Terror, Oil and Repression in Algeria

The Journal of North African Studies

RESEARCH ARTICLE

Terror, oil and repression in Algeria

Amir Azarvan*

Department of Political Science and International Affairs, Kennesaw State University, Kennesaw, Georgia, U.S.A.

Received 23 March 2009

This paper investigates the impact of foreign direct investment on human rights in Algeria. No direct link is discovered between foreign investment and the repression of human rights. This is largely due to the peculiarities and, in the special case of Algeria, the location of the hydrocarbon sector, which together make repression less necessary. First, since the hydrocarbon sector uses relatively little labour, there are fewer occasions on which labour rights would be suppressed. Second, oil and gas reserves are concentrated in a thinly-populated region of Algeria, where there are fewer people to protest the allegedly negative effects of foreign investment and, hence, fewer people to repress. Nevertheless, case study findings indicate that FDI has indirectly sustained repression in Algeria. Explanation is attributed to the centrality of the country’s hydrocarbon resources to the global economy. It is suggested that countries in demand of Algeria’s oil and gas have exercised restraint in criticizing Algeria’s human rights record. Buttressed by the diplomatic support of their partners as well as by large arms transfers, the Algerian government has been able to choose repression over concession as its primary response to domestic unrest. This study also points to ways in which the Algerian experience provides the grist for theoretical refinement. Specifically, it suggests that repression is more likely in industries that are more labour-intensive and are concentrated in densely-populated regions.

Keywords: Lesotho; foreign direct investment; human rights; repression

* Email: [email protected]

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To what extent are multinational corporations (MNC) - or, alternatively, foreign

direct investment (FDI) flows – responsible for the repression of human rights in

developing countries?1 Is foreign investment generally associated with better human

rights practices, as neoliberals argue? Or, does FDI tend to lead to greater repression, as

structuralists contend?2 Both propositions are assessed through case study analysis of

Algeria.

More in tune with structuralist theory is the finding that the dramatic increase in

FDI has not set into motion a process that has culminated in a greater respect for human

rights in Algeria. There is little to no evidence of an improvement in the socioeconomic

status of the average Algerian, and there has been no appreciable decrease in repression.

Through indirect channels that will be explicated below, foreign investment in Algeria

has, in contrast, sustained high levels of repression.

The following section addresses the literature on FDI and human rights, providing

the theoretical lenses through which Algeria is viewed. The subsequent discussion deals

specifically with the case of Algeria. It examines temporal trends in FDI flows to Algeria

and sets the country in the context of its conflict with political Islam. A consideration of

the continuing influence of Algeria’s ‘war on terror’ on Algeria’s foreign relations and

government propaganda and policy is indispensable towards understanding how FDI

relates to human rights in Algeria.

The next section covers ties between MNCs and the Algerian government, and

describes their relationship as one of mutual influence. Afterwards, the true bases on

which U.S.-Algerian inter-governmental relations are based are described. As explained

more fully in the section on repression, the nature of Algeria’s foreign relations provides


an important clue as to why, in spite of the official end of Algeria’s decade-long Civil

War, the repression of human rights has not significantly diminished.3 In exchange for

continued access to Algeria’s coveted oil and gas resources, the world’s most powerful

countries have stepped up economic, diplomatic, and military support for the repressive,

military-backed regime.

The three sections that follow address the question of FDI’s impact on Algeria’s

economic and political development, socioeconomic well-being and, ultimately, physical

integrity rights. It is also pointed out that it may be misleading to interpret reductions in

repression as increased respect for human rights. After all, people’s recognition of the

government’s capability and willingness to repress acts as a partial deterrent against

participating in such destabilising acts as demonstrations, strikes and riots, which will in

turn reduce the need for repression. The conclusion consists of a summary of the central

points raised in this article, as well as a discussion of the adequacy of the neoliberal and

structuralist theoretical models in explaining the Algerian case.

The literature on FDI and repression

This study evaluates the neoliberal and structuralist theories on foreign investment

and human rights. Traditionally, both schools of thought have been concerned, first and

foremost, with economic development; not human rights, per se. Yet in the context of a

discussion on the effects of foreign investment on repression, it is appropriate to follow

the example of others (e.g., Evans 1999) in employing the labels, ‘neoliberal’ and

‘structuralist’ in reference to those students of human rights who base their claims on the

theoretical premises of either school of thought.

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Those belonging to the neoliberal camp stress the salutary effects of foreign

investment on human rights attainment. Their approach rests on three premises, which

can be conceptualised as successive stages in a causal pathway that leads, ultimately, to

greater protection of human rights. According to the first premise (alternatively, in the

first stage), FDI contributes to economic development (Firebaugh 1996; De Soysa and

Oneal 1999; Jensen 2003). Second, living standards markedly increase in the context of

this development (Meyer 1996). Finally, these socioeconomic changes enhance the

protection of physical integrity rights (Meyer 1996; Richards et al. 2001; Apodaca 2001).

A diverse group of theories falls under the umbrella of ‘structuralism’. Sharing in

common a close affinity with Marxist schools of thought, they focus ‘…on structural

means of exploitation, in which one class dominates another or rich Northern states in the

core of the global economy dominate poorer states in the periphery’ (Cohn 2000, p. 106).

Rather than stimulating social and economic development, MNCs, structuralists

argue, have the effect of augmenting either unequal development or absolute poverty.4

Such unfortunate outcomes, moreover, derive from the hierarchical structure of the

international capitalist system (Dos Santos 1970), which weakens the governments of

developing countries vis-à-vis both MNCs and wealthier states (Oloka-Onyango and

Udagama 2000). Consequently, host countries are kept in a state of dependency and

underdevelopment (Evans 1979; Bornschier and Chase-Dunn 1985), as the primary

concern of MNCs is profits, not the economic well-being of host countries. Repression

of human rights ultimately results when this arrangement is challenged by domestic

dissent (Chase-Dunn and Grimes 1995, p. 396; Evans 1999, p. 43).


Empirical research on FDI and human rights appears, by and large, to vindicate

the neoliberal approach. Apodaca’s (2001, p. 598) results ‘supports Meyer’s (1996)

conclusion that there is a favourable relationship between FDI and human rights.’

Similar findings are reached in Richards et al.’s (2001) study. Hafner-Burton (2005, p.

695) concludes that although they are not entirely robust, there are reasonably strong

‘…reasons to believe that foreign direct investment is very likely correlated with better

human rights practices across all states over time.’ In short, the more FDI, the better

human rights practices become.

However, in spite of the apparent consensus in favour of the neoliberal

perspective, there are important reasons why it would be premature to conclude the

debate. First, quantitative researchers seem to have misunderstood the causal

mechanisms that structuralists believe link FDI to repression. This is revealed in the

misguided attempt to discover a direct link between FDI and human rights (e.g., Meyer

1996; Apodaca 2001). Such tests ignore a crucial variable that, as structuralists imply,

mediates the effects of FDI on the level of repression: domestic unrest. Unless this is

present, there is little incentive to repress. As Chase-Dunn and Grimes (1995, p. 396)

argue, force (which, presumably, involves repression of human rights) ‘…is used only

when the market “rules” (which act to sustain the dominance of the core) are challenged

by insurrection.’ Similarly, according to Stephens (2002, p. 51), a foreign business is

often guaranteed to be complicit in human rights abuses when it ‘…invests in a region

with a repressive government and political unrest’ [emphasis added].

Furthermore, standard interpretations of variance in repression need to be

evaluated. Reported links between foreign investment and reductions in repression are

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typically interpreted as suggesting that governments have become more ‘respectful’ of

human rights (e.g., Richards et al. 2001). Alternatively, however, such patterns might

simply mean that foreign investment has fostered an environment in which repression

becomes less necessary since people are deterred from protesting (and thereby provoking

the government to repress them). This issue merits greater attention.

The case of Algeria

As far as socioeconomic well-being and human rights are concerned, there was

considerable room for improvement at the time of Algeria’s breathtaking 1996 surge in

FDI. These conditions afford one the opportunity to assess the neoliberal claim that this

increase in FDI worked to ameliorate socioeconomic welfare and, ultimately, reduced the

repression of physical integrity rights. Throughout this period, moreover, Algeria’s

political and economic order had been routinely undermined by acts of unrest. Hence,

Algeria is also an appropriate testing case for the structuralist theory that countries

receiving large flows of FDI are, in times of domestic unrest, more repressive. The

remainder of this section expounds on these conditions.

