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From state capitalism to neo-liberalism in Algeria: the case of a failing state
By Stéphanie Saumon ** (July 2000)












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.


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.


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 confiscateurs"(33)

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 industrial development:

"(...) 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 popular movement.

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 agricultural sector(64).

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.


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 electronics"(76).

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 (, 1999.

4 UN, "Human Development Report 1996", The Róbinson Rojas Archive (, 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.

11 Ibid.

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 sector.

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.

18 Ibid.

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. 100-101.

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. 54.

24 A. Ahdjoudj, op. cite, p. 58

25 Ibid.

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.

28 Ibid.

29 X. Yacono, op. cite, 1991, p. 105.

30 X. Yacono, op. cite, 1991, p. 109.

31 Ibid.

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.

34 Ibid.

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.

38 Ibid.

39 Ibid.

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, (, 2000.

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.

47 Ibid.

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.

50 Ibid.

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, p. 58.

52 Ibid.

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.

54 Ibid.

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.

58 Ibid.

59 Ibid.

60 M. Stone, op. cite, p. 92.

61 B. Cubert-Afond, op. cite, p. 73.

62 M. Stone, op. cite, p. 93.

63 Ibid.

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.

66 Ibid.

67 Ibid.

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.

72 Ibid.

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. 145.

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, (

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.

86 Ibid.

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 1964.


























Cuirs, peaux




















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, Paris, 1981.
  • H. Deschamps, La Fin des empires coloniaux, Presses Universitaires de France, QSJ, Paris, 1976.
  • J-P. Entelis, Algeria: the Revolution institutionalized, Westview Press, Croom Helm, 1986.
  • K. B Griffin and J-L Enos, Planning Development, Addison-Wesley PoB Co., London, 1970.
  • 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.
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  • X. Yacono, Les Etapes de la décolonisation française, Presses Universitaires de France, Paris, 1991.


** Stéphanie Saumon is currently a PhD candidate at School of Oriental and African Studies, University of London, U.K., after completing in September 2000 a MSc Development Studies (Distinction) which included "Developing Countries in the World Economy", "The State, Civil Society and Development", and "Research Methods for Development Studies". Her dissertation for this Master ("Neo-colonialism in Francophone Africa? The role of the state in processes of foreign domination") was awarded maximum distinction. In 1998-1999 at the University of Amsterdam Miss Saumon completed a Maitrise d`Histoire (Distinction), including "Abandoning development in Africa" (Dr. Kwame Nimako). Memoire de Maitrise: research about events in May 1968 in Paris, at the International Institute of Social History (Royal Academy of the Netherlands).