America’s China Policy Is Not Working
The Dangers of a Broad Decoupling
Amid the political turmoil that has shaped the Middle East and North Africa since 2011, the Algerian regime has proved resilient. Over the past five decades, the country has undergone periods of instability and crisis. After a brutal war that brought Algeria its liberation in 1962, French rule was replaced by a single-party state, military authoritarianism, and an oligarchy that still dominates the country 54 years later. As the Algerian lawyer and human rights activist Ali Yahia Abdennour once said, “We liberated the land, but not the people.” Even now, Algeria remains ruled by an opaque combination of military and security personnel and political elites. Yet Algeria’s regime remains standing, even as signs of decay pervade the country’s hollowed-out political system.
In February, I arrived in Algiers a day after parliament approved a new constitution. An atmosphere of discontent lingered in the streets. There was talk of crisis—oil prices had slumped and the dinar had depreciated—but Algerians have long grown used to such talk. Indeed, the country’s recent history has been filled with constant tension.
Today, however, Algeria’s apparently unchangeable status quo faces a combination of internal and external challenges that could plunge the country into disorder. The collapse in global oil prices has ramped up the pressure on the country’s economy, leading to rising unemployment. Frustration at corruption and an overbearing state bureaucracy have strengthened protest movements across the country.
The pressure comes at a bad time for Algeria’s ruling elites, who are struggling to work out what will happen when President Abdelaziz Bouteflika’s rule comes to an end. Now 78, Bouteflika has ruled the country since 1999. But after suffering a stroke in 2013, he has rarely been seen in public, leading many to wonder what role he actually plays in managing daily affairs. When he does appear, wheelchair-bound and frail, he is the embodiment of the regime he represents: aged and aloof, part of a generation of 70-year-olds presiding over a country in which roughly 67 percent of the population is under 30.
Yet some change may be afoot, although Algeria’s opaque governing system—which Algerians call le Pouvoir (“the power”)—makes it hard for observers to know. The ruling elite is setting the stage for a transition into the post-Bouteflika era. In January 2016, the president took a major step when he dissolved the Département du Renseignement et de la Sécurité, Algeria’s all-powerful secret service. The government created a new agency, the Direction des Services de Sécurité (DSS), directly supervised by the president and headed by General Athmane Tartag, a former chief at the DRS.
Although the secret services have always wielded great power in Algeria, their influence expanded even further during the civil war of the 1990s. Under the pretext of fighting terrorism, the DRS spread its reach into political parties, companies in critical sectors, universities, and media outlets. But in September 2015, the government removed the head of the DRS, General Mohamed Mediène, from his post. This was a powerful gesture: although most Algerians know little of Mediène, also known as “Toufik,” he was essential to Bouteflika’s rise to power. Under him, the DRS helped Bouteflika secure all of his election victories, including the one that brought him his fourth term in mid-2014. The president and his associates have portrayed the break-up of the DRS as a much-needed move to transform the security branch from a sort of political police into a counterterrorism agency. But it also removes a potential barrier to the regime’s succession plans: a strong DRS would have likely weighed in on who should succeed the current president.
The dismantling of the DRS also fits within the government's narrative that Algeria has become a normal state; “A Civilian State” has become one of the ruling elite’s favorite slogans. But whether or not the Algerian regime is truly aiming for this goal is uncertain. The slogan rings hollow given that for the past 25 years, the internal security services have operated entirely unchecked. And so when the government claims that the security services need to be dismantled, many Algerians ask, why now? From helping to rig elections to supervising the activities of political parties and activists, the DRS has long wielded power in Algeria. This makes it unlikely that the government will simply discard it altogether. A “cleaned-up” version of the security services, one that the president and his allies can easily tame, is a more probable outcome.
Until recently, the army, the security services, and the presidency formed the structural backbone of the regime. But, as Hacen Ouali, a politics writer for the newspaper El Watan told me in February, under Bouteflika, a new source of influence has emerged: money. A financial oligarchy has arisen, a network of businessmen around Bouteflika’s brother, Saïd, who benefit from state contracts and dealings with international companies that operate in Algeria. This injection of money into the system has destabilized the traditional way in which the regime has operated.
Reform of the secret services is one way the regime has tried to give the impression of modernization; constitutional reform is another. In February, the new constitution was approved by the parliament. The changes include the reintroduction of a limit of two five-year presidential terms and the recognition of Tamazight, spoken by Algeria’s Berbers, one of the country’s ethnic groups, as an official language. The new constitution also decrees that the prime minister must now be selected from the parliamentary majority, as opposed to being designated by the president.
