(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84S00552R000300070002-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: January 12, 2017
• Document Release Date: July 8, 2011
• Sequence Number: 2
• Publication Date: July 1, 1983
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Directorate of Secret
Intelligence
Kenya-Uganda-Tanzania:
Uneasy Neighbors
Secret
ALA 83-10106
July 1983
310
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Directorate of Secret
Intelligence
Kenya-Uganda-Tanzania:
Uneasy Neighbors
This paper was prepared bye
Office of African and Latin American Analysis.
It was coordinated with the National
Intelligence Council and the Directorate of
Operations.
Comments and queries are welcome and may be
directed to the Chief, Africa Division, ALA, on
Secret
ALA 83-10106
July 1983
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Secret
Kenya-Uganda-Tanzania:
Uneasy Neighbors
Key Judgments Once linked in the. politically promising and potentially prosperous East
Information available African Community, Kenya, Uganda, Tanzania-the key states of East
as of 6 June 1983 Africa-have experienced considerable turbulence at home and in their
was used in this report.
relations with one another in the past few years. Because of past economic
and political relationships-as well as historical jealousies--disruptions in
any one of the countries often affect negatively one or both of the others.
Most recently, developments such as the coup attempt in Kenya last fall,
coup plotting in Tanzania in January, and continuous political violence in
Uganda have damaged regional political relations and further set back
prospects for significant economic cooperation.
Tanzania's left-leaning President Nyerere, who actively supports his old
friend, Uganda's President Obote, is concerned about Obote's tenuous hold
on power and suspects that Kenya is aiding Ugandan dissidents. Obote
shares Nyerere's suspicions and wants the Tanzanian President to reintro-
duce sizable numbers of troops into Uganda to prop up his regime. Kenyan
President Moi is concerned about what he sees as Nyerere's inordinate
influence in Uganda and remains uneasy over reports that Tanzania is
supporting Kenyan dissidents. Moi views the combined forces. of Tanzania
and Uganda as a serious potential military threat to Kenya.
Trade-and other-economic controversies will continue to bedevil region-
al relations. The three states are still attempting to negotiate a settlement
of the financial dispute created by the dissolution in 1977 of the East
African Community, which had provided common services for them. Since
then-all three countries have replaced regional transportation and commu-
nications facilities with expensive national facilities, and Tanzania's clo-
sure of its border with Kenya has forced the three countries to reroute
trade to more distant and expensive markets and sources of supply. Even if
normal trade relations were restored, Tanzania and Uganda probably
would adopt measures to prevent substantial imports of Kenyan goods-at
least for the short term-in an effort to protect their much weaker
economies from renewed Kenyan domination.
We believe the three East African leaders will for now try to prevent a fur-
ther escalation in regional tensions while they concentrate on serious
domestic problems. But as political and economic problems confronting all
three countries continue to grow, we believe old animosities between these
states are likely to resurface, especially if their leaders resort to past
practices of blaming their problems on their neighbors. A successful coup
in Kenya or Tanzania or a further deterioration in the Ugandan security
iii Secret
ALA 83-10106
July 1983
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 situation almost certainly would further heighten tensions, although the
three states' limited military capabilities would make large-scale armed
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
conflict unlikely.
We judge that continuing economic and political strains in the region will
not soon threaten important US military access and economic investment
in Kenya-by far the most important of the three states to the United
States. Still, such strains could precipitate sharply increased demands for
US aid. This is particularly true in Kenya, where perceptions of instability
in Tanzania and Uganda reinforce a traditional sense of regional isolation
and strengthen the inclination to seek increased security aid from the
United States and other Western sources
Finally, and perhaps most worrisome over the longer term, turmoil in the
region could create new opportunities for the Soviets and their allies to
enlarge their influence. The Soviet Union, Cuba, and Libya will continue
to seek opportunities to exploit divisions among the East African countries
to disrupt Western influence. Libya, for example, has reportedly provided
arms and financial support to Ugandan dissidents, and Moscow and Tripoli
will continue their so far unavailing attempts to improve relations and gain
influence in Kenya. Their efforts, however, probably will be circumscribed,
as they have been in recent years, by higher priority interests in other areas
and by the inability to provide significant economic aid.
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Kenya's Security Worries 2
Impact of Ugandan Instability 2
Deteriorating Tanzanian Security 3
The EAC Assets Dispute 4
Factors for Change 8
Libyans, Soviets, Cubans 8
Implications for the United States 9
The Breakdown of Regional Cooperation 11
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
 Secret Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Boundary representation is
not necessarily authoritative.
