobiles, tractors, cement, rubber tires, and ammonia.

French firms were nationalized after independence, between 1962 and 1974. The government put great emphasis on the development of the hydrocarbons sector, including the building of refineries and natural gas liquefaction plants. Algeria contains an estimated 11.8 billion barrels of proven oil reserves, but analysts consider Algeria to be underexplored. As of 2005, Algeria had four oil refineries with a capacity of 450,000 barrels per day. Algeria's crude oil production in 2004 was 1.23 million barrels per day. Algeria is a member of the Organization of the Petroleum Exporting Countries (OPEC), and its crude oil production quota was set at 862,000 barrels per day as of November 2004. Algeria has been pressing to have its OPEC quota raised, as its production capacity is increasing rapidly.

The government has encouraged diversification away from Algeria's heavy reliance on hydrocarbons, although those efforts have not been entirely successful, especially given the increase in oil and natural gas export revenues since 1999. Algeria is considered to be underexplored, and significant oil and natural gas discoveries have been made in recent years, which have increased Algeria's proven oil reserves to 11.8 billion barrels, placing it 14th in the world in total oil reserves. Algeria's proven natural gas reserves were 160 trillion cu ft in 2005, the eighth-largest in the world. The state-owned hydrocarbons company, Sonatrach, invested nearly $20 billion between 1996 and 2000 on new pipelines and extensions. The company's Trans-Maghreb pipeline opened in 1996, supplying Spain and Portugal with natural gas, and Sonatrach substantially increased the capacity of its Trans-Med gas pipeline to Italy. In 2001, Sonatrach undertook a feasibility study on another natural gas pipeline under the Mediterranean to Sicily, the Italian mainland, and southern France; the project could come on-stream by 2008. The Medgaz natural gas pipeline, to be completed in 2008, will link Beni Saf, Algeria, to Almeria, Spain. As of 2005, there was also the possibility of a Trans-Saharan natural gas pipeline, running from Nigeria, across the Sahara, and on to Algeria and the Mediterranean coast. In 1998, Sonatrach issued bonds for the first time, showing the regime's loosening hold on the state-run enterprise. Algeria's oil and natural gas industries increasingly are becoming more open to foreign investors.

The textile and leather industry declined 14.7% in 2001, and 27 state-owned textile companies had gone out of business since 1996, resulting in a loss of 22,000 jobs. Textile manufacturer Group Texmaco, however, was successful as of 2002. It accounted for 30% of the market and had 18,000 employees, although it was operating at 20% capacity in 2002. The textile industry by 2005 was faced with competition from Asia, particularly China.

As of 2004, industry accounted for about 57.4% of the nation's GDP. The hydrocarbons sector (mostly petroleum and natural gas) alone accounted for 30% of GDP in 2005 and over 96% of export revenues. Algerian industry has been in the process of a structural transformation as it moves from a socialist, government-controlled economy to a free-market economy. Consequently, industrial production has fallen as inefficient plants are closed and large oversized industries are scaled back. As of 2002, of the 1,270 state-owned companies, 53% were considered sound after substantial restructuring, 30% were functioning but in poor financial shape, and the remaining 18% were bankrupt or nearly so (approximately 230 companies). The government has spent $15 billion to restructure industry in the early 2000s. By 2004, the estimated industrial production growth rate stood at 6%.

SCIENCE AND TECHNOLOGY

Since independence, Algeria has made major technological advances, especially in the steel and petrochemical industries. However, Algeria still has a severe shortage of skilled workers and is heavily dependent on foreign technologies. Scientific training is principally conducted at the Hovari Boumedienne University of Sciences and Technology, founded at Algiers in 1974; the Oran University of Sciences and Technology, founded in 1975; the universities of Annaba (founded in 1975), Blida (founded in 1981), Boumerdes (founded in 1981), Constantine (founded in 1969), Oran Es-senia (founded in 1965), and Tlemcen (founded in 1974); and the Ferhat Abbas-Setif University of Setif (founded in 1978). In 198797, science and engineering students accounted for 58% of college and university enrollments. The government's National Bureau of Scientific Research operates 18 research centers in biology; anthropology; oceanography and fisheries; astronomy, astrophysics, and geophysics; renewable energy; arid zones; technology transfer; and other fields.

In 2002, Algeria's high technology exports totaled $21 million, 4% of the nation's manufactured exports.

DOMESTIC TRADE

European trading firms formerly played a major role in the economy; however, many Europeans, fearful of eventual Muslim control, sold their holdings or gave them up in 196162. After independence, about one-half of the country's shops closed down, and in 1963, state agencies began taking over nearly all wholesaling and marketing operations. Since 1996, the Algerian government has prioritized the privatization of state-owned enterprises.

