|From state capitalism to neo-liberalism in Algeria: the case of a
By Stéphanie Saumon ** (July 2000)
TABLE OF CONTENTS
1945-1962: WHEN THE LACK OF INDUSTRIALISATION SERVES THE NEEDS OF
THE COLONIAL STATE
1962-1979: WHEN INDUSTRIAL DEVELOPMENT IS A TOOL FOR THE
EDIFICATION OF STATE CAPITALISM
1979- 2000: STATE WITHDRAWAL, LIBERALISATION AND PRIVATISATION
More than twenty years after his first visit as the Foreign Affairs
Minister of independent Algeria, President Abdelaziz Bouteflika was welcome in Paris last
June, in an atmosphere oscillating between passion and reason(1). Passion because the
relations between the two nations are extremely complex and still under the heavy shadow
of the bloody war, which ended 130 years of French violent colonial rule, and because the
question of Algerian sovereignty and State efficiency is still very much an issue raised
by Algerian leaders(2) to oppose French pretensions in the Maghreb. But also reason
because both countries admit they have common interests and need each other: Algeria's
weight in the Arabic world and in Africa, its endowment in natural resources and will to
privatise its economy (notably its industrial assets) bring new enthusiasm to France and
its entrepreneurs, while France international status could help Algeria's re-integration
in the international economic community, a step towards a possible solution to Algeria's
increasing debt. The fragile stability lately established through the "concorde
civile" around the Algerian State is also of extreme importance in regard to its
economic performance and perspectives. Indeed, much of the talks held in Paris were
related to Algeria's State and economy, notably its industry.
In a context marked by a slowly recovering Algerian State and economy,
this essay question is extremely interesting. The answers to the question: "To what
extent did the State succeed in promoting industrial development in (...) Algeria since
the Second World War?" involve many different and complex factors. First, the
mentioned period means that the notion of State will involve at least two different
concepts and realities: a colonial State until 1962 and an independent one in (re-?)
construction from 1962 to present time. Special attention should be paid to the period of
transfer of political, economic and social power. Second, and logically following from the
previously mentioned question of the State, the notion of the success of industrial
development can be approach from different angles. I see it as an integral part of human
development. I will therefore organise my critical evaluation according to the following
definition of human development: it is the "need to put people -their
needs, their aspirations and their capabilities- at the centre of the development
effort"(3). It means empowering people to make them the principal actors of a
"pro-poor growth (...) job-creating, poverty reducing, participatory, culturally
entrenched, environment-friendly"(4). Success refers to the notions of strengths and
weaknesses of the industrial development and its sustainability. This implies that some
elements of industrial development can be perceived as beneficial or as a source of power,
the main questions being: who benefited from Algerian industrial development and who
suffered from it? This question will have therefore to be observed through this analytical
framework and several additional questions - such as industrial development for whom? -
will have to be answered.
In this essay, I will attempt to emphasise the specific links that
connect the State in Algeria and the industrial development of the country. I see these
two elements as part of a complex whole that includes other important concepts such as
those of nation, sovereignty and civil society. The relation between the State in Algeria,
whether colonial or independent, and industrial development functions in both senses
because each element reinforces or weakens the other one. There is a logical connection
between both realities and I will show that industrial development is not merely a part of
State policy but that it has specific meanings and roles that reinforces a particular type
of State. Thus, the nature and position of the State is a determinant but also an outcome
of the success or failure of industrial development, as the latter is meant to support the
goals of the former.
I will organise my critical evaluation in a chronological approach.
First, I will cover the last years of colonised occupation from 1945 to 1962. I will show
that the particular configuration of the Algerian economy and the "special"
place within it of industry is a logical outcome of the presence of the French colonial
State and that it helps to support the goals of the latter. In a second part covering the
period from 1962 to 1978 (period within which 1965 marks a slight transition), I will show
that the choices made in regard to the promotion of industrial development in independent
Algeria illustrate and support the edification of a particular type of State, whose
socialist rhetoric hides different realities. Finally, I will study the last decades from
1979 to 2000. Algeria's choices in industrial development will be related to its
conformations to the prevailing conceptions of a weak State and international competition
favouring the penetration of foreign capital.
1945-1962: WHEN THE LACK OF INDUSTRIALISATION SERVES THE
NEEDS OF THE COLONIAL STATE.
Two periods will be considered in this first part. From 1945-6 to
1954, Algeria is still a relatively pacified country and the colonial State manages its
economy without any major obstacles. However, from 1954 to 1962, the war of liberation
provokes huge human and material destruction, and partly hampers the application of French
recommendations regarding industrial development in Algeria. In both periods, the choices
made regarding industrial development serve the needs and the purpose of the colonial
State: to extract the possibly highest amount of value added from the human and natural
resources existing in this colony.
In 1930, the French celebration of the 100th anniversary of
the colonisation of Algeria had been a happy and almost "legitimate" ceremony
and after the Second World War, no one, at least in France (except the Communists but only
from 1947), could even imagine to abandon the most precious colony of the empire(5). The
advocates of the French colonial adventure in Algeria had been trying to justify and
legitimate it, invoking the "caractère colonisable" of this part of
Northern Africa, which had been invaded successively by the Roman, the Vandal, the Arabic
and the Turkish powers: Algeria was "incapable d'indépendence"(6).
Indeed, Algeria was a special colony for the French power: whereas France had recognised
to a certain extend the complex identity and culture of Morocco and Tunisia, it had denied
it completely to Algeria(7), facilitating its transformation in a colony of settlement and
its complete human and economic exploitation.
