Algeria's economy remains on track despite turbulence in North Africa

Algeria occupies a unique place in North Africa and in the last 15 years has exhibited remarkable continuity in an ever-changing and sometimes volatile region. Over the past four years, the Maghreb region – which encompasses Mauritania, Morocco and Western Sahara, Algeria, Tunisia and Libya – has undergone significant changes, ranging from modest constitutional amendments in Morocco to revolution in Tunisia and civil war in Libya.

Throughout all of this, however, Algeria has maintained an impressive degree of stability, with the government focusing on helping to stave off further unrest in the region and working to strengthen the country’s baseline economic indicators.

System

Algeria has had three constitutions since its founding: in 1963, 1976 and 1989. The 1989 constitution, which allowed for multiparty elections, was modified in 1996 to allow for the creation of political parties as long as they were not defined by religious, racial, linguistic or regional underpinnings.

The executive branch holds more power than the representative bodies, with the office strengthened with each successive constitution, including an amendment in 2008 that abolished the two-term limit – though this may be reversed before President Bouteflika’s current fourth term ends. The president is elected every five years by absolute majority. A second round of voting is used when no candidate receives a majority of the vote in the first round. The president appoints a prime minister, who in turn appoints the Council of Ministers, the primary executive body in the country on which both the head of state and head of government serve.

The country has a bicameral political system, with a lower house (the National People’s Assembly) and an upper chamber (the Council of the Nation). The Council of the Nation has 144 members, 96 of whom are elected through an electoral college on a six-year cycle. The president appoints the remaining members. The National People’s Assembly is a 462-member body elected by proportional representation every five years. Algeria’s legal system is a combination of French civil law and Islamic law, with the Constitutional Council of public officials providing ad hoc judicial reviews of legislation. The Supreme Court has four divisions filled by 150 judges, whose members are appointed by the High Council of Magistracy and have no term limits.

The country is broken up into 48 district wilayas (provinces). The wilayas are overseen by elected Popular Provincial Parliaments, under governors who report directly to the Ministry of Interior.

The wilayas are divided into daira (districts) and further into communes (municipalities). The latter elect between 10 and 18 members every four years onto a committee – Assemblées Populaires Communales – the chairperson of which is directly accountable to the minister of interior.

Arab Spring

Algeria was not affected by the Arab Spring to the same extent as its neighbours, and the country’s current sustained period of stability was a factor in recent elections. Popular protests occurred in early 2011, coinciding with the Arab Spring, but Algeria’s unrest was largely motivated by rising food prices and unemployment levels. The protests were met with public spending increases, which included salary raises for public sector workers and increased consumer goods subsidies, and the protests never gained the critical mass seen in other Arab Spring countries. The state is in the process of introducing legislative reforms to head off potential sources of unrest, but the primary issues seem to be economic rather than political. Protests have continued intermittently, and are often related to inflation, unemployment and power outages.

Recent Elections

The 2014 presidential elections reinforced the turnaround in Algeria since the period of civil war in the 1990s. Bouteflika was elected for a fourth five-year term with 81% of the vote, an indication that the country is on a more stable footing. Indeed, the elections were largely considered fair, with observers reporting that “procedures were conducted in accordance with national legislature and international standards.”

Six opposition parties boycotted the election believing that it would do little to alter a system in which the National Liberation Front (Front de Libération Nationale, FLN) has been the dominant actor since independence from France in 1962.

Disengagement from the political process remains a concern, with turnout for the most recent elections standing at 52%. In an effort to bring about a more representative legislature, the National People’s Assembly was expanded from 389 seats to 462 as part of a series of reforms in 2011. These reforms also reserved one-third of the spots on electoral lists for female candidates, established a judicial panel to oversee the electoral process and loosened many restrictive policies on opposition publications.

Legislative Elections

The most recent local and legislative elections were held in May 2012. Voter turnout for parliamentary elections has traditionally been low, but the 43% participation in 2012 topped the 36% seen in 2007. A total of 44 parties participated in the elections, including seven Islamic parties and several leftist parties.

The FLN increased its share of the expanded assembly from 35% to 47.5%, or 220 seats. The National Rally for Democracy maintained a 15% share with 68 seats. The third-largest group, the Green Alliance, includes three Islamist parties, the MSP, the Movement for Islamic Renaissance, and the Movement for National Reform. The three parties ran on a joint ticket, but performed more poorly than expected, winning just 49 seats (10.6%). The Socialist Forces Front won 27 seats, and the Workers’ Party won 17. The next elections will be held in 2017.

Public Perception

Algeria has taken a number of moves in recent years to address popular concerns over living standards and governance. The success that it is had is in large part a result of the country’s large hydrocarbon revenues, which have helped pay for infrastructure and public subsidies – as in 2011, when public sector workers received a 34% pay raise.

