Bouteflika’s attempts to stay in power bode ill for Algeria



When Abdelaziz Bouteflika returned to Algeria from Paris in July, following an absence of three months due to a mini-stroke he suffered in April, the world discovered that the 76-year-old president was using a wheelchair. The image had a strong political significance.

Many observers had thought that Mr Bouteflika’s former plan to amend the constitution and run for a fourth term was a thing of the past. Many were wondering whether he was physically able to govern, or who his successor would be. Then, without warning, the position moved from one where Mr Bouteflika was hors de combat, out of the game and about to be impeached for medical reasons according to Article 88 of the Algerian constitution, to the position where he is getting ready to run for a fourth term.

Mr Bouteflika, who is still recovering and who occasionally meets with the prime minister and the deputy minister of defence in his dressing gown, announced his return with stamina. He reshuffled the cabinet, restructured the intelligence services (known as the DRS) and is poised to remain in power and safeguard the interests of his rentier clan and clientele.

It should be noted that Mr Bouteflika was brought in by the army to save the system. And he got full support from the DRS throughout his terms. Now that he has pulled the rug from under the most powerful of Algeria’s generals, Mohamed Mediene (more often known as Tawfik), who heads the much-feared security services, the common people in Algeria are puzzled. They feel that these “done deals” that are kept away from them could present a real nightmare for the country, because the cabinet reshuffle has been designed to consolidate the authoritarian nature of the regime.

By imposing a close ally, General Salah Gaid, as the army’s chief of staff, Mr Bouteflika has become the key power broker in the country. And as in 2008, when he amended the constitution to remove the two-term limit, he is now mapping the road to another term in office. Though his 2008 amended constitution prohibits “feudal practices, regionalism and nepotism”, the key ministers he has recently appointed are all from his parents’ home region of Tlemcen.

It is obvious that Mr Bouteflika wants to keep his “kingdom” until his last breath. And many observers believe he is now propping up his brother Said Bouteflika to succeed him. But what Mr Bouteflika does not seem to notice is that the international and regional political context driven by the Arab revolts has changed. He should allow for a process that leads to a real transition, instead of essentially turning Algeria’s political system into a hereditary one.

The Arab Spring has ordained new rules. Arabs and Berbers have made it clear that eternal and exclusivist presidents are undesirable. The end of Zine El Abidine Ben Ali, Hosni Mubarak, Ali Abdullah Saleh and even Mohammed Morsi is edifying.

When Mr Bouteflika was sworn in, he took an oath on the Quran to uphold the constitution. And when he felt he was trapped as other Arab presidents were during the apex of the Arab Spring, he promised, in a speech on April 15, 2011, “to implement serious democratic reforms and to allow the opposition access to state media, including radio and television”.

Two years later, his commitments are good for nothing. Algerians still do not have the right to choose their representatives. Elections are rigged. The state-controlled union (the General Union of Algerian Workers, or UGTA) is still run as a mafia. Political parties, unions and associations that do not back the powers that be are subjected to all kinds of pressure. Recently, 16 political parties that were about to hold a public meeting in Algiers to express their opposition to the projected revision of the constitution were refused permission to hold the meeting.

Why does Mr Bouteflika want to cling to power when it is clear that he has failed to get the country going, despite the remarkable foreign-exchange reserves of $190.7 billion (Dh700.4 bn) at his disposal? Commonsense should urge him not to go against an open democratic alternative after a 15-year rule marked by appalling and massive levels of corruption.

In the 1970s and early 1980s, corruption as a phenomenon was of almost no consequence; but with the advent of Mr Bouteflika, corruption has largely been “democratised”. Now it is so widespread that it poses a serious threat to national security.

The latest scandal involving state oil giant Sonatrach is a good example. The former energy minister, and Mr Bouteflika’s very close ally, Chakib Khellil is now sought by Italian authorities. He is suspected of pocketing $1 billion. These days, most foreign businessmen know that the Algerian ruling elite is corrupt.

But it is on the diplomatic front that Algeria has experienced a real debacle. Under Mr Bouteflika, the country has become a mere bystander on the world stage. Ever since he was elected – rather, selected – in 1999, Mr Bouteflika has been the de facto foreign affairs minister. Algeria now plays a minor role in international relations. The country was not engaged in Iraq nor is it now in Syria. Mr Bouteflika was offhand regarding the tragic events in neighbouring Mali. He has made seven trips to Paris and none to the Sahel.

This country, whose glorious war of independence has been a paradigm, has now the dishonourable status of “champion of the war on terror” that Paris is always willing to bestow on the regime. But everyone knows that the Empire’s humanitarian principles are subordinated to its interests. And stability without democracy is not an issue. That is why Mr Bouteflika’s insistence on hijacking the constitution risks eroding the Algerian state.

Dr Abdelkader Cheref is a visiting professor at the State University of New York at Potsdam

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”