February 9, 2017: January saw a continued decline in Islamic terrorist activity with only five Islamic terrorists killed and five captured. In addition 28 Islamic terrorism supporters were arrested and the bodies of two Islamic terrorists were found in the countryside along with 46 bunkers used by Islamic terrorists. Most bunkers were empty but those that were not contained 23 automatic rifles, 39 semi-automatic and single shot rifles, 1,600 rounds of rifle and pistol ammo, four rockets, two RPG launchers, two mortars, four bomb making workshops, 30 crude bombs, along with seven cell phones and other equipment. On the borders, mainly in the south, 128 smugglers were arrested and several hundred tons of food, consumer goods and fuel seized. Also intercepted were 1,301 illegal migrants, which have become a lucrative business for the smugglers.

For all of 2016 125 Islamic terrorists were killed. This included fifteen ISIL (Islamic State in Iraq and the Levant) members and nearly all once belonged to AQIM (Al Qaeda in the Islamic Maghreb), which was formed in 2007 from several of the 1990s era Algerian groups. Most of these clashes took place east of the capital or in the far south near the borders of Mali, Niger and Libya. Algeria is one of the growing number of North African nations (like Morocco, Tunisia and Egypt) that are defeating Islamic terrorism. Despite efforts by popular (elsewhere) Islamic terror groups to get established in Algeria the local population and security forces have successfully opposed this. In 2016 230 Islamic terrorists were arrested or surrendered. That’s an increase over 2015 as is success in finding hideouts (over 460) and arms caches (containing over 750 assault rifles, machine-guns and sniper rifles as well as over four tons of ammo and explosives) belonging to Islamic terror groups. When Islamic terrorists lose this much infrastructure and armed supporters they are in big trouble. This can be seen in the declining number of terror attacks and growing number of Islamic terrorists clashing with the security forces and losing.

The Arab Spring made only a slight impact in Algeria and Islamic terrorists are few and very much on the defensive. Islamic terrorist violence continued to decline in 2016 and most Algerians are more concerned with economic issues, corruption and bad government. The popular rejection of Islamic terrorists was largely because many Algerians are still traumatized by the 1990s war against Islamic terrorists. With so many civilians hostile to Islamic radicalism and willing to phone in a tip via the growing cell phone network, Algeria has become a very dangerous place for Islamic terrorists. Algerian Islamic radicals tried to capitalize on the Arab Spring unrest in neighboring Tunisia and Libya. But in both those countries, the popular uprising was against the local dictators and for democracy, not for an Islamic religious dictatorship. Islamic political parties were popular, but not Islamic radicals. The uprisings in Tunisia and Libya weakened the local security forces, and made it easier for Islamic radicals to move around and recruit. Algeria was able insulate itself from this. Many expect another, and larger, Arab Spring in Algeria eventually but so far the geriatric government is making concessions and trying to reform itself. This is delaying another revolution rather than preventing it. Meanwhile Tunisia next door, the first Arab state to rebel in 2011, is so far the only one to do so successfully.

The southern neighbor Mali is suffering from more Islamic terrorist activity and the main source of this violence is AQIM which now operates throughout northern and west-central Africa. Because AQIM leadership still contains a lot of Algerians the Algerian government has been helpful to African nations where AQIM is operating. AQIM now spends most of its time smuggling drugs, people and whatever else pays (like kidnapping Westerners). AQIM carries out or sponsors (with money, weapons and advice) smaller groups to carry out attacks and share the credit. AQIM likes to stay in the headlines. Veteran AQIM leader Mokhtar Belmokhtar is another Algerian who has survived and went on to found and lead AQIM affiliate al Mourabitoun. Belmokhtar has been responsible for many high-profile attacks in Libya, Algeria, Niger and Mali since 2011. He was believed to have been killed in a late November 2016 by a French airstrike in Libya but as of early 2017 there has still not been any confirmation and the some recent AQIM attacks in Mali mentioned Belmokhtar as one of those responsible. The U.S. has long offered a $5 million reward for information that would lead to the death or capture of Belmokhtar.

Economics

The government has cut their budget 17 percent in 2017 after a nine percent cut in 2016. The cuts are necessary to reduce the budget deficit (8 percent of GDP in 2017 versus 15 percent for 2016). There are limits on how long these deficits can be tolerated. The deficits are covered by drawing on cash reserves (essential to pay for imports, especially food) built up (to about $200 billion) before 2013. In 2015 these reserves fell 22 percent to $143 billion and in 2016 another 20 percent to $114 billion. Given the uncertain efforts are being made to reduce reserves only about ten percent depending on the price of oil. Current estimates are that the foreign exchange reserves can be drawn on for another six or seven years. After that severe cuts will have to be made and there will be much unrest. To avoid that the government has actually addressed (or at least admitted to) problems like corruption and mismanagement that have long crippled the economy and created popular discontent. This led to the Islamic terrorist uprising of the 1990s. That was defeated but not forgotten. The Islamic radicals still have supporters, especially among men under age 30 (about 30 percent of whom are unemployed). The government has tried, especially since 2010, to reduce the youth unemployment rate but so far has not had much success. But the government still has a chance because economic reforms have enabled Algeria to keep GDP growing despite the price of oil dropping fifty percent in the last three years and not showing any sign of increasing.