The government first announced constitutional reform to quell protests in 2011. But it is hard not to see these changes as another move by the authorities to create the perception of change without the reality of it. Instead of an open discussion in parliament, the government itself designed the constitutional reforms, leading opposition parties, to call it a missed opportunity for real democratic opening. Most of the opposition then boycotted the vote. Opening the session, Abdelkader Bensalah, the speaker of the Council of the Nation, Algeria’s parliament, mentioned that Bouteflika had sent a message congratulating the members of parliament for their approval of the revised constitution. Yet parliament had yet to hold the vote. Even prominent members of the state, it appears, have a difficult time maintaining the fiction that the parliament plays any role in governing the country.
The government also didn’t seek the approval of the Algerian people in a referendum—perhaps because it knows that it is unpopular. Algerians know how their country is managed: decisions are first made in secret and then passed on to a council of ministers or to the parliament where they receive a veneer of legality and political legitimacy. This has been true ever since independence. In the 1962 elections for the Constituent Assembly, the first to take place in independent Algeria, the newly liberated people were allowed to vote but only for a list of candidates drawn from one party: the National Liberation Front (FLN). They were permitted to validate decisions that party apparatchiks had already made earlier that year in meetings in Tlemcen and Tripoli.
The single-party rule of the FLN defined independent Algeria until the crisis of the late 1980s, when the regime was forced to open the system to new political forces. In 1997, during the civil war, the National Rally for Democracy (RND) was established to contest elections when public fatigue with the FLN’s long hold on national politics reached its peak. But even though Algeria has multiple parties today, real power still resides in the shadows, in political dealings that take place outside party politics. Both the FLN and the RND are the political instruments of the ruling oligarchy. Both of them, as well as a myriad of smaller pro-government parties, supported the constitutional changes.
Part of the reason the opposition parties and Algerian society in general have seemed so uninterested in the constitutional changes is that the country’s constitution has typically applied very differently to the governing elite and to the governed majority. For instance, in the latest revision, the government added a paragraph to article 51 to limit “high state responsibilities and political roles” to citizens of exclusively Algerian nationality. But when parliament voted on the constitutional reforms, several high-ranking government officials still held dual nationality. The authorities then clarified that they would announce which posts would be barred to dual citizens later.
Since becoming president in 1999, Bouteflika has presided over three constitutional changes: in 2001, 2008, and 2016. But in Algeria, constitutional changes, like elections, can produce whatever result the governing elite desires. In 2008, Bouteflika changed the constitution to remove the two-term presidential limit. This allowed him to contest the election in 2009 and to secure his fourth presidential mandate in 2014. Now that the regime wants to demonstrate the progress it has made toward democracy, it has reinstated the two-term limit.
In January 2011, mass protests toppled Tunisian President Zine el-Abidine Ben Ali, who had ruled Tunisia for 23 years. Almost simultaneously, protests swept across Algeria, initially sparked by rising food prices, but spurred on by the events in neighbouring Tunisia. But the Algerian regime kept a firm grip on power, placating social unrest by increasing wages and swiftly repressing any protests. Travelling through the country in early 2011, I was surprised to see how quickly and effectively authorities would head off the slightest hint of a demonstration. They would close city squares that were scheduled to host protests, shut down public transport into the capital, usher away people who gathered in the street or stopped to see what was happening, separate protesters into small groups, and detain activists. In any of the handful of protests I witnessed at the time, in Algiers and other cities, there always seemed to be more police officers than protesters.
What’s more, the memory of Algeria’s past conflict prevented protest groups from reaching a critical mass. In the 1990s, a brutal civil war left between 150,000 and 200,000 dead; many more were raped and tortured. Stability was preferable, friends told me, to joining the regional protests that were challenging neighbouring autocracies. In February 2016, Ouali, the writer, repeated that sentiment: “Algerians have every reason in the world to want a revolution every day in the morning, but one big reason not to want a revolution. Our protest movements in the past led to a brutal civil war.”
The authorities also offered a handful of political concessions. In February 2011, the regime lifted the state of emergency that it had imposed in 1992. Two months later, in April, the government promised constitutional changes to allow for more political openness, and in September 2011, it opened the broadcasting sector to privately owned radio and television channels. Libya’s collapse into civil war, and the growing presence there of militants affiliated with the Islamic State (also known as ISIS), has sustained the regime’s narrative that an uneasy peace is still far better than chaos.
