About the CBI

February 2006
Background Note: Algeria

Flag of Algeria is two equal vertical bands of green (hoist side) and white;
a red, five-pointed star within a red crescent centered over the two-color
boundary; the crescent, star, and color green are traditional symbols of
Islam (the state religion).

PROFILE

OFFICIAL NAME:
People's Democratic Republic of Algeria

Geography
Location: Northern Africa, bordering the Mediterranean Sea, between Morocco
and Tunisia.
Area: Total--2,381,740 sq. km. Land--2,381,740 sq. km.; water--0 sq. km. More
than three times the size of Texas.
Cities: Capital--Algiers; Oran, Constantine, Annaba
Terrain: Mostly high plateau and desert; some mountains; narrow,
discontinuous coastal plain. Mountainous areas subject to severe earthquakes,
mud slides.
Climate: Arid to semiarid; mild, wet winters with hot, dry summers along
coast; drier with cold winters and hot summers on high plateau; sirocco is a
hot, dust/sand-laden wind especially common in summer.
Land use: Arable land--3%; permanent crops--0%, permanent pastures--13%;
forests and woodland--2%.

People
Nationality: Noun--Algerian(s); adjective--Algerian.
Population (July 2005 est.): 32,818,500.
Annual growth rate (2003 est.): 1.65%. Birth rate--21.94 births/1,000
population; death rate--5.09 deaths/1,000 population.
Ethnic groups: Arab-Berber 99%, European less than 1%.
Religions: Sunni Muslim (state religion) 99%, Christian and Jewish 1%.
Languages: Arabic (official), Berber (national language), French.
Education: Literacy (definition--age 15 and over can read and write)--total
population, 70%; male 78.8%, female 61% (2003 est.).
Health (2003 est.): Infant mortality rate--37.74 deaths/1,000 live births.
Life expectancy at birth--total population, 70.54 years; male 69.14 years,
female 72.01 years.
Work force (2004): 9.5 million. Government--32%; agriculture--20.74%;
construction and public works--12.41%; industry--13.6%
Unemployment rate (2005 est.): 24%; Algerian government estimates 17.7%.

Government
Type: Republic.
Independence: July 5, 1962 (from France).
Constitution: September 8, 1963; revised November 19, 1976, November 3, 1988,
February 23, 1989, and November 28, 1996.
Branches: Legal system based on French and Islamic law; judicial review of
legislative acts in ad hoc Constitutional Council composed of various public
officials, including several Supreme Court justices; Algeria has not accepted
compulsory International Court of Justice (ICJ) jurisdiction.
Administrative divisions: 48 provinces (wilayates; singular, wilaya).
Suffrage: 18 years of age; universal.
National holiday: Independence Day, July 5, 1962; Revolution Day, November 1,
1954.

Economy
GDP (2004): $84.66 billion.
GDP growth rate (2004): 5.5%.
Per capita real GDP (2004): $2,620.
Agriculture: Products--wheat, barley, oats, grapes, olives, citrus, fruits;
sheep, cattle.
Industry: Types--petroleum, natural gas, light industries, mining,
electrical, petrochemical, food processing, pharmaceuticals, cement, seawater
desalination.
Trade: Exports (2004)--$31.7 billion: petroleum, natural gas, and petroleum
products 97.52%. Partners (2005 est.)--U.S. 23.5%, Italy 16.7%, France 11.4%,
Spain 11.25%. Imports (f.o.b., 2004)--$18.2 billion: capital goods, food and
beverages, consumer goods. Partners (2004)--France 22.6%, Italy 8.53%,
Germany 6.9%, U.S. 6.15%, China 5.02%, Spain 4.85%, Japan 3.65%, Argentina
3.2%, Turkey 3.24%.
Budget (2005 est.): Revenues--$31.7 billion; expenditures--$24.62 billion,
including capital expenditures of $7.8 billion.
Debt (external, 2005 est.): $21.4 billion.
U.S. economic assistance (2005 est.): $4.40 million (MEPI, IMET).
Fiscal year: Calendar year.