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
2,ecret
Kenya-Uganda-Tanzania:
Uneasy Neighbors
Introduction
The strategic location of East Africa near the Middle
Eastern oil-producing countries and the sea lanes
through the Indian Ocean and the Red Sea has
elevated the importance of the region in recent years.
Washington has reached military access agreements
with Kenya and Somalia to support an increased US
presence in the Indian Ocean and a new emphasis on
contingency planning for the Persian Gulf area. In
addition, US interest in the stability of the region has
been heightened due to increasing concern over Sovi-
et, Cuban, and Libyan activities in Africa.
Unfortunately, relations among the key East African
countries of Kenya, Tanzania, and Uganda have
become increasingly tense since the late 1970s as a
result of strains over security problems and economic
relations, as well as longstanding personal rivalries
and ideological differences among their leaders.'
These strains have all but eliminated the benefits of
the postindependence period of economic ties devel-
oped during a common colonial period under the
British.'
This paper examines the tensions among the East
African neighbors and their effects on the stability of
the three countries themselves, assesses the prospects
for future regional relations, and reviews the implica-
tions of these developments for other countries con-
cerned with the region, particularly for US interests
in the area.
' See appendix for a detailed discussion of cooperation among the
three countries during the colonial period and the years after
independence, as well as the factors that led to a breakdown of this
cooperation.
Security Concerns'
Since independence in the early 1960s, Kenya, Ugan-
da, and Tanzania have had persistent differences
which occasionally flared into harsh words, saber
rattling, border clashes, and one full-scale invasion.
Founding fathers Kenyatta of Kenya and Nyerere of
Tanzania, for example, were sharply at odds on
virtually every issue that affected the region, and
Kenyatta considered Uganda's Obote to be too heavi-
ly influenced by the left-leaning Nyerere. The eight-
year Amin regime in Uganda further poisoned the
atmosphere in the region as the erratic Ugandan
leader antagonized all of his neighbors. Amin's ouster
25X1
25X1
25X1
LDAI
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Secret Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
by Tanzania's invasion in 1979 and the considerable
Tanzanian influence with the second Obote regime
have fueled Kenyan suspicions of Dar es Salaam's
intentions.
When President Moi succeeded Kenyatta after the
latter's death in 1978, Nyerere apparently expected to
use his position as the region's elder statesman to
improve relations with Kenya by serving as a counsel-
or to his new junior partner. Moi, however, resented
Nyerere's attempt to dominate their personal relation-
ship. As a result, friction between leaders of the two
countries has continued to affect bilateral relations
almost as much as in Kenyatta's day.
Recent internal security threats to all three East
African regimes have increased regional tensions. As
the three East African leaders have become more
worried about internal opposition and economic and
tribal problems, suspicions that their neighbors were
collaborating with their domestic enemies further
strained relations. Declining popular support has also
influenced these leaders to use their neighbors as
scapegoats, thus adding to tensions.
Kenya's Security Worries. Moi's position has clearly
deteriorated since he assumed office five years ago.
Worsening economic conditions-documented in UN
and International Monetary Fund (IMF) statistics-
have played an important role in his loss of popular
support. His worries about internal security have been
triggered by increasing dissent over record rates of
inflation and urban unemployment and periodic short-
ages of consumer goods.
his efforts to expand the influence of his
own relatively small tribe have led to heightened
Moi's effort to patch together a stable regime while
weakening the longstanding dominance of the Kikuyu
tribe was directly challenged by the coup attempt in
August 1982. Although the rebellion of the Kikuyu-
dominated Air Force units was quickly crushed, Moi's
concern over internal dissent remains high.
Impact of Ugandan Instability. Insurgent attacks
that began soon after Obote took office in December
1980 have hampered his attempts to bring Uganda
out of the chronically unsettled conditions of the
Amin regime and the weak interim governments that
followed. The insurgents, who oppose Obote on tribal
or factional grounds, according to reports from the
US Embassy in Kampala, frequently disrupt normal
commercial activity, thereby endangering a fragile
recovery that began after Obote implemented an
economic reform program in 1981. Fighting between
guerrillas and Ugandan troops has increased in recent
months, in part because
the Army is more actively seeking out guerrillas in the
countryside, but also because insurgents have stepped
up attacks against military and civilian targets.
