October 7, 2019: With the army-run interim government determined to hold presidential elections on December 12th, Algerians defiantly went ahead with the 33^rd weekend of protests in the capital and other cities. This has been going on for eight months and the army hoped setting the election date would end or reduce the demonstrations. It did not turn out that way. Most Algerians feel that rushing the elections favors the election of another corrupt politician who will act like all the previous ones. In other words, there will be a few token prosecutions for corruption but the majority of the corrupt bureaucrats and business owners will return to their outlaw ways. This is seen as the reason why 70 percent of the Algerian unemployed are job-seekers in their late teens and 20s. Many have never been able to get a job. The unemployment rate is about 15 percent, up from the 12 percent it was stuck at for several years.

Corruption and mismanagement the former government is seen as a major reason for the high unemployment, especially among the younger Algerians. Another incitement is how the interim government is using its control over mass media to criticize the protestors at every opportunity and block any criticism of the interim government. This offends younger Algerians most of all because they are the most media savvy. They may be poor but most have cellphones and know how the media works.

The growing number of arrests and prosecutions of senior officials includes many connected with the oil and gas industry. Oil and gas are the primary export which brings in most of the foreign exchange needed to pay for imports. Oil industry expansion plans are now on hold because of the uncertainty over whether the next president will be a reformer or someone pretending to be but ready to return to the corrupt old ways.

This is a big deal because the current government budget assumes an oil price nearly twice what it is now. The world oil price is not expected to rise and is more likely to decline again. Even before the change of government financial desperation had forced the corrupt oil industry bureaucrats to finally allow needed reforms to move forward, slowly. Algeria could no longer afford to be sloppy with oil industry upgrades so that some well-connected officials could get rich. The budget deficits were a greater threat. Now all these needed reforms are on hold again as the corrupt deals are uncovered, eliminated and efforts made to replace them. The arrest, or threat of arrest, for so many owners or managers of major businesses has also stifled any hopes of rapid economic reform to reduce unemployment.

Another disturbing sign is the interim government making plans to again seek foreign loans. This was halted in 2005 as a “reform” measure that forced the corrupt officials to steal just what the economy was actually producing. A decade later low oil prices meant many cuts in the government budget and not enough money for needed infrastructure improvements or maintenance. Depending on who the new president is, those loans will be sought for needed projects that will create a lot of jobs. The question is how much of that borrowed money will be stolen and how much will that delay or derail the infrastructure projects. The younger voters know how this works because they have access to foreign (largely Western and especially French) media where there are lots of detailed stories about how corruption works. Some of those stories are about Algeria, often written by journalists who cannot revisit Algeria once those stories are published and corrupt Algerian officials are named.

One advantage of foreign loans is that if they come from a reputable source the loan terms will include regular audits. If Algeria seems loans from less reputable sources (China, some Arab states) the corruption will be unofficially built into the loan terms as “fees and administrative expenses.” Either way, Algeria will be expected to repay the loans.

Follow The Dwindling Money

The government has a way to measure how long it can avoid making decisive and effective changes in the economy and avoid an economic and political disaster. It all depends on how long the foreign currency reserves last. The reserves dipped below $100 billion at the end of 2017 and are headed for $68 billion at the end of 2019 and $47 billion by the end of 2020. GDP growth for this year will be about 2.6 percent but 2020 looks more like under two percent. This prompted the proposal to again seek foreign loans, in addition to the usual additional budget cuts. The government's inability to reform (suppress corruption) the economy quickly enough to reduce vulnerability to low oil prices becomes obvious when the foreign reserve situation is reported, as they must be to placate foreign customers, exporters and now lenders. Foreign exchange reserves, essential to pay for imports, keep declining because 70 percent of what Algerians consume is imported. Replacing a lot of those imports with locally produced food and manufactured goods takes time and the elimination of many laws and customs that allowed the FLN party and corrupt leaders like Bouteflika to prosper and survive since the 1960s. Demonstrators also note that former (for six months now) president Abdelaziz Bouteflika still lives in the presidential palace. However Said Bouteflika, his younger brother and a political associate was convicted of corruption in September and sentenced to 15 years in prison. So there is some progress but not enough. The demonstrators see the corruption prosecutions are limited to the most notorious and visible offenders, or those seen as a threat to the military and political officials running the interim government.

