December 9, 2015:
The government sentenced general Abdelkader Ait Ouarab to five years in prison. Ouarab was largely responsible for the successful war against Islamic terrorists in the 1990s but was seen as a threat to ruler Abdelaziz Bouteflika even before becoming president in 1999. But there is more to this than that. Since July 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 over the last six months as 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.
Beyond corruption Algeria has an even more serious problem with a growing shortage of money. The continued low oil price means Algeria is getting about half the income from oil sales in 2015 compared to the same period in 2014. The falling price of oil is doing a lot of damage to the economy but the government says it has a plan to cope. Algerians in general are coping. For example automobile imports are down over 35 percent this year and other imported “non-essentials” are suffering similar declines. The decline in oil income is likely to get worse in 2016. That is because once Iran resumes shipping oil because of the July 2015 treaty the oil price will sink lower for longer. In late 2014 Algeria prepared its budget for 2015 based on oil selling for an average of $37 a barrel. That follows price of oil falling 50 percent since 2013 (from $120 to $40 a barrel) in 2015. The government only expects to receive $26 billion from oil and natural gas in 2016 and cash reserves will shrink to $121 billion by the end of that year. These reserves already dipped to $151 billion at the end of 2015.
Oil and gas are nearly all (95 percent) of the country's export revenues, as well as 60 percent of government income and 40 percent of GDP. The 2015 budget keeps spending levels largely the same and to do that over $30 billion will have to come out of the reserves. This cannot continue for long as Algeria only had $200 billion in reserve when the decline began in 2013 and not much in the way of credit for big loans to cover budget deficits. Still, the oil revenue is an essential tool for keeping an increasingly unhappy population quiet. For example in 2011 the government announced huge (over $200 billion) investment plans for the rest of the decade, to build infrastructure and support job growth. But such promises had been made before, and somehow never panned out. This time the charm offensive was more sustained and extensive. Local officials were ordered to try harder, a lot harder, to do something for the poor and unemployed who come to them for aid. This resulted in a sudden surge of reports from all over the country about how cranky officials had suddenly taken happy pills and undergone amazing transformations. This time the investment plans have largely been fulfilled, at least so far and that had managed to keep a lid on popular discontent. A few years of very low oil prices and the situation gets dangerous and possibly ugly as the populations suffers more economic privation. Inflation has risen from the normal three percent to over five percent and still growing. Unemployment is rising as well and is expected to reach 12 percent in 2016. It not a good time to be running Algeria.
The worsening economic situation has found some relief in the more intense border security, especially with Tunisia, Libya, Niger and Mali. The main goal of this is to keep Islamic terrorists out but the majority of contacts have been with smugglers, most of them moving consumer goods, not weapons or Islamic terrorists. This enabled government economists to get a better idea of the impact of the smuggling on the economy. It was worse than previously thought and is costing the government about $3 billion a year. Most of the smuggling is from Morocco, which was long known. But the increased scrutiny on the other borders confirmed this.
One form of economic activity that is thriving in Algeria is drug smuggling from the south, mainly Mali. Without this drug smuggling Islamic terrorists would not bother with such an out-of-the way place. It’s all about money, which even Islamic terrorists need to survive. Mali is a key component of a smuggling route from central Africa to Europe. The 2012 Tuareg rebellion in northern Mali triggered an international peacekeeping response in 2013 that made moving the drugs north more difficult and, for a time, nearly impossible. The Islamic terrorists operating in northern Mali must maintain access so they can enter and move through Algeria, to the coast and thence to Europe. Doing this is a major source of income for Islamic terrorist groups who will also use this network to move weapons and Islamic terrorists. Normally bribes would work to safely get through but the Islamic terrorism angle in northern Mali and Algeria means that fewer military or police officials will accept the money and the smugglers have to rely on skill and luck or firepower to get through. That often isn’t enough, as can be seen by the constant clashes on the Algerian border and throughout northern Mali.
December 2, 2015: About a hundred kilometers east of the capital (Tizi Ouzou) troops clashed with two Islamic terrorists and killed them. The dead men were each armed with an AK-47 and lots of ammo. Another clash in the area left three Islamic terrorists dead. That makes seven Islamic terrorists killed so far in this large scale search operation in the area that began on November 29th. This is all about finding Islamic terrorist bases and weapons storage sites. So far sixteen of these have been found and destroyed. For the most part these are camouflaged bunkers housing and hiding personnel and equipment. The government is getting location information aerial reconnaissance, captured Islamic terrorists as well as locals in these remote areas who find it easy (and safe) to use the spreading cell phone service to call the police. By 2010 most (82 percent) of the population had cell phones and access to the cell phone tower network. The number of users and signal coverage continues to grow but more slowly because towers are now being built in less profitable rural areas. Civilians are more eager to report Islamic terrorist activity because of the recent appearance of some ISIL (al Qaeda in Iraq and the Levant) men in Algeria and some of those are believed trying to establish a base in the Tizi Ouzou area. Most of the active Islamic terrorists in Algeria are still loyal to al Qaeda, which runs the drug smuggling.
November 24, 2015: In neighboring Tunisia an Islamic terrorist roadside bomb hit a bus carrying presidential guards and killed twelve. Algeria sent condolences and pledges to continue close cooperation in dealing with Islamic terrorism. Similar messages were sent to Mali in light of several recent Islamic terror attacks down there.
November 21, 2015: About a hundred kilometers east of the capital (Tizi Ouzou) troops found and destroyed four Islamic terrorist bombs that were hidden for future use. The troops apparently had a tip on where to find the bombs but would not comment on that.
November 18, 2015: Police clashed with an Islamic terrorist 360 kilometers east of the capital and killed him. He was carrying an AK-47 and lots of ammo.