Lazar Bogicevic Algeria Country report Full Paper

Country Report: Algeria 1

I

Basic Information about Algeria

Geography and Climate of Algeria:

The geopolitical location puts Algeria in Northern Africa as a part of the Maghreb

countries. Algeria borders with Morocco and Tunisia, which belonged to former French colonies.

Algeria’s access to the Mediterranean Sea is in the forefront of the reasons France started to

colonize Northern Africa. Algeria is the largest country in Africa, with natural resources of:

petroleum, natural gas, iron ore, uranium, lead and zinc (CIA.Factbook, 2014).

The climate in Algeria is arid or semi arid; mild wet winters with hot, dry summers along

coast; drier with cold winters and hot summers on high plateau; sirocco is a hot, dust/sand-filled

wind especially common in summer. The terrain is mostly high plateau and desert; some

mountain with narrow discontinuous coastal plain. Mountain areas in Algeria are subjected to

heavy earthquakes, mudslides and floods during rain season. Total arable land is about 3.15

percent, and permanent crops grow only on 0.38 percent. According to data from 2011, the land

designated for other use takes up to 96.46 percent of land area, industrial, domestic and desert.

Since Algeria is a semi-arid climate, crops require irrigation; data from 2003 show total irrigated

land is 5,694 sq. km over two million square miles. Freshwater withdrawal for domestic use 26


percent, agricultural 58 percent and industrial 16 percent; the agriculture uses the most

freshwater resources since it is necessary for irrigation (CIA.Factbook, 2014).

Economic and Human Development in Algeria (GDP, HDI, GNP):

According to the World Bank report 2012 Gross Domestic Product (GDP) in Algeria was

$205 billion. In 2012, Slight fall of growth by 1 percent occurred in total GDP from 2010 when

GDP growth was recorded at 4 percent increase. The highest rise of GDP was recorded in 2005,

when total annual growth recorded 6 percent increase in the whole decade. Algeria’s GDP per

capita between 2009 and 2013 showed major increase from $3,771 to $5,348; in between 1999-

2003 GDP per capita was showed increase from $1,555 to $2,056 (p.1).

Human Development Report of (2013) shows that between 1980 and 2012 Algeria’s

Human Development Index (HDI), has increased by 55 percent; 1.4 percent annually; as of now

HDI is 0.71. During the same period Algeria’s life expectancy at birth increased by 13.8 years,

mean years of schooling rose by 5.8 years and expected years of schooling by 5.3 years.

Following the graph in the report it is evident that life expectancy in 2010 is climbing together

with education and HDI. However education made a high jump during 1990’s and into 2000’s

(UNPD, 2013). In 2008 education expenses in Algeria accounted for 4.3 percent of GDP

(CIA.Factbook, 2014). Comparing Algeria’s HDI with other countries: Syria and Tunisia, there

is evidence that Algeria’s and Tunisia’s HDI advanced faster in the period from 1990 to present.

In 2012, Algeria’s HDI ranked below average for countries in the high human development

group, and above average when compared to the Arab states (UNPD, 2013). Drinking water

sources have improved for 83 percent of the population, 17 percent of the population still has no

adequate water improvement, according to data estimated from 2010. Sanitation facilities access


has improved for 95 percent of population, only 5 percent have unimproved sanitation facilities

(CIA.Factbook, 2014).

Gross National Income (GNI) is a measure that is evaluating a standard of living in the

nation (UNPD, 2013). Total (GNI) in Algeria is $285 billion, above Morocco and Tunisia. GNI

per capita in 2012, is recorded at $8,360 and it is on the rise from 2004 to the present. Although

Algeria was a former colony in the Maghreb data shows that it’s GNI is higher than Morocco

and Tunisia, both former colonies of France (The World Bank, 2014).

Economic Sectors and Trade Partners:

Algeria’s economy consists out of three sectors: agriculture, industry and services.

Agriculture though the highest form of occupation compared to industry in Algeria, only

contributes to 8.9 percent of the country’s GDP. Some major agricultural products are wheat,

barley, grapes, olives, citrus, fruits, sheep and cattle. Industry composes 60.9 percent of the

GDP; some major industries are petroleum, natural gas, mining, and petrochemical. Hydrocarbon

industry contributes the majority of revenue and a 95 percent in exports. Globally Algeria ranks:

10th in natural gas reserves, ranks 6th in natural gas exports and 16th in oil reserves. Strong

hydrocarbon exports have managed to stabilize Algeria’s economy, but new environmental

regulations are forcing Algeria to develop non-hydrocarbon industries (CIA.Factbook, 2014).

Current ecology issues are industrial wastes and pollution of the Mediterranean Sea. Upcoming

Intergovernmental Panel on Climate Change (IPCC) report (2013-2014) will focus on

developing countries vulnerability and risk of major impacts from climate change (The World

Bank, 2012). The European Union (EU) is the Algeria’s largest trading partner, which absorbs

almost 50 percent of Algeria’s international trade. “EU-Algeria trade volumes increased by 40

percent between 2007 and 2011, driven principally by rising oil exports. With 98 percent of EU


imports from Algeria in 2011 being energy, Algeria ranked as EU's third largest energy provider

in 2011, at a value of 26.8 billion euros. Chemicals represented the second most important

product group in EU's imports from the country”. Major EU exports to Algeria consist of

machinery (non- electrical machinery and transport equipment), telecommunication equipment,

agricultural products, iron and steel, and chemicals (EU-commission, 2013). Merriam-Webster

dictionary defines trade balance as “the difference in value between all the merchandise imports

and exports of a country”. In 2012, trade balance between Algeria and European Union was 11.6

billion Euros. Algeria is also among the biggest EU trading partners in the Mediterranean region,

and the country is an important member of the Euro-med partnership (EU-commission, 2013).

The U.S. Census Bureau data show that in 2013, United States has exported to Algeria $1,712

millions and imported from Algeria $4,483.4 millions with trade balance -$2,771.5(Trade, 2013).

The services sector in Algeria’s economy comprised 30.2 percent of GDP estimated in

2012. The services sector is composed from: construction and public works 10 percent, trade

14.6 percent, government 32 percent and other 16 percent. Data show that Algerian government

employs the most labor force and therefore most spending (CIA.Factbook, 2014).

Adult literacy rate is defined by (UNICEF) as a percentage of persons aged 15 and over

who can read and write. According to the UNICEF data, of young men (15-24 years) literacy rate

was 94 percent in years between 2007-2011. The young women in the same age range as men

had literacy rate of 89 percent, 5 percent less than males in the same year period. Data available

from UNICEF (2008-2011), show that elementary school attendance in Algeria for males is 98

percent and for females 96 percent (p. 2).


