The Importance of Privatisation in Algeria in Regulating Free Competition to Confront Contemporary Global Transformations

https://doi-001.org/1025/17671639633002

1-NADIR GUEMRA

Professor at Department of Low, University of M’sila, Algeria,

E-mail:nadir.guemra@univ-msila.dz

2-ASMA KHARKHACHE

Professor at Department of Psychology, University of M’sila, Algeria,

E-mail:asma.kharkhache@univ-msila.dz

3-SAMIA KHARKHACHE

            Professor at Department of Commercial scinces, University of M’sila, Algeria,

E-mail:samia.kharkhache@univ-msila.dz

4- FATTOUM BELKOBBI

Professor at Department of Media and Communication Studies, University of M’sila, Algeria,

E-mail:fattoum.belkobi@univ-msila.dz

Received: 05/09/2025                   Accepted: 10/11/2025              Published: 30/12/2025

Abstract

     Since the mid-1990s, Algeria has adopted privatisation as a significant economic reform within a broader series of state-led reforms, considering it an entry point into the global capitalist economy promoted by international institutions and closely linked to the principles of the market economy. This policy has resulted in opening the economy to the private sector and establishing mechanisms for regulating free competition.

     In order to confront contemporary global transformations, the Algerian state has worked to establish a legal framework governing competition, particularly through the creation of the Competition Council and the strengthening of its role in combating monopolistic practices and ensuring market integrity. This regulatory framework aims to improve institutional performance, attract investment, protect consumers, and achieve economic efficiency as a foundation for sustainable development.

     Moreover, in response to ongoing global transformations, the state has adopted a specific strategic approach based on economic diversification, reducing dependence on hydrocarbons, supporting foreign direct investment, developing manufacturing industries and renewable energy, and orienting the economy towards knowledge-based activities and start-ups. These measures have been accompanied by the state’s continued fulfilment of its sovereign, regulatory, and social responsibilities, ensuring a balance between market freedom and the protection of the public interest. Collectively, these policies have enabled Algeria to achieve positive integration into the global economy.

Keywords

Privatisation; Private Sector; Free Competition; State Power; Global Transformations.

Introduction

After decades of state dominance and control over the economic sector—particularly in the aftermath of the Second World War in developed countries—the role of the state expanded significantly. This extensive intervention was primarily aimed at rebuilding national economies devastated by the war. It took shape mainly through the nationalisation of private economic enterprises, coinciding with the emergence of theories explaining the rise of the welfare state, which advocated state intervention in the economy through public enterprises in order to achieve social justice. Consequently, the state broadened its scope of activity and became increasingly involved in economic and social affairs to safeguard the public interest.

However, by the early 1980s, this model began to reveal its limitations. Public economic enterprises experienced declining performance and a lack of efficiency, which paved the way for the emergence of a new economic policy embodied in privatisation. This policy was designed to address the structural imbalances resulting from the dominance of the public sector over economic institutions. The United Kingdom was the first to adopt this approach, followed by other developed countries such as France, Italy, Spain, and Canada.

As a result of the relative success of privatisation policies in achieving economic growth, improving service quality, increasing profitability, and expanding employment opportunities in these countries, their influence extended during the early 1990s to Eastern European states and developing countries, including Algeria*.

 In this context, privatisation came to be regarded as a key instrument of economic reform, based on the transfer of ownership of inefficient and uncompetitive public enterprises to the private sector, with the aim of enhancing economic growth, improving institutional efficiency, attracting investment, and reducing the state’s financial burden.

In Algeria, the importance of privatisation lies in the fact that the legislator established a coherent and structured legal framework for privatisationprogrammes beginning in the mid-1990s. This framework was intended to protect the national economy and organise the market within a competitive environment, whereby state intervention is limited to guidance consistent with its economic and social policies. At the same time, keeping pace with contemporary global transformations has reinforced the role of the state as a regulator and organiser, enabling it to ensure the success of the privatisation process while focusing on other strategic responsibilities.

This raises a central question: to what extent does privatisation, in light of ongoing global transformations, enable the state to assume new roles while leaving economic initiative to market actors within a free economy based on competition? Furthermore, what functions does the state perform that enhance its organisational capacity and strength?

To address these questions, it is necessary to shed light on the nature of privatisation, the conditions surrounding the emergence and internationalisation of this concept, and its promotion as a global policy advocated by international financial institutions. These institutions promote privatisation as a means of transferring ownership of public assets and enterprises to the private sector in order to increase efficiency, stimulate competition, ensure service quality, and reduce prices among economic operators.

To ensure a comprehensive analysis of these aspects, this article is structured into four primary sections as follows:

Section I: The Concept of  Privatisation

Section II: Privatisation as an Entry Point to the Global Capitalist Economy

Section III:Privatisation in Algeria as a Mechanism for Regulating Free Competition

Section IV: State Capacity in Confronting Contemporary Emerging Challenges

Section I: The Concept of Privatisation

Before addressing the definition of privatisation and determining its substance, it is necessary to shed light on the circumstances surrounding the emergence and internationalisation of the idea of privatisation, as follows:

1. The Idea of  Privatisation: Its Emergence and Internationalisation

The idea of privatisation, as well as the manner of its emergence and internationalisation, is the result of the extensive intervention of the state in developed countries within the economic sphere, particularly after the Second World War and during the sixth and seventh decades of the twentieth century.

State intervention was exercised through its financial institutions in order to prevent the occurrence of social and economic crises. This intervention was carried out through economic planning, which is considered one of the most important functions of the state, regardless of whether the society adopted a capitalist or socialist system. During this period, the state acted as the main driver of the economy, and its activities expanded significantly, particularly in the social and economic fields, including public investment, planning, taxation, and social legislation. All these activities entailed substantial costs and burdens on the state budget and the economy as a whole. As a result of comprehensive state support, governments became unable to sustain these burdens, especially during the economic crises of the 1970s.

With the beginning of the 1980s, a new phase emerged marked by the search for a different role for the state in economic activity. A new idea appeared within the framework of an economic policy that differed fundamentally from the previously prevailing approach, aiming to reduce the burden on the state by redefining its role in economic activity. This new economic policy was embodied in the policy of “privatisation”.