GEOGRAPHY
Algeria, the second-largest state in Africa, has a Mediterranean coastline of
about 998 kilometers (620 mi.). The Tellian and Saharan Atlas mountain ranges
cross the country from east to west, dividing it into three zones. Between
the northern zone, Tellian Atlas, and the Mediterranean is a narrow, fertile
coastal plain--the Tell (Arabic for hill)--with a moderate climate year round
and rainfall adequate for agriculture. A high plateau region, averaging 914
meters (3,000 ft.) above sea level, with limited rainfall and great rocky
plains and desert, lies between the two mountain ranges. It is generally
barren except for scattered clumps of trees and intermittent bush and
pastureland. The third and largest zone, south of the Saharan Atlas range of
mountains, is mostly desert. About 80% of the country is desert, steppes,
wasteland, and mountains. Algeria's weather varies considerably from season
to season and from one geographical location to another. In the north, the
summers are usually hot with little rainfall. Winter rains begin in the north
in October. Frost and snow are rare, except on the highest slopes of the
Tellian Atlas Mountains. Dust and sandstorms occur most frequently between
February and May.

Soil erosion from overgrazing and other poor farming practices;
desertification; dumping of raw sewage, petroleum refining wastes, and other
industrial effluents are leading to the pollution of rivers and coastal
waters. The Mediterranean Sea, in particular, is becoming polluted from oil
wastes, soil erosion, and fertilizer runoff; there are inadequate supplies of
potable water.

PEOPLE
Ninety-one percent of the Algerian population lives along the Mediterranean
coast on 12% of the country's total land mass. Forty-five percent of the
population is urban, and urbanization continues, despite government efforts
to discourage migration to the cities. About 1.5 million nomads and
semi-settled Bedouin still live in the Saharan area. According to the
Algerian National Office of Statistics (ONS), the data for the year 2003
indicate that 75% of the Algerian population is below the age of 30.

Nearly all Algerians are Muslim, of Arab, Berber, or mixed Arab-Berber stock.
Official data on the number of non-Muslim residents is not available, however
practitioners report it to be less than 5,000. Most of the non-Muslim
community is comprised of Methodist, Roman Catholic and Evangelical faiths;
the Jewish community is virtually non-existent. As of November 2005, there
were about 1,100 American citizens in the country, the majority of whom live
and work in the oil/gas fields in the south.

Algeria's educational system has grown dramatically since 1962; in the last
12 years, attendance has doubled to more than 5 million students. Education
is free and compulsory to age 16. Despite government allocation of
substantial educational resources, population pressures and a serious
shortage of teachers have severely strained the system, as have terrorist
attacks against the educational infrastructure during the 1990s. Modest
numbers of Algerian students study abroad, primarily in Europe and Canada. In
2000, the government launched a major review of the country's educational
system and in 2004 efforts to reform the educational system began.

Housing and medicine continue to be pressing problems in Algeria. Failing
infrastructure and the continued influx of people from rural to urban areas
have overtaxed both systems. According to the United Nations Development
Program, Algeria has one of the world's highest per housing unit occupancy
rates, and government officials have publicly stated that the country has an
immediate shortfall of 1.5 million housing units.

HISTORY
Since the 5th century B.C., the native peoples of northern Africa (identified
by the Romans as "Berbers") were pushed back from the coast by successive
waves of Phoenician, Roman, Vandal, Byzantine, Arab, Turkish, and, finally,
French invaders. The greatest cultural impact came from the Arab invasions of
the 8th and 11th centuries A.D., which brought Islam and the Arabic language.
The effects of the most recent (French) occupation--French language and
European-inspired socialism--are still pervasive.

North African boundaries have shifted during various stages of the conquests.
Algeria's modern borders were created by the French, whose colonization began
in 1830. To benefit French colonists, most of whom were farmers and
businessmen, northern Algeria was eventually organized into overseas
departments of France, with representatives in the French National Assembly.
France controlled the entire country, but the traditional Muslim population
in the rural areas remained separated from the modern economic infrastructure
of the European community.

