Algeria's winter of discontent
Algeria is facing economic challenges that largely depend on the price of oil, and therefore President Abdelaziz Bouteflika is pushing Saudi Arabia to cut its oil production to force up prices, which would benefit Algeria.
The Algerian regime faces tough decisions this winter as it copes with falling revenue and low oil prices. President Abdelaziz Bouteflika has called the situation "worrisome" and is pushing Saudi Arabia to cut its oil production to force prices up.
The last Arab republic without an Arab Spring, the People's Democratic Republic of Algeria is one of the most opaque police states in the world. At 77, Bouteflika is serving his fourth term despite suffering from a stroke in 2013. He rarely appears in public and often travels to France for health reasons. Behind the scenes, the army's generals and the intelligence chief wield enormous power and are referred to as "le pouvoir." Decision-making is a mystery.
Oil and natural gas sales are key to the economic prosperity of the almost 40 million Algerians, 70% of whom are under the age of 25 and 30% are younger than 15. Unemployment and underemployment are severe, and housing shortages are endemic. Fortunately, the government has $190 billion in reserves to cover deficit spending.
Last weekend, the government announced the first of what is expected to be many cost-cutting measures. Public sector job hiring will be frozen in 2015. The public sector is Algeria's largest employer, covering 60% of the job market. Infrastructure projects such as highways are expected to be shelved next, and extensive subsidies for electricity and education are also in danger of cuts.
