ALGERIA: GROWING CHALLENGES FOR BENDJEDID

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T00114R000600680001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 6
• Document Creation Date: December 27, 2016
• Document Release Date: February 10, 2012
• Sequence Number: 1
• Publication Date: January 7, 1987
• Content Type: MEMO

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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
7 January 1987
Algeria: Growing Challenges For Bendjedid
Summary
The eight-year-old regime of President Chadli
Bendjedid is both internal factionalized and struggling
to manage growing public disgruntlement. At the heart
of Bendjedid's difficulties is the country's
oil-related economic crisis, which has hamstrung
government efforts to deal with serious social
problems. The economic downturn has aggravated
factionalism within the government, party, and
military, and has fueled personality clashes and
bureaucratic rivalry. The internal debate is a battle
over policy, pitting Bendjedid against old guard
leftists opposed to the President's economic reforms
and opening toward the West. Bendjedid's position
appears fairly secure; nevertheless, he is likely to
face economic and political difficulties this year of
such magnitude that his position will weaken, forcing
him to compromise with opponents. As a result, he
probably will be less able to promote closer ties with
the United States; moreover, expanding US-Moroccan
military cooperation and Algiers' diplomatic courtship
of Libya also will complicate relations with
Washington.
President Chadli Bendjedid is facing the most serious
challenge to his regime since he took office in 1979. The
drastic drop in hydrocarbon prices on the international market
last spring lead to an economic crisis because of a loss of 50
percent of oil income, according to the US Embassy in Algiers.
This memorandum was prepared by
the Maghreb Branch, Arab-Israeli Division, Office of
Near Eastern and South Asian Analysis, Information as of 7
January 1987 was used in its preparation. Questions and comments
should be directed to Chief, Arab-Israeli Division
NESA M#87-,'000lC.
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Ninety-eight percent of the country's export receipts, nearly 50
percent of government revenues, and about 25 percent of the GDP
come from hydrocarbons. To deal with the financial shortfalls,
the government cut its operation budget, reduced development and
F_ I
investment expenditures, and slashed imports.
Consequently, for the first time since independence, economic
growth in 1985 was less than the annual 3 percent increase in
population. The new round of austerity measures has required the
government to cut programs addressing social problems. We
believe unemployment has reached 25 percent in many areas, and
unemployment and underemployment together may exceed 30 percent.
Food, water, and housing shortages -- and their cost -- also have
become increasingly burdensome for the rapidly growing
population. For example, the Embassy says a kilogram of meat now
costs $30.
Economic strains seem to have increased social tensions.
Last November, rioting by students and the unemployed rocked
Constantine, the third-largest city, and minor disturbances
occurred in other cities including Algiers. The violence appears
to have stemmed from poor living conditions and grievances over
corruption among government officials. These incidents were the
first serious outbreaks of violence attributable to economic
conditions since Bendjedid took power. The regime also is
concerned about the growing assertiveness of Muslim brotherhood
dissidents
Internal Politics: From Consensus to Conflict
Public disturbances have encouraged more infighting within
the regime. Bendjedid is most vulnerable to attack from leftist
ideologues of the ruling National Liberation Front (FLN) and
government bureaucrats who want expanded welfare programs to meet
the needs of youth and the unemployed, and from religious groups
who claim that a return to the country's Islamic roots is the
panacea. Although the regime has featured a high degree of
collective decisionmaking incorporating the views of these
elements, bickering has intensified over the allocation of
resources.
Information on power centers within the government is sketchy
and often inconsistent, mainly because the country's tight-knit,
military-civilian oligarchy has cliques that cut across clan and
professional lines.
group and a tists in the FLN and Army, led by Permanent
Secretary Messaadia, who want to preserve the socialist aspect of
the Algerian revolution. They object to the President's efforts
to reform the economy by encouraging privitization and local
government initiative. These ideologues also oppose Bendjedid's
diplomatic opening to the United States and favor strengthened
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ties with the Soviet Union, Libya, and other radical states.
Although these differences are largely concealed from the public,
increasingly the various sides have carried the dispute into the
national press.
The debate within the FLN, moreover, is widening to include
broader segments of the military. The faltering economy has
delayed long-sought modernization of the military and has led to
morale problems within the officer corps. These developments, in
turn, have strengthened the hand of those officers critical of
the President. Feuding between the President and officers over
promotions, strike activity within some units, and the Army's
response to austerity measures has led Bendjedid to reassert his
hold over the military. In late November, following a rare
meeting with the senior echelon of the Army, the President fired
former Staff Benloucif and reorganized the presidential
guard, probabl as
a preemptive move against poten is coup
we believe Bendjedid acted because he
thought Benlouci was attempting to challenge his authority.
