People attend a demonstration in Paris on July 5, 2020 in support of Algeria's Hirak key protest movement as Algeria celebrates today the anniversary of its 1962 independence from France. FRANCOIS GUILLOT / AFP Report 217 / Middle East & North Africa 27 July 2020 20+ minutes Algeria: Easing the Lockdown for the Hirak? Algeria is now facing more challenges due to the social and economic fallout from the Covid-19 crisis and the country’s official lockdown measures. The authorities should respond to popular protests with a lighter touch and sit together with Hirak members to discuss the country’s economy. Share Facebook Twitter Email Linkedin Whatsapp Save Print Download PDF Full Report Also available in Français Français English العربية What’s new? Algeria is now facing more challenges due to the social and economic fallout from the COVID-19 crisis and the country’s official lockdown measures. Why does it matter? The Algerian government could react to this situation by taking on external debt and increasing austerity in its budget. However, such an approach could stir up social tensions and intensify the conflict between the Hirak movement and the state. What should be done? The authorities should capitalise on this moment of national solidarity created by the pandemic by responding to popular protests with a lighter touch. The government and Hirak should sit together to discuss the country’s economic conditions and propose specific ways of reducing its exposure to fluctuating oil and gas prices. Executive Summary The economic and social fallout caused by the COVID-19 crisis and the Algerian authorities’ lockdown measures risk radicalising the Hirak protest movement. To avoid such a scenario, Algerian state authorities should take advantage of the national solidarity created by the pandemic to use a lighter touch in their dealings with the Hirak and support some of its citizen-led initiatives. If political dialogue is unrealistic in the short term, the government and members of the Hirak should at least engage in a national economic dialogue to find a way to implement the structural changes needed to ward off a severe economic crisis. International financial organisations and friendly nations should stand by to offer the country financial support specifically for economic reforms, but without imposing overly-strict conditions. If Algeria accepts them, such reforms could weaken the powerful clientelist networks that profit from the oil and gas industry, and in turn possibly trigger more violence, repeating what happened in the 1990s. The Hirak is a largely non-violent and citizen-led movement set up in February 2019 when President Abdelaziz Bouteflika announced he was running for another term in office. Faced with the COVID-19 health emergency, the movement demonstrated civic responsibility by respecting the restrictions on movement put in place by the government in its attempt to curb the spread of the virus; it suspended its street protests and set up a solidarity network to reduce the lockdown’s social impact. Despite the promises of constitutional reform made in response to the Hirak’s demands, there has been a noticeable security clampdown. Although the Algerian government has taken emergency measures on social and economic issues, politically it appears to have called an end to its détente with the Hirak, in effect since Abdelmadjid Tebboune’s election on 12 December 2019. Thus, despite the promises of constitutional reform made in response to the Hirak’s demands, there has been a noticeable security clampdown. Moreover, Algeria is facing a wide range of social and economic challenges due to the global economic slump and tumbling oil prices. The country’s macro-economic outlook is grim given its dependence on oil and gas exports and the impact of lockdown. In the short term, the Algerian government may need to resort to taking on external debt and tightening its austerity measures, and possibly face a resurgence of social tension as a result. When lockdown restrictions are lifted across the country, the Hirak may therefore resort to a more aggressive stance. Conflicts with the government could flare up since the conditions are right for a resumption of fortnightly protest marches, as well as for general strikes and outbreaks of civil disobedience. The standoff between the authorities and the Hirak since February 2019 could then become more entrenched. Or the Hirak could dissipate and, in the absence of measures that address the grievances expressed by the movement, leave a vacuum. This could lead to small groups taking an increasingly hardline approach and more radical actions in the not-too-distant future. To prevent such unwelcome developments and broaden support for President Tebboune, the authorities should implement the new head of state’s promises of greater political openness. Such a response could include, for example, releasing political detainees, ending media censorship, and putting an end to arbitrary arrests. The government could also give increasing support to – but not seek to co-opt – the citizen networks set up by the Hirak’s leaders to help fight the pandemic and reduce its social impact. An immediate resolution to the conflict through political dialogue is improbable; however, a sustained and far-reaching national economic discussion could achieve this aim by bringing together leading political groups, unions and organisations, along with government representatives and the country’s most influential businesspeople, even from the informal sector. The objective would be to identify the obstacles in the way of genuine economic reform and to propose realistic and broadly accepted solutions to overcome them. Finally, if the Algerian government decides to make a request, international financial organisations and friendly nations should provide financial backing, in particular to support an eventual economic reform strategy. In that case, donors should provide financial assistance without imposing excessively strict conditions (all-out liberalisation and severe austerity). Lacking an alternative, the authorities would either turn them down or feel obliged to accept them. The latter scenario could destabilise important clientelist networks involved in controlling profits from the oil and gas industry, as happened in the 1990s when this was a contributing factor to the spiralling violence of the “black decade”. Tunis/Algiers/Brussels, 27 July 2020 I. Introduction Since February 2019, the Algerian authorities have faced a popular uprising of unprecedented size and scale. Within two months, the movement, known as the Hirak, had grown so strong that it prompted the chief of staff and deputy minister of defence, Ahmed Gaïd Salah, to demand President Abdelaziz Bouteflika’s resignation on 2 April. In the course of subsequent weeks, the uprising compelled the authorities to arrest more than 100 senior government officials, as well as businessmen who were close to them, and to postpone the presidential election twice, on 18 April and 4 July.[fn]See “La liste des ex-hauts responsables et hommes d’affaires actuellement en prison”, Algérie 360, 4 November 2019.Hide Footnote On 12 December 2019, the balloting finally proceeded, with Abdelmadjid Tebboune emerging as the winner.[fn]Abdelmadjid Tebboune received 58 per cent of the vote with an official participation rate of 40 per cent (though, according to several Hirak activists, the real participation rate was no higher than 9 per cent). A member of the National Liberation Front (FLN), the main party in power, Tebboune is a former housing minister who was briefly prime minister in 2017. He was deposed after denouncing the corrupt practices of businessmen close to Bouteflika and his brother Saïd. Crisis Group interviews, Hirak demonstrators, Algiers, December 2019-February 2020. See also Crisis Group Middle East and North Africa Report N°192, Breaking Algeria’s Economic Paralysis, 19 November 2018.Hide Footnote The Algerian regime is far from collapsing, but the Hirak persists, and the socio-economic fallout of the global COVID-19 crisis has added to the authorities’ challenges. This report assesses those challenges, as well as the government’s response to the largest social movement in the country’s modern history amid the coronavirus pandemic. It is based on interviews conducted between February 2019 and May 2020 with state representatives (mainly former administration officials), Algerian academics, local elected officials, leaders of political parties, citizens involved in the Hirak movement, and members of international organisations. It is also informed by regular, in-person observation of twice-weekly demonstrations, especially in Algiers. II. The Dilemma Posed by the Hirak A. A Largely Peaceful Citizens’ Movement The Hirak movement emerged in February 2019 following the “humiliating” announcement of Abdelaziz Bouteflika’s candidacy for a fifth term. It presents itself as a peaceful citizen-led movement, though protesters have clashed with police a few times at the end of marches.[fn]Crisis Group interview, Hirak activist, Algiers, March 2019. Many Algerians called the announcement “humiliating” due to Bouteflika’s poor health (he has partial paralysis and difficulty speaking). They felt that the country deserved a younger, more dynamic executive, and that his candidacy showed that he was hostage to an unelected circle governing in his place. Crisis Group interviews, former state representatives, economists, journalists, Hirak activists, Algiers, Tunis, Marseille, Paris, March-October 2019. Crisis Group observations, Algiers, February 2019-March 2020. According to its members, the Hirak expresses the collective desire to reclaim public space, a space that the regime has closed by banning demonstrations and stifling almost all forms of opposition.[fn]Since the beginning of the uprising, traditional opposition parties have attempted to form a coalition, but they have found little support among the demonstrators. Crisis Group interviews, journalists, academics, Algiers, March 2019. Crisis Group observations, Algiers, February 2019-March 2020. The movement advocates a vision of citizenship that seeks to transcend the political, social and regional divisions that have led to civil strife in the past.[fn]Islamism and assertions of Amazigh identity have caused particularly salient divisions in the past. See “Socialités et humanités. La citoyenneté en mouvement”, Revue des sciences sociales, n°7 (2019).Hide Footnote The hugeness of the crowds – millions of people assembled across the country in the first half of 2019, with hundreds of thousands continuing to gather every Tuesday and Friday thereafter – gave participants a sense of security.