What is more, the majority of Algerians are vegetating in precariousness, seeing their purchasing power seriously eroded, their young people, overcome by disillusionment, not hesitating to reach the Spanish coast to escape poverty and the dysfunction of the system.
In dire straits, the Algerian government, far from seeking the right solutions, preferred to flee first. This was demonstrated by the vote by the deputies on 17 November of the draft Finance Law for 2022, which provides in particular for the elimination of the system of generalised subsidies for basic products which has made it possible to maintain low prices on these products in force since the 1960s.
Essential products, which allow vulnerable groups to live in dignity, will see their prices soar. These include semolina, oil, bread, milk, but also water, electricity and gas.
Faced with budgetary difficulties that have continued to worsen since 2018, this policy of generalized subsidies, estimated at 10% of GDP and which requires the mobilization of the equivalent of 15 to 20 billion dollars per year, is now a thing of the past.
Last October, the International Monetary Fund warned Algeria of the need to “recalibrate” its economic policy and to carry out “structural reforms” whose social cost could only be painful.
Some experts are asking: What will the Algerian regime, which has always bought a form of social peace with oil wealth, do to avoid exasperating the anger of the vulnerable groups most affected by the crisis?
In this case, the government is proposing the payment of financial compensation directly to low-income households. In short, a red herring that poorly conceals a very embarrassing situation in which the government finds itself, obliged to comply with the directives of the Bretton Woods institutions.
In any case, the task looks set to be difficult. “From the moment we have an economy crushed by the informal sector, how can we set up a targeted aid system?” asks Algerian economist Smaïl Lalmas.
According to him, “what is urgent is to absorb the informal sector, to convince it to enter the formal circuit. But for that, there is one factor that is lacking: trust.”
Clearly, despite what it earns from oil and gas, on which it is heavily dependent, but with a very undiversified economy, with in addition a predation of resources and an apocalyptic governance, the country no longer knows where to turn. This is evidenced by a currency that continues to plummet, a failing supply of essential commodities to the country, an increasingly heavy political blockage, an economy on its last legs and strong social tensions.
These are caused by the precariousness in which large sections of the population live, the cyclical shortages of essential products and the deterioration in the purchasing power of the middle and poor classes.
The fault, conclude many informed observers, lies with a system that has remained sclerotic, refusing any change and any democratic progress.
The more the difficulties gain in intensity and complexity, the power in place prefers to walk against the clockwise direction, opting for more lockdown and not hesitating to use the big stick, repressing any expression for freedom and change, rather than offering a perspective. A failed power that has failed miserably to assume its essential missions and a country that no longer knows how to retain its population.
The number of “harragas”, who are trying, at the risk of their lives, to leave Algeria on board makeshift boats, is curiously increasing at a time when the price of a barrel of oil is on an upward trend.
Young people, devastated by unemployment, the housing crisis, an opaque administration and the high cost of living, are fleeing the “New Algeria” without regret or remorse.
The lack of prospects is undoubtedly the factor that best explains this desire that inhabits them to leave at all costs.
Obviously, all the difficulties that Algerians are enduring today are rooted in bad choices, the absence of reforms and, at the same time, an economy that is running out of steam.
In 2020, hydrocarbon revenues, which represent 90% of the country’s export revenues, melted away, falling by 40%, weighing on the country’s tax revenues by 31%.
As expected, Algeria experienced a severe recession of 5.2% and a deep economic crisis.
This resulted in a drastic reduction in investments and public orders vital for businesses and households as well as foreign exchange reserves.
More seriously, the budgetary room for maneuver has been reduced to nothing. The translation of this unprecedented crisis was the postponement of major works, the limitation of imports, a fall in household income, closures of companies or businesses, and a surge in unemployment.
To deal with a complex situation, the government has opted for sprinkling expedients, without resolving to tackle the major problems that are paralysing economic activity and accentuating social unrest.
On a daily basis, Algerians are finding it increasingly difficult to cope with the erosion of their purchasing power, soaring prices, shortages and, above all, the progressive impoverishment of the middle class.
Some basic foods are selling for double or even triple their usual price. The markups are sometimes 100 or even 200% for the majority of foodstuffs considered essential (canned milk, vegetables, fruits, meats and pasta, etc.)
The price of a kilo of potatoes, which reached 150 dinars (0.82 euros) compared to around 60 usually, has become the main indicator to denounce the increase in the cost of living. The rise in prices is starting to weigh on households’ purses with inflation exceeding 6%, an increase of 3.4 points in one year.
This inflation weighs heavily on household budgets, particularly those on low and medium incomes, whose salaries vary between 200 and 400 dollars per month.
In ten years, the value of the average salary in Algeria has been halved, while prices have continued to rise. This difficult situation has pushed professional categories to repeatedly demand salary increases.
For several months, social unrest has been real and several sectors, including Education and Health, are raising their voices.
Teachers, mainly those in primary, middle and secondary schools, have been on strike for two days a week since the beginning of November.
Meanwhile, this Algeria, which faces serious challenges, is at the head of the pack of African countries which spent the most on military weapons in 2020.
2024-08-31 16:58:30