We estimate, that Tanzania,
which sent 40,000 troops into Uganda to oust Amin in
1979, now has only about 50 military advisers in the
country helping to train the Ugandan Army. Despite
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
his concern about instability in Uganda, we believe
there is little chance Nyerere will accede to Obote's
request. Nyerere almost certainly fears that incurring
the costs of a significant military increase in Uganda
would further undermine Tanzania's already weak
economy and his own shaky position at home.
insurgent-leader of the Uganda Freedom Move-
25X1
25X1
We believe Obote's growing concern over security also
stems from his suspicion of Kenyan involvement with
the guerrilla forces.
ment, Balaki Kirya-to Ugandan authorities
Moi's attitude at the time probably reflected his
reluctant recognition that none of Obote's potential
successors seemed capable of developing even the
limited degree of stability that Obote has maintained.
In our judgment,
however, Obote recognizes that his economic depend-
ence on the trade route through Kenya leaves him
little leverage to press Moi to change Kenyan policy
toward the Ugandan rebels.
We believe that Moi is concerned that Nyerere wants
to use his strong influence with Obote to isolate
Kenya, and that this concern was only partially offset
by the departure of virtually all Tanzanian troops
from Uganda at the end of 1981. Moi and other
Kenyan officials would prefer to see a Ugandan
regime headed by more conservative Ugandan exiles
who joined dissident groups after Obote became Presi-
dent. he Kenyans are
particularly close to Yusufu Lule, who succeeded
Amin, but ultimately lost out to Obote in a power
struggle. Lule, who visits Nairobi frequently, is titular
leader of the National Resistance Movement, an anti-
Obote group.
Still, Moi publicly maintained fairly cordial relations
with Obote's government prior to the coup attempt in
Kenya last summer.
1981, Nairobi expelled former Ugandan President
Binaisa for discussing dissident activities with report-
ers even after warnings from Kenyan officials to
desist. Just before the coup attempt in Nairobi, Moi
made another gesture to Obote by authorizing
Kenyan security officials to return an important
Libya, which reportedly has provided cash and arms
to some of the Ugandan dissidents, might gain influ-
ence in Kampala should Obote be overturned by the
After the coup attempt, Moi's mood became more
hostile. His anger over the alleged involvement of
Nyerere and Obote in the plot prompted him to order
Kenyan officials to ease restrictions on the Ugandan
rebels
We have conflicting
information about whether Moi actually authorized a
more direct supporting role, but we believe he consid-
ered at least turning a blind eye to shipments of arms
through Kenya. In recent months, Moi appears to
have backed off from considering more extensive
Kenyan support for Nairobi-based rebels, but we
believe he would be tempted to renew this option in
the event of another serious security threat to his
government.
Deteriorating Tanzanian Security. Nyerere's position
as the unchallenged leader of Tanzania has declined
significantly in recent years, largely as a result of his
unwillingness to modify his doctrinaire socialist poli-
cies. The economic slide caused by these policies has
led to unprecedented criticism of Nyerere and the
25X1
25X1
25X1
25X1
LOA-1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
government. Growing dissatisfaction among all levels
of Tanzanian society has focused on shortages of
consumer goods, major price hikes, rising crime, and
rampant corruption.
This dissatisfaction has also infected the military
where Tanzanian security forces uncovered a coup
plot early this year. The effort to oust Nyerere was
easily put down, but tensions have remained high as
the government has attempted to assuage the military
in general while carefully weeding out potential dissi-
dents.
The plot threatened to fuel regional tensions by
arousing Tanzanian suspicions of Kenyan involvement
with the plotters. Kenya moved troops toward the
Tanzanian border in response to reports about the
plotting-an act that almost certainly heightened
Tanzanian concerns.
Although Nyerere may have been suspicious of
Kenyan involvement, he has decided to pursue better
relations with Moi at least for the moment
Nyerere had an
amicable meeting with Mot at the Nonaligned Move-
ment's summit last March, and animosity between the
two countries has subsided somewhat.
Nevertheless, we believe the present period of relative
good neighborliness between Kenya and Tanzania
remains fragile. For example, Moi ascribed sinister
motives to a visit to Tanzania by one of his political
adversaries in May 1983. Moreover, according to the
US Embassy in Nairobi, Moi and his security advisers
recently indicated their concern that the stationing of
Tanzanian troops near the Kenyan border represents
a serious threat to Kenya's security.
