Algerian president rebuffs prime minister over privatisation efforts

Bouteflika’s decision to counter Ouyahia shed light on renewed political infighting.
Sunday 28/01/2018
Limits on power. Algerian Prime Minister Ahmed Ouyahia leaves the podium after presenting the government’s programme to the parliament, last September.   (AFP)
Limits on power. Algerian Prime Minister Ahmed Ouyahia leaves the podium after presenting the government’s programme to the parliament, last September. (AFP)

TUNIS - A decision by Algerian President Abdelaziz Bouteflika blocking Prime Minister Ahmed Ouyahia from selling state assets cast doubt on Ouyahia’s political future and shed light on renewed political infighting.

Ouyahia signed an order to put stakes in small state enterprises up for sale but the directive was quickly struck down by Bouteflika, Algerian media reported.

Ouyahia’s attempt at privatisation was part of an economic reform package, announced in December, that would allow some public-private partnerships in which state companies retain majority ownership.

Bouteflika’s statement did not condemn the selling of state assets but said “any privatisation must be approved by the president from the beginning to the end.”

Analysts said Bouteflika’s decision to counter Ouyahia indicated the prime minister’s job could be in danger.

“Ouyahia appears to be carried away by the momentum of his political ambitions,” said political analyst Djilali Benayoub. “He believes that his hour has come. That explains the all-out attacks on him from the presidential camp, his government record, his aides and his friends in the business community.”

“The presidential order is, in fact, a slap on the face to Ouyahia,” said political analyst Mehdi Mehenni. “It also raises the question about what is happening in the presidency. Ouyahia, who has presidential ambitions, seeks to have the support of business circles that his predecessor sought to fight.”

Many drew comparisons between Ouyahia and Abdelmajid Tebboune, who was ousted as prime minister after only three months in office.

“Tebboune lost his job following a similar scenario because of his resistance to the powerful oligarchy,” wrote political commentator Omar Berbiche in the influential El Watan daily. Tebboune fought to diminish the role of money in politics.

Berbiche added that Ouyahia has been the target of “stinging attacks” over his policies. Much of the criticism has come from political allies.

Among those to speak out against Ouyahia were National Liberation Front Secretary-General Djamel Ould Abbes and Chakib Khelil, a former energy minister who was accused in a high-profile corruption scandal in 2010.

When that scandal broke, Ouyahia was one of the few senior Algerian officials to support Khelil, who was subject to an international arrest warrant and lived in self-exile in the United States until it was lifted early last year.

Despite the attacks on Ouyahia, economists said his plan to privatise state companies is necessary.

“The prime minister’s move is a response to a reality most experts agree on,” said Algerian economist Alexander Kateb. “The sale of stakes of state companies is part of reforms which had been put off for several years.

“Paying the debts of these money-losing companies costs the government several billion US dollars per year. It makes sense to transfer such a burden to the private sector.”

Algeria has about 1,200 state companies employing 400,000 workers, government figures state. An estimated 80% of the companies failed to make a profit.

However, with presidential elections in 2019, the social and political costs of Ouyahia’s plan could be high.

“Such an operation is risky as most of these enterprises are not viable and are likely to end on the scrap heap as their buyers are mostly interested in their real estate assets,” said Kateb, adding the move could result in the loss of tens of thousands of jobs.

In 1996, a privatisation campaign spearheaded by Ouyahia led to the sale of about 1,000 state enterprises and the loss of 130,000 jobs.

“That operation was ill-prepared,” said Kateb. “It caused the disappearance of state firms and the de-industrialisation of the country and discredited the value of reforms to the public.”

Bouteflika’s public move to block Ouyahia from carrying out the sell-off earned the president praise from nationalist and socialist parties.

Analysts said Ouyahia would be careful to make further decisions on privatisation without working with the president.