On August 24, Algeria cut diplomatic ties with Morocco citing “hostile actions.” Algeria’s foreign minister, Ramtane Lamamra, charged that Morocco had spied on Algerian leaders through Pegasus spyware and backed the separatist Movement for the Self-Determination of Kabylia, which supports independence for the Kabylia region in Algeria. The Algerian government claims that Morocco supports “terrorist groups” that started deadly wildfires in the country, without offering evidence. These accusations came after several jabs between the diplomatic corps of both countries, each claiming the other country supports separatists and terrorist groups. While there has been some troop movement along the Morocco-Algeria border, it is highly unlikely that the two regional powerhouses would risk direct confrontation. But accidents can happen when tensions are running high.

Tensions between Morocco and Algeria rose in 2020 when fighting reerupted in the disputed Western Sahara region, which Morocco claims sovereignty over and where Algeria supports the Polisario independence movement. This friction intensified when Morocco announced an agreement to normalize relations with Israel, and former President Donald J. Trump announced the United States’ formal recognition of Moroccan sovereignty over Western Sahara.

The Morocco-Algeria rupture hurts Europe-Africa connectivity and regional economic cooperation in the Mediterranean. It could also lead to greater levels of regional instability. Gulf interests in the Maghreb are shaped primarily by a desire for political influence, stability, security, investment, and greater connectivity with European and African markets. More broadly, North African countries are a key economic gateway to strategic markets as well as a site of great power and regional competition for political and economic influence.

Morocco-Algeria Tensions and Weak Regional Cooperation

Morocco-Algeria tensions primarily stem from a weak and distrustful bilateral relationship and regional competition, but they can be intensified by wider conflict and competition dynamics in the region. The two countries espouse contrasting foreign policies regarding regional questions. For example, Morocco’s decision to follow the United Arab Emirates and Bahrain and agree to normalize relations with Israel in 2020 was wholeheartedly denounced by Algeria, a long-time advocate for the Palestinian cause. Algeria is fiercely anti-interventionist, a legacy from its traumatic experience with French colonialism and the war for independence, while Morocco prides itself on higher levels of foreign investment, tourism, and openness to the West. Algeria has immense oil and gas wealth, while Morocco has needed to pursue intensive economic diversification initiatives to maintain even moderate growth levels. Both countries rank high on military power rankings in Africa, but Algeria’s defense budget is twice that of Morocco’s and is ranked as the second-largest military power in Africa, after Egypt.

This severing of ties is not terribly surprising given Morocco and Algeria’s long history of tension, but this is a new low in already limited bilateral relations. The two North African neighbors have a long history of rivalry going back decades over border disputes, different foreign policies and priorities, and battles over regional primacy. After both countries gained independence from the French, they fought a war over land disputes in 1963, known as the Sand War, and were in conflict over the Western Sahara region until the new Algerian President Chadli Bendjedid began a process of reconciliation with Morocco that led to the reestablishment of diplomatic relations in 1988. In 1989, the Arab Maghreb Union was formed among Morocco, Algeria, Tunisia, Mauritania, and Libya, which aimed to further regional cooperation. The United Nations officially brokered a cease-fire that ended fighting over Western Sahara in 1991. This was supposed to be followed by a referendum for self-determination in the disputed region that has yet to take place. Hence, political talks and simmering tensions are ongoing. While these points of friction and distrust have remained entrenched, diplomatic relations have remained intact between the two countries since they were reestablished in 1988. The land borders between Morocco and Algeria have been closed since 1994 after French-born Algerians organized terrorist attacks in Morocco. Algeria was deep in the midst of a war between an extremist Islamist insurgency and the Algerian army throughout the 1990s, and Morocco was concerned about the spillover effects of this violence.

One of the many consequences of the Morocco-Algeria rupture in August is the impact it has had on intra-Maghreb cooperation, Europe-Africa connectivity, and economic cooperation in the Mediterranean. The Maghreb region is already characterized by extremely low levels of economic integration and regional trade: Most of Morocco, Algeria, and Tunisia’s economic partners are European countries, the United States, and China, rather than each other. However, there are rare examples of regional cooperation under threat. For example, Algeria is an oil and gas giant, supplying much of Europe’s natural gas through the Maghreb-Europe pipeline that connects Algeria and Spain and runs through Morocco, which receives some of the gas exports as well. The Algerian energy minister has suggested Algeria could cut off gas supplies to Morocco. Moroccan analyst Intissar Fakir argued that the agreement over the Maghreb-Europe pipeline “has weathered previous diplomatic crises. However, this time, its future is more uncertain.” This could signal greater market instability ahead and dissuade foreign investors in the region looking to profit from greater regional economic integration and connectivity to Europe and Africa.

