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Algeria Poses a Serious Economic Challenge to Future Government

Besides the popular uprising at home, the current rulers must also keep an eye on regional hotspots, including neighboring Libya

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politics, africa, algeria
A protester chants slogans during a demonstration against Algeria's leadership, in Algiers, April 12, 2019. VOA

The tens of thousands of protesters who have taken to the streets for an eighth straight week aren’t the only crisis roiling Algeria. Helping to drive the unrest in Africa’s largest nation—and posing a serious challenge to any future government— is the economy.

Two months of mass demonstrations continued Friday, as Algerians pushed for a broader overhaul of the country’s system, despite elections set for July 4 by newly appointed interim leader, Abdelkader Bensalah. The protests have been largely peaceful, although there were some clashes reported this time along with scores of arrests, and police used water cannons and teargas in the capital Algiers.

“Bensalah, clear off, FLN clear off,” protesters chanted, referring to Algeria’s ruling party.

But many are also calling for a fundamental reboot of the country’s ailing, energy dependent economy that has failed to diversify and deliver jobs to its majority-young population. The unrest, in turn, is adding to Algeria’s economic headaches, analysts say.

“The economy is not in good shape,” said Paris-based Algerian analyst Alexandre Kateb. “The protests are the last straw, but the economic problems go deeper than that.”

algeria, politics
Tens of thousands of Algerians are seen gathered for a demonstration against the country’s leadership, in Algiers, April 12, 2019. VOA

Critics have long accused a power elite surrounding former president Abdelaziz Bouteflika of mismanagement and corruption, arguing a large chunk of the wealth is pocketed by a privileged minority. But for years, Algeria’s oil- and gas-rich economy served as a salve for a restless nation, helping to bankroll housing and other social subsidies.

It may be one explanation, some say—along with the country’s devastating 1990s civil war—why the broader Arab Spring uprising of 2011 failed to take off in Algeria.

Falling oil prices

But plummeting oil prices several years later helped to thin wallets and sharpen grassroots anger. Today, more than one-quarter of people under 25 are unemployed, and many Algerians work in the country’s vast informal sector. Successive governments have failed to privatize and capitalize on promising sectors for development such as tourism and agro-industry.

Earlier this week, the International Monetary Fund downgraded the country’s 2019 forecasted growth to 2.3 percent, from a previous 2.7 percent last October.

“The main motivation is still political,” analyst Kateb said of the protests. “But if the economic situation was better, probably the momentum would be less important. We would not have seen the magnitude of the protests that we see now.”

In the immediate future, Algeria’s economic woes may take a back seat. Besides the popular uprising at home, the current rulers must also keep an eye on regional hotspots, including neighboring Libya.

“From an interim government perspective, it’s just about maintaining stability and avoiding any real crisis beyond where we are at the moment,” said Adel Hamaizia, a North Africa expert for London-based think-tank Chatham House.

Algeria, politics
Young people chant slogans during an anti-government demonstration in Algiers, Algeria, April 10, 2019. VOA

“But whoever comes in really has to finally lead an ambitious economic program,” he added, “which helps Algeria realize its potential, develop an independent private sector, diversify, and attract investment on the correct terms.”

Those challenges are daunting. The ruling National Liberation Front or FLN party, in power since independence, has had little incentive to change a status quo that benefited them, many analysts say. Algeria’s business climate has been a turn-off for foreign investors. A case in point: a rule stipulating 51 percent of company shares must be owned by in-country nationals or businesses.

Although energy production continued to chug on during Algeria’s so called “black decade” of violence in the 1990s, further growth stalled. When he came to power in 1999, Bouteflika was credited for ushering in peace. At the beginning, analyst Kateb said, the former president also tried to reform the economy.

“I think he really wanted to give more freedom to entrepreneurs, he really tried to privatize the system,” Kateb said, adding subsequent financial scandals and the global financial crisis ended hope for change.

Inertia and bureaucracy

Kateb, who later served as an economic advisor to ex-prime minister Abelmalek Sellal, said subsequent reform efforts also stalled.

“If you don’t change the whole functioning of the system,” he said, “whatever you do at the margins will be completely absorbed by this inertia and black hole of government bureaucracy.”

algeria, politics
An elderly woman confronts security forces during an anti-government demonstration in Algiers, Algeria, April 10, 2019. VOA

If July elections go through as planned, Algerians will be strongly pushing for economic deliverables.

“I’m sure the many of the slogans are going to be centered around anti-corruption, inclusive growth, economic justice, diversification, and job creation,” said Hamaizia of Chatham House.

For the moment, there appear few clear candidates to champion such causes. Both the country’s ruling FLN and traditional opposition parties are largely discredited in the eyes of many Algerians.

Earlier this week, however, the interior ministry announced licenses for 10 new political parties, Reuters news agency reported, citing Algeria’s Ennahar TV channel.

Analyst Kateb believes the country needs a technocratic government to steer through needed changes, at least over the next few years.

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He believes there is no lack of talent to staff it, both in Algeria and abroad, where thousands of young professionals have flocked in recent decades for lack of opportunities at home.

