BOUTEFLIKA CHANGES PRIME MINISTERS, CABINET

C O N F I D E N T I A L SECTION 01 OF 02 ALGIERS 000950

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/25/2016
TAGS: PGOV KDEM AG
SUBJECT: BOUTEFLIKA CHANGES PRIME MINISTERS, CABINET
SHAKEUP TO FOLLOW

REF: A. ALGIERS 935


B. ALGIERS 916

Classified By: Charge d'Affaires Marc Sievers, Reason 1.4 (d)


1. (U) The Algerian press agency announced at 1800 hours
local on May 24 that Prime Minister Ahmed Ouyahia had
submitted his resignation and President Bouteflika had
accepted it. This news was followed five minutes later by a
second announcement that Bouteflika had appointed Minister of
State and National Liberation Front Secretary General
Abdelaziz Belkhadem to replace Ouyahia. Bekhadem stated that
he would announce changes to the cabinet shortly, but as of
the drafting of this message, he has not yet announced which
ministers will be replaced. Belkhadem also informed the
media that his primary focus will be on amending the
constitution (see reftels) and raising the minimum wage for
public sector workers and government employees, both issues
on which Belkhadem had differed sharply with Ouyahia over the
past year.

BELKHADEM NO TECHNOCRAT
--------------


2. (C) Ouyahia's resignation was widely expected, but
Belkhadem's appointment has come as somewhat of a surprise to
Algerian commentators as well as foreign observers, since the
Algiers rumor mill had pointed to Bouteflika's desire for a
technocratic prime minister, such as Water Resources Minister
Sellal, to serve as a neutral caretaker in the run-up to next
year's parliamentary and local council elections. Instead,
the President selected Belkhadem, the head of Algeria's
largest political party and a man known for his strongly
nationalist views and Islamist leanings, in sharp contrast to
the pro-business, pro-Western and staunchly anti-Islamist
Ouyahia. A cartoon on the front page of El Watan, one of
Algeria's leading French-language dailies, May 25 shows a bar
owner rushing to instruct a worker to take down a sign over
the entrance to his establishment reading "The Friends' Bar"
and replace it with a sign reading "The Brothers' Creamery,
Milk and Dates." Some Algerian women contacts have already
expressed alarm that Belkhadem -- whose wife and daughters
are among the rare women family members of the Algerian elite
to wear full facial veils -- will lead Algeria in an Islamist
conservative direction. One columnist May 25 termed
Belkhadem "an Islamist in a suit."

BELKHADEM ENTHUSIASTIC SUPPORTER OF BOUTEFLIKA'S
NATIONAL RECONCILIATION
-------------- ---


3. (C) Differences over Constitutional amendments and public
sector wage increases aside, the main point of divergence
between Belkhadem and Ouyahia is their varying attitudes
toward Bouteflika's National Reconciliation program. As
Prime Minister, Ouyahia had to support the release over 2,000
former terrorists and efforts to convince hundreds of armed
terrorist to turn themselves in, but as a former advocate of
"eradicating" Islamist terrorists, Ouyahia projected a marked
lack of enthusiasm for what Bouteflika clearly sees as his
historic legacy. Belkhadem, on the other hand, was
considered by the military to be a sympathizer with the
Islamic Salvation Front (FIS) before that party was banned,
and he played a prominent role last fall in engaging former
FIS leaders abroad in an effort to gain their support for
National Reconciliation. At least one interpretation of
Bouteflika's decision is that he felt more comfortable with a
Prime Minister whose enthusiastic support for National
Reconciliation he could count on.

HOW SIGNIFICANT A CHANGE?
--------------


4. (C) We will know more about Belkhadem's political
intentions when he announces the changes in the cabinet. The
moderate Islamist Movement for a Society of Peace (MSP) will
almost certainly be a primary beneficiary, since its leader
Aboulguerra Soltani served as Belkhadem's ally in pushing out
Ouyahia, and Soltani and Belkhadem share similar views on
many issues. There is press speculation that Belkhadem may
bring in the harder line Islamist Islah Party and the far
left Labor Party, but including those parties in the
governing coalition could make it impossible for Belkhadem to
govern. Belkhadem will likely need to govern from the center
with an eye to expanding the FLN's base of support for the
2007 elections, and he will be carrying out the broad policy
lines of President Bouteflika, who remains committed to
privatization, WTO accession, cleaning up corruption, and
attracting foreign investment. That said, a
Belkhadem/Soltani government will have a strongly populist

ALGIERS 00000950 002 OF 002


undertone and may slow the already uneven reform process
further.


