CHAPTER FOUR: ECONOMIC GOVERNANCE AND MANAGEMENT in salaries. Also, unemployment dropped significantly from 29 per cent at the end of the 1990s to 17.7 per cent in 2004. 393. The consolidation of growth after 2000 benefited from the economic revival programme that mobilised almost US$7 billion in public investments between 2000 and 2004. These investments went to key sectors such as agriculture, hydraulic engineering, transport, infrastructure, local development, human resources development and training, and the improvement of living conditions. The oil sector also contributed to growth consolidation but its growth rate of 3.5 per cent fell below the average rate of 4.9 per cent. Other sectors, such as agriculture, public works, civil engineering and the services industry, contributed to the growth and job creation. Growth recorded in the third stage of 1995–2000 was reinforced during the fourth stage of 2000–2004. In fact, the turn of the century saw a consolidation of growth essentially as a result of increased public investments, given the higher international oil prices that represented the bulk of Algeria‟s export earnings. 394. These phases in Algeria‟s economic history show a strong correlation between economic performance and trends in international oil prices. Although it is not the sole factor contributing to the country‟s economic growth, increases in oil prices have always had a positive effect on the recent economy. This influence operates through its direct impact on the GDP, also through state revenues and direct contribution to economic revival programmes and public investments. 395. Apart from these historical and current economic development stages, it is possible to analyse the recent economic development history of Algeria as one long process of transition starting in the mid-1980s and leading to a more decentralised economy open to the outside world. In fact, the crisis of the 1980s and the constraints and inherited rigidity of the centralised economy were at the origin of a vast reform programme started by the political powers to reduce the sluggishness and obstacles created by the centralised system and improve the efficiency of economic development. These reforms affected a large number of sectors, including public enterprises; many of which had been privatised. The reforms also aimed to reduce the role of the state and central planning in favour of market forces in respect of resource allocation. It also affected the banking sector as a result of opening up financial markets and mechanisms for fixing interest rates. It should be noted that the most important liberalisation was achieved in foreign trade by liberalising imports and diversifying exports. Finally, the private sector benefited from new laws and regulations aimed at encouraging investments and growth in this sector. 396. The study of economic governance in Algeria is in that general context of transition in the economy experienced since the mid-1980s. As such, improved governance should encourage the transition towards enhanced economic decentralisation, competition and openness to external markets. Thus, for some years, a stable macro-economic framework conducive to growth has been put in place. The government has also been paying much more attention to sectors hitherto marginalised, such as agriculture. Also to be noted are the reinforcement of, and better mechanisms for formulating budgetary policy and 130