The president, Abdelaziz Bouteflika, won a third term in office in 2009, which will run until 2014. He faces challenges from across the Algerian political scene, as liberals and Islamists resent their exclusion from the political process, weakening the ruling three-party coalition known as the presidential alliance. A cabinet reshuffle in 2010 removed several allies of Mr Bouteflika from the government, with long-serving technocrats taking their places. Speculation continues about divisions within the ruling coalition and about whether disagreements within the country's leadership led to the replacement of the senior management at Sonatrach, the national oil company, in January 2010, following a corruption inquiry. The Economist Intelligence Unit expects rumours about further political change to continue during 2011-15.

The re-election of Mr Bouteflika required constitutional amendments to abolish the two-term limit for incumbents. Although the amendments were passed by an overwhelming majority in parliament, they were harshly criticised by liberal commentators in the local press on the grounds that they concentrate power in the hands of the president. The role of the prime minister was weakened by the constitutional amendments, but Ahmed Ouyahia, the current prime minister, appears to have a strong relationship with the president. There has been criticism that some policies, particularly economic ones, have been decided nearly exclusively by the president and the prime minister and presented to the cabinet without consultation. We expect Mr Ouyahia's role to become increasingly important. He is one of the few credible candidates to succeed Mr Bouteflika.

Social unrest will continue to be a concern, with riots in several cities and public- and private-sector workers organising frequent strikes. High unemployment, poor social conditions and a lack of economic initiative from the government will continue to add to disaffection and cause sporadic outbursts of social unrest. However, the government will continue to pay heed to the prominent role unions play in several key industries. Steel and port workers disrupted the economy in 2010, and the government's increasingly nationalist economic policies appear to have won the support of several major labour groups.