MIDDLE EAST BRIEF (DELETED) FOR 14 AUGUST 1989.

Created: 8/14/1989

OCR scan of the original document, errors are possible

*RtE ISRAELI PRlSONE BE ALIVE BUT NOT IN HIZBALLAH HANDS.

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I. TROOPS IN HAVE CAPTUREDIZBALLAHWHO HELPED SET UPCAR BOMBING THAT WOUNDCO FIVE ISRAEL DEFENSE FORCESWEDNESDAY. THE IDF HAS ALSO TICHTEHEO SECURITY MEASURES _

SOUTHERN LEBANON IN RESPONSE TO THE CAR

11 AVIV STILL HOPES THAT SOMETHING POSITIVE WILL COME fRON^TSF UBAYD. ALTHOUGH IT HAS LONG FEARED THAT AT LEAST TWO OF THE THREE MISSING IOF TROOPS ARE OEAO. TEL AVIV PROBABLY WILL CONTINUE TO PRESS FOR RETURN Of THE BODIES AS WELL AS RELEASE OF ANY ISRAELI PRISONERS AS PART OF ANY HOSTAGE EXCHANGE.

ISRAELIS PROBABLY WILL INCLUDE THIS NEWESTINTO ANY HOSTAGE EXCHANGE INVOLVING UBAYD. THEYHIM FIRST TO TRY TO LEARN WHETHER ANY OTHERCAN BE ROUNDED UP. TIL AVIV PROBABLY IS TRYING TO PRESSURE ON HIZ6ALLAN WITHOUT FURTHER ENDANGERING THE WESTERN .

OUTH AFRICA: IN TROUBLE ON REPAYING FOREIGN OEBT

PRETORIA SEEMS CONFIDENT IT CAN PERSUAOE CREDITOR BANKS TOMOST OFILLION IN SHORT-TERM DEBT DUE BYCALLS FOR AN INTERNATIONAL CAMPAIGN TO URGE BANKS HOLDING . DEBT TO IMPOSE STIFF TERMS.3

SOUTH AFRICAN GOVERNMENT ECONOMISTS BELIEVE CREDITOR BANKS

OFFICIALS OF EIGHT COMMONWEALTH NATIONS, EXCLUDING THELAST WEEK FOR BANKS TO IMPOSE THI HIGHEST INTERESTWHEN PRETORIA SEEKS TO EXTEND BEYOND NEXT junE ITSACCORO WITH MAJOR CREDITOR BANKS. THI AFRICAN NATIONALANT(APARTHEID GROUPS IH SOUTH AFRICA. EUROPE. ANO ELSEWHERE AN EVEN TOUGHER LINE. ARGUING THAT CREDITORS SHOULD REFUSE CSfER THE REPAYMENT'

AGREE TO SETTLE FOR ACTUAL DEBT RIP BILLION

PUBLICLY. THEY MAINTAIN SOUTH AFRICA Will HAVE EN CURRENCY TO COVER CcflT SERVICING AS LONG AS THE PRICE OF GOLD AVERAGES SUOO AN OUNCE. THE NEW RESERVE DANK GOVERNOR. CHRISTIAN STALS. WHO WAS APPOINTED AFTER GOVERNOR DE KOCK'S OEATH LAST WEEK. NEGOTIATED THE CURRENT ACCORDJW MARCH7 ANO WILL DEFEND SOUTH AFRICA'S INTERESTS ABLY. 't0mWtm%

PRETORIA IS CONCERNED ABOUT THI POTENTIAL SIZE Of ITS SHORT-TERM DEBT REPAYMENT OBLI CAT IONS ANO THE NEGATIVE IMPACT OH ECONOMIC GROWTH. MOSTHE DEBT. HOWEVER. IS HELD BY COMMERCIAL BANKS. WHICH ARE EARNING PREMIUM INTEREST RATES AND ARE UNLIKELY TOTO PRESSURE TO IMPOSE UNREASONABLE REPAYMENT TERMS. IF PRESSED TOO HARO, PRETORIA WOULD BE MORE LIKELY TO SUSPENO OEBT REPAYMENTS THAN TO RISk .BEJNG SEEH OOMESTlCALLY AS HAVING YIELDED TO FOREIGN PRESSURE.

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U. IN BRIEF SOUTH ASIA

X--BANGLAOESH PRESIDENT ERSHAO HAS APPOINTED NEW VICEPRIMERSHAD STILl RECOVERING FROM RECENT . . HANGES NOT LIKELY TO AFFECT NATIONAL POLICY. SHIFTS IN SENIOR LEADERSHIP LIKELY SOON. [>

MIOOLE EAST

TO REOPEN PALESTINE NATIONAL FUND. PLO'S OE FACTO FINANCE MINISTRY, IN AMMAN THIS WEEK . . . JORDANIANS CLOSED IT THREE YEARS AGO AFTER RIFT WITH PIO . . . SH_OWi RELATIONS IMPROVED, EFFORTS TO FUND INTIFAOAH INTENSIFYING.

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