What’s new? Algeria is now facing more challenges due to the social and economic fallout from the Covid-19 crisis and the country’s official lockdown measures.

Why does it matter? The Algerian government could react to this situation by taking on external debt and increasing austerity in its budget. However, such an approach could stir up social tensions and intensify the conflict between the Hirak movement and the state.

What should be done? The authorities should capitalise on this moment of national solidarity created by the pandemic by responding to popular protests with a lighter touch. The government and Hirak should sit together to discuss the country’s economic conditions and propose specific ways of reducing its exposure to fluctuating oil and gas prices.

Executive Summary

The economic and social fallout caused by the Covid-19 crisis and the Algerian authorities’ lockdown measures risk radicalising the Hirak protest movement. To avoid such a scenario, the Algerian state authorities should take advantage of the national solidarity created by the pandemic to use a lighter touch in its dealings with Hirak and support some of its citizen-led initiatives. If political dialogue is unrealistic in the short term, the government and members of Hirak should at least engage in a national economic dialogue to find a way to implement the structural changes needed to ward off a severe economic crisis. International financial organisations and friendly nations should stand by to offer the country financial support specifically for economic reforms, but without imposing overly-strict conditions. If Algeria accepts them, such reforms could weaken the powerful clientelist networks that profit from the oil and gas industry, and in turn possibly trigger more violence, repeating what happened in the 1990s.

Hirak is a largely non-violent and citizen-led movement set up in February 2019 when President Abdelaziz Bouteflika announced he was running for another term in office. Faced with the Covid-19 health emergency, the movement demonstrated civic responsibility by respecting the restrictions on movement put in place by the government in its attempt to curb the spread of the virus; it suspended its street protests and set up a solidarity network to reduce the lockdown’s social impact.

Although the Algerian government has taken emergency measures on social and economic issues, politically it appears to have called an end to its détente with Hirak, in effect since the Abdelmadjid Tebboune’s election on 12 December 2019. Thus, despite the promises of constitutional reform made in response to Hirak’s demands, there has been a noticeable security clampdown. Moreover, Algeria is facing a wide range of social and economic challenges due to the global economic slump and tumbling oil prices. The country’s macroeconomic outlook is grim given its dependence on oil and gas exports and the impact of lockdown.

In the short term, the Algerian government may need to resort to taking on external debt and tightening its austerity measures, and possibly face a resurgence of social tension as a result. When lockdown restrictions are lifted across the country, Hirak may therefore resort to a more aggressive stance. Conflicts with the government could flare up since the conditions are right for a resumption of fortnightly protest marches, as well as for general strikes and outbreaks of civil disobedience. The standoff between the authorities and Hirak since February 2019 could then become more entrenched. Or Hirak could dissipate and, in the absence of measures that address the grievances expressed by the movement, leave a vacuum. This could lead to small groups taking an increasingly hard-line approach and more radical actions in the not-too-distant future.

To prevent such unwelcome developments and broaden support for President Tebboune, the authorities should implement the new head of state’s promises of greater political openness. Such a response could include, for example, releasing political detainees, ending media censorship, and putting an end to arbitrary arrests. The government could also give increasing support to – but not seek to co-opt – the citizen networks set up by Hirak’s leaders to help fight the pandemic and reduce its social impact.

An immediate resolution to the conflict through political dialogue is improbable; however, a sustained and far-reaching national economic discussion could achieve this aim by bringing together leading political groups, unions and organisations, along with government representatives and the country’s most influential businesspeople, even from the informal sector. The objective would be to identify the obstacles in the way of genuine economic reform and to propose realistic and broadly accepted solutions to overcome them.

Finally, if the Algerian government decides to make a request, international financial organisations and friendly nations should provide financial backing, in particular to support an eventual economic reform strategy. In that case, donors should provide financial assistance without imposing excessively strict conditions (all-out liberalisation and severe austerity). Lacking an alternative, the authorities would either turn them down or would feel obliged to accept them. The latter scenario could destabilise important clientelist networks involved in controlling the profits from the oil and gas industry, as happened in the 1990s when this was a contributing factor to the spiralling violence of the “Black Decade”.

Tunis/Algiers/Brussels 27 July 2020