JPRS ID: 9765 USSR REPORT MATERIALS SCIENCE AND METALLURGY

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• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000400060004-7
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• Document Creation Date: November 1, 2016
• Sequence Number: 4
• Content Type: REPORTS

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JPRS L/ 10027
5 October 1981
- ~1ear Easfi ~lorth Africa Re ort
, p
CFOUO 34/81)
,
FB~$ FOREIGN BROADCAST INFORMATION SERVICE
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NOTE
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other characteristics retained.
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Unfamiliar names rendered phonetically or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
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Other unattributed parenthetical notes within the body of an
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The contents of thi~ publication in no way represent the poli-
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JPRS L/10027
5 October 1981
NEAR EAST/NORTH AFRICA REPORT
(FOUO 34/81)
CONTENTS
IRAN .
Italian Magazine Interviews Mojahedin's Rajavi
(Mas'ud Rajavi Interview; EUROPEO, 14 Sep 81) 1
Milan Paper Interviews Bani-Sadr on Iran's Future
(Abolhasan Bani-Sadr Interview; CORRIERE DELLA SERA,
18 Sep 81) 3
LIBYA
Briefs
Municipal Sewage Systeris 7
New Supermarkets 7
Economic Ties With FRG 7
SUDAN
' New Budget Discussed; Surplus Predicted
(MARCHES TROPICAUX ET MEDITERRANEENS, 14 Aug 81) 8
Petroleum Outlook Reviewed
(MARCHES TROPICAIJX ET MEDITERRANEENS, 21 Aug 81) 10
Briefs
Investment Projects Planned 12
Peanut Processing Plant 12
New Fertilizer Plant 12
Recurd Sorghum Harvest 12
Cotton for Medical ~'urposes 13
UNITED ARAB EMIRATES
Latest Five-Year Plan Discussed
(AL-WATAN AL-'ARABI, 17-23 Jul 81) 14
- a- [III - NE & A- 121 FOUO]
FnR f1FFTrieT IfCF f1Ni.Y
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IRAN
ITALIAN MAGAZINE INTERVIEWS MOJAHEDIN'S RAJAVI
PM210841 Milan EUROP~O in Italian 14 Sep 81 pp 30-31
[Interview with Iranian Mojahedin Leader Mas'ud Rajavi by Langranco Vaccari:
"Unti.l Last Mullah Falls"--date and place not specified]
[Excerpts] "We are not terrorists. Terrorism is pract~.ised by Khomeyni, that
bloodtrirsty old man who belie~~es that he i~ God on earth and who has suppressed
all freedoms in Iran. Our artivity is resistance: It you know of any other way
of opposing a dictatorsha.p let us know; we will be very grateful to you."
"For the first 2 and 1/2 years of the revolution," Rajavi said, "we acted like
Jesus Christ and turned tiie other cheek. Now, however, the time has come to resist
- the dictatorship with every available means." The resistance has a date of birth;
- 20 June this year. On that date the Mojahedin organized a major demonstration in
Tehran in support of President Bani-Sadr, who was being subjected to heavy attacks
by the ayatollahs and tY:reatened with trial by parli.ament. The first (and last)
democratically elected president of the Iranian Islamic Republic lost his post
- 48 hours later. But that very meeting laid the foundations for the only credible
alternative to the Shi`ite clergy's power.
The alliance between Bani -Sadr and Rajavi ~s ratified in a letter. "The unity
of action between ourselves and the president is not within the framework. of a
single par.ty, but within an al~grnnent headed by the National Resistance Counc~l,"
the Mojahedin leader explained. The front has also been joined by Adolrahman
Qasemlu, leader of the Kurdish Democratic Party, which controls Iranian territory
along the border with Turkey and Iraq. The Kurds have a radio transmitter from
which the Mojahedin broadcast, too.
- ~ Another group close to the Mojahedin is a sector of the Shi'ite clergy, the one
which follow~d Ayato]_lah Taleqani, who died of a henrt attack in September 1979
a few months after the victory of the revolution. After KhomeS~ni, Taleqani
i enjoyed the greatest popular.ity among the Iranian masses. A strong opponent of
- Beheshti and of the mullahs who wanted to monopolize power, he was the Mojahedin's
_ great prote~tor.