[fn]Ibid. Hide Footnote The demonstrations allowed them to regain the status of political actors, something they felt the authorities had denied them.[fn]As one of the first leaders of the movement in Kheratta noted: “It was difficult to mobilise people on 16 February because so many have lost hope. Society has lost trust in all organisations. The people must build change themselves”. Crisis Group interview, Hirak demonstrators, Kheratta, February 2019. See “Socialités et humanités. La citoyenneté en mouvement”, op. cit.Hide Footnote As one protester noted, these ritualised twice-weekly gatherings in the country’s major cities allow people to behave as true citizens.[fn]Crisis Group interview, protester, Algiers, March 2019. Hide Footnote From the movement’s first weeks, open debates flourished in universities and public spaces. Algerians who were not politically active before February 2019 organised themselves into local committees and set up neighbourhood initiatives. They raised awareness among their neighbours of the movement’s pro-democracy agenda and launched discussions of what it means to be a citizen (such as fighting petty corruption and trying to engage with young people).[fn]Crisis Group observations, Algiers, March-November 2019. Crisis Group interviews, Hirak demonstrators, Algiers, February-November 2019. Hide Footnote These peaceful expressions of citizenship allowed Algerians to shake off the stigma of violence and incivility with which many of them felt unjustly associated.[fn]Crisis Group observations, Algiers, March-November 2019. Crisis Group interviews, Hirak activists, Algiers, Kheratta, March-December 2019.Hide Footnote Hirak activists say their movement is a durable opposition force. Hirak activists say their movement is a durable opposition force – albeit with a durable internal divide.[fn]Crisis Group interviews, Hirak activists, Algiers, Kheratta, March-December 2019. See also Amel Boubekeur, “Demonstration Effects: How the Hirak Protest Movement is Reshaping Algerian Politics”, European Council on Foreign Relations, 27 February 2020. Hide Footnote While divergences based on Amazigh identity and religious conservatism regularly reappear within the movement, only to fade away, there is a permanent confrontation between two groups that rally small opposition parties and activist associations.[fn]See Mohan Tilmatine, “Interdiction des emblèmes berbères et occupation des espaces symboliques : amazighité versus algérianité ?”, L’Année du Maghreb, n°21 (2019). See also Ryad Hamadi, “Islamistes et hirak : Saïd Sadi met en garde contre les dangers de la ‘confusion’”, Tout sur l’Algérie, 29 February 2020. Hide Footnote The first, the Pôle démocratique (Democratic Pole), favours negotiations with authorities and a search for consensus; its representatives notably supported the work of the National Dialogue Commission headed by diplomat Karim Younes, which fizzled.[fn]See Fayçal Métaoui, “Le pôle démocratique plaide pour le dialogue et dénonce les atteintes aux libertés”, Tout sur l'Algérie, 26 June 2019. Hide Footnote The second, the Forces du pacte de l’alternative démocratique (Forces of the Democratic Alternative Pact), refuses any discussion with the authorities and demands utter dissolution of “the system”, followed by a democratic transition including election of a constituent assembly.[fn]See “Algérie : pacte politique pour une véritable alternative démocratique”, Blog Ensemble, 1 July 2019. See also “Réunies hier au siège du RCD : les Forces de l’alternative démocratique rejettent l’agenda de la présidentielle”, El Watan, 10 September 2019.Hide Footnote The Hirak has a horizontal structure, refusing all forms of hierarchy. It has no official spokespeople, although its members include opinion leaders and social activists, including former representatives of the Front des forces socialistes (Socialist Forces Front, or FFS, the traditional opposition party) such as Mustapha Bouchachi and Karim Tabbou. Also among its ranks are socially engaged artists whose work inspires the slogans chanted at demonstrations and broadcast on social media networks.[fn]Crisis Group interviews, Hirak activists, Algiers, Kheratta, March 2019-March 2020. Hide Footnote B. A Power Structure that Must Maintain Its Equilibrium The power structure, which many Algerians have called “the regime” or “the system” since its consolidation after independence in 1962, has experienced several serious crises. Thus far, it has overcome them all through a combination of economic and political reforms, in effect purchasing social peace, while both co-opting and repressing opponents.[fn]The system notably escaped a crisis in 1976, by which time the hope and confidence born of independence had withered away. The regime dissolved the Revolutionary Council created in 1965, organised a presidential election, established a national assembly and drew up a new national charter. It evaded crisis again in 1988, when, following the oil counter-shock and the October riots, army officers left the FLN’s central committee and the regime authorised a multiparty system. A violent confrontation ensued between the military government and Islamist groups, with the government eventually prevailing. In 2011, amid the Arab uprisings, the regime authorised new opposition parties and managed to buy social peace until 2014. See Miriam R. Lowi, Oil Wealth and the Poverty of Politics(Cambridge, 2009). See also the Algerian chronicles of the Annuaire de l’Afrique du Nord (1962-2003) and L’Année du Maghreb (2004-2019).Hide Footnote It has managed to maintain its equilibrium by surpassing internal divisions and conflicts between its three main institutions: the army, in particular the chief of staff, the military and civilian intelligence services, and the presidency of the Republic.[fn]See Hugh Roberts, The Battlefield: Algeria, 1988-2002 (London, 2003).Hide Footnote But with the crisis sparked in February 2019 by the Hirak, and the economic slump following the COVID-19 outbreak, the system is weakening and maintaining this balance is becoming increasingly difficult.[fn]See Section III of this report. See also the intervention by Louiza Dris Aït Hamadouche, “La lutte de clans, Tebboune-généraux de Gaïd Salah, réalité ou intox ?”, Radio M, 22 April 2020. Hide Footnote The conflicts between and within the regime’s main institutions are more pronounced than usual, albeit far less violent than during the “black decade” of the 1990s.[fn]Hamadouche, “La lutte de clans”, op. cit. The expression “black decade” refers to the period of conflict (1991-2002) between the military government and armed Islamist groups, which claimed between 100,000 and 200,000 lives. Hide Footnote The authorities must manage this crisis while its two main sources of income are running out: the annuity conferred by the revolutionary legitimacy of the war of liberation, and the revenue derived from hydrocarbon production and export.[fn]See Nadji Safir, “Algérie 2019 : une crise majeure”, Diplo Web, 3 April 2019. Hide Footnote Faced with this two-fold crisis of legitimacy, the authorities must respond wisely to the Hirak’s challenge. Faced with this two-fold crisis of legitimacy, the authorities must respond wisely to the Hirak’s challenge. On one hand, given the scale, duration, popularity and peaceful nature of this movement – hundreds of thousands of Algerians taking to the streets every week for over a year – a forcible clampdown could prove very risky. It is notably to avoid exposing itself to such repression that the Hirak remains largely peaceful and does not venture off its set path (with, for instance, general strikes lasting days or weeks, civil disobedience and sabotage).[fn]See Section II.B of this report. Hide Footnote On the other hand, the government is reluctant to give in to the Hirak’s main demands: full rejuvenation of the political class; an army that safeguards republican institutions but absents itself from politics; genuine respect for freedom of association; creation of a “truly independent” electoral commission; establishment of an independent Constitutional Court; and elections for a constituent assembly.[fn]Crisis Group interviews, president and spokesperson for opposition parties, associative leaders, Hirak activists, Algiers, March 2019. See also “Is a Democratic Transition Possible in Algeria? Fourteen Experts Respond”, POMED, December 2019; and “Algérie : pacte politique pour une véritable alternative démocratique”, Blog Ensemble, 1 July 2019. Hide Footnote These demands in fact endanger the regime’s s survival. Not all citizens support the Hirak, however, and the government can still count on part of the population. Some, including those who voted for President Tebboune, believe that Algeria’s main democratic achievement is popular sovereignty and see the shadow of foreign influence hovering over the uprising. They fear that outside actors will encourage a transition that promotes sectional interests (regional, tribal and corporatist) to the detriment of the national interest.[fn]Crisis Group interviews, executives, doctors, anti-Hirak voters in the 12 December 2019 presidential election, Algiers, October-December 2019. See the 2019 editorials of El Djeich, the monthly periodical of the National People’s Army, and the weekly speeches by Gaïd Salah, particularly in April and September 2019. Also Crisis Group interview, public-sector executive, Algiers, December 2019. Hide Footnote The unity of the country would suffer, and so would the state, at a time when Algeria needs a strong state “in a regional context plagued by violence” (such as in Libya, Mali and Niger).[fn]Crisis Group interview, public-sector manager, Algiers, December 2019. Crisis Group interviews, executives, doctors, anti-Hirak voters in the 12 December 2019 presidential election, Algiers, October-December 2019. Hide Footnote Others, mainly public-sector executives, fear the effects of extensive economic liberalisation.[fn]Crisis Group interviews, management-level public-sector employees, Algiers, October-December 2019. Hide Footnote One academic notes that free trade on an international scale would mean that senior army officers, certain senior officials and politicians would lose “the monopoly over managing the oil and gas revenue, or would at least risk giving greater autonomy to the businessmen with whom they are affiliated, as occurred in the late 2000s. And those who uphold the system do not want this”.