NATIONAL INTELLIGENCE DAILY TUESDAY 8 OCTOBER 1985

Created: 10/8/1985

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tOttAL UNESCO Session Optni

Most

Director-General M'Bow

The biennial UNESCO General Conference, which opens today fn Bulgaria, will assess Ine slate ol Ine organization In the wske of the US withdrawal. The Conference will consider the future of US citizens working In the Secretarial and the alleged responsibility ol the USinancial contributionhrouc

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iThe Conference might, in the worst cose, ask the World Court lo declaro the US fable lor ItaB5 contribution. Several members will call for tha removal of all US employees ki the Secretariat, but the Conlorance la likely to decide on reducing the US contingent through attrition. The Soviets will encourage M'Bow to ropl.ce the Americans wllh Soviets and East Eu

Hi*

In Brtef

KorMn. South Koreaneeting under ausplces Of International Or/mplc Committee to8. imktprogreae expected on Pyongyang's demand to CObOBt uhmhiiB

CMm. Cxechoekwefcl* signed trade, induiinai cooperation agreement last. agreed to double value ot two-way trade next year to at5 millioniecfie toegawalt thermal power station* to China:

Leonean Army Commander Momoh confirmed as President St event's auccessor In referendum laat weektevens wilt be under preeaure from miliiarytep aside before term expires In

DoCernbei

Nationwide) day of prayer planned tomorrow byAfrican Church leaders, including Bishop Tutu, drawing mixed suppori from ani(apartheid. some nonwhfias may boycottullent nonwhlte youths may mount violent proiostB.l"

continued

CEMA deputy premiers Ineptember stressed need tor direct regional inks among enterprises to achieve Integration noBaseaBBac' progress coordinating live yen' planaf

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1st Anetyila

ot Out

toemre el Intermittent chrll war tney Lebanese economy Mae shriveled to eboerl hetlpremier level, in ihe leet rear, Iniletlon hi, soared to more then TO percent annuallf.ound hew dmprocloted myereonr, mn grown byne-third. But theene he* boon able to rebuild He loreigneervet to tome extent, mmd agricultural production In the south Im beginning to recover treat the disruption* caused by the htreell Invasion three years ego.

o( Lebanon's economic Infrastructure haa Man damaged or destroyed, many of Hi moat skilled people hava emigrated, and tha country Is cut Into eecta'lanf Influence whara iBcltonal militias Independently collectand Oporato Illegal

spendingih* peyrpil and public workson* of the principal nsaaons tharata Ins any vitality. Such apendlng has continued lo grow. although revenues hav* dropped to practically noi*lno Receipts from custom dutloa. formerly the main source of funds, totaledutton for th* first half of this year, less Ihanercent of tha amount needed to meat the budget; expenditures were nevertheless Increased at midyear0 million. The deficilikely toew record, probably well5 million. |'

Government debt grew6 baton at the and41 button at the and ot July So tar. however, the gov*rnm*nt has hod nounding Its deficit because Lebanese bantu have tew other alternative* for lniestmeni|

Industry continues to function, butery low level The unstable security situation keeps Industrialists Irom expanding capacity, maintaining large Inventories, or evendng future sales Limitations In cradit and the drop In Ihe value of the pound have hurt the ability of manufacturers to Import raw materials Goods smuggled in through Illegal ports also make many domestic products uncompetitive. The contraction ol local demand. uttiejredU. and tear Ol damage to Stocks hav* also hurt commerce I-

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Agriculture probabh/ ia thm brightest spot In LaOanoni economy. Agricultural safes Buffered conekkarebfy loaowingnvasion of southern Lebanon In IM2-orcna/dt wore destroyed end transportation difftcuhtaa and bovcotla by some Arab countries caused sales and exports fo fas With the puHbeck by Israel, mosteea problems probablyease and more land win be put bach Into production. In addition, the Ian of the Lebanese pound meheaj nation's farm products more competitive In export markets!

Although Lebanon's economic picture la gloomy, the Lebaneseno one la atafytng, and sources of funds are stillhave been numerous reportsenewed flow ol moneyto mlflltaa In Lsbanon^JMrhjpa as much0 million2,

monih Ba-fJHHAeaaaVJI eirut financialtrying to reestablish their position Inm0 million during April. May. and June,In Jury and August. The many mlHtlae. both Muslim

^nmnioyrnenl for oiherwlse unemployedi r>

trade wtth Syria, which may amount to OS muchonth, also Increasee commercial activity and provides Income. Lebanese workers and buoinesamen abroad alHl send0onth.!

