Globalization and
economic change in Algeria: from industrialization to deindustrialization
Omar
Chaoura Bourouh
University of Windsor
Windsor Canada
This short paper attempts to briefly address
globalization as a continuing historical process in which capitalism, through a
variety of ways, expanded to the Third World. Using Algeria as a case study, we
will argue that the expansion of capitalism (globalization) has resulted in
economic as well as socio-political changes. The consequences of these changes
are complex social problems that need to be addressed.
As a post-colonial country, Algeria embarked in the
1960's and 1970's in a "socialist" development program led by the
state. This process resulted in the formation of one of the largest state
industrial sectors in the third world. This strategy of development, that led to
a major social transformation, has always been influenced by international
capitalist market relations which gradually shaped the Algerian
"socialist" development experience to become part of the new
international economic order, thus playing a role in the globalization process.
Globalization as a long historical process
By globalization it is meant the historical process of
the internationalization of manufacturing, trade and services led by
transnational corporations. It is a process driven by the pursuit of cheaper
labor, raw materials, and less government regulations. Despite this seemingly
economic character of globalization, it would be naïve to ignore the tremendous
cultural impact of globalization (through trade, communication and
transportation) on the Third World, from replacing the traditional ways of
production to
creating a new consumerist behavior. This process of
globalization is a long historical process and is not a contemporary phenomenon
as some may contend. What we see in the current situation is a result of
successive efforts of the West to "globalize" the world economically
and culturally.
The industrialized capitalist countries have never
ceased to influence the development process of the third world countries. They
have been, during the cold war trying to reverse the claimed socialist
experiences. Several methods have been used after WWII to push for a capitalist
development:
The role of international capitalism is essential in
the industrialization of even those countries that chose socialist development
since, then, the "socialist bloc" was unable to provide all the
material and technical means of development. Speaking of China's need for
foreign capital, Mao Tse-Tung stated in 1956: "without foreign aid, and
imagining that we can count on our own resources, we will never make
it".(1)
By providing various means of development, advanced
capitalist countries are, in fact, transmitting to the third world the image of
Western economy. This image is shown through several factors that directly or
indirectly contribute to economic globalization.
Among these factors we can cite the various
publications and research studies that discourage state planning and direct
involvement in the economy while at the same time
encouraging privatization and free trade. There is
also the technology factor, the so-called "transfer of technology".
Technology not only embodies scientific knowledge but also cultural values and
ideology. The fact that most of development technology comes from the West
produces a notion of the technical superiority of capitalist production methods.
Industrialization, thus, became a process of imitation of the western way of
production and consumption. "Through the effects of imitation", says
Bishara Khader, a Palestinian economist, "men and societies tend to
reproduce consciously or unconsciously the image...of the industrialized
societies".(2) We can also cite the pressure used by international
financial institutions on states to invest in profitable business or make
certain economic reforms. These efforts have finally paid off in Algeria since
late eighties.
From Industrialization to deindustrialization
The economic crisis of the 1980's and particularly the
riots of October 1988 had resulted in restructuring political and economic life
of Algeria. Politically, the state ended the one party rule and adopted a
multi-party system that would "democratize" political life.
Economically, financial difficulties have led to major cuts in the budget and
certainly in the share allocated for investments and maintaining economic
growth. Faced by growing social problems (unemployment, housing shortages,
inadequate infrastructure...) and the disenchanted population, the state
policies turned to the private sector (foreign and local) for investment in an
effort to revive economic growth. The state, under pressure from international
financial institutions (the IMF, The World Bank), has been increasingly
disengaging in direct economic development by privatizing major state owned
enterprises. During the 90's for example, 70 major national enterprises and 700
local enterprises were dismantled. This of course resulted in a dangerous
increase of the already high unemployment rate (30% according to official
estimates, the highest in fifty years). More than 400 000 jobs were lost within
the last three years alone because of economic restructuring and tens of
thousands of young people dropped out of school before completing high school.
These conditions have led to acute poverty and a sharp increase in crime and
violence.
What's to be done?
What can you expect from a failed industrialization
that promised a better and prosperous future for the people? The outlet to a lot
of the young people is either emigration or deviant and criminal behavior. They
turn, using Robert Merton theory of deviance, into innovators who try to achieve
their goals through illegal means.
I believe that Algeria and other Third world
countries, while certainly were the subject of tremendous economic and political
pressure from the industrialized capitalist world, have played a role that
facilitated the process of globalization to their disadvantage for a simple
reason that they failed to promote individual initiative and encourage civil
society to play an active responsible role in development.
If we believe that perhaps the positive economic
result of globalization is direct investment, and thus creating employment
opportunities, then this doesn't seem to be the case for Algeria. Apart from oil
production in the remote desert areas in which oil companies invested
aggressively and function in secure and stable environment with some autonomy,
other direct industrial investments in the country have not taken place in a
meaningful way because of corruption, lack of sufficient infrastructure and
bureaucratic red tape. The latest report (July 2003) of the Fraser Report, which
ranks the countries of the world in terms of their 'success" in free trade
and globalization, ranked Algeria among the lowest in that scale because of too
much government regulations and reckless government spending.
The state in Algeria took on the historic
responsibility of directly engaging in development and became as Henry and
Springborg called it one of "praetorian republics ruled from bunkers by
political military elites".(3) As a result, the economic development failed
to achieve its objectives and civil society was weakened which led to the
"brain drain", labor migration, capital flight and social unrest
culminating in terrorism since early 1990's.
Facing tremendous economic problems and social
pressure the state abandoned this economic development strategy by privatizing
the state industrial sector in order for it to adapt to globalization and find a
place in the new global system.
What can we expect from a failed national project of
development on the one hand and globalization driven by the pursuit of profit on
the other? People in Algeria and other countries with similar development
experiences have lost faith in their own governments to address the social and
economic problems and certainly have no hope that globalization will solve these
problems. The task before us is to redefine both the concepts of development and
globalization and give them the cultural and social meaning they deserve. In
other words, we need to unravel the roles individuals (inside and outside
developing countries) and civil society institutions can play in development.
This is an enormous task that needs to be undertaken urgently if we want to
achieve better living conditions for all in this challenging global age.
Notes
(1) Arguiri Emmauel, Appropriate or Underdeveloped
Technology? New York: Wiley
and Sons, 1982), P. 32.
(2) G. Boutaleb, "Les Dangers de l'extraversion"
, Revolution Africaine, No. 890 (March
1981): 23-46.
(3) Henry Clement and Robert Springborg, Globalization
and the Politics of
Development in the Middle East, New York, Cambridge
University Press, 2001.