Oil and gas. Recent collaboration with Western oil companies should lead to improvements in productivity. Natural gas is supplied to Europe.
Weaknesses
Oil revenues yet to recover from the 1986 collapse in world prices. Political turmoil threatens many new projects and has led to an exodus of European and other expatriate workers important to the economy. Lack of skilled labor coupled with high unemployment. Limited agriculture. Shortages of basic foodstuffs. A thriving black market.
Profile
Under the pro-Soviet National Liberation Front, the Algerian economy was dominated by centralized socialist planning. In the late 1980s, the economic collapse of the Soviet Union led to a change in policy, and Algeria began moving toward a market economy. However, these reforms were frozen following the military takeover in 1991. The army still favors a centrally planned economy and, as a result, the state still retains control of the vast majority of the economy's most productive sectors.
Only in the oil industry has private investment been encouraged. A number of Western oil companies have signed exploration contracts with Algiers since it has accepted more competitive production-sharing agreements. However, Western investment levels are likely to remain small as long as the political situation is unstable. Algeria is now importing more than half its grain, and long food lines are routine in the capital.
