Algeria: a glimpse into an unsustainable system

Despite sporadic violence and the threat of a boycott by various groups, the landslide re-election of Abdelaziz Bouteflika, Algeria’s chronically ill 77-year-old President, for a fourth term in office came as little surprise to the majority of the population. Allegations of electoral fraud have circulated against him (he reportedly attained 81.5 percent of the popular vote), the truth of which remains unknown. Nonetheless, to concerned observers Algeria’s election exposed the increased pressure on a political system facing an uncertain future. Whilst Algeria managed to curb widespread discontent that brought revolution to Tunisia and Egypt, three years on, the same drivers of civil unrest and political violence remain in place, while the policies adopted to tackle them are losing their impact. 

The social and political history of Algeria is a traumatic one. When, in 1991, the military-backed government decided to cancel elections that Islamists were poised to win, a decade-long civil war ensued that is estimated to have resulted in the death of over 200,000 people. Algeria’s subsequent stability is widely regarded as a product of Bouteflika’s presidency. As the memory of the civil war remains fresh, many continue to back the government in an attempt to preserve a stable status quo despite anger at unemployment and economic stagnation. Bouteflika’s government has long been managed behind the scenes by rival factions composed of Front de Liberation National (FLN) elites and army generals known collectively as “Le Pouvoir” or “The Power”, who see themselves as guardians of Algeria’s stability. 

During a decade of high oil prices, the Algerian government has successfully managed to maintain its control on society through a combination of political repression and social appeasement through economic hand-outs in the form of subsidies, made possible by the country’s oil wealth. While this policy has proven successful for a decade, in the post Arab spring environment, new pressures have emerged. This is recognised by the International Monetary Fund, which points out that “despite high levels of spending in 2011 and 2012, and additional wage increases in 2013, social demands remain elevated and could further increase.”

Although Algeria’s foreign currency reserves are estimated at USD 195 billion, they are threatened by the country’s overdependence on a declining hydrocarbon sector. At the same time, the government continues to maintain an unsustainable subsidy programme aimed at combating the causes of civil unrest. Public spending for 2014, much of which comprises subsidies, is set to reach USD 98 billion, an 11.3 percent increase on last year.

Bouteflika’s critics argue that subsidies are only a short-term remedy for civil unrest that leave the country vulnerable to a sharp fall in oil and gas prices. This is especially poignant given that Algeria has struggled to attract foreign investment due to security concerns, following an attack by Islamist militants targeting the In Amenas gas facility in January 2013 that resulted in the death of 40 foreign workers. The apparent lack of political and economic stability means that diversified foreign investment, which would in turn create jobs and consumer credit, is unlikely to enter Algeria.

Furthermore, although hydrocarbons generate 90 percent of state revenues, the industry employs only 2 percent of the labour force. With approximately 70 percent of the population under 30 and youth unemployment in excess of 20 percent, anger at the shortages of jobs, housing and opportunities, in addition to political malaise, has regularly erupted into civil unrest across the country since 2011. Such resentment displayed among marginalised and unemployed sections of the society has proven conducive for recruitment by Islamist militant groups known to operate in the area, namely, Al Qaeda in the Islamic Maghreb, which has its origins in northern Algeria and the civil war during the 1990s. 

Algeria’s presidential election represents a missed opportunity for a government that has opted to err on the side of caution by maintaining the status quo in the hope that there is little appetite within the country for the kind of civil unrest, political violence and terrorism that other Arab neighbours are experiencing. Serious doubts about Bouteflika’s ability to govern, having suffered a stroke last year that means he is rarely seen in public, have only fuelled speculation about those backing his re-election, and the prospects for reform in a country where all presidents since independence have been appointed with the army’s approval. Subsequently, the question of whether a stable post-Bouteflika transition is possible will remain unanswered well into 2014.