MIDDLE EAST AFRICA SOUTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A001300350002-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 12, 2016
• Document Release Date: June 1, 2001
• Sequence Number: 2
• Publication Date: July 15, 1975
• Content Type: NOTES

Approved For Release 2001/08/08 : CIA-RDP79T00865AO01300350002-9
Secret
No Foreign Dissem
LALL UIIYULE
Middle East
Africa
South Asia
Secret
126
No, 0827/75
July 15, 1975
Approved For Release 2001/08/08 : CIA-RDP79T00865AO01300350002-9
 Approved For Release 2001/08/08 : CIA-RDP79T00865A901300350002-9
No Foreign Dissem/ControZZed Di.ssem
Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 005827
Exempt from general declassification schedule
of E. 0. 11652, exemption category:
g 5B (1), (2), and (3)
Automatically declassified
on: Date Impossible to Determine
Approved For Release 2001/08/08 : CIA-RDP79T00865A001300350002-9
 Approved For Release 2001gqMR.-RDP79T00865A001300350002-9
MIDDLE EAST - AFRICA - SOUTH ASIA
This publication is prepared for regional specialists in the Washington com-
munity by the Middle East - Africa Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
Saudi Arabia: Budget Provides Rationale
for Aid Cutbacks . . . . . . . . . . . . . . 3
Guinea-France: Relations Restored . . . . . . . 4
July 15, 1975
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Saudi Arabia
Budget Provides Rationale for Aid Cutbacks
Riyadh last week released a record budget for
the 1976 fiscal year. The budget exaggerates probable
expenditures, apparently to rationalize a major cut
in foreign aid and to justify Saudi oil policy. The
unreality of the budget is indicated by the fact the
Saudis are predicting a deficit of $4.3 billion; they
will probably emerge at the end of the year with a
surplus of $7 billion or more.
Expenditures are slated at an unrealistically
high $31.8 billion--more than 2.5 times the amount
spent last year. The Saudis may manage to spend part
of the planned increase in defense outlays--scheduled
to jump from under $3 billion to over $7 billion--but
administrative and resource bottlenecks rule out the
expenditure of even $20 billion, unless aid outlays
far exceed the amount budgeted. Earnings during the
fiscal year are likely to be at least as large as
the $27.2 billion forecast in the budget, and an in-
crease in oil prices this fall would boost the total.
Riyadh probably will use the budget to put off
aid requesters when it suits Saudi purposes. The
projected deficit can serve as a handy excuse to main-
tain oil production at 7 million barrels a day or more
and could also be used to justify further price hikes.
It also can help justify the low aid budget--one third
of last year's disbursements.
Expenditures under the budget will have a dramatic
impact on Saudi development. Economic growth outside
the oil industry will accelerate, and large quantities
of foreign goods and labor will be imported. The pres-
sure on resources will probably aggravate domestic
inflation. (CONFIDENTIAL)
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Guinea-France
Relations Restored
V
Guinea and France resumed diplomatic relations
on July 14 after a ten-year break. Restoration of
ties follows several months of difficult negotiations
between Paris and Conakry in which several thorny
issues were settled and other problems were left for
future discussion.
Paris apparently initiated the contacts to nor-
malize relations and made several gestures to meet
conditions raised by Toure. The French reportedly
agreed to pay $44 million to the Guinean government
for pensions to Guinean veterans of the French army.
Paris suspended the pension payments in 1965 when
Toure broke relations after charging that France
and Ivory Coast were plotting to overthrow his regime.
The French have also suppressed a Guinean exile news-
paper published in France in a move to curb activities
there of anti-Toure elements. Paris, however, refused
Toure's demand that Guinean exiles in France be turned
over to his government.
Over the past year, Toure--who is clearly angling
for French aid to help Guinea's chronically troubled
economy--released a number of French citizens who had
been imprisoned in Guinea on charges of conspiring
against the government. The remaining prisoners will
probably be released soon. Considering the history
of stormy relations between Guinea and France, both
countries are likely to be cautious in their dealings
with each other and French economic aid may not be
as large as Toure envisions. (CONFIDENTIAL)
July 15, 1975 4
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