Algeria: Something To Die For


April 29, 2016: Despite the apparent success of the 1999 amnesty deal that ended the 1990s Islamic terrorist uprising, enough Islamic terrorists survived the fighting and amnesty to keep the violence going. The government estimates that during the 1990s the fighting killed 62 percent of the 27,000 Islamic terrorists active and most survivors accepted the amnesty. But nearly ten percent either fled or kept operating. Because the 1990s violence had left over 150,000 dead (most of them civilians killed by Islamic terrorists), caused over a million people to flee their homes and cost the economy over $20 billion the remaining Islamic terrorists had virtually no popular support left. This despite the fact that the corruption and poverty the Islamic terrorists promised to eliminate (via a religious dictatorship) were still present. One reason for that is Abdelaziz Bouteflika who became president in 1999, ended the war with the Islamic terrorists via the amnesty deal (a major accomplishment) and has remained in power and become wealthy since then by exploiting the corruption. There is growing popular resistance to that.

Since mid-2015 the ruling Bouteflika clan has been mustering political support to defeat an anti-corruption (or at anti-Bouteflika) effort backed by leaders of the intelligence and counter-terrorism services. The Bouteflika moves are also described as deliberately curbing the power of the security services, which increased considerably during the 1990s counter-terror campaign. The security forces generals appear to have gone too far when they went public with criticism of the rampant corruption in the government. The ruling families have grown wealthy from the corruption and in this conflict with the generals corruption won and that was made clear by the end of 2015 as the number of generals in the intelligence services were reduced from 25 to six. The intelligence and counter-terrorism generals will now be selected more for their loyalty than their competence. The deposed (mostly retired, some jailed) intel and counter-terror experts were the senior people with the most knowledge of what was really going on in Algeria and that included the widely known fact that corruption and dictatorial rule by a few families (which were prominent in the 1960s rebellion against France) were the main problem. This is a common pattern worldwide and especially in the Middle East.

Everyone knows that corruption and bad government are the main cause of stagnant economies and general unrest but not enough of those in charge are willing to give up enough wealth or power to fix the problem. Thus the 2011 “Arab Spring” uprisings largely failed because too many people with power were not willing to give it up and had the means to eventually defeat the rebels and keep up the old ways. By weakening the counter-terror forces the government makes it more likely that there will be another revolution, most likely led by Islamic radicals. This is a cycle that keeps repeating. The pressure on Bouteflika and his allies has increased since he suffered a stroke in 2013. The close associates (family, friends, political allies) of Bouteflika have managed to hold tight the reins of power with or without a lot of help from the elderly (now 79) and ailing president.

What may yet trigger meaningful reform is the continued low price of oil. This has already produced meaningful results. For example in February a court sentenced six oil company managers to prison after they were convicted of corruption. It is widely known that corruption in the state oil company (Sonatrach) has hurt the economy. Oil and gas exports account for 30 percent of GDP, 95 percent of exports and provide enough income to cover 60 percent of the government budget. That was in 2013, before the price of oil fell over 70 percent. Oil and gas are still important, even more so because that income has been reduced by more than half and the government cannot make a lot of cuts because much government spending is to buy the loyalty of key segments of the population like government employees, especially those in the security forces and oil industry. Thus many people see the sudden eagerness to prosecute corrupt officials directed mainly at obtaining enough oil revenue to maintain the loyalty (to the corrupt government) of key groups.

What most Algerians want is less corruption and incompetent government officials getting in the way of starting and running new businesses. There is little enthusiasm for that among the ruling families, who prosper by using their government power to help other family members establish profitable monopolies. These inefficient monopolies would be destroyed if not for the corruption that hinders the creation and operation of competing firms. That process is already beginning to make up for the lost oil income.

