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Why all is not well in fragile Algeria

Algeria’s president, Abdelaziz Bouteflika, last week dismissed Abdelmadjid Tebboune as prime minister, less than three months after his appointment. The president gave no reason for the change, but several Algerian experts noted that Tebboune had become embroiled in a bitter conflict with the so-called “economic cartel” allied with the president’s younger brother, Said Bouteflika. 
The president re-appointed his chief of staff and previous prime minister, Ahmed Ouyahia, in Tebboune’s place. Ouyahia is a veteran politician, has support within the military establishment in Algeria, and is a familiar face in Algerian politics. 
With his new appointment, he has served as prime minister four times, including three periods under Bouteflika’s presidency since he took office in 1999. Bouteflika’s National Liberation Front (FLN) and the Rally for National Democracy (RND) headed by Ouyahia himself, together enjoy an overwhelming majority in Parliament after winning re-election last May.
This rapid change at the top of the government highlights the uncertainty surrounding the future of Algeria’s economy after the fall in oil prices. It also highlights the vested interests of competing brokers who paralyze the Algerian political system, and exposed the inability of the ruling political elites to find a unified recipe or consensus to deal with the economic and political crises that plague their country.
Algeria remains at risk, as many of the ingredients that proved to be a recipe for the political turmoil during the so-called “Arab Spring” are present there. However, BMI Research’s recent report noted that three factors may mitigate the risks of widespread unrest in Algeria over the medium term.
First, the government will remain wary of introducing austerity measures deemed politically sensitive. Importantly, the regime still has some important economic tools to deal with the crisis, such as sizeable financial reserves, and the ability to borrow from international markets considering Algeria’s low levels of external debt (1.8% of GDP). 
Second, the appetite for unrest and conflict among the Algerian people appears low, particularly with painful memories remaining of the civil war in the 1990s and the devastating chaos that has swept neighboring countries such as Libya. Finally, in the event of a marked escalation in unrest, it is expected that Algeria’s powerful, experienced and well-resourced security forces would step in to stabilize the situation.
However, the risks that Algeria’s political system may face in the medium or long term are not negligible. Among them, the current unsustainable economic model, the issues surrounding the succession of President Bouteflika, the future role of the military establishment, and the effects of terrorism or ethnic tensions on domestic stability.

Amid political uncertainty and economic instability, the role of the military will be crucial.

Dr. Naser Al-Tamimi

With oil and gas representing over 95 percent of Algeria’s exports in 2016, the Algerian government has published its long term economic strategy 2016-30, which is seeking to diversify its economy away from energy. However, the outlook for long-term economic growth will depend greatly on the political situation and the speed of implementation of required structural reforms. 
Certainly, the International Monetary Fund emphasized last June in its yearly assessment of the Algerian economy that wide-ranging structural reforms are needed to diversify the economy and promote a dynamic private sector. “Algeria ranks behind regional peers and emerging market countries in almost all key structural reform areas in international surveys. Notable deficiencies include a restrictive business environment, difficult access to finance, weak governance and corruption controls, insufficient transparency and competition,” the IMF said.
Meanwhile, President Bouteflika, 81, is in fragile state of health, confined to a wheelchair since he suffered a stroke in 2013. Concerns about his ability to remain in power could intensify jostling among regime elites, which would increase the risks surrounding the country’s future political trajectory.
Given the weakness of the opposition and the lack of strong charismatic figures among the ruling elites, the role of the military establishment may be crucial in shaping the political scene in Algeria.
This situation could ultimately give the already powerful military the opportunity to assume more power. If this is also accompanied by increasing regional chaos, threats by armed Islamist groups, and growing ethnic tensions between Berbers and Arabs, the army would have all the ammunition it needed to intervene in the name of maintaining stability and civil peace.
In sum, all these factors may have a negative impact on the democratic process and lead to the postponement or slowdown of structural reforms, which are vital to ensure the stability of Algeria in the long term.
• Dr. Naser Al-Tamimi is a UK-based Middle East researcher, political analyst and commentator with interests in energy politics and Gulf-Asia relations. Al-Tamimi is author of the book “China-Saudi Arabia Relations, 1990-2012: Marriage of Convenience or Strategic Alliance?” He can be reached on e-mail: [email protected] Twitter: @nasertamimi