Managed Trade: Making America Less Competitive

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Managed Trade: Making America Less Competitive

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Bryan Johnson
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NO. 1060 November 9,1995 The Heritage Foundation 214 Massachusetts Avenue N.E. Washington, D.C. 20002-4999 (202) 546440 0 HE RISINGTHREAT OF REVOLUTIONARY ISLAM IN ALGERIA INTRODUCTION Algeria is engulfed in a bloody civil war that has claimed around 40,000 lives since January 19

92. In that month the Algerian army seized power, ousted President Chadli Ben jedid, and cance led parliamentary elections to avert a takeover by Islamic radicals, or Is lamists. The provisional military government and the loose coalition of Islamists who seek its overthrow have fought to a standstill. It is gradually becoming clear that neither si d e is likely to score a decisive military victory. Unless this civil war is halted, Algeria will disin tegrate into political chaos that could destabilize the entire region. But as bad as Algerias situation is now, au Islamist victory would be even worse A radical Islamic victory in Algeria would pose significant long-term threats to U.S. inter ests in North Africa, the Middle East, and the Muslim world generally. The triumph of Mus lim militance in Algeria, at a minimum, would embolden Islamists elsewhere i n the Islamic world to redouble their revolutionary efforts, increase subversive pressures on pro-Westem secular regimes, and encourage further opposition to the Arab-Israeli peace negotiations. In the worst case scenario, a radical Islamic Algeria could become another Iran-a base for ac tively exporting anti-Western revolution, terrorism, and anarchy.

The Clinton Administration has distanced itself from the beleaguered Algerian military regime and has established diplomatic contacts with the Islamic Salva tion Front (FIS the umbrella group of radical Islamic organizations opposed to the secular regime. The Presi dent and his advisers believe this policy will lay the groundwork for a political settlement in Algeria. But FIS leaders increasingly have lost co n trol over the ultra-radical guerrillas who do most of the fighting and adamantly reject compromise with the Algerian regime. It makes little sense to conduct a dialogue with leaders who cannot deliver a negotiated peace even if they wanted to do so. Moreo v er, reaching out to Algerian Islamic moderates is counterproductive because it undermines the ability of secular Arab regimes to resist the surge of militant Islam Nore: Norhrng writren here IS to be construed as necessarily rellecrrng fhe views of The He ritage Foundation or as an artempr ro aid or hinder the passage of any bill before Congress. t counterproductive because it undermines the ability of secular Arab regimes to resist the b surge of militant Islam.

Supporters of the dialogue with the FIS argu e that it will lead to better Algerian-heri can relations in the event that Islamic revolutionaries come to power. This dangerously wishful thinking flows from the false premise that Western powers can co-opt radical Mus lim movements through negotiation, dialogue, and compromise, practices valued in demo cratic societies but not in radical Islam. Any Islamist leaders that come to power in Algeria after years of bloodshed inevitably will be virulently anti-Western. Their totalitarian ideol ogy uncompromisi n gly rejects Western values, which are perceived to threaten the purity of Islam, and is hostile to Western interests. Moreover, the political dynamics of revolutionary struggle favor militants at the expense of moderates, who tend to become increasingly i r relevant as political violence intensifies.

The Clinton Administration appears to be making the same mistakes in Algeria that the Carter Administration made in Iran. By reaching out to Islamic revolutionaries and under taking a political dialogue, the Ad ministration puts American national interests at risk and loses credibility with nervous allies battling their own Islamists. The Carter Administra tions overeager courting of Irans revolutionary provisional government backfii in No vember 1979, when Iran i an radicals seized American diplomats as hostages at the U.S. Em bassy inTehran. The Clinton Administrations courtship of Algerias FIS is even more mis guided because it could help boost Algerian Islamists to power by demoralizing the embat tled military regime in Algiers.

The United States has relatively little direct influence over what happens in Algeria in the corning months. What little leverage it has should be used to help block the rise of Islamists hostile to American values and interests, not to ease their path to power. The sad truth is that any power-sharing arrangement between the regime and the Islamic opposition would be the first step toward a complete victory for the Islamists out of power and discarded by their more radical rivals if Isla m ists take power, the U.S should Instead of seeking to ingratiate itself with FIS moderates who are likely to be squeezed ST Break diplomatic contacts with the FIS.These contacts risk undermining the Al gerian government with no real benefits for the U.S H alt efforts to pressure the Algiers regime into a suicidal power-sharing ar rangement. Power-sharing would only be a prelude to an Islamist takeover.

