Mahfoud Bennoune, a contributing editor of this magazine, is a veteran of the Algerian war of independence and currently teaches at the University of Algiers. He is the author of The Making of Contemporary Algeria, 1830-1987 (Cambridge University Press, 1988). Nabeel Abraham spoke with him in Detroit in December 1989.

Was the FLN [National Liberation Front] party congress in November 1989 a special event, an outgrowth of the October 1988 riots?

It was a special meeting called by President Chadli Benjedid and the FLN party to discuss the reforms that he proposed after the riots of October 1988. The riots themselves were the result of the severe crisis afflicting Algeria. Since 1986, Algeria has experienced zero economic growth. The official unemployment figure is at 24-25 percent; over 1.2 million persons out of a work force of about 4 million. For the past three years, wages remained stagnant while inflation officially increased by at least 45 percent. The black market accounts for 80 percent of all goods exchanged in the country. In this sense, the crisis is really devastating. The loss of natural gas revenues amounted to no less that $5.1 billion per year between 1980 and 1989. The situation affects all sectors -- education, social services, agriculture, industry.

How did this crisis come about?

Algeria’s current crisis cannot be pinned only on the collapse of oil prices or the three-year drought. It is essentially a structural crisis engendered by this regime’s policies and practices. From 1962 to 1974, first under Ben Bella and later under Boumedienne, Algeria nationalized all its economic assets and resources and handed them over to public corporations. By 1978, 66 autonomous public corporations were established in various economic fields, 18 in the industrial field. Their mission was to industrialize the economy before Algeria’s oil and natural gas reserves were depleted.

Didn’t Benjedid accept this policy when he came to power in 1979?

His first step upon assuming power was to evaluate the economic performance of the previous decade. It takes between 40 to 60 years for a country to industrialize completely. Such a process would inevitably involve mistakes, failures and even bankruptcies of some industrial enterprises. How could any state authority, but especially the unenlightened Benjedid government, evaluate an infant industrialization process less than ten years old? The evaluation would of necessity be premature.

Didn’t Benjedid take such factors into account?

I was director of the Institute of Planning Techniques and Applied Economics at the time. Two of my assistants were part of the evaluation team. Benjedid’s minister of planning instructed the team to “highlight the shortcomings” and “deemphasize the achievements” of the 1967-1978 development period in the final report.

The evaluation led to the cancellation of a long-planned project to construct a heavy tool- and machine-making complex, planned by the Boumedienne regime in the 1970s to cap the country’s industrialization project. Its fulfillment would have allowed Algeria to construct its own industrial plants as well as manufacture its own machinery -- quite an achievement for a Third World country. An essential complex like that requires many years to construct and master completely. It would have employed about 25,000 workers, three quarters of whom would be highly skilled workers, technicians and engineers. The fact that this project was killed by Benjedid’s “evaluation” removes any doubt in my mind about his regime’s inability to grasp the essentials of industrialization, and by extension the attainment of national economic independence.

You wrote in your book that “Algeria has no acceptable alternative to industrialization.”

I am more convinced than ever that a country like Algeria, with a rapidly growing population and a limited agricultural base, has no other viable alternative. Only industrialized countries, with a few exceptions, have viable agricultural bases. Algeria’s arable land is insufficient to meet the country’s needs. Algerian agriculture is highly dependent on the weather, and is beset by erosion and desertification. Every year about 40,000 hectares of arable land is either lost to run-off or carried away by the wind. The Sahara is advancing northward at a rate of about 10 kilometers per year in certain areas. The only way to increase agricultural production is to modernize agriculture through developing the industrial base of the country.

The current regime shifted the development priority to agriculture, yet it shelved an important plan worked out by the Ministry of Industry that called for modernizing agriculture and irrigating about 1 million hectares with a network of dams along Algeria’s Mediterranean coast to catch the mountain water run-off. The water would have supplied not only the coastal cities and industries, but also inland agriculture. If this plan had been put into effect in the 1980s, Algeria could have expected to be self-sufficient in food production by the year 2025. Moreover, this would have been entirely financed by Algerian dinars, sparing the country’s hard currency reserves. The project would have cost the equivalent of about $5 billion over 20 years. Instead Algeria today imports about $2 billion worth of foodstuffs annually.

What were Benjedid’s reasons for dismantling the state-managed economy?

The industrialization drive of 1965-1978 started with the establishment of basic industries: steel, construction materials, mechanical, electronic, chemical and petrochemical. Once completed, these industries would stimulate the development of light industries and various other productive and related service industries that would satisfy the needs of the population.

Oil revenues were not consumed or placed in Western banks. They were invested, creating 1.1 million jobs, bringing unemployment down from 70 percent in 1962-1963 to 16-17 percent by 1978-1979. The 18 major public industrial companies created “communities of interests.” Within them were health centers, fringe benefits, free meals. Benjedid destroyed a productive system in the making. Today we find ourselves with an incomplete system which relies heavily on imported semi-finished products and spare parts paid for in hard currency in order to keep production running.