The ayatollah`s death marked the progressive ostracization of Rajavi's organization
which, together with the Feda'iyan-3 Khalq (Marxists-Leninists), had been thE major
- protagonist of armed opposition to Reza Pahlavi. The "Hezbollahs" (extremist.s)
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began to attack their headquarters until in June 1980 the Mojahedin's political
activity was banned and their newspaper closed down. It was not difficult to
= repress them. Rajavi admitted: "We had no working mass organization and our
- following was relatively small."
The Mojahedin also paid for the absence of any major political leader. This also
explains the alliance with Bani-Sadr, the only popular reference point for the
opposition to the Khomeyni regime. The ideological outlook invoked by both Rajavi
and Bani-Sadr is rather vague, so as not to prompt conflicts: A mixture of Islam,
socialism and thrid worldism. The only clear objective is that they both want to
establish in Iran "a regime that will observe democracy and human rights."
"The agreements between us and the president are clear," Rajavi said. He holds
- the post of prime minister in the National Resistance Council while Bani-Sadr :ias
maintained the title conferred on him in February 1980 by 11 million Iranians.
"4Je do not want to govern on our own and believe that whoever has opposed the
Khomeyni dictatorship will no;. tomorrow refuse the will of the majorit~. When we
signed our agreement we said to each other: `Neither you nor I is the guide.
Neither you nor I i_s innocent. Neither you nor I is above all criticism'."
COYYRIGHT: [1981] Rizzoli Editoriale.
CSO: 4628/4
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IRAN

~
MILAN PAPF.R INTERVIEWS BANI-SADR ON IP.AN'S FUTURE
PM220843 Milan CORRIERE DELLA SERA in Italian 18 Sep 81 p 3
[Interview with ~ormer Iranian President Abolhasan Bani-Sadr by Renato Ferraro
at Auvers-sur.-oise; undated: "Khomeyni Will Fall; I will Return To Iran"]
[Excerpt] Paris--"The Khomeyni regime cannot survive ].ong," Bani-Sadr said, "but
- it i~ clifficult to specify when it will collapse."
[Question] Som~: 6 weeks ago, just after your arrival in Paris, you told CORRIERE
DELLA SERA that- you could not yet explain the real reasons for your flight from
Iran. "You wi11 understar.d soon," you said. Can you reveal these reasons to us
now?
[Answer] No, it is too early.
[Question] When do you expect to retuin home, or at least at what stage in the
struggle?
[Answer] I do not yet know: I will return when my presence in Persia wi1J. be
most useful.
[QuestionJ What control do you exercise over the current guerri'_la fighting and
over the terrorist attacks that hit the regime every day?
[Answer] Firs~, it is not terrorism, but a liberation struggle and second, I
exert absolutely no control. It is Khomeyni who controls the guerrilla campaign:
it originated as a reaction against repression, the summary trials and the execu-
tion of children guilty only of distributing leaflets. The ayatollah can arrest
the guerrilla f ighters, just as he prampted their action, as long as he observes
the democratic rules that he himself declared during his weeks in exile in Paris.
[QuestionJ Will further lcillings of religious leaders suffice to defeat the
extremists or can Khomeyni replace the casualties?
[Answer] The members of the government already killed were incompetents and have
- been replaced by individuals equally incapable of governing the nation. Khomeyni
will f ind no shortage of. impostors: There are plenty of them among his clergy.
However, the attacks show the people that the opposition is strong and well
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or~;anized and that it has infiltrated everywhere. This is sufficient to dissuade
many people from embracing Khomeyni's cause and to give courage to eur sympathizers.
The demonstrations against the new dictatorship are multiplying throughout Iran
and it is not only the Moj ahedin that are taking part in them.
[Question] If the attacks are not enough to bring Khomeyni down what will cause
his collapse?
[Answer] ide are counting on the spread of popular protests and the collapse of
the economy. Inflation has topped SO percent, unemployment is effectively total,
because Persia produces nothing, and the state's coffers are empty. Hitherto the
extremists stifled dissatisfaction through a policy of subsidies, salaries paid to
Tdle workers and useless bureaucrats and vast recuritment into the public administra-
tion. Thus the state deficit has grown: when the shah was overthrown the deficit
had reached $4 billion; this year it is $18 billion.
The government has had to spend its currency reserves, but they are running out.
