Is Algeria next?

By James Fallon

As protests in Tunisia, Egypt, and Libya captured international attention, riots swept Algeria earlier this year. But as unrest elsewhere reached a crescendo, the turmoil in Algeria went quiet. Since then, Algeria has escaped the world's attention, but long-term damage has been done. Local anger at its government is high, and President Abdelaziz Bouteflika's reform program -- aimed at improving political representation and official transparency -- is unlikely to change that. Without a surge of fundamental political reform, Algeria could quickly become unstable, and the concentration of resources in a few hands, the resulting corruption, and weak governing institutions make successful reform highly unlikely. The regime is not on the verge, but widespread social unrest, regime infighting, and a looming presidential transition will only add to the risk of political instability over the next three years.

Algeria's oil and gas exports leave its government flush with cash. In fact, the country's central bank governor noted in September that foreign currency reserves had topped $170 billion. The Algerian government avoided the fate of President Hosni Mubarak in Egypt in part by using some of this cash on subsidies -- to reduce consumer prices and raise public sector salaries, for example.

But money alone can't buy good governance. The state continues to provide Algerians with lousy social services and all that wealth isn't creating nearly enough jobs. Rampant corruption at the highest levels and a near total lack of accountability exacerbate public anger. Events like major electricity outages and the exposure of corrupt public housing programs continue to spark unrest. Labor activism is on the rise.

Even as the regime's popular legitimacy erodes, its ageing leaders resist making plans for what will come next. Infighting between civilian and military power centers triggers dueling corruption investigations and abrupt leadership changes at key ministries and state-owned companies like oil and gas giant Sonatrach. President Abdelaziz Bouteflika is still widely credited as the man who brought a decade-long civil war to a close, but age is catching up with him, and he's been ill for years. His term isn't set to expire until 2014, but his sudden death or incapacitation would leave the transition in the hands of senior military leaders, some of whom carry the taint of atrocities committed during the fighting. An internal power struggle among civilian and military leaders -- or within the armed forces itself -- might well spill into the open and provoke a broader conflict. Even in the best-case scenario -- Bouteflika serves out his term and a managed transition begins in 2014-there is little reason for optimism that serious unrest can be avoided.

But the tipping point into violence could come much sooner. Legislative elections are scheduled for 2012. With expectations raised by the sweeping changes across North Africa and the Middle East this year, this could be all Algeria needs for a true test of the regime's willingness to tolerate dissent -- and of the people's tolerance for more of the same.

James Fallon is an associate with Eurasia Group's Middle East practice.