From Afrol News, Dec. 11:

An Algiers bomb attack against oil workers that killed an Algerian driver and wounded nine people, including several Western citizens, has raised fears that Algeria's trend towards peace and stability may end. As the US Embassy in Algeria today advises Americans to review their personal security, foreign oil companies already have decided to invest into protection against terrorist attacks.

The bomb attack against foreign oil workers in Algeria has been attributed to Islamist terrorists. The terrorist group Salafist Group for Preaching and Combat (GSPC), which claims to have links to al Qaeda, this evening took responsibility for the bombing, but Algerian police sources expressed doubt to whether the desert-based fringe group would have the capacity to exercise such an attack in the capital.

There was however no doubt that the attack on foreign workers came as a set-back to Algerian authorities, which have started attracting foreign investors by reforming the economy and addressing security. Algeria has experienced more than a decade of political violence following an election win by the Islamists in 1992, which was stopped by an army take-over.

Only during the last few years, political violence has become an exception, confined to a few areas where the government is not in full control. Security has reached such levels that even tourists have started returning to the Algerian pearls in the Sahara desert and along the Mediterranean coast. Foreign businessmen equally are massively streaming to Algiers and oil installations in the hinterland.

The authoritarian government of President Abdelaziz Bouteflika has not only invested into security and peace initiatives - which have left all Islamist groups except the GSPC to lay down their weapons - but also in economic reform. Algeria is rapidly turning its formerly Soviet-style planned economy into a liberal market economy, totally open to foreign investments. In particular the oil and gas sector has profited from this, providing Algeria with such large revenues that foreign debts are in the process of being totally paid down.

Algerian authorities therefore see the bomb attack as a very inconvenient reminder of the country's politically violent history in times when investors flock to Algiers. The bomb killed the Algerian driver of a bus that transported mostly foreign oil workers employed in a joint venture between the Algerian state oil company Sonatrach and the US company Halliburton - which is connected to hardliners in the Bush administration and war-profiteering in Iraq.

The attack was said to have wounded nine persons, including four Britons and one American. The foreign workers are employed at the Haliburton-Sonatrach joint venture Brown Root Condor, which carries out work on energy installations outside Algiers. The incident occurred in the upper-class Bouchaoui suburb of the capital with a high security profile and close to the Algiers Sheraton Hotel.

Brown Root Condor has already stated it will tighten security for its workers. Other companies involved in the Algerian energy sector have indicated they may also return to higher security levels to avoid terrorist attacks against their staff. For companies planning to invest in Algeria, this could be seen as an extra burden.

Also the reaction from the US Embassy in Algiers is a bad signal for foreign investors and investment-keen Algerian authorities. The embassy issued a statement "encouraging Americans in Algiers to review their security situation," adding that Washington was evaluating the security advises given expatriates in Algeria. The US State Department's travel advices already discourage Americans from travelling to the country.

See our last post on Algeria.