Algeria has been a case study in how not to deal with Islamist activism. Its experience dwarfs that of its neighbours in both scale of violence -- over 100,000 deaths since 1991 -- and number of Islamic organisations disputing the religious, political and military fields. This proliferation owes much to the authorities who, in contrast to their regional counterparts, displayed a consistently precipitate and reckless attitude toward major policy decisions in the critical 1989-1992 period and have failed to eliminate all the armed movements that have emerged since. But there is now an opportunity to turn this tragic page. Seizing it requires a skilful blend of political, security, legal and diplomatic measures to eliminate remaining armed groups. But Algeria's political class also must recast debate around a new agenda of practical reform. Europe needs to help more, and the U.S. to be more sophisticated in its handling of an over-played al-Qaeda factor.

The development of Islamic activism in Algeria in the 1980s initially resembled that elsewhere in North Africa and, as in 1970s Egypt, the authorities both actively helped to bring it into existence and sought to use it for their own purposes. But its phenomenal political expansion in the early 1990s had no regional equal and surprised most observers. An important reason why it acquired a mass base was the alienation of many young Algerians from a state which seemed no longer to offer them prospects. But the main political factor was the way in which Algerian Islamism, through an initially legal party, the Islamic Salvation Front (Front Islamique du Salut, FIS), mobilised and monopolised Algeria's populist tradition in 1989-1991, in part by posturing as heir to the historic National Liberation Front (Front de Libération Nationale, FLN) that fought the independence war. Similarly, the scale of the insurgency that developed after the interruption of the electoral process in 1992 owed much to the tradition of guerrilla war in the revolution, which gave birth to the state. Other crucial factors were the authorities' decisions to ban the FIS and arrest thousands of its activists, thus placing ordinary members of what had been a legal party outside the law and driving them into the arms of jihadi groups that might otherwise have remained marginal.

Since 1992, the regime has sought to curb FIS influence by allowing Islamist organisations to proliferate. Legal parties reflecting more cautious tendencies in Algerian Islamism have drawn some ex-FIS support into constitutional channels, enabling the regime to re-establish control over the political sphere. Encouraging proliferation of movements so as to divide and rule has had a far more deleterious side, however. A central feature of army counter-insurgency strategy has been to sow dissension within the rebellion. This has scotched the threat to the state but the resulting fragmentation of the rebellion into a plethora of armed movements has made it very difficult to eradicate militarily and equally difficult to end by political means.

Although violence has been much reduced, continued activity of several armed movements is not only a security problem and a constraint on political life, but also a factor facilitating expansion of al-Qaeda's jihad. This has two distinct but connected aspects. The armed movements offer al-Qaeda points of entry into Algeria and thus the Maghreb and North-West Africa (including Sahel countries), while providing a home-grown reference and model for disaffected elements of the Algerian diaspora attracted to jihadi activism. Meanwhile, the continuing insurgency means Algeria's crisis is not wholly over, as does failure to resolve fundamental constitutional questions -- the armed forces' political role, presidential prerogatives, judicial independence and, more generally, the problem of establishing law-bound government.

While these persistent difficulties may suggest little real change over the last decade, Algerian Islamists have revised their outlook and discourse in important respects. Islamic political activism has abandoned its brief but intense flirtation with revolution and reverted to essentially reformist strategies. The Islamist parties now accept the nation-state and have either tacitly abandoned the ideal of an Islamic state or reconciled it with democratic principles. They no longer advocate fundamentalist positions on Islamic law and have begun to accept equality of the sexes, including women's right to work outside the home and participate in public life. These changes represent a partial recovery of the outlook of the "Islamic modernism" movement of the late nineteenth and early twentieth centuries. True fundamentalism -- hostile to democracy and the national idea, resistant to innovative thinking, conservative on the status of women -- is today confined to the Salafiyya current from which Islamist parties now explicitly dissociate themselves.

The armed rebellion is now reduced to the Salafiyya's jihadi wing. Its initial scale owed much to the involvement of a variety of ideological currents, including movements derived from or at least partly inspired by Algeria's nationalist and populist traditions. But today only groups derived from the Salafi current remain active and they have no representation in the party-political sphere. As the armed movements' political and social bases have contracted, their connections with local "mafias" involved in illicit economic activities, notably smuggling, have become more pronounced. Links to al-Qaeda underline the narrowness of their domestic constituency and reliance on external sources of legitimation.

Abandonment of fundamentalism by mainstream Islamist parties means the two oppositions that structured party-politics in the early 1990s, polarising and paralysing debate -- Islamism versus secularism and Islamism versus the nation-state -- have been largely overcome. Inclusive, constructive debate on reform between the main political tendencies -- including Islamists -- should now be possible.

With the improved security situation, the army has begun to acknowledge it should withdraw from its dominant political position and allow the civilian wing of the regime more latitude, a welcome but still tentative development. A danger is that al-Qaeda's reported links to remaining armed movements will be used in the context of support for the "war against terrorism" as a pretext for slowing or reversing this trend. While some military action remains necessary, the government should be urged to use other policy instruments to make an end to armed groups. Besides police measures (including more cooperation with regional and Mediterranean partners), vigorous steps should be taken to re-establish state regulation of commerce so as to reduce smuggling that provides much of the armed movements' life-blood.

The government should not have to rely on U.S. support alone in this; in view of the terrorist threat to Europe, the EU and member states should make assistance a priority. Participation of diaspora Algerians in terrorist networks in Europe has been very noticeable. While circumstances specific to diaspora life may be the main factor, an end to armed movements inside Algeria and normalisation of its political and economic life would have a salutary effect on the outlook of diaspora Algerians and weaken the impulse to jihadi activism.

Cairo/Brussels, 30 July 2004