Algeria in the early 1990s was characterised by widespread perceptions of

poverty as well as acute job shortages; especially among the youth. In 1995, the

unemployment rate was estimated to be at 25 % (Ibrahim 1995). That year, Algeria also

had the fifty-sixth lowest Human Development Index (HDI) score, out of a total of 144

countries.5 This period was also marked by numerous and egregious acts of human rights

abuse, perpetrated in the context of a decade-long civil war between Government forces

and the Armed Islamic Group (AIG), a militant offshoot of the Islamist opposition. The


conflict, the number of reported deaths from which range between 120,000-200,000

lives,6 has its immediate roots in the 1991-1992 parliamentary elections. Results from

the first round of voting indicated the likelihood that the Islamic Salvation Front (ISF)

would win the requisite number of seats to alter the constitution and fundamentally

transform Algeria’s political system. The military regarded this as an intolerable threat to

the political order they established and from which they directly benefited and,

accordingly, cancelled the second ballot.

The fragility of Algeria’s democratic institutions was thus laid bare. The ten-year

period during which the Civil War was waged was characterised by innumerable and

egregious human rights abuses. Amnesty International (AI) (1997a, p. 5) discusses in

vivid detail the various methods of torture that have been employed:

The most common [method] is the chiffon (the cloth), whereby the detainee is tied to a

bench, a cloth is stuffed into his mouth and large quantities of dirty water mixed with

chemicals is poured into his mouth, causing near-suffocation and swelling of the

stomach. Other common methods include the chalumeau (blowtorch), used to burn the

face and other parts of the detainee's body; electric shocks to testicles, earlobes and other

sensitive parts of the body; mock executions and beatings.

At present, although low-level violence persists, the war is viewed as having

ended with the surrender of the GIA in 2002. Nevertheless, Algeria continues to exist

under a state of emergency that was imposed in 1992. How Algeria’s security situation

relates to the repression of human rights will be explained below. The case will be made

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that repression in Algeria can only be properly understood in the context of the Algerian

government’s largely self-produced war on terror.

Interestingly, and for reasons that will be discussed, the increase in foreign direct

investment in the mid-1990s occurred during, and in spite of, the Civil War. FDI to

Algeria had soared from $10,000 in 1995 to $270 million (the highest amount since

1980) the following year.7 Since then, there has been a general upward trend in FDI;

reaching over one billion dollars in 2001. In more recent times, Algeria has been listed

among the top 10 recipients of FDI in all of Africa (UNCTAD 2007). The destination for

the bulk of foreign investment is Algeria’ hydrocarbon sector (World Investment Report

2007, p. 127), which, as is discussed below, is consequential with respect to how FDI

relates to repression.

Has the surge in foreign investment produced positive and lasting changes in

socioeconomic well-being? Has it, ultimately, reduced the frequency with which such

abuses as those described above occur? Or, has it exacerbated social and economic

conditions and been, in some way, responsible for more repression? Each of these

questions is addressed below.

MNC--Algerian relations

To what extent are MNCs involved in Algerian politics? Do they exert the kind

of influence over the Algerian government that is assumed by structuralists? Although

there are direct and indirect ways by which corporate involvement appears to be

manifested in Algeria, it will be explained how it is possible to overstate Algeria’s

dependence on MNCs.


Direct cooperation between MNCs and the Algerian government

The level of corruption in a country frequently signifies the extent of corporate

influence on government policy. Through bribery, MNCs are often in a position to

purchase, so to speak, government policy, especially in developing countries. To employ

ideal type reasoning, the boundaries between state and business are more apparent than

real at the most extreme levels of corruption. Such a scenario is consonant with the

instrumental Marxist assumptions held by most structuralists.

It is suggestive, therefore, that corruption has been particularly rife in Algeria.

Through the years 1996-2006, Algeria was described in the World Bank’s Governance

Management Report as ‘…not able to adequately deal with and control corruption’

(InfoProd 2007). Yet despite the continuity of Algeria’s relatively high level of

corruption - as measured by the Index of Economic Freedom - throughout most of this

time period, FDI flows to Algeria had soared throughout the mid- to late-1990s.8 Hence,

the Algerian experience stands in stark contrast to the conventional wisdom that

corruption is an intrinsic deterrent to foreign investment. Indeed, if any relationship

between corruption and foreign investment exists, it appears to be a positive one. For

instance, the year in which Algeria’s Freedom from Corruption score had plunged to

almost half of its original value was also marked by the one of the largest amounts of FDI

flows (totalling over one billion dollars) during this period.

Corruption is especially endemic in Algeria’s oil industry. (Oil and Gas Journal

2004)9 Publish What You Pay, a coalition of over 300 nongovernmental organisations

(NGOs) which is calling for the obligatory disclosure of payments made by natural

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resource extraction companies to all governments, has identified Algeria as one of the

many countries affected by ‘resource governance’ problems. There, ‘revenues from

resource extraction are disclosed neither by the governments nor the companies involved.

This lack of accountability facilitates embezzlement, corruption and revenue

misappropriation’ (Publish what You Pay, no date).10

Expectedly, such pervasive corruption and other manifestations of this corporate-

state partnership result in government policies that favour the interests of foreign

investors. As far back as 1989, Algeria’s rulers were accused of ‘…having received

around $26 billion in bribes and other “under the table” payments for contracts signed

with foreign firms over the [previous] 20 years’ (Inter Press Service 1992). In more

recent times, many have taken note of the ‘profitable secret affairs’ (Gèze and Mellah

2007) between generals in the Algerian Army and certain American oil companies.11 The

activities of the latter have not been strictly limited to exploiting the country’s natural

resources and suggest a particularly close relationship with the Algerian military. The

construction of two hospitals for the military was underway in 2004 (Ruta 2004).

Further, the Financial Times (1998) reported that

…foreign companies hire foreign security experts to liaise with local army and

gendarmerie officers. At least some companies provide the shelter and food for army

units stationed around individual fields and company camps in Hassi Messaoud [a town

in Eastern Algeria].

In short, there has been considerable cooperation between MNCs and the Algerian

government (or elements thereof). In addition, there is a second factor that has


strengthened corporate-government ties that is much more indirect though nonetheless

significant, and it derives from the government’s ardent desire for foreign capital.

A race to the bottom?

The Algerian government has issued numerous pleas – mostly, though not

exclusively, to Western countries - for increased foreign investment (e.g., see Associated

Press 2000) and the greater its demand for FDI, the more susceptible it becomes to the

influence of multinational firms and foreign governments. It is in this indirect way that

MNCs – as well as their home governments - have significantly shaped the policy and

behaviour of the Algerian government.

During his visit to the United States in 2001, which was prompted ostensibly for

diplomatic reasons, Bouteflika ‘…appealed to a diverse collection of American

companies, reminding them that Algeria was open for business’ (Africa News 2001). For

a variety of reasons, however, U.S. firms expressed misgivings about operating in

Algeria. Topping their concerns was a government excessively involved in the economy,

and legislation viewed as not adequately protective of foreign business interests.

Accordingly, they conditioned trade and investment on ‘substantial progress made in

Algeria's commerce laws to promote trade and investment, as well as…a faster pace of

privatisation and restructuring of Algeria's poorly performing state-owned banks and

corporations’ (Ibid.).

Already, ‘some progress [was] being made’ in response to these demands (Ibid.).

While many with a neo-liberal orientation still see room for improvement, government

policy has been notably investment-friendly. In guaranteeing ‘…the transfer of profits

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out of the country and [protecting] investors from possible legislation changes’ (Info-

Prod Research 2005), the Algerian government has extended an invitation to foreign

investors that is difficult to decline. There appears to be little sign, moreover, that it will

reverse its overall welcoming stance on foreign investment in the foreseeable future.

