INTERNATIONAL ISSUES MONTHLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A002300010009-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 45
• Document Creation Date: December 22, 2016
• Document Release Date: July 3, 2012
• Sequence Number: 9
• Publication Date: November 22, 1977
• Content Type: REPORT

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-26L Foreign
Assessment
Center
International Issues
Monthly Review
22 November 1977
Secret
RP All 77-011
22 November 1977
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INTERNATIONAL ISSUES MONTHLY REVIEW
22 November 1977
CONTENTS
ENERGY
POLITICAL FACTORS AFFECTING THE SECURITY OF INTERNA-
TIONAL OIL SUPPLY 1
As the international oil supply situation tightens
during the early 1980s, a complex set of political
factors will increasingly influence the security
and stability of oil flows.
TERRORISM
INTERNATIONAL TERRORISM: THE PROBLEM OF PATRON STATE
SUPPORT 6
This article addresses the extremely complex and
controversial phenomenon of governmental support
to groups that engage in acts of international
terrorism. The available evidence is summarized
by region with some 13 countries receiving in-
dividual attention. The patterns, trends, and
implications that emerge from this survey are
analyzed in the concluding paragraphs.
POLITICAL IMPLICATIONS OF THE WEST GERMAN RESPONSE TO
TERRORISM 17
While West German policy in the recent Lufthansa
incident has been widely praised, its implica-
tions for the future are mixed. Obstacles to
effective international cooperation, pressures
for inappropriate rescue attempts, and changes
in terrorist motivations and capabilities will
continue to plague those dealing with terrorism.
NORTH-SOUTH DIALOGUE
GROWING "EAST-SOUTH" TENSIONS 23
A recent UNCTAD-sponsored meeting found LDC spokes-
men directing demands and criticisms usually re-
served for the OECD states at the East European
Communist countries.
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LDC VIEWS ON THE COMMON FUND 25
The developed and developing countries entered the
second round of UNCTAD common fund negotiations
with very different proposals. This article ex-
amines the main elements and objectives of the LDC
position and assesses the prospects for agreement
at the meetings.
LDC POSITIONS ON KEY COMMON FUND ISSUES 32
Differences among LDCs on the main issues at stake
in the common fund talks are identified in tabular
form.
REGIONAL POWERS
AFRICAN ATTITUDES TOWARD NIGERIA 37
Nigeria has recently made a concerted effort to
play the predominant leadership role in African
affairs. While its regional neighbors concede
Nigeria's growing economic and military import-
ance, they are ambivalent about its role and
would not welcome its rise as an African super-
power.
Note: As a result of a reorganization, effective 11 October 1977, intelligence
publications formerly issued by the Directorate of Intelligence and by the National
Intelligence Officers are now being issued by the National Foreign Assessment
Center. Publication covers and titles have been adjusted to reflect this change. This
publication was formerly titled International Issues.
This publication is prepared by the International Issues Division, Office of Regional
and Political Analysis, with occasional contributions from other offices within the
National Foreign Assessment Center. The views presented are the best judgments of
individual analysts who are aware that many of the issues they discuss are subject to
alternative interpretation. Comments and queries are welcome. They should be
directed to the authors of the individual articles.
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Political Factors Affecting the Security of International
? Oil Supply
A great deal of attention has recently been focused
on the oil supply problems created by resource and eco-
nomic factors, and considerable analytic effort has been
devoted to the question of how the United States and
other developed countries will be affected by shortages
in the early to mid-1980s. Also, continuing attention
is paid to the short-term possibility of an Arab oil em-
bargo arising from some aspect of the Arab-Israeli con-
flict. This article addresses other political factors
that could, in the future, lead to Less drastic but still
potentially disruptive reductions in production or steep
price increases.
The purpose of the article is not so much to esti-
mate the chance for such disruptions as to make the point
that the odds are likely to grow as the supply situation
tightens during the early 1980s and to examine the con-
siderable range of complex political issues to which ade-
quate oil supplies now seem mortgaged. This article is
necessarily speculative and does not represent the of-
ficial view of either ORPA or NFAC.
Leaving aside the Middle East question (from the
potential for actual conflict to Arab elite perceptions
of the US role in peace negotiations), the two political
factors that seem most likely to threaten the security of
oil supplies are regional disputes involving oil produc-
ing states and changes of regime in one or more of them.
Both of these problems have received considerable atten-
tion from regional political analysts and have recently
become part of international energy policy delibera-
tions and are therefore only briefly discussed here.
The prospect of an exporter threatening to disrupt
supplies to affect the outcome of a regional dispute is
potentially most serious among Middle East OPEC members.
As the overall oil supply situation tightens, the
chances,that a participant in a regional dispute will
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threaten to disrupt exports to gain leverage over the US
or some other third party will probably increase. The
potential for tension between Saudi Arabia and Iran re-
garding military and political influence in the Persian
Gulf provides the most widely discussed example, although
a Syrian-Iraqi or Iranian-Iraqi dispute seems just as
likely. The conflicts between "radical" regimes (Iraq,
Syria, Algeria, Libya) and "conservative" regimes (Saudi
Arabia, Kuwait, UAE, Iran), based on economic and politi-
cal disagreements of both a practical and ideological
nature, seem to provide an even greater danger because
of the number of participants and the interests of out-
side states, particularly the United States and the Soviet
Union.
With respect to a change of regime in the oil pro-
ducing states, the most disruptive potential change would
involve the replacement of conservative regimes that have
been closely linked to the United States (Iran or Saudi
Arabia) by more radical governments or factions that
might be less willing to expand production and more likely
to exert pressure for concessions in other areas because
of their ideological preferences or a new definition of
national interest.
Less severe but still important reductions in the
amount of oil produced and available for export could
occur as the result of an electoral change in government,
individual executive changes, or even attitudinal changes
in Venezuela or Mexico. In Venezuela for example, be-
cause of severe domestic revenue pressures and a wide
recognition that economic development is dependent on
good US-Venezuelan relations, there is good reason to
accept the validity of pledges made by both political
parties to honor supply commitments to the US (as they
did during the 1973-74 OAPEC embargo). Assuming, however,
future governmental political and technical control of
both production and marketing, it is possible that during
a tight market period Venezuelan decisions on production
and pricing will be linked to pressures for concessions
in other policy areas. While any such production or
pricing decisions would be fairly incremental, they would
serve as a constant source of pressure that would be
exerted in a complex bargaining process.
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A third set of factors that could disrupt the inter-
national oil market stems from problems in North-South
relations.* Although this set of factors does not con-
stitute as serious and immediate a danger as the Middle
East question or as potentially volatile a situation as
regional conflicts or changes in regime, it will probably
grow in importance. As current OPEC excess productive
capacity is absorbed by increased world demand and indi-
vidual producer states realize the potential impact of
their unilateral actions to restrict supply, we can ex-
pect them to levy subtle pressure, based on the implicit
threat of a supply curtailment, or severe price increases,
against major consumers for various political/economic
concessions.
One such problem area that could cause supply dif-
ficulties (either selective production limits or steep
price increases) would be dissatisfaction on the part of
excess revenue" states with their position in the inter-
national financial system. The apparent belief of leaders
in Saudi Arabia, Kuwait, and other surplus states that
healthy developed country economies are necessary for
stable investments will work to moderate supply actions,
but they could nonetheless be tempted to use supply-price
pressure to set the terms for their greater participation
in the developed country financial organizations and
"clubs." While they are aware of the general connection
between the value of their holdings and the health of
developed country economies, they also seek participation
in the decisionmaking processes that control both developed
country economic performance and the value of their
liquid assets and portfolio investments.
For example, it seems reasonable to assume that the
Saudis (who have already sought increased IMF standing
and who expressed an interest in participation in the
last economic summit) want a greater role in economic
deliberations in recognition of their growing investments
and financial interests. The Saudis do not appear to have
narrowly defined objectives or a well-developed strategy
*Although there is a wide range of national policies
among oil, producing states on North-South issues and
several (for example, the Persian Gulf states) certainly
do not regard themselves aligned with the "South" in this
area, there are issues of key importance to each state
that are now usually considered North-South issues (for
example, trade, development, financial questions).
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but only a general desire for greater participation in
those forums that make, or coordinate, decisions on mone-
tary, fiscal, and investment policy. There is likely to
be a period in which they seek both informal and formal
participation in a wide range of economic institutions
and develop a more comprehensive and detailed notion of
self-interest in this area. To the degree that they
feel frustrated or meet opposition from the industrialized
countries, they are likely to apply subtle, but poten-
tially important pressure based on threatened, or actual,
oil production limitations.
Another North-South problem area that is important
for the security of oil supply is trade and development.