[fn]Crisis Group interview, academic, Marseille, March 2019. See also Crisis Group Report, Breaking Algeria’s Economic Paralysis, op. cit. Hide Footnote C. The Authorities and the Hirak: National Unity in the Face of COVID-19 In terms of trying to protect public health, the Algerian government has been quite responsive. In terms of trying to protect public health, the Algerian government has been quite responsive. On 17 March 2020, when the country had 80 diagnosed COVID-19 cases and eight confirmed deaths, authorities imposed social distancing measures: a ban on all forms of assembly, closure of places of worship, schools, cafés, restaurants and retail stores except those stocking food and/or hygiene and pharmaceutical products. They closed the country’s land borders and suspended incoming flights and maritime vessels, aside from those bringing in food, medicine and essential raw materials or repatriating citizens.[fn]See Executive Decree N°20-69 of 26 Rajab 1441 (corresponding to 21 March 2020), relating to measures to prevent the spread of the coronavirus. Hide Footnote An Algerian industrial group began manufacturing protective masks.[fn]See “Covid-19 : le groupe Getex lance la fabrication de masques de protection”, Algeria Press Service, 25 March 2020. See also “Soutien. La Chine à la rescousse d’une Algérie reconnaissante”, Courrier International, 31 March 2020. In mid-May, the authorities facilitated imports of medical products. See Executive Decree N°20-109 of 12 Ramadan 1441 (corresponding to 5 May 2020), relating to exceptional measures intended to supply the national market with pharmaceutical products, medical devices and detection equipment in response to the coronavirus pandemic. Hide Footnote The government encouraged voluntary isolation, though it placed repatriated Algerians in compulsory quarantine. On 24 March, as the disease’s toll rose to 264 confirmed cases and nineteen deaths, it decreed lockdown measures that were partial or total depending on the local epidemiological situation.[fn]See Executive Decree N°20-69, op. cit.Hide Footnote In the wilaya (province) of Blida (south west of Algiers), for instance, there was a major cluster of cases. The High Security Council chaired by President Tebboune ordered a full lockdown accompanied by a curfew, prohibiting Blida’s residents from leaving their homes except in cases of necessity or with police authorisation.[fn]See Executive Decree N°20-70 of 29 Rajab 1441 (corresponding to 24 March 2020), setting out additional measures to prevent the spread of the coronavirus. Hide Footnote On 4 April, the authorities instituted a partial lockdown and curfew, from 3pm to 7am, in the rest of the country.[fn]See Executive Decree N°20-92 of 11 Chaâbane 1441 (corresponding to 5 April 2020), amending and complementing Executive Decree N°20-72 of 3 Chaâbane 1441 (corresponding to 28 March 2020), extending partial lockdown in certain wilayas.Hide Footnote On 24 April, shortly before the start of Ramadan, the toll stood at fewer than 2,700 diagnosed cases and 375 deaths. That day, after several reassuring messages from the head of state and the health minister declaring that the epidemic had peaked, the government shortened its curfew by two hours – so that it lasted from 5pm to 7am.[fn]See Executive Decree N°20-102 of 29 Chaâbane 1441 (corresponding to 23 April 2020), extending the partial lockdown to prevent the spread of the coronavirus and reorganising its schedule.Hide Footnote On 20 May, the government decreed the compulsory wearing of protective masks in public.[fn]See Executive Decree N°20-127 of 27 Ramadan 1441 (corresponding to 20 May 2020), amending and complementing Executive Decree N°20-70.Hide Footnote On 28 May, the partial lockdown was extended until 13 June, except in the country’s sparsely populated southern provinces (Saida, Tindouf, Illizi and Tamanrasset).[fn]See Executive Decree N°20-131 of 5 Chaoual 1441 (corresponding to 28 May 2020), extending the partial lockdown, reorganising its schedule and renewing measures to prevent the spread of the coronavirus. Hide Footnote On 13 June, it was eased in 29 of the country’s 48 wilayas, including Algiers – with the curfew remaining in place from 8pm to 5am – and lifted in the rest of the country, including in Tebessa, Tlemcen and Tizi Ouzou.[fn]See Executive Decree N°20-159 of 21 Chaoual 1441 (corresponding to 13 June 2020), on the reorganisation of measures to prevent the spread of the coronavirus. Hide Footnote In early July, following an increase in the number of cases diagnosed (to nearly 300 per day), the government toughened its measures. It once again extended the partial lockdown and reinstated it in several regions where it had been lifted. It also allowed the walis (governors) to put additional measures in place to deal with public health developments in their provinces.[fn]See the prime minister’s press release of 1 July 2020. See also Nabila Amir, “Confinement partiel prolongé au 13 juillet : nouvelles charges pour les walis”, El Watan, 1 July 2020. Hide Footnote In Sétif and Ouergla, regional authorities took it upon themselves to suspend all commercial, economic and social activities as well as pedestrian and car traffic in most municipalities.[fn]See the press releases from the interior ministry and local authorities, 7 and 9 July 2020. Hide Footnote A new measure was instituted on 9 July when the government banned travel between the 29 most affected regions.[fn]See “Coronavirus en Algérie, durcissement du confinement dans 29 wilayas”, Dzair Daily, 10 July 2020. Hide Footnote Hirak leaders largely approved of the authorities’ response to COVID-19. Among protesters, the idea that the government was exploiting the coronavirus to “break the popular movement” was present but not widespread.[fn]Crisis Group interviews, Hirak activists, Algiers, March-April 2020.Hide Footnote The Hirak’s protagonists criticised its last demonstration in central Algiers, on 13 March, calling for a pause to fight the pandemic, including a full lockdown of the country.[fn]Crisis Group interviews, Hirak activists, Algiers, March-April 2020. See Rosa Djaz, “L’Algérie se confine toute seule”, Politis, 1 April 2020. Hide Footnote Only a few protested budget cuts in the health sector or equated partial lockdown with socio-economic disaster.[fn]Crisis Group interviews, Hirak activists, Algiers, March-May 2020. Hide Footnote Comparisons with the “black decade”, a time when Algeria experienced much worse in terms of travel restrictions and economic paralysis, undoubtedly played a role. Hirak activists stressed that there is no shortage of essential goods like there was in the 1990s.[fn]Crisis Group interviews, Hirak activists, Algiers, April 2020.Hide Footnote It is also reassuring that the state budget is not burdened by an unsustainable external debt. One activist said there is “a lot of money in the coffers. The COVID-19 crisis will not ruin the country”.[fn]Crisis Group interviews, Hirak activist, Algiers, April 2020. Hide Footnote The activists hope that when the “system” gives way to a new generation of democratically elected decision-makers, the economy will flourish.[fn]Crisis Group interviews, Hirak activists, Algiers, April-May 2020.Hide Footnote The vast majority of protesters agreed to cease demonstrating in the streets. As of March, the vast majority of protesters agreed to cease demonstrating in the streets. The “regulars” (those who took part in every march) simply started sharing their views and defending prisoners of conscience on social media networks.[fn]Ibid.Hide Footnote One said it was necessary to “pause the Hirak to come back stronger”.[fn]Crisis Group interview, Hirak activist, Algiers, April-May 2020. Hide Footnote The government has nevertheless received plenty of criticism. Some think that the authorities are underestimating the number of COVID-19 deaths and have created websites to track the “real” number of cases.[fn]See Vish Sakthivel, “Algeria’s Hirak: A Political Opportunity in COVID-19?”, Middle East Institute, 1 April 2020.Hide Footnote Others denounce the lack of equipment in certain hospitals, such as in Biskra.[fn]See “Rassemblement à l’hôpital de Biskra : Le personnel de la santé exprime son ras-le-bol”, Algérie 360, 8 July 2020. Hide Footnote Still others advocate for social solidarity in the face of the pandemic without “expecting anything from the state”, as one activist explains. Activists have violated curfews to distribute free meals and personal protective equipment as well as run disinfection campaigns in Algiers and Blida.[fn]As a trader from Algiers explains: “I started to prepare meals as soon as businesses closed. I saw that many people no longer had anything to eat. I was given access to the kitchen of a restaurant closed due to lockdown. I prepare and distribute up to 250 meals in the evening. The authorities told me that I need a permit, but no one can tell me how to get one. Since then, I have been preparing meals discreetly at home and distributing them before the curfew. I identified up to 1,000 people who did not have enough to eat in the centre of Algiers”. Crisis Group interview, Algiers, April 2020. See Faiza Kissi, “A Alger, les bénévoles s’organisent pour pallier les déficiences de l’Etat”, Le Desk, 26 March 2020. See also Sakthivel, “Algeria’s Hirak: A Political Opportunity in COVID-19?”, op. cit.Hide Footnote In Kabylia, villagers have set up their own version of lockdown: a roadblock at the village’s entrance where residents disinfect the car before allowing it in.[fn]Crisis Group telephone interviews, Kabylia villagers, Tunis, April 2020. Hide Footnote Activists sometimes coordinate their actions with the central and provincial administrations, as in Algiers, where the latter has made warehouses available for storing medical equipment.[fn]Hirak activists have set up a solidarity network that includes 600 volunteer doctors. Their network has distributed more than 10,000 masks in Algiers and Blida. As one of its organisers notes: “We anticipated the situation since the start of the epidemic in Wuhan in January 2020. We put in place an action plan to raise awareness and consolidate initiatives. The state has taken our plan into account”. Crisis Group interview, Algiers, April 2020.Hide Footnote D. Power Shifts in the Face of the Uprising Following the presidential election at the end of 2019, authorities inaugurated a period of détente with the Hirak. They could have extended this period in view of the movement’s civic-mindedness, as seen in its contribution to the national COVID-19 response.