Politics & Policy
Algeria enters 2020 in a state of extreme political uncertainty with President Abdelmadjid Tebboune — who was illegally elected on 12 December on the orders of an army head who died eleven days later — having little or no legitimacy and a newly appointed prime minister and government who inspire no more confidence than their predecessors. Against them stand the Hirak — the popular movement of peaceful protest — which rejects Tebboune’s election as illegitimate and demands the complete abolition of the system which he and his Presidency represent. After more than ten months of continuous peaceful protest — during which the Hirak has resisted and defied the repression and intimidation of the late General Ahmed Gaïd Salah’s military regime — the Hirak is in no mood to give up now.
In short, any attempt at forecasting what might happen can be little more than speculation. There is equal uncertainty about what may happen within the army high command. At the time of Gaïd Salah’s death on 23 December he was possibly only just beginning to come to terms with the plot that his chief of the intelligence service, General Bouazza Ouassini, was hatching against him. Whether Gaïd Salah had started to make any moves against Ouassini, or had passed on whatever knowledge he had of the plot to his interim successor General Saïd Chengriha, is unknown. There is considerable potential for further infighting amongst the Generals. Chengriha’s war crimes in the 1990s, republished by Algeria-Watch at the end of December, may also catch up with him. If he is confirmed as Army Chief of Staff there is likely to be strong opposition from the Hirak and the majority of civil society. On the other hand, passing him over because of his war crimes could unleash further problems within the senior ranks of the army.
This extremely complicated and unique situation will almost certainly become clearer in the coming weeks. There are currently some small signs that both sides — the Presidency and the Hirak — might be able to find a way forward towards dialogue. If this happens, and both sides are sincere, along with all the many other political constituencies and interests sandwiched between them, then Algeria could move towards a peaceful democratic transition and a new ‘Second Republic.’ However, for that to happen, a vast amount of goodwill and trust, which is currently lacking, which have to be established which will be immensely difficult to achieve but not impossible.
The security situation is currently the least problematic issue facing Algeria. Domestic terrorism is at a near all-time low with Algeria ranking amongst the world’s less dangerous countries as far as terrorism is concerned. Externally the situation in the Sahel will almost certainly deteriorate during 2020 but is unlikely to cause more than peripheral trouble to Algeria’s southern margins. The situation in Libya is becoming increasingly worrying as evidenced by the fact that it was top of the agenda at a meeting of the State Security Council in late December. The likely presence of Turkish troops to bolster the Tripoli-based Government of National Accord (GNA) against the rebel Field Marshal Khalifa Haftar’s forces is likely to escalate the existing regional tensions between Egypt, the UAE and Saudi Arabia on the one side and Turkey and Qatar on the other. Despite the talk about Algeria securing its eastern border the likelihood of incursions from Libya are extremely remote.
Domestic unrest remains the greatest security threat facing Algeria although the past ten months have demonstrated that the country’s people, although perhaps not all its security forces, want peaceful non-violent protest.
The rest of the world is gradually losing interest in Algeria. This is largely because of the political crisis which has engulfed the country for over a year. It has shown Algeria’s friends and partners, especially in the West, that under Abdelaziz Bouteflika’s regime it had descended into little more than a highly corrupt mafia state that was probably best left to its own devices. Consequently, multinational companies outside the oil sector had begun to give the country a wide berth. That could very quickly change if the country were to engage in serious political reform along the lines demanded by the Hirak. But that is also likely to be hampered by the country’s seriously deteriorating economy and finances. Politically, its Western allies have begun to give up on the regime because of its abuse of human rights and associated freedoms. However, that too could change very quickly if it and the Hirak were to engage in serious, reform-oriented dialogue. It is significant that very few countries paid much attention to the jerrymandered 12 December presidential election. Most countries merely ‘noted it’ which is the diplomatic snub given to near-pariah states.
Economy and Energy
While the political crisis could conceivably be resolved quite quickly the same cannot be said for ether the economy or the energy sector. Oil production and hydrocarbon revenues are both likely to continue to fall unless there is a major and long-lasting upturn in world oil prices. The bind facing the energy sector is that domestic demand is increasing faster than production so Algeria gradually has less oil to export. This situation has been exacerbated by the government’s many years of ostrich-like navel-gazing in which its extensive renewable energy sources have been virtually ignored. Even if international investment were now put into the hydrocarbons sector it would take around three years before the decline in production could be reversed.
The economic and financial crisis has been deteriorating progressively since oil prices collapsed in 2014. Since then, virtually no action has been taken by successive governments to engage in the urgently needed structural reforms. The result is that financial reserves have fallen from US$194 billion in 2014 to US60 billion today and will continue to fall at approximately US$20 billion in both 2020 and subsequent years until they are exhausted.
Algeria is managing an unsustainably large budget deficit of approximately US$20 billion, or around 10% of GDP per annum, which shows no signs of being alleviated. Indeed, attempts to keep it in some sort of temporary balance by increasing taxes and cutting back on state capital and equipment expenditure are likely to do the country massive economic harm in 2020. The proposed huge reduction in state expenditure — the major contributor to GDP after hydrocarbons revenues — will ensure that per capita GDP growth will fall. It will also have serious social and political consequences as unemployment increases and the people’s spending power reduces. Tebboune and his new government face an exceptionally difficult and challenging year, which — if combined with no resolution of the political crisis — could leave Algeria facing all that it has feared since the dark days of the 1990s.Download PDF