Algeria is making tentative steps towards opening up its economy and confronting political transition, despite widespread speculation that it is a crisis waiting to happen, according to a new report from ECFR.
“Deciphering Algeria: The stirrings of reform?” by ECFR Visiting Fellow Andrew Lebovich explores the economic and security challenges facing Africa’s largest country. It challenges the widely held perception of Algeria as stable but stagnant, pointing out that the country has gradually begun to open up.
On security, Algeria has increased its cooperation with neighbours and reinforced its own internal security apparatus to respond to threats of terrorism and instability coming from outside Algeria’s borders. The threat of this kind of terrorism was exemplified by the 2013 In Amenas attack that was reportedly organized in northern Mali and Libya.
On the economy, there is widespread acceptance of the need for economic reform, with Algeria’s highly subsidised domestic market under threat from plummeting oil prices. However, proposals for reform have been – so far - held back by Algeria’s complex political dynamics and widespread fears of protest and unrest should prices rise. However, increasing numbers of dissenting voices are now being heard in the public debate and there is growing pressure from new voices – in business and in government – to lessen Algeria’s dependence on oil.
The paper also highlights growing relations between Algeria and some of its nearer European neighbours, including Italy and Spain. However, the paper carries a cautionary message for EU institutions and member states seeking to deal with Algeria, advising them to moderate their demand-led interactions with Algiers, and instead work to both improve the existing hydrocarbons infrastructure and to assist Algeria in diversifying its economy.