Africa's second-largest country, Algeria, which extends from a densely populated Mediterranean coastline to the empty north Sahara, won independence from France in 1962. The military blocked Islamist militants from taking power after winning elections in 1991, setting up a new civilian regime and fighting a bloody terrorist conflict ever since. Algeria has one of the youngest populations, and highest birthrates, in the region.

Algeria's population is predominantly Arab, under 30 years of age, and urban; around a quarter are Berber. More than 85% speak Arabic and 99% are Sunni Muslim. Mosques also provide social and medical services. Of the million or so French who settled in Algeria before independence, only about 6000 remain. Most Berbers consider the mountainous Kabylia region their homeland. Demonstrations there have met with violent police crackdowns, particularly in the Berber Spring of 1980, and since its anniversary in 2001. The Berber language, Tamazight, was recognized as an official language in 2002.

Strengths

Oil and gas. Recent collaboration with Western oil companies should see improvements in productivity. Natural gas is supplied to Europe, with plans in hand for the construction of a third undersea pipeline.

Weaknesses

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. Thriving black market.

Profile

Under the pro-Soviet National Liberation Front, centralized socialist planning dominated the Algerian economy. 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. These reforms were frozen following the military takeover in 1992, although many have since been resumed under pressure from the IMF and the World Bank. The majority of the economy's most productive sectors remain under state control, although private investment is encouraged in the oil industry and, since early 2001, in telecommunications. A number of Western oil companies have signed exploration contracts with Algeria 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 has a multiparty parliamentary system.

Profile

Until 1988, Algeria was a single-party socialist-style regime. The aging ruling elite then adopted privatization policies which were strongly opposed by Islamist militants. The Islamic Salvation Front (FIS) won elections in 1991, but was prevented from taking power by the army. Since 1992 the country has been scarred by appalling violence and tens of thousands of people have been killed in a terrorist campaign and by ruthless state counterterrorism. Hopes for peace rose when Abdelaziz Bouteflika became president in 1999, although the election was marred by the withdrawal of all other candidates. Parliamentary elections in 2002, won by the FLN, also suffered from a low turnout and a partial opposition boycott. Violence continues, with an annual death toll still in the thousands.

Main Political Issues

Islamic fundamentalism

Islamist militants want Algeria to become a theocracy. The imposition of military rule to prevent the militants taking office in 1992 unleashed violence spearheaded by the extremist Armed Islamic Group (GIA).

The market economy

The FIS's 1991 election victory was in part due to popular reaction against economic reforms. After a brief suspension following the army takeover in 1992, the liberalization program was revived under pressure from the IMF and the World Bank.

Algeria's struggle for independence from France lasted from 1954 until 1962. Throughout the 1960s and 1970s, Algeria's success in rejecting a colonial power made it a champion for the developing world. It had a leading voice within the UN, the Arab League, and the Organization of African Unity. However, relations with the West remained essentially stable. Algeria was increasingly seen by the diplomatic community as a useful bridge between the West and Iran. In 1981, Algerian diplomats helped to secure the release of US hostages being held in Tehran. Algeria also attempted to act in a mediating role during the 1980–1988 Iran–Iraq War.

Algeria's influence overseas has diminished as the country has become increasingly unstable politically. A victory for the fundamentalist FIS in Algeria would greatly encourage Islamist militants in neighboring Morocco and Tunisia, and further undermine Egypt's embattled government.

France fears the spill-over of terrorism and has been shocked by the killings, especially those of seven French priests and of the French Roman Catholic bishop of Oran.

European governments are anxious to help stabilize the regime to avoid refugees seeking entry into France, Spain, and Italy.

The National Liberation Army (NLA), equipped with Russian weapons, is the dominant power in politics. There have been fears that parts of the army would forge an alliance with Muslim militants; the extreme rebel Armed Islamic Group, which has split from the FIS, is led by former army officers. However, the military are also suspected of taking part in reprisal killings of large numbers of Islamists.

