-NATIONAL INTELLIGENCE DAILY
..Warning Page
IRAQ-KUWAIT:
people of Baghdad reportedly believe Ihe US will launch airstrilecs consume' prices there are nabili'ing. fSJjfffj
Public Fears US Military Action
civilians believe the US will attack Iraq's nuclear insiallations,Tbcy alio believe the regime isnuclear facilities and fear possible radioactivean attack on these sites. The apprehensive moodintensified by rumors of coup plotting, sabotage activities,regime executions of high-ranking miliiary officers. leadingof Baghdad to hoard^
j
Consumer Prices Stabiliiing
prices havedropped approximately one-third over the past Ihrcc months, but, at the end of June, theypercen: above P'Cin.aI jfaWaatga^
ancind
tcaTcrnairiccr^nTre ihenercent higher ifiAn pre-ar Ic -MfLecline in prices io tepain of fffe ir. frast.- ndri!f'systerns. limits on bank withdrawals, and stability of lhc cachangc rate. Hj
probably hopes publicizing this lie confidence and allay fears of inflationur devaluation.
b(3)
Report
Gorbechtr played up Ihe consensus on thc union treaty on tht eec of lhe Central Commillec plenum today, while traditionalists and Yel'tsin drew batiltlines O'er his decree depolin'cizini Russian institutions.
,
announced Tuesday ihai Yel'tsin and some other republic
agreed On thc union treaty, but taotion provisions are still
hammered out. Hc said the draft will be endorsed soon,
on Union Treary Gorbachev publicly welcomed Armenian Seider Ter-Pciros van's
participation and emphasised Ukrainian commitment to Ihekraine, however, was represer.ied*-by us deputy premier. He appealed to republics not participating to join the process but said their fate will be determined "within the framework of legislation."
b(S)
Gorbachev will use this success to bolstertoday's plenum. Although important progress was made,
repubiic-ecntcr junsdiction are resolved. Gorbachev will continueUkraine to sign the accord, but legislative chairmanKiev should not do so before the adoption of awhich is unlikely before late ihis year.his deputy. Kravchuk probably judged tha! Ukrainebe viewed as even proviso-ally approving it. Ter-Petrosyan.attended as an observer lo assess the potential benefitsthe treaty, is unlikely to do SO before theon independence in September. Gorbachev's appealrepublics is likely to be ignored, but his comments suggest mayew law that would make secession(i
Russian Reactions Moscow Mayor Popov isommission to implementYel'tsin Decree decree banning Communist Pany cells innd theother hardliners haveampaign againstSupreme Soviet Chairman Luk'yanov has referred the issueConstitutional Oversight Committee,ussian panysaid that, if it rules against Yel'tsin. thc pany *ili movehim.
faasasassaaaV Yel'tsin, who is exploiting the party's disarray, wants pany
removed before local elections are held in the fall. It is unclear how he plans to implement the decree, and efforts io do so in traditionalist strongholds arc likely lo be difficult]
(3)
t3
IRAQ: Implications of Resumed Oil Exports
terminal in
a UN decision io lei Iraq resume limned oil capons temporarily would help case an cspetied tighter oil markcMhis winter but could cause higher prices when suchcease.
through Saudi Arabia.
Iraq could raise iheillion in revenue allowed by ihc UN by rearend ;fii'd during ihc next five months and if ihr value of its cri.Cc remains near Slg per barrel. Such capons probably would leadiimewhjt lower oil prices for Ihc rest of this year because ihey *ould ;iut excess production capacily worldwide. improving ihe market's ability to respond tounexpccied -demand surges or icmcorary production shortfalls. At ihc same time, ihc matket would become dependent on the Iraqi oil. making it hard to shut orTthe flow wiihoui raising prices by as much as severalarrel, especially if ihc cutofT occurrec' during ihc winter heating season. Major oil-consuming nations may (hcreforc be Icssjnclincd 10
)
Tallin Focus on Economic Issues
Al Ihei.-Snnoal meeting last week in Kuala Lumpur. ASEAN foreign ministers agreedorking group ShOuid coniinue to study Malaysian Prime Minister Mahathir's proposal for an Easi Asian economic grouping and report al thc meeting of ASEAN economic ministers in October. They endorsed Thailand's plan for establishing an ASEAN free iradc area by ihcnder which members would gradually liberalise iradc ir. key sectors such as textiles, shoes.
wowi products sgMSasBMHIBilllBH During talks "lhc group's dialogueCanada, thc EC. Japan. New Zealand. Southicl ihcministers (tasssaaaassV criticised the EC for trying to link iradc and aid inhuman Pghn and environmental concerns. They also rejected Washington's call for Ihem to press Burma'segime to step down and said they would continueeal wiih ii.