Algerians began their uprising on November 1, 1954, to gain rights denied
them under French rule. The revolution, launched by a small group of
nationalists who called themselves the National Liberation Front (FLN), was a
guerrilla war in which both sides targeted civilians and otherwise used
brutal tactics. Eventually, protracted negotiations led to a cease-fire
signed by France and the FLN on March 18, 1962, at Evian, France. The Evian
Accords also provided for continuing economic, financial, technical, and
cultural relations, along with interim administrative arrangements until a
referendum on self-determination could be held. Over 1 million French
citizens living in Algeria at the time, called the pieds-noirs, left Algeria
for France.

The referendum was held in Algeria on July 1, 1962, and France declared
Algeria independent on July 3. In September 1962 Ahmed Ben Bella was formally
elected president. On September 8, 1963, a Constitution was adopted by
referendum. On June 19, 1965, President Ben Bella was replaced in a
non-violent coup by a Council of the Revolution headed by Minister of Defense
Col. Houari Boumediene. Ben Bella was first imprisoned and then exiled.
Boumediene, as President of the Council of the Revolution, led the country as
Head of State until he was formally elected on December 10, 1976. Boumediene
is credited with building "modern Algeria." He died on December 27, 1978.

Following nomination by an FLN Party Congress, Col. Chadli Bendjedid was
elected president in 1979 and re-elected in 1984 and 1988. A new constitution
was adopted in 1989 that allowed the formation of political parties other
than the FLN. It also removed the armed forces, which had run the government
since the days of Boumediene, from a designated role in the operation of the
government. Among the scores of parties that sprang up under the new
constitution, the militant Islamic Salvation Front (FIS) was the most
successful, winning more than 50% of all votes cast in municipal elections in
June 1990 as well as in the first stage of national legislative elections
held in December 1991.

Faced with the real possibility of a sweeping FIS victory, the National
People's Assembly was dissolved by presidential decree on January 4, 1992,
and on January 11, under pressure from the military leadership, President
Chadli Bendjedid resigned. On January 14, a five-member High Council of State
was appointed by the High Council of Security to act as a collegiate
presidency and immediately canceled the second round of elections. This
action, coupled with political uncertainty and economic turmoil, led to a
violent reaction by Islamists. A campaign of terror in the country, including
assassinations, bombings, and massacres, commenced. On January 16, Mohamed
Boudiaf, a hero of the Liberation War, returned after 28 years of exile to
serve as Algeria's fourth president. Facing sporadic outbreaks of violence
and terrorism, the security forces took control of the FIS offices in early
February, and the High Council of State declared a state of emergency. In
March, following a court decision, the FIS Party was formally dissolved, and
a series of arrests and trials of FIS members occurred resulting in more than
50,000 members being jailed. Algeria became caught in a cycle of violence,
which became increasingly random and indiscriminate. On June 29, 1992,
President Boudiaf was assassinated in Annaba in front of TV cameras by Army
Lt. Lembarek Boumarafi, who allegedly confessed to carrying out the killing
on behalf of the Islamists.

Despite efforts to restore the political process, violence and terrorism
characterized the Algeria landscape during the 1990s. In 1994, Liamine
Zeroual, former Minister of Defense, was appointed Head of State by the High
Council of State for a three-year term. During this period, the Armed Islamic
Group (GIA) launched terrorist campaigns against government figures and
institutions to protest the banning of the Islamist parties. A breakaway GIA
group--the Salafist Group for Preaching and Combat (GSPC)--also undertook
terrorist activity in the country. Government officials estimate that more
than 100,000 Algerians died during this period.

Zeroual called for presidential elections in 1995, though some parties
objected to holding elections that excluded the FIS. Zeroual was elected
president with 75% of the vote. By 1997, in an attempt to bring political
stability to the nation, the Rassemblement National Democratique (RND) party
was formed by a progressive group of FLN members. In September 1998,
President Liamine Zeroual announced that he would step down in February 1999,
21 months before the end of his term, and that presidential elections would
be held.

Algerians went to the polls in April 1999, following a campaign in which
seven candidates qualified for election. On the eve of the election, all
candidates except Abdelaziz Bouteflika pulled out amid charges of widespread
electoral fraud. Bouteflika, the candidate who appeared to enjoy the backing
of the military, as well as the FLN and the RND party regulars, won with an
official vote count of 70% of all votes cast. He was inaugurated on April 27,
1999 for a 5-year term.

