Taken together, the attack on the U.S. embassy in Benghazi, Libya, the Islamist attacks on Mali, and now this Algerian offense, all point to north Africa as the geopolitical hotspot of 2013 — where the Arab Spring has morphed into the War On Terror.
Dozens of hostages and militants have died in the attack on Algeria‘s Ain Amenas natural gas plant, 60 miles from the Libyan border. The companies operating the plant, including BP and Norway‘s Statoil, have evacuated hundreds of workers from the country. At least one of the remaining hostages is said to be from Houston, Texas.
So far world oil and gas prices have barely reacted to the events. Clearly the market has reassured itself that this is just a one-off event rather than the beginning of an era of further oil and gas supply disruption in north Africa. Let’s hope the market is right.Mokhtar Belmokhtar’s group, which launched the attack on the gas plant, has reportedly claimed that it will continue operations against the Algerian government. The militants who launched this week’s attack were reportedly carrying heavy weapons, machineguns and rocket-propelled grenades that were used by the Libyan army during Khadafi’s rule.
Algeria can’t afford that. Algeria’s 1.1 million barrels of daily oil exports bring in more than $50 billion a year to Algeria, cash that goes straight into government coffers, supply the lion’s share of the government budget. According to an IMF report, Algeria’s national balance sheet has deteriorated in recent years. Having ramped up social spending when oil output peaked in 2008, Algeria now needs oil prices north of $100 a barrel to balance its budget. That breakeven number could quickly ratchet up, as oil companies quash plans to invest in Algeria in favor of friendlier territories like Texas.
The Algerian government’s forceful reaction to the attack — strafing the facility with helicopter gunships, and possibly killing hostages in the crossfire — shows that it is serious about stopping attacks by Islamist militants. The government is hunting militants who have escaped, presumably with the full cooperation of the United States. Defense Secretary Leon Panetta said yesterday, “Terrorists should be on notice that they will find no sanctuary or refuge; not in Algeria, not in North Africa, not anywhere. Those who will want only to attack will have no place to hide.”
The initial events of the Arab Spring largely passed Algeria by. The multi-national revolution was touched off in Tunisia when a grocer burned himself to death. The demonstrations that followed eventually culminated in the toppling of governments in Algeria’s neighbors Tunisia, Libya and Egypt, as well as Yemen. Syria’s despot will soon fall as well.
Algeria saw protests as well, but nothing that has shaken the foundations of social order. It’s not so much that the Arab Spring passed by. In reality Algeria’s government has been fighting off Islamists for decades. Algeria’s civil war began in 1992 with the assassination of President Mohamed Boudiaf by a bodyguard with Islamist leanings. A decade of fighting between the government and Islamist groups claimed some 200,000 lives before ending with the defeat of the Islamic Salvation Army and the Armed Islamic Group in 2002.
But splinter groups of Islamist forces endure, and have been openly affiliated with Al Qaeda since 2003.
A real concern is that militants emboldened by the Islamist takeover of Egypt, and having earned battle experience (and gained arsenals of weapons) in the long uprising against Muammar Khadafi, will not only seek to impose their will on Mali, but reassert themselves in Algeria as well.
President Obama has not yet made any public comments about the Algerian situation. National Security Council spokesman Tommy Vietor said today that “We are in constant contact with the governmenet of Algeria and have been clear that our first priority is the safety and security of the hostages.”
If hostages are the first priority, let’s hope that the second priority of the White House is to give Algeria the support it needs to drive out the Islamists and prevent future attacks. Don’t just leave that job up to France.
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