Algeria Economy in the 1970's

Algeria Economy in the 1970’s

Algeria acquired its independence from France on July 3, 1962, after a bloody war that lasted eight years. Since 1963 it has been a presidential republic: legislative power is exercised by an assembly of 138 members, who remain in office for five years, and are elected by universal suffrage. The territory, vast 2,293,190 km 2, is divided into 15 departments in which 16,280,000 are distributed. residents (estimate June 1974). THERE. it is a member of the UN, the OAU and the Arab League. After independence, some important cities changed their name: Bougie in Bejaïa, Philippeville in Skikda, Bône in Annaba, Orléansville in el-Asnam. The Europeans, numerous in the past (1,095,000 in 1960), are now only a small minority, of which the French community (52,400 units in 1973) constitutes the most compact group. Although the health situation is not yet satisfactory, the annual rate of population increase remains very high (32.7 ‰). At least one third of the residents live in cities. Algiers, which has long since exceeded one million residents, is the undisputed pole of interests of the country as well as the capital.

Economic conditions. – The economy, which emerged from the colonial experience, was conditioned by two factors, namely: the socialist orientation of the new economic policy and the discovery of hydrocarbons in the Sahara.

In the past, agriculture was divided into two distinctly different forms of management: on the one hand the farms of European settlers (2,700,000 ha) made fertile, irrigated and cultivated according to modern mechanized technologies, on the other a large extension of poorly exploited land come on fellahs very briefly. The long period of bloody liberation guerrilla warfare led to the decimation of crops and flocks, both for the owners’ desire to divest, and for the impossibility of devoting themselves profitably to rural activities. The socialization of the farms once belonging to the Europeans, implemented in the years 1962-63, led to their conferment in self-management to about a quarter of the rural population; the remainder continued to cultivate the land according to traditional techniques. In the colonial period, agriculture represented the country’s greatest source of wealth and now the national agency of agrarian reform, which supervises the sector, tries to maintain the acquired positions. In 1970 it occupied 56% of the active population,

The cereals are extended over 3,200,000 ha, but the yield is very variable in relation to the climate. Wheat production reached in 1974 the results of the best years, reaching 17,000,000 quintals. Barley, on the other hand, remained around 5,000,000 q, a quantity lower than the average values ​​of recent years (6-7,000,000 q). The crops of the olive, fig, date palm and the orchard fuel the export to a considerable extent. The waning of French support for the Algerian market has caused serious imbalances in the wine business, which in the past was so important that it ranks third in the world ranking of the sector. Despite massive Soviet imports, the pace of production also decreased from 18,000,000 hl in 1959 to 7,400,000 hl in 1974. The negligible internal demand for wine, the consumption of which is forbidden to Muslims, makes local producers entirely dependent on the foreign market. Forests occupy 1% of the country’s surface. In 1974 they supplied 1,424,000 m3 of lumber. Cork (10,924 t in 1970) is partly exported. Breeding marked a clear improvement only for sheep, passing from the average value of 5,732,000 heads in the period 1958-61 to that of 8,100,000 in the period 1970-74. For the rest there were no particular variations compared to the past: in 1974 there were 2,400,000 goats; cattle 950,000, equidae 675,000, camels 190,000. With the French departure, the breeding of pigs was then almost abandoned, whose meat the Koran forbids the consumption of. Fishing initially suffered from the exodus of Spaniards and Italians, who were particularly active in the sector in the past, but in the last decade there has been a notable recovery; in fact in 1974 it reached 35,758 t of catch.

According to Ebizdir, the “Constantine Plan” elaborated belatedly (in 1958) by the French to provide the necessary impetus to the Algerian industry, did not achieve the expected results due to its coincidence with the bloody epilogue of the colonial adventure. With independence acquired, new economic policies led to the nationalization of mines (French and Belgian in 1966) and of companies for the production of chemical fertilizers and building materials (1968). In 1970 the first four-year economic development plan was launched in which foreign companies also collaborate. In 1971 there was a serious crisis in the oil sector, controlled mainly by French companies, due to the decision of the Algerian government to take over direct management through drastic nationalizations. L’ Sonatrach, a state-owned company, of the majority shareholding in the sector. Oil production, which in the meantime decreased by 23%, was thus able to resume its usual pace, without however achieving the hoped-for progress, despite the stimulus exerted by the world energy crisis of 1973. In 1974 there was even a decline in production compared to to previous years. The availability of iron ore is enormous (3,132,000 tons extracted in 1973 against 1,204,000 in 1958). The production (in 1973) of zinc (14,400 t), lead (3720 t), copper, antimony and manganese is also significant. Coal is present to a modest extent; in 1964 the extraction from the Colomb Béchar mines stopped, which had become too expensive. Important are the phosphates (608,000 t in 1973) of Gebel Onk, actively cultivated after exhaustion of those of Kouif. However, the strengths of the extractive industry are hydrocarbons, unknown only 20 years ago in Algeria: oil (Hassi-Messaoud field) with 48,096,000 tons of crude extracted in 1974, and natural gas (Hassi fields) R’Mel) with 4,740,000,000 m3 extracted in 1973. The production of electricity (83% of thermal origin) is also increasing, reaching 2,376 million kWh in 1973, and of cement (1,007,000 t in 1973), both indicative of promising development. From independence onwards the Algeria has endeavored to set up an industrial apparatus in step with the times. Thanks to the incentives of the four-year plan, metallurgical (el-Hadjar), refining (Algiers, Skikda, Hassi-Messaoud), liquefaction (Arzew, Skikda), chemical (Arzew), and also textile, food and pharmaceutical plants have recently arisen.. The handicraft that boasts an ancient tradition of notable artistic workmanship, is always active in the processing of jewels, ceramics and carpets (Tlemcen), and allows not negligible income of precious coins.

The search for equilibrium in the trade balance has imposed rigorous austerity in the consumption of consumer discretionary goods of foreign origin. Alternatives to the restricted colonial market in the past have been achieved through trade agreements with the countries of the Eastern European bloc. 54% of imports and 42% of exports, however, take place with France. Federal Republic of Germany, the USA and the USSR are the other countries most actively linked to Algerian trade. The largest exports concern oil (66%), fruit, natural gas (contracts with the USA, United Kingdom, Spain, Belgium, France, Federal Republic of Germany), legumes, cork and wine. Imports are mainly directed towards industrial finished products, then agricultural and food products. In 1973 they reached a volume of spending equal to 2,338,000,000 dollars, against exports for a total of 1,802,000,000 dollars. Tourism and emigrant remittances (382,000 in France alone in 1973) concur to heal the balance of payments.

Alongside an efficient road and rail system, which covers the northern section of the country, an important network of methane and oil pipelines – many of which built by Italian companies – has been built for the transport of hydrocarbons from the extraction wells of the Sahara at ports of embarkation or refining or liquefaction plants. Thus, oil pipelines between Hassi-Messaoud and Bejaïa (ex Bougie) are in operation; between the wells of Zarzaïtine, Edjeleh, Ouan Taredert, El-Abed Larache, Tin Fouyé, Tiguentourine and the Tunisian port of La Skhirra; between In Amenas and Hassi-Messaoud; between Hassi-Messaoud and Arzew; between Haoud el Amra and Skikda (ex Philippeville). Gas pipelines connect Hassi R’Mel to Skikda. The most active ports are those located at the two oil pipeline terminals: Arzew (20.141. 000 t of goods loaded in 1970) and Bejaïa (16,683,000 t). However, Algiers remains the largest port of call for passenger and various goods traffic (2,256,000 t embarked and 4,240,000 t landed in 1970).

Algeria Economy in the 1970's