President Bouteflika's agenda focused initially on restoring security and
stability to the country. Following his inauguration, he proposed an official
amnesty for those who fought against the government during the 1990s unless
they had engaged in "blood crimes," such as rape or murder. This "Civil
Concord" policy was widely approved in a nationwide referendum in September
2000. Government officials estimate that 80% of those fighting the regime
during the 1990s have accepted the civil concord offer and have attempted to
reintegrate into Algerian society. Bouteflika also launched national
commissions to study education and judicial reform, as well as restructuring
of the state bureaucracy.

In 2001, Berber activists in the Kabylie region of the country, reacting to
the death of a youth in gendarme custody, unleashed a resistance campaign
against what they saw as government repression. Strikes and demonstrations in
the Kabylie region were commonplace as a result, and some spread to the
capital. Chief among Berber demands was recognition of Tamazight (Berber) as
an official language, official recognition and financial compensation for the
deaths of Kabylies killed in demonstrations, an economic development plan for
the area and greater control over their own regional affairs. In October
2001, the Tamazight language was recognized as a national language, but the
issue remains contentious as Tamazight has not been elevated to an official
language.

Algeria's most recent presidential election took place on April 8, 2004. For
the first time since independence, the presidential race was democratically
contested through to the end. Besides incumbent President Bouteflika, five
other candidates, including one woman, competed in the election. Opposition
candidates complained of some discrepancies in the voting list;
irregularities on polling day, particularly in the Kabylie; and of unfair
media coverage during the campaign as Bouteflika, by virtue of his office,
appeared on state-owned television daily. Bouteflika was re-elected in the
first round of the election with 84.99% of the vote. Just over 58% of those
Algerians eligible to vote participated in the election.

In the five years since Bouteflika was first elected, the security situation
in Algeria has improved markedly. Terrorism, however, has not been totally
eliminated, and terrorist incidents still occur, particularly in the
provinces of Boumerdes, Tizi-Ouzou, and in the remote southern areas of the
country. An estimated 40-50 Algerians are killed monthly, down from a high of
1,200 or more in the mid-1990s.

In September 2005, Algeria passed a referendum in favor of President
Bouteflika's Charter for Peace and National Reconciliation, paving the way
for implementing legislation that will pardon certain individuals convicted
of armed terrorist violence. The new Charter builds upon the Civil Concord
and the Rahma (clemency) Law shields from prosecution anyone who laid down
arms in response to those previous amnesty offers. The Charter specifically
excludes from amnesty those involved in mass murders, rapes or the use of
explosives in public places.

GOVERNMENT
Under the 1976 Constitution (as modified 1979, and amended in 1988, 1989, and
1996) Algeria is a multi-party state. The Ministry of the Interior must
approve all political parties. According to the Constitution, no political
association may be formed "based on differences in religion, language, race
gender or region." The head of state is the president of the republic, who is
elected to a five-year term, renewable once. Algeria has universal suffrage
at the age of 18. The president is the head of the Council of Ministers and
of the High Security Council. He appoints the prime minister who also is the
head of government. The prime minister appoints the Council of Ministers.

The Algerian Parliament is bicameral, consisting of a lower chamber, the
National People's Assembly (APN), with 389 members and an upper chamber, the
Council of the Nation, with 144 members. The APN is elected every five years.
The next round of legislative elections is scheduled to take place in 2007.
Two-thirds of the Council of the Nation is elected by regional and municipal
authorities; the rest are appointed by the president. The Council of the
Nation serves a six-year term with one-half of the seats up for election or
reappointment every three years. The last round of elections and appointments
to the Council of the Nation occurred in 2003. Either the president or one of
the parliamentary chambers may initiate legislation. Legislation must be
brought before both chambers before it becomes law. Sessions of the APN are
televised.

Algeria is divided into 48 wilayates (states or provinces) headed by walis
(governors) who report to the Minister of Interior. Each wilaya is further
divided into communes. The wilayates and communes are each governed by an
elected assembly.