Although claims in this area have been most forcefully
advanced by Iran, similar objectives appear important to
Venezuela, Mexico, and even Saudi Arabia. In varying
degrees, and following different specific national pat-
terns, they want developed country assistance in estab-
lishing an industrial base, as well as new trade patterns
that will supplement, and then replace, their crude oil
exports. Whether their specific objectives are in the
refining, petrochemical production, or semifinished and
finished manufacturing sectors, and whether the specific
measures they favor are market access agreements or de-
veloped country government-sponsored technology transfer
and development assistance, they seem likely to consider
the use of oil leverage to induce cooperation from the
developed countries. Although it is unlikely that a
severe supply rupture would occur because of these de-
sires, it is likely that a repeated pattern of producer
pressure - consumer response will become the normal state
of affairs by the early 1980s.
For example, if Iranian leaders genuinely believe
that it is in Iran's interest, and within her capabilities,
to develop an industrial base and see negotiated market
access agreements with the EC (and perhaps the US) as a
necessary part of the development process, it is con-
ceivable that they will link production and price policy
to development and trade concessions from the developed
countries. While it is unlikely, given Iran's economic,
political, and military ties to the developed nations,
that the Iranians would make immoderate threats or take
precipitate actions, even relatively mild pressure would
have considerable impact on major importers during a very
tight market period.
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The potential for supply disruptions stemming from
North-South tensions is further increased by bilateral
political and ideological differences and their domestic
importance. For example, because of the imbedded resent-
ment of perceived economic exploitation and paternalistic
domination, the Mexican Government, in response to a dis-
agreement on migrants or some other highly charged bi-
lateral issue, could find it politically expedient to
threaten to reduce oil exports.* It is also possible
that suspicion and criticism of US multinational firms
(in general, whether oil companies are present or not)
could lead to the same type of political pressure and
supply interruption after particularly unfavorable pub-
licity.
A fourth set of factors that could cause international
supply difficulties is to be found in the general frame-
work of East-West relations. Under the tight market con-
ditions predicted for the 1980s, the attitudes of oil
producing states toward a sharp US-Soviet dispute could
directly affect oil supply. For example, Iraq, perhaps
with active Soviet encouragement and subsidy, might limit
production or redirect exports to the Soviet bloc to in-
crease pressure on the Western states during a crisis.
While the current Iraqi policy of expanding production
?and earnings is unlikely to undergo fundamental change
for a substantial period, it is possible that this policy
would be reassessed during a period of high political/
military tension.
In sum, the only political factor that seems capable
of causing a general large scale oil supply disruption is
the Middle East peace question, and only that question,
along with regional conflict or changes in regime, could
bring any significant supply difficulty during the next
couple of years. As the international supply situation
tightens, however, there will be an increased likelihood
of threats of small but economically important supply ac-
tions stemming from various North-South or East-West ten-
sions as well. Dealing with these threats could become a
major new dimension of foreign policy concern for the indus-
trial democracies by the early 1980s.
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International Terrorism: The Problem of Patron State
Support
The Focus and Boundaries of Inquiry
The direct or indirect support that a substantial
number of states have rendered to violence-prone political
groups over the past decade has contributed in an important
way to a marked upsurge in international terrorism and
has enhanced the reach, disruptive potential, and capacity
for survival of several ultramilitant terrorist organiza-
tions. For the most part, this support has been passive
or even inadvertent. But the involvement of a few
countries--those that to varying degrees merit classifica-
tion as patron states?has been both active and voluntary.
*International terrorism is here defined as the threat
or use of violence for political purposes when (1) such
action is intended to influence the attitudes and behavior
of a target group wider than its immediate victims, and
(2) its ramifications transcend national boundaries as
the result, for example, of the nationality or foreign
ties of its perpetrators, its locale, the identity of its
institutional or human victims, its declared objectives,
or the mechanics of its resolution.
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For the purposes of the present discussion, patron
state support is defined as any direct or indirect govern-
mental assistanc,' to a foreign terrorist or terrorism-
prone group that entails positive and premeditated action.
The definition is relatively straightforward. Even so,
numerous problems were encountered in attempting to apply
it to the complex world of international terrorism.
In part, these difficulties were attributable to the
fragmentary--and sometimes contradictory--nature of much
of the available evidence. But there are a number of
substantive gray areas as well. One of the most perplex-
ing of these arises from the fact that practicing or poten-
tial international terrorists often are indirect benefi-
ciaries of support extended to broader dissident political
groups which enjoy some degree of international recognition
and legitimacy.*
These ambiguities and information gaps underscore the
fact that while the concept of patron state support is
useful in focusing attention on the most troublesome as-
pect of a much broader problem, it is not translatable
into a sweeping and relatively undifferentiated policy
response. Not only is consensus unlikely with respect
to which countries should be classified as patron states,
but there are no shortcuts to careful analysis of all
the factors--a number of them sure to be unique?that
could bear on a given government's behavior toward ter-
rorism-prone groups.
Because of the need to (1) cope with the gray areas
that were alluded to above, (2) dispel possible miscon-
ceptions about the activities of certain states, and (3)
cast the contemporary dimensions of the problem of govern-
mental support to terrorists into broader political and
historical perspective, the present discussion is not
Although the operation of this diversionary process is
generally extremely difficult to document, the risk is
always there. Hence, even though this article is not
concerned with governmental assistance to national libera-
tion movements or other paramilitary insurgent groups
per se, it takes due note of such activity and, whenever
possible, draws attention to the "terrorist spillover"
that bas occurred.
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limited to an examination of "worst offenders." De-
servedly or not, however, almost all of the countries
that receive individual attention in the regional survey
that follows are likely to be viewed by at least some
observers as patron states. The patterns, trends, and
implications that emerge from this survey are analyzed
in the concluding section of the article.
Regional Survey
International terrorist incidents are a common occur-
rence in the Middle East and North Africa. Moreover,
regional tensions (both Arab-Israeli and inter-Arab),
ethnic and religious affinities, a tradition of mutual
interference by Arab countries, political radicalism,
and personal idiosyncrasies have combined to produce a
climate in which governmental assistance to terrorist
groups is a widespread phenomenon.
Libya is perhaps the worst offender in this
regard. It has engaged both in extensive
support to terrorist groups and in covert
operations against neighboring states.
Qadhafi's patronage of violence-prone groups
is motivated by his personal ambitions for
regional leadership, his deep antipathy for
Israel, his desire to establish a united
"Muslim nation" that rivals other international
powers, and a strong underlying sense of
identification with the "oppressed" that
leads him to support rebel causes.
Like Libya, Iraq provides a wide range of
financial, logistic, and operational assistance
to Palestinian fedayeen and Arab national
liberation groups. Motivated by anti-Zionism,
dedication to the defense of Palestinian
rights, and its longstanding rivalry with
Damascus, Baghdad has generally limited its
support to what it deems to be "legitimate"
operations--attacks against Israel, against
moderate Arab regimes favoring peace talks,
and against Syria.
Although South Yemen is an outspoken pro-
ponent of radical causes in the Middle East,
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it lacks the financial wherewithal to
provide much tangible assistance to
Palestinian terrorists. Aden does, how-
ever, permit the Popular Front for the
Liberation of Palestine (PFLP) to main-
tain at least one training facility in
South Yemen, and it has furnished PFLP
and other Palestinian terrorists with
safe haven and other limited forms of sup-
port.
Algeria furnishes some direct support, such
as regular and diplomatic passports, mone-
tary aid, and possibly some operational
training to Palestinian terrorist groups;
but its activities in this regard appear to
be less extensive than those of Libya,
Iraq, and South Yemen. Algerian patronage
of such groups is motivated by a commitment
to the Palestinian cause and a desire to
support leftist groups opposing rightwing
"imperialist" regimes.
Sub-Saharan Africa has not been an active arena for
international terrorism. Only a few states in the region
have lent active support to violence-prone groups, and
most of this has gone to African insurgents. However,
in some African states--notably Uganda and Somalia--Arab
diplomatic pressure, financial encouragement, and reli-
gious affinity have been translated into support for
Palestinian terrorism.
Uganda has recently provided a wide range
of support to Palestinian terrorists, most
notably during the Entebbe hijacking
incident in 1976. For the most part this
support has been a product of President Idi
Amin's now virulent anti-Israeli attitude and
his identification, as a fellow Muslim, with
the Palestinians. The situation has been
complicated by Amin's unpredictability and
his close ties to the more radical Arab states
(Libya and Iraq, in particular).
