THE MIDDLE EAST AND SOUTH ASIA: KEY ISSUES IN 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T00114R000600740001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 75
• Document Creation Date: December 27, 2016
• Document Release Date: February 23, 2012
• Sequence Number: 1
• Publication Date: January 30, 1987
• Content Type: REPORT

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Directorate of
Intelligence
The Middle East
and South Asia:
Key Issues in 1987
DATE 3~ 7
DOC NOA1t SA A-f f%)oo&&
OIR 3 /192-
P & PD / 11.9
Secret
f- JL
NESA M 87-20008
January 1987
Copy 19 7
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Central intelligence Agency
DIRECTORATE OF INTELLIGENCE
23 January 1987
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THE MIDDLE EAST AND SOUTH ASIA:
KEY ISSUES IN 1987 25X1
This paper was prepared by analysts in the Office of Near Eastern
and South Asian Analysis. Information available as of 15 January
1987 was used in this report. Comments and queries are welcome
and mav be directed to the Chief, Issues and Applications Division,
NESA,
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THE MIDDLE EAST AND SOUTH ASIA:
KEY ISSUES IN 1987
Scope Note This study assesses those political, social, economic, and military
developments in the Middle East and South Asia that are most likely
to occur in 1987, as well as other events that, although less likely,
would have major policy implications for the United States if they did
occur. Although we have assessed risks and probabilities, certain
specific events -- including assassinations, military coups, and
terrorist attacks -- are largely unpredictable. Even so, we have laid
out some alternative scenarios, with their implications for US policy,
to stimulate the reader's thinking about the region over the next
year.
NESA M 87-20008
23 January 1987
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SAUDI
ARABIA
WAIVES
Boundary representation is
not nacassanly wtnontatWS.
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THE MIDDLE EAST AND SOUTH ASIA:
KEY ISSUES IN 1987
Summary Events in the Middle East and South Asia will be no less tumultuous
in 1987 than in 1986:
--Unrest will increase in poorer countries as governments struggle
to meet consumer demand while reducing expenditures.
--The region is almost certain to see one or more leadership
changes, although the odds are better than even that any given
leader, with the exception of Ayatollah Khomeini, will last through
the year.
--The Iran-Iraq and Afghanistan wars will continue, although there
could be significant changes in the strategies and operations of
the adversaries.
--Radical states will continue to support terrorism and undermine
moderate Arab interests.
Regime-threatening demonstrations will become more likely as
leaders of many of the region's poorer states impose stiff austerity
measures. The continuing poor performance of the region's primary
exports, especially oil, will combine with a poor investment climate
to stifle economic growth. Although the odds are less than even
that unrest will bring down any regime, the death of a leader or
subversion by a meddlesome neighbor may combine with rising
unrest to force regime changes and/or foreign policy shifts.
Among US allies, Egypt faces the gravest problems. Its deep-seated
economic troubles are likely to provoke domestic unrest as imports
decline and prices for basic commodities rise. Although the Army
and security forces probably can contain this unrest, the
disturbances could become serious enough to prompt Army
commanders to replace President Mubarak before the October
election.
Sudan stands out as the country most likely to disintegrate into a
Lebanon-like state of squabbling factions -- none of them strong
enough to form a viable national government. Even though it is
doubtful that the present unsettled conditions will reach such a level,
the war in southern Sudan will continue to strain the government's
capacity to meet popular demands and could provoke increasing
demonstrations against the regime.
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Other poor states also will have little room to maneuver as they try
the economic, slide. Nor will the richer states be immune o
Leadership changes in countries hostile to the United States would
stand the greatest chance -- although still only slight -- of bringing
policy changes beneficial to US interests:
--In Syria, President Assad the possibility
of his exit, triggering a turbulent and drawn-out succession
struggle. Major policy changes would not be likely in the short
run, but, once a successor was better established, it is possible
that the new regime would initiate closer links to moderate Arab
states.
--In Libya, Qadhafi faces mounting internal opposition. If he were to
fall from power, prospects are better than even that he would be
replaced by a military regime more intent on tackling domestic
problems than launching terrorist attacks on Western adversaries.
Neither pro-Qadhafi fanatics nor pro-Soviet officers would be
likely to replace him. Mutual distrust would preclude the
establishment of close ties to Moscow, although the Soviets might
be given greater access to Libyan facilities.
--In Iran, the infighting among the clerical factions competing to
replace Khomeini stands a good chance of turning violent after his
death. Radical clerics are in the best position to win a power
struggle, however, and the United States would stand little chance
to better its position in the country.
--The government in South Yemen will continue to struggle, with
little hope that a strong leader will replace exiled ex-President Ali
Nasir to pull the country together. Despite its problems, Aden will
remain staunchly in the Soviet camp and stridently anti-US.
Among the nonaligned or pro-Western states, 83-year-old President
Bourguiba of Tunisia and 80-year-old President Jayewardene in Sri
Lanka are the leaders most likely to die in office or to be
incapacitated by ill health. Tunisia -- which lacks a clear successor
or a succession mechanism and has a depressed economy, an active
Islamic fundamentalist opposition, and a meddlesome neighbor in
Libya -- will face a highly unstable situation should Bourguiba die or
be incapacitated during the year. In Sri Lanka, a successor to
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Jayewardene would almost certainly take a tougher stand against the
Tamil insurgents, all but eliminating prospects for a negotiated
settlement of the insurgency, and would adopt a less pro-Western
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foreign policy than his predecessor.
India's Prime Minister Rajiv Gandhi probably stands the greatest risk
of any leader in the Middle East and South Asia of being
assassinated during the year, endangering the good relations with
the West that have developed during his tenure. Sikh separatists
have vowed to avenge themselves against the descendants of Indira
Gandhi ever since the government attacked the Sikhs' sacred Golden
Temple in 1984. The Soviets will continue to capitalize on the Sikh
campaign for more autonomy by charging that the United States
backs Sikh activities.
In an atmosphere of heightened interethnic strife and disorder in
Pakistan, Benazir Bhutto and her Pakistan People's Party might be
able to gain enough support in Punjab to force President Zia to call
for elections in which the PPP would have a good chance to win a
l
y
plurality and oust Zia. A Bhutto-led government would rp obab
develop somewhat cooler relations with Washington.
Prospects are poor for a breakthrough in either of the two major
wars in the region. Although a change in strategy is likely to alter
the course of the Iran-Iraq war, neither a major military victory nor
peace negotiations are likely. Tehran, pressed by economic problems
and increasingly focusing on the uncertain succession to Khomeini,
is likely to deemphasize its ground operations, broaden its attacks on
Gulf shipping, and possibly launch terrorist and sabotage attacks
against Gulf Arab targets to discourage aid to Iraq. Iraqi air attacks
on oil and industrial targets will continue to take a heavy toll on
Iran's economy. Use of chemical weapons by both sides will
probably increase as Iran expands its facilities to manufacture them
and Iraq expands its stockpiles and diversifies its inventories of
chemical agents.
The Afghanistan war will drag on with little change in its eighth year.
The resistance, increasingly adept at using its sophisticated
surface-to-air missiles, will improve its performance against Soviet
and Afghan aircraft, but the Soviets will also score successes
through improved tactics. The Soviets will continue, unsuccessfully,
to press Pakistan to end its support to the insurgents through a
combination of negotiating initiatives and military pressure. Despite
their military successes, the insurgents' political schisms will hinder
their efforts to gain broader international support.
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India's large military exercises along the Pakistani border early in
1987 will raise tensions between the two countries, although chances
are slim that they will lead to major conflict. Pakistan's continuation
of its nuclear weapons progam, as well as its efforts to procure
advanced US-made weapons, particularly AEW aircraft t and tanks, to
counter Soviet incursions from Afghanistan will agg a
with India. India will counter by negotiating a new arms deal with
Moscow for air defense weapons. Prospects for armed conflict
between India and China will increase in the spring when both sides
border
h
.
e
will be able to deploy additional forces to t
There is a reasonably good chance that the air forces of
Israel and Syria will engage in battles over Lebanon and a much
smaller chance that such engagements will escalate into a broader
conflict. Israel would be a decisive winner in either case. Prospects
ther would
h
e o
are considerably slimmer that one side or t
e
i
.
s
deliberately start a war, preemptive or otherw
Although European and moderate Arab governments may press the
United States to accelerate the Arab-Israeli peace process in 1987
and Israel's relationship with Egypt and Jordan may improve, if only
slightly, there is not likely to be significant movement toward a
resolution of Arab-Israeli differences. Even the death or ouster of
Iran's Khomeini, Syria's Assad, or Libya's Qadhafi would be unlikely to
lead to resolution of key regional issues.
The radical states will continue their covert cooperation and support
for terrorist attacks both within the region and in Europe. The only
noteworthy possible new developments will be pressures from PLO
hardliners that provoked Arafat to sanction attacks against US
targets, attacks by terrorist groups inside the United States to gain
ons by terrorist groups.
greater notoriety, or use of chemical weap
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Summary
Political Stability Outlook
Political Risk Assessment
Countries of Primary Interest to the United States
Egypt Pakistan
India Saudi Arabia
Iran Sri Lanka
Iraq Sudan
Israel Syria
Libya
Countries of Secondary Interest to the United States
Algeria Morocco
Bahrain North Yemen
Bangladesh Oman
Jordan South Yemen
Lebanon Tunisia
Kuwait United Arab Emirates
Military Confrontations
Syrian-Israeli Military Confrontation
The Iran-Iraq War
South Asian Military Tensions
The War in Afghanistan
Regional Issues
Economic Trends
Shifting Alignments in the Arab World
The Arab-Israeli Peace Process
Proliferation of Nuclear Weapons
Proliferation of Chemical Weapons
Terrorism
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POLITICAL RISK ASSESSMENT*
According to our assessment, four countries -- Lebanon, South Yemen, Sudan, and
Libya -- will face the highest political risk during 1987. We estimate that the political risk
level will be lowest in Jordan. Principal factors of political risk vary widely within the
region:
--Internal or external opposition is the greatest threat to the regimes in
Bahrain, India, Lebanon, Pakistan, Sri Lanka, and Sudan.
--Social or economic pressures are the most significant problems in Egypt,
Iraq, and Israel.
--Uncertainty of the health, capabilities, or performance of the leaders is
the most important risk factor in Iran, Jordan, Kuwait, Libya, Morocco,
North Yemen, Saudi Arabia, Tunisia, and the United Arab Emirates.
--The question of loyalty, effectiveness, or cohesion of the military
and security forces is the greatest threat to regimes in Algeria,
Bangladesh, and Syria.
Our assessment also notes that:
--South Yemen and Libya, which have strong political and security ties to
the Soviet Union, are exposed to high levels of political risk. Other
states that have close political or military supply relationships with
Moscow, such as Syria, Algeria, India, and Iraq, are subject to moderate
political risk.
--Jordan, Oman, Morocco, and Saudi Arabia, which have strong security ties
to the United States, are exposed to the least political risk. States that
have close security ties to the United States and have moderate levels of
political risk include Tunisia, Bahrain, Egypt, Pakistan, and Israel.
--In the aggregate, the "leader" and "social and economic pressures" are
the categories that most strongly affect political stability, reflecting the
concentration of political power in traditional governments and the
regional impact of lower oil revenues.
--There is a relatively even distribution of political risk factors in Iraq,
Sudan, and North Yemen, which may somewhat mitigate their overall risk
level. In contrast, the risk to Bahrain, Egypt, India, Jordan, Libya, and Sri
Lanka is concentrated in a single component.
In addition to the information presented in the chart, analysts in the Office of Near
Eastern and South Asian Analysis believe that:
* For the purposes of this assessment, political risk is defined as exposure t o events that
increase prospects for political unrest, violence, or regime change.
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--With the exception of Lebanon, India, Israel, Morocco, and South Yemen
-- where risk levels will remain the same -- the degree of political risk
for countries in the Middle East and South Asia will be greater in 1987
than it was in 1986.
--Political unrest, violence, or instability in most countries in the Middle
East and South Asia would threaten US interests. Only in Libya, Syria,
South Yemen, and possibly Iran would unrest work to the US advantage.
Political Risk Assessment Methodology
The political risk assessment reflects the views of
country analysts on five major components of political
stability -- leader, leadership, military and security services,
social and economic pressures, and opposition (internal and
external). Analysts rated 10 categories within each
component on a scale of 0 -- no political risk -- to 5 -- high
political risk. In the health category of the leader component,
for example, Iran's Khomeini received a 5, Saudi Arabia's King
Fahd a 3, and Bangladesh's Ershad a 1.
The scores for the 10 categories in each component
were totaled (out of a possible score of 50) and then
multiplied by an influence factor. This factor represents views
of analysts about the relative influence of each of the five
components on the political environment of each country in
1986. The sum of the five influence factors equals 100
percent. Egypt analysts, for example, weighted the five
components as follows: leader -- 35 percent; social and
economic pressures -- 30 percent; military and security
services -- 20 percent; opposition -- 10 percent; and
leadership -- 5 percent. Weighted components were then
added and doubled so that the range of scores is, from 0 --
no risk -- to 100 -- very high risk.