The colonial system relied principally on the expropriation of the
indigenous "owners-farmers" and on the alienation of the fertile land of the
territory, which is essentially located on the Mediterranean coast. To fulfil the needs of
the colonial State, the French introduced private property laws in order to break the
social and economic organisation of the indigenous society around the land, which was
previously owned by the community(8). The introduction of monetary taxes was the second
element of this policy of pillage, whose principal weapon was the direct expropriation by
force. Therefore, the land was transformed in capital and that made possible the
conversion of its output in commodities(9). The agricultural sector was dedicated to the
production of products, unknown to the indigenous population's diet, such as wine for
example: these cash crops, which were exported to France, were a source of high revenues
for the European settlers. It led to the creation of a wealthy and dominant social group
constituted mostly of Europeans, who could from this established base create the services
needed for the commercialisation of the products and for the daily life of hundreds of
thousands of colons.
This process was accompanied by an increasing poverty for the
indigenous people and the creation of a new individual, unknown before the French
exploitation: le prolétaire(10) Thus, by expropriating indigenous people from
their land, the colonial power had created a mass of landless peasants who became
marginalised in their own society, notably because of the lack of industrialisation. But,
the absence of any coherent and determined industrialisation strategy, at least for a
certain time, did not harm the European population: on the contrary, it served their
needs. Thus, industry had been constantly sacrificed in order to establish an economic
base for the political power of the colonial State. By keeping a large part of the
indigenous population unemployed and without sufficient means of survival, the colons could
benefit from an extremely cheap and docile labour force. This "comparative
advantage" generated so much wealth, and conformed so well to the goals of the
colonial State, that the latter did not get involved in diversifying the economy and
creating an industrial base capable of absorbing the extra labour force, on the contrary:
"En ce qui concerne le colonat, l'intérêt principal réside dans
la nécessité d'éviter l'expansion d'une nouvelle activitée économique susceptible de
le priver d'une main d'oeuvre bon marché. La disponibilité d'une force de travail
surabondante n'incite pas à la mécanisation et à l'équipement des structures
productives, et donc le cas échéant à l'investissement dans la fabrication de biens de
production, pierre angulaire de tout processus d'industrialisation".(11)
In doing so, the colonial power created a new economy relying on a very
efficient "colonial infrastructure"(12). In this dual system, the modern sector
was controlled by the Europeans(13), whereas the traditional one was held by the
indigenous population(14). This economy was extremely unbalanced along geographical as
well as sectoral lines: a few raw materials and agricultural products dominated the
economy and the industry, especially heavy industry, was almost non-existent(15). In 1946,
the colonial State decided with the "Réformes Musulmanes"(16) to develop
the industrial sector of the colony but the five-year plan was never completed: in 1954,
only 15 000 new jobs had been created in the industrial sector(17). In 1955, the share of
the industry of transformation reached only 8% of the GDP(18). The country was "sous-industrialisé",
in 1954 it was estimated that only 215 000 workers were employed by the industrial sector,
approximately 2.4% of the total labour force(19).
By neglecting industrialisation, the colonial State was only fulfilling
its role, which was to favour, organise, conduct and finally channel the extraction of a
huge economic surplus from its colony to the "Métropole". The success of
the colonial operation in Algeria, which had absorbed hundreds of thousands of French
citizens, became the only argument to defend the colonial logic when this one came under
heavy criticisms. Indeed, after 1945, it became increasingly difficult for France to
legitimate the existence of the colonial empire, especially at the international level but
also at the national level(20). In spite of the adoption of a quite liberal Constitution
in 1946(21) and the vote of a new status for Algeria(22), the French "mission
civilatrice" appeared more and more as an oppressive operation, a factor that
reduced its room for manoeuvre at the European and international level. It is in this
context that the Algerian insurrection exploded on November the 1st 1954.
The colonial economy was to be extremely disturbed by eight years of a
violent war between the nationalist movement, the FLN (Front de Libération National),
and the colonial State. The material and human destruction provoked by the conflict
hampered very much the new visions of the French power in regard to industrial
development. Indeed, the colonial State had evolved and paid more and more attention to
the need for industrialisation of the Algerian territory(23). It is the slow but important
decline of the colonial agricultural sector coupled with the discovery of important
oilfields in the Sahara(24) that provoked this important mutation of the economic
priorities of the colonial State. The latter saw a new opportunity to reach its goals by
orientating the specialisation of the colony in a different direction: from the role of
supplier of agricultural products to feed the French population, Algeria was to become the
oil reserve of France. The French bourgeoisie, both in France and Algeria, bet on oil
possessions to develop and modernise the industrial sector, a move that would enable them
to unfold their activity at the international level(25). The industrial development of
Algeria had relegated agriculture to the second rank of the priorities of the colonial
State: industrialisation was now the most important pillar to support the increasingly
fragile colonial edifice(26).
This new orientation was concretised by De Gaulle's Plan de
Constantine. This ambitious five-year plan was meant to reach several targets and a
massive programme of industrialisation was part of the new orientation(27). France was to
invest 2000 billion francs in order to increase Algerian total production by 58% in five
years(28). It relied principally on the extraction, production and treatment of oil and on
all the industries related to this source of energy: thus, the construction of an oil
refinery and of a petrochemical complex was planned. Iron and steel works were also part
of the priorities of the new plan. However, for the colonial plan to reach its new goals,
the Algerian revolt was a big handicap. Thus, there was a military companion piece to this
economic plan: the colony was to be "pacified" notably through the creation of "villages
de regroupement" which were the cores of a programme of internal displacement of
approximately two million people. Apart from its strategic importance, this was necessary
for the colonial State to start extracting economic surplus from the industrialisation of
the colony(29). Indeed, in three years, and knowing the unstable context in which it was
implemented, the plan achieved some positive goals: 150 plants were created while 150 were
modernised and extended(30). More important was the production of oil that had been
increased substantially: 6 millions metric tons were extracted in 1961, one year before
independence(31). Although, the plan had not reached all its targets, it was to be of
relative importance for the future.
