Algerian intellectuals like to spin a narrative in the smokey cafés of the graciously rotting capital. In hushed tones, they tell of the bright, ambitious elites who left the coastal cities for the densely forested mountains to fight against the French occupiers in the 1950s. But the commanders rebuffed the clever young men, dispatching them instead to Paris, Lyon or Lille to finish their studies and prepare for the day when the French would head home and they would run the country.

In Europe, they were recruited into one of several secretive Algerian exile groups that connived against each other and fought bloody internecine wars. Once the French left, the young men returned home trained not to run the country but to build the sophisticated security networks that run Algeria’s foreign and domestic affairs and, critics say, prevent it from making progress.

“In Algeria, power likes to hide,” says a political scientist in Algiers. “The military and security forces have come to the conviction that they have to work in a hidden way, that they have to practise power but never in the light, and they try to resolve all domestic and international problems using secret services rather than going through public institutions.”

The intellectuals’ story of the origins of the old men who run Algeria goes some way towards explaining the intensity with which the country’s murky elite remain absorbed in their own power games. It also explains why such a wealthy and vast country is unable to break from its history, build on its energy revenues and take a leadership role in the region.

Algeria’s generals and security forces won a brutal 1990s civil war in which hundreds of thousands of people were killed. Although traumatised by its past, the nation of 36 million has grown more stable and prosperous, thanks to booming energy revenues and is the third largest gas supplier to Europe. But Africa’s biggest country remains a giant afraid of its own shadow. Its complex, hidden and fragmented leadership remains risk-averse, unable to forge any consensus to build a strategic vision for the country and provide security leadership for the region.

When faced with demonstrations amid the revolts that swept the Arab world, segments of the leadership have appeared more concerned with protecting their own fiefdoms in the Opec state than addressing a deep socioeconomic malaise.

This is a time bomb. The country’s leaders have left the economy in tatters. Its antiquated and state-dominated banking system continues to pump money into government enterprises, subsidising company income by up to 40 per cent, according to the International Monetary Fund. Unemployment remains high. Among the young, it is officially recorded at 21.5 per cent but many analysts put it much higher. Poverty is still widespread outside a few urban areas.

Abroad, Algeria’s seeming ambivalence to taking up a leading regional role was highlighted this year during a French-led intervention to dislodge militants from neighbouring northern Mali. Despite requests for help from officials in Bamako, the Malian capital, and widespread domestic criticism, Algiers remained on the sidelines, even after militants stormed a gas plant in the country’s southwest and killed dozens of expatriate and local workers. Instead it opted for negotiations with militants that ultimately failed.

Algeria’s position and sudden prominence illustrates just how significantly the security and political architecture of the region has changed following the uprisings of the Arab spring. Security and leadership vacuums have appeared in large parts of the Middle East and north Africa, and participants, such as Algeria, Qatar and Turkey, have been compelled to play a greater role. Two years after the uprisings, the stability and security that characterised much of north Africa since the late 1990s has disappeared. While Libya, Tunisia, Egypt, Mali and Mauritania roil in political instability, much of the Mediterranean basin — including Greece, Cyprus, Italy and Spain — is mired in economic crisis.

With more than $200 billion (Dh734 billion) in foreign reserves, a powerful and well-trained military, a relatively well-educated population, as well as oil and gas, Algeria is one of the strongest and richest nations in Africa. But it is reluctant to use its large reserves to gain economic advantage, in the way Qatar has been buying up north African companies. Algeria’s few big foreign deals outside of the energy sector appear designed to appease local powers.

Critics and analysts say the leadership has mismanaged big investment projects, seeking to appease vested interests rather than boost the broader national economy. The authorities dropped talks for a 70,000-vehicle-a-year Volkswagen plant in the capital and opted for a Renault plant in the second city of Oran that critics say will have little chance of competing against the French carmaker’s big Tangiers plant in nearby Morocco.

A healthy but small private sector is expanding in Algeria but analysts say it is often held back by powerful and well-connected oligarchs with military ties jealously guarding their turf from encroachment. “One day I had a dinner with the son-in-law of a former general turned businessman,” says Rabah Boucetta, an opposition activist. “I asked him: ‘Why don’t you invest the money you make here instead of abroad?’ He said to me: “Would you trust these guys?’”

Those in positions of power often have little incentive to propose new ideas to help the country emerge from the economic doldrums, say critics and even government officials.

At a recent conference on sustainable energy, international oil industry executives gaped as high-level officials took to the podium and merely listed the country’s environmental laws instead of presenting speeches. One insider explained that the officials were nervous that their remarks could be taken out of context and used against them within the country’s treacherous turf battles. Similar factional infighting often stifles jobs initiatives, foreign investment outside the energy sector, and tourism expansion along 1,300 kilometres of extraordinary Mediterranean coastline.

The country’s leadership, under President Abdul Aziz Bouteflika for the past 14 years, has been likened to a white-knuckled driver gripping the steering-wheel, eyes fixed on the rear-view mirror, unable to focus on problems ahead. Those problems include the growth of Islamist radicals in neighbouring countries and an over-dependence on hydrocarbons. Inflows from foreign direct investors, who can only hold 49 per cent of a local business, fell 15 per cent last year.