'To deal with the situation the extremists planned to export 2.5 million barrel.s
of oil a day, but instead in the fir5t 4 months of 1981 they sold only 700,000-
800,000 [a day], while the present figure is only barely 1 million. When the people
no longer have enough to satisfy their hunger Khomeyni wi11 fall.
[Question] The economic picture which you draw seems to doom the clerical dictator-
ship to an imminent end, but this analysis and these forecasts have already been '
made and events have disproved them. The extremists have managed to create a
"hidden" economy and policy, thus surviving the economic, social and institutional
_ decay, not to mention the uprisings in Kordestan and other provinces and the war
with Iraq. Despite all this, they can still mobilize the crowds.
[Answer] Lebanon too still exists after so many years of civil war. It is a
- matter of seeing whether the Persian people will accept a future of poverty,
bloodshed and repression. I do not believe so: Khomeyni can no long~r bring
millions of people into the streets of Tehran. He can only mobilize a few hundred
thousand of them. Only about 15 percent of the Persian population still obey the
ayatollah.
[Question] Could the outcome of the war with Iraq be decisi~~e?
[Answer] Neither country can win the conflict or end it with a negotiated solution.
' Both Saddam Husayn and Khomeyni need a success and both have motives for keeping
the troops on the border, far from their capitals.
J [Question] According to some reports Iran is receiving military aid from Israel.
- Are you in a position to confirm or deny this?
[Answer] 1~ is true, but this aid is not decisive: it is sufficient only to
prolong the war of attrition, in accordance with U.S. plans.
[Question] U.S. plans?
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[Answer] Sure. Reagan nurtures foreign and domestic conflicts in expectation that
the extremists and leftwing forces will eliminate each other. When Persia is
- exhausted the Americans will intervene to facilitate a Bonapartist solution, so
as to impose on us an Islamic dictatorship like Pakistan's or a military one like
Turkey's, but in any case a pro-Western one. Washington cannot tolerate democracy
. in an; country bordering on the USSR. It maintains that only dependent, and
therefore illiberal, countries can guarantee the West's strategic interests.
[Question] Is there not a danger of the USSR taking advantage of the anarchy
, in Iran to occupy its northern regions?
[Answer] I do not believe so. A world war would break out.
[Question] Might the Persian military attempt a coup?
[Answer] They are hostile toward the regime, but as long as they are delayed at
the front they can do nothing.
[Question] Is the entire clergy with Khomeyni?
[Answer] No, the iman has many opponents even among the major ayatollahs, the
ones with the largest popular following, but the~ lack the c~urage and ~erhaps
the ability to oppose the repression.
[Question] That shows that Khomeyni is strong. What are liberals such as Bazargan
_ and Qotbzadeh doing?
[Answer] They remain silent; they can do nothing else. They would be eliminated
at the first protest.
[Question] What about the powerful traders of the bazaar?
[Answer] They are becoming wealthy because they control foreign trade in a
country that must import everything.
[Question] In other words, for the time being virtually only the Mojahedin belong
to the National Resistance Council which you head. How do you define the ideology
and plans of this movement, which you have condemned in the past?
[Ans=aer] I have publicly admitted that I misinterpreted their ideology. I was
afraid that they were tainted by Marxist materialism. Instead they reject the
dialectical method and are real Muslims inspired by the unitary Towhidi philosophy,
which does not recognize the classes and the class struggle. Their program, like
mine, can be stmm~ed up as follows: National independence, nonalignment, democracy
based on the "councils" (the Islamic grassroots organizations), a self-managed.
economy at the workers' service, the liberation of the oppressed in Iran and through-
- out the world, the struggle against the westernization of Persian culture and the
creation of the Muslim "new man."
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[Question] It is clear that the Islamic le�t, on its own, cannot guara~'~ee a
stable government alternative. What other forces and interests can ral.ly round
the Mojahedin, not only during the anti-Khomeyni struggle but also subsequently,
during the receastruction phase? It does not seem that the Bazarg~n-style liberal
conservatives or the Marxists or� the technocrats could follow you.
[Answer] We Muslims do not reason in terms of class and interests or in exclu-
sively po].itical terms, but rather in terms of the fundamental unity ot society
as a reflection of the oneness of God. We are counting on the support of all
democrats, whether Muslims or nonbelievers, of clerics and laymen, to save the
- country from disascer_
~
COPYRIGHT: [1981] Editoriale "Corriere della Sera" s.a.s.
