التكامل الاقتصادي
Volume 14, Numéro 2, Pages 14-33
2026-06-12
The Functional Economy As A Lever For Transition Toward Sustainability And Economic Diversification In Algeria: Systemic Analysis And Lessons From The Mexican Experience
Authors : Kasmi Ali . Guechtouli Widad .
Abstract
The Algerian economy remains highly dependent on hydrocarbons, which still account for 83% of exports and 47% of budget revenues, exposing the country to price volatility and growing environmental constraints. This article explores the functional economy as an alternative framework to support Algeria’s structural transformation and diversification. Using a comparative approach with Mexico—an emerging economy that successfully reduced its reliance on extractive industries—the study combines systemic analysis of Algerian sectors with field data and a review of Mexico’s circular economy policies. It identifies four strategic sectors suitable for deploying functional economy models and highlights empirical results from Mexico’s recycling industry, including high PET recovery rates and substantial job creation, as evidence of this paradigm’s viability. The article concludes that, despite regulatory and entrepreneurial ecosystem gaps, the functional economy offers a credible path for enhancing Algeria’s resilience and sustainable diversification, provided strong political will and targeted investments.
Keywords
functional economy ; circular economy ; economic diversification ; sustainability ; sustainable development
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