Washington should help Algeria reschedule its heavy debt burden, although it can not afford to give direct economic aid ST Seek to deprive Algerian Islamists of external support. The U.S. needs to in crease economic and diplomatic pressures on Iran and Sudan, which aid Algerian Islamists, and cooperate with European allies to reduce the flow of arms and money from Algerian expatriates in Europe Prevent future Algerias. There is little the U.S. can do in concrete terms to solve Algerias immediate crisis. The Algerian government has been a repressive failure but the Islamist alternative would be worse. The U.S. s hould encourage the Algiers IEW Cooperate with France and other allies to help buy time for the regime 2 regime to adopt free-market economic reforms and cautious democratic reforms although this will be difficult while the regime is fighting for survival . The U.S. is likely to have more success encouraging long-term political, economic, and educa tional reforms that can help other secular Arab regimes avoid Algerias mistakes ALGERIAS POLITICAL BREAKDOWN Algerias plunge into civil strife was precipitated b y three intertwined crises-economic social, and political-that undermined the legitimacy of the ruling National Liberation Front (FLN) regime. The FLN had spearheaded Algerias bloody eight-year war for inde pendence and dominated Algeria for 30 years after it won independence from France in 19

62. Although it enjoyed considerable prestige based on this success, it squandered its popular support by building a one-party socialist state that badly mismanaged Algerias deepening economic, social, and political problems.

The FLN nationalized large portions of the economy and built a Soviet-style command economy. It undertook an overly ambitious industrialization program that led to the devel opment of swollen, inefficient state enterprises. The regime collectiviz ed Algerias thriving agricultural sector and experimented with socialist villages designed ostensibly to de velop the economy and modernize society. The burgeoning state bureaucracy grew increas ingly corrupt and inefficient. The mismanaged socialist econ omy was kept afloat by Alge rias oil and gas revenues, but the 1985-1986 fall in energy prices dealt a body blow to the economy, reducing oil revenues from $12.5 billion in 1985 to $8 billion in 19

86. Rather than institute free-market economic reforms to revive the economy, the FLN regime bor rowed heavily abroad. By the early 199Os, Algiers was forced to expend most of its oil and gas income-roughly $8 billion to $9 billion per year-just to finance its mushrooming 26 billion external debt.

This economic crisis exacerbated a fundamental social crisis posed by rapid population growth and declining living standards. Algerias population surged from 10 million in 1962 to its current level of 28.5 million (and continues to grow at the rapid rate of about 3 per cent per year Peasants uprooted from the countryside, in part because of the regimes mis management of agriculture, crowded into the coastal cities in search of scarce housing and jobs. Algerians grew profoundly disenchanted with the FLNs one-party rule a n d its inabil ity to deal with such persistent problems as high unemployment (now estimated to run about 25 percent, but much higher for younger workers), chronic food shortages, over crowded housing, rising prices, and an overburdened infrastructure. The s tandard of living fell sharply following the 1985 decline in international oil rices, with private consumption per capita plummeting 18 percent between 1985 and 1992 s Widespread discontent over the regimes mismanagement of the economy and resent ment of the socialist pretensions of the ruling elite boiled over into anti-FLN riots that swept many Algerian cities in October 19

88. Although they began as a spontaneous protest 1 2 Roughly 65 percent of Algerians are under the age of 25, and 44 percent are under 15.

Gideon Gera, An Islamic Republic of Algeria? Implications for the Middle East and the West, Policy Focus Research Me morandum No 29, Washington Institute for Near East Policy, June 1995, p. 1 3 in a working class neighborhood in Algiers against austerity measures imposed by the re capital to other cities. The army was deployed to halt attacks on government buildings, st a te enterprises, and FLN political offices. Roughly 500 people were killed and $250 million in damage was inflicted on government facilities before the riots were suppressed after five days of blood~hed Stunned by the scope of the political violence, Presi dent Benjedid undertook a series of reforms to open up the political system and defuse opposition. A new constitution was ap proved by national referendum in February 1989, and the parliament approved the transi tion to a multi-party system in July 19

89. The chief political challenge to the FLN came from the FIS, formed in March 1989 as a coalition of more than 20 Islamist groups dedi cated to creating an Islamic state ruled by the Sharia, Islams sacred law. The FIS quickly mobilized a mass following, dra w ing its strongest support from the urban poor and Alge rian youths who sought a sense of purpose and identity in a society that presented them with a bleak future of diminishing opportunities. The FIS got a head start over other opposi tion parties becaus e it enjoyed an informal support network in the mosques and was bol stered by heavy funding from Islamists in Saudi Arabia and other oil-rich Persian Gulf emir ates gime the mass demonstrations subsequently took on an Islamist cast and spread from the The F IS also profited from the miscalculations of President Benjedid, who greatly under estimated its strength. Despite the fact that a July 1989 law banned political parties based on sectarian practice and intolerance, the government recognized the FIS as a l egal party in September 19

89. Benjedid may have hoped to use the growing challenge posed by the FIS to offset FLN hard-liners opposed to his reform program. Or he may have allowed the FIS to operate openly in a Machiavellian attempt to scare voters into s upporting the FLN.4 Benjedids approach clearly backfired. In the June 1990 municipal and district elections the first free elections since Algeria gained independence, the FIS decisively defeated the FLN, winning 54 percent of the popular vote to the FLNs 28 percent. Although the Is lamists won control of 850 of Algerias more than 1,500 municipalities, this vote was not an accurate barometer of their true strength. The FIS benefited from a boycott of the elec tions by several secular parties that led 38 pe rcent of the electorate to abstain from voting.