With the Civil War having come to an official close, the Government ‘publicly

announced a goal of doubling the number of foreign companies doing business there’

(Mihailescu 2006). Further, to the extent that bilateral investment treaties are indicative

of the erosion of government sovereignty (Peterson 2006),12 then the growing trend in

BITs signed throughout the 1990s is telling (see Figure 1).13 As explained below,

however, it is important not to overstate Algeria’s dependence on foreign countries.

0

20

40

60

80

1981

1984

1987

1990

1993

1996

1999

2002

2005

Total # of B

ilateral

Investment Treaties

Figure 1: Bilateral investment treaties in Algeria (1990-2004) Source: http://www.unctad.org

The limits of MNC influence: Algeria as semi-peripheral

According to the ‘race to the bottom’ thesis, MNCs seek host countries with lower

corporate taxes and lax regulatory environments, and unless a prospective host country


adequately responds to this demand (by dismantling labour and environmental

regulations and guaranteeing low corporate taxes), it risks losing investment projects to

one of the many other countries ‘desperate’ for foreign capital. Hence, the sheer number

of countries competing for foreign investment weakens the bargaining position of each.

However, it would be more than an exaggeration to assert that the Algerian

government is impotent in its dealings with MNCs. As will be explained, the Algerian

case exposes two basic weaknesses in the ‘race to the bottom’ thesis. First, what is

neglected is that many host countries – Algeria included – sit atop vast oil and gas

reserves which function as the fuel of modern capitalist development. Often, these

natural endowments confer on their governments considerable bargaining leverage vis-à-

vis MNCs. This argument is neither novel nor foreign to dependency theory. Moran

(1975 cited Evans 1979, p. 45), suggests that ‘…the government stands the best chance of

improving its position in industries involving extraction of raw materials, where

technology is stable and fixed investment is large.’ As Chazan (2008) observes,

Only those Western oil companies that [help] Sonatrach achieve its international oil

ambitions – can expect preferential treatment in Algeria. With oil hovering at $90 a

barrel, and Algeria sitting on the world’s seventh-largest natural-gas reserves, no one is in

much of a position to argue.

The second weakness of the ‘race to the bottom’ thesis derives from the tendency

of its advocates to depict the host government as a benevolent victim of foreign capital.

Owing to its desperate desire for foreign investment, which, it is presumed, will spur

economic development and ultimately alleviate poverty, the government is driven against

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its will to accept a suboptimal route to development. However, an objective look at the

empirical world will reveal the naïveté of assuming that governments necessarily have

the interests of their people in mind. Further, as was suggested, the Government and

foreign businesses operating in Algeria are relatively equal partners. While Algeria is,

indeed, dependent on foreign capital, its negotiating weakness is offset by the ‘core’s’

dependence on the country’s natural resources and on the Algerian government to control

– to borrow from Evans’s (1979, p. 24) phraseology - the ‘means of violence’.14

Although a ‘developing’ country, Algeria is far less subordinate to the ‘core’ than those

structuralists who dichotomise the world into periphery and core would expect. If,

indeed, the Algerian people are being exploited and repressed as a result of foreign

capital, then MNCs and the government share in the blame.

Inter-governmental relations

At surface level, Western-Algerian relations appear to be significantly shaped by

the mutual desire to fight global Islamic terror (which has replaced communism as the

principle evil in international politics) and/or a common commitment to protect a

fledgling democracy against domestic forces that are inherently hostile to it. Although

vested economic interests are by no means denied,15 they are, in public pronouncements

of foreign policy towards Algeria, subordinated to geopolitical interests.

It is the purpose of this section, however, to refute both the counter-terrorism and

democracy explanations for Algeria’s foreign relations. It will be argued, instead, that

economic interests are, in reality, of paramount importance. Appearances to the contrary,

politics is being exercised in a manner that is explicable from a structuralist perspective.


The principle argument of this section is that the Algerian government has skilfully

exploited the global fear of Islamic terrorism (or ‘terrophobia’) in order to justify its

repressive means of maintaining power and to garner international sympathy and support

for its political and economic objectives. As for those countries involved in Algeria’s

lucrative hydrocarbon sector, terrophobia has also been used to legitimate, in the name of

solidarity in the global ‘War on Terror’, the strengthening of economic ties with a

repressive and demonstrably anti-democratic regime. Such cooperation has been

accompanied not only by the seeming reluctance on the part of these countries to criticise

the Algerian government’s dismal human rights record, but also by military assistance.

The end result, despite the Algerian government’s declared success in its own war on

terror, is further repression.

The counter-terrorism argument

U.S.-Algerian relations had remarkably improved after, and owing to, the 11

September 2001 attacks against the Pentagon and the World Trade Centre. Algerian

President, Abdelaziz Bouteflika, had seized the opportunity provided by the attacks ‘to

side with the anti-terrorist coalition…’ (Ganley 2005). Accordingly, Bouteflika had

visited the White House the following November to express his support for the global

War on Terror.

In stressing a connection between the Algerian civil conflict and the wider,

international effort to combat terrorism, Bouteflika presented Algeria as being most

capable of empathising with the United States in the wake of the 11 September attacks:

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Maybe Algeria better than anyone else understands the sorrow of the families of the

victims of the attack of September 11…Algeria is aware of the necessity and the

importance [of joining the war against terrorism] because it has been fighting in the

past…for a tragic decade (Lindlaw 2001).

To substantiate the relevance of Algeria to the global War on Terror, the

Bouteflika Government pointed to the alleged link between Al Qaeda and the Salafist

Group for Preaching and Combat (GSPC), a militant Islamic group classified by the

United States and the European Union as a foreign terrorist organisation. This

connection was reportedly revealed on 12 September 2002, when Imad ibn al-Wahid, a

Yemeni accused of being a representative of al Qaeda in the Sahel-Maghreb region, was

alleged to have recorded a message granting Al Qaeda’s approval to the GSPC. The

announcement was of considerable political significance, as it ‘…enabled Algerian

authorities to argue that their terror problem is not specific to the country but part of the

wider international battle against Islamic extremism’ (Haven 2007).

Nevertheless, the authenticity of this recording - one of the few pieces of evidence

for a GSPC-Al-Qaeda connection - has been called into question (e.g., see Michael

2007). As Mellah and Revoire (2005) report, ‘three former members of the GSPC have

stated that the recording is a fake concocted by the group’s audiovisual unit.’

Notwithstanding the claims of the Algerian government, the country’s terrorist

problem has primarily been a domestic phenomenon. As Mellah and Rivoire (2005)

note, ‘GSPC operations are dictated exclusively by Algerian concerns, even if its

members declare solidarity with jihadists fighting other battles.’ Similarly, the U.S. State

Department (2007, p. 95) indicates that, prior to the 10 December 2006 attacks on a


convoy carrying employees of an affiliate of U.S. oil services company, Halliburton (for

which GSPC purportedly claimed responsibility), ‘terrorism in Algeria was generally not

aimed at foreign entities. Instead, the country's major terrorist group, the Salafist Group

for Preaching and Combat (GSPC), preferred to target Algerian government interests.’

At best, therefore, the GSPC’s attacks on U.S. interests have been triggered by, rather

than a cause of, closer ties between the United States and Algeria.16

Also suspect is the timing of Algeria’s terrorism problem. According to statistics

provided by the Terrorism Knowledge Database,17 terrorism was nearly non-existent until

1991, when the Civil War had begun.18 This is telling given the claim (see below) that

Algeria’s security apparatus is to blame for most of the political crimes committed since

the onset of the Civil War. The temporal distribution of terrorist incidents also exposes

the weakness of the Government’s argument (see above) - which has served as a pretence

for cancelling the second ballot of the 1991-1992 parliamentary elections – that the FIS

was an intrinsically violent movement.

Of course, the presence of militant Islamic groups in Algeria and their

involvement in acts of terrorism seem beyond dispute. Yet many mainstream sources,

including Human Rights Watch (HRW), have attributed most of the political crimes

committed since the start of the Civil War to the Algerian army and police (see Godoy

2003). Many acts of violence previously (and automatically) attributed to the GIA were

later acknowledged to be the works of Algeria’s security forces. Two examples will be

discussed in order to demonstrate this point, and the motivations behind this seemingly

counter-intuitive behaviour will then be explicated. The first example deals with an

incident in May 1996, where

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…four brothers and their 84-year-old father were killed, reportedly by members of the

security forces, in their home in the suburbs of Algiers in front of their mother, wives and

sister. The family reported that they were asked by the security forces to sign a

declaration stating that their relatives had been killed by ''terrorists'' (Amnesty

International 1997b, p. 69).