Morocco-Gulf Ties

Morocco has much stronger ties to the Gulf Arab states than Algeria. In 2011, the Gulf Cooperation Council even reportedly invited Morocco and Jordan to apply for membership, in an attempt to rally behind Sunni monarchs across the region facing mass popular protest. Morocco’s economic and diplomatic relations with the UAE have especially grown since 2011. The UAE is the leading Gulf investor in Morocco and second-highest source of foreign direct investment after France. The deepening Morocco-UAE relationship likely helped convince Morocco’s king to follow the Emirati lead and join the agreement to normalize relations with Israel in late 2020. Prior to this, Morocco demonstrated its commitment to Gulf partners at various critical moments. The kingdom participated in the Saudi-led military coalition in Yemen (though it eventually left) and broke off relations with Iran in 2018 to align itself more closely with the Trump administration and key Gulf allies.

Prior to Morocco’s agreement with Israel, the UAE and Bahrain also declared their intention to open consulates in the disputed Western Sahara territory, in a diplomatic show of support for Moroccan sovereignty over the region. Interestingly, however, Morocco, as well as Algeria and Tunisia, remained officially neutral and did not follow suit when Saudi Arabia, the UAE, Bahrain, and Egypt began a boycott of Qatar in 2017. Morocco, along with Iran and Turkey, sent food shipments to Qatar to help mitigate the immediate food shortages stemming from the blockade. Nonetheless, Morocco’s move to normalize relations with Israel helped shore up its relationship with Gulf states, specifically the UAE and Bahrain.

Algeria-Gulf Ties

While Algeria is more isolationist than its neighbor to the West, that does not mean Algeria has not been a significant regional player. Algeria is, as noted, very rich in oil and gas and a member of OPEC. It has a long history of supporting regional mediation efforts, most recently in Libya, and taking leadership roles in regional organizations like the African Union. The country fiercely rejects foreign influence in its own domestic politics as well as in other countries’ affairs. This has often put Algeria at odds with Gulf actors. For example, Algeria has resisted Gulf support for military operations in the Sahel region, notably the French-led G-5 Sahel Joint Task Force. Algeria rejected the Saudi-Qatari push to remove Syria from the Arab League and has maintained relations with Damascus throughout the conflict in Syria. Algeria also pushed back strongly against the Saudi-led military intervention in Yemen. Algeria is one of the few countries that officially recognizes the Houthis. And Algeria has historically supported Iran’s right to develop nuclear technology. Algeria-Iran ties are growing and officials on both sides have expressed a desire for a deeper bilateral relationship after a rocky history. Algeria severed ties with the Islamic Republic in 1993, accusing it of supporting the Islamic Salvation Front in Algeria’s civil conflict. The two countries reestablished ties in 2000, and economic, diplomatic, and notably military and defense cooperation has improved since.

Algeria has been especially critical of Gulf intervention in Libya, including the support of some Gulf states for the 2011 NATO campaign and subsequent overthrow of long-time Libyan dictator Muammar al-Qaddafi, and thereafter, the financial and often times direct military support for various factions in the Libyan conflict. Maghreb expert Haim Malik argued that Algeria was especially hostile to early Qatari support for anti-Qaddafi rebels and some Islamist-affiliated political actors later on, as well as the UAE’s support for the eastern-based General Khalifa Hifter, who led an invasion of Tripoli to overthrow the U.N.-recognized Government of National Accord in April 2019. The high level of foreign and Gulf intervention in the affairs of their neighbor has provoked fears among the Algerian leadership of greater regional instability. Early and unheeded Algerian warnings about the dangerous political vacuum that would develop in Libya if Qaddafi were forcibly removed proved prescient.

Algeria-Gulf economic ties are minimal compared to those of Morocco and Tunisia, but as Algeria looks to embark on economic diversification efforts and the development of nonhydrocarbon markets, it is seeking to attract greater foreign investment. Algeria’s top investors are China, Singapore, Spain, and Turkey. Nonetheless, Gulf states still jockey for influence in Algeria due to its vast resource wealth, strategic location in the southern Mediterranean, and access to African and European markets. Just after Abdelmadjid Tebboune was elected in December 2019, the new president hosted foreign ministers from Saudi Arabia and the UAE. Soon after, Qatar’s emir visited Algiers in February 2020, which was swiftly followed by invitations for the Algerian president to visit Riyadh and Abu Dhabi.