[fn]The presidential election was finally held on 12 December 2019, after two postponements, despite opposition from the streets and a climate of tension unprecedented since the start of the movement.Hide Footnote Yet the opposite occurred. 1. A period of détente Following President Tebboune’s election, the government increasingly began to display good-will toward the protesters. On the evening of 12 December 2019, the new head of state called the Hirak movement “blessed” and expressed his desire “for a serious dialogue”.[fn]In addition, when taking the oath of office, Tebboune affirmed that he no longer wanted the words “his excellency” (the standard expression since independence) to precede his name, saying the phrase encourages a “cult of personality”. See Zeinab Filali, “Algérie : le président Tebboune met fin à une expression aussi vieille que l’indépendance”, Financial Afrik, 23 April 2020. Hide Footnote Between late December and mid-January, he met with a series of former heads of government and political opponents, all Hirak supporters, including Abdelaziz Rahabi, Ahmed Benbitour, Taleb Ibrahimi, and Soufiane Djilali.[fn]Abdelaziz Rahabi is a former diplomat and minister of culture. In 2019, the authorities instructed him to lead a dialogue initiative with Hirak representatives. Ahmed Benbitour is another former minister who was briefly head of government in the late 1990s. He was also a candidate in the 2014 presidential election. Taleb Ibrahimi was minister of foreign affairs from 1982 to 1988, then president of the small Wafa (Loyalty) party and a candidate in the 1999 presidential election. Mouloud Hamrouche was leader of the FLN’s liberal wing in the 1980s, and then served as prime minister from September 1989 to June 1991. Sofiane Djilali is president of an opposition party involved in the Hirak, Jil Jadid (New Generation). See “Le président Tebboune reçoit l’ancien chef de gouvernement Ahmed Benbitour”, Algeria Press Service, 29 December 2019; “Dialogue : rencontre Tebboune et Rahabi”, Express, 10 January 2020; “Le président poursuit les consultations : Tebboune reçoit Hamrouche et se rend chez Taleb Ibrahimi”, El Watan, 14 January 2020; Abdelghani Aichoun, “Soufiane Djilali revient sur sa rencontre avec Tebboune : ‘Les intentions semblent aller dans le bon sens’”, El Watan, 18 January 2020. Hide Footnote On 2 January, the new president abolished the post of deputy minister of defence, the last civilian position occupied by a member of the military and created in September 2013 for the army chief of staff, Gaïd Salah.[fn]Salah died in December 2019, after having forced Bouteflika to resign and encouraged the purge of political, administrative and economic circles earlier in the year. See “Algérie : Tebboune supprime le poste de vice-ministre de la Défense”, Dzair Daily, 2 January 2020. Hide Footnote On 18 January 2020, as if to symbolise a rejection of presidentialism, Tebboune gave the newly appointed Prime Minister Djerad the power to nominate senior officials in the administration.[fn]See “Transfert du pouvoir de nomination de certains cadres de l’Etat au Premier ministre”, Algeria Press Service, 19 January 2020. Hide Footnote Furthermore, on 1 January 2020, the public prosecutor released Issad Rebrab, one of the richest businessmen in Algeria and an early Hirak supporter, after he had spent eight months in prison for “false statements about the movement of capital to and from the country”.[fn]Crisis Group interviews, social activists, Algiers, April 2020. See also “Algérie : plusieurs industriels arrêtés”, Agence France Presse, 22 April 2019. Hide Footnote The next day, 67 of the 180 Hirak activists still in detention were released on parole, including Lakhdar Bouregaa, a veteran of the National Liberation Army who is very popular among protesters.[fn]Some of these activists had been arrested following clashes with police at the end of rallies. Others had been detained for their political opinions. As is typical in Algeria, the courts accused them of contrived offences like “attacks on the integrity of the national territory”, “recruitment of volunteers or mercenaries on behalf of a foreign power in Algerian territory”, “attacks on national security” and “distribution of leaflets likely to harm the national interest”. Crisis Group interviews, journalists, Algiers, April 2020. See also Nadir Idir, “Ils ont été interpellés à la fin de la marche populaire du vendredi 1er mars […]”, El Watan, 13 January 2020; “Près de cinquante détenus d’opinion dans les geôles algériennes”, Algeria-Watch, 9 April 2020; and the Facebook page of the National Committee for the Liberation of Prisoners.Hide Footnote Other political actions reflect a desire for reform. Other political actions reflect a desire for reform. On 8 January 2020, in accordance with his campaign promises, the new head of state set up a commission of experts tasked with formulating proposals for a new constitution that would guarantee greater public freedoms, judicial independence, and checks and balances.[fn]See “Algérie : le président nomme une commission pour réviser la Constitution”, Reuters, 8 January 2020.Hide Footnote One month later, on 6 February, the government published an action plan for the president’s program. This document echoes the demands of the main opposition parties and associative groups participating in the Hirak.[fn]The document notably includes references to an “overhaul of the legislative system for electoral organisation”, “the moralisation of public life”, “the freedom of assembly and demonstration”, “the independence of the justice system”, and “the advancement and empowerment of women”. See “Plan d’action du gouvernement pour la mise en œuvre du programme du président de la République”, People’s Democratic Republic of Algeria, 6 February 2020.Hide Footnote It advocates for “the establishment of a new republic responding to the legitimate aspirations of the people, and whose foundations will be based on the entrenchment of democratic principles and the protection of rights and freedoms”.[fn]Ibid.Hide Footnote Finally, in May 2020, the presidency presented six main axes for the constitutional revision project, including the right to free association and freedom of assembly.[fn]Crisis Group telephone interview, journalist, Tunis, May 2020. See also “Avant-projet de la Constitution 2020”, 2020. See also “Révision de la Constitution : la mouture de l’avant-projet prête pour le débat”, Algeria Press Service, 7 May 2020.Hide Footnote 2. Tougher security measures This period of relative détente waned with the approach of the movement’s first anniversary on 22 February 2020 and ended during the COVID-19 crisis. On 20 February, nearly 1,400 people from across the country – student groups, the Coordination of Hirak Activists, the Collective of United Journalists, the Coordination of Diaspora Groups and the Collective for Democratic Transition – gathered to call for a unitary conference (the 22 February Initiative) aimed at coordinating the movement’s actions. The authorities banned it, though it had allowed similar meetings a few months earlier.[fn]Crisis Group observations, Algiers, 2019-2020. See also Tarek Hafid, “Le pouvoir algérien interdit une conférence du Hirak”, Sputnik, 20 February 2020.Hide Footnote Tougher security measures have been especially evident since 17 March and the suspension of demonstrations due to COVID-19. In the eyes of many activists, the justice ministry is taking advantage of the lull in demonstrations to “turn things back”; some, rightly or wrongly, even compare the political situation to that which prevailed on 21 February 2019, the day before protests began.[fn]Crisis Group interviews, Hirak activists, member of an international organisation, Algiers, April 2020.Hide Footnote Between March and July 2020, a number of people were arrested and released on parole. Between March and July 2020, a number of people were arrested and released on parole: on 24 March, prosecutors secured a longer prison sentence for Karim Tabbou, the former FFS leader and a “credible and respected figure” in the Hirak, and then paroled him on 2 July.[fn]Crisis Group interview, Hirak activist, Algiers, April 2019. See also “Algeria, Events of 2019”, Human Rights Watch, 2020.Hide Footnote On 27 March, Khaled Draréni, a Reporters Without Borders correspondent involved in the protests, was placed in pre-trial detention.[fn]See the Facebook page of the National Committee for the Liberation of Prisoners.Hide Footnote On 20 April, the Sidi Mhamed court in Algiers sentenced Abdelwahab Fersaoui to one year in prison (he was released on 17 May); Fersaoui is president of Rassemblement action jeunesse, an association working to unite the Hirak behind a “democratic transition” including election of a constituent assembly.[fn]Crisis Group interviews, Rassemblement action jeunesse officials, Algiers, March 2019. See also “Abdelouahab Fersaoui condamné à un an de prison ferme”, Algérie Eco, 6 April 2020. His sentence was reduced on appeal. See “Algérie : libération d’Abdelouahab Fersaoui, figure du hirak, en prison depuis octobre 2019”, Agence France Presse, 18 May 2020. Hide Footnote On 21 June, the Chéraga court in Algiers sentenced Amira Bouraoui, a Bouteflika opponent in the 2010s and Hirak activist, to one year in prison on charges including “insulting the president … through an outrageous or defamatory expression”; the Tipaza court west of Algiers released her pending a new judgement at the end of September.[fn]See Arezki Benali, “Tribunal de Chéraga : les accusations retenues contre Amira Bouraoui”, Algérie Eco, 21 June 2020. See also “Amira Bouraoui retrouve sa liberté”, Algérie 360, 2 July 2020.Hide Footnote In Algiers, journalists have seen daily arrests that create a “climate of paranoia”.[fn]Crisis Group interview, journalist, Algiers, June 2020. Crisis Group interviews, journalists, Algiers, June 2020.Hide Footnote Despite conciliatory gestures on the authorities’ part, such as the presidential pardon granted to six Hirak activists on 5 July (Independence Day), freedom of expression appears to have been undermined.[fn]See “Grâce présidentielle pour 6 détenus”, 24h Algérie, 1 July 2020.Hide Footnote In mid-April, the courts blocked access to several online media, including Maghreb Emergent and Radio M, for their overly harsh criticism of President Tebboune’s record.