Algerian Businesses Turn Back on Ailing Dictator

Algerian Businesses Turn Back on Ailing Dictator

A woman covers her face with the national flag, as Algerian protesters demonstrate in the capital Algiers against ailing president's bid for a fifth term. Tens of thousands protested across Algeria today in the biggest rallies yet against ailing President Abdelaziz Bouteflika's bid for a fifth term, despite the defiant leader's warning of the risk of 'chaos'.

SourceRYAD KRAMDI/AFP/Getty

Why you should care

Algerian businesses have long backed President Abdelaziz Bouteflika. Now they’re beginning to shift allegiances.  

Leading entrepreneurs are defecting from Algeria’s main business association in a sign of emerging cracks in the support base of Abdelaziz Bouteflika, the country’s ailing president. Plans for the 82-year-old, currently receiving treatment in a Swiss hospital, to serve a fifth term in office have provoked the largest demonstrations in the North African country in decades.

Algerians fear that their near-invisible president, who was paralyzed by a stroke in 2013 and has not been heard speaking since, is being used as a facade by an opaque group of power brokers to maintain control and protect their political and economic interests.

Mohamed Laid Benamor, vice president of the Forum des Chefs d’Entreprises (FCE), the body that represents private companies, recently quit the association and said it was wrong to go “against the wishes of our fellow citizens” who have taken to the streets. Another to jump ship was Mohamed Arezki Aberkane, president of the Sogemetal aluminum company, who wrote in a letter circulated in the Algerian press that he could not remain part of a group that “condemns and holds in contempt a whole people who are expressing freely and with dignity their demands.” The FCE is led by Ali Haddad, a construction tycoon who is a close ally of Bouteflika.

I think if we have [political] change there will be a witch hunt against people who supported Bouteflika.

Nadir Abderrahim, general manager, IMC

Nadir Abderrahim, general manager of IMC, a manufacturer of surgical supplies, says many FCE members oppose Haddad and are seeking to have him replaced.

“They want to change him because he used the association for political reasons to support the current president,” Abderrahim says as he warned of retribution if the demonstrators are successful. “I think if we have [political] change there will be a witch hunt against people who supported Bouteflika.”

In addition to his construction company, Haddad owns a recently opened factory producing steel pipes and has plans to set up two cement plants and a steel mill. His business empire also includes a private satellite station and a football team.

The Algerian economy is state-dominated, but Bouteflika has sponsored an emerging private sector, parts of which have grown rich as a result of the billions of petrodollars poured into a massive public works program. This has transformed the face of the gas-rich country of 40 million people with roads and new houses, even though it has failed to create a diversified economy capable of keeping up with the demand for jobs from a predominantly young population.

Businessmen have been one of the biggest interest groups behind Bouteflika. As oil prices fell in 2014, squeezing Algeria’s public finances, the government curtailed imports, boosting the domestic private sector. Protections extended to local industries include tax holidays, access to foreign currency at the official rate, subsidized energy and credit from state-owned banks.

Abderrahim says businessmen supportive of another term for the president were seeking to preserve the advantages they enjoyed, which have led some to speedy success and big fortunes. “If you build a company or a project in the U.S. or Europe, it takes five to 10 years to succeed. But here in Algeria, you see some starting today, and in three years, they are a major company,” he says.

To enjoy those benefits, however, loyalty to Bouteflika has been a precondition. Those critical of the president such as Issad Rebrab, founder and president of the Cevital industrial group and one of Algeria’s biggest entrepreneurs, have run into problems and complications.

Rebrab, who marched with the protesters last week, has been complaining loudly that his businesses face hurdles and delays placed in its path by the authorities. “Like all Algerians, our energies have to be devoted to bringing forth a new Algeria, free and democratic,” he wrote in a message to workers.

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By Heba Saleh

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