The principal cities of the north are the largest trade centers. While most trade is done on a cash or credit basis, some bartering still goes on among the rural dwellers and in the Muslim quarters of cities. In the mountain regions there are local market days or special local fairs for the exchange of products during different seasons.

Normal business hours are 8 am to noon and 2 or 2:30 to 5:30 or 6 pm, SaturdayWednesday, and 8 am to noon on Thursday. Banks are generally open from 9 am to 3 pm, Monday to Thursday, but some banks close for lunch. Shopping is normally carried out from 8am to 12 pm and 2 to 6 pm, Saturday to Thursday. Ramadan hours are shorter.

FOREIGN TRADE

Crude oil and natural gas account for nearly all of Algeria's export value; industrial equipment and semifinished goods and food-stuffs, especially wheat, dominate the country's imports. Surpluses accrued with the oil and gas price increases beginning in the mid-1970s and continuing through 1985, with the exception of 1978. In 1986, however, because of a severe drop in oil prices, Algeria experienced the first trade deficit since 1978 and the largest ever. The 1986 collapse of oil prices drove the government to implement decentralizing IMF programs in order to stabilize the economy. Algeria was able to register a trade surplus during most of the nineties, except during 1994, after a season of political turmoil. On 30 April 1998, the Algerian government chose not to re-subscribe

Country Exports Imports Balance
World 24,611.5 13,532.6 11,078.9
United States 4,899.6 708.6 4,191.0
Italy-SanMarino-HolySee 4,717.6 1,273.2 3,444.4
France-Monaco 3,107.9 3,233.4 -125.5
Spain 2,993.0 742.4 2,250.6
Netherlands 1,693.5 217.7 1,475.8
Canada 1,393.6 304.3 1,089.3
Brazil 1,122.7 180.0 942.7
Turkey 1,063.9 437.8 626.1
Belgium 706.5 311.3 395.2
Portugal 541.4 541.4
() data not available or not significant.

to IMF structural programs. Coupled with low oil prices, this move brought about diminished export revenues, threatening a trade deficit. Rising oil prices during 1999 brought back a trade surplus. Higher oil prices during 200506 also increased export earnings and the trade surplus. Average crude oil prices increased by one-third in 2004. Coupled with higher crude production, total export earnings rose to $34.2 billion in 2004, while the trade surplus increased to $16.3 billion.

The majority of Algeria's foreign trade continues to be with the European Union (EU) and the United States. The major exports in 2003 included hydrocarbons (98.1% of all exports), semifinished goods (1.3%), and raw materials (0.2%). The major imports were capital goods (28.8% of all imports), food (17.9%), and semifinished goods (15.2%). Algeria's leading markets in 2004 were the United States (21.1% of all exports), Italy (16.1%), and France (10.6%). Algeria's leading suppliers in 2004 were France (32.3% of all imports), Italy (8.8%), and Germany (6.4%).

BALANCE OF PAYMENTS

Algeria long had a current-accounts deficit, which before independence was covered by the French government. While the departure of Europeans after independence contributed to a more equitable balance of trade (Europeans had been the chief consumers of foreign goods), it also caused a heavy withdrawal of capital and a decrease in French aid, resulting in a continued deterioration of Algeria's payments position. However, with the continued growth of the petroleum sector, Algeria recorded substantial payments surpluses during the 1970s. In 1986, the fall of oil prices brought about a large deficit and an economic restructuring through the IMF that was intended to help service the country's debt and begin government privatization. In 1991, many import restrictions were abolished, although foreign exchange and external credit access were still restricted. By 1996, Algeria promulgated a liberalized trade regime in which nearly all export restrictions were removed and foreign investment was encouraged.

Debt rescheduling by the Paris Club and other lenders allowed the Bank of Algeria in the late 1990s to increase its reserves of hard currency. Algeria must increase its nonhydrocarbon exports, however, in order to generate enough foreign exchange so that when oil prices are low, it will be able to pay for necessary imports and to service its external debt, which stood at $24.7 billion in 2001. The external debt was estimated at $21.9 billion in 2004.

Average crude oil prices increased by one-third in 2004; combined with higher crude production in Algeria, export earnings rose to $34.2 billion, while the trade surplus increased to $16.3 billion. In 200506, the outlook for the current account remained strong. Algeria's current-account surplus was forecast to be 18.8% of GDP by the end of 2007. From 200004, the current account balance averaged 13% of GDP.