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Middle East and South Asia: Political Risk Assesment, 1987
M Leader Leadership Military and
Social and 0 Opposition
Countries of Primary Interest Countries of Secondary Interest
to the United States: Level of Political Risk to the United States: Level of Political Risk
Egypt
India
Iran
Iraq
Israel
Libya
Pakistan
Saudi Arabia
Sri Lanka
Sudan
Syria
Algeria
Bahrain
Bangladesh
Jordan
Kuwait
Lebanon
Morocco
North Yemen
Oman
South Yemen
Tunisia
U.A.E.
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A. Health
0(excellent
S (precarious)
B. Mental ability/
0 )extensive abilities)
- S (limited ability)
capacity
C. Decisiveness
0 rvery decisive)
5 (indecisive)
D. Charisma
0 rierv charismatic)
S (no charisma)
E. Political astuteness
o (very astute)
S (not astute)
F. Corruption
0(notcorrupti
S(verycorrupt)
G. Support in the
O (extensive support)
5 (no support)
government
H. Support in the military
0 (extensive support)
S (no support)
I. Pragmatism
O (very pragmatic)
S (not pragmatic)
J. Responsiveness to
0 (very responsive)
5 (not responsive)
popular attitudes
A. Common views and 0 (strong unanimity) 5 (total disparity)
ideological objectives
8. Interpersonal relations 0 (close relations) 5 (strong
animosity)
C. Acceptance of leaders 0 (clear deference) S (coup plotting)
authority
D. Corruption (relative) 0 (no corruption)
G. Support in the
government
H. Support in the military 0 (wide support) -
1. Pragmatism 0 (very pragmatic)
S (extensive
corruption)
S (none or no
acceptance)
centers)
S (no support)
S (no support)
S (not pragmatic)
J. Responsiveness to 0 (very responsive)
popular attitudes
A. Living and welfare
conditions
B. Support for
government policies
C. Degree of discipline
and acceptance of
authority
D. Presence and effective-
ness of security forces
E. Interforce relations
F. Relations between
senior officers and
government
G. Willingness to curb
domestic opposition by
force
H. Politization of troops
1. Politization of officer
corps
J. Officer corps-enlisted
personnel relations
O (excellent) S (very bad)
0 (strong support) S (no support)
O (high degree) S (low degree)
0 (excellent/ S (very bade
O(excellent) S (very bad)
O (no politization) - S (extensive
politization)
0 (no politization) _ S (extensive
politization)
0 (excellent) S (very bad)
a For each major component of political stability-leader, leadership.
military and security services. social and economic pressures, and opposi-
tion-the left-hand column lists a specific category and the right-hand
column lists the political risk value of each category
A. Social, ethnic. or
religious discontent
B. Demonstrations/riots
C. General economic
situation
D. Foreign assets
situation
E. Unpopular changes in
taxes/subsidies/prier
controls
F. Shortage of consumer
goods
G. Inflation
H. Demographic
pressures
1. Strikes
J. Attitude of students
Internal
A. Opposition press
dissemination
B. Organization and
cooperation among
different groups
C. Popular appeal
D. Leadership
E. Terrorism/armed
insurrection
F. Size
External
G. Terrorist activity
H. Assets/capabilities
within country
1. Resolve
J. Animosity
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0(no disturbances) - S (extensive
disturbances)
0 (excellent) 5 (very bad)
0 (no inflation) 5 (steep infation)
0(no pressures) S (extensive pressures)
0 (no strikes) S (pervasive strikes)
0 (progovernment) - S (antiregime)
o (none) S (extensive)
0 )weak( S (strong(
O (none) S (extensive)
0 (none) 5 (extensive)
0 (none) S (extensive)
o (none) S (extensive)
0 (weak) 5 (strong)
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Probable Developments in 1987
--Even if Egypt receives substantial additional bilateral aid, it will probably
be compelled to adopt far-reaching economic reforms to head off a
potentially destabilizing financial crunch.
--The economic reforms are likely to generate domestic unrest. The
magnitude of unrest will depend on the extent of the reforms and the
government's skill in implementing adjustments and manipulating public
opinion.
--President Mubarak is unlikely to step down before his term expires in
October, and there is a somewhat better than even chance that he will
run for another six-year term.
Possible Surprises
--Cairo could default on major portions of its international debt unless it
gets large infusions of financial assistance from foreign donors.
--If economically motivated unrest becomes widespread and the Army tires
of trying to keep order, senior military commanders would probably ask
Mubarak to step down.
--There is a less than even chance that Mubarak will retire and leave
Egypt's intractable problems to his successor -- most likely Defense
Minister Abu Ghazala.
We believe that Mubarak's inept handling of the rapid succession of crises that
rocked his government in late 1985 and early 1986 -- including the Achille Lauro and
Egyptair hijackings -- encouraged domestic opposition from every quarter and added to
Mubarak's general sense of siege. We believe that the most recent of these events --
the mutiny by police conscripts in February 1986 -- pointed up the danger of discontent
among Egypt's large and increasingly deprived underclasses as the country enters a
period of enforced economic austerity.
Now in the final year of his term in office, we believe that Mubarak will be
engaged in the most delicate balancing act of his political career: trying to revitalize
Egypt's sinking economy without adopting unpopular measures that would risk a political
upheaval.
Egypt has a slightly better than even chance to muddle through its economic
woes, although it will be unable to do so without considerable outside help. Its major
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foreign. exchange earners -- oil, Suez Canal tolls, and remittances from Egyptian workers
abroad -- are depressed and unlikely to recover sufficiently to spare the country a
significant economic readjustment. Cairo has begun serious negotiations with the
International Monetary Fund in pursuit of a standby agreement, but a resolution of
differences on the pace and substance of reform will be difficult.
Without large infusions of new loans and the rescheduling of old obligations, we
believe that Cairo would, for all practical purposes, default on major portions of its
international debt. This would almost certainly provoke a sharp cut in imports and higher
prices for basic commodities, which could trigger the very unrest that Mubarak seeks to
avoid. Although some unrest is inevitable as prices rise, we believe the Army and
security forces could contain it.
As Mubarak casts about for economic help, he will look primarily to the United
States and Europe but is also likely to approach Saudi Arabia, Kuwait, and other Gulf
states. If Mubarak becomes desperate and aid is not forthcoming, he may consider
undoing some elements of the US-Egypt special relationship. He may threaten to turn to
the Soviets, although Moscow is in no position to provide the large amounts of cash
needed to keep Egypt afloat.
We believe that Egypt's economic problems will leave little room for major
diplomatic initiatives during the year. The Arab-Israeli peace process is likely to be
accorded a lower priority as long as Jordan and the PLO remain at odds and Arafat
maintains his hard line. With Shamir as prime minister in Israel, Cairo is unlikely to take
dramatic steps to normalize relations with Tel Aviv.
Although Egypt faces no major military threats, we cannot rule out a skirmish with
Libya if Qadhafi launches a provocation against Egypt. A Libyan-sponsored coup in Sudan
might prompt Egypt to intervene militarily at the invitation of the ousted government.
Cairo is virtually certain to avoid sending troops on foreign adventures such as the
Iran-Iraq war.
If Mubarak does not run again and he has not designated 'a successor by October,
we would expect Defense Minister Abu Ghazala to be formally nominated for the post --
with strong behind-the-scenes military support.
We believe that an Abu Ghazala government would continue Mubarak's policies. In
domestic affairs, he would face the same problems as Mubarak but would almost certainly
adopt a more forceful approach to them. He probably would retain close relations with
the United States. Although he would be willing to do business with Moscow, he bears
no affection for the Soviet Union.
Prolonged domestic unrest could prompt a military request for Mubarak's
resignation before the election, particularly if Islamic fundamentalists inflamed discontent
and the Army grew tired of repressing other Egyptians to keep order. Under these
circumstances, we would expect Abu Ghazala to take power and manipulate the
constitutional mechanism to arrange his own legal succession.
In an even less likely scenario, either the Islamic right or the secular left could
assume power in the wake of a severe domestic crisis or attempted military coup. A
government of either extreme would almost certainly loosen Cairo's ties to Washington
and Tel Aviv, although Egypt would probably avoid provoking a war with Israel.
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Probable Developments in 1987
--Efforts by Sikh extremists to establish a separate Sikh state will pose the
most serious threat to political stability as they target politicians,
policemen, and government officials who oppose their campaign.
--New Delhi is likely to take additional steps to reduce government subsidy
programs in 1987 -- particularly for petroleum products. These steps
will raise prices and discontent among consumers and provide fuel for
opposition politicians but are unlikely to trigger widespread political
unrest.
--Prime Minister Gandhi's Congress Party is almost certain to lose ground
in offyear elections scheduled in five states during 1987. The losses are
unlikely to affect political stability, but they may reduce Gandhi's
maneuvering room in implementing national policy.
Possible Surprises
--There is a slight chance that simmering Hindu-Muslim communal conflict
would erupt into widespread unrest. The most likely flashpoint will be in
the state of Kashmir, where chances for fresh Hindu-Muslim violence are
high.
Even though new efforts are under way to improve security around Prime Minister
Gandhi following last October's assassination attempt, we believe that he will be highly
vulnerable to assassination in 1987. Sikh extremists have vowed to kill the descendants
of Indira Gandhi, whom they hold responsible for the desecration in 1984 of the Golden
Temple, the Sikhs' holiest shrine. India, we believe, would experience a period of major
instability following a successful assassination as senior Congress Party officials brokered
the succession in the midst of sectarian violence. We would anticipate widespread Hindu
reprisals against innocent Sikhs if a Sikh were responsible for Rajiv Gandhi's death.
We believe that continued improvement in Indo-US relations depends heavily on
Gandhi's survival. His personal interest in acquiring sophisticated Western technology and
his unprecedented strength in parliament have combined to improve the tone and to
expand the scope of Indo-US ties. We doubt that any successor would have a
combination of attributes so favorable to US interests.
We believe that the Soviets will continue to charge that the United States
promotes the Sikh extremists' campaign to destabilize India. This theme played well in
India when Indira Gandhi was prime minister and continues to appear in the leftist press
and to be touted by pro-Moscow politicians seeking to discredit the United States. We
believe that a handful of the 150,000 Sikhs resident in the United States could take
actions in support of Sikh terrorism that would jeopardize improving Indo-US ties.
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Washington earned the gratitude of senior Indian officials for its arrest of Sikhs who
threatened to kill a visiting Indian official in 1985, for the protection given Gandhi during
his trip to the United States, and for the continuing cooperation between security officials
of the two countries.
We expect the negative popular reaction to further reductions in government
subsidies to be short lived if New Delhi decides to allow repeated, but small, price
increases. New Delhi reduced its price hikes for government-subsidized staples and fuel
following widespread opposition-led demonstrations in India's major cities last February.
Even if New Delhi adopts a go-slow approach, we believe that opposition politicians will
try to broaden their popular appeal by organizing demonstrations against the price hikes.
'
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They could even try to parlay this discontent into popular dissatisfaction with Gandhi
overall economic policies. The Soviets will encourage pro-Moscow politicians and their
contacts in the press to link the price hikes to ill-advised, Western-inspired reforms.
We believe that the Congress Party may lose control of the state government in
Haryana in this year's election because voters are unhappy with New Delhi's handling of
the Sikh and water-sharing issues in neighboring Punjab. In the four other states in which
offyear elections will be held, we expect the party only to lose parliamentary seats over
local, not national, issues.
If religious rather than local political issues lead to outbreaks of communal
violence in Kashmir, we believe that Hindu-Muslim violence could spread quickly to other
parts of India. Gandhi ended months of rule of Kashmir by New Delhi when he turned the
state government over to an opposition-Congress Party coalition late in 1986. Communal
relations will be tense as both Muslims and Hindus test the newly appointed government
and compete in state elections likely to be held by midyear. Outside Kashmir, sporadic but
intense clashes between Hindus and Muslims occurred during 1986 over disputed
religious shrines, religious processions, and national legislation that permits Muslim rather
than Indian secular law to govern divorces involving Muslim women.
The escalation of Muslim-Hindu violence would have serious implications for both
internal political stability and for Indo-Pakistani relations:
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--The Muslim community is several times larger than the Sikh minority and
is more widely dispersed. Security forces would be stretched thin if they
had to respond to widespread clashes.
--Islamabad would almost certainly adopt a provocative stance, at least in
its public statements, as it sided with the "oppressed" Muslims in India.
Tensions between New Delhi and Islamabad would heighten quickly.
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Probable Developments in 1987
--Infighting between regime factions over war policy, the economy, and the
succession to Khomeini will almost certainly increase, and there is an
even chance that it will turn violent. Radical clerics are in the best
position to win a power struggle because they appear to control more of
the security forces than the other factions.