1962(32)-1978: WHEN INDUSTRIAL DEVELOPMENT IS A TOOL FOR THE
EDIFICATION OF STATE CAPITALISM.
Understanding the role of the State in promoting industrial
development in independent Algeria implies a necessary explanation of the nature of the
former and an overview of the problems surrounding its edification. During its first years
of independence, the Algerian conception of the State, in a context described as a
socialist revolution, is ambivalent. The edification of the State is celebrated but it is
also perceived as a threatened and threatening entity:
"Il faut combattre sans répit la tendance de ceux qui affirment
que la construction de l'Etat est un préalable à la révolution. Une telle voie est
fausse. Elle aboutirait (...) à remettre le pouvoir entre les mains de ceux qui
actuellement possèdent la culture et l'expérience politique, c'est à dire en gros aux
éléments liés à la bourgeoisie. Il faut donc dénoncer la théorie des
Before its construction, the State must be controlled by the
revolutionary forces in order to prevent its bureaucratic section - where the forces of
the bourgeoisie are predominant - to become too powerful(34). To reach this aim, the
revolutionary elite of the movement of liberation, reduced to the FLN, has to control the
State to defend it against the counter-revolutionary elements, hence the single party
regime(35). One of the problems inherent to this conception is that the FLN is actually
devoid of any real power whereas the bureaucracy (a colonial inheritance) is extremely
powerful(36). Another disadvantage is contained in the fact that the civil society is not
included in the process of formation of the State and this could actually reinforce the
danger feared by the FLN.
The absence of any special place of the civil society in the
edification of the State is also linked to another conception of the State, which involves
the concepts of nation and sovereignty. The edification of the State is a first
requirement for the affirmation of the new independent nation and its economic
development. The expression of the nation is perceived has having the ascendant on the
components of the society(37). The Algerian people is celebrated for its courage and its
resistance to the colonial power but is also portrayed as a minor incapable of
understanding its own religion, culture and history without the help of the emancipated
elite(38). In other words, without a strong State for guidance, the Algerian civil society
is incapable of building its nation and of developing its economy(39). This implies that
the Algerian civil society is conceived as a single and united entity, the contradiction
being between the former coloniser and the colonised. This conception of the nation is
extremely marked by the historical context. The Algerian nation is not defined as an
autonomous entity with its own goals, such as the edification of a State representing the
civil society and the launching of an economic programme targeting the needs of the
people. The international context predominates over the national one and Algeria is
perceived in relation with its close past: a former French colony that has to develop in a
context marked by its relationship with the former invader(40). The first goal of the
State is therefore to express the independence and the sovereignty of Algeria first to the
former coloniser, then to the rest of the western world. This implies political means -
the artificial homogeneity of the society represented by the single party regime - as well
as economic ones - the control by the State of the means of production in order to permit
international competition with the former coloniser and the western world. But the control
of the State apparatus by the bourgeoisie has serious implications for the model of
"(...) the so-called socialist regimes have in fact been the
product of national popular revolutions (not socialist ones) directed against the effects
of polarization and peripheralization produced by the global expansion of actually
existing capitalism. Therefore the conflict between capitalism and socialism continued to
operate within these societies throughout their history."(41)
It is in this context b that the first
development of the movement of "autogestion" started. It was
spontaneously led by workers who decided to occupy and take control of the factories left
by the French. It soon spread to all the sectors, including the industrial one. In 1964,
the movement of autogestion included 10 0000 workers and the occupied industrial
units were spread in different branches (See table 1 in annex).
This initiative represented an attempt to create a new form of social
relations to oppose the authoritarian and bureaucratic character of the emerging
State(42). Indeed, the first three years of the Algerian independence are marked by the
conflict between these two different tendencies(43). Under Ben Bella, the dominant social
group in control of the State orientated its offensive on two different axes reaching the
same aim. The control of the means of production by the State was to be completed by the
nationalisation of different assets(44) and by the direct control of the "autogestion"
sector. Between 1962 and 1965, nationalisation was limited to the small factories and did
not touch the most important branches of the national industry capable of accumulating
capital, such as hydrocarbons and iron and steel industry(45). As for autogestion, the
workers in control of the industrial units were perceived as a threat to the bourgeoisie's
interests and the State soon became the main tool of control over this spontaneous and
Thus, the laws of august 1962 required from the workers to legitimate
the occupation, while the return of the European owners was perceived as possible, an
affirmation which enabled the State to introduce some civil servants in the vacant
units(46). Three months later, the government recognised the rights of the former owners
and changed the meaning of the autogestion operation: this was to become a cogestion
involving the former owners and the workers. Once again, this enabled the State to tighten
its control over the movement by introducing financial and technical agents in the
factories(47). In 1963, the State was legally able to take control of all the vacant units
and could even decide to integrate the important ones (occupied or not) in the public
sector, as the return of the owners was not perceived as possible anymore. Moreover, the
State could now dictate the organisation of the units in autogestion. The main
actor became the State(48). Samir Amin says:
"celui-ci (l'Etat) prétend représenter l'intérêt général et
à ce titre réclame une autorité de contrôle et le droit à une part de bénéfice pour
le financement du développement et l'organisation d'une redistribution du revenu entre
les catégories privilégiées de l'autogestion et les masses rurales traditionnellement
privées de ces privilèges. Mais les masses pauvres, comme les chômeurs, ne reçoivent
en fait pas grand chose au titre de cette redistribution"(49)
This emerging form of State capitalism was reinforced in 1964 with the
new law about the industrial sector. It increased the power of the State, via the Ministry
of the Economy and of the Plan, which could now decide of the production targets, the
investments and could centralise the income of the different units. Moreover, several
units were gathered together in order to create State companies and to eradicate the augestion(50).
