The Obama Administration has tried to balance a bilateral relationship that is highly focused on counterterrorism and on Algeria's oil and gas sector with measured encouragement of greater political and economic openness. This balance has taken on added significance amid unrest and political transitions in neighboring states, during which Algeria's political structure has remained largely unchanged. Broadly, Algeria has the financial and human resources to support its claims to regional leadership. U.S. concerns with security threats in the region surrounding Algeria have heightened since 2011 as violent extremist groups such as Al Qaeda in the Islamic Maghreb (AQIM)—an Algerian-led network and U.S.-designated Foreign Terrorist Organization (FTO)—have exploited regional political instability and gaps in state capacity to expand their activities and influence. In January 2013, an AQIM splinter-faction carried out a mass hostage-seizure in southeast Algeria in which three Americans were killed. While economic and political grievances have driven some domestic unrest, popular enthusiasm for dramatic political change appears limited. Politics

President Abdelaziz Bouteflika's reelection to a fourth five-year term in April 2014 underscored Algeria's political continuity, while focusing attention on succession issues. Algeria's political system is dominated by a strong presidency and security apparatus. Algeria's factionalized and opaque decision-making process often appears to inhibit a clear trajectory on political and economic reforms, as well as a more proactive Algerian foreign policy. Algerians refer to Le Pouvoir (the powers-that-be) to designate opaque political and military elite networks that are broadly thought to control major policy decisions. Regional Counterterrorism Efforts

As a regional economic and military power, Algeria has sought to lead a response to terrorist threats in coordination with the poorer Sahel states of West Africa. A desire to deter direct Western military intervention has often appeared to be a primary motivation for Algeria's regional cooperation efforts, although France has nevertheless recently established an enduring regional counterterrorism presence in the Sahel. These laws—along with red tape, corruption concerns, and security threats—have reportedly dampened foreign investor interest. Bouteflika has also pursued closer relations with the United States, France, and the European Union. Algeria's leaders criticized NATO's intervention in Libya and have urged a non-interventionist approach to the conflict in Syria. Relations with Morocco are strained over the issue of Western Sahara and due to a rivalry for regional power. The Western Sahara is a disputed territory claimed and largely administered by Morocco; Algeria hosts and supports the independence-seeking Popular Front for the Liberation of Saqiat al Hamra and Rio de Oro (Polisario) and its self-declared government-in-exile, the Sahrawi Arab Democratic Republic. U.S. leverage may be further reduced by Algeria's often opaque decision-making, frequent preoccupation with internal affairs, ties to non-Western strategic players such as Russia, and storied reputation for resistance to outside pressure. U.S. military leaders, while pointing to the importance of bilateral cooperation, have also regularly emphasized that the United States does not seek to impose its views or install a military footprint in the region, in apparent recognition of Algerian sensitivities. The role and influence of Algerian Islamist political parties and movements may also be of interest in the context of regional developments.
U.S.-Algeria ties are highly focused on counterterrorism cooperation and U.S. interest in Algeria's oil and gas production. The Obama Administration has indicated a desire to deepen and broaden bilateral relations, including security assistance, while periodically urging greater political and economic openness. While both governments express appreciation for bilateral cooperation, U.S. officials may lack well-developed levers of influence in Algiers due to Algeria's economic self-reliance and ties to non-Western strategic players such as Russia, along with Algerian leaders' storied reputation for resistance to outside pressure. Congress appropriates and oversees small amounts of foreign aid and reviews notifications of occasional arms sales.
Algeria's political system, which is dominated by a strong presidency and security apparatus, has remained stable amid ongoing regional upheaval. President Abdelaziz Bouteflika was first elected in 1999 amid the waning of Algeria's decade-long counterinsurgency against armed Islamist groups. His reelection to a fourth five-year term in April 2014, despite his evident ill health, has focused popular attention on succession issues. Bouteflika has initiated a process aimed at revising Algeria's constitution, but reforms proposed to date appear unlikely to substantially affect the political system. Algerians use the term Le Pouvoir (the powers-that-be) to refer to the opaque elite political and military networks that are widely viewed as driving policy decisions.
Strong global prices for Algeria's energy resources have allowed the country to amass large foreign reserves as a buffer against economic instability, despite declining export volumes in recent years. However, bureaucratic red tape, corruption concerns, and stringent restrictions on foreign investment have inhibited growth and job creation. Localized public unrest over political and economic grievances periodically occurs, and ethnic violence has recently afflicted parts of the country. Yet public enthusiasm for dramatic political change appears limited, potentially due to factors such as the memory of violence during the 1990s and more recent examples of turmoil in Libya, Syria, and elsewhere.
A terrorist attack at a natural gas compound in southeastern Algeria in January 2013, in which three Americans were killed, highlighted the challenges the United States faces in advancing and protecting its interests in an increasingly volatile region. The group that claimed responsibility is a breakaway faction of Al Qaeda in the Islamic Maghreb (AQIM), a regional network with Algerian roots and leadership. Given its large military, available financial resources, and desire to avert direct Western military intervention in neighboring states, Algeria has periodically sought to lead a regional response to security threats. Yet Algeria's complex and sometimes distrustful relations with neighboring states may hinder cooperation. Meanwhile, U.S. unilateral action in response to security threats may present significant risks and opportunity costs.
Algeria's foreign policy has often conflicted with that of the United States. Strained relations with neighboring Morocco continue, due to the unresolved status of the disputed territory of Western Sahara and a rivalry for regional influence. Morocco claims Western Sahara; Algeria supports and hosts a long-running independence movement. The legacy of Algeria's anti-colonial struggle contributes to its leaders' stance on the Western Sahara, their emphasis on sovereignty as a principle of foreign relations, and their frequent skepticism of Western and NATO intentions. The strategic importance of Algeria's natural gas exports to Europe may increase amid efforts to reduce reliance on supplies from Russia. See also CRS Report RS20962, Western Sahara.