Economic Relations
Economic problems have caused additional frictions
in regional relations. Since the colonial period, region-
al economic ties have been more extensive than
political bonds, and the economic difficulties current-
ly confronting all of the countries have increased the
urgency of efforts to resolve the differences among
them. These efforts have centered on a longstanding
dispute over distribution of the assets of the defunct
East African Community (EAC), a potentially pros-
perous trade, transportation, and communications as-
sociation that broke up in 1977 as a result of Tanzani-
an and Ugandan anger over what they felt was
Kenyan domination and disproportionate benefits.'
We see little hope for a lasting solution anytime soon,
and the lingering stalemate will serve to sustain
mutual suspicions. Even if the EAC dispute is settled,
we believe the larger issue of trade and economic
competition among the former partners will still pose
major difficulties for regional relations.
The EAC Assets Dispute. The World Bank in 1978
appointed a mediator to arrange a financial settle-
ment of the more than $1 billion in EAC assets among
the three parties. At the time of its dissolution,
according to press reports, the EAC also had several
hundred million dollars in liabilities-mainly in the
form of outstanding loans from the World Bank and
various Western countries-but most observers expect
that these would be forgiven as part of a settlement.
The continuing five-year mediation effort has led to
an agreement in principle on the general outline of
financial terms, according to reporting from US em-
bassies in the three countries. Because the largest
share of fixed EAC assets is in Kenya-particularly
the headquarters of the regional airways and rail-
ways-Nairobi rejected demands from Dar es Salaam
and Kampala for a one-third distribution of assets to
each partner. Tanzanian and Ugandan officials
turned down Kenya's counterproposal to divide the
assets on the basis of their geographical location.
EAC activities involved three broad functions: a customs union
that set common tariffs, but did not provide for the free flow of
capital and labor among the three countries; four joint corporations
(railways, harbors, airways, and post and telecommunications) that
were responsible for the entire transport and communications
infrastructure of the region except roads; and 12 cooperative
research institutes that focused on agriculture, medicine, and other
scientific studies. The EAC had legislative and quasi-governmental
functions, with facilities divided among the three countries, but the
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
secret
Kenya has by far the most developed economy in
East Africa, but its performance has deteriorated
badly since the late 1970s. A combination of inappro-
priate government policies and weak world demand
for Kenyan coffee and other export crops has greatly
reduced revenues from the agricultural sector. These
factors have affected Nairobi's international pay-
ments position and have caused Kenya to take deep
cuts in its planned economic development programs.
Kenya remains heavily dependent on Western aid
donors, including the United States, and is currently
seeking additional funding to help it qualify for
continued IMF support while hoping for an economic
turnaround later this year. Donors, however, are
hesitant to commit substantial funds until they see
evidence that Nairobi is seriously working to control
government spending, encourage private investment,
and reduce official corruption. Persistent problems-
a staggering population growth rate of 4 percent and
an inefficient industrial sector heavily dependent on
imports for raw materials and spare parts-combine
to darken any prospects for lasting improvement over
the short term to midterm, unless demand for Ke-
nya's agricultural exports grows substantially
The modern sector of Tanzania's economy, according
to the US Embassy, is on the verge of collapse, with
industry operating at only 25 percent of capacity. A
10 percent drop in foreign exchange earnings from
Tanzania's major agricultural exports-coffee, cot-
ton, tobacco, and sisal-during 1982 made the im-
portation of vitally needed oil, spare parts, and other
goods extremely difficult, and severe management
problems have compounded the difficulties. Real
GDP fell 3.6 percent in 1982 for the second consecu-
tive year. Moreover, the government's negotiations
Negotiators eventually agreed to a compromise for-
mula under which Kenya would owe Uganda as much
as $125 million as part of any settlement, while
Tanzania would come out virtually even. Reports
from the US Embassy in Nairobi, however, indicate
that Ugandan President Obote has been holding out
for more generous terms, and Tanzanian President
with the IMF are at a stalemate; Dar es Salaam also
is encountering increasing difficulties in attracting
support from foreign lenders, who are demanding the
implementation of a tougher fiscal policy. Even the
World Bank-Tanzania's largest source of foreign
aid-has decided to provide no new financial support
until Tanzania comes to terms with the IMF. The
austerity measures required to revive the economy-
whether or not President Nyerere attempts to qualify
for IMF support pose significant political risks.for
the government.
