Algeria's Economy: The Vicious Circle of Oil and Violence
The crisis in Algeria, now a decade old, is not merely a consequence of the interruption of the December 1991 elections by an army-backed coup to keep the Front Islamique du Salut (FIS: Islamic Salvation Front) from power. It is also an economic crisis. The same parties who have struggled over the control of the state are also plundering Algeria's resources. The military leaders manipulate the atmosphere of fear and violence to accumulate funds, especially through commissions on trade, which they use to support an extensive political patronage system that buttresses their hold on power. The Islamists use the state of emergency to fund their activities through extortion and the black market. In between, both private and public sector interests exploit the gaps in an officially sanctioned culture of corruption and profiteering to make personal gains from the privatisation process and prevent genuine competition in key sectors such as construction and pharmaceuticals. The mass of the population continues to be excluded from the benefits that market liberalisation promised.