The second example concerns an attack carried out the same year on a Trappist

monastery in the town of Tibhirine that resulted in the deaths of seven monks. Although

AI (2007) reported that the ‘…GIA [had] claimed responsibility,’ it was later discovered

that agents of the DRS [the Département du Renseignment et de la Sécurité, or the

Department for Information and Security] were the likely suspects (Godoy 2003).

Even former members of the Algerian military have spoken out on DRS

involvement in false-flag operations.19 One former Special Forces officer claims to have

witnessed torture, massacres and other atrocities while serving, alleging that ‘…the

military has perpetuated a climate of fear to retain its power’ (Ganley 2002). Another

officer has lodged similar accusations and confesses that the mission of the DRS ‘…was

to stop the FIS taking power by whatever means’ [emphasis added] (Aït-Ouméziane

2002).

Such tactics forms part of what is referred to as a ‘strategy of tension’.20 Attacks

are committed and falsely attributed to others for the purpose of instilling fear of, and

resentment towards, a designated enemy (in the particular case of Algeria, Islamic

terrorists). In so doing, the real perpetrators exploit these emotions in order to enhance

its legitimacy and to justify harsh responses to the framed culprits. Through terrorism, in


other words, the government builds domestic and – as discussed below - international

support for its own confrontation against political Islamists.21

Such illicit behaviour has been motivated not only by the desire to secure

domestic support, but also that of the United States. What specific benefits does it

anticipate from presenting the GSPC as enmeshed in a global terrorist network, from

participating in such false flag operations as those discussed above, and from being

regarded by the West as a key ally in the War on Terror? It would be naïve to interpret

Bouteflika’s commitment to the global war against terrorism as based merely on altruistic

motives. Rather, Bouteflika’s expressions of solidarity with the United States and its

allies are frequently, if not invariably, accompanied by requests for arms purchases and

military support, which appear to have been readily been accepted. According to the U.S.

Agency for International Development (USAID), U.S. military assistance to Algeria had

sextupled from 2002-2003.22 On average, arms imports to Algeria total $291 million

annually.23 A more comprehensive programme of military assistance is being carried out

under the U.S. Trans-Sahara Counter-Terrorism Initiative (TSCTI). Active since 2005,

the TSCTI is intended, in the words of Theresa Whelan (US Deputy Assistant Secretary

of Defence for African affairs), to prevent the Maghreb ‘…from becoming a safe haven

where terrorists can train, organise and plan their operations’ (Press Trust of India 2005).

Under this programme, a total of $100 million is expected to be spent annually for five

years on arms transfers, military training and intelligence sharing (Ibid.).

Nevertheless, the purpose of the TSCTI has been called into question. The

ultimate objective of the U.S., such critics like Maya Rockeymoore (board member of the

TransAfrica Forum, a Washington think tank) allege, is to safeguard Algeria’s ‘…oil

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resources from the encroachment of other nations that are also interested in the oil, such

as China’ (Lasker 2006).24 This argument is given greater weight in light of the fact that

the Sahel is not, in reality, ‘a hotbed of terrorist activity’ (International Crisis Group

2005, p. i). Regardless of the motivation(s) behind the TSCTI and related programmes,

however, Algeria has clearly benefited militarily from the War on Terror.

The democracy argument

It is equally doubtful that a common commitment to democracy has significantly

informed Western-Algerian relations. This is amply demonstrated by the Algerian

government’s decision to cancel the 1992 election and the Bush (Sr.) Administration’s

reluctance to publicly condemn this act. The notion that the FIS was inherently prone to

violence provided the rationale for the subversion of Algeria’s ostensible democracy. In

reality, however,

…the FIS was…a political front composed of a variety of different Islamist

organisations, none of which [prior to the onset of the Civil War] had a history of

violence. It was actually the army’s cancellation of the…elections that radicalized

Algerian politics (Cook 2007, p. 32) [emphasis added].

If the wish to promote democracy underlined U.S. foreign policy towards Algeria,

then one should expect that the cancelled election would have elicited a round criticism

from the United States Yet, as will be explained, the muted reaction in the United States

invites the claim that Washington’s commitment to democracy has been merely

rhetorical.


Western ties to other non-democratic regimes cast further doubt on the democracy

argument. With respect to political Islam, Testas (2002, p. 187) points out that ‘having

Saudi Arabia and Kuwait as close allies does not seem to bother the United States as long

as their “religious fundamentalism” is confined to domestic politics. Islamic

fundamentalism becomes fearful to the United States when it questions…the new liberal

international order.’ Cold War history further reveals that the publicly-expressed desire

to spread liberty has often served merely as a pretext for foreign relations that, in reality,

are based on less savoury motives.

In short, the abusive practices of the Algerian government have both helped to

create terrorist movements and included terrorist acts that it falsely attributed to these

movements, in order to secure domestic and international support for the political status

quo. As will be discussed below, moreover, it appears that this strategy has proven

successful.

Foreign investment, development, and socioeconomic conditions in Algeria

FDI: an engine of development?

It is difficult to overstate how crucial the exploitation of its oil and gas reserves is

to Algeria’s economy. As Mutume (2000) observes, ‘the hydrocarbon sector

there represents the main pillar of its economy accounting for, on average, 95 percent of

export earnings and 60 percent of budgetary revenues during the last five years.’ In the

Algerian case, therefore, economic growth, itself, might be viewed as a rough proxy

measure for the specific impact of FDI in the hydrocarbon sector on the national

economy.

A. Azarvan

Assessments of economic development in Algeria in recent years have been

conflicting. Although the country has experienced what the World Bank (2007, p. 42)

has described in a recent report on Middle Eastern and Northern African economies as a

‘dramatic’ reduction in its official unemployment rate, it bodes poorly for Algeria’s

future that youth unemployment has been on the rise (World Bank 2007, p. 46).

Elsewhere, the World Bank was noted for stressing ‘…Algeria's “grave institutional

shortcomings” and the “extreme weakness” of its programs to back economic growth’

(Maghreb Confidential 2007). Concerns have also been expressed about the dominant

role the hydrocarbon sector continues to play in Algeria’s development (World Bank

2007, p. 6).

On the other hand, common indicators of economic development suggest that

Algeria has progressed remarkably since the 1996 surge in FDI. For instance, there was a

marked increase in GDP per capita growth after 1996.25 This is attributable not only to

FDI, itself, but also to government policies that encourage and protect foreign

investment. According to the IMF (2007), ‘ongoing reforms are starting to bear fruit.’

Under Bouteflika’s tenure, ‘the economy has grown about 4 percent a year, and Algeria

has succeeded in trimming its foreign debt by more than 20 percent’ (Keaten 2004).26 In

short, ‘Algeria's economy is booming’ (Lamine 2006), by most accounts.

Socioeconomic conditions in Algeria

Algeria, a rich country, has become a kind of banana republic – a couscous republic!

- Soleiman Adel Guémar, Algerian poet and journalist


Has the influx of FDI to Algeria improved, in an empirically-verifiable way, the

socioeconomic well-being of its people? Using the Human Development Index (HDI) as

a gauge (see Figure 2), it is clear that ‘well-being’ has steadily increased eight points over

the 1990-2004 time period. Other indicators show similar improvements. For instance,

between 1990 and 2005, infant mortality had considerably decreased, from 54 deaths per

1000 live births to 34 (child mortality was reduced even further, although 2005 data are

unavailable).

0.600.620.640.660.680.700.720.740.760.780.80

1990

1992

1994

1996

1998

2000

2002

2004

Human Development Index

Figure 2: Human Development in Algeria (1990-2004) Source: http://www.undata.org. HDI scores are available every 5 years. Changes are interpolated over intervening years.

Given their timing, however, it is doubtful that these improvements in

socioeconomic conditions can be attributed to the increase in FDI in the mid-1990s.