Yet every day, people still take to the streets. They protest about jobs, inflation, and the lack of housing and other services. For the most part, their demands are social, not political. The protesters lack the means to voice their demands that political parties or labor unions generally provide. As the French historian Benjamin Stora wrote in the early 2000s, as the country slowly recuperated from the worst years of its brutal conflict, “Algerian citizens are not demanding: ‘Down with the state!’ More modestly, they are asking that the state fulfill its obligations to protect, to hold regular trials, to assume fully its constitutional duties. The demand for a state of law includes the separation of the political and the religious, of the political and the military.”
The memory of Algeria’s past conflict prevented protest groups from reaching a critical mass.
The same could be said today. Although the regime has traditionally calmed discontent through public spending, the collapse in oil prices has made this much harder. Recently, some local protests have gained a national standing, such as the movement of the unemployed, which began in the southern towns of Algeria and has spread across most of the country.
Yet young Algerians complain about more than the lack of jobs. They are frustrated by an all-powerful state that refuses to treat them as citizens. They describe this daily struggle as hogra, or “contempt.” My first contact with its destructive consequences came in 2011. In El Achir, in the province of Bordj Bou Arréridj, I met the father of Abderrazak Lachhab, a 25-year old who had committed suicide a few weeks earlier by drenching himself in gasoline and lighting a match. Just like other victims of self-immolation, he acted out of frustration and revolt, his father told me. Despite several attempts, Abderrazak was unable to get an identity card from local authorities to take up a work position in Algiers, telling his father that bureaucrats insulted and verbally abused him. Because the local municipality refused to help him, despite his repeated requests, his job was eventually given to someone else. His father told me that after his son’s suicide, he wrote a letter to Bouteflika explaining that Abderrazak had killed himself because of the administration’s indifference. When he finally got a meeting with a local judge, to whom he gave the letter, the government official tore the letter apart, claiming that the Prophet does not pray for those who kill themselves.
Abderrazak’s self-immolation was one of several that took place at the time, spurred by protests about price hikes in late 2010. Many more have occurred since. Algerians are aware that whenever they need to interact with state bureaucracy, they will most likely be subjected to indifference, at best, and abuse, at worst. To avoid this, or to speed up what should be routine administrative procedures, it is best to know the police chief, or someone working at the local prefecture.
Small bribery is mirrored by large-scale cases of corruption involving infrastructure projects and large state contracts. Algerians have closely followed cases involving the state-owned hydrocarbon firm Sonatrach or the construction of a 1200-kilometre highway. Some have resulted in heavy fines and jail terms for company officials and foreign contractors operating in the country, but most Algerians are certain that those closer to the regime are judged by different rules. Former Sonatrach boss Mohammed Meziane, for example, who was found guilty of corruption, received only a five-year suspended jail term and a fine of 17,000 euros (roughly $19,100).
These cases have highlighted the true nature of Algeria’s judicial system. According to Amine Sidhoum, an Algiers-based lawyer, the Algerian judiciary remains vulnerable to political influence because the president still appoints judges to key posts. “The judicial system has never been independent,” Sidhoum told me. “On paper, there is the mention of an independent justice. But when you consider that judges are designated by presidential mandate and that the president can relieve them of their duties, you understand that justice in Algeria is really under the executive branch.” The government’s current reforms include no significant changes to the way judges are selected.
Politically stagnant and economically strained, Algeria is also crippled by the legacy of its two wars. The first was the war for liberation, which lasted from 1954 to 1962 and which established many of Algeria’s national myths. Walk into any bookstore in Algiers, and the national heroes who defeated the French and founded the country stare back from the cover of almost every book. Those same heroes are also immortalized in commemorative tiles across the city’s winding streets. The price of liberation was over one million dead Algerians. The reward was an independent nation.
The vestiges of the second war, the conflict of the 1990s in which the state fought Islamist insurgents, are less visible. But its legacy runs deeper. By most accounts, that second conflict cost between 150,000 and 200,000 lives. It is impossible to ignore this second conflict, for although no monuments commemorate it, most living Algerians are a constant reminder of it: the survivors of state torture; the memories of lost family members who were disappeared; former enemies forced to live as neighbours again in an artificial truce. Yet Algeria has never properly addressed the consequences of this war. “The regime and the military have decided that this period of Algerian history should be put aside. There is no public space of discussion about the black decade,” Omar Belhouchet, publisher of El Watan told me. “As if there were no victims and no victimizers, they want us to forget what happened.”