Somalia--predominantly Muslim and a member
of the Arab League--has, under its current
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military regime, also provided direct sup-
port to Palestinian terrorists. In part
attributable to religious affinity and rev-
olutionary zeal, this assistance--which has
gone primarily to the PFLP--has also re-
portedly been motivated by a desire to win
Arab financial and political backing. But
Somali patronage of terrorists has not ex-
tended to condoning terrorist operations
on Somali soil. In fact, on at least two
occasions (the most recent of which involved
the October 1977 Lufthansa hijacking),
Mogadiscio has cooperated with Western offi-
cials in attempting to prevent or frustrate
such operations.
Unlike Uganda and Somalia, Tanzania has
generally limited its support of violence-
prone groups to local insurgents--both those
pitted against minority-ruled regimes in
southern Africa and those seeking the over-
throw of neighboring governments that Dar es
Salaam considers either ideologically incom-
patible or a threat to its security.* In
some cases, these groups have been respon-
sible for terrorist acts, but generally this
type of violence has been incidental to their
guerrilla warfare activity.
During the past decade, Latin America has been a
very active arena for international terrorism. Recent
actions by local security forces have severely weakened
most of the leading groups that currently engage in such
activity. Nonetheless, the local terrorism scene continues
to be complicated by the interplay of a regional terrorist
umbrella organization (the Revolutionary Coordinating
Junta), an opposing "consortium" of national security
services (Operation Condor), the activities of a number
of state-supported vigilante groups, the forays of Cuban
exile groups, and the role (now much reduced) of Cuba
itself as a patron state.
*In keeping with its "progressive" posture, however, Tan-
zania has permitted both the PLO and Argentina's terrorism-
prone Montoneros to establish offices in Dar es Salaam.
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-- Ten years ago, Cuba was extending consider-
able support to revolutionary movements
throughout Latin America. Since the early
1970s, however, the assistance that Havana
has provided to such groups has apparently
been quite limited and selective. It seems
designed principally to maintain contacts
and, in some cases, to keep the organiza-
tion concerned alive. Similarly, in the
Middle East the Cubans are basically pro-
viding only token assistance to Palestinian
nationalist groups. But Cuban support for
national liberation movements in Africa is
of a different genre. A large-scale effort
that has in recent years been directed
primarily against the white minority
governments in Rhodesia and Namibia, it
risks generating a "spillover" into spo-
radic terrorist attacks on Western property
or personnel in the area.
Like Sub-Saharan Africa, Asia has been relatively free
of international terrorist incidents. Moreover, in re-
cent years at least, no regional states have been active
in encouraging such tactics. Nonetheless, the principal
terrorism-prone groups that have surfaced in the area--the
Japanese Red Army (JRA) and Iran's two leading entries,
the People's Strugglers and the Marxist People's Sacri-
fice Guerrillas--have all received governmental assistance.
Most of this aid has come from extraregional powers, but
in the case of the JRA, some support has been furnished
by at least one Asian country (North Korea) as well. In
addition, various Asian governments have lent support to
Philippine Muslim insurgent groups--principally the Moro
National Liberation Front (MNLF)--that have been engaged
in a relatively bloody struggle against the Marcos regime
since 1972. And while the arena of conflict has been
confined to Philippine territory, insurgents allegedly
associated with the MNLF (but quite possibly acting on
their own initiative) have been responsible for a few
cases of international terrorism.
North Korea's contacts with terrorist
groups--which began sometime in the late
1960s--have been relatively extensive.
Even so, the main thrust of North Korean
covert support has been directed toward
aiding more or less conventional
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revolutionary organizations, and for the
past five years, at least, it would appear
that the promotion of terrorist violence
has been no more than an unintended byproduct
of this campaign.
For both pragmatic and ideological reasons,
China provides support to various "pro-
gressive" forces throughout the world.
Some organizations (particularly certain
Palestinian groups) that receive Chinese
support have used terrorist tactics.
China has stated publicly and privately,
however, that it does not subscribe to
such acts.
For fairly obvious reasons, the area comprised by the
USSR and Eastern Europe has not been an active arena for
international terrorism. No government in the region
publicly condones such activity per se. But all have
lent diplomatic and propaganda support to selected (and
sometimes terrorism-prone) revolutionary movements. And
in varying degrees, most have aided practicing or potential
terrorists in more tangible ways as well.
-- The USSR has long publicly opposed political
terrorism as an instrument of international
revolutionary activity. For both political
and ideological reasons, however, the Soviets
support what they regard as legitimate
national liberation movements even though
they realize that some of the aid--including
arms--given to such organizations may be
diverted to terrorist groups. As a prac-
tical matter, they have also found it diffi-
cult to oppose any group whose cause is
favored by the "progressive" or "revolu-
tionary" forces they seek to court. The
available evidence thus suggests an ambig-
uous pattern of contact and involvement with
some political organizations that practice
international terrorism and, more clearly,
with some states that condone or encourage
such activity. The Soviets clearly find
these relationships to be politically expe-
dient, but there is no evidence that they
themselves have instigated, encouraged, or
carried out acts of international terrorism
in recent years.
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Similarly, there is no evidence that East
Germany has directed or encouraged any
international terrorist operations. But
like the USSR, it has provided broad support
to left-leaning national liberation organ-
izations with terrorist affiliates. The
Palestine Liberation Organization (PLO) has
for some time been the principal beneficiary
of this policy. The radical and terrorism-
prone PFLP, nominally a member of the PLO,
has received separate and more modest assis-
tance from East Germany. And fragmentary
evidence suggests that East Germany may have
provided limited support to other terrorist
groups as well.
Yugoslavia's record with respect to interna-
tional terrorism is inconsistent. Belgrade
has signed and ratified two international
antiterrorism conventions, and it frequently
condemns terrorism in its public media.
Behind the scenes, however, the Tito regime
has occasionally permitted practicing inter-
national terrorists to transit or visit Yugo
slavia without interference. It also con-
tinues to provide limited material support
to Arab groups that it has reason to believe
are likely to filter some of this aid to
terrorists.
Conclusions and Implications
It is evident that for various reasons there is little
positive correlation outside of the Middle East - North
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African arena between the overall level of international
terrorist activity in a given area and the number of local
governments that furnish tangible assistance to practicing
or potential terrorists in that region. Briefly put, in-
dustrialized or semi-industrialized countries ruled by
democratic or relatively lax (or ineffective) authoritarian
regimes are likely arenas for international terrorism.
Tautly run authoritarian societies and economically back-
ward areas are not. In contrast, the record suggests that
patron state activity is a form of behavior that is far
more congenial to authoritarian regimes, however ineffec-
tive, than to democratic governments. Moreover, it is
not so clearly linked to levels of economic development,
even though its least inhibited practitioners have tended
to be countries that are somewhat isolated from the main-
stream of economic and political affairs at both the re-
gional and global level.
The factors that may combine to foster or inhibit
patron state activity at any given time or place are
numerous and complex. Some of those that have most com-
monly acted to encourage such activity are basically instinc-
tive in nature, e.g., the natural inclinations of individ-
ual leaders; widely shared revolutionary or nationalistic
zeal; or ideological, religious, or ethnic affinity. But
in most cases, the force of these factors has been either
bolstered or tempered to a significant degree by such
thoroughly pragmatic considerations as:
-- The need to establish or strengthen "revo-
lutionary" or religious credentials in
order to gain greater regional or global
influence.
The possibility that aid to selected insur-
gent groups could serve as a needed "quid"
for obtaining foreign financial, diplomatic,
or military support for specific national
programs or objectives.
Conversely, the possibility that the denial
of such aid could result in even more
valuable support from a different set of
nations.
-- In broader terms, the seeming availability or
unavailability of satisfactory alternative
courses of action to advance given regime
objectives.
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It would appear, in fact, that with few exceptions
the behavior of those countries that could be classified
as patron states has tended to be subject to relatively
continuous--if sometimes unsophisticated--cost-benefit
calculations. Furthermore, throughout most of the past
decade, a generally permissive international environment
has reduced the element of risk that must be allowed for
in these calculations. The factors which have shaped
this environment are both numerous and likely to persist
for some time to come. They include:
The continuing controversy over "illegal"
versus "justifiable" political violence.
The challenge raised to the postwar political
and economic order by developing nations,
"maverick" Communist regimes, various dis-
satisfied second-rank powers, and a broad
array of social forces fired, with differing
degrees of responsibility, by a new sense
of "social conscience."
Pragmatic calculations of self-interest (in-
cluding fear of retribution) that not only
reduce the likelihood of punitive unilateral
response, but also impede the development of
broadly based international countermeasures
and restraints.
