Algeria’s resource paradox: southern poverty amidst northern wealth

Monday 09 June 2025 - 07:50

By: Dakir Madiha

Algeria’s resource paradox: southern poverty amidst northern wealth

Algeria’s southern regions, rich in natural resources like oil, gas, and minerals, present a stark paradox. While these areas are the backbone of the nation’s economy, they remain impoverished and underdeveloped, raising critical governance and security concerns both domestically and across the broader Sahel region.

Resource wealth, poverty, and governance challenges

Despite decades of intensive resource extraction, Algeria’s southern areas, including Hassi Messaoud, In-Salah, and Ouargla, continue to grapple with severe poverty. These regions, home to the country’s largest hydrocarbon reserves, see their wealth funneled to Algeria’s northern regions and central government, leaving local communities with little benefit. The lack of economic diversification, coupled with centralized governance, exacerbates inequality. Southern institutions remain underfunded, excluded from decision-making, and ill-equipped to address local needs.

This economic and political marginalization fuels resentment, as social movements and protests in the south highlight demands for economic inclusion and infrastructure investment. For instance, residents of In-Salah have protested shale gas extraction, citing environmental concerns and the absence of tangible benefits from conventional gas revenues. Decades of neglect have left the south vulnerable to unemployment, inadequate public services, and environmental degradation, perpetuating cycles of underdevelopment.

Security risks and regional instability

The socio-economic divide in Algeria’s south has far-reaching security implications. Marginalization has fostered conditions conducive to criminal networks, militant groups, and separatist sentiments. Armed groups, such as Al-Qaeda in the Islamic Maghreb (AQIM), exploit local grievances, undermining state authority and fueling instability. The region’s weak governance has allowed illicit activities like arms trafficking, human smuggling, and illegal mining to thrive.

This instability reverberates beyond Algeria’s borders. The porous frontiers of the Sahel facilitate the movement of militants and weapons, complicating peace efforts in neighboring countries like Mali, Niger, and Libya. The south also faces the growing threat of separatism. Historical examples, such as South Sudan, underscore how socio-economic exclusion and ethnic grievances can lead to territorial fragmentation, a risk Algeria cannot afford to ignore.

The environmental toll and future risks

Resource extraction has also devastated the region’s environment. Industrial activities have strained water resources, while climate change and desertification exacerbate the challenges faced by traditional livelihoods like farming and herding. With recurrent droughts and worsening living conditions, many southern residents are forced to migrate north, adding pressure to urban infrastructure and deepening national inequalities.

Algeria’s southern regions are at a critical juncture. Despite their resource wealth, they remain trapped in systemic poverty, underdevelopment, and rising insecurity. The resource curse—where natural riches fail to deliver inclusive growth—has entrenched rentier practices, economic inequality, and governance failures. Meanwhile, perceptions of marginalization and neglect continue to erode state legitimacy, fostering unrest and enabling militant groups to thrive.

The consequences extend beyond Algeria, threatening the stability of the broader Sahel region. Without significant reforms to decentralize governance, ensure equitable wealth distribution, and address socio-economic grievances, Algeria risks deepening divisions and destabilizing an already fragile region. Addressing these challenges is not just critical for Algeria’s future but also for regional peace and security.