oTicials Sec signs of growinge proposed North American Free Tradebchev- criticism of human rights and environmentallum ASEAN members" economic development. Theimsicrs' refusal to impose; sanctions oneflects an interestliesacilitate Burma'sintorescnir^cniofwhaMhcy ice as ihe
July
-
bl
b(3)
b3
USSR-SOUTH AFRICA: Cementing Economic Relations
The Soviet-South African trade agreement signed Tuesday provide fordirect comae: Octwcen Sovjci and South African enterprises, joint ventures, joint development project in third countries, the Opening of chambers of commerce,ilaicril businessining cooperation agreement signed last week may lead to price coordination, as weil as an ochange of technology, equipment, and
by UN sanctions on arms and oil trade until South Africa's abolition of apartheid becomes irrevcrsib^ bui_thcy diiTcrcniiaic between economic and politic
'The Soviets are willing to develop business and trade -Opportunities lhat do not violate sanctions. They almost certainly believe ihc economic benefits outweigh ihe cosls lo their longstanding relationship with the African National Congress bu! arc sensitivefurges that Soviet-ANC relations arc cooling and probablv will reschedule Nelson Mandela's canceled visit before ihc end of the
- Cni.ikrn __
producing and marketing those minerals of which [he two countries arc leading producers.)
BULGARIA: FaeinE Decision on Treaty Wiih USSR
The Bulgarian Assembly soon wilt debate renewal of7 friendship treaty wiih the Soviet Union.]_
Bulgarian Socialists and some naiionalists. including Premier Popov. aDparenily will try lo Stall efforts by President Zhclcv and most non-Socialist ministers to renounce thc treaty before its automatic renewalugust. Moscoiv. meanwhile, is pressingew treaty thai, like thc Romanian-Soviet treaty, would limit its partner's future alliance options. Deputy Premier Ludzhcv.member of thc Union of Democratic Forces, claims lhat Moscow is makinggsrymcnt of its debt to Bulgaria conditionalewJI
sMBaMI The Scepsis, whoscats in ihe Assembly, may succeed in preventing Bulgaria from becoming the firs! former Wa^aw Pacl member to renounce its bilateralh the USSR. They fear such action could damage economic tics to theextensive ihan ihoscof any other East Europeanwill tiy to capitalize on ihe Bulgarians' lateni Tear of Turkey by citing Sofia's need for continued Soviet protection. Divisions within ihc cabinet will complicate efforts io resist Soviet pressure, but serious treaty negotiations arcegislative election, expected September fl9tfflMNB>jfi9MkM^&
ul.
k>3
In Brief
East
)
)
USSR
(3)
Yemeni tribesmen yesterday releasee kidnapped US oil worker -unharmed as governmentanaa adamant about protecting US citizens, refused to trade for jailed tribesmen.
Israeli poll Tuesday showedercent of public opposes yielding any part of Golan Heightsittle change from response before Syria agrees ro^cace calksugarii* mosi sec area as important buffer zone. 1
ionsore
Georgian leadersQ0 republic troops to patrol Tbilisi streets after Soviet soldiers' hooliganism over.
shows intention to Stem Soviet pro-oca confrontations likclv.
air irame controllers threatening to strike on. protesting go-err.meniailure to deliver higher .wages. Shorter -or.weekromised in Mavid. pilots. Other workers may join walkout.)
IPabio Escobar's drug ring almost certainly responsible for assassination of Colombian paramilitary chief Henryuccessor's promise of re-enge may prompt more bloodshed, possible feud with Medellin cartel. "
Retiring Army Chief Gen. Beg warned Monday India may take advantage of Pakistan's civil unrest ioot supported hy other military, politicalhetoric net likely to bringovernment, sparte military clash. flH
Grouperman hostages in Lebanon yesterday threatened to harm them if information on condition of two Lebanese imprisoned in Germany no: provided by tomorrowlso holds atS hostage B
EC CommissionO.0OO in emergency food aid far Albaniaoreign ministers" approval next week requiredlio
seeking mandate for trade arresrr.cn: talks, inclusion of Albania in
CI* aid programs.,
Asia-Oceania
Philippine Communiston Monday renewed public threats to atiack US personnel,inked to announcementbasesoping to influence Philippine Senate to reject
Head of Tai-an'sStraits Exchange Foundation;
suggests President Li besting Premier Hao in'ngnt foi control of mainland policyhis issue, coming national election important in Taiwjnete-.mainlandcr power struggle. aBf|
b Navy has Defense Ministry
approval to buyf^uscdE aircraftavy's first
Jclcontinuing. Bangkokfor delivery
)
)
b(3)
)
Special Analysis Border Chjnoci Mi
hope
Serbia and Croatia may be ihe ben orYugoslavia's Iwo large.it
and ihe impossibility ofeal satisfactory to all factions means, however, that such change almost certainly would be accompanied by violence ttVheeeeW
Serbian President Milosevic insists thai rcoublic borders would have to be redrawn to keep Serbs together in one State if Yugoslavia breaks up- Me hascheme under which Croatia would cede control over its Serb-populated regions in exchange for Croatareas _of Bosnia-Hercegoviaa. while Serbia would take control of Serb-populated areas of Bosnia-Hercegovina Milosevic's plan would allowosnia-HircegO'ina. wbo fear ihey would loseeal between Serbia and Croatia, to choose independence or affiliation with another reput :
