Algeria finds itself at a critical crossroad in terms of both its political and economic outlook. Already suffering from the fallout from the Saudi-Russian crude oil price war, the Algerian economy has been further hammered by the COVID-19 pandemic, and is projected to shrink by 5.2 percent in 2020.
The administration of President Abdelmadjid Tebboune, elected in December 2019 after mass protests forced his predecessor, Abdelaziz Bouteflika, to step down, has introduced reform measures, but opposition political parties and the grassroots Hirak movement derided them as insufficient even before the government announced an indefinite suspension of the program due to the pandemic.
The situation in Algeria is of serious concern to Europe. The country is a major supplier of natural gas for the continent, and it is a popular point of departure for economic migrants and asylum-seekers along the western Mediterranean passage to Europe. As the pandemic further constricts the more precarious economies in sub-Saharan Africa, coupled with displacement caused by terrorism in the Sahel, the likelihood of Algeria—and by extension Europe—seeing an influx of refugees is growing.
China Has Taken an Interest
China has been increasing its engagement and influence in North Africa as part of the country's Belt and Road Initiative (BRI). In Algeria, China has quickly become a principal creditor and trade partner, supplanting France as the country’s primary commercial investment partner for infrastructure projects.
President Tebboune's government will have to choose to either reform or buy social peace; this time not with oil returns but with Chinese loans.