In 1999, the regime passed an amnesty law that allowed thousands of insurgents to disarm. A Chart for Peace and National Reconciliation was later approved in a national referendum in 2005. These two laws brought peace, but they also ruled out investigations and prosecutions regarding the fate of thousands of Algerians disappeared by security forces or killed by terrorists during the conflict. Thousands of Algerians have never learned what happened to their loved ones.
I met Dr. Salah-Éddine Sidhoum at his home in February. One morning in 1995, he woke up to learn about a failed attempt on his own life through the Franco–Moroccan radio station Medi 1. After he had spoken to an international television network about extrajudicial killings and forced disappearances perpetrated by the government, a death squad was sent to his home. Fearing for his life, he had taken refuge in a friend’s home the previous evening, a decision that saved him. He was then forced to spend nine years in hiding and a stint in the notorious Serkhadji prison in Algiers after being sentenced to 20 years in jail on spurious terrorism charges.
According to Sidhoum, Algeria’s military regime changes only to remain the same. “The dismantling of the DRS is for appearances, to appease the international community. These modifications are periodic, every couple of years something similar happens. Every time there is a crisis inside the regime, they change the window-dressing,” Sidhoum told me. He was sitting in the living room of the home where he has lived his whole life, and where, over half a century before, during the war of liberation, he saw French soldiers barge in to look for his grandfather. Like Sidhoum years later, his grandfather was saved because he was away at the time. “But even this regime will not last forever,” Sidhoum went on. “Everything has an end.”
Since President Houari Boumédienne nationalized the oil and gas industry in 1971, hydrocarbon exports have paid for the Algerian state and kept the regime in power. But the dependence on oil revenues comes with risks. The collapse in oil prices in the mid-1980s and the reductions in subsides that followed set the stage for the civil war of the 1990s. Today, oil revenues continue to determine the government’s ability to quell popular discontent. Hydrocarbons account for 97 percent of Algeria’s exports and 60 percent of the state’s fiscal revenues. But oil prices have plummeted from about $100 per barrel in mid-2014 to just under $40 in March 2016. Oil export earnings fell by 41 percent in 2015 to $35.7 billion, and Algerian authorities have said that energy-export earnings could fall even further in 2016, to just $26.4 billion. Lower oil prices have slashed the country’s foreign reserves, which fell from $194 billion in 2013 to $143 billion at the end of 2015. The budget deficit has nearly doubled, reaching 16 percent of GDP in 2015.
The country’s oil and gas reserves have allowed the regime to buy peace, but they have also thwarted its efforts to develop other sectors of the economy. Algeria is dependent on imports, which makes it vulnerable to increases in international commodity prices—in late 2010, protests broke out in response to rising food prices. Lower export earnings have transformed the country’s trade balance: a $25 billion surplus in 2011 became a $13 billion deficit in 2015.
Hydrocarbon exports have paid for the Algerian state and kept the regime in power.
In the medium-term, the government can dip into its reserves or borrow from international markets. But in the long-term, such measures might prove insufficient.
Algerians are nervous; they realize that things will likely get worse before they get better. They expect increases in electricity and gas prices in the 2016 budget, and they worry that unemployment will rise as both the private and public sectors start laying people off. Now, more than ever, people in Algiers constantly ask travellers for foreign currency. Besides the usual black market sellers, who stand by Port Saïd Square holding large stacks of dinars in their hands, every business interaction has become an opportunity for Algerians—taxi drivers, hotel receptionists, restaurant owners—to ditch the local currency for something more valuable. In a cartoon published in February in the newspaper Liberté, Algerian cartoonist Dilem drew a 200 dinar coin, with the title “Algeria presents the new 1 Euro Coin”—the value of the Algerian dinar on the black market.
The authorities have promised to diversify the economy and free up the private sector. But these measures will take time. The regime’s failure to diversify Algeria’s economy when oil prices were high in the early 2000s may prove to be one of its worst mistakes, but the regime prioritized reestablishing peace after the civil war. According to the IMF, Algeria accumulated yearly primary budget surpluses that averaged 7.7 percent of GDP between 1998 and 2008. Some of these revenues were used to pay off the country’s external debt, which fell from 60 percent to 5 percent of GDP over that period. Oil revenues also allowed the country to save money. The country’s national oil fund grew to 40 percent of GDP by 2008, which helped the country navigate the financial crisis.
Since then, however, Algeria has racked up budget deficits, even before the recent collapse in international oil prices. Since 2006, oil and gas output has fallen, mostly due to insufficient investment. Meanwhile, expenditures have risen, driven by ambitious infrastructure programs and by subsidies on milk, electricity, cooking gas, and housing—subsides that, in 2015, reached about 30 percent of GDP.