Current labor force, people employed in Algeria according to estimated data from 2012 is

11.31 percent. Unemployment rate according to the same source is 10 percent. People living

below poverty line are 23 percent of population according to 2006 data (CIA.Factbook, 2014).

Algeria Under Colonial Governance and Fight for the Independence:

According to Diana K. Davis (2007) Algeria was colonized by France officially in 1840;

although France started colonizing Algeria in 1830. Algerians won the independence after 132

years of French colonial rule (p.133). Prime reasons for revolution were: “colonial policies that

disenfranchised people from land and resources” and “not providing for the poor-farmers”.

Preparation for conquest of all three Maghreb countries (Algeria, Morocco and Tunisia) started

with French creation of narratives about declension and lapsed fertility. The main reason for

creation of the narratives was to give France justification of “social control of local populations,

land and resources re-distribution, transformation of subsistence production to market integrated

production”(xii).

Many French and European writers described North Africa literally as “Granary of

Rome”; that fell under “primitive agricultural techniques of lazy natives, especially herders and

indigenous nomads”(2). French scholars often cited medieval Arabic writer Ibn Khaldoun,

because of his negative views of Arabic nomads. Baron de Slaine cited Khaldoun, because

Khaldoun wrote most of his work about Arabic nomad-invasion of the Maghreb in the 11th

century, and their destruction of urban areas and urban-based political systems (pg.3). A Sudden

decrease in piracy during 18th century in the Mediterranean gave additional opportunity to France

to invade Algeria. France maintained a “state of fear” from pirates but continued to do business

as usual in North Africa (24).


From 1830 to 1840 the propaganda gave justification to France to start occupying

Algeria. France passed an agricultural law in 1830’s to ban traditional agricultural practice by

Algerians. The new colonial law also focused on land tenure and property laws; as well grazing

and forestry. Settlers from France and new colonial administration benefited from large amounts

of land appropriated to them (6). The French authorities began classification of population in

Algeria, and separation in four groups: Turks, Jewish, Maures divided further in Maures, Arabs

and Berbers (Kabyles) (21). Nomads were considered as Arab Bedouin. Under directive of

Victor Renou in 1838 Algerian Forest Service was established. The French military needed wood

for building material (33). Although in the first wave of control Algeria was not occupied

completely, General Thomas Bugeaud 1840-1847 expanded conquest to the rural regions of Tell.

During military expansion, French government was invited to begin colonization. New Algerian

administration governed by France encouraged the immigration by giving them agricultural land

for free or small price attached (32). Algerian Insurrection of 1871 was between people who

immigrated to Algeria claiming the land and people who defended the right to protect indigenous

Algerians (45). Captain Ferdinand Lapasset, head of Arab bureau in Tenes, ordered greater

security in the country, more surveillance and greater submission of the Algerians. In 1845,

Lapasset chose to sedenterize nomads by designing a plan for a nomadic village. Later the plan

became ultimate measure for progressive fixing of Algerians to the soil (52-53). The Second

Empire established strong capitalism in Algeria with forest and later agricultural production (89).

Napoleon III signed legislation in 1863 as a promissory act assuring Algerians that not all

land will be taken away from them. However, Senatus-consulte legislation extracted 80 percent

of the land and transferred it to colonization effort. The third republic established a government

in Algeria whose policies impacted the colony until after WWII (p.86). Algeria and France


fought a war from mid 1950’s to 1962 (132). The war was fought between French army and

Algerian Front de la Liberation Nationale (FLN). Conflict started in 1956 when FLN performed

series of terroristic attacks. Bombings, assassinations and strikes in the city of Algeirs were all

part of asymmetric warfare fought by Algerians. In 1957, Governor General Robert, Lacoste

pressured by central government, decided to fight Algerians in the same manner. Under

command of General Jacques Massue, the army had every option available to restore the order.

Civilian authorities were excluded from intervening in the conflict. The military used tortures,

disappearances, public beatings, and forcing people to work at gunpoint. These methods almost

broke the network of FLN, and by the French understanding were most effective (Campbell,

2005). Robert Young in his book Post-Colonialism (2003), compares “slash and burn, scorched

earth” war methods of General Bugeaud with methods of French Army used during revolution.

The methods were simple in both events “to kill everyone who was suspected of resisting and

who resisted”. During revolution Algerians were buried alive in mass graves with bulldozers.

During colonization period General Bugeaud’s forces were gathering tribesmen into caves and

suffocated them with smoke (pp.56-57). In 1958, Charles de Gaulle was elected president; de

Gaulle’s campaign promise was to end war in Algeria by granting independence to the people.

Fourth republic ended and brought new government that disliked war. Former government lost

trust of the citizens, because lack of control over the French Army (Campbell, 2005). Algerians

won their ability to repatriate from France in 1962 referendum, which ended the French official

rule in Algeria.

The Current Problems in Algeria:

Today Algerian problems are internal and international matter. Annual Report (2013) by

Amnesty International shows that the country battles with overzealous government, child labor,


terrorism, women’s rights and general absence of human rights. In Time Magazine article by

Vivienne Walt (2013) addresses the issue of Algerian hostage crisis in January 2013, and worries

about the future of foreign investments in the Maghreb and West Africa. Walt also states that the

Algerians are a threat to their own economy (pp.1-2). Question remains will Algeria with present

lack of Human Rights deteriorate further into chaos if foreign investors decide to leave the

country?

II

Political Environment in Algeria:

After the 1962 referendum new the government supported by FLN (Front de Liberation

Nationale), came to power. Algerians changed their government and liberated from the long

lasting colonialism. However system of governance remained almost the same. The new

government did not respond to Paris but to Algiers. New authoritarian government was

sponsored by FLN to become a military regime. Military chose Houari Boumediene for the new

head of state; Boumediene remained in the office between 1962-1979. In early seventies

Boumediene tried to restore Algerian economy by investing in hydrocarbons. The refineries were

built on scarce fertile ground taking away arable land and weakening the agriculture (Entelis,

2011). Boumediene drafted a National Charter identifying FLN as the only political party and the

army as the country’s true strength (Mortimer, 2006). Initiative to jumpstart the economy was

shown to be a failure; the focus was capital gain not a national pride. In 1979, Chadli Benjedid

took over presidency in Algeria, after Boumediene died from sudden illness. Democracy lasted

short in Algeria, military coup followed in 1992, and all reforms were suspended indefinitely.

Abdelazziz Bouteflika in 2009 became longest president in office, currently serving third term.

The democracy has derailed in Algeria (Entelis, 2011).


Political History of Algeria:

The 1980’s world slowly stopped abiding by center-state revolutionary regimes.