[fn]See Nabila Amir, “Inaccessibilité des sites Maghreb Emergent et Radio M en Algérie : polémique entre l’éditeur et le ministre de la Communication”, El Watan, 16 April 2020.Hide Footnote According to journalists, the communication ministry is threatening the press with a ban on foreign funding in order to remind them to “moderate their criticism of the government”, lest the government file “cases against them”.[fn]Crisis Group interview, journalist, Algiers, May 2020. See also “Tous les dossiers de financements étrangers de la presse nationale seront ouverts”, Algeria Press Service, 16 April 2020.Hide Footnote Another sign of potential tension among authorities is the proposed penal code revision to “criminalise the dissemination and propagation of false information that threatens public order and security”.[fn]See “APN : présentation du projet de loi modifiant et complétant le Code pénal”, Radio Algérienne, 22 April 2020. See also “Criminaliser les actes qui menacent la sécurité et la stabilité du pays”, El Djeich, no. 82 (May 2020). One member of an international organisation in Algiers fears that the authorities will use this reinforced legal arsenal to “intensify repression of associations and individuals highly involved in the Hirak”. Crisis Group telephone interview, Algiers, April 2020. Furthermore, on 26 May, the broadcast of a documentary on Algerian youth and the Hirak on a French channel sparked outrage among Algerians, including within the Hirak, as well as a diplomatic crisis with France, heightening suspicion of the media, especially foreign outlets, among the authorities and many citizens alike. Crisis Group interviews, Hirak activists, Algiers residents, Algiers, May 2020. See Lyes B, “Les démons de l’Algérie ne lâcheront pas prise”, Algérie Eco, 3 June 2020.Hide Footnote 3. A sceptical Hirak Despite the promises of democratic openness, Hirak activists remain suspicious of the government’s intentions. Several protesters believe that the facts contradict these promises and fear that the liberal provisions planned for the future constitution will never see the light of day.[fn]Crisis Group interviews, Hirak activists, Algiers, May 2020. As one activist put it: “The population must take the government at its word because it has no say”. Crisis Group interview, activist, Algiers, May 2020.Hide Footnote One of them quipped: “The current constitution is already the most liberal in the world. A text is just a text. What’s more, it is imposed from above by a committee of experts, which shows that it is not made to be discussed by the people, even if it were to be approved by referendum”.[fn]Crisis Group telephone interview, Hirak activist, Tunis, May 2020.Hide Footnote In addition, after approving of the authorities’ initial COVID-19 response, many activists now fear that they are exploiting the pandemic to tighten their grip.[fn]Crisis Group interview, Hirak activists, Algiers, April 2020. See Hamdouche, “La lutte de clans”, op. cit. See also Sarah Haidar, “Coronavirus et Hirak algérien : des effets secondaires à haut risque !”, Middle East Eye, 1 April 2020.Hide Footnote A former senior official also describes his impression that the government is, once again, imposing its roadmap as if the Hirak did not exist.[fn]Crisis Group telephone interview, Algiers, November 2019.Hide Footnote The president’s recent declarations are cases in point. On 2 June, speaking at the defence ministry headquarters, Tebboune denounced the “lobbies” that seek to sap the army’s morale, an implicit reference to Hirak activists who disdain the constitutional reform project.[fn]See Akli Ouali, “Tebboune et Chengriha sur la même longueur d’onde”, L’Est Républicain, 4 June 2020.Hide Footnote At the heart of this project – rejected by several protest movement factions – is territorial reform, which aims to increase the number of municipalities and provinces.[fn]See the draft law amending Act N°84-09 of 4 February 1984 relating to the country’s territorial organisation. See also Luis Martinez, “L’armée algérienne à l’épreuve du hirak”, Le Point, 20 February 2020.Hide Footnote The project also envisions a referendum at the end of 2020, which, according to the presidency’s spokesperson, will allow Algerians to agree on a constitution that will prevent it from “falling into the trap of authoritarianism”.[fn]See Ali Boukhlef, “Belaïd Mohand Oussaïd : ‘La présidence veut une Constitution consensuelle’”, Liberté Algérie, 14 May 2020.Hide Footnote The municipal and legislative elections planned for 2021 or 2022 are also included in the project.[fn]According to the presidency of the Republic, legislative and local assemblies can be dissolved in 2021 after the constitutional referendum at the end of 2020. Their legal mandate ends in 2022. See “Tebboune : le référendum sur la nouvelle constitution aura lieu avant la fin de l’année”, Algérie Eco, 23 February 2020. See also Mouhand Ouamar, “Algérie : pas d’élections législatives et locales cette année”, Observ'Algérie, 14 May 2020.Hide Footnote III. The Socio-economic Fallout of COVID-19 A. Emergency Measures The government made a series of proactive decisions. In order to limit the pandemic’s socio-economic impact, in particular that of a partial lockdown, the government made a series of proactive decisions. On 17 March, the Tax Division postponed the payment of income taxes and value-added tax for two months; one month later, it exempted humanitarian and charitable associations from customs duties. The government also decreed the payment of a premium to health professionals.[fn]See Presidential Decree N°20-79 of 6 Chaâbane 1441 (corresponding to 31 March 2020), establishing an exceptional premium for health personnel.Hide Footnote On 22 March, due to the closure of non-essential public services, half the public sector’s management staff and employees were placed on exceptional paid leave for a renewable period of fourteen days.[fn]See Executive Decree N°20-69 of 26 Rajab 1441 (corresponding to 21 March 2020), op. cit.Hide Footnote Following the suspension of sea fishing, on 23 March the authorities of the wilaya of Algiers set up a crisis unit to coordinate assistance to fishermen.[fn]See “Installation d’une cellule de suivi des marins pêcheurs confrontés aux retombées de la crise sanitaire”, Algeria Press Service, 6 April 2020.Hide Footnote Other support measures followed for businesses and the underprivileged. On 7 April, the Bank of Algeria required financial institutions to reschedule their clients’ debt payments.[fn]See Zahra Chenaoui, “Après le Hirak, le coronavirus : en Algérie les entreprises tirent la sonnette d’alarme”, Le Monde Afrique, 17 April 2020.Hide Footnote On 13 and 15 April, respectively, the government announced an allowance of 10,000 dinars (72 euros) for needy families and suspension of late payment penalties for works and services provided under public contracts.[fn]See “Une allocation de 10 000 DA aux familles impactées par la crise sanitaire”, Tout sur l'Algérie, 13 April 2020.Hide Footnote From the end of March, the authorities guaranteed the country’s food security and sought to reassure citizens. To avoid panic buying and the resulting shortages, the government boosted its wheat orders on international markets. The president announced that semolina production would be increased three-fold.[fn]See “L’Algérie multiplie les achats de blé sur les marchés internationaux”, El Iqtisadiya, 3 April 2020. See also Tarik Hafid, “Algérie : la semoule de la colère”, Sputnik, 2 April 2020.Hide Footnote Many Algerians received text messages from the government and public companies reassuring them of the availability of essential goods.[fn]Crisis Group observations, Algiers, March 2020.Hide Footnote The agriculture minister also declared that state support for basic food products would continue, while the trade minister made field visits to food storage facilities to show that the government was preventing speculation on food commodities.[fn]See “M. Rezig inspecte des espaces commerciaux à Alger et Tipasa : respecter les mesures de prévention”, El Moudjahid, 3 May 2020.Hide Footnote Finally, authorities entered into a tacit agreement with several workers in the informal sector, from wholesalers to retail sellers, asking them to facilitate the delivery of foodstuffs and maintain price stability in exchange for the legalisation of their activity.[fn]Crisis Group interviews, executive in a large company, Algiers resident, Algiers, March 2020.Hide Footnote B. Pessimistic Macro-economic Projections Despite these emergency measures, most projections remain pessimistic about the ability of Algeria – which derives most of its tax revenues from hydrocarbon exports – to face macro-economic challenges that have become colossal in the wake of the global economic slowdown.[fn]In Algeria, hydrocarbons (oil and gas) account for 97 per cent of exports, two thirds of state revenues and one third of GDP.Hide Footnote The figures speak for themselves, and the medium-term scenarios are alarming.[fn]See “Confronting the Covid-19 Pandemic in the Middle East and Central Asia”, International Monetary Fund, April 2020. See also Gita Gopinath, “The Great Lockdown: Worst Economic Downturn Since the Great Depression”, IMF Blogs, 14 April 2020.Hide Footnote The origins of the crisis go back several years. The origins of the crisis go back several years. Since the fall in the price of Brent crude in 2014, which serves to index the price of long-term natural gas contracts that represent the majority of export revenues, public spending has increased relative to state income.[fn]See Abderrahmane Mebtoul, “Les six impacts de la baisse du cours des hydrocarbures sur l’économie algérienne”, La Nouvelle République, 3 May 2020.Hide Footnote This ratio has become more imbalanced as the volumes of hydrocarbon production and exports steadily decrease.