BANKING AND SECURITIES

The Central Bank of Algeria, created in December 1962, was the sole bank of issue at that time. Following the separation of the French and Algerian treasuries in late 1962, the Directorate of Treasury and Credit was established as the government's fiscal agent. The state also established cooperative banks. It wasn't until 1996 that private companies were permitted to set up money-changing shops following a directive issued by the Central Bank initiating open market operations. This opened a field previously restricted to state-owned banks. Bank base interest rates officially fell from 18.5 to 15% during 1996, according to the prime minister, Ahmed Ouyahia. In 1998, local commercial banks cut interest rates on loans to between 10% and 12.5%, down from a range of 18.523.5% in 1996. The Bank of Algeria's primary method of financial control was to limit lending, and interest rate cuts were aimed at encouraging growth.

Foreign banks ceased operations after the nationalization of banks in 1963 and were absorbed by three government-owned banks including the Foreign Bank of Algeria, the National Bank of Algeria, and the People's Credit of Algeria. There were also four government banks for financing economic development and a savings institution that offered housing loans. These included the Algerian Development Bank, the Agricultural Bank for Rural Development, and the Maghreb Bank for Investment and Commerce.

In 1997, the banking industry of Algeria included one Central Bank (Banque d'Algerie), six state-owned banks, one public development bank and one private bank (Union Bank, concentrating on merchant banking since 1995). In 1998, five new private banks opened, including one US-based bank.

The International Monetary Fund reports that in 2001, currency and demand depositsan aggregate commonly known as M1were equal to $16.0 billion. In that same year, M2an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual fundswas $26.9 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 3.35%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 6%.

The Algiers stock exchange was opened in July 1999. With only three companies listed (a food processing company, a pharmaceutical company, and a hotel) the exchange was in its early stages. Bonds issued in 1998 by Sonatrach, the national oil company, were rated in the Algiers stock exchange on 18 October 1999.

INSURANCE

In 1966, a state monopoly based on the Algerian Company of Insurance (ACI), and the Algerian Insurance of Reinsurance Fund (AIRF), replaced foreign insurance companies. Ten Algerian insurance companies were operating in 2003: the Compagnie Algérienne d'Assurances, the Compagnie Algérienne des Assurances Transports, the Compagnie Centrale de Réassurance, the Agricultural Mutual Fund, the Algerian Fund Insurance for Workers in Education and Culture, the CAGEX Insurance Company, and Guarantee for Exports and the Société Nationale d'Assurances. In 1998, Trust-Algeria, the International Company of Insurance and Reinsurance, and Algerian Insurance were approved as Algerian Insurance Companies. In 2001 (the latest year for which data was available), the state insurer, Société Algérienne d'Assurance (SAA) was the top nonlife and life insurer, with gross written premiums of $81.3 million and $6.4 million, respectively. In 2003, total direct premiums written came to $399 million, of which nonlife premiums totaled $384 million.

The government sponsors an export credit insurance agency, managed by the Algerian Export Management Company, that is financed by 10% of a tax on imported luxury goods. This has been set up to aid the growth of nonhydrocarbon exports.

PUBLIC FINANCE

Algeria's fiscal year coincides with the calendar year. Government expenditures increased rapidly from independence until 1986, when IMF adjustment plans attempted to curb spending. Government expenditures have continued to rise, despite austerity measures and the spread of liberalization to the economy. Instead of gaining funds from the sale of state-run industry, the government has had to foreclose companies for a lack of investors. About 60% of total government revenue came from the petroleum and natural gas industries, which are still state-operated.

The US Central Intelligence Agency (CIA) estimated that in 2005 Algeria's central government took in revenues of approximately $42 billion and had expenditures of $30.7 billion. Revenues minus expenditures totaled approximately $11.3 billion. Public debt in 2005 amounted to 14.8% of GDP. Total external debt was $21.54 billion.

The International Monetary Fund (IMF) reported that in 2002, the most recent year for which it had data, budgetary central government revenues in billions of dinars were 1,603.2 and expenditures were 1,550.6. The value of revenues in millions of US dollars was $20, based on a official exchange rate for 2002 of 79.682 as reported by the IMF.

TAXATION

The most important sources of government revenue have been oil and gas royalties. Algeria's tax system has been streamlined through the replacement of a number of different taxes by a value-added tax, a personal income tax, and a corporate profits tax. The corporation tax was 45% on distributed profits and 20% on reinvested earnings. Many fiscal advantages have been granted to developing and expanding industries, especially to private investment. For established domestic industry and commerce there is a tax on production (a single tax that was passed on to the consumer) and a tax on industrial and commercial activities.

