This year, Algeria, the largest of the Maghrebi countries of north-west Africa, will mark 50 years of independence from its former ruler France. But the celebrations are set to be heavily subdued by the population’s widespread frustration over social inequalities, unemployment, and the decrepitude of public institutions and infrastructures, the very same issues that prompted the Arab Spring uprisings among its neighbours to the east.
During the Arab revolts of 2011, Algeria, with a population of 36.3 million according to 2011 estimates by its National Statistics Office, stayed largely out of the spotlight.
A number of observers have argued that the country is unable to benefit from the winds of change blowing from neighbouring Tunisia, pointing back to the dark decade of terrorism during the 1990s in which 200,000 Algerians perished [1] and, with them, the hope of a democratic future based on social progress and the fair distribution of wealth. Indeed, terrorism is not a thing of the past, as seen this summer with the attacks in and around Tizi Ouzou.
But is Algeria irretrievably lost for the Arab Spring, more than 20 years after the failed 1988 revolution [2]? It is important to remember that the source of the revolts last year was primarily economic and in this area, a close study of the characteristics of the region shows that, over the last 30 years, Algeria's development perfectly matches that of Tunisia.
Since the 1970s, Algeria has found itself a leader among Arab countries in the race to catch-up with the industrialised nations. Over the last 40 years, five Arab countries (Oman, Saudi Arabia, Tunisia, Algeria and Morocco) have ranked in the top ten for progress in improving their standing in the Human Development Index established by the United Nations Development Program (UNDP). While at the end of the 1960s Algeria was at the same level as countries in sub-Saharan Africa such as Congo, today it has joined "the first world" regarding a number of indicators, including life expectancy.
A general improvement in living standards in the Arab world was responsible for the democratic uprising in Tunisia, according to the 2011 UNDP report. "The recent pro-democracy protests across the Arab States began in Tunisia and Egypt, driven in both cases by educated urban youth. [...] In the long run people who have attained higher levels of education and who have experienced rising living standards are unwilling to tolerate continued autocratic rule," the report says.
The report concludes, however, that this "has led to other contradictions, with rising but unfulfilled expectations often generating deep social frustrations. Inequality has increased while cellphones and Twitter™ have permitted more rapid transmission of ideas. Many analysts have pointed to high unemployment and underemployment among educated youth as a key factor driving political dissent in the region. Half the population in the Arab States is under 25, and youth unemployment rates are nearly double the global average".
This volatile demographic situation can be found in Algeria, which is only 96th on the UNDP index, below Tunisia at 92nd [3]. This is ironic for a country that, unlike its neighbours, benefits from major resources of oil and gas.
-------------------------
1: In December 1991, the Islamic Salvation Front (FIS) won a landslide victory in the first round of legislative elections. Fearing the imposition of sharia law, which it found unacceptable, the military stepped in, cancelled the elections and arrested FIS members, including some of its leaders. Then-president Chadli Benjedid was forced to resign and the military appointed Mohammed Boudiaf to replace him. The FIS was banned in May 1992. The international community did not condemn the military take over. The banned FIS joined forces with the more radical Armed Islamic Group (GIA) and a bloody civil war ensued with atrocities committed by both sides. Presidential elections were held in 1999. Abdelaziz Bouteflika ran unopposed after the other candidates withdrew over allegations of fraud.
2: Unrest during the autumn of 1988 was initiated at street-level by Algerian youth demanding greater economic opportunities. Riots broke out nation-wide and resulted in the fall of the single-party system in place since independence, leading to short-lived democratic reform and the thwarted elections of 1991.
3: Congo is ranked 137th and the Democratic Republic of Congo is 187th.
IMF praise hides grim reality
Ostensibly, all is well in the best of all possible worlds. Algerian President Abdelaziz Bouteflika, a leader of "national reconciliation" after the dark decade of terrorism, announced ambitious quantified targets for the 2005-2009 stimulus plan including a per capita revenue of $3,000, foreign debt reduced to $10 billion, the building of 800,000 homes and a reduction in the unemployment rate to below 10%. According to official statistics, these goals have been achieved, or nearly so.