The emergence of the idea of privatisationwas based on a growing conviction that state intervention through the public sector lacked the required level of efficiency, despite the facilities granted to public enterprises. This inefficiency was attributed to administrative corruption, the increasing financial burden of funding public institutions on the public treasury, which led to significant balance-of-payments deficits, and a decline in economic growth rates.

The government approaches previously adopted in most countries proved unsuccessful, resulting in a continuous deterioration in their economic performance. This failure can be attributed to several factors, including:

  • The rigid administrative mentality prevailing in the public sector, characterised by repetition and a lack of renewal and innovation.
  • Insufficient managerial competence among human resources in the public sector, combined with the absence of adequate incentives.
  • The lack of encouragement for entrepreneurial initiative.
  • The failure of economic institutions to take appropriate, flexible, rapid, and independent decisions.

This failure led many countries to change their patterns of economic performance in line with the principles of the new economic policy oriented towards privatisation. These principles were largely derived from private-sector practices, including (Al-Nashef, 2000):

  • Consumer Protection (Consumerism): a principle based on safeguarding citizens’ rights vis-à-vis the state and large public or private companies, particularly their right to quality and security in all areas of public services and products.
  • Deregulation: a principle initiated by the United States in the telecommunications, aviation, and banking sectors in the early 1980s, and later extended to Japan, France, and other countries. It aims to reduce legal constraints as much as possible, thereby allowing individual initiative to contribute more effectively to the public interest and enabling domestic and international competition to play a greater role in delivering better services at lower prices.
  • Globalisation: a phenomenon that has almost transformed the world economy into a single market, whereby major corporations treat global markets as a unified production and marketing space.
  • Free Trade: a phenomenon that has opened global markets to large corporations, effectively turning them into a single market and leading to the erosion of economic borders between states, except for certain remaining regulatory measures.
  • Anti-Trust and Anti-Monopoly Laws(Cartel)*, along with Fair Trading regulations, and all related measures aimed at promoting competition, breaking monopolies, or limiting speculative commercial practices.
  • Anti-Corruption Laws: to the extent that recent reports by United Nations development institutions have proposed the establishment of a global organisation to combat corruption and issue country-specific reports (similar to Amnesty International), given the significant negative impact of corruption on economic growth and the equitable distribution of national income.

Based on the new conception of the state’s role, and in harmony with these emerging economic principles, most countries amended their economic and social legislation, beginning with the United Kingdom and France, followed by the United States, Japan, and Germany, with the aim of improving the quality of public services and reducing public-sector losses. In light of the success of these reforms in the aforementioned countries, developing states became fully convinced of the necessity of adopting similar approaches.

2. The Definition of Privatisation

At the beginning of the 1980s, the new economic policy represented by privatisation became a central topic of debate in most countries of the world, whether developed or developing. The term was translated into Arabic using several equivalents, the most prominent of which include privatisation, specialisation, allocation, individualisation, transfer, and communalisation, all of which refer to the English or French economic term Privatisation*, which first appeared in 1983 in Webster’s Dictionary**, during the Thatcher era in the United Kingdom.

Since that time, privatisationhas been defined in multiple ways depending on prevailing intellectual and philosophical orientations. Consequently, the meaning of the concept varies from one context to another and from one country to another.

a. The Narrow Concept of Privatisation: This is the most widely used concept and refers to the sale of public enterprise assets to individuals or private companies, whether partially or entirely. In this sense, privatisation represents the opposite of nationalisation, as state-owned public enterprises are transferred to the private sector, whether domestic or foreign. The primary objectives of this approach are to reduce public expenditure, enable governments to focus their efforts on activities more beneficial to society, and create a competitive environment among different economic sectors.

Some define privatisation as the transfer of ownership of a project from the public sector to the private sector (Al-Kurdi, 1998, 11). Others describe it as the transformation of public ownership into private ownership through management contracts, leasing arrangements, partnerships, or sale and purchase transactions, in various economic activities and public service sectors (Al-Abdullah, 1999, 47).

Based on these definitions, the narrow concept of privatisationis fundamentally linked to the transfer of ownership from the state to the private sector.

b. The Broad Concept of Privatisation:The broader and more comprehensive concept of privatisation refers to increasing the effectiveness and role of market forces, or strengthening free market economies. In other words, privatisation entails removing constraints related to efficiency in public-sector enterprises and transforming them into incentives for the private sector, which necessarily involves limiting the role of government and its economic policies (ESCWA, 1999, 5-4).

Another perspective defines privatisation as the disposal of public enterprises, whether through the sale of state-owned shares in capital, or through the sale of productive assets such as real estate and equipment owned by these enterprises. It is further argued that privatisation constitutes an integral component of a comprehensive structural adjustment programme aimed at restructuring the national economy, particularly by redefining the state’s intervention in production sectors.

Accordingly, the broad concept of privatisation does not necessarily involve the transfer of public ownership to private ownership; rather, it may involve the transfer of management responsibility in order to achieve efficiency. Privatisation is therefore a means rather than an end, and not an objective in itself. Its general aim is to create an economic structure characterised by efficient enterprises capable of producing high-quality goods and services at lower real prices, thereby benefiting society as a whole.

c. The Political Concept of Privatisation: “Economic Democracy”:Privatisation grants greater freedom in the management of enterprises by liberating them from political pressures. Under state ownership, governments intervened as owners in appointing senior management, making investment decisions through boards of directors, setting prices, and designing marketing and distribution policies. (Abu Awaja, n.d., 196-209).

Today, the political concept of privatisationis embedded within liberal legal and ideological values that have acquired global legitimacy, similar to the democratic principle and the market economy model. Within the framework of the internationalisation of liberal law, which increasingly tends to replace national legal systems, privatisation raises the issue of the state’s withdrawal from the economic sphere.

At the political level, privatisation seeks to put an end to political discrimination between the public and private sectors and to challenge the ideological notion that considers the private sector merely complementary to the public sector. Accordingly, privatisation constitutes a mechanism for limiting monopolistic and bureaucratic practices in economic activity.

