PROPOSED REMARKS BY WILLIAM H. WEBSTER DIRECTOR OF CENTRAL INTELLIGENCE AT THE WORLD AFFAIRS COUNCIL OF NORTHERN CALIFORNIA SAN FRANCISCO, CALIFORNIA SEPTEMBER 19, 1988

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP99-00777R000302240002-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 22, 2016
• Document Release Date: May 30, 2012
• Sequence Number: 2
• Publication Date: September 19, 1988
• Content Type: REPORT

T
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
rnv UO-UJUO
8 September 1988
You are scheduled to make two speeches to the World Affairs Council of
Northern California on 19 September -- a 30-minute address to about 600 people
on intelligence in the 1990s,.and then 10-15 minutes of remarks during a
dinner with 25 chief executive officers. The proposed remarks for the CEOs
r
d
ib
a
e
escr
ed in the attached package.
In your speech on intelligence in the 1990s, you discuss three areas that
are and will continue to be of great interest to U.S. policymakers and the
Intelligence Community -- the Soviet Union, South Asia, and the Persian Gulf.
After describing the Intelligence Community's role in these areas, you discuss
two issues that are closely related to these geographical areas -- the
proliferation of chemical and biological weapons and countering the threat
posed by hostile intelligence services.
This speech has been prepared with the assistance of many offices
throughout the Agency. Bob Blackwell, NIO/USSR, at the direction o c--]
rovid
d `
bst
-`
p
e
u
ntive
in the Directorate of Intelligence have helped prepare this speech -- theit-Cb
Office of Soviet Analysis, the Office of Near Eastern and South Asian
Analysis, and the Office of Scientific and Weapons Research. The Agency's
Counterintelligence Center and the Intelligence Community Counterintelligence
and Security Countermeasures Staff have also assisted in this effort. The
final draft was coordinated wit for substance and for policy 11
sensitivit
After making some introductory comments, we suggest that you mention the
comment by Vernon Walters -- "Americans have always had an ambivalent attitude
about intelligence. When they feel threatened, they want a lot of it. And
when they don t, they tend to regard the whole thing as somewhat immoral."
You then say: "With so much going on around the world that affects our,
national security,. I think the American people want a lot of intelligence."
You begin the body of the speech by emphasizing that the Soviet Union will
remain the primary focus of our intelligence collection and analysis in the
1990s. You then discuss Gorbachev's domestic reforms and foreign policy, and
note the impact of glasnost on nationalist feeling in the Soviet Union and the
spillover effect in Eastern Europe.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
y
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30 : CIA-RDP99-00777R000302240002-2
In discussing the intelligence challenges in South Asia, you discuss the
impact of the Soviet troop withdrawal from Afghanistan and consider the future
of Pakistan following President Zia's death.
Another region of great strategic interest which you address is the
Persian Gulf. You mention the enormous costs -- both in human and economic
terms -- of the Iran-Iraq war. You discuss the implications of the conflict,
focusing on the precedent set by the first sustained use of chemical weapons
since World War I. You state that the proliferation of chemical and
biological weapons "is one of the most difficult intelligence challenges we
face -- now and into the next decade. It is also one of our most important
tasks, and we will continue to provide U.S. policymakers with accurate and
timely information on this issue."
After discussing these intelligence questions, you stress the need for
effective counterintelligence and security countermeasures.
You observe that "we cannot always anticipate the demands that will be
made of us -- some great and some small." You mention a humorous story --
included in your draft remarks for Bohemian Grove -- about a military band
leader calling the Agency for the score of an African national anthem.
You then emphasize the importance of attracting top people to the
intelligence profession -- risk takers, not risk seekers. The conclusion
reads: "With such people we can continue to provide the intelligence that
policymakers need in order to make wise decisions in the interests of our
national security. This is what you expect of us, what all American people
expect of us, and we are doing our very best to supply it."
Your proposed remarks are attached.
Bi l Baker
Attachments:
As stated
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
PROPOSED REMARKS
BY
WILLIAM H. WEBSTER
DIRECTOR OF CENTRAL INTELLIGENCE
AT THE
WORLD AFFAIRS COUNCIL OF NORTHERN CALIFORNIA
SAN FRANCISCO, CALIFORNIA
SEPTEMBER 19, 1988
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
WHEN PHIL HABIB ASKED ME TO SPEAK TO YOU, HE SUGGESTED THAT I
DISCUSS WHAT THE MOST IMPORTANT INTELLIGENCE ISSUES OF THE 1990s
WILL BE. WHAT PHIL SUGGESTED REMINDED ME OF AN OBSERVATION ONCE
MADE BY A NUCLEAR PHYSICIST: "PREDICTION IS VERY DIFFICULT,
ESPECIALLY ABOUT THE FUTURE."1 WITH THAT CAUTIONARY NOTE IN MIND,
I WILL MAKE A FEW PREDICTIONS ABOUT SOME OF THE KEY ISSUES THAT NOW
CONFRONT THE INTELLIGENCE COMMUNITY -- ISSUES THAT WE EXPECT TO BE
WITH US WELL INTO THE-NEXT DECADE.
MY GOOD FRIEND, GENERAL VERNON WALTERS, FORMER DEPUTY DIRECTOR
OF THE CIA AND NOW OUR AMBASSADOR TO THE UNITED NATIONS, DESCRIBES A
VIEW HELD BY MANY IN THIS COUNTRY ABOUT INTELLIGENCE. "AMERICANS,"
HE SAID, "HAVE ALWAYS HAD AN AMBIVALENT ATTITUDE TOWARD
INTELLIGENCE. WHEN THEY FEEL THREATENED, THEY WANT A LOT OF IT.
AND WHEN THEY DON'T, THEY TEND TO REGARD THE WHOLE THING AS SOMEWHAT
IMMORAL."
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
WITH SO MUCH GOING ON AROUND THE WORLD THAT AFFECTS OUR NATIONAL
SECURITY, I THINK THE AMERICAN PEOPLE WANT A LOT OF INTELLIGENCE.
AND A WHOLE RANGE OF ISSUES ARE COMMANDING THE INTELLIGENCE
COMMUNITY'S ATTENTION -- INTERNATIONAL TERRORISM AND DRUG
TRAFFICKING, THE PROLIFERATION OF ADVANCED WEAPONS, AND TECHNOLOGY
TRANSFER, TO NAME JUST A FEW.
TODAY I WANT TO CONCENTRATE ON THREE GEOGRAPHICAL AREAS THAT ARE
AND WILL CONTINUE TO BE'OF GREAT INTEREST TO U.S. POLICYMAKERS AND,
THUS, OF GREAT INTEREST TO THE INTELLIGENCE COMMUNITY. THESE AREAS
ARE THE SOVIET UNION, SOUTH ASIA, AND THE PERSIAN GULF. AND I WOULD
ALSO LIKE TO DISCUSS TWO ISSUES THAT ARE TIED TO THESE GEOGRAPHICAL
AREAS -- THE PROLIFERATION OF CHEMICAL AND BIOLOGICAL WEAPONS AND
OUR CONTINUING NEED FOR COUNTERINTELLIGENCE.
THE SOVIET UNION WILL REMAIN THE PRIMARY FOCUS OF OUR
INTELLIGENCE COLLECTION AND ANALYSIS IN THE 1990s. ITS MILITARY
CAPABILITY, ITS EFFORTS TO INCREASE GLOBAL INFLUENCE, AND ITS
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
AGGRESSIVE INTELLIGENCE ACTIVITIES ARE A SERIOUS THREAT TO U.S.
INTERESTS.2
GORBACHEV'S (( GORE BAH CHOFF'S )) EFFORTS TO REFORM HIS
COUNTRY HAVE NOT FUNDAMENTALLY ALTERED THESE TRUTHS AND, IN FACT,
MAKE THE SOVIET UNION OF EVEN GREATER CONCERN TO U.S. INTELLIGENCE.
LIKE MANY OF YOU, I HAVE BEEN FASCINATED BY WHAT IS OCCURRING IN
THE SOVIET UNION. GORBACHEV HAS STIRRED UP THE STEW -- BRINGING NEW
LIFE AND DYNAMISM TO SOVIET POLITICS AND PUSHING A SERIES OF REFORMS
THAT NONE OF US COULD'HAVE FORESEEN FIVE YEARS AGO.
THE FORCES OF DEMOCRACY ARE MAKING SOME POLITICAL AND ECONOMIC
INROADS. ALTHOUGH THE USSR CERTAINLY IS NOT HEADED TOWARD DEMOCRACY
AS WE KNOW IT, TODAY'S SOVIET LEADERS APPEAR TO UNDERSTAND THAT
THEIR SYSTEM IS FALTERING LARGELY BECAUSE IT HASN'T GIVEN THE PEOPLE
ENOUGH BREATHING ROOM -- ROOM TO INNOVATE, ROOM TO INQUIRE, AND ROOM
TO INVESTIGATE.
CHANGE IS OCCURRING IN THE AREA OF FOREIGN POLICY AS WELL. THE
SOVIETS ARE LEAVING AFGHANISTAN AND ELIMINATING A WHOLE CLASS OF
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
NUCLEAR WEAPONS UNDER THE INF TREATY -- A PROCESS THAT INCLUDE;;
UNPRECEDENTED ON-SITE INSPECTIONS OF SOVIET MILITARY FACILITIES.
THE DRAMATIC NATURE OF THESE POLICY CHANGES CLEARLY HAS PROVOKED
CONTROVERSY WITHIN THE SOVIET UNION. A MAJOR POWER STRUGGLE IS
UNDER WAY BETWEEN REFORMERS, 1,1HO BELIEVE RADICAL CHANGES ARE
NECESSARY TO MAKE THE COMMUNIST SYSTEM WORK, AND CONSERVATIVES, WHO
FEAR SUCH CHANGES COULD DESTABILIZE THE VERY SYSTEM THEY ARE TRYING
TO SAVE. THE OUTCOME OF THIS STRUGGLE WILL AFFECT HOW FAR AND HOW
FAST REFORMS PROGRESS, THE EXTENT TO WHICH CENTRAL AUTHORITY IS
RELAXED, THE GENERAL WELFARE OF THE INDIVIDUAL, AND HOW COMPETITIVE
THE SOVIET SYSTEM WILL BE OVER THE NEXT FEW DECADES.
NEITHER WE NOR THE SOVIETS KNOW FOR CERTAIN WHERE THIS REFORM IS
LEADING. THE PROCESS WILL BE LONG AND DRAWN OUT AT BEST, REQUIRING
GORBACHEV TO OVERCOME ENORMOUS POLITICAL, ECONOMIC, AND CULTURAL
OBSTACLES.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
THERE ARE STRONG REASONS TO DOUBT WHETHER A SYSTEM DESIGNED To
CENTRALIZE AUTHORITY, MAXIMIZE GOVERNMENT CONTROL OVER ITS PEOPLE,
AND CONCENTRATE RESOURCES ON BUILDING UP THE NATION'S MILITARY
STRENGTH CAN BECOME MORE DECENTRALIZED AND DEMOCRATIC IN ITS
DECISIONMAKING AND MORE SOLICITOUS OF ITS PEOPLE. THE NATIONALIST
UNREST IN THE BALTIC STATES, ARMENIA, AND OTHER REGIONS OF THE USSR
WILL TEST THE SOVIET SYSTEM'S ABILITY TO MAKE REFORMS WORK.
BUT IF THE LAST THREE YEARS HAVE TAUGHT US ANYTHING,.. IT IS THAT
GORBACHEV IS A HIGHLY SKILLED POLITICIAN, AND WE CANNOT RULE OUT : THE
POSSIBILITY THAT HE CAN PULL OFF A "REVOLUTION FROM ABOVE" THAT
ACTUALLY INCREASES AUTHORITY BELOW.
THE SOVIET REFORM EFFORT PRESENTS THE U.S. INTELLIGENCE
COMMUNITY WITH SOME FORMIDABLE CHALLENGES IN ANALYZING THE SOVIET
UNION. WE MUST PAY CLOSER ATTENTION THAN EVER TO THE POLITICAL
STRUGGLES AND ISSUES BEING RAISED AS GORBACHEV CHALLENGES THE
ESTABLISHED INTERESTS OF INDIVIDUALS AND INSTITUTIONS.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
WE MUST ALSO HELP THE POLICYMAKER SORT OUT HOW REFORM WILL
AFFECT MOSCOW'S MILITARY AND ECONOMIC CAPABILITITIES AND -- EVEN
MORE DIFFICULT -- JUST HOW SERIOUS THE SOVIETS ARE ABOUT MODERATING
THEIR INTERNATIONAL BEHAVIOR.
GLASNOST HAS PRODUCED AN INFORMATION EXPLOSION WHICH, THOUGH
WELCOME, CHALLENGES US TO SORT OUT WHAT IS IMPORTANT AND WHAT IS
NOT, WHAT IS REAL VERSUS WHAT MOSCOW WANTS US TO HEAR.
U.S.-SOVIET ARMS CONTROL TALKS PROVIDE THE INTELLIGENCE
COMMUNITY WITH FURTHER TASKS. AS THESE NEGOTIATIONS PROGRESS, WE
WILL INCREASINGLY BE ASKED TO ASSESS SOVIET MOTIVATIONS AND MONITOR
SOVIET COMPLIANCE WITH THE PROVISIONS OF AGREEMENTS. AS WE ARE
FINDING OUT WITH THE INF TREATY, THIS TASK IS MANPOWER INTENSIVE FOR
THE INTELLIGENCE COMMUNITY.
YET WHATEVER GORBACHEV'S SPECIFIC DOMESTIC AND FOREIGN POLICIES,
THE ADVERSARIAL RELATIONSHIP WE HAVE WITH THE USSR WILL REMAIN.
GORBACHEV AIMS TO MAKE THE SOVIET UNION MORE COMPETITIVE WITH THE
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
WEST -- BOTH ECONOMICALLY ANC ~1ILITARILY -- AND MORE INFLUENTIAL Irv
WORLD AFFAIRS. FOR THESE REASONS, SOVIET INTENNTIuNS AND CAPABILTIES
WILL REMAIN THE INTELLIGENCE COMMUNITY'S PRIMARY FOCUS.
INTELLIGENCE ABOUT SOUTH ASIA WILL CONTINUE TO BE.IMPORTANT TO
POLICYMAKERS FOR A NUMBER OF REASONS, NOT THE LEAST OF WHICH IS
SOVIET INFLUENCE IN THE REGION. GORBACHEV'S DECISION TO WITHDRAW
SOVIET TROOPS FROM AFGHANISTAN DEMONSTRATES HIS DESIRE TO CUT SOVIET
LOSSES IN ORDER TO PURSUE OTHER OBJECTIVES. BUT DESPITE THE SOVIET
TROOP WITHDRAWAL, AFGHANISTAN WILL REMAIN A KEY FOREIGN POLICY
CONCERN IN MOSCOW. BECAUSE OF THE SOVIETS' CONTINUED INTEREST AND
ITS STRATEGIC LOCATION, AFGHANISTAN WILL REMAIN AN IMPORTANT CONCERN
IN WASHINGTON AS WELL.
WE EXPECT THE SOVIETS TO ABIDE BY THEIR COMMITMENT TO WITHDRAW
THE REST OF THEIR TROOPS FROM AFGHANISTAN BY FEBRUARY 15TH OF NEXT
YEAR. AT THE SAME TIME, MOSCOW WILL TRY TO RETAIN ITS INFLUENCE
WITH KABUL (( COB BLE )) THROUGH BOTH ECONOMIC AND POLITICAL MEANS.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
FOLLOWING THE SOVIET WITHDRAWAL, WE BELIEVE THAT AFGHANISTAI'N!
WILL BE UNSTABLE FOR A CONSIDERABLE PERIOD AND HAVE SO ADVISED
POLICYMAKERS.3 THE SOVIET-BACKED REGIME HAS MINIMAL CONTROL OR
SUPPORT OUTSIDE KABUL, AND THE WITHDRAWAL WILL MAKE ITS POSITION
EVEN MORE PRECARIOUS. THE AFGHAN RESISTANCE WILL CONTINUE ITS
EFFORTS TO DESTROY WHAT IS LEFT OF THE REGIME. HOWEVER, THE RULING
PARTY'S FRAGMENTATION MAY BE AS LARGE A FACTOR IN THE REGIME'S
COLLAPSE AS THE MILITARY INITIATIVES OF THE RESISTANCE.4
THE POST-SOVIET PERIOD WILL ALSO FIND THE AFGHAN REBELS FIGHTING
AMONG THEMSELVES -- AS THEY DID THROUGHOUT THE SOVIET OCCUPATION --
FOR POLITICAL POWER IN AFGHANISTAN. GIVEN THAT MOST ETHNIC GROUPS
ARE BETTER ARMED THAN EVER BEFORE AND ARE LIKELY TO CAPTURE
ADDITIONAL WEAPONS FROM THE DISINTEGRATING AFGHAN ARMY, WE WOULD
EXPECT TO SEE TRIBAL CONFLICT CONTINUE FOR SOME TIME AFTER THE
SOVIET WITHDRAWAL.5
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
THE-FUNDAMENTALIST GROUPS OF THE AFGHAN RESISTANCE WILL ENTER
THE POST-SOVIET ERA WELL-ARMED AND WELL-ORGANIZED.. WHATEVER THL
COMPOSITION OF A FUTURE GOVERNMENT IN AFGHANISTAN, ISLAMIC RITUAL
AND LAW WILL PROBABLY PLAY A LARGER ROLE IN ITS OPERATIONS AND
POLICIES.6 BUT THE NATURE AND TRADITIONS OF AFGHANISTAN MAKE THE
IMPOSITION OF A KHOMEINI-STYLE FUNDAMENTALISM UNLIKELY.
CLEARLY, THE SOVIET WITHDRAWAL AND THE STRUGGLE FOR POLITICAL
CONTROL ARE THE PRIMARY INTELLIGENCE ISSUES IN AFGHANISTAN FOR THE
NEAR TERM. BUT EFFORTS BY NEIGHBORING COUNTRIES TO EXERT INFLUENCE
IN AFGHANISTAN WILL ALSO RECEIVE OUR ATTENTION. IN THE LONGER TERM,
WE WILL EXAMINE THE FUTURE GOVERNMENT'S ATTEMPTS TO REBUILD THE
COUNTRY AND RESETTLE THE WORLD'S LARGEST REFUGEE POPULATION -- MORE
THAN 5 MILLION PEOPLE.?
ABOUT THREE MILLION OF THOSE REFUGEES NOW LIVE IN PAKISTAN,,A
COUNTRY THAT HAS FULLY SUPPORTED THE AFGHAN RESISTANCE.8 PAKISTAN
HAS ALWAYS BEEN OF STRATEGIC INTEREST TO U.S. POLICYMAKERS, BUT THE
DEATH OF PRESIDENT ZIA IN A PLANE CRASH LAST MONTH RAISES NEW ISSUES.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
THE INITIAL RESPONSE TO PRESIDENT ZIA'S DEATH HAS BEEN A SMOOTH,
CONSTITUTIONAL TRANSITION. GHULAM ISHAQ KHAN (( 600 LOM ISH OCK
CON )), THE SPEAKER OF THE SENATE, HAS TAKEN OVER AS ACTING
PRESIDENT. UNDER THE CONSTITUTION, A NEW PRESIDENT MUST BE ELECTED
WITHIN 30 DAYS AFTER PARLIAMENTARY ELECTIONS. ISHAC KHAN HAS
ANNOUNCED THAT THE ELECTIONS SET FOR NOVEMBER 16TH WILL BE HELD ON
SCHEDULE.9
BECAUSE OF THE CLOSENESS OF OUR RELATIONSHIP AND THE STRATEGIC
IMPORTANCE OF PAKISTAN, NATURALLY, THE U.S. INTELLIGENCE COMMUNITY
WILL BE FOLLOWING THESE DEVELOPMENTS WITH THE KEENEST INTEREST.
ANOTHER REGION OF GREAT STRATEGIC INTEREST FOR THE UNITED STATES
IS THE PERSIAN GULF -- AN AREA WHERE TENSIONS REMAIN HIGH DESPITE
THE CEASE-FIRE BETWEEN. IRAN AND IRAQ. ALTHOUGH WE ARE ENCOURAGED
THAT THE TWO NATIONS ARE HOLDING PEACE TALKS IN GENEVA, THESE
NEGOTIATIONS ARE LIKELY TO BE PROTRACTED AND DIFFICULT. BOTH
10
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
COUNTRIES HAVE SHARPLY DIVERGENT VIEWS ABOUT THE WAY THE TALKS
SHOULD PROCEED AND THE KEY ISSUES INVOLVED. 10 THE ANIMOSITIES
BUILT UP OVER EIGHT YEARS OF BITTER CONFLICT WILL NOT SUDDENLY
DISAPPEAR.
THE IRAN-IRAQ WAR COST THE TWO COUNTRIES MORE THAN 350 BILLION
DOLLARS, AND EVEN MORE IN HUMAN COSTS -- MORE THAN 1 MILLION
CASUALTIES AND 1.5 MILLION REFUGEES. THIS WAR WAS ONE OF THE
BLOODIEST OF THE CENTURY, AND IT WILL TAKE MANY YEARS FOR THE TWO
NATIONS TO RECOVER.11
THE WAR HAS AFFECTED NEARLY EVERY ASPECT OF ECONOMIC LIFE IN
IRAN AND IRAQ. THE LOSS OF OIL REVENUES -- THE PRIMARY SOURCE OF
FOREIGN EXCHANGE AND ECONOMIC GROWTH IN BOTH COUNTRIES -- HAS
DRAGGED BOTH ECONOMIES DOWN. LARGE-SCALE ARMS PURCHASES HAVE ALSO
WEAKENED BOTH ECONOMIES. AND THE COSTS OF RECONSTRUUTION WILL BE A
FURTHER DRAIN.
11
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2
FINANCING THE WAR HAS VIRTUALLY EXHAUSTED BOTH b 'FATES'
F iNANCIAL
RESERVES. BOTH COUNTRIES HAVE IMPOSED STRICT AUSTERITY MEASURES AND
CUT ECONOMIC DEVELOPMENT PROGRAMS.
WE BELIEVE THESE COSTS OF THE WAR WILL DETER BOTH SIDES FROM
RESUMING AN ALL-OUT CONFLICT ANYTIME SOON. HOWEVER, IRAN AND. IRAQ
CONTINUE TO DISTRUST EACH OTHER AND BOTH WILL PROBABLY MAINTAIN
THEIR MILITARY READINESS.12
THE U.S. INTELLIGENCE COMMUNITY HAS CLOSELY FOLLOWED THE
IRAN-IRAQ CONFLICT, PROVIDING ASSESSMENTS OF THE INTENTIONS AND
CAPABILITIES OF BOTH SIDES AS WELL AS THE IMPLICATIONS FOR THE
REGION AND THE UNITED STATES. WHEN THE U.S. PRESENCE IN THE GULF
WAS INCREASED, WE BEGAN PROVIDING DAILY TACTICAL INTELLIGENCE
SUPPORT TO NAVAL FORCES OPERATING WITH THE U.S. CENTRAL COMMAND.
OUR SUPPORT HAS INCLUDED REPORTS ON IRANIAN ANTISHIP CRUISE MISSILE
SITES, NAVAL BASES,. AIRFIELDS, AND COASTAL DEFENSE INSTALLATIONS.
AS A RESULT, U.S. FORCES HAVE BEEN ABLE TO SUCCESSFULLY CARRY OUT
U.S. FOREIGN POLICY AND PROTECT OUR SECURITY INTERESTS.13
12
Declassified in Part - Sanitized Copy Approved for Release 2012/05/30: CIA-RDP99-00777R000302240002-2