Country FilesNorthAlgeria Country Profile 2015: The endgame beckons


Algeria Country Profile 2015: The endgame beckons

By The Africa Report

altPresident Abdelaziz Bouteflika won a landslide re-election in April 2014, but his continued health problems after a 2013 stroke have brought talk about the succession to the fore.

People regularly protest about the lack of public services, but no opposition parties have been able to make a strong foothold in the national political debate. While oil production is set to decline over the next several years, the government is investing more in the hydrocarbons sector in the hopes of producing more gas.

altBouteflika's regime depends on a small military-security-political elite widely known as 'le pouvoir' (the powers that be).

His inner circle is led by his disliked younger brother Saïd Bouteflika, army chief-of-staff Lieutenant-General Ahmed Gaïd Salah and prime minister Abdelmalek Sellal.

Withering opposition

Election data from 2014 speaks volumes about public apathy: official results showed that only 11.6 million of 22.9 million registered voters took part and nearly 10% of ballots were spoiled. No opposition party has shown itself capable of confronting the ruling coalition constructed behind Bouteflika.

The Front des Forces Socialistes – which had been a beacon of liberal opposition under the long-exiled, now retired Hocine Aït Ahmed – shows signs of withering away. Legalised Islamist parties have never gained the momentum enjoyed in the early 1990s by the banned Front Islamique du Salut.

A lack of public reaction outside trouble spots like Ghardaïa – where tensions have been inflamed by political manoeuvring – points to a country where a majority of citizens are angry about corruption and the management of the economy and services, but where a national political movement has failed to gel.

Thus, while the authorities register many thousands of protests around the country every year, the government continues as usual.

The extent that Bouteflika is seen to be at the end of his reign has been reflected in an upsurge in statements about the need for change from potential successors who had previously kept quiet.

Officially, the government is committed to accelerating reforms, to being more proactive in policy implementation and to bringing in investment, with politicians speeding up efforts to build infrastructure and improve living standards.

Large numbers of housing units have been built and jobs have been created, but youth unemployment remains at about 25%.

The pace of change remains painfully slow – and Algeria's much-vaunted macroeconomic balances will come under real pressure if global oil prices remain below $90 per barrel for any appreciable time.

Despite decades of effort to diversify the economy, and the emergence of a few big conglomerates – most prominent of which is Issad Rebrab's Cevital group – the private sector remains underdeveloped and under-resourced.

Investor apathy

Increased investment and, especially, the implementation of major export-oriented gas projects, would provide reassurance that Algeria will continue to grow its economy and ensure economic balances in the next decade.

But a generally poor response from international oil companies to hydrocarbons regulator Alnaft's long-awaited 2014 licensing round pointed to concerns about the investment environment. All joint-venture investments must have a minimum of 51% Algerian equity, and there are measures that exclude international banks from project finance.

Algeria's allies have tended not to put undue pressure on the Bouteflika leadership, looking to Algiers to play a stabilising role in a turbulent region. Western officials say they are reassured that Algeria has sharpened up its security performance since the January 2013 attack on the In Amenas natural gas plant and by a return to more active diplomacy in Mali and other conflicts.

Al Qaeda in the Islamic Maghreb (AQIM) and related groups remain a security challenge, especially in Kabylie and border regions, leading Algerian troops to undertake operations in Tunisia and probably Libya against jihadist cells.

They no longer pose an existential threat to the state, but the beheading of French climber Hervé Gourdel in September raised the spectre of Islamic State entering the Algerian narrative.

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