Principal Government Officials
President and Minister of National Defense--Abdelaziz Bouteflika
Head of Government (Prime Minister)--Ahmed Ouyahia
Minister of State, Personal Representative of the Head of State--Abdelaziz
Belkhadem
Minister of State for the Interior and Local Communities--Nourredine Yazid
Zerhouni
Minister of State for Foreign Affairs--Mohamed Bedjaoui
Minister of State--Boudjerra Soltani
Minister Delegate in Charge of National Defense--Abdelmalek Guenaizia

Other Ministers
Agriculture and Rural Development--Said Barkat
Commerce--El Hachemi Djaaboub
Culture--Khalida Toumi
Energy and Mines--Chakib Khelil
Environment--Cherif Rahmani
Finance--Mourad Medelci
Fisheries and Sea Resources--Smail Mimoune
Health, Population and Hospital Reform--Amar Tou
Higher Education and Scientific Research--Rachid Harraoubia
Housing & Urban Planning--Mohamed Nadir Hamimid
Industry--Mahmoud Khoudri
Jobs and National Solidarity--Djamal Ould-Abbes
Justice--Tayeb Belaiz
Labor and Social Security--Tayeb Louh
Moudjahidine (Veterans)--Mohamed Cherif Abbas
National Education--Boubekeur Benbouzid
Participation and Investment Promotion--Abdelhamid Temmar
Posts, Information and Communications Technologies--Boudjemaa Haichour
Public Works--Amar Ghoul
Minister in Charge of Relations With the Parliament--Abdelaziz Ziari
Religious Affairs--Bouabdellah Ghlamallah
Small and Medium-Sized Enterprises and Craft Industries--Mustapha Benbada
Tourism--Noureddine Moussa
Transport--Mohamed Maghlaoui
Vocational Training--El Hadi Khaldi
Water Resources--Abdelmalek Sellal
Youth and Sports--Yahia Guiddoum

Ministers Delegate
Minister Delegate in Charge of Maghrebian and African Affairs--Abdelkader
Messahel
Minister Delegate in Charge of the Family and Women's Affairs--Nouara Saadia
Djaafar
Minister Delegate in Charge of Financial Reform--Karim Djoudi
Minister Delegate in Charge of Local Collectives--Daho Ould Kablia
Minister Delegate in Charge of Rural Development--Rachid Benaissa
Minister Delegate in Charge of Scientific Research--Souad Bendjaballah
Minister Delegate in Charge of Town Planning & Environment--Abderrachid
Boukerzaza

Other Government Officials
Secretary General of the Government--Ahmed Noui
Speaker of the National People's Assembly (Lower House)--Amar Saidani
Speaker of the Council of the Nation (Upper House)--Abdelkader Bensalah
Governor, Central Bank--Mohamed Laksaci
Ambassador to the United States--Amine Kherbi
Permanent Representative to the United Nations, New York--Abdallah Baali

POLITICAL CONDITIONS
A decade of terrorist violence in Algeria has resulted in more than 100,000
deaths since 1991. Although the security situation in the country has
improved, addressing the underlying issues, which brought about the political
turmoil of the 1990s, remains the government's major task. In keeping with
its amended Constitution, the Algerian Government espouses participatory
democracy and free-market competition. The government has stated that it will
continue to open the political process and encourage the creation of
political institutions. Presidential elections took place in April 2004 and
returned President Bouteflika to office with 84.99% of the vote.

Algeria has more than 45 daily newspapers published in French and Arabic,
with a total circulation of more than 1.5 million copies. There are 20
domestically printed weekly publications with total circulation of 622,000
and 11 monthly publications with total circulation of 600,000. In 2001, the
government amended the Penal Code provisions relating to defamation and
slander, a step widely viewed as an effort to rein in the press. While the
Algerian press is relatively free to write as they choose, use of the
defamation laws significantly increased the level of press harassment
following President Bouteflika's April 2004 re-election victory. As a result,
the press has begun to self-censor. Government monopoly of newsprint and
advertising is seen as another means to influence the press, although it has
permitted newspapers to create their own printing distribution networks.