Others cast ballots for the FIS as a protest vote against the FLN Despite this electoral setback, Benjedid pressed ahead with his plans to move rapidly to ward multi-party legislative elections to restore the FLNs shattered political legitimacy. He unwisely designed a winner-take-all electoral system that would magnify the number of par liamentary seats awarded to the leading political party, perhaps assuming that the pre-elec tion gerrymandering of electoral districts would guarantee an FLN victory. For its part, the FIS became increasingly aggressive in politically attacking the regime, organizing civil dis obedience, calling for general strikes, and appealing to army officers to rebel against the 3 4 5 See Khalid Duran, The Second Battle of Algiers, Orbis, Summer 1989.

The Battle Looms: Islam and Politics in the Middle East, A Report to the Committee on Foreign Relations, U.S. Senate February 1993, p. 4.

Robert Mortimer, Islam and Multi-Party Politics in Al geria, The Middle ht Journal, Autumn 1991. p. 585 4 FLN regime. The June 1991 elections were postponed when violent political protests erupted over the FLN-engineered electoral reforms. Martial law was declared and thou sands of Islamists were arrested. D espite this, the FIS was allowed to participate in the legis lative elections, rescheduled to take place in two rounds of voting in December 1991 and January 1992.

The first round resulted in an -FIS landslide. Although the FIS actually received 1 million fewer votes than it had at the peak of its popularity in the June 1990 municipal elections the misguided electoral reforms magnified its victory6 The FIS gained 188 of the 230 seats contested in the first round, eclipsing the FLN, which picked up only 15 s eats. The non-Is lamist vote was severely fragmented, and many voters opted for the FIS rather than their preferred parties because they feared their vote might be wasted under the winner-take-all system. Shocked by the size of the Islamists political vic t ory and suspecting that President Benjedid had cut a deal with the FIS, the army ousted Benjedd on January 11,1992, can celed the elections, banned the FIS, and set up a transitional authority, the five-man High State Council (HCS SPIRALING POLITICAL VIOL E NCE Although many Algerians were relieved that the army had stepped in to block an Is lamist takeover, the new regime lacked a solid base of support. To remedy this, the HCS chose Mohammed Boudiaf, an unblemished, hero of the revolution against the French who had opted for selfexile, as the new prime minister. Boudiaf led a crackdown against the Is lamists, who had gone underground and had begun an escalating campaign of armed at tacks against the regime. But Boudiaf also asserted his independence from the entrenched elite that had run Algeria for their own benefit and made clear his intention to root out cor ruption in the FLN-controlled state bureaucracies. Boudiaf was assassinated by one of his own bodyguards on June 29,1992, possibly because he was rega r ded as a threat to hard-lin ers within the aimy and FLN The Islamist camp also was fractured by internal political rivalries and disputes. Once the FIS was forced underground, its unity partially dissolved, and radical splinter groups prolif erated and gr e w stronger. The military wing of the FIS, the Islamic Salvation Army (AIS has become increasingly independent of the political leadership, much of which is under ar rest or in exile. Local guerrilla leaders, known as emirs, have waged largely autonomous s t ruggles against the government, and unaffiliated groups have opportunistically engaged in rising levels of criminal activity In early 1992, militant Islamists formed the Armed Islamic Group (GIA), one of the most ruthless and violent Islamic revolutionary organizations in the world. Founded by Algerian veterans of the Islamic jihad (holy war) against the Soviet and Afghan communist forces in Afghanistan, the GIA adamantly opposes any negotiated settlement with the government and scorns the FIS for its will i ngness to consider a dialogue with the regime. While the AIS has focused its attacks on the regime, particularly on police and military personnel, the GIA 6 Andrew Pierre and William Quandt, Algerias War on Itself, Foreign Policy, Summer 1995, p. 135 5 ha s unleashed a fierce terrorist campaign against a broad array of civilian targets, including secular opposition leaders, journalists, artists, academics, and foreigners.

The GIA has chosen such a wide variety of targets because it is fighting a cultural wa r not just a political war. It seeks to impose its vision of pure Islam on Algerian society by violently eliminating Western cultural influences that it considers a threat to that vision. Be cause it fears that secular education undermines the jihad by ta ming Algerias youth the GIA has sabotaged or destroyed roughly 700 schools and murdered over 200 teachers?

