Is Algeria Finally Having Its Arab Spring Moment?

(Bloomberg) -- A rare public display of dissatisfaction with the government has sparked a crisis in authoritarian Algeria. In scenes invoking comparisons to the Arab Spring protests of 2011, thousands of young Algerians have taken to the streets. They’re fed up with an ailing octogenarian president who’s been in power for 20 years and with high unemployment and widespread perceived corruption. The protests are being watched closely in Europe and elsewhere: Algeria is not only Africa’s largest energy producer but has been a bulwark against Islamist militancy and migration from other parts of the continent.

1. What are the protesters after?

They want their 82-year-old president, Abdelaziz Bouteflika, to abandon his bid for a fifth five-year term in elections scheduled for April 18. The protests were spurred by anonymous exhortations on social media and don’t appear to have an organized leader. So far, demonstrators and the police have gone to great lengths to keep the gatherings peaceful.

2. How is the government responding?

Officials seem unnerved by the unprecedented rallies. Algerian prime minister Ahmed Ouyahia raised the specter of Syria’s civil war by saying that protests there also “started with flowers,” but his warnings were dismissed by young activists. Bouteflika, who had a stroke in 2013 and is rarely seen in public, issued a written statement saying he had “listened and heard the screaming of the protesters,” vowing to meet the demands of the people.

3. Is this kind of unrest new?

Yes and no. The country was relatively untouched by the turmoil of the Arab Spring, but Bouteflika faced smaller protests when he last ran for office in 2014. Back then, the government used water cannons against demonstrators but also boosted food subsidies and raised wages. The moves increased state spending by 16 percent, which was a manageable problem when oil traded over $100 a barrel.

4. Can’t he just do that again?

Handouts would be more difficult this time around because Algeria’s economy is still struggling to cope with four years of lower crude prices. Inflation is rising and the country’s foreign reserves are projected to plummet to $67 billion this year from $177 billion in 2014, according to the International Monetary Fund. Algeria’s budget deficit peaked at 16 percent of GDP in 2015 but has since narrowed.

5. What’s been the political situation until now?

Bouteflika -- who is currently in a Swiss hospital being treated for an undisclosed ailment -- is surrounded by a shadowy coalition of military, intelligence and business leaders known colloquially as “le pouvoir,” or “power” in French, who effectively run the government. Reports from the country suggest that Bouteflika is on the ballot because the pouvoir hasn’t settled on a suitable successor. The military, the country’s most powerful institution, is best positioned to take control of the government if Bouteflika dies or the protests spin out of control. The president retains a loyal following, especially among many older voters.

6. Is there any opposition to his rule?

Yes, but it’s fragmented. So far, opponents haven’t been unable to unify around a candidate to run against Bouteflika. Prominent potential challengers including Ali Benflis, a former prime minister who took part in the recent protests, have pulled out of the race in protest over what’s seen to be a sham election. Bouteflika will face at least eight candidates, but none is expected to present a serious challenge. “Elections are distorted by fraud,” according to Freedom House, the U.S.-based human rights group that ranks Algeria as ‘Not Free.’

7. How has Bouteflika held power so long?

The National Liberation Front, known by its French acronym FLN, has ruled Algeria since the country’s independence from France in 1962. Bouteflika, who has been in office since 1999, is Algeria’s third president and its longest-serving head of state. He is credited with restoring calm following a decade-long civil war that erupted after the military canceled an Islamist electoral victory in 1991. Older Algerians haunted by memories of the civil war have tolerated periodic government crackdowns to maintain calm, but young people have little connection to the war that gave the regime its credentials.

8. What does unrest mean for oil and gas?

The country’s national oil company, Sonatrach, has been at the heart of multiple corruption probes and has had six chief executives since 2010. Over the same period, Algeria has had five energy ministers. The government could try another “series of reshuffles aimed at placating protesters” angry about corruption, says Riccardo Fabiani, an analyst with research consultants Energy Aspects. But with the vast majority of oil and gas facilities located in remote areas far from urban centers, Fabiani adds, “the risk of disruption is low.”

9. How important is Algeria to world energy supply?

Algeria is a member of OPEC but one of its smaller producers, pumping about a million barrels of crude a day. Still, it supplies more than 10 percent of Europe’s natural gas (making it the third-largest supplier after Russia and Norway), which it exports by ship and pipelines under the Mediterranean to Italy and Spain. It’s also Africa’s No. 2 oil producer behind Nigeria. The country has ambitious plans to develop its onshore and offshore gas fields, start a trading business, revamp and build refineries and boost output of petrochemicals. The expansion hinges on stable political leadership and new laws that would attract foreign investors.

©2019 Bloomberg L.P.