.--Barring a major Iranian breakthrough in the war with Iraq, economic
pressures will probably force Tehran to limit the conflict and to divert
resources from the war. Tehran is not likely to cease hostilities, however,
unless its goals are achieved or domestic unrest threatens the regime's
survival.
--As Iran's economic situation becomes increasingly desperate, the odds
will increase that it will significantly step up its use of force to press the
Gulf Arab states to stop supporting Iraq.
Possible Surprises
--There is a small chance that the clerics would turn to Saudi Arabia to
find a face-saving way out of the war if they believed the conflict was
causing discontent severe enough to threaten the regime's survival.
--Tehran might make concessions that would lead to a significant
improvement in ties to the Soviet Union if the ruling clerics believed
such a turn would gain critical economic or military aid.
--Iran might even consider accommodation with the United States to
obtain critical military and technical support.
Khomeini's growing inability to supervise the government, deep divisions between
radical and conservative factions over military and economic policies, and Iran's contacts
with the United States caused a substantial increase in political infighting during 1986
that we expect will continue through 1987. We believe that the arrests of relatives and
aides of Khomeini's designated successor, Ayatollah Montazeri, last October reflect
We expect maneuvering by political leaders seeking to strengthen their positions in
anticipation of Khomeini's death to increase significantly during the year. Suspicions
among Iranian leaders that those with greater access are manipulating Khomeini will
grow, and the question of access is likely to fuel animosity among the factions. Infighting
over the war and the economy will sharpen as the choices confronting the regime
Khomeini's death would greatly increase the prospect that the already intense
political infighting. over the succession would turn violent and even brina an unravelina of
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would give a successor regime greater leeway to end the war, although the clerics would
have to move slowly to avoid charges that they betrayed his legacy.
If radical clerics assumed control after Khomeini's death, they might seek closer
ties to Moscow to help consolidate their power. If radical factions exhausted themselves
in a violent struggle, more conservative groups would have an opportunity to fill the
leadership vacuum, which could offer a chance for better ties to the United States.
We believe that Iran's severe economic problems will lead to a significant rise in
popular discontent and antiregime activities. Iranians probably will have to continue to
endure increased unemployment, double-digit inflation, and consumer shortages. A major
victory in the war would give the regime some breathing space, but we believe that
unrest would reappear if economic problems were not addressed. Nevertheless, the
regime's demonstrated skill at containing dissent and the lack of an organized opposition
should lessen the chances that disgruntlement over the economy will soon threaten the
If Tehran decides to exert more pressure on the Gulf Arab states to curtail their
support to Iraq in the war, we would expect the pressure to be applied gradually and to
alternate with diplomacy. It most likely would begin with stepped-up attacks on -- or
seizures of -- Saudi and Kuwaiti tankers. If this tactic failed, we would expect Tehran to
sponsor terrorist attacks or air attacks against Gulf state oil facilities and the
assassination of low- or middle-level Saudi or Kuwaiti officials. Some leaders would
argue for attacks against US personnel and installations in the Gulf.
There is a small chance that Tehran will seek to end the war during the year if it
believes that military or economic setbacks threaten the regime's survival. Under such
circumstances, Iran might try to strike a deal with Saudi Arabia in which Tehran would
agree to cease hostilities in exchange for the removal of Iraqi President Saddam Husayn,
war reparations, and the cessation of Iraqi airstrikes.
There is a very slim possibility that Iran would agree to limited accommodation
with the Soviet Union or the United States during 1987 to gain critical military or
economic assistance:
--Iran undertook a major initiative to improve ties to Moscow in 1985, when
Tehran's major battlefield defeat and the Iraqi bombing of cities produced
widespread antiregime demonstrations. The effort stalled because Iran
was able to control the unrest and the Soviets held fast to demands for
Iranian concessions on several key issues as a precondition for improved
ties.
--The secret talks that the Iranians have held with US officials and
intermediaries demonstrate their willingness to maneuver
opportunistically. The regime is likely to improve ties, however, only if
there is a consensus among the leadership to do so. The ruling clerics
would feel compelled to present such a change as evidence that the
United States had changed its policies to meet Tehran's conditions.
These include the unfreezing of Iran's assets in the United States and the
delivery of arms contracted for by the Shah.
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Probable Developments in 1987
--The Saddam Husayn regime has a better than even chance to retain
power during the coming year, despite increasing discontent as the war
drags on and as economic pressures mount.
--Security forces will prevent the spread of organized opposition to the
regime in most areas of the country. In the north, however, rebel Kurds,
assisted by Iran, will step up attacks on government targets.
--Iraq's relations with the Soviet Union will remain on course, although
friction will be generated by Moscow's inability -- or unwillingness -- to
prevent Libya or other Soviet allies from arming Iran.
--Iraq's dire economic situation is unlikely to improve because of
continuing war expenditures and the need to service its foreign debt.
Possible Surprises
--Saddam may put one or more of his close relatives on trial for
corruption, a move that would further divide his fractious family, on
whom he relies heavily to maintain his tight grip on power.
--Assassination of Saddam -- always a threat -- will become more likely
unless he can head off mounting criticism of his policies.
We believe that the President and senior Ba'th Party officials, who resolved many
policy differences last June, are confident that they can stand up to Iran militarily,
especially following Iraq's successful air war on Iranian economic targets for the past nine
months and Tehran's postponement of its long-awaited offensive. Because last year's
drop in world oil prices severely strained Iraq's financial position, we believe that Baghdad
must keep imports and government subsidies at reduced levels and reschedule debts
owed to its major lenders to sustain the war effort.
We believe that, despite the greater confidence in its military capabilities,
Baghdad's inability to end the war on its own will increase the likelihood of heightened
internal discontent. We expect that the security forces will be able to check the spread of
organized opposition, although isolated incidents involving Army deserters and other
discontented elements will increase.
The most serious internal threat to the Saddam regime will come from the Kurds.
Armed with Iranian-supplied light and medium artillery, we expect rebel Kurds to strike at
vital communication links in the north and possibly the Iraq-Turkey oil pipeline. Baghdad
may be forced to deploy more regular Army units to the Kurdish area, weakening its main
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defense line against Iran in the south.
We believe that Iraq can expect aid for its war effort to continue from several
quarters:
--It can count on support from its main financial backers, Saudi Arabia and
Kuwait, to continue at current levels.
--Turkish military support to contain the Kurdish threat will increase. Turkey
has warned Iran that it will not tolerate disruption of the Iraq-Turkey
pipeline and may deploy troops to Iraqi Kurdistan to protect the line from
sabotage.
The Soviet Union is certain to continue to supply Iraq with weapons.
Despite this aid, we believe that Moscow's failure to halt arms shipments
from some of its allies to Tehran will strain Soviet-Iraqi relations.
Despite the precautions taken by Iraq's efficient security forces, assassination of
Saddam will be a constant threat. If an assassination is not part of an organized coup, an
orderly succession would be likely. First Deputy Prime Minister Taha Yasin Ramadan
probably would take over the government. We would expect Ramadan to continue the
main lines of Saddam's policies, although he probably would oppose improved ties to the
United States. Barring a serious deterioration in Iraq's military situation, a military coup
attempt would have little chance of success. Successful coup plotters would face
significant challenges from an emboldened Iran and the probable low state of Iraqi
morale.
There is a slim chance that Saddam will put his half brother Barzan al-Tikriti on
trial for corruption. Such a step would be politically risky because powerful members of
the Tikriti clan oppose such a move, although other powerful government officials are
pressing to reduce Barzan's influence.
In the unlikely event that Iraq and Iran agree to deescalate or end -their conflict
during the year, we believe that the present Iraqi leadership would close ranks around
Saddam to accelerate reconstruction. We would expect them to suppress infighting until
Iraq's recovery was fairly well along. If, on the other hand, Iran succeeds in a major
military offensive, occupies a sizable chunk of Iraqi territory, and/or causes heavy Iraqi
casualties, we believe that the intensified strains on the armed forces and the civilian
population would dramatically reduce the regime's chance of survival through the year.
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Probable Developments in 1987
-The National Unity government has a better than even chance to survive
through 1987.
--There will be much public bickering between the two main pillars of the
government coalition -- Labor and Likud. The most contentious issues
will be the Arab-Israeli peace process and Israeli settlement in the
occupied territories.
--Prime Minister Yitzhak Shamir is likely to retain leadership of the Likud
bloc's key Herut Party, despite increasing attacks on his leadership from
David Levi and Ariel Sharon. Shamir may try to mollify his attackers by
taking a harder line against possible Middle East peace negotiating
frameworks and for more Israeli settlement in the occupied territories.
Possible Surprises
--There is a small chance that either Levi or Sharon -- each ambitious to
be Likud's next candidate for prime minister -- will oust Shamir from his
party and government posts.
--If King Hussein and other Arab leaders agree to a framework for peace
talks acceptable to the Labor Party -- which is only a slight possibility
-- Likud would probably reject it and Labor would feel compelled to
withdraw from the government.
--If Shamir could force approval for establishing new Israeli settlements in
the occupied territories through the Cabinet -- also a slight possibility
-- Labor would probably quit the government.
--If Labor-Likud discord reaches high levels or the government falls, it will
be more difficult for Israel to act on issues of high interest to the United
The portfolio switch between Labor and Likud leaders Shimon Peres and Shamir
under Israel's unusual national unity agreement was the key domestic political
development of 1986, and much attention will be focused in 1987 on the durability of the
government now that Shamir has assumed the premiership. In other major policy
developments in 1986, the Labor Party failed to find a Middle East peace negotiating
framework, progress was made in efforts to stabilize the economy, and a buffer zone was
maintained in southern Lebanon with minimal direct Israeli involvement.
We believe that both Prime Minister Shamir and Vice Prime Minister/Foreign
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Minister Peres will work for the survival of the National Unity government in 1987:
--Shamir believes that serving his full two-year term will strengthen his
position within the Herut Party and Likud's support among the Israeli
electorate. We believe that he may try to win consent for a few new
Israeli settlements in the occupied territories but that he will restrain a
large-scale settlement drive to avoid giving Labor an excuse to bolt the
government.
--Peres is not confident that Labor could win a decisive victory in a new
Knesset election and does not want to ruin his carefully constructed
image of integrity by seizing a weak pretext for ending the coalition. We
expect him to continue to strive for -- but not to attain -- a framework
for peace talks between Israel and a Jordanian/non-PLO Palestinian
delegation with some kind of international endorsement.
The National Unity government is likely to focus most in 1987 on those issues
where consensus between Labor and Likud is greatest, such as continuing economic
reform and maintaining the South Lebanon security zone while avoiding large-scale direct
Israeli involvement:
--On the economic front, Shamir will concentrate on tax reform, cuts in
subsidies and public-sector spending, and increased productivity and
employment. We expect him to have a tough time balancing sustained
reductions in total government expenditures with increased employment
and continued heavy military spending.
--In Lebanon, Israel will almost certainly continue to respond to periodic
outbursts of anti-Israel activity by.boosting the strength of General
Lahad's Army of South Lebanon and, when necessary, sending in
additional Israeli troops for limited operations.
We believe that the bitter battle for leadership of the Herut Party -- the key
element in the Likud bloc -- will continue to simmer in 1987. Sharon and Levi probably
fear that delaying a bid for leadership too long will allow Shamir to use the benefits of
incumbency to add to his support among the Herut rank and file. We would expect the
chances of Shamir's ouster as Herut leader to grow if Sharon and Levi can revive their
tactical anti-Shamir alliance.
If Sharon and Levi greatly intensify pressure on Shamir as 1987 progresses, we
believe that Shamir will be forced to take an even harder line on the peace process and
Jewish settlement in ways inimical to US interests. For reasons of both ideology and
political expediency, Sharon and Levi would probably attack Shamir as being too
moderate. Shamir would be most vulnerable to charges that he had backed off in his
desire for new Jewish settlements under pressure from the United States and to avoid a
Labor walkout and the loss of his position as Prime Minister.
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Probable Developments in 1987
--Libyan leader Qadhafi will face serious domestic political challenges, but,
because he is likely to retain the loyalty of his security forces, the odds
of his survival are favorable.
--Qadhafi's determination to subvert US interests around the world,
strengthened by the US airstrike last April, will include efforts to build a
covert network inside the United States capable of terrorist operations.
--The Soviet Union will benefit from many of Qadhafi's activities, but
mutual distrust will preclude the establishment of close formal relations
between the Soviets and Libyans.
Possible Surprises
--Several events could undermine the prospects for Qadhafi's survival,
including the imposition of additional economic austerity measures or
another US airstrike. If Qadhafi were to be ousted, the most likely
successor regime would include military officers who would reduce
Libya's worldwide support for radical causes in favor of regionally
focused policies and domestic economic development.