Population growth and associated problems--unemployment and underemployment,
inability of social services to keep pace with rapid urban migration,
inadequate industrial management and productivity, a decaying
infrastructure--continue to affect Algerian society. Increases in the
production and prices of oil and gas over the past decade have led to
exchange reserves reaching $55 billion. The government began an economic
reform program in 1994, focusing on macroeconomic stability and structural
reform. These reforms aimed at liberalizing the economy, making Algeria
competitive in the global market, and meeting the needs of the Algerian
people. In 2004, the government announced a $55 billion spending program to
improve national infrastructure and social services.

ECONOMY
The hydrocarbons sector is the backbone of the Algerian economy, accounting
for roughly 60% of budget revenues, nearly 30% of GDP, and over 97% of export
earnings. Algeria has the seventh-largest reserves of natural gas in the
world (2.7% of proven world total) and is the second-largest gas exporter; it
ranks 14th for oil reserves. Its key oil and gas customers are Italy,
Germany, France, the Netherlands, Spain, the United Kingdom, and the United
States. U.S. companies have played a major role in developing Algeria's oil
and gas sector; of the $4.1 billion (on a historical-cost basis, according to
statistics gathered by the U.S. Department of Commerce, Bureau of Economic
Analysis) in U.S. investment in Algeria, the vast bulk is in the petroleum
sector.

Faced with declining oil revenues and high-debt interest payments at the
beginning of the 1990s, Algeria implemented a stringent macroeconomic
stabilization program and rescheduled its Paris Club debt in the mid-1990s.
The macroeconomic program has been particularly successful at narrowing the
budget deficit and at reducing inflation from of near-30% averages in the mid
1990s to almost single digits in 2000. Inflation was at 3.6% in 2004.
Algeria's economy has grown at about 2.4% annually since 1999 and reached
growth of over 6.6% in 2003 and 5.2% in 2004. The country's foreign debt fell
from a high of $28 billion in 1999 to $21.8 billion in 2004. The spike in oil
prices in 1999-2000 and 2004, the government's tight fiscal policy and
conservative budgeting of oil prices from 2000 to present, as well as a large
increase in the trade surplus and the near tripling of foreign exchange
reserves has helped the country's finances. The government pledges to
continue its efforts to diversify the economy by attracting foreign and
domestic investment outside the energy sector. The Algerian government has
thus far, however, had little success at reducing high unemployment,
officially estimated at 17.7%, though international estimates put the figure
higher, and at improving living standards.

Priority areas are banking and judicial reform, improving the investment
environment, partial or complete privatization of state enterprises, and
reducing government bureaucracy. The government has closed or sold off
numerous state enterprises and a total of 1,200 were offered for sale in
2004. The government also has begun to privatize certain sectors of the
economy and embrace joint venture investment opportunities with traditionally
state owned and operated entities. In 2001, Algeria concluded an Association
Agreement with the European Union, which was ratified in 2005 by both Algeria
and the EU and took effect in September of that same year. The government is
in an advanced stage of accession negotiations with the World Trade
Organization.

DEFENSE
Algeria's armed forces, known collectively as the Popular National Army
(ANP), total 138,000 active members, with some 100,000 reservists. The
president serves as Minister of National Defense. Military forces are
supplemented by a 60,000-member national gendarmerie, a rural police force,
under the control of the president and a 30,000-member Sureté Nationale or
Metropolitan Police force under the Ministry of the Interior. Eighteen months
of national military service is compulsory for men.

Algeria is a leading military power in the region and has demonstrated
remarkable success in its struggle against terrorism. The Algerian military,
having fought a decade-long insurgency, intends to increase expenditures in
an effort to modernize and return to a more traditional defense role.
Projected defense expenditures accounted for some $2.5 billion or 3.9% of GDP
(FY 2004).

Due to historical difficulties in acquiring U.S. military equipment,
Algeria's primary military supplier has traditionally been Russia, and to a
lesser extent China. Algeria has, however, in recent years, begun to
diversify its supplies of military equipment to include U.S.-made airborne
surveillance aircraft and ground radars.

Retired General Abdelmalek Guenaizia was appointed Minister Delegate to the
Minister of National Defense in a May 1, 2005 cabinet reshuffle.