The regime has trapped itself in an ongoing spending spree to maintain stability. According to the IMF, Algeria’s fiscal breakeven oil price—the oil price necessary to balance its budget—has risen from $20 per barrel in 2003, to $125 in 2012, to $130.5 in 2015.
In response, the government has frozen or postponed several infrastructure projects. But as the authorities struggle to establish a succession plan, they will probably be reluctant to embark on a comprehensive reform of Algeria’s system of subsidies.
Other measures would also help galvanize the economy. Excessive red tape constricts the country’s private sector. According to the World Bank Group’s 2016 Doing Business ranking, Algeria was ranked 163 out of 189 countries for its business environment. This makes it hard to attract foreign investment and cripples local businesses. It takes about 20 days and 12 different procedures to open a company in Algeria, compared to ten days and four procedures in Morocco and 11 days and ten procedures in Tunisia. In Algeria, this has created a divided business world: in one group, there are those businesses that benefit from political connections. In the other group, there is everyone else.
The regime has trapped itself in an ongoing spending spree to maintain stability.
In its 2016 budget, the government introduced new measures to attract private investors. One of its more surprising moves was to grant permission for state-owned companies to sell up to 66 percent of their shares to private investors, with the possibility of a complete sale five years later, although the government would have to approve these deals. In theory, freeing up some of the major state-owned business in Algeria to private capital might improve their performance. But this measure alone will have limited impact.
At the same time, Algeria faces a high risk of terrorism. Every day, the newspapers proclaim a new achievement. “One terrorist surrenders in Tamanrasset,” “Three terrorists were eliminated in the Tizi Ouzu wilaya,” “Two terrorists shot down near Bouira.” The government claims that security forces killed 109 terrorists in 2015. The daily reports list the number of terrorists killed and the location, but they never describe the links between the terrorists or explain their activities or plans.
In most cases, these reports point toward the Kabylie region, to the east of Algiers. Driving around the area, you can understand why armed insurgents would choose it as a base. Outside the overpopulated villages lie deserted forested hills and high rocky peaks. On these roads, armed personnel guard every crossing. The army recruits always look too young for their uniforms and Kalashnikov machine guns, as they wave traffic through or watch from behind protective cement barriers. Sandbags guard the walls of the military outposts, small, makeshift barracks surrounded by barbed wire. The Algerian military tries to occupy all of the wild, unpopulated areas, lest the enemy take hold of them. But it’s unclear who exactly this enemy is.
There are two narratives about terrorism and the military presence in Algeria’s most important Berber region. To some, the terrorist activity in Kabylie, is the legacy of the civil war. Terrorist organizations such as the Salafist Group for Preaching and Combat, which later became al Qaeda in the Islamic Maghreb, formed as the civil war ended. They then took root in the region during the Black Spring of 2001, when the police killed a teenager and sparked a series of protests. The crackdown that followed led to a reported 126 deaths, most of them young people. Some point to this tension between government forces and the people who live in Kabylie as one of the reasons why the militant groups have established themselves there.
Others believe, however, that the authorities encourage, or at least permit, the terrorist groups to operate as a way to justify a heavy military presence in the region. They see the strong government presence as a continuation of previous policies that aim to “Arabize” Algeria’s Berbers. The truth is likely a mix of both these narratives. The regime may find it useful to allow a minimum level of violence as a justification for an inflated armed forces budget (Algeria remains the continent’s biggest arms buyer).
In the south, Algeria’s security challenges are more obvious. Militants have infiltrated across the porous borders with Libya and Mali. In early 2013, for instance, terrorists attacked In Amenas gas plant, resulting in the deaths of 39 hostages and 29 militants. The collapse of security in the Sahel and North Africa since 2011 has strengthened Algeria’s role as a critical ally of the west in the fight against terrorism, and cooperation with France and the United States has intensified in recent years. Algeria is now a member of the U.S.-led Trans-Sahara Counterterrorism Partnership. But, as the regime is well aware, such cooperation will help deter international pressure on the country’s rulers to liberalize.
Algeria’s regime will thus stagger on. The price of oil will, in part, determine the regime’s capacity to stave off rising discontent, but so too will the steps the current leadership takes to prepare for Bouteflika’s exit. The regime is fortunate that the opposition remains divided. But if the Algerian government does not enact the necessary reforms, public discontent, long simmering, may soon bubble over.