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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

2019 Was a Year of Climate Change Activism

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Hungary Climate Protest
Following the call of Fridays For Future Hungary and Extinction Rebellion Hungary young environmentalists demonstrate to demand measures against climate change in Budapest, Hungary. VOA

By Jamie Dettmer

2019 was the year of Greta Thunberg, Extinction Rebellion and an uptick in climate action pledges by governments across the globe.

From Britain to Germany, Europe’s mainstream party leaders scrambled to respond to a surge in electoral support for Green parties — and to growing public anxiety about the possible impact of climate change.

During European Parliament elections in June, 48 percent of voters identified climate change as their top worry. Opinion polls in Germany for some weeks of 2019 put the Greens ahead of Chancellor Angela Merkel’s storied Christian Democratic Party, which, along with its junior partner in the country’s governing coalition, has been racing to sharpen climate policies.

Greta Thunberg climate
15-year-old Swedish girl Greta Thunberg holds a placard reading “School strike for the climate” during a manifestation against climate change outside the Swedish parliament in Stockholm, Sweden. VOA

British move

In Britain, the ruling Conservatives announced a hugely ambitious carbon reduction plan, enshrining into law a pledge to reach net-zero carbon emissions by 2050, making Britain the first major economy to do so. Some smaller countries, including Finland and Norway, are earmarking dates earlier than 2050 to become net-zero greenhouse gas producers, but so far have not made their goals legally binding.

In America, an alliance of 24 states and Puerto Rico promised to uphold the goals of the Paris Agreement on climate action, despite the Trump administration’s withdrawal from the international pact.

Shouldn’t all these plans and pledges be music to ears of climate action activists and scientists?

Apparently not. On the eve of Christmas, Thunberg tweeted: “I hear many say 2019 was the year when the public woke up to the climate crisis. This is a misconception. A small but rapidly growing number of people have started to wake up to the climate crisis. This has only just begun. We’re still only scratching the surface.”

For Thunberg, her guardians and loyalists, change can’t come fast enough, however wrenching and dislocating it might be. Governments aren’t doing enough and are failing to count their emissions accurately, they complain, and corporations are dragging their feet.

For activists, December’s Madrid climate change conference epitomized the foot-dragging and a failure to be truly aspirational in cutting emissions. For Greenpeace and Extinction Rebellion activists in Britain and Australia, the key task for the Madrid gathering was to unveil ambitious new goals — and fossil-fuel-dependent countries, notably Brazil and Australia, flunked it, they say.

The-COP-25-conference-center-in-Madrid
The COP 25 conference center is seen in Madrid. VOA

Rich vs. poor

The rift between wealthy, developed nations and poorer, developing nations over who is going to pay for reducing greenhouse gas emissions also remained as wide as ever. And governments in Madrid stalled on agreeing on new regulations for carbon markets and the trading of carbon permits between countries for the offsetting of emissions, one of the most critical and contentious issues at the climate change conference.

“In Madrid, the key polluting countries responsible for 80 percent of the world’s climate-wrecking emissions stood mute, while smaller countries announced they’ll work to drive down harmful emissions in the coming year,” said Jake Schmidt of the Natural Resources Defense Council, a U.S.-based climate action advocacy group. “World leaders dithered instead of taking stronger, critical action soon to reduce the global climate threat. They ignored dire scientific reports, worsening evidence of climate destruction and demands from millions of young people to protect their future.”

For others, though, the Madrid conference symbolized how politically complicated it will be to deliver climate action — a complexity activists ignore and glide over, some analysts warn. The venue for the conference itself spoke to that. The meeting was scheduled to be held in Chile, but it had to be switched to Spain because of riots in the Latin American country over a “Green” hike in transit fares.

And it wasn’t only in Chile that protesters were taking to the streets to complain about expensive Green policies that could make living standards plunge. In France, the Yellow Vests, drawn mainly from small towns, persisted with their demonstrations against the government of French President Emmanuel Macron, an agitation triggered initially by the imposition of higher eco-taxes on fuel.

The year 2019 also saw strong resistance in Germany from motorists, as a well as automakers, to planned higher fuel prices and an abrupt shift to electric cars — yet another front in a political backlash to climate action.

Climate Europe Coal
Smoke rises from chimneys of the Turow power plant located by the Turow lignite coal mine near the town of Bogatynia, Poland. VOA

Tricky politics

For governments, even environmentally friendly ones, climate change poses a massive political dilemma, and 2019 brought that home. Impose the tax hikes and costly regulations scientists say are needed to lower emissions and move economies away from dependency on fossil fuels, and governments risk prompting a backlash, largely from lower-income workers and pensioners, who can ill afford to bear the expense.

The alternative is to move slowly and risk blowback from climate action activists and their supporters among largely middle class and higher-income groups able to adapt with less hardship. Squaring the circle between those who demand fast-track climate-friendly measures and those who want to slow down and mitigate the impact of moving toward a low-carbon future isn’t going to be easy, say analysts.

In Europe, Central European governments sense the acute political danger to them and have been resisting a European Union plan to join Britain in earmarking 2050 as the year the bloc has to be “net zero.”

Poland has been especially vociferous in opposition. The country is heavily dependent on coal for its energy needs and more than a quarter-million Polish jobs are tied to the fossil fuel industry. Without coal, many towns in Poland will have no economic raison d’être. “You can’t expect Poland to leap to zero carbon in 30 years,” according to Marchin Nowak, a coal industry executive.

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While smaller developing countries fret that they will bear too much of the burden of climate action compared with richer nations, so, too, do those who already feel left behind in developed countries, fearing the costs and benefits of climate action will be unfairly placed on their shoulders. 2019 saw the opening salvos in this new political war over environmentalism. (VOA)