International changes brought promised democratic revival to Algeria, a sign of environmental

and economic change. In 1980, Algeria’s centralized economy suffered, fall of oil prices and

political corruption brought series of economic and social crises. Multiple domestic and

international crises developed series of domestic disorders, which ended in bloody protests.

Labor strikes, street disturbances and public demonstrations paved a way for social devastations

and (intifadas) uprisings (Entelis 2011, Mortimer 2006).

Revolutionary Council installed Benjedid, because of highest serving rank in national

army. In the army circles Benjedid was respected but not pre-eminent figure, centrist, but less

known to the council (Mortimer, 2006). The October protests in 1988 were called because of

misappropriation of wealth, the constitution privilege, and defense of inequitable order by

previous and Benjedid government (Entelis, 2011). Benjedid received orders from the FLN to

put down violently escalated protests (Mortimer, 2006). At the end of the 1980’s an enormous

gap was left between initial revolutionaries and oppressive political nature in Algerian political

order. Change was necessary in national and in foreign policy in order to establish a bridge to

politically acceptable order (Entelis, 2011).

Political evidence showed that October riots occurred in 1988 were part of the basic

reforms started in 1980. President Chadli initiated reforms that impacted: economic,

bureaucratic, political and foreign policy change, intended to democratize the country. In 1987,

Algerian Human Rights League was legalized as part of the second wave of reforms to liberate

polity. National Assembly on July 21st 1987 recognized the Human Rights League and the right

to associate, organize, recruit and propagate (Entelis, 2011).


Chadli’s government pursued another set of reforms something that Algeria did not

experience since 1962 revolution. Fundamental changes in the Constitution involved major

restructuring of FLN’s power and their position in state and society. Further Constitutional

changes included unrestricted freedoms of expression, association and organization (article 39).

“The right to form unions and stage labor strikes (articles 53 and 54), and the right to form

‘associations of political nature’ (article 40).” The new provisions established a multiparty

system codified in the law on July 5th 1989 (Entelis 2011, p. 657).

In nine months period from October 1988 to July 1989 Algerian political system was

transformed from single party authority to a multi party pluralistic nation of laws. New political

parties were officially registered and recognized the Marxist Left (PAGS, Parti de l’Avant-Garde

Socialiste) and Islamist right (FIS) Islamic Salvation Front. In a year, new Democracy was ready

to take their first free elections. In June 1990, Islamic Salvation Front won first elections, and

FLN had lost. Democratic elections have been declared victorious after electoral process and

voting results were declared valid. Chadli declared that National Popular Assembly elections

would be held in first quarter of 1991. However, the parliamentary elections were postponed

many times and democracy did not gain solid ground (Entelis, 2011).

The short-lived democracy was overtaken by authoritarian ideas in 1992; military

intervened again in political process (Mortimer, 2006). The opposing reactionary forces started

to consolidate power. In the military coup d’etat led by Major General Khaled Nezzar, on

January 11th 1992, the army forced President Benjedid out of office. Newly appointed chief off

staff General Mohamed Lamari ruled with ultimate hardline doctrine of eradication of dissidents

(Mortimer, 2006). Military saw the previous government as a threat to their rule. After a second

round of parliamentary elections the military high command declared that taking power from


military is a threat to security and stability of the state. In March 1992, a martial law was

declared and FIS ceased to exist as legitimate political party. The coup went on peacefully since

FIS leadership urged followers not to provoke the military. The coup instigators were feeling as

winners since nobody, especially democratic west, condemned and criticized acts of Algerian

military (Entelis, 2011). Run on elections were held in November of 1995, FLN appointed

Liamine Zeroual president (Mortimer, 2006).

High Security Council installed after the coup, declared state of emergency, which lasted

until 2011. All existing political institutions established in December 1991 were dissolved as

well as communal and municipal assemblies led by FIS members since 1990. Arbitrary

detentions, arrests and extrajudicial killings were imposed on the protesters and the opposition.

After FIS leadership was arrested, the rest of the party was forced underground (Entelis, 2011).

Islamic Salvation Army, the militant wing of FIS, emerged to fight the military (Mortimer,2006).

The state security police was recreated after being suspended by democratic government; press

and national Assembly were suspended indefinitely. Algerian army became effective in

terrorizing the civilian population (Entelis, 2011).

Later government repression forced parties to form alliances to fight the military;

Leninist FLN, FIS and Socialist Forces Front were fighting common enemy which was trying to

end the democratic process for good in Algeria (Entelis, 2011). After the democracy was

terminated in Algeria, terrorism appeared with vendetta; the terrorism remains active even today

in Algeria. According to Amnesty International Report of 2013, Al Qaeda of Islamic Maghreb

(AQIM) has continued to attack military targets. Authorities responded including (DRS) state

security, with extrajudicial killings, tortures and secret detentions.


Abdelaziz Bouteflika started his career during revolution as a mediator between FLN and

military; he later helped to form politico-military alliance in post-revolutionary fight for power.

Bouteflika served as youngest foreign minister in Ben Bella’s government; in 1999 he was

elected president (Mortimer, 2006). Bouteflika’s first mandate appeared stable with progress in

reforms. But Algeria remained ridden with unrest and crisis on socio-economic level. One of

Bouteflika’s most notable achievements was negotiation of amnesty and reconciliation with

Islamic combatants involved in planning a civil war (Entelis, 2011). After 9/11, Bouteflika

became ally of the United States in war on terror. State Secretary William Burns stated that

Washington has lot to learn from Algeria on ways to fight terrorism. Algerian president sent

information to Washington about expatriate Algerians who were suspected in having ties to Al

Qaeda (Mortimer, 2006). Bouteflika found the workable solution to his opposition.

Bouteflika’s government ratified in 1999 Charter for Peace and in 2005 National

Reconciliation agreement, in order to bring peace and stability to the country (Entelis, 2011).

Human rights representatives raised reasonable suspicion in newly chartered amnesty laws.

Local press said that 80 % figures were far from realistic, and would antagonize people who

suffered most in civil war (Baily & Hoskins, 2005). Efforts to disarm militants did not succeed.

National Assembly reintegration into legislature had also failed. Bouteflika’s General Larbi

Belkheir was relieved of duty as director of presidential office and exiled to new duty as the

ambassador in Morocco. General Belkheir had acted as leader of first coup against President

Benjedid and was important figure in Algerian government. High level resignations helped

Bouteflika to gain power by replacing influential military generals with new young officers, in

order to maintain presidential position (Entelis, 2011).


