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Contents
Persian OuK: SHuatioo Report
Algeria-Tunisia-Libya: Closer Relations
Ecuador:
'Notea
Regime Trying To Oust Vlco President Panama: Searching (or Foreign Financing
Venozuela:Mew Economic Team
Costa Rleei Progress In IMF Negotiations
Thailand: Air Force6 Purchase
e ,
: ww
Analyses Libya*
Mexico: Chollonges tor Salinas
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7
Report
of Support Trie Qui' Cooperation Council at Its ministerial meeting In Riyadhdenounced Iran's attack on Kuwait and declared Its support
(or Kuwait against further Iranian aggression. The Council added that
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UNISIA-LIBYA:
Relations
Algerian and Tunltlan leaders are responding cautlouslfefforts to Improve relations.W'
Aloorians may continue to dangle tho prospect ot union before the Ubyan leader In order to obtain furthor subsidies In the hope of moderating Qadhafl'a behavior. Their own Interest la art Isolating Morocco In the Maghreb so they can press King Hassan to meet some of their terms for settling the Western Sahara dispute.
The Tunisians share lhe Algerian distrust of Qadhafi and fear him much more. Nonetheless, they might succumb to any Algerian pressure to restore lull diplomatic reunions with TrtpoS and to Include Libya In tho tripartite pact.
ctober iter
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Mllltary-LSftlll ClUh Li. I .
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A ono-da, general strike tomorrow by the tar-loft Socialist Parly end the United Worker* front mayiolent clash wtth th* military and upset th* fragile liability of Presidentebret-Cordero'a '
Febres-Cordoro's refusal lo comply wllh the congressjonal oonaure haa alienated moderate polilical elemonta, Pfevtous general atrlkes attracted^pport almost exclusively from the far lc.lt
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rwith the governmeni and tho legislature unwilling to make concesslona, chances are greater Ihan even that the strikers wUI become violent and that the military will respond In kind If the police cannot contain the situation. Although the military Is probably making contingency plans to take powerrder breaks down. It may try first fust to contain striker violence In the hope that puoac supportoup wat bulid. Nevertneless. more confrontational tactics by the left could easily provoke mlRtcry intervention. 1
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PANAMA: Regime Trying To Oust Vice President
The Panamanian Government's campaign to force tne resignationVice President Esquivol Is intensifying toltowlng hiswith the US Ambassador. The regime convenedsession ol the security council yesterday to discusswith Esqulvel. who returnedrip to Nicaraguaaccording lo press reports. Esqulvelmall partyruling coalition snd has vowed to remain despite pressureregime, which closed his offices while he was BwayanQofficials who are members ol histhe past two months, the proregime press hasfor the expulsion of the U8 Ambassador, buthas assured the Embassy that no US personnel willpersona non grata(3)
The regime Is angered by Esqutvefs pubic criticism of Its
handling of ihe'poilttcal crisis and its failure lo enacteforms and has maneuvered him out of any authority. Nevertheless, the government wants toacade of constitutionality and probably will try to force Eaquivei to resign by ostracizing ham. Panamanian strongman Noriega will be reluctant to risk a -confrontation with the US by expelling the Ambassador but at the least will use the Ambassador's contact with Esqulveleason to ktlorislfy vitriolic attacks on Washington lor Interfering In Panamanian affairs. ^eajBaj^saBBBBpaaBBBBBlSSw
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PANAMA: Searching lor Foreign Financing
Panama's attempts to attract foreign funds reflectlis financial
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- Jle 'eQ'mo mQy succeed In attracting some foreign fund ng but donors are unlikely to make large commilments while poll teal unrest prevails.esult, the governmenthat eventually could threaten its poliiical control
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VENEZUELA: Now Economic Toam
President Luslnchi's appointmont of well-respected economic
advisors Hector Hurtado and Maurlcio Garcia to head the ^
Ministry and the Central Sank may lead to much-needed
reforms and pave the way for new foreign loans. Former Finance Minister Azpurua resigned last week after he failed to secure foreign financing that Luslnchl and ruling-party officials had said was a
oiiu iuiuiniidiiy uniciais nea ebioecessary accompaniment toillion public debt rescheduling agreement that Venezuela slgnod last monthflaBjsBSh;
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pJPsesaseejSli The changes in economic leadership reflect(3)
concern within the Luslnchl administration about Venezuela's
deteriorating economic conditions; the annuel rate of Inflation hit
ercent In August, as compared withercent last December,
while oil revenues will probably increase by onlyercent over last
year's levels. Hurtado, who has broad political support, may be able
to persuade the government toighly controversiot
increase In domestic Interest rates to Improve Csracas's financing
prospects wtth
COSTA RICAi Progress In IMF Negotiations
The IMF Is close to agreementillion loan andlor Costa Rica, but an accord probably wm notdomestic criticism of President Aries's handling ofAccording to the IMF. the agreement has toughand approval Is contingent on Costa Ricamillion In delinquent Interest payments to commercialtoontroversial tax package will Jeopardizeability to meat the standby program's December^economic .and would delay release of'
sslsssVtfss The press is criticizing Arias for pursuing lax increasestho IMF while neplccting promised aodal(3)
asasiaaaf^BM opposition politicians oppose austerity measures ihat(3)
not reduce the public budget, and they ere likely to block or delay tax legislation. In addition, vocal labor factions and business groupa remain critical ofailure to Improve education and health services and busk) more housing. If the IMF accord is approved, however, private creditors and the Parts Oub probably wffi renegotiate, end the debt rescheduling and new loans eventually would give Arias greater flexibility to stimulate growth and meet Ms social program obligations.'