Algeria's 1993 investment code offered foreign investment companies a three-year exemption from VAT, a property tax abatement, lower customs duties, and a two to five year exemption from corporate income taxes. The tax break was meant to stimulate investment in Algeria's export market. After 1993, foreign workers whose monthly salaries exceeded $1,333 per month paid a 20% income tax, instead of one up to 70%.

CUSTOMS AND DUTIES

A customs union between Algeria and France allows regulations applicable in the metropole to apply also in Algeria, making Algeria a de facto adherent of GATT. By a special agreement with the European Union (EU), Algerian industrial products are granted duty-free entry into the EU market and agricultural products get seasonal tariff reductions, while Algeria gives reciprocal treatment to EU imports. Algeria has also concluded preferential customs agreements with Tunisia and Morocco and is a founding member of the Arab Maghreb Union (UMA), a trade union composed of Algeria, Libya, Mauritania, Morocco, and Tunisia. The UMA intended to create a free trade zone, but this had not yet come to fruition.

Goods from France are admitted at a preferential rate; secondly, goods from other European Union countries; and thirdly, goods from countries that grant Algeria most-favored-nation treatment which are subject to a basic standard tariff. Tariffs on imports ranged from 340% in 1998, in addition to a value-added tax (VAT) of 17% on most products, although for some products the VAT is 7%. Some imports are also eligible for the Taxe Spécifique Additionnelle, ranging from 20110% and generally applied to luxury goods. As part of its application to join the World Trade Organization, Algeria lowered its rates to bring them within acceptable WTO levels. The government has further abolished the required import licenses. The only imports subject to restriction are firearms, explosives, narcotics, and pork products. Pharmaceuticals marketed in their country of origin may be freely imported.

FOREIGN INVESTMENT

Under investment codes issued in 1983 and 1986, Algeria's foreign investment regime was quite restrictive. Foreign investment was permitted only in joint ventures with state-owned companies, although repatriation of profits was guaranteed. The economy's main hydrocarbon sector and many others were off limits.

The money and credit law of March 1990 allowed majority foreign-owned joint ventures in almost all sectors except the hydrocarbon sector, electricity production, railroad transport, and telecommunications. The law provided for the safe transfer of capital and terms for international arbitration. The hydrocarbon law of November 1991 allowed foreign firms to exploit existing oil fields in partnership with the state oil firm. The Investment Code of October 1993 did not distinguish between investments made by foreigners or Algerians and granted new investors limited tax exemptions and reductions in duty on imported goods.

In 1995, the Algerian government set up the National Agency of Investment Development (Agence de Promotion, de Soutien, et de Suivi des InvestissementsAPSI) and regional investment promotion agencies to serve as a network of regional one-stop shops to eliminate layers of bureaucracy for investors. In 1996, APSI approved 50 foreign investment projects, including American (2), French (16), Italian (11), Spanish (8), and German (4) investors. As of 2002, 20 foreign-owned businesses had been established and the government set a goal to double this number.

In 1997, foreign direct investment (FDI) was $260 million and from 1998 to 2000 averaged $482 million. In 2000, the German firm Henkel acquired 60% of the state detergent and cleaning products firm, ENAD, and an Egyptian company bought a second GSM mobile phone license. In 2001, FDI more than doubled to $1.196 billion thanks mainly to the privatization and sale of one major state enterprise, the El Hadjar steel complex, SIDER, to the Indian steel firm ISPAT, which acquired 70% ownership. In August 2001, the government reorganized the public sector companies to facilitate investment. The 11 sectoral holding companies into which state economic enterprises (EPEs) had been organized in 1996 were replaced with 28 shareholding management companies and the National Privatization Council was renamed the State Shareholding Council. All sectors were opened to foreign investment in 2001, including the hydrocarbon sector, in which the government put exploratory contracts for particular blocks up for auction.

By 2003, 30 foreign oil and gas companies were working in exploration in Algeria. In 2005, the Algerian parliament adopted a new law to further liberalize the hydrocarbons sector. The law separates the commercial role of Sonatrach, the state-owned hydrocarbons company, from its previous regulatory and procurement/contracting functions. Sonatrach is now compelled to bid on domestic projects alongside foreign firms: it will no longer be an automatic partner in all projects.

Algeria's stock exchange, established in 1999, remains rudimentary, with only four companies listed as of 2005. As part of the government's ambitious privatization program, 11 other state-owned companies are expected to trade on the stock exchange in the near future.

