For about twenty-five years following its independence in 1962, Algeria made significant progress toward developing its human and physical infrastructure, as well as a vigorous and diversified hydrocarbon sector. Income and gender inequalities were reduced, and a large degree of social cohesion was attained. The yearly flow of the petroleum rent and trade protection, however, shielded the Algerian economy from the inefficiencies inherent in its central planning of resources and in the one-party political system. Large investments in industrial development did little to create a diversified and competitive industrial base, while neglecting pressing housing needs, which reached crisis proportion.

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