Algeria: The Political Economy of Oil and Gas

Algeria: The Political Economy of Oil and Gas, by Ali Aissaoui. New York and Oxford, UK: Oxford University Press, 2001. xxiv +293 pages. Tables. Figures. Abbrevs. Chron. Refs. to p. 303. Index to p. 312. BP 29.50.

Reviewed by Bradford Dillman

This book examines changes in Algeria's oil and gas policies since independence and the dominant impact of the hydrocarbon sector on Algeria's economic development. Ali Aissaoui analyzes the constraints on policymakers from the international economy and from the structure of the oil and gas industry. He argues that the struggle for power and patronage in Algeria has revolved around hydrocarbons policies shaped by the interaction of government institutions, international oil companies, and Sonatrach, the national oil giant. Algeria has faced many setbacks in its efforts to "sow the petroleum." After more than a decade of violence and economic hardship, the government faces a daunting task in trying to reduce dependence on hydrocarbons and balance the budget while at the same time rebuilding a shattered social infrastructure.

Since 1962, Algeria's dependence on hydrocarbon rent has dramatically increased. The hydrocarbon sector now accounts for 95% of exports, 60% of government revenues, and 30% of GDP (gross domestic product). High rents enabled President Houari Boumedienne to pursue a capital-intensive development strategy that President Chadli...