Order Code RS21532
Updated April 24, 2006
CRS Report for Congress
Received through the CRS Web
Algeria: Current Issues
Carol Migdalovitz
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Summary
The situation in Algeria is generally good. President Abdelaziz Bouteflika was
reelected in 2004 with some manipulation of the political process but without blatant
fraud, suggesting modest progress toward democratization. The voice of the military,
the most significant political force since independence, has been muted. Domestic
terrorism has decreased after a decade of civil conflict, yet Algerians continue to be
linked to terror abroad. The U.S. State Departments lists the two Algerian groups as
Foreign Terrorist Organizations (FTOs). Terrorism provides a rationale for Algeria’s
uneven human rights record. Growing oil revenues have spurred economic growth and
social investment. Bouteflika has energized foreign policy and broadened cooperation
with the United States. This report will be updated if warranted. See also CRS Report
RS20962, Western Sahara: The United Nations Shifts Course.
Government and Politics
Since a 1965 coup, the military has been the most significant political force in
Algeria. In 1992, it carried out another coup to prevent the Islamic Salvation Front (FIS)
from coming to power. In 1999, former Foreign Minister Abdelaziz Bouteflika, a civilian
with military backing, won the presidential election after all other candidates withdrew,
charging fraud. Bouteflika has replaced most of the high command, but the military
probably still will play a role in the choice of his successor. In April 2004, Bouteflika was
re-elected with 83.5% of the vote in a multiparty contest, with the military remaining
officially neutral. International observers hailed the election as progress toward
democratization even though the bureaucracy and judiciary had manipulated the political
process in the pre-election period to favor Bouteflika. Bouteflika’s victory was seen as
an accurate reflection of the popular will and an endorsement of his effort to decrease
violence and for continued political stability.1 It has been speculated that Bouteflika will
seek to modify the constitution in order to run for a third term. After his five-week stay
1 Marwane Ben Yahmed, “Les Raisons D’Un Plebiscite,” Jeune Afrique Intelligent, No. 2258,
18-14 April 2004.
Congressional Research Service ˜ The Library of Congress

---

CRS-2
in a Paris military hospital in late 2005-early 2006 under veiled circumstances, however,
there also has been heightened concern that the 69-year-old leader has no clear successor.

The President heads the Council of Ministers (cabinet) and the High Security
Council, and appoints the Prime Minister, who need not and does not lead the main party
in parliament. The current government is a coalition of the National Liberation Front
(FLN), the Rassemblement National Democratique (RND/Democratic National Rally),
and the moderately Islamist Movement for a Peaceful Society (MPS), and headed by RND
Secretary General Ahmed Ouyahia. Algeria has a bicameral legislature. In the September
2002 elections, the FLN won 199 out of 389 seats in the National People’s Assembly, the
directly elected lower house. Eight other parties and 30 independent deputies also were
elected to the chamber. In December 2003, after Bouteflika’s supporters enfeebled the
FLN because it had failed to endorse him for president, the RND won 17 out of the 46
elected seats in the 144-seat Council of the Nation, upper house, to 11 for the FLN, and
10 for a pro-Bouteflika FLN “corrective movement;” two other parties also won seats.
In February 2005, the FLN reunited, voting Bouteflika “honorary president” and his
loyalist and then foreign minister Abdelaziz Belkhadem as Secretary General of the party.
Terrorism
Between 150,000 and 200,000 lives have been lost to terrorism and related violence
in Algeria since 1992, but casualties have declined sharply in recent years. The Armed
Islamic Group (GIA) and its more active offshoot, the Salafist Group for Preaching and
Combat (GSPC), which seek an Islamist regime, are both on the U.S. State Department’s
list of Foreign Terrorist Organizations. GSPC split from the GIA in 1998, claiming to
disagree with the targeting of civilians and preferring to attack the armed forces, the
regime, and foreign companies which sustain it. GIA now has fewer than 100 members
and has had no leader since January 2005. Its last significant action was in 2001. GSPC
is active, has about 600 members, and declared its allegiance to Al Qaeda in 2003. In
2004, Abd al-Malik Druqdal aka Abu Musab Abd al-Wadud became the GSPC leader.
Government actions have weakened both GIA and GSPC domestically, but Algeria
is viewed as a major source of international terrorists because GSPC is very active
internationally.2 GSPC adherents “appear to have largely co-opted the external networks
of the GIA, active throughout Europe, Africa, and the Middle East.”3 Jane’s Defense
Weekly reported that 2,800 Algerians may have trained in Al Qaeda camps in
Afghanistan,4 and 20 Algerians are being held at the U.S. Naval Base at Guantanamo Bay,
Cuba. Algerians have been found among suicide bombers and terrorists captured in Iraq.
In 2005-2006, GSPC cells were broken up and linked to plots in France, Italy, Spain, and
Canada. The group also still operates the Algerian east and far south, and in the Sahel.
2 “Algerian Militants the Main Terror Threat to Britain,” Scotsman, January 16, 2003, and “In
Europe, Terror Trail leads to Algeria,” Christian Science Monitor, January 28, 2003.
3 U.S. Department of State, Country Reports on Terrorism, 2004, available online at
[http://www.state.gov].
4 Cited in “Algeria: Terrorist Breeding Ground,” Africa Research Bulletin, January 1-31, 2003,
pp. 15154-15155, and other sources. Terrorism experts disagree about the total number of
terrorists trained in Afghanistan. If 60,000 were trained, then the Jane’s figure of 2,800 Algerians
may be reasonable. If only 10,000 were trained, then the 2,800 estimate may be far too high.

