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Jun 11, 2015 | 09:30 GMT

In Algeria, Reform Will Come Sooner Rather Than Later

Algeria Prepares for Reforms Ahead of a Leadership Change
(FAROUK BATICHE/AFP/Getty Images)

Forecast

  • Changes in party leadership and a Cabinet reshuffle indicate that the Algerian government will soon announce an expected political reform package.
  • The reforms will likely help manage the exit of ailing President Abdelaziz Bouteflika in favor of a hand-picked successor chosen to maintain broad political backing for future reforms.
  • Political reforms will be the first step, but Algeria's looming economic, energy and security challenges will necessitate further reform initiatives in the future.
  • Changes in policy or Algeria's investment climate will be minor at first, with the government focusing on maintaining stability during the leadership transition rather than large-scale reforms.

Algerian leaders have spent the better part of a year crafting a set of political and economic reforms meant to help the country transition from nearly 20 years of Bouteflika's leadership. In recent weeks, the Bouteflika machine has consolidated support among the ranks of Algeria's two pro-government parties, the National Liberation Front and the National Rally for Democracy. The country's ruling elite has spent months trying to cultivate support among moderate Islamists, and longstanding competitions between Algeria's aging revolutionary-era leaders have been temporarily set aside as the political system sets its sights on survival. While the Algerian government has taken its time to carefully manage its impending political transition, several new challenges have emerged that threaten Algeria's long-term stability. Bouteflika's preferred replacement probably will be announced in coming months, but the upcoming reform package is likely to leave larger questions about the future of the Algerian economy, social stability and national security unanswered.

During Bouteflika's presidency, Algeria has undergone a national reconciliation process and has made slow but steady progress toward strengthening civilian oversight of the country's powerful military and intelligence services. This stability has not come easily or cheaply; Bouteflika's political management has relied on relatively high oil prices to help fund the costly state subsidization schemes of the post-independence socialist Algerian state. As the Arab world dealt with the crises in Libya, Syria and Yemen, Algiers managed public dissatisfaction with strong state spending, building Bouteflika's reputation as a figure of national reconciliation supported by a pervasive police presence.

Algeria's post-revolutionary history has not been without turmoil. After gaining independence from France in 1962, Algeria fought the Sand War against Morocco in 1963. Algeria's economy and agricultural output declined throughout the rest of the decade as Algiers struggled to build a new political order in the absence of French colonial oversight. Things improved slightly under Houari Boumediene (who seized power in a military-backed coup), especially as Algeria positioned itself as a leader among the Non-Aligned Movement during the 1970s. However, instability returned with the oil price crash and political turmoil of the 1980s, culminating in a decade-long civil war in the 1990s.

The years since the 2011 Arab Spring have not been ideal for Algerian leaders either. A rapidly destabilizing Libya, as well as serious security concerns in northern Mali and Tunisia, directly threatened Algeria. The January 2013 attack at the Ain Amenas natural gas facility highlighted Algeria's vulnerabilities; the government and foreign operators are still working to bring the facility to pre-incident production levels. Bouteflika also suffered a stroke April 2013, leading to a national debate over not only who would replace him, but also the nature of the republic's future.

Among these persistent security and leadership challenges, Algeria also faces a more pressing problem related to decreased oil prices. Hydrocarbon exports make up the lion's share of Algerian exports and government revenue. Despite strong financial reserves, Algeria's high rate of spending — nearly $60 billion per year — will deplete these reserves by 2019 at the latest, a timeline that Algiers has confirmed.

Algeria's Reform Initiative

In this context, Bouteflika will unveil reforms aimed at addressing the inevitable leadership transition and maintaining social stability during that process. The government has avoided passing a set of reforms and appointing a successor candidate by decree; after years of carefully managing competing ambitions of a host of political, military and economic elements, the Bouteflika machine has spent time and political capital to try and cobble together a broad network of support. The Bouteflika administration is looking to initiate the reform process now, while the president's political network can still manage the transition before the end of his term in 2019.