This took place in a very difficult economic context for the Algerian industry. With a
very low level of value added, the existing industry was not integrated in the national
economy and was extremely dependent on foreign monopolies for the supply of intermediate
goods(51). The latter dominated the economy by producing capital goods thanks to a better
technology, the quality of its employees and to the high density of capital: this
reinforced a general tendency to import instead of investing and the general degree of
dependence of the Algerian economy(52). Finally, the working conditions were extremely
hard, partly because the colonial social legislation had been perpetuated.
The coup d'Etat by Boumédiène in 1965 did not really change
the conception of the State, apart from the reinforcement of its nationalistic goal. The
policy of nationalisation was more pronounced, which enabled the government to create
important State companies(53). The remains of the autogestion were finally
destroyed and in 1967 the conflict between its advocates of the partisans of State
capitalism was over: the latter had won(54).
To support the ambitious nationalistic goals of the State, Boumédiène
launched a massive programme of industrialisation with the application of the theory of
the "industries industrialisantes":
"La focalisation des dirigeants algériens sur l'idée de l'Etat
à reconstruire sinon pour relever les défis de l'histoire, du moins pour rattraper
l'ex-colonisateur, surtout au plan économique - d'où la stratégie de 'l'industrie
industrialisante' mise en branle dans les années 1970 - sinscrit tout à fait dans sette
logique du lourd contentieux historique algéro-français et franco-algérien."(55)
According to this theory, a newly independent State should prioritise
industrial development to promote "an internal dynamic of development in order to
overcome the extroversion and internal disintegration of an economy shaped by
colonisation"(56). The success of the industrialised nations, including the former
coloniser, was described as being determined by their capacity to develop and export high
technology and high value added industries(57). The energy, metallurgy, chemical and heavy
machinery sectors were to be developed first because it would produce raw materials and
machinery for other industries while at the same time consuming locally produced raw
materials and agricultural products. Thus, industrial development was to become the engine
of development of the whole economy, as heavy industry would help develop light industry,
which would employ the rural poor and satisfy the needs of the consumers(58). Combined
with import substitution industrialisation, this theory would enable Algeria to become
economically sovereign. The existence of oilfields and gas reserves, as well as heavy
loans with industrialised countries, would provide the huge financial resources needed to
support this programme. The nationalistic energy of the Algerian people would ensure that
this socially difficult enterprise would succeed to transform Algeria in a world-class
economic competitor(59). Thus, the Algerian State did not develop an Algerian model of
industrial development but simply transferred the economic logic of the western capitalist
countries on a very different reality and with incredible targets. Algeria had to realise
in twenty years what industrialised countries from the western world had spent several
decades to achieve, and this from a very low level of economic development (aggravated by
a declining agricultural sector) and a high degree of dependence on foreign countries,
which might be increased by the important loans contracted by the Algerian State.
Industrial development began with the three-year plan (1967-1969), and
went on with two four-year plans (1970-1973 and 1974-1977). The share of the investments
in the hydrocarbons sector was higher than what was planned, the capital and intermediate
goods sector received slightly less, whereas the agricultural and infrastructural sector
fell in a big proportion(60). The share of investment in industry reached levels as high
as those of USSR and Japan: 40% to 50% of total planned investments were dedicated to
industry, and 80% to 90% of industrial investments targeted heavy industry(61).
In 1978, very little progress had been achieved. The average annual
growth of the Algerian economy was 7.2% and the country's industrial production doubled
between 1966 and 1978 but it was accompanied by low productivity, rising costs and a
growing dependence on imported skills and goods(62). Of increasing importance was the
rising debt. The regional asymmetry was increased as the industrial development took place
very much in the North of the country, leading to an hyperurbanization of the fertile
land. The delays in reaching the targets and the under-utilisation of the equipment pushed
the government to turn to foreign companies after 1974(63). Moreover, this strategy did
not lead necessarily to economic and political independence and sovereignty. I have
already emphasised the technological dependence, but it is also possible to talk about a
cultural one (relations with the capitalist societies and dominant position of the western
elite in the economy), and about a food dependence consequent of the neglect of the
Thus, from the point of view of human development, the industrial
development failed to satisfy basic needs. In many respects, Algeria resembled to the
other Arabic oil economies. The preponderance of the hydrocarbon sector had slowed the
process of economic diversification. The agricultural sector had been sacrificed. The
selection of the prioritised industries did not satisfy the population's basic needs and
increased the degree of economic dependence on the transnational corporations because they
"were no more than links in the international chain of industry"(65). Finally
and even more important was the creation of a "rentier class of expanding size and
influence"(66). The inequalities in the distribution of incomes increased as the
civil servants acquired privileged status(67). The Algerian people's well being had been
sacrificed to the impossible dream of industrialising in twenty years a country with no
real industrial tradition.
1979-2000: STATE WITHDRAWAL, LIBERALIZATION AND PRIVATIZATION.
In the following decades, Algeria approached its industrial
development from a complete different point of view. Algeria considerable oil wealth had
delayed the real transformations(68). However, the arrival at the head of the State of
Chadli in an international context marked by the American and English neo-liberal
experiments led to the adoption of a minimalist conception of the role of the State. Thus,
the role of the State in promoting industrial development in Algeria was now limited to
create favourable conditions for the participation of the private sector in the
development process. This implied a withdrawal of the State as a leader and builder of the
economy and its transformation in a mere organiser of the economic structures.
