MIDDLE EAST AFRICA SOUTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A000700070002-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 9, 2016
• Document Release Date: May 24, 2001
• Sequence Number: 2
• Publication Date: April 2, 1975
• Content Type: NOTES

Approved For Release 2001/07/30 : CIA-RDP79T00865A000700070002-7 Secret
No Foreign Dissem
Middle East
Africa
South Asia
Secret
116
No. 0670/75
April 2, 1975
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No Foreign Dissem
Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 005827
Exempt from general declassification schedule
of E. 0. 11652, exemption category:
? 5B (1), (2), and (3)
Automatically declassified
on: Date Impossible to Determine
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MIDDLE EAST - AFRICA - SOUTH ASIA
This publication is prepared for regional specialists in the Washington com-
munity by the Middle East - Africa Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
Saudi Arabia: Change of Leadership Points to
More Spirited Economic Policy . . . . . . . . 1
Zaire-Belgium: Mobutu Prepares for Diplomatic
Assault on Brussels . . . . . . . . . . . . . 3
Apr 2, 1975
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SECRET
Saudi Arabia
Change of Leadership Points to More
Spirited Economic Policy
The change of leadership in Saudi Arabia may
mean that the indecision that sometimes characterized
the economic policy-making of the :Late King Faysal
may give way to more spirited economic leadership
under Crown Prince Fahd. Fahd is better acquainted
than was Faysal with the ways of Western business,
more likely to be aggressive and innovative, and
more receptive to the introduction of foreign
technicians. Changes in economic policy are likely
to come gradually, since Fahd and the new King will
be careful not to risk unsettling Saudi society or
weakening the royal family.
Saudi Arabia's gross national product grew at
an average annual rate of 20 percent during the five
years ending in 1973. It quadrupled in 1974.
Foreign exchange receipts from oil in 1974 came to
some $25 billion, only $4 to $6 billion of which was
absorbed into the domestic economy. The remainder
went primarily into government and private invest-
ment in foreign assets and, to a lesser extent, into
foreign aid.
No basic shift in oil policy is expected.
Fahd, who remains chairman of the supreme petroleum
council, will continue to be a major factor in the
formulation of Saudi oil.policy. If Petroleum
Minister Yamani loses his influence or his job, pro-
ponents of restrictions on crude oil production may
gain another hearing. Saudi Arabia in any case will
remain a strong supporter of the Organization of
Petroleum Exporting Countries.
The Saudis will have considerable flexibility
in setting their oil production levels over the
next several years. Any plans for permanent, drastic
(Continued)
Apr 2, 1975
SECRET
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SECRET
production cuts will be tempered by the fact that
industrial projects scheduled for completion in
1980 and later will depend on gas produced in con-
junction with at least 8 million barrels per day of
crude oil. In the interests of flexibility after
1980, Riyadh is seeking alternatives to reliance
on this gas.
Fahd apparently favors investment of surplus
revenues in long-term issues and equity holdings.
This policy, begun cautiously and then accelerated,
will gradually be speeded up. Prince Fahd has a
personal commitment to accelerated economic develop-
ment. He presumably will continue to rely on
technical experts appointed by King Faysal, many of
whom have already worked with Fahd. They will hold
a key role in Saudi economic development.
The new leadership may well be more pragmatic
than King Faysal and will probably accept greater
dependence on foreign technicians. Faysal's resis-
tance to relying on foreigners--he felt they could
have an unsettling effect on his strict Muslim
state--delayed some economic development projects.
A critical part of Saudi Arabia's $60 billion,
five-year development program--the $12.6 billion
plan of the state corporation charged with exploit-
ing petroleum and other minerals--did move ahead.
Under the old regime, contracts were let to Aramco
to construct gas-gathering and electric power net-
works, facilities basic to Saudi industrialization.
Once spheres of influence have been sorted out in
the new government, the new leaderohip may move to
build on this foundation. (SECRET NO FOREIGN DISSEM)
Apr 2, 1975
SECRET
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Zaire-Belgium
Mobutu Prepares for Diplomatic Assault on Brussels
The Zairian government is preparing for another
of its periodic diplomatic assaults on Brussels.
This is a favorite tactic whenever President Mobutu
wants to delay upcoming economic negotiations
between the two countries.
Both governments have been preparing for a
series of ministerial meetings originally envi-
sioned to take place early this spring, but which
will now probably be delayed indefinitely. The
meetings were scheduled to take up the issues of
Zairian compensation for nationalized Belgian
properties and Belgian payments to Zairian veterans
of the Belgian armed forces. At a time when Zaire's
economy is in a serious slump, Mobutu is especially
keen on sidetracking the talks.
Kinshasa opened its campaign in late February
with Zairian press charges that the Belgian ambas-
sador in Kinshasa was hosting "subversive" dinners
during which he predicted Mobutu's imminent fall
and warned that western investors should end their
economic and political support for his regime. The
Belgian government promptly announced its full
confidence in the ambassador.
To add to the Belgian government's bad press
in Kinshasa, the editor of a Belgian magazine pub-
lished in mid-March two confidential Belgian documents,
one discussing aid to Zaire and the other discuss-
ing Mobutu's trip to Peking last winter. Although
neither document appears offensive, the publication of
candid discussions of Zaire by Belgian officials touched
a sensitive nerve in Kinshasa.
The Zairian government is officially ignoring
the Belgian ambassador, thereby depriving Brussels
of an interlocutor to prepare for compensation
talks. Mobutu apparently hopes that Brussels will
(Continued)
Apr 2, 1975 3
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IV
recall him for consultations that will last inde-
finitely. When Mobutu is feeling more secure
economically, he will probably given the Belgians a
signal, the ambassador will return, and negotia-
tions will be set up.
Brussels, however, seems less inclined than in
the past to put up with Mobutu's truculence, largely
because it is anxious to take him to task for
nationalizing Belgian businesses in violation of
the 1969 Investment Code. The code guarantees the
independence of business thatmeet certain capital
investment requirements and are not in competition
with Zairian firms. Moreover, the Belgian public
is losing patience with Zaire's repeated attacks.
The Belgians also would like to settle once
and for all the issue of compensation for the
nationalization of the Belgian owned copper industry
in 1967. Although the issue was theoretically
resolved early last year, Zaire is now defaulting
on its payments.
A number of Belgian officials have indicated
privately to US officials that Brussels will take a
hard line toward Zaire. The Belgian quasi-govern-
mental export guarantee agency announced on March
19 that it was suspending guarantees on exports to
Zaire with the exeption of food and essential
commodities, such as pharmaceuticals.
Past diplomatic tiffs between the two countries
have eventually been resolved, and this one probably
will also be concluded when Mobutu feels he is
ready to negotiate from a position of economic
strength. in the meantime, however, given Belgium's
apparent determination to press on and Mobutu's
need for a longer-than-usual delay, the rhetoric,
particularly from Kinsahasa,could become excessively
shrill. (CONFIDENTIAL)
Apr 2, 1975 4
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Secret
Secret
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