View of Dar Aziza and Place des Martyrs in Algiers.
"The lack of market competition, and presence of ubiquitous corruption, has meant that the private sector is incredibly weak. This at a time when most of the population is under the age of 24 and looking for jobs, which just aren’t there." © Yves Jalabert / The Commons
View of Dar Aziza and Place des Martyrs in Algiers.
William Bauer
Last updated: August 1, 2012

Charting dangerous waters: Algeria’s challenges

Algeria is the only North African state that so far has remained more or less unaffected by the broad sweep of the Arab Spring. But the calm may be deceptive, writes William Bauer.

Twenty years ago, Algeria was a nation rocked by brutal civil war. Demands for total socio-political change were met by a coup and severe military repression. The leaders of Algeria then are of the same stripe as those that rule today. As such, they categorically won.

What they won, however, was a truncated peace; a peace not caused by the people’s wishes being fulfilled but by a common desire for the bloodshed to end. In this came an unhealthy compromise: in return for the killing to stop, so did the demands for political change. Consequently, Algeria has largely been at peace for over ten years; but its challenges, deep, festering and untackled, remain.

Economically, Algeria is a nation gifted with hydrocarbon reserves, but cursed by its effects; notably that of being a rentier state. A rentier state is a country with such natural resources that it can survive on that revenue alone, without having to acquiesce completely to the people’s wishes. Therefore the population has a limited say in the governance of the country, as their taxes are not the focal point of governmental income.

In 2012, it is estimated that hydrocarbons make up 60% of Algeria’s budget. Taxes only account for 47.8% of governmental revenue. However, whilst such secure income may appear advantageous, especially in the negative global economic climate, it is not. The consequence of an over-reliance on hydrocarbons is the lack of development of the Algerian private sector economy.

This has led to a parallel black market economy, as state run enterprises become severely inefficient. The lack of market competition, and presence of ubiquitous corruption, has meant that the private sector is incredibly weak. This at a time when most of the population is under the age of 24 and looking for jobs, which just aren’t there.

An estimated 9.7% of the Algerian population is unemployed and 23% live below the poverty line. Youth unemployment is around 20%, which has resulted in a large pool of very disappointed, and very angry, young Algerians. Such youths have started demonstrations or riots against the regimes in the rest of the MENA region. The feeling of powerlessness, of not being able to get married, and of not being useful to society, is a potent force.

In recent elections, FLN, the ruling party that has been in power since 1962, won a majority in parliament. During Algeria’s fifty years of independence, the same generation, the same party, and the same ethos of government have remained in place. Many Algerians feel that the younger generation has been shut out and excluded. A veteran of the war of independence, President Abdelaziz Bouteflika now governs a country where the population demographics does not in any way match the political elite’s makeup.

Saddled with the familiar themes of corruption, mismanagement, and cronyism, the FLN is not representative of the Algerian people, but exclusively of the past. Its election victory was based upon a compromise. It was elected to ensure stability, and as Algerians do not fully trust the democratic process it was the default choice. This voter apathy is mirrored in the estimated 42% turnout, hardly a ringing endorsement of the FLN. Although this compromise may work for now, it does not eliminate the fact that Algeria’s political system needs serious overhauling.

Algeria’s challenges matter. During the Arab Spring, issues that should have been dealt with have been put off. This may have explosive consequences, both for the country, the region, and the West. As a key supplier of hydrocarbons to Europe, and an ally of the U.S. in the fight against Al-Qaeda, Algeria is geostrategically critical. Its core remains intensely unstable and the urgent problems of youth unemployment, weak private sector, and an inadequate political system will contribute to future instability and insecurity. The Algerian regime, in its refusal to acknowledge these pertinent problems, is playing with fire.

In May 1945, the population of a small Algerian town called Setif came out spontaneously and en-masse to demand independence from French rule. The local officials panicked and fired into the crowd. They were massacred. France’s response to the uprising was merciless, and over the course of the following months its soldiers ravaged the region and its people, killing an estimated 8,000. As he observed the destruction he had wrought, General Duval presciently wrote to Paris: “I have given you peace for ten years, but if France does nothing, then it will start again in a worse, and irremediable manner.”

Ten years later, the Algerian war for Independence started. It is to be hoped that the civil war in the 1990s was not itself the prelude to an even greater cataclysm to blight an already troubled nation.

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