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LIBYA
BRIEFS
_ MUNICIPAL SEWAGE SYSTEMS--Tripoli's secretariat for light industry will be accept-
ing 6ids up to 15 October 1981 for the construction of sewer mains in several muni-
- cipalities. Specifications can be obtained in Paris through the CFCE [Council of
Commercial Federations of Europe] (Te. 505-37-86). [Text] [Paris MARCHES TROPICAUX
ET MEDITERRANEENS in French No 1865 7 Aug 81 p 2047] [COPYRIGHT: Rene Moreux et
Cie Paris 1981] 9516 '
NEW SUPERMARKETS--New retai.l marketing establishments are continuing to open in
Libya, in accordance with the distribution policy of the authorities. For example,
on 30 June, at Ain Zara, the "First Flash" supermarket was officially opened, in
the presence of the Tunisian minister for economic affairs, Mr E1 Azram, who was
visiting Libya. This supermarket covers a total of 2,050 square meters and carries~
the most diverse products, fram food products to household electrical appliancps..
- Also, the same day, a new market was opened in Agedebia, in the Mrada region;
where the National Marl~et Campany has recently built eight of them. [Text] [Paris
MARCHES TROPICAUX ET MIDITERRANEENS in French No 1864 31 Jul 81 p 1990) [COPYRIGHT;
Rene Moreux et Cie Paris 1981] 9516
ECONOMIC TIES WITH FRG--Libya has asked West Germany to contribute to the training
of specialists in all fields of economics. The question was discussed 7 July in
Bonn by a Libyan Goverrunent delegation received at the West German economic affairs
ministry. The "number two" of the Libyan regime, 'Abd-al-Salam Jallud, had arrived
the previous day for a two-day private visit to Bonn. The two sides also studied
the possibility of increased cooperation between the industries of the two countries.
On the other hand, no progress was made concerning a new convocation of the G~rman-
Libyan joint economic commission, which should have been held last March. It was
postponed at Libya's request. Libya is the FRG's second largest oil supplier.
Trade between the two countries favors Libya to the tune of about $2 billion. Maj
Jallud, who had two long talks with the West German minister of fore~gn affairs,
Hans-Dietrich Genschery during his stay in Bonn, had been in the German capital in
1972 on an official visit. [Text] (Paris MARCHES TROPICAUX ET MEDITERRANEENS in
French No 1865 7 Aug 81 p 2074] [COPYRIGHT: Rene Moreux et Cie Paris 1981] 9516
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SU~AN
NEW BUDGET DISCUSSID; SURPLUS PRIDICTED
Paris MARCHES TROPICAUX ET MEDITERRANEENS in French No 186~6-, 14 ,Aug 81 p 2103
[Article: ''Sudan's 1981-1982 Budget Is Tn Surplus"]
[Text] The Republic of Sudan's projected 1981-19g,2 bu.~dgpt has been set at 1.731
million Sudanese pounds in estimated receipts (npPx~a~ing f~unds) and 1.568 millior;
in estimated expenditures which includes 1.042 mn~li~on in ccperating expenditures,
476 millior~ in development expenditures and 50 million in acquisitions of holdings
and investments. This budget compares with the tWa pr~vious ones as foilows:
(figures in millions of Sudanese pounds)
1979-1980 1980-1981 1981-1982
Operating Funds 912 1,005.6 1,731
Operating expenditures 82.0.3 942.6 1,042
Developme~t budget 2ffi5 329.9 476
Acquisitions of holdi~.gs ~0 75 50
and investments
Total Expenditures 1,125.3 1,347.5 1,568
Gross budget surplus or deficit -213.3 -342 .+163
Borrowing from the banking 120 132 -
system
External f inancing 93.3 210 -
Operating funds show a marked increase by comparison to the previous period (up 72
percent in current money). This situation is due to new receipts being created. �
Total expenditures are growing at a much more modest rate (16 percent in current
money), and that total represents, taking in account inflation on the order of
SO percent, a reduction of 22 percent.
For the f irst time in many years the budget projects a gross surplus. This policy
fits in with the gover~ent's anti-inf lation concerns and the T1~'s [International
_ Monetary Fund's] recommendations.
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Except for some new measures, the 1981-1982 budget is a logical follow-on to the
preceding year's budget. The basic concerns of the Sudanese Government indeed
still remain the determination to curb inflation and the continuation of the pro-
gram of economic stabilization and financial reform instituted in September 1979.
