Warning Page
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n-.ii: Situation Report
USSR: Gorbachev Vititing Spain and France
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; Concerns Grow ing as Revolution Dayecurity Plan
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Planning To Move Against Crime Pakistan; Conservatives Prepare To Form Government
New Zealand: Undecided* Key to Election Tomorrow
In Brief
Analyses
Winter Food Supplies Likely To Be Tight
States: Capital Flight To Take Iu Tofl
S-Jdam Vl.lli Kurdish Fomlt.
In Al-Sulavmaniy* govcrnaic. Iraqi President Saddam visited several Kurdish families, discussing their grievances and promising to ihctn QsVflBMBagfajas^pjpBsss)gssss^ Sad< jMatafcaag,
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"with the families and, walkctiuarough'ciiy streets thronged^ ^
l*i' to Kurdistan is Saddam'so*n
fugecs who recently Bed Iraq and Kuwait
outside the Baghdad area except for bit jrip to Kuwait since tbe invasion. Thc move suggests Saddam does notignificant domestic threat to his security. It is also part of theggressive propaganda effort to maintain domestic suppor
Situatino in
HoiUge
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salaries in Kuwait now arc paid in Iraqi dinars, and the Kuwaiti dinar is worthless.
Kuwaiti oil production is not closed down entirely.
Production and refining facilities coniinue to produce enough oil for domestic requirements.
in Kuwait were declared open recently,umor that the Kuwaiti resistance had planted bombs in them has kept children from rcturi.ing to classes. Kuwait Urjiversity is technicallyut no c'.assri are bciriR hcl^nMt,
A large number of French citizens in Iraq gathered at thein Baghdad to seek news about arrangements for
the some*7Cb Bulgarians being held In Iraq..
announcement came at theIraq by BuIgaria^Vicc President Scmetjievj
iemerjiev on Tuesday promised Saddam that Bulgariaeaceful (aad Arab) solution to tbe
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1 Allhough Iraqi authorities are unlikely to hinder the hostages' departure, it probably will lake some time for the French and Bulgarian Governments to ananac iransporiailon home for all
their trapped cit
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Gorbachev Visiting Spain and France
v. ufi. which) begin today nnd* Sunday, rtsptxtiraly, are intended to show that hit policies art expanding Savlttpolitical and economicih Wtitttn Europe and enhancing tha USSR* International stiturt
Gorbachev will sign general cooperation treaties and economic agreements in both countries and will ask for iheir help in securing an assistance package from Ihc EC. He will also seek their support for new CSCE security institutions at the CSCE summit next month and willeaceful Mitlemeni ofthe Persian Gulf crisis
probably views the new treaties as important signs for Soviet audiences of growing Western acceptance ofthe USSR as an international player and of Western support for its economic and political reforms. Gorbachev also is trying to balance the USSR's policy in Europe, which someBBaaj|ijaaJf>-rc criticizingGerman centered, and clearly hopes that concern about German-Soviet ties will'
Madrid's recent moves to improve relations with Moscow reflect Prime Minister Gonzalez's more activist foreign policy and hit support for Gorbachev's reformiscussions during Gorbachev's visit probably will focus on promoting joint investment, signing agreements on narcotics and political cooperation, and developing the recent initiative by Spain and Italyere nee enooperation in the Mediterranean'JalMpp
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Security Plan
The Harawi gottrnmentegun implementingsecurity planwith apparent cooperation from the militias, though they areM completely disarm.
The Army is assuming conirol over soiifrttrcai formerly conirollcd by lhc militias, dismantling the Green Line thai divides Muilim West and Christian East Beirut, and reopening roads closed since ihc. The government has ordered offices of pro-Syrian miliiias in former Awn territory to close, and Syrian forcca have reportedly closed Huballali centers in ihe southern suburbi iMftb
-Thc Shia Amal militia, the Druze. and the Christian Lebanese Forces have publicly endorsed the sevunly plan, recognizing itirst step toward implementation of tbe Ta'if Accords, which stipulate the militias disband by February. The government is negotiating with tbe Christian Lebanese Forces for their withdrawal from controlled areas in East Beirut, including the pons. Amal leader Barriilling toorces, while Druze leader Junblau hopes that some ofitiamcn will be absorbed into the Lebanese Army. Hizballah bat noi only endorsed the Ta if Accords or the security plan bui also has not resisted Synan activity in the southern suburbs.*
Harawi government's svecess in extending lis -authority will enhance its credibilityay reassure the Christian population in former Awn-controlled rrcas. Continued success will depend on ils ability to enforce the security plan. Implemenimg security measures beforeroadly based governmeni probablyecision made in response io Syrian desires.