The total value of investment declarations in 2004 was $3.5 billion, of which $2 billion was in nonhydrocarbons areas. There were 105 foreign investment projects in 2004, of which 40 were partnership projects and the rest 100% foreign-owned. Hydrocarbons FDI registered $1.8 billion in 2003, up from $671 million in 1999. This amount represented 10% of all FDI inflows in Africa (excluding South Africa).

ECONOMIC DEVELOPMENT

Following independence, Algeria adopted an economic policy favoring a socialist organization of society. Under the Charter of Algiers, the basis of Algerian policy was that the workers themselves were responsible for management, while ownership of the property was maintained by the state. The first stage of development, covering 196769, set up a basis for expansion of industry, improvement of agriculture, and training of personnel.

The second four-year plan (197477) established a heavy industrial base for the economy and largely completed agricultural reforms. The period 197879 was used to consolidate economic gains. In 1979, the government decided to limit oil and gas exports and to decentralize industry away from Algiers in order to build up the country's less developed regions. The new five-year plan for 198084 switched the emphasis from heavy to light industry and to neglected social areas, especially housing. The second five-year plan (198589) emphasized agriculture and water supply in order to reduce the chronic food deficit, but industry (32%) and social infrastructure (27%) were allotted the largest shares of the proposed total investment. By 1999, the government defined broader national economic policy objectives for diversification and development.

In the early 1980s, Algeria said it would allocate 1% of its gross domestic product (GDP) to aid Third World countries, with about 80% going to other African countries, but Algeria has been chiefly a recipient of aid.

In 1995, Algeria signed a three-year program for debt rescheduling with the International Monetary Fund (IMF), and rescheduled $13 billion of debt with the Paris Club. These programs resulted in an improved balance of trade, lowered government expenditures, and a government surplus. The government did not renew its programs with the IMF in 1998, saddling the economy with a total debt in 1998 that amounted to $31 million, and capital expenditures reaching almost 10% of the GDP.

Trade surpluses in the early 2000s led to improvements in Algeria's level of foreign debt. The stock of debt was reduced to $22.5 billion, or 43% of GDP, by the end of 2001, and to $21.9 billion in 2004. In fact, in the early 1990s, Algeria's foreign debt was equivalent to 72% of GDP and servicing it absorbed a similar proportion of export revenue. By 2004, foreign debt had dropped to about one-third that level. Foreign exchange reserves amounted to $36 billion, triple the stock from 2000. The government adopted a fiscal stimulus plan covering the period 200104. By 2005, Algeria's fiscal account was healthy, and was expected to record an average surplus of 11.7% of GDP over 200607. Inflation was projected to remain modest (the inflation rate averaged 2.6% over the period 200004).

In 2002, Algeria entered into an Association Agreement with the European Union (EU). Continuing privatization and economic and trade liberalization have been key structural reforms. Another long-term priority is addressing the high rate of unemployment. The government in 2005 had increased spending on labor-intensive housing, road, and water projects. In September 2004 the government announced a $50 billion capital spending package covering the period 200509. The country is not free of the violence of the mid-1990s, however, with struggle continuing between Islamists and the army, which controls the government. In October 2005, President Bouteflika's Charter on Peace and National Reconciliation was approved in a referendum, giving Islamist rebels an amnesty and releasing imprisoned opposition party leaders. But it is unclear how effective it will be at healing Algeria's wounds.

SOCIAL DEVELOPMENT

A social insurance system for old age, disability, sickness and death cover all employees and self-employed persons. The program is financed with contributions from employees and employers. Retirement is set at age 60 for men and age 55 for women and veterans, with early retirement available for those in arduous work, mothers, and the disabled. Work injury benefits are available to all employed individuals including technical students, voluntary social security administrators, those undergoing rehabilitation, students, and certain prisoners. Only salaried workers are entitled to unemployment benefits. The law also provides for an employment related family allowance funded by the government and the employer.

The Family Code, based on Islamic principles, effectively treats women as legal minors for life, under the authority of the father, husband, or other male head of the family. The code permits polygamy and proscribes marriage between a Muslim woman and a non-Muslim man while allowing a Muslim man to marry outside the faith. In a court of law, a woman's testimony is not considered as equal to a man's, and women do not have full legal guardianship of their children, requiring the father to sign all official documents.

Women are allowed to work but constitute only 19% of the work force. Traditional Islamic views of the role of women still dominate keeping most women from seeking jobs outside the home. The labor laws prohibit sexual discrimination in the workplace, but this is not enforced. Spousal abuse is a common problem especially in rural areas. Spousal rape is not prohibited by law, and it accounts for an estimated 27% of domestic abuse. Many of the abused women are uneducated and illiterate.

