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Algeria - The Geo-Political Perspective; The GME Is In Turmoil.

Momentous geo-political and economic changes around the world have had major implications for Algeria and other petroleum exporters in the Greater Middle East (GME). Under Barack Obama, the first African American to become ruler of the global power in the history of the world's leading empires, the US has gone through fundamental change making it the No. 1 producer of petroleum liquids and natural gas.

Re-elected to a second four-year term in November 2012, however, Obama still tries to stabilise the world through trials and errors which keeps the GME in turmoil. His measures against global terrorism are not encouraging, with the Democratic administration now facing a Republican Party in stronger control over both houses of Congress than was the case in the late 1920s.

Political Islam has yielded more terror groups in the GME, with the Islamic State of Iraq and al-Sham (Greater Syria) - ISIS - having become the world's most dangerous entity (see sbme1SyrIrq26Jan15). Only the Kurds' PeshMerga is the GME ground force so far able to defeat ISIS fighters in its areas (see ood2gKurdOil-2Feb15). But ISIS has units in Sinai and the North African states, being far more dangerous than al-Qaeda.

Algeria and Egypt are jointly leading a new security and anti-ISIS bloc covering the entire North African coast and the Sahel region in the south. This is despite long-standing differences among some of the states, such as those since 1994 between Algeria and Morocco and years of rocking Algerian-Egyptian relations. This bloc's emergence is an important development from the GME, with Algeria to fund the anti-terror war (see news5AlgrEgptIsis2Feb15).

Algeria - at the heart of North African and Sahel security problems as it borders Libya, Tunisia, Morocco, Mauritania, the Sahara, and the Sahel's Mali and Niger - on Jan. 16, 2013, was attacked by a Neo-Salafi group affiliated to al-Qaeda in the Islamic Maghreb (AQIM) in an operation that left dozens of terrorists and hostages dead (see background in omt5AlgProspJan28-13).

Since then, that experience made Algiers more concerned about regional security than ever before. But Algeria is still financially the strongest state in the North African and Sahel areas, with foreign reserves put at about $200bn. At end-2013, it was No. 13 on IMF's list of the world's countries with reserves at $192.5bn. (Saudi Arabia is No. 3 in IMF's ranking of the world's foreign reserves' holders).

Libya has become the most dangerous centre of ISIS and other terror groups threatening both Africa and the EU. Libya's security forces are weak and divided, with its nascent government lacking authority in much of the country. Suspected Sunni jihadis (holy warriors) have repeatedly launched attacks on Western targets, including an assault on the US consulate in Benghazi on Sept. 11, 2012 in which the US ambassador and three other Americans were killed. Tunisia is also a dangerous place where ISIS has a unit.

Libyans had provided logistical support for the Jan. 16, 2013 attack. Algerian officials at the time said the terrorist attackers at the time had driven to Algeria's In Amenas gas plant in a convoy of vehicles after having crossed the near-by Libyan border. A female Libyan NOC official had said her country's special force sent to guard petroleum sites had been a front for irregular militias, mostly from the western Libyan town of Zintan, who had been part of the 2011 uprising against Qadhafi's 42-year dictatorship. Both Algeria and Libya then had been at risk because of the dangers from a spill-over of a serious crisis in Mali.
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Publication:APS Review Oil Market Trends
Geographic Code:6ALGE
Date:Feb 9, 2015
Previous Article:Algeria - Part 1 - The Prospects.
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