In our view, only the weakness of indigenous and external opposition forces --
largely due to Qadhafi's stringent security precautions and the loyalty of his security
forces -- enabled the Libyan leader to weather events that seriously shook his regime in
1986. We believe that the loyalty of the security forces during a period of widespread
domestic discontent will be critical to his survival in 1987. Qadhafi would become
extremely vulnerable to a coup if key commanders of the security forces were convinced
that his political position had become untenable.
In the present unsettled domestic climate, we believe that several internal and
external pressures could bring about Qadhafi's removal:
--His refusal to adapt to the continued fall in oil revenues by reducing
support for international terrorism and subversion.
--Another US airstrike, if it occurred in response to a clear provocation and
was directed against targets popularly associated with Qadhafi himself,
the security forces, or the oil industry.
--The occurrence of an intense or protracted military conflict involving
Egypt, Algeria, France, or Chad.
--Concerted European sanctions against Libya.
--Increased activism and foreign support -- particularly by neighboring
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countries -- for exiled Libyan dissidents, enabling opposition elements to
conduct more effective antiregime operations inside Libya.
We expect that Qadhafi's political support will erode, generating sporadic outbreaks
of antiregime activity, including isolated demonstrations, distribution of leaflets, sabotage,
coup plotting, or assassinations of regime officials.
Deteriorating economic conditions almost certainly will play a key role in
generating domestic discontent. Barring an unexpected dramatic rise in oil prices, Qadhafi
is not likely to relax austerity measures.
We believe that Qadhafi's reinvigorated program of political action, subversion, and
terrorism will remain a potent threat to US personnel and facilities and probably to the
stability of pro-US regimes in the Third World. Qadhafi already has resumed his policy --
temporarily suspended in the aftermath of the US airstrike -- of aggressive projection of
his influence abroad to undermine US interests. He has convened five major conferences
of radical and leftist groups from around the world in Tripoli since September to discuss
the "collective struggle against US imperialism."
Increased US pressures on Qadhafi may prompt him to offer Moscow significantly
increased access to Libyan facilities -- possibly including use of the large Soviet-built Al
Jufra fighter/bomber base -- to deter US military retaliation.
In the unlikely event that Qadhafi was ousted in the next year, we believe that he
would be succeeded -- after a period of intense infighting among the elite -- by military
officers. It is conceivable that pragmatic members of Qadhafi's tribe would initiate or
participate in a coup in the belief that removing Qadhafi would make room for another
clansman who would better preserve long-term tribal interests.
We view either scenario as a net gain for the United States. A new military or
tribally based regime would remain opposed to many US policies in the region --
Arab-Israeli peace initiatives, for example -- and remain involved in areas where
traditional Libyan interests are engaged, such as Tunisia, Niger, Sudan, and Chad. We
believe, however,. that a new regime would curtail costly worldwide support for radical
causes in favor of domestic economic development.
A less likely winner in a post-Qadhafi power struggle would be an extremist group
that would continue supporting terrorism and subversion and might be even more willing
than Qadhafi to target US personnel and facilities directly in terrorist attacks. We believe
that such a government would be more likely than Qadhafi to grant the Soviets increased
access to Libyan air and naval facilities or to develop a Libyan foreign policy more
attuned to Soviet interests in response to continuing US pressures.
A longshot possibility as successor to Qadhafi would be a staunchly pro-Soviet
leadership consisting of military officers or pro-Qadhafi civilians. At a minimum, we
expect that the Soviets have used their military contacts in Libya to identify Libyan
officers likely to assume key political positions in a post-Qadhafi regime. We believe,
however, that Soviet advisers are too few and scattered to control the Libyan military and
to install their own candidate.
Despite these limitations, Moscow could use its
access to Libyan military personnel to warn any new regime of a coup if the Soviets
deemed another change in government to be against their interests.
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Probable Developments in 1987
--President Zia has a better than even chance to weather several
challenges to his year-old civilian regime during 1987:
--The government will face renewed challenges from the opposition,
particularly from Benazir Bhutto's Pakistan People's Party (PPP). Bhutto
will continue to press for the ouster of President Zia and new
elections and is likely to resort to confrontational tactics to
underscore her determination.
--Law and order problems, particularly in Sind and the North-West
Frontier Province are likely to continue. The military will be called in
to assist internal security forces to quell the violence.
--Tensions are certain to increase between the more than 2 million
Afghan refugees and the local population in the North-West Frontier
Province as the two groups compete for scarce jobs and resources
and as Moscow and Kabul continue their destabilization campaign in
the border region.
--If Prime Minister Junejo fails to demonstrate the popularity of the ruling
Pakistan Muslim League in the local elections scheduled for September,
there is at least an even chance that Zia will replace him.
Possible Surprises
--Bhutto and the opposition might win enough support within Punjab, the
key province for political success, to force Zia to call elections. A
government under Bhutto's leadership would be likely to be less
supportive of US concerns in the region but, in the interest of
maintaining US aid, would try not to alienate Washington.
--There is a slight chance that Zia will call a snap national election in the
belief that public antipathy toward opposition tactics would produce an
impressive victory for the government.
--A law-and-order crisis may spread to all four provinces, causing the
military to reimpose martial law and perhaps even oust President Zia.
--The government, under pressure from Moscow and from Pakistani citizens
resentful of the Afghan refugees, might reduce its support for the Afghan
insurgents and become more flexible in the Geneva negotiations on
Afghanistan.
The return to civilian rule after eight years of martial law, the reintroduction of
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political activity with the revival of the Pakistan Muslim League, and Benazir Bhutto's
return to Pakistan were the events in Pakistan in 1986 that will be most influential in
shaping developments in 1987. We believe that Bhutto is concentrating on strengthening
her party base after support failed to materialize when she forced a confrontation with
the government by holding a rally on Independence Day last August. The civilian
government's ability to handle law-and-order crises was challenged when Junejo was
forced to use the military to quell ethnic- and religious-based disturbances during the
year.
We expect Zia to try to weaken Bhutto's movement by banning nonregistered
parties from participating in the local elections in September and by courting other
opposition leaders, particularly Ghulam Mustafa Jatoi, a former PPP leader ousted by
Bhutto. Jatoi's National People's Party is attracting moderate PPP members and members
of other opposition parties who disagree with Bhutto's confrontational tactics. We believe
that Zia is likely to replace Prime Minister Junejo, perhaps with Jatoi, if Junejo's credibility
comes into question in order to extend the government's base beyond the Pakistan
Muslim League and to demonstrate the President's commitment to civilian rule.
We believe that the government will be troubled by law-and-order problems in
addition to the unrest in Sind and Baluchistan, where ethnic and religious groups have
traditionally clashed violently with little provocation:
--The escalating banditry problem in Sind will force a tougher crackdown
by the government.
--Farmers in the North-West Frontier Province will increasingly resist the
government's efforts to eradicate opium poppies, which generate the
main income for local farmers.
--Residents of the North-West Frontier Province and Baluchistan will grow
increasingly hostile toward the Afghan refugees, who are competing for
jobs and scarce resources in the area.
We believe that use of military force to combat local law-and-order problems will
generate additional grumbling among military personnel, who believe that such duties
distract from their primary task of defending the nation from external threats.
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Probable Developments in 1987
--Domestic criticism of the government and the royal family will increase
as the government draws down financial reserves and imposes economic
austerity measures in response to reduced revenues.
--Neither development is likely to threaten the stability of the Fahd regime.
Possible Surprises
--If oil prices drop precipitously -- say to less than $10 a barrel-- and
remain depressed for more than a few months, Riyadh would be forced
to make much larger and more politically sensitive budget cuts. These
could promote serious dissension both among senior government .
managers and the public at large and impose much greater pressures on
King Fahd's tenure.
--A widening of the Iran-Iraq war would pose a direct security threat to the
kingdom's oilfields and might lead to increased Iranian subversion among
We believe that depressed oil prices and the resulting drop in Saudi oil revenues,
which forced Riyadh to slash government expenditures and subsidies, is the overriding
development in 1.986 that will have a major impact on political developments in the
kingdom in 1987. We believe that the King's abrupt dismissal of Petroleum Minister
Yamani in October because of differences over oil policy reflects the King's determination
to increase Saudi revenues. We expect this has made Fahd more vulnerable to blame
from technocrats if the economy continues to worsen in 1987. Given
the many elements of the economy over which the Saudis have little or no control, we
doubt that the King will be able to pull the economy out of its slump during the coming
year. We do not believe.that the regime will be threatened even if the economy
continues to perform poorly, because most Saudis still enjoy high standards of living and
we see no diminution in the loyalty of the military and security forces.
We expect Riyadh's attempts to push its new strategy of fixed prices and
production quotas on OPEC members to fail, which may cause King Fahd to order a boost
in oil production. If oil prices drop sharply, we believe that a popular backlash to the
imposition of more stringent economic austerity measures could fuel more serious
antiregime activity.
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Although we do not believe that Iranian-backed subversion among the Shias in the
oil-producing Eastern Province will reach serious proportions during 1987, we believe that
Saudi concerns about such subversion as well as about Iranian attacks on Saudi oil
facilities will be heightened if Iran scores military successes in the Iran-Iraq war. Riyadh
is unlikely to end its aid to Baghdad, and Tehran may elect to undertake desperate
measures in retaliation for Saudi support to Iraq.
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Probable Developments in 1987
--Fighting between government forces and the Tamil insurgents is almost
certain to continue, especially in the Tamil-dominated Eastern Province.
Even so, the chances are better than even that an accord will be reached
between Colombo and moderate insurgent forces, and that New Delhi
will deny Tamil militant groups the sanctuary they currently enjoy in
southern India.
--The Liberation Tigers of Tamil Eelam (LTTE), the most militant and
powerful insurgent group, will continue to consolidate its control over
rival groups and to accelerate development of a political wing to present
itself as a viable alternative to the national government in the
Tamil-dominated region.
--Chances are better than even that either a peace agreement between
Colombo and the moderate groups accompanied by continued militant
fighting or a unilateral declaration of independence by the militant
insurgents will provoke island-wide demonstrations by the Sinhalese.
These demonstrations would threaten (but probably not bring down) the
Jayewardene government
Possible Surprises
--If President Jayewardene -- who has led a pro-Western government
since coming to power in 1977 -- dies or is removed from office, his
successor is likely to follow a more neutral foreign policy as well as a
harder line toward the Tamil insurgents. The peace process would
almost certainly suffer a severe setback.
--A breakdown in the peace talks would probably be followed by
widespread fighting and rioting throughout the island.
--A longshot possibility is a breakdown in public order, whether under
President Jayewardene or a successor, that provokes India to intervene
militarily to restore order, possibly at the invitation of Colombo.
The growing strength of the LTTE in the four-year-old insurgency, the beginnings
of the Indian-brokered peace negotiations between Colombo and the Tamil moderates,
and the increase in popularity of former Prime Minister Bandaranaike's opposition party
topped the developments in 1986 that will influence events in Sri Lanka this year.
We expect the LTTE, which last year disarmed two rival insurgent groups and
consolidated its control over the Jaffna Peninsula -- the heartland of the insurgency --
to continue to extend its military and administrative control over Tamil-dominated areas
this year. We believe that the Tigers will continue to convert or coerce many members of
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other groups for a prolonged stuggle against Colombo. The LTTE already runs an
administrative apparatus on the Jaffna Peninsula. We believe that widespread Sinhalese
demonstrations in reaction to a Tamil takeover in the north -- or to a peace agreement
accompanied by a continuation of heavy fighting by the militants -- would contribute to
an atmosphere that could bring down the Jayewardene government. Criticism of
Jayewardene's policies will be greatest among the hardline elements in the Buddhist
clergy and opposition parties, as well as from hardline elements within his own party who
are pushing for a military solution.
We believe that a deteriorating security situation will make Colombo increasingly
eager for US arms and training. President Jayewardene will continue his efforts to brand
Tamil insurgents as Marxist terrorists to win US and other international support. Failure
to solve the Sri Lankan problem is not likely to have a direct impact on US interests in
the subcontinent. Continuing communal violence, however, could indirectly affect
US-Indian relations if Sri Lanka intensifies its search for outside support and US friends
such as Pakistan and Israel become more heavily involved.
We expect the Soviet Union, which is eager to appear supportive of New Delhi's
leadership in Sri Lanka, will continue to play only a minor role in the Tamil insurgency in
1987. We believe that the Soviets are reluctant to put their more important security
interests in India at risk by directly supplying weapons or training to Tamil insurgent
groups or by publicly supporting the Colombo regime.
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Probable Developments in 1987
--The odds are better than even that the government of Prime Minister
Sadiq al-Mahdi will survive the year despite mounting pressures on it. If
Sadiq is overthrown, it most likely will be by a military coup -- possibly
with Libyan support.
--The odds are better than two-to-one that the civil war in the south will
drag on intermittently as the Sadiq government fails to build a northern
Muslim consensus on how much power the north should concede to end
the fighting.