The expected objective of privatisation is thus the state’s withdrawal from direct economic management and its relinquishment of its traditional roles as owner, manager, and regulator of market-related activities (Al-Abdullah et al., 1999, 374).

From a political perspective, the new economic policy embodied in privatisationcan be better understood as a political phenomenon rather than merely a technical adaptation to changing circumstances or the application of an economic theory.

Privatisation often takes the form of a strategy for reorganising institutions and decision-making processes in a manner that prioritises the objectives of certain groups over the competitive aspirations of others, rather than representing a neutral choice among policy instruments designed to achieve clearly defined and socially recognised objectives.

Conclusion:Based on the above, the new conception of the state’s role under privatisation is consistent with emerging economic principles within the context of the global democratic wave. Through this framework, most countries revised their economic and social legislation—beginning with the United Kingdom and France, followed by the United States, Japan, and Germany—with the aim of improving the quality of services that had long been monopolised by public institutions. In light of the success of these new principles in the aforementioned countries, developing states became fully convinced of the necessity of adopting them in order to keep pace with global economic transformations through the enactment of new legislation consistent with privatisation policies.

Section II: Privatisation as an Entry Point to the Global Capitalist Economy Competition

Based on the diverse definitions of privatisation policy offered by various thinkers and researchers in this field, it can be argued that the motivations for adopting privatisation differ from one country to another. Some consider privatisationto be more suitable for developed countries than for developing ones, given that the latter face a difficult equation: balancing ambitious and unlimited objectives against limited resources(Sharif, 1997).

Others argue that privatisation, particularly in developing countries, constitutes an entry point for the global capitalist economy into these national economies, with the aim of integrating them—and, in some cases, subordinating them—to the economic, political, and cultural policies of capitalist states*. This view is based on the premise that privatisation is closely linked to the political influence of capitalist countries, exercised through pressure from international financial institutions such as the International Monetary Fund and the World Bank, which impose the adoption of this policy as a condition for granting loans.

However, another perspective holds that the reasons and motivations behind privatisation stem primarily from the failure of the public sector to achieve development objectives, as well as from a noticeable slowdown in economic growth rates (Al-Najjar, 1988, 18), which resulted in serious economic and social problems. Consequently, advocates of privatisation do not limit their arguments to purely economic justifications, but also extend them to include external motivations, as will be discussed below.

Across the world, and particularly in developing countries, privatisation policies have been associated with a broad ideological and promotional campaign aimed at restructuring and reorganising the existing economic sector. This campaign has been justified by reference to the economic crises caused by the inefficiencies of the prevailing systems.

1. The Internationalisation of the Economy and the Role of International Financial Institutions

The call for privatisation spread from advanced industrial countries to developing countries through the transfer of values and ideas. Privatisationwas imposed on developing countries by international financial institutions as a prerequisite for obtaining loans and financial assistance, particularly within the framework of financing structural adjustment programmes by the World Bank, the International Monetary Fund, and both official and private Western funding sources.

The Policy of International Financial Institutions:International financial institutions, especially the World Bank and the International Monetary Fund, have used external debt as a tool to compel developing countries to adopt structural adjustment policies. These policies are designed to facilitate the transition to a market economy and the adoption of privatisation within the framework of economic reform programmes based on the principles of market economics and competition.

These institutions have regarded privatisation as a partial or complete withdrawal of the state from economic activity and as the central pillar of structural adjustment policies (SAPs).

Through the structural adjustment programmes imposed by international financial institutions, stability is expected to be achieved at the microeconomic level through the privatisation of small and medium-sized enterprises and the enactment of laws that define, encourage, and develop private ownership. At the macroeconomic level, stability is pursued through the privatisation of the financial sector and large public enterprises.

2. Privatisation as an Ideological Choice or an Alternative for the Developing World

Although the mechanisms of privatisation also operate in developed countries, privatisation in this context represents merely a strategic response to the global economic crisis of the 1980s, when economic growth rates declined to critical levels and the problem of Third World debt intensified*. This was accompanied by policies aimed at reducing budget deficits and trade imbalances in national economies.

The reliance on this option reflects the underlying rationale of the global call for privatisation and explains why there has been—and continues to be—an attempt to internationaliseprivatisation policies through direct pressure from international economic institutions, particularly the International Monetary Fund. This effort has been actively supported by the United States, especially through the U.S. Agency for International Development*, as part of a broader strategic approach** aimed at strengthening economic power and positioning states higher on the global economic hierarchy (Al-Abdullah et al., 1999, 152).

3. The Success of the American Strategy

The success of the American strategy in imposing its imperial dominance—economic, military, and political—on the world can be attributed to its ability to impose its vision of a new world order based on unipolarity, replacing the bipolar system established under the Malta Agreement of April 1945(Bahloul, 1994, 6).

In implementing this strategy, the United States, in coordination with member states of the Organisation for Economic Co-operation and Development (OECD), particularly Western European countries, relied on economic dynamism and employed three main instruments:

a. The Instrument of Imbalance in the Socialist Bloc:This instrument was based on the deepening imbalance between economic dynamism and social dynamism within socialist countries. This imbalance resulted from the failure of the socialist mode of production to introduce appropriate changes in production relations.

b. The Instrument of International Institutions: This instrument involved international institutions, particularly the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD), and the World Trade Organization (WTO). Since the 1970s, policies were pursued to amend the operational rules of these institutions. Amendments to the IMF’s governance rules were introduced in April 1978, while similar changes were made to the General Agreement on Tariffs and Trade (GATT) in 1974. These adjustments were particularly significant for developing countries, which suffer from underdevelopment and external indebtedness.

c. The Instrument of Debt(World Bank, 1984, 17): Debt served as a mechanism that divided the world into two blocs: creditor countries, represented by capitalist states, and debtor countries, represented by Third World states. The latter have been unable to finance development and have remained trapped in economic crises, making them the subject of various theoretical approaches advanced by creditor states, their governments, and international institutions in the form of recommendations or conditions for overcoming these crises, including(Bahloul, 1994, 6):

  • The Baker Plan (James Baker): which called on developing countries to implement reforms aligning them more closely with market rules, while encouraging international private banks and financial institutions to increase lending in order to stimulate growth.
  • The Bradley Plan (Bill Bradley): proposed during the 1986 New Jersey scenario, which advocated that development banks support growth through annual lending and the organisation of international summits on trade and debt, under the auspices of the International Bank for Reconstruction and Development, to evaluate reform efforts.
  • The Policy of the International Monetary Fund: which links financial assistance and access to international private financial institutions to the implementation of economic reform programmes based on market economy principles.