Although the force of these factors has been blunted
to some degree by recent developments--most notably the
shifts in the behavior of PLO and non-Palestinian Arab
moderates that have grown out of peacemaking efforts
in the Middle East, and the international reaction to
the latest series of ultraradical terrorist spectaculars--
the resultant change in the global climate remains fragile
at best. Barring a complete collapse of efforts to achieve
a negotiated Arab-Israeli settlement, this tenuous state
of affairs does not necessarily imply that the problem
of state support to practicing or potential terrorists
is likely to become much more acute in the decade
ahead. But it does suggest that unless cautiously
and selectively applied, forceful pressures to speed up
the current trend toward curbing such support could prompt
some tentative converts to back away and revert to their
earlier practices. Moreover, the ability of the US to
exert direct influence on the behavior of most countries
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that currently engage in patron state activity is likely
to remain limited. In some cases, there are relatively
few existing bilateral ties and dependencies that could
be effectively exploited for leverage. In others, ener-
getic action to curb patronage of violence-prone groups
would risk serious damage to broader US foreign policy
interests. And in almost all cases, any efforts to
embarrass the state concerned into moderating its
behavior through public disclosure of its activities
would, if the charges were to be credible, involve hard
decisions concerning the risk of compromise of sensitive
sources and methods.
Under these circumstances, it bears emphasis that some
of the general trends that militate against active govern-
mental involvement with terrorism-prone groups offer the
possibility of bringing about a further decline in such
activity through more subtle tactics. One of the most tell-
ing of these trends is concern for the improvement of ties
with OECD countries or moderate LDC regimes. Such concern
was apparently the determining factor behind Malaysia's
recent action in reducing its support to the Moro National
Liberation Front in the Philippines, and it also clearly
played an important role in President Siad's decision
to permit West German commandos to stage their dramatic
rescue operation in Mogadiscio.* Similarly, there is
some evidence--most notably in the cases of Cuba and North
Korea--that increasing diplomatic and economic integration
into the world community of LDCs that champion the rev-
olutionary causes tends to create constraints on their
support to terrorists. In short, such trends can be
nourished by low key, even indirect, actions on the part
of the US and other countries interested in curbing
terrorism. And this can be dome with minimum risk of
rousing the contentious political issue of support for
revolutionary groups.
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The Somalis' discomfort over a terrorist operation on
their soil and their eagerness to see it brought to an
end as quickly as possible also inclined them to sanction
the rescue operation. Nonetheless, President Siad's
decision was reportedly heavily influenced by Saudi
Arabian advice. South Yemen's efforts to prevent the
hijacked West German airliner from landing or remaining
on its territory may also have been motivated in part
by an appreciation of Riyadh's sensitivities. Aden has
been a recipient of Saudi aid since 1976.
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Political Implications of the West German Response to
Terrorism
In the past two months the governments of Japan and
West Germany have been beset by incidents in which hos-
tages have been seized by terrorists to force the re-
lease of incarcerated comrades and to secure the payment
of a substantial ransom.
This article discusses the SchGeyer k2anapi-ng ana Lurthansa
hijacking and assesses the consequences that the shrink-
ing of terrorist safe havens as well as the improvement
in security precautions and reaction teams will have upon
terrorist perceptions and operational environments.
The Bargaining Strategy
West Germany's strategy for dealing with hostage
incidents has developed from a long series of experiences
with domestic and international terrorism, of which the most
traumatic was the 1972 Olympic Games attack. When con-
fronted with a hostage situation in the early 1970s, the
West Germans tended to give in to terrorist demands with
little delay. But increasing public dissatisfaction with
a policy viewed as "soft on terrorism," as well as exam-
ples by other Western nations of the benefits of not
capitulating, have gradually led the West Germans to a
policy of rejecting terrorist demands.**
"In recent years, West Germany has consistently employed
a no-concessions policy, save for a brief interruption due
to the unique circumstances of the 1975 kidnaping of Peter
Lorenz, chairman of the West Berlin Christian Democratic
Union, and at that time its candidate for mayor of Berlin.
A few days before the mayoral elections, the Second of June
Movement demanded the release of imprisoned comrades, a
plane for their use, and a former mayor of West Berlin as
hostage. The government, faced with the embarrassing sit-
uation of bargaining for the release of the opposition
party's candidate for mayor, gave in to the demands and
flew the prisoners to South Yemen.
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This policy was most recently tested with the 5
September 1977 kidnaping of prominent industrialist Hans-
Martin Schleyer by members of the Red Army faction, who
demanded the release of 11 jailed extremists, the payment
of a $650,000 ransom, and a plane to fly the freed pris-
oners to a country of their choice.
A crisis committee composed of government officials
and opposition party members decided to do all in its
power to drag out the negotiations with the abductors to
buy time for police to locate and rescue Schleyer. The
authorities were aware of the psychological theory that
stringing out the incident allows bonds to form between
the captors and hostages, which increases the chances
for the latters' survival.
In their attempt to delay the abductors' timetable
and to frustrate their ultimate purpose, the West Germans
initiated bilateral negotiations with various countries
likely to be chosen by the imprisoned terrorists as a
final destination. These contacts were reinforced by
Parliamentary State Secretary Hans-Juergen Wischnewski's
whirlwind tour of several capitals immediately thereafter.
The intent of such diplomatic maneuvering was to appear
to be seeking an appropriate safe haven while actually
ensuring that no safe haven would be publicly offered
unless and until the West Germans felt it absolutely
necessary.*
The pressure on the West German Government to cap-
itulate increased tremendously, however, with the 13
October hijacking of a Lufthansa B-737 flying out of
Mallorca, Spain, with 82 passengers and five crewmen,
many of whom were non-Germans. The terrorists claimed
membership in the previously unknown Organization of
Struggle Against World Imperialism and stated that they
were acting in concert with Schleyer's kidnapers. In
addition to the release of the 11 Baader-Meinhof prisoners,
the four hijackers called for the release from Turkish
jails of two PFLP terrorists responsible for a machine-
gun attack on Istanbul Airport in August 1976, as well
as a $15 million ransom.
*The objectives of this maneuver were largely achieved.
Libya, Iraq, South Yemen, Vietnam, and Syria all expressed
their unwillingness to accept the prisoners if released.
Algeria refused but privately offered to reconsider its
decision if West Germany decided to accede to the kid-
napers' demands to prevent a loss of life.
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In what may have been an attempt to avoid a second
Entebbe, the hijackers kept the plane moving, making
stops in Italy, Cyprus, Bahrain, Dubai, South Yemen, and
finally Somalia.* While in South Yemen, the hijackers
became the first terrorist group to shoot a pilot. This
action strengthened the pressures in West Germany and
other countries for an immediate, forceful response.
Appeals were sent to Somali President Siad Barre from a
number of countries, including the US and Saudi Arabia,
to aid the West Germans in whatever way was necessary.
After the hijackers rejected three Somali offers for
safe passage in return for the release of the hostages,
Siad's discomfort with a terrorist operation on Somali
soil and bewilderment over what to do next increased.
Eager to end the operation quickly and encouraged by the
Saudis, Siad agreed to the West German rescue operation.
During the morning of 18 October, West German commandos
successfully freed the remaining hostages, killing three
of the terrorists and seriously wounding the fourth.
Aftermath
While Chancellor Schmidt was the beneficiary of the
national outpouring of elation and pride, the cooperation
shown by West German political parties during the Schleyer-
Lufthansa crisis has already begun to break down. Al-
though all parties in the West German parliament agreed
to measures to fight terrorism,** Christian Social Union
leader Franz Josef Strauss has publicly criticized what
The reluctance of countries to aid terrorists that had
been manifested in the JAL hijacking and Schleyer kid-
naping continued. During its odyssey, the Lufthansa plane
was refused permission to land in Lebanon, Syria, Kuwait,
Oman, and Iraq. Bahrain and Dubai tried to prevent the
plane's landing. Vietnam, Somalia, and South Yemen,
named by the hijackers as candidates to receive the re-
leased prisoners, rejected such suggestions.
**These include increasing penalties for conspiratorial
crimes, speeding court procedures, and redefinition of the
rights of defendants and their lawyers. Antiterrorist
legislation has been extended to West Berlin as well,
despite Soviet protests. The Federal Constitutional Court
rejected an action brought by Schleyer's son, ruling that
the government's obligation to an individual was outweighed
by its larger responsibility to the collective protection
of all citigens. Despite these legislative and juridical
measures, the West Germans remain sensitive to charges by
the French press of a shift toward authoritarian re-
pression of civil liberties.
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he views as the government's weak-willed handling of the
overall terrorist problem.