After all, progress was already under way prior to the increase and merely continued

afterwards (though, with respect to infant and child mortality, at slower rates). This is

especially evident in Figure 2, in which the HDI trend line rises only steadily, without a

more or less sudden increase in steepness following the surge in FDI.27

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Of course, FDI flowed into Algeria well before its sharp 1996 increase, albeit at

lower levels. Is it possible that these earlier flows were extensive enough to precipitate

significant improvements in socioeconomic wellbeing? According to the Financial

Times (1998), the country’s oil and gas wealth does not seem to have trickled down to

the average resident:

While difficult social conditions, housing shortages and rampant unemployment plague

the North…there is no large population in the south [where most FDI is being channeled]

to benefit directly from foreign oil company largesse in the form of community

development projects and cash grants.

Indeed, while the national economy continues to ‘grow’, there are reports of acute

housing and water shortages (Housego 2002), rising gas prices, increased homelessness

among divorced women and their children, and the need to create jobs (Amnesty

International, 2006).28 The UN Human Development Programme was cited as having

reported a marked increase in the size of Algeria’s impoverished class, which had then

comprised more than a fifth of the population (BBC Summary of World Broadcasts

1999). In the context of economic ‘development’, it appears that living standards for the

average Algerian are disturbingly low. As consistently reported in U.S. State Department

annual reports on Algeria’s human rights practices (e.g., State Department 2006), ‘the

national minimum wage of $140 (10,000 dinars) per month [does] not provide a decent

standard of living for a worker and family.’ Doggett (2003) makes reference to the

‘…grinding poverty that is the lot of half the population.’


Indicative of the dire socioeconomic conditions confronting Algerians, the

country has been racked by a number of strikes and violent protests that AI attributes to

social and economic conditions (Amnesty International 2007). A textile worker sums up

the general sentiment in a succinct and a particularly powerful way: ‘We don’t have

enough to feed our children. We’ll march on Algiers if we have to. If that’s not enough,

we’ll smash everything’ (Burns 1998). In short, Algeria’s ‘growth’ says nothing about

how its accumulating national wealth is being distributed. ‘The macro economy is great,’

says one sociologist. ‘But the micro economy is still lagging behind’ (Lamine 2006).

Demockracy in Algeria

What effects, if any, has FDI had on Algeria’s political system? As previously

shown, FDI has not significantly improved the socioeconomic conditions of Algerians.

Hence, insofar as economic ‘development’ is viewed as consisting in such improvements,

a challenge to the neoliberal theory is already evident. If a causal link between FDI and

greater democratisation or reductions in repression were to be discovered, then it must be

explained via a different theoretical model.

Clearly, the influx of FDI did not, as neoliberals would expect, engender a process

that culminated in greater democratisation.29 As measured by Polity IV data, the level of

democratisation remained static for seven years after the 1996 surge in foreign

investment.30 While multiple presidential elections, legislative elections and referenda

have been held since then, extremely low turnout rates and widespread allegations of

electoral fraud suggest that democracy does not exist in practice.

A. Azarvan

The two most recent national legislative elections amply demonstrate this point.

Although, in the 2002 national legislative elections, foreign journalists ‘…praised the

good handling of the elections which were held in an atmosphere of peace and freedom’

(BBC Monitoring Middle East 2002), nearly 70% of voters failed to cast ballots

(Housego 2002).31 Turnout in the elections held five years later was described as the

lowest in Algerian history (Deutsche Presse-Agentur 2007). In responding to the

question of whether he would vote in the 2002 elections, one Algerian affected by the

country’s housing shortage crisis responds in a manner that aptly expresses the

widespread lack of confidence in the ability of Algeria’s pseudo-democratic institutions

to ameliorate the living conditions of the average Algerian: ‘Never! It won't change

anything’ (BBC Monitoring 2007).

The increase in Algeria’s democratisation score in 2004 - the year of Algeria’s

most recent presidential election - was hardly the result of FDI (after all, this increase

transpired eight years after the 1996 surge in FDI - a much longer time period than that

typically examined in the literature). Rather, as Cook (2007, p. 60) suggests, the

military-backed government felt secure enough – having won the Civil War - to permit

(once again) a greater opening in the political system: ‘the defeat of the Front Islamique

du Salut and its armed wing led the Algerian military establishment to conclude that an

existential threat to the regime no longer exists.’

Even so, allegations of electoral fraud were reported. According to a spokesman

for Ali Benflis - one of the five candidates competing against Bouteflika for the

presidency – ‘they [i.e., riot police] burned ballot boxes, harassed our election observers

and blocked streets leading to the polls’ (Keaten 2004). Thus, little seems to have


changed since the 1999 presidential election, which, Ganley (1999) argues, was so

‘besmirched by fraud charges’ that Bouteflika’s competitors had dropped out of the race.

Repression of human rights

In the previous two sections, it was explained how FDI has produced neither a

greater opening in its political system nor the social and economic changes that are said

to facilitate it. Further, as Figure 3 shows, FDI does not seem to have led to a drop in

repression of physical integrity rights. Although the Civil War had clearly intensified

repression, as most human rights scholars (e.g., Poe et al. 1999; Richards et al. 2001)

would expect, there is no discernable trend in repression after the 1996 surge in foreign

investment.

Figure 3: Repression of Physical Integrity Rights in Algeria (1990-2006)

0

1

2

3

4

5

6

7

8

1990

1992

1994

1996

1998

2000

2002

2004

2006

Level of Repression

Figure 3: Repression of Physical Integrity Rights in Algeria (1990-2006) Source: Cingranelli-Richards Human Rights Dataset (CIRI). The scale is reversed so that higher scores indicate greater levels of repression.

The experiences of contemporary Algeria, therefore, appear to contradict the

neoliberal theory on foreign investment and repression of human rights. However, the

A. Azarvan

degree to which they cohere with historical structuralism is a far more complicated

matter. On the one hand, there is scant evidence of repression that is directly associated

with foreign investment activities. On the other, as will be explained below, the

peculiarities of the hydrocarbon sector as a target of FDI helps to explain why FDI works

to sustain repression, albeit in an indirect way. The section concludes with a discussion

on the potential pitfalls in describing reductions in repression as increased respect for

human rights.

Peculiarities of Algeria’s hydrocarbon sector

As a target of FDI, the hydrocarbon sector is unique in that, relative to other

sectors, it ‘employs very little labor’ (Woo et al. 1994, pp. 80; 95). As far as workers

rights are concerned, therefore, one is likely to see fewer abuses of workers rights

associated with this less labour-intensive sector. Of course, human rights are not limited

to those pertaining to the worker, and there are other contingencies on which the

relationship between repression and foreign investment in the hydrocarbon sector is

based.

The Algerian case suggests that geography is among the most important factors

mediating this relationship. Specifically, repression should be more common where oil

and gas reserves are concentrated in densely populated areas. For in such areas, there

will be larger numbers of people cognisant of, and protesting against, potential disparities

in the sharing of oil wealth, as well as affected by possibly negative externalities

produced by foreign oil firms (such as various forms of environmental degradation). This

directly relates to human rights, for population size and repression are positively and


strongly correlated (Poe et al. 1999, p. 294). This relationship is likely to be even more

robust when the population in question feels particularly aggrieved over the management

of a key economic sector.

A brief comparative look at the divergent outcomes of the Algerian and Nigerian

cases will help to illustrate the relevance of geography. The governments that constitute

the oil-rich Niger delta region of Nigeria are much more densely-populated than the

Southern-Algerian provinces where the country’s oil and gas reserves are concentrated.32

In the latter, moreover, there is a sizable number of inhabitants who are nomadic or

partly-nomadic, and thus for whom environmental degradation is presumably less

consequential.33 This explains why political violence and repression appear to occur with

greater frequency in Nigeria’s populous and oil-rich Niger Delta region than in the

sparsely-populated and largely nomadic provinces of Southern Algeria.

In the context of Algeria’s war on terrorism, the geographical concentration of

FDI proffers another advantage, from the perspective of the military-backed regime.