[fn]In the early 2000s, the country exported 65 billion cubic metres, against only 51.4 billion in 2018. The gap can be explained by the increase in domestic energy consumption (gas is used to produce electricity) and international competition. In this competitive environment, Algeria is having difficulty maintaining its long-term contracts, many of which expire in 2024 and will be renegotiated at less advantageous conditions given the fall in the price of Brent. See Crisis Group Report, Breaking Algeria’s Economic Paralysis, op. cit. See also “En dépit du renouvellement de ses contrats : les exportations gazières de l’Algérie en baisse”, El Watan, 26 November 2019; Khelifa Litamine, “Gaz algérien : les clients européens réduisent de moitié leurs demandes”, Algérie Eco, 29 January 2020; Nadija Bouaricha, “Dr Mourad Preure : ‘s’engager dans un véritable patriotisme économique’”, El Watan, 4 April 2020.Hide Footnote To limit this budget deficit, which leads the state to borrow from national banks, Algiers implements two different approaches: at times, it adopts unpopular measures, such as reducing spending, increasing the tax burden and varying the exchange rate; at other times, it favours economic measures that are less painful for citizens in the short term, such as increasing the money supply and limiting imports.[fn]See Crisis Group Report, Breaking Algeria’s Economic Paralysis, op. cit.Hide Footnote The crisis accelerated sharply with the historic fall in the prices of Brent and Sahara Blend (the varieties of oil exported by the country), and then the effects of COVID-19, which caused oil prices to plunge to their lowest levels in 40 years in constant dollars. The resulting budget and trade deficits cannot be absorbed without external debt and austerity measures likely to fuel social tensions.[fn]Brent and Sahara Blend fell respectively from $70 and $65 per barrel in January 2020 to $19 and $15 in April 2020. Their prices rose in June – reaching $42 each – but remain very volatile and depend on the prolonged reduction in supply decided by the Organization of Petroleum Exporting Countries (OPEC). See “L’OPEP+ poursuit sa stratégie de baisse de l’offre pétrolière”, Connaissance des énergies, 8 June 2020.Hide Footnote Even though the cost price of oil is very competitive, especially in the Hassi Messaoud oil fields where it sometimes falls to under $3 per barrel, to balance its budget the country requires a minimum price per barrel that is one of the highest in the Middle East: over $100.[fn]See Breakeven Oil Prices, IMF Data, 2019.Hide Footnote As a result, budgetary and trade deficits will continue to grow.[fn]In 2019, the former was already above $75 billion and the latter nearly $4 billion. See “Les indices de valeurs unitaires du commerce extérieur de marchandises 2019”, N°888, Office national des statistiques. See also Karim Zeidane, “Algérie, loi des finances 2020 : financer le déficit budgétaire, un vrai casse-tête”, Le 360, 7 November 2019.Hide Footnote It is therefore probable that if the price per barrel of Brent and Sahara Blend remains low and volatile – between $20 and $45 over five years (2020-2025) for the first, and between $10 and $45 for the second – foreign exchange reserves will decline sharply.[fn]Crisis Group interviews, former head of security for an oil company based in Algeria, former CEO of an oil company active in Tunisia, Tunis, April 2020. See the analyses and forecasts published on oilprice.com.Hide Footnote Algeria could soon be forced to allow its currency to depreciate and resort to exter-nal debt. For the time being, the absence of external debt shows that the state has some financial room for manoeuvre, which makes the Lebanese scenario of a payment default with a fall in the value of the national currency unlikely in the short term. But there is a risk that Algeria could soon be forced to allow its currency to depreciate and resort to external debt.[fn]See Crisis Group Middle East Report N°214, Pulling Lebanon out of the Pit, 8 June 2020.Hide Footnote Despite President Tebboune’s repeated statements dismissing this possibility, the country may need to seek support from the International Monetary Fund and World Bank in order to replenish its foreign exchange reserves.[fn]The authorities seem keen to avoid this scenario, which recalls the economic collapse of the “black decade”, “camouflaged”, notes a former senior official, by “the violence of the army and Islamist groups”. It is nevertheless mentioned in the 2020 finance law. Crisis Group telephone interview, former senior official, Tunis, April 2020. See also “Le président algérien exclue le recours au FMI malgré la chute des cours du pétrole”, Agence France Presse, 2 May 2020; “L’entretien exclusif : le président algérien Tebboune croit à un apaisement de la situation avec la France”, France 24, 4 July 2020. See article 108 of Act N°19-14 of 14 Rabie Ethani 1441 (corresponding to 11 December 2019) on the finance law for 2020.Hide Footnote If these reserves run dry – a plausible scenario by 2023 – basic food and social security would no longer be guaranteed, a situation that the government will try to avoid.[fn]Crisis Group interviews, analysts, Tunis, Algiers, January-March 2020. Foreign exchange reserves fell from $179 billion in 2014 to $62 billion at the end of 2019. On 3 May 2020, the government spokesperson announced that they would drop to $44 billion, the equivalent of a single year of imports. See Ali Benouari, “Crise économique : rompre impérativement avec les méthodes de gestion du passé”, Le Soir d’Algérie, 16 April 2020.Hide Footnote Other factors are likely to harm the national economy. According to the Confederation of Algerian Industrialists and Producers, the purge of political, administrative and economic circles launched by authorities at the end of 2019 in response to the Hirak movement’s demands led to liquidation of over 60 per cent of public-sector construction companies, some of the most important firms aside from hydrocarbon ventures.[fn]See Crisis Group Middle East and North Africa Briefing N°68, Post-Bouteflika Algeria: Growing Protests, Signs of Repression, 26 April 2019. See also “Crise politique en Algérie : près de 60 pour cent des entreprises BTP ont déjà mis la clef sous le paillasson”, Radio Algérienne, 6 October 2019; and Chenaoui, “Après le Hirak, le coronavirus : en Algérie les entreprises tirent la sonnette d’alarme”, op. cit.Hide Footnote And construction is not the only sector affected by such closures. Since the epidemic broke out in Algeria in March, nearly 65 per cent of companies operating in the country have frozen their activities.[fn]See “Abdelwahab Ziani, président de la CIPA : ‘60 pour cent des patrons sont inquiets sur l’avenir de leurs entreprises’”, Radio Algérienne, 30 April 2020.Hide Footnote On 7 July, the president of the National Association of Algerian Traders and Craftsmen declared that nearly 50,000 cafés and restaurants were threatened with bankruptcy due to lockdown measures.[fn]See “Plus de 50 000 restaurants et cafés au bord de la faillite”, El Watan, 7 July 2020.Hide Footnote The steep downturn in the formal economy risks drastically reducing tax revenues.[fn]The International Monetary Fund predicts a 5.2 per cent recession in 2020. See “Confronting the COVID-19 Pandemic in the Middle East and Central Asia”, op. cit. See also Younes Saadi, “L’Algérie fait face à quatre grandes crises en 2020”, Maghreb Emergent, 8 April 2020; Mathilde Blayo, “Un dialogue national pour une sortie de crise en Algérie”, La Croix, 26 July 2019.Hide Footnote A further difficulty: some countries are slowing exports of agricultural raw materials, in particular wheat, which could generate a surge in their prices on international markets.[fn]See Ali Idir, “Blé et riz : les prix flambent sur les marchés internationaux”, Tout sur l'Algérie, 6 April 2020. See also "Policy Brief: The Impact of COVID-19 on Food Security and Nutrition”, UN, June 2020.Hide Footnote To use the expression of a finance minister from the mid-1970s, this eventuality would lead the country to “eat up” more oil and gas revenues, given its heavy food dependency (over 45 per cent).[fn]See Hubert Michel, “Chronique politique Algérie”, Annuaire de l’Afrique du Nord, 1975. See also Akli Rezouali, “L’Algérie ne couvre ses besoins alimentaires qu’à 55 pour cent”, El Watan, 30 January 2019.Hide Footnote Furthermore, a disruption in the supply of industrial and agricultural inputs (such as fertilisers, pesticides and spare parts) would lead to a significant drop in productivity and thus to an increase in prices.[fn]Crisis Group telephone interviews, businessman, UN Food and Agriculture Organization official, Tunis, March 2020.Hide Footnote Finally, over 10 million informal workers (roughly half the work force), notably in agriculture but also in construction, commerce, hospitality, manufacturing, transport, communications and the foreign exchange market, saw their income drop significantly during the partial lockdown.[fn]See “L’emploi informel en Algérie : tendances et caractéristiques (2001-2010)”, Les Cahiers du MECAS, no. 12 (June 2016). See also “Le secteur informel à Alger représente 45 pour cent du PNB”, Algérie Eco, 4 March 2017. These workers would have been even more affected by a total lockdown, as was the case in Tunisia. According to an official from an international organisation in Algiers, the authorities opted for a partial lockdown for this reason, “in order to avoid propelling this large segment of the population into extreme poverty”. Crisis Group telephone interview, Tunis, April 2020. Crisis Group observations, Tunis, April-May 2020.Hide Footnote The number of unemployed people and families in need is therefore likely to grow considerably. C. From Austerity to Social and Corporatist Tensions Given the critical economic situation, the government seems to have no option but to drastically reduce public spending, which it will have to do gradually.[fn]See Zeinab Filali, “Pétrole : l’Algérie, obligée de revoir sa loi de finance”, Financial Afrik, 17 March 2020.Hide Footnote The authorities will have to decide which sector to tackle as a priority, something that will no doubt give rise to numerous social and corporatist tensions. At the end of March and in early May 2020, President Tebboune announced a reduction of the state’s operating budget by one third, then one half, before abandoning the idea.[fn]See “Coronavirus : Alger taille dans son budget pour faire face à la chute des cours”, Agence France Presse, 23 March 2020. See also "La baisse du budget de fonctionnement portée à 50 pour cent, hausse du SNMG”, Tout sur l'Algérie, 3 May 2020; “PLFC 2020 : le gouvernement abandonne l’idée de réduire de 50 pour cent le budget de fonctionnement”, Algérie Eco, 26 May 2020.Hide Footnote The government also predicted that imports would be reduced by one third and that the budget of the state-owned oil and gas company, Sonatrach, would be halved, as confirmed by its CEO on 2 July 2020.