INTERNATIONAL RELATIONS: During Mr Bouteflika's presidency, Algeria has become an important ally of the West in the campaign against Islamist militancy. Concerns about the security of gas supplies from Russia have emphasised Algeria's strategic importance as the source of some 25% of EU gas imports. However, recently introduced policies have significantly worsened the environment for foreign businesses and investors. Relations with France will continue to be strained by underlying Algerian resentment about French actions during the colonial era and French attitudes after independence. A French inquiry into the murder of seven French monks in Algeria in 1996 has stirred up ill-feeling, and a planned state visit to France by Mr Bouteflika has been repeatedly postponed. The outlook for US relations is better as it is based on Algeria's experience of dealing with militant Islamism and on the threat of armed Islamist activity in the Sahara region. With the persistent threat of Islamist terrorism, the West is unlikely to exert significant pressure on the Algerian government to push forward with political reform during the forecast period.

Source: Algeria: Country outlook

Source: Country Forecast Algeria May 2009

Source: EIU Country Data