Why A New Civil War Is Looming Over Algeria As State Coffers Empty

Photo Credit: GRI

A bleak economic outlook and years of falling oil prices have set the stage for popular unrest in Algeria. The country also faces major security challenges, including the presence of terrorist groups, porous borders, and the threat of contagion from neighbouring Libya and Mali. This GRI Special Report looks at how the situation reached a crisis point, and where it is heading.

The oil crisis

Algeria invested heavily in its oil and gas industry in an effort to grow its exports to Europe, which represent 97% of its export revenues and 60% of the state budget. Then the oil price began to fall on world markets – with devastating consequences. Algiers lost 30% of its total budget, and in 2015 was forced to implement austerity measures for the first time. To soften the blow, the government decided to use the national sovereign fund to balance the budget, but after two more years

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