4. The Globalisation of the Economy

Since the collapse of the socialist bloc in 1989, a new era has emerged, characterised by the dominance of private ownership, the re-evaluation of market laws, and the reorganisation of production systems on a global scale according to the logic of profit.

These ideological and economic transformations contributed to the emergence of a new global vision following the Malta Summit of 1989, which led to the establishment of the framework of the new world order in 1990, proposed by U.S. President George Bush. This order was to be based on the market economy and the creation of strong external economic relations, such as the European Economic Community and the North American Free Trade Agreement (NAFTA), in accordance with the new rules of the single global market.

According to Renato Ruggiero*, former Director-General of the World Trade Organization (WTO), “the more global economic activities become, the more they require global rules. WTO rules constitute reference points for the global economy; without rules governing trade, the resulting chaos leads to conflict(Le Figaro économique, 1995).”

According to Riccardo Petrella, new legal rules are gradually imposing themselves on humanity as a whole, encompassing five fundamental principles(Petrella, 1995):

  • The promotion of economic globalisation, or the establishment of a global economic state.
  • The production of scientific and technological wealth, particularly in information and communication technologies, which are fundamentally transforming human conditions and giving rise to new institutional forms.
  • The liberalisation of global markets in order to create a unified global economic space.
  • The necessity of reorganising economic management and governance, whereby the state no longer sets principles and standards of operation, leaving this role instead to producers, consumers, and financiers, while limiting itself to creating an environment conducive to enterprise activity.
  • The encouragement of privatisation and the promotion of private-sector participation in significant segments of the economy, requiring enterprises to develop strategies for production, marketing, advertising, and competition, while adapting public institutions to the rules of the global economy, which necessitates the state’s withdrawal from productive sectors and public ownership.

Section III: Privatisation in Algeria as a Mechanism for Regulating Free Competition

Free competition constitutes one of the fundamental requirements of a free-market economy. In light of the dynamics of the global economy and the promotion of competition policies, most markets have come to be characterised by imperfect competition, taking various forms such as disguised monopolistic competition. This situation has necessitated the search for solutions capable of activating and regulating competitive activity through legal rules governing market behaviour. However, before addressing this issue, it is essential to examine the concept of privatisation in Algeria and the legislation regulating it, as privatisation has opened the way for competition between public and private economic operators alike, within a legal framework designed to prevent monopolistic practices.

1. The Idea of Privatisation in Algeria

The adoption of privatisation in Algeria resulted from the persistent failure of public economic enterprises, which had become a heavy burden on the state budget, as well as from the inability of the centrally planned economic system to achieve economic development. This failure was largely due to excessive state intervention in economic activity, in addition to global transformations across various fields and a shift in ideological thinking towards market forces.

Algeria and its public enterprises underwent several reform phases. Following the period of socialist management, which was marked by poor governance and institutional inflation, a process of organisational and financial restructuring was initiated, leading eventually to enterprise autonomy. This evolution prompted reflection on abandoning the directed economy and gradually transitioning towards privatisation.

At the beginning of the 1980s, Law No. 81-01 of 7 February 1981 was enacted, allowing for the transfer of ownership of real estate assets that had entered into exploitation prior to January 1981. This law was amended in 1986 by Law No. 86-03 of 4 February 1986, which expanded the scope of transfer to include assets exploited from 1981 onwards.

In 1987, Law No. 87-19 relating to public agricultural exploitation was issued, under which self-managed agricultural enterprises were dismantled into collective and individual farms.

In 1988, privatisationwas extended to the petroleum sector, initially in an unregulated manner, before accelerating under the pretext of settling external debt (Ben Achenhou, 1992, 85). During this period, Sonatrach concluded several contracts with foreign companies for exploration, with production-sharing arrangements in cases of discovery and exploitation(Ben Achenhou, 1992).

In the same year, Law No. 88-01 concerning enterprise autonomy was adopted, followed by Law No. 88-02 on planning and Law No. 88-03 on participation funds. All of these measures constituted forms of privatisation. This process culminated in the Constitution of 23 February 1989, whose Article 18 defined state public and private property and institutionalised political openness and economic liberalisation.

With the advent of the 1990s, Law No. 90-10 relating to money and credit was enacted, establishing the independence of the central bank, creating the financial market, and activating relations between commercial banks and economic enterprises. In 1993, Law No. 93-10 relating to the stock exchange was issued, marking the beginning of genuine privatisation.

It should be noted that privatisation is not entirely new to Algeria. The private sector was never completely absent, but rather marginalised in terms of resource allocation due to the economic model adopted at the time, whereby the public sector received the largest share.

In principle, the private sector was intended to operate alongside the public sector, as reflected in legal texts and political decisions, including Ordinances No. 67-24, 69-38, 75-58, and 75-59, as well as Law No. 80-11 and the decisions of the Fourth Party Congress and the Extraordinary Party Congress. These texts addressed the role and position of the private sector in the national economy. They were subsequently amended by Law No. 82-11 relating to national private economic investment, which aimed to define the objectives of private national investment and to regulate the conditions and scope of its activities, particularly through Article 24, which granted facilities to private investors, such as access to land, equipment financing, and the supply of spare parts and raw materials (Algeria, 1982)

2. The Concept of Privatisation in Algeri

Privatisation in Algeria constitutes one link in a long series of economic reforms aimed at reducing state intervention in the economy and opening the way for a market economy. It has been defined as follows:

a. The Concept of Privatisation According to the Algerian Legislator:Ordinance No. 95-22 conceptualisedprivatisation in two forms. The first involves the transfer of ownership of all or part of the tangible or intangible assets of a public enterprise, or all or part of its capital, to natural or legal persons governed by private law, through specified contractual arrangements(Algeria, 1995, 3).