It has assassinated intellectuals, particularly those that write in French as symbols of the francophone elite that it wishes to destroy because of t hat elites secular and Westoxi cated values8 GIA and other fanatical Islamist terrorists have slit the throats of young school girls for not wearing veils that conform to their view of Islamic modesty. They have impaled the decapitated head of a hapless c o ntractor on the satellite television antenna that he was installing, because in their eyes he was helping to sprelid the decadent values of Western culture. The GIA also has killed more than 100 Algerian religious leaders with whom it disagreed9 GIA terro r ism increasingly threatens foreigners as well as Algerians. More than 90 for eign expatriates have been assassinated in Algeria since the GIA issued an ultimatum for foreigners to flee the country in September 1993 in an effort to undermine the regime. Th e GIA also has exported its indiscriminate brand of terrorism in an effort to deprive the Al giers regime of foreign support. Four GIA terrorists hijacked an Air France passenger jet on December 24,1994, and planned to crash it into the streets of Paris on Christmas day. For tunately, French commandos stormed the plane while it was refueling in Marseilles and killed the terrorists before they could deliver their gruesome Christmas offering. lo The GIA on October 7,1995, also admitted responsibility for a se ries of ei ht terrorist attacks in France that had killed eight people and wounded 130 since July. On October 17, it struck again, setting off a bomb on a crowded Paris commuter train and wounding 29 people.

The GIAs terrorist tactics, particularly its use of massive car bombs and kidnappings are similar to those of Hezbollah (Party of God the pro-Iranian Lebanese Islamist group. This is not surprising, since the GIA is believed to enjoy clandestine support from Iran and has dispatched representatives to m e et with Hezbollah leaders and with Irans Minister for Intel ligence, Ali Fallahian, who oversees much of Irans terrorist and subversive operations.2 U.S. officials maintain that Sudan also assists Algerian Islamists by allowing Iran to use Su danese temto as a transit point for arms and ammunition smuggled through Chad and Ni ger to Algeriz The Algerian government broke relations with Iran and Sudan in 1993 charging that both Islamic regimes supported Algerian terrorists R 7 The Economist Intelligence Unit , Algeria: Country Report, Second Quarter, 1995, p. 11 8 This has come to be known as intellectocide. George Joffe, Algeria-A Sombre Outlook, Junes Intelligence Review May 1994. p. 217 9 Algeria: Afghan Chaos or National Reconciliation Transstate Ish,.Summ e r 1995, p. 5 10 In retaliation, the GIA murdered four Catholic priests in Algeria 11 Thomas Kamm, Algerians Claim Responsibility in French Attacks, The Wull Street Journal, October 9, 1995, p. A8 12 French intelligence officials believe that Iran has link e d up with GIA on an operational level and may have been involved in the GIAs December 24, 1994, attempt to hijack an Air France passenger jet and crash it into Paris. Youssef Ibrahim, As Islamic Violence Accelerates, Fears of a Showdown in Algeria, The Ne w York Times, February 22,1995, p. A6 6 CURRENT STALEMATE AND GRIM FUTURE There is no end in sight to the killing, which has claimed an estimated 40,000 lives since January 19

92. As the conflict has intensified, both the Islamists and government security forces have become more indiscriminate in their use of force, leaving many Algerians fear ful and resentful of both sides. The army controls the urban centers, large towns, and oil and gas facilities, but central authority is gradually crumbling. Islamist s , increasingly domi nated by the GIA, control wide areas of the countryside, many villages, and poor neighbor hoods in many cities. Even the most secure bastions of government supporters are subject to terrorist attacks gents who are assisted by extensive support networks. l4 The military employs about one third of its 155,000 forces against the Islamists. It prefers to deploy only professional mili tary units, because many of its conscripts have defected to the rebels. Senior officers are said to distrust young officers with the rank of captain or lower. The regime relies on a paramilitary gendarmerie of roughly 30,000 and the police to perform most internal secu rity tasks. By one estimate, it can rely on about 63,000 men for security operations but can r aise this to about 90,OOO in a crisis for a short period of time.16 The government also an nounced in March 1995 that it will organize and arm up to 50,000 men in local militias.

Such militias are likely to be unreliable, except perhaps in the mountain strongholds of Al gerias Berber minority, which generally is secular and hostile to Islamist doctrines.

The Islamists have had some success infiltrating the security forces and assassinating key government officials. In March 1994, they attacked a prison, allegedly with inside help, and freed more than 900 prisoners. But the GIA and other groups also have been penetrated by government intelligence services. This has allowed the internal security forces to target the commanders of th e revolutionary Islamic forces, killing several of them. In March 1995 the army struck a devastating blow against the GIA, ambushing roughly 900 guerrillas and killing hundreds of them in a running battle that lasted several days in the rugged Ain Defla re gion, 90 miles west of ~lgiers.

The government claims that it now has the upper hand in the fighting, but this remains to be seen. Hundreds of Algerians continue to die each week, but there is little chance the army can score a military knockout with the Islamis