The Algerian government has quietly intimated its intent to announce its reforms package, and potentially a succession plan, during the Ramadan holiday expected to begin June 17 in much of the Islamic world. The proposed reforms will be familiar to Algerians. Both in 2011 and following his election to a fourth term in 2014, Bouteflika promised to increase protections and powers for political parties — especially opposition parties — in parliament and to cede some executive authority from the president to the prime minister. Bouteflika also set vague goals for economic reform and increasing foreign investment to help diversify Algeria's economy. Algerians have waited for years for more details, but little has been announced, or even leaked, about more concrete economic plans to address growing youth unemployment and sluggish growth in housing and the non-oil economy. Moreover, little has been said about who Bouteflika's potential replacement could be.

The government has missed previously announced deadlines for announcing the reforms — including this past April and May — but there are signs that the government has cleared some important hurdles in attracting support for its initiatives. Bouteflika's May 14 Cabinet reshuffle — the largest since the 2011 uprisings — was followed by changes within the two largest pro-government parties. The National Rally for Democracy's secretary-general and current president of the Senate, Abdelkader Bensalah, stepped down in favor of previous party head and former Prime Minister Ahmed Ouyahia. Ouyahia's move back into a party leadership role was confirmed June 10. The former prime minister previously served as the president's chief of staff overseeing the reform process.

The president's party, the revolutionary National Liberation Front, has traditionally had a mixed record of support for the president because of Bouteflika's competition with other party and revolution-era leaders. Amar Sadaani, the party's current secretary-general, has been a vocal critic of the Bouteflika administration. But Bouteflika and army Chief of Staff Ahmed Gaid Salah's open support for Sadaani has enabled the secretary-general to retain his position in the party leadership. In exchange for Sadaani's support and help to whip up support within the large and often unruly ranks of the National Liberation Front, the secretary-general has been allowed to reshuffle some of the party's central committee members under the auspices of Bouteflika's political patronage network.

Some of the expected reforms have already been put in place. Bouteflika's health concerns following his stroke have forced the president to rely on Prime Minister Abdelmalek Sellal. Sellal has been put forth as a potential successor to Bouteflika, as have Ouyahia and career diplomat and former U.N. Special Envoy to Syria Lakhdar Brahimi. Whoever is selected will likely serve as a transition figure, however, with Bouteflika reportedly considering stepping down from his post sometime in 2016 to help guide the transition from behind the scenes as his successor serves out the rest of Bouteflika's five-year term.

Algiers' Upcoming Issues

Although Algeria's often-murky political process seems to be aligning behind the president's proposed reforms, larger challenges lie ahead that the government cannot influence directly. The sharp decline in oil prices has stretched government finances, and the extended downturn in global energy prices — as well as losing the United States as one of the largest consumers of its light, sweet crude — will be a long-term issue for the government regardless of who is in charge. Moreover, Algeria's underlying governance issues cannot be addressed in a symbolic leadership transition or a highly publicized package of reforms alone, especially if the political class but not the general public supports the change.

Algeria is also grappling to adjust to a shifting regional security environment, with instability on its borders demanding considerable military investment. These security concerns also necessitate a nuanced working relationship between the country's political and military leaders. While Bouteflika worked to secure military backing for his government and sought to introduce more oversight, Algiers has been loath to diminish the capabilities of its military and intelligence services in the face of rising security threats along its long, desolate borders.

Algeria is not likely to meaningfully adjust its large social spending programs during the next year as it shores up public support for its changes and especially Bouteflika's successor. The announcement of the expected reforms is likely to come sooner than later, but it will be just the first step to stabilize the political system to enable Bouteflika's managed exit. Algiers probably will then turn its attention to other reforms, addressing issues such as corruption, slowing hydrocarbon production and ways to revitalize foreign investment.

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