Uganda, under President Obote, is making some
progress toward recovering from the disastrous peri-
od of the Amin regime. The government's 1981
reform package-including a substantial devaluation
of the local currency, the abandonment of most price
controls, and increased producer prices for agricul-
tural goods provided the framework for increased
activity in the private sector as well as for a substan-
tial inflow of Western aid. The most dramatic symbol
of Kampala's improved economic performance was its
ability in 1981 and 1982 to meet its international
quota for coffee exports for the first time since 1973.
Day-to-day economic management is still not easy,
however. Though inflation is subsiding somewhat, it
is still running well above an annual rate of 50
percent. Balance-of-payments pressures remain
acute-the deficit exceeded $300 million last year-
and shortages of raw materials, spare parts, and
consumer goods continue to recur. Security condi-
tions in Kampala and other parts of Uganda remain
uncertain, disrupting supplies from the country's
more prosperous regions and hampering government
efforts to attract much needed private investment
Nyerere reportedly has only reluctantly accepted the
fact that his country will not receive any funds as part
of a settlement.
We believe Kenya's current financial difficulties pre-
clude President Moi's agreeing to make payments to
Uganda. Although the World Bank mediator has
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Secret Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
East Africa Trade as
Share of Total Trade
Kenya
Exports
648
1,183
121
143
19
12
Imports
949
2,060
24
2
3
NEGI. b
Total
1,597
3,243
145
145 c
9
4
Uganda
Exports
353
317
NEGLd
I
NEGLb
NFGLb
Imports
79
395
60
157
76
40
Total
432 c
712c
60,
159 :
14
Tanzania
Exports
460
553
24
16
Imports
573
1,136
60
6
Total
1,033 c
1,689
84,
Millions of dollars.
Less than 0.5 percent.
Totals may not add due to rounding.
d Less than $500,000.
considered alternative forms of payment-such as
allowing Uganda to ship goods through Kenya with-
out paying transportation costs-the region's finan-
cial problems virtually dictate that any settlement
would have to be financed largely by foreign donors.
The three nations almost certainly would come to
terms if Western countries put up the money to pay
Trade Relations. The demise of the EAC has resulted
in declining economic cooperation and disruptions of
trade among the former partners that have hurt the
economies of all three countries. Each has gone to the
expense of building separate facilities and training its
own personnel to staff and maintain airlines, railways,
and communications networks. The financial prob-
lems of all three countries have made it difficult for
them to purchase expensive new equipment, but na-
tional pride has pushed them into courses of action
,that have deepened these problems. All three airlines,
for example, have lost money because of the duplica-
tion of service on air routes both within the region and
Tanzania's decision to close its border with Kenya-
concurrent with the dissolution of the EAC-has hurt
both economies. For example, Kenya's exports to
Tanzania declined from 10 percent of Kenya's total
exports in 1976 to about 1 percent in 1980. Dar es
Salaam was compelled to permit this residual level of
Kenyan imports to meet the requirements of Tanzani-
an firms for badly needed goods. The border closure
forced both nations to reroute major portions of their
trade to markets and sources of supply in more distant
countries at significantly increased transport costs.
Moreover, the move badly damaged Tanzania's tour-
ist industry-an important source of foreign ex-
change-by excluding the many visitors to Kenya's
game parks who previously included Tanzania on
their itinerary.
to cities outside of East Africa.
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Although the recent modest upturn of Uganda's
economy has led to an increase in Kenya's trade with
Uganda'since the demise of the EAC, according to
the US Embassy in Nairobi, poor relations between
the two countries have led to occasional disruptions.
Landlocked Uganda is almost totally dependent on
rail and truck routes through Kenya to send coffee
exports to the port at Mombasa and to bring in most
of its imports. Although Ugandan officials have com-
plained about having to pay what they claim are
excessive transportation costs through Kenya, any
other route would be longer and even more expensive.
During one period in 1980 when relations were partic-
ularly tense, the US Embassy in Nairobi reported that
Kenya temporarily removed armed guards on ship-
ments of Ugandan coffee through Kenya, forcing
Uganda to pay higher insurance costs to cover the
increased risk of hijacking.
Early this year, Kenya temporarily interrupted ship-
ments of refined petroleum products from Mombasa
to Uganda and other African countries. We believe
that Moi, under growing public pressure over his
economic policies and facing petroleum shortages at
home, hoped to gain domestic political support by his
action even though the measure would have deprived
Kenya of vital foreign exchange. Kenyan officials
soon reversed the decision, but the situation has
increased Uganda's concern over the reliability and
security of its oil supplies and prompted a search for
alternate suppliers and trade routes. The US Embassy
in Kampala reports that Uganda would like to import
petroleum through Tanzania and divert other trade
from Kenya to Tanzania, but severe congestion at
Tanzania's ports makes this unlikely in the near
future.