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Air Fore*8 purchase
Novrly appointed Thai Air Force Chief. Air Marshal Voranat, has deterred (or alear plans lo purchase six additional6 lighter aircraft because of budgetary constraints. The decision, which has been conveyed to US officials,ecision made late lastmonth by former Air Fore* commander Praphan to acquire th* additional aircraft. The Air Force budget Is already severely restricted by thy mltlal purchase ofircraft, the flral of whlc^ win be delivered rtoxl V" ii
eversal follows Voranofs controversial appointment and will soark nenewed unreal among supporters ofoccupy most key Air Forcewtu complicate Voranat's efforts to consolidate his position. Critics of Voranat have already expressed their anger lhat Prime Minister Prem Ignored Praphan's -chosen successor In lavor ol Voranat. They refused to report tor duty the day after tho announcement esrijer this month and have spread coup
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In Brief
Salvador's unolliclal Human Rights Commission blames rtghlWlng death squads, govsynmont securtty services for Ita loader's murder yesterdayharges unsupportedore likely committed by Independent rightists or In vendetta by left eMfajV
Nlcaraguan Indian rebel leaders truce negotiations catted off because ol new Sandlnlstaegime insisting Indians accept amnesty first to avoid setting precedent forjnaln Insurgentreliminary talks apparently
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relations with USSR coniinue stowoviets allowed to reopen consulate InMoscow eager to foster moreairo will proceed cautiously to avoid damaging ties to Washington IbJHbT*
Peres revealed secret meeting with Ethiopian counterpart while In New York recenily on UNot Avfv seeks deeper ties, emigration of Ethiopianremature publicity may slow efforts."
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West Berlin mayor Diopgen held first-ever mealing with East Berlin counterpart lastrying to become major force In intra German relations
wis brief Warsaw Pact Foreign Ministers tnweek on latest round of US-Sovietosslon wHl endorse Moscow'so major new Initiatives
East Asia
Korean opposition leader Kim Dae Jung to form new party next week, base for presidentialurts credibility with Koreans who want singleay hope lo force rival Kim Young Sam tojfc
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Jff^l )
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Special Analysis
lor Salinas
rullng-part, presidential nominee, Carlos Salinas,umber ol domestic economic problems that President de la Madrid has tailed togrowth, high Inflation,arge budget deficit. Boosting economic growth and slowing Inflation will bo Salinas's most pressing economic concerns when he assumes office In DecemberHowever, Jeer party tactions are dissatisfied with tha selection ot Salinas, who ma, have to compromise on Mt economic aoenda to ensuresweeplnu victory for his part, fJVfcJRltk
As lhe architect, ol Mexico's economic policies while Budget Minister, Salinas Is familiar wtth his country's problems and well Bulled to handleragmetlc economist, ha Is aware that some economic strategiessuch as massive federalarge government role In the economy, and restrictive trade and investment laws-may no longer be tenable. He now claims to favor budget discipline and has vowed to promote Investment projects over more
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the same time, however, some of Salinas's economic preferences may cause problems. As Bud pet Minister, he wes willing, tonflation as the price for economic growth.
preference for continued state control over key sectors will lead him to streamline Inefficient state-owned enterprises rather than to sell or dose them. And the tough stance he took on debt Issues as Budget Minister are sure to carry over If talks with creditors stall when Mexico seeks new foroign loans, perhaps as earlyaWksBV>
Concessions to Interest Croupe
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Prospecta
ough campaign as he strives toolitical base tor himself andlrong showing for his parly. Historically, the party has proved adept at Increasing Its candidate's appeal, but the party's fragmentation will test Its capabilities, j
De la Madrid's support and his control of the government's purse strings arc tho candidate's strongest poliiical assets. De la Madrid, however. Intent on being remembered for salvaging the economy. Is refraining from economic excesses for the remainder of his term and appears reluctant to Increase spending. Nevertheless, he will use whatever resources are necessary to strengthen Salinas and increase suppori for the party.
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Original document.
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