[fn]Operating expenses – which represent more than 60 per cent of total government spending – largely go toward wages. Crisis Group telephone interview, economist, May 2020. See “Coronavirus : Alger taille dans son budget pour faire face à la chute des cours”, op. cit. See also Act N°19-14, op. cit. See also “Réduction de 50 pour cent des dépenses de Sonatrach sans impacter l’activité de production”, El Watan, 2 July 2020.Hide Footnote The situation is complex. The Supplementary Finance Law for 2020 already cuts operating expenses by 6 per cent and capital expenditure by 10 per cent.[fn]Crisis Group telephone interview, Algerian economist, Algiers, May 2020. See Act N°19-14, op. cit. See also Act N°20-07 of 12 Chaoual 1441 (corresponding to 4 June 2020) on the complementary finance law for 2020.Hide Footnote Given the operating budget’s distribution by ministerial department, it is highly likely that in coming years the government will have to reduce defence ministry funding (28 per cent of the total budget) if it wants to avoid disproportionate spending by the army. Such an imbalance would give rise to fierce controversy over the security sector’s cost, notably among professionalbodies aggrieved by unevenly distributed austerity. Finally, the government plans to eliminate certain social housing schemes and to reduce the loans granted by the National Agency for the Support of Youth Employment. It appears that few young people have repaid these loans, with which the regime bought partial social peace in the 2000s.[fn]Crisis Group interview, analysts, former senior Algerian official, Marseille, March 2020. Some economists believe that the Hirak resulted in part from the reduction in National Agency loans and the increase in legal proceedings for non-repayment following the decrease in public spending from 2014. See Yassine Baccouche, “Le gouvernement annonce l’abandon progressif du logement social et AADL”, Tout sur l'Algerie, 10 May 2020. See also “Une nouvelle formule en faveur de l’ANSEJ 2000 milliards de dinars injectés dans un fonds spécial”, Le Maghreb, 26 November 2019.Hide Footnote The loans could be replaced by tax incentives, but these are unlikely to be sufficient to socially reintegrate unemployed youth.[fn]See Mohammed Fouzi and Sidi Mohammed Benachenhou, "La Contribution du dispositif Ansej au développement de l’entreprenariat”, Les Cahiers du MECAS, vol. 4, no. 1 (2017).Hide Footnote Le défi du pouvoir et sa grande préoccupation seront certainement d’éviter que la contestation populaire ne revête une dimension plus sociale et offensive. When lockdown measures, including the ban on public gatherings, are lifted across the country (a decision regularly postponed since June), the authorities’ main concern will certainly be to prevent the uprising from becoming more militant and aggressive in its tactics.[fn]Crisis Group interviews, Hirak activists, Algiers, March-November 2019.Hide Footnote There are already some indications: according to the National Committee for the Liberation of Prisoners, 50 per cent of those in jail have been arrested since the lockdown began. They largely consist of young people from disadvantaged areas affected by the economic slowdown, who may be among the first to rise up after the lockdown ends.[fn]Crisis Group interview, academic, Algiers, May 2020. See also the Facebook page of the National Committee for the Liberation of Prisoners.Hide Footnote Already there have been incidents that indicate the depth of youth discontent. On 15 June, clashes broke out among youths from Tinzaouatine, a town on the border between Algeria and Mali, following the installation of barbed wire that limits movement across the border, especially that of small-scale smugglers.[fn]See Arezki Benali, “Tinzaouatine : ce qui s’est passé”, Algérie Eco, 16 June 2020.Hide Footnote On 19 June, several demonstrations took place in the regions where the lockdown had been lifted six days earlier. They brought out several hundred people.[fn]See Khelifa Litamine, “70e vendredi : reprise tendue du Hirak dans plusieurs villes”, Algérie Eco, 19 June 2020.Hide Footnote IV. Addressing the Challenges A. Could the Hirak Go on the Offensive? The end of the partial lockdown could mark the start of a period of greater social unrest. The end of the partial lockdown could mark the start of a period of greater social unrest. The current modus vivendi between the authorities and Hirak could therefore dissolve, leading to a more heated struggle with unpredictable consequences. On one hand, the national unity brought about by the pandemic is unlikely to withstand macro-economic challenges. Several activists say the looming economic crisis could provide them with political opportunities. As one notes, “Many of us are waiting for the fall in oil prices and the bankruptcy of Sonatrach. This will hasten the end of a revenue which only benefits a small circle and not all the Algerian people”.[fn]Crisis Group interview, Hirak activist, Algiers, April 2020.Hide Footnote Another adds: “This crisis could finally allow the economy to diversify and citizens to work freely. But to achieve this, the current political leaders, who hail from a bygone era, must give way to new national potential, especially that of young people”.[fn]Ibid.Hide Footnote On the other hand, the relatively stricter security measures being put in place are leading more and more activists to consider stepping up “to phase 2” of protest, with a general strike and civil disobedience complementing the twice-weekly marches.[fn]Crisis Group interviews, Hirak activists, Algiers, April 2020.Hide Footnote This strategy is debated within the Hirak whenever tensions with the regime become palpable. Activists mulled it over in September 2019, after the announcement that the presidential election would take place two months later, and again after the shock that followed an election held despite popular resistance. For the time being, strikes and civil disobedience have remained marginal, but new demonstrators, hit hard by the economic impact of COVID-19 (especially young workers in the formal and informal trade sectors), could encourage the Hirak to resort to such tactics more often.[fn]Crisis Group interviews, young private-sector workers, Algiers, May-June 2020.Hide Footnote Many young people with unstable employment in the private sector claim to have had no income in three months, contributing to their mistrust of institutions and potentially pushing them down the path of delinquency and petty crime.[fn]Ibid. A young informal worker noted: “Lockdown is like prison. It’s not easy for everyone. Some are playing for time, but others are not. Some young people are getting up to no good because there’s no more money going around. I’m tempted, too. Even before this, there was no work, but now we can’t even make a bit of money on the side. People who never stole start stealing; others start fighting; others start selling drugs. I have quite a few friends who were robbed”. Crisis Group interview, Algiers, June 2020.Hide Footnote Thus far, job actions have not met with the success that their advocates, notably far-left activists, expected. From 10 to 15 March 2019, Hirak leaders in contact with autonomous trade unions called a general strike. Education and transport were virtually the only sectors to observe it. On 8 December 2019, a call for a general strike to protest the presidential election four days later attracted little support, except in Kabylia, and particularly in Bouira and Tizi Ouzou.[fn]Crisis Group observations, Algiers, March and October 2019.Hide Footnote When lockdown measures are lifted across the country, the right socio-economic conditions could be in place to render such attempts successful. The movement’s leaders, now experienced in organising demonstrations, could seize the opportunity to push the Hirak’s central demands: systemic change entailing removal of all political figures. The regime might be forced to engage in a defensive dialogue, or it might feel cornered and use more repressive force. The uprising might then turn violent itself, given the number of impoverished young workers joining its ranks.[fn]As a former central bank official noted: “The informal sector represents over 40 per cent of our economy. Since the lockdown began, most workers have lived off family solidarity, but many are hungry. Once the lockdown is lifted, things will change for sure. In what way? We don’t know. But present conditions could give rise to all sorts of scenarios: a violent end to the Hirak or a return to the massive demonstrations of April 2019, which brought millions of Algerians into the streets”. Crisis Group telephone interview, May 2020.Hide Footnote B. Could the Hirak Wear Itself Out? Neither the authorities nor the movement seem ready to suffer the consequences of an ill-prepared confrontation. Another scenario with similar medium-term consequences is the Hirak’s exhaustion. Neither the authorities nor the movement seem ready to suffer the consequences of an ill-prepared confrontation. The government has over 50 years of experience in managing dissent, and those who support a harsher response to the Hirak are reportedly losing ground. In 2019, those said to be “close to Gaïd Salah” – the former army chief of staff – tended to preach about national unity, advocating for a firm response “to enemies of the fatherland”, including violent repression of demonstrators and large-scale imprisonment. This view, however, appears to be losing out to the opposing camp, made up of “former officials from the Department of Intelligence and Security”, which favours a subtler approach to handling protests.[fn]Crisis Group telephone interview, former senior Algerian official, May 2020. Crisis Group interviews, former Algerian state representatives, journalists, Hirak activists, Algiers, Tunis, Paris, March-December 2019. See “Bengrina accuse les partisans de la transition d’être ‘les alliés de la bande’”, Algérie Eco, 21 November 2019.Hide Footnote Several events suggest that this shift has occurred. In mid-April, the Central Division of Army Security raided the premises of the Central Division of Internal Security and arrested its head, General Wassini Bouazza, who was known to be close to Gaïd Salah. Army Security also arrested General Abdelkader Lachkham, head of communications at the defence ministry, who has a similar profile. In addition, General Ghernit Benouira, Salah’s former private secretary, is said to have fled the country.