so well entrenched throughout Alge ria. It is more likely that a bloody stalemate has set in, with both sides too exhausted to win a decisive victory. While the regime commands little enthusiastic support, it has the passive acceptance of most of the population. Moreover, the GIAs terrorist excesses have tarnished the appeal of the Islamists and prov.oked a backlash. More young men now appear to be de fecting from the insurgents than from the army.18 The governments security forces are stretched t h in, battling against roughly 20,000 insur 13 Chris Hedges, Sudan Linked to Rebellion in Algeria, The New York Times, December 24, 1994, p. AS 14 Algeria: Afghan Chaos or National Reconciliation p. 4 15 Carol Migdalovitz, Algeria in Crisis: Situation Updat e , Congressional Research Service Report 94-241F, March 15, 1994 16 George Joffe, Algeria and the Mahgreb-The Future Looks Grim, Janes Intelligence Review, May 1994, p. 221 17 The GIA blamed the rival AIS for providing intelligence to the amy for the attac k . Algerias Islamic Armies: A Guide for the Perplexed, Transstate Islam, Summer 1995, p. 14 p. 3 7 I The military regime tentatively has sought a political resolution to Algerias predicament but has found no acceptable interlocutors willing and able to hal t the bloodshed. In October 1993, it created a Commission for National Dialogue, which sought to prepare the way for elections. The political parties declined to participate, ostensibly because they did not wish to legitimize the regime. But opposition par ties also have been intimidated by ruthless ter rorist attacks by the GIA, which rejects any form of compromise with the regime. l9 The High Security Council appointed Liamine Zeroual, a proponent of dialogue, as President on January 3 1,19

94. General Zeroual, a career military man and devout Muslim who had re signed from the army in 1988 to protest the harsh repression of the October 1988 riots, had been persuaded to return as Defense Minister in July 19

93. Zeroual had engaged in secret contacts with im prisoned FIS leaders before becoming President and quickly made it clear that he was prepared for political dialogue with all political factions, including the FIS2 Throughout most of 1994, the two top FIS leaders, Abassi Madani and Ali Belhaj, who had be e n imprisoned since July 1991, refused to enter political negotiations with the regime unless all FIS prisoners were released and Zeroual agreed to immediate elections. They re lented and agreed to start discussions in September 1994 when promised unhinder e d con tact with other FIS leaders. The two were moved from prison to a loose form of house ar rest, but little came of the talks. The FIS leaders, apparently perceiving Zerouals gesture as a sign of weakness, demanded a purge of the army and refused to ca ll for an end to the vio lenceFlThe talks had broken down by late October.

Opposition leaders briefly revived hopes for a fruitful political dialogue when they met in Rome, Italy, in January 1995 under the auspices of Sant Egidio, a Catholic lay group. In Rome, eight prominent opposition politicians representing the major political parties, princi pally the banned FIS, the FLN, and the Socialist Forces Front (FFS agreed to a national contract that set conditions under which talks with the regime could begi n . They called for the regime to recognize the FIS as a political party, release its leaders, and proceed with multi-party elections. Significantly, the contract did not require the FIS to commit itself unequivocally to democracy. The FIS made its commitme n t contingent on the framework provided by our religion, a vague formulation that can be interpreted any way the Islamists see fit. The Zeroual regime understandably rejected the Sant Egidio declaration, which also was denounced by the fanatical GIA and th e increasingly militant AIS.

Nevertheless, Zeroual maintained contact with the imprisoned FIS leaders, Madani and Belhaj, through a presidential adviser. These contacts finally were broken off in July 1995 with each side accusing the other of bad faith. Th e Algiers regime now is pressing ahead to hold presidential elections on November 16, despite the refusal of the major opposition par ties to participate 18 Algeria: Afghan Chaos or National Reconciliation e. 6 19 GIA temrists in November 1993 assassinate d Sheikh Mohamed Bouslimani, who-was closely associated with Hamas. a more moderate Islamist group, when he agreed to participate in a dialogue with the regime 20 Pierre and Quandt. Algerias War on Itself, p. 136 21 Gera, An Islamic Republic of Algeria p. 7 8 U.S. INTERESTS AND ALGERIA The military regime fighting for survival in Algiers is not a pro-Westem ally. Since inde pendence in 1962, Algeria has been ruled by radical Arab nationalists who have imposed Soviet-style economic policies and supported ant i -Westem liberation movements while staking out a claim to leadership of the nonaligned movement. Since the Algerian govern ment was not aligned with the West in the Cold War, Washington has no moral obligation to align itself with the regime clinging to p ower in Algiers today.

But Washington does have a major stake in the outcome of the struggle inside Algeria This is because the triumph of Islamic revolutionaries in Algeria, the largest state in North Africa, will have strong and lasting impact on the reg ion, the Arab world, and radical Is lamic movements throughout the Muslim world A successful Algerian Islamic revolution probably would have a greater effect on the Middle East than the 1979 Iranian revolution.

Unlike Iran, Algeria is predominantly an Ara b nation, and its people are Sunni (orthodox Muslims, not members of the smaller Shiite branch of Islam This closer cultural affinity and Algerias revolutionary history would give Algerian Islamists an entree into other Arab societies that Iranians do not enjoy.

Specifically, a revolutionary Algeria would undermine U.S. interests by posing a threat to 0 Pro-Western Arab secular regimes. An Islamist regime is likely to provide sanctuary training, arms, advice, and moral, political, and material support to I slamist movements elsewhere in the region. The Algerian Afghanis already have established links with a wide variety of other Islamists, both during the war in Afghanistan and in training camps in Pakistan and Sudan. Exiled FIS leaders have made contact wi t h a wide array of Islamic radicals in Europe. Even if the Algerians should neglect to support their coun terparts in other countries (an unlikely prospect), their success will embolden other Is lamic revolutionaries, providing a psychological boost to tho se who will see it as a vin dication of Islamism and a harbinger of things to come in their own countries.

