THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Algeria

Ranked 111th of 149

At a glance

Ranks

111 th on the Legatum
Prosperity Index™

116th
131st
120th
90th
53rd
60th
136th
138th
75th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Algeria performs best on Health and Safety & Security and scores lowest on the Social Capital sub-index.

Visit our Rankings table to see how Algeria compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

After war-torn Libya, Algeria has the second-largest prosperity deficit in North Africa. Algeria has brought its deficit down slightly from its peak in 2012, but it still remains larger than its 2007 level. Over the last decade, the country has made no real progress in closing this deficit.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

After the Arab Spring in 2011, the Algerian government ended a two-decade long state of emergency. A year later, as further concessions, it announced that it would introduce political and legal reforms for associations, political parties, elections, and the media. There has, however, been no meaningful reform across these areas of governance and freedom. In the Governance sub-index, the trend is not positive. Fewer Algerians have confidence in honesty of elections since 2011 and the regulatory environment has deteriorated. In the Personal Freedom sub-index, Algeria has improved relative to peers since 2012 in only two – governmental and social religious restrictions – of 12 component variables.

This stagnant state of affairs is unsurprising given the re-election of President Bouteflika in 2014. In office for 15 consecutive years, he was re-elected despite poor health and old age which has frustrated opposition parties and civil societies. Opposition parties boycotted the last election as well as the country’s ongoing constitutional reform process. Meanwhile, government continues to combat low-level unrest and tension through a combination of public consultations and short-term subsidies. While this approach has a limited life-span, it has earned Algeria a relatively high Safety & Security rank for the region and one that has been improving almost continuously since 2007.

Health and Business Environment scores (levels of Health and Business Environment) in Algeria and North Africa
Algerians enjoy a higher level of Health than their neighbours, but are held back by a worse Business Environment

The government continues to make progress on economic reforms. The Prime Minister is promoting foreign investment and bilateral trade deals, as evidenced with the Franco-Algerian cooperation and the opening of the Renault production factory in Oran. However, the public sector and hydrocarbon sector still exert a distortive force on the economy and business environment. Since 2012, Algeria has become a worse place to start a business, according to survey respondents, a worse place to get credit for a business, and has more restrictive insolvency and labour laws. Unsurprisingly, fewer Algerians believe they can get ahead by working hard. All told, Algeria’s Business Environment rank went from 100th in 2007 to 131st in 2016 – the lowest level in North Africa, after Libya.

One positive outcome of Algeria’s hydrocarbon wealth is that it enabled heavy investment in the country’s healthcare sector. Ranked 53rd globally, Algerians enjoy higher levels of health than citizens of other North African countries, placing them closer to Eastern Europe in this regard. Algeria has had a public healthcare system since 1975, with all hospital treatment, medications, and outpatient care free to Algerian citizens. Between 2010 and 2015, the Algerian government allocated nearly £5 bn for healthcare investment. This mostly funded 1,500 health facilities, the building of 10 new hospitals, and the renovation of old ones. As part of this expenditure plan, the government expects to create 58,000 jobs for nurses, doctors, and other healthcare professionals.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.