From this perspective, privatisation goes beyond the mere sale of assets to include the privatisation of management, whereby management is entrusted to private actors with the aim of rehabilitating the concerned public enterprises.

Ordinance No. 01-04 of 20 August 2001, relating to the organisation, management, and privatisation of public economic enterprises, partially repealed Ordinances No. 95-22 and 95-25. It introduced a new definition, transforming public enterprises into commercial companies. Article 13 defined privatisation as “any transaction resulting in the transfer of ownership to natural or legal persons subject to private law, excluding public enterprises. (Algeria, 2001, 4)”.

Under Ordinance No. 01-04, public economic enterprises became commercial companies subject to commercial law in their organisational and managerial aspects. Article 2 defined public economic enterprises as commercial companies in which the state or any public-law legal person holds the majority of the share capital, directly or indirectly.

Public enterprises may take several forms depending on the nature of their activities, including administrative public institutions, public industrial and commercial institutions, public economic enterprises, public institutions of a scientific and technological nature, and public institutions of a scientific, cultural, and professional nature.

b. The Concept of Privatisation under Algerian Economic Law:Privatisationis defined as the transfer of ownership from the state to natural or legal persons subject to private law. This transfer may involve all or part of the tangible or intangible assets of a public enterprise, or the transfer of its management through contractual arrangements specifying the modalities, conditions, and exercise of management.

Despite the diversity of interpretations, privatisation generally encompasses the following elements:

  • Denationalisation: the return of a previously nationalised enterprise or industry to private ownership.
  • Competition: the creation of an optimal competitive environment based on market rules, technical efficiency, and a liberal licensing policy.
  • Expansion of Capital Participation: encouraging external participation in capital in order to mobilise both public and private resources for strategic economic sectors.
  • Management:privatisation of public enterprise management to ensure greater efficiency, effectiveness, and performance standards.
  • Improvement of Public Service Performance: achieved through reducing state intervention and strengthening market mechanisms to enable objective evaluation of planned operations.

3. The Regulatory Framework of Competition in Algeria

The management of public enterprises, whether economic or industrial and commercial, underwent significant transformation in the late 1980s, following the state’s abandonment of the directed economy and its adoption of a market economy under the 1989 Constitution. This shift required opening competition to the private sector and prompted the Algerian legislator to enact competition laws regulating relations between public enterprises and private economic operators.

a. The Initial Competition Laws:

  • Ordinance No. 95-06 of 25 January 1995 on Competition, which replaced price control legislation and established new rules aimed at enhancing economic efficiency. This law reflected the liberalisation of the Algerian economy following the 1989 and 1996 Constitutions. It sought to regulate and protect competition by limiting restrictive practices such as monopolies, secret agreements, and abuse of dominant position.
  • Ordinance No. 03-03 of 2003, which repealed Ordinance No. 95-06 and became the foundational competition law in Algeria, while maintaining the principles of free competition.
  • Law No. 08-12 of 2008, which amended and supplemented Ordinance No. 03-03 to strengthen competition mechanisms and regulate market behaviour in line with economic developments.
  • Law No. 10-05 of 2010, which further enhanced the effectiveness of competition rules by reinforcing the role of the Competition Council and ensuring a fair competitive environment to protect consumers and improve market efficiency.

b. The Competition Regulatory Authority:Through the aforementioned competition laws, the Algerian state established several independent administrative regulatory authorities to regulate competitive market activity, most notably the Competition Council*. Initially created under Ordinance No. 95-06, the Council gained real effectiveness following Ordinance No. 03-03, which defined its legal nature, recognised its administrative authority, and granted it broad powers. Its role was further strengthened by Law No. 08-12, which granted it independence, and Law No. 10-05, which enhanced the effectiveness of competition rules.

Accordingly, the Competition Council regulates economic activity by monitoring restrictive practices (such as monopolies and anti-competitive agreements), analysing competitive conditions in markets, ruling on concentration operations (mergers), and issuing binding and advisory decisions. Its mission is to ensure market transparency and integrity, protect consumer interests, and maintain a balance between state intervention and market freedom within a market economy.

Note: The Competition Council is an independent regulatory authority that ensures the free and fair functioning of markets among both public and private economic operators, thereby promoting economic growth and protecting the public interest.

4. The Relationship between Privatisation and Competition

Privatisation and competition are closely interlinked in addressing economic challenges. Privatisation plays a key role in regulating free competition by transferring ownership and management of assets from the public sector to the private sector, thereby opening the door to competition, stimulating innovation, improving efficiency, and enhancing the quality of services.

This relationship can be illustrated as follows:

  • Stimulating Competition: transferring enterprises to the private sector encourages competition among new and existing firms, reducing monopolistic practices and improving performance.
  • Introducing Market Forces:privatisation enables the application of supply-and-demand mechanisms and competitive rules.
  • Breaking Monopolies: it reduces the dominance of public enterprises and creates a competitive environment.
  • Improving Performance: the private sector is driven towards innovation and development in pursuit of profit within a competitive context, leading to better resource management and cost reduction.
  • Revitalising Enterprises and Increasing Efficiency: transferring unprofitable public enterprises to the private sector aims to enhance productivity, efficiency, and competitiveness.
  • Attracting Investment:privatisation attracts domestic and foreign capital, introduces modern technologies, increases productivity, and expands competition in sectors previously monopolised by the state.

Note: Privatisation constitutes a mechanism for enhancing competition and overcoming economic challenges by empowering the private sector. However, its success depends on effective management of the accompanying social, legal, and employment-related challenges.

Section IV: State Capacity to Confront Emerging Contemporary Transformations.