Benjedid claimed the inefficiency of Algerian industry and its lack of profitability was due to workers’ fringe benefits. It took me 18 months of visiting industrial plants throughout the country, where I talked with workers, foremen, engineers and managers, to understand the implications of Benjedid’s policies. When I finished my research, I was ashamed of myself for having sat in an ivory tower, not knowing the new industrial geography established since independence in my country. I myself consistently criticized Boumedienne’s policies during his rule. But when I visited the various plants throughout the country, I realized that his regime had achieved a great deal in the way of national economic independence.

There was external opposition from the Western capitalist countries, but Algeria was able to play off one country against another. The internal opposition, however, proved to be very strong. The political system that emerged after independence was dominated by a single party encompassing different class forces with conflicting interests. Class antagonisms were heightened by the agrarian reform undertaken in 1971, which involved the nationalization of private farms and their distribution to peasant farmers. The nationalization of the import-export trade affected the interests of powerful middlemen and rich merchants.

Are these the people behind Algeria’s “compradorization”?

Yes, and others. Between 1962 and 1978, tremendous pressures were put on successive governments by middle men who were not interested in the industrial development of the country. They were interested in establishing special relationships with foreign companies, which they represented in Algeria as local subsidiaries or local representatives. Another type of middleman was only interested in getting a cut from state contracts with the multinationals. The majority in government at the time, aside from Boumedienne and one or two of his ministers, favored a form of “comprador development,” not industrialization. This accounts for the tremendous role of the black market today. Even locally produced goods that are in great demand are not distributed through the formal trading networks. In this vast black market, the rate of profit varies from 30 percent to 500 percent and even higher.

How did this situation lead to the October 1988 eruption?

Benjedid’s economic reforms after 1980 led to the dismantling of the state corporations, the backbone of the Algerian economy. Manifold crises resulted: rising unemployment, poor housing, maldistribution of goods and services, declining industrial output, increasing food imports, mounting foreign debt, widespread nepotism and corruption. The generalized crisis coincided with the final months of Benjedid’s second presidential term, during the summer of 1988. The atmosphere was charged. In the absence of an open press, rumors about the corrupt activities of Benjedid’s family and relatives circulated widely. On September 19, in a televised speech before a large assembly of high government, party and military officials, the president admitted that the country was near bankruptcy. He brazenly put the blame on everyone but himself. At the FLN congress in November, Benjedid stood up and said that the country was in a severe crisis: $19 billion in debt -- in fact, the debt is $25-27 billion. He also admitted that 80 percent of the public corporations which he “reformed” in the early 1980s were in the red.

You have hinted that the authorities may have been behind the October disturbances. What do you mean?

Many questions remain unanswered. Rumors were spreading that there would be trouble. Workers and high-school students were striking. Then, on October 4, around 8 pm, trouble broke out in two Algiers neighborhoods. Some youths, not students, began attacking state shops, state banks, party offices and public buildings. The state shops were built to try to keep inflation down. The state invested in some supermarkets just to check private retail prices. The first thing they hit were those supermarkets. The second thing they hit were the buses. Who uses the buses, but the poor?

But those are also symbols of the state.

Perhaps. But take into account the behavior of the police. The riots began at 8 pm. By midnight, these gangs of youths had occupied the streets and the police were completely absent. The next morning, around 10 am, throughout Algiers and other cities of the interior, gangs of youths, apparently organized and synchronized, started hitting these places -- first the state shops. About 15 minutes later, another group came with trucks, already prepared to loot and put the products in the trucks. The city of Algiers has a special task force assigned to protect public buildings, but this special brigade did not interfere. The police also received orders to remove sensitive files and weapons from police stations two or three days before all this happened. The state of emergency was proclaimed on October 6 and the army was officially called in, though it had already moved in on October 5, some 24 hours before the declaration of the state of emergency.

At a certain point, it seems, things got out of hand. By 1 pm on October 5, young people from poorer sections joined the riot. The rioters started smashing and looting privately owned businesses.

During initial attacks and looting, the rioters raised no slogans or political demands. When demands finally came, they were for jobs, housing and state services. The slogans denounced nepotism and corruption. The demands never included calls for pluralism and democracy, as Benjedid later claimed.

The rest is well known: Between 305 and 700 people were killed during those five days. Many more were wounded. When the riots were over, people started talking about the “October revolution,” and the “triumph of democracy.” Very few asked for an impartial inquiry to investigate the conditions that led to October. That is why many Algerians are convinced that the security services had a hand in the events.

What “reforms” have resulted?

In the new constitution, the first reform was political pluralism, as if that would resolve the economic and social crisis engendered by Benjedid’s policies. The second reform was to delegate power to the prime minister. However, Benjedid appoints the prime minister. If the national assembly votes against him, Benjedid appoints another. If the national assembly votes down the second nominee, the national assembly is dissolved. The third reform is that Benjedid himself can dismiss the prime minister. Once the national assembly votes the prime minister in, it is responsible for the mistakes of that prime minister. But the president can dismiss the prime minister without the approval or vote of the national assembly.

