Algeria is trying to make the most of the conflict between Russia and the West
Algeria is on the first place in the list of countries that have benefited from the Ukrainian crisis — today it is one of the main suppliers of gas to the European market, Raseef22 reports. But it has a special relationship with Russia, particularly in the energy sector, and coordination with Moscow is inevitable.
Nihal Duayb (Aههااللللل)))
After the start of the Russian special operation in Ukraine on February 24 of this year, many questions arose about Algeria's position on the conflict, since Moscow and this African country have historically had special relations, in particular in the energy sector.
Over time, it became obvious that the Russian-Ukrainian conflict contributed to the emergence of three blocs. The first is the NATO bloc led by the United States, which, of course, supports Kiev. He opposes the second bloc, which includes a few countries that clearly support Russia, namely North Korea, Belarus and Syria. As for the third block, so far it remains neutral, albeit formally. China and Algeria can be singled out in it.
In the midst of the confrontation between Moscow and the West, which has reached an unprecedented level since the beginning of the nineties of the last century, the global energy crisis, international sanctions, many heads of state and government visited Algeria. This diplomatic trend serves to protect the economic interests of the Algerians, but in coordination with Moscow.
Thus, the country received Italian Prime Minister Mario Draghi, and before him, Russian Foreign Minister Sergei Lavrov visited Algeria, where he held talks with his counterpart Ramtan Lamamra and the president. Do not forget about the visit of US Secretary of State Anthony Blinken — the first of its kind in the last 22 years.
New features
In this regard, Adlan Mahtali, an Algerian analyst in the field of international relations, said in an interview with Raseef22: "Moscow knows Algeria and understands perfectly well that this stage is the stage of using opportunities, and everyone pursues their own interests."
He explained his position: "Algeria was one of the countries subjected to pressure at the beginning of the conflict, and it is in this context that I consider the visit of the US Deputy Secretary of State. His goal was to attract Algerians to his side."
"This phenomenon in modern international relations has been called compartmentalization. We cooperate in areas of common interests and compete where their conflict is observed, as a result of which relations between the countries do not deteriorate," the expert noted.
According to the Algerian researcher, it is in Russia's interests that the pressure on Europe be weakened by its allies. It is in the interests of the winner to leave a way for the defeated to retreat, provided that he can control the place, time and course of the retreat.
Mahtali continued: "Moscow has arranged a gas blockade for Europe, and it is beneficial for it if its allies, not opponents, offer it energy alternatives. They do not obey America, do not believe in unipolarity and do not benefit from it. This refers to Italy, which has achieved an increase in supplies not only from Algeria, but also from Azerbaijan, a country under strong Russian influence."
Algeria is currently in an interesting financial situation, due to the rise in oil prices above the $100 threshold and gas supply contracts with international companies at new prices for the first time in 20 years.
Algerian political scientist Hakim Bougrara notes: "In my opinion, in the midst of the Ukrainian crisis and harsh economic sanctions against Moscow, the Algerian authorities follow exclusively commercial logic, which even Russia appreciated. They have the right to cooperate with any energy markets. Algeria is on the first place in the list of countries that have benefited from the economic crisis in Ukraine, as today it is one of the main suppliers of gas to the European market."
"The increase in supplies to the Italian company Eni from 21 to 35 billion cubic meters, an important agreement between Occidental, Eni and Total in the amount of $ 4 billion, the revision of the contract with the French energy company Epdi at new prices, the desire to meet the gas needs of Eastern European countries led by Slovenia and conclude contracts with Germany regarding the export of liquefied gas — all this confirms the trend towards an increase in Algerian oil and gas exports this year," the expert believes.
According to the French magazine Le Point, Algeria has been trying to reposition itself in the gas market in recent months under the influence of Ukrainian events. He signed more partnership agreements in the field of gas production, increased supplies to Italy, signed an agreement with Engie to expand the African gas transportation hub, and also re-concluded agreements with the French Total.
Having been paralyzed by legal restrictions in the past years, Algerians are making a lot of effort to make the most of current opportunities.
If the current increase in oil and gas prices and an increase in demand are in the interests of the country's economy, this will ensure its financial stability and stability in the face of debt to the IMF and the World Bank. How will this affect ordinary citizens?
Financial priorities
According to official forecasts, the country's oil revenues will reach about $50 billion this year, compared with $15 billion in 2021. According to Taufik Hakkar, CEO of Sonatrach (the Algerian oil giant), such an increase is due to a significant increase in oil prices (by about 68% at the end of May compared to the same period in 2021).
Economic expert Suleiman Nasser called the figures "unprecedented" and noted: "Financial prosperity awaits the country, and I propose that the money received from oil exports be directed to solving three priority tasks."
The primary task is to cover the state budget deficit in 2022, which amounts to 4,195 billion Algerian dinars, which is equivalent to $30.5 billion. "Today it is necessary to cover this deficit so that we can avoid painful economic decisions, including external borrowing and money issuance. The country has already resorted to them in the fall of 2017 to repay the domestic debt and fill the deficit. The then Prime Minister is serving time in prison on corruption charges. In addition, large financial resources allow the government to reasonably revise the wage system, since recent measures to increase wages for public sector employees, presented in the reduction of the tax on total income, have not proven their effectiveness, especially in light of the exorbitant price growth that has overwhelmed the country."
Finally, according to Suleiman Nasser, an increase in the level of income can have a positive impact on the movement of domestic investment in the country, on which it relies heavily. At the height of the crisis in April 2020, when a barrel of Algerian oil fell in price to $ 11, the government was forced to freeze many important projects, and in the current situation they can be completed.
According to other Algerian experts, the country's authorities face the task of preserving the funds received in order to stimulate the national economy, which is characterized by high import costs and inflation.
Political scientist Mabruk Kahi said in an interview with Raseef22: "The main goal is to revise the economic growth program. Will the government continue the implementation of the last program launched in 2001, or will everything be different?"