In order to confront contemporary transformations, the Algerian state, in order to be strong, must enhance its capacities through building strong institutions, achieving internal stability, and reducing economic dependence on external actors. This requires the ability to strike a balance between national sovereignty and effective engagement with current international challenges, while ensuring development and welfare for its population. This can be achieved through the following measures:

1. Eliminating Economic Dependence on the Hydrocarbon Sector

This objective can be attained by pursuing the strategy adopted by the state to reduce dependence on the hydrocarbon sector through reorienting the national economy and breaking the closed triangle characterising the Algerian economy, namely: oil production, export dependence, and the import of consumer goods. Preparing for the “post-oil” phase has become an essential necessity, through the following approaches:

a. Supporting and Encouraging Foreign Direct Investment: This is achieved through the latest Investment Law No. 22–18(Algeria, 2022), which replaced previous legislation that failed to attract investment, particularly foreign investment. This law established several principles and guarantees aimed at encouraging investment and attracting foreign capital to serve the national economy and provide a favourable investment climate in Algeria. These include the principle of transparency through digitalisation, equality between investors, freedom of investment, legislative stability, guarantees for the transfer of foreign capital, and protection against administrative expropriation or nationalisation of completed projects except in accordance with the law.

In addition, in order to provide greater protection for investors, the law strengthened the role of the judiciary in addressing investment-related disputes, either through judicial mechanisms or alternative methods such as conciliation, mediation, and arbitration where agreements exist. It also established a High National Appeals Commission placed under the authority of the Presidency of the Republic.

b. Supporting the Development of the Petrochemical Industry:Given that Algeria is an oil-producing country, efforts must be directed towards establishing a petrochemical industry in order to upgrade manufactured exports through refining rather than exporting hydrocarbons in their raw form. Consequently, this type of industry contributes to reducing crude oil and gas exports while increasing added value through the export of derivatives and products related to industrial and agricultural sectors.

Moreover, the petrochemical industry provides alternatives that compensate for shortages in certain materials or products that may not be sufficiently available domestically, such as wood and metals. Accordingly, orientation towards the petrochemical industry constitutes a necessity to recover the largest possible share of added value from oil and gas, as the requirements of industrial and agricultural development necessitate investment in and promotion of these industries.

c. Renewable Energy Strategy:Winning the challenge of modern renewable energies in Algeria is crucial to achieving the strategy of economic diversification. Renewable energies are obtained from energy flows that recur naturally and cyclically, in contrast to non-renewable energies, which are generally stored underground(Marzouk, 2017).

Renewable energies are permanent natural sources that do not run out and are continuously replenished. Their use does not produce environmental pollution, as they constitute clean energy sources, such as solar energy, wind energy, hydropower, geothermal energy, and biomass derived from organic materials (plants and waste).

2. Algeria’s New Economic Orientations

In response to contemporary global transformations characterised by unprecedented dynamism, technological progress, changing global trade dynamics, and environmental risks, the Algerian state has been compelled to reassess its economic strategies. This reassessment aims to enhance flexibility and adaptability in confronting multidimensional global transformations by expanding international cooperation with emerging economic powers, diversifying economic sectors, and orienting towards a knowledge-based economy and sustainable development.

This has required Algeria to develop its capacities in order to benefit from and keep pace with global transformations by removing constraints that hinder market expansion, particularly through supporting and developing the private sector. This, in turn, necessitated revising economic concepts and adopting new methods and tools suited to these developments.

This renewal in approaches and instruments(Al-Nashef, 2000, 112)implies the need to establish a new institutional environment reflecting coherence in production structures and recognising the significant role of the private sector in activating economic performance.

As a result, and with the aim of revitalising the national economy, diversifying productive capacity, and increasing exports, the Algerian state has oriented itself towards the knowledge economy and the establishment of start-ups (Al-Nashef, 2000)*. The state has played a supportive role in promoting this sector by providing financial support, advisory services, and infrastructure, given the role of start-ups in economic and social development, revitalising the national economy, diversifying production, increasing exports, and offering innovative solutions in various fields such as technology, communications, renewable energy, e-commerce, and creative industries. These enterprises also possess the ability to adapt rapidly to new and accelerating economic changes.

Consequently, and in light of several economic, social, and political factors, Algeria has adopted a new ownership pattern, liberalised the economy from prevailing public monopolies, and allowed market mechanisms to play their role in achieving efficiency and economic effectiveness.

Accordingly, the new economic strategy in Algeria limits state intervention to matters related to high-level state policy, with the objective of(Van der Hoeven&Sziraczki, 2002):

  • Guiding the economy in a manner that serves the public interest and increases overall production.
  • Stimulating and organising individual initiative while preventing monopoly and corruption.
  • Ensuring social balance.
  • Securing competition in activities where competition is viable.
  • Protecting consumer interests in terms of price levels and the quality of goods and services in sectors where competition is difficult, through specialised regulatory authorities established under governing laws.
  • Guaranteeing the rights of the national workforce employed in private enterprises.
  • Attracting private investment to contribute to privatisation projects within the framework of applicable laws.
  • Providing security, public order, and a minimum level of essential public services, protecting consumers, preventing exploitation, safeguarding the environment, and upholding fundamental individual and public rights.

Other aspects of economic life and certain economic facilities should be ensured by the private sector, given its nature and its greater capacity for flexibility and effectiveness.

3. Additional Tasks of a Strong State

State power constitutes one of the most fundamental pillars upon which international relations are built, as it is the primary driver of a state’s role in foreign policy and its relations with other states in terms of effectiveness and influence. The greater the state’s power, the greater its capacity to influence the international arena and achieve its foreign policy objectives. This requires the availability of national capabilities, among which economic power is a key component.

Algeria possesses all the qualifications necessary to become a strong economic state in the future, given the advantages and characteristics it enjoys, including energy resources such as oil and gas, mineral wealth such as iron, fertile land enabling food production and food security, water resources, and available industrial and material capacities for producing goods, providing services, and developing them. These natural and economic resources enable Algeria to achieve self-sufficiency and reach a stage of international competitiveness, allowing it to assert itself and strengthen its position within the global system as a significant regional power, particularly in the energy sector, and as one of Europe’s major gas suppliers, given its strategic geographical location.