“Now they’re not really considered,” Kateb said, “and this has to change.” (VOA)

Next Story

Netanyahu Personifies The Corrupting Force Of Power

What is sad about all this is that Netanyahu has all along put his self-interest above the party and the nation

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Netanyahu
Having served as the longest prime minister in Israel’s history, insatiable hunger for power of Netanyahu and desperate need to escape the indictment was first and foremost in his mind. Wikimedia Commons

By Alon Ben-Meir

The long-anticipated indictment of Prime Minister Netanyahu has finally come to pass. For three years, Netanyahu spared no effort to scuttle three criminal cases against him, but failed. These charges and their implications have now become rather clear. They have occupied Netanyahu’s thinking as to how to save himself and maintain his position as Prime Minister. They have impacted Israel’s policies, in particular toward the Palestinians, and without a doubt the charges have adversely impacted Netanyahu’s efforts to form a government following the last two elections.

In the first case, Case 1000, Netanyahu is charged with receiving gifts from Hollywood film producer Arnon Milchan in return for political favors. In the second case, Case 2000, Netanyahu was accused of striking a deal with Yedioth Ahronoth publisher Arnon Mozes to provide Netanyahu with favorable coverage in return for politically targeting a rival newspaper. In Case 4000, the third charge, Netanyahu took steps to benefit his friend Shaul Elovitch, who controlled Bezeq, in return for favorable coverage on Bezeq’s news site Walla. The first two cases charged Netanyahu with fraud and breach of trust; the third case added charges of bribery as well.

Netanyahu made a supreme effort all along to have these charges dismissed, claiming in the first case that it is acceptable to receive gifts from friends. In Case 2000, he claimed that he and Mozes were basically fooling each other and had no intention of following through, and argued in Case 4000 that asking for favorable coverage is not bribery.

In April of this year, Netanyahu continued his effort by initially trying to reinstate a 2005 immunity law which gave the Knesset House Committee the power to reject the Attorney General’s request to rescind immunity of any particular MK. In May, Netanyahu planned to push through a new law that would allow the Knesset to protect his immunity. This would have allowed the Knesset to ignore any High Court ruling on administrative matters, including potentially revoking Netanyahu’s immunity.

Netanyahu
For three years, Netanyahu spared no effort to scuttle three criminal cases against him, but failed. These charges and their implications have now become rather clear. Pixabay

And in July, realizing that he couldn’t pass such laws, Netanyahu claimed “No one is changing the law, it doesn’t need to be changed, and I won’t need it at all… it isn’t necessary at all because there has never been anything and there won’t be anything.”

The three indictments were a menacing dark cloud that hovered over Netanyahu’s head, and have had a significant impact on his political decisions. He sought to demonstrate that the charges were largely frivolous and that he is the indispensable leader that will safeguard Israel’s national security.

But the greater impact of these charges on his behavior was more related to the Palestinians. He needed to show toughness and an uncompromising position – not only to cement his right-of-center base, but to demonstrate that he is the only leader who can pursue policies consistent with Israel’s presumed national aspirations to control all of the ‘Land of Israel, including the West Bank. Other than continuing to expand and legalize settlements, he announced more than once that following the formation of a new government, Israel will annex significant chunks of the West Bank, to continue to please his base.

Perhaps the most important impact of the charges was his inability to form a government twice this year, in April and September. Because as a sitting prime minister he would not be indicted, he insisted that under no circumstances would he relinquish that position, knowing that an indictment against him will force him to face trial. This was given an even greater urgency after the second election, when he and Kahol Lavan leader Benny Gantz attempted to form a unity government.

For the same reason, Netanyahu insisted that in a rotating prime ministership which both sides agreed upon, he would serve as prime minister for the first two years. Since Gantz refused, especially given Kahol Lavan’s larger mandate and Netanyahu’s pending indictment, Netanyahu is opting to go for a third election within a year, hoping against hope that he will emerge as the winner with a greater mandate to form a new government.

What is sad about all this is that Netanyahu has all along put his self-interest above the party and the nation. Having served as the longest prime minister in Israel’s history, Netanyahu’s insatiable hunger for power and desperate need to escape the indictment was first and foremost in his mind.

For a man who professes to love his country and has dedicated all his life in the service of the state, he failed to grasp that in the final analysis, Israel’s survival has not and will never depend on a single individual. Had he indeed been concerned with the welfare and the security of Israel, he would have agreed to serve in a rotating unity government with Gantz on Kahol Lavan’s terms, and spared the country the pain of going through a third election. His failure, and the subsequent failure of Gantz himself to form a government, may well push Israel now toward its third election in a single year.

Netanyahu
Perhaps the most important impact of the charges was inability of Netanyahu to form a government twice this year, in April and September. Because as a sitting prime minister he would not be indicted, he insisted that under no circumstances would he relinquish that position, knowing that an indictment against him will force him to face trial. Pixabay

In an open letter to Netanyahu in October, I wrote “It’s time for you to go. There is nothing you can do that others cannot do just as good if not better. Resign your post; turn to the Attorney General to drop the charges against you. The nation will forgive you for your good intentions and some deeds… Unless you want to end up in jail just like your predecessor, spare the nation the humiliation and pain.”

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Sadly, he did not heed such advice, regardless of its source, and now he may very well end up in jail and stigmatize Israel for having been led by corrupt leaders who seem to have always put their personal self-interest above that of the nation.

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Dr. Alon Ben-Meir is a professor of international relations at the Center for Global Affairs at NYU. He teaches courses on international negotiation and Middle Eastern studies.