“In a way, Putin has saved the generals,” he exclaims, on the other end of the telephone wire, The Kadi Ihsanedirector of Maghreb Emerging, an influential Algerian website specializing in economic issues. And it’s not about the tens of fighter planes either Russian-made helicopters that Algiers acquires annually to equip its Army, one of the most powerful on the African continent. What this independent journalist had in mind when he spoke in this way was the beginning of the ukrainian warwhich has caused a rise in the prices of hydrocarbons and, consequently, has given the country’s authorities a breath of fresh air to continue granting subsidies with which to placate possible social unrest.
The Algerian economy is completely dependent on oil and gas prices, which has not been able to diversify despite the various attempts made. According to 2019 data, hydrocarbons constitute the origin of 95% of export revenues, and constitute the origin of 60% of the Algerian budget. In Russia, with a similarly structured economy, the latter figure drops to 45%. Spain is a vital market for the North African country, since it exports worth “$1.8 billionwhich is equivalent to 26% of all gas exports,” explains Anthony Skinner, independent risk consultant in several countries, including Algeria. “It is one of the reasons why a total cut in the supply” of this energy source to our country is ruled out, he continues. At most, this analyst foresees “as a first step An increment in price negotiations, and depending on whether the two-sided crisis “It goes further, a gradual reduction in supply,” he concludes.
The country’s role as a global energy supplier has been shrinking in recent years. “Algeria cannot produce more, due to the lack of investment but above all to domestic consumption growth“, highlights the journalist El Kadi Ihsane. In fact, he has been occupying in recent years discreet positions in international rankings. It is the ninth exporter of natural gas and the 21st of oil.
Social crises/oil price
Related news
In Algeria, social crises inevitably come hand in hand with fluctuations in crude oil prices. At a lower price, the authorities have less money to finance subsidies and social programs that reduce social unrest. This has been the case since 2014, a decline that served as a catalyst, years later, for the protest movement called hirak. According to some data, the State spends 19% of the Gross Domestic Product (GDP) and even with a price of $120 per barrel as at present, “it is not guaranteed the social peace“says El Kadi Ihsane.
The State wants to pay unemployed youth the sum of “90 dollars“, a number that is equal to half the minimum salaryrecalls the consultant Skinner. The official unemployment figure amounts to fifteen%, although many voices in Algiers question the validity of government statistics, while the percentage of young people without work could rise to 30%. “Most of them are people with university degrees”, that is, people who have frustrated expectations for the future, points out the person in charge of Maghreb Emerging.