Additional responsibilities that strengthen the state in confronting global transformations include:

  • Internal and external security: protecting national independence and sovereignty and ensuring internal security for citizens.
  • Human rights protection: adopting measures to promote and protect civil, political, economic, social, and cultural rights.
  • Environment and biodiversity: combating biodiversity loss, preventing pollution, and ensuring the right to a healthy and sustainable environment.
  • Justice and equality: guaranteeing equality before the law, ensuring fair trials, and protecting the rights of minorities and marginalised groups.
  • Sustainable development: providing housing, healthcare, and skills development, in cooperation with non-governmental organisations to improve the lives of the most vulnerable groups.
  • Cooperation and partnership: working with civil society organisations and international organisations to achieve these objectives.
  • Combating terrorism: through international cooperation, information exchange, treaties, capacity-building, and cutting off funding sources.
  • Combating cybercrime: through legislation and regulation, international cooperation via agreements, preventive measures, infrastructure protection, capacity-building, and developing national technological infrastructure with private-sector and civil-society participation.
  • Combating money laundering: through financial oversight, establishing Financial Intelligence Units (FIUs), international cooperation with organisations such as the Financial Action Task Force (FATF), and applying international standards to protect financial systems and combat transnational crime.
  • Addressing irregular migration: through international coordination, tackling root causes via development and employment creation, raising awareness of migration risks, strengthening security and judicial legislation, and enhancing cooperation between countries of origin, transit, and destination.
  • Combating drug trafficking: by implementing national anti-drug strategies and ensuring compliance with international conventions through cooperation with the International Narcotics Control Board.

4. Algeria: A Strategic Stake in the Path of Economic Integration

Algeria plays an important role in global economic groupings through its trade partnerships with the European Union and the BRICS group, as well as its participation in African organisations such as the African Union and the African Continental Free Trade Area(Mesdour, 2025), with the aim of enhancing its economic interests, promoting regional integration, and supporting its role as an emerging economic actor.

Algeria also contributes to the global energy market through its membership in OPEC, while seeking to improve its economy by diversifying exports and increasing non-oil exports.

Furthermore, Algeria participated in the 2025 Summit as a representative of the African Union, within an international context marked by the growing importance of major economic partnerships and blocs. This participation highlighted that trade constitutes a central pillar in financing development for most countries, although current regional integration strategies have yet to achieve the desired impact on trade volumes and patterns.

Key Roles of Algeria in Global Economic Groupings:

  • Partnership with the European Union.
  • Accession to major economic groupings such as BRICS to enhance its global economic standing.
  • Active participation in African organisations, strengthening African economic integration and positioning Algeria as a key actor.
  • Participation in global energy markets.
  • Promotion of non-oil exports.

Conclusion:Privatisation constitutes an important and necessary link in the chain of economic reforms adopted by Algeria since the mid-1990s. It represents a turning point in transforming the Algerian economic model, as it serves as a means to improve the performance of inefficient public enterprises through private-sector participation, with the aim of achieving economic growth and competitiveness. Privatisation contributes to stimulating performance, improving management, and increasing productivity and profitability, thereby enabling the state to focus on strategic institutions.

Moreover, privatisation aims to stimulate the economy by creating an investment-friendly environment, attracting investment, improving services, fostering innovation, and enhancing competitiveness in the face of global transformations. This prompted the Algerian legislator to establish a legal and regulatory framework beginning in 1995, by laying down the necessary rules for its implementation and encouraging private investors to engage actively in this new policy. To activate the reform process, competition laws were enacted, most recently Law No. 22–18 of 24 July 2022, which constitutes the backbone of competition protection and the prevention of monopolistic practices. These laws allow market mechanisms to regulate prices and improve performance, while requiring state intervention through the Competition Council to ensure fair practices and protect consumers, in line with the requirements of the modern global economy based on competition and free initiative.

To ensure the success of this process, the state has worked to prepare an economic environment conducive to the operation of market mechanisms by liberalising prices and competition in order to achieve competitive economic growth. This has involved introducing mechanisms to facilitate the transition, such as developing financial markets, promoting partnerships with foreign actors, reforming the tax and banking systems, improving monetary policy, reducing bureaucratic practices, rehabilitating the private sector, and revitalising economic activity through enhanced competition.

At the same time, the state must fulfil its broader responsibilities by providing security and public order, ensuring a minimum level of essential public services, protecting consumers, preventing exploitation, safeguarding the environment, and upholding fundamental individual and public rights. In light of contemporary economic, social, and political transformations, this requires a more organised and effective regulatory role than in the past, supported by multiple legal frameworks—particularly through the judiciary—to deter manipulation and monopolistic practices and to provide the necessary legal oversight tools. Through these efforts, Algeria seeks to activate the new global economic dynamics, achieve positive integration into the world economy by benefiting from external markets and capital flows, enhance its economic and geopolitical role, and contribute to the maintenance of regional and international peace and security.

Reference List

1.         Abu Awaja, M. (n.d.). Privatization in Tunisia. (n.p.).

2.         Al-Abdullah, M. M. (1999). Structural Adjustments and the Transition to a Market Economy in Arab Countries. Center for Arab Unity Studies.

3.         Al-Abdullah, M. M., et al. (1999). Economic Reforms and Privatization Policies in Arab Countries. Center for Arab Unity Studies.

4.         Algeria. (1982). Law No. 82-11, Relating to National Economic Investment, dated August 21, 1982.

5.         Algeria. (1995). Ordinance No. 95-22, Relating to the Privatization of Public Enterprises, Official Gazette, No. 48.

6.         Algeria. (2001). Ordinance No. 01-04, Relating to the Organization and Management of the Privatization of Public Enterprises, Official Gazette, No. 47.

7.         Algeria. (2020). Executive Decree No. 20-254, Establishing a National Committee for the “Startup” Label, Official Gazette, No. 55.

8.         Algeria. (2022). Law No. 22-18, dated July 24, 2022, relating to Investment. Official Gazette, No. 50 (July 28, 2022), supplemented by Gazette No. 60 (September 18, 2022).