Bouteflika intends for further reforms to be put in place before his tenure comes to an end. In January 2016 he introduced prospective reforms to the constitution, including limiting presidents to two terms. The Coordination pour les Libertés et la Transition Democratique, the opposition coalition that includes the Mouvement de la Société pour la Paix (MSP), has called for more transparency, while Bouteflika has sought greater powers for the parliament and prime minister. The MSP and the FLN were in a coalition until 2012, which may suggest the potential for compromise.

Women’s rights also received a boost in 2016 when a new law took effect to punish violence against women. Some conservative groups encouraged the Senate to block the bill, alleging it may interfere in family affairs, but it passed nonetheless, putting in place penalties that could lead to 10 to 20 years of incarceration if a woman is abused.

The moves by the government to reform the constitution and improve parliamentary and judiciary independence – particularly in contrast to the unrest in other neighbouring countries – have improved public perceptions of domestic governance, although more remains to be done.

An example of this lack of engagement is a 2009 survey by the Arab Barometer, a joint US-Arab academic initiative which illustrates the level of disillusionment with politics. The majority of respondents (67.7%) said they had little or no interest in politics. Furthermore, over 70% of respondents had no, or very little, trust in parliament.

By 2013 the situation had improved somewhat, with the Arab Barometer finding that 32% of respondents felt that the state of democracy and human rights in the country was good or very good, four times higher than in 2011.

The recent drop in hydrocarbons prices on the global market has affected public sector spending, which may result in a review of subsidies and other spending categories, but the country is continuing with its public works programmes, which have dramatically improved infrastructure and connectivity in all 48 wilayas, in some cases bringing much-needed employment and local contracting.

Security

Algeria has so far managed to avoid the spike in violence that many other North African countries have had to deal with over the past few years, although it has not been completely immune.

In March 2016 an attack on Algeria’s largest national gas fields, three years after the In Amenas attack that resulted in 67 deaths, led British oil company BP and Norwegian firm Statoil to pull their employees from the country over security concerns.

However, the government has taken proactive steps to minimise the risk of violence. The government has increased military spending by 176% since 2004, and the country now has the largest defence budget in Africa. A significant proportion of this is spent on securing Algeria’s southern borders in an attempt to ward off threats from Al Qaeda in the Islamic Maghreb and other splinter groups. In 2015, 12,000 troops were sent to protect the border with Tunisia, while similar numbers were sent to the borders with Niger, Mali and Libya.

The policies have had an effect. In June 2016 Algerian troops killed eight alleged. Staffing has also gone up. The number of police officers rose from 90,000 in 2009 to 209,000 by 2014 – one police officer for every 187 citizens – and well above its neighbour, Morocco, which has 1 for every 717 citizens. The army now has more than 500,000 troops, more than 10 times that of neighbouring Tunisia.

Algiers continues to push for greater regional cooperation. Following a bomb attack on a Tunisian presidential guard bus, claimed by ISIS, in November 2015, Ramtane Lamamra, the minister of foreign affairs, announced that the country was ready to work with Tunisia on counter-terrorism. Algeria “is mobilising its capabilities and makes its experience available to Tunisian brothers to fight together against terrorism,” said Lamamra. Algiers has also been pushing efforts to bring greater security to its neighbours by encouraging a move to reach power-sharing and peace deals in both Libya and Mali.

European Ties

Algeria continues to prioritise a strong relationship with the EU, due in part to historical legacies from the French colonial era, bolstered by the EU’s place as Algeria’s largest trading partner and a 2005 reciprocity agreement to ensure further cooperation. The 2002 Association Agreement precipitated the 2011 Action Plan under the European Neighbourhood Partnership Instrument (ENPI) partnership. The ENPI gives Algeria the right to close cooperation on human rights, the environment and civil society, as well as foreign assistance on justice reform and economic reform. It also assures access to the EU Emergency Trust Fund “for stability and addressing root causes of irregular migration and displaced persons in Africa.”

Algeria and the EU’s historical relationship has created a need on both sides to prioritise cooperation, which will likely continue – particularly given that 87% of Algerians characterise their country’s relationship with the EU as positive. High levels of emigration mean many Algerian citizens live in the EU or have relationships with those who do. Of all emigration from Algeria, some 91.2% is to the EU, with 75% of emigrants moving to France.

Economically, there are similarities in the relationship: 72% of oil and 90% of Algeria’s natural gas exports go to Europe. As such, both Algeria and its EU counterparts will continue to rely on each other for a crucial economic resource.

Within Europe, France remains one of Algeria’s biggest partners. French goods make up almost 11% of Algerian imports and trade totalling well over $100bn. Trade between the two countries tripled between 1999 and 2013, and continues to be strong. France also engages in a significant amount of foreign direct investment in Algeria. France and Algeria maintain a close military and security relationship, which in recent years has spread into the civil and cultural domain. For example, in 2016 Algerian imams trained French imams in an effort to create a dialogue on religious experience.

Outlook

Algerian politics remain stable. As the government addresses the gaps presented by the drop in hydrocarbon revenues, and Bouteflika pursues long-term political reform, the political structure may become institutionalised and shore up Algeria’s prominent role as a leader in North Africa.