Excerpt from document
(C) We and the Algerians are looking forward to your
visit next week. There was a prominent article about your
visit, generated with help from our PAO, in best-selling
el-Khabar newspaper on February 21. You will be visiting
just as the government machine is gearing up to amend the
Algerian constitution to enable President Bouteflika to run
for a third term in 2009. There is no strong, influential
voice criticizing this effort; only small parties and a few
notable individuals have spoken against the building momentum
(ref A).

Full Document
ClassificationSECRET//NOFORN Header
VZCZCXRO5451
PP RUEHCD
DE RUEHAS #0198/01 0531128
ZNY SSSSS ZZH
P 221128Z FEB 08 ZDS
FM AMEMBASSY ALGIERS
TO RUEHC/SECSTATE WASHDC PRIORITY 5295
INFO RUEHRB/AMEMBASSY RABAT 2178
RUEHTU/AMEMBASSY TUNIS 7030
RUEHCL/AMCONSUL CASABLANCA 3265
RUEPGBA/CDR USEUCOM INTEL VAIHINGEN GE
Content
S E C R E T SECTION 01 OF 04 ALGIERS 000198

SIPDIS

C O R R E C T E D COPY --CHANGE OF CLASSIFICATION

NOFORN
SIPDIS

NEA FOR K.HARRINGTON AND M.POPAL

E.O. 12958: DECL: 02/22/2023
TAGS: PREL, PGOV, AG
SUBJECT: SCENE SETTER FOR A/S WELCH VISIT TO ALGERIA

REF: A. ALGIERS 111
B. ALGIERS 110 AND ALGIERS 140
C. 07 ALGIERS 1806
D. 07 ALGIERS 1807 AND 08 ALGIERS 0075
E. ALGIERS 141

Classified By: Ambassador Robert Ford, reason 1.4 (b) and (d)

1. (C) We and the Algerians are looking forward to your
visit next week. There was a prominent article about your
visit, generated with help from our PAO, in best-selling
el-Khabar newspaper on February 21. You will be visiting
just as the government machine is gearing up to amend the
Algerian constitution to enable President Bouteflika to run
for a third term in 2009. There is no strong, influential
voice criticizing this effort; only small parties and a few
notable individuals have spoken against the building momentum
(ref A). The only issue that appears unresolved inside the
top civilian and military leadership is whether or not there
should be a change to the constitution that establishes a
vice president as well. This vice president would be the
obvious successor to Bouteflika, especially if his health
prevents him from serving out a third term that would expire
in 2014. We are arranging for you to meet with former Prime
Minister Ouyahia, the man most frequently thought to be
tapped for vice president.

AN UNHAPPY COUNTRY
------------------

2. (C) There is much discussion among political circles
about the constitution, the third term and the succession
issue, but precious little discussion about how to address
long-standing political alienation and social discontent
throughout the country. Housing is woefully short, while
unemployment and underemployment are endemic (at least 50
percent among young people). In a relatively new phenomenon,
many young people are trying to flee the country, by small
boat if necessary. The average age at which Algerians marry
is now into the mid 30s - a vivid indicator of how unhappy
the twenty-somethings are. Meanwhile, most world food price
hikes are being passed to consumers, resulting in strikes by
different labor groups almost weekly (see ref B for example.
Notably, while you are here we expect school teachers
nationwide to strike; on the positive side, school closures
may ease traffic during your visit, inshallah.) Almost daily
there are isolated demonstrations with the occasional
government office in some distant town attacked. Meanwhile,
voter turnout for the 2007 legislative and local elections
was lower than ever before because Algeria's young people do
not see the political system as having any relevance to
addressing their problems. This is not the quaking state of
the early 1990s. The government is firmly entrenched.
However, much of political and social elite sense that
Algeria is drifting (see also ref C).

THE VISION THING
----------------

3. (C) These political, economic and social problems
notwithstanding, Algeria is richer than ever. The oil and
gas sector is running up record export revenues - USD 70
billion likely in 2007, while imports will only be about USD
45 billion, according to the IMF. As a result, the GoA is
piling up record foreign exchange reserves, now around USD
110 billion. The public knows about the riches and the GoA's
inability to relieve problems like housing and unemployment
hits at the GoA's credibility. Bouteflika and his team have
only one approach to energize the economy: spend tens of
billions of dollars on infrastructure as well as some
grandiose projects to generate jobs and also create a
Bouteflika legacy. The construction industry is growing but
not as fast as in other oil-boom states. Red tape,
burdensome regulations and centralization slow project
implementation and impede new private investment. The GoA
seems incapable of addressing these systemic problems. This
inability stems from a lack of vision at the top. Bouteflika
and his team have yet to make a choice on whether Algeria
will be a market-driven economy where Algerians must
integrate into the world economy or an economy whose
government still provides the old social contract of the
1960s and 1970s. We have small technical assistance projects
to help the GoA reform its financial and education sectors,
but bureaucratic ineptitude and a lack of Algerian urgency
slow progress. We therefore extract small, new reforms where
we can get them. (Treasury DAS McDonald will be here at the
same time as you to look at Treasury-funded assistance

ALGIERS 00000198 002 OF 004

programming.)