5. (C) On foreign policy, when Belkhadem was Foreign
Minister from 2000 to 2005, he was at times a difficult
interlocutor, for example defending the Sudanese Government
over Darfur and insisting that the conflict there was little
more than clashes between villagers and nomads. On Iraq, he
has expressed sympathy for Sunni insurgents, though not for
Zarqawi's terrorists, and he has repeatedly insisted that
Algeria will never establish ties to Israel until there is an
independent Palestinian state. There are also persistent
reports that Belkhadem has ties to Iran. Nonetheless,
Belkhadem owes his political survival and current position to
Bouteflika, and he is unlikely to challenge Bouteflika's
foreign policy of developing relations with the United States
while simultaneously expanding Algeria's relations with key
Asian, African and Latin American countries. One telling
example was the several diplomatic exchanges we conducted
with Belkhadem as Foreign Minister in 2003 over our request
for an Article 98 exemption, which Belkhadem resisted
strongly until he was overruled by Bouteflika, at which point
he quietly went along.

WHERE IS THE MILITARY?
--------------


6. (C) Ouyahia was seen as the generals' man, and another
factor in his fall from Bouteflika's good graces may have
been reports that the military was grooming Ouyahia to
succeed the President if Bouteflika's health did not permit
him to serve out his second term. Belkhadem's pro-Islamist
sentiments and his Arab and Islamic foreign policy
orientation have long made him suspect in the eyes of the
generals, and they will be watching carefully as he puts
together his new government. Since Algerian prime ministers
serve at the pleasure of the President, and Bouteflika
retains the confidence of the military as far as we can tell,
the military is unlikely to intervene overtly. Yet the
generals have many ways to make their views known behind the
scenes, and they will be watching Bouteflika's health more
carefully than ever, since their real concern must be that
Belkhadem is positioning himself to succeed Bouteflika either
at the end of his term in 2009, or sooner if the President's
health fails. As for Ouyahia, he may still intend to run for
President in 2009, but at least one source reported that he
was so discouraged by what he considered the shabby way he
had been treated that he intended to withdraw from politics
entirely.

BIOGRAPHIC NOTE
--------------


7. (C) Abdelaziz Belkhadem was born on November 8, 1945 in
the central Algerian province of Laghouat. He received a
high school education and began his government career in 1964
as a financial inspector. He then became a teacher before
becoming deputy director of international relations in the
Presidency from 1972-77, while Houari Boumediene was
president. In 1977 he was elected to the National Popular
Assembly (APN) as an FLN deputy. From 1988-1990, Belkhadem
was Vice President of the APN, then became President of the
APN until it was dissolved by the military in 1992.
Belkhadem was a member of the FLN's political bureau from
1991 to 1997. After Bouteflika was elected President in
1999, Belkhadem became Foreign Minister in 2000, a post he
occupied until last year. Belkhadem led the effort in
2003-2004 to remove Ali Benflis, then Bouteflika's rival,
from his position as head of the FLN. Belkhadem, while still
Foreign Minister, emerged as the head of the rival branch of
the FLN, a position he used to push Benflis aside with the
backing of the courts. Belkhadem was elected Secretary
General of the "reunified" FLN in February 2005. In May
2005, he was replaced as Foreign Minister by Mohammed
Bedjaoui, becoming instead Minister of State and Bouteflika's
Personal Representative. The latter position enabled
Belkhadem to continue to shape Algeria's Arab and Islamic
policies, while leaving relations with the rest of the world
to Foreign Minister Bedjaoui. Belkhadem speaks Arabic and
French, but prefers to use Arabic, much to the consternation
of many Western diplomats in Algiers who are unaccustomed to
doing business in Algeria's national language.
SIEVERS