Algerian presidential elections

On 3 July, Abdelkader Bensalah, the President of the Council of the Nation (Senate) and interim successor to President Abdelaziz Bouteflika in the event of his incapacity, became the fourth public official in recent weeks to call for Bouteflika to stand for re-election in the presidential elections to be held in mid-2019.

• We assess that the government's careful management of an early debate on Bouteflika's fifth term is most likely intended to prepare the public for the government's likely preferred option of an orderly succession to a consensus candidate.
• Bouteflika's candidacy would be a likely 'fall-back' option if the ruling elite cannot agree on a successor, given the risk of country-wide protests over Bouteflika's perceived incapacity through poor health.
• Regardless of the succession issue, the group behind Bouteflika who currently hold power are likely to seek continuity in policy areas they consider essential for revenue recovery and maintaining governmental control over the economy. The government is likely, however, to make the hydrocarbon sector more attractive to investors, while continuing its efforts to diversify the economy towards the industrial sector

Bensaleh's statement came after similar public appeals by the ruling party, the National Liberation Front (Front de libération nationale: FLN), and the second and third largest parties, the Democratic National Rally (Rassemblement National et Démocratique: RND) and Tajamou'e Amel El Jazair (TAJ), in March and June. Despite the impression created by Bouteflika's rare public appearances, both the FLN and RND leaders have insisted that he is mentally and physically fit. Other professional and civil society groups and associations have also announced their support for Bouteflika's candidacy. These include the Algerian religious brotherhood "Zawiya", the General Union of Algerian Workers (Union Générale des Travailleurs Algériens: UGTA), and the Algerian Forum of Business Executives (Forum des Chefs d'Entreprises: FCE).

These latest statements supporting Bouteflika are most likely intended to counter calls in the past 12 months by the opposition and public figures, including government officials and academics, asking the president to step down due to his poor health. On 26 May, a group of 14 civil society members, including the former prime minister, Ahmed Benbitour, sent an open letter to President Bouteflika asking him not to run for a fifth term and launched a new political movement, Mouwatana (citizenry), which they say is aimed at creating the "conditions for a peaceful transition". President Bouteflika has not publicly commented on his intentions. Bouteflika's ill health means that in the eyes of the public he has become a figurehead president.

In 2014, Bouteflika's announcement of his candidacy for a fourth term triggered protests involving several hundreds of people, driven by the civil society group "Barakat" (Enough). The protests, which were concentrated in the capital, Algiers, and ethnic Amazigh-majority (Berber) locations including Bejaia and Tizi Ouzou, were suppressed by the security forces. Bouteflika was re-elected nonetheless, demonstrating his continued popularity despite his apparent poor health even at that time. He is widely given credit for bringing an end to the civil war in 1999 and for economic and social stability through a generous social welfare programme, and investment projects that were enabled thanks to high global oil prices until 2014, generating a large base of petrodollars. Although his reputation as the politician who ended Algeria's civil war places him beyond public criticism, there is a widespread perception that power is exercised by a shadowy closed circle, 'le Pouvoir', which includes his brother Said, the army and security services leadership, and prominent businessmen.

Outlook and implications
Although the current public debate over Bouteflika running for an additional term in office is reminiscent of that in 2014, this time it is happening significantly earlier, approximately 12 months prior to the ballot compared with three months, in 2014. The sequence and timing of statements supporting Bouteflika indicate a highly controlled debate by the ruling elite aimed at ensuring that the outcome of the upcoming elections does not put government stability, and the protection of their vested interests, at risk. The elite is probably planning on an orderly succession but retaining the option of Bouteflika staying in power if they fail to agree on a consensus candidate. This is also aimed at preparing the population for the latter outcome, seeking to prevent a re-emergence of the 2014 protest movement.

If Bouteflika does not stand for re-election, the prospect of any other candidate for success is likely to be very low without the prior top-down approval of the ruling elite. Several political figures loyal to Bouteflika, including Prime Minister Ahmed Ouyahia, have stated that they will not stand against him. Bouteflika's electoral victories, with claimed 81%, 90%, and 86% majorities in 2014, 2009, and 2004, respectively, were the result of unmatched political support and corresponding positive media coverage.

The decision on his possible candidature is likely to depend on whether his close circle of advisers can agree on a succession plan. They are likely to assess that a succession plan is preferable, given the higher likelihood of protests compared with 2014, given increased doubts about Bouteflika's health, and the constraints imposed on the government's social spending by the slow recovery of oil prices. Economic interest groups, such as one led by prominent businessman Ali Haddad, will seek to influence the decision to ensure continued favorable policies in key sectors, including infrastructure, housing, and imports.

Irrespective of who is elected president, policy continuity is likely on matters considered essential for revenue recovery and maintaining local ownership, such as the 49/51 rule. The government is, however, likely to emphasize tax reductions in the hydrocarbon sector, and continuing its effort to diversify the economy by promoting the manufacturing sector, including automotive, and local content in terms of employment of Algerian workers, and some local manufacturing in the supply chain. Such attempts at structural change are unlikely on their own to successfully address the underlying causes of discontent, especially unemployment, rendering the government dependent on an expected rise in global oil prices.

An indicator that the ruling elite is implementing an agreed succession plan would be 'grooming' through media coverage and public appearances of a potential candidate, even if he appears to be from the opposition, but who is subsequently endorsed by the ruling FLN party and the RDN, and 'blessed' by Bouteflika. Although this would be an indicator mitigating government instability risks, the dismissal or arrest, probably on corruption charges, of senior officials or prominent businessmen inside Bouteflika's close circle, would be a likely indicator of failure to agree on the succession, increasing the risk of government instability.

Posted 25 July 2018 by Jihane Boudiaf, Analyst, Country Risk, IHS Markit