What happened at the FLN congress in November?

By the time of the meeting, there were 12 officially recognized political parties, from the Islamic Salvation Front to the Socialist Vanguard, the former Communist Party.

On the first anniversary of the October events, the Algerian press, which is controlled by the presidency, presented them as a second revolution in Algeria. How can a president who led the country for ten years into crisis, orders the army to shoot the youth and says the youth are threatening the state, one year later describe this as a revolution that he supports? Aren’t we in a surrealistic, Kafka kind of situation, or where are we?

Not a single party asked for an official inquiry into the October massacre. Not a single party has questioned the president. Even Le Monde wrote that the bulk of the parties are financially assisted by the presidency. So Benjedid is concealing the catastrophe he created in the economic and social fields by erecting a facade of democracy.

The impression here is that the ruling FLN party is conservative and dogmatic.

This is an extremely erroneous perception. The rank and file of the FLN party were consistently against ending the welfare state, but the higher echelons of the party were Benjedid’s own appointees and they never voted a single resolution against Chadli’s “reforms.”

During the pre-congress regional conferences, many local sections of the FLN voted no-confidence resolutions. They voted to reject Benjedid as the president of the party; they were defiant. One of Boumedienne’s former ministers, Belaid ‘Abd al-Salam, the father of Algerian industrialization, told party cadres that the major problem facing Algeria today is Benjedid himself.

Once the authorities realized that the situation was becoming serious within the FLN, they made sure that about 1,000 delegates, from among the 5,000 who were voted in, were actually from the secret service. Benjedid controlled the entire apparatus of the FLN. Benjedid, on November 28, insisted that he maintain the former central committee of the party. The delegates shouted him down. Everybody wants democracy, they yelled, and we’ll start right here inside the FLN party.

Benjedid soon realized that this was a serious revolt. Even the secret service delegates weren’t going to save the situation. They arrived at a compromise. Benjedid would appoint one third of the central committee; the other two thirds would be elected by the local provinces -- two each. That allowed him to influence who would be elected. It also allowed the secret service to exert a lot of pressure on the other delegates to cool it and accept the situation.

It sounds as if Benjedid managed to control the congress, but only with difficulty.

Although Chadli wanted to discredit Boumedienne, each time the name Boumedienne was mentioned at the Congress, the entire delegation stood up and applauded for five minutes. The basic philosophy and social policies expressed throughout the congress were progressive, returning to the FLN program of the 1970s and an emphasis on industrialization. They also emphasized that the country is in a severe crisis and the FLN had to regenerate itself in order to face it. The party apparatus that controlled the congress reduced the resolutions to a few hundred words.

There were some negative aspects. Prior to the congress, they opened FLN recruitment to anyone. That turned out to bring with it some reactionary elements. On the one hand, there was a definite demand for populist policies -- welfare programs, basic social services. Yet the FLN has been penetrated by the Islamist current. This was evident in the demand by certain delegates to apply the shari‘a and to bar mixed schools. A woman delegate was speaking and they shouted her down.

Right now the central committee is around 240 people, but the president can expand it up to 288 -- larger than the national assembly. This makes it impossible to manage. This new central committee includes people who oppose Benjedid’s policies, people he purged in the 1980s. He also opened it up to other reactionary elements. The central committee will now elect the political bureau, which before was appointed by the president. There will be a big fight about that.

So Benjedid has agreed to limit his power in the FLN?

What Benjedid will do now is manipulate, using the other parties, to buy some time. Meanwhile, he appointed a government with no experience whatsoever. A super-ministry of the economy concentrates all industry and finance in the hands of a single minister, and this minister never held a leadership position at the national level. He never managed a single company. He was a bureaucrat in the Ministry of Planning. Furthermore, he does not have a political base of his own. He is a functionary, the president’s man.

If the economic and social situation worsens, Chadli is capable of using the army to make a coup d’etat against the state itself. His people think the remedy is to open Algeria to foreign investments. The social legislation, all the legislation concerning strikes and trade unions, will be changed within three months. This will create the conditions for private international capital to come in. I think they are deluding themselves. Foreign businesspeople consider Algeria explosive; they aren’t going to invest there.

Do you see any parallels with the experience of centrally planned East European economies wishing to decentralize and privatize?

In Algeria, the official newspapers have been trying to use first the Chinese liberalization policies and later the East European situation to show that Benjedid was far ahead of his time. I don’t think there is any real comparison. First, Algeria is a country that wrested its independence through its own army of national liberation. It tried, despite errors and mistakes, to consolidate its political independence by constructing an independent economy. The East European regimes were set up by the Red Army. They were not developed internally. Secondly, the private sector has played a very important role in Algeria, even though 85 percent of industrial production is state-owned. But in commerce and services, and even in industry up until 1978-1980, a large percentage of the labor force was employed in the private sector. Furthermore, the Algerian public companies had a commercial status. Interestingly, under Gorbachev, the Soviet Union is going to try to set up companies like those in Algeria, give them a commercial and industrial character and allow them to become autonomous.