Algeria

Algeria ranks similarly on Comparative Liveability and Economic Competitiveness, at 67th and 65th respectively, registering high levels of capital per worker, and strong religious faith. However, its score is constrained by the low reported freedom of choice and poor environmental conditions.

Algeria’s economic growth is mainly driven by investments in the energy sector, and the key challenge remains the diversification of the economy to escape this extreme dependence on commodity exports. Almost 98% of exports are mineral products, which constitute almost half of GDP. The $10 billion stock of foreign direct investment is concentrated in the energy sector, although this produces an exceptionally high capital investment score for this level of Economic Competitiveness.

The effectiveness of governance and quality of regulation are also rated poorly; tax rates are high, but collection efficiency is weak, limiting government spending. Openness is low, and there are further problems with banking restrictions, corruption, and political interference in the judiciary. All these factors lead to a reliance on foreign aid.

Although mass education levels are above the regional average, enrolment rates are low and the low number of researchers suggests a serious weakness where highly-skilled workers are concerned. Public spending on education is 5% of GDP and the adult literacy rate is under 70%. Consequently, the country exports virtually no high-tech products and scores for commercialisation of innovation are poor. This does not bode well for diversification.

In terms of Comparative Liveability, Algeria ranks lowest in the region, suffering in part from low incomes. Although the violence has subsided over the last few years since the bloody civil war of 1992--99, acts of terror by militant groups still take place. The government relies heavily on the army and security services, and violations of human rights continue to occur. Perhaps unsurprisingly, Algerians report low levels of satisfaction with their freedom of choice under a repressive regime.

The implementation of the Charter for Peace and Reconciliation, which aimed to reinforce the rule of law and the government’s credibility, has had a limited impact, and a lack of social trust still reflects the disintegration caused by the civil war. A mere 11% ^w of the population believe that people can be trusted, according to the World Values Survey.

More positively among the indicators, satisfaction with personal health is high, and religious faith is strong in Algeria, with Muslims making up a significant share of the population and 98% ^w of people reporting that religion is important in their lives. However, religious organisations remain restricted, with some Islamic parties banned by the government and mosques monitored in order to prevent political activity, at the expense of both political and religious freedom. The Gallup World Poll also highlights environmental concerns, particularly in terms of the poor air quality, as being particularly detrimental to Algeria’s Comparative Liveability scores.