Algeria's New Oil Strategy
Abstract
Since the collapse of oil prices in the mid-1980s, Algeria has attempted to modify its national petroleum strategy in order to encourage foreign investment in oil and gas production. This effort was justified by a con stantly growing need for external resources to meet internal demands created by a growing population and to defray the increasing budgetary deficit in the public sector. In this chapter I will attempt to show that the contradictions of the Algerian economy and the rentier state are po litically sustainable only if the state attracts a certain level of external resources. These external resources are required to import food and semi finished products needed for industry. The new petroleum strategy thus stemmed from the necessities of the Algerian political-economic system and was not an expression of any basic change in the political orientations of the regime. To meet my objective, I must first expose the dysfunctions of the Algerian economy and show that the current crisis can basically be explained by the political system—regulated as it is by a neopatrimontal logic and by the redistribution afforded by a rentier state.
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