Algeria & The African Arms Race You've (Probably) Never Heard Of - Surging Budgets & Russian Weapons

Episode Overview

• The podcast details Algeria's massive and largely under-reported military rearmament, which has seen its defense spending, as a percentage of GDP, more than double since 2022.
• It highlights how this surge in spending, funded by hydrocarbon revenues, now surpasses even that of wartime Russia, positioning Algeria as a major regional military power.
• The analysis covers Algeria's acquisition of advanced military hardware from a diverse range of suppliers, including Russia's Su-57 fighters and S-400 systems, as well as German frigates.
• The discussion explores the significant economic risks associated with this "fiscal bet," including its long-term unsustainability, opportunity costs, and vulnerability to fluctuating energy prices.
• The episode frames Algeria's military expansion within the context of its regional rivalry with Morocco, suggesting the buildup could fuel a destabilizing arms race in North Africa.

Key Concepts

• Algeria's defense budget has surged to nearly 9% of its GDP, a level that, by percentage, exceeds that of major powers actively at war.
• This military expansion is funded almost entirely by hydrocarbon revenues, creating a massive fiscal risk and significant opportunity costs for the country's economic diversification.
• Algeria is a priority customer for advanced Russian military hardware, such as the S-400, Iskander missiles, and Su-57, often receiving export versions before the systems enter service in Russia itself.
• Despite its heavy reliance on Russia, Algeria is diversifying its arms suppliers, acquiring high-end technology from Germany, China, Sweden, and South Africa, creating a complex logistical chain.
• The military buildup appears focused on conventional deterrence against regional rivals, primarily Morocco, raising the risk of an escalating and costly arms race in North Africa.
• Algeria maintains a high degree of operational security and secrecy regarding its military capabilities, exemplified by its ability to hide advanced missile systems from public view for years.

Quotes

• At 0:08 - "Historically, or at least recently historically gun-shy Germany, is reportedly expected to dial up defense spending from less than 2% of GDP before the Russian invasion, to 3.5% by 2029." - This quote provides context on Germany's significant policy shift regarding military spending in response to recent geopolitical events.
• At 0:46 - "...the head of a regional arms race you may never have heard of is an African country of roughly 47 million people, in the midst of a buying spree that historically has covered everything from German frigates to Russian ballistic missiles..." - This introduces Algeria as a major, yet often overlooked, player in a regional arms race, highlighting the diversity of its military acquisitions.
• At 1:03 - "[Algeria is set to acquire] Africa's first 5th generation fighters, in the form of the first claimed foreign acquisition of Russia's Sukhoi Su-57 Felon." - This statement emphasizes the advanced and ambitious nature of Algeria's military modernization, positioning it as a technological leader on the continent.
• At 1:23 - "...by those percentages, Algeria is now spending more on defence in peacetime than Russia is during wartime." - This striking comparison underscores the extremity of Algeria's defense budget increase by contrasting it with a major power actively engaged in a large-scale conflict.
• At 24:25 - "An upgraded version of the Pantsir... made it to Algeria before it had entered service in Russia itself." - This quote illustrates Algeria's privileged status as a client for Russian arms, receiving cutting-edge technology promptly.
• At 25:51 - "...the Algerians were able to keep these things out of public view for many, many years." - The speaker notes that Algeria's ability to hide its Iskander ballistic missile systems for years after delivery suggests a high degree of operational security and information control.
• At 27:52 - "They're also believed to have the capability to fire torpedo-tube launched Kalibr cruise missiles, a capability the Algerians have shown off." - This highlights the significant long-range strike capability of Algeria's modern submarines, a potent tool for power projection in the Mediterranean.
• At 32:28 - "Algeria also has an air refueling capability to support its fighters... Algeria is actually better equipped in that regard than some of the more major European militaries." - This emphasizes that Algeria has invested in key force multipliers like aerial tankers, giving its large fighter fleet extended range and endurance.
• At 52:19 - "This is a major fiscal bet that can't be sustained in the absence of a major change..." - The speaker explains that Algeria's projected budget deficits of over $40 billion to fund its military expansion are economically unsustainable without continued high energy prices or significant economic reforms.
• At 57:04 - "If Algeria kicks off some very ambitious procurements and then has to chop them back halfway, they run the risk of falling into the same problem." - The speaker warns that if economic conditions change, Algeria could be left with a partially modernized, inefficient, and expensive-to-maintain military.

Takeaways

• Relying on volatile commodity exports to fund national security is a high-risk strategy that makes long-term military modernization projects vulnerable to global market shocks.
• A nation's operational secrecy can obscure its true military capabilities, meaning public inventories may not provide a complete picture of its strength.
• Massive military spending comes at a significant opportunity cost, diverting funds that could otherwise be used for economic diversification and addressing domestic social issues.
• A major military buildup by one nation will almost inevitably provoke a reaction from its rivals, potentially triggering a destabilizing and costly regional arms race.
• Investing in force multipliers like aerial refueling and advanced support systems is just as crucial as acquiring high-profile fighter jets or missiles for building a credible military force.
• If ambitious military procurement plans are not backed by a sustainable economic model, a nation risks being left with a partially upgraded but logistically fractured and inefficient force.