Sunday, June 11, 2023

Algeria on the Brink of Economic Collapse Due to Fall in Oil Revenues

Algeria’s oil revenue has fallen drastically, and if immediate economic reforms are not implemented, the country will plunge into an economic crisis in 2019. The crisis will no doubt threaten the upcoming Algerian presidential elections.

The decline in oil revenues, due to the collapse of prices worldwide, which is the main resource of Algeria’s economy has prompted authorities to take austerity measures. According to a report released by the International Crisis Group (ICG), “the Algerian government aims only to win more time with a series of measures to reduce budget expenditures which will not lead to an immediate recovery and a banking policy that feeds inflation.”

The ICG says that despite repeated reform promises, Algeria’s political system remains paralyzed. This is led by an ageing and ailing 81-year-old President Abdelaziz Bouteflika, who has been in reign since 1999. And the possibility of his re-nomination for a fifth term in 2019 dominates the Algerian political scene. “Uncertainty surrounding an eventual presidential succession and a state-dependent entrepreneurial class seeking to protect the status quo are hindering progress on imperative reforms needed to navigate the challenges of the decade.”

The report outlines that steps such as improving transparency of public finances should be considered. “Launching a broader discussion on the challenges Algeria faces and how best to address them, and placing young Algerians at the centre of discussions on reform.”

The country’s present dire condition is due to the preceding decade’s high spending unsustainable, rapidly emptying state coffers and increasing deficit. Moreover, political paralysis has militated Algeria against decisive policy.

Other News at EurAsian Times

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