The countries most strongly threatened would be Algerias neighbors, Tunisia and Morocco. Both already have suffered terrorist attacks at the hands of Algerian Is lamists.22 Egypt, which has managed to survive an upsurge of Islamist terrorism since 1992, also would face the possibility of Algerian aid to Egyptian Islamists channeled through Sudan. All of these governments have a strong hold on power an d enjoy consid erable popular support. They are by no means dominoes to be toppled easily. But the spillover effects of Islamic revolution in Algeria will exercise a long-term destabilizing influence in the region that harms U.S. allies and gratifies anti- W estern forces Containment of international terrorism. The triumph of Islamic revolution in Alge ria will be a victory for ruthless and indiscriminate terrorism. Not only are other Is lamists likely to imitate the tactics and strategy of Algerias GIA, but A lgerias new rul ers-if they should win-are unlikely to discard terrorism as an instrument of policy 22 Algerian terrorists killed sixTunisian border police in February 1995 and were involved in an August 1994 terrorist attack in Mmakesh, Morocco 9 Islamic Algeria, like Iran, Sudan, and Afghanistan before it, is likely to become a haven and base for Islamist terrorist groups Arablsraeli peace negotiations. The Algerian revolution is likely to electrify disgrun tled Palestinians and help strengthen the appea l of Islamist groups such as Hamas and the Palestinian Islamic Jihad. Algerias Islamists vehemently reject any compromise with Israel and would cooperate with Iran, Sudan, and Palestinian Islamists to block a permanent settlement. The galvanizing effect of Algerias revolution also would limit the degree to which cautious secular Arab regimes could take risks to support further peace efforts 8 Nonproliferation efforts. US. intelligence agencies in January 1991 discovered a nu clear research reactor that Alge r ia was building secretly with Chinese assistance. It is be lieved to be part of a clandestine nuclear weapons program.23 After it was discovered the Benjedid government announced that Algeria would sign the Nuclear Non-Prolifera tion Treaty, which it did i n January 1995, probably to help ensure continued Western support. But signing the treaty and accepting the accompanying inspection regime of the International Atomic Energy Agency cannot guarantee that the present regime or a future regime will abstain f r om developing a nuclear weapon. Saddam Husseins nu clear efforts demonstrated how easy it is to get around IAEA safeguards. A nuclear armed revolutionary Islamic Algeria, just 200 miles from Europes southern shores, is a chilling possibility that would po s e a critical threat to NATO allies, regional friends and American forces in the Mediterranean basin. Moreover, an Islamist regime in Al giers might consider sharing nuclear technology or materials with Iran, Sudan, or radi cal Islamic terrorist groups Wes t ern access to energy. Algeria has the fifth largest reserves of natural gas in the world and ranks 14th in oil. It is a major energy exporter, the third largest source of the European Communitys natural gas imports. Its importance is likely to grow when t h e Europe-Maghreb gas line, scheduled to be completed in 1996, links Algeria to Spain via Morocco. Although any regime that comes to power in Algiers will have an interest in continuing energy exports to maximize export income, Islamic revolutionaries will be prone to subversive and terrorist activities that are likely to disrupt the operations of the pipeline through Morocco or the Transmed pipeline bringing Algerian gas to Italy via Tunisia. Support for international terrorism also could trigger internati o nal eco nomic sanctions that would disrupt the flow of Algerian gas to Western markets. Alge rian support for Saudi Islamkts, who provided FIS with considerable financial sup port, would increase the risk of destabilization in Saudi Arabia, which in turn could disrupt the flow of Saudi oil exports and push up world oil prices 23 Leonard Spector, Nuclear Proliferation in the Middle East, Orbis, Spring 1992, p. 1

91. See also Iris Gonzalez, George Walne, and James Warren, The Impact of Nuclear Proliferation: The Case of Algeria, Center for Naval Analyses, September 1994 24 The Saudi government prohibited private donations to FIS activists after FIS leaders supported Iraqs invasion of Kuwait. But Saudi Islamists, such as the exiled billionaire Osama Bin Laden , still are believed to be supporting Algerian Islamists financially 10 Human rights. Although the Algerian military regime has abused human rights in its desperate struggle against Islamist terrorists, these abuses are dwarfed by the ruthless and indiscri minate campaign of terrorism and intimidation unleashed by the Islamists.

For example, secular women have been a favorite target of Islamic extremists, who have imposed temporary marriages-rape-on those they despise. If the Islamists seize power, Algerias human rights situation is sure to worsen as they seek vengeance on the supporters of the current regime and struggle for power among themselves.

