Poverty dynamics in Algeria

Abstract EN

This paper is concerned with poverty dynamics in Algeria Using rigorous estimates of poverty line and available consumer surveys, new poverty indicators are provided.

Oil windfalls in the context of Algeria's development strategy as well as generous social policies applied after independence, decreased poverty significantly from its pre-independence levels.

In 1988 poverty head count was reduced to 15.0 %.

However, the oil-based development strategy has resulted in an unsustainable growth path that led to the deterioration of poverty in the aftermath of the oil price collapse in 1986.

In 1995, poverty has climbed to 22% and remained there until 1999.

Even the social reforms and safety nets, applied as part of an adjustment program, did not help reduce poverty any further.

Given the significant improvement in the oil market since 1999 and under the assumption that this better economic outlook will continue over the medium term, our results show that poverty would decline rapidly to its 1988 level