ABSTRACT
The nationalization of foreign firms and bureaucratic controls encircling private production have discouraged private initiative and have lead to considerable hoarding of money and capital flight through parallel exchange markets. Financial incentives consisted of total or partial exemption from taxes and duties, reimbursement of production tax on the purchase of equipment, and protection against foreign competition. The financial benefits allowed by the Algerian Investment Code are of the same nature as those granted in liberal economies; it allows the total or partial exemption from the costly right of legal transfer and from land taxes fixed in terms of geographical location, and the reduction of production taxes. In Algeria, the increased specialization of the private industrial sector is inhibited by the institution of state monopolies of import, which greatly reduce the scope of private investment. In January 1983, a board responsible for the stimulation and coordination of the private sector was set up; it is an administrative organization with limited resources.
