Algeria: A Storm Gathering On The Mediterranean

Like other die-hard expatriates who refuse to flee Algeria's violence, American oilman Al Sehsuvaroglu moved recently from his Algiers villa into the tightly guarded Sofitel hotel. There, the operations manager for Halliburton Energy Services hopes to wait out the carnage by Muslim terrorists, who have murdered two dozen foreigners since September and vow to kill others who don't leave.

There's a chance that this wave of terror may mark the worst point in Algeria's two-year-old struggle between a repressive, army-backed regime and Islamic fundamentalists seeking an Iranian-style government. The country's emergency rulers are now promising to step down by the end of January and hold a conference of reconciliation to choose a new consensus government and plan elections. However, observers in Algiers are skeptical. They point out that such moves have been promised before, and they doubt whether key fundamentalists will be included.

CIVIL WAR? So Algeria could be facing a lengthy agony. The current violence--in which 3,000 Algerians have died--might even escalate into full-scale civil war, believes Dirk Van Dewalle, a Mideast scholar at Dartmouth College. War across the Mediterranean is a frightening prospect for Western Europe, already staggered by the war in Bosnia. A new flood of immigrants would surely result. And a militant Islamic regime in a major Arab country such as Algeria would undoubtedly energize other fundamentalist movements in the region, including those in Egypt and Saudi Arabia.

Popular support for the fundamentalists stems less from religious zeal than from a sick economy with 30% unemployment--the result of a corrupt, one-party socialist system. Algeria is oil-rich, but falling prices mean petroleum income is down--to $10 billion in 1993, from $12 billion in 1992. And 90% of oil revenues go to service the country's foreign debt of more than $26 billion.

The West is hoping to head off chaos with financial aid. Current talks with the International Monetary Fund could lead the West to forgive up to $6 billion in debt and lend new funds to ease debt service. In return, the IMF would demand a currency devaluation and trade liberalization. France--the main loser if civil war generates immigrants--is trying to use this deal to prompt Algeria's warring factions to negotiate.

It's not clear if that tactic will work. The most fiery militants threaten to kill their own leaders if they attend January's planned conference. Yet there are a few signs the fundamentalists may realize they're stalemated. A key exiled militant, Rabah Kebir, had rejected all negotiation. But in late December, he seemed to signal a change of attitude by laying down conditions for talks.

GHOST TOWNS. Algeria's army is the main force blocking the fundamentalists. The current government is its pawn. Military brass fear the fundamentalists because their counterparts purged Iran's army. But experts say the military must accept Islamic participation in a new government. "It's the only way out of the crisis," says Larbi Talha, a leading Algeria scholar in France.

Meanwhile, the fundamentalists' Dec. 1 deadline for foreigners to leave or face death has triggered an exodus of embassy and company staff, turning the expatriate neighborhoods of Algiers into ghost towns. Still, a few foreigners, including Halliburton's Sehsuvaroglu, think it's worth staying around. "Petroleum is Algeria's lifeline that can't be cut off" even by fundamentalists, he says. The optimists think the country has great potential if a political solution can be found and the economy privatized. But chances are that Algeria faces a lot more pain first.