Political institutions working to adapt to a new context

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

Stability Paramount

The reason for Algeria’s comparative steadiness is in part a product of recent history. The contemporary development of the Algerian state has been shaped by two periods of conflict, a bitter eight-year struggle for independence and a decade-long conflict with extremist groups 23 years ago that resulted in an estimated 200,000 deaths. However, following the successful resolution of the 1990s conflict – brought about in part by negotiations led by current President Abdelaziz Bouteflika – Algeria has since managed to avoid popular unrest and successfully improve living standards for a bulk of the population.

This has been enabled by the country’s sizeable oil and gas resources, which have allowed its hydrocarbons revenues to be channelled into large-scale public expenditure on public housing, health care, education, credit facilities and subsidies on basic goods such as petrol, sugar, flour and cooking oil.

However, Algeria’s limited private sector, nascent domestic industries, rising youth unemployment and the population’s continued disengagement with political life create a series of challenges that must be overcome in the future (see Economy chapter).

The government has indicated that it intends to tackle a number of key reforms, including attempts to streamline its bulky public bureaucracy, ease restrictive foreign direct investment (FDI) conditions and stimulate local industries in order to prepare for the post-hydrocarbons economy.

Brief History

The first armed revolts against French colonial rule began in late 1954, and the bitter independence struggle lasted nearly eight years until July 1962. President Houari Boumediene came to power in 1965 after three years of political jostling, and his government had to work quickly to set up a functioning state and deal with the war’s economic impact. By year-end 1962, 4.5m Algerians were impoverished and unemployment levels were estimated at around 70%, backed up by minimal oil and gas production and limited domestic industries.

To provide a coherent and comprehensive approach to improving health and social indicators, the government adopted a centralised approach to economic development; natural resources, banks and several foreign firms were nationalised in an effort to create a self-sufficient economy.

Widespread oil and gas exploration beginning in the 1970s led to the oil boom that supported economic growth and gradually helped to de-link the Algerian economy from France. The government also invested heavily in infrastructure and industrial production, which gave Algeria some of the highest annual GDP growth rates among developing economies in the late 1970s.

Former President Chadli Bendjedid succeeded Boumediene in 1978 and Algerian economic policy shifted tacks, adopting a gradual transition from a planned socialist economy to more of a free-market one, though still with a nationalist approach.

The government subsequently turned away from heavy industry in the 1980s, dismantling some state-owned firms and shifting investment towards hydrocarbons production and consumer goods.

However, the sharp fall in global oil prices in the mid-1980s cut export revenue and strained public finances. This exacerbated Algeria’s existing issues of high unemployment and under-employment, a large youth population, rising urbanisation levels and expanding urban slums.

Elections & Parties

The National Liberation Front (Front de Libération Nationale, FLN), which waged Algeria’s fight for independence, has been the ruling party since independence. Under Boumediene, the government adopted a centralised, opaque operating style, reinforced by a single-party system. While this began to ease under the more moderate Bendjedid after 1978, the single-party system persisted until the late 1980s.

Worsening economic conditions in the 1980s sparked widespread popular protests over unemployment, food prices and the people’s inability to influence policy making. In response, the government introduced a number of constitutional and electoral reforms, including the adoption of a new constitution in 1989 that loosened restrictions on the press, decreased the military’s role in politics and ended the single-party system. At least 40 political parties were created in the two-year lead-up to legislative elections in 1991.

One of these new parties, the Islamic Salvation Front (Front Islamique du Salut, FIS), included a mix of moderate and extremist Islamist representatives and quickly gained a large following. The FIS won in the first round of parliamentary elections in December 1991, prompting military intervention shortly before the second round of elections in January.

This began a civil conflict between government forces and armed Islamist groups in what came to be known as the “black decade”, which saw significant civilian casualties and allegations of human rights abuses on both sides.

Reconciliation & Reform

After several failed attempts to end the conflict, violence began to quell in 1999 under newly elected President Bouteflika. The state introduced an amnesty programme under which an estimated 85% of militants laid down arms. The Armed Islamic Group, which adopted violent tactics in 1992 after the military government voided the FIS victory, largely disappeared in the early 2000s. However, a small splinter group, Al Qaeda in the Islamic Maghreb, previously known as the Salafist Group for Preaching and Combat, claims to still remain active in the region.

A charter of national unity was adopted by national referendum in 2005, offering a second round of amnesty to remaining militants. Since then, the state has pursued a policy of national integration, political pluralism and rule of law.

Post-2011

Algeria has managed to avoid the worst excesses of the unrest that has otherwise impacted a number of the Maghreb’s economies, in part due to the country’s recent experiences.