The West German political debate has been intensified
by revelations of grossly inadequate security precautions
at Stammheim prison, where three of the Baader-Meinhof
prisoners whose release was demanded were found dead in
their cells hours after the rescue operation. Despite
claims of European leftists that their deaths were en-
gineered by the prison authorities, internationally mon-
itored autopsies confirmed the government statement that
they were suicides. In revenge for the deaths of the
Baader-Meinhof terrorists and their Lufthansa colleagues,
Schleyer was murdered by his kidnapers.
The ensuing furor prompted the resignation of Baden-
Wuerttemberg Justice Minister Traugott Bender, as well
as the director and top security official of the facility.
The resignations of these three Christian Democratic
Union members, whose party has criticized the ruling So-
cial Democrats for not pursuing a hard enough line against
terrorists, has further benefited the Schmidt government,
whose firmness in not giving in to terrorists compared
favorably with the security lapses. Nevertheless, the
public remains divided on the extent to which the crack-
down on terrorists should affect civil rights, and a de-
bate is looming over the imposition of press curbs during
incidents, as well as the monitoring of lawyer-client
conversations.
Implications
Perhaps the most heartening aspect of these incidents
is the evidence they provide of the continued, if fragile,
trend away from state aid to esoteric terrorist forma-
tions.* Somalia's cooperation with the West Germans was
particularly noteworthy as an example of the potentially
constructive effect of interests (e.g., arms acquisition)
deemed more important than the maintenance of revolution-
ary credentials.** This growing reluctance to support
*For an explanation of these behavioral and attitudinal
changes, see "International Terrorism: The Problem of
Patron State Support," in this issue.
**Although Libya, Uganda, and Algeria have criticized his
25:0 decision,
Siad has attempted to fend off criticism by empha-
sizing that Somalia's acquiescence in the West German
operation was motivated by humanitarian concerns.
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terrorist operations has resulted in a diminution of
possible safe havens, a development which in itself should
tend to deter potential hijackers.
The obstacles to the successful consummation of a
hijacking are being further increased by the establishment
of government rescue squads--a trend that was accelerated
by the galvanizing effect of Bonn's forceful action in
contrast to the Japanese capitulation. Press reports in-
dicate that such teams have been formed in Israel, the
UK, the US, France, Canada, Switzerland, Belgium, Denmark,
Italy, the Netherlands, Norway, Austria, Indonesia, Hong
Kong, and Egypt--while the Japanese, for their part, are
forming a unit to combat the Japanese Red Army.
The hijackings have also heightened concern for air-
port security. Faced with a threatened strike by the In-
ternational Federation of Airline Pilots Associations,
the UN General Assembly passed a resolution that condemned
hijacking and called upon nations to improve airport se-
curity and to ratify three existing conventions on air-
line safety. Fundamental obstacles hampering more exten-
sive international cooperation against terrorism remain,
however, especially differences over "justifiable" versus
"illegal" use of violence.
While the less permissive environment will give
pause to potential hijackers, its long-lasting deterrent
effect on terrorist attacks involving hostages cannot be
taken for granted. Terrorists have in the past demonstrated
considerable ability to adapt by shifting to less well
protected targets and devising ways of minimizing risks
entailed in new security measures.*
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Moreover, certain groups may be under heavy pressure
to attempt risky "spectacular" attacks in order to bolster
their morale and reputations. Avenging the latest terror-
ist martyrs will be an added incentive. There already
has been an extensive series of "revenge" bombings in
West German facilities throughout Western Europe. Addi-
tionally, threats of assassination against Chancellor
Schmidt and of destruction of Lufthansa aircraft in
flight have been made. The carrying out of such threats
could serve to erode the trend toward a less permissive
environment, if humanitarian considerations move govern-
ments to reassess their reluctance to grant safe haven
to hijackers.
Perhaps the most troublesome aspect of recent de-
velopments is that government successes and terrorist
failures may jointly set the stage for a major tragedy.
The development of special strike teams, coupled with
the popular expectations that have been fanned by un-
critical acclaim of the Entebbe and Mogadiscio operations
could put extreme pressure on a government to launch a
rescue attempt under tnappropriate circumstances.
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Growing "East-South" Tensions
The various talks associated with the UN Conference
on Trade and Development (UNCTAD) are usually dominated
by LDC demands on the OECD countries. A recent UNCTAD-
sponsored meeting on LDC - East European trade opportuni-
ties highlighted a trend that runs counter to this pattern.
The LDCs levied demands on the Communist countries for
changes in the international economic order. This trend
is likely to increase as a growing number of UNCTAD meet-
ings concentrate on "East-South" issues and as "radical"
LDCs become increasingly willing to attack the East
Europeans directly for their inadequate attention to the
problems of the developing countries.
The LDCs have for some time been making explicit
demands of the countries who are members of the Soviet-
dominated Council for Mutual Economic Assistance (CEMA)
for concessions leading toward the implementation of a
new international economic order (NIE0). The LDCs have
become increasingly vocal in citing their dissatisfaction
with receiving only rhetorical support from the East
European countries. The meeting held last month in Geneva
to review a CEMA program for increasing imports from the
LDCs was one of the first where LDC demands were clearly
focused on the Soviet Union and its East European allies.
As a result, the latter could not follow their normal
practice of giving rhetorical support to LDC demands
while placing the responsibility for LDC problems on the
OECD countries.
The meeting was characterized by a confrontation
between the LDCs and the Communist countries of the sort
once reserved only for the industrial democracies. The
LDCs sought to get commitments on increased bilateral and
multilateral trade flows, but the CEMA countries responded
only in vague generalities. In private comments the
Communist countries said--just as the OECD countries have
often said about other LDC demands--that the UNCTAD meet-
ing was not the appropriate forum for the discussion of
LDC demands.
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The Soviet Union has long officially asserted that
the lack of development in the Third World is a product
of colonialism and exploitation by multinational corpora-
tions and that consequently the Soviet Union is not re-
sponsible for correcting past injustices. This view,
by and large, has been rejected by almost every develop-
ing country.*
Resorting to tactical schemes to avoid discussion
of the issues raised by the LDCs, the Soviet Union and
its East European allies sought to rewrite each of the
paragraphs of the final conference paper and to delete
portions of the resolution that would have given future
guidance on this issue to the UNCTAD secretariat. The
LDCs rejected this course, putting their own unilateral
declaration on the record and harshly criticizing the
Polish rapporteur for inadequately reflecting LDC points
of view in his record of the meeting.
The key to LDC success in frustrating the Communist
countries' tactics was--as it has been in confrontations
with the Western countries--a strong sense of group
solidarity and the able leadership of one or two key
participants. In this case the representatives from
Jamaica and Guyana led the attack on the Soviet Union
and its East European partners. Both of these countries
are radicals on North-South issues with generally good
relations with the Communist countries. Their leadership
in criticizing the Communists at the recent UNCTAD meeting
suggests that in the future the Group of 77 may be in-
creasingly demanding of these countries.
Thus, at a time when the OECD states are actively
engaged in serious negotiations with the LDCs, the latter
may be increasing their criticism in UN meetings of the
Soviet Union and its allies for failing to go even as
far as the Western countries in negotiating their demands.
The next "East-South" confrontation may come as soon as
the end of November when an UNCTAD meeting on a multi-
lateral system of payments between the Communist countries
of Eastern Europe and the developing countries is sched-
25:0 uled.
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LDC Views on the Common Fund*
The developed and developing countries entered the
second round of UNCTAD common fund negotiations in
Geneva (7 November - 2 December) with very different
proposals. The position of the Group of 77 (the LDC
caucus) continues to be a mosaic designed to meet di-
verse national needs (see the following article). It
reflects the extensive logrolling required to achieve
consensus among some 115 LDCs. In contrast, the de-
veloped countries' common fund proposal is more sharply
defined and technically specific. This proposal tackles
commodity price instability but does not address other
major issues in the LDC proposals.
Agreement on a specific package at the meetings
is highly unlikely; the two sides may simply talk past
each other. We cannot rule out the possibility of
confrontation and a breakdown of negotiations even though
the current LDC leadership is under considerable pres-
sure to show progress.
LDC Perspective
LDC proposals on international support for commodity
prices date back at least to the 1955 Bandung Conference.
This meeting, which spawned the Nonaligned Movement,
drew together Asian and African leaders in a call for
international action to stabilize both prices and demand
for primary commodities through bilateral and multilat-
eral arrangements. This issue has been pursued over the
years with varying interest and embellished from time to
time with specious arguments about secularly declining
terms of trade for LDCs and the need for commodity price
indexation.
For the last several years, the common fund has been
the keystone of LDC demands for change in the "rules" of
international commodity trade. The G-77 believes such a
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fund could bolster LDC commodity export prices and en-
hance prospects for additional international commodity
agreements. Moreover, it would meet its demands for
greater political control of the international economy.
