Rabat – Titled “Breaking Algeria’s Political Paralysis,” the November 19 report offers a grim reading of Algeria’s current politico-economic system.
The report found that the uncertain and chaotic price fluctuations that characterized the global oil market in 2014-2017 have dealt a serious blow to Algeria’s relatively successful post-1990s rentier state model, renting its resources out to foreign clients.
And despite the fact the global oil market has somewhat recovered from the chaotic 2014-2017 years, the overall perception for Algerians and Algeria observers is that the country is in dire need of bold and “courageous reforms.”
“The state can no longer afford to postpone” reforms, the study warned, pointing to the pressing need to “break Algeria’s [ongoing] economic paralysis.” It insisted that profound social and political crises loom on the horizons if authorities in Algiers maintain the current trend.
“Despite an increase in revenues in 2018 due to a recovery in oil prices (which might not last), a potential economic crisis could come as soon as 2019,” the study asserted.
Algeria’s current unsustainable socio-economic model includes political complacency, lavish state spending, exclusion of youth from decision-making, the political elite’s sense of entitlement, and over-dependence on oil revenues, according to the report.
The Bouteflika factor
In 1999, current president Abdelaziz Bouteflika ascended to the country’s premier political office following a violent and bloody civil war that paralyzed Algeria in the 1990s.
Bouteflika’s rentier system—using oil revenues to buy voters and elite’s loyalty—maintained a sense of economic and social stability.
Starting in 2011, the Arab Spring’s mass popular uprisings in the MENA region destabilized and overthrew many regimes.
Bouteflika’s regime, however, armed with lavish oil revenues, succeeded in averting turmoil. Algiers bid on state generosity and rent distribution to curb any prospects of popular uprisings.
The result, according to ICG, was a semblance of social peace and a sketchy and unsustainable economic model maintained at the expense of the bold reforms needed.
However, current developments in the region and international politics have made Algiers’ rentier regime unsustainable and doomed to fail sooner rather than later if urgent steps are not taken to reverse the political elite’s complacency.
While President Bouteflika rose to political prominence after Algeria’s lost 1990s decades as the engineer of the social peace and oil-driven economic prosperity, the 81-year-old’s insistence on running for a fifth term in 2019 has become a source of deep uncertainty. Crises and social unrests are a possibility if the current political class ignores surging demands for change and reforms.
“Bouteflika’s administration, having leveraged Algerians’ past traumas into its own overextension, is unable or unwilling to confront succession” despite the fact that “prominent Algerians have repeatedly and publicly questioned whether Bouteflika is governing the country in reality.”
President Bouteflika’s severely declining health since his 2013 stroke, coupled with his extremely rare public appearances, have led many to argue that he is not in a situation to govern Algeria. State power in Algiers now lies in the president’s restricted circle of army officers and a handful of technocrats, and not the president himself.
While President Bouteflika glued Algerian society together in the wake of the 1990s crises and restored national confidence and pride, the now “aging and ailing” president’s unwillingness “to pass the torch to a new generation” has become “a factor that contributes to a general sense of paralysis.”
But, given the pervading sense of paralysis and chaos lurking beneath Algiers’ apparent socio-economic stability, what is to be done? What should Algeria’s leadership do to avoid the grim picture that ICG’s report has painted?
The first move would be to diversity the country’s economy, ICG argued.
As with other rentier states where the status quo thrives on political paternalism and the disruption of the traditional “no taxation without representation” narrative, Algeria “should seek to renegotiate an implicit social contract between the state and its citizens.”
Also crucial in the reform agenda is curtailing corruption, “wasteful spending,” and “highly opaque” decision-making.
The success of such reforms passes through “intra-governmental communication and cooperation” as well as the inclusion of the voices and needs of those who have been traditionally left out, particularly the youth and entrepreneurs.
“Given the public perception that a small elite has captured the state,” what Algeria now needs is to uphold political accountability and transparency. A further step is to devise a new economic model that embraces a diversity of economic, political, and societal actors in building a new system that can ensure both stability and growth.
Failure to do so, ICG warned, will precipitate Algeria into another decade of deep successive crises, not later than 2019.