Algeria’s terrorism problem - largely of the government’s own creation - has legitimated

the formation of ‘exclusion zones’ in the four Southern provinces of Ouargla, El-Oued,

Laghouat, and Ain-Salah, where much of the hydrocarbon industry and many foreign

employees are located (State Department 2006). In this region, travel is restricted and is

accessible only to employees of oil companies and residents possessing special passes

(Associated Press 1995). As the former Secretary-General of Amnesty International,

Pierre Sané, (1997) notes, this project has been remarkably successful at warding off

external threats: ‘When Algerian authorities claim that the security situation is “under

control” they mean it. Oil and gas flow, in absolute security.’

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Owing to Algeria’s exclusion zones, oil company executives are confident that

‘…oil and gas industry will continue to be sheltered from the violence and that the

government’s survival is not threatened’ (Financial Times 1998). Government officials

from the home countries of oil companies have expressed a similar view that the Civil

War has not affected foreign investment flows to Algeria. As former US Assistant

Secretary of State for Near East Affairs, Robert Pelletreau (1996), notes: ‘The ongoing

violence is discouraging much-needed private investment except at remote desert oil

fields.’

If Algeria’s oil and gas reserves were more geographically dispersed, the

difficulty in isolating them from attacks would be immense. It is, in large part, their

territorial concentration and, consequently, the greater ease with which the government

can shield them from such external threats that shapes the relationship between foreign

investment and repression in Algeria. From both the violence of the Civil War and the

social and political unrest that continues with much greater frequency in other parts of the

country, the exclusion zones have been remarkably well-guarded over the years. Hence,

there is little in the way of a direct connection between investment in the hydrocarbon

sector and violent repression. Until such threats to government survival or investment

interests materialise, there is little need for repression.

Indirect causes of repression

The temporal variation of human rights repression, as illustrated in Figure 3, is

somewhat puzzling. Although the Civil War had officially ended in 2002, repression

remains high. With a brief exception in the years 2004-2005, when Algeria’s physical


integrity rights index score was three (the lowest score since 1990), it jumped to a seven

(the second highest level of repression) in 2006. In that year,

torture continued to be used with impunity…There were persistent reports of torture and

ill-treatment in the custody of the [DRS]…Detainees held in DRS custody said they were

beaten, tortured with electric shocks, suspended from the ceiling, and forced to swallow

large amounts of dirty water, urine or chemicals (Amnesty International 2007, p. 52).

In addition, with the government of emergency imposed in 1992 still in force, the

freedoms of expression and assembly continued to be restricted, and journalists, trade

unionists and defenders of human rights defenders were subject to harassment and prison

sentences (Amnesty International 2007, pp. 51-52).

To a large extent, this persistence of repression can be attributed to two factors.

The first is deducible from the analysis given by Eric Goldstein (2006), Research

Director for Human Rights Watch’s Middle East and North Africa Division:

The national treasury, heavily indebted when the violence was raging a decade ago, is

now awash with petrodollars… [One] might expect [this trend] to augur more openness

and democracy. But…Algeria is moving toward less, not more, freedom (Ibid.).

Goldstein sees Algeria’s accumulating oil wealth as responsible for the country’s

lack of political freedom. Freedom, in turn, has been empirically-associated with a

country’s level of human rights repression (e.g., Poe et al. 1999; Apodaca 2001; Richards

et al. 2001). Thus, in spite of the partial restoration of peace, the revenues generated by

Algeria’s vast oil and gas reserves have arguably worked to sustain repression (thus

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contradicting Pritchard’s (1989) finding that government revenue and repression are

inversely related). One might expect that civil wars have the general effect of draining

government coffers. Assuming that this is in fact the norm, Algeria’s recent conflict is

clearly an exception to the rule. During the years 1994-2006, the revenue base of the

Algerian government had increased by 48 %;34 enabling it to purchase hundreds of

millions of dollars in arms imports.

The second factor relates to the West’s economic interests in Algeria. Assuming

that the Algerian government is subordinate to its American counterpart, the latter should

not be expected to hesitate (being, as it has portrayed itself, the chief advocate of freedom

in the world) to bring the former in line with democratic and human rights principles.

Yet the case has been made that the U.S.-Algerian relationship has not been one of

submission. Rather, the West’s increasing dependence on Algerian oil and gas confer on

the latter considerable influence, such that the United States - and the West as a whole -

has been reluctant to publicly acknowledge Algeria’s closed political system and abusive

human rights practices.

With respect to the military’s decision to cancel the second ballot of the 1991-

1992 parliamentary elections, for instance, one U.S. government source confessed that

‘Washington did not want to be “very critical” of the Algerian authorities’ (Lobe 1992).

Although this period predated the 1996 surge in FDI, one can speak of FDI in 1992

(which amounted to $30 million) as ‘low’ only in relation to the colossal size of the

former. It is reasonable, moreover, to view the 1996 surge as the outcome of extensive

planning and negotiations with the Algerian government. That is, although FDI in 1992

had yet to reach its mid-1990s level, the mere anticipation and preparation for that future


time may have been sufficient to mould foreign policy according to investors’

preferences.

This may be the very reason why those members of the U.S. House of

Representatives who sponsored H.CON.RES.196 had, in a comparative sense, such a

weak link to the oil and gas sector. In one of the few instances in which a U.S. political

institution publicly indicted the Algerian government for its conduct leading up to and

during the Civil War, the resolution expressed the view ‘that United States assistance to

Algeria should be terminated unless its military backed government proceeds toward

democratization.’ What is noteworthy of those who sponsored this Resolution – other

than that they were predominantly Democratic in party affiliation35 - are the relatively

small sums they had received that year from political action committees and individuals

associated with the oil and gas sector.36 Specifically, the average amount they accepted

as a group was 62 % less than that of the average representative.

Another illustration of the abiding influence of oil politics concerns Algeria’s

ranking as the world’s worst human rights violator, according to the Observer Index of

Human Rights. As one reporter who covered the Algerian Civil War comments, ‘…this

is a record none of the Western powers, so keen to develop their billion-dollar oil and

gasfields, will acknowledge’ (Sweeney 1998). Interestingly, for eight of the nine years in

which annual State Department and Amnesty International Reports were (as coded

numerically in the Political Terror Scale dataset) in disharmony, the former evaluated

Algeria’s human rights record somewhat less harshly than did the latter.37

Finally, it is worth noting that dependence on oil, per se, should not be understood

as a burden that a modern capitalist economy bears by necessity. In the American

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context, such dependence is itself perpetuated by the oil and gas lobby, which has worked

to prevent Congress from developing a more popular energy policy that stresses

renewable and alternative sources of energy (Mayer 2007). This carries important

theoretical and methodological implications for how MNCs ought to be studied.

Although, in the human rights literature, MNC activities are often conceptualised

exclusively in terms of FDI flows, this discussion suggests that MNCs indirectly impact

human rights through, in addition, such lobbying efforts as those discussed above. This

explains why the United States (and the West in general) has tolerated human rights

abuses not only in countries where MNCs have heavily invested in the extraction of

hydrocarbon resources (e.g., Algeria), but also in oil- and gas-rich countries where they

have not (e.g., Saudi Arabia). By frustrating efforts to explore alternative energy sources,

MNCs help to prolong a country’s dependence on oil and gas, which in turn facilitates

continued repression in countries from which these resources are imported.

Pre-empting repression

Reported links between foreign investment and reductions in repression are

typically interpreted as suggesting that governments have become more ‘respectful’ of

human rights (e.g., Richards et al. 2001). Alternatively, however, such patterns might

simply reflect a climate in which repression is deemed unnecessary since people are

deterred from protesting (and thereby provoking the government to repress them).

Hence, it is not that governments have somehow become enlightened by human rights

principles. Rather, repression might be considered superfluous as a means to end since

that end (i.e., political stability) has already been achieved.


Through acts of legislation that hamper collective action and criminalise peaceful

expressions of dissent, as well as by maintaining a tight grip on the country’s trade

unions, the government has actively worked to pre-empt instances in which violent

repression of human rights are necessary. The remained of this sub-section will first

address the effects of Algeria’s 2006 amnesty laws on freedom of expression, and will

proceed to discuss government-imposed constraints on trade union activity.