In his second term (2004-2009), Bouteflika pursued reform of 1984 family code

especially on women’s rights. By strengthening the human rights, restoring civilian authority and

rebuilding institutions, government strengthened support for the authority of the state. Bouteflika

wanted to win over national support with all the changes toward democracy, but those changes

did not make the country democratic and libertarian. In 2008, National Assembly ratified and

amended the Constitution, to extend Bouteflika’s presidency beyond legal limits (Entelis, 2011).

Incumbent Bouteflika ran again in 2009 elections and won with 90% of the votes (the Guardian,

2009). Like other authoritarian regimes, Bouteflika promised changes, but the only promise kept

was to stay in power as long as possible.

“Algeria remains an authoritarian state devoid of transparency, the rule of law, an

independent judiciary, a fully contested political pluralism, freedom of expression, press,

and the media, and an institutionalized separation of civilian and military rule as latter

continues to intervene in government decision making and is unaccountable to elected

civilian leaders ” (Entelis 2011, p.661).

The government is persistent about denying the entrance of Non Governmental

Organizations (NGO) to assess Human Rights status in the country (HRW, 2014).

Political and Civil Rights and Liberties:

According to the Amnesty International Report of 2013, human rights agencies are barred

from entering Algeria. Human rights supporters are harassed daily by courts and the authorities.

Yacine Zaid and other three members of a human rights group were arrested for sit-in protests

outside the courtroom. The charges “inciting non-armed gathering” remained active since April

2013. The government is still held responsible for past abuses and disappearances during civil

war 1992-1999. But the families of victims were forced to accept death certificates in order to


receive the compensation. According to Entelis (2011), The Charter for Peace and National

Reconciliation gave security forces immunity from prosecution. According to Baily and Hoskins

(2005), Algerians felt that more righteous act would be South African model, Truth and

Reconciliation Commission. The perpetrators of crimes had to admit their guilt in public, but not

be punished for it. Many who spoke against the Charter found themselves, thrown out of

government media and arrested.

Rights of Women:

Since the military coup in 1992 women remained marginalized in receiving lawful equal

rights. ICESCR1 urges Algerian government to obey women’s rights given past violations of

international laws (Bennoune, 2005). In March last year women’s organization CEDAW2

committee persistently asked government to reform Family Code3 last revised in 1988. The

committee asked for equal rights in marriage, divorce, child custody and inheritance. Further

CEDAW requested that the government passes the law that will protect women from domestic

and other violence, also to address gender inequalities in education and unemployment (AI,

2013, Bennoune 2005). Several reforms of the Code were unsuccessful, affirmation of the rights

were pre-conditioned by the government (Bennoune, 2005). Gender Inequality Index (GII)

reflects gender-based inequalities in three dimensions: reproductive health, empowerment, and

economic activity. The 2012 index value ranks Algeria 74 out of 148 countries in gender

inequality (UNDP, 2013). Women gained more than a third of seats in 2012 Parliament

elections, more than anywhere in Arabic world (FreedomHouse, 2013).

1 International Covenant on Economic, Social and Cultural Rights

2 Convention on Elimination of All forms of Discrimination Against Women

3 Notorious 1984 Family Code recognized marriage as contract between two men. The woman’s decision has no legal binding just formal procedure. Article (39) states that woman must obey her husband.


Trafficking persons report of 2013, puts Algeria to transit, and to a lesser extent,

destination country for women subjected to force labor and sex trafficking. Most often women

from sub-Saharan Africa enter Algeria illegally or assisted by smugglers on their way to Europe.

Some of the women are forced into prostitution. The criminal network extends from sub-Saharan

Africa to Europe. Local leaders of the African Villages near southern city of Tamanrasset are

suspected for forcing women in prostitution. Civil groups believe that Algeria is becoming a hub

for sex trafficking and illegal immigration. The government failed to provide protection for

victims of trafficking, lacking victim referral as well as victim assistance. The government did

not conduct awareness campaign on human trafficking, neither has a formal anti-trafficking

policy in place to fight human trafficking (p.6). Algeria is a Tier 3 country list, which

government does not abide by minimal standards and does not try to regulate human trafficking

(p.55). Female migrant workers have been attacked in 2001. Some of them were gang raped

(Bennoune, 2005).

Labor Rights:

In 2011, Algerian government continued to clamp down on union rights, frequently

resorting to arrests and prosecution of union leaders (HRW, 2014). The General Workers Union

of Algeria (UGTA) led 1992 protests supporting a coup against Benjedid government. The

unionists were afraid of Islamic government taking over power (Entelis, 2011). Today UGTA is

only legal union allowed in Algeria. According to the Human Rights Watch (2013), all other

independent unions and their members are subjected to judicial harassment and arbitrary arrests.

Various bureaucratic red tapes are installed to prevent establishing the new unions, declining

licenses and altering the union bylaws.


A report by U.S. Department of Labor (2012) section for international affairs finds that

children in Algeria are involved in the worst forms of child labor. The government remains yet to

adopt a child protection law, drafted in 2007, that includes a hazardous work list. According to

the report Algerian children work in the construction sector, agriculture and in the mechanic

shops, where they can face major health and safety risks. The safety risks involve handling of

heavy equipment, dangerous material, dangerous tools and carrying of heavy loads. Algeria’s

Labor code sets age limit at age 16, at age 15 children are allowed to work under authorization of

legal guardian. Article 15 of Algeria’s labor code prohibits minors to work dangerous, unhealthy

and harmful jobs. However the code fails to define the terms “minor” or “child,” and to define

hazardous work prohibited to children (p.1). Statistics on child labor are kept, but the

government is denies the existence of such documents. There is a probable cause that sweatshop

labor exists due to absence of rules and regulations.

Elections in Algeria:

Algeria is not an electoral democracy. The Military and secret police have important part

in politics, despite the rivalries with the political setup (FreedomHouse, 2013). In 2004, a council

of Ten, anti fraud front, called on Bouteflika to stop using patronage and favorable publicity. The

2004 elections were expected to be in favor of the president. The NATO4 membership gained

after 9/11, had forced the government to stop using army as election mediator (Mortimer, 2006).

According to the Freedom House (2013), parliamentary elections in May 2012 were free

according to international monitors, but local opposition claims fraud and irregularities. The

Peoples National Assembly was increased by 73 members, each member will serve a five-year

term. The amendments passed in 2008, abolished two term limit for presidency, and increased

presidents power related to the premiership.

4 North Atlantic Treaty Organization


Political parties have to be approved by Ministry of the Interior, before they can operate

legally. In 2012, National Election Observation Commission, a judicial entity, supervised the

elections. The same year in January law liberalized party registration, 23 new parties were

allowed to register since 1999. The FLN, RND, Green Algeria Alliance (Movement for Society

of Peace MSP, Islah party, Ennahda), Front of Socialist Forces, the Workers party and parties

that have less than 10 seats in parliament (FreedomHouse, 2013).