TERRORISM PROBLEM NOT A THREAT TO STABILITY
-------------------------------------------

4. (S/NF) The social discontent enables al-Qaida in the
Lands of the Islamic Maghreb (AQIM) to find a steady supply
of recruits but not enough to threaten stability. There are
terror-related attacks almost daily now, usually in the
mountains east of Algiers. (There are occasional attacks in
southern and western Algeria now too.) AQIM and other
Islamist extremists usually hit Algerian security forces, but
there are regular threats against Western interests,
especially French and American. The terrorists' tactics have
not much changed except in one important manner: nine
suicide car bomb attacks since April 2007. AQIM can't
threaten the government's stability but it has hurt the
credibility of Bouteflika's national amnesty program; it
likely weakened him in internal debates with the Algerian
hard-liners inside the security force leadership. It has
hurt the credibility of the Algerian security forces among
the Algerian public and the Western community here. In
particular, the December 2007 attack that destroyed the UN
headquarters here deeply embarrassed the Algerian government.
When the UN said it would conduct its own investigation into
the security shortcomings before the attack, the
hypersensitive Algerian authorities reacted vehemently and
forced the UN to back down. Watching this brittle response,
Western companies and embassies now are jittery. Many say
that they are watching us for signals on when to send out
expatriates. Algiers has seen no incidents since December 11
but there are constant threat reports in sensitive channels.

COUNTER-TERROR COOPERATION VERY GOOD
------------------------------------

5. (S/NF) As the AQIM threat has ratcheted up, we have
increased our collaboration with Algerian military
intelligence. They are prickly, paranoid group to work with,
but with them we have rolled up several networks that sent
Algerian jihadis to Iraq. According to information from an
al-Qaida in Iraq cell, 64 Algerian fighters reached Iraq
between August 2006 and August 2007. Thus, our collective
work is not perfect, but the number of Algerians fighting in
Iraq likely would have been far higher were we not working
closely together. We have also helped the GoA roll up AQIM
networks that were planning attacks inside Algeria. Notably,
the Algerian authorities do not like to discuss our
cooperation against AQIM publicly. Instead, they limit
themselves to saying that they cooperate with the U.S. and
other nations against international terror networks. We have
a new FBI office at the embassy that we hope will establish
collaborative programs with the Interior Ministry, but the
Algerians are not rushing to cooperate.

MILITARY TO MILITARY: WE MUST BE PATIENT
-----------------------------------------

6. (S/NF) While the Algerians are not rushing to expand our
mil-mil relationship. it is slowly growing. For the first
time in early 2007 the Algerians themselves proposed some
joint activities, and we undertook training exercises here
involving the navy and air force. AFRICOM has offered much
more, but the Algerians purposely keep a foot on the brake.
They want to avoid dependence in their military relations, so
they spread out activities among foreign partners. They have
limited administrative capacity, and the officers who work on
bilateral activities with France or Germany or Russia are the
same ones who work with us. They are not good at
multi-tasking. Part of the Algerian caution also results
from bureaucratic gamesmanship and paranoia. In contrast to
programming with some other countries, Algerian military
intelligence clears all our bilateral military activities.
(They likely seek to enhance their own position within the
Algerian power structure by controlling the security
relationship with the U.S.) In addition, GoA security
personnel are exceptionally careful in their contacts with
foreigners due to their CI concerns. Probably because
Algerian military intelligence was not ready, the Algerians
lost their chance to have a high-level bilateral military
committee meeting at the Pentagon in April 2008 that would
have drawn up plans for expanded activities into 2009. Their
failure to reserve the April dates probably will push that
meeting into the autumn or even to the next administration.
We warned them clearly but their own system was too sclerotic
to respond.

