Algeria 's Institutional Framework And The Country 's Challenging Business Environment

2422 Words Oct 23rd, 2014 10 Pages
Introduction
With 39.21 million inhabitants and a Gross Domestic Product of $210.2 billion in 2013, Algeria is the 8th most populous country and has the 4th largest economy within the African Continent.

Classified by the World Bank as an upper middle income country, Algeria’s economy is primarily dominated by state-entities although the country began opening up the economy to both foreign and private domestic participation in the mid-1990s.After posting low growth during the civil wars in the 1990s, the Algerian economy grew at an average of 2.72% over the past two decades, mainly attributed to hydrocarbon exports on which the economy is heavily reliant upon.

As per the Economist Intelligence Unit,(EIU) country report, rising gas production and public infrastructure investment is expected to continue serving as the main drivers of growth for the Algerian economy, forecast to grow at 3.3.% per years on average in real terms between 2015-19. However, weaknesses within Algeria’s institutional framework and the country’s challenging business environment is expected to continue undermining prospects for sustained long-term economic development. This has been reflected in the World Bank’s Ease of Doing Business Index in which Algeria fell two places to rank 153 out of 189 economies in 2013 (1=Most business friendly regulations). According to the Heritage Foundation’s 2014 Index of Economic Freedom, Algeria ranks 146, despite improvements in investment freedom and government…
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