TEXT-Algeria's Bouteflika: Terrorism in disarray

March 12 (Reuters) - Following are excerpts from exclusive comments to Reuters by Algerian President Abdelaziz Bouteflika.

Q - Algeria has become a place that's visited and respected. Will the latest al Qaeda attacks undermine the diplomatic work done over the past dozen years?

A - Algeria has gone through the tragic ordeals of a blind and brutal terrorism during the 1990s. She emerged victorious and reinforced. She has gradually rediscovered, since 1999, her rightful place in the concert of Nations.

The latest attacks in Algeria were merely the manifestation of the disarray and despair of a terrorism that tries still to prove its presence and harmfulness.

Q - What needs to be done to remove al Qaeda from Algeria?

A. The policy of national reconciliation, approved by our people, has contributed to the restoration of peace and security throughout the territory of our republic. Despite that, as with all other countries, Algeria cannot claim absolute security. We must, with the legal means of the state, struggle still against this organised crime whatever the denomination under which it can be named.

Q - Are the charges against the Algerian state in the 1990s, such as torture and the "who kills who" controversy, themes that are in the past? Some observers have seen in the U.N. probe into the Algiers bombings a remake of the 1990s.

A - The independent investigating commission decided by the U.N. has as a mission to examine the question of the security of this organisation's personnel throughout the world and to advance the necessary recommendations. It is also our goal to improve the security of our citizens and all foreign residents on our territory. The decision was taken by the U.N. when it noticed that its representatives had become targets for terrorism in many countries of the world and in no way compromises the implacable struggle that Algeria is waging against terrorism.

The "who kills who" came into play at a moment when this struggle was not well known abroad and when certain people wanted to shroud in confusion the responsibility -- nonetheless obvious -- for the wrongdoings of terrorism.

The same goes for information about torture. Were it to manifest itself in our country as elsewhere in the world, there is no doubt it would be the target of the most severe measures on our part; we would identify the culprits who would be punished in the appropriate way.

Q - People talk a lot about the third term - parties of the coalition as well as other groups want you to stand in the next election. What do you feel about that?

A - For the moment, it's a question for me of correctly completing my second term in the hope of fulfilling all the goals that I targeted which were the point of my election campaign.

That groups or political parties already take an interest in the next presidential polls, I see only as a sign of the interest our people and the political class have in the political life and the future of our country. It's a proof of maturity which I can only welcome.

Q - Does normalisation of Algerian political life necessarily depend on a resumption by the presidency of political decision-making which in the 1990s was transferred to the military?

A - I don't accept your term "normalisation" of Algerian political life because it leads one to suppose that we are in an abnormal situation, even though our "norm" is fixed by our own constitution and not through a comparison with the policies of this or that other country.

The army, it is true, has played an important role in the life of our country while respecting the framework laid out for it by the constitution. This role declines in importance as the country's political institutions reinforce and grow in effectiveness to fully assume their responsibilities.

The army is thus called upon to become a professional army, as it has already begun to do, in line with the orientations of our policies.

Q - Is it true, as some commentators say, that you have opened the cultural field to Islamists while closing down political activity in your time in office?

A - I do not know what these observations are based on given that our efforts to encourage all cultural activities are clear and that political activity is developing ceaselessly, firstly through the political parties and secondly through the organisation of elections at all levels.

Q - Do you agree with the statement that, while terrorism is defeated, its ideological base namely fundamentalism is intact?

A - Yes, you are right to say that terrorism has been vanquished, despite the sporadic manifestations we are facing up to in the most energetic manner. The Algerian population is deeply attached to Islam. The fundamentalism that gave life to terrorism is shared only by the terrorists themselves. It is not an ideology shared by the vast majority, the overwhelming majority of our population that continues to reject it as heresy.

Q - Don't you think the informal economy is a real danger to the country's stability, especially as, according to some, it is controlled by Islamists?

A - Wherever it exists and whoever the culprit, the informal economy is a danger that threatens economic expansion, notably through unfair trade, the decline in production, the loss of tax income, as well as the risks for public health and security.

