Algeria: Country Risk Report
Geopolitical Report ISSN 2785-2598 Volume 42 Issue 17
SpecialEurasia OSINT Unit
Executive Summary
Algeria, the largest African nation in terms of land area, is facing intricate socio-political and economic difficulties. The military continues to have a powerful influence on the political scene, while the public unrest persists and there is a gradual shift towards a more democratic system.
Economically, Algeria’s dependence on hydrocarbons leaves it vulnerable to global market shifts, exacerbating internal socio-economic issues such as high unemployment and widespread corruption.
Security concerns persist, particularly from Islamist militants, although robust counter-terrorism measures have mitigated some risks.
This report provides a country risk assessment of Algeria’s current situation and offers insights for stakeholders.
Historical Background
Algeria’s modern era began with the French capture of Algiers in 1830, marking the start of a brutal colonial conquest. Following a bloody eight-year war, Algeria finally gained its independence and sovereignty in 1962. Since its establishment in 1954, the National Liberation Front (FLN) has played a crucial role in the country’s politics. However, its influence has diminished over time, particularly among the younger generation.
In 1988, widespread public unrest led the government to institute a multi-party system. In the 1991 legislative elections, the Islamic Salvation Front (FIS) experienced substantial success, which resulted in military intervention and a subsequent civil conflict from 1992 to 1998. The government eventually regained control, and FIS’s armed wing disbanded in 2000, with FIS membership becoming illegal.
Political Environment
Algeria’s political environment continues to be intricate, with a significant influence from the military. Despite efforts to introduce political reforms, public dissatisfaction persists.
Abdelmadjid Tebboune, elected as President in 2019 amid low voter turnout and ongoing protests, has implemented several changes, including constitutional amendments and electoral law reforms. However, these measures have not fully addressed the underlying issues of political corruption and the lack of genuine democratic processes.
The FLN and its coalition partner, the Democratic National Rally, experienced significant electoral losses in the 2021 parliamentary elections, while nationalist and Islamist parties saw considerable improvements. This fragmentation reflects ongoing political volatility and challenges in achieving stable governance.
Economic Environment
Algeria’s economy is heavily reliant on hydrocarbons, making it vulnerable to global oil and gas price fluctuations. Despite possessing large reserves and potential for shale gas development, years of under-investment have hindered the country’s ability to increase production.
High unemployment rates, particularly among the youth, and rampant corruption add to the complexity of the economic environment.
Economic reforms have been slow, impeded by an inefficient public sector and bureaucratic red tape. Inflation and a parallel market for the Algerian dinar exacerbate the economic difficulties. Many Algerians struggle to afford essential commodities, leading to frequent socio-economic unrest.
Social and Security Environment
Significant challenges mark the social landscape in Algeria, including high unemployment and limited opportunities for young graduates. These socio-economic frustrations have fuelled public protests, such as the Hirak movement, which led to the resignation of former President Abdelaziz Bouteflika.
Security threats from Islamist militants remain a concern. Groups like al-Qaeda in the Islamic Maghreb (AQIM) and the Islamic State (IS) continue to target state symbols and foreign interests. Although Algeria’s counter-terrorism strategies have been effective, the threat remains, particularly in the Kabyle region and border areas.
Besides terrorism, Algeria faces issues of petty street crime and violent offences, including muggings and kidnappings.
While major cities have relatively developed infrastructure, remote regions experience sub-standard facilities and water scarcity, which worsen socio-economic divides.
Conclusion/Recommendations
Algeria faces deep-rooted political, economic, and social challenges. To promote stability, the political landscape, currently controlled by the military and tainted by public dissatisfaction, needs substantial democratic reforms.
Economically, diversification away from hydrocarbons and addressing systemic inefficiencies and corruption are crucial for sustainable growth. Efforts to create employment opportunities and address socio-economic grievances are essential to mitigate unrest.
Security remains a significant concern, with ongoing threats from Islamist militants. Strengthening counter-terrorism capabilities and ensuring robust law enforcement are vital. Improving infrastructure and addressing water scarcity in remote regions will help bridge socio-economic divides.
To effectively interact with Algeria, stakeholders must possess a thorough comprehension of the intricate risks involved and implement strategies that promote political stability, economic diversification, and social cohesion.
Investing in sectors such as agriculture, renewable energy, and tourism, while fostering transparent and efficient governance, can unlock Algeria’s potential and contribute to a more stable and prosperous future.
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