The early 1980s were marked by an acknowledgement of the inadequacy of
a centralised economy and the need to encourage private sector's efforts to reach
development objectives(69). Policies of administrative decentralisation and deregulation
were initiated in order to stimulate the industrial sector by setting free the managers
and entrepreneurs(70). The five-year plan of 1980-1984, "Towards a better Life",
launched economic reforms. The policy of decentralisation was reinforced while more
attention was paid to light industry and social infrastructure. Investments in
hydrocarbons decreased by 75%, while the share of agriculture was increased from 4.7% to
11.8%(71). Heavy criticism targeted the previous focus on heavy industry, whose failure
was attributed to inefficient large and overcentralised State organisations. One of the
main goals of the plan was the improvement of the productivity of existing industrial
plants. This was to be done through the "restructuring of the State companies into
new subsidiaries or autonomous regional entities with the aim of rendering them more
profitable, more efficient and more market oriented"(72). The State oil company, the
Sonatrach, was the first one to be dismantled in thirteen entities and although "the
central organization remains, responsibility for many of the huge company's auxiliary
activities have been delegated to the new companies, some of them headquartered outside
Algiers"(73). This process of restructuring was extended to other branches of the
industrial sector(74). The private sector was the object of particular attention:
participation and investments in public concerns were encouraged as long as they did not
permit any monopoly or strategic position in any industry(75). The State also acted to
create more joint-venture with foreign interests: "Western businesses are being given
tax holidays to encourage them to invest in consumer goods industries, housing and
This transition towards a market economy did not improve the
performance of the industrial sector despite a growth rate of 9.5% between 1979 and 1985
(mainly due to the final realisation of the projects inaugurated in the 1970s). Indeed,
most of the changes introduced in the economy failed to reach their aim. In 1984, the
second plan, "Work and Discipline to Guarantee the Future", the government
recognised it should initiate a period of austerity. New efforts were made in order to
stimulate public sector-efficiency in 1987 with the introduction of "autonomie de
gestion"(77). Accelerated in 1988, this new orientation meant that the new autonomous
firms were to invest without the control of the State. However in practice, the unchanged
bureaucratic attitudes and the permanent State control of access to foreign exchange
hampered the implementation of the new reform(78). Apart from the failure of the
deregulation attempt, the attempt to create a participation of the private sector in
public assets partly failed because the industries continued to operate at a loss and
therefore did not attract private capital(79). The process of economic restructuration
proceeded very slowly notably because of the opposition to the reforms inside the FLN and
the State(80): the power of the technocratic and bureaucratic class developed by the
regime of Boumédiène was threatened by the military, and also the bourgeoisie, favoured
by the new orientations. The workers also opposed the new reforms.
This new role assigned to the State was to be concretised against a
background of increasing short-term economic difficulties: the sharp drop in oil prices in
1986 and the growing foreign debt. Chadli refused for a long time to reschedule the debt
and instead contracted long-term borrowing in order to finance short-term loans. Soon, the
debt problem became unmanageable and Algeria turned to the IMF and World Bank structural
adjustment reforms, which implied more liberalisation and privatization, cuts in public
expenditures (civil servants, social services) and so on. In other words, it was even more
austerity and falling living standards for the Algerian people. The situation of the whole
economy had worsened substantially and, from the point of view of human development, the
new Algerian economy was a failure illustrated by the repeated social unrest and riots in
several towns of Algiers(81):
"As elsewhere in the world, economic liberalisation led to greater
inequalities of income, increasing unemployment and more obvious corruption, while cuts in
subsidies and imports were a stimulus to inflation, currency depreciation and the growth
of the black market. As elsewhere too, the consequent popular discontent while posing a
major challenge to the regimes also presented all kind of opportunities to the different
faction within them, being subject to rival interpretation and providing both reformers
and anti-reformers with political capital to be used as the situation followed."(82)
In 1990 when the Front Islamique du Salut (FIS) won the
elections and when the old guard cancelled the elections, began a period of violence,
political and social instability. Despite the civil war and popular opposition, the
attempt to liberalize and privatize the industry continued to proceed in the 1990s(83). In
1994, there had been negative growth and rising unemployment, as well as inflation
especially on the most basic products. The IMF and the World Bank increased their
"aid" with a new grant of $1.8bn and a loan of almost $300m(84). The problem of
the debt was still very worrying and despite rescheduling, it amounted to $30bn in 1995.
During the same period, the government introduced new laws for privatising the industrial
sector (ordonnances of August 1995 and March 1997)(85). Several hundreds of
industrial units were described as available for privatisation but it proceed very slowly,
notably because of bureaucratic blockage(86). As I mentioned in the introduction, the
arrival of Boutheflika at the head of the government will mean that this move towards more
privatisation will continue.
The people increased distrust against the Algerian State was symbolised
in 1990 when the Front Islamique du Salut (FIS) won the elections. The Algerian
people saw in this political party the only solution to the failure of the State in
satisfying their need and desire for political well being, economic and human prosperity.
Indeed, "the population had come to expect everything from the State that was
inaccessible under colonialism"(87), a tendency reinforced by the management by the
State of the whole society in the first decades of independence. But the failure of the
development policies and the consequent new orientations meant that: "what in the
early stages of State-building started as the étatisation of society has ended-up
two decades later looking like the privatization of the State"(88). This was
accompanied by increased violence on the Algerian people both by the military and the FIS.