9.         Al-Kurdi, J. M. (1998). The Legal Regulation of Privatization. Dar Al-Nahda Al-Arabiya.

10.       Al-Najafi, H. (1977). Economic Dictionary. Local Administration Press, Baghdad, Iraq.

11.       Al-Najjar, S. (1988). Privatization and Structural Adjustments: Fundamental Issues. Economic Policy Institute.

12.       Al-Nashef, A. (2000). A New Concept of the Idea of the State and Its Role in Managing Public Utilities. Halabi Legal Publications, Beirut, Lebanon.

13.       Bahloul, M. B. H. (1994). Lecture on Privatization Policy in Algeria. Al-Jahidhiya Association.

14.       Ben Abderrahmane, N. (2023). “The Shift Towards a Knowledge Economy and the Creation of Startups in Algeria.” Algerian Journal of Research and Studies, 6(2).

15.       Ben Achenhou, M. (1992). Economic Reform: Debt and Democracy. EACH RIFA Edition, Algiers.

16.       Bouadam, K., &Meliani, A. H. (2001). The Problem of Privatization in the World. Faculty of Economic Sciences, Setif.

17.       ESCWA (Economic and Social Commission for Western Asia). (1999). Assessment of Privatization Programs in the ESCWA Region. United Nations, New York.

18.       Jbarat, M. (1999). The effects of privatization on Third World countries [In Arabic]. Al-Rai Jordanian Newspaper, (10622). Amman, Jordan.

19.       Le Figaro économique. (1995). Issue of March 28, 1995.

20.       Marzouk, A. (2017). “Investment in Renewable Energy for a Post-Oil Economy in Algeria.” Skikda University.

21.       Mesdour, F. (2025). Algeria: A Strategic Stake in the Path of African Economic Integration. Al-Mustathmir.

22.       Petrella, R. (1995). “The New Tables of the Law.” Le Monde diplomatique.

23.       Sharif, A. H. (1997). Legislative Trends for Solving the Excess Labor Problem Following the Privatization Movement. Mansoura University, Cairo, Egypt.

24.       Van der Hoeven, R., &Sziraczki, G. (2002). Lessons from Privatization: Labor Issues in Developing and Transitional Countries. International Labour Organization, Geneva/Beirut.

25.       World Bank. (1984). World Development Report. World Bank Publications, Washington, D.C.

* Including Latin American nations such as Mexico, Argentina, and Peru; Asian countries like Syria, South Korea, and Bangladesh; and African states including Algeria, Egypt, Tunisia, and Angola. Furthermore, this transition encompassed Turkey as well as socialist states* such as the Soviet Union, the Czech and Slovak Republics, Poland, Hungary, and others.”

*Cartel: A term of Latin origin derived from the word “Charta,” which signifies a “charter” or “pact.” A cartel is defined as an agreement, often formalized in writing, among several enterprises (firms) operating within a specific branch of production. The primary objectives of such an agreement are to allocate market shares or regulate competition, while ensuring that each participating entity maintains its distinct legal and economic independence(Al-Najafi, 1977, 53).

* Due to the absence of a standardized Arabic terminology, the concept of privatization has been assigned various linguistic interpretations, including ‘private ownership,”private empowerment,”the transition toward the private sector,’ as well as the ‘growth of the private sector.’“

**The name ‘Webster’s Dictionary’ refers to a line of dictionaries first developed by Noah Webster in the early 19th century.”

*Proponents of this view argue that privatization, in this sense, is not a purely economic process; rather, it encompasses political, cultural, and social dimensions. This is due to the fact that privatization further integrates the domestic economy into the global economy, consequently making future economic development subject to global economic interests, regardless of whether they align with or contradict the national interests of developing nations. Furthermore, it is argued that developing countries, owing to their colonial legacy, remain incapable of formulating economic and social policies that are independent of influential international powers(Jbarat, 1999).

*Third World indebtedness is not a modern phenomenon; rather, it is a historical issue that emerged as early as the mid-nineteenth century. Contemporary studies suggest that colonialism was often a byproduct of ‘financial strangulation’—a result of the lending policies pursued by European banking institutions. This financial entrapment subsequently facilitated colonial intervention, as was historically evident in the cases of Egypt and the Ottoman Empire.

*For instance, in April 1986, the United States Agency for International Development (USAID) invited more than seventy nations to a global conference held in Washington.

**According to RefaatLaqousha, a professor at Alexandria University, Egypt, the privatization strategy aims to adopt counter-policies that can be described as ‘growth within the framework of combating inflation’ (anti-inflationary growth). These policies are extensively addressed in the relevant economic literature.

*“Renato Ruggiero was the first Director-General of the World Trade Organization (WTO), serving from 1995 to 1999. A distinguished Italian diplomat, he had an extensive career in the Italian diplomatic service and served as the Minister of Foreign Trade prior to his appointment as the head of the WTO, which was founded in 1995.”

*Draft Law No. 20.13 concerning the Competition Council aims to implement the provisions of Article 166 of the Constitution. This legislative text establishes the Competition Council as an independent authority mandated—within the framework of organizing free and fair competition—to ensure transparency and equity in economic relations. Specifically, the Council is tasked with analyzing and regulating market competition, monitoring anti-competitive and illegal commercial practices, as well as overseeing economic concentrations (mergers) and monopolies. Furthermore, the text defines the composition, powers, organization, and operating procedures of the Council, alongside cases of incompatibility (conflicts of interest). The Council exercises adjudicatory powers regarding anti-competitive practices, unfair competition, and economic concentrations. It also plays a vital advisory role in all competition-related issues, holds the power of self-referral (suasponte) to investigate any practices undermining free competition, and maintains the authority to conduct inquiries, investigations, and impose sanctions.”

*See also: Executive Decree No. 20-254, dated December 20, relating to the establishment of a national committee for granting the ‘Startup,’ ‘Innovative Project,’ and ‘Business Incubator’ labels, and defining its mandates, composition, and functioning. Official Gazette of the People’s Democratic Republic of Algeria, No. 55, published on September 21, 2020.”

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