The struggle against inflation is being carried out via: a reduction in govern-
ment expenditures; a budget with an outstanding balance on the plus side; a reduc-
tion in customs duties on certain ordinary consumer goods; honest pricing in order
- to checlc an expanding black market; an increase in direct taxation; the elimination
of public sector monopolies in production and importation; and the encouragement
of savings by the establishment of Treasury bills.
On the r,.:.:~ hand, the government has "deregulated" credit for small producers to
a certain extent. Through specialized banks (the Industrial Bank, the Real Estate
Bank, and the Cooperative Bank) the Public Revenue Department will guarantee up to
80 percent of loans requested by small producers.
The continuation of the program of economic stabilization and financial reform is
being carr ied out by consolidating the unofficial exchange market, liberalizing
external commerce, and reviving large projects before launching new ones.
Regarding the development btidget, the breakdown of that item is a good illustra-
tion of the government's pri.orities; 22 percent is going to agriculture, 25 per-
cent to energy, 17 percent to transportation infrastructure, 14 percent to regional
development, 9 percent to social services, and only 7 percent to the indu~trial
sector (6 percent does not have a f inalized allocation).
COPYRIGHZ': Rene Moreux et Cie Paris 1981.
9631
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SUL'AN
,
PETROLEUM OUTLOOK REVIEWID
Paris MARCHES TROPICAUX ET MIDITERRANEENS in French No 1867, 21 Aug 81 p 2157
[Text] Sudan's Ministry of Energy has let it be known that the country will reach
oil self-sufficiency in 1983. But this forecast is not unanimously agreed with in
Khartoum,
The Chevron company, for which the development of the Unity field still poses
_ numerous technical and financial problems, refuses to make any forecasts, but to a
certain extent so does the Sudanese Goverrunent which is anxious not to hamper the
- painstaking efforts undertaken towards establishing agriculture.
In actual fact, diff erent contradictory assessments are circulating in Khartoum,
differing according to where they originate. To simplify matters extremely one can
accept on the one hand an estimated production figure of 15,000 barrels/day--half
of current consumption--as the most realistic f igure for 1983, but also an anti-
- cipated amount of 150,000 barrels/day of reserves as the hypotr~etical profit basis
which motivated the recent rushing in of oil companies.
The Wor1d Bank, Chevron--a subsidiary of Standard Oil of California--, and the
Sudanese Government will be f inancing the main part of the Kosti refinery the
estimated cost of which, including the 550 lan of oil pipeline, will be $300
million. These f inancial negotiations should rapidly be coming now to a success-
ful conclusion which will p ermit the refinery--25,000 barrels/day--to be linked up
- to the three Abu Jabiral~, Unity and Sharif fields which are some 550 km away and
are being worked by Chevron.
Chevron discovered the fields located around Unity and should rapidly be~activating
them while continuing exploration over areas which exceed 277,000 square km in the
_ south-central part of the country. Chevron will also be active in transportation
and ref ining. A number of other American and inter.national companies (Texas
Eastern, Union Texas, Phillips, Agip, Transpacif ic, Eastern Petroleum and Burma
Oil) have obtained permi.ts and started up operations over nearly the entire terri-
tory of Sudan, including the Red Sea.
Regarding French companies let us recall that the CFP [French Petroleum Company]
Group is involved in certain transport and distribution sector activities (renova-
tion of the Port Sudan-Khartoum oil pipeline and Total service station network)
- and since 1980 has started off on a prospecting program in Sudan on land and sea
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6~OR Oi~FICIAL L'S~' (lNL1~'
in association with International Energy Development Corporation and its official
Sudanese partner, the Public Petroleum Corporation. Under permit A Total is
carrying out operations; a first well has been drilled in the Red Sea and a second
- drilling operation is anticipated for autumn 1981. The drilling will be done 130
meters deep from the Pelican, a dynamic positioning ship. Under permits B and C,
210,000 square l~ covered by permit which ure located in the southern part of
Sudan (interior basin) are to be blanketed by seismic, gravity, and magnetic
field measurement operations; Total is carrying out operations under permits B and
C as well.
Elf Aquitaine, a late arrival, will probably negotiate an association contract
with an American group.
COPYRIGHT: Rene Moreux et Cie Paris 1981.
