Algeria’s socio-economic pressures are daunting

Friday 30/10/2015
A view of the centre of the Algerian capital, Algiers.

Algeria is often depicted as one of, if not the, big excep­tions in the “Arab spring” revolts. Although Algeria gives the impression of having succeeded to control social unrest, the country faces the real risk of chaos if proper reforms are not introduced.
Abdelaziz Bouteflika rose to prominence in 1999 at the end of a decade of civil strife. This conflict marked Algerians profoundly and caused them deep-seated trauma for years.
In the 2000s Algeria faced huge social and economic challenges. Unemployment exceeded 50% in rural areas. Algeria was confronted with a large trade deficit and seri­ous debt crisis. The housing situa­tion was very acute.
There were more favourable con­ditions after 2000. Thanks to much higher energy prices, external debt was eliminated overnight. Algeria enjoyed fast-growing international currency reserves, totalling $200 billion by 2012.
Those financial conditions al­lowed the government to spend lavishly on social welfare. It put into force ambitious infrastructure programmes, such as building the East-West Highway, the biggest mosque in Africa and hydraulic installations. About $800 billion was spent during Bouteflika’s first three terms.
It was crucial to buy social peace and political stability. The office discourse insisted that “the wave of ‘Arab spring’ should not reach Algeria” so public-sector workers obtained important wage increases and the government injected $35 billion in micro-credits to help young entrepreneurs. All this money resulted in a specula­tive economy that fuelled inflation.
However, there was no attempt to open political participation for civil society and parties. As a result, the energy sector still ac­counts for more than two-thirds of government revenues and nearly 98% of exports. Successive governments have failed to break the dependence on oil and gas. Economic diversification has been a mere slogan.
When energy prices suddenly dropped, an oil shock hit Algeria, as it did many countries that heavily rely on energy windfalls.
The social issue is much more problematic than thought. In 2010, security forces were involved in more than 10,000 “public inci­dents”. Riots, sits-in, marches, roadblocks, strikes, self-immola­tion and illegal migration spread across the country. Protests, indi­vidual and collective, occurred on a daily basis.
Protests gathered new momen­tum when they took place in oil and gas rich regions of the south. This natural wealth did not trans­late into development projects to improve living conditions of the local population.
Unemployed young people dem­onstrated in the front of Ourgla’s National Employment Agency. College graduates, frustrated by the lack of employment opportunities, burned their diplomas.
Popular discontent rapidly spread. Protests in the south took on clear political overtones that were missing in northern social demonstrations. Protesters raised the issue of shale gas and corrup­tion scandals in the energy sector. A huge demonstration took place in the city of El-Oued on March 30, 2013, and on July 5, 2014, the 53rd national independence celebration; riots caused 13 deaths in Ghardaia before the government managed to put down the southern movement.
There has been a decline in unemployment in the last decade, when the rate averaged 11%. But most jobs created are precarious and temporary. They are in infor­mal-sector activities, poorly paid and offer no social benefits.
The young suffer more than adults from the absence of eco­nomic opportunities. Unemploy­ment among recent university graduates is as high as 40% and youth account for three-quarters of unemployed Algerians.
Oil revenues will most likely continue to decrease; the old oil system is probably gone forever. All these “petty jobs” will vanish, as infrastructural projects have been cancelled. The number of young people attempting illegal immigra­tion is increasing every month.
Today more than 70% of Algeri­ans live in cities compared to 40% in the early 1980s. People under the age of 30 account for 70% of the population. There are 1.2 million college students. The creation of new jobs does not exceed 200,000 per year.
The question of who might suc­ceed ailing president Bouteflika is raising serious concerns. Algeria will have spent its foreign savings by the end of his fourth term, in 2019.
Social grievances are, mean­while, mounting. A new genera­tion is challenging a political class deriving its legitimacy from the struggle against colonial rule. The regime’s stability could also be threatened by military generals who are unhappy with the security sector reform.
Without real political reform at the top level, chaos is most likely to occur in Algeria triggering wider instability in the Maghreb.