When the French left Algeria, they took with them most of the
trained European cadre and left behind an economy in a state of
chaos. The primary reason for this chaos was the lack of a trained
or semiskilled Algerian labor force. Ahmed Ben Bella reacted by
instituting a highly centralized socialist system that endowed
the government with unlimited authority either to run the economy
or to turn it over to workers' committees. These committees, which
were guided by socialist principles, proved to be totally ineffective.
Ben Bella then shifted his attention to seeking a role for Algeria
on the international stage and finding a leadership role for himself
as a voice for developing countries.
Houari Boumediene, who took over in 1965 through a military coup,
was a more pragmatic president. Boumediene's First ThreeYear Plan
(1967-69) marked the beginning of long-term development planning
in Algeria. In 1970 a newly created Secretariat of State for Planning
took over economic planning from the Ministry of Finance, underscoring
the regime's emphasis on social and economic development. The
new secretariat developed the First Four-Year Plan (1970-73) and
the Second Four-Year Plan (1974-77), which emphasized investment
in capital-intensive heavy industry at the expense of more labor-intensive
small industries that would generate badly needed employment.
The years from 1977 to 1979 were a transitional period devoted
to assessing previous development plans and devising new strategies.
The First Five-Year Plan (1980-84) and Second Five-Year Plan
(1985-89) aimed at building a diversified economy and reflected
the more moderate views of the less ideological Chadli Benjedid.
A special congress of the National Liberation Front (Front de
Libération Nationale--FLN) had selected Benjedid in January 1979
to succeed Boumediene, who had died of a rare blood disease in
December 1978. The 1985-89 plan marked a significant policy shift
by placing greater emphasis on agriculture. Benjedid's economic
liberalization also resulted in less central planning and a decrease
in government control, as evidenced by the abolition in 1987 of
the Ministry of Planning, which had earlier replaced the Secretariat
of State for Planning.
Further proof of this trend came when the Third Five-Year Plan
(1990-94) turned out to be more of a broad policy outline than
a directive plan of action. Its main objectives were to liberalize
the economy, allow more business entities to break away from the
state and become Public Economic Enterprises (Entreprises Publiques
Économiques--EPEs), and attract foreign investment.
Data as of December 1993