Uganda has maintained close ties with Tanzania since
Amin was overthrown, although economic relations
between the two countries have not been entirely
cordial. Tan-
zania's serious economic problems have led Dar es
Salaam to press Kampala for repayment of the cost of
Tanzania's invasion and the maintenance of its troops
believe Tanzania will continue to press Uganda to
maintain reparations payments, forcing Kampala to
divert scarce resources needed for its own economic
recovery.
25X1
25X1
While all three East African nations would benefit
from a reopening of Tanzania's border and a settle-
ment of the dispute over EAC assets, Kenya would
have the most to gain. Kenya's more advanced indus-
trial sector would immediately benefit from increased
exports, and Kenya would be able to resume its 25X1
lucrative role as an exporter of Zambian goods
shipped through Tanzania to the port of Mombasa
Even if normal trade relations were restored, Tanza-
nia and Uganda probably would adopt measures to
prevent substantial imports of Kenyan goods, at least
for the short term, in an effort to protect their much
weaker economies from renewed Kenyan domination.
Reflecting this concern, Tanzania has refused thus far
to join the Preferential Trade Agreement-a loose
trade association formed in 1981 by 13 southern and
eastern African states-because Kenya is a member.
Over the longer term, however, Tanzania's and Ugan-
da's need for a cheap source of consumer and industri-
al goods would probably reorient their import patterns
increasingly toward Kenya.
Outlook
We believe the leaders of all three East African states
recognize that a further increase in tensions among
them could threaten their already weak individual
positions and they probably will for now seek to avoid
more serious confrontations. The difficult economic
and security problems confronting all three countries,
however, are bringing them into increasingly frequent
competition for aid from foreign donors. As their
political and economic problems grow, we believe old
animosities between these states are likely to resur-
face, especially if their leaders resort to past practices
of blaming their problems on their neighbors.
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Secret Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Factors for Change. We see some possibility that
destabilizing events could seriously affect regional
relations over the next year or two. Moi and Nyerere
both face continuing threats that could lead to further
coup attempts. The ouster of either could, despite the
personal satisfaction of his surviving rival, seriously
destabilize regional relations in the short term.. If a
new regime appeared threatening or was slow to
consolidate its position, for example, its neighbors
would heighten security precautions on their borders.
The three states' limited military readiness and mobil-
ity would lessen chances for large-scale armed con-
flict. But, as past incidents in the region indicate, it is
possible that two sides could stumble into a border
clash or that one of the neighbors could feel compelled
to take action to protect its interests.
Obote's death or ouster-either by a coup or from
expanded attacks by insurgent groups-probably
would generate increased instability inside Uganda.
Tanzania and Kenya would be likely to react first by
trying to arrange for regional cooperation to stabilize
the Ugandan situation, and we believe they might
seek a peacekeeping force sponsored by the UN or the
Organization of African Unity. If mutual suspicions
prevented Moi and Nyerere from cooperating, howev-
er, tensions would increase as each sought to protect
his borders. Although pressing domestic problems
would make Nyerere reluctant to send large numbers
of troops into Uganda again, he might order limited
cross-border operations to prevent fighting from spill-
ing over into Tanzania-a move that Kenya almost
certainly would view with alarm and attempt to
counter with troop movements to the border.
Libyans, Soviets, Cubans. The troubled relations
among the three East African nations raise the possi-
bility that Libya, the Soviet Union, and Cuba will
attempt to increase their influence in the region.
