international analysis and commentary

Algeria’s precarious balance


The last stable republic of North Africa, Algeria is now going through a path of political change as President Abdelaziz Bouteflika may not run for a new term in the presidential election due in April 2014. This is important because, similarly to pre-Arab Spring Tunisia with Zine El Abidine Ben Ali or Libya with Muammar Gheddafi, Algerian political life is dominated by one single strongman – President Bouteflika. Algeria, however, was almost untouched by the Arab upheaval in 2011 largely due to  what is called le pouvoir, an establishment represented by the Front de Liberation National, the political party that supports President Bouteflika, the business élite connected to it, and a sophisticated security apparatus connected to the military.

The fact that Algeria experienced a bloody and prolonged civil war in the 1990s is often cited as proof that it won’t fall into the same trap soon. However, the events over the past few years on its doorstep, and particularly in Libya, warn that we should not underestimate the potential for instability.

Like Libya, most of Algeria’s GDP along with its social system are based on oil and gas revenues. As in Libya, the oil wealth is facing two important challenges: terrorism and a drop in the energy demand from European countries.

Largely in response to the Eurpean slowdown, Algeria is putting cargoes of liquefied natural gas on the market to be sold in Asia, a thirsty energy buyer. Furthermore, Algeria needs foreign investments to modernize its pipeline’s infrastructure and meet its domestic demand without aging its fields too soon.

But this situation is the result of a political problem, too. The state-owned Algerian energy giant Sonatrach does not have the most brilliant record of fulfilling contracts and many actors are considering turning towards more reliable economic partners. Plus, in August 2013, an international arrest warrant was issued against former Energy Minister Chekib Khelil, who is known to be close to President Bouteflika, for suspected briberies involving Sonatrach and other foreign companies including Eni’s own Saipem. Sonatrach holds 95% of Algerian oil and gas exports and qualifies as the top earner of foreign currency of all north African countries.

Algerian stability in the economic sector is also under the threat of terror group movements across its vast desert borders with Mali, Tunisia and the very unstable Libya, which has already led to numerous crises that engaged Algerian security forces. In January 2013, a terrorist group sieged a large gas field in In Amenas resulting in many killings among terrorists and hostages. The In Amenas field produces 2% of all of Europe’s gas imports. Algeria, one of the largest countries in North Africa, is now playing a crucial role in the security policy of the region: it supported France during terrorist assaults in Mali and is also crucial in stopping Qaedist movement through Libyan borders. Quite an insidious threat, these new terrorist groups are a combination of two dangerous elements: the old salafi affiliation that tries to gain traction among the population; and some local criminal groups with mid-term interests in power disputes in the region. Their actions towards international targets are the result of a deliberate strategy aimed at endangering crucial economic sectors.

All these factors indicate that President Bouteflika’s succession is a delicate matter – as much as the possibility of him staying in office. When President Bouteflika briefly disappeared in July from the political scene for medical treatment in Paris, rumors were sparked about his possible retirement. In power for the last 12 years, President Bouteflika has long coexisted with Algerian intelligence forces but he has recently taken action to enforce his power at the expense of some generals, taking advantage of a government reshuffle.

Bouteflika’s proxies now control the interior and justice departments. For example, as the Army Chief of Staff Ahmed Gaid Salah is gaining power, the head of the country’s intelligence directorate, General Mohamed “Toufik” Mediene, the so-called “God of Algiers”, is now the man who is in disgrace, despite his successful record in defeating Islamist militants. Also, the leadership of the National Liberation Front no longer represents much of a challenge to the President’s power. Bouteflika could actually run for another term next year, as an amendment to the Constitution he set in 2008 allows him to do so. Alternatively, he could extend his term by two years changing the five-year presidential mandate into a seven-year one.

Even though the National Liberation Front, led by loyalist Ammar Saidani, has renewed his faith in Bouteflika, Algerian youth is facing the same problems that their peers from Morocco to the Arab Peninsula are experiencing. It is true that, as many analysts state, young Algerians are largely an apathetic generation. But there are some attempts to mobilize them for the upcoming presidential elections. The London-based Algerian economist and media commentator Kamal Benkoussa, founder of the Algerian Awakening Movement in 2012, is traveling back and forth to Algiers to test his popularity among young voters.

Should Benkoussa eventually run for office, this would signal the willingness of those elements of the business élite that operate abroad to break with the corrupted political order in Algiers, of which the Sonatrach scandal is only the last in number.

However, Algerian politics is not such an open market and also on the table is the idea that Bouteflika’s brother might be the real master of recent shifts, foreseeing his own political campaign for 2014. Another option for a mild political transition that somehow would mark a difference from the Bouteflika era would be the return of former President Liamine Zéroual as a candidate in 2014.

The political élite, however, is sitting on a tinderbox. Government largesse in the form of more subsidies or handouts might not be enough this time to quell the growing dissatisfaction among Algerian youth. Even though the IMF has revised the Algerian unemployment rate for 2013 from 10% to 9.3%, unemployment among those under 24 remains high, as acknowledged by the Minister of Labor, Employment and Social Security.

It is worthwhile to remember that in the last months of his reign, Gheddafi tried to lure young Libyans with more affordable mortgages and loans. Nevertheless, changes did come abruptly in a society tired of a lack of opportunities and modernity. Algerians may yearn for a milder or more tepid Spring than that of its eastern neighbor, shunning the repetition of the brutal civil war they have already experienced. Yet, they are starting to realize that some political change is essential to improve their lives.

Europe may think it can even do away with the Algerian energy supply, but it surely does not want to face another source of instability on the southern shore of the Mediterranean.