The human rights record remains poor and includes extrajudicial killings, torture, and failure to control abuses by security personnel, including massacres of suspected Islamic militants. In 2004, terrorists also committed numerous abuses in the continuing insurgency. Ethnic tensions between the Arabs and the Berbers, who were the original inhabitants of Algeria, continued. The government created the High Commission for Berber Affairs, which protects and promotes Berber language and culture.

HEALTH

The Ministry of Health has overall responsibility for the health sector, although the Ministry of Defense runs some military hospitals. In 1990, Algeria had 284 hospitals with 60,124 beds (2.4 per 1,000 people; as of 1999 this ratio had declined to an estimated 2.1). There were also 1,309 health centers, 510 polyclinics, and 475 maternity hospitals (64 privately owned) in 1990. In 2004 medical personnel numbered 84.6 doctors and 297.8 nurses per 100,000 people. Health care expenditure was estimated at 3.6% of GDP.

Free medical care was introduced in 1974 under a Social Security system that reimburses 80% of private consultations and prescription drugs.

The principal health problems have been tuberculosis, malaria, trachoma, and malnutrition. By 1999, the incidence of tuberculosis was 45 in 100,000. In 2005, the average life expectancy was 73 years, which represented a steady increase. Infant mortality in 2005 was 31 per 1,000 live births. The government is interested in creating public awareness of birth control. As of 2003 an estimated 51% of women ages 15 to 49 were using some form of contraceptive. The total fertility rate decreased to 3.2 in 2000 from 5.0 in 1987. Malnutrition was present in an estimated 18% of all children under the age of five according to the most recent figures available as of 2000. The HIV prevalence among adults in 2004 was only 0.7 per 100 adults. As of 2004, there were approximately 9,100 people living with HIV/AIDS in the country.

Algeria's immunization rates as of 1999 for one-year-old children were: diphtheria, pertussis, and tetanus, 83%; and measles, 83%. In 2000, 94% of the population had access to adequate sanitation.

Algeria's government has developed plans to boost domestic production of pharmaceuticals as well as to remedy a serious shortage of dentists and pharmacists.

HOUSING

The need for adequate housing has been a pressing problem for Algeria for several decades. In 1964, the Ministry for Housing and Construction was created to aid in reconstruction and upgrading of damaged and substandard dwellings. The government's 1965 financial reform provided for regularization of ownership and collection of rents from some 500,000 nationalized or sequestered apartments and houses in the major cities. Migration to the coastal cities during the 1960s and 1970s aggravated the housing problem, and in the 197477 development plan the government took steps to curb the flow. The 198084 plan called for the construction of 450,000 new housing units; the building effort failed to meet the target because of shortages of construction materials. In 1982, the government committed more than $1.5 billion to prefabricated housing, some of it as part of a program to build "model villages" for workers on state farms or in state-owned enterprises. In 1998, the World Bank offered the nation a loan of us$150 million for a 10-year program to improve and create low-income urban housing, thus eliminating urban slums.

Despite all these efforts, 2003 reports indicated that the country still needed 1.5 million to 2 million housing units. The average occupancy rate was at about 7.5 persons per household; with one report indicating that 52% of all households included 15 to 20 members. About half of all housing units are individual houses, with the remaining housing falling into three categories: traditional houses called haouches, flats or apartments, and shacks or other marginal arrangements. In 2000, about 94% of the population had access to improved water sources; 73% had access to improved sanitation systems. The government announced plans to built one million new homes by the end of 2009, but observers were skeptical that this plan could be achieved.

EDUCATION

Education in Algeria largely continues to follow the pattern laid down during the French administration, but its scope has been greatly extended. Public primary and secondary schools were unified in 1976 and private schools were abolished. Expenditure on education was estimated at 6% of GDP in 1999. The government has given priority to teacher training, technical and scientific programs, as well as adult literary classes.

About 4.2% of all children were involved in preprimary education programs in 2001. The compulsory education program last for 12 years, with most students beginning at age six. Basic education consists of a nine-year program. Students may then choose to continue in general secondary or technical school programs, with each involving three years of study. Education is compulsory through secondary school. Primary school enrollment in 2003 was estimated at about 95%; 96% for boys and 94% for girls. The same year, secondary school enrollment was about 67%; 65% for boys and 69% for girls. It is estimated that about 95% of all students complete their primary education. About 79% progress to secondary levels. The pupil to teacher ratio for primary school was at about 28:1 in 2003. The academic year goes from September to June. The public schools are regulated jointly by the Ministry of Education and the Ministry of Religious Affairs and the study of Islam is a required part of the curriculum. Arabic is the official language although French and Berber are also in widespread usage.

