Wednesday, July 05, 2017 13:20 PM / BMI
BMI View: The
absolute majority won by the ruling coalition in Algeria's legislative
elections came as no surprise and suggests little change to policy direction in
the wake of the result, with mild austerity measures to continue and a
consolidation of power with the government. Looking further ahead, political
risks are greater as the government's ability to fund subsidy programmes will
come under threat.
We expect little change to Algeria's current policy trajectory in the wake of the May 4 legislative elections. Not only did the ruling Front de Liberation Nationale (FLN) retain its sizeable majority of seats, but the powers of the National Assembly are relatively limited anyway.
This suggests that the government will continue with its policy of mild austerity measures, dampened somewhat by the threat of protest action (see 'Political Considerations To Prevent Austerity', April 13).
The FLN won 164 seats, which together with the 97 seats won by coalition partner the Rassemblement National Démocratique (RND) means that it holds 56.0%, giving it an absolute majority.
That being said, we can identify some themes from the results and the turnout which will prove points to watch over the next several years.
Political Apathy Will Support Government
Despite repeated calls by government officials for people to vote in the legislative elections, turnout was the lowest since the advent of multiparty democracy, at 35.4% (compared to 43.0% in 2012), reflective of the mood of apathy which pervades the Algerian political consciousness.
This is especially prevalent among youth voters, which represent a significant swathe of the population with half of Algerians under the age of 30.
While turnout will have disappointed FLN Secretary General Djamal Ould Abbas, who predicted over 50.0%, we expect little to change for as long as President Abdelaziz Bouteflika remains in power and the prospect of real political change remains slim.
Elections in Algeria are perceived more as a process by which the government grants itself legitimacy – hence the repeated worries over turnout – rather than a way for voters to influence policy.
Government Will Go Gently With Austerity Drive
Voter apathy amongst the youth will continue to play in favour of the ruling coalition, given that older voters are more likely to support it, and this will be particularly important as 2019 presidential elections approach.
President Bouteflika and the FLN's association with the stability and prosperity which followed Algeria's bloody civil war of the 1990s will ensure that older voters will continue to vote for the ruling coalition, especially given the turmoil which has been seen in other regional states following the Arab Spring uprisings of 2011.
However, with one in three potential youth voters unemployed, the government will look to shore up support through ensuring that itsfiscal consolidation programme is not overly deleterious to living conditions (see 'Stability To Prevail For Now, But Longer-Term Risks Significant', February 8).
The coalition saw its share of seats won in the May legislative elections fall from 63.0% in 2012 to 56.0%, while the FLN lost a quarter of its seats.
Islamist Support Will Remain Marginal
The poor performance of Islamist parties in the legislative elections demonstrates that Algerian voters remain wary with regards to Salafist politics – advocating a more austere interpretation of political Islam – and we expect that given a choice between the status quo of limited political freedoms, or voting for religious parties, they will lean towards stability under the current government.
The Islamist coalition, comprised of the Mouvement de la Société pour la Paix and the Front National Algérien, garnered only 33 seats, compared to the 47 seats won by the Islamist Alliance de l'Algérie Verte in 2012.
Longer-Term Risks Remain Salient
While we see little immediate change, longer-term political risks are elevated in Algeria, especially with government fiscal revenues set to remain constrained by continued low oil prices.
Our Oil & Gas team forecasts that Brent crude will remain well below the levels seen during the commodity boom years, meaning that the government could run out of resources needed to fund its costly welfare programmes.
Reform to its subsidy programme is crucial but if the government is seen to be breaching the social contract between the ruling elite and the people then some movement on political freedoms will become essential if to prevent rising unrest.
As a result, the government will tread lightly with its austerity measures, and will seek to soften their impact upon the poor as far as possible through running through reserves and ramping up debt.