--Unrest, particularly in Khartoum, will grow as expenditures to prosecute
the war weaken the government's already strained capacity to meet
popular demands for reduced prices and increased availability of goods
and services.
--If squabbling over how to end the war and improve the economy leads to
a government stalemate, sporadic demonstrations against the regime are
likely to increase in intensity.
Possible Surprises
--There is a slim chance that a weakened civilian government will break
down and give way to disorder in which -- similar to Lebanon -- armed
factions vie for control with none able to establish a strong national
government.
We believe that two developments last year portend heightened political instability
in 1987:
--Protests over consumer shortages in Darfur Province in September
preceded a series of student-led protests in Khartoum that assumed a
distinctly antigovernment tone by late October.
--Sadiq, who was elected head of Sudan's first civilian government in 17
years, failed to reach agreement with Sudan People's Liberation Army
leader Garang and his Ethiopian backers, which raised the odds that the
civil war in the south will continue.
We believe that Sadiq's ability to manage the issue of Islamic law -- imposed by
then President Nimeiri in 1983 and rejected by the predominantly Christian and animist
population in the south -- will be critical to the prospects for stability in 1987. If Sadiq
presses for an Islamic code that is revised but still fairly strong, he would reduce the
chances for a political settlement with the southern rebels, who have consistently
demanded abolition of all Islamic laws as a precondition" for negotiations. Such a
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pro-Islamic tilt would also risk alienating the non-Muslim minority in the capital, including
those in the police and enlisted ranks in the Army. If, on the other hand, he should move
to abrogate the Islamic laws and not replace them with a sufficiently stringent code, he
risks losing support within his own party and incurring opposition from among the Islamic
radicals and their military sympathizers.
Other major uncertainties that will influence stability include:
--The willingness of senior military officers and troop commanders to back
the government in the event of major defeats in the south.
-- The intensity of growing civil disturbances in the capital.
--The extent of parliamentary paralysis.
--The willingness of foreign governments to provide aid upon which Sudan
has increasingly come to depend.
We believe that a political settlement to the war is highly unlikely during 1987
even though the antagonists may renew talks with outside encouragement and mediation.
We expect the conflict -- a major factor in the fall of previous regimes -- to continue to
weaken Sadiq's position.
The government has little chance to improve the economy. Sadiq's concern that
austerity might spark regime-threatening demonstrations and strikes -- like those that
helped to topple Nimeiri -- has, in our judgment, inhibited adoption of economic
measures that would please Sudan's international creditors, particularly the International
Monetary Fund, and help to relieve Khartoum's debt problems.
There is a much better than even chance that continuing commodity shortages and
spiraling inflation will lead to further civil unrest. With the government unable to provide
any real increase in purchasing power, crippling strikes and work stoppages are likely to
occur with increasing frequency. We expect such unrest to further debilitate an already
prostrate economy and offer radical elements an issue to exploit. If the number of
persons migrating from other parts of the country to Khartoum continues to grow, we
expect ethnic disputes in Khartoum -- already reported to be the worst in years -- to
aggravate the already tense urban atmosphere.
We expect coup plotting to increase. The officer corps -- a product of the Nimeiri
period -- has little personal loyalty to the Prime Minister. The perception that Sadiq is
not moving decisively on the Islamic law issue would provide officers affiliated with the
Muslim Brotherhood with an excuse to move against him. We believe that Libya would
support a coup attempt by disgruntled Sudanese officers if Tripoli perceived that Sadiq
was tilting toward the United States.
Although a coup carried out by senior officers, supported by troop commanders,
would have a good chance to succeed with minimal violence, we would expect a coup
attempted by junior officers to be much more risky.
A new military government -- unless actively supported by Libya -- would
probably pursue a nonaligned policy, although it would continue to look to Washington
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Probable Developments in 1987
The regime of President Assad has a better than even chance to last through the
year, despite pressures from several quarters:
--Assad's implementation of further austerity measures to cope with
worsening economic conditions will be unpopular with most segments
of Syrian society.
--His attempts to curtail corruption -- including seizure of smuggled goods
whose profits have benefited senior Army officers -- will antagonize his
supporters.
--Continued acts of subversion by opposition groups -- particularly the
Muslim Brotherhood, with the aid of foreign opponents of the regime --
will provoke the government into brutally repressing segments of Syria's
Sunni majority.
--Assad will maintain his alliance with Iran despite its unpopularity among
most Syrians, including segments of the armed forces, and over the
objections of Syria's Arab financial patrons.
Possible Surprises
--Assad may delegate greater but still limited decisionmaking power to his
close advisers, which could provoke squabbling among them and serious
foreign policy miscalculations.
--Reorganization of the military and security services and/or a move to
restore. Assad's brother Rif'at Assad to a position of power and
prominence could combine with uncertainty over the succession to
increase tensions within Assad's inner circle.
--The death or incapacitation of Assad
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We believe that a series of tumultuous political events in 1986, accompanied by an
accelerated decline of the economy and a spate of domestic bombings by both internal
and external enemies, has set the stage for continued unsettled conditions in 1987:
--Revelations of Syria's ties to terrorist organizations damaged its
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international prestige, soured its relations with the West, and provoked
international condemnation and limited economic and political sanctions.
--Syria's brinkmanship in confronting Israel in Lebanon, resulting in high
alert levels and fears of retaliation for its links to international terrorism,
pushed Syria to elicit pledges of support from the Soviet Union.
Although we expect continued economic problems to heighten public
dissatisfaction, the reforms that are likely to be implemented to cope with the decline
would pose a more immediate threat to the stability of the regime by alienating segments
of Assad's core support group. Assad's flirtation with private-sector solutions will
antagonize old guard Ba'thist and leftist Army officers who advocate greater centralization
of the economy.
We believe that schisms within Assad's inner circle will worsen during the year.
Until now, his decisions have been followed unquestioningly by his key lieutenants.
Should he be forced to delegate more authority to them, they are likely to quarrel over
critical issues, leading to greater uncertainty' about Syrian foreign and domestic policies.
Assad has been hesitant to tamper with the status quo, and he is unlikely to
significantly revamp his core support group. We would expect any precipitate attempt by
Assad to reintroduce his brother Rif'at into the inner circle -- and into the succession --
to elicit strong opposition from his key advisers.
We do not expect subversive groups to pose a serious threat to the regime's
stability in the coming year. Potential opponents to Assad, such as the extremist Muslim
Brotherhood, have been undermined or intimidated, and the majority Sunni population has
been largely assimilated into secular Ba'thist society. We expect isolated bombings by the
opposition to continue and retaliatory repression to fuel greater Sunni resentment of the
regime. Although most Sunnis in Syria do not subscribe to fundamentalist doctrines, they
might join an ad hoc opposition coalition led by the Brotherhood if they detected that the
regime was more vulnerable to subversion.
If Assad dies or is incapacitated during 1987, we would expect a prolonged power
struggle. Alawite kingmakers in Assad's inner circle have accrued power and influence
through their positions and share a common interest in maintaining Alawite rule. Some
kind of collegial rule is likely at first, but over time the antagonisms within the inner circle
raise the prospects for much greater instability.
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In Algeria the odds are almost even that the government will face major civil
disturbances, generated by budget cuts and economic austerity. We expect the
weakening of Algeria's economic position, triggered by a decline of 1986 oil and gas
revenues by half from the previous year, to continue. The need for private foreign
investment and President Bendjedid's determination to wean the economy from the
centralized Soviet model that he believes has not met the country's needs will continue
to encourage him to expand ties to the United States and the West. We doubt that the
financial crisis will prompt him to end financial and military support to the Polisario
insurgents fighting Morocco in the Western Sahara. The chances are even that Algeria
and Libya will continue to improve ties. If they do, there is a good chance that Qadhafi
will resume Libyan military support to the Polisario. Bendjedid's authority slipped a little in
1986, largely because the pro-Soviet hardliners in the ruling National Liberation Front
used his health problems to strengthen their position. In the unlikely event that Bendjedid
is ousted, a cast of military and security officials less friendly to the United States and
the West would probably head the new government.
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remain dependent on the United States for protection against Iranian aggression.
We believe that Bahrain will continue to face the greatest subversive threat of any
of the Persian Gulf states. The major threat will come from the Iranian-supported Islamic
Front for the Liberation of Bahrain (IFLB), which planned an unsuccessful coup attempt
against the ruling Al Khalifa family in 1981. We expect the Islamic Call (Dawa) Party to
pose a lesser threat than the IFLB in 1987, although it has established cells and infiltrated
arms into Bahrain and, like the IFLB, is supported by Tehran. We expect both groups to
concentrate their efforts on recruitment and training and dissemination of written
propaganda in the coming year. The US military presence in Bahrain is the most
vulnerable US target for the IFLB or Dawa to attack, an unlikely event. Although the Al
Khalifa monarchy is not in imminent danger of losing control, we expect disenchantment
with the Sunni ruling family, spurred by economic decline and charges of corruption, to
continue to mount, particularly among the country's majority Shia population. Bahrain will
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In Bangladesh, the holding of parliamentary and presidential elections and the end of
more than four years of martial law' in 1986 have set the stage for increased opposition
demonstrations and strikes in 1987. We do not believe that they will threaten President
Ershad, who will remain in control with the support of the military. Senior Army
commanders see few acceptable alternatives to him among civilian politicians and are
relieved to give up their political duties and return to the barracks. In the unlikely event
that civil disturbances paralyze the country, we would expect senior Army officers to
overthrow Ershad and reimpose martial law. We would expect any successor government
to continue Ershad's domestic policies and to retain good relations with the United States
in order to maintain access to US economic aid.
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In Jordan, King Hussein almost certainly will continue to pursue his West
Bank/Gaza Strip development initiative designed to undermine PLO Chairman Arafat's
credibility and encourage formation of an alternative Palestinian leadership in 1987.
Hussein, actively assisted by Prime Minister Rifa'i, is also likely to seek to improve
relations with Syria and attempt to broker a Syrian-Iraqi 'rapprochement during the year.
Despite these efforts, we expect Jordanian-Syrian relations to deteriorate. At worst,
Hussein's West Bank/Gaza initiative will prompt renewed Syrian-sponsored attacks by
radical Palestinians against Jordanian facilities and officials and a sharp downturn in
relations between the two states. If this develops, Hussein might dismiss the pro-Syrian
Rifa'i as Prime Minister and undertake a major Cabinet reshuffle. The King stands no more
than a one-in-three chance of success in his efforts to gain increased Arab financial
assistance to support his 1986-90 development plan. We believe that Hussein, in an
effort to modernize his aging military inventory, will actively pursue alternatives to the
frozen US arms package during the year, including agreements with the French or British
for new fighter aircraft and with the Soviets for additional air defense equipment. A
major Jordanian-Soviet arms agreement, such as purchase of MIG-29 aircraft, is no more
than a one-in-10 possibility, given the King's deep distrust of Soviet intentions and his
commitment to pro-US foreign and security policies.
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We believe that prospects for instability in Kuwait will increase in 1987 unless the
ruling family deals with domestic grievances. The government has disbanded several
democratic institutions and censored the press in an effort to curtail mounting criticism
and to gain a freer hand to implement tough decisions. We expect economic growth,
which is still suffering from the local stock market crash in 1982, to continue to be
sluggish in 1987. Kuwait, however, will be better able than other Arab oil-producing
states to cope with the economic downturn. Although the government will be able to
shield most Kuwaitis from serious economic hardship, its already discontented Shia and
expatriate populations will continue to suffer disproportionately. The Shias, who comprise
nearly one-third of the population, and the expatriate Palestinians, who make up nearly
one-fourth, may be more inclined to support antiregime factions. The government
continues to come under pressure from Shia extremists determined to obtain the release
of imprisoned Dawa Party members. Although we expect US-Kuwait relations to improve
as long as Kuwait is concerned about fallout from the Iran-Iraq war and terrorism, Kuwait
is unlikely to publicly support US policies for fear of sharp internal and regional criticism.
US citizens in Kuwait will continue to face a high risk from terrorist attack.
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In Lebanon, we see no prospect that violence will diminish in 1987 or even in the
foreseeable future. We believe that the discontent of the Shias and the growing strength
of the pro-Iranian Hizballah, in particular, ensure that the civil war will not end soon. The
absence of a viable national authority, political squabbles between armed militants of
every ideological stripe, personal rivalries, deeply rooted interfactional animosities, and
the influence of foreign governments will sabotage efforts to unify the country. Despite
the presence of thousands of Syrian troops, Damascus's efforts to establish a Lebanese
government unifying all confessional factions are likely to continue to fail. We expect the
de facto partition of the country to become more institutionalized during 1987. The
Christian and Druze militias have already established ministates in the mountains
northeast and southeast of Beirut. Shia groups are staking out their claims in the Bekaa
Valley, southern Lebanon, and West Beirut. The central government has virtually no
authority outside the eastern sector of the capital, although it continues to fund
development projects in various parts of the country. The Palestinian resurgence in South
Lebanon has altered the political equation in that area, but it does not appear to set the
stage for a return to pre-1982 conditions.
