Algeria boosts food imports to contain social unrest

Faced with crumbling regimes across the Arab world, Algeria has dramatically boosted its grain imports to contain social unrest ahead of Ramadan, when food prices traditionally shoot up. The strategy, analysts said, is designed to guard against a popular revolt like that in neighbouring Tunisia, where a frustrated public -- inspired by one man's dramatic protest -- brought down an entrenched regime. Five Algerians were killed and 800 injured during five days of riots in January, sparked by a rise in the cost of basic goods like oil and sugar. Protests have continued since, with workers hitting the streets in a series of demonstrations to demand higher wages and better housing. This week, Algeria's customs bureau announced that total food imports for the first half of 2011 are up 59 percent compared to same period in 2010. The country also imported $2.04 billion (1.4 billion euro) worth of cereals, flour and semolina in the first half of the year, a 99 percent increase compared to 2010 figures, according to the customs board. The inspiration for the added imports "is of a political nature," economist Abderrahmane Mebtoul said. "Faced with what's happening in the Arab world, the Algerian government wants to avoid tension over bread and food products," he added. Prices in the country's markets typically rise when families stock up on basic goods ahead of the holy dawn-to-dusk fasting month of Ramadan, which is likely to start in early August. The government therefore wants to ease public anger by importing enough food to ensure costs remain low. But, according to one analyst, the strategy is flawed, partly because black market traders end up buying grain at reduced costs in Algeria, and then take it across the border to sell at markets around the region. "Algeria lowers prices internationally, and countries like Mali, Niger Morocco, Tunisia, Libya and Mauritania also profit from these subsidies through certain networks," said Reda Hamiani, who heads the Algerian FCE business forum. The policy is also "nonsensical," according to Hamiani, because it discourages domestic farmers from boosting domestic grain production, which the country desperately needs. Metoub countered by saying that because Algeria is semi-arid with "relatively weak" agricultural production, farmers are always going to look to "more speculative crops and turn away from grains." While protesters in January voiced frustration over the high cost of living, Algerian President Abdelaziz Bouteflika has also been confronted by pro-democracy protests demonstrations resembling those in Egypt, Libya and Syria. In April, truncheon-wielding police beat hundreds of pro-reform activists, many of whom were calling for regime change. Bouteflika, 74, has proposed changes to the constitution and election laws, but protesters have accused him of ignoring their central call for more accountable government.