The lucrative drug Made Is another source of funds. Hashish cultivation in the Bekaa Vaaey has been unencumbered by government control or Syrian Interference tor several years. Tha trade kn hashish has been estimated to be worth0 rnUaon andear. Lebanon isransit point for heroin and cocaine.'

The Lebanese eoonomy cannoi rebound unlH the security situationunder control. This will require politicalthe various (actions, which does not appear to be In lhagovernment will have no choice but lo finance Ilsborrowing, even though the process will eventuallyInflation. Lebanon can expect tittle in Ihe way of foreign eldas long as Ihe war continues

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Will

of Foreean

ai i'mqi For+tmm MJMefer Tmriej Ailaea toraaJWegfon

iIratft theOf US

pmrtlcvlerlr *nc ouromment US aapport In thm war ugmlnmtor thmr mud or progress Ineconomic f'ea. Because of frag'a dependence on Soviet mrm* mmd Ita mmolllon* In thm Monmilgnmd Movement, however. Baghdad

Will continue tOh* UM (Ml ITIMf fSSUSl US

laramSI iilii/uni*nr**llaUeallr high Iraqi eapoctatlona otcomplicate tm* re/af,on*JWp.p

'rued US support sgatnal Iran Is US efforts to

wants moat Irom Ih* sMand

beitoves lis relationship with the US also serves Its ambitious econornlc development plana. The Iraqis view tha recently Initialed draft agreement on commercial, financial, and technical relations aa tan* aymbolK and practical slop In developing closer Ilea.

Iraq's need tor US support haa helped moderate its foreign policy, al leaal in the Middle East It no longer allows radical Palestinian terrorist groups lo operate from Iraqi territory and has cooperated with US efforts lo combat larroriam. Iraq late last year In effect closed down theay organUatlon inside the country and put Ha leader under house arrest, iieiso expelled Abu Nidal and lhe remnants of hla group

USata noi extended tobehavior In (ho UN and other International forum* Baghdad'* aao^ation* to leadership ol Ih* Norusagnedl hav*ttacks on gagged US imperialismvoid charge* ol MtHng oui to Washington

lmpori*nl lo Moscow raflacl II*

Baghdad Mil coniinue to vWw US willingness to provld* trade or edits and aophlitlceted technology as an Important test o: th* relallonshlp. US refusal ol Iraqi request* would load Baghdad lo turn Increasingly to Western Europe and Japan to meet Hi economic needs In theterm, however. Iraq probably woulo^nulett* anger because It needs Washington's support In the war^H

An

would noi causensaaa Waoronoton technology with

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Special Anary.i*

Slap* In Punjab

tccon* aefweevi Prime Minister Gandhi and Pva/eo'a fl/xhsJuly and fn.ction late weeks ego will allow Gandhi lo put the Sikh life behind Him tor at leant the naif fairroblem* ol sharing local power end resources mod the continued opposition ot Sikh extromlata, hemover, mate If likely ' unjab willajor challenge tor Ma government.

would Cla airy Ilkarn lo economic modernization, hit hgheet priority. The Jury accord, however, lafl several contentioussharing wtth neighborly stales, contested state borders, and. most importantly. Increased autonomy lor Punjabbe resolvedumber ol commissions, some ofthe new Punjab government has already appointed. Neighboring states have already begun to pressure Gandhi to guarantee ine*r_ equities OS details of the July settlement or* workedHHI

Gandhi also face*continuing challenge from SHth extremist* who. despite the promising Sikh turnout In the Punjab election, remain committed to overturning the accord. They con be expected to continue atrtKing et both Sikh moderate* end Ihe Congress Partyhey hold responsible lor anti-Sikh riots lest November; the bomb attacks toolmrttsar may be the beginningew oxlremlat campaign. The Indians bolleve the threat of an attack against Gandhi himsett or Indian Ina tells lions abroad may be even higher now than before ihe eiectlonM

Gandhi Is calculating mat Ihe moderate Sikhs who now govern Punjab can broaden their support among Puniobis and gradually isolate Ihe radical* while tie commissions deai with remaining Sikh grievances on sharing power and resource* The accord may encounter Its next ma|o>anuary, when the commission on water shoring Is to announce Its ImdngsM

In the meantime, however. If the Punjab governmentiolentoth Congress Party andwai press Gandhi to reinstnule Army pet rots andliberties. They may alsoajor issue of allegedwith the extremist* and demand stronger action toIt

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