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.

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Source: U.S. Library of Congress