In the start of 2016 the value of oil exports fell 24 percent to $1.8 billion. However the trade deficit ($1.8 billion a month) remained the same as it was in January 2015. At the end of 2015 foreign exchange reserves (needed to pay for imports, especially food) fell 22 percent to $143 billion. The government has been controlling the use of these reserves, which stood at about $200 billion before the oil prices began plunging in 2013. The foreign exchange reserves can be drawn on for another six years. After that severe cuts will have to be made and there will be much unrest. Algeria. Like most other oil exporters is pressuring Saudi Arabia and the other Gulf oil states to ease up on their use of oil over production to drive the price of oil down and weaken Iran. Meanwhile the cash crises makes more of those in power (from the ruling clans) interested in some fundamental reforms that will curb the corruption in order to spur economic growth. This means the current ruling families will have to surrender a lot of power and income. As long as the low oil prices persist that is seen as the only way to survive the mess.

Change would mean unthinkable moves like reducing defense spending, which is currently over $10 billion a year. Most of this is to keep the unhappy population in line which is why details are kept secret so no one knows exactly what is sent on the military. The current spending is at least 4.5 percent of the current $222 billion GDP. Yet despite the low oil prices the government has allowed enough economic freedom for new businesses to form and existing ones to expand. This GDP grew 3.9 percent in 2015.

April 28, 2016: In Boumerdes province (50 kilometers east of the capital) troops, acting on a tip found and clashed with Islamic terrorists and killed two of them. Two automatic weapons, ammo and a grenade were recovered.

Russia and Algeria signed an agreement to study building one or more nuclear power plants in Algeria. Russia has done the same for Iran, China, India, Turkey and Belarus. Russia is in the midst of a program that will nearly double (to 61) its own nuclear power plants by 2030 and increase from 17 percent to 25 percent the portion of electrical power produced by nuclear plants. Russia has to overcome a Cold War era reputation of building unsafe nuclear facilities and using tech that was inferior to what was available in the West.

April 27, 2016: Over the last few days the army has arrested 34 people and charged them with supporting Islamic terrorists (with supplies, weapons or shelter). Most (32) were arrested near where the borders of Libya, Tunisia and Algeria meet. This is 750 kilometers southeast of the capital. The other two were arrested at Tizi Ouzou (120 kilometers east of the capital.) Arrests like these are common because Islamic terrorism is still quite unpopular throughout the country and many people will use their cell phones to call in tips that lead to arrests which often result in the discovery of where Islamic terrorist hideouts or equipment storage sites are. Because of this several of these hideouts or weapons caches are found each week.

April 26, 2016: In the east (Béjaïa province 220 kilometers east of the capital) soldiers clashed with an Islamic terrorist and killed him recovering an assault rifle and a van the man was driving.

April 23, 2016: In the south (near Tamanrasset, 2,000 kilometers south of the capital) troops ambushed an Islamic terrorist and killed him. An assault rifle and a vehicle were seized.

April 21, 2016: The government announced that it was preparing to reopen its embassy in Libya once the new unity government completed taking control of all government facilities in Tripoli (the capital). That is now expected to happen soon.

April 18, 2016: The army revealed that during March operations in the southeastern province of In the Oued killed 14 Islamic terrorists and recovered nearly 200 weapons plus ammunition, dozens of cell phones and walkie-talkies as well as other equipment and supplies. Most of this gear was stashed in two hidden locations which were found with the help of captured Islamic terrorists as well as documents (electronic and paper) seized. Most of this activity was near the Tunisian border. Most of the captured weapons appear to have come from Libya, where millions of weapons purchased by deposed (in 2011) dictator Moamar Kadaffi. Most of these weapons had been stored in warehouses and never or rarely used. During the fighting most of these warehouses were looted and those weapons are still being smuggled out of the country by criminal gangs (mainly) or Islamic terrorists in nearby countries (like Algeria).

April 14, 2016: Down south in Mali the government has extended its state of emergency three months, to mid-July. This comes after a ten day state of emergency expired. All this is to deal with the increased threat of Islamic terrorist attacks. Many of the Islamic terrorists are based in northern Mali and southern Libya and because of the new Mali alert Algeria has sent more troops south to increase border patrols.




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