---

CRS-3
Several potentially deadly terrorist plots have involved Algerians. In December
1999, Ahmed Ressam, an Algerian who had trained in Afghanistan, was arrested after
attempting to enter the United States from Canada; he was later convicted for the so-
called Millennium Plot to carry out bomb attacks in Los Angeles. His associates and
other Algerians in Canada were linked to the GIA and Al Qaeda. In January 2003, six
Algerians were arrested in a London apartment where traces of ricin, a deadly poison with
no known antidote, were found.
In September 2000, an Algerian national referendum approved an amnesty, called
the “Civil Concord,” for those who fought the government in the 1990s. The policy
diminished, but did not eliminate, domestic terrorism, and members the armed wing of
the Islamic Salvation Front (FIS), the Islamic Salvation Army (AIS), and not the GIA nor
the GSPC, were granted amnesty. In September 2005, another referendum approved the
Charter for Peace and National Reconciliation, offering amnesty to Islamists except
murderers, rapists, and bombers, exemption for security forces from prosecution for
crimes committed in the 1990s, and compensation for families of victims of violence and
the disappeared. The measure did not provide for accountability for the disappeared or
for truth-telling about the role of the security forces, but it may assist in keeping the
military in their barracks.
Human Rights
Under Bouteflika, Algeria’s human rights record has been mixed, worsening in some
areas and improving in others. A state of emergency declared in 1992 remains in effect
to allow the army to play what officials call “an effective part in the war on terrorism,”
and it is used to justify abuses by the security forces.5 A presidential commission
determined that “excesses” of unsupervised security forces were responsible for the
disappearances of 6,146 civilians during the 1992-2000 civil conflict and recommended
compensation. Organizations representing victims’ families claim up to 20,000 victims.
There are allegations of abuse and torture of detainees, arbitrary arrests and
prolonged pre-trial detention, lack of judicial independence, and denial of fair and
expeditious trials. All civil liberties are restricted. Defamation laws have led to the
arrests of journalists and the closure of newspapers, prompting increasing self-censorship
in what was one of the freest presses in the Arab World. The government also refused to
reaccredit several European journalists and Arab television networks. The government
lacks transparency. There is discrimination against women and minorities.6
Berbers, who are the natives of North Africa from before the 7th century Arab
Muslim invasions, seek language and other cultural rights and an end to government
discrimination and neglect. In April 2001 (“black spring”), the death of a Berber youth
in custody sparked riots in which security forces killed 126 people. The government has
since agreed to compensate the victims and recognized the Berber language, Tamazight,
as a national, but not as an official language, as Berber activists want but President
5 “Algerian Premier Reviews Government Performance,” Algerian Radio, March 21, 2006, BBC
Monitoring Middle East.
6 U.S. Department of State, Country Reports on Human Rights Practices - 2005, Algeria, March
8, 2006, online at [http://www.state.gov].

