Algeria Country Report 2018: Bertelsmann Foundation Transformation Index

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    Regional instability, an increasingly important international role, the risks of terrorism spilling over from the turmoil in Libya, the rise of the Islamic State and tensions across the Sahel, and the unresolved question of ailing President Bouteflika’s succession, all impact Algeria’s political, economic and social stability.

    The constitutional revision process over the last few years led to a new constitution in 2016. Re-instating presidential term limits, making Tamazight an official language and strengthening the legislature all went some way to integrating societal demands. However, there remains skepticism among the population on implementation of the most serious reforms needed to strengthen justice, political participation and socioeconomic equality in the country.

    The 2011 political and legal reforms for associations, political parties, elections and the media have opened up some space in the political and public sphere. However, journalists, associations and social movements still face repression and barriers if they challenge the government. The re-election of President Bouteflika in 2014, despite his failing health and age, continues to cause frustration. A lack of transparency about the president’s health and plans for his successor has caused insecurity and great uncertainty about the future and stability of the country. Opposition parties are numerous since the 2012 law and are preparing for the 2017 legislative elections. The retiring of the chief of the secret service Département du Renseignement et de la Sécurité (DRS) was a significant development in political power relations in 2015.

    Anti-corruption initiatives and justice reform remain significant challenges to achieve, although Algeria has been commended for improving its financial controls to tackle money laundering and in 2016 was removed from the Financial Action Task Force (FATF) monitoring process. In terms of economic reforms, the government continues to make advances, although the public sector and hydrocarbon wealth still dominate the economy. Declining international oil prices over the last two years continue to create fears for the medium term stability of the Algerian economy and the government’s five-year national development plans. Austerity in the budget led to cuts around the country, particularly for infrastructure as well as social associations supported by the state. Price increases for basic consumer goods have created social unrest.

    Changes to the hydrocarbon laws in 2013 to allow fracking for shale gas were pursued by the government as a solution to the energy crisis. However, lack of consultation of the local population and perceived risks of environmental degradation led to protests across the country. With falling oil and gas prices in 2016, the government appears to have abandoned plans to frack in Algeria and the demonstrations have ceased for now.
    Previous commitments to invest in renewable energies appear to have suffered as a result.
    Foreign investment and bilateral trade cooperation with Russia has led to plans for a Russian nuclear power plant by 2025.

    In political terms, Algeria continues to experience low-level unrest and strikes. Sporadic demonstrations continue across the country. The government reacts with a combination of public consultations and short term subsidies, in addition to repression and intimidation of activists.

    In June 2016, Algeria was elected to preside over the First Committee of the United Nations on Questions of Disarmament and International Security, indicating a strong presence on the international stage in terms of peace and diplomacy. Algeria played an important role as a mediator in the Malian and Libyan crisis.

    In security terms, Algeria remains in a difficult situation. The fall of the Qadhafi regime and the dispersal of its arms across the Sahel have created deep instability at Algeria’s borders. As a result, Algeria will be heavily committed in its fight against national and international terrorism. Algeria has increased its defense budget to over €10 billion annually, now the largest in Africa.
    Original languageEnglish
    PublisherBertelsmann Foundation
    Publication statusPublished - Jan 2018


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