As concern grows about the political and economic future of Algeria, the government has been funding the $1 billion building of the world’s tallest minaret 870 feet high into the sky. According to an Algerian urban affairs official, President Abdelaziz Bouteflika described the project as a “monument to Islam” and to the war of independence from France. Several local political analysts have interpreted Bouteflika’s support through the national agency Anargema as a way to appease radicals and divert people’s attention from growing economic difficulties.
“The national economy is indeed living the consequences of the (oil) external shock since mid-2014,” said Algeria’s central banker Mohamed Laksaci. Like Brazilian or Russian counterparts, the Algerian dinar lost a large portion of its value against the US dollar but it’s not up to the central bank to change the laws of economics, added Laksaci. Several representatives accused the black market of being largely responsible for the sharp drop in Algeria’s foreign exchange reserves, currently worth just 2 years of importations.
As a result, Laksaci’s words could translate what many have considered as being inertia on behalf of top political leaders that could hinder Algeria’s economic dynamism and diversification, all this amidst a widening gap between the Popular National Assembly and the government. Yet the government has adopted politically-risky austerity measures and Prime Minister Abdelmalek Sellal has actively marketed “Algeria’s industrial renewal” to US business leaders lately.
Overall, the devaluation of the dinar hasn’t brought expected economic development and the Algerian economy has stalled in an outdated 1970s posture, wrote Algerian economist Abderrahmane Mebtoul who advised Algerian leaders to visit China “to see how this country has adapted to globalization.” Given that a bullish reversal for prices of both oil and natural gas seems unlikely, the simultaneous continuation of political, security and economic issues still has the potential to trigger a deeper crisis in Algeria, with serious consequences outside its shores.