These are Algeria's big challenges and opportunities

Five years after the start of the so-called Arab Spring, the hope that initially characterized those revolutions has largely been dashed. In many cases, the revolutions have evolved into brutal and protracted internal conflicts, with no solution in sight. Amid all of this strife, the international community has paid little attention to countries like Algeria, where the revolutionary spirit was stifled while still incipient. But Algeria’s fate is back on the world’s radar – and not a moment too soon.

On February 7, Algeria’s parliament approved a new package of constitutional reforms, which, among other things, limit presidents to two terms (President Abdelaziz Bouteflika, the last surviving leader of Algeria’s war of independence against France, has been in office since 1999) and recognize some fundamental freedoms. These steps, in the making since 2011, aim to strengthen Algeria’s democratic standing; but they have been widely criticized as insufficient.

What is not in doubt is that the reforms come at a sensitive time, when Algeria is plagued by political and economic uncertainty. The “consensus” that supposedly shapes Algerian politics has, in fact, paralyzed decision-making for many years now. With the ailing Bouteflika not seen in public for more than a year, important questions have emerged about how the 2019 presidential election will play out. Efforts over the last three years to curtail the power of the security and intelligence services – in September, Mohamed Mediene, who had been chief of the intelligence services since 1990, was forced to retire – are just one source and manifestation of domestic political tension.

Significant external challenges have exacerbated Algeria’s situation. In particular, with the oil and gas industry accounting for fully 97% of Algeria’s export income, the sharp decline in oil prices since June 2014 has underscored the unsustainability of the country’s economic model.

Falling oil revenues mean that Algeria’s government cannot maintain the broad array of subsidies that traditionally served as a social balm, helping prevent protest. The government has already had to increase some taxes, while raising prices for fuel, electricity, and gas. If the price of oil does not rise soon, and Algeria’s leaders are forced to take more drastic measures, social stability could be jeopardized.

To be sure, some factors may help to stave off social unrest – namely, the population’s memories of the brutal civil war of the 1990s, in which more than 150,000 people were killed. But, memories fade as time passes, and a new generation of young people lack the same fear of social strife that their parents and grandparents have. In this social context, and if economic hardship persists, protests and even revolt may not be a distant prospect.

To avoid such an outcome, Algeria’s government must work fast to diversify the economy. But such concerted action will be difficult in the current political environment, especially in view of the government’s increased focus on security challenges in Algeria’s neighborhood.

Given the revolution in Tunisia, the war in Libya, the rebellion of the Tuaregs in Mali, and, most important, the 2013 terrorist attack on Algeria’s large In Amenas gas plant, the country’s leaders are placing an increasingly high priority on regional security. Although the constitution explicitly prohibits military intervention in other countries, Algeria has a clear interest – reflected in its foreign policy – in ensuring that its neighbors are stable and capable of dissuading extremist groups. For example, in Libya, Algeria has defended a process of inclusive national reconciliation of all forces, in support of efforts by the United Nations to stabilize the country.

The United States and Europe have already recognized Algeria’s leadership and cooperation in anti-terror efforts in its neighborhood. For the European Union, a further strengthening of ties with Algeria is particularly important, given both sides’ interest in the stability of nearby North Africa and the Sahel, as well as Algeria’s potential to help improve the EU’s energy security.

One key way Algeria can help improve security cooperation in its region would be to restore diplomatic relations with Morocco. True, the countries have been at loggerheads for 40 years, owing to their sovereignty dispute over Western Sahara. But the economic, commercial, and security-related dividends that renewed cooperation would provide should be enough to persuade them to reconsider this position. If the two North African giants were to recognize their mutual interests and reestablish ties, they would disentangle relations in the Maghreb. Algeria’s influence across Africa would also receive a boost.

Already, Algeria’s Africa-wide influence may be set to grow. Some have suggested that an Algerian candidate could become Chair of the Commission of the African Union when the current term expires next July. Here, Algeria’s consistent support for the AU and its commitment to regional security – exemplified in its role in the Mali peace agreement and its hosting of the Libya talks – would speak in its favor. If successful, Algeria would become the first North African country to lead the AU.

The severe challenge posed by falling oil prices and a jittery regional context attest to the urgent need for change in Algeria. But if the government acts to unblock the political system, diversify the economy, and ramp up diplomatic efforts, Algeria can emerge stronger and more influential than ever.