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In Morocco, we believe that economic problems--caused by prolonged drought
and weak international markets for Morocco's primary exports (phosphate and citrus)--will
worsen in 1987. We do not expect the country's financial obligations to be met--a
necessity if Rabat is to obtain essential financial assistance from overseas lenders. Given
King Hassan's support among military officers and the weakness of the extremist
opposition to his rule, we believe that his regime will survive its economic problems.
Prospects for a major terrorist incident sponsored by Libya, Syria, or Iran--including
assassination of a top government official--are slightly better than even. The likelihood
of such an incident has been raised by the King's abrogation of the union between
Morocco and Libya and his meeting with former Israeli Prime Minister Peres in Rabat last
year. The King's growing isolation in the region--which we expect if Algeria and Libya
continue to improve their ties and cooperate in escalating the Western Sahara conflict--is
lik
l
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y to encourage Hassan to improve relations with the United States.
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In North Yemen, we expect President Salih to remain in control at least through
1987, although he will be increasingly on the defensive over his handling of the South
Yemen exile issue, the deteriorating economy, and strained relations with Saudi Arabia.
There is an even chance that Sanaa and Aden will strike a deal to resolve the dispute
over the former's support for former South Yemeni President Ali Nasir's exile movement.
Tensions, however, are likely to continue between the two countries. Continued exile
activity along the border would increase the likelihood of a major outbreak of fighting
between North and South Yemen regulars. Such an outbreak would worsen Sanaa's
already strained relations with Moscow and would almost certainly lead to a cutoff of
Soviet support to North Yemen's armed forces. We doubt that outstanding Saudi-North
Yemeni issues, including negotiation of a border agreement, will be resolved during the
year. We nonetheless expect the Saudis to dole out enough economic aid to enable
Sanaa to muddle through its economic difficulties. We believe that pro-Soviet officers will
fan disgruntlement in the military over strained relations with Moscow and continuing
North Yemeni casualties in the Iran-Iraq war and may launch coup plotting. It is unlikely
that Sanaa will abandon its efforts to balance its relations with the United States and the
Soviet Union. Salih has little expectation that a major US arms deal can be arranged, and
we doubt that he will have much success in his search for military support from other
Third World countries to balance the overwhelming dependence of his armed forces on
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We believe that Oman is one of the most stable countries in the Persian Gulf, and,
barring the death or incapacitation of the apparently healthy Sultan Qaboos, the
government is unlikely to face serious subversive threats in 1987. The Popular Front for
the Liberation of Oman (PFLO), which has infiltrated into southern Oman from bases in
South Yemen in the past, has been inactive since 1983. Although Omani authorities have
uncovered several large arms caches that they believe belong to the PFLO, we believe
that the PFLO is too small to threaten the regime--even if South Yemen resumes active
support. We expect the growing young nationalist element within the government to place
more pressure on Sultan Qaboos to institute reforms during the year, but the outcome is
more likely to be compromise than conflict. As the nationalists gain influence, we expect
more criticism of US policies in the region and moves to limit strategic cooperation with
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In South Yemen, there is a better than even chance that continuing internal
political instability in the aftermath of the fighting that toppled the Ali Nasir regime in
January 1986 will lead to a reshuffling of the leadership and a somewhat lesser chance
that it will lead to renewed violence during 1987. We do not foresee a strongman
emerging during the year who can consolidate control over factions in the party,
government, and military. There is only a slight chance that relative moderates will gain
significant influence in the Aden regime and virtually no chance that former President Ali
Nasir, even if he returns from exile in North Yemen, will regain a top leadership role.
Even if more moderate elements make gains, we expect the regime to maintain a
stridently anti-US line. The Soviet Union will strive to retain its position in Aden
regardless of the eventual composition of the regime. Moscow will maintain pressure on
the leaders by conditioning resumption of large-scale arms shipments on internal political
stability. Under Soviet prodding, we expect Aden to seek an accommodation with Sanaa
on the exile issue. We expect the economy, already one of the world's weakest, to
continue to deteriorate in 1987. Even if relative moderates assume top leadership roles in
the government, Aden is likely to receive only limited aid from Saudi Arabia and the Gulf
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In Tunisia, continuing social and economic ferment, the incapacitation or death of
President Bourguiba, and meddling by Libya are the most likely developments that would
undermine political stability in 1987. The odds are much better than even that the
economy will deteriorate as politicians increasingly focus on the transition of power.
Tunis made a bid for financial assistance from Western donors as it initiated austerity
measures in 1986. The country's continuing economic travails are likely to make Tunis
more dependent on the United States for economic and military assistance as well as
more vulnerable to a breakdown in public order. We expect the demise of Bourguiba, who
at 83 is increasingly frail and mercurial, to produce political turmoil as civilians, and
perhaps military officers, vie for power. Bourguiba muddied the succession by removing
Prime Minister Mzali, his designated successor, and purging several other civilian and
military leaders in 1986. We believe that the confusion that would surround Bourguiba's
death without a clear-cut successor would enhance the appeal of the Islamic
fundamentalist opposition and provide opportunities for Libyan or Palestinian meddling.
Qadhafi supports Tunisian dissidents in Libya and undoubtedly has agents in place in
Tunisia. A longshot possibility that could pose grave dangers for Tunisia would be mass
rioting provoked by a buildup of economic and social tensions beyond what we now
expect. We believe that these conditions would heighten the prospects for intervention
by Libya as well as a coup led by junior officers antagonistic to the United States and the
%A/-
a
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UNITED ARAB EMIRATES
In the United Arab Emirates, we expect increasing political disarray that could
weaken the already loosely governed federation. Jockeying by younger shaykhs for
power and influence, longstanding animosity between Abu Dhabi and Dubai, the
diminishing role of the aging President Zayid and the very ill Prime Minister Rashid, and
public disillusion over shrinking economic benefits all work against a strong federal
government. Although we expect the UAE to muddle through its economic problems
caused by declining oil revenues, the leaders will haggle over difficult budget cutbacks
and allocation of federal funds to the emirates and delay making decisions as long as
possible. Despite these forces working against a strong federation, we believe that the
weaker emirates' dependence on the federal government for money and jobs and the
growing fear of subversion will keep the federation alive. We expect relations between the
UAE and the United States to remain cordial. Any changes in leadership will have little
impact on US interests. The fear of Iran will probably move the federation to improve
military and security cooperation --b- I J
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SYRIAN-ISRAELI MILITARY CONFRONTATION
Probable Developments in 1987
--There is a one in two chance that Israel and Syria -- the only Arab state
actively opposing Israel -- will clash in limited air battles over Lebanon.
If such confrontations occur, there is a much smaller chance that they
will escalate through miscalculation into a broader conflict, despite the
intentions of both parties to limit them.
--Israel would soundly defeat Syria regardless of the level of conflict,
although recent force improvements would probably enable the Syrians
i
f
to
n
lict substantial damage on their adversary.
Possible Surprises
--Although a major Syria-Israel war is unlikely in 1987, there is a slight
possibility that the Israelis will become convinced that such a war is
imminent and decide to strike against Syria first.
--In an even less likely scenario, President Assad might launch a surprise
attack to regain the Golan Heights. The Israelis would almost certainly
blunt such an attack, regain any lost ground, and take additional Syrian
We expect Israel to maintain its presence in southern Lebanon until it receives
guarantees from Damascus that cross-border attacks will cease -- a development that
neither we nor Israeli leaders anticipate during the coming year. Until the Syrians make
major progress in their military modernization, we expect them to continue to support
terrorism and to aid radical anti-Arafat Palestinian fighters and Shia militants in southern
Lebanon. We also believe that the Syrians will continue to try to restrict Israeli air
operations over Lebanon by keeping large numbers of air defense missiles poised along
the Lehanese-Syrian border
A Syrian-Israeli confrontation during 1987 would probably be set off by Israeli
retaliatory airstrikes on Palestinian bases in Lebanon's Bekaa Valley. If local Syrian
commanders believed that the Israelis were preparing to attack Syria or Syrian units in
Lebanon and fired on the raiders, the Israelis would strike back forcefully. Israeli
retaliation probably would take the form of a large-scale raid designed to destroy air
defense missile sites al
S
i
'
ong
yr
a
s border with central Lebanon.
We believe that destruction of several Syrian air defense missile units by the
Israelis would lead Assad to respond, possibly by ambushing an Israeli reconnaissance
aircraft. Such an action would inevitably lead to at least a skirmish between the combat
air patrol that r
ti
l
ou
ne
y accompanies Israeli reconnaissance flights and Syrian MIGs.
We would expect Syria to suffer heavy losses in air battles with Israel. Although
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Assad might be tempted to commit additional forces in hopes of saving face, we believe
that he would grudgingly accept his losses in hopes of fighting another day on his terms.
He would attempt to use a tactical defeat to reinvigorate his force-building efforts and
press his Soviet supporters for more and better equipment, much as he did after the
Israelis downed two MIG-23s in November 1985.
In the unlikely event that a Syrian-Israeli war does develop, it will probably be
launched by an Israeli preemptive attack. We believe that the Israeli armed forces have
adjusted their strategy to compensate for a reduction in defense spending -- part of a
government-wide austerity program to bring inflation under control -- by preparing to
strike first if a general war with Syria appears imminent. We would expect the Israelis to
quickly crush their opponents, although they would incur substantial losses in the conflict.
Although Assad probably still believes that Syria has not yet attained strategic
parity with Israel, there is a slight chance that mounting internal problems, coupled with a
desire to secure his place in history, might lead him to miscalculate and to launch a
surprise attack to retake the Golan Heights. He might erroneously conclude that his
forces had become strong enough to push the Israelis off the Heights and that he could
preserve these initial gains by quickly obtaining a cease-fire and international mediation.
In our view, Israel would not agree to a cease-fire until it had rolled back the
Syrian attackers. We would expect the Israelis to rapidly stymie a Syrian offensive and
launch a punishing counterattack designed, at a minimum, to destroy the Syrian forces
involved in the offensive.
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Comparison of Forces
Israel Syria
Personnel
Peacetime
160,000
360,000
Wartime
450,000
500,000
APCs
10,600
2,400
Artillery pieces
1,200
1,400
Tanks
4,000
3,000
Fighter aircraft
500
570
SAM launchers
150
750
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THE IRAN-IRAQ WAR
Probable Developments in 1987
--Iran's failure to win a decisive victory in the ground war will prompt
Tehran to revert to a war of attrition and to significantly reduce the
intensity of its ground effort.
--Iraqi attacks on oil production and industrial targets will take an
increasingly heavy toll on Iran's economy, hindering Tehran's war-making
capabilities and adding to its domestic problems.
--Iran will intensify its attacks on Gulf shipping and will use increased
terrorism and sabotage to deter Gulf Arab support for Baghdad.
Possible Surprises
--There is an outside chance that Iran will inflict a major defeat on Iraq's
ground forces, occupy key Iraqi territory, and eventually force the ouster
of Iraqi President Saddam Husayn -- thus paving the way for Iran to end
the war on its terms.
--There is also a slim chance that dissent within the Iranian Government
over war strategy, coupled with Khomeini's inability to mediate and
curtail factional infighting, will paralyze decisionmaking and lead to a de
facto cease-fire.
The Iran-Iraq war is now in its seventh year, and prospects for a military victory
by either adversary or a negotiated settlement are slim. Although fighting was more
intense in 1986 than in any year since 1982, neither Iran nor Iraq could break the military
stalemate:
--Tehran, sensing that it was on the verge of winning the war after it
occupied 200 square kilometers of Iraqi territory on the Al Faw peninsula,
initiated a mass mobilization and began preparing for what it claimed
would be the decisive battle of the conflict.
--Iraq weathered the crisis of its defeat at Al Faw, began an unprecedented -
mobilization, and carried out an intensive and effective bombing
campaign against Iranian economic targets.
We expect Iran will try to achieve a major battlefield victory before March. Failing
that, it will revert to a war of attrition that will significantly reduce the intensity of the
conflict on the ground. Logistic problems, doubts about its military readiness, and
increased factional infighting over war strategy are all likely to prompt the clerical
leadership to delay plans for a "final" offensive.
A major Iranian attack will have a less than even chance to win a decisive victory.
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Even if Iranian forces achieve significant gains, they will suffer heavy losses. A major
Iranian defeat would demoralize Iran's soldiers, spread civilian disillusion and distrust, and
make preparations for another round of heavy fighting more difficult.
We expect Baghdad will maintain or increase the tempo of its air attacks against
key Iranian oil and industrial facilities. Baghdad believes that, by increasing its attacks on
Iranian economic targets in small increments, Tehran will eventually be forced to the
bargaining table. Although sustained and effective bombing attacks are probably the only
way that Iraq can force Iran to accept a negotiated settlement, the chance that this
strategy will succeed is probably less than one in 10 -- at least as long as Ayatollah
Faced with narrowing military options and a deteriorating economy, we expect Iran
to increase its efforts to deter Gulf Arab support for Iraq. The Gulf states will probably
seek closer security ties to the United States to counter Iranian attacks on Gulf shipping
and increasing Iranian-sponsored terrorism and sabotage, but they will also explore
Chances are slim for either a major Iranian victory or a cease-fire during 1987. Iraq
nonetheless would have difficulty defending against a series of simultaneous Iranian
attacks along the border. Additional Iraqi setbacks or a major defeat -- the loss of Al
Basrah, for example -- would substantially increase the likelihood that Saddam Husayn
would be ousted. Factional infighting over war strategy could paralyze decisionmaking in
Tehran, while a worsening economy and spreading popular discontent could divert
attention from the war and cause the clerical regime to reduce the fighting on the border.
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Comparison of Forces
Iraq
Personnel
800,000-1,000,000
800,000
APCs
1,000
2,000
(+)
Artillery
800
2,200
Tanks
900
(500 operational)
3,000
(+)
Personnel
50,000
60,000
Combat Aircraft
200 (fewer than 35
operational)
500
Personnel
15,000
Destroyers
3
0
Frigates
4
0
Missile Boats
7
10
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Probable Developments in 1987
--Large-scale Indian military exercises near the Pakistani border early in the
year will keep tension between the two countries high.
--Indian and Pakistani forces will continue to exchange small-arms fire
along the line of control in Kashmir and to engage in small-scale
skirmishes farther north on the Siachen Glacier.
--Islamabad will use increased Soviet and Afghan border violations to push
for additional advanced US arms.
--New Delhi will lobby Washington to limit military aid to Pakistan and will
probably negotiate new arms agreements with Moscow for air defense
weapons capable of threatening any Pakistani airborne early warning
(AEW) aircraft.
--Indo-Chinese relations will take a downturn, particularly in the spring, if,
as we expect, both sides deploy additional forces to India's disputed
Possible Surprises
--Unilateral military action by either India or Pakistan -- such as an Indian
attack against Pakistan's nuclear facilities -- could lead to a full-scale
war, although prospects are slight.
--A significant renewed effort by India and Pakistan to reduce tension,
while also unlikely, could result from an assessment by the two sides
that diplomatic contacts would restrain the nascent nuclear arms race
and cross-border meddling.
--An agreement between India and China to delineate their border is
possible if India backs down from its territorial demands and agrees to a
settlement along existing lines of control.
We believe that the strategies that Islamabad and New Delhi use to extricate
themselves from the recent downturn in relations will play a large part in determining the
tone of bilateral military relations through 1987. Last year's heightened military tensions
between the two countries paralleled the diplomatic tensions between them. Negotiations
to limit hostilities on the disputed Siachen Glacier proved fruitless, and no progress was
made in negotiating the terms of a 1985 agreement by President Zia and Prime Minister
Gandhi to refrain from attacking each other's nuclear facilities. By the end. of the year,
Pakistani anxieties over impending Indian field maneuvers along the border raised military
We expect the duration and size of the Indian exercises (two and a half months
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and more than 150,000 troops and 1,500 tanks) to further strain relations between the two
countries. We do not believe the maneuvers are a cover for an Indian attack on Pakistan.
They are being held considerably south of the main invasion routes into Pakistan, and the
Indians have not stockpiled ammunition and supplies in forward depots. The exercises,
however, may coincide with firefights along the cease-fire line in Kashmir and further
Indian accusations of Pakistani support for Sikh extremists.
We expect the conclusion of the winter military exercise in March to shift the
attention of both Pakistan and India to arms modernization and military expansion efforts.
We believe that the Pakistanis will use continued Soviet pressures along the Afghan
border as an argument to seek additional US military support. They want AEW aircraft or
other early warning equipment, advanced tanks, and additional quantities of defensive
missiles (particularly Stingers and AIM-9Ls) if they can arrange funding from either a third
party (most likely Saudi Arabia) or from national reserves. Pakistani officials will also
attempt to settle the terms of the next six-year US military aid program, stressing the
need for M-1 main battle tanks, multiple launch rocket systems, and possibly as many as
150 modified F-16A fighters.
We believe that New Delhi will respond to Pakistani acquisition of AEW aircraft by
obtaining additional Soviet air defense weapons, possibly including SA-5s, MIG-31
fighters, and advanced air-to-air missiles. Indian complaints about Pakistani-US arms
deals will not detract from New Delhi's efforts to procure additional Western arms and
defense production technology. We expect India to take delivery of an aircraft carrier from
the United Kingdom, two submarines from West Germany, and additional Mirage 2000
fighters from France during 1987 and to press ahead with plans to produce a series of
indigenously designed tanks, helicopters, and fighter aircraft.
We do not believe that bilateral tensions will be serious enough to provoke war
during the coming year. We believe that the Indians and Pakistanis agree that the costs
of another war would far outweigh the gains. Indian defense planners probably believe
that the opportunity to stop Pakistan from acquiring nuclear weapons has passed. So long
as they do not believe Islamabad is actively stockpiling weapons, we doubt that New
Delhi will strike Pakistani nuclear facilities. Nor are Pakistani support for Sikh extremists or
Pakistani claims to Kashmir -- the two other key irritants in bilateral relations -- likely to
provoke major military actions by either side.
border problem.
Indo-Chinese relations are likely to worsen, although not as seriously as India's
relations with Pakistan. The Chinese establishment of a small military outpost in disputed
territory along India's northeast frontier and India's effort to beef up its forces in the area
have already raised border tensions. We expect the situation to become more risky in the
spring when the mountain passes between the two countries open up and both sides can
reinforce their military units. Despite the heightened prospects for armed conflict, we do
not believe that either India or China wants the situation to get out of hand. We cannot
discount the possibility that one or the other will make a fresh move to resolve the
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Comparison of Forces
India
Pakistan
Personnel
1,100,000
450,000
APCs
950
750
Artillery (100mm and over)
1,950
1,150
Medium Tanks
3,250
1,550
Personnel (includes air
115,000
defense)
Aircraft
Combat
520
300
Reconnaissance
40
16
Transport
170
10
Personnel
46,000
13,000
Combatants
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Probable Developments in 1987
--Insurgent forces, equipped with more sophisticated antiaircraft weapons,
will pose an increased challenge to Soviet and Afghan aircraft, while
continuing improvement in insurgent military cooperation, particularly in
the north, will result in more effective operations.
--Soviet forces concentration on interdiction of insurgent supply lines and
increased reliance on heliborne operations, special troops, and firepower
are likely to cause more problems for the insurgents.
--Afghan regime ground forces will remain incapable of shouldering a
significant part of the ground combat.
--Political divisions among the resistance groups will continue to hinder
efforts to attract more international support for the insurgent cause.
--Soviet pressures on Pakistan, primarily in the form of sabotage operations
in the North-West Frontier Province and cross-border air violations, will
not curtail Pakistani support for the resistance.
Possible Surprises
--There is a slim chance that Pakistan will agree, in the UN-mediated
negotiations on Afghanistan, to cease support to the insurgents in return
for a Soviet troop withdrawal over an extended (more than one year)
period.
--There is a remote possibility that the performance of the Afghan army
will improve sufficiently to allow Soviet troops to minimize their direct
combat role.
--There is an equally remote chance that the Soviets will increase their
troop levels sufficiently (to a level of 250,000 or so) to seriously strain
insurgent capabilities and increase Pakistani national security concerns.
--Increased Iranian support to the Shia insurgent groups in western and
central Afghanistan would provoke significant insurgent pressure on the
We doubt that the Afghan war -- which commenced with the Soviet invasion in
late December 1979 -- will show signs of ending in 1987. Both sides improved tactics
and can point to some successes in 1986, but neither the insurgents nor the Soviets have
turned the corner. We expect the fighting to intensify as both sides struggle for control of
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We believe that two major military factors will continue to aid the resistance
--More effective air defense by the insurgents, including use of Stinger and
Blowpipe missiles, will raise the cost of the war to the Soviets and
increase insurgent military effectiveness by providing cover against
Soviet air attacks, although Soviet countermeasures may offset some of
the impact.
--Desertions, poor morale, and factionalism among the leadership of the
regime's ground forces will continue to hamper Kabul's military
We expect the Soviets to continue to emphasize blocking insurgent resupply
missions and heavy use of air and artillery. More Soviet special-purpose aircraft and
artillery forces may also be deployed from the Soviet Union. The Soviets' harsh policies,
possibly including forced relocation of civilians from insurgent-dominated areas and
retaliatory bombings, will take a toll on the insurgents' civilian support and combat
capability. Soviet interdiction efforts, depopulation of rural areas, and logistic bottlenecks
caused by Soviet actions -- as well as shortages of pack animals and vehicles -- will
create short-term food shortages for the insurgents in some provinces.
Although we expect continued improvement in tactical cooperation among the
insurgent commanders in Afghanistan, we believe that efforts to foster political unity
among the fractious insurgent groups headquartered in Pakistan will have only limited
success. Even though we believe that the military commanders will assume a larger
political role in the coming year, we expect bickering among the political leaders to
persist and to limit the alliance's ability to present a united front at international forums.
US and Pakistani efforts to encourage the opening of alliance offices in Islamic countries
will continue to be hampered by the insurgent groups' inability to decide how to staff
We are confident that Pakistan will withstand Soviet pressure and continue its
support for the Afghan resistance and refugees during the year, even though Soviet and
Afghan regime subversion in the North-West Frontier Province almost certainly will
increase. Soviet/Afghan cross-border violations may also increase, perhaps even
dramatically, if the resistance retains its capability to conduct large-scale infiltration of
men and equipment from Pakistan. In the unlikely event that Pakistan agreed to stop
supporting the resistance, we would expect resistance morale to drop sharply and clashes
to break out between Afghan refugees and Pakistanis. A significant reduction in support
for the resistance from other countries, which we also do not expect, could create serious
weapons and ammunitions shortages and a dramatic decline in insurgent operations.
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Probable Developments in 1987
--The region's economic outlook will continue to depend largely on the
price of oil, which probably will average $10-14 per barrel and remain
somewhat volatile. There is a good chance that the region will achieve
growth in real GDP of about 1 percent, given slightly higher revenues for
the oil exporters and modest improvements in government efficiency.
--Many states will experience serious unemployment because of limited
domestic job creation, inadequate local training programs, and high
population growth. High unemployment will be compounded by the
return of workers to such countries as Egypt, Pakistan, and Sudan.
--Several governments will continue to call for more free-market
competition and privatization to boost economic growth. Uncertainty
about the outlook for the economy and oil revenues, however, will
discourage private domestic investment.
Possible Surprises
--If a cut in OPEC production raised oil prices to $15-18 per barrel, net
importers of oil such as India, Pakistan, and Morocco would face higher
import bills than they did in 1986. Even so, the entire region would still
attain higher GDP growth than last year.
--Regional economic difficulties will mount if the OPEC price and
production agreement collapses. A prolonged recession would probably
stimulate destabilizing unrest in Egypt and Sudan and would weaken
political support for regimes in other countries where living standards
have already fallen sharply in recent years, including Iran; Iraq, and Libya.
We expect the generally negative economic trends that prevailed throughout the
region in 1986 to continue or to improve only slightly in 1987:
--Real economic activity probably declined about 0.5 percent, compared
with 3-percent growth in 1983, 4.5-percent growth in 1984, and no
growth in 1985.
--Hard currency earnings plummeted. Revenues from the sale of oil and
petrochemicals fell as much as 50 percent in some oil-producing
countries. Nonoil producers were seriously -hurt by depressed prices for
key exports such as phosphates (Morocco, Jordan), tea (India and Sri
Lanka), and jute (Bangladesh).
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--Worker remittances to labor-exporting countries dropped by about
one-third from their 1985 level.
--Tourism -- an important moneymaker for several countries -- declined
as the fear of terrorism among prospective foreign tourists mounted.
--The lower value of the dollar substantially reduced the real value of
current oil earnings and eroded assets denominated in dollars.
We believe that continued low foreign exchange earnings will be barely adequate
to maintain imports of essential consumer and military goods in some countries such as
Egypt, Iran, Iraq, and Libya during 1987. Shortages or even black markets could become
increasingly serious problems in these countries as well as in Sudan and Syria.
We expect banks in the Gulf states to continue their reluctance to grant more
credit to area debtors because they have been late in making repayments on existing
loans. Area governments will be unable to encourage the repatriation of capital as
investors continue to seek higher rates of interest in countries with lower political risk.
