News You Really Need To See: “Algeria’s Winter of Discontent”

“Algeria’s Winter of Discontent”

Al Monitor, December 29, 2014

http://www.al-monitor.com/pulse/originals/2014/12/algeria-bouteflika-economy-oil-gas-military-police.html

“The last Arab republic without an Arab Spring, the People’s Democratic Republic of Algeria is one of the most opaque police states in the world.  At 77, [President Abdelaziz] Bouteflika is serving his fourth term despite suffering from a stroke in 2013. … Behind the scenes, the army’s generals and the intelligence chief wield enormous power and are referred to as “le pouvoir.”  Decision-making is a mystery.  Oil and natural gas sales are key to the economic prosperity of the almost 40 million Algerians, 70% of whom are under the age of 25 and 30% are younger than 15.  Unemployment and underemployment are severe, and housing shortages are endemic. … Last weekend, the government announced the first of what is expected to be many cost-cutting measures.  Public sector job hiring will be frozen in 2015.  The public sector is Algeria’s largest employer, covering 60% of the job market. … The last time oil prices crashed for an extended period in the 1980s, it set the predicate for Algeria’s disastrous 1990s.  Massive unrest and elections won by Islamists provoked a military coup that led to a prolonged civil war in which at least 160,000 died. Algeria’s KGB-trained intelligence czar, Gen. Mohamed Mediene (aka Toufik) played a key part in the 1992 coup and has been the head of the Intelligence and Security Department ever since.  He has run the secret service longer than any other intelligence chief in the world.  Memories of the horrors of the civil war have been crucial to discouraging an Arab Spring in Algeria for the last four years.  High oil prices were also critical, allowing the welfare state to buy off unrest. … Saudi Arabia is not close to Algeria, and the Saudi royals much prefer Morocco.  But King Abdullah does not want to see the Arab Spring revived in the Arab world.  The Saudis backed the Algerian generals in the coup two decades ago and persuaded the United States to do the same.  The king will watch Algiers carefully this winter.”

Quickie Analysis:  This article looks at why and how Algeria has kept its head down for the last four years.  Also an interesting case in point for those who still think oil prices are determined by supply and demand 🙂.

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