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Algeria’s Second Arab Spring?

Since February, the long-entrenched regime of Algerian President Abdelaziz Bouteflika has been beset by mass protests and demands for economic and political liberalization. The potent mix of anger and hope fueling the demonstrations suggests that the country's elite erred in slow-rolling earlier reforms.

PARIS – A sustained popular revolt by the Algerian people is demonstrating that economic-policy myopia in the face of significant national challenges can pose serious risks to a regime’s survival.

Algerian President Abdelaziz Bouteflika’s regime has largely itself to blame for the country’s weak economy. As of the late 2000s, expanded state spending, financed by rising oil revenues, had revitalized the economy, following the devastating civil war of the 1990s. But after the 2011 Arab Spring, state expenditures shot up further, and then increased again in 2014, during Bouteflika’s fourth successful election campaign.

The government’s patronage extravaganza came at a time when the budget was already in deficit. Then the bottom fell out from oil prices. Since then, with annual consumption subsidies costing the equivalent of one-quarter of the economy’s output, Algeria’s fiscal and external deficits have exploded to 15% of GDP.

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