Despite the recent political uprisings (Intifada), democracy in Algeria occupies an

uncertain position. Arbitrary and shifting criteria determine which parties and candidates are

allowed to take part in the election. The elections are held rarely, and are often compromised by

internal fraud and outside interference (Hill 2011, p.1102). The democracy has derailed in

Algeria (Entelis, 2011).

III

Existence of Pluralism in Algeria

Pluralism in Algeria has been absent since the days of revolution. There was a brief

interruption in the cycle of FLN (National Liberation Front) operated government during the

1980’s. Even though Benjedid government voiced opinion for some reforms, it took Black

October riots, to set the changes in motion. The new Algerian Constitution was voted in a

national referendum. According to Entelis (2011), the Socialist principles were eliminated from

the Constitution, as unnecessary to political identity and development of Algeria. Benjedid,

“incumbent leader with an unfavorable economic performance record would initiate a political

conflict to force the learning of his military leadership abilities on the population and thus

salvage, with some probability of his reelection” (Testas 2002, p.165). However, the short-lived

democracy came to an end during the military coup de’etat, when army generals ousted president


Benjedid from office (Mortimer, 2006). Today, Algeria has a strong authoritarian government

and a president who seems to win elections in a landslide every time. Algeria remains

authoritarian without the rule of law, free judiciary and fully contested political pluralism

(Entelis, 2011).

“The phrase political-bureaucratic mafia has often been used to describe government

officials and army officers who utilize their public offices for private economic gain. Such

individuals are accused of using sanitary inspections, customs regulations, and their influence

with magistrates to harass private companies that compete with their clientelist economic

networks creating a network of widespread corruption” (Entelis 2011, p.663). Therefore Political

parties and interest groups rarely enjoy the support of the government, since a majority of the

groups are part of the opposition. There are only few groups and parties which enjoy the

government support, since their influence over the members is strong. Two prime examples of

groups that enjoy governmental protection are the FLN (National Liberation Front) and the

General Workers Union of Algeria (UGTA). FLN is the revolutionary party which fought against

colonial rule; and every president elected since independence is a member of the party. In the

1970’s, the National Charter was drafted to identify the FLN as the only political party in the

state (Mortimer, 2006). The only time when the FLN lost, was during the legal elections in the

reform years 1988-1989. A newly formed, legally recognized party, the Islamic Salvation Front

(FIS), had beaten the FLN by a steep margin (Entelis, 2011). The former ruling party took the

loss seriously and organized massive counter protests using the Algerian Workers Union

(UGTA). The UGTA is the only legal union allowed in Algeria. All other unions are subjected to

judicial harassment and arbitrary arrests. Various bureaucratic red tapes are installed to prevent

establishing new unions: declining licenses and altering the union bylaws (HRW, 2014).


Algerian politicians vested all their power in democracy, and describe their state as

democratic, democratic government, and the policies that are introduced are will of the people

(Hill, 2011). Autocratic government resorted to democratization in political game to deal with

religious complaints and legitimacy, to create political opponents. Islamists are the most

qualified since it is easy to manipulate them and discredit them when the government loses

elections (Testas, 2002). Massive elections are held but lack proper credibility. All six presidents

who were in office have not been voted out of office by electoral system. Violence and reforms

during Benjedid’s term triggered a decade long civil war, which eliminated democratic

institutions and practices (Hill, 2011).

Collective Identity in Algeria:

The divisions exist in Algeria, like in any other country but also there are unifications.

Unified are young unemployed working class citizens. In pursuit of better living standard and

social care they tend to mend their differences for a period of universal suffering.

The Class Divisions exist since vast numbers of young people are unemployed. The gap

between state and society in Algeria is broad. Hydrocarbon revenues, aided by military

assistance to combat the war on terror, repressed development, impacted on quality of life and

political opportunity. Among other problems, Algeria is a youthful, overcrowded society, and

geographically dense population pockets exist in the northern part of the country. The urban

young population has problem of limited opportunities, seeking their income in the black market

economy (Entelis, 2011). Riots and protests are a regular feature of the politico-social order in

Algeria.

Vast socioeconomic complaints from Algeria’s population are viewed in contempt by

wealthy elites. Public strikes are daily occurrence in various professions: medical personnel,


school teachers, oil and gas industry workers. The government responds only if protests threaten

to be massive. The regime responds in basic quick fix method. An example is stopping price

increase, which is the main reason that gathered protestors (Entelis, 2011). International analysts

do not recognize general problems: economic collapse and diversionary politics, which are the

main reasons to ethnic, religious violence and source of ethnic divisions (Testas, 2002).

Ethnic and Religious Divisions are manifested between two major ethnic groups, Arabs

and Berbers or Kabyles. According to Scheele (2008), the secular government is tried to unify

Arabs and Kabyles under one rule of law. The government disregards the common law of both

ethnic groups. Many theorists blame religious fundamentalists and the Kabyles’ striving for

recognition, as potential instability in the country. Ethnically defined forces persist in their

boycott of national level politics (Entelis, 2011). According to Testas (2002), Islamic religious

groups are in a holy war (Jihad) against the regime, intending to establish an Islamic State. The

nationalist militia of the Ethnic Kabyle, has goals to establish secularist government, privatize

religion and establish Tamazight as official language.

If an ethnic or religious group inside the state expresses their “Islamist State” motto, the

group is discredited and put under scrutiny by the international community. Right wing elements

from other non-Islamic countries equate Islam with political violence and terrorism. The

domestic government sees disapproval of Islamists by the international community as a boost for

their legitimacy to stay in power (Testas, 2002). Clash of Civilization theorizes that ethnic and

religious divisions are reason for violence. The theory is partially correct, according to Testas

(2002): the international community refuses to acknowledge diversionary politics, economic

problems, excessive religious spending as causes of ethnic conflict in Algeria. Algerian leaders


also increased international and domestic fears from terrorism, in order to “tar all” Islamic

opposition movements by accusing them of having terrorist connections (Hill, 2011).

Political Competition and political parties across religious and ethnic boundaries do

occur in form of divisions, although sometimes those divisions are forgotten, when turning

against a common enemy. According to Scheele (2008), modern governments tend to shape laws

and opinions by relying on ethnic majority or minority, or status of an ethnic group. There are

three parties in Algeria that fight for common interest, and that is power.

FLN (National Liberation Front) is a secularist party, which was established during the

revolutionary war, and it was the only legal party established until 2011. The party is governed

by elites, and all presidents in Algeria are members of the party. According to Testas (2006),

FLN had a national mandate as a front, eliminating competitive political opposition.

