MIDDLE EAST ASIA BRIEF FOR 18 FEBRUARY 1987.

Created: 2/18/1987

OCR scan of the original document, errors are possible

SUBJECT: HI DDLS EAST ASIA BRiEl IBB7.

FROM:tnS

I. SOUTH AFRICAI SEEKING TO FUEL ECONOMIC RECOVERY 2.

i. IN BR IiI

I. SOUTH AFRICA: SEEKING TO FUEL ECONOMIC RECOVER*

PRETORIA HAS TIMULATIVE BUDGET ANO IS ASKING INTERNATIONAL CREOITORS TO EXTEND THE CURRENT FREEZEOMf DEBT REPAYMENTS IN AN EFFORT TO CONTINUE ITS MOOEST ECONOMIC RECOVERY.

PRELIMINARY DATA INDICATE THE

REAL GDP GROWT

A'R11AM ECONOMY ACHIEVED >URRCOHARP DECLINE IN .PENDING. AND HIGHER-TMAN-itR SPENDING REB3UH0CDTENEST RATES. TNE .TIC UNftEST. AND A

rTiE (MPAfT BUOMO

Will HAVE

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OT: EB 87

CONSUMER CONFIDENCE. BjSiNESS INVESTMENT REMAINED DEPRESSED. BUT-GOVERNMENT SPENOING ON REM. FIXED INVESTMENTS ROSE.

THE LATEST BUDGET IS TEMPORARY. AND THE EINAL VERSION MILL NOT BE PRESENTED UNTIE AFTER THE ELECTION IH MAT. THE BUDGET CALLS FOR CUTS IN INCOME TAX RATES ANO REPAYMENT OF SOME GOVERNMENT DOMESTIC Of BT to BOOST REAL INCOMES ERODED BY INFLATION. THE GOVERNMENT ALSO IH PROMISING AN AS YET UNSPEClFlEO PAY HIKE FOR CIVIL SERVANTS"

ALF OF ALLLATER IN THE YEAR. VJatTAsl

will ask to pay on

SLIGiTTlTtoRE THANERCENT OF OUTSTANDING OEBT.HIS YEAR. INSTEAD OF THE ERCENT THE CREOltORS WANT.

N BRIEF

COUTH AFRICA'S NEAR-TERM ECONOMIC PROSPECTS HAVE IMPROVED. BUI CONSUMER AND BUSINESS CONFIDENCE REMAIN SENSITIVE TO POLITICAL UNREST. PRETORIA'S CREDITORS ARE SATISFIEO WITH THE BASIC STRUCTURE OF THE CURRENT OEBT ACCOAO ANO WILL PROBABLY AGREE TO KEEP DEBTPPROXIMATEL Y'THE CURRENT RATE. IN ORDER TO

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ADVISER TO LEBANESE PRESIOENT GEHAYEL RELEASED ON SUNDAY . . . APPARENTLY KIONAPED BY HIZBALLAH FAMILY TO SWAP FOR KINSMAN HELD BY CHRISTIAN

HALK RESPONSIBLE 'OR BOMBINC

IN MASHHAO THAT WOUNDEDf NT KHAMENEI'S BROTHER AND FOR

ORGANIZATION

S FIRST ATTACKS

ASSASSINATION Of EOUCATION MINISTRY OFFICIAL . .EFTIST

SEVERAL 'EARS.

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