Africa

by Guy Arnold

  Negotiations for the nationalization of the oil companies were conducted with France through 1971 and on 24 February the foreign minister, Abdelaziz Bouteflika, insisted that the state would take a 51 per cent stake in the companies at once while natural gas deposits and pipelines were to be fully nationalized. Then, on 13 April, there was a second sharp increase in the tax reference price to US$3.60 a barrel (15 cents a barrel higher than the price negotiated that March by Libya). Compensation for French companies was set at US$100 million, only a third of what they had been demanding. In May, therefore, French companies ceased operations in Algeria and withdrew key personnel. However, on 30 June France’s CFP and Algeria’s national oil corporation Sonatrach signed a 10-year agreement by whose terms Compagnie Française des Petroles (CFP) became a 49 per cent shareholder in Sonatrach. In 1970 Sonatrach exported 9.8 million tons of oil with Germany (4.5 million tons), Brazil (1.6 million tons) and Italy (1.3 million tons) its leading customers. A series of decrees restricted the activities of foreign companies and laid down that from then on only Sonatrach could explore and exploit new finds. At the height of the negotiations with France Boumedienne broadcast over Radio Algeria. He said that he had announced on 24 February that his government would guarantee the provision of oil to France following nationalization. Some French media had responded by claiming they did not trust Algeria to keep its word and had demanded compensation before nationalization. To this Boumedienne replied precisely and clearly to insist that the relationship had to be equal:

  The idea of compensation before nationalisation is therefore fallacious. More important still is the fact that, having personally announced, in the name of the Revolution Command and the Algerian people, that we were prepared to compensate, I now find that today some French circles say: We do not trust these words. If they do not trust the decisions of our country, then they preclude any co-operation between us.

  There are other issues besides that of oil. If the French side is really interested in the question of oil, we are just as interested in other questions such as that of our workers abroad; their rights must be preserved and they must be respected. There are other interests such as our exports to the French market; this question must be taken into consideration. There are also the questions of cultural and technical co-operation between Algeria and France: these must be clarified.1

  There was further friction with France over the treatment of French nationals in Algeria and Algerians in France while the Algerian press was highly critical of the late Gen. de Gaulle and of French policies towards its former African colonies. Throughout these fraught negotiations Boumedienne, skilfully, always talked of future co-operation between the two countries. He was not aiming for a complete break with France but for a fresh and precise definition of their two-way relationship. His aim was to bring an end to the privileged relationship that existed between the two countries since this gave too many advantages to France. Broadly, Boumedienne succeeded in this objective and then turned his attention to the creation of more positive Algerian policies with its Maghreb neighbours. Over the issue of Palestine he was always a hard-liner opposed to any concessions to Israel. Although relations with Africa to the south came very much second to those with the Arab world, Boumedienne had a number of meetings with heads of state from the south including Nigeria, Niger and Cameroon.

  On 14 July 1971 the Council of Revolution announced a programme of agrarian reform to include the enclosure of herds, the formation of forestry and alfalfa production units and the elimination of private ownership of water. Large estates were to be abolished and the property of absentee landlords was to be nationalized. Land was to be distributed to landless peasants but in such a way as to allow the maximum use of machinery while avoiding the division of the land into small unviable units. Commenting on this proposed agrarian revolution, Boumedienne said the aim of the revolution was less concerned with the distribution of land and the limitation of ownership than with the creation of good conditions and the full exploitation of the land. Limitation of ownership did not mean ending private ownership but rather working to achieve equality of living standards among sections of the people, abolishing imbalance in individual incomes, providing full employment, and bringing education, medical treatment and social services within the reach of all citizens.

  The agrarian revolution dominated government action during 1972. President Boumedienne said the government had waited 10 years to start the revolution so as to prepare the conditions for its success, including the availability of the necessary machinery and personnel. The aim was to increase the irrigated area of land from 300,000 hectares to 500,000 by the end of the decade.

  Changing the increasingly static and corrupt FLN proved far more difficult. On 15 December Kaid Ahmed resigned as head of the FLN; he had been head of the party since 1967 but had been unable to win support for it among young intellectuals, students or trade unionists. On the education front schools were unable to keep pace with the population explosion: there were two million children in school in 1972 as opposed to a mere 8,000 (apart from Europeans) in 1963 and by 1972 25 per cent of the national budget was allocated to education. Foreign trade reached a figure of US$3,000 million during the year and US$2,000 million of it or 70 per cent was with the EEC. At the time Algeria was investigating the possibility of associate membership. In a typical response the EEC offered customs exemption for crude oil and natural gas with no limit on quantity but wanted to restrict imports of refined petroleum to 240,000 tons a year, which Algeria regarded as unacceptably low. Algeria had increased its refined capacity from 2.5 million tons in 1968 to an expected 4 million tons by 1973. There were two liquid natural gas (LNG) plants under construction. Targets were being set for every aspect of economic growth. The demand for steel had increased from 300,000 tons in 1968 to 700,000 tons by 1973 while Algerian production of steel was expected to reach 430,000 tons in 1973. Projects due for completion during this hectic year included a tractor and engine factory, a foundry, a wool complex, a textile thread plant and the doubling of the textile complex at Batra. Other developments covered cement, phosphate fertilizer and paper. By 1972 Algeria had come to be viewed as a hard left country in relation to its revolution and its relations with France, in its attitudes to Israel and the Palestine question, in its support for African liberation movements and its reactions to British policies towards Rhodesia and South Africa. It was to play a leading role in North-South relations during 1973.

