Created: 10/6/1983

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National Intelligence Daily (Cable)



Tip timl.


Special Amlyili

IRAQ: Economic Pressures lnltn>lt>


more ard from the Persian Quit superpowers to tto.'iat* hy pe

Iraq'suetion it ataadlly dawtoittng because of the war. Itt two oil exportm Persian Quit ware put out ot commission o, the irmtni early Mine war. and Damaacvt refusal to anew oil deliveries through the Iraq-Syru, pipeline. Oil revenues are now less than one-lhlra ol prewar /are's, fo'C.iflto deplete its loiaign exchange rete/ves ana itesfthe touts cannotay to east man financial paght.i, to attack oil targets in Iron kith* hope ol forcing Tehran to tne nMoSUng fable Tim French Oa**ry ol ti* Superkvafi would greaVr improve ihe regimestrik* Iranian on stooping ana fecHitmt

Baghdad prooetryn Pvox waett ot svzh ittecKi ml prompt

Tna year mas ox income mil total aocul t? Mon.0 Baghdad earned morallHon Iron- Ol exports. Irag'a only crreni out* (or oil aapona ia tr* pkjenre through Turkey, whichuvraia per

Reduced Spending

Iraq's imports Inprobably will dec ne Oy nearlyercent from tba level of SlO billionuch of the drop ls comtio. st the expense of Japan, West Otrmeny. anil Trance. Airesult of oil barter cea's and daisyed payment arrangementi. :raq will be abia todeeper Import cuts tnM |

//Importa from the USSR probably w* approach the level4 batonn oil bane* deal apoaremh/ sdvod the problemaiomp. payment for Soviit military de'lverlu The USSR rs Iraq's

Iraqi private eector anaqi contumer ore bea/tio, the brum of import rsd-ctone Baghdad naaevoJcpment orogram and hailedprelects not rotated tc the we/ or lo the peeroteum sector. Contumer poods, induding fresh procuco, are Increasingly scarcoxj |

Shortafloe have heightened Inllaton and promoted blBCM-market activity. Stricter conlrole on foreign exchange ara contneutirvg tofight of foreign worMere. This hea comr>ounded Iraq's chronlo Bhortsje ol manpowar, which was already mads more acute by the




Firming the telle it

//Iraqttty ao vent tni! MctgM ofe3 won- the Ario aiusjicdthatooian(M

Ki trading porbm. AM from tne Arab ttttte probeeiy wfl

//Saudi Arabia and Kuwait -mcilm of tha* ownratunng from tha mm world oili:iol tha aid in tho form ol oil teste on Iraqi Bar olf. Much of thsbatng uttdoU bariar

Iraqi paymanta art running aa muchut months lata, tnd Btgridad Itlaved payment trrtncorrwntiottmigneat ol tht firmt will agraa to ih* request in ordtr to solvogo what ihty can ol thtlr tJxabft financialrt*q

//MeerrwhHo. Iraqi drawings on lorelgn exchange reetrvet probably will be5 billionurtna the firy. quarter. Iraq drew down retervet by S3 buttonevel oleuon.e war, fotlgn txchinaa aottti amounted toillion.//

New year BaghdiH locet tho prospecturrent account deficit nearly as Irge at thaHllon gap3akes more cuts irrportt,ading partnert and tha Arab statu ol ttsGulf prcOebfy trill not provide Baghdad vrlhfinance support loew round of auatartty

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