FOREIGN RELATIONS
Algeria has traditionally practiced an activist foreign policy and in the
1960s and 1970s was noted for its support of Third World policies and
independence movements. Algerian diplomacy was instrumental in obtaining the
release of U.S. hostages from Iran in 1980. Since his first election in 1999,
President Bouteflika worked to restore Algeria's international reputation,
traveling extensively throughout the world. In July 2001, he became the first
Algerian President to visit the White House in 16 years. He has made official
visits to France, South Africa, Italy, Spain, Germany, China, Japan,
Portugal, Russia, the United Kingdom and Latin American countries, among
others, since his inauguration.

Algeria has taken the lead in working on issues related to the African
continent. Host of the OAU Conference in 2000, Algeria also was key in
bringing Ethiopia and Eritrea to the peace table in 2000. In 2001, the 37th
summit of the OAU formally adopted the New Partnership for Africa's
Development (NEPAD) to address the challenges facing the continent. Algeria
has taken a lead in reviving the Union of the Arab Maghreb with its
neighbors.

Since 1976, Algeria has supported the Polisario Front, a group claiming to
represent the population of Western Sahara. Contending that the Sahrawis have
a right to self-determination under the UN Charter, Algeria has provided the
Polisario with material, financial, and political support and sanctuary in
southwestern Algeria in the province of Tindouf. UN involvement in the
Western Sahara includes MINURSO, a peacekeeping force, UNHCR, which handles
refugee assistance and resettlement, and the World Food Program (WFP). Active
diplomatic efforts to resolve the dispute under the auspices of the United
Nations Secretary General are ongoing. Although the land border between
Morocco and Algeria was closed in the wake of a terrorist attack in 1994, the
two have worked at improving relations, and in July 2004, Morocco lifted visa
requirements for Algerians. Algeria reciprocated with the lifting of visa
requirements for Moroccans on April 2, 2005. Algeria has friendly relations
with its other neighbors in the Mahgreb, Tunisia and Libya, and with its
sub-Saharan neighbors, Mali and Niger. It closely monitors developments in
the Middle East and has been a strong proponent of the rights of the
Palestinian people, as well as a supporter of Iraq's democratic transition.

Algeria has diplomatic relations with more than 100 foreign countries, and
over 90 countries maintain diplomatic representation in Algiers. Algeria
holds a nonpermanent, rotating seat on the UN Security Council. Its tenure
began January 2004 and ends December 2005. Algeria hosted 13 Arab leaders at
the Arab League Summit, March 22-23, 2005.

U.S.-ALGERIAN RELATIONS
In July 2001, President Bouteflika became the first Algerian President to
visit the White House since 1985. This visit, followed by a second meeting in
November 2001, a meeting in New York in September 2003, and President
Bouteflika's participation at the June 2004 G8 Sea Island Summit, is
indicative of the growing relationship between the United States and Algeria.
Since the September 11, 2001 terrorist attacks in the United States, contacts
in key areas of mutual concern, including law enforcement and
counter-terrorism cooperation, have intensified. Algeria publicly condemned
the terrorist attacks on the United States and has been strongly supportive
of the international war against terrorism. The United States and Algeria
consult closely on key international and regional issues. The pace and scope
of senior-level visits has accelerated. In June 2003, Under Secretary of
State for Political Affairs Marc Grossman traveled to Algeria, followed by
the October 2003 and May 2004 visits of Assistant Secretary of State for Near
Eastern Affairs William Burns. Secretary of State Colin Powell visited
Algiers in December 2003.

In 2005, U.S. direct investment in Algeria totaled $4.1 billion, mostly in
the petroleum sector, which U.S. companies dominate. American companies also
are active in the banking and finance, services, pharmaceuticals, medical
facilities, telecommunications, aviation, seawater desalination, energy
production, and information technology sectors. Algeria is the United States'
10th-largest market in the Middle East/North African region. U.S. exports to
Algeria totaled $972 million in 2004, an increase of almost 50% over 2003.
U.S. imports from Algeria grew from $4.7 billion in 2032 to $7.4 billion in
2004, 99% of which was oil and liquefied natural gas (LNG). In March 2004,
President Bush designated Algeria a beneficiary country for duty-free
treatment under the Generalized System of Preferences (GSP).

