ALGERIA - DRAMATIC POLITICAL-CHANGE

Dramatic political changes have taken place in Algeria with the rise in popularity of the Islamic Salvation Front (FIS). Although the ruling party for 30 years, the National Liberation Front, quashed the result of the elections held in January 1992, the spectre of an Islamic takeover cannot be ruled out. An Islamic takeover would undoubtedly result in the withholding of vitally needed foreign investment in oil and gas development. The new economic reforms, announced by the present government, coupled with the debt rescheduling agreements, require a significant increase in Algeria's oil and gas revenue. Given generous economic aid and a major drive towards reform the outlook for Algeria is promising. If not, the likelihood of Islamic rule becomes greater - implying economic collapse. The repercussions of such an outcome would be felt throughout the European Community.