These are phenomena that we find everywhere in varied degrees, including in developed countries. In Algeria this phenomenon exists of course but not to a level that represents a danger for the stability of the country.

Q - Do you have new steps in hand to reverse the continuing dependence on petroleum?

A - It's clear the high level of our dependence on hydrocarbons represents one of our main preoccupations.

The reduction of the level of this dependence can only be done by diversifying the national economy. Having recovered our economic and social stability, this is today one of the tasks to which we are attached.

The complementary growth support programme, financed essentially from the state budget, being carried out over the period 2005-2009, also represents an important vector in the improvement of the business climate.

Q - There are very few captains of industry in Algeria. Does that mean prospering through free enterprise is hard, that's it's easier to become a billionaire simply via import/export?

10. The private sector is still young in our country. It is, of course, only the product of our economic history. As you know, our economy was essentially administrative and centrally managed for many decades.

Nonetheless you can see that several private Algerian industrial firms are doing business today and have been leaders in different economic sectors for some years now.

Furthermore, the contribution of foreign direct investment and of foreign companies, big groups as well as small and medium-sized firms too, is growing in importance in Africa, in financial terms and at the level of technology.

Q - How would you describe ties with France? Will it require the arrival of a new generation to surmount the historical differences?

A - Relations between Algeria and France are so diverse and complex that they cannot be reduced to a simple question of generations. The flow of economic, cultural and human exchanges is so dense that it gives this relationship a very singular character.

Relations between the two countries have undeniably evolved and deepened since 2000, helping project relations into the future and giving them a depth and density worthy of the multiple links -- and notably human with the hundreds of thousands of Algerians living in France -- which link the two countries and which, in a certain way, united their destinies.

We have developed this dynamic as much with President Chirac as with President Sarkozy, who came twice to Algeria in barely six months.

President Sarkozy's state visit last December was marked by the signature or initialling of a certain number of judicial instruments not the least of which were the partnership convention and agreement on cooperation for the development and peaceful use of nuclear energy.

Although remarkable, these moves have still not shown their full scope and our relations still offer great potential that we must exploit. At the economic level, for example, the efforts deployed deserve to be somewhat reoriented to separate them from the purely commercial logic and make the leap to a real partnership that cannot be dissociated from a substantial increase in investment flows.

Q - Is it possible to envisage the reopening of the border with Morocco?

A - Of course, it is fully envisageable to reopen our border with Morocco. It is our wish, founded on cultural, social and economic considerations that are all the more sensitive in that the Algerian and Moroccan peoples are united by links of fraternity that go far back in history. This reopening of the frontier is nonetheless linked to the conditions that existed when it was closed and will happen when the current obstacles are lifted.

Q - Should one fear a resumption of hostilities between Morocco and Polisario if talks fail?

A - It's not in the nature of diplomacy to accept failure and I am certain that the two present parties, Morocco and the Polisario Front, have still not exhausted all the possibilities offered by negotiations and the benefit of speaking directly, without preconditions, as demanded by the United Nations Security Council, to find a lasting solution to the Western Sahara conflict, in the respect of international legality and the unalienable right of the Sahrawi people to freely choose their destiny.

These negotiations, which will enter their fourth round in Manhasset, must be accompanied by a strict respect of the ceasefire brought about by the United Nations in 1991. I don't want to contemplate a return to the hostilities between Morocco and the Polisario Front, which would represent a dangerous and dramatic evolution for all of our region. I must underline once again that the decolonisation of Western Sahara is not a casus belli between Algeria and Morocco. This decolonisation is the sole responsibility of the United Nations and the Security Council.

Talks remain the only means to allow our region to rediscover peace for good and embark resolutely on a path to integration so as to meet the multiple challenges of globalisation.

Q - According to sources which have not been denied, you are no longer restricted by your state of health. Does that mean this question is definitively over?

A - Everyone knows I was ill and that I had to follow a serious convalescence. But now, I've resumed my normal activities and I don't think that that should give rise to comments or calculations that are more or less fanciful. ENDS