Despite Soviet ties to the Marxist regime in Ethiopia,
Moscow and its allies generally are not now heavily
involved in the area. Libya, however, has provided
military training and financial aid to Ugandan dissi-
dents, and Moscow remains Tanzania's principal mili-
tary benefactor. The Tanzanian Army and Air Force
are largely Soviet-eguiyped
ore over, we believe Cuba, which
offered to send military advisers to Uganda during the
interim period after Amin's ouster, may still be
willing to send such advisers to help Obote's govern-
Soviet and Libyan efforts to increase their influence
in East Africa, however, probably will be limited, as
they have been in recent years, by higher priority
interests in other parts of the world and by the large-
scale assistance which would be required to cope with
East Africa's economic problems. The Soviets and
Libyans also will be hampered by longstanding East
African suspicions of their regional intentions, sharp-
ened by their support for the Amin regime. We do not
expect these factors, however, to cause Moscow and
Tripoli to forgo perceived opportunities to exploit
divisions among the three countries that would pro-
vide them with a better foothold and a chance to
In our view, either Uganda or Tanzania might turn to
the Soviets or Cubans for help if they believe the West
is not meeting their needs or if they see their security
becoming more threatened. Tanzania is already
heavily committed to Soviet military equipment and,
in any case, could not afford the cost of a major
reequipment program from another supplier. We pre-
sume some Ugandan officials may see a need for
security aid from Moscow or Havana as a result of the
withdrawal earlier this year of about 30 of the 100
military advisers that North Korea has maintained in
Uganda.
Libya's past military support for Amin and its in-
volvement with Ugandan dissidents make it less likely
that either Kampala or Dar es Salaam would look to
Tripoli now for substantial help. But we believe leftist
Ugandan Vice President Muwanga, a potential suc-
cessor to Obote, would seek closer ties with Libya, as
well as with the Soviet Union and Cuba, if he came to
power.
25X1
25X1
25X1
25X1
7FX1
25X1
25X1
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Secret
Pro-Western Kenya would be alarmed by any in-
crease in Soviet, Cuban, or Libyan influence on
neighboring governments, or by gains by Libyan-
backed Ugandan dissidents. Such developments
would reinforce Moi's longstanding suspicions of these
powers and strengthen Kenya's traditional sense of
regional isolation. Nairobi would intensify efforts to
safeguard its security, almost certainly by seeking
significant increases in Western military aid.
Implications for the United States
In our view, Kenya is likely to look to the United
States for greater support as a result of rising tensions
with its East African neighbors. Although we see little
likelihood that the key US interests in the region-
military access and economic ties with Kenya-will
be threatened, Moi almost certainly will try to use
Nairobi's military relationship with Washington as a
lever to press for increased US aid commitments,
particularly if, as we anticipate, Kenya's economy
continues to sag. Moi and other Kenyan officials
already have made it clear to the United States that
they believe Kenya is not benefiting sufficiently from
its status as the only staunchly pro-Western country
in the region. We believe Kenya's neighbors have
little capacity to intervene in Nairobi's domestic
politics, but Moi's view that the combined forces of
Tanzania and Uganda are a serious military threat
will provide added impetus to his requests for military
aid
Events in Tanzania and Uganda affect US interests
less directly,but still play an important role in
regional stability. Soviet military aid to Tanzania
gives Moscow a foothold in the region. The growing
difficulties facing the Tanzanian regime could give
the Soviets an opportunity to expand this role. Presi-
dent Nyerere is the chairman and main driving force
of the Frontline States in their confrontation with
South Africa, and the United States has worked
closely with him for years in attempts to achieve
negotiated settlements of southern African disputes.
Uganda, because of its chronic instability, has been a-
continuing source of tensions, and is likely to remain
an inviting target for Libyan, Soviet, and Cuban
meddling.
We believe the continuing economic problems of the
three East African states will prompt them to demand
increased US aid, regardless of what occurs in their
regional relations. Kenya-which views itself as a
special case because of its military access agreement
with the United States-will look to Washington to
influence the IMF to be more lenient in the conditions
required for balance of payments support, as well as
to extend on a timely basis direct bilateral assistance
in the areas of food, private investment, and military
equipment. In addition, all three former EAC part-
ners would expect the United States to join other
Western nations in financing a settlement of the
assets dispute.
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
Secret
Appendix
The Breakdown of Regional Cooperation s
The British developed a measure of unity among their
three East African colonies after they consolidated
their control over the region at the close of World
War I. There were virtually no regionwide loyalties
prior to the colonial period, and the British system of
indirect rule left most local tribal rulers undisturbed.
Nevertheless, a new African elite began to share
similar educational experiences in learning English
and studying the same British political and social
ideas as part of their higher education.
The British set up a number of common institutions
for the region that were continued after the three
countries achieved independence in the early 1960s.
The East African High Commission, established in
1945, had some legislative and governmental func-
tions for the entire region. Included were services such
as transportation, communications, tax collection, ag-
ricultural and industrial research, social services, and
university education. The British also created a com-
mon currency for the region and set up a common
market that allowed for the free movement of capital,
labor, and goods.
