ANB- BIA SUPPLEMENT

ISSUE/EDITION Nr 324 - 15/05/1997

ALGERIA - An ANB-BIA DOSSIER

Compiled by ANB-BIA, Brussels, May 1997

PART 1/2

INTRODUCTION

A short sketch of the situation in Algeria which will hold parliamentary elections on 5 June 1997, the first since the crisis after the cancellation of the January 1992 elections.

I. Overview of History 1962-1992

A. Politics

After a bloody eight year war of liberation, Algeria became independent on 4 July 1962. As nearly a million Europeans left the country, it lost most of its administrators, entrepreneurs and technicians. 70% of the population was unemployed, but there existed a great feeling of national solidarity.

Ben Bella (1962-1965)

After a power struggle within the FLN (National Liberation Front) between the moderates (Ben Khedda, Boudiaf and Aït Ahmed) and the radicals (Ben Bella, Mohammed Khider and Houari Boumedienne), Ahmed Ben Bella seized power, purged the FLN of conservatives and nationalised French properties and other businesses. The FLN became the only legal party. Gradually Ben Bella personally usurped all power (Secretary General of the FLN, President of the country, Commander-in-Chief of the army). He was removed and imprisoned by Boumedienne on 19 June 1965.

Boumedienne (1965-1978)

A coup d'état brought the army to power. A revolutionary council of 26 officers became the supreme ruler under the direction of Boumedienne, who combined the functions of President and Prime Minister. He governed with a rod of iron, sacrificed social well-being and democracy to long term economic plans, and put the country on the road to national socialism. In 1976, after a wide ranging national debate, it was decided to pay more attention to the living conditions of the people and organise elections. Boumedienne, the only candidate, was elected President; in the Assembly all the deputies belonged to the FLN, a party which was far from being popular. The centre of power remained with the army.
When Boumedienne died in 1978, 70% of the population was under 25 years of age. All agreed that industry would not be enough to employ all that young population, and that no reform would be enough to compensate for loss of agricultural earnings. The seeds of crisis were being sown.

Chadli Benjedid (1978-1992)

Colonel Chadli Benjedid, Commander of the Oran region, a compromise candidate, was chosen as President. An opponent of the socialist policy of Boumedienne, he gave more freedom for private initiative and slowly introduced a market economy. But from 1985 on, the fall in oil prices greatly diminished the national revenue. On the other hand, the population explosion caused a meteoric rise in unemployment, and the housing crisis became more and more acute. On October 4, 1988, disturbances broke out in Bab-el-Oued and the protest spread quickly to other towns. The protests were aimed not so much at the President, whose reforms were generally welcomed, but at the big-wigs of the FLN who were living in luxury.
Fundamentalist groups were prominent in these demonstrations. Repression by the army caused hundreds of deaths. After these "events", Chadli quickly introduced reforms. In November, the functions of the President and the FLN were separated. The Prime Minister must henceforth be accountable to parliament. In February 1989, there was a referendum to introduce a multi-party system. No less than 47 parties came forward, and the FIS (Islamic Salvation Front) was legalised in September. Well known opposition leaders returned from exile in December: Hocine Aït, the leader of the FFS (Socialist Forces Front), and in September 1990, the former president, Ben Bella. New newspapers and magazines sprung up like mushrooms. There was talk of an "Algerian Springtime".

Elections

In June 1990, municipal and provincial elections were held. The FFS, which has many supporters among the Kabyles, and other parties, protested against the way the elections were organised, and decided to boycott them. Faced with a reduced choice, electors voted overwhelmingly against the FLN, and the FIS got 52.42% of the votes. In spite of that, Chadli decided to continue with the process of democratisation, and announced that parliamentary elections would be held in June 1991. A new electoral law made victory for the FIS more difficult. They called for a strike, and disturbances at the beginning of June 1991 caused the declaration of a state of emergency. The Hamrouche government resigned and the new Prime Minister, Ghozali, postponed the elections to December. Thousands of FIS supporters were arrested, among them their most important leaders: Abassi Madani and Ali Belhadj.
In the first round of elections on 26 December, of the 430 seats to be filled, 228 were decided; 189 of them went to the FIS. The FFS won 25 seats and the FLN only 15. A fierce controversy ensued between the supporters and the adversaries of the continuation of the democratic experiment. On 12 January 1992, under pressure from the army, President Chadli resigned and the second round of elections was abandoned. The army, together with the FLN formed a "Supreme State Council" of five persons, presided over by one of the historic leaders of the struggle for independence, Mohammed Boudiaf, who had lived in exile in Morocco since 1964. The FIS was dissolved, its leaders arrested and a state of emergency declared. It was then that the spiral of terrorism and repression was set in motion, and nobody is safe from either of them. At the end of June 1992, Mr Boudiaf was murdered.