This is not a new problem because, since the collapse of oil prices after 2013, the foreign currency reserves have enabled the government to put off carrying out the extensive reforms and anti-corruption measures needed to revive the economy and achieve the degree of economic growth that would solve the unemployment problems. Those cash reserves were $193 billion in mid- 2014 and even with cuts to non-essential imports the cash reserves kept shrinking. The government cut its budget 14 percent in 2017 in order to get the budget deficit down to 8 percent (versus 15 percent in 2016). Even so after five more years of this, the foreign currency reserves will be less of a cushion and more of a threat because of all the additional budget cuts. By 2018 it was obvious that budget cuts and reductions in imports was not going to work and most Algerians knew it. That was one of the issues that led to the April overthrow of FLN rule. The current unrest is all about what replaces the FLN and if the replacements can fix the economy.

Who Decides

The military dominated interim government refuses to even consider the protestor’s main demand; for more time to organize political parties and develop proposals for reform and revival of economic growth. The unpopular interim government, run by the army general who persuaded former president Bouteflika to resign, promised he would announce a date for the presidential elections in September and that date was, as expected, elections in December 2019. The current anti-corruption efforts seem directed at consolidating support for a new president who will be more like a younger Bouteflika than a true democrat and reformer most Algerians want. Many of those who have announced they are candidates for president are former associates of the Bouteflikas or prominent FLN members. So far there are nearly a hundred candidates for president and the election will probably be in two rounds. The first one will select the front runners who will then go on to the second round where it is possible for someone to get more than half the votes and become the new president. The FLN and its allies have the edge here because they already have a national party organization and are not opposing the early elections.

The number of protestors is still large but the crowds are growing smaller. It was estimated that the first demonstrations brought out more than two percent of the population in a successful effort to force an unpopular and ineffective president Bouteflika to resign. Protestors see the interim government as a continuation of the old one minus many of the most corrupt (and visible) officials. The protestors want all senior officials from the Bouteflika era gone and freedom to form new political parties and form a new election commission. That does not appear to be what the military run interim government has in mind.

Violence Is Now An Option

Until late September the interim government had ordered troops and police to avoid violence against the demonstrators at all costs. Army leaders know that shooting of protestors risks another civil war. The generals are aware of the fact that most of the troops and junior officers side with the general population. This is one reason why the army recently announced it would not back any candidates in the upcoming presidential elections. What most Algerians want is for the military to get out of politics but the generals won’t go that far.

As long as the demonstrations are non-violent most of the troops and police confronting the crowds will follow orders and stick with crowd control. The security forces cannot be relied on to use lethal force against the demonstrators unless the demonstrators fire first. The demonstrators show no interest in doing that although many protestors back suggestions that more disruptive tactics be used. This would include blocked streets and protestors occupying government buildings.

Algerians want to avoid repeating what happened in Egypt. There the 2011 Arab Spring uprising overthrew the decades-old Mubarak government, which was similar to the Bouteflika rule in Algeria. Egypt conducted fair elections and an Islamic political coalition gained power and promptly made itself very unpopular by trying to impose what amounted to an Islamic religious dictatorship. Another popular upheaval led to another general getting elected in 2014 and a return to what appears to be another corrupt government dominated by the military.

The Algerian generals have a lot of power and a certain amount of popularity for winning the war with Islamic terrorists in the 1990s and diminishing the capabilities of surviving Islamic terror groups ever since. Most Algerians want to avoid the fate of Egypt but there is no agreement on how to do it and most senior Algerian generals are not cooperating.

The main target of the protests is now general Salah along with FLN and Bouteflika associates running the interim government. For 90 days after a president resigned the interim president was Abdelkader Bensalah, the head of the upper house of parliament. This was what the current constitution called for. Despite that, the real leader of the interim government has been armed forces commander and vice minister of defense Ahmed Gaid Salah. This general has been playing kingmaker as he was the one who convinced Bouteflika to step down without a fight. The official interim president term expired on July 9^th and now the frequent pro-democracy demonstrations are larger and louder because the interim government is officially out of constitutional authority. Salah tried to get agreement on extending the interim presidency of Bensalah because that adds legitimacy to Salah’s power. No success there either. Compromise is needed but not much is to be seen anywhere, not yet. Now Salah has declared elections will take place on December 12^th and most Algerians see that as a blatant effort to keep the FLN in power.

October 5, 2019: Today is the 31^st anniversary of the “Black October” demonstrations and riots that forced the corrupt FLN dominated government to allow elections with more than one political party participating. Up until then the only party allowed was the FLN party, which came out of the movement to force the French out in the 1960s. The elections were held and the religious parties got enough votes to form a government that talked about imposing Islamic (Sharia) law. The FLN, the military and many Algerians opposed that and most of the 1990s were spent dealing with a vicious and bloody war against Islamic terrorism. Out of that came a popular dislike for Islamic terrorism, no matter what the cause. Multiple parties were still allowed but the FLN was not prosecuted for rigging the elections to ensure that the FLN always won. The manipulation became more and more obvious and that led to the April overthrow of the FLN. True to its past, the FLN is seeking to once again make a comeback. What makes the current weekly (usually on Tuesday and Friday) demonstrations so large and sustained is that the 1988 demonstrators were mainly the frustrated young but this time around you not only have the young demonstrating but also many veterans of the 1988 demonstrations who may be in their 50s now but are still angry enough to come out week after week to protest.