‘Ostensibly in an effort to bring closure to the conflict of the 1990s’ (Amnesty

International 2006, p. 55), President Bouteflika called for a referendum on the so-called

Peace and National Reconciliation Act, which consists of laws that essentially grants

systematic amnesty to security forces and state-armed militias for crimes committed

during the Civil War, and criminalises the criticism of previous government violations of

human rights. In September 2005, an estimated 97 % of voters were reported to have

backed the Charter (Ganley 2005), though referendum figures have been disputed, and

monitoring of the vote counts was not permitted (Algeria: Referendum Figures Queried

2005).

Under the amnesty laws, ‘…anyone exposing human rights violations or wishing

to generate debate about them could face prosecution and up to five years’ imprisonment,

or 10 years in the case of a second offence’ (Amnesty International 2006). As Goldstein

(2006) comments, ‘…Never before has a government, in the guise of healing a nation

after a fratricidal war, threatened to impose such heavy punishments on those who dare to

pose critical questions about the past.’

Such restrictive legislation sends an important signal to potential dissenters of the

dangers of criticising the government, and thus serves as an important deterrent against

A. Azarvan

political protest. The manner in which the referendum on the Charter was conducted is

an apt illustration of this deterrence effect, as it effectively communicated to Algerians

the danger of opposing the Charter. As Slackman (2005) notes,

it was very easy for poll watchers to tell how people voted. Blue ballots, which meant

yes, could easily be seen through the white envelopes they were tucked into before being

dropped into a ballot box. The no ballots were white.

Consequently, though opposition to the Charter was rife, many ‘…were afraid to

give their names because to be against the referendum was perceived as dangerous’

(Ibid.). Assuming that people are generally rational, it should be expected that a history

of brutal government repression in response to domestic unrest will inform their decision

on whether and how to protest. Using the past as a cue, would-be-protesters in this

example have avoided actions that would have likely prompted further repression. It

seems reasonable to assume that the amnesty laws, themselves, have had a similar

deterrent effect since their adoption.

Repression is also pre-empted by restrictive labour laws that constrain union-led

efforts to protect workers rights, and by practices that circumvent laws that, otherwise,

provide for such rights. As the U.S. State Department (2006) notes, ‘the government may

invalidate a union's legal status if its objectives are determined to be contrary to the

established institutional system, public order, good morals, or the laws or regulations in

force.’ Such vague language permits a wide variety of circumstances in which the

government can revoke a union’s official status. In addition, although unions are legally

entitled ‘…to form and join federations or confederations…attempts by new unions to


form federations or confederations have [in practice] been obstructed by delaying

administrative maneuvers’ (Ibid.).

The government has also intervened in the internal affairs of trade unions with

which it is not affiliated. For example, the National Independent Union of Public

Administration Personnel (SNAPAP) has ‘…accused the government of staging

fraudulent elections to replace the group's secretary general, the third attempt at such a

replacement since 2001’ (State Department 2005). The use of such manipulative tactics

bodes poorly for the ability of SNAPAP and other unions to act independently of the

government.

Owing to these efforts, the government has succeeded in restricting the number of

unions entitled and able to operate in Algeria. Indeed, there is only one labour

confederation in existence: the Union Générale des Travailleurs Algériens (UGTA) (or

the General Union of Algerian Workers). However, the UGTA is, itself, widely regarded

as having been thoroughly infiltrated by the government. As Houssin Zahouan, the

General Secretary of the Algerian League for the Defence of Human Rights, avers,

‘things are stymied because the leadership of [UGTA] is completely under the control of

the government’ (International Viewpoint 1997). Perhaps this is one reason why, in

1997, the UGTA ignored calls from opposition parties to strike in protest of allegedly

rigged municipal and regional elections. The UGTA, Khiari (1997) explains, has ‘often

[sided] with the military-backed government.’

Despite the above description, Algeria has, in recent years, witnessed a number of

strikes orchestrated by the UGTA, which appears to confirm its autonomy from the

government. Interestingly, however, a key sector is consistently excluded from these

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strikes. As exemplified by a 1993 strike involving government workers, ‘…the union,

Algeria’s most powerful, exempted the oil and gas sector from the protest.’ Thus, one

may argue, in Structural Marxist fashion, that the government has been willing to

countenance low-level unrest in order to diffuse more significant threats to the political

status quo. Insofar as protests are occasionally tolerated, the UGTA is given an aura of

independence, the government appears somewhat responsive to societal demands, and the

hydrocarbon-fuelled military order remains fundamentally intact.

Conclusion

There is little evidence of a direct link between foreign direct investment and the

repression of human rights in Algeria, as mediated by acts domestic unrest. This is

largely explicable in terms of the peculiarities and, in the specific case of Algeria, the

location of the hydrocarbon sector, which render repression less necessary. First, there

are fewer occasions on which labour rights – in particular – would be violated, as the

hydrocarbon sector is notably less labour-intensive. Further, oil and gas reserves are

favourably concentrated in a relatively sparsely-populated region of Algeria, where there

are fewer people to complain of allegedly-negative environmental and economic effects

of foreign investment and, thus, fewer people to repress.

Nevertheless, it was suggested that FDI has been indirectly associated with

repression. Given how indispensable Algeria’s oil and gas reserves are to the global

economy, countries that might otherwise be in a position to exert pressure on Algeria to

ameliorate its human rights practices have not only been reluctant to do so, but have

contributed (consciously or otherwise) to its repressive capability by supplying it with


military aid. In exchange, Algeria’s foreign partners are ensured continued access to its

abundant natural resources. This exchange is carried out under the veneer of a global war

against terror.

It was also explained how further repression has been precluded by various

government efforts that are best considered neither repressive (in the direct sense of

violating physical integrity rights) nor concessionary. As was argued, one is likely to see

few acts of repression when it serves no instrumental purpose, as repression is rarely an

end in itself. Such a scenario, however, does not reflect the government’s decision to

internalise human rights norms and join the community of ‘civilised’ nations. The

atmosphere in Algeria – where collective action is significantly hindered and protest is

stifled – is, at least for those genuinely concerned with human rights, hardly a success

story.

To what degree of accuracy do the neoliberal and structuralist theories explain the

Algerian case? Beginning with the former, each hypothesised stage in the causal theory

(see above) appears to be contradicted by the facts. FDI neither contributed to

socioeconomic advances in Algeria, nor did it ultimately lead to greater democratisation

and respect for human rights.

The question of historical structuralism’s explanatory power is a decidedly more

difficult one to address. To reiterate, structuralists do not assume that unrest is an

automated response to FDI; nor, therefore, is repression. Hence, large FDI flows and low

levels of repression may coexist without necessarily contradicting structuralist theory. A

true contradiction would involve instances in which unrest did not provoke greater

repression where FDI flows are particularly high. For reasons discussed above, although

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Algeria has experienced numerous demonstrations, strikes and violent protests in recent

years, unrest associated with foreign investment activity, in particular, was rare.

Therefore, the apparent absence of a direct link between FDI and repression is hardly

surprising from the perspective of structuralist theory.

Rather than undermining structuralism, the Algerian experience contains insights

from which one can draw in refining it. Specifically, it focuses attention on the

distinctiveness of the hydrocarbon sector, and thus places one in a better position to more

adequately specify the conditions under which unrest and, consequently, repression are

likely to occur. In this regard, Algeria has served an important heuristic function.