The adult literacy rate for 2004 was estimated at about 69.8%, with 79.5% for males and 60.1% for females. In January 2006, there were over 50 universities and other institutes of higher learning. The University of Algiers (founded in 1909), its affiliated institutes, and other regional universities enrolled 267,142 students in 1996. The universities provide a varied program of instruction that stresses development-related subjects. Many technical colleges also are in operation. Approximately 21% of the adult population were enrolled in tertiary programs in 2003. The National Conference of Universities was created in 2000 to serve as a coordinating body for higher education.

LIBRARIES AND MUSEUMS

The largest libraries in Algeria are those of the University of Algiers (over 800,000 volumes) and the National Library (founded in 1835, over 950,000 volumes). In 2005, the National Library (Bibliothèque nationale d'Algérie) had seven annex locations to supplement its main location in Algiers. There also exist several sizeable university collections, including the University of Constantine (208,000 volumes), the University de Mentouri (240,000 volumes), and the University d'Oran Es-Senia (200,000 volumes). Other collections of size are the Municipal Library in Constantine (25,000 volumes) and the Aubert Library in Oran (26,000 volumes). The Pasteur Institute in Algiers has a special library of over 47,000 volumes, and the Institute of National Studies in Tiaret has a library of 25,000 volumes.

Museums of importance in Algiers include the Bardo National Museum of Prehistory and Ethnography (1928), the National Museum of Fine Arts of Algiers (1930), the National Museum of Antiquities and Islamic Art (1897), and the Museum of the Revolution (1968) with a collection of memorabilia celebrating Algeria's long-fought war of independence against France. Various regional museums are located at Constantine, El Biar (west of Algiers), Oran, Sétif, and Skikda. There is a fine antiquities museum in Cherchell, a decorative arts museum in Ghardaia Oasis, and a botanical garden in Beni-Abbes. The situation of many of Algeria's cultural treasures has been in doubt because of ongoing anti-Western civil terrorism.

MEDIA

In 2003, there were an estimated 69 mainline telephones for every 1,000 people; about 727,000 people were on a waiting list for telephone service installation. The same year, there were approximately 46 mobile phones in use for every 1,000 people. Satellite, cable, and radiotelephone services link Algeria with most other parts of the world.

As of 1999, President Bouteflika has maintained that the media should ultimately be at the service of the state. As such, radio and television remain primarily under government control. Censorship is not considered a rule of law, but jail terms and fines are enforced against those issuing any statements defaming the president, the army, or other government officials.

The country's independent media includes about 43 publications. The seven largest papers had substantial circulations in 2004: El-Khabar (circulation 530,000), Quotidien d'Oran (195,000), Liberte (120,000), El-Watan (70,000), L'Expression (29,000), Djazair News (20,000) and Chorouk El-Youmi (9,000). There are two state-owned French-speaking papers, El-Moudjahid and Horizons, and two state-owned Arab speaking papers, El-Chaab and El-Massa.

Algeria has approximately 25 radio stations and 46 television stations. Satellite dish antennas are widespread and millions of citizens have access to European and Middle Eastern broadcast stations. In 2003, there were an estimated 244 radios and 114 television sets for every 1,000 people. The Algerian Press Service (APS) and the Algerian News Agency (ANA) are the primary news services.

In 2004 the country had about 897 Internet hosts. In 2003, there were 7.7 personal computers for every 1,000 people and 16 of every 1,000 people had access to the Internet.

ORGANIZATIONS

There are foreign and domestic chambers of commerce, industry, and agriculture in the major cities and the country has a national committee of the International Chamber of Commerce. The African Federation of Mines, Energy, Chemical and Allied Trade Unions is an organization of labor unions, seeking to advance the trade union movement by facilitating communication and cooperation among members and representing the interests of members before business organizations and government agencies. The leading trade union, Union Générale des Travailleurs Algériens (UGTA), sponsors many organizations in Algeria. The "professional trade sectors" affiliated with the UGTA include food, agriculture, construction, teachers, energy, finance, information sciences, light and heavy industry, health social security, and telecommunications. There are some national associations for medical professionals, such as the Algerian Association of Medical Physicists.