---

CRS-4
Bouteflika opposes. Prime Minister Ouyahia has engaged in a dialogue with Berber
representatives known as the Arouch. In January 2005, the government agreed to
rehabilitate protesters and remove gendarmerie and police from Berber areas, and
established a joint committee to follow up.
Economy
Algeria has the fifth largest natural gas reserves and is the second largest gas exporter
in the world. Hydrocarbons are the
engine of the economy, providing
Basic Facts
about 60% of the budget revenues,
30% of gross domestic product
Population:
32.9 million (July 2006, est.)
(GDP), and 97% of export earnings.7
GDP growth rate:

6% (2005 est.)
High oil prices have boosted foreign
GDP per capita:
$7,200
monetary reserves and economic
Inflation rate:
4.7% (2005 est.)
growth, and enabled a decline in the
Unemployment:
22.5% (2005 est.)
very high unemployment rate and
Exports:
petroleum, gas, petroleum products
early repayment of some foreign
Export Partners: United States, Italy, France,
debt. The government plans to raise
Spain, Canada
crude oil output from 1.5 million to 2
Imports: capital goods, food, consumer goods
million barrels per day by 2010.
Import Partners: France, Italy, German, Spain
Despite the considerable oil and
Source: CIA, World Factbook, March 29, 2006.
gas income, there are chronic
socioeconomic problems in Algeria:
high unemployment and underemployment; inadequate housing, health services, and
education; decaying infrastructure; great inequality of income distribution; and
government corruption.8 An ambitious $60 billion five-year plan for 2005-2009 calls for
investments in infrastructure, housing, and social projects, but implementation has not
begun. Central control of the economy is easing gradually with hundreds of companies
slated for sale. A July 2005 hydrocarbons law diminishes the state energy company’s
(SONATRACH) monopoly and opens the sector to private and foreign investment;
however, there are no plans to sell the company. Algeria has not yet joined the World
Trade Organization.
Foreign Affairs
After independence in 1962, Algeria was in the forefront of Third World politics,
especially the Non-Aligned Movement, and very active in the Arab world and Africa. It
was considerably less active in the 1990’s, when it was preoccupied by domestic violence.
Algeria has reemerged as a regional actor since Bouteflika became President. He worked
with other African leaders to transform the Organization for African Unity into the
African Union. He wants to revive the Arab Maghreb Union (UMA), a loose organization
7 U.S. Department of State, Bureau of Near Eastern Affairs, Background Note: Algeria,
November 2005, online at [http://www.state.gov].
8 Algeria ranks 97 out of 158 on Transparency International’s 2005 Corruption Perceptions
Index, online at [http://www.transparency.org].

---

CRS-5
of Algeria, Libya, Tunisia, Morocco, and Mauritania, but has been stymied by bilateral
Algerian-Moroccan disputes. He also seeks to reform the Arab League so that the post
of secretary general would be rotated and not always be held by an Egyptian.
Algeria’s relations with neighboring Morocco have been strained because Algeria
has supported and hosted the Popular Front for the Liberation of Saqiat al-Hamra and Rio
de Oro (POLISARIO), which seeks the independence of the former Spanish Sahara
known as the Western Sahara. Morocco also claims and largely occupies the region.
Algeria maintains that it is not a party to the conflict and views the problem as one of
“decolonization” to be resolved by the U.N. It supports a plan developed by former U.S.
Secretary of State James Baker as personal envoy of the U.N. Secretary General that
would grant the Western Sahara autonomy for a transitional period until a referendum on
independence is held. Morocco rejects the Baker plan and calls for negotiations between
Algeria and Morocco. Baker resigned in 2004 as the situation deadlocked.
Algeria would like to improve bilateral relations with Morocco by excluding the
Western Sahara issue from that equation. However, Morocco views resolution of the
Sahara issue as a precondition for improved ties, and relations have been unpredictable.
They warmed with ministerial visits, a meeting of leaders at the U.N. in September 2003,
cooperation to counter terrorism and on other functional issues, and with King
Mohammed VI’s first visit to Algiers for an Arab League summit in March 2005.
However, the King refused to attend an UMA summit in Libya that June after Bouteflika
sent a congratulatory message to the POLISARIO on its anniversary, causing the
summit’s cancellation. In March 2006, Algeria agreed to purchase $3.5 billion in Russian
arms, including at least 36 MiG-29SMT fighters, with an option for 20 more, generating
concern in Rabat. (In return, Russia wrote off $4.7 billion in Algerian debt.)
Algeria and France, its former colonizer, have complex relations. France is Algeria’s
major trading partner. More than 2 million Algerians live in France and many more want
visas, but France has reduced the number of visas out of fear of terrorism and absorption
difficulties. With France’s support, Algeria signed an association agreement with the
European Union (EU) in December 2001, and has participated in the Europe-
Mediterranean Partnership (MEDA) since 1995. Under Bouteflika, French-Algerian
relations have warmed considerably. In March 2003, French President Jacques Chirac
made a landmark reconciliation visit to Algeria, and he visited again just one week after
Bouteflika’s 2004 re-election. In July 2004, a French defense minister visited Algeria
for the first time since independence to sign a defense cooperation accord. That same
month, France agreed to swap U.S.$365 million of Algeria’s debt for investments in
Algerian industries. However, a planned treaty of friendship has been postponed due to
Algeria’s demand for an apology for the crimes of colonization after French legislation
extolled the benefits of the period.
Relations with the United States
U.S.-Algerian ties date from a Treaty of Peace and Friendship in 1775. Algerians
have fond memories of President Kennedy’s support for their independence from France.
In subsequent years, however, relations were unsteady, mainly due to ideological
differences during the Cold War. Algeria was a socialist republic with close ties to the
Soviet Union. Relations have been energized in recent years, as Bouteflika visited the
White House in July 2001 and again in November 2001, after the September 11 terrorist