The major oil producing nations (the OPEC cartel) agreed in 2016 to limit production in an effort drive prices up. That may get oil up to $60 a barrel in 2017 but that will not, as hoped, keep large scale American production from rising because of fracking. OPEC, mainly Russia, the Arabs and Iranians , underestimates the fact the American fracking technology is changing the oil market more than anything else. Even with record low prices the fracking industry survives and as the price of oil goes up more fracking operations resume production. American frackers believe that they can efficiently produce a lot more fracked oil and natural gas at $60 and that will, at best, prevent prices from rising any further. Most OPEC nations had become dependent on a $100 per barrel price and that may never be achieved again, at least not in the near future.

Mindful of that in 2015 the government announces plans to drill more than 200 natural gas wells in the south (over a thousand kilometers from the coast) and use fracking to extract 20 trillion cubic meters of gas a year. That would bring in over $60 billion a year in sales. There have been protests against this program in the south because of the disruption the construction and operation of the wells would bring to the area. The locals also do not trust the government to handle the water problem (lots of water is used in fracking) in a responsible manner. Algeria has one of the largest deposits of frackable natural gas in the world. The need for more income may change minds in Algeria.

Even as that GDP growth keeps moving towards four percent a year it will not quickly fix the jobs shortage. If the population growth rate remains under two percent and the economic growth continues lowering the youth unemployment rate is still possible. Meanwhile the government also had success, largely because of popular support, in shutting down mosques and religious schools run by Islamic conservative clergy that support Islamic terrorism. The collapse in oil prices provides a brief opportunity and so far Algeria is making the best of it, which is unusual in this part of the world.

February 5, 2017: In Bejaia province (220 kilometers east of the capital) troops found two bunkers apparently used by Islamic terrorists because these hideouts contained bomb components.

February 1, 2017: In the southeast (Illizi Province) troops patrolling the Libyan border had a tip about a route from Libya that was being used by Islamic terrorists and smugglers. The troops spotted and ambushed three Islamic terrorists coming from Libya and killed them. The three were smuggling 33 kg (73 pounds) of hashish.

January 27, 2017: Neighboring Morocco rounded up a group of students (the leader was 20) who had organized an ISIL cell and obtained weapons. Police seized a submachine gun and seven pistols plus ammo and some explosives. The suspects said they had obtained the weapons from a smuggler operating out of Algeria. The weapons were traced to Libya, where several hundred thousand rifles, pistols and other weapons were stolen from government warehouses during the 2011 revolution. The students planned to kill politicians and bomb embassies.

January 26, 2017: In the east (Setif province, 300 kilometers from the capital) arrested three people wanted for providing support to Islamic terror groups.

January 20, 2017: In Jijel Province (365 kilometers east of the capital) an army ambush killed one Islamic terrorists although others may have fled.

January 17, 2017: Libyan politicians from the HoR (House of Representatives) faction met with Algerian leaders to discuss Algerian efforts to achieve a stable government in Libya. The UN does not recognize the HoR faction, which is the major obstacle to establishing a national government in Libya. Egypt and many other Arab states, plus Russia, back HoR over the UN recognized GNA (Government of National Accord) based in Tripoli. GNA controls most of western Libya. In the east the previous government (that UN supervised elections replaced with GNA) is still in charge from its capital in Tobruk. Algeria has regular talks with leaders from both governments and is not taking sides, at least not yet but clearly favors the HoR.

January 11, 2017: In the east (Skikda province, 510 kilometers from the capital) soldiers encountered and killed two Islamic terrorists. An assault rifle and semi-automatic rifle were seized.

The Russian aircraft carrier Kuznetsov and its escorts arrived off the coast of eastern Libya. The carrier sent a helicopter to nearby Tobruk and picked up Khalifa Hiftar and two other senior officers (all in uniform) and took them to the carrier. The visit to the Kuznetsov was captured on video and broadcast. The video showed the event treated as an official visit with sailors in dress uniforms lined up and a band playing the Libyan national anthem. Hiftar was given a tour of the ship and then held a video conference (not shown) with the Russian defense minister back in Moscow. Hiftar has been trying to get Russia to defy the UN arms embargo and provide pro-Hiftar forces with weapons. Apparently this “official visit” signaled that Russia was willing to deal and later reports from Libya indicated that Russia will now supply the Hiftar forces with over a billion dollars’ worth of weapons. Hiftar is the head of the armed forces for one of the two rival governments Hiftar is the most powerful man in eastern Libya. He has cultivated contacts in Russia, which believes Hiftar is someone who will still wield power when peace returns to Libya and will be able to help Russia to once more become the major arms supplier to Libya. Hiftar made two trips to Moscow in 2016 (June and November). Hiftar visits Egypt regularly. Hiftar has managed to keep Egypt, a few other Arab states and Russia providing support. Egypt allows banned goods (like weapons and ammo) to cross the border unhindered. Russia is known to have printed new currency for HoR earlier in 2016 and has provided unspecified military support. Russia also provides HoR with some support inside the UN as Russia is one of the few countries that can veto proposed UN resolutions. Egypt is particularly important because it is again run by a former general and feels Libya needs the same kind of leader. But Egypt is under a lot of pressure from the UN to get behind the GNA, which Egypt sees as too cozy with Islamic conservative groups. Algeria feels the same way as do many Tunisians.

January 2, 2017: In Bouira province (120 kilometers southeast of the capital) there were violent protests against worsening economic conditions (budget cuts, unemployment and inflation) that spread to neighboring Bejaia province.