After a week of discussions with our sources both inside and outside Algeria, we are able to confirm that our report and analysis of the radical last-minute changes to the 2023 Budget, (Algeria Politics & Security – 04.01.23) as published in the Official Journal (No. 89, published on 29 December 2022) was correct. 

This is despite the fact that there is still not a single reference to these dramatic changes, or the reasons for them, in any domestic or international media outlet. That is because the regime is more determined than ever to keep its workings secret from the Algerian people while, on the international front, our sources believe that it is being assisted in its silence by pressure from Paris on the French mainstream media. Why other international financial media outlets such as the Financial Times (FT), Wall Street Journal (WSJ), Bloomberg and others should ignore such a bizarre financial twist, with such potentially significant geo-political consequences, is a matter of conjecture. 

When President Abdelmadjid Tebboune began talking about a ‘new Algeria’ — shortly after the army installed him after falsifying the December 2019 election results when it appeared that Azzedine Mihoubi would win — it was difficult to understand what he had in mind, other than the increased repression of dissenting voices and views. At that time the regime could not have foreseen the COVID-19 pandemic, Russia’s invasion of Ukraine, or the resultant increase in world oil prices. However, as a result of last week’s developments — in regard to the 2023 Budget; relations with both the US and France; and further repression of the media — we now have a better idea of what the so-called ‘new Algeria’ might entail.

The consensus from our well-placed sources is that all the developments on which we reported last week — namely: the radical cut to the army’s budget and the associated renegotiation and/or cancellation of several arms contracts with Russia; Tebboune’s denouncement of the Wagner Group’s presence in the Sahel; the postponement or possible even cancellation of Tebboune’s planned visit to Moscow; and, before that, the last-minute cancellation of the Desert Shield joint military exercises with Russian forces near Béchar between 16 and 28 November (Algeria Politics & Security 06.12.22) — were all the result of US pressure on the regime to cut or reduce its fraternisation with President Vladimir Putin’s Russia. Algeria’s positive response to this US pressure was further encouraged and supported by the new Franco-Algerian rapprochement as manifested in ‘Operation Figaro’ (Algeria Politics & Security – 04.01.23).

Questions facing the Algerian army…

The key questions now are not only what next but also how do these developments affect the Algerian army — especially its Chief of Staff, Army General Saïd Chengriha — and the regime as a whole? 

The army, and especially Chengriha, will be perceived as very weak unless both are seen to be more aligned to the West. The clearest immediate indication of shifts in the army’s alignment is likely to be seen in the columns of the army’s official El Djeïch magazine. The January 2023 (No.714) issue should be published within the next couple of weeks. If Chengriha is not seen to be changing, he is likely to be removed and President Tebboune will not stand by Chengriha if the army turns against him.

However, there are many imponderables that will have a bearing on the mood within the army and the regime as a whole. On the international front, Russia’s war against Ukraine, especially the way in which it comes to an end, will be telling. The way in which US-China relations develop over the next couple of years could also have a major influence.

The major determinants, however, are domestic. Although the international oil price will be as important as always, the biggest problem facing Algeria lies within the regime itself. The biggest and most delicate problem is the fact that 35 generals, many of whom held powerful positions, are currently in prison. Their continued imprisonment on highly questionable charges, as explained in the case of the dismissal of Major General Djamel Hadj Laaroussi (Algeria Politics & Security – 13.12.22), could become explosive, while their release could open up equally dangerous and wholly unpredictable recriminatory actions.

…and especially General Mohamed Kaïdi

A large question mark hangs over the future of General Mohamed Kaïdi. He was generally regarded as the logical successor to the late General Ahmed Gaïd Salah as the Chief of Army Staff. However, he was dismissed in November 2021, presumably on the orders of General Chengriha, and was arrested a month later (Algeria Politics & Security – 26.04.22), since when he has been held in some form of detention. Kaïdi’s release and reinstatement was one of the key demands made by Deputy Secretary of State Wendy Sherman during her 10 March 2022 visit to Algiers (Algeria Politics & Security – 15.03.22), and again by US Secretary of State Antony Blinken during his 30 March visit (Algeria Politics & Security – 29.03.22 and 05.04.22).

This week, we learnt from reliable sources that General Kaïdi has been released from whatever kind of imprisonment in which he was being held. There has been no announcement about this in any form of Algerian media and nor has the date of his release been made known. However, because it appears to have coincided with the latest round of US pressure on Algiers, we assume that it was an outcome of Washington’s latest ‘expression of wishes’. According to our sources, Kaïdi has been seen playing sport and exercising in the gym, which perhaps suggests that he is readying himself for a comeback. Whether that will happen will largely depend on how Chengriha reacts over the next few days and weeks.