This situation emphasises the crisis of the relationship between the State and the civil
society, a disaster triggered by the failure of the former to promote human development
notably industrial development. Indeed, to me, what was the feeling of some in the 1970s
is still an issue:
"Trop de contradictions sont mises entre parenthèses (...) l'Etat
tient un discours sur la société et l'interpelle alors que, précisément, (...) il est
temps que la société tienne un discours sur l'Etat et l'interpelle."(89)
After almost forty years of independence, Algeria is a
semi-industrialised country, one of the few exceptions of the African continent. This has
been achieved in spite of the extremely heavy colonial inheritance and a state of
political, economic and social decrepitude at independence and one should recognise this
performance(90). However, a critical evaluation of the role of the State in promoting
successfully or not industrial development in Algeria cannot solely focus on this fact.
As proved by the economic situation of Algeria at independence, never
did the colonial State succeed in promoting industrial development as part of human
development and it never tried to do so: the aims of the colonial State were antithetic to
those of human development.
After independence, the goals of industrial development were identified
with those of the nationalist State: to express the independence and the sovereignty of
Algeria and to be able to compete with the former coloniser. This led to the creation of
the single party regime, the concentration of the means of production in the hands of the
State and the creation of a huge bureaucratic and technocratic class, which became the
main tool of the bourgeoisie in the process of accumulating capital. The massive programme
of industrialisation launched in the 1960s and in the 1970s under State capitalism
established the base of the industry of contemporary Algeria. However, the State failed to
concretise the dream of transforming Algeria in a world-class industrialised country
capable of competing with rich countries. Moreover, in the late 1970s, Algerian industry
was inefficient and an important component of Algerian dependence on foreign economies.
But more crucial is its lack of conformity to the goals of human development. Because the
State had promoted industrial development in order to fulfil its ambitious nationalistic
goals, and because the State was controlled by a technocratic and bureaucratic class whose
link with the bourgeoisie was tight, it never assessed the needs of the civil society. On
the contrary, the State prompted the civil society to sacrifice: officially in the name of
the nation, unofficially for the sake of State capitalism.
In the last decades, the Algerian State and industry have been
undergoing great change and have had to face important challenges. The globalization of
the capitalist model of development, via neo-liberal interpretation, has been concretised
in Algeria by the transformation of the State and the adoption of a minimalist conception
of its role in regard to the economy. Therefore, the only role played by the State in
promoting industrial development consists of transferring the main responsibilities of the
development process to the private sector. The liberalization, deregulation and
privatization of the industrial sector have been initiated by the State but is not
achieved yet. So far, the effects have been disastrous, notably because private capital
showed some reluctance in investing in an inefficient industrial sector. More worrying is
the situation of the vast majority of the Algerian people who have been enjoying
continuously falling living standards since the implementation of the structural
adjustment reforms. After having been sacrificed for la grandeur de l'Algérie, the
Algerians have been sacrificed to capital especially foreign one. Once again, from the
point of view of human development, the State failed to promote sustainable industrial
development in Algeria. This failure is partly at the origin of the bloody civil war that
has killed approximately 75 000 people between 1992 and 1997(91).
This human tragedy illustrates the distrust of the Algerian civil
society towards the State, and the despise and neglect of the State towards the civil
society. As for the Algerian nation, it seems to have lost its meaning for many Algerians,
and has become an old symbol for international meeting. Algeria illustrates the
"triangular relationship between liberalization - failed State -
globalization"(92) and one of the main questions about the mandate of Boutheflika is
to know if the experienced nationalist leader will be willing to conform to this precept.
1 Jeune Afrique / L'Intelligent, nº 2057, 13-19 June 2000.
2 Symbolised notably in this last visit by the President's will to speak in Arabic in
the French Parliament.
3 UN, "Human Development Report 1999: ten years of human development", The Róbinson Rojas Archive
4 UN, "Human Development Report 1996", The Róbinson Rojas Archive (http://www.rrojasdatabank.info), 1996.
5 The bloody smashing of the Algerian riot in 1945 illustrated very well the French
position. X. Yacono, Les Etapes de la décolonisation française, Presses
Universitaires de France, 1991, Paris, p. 64.
6 B. Cubert-Afond, L'Algérie contemporaine, Presses Universitaires de France,
QSJ, Paris, 1981, p. 28.
7 A. Rouadjia, Grandeur et décadence de l'Etat algérien, Karthala, 1994,
Paris, p. 119.
8 J. Landor, "Algeria's industrialisation", Strategies for
industrialisation, South Bank University, 2000.
9 A. Ahdjoudj, Algérie: Etat, Pouvoir et Société. 1962-1965, Arcantère
Editions, 1991, Paris, p. 42.
10 Ibid. Feraht Abbas will be one of the advocates of this idea.
12 X. Yacono, Histoire de la colonisation française, Presses Universitaires
de France, QSJ, 1969, Paris, p. 81.
13 The European population constituted a dominant social group: 92.8% of senior
executives, 82.4 % of the technicians and 86% of the civil servants were Europeans. C-R.
Ageron, Histoire de l'Algérie contemporaine, Presses Universitaires de France,
QSJ, Paris, 1980, p. 78.
14 In 1954, it was estimated that the number of unemployed workers in the rural sector
was approximately one million. X. Yacono, op. cite, p.81.
15 The colonial State did not take the opportunity of the war, during which France was
unable to provide the basic products to the European population, to develop the industrial
16 C-R. Ageron, op. cite, p. 83.
17 This illustrates quite well the previous arguments that emphasise the specialisation
of the colony as a supplier of agricultural products and the lack of interest in
modernising and developing the industrial sector.