Widespread support for the common fund among the LDCs
makes this issue a touchstone of industrial country re-
sponse to Third World concerns. Accordingly, the London
summit statement in May 1977 that there should be a
common fund and the subsequent agreement on this propo-
sition with the developing countries at the CIEC minis-
terial meeting in June were viewed by the LDCs as steps
in the right direction. They were not, however, con-
sidered very big steps.
LDC Proposals
A G-77 draft position paper on a common
asseffibled by a working group and sent to the
vidual countries for review over the summer.
bersome process resulted in a document that,
vagueness on key technical aspects, is quite
certain long-held G-77 views. The paper calls for the
creation of a common fund that:
fund was
115 indi-
This cum-
for all its
clear on
-- Stands as an independent financial institution.
-- Finances buffer stocks under existing interna-
tional commodity agreements and encourages
new agreements (the so-called first window).
Finances resource-development projects and
other measures for the LDCs that are related
to commodities (the second window).
-- Is controlled through voting formulas that
guarantee an LDC share of at least 51 percent.
Despite attempts to create an image of LDC unity
behind the G-77 proposals, the 115 LDCs have differing
views about which facets of the draft proposals are im-
portant. In any event, five elements seem to be cen-
tral to LDC behavior in the negotiations--political
power, LDC unity, independent financing of the fund,
price stabilization, and the second window. LDC reac-
tion to the developed country proposals will largely de-
pend on how individual countries line up on these ele-
ments and how they choose to act within G-77 caucuses
in responding to developed country proposals.
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Political Power. From its inception, the common
fund has been viewed by many LDCs as a political issue--
part of the struggle for control of international insti-
tutions. For those LDCs that exercise leadership in the
Third World--Venezuela, Indonesia, Algeria, Yugoslavia,
and Nigeria, for example--establishment of the common
fund is an important symbol of an increased global role
for the Third World, irrespective of whether the fund
makes economic sense or specifically aids them.
LDC Unity. A strong predisposition exists within
the G-77 not to jeopardize group unity, which is viewed
as having political value transcending the negotiation
of issues. Indeed, some LDCs--Brazil is a good example--
have been known to tacitly support G-77 arguments inimi-
cal to their own interests so long as they felt they
could rely on the US and other developed countries to
reject the group position. Key G-77 members such as
India, Brazil, Venezuela, Mexico, and Yugoslavia are
adept at pushing their own interests in meetings; once
a compromise is reached, however, even they consider it
prudent either to support agreed positions or to be
quiet. The wide adherence to group unity poses a major
problem for developed country negotiators in Geneva. It
compounds the difficulty of dealing with the single rep-
resentative who speaks for the LDCs at plenary sessions
and means that getting G-77 agreement to changes is dif-
ficult and time-consuming. The requirement for group
unity also inhibits LDCs sympathetic to the industrial
countries' proposals from speaking out in their various
closed caucuses.
Independent Financing. The LDC position paper
calls for prior independent financing of the common fund
through government contributions as opposed to funding
from the resources of individual international commodity
agreements. The LDCs take this position because:
Resources in an independent common fund could
be used to spur the establishment of new in-
ternational commodity agreements; producers
and consumers of a commodity would not have
to agree on respective shares of buffer stock
financing.
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Independent funding could allow the common
fund to finance projects such as commodity
export diversification in individual coun-
tries through a second window (see below).
An independently financed common fund could
be controlled by LDCs (assuming developed
country acquiescence on voting rights),
thereby fulfilling the LDC desire for at
least one international institution of
their own.
Many Third World countries probably hope that
an independent common fund run by the LDCs
will somehow be able to jack up their export
prices.
Because the independent financing concept is a
means to several objectives, most LDCs support it. Nota-
ble exceptions are certain Latin American and Middle
Eastern countries--Brazil, Argentina, Saudi Arabia, and
Iran--that feel they stand to lose more than they would
gain from a common fund.
Price Stabilization. Commodity price stabilization--
at the heart of any common fund design--draws support
from the great majority of LDCs. Some advocates from
developing and developed countries have argued that price
stabilization yields net benefits to both producers and
consumers. This argument is particularly attractive to
the many LDCs that rely heavily on commodity exports to
support national development projects and maintain do-
mestic incomes; this is especially so with countries
that have experienced roller-coaster changes in their
commodity export prices in the recent past. These LDCs
view price stabilization as an effort to reduce the un-
certainty of future earnings, even when they realize
that it might reduce total earnings over the long term.
Thus, such comparative moderates in the North-South dia-
logue as Thailand, Malaysia, Indonesia, the Philippines,
and Zaire support the stabilization feature of the com-
mon fund argument. Most other activists on this point
are only interested in "stabilization" insofar as it
opens the door to steadily higher prices.
Second Window. From the beginning, LDC proposals
for a common fund have included provisos that the fund
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should be able to take measures in addition to price
stabilization to help alleviate commodity problems.
This objective is embodied in the second window propo-
sals. Several African and South Asian countries believe
it unlikely that the commodities they export will be
involved in agreements with international buffer stocks.
Accordingly, these countries want to ensure that, if a
common fund is created with independent financing, they
will get their slice of the pie. They want the second
window to be able to finance--among other things--export
diversification, infrastructure improvements, market
promotion, research and development, and compensatory
finance. In short, they want a second window that one
UNCTAD official privately. labeled "a bottomless pit."
Developed Country Views
The developed countries--despite differences of
opinion over how far they should go to meet LDC demands--
agree that a common fund should be built around the
pooling of financial resources of individual interna-
tional commodity agreements. This pooling proposal
meets some LDC desires for commodity price stabilization
by:
Encouraging the establishment of buffer stocks
under existing commodity agreements.
Drawing on the expertise in the commodity
groups to estimate financial requirements
from the fund.
-- Taking advantage of savings that could occur
when the peak needs of each commodity do
not coincide.
At the same time, the pooling proposal meets developed
country concerns by:
-- Strictly limiting the amount of financial
support that an individual commodity agree-
ment could receive.
-- Allowing each commodity agreement to operate
independently.
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Prospects
There is no developed country proposal that would
be acceptable to all members of the G-77. Indeed, even
complete acceptance of the G-77 position would not be
viewed by many LDCs as a wholly favorable turn of events
because of individual differences on what is important
in their collective position.
In any event, the proposals of the developed coun-
tries at the November negotiations will elicit a varied
LDC response:
Serious inquiry and perhaps even encouragement
by LDCs such as Malaysia, Indonesia, the
Philippines, and Zaire that place a high
priority on price stabilization.
Expressions of disapproval from African and
South Asian LDCs, particularly India and
Pakistan, that want the second window.
Relief from those Latin American and Middle
Eastern countries that are wary about the
effect of LDC proposals on the international
economy and their own financial positions.
An ambivalent reaction from countries that
seek an increased global role for the Third
World: moderates may play up the responsive-
ness of the developed countries' proposal;
radicals probably will lambaste the developed
countries for a lack of political will, an
insensitivity to LDC needs, and a refusal
to live up to earlier pledges.
Future Developments
The G-77 is unlikely to be enthusiastic about de-
veloped countries' proposals on the common fund because
they are likely to remain far short of LDC demands for
independent financing, the second window, and assured
LDC control of the new institution. The real question
is whether the moderates in the G-77, particularly
those who favor price stabilization measures, can wield
enough influence in the G-77 over the next several
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months to gain acceptance of the developed country pro-
posals in future negotiations. They will be hobbled in
this by the complications of dealing in three regional
LDC caucuses and through the single designated LDC
spokesman. In any event, common fund discussions are
likely to be a continuing source of tension both within
the G-77 and between North and South.
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LDC Positions on Key Common Fund Issues
The accompanying matrix of LDC positions on the
creation of a common fund is intended as an up-to-date
reference on this issue and on factors in Group of 77
decisionmaking generally.* The matrix was prepared to
serve as background for the current negotiations, but
the identified positions draw on a longer history and
will bear on related discussions during the rest of
1977 and 1978.
The 26 countries covered are prime actors in the
G-77. They play major roles in G-77 caucuses and in
informal discussions between the 0-77 and the developed
(or "Group B") countries. In addition to identifying
LDC differences on the common fund, the matrix describes
important factors affecting how individual countries
will respond to the use of 0-77 or Group B proposals as
the basis for future discussions.
In the hope of maintaining the best current state-
ment of country positions in the continuing debate, we
invite comments and suggestions from readers of this
25:0 monthly.
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The matrix was jointly prepared by the Office of
Economic Researr.h and *hp Offioe of Reaional and Politi-
cal Analysis.
See the preceding
article for explanations of terminology.
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LDC Positions on Key Common Fund Issues
Country
Price Stabilization
Independent Funding
Second Window
Comments
Latin America
Argentina
Has not expressed a great
Does not actively support
No interest.
Argentina is not an ardent
deal of interest.
LDC position and agrees
with the US that fund cre-
ation should proceed in par-
allel with individual corn-
modity agreements.
supporter of the common
fund concept. Reportedly
has taken an unyielding
stance against portions of
the G-77 draft position
paper.
Brazil
Has accepted buffer stocks
Publicly supports the G-77
No interest.
Works hard in LDC forums
in the new International Su-
position, privately shows lit-
to maintain its image as a
gar Agreement. Approves of
a recent Mexican proposal to
establish a coffee stabiliza-
tion fund based on buffer
stocks under the Internation-
al Coffee Agreement.
tie enthusiasm.
Third World country. Uses
its role to mold issues to
meet its own needs. Supports
LDC initiatives on a corn-
mon fund but has not taken
actions that might spur its
creation. Has expressed res-
ervations about the G-77
draft position paper.
Chile
Probably would favor stabi-
lization of copper prices
through a producer-consum-
er buffer stock arrangement;
almost certainly would not
want the common fund to
interfere with the operation
of a copper agreement.
Not an active supporter.
No interest.
In the past, spoke against the
common fund during inter-
nal Latin American group
meetings, but recent efforts
indicate Chile is moving to-
ward greater receptivity to
the LDC position.
Colombia
Wants to reword the G-77
Not likely to make a finan-
No interest.
'ropo .. a ternative Ian-
draft position paper to make
cial commitment to corn-
guage for key parts of the G-
buffer stocks and price stabi-
mon fund. Has expressed
77 draft position paper. Like
lization the fund's primary
objective. Would go along
with other coffee producers
in establishing buffer stocks
under the International Cof-
fee Agreement. Would not
want the common fund to
interfere with the working
of this agreement. '
opposition to the common
fund,
several developed countries,
it stated reservations on the
commodity resolution ac-
cepted in UNCTAD IV
(Nairobi, 1976).
Cuba
Has accepted, although not
Has spoken against the corn-
Position unknown.
Will need to stay in the fore-
enthusiastically, buffer
mon fund in internal Latin
front of North-South issues
stocks under the new Inter-
American debates. May be
as the 1979 Non-Aligned
national Sugar Agreement.
trying to curry favor with
other Latin American oppo-
nents of the common fund.
Summit in Havana
approaches.
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Country
Price Stabilization
Independent Funding
Second Window
Comments
Latin America (Continued)
Jamaica
Overriding concern is baux-
Active supporter of LDC
Likely to support the
Jamaican Chief of Delegit-
ite and sugar exports. Has
position on the common
African stance that
tion (Amb. Walker) is Presi-
favored minimum pricing
agreements rather than
fund,
insists on a second
window.
dent of negotiating confer-
ence. North-South politic:
buffer stocks in discussions
among members of the hi-
ternational Bauxite Associ-
ation, a producers' group.
are central to Jamaica's for
eign policy.
Probably would agree with
sugar price stabilization ef-
forts contained in the new
International Sugar Agree-
ment.
Mexico
Has proposed buffer stocks
In the past, has actively sup-
Probably not inter-
Expressed reservations about
for coffee under a price sta-
ported the common fund
ested but unlikely to
the G-77 draft position
bilization fund now being
within the G-77. Differences
withhold support be-
paper.
considered for inclusion in
of opinion within the goy-
cause poorer LDCs
the Internatonal Coffee
Agreement.
ernment may result in a
reassessment.
like the idea.
Peru
Would like stabilization at
Active supporter of the com-
Believes the common
Strives to maintain its Third
higher prices for its exports;
particularly copper and su-
mon fund,
fund should have a
second window to fi-
World credentials. Current-
ly working to shift from
gar. Favors a copper agree-
ment based on buffer stocks;
willing to accept supply con-
trols if necessary.
nance measures out-
side international
commodity agree-
ments.
"left" to "center" position.
Venezuela
Supports concept as part of
Active supporter of common
Likely to support it to
An LDC leader in demands
building "new international
fund. Has advocated a sig-
the extent that it can
for "new international eco-
economic order". Oil pro-
vides 94% of export earn-
ings. Little intrinsic econom-
ic interest in other corn-
modities.
nificant OPEC contribution,
be seen in a favorable
light by poorer LDCs.
nomic order". Support for
LDC demands combined
with close US relations could
cause Venezuela to try to
play moderating role.
Africa
Algeria
Not involved in individual
Supports concept as part of
Apparently joined in
Pioneer in stressing need for
commodity negotiations; oil
building a "new internation-
consensus at African
changes in international eco-
accounts for about 90% of
al economic order" and
regional meeting
nomic order. Zeal has de-
exports.
strengthening LDC corn-
(Oct 6-8) to support
dined over time; will prob-
modity producers,
second window and
expand its functions,
ably remain a leading
advocate of increased LDC
role in commodity markets.
Egypt
Position unknown.
Follows G-77 consensus
Probably will join Af-
Not especially interested iri
without actively supporting.
ricans and South
common fund.
Asians in pushing this
concept.
Ghana
Supports this feature. Cocoa
Unlikely to differ from G-77
Probably supports
Has shown more interest in
is two-thirds of total exports.
position due to concern for
African position in
the November negotiations
The current International
group unity.
favor of second
than the March 1977
Cocoa Agreement has provi-
sions and cash for establish-
ing buffer stocks. Ghana re-
portedly is examining ways
to relate the existing cocoa
agreement to resources that
could be available to the
common fund.
window,
sessions.
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Country
Price Stabilization
Independent Funding
Second Window
Comments
Africa (Continued)
Ivory Coast
Would want to insure that
Has not been an active
Likely to acquiesce
Not an active participant in
agreements do not adversely
affect its export prospects.
Agreements for its four ma-
jor exports?cocoa, coffee,
tropical timber, and vegeta-
ble oil?are all being consid-
ered under UNCTAD aus-
pices. Iron ore, which is
slated for future develop-
ment, is also under
discussion.
supporter.
to African demands.
North-South affairs. Key in-
terest is sustaining phenom-
enal 6 1,/2% economic
growth rate of past 15 years.
Kenya
Major export?coffee?is al-
Pledged -at least" $1 million
Probably supports
Has been interested in in-
ready covered by interna-
to the common fund in
African demands.
creased LDC control over
tional agreement (without
buffer stocks). Probably sup-
ports the Mexican proposal
for coffee buffer stocks.
1976.
commodity markets. Not an
LDC leader on North-South
issues.
Nigeria
Has little interest, since oil
Committed to G-77 goals.
Likely to push Afri-
OPEC member; wants to
accounts for 95% of exports.
can demands,
build regional role by sup-
porting Third World posi-
tions. Has recently tended to
more moderate positions.
Zaire
Key concern is copper earn-
Little concern.
Probably backs Afri-
Domestic politics and cop-
ings?about two-thirds of to-
tal exports. Favors an agree-
ment to stabilize prices
through buffer stocks.
can position.
per far exceed other issues in
importance.
Zambia
Copper exports account for
Supports common fund
Probably backs Afri-
Supports "moderate" tactics
over 90% of total exports;
probably favors an agree-
ment to stabilize prices.
concept.
can position.
in North-South dialogue.
Near East
Iran
Oil accounts for 97% of ex-
Iran has indicated that its
No interest.
Iran enjoys pressing the de-
port earnings. Perhaps be-
contribution would be
veloped countries to do more
cause of years in OPEC, it
has expressed view that pro-
through OPEC Special Fund,
a polite way of indicating
to help the LDCs. While the
LDC version of the common
ducers and consumers will
have great difficulty reach-
ing agreements for buffer
stocks and price stabili-
zation.
that it is not enthusiastic.
fund would probably cost
Iran money, the political
price of opposing the LDC
initiative is probably consid-
ered higher.
Saudi Arabia
Oil provides for over 95% of
Passively endorses G-77
No interest.
Wary of G-77 schemes that
export earnings; little inter-
est in other commodities.
consensus.
ultimately may require
Saudi financial support.
Would be concerned about
higher prices for imports.
South Asia
India
Does not believe stabiliza-
Pledged $25 million to corn-
A major proponent of
India is a key proponent of
tion agreements are likely
for tea or jute. Has argued
that proposed sugar agree-
ment, with provisions for
buffer stocks, be designed to
mesh with common fund,
mon fund in 1976.
second window,
Takes credit for in-
elusion in G-77 posi-
tion. Is willing to ac-
cept limitations as
part of price of sec-
ond window.
second window.