Notes 1 FDI, defined by the World Bank as any investment that results in a lasting interest in or effective management control over a foreign business, has been described as the most appropriate means of quantifying MNC presence in poorer countries. Hence, MNC activity and FDI are often used interchangeably. See Meyer (1996, p. 386). 2 The complete designation of this theory is ‘historical structuralism’. 3 Although Algeria’s historic links to France and its evolving relationship with Russia are undoubtedly significant as well, this article focuses specifically on its ties with the U.S. to illustrate relations between the ‘Core’ (as some structuralists call it) and Algeria. 4 Bornschier and Chase-Dunn are representative of the former alternative, and Muller is representative of the latter. 5 Data are available at http://data.un.org/. 6 Estimates vary considerably. As Ganley (2002) notes, ‘secrecy has shrouded the decade-long conflict…and even the death toll is uncertain.’ 7 Data are available at http://unstats.un.org/. 8 Data are available at http://www.heritage.org/index/. 9 As noted in the Oil and Gas Journal (2004), Algeria and other oil-producing countries ‘don't fare well’ on measures of the perception of corruption. On a scale 1-10, Algeria scored below a three on the Corruption Perceptions Index. 10 This may go a long way towards explaining why the massive state revenues accruing from the hydrocarbon sector do not appear to have been distributed in a way that has significantly improved the lot of the average Algerian (see below). 11 The scandal involving Brown Root and Condor (BRC) a joint venture between Sonatrach (an Algerian government-owned oil corporation) and U.S. oil services


company, Halliburton, illustrates how blurred the distinction between business and the ruling establishment has become in Algeria. BRC has come under scrutiny for having allegedly spied on behalf of the United States. It was reported that ‘in addition to the managing director of the BRC company, a number of senior state officials and army officers were also accused of espionage.’ The company had been closed down after a previous scandal involving its ‘…irregular contracts with the defense and energy ministries’ See BBC Monitoring International Reports, 2007. Algerian Weekly Paper Says Officials Involved in Spying for US – Al-Jazeera TV. 7 June. 12 Together with Host Government Agreements (HGAs) (as well as the more numerous trade agreements containing specific provisions pertaining to the protection of foreign investments), bilateral investment treaties (BITs) serve as indicators of the transfer of government sovereignty to MNCs. As Peterson (2006, p. 20) notes, BITs are ‘one-sided instruments. They are concerned with limiting the measures that may be taken by governments against foreign investors or foreign-owned investments.’ Hence, from the perspective of government sovereignty, the steady growth of BITs - reaching upwards of 2,400 (Ibid.) – is telling. 13 Arguably, the drop in BITs after 2002 has less to do with the restoration of government sovereignty than the simple fact that there is a finite number of countries interested and able to conclude such treaties with Algeria (from 1981-2006, Algeria had signed a total of 73 BITs). 14 As Evans (1979, pp. 23-24) argues, the ‘core’ powers learned from experience that the direct use of military force to protect their interests in the periphery was too costly and frustrating. Hence, the ‘decentralization of violence’ was increasingly seen as more preferable, as it appeared ‘…easier to train and equip local police and armed forces than to try to maintain order by sending in the marines.’ 15 For example, Robert Pelletreau (1996), former US Assistant Secretary of State for Near East Affairs, acknowledged that ‘beyond a geopolitical interest in regional stability, U.S. interests also include sizable public and private investment in Algeria’s hydrocarbon sector.’ 16 It is also worth noting that the threat posed by the GSPC has been significantly mitigated. As the International Crisis Group notes, ‘the…GSPC, which lost 43 militants in a battle with Chad's army in 2004 after being chased across borders by PSI-trained troops, has been seriously weakened in Algeria and Mali by the combined efforts of Algerian and Sahelian armed forces.’ See International Crisis Group (2005, p. 3). 17 The particular website supplying these data (http://www.tkb.org) is no longer operational. 18 TKB defines terrorism as ‘…violence calculated to create an atmosphere of fear and alarm to coerce others into actions they would not otherwise undertake, or refrain from actions they desired to take.’ 19 For an in-depth discussion on false-flag operations committed during the Algerian Civil War, see Aggoun, L., and Rivoire, J.-B., 2004. Françalgérie, Crimes et Mensonges d’Etats, (Franco-Algeria, Crimes and State Lies). Paris: Editions La Découverte. 20 For a scholarly study on alleged employment of the strategy of tension, see Ganser, D., 2005. Nato’s Secret Armies: Operation Gladio and Terrorism in Western Europe. London: Franck Cass Verlag.

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21 However many acts of terrorism were, in actuality, committed by the GIA or the GSPC in the 1990s, it seems clear that they were more reactions than provocations to the government’s violently anti-democratic behaviour. The International Crisis Group was quoted as saying that ‘Algeria… [faces] Islamist insurgencies which their own human rights and anti-democratic practices helped provoke.’ See Lobe, J., 2001. Politics-U.S.: Anti-Terrorism Takes the Place of Anti-Communism. Inter Press Service, 23 September. 22 Data can be obtained from http://qesdb.usaid.gov/gbk/. 23 Data are obtained from the Stockholm International Peace Research Institute (SIPRI), and are available at http://armstrade.sipri.org/. 24 See also Hallinan, C., 2006. Desert Faux: The Sahara’s Mirage of Terrorism. Foreign Policy in Focus, 2 March. 25 Data are available at www.worldbank.org/data 26 The Bouteflika presidency has also been attributed with the reduction of Algeria’s unemployment rate. See Sahar, L., 2006. Algeria Details New Upstream Windfall Tax; Oil minister Admits Foreign Investors Likely to Suffer. Platts Oilgram News, 18 July. 27 It is also noteworthy that the percent change in life expectancy (a component of the HDI) remained constant after the surge. Data on life expectancy are obtained from the World Development Indicators dataset (WDI). WDI data is available for purchase or through many university library databases. 28 According to UN data, unemployment reached a high of 27 % in 2001, although it has been reduced in recent years. Unemployment data can be obtained from http://unstats.un.org/unsd/cdb/cdb_help/cdb_quick_start.asp. 29 Of course, it might be argued that FDI could have fostered a political opening, had it not flowed during the Civil War. This view rests on the assumption of an inverse causal relationship between internal wars and political freedom. However, this assumption is invalidated by this author’s own quantitative research. On the contrary, internal wars were discovered to be positively associated with higher levels of democratization. Perhaps internal wars generally cause leaders to make political concessions and/or culminate in new regimes that are more democratic. To obtain data, please contact the author. 30 Data are available at http://www.systemicpeace.org/inscr/inscr.htm. 31 For an official explanation of the low turnout, as expressed by Algeria’s State and Interior Minister, see BBC Monitoring Middle East, 2002. Algeria: Final results of General Elections. 31 May. 32 This comparison is made on the basis of available population and geographical data on the regions of Algeria and Nigeria where hydrocarbon reserves are concentrated. A methodological problem is raised by the fact that there is not a single year for which there is population data on both areas. Specifically, only 1998 data on the relevant Algerian provinces (i.e., El Oued, Illizi, Laghouat, and Ouargla) exist, while for the relevant Nigerian states (i.e., Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo, and Rivers) only 1991 and 2005 data are available. To circumvent this problem, 1998 population estimates are derived for each Niger Delta state by prorating the differences between the government’s 1991 and 2005 data over the intervening years, and then summing up the 1998 estimates for the entire region. As the Bayelsa and Rivers states are missing 1991 data (which is expected in the case of Bayelsa, given that the


government was not created until 1996), estimates are obtained by multiplying their 2005 figures by the average percent change in the population of the remaining Niger Delta states from 1991-2005. Based on these rough estimates, it appears that the total population of the Niger Delta (24,294,276) in 1998 was almost nineteen times that of Algeria’s relevant provinces (1,301,253). When taking geographical area into account, this means that the population density of the former (219 km²) was approximately thirteen times greater than that of the latter (16 km²). 33 After all, assuming the various lands in which nomadic/partly-nomadic people might choose to temporarily settle vary in degree of environmental degradation, more degraded lands could be avoided. 34 The specific measure used is government revenue (excluding grants) as a percentage of GDP. Data are obtained from the World Development Indicators dataset. 35 Party affiliation and the amount of money representatives received from the oil and gas sector was correlated at the .01 level of significance. 36 Data are available at http://www.opensecrets.org/. 37 In one study, a bias in favour of U.S. allies was found to be a statistically-significant predictor of differences between these yearly reports (although it did not explain a large percentage of the variation). See Poe, S., Carey S., and Vazquez, T., 2001. How are these Pictures Different? A Quantitative Comparison of the US State Department and Amnesty International Human Rights Reports, 1976-1995. Human Rights Quarterly, 23 (3): 650-677. References Africa news, 2001. Algeria; will American companies come when Bouteflika calls? Africa news, 26 July. Aït-Ouméziane, K., 2002. Charges eclipsed as regime goes on trial [online]. Available from: http://www.algeria-watch.org/en/articles/2002/regime_trial.htm [Accessed 4 November 2007]. Algeria: referendum figures queried, 2005. Africa research bulletin: political, social & cultural series 42 (10), 16383-16384.

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Terror, Oil and Repression in Algeria

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