[fn]Crisis Group telephone interviews, journalists and analysts, April-May 2020. See Nicolas Beau, “Services algériens, les couteaux sont sortis et Bouazza écarté”, Mondafrique, 14 April 2020. See also Ihsane El Kadi and Wassini Bouazza, “Quel sens cache la mise sous écrou de l’héritage de Gaïd Salah ?”, Blog Radio M, 17 April 2020; Jean Pierre Sereni, “Algérie. Grand lessivage dans l’appareil militaro-sécuritaire”, Orient XXI, 4 May 2020.Hide Footnote The ex-intelligence official camp calls for neutralising Hirak figures through various means: co-optation; blackmailing activists who have criminal records; imprisonment followed by conditional release; reclamation of democratic and populist tenets; infiltration of trade unions and other organisations; and instrumentalising their sources of funding.[fn]Crisis Group interviews, former Algerian state representatives, journalists, Hirak activists, Algiers, Tunis, Paris, March-December 2019.Hide Footnote Several Hirak activists claim to be familiar with such methods, having personally experienced them in the 2000s.[fn]Crisis Group interviews, former far-left and Amazigh activists active in the Hirak, Algiers, March 2019.Hide Footnote For precisely this reason, the Hirak has never designated any official representatives and it remains unlikely to do so. As one sociologist explains, “How can there be a negotiation, with whom and on the basis of what prerequisites, when any negotiator trusted by the movement risks being co-opted by the system?”[fn]Crisis Group interview, sociologist, Algiers, April 2019.Hide Footnote The lack of official leadership has led the movement’s most influential participants to refuse all political dialogue proposed by the authorities. As such, the Hirak could stay entrenched for a long time and wear itself out. In the ensuing vacuum, minority groups within the movement could both harden their discourse and become more militant in their tactics. C. Taking Advantage of National Unity in the COVID-19 Era In the immediate future, it is unlikely that the Hirak and government can initiate a sincere political dialogue to avoid a harsher conflict or prevent the emergence of a more violent uprising in the more distant future. The government should, at a minimum, take advantage of the sense of national unity generated by the COVID-19 epidemic. In the absence of such dialogue, the government should, at a minimum, take advantage of the sense of national unity generated by the COVID-19 epidemic. It should encourage the initiatives of Algerian citizens who previously were marching every Friday to demand the system’s downfall – but without reducing them to a tool in co-optation schemes.[fn]According to a senior official, the interior ministry and local authorities already favour this strategy. Crisis Group telephone interview, senior official and FLN supporter, May 2020.Hide Footnote The authorities could, for example, financially support the solidarity networks stemming from the Hirak, which fight the epidemic and the lockdown’s socio-economic consequences.[fn]Crisis Group telephone interview, senior official and FLN supporter, May 2020.Hide Footnote They could also help these projects gain the status of official institutions, even if some activists will be unwilling to collaborate with the authorities for fear of being co-opted. Such an initiative could take various forms: assistance with starting businesses or charities offering health care, internet services or home delivery of groceries and cooked meals. At the same time, and even though social instability might increase, the regime could loosen its grip on the Hirak. It could release prisoners of conscience; lift censorship, especially on online media; end arbitrary arrests; authorise meetings of various activist groups; and involve protest organisations in the drafting of the new constitution. Any of these steps would lend substance to President Tebboune’s promises of democratic openness and broaden his support base. D. Overcoming Obstacles to Exit from the Rentier Economy In the medium term, and assuming that there is no structural reform, Algeria may face a major economic shock. In the short term, authorities should keep in place emergency socio-economic measures in line with those adopted between March and May 2020. Nevertheless, in the medium term, and assuming that there is no structural reform, Algeria may face a major economic shock. The country is largely stuck in the rentier economy.[fn]See Lowi, Oil Wealth and the Poverty of Politics, op. cit.Hide Footnote Its budget and trade deficits bear witness to the strains of dependence on hydrocarbon exports, low food self-sufficiency, and restrictions on entrepreneurship such as a lack of access to credit.[fn]See Crisis Group Report, Breaking Algeria’s Economic Paralysis, op. cit. See also Tin Hinane El Kadi, “Développement ou gain de temps ? ”, Friedrich Ebert Foundation, April 2020.Hide Footnote If international demand for fossil fuels does not bounce back to pre-coronavirus levels, in a few years the country could either be driven to bankruptcy or forced to set up an austerity policy with a deleterious social impact. For decades, reform initiatives aimed at reducing vulnerability to oil and gas market fluctuations and stimulating competitive business have been little more than wishful thinking. The resistance from special interest groups that benefit from the status quo has simply been too great.[fn]Crisis Group interviews, economists, state representatives, Algiers, Paris, Marseille, Tunis, March-October 2019.Hide Footnote Such initiatives have included: diversifying the economy; reforming agriculture; restructuring the banking system (for instance, increasing private-sector loans and improving the governance of public banks); legalising part of the informal trade sector; and lifting bureaucratic obstacles to youth entrepreneurship and the Maghreb’s economic integration.[fn]Crisis Group interviews, economists, state representatives, Algiers, Paris, Marseille, Tunis, March-October 2019. See also Rabah Arezki, “How to liberate Algeria’s economy”, Project Syndicate, 9 April 2019.Hide Footnote As one economist said: Whenever the regime is faced with a significant drop in oil revenues, it seems to have its back to the wall. It then embarks upon structural reforms to reduce its dependence on fossil fuels. Then, before these reforms can see the light of day or produce the expected effects, the price of oil and gas goes up and the country manages to conquer new export markets, which leads it to suspend the reforms.[fn]Crisis Group interview, economist, Marseille, March 2019.Hide Footnote In order for reforms to occur in the medium term, the authorities and the Hirak should begin an in-depth national economic dialogue, which should continue even in the (extremely unlikely) case that the prices of Brent and Sahara Blend cross the $100 mark in 2021-2022. According to officials from the FLN and the National Democratic Rally (Rassemblement national démocratique, or RND), the two main ruling parties, the Hirak is focusing too much on political issues to the detriment of economic and social ones.[fn]Crisis Group telephone interviews, FLN activist and RND official, May 2020.Hide Footnote They also note that the movement seemingly refuses to select representatives who could enter into dialogue with authorities. They claim to be prepared to hold consultations, including with the autonomous unions in the Hirak, which have thus far refused to participate in any such discussions.[fn]Ibid.Hide Footnote Although the Hirak is driven by a political agenda, it could accept a dialogue focused on socio-economic issues, provided that the authorities present it as an initiative to save the nation while also relaxing their pressure on protesters.[fn]Crisis Group interviews, Hirak activists, Algiers, 2019-2020.Hide Footnote The goals would be to identify the obstacles to exit from the rentier economy and to propose realistic ways to overcome them and thus avoid a major economic shock. This dialogue would bring together: the main political, trade union and associative actors, in particular those involved in the Hirak; representatives of the government, the presidency and perhaps the military; and the country’s most influential officials and businessmen, including from the informal trade sector. It would thus convene both the actors who champion these reforms as well as those who repeatedly sabotage them. It is urgent to begin a national dialogue that can find a compromise path of economic development without posing too great a threat to the status quo. The need is all the greater since the government might have to resort to the temporary fix of external debt – despite the president’s repeated denials – and face great difficulty in justifying it to Algerians. The government is sticking to a deeply pro-sovereign discourse, and does not hesitate to brandish it to silence dissent.[fn]See editorials from El Djeich in 2019.Hide Footnote Finally, international financial institutions and partner countries will also have a role to play if Algerian authorities find themselves compelled to turn to them. They should provide long-term support to Algeria, in particular for an economic reform strategy. But they should avoid imposing overly rigid conditionalities, notably excessive liberalisation and budget austerity. Either Algeria will refuse them or it will have no choice but to accept them. In this second scenario, donors could, at worst, help destabilise the powerful clientelist networks that participate in managing revenue, with the effect of intensifying violence, as was the case in the 1990s.[fn]See Roberts, The Battlefield, op. cit. See also Luis Martinez, La guerre civile en Algérie, 1990-1998 (Paris, 1998).Hide Footnote V. Conclusion A more contentious struggle between the authorities and the Hirak would be harmful to Algeria – but so would the protest movement’s frustration or exhaustion. In the absence of political dialogue that can help end mistrust, the authorities should take advantage of the national unity in the COVID-19 era to loosen their grip on the uprising. The regime and the Hirak should participate in a national economic dialogue to identify the obstacles to exit from the rentier economy and propose concrete courses of action for overcoming them. The challenges posed by the global coronavirus crisis make such an initiative increasingly necessary. Tunis/Algiers/Brussels, 27 July 2020 Appendix A: Map of Algeria CRISISGROUP Related Tags Algeria More for you Q&A / Middle East & North Africa L’Algérie de retour aux urnes Q&A / Middle East & North Africa Algérie : un air de déjà vu ?