Benloucif's replacement, General Belhoucet, probably is less
sympathetic to the idea of developing ties with the United
States.
Prospects for Bendjedid
In our judgment, Bendjedid remains first among equals within
the country's ruling military hierarchy and is not in immediate
danger of losing his position. The President's various opponents
from within the regime or outside the government have yet to
coalesce against him. Benjedid demonstrated in his removal of
Benloucif that he can have his way with preeminent power over the
military. He continues to hold firm on the need for economic
reform and we believe his agenda remains intact.
Nevertheless, Bendjedid's political position has slipped
somewhat over the past year, and he will face even greater
challenges unless he comes to grips with the deteriorating
economy in our view. For example, the President made several
senior personnel shifts in the cabinet and FLN in 1985 and early
1986 in line with his effort to revise the country's economic
policies and consolidate power, but he has not been able to make
any other significant changes in nearly a year. In addition, he
failed to deliver what the US Embassy was told by Algerian
officials would be a landmark speech on the economy in Oran
during early November. According to the US Embassy, the 17th
session of the FLN Central Committee in December witnessed stiff
resistance to Bendjedid's reforms.
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Given the strong likelihood of continuing financial
austerity, President Bendjedid probably will not be able to make
much progress in achieving economic reform. Moreover, he
probably will be forced to divert resources from the public
sector to the military to placate officers and bolster his
tarnished image. We believe austerity probably will encourage
the government to continue traditional socialist policies, even
though reform probably would alleviate at least some of the
economic and social problems.
Implications for the United States
Algeria's foreign policy probably will become more ambiguous
because of the country's political drift. Bendjedid's weaker
position and need to balance political factions will result in
inconsistent or even contradictory decisions. For the United
States, such a course would, in our view, probably mean limited
progress in bilateral ties, or even a deteroriation of relations,
because of the continuing importance of radicals in the regime.
In any event, Algiers will have fewer funds available to purchase
military equipment from Washington, and US commercial firms will
have fewer business opportunities given economic austerity
In addition, Algerian-US relations with regard to North
Africa are likely to suffer. Budding US-Moroccan military
cooperation will complicate ties between Washington and Algiers,
even though Algerian officials still hope that the United States
will play an intermediary role between Algeria and Morocco in
ending the war in the Western Sahara.
Algerian leaders
continues to develop relations wi
Tripoli in ways that belie their claim that they simply want to
monitor Libyan political developments. Bendjedid's sudden trip
to Libya in early December was his first ever to that country,
The travel of Libyan Foreign Secretary Mansour to Algeria
following the summit, in our view, confirms progress in the
relationship. Short of resolving serious bilateral differences,
Bendjedid probably hopes expanded contacts with Tripoli will
appease hardliners within his government and dissuade Qadhafi
from meddling in Algerian affairs.
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SUBJECT: Algeria: Benjedid Faces Challenges
NESA M# 87-300010,,
Copy 1 - Ambassador Robert H. Pelletreau (Pentagon)
2 - Lt. Gen. Leonard Perroots (Pentagon)
3 - Lt. Gen. Dale A. Vesser (Pentagon)
4 - James L. Woods (Pentagon)
5 - Sandra Charles, (Pentagon)
6 - Commander Timothy Hartung (Pentagon)
7 - Dennis Ross (NSC)
8 - Arnold Raphel (State Department)
9 - R. Rand Beers (State Department)
10 - Patrick N. Theros (State Department)
11 - Ambassador David E. Zweifel (State Departmen
1.2 - Ambassador Morton I. Abramowitz (State Depar
t)
tm
ent)
13 - Richard Solomon (State Department)
14 - US Embassy Rabat, Morocco
15 - US Embassy Algiers, Algeria
16 - DIR/DCI/DDCI/Exec Staff
17 - DDI
18 - ADDI
19 - NIO/AFR
20 - NIO/NESA
21 - CPAS/ILS
22-
27 - CPAS/IMC/CB ,
28 - C/PES
29 - PDB Staff
30 - NID Staff
31 - D/NESA
32 - D/NESA
33 - C/PPS/NESA
34-
35 - PPS/NESA (One copy to analyst to source)
36.- NESA/IA
37 - NESA/PG
38 - NESA/SO
39 - NESA/AI
40-
42 - NESA/AI/M
DDI/NESA/AI/M,{
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