Given the grave threats that a revolutionary Islamic regime would pose to American f or eign policy goals and security interests, the overriding U.S. goal in Algeria should be to pre vent an Islamist takeover. Yet current U.S. policy is to ease Algerias transition to democ racy by including the FIS in a power-sharing arrangement that lead s to national reconcili ation. This is wishful thinking that dangerously undermines U.S. interests by making it eas ier, not more difficult, for Islamists to seize power in Algeria U.S. POLICY TOWARD ALGERIA The Clinton Administration has shunned high-leve l diplomatic contacts with the Zeroual government, concerned that such contacts will be interpreted by the Islamists as uncondi tional support for the regime. No senior U.S. official has visited Algiers since 19

92. More over, American diplomats began discreet talks with Anwar Haddam, a high-level FIS repre sentative based in Washington, in late 19

93. The ostensible purpose of these talks is to pull the FIS into a political dialogue with the regime that will lead to a political settlement. But such a dial ogue is doomed unless the FIS disavows terrorism-in which case it will be at tacked by the GIA and other militants.

The Administrations policy is based on a number of questionable assumptions m That the FIS is willing and able to halt terrorism.

That the FIS is willing to play by the rules of democratic politics m That the regime is willing to accept a suicidal power-sharing agreement.

None of these assumptions is realistic. The Administrations policy therefore is under stood more properly as an insuranc e policy that it hopes will improve the chances of good relations with the FIS if and when it comes to power. Advocates of a dialogue with the FIS hope to prevent the U.S. from becoming the Great Satan in Algerian eyes, as it did in the eyes of Iranian Is lamists. But this effort to placate Islamic revolutionaries is doomed to fail ure. Algerian Islamists already are convinced of U.S. perfidy by virtue of their ideology.

They hate America as much for its culture, which they believe promotes corruption and d ecadence in their own societies, as they do for its policies. Years of bloody struggle are not likely to dilute their hostility, particularly if they are successful in shooting their way to power tions attempt to stage a rapprochement with the provisional Iranian government that trig gered the biggest explosion in U.S.-hanian relations, the 444-day hostage crisis of 1979 19

81. Islamic militants seized the U.S. Embassy inTehran in large part to discredit the pro visional government of Prime Minister Mehdi Bazargan and preclude the normalization of I The Clinton Administration would do well to remember that it was the Carter Administra 11 a Iranian-American relations.25 Radical fears of Iran-U.S. rapprochement were fed by a No vember 1, 1979, meeting in Alg i ers between Bazargan, Iranian Foreign Minister brahim Yazdi, and Carter National Security Adviser Zbigniew Bnezinski. The Carter Administra tions well-intentioned dialogue with Iranian moderates ultimately benefited Iranian hard liners, who used it to ous t Bazargan and poison USIranian relations. The Reagan Admini stration also suffered a major policy setback when it tried to cultivate Iranian moderates to secure the release of American hostages held in Lebanon.

The Clinton Administration should halt its risky efforts to cultivate Algerian moderates.

If they truly are moderates, the political dynamics of revolutionary struggle increasingly will marginalize them and limit their usefulness to the U.S. Furthermore, an American em brace actually could accelera te their demise by helping hard-liners in the GIA or in the FIS itself to discredit them.

The U.S. should work to combat and contain Islamists, not to tame them-a risky course that cannot be accomplished with any certainty. The Clinton Administration ther efore should al Break diplomatic contacts with the FIS. American diplomatic talks with Alge rias Islamists undercut the Zeroual regime by suggesting that Washington is hedg ing its bets and working to establish good relations with the prospective victor i n the bloody civil war. This eventually could underminexonfidence in the regime and encourage defections. Diplomatic talks also confer a form of legitimacy that strengthens the Islamists sense of manifest destiny and confirms their belief in Western weakne s s?6 While breaking contacts with the FIS and tilting toward the Zeroual regime may increase the risk of Algerian terrorist attacks on U.S. targets continuing a dialogue is no guarantee against such attacks. In any event, the U.S must take every precaution to improve security against terrorism al Halt efforts to pressure the Algiers regime into a suicidal power-sharing ar rangement. Given the brutality of the ongoing low-intensity war, it is unrealistic to expect the combatants to agree to genuine power-sha r ing arrangements. Power-shar ing has become a euphemism for gradual Islamic takeover. Once placed in govern ment positions, the Islamists would quickly consolidate their power and infiltrate the internal security forces. The military regime knows this and will not accept such a disguised form of surrender. Rather than publicly pressure the regime to negotiate with Islamists, which only undennines the regime and strengthens the Islamists, the U.S. should privately urge the regime to broaden its political ba s e. The U.S. also should make it clear that it advocates political dialogue with the secular opposition parties, not the Islamists. Washington should resist the temptation to meddle in Al gerian politics in a vain effort to ingratiate itself with the Islam i sts. Such appease ment will only make things worse by feeding the Islamists sense of power and dis 27 25 See James Phillips, Iran, the U.S. and the Hostages: After 300 days, Heritage Foundation Buckgrounder No. 126, August 29 1980 26 See Daniel Pipes, The r e are No Moderates: Dealing with Fundamentalist Islam, The Nurionul Inreresr, Fall 1995 27 See James Phillips, The Changing Face of Middle East Terrorism, Heritage Foundation Buckgrounder No. 1005, October 6 1994 12 dain for the weak-willed West. It would be a tragedy if the U.S. helped Islamists win through negotiations what they are incapable of winning for themselves.

