Why Algeria is poorer in 2022 compared with 2011

Why Algeria is poorer in 2022 compared with 2011

Algeria’s energy minister Mohamed Argab, faithful to his regime’s policy of manipulating public opinion by telling half-truths, said his country’s hydrocarbons exports would increase 45% year-on-year to 50 billion dollars in 2022.

The Algerian minister is comparing a year in which barrel prices rose to 123 dollars per barrel with 2021 in which the average price was 70 dollars as the world economy started shaking off Covid-19 dust.

He had better compare Algeria’s oil and gas revenues in 2022 with those made in 2011, a comparable year where barrel price stood at an average 110 dollars.

In 2011, Algeria made 71 billion dollars of hydrocarbon revenue which helped the authoritarian regime of Bouteflika buy social peace and maintain an economy based on rent-distribution.

Argab, keen on disinformation and manipulating public opinion, preferred to focus on the value of exports instead of the volume which explains the discrepancy between the exports of 2011 and those of 2022.

In 2011, Algeria produced 1.6 million barrels daily compared to some 900,000 currently. Bearing in mind that some 50% of this output is used in the domestic market, this leaves Algeria with diminishing exporting capacities, a fact that further undermines its position in OPEC and casts a shadow on the country’s status as an oil exporting country.

In terms of gas, Algeria’s exporting capacity dropped from 145 cubic meters in 2011 to 132 cubic meters currently, of which some 60% is consumed in the domestic market.

Algerian authorities have also announced expectations of 17 billion dollars of trade surplus this year, a figure they sell as an achievement to a population that has been hit by shortages due to import bans.

That same trade surplus figure is barely enough to cover the cost of subsidies of foodstuff, housing and other cash distribution measures taken by a regime intent on buying social peace at the expense of undermining prospects for economic diversification.

It is worth mentioning that Algeria is one of the few countries on earth whose GDP per capita has declined in recent years in tandem with the decline in energy prices.

The decline of export capacity of Algeria is met with artificial reforms that keep Algeria as a closed country and economy ruled by an opaque military regime whose members have a vested interest in the authoritarian and rentier economy status quo.

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