Despite the close economic and political relations
among the three East African states, differences
began to develop from the time of their independence
that prevented more extensive ties and threatened
existing institutions. Personal rivalries among leaders
were compounded by budding nationalism and oppos-
ing philosophies of development. Although the three
governments declared in 1963 that they intended to
unite in a political federation, personal rivalries and
nationalist feelings caused negotiations toward this
goal to founder after two years.
Economic relations also began to deteriorate soon
after the three countries gained their independence.
Ideological differences compounded the strong per-
sonal rivalry between Nyerere, who adopted socialist
policies for Tanzania, and former Kenyan President
Kenyatta, who favored his country's free market
orientation. Tanzania and Uganda were jealous of
Kenya because Nairobi's more developed economy
enabled it to dominate the trade relationship. Al-
though the High Commission-renamed the East
African Common Services Organization when Tanza-
nia became independent in 1961-remained in exist-
ence, each of the three partners established separate 25X1
currencies and banking systems and began to restrict
trade by the mid-1960s.
The creation of the EAC in 1967 was an effort to
overcome the growing friction in economic relations
among the three partners, but the new organization
was continually hampered by the same problems that
had affected earlier attempts at cooperation. Because
Nairobi was still able to use its stronger economic
position to export large quantities of manufactured
goods to its partners and to attract considerably more
foreign investment, Tanzania and Uganda renewed
measures to block Kenyan exports. Well before the
formal demise of the EAC, major entities such as
railways and harbors had split into national units
The bitterness among the three partners had become
so great that even the research institutes-the least
controversial element of the EAC-were forced to
wind up their activities along with the rest of the
organization. The centers had been operated by multi-
national staffs and were providing valuable services
for the entire region. Moreover, the regional research
effort had attracted considerable foreign aid from
various donors.
Concurrent with the demise of the EAC in 1977,
Tanzania made the rupture in economic relations with
Kenya more complete by closing its border and
cutting off most trade between the two countries.
Nairobi was particularly alienated because Tanza-
nia's action also blocked Kenya's growing trade rela-
tions with Zambia. The Zambian Government had
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84S00552R000300070002-9
 Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
begun to avoid severe port congestion at Dar es
Salaam by using an alternate trade route by truck
through Tanzania to the Kenyan port of Mombasa.
Border incidents and other security problems among
the East African nations also have damaged their
relations periodically. Tensions increased after Idi
Amin ousted Obote's first Ugandan government in
1971 and began to behave belligerently toward his
neighbors. Nyerere was a strong supporter of Obote
and allowed him to live in Tanzania after his ouster.
The deterioration in relations led to a series of armed
border clashes. Nyerere finally sent 40,000 Tanzanian
troops into Uganda to overthrow Amin in 1979, in
response to the Ugandan Army's occupation of a
small piece of Tanzanian territory.
Kenya's relations with both of its neighbors suffered
as a result of Amin's actions and Nyerere's move to
oust him. Nairobi worried that the unstable Ugandan
regime was a threat to Kenyan security, but tried-
with some success-to maintain normal relations with
Amin. When Amin was overthrown by the Tanzani-
ans, Kenyan leaders feared that Nyerere was trying to
use control over Uganda to isolate Kenya and domi-
nate the region. Deteriorating Kenyan-Tanzanian re-
lations led to an escalation in border incidents, which
previously had involved only minor tribal skirmishes
over cattle rustling.
Despite the tensions, the death of Kenyatta in 1978
and the demise of the Amin regime eventually led to a
new dialogue among East African leaders. Nyerere
believed he could gain influence with Moi because the
new Kenyan leader lacked Kenyatta's stature and
experience. The Tanzanian decision in 1980 to begin
to withdraw its forces from Uganda eased Kenyan
concerns somewhat about Nyerere's intentions, in our
view. Moi agreed to participate in a series of summit
meetings with Tanzanian and Ugandan leaders dur-
ing 1980 and 1981 that focused mainly on regional
efforts to improve Uganda's security, and subsequent-
ly has met individually with both Nyerere and Obote.
Reporting from the US embassies in the three coun-
tries indicates that while the meetings promoted some
improvement in personal relations among the East
African leaders, they did little to resolve substantive
differences.
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
 Secret Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9
Secret
Sanitized Copy Approved for Release 2011/07/08: CIA-RDP84SO0552R000300070002-9