FIS (Islamic Salvation Front) was the first regular Islamic party registered after Black

October riots, in late 1980’s. The party won in landslide elections. The military instigated a

military action in 1992 and ran the party underground. FIS leadership was arrested and many of

the followers were detained and tortured (Entelis, 2011). Since the mid 1990’s, the comeback of

FIS set a precedent that no party or a group, can use religion excessively as part of election

campaign (Hill, 2011).

“Despite the Military’s obvious targeting of Islamists, latter political suppression drew

heavy criticism even from FIS rivals. The FLN and the Socialist Forces Front (FFS), soon

proposed a tactical alliance with the FIS to counter the military government in an effort to

preclude the complete abandonment of the democratic process (Entelis 2011, p.659)”. Although

FFS had Berberist goals, the party had temporarily aligned with FIS for a brief moment (Hill,

2011).


Human Rights Situation in Algeria:

Human rights problems since 2010 in Algeria are: restricted freedom of assembly and

association, and arbitrary killings. The government is failing to address the question of

disappeared persons in 1990’s. There are reports of impunity, overuse of pretrial detention, abuse

of prisoners, and lack of judicial independence. Authorities use “security” basis to severely

restrict freedom of expression and movement. Women are also facing violence and

discrimination; restriction on workers rights is maintained (Entelis, 2011).

The Algerian government does not tolerate any non-governmental organization protesting

against government, especially human rights groups. The government is persistent to deny the

entrance of Non Governmental Organizations (NGO), to assess Human Rights in the country

(HRW, 2014). Convention on Elimination of All forms of Discrimination Against Women

(CEDAW), attempted to introduce into law, a better protection for women against domestic

violence and gender inequality. The reforms were unsuccessful since government set up “quid

pro quo” status (Bennoune, 2005). The domestic human rights activists are not spared

governmental abuse. In spring of 2013, three activists were arrested for sit-in protests outside the

courtroom, the charges were “inciting non-armed gathering”(Amnesty International, 2013). The

international community’s interest in hydrocarbons and the war on terror outweighs concern

about the absence of human rights in Algeria.

International Community:

According to Mortimer (2006), president Abdelazziz Bouteflika was described as super-

Foreign Minister of Algeria. During Bouteflika’s career as foreign minister Algeria was one of


the most influential in the Third World nations. Hydrocarbon development in the 1970’s,

propelled Algeria on international market. After 9/11, Bouteflika maintains rule in Algeria with

political support from the international community in the war on terror, and large corporate

interest in Algerian oil fields.

Per Mortimer (2006), golden period of Algerian foreign policy considered by many

scientists was between 1965-1978, an era of multilateral activity and international standing.

There were many international conferences where Algeria played an important role. An example

is Afro-Asian initiative that started conflict between Ben Bella and the army. Bandung II

conference was postponed after the coup ended. Then foreign minister, Bouteflika worked hard

to restart the conference in October 1965, but failed since the Soviet Union and China were

fighting for dominance in leading the conference. After the failed Afro-Asian concept, Algeria

accepted model of nonalignment and Third World solidarity, through Group 77 alternate model

to Bandung’s Afro-Asian initiative. In 1967, Algeria was host to first Group 77 conference of

ministers, preparing for the meeting of the United Nations Conference on Trade and

Development, a major North-South location during that time. At that time, Bouteflika was a key

person in restarting the nonaligned movement (NAM). In 1973, Algeria volunteered to organize

the fourth nonaligned summit, which attracted the largest number of Third World state

dignitaries. Algeria was elected to preside over the NAM, which helped Boumediene to convene

a global conference on Raw Materials and Development at the United Nations. The Sixth Special

Session of the UN General Assembly in April-May 1974 produced the Declaration on a New

International Economic Order (NIEO) (p.160-161).

In 1975, Algeria hosted the first summit for the Organization of Petroleum Exporting

States (OPEC). Participation of Algeria in NAM and OPEC automatically invited Algeria same


year to attend with a selected group of states in Paris North-South Conference. The same year,

Bouteflika presided over the Seventh Special Session of General Assembly, a place to pursue

implementation of NIEO resolution. Algerian representative was constantly present at the

international debate and negotiation on global economic problems; Bouteflika was

personification of its leadership role in Third World Affairs (161).

Bouteflika remained a controversial figure in Algerian politics followed by many election

scandals. One former government member called Bouteflika an “Algerian Impostor”; or how

former General Nezzar would state: “Sultan Bouteflika” (161). Despite the insults Bouteflika

remained powerful diplomat in the African region. As president of the Organization of African

Unity (OAU), elected in 1999 summit, Bouteflika helped in signing a treaty in Algiers between

Ethiopia and Eritrea in 2000. A triumvirate was formed in 2000, between South Africa, Nigeria

and Algeria to promote economic growth through New Partnership for Africa’s Development

(NEPAD). Bouteflika became the first Algerian president to attend in 2001 a Franco-African

conference held in Cameroon (162)

Relations Between Military and Civilian Government:

After the dissolution of the Revolutionary council, a national Charter was drawn naming

the FLN as the official source of national ideology and policy; everybody knew that the army

had the real political power. The army would select a person as FLN frontrunner, confirming its

role as a strong entity in Algerian political system (Mortimer, 2006). The influence and power is

mutual between FLN and the army: however, one has to control the army in order to maintain

power.

In the military coup d’etat led by Major General Khaled Nezzar, on January 11th 1992,

the army forced President Benjedid out of office. Newly appointed chief off staff General


Mohamed Lamari ruled with ultimate hardline doctrine of eradication of dissidents (Mortimer,

2006). The military saw the previous government as a threat to their rule. After a second round

of parliamentary elections the military high command declared that taking power from the

military is a threat to security and stability of the state. In March 1992, martial law was declared

and FIS ceased to exist as a legitimate political party. The coup went on peacefully since the FIS

leadership urged followers not to provoke the military. Coup instigators were feeling as winners

since nobody, especially the democratic west, condemned and criticized the acts of the Algerian

military (Entelis, 2011). Run on elections were held in November of 1995 FLN appointed

Liamine Zeroual president (Mortimer, 2006).

High Security Council installed after the coup declared state of emergency, which lasted

until 2011. All existing political institutions established in December 1991 were dissolved as

well as communal and municipal assemblies led by FIS members since 1990. Arbitrary

detentions, arrests and extrajudicial killings were imposed on the protesters and the opposition.

After FIS leadership was arrested, the rest of the party was forced underground (Entelis, 2011).

