Algeria’s President Returns From Covid Care to Fresh Challenges

(Bloomberg) -- Algeria’s president returned from two months abroad receiving treatment for Covid-19 to a country facing a simmering crisis at its western border and more economic uncertainty.

Abdelmadjid Tebboune arrived back in the North African nation late Tuesday, state TV reported, seemingly ending a prolonged absence that had stoked speculation over both his condition and the future political direction of Algeria, which was roiled by protests for much of 2019.

“I praise God for this auspicious return to Algeria,” the 75-year-old said in brief comments to the broadcaster, seated in a reception lounge at Algiers’ airport. He added that he hoped 2021 would be much better than 2020.

Now, the veteran political insider who won an election last December that many boycotted, has two days to sign the 2021 budget bill into law and must soon approve constitutional amendments that were backed in a recent referendum. A possible escalation in the dispute over Western Sahara, a territory that lies to Algeria’s southwest and which Morocco claims sovereignty over, also looms.

The OPEC member state is also grappling with deepening economic troubles, sparked by a decline in oil and gas revenue that threatens further tumult. Algeria’s gross domestic product will contract by as much as 5.5% in real terms this year, its steepest in four decades, according to the International Monetary Fund.

Economic Discontent

Authorities recently took unspecified action to allow Algeria’s currency to depreciate, aiming to address a deteriorating balance of payments by containing demand for imports, a person familiar with the policy told Bloomberg earlier this month. The dinar has declined more than 5% against the euro since mid-November, according to data compiled by Bloomberg.

Economic discontent was one of the drivers of the peaceful demonstrations that began in early 2019 and eventually led to the resignation of Tebboune’s veteran predecessor, Abdelaziz Bouteflika. The so-called Hirak movement pushed on, demanding root-and-branch change in the elite that rules the country, although the pandemic has ended the unrest for now.

The long-running dispute in Western Sahara was given a jolt earlier in December, when the Trump administration announced the U.S. would recognize Morocco’s claim to the territory at the same time as the kingdom pledged to recognize Israel.

Rich in minerals, Western Sahara is larger than the U.K., divided by a vast sand-berm and has been bitterly contested since its 1975 annexation by Morocco after the withdrawal of ex-colonial power Spain.

Sporadic fighting between Morocco and the rebel group known as the Polisario Front claimed about 9,000 lives over 16 years before a United Nations-brokered 1991 cease-fire that largely held until November, when Moroccan forces dispersed a protest at a key border crossing. Polisario has since claimed sporadic attacks on Moroccan outposts.

Algeria provides diplomatic support to Polisario and local media has recently upped the rhetoric on the issue, even as some Arab nations such as the UAE have signaled support for Morocco. There has been little official word out of Algiers on its next step, although a conflict between Morocco and Algeria is thought deeply unlikely. The UN has said it remains committed to a long-delayed referendum on the territory’s status.

©2020 Bloomberg L.P.