Old guard holds back Algerian economy

14 September 2008
Bouteflika’s fortunes are dependent on an old guard of revolutionaries who undermine hope of reform.

Not for the first time, Algeria’s President Bouteflika has sacrificed his economic reform programme in favour of his political ambition.

Bouteflika sent shockwaves through the country’s economy at the end of June when he declared that foreign investors were not benefiting Algeria as they should, and in future will be limited to a minority stake in projects in the country.

The situation is reminiscent of 2006, when Bouteflika overturned a law introduced the previous year that would have allowed international firms to take majority stakes in upstream oil and gas projects. Then, a combination of his ailing health and Algeria’s increased oil earnings made Bouteflika less confident about pushing a liberalisation agenda against his political backers.

This time around, the president needs the support of these powerful interest groups again as he seeks to amend the constitution to enable him to stand for a third presidential term in April.

There are plenty of liberal-minded figures in the government. Energy Minister Chakib Khelil and Privatisation Minister Hamid Temmar are among those in the cabinet who have tried to push forward the country’s economic reform programme.

But as long as Bouteflika’s political fortunes are dependent on the revolutionary generation behind the scenes, it is unlikely that they will be given the scope to turn this programme into a reality.

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