September 29, 2019: The navy tested its newly acquired Kalibr land-attack missiles. These are launched underwater from torpedo tubes by the two new Kilo-class submarines. The missiles reached the surface, the rocket motor ignites and then the middles head for a distant target in the desert, where a circle had been drawn on the ground to indicate the target, which the missiles hit. Russia has been replacing most of the older heavy anti-ship (“carrier killer”) missiles on its subs with a more recent design that is very similar to the American Tomahawk. The Russian equivalent is 3M54 (also known as the SS-N-27, Sizzler or Klub/Kalibr), which many Russian and some Indian, Vietnamese, Algerian and Chinese subs are already equipped with. The Kalibr (Klub is the less capable export version) had growing pains that the Russians appear to have remedied. The 3M54 officially entered service in 2012 and has since used the surface ship and air-launched versions of Kalibr in combat against targets in Syria. Weighing two tons, and fired from a 533mm (21 inch) torpedo tube on a Kilo-class sub, the 3M54 has a 200 kg (440 pound) warhead. The anti-ship version has a range of 300 kilometers but speeds up to 3,000 kilometers an hour during its last minute or so of flight. There is also an air-launched and ship-launched version. A land attack version does away with the high-speed final approach feature and has a 400 kg (880 pound) warhead.

Back in January Algeria put two new Russian Kilo-class submarines into service and the Kalibr test was part of the training for the 52 man crews of each sub . The navy also has four older (1980s) Kilos that underwent upgrades and refurbishment in Russia between 2005 and 2010. The two new Kilos were ordered in 2014. Algeria has the highest defense spending in Africa (about $10 billion a year), which is a bit more than twice what second place Sudan spends. Algeria accounts for about half the foreign weapons purchases throughout Africa and gets most of its new gear from Russia. Algeria keeps the Russians honest and attentive by also purchasing more weapons from China, which has a reputation for building Russian weapons better than the Russians. A 2007 plan to spend $7.5 billion programs to upgrade a lot of Cold War era weapons and equipment included getting 300 new Russian T-90 tanks and 1,200 German wheeled armored personnel carriers. Russia and Germany are also providing new warships for the navy and dozens of Russian Su-30 warplanes. Russia offers low prices and a tolerant attitude towards corruption and bribes. Plus, the Russian stuff looks impressive and is not likely to be used in any serious fighting because Algeria is surrounded by nations that have been generally non-threatening for a long time. The government has quietly cancel ed or delay ed some military procurement deals because of the sustained low oil prices. This includes nearly a billion dollars’ worth of Russian arms and a $1.1 billion deal with an American firm to provide three Gulfstream business jets equipped to perform radar, optical and electronic surveillance. This militarized Gulfstream purchase was made in 2015, just as the low oil prices became a long-term, not a short-term problem.

September 24, 2019: A military court convicted and sentenced several senior political and military figures to prison for corruption. Said Bouteflika, the younger brother of the former president, along with two senior generals and a political party leader were all sentenced to 15 years in prison. These four were also guilty of opposing Ahmed Gaid Salah, the head of the interim government, former armed forces commander and vice minister of defense. These trials also convicted 13 former government ministers and prime ministers along with several notoriously corrupt businessmen.

September 22, 2019: Police arrested a TV reporter and shut down the local TV station he worked for. The reporter was accused of taking and video for the Al Jazeera satellite news station, which showed demonstrators carrying signs criticizing the Algerian army leaders running the interim government. The Algerian TV station was shut down for the same reason. The army warned local TV and radio stations to be careful about what they broadcast regarding the months of demonstrations. Even before the current media crackdown Algeria was ranked as one of the most repressive nations in the world when it came to the local media.

September 20, 2019: A week after the government ordered a crackdown on weekly demonstrations the number of people coming out and defying the ban was larger than the last few weeks. Hundreds of demonstrators were arrested and two were shot dead on the 18^th, but the people kept coming and got past the roadblocks set up around the capital (Algiers).

September 10, 2019: The military has ordered 16 more Russian Su-30 and 14 more MiG-29 jet fighters. This will cost $1.8 billion. The air force already has 58 Su-30s.