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SUDAN
BRIEFS
- INVESTMENT PROJECTS PLANNED--In Khartoum people recall tha.t last year following a
change of managing director the Emirates and Sudan Investment Company (ESIC)
= broke off previously embarked on negotiations by mutual ag reement for two sizable
projects and it called for international tender offers last October. The con-
sider.ation of proposals for the first project, setting up a poultry farm in Jebel
Aulia near Khartoum, permitted two unspecified but non-French f irms to be lcept in
the ri~nning. On the other hand, as of the beginning of May the second project,
the construction of a 250-room hotel in Port Sudan, had not been opened up for
_ bids. The ESZC is pursuing two other projects, setting up a bank in Khartoum and
forming a company for air transport between Sudan and the Gulf, It seems that the
ESIC has obtained an authorization fram the Sudanese Ministry of Finance to
establish a bank locally and put in only half of the $20 million capital which is
ordina.rily r~quired. Talks with the Bank of India are under way to let the
latter have 40 percent of the shares in return for paying in $4 million of the new
bank's capital. In addition, the ESIC and Sudan Airways are studying a plan to
set up a joint venture for air transport between Sudan, the Gulf, and Saudi Arabia.
[Text] [Paris MARCHES TROPICAUX ET MIDTTERRANEENS in French No 1865, 7 Aug 81
p 2047] [COPYRIGHT: Rene Moreux et Cie Paris 1981.] 9631
PEANUT PROCESSING PLANT--The British company Gunsanrs Sortex has won a contract
for supplying equipment for processing peanuts for eating. The equipment is for.
- the f actory built by the Sudanese firm Shaikh Mustafa E1 Amin and Sons in Port
Sudan. This contract amounts to about $4.2 million. The British firm had al-
ready supplied similar equipment to the Sudan Oil Seeds Company. [Text] [Paris
MARCHES TROPIeAUX ET MIDITERRANEENS in French No 1865, 7 Aug 81 p 2047] [COPYRIGHT:
Rene Moreux et Cie Paris 1981,] 9631
NEW FERTILIZIIt PLANT--In E1 Shajarah the construction of a fertilizer plant, the
_ total cost af which will be $120 million, has begun. Production should be starting
up next year and rP.ach 100,000 tons of urea fairly soon and 200,000 tons later on.
At that time S~anese needs will be met completely, jText] jParis MARCHES
TROPICAUX ET MEDITIItRANEENS in French No 1865, 7 Aug 81 p 2047] [COPYRIGHT:. Rene
Moreux et Cie Paris 1981,] 9631
RECORD SORGI-NM HARVEST--The Sudanese sorghum harvest for 1981 should re.ac.h a
record 1eve1 of 2.8 million tons, which is an i.ncrease of SS percent compared to
last year. [Text] [Paris MARCHES TROPICAUX ET MEDITERRANEENS in French No 1865,
7 Aug 81 p 2047] [COPYRIGHT: Rene Moreux et Cie Paris 1981.] 9631
~
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ro~ or�r~c~Ai. [JSC c~yt.v
COTTON FOR MEDICAL PURPOSES--The French economic expansion offices in.Khartoum
have informed the CFC:E [Council of Commercial Federations of Europe] of a request
coming from a Sudanese investor poctor Gabbani, who wants to set up a factory to
make cotton for medical purposes and sanitary napkins, to consist of: 1) a
facility for absorbent cotton rea.dy to begin production with a production caFacity
of 400 kilograms o~ c"`~on an hot~r (3000 tons a year), and 2) a unit for producing
sanitary napkins and compress pads for hospitals. (Initial capital: 2 million
- Saudi riyals). The plants would be f inanced by a Saudi group and a Sudanese
group. French cumpanies interested in these projects can obtain any additional
information at CFCE/SIPF/1/4175; telephone SOS-33-33. [Text] [Paris Mt1RCHES
TROPICAUY ET MIDITERR.ANEENS in French No 1867, 21 Aug 81 p 2157] [COPYRIGHT: Rene
Moreux et Cie Paris 1981.] 9631
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F'OR OFFIC'1.41. l'SE ONLI'
UNITED AR?,B ~MIRATES
LATEST FIVE-YEAR PLAN DISCUSSED
Paris AL-WATAN AL-'ARABI in Arabic No 231, 17-23 Jul 81 pp 52, 53
LArticle: "Economic Growth Continues But Problems of Inflation, Foreign Labor,
and Duplicati.on of Projects Cause Concern; United Arab Emirates: $50 Bzllion To
Finance Development Plan"/
LText/ As the movement toward unification and merger in the Ut1E gains momentum,
the burdens imposed on the general budget and the new 5-year plan (1980-1981) are
increasing. The goal is to eliminate the chaotic planciing and duplication of
projects which marked the 1970's and check inflation and the influx of foreign
labor in the 1980's.
