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ALGIERS (Reuters) - Algeria will not be swamped by a wave of unrest spreading through Arab states because it is investing its energy revenues in improving peoples' lives, a senior ally of President Abdelaziz Bouteflika said.
Abdelaziz Belkhadem, head of Algeria's ruling FLN party and a cabinet minister, acknowledged the authorities could be doing more but said that, unlike in Egypt or Tunisia, Algerian protesters were not demanding a change of government.
Anger over freedoms and living conditions led to a change of leadership in Algeria's eastern neighbor Tunisia, while Egypt has been convulsed by protests. Ratings agency Standard & Poor's put Algeria among the countries that could be next.
"Protesters in Algeria want better social and economic conditions. They did not make political demands as is the case in Tunisia, Egypt, Yemen, and Jordan," Belkhadem told Reuters in an interview late on Saturday.
Algeria had its own outbreak of unrest at the start of this month when several towns, including the capital, experienced days of rioting provoked by a jump in food prices. Two people died and hundreds were injured in clashes with police.
Belkhadem, whose ministerial title is the president's personal representative, said that was nothing new for Algeria, which is more tolerant of dissent than many Arab countries. "We have arrests and riots on a daily basis," he said.
Protesters complained about food prices but also about a lack of housing and jobs as well as corrupt local officials.
The government responded by cutting the cost of some foodstuffs by half and by making huge purchases of wheat on the international market in what appeared to be an attempt to avoid bread shortages that could rekindle unrest.
Belkhadem said oil and gas revenues -- energy exports earned nearly $60 billion in 2010 -- are being shared out among the population, partly through a plan to spend $286 billion over five years on infrastructure, hospitals, schools and housing.
"It is unfair to say that Algeria is rich and its people poor," he said. "Health and education are free in Algeria."
"We created 550,000 jobs in 2010. I know that we should do more, but I must say that few countries in the world could create half a million jobs per year," he said.
Algeria plunged into chaos in 1992 when its army decided to scrap legislative elections that a radical Islamist party was poised to win. About 200,000 people died in subsequent violence from which the country is still emerging.
"This is why the social and economic demands are very high, and it needs time to be tackled," Belkhadem said.
It is unusual for senior officials in Algeria to talk at length to the foreign media and Belkhadem's decision to grant an interview appeared to show the government was concerned by contagion from Tunisia and Egypt.
Seventy percent of Algeria's 35 million inhabitants are under 30, and unemployment is officially at 10 percent.
Belkhadem said there were jobs available, but there were problems finding local workers to fill them. Tens of thousands of Chinese, Turkish and Egyptian workers are present in Algeria, mainly in the housing and public works sectors.
"It is a paradox, but it is the reality that in some sectors there is a lack of workers," Belkhadem said.
"We don't have enough masons, electricians or carpenters to meet the high demand," he said.
Economists say state investment is helping drive growth, but if the economy is to grow fast enough to push down unemployment, restrictions need to be lifted on private business and particularly on foreign investment.
"They (foreign direct investors) are welcome. All we want from them is to acquire know-how and expertise and secondly to find markets abroad to export our products," Belkhadem said.
Editing by Louise Ireland