---

CRS-6
attacks. Bouteflika and President Bush also met at the U.N. in September 2003.
Bouteflika attended the June 2004 G-8 summit of industrialized states and Russia in Sea
Island, Georgia at which the Broader Middle East and North Africa Initiative to promote
democracy and political reform was officially introduced.
U.S. policy has tried to balance appreciation for Algeria’s cooperation in the war on
terrorism and the fact of its oil and gas resources with encouragement for democratization.
U.S. officials have urged Algiers to lift the state of emergency and described the April
2004 presidential election as an important phase in a democratic process. Algerian
authorities have shared information regarding terrorists of Algerian origin with the U.S.
and European governments. Algeria receives very limited U.S. aid, mainly for
International Military Education and Training (IMET): $743,000 in FY2006, with
$840,000 requested for FY2007. Algeria is one of the North African and Sahelian
countries participating in the U.S. European Command (EUCOM) Trans-Sahara Counter
Terrorism Initiative (TSCTI). As part of the effort, U.S. Special Forces operate in
southern Algeria and the Sahel to train, equip, and aid national forces in fighting the
GSPC and Al Qaeda.9 U.S. intelligence also is shared.10 Algeria participates in the
NATO-Mediterranean dialogue and in NATO naval exercises, and has expressed interest
in participating in NATO’s Operation Active Endeavor, patrolling the Mediterranean Sea
to detect and deter terrorist activity. In early 2006, FBI Director Robert Mueller and
Secretary of Defense Donald Rumsfeld visited Algeria to discuss cooperation in the fight
against terror.
The United States was first to invest in the hydrocarbon sector after the 2005
liberalization law opened it to foreigners. Economic ties are broadening beyond the
energy sector, where most of the $4.1 billion U.S. investment has been made, to banking
and finance, services, pharmaceuticals, and other industries. In March 2004, President
Bush declared Algeria eligible for duty-free treatment under the Generalized System of
Preferences (GSP).
Despite improving ties, Washington and Algiers strongly disagree about major U.S.
policies in the Middle East. Bouteflika condemned the use of force against Iraq and has
called for the early withdrawal of foreign troops. He criticized U.S. charges against Syria,
but Algeria did not actively oppose U.S. diplomatic efforts in the U.N. Security Council
and abstained from voting on a resolution calling on Syria to withdraw from Lebanon.
Like other Arab governments, Algeria faults U.S. efforts to isolate the Hamas-led
Palestinian government and recently has provided it with $34.5 million in aid.
9 “Desert Shadows,” Africa Confidential, Vol. 45, No. 4, February 10, 2004, p. 8.
10 Brian Whitmore, “US Pushes Antiterror Alliance for North African Nations,” Boston Globe,
April 11, 2004.

---