The UAE looks toward its future with a mixture of hope and wariness--hope in the
ability to sustain its economic expansion and growth and anxiety over an influx
of f~reign labor which has been so sizeable that UAE citizens now make up only
- one-quarter of the population.
Hope in the ability to control the economy and st-rengthen the process of inerger
and coordination among the emirates had revived after Abu Dhabi and Dubai--the
foremost and wealthiest of the emirates--agreed to allocate half of their incomes
to the federal budget. This devel~pment is helping considerably to steer the UAE
away from the chaotic planning and duplication of n?-~jecr_s which characterized
the economic expansion of the 1970's.
- Commenting on this optimism, reports of ttie Central Bank point to the potential
for increasing oil revenues and expanding industrial investment. However, they
also warn against growth in imports and rising inflation rates resulting from
iiistability in world markets.
At Lhis point, it might be helpful to record some general impressions aUout the
future foreseen for the i.1AE's economy:
--It is a certainty that the. I1Ali wi11 continue to rely on oil as a source of
income and economic growth. For this reason, ther.e is a clear movement in the
state toward gaining control ovcr oil operations. The sL-ate presently owns
- 60 percent of the domestic prcduction companies and the foreign production com-
panies (American, Dutch, British, and Japanese). It suspects that the foreig~~
companies are seeking to expl.oit the oil �ields to the greatest extent possible
without directing much aetenti_on to oi.]. exploration operations.
_ 1.1~
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- --Economic growth is expected to continue in the first half of the 1980's. The
growth rate reach~d 7 percent in the period from 1976 to 1980.
In the judgment of officials, this growth is based on two factors. These are
continued economic stability and the continued influx of oil revenues. Oil
revenues are estimated at $18 billion for this year as opposed to around $20
billion last year and $12.5 billion in 1979.
--The growth of imports is causing concern. The figures indicate that this
growth is not so much in the volume of goods, materials, and equipment as in
the prices of these items, with inflation playing its tragic role.
The value of imports rose from $7.22 billion in 1979 to $8.71 billion in 198J.
This figure is expected ta reach $10 billion this year.
- --There is a movement toward diversification of income sources through the
establishment of a tremendous industrial base. The fact is that industry is
seen as a problem. On the one hand, it reduces dependence on importation and
provides opportunities to invest oil revenues domestically. However, it also
creates problems and difficulties such as the labor crunch, which requires that
tremendous numbers of foreign workers be accepted along with the serious negative
effects of this immigration on the Arab identity of the society.
In addition, the UAE does not own any industrial raw materials with the exception
- of oil and gas. Moreover, domestic markets are not available. This raises the
question, What will be the future of, for example, the petrochemical industries
after the depletion of these two raw materials?
Based on this consideration, some individuals call for the reduction of oil
production and tlie continued investment of the surplus from past revenues in
foreign countries rather than in domestic industrial expansion.
In spite of these objections, industry continues to grow, attracting more of the
private seetor day by day. The volume of loans from commercial banks to the
private industrial sector rose from 4.8 percent in 1978 to 6.7 percent in 1980.
The 5-year plan (1981-1985) aims at raising industry's share of the national
income. This share was 5.5 percent under the previous plan (1976-1980).
Abu Dhabi is building itself a huge industrial base in the area of al-Ruways,
which is gradually being transformed into a true industrial city. The industries
there include a new oil refinery whose refining capacity will soon be increased
from 120,000 to 300,000 barrels per day, a$2-billion gas liquefaction complex,
_ and a $200-million fertilizer complex.
~
_ As for the Emirate of Dubai, it has established a tremendous industrial base in
the Jabal 'Ali area, including a$1.4-billion aluminum complex. The emirate has
also constructed a huge port and a dry dock which is not yet in use. It is
expected that the dry dock will be turned over to OAPEC.