The Islamic Salvation Army a militant wing of FIS; has emerged to fight against the military

(Mortimer, 2006). The state security police was recreated after being suspended by democratic

government; press and national Assembly were suspended indefinitely. The Algerian army

became effective in terrorizing the civilian population (Entelis, 2011).

IV

Economic Development in Algeria

Many Algerians lost their standard of living since middle of 1980’s Chadli Benjedid

government proved to be ineffective in economic recovery after oil prices collapsed (Entelis,


2011). Problem that followed the economic crisis was a civil war, fought between government

security and the Islamic groups. Militant groups were formed in the post-military coup after

1992, as a response to military persecution of the FIS party members (Entelis 2011; Hill 2009).

Even though government abused their power without precedent, the FIS won 182 of 232 seats in

first round elections and the FLN won only 15 seats (Hill, 2009). Government owned industries

indebted themselves in the world community, but with falling oil prices they could not get

enough money to pay off the debts.

During the Black October riots in 1988, protesters attacked symbols of the state, the

wealthy owners and foreign businesses. The army was mobilized to restore order fast, but the

action damaged the government’s reputation severely. The riots of 1987 and 1988 were a

reflection of Algerian government incompetence to stop rapid decline of living standard.

Problem of Algerian economy was embedded in the country’s economic model followed by

rapid fall of oil prices in 1980’s. The country’s political leaders supported a model that was

unable to generate economic growth in order to support a fast growing Algerian population (Hill,

2009). Algeria lost its reputation as one of few stable welfare states in the third world. The

1980’s witnessed a rise and fall of democracy in the country (Entelis, 2011). Between 1994 and

1999 Algeria was marked as failed state in the eyes of the world community (Hill, 2009).

Partially the IMF and the World Bank influence aided the civil war outbreak in Algeria.

Economic Development: Rise and Fall of Algerian Economy

Previous regimes of Ben Bella, Boumediene and Benjedid promoted a socialist state

centered economic development (Hill, 2009). The program was presented in different light by

different administration, but the idea remained the same. The goal was to stimulate economic


growth, maintain next to full employment, achieve autarky and minimize long-term dependence

on outside technical and financial assistance. Government’s prime goal was maintenance of full

state control over the economy. Ben Bella’s economic model allowed workers to control

economy on micro-economic level, but major control remained in government hands. Various

subsidiary agencies were created to limit self-management ONRA (National Office for Agrarian

Reform); CCRA (Office for Commercial Agrarian Reform); ONAC (National Office for

Commercialization of Products) and CORA (Co-operative office for Agrarian Reform). These

agencies were used as a tool for controlling the self-management and making sure that

companies were completely dependent on government for marketing and financing the produce

(Hill, 2009). In 1980’s, Benjedid government permitted more independence to the managers,

enabling them to operate under supply and demand economy (Entelis, 2011). Boumediene

regime nationalized oil and gas industry, also creating network of 45 national industrial

corporations, eight banking organizations and 19 national offices. Every office created had

responsibility for each economic sector and virtual monopoly over the sector. The state power

was enlarged as most dominant employer and economic force. Algerian economy was developed

during Boumediene government following the French economic influence of Gerard Destanne de

Bernis. The concept stated: “investment in certain heavy industries would stimulate the

development of other industries and, therefore, the economy as a whole (Hill 2009, p.47).”

Therefore concept would create a locomotive effect and pull the agricultural domain (Entelis,

2011). Despite many agrarian reforms, government created a wide imbalance between industry

and agricultural sector (Hill, 2009). Agricultural industry failed and stagnated, which was

brought on by poor organization and motivation (Entelis, 2011). Benjedid’s regime offered two

five year program solutions to fix the economy problem. The first program was to stimulate the


development of a domestic consumer goods market. The resources and investments were

redirected from heavy industry to other parts of the economy. In the second five-year plan, the

need for minimal public spending motivated the government to encourage development of the

private sector. Since the previous regime favored only development and investment in oil and

gas industry, Algeria’s exports were almost completely dependent on sale of fossil fuels on the

international market. The falling prices lacked in flow of foreign currency, and deprived Algeria

in paying off its foreign debt. In an attempt to save their face and avoid economic responsibility,

government officials liberalized the economy. However, the state remained as the top controller

of jobs in the country (Hill 2009; Entelis 2011). Seventy percent of employed worked in

industry, the most dominant Algerian economic sector, 50 percent of these worked in

construction and 30 percent worked in services (Hill 2009; p.48). Benjedid played favoritism

through corruption, leaving unskilled people and underpaid educated people, without access to

foreign currency, forcing them to find their success in the black market (Entelis, 2011). The state

was main employer of workers in Algeria. The government run economy lasted until 1994 when

the IMF (International Monetary Fund) and The World Bank used their neo-liberal influences to

reform Algerian economy.

The World Bank and IMF: Relationship with Algeria

The high loans during 1970’s oil and gas economic development in Algeria were hard to

repay during 1985 oil price decline. Due to the economic collapse, Algeria’s international debt

increased to 55 percent of Gross Domestic Product (GDP). In 1993, the national debt was equal

to 70 percent of export earnings, thus disabling Algeria to stay abreast with their debt. The

policies suggested to the government by the IMF and World Bank to solve large foreign debt

were ignored. At the same time food shortages, corruption and high prices occurred (Hill 2009;


Entelis, 2011). Majority of financial aid given to Algeria through IMF and the World Bank came

from France and other European countries. France saw an opportunity to revitalize old colonial

influence in Algeria, but the attempt resulted in retribution from various radical organizations.

The IMF and the World Bank cooperation with Algeria occurred during Structural

Adjustment Programmes (SAP) in 1994. The government admitted fragility caused by their

international money borrowing during reform period of 1989-1991. Several times Algerian

government borrowed money from the IMF and the World Bank in form of assistance to

maintain reforms during the same period. The IMF and the World Bank financed SAPs which

advocated adoption of neo-liberal economic principles during President Zerual’s political term

(Hill, 2009). Liamine Zeroual was appointed minister of defense during 1992 presidential coup

d’etat, and in 1994 was appointed President. To make it legal, High State Committee (HCE)

confirmed Zeroual as president through extra-constitutional process (Mortimer, 2006). Some of

the SAP goals were creation of market-influenced economy with low trade barriers and

balancing the budget by lower public spending. The SAP programs influenced two areas of

economy: privatization and government welfare provision (Hill 2009; p.49). International

Monetary Fund argued for reduction of public sector as a condition for foreign capital investment

to private sector necessary for revival of growth. The World Bank agreed with the IMF and

viewed private sector as creation of new jobs and stable economic growth. First law of

privatization was enacted in 1995 with support from the World Bank, which allowed a full

private ownership of government owned businesses. Even though Zeroual government showed

cooperation, the transition was never completed. The IMF blamed government for slow

privatization process, urging the government to set a timeframe for completing the process,

establishing a confidence among foreign investors (Hill, 2009). The laws governing the


economic activities are partitioned, not implemented properly and not consistent with market

economy (Entelis, 2011). The World Bank supported partition of large state enterprises and

selling them on a piece rate, if the business could not be sold as a whole. In spite of criticism, the

IMF supported current administration of President Zeroual, and their effort in supporting the

SAP economic reforms. The IMF claimed that the reforms had helped in stabilizing Algerian

economy, especially praising government economic gains and cutting fiscal deficit in half (Hill,

2009).

