At the heart of rising diplomatic tensions between Algeria and the UAE, disputes are no longer confined to political statements—they now strike the most sensitive domain: the economy. With Emirati investments estimated at nearly ten billion dollars, the idea of an economic break represents a very high cost, not only financially but also in terms of economic sovereignty and investment stability.
These investments span strategic sectors that directly impact the core of the national economy: ports and logistics, military industry, tobacco, real estate, and tourism. They are not mere commercial projects but vital infrastructure controlling the flow of goods and a significant part of the country’s industrial and military security.
In the port sector, DP World plays a central role, managing Algiers port, the country’s main commercial artery, as well as Djendjen port in Jijel, a strategic gateway to the Mediterranean. This presence has given the Emirati partner significant influence over container traffic and logistics revenues, prompting heightened caution from Algerian authorities citing “economic national security” and the need to regain control of key facilities.
In defense, the picture is even more complex. A broad partnership between the Algerian Ministry of Defense and EDGE has been established, including the production of armored and military vehicles. In Khenchela, a factory produces “Nimr” armored vehicles, while the “Fuchs 2” project in Constantine, funded by Emirati funds and using technology from Rheinmetall, aims to produce nearly 980 vehicles for the People’s National Army. These projects are not symbolic; they form the backbone of Algeria’s recent military manufacturing.
In the tobacco sector, historically highly profitable, Emirati investments face unprecedented legal pressures. Investigations into contract structures and ownership stakes suggest a possible return of the sector under national control, a move as much political as economic.
Despite these tensions, energy coordination within the OPEC+ framework continues, highlighting a stark contrast: strategic cooperation in oil versus disputes in other economic sectors. This reveals that the crisis is not a total break but a selective repositioning governed by power balances and interests.
The situation becomes more complicated with Algeria’s past losses in international arbitration, totaling hundreds of millions of dollars, making any attempt at unilateral nationalization extremely risky. Entering new legal battles could further strain a budget already heavily dependent on energy revenues.
Even air transport and trade reflect this imbalance. The UAE exports over a billion dollars of goods to Algeria annually, while Algerian exports remain marginal. Algeria’s recent move to cancel the air transport agreement may trigger a new crisis, worsening the country’s economic isolation.
In conclusion, the real question is not merely whether Algeria can politically reduce Emirati influence but whether it can economically bear the cost. Ten billion dollars in investments concentrated in strategic sectors cannot be dismantled without major consequences, from direct losses to eroding foreign investor confidence.
Thus, the diplomatic dispute becomes a severe test for Algeria’s economic policy: between rhetoric of sovereignty and desire for independence, and the reality of a fragile economy dependent on essential foreign partnerships.
