Algeria is not a poor country

This is not something obvious to Westerners at first sight. They see buildingseverywhere in the city that need paint, or that in some quarters, are crumbling or little more than shacks. They see the hittistes and the roads that need repairs. Algeria looks poor.

But it definitely is not.

Yes, Algeria's economy has suffered along with its population -- through colonial exploitation, war then socialism then terrorism and division.

But it has prime coast line and the desert for tourism, a location smack between Europe and sub-Saharan Africa, and immense mineral wealth including oil, natural gas and gold.

But you don't have to talk about simply potential. It is rich now. Del, a business reporter, has been digging out economic reports and IMF records and discovered that there's been a conscious government policy not to spend on infrastructure or job creation.

instead, Algeria has paid off nearly all external debt and has been socking away about $24 billion a year. Every penny over $19 a barrel of oil that comes in, the government banks. And oil is at $64 going to $70 a barrel.

The government recently has levied and begun collecting a heavy tax on oil that is adversely affecting foreign oil companies -- and sending a clear signal that the country doesn't need them anymore.

If terrorism and violence can be controlled, Algeria will leap into modernity. For now, the plan is to play it slow and safe.

In line with IMF recommendations, the government has been significantly spending on higher salaries for public service workers like police. The government also spends to keep prices of basic foods low. Bread here is 15 cents and milk 40 cents, water is 35 cents for 1.5 liter and potatoes 65 cents a kilo. Most people can eat. Money has gone into public housing too. The places are small, boxy and basic, but you don't see people out on the street here.

Finally, there is also talk of the government saving a little less (and spending a bit more instead) now that oil prices are so high.