ALGIERS 00000198 003 OF 004

REGIONAL POLICIES: FAR APART FROM US
-------------------------------------

7. (C) Bouteflika is very much his own foreign minister and
his thinking about regional politics has evolved little from
the 1970s. He loyally attends all the NAM and African Union
summits, and he places huge weight on the United Nations,
liberation ideology and negotiation over use of force
(especially Western armed forces). The Algerians are
surprisingly ill informed when events are moving in the
region; they also lack a good grounding in underlying trends
in areas like the Middle East. Arab satellite TV seems to be
a big source of their information. Hence, you will find that
the Algerians take nettlesome positions on the regional
questions of import to us:

-- Peace Process: They line up behind the Arab League
consensus, arguing in private that it is hopeless to try to
exclude Syria and Hamas from the efforts to reach a
settlement (ref D). They appreciate our pledge to work for a
viable Palestinian state and to achieve short-term, concrete
improvements for the Palestinians. So far, we have seen
little enthusiasm in response to our demarches for more aid
to the Palestinian Authority, but they likely would respond
to a strong request from the Arab League. The Algerian
public, particularly the Islamists, is now less preoccupied
with violence in Algeria and vehemently anti-Israeli. The
GoA, therefore, is unlikely to make any unilateral gestures
to Israel.

-- Lebanon: The Algerians back Arab League efforts and hope
for consensus to develop among the Lebanese factions. Their
senior MFA official working Middle East issues has repeatedly
cautioned us against trying to isolate Syria on Lebanese
issues (ref E). Underlining how our efforts complement Arab
League efforts will make the most headway with the Algerians.

-- Iraq: President Bouteflika told Senator Nelson last
summer that the U.S. should not withdraw too quickly from
Iraq lest security deteriorate further. The MFA and Algerian
military intelligence have made the same point to us more
recently, although publicly the GoA says little. There is an
Iraqi embassy in Algiers, but relations with the Iraqi
Government are cool. The Algerians have no intention of
reopening an embassy in Baghdad. In part, they are still
angry about the murder of two of their diplomats in Baghdad
in 2005. Despite their repeated inquiries, they have
received no information on who was responsible. In addition,
public and government distrust of the Iraqi Shia makes the
GoA unwilling to take any risks on Iraq policy. Their
military intelligence likely would work discretely with Iraqi
intelligence to disrupt al-Qaida activities, but we doubt
Algerian officers would actually go to Iraq.

-- Iran: Algerian officials remember Iranian support for
Algerian Islamists in the early 1990s and are suspicious of
Iran's regional intent. President Bouteflika in private has
told the Iranian President to cooperate with the UN on the
nuclear issue. The GoA is also adamant that we should
continue on the diplomatic track and recognize even small
Iranian steps when we see them; they were reluctant to
endorse more pressure on Iran during Ambassador Schulte's
visit here in late November. The Algerian leadership has a
bit of sympathy for Hizballah and Hamas as liberation
fighters, but their heads tell them to be wary. Thus, you
will hear understanding from them when we warn them of the
dangers of these terror groups, but the Algerians will
immediately insist that Israel and the U.S. have to resolve
the Palestinian and Lebanese problems. Underlining how
Hizballah and Hamas threaten the very progress on the
Lebanese and Palestinian issues that the GoA wants will be
the most effective arguments.

-- Western Sahara: This is the issue that the GoA cares the
most about and you will likely receive an earful. The GoA
still lingers over the hope that the Baker Plan will come
back despite our telling them repeatedly that it is finished.
The top Algerian leadership stress that they view a Saharan
referendum on independence as a matter of national liberation
as a matter of principle. They don't want to destabilize
Morocco, and they doubt the Western Sahara is so important to
the throne's hold on power. They do not want to start armed
hostilities, although we are less sure they would - or could
- stop every possible Polisario provocation. The Algerians
likely will try to wait for the end of this American
administration hoping that the next one will be less
supportive of the Moroccan autonomy proposal. Explaining the

ALGIERS 00000198 004 OF 004

exhaustion of broad American patience with the long-standing
dispute will be the best way of shaking loose the Algerian
fixation on Baker.

AND THE GUANTANAMO PROBLEM
--------------------------

8. (S) For the past two years we have sought GoA approval
for the repatriation of some of the two dozen Algerians held
at the facility. During the April 2007 visit of S/WCI
Williamson we all agreed on principles to govern the return
of Algerians, but since then the GoA has refused to agree to
accept even a single detainee back despite our repeated
attempts. We think that President Bouteflika and military
intelligence chief LTG Medienne agree that it would be
harmful to Algeria to take any detainees back, and that
consensus at the very top makes any movement by lower
officials impossible. The GoA has told us we can send
detainees back to the countries where we detained them, such
as Pakistan and Afghanistan. This is a non-starter. We need
you to explain firmly that the Guantanamo detainee issue will
not go away and probably will become more important in the
next year as we move closer to shutting down the detention
center at Guantanamo.

FORD