A ‘perfect coup’ is unfolding in Algeria
By Dr. Cyril Widdershoven – Berry Commodities – Global Head of Strategy & Risk
The ongoing unrest in one of North Africa?s largest oil and gas producers Algeria is reaching boiling point.
After weeks of protests from the opposition, aimed at blocking the possible re-election of long-time president Bouteflika, there still doesn?t seem to be a resolution within reach. Even after the sudden withdrawal by Bouteflika from new elections, demonstrations continued.
Since the Algerian Revolt against France, the North African country has been ruled by a bipartisan system based on a political party, coming from the Algerian independency groups, and the newly formed Algerian army. This system has endured a multitude of changes and crises, and got almost obliterated during the brief rule of the Islamists after their election victory in the 1990s. Soon after this Islamist victory, the Algerian army with support of the old guard, took over and reinstated their own rule. The current situation looks almost the same, with one big difference. Algerian military strategists seem to have been reading all reports and analysis pieces written during and after the Arab Spring developments in Egypt. Cairo?s long-time ruling elite, headed by president Husni Mubarak, had outlived its time. Democratic and religious opposition combined their forces and removed Mubarak from power. At the same time, the Egyptian army stayed in their barracks, not interfering at all, despite the fact that Mubarak?s rule was built with the support of the army. After the removal of Mubarak, and the electoral victory of the Muslim Brotherhood, the army put in place its own strategy to regain its grip on the fractured country. Within 2 years, Egypt?s minister of defense and general Sissi took over, with a huge mandate from the Egyptian public.
When looking at Algeria, the same structures and strategies seem to be unfolding. An old president, supported by a corrupt and undemocratic political party, is heading for the abyss. Algeria?s economy is struggling at the same time, even though the country holds vast oil, gas and mineral resources. Mismanagement and clientism, combined with paternalistic political views, have brought the country to its knees. Europe?s former 2nd largest gas supplier is even struggling to keep its gas and LNG exports in place, despite its reserves being immense. The time is rife for change, looking at the political disorder and economic crisis scenarios.
The North African country is facing the Egyptian scenario without realizing it. The movement for change, currently being supported by the Algerian armed forces, is not going to increase democracy or change the rules of engagement. The army has analyzed the situation and has come to the conclusion that it needs to enter the void left by Bouteflika. The armed forces, which have always been a prominent force in the country?s domestic politics are reinventing themselves and a new generation of military politicians is being groomed. Without any doubt, Bouteflika will be removed, either by the National Assembly or forcefully by the army in the next couple of days/weeks. With a grand gesture, General Salah will hand over the powers to the president of the Algerian Senate, Abdelkader Bensalah, who will take over as interim president. The latter however will know that he has been given the position due to action of the military forces.
If the Cairo 2.0 scenario plays out, no real changes in the power structure in the country will be made. From a Western point of view, increased powers for the army are always bad, at least in the eyes of the media and politicians. Looking at the current state of the country, a power vacuum will bring no good at all. The economic crisis, combined with a fledgling oil and gas sector, needs some hard and strict changes the coming months. The Algerian opposition is not able to do this, as all crucial economic sectors are still in the hands of the ruling party structures. The army move is already seen as the ?perfect coup?, as there is no viable opposition in place to take over when given the chance.
At the same time, Algeria?s neighbors are on edge. Algiers?s main rival Morocco will aim to keep a very low profile, and make sure not to stir up a possible regional conflict, such as the one in Western Sahara. Others are very worried about instability as Algeria is an important party in neighboring Libya, which is still struggling to get its act together. The super-powers US and Russia also have a lot at stake. Certain pundits in Washington will see a possible new opportunity for a rapprochement with Algeria, as Bouteflika has been leaning towards Russia. Washington?s dream could, however, be a fata morgana, as Moscow has been on the ground since the 1960s. Putin?s Mediterranean strategy, after getting a stronghold in Syria again, entails full military cooperation (army and navy) with Algeria. And after a short break in the 1990s, Russia, once again has a full grip on the North African country, supplying it with high-tech arms while entering its oil and gas sectors too. Russian officials even have stated that around 50% of total arms exports to Africa go to Algeria. At the same time, Moscow and Algiers are both worried about US-NATO operations in and around Central Africa or Libya. Moscow?s current analysis for sure will be that a military move in the country is not going to threaten its influence at all.
Europe, as always, is waiting for things to happen without showing any pro-active strategies. Algeria is close to the soft belly of Europe, and is potentially an entry point for migrants to the continent, but Brussels and NATO have so far kept quiet. At the same time, European based agencies such as the IEA in Paris publish reports that say that Algeria?s oil and gas production and exports are not yet threatened at all. The latter is in stark contrast to reports that US oil major ExxonMobil?s talks with Algeria stalled last week due to the unrest. At present there has been no real threat made by any party to Algeria?s oil and gas fields or exports, but when the heat is on Europe?s energy supplies could be squeezed. A possible counter-reaction by either Bouteflika supporters or disillusioned protesters can be expected. Algeria?s only life-source is oil and gas, so an eye should be kept on it. Growing instability in the country also will have its detrimental effects on Western Libya and the regions of Mauritania/Western Sahara and Central Africa.
By Dr. Cyril Widdershoven for Oilprice.com