In 1994–98, Algeria was successful in restoring macroeconomic stability and implementing structural reforms. The fiscal position deteriorated in the first part of 1999, owing to low oil prices. Executive Directors supported the reform program introduced in early 2000, and welcomed its emphasis on accelerating reform of the banking and public sector companies but stressed the need for detailed implementation plans. The economic environment should be improved to promote private economic activity, including domestic and foreign investment. The authorities are urged to accelerate trade liberalization.
Ms. Nicole Laframboise, Ms. Patricia Alonso-Gamo, Mr. Alain Feler, Mrs. Stefania Bazzoni, Mr. Karim A. Nashashibi, and Sebastian Paris Horvitz
This paper offers Algeria's recent experience with macroeconomic stabilization and systemic transformation from a centrally planned to a market economy. The analyses focuses on the period since 1994 when Algeria embarked on a comprehensive reform program that has benefitted from IMF support, first through a one-year Stand-by Arrangement, and from May 1995, through a three-year arrangement under the Extended Fund Facility. To better understand this experience, this paper provides some background information on Algeria's political history and economic developments during the period preceding the Stand-By arrangement.