19 A. Ahdjoudj, op. cite, p. 42.
20 With the multiplication of the nationalist successes in what was to become the Third
World, the accession to independence of important colonies such as India and Indonesia in
1947, the United Nations condemnation of colonialism, and especially the anti-imperialist
rhetoric of the two super-powers of the Cold War, France's international status, a
permanent concern for the French power, appeared increasingly weakened. Moreover,
discontent and heavy criticism started to weaken the position of the colonial State at the
national level: "cartiérisme" (from the name of the journalist Cartier,
it emphasised the cost of the empire on the French taxpayer) became extremely
strong, notably after the fiasco of the Indochina war. X. Yacono, op. cite, p.
21 X. Yacono, op. cite, 1991, p. 64.
22 Described as a compromise between the desire for independence of the indigenous
people and the aspirations for integration of the "Français d'Algérie"
, the new status created two parliaments: one for the Europeans, one for the Muslims. Ibid.
23 Already in the Imperial Conference held in Brazzaville in 1944, a slight
acknowledgement of the need to develop the industry in the colonies had appeared but with
little consequences for Algeria, as I showed previously. X. Yacono, op. cite, p.
24 A. Ahdjoudj, op. cite, p. 58
26 The Suez Crisis, partly launched to impair the Algerian insurrection, had weakened
even more the international status of France.
27 Creation of 400 000 new jobs, 200 000 new habitations, redistribution of 250 000
hectares of land and universal education.
29 X. Yacono, op. cite, 1991, p. 105.
30 X. Yacono, op. cite, 1991, p. 109.
32 In 1962, after eight years of warfare and more than a century of colonial
occupation, "Algeria emerged in a state of total economic decrepitude and political
backwardness". The economic situation is catastrophic: apart from the huge material
and human destruction caused by the war, more than one million pieds noirs left
after the French defeat, living the country almost devoid of entrepreneurs, technicians,
civil servants, teachers and doctors. This massive exodus meant that most shops, factories
and farms stopped operating: 70% of the Algerian population was unemployed. J-P. Entelis, Algeria:
the Revolution institutionalized, p. 1
33 The Algerian Chart quoted in J. Leca and J-C. Vatin, L'Algérie politique:
institutions et régime, Presses de la Fondation Nationale des Sciences Politiques,
Paris, 1975, p. 35.
35 This implies that the political influence of an individual and its position
within the State depends on its commitment to the FLN, not on its competence.
36 Ibid. A point of view defended by many researchers, among them A. Ahdjoudj
and A. Rouadjia.
37 A. Rouadjia, op. cite, p. 15.
40 "La nation évoque la modernisation de la société en même temps que la
récupération de ses valeurs profondes. Au versant 'modernisation' correspond
essentiellement le nationalisme économique vivace de toutes les couches sociales: les
nationalisatisations, les sociétés nationales, les monoples d'Etat sont éprouvés comme
un progrès vers le développement rationnel de l'économie. Au versant 'récupération',
(...) on ne récupère pas seulement la terre et les moyens de production mais surtout
'l'âme' du peuple, sa langue. Les valeurs nationalistes sont particulièrement
contradictoires: éléments de modernisation, elles poussent à emprunter à l'Occident
(...) elles poussent à rejeter ce qui est inauthentique et rappelle la colonisation
(...)" J. Leca et J-C Vatin, op. cite, p. 294.
41 Samir Amin (General Editor), "Maldevelopment - Anatomy of a global
failure", The United Nations University/Third World Forum, Studies in Africa
Political Economy, The Róbinson Rojas Archive, (http://www.rrojasdatabank.info),
42 A. Ahdjoudj, op. cite, p. 31.
43 "la période 1962-1965 écrit l'histoire d'une tension entre spontanéité
autogestionnaire et contrôle gouvernemental (benbelliste)", A. Ahdjoudj, op. cite,
p. 32, also, B. Cubert Afond, op. cite, p. 5.
44 A very symbolic and efficient way to express the Algerian sovereignty.
45 B. Cubert Afond, op. cite, p. 65. This was notably because of the terms of
the Accords d'Evian, which symbolised the transfer of economic and political power
between France and Algeria and preserved the French interests It notably preserved the
rights of the French petroleum companies, perpetuated the reign of the French laws in
regard to the hydrocarbon sector and limited the Algerian sovereignty on the oilfields.
But the creation of the State company in the hydrocarbon sector, the Sonatrach, announced
the desire to go further in this direction.
46 A. Ahdjoudj, op. cite, p. 32-3.
48 A general assembly of the workers was created with important powers in regard to
the programme of production, commercialisation and investments. However, a survey revealed
that almost none of the existing assemblies enjoyed such a power. Unlike the workers, the
director of the unit, nominated by the State, enjoyed important attributions: he had a
control over the composition of the assembly, the investments and could decide to cancel
any development programme of the unit if this one was perceived as non conform with the
national orientations. The State decided of the norms of productivity, the level of the
wages and the proportion of the benefit that had to be redistributed towards the
unemployed and the poor. A. Ahdjoudj, op. cite, p. 34.
49 Samir Amin, quoted in A. Ahdjoudj, op. cite, p. 35.
51 Three different kinds of industrial units coexisted in Algeria. Apart from the
heavy public sector, the private sector occupied an important place in the economy notably
by monopolising the commercialisation and supply process. It was also dominant in the
textile industry, the chemical one and the construction sector. Multinationals were the
main types of private industry. Their position was reinforced by the advantages they
received by associating their capital with those of the State. The general bad state of
the Algerian industry reinforced the decline of the agriculture. A. Ahdjoudj, op. cite,
53 The small branches were privatised, while the dominant branches of the industry
were nationalised. In the 1970s, the Algerian State controlled the mines, the insurance
and bank sector, and especially the oil and gas production and distribution, but allowed
the private sector to invest and even to join the State to promote industrial development.