France bolstered the Algiers regime with 1.2 billion of foreign aid last year and has taken the lead in lobbying the International Moneta ry Fund and the Paris Club of creditor governments to lower Algerias heavy debt burden. The IMF provided a 1 billion standby credit in April 1994 for rescheduling its debt and a $1.8 billion loan in May 1995 to support its cautious free-market reforms. Th e Paris Club re scheduled $3.4 billion of debt in July 1994, which cut Algerias debt service ratio from 75 percent in 1993 to 30 percent in 199!L2 The U.S. gives no economic aid to Algeria beyond $550 million in loans under the Commodity Credit Corporation program for imports of American agricultural commodi ties and $2 billion in loans guaranteed by the Export-Import Bank to U.S. corporations primarily involving construction of the Europe-Maghreb gas pipeline. Given its shrink ing foreign aid budget, Washi n gton cannot afford to provide direct aid to Algeria. But it can and should cooperate with France to secure aid from international lending institu tions such as the IMF and World Bank. Washington also should lobby Saudi Arabia and the other oil-rich Persia n Gulf emirates to come to Algerias aid. Finally, the U.S should encourage Algeria to undertake free-market economic reforms that can fuel eco nomic growth and create jobs that help alleviate Algerias socioeconomic crisis. This will be especially difficult in the prevailing civil turmoil, but Algerias long-term eco nomic prospects depend on it d Seek to deprive Algerian Islamists of external support. The FIS has strong grass roots that enable it to impose taxes on liberated territory and siphon aid from rad i calized groups of Algerians living in exile in Europe, particularly in France. But the GIA also receives considerable aid from Iran and Sudan. The U.S. should seek to cut this aid by punishing Iran and Sudan on as many fronts as possible. Senator Al fons e DAmatos proposed legislation to ban all U.S. trade with Iran and punish cor porations that continue such trade, the Comprehensive Iran Sanctions Act of 1995 would be a step in the right direction. Washington also should press Saudi Arabia to crack down f u rther on the financial support that wealthy Saudi Islamists have pro vided to Algerian Islamists. U.S. intelligence agencies should cooperate with their European counterparts to reduce the flow of money and arms to Algerian insurgents from Algerian expatr i ates in Europe d Prevent future Algerias. There is little Washington can do in the short run to de feat Islamic revolutionaries in Algeria. But in the long run, the U.S. can seek to pre vent friendly secular regimes in other Arab countries from making the same mis takes that Algerias FLN regime made. This means V Cooperate with France and other allies to help buy time for the regime 0 Encouraging free-market economic reforms that fuel economic growth and provide jobs and ho e to the unemployed youth who se r ve as the vanguard of Is lamic revolutions. 26 28 Economist IntelligencelJnit, Country Report: Algeria, Second Quarter 1995, p. 7 13 e Encouraging the emergence of a European Union-Maghreb free-market 42 area to bolster export-driven job growth in North A f rica to political opposition and keep Islamists based in mosques from attaining a mo i b Encouraging the development of secular political parties that can give voice I nopoly over political protest building of civil society and pluralism, not just holding elections. Algerias rush to elections gave the Islamists an advantage over other political movements that were not as organized or prepared solid foothold in Algeria in part because the Algerie government carelessly im ported hundreds of Egyptian teachers who sympathized with the Muslim Brother hood as part of its Arabization program in the 1970s. The U.S. should encour age North African states to duplicate the Tunisian model of education, which has greatly reduced the appeal of radical Islam among the you n g CD Taking a go-slow approach to democratization. The U.S. should stress the Paying more attention to the education of the young. Islamists gained a CONCLUSION Algerias fate will be decided by Algerians. But the U.S. can and should apply the les sons it learned from its experience with Iran to avoid making Algerias situation worse.

Rather than try to appease Islamists, an approach that is doomed to failure, the U.S. should break off its dangerous flirtation. Islamic moderates are a mirage. They cannot be de pended upon to restrain terrorism or deliver a political settlement. Washington should work to isolate the Islamists and help prevent them from seizing power, not facilitate a cosmetic power-sharing agreement that enables them to seize power.

There is no short-term solution to Algerias problems. The U.S. should focus instead on long-term political, economic, and educational reforms, as well as appropriate security measures, that can prevent future Algerias. If Islamists do seize power, the US. must work with France, Morocco, Tunisia, Egypt, and other interested countries to devise and imple ment a patient, fm, and concerted containment policy to prevent the spread of Islamic revolution from Algeria.

James Phillips Senior Policy Analyst 29 See Alan Richards, Containing Algerias Fallout Through Prosperity, Middle Emf Quarferly, June 1995 14


Bryan Johnson

F.M. Kirby Research Fellow in National Security Policy