Croatian President Tudjman has insisted that his republic keep its current lands, but his interestivision of Bosnia-Herecto-insrowing because lhe current security and economic Situation leaves him lewce lite March, ihe Army hasugh forces into Or rear ihc Krajina and Slavonia regions to exercise complete control there if ii desires. Continued Serb unrest also would seriously undermine the Croatian economy, which depends heavily on tourism. Moreover. Serbs exercise de facto control over much of Bosnia.Hcreegovtna. and Croatian leadcmnusi consider whether they should strike awhile ihey can
No Viable Allcrnaij.es
There appear to be no viable alternatives to an agnaemeni based on territorial transfers. Given thc bloody clashes ihai have occurred, an agreement granting minorities special guaranieei probably would be too little too late. It is likely that ihc republics would revert to repression of their minorities if the political deadlock is prolonged.seic pcJicc to admir.isicr Kosovo couldodelna
rstemaiicand elmosi
certainly would broaden the limited population movements already under
continued
I)1
Muslims in Bosnia-Hercegovina. who constituteercent of the republic's population, are not strongenough lo prevent theivision if Serbs and Croats reach an agreement and win Army support. Information on Muslim popular opinion in the republic is scarce, but potential support for an Islamic state may be significant Islam has thrived in Bosnia-Herccgovina. anrTits Muslim community has extensive contact with the Islamic world. The Muslim-dominated Bosnian government has focused vir.ually all its foreign policy efforts on Islamic states, including Iran and Libya.osnian clerics were educated in Iran, and Iran and Libya are widely rumored to have financed construction of many of the newer mosques in Bosnia-Hcrccgovina. If Bosnian Muslimshoice between association with Roman Catholic Croatia or Onhodox Serbia they probably would seriously coniidcr seeking support from Muslims
m**
probably would be highly dependent on Serbia or Croatia.
b(3)
:)luly
r
b(3)
Biokcring,eal
Even if Milotevic inct Tudjman decided to negotiate seriously, talks almost certainly wouldrawn out and difficult. Implementation would be equally troublesome and probably would be accompanied by violence, particularly in Croatia and Do&nia-Hcrccgovjna. Even a
turmoil, more than JO percent of Serbia'* population ii nan-Serb, and thc Albanian Kosovo and Muslim Sandjak regions already are gripped by breakaway sentiment. It might also be hard to exclude foreign involvemeni^boih Albania and Hungary have hinted at territorial claim* "
deal, however, may still be Ihe best achievable outcome.
Wjih an agreement tooose confederation highly unlikely, the .alternative io redrawing republic borders appears torolonged and bincr civil war. If the republicsew territorial division, they may seek the internationalelp in implementing ii. The EC would be the mott likely foreign partner, given us growing effort to manage thc eriiis. and Western
aid to case resettlement and refugee problems.
(3)
^jgjggr )
0 r
b3
Special Analysis
Afghan Rebels To Intensify
Pakistan apparently beiie.es the US is about to halt lethal aid to the Afghan resittance aid ii pressing for significant military gains and for
fall short of lilamabad'i goals..
Situation on Ground
Thc refinance has recently initialed more Sghtingiderarea than at any time in the pastyears, believing such aeiiviiy will ovcrcxtend regime forces and prevent them from responding ctTretivcly to every threat. Resistance commander Masood follo-cd the tactical and psychological achievement of the Khowsi victory inir? three small eifniorij in the north and
Maieh
imited success.
against jauiasad. oaroeri. iirily bell should begin soon. Regime efforiind open key supply routes have had only
the increased military activity, arosscetsresistance break through this year appearore small garrisons or provincial capitals are likely to fall, but rost resistance field commanders sspear unprepared to tryapture major cities. Continued factionalism win prevent the resistance from achieving
continued
s
}
m
Special Analysis
View Peace Process
Palestinian leail/ri are hardening ihiie stand. pattiei
a press conference Monday, several Palestinian leaden from the occupied territories; said (hey had me: with Secretary Baker on Ihe PLO's behalf and ttrcised (hat the PLO would decide which Palestinian* would attend peace talks The group's leader. Faisal Husseini, said ihc delegation mustepresentative from EastJerusalem and insisted he would not meet wjta Jordanian officials aboutoint delegation without PLO approval
hardliners The Popular and Democratic Fronts for the Ubiration of Palestine this week said publicly tha; the US peace initiative must be rejected because it eacludes the PLO and fails to "pressure" Israel. The Popular Front's principal representative in the territories openly eriticuctTHusseini and said the Front would work to undermine US "plans fur thc region '
Arafat and other PLO moderates have also sharply eriticiied theArafat claims thc US wants to achieve "anotherthat notmaliies relations between Israel and ihe Araboffering the Palestinians only limited auionomy in theYasir Abdenior PLO moderate, has saidwill boycott any conference not based on thcfull Israeli wiihdrawajfrom (he territories and
Original document.
Comment about this article, ask questions, or add new information about this topic: