JPRS ID: 8684 NEAR EAST/NORTH AFRICA REPORT

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• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000100090043-4
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• Document Page Count: 44
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• Sequence Number: 43
• Content Type: REPORTS

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26 ! i~T9 t~t~ ~ i OF` i

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H'OR OFFI('IAL US1~: ON1.1' -
,JPRS L/~8684 `
26 September 1 g79
,
N~ar ~ `
East North Africa Re ort
p
_ CFOUO 37/79)
~
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JPR5 L/8684
' 26 5eptember a.979
NEAR EAST/NORTH AFRICA REPORT
(FOUO 37,'79)
CON7ENTS PAGE ~
INTER-ARE1B AFFAIRS
Arab Banks Increase Share of International Market
- (THE r1IDDLE EAST, Sep 79) 1
IRAN
~
Political Turbulence Becomes Endemic
(Fulvio Grimaldi, Fletcher Scott; THE MIDDLE EAST, .
Sep 79) 7
Tabatabai States Position on Minorities
(THE MIDDLE EAST, Sep 79) 12
Ayatollah Demands Justice for Arabs
(THE MIDDLE EAST, Sep 79) 14
Kurds Looking Toward Unity
(THE MIDDLE EAST, Sep 79) 16
Political Strife Splits Parents, Children
(Terry Povey; THE MIDDLE EAST, Sep'79) 17
Nationalized Banks Lack �unds
(R. Mohan; THE MIDDLE EAST, Sep 79} 20
Industry Faces Crucial Questions
(Terry Povey; THE MIDDLE EAST, Sep 79) 21
Steel Targets Reshaped _
(Valiollah Jafari, Soroush Kamyab Interview; THE
MIDDLE EAST, Sep 79) 23 i,
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CONTENTS (Continued) Page
Japanese Petrochemical Project Goes Ahead .
(Kunihiko Adachi Interview; THE MIDDLE EAST, Sep 79).... 24
~
KUWAIT , .
- Record Volume,of Bond Issues Subsides
(THE r~~DDLE EAST, Sep 79) 25
LIBYA
Briefs
Prospective Trip Through Africa 28
SUDAN
Interview With Sudanese Attorney General
(Hassan Turabi Interview; THE MIDDLE EAST, Sep 79)...... 29
Briefs
Cholera Epidemic in the South 32
UNITED ARA~ EMIRATES
Banking Sector.Faces Political, Financial Uncertainty
(Ann Fyfe; THE MIDDLE EAST, Sep 79) 33
WESTERN SAHARA
Diplomatic Solution of Saharan War Seen as Difficult
(THE MIDDLE EAST, Sep 79) 36
YEI~N ARAB REPUBLIC
West German University Publishes Population SCatistics
(THE MIDDLE EAST, Sep 79) 38
-b-
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'INTER-ARAB AFFAIRS
- ARAB BANKS IN~REASE SHARE OF INTERNATIONAL MARKET
London THE MIDDLE EAST in English Sep 79 pp 8, 9, 12-14
[Ar.ticle by B. T.]
[Tex.t]
lntemnticmeil lenc~ink by Arab benka hns Euromarkets. 111cxat of these banks had been
. grawn be~~ond rrcu~;nition in the past five established beiure the big oil price risea but
ye~u~. In 1974 anly two Arab houses, both had undentandably attracted little
Kuwaiti, nppi~nred ns lead managers in attention pre~tiously, Foremoet of these in-
Eurobond i~.~ues. I3efore 1976 no wholly stitutions are the Union de Banquea Arabea
Areb bnnk hnd lend�mnnaged a major syn- et ~an~ai~es (UBAF) and the Banque
dicated F.urocrcdit. Now 20 or so Arab Arabe et viternational~ d'Investiasement
housea ha~~e led txmd iasues, 35 Eurocredits. (BAII), both aitti their main base in Parie
And the range of inslitutions involved in but �~th a rnnge of affiliates in other
these merkets is much wider. ~~~n~~ ~
At first the Arab presence in the inter- HoH~e~�er, the impnct of these conaortia on
national cnpitnl markets depended on the intemational lcnding wae limited at firet
two etate�controlled Kuwaiti houses, the because fnctor,i 4uch as the collapse in the
Kuweit Im�estment Company (KIC) and summer af 1Q7d of the Heratstt Bank of
the Kuw�ait Foreign 'I~ading Contracting Germam~ led to considerable nervoueneas
and Investment Compeny (KFTCIC), plus and e dr~�ing up of liquidity in the inter-
some minor participntion by I.ebanese national mnrkets. It ~~~as not until 1976 that
banks euch as the Arab ~nance Cor- UBAF ei~d lt~ter BAII started to make a
poration. Ku�~nit's predominance was based mark as i?itcmntionnl lendere.
on the relati~~e aophistication of its financial By the~i t~ie~l~~ of the Areb etates which
sector, H�hich hnd Uurgeoned well before the were shnrnhi~ldern in these consortia (and
1973/74 oil price revolution, and on the UB~' hed m}~maotitAtives of all Arab etatea
Govemment's p~licy of spreading oil wealth among its pnrtici}Mnts) had concluded that
as far as pc~.4i61e through the population it w~as time to hm�e their own institutions
fmm an earl~~ stege in the country's develop- representin~ tlici~i in the intemational
ment. market plnce, ~
The sudden eccredan of oil funds in 1974 A nen� phn~r therefore started. The key
left moet of Ku~~�ait's Arab neighboura ill Year was 1977, though some elemente of the
equipped to hRndle them. The surplus trend can be traced beck a year or two
revenues w�ere chennelled mainly through earlier. The year 1977 was when the Abu
the major intcrnationa] banks based in the Dhabi Investment Company (ADIC) was
US, Europe ar~d Japan as to a large extent established and when the Gulf International
were Ku��ait's. Because of the time it took Bank (GIB) owned by seven Arabian
to construct their rn~~n banking institutione, qovemmenta, firet atarted to make an
the Arabian ctetes tumed to the Arab- impact. It wss aleo the year that the
- Westem mnsortium banks for their trade- National Bank of Abu Dhabi (NBAD) set `
- releted bu~ine~9 and participation in the up an investment and corporate finance
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department. All three banks became known Their mle wae enhanced by the
as eggressive Euromarket operatore in 1977 difficultiee European and American inveet-
and, especially, 1978, bidding for deals with ment houses feced in rAising funds for their
offere of very 6ne terme, Also much more clients in the induetrial world. The Kuwaiti
active internationally, though its thruet had and to a lesser extent other Arab houeca
started somewhat earlier, was the privately euddenly became ~he subjects of intense
ow~ned Kuwait Intemational Investment courtinq by the established Eurobond
Comgany (KIIC). Later in thie phase, other operatore in 1974-7b.
banks euch ae the Arab Afri~an Inter- But it wae a stormy relationahip at times
national Bsnk, the Nationel Commercial because of the applicetion of the Arab
Bank in Saudi Arabia and eome of the boycott of Iarael to financiel transactione by
Kuwaiti commercial banks euch as the the Arab houaes. This meant thet if, say,
National Bank of Kuwait stepped up their one of the Kuwaiti houses wes in the
intemational lending operatione. The latest management gro~sp for an i;~ue, a
twist in the story ia a slowdown in the pace blacklieted house such as S.G. 1~'arburg
of lending by those new institutions that would have to be excluded, The boycott
emerged in 1977 and the reassertion of wea, however, applied only to contractual
muecle by UBAF and BAII, whom many relationshipe between manegere and
people wrote off when the purel; Arab banka membeia of the underwriting and aelling
came on the international scene in 1977/78. groupe. There was nothing to prevent an
The time-lag between the quadrupling of Arab houae and a blacklisted house appear-
oil prices and the emergence of powerful ing together ea underwriters or sellere eince
internationally-oriented banking in- no contract between them was involved.
etitutions in the Middle East wss inevitable, Msny Eurobond hou.9es in London and
given the huge domestic demands placed on other major financial centres did not like
' the banking systema of the oil-rich states by complying with the boycott, and ohen tried
the transfer of resources to OPEC countries to deny they were observing it. But they had
after 1973. little altemative so long as Arab investment
Moet banks in the Arab world had more banks had the capacity to underwrite lxrge
than enough businesa in the immediate chunks of an issue when their own capacity
aftermath of 1973/14 in the local market, was limited, And the Arab houses quickly
channelling funda into development and reelised the muscle they had to demand a
construction projecta or simply financing the place in the managemer:t group of an issue
messive increase in trade, to worry about and eam ext:a fees, so that they could not
looking for overseas assets, In most cases be fobbed off with a simple underwriting or
banks did not have enough b*anches in their eelling role.
local markete; they were ehort of qualitied But the Kuwaiti glory was short-lived. As
locel staff. The lnst thing they neecled tn do the turnaround in the international market~~
waA expnnd overseas. Onl}~ KU~4'AII nf the came in 1976, traditional Et~robond
Arabian countries hed the outlineA of e manegers quickly unhooked themselves
financial infrastructure which cuuld from the Kuwaitie. Indeed something of s
immedietely aupport a big expensinn in counter-boycott developed, with managecs
oversens ir.vestment. Md it had elrendy had of Eurobond issues prefemng to avoid the .
some experience of that. The 50 Per cent extra complications of inviting Ku~~�aiti
govemment-o�~ned KIC hed been I'n~nded houses into their syndicatea.
as long ego as 1961, the SO per cent~(now 88 Thie change in attitudes aoon showed up
per cent) government�owmed KF1'CIC in in the statistica. In 1974 KIC led fi~~e bond
1964. Both of the "big Ks" were ex~~crienced issues totalling the equivalent of S107.1
in different types of investment, et home million and co-managed 16 worth 5310.4
and abroad. Both a~ere familiar with ~he million. In 1975 the relevant figures ~~�ere
securities market. Both had portfolios to seven led for $216.5 million and 21 co-
invest in securities on behalf of the Miniqtry managed for ~,5i5.G million, By 1976,
of Finance. The early lead in the Arab world however, lead mnnz~Fements had dropped to
of KI~~ and KFI'CIC in Eurobond menage- three for ~fr3.9 millian, co-menagements to
~ ment etakes wea thus entirely understan� 13 for C333.8 million. The following ye~r saw
dahla, a slight rise in the number of lead
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managementa fn~m three to four, but a it wae top of Arab lead ~nanagera thst year;
further dmp in co-managements. KF'fCIC, if not, UBAF was, though its total also in- `
a~th smaller o~�ernll totals, suffered a similar cludes a mUlti-lead�managed $700 millior.
experience. deelfor Mexico.
The ttiro Ks hm~e never really recovered, Whet is certain is that by number of deals
Even in the ~rnb ~vorld they face etrong the ranking wes ADIC (10), UBAF (9), GIB
chaUenFes fmin }~uwaiti end other com� (9), BAII (7), Natio~ial Bank of Abu Dhabi
panies. The pri~�ntely o�~ned Kuwnit Inter- and Arab African (6 each) and Nstional
netional Im�~�stmcnt Company (KIIC), for Commercial Bunk (4).
instance, top{x~d the list of Arab lead ADIC raced after m~ndates for loans from
manegers a( E~in,bonds in 1978, mainly the moment it was created in February
because ot it~ strei~~th in the Kuwaiti dinar 1977. The company is akin to the state-
sector of the mnrket, where both KIC and controlled Kuwniti compnnies. It ie 60 per -
KFTCIC he~�e nlso msde a determined cent owned by the Abu Dhabi Investment -
effort to ~~in drnl~, ~iven the difficulties they Authority (ADIA) which has responsibility
faced in the dallnr sector. KIIC's totel of for handling the Emirate's surplua oil funds.
S?51.5 million in ei~;ht deals was well ahead Though ADIA has its o~m portfolios and
of KIC's :1~3~.G million from six deals, investment managers, ADIC is clearly a ~
though thst ~~�,w ctill good enough Forsecond conduit for Abu Dhabi's official investment
place. B.aIl ~~�ns third in the lead- in intemationel bank loana and aecurities,
management t~~ble, KF'I'CIC fourth. just as the two big Kuwaiti houses transmit
In co�mnnny;~,~iu~nts ADIC easily topped swplus oil funds from the Kuwaiti Ministry
KIC ir. 1Q~~, ~~�itli 19 deels worth ~777.6 of Finence into Eurornarket investments.
million , nF:iin~t KIC's 14 worth 5475.6 The creation of GIE3 to operate off shore in
million. RIl' ii~ ~rrnnd plece was just ahend Bahrain showed thet it was not the con-
of L~3aF (13 d~~~ils ~~rrth ~72 million) and sortium concept as such that the rich Arab
KF'TCIC' ll ~~~vrtli ~ i0.8 million). ' atates considered had outgrown their needs.
Im m~n~~,-iii~; r:unxredits the pattem of But it did show their determination to stand
grow~th fnr .ar,~l~ in~titutions began in 1976. on their own feet and run their own inter-
That ~~~a~ ~~hrn KhTCIC became the first national bank, even if initially they needed
~~holh� :~rab ~vi~rorn to lesd-menage a loan assistance from Citibrink on staffing and
- S1Q0 mill:~~n f~~r the Suez-Mediterranean they employ n number of Wec+t~�rnern. In =
pipeline in ~:i,,~�~ri - ~hough UBAF led seven itAelf the fact thc~t Seudi Arehifl, Kt~w~wit,
deals ~~vnr ;1.J:1 hillion and BAII, Banco Bahrein, the UAE, Oman, ~ntnr i+nd Irnq
Arabe F'~;~irn~l - the Kuwaiti�Libyan- could egree on establishing thc hnnk nt r+ll i~
Spanish Ccliv~rliUtll in A4adrid - and the ~~ther measure of the impurt~ince they
Arnb�14alaysian Development Bank also BtfAC}l IO 1C. `VI~}1 ft CA~ILAI 0~ ~l~x) II11~I10t7
did one deal each. GIB, KIIC, Areb Inter� and the governments rather thnn Ihe central
- nntionsl Benk (enother Art~b-Westem con� banks es its sht~reholder~, Gulf Int~~n~nti~mel
surtium) nnd Arab and ~~or~nn Grenfell is potentially the most powerful bnnk in the
Finence Company (a joint venture between Arab world. Its eim is tq be n w~rid�~de
Arab Bank and 1Rorgan Grenfell) entered commercial bnnk. Already its repre~entnlive
the fray as lead menagers in 1977. office in I.ondon has been upgrr+ded ta a
Rut 1978 was the really frenetic year as in- branch. New York, Frankfurt and Tokyo are
temational bank liquidity renched flood pro� the next likely out}x~sts.
~xiriions. Then enother 25 or so Areb banks It has concentrated so fxr on F,ure~market
entered the ranks of lead managers, Who activities becNUSe it is a relatively i~ninless
was top depends very much on how one wey of putting e gcx~d deposit bnse to use, it
meosures the relative worth of each deal end broadcasts the benk's name internfltionelly
' pinpoints the date of the deal - should it, be and fewer staff are needed thnn for most
the date of signing or publication of the other banking activities.
tombstone? ADIC wae one cf 34 lead The Nationa] BAnk of Abu Dhabi'e
managers (almost a contradiction in terme) advent on the int,emational lending acene
of a 51.2 billion syndicated credit for Mexico wae late, considering that it hed hcen in ex-
at the end of 1977, for which the tomhstone ist,ence since 19f>B. But it has some netural
wns published early in 1978. If one attributes edvantages as an operet,~r in the
AD1C w~th $1.2 billion and counts it as 1978, Euromarkets. It is the banker for the
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Emirate and thua receivea all Abu Dhebi's ment contrect arranbements) far their ayn-
oil revenuea. Up to 80 per cent of its dication and bond-dealing department~. Aut
liabilities are in dollare. And when it aet up it iR the Arabs who hnve lAken thr lead et
ita investment department in 1977, it was ~rccvlive Ievel, whether thcy are bnnken+ by
"way underlent" in the words of one local training or basically politicel a{~{x,intees
banker. thruyt into the banking world.
Though it was slower to meke a mark Arab bankers known intemationaUy ere
than the other Kuwsiti investment com- still limited in number: Mngdi a1~Tennmli
panies, KIIC has made up for lost time. It et ADIC, Hikmat Nashashibi et KIIC,
has played e]eading part in developing the Khaled al-Fayez at GIB, Abdullah al-
Kuwaiti dinar bond market, both primary Mazn~i at the Nntional Benk of Abu Dhnbi
and secondary, and the certificates of (though he has now been elevated fmm chief
deposit market, yet it has still found time to executive to the bonrd), Tbrahim al-T~~rnhim
lead-manage syndicated credits to, for in- at Arab African. These are typicel of the
stance,EastEuropeanborrowe~. younger breed of Arnb hnnk~~r~ (1~lnzrui is
The transformation of Arab-African Bank only 27) bas~d in the region. Out:+icle, ~ind
~ from a rather sleepy Arab con4ortium in working clcner to the mujur finfmcinl
Cairo, where it was established in 19f4, into centres, are others like Tariq Ka44em,
e bsnk with real international pretensions fc~rmerly of Arab and l~lorgnn Grnnfell, nnd
seeme to heve coincided wzth the arrival Roger Azar, formerly of BAD. Tl~e~e twu are
from the Arab Investment Compeny of forming a new Arab inveslment b~inking
~ ~ Ibrahim al-Ibrahim to take over as pnrinenhip to operale in Eurupe with cme or
chairmsn. "Intemational" was incerted into two other Arnb bnnker~.
the bank's title in mid-1978 and mandates Apart from these, the wcll known nnd
were sought aggressively, often fc~r hotel or respected Arab bankers are cunfined to lhe
real-estate-related projects in the Arab doyensof the profecwion such as Mohammed
world. But since the Egypt-Israel peace Abushadi of UBAF and Abdel-Moneim al-
treaty there has been a shadow hnti~ing over Qaissouni of Arab Intemationel Bank, both
the bank's future, because the two major reared on Nasser's stnle benking yystem, or
shareholders are the Central Bank of Egypt the Shomans who run the Art~b Riink from
and the Kuwaiti Ministry of Fin~nce, each Amman (see ~rofiles).
' with some 42 per cent of the equit~~. The emergence of new intemational
The Saudis have been slow to de~elop lendera among the ArAb institutions
their own local banking system, so it is coincided with, and was to some exlent
hardly swprising that the two wholly ow~ned linked to, the emergence of new born>wer~ in
Saudi banks have been very cautious about the region. 1'hrough 1977 and 1978, govem-
taking on international commitments. For ments, atate entities and cor~x~rete names
example, the National Commercinl Bank's which had not previously t,apped the inter-
international lending has mainly t~cen in the national capital mnrkets started to seek
form of syndicated dollar bank Ruarantee funds there. Qatari, Abu Dhebian, Bahraini
facilities or in Saudi riyal credits or bonds and Saudi borrowings were a new feature o!
for companies with contracts in Saudi the markecs. It was natural thet eheir local
Arabis. ' banks should hae~e a role in these borrow-
All of these banks, and othcrs, have ings, especially if govemments had stakes in
,nrtcd tu li~~r~~mc kiiuH~n in the inter� both the borrowing entities end the banks.
nntii~~inl ?iinrkrln.'1'lu~ initiiil fmnzy of inter- The situation was bound to pmvoke con�
iuil c1~~~�rl~~~m~riil N~x~ndin~; hns cnlmed down troversy. The new Arnb banks were treading
nn~i thr~� hn~~~~ n~nn~ tim~, more funds to on the tces of the big intemntionel banks
i~ni~~l~+~ niul n rlrnrrr {x~rr~~pticm of the need which had been working hard for the day
t~~ u~x~nil~~ in th~~ inlcrnntional markets when previously unborrowed sttites like Abu
thmu~;h Ihrir u~~~� inytitutions. ~Vhat they Dhabi would need to come to the markets.
Inck is ~u,n~~nnrL ~to~t Arnb Uonks still rely When, to a large extent, they lost out to the
hem�ily ~m i:um~u~nn nnd American ex� local banks, some familiar accusations were
~~iitrinti~y (inrrrn~intily recruited direct voiced. Whenever a new bank or set of
rnthcr thnii ~I~iti~u~;h ~ec~,ndment. or manage- banks (usually forei~n banks nrriving in a
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domestic market) upsets the status quo , With the growth in the nu?nber of in-
there are charges of rate-cutting. The Gulf ulituticros in the Arab world experienced in
was no exception last year. Except that internntional lonn c~perntions, the scu~~e for
whatever the Arab banks did they could not syndicaling lonns enlirely in the re~;iun
win that sort of argument. If they won a yhr~~ld expund. Already k~~ernl Ic~rel com-
mandate by bidding better terms than an ~,nniey and prujects ~uch ey Alumini~nn
American or European bank it wes because Rnhrnin nnd e Jurdnnien hc~tel ci~mpn~i~�
they priced the deal too low; if they won a hnve raiqed dollnr~ thmu~h syndic�ntes ~~t
mandate when an Americnn'or European uffshc~re bnnking units bnsed in Ri~hrnin.
bank offered superior terms, as happened 'I'here have nlsa heen n numbcr of lncnl
with the $100 million loan for the United i�urrency ~y~idicetions im~olving mnstly,
Arab Shipping Company, it was because of thou~h n~t entirely, locel bank.v. In the
political favouritism. SR120 milliun crcdit for che SFwdi Arnbian
These newly active Gulf bnnks do not Hotels Cor}x,retion in October 1978, HAt]
deny that they expect to be maste~s of theu
end Renq~~e de l'Uidcxhine et de Suez were
own markets. Abdullah Mazrui of National c�u�mr~naKers. In the KD14 million loen for
Bank of Abu Dhabi has se~id: If w�e can t Hflhtain of Kuwait, elso l~st year, Chnse
dor.:inate our own rnarket,`we've fniled. 'll~?e
Government would rather hnve its ow~n banl: MnnhettAn was a lead mennger with -
Nationnl Runk of Kuwait.
doing a credit for its own compan~�." But at More significent in the long run is the pro-
the same time these banks heve the same spect of Europenn, AmericAn nnd ~Jepenese
concem about the quality of their a~~ets, the entities going duwn lo Lhe Gulf and rnising
creditworthiness of their clients, as other mcmey entirely through n syndicnte of local
banks. Khaled al-Fayez of GIB ~inted out:
"We've turned down Arab denls and deat~ ~~nks. The European Livestment Aank has
involving the shareholders. �'e're after done several is.sues in dollars through
yuelity dcnls." mninly Middle Eestern syndicates, the
Rnnks like Glli, AI)lC r~nd NRAD n~�~� latest in May this year when $75 million of
9; per cent 1989 bonds were placed lhrough
hn~�a pu~h~�d the t~~i ms fur scune lx,rr~~~~�en to a syndicete comprising KFI'CIC, ADIC,
fiiicr Ic~�cls - Anl(' iind GIR for in>If~nce Blyth-Eavtman llillon & Co. Internalional,
~+�cre the firvt lo Iend to nn Arnb borruwer Citicorp Inlernntionnl Bttnk, GIB, Libyan
lxduw ~ pc:r cent nfwve Li}~r, in the 5100 Arab Foreign Bank, Manufacturers
millic~n lnnn for (~ntflr Steel (th~~ugh Chase Hanover Ltd and the National Commercial
~lnnhattnn Lld 1L'fl9 e j~~inl lcad mnnt~~er B~k
~~�ith th~~m) - but ~hey ere in e different The best example so far of e credit done
\ Ex~sitirm from the 1~estern bf~nks to assess mainly in the Gulf for an external borrower
the risk. 'I'hey ere hc~und tc~ take a~lightly is the $100 million operetion last year for
msier ~�iew m 'nnd ��ell-hcing." Such dents, the banning of the Kurdistan states.
~rntiments arn fni:ly H~despreed Democratic Party (KDP) and the pro-So~~iet Unemployment is c>ne of the
in Iran, nnd knciwledge of his 'I~deh Party, and the issuing of warrants for higgest prohlems fecinR t he
d~ti~indling 4x~pi~lar aupport was the arrest of even moderete figures like ~uthnrities, with the number i~f
. instrumental in deciding National Democratic Front unempluyed e~timated at 3
Aynt~~llah Khc~meini to creck leader t~latin Daftari. million. A freeie cm civil ~en�ice
d~~wn c>n oppu~ition, w~hether The alliance between the recn~itment has only exA~�er-
secular, Ieftist ~r from the Shia militants and the left- hatedthesituation.
niinc~rities. ist secular opposition was Deputy Premier Sedeq
The mcxlerate reli~,~ious leader always an uncomfortable one. Tabatabai told The Midd(e
A~~at~~llah Shariat�iVledari, has But it might have survived F,ast that the j~r~~blem ~eas
cnnsistenlly ~,~~�en ��amings longer if Iran's new rulers being t.acY.led thrc~ugh the am-
ag~inst the dangers of mixing had not had to contend with struction of rc~eds, villa;;es and
reli~inn with ~x~litics. "The role such overwhelming problems, houses. Aut young tinemplo~~ed
of the cler~,y is e spiritual one some inherited from the pre- intellectuals and students who
I don't think we should vious regime and others of are being sent away to take part
involve ounel~�es in government. their own making--un- in the "recc~nstruction cam-
The clergy should fight threats pai~n" complain that the real
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pur~se of the exercise is to remove someone ~�ery naive ~vouldn't be tempted by
potential jx~litical trouhle-mekers. such po~�ers to become a despot," NDF -
= Factories in which the PaStaran ]eader ~4atin Daftari commented.
(revolutionary ~~iards) have dic~ol~~ed the But all hope of any real change to the
workers' committees or ha~~e replnced the Draft ended even before the elections ~eere
director (unavoidably associated ~vith the held. The extent to which the pro�Khomeini
former re~ime) with his subordinates have komitehs controlled the selection of
rrn~ .�u�~i ~�I~~~�~i :11th~~u~;h the nu~j~~r in� candidates, ensuring the choice in most
~l ru. ~~~�n~ iinti~~n~ili�i�c~ .~~~ne ~c~�ek~ ngo, cases of Islamic Republicnn Fart}~ (IRP)
f.~~ !~;~~~n ~;i~�~~n ~~~~~�ninu~nt ~i~~~x~inte~i members, prompted the secular opposition
I�~;~nl~ ~!:e~� t~K~ nrc nut fiuirti~~ning. \c~ to abstain from voting in protest. 1loreo~�er,
int~~r~~~~ nt~ in ~~�~~rkin~; h~~u~, ~iu~� ur pru� the subsequent evidence of ballot riggi~ig
im~i~~~n h~n�c lx~en c,ffered to the �~~~rken, during the voting prompted groups ~~�hose
~chu ~ur cl~,~�ri}x~ci f~s "lethnr~;ic f~nc~ un~~ll- candidates failed to be elected to publicly
iii~; tu ~~~~~rk". denrnince the election irregularities.
In T~~hr,in the C,u~�crnment is preuccupied Of th: successful candidetes, onl~� Abder-
~~ith lhc ~;r~~~~�ing nuinber ~f industrinl dis- Rahman GhAZSemlou of the KDP (elected
Ewtcs Ihnt c~mtinue to put ~~ressure nn the for West Azerbaijan) and Rumatollah ~4oq-
.h~ikp ~~c~~numy nnd t}venten lo isulate Iran qadam Maraghehie of the iVluslim People's
e~en furlher by disrupting trnde, com- Republican Party, (MPRP) ��hich is
inunic~iti~ms ~~nd tri~nsix~rt. A new "special" associated w~th Shariat-A'Iadari could really "
I~i~e ~iru~x~~es ~~enalties for those promoting be called independents, ~nd Ghtjssemlou's
~trikes. ei.ection was ~ubsequently declared "null
L~inc~lcu�ds who huilt up their holdings and void".
I~chind the maak of the Shah's "land The M1'RP in Tabriz issued A stxtement
n�fnnn", r+re now said to he defending them addres,sed to the "brave peopie of Azerbai-
hehind the rnask of Islarn, ~ti�hile in the pro- jan", alleging that votes given to the lwo
~�inces they are c~ccused of working to most popular MPFtP cendidates had been ~
suppress minority national rights. ignored.
Pru~~incial middlemen and merchants are "It is nece~.sary to remember that the
eccu~ed of making unrea.SOnAble profits and people of Tebriz xiid the whole of Azerbai-
of pushing prices up. jan have been oppressed for many ycars and
In short, the oppcisition argues that that this is still continuing," the statement
although the mostn/azin (the poor) helped said. "I'ou rose up before and know how to
to overthrow the Shah, the bazari (rich fight for your rights, and it is only out of
merchnnts) are the ones who gained. The ~pect for the highest authority in Shia Y.
- bo2ari hed been threatened by the stf;gger- Islam (a reference to Shariat�Madari) that
ing inflntinn arising from the Shah's policies ~ ~�ou have been silent. If the Central Govem-
end had been waiting for years to eatend ment ignores our statement, it must Uear
their inHuence beyond the bazaar, the the responsibility for what htjppens." ~
up~wsition says. In the ~sake of the stntement the Govemor
Fede}'een leader MU51.A~A MA(~A[ll told of Tabriz said, "There was cheeting in every
Tlie Middle East, "The Govemment is the polling station in 'I'abriz. I saw some of it
true representative of this new, d~~nemic with my o�n eyes." Even the IRP organiser
cepitelist class whose natural ally will for the tow~n resigned, stating, "'I~is election
s~~ner or later be the US again, and a ��as just like those held for the Rxstxkhiz
_ capitelist mode of development. Hs long as party. It w�as ageinst God and Islem.",
they pray and clemour for unity, they are all ~s reaction and the fact that
right �~th Khomeini." Khomeini's party polled only 8.5 million
The recent elections for the 75-member ~�otes, much less than the earlier 20.I million
Assernbly of Experts to discuss and amend "~~es" vote of the Islamic Republic referen-
the Draft Constitution did nothing to allay dum, almost certainly convinced the Iranian
the fears of the opposition. The Constitution religious esteblishment that it would have to
envisages a President with control of both use force to retain control in the face of ~.t
the Executive and the armed forces as well ~�ing unrest.
as powers to appoint the Government, veto The implementation of the press law =
laws and dissolve parliament. "Only ~~ublished in June but deleyed because of
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- public op~usition, w~as the logical nexl step, difficull tr+sk. Tt is estimaced that there are
It ~~rovides for imi~risonrnent of up to three About 100,000 men in the Army compared
- yenrs for insulting pruminent state or with nearl~� 400,000 before the revolution.
reli~ious figures. Press freedom, however, The rest he~~e returned to thei; towns and
' had become something of a rallying point for ~711eges and show no signs of wanting to
~ the opposition providing the pretext for rejoin, The call�up for the current batch of
demonstrations c,f solidarity which led to national sen~cemen hns been extended by
violent clashes with Khnmeini's twomonthsbecauseofthepoorresponse.
~ revolutionary guards. The Arm}~ has been renamed."The Army
~i'ithin two weeks of the la�~'s coming into of the Lslamic Republic" and the Imam has
effect on 6 August, some 22 papers had been tried to boost its morale on various
closed down including all those reflecting occasions, but the people in general remain _
opposition or e~~en independent ~~ews, But deeply suspicious, especially of the officer
- even before this any paper which criticised corps. Arid the ]ower ranks seem to share
lhe Imam ran the risk of hnvir.g its premises this ~~ew~ judging by the continuing reports
I~umed down, of poor discipline and lack of respect for
The main moming paper Ayendgan, for superiors.
_ example, published an inten~ew with Dismiceed General Azizollah Seif Amir
Khomeini by the expelled journalist David Rahimi, the somew~hat eccentric 55-year-old
I,amb, The Imam refi?sed to read it, and the former commander of the military police,
next day all kiosks selling the paper were ~eems to t,elie~�e that war was the best unify-
I~urnt down and some street-sellers were ing force for both the Army and the country.
said to heve been whipped, Asked how he would handle the situation
The initiative for many arbitrary and in Khuzestan, he replied that "after ex-
repressive acts, however, comes from the tremely detniled investigations by ex-
furces holding power in the streets - the perienced office~s and after having
P~.staran and ermed units of the komitehs - a~pproached the local leaders" he would
not the Govemment. Tehran's Prosecutor- "crush the counter-revolutionaries". The
Ceneral has protested against such actions, recent clnmp-do�ro on the Kurds, which in-
demending that no arrest should be made volved the Air Force as well as the Ariny
without his authority and alleging that may weU have been an ottempt to test the
Tehran's Qasr court and prison are con� advice.
trolled by "irresponsible elements". Certainly it was more important As an ex-
This is one reflection of the duality of ercise to bolster up the morele of the armed
� ~x~wer between the Central Go~�emment and forces than for its effectiveness in weakening
the religious establishment in Qom. The the Kurdish militants. The Army's con-
failure of efforts so far to co-ordinate policies fidence had been undermined by e series of
makes coherent government impossible. e~~ents, culmineting in the resignation of
Executions and arrests, especially of Chief of Staff General Nasser Farbod in
people not clearly linked to the regime, July, partly bECause of outside interference
, appear to be increasingly the result of in military affairs by "committees, political
rivalries between komitehs struggling for groups and �other power centres" and of
cuntrol. In south Tehran, for example, "differences of opinion".
fighting broke out between two komitehs I`'or has the continuing campaign of
after one hed ordered the arrest of a strikes, walkouts and occupations by 2he
bu~inessman whom the other supported. Homafars (Air Force contract technicians),
F3c~th were ~eid to be vying for control of his by far the most radical group within the
lucrativeecti~~ties, forces, hel~~ed the situntiun. in their actiona
The komitehs and the Pe.staran ]ook only Against any ettempt to reimpxc trnditional
ta Qom for ciirection, and Khomeini appears militAry c~iscipline the,y hm�e gmunded a
um~illin~, or is perhaps uneble, to curb their ~~i}~,;t~+ntial peri ~~f the Air Furce.
acti~~ities - in many o~' the pro~rinces they Army actiuns in Kurcii~inn, heL~rc the
nre the onl~� forces backing the authorities. mc,st recent f+ttempl to lfike cc~mplete
F.fforts are being mede to rebuild the c~mtrol of the prcrvince, only ~ho~~�ed up its
shattered armed fotces in hopes of using wrnkne~iQes.
them to restore order, 5ut this is proving a Units c~f the frlth Di~�isiun bt?aed
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~ ~
in Orumieh �~ore mubili:~ed to lravel 60 fi~ht in vameyt In thn~ cii~e c~ther ii~inurit~~
kilometres to Serc~w ~~n the IrKno-'I~ukish y.�~~u~~~, ~ike thr Arnbs, ihc l;clu~'I11N flll(~ l}l~
burder lci relieve Ihe lc~cnl gendnrmerie base 'I'urk~ni~nn~ mn~' feel ihnt e 4hu~~~du~w~ ~+~ith
which wlly I)C91L6ed by Kurdish ~~I'C~)E'ls", ~h~' n~~;inir cHn nc~ Irni~;i~r he n~~~~i~ied. ~
. 'i'I~e Army ~ti~ns unable to use thc moun� 'I'liei~ulti~x~k~~ii msjxm~~ ~~flheTurk~iift~r
tain mads, however, bect~utie they were con- the A`~e?nhly el~~~�tiona is nn inc~icAtiun of
trolled Uy the Kurds, and had to cross into thiy Uend for they hcid hithertv becn lhe
'Ilarkey nnd appronch Scrow from behind. A nu~;t ~~~~~.tiive of all Irnn's minoritics and hud
nne�hc~ur joumey lherefore took several days . even bcen inv~~l,ved in clnshes with the
nnd co:jt severnl txnks nnd other vehicles, Kurds H~ho hnd mounted a inEissive
ACtemp~s to mubilise units for intervention demcroslrati~n in fi~vour of r+utcmomy,
in Marivdn were eyunlly unsucces.5ftil. After 'I'here is little doubt, huwever, thnt
the resources of four rnajor beses had been Khuxestan is the m~xt vitxl problem facing
tapped, only 5U0 troops could be assembled. lhe Covemment, 'I'his nrea is lhe he~trt of
One highly placed political source told the oil industry and the centre for much of
The Middle F,ust that what �~es left of the iran's new industry, including the steel mills
Army "would obey ~~rder~ in thec>ry as long of Ahwaz. 1t cnnnot ef{'ord chaos there and
as it wcisn't ~riven any in prectice". The w~11 pay almc~t nny price to end dissent.
Gavernment is lhus reluctant to rely totally This explains the occupation of
on the armed forces to control difficult Khorrtimshahr in July by revolutionary
situetions for fear they will disintegrate guards nnd the yubseyuent arrest of Shaikh
further, and is still forced to depend on the Khaghani. After a week of silence, _
- revolutionary guerds. Khaghnni issued e statement from Qom,
But in both Kurdistxn and Khuzestan where he is under house Arrest, in which he
(Arabistan) a significant part of the pop- seemed to ha~~e gone heck on his e~~rlier
ulation see the young and inexperienced views. Several dnys later, however, he
revolutionary guerds as uccupation forces. smuggled out a messAge: "I am a prisoner
Resistance to them varies eccording to levels and stetements published in my neme are
- of organisation and armament. not mine" (see inf eruiew).
Although both the Arabs and the Kurds Iran's minority problem is one of the
are demanding autnnomy within a factors affecting relations with its
democratic Iran, the two struggles are being neighbou~s but other ~licies Adopted by the
waged in i~lation from each other. Apart Go~�emment are leading to increasing
from the relative backwardness o~' the Arab isolation internationally.
campaign, the main reason for this has been Under the Shah, Iran was firmly in the
the links of Arab Shiite religious leader pro�American and pro-Israeli Camp. The
Shaikh Muhammad Taher Shobeir revolution against "dictatorship" and
Khaghani with the reli~ious establishment in "imperialism" originally gained it the sym-
Qom. Kurdish leader Shaikh Izzeddin pethy and support of its neighbours end of
Hugsaini, on the other hnnd, is A Sunni, and ~he non-aligned countries,
has adopted a relatively secular npproach, Although Iran crit.icises both "Westem
seeing the Kurdish struggle as national and exploitalion end consumerism" and
political rather than religious (see The "Enstem depersonalising collectivism",
Middle East, August No 58). Moscow still seems to be the primary~ target.
The Cenlral Government insists that the ~e ~ks and publications of the now
minorities heve been no more oppressed h~~ 7Udeh Party heve been bumt along
than the people of Iran in general. The with the booths selling them in spite of its
minorities, however, see such s`atements es declared support for the regime.
- ignoring the existence of their z~ational con- Muhammad Sad~ti, a leading member of
sciousness. the People's Mujahedin, hes been
In Kurdistxn all-out civil war is an in- impri:,oned on charges of spying for the
creasing possibility, especially since the Soviet Union.
KDP has been outlawed Rnd the Army hes The Soviet Union, as both a secularist
been brought in. and socialist state, is seen as the backer of
The brinkmanship that seemed to work at ~~~~~e~" pt'ghanistan, which is considered
the start was based on the assumption that v i r t u a 11 y a n e n e m y c o u n t r y.
the minorities are more afraid of civil war Communications are non-existent and the
than the Government is. But with their two govemments accusE each other of sub-
backs to the wall the Kurds will have to version and interference. Foreign Minister
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Ibrahim Yazdi has declared tha[ even Shoh, An~1 ~m~~;rc~,ives in the tucn h~~vc
though Iran dces nothing against Kabul "it been di~illu~iuu~~d by the fnct that, Nf~~rr thc
cannot prevent groups in this country~ from p~~rfunclury ~~~~Ic�nme ~;i~�en lo a Pu~n~lnr
having relations with the Islamic movement Frunt fur Ihc~ l.ilu~ruti~m nf nn~iin (I'b'I,0)
in Afghanistan". dc~icgntiun, currlit~l rclntiuii5 hn~~c nuw bcen
Relations with Turkey are also cool. This rc�cslnhlivhed w~ith tiulU+n (~nlx~us.
is partly because Ankara fears an exiension But the c~~n(lict i~ dee~~est w~ith Iray fc~r a
- of the Islamic. "revolution" and the Kurdish number of rciitiuns. Khuineini h~is u~ fnr
desire for autonomy to 'Ilirkey, and partly prcrved incnpuhle of ce:nlrnllin~; ]riu~'s hurcial-democratic policies and Khomeini's r~,�;en hc~titililies ~~~;ninyt the Ri{nthist
vision. Govemnunt in I3n~;hcind. At the tinme time
As for the Arab world, Iran's disgust with Iray is Kivin~; mora' rind ~x~~~ibly ~nr~terial
the Egyptian-Israeli peace treaty has led ta sup{x~ri to the Arnbs of Khuzestxn,
a split w~th Cairo. Relations with Libya are The duality of jx>w~er which is cf~using
strained, despite the ideological af~'inities, confuyion in Irnnixn domestic nffHirs hns
because of the disappearance of the +~~G~ yp~~~~~ u~~er into ihe field ~f fc>rcign
I.ehanese Shiite leader Imam 14usa Sadr in ~~lnti~my nnd iq nff~~c~in~; tie~.
~'ri~~ i~ Il~r I~~~�~~ nl'I;i~r liet~eren Irnn nnd the %'hr Afid~llc F;ns~ ~~�iis !~~Id I~~ T~r~~i~t~~
,in~i~ is c~.~lin~; nnd inm hr3s nnt F~~reiKn ~linisler Ti�hrnni, ti }~~un~;
,n }K~,~.~~ ~~~,i~it~�r~~�~~i~;ht tnS`�rifl ~ind t~~rhn~KVnt, .,~�~~rt~~ii~l~ n~~ Arili ~:iiir~� I~~i~
Irriy ,~iurh th~� f'nlt~~tine I.il~~~r~iti~,n nny drrire ir~ i~lniin t~~�i~ii nn inch nf irniiinn
(lr~;,u;~..,ti~~n hrici huJx~d. lnnd, just ~iti li~in hm nu~uiihilinii,~cli~ili�~�i~r
1'iil~~~;iiiinn di~~~p}x~intment f+nd em- tu~~~tirds Ari~h liincis." f3ut i~ii~nrr3~.it~~lv
hnrrri`~in~�itt ia cun~idernhle, es sh~~wn by nftenvnrds Khutncini's ~trnn~;mt~n Sn~iey -
Ihe n~fu�nl uf the PLO repre4entntive in Tnhntt~l~i~i nlleged, ��I'hr riiin ~~f ~~purntin~;
T~~hrrui, N~~ni nl-}ln~.~an to meet the press. Khurestr~n t'n~m Irrin i~ ;u~ ~~~d c~n~im ~~f uur
_ 'Ilie P++I~~~tininns' }x~9iti~m tipE~enrs to hn~�e neighb~>urs" (.,rr in(rrt iru~).
bccn u;id~~rmined by their icmg�standing 'I'he ulti~nnte com~~le~iun uf lrrin's Guei~;n
reliiti~ms ith Mc~scow. find dumestic ~x,lic}~ in~~~t inti�nit ehe outns nnd w~ere sametime.
wishes. ~ittnckcd h}� tr~x~ps, "After the fighting wAS over, I
These children are currently "'fhere ��as e hig cru�~d ~~f us became a revolutionery guard in
enjoying a sense of victory over ~~~itside the iinivenity, ~vhich my area. I stayed as one until
both the Shah and their ~~'~s l~u�ked up," he seid. "VVe the religious groups began to
parents. They can boast that ~n~naKed to l~reak in txrt es we pressure the left and then I left."
they were out fighting for the ~~~t in~ide the soldiers ceme in Amazingly Hamid's parent,9
revolution. And when their s~fter us, shc~ting to kill. Thcy knew little or nothing of his
elders tell them that it is all over killed 73 students thet clay. We activities for quite some time. "I
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13l1f{It1('AUN;S becnuse of my Iefti9t :;ym- cletismates prepare and dis-
by I'AItVIN (tiged 7) pnthies, he hea been trying t~~ trihute their ~~wn len(let:~ nn the '
/hur~~Kuf h~~o brufher~ tiLup me guing out n~;1~in, He revoluticm, "A few of us K~~l
7'hcy u~cre not ri~ldicra knuws it is urele~.g, thc~uKh." tukether nnd wrile n letiflet, then
Th~~rcu~ux/ireundxmuke It is the sfune ~tury in e~+ch of us copies it a few times
They m~ulr a Gurricude Hamid's schaol, where the And we h~~nd it ruw~d the schcx~l.
u(etun~~e ivith fheir~rienda tcuchers are trying to re� When the fedayeen had to Exnt-
'I'hcy xtuyrd fhe night establish the old routinr without pone one of their ?narches w~e
ut the barricadee much success. As Hf?mid ex- wrote npolo~ising to e~~eryone for
They deetruyr~f thc enemy plained, "Just efler the this."
nt ~he barricadee revolution things were very free; W h e n t h e s c h o01 s
'I'hey like their Garricude~ we could talk openly to the demonstreted in support of
Thryrircnota~raido~6eing teachers about ~litics, Now it Ayatollah Tnleghani, far exam-
' in fhe Gurricude or ojdying has quietened down, nnd as far ple, Parvin and her clessmates
/ likr Garricnde� as many of the teachers are con- were involved. "We held e
I like xufdieri cemed things are back to march in the playground and
This ie a 6arricade normal, But they ere nat really; shouted, 'Khomeini is the leader
Thie is a barricade of (reedom We just won't accept it. If they but Taleghani means more to
Soldicre are not n~raid refuse to let us out of scha~l for a us'."
oj bring in 6arricades demonstration, for exarnple, we She gave me one of her leaf-
'!'hcy like ~rcrdom just climb over the wall. We lets es a souvenir (see margin).
Soldiers want lran to 6e (ree have cut holes in the barbed Among a group of fi~�e teenege
/runiana muat u~ake up wire so it is quite easy." girls who were eager to talk, two
eo that we can have Parvin was only six when the wore the hejab (veil), one u
a jreelran fighting started. She wAS still in chndour and two~V1'estern drec5.
Freedum ia xomething 6eautiful k.indergarten (school starts at Fa[imeh, wexring the chadour,
und eomrthing that we like age seven in Iran) but even here explained that her father in-
the effects could be str~ngly felt. sisted on it. "He was not so bad
used to come home all muddy She described what it was like. before the revolution," she ~id,
and bruised, so I would tell "At first we did not know "but since then he hxs become
them I had been playing football enything except that if there difficult about the~e things. 11~�
or simply horsing around with Was someone we did not like, or mother does not mind. i~a~~~ it _
my friends. In the beginning I who was bed to us, we called has become normal for me to
maneged to use this as an them 'Shah'. ~1ow mcnt of us wear it; I~~~ould feel strange
excuse to get out, but later it like the Imem. Therc is ime thnt without it."
was impossible to hide what I calls him n cummunist, nnd All the girls basicall~~ rejected
was doing, Then they would ~+�~~~h~�r th~~t ~r~~�s hc him~clf i~ ~ the idea of inen, their fathecs.
argue with me that it was a ~'~~~��>~~~~~~t i~~~~ +~K+~iiist thc~ the clergy, telling them ~ehat to
~~�n~te ~~f timc t+nd thut wi� ~�~~i~ld lmam, but m~rit ~~f u~ +~rc ~�ith wear. Zahra and Mnn�am in-
~{,.~,.t~~ rhr ~hnh ~~nd tL~� ~~~m�~~ sisted that they had ch~ren the
Aiiu~ricxns. Pen~in's is a mixed ~chix~l ~~nd hejab out of com�iction. A.~
"After c~ne ut the l~i~; she wcnild like to kecp it that Zahra explained, "The Qurxn
clemunstrt~tic~n9 rny L~~her WflY~ if cmly because ~he likes dces not say we should ~~'ear the
nc~tic~~d my fncr in fi ~i~�~v,~ui~>~~r the cht~llrnKe of heing with t}1e chadour, just be decentl~�
~~hntc~ ~ind hrcnme ~�urv nnKry. f~c~ys. "Since the re~�ulution", dressed. And we w�omen should
'1'hcy I~~cked mr in fur ri wholc ~he expleined, "~ti~e play Kames, decide for ourseh�es ~~~hat t~~
c1a~~ lnit the next clf+y 1~�fis uut F~~~ys Against girls. We hn~~e two wear; we ha~�e this riRht."
fi~;hting n~;nin." sides, Ainerica (bad) .~nd '1'hey alw~, lind ~c~linite i~l~�~i~
Iliiinid cunt inued, �Unce we P~lestine (gcx~d). ~'~'hen the Uoys ~~n tnfirrin~;e. .All hrlie~�~�d it
hnd w~m, rny fr~ther'S iittitude f~uce us to be America, we tell ~x' nfti~r thi� ~i~;c ~~f LK~;ind
ch:in~ed fc,r n w~hile. Ne tnld nll them that the S}k~h wes a man >>~~t nt 13 n~ hnd lmi~n ~u~;~;i~st~~d
hiti friends that his scm ~vas une so they are the Shah. ~b hen we ree�enlly by the cl~~r~,y.
of the freecl~~m fightcrs xnd was fight it feels gcxx] if ~~~e win." '1'he}' ~+re r~mainci~d thnt they
now a Kuerd. Rut rrcently, But the effects go dceper than +jre hcndinK t~~wt+rds ~;reater
new ~ames. Now Pervin and her finedinn hut they t~rr iuri ~um
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cxijctly huw this ia to he both more religious and more
achieved. As Firuu�r.eh ptit il, active than they, and whose
"We have scime freedom but sons have become soldiers and
lran is not ~~E~t free; we must independent at an early age.
(ight for mure." Mtjnliheh In the schools there is much
added, "We ~+~f~nt freedc>m but talk of change, of new methods
nc~t annrchy." and books. The teachers are
7.ahra and Maryam are bc~th trying to keep a hold over
sup}~rters uf the reli~ious move� children who are no longer
ment, but when asked whether children but young adults often
they expected the reli~ious older in experience than they
yuuth movement to fight for themselves. Those trying to con-
rnure freedom they were not sure tinue the old ways experience
where things stood, outright defiance, and whether
"You cannot really ask this it is Muhammad or Marx that is
y~iestion," Zfihra answered, cited the crisis for the teacher is
"because at the moment we the same.
su{~port everything the Imam A pilot scheme for teaching
says and we do not think of primary school children on a
enything else. What we do think "discovery" basis has already
is thet if we support the Imam been accepted by the Ministry
we will get more freedom as of Education, indicating that
~ time gces by." new attitudes are already being
~ Whatever does happen, formulated.
however, things are bound to be There is a song that goes in
different. Changes are already part you can't stop the
under way. It is a time of deep children of the revolution." It
soul�searching, particularly for will be interesting to see how far
the more traditional families this applies to Uan. The record
- whose rebellious daughters are so far bears out the words. �
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IRAN
NATIONALIZED BANKS LACK FUNDS
London THE r1IDDLE EAST English Sep 79 p 72
~ i::
[Article by R. Mohan] j
[Text] ~~++~~~>~~nli~utiunuflren'sbankythisycsr ~e situation of many of lhe banks was
~ti�~~v pnmi~~ted as much by prnctical reasons made very much more serious by the fact
i� I~y idc~~l~~gy. The revulution brought in ita that many of the capil,al transfers uut o}'the
~+~nke furcc~ ~ti�hich had 1Nrgely destroyed the country seem to have been credit transfers
},~u~kin~; ~ECt~~r; the mn~.~ive lc~ting of bank against inadeyuate or even non-existent
~~remi~t~ ~~'as paralleled by an eyually collateral. When a minister or e prc~minent
massive movement of funds out of the businessman instructed his bank to transfer
cc~untry by thc~e in a pcnition to take such a~arge sum of money out of the country
nction. Fii~nlly, the ccmtinuing strike by against his signature there were few bank
large nurnbers of bank employees meant employees with sufficient self-confidence to
thet the hanking sector was in any case refuse to carry out the transaction.
largely inu~xrative and lhe traditional A m{x~rt igsued h~� the IH~arc1 af the
methc~ds of handling cash through the hitherto prest.igi~~~i~; lndust~:il end MininK
hn�r.f~ar had c.~ume into prominence again. �~~'~~~~pment Rn~ik of lr,u~ ~I?~1DA1) ~~ne
In the rhang, when all about were losing �'eck After nntiunnlist~tiun ~idinitted Ihet
their heeds, the Central Bank managed to mr?ny of the l~~ans mnde hy this bnnk hed
keep n semblance of order. Its staff steyed at ~~~en without ~uoper cc~Ilatc~ral, liV1DH1, with
thrir de~ks for the moat part and it hes been l7 furcign bxnks holding tug~thcr 14 }xr cent
able tetrurhemicel j~l~int -
_ . NISIC. with an nnnuel cnpF~city uf nt
The Ahwez steel complex was lexst 300,0O0 tcros of eth~�lene
also to no small extent being and ethylene eyui~�alenl. 'I'he
regarded as a laboratory in that Government of lran stnrted
no fewer than six foreign steel negotintions with the Mitsui
concems, four German, one cumpany of .)epen, nnd the
French and one Americati, w�ere giant Bendar Shahpur
involved in large projects involv- petrochemical project wes
ing sometimes competitive ]aunched (see The 1l~liddle
technology. F,ast, July No 57). The plent,
Fina]ly, the Shah's planners ~~�hecinli~d to r~rt
had started a giant 3 mn ton ",rne 1t')(1 mn. n!~n~~�i ,~um
steelplantatBandarAbbasand Plcte on Ihc e~~e nf thr Ir,~~iirin
had signed a contract with the rc~�olution, h~it iis I~rinl c~~~( is
Italian Italimpianti group for its i~~~v ��ell uver ~,3 bn.
construction. This plant was to Althuugh f~lmost c~~ery
make use of iron ore brought ~~~ember of the lrnnien
from India in the ore camers of revolutionary Go~�emment hns
the joint-venture shipping line ~~~d that the Bzinder Sl~nhpur
the Irano-Hind Company as project was to go r~ticacl, there
w�ell as ure fn~m Iran's u~~n hes been a il ~able leck i~f con-
d~~~x,~it~ Ht (nd c�f~~hnr, :~'l(1 km p` ~
t~~ thc~ rnn~th uf T;nndnr Al,hns. fidence in the ability of the _
'I'he plens nf the tiheh's Government t.~ ensure thet che
Ce,~~rrnmrnt crill~~d fnr ~teel pro� Project has the money, the
ductiun in 1rHn tc~ ref~ch 14�16 peoole and the supplies it needs
million tons f~ S~eer by 1~3~,3. '1'he for evenLual successful com-
merket fc~r this pruductiun P~etion and start-up. p
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IRAN
STEEL TARGETS RESHAPED ~
- Landon THE MIDDLE EAST in English Sep 79 p 70
[]:nterview with Dr Valiollah Jafari, managing director of NISIC, and
Dr Soroush Kamyab, head of Bandar Abbas project, by P4IDDLE EAST's cor-
respondent Terry Povey, date and place not given]
[Text]
The Middle East: How do you which will probably continue on the projc~ct and what would
see Iran's future steel needs a reduced scale. the likely lose to Iran be if it
and the ability of the in- The Middle East: What is were cancelled?
dustr~� to meet them? Iranian eteel production like Dr Kamyab: About 30 per cent
l~r Kamyab: The production at the preaent time? of the equipment hes been in-
target of 14�16 mn tons a year by Dr Ja(ari: Our theoretical pro- stalled; moet of this could be
19�i3 is completely out. The in- duction level should be just moved, It hes been bought on
dustry couldn't make it and the under 1 mn tons a year, but credit from the suppliers against
country, at the present level of because of disruptions it is 10 per cent down payment from
economic activity, w�ould not about half that.
need it': ~4'e are planning for an The Middle Enst: And the The Middle East: How does
anriual praiuction level of 7 mn Bandar Abbas projectT the uncertainty over the
tons by 1985, enough to meet Dr Jafari: This project ia still Bandar Abbae project aflect
our own intemal requirements. being considered by the Govern- the Kudremukh minee being
The Middle East: What is the ment. We cannot say that it hes developed in India with
effect of this revision on the definitely been cancelled. It may Iranian state 8nance and
foreign companies in~�olved continue under certain con- also the Irano-Hind Ship-
in Eteel projects in Iran? ditions. For example, it may be ping Compsny?
Dr. Kamya6: The Russians located elsewhere, in lsfahan or Dr Kamyab: The ore from
remain deeply involved with in Ahwaz. Also, the contract Kudremukh is intended for use
1ISC0 in Isfahan, and the with Italimpianti hes to be at Ahwaz rather than at Bandar
various pmjects w~th the renegotiuted so es tr be more Abbas. At Bandar Abbas we
German firms in Ahwaz are in favourable to Iran. The original originally intended to use ore
their final stages, although some agreement was in practice a sort from Gol-e�Gohar es well as
of these are likely to be extended of a barter deal; given the in- Indian ore in the proportion of
in time. There is also the French crease in the price of oil, we juat about 50/50. LJltimately, w~e
project for special steels with cannot continue with it. would have used the Gol-e-
Creusot I,oire, which is at The Middle East: How much Goharoreexclusively. ?
present being evalueted and work has been completed on
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IRAN
f
i.:
JAPANESE PETROCHEMICAL PROJECT GOES AHEAD
London THE MIDDLE EAST in English Sep 79 p 71
[Interview with Kunihiko Adachi, managing director of the joint-venture
Iran-Japanese Petrochemical company (IJPC), by Terry Povey, date and
place not given]
[Text] ? What ie the status of the Rahim Abedi, eays that you balance of the prcKjurtion, the
Bandar Shahpur project are not using and training 50`%'o not taken by the domestic
loday? enough Iranian eta~Pf. Iranian industry, will be'taken
_ O Before work stopped in the O You must understand the by Mitsui for sale to the Atiian
revolution, the project was 85% language difficulty and also the market.
complete. The Govemment inevitable lack of experience ~ Won't you ultimately be _
collectively, and individual among Iranians in the competing with Saudi
ministers, have said several peirochemical industry. What Arabian production?
times that they want to see the we have tried to do is to divide O No, because we shell be
project finished. In the new che project into sectors, some of ineeting the needs of our own
budget, provision hes been which are completely Iranian customers in Asie. Also,
made for the money needed and some of which are com- although we cannot arrange it
~ from the Iranian side to con- pletely Japanese. Our main openly, for legal reasons, in fact
tinue with the project, about problem with our Iranian staff is there is an informal market-
$175 mn, that is 507c, of the tctal the lack of middle management. sharing agreement between the
needed. Some middle management staff major world producers, for
? In the paet you had many have left the country; others are example Union Carbide,
Japanese employees in Iran. not acceptable to the Hoechst, ICI, Dupont end BP.
How many are there today? revolutionary komitehs. We are 'I'he international market is
O About 20 engineers. The trying to train the Iranians we enxious that Mitsui should
' Prime Minister, Mr Bazargan, heve to fill the available control exports from Iran. They
has personally cleared every one positions. do not want petrcxhemicals to
of our people with the Ministry O How do you aee the 1~e sold like crude oil and thus
of Labour. VVe are at present market for production from upset the world market. You
recruiting additional staff in the IJPC when the plant~ could describe the relationship
Japan - we may need as many becomes operational? between the major producers es
- as two or three thousand. But it O The plans are huge, and one where the world~ market is
is not easy for us to recruit about 50"~, of Bandar Shahpur's spiritually divided between
enough Japanese experts to 3nnual production of 300,pQQ the major producers.
work in Iran, tons of ethylene is to be ear- ~ Do you think that IJPC
~ How many Iraniane do marked for the domestic ~'ill ever make a profit for
you employ? market. The problem is that Mitsui?
O When work was at its peak although the best eyuipment O I firmly believe that in time
we had 5,000 Iranians employed Available in the world today has We shall make a profit - pro-
on manual jobs. been imported from West vided thet Iran continues to
? T h e n e w I r a n i a n� Germany there is no skilled steff supply the joint ~�enture w~th
chairman of IJPC, Mr a~ailable to make use of it. The cheap feedstock, natural gas
and nephtha. n
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I
FOR OFFICIAL USE ONLY _
KUWAIT
RECORD VOLUME OF BOND ISSUES SUBSIDES
London THE MIDDLE EAST in English Sep 79 pp 32, 34
_ [Article by B. T.]
[Text]
The euphoria over the succeas of the Most of the queue nevertheless kept
3{uwaiti dinar bond market in 1978 going, perhapa urged on by their lead
evaporated a little this year as the fregility mansgers, the Kuwaiti inveatment com-
of the supporting money markets wss again paniea, who, having waited ao long for euch
revealed and funds Aooded out into the an event, were not going to be detesed by
dollar in the first four months of 1979. The edverse changes in the market. Only one
euphoria last year was certainly justified. It potentiel issuer is known to have dropped
was the sort of year the participants in the out: the City of Helsinki, which ~x~~t}xmed
, market hed been awaiting and predicting its borrowing continually in the firHt half of
fer some time. There was a record volume of 1979, hoping for conditione to im~~r~~ve.
new issues of KD1;4 million in 18 iasuea. The othere who went ahead ri~ct with a
Three of these, worth KD32 million, were for varied response. Those with n tri~~le-A tag
]ocal borrowere. were assured of a good responRC from a
And the last month of 1978 eaw the return market starved of such quality pe~~~er. Moet
of the triple-A borrower in the ehape of the previous issuers had been Third Worid
City of Oslo, an event that had been eagerly governments or etate entities, euch es the
awaited since the Oesterreichische Algerian stete shipping compeny, a -
Kontrollbank did a KD5 million three-year Moroccan refinery concern and the Republic
note issue in 1974. of the Philippines.
Oslo'e isaue was much more ambitious One banker in Kuwait remarked: "Oslo
than that, illustrating how far the Kuwaiti could almoet have been done et any coupon.
market had developed in those four years. The big institutional investore juRt couldn't
Its KD10 million of 7~ per cent bonde were get enough of it."'I~vo of the major investore
dated 1980, the longest meturity so far done in Kuwait are the Kuwait F~nd for Asab
in the Kuwaiti sector of the Eurobond Economic Development (KFAED) and the
market. Arab Fund for Economic and Social
The Oslo issue was the start of a string of Development (AFESD), For them the major
first-class nsmes to enter the market: concem is quality rather than yield on the
Finnish Mortgage Banks and the Norges securities they invest in.
Kommunalbank, then the first foreign cor- For those concemed with yield, however,
porete names, Occidental International the KD sector started to beccr cent for the Eurobond
from the performance of the bonds in the market and dcaling emounts have risen to
secondary market. The Occidentnl i~.yue, for tiD100,000.
instance, was priced at 99} in May. As a result of t hese refinements in the
Soon after trading started it �~n~ do~~~n to secondary market, institutions in Kuwait
97-97}. By the end of May tradin~ w�as at have been enrnurnged to trade their port-
95}-96}. Even the Banque Natiunale de folios and im�e;t more funds in trading,
Paris KD10 million 10-year is,~ue ~~t per pushing up prire~ end turnover. According
cent took some placing, And thi~t had a to �'illiam Hi~hn, the senior securities
powerful management group lk~liind it: trader of AC1'~, the volume of his com-
Kuwait im�~~~tuicnt ('AnnNnny, RAII, pany's sernnd~in~ market xctivity in 1978
14amifactumr.~ Hiincrver Ltd., Natianal reached F~D1~2 million. This, he pointed
R+~nk uf Ahu I~hnl~i, Nntionel Commercial out, is "elmc~t equal to 50 per cent of the
R~~nk end tiul~~man I~rothe~ Intemational. total outstHndin~ and virtually equal to the
And sh~~r1-term rnt~~~ had eased a little by total ne~~� ic~ue ~�nlume for the year. In
the time th~~ i~~uc wns lnunched at the end addition, thc nrerage size of trade
of Mey. N~~~~~~rthcl~~~.y t.he Iii~1P ivsue was (KD98,0001 ~vi~s cxtremel~� high by normal
siti~~ificnnt fur th~~ numher of non�Kuwaiti Euromarket stnnd:irds".
h~~uses it Imw~;iil into the mnnfigement 'L'he other t~ttrni�ticros for borrowets on the
group. hD market h~i~�e lx~en the strength of the
The pm~once of both Manufacturers dinar and thr inlrmst rate differentials with
Henover end ~nlamon - though that to the dollar.
~ume extent mflectcd relationships with the The dinnr'. ~�aluc is based on a basket of
}x~rrower -~+~n~ n henlthy development for currencie~ ~~�liirh the Central Bank of
the Kuwnit mnrket, t~ecause it indicated the Kuw~ait d~x~~ ~iut di.clcsse. The consensus
~idening rnn~;~ of institutions outside amon~ l~tii~krr.i iii Kuw~ait, however, is that
Kuweit thnt nre y~rc~~ered to operate in the the basket is 50-55 per cent dollaz, with a
market. Merrill Lynch had earlier started large proportion of yen and Deutschemarka
nieking e mnrket in KD bonds. Before that, in the remainder. Certainly the dinar stayed
F.umpean i~nnking Company was the only close in value to the dollar compared with
house in I.c~iidon thnt claimed to operate in the massive rises registered against the
the KD secondary market. dollar by the Swiss franc, yen and DM in
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1978, though it did naturally appreciate a the Third World c~untriea fall into this
little before the end of 1978. Any real group), and those from the developed world
revaluation is urilikely, however, because that have large financing requirements but
the KD is not an'mternational currency. Nor are sophisticated in selecting their markets
is the Governm~~nt keen to allow this to (like Oslo) end those who have contrects in
happen because too..*.nany local interests the region and need to hedge future
_ and too many Third Wc~rid countries (which payments in the dinar or any other local
have been granted aid ii~ ,.;~nars by the two currency.
development funds in 2:~~wait) would suffer The Korean Development Bank issue
as a result. And as William Hahn has earlier this year was typical of this last type.
pointed out, "there are no real benefits to be The bank sought the dinars on behalf of
derived from a revaluation", because the Korean contractors worki~7g in Kuwait. The
most important cause of inflation in Kuwait Occidental issue is thought to have been
would not be overcome. That is "the im- done to hedge Saudi riyal receivables from
balance between supply and demand and contracts the company hss in Saudi Arabia.
the current structural problema which cause The thinking behind it was that the riyal,
the imbelence". like the dinar, is linked to a basket - in the
The interest rete differentials had grown Saudi case the IMF's Special Drawing Right
quite dramatic by the time of the Carter - in which the dollar is predominant. The
dollar support package last November. two currencies should therefore move
Liquidity in the KD market had beoome roughly in parallel.
more and more pronounced as institutional What the KD market most needs now -
investois kept their funda in Kuwait apart from a better-developed money
rether than tsldng them out of the country. market in which the Central Bank controls
The resulting pressure on rates allowed liquidity properly - is another active
Oslo to borrow at 7~ per cent when 9~ per market-maker like ACTS. There w~as talk
cent would have been the going rate in the last year of one of the other big Ku~~~aiti in-
dollar bond market. vestment companies setting up a trading
The borrowers who use the dinar market operetion, but nothing has so far come of it.
fall roughly into two categories: those that Until such a development occurs, the
need any funds they can raise anywhere, Kuwaiti secondary market ~~~ll be
usually because they have already borrowed monopolised by ACTS which might not be
heavily in other markets - or because they able to cope if there was ever a sudden rush
are not acceptable to other merkets (most of ~ to liquidate bond positions.
COPYRIGHT: 1979 ZC Magazines Ltd.
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LIBYA
BRxEFS
PROSPECTZVE TRTP THROUGH ~FRICA--CoI Qadhdha~i. has wri.tten to certain African
ch~e.fs o~ state to announce his intenti,or~ to undertake, some ti,me dur3ng the
year, a trip through black Africa. The puxpose o~ this trip wi11 be to study
conditions for a reconc~.llation among Mu~lims of the continent. Among others,
Nigeria, Mali, and Togo responded ~ayorablg. Emperor Bokassa Z has also
signaled his agreement to the proposal. jText] ~~ar~s'VALEURS ACTUELLES in
French 20 Aug 79 p 11]
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SUDAN
INTERVIEW [dITH SUDANESE ATTORNEY GENERAL
London THE MIDDLE EAST in English Sep 79 pp 36-37
[Interview with Hassan Turabi, attorney general, by Pascale Villers Le
Mc~y, date and place not given]
[Text] In Sudan, as in the rest of the Arab world,
Islam is gaining in influence and the once banned
Muslim Brotherhood is now represented in the Govern-
ment. Former Brotherhood leader Dr Hassan Turabi,
who has just been appointed Attorney General, spoke
to Pascale Villers Le Moy before his appointment
about the role of Islam in Sudan. Dr Turabi, who
rarely grants interviews, is a member of the
Sudanese Socialist Union (SSU) Politbureau and of
the Government's Committee on Islamisation. He is
also brother-in-law to Sadeq al-Mahdi.
- A s furmcr Icnder of the Muelim work under~,-n~und and our inAuence sur-
t~ Brothcr~ in Sudnn can you describe passed thnt ~,(thr ('~,nununists. We took the
the histor~� of ttiis movement and ite initiati~�e iii tlie October Revolution,
rclatione ~vith Ihc Fg~�ptian Brother- although th~~ ('~~iiii~iunists joined later and
hood? aecured gixki }k~iti~~n~ in the post�revolution
O In the l~l.~l1s, ~ timnll group of students period. ARc~r l:k~! ~~�e Uecame a political
formed the ?~ti~~�ement for ~Slamic organisation ~~�ith ~ui Islnmic Charter, and
LiUeration to ~ti,unter the Movement for we more ~~r 1~~.~ ~v~inpelled the traditional
National I.il~,rnti~m of the Communiste, parties to ~id~~E,t th~~ principle of an Islamic
wno at the timc hiid contml of the students. Constitutiut~.
The Sudnne~c ('ommunists were closely In 19Gf ~~r ~k�nu:~drd pnrliament to dis-
linked to thcir F~ptian comrades, so in solve the ('~~i�munivt Party. It was only the
their attACk~ the~~ e~~ociated us with the second timr in hi;,tun� that a Communist
Muslim Brothen in E~�pt. Party hnd lk~m di~a~h~ed in a liberal
_ In 19aS ~~t~ ndapted the same name, democrac~�, \\'r mnde a parliementary
although ~~~e hxd uniy cultural ties with the elliance ~~�itl~ thi~ l~imm~ Party, which was
Egyptian nu~vrment. In Egypt the Brothera based on thr ;\n.;~r ~~rt af the Great Mahdi.
had to com~4~te ~~ith the national seculaz We ~ti~~~ntc~j t~~ ndupt n Constitution con-
parties and lk~rnme a mass organisation, teining ni;ulr l~lnmir pn~~�isiona, and this
_ but we ~.�ern nn ~~litist n~o~~ement. We made would have given us aome power. We could
alliances ~~itti tlir truditianal parties, which have exerted pressure not only by appealing
were also h;i.~~j ~~n mli~ious sects. to religion but also to the Constitution.
Under Gr~irr,il Aliboud (1958-64) the Nimairi's A4ay takeover, however, took us
perties ~~�cn~ l~:innrd but we continued to by surprise and we were the first to be put in
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jail, as the ne~~� Government was dominated individual. Its laws, however, are drawn up
by Communists. Then we joined the eccording to the Sharia.