The State companies were supposed to rely on a gestion socialiste, based on the
participation of the workers but in fact the State authority was predominant. B. Cubert
Afond, op. cite, p. 68 and p. 118.
55 A. Rouadjia, op. cite, p. 122.
56 M. Stone, The Agony of Algeria, Harst and Company, London, 1997, p. 88.
57 B. Cubert Afond, op. cite, p. 70.
60 M. Stone, op. cite, p. 92.
61 B. Cubert-Afond, op. cite, p. 73.
62 M. Stone, op. cite, p. 93.
64 B. Cubert-Afond, op. cite, p. 79.
65 Y. A. Sayigh, "The Arab Oil Economy", in T. Asad and R. Owen, Sociology
of developing societies: the Middle East, Mac Millan Press, 1983, p. 40.
68 R. Owen, State, Power and Politics in the Making of the Modern Middle-East,
Routledge, London, 1992, p. 143.
69 M. Stone, op. cite, p. 94.
70 This economic liberalization was accompanied by an attempt to reorganise and
"re-invigorate" the single party and by the same token the State, without any
radical change though. R. Owen, op. cite, p. 147.
71 M. Stone, op. cite, p 94.
73 J-P. Entelis, op. cite, p. 125.
74 Construction, iron and steel and electricity State companies were also replaced by
new, autonomous and smaller units. Ibid.
75 Other measures aimed at improving the level of management training in order to
fill the lack of skilled people and wages were transformed in order to act as incentives
to production. Ibid.
76 J-P. Entelis, op. cite, p. 128.
77 Abolition of the Ministry of Planning, greater freedom to State companies managers,
and support of more competition among the State owned banks. R. Owen, op. cite, p.
78 M. Stone, op. cite, p. 96.
79 R. Owen, op. cite, p. 145.
80 R. Owen, op. cite, p. 145.
81 New African Year Book, 1999/2000, (http://www.Africasia.com/icpubs/yearbook_online/algeria)
82 R. Owen, op. cite, p. 145.
83 A new law was introduced in 1990 and paved the way for foreign companies fully to
enter the Algerian economy, M. Stone, op. cite, p. 97.
84 New African Yearbook, op. cite.
85 Dr. R. Tlemçani, "Privatisation et Nouvel Ordre Politique", World
Algerian Action Coalition, 2000.
87 H. Barakat, Contemporary North Africa: issues of development and integration,
Croom Helm, London, 1985, p. 159.
88 H. Barakat, op. cite, p. 160.
89 Annuaire de l'Afrique du Nord, quoted in H. Barakat, op. cite, p. 163.
90 Samir Amin, op. cite.
91 New African Yearbook, op. cite.
92 Dr. R. Tlemçani quoted in, B. Madani, "State, Liberalization and Rent in
Algeria", World Algerian Action Coalition, 2000.
93 Quoted in A. Ahdjoudj, op. cite, p. 31.
Table 1: Configuration of the autogestion movement in
Source: M. Laks, Autogestion ouvrière et pouvoir
politique en Algérie
(1962-1965), EDI, Paris, pp. 32-33.(93)
- C-R. Ageron, Histoire de l'Algérie contemporaine, Presses Universitaires de
France, QSJ, 1980.
- A. Ahdjoudj, Algérie: Etat, pouvoir et société. 1962-1965, Arcantère
Editions, Paris, 1991.
- T. Asad and R. Owen, Sociology of developing societies: the Middle East,
Macmillan Press, London, 1983.
- H. Barakat, Contemporary North Africa: Issues of Development and Integration,
Croom Helm, London, 1985.
- B. Cubert-Afond, L'Algérie contemporaine, Presses Universitaires de France, QSJ,
- H. Deschamps, La Fin des empires coloniaux, Presses Universitaires de France,
QSJ, Paris, 1976.
- J-P. Entelis, Algeria: the Revolution institutionalized, Westview Press, Croom
- K. B Griffin and J-L Enos, Planning Development, Addison-Wesley PoB Co., London,
- Jeune Afrique/L'intelligent, Special Edition: "Un algérien à Paris", nº
2057, 13-19th June, 2000.
- J. Landor, "Algeria's Industrialisation", Strategies for industrialisation,
South Bank University, 2000.
- J. Leca and J-C. Vatin, L'Algérie politique: institutions et régime, Presses de
la Fondation Nationale des Sciences Politiques, Paris, 1975.
- R. Owen, State, Power and Politics in the Making of the Modern Middle East,
Routledge, London, 1992.
- A. Rouadjia, Grandeur et décadence de l'Etat algérien, Karthala, 1994, Paris.
- M. Stone, The Agony of Algeria, Harst and Company, London, 1997.
- X. Yacono, Histoire de la colonisation française, Presses Universitaires de
France, QSJ, Paris, 1969.
- X. Yacono, Les Etapes de la décolonisation française, Presses Universitaires de
France, Paris, 1991.
- S. Amin, "Maldevelopment - Anatomy of a Global Failure", United Nations
University/Third World Forum, The Róbinson Rojas Archive, (http://www.rrojasdatabank.info),
- New African Yearbook, 1999/2000, (http://www.africasia.com/icpubs/yearbook_online/algeria)
- Dr. R. Tlemçani, "Privatisation et Nouvel Ordre Politique", World Algerian
Action Coalition, 2000.
- United Nations, "Human Development Report 1999: ten years of human
development", The Róbinson Rojas Archive, (http://www.rrojasdatabank.info),
- United Nations, "Human Development Report 1996", The
Róbinson Rojas Archive, (http://www.rrojasdatabank.info), 1996.