“Algeria is very wealthy, the population is young, the people dynamic,” says Ihsane Al Kadi, editor of the business website Emergent Maghreb. “But Bouteflika is stuck in a very old doctrine: that Algeria should not interfere anywhere, especially with neighbouring countries. Economically, they manage the country like an elderly lady. The leadership is not comfortable with the role of leader, even if that’s the role for Algeria.”

Western politicians have begun prodding Algeria to use its economic capacity, military power and relative domestic political legitimacy to take up a more prominent position, perhaps similar to that of Iran under the Shah in the 1960s and 1970s. In recent months Hillary Clinton, then American secretary of state, and David Cameron, British prime minister, have both visited Algiers to beseech it to take a more active regional stance. “They don’t like it if you tell them, ‘you’re the key’,” a Western diplomat says. “They say we’re the key. But the truth is they are a key player in the Sahel and the Maghreb. And we would like them to do more.”

But Algeria’s experience of throwing off the French yoke and the subsequent years of French influence makes it sensitive to state sovereignty, even as issues such as terrorism, human trafficking, drug and arms smuggling, drought and ecological degradation increasingly take on a transnational character. “The authorities constantly say it is a principle of Algeria not to interfere in the affairs of other countries, even when public opinion is opposed,” says Kamal Chirazi, an Algerian journalist.

The trauma of the devastating 1990s civil war, which pitted secular generals against Islamist radicals, contributes to a sense that the country is living on borrowed time. Hundreds of thousands died in the conflict, with little or no accounting yet as to who committed which atrocity. Some say it will take a new generation of leaders to change the country’s ways.

“While the leaders don’t get enough credit for settling peace and security since the 1990s, Algeria is still psychologically scarred by that period,” says a Western diplomat in Algiers. “The mindset is safety-first. They’re not going to open up too fast.”

Although the country managed to weather the Arab Spring, protests did erupt and continue to break out over local issues. The leadership is jittery. The government, which still carries the banners of anti-imperialism and whose ministers occasionally decry the dominion of the West over the global south, denied entry to a group of activists for a planning meeting ahead of the Global Social Forum — an annual get-together of socialist, environmentalist, indigenous rights and women’s groups that was held in Tunis. On the eve of the Tunis conference, Algeria barred 96 of its own civil society activists from leaving the country to attend.

“This is a country that deploys 30,000 police at a football match,” one human rights activist says. “It’s not a confident regime that’s going to take the world stage.”

Their few recent foreign-policy gambits have been failures, critics say. Sticking to its doctrine of non-interference, it stayed quiet on the uprisings in neighbouring Tunisia and Egypt and stood by Libyan leader Muammar Gaddafi until the very end. Algeria has been one of the few countries in the Arab League that has been reluctant to back the Syrian opposition.

“You should not forget that it’s the weakness of all the other powers that contributed in making Algeria emerge as a powerful nation,” says Mohammad Mokeddem, the co-owner of a television station and newspaper called Ennahar. “And I think it’s just for a period. Because economically, nothing has changed. We’re still living in socialism.”

Mokeddem has a chilling warning for those in power who are unable to change their ways: “Algeria is becoming more and more like a Pakistan — a military ally for the West in the fight against terrorism, but not much else.”

–Financial Times


Spymaster: The power that lurks in the background

He is the man with no face and, even when he appears at grandstands to survey military parades, Algerian journalists know enough not to photograph General Mohammad Mediene, the head of the country’s Directorate for Intelligence and Security.

Known by the nom de guerre General Toufik, he is regarded as the longest-serving spymaster in the world. His role in overseeing Algeria’s affairs is being debated as the country prepares for elections next year that could see long-time President Abdul Aziz Bouteflika, 76 years old and seemingly frail, pass power to a new generation.

General Mediene is one of the paradoxes of a country that seems to have all the trappings of democracy, including regular elections and a lively press, but where important decisions seem to be taken by unknown men behind the shadows: the infamous pouvoir.

The bifurcated system was on display for the world to see during the deadly attack by militants on a gas facility last year. Ministers were either invisible or struggling to glean facts while security officials launched a highly controversial counter-attack and leaked their feats to media outlets.

“The complexity in Algeria is the identity of the real decision-makers,” says Rabah Boucetta, an opposition activist. “The people who have been elected have been elected. But those who have power are invisible. The power is not represented by one power. It is represented by a system with two poles: the president and the security forces. These two sides are composed of distinct regional tribal relations with clientele bases.”

Despite his faults, many praise Bouteflika as the president who managed to cajole the generals back to the barracks after they cancelled a 1992 election that Islamists were set to win and ignited a bloody civil war.

One strident critic of the president acknowledged that “many people like Bouteflika or at least understand the things that he did”.

His potential departure has raised hopes that the country will advance economically and politically. But there are fears that those in the shadows could advance their agendas, which include domination of an economy hampered by corruption, state control and import oligarchies.

The question of who wields power is murky. The system is so opaque some analysts and diplomats reject entirely the premise that generals, such as General Mediene, still call the shots.

“Power has changed in Algeria,” says Ghania Oukazi, a writer at the newspaper Quotidien d’Oran. “All the generals are very old, a lot have already died. Those who are still alive are retired. They like it when we talk about them having so much power.”