Algeria has been a rare phenomenon in that it was immune to the Arab Spring. Despite sharing similarities with its North African counterparts, Algeria remained relatively stable while a trend of sweeping rebellions toppled governments in Tunisia, Libya and Egypt.
Why is it that when Tunisian street vendor Mohamed Bouazizi set himself on fire out of protest in a suburb of Tunis in December 2010, sparking an explosion of pent up frustration across the Arab world, Algerians on the most part were unaffected?
Is Algeria really an exception in the Arab world, or is it heading towards the same fate as other North African countries?
Too Many Eggs in One Basket
With around 40 million people, Algeria is the second most populous country in North Africa after Egypt. And despite its 1,600 kilometre-long coastline on the Mediterranean, it has not become a popular tourism destination, unlike its neighbours Morocco and and Tunisia.
Instead, the country depends heavily on natural gas exports for income. In fact, around 60 percent of the state budget comes from oil and gas exports, which account for about 97 percent of all exports from Algeria. The country is currently the third largest gas supplier to Europe after Russia and Norway.
But the dip in international oil and gas prices in recent years has sent the Algerian economy tumbling. Decreasing demand in Europe had already seen gas oil and exports to the continent decline since 2009.
Cash Running Out
Algeria has an increasingly disgruntled young population that suffers from high unemployment and poverty. In addition, the country is experiencing a major housing crisis, topped off with high consumer prices, low salaries and a widening gap between social classes.
The crisis has forced the government to delve deep into its foreign exchange reserves. “Total reserves have fallen from $194 billion in 2013 to an estimated $108 billion in 2016 and are projected to decline further to $60 billion in 2018,” a World Bank report states.
Algeria’s central bank has warned that if this slide continues, the country’s foreign exchange reserves could diminish. Despite this, state-owned energy firm Sonatrach, which generates approximately 30 percent of the country’s gross domestic product, announced it would pump $90 billion into new projects by 2020 to encourage investment.
But heavy regulations and high taxes make the Algerian energy sector an extremely difficult place for investors to make a profit. Laws stipulate that Sonatrach takes at least a 51 percent stake in oil and gas deals with international partners.
The Algerian government then taxes up to 90 percent of revenue made from such deals. Due to bureaucratic hurdles, it can also take up to 17 years for energy firms operating in Algeria to start the production process, around three times longer than the global average. Therefore, two recent energy bidding tenders failed to generate much interest.
A 2016 report on the impact of low oil prices on Algeria said that companies like Sonatrach need to “finance their investments” to return to the international market, but argues that it is “highly debatable that this would be financially feasible for Sonatrach.”
No Long-term Plan
When the Arab Spring kicked off in 2011, around a quarter of the country’s population was living below the poverty line. Small pockets of protests emerged across the country, but the government was able to extinguish the flames of discontent by increasing civil servant wages by 34 percent.
The government wage bill was also revised to allocate 25 percent of all pay to public workers and food subsidies.
But this was simply a short-term solution to buy time for the government. “The regime has been good at coping with social anger and frustration until now by spending and buying social peace,” Dr. Dalia Ghanem-Yazbeck, an Algerian political analyst at the Carnegie Middle East Center said.
“If the financial situation will not allow it anymore, repressive measures would be used if needed,” she added.
The country’s 80-year-old president, Abdelaziz Bouteflika, who is now in his fourth term, was diagnosed with stomach cancer during his second term in office. He has hardly been seen in public since suffering a stroke in 2014. The wheelchair-bound leader is said to communicate with his ministers via letters as he struggles to speak.
With the next presidential election not scheduled until 2019, there have been calls for early polls, but supporters of Bouteflika have denied rumours that the president is unable to rule. “The president is fine, the country is fine, the party is fine,” the head of the country’s ruling National Liberation Front (FLN), Amar Saadani, said in 2016.
Even if the country goes on to elect a new president, there is currently no clear successor in the race to challenge Bouteflika’s rule. Algerian Energy Minister Chakib Khelil has been tipped as the favourite to replace Bouteflika, but the US-educated technocrat may be disqualified from entering the presidential race due to the constitution barring candidates who have lived abroad for a long time or have married a foreigner.
Bouteflika himself was brought to power with the support of the DRS, the country’s intelligence agency, which had been led by Gen. Mohamed Mediène since 1990. But in 2015, Mediène was replaced after 25 years of service. The DRS was then disbanded and replaced by a new agency, the DSS, which reports directly to the president.
Later in 2015, Mediène’s deputy Gen. Abdelkader Ait-Ouarabi was arrested and sentenced to five years for destroying official documents. The court did not permit Mediène to testify on his behalf. But Mediène called on the authorities to release Ait-Ouarabi, saying that his deputy was just carrying out his orders.
Furthermore, businessmen previously close to Bouteflika have been distanced, having fallen out of favour for oligarchs closely linked with the president’s brother Said.
This had led many to doubt whether Bouteflika is even in charge. Opposition leader Ali Benflis has alleged that Bouteflika’s ill-health has left a “vacancy of power” which has been seized by “extra-constitutional forces” from the president’s entourage.
Having been in power for 18 years, Bouteflika has largely maintained peace and stability in the country, which is recovering from a crippling civil war that plagued it throughout much of the 1990s. But the country still isn’t free from militancy.
In January 2013, an Al Qaeda-linked group took hostages at a gas plant in In Amenas. Thirty-nine foreign workers and one Algerian were killed in the attack. Gas facilities in Algeria also came under an Al Qaeda rocket attack in March last year.
After the fall of Muammar Gaddafi in Libya, huge quantities of weapons were looted from the country and landed in the hands of armed groups like Boko Haram in Nigeria. Algeria has thus far kept such groups largely at bay, but the weakening of the Algerian government could give militants, who can easily mobilise through the country’s porous desert boundaries, more room to gain ground.
But years of fighting have made Algerians weary of falling back into conflict, making a delayed Arab Spring highly unlikely, according to Dr. Ghanem-Yazbeck. “Algerians are eager for change but not by violent means. They paid a hefty price in the 1990s and they do not want to sacrifice thousands of lives again,” she said.