Netional ~ont in opposition, with Sadeq al- The Christians hsve no special law. -
Mahdi's Umma Party and Sherif al-Hindi's Christ advised them to follow the Roman
Netional Unionists. Law, and there is no reason for them to feel
- O Since the National Reconciliation of offended if law becomes tslamic. According
July 1977 you are the only leader who to Islam, they would enyway be granted
hae co-operated completely with the freedom of reli~ion, of education, of pro-
Go~�ernment. Why? pagation of the faith and even some local
O Reconciliation was rather unpopular with autonomy for non-religious affairs. But we
the Muslim Brothers at first. But we ex- don't want politics and economy to be
plained that it ��as in our interest to work separated from reli~ion.
from w~thin to achie~~e otir aims, and the Being Islamic dcesn't mean not being
change of policy was accepted because we African; Sudan will remein a crossroads
ha~�e a good organisation and a democratic between the Arab and African worlds. It
system of decision-making. This is also why could even revive the consciousness of
we never split up like the National Unionists Muslim.q in other African countries.
and the Umma. Muslims form the majority in Ethiopia, the
As long as President Nimairi keeps his totality in Somalia, 65 per cent in Tanzania,
word and allo~+s us to function and to pro- the majority in Mozambique and 65 per
pagnte lslam, ��e are satisfied. It is to our ad- cent in Nigeria - there are 56 million
vantage to support Nimairi, for whcever Muslims in Nigeria against only 35 million
replaced him might be le~v u>]erant or lesa ~n Egypt.
reli~ious. In Sudan we have completely eliminated
u Whnt had been your in(lucnce since secularism. The May Revolution now
lhe reconciliation? accepts Islam in principle even if not in
O Frankly, the result hes L�een dis- practice. But we are conscious that Nirnairi
appninling. No measures have been adopted alone was responsible for the conversion,
to enforce Tslam. The s;~ecial committee set and thn~ thrrn nm, unf~~rtun~~,ely, ~�ery few
up for this purpose has been working very genuinc l~l~u~iic cl~~inrntv in the ('~vem-
slowly. Some legislation has been presented ment.
u~ the Agsembly without success, including [7 nu ~�ou r+~~o ~�uurself ~y ~ po~tiible
the prc~hibition of alcohol and gambling and Khum~�ini?
the suppression of payment of interest in O In our m~~~�cmri~t jx~r~onnlities are not
banking. impurt~~nt. lt ia thi, j~nrty w~hich is itu4x~t-
Our rea] success has been at the secial txnt. 1'uu ~huuld nvk 'would the Muslim
level, end as ]ong as lslem i~ progressing Brothcr~ in ~udnn ~tnge a coup similar to
socially it will ultimately find political ex- that of Khomeini'?' Perhnps, but we miiy not
pression. I know that this country will need to do s~~. In lrnn the circum~tAnces
become Lglamic, either gredually or by a w~ere diffrmnt. Ivlnm ~ti~ns suppres5ed; it hed
coup. to expicx~e. 1~'e in Sudnn can expre.ss
? Doesn't that justify thc Southerncrs' our~el~�cs. Rut if this chnnged end the
feare? regime 1~ec�nme hc~tile to lslam, then we
o The fear in the South about Islamisation would mtike n re~~olution. As long es Presi-
is a survival of the prejudice Ageinst the dent Nimniri is in }x~~~~er there iy no danger
North. As Christians or Animists the of that.
Southerners have nothing to fear from ? How� imporliint for Sudan is the
Islam. The Muslim Brothers have worked Communist Ihr~nt ~ti~hich Nimniri ~ften
very closely on many occasions with the mentions?
Southemers, notably with the Sanu party in O I don't tliink that the Communists con-
the Constituent Agsembly after in- stitute a scriou9 thmet to lslam in Sudan.
dependence. We were the first to advocate Before, the~� cc~uld hn~�e tAken over by force,
regional autonomy for the South. as they h~id n vcry ~~~ell orgenised party, But
An Tslamic state is not a state of Muslims, we beat 1}iem on their own gmund,
but a state which leaves private life to the recruitin~ o?u memUers from their usual
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supporiers: atudente, Govemment officials, mediators not beceuse we are atrong, but
Army, lelx~i~r. ('.ommunists today could be a hccnuse we nre neutrnl; nnd we are neutral
threat anl~� if they mnde an alliance with ex- l~ecnuse we cannot afford to offend anyone.
temal farces. In the F.thic~pien-Fritreen diapute, Sudan
O Do ~�ou bclic~~e in the multi-party could heve been very influential, but the
system? various liberation groups are now more in-
O It j~~st d~e~n't w~ork in Sudan. VVe tried it fluenced by Syrie, Iraq end the
tw~ce and Giiled. Thmretically it gi~�es more Communists. Sudan has been trying to
libert}� thnn e}x~litical system w�here unify the fronts, unsuccessfully so far. It will
everyone must Hccept a certain point of be very difficult, especielly as the two main
view, bt~t it usually creates a political groups are ideologically opposed. There are
vacuum. Diffemnces de~�elop that lead to a Islamic, Christian, Baathist and
coup. But ~~�e Nre tn�ing to change the nature Communist elements amon them which is
of the SS[' to mnke it an organisation broad cnnfueing. g ~
enough to tillo~~~ discu~aion. The Eritreans pretend to be inde~~iu1~�nt
O Vti'hat nre the chences of Sadeq al- of the super~w��crq or of nny n~~~~intw
1~lahdi be~coming s political leader? effilintion, but the~~ cnnnot he. li~ ~~~~~~~�er,
O R'hether he nccPpts it or not, Sadeq is the Suden will al�~aya be s~�mpnihetic t~~ 1 h~~m,
religiouc I~~nder of the Ansars (46 per cent of end the Arahs will nl~vnys bnck them
the Sudrine~e ~wpulntion).'I~aditional]}� the hecnuse, fundnmenlnlly, thcy nre Ariihy nnd
Msars tire the n~;ents of an Imam to ~�hom m~inl,y Mu5lims.
they mu~t be lo~�nl nnd for whom they must O What do you lhink Hh~ut the in-
die. But t}ic~� hn~�e hed no Imam since the tegrntion w~ith F,Kypt7
last one died ~~fter the 19~0 revolt when some O We thought that reconcili~.~ ;on wnuld
3,000 An.;ic~ ~~�ere killed by I~imairi's relieve the pressure that compel'.~d Nimairi
soldien. ~:idcy is }x~pular among them to ally Sudan clc~ely with N~,~~pt ('I'he
becau~e }ie ~~�n~ the lnte Imam's second in ~pp~y;tion forces w~ere besed in Libyr nnd
commn?id, ttie lrader of the Umma and, Ethiopia). But reconciliation was very elow
later on, of thc i~ationel ~ont outside and a clase link with Egypt still seems im-
Sudan. Rut ii~ ~~~nnts t~~ be a national leader portant 1'or the yecurity of the regime.
and not lr:jd~~r uf p~~rt icular group. Therefore the Camp David agreementa
The An.ir~ didn't understand a�h~� he cannot be judged on their merits.
joined thc G~~~�cmment, and later on, u�h}� The Muslim Brothers stand for more
he withdn~~~~ r~�rr the Camp Da~zd i.cue. cultural integration with Egypt. We don't
But Sadiv~ ~~ill cnme bnrk, He will still ha~�e even mind an organic integration. Our
a role ta E~l~i~� ns ,~n intellectual and a country is big enough and there is a pop- '
political l~~:i~irr af inteti~rity. But Sedeq's ulation gyp ,
ambition i~ knr~~ii, iind \'imairi kno~is that problem in E t. Of courwe the
there is ~,nh~ ~~nr ~,r~t et the top. Egyptian politicians have alweys been in-
- ? R'hAt do ~�uu think of Sudan'~'foreign fluenced by the concept of sovereignty over
~~~~y~ Sudan, but the ordi?iary Egyptians think
O Unfortuii:urh�, the lr:ideiyhip in Sudan the Sudanese are just other Muslims. Sudan
has ah~:i~~ lk�rn n~lnti~�ely weak intemall~�, has always been subject to Egyptian in-
Auence and many Sudanese are half
eo thet it could not properly free itself to Egyptien,
exert influ~nce Abroad. With intemal Sudan will not be able to support Egypt
}Hditirel stfil~ility and a better ecc~nomy, it openly, as it cannot afford to be boycotted or
c~~uld he ciif(i~rent. We heve heen chosen as to lose the support of the Saudis, because it
depends too much on t.heir economic help, O
COPYRIGHT: 1979 IC Magazines Ltd.
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SUDA~
BRI EFS -
CHOLERA EPIDEMIC IN THE SOUTEI--Current estimates have some 100,000 persons
threated by cholera in the environs of Juba where an epidemic had already
sCruck 300 individuals by the end of July. Some 40 of these victims died.
The World Health Organization [WHO] is currently combatting the epidemic.
Great Ilritain has decided to give this organization 12,500 pounds sterling
in the'~'form of tetracycline, oxytetracycline and water purification tablets
to aid in the campaign. [Text] [Paris MARCHES TROPICAUX ET MEDITERRANEENS
in French 24 Aug 79 p 2327]
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UNITED ARAB EMIRATES
BANKING SECTOR FACES POLITICAL, FINANCIAL UNCERTAINTY
Londun THE MIDDLE EAST in English Sep 79 p 40
[ArCj.cle by Ann Fyfe]
[Text] The successful outcome of the political manoeuvrings which permitted
the new UAE Government to be announced in July has generated opCimism that
the question marks over the UAE banking sector prospects may soon be dispelled.
First and foremost among these questions is the fate of the Central Bank.
Meanwhile the new Government's avowed intentions to improve living standards
and revive the economy is likely to create more lending opportunities than have
been open to bankers in 1977 and 1978. Property and trade, which traditio~zally
offered most lending openings, dried up in these two years as a source of bank-
ing business because of the political and economic inertia. As the need for
new projects and imports was satisfied, construction and trading activity
declined--an entirely predictable process not meriting the term "recession"--
which was nonetheless applied to it.
In the case of the UAE however, future economic expansion and resulting banking
~ prospects have to be viewed with two fundamental constraints in mind: the fear
of inflation and the probably greater fear of continued iimnigration, which
virtually every new project, whether infrastructural or industrial, makes neces-
sary in this manpowerless society.
In tl~e spring of 1978 the UAE's 54 banks and 11 representative offices were
granted a relaxation of the severe "corrective measures" enforced a year earlier
to curb reckless growth in money supply, bank credit and inflation. As a result
of the original measures, money supply graw only 10.7 percent and bank credit by
21 percent in 1978 compared with the 70 and 80 percent movements recorded in
1976. The relaxation was cautious however, and lack of lending opportunities
on the whole prevented bankers from exploiting it. At the end of 1978 construc-
tion accounted for 33.7 percent of all bank lending (50 percent in Abu Dhabi
and 24 percent in the Dubai sector) and trade for 36 percent (40 percent in the
Dubai sector and 29 percent in Abu Dhabi).
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Property, however, is no longer an attractive proposition for bankers as
supp]yo uutstrips demand. Landlords with unlettable property on their hands,
together with their worried bankers, were able to lobby earlier this year for
a real estate bank and this institution was duly announced. With a Dhsl bil-
lion capital the Real Estate Bank was to take over 25 percent of the commer-
cial banks' loans to property and refinance them at softer rates (property
loans then totalled Dhs4 billion or Dhs6 billion including loans already re-
financed by the Currency Board).
The new bank subsequently got lost in the political uncertainties and its sta-
tutes were never finalised. Now that a political settlement has been reached,
it will presumably surface again in one form or another, and though it will
not be able to recreate a property boom, it should enable merchants to restart
their general activities by relieving them of a proportion of their debts.
Trad~
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too, is no longer growing by the huge leaps of Federal treasury, bl~t there is no official con-
the mid-70s; total UAE importa in 1977 and ~ation or denial.
