Immobile on all fronts.

Position:Algeria's political and economic prospects in 1993

THE BEST THAT CAN BE said for Algeria in 1993 is that it may not be as turbulent as 1992. Last year began with the resignation of President Chadli Benjedid and the cancellation of elections which would have swept the fundamentalist Front Islamique du Salut (FIS) overwhelmingly to power. The presidency was replaced by a Higher Council of State headed by Mohammed Boudiaf, a respected former revolutionary brought back from exile and charged with laying the groundwork for fresh elections which would produce a less alarming result than those which had been halted.

The FIS was outlawed and subjected to thoroughgoing suppression. Its two most prominent leaders were jailed for life. Then in July, Boudiaf was assassinated by still unknown hands. The threat to security has become the regime's overriding concern, while all pretence of political and economic liberalisation was summarily dropped. Since then, faced with an intractable political and economic crisis, Algeria has stagnated.

Belaid Abdessalam, appointed prime minister in July to overhaul the economy, has a daunting task before him. Gross domestic product is estimated to have declined by as much as 3% last year. The contraction may be halted in 1993, but GDP is unlikely to grow. The 70% debt service ratio - debt repayments will amount to $7bn this year - severely restricts the government's ability to import raw materials needed to increase industrial output and reduce massive unemployment (the most important popular grievance fuelling unrest).

Italy agreed last year to refinance commercial and bilateral debt and the government hopes to make a similar deal with France. But Abdessalam, the veteran architect of Algeria's widely discredited nationalist economic strategy in the 1970s, has set his face firmly against formal debt rescheduling. He may have to think again in 1993, especially if Algeria raids to reach an agreement with the IMF for a new standby loan. There were fears last year of a complete break with the IMF, but the visit at the end of December by Michel Camdessus, the organisation's managing director, is evidence that talks are at least continuing.

Abdessalam's chosen policy as set out last September tries uneasily to combine domestic austerity with encouragement of investment and local business. It could turn out to be self-defeating. Stiff import controls have been imposed, ensuring a substantial trade surplus. But the protection accorded to local industry is also depriving...

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