Page 7 - Azerbaijan State University of Economics

Aboubaker Khoualed, Taher Makhloufi, Ahmed Makhloufi, Elyas Luqman: The Impact
of Foreign Direct Investment (FDI) on Economic Development: The Case of Algeria

Life expectancy does not affect economic development in the long and short term.
And that FDI has a negative impact on economic development in the long term, and
a positive effect in the short term. A study by (Jannah, Suriani, & Yulindawati, 2022)
aimed to find out how foreign investment and labor affect economic development in
Indonesia, concluded that economic development is significantly and positively
affected by FDI in the short term, and in the long term the effects are negligible. While
labor has a significant negative effect in the short term on development, and no effect
in the long term.

Trends of FDI and the Level of Economic Development in Algeria
The Evolution of FDI in Algeria
Since the 1980s, Algeria has adopted a series of major reforms in line with the
measures taken by international financial institutions represented by the International
Monetary Fund and the World Bank to overcome the problems faced by the economy
and thus enter into a market economy.

All these measures aim to attract as much FDI as possible due to its importance in
supporting local resources and accelerating development.

The figure below shows the flows of FDI to Algeria during the study period:

Figure 1: Inflows of FDI to Algeria during the period 2022 - 1990 (
Unit: Million USD
3000

2500
2000
1500
1000
500
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
-500
-1000
Source: Compiled by the researcher depending on: the World Bank database
https://data.worldbank.org.
From figure number (01), we see that the curves reflecting the inflows of FDIs to
Algeria have taken various forms.
From figure (01), it can be seen that the curves reflecting the flow of FDI to Algeria
show different forms .

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