1978 were Dhs20.2 billion ($S,3 billion) and &fore the commercial banks can start
Dhs20.5 billion ($5.4 billion) respectively. lending again they need to improve their
Against this stagnant background, contrac- depoeit bases, In many cases emong the
tors and suppliers have generally preferred newer smaller banks deposits are very small
federally financed projects and contracts to and lending capecity is therefore severely
the private sector. limited. Deposit famine is endemic to some
Shaikh Rashed on his appointment as extent where so many banks are in com-
Prime Minister committed his Govemment petition, but it has been exacerbated by
to improving living standards in the remote, recent outHows of cash consequent first
relatively neglected areas away from the upon the strengthening of foreign currencies,
main coastal towns. This can only be done and second upon the shock waves of the
by spending money. He also undertook to revolution. All the Gulf states are in
restimulate the economy - particularly its the eame boat in this respect. In an attempt
product?ve sector - all of which sounds to win deposit9 the banlcs have in mid-79
encouraging to bankeis. raised their interest rates to depositors, in
But there are a number of interests to be some instances to over 10 per cent, the
balanced ageinst each other here. First, the highest ever offered in the Gulf atates.
Currency Board wants no let-up in the fight Apart from the political d~marches and
egainet inflation, which it aeyB 1ti'R8 dOW11 i0 resulting economic optimism on the one
]fi per cent last year ae a reyult of itA tight- hand and the enforced rise in interest rates
money policy. Then the Miniatry of Plsnn- on the other, the third feature of 1979 hes
ing wants greater co-ordinetion in induslriel been the failure of the Bahrain/QatarNflE
projects while the National A.ssemhly wants currency-parity scheme, much hailed at ita
restimulation of the economy and a helt to birth in 1978 (when the dirham was un-
immigretion at the same time. Nonetheless, linked from the dollar) as a first step
the atmosphere ie considernbly more towards greater Arab currency unity. The
optimistic since Shaikh Rashed's eppoint- fluctuating dollar forced first Qatar and
ment than for some years. then the remaining partners to go their own
Whether a central bank is about to ways in revaluing.
eppear is not yet known. There is no point in It would be perilous to predict at this
hnving a central bank unless it enjoys point how these issues w~ll develop, what
centralised control over the major part of the powers the central bank will turn out to
~�arious Emirates' incomes. The existing have, how expansionary the long-dela~�ed
Currency Board has long complained of 1979 budget will be, how Shaikh Rashed ~~ill
being starved of foreign-exchange deposita redeem his promise to restimulate the
by the individual Emirates - a serious state economy, how concern over the ralue of the
of affairs indeed in a country that is so dirhem will find expression and how the
dependent on imports end whoee currency is banks will gear up to increased lending
at the mercy of international exchange�rate opportunities. But this is the time to be on _
Huctuatione. Strong rumour suggests that the look-out, as the features ��hich have
the Emirates have indeed agreed to hand characterised the UAE banking acene for
over 50 per cent of their oil revenue to the the past two yeais no longer apply.
COPYRIGHT: 1979 IC Magazines Ltd
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WESTERN SAHARA
DIPLOMATIC SOLUTION OF SAHARAN WAR SEEN AS DIFFICULT
London THE MIDDLE EAST ir. English Sep 79 pp 11-12
[Text]
By annexing the Mauritanian-held part of For the moment, the King has once more
the former Spanish Sahara, King Hassan of adroitly managed to rally the nation behind
Morcxco has undoubtedly escalated thie him - right acroes the political spectrum.
sirnmering desert war, and brought nearer But this superbly played theatrical de~~ce
the possibility of war with Algeria, which is hes not solved Morocco's persistent social,
continuing to back the Saharan liberation economic and political problems. Nor
front, (Polisario). Mauritania has made should it tie seen as a long-term success.
clear its desire to withdraw fmm the conflict The l'ti hxs recently hecn hesitnnt ehi,ut
by ending it~~ occupation of the territory and its ~uppurt fnr Hr~.csen, whc~m it fenrs ma,y Ko
alu~ its defence pact with Morocco. ~ he �,un~ N�A\' AS t he Shnh of iran and
King Hassan had no choice but to seize \icnr;iRu~~'s I'r~�,ident Ann~tns~~ S~nrnn.n, A
the territory when Mauritania agreed to CcmRressi~m~l fnct�fincling mi~sion hns bc~~~n
cede it to Polisario. Any sign of weakness or ~�i~iting 1Vlorocco, A16eria nnd 1~4auritnnie tci
hesitation could have been disastrous for the decide ~vhether Wa~hin~ton sh~n~ld put its
King, who hes staked everything on mcmey on the King and alter it,9 arms
"recuperation" of the Sahara. He told a ctrategy to provide :~4orc~cco with the
recent press conference that he would fight ..~ea3~xms it bndly need~ to win the Saharan
Pnlisario "to the end". ��ar. Rut intelligence reports indicnte thnt
Nevertheless, despite the clear pro- ?nilil.ary di~enchentment is increaqing in
vocation of the annexation King Hassan hes Morocco, and that a coup is a distinet
been at pains to leave open a way for I~ssihility.
negotiation with Algeria in an attempt to The US would not like to see a radical
avoid all-out war. For example, he hes re~ime in Morocco and will back Hassan as
depicted Libya as the real villain of the Ic,ng as his position is relatively secure. But
piece (and the force behind Polisario), and equally it cnnnot afford another Iran-type
has said that in the event of war between fiasco which could irreparably damage its
Algeria and Morocco both sides would be so ~lready tamished image in the Middle East.
exhausted that the real victor would be The abortive mililary uprisings which
`~Po>i� took place in Morocco in 1971 and 1972 led
King Hassan:s new conciliatory attitude Hassan to curb the military's power, but
is an indication of Morocco's weakness. He this has had the negative effect of increasing
has said that it will not be clear for at least resent.ment. The armed forces are angered
six weeks, whether it will be war or peace, by the lack of promotions, and above al] by
but that prospects for peace may even have restrictions on their activities in the Sahara.
been improved by Morocco's actions. This Only the national fervour for "recuperation" ~
;~uggests that he is hoping to negotiate a of this territory has prevented oyert protest,
settlement with Algeria. especially among younger officers, over
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_ deteriurating living _sCanderds and :Nnurit~inia, which is a vital plnnk in its
esc~lat.ing prices. ~'Ve:+t African strnle~,ry. Frnnce w~~nts
'I'he Algerinns at present have every . Mnurilf~nin to rn~nnin ~n indc~pi~ndrnl ,y(n~r
rer~son to yit and wait. They scored an nnd w~uuld hnve to c,~~~x~se nny Mun~ccr~n
impressive diplomatic victory at the OAU r~ttempt to l.nke it over. Dipl~~matic wurces
. summit which came out stmngly against lold The Middle F,ast thel it hnd elready
]14orocco and in favour of Polisario and are intervened once to }~revent such a develop-
likely to strengthen their position further at ment.
the Non-Aligned conference in Havana. Yet King Ha~.tinn has urged Polisnrio to
They may evPn gain a two-thirds majority if "retum to Mauritania" es they ere "nll
and when they take the Seharan case to the Mnurilania oppositionists", either to feke it
~`1� over or to help it. The King hes also said
If King Hassan refuses to make con- that Algeria should now tum to'Mnurilania,
cessions, Al~eria could be forced to take to obtain its lung-desired outlet to the
some more direct action. President Chadli Atlantic.
would prefer to preserve Algeria's inter� So far, Polisario is the main loser in the
national reputation es the most responsible affair. It is bitter about what it sees A9
North African Arab state and to pursue the Mauritanian treachery in pulling o~it frorn
Saharan cause diplomatically. But his the Sahara before the S~tharens coiild ingtall
position domestically is not completely themselves, leaving the a~n~~ free for
secure and he is under pressure from Murocco to tr~ke over. They ~uff~~red I~iidl~~
National Liberation Front (NLF) leader in the bnttle of Rir Anznren nR;~inat
Salah Yahyaoui to adopt a hxrder line on Morocc~n forces who pre~rnled fh~~m frum
the Saharan issue. U all other avenues are t~king over Dekhla, the cn ~ilal of
closed he may be obliged to indulge in a Mauritanian Snhera. }
policy of sabre�rattling ageinst Momcco's 7`he latest events hnve l~rou ~h g
takeover of the Sahnra or even to undert,ake nnd Moroccn to the fore. A.g o~ e di~
lomel
limited military action in support of I
put it "the nffair is, nnd nlw~nys hns been,
Polisario. essentially a proxy war bel~~een AlRerin end
The French, for their part, have been Mc~rocco".
keeping a very low profile in recent weeks G�itacts he~ween the two ~tntes nre con-
despite their obvious interests in the re~ion. tinuing, but a diplomatic solution will be
They are anxious to alienate neither difficult to achieve, since compmmise would
Morocco nor Algeria, but like the US they serinusly emharress both govemments
do not want to drop King Hassan entirely, ~~~~ne5tically.
as there is no obvious successor and chaos Meanwhile, the big powers weit on the
would almost certainly follow his overthrow. sidelines to see which wa the wind is blow.
But Paris is deeply concemed about ~ng. None of them wants t beck a loser. ?
COPYRIGHT: 1979 IC Magazines Ltd
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YEMEN ARAB REPUBLIC
WEST GERMAN UNIVERSITY PUBLISHES POPULATION STATISTICS
London THE MIDDLE EAST in English Sep 79 p 89
[Text] Westein organisations and how many Yemenis were
media are often ecathing about working in Saudi Arabia.
, the quality of statistica Population estimates still varied
emanating from Middle East from 6.5mn to 15mn, with the
countries, and it must be numbers working in Saudi
admitted that there are Arabia ranging between one and
deficiencies and distortiona in two million males.
some of them. The detailed results of the
Yet when a Middle East cenaus and surveys have now
country does prepare an been published in Europe by
accurate cenaus and publiah its Tuebingen University in West
results, many Western Germany*, though the broad
organieation end journals eeem resulta were available in Sanaa
to fail to notice it. The Govern- some four years ago, The impor-
ment of North Yemen undei tant figures are:
took a population and housing 1, The in-country population
census in February 1975 and amounted to 4,705,000 people in
followed it up with demographic February 1975;
and cartographic surveys. 2, The population is very
The census and its aseociated yo~g~ 47�ro of the people were
surveys were carried out with under 15 yeare of age at the time
_ the aseistance of the Swiss of the census;
Govemment and a tesm of 3. There were about 400,000
Swiae experte. The results upset short-term emigrants working
a large number of existing ideas outside the country, mostly in
about the population of North Saudi Arabia, at the time of the
Yemen snd the number of cenaus;
Yemenis working in Saudi 4. About 150,000 to 250,000
Arabia, for example. Yet few Yemenis are living permanently
authorities and journalieta seem outside the country.
to have taken heed of these 5. Some 72% of the labour
reaulta. force worka in agriculture.
The Middle East conducted 6. The in-country population
a aimple straw poll and asked a would have passed 5,000,000 in
number of people who claimed 1979.
some knowledge of the Middle What about those 1.5mn
East what they thought North Yemenis supposedly working in
Yemen's population was and Saudi Arabia? Even the G:ntral
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Planning Office in Sanaa had waye
Tin the purchese of a wide W ~
estimated in 1975 that there range of coneumer goods, in + ~
were 1,234,000 living outaide the paying bride ricea (the bride ~ n ~0� ~ r �0� �D ~ ~ ~ '
P m~ vr~vn:vcoricaao.- rc ~
country with lmn of theae in price has increaeed enormously ~ w o ~
Saudi Arabia. The census over the last few years and now W ~ ~
findings show that this estimate ~ amounts to between 20,000 and `oi w
was incorrect. ff the total pop- ~ 50,000 rials) arid inveatment in o cv cq r N N r ao v o ,r~
ulation in 1975 wae 5mn, there ~ housing, agriculture, small Y~" ~ N ~ N c~ o ri T N N i
could not have been more than businesses and motor vehicles. ~ ~
1.5mn ms:as in the 15-59 age One result of the large w ;
group. It was apparent that migration of labour to Saudi o~ n~~~~ M o M a '
nowhere near 100 per cent of this Arabia is an extremely serious .c ~ CD N O f0 h CO M h Ch ~ > C'1 ONO ~ a0 (O (~D ~ n O
~ C 00 aD CO ~[i' r 'cT 00 1~
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COPYRIGHT: 1979 IC Magazines Ltd
CSO: 4820
END
39
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000100090043-4