It has been painfully apparent to many Algerians for years. Now a report has confirmed that price rises are dramatically outstripping any increase in household income.
Although the country has one of the region's most generous subsidy systems, inflation has led to the Algerian Dinar losing half of its purchasing power over the past decade, said the report published in early September by Algerian consumer rights group Apoce.
Lentils, a staple, have increased from 100 dinars per kilogram 10 years ago to 250 dinars in 2021. Equally, a kilo of rice that sold for 80 Dinars in 2010 is now marketed at 150 Dinars.
Most significantly for the oil and gas-based economy, petrol has increased from 19 dinars a litre in 2010 to 45 dinars today, doubling transportation costs.
'Lots of people are suffering'
In May last year, the country increased its basic minimum wage for the first time in eight years from 18,000 to 20,000 Dinars, (around $170).
“The situation in Algeria is disastrous economically,” said Saied, an engineer from Constantine, in the north-east. “Lot of people are suffering. Buying a car for example has become impossible (for) the majority of the population.”
Saied also pointed to the everyday difficulties of balancing food budgets or providing a typical family with a healthy meal. He said 1kg of meat or fish was around 10 per cent of the minimum wage.
For decades, Algeria has relied almost exclusively on oil and gas exports to power its economy. However, the dramatic fall in revenue that began in 2014 swept away many of the economy's foundation stones and continues to gnaw away at its ability to fund its subsidy programme.
The government doesn't bother explaining it to the population ... they only blame somebody else
Algerian journalist Akram Kharief
At the time of the crash, Algeria's robust foreign currency reserves were able to absorb much of the shock. But now, with foreign currency reserves standing at around US$44 billion, a fraction of their 2013 levels, the peace of mind they once bought is looking increasingly costly. And given the cost of fuel, gas, gas-based electricity and imported food are increasing while the private sector remains underdeveloped, foreign currency reserves are unlikely to buck their downwards trend.
This could compel Algeria to seek external debt, a decision seen by parts of the establishment as a violation of sovereignty. Further complicating matters has been the Algerian state’s tendency to print more and more dinars, especially since 2017, a policy that can only prove inflationary.
Algerian journalist Akram Kharief said little government time was given to explaining the fundamental structural challenges facing the economy.
“No, the government doesn't bother explaining it to the population. When it comes to major crises, they only blame somebody else. Now for instance they are blaming (former president, Abdelaziz) Bouteflika or Morocco for that,” he said, referring to the regional rival with whom Algeria severed all diplomatic relations in August.
From independence to the modern-day, the shifting opaque group of military officials, trade unionists and businessmen surrounding the presidency – known collectively as the pouvoir – has steered the country and its economy through civil war and hydrocarbon-subsidised boom. However, since the oil crash of 2014, the group's half-hearted attempts to diversify the economy, including a tepid attempt at drawing in tourists, have foundered.
There is also the unbridled emphasis on military spending, which conjures up parallels with the last decade of the Soviet Union. Algeria, which already has one of the largest military budgets in the region despite its tanking economy, is understood to be negotiating a further $7 billion purchase of arms from Russia.
“The huge military spending currently envisaged is woefully out of synch with Algeria’s overall situation,” said Jalel Harchaoui, a senior fellow at Global Initiative.
“But even apart from this problem of lavish defence buying, the issue of the oligarchs’ stranglehold on the economy remains unaddressed.
“It may sound ironic given the (mass protest movement) Hirak has been demanding that all government-linked elites be removed. In reality, only a few of the most visible figures have been in trouble since February 2019,” he said, alluding to one of the main reasons no overhaul of the Algerian economy is being undertaken.
For now at least, a precarious sense of calm appears to hold with regard to Algiers’s finances. From a fiscal perspective, last year turned out to be brutal and painful. But the worst was still avoided thanks largely to an increase in gas production in late 2020 against a backdrop of a rally in hydrocarbon prices, Mr Harchaoui said. And this year, hydrocarbon prices are holding up.
Nevertheless, with its currency reserves facing the very real possibility of being depleted entirely within the next year or two, there are signs that Algeria may finally be compelled to break with years of proclaimed opposition to what many in the Algiers establishment see as a concession on sovereignty. The anti-IMF rhetoric, which has been a pillar of Algerian policy for two decades, is fast becoming unsustainable.
External debt is arguably unavoidable.
“Talks have been going on quietly with the IMF (International Monetary Fund) for some time,” Mr Harchaoui said.
As Algeria's neighbour, Tunisia, continues to discover, the conditions attached to hard-currency loans often have a high domestic and social cost.
“With domestic consumption of oil and gas continually rising, there's an expectation that the IMF will demand to see the Algerian population pay the true market price for the fuel it consumes,” Mr Harchaoui said, pointing to another reason for Algeria's creeping fuel costs, a substantial chunk of household expenses.
Further evidence that Algeria is seeking hard-currency loans came in August, when Algeria signalled it was ready to join the European Bank for Reconstruction and Development in return for external funding.
Whatever happens in Algeria, economics are unlikely to secure the kind of social cohesion the pouvoir has craved for years.
The mass protests that once dominated city streets across the country may have gone, but no warming to the government has flourished in its absence.
How an angry and distrustful population will react to further economic hardship remains the key test for any government.
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Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Mohammed bin Zayed Majlis
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
BABYLON
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
THE SPECS
Engine: 1.6-litre turbo
Transmission: six-speed automatic
Power: 165hp
Torque: 240Nm
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Killing of Qassem Suleimani
MATCH INFO
Inter Milan 2 (Vecino 65', Barella 83')
Verona 1 (Verre 19' pen)
KILLING OF QASSEM SULEIMANI
THE SPECS
Engine: 1.5-litre
Transmission: 6-speed automatic
Power: 110 horsepower
Torque: 147Nm
Price: From Dh59,700
On sale: now
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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More from Rashmee Roshan Lall
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
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The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
The Outsider
Stephen King, Penguin
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Profile
Name: Carzaty
Founders: Marwan Chaar and Hassan Jaffar
Launched: 2017
Employees: 22
Based: Dubai and Muscat
Sector: Automobile retail
Funding to date: $5.5 million
The five pillars of Islam
Fire and Fury
By Michael Wolff,
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