CHAPTER FOUR: ECONOMIC GOVERNANCE AND MANAGEMENT 388. This first development period had certain positive results. The investment rate was 45.8 per cent during the period 1968–1980, far more than the average rate for intermediate countries that fluctuated around 26 per cent. Furthermore, the growth rate was relatively high throughout this period, fluctuating around 6 per cent. It is also to be noted that there was an important economic shift, which saw a contraction of the agricultural sector‟s contribution to the gross domestic product (GDP) and a net increase of the industrial sector. 389. As from the 1980s, this first phase already started showing signs of slowing down and Algeria was plunged into serious economic crisis by 1986. Among the many causes were external factors such as the indebtedness crisis that was compounded by the fall in oil prices after the second oil crisis. Other factors also played a role, such as inefficient public enterprises, the agricultural crisis and growing food dependency, rapid deterioration of public finances, heavy public debt and the explosion of external debts. 390. The crisis in the 1980s led to a new phase in Algeria‟s economic development, with the introduction in 1989, 1991 and 1994 of economic stabilisation programmes supported by the International Monetary Fund (IMF), which enabled the rescheduling of external debts. However, the reforms introduced within these structural adjustment programmes also had negative effects on the economy. Growth receded to an average annual rate of 0.5 per cent between 1987 and 1994. Per capita income fell by 2.5 per cent over the same period. Inflation rose to an annual average of 19.6 per cent during this period due to the liberalisation of prices and devaluation of the dinar. This period was also marked by a sharp rise in employment as a result of slow economic activities and the restructuring of public enterprises. Unemployment rates climbed from 17 to 25 per cent between 1986 and 1994, peaking at 28 per cent in 1995. This deterioration of the economic situation contributed to the political instability and civil unrests of 1989. 391. The third phase of the country‟s economic development started in the mid1990s and was marked by a distinct improvement in the economic situation. First of all, the economy experienced a clear acceleration in economic growth, which settled at an average of 3.1 per cent between 1995 and 2000. Then there was an improvement in per capita income, which increased at an annual average of 0.9 per cent. The growth rate of inflation slowed down to settle at an annual average of 6 per cent per annum for the same period. Although the restructuring of enterprises continued, the unemployment rate stabilised after an increase in state capital expenditure and public investments. As a result, following the difficult economic crises of the 1980s and early 1990s, Algeria found itself once again on the path towards growth and development, notwithstanding the inherent security and political instability during that time. 392. This growth has been consolidated over the last decade. The growth rate was relatively high at an annual average of 4.9 per cent between 2000 and 2004. Per capita income maintained its upward trend with an average of 3.3 per cent during the same period. Inflation remained low despite a 5.2 per cent increase 129