Monday, April 15, 2013
Algeria Facing the Oil Curse
On Thursday April 11th, Al Arabiya reported that violence has continued in southern Algeria for the second day in a row. The reason is that protests are occurring in response to false promises made the government. Southern Algeria is a poor region despite being rich in oil. The unemployed youth are the ones protesting not receiving the benefits that the government has promised. The problem resides in the fact that they are not being employed but they are also not being taken cared of.
These protests are a recurring issue. Earlier in March, Yahoo news reported riots happening in the same region for the same reasons: unemployment and lack of trust in the government. According to the CIA fact book 30% of Algeria's GDP is derived from oil production and constitutes 95% of the country's export earnings. The country is also a member of
OPEC and the world's 6th largest producer. The economy relies heavily on oil production and the jobs require technical knowledge that the youths in the southern region do not possess. They are not educated in that capacity and have to resort to lower level jobs or unemployment.
In order to quell the unrest of unemployment the government has resorted to using social bribes, promising housing and other types of aid. The problem with this is that they are not providing enough to satiate growing unrest and are falling through with promises facilitating mistrust.
Last week we learn about the oil curse. In the case of Algeria, we see how social benefits are being used to cover up the real problem of unemployment. However, Algeria isn't even distributing social benefits reliably. Algeria is not addressing either problem effectively. There is no employment and no social benefits for everyone.
Why should we care? As protest and violence continue, we can expect for Algeria to be another conflict hotspot in Africa. Violence in this region presents concerns for intervention and repercussions of an OPEC country going through turmoil affects oil production and prices. Whenever oil is in danger, more concern is given to that country which can lead to 3rd party countries meddling in Algeria.
My recommendation for policy is to address one issue or the other wholeheartedly instead of doing two things half way. Policy makers in Algeria should work on education reform to better train students for jobs in the oil industry. Or on the other hand, Algeria should devote more money to social benefits so that the unemployed can receive the benefits they are being promised.