December 26, 2017: Algeria continues to side with Qatar in its feud with the other Gulf Arab oil states (and their allies, like Egypt and Israel). That means Algeria backs the UN faction in Libya while the UAE and most other Arab states back the Tobruk/Hiftar group. Actually Algeria was reluctant to back the UN approved government for Libya and that proved to be warranted when the Hiftar group abandoned the UN proposal and demanded that the UN come up with a more practical solution. This is a big deal for Algeria because of the long border they share with Libya. It is also a big deal for the UN, which considers Algeria the most successful North African nation when it comes to dealing with Islamic terrorism. Other nations in the region agree and Algeria regularly trains troops from other nations in counter-terrorism methods that worked in Algeria. Libya is another matter and after Hiftar rejected the UN peace plan Algeria, Egypt and Tunisia responded that they still backed the UN effort. That support is not permanent and Egypt has long supported Hiftar and still does. But the UN support includes the support of many Western donor nations who, for the moment, are not inclined to finance Hiftar (Russia, on the other hand, is). So the situation in Libya remains violent and flexible.

Algeria is considered the most pro-Iran country in North Africa and has always supported the Assad government in Syria. Algeria also opposes designating Hezbollah and Hamas as terrorist organizations. That is apparently what is behind recent accusations that Algeria is allowing Hezbollah to secretly finance Hamas operations in Algeria. That sort of thing is unlikely because there are limits to what Algeria will do. For example in July the Hamas, which controls Gaza, admitted that it had asked Algeria for permission to open an office in Algeria to provide a sanctuary for some of their senior leaders. Algeria is still “considering the request” which is another way of saying no. Most Arab states, as well as the West, agree that Hamas is a terrorist organization. Algerians used to overlook that but things changed. As recently as 2009 Hamas was popular with many Algerians and open public support was common. Algerians still support the Palestinian people but Palestinian governments, especially Hamas, are another matter. The Algerian government has other reasons to want Hamas to stay away. This is partly because large, usually unauthorized demonstrations by young Algerians in support of Hamas tend to turn into anti-government demonstrations. Since 2009 Algerian attitudes have shifted and most young Algerians now agree with the rest of the world that Hamas is indeed just another Islamic terror group that wants to establish religious dictatorships and impose poverty and strict lifestyle rules on most everyone they can get to. Hamas had recently been expelled from Qatar, and before that from Syria. The Algerian government hoped Hamas would take the hint when their application to set up shop in Algeria was politely ignored. True to form Hamas is trying to bully Algeria (with implications that Algeria is not sufficiently anti-Semitic) into allowing Hamas in. It is still unclear if the government will formally give Hamas an answer or simply continue to ignore them. Algeria has always been unpredictable when it comes to foreign policy.

Algeria can afford to be unpredictable because they have oil and natural gas resources which are well managed (by African standards) and a military which is considered one of the most effective in Africa. Algeria spends 6.2 percent of GDP on defense and that has paid off because Islamic terrorists tend to avoid Algeria because it is a hostile and dangerous place for Islamic terrorists. The government does not send troops outside the country (for peacekeeping or whatever) and concentrates on keeping Algeria safe. That makes the security forces popular within the country and not likely to back a coup. But the military does support the corrupt and often inept government that has opposed foreign investment and free elections for half a century. If that does not change Algeria will, and not for the better.

Cashflow

The government reported that foreign currency reserves were $98 billion at the end of November. The government pledged earlier in 2017 to reverse the decline in foreign currency available to pay for imports. Foreign currency reserves were expected to end the year at about $97 billion and continue falling to about $85 billion at the end of 2018. The government inability to reform (suppress corruption) the economy quickly enough to reduce vulnerability to low oil prices becomes obvious when the foreign reserve situation is reported, as they must be (to placate foreign exporters and lenders). Foreign exchange reserves, essential to pay for imports, fell to $105 billion in mid-2017. This is not a new problem because foreign currency reserves were $193 billion in mid- 2014 and even then there were calls to cut non-essential imports. The government cut its budget 14 percent in 2017 in order to get the budget deficit down to 8 percent (versus 15 percent in 2016). Even so after five more years of this the foreign currency reserves will be less of a cushion and more of a threat because of all the additional budget cuts. Most of the problem is with administration of decisions already made. Despite the problems with oil income and government reforms GDP grew about two percent in 2017 and is headed for about four percent in 2018.

December 23, 2017: In the east (Skikda province, 500 kilometers from the capita) troops found and destroyed three Islamic terrorist bunkers and seized a solar panel (for charging electronics), 40 explosives and other equipment.

December 20, 2017: In the west (Tlemcen province) police arrested five suspected members of ISIL (Islamic State in Iraq and the Levant) who were planning attacks during New Year’s celebrations.

December 19, 2017: The government revealed that it has issued 226 international arrest warrants for Algerians (including 21 foreigners resident in Algeria) suspected of Islamic terrorist activity. Most of these suspects are operating in the Sahel region while most of the remainder are believed to be in Syria. The government has also been told that some Algerians who had been with ISIL in Syria had showed up in Afghanistan where ISIL is striving to establish a presence. That is not going well and those Algerians are likely to die in Afghanistan.

December 12, 2017: China put an Algerian communications satellite (built in China) into orbit. Called Alcomsat-1 it should last 15 years. This comes a month after Morocco put its first surveillance satellite into orbit. The 1.1 ton Mohammed VIA is based on a similar French earth observation satellite; Pléiades-HR. Another Moroccan satellite will be launched in 2018. This is part of a secret $590 million deal made with France in 2013. The new photo-satellites orbit 694 kilometers from the earth and will last at least five years. Algeria made the Alcomsat-1 deal with China in 2013.

December 8, 2017: In the east (Skikda province, 500 kilometers from the capita) troops found and destroyed two Islamic terrorist bunkers and seized four rifles, 230 rounds of ammo and some explosives.

November 30, 2017: The government donated $100 million to support the new G5 Sahel counter-terrorism force being organized to the south by France.

November 29, 2017: In the far south, near the town of Bordj Badji Mokhtar on the Mali border, troops found another batch of weapons and ammunition hidden by smugglers before movement into Mali or further north into populated areas of Algeria. This year the flow has been increasingly into Mali and this is the second such batch of weapons found near the border this month. The smugglers have to be more careful because of increased Algerian patrols along its southern borders and increased surveillance by French led counter-terror forces in northern Mali and similar areas to the east and west.

November 27, 2017: In the southeast (Illizi Province) the government sent another aid convoy to border towns where refugees from into Libya were living. Similar aid was sent to other border towns further north. There is not much government on the Libyan side of the border but Algeria supports Tuareg tribes that have clans on both sides of the border and still allows these Tuareg to freely move back and forth..