Frame Nr 1

ALGERIA

Official name: Democratic and Popular Republic of Algeria.
Capital: Algiers
President: Liamine Zéroual
Population (in millions): = 16.0('75) - 21.9('85) - 28.6('95)
Urban population (%): = 40.3('75) - 47.5('85) - 55.8('95)
GDP (in billions of $): = 15.2('75) - 54.6('85) - 46.1('94)
Total external debt (in billions of $): = 4.63('75) - 18.26('85) - 32.78('95)
End of frame Nr 1

B. Economy

Socialism and Industrialisation

At Independence, Algeria inherited a fairly good infrastructure, but very little industry. Unemployment reached nearly 70%. Jobs had to be created. From the beginning, Ben Bella, chose the socialist system. Lands and enterprises abandoned by the French were nationalised, and given to the workers under a system of worker self-management. Boumedienne reinforced this policy, but the self-management system was mostly replaced by a centralised system of five-year plans. He gradually nationalised the other important means of production (the mines in 1996), and created a monopoly of foreign exchange transactions. In 1971, he took control of the whole oil producing sector.
Exploitation of oil and gas resources represented 98% of Algerian exports and 35% of the GNP. It was all in the hands of Sonatrach. In 1971, the state nationalised the oil pipelines, natural gas and 51% of the assets of French oil companies. Following the socialist tradition and with the help of Soviet experts, the accent was placed on heavy industry. Enormous state enterprises were created for the production of iron, steel, chemical products, machinery etc. However, the private sector remained important, particularly, the food and agriculture industry.
The building of a spectacular industrial base was, however, done at the price of strict control of consumption and also at the cost of foreign borrowing and the heavy financial burden of repayments. The lack of industries for the consumer market caused much discontent and the rise of a flourishing black market.

Liberalisation and economic crisis

Under Chadli Benjehid, a new five-year plan (1980-1984) halted the industrialisation program and gave more room for private initiative. Investment was transferred to housing and the development of industries making consumer goods and agriculture. Following the drop in the price of oil, beginning in 1985, Chadli stepped up his liberalisation policy. Giant state enterprises which were top heavy and unprofitable, were broken up into smaller units. And in the agricultural sector, much of the land belonging to the state was entrusted to individual management.
In spite of all that, the national debt rose steeply ($26.8 billion in 1990), and the purchasing power of Algerians diminished from year to year. Inflation and unemployment rose, and there were accusations of corruption in high places. All that led to the "events" of 1988.
However, economic liberalisation continued. At the beginning of the nineties, Algeria opened up to foreign investment in the form of "joint ventures", and foreign companies were invited to share in oil exploration. Agreements were entered into with the IMF concerning new borrowing and re-scheduling of debts. But the IMF obliged the state to cut down on most subsidies on consumer goods.

Agriculture and foodstuffs

Agriculture has always been the poor relation in Algerian politics. At independence, agriculture represented 60% of exports, and half the population were unemployed on the land. Twenty years later, only 21% of the active population worked in agriculture, and the export of agricultural produce had almost dropped to zero. From the 1980s on, there was a slight rise in agricultural production.
Import of food products became necessary almost since independence. At the end of the eighties, Algeria imported 70% of its food needs, at an annual cost of $2.1 billion or a quarter of the revenue from oil. One reason, was the very rapid growth in population: in 30 years, 1962 to 1992, it went from 10 to 25 million.

End of PART 1/2

CONTENTS | ANB-BIA HOMEPAGE

PeaceLink 1997 - Reproduction authorised, with usual acknowledgement