Although, the deficit was cut and debt service ratio lowered, SAP plans had caused harm

in socio-economic aspect. Unemployment increased 190 percent from 1989-1993, power of the

purse fell by 20 percent between 1989-1995 and by 1998 40 percent of the people fell below

poverty line. In the same time that living standards were declining, government welfare was also

being cut in accordance with SAP agreements. Decrease in food subsidies affected all Algerians,

and the country’s poorest were stricken the hardest (Hill 2009; Entelis 2011). In 1992, the High

Council (HCE) reintroduced new welfare system in order to compensate for lowering food

subsidies. The IMF and the World Bank criticized the government for wasting time on

inadequate procedures. In 1994, under supervision of the IMF new welfare system was

implemented, which aimed to support the impoverished and disabled in the household. Also

Public Works project was introduced, the project stipulated that all unemployed capable for work

were paid half day for a full day of public work. The scheme covered 15 percent of population

during 1995, but in 1992 same program had covered 60 percent of the population. At the same

time civil war was raging between the opposing armed Islamic groups and the government

supporters (Hill, 2009).


SAP programs carried a binding agreement between Zeroual government, the World

Bank and the IMF. The agreement underlined military action against the Islamic insurgents and

maintaining of government stability by the same apparatus. Zeroual and Bouteflika governments

established a two-part plan to enforce the rules given by the finance organizations. The first plan

was to exterminate the insurgents using military force; second plan aimed for political

liberalization, but limiting the participation in the process. The plans depended on the financial

windfall the state gained as a result of its implementing the IMF’s and World Bank’s

recommendations (Hill 2009; p.51). The financial assistance was crucial in preventing insurgents

to overthrow the government. The IMF and the World Bank helped finance government’s

advantage in the civil war. Government was not the sole beneficiary of international support in

finance, the GIA (Armed Islamic Group) enjoyed informal economic support through the black

market. Ability of various radical groups to abuse informal economy was due to liberalization of

the economy co-sponsored by the IMF and the World Bank (Hill, 2009).

Since the beginning of the 1990’s France was offering Algeria to refinance a debt owed

and solve their economic problems. Credit Lyonnais agreed to allow $1.5 billion refinance

agreement to High Council of Algeria. Although the French government was worried about

human rights and war crimes committed by security forces, de facto economic aid was enabling

Algerian government to fight Islamic insurgents. France increased aid to Algeria after the

bombing attacks in Paris, perpetrated by GIA (Armed Islamic Group). France was the main

sponsor of European Union agreements with Algeria from 1990’s forward. Interest of the EU

was ending conflict in Algeria, revitalizing economy and improving human rights. Two prime

agreements were achieved between EU and Algeria, Euro-Mediterranean Partnership (EMP)

1995 and European Neighborhood Policy (ENP) 2003. Although different, both ENP and EMP


policies addressed same socio-economic, political and cultural problems that contributed to civil

war in Algeria (Hill, 2009). Europeans have increased demand for Algerian hydrocarbon

resources; making strategic politico-military alliance with Spain, Portugal, Italy and France

(Entelis, 2011). GIA campaigned series of bombings on French infrastructure, to retaliate on

France’s support for Algerian government. A series of bombings in subways and railways

occurred during the French military aid to Algerian government (Hill, 2009).

Not only Zeroual’s and Bouteflika’s government enjoyed liberalized economy supported

by the IMF and the World Bank. Various Islamic groups benefited through privatization and

high unemployment rates. The formal economy was replaced by informal black market

economy. Rise in smuggling occurred after staggering increase in unemployment. Therefore

economic breakdown in the country provided radical groups such as GIA with new recruits,

young men unemployed and disappointed in the system (Hill, 2009). Under the circumstances

gang leaders found low living standards and zero opportunity convenient to fill their ranks.

Algeria’s ailing economy today is far away from impacting a political change and long-term

peace. The same situation galvanized population during 1988-1992, also based on attempt of

failed political reforms (Testas, 2002). Current re-election of President Abdelaziz Bouteflika,

could bring the same instability back to Algeria, with much larger consequences for the people.

Recent Economic Developments in Algeria

The state maintains a leading role in the economy as employer, investor and regulator

(Entelis, 2011). According to World Bank report (2005), in Bouteflika’s first two terms, Algeria

saw development of market economy and opening gates toward international trade by increasing

reliance on private sector. Key reforms were pursued in education, the role of the state and

administration. United States granted $7 billion dollars of aid between 2001-2004, $55 billion


package was made from 2005-2009 through public expenditures. The security situation has

improved according to the report. The government expected population to return in rural areas;

and return of the foreign investors. However, lingering problems remain: high unemployment,

water shortages and housing crises. If these issues are not addressed the population will hold

authorities in contempt. The people demand from authorities to address constant problems of

economic growth and jobs, services, equity and governance (pp.1-2).

According to Finance and Development report (2008), Algeria achieved stable

macroeconomic growth. Reforms are necessary in the financial sector and to reduce

unemployment. Top priorities entail improvement in productivity and diversifying of the

economy away from hydrocarbons. High growth was attributed to higher hydrocarbon

production, faster services, public works and construction. Despite all the improvements,

unemployment remains high among younger population (IMF, 2008).

Christine Lagarde, director of the IMF, in January 2013 characterized economic

development among Maghreb countries, as a great Arab awakening. She also pointed out that

Foreign Direct Investments (FDI) combined, have increased over the past decade from $3 billion

to $12.3 billion in 2008. Despite 3 percent growth in GDP, this was the lowest growth reported

in comparison with other emerging regions of Asia, Latin America and Europe. Decrease in the

GDP was blamed on the instability in the region. Mrs. Lagarde calls on more openness in the

market economy for Maghreb region. The director also points out that benefits of FDI are

important for growth, circle of higher productivity and enhanced economic diversity. Also she

pointed out that creating alliance with BRICS (Brazil, Russia, India, China and Spain) countries

will help lower Maghreb dependency on the European Union.


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