Beyond this, the UAE’s DP World operates ports in Algeria, while Qatar has two major investments in the country – the Qatari telecommunications provider Ooredoo operates there and Qatar funds a 4.2 million ton per year steel complex in the eastern Jijel province. In 2016, Saudi Arabia promised $10 billion worth of new investment in Algeria. During Saudi Crown Prince Mohammed bin Salman’s visit to Algeria in 2018, the two countries agreed to a set of investment projects to begin in 2019, including a pharmaceutical industry project valued at $10 million, a paper plant worth $20 million, and a juice production project, but these projects seem to have stalled as Algeria became engulfed in a mass protest movement in early 2019, and long-time President Abdelaziz Bouteflika was forced to resign. The political and economic paralysis in Algeria has limited the ability for major investment projects to be realized. Algeria does maintain business councils with Gulf states, including Saudi Arabia, Qatar, and the UAE, to promote bilateral commerce and investments. Groups like the Algeria-Saudi Investment Company financed around $22 million toward building malls, hotels, supermarkets, and manufacturing centers between 2008 and 2017.

But Algeria’s investment climate remains extremely limited in its ability to both attract and successfully implement investment projects, even though the country has attempted to open the investment climate through eliminating rules that required majority Algerian ownership in new businesses. Issues like complicated customs procedures, heavy regulation and bureaucracy, and unclear laws scare off many investors or delay the launching of major projects. In 2020, the World Bank’s Doing Business Report ranked Algeria 157 out of 190 in terms of ease of doing business, as compared to Morocco’s ranking of 53.

Regional and Great Power Competition in North Africa

North African countries are a key gateway for Europe-Africa trade and connectivity as well as a site of great power and regional competition. Much has been written on Libya’s position as a proxy battle among regional powers and a strategic locale for eastern Mediterranean rivalries, but regional competition also manifests, albeit to a much lesser extent, in Morocco, Algeria, and Tunisia. Coupled with political battles for influence, many countries are attempting to take advantage of the southern Mediterranean as an entry point to European and African markets. Michel Tanchum emphasized, “The scramble to establish Africa-to-Europe commercial corridors has given rise to a new global engagement with North Africa that is reshaping the basic economic architecture and the geopolitics of the region. With China, Russia, Turkey, and the Arab Gulf states playing increasingly significant roles in the development of these corridors in the southern Mediterranean, the European Union system confronts a pressing strategic challenge to form a coherent and effective policy in North Africa.”

As Tanchum highlights, greater numbers of global and regional actors are targeting this area and seeking to challenge traditional European dominance there. Morocco and Algeria are increasingly important Chinese partners, representing strategic locations in the Belt and Road Initiative thanks to their critical port infrastructure and connection to both European and African markets. Algeria is a huge purchaser of Russian arms and has a historical partnership with the former Soviet Union. Gulf states like the UAE and Qatar are looking to take advantage of critical infrastructure and cultivate greater economic influence in the Mediterranean through investments and ports. Turkey is also cultivating better economic and security ties in central North Africa – notably with Algeria and Tunisia – to perhaps complement Turkey’s greater security footprint in Libya.

North Africa holds special significance as well for its history of protest, often perceived as threatening to Gulf actors that prioritize stability across the Middle East and North Africa. Gulf states used a variety of soft and hard powers tools to try and exert influence across North Africa in the aftermath of the 2011 Arab Spring protests, particularly in Libya and Tunisia and to a lesser extent Morocco. Algeria was probably the least impacted by these proxy battles given its fierce rejection of foreign interference and oil and gas wealth. Gulf investment is significant in Morocco and Tunisia but much less so in Algeria. This is starting to change, however, as Algeria pursues greater investment outside of the hydrocarbon sector.

Risk of Southern Mediterranean Instability?

Saudi Arabia, the UAE, and Qatar all expressed regret over the rupture of diplomatic relations between Morocco and Algeria, expressing support for regional dialogue and cooperation. Given that the decision was Algeria’s, a country that is historically hostile to foreign interference and where Gulf influence is among the lowest in North Africa, suggests that Gulf states will not be able to play much of a role in influencing these dynamics. However, Gulf actors will be paying close attention to the dispute to make sure it does not transition to more direct conflict. This could further jeopardize regional stability and the increasingly strategic Europe-Mediterranean-Africa market linkages that are valuable to global powers like Europe and China as well as regional actors like the Gulf states and Turkey.