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Algeria: Running on fumes

Unless oil prices go way up, Algeria is in a world of hurt.
A general view shows an oil installation on the outskirts of In Amenas, deep in the Sahara near the Libyan border, on January 18, 2013. Islamist hostage-takers at a nearby gas field in the area, more than 1,300 kms southeast of the capital Algiers, demanded a prisoner swap and an end to the French military campaign in Mali, a report said, while 30 foreigners were reported still missing in the worst international hostage drama for years. AFP PHOTO/FAROUK BATICHE        (Photo credit should read FAROUK BATICH

Few were surprised when, a little over a month ago, Algeria's minister in charge of economic forecasts, Cherif Belmihoub, leaned into the microphone at a state radio station and announced, "Algeria is no longer an oil country." 

Belmihoub's analysis was correct, but only up to a point. Algeria remains very much a country of oil and gas. It's just not making enough money to save the country from penury and sustain the generous state subsidies the government has been hoping would continue as a substitute for fundamental reform. 

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