High rates of inflation will continue to be a problem, particularly for Iran and North
Yemen
We expect worker remittances to level off in 1987 rather than to continue to
decline. We do not believe that Saudi Arabia and the smaller Gulf states will make much.
headway in their efforts to reverse their dependence on expatriate labor for the
foreseeable future:
--Demand for maintenance and operational staff will remain high outside
the construction sector.
--Most Gulf state nationals are unwilling to do manual labor that is
currently performed by foreign workers. Relatively few locals are trained
for many of the skilled jobs now held by expatriates.
--Landlords and merchants have vested interests in a large immigrant
population -- whose spending on housing and consumer goods
contribute significantly to the incomes of these influential groups.
Governments in Bangladesh, Egypt, Jordan, Morocco, North Yemen, and Sudan
almost certainly will ask for more financial aid from the United States. Leaders of these
poorer countries will resist implementing the austerity measures necessary to meet
i
mss
____
_
cond
tio
for
h
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Middle East and South Asia: Economic Indicators, 1982-87
Weighted Average GDP Growth Rate Estimated Foreign Exchange Reserves
Percent Billion US $
Estimated Current Account Balance
Billion US $
Estimated Budget Deficit
Billion US S
1982 83 84 85 86a 87a,b 87a,c 87a,d -100 1982 83 84 85
a Projected.
b Oil prices at $15-18/barrel.
c Oil prices at $10-14/barrel.
d Oil prices at $5-9/barrel.
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Probable Developments in 1987
--The moderate Arab states will continue to fail to coalesce into a bloc
capable of action on controversial issues. Radical Arab states (Libya,
Iran, and Syria) are likely to retain their veto over moderate efforts to
reshape the Arab "consensus."
multilateral institutions.
Possible Surprises
--The demise of Iran's Khomeini, Syria's Assad, or Libya's Qadhafi might
shift the pattern of regional alignments and allow moderate Arab states
to regain some initiative. Even under these circumstances, significant
progress toward resolution of key regional issues is unlikely.
During the coming year, we expect to see a continuation of the trend toward
deepening conflicts between regional rivals, tactical accommodations between states that
are abandoned as hastily as they are taken up, and radical dominance on key issues as a
result of the moderates' default.
In a political arena characterized by personalistic leadership, we do not believe that
any Arab head of state on the scene or likely to emerge in 1987 will have the political
resources to put together an Arab consensus or even a majority strong enough to stay
together when politically controversial decisions must be reached. We expect Egypt to
make progress toward reintegration into Arab ranks during the year, but President
Mubarak's cautious and pragmatic leadership style will inhibit a strong regional leadership
role for Cairo. Mounting financial difficulties throughout the region will offer opportunities
for skillful Saudi diplomacy, but we believe that King Fahd lacks the abilities that
strengthened the kingdom's regional role under King Faysal.
Divisive issues -- the Iran-Iraq war, differing strategies toward Israel and the
occupied territories, oil pricing and production policy, and parochial questions such as the
Western Sahara conflict -- will continue to impede the effectiveness of
consensus-building institutions. We expect multilateral diplomacy in the Arab League and
the Islamic Conference Organization to continue to demonstrate the intensity of
disagreement on these issues more than resolving them.
Overt cooperation among the radical states to orchestrate an anti-Western
consensus in multilateral forums may diminish in the coming year in response to Western
pressures. As Western states impose a higher price for the radicals' support of terrorism,
we expect the radicals' diplomatic offensive against the West to garner less support from
We believe that covert cooperation among the radicals will remain at least at its
present level. Syria is unlikely to pose a serious challenge to Iranian-supported radical
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Shia operations in. Lebanon beyond the periodic displays of force that Damascus uses to
remind the parties involved of Syrian preeminence. Libyan involvement with the
Iranian-backed Hizballah in Lebanon may increase. Syrian and Libyan support of radical
Palestinian operations in the occupied territories will probably increase if King Hussein's
West Bank initiative gathers momentum.
We believe that leadership changes offer the most likely possibilities for sharp
departures from current trends in regional alignments. Removal from the scene of
Khomeini, Assad, or Qadhafi might set in train policy changes that would break the
Syrian-Iranian relationship, heal the breach between Damascus and Baghdad or between
Damascus and the mainstream PLO, or even open the possibility of an Arab consensus
on the conflict with Israel.
We do not expect trends in regional politics in the Arab world to offer much hope
for constructive developments for the United States in the coming year. Even if a
stronger moderate bloc emerged, the political weakness of the individual regimes, the
perennial divisions in the Arab world, and paralysis in its multilateral institutions will
reinforce the stalemate in key regional conflicts. The polarization between radicals and
moderates, moreover, will heighten the threat to US friends in the region as well as
contribute to the direct terrorist threat to US personnel and facilities.
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Probable Developments in 1987
--Prospects are not good for a breakthrough in the Arab-Israeli peace
process in 1987 because of the lack of an Arab negotiating partner for
Israel and deep divisions within Israel over the future of the occupied
territories.
--Improvements in bilateral Egyptian-Israeli and Jordanian-Israeli relations
are possible, but they will be overshadowed by the deteriorating security
situation in South Lebanon, which threatens northern Israel.
None of the key Arab players is willing or able to enter into substantial, direct
negotiations with Israel. Nor is Israel likely to present a dramatic peace gesture,
especially while.the National Unity coalition government rules.
In Jordan, King Hussein will remain unwilling to enter peace negotiations directly
with Israel without substantial Arab and Palestinian support -- which is not likely, given
the deep divisions in the Arab and Palestinian camps. The King is well aware of Jordan's
strategic weaknesses -- its majority Palestinian population, its small Army and weak Air
Force, and its long, exposed, lengthy borders with Syria and Israel. The King's skillful
diplomacy has given his kingdom acceptable ties to Syria, Iraq, Egypt, and Saudi Arabia
while maintaining quiet but prosperous trade with Israel. Open negotiations with Israel
would imperil the ties to other Arab states and would have only a remote chance, at best,
to secure the major territorial concessions from Israel that would satisfy Arab demands.
Among the Palestinians, Yasir Arafat's long-held aversion for bold initiatives in the
peace process will continue to be reinforced by internal disarray and political weakness.
The Palestinians are more deeply divided than at any time since the late 1960s. Although
he is without question the most popular Palestinian leader -- demonstrated in part by
West Bank polls -- Arafat's Fatah suffered important defections on the left in 1983-84
(Abu Musa) and the right in 1986 (Abu Za'im).
We expect Syria to continue to adhere to its policy of seeking to achieve strategic
parity with Israel before entertaining any movement in the peace process. We believe that
Damascus has achieved its goal of becoming the preeminent Arab power in the Levant
and can veto by force, terror, and intimidation any unilateral move toward talks by Jordan,
Lebanon, or the PLO.
Egypt, weakened by economic problems, cannot serve as an effective negotiating
partner for Israel. We believe that it could assist marginally another Arab state talking to
Israel but has little to offer on its own. Morocco is too far removed from the scene to
play a major role. Iraq and Saudi Arabia are preoccupied with the Iran-Iraq war.
Even if an_ Arab negotiating partner stepped forward with the ability to deliver, we
believe that it would precipitate a major political crisis in Israel that almost certainly
would require a new election. Many on the left fear the long-term consequences, of
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occupation for Israeli democracy, while the right is deeply committed to retaining all of
the occupied lands for strategic and ideological reasons. Meanwhile, Jewish settlements
in the occupied territories become more deeply entrenched, major new roadways tie
Israel more tightly to the territories, and a new generation matures throughout the region
with no practical memory of the pre-1967 borders.
We believe that prospects for an international conference attended by Israel and
several Arab states are also dim. We doubt that any Arabs would participate in such a
dialogue without the PLO and/or Syria. Israel -- particularly the Likud bloc -- will almost
certainly continue to believe that an international forum would favor the pro-Soviet Arab
Although the peace process will remain stalled, there was some improvement in
Israeli-Egyptian ties and de facto Israeli-Jordanian cooperation in 1986 that may reduce
bilateral tensions on Israel's two longest borders in 1987:
--The Israeli-Egyptian relationship has partly recovered from the impact of
the Israeli invasion of Lebanon in 1982, although it remains cool and
troubled. Few Egyptians see much advantage in improving ties to Israel
except as they improve Cairo's ties to the United States. We expect the
Taba arbitration process to remain a potential source of new difficulties.
--We believe that some progress in Israeli-Jordanian cooperation can be
made by reducing direct Israeli involvement in Palestinian municipal
affairs and increasing Palestinian economic autonomy and mutually
beneficial Jordanian-Israeli trade and tourism. This will depend on
whether pro-Syrian radical Palestinian terrorism on the West Bank can be
kept within limits. Although Israel and Jordan have a common interest in
reducing PLO influence on the West Bank, we doubt that they can
substantially erode Fatah's hold on the loyalty of most Palestinians,
especially the young. Cooperation will also be hindered by distrust
between Amman and Tel Aviv, which we expect to be worsened in 1987
by serious shortages of shared water in the Jordan Valley.
Elsewhere, we believe that the peace process will remain threatened by the
deteriorating situation in Lebanon. We expect the growing strength of pro-Iranian Shia
radicals and the revival of Palestinian strength in South Lebanon to continue to erode the
political underpinnings of Israel's security strategy.
The approach of the US presidential election in 1988 will also favor continued
stalemate in the peace process. Middle Eastern leaders look to Washington to provide the
major impetus for that process but are convinced that in election years the United States
cannot play that role. Arab and Israeli press commentaries suggest most regional players
already believe that a "lame duck" president lacks the credibility to move the political
process forward. In sum, they believe stalemate in 1987 is all but certain to be followed
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Probable Developments in 1987
--Middle Eastern terrorist groups, particularly radical Palestinians, will
continue to attempt spectacular attacks abroad, but the tougher security
measures taken by many nations will make the operational environment
more difficult.
--Neither Syria, Libya, nor Iran will end their support for terrorism.
Stronger international pressures -- including the threat of military
retaliation -- will force them to work harder to conceal their support.
--Israel will continue to be the primary target for Palestinian terrorists, but
the United States and the United Kingdom also will be at particularly high
risk because of their political and military actions against Libya and Syria
Possible Surprises
--Increasing pressure from PLO hardliners to retaliate against the United
States for what the PLO views as Washington's unqualified support for
Israel may force Chairman Arafat to sanction attacks against US targets.
--Growing economic and military pressures on Iran increase the prospects
that Tehran will launch a major terrorist campaign against the Gulf
states, including sabotage of oil facilities.
We believe that radical Palestinians will continue to be the most active and skilled
terrorist groups in 1987. We expect to see more splits, offshoots, and shifts in loyalty
We anticipate more cooperation between Palestinian and radical Shia groups in
Lebanon. We believe the decade-long Lebanese civil war has created a pool of ready
recruits for radical groups intent on more spectacular terrorist operations. For such
groups, violent behavior is becoming ingrained and likely to be pursued as an end in
Among the three states that support terrorism, we expect Syria to continue to
view it as an effective tool in settling interregional differences. If economic and military
pressures on Iran do not abate, Iran may decide to broaden its war with Iraq by
conducting sabotage operations against moderate governments in the Gulf that support
Iraq. Libya will continue efforts to establish links to dissident groups outside the region,
Israel will continue to face the highest risk for attack by terrorist groups during the
year. In late 1986 the PLO publicly called for increased attacks against Israel in the hopes ?
of reconciling hardliners and strengthening organizational unity.
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We also believe that the United States, Western Europe, and possibly the moderate
Arab states will face higher risks from terrorists in 1987. Prospects remain high that US
interests, either directly or indirectly, will be targeted by Middle Eastern terrorist groups,
encouraged by strong US ties to Israel, anti-Americanism among younger Arabs, and
persistent pressure by radical states. Some groups, such as Abu Musa's Fatah dissidents,
or individual Palestinians willing to hire themselves out as freelance terrorists may
attempt an attack inside the United States to gain notoriety.
We believe that Western Europe will continue to be a preferred and accessible site
for terrorist attacks. If terrorist groups believe that increased security in major European
cities makes attacks difficult, they may shift to less protected targets, such as smaller
regional airports. We believe that the countries that approved sanctions against Syria in
1986 all run the risk of reprisal. The United Kingdom will be a prime target because it
broke relations with Syria in November and supported the US military strike against Libya
last April. Some Palestinian groups also may stage attacks against West European
countries where their colleagues are imprisoned.
More active efforts on the part of the moderate Arab states to resolve Arab-Israeli
issues, as well as greater support for Iraq in the Iran-Iraq war, would significantly boost
the risk of terrorist reprisals against them by Middle Eastern radicals.
Increased terrorism in the Middle East or the threat of new attacks 'may create
opportunities for expanded counterterrorism cooperation between the United States and
the moderate Arab states. If the United States conducted another retaliatory military strike
against a regional state for its involvement in terrorism, however, we would expect
increased anti-US sentiment in the region. Such a reaction might force moderate leaders
to withdraw temporarily from antiterrorism cooperation with Washington even though the
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