However, the country did see a handful of smaller protests in 2011, which were primarily motivated by economic issues such as inflation, food prices and unemployment. The protests were met with public spending increases, and the government accelerated capital expenditures on areas including health, infrastructure, agriculture and manufacturing in a bid to directly address some of the most prominent points of concern among the population.

Government Structure

The Algerian executive branch is led by the president, who is elected by popular vote to five-year terms. The constitution was amended in 2008 to abolish term limits, allowing Bouteflika, aged 77, to run for a fourth term. Bouteflika, who has experienced a number of health issues in recent years, won the April election with 81.5% of the vote, according to official statistics. Runner-up Ali Benflis received 12.18% of the vote. Voter turnout reached 51.7%, but six opposition parties boycotted the election, alleging voter fraud.

Algeria’s bicameral legislature is composed of a 144-seat National Council, the upper house and the 462-seat National People’s Assembly. One-third of Council members are appointed by the president and two-thirds by indirect vote for six-year terms. Half of the Council is renewed every three years, and National Assembly members are elected by popular vote to five-year terms.

Legislative Elections

In an effort to bring about a more representative legislature, the National Assembly was expanded from 389 seats to 462 seats as part of a series of reforms adopted in 2011. These reforms also reserved one-third of spots on electoral lists for female candidates, established a judicial panel to oversee the electoral process and loosened restrictions on opposition publications.

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% turnout seen in 2007. A total of 44 parties participated in the elections, including seven Islamic parties.

The FLN increased its share of the expanded assembly from 35% to 47.5%, or 220 seats. The National Rally for Democracy (Rassemblement National Démocratique, RND) maintained a roughly 15% share with 68 seats. The third-largest group, the Green Alliance, includes three moderate Islamist parties, the Movement for Society and Peace, 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.

Abdelmalek Sellal assumed the office of prime minister in September 2012. Sellal, who has held several ministerial and local posts, replaced former Prime Minister Ahmed Ouyahia of the RND party.

Economic & Constitutional Reforms

The government’s new five-year economic plan, stretching from 2015 to 2019, focuses on rebuilding local industry and boosting agricultural output in an effort to reduce its ever-rising import bill. Public and foreign investment plans in these sectors should help to expand domestic output in the medium term and also create new employment opportunities, especially for the country’s growing cohort of unemployed youth (see Economy chapter).

The new five-year plan also aims to encourage new hydrocarbons exploration and to continue public infrastructure building, primarily in social housing and transport networks. Finally, new financial measures will be made available to develop the country’s limited private sector by supporting small and medium-sized enterprises. The government announced that the 2015-19 plan would entail public expenditure of AD21trn (€195.3bn).

The government also committed to engage a constitutional reform process as part of the reforms adopted in 2011. The most recent round of consultations, hosted by cabinet director and former Prime Minister Ahmed Ouyahia, began in June 2014.

The presidency suggested a number of reforms aimed primarily at reinforcing the independence of the judiciary, strengthening the role of parliament, affirming the rights of opposition parties and protecting civil liberties. Specifically, this includes measures to reintroduce presidential term limits, expand investigations into political corruption, provide greater scope of activity to the prime minister and improve freedom of the press, religion, and the right to assembly and engage in peaceful protest.

All political parties and important national figures were invited to join the consultations, although not all of them did. At the same time in June 2014, opposition parties held a counter forum under the banner of the National Coordination for Liberty and Democratic Transition (CNLTD) in an effort to encourage collaboration among the country’s disparate opposition groups. The CNLTD hosted a second conference in August 2014, which was widely attended by both moderate and radical parties, but they have yet to establish a united front outside of calls for greater democratisation.

Outlook

Perhaps the defining trait of the Algerian political scene is stability, with President Bouteflika now beginning his fourth five-year term, and the FLN now onto its fourth decade of electoral victories. This has allowed the government to chart out long-term reforms and execute them accordingly, with some success – and that in turn has helped the country steer clear of the unrest that has affected other Maghreb countries in recent years.

Increased public expenditure and housing construction programmes have had a positive impact in the last three years, although to ensure sustained economic expansion over the long term, the government has sought to ensure that the rise in public spending is accompanied by real growth in the nonhydrocarbons economy and the development of an independent private sector.

While Algeria’s state structure is heavy, it is also stable, and the country’s presence in North Africa will continue to draw foreign investment and strengthen regional security in the coming years.

Share

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Algeria 2014

Country Profile chapter from The Report: Algeria 2014

Cover of The Report: Algeria 2014

The Report

This article is from the Country Profile chapter of The Report: Algeria 2014. Explore other chapters from this report.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart