Algerian military spending since independence has been relatively restrained. Despite the influence of the military establishment, the government on the whole has refrained from unduly favoring defense interests over other sectors; on the contrary, it has attempted to avoid burdensome military commitments. Algeria's outlays on its armed forces, both in terms of share of gross national product and of total government budget devoted to defense, have been well below those of its North African neighbors, Libya, Morocco, and Tunisia.

The bulk of funding for the Ministry of National Defense is allocated annually from the country's current budget. In addition, an unknown amount is included in the country's capital budget. According to official Algerian statistics, funds allocated to the ministry measured in dinars  remained relatively constant through the early 1970s. Although this was a time when the country was still creating a professional military establishment and was developing its air and naval services, defense funding showed a substantial decline as a percentage of the central government's current budget, reflecting the government's preoccupation with domestic socioeconomic development.

By the mid-1970s, military spending began to rise as the country sought to improve its defensive posture and to achieve a higher level of military preparedness after the October 1973 War in the Middle East and Morocco's moves to annex the Western Sahara. According to data compiled by the United States Arms Control and Disarmament Agency (ACDA), defense expenditures continued to increase rapidly between 1978 and 1982, but fell slightly as a percentage of the government's current budget from 14.1 percent in 1978 to 13.0 percent in 1982. Military expenditures reached a high point in 1982, amounting to US$1.6 billion in constant 1991 dollars. Algeria's officially reported military expenditures consisted entirely of recurring or operating expenditures; all or most capital spending and overseas arms purchases were omitted from the reported figures. The ACDA studies added estimates covering these unreported items to the defense budget.

ACDA's statistics indicated that military spending as a percentage of central government expenditures continued to decline after 1982, reaching a low of 6.3 percent in 1985, before rising again to nearly 10 percent in 1988. Military expenditures remained at 3 to 4 percent of GNP during most of the 1980s, but tapered off sharply to under 2 percent in 1991. Military expenditures per capita were US$50 annually in 1989 and US$28 in 1991. This sum was comparable to Morocco's expenditures, whereas Libya, with a much smaller population and an unusually large military sector financed by oil exports, spent US$613 per capita in 1991. A separate study, World Military and Social Expenditures by Ruth Leger Sivard, found that Algeria's military expenditures were proportionately lower than the average of all the countries of North Africa.

Algeria has no significant arms industry, and therefore valuable foreign exchange must be devoted to the purchase of imported weapons systems. To some extent, defense costs are offset by the contribution of the military to the civilian economy. Under both Boumediene and Benjedid, the government stressed the role of the armed forces in national development. Soldiers carried out public works projects that were often managed by officers. This aspect of the ANP's mission was emphasized in Article 82 of the 1976 constitution: "The People's National Army, instrument of the revolution, participates in the development of the country and in the construction of socialism." When a new constitution was adopted in 1989, the army's role was defined in a narrower traditional form as that of safeguarding national territory.

During the War of Independence, the FLN initiated a number of projects designed to achieve for the military a degree of selfsufficiency in producing food and other basic supplies. For example, at least fifty large farms were taken from French settlers and converted to army cooperatives after the war ended in 1962. These projects supplied some of the ANP's needs and the military also profited from sales on the civilian market. The army was also involved in manufacturing and construction enterprises. Much of the construction and surfacing of a major road across the Sahara to the Niger border was the responsibility of the army, as was a notable planting project, the barrage vert, or green wall of trees, aimed at limiting the spread of the Sahara.

The army, furthermore, built low-income housing projects as well as barracks and housing for its own personnel. Since 1989, however, the army has discontinued civilian construction activities and a number of military enterprises. Some of these enterprises, including a brickworks, a wood-processing plant, and a poultry-raising business, have been transferred to public or private companies. Only certain road and railroad projects of a strategic nature have been retained.

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Source: U.S. Library of Congress