Algeria is the largest and most powerful nation in the Sahara region, and the third-largest producer of natural gas in the world. Now officials at state-run Sonatrach are saying that oil and gas production should increase in the next five years, reversing a decline.
As investors contemplate new ventures in Algeria, they must also consider the growing security threats spilling over its borders: threats that could make the January 2013 Amenas hostage crisis pale by comparison.
Though Algeria has one of the largest and most powerful military forces in all of Africa, security forces are challenged now by the increasing momentum of weapons and rebel movements from Libya over the past two years; the ongoing conflict in Mali (despite downplaying of this in the media); the emergence of jihadist groups as highly organized criminal networks to ensure intensified recruitment and funding success; and the rise of jihadists in Tunisia coupled with the political crisis there.
Our intelligence wing, OP Tactical, closely monitors the dynamics of these groups across the Sahel in tandem with the movements of other power players in the region to determine changing capabilities, coordination of groups and potential targets.
In the New Year, Algeria will also be challenged by domestic politics with 2014 elections. As we noted in our last report on Algeria in November, the Ruling National Liberation Front (FLN) has designed President Abdelaziz Bouteflika candidate for 2014 elections, though he had vowed he would not seek another term. His allies are now trying to push through constitutional changes that would allow him to run for a fourth term. (While we have not seen a draft of this proposed constitution, the key element of it adds a new position—that of vice president—which would allow the ailing Bouteflika to run again with the safety net of a vice-president to replace him if need be).
In the event that the president does not, or cannot, run for re-election, the stage has been set for a loyalist to take his place. The lynchpin of his strategy has been to reduce the power of the highly influential director of the intelligence service (DRS), Mohamed Mediene, by transferring some of the DRS’ mandates to the army. Two other key intelligence figures have been removed, somewhat lessening the DRS’ ability to maneuver politically. Within the ruling FLN political party, there have also been some important changes. Bouteflika’s choice for party leader, Amar Saadani, has been installed over the DRS rival for this spot.
As we noted in November, while these moves do not secure the presidency for Bouteflika or one of his loyalists, they do better position him and his camp ahead of the elections.
The Threat from Libya
The impotent transitional government in Libya cannot contain the myriad militias who are regrouping for control of Libya’s key resources. In November, we took you through our concerns about Libya, and noted that we see the situation reaching its climax in 2014, which will have a major impact on neighboring Algeria.
There are indications that another attack is being planned. There is also evidence that militant groups have been highly successful in weapons trafficking and fundraising. This is even more the case if the French have indeed paid a 25 million euro ransom for the release of four hostages in November as alleged by French intelligence leaks and leaks from officials in Niger, which helped negotiate the release of the hostages.
We also noted our particular concern about security in Illizi province, which is at the heart of Algeria’s oil development strategy and where production at El-Merk began in late October. It is one of the areas most vulnerable to the growing instability in Libya.
That instability will only worsen over the coming months, as the government continues its downward spiral. On 27 December, hundreds of Libyan protesters rallied in the capital, Tripoli, and in Benghazi, against the interim parliament's decision to extend its mandate for nearly a year, delaying the drafting of the constitution and new elections. A new constitution and new parliamentary elections were promised before February 2014, and now have been set for 24 December 2014.
Threats from Tunisia
Tunisia’s current political crisis is very much related to an increase in jihadist activities in the country’s Jebel Chaambi mountains, near the border with Algeria. Tunisia’s secularists do not feel safe; nor has the interim Islamist-led government done enough to ensure them that they have the political will to combat radical Islamist forces. Indeed, Tunisia is the newest stage for jihadists organized crime networks—the most recent emerging venue for weapons trafficking and cross-border rebel movements. Tunisia’s military is incapable of dealing with this threat on its own, leaving the greater responsibility Algeria to protect its borders. But as the threats expand to multiple borders, Algeria’s security forces get stretched thinly.
Threats from the Wider Sahel
Algeria’s counter-terrorism efforts have been among the best, but these very efforts have forced a reshaping of terrorism and a geographical redirection. What started out in the 1990s as a largely Algerian jihadist group called the GSPC later metamorphosed into al-Qaeda in the Islamic Maghreb (AQIM), which was essentially forced out of Algeria and now has become a much more diverse Sahel-wide grouping. AQIM is no longer a localized group, but a regional network. It no longer directly threatens Algeria, but it poses a great threat to its borders—from Tunisia, Libya, Mali and Mauritania. The threat has by no means diminished and intelligence on jihadists movements around Algeria’s border regions—along with caches of weapons discovered in these areas—indicates that Algeria remains a top target for attack.
Security strategies—not only in Algeria, but across the board—have failed to change and adapt quickly enough and remain hindered by the failure to treat AQIM and the myriad groups linked to it as organized criminal networks rather than terrorists. Their leaders vie for position based on their drug-trafficking and kidnapping capabilities and loyalties are constantly shifting.
The choice of targets is also highly dynamic, especially since Mali. No longer are security forces and government installations priority targets; instead, the targets are chosen for their ability to cause deeper damage, financial damage, which puts natural resources at the top spot. Targeting natural resources and particularly Western companies developing them has a two-fold effect: 1) it can cause halts in production and high-cost damages; 2) it shakes investor confidence and can lead to pullouts and a reduction in new investment.