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However, the industrial projects in the emirates suffer from duplication and
lack of coordination. Thus, identical or nonprofitable industries have been
established in some cases. The steel plant is the best recent example of this.
_ The private sector is showing increasing interest in industrial projects. However,
the g.reatest interest is still directed toward the commercial field due to a quick
- return on investments and easier work in this area.
--Greater attention will be focused on the control of financial and investment
policies. This has been demonstrated by the establishment of the Central Bank
and the reorganization of the banking sector. Othar indications are the curb on
the opening of foreign bank branches, the efforts to stabilize the dirham, and
the attempts to fight inflation, which is running at an estimated 20 percent per
year.
--The inflation in the budget figures reflects the coordination of the move
toward federation. The budget reached the $7-billion mark in the current fiscal
- year, which represents a 60 percent ircrease over the 1980 level. Some $500 .
million has been allocated to subsidize basic provisions and consumer goods for
the benefit of low-income citizens. The country has witnessed strikes by employees
protesting the rising cost of living.
--The expansion of the public industrial sector and the intensification of the
_ trend toward federalism impose additional burdens on the government administration
sector, demanding that this sector exhibit greater efficiency. However, the chief
obstacle remains the po~aers wielded by the local administrative organizations
within each emirate.
Features of the New 5-Year Development Plan
The negative effects of the lack of planning or the chaotic nature of planning in
the past have nr~w begun to emerge through the duplication or multiplicity of pro-
jects, which far exceed the need. Such projects include airports, ports, hotels,
banks, and even radio and television stations.
The aim of the new 5-year plan (1981-1985) is to endeavor to achieve the greatest
possible coordination among the similar industrial projects that have been estab-
lished in the emirates while allowing for continued economic growth but without
any increase in foreign manpower.
The manpower problem deserves individual attention in view of its magnitude and
the multiplicity of views surrounding it. Here it can be said in short that
officials and planning experts attach great importance to programs aimed at
' training and qualifying citizens in order to limit the importation of foreign
labor. They also favor putting pressure on the sectors that require large
numbers of foreign workers, such as the construction sector.
Hocvever, powerful businessmen have in the past opposed and continue to oppose any
move to limit the importation of labor Uecause they feel that such a move would
limit future econamic expansion and growth.
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The allocations of the new 5-year plan--which has not yet been announced official-
ly--are estimated at $50 billion in contrast to the $38 billion allocated in the
previous plan. The private sector will bear about one-fifth of the costs of the
plan, with expected private-sector investments of $8 billion.
It is expected that b:t~:~:~an $IO and 14 billion will be spent on oil exploration
operations, gas liquefaction and exploitation, and expansion of the petrochemical
industry. Non-petroleum industries are expected to grow at an annual rat~ of
18 percent.
Industrial manpower will increase since plants will add 25,000 new workers. '
On the other hand, the number of workers in the construction sector will decrease
by around 50,000 workers. Most of these will be Asian workers who will retur~i to
their countries.
Particular importance will be given to agriculture and food security. Huge food
depositories will bP built to meet the country's needs during unexpected inter-
national crises.
Attentiun will continue. to be focused on the services sector. Health care
allocations will increase at a rate of 50 percent as will education services.
Some 36,000 housing units will be constructed and each citizen will be entitled
to one or two dwellinos.
The plan will address the urgent need to narrow the differences in wealth and
income between rich citizens and poor citizens in the emirates. It will attempt
to do this by working to raise the efficiency and technical and productive
competence of the citizens of the northern emirates and by endeavoring to redis-
tribute investments and establish factories in the non-oil emirates.
Planning at the le�~~1 of the Emirate of Abu Dhabi in particular aims at meeting
the demands imposed by the expansion of the capital during the coming 2 decades.
The population of the capital is expected to reach 1 million by the end of the
century.
Local officials in Abu Dhabi intend to continue with landfill operations along
the ocean in order to confront the demands of building expansion. The city
includes 400,000 dwellings, of which 300,000 are located on the main island.
Population and building expansion will also be encouraged on the islands of
al-Sa'diyat and al-Hadriyat.
In addition, the extension of the island at the beginning of the highway to the
emirate of Dubai will be transformed into a beautiful suburb characterized by
distinctive streets, villas, gardens, and hotels.
COPYRIGHT: 1981 AL-WATAN AL-'ARABI
8591
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