At the end of 2011, analysts with the International Monetary Fund (IMF) were full of praise for the Algerian economy. "In an uncertain international context, Algeria continues to show strong economic performance buoyed largely by public investment,” read an IMF statement following an October 2011 mission visit to Algeria. “Prudent macroeconomic policies pursued in the past have helped Algeria build a solid financial position with very low debt levels. [...] Macroeconomic performance remains robust in 2011."
Enlargement : Illustration 1
Nonetheless one reason for concern, noted the IMF, was that "the overall unemployment rate has declined, but remains high for certain segments of the population." And that is the weakness of the Algerian economy, a structural weakness that becomes apparent through the data supplied by the World Bank (see here), which shows, among other things, that the level of literacy has peaked at 73%, 20 points below its Tunisian neighbour.
Similarly, the hundreds of demonstrations throughout the country in 2011 illustrate, if need be, the gap in development and prospects that lies behind the IMF's macroeconomic assessment. Last month, Chéraga, a western suburb of the capital Algiers, located a few kilometres from the presidential palace, was the scene of violent unrest which, while sparked by the release of suspects in a local murder case, was borne of deep frustration over youth unemployment.
It appears a baffling paradox that while the government claimed to hold $155 billion in foreign reserves in 2011, Algeria is currently a less developed country than its Tunisian neighbour.
Austerity measures ahead
All serious studies conducted since the beginning of the 2000s agree that the Algerian economy has reached an impasse similar to the mismanagement in Saudi Arabia. It has dilapidated the largest natural resource in the history of modern economics without diversifying its domestic economy or creating the conditions for the social and intellectual development of its people.
Financed by the European Union, a study of Algeria's economic structures shows the imbalances in the contributions of different sectors to the country's gross domestic product (GDP). In 2005, the study shows, gas and oil accounted for 47.5% of Algeria's GDP and 98% of its exports. In the end, "85% of GDP is supplied by SONATRACH (the national gas and oil company) and State spending," the study says. This trend has continued, confirms a 2008 Algeria study by the Organization for Economic Cooperation and Development (OECD).
The failure to diversify makes it impossible for a domestic market to emerge, hinders the creation of small businesses and impedes the redistribution of wealth to the population. "The Algerian generals who took power in the mid-1990s pushed the Algerian economy towards an import-based system, including up to three quarters of food stuffs," comments Jean-Baptiste Rivoire, a journalist and author of several books on contemporary Algeria. "And why? Because when you import, you sign a contract with a foreign producer on whom you can levy a commission. Here's an example which illustrates well the Algerian situation: a few years ago an entrepreneur from Tizi Ouzou tried to start a factory to make television sets. This project vexed a general who imported television sets from Korea. End result: the factory of the entrepreneur from Tizi Ouzou was finally blown up in an attack. For us – France – the situation suits us well, it gives us a market for our products," he says.
Under this system of "single-industry development," France remains the ideal partner and is indeed the prime trading partner of Bouteflika's Algeria. On January 31st, former French prime minister Jean-Pierre Raffarin, sent by the French government to ensure the signature of several new contracts, was interviewed by news website Tout sur l'Algérie (‘Everything about Algeria’). "Fifty years after Algerian independence," asked the journalist, "many public services such as water utilities in Algiers and Constantine, the metro and the Algiers airport are still managed by the French. Why has there been no transfer of know-how to Algerians so they can manage these services themselves?" Raffarin responded: "Exactly, these are short-term contracts with a major component for the transfer of know-how, and for training, with the aim of allowing the concerned Algerian public operators to take over the management of these public services, when they deem it advisable, strengthened by the experience acquired from the current French firms to whom they have delegated".
The lack of planned diversification of the Algerian economy appears set to create even more difficulties for the population as oil revenues become more volatile over coming years. The fluctuating oil prices coupled with the international financial crisis have prompted the IMF to call on Algeria to cut back spending.
The 50th anniversary, on March 18th, 2012, of the Evian Accords, which sealed a ceasefire that ended the bloody Algerian independence war, looms morosely on the horizon. For Algerians can look forward to a gloomy independence anniversary, amid austerity measures and legislative elections that propose no democratic alternative. In this context, the regime in Algiers would have good reason to fear that the winds of change from the Arab Spring will begin blowing west.
-------------------------
English version: Patricia Brett
(Editing by Graham Tearse)