Crude oil and natural gas, Algeria's main resources, have been produced since the 1950s. Algeria also has diverse minerals, including iron ore, zinc, silver, copper ore, lead, gold, and phosphates. In the 1960s and 1970s, Algeria sought to become a major manufacturer, with investments in building materials, refined products, and steel; none of these sectors is competitive on world markets. Agriculture employs one-quarter of Algeria's workforce, but its importance to the economy is diminishing. State forests cover some 2% of Algeria's land. Most are brushwood, but some areas include cork oak trees, Aleppo pine, evergreen oak, and cedar. Algeria has a large fishing fleet. Sardines, anchovies, tuna, and shellfish are the major species caught commercially.

Since most of Algeria is desert or semidesert, over 90% of the population is forced to live on what remains – some 20% of the land. The desert is moving northward. Vegetation has been stripped for use as firewood and animal fodder, leaving fragile soils exposed which then require expensive specialist care to conserve them. Techniques for water purification are substandard, and rivers are being increasingly contaminated by untreated sewage, industrial effluent, and wastes from petroleum refining.

There are five international airports. Rail is the quickest way to travel between the main urban centers.

Since 1974 all Algerians have had the right to free health care. Primary health care is rudimentary outside main cities. Because the formal health care system is overburdened, many people turn to alternative forms of medicine. The infant mortality rate is well below the average for north Africa, and life expectancy is just above the regional average.

Over three-quarters of the school-age population receive a formal education, and the literacy rate is rising.

Since 1973, the curriculum has been Arabicized and the teaching of French has been restricted. New legislation in 1996 enforced the use of Arabic in public life, including for teaching.

Ten universities, seven polytechnics, and several technical colleges provide higher education.

Thousands of people have been killed by radical Islamists since 1992, while human rights groups have accused pro-government death squads of brutal reprisal killings and of persecuting suspected Islamist militants.

There is great disparity in wealth between the political elite and the rest of the population. Those connected to the military are the wealthiest group. Most Algerians have had to contend with soaring prices for basic necessities.

The once-popular desert safaris are now rare. Tourists are a target for militant Islamist groups.

The conquest of Algeria by France began in 1830. By 1900, French settlers occupied most of the best land. In 1954, war was declared on the colonial administration by the National Liberation Front (FLN).

• 1962 Cease-fire agreed, followed by independence of Algerian republic.
• 1965 Military junta topples government of Ahmed Ben Bella. Revolutionary council set up.
• 1966 Judiciary "Algerianized." Tribunals try "economic crimes."
• 1971 Oil industry nationalized. President Boumedienne continues with land reform, a national health service, and "socialist" management.
• 1976 National Charter establishes a socialist state.
• 1980 Ben Bella released after 15 years' detention. Agreement with France whereby latter gives incentives for return home of 800,000 Algerian immigrants.
• 1981 Algeria helps to negotiate release of hostages from US embassy in Tehran, Iran.
• 1985 Two most popular Kabyle (Berber) singers given three-year jail sentences for opposing regime.
• 1987 Limited economic liberalization. Cooperation agreement with Soviet Union.
• 1988 Anti-FLN violence; state of emergency. Algeria negotiates release of Kuwaiti hostages from aircraft; Shi'a hijackers escape.
• 1989 Constitutional reforms diminish power of FLN. New political parties founded, including Islamic Salvation Front (FIS). AMU established.
• 1990 Political exiles permitted to return. FIS wins municipal elections.
• 1991 FIS leaders Abassi Madani and Ali Belhadj arrested. FIS wins most seats in National People's Assembly.
• 1992 President Chadli overthrown by military. President Boudiaf assassinated. Madani and Belhadj given 12 years in jail.
• 1994 Political violence led by GIA.
• 1995 Democratic presidential elections won by Liamine Zéroual.
• 1996 Murders continue, notably of Catholic clergy and GIA leader.
• 1997 Madani released from jail but debarred from active politics.
• 1999 Abdelaziz Bouteflika elected president in poll boycotted by opposition candidates.
• 2001 Fresh investment in oil and gas benefits economy. Resurgence of Berber protests.
• 2002 Berber language, Tamazight, recognized as national language. FLN election victory.