miliiias who endorsed thc security plan wish to appear cooperative with Ihe Harawi government as negotiations for Cabinet positions, begin, but the true tesi will come when ihey arc asked lobdj
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vote
afler the UI agreesrime minister, the
governmeni will be shaky, as components of lhe alliance clash over such issues as imposition of Islamic law and federal-provincial relations, while putting off action on pressing social andeaders have cordial lies io ihc military and are likely lo go along wiih ihe wishes of President Ohulam Ishaq and Chief of Army Staff Beg. An UI governmonI is likely to maintain the current hard line againsi India and Afghanistan. Relations with the US probably will cool. Bhutto probably will wait for tomorrow's provincial assembly elections before deciding her next move. She has little choice but to sit in parliament as leaderinorityoycotting ihe Nalional Assembly will marginalize herllms for street protests risks the imposition of martial
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ZEALAND; Undccldeds KeyieciUo Tomorrow
Thc ruling Labor Pany hopeshird term by capturing thc undecided third ofthe clcctoralc. Thc undecidedt consist primarily of traditional Labor supporters disillusioned with Wellington's mismanagement of the economy; voters reportedly believe that Labor's economic reforms haveisecord high, inflation is rising, and the deficit isare not persuaded that the National Party's economic policies would be any better. Labor hasftheeats in parliament and may lose scats in areas that have been traditional party strongholds. National Pany candidates are projected to take most oftheeals at stake in Auckland, where most New Zcalandcrs Iy
'Prime Minister Moore's vibrant personality andprobably have helped Labor catch up withBo'iger's National Party, which isoints ahead tn thevoters arc fixated on the declining economy. Moore's chargewould ahap.do.rt antinuclear policies was largely ignored by tun suggestion
Wednesday that New Zealand suspend or cancel iu conirac: torigates from Australia probably didaQd mcy have aggravated relations with Caiiberca.alWMBI
In Brief
Albanian writer Ismail Kodarc lias defected to France, says President ignored his picas foregime
traded on his reformist image, likely to lose credibility . ay
encourage dissent, particularly among intellectuals.'
Government announced Hungarian Prime Minister Antall had minor surgeryill requireoays postopcrativ
- Ukrainian Nationalists in Soviet Ukraine at'empllng to organize political strike by railworkcn foralling for new elections, resignation of Ukrainianrganized labor suppononie oil disruption possible
Soviet Moldova's Gagauz minority yesterday held ejections planned for Sunday to preempt government interference Moldovan legislature threatening state ofoscow unlikely toethnic Russians beavil> involvcd^VaVanV
Soviets arrived in Beijing yesterday for first Chlnaat-Sovietommission. Chinese armaments specialistsrobably discussing Beijing's requests fighter aircraft, advanced weapons technology.-
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Special Analysis
Food Supplies Ukel) To Be light
' luppliti Of food im tlutei continue lo ba light this wlttur. Bare store shelves will posetrlous problems for some regions and income grouji ^RgaasV
Who Ham First
The overall supply of food in state stores, where most food traditionally has been sold, is likely to continue to be tight this winter; some types of food will be less available than last year. The growing resistance of local olhciala in food-producing regions lo state procurement targets and delivery commitments to other areas will make things worse.roblems will be particularly serious in
' continued
such icgions as the Urals rust belt where Utile food is grown and where large etiics such as Sverdlovsk, Chelyabinsk, and Perm are critically dependent on shipments from other regions. Enterprise! that have few goods lo barter for food will alsoHfc>
Those with lower incomes and no access lo special food-distribution systems wilr suffer most. Pensioners, for example, generally cannot afford lo buy food in collective farm markets, cooperative stores, or on ihe black market. Such groups will spend morejimc searching for food products in state stores and may go without. iSMfe
Outlook
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Special Aoaljsis
Flight To Take Iu Toll
authorities and local bank* have cushioned the immediate impact of the capital flight by pumping foreign exchange into their economies. The central banks have also increased government deposits in local banks and have Issued statements highlighting their strengths so as to calm lhe public. Although the net outflow of capital from Gulf banks has been stemmed, recovering the foreign deposits of many wealthy private savers will be difficult as long as thc political and military situation in thc area
The run on deposits and loss of business confidence haveactivity to slacken throughout theossconfidence apparently is hitting manufacturers;inventories for most consumer goods couldlowdown would compound the problemsfor many local banks by reducing lending opportunitiesdefaults on existing
The Gulf governments probably will devote some of their windfall oil revenues to spurring economic activity in ihc hope of limiting ihe longer term damage. Governments trying lo compensate for lhe reluctance of buiinestmen lo Invest locally, however, will face competing demands, especially defense and aid commiimenls. Thc shortage of liquidity in local banking institutions and higher local interest rates may make it hard for lhe Gulf stales to borrow
i to borrow on international
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