Algeria Goes It Alone

Algeria's economy is teetering on its precarious foundations. The government knows it needs to enact reforms to prevent economic collapse, but its approach is to rely on what it knows best: isolation. After energy prices tumbled in 2014, Algeria -- which depends heavily on hydrocarbons, even compared with other energy exporters in the region -- opted to burn through its saving rather than borrow money abroad. But that measure is proving unsustainable. Recent estimates revealed that Algeria's cash reserves could dip below $100 billion in the next couple of months, prompting the government to try a different strategy. In September, Algerian Prime Minister Ahmed Ouyahia announced a five-year plan to reduce his country's ballooning budget deficit by borrowing directly from the central bank. The plan aims to solve Algeria's economic woes while still avoiding international debt markets, and includes proposals for structural reform to accompany five years of financing, drawn...