  Algeria played host to both the Non-Aligned Summit of September 1973 and the Arab Summit of November and on both occasions Boumedienne took the opportunity to emphasize his theme that economic independence must precede political independence and he was tireless in calling for both Algeria and the Arab world to take control of their economies. Speaking on Egyptian television on 19 August Boumedienne said: ‘The rise of the Arab nation will never… be completed unless we all proceed towards internal construction… It is up to us first of all to ensure control of oil and gas.’ Algeria sent two squadrons of combat aircraft to the Yom Kippur War – they reached the front on 7 October – and half a brigade of tanks to Egypt. By hosting the Sixth Arab Summit that November as well as by his prompt support for the Yom Kippur War Boumedienne greatly enhanced his prestige both among Arab states and more generally. The Non-Aligned Conference, attended by 57 heads of state and 105 delegations, was also a triumph for Boumedienne who came to be seen during this year as a formidable spokesman for the Third World. At this conference he pressed his view that the main division in the world was between the industrialized powers and the Third World. He warned that a détente between the Soviet Union and the United States threatened to become a source of tension in the relations between the privileged world and the rest of humanity (he was 20 years ahead of events). He said it was up to Third World peoples and leaders ‘to provoke a radical transformation in the present situation by counting above all on their potentialities and by mobilizing all their human and material resources for the benefit of
their countries’.

  Apart from these international activities Boumedienne pressed ahead with the agrarian revolution, which had entered a delicate phase with the redistribution of private land. By this time the first phase of the agrarian revolution could be assessed: 617,867 hectares of publicly owned land had been distributed to 43,784 peasants in 2,500 co-operatives (although the target for this date had been one million hectares and 60,000 peasants). The second phase of the revolution was launched in June 1973 when privately owned farmland was redistributed to poor peasants. Not all the peasants installed in new land were happy: some complained that official assistance was insufficient while others objected to the bureaucracy of the co-operative system. Despite calls for the reform of the FLN, which had begun the previous year, little progress was made during 1973; what was lacking was any substantial input into the party by either the workers or intellectuals. By mid-1973 the Algerian population had reached an estimated 15.3 million and was expected to rise to 19 million by 1980. Between 1970 and 1973 Algeria invested a total of 33,000 million dinars under the Four-Year Plan although only 26,000 million dinars had been projected for this period. A further 54,000 million dinars was earmarked for the 1974–77 Plan and another 46,000 million for 1978–80. A sign of external confidence in Algeria at this time was its ability to raise substantial loans on the eurodollar market: in 1973 these included a loan of $300 million from six US banks, US$100 million from Canada and further loans from the World Bank and Japan. Algeria also signed a contract with the USSR whereby steel production at 400,000 tons in 1973 would be increased to 2 million tons by 1980. By any standards 1973 was a good year for Algeria: on the home front its socialist-economic revolution was steadily advancing; on the international stage Algeria had emerged as a force to be reckoned with.

  A shrewd observer of the Arab world2 provides some interesting insights into Algeria’s successes and failures in the mid-1970s. The FLN, which had spearheaded the defeat of the French and the revolution, did not in fact become the ruling force in Algeria after independence, except in name. ‘The party still exists but it is little more than a shell. Such “mobilization of the masses” as has taken place, has been through military conscription. The use of the army as an instrument of social and economic progress has been maintained and developed since the revolution… There are elected popular assemblies for the communes and for the higher levels of the governorates or wilayas, for which elections were first held in June 1974, but Algeria has no parliament or other national representative institutions… The country is governed and administered by a small, industrious, elite bureaucracy which concentrates on the nation’s two most urgent and manifest needs: industrialization and education.’3 The same commentator continues that a further consequence of the failure of the FLN to develop as a ruling party responsible for ‘mobilizing the masses’ is that Algerian women have not been emancipated at anything like the pace that was expected during the war of independence. The failure of the FLN during the 1960s and 1970s to make itself an effective ruling party, because the military took on this role, was the basis of the failures to come in the 1980s and 1990s. The army was the victor of the revolution and subsequently was incapable of surrendering the lead role to the FLN with disastrous long-term consequences all round. This, or similar determination by those who won independence struggles to believe that they alone could mastermind subsequent development, caused many problems in post-independence Africa and not just in Algeria.

