October Algeria monthly report (Part I)

ALGERIA MONTHLY SITUATION REPORT #118

October 17, 2012

Executive Summary

· The new government headed by Abdelmalek Sellal will have its hands full fending off socio-economic challenges in the year and a half left before the presidential election.

· Current expenditure having been pumped up by last year’s public sector pay rises, capital expenditure has been reined in for the first time in years in the 2013 budget. Even so, the government may be unable to balance the budget if oil prices weaken even moderately.

– An explosion in international grain prices is set to test the regime’s strategy of ‘buying’ social peace to the limits.

· There are signs of a crackdown on potential ‘troublemakers’, in particular human rights activists and independent trade union organisers.

· Public Works Minister Amar Ghoul has established a new party, TAJ, with what seems to be the tacit complicity of the authorities.

· There is speculation that Ghoul is being groomed as a possible successor for Bouteflika in 2014, or at least as a vice president if and when the constitution is amended.

· Algiers has spent much of September and early October battling a French-backed diplomatic push in favour of military intervention in northern Mali.

– Although it has every reason to distrust the jihadist quasi-state that has emerged in northern Mali, Algiers fears the political and geopolitical consequences of military intervention and distrusts Paris’ motives.

· The gap between the French and the Algerians has lessened somewhat since UNSC Res. 2017, which calls for negotiations towards a peaceful settlement in northern Mali before the use of force can be authorised as a last resort, was passed with American backing,.

· But with little chance of negotiations succeeding, tensions between Paris and Algiers are likely to re-emerge before François Hollande’s visit to Algiers, tentatively scheduled for early December.

· With levels of violence lower than average nationwide and particularly low in Kabylia, the question of whether the jihadist organisation’s capability in its historic heartland has been lastingly degraded remains open.

· On the other hand, there has been an upsurge in incidents on Algeria’s southern borders, including one operation in which a number of SA-7 man-portable air defence systems, smuggled out of Libya, were reportedly seized by the security forces.

· As international discussions continue as to the possibility of a military intervention against the jihadist entity in northern Mali, Gendarmerie commanders from all the wilayas bordering on Mali and Libya have been summoned by their national command to a meeting in Tamanrasset to review border security.