In July 2001, the United States and Algeria signed a Trade and Investment
Framework Agreement, which established common principles on which the
economic relationship is founded and forms a platform for negotiating a
bilateral investment treaty (BIT) and a free-trade agreement (FTA). The two
governments meet on an ongoing basis to discuss trade and investment policies
and opportunities to enhance the economic relationship. The most recent
meeting was held in December 2004 in Washington, DC. The Export-Import Bank
has an active guarantee program in Algeria; current exposure is about $1.8
billion, primarily for petroleum projects and aircraft acquisition. Within
the framework of the U.S.-North African Economic Partnership (USNAEP), the
United States provided about $1.0 million in technical assistance to Algeria
in 2003. This program supported and encouraged Algeria's economic reform
program and included support for World Trade Organization accession
negotiations, debt management, and improving the investment climate. In 2003,
USNAEP programs were rolled over into Middle East Partnership Initiative
(MEPI) activities, which provided $3.5 million for political and economic
development programs in Algeria.

Cooperation between the Algerian and U.S. militaries continues to grow.
Exchanges between both sides are frequent, and Algeria has hosted senior U.S.
military officials. In May 2005, the United States and Algeria conducted
their first formal joint military dialogue in Washington, DC. The NATO
Supreme Allied Commander Europe and Commander, U.S. European Command, General
James L. Jones visited Algeria in June and August 2005. The United States and
Algeria have also conducted bilateral naval and Special Forces exercises, and
Algeria has hosted U.S. Navy and Coast Guard ship visits. In addition, the
United States has a modest International Military Education and Training
(IMET) Program ($922,000 in 2005) for training Algerian military personnel in
the United States, and Algeria participates in the Department of Defense's
Counter-Terrorism Fellowship Program ($180,000 in 2005).

The United States has implemented modest university linkages programs and has
placed two English Language Fellows, the first since 1993, with the Ministry
of Education to assist in the development of English as a Second Language
(ESL) courses at the Ben Aknoune Training Center. In 2004, Algeria was again
the recipient of a grant under the Ambassadors' Fund for Cultural
Preservation. That fund provided a grant of $39,000 to restore the Basilica
of St. Augustine in Annaba. Algeria also received an $80,000 grant to fund
microscholarships to design and implement an American English-language
program for Algerian high school students in four major cities.

Initial funding through the Middle East Partnership Initiative (MEPI) has
been allocated to support the work of Algeria's developing civil society
through programming that provides training to journalists, businesspersons,
legislators, Internet regulators, and the heads of leading nongovernmental
organizations. Additional funding through the State Department's Human Rights
and Democracy Fund will assist civil society groups focusing on the issues of
the disappeared, and Islam and democracy.

In August 2005, Chairman of the Senate Foreign Relations Committee, Senator
Richard G. Lugar led a Presidential Mission to Algeria and Morocco to oversee
the release of the remaining 404 Moroccan POWs held by the Polisario Front in
Algeria. Their release removed a longstanding bilateral obstacle between
Algeria and Morocco.

The official U.S. presence in Algeria is expanding following over a decade of
limited staffing, reflecting the general improvement in the security
environment. During the past two years, the U.S. Embassy has moved toward
more normal operations and now provides most embassy services to the American
and Algerian communities.

Principal U.S. Officials
Ambassador--Richard W. Erdman
Deputy Chief of Mission--Marc J. Sievers
Political/Economic Chief--Steven C. Rice
Economic/Commercial Officer--Nicholle Manz
Foreign Commercial Service Officer (resident in Casablanca)--Rick Ortiz
Foreign Agriculture Service Officer (resident in Rabat)--Mike Fay
Consular Officer--Kristin Bongiovanni
Management Officer--Patricia Perrin
Public Affairs Officer--Linda Cowher
Defense Attaché--Col. Daniel Doty, USAF
Office of Defense Cooperation--Lt. Col. Thierry Woods, USAF
Regional Security Officer--Melissa Foynes

The U.S. Embassy is located at 4 Chemin Cheikh Bachir El-Ibrahimi, Algiers;
tel. 213 (21) 691255; fax: 213 (21) 693 979.