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Country
Price Stabilization
Independent Funding
Second Window
Comments
South Asia /Continued)
Pakistan
Probably little interest be-
Supports G-77 position.
Endorses second win-
Supports idea of a common
cause cotton and its products
dow; particularly be-
fund but does not believe it
are only major Pakistani ex-
lieves LDC importers
is most important North-
port involved in commodi-
should be compensat-
South issue. Domestic politi-
ties discussions. Cotton is noted
likely to be involved in in-
ternational buffer stock
for any higher
prices due to buffer
cal problems are likely to
dictate low profile.
arrangement.
stock purchases.
Sri Lanka
Views a tea agreement that
Supports concept as central
Probably supports
While not expecting great
includes buffer stocking as
to LDC proposals.
concept to stay in
benefits, views common
unlikely; believes a rubber
agreement will be estab-
lished with or without corn-
mon fund.
step with South Asian
neighbors.
fund as necessary first step
in establishing "new interna-
tional economic order". Ar-
gues that LDC losers from
LDC version of common
fund will ultimately gain
from momentum generated
toward achieving a new or-
der. New government may
react more from reflex than
conviction.
South East Asia
Indonesia
Desires price stabilization
Pledged $25 million to corn-
Interested only to the
Actively supports this Third
agreements. Is working in
mon fund in 1976. Views
extent that other
World Initiative. Indonesia's
concert with neighbors to
reach producer-consumer
rubber agreement.
fund as key North-South is-
sue with progress necessary
to avoid polemic confronta-
Hons. Strongly supports prior
financing,
LDCs are interested.
Ambassador to Geneva
(Amb. Alatas) chaired the
Group of 33 effort to formu-
late G-77 draft agreement
and is a key LDC
representative.
Malaysia
Great deal of interest in
price stabilization. Four ma-
jor exports?rubber, tin,
vegetable oil, and tropical
timber?account for about
two-thirds of total exports
and are the subject of specif-
ic commodity discussions.
Supports it to extent it will
lead to price stabilization
agreement.
Not interested.
A leading moderate on
North-South issues and a
leading proponent of pro-
ducer-consumer agreements
for rubber and tin.
Philippines
Four commodities under
Pledged $20 million to the
Not interested, but
As part of foreign policy to
consideration for corn-
modity agreements?sugar,
copper, vegetable oils, and
tropical timber?amount to
about two-thirds of total ex-
ports. The Philippines would
like stabilization agreements
for these commodities. Has
already supported the new
common fund in 1976.
follows G-77 consen-
sus.
associate itself with Third
World, the Philippines is
likely to stick closely to LDC
position. Hosting of
UNCTAD V in 1979 could
force Philippines to follow
issues more closely.
International Sugar Agree-
ment with its provisions for
buffer stocks.
Europe
Yugoslavia
Supports in principle. Corn-
Pledged $30 million to corn-
No direct interest;
Yugoslavia actively supports
modities in UNCTAD pro-
mon fund in 1976 and con-
but probably will
LDC (and particularly
gram are not major exports.
tinues to actively support
press developed
OPEC) demands as part of
LDC version of same,
countries on this
issue.
campaign to maintain Third
World leadership role and to
secure, if possible, conces-
sionary oil purchases from
OPEC members.
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African Attitudes Toward Nigeria
The emergence of regional "second order" powers
among the developing countries has been an increasingly
prominent theme in world politics. As a part of its re-
search program, the International Issues Division has
proposed an analytical framework for studying this trend
and has explored its implications for US foreign policy
interests in various regional and issue contexts.* Adopt-
ing a somewhat different perspective, the following ar-
ticle by ORPA's African Division examines the role and
influence of an important second order power, Nigeria,
as perceived by its regional neighbors.
During the last several months, Nigeria has made a
concerted effort to play the predominant leadership role
in African affairs and to let its voice be heard as the
voice of Africa. African attitudes are ambivalent toward
Nigeria, but most states concede that the country's com-
parative economic and military might allow it to claim
an important role in African and world affairs. There
is, however, no clear mandate among the African states
to allow Nigeria to act as Africa's leader.
While no other state can really compete with Nigeria,
the various groupings and alignments of African states
will affect the ultimate role that Nigeria will play and
will determine to what extent Nigeria will be allowed to
speak for Africa. African states are jealous guardians
of their individual sovereignty and will not allow Ni-
geria to be their spokesman on issues of direct concern
to them. Many prefer that the Organization of African
Unity (OAU) should play the leading role in presenting
Africa's view. The rise of Nigeria as an African "super-
power" would not be welcomed by the African states. They
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are suspicious of Nigeria's aspirations on the continent
and will also be concerned with the amount of attention
that Nigeria receives from the US.
Nigeria's Head of State, General Obasanjo, is gen-
erally well regarded by the Africans. He made a favorable
impression at the antiapartheid conference which Nigeria
hosted earlier this year and gave the impression of being
a responsible leader at the OAU Summit in July. Obasanjo
is currently serving as one of the OAU Vice Presidents,
and Nigeria holds the chairmanship of that organization's
Mediation Committee. Unlike Presidents Nyerere of Tan-
zania and Kaunda of Zambia, however, Obasanjo is not one
of Africa's respected elder statesmen. Nor does he pos-
sess, like Nyerere, solid credentials in Africa's moder-
ate and progressive camps. Nigeria's internal political
and social problems also tarnish the country's image, as
does the fact that it is ruled by a military government.
Recent moves toward the restoration of civilian rule,
however, are viewed as encouraging signs.
Nigeria's West African English-speaking and French-
speaking neighbors have a genuine respect and even fear
of that country's potential. Nigeria has played a lead-
ing role in the creation of the Economic Community of
West African States. Many of that organization's 15 mem-
bers are poverty-stricken ministates and, as such, look
to Nigeria for aid. They have been disappointed, how-
ever, at the modest response from Lagos. African states
in general are also disappointed that Nigeria has refused
to sell oil to them at concessionary rates and intercede
with the Organization of Petroleum Exporting Countries
(OPEC) on their behalf. The strains that accompany re-
lations between large and small and have and have-not
states are apparent in Nigeria's relations with most of
its West African neighbors. Their desire for close re-
lations with Nigeria is also tempered by their fear of
being dominated by their giant neighbor. Jealousy is
also a factor in the equation. For example, although
relations between Nigeria and Ghana are good, Ghanaians
resent the fact that Nigeria has replaced their country
as West Africa's leader. President Tolbert of Liberia
probably sees Nigeria as a threat to his country's close
historical relationship with the US.
The French-speaking African states are particularly
suspicious of Nigeria. Their traditional distrust of
their English-speaking neighbor is exacerbated by the
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belief that the Nigerians are unsophisticated and arro-
gant. The fears of the French-speaking states have been
recently substantiated by Nigeria's success in contesting
the OAU decision to back Niger for one of the African
seats on the UN Security Council. There was concern in
some African quarters that the US may have been encourag-
ing Nigeria's aggressive behavior On this issue. Zaire,
the major French-speaking ?state in Central Africa, views
Nigeria as a rival for African leadership and fears that
it will be displaced by Nigeria as the special friend of
the. US in Africa.
Africa's frontline states are pleased that Nigeria
has decided to take an active concern in problems relat-
ing to the liberation of southern Africa. They are pri-
marily interested in having Nigeria carry more of the
economic ?and military burden of the Rhodesian struggle.
The frontline leaders do not, however, wish to see Lagos
encroach on their leadership roles in southern Africa.
Nigeria's influence in this region will depend more than
anything else on its willingness to increase its military
and economic commitment--one which, in any event, the
frontline Presidents will seek to control.
The North African states have received Nigerian dip-
lomatic support on the Middle East since 1973. Nigeria
is sensitive to any hints of the condescension that the
Arabs have historically shown toward black Africans. The
Arabs believe that Nigeria should, because of its large
Muslim population, more actively champion Arab causes.
The North African states also resent Nigerian criticism
that the Arabs have not extended as much moral support
to the southern Africa liberation struggle as the black
Africans have to the Arab cause in the Middle East. North
Africans are aware of Nigeria's attempts to play a lead-
ing role in African affairs. As a group, however, they
will not look to Nigeria for leadership on African issues,
but will probably continue to follow their diverse tra-
ditional alignments.
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25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/07/03: CIA-RDP79T00912A002300010009-5
Declassified in Part - Sanitized Copy Approved for Release 2012/07/03: CIA-RDP79T00912A002300010009-5
Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/07/03: CIA-RDP79T00912A002300010009-5