  The immediate task of the 1970s was to take control of the country’s resources, most notably its oil and natural gas, and use them as the basis for an industrial revolution and in this respect the Boumedienne government was remarkably adroit. Sonatrach, the state oil company, was the crucial tool of government policy. ‘Step by step, this has succeeded in winning control over Algeria’s oil resources against the stubborn opposition of the oil companies, especially the French companies, whose position was reinforced by the special privileges they gained in the pre-independence Evian agreements. The struggle culminated in February 1971 when the Algerians expropriated all French interests.’4 Algeria was to need all the revenues that its oil and gas could yield and its victory over the oil companies and France was all the more courageous when its need for the European markets is understood. Meanwhile, Algeria pursued a tough programme of austerity while maintaining a high level of investment and ‘In the last four-year plan of 1970–73 Algeria was probably unique among developing countries in exceeding the planned level of investment’.5

  Throughout 1974 Algeria established its position as a leading radical country of the Third World, most especially in pursuit of the idea then being floated for a New International Economic Order (NIEO). When he addressed the General Assembly of the United Nations on 10 April Boumedienne urged developing countries to nationalize their natural resources and argued that development aid should not be conditional on the maintenance of extremely low prices for raw materials. He was, as usual, fighting against the economic dominance of the major industrialized countries. The third phase of the agrarian revolution was launched: its objectives were to settle nomads and build primary schools for their children, and to create co-operatives for raising flocks and economic infrastructure in the rural areas. A new Three-Year Plan for 1974–77 was launched. Boumedienne reached the high point of his influence in 1975. His home position was unchallenged even if he was never especially popular himself – he was too austere and remote for general popularity. Algeria’s long-term future as an industrialized Third World socialist country appeared to be on course while relations with France improved dramatically when President Giscard d’Estaing came to Algeria on a state visit.

  The 1970s saw remarkable progress in Algeria where industrialization was at the centre of government policy. At independence in 1962 the industrial sector had been very small, consisting mainly of food processing, building materials, textiles and minerals; even this limited activity had been slowed down by the departure of the French while for the rest of the decade foreign firms were reluctant to invest for fear of being nationalized. By 1978, however, about 300 state-owned manufacturing plants had been set up although productivity was very low and some plants operated at no more than 15 to 25 per cent of design capacity. Major ambitious projects had been launched including a petrochemical complex at Skikda, and others to produce polyethylene, caustic soda and chlorine and a huge fertilizer plant at Arzew. Parallel with the industrial revolution was the agrarian revolution that Boumedienne launched in 1971. The principal aim of the Second Four-Year Plan (1974–77) was to lay the foundations of an industrial base and 43.5 per cent of investment was allocated to industry. The Plan also emphasized improved agricultural methods, housing, health, and job creation and training. Between 1970 and 1976 the country’s GDP grew by an average of 6.2 per cent a year. In June 1975 Boumedienne announced that national elections for an assembly and president would be held and that a National Charter to provide for a new constitution was to be drawn up. The announcement led to an immediate growth of opposition by those who believed these moves were designed to consolidate Boumedienne’s power. In March 1976 a manifesto, signed by two presidents of the former government in exile, Ferhat Abbas and Ben Youssef Ben Khedda, criticizing Boumedienne for his totalitarian rule and cult of personality, was circulated. The protesters were put under house arrest and Boumedienne rejected their accusations. The following month the National Charter was published and, after public discussion, received a 98.5 per cent vote of approval in a June referendum. The Charter emphasized the absolute commitment of Algeria to socialism that was specifically adapted to Third World conditions. The Charter also asserted the dominant role of the FLN and made Islam the state religion. A new constitution embodying the charter was passed and in December Boumedienne was elected President with 99 per cent of the votes cast. A National Assembly was elected in February 1977. With his election as president under the new constitution Boumedienne appeared to have secured his position for some time to come but
a year later, 27 December 1978, he died of a rare disease. After a period of doubt and speculation Chadli Benjedid, the commander of the Oran military district, became head of state. He said he would continue with Boumedienne’s policies but unlike his predecessor he did not monopolize power: he was no revolutionary but a less driven consolidator.

  During the fighting against the French the FLN had created a nation by persuading most of the people to support the armed struggle; in the process of opposing the common enemy the majority of the people had come to regard themselves as Algerians as opposed to French colonial subjects. There were divisions, however: between Arab and Berber and between the French-speaking elite and the Arab and Berber peasants. Boumedienne launched a massive education programme and by the early 1970s the government was spending 10 per cent of the country’s gross national product on education although all teaching was still carried on in French until 1972. Austerity was the watchword and, for example, only goods needed for development were imported while most basic consumer goods were deemed frivolous and the population was expected to keep its belt tightened. Then, ‘In the mid-1970s it seemed to the government and its people that their sacrifices were to be rewarded. The huge rise in oil prices multiplied the state’s oil revenues by five or six times in the space of two years. The government instituted a free health service as a present to its people. The rest of its revenues it continued to pour into industrialization. It took over the running of its own oil production and built refineries, liquefied gas plants, steel mills and a large number of engineering industries. By the end of the 1970s it had the biggest industrial base in the continent, after South Africa.