The National Union of Algerian Youth (UNJA) was originally established by the National Liberation Front (FLN) in 1969 as the youth wing of the FLN. Since then UNJA has broadened its youth representation and the Algerian National Youth Forum (FNJA) was established to represent other political tendencies. The National Union of Algerian Students (UNEA) and the National League of Algerian Students (LNEA) are active groups of university students. The Government's Ministry of Youth and Sports was established in 1998 and there are other national sports associations, some of which are linked to international associations as well. Other youth NGOs in Algeria include the Federation of Algerian Youth Hostels and the Union of Youth of Seguia El Hamra Río Oro. A scouting movement (Scouts Muslmans Algériens/Algerian Muslim Scouts) is also present.

Red Cross and Red Crescent societies, including one for youth, are active. There is an organization of Amnesty International represented within the country. There are chapters of the Lions Club and Kiwanis International. The Society of St. Vincent De Paul also has members in Algeria.

Learned societies are active in such fields as anthropology, archaeology, geography, history, and various branches of medicine.

TOURISM, TRAVEL, AND RECREATION

Visitors need a valid passport and a visa. There are no required vaccinations, although inoculations against typhoid, tetanus, and rabies are recommended. Vaccination against yellow fever is required of those coming from an infected area.

Among popular tourist attractions are the Casbah and Court of the Great Mosque in Algiers, as well as the excellent Mediterranean beaches, Atlas Mountains resorts, and tours of the Sahara Desert. The government has encouraged tourism as an increasingly important source of foreign exchange. In 2003, there were 1,166,287 visitor arrivals. The majority of foreign tourists were from France and Tunisia, with over 192,000 visitor arrivals from those countries. Receipts from tourism came to $161 million.

The most popular Algerian sport is football (soccer), which is played throughout the country by professionals and amateurs alike. Tennis is widely played as well.

FAMOUS ALGERIANS

The most famous Algerian of antiquity was St. Augustine (Aurelius Augustinus, 354430), a Church father and theologian who was born in eastern Numidia. An important 19th-century figure was Abd-el-Kader ('Abd al-Kadir bin-Muhyi ad-Din al-Hasani, 180873), emir of Mascara, who led the resistance against the French invaders from 1830 to 1847. Two early figures in the drive for Algerian independence were Messali Hadj (1898?1974), who organized several political movements, and Ferhat Abbas (190086), who led the first provisional government and was elected first speaker of the National Assembly in 1962. Other important nationalist leaders include Ahmed Ben Bella (b.1916), a founder of the FLN and the first premier of independent Algeria, who, after becoming president in 1963, was overthrown and imprisoned for 15 years (until 1980); Belkacem Krim (192270), political leader in Kabilia; Benyoussef Ben Khedda (192267), head of the provisional government in 196162; and Houari Boumedienne (Muhammad Boukharrouba, 192778), who overthrew Ben Bella in 1965 and became president in 1976. Boumedienne's successor as president and FLN leader was Col. Chadli Bendjedid (b.1929).

Two renowned French Algerian writers were playwright Jules Roy (19072000) and novelist, playwright, and essayist Albert Camus (191360), winner of the Nobel Prize for literature in 1957. Frantz Fanon (b.Martinique, 192561), a psychiatrist, writer, and revolutionary, was a leading analyst of colonialism.

DEPENDENCIES

Algeria has no territories or colonies.

BIBLIOGRAPHY

Benjamin, Roger. Renoir and Algeria. New Haven: Yale University Press, 2003.

Heggory, Alf Andrew, and Philip Naylor Chiviges. The Historical Dictionary of Algeria. 2nd ed. Metuchen, N.J.: Scarecrow Press, 1994.

Hourani, Albert Habib. A History of the Arab Peoples. Cambridge, Mass.: Belknap Press of Harvard University Press, 2002.

McDougall, James (ed.). Nation, Society and Culture in North Africa. London: Frank Cass Publishers, 2003.

MacMaster, Neil. Colonial Migrants and Racism: Algerians in France, 190062. New York: St. Martin's Press, 1997.

Malley, Robert. The Call from Algeria: Third Worldism, Revolution, and the Turn to Islam. Berkeley: University of California Press, 1996.

Roberts, Hugh. Battlefield Algeria 19882002: Studies in a Broken Polity. London: Verso, 2002.

Ruedy, John. Modern Algeria: the Origins and Development of a Nation. Bloomington: Indiana University Press, 2005.

Stora, Benjamin. Algeria, 18302000: A Short History. Ithaca: Cornell University Press, 2001.

Zeilig, Leo and David Seddon. A Political and Economic Dictionary of Africa. Philadelphia: Routledge/Taylor and Francis, 2005.