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APPROVED FOR RELEASE: 2047102109: CIA-RDP82-00850R400504020036-5 FOR OFFICIAL USE ONLY JPRS t_/ 10267 20 January 1982 Near East/North Africa Report (FOUO 3 / 82) _i Fg~$ FOREIGN BROADCAST INFORMATION SERVICE FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007102109: CIA-RDP82-00850R000500020036-5 NOiE JPRS publications contain information primarily from foreign newspapers, periodicals and books, but 31so from news agency transmissions and broadcasts. Materials from foreign-language sources are translated; those from English-language sources are transcribed or reprinted, with the original phrasing and other characteristics retained. Headlines, editorial reports, and material etXlosed in brackets are supplied by JPRS. Processing ir.dicators such as [Text] or [Excerpt] in the first line af each item, or following the last line of a brief, indicate how the original information was processed. Where no processing inciicator is given, the infor- mation was summarized or extracted. Unfamiliar names rendered phonetically or transliterated are enclosed in parentheses. Words or names preceded by a ques- tion mark and enclosed in parentheses were not clear in the original but have been supplied as appropriate in context. Other unattributed parenthetical notes within the body Qf an item originate with the source. Times within items are as given by source. The contents of this publication in no way represent the poli- cies, views or attitudes of the U.S. Government. COPYRIGHT LAWS AND REGUI.ATIONS GOVERNING OWNERSHIP OF - MATERIALS REPRODUCED HEREIN REQUIRE THAT DISSEMINATION OF THIS PUBLICATION BE RESTRICTED FOR OFFICIAL USE ONI.Y. APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007102109: CIA-RDP82-00850R000500020036-5 FOR OFFICIAL USE ONLY JPRS L/10267 20 January 1982 NEAR EAST/NORTH AFRICA REPORT (FOUO 3/82) CONTENTS INTER-ARAB AFFAIRS FIA Plan To Establish Base in Jordan Revealed (Colin Legum; THE OBSERVEP., 29 Nov 81) 1 " Gu?f Diplariats Comment on Mediation Effort (REUTER, 30 Dec 81) 3 Briefs PFLP Arms Shipment 5 ALGERIA Algerian Economic Situation Reviewed _ (MARCHES TROPICAUX ET NEDITERRANEENS, 4 Dec 81) 6 More Flexibility Seen in Policy on Berber Language, Culture (MARCHES TROPIChUX EET NEDITERRANEENS, 4 Dec 81) . . . . . . . . . . . 23 ~ Fundamentalist Violence, PenaZ Ca]e, Personal Status Law Discussed (TROPICAUX ET MEDITERRANEENS, 4 Dec 81) 26 IRAQ Saddam Husayn Interviewed on Arab Issues (Saddam Husayn Interview; AL-WATAN AL-'ARABI, 6-12 Nov 81).. 29 PEOPLES DEMOCRATIC REPUBLIC OF YEMEN USSR Building Military Base - (REUTER, 20 Dec 81) 52 a NE & A - 121 FOUO] ~ FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02109: CIA-RDP82-00850R400500020036-5 FOR OFFICIAL USE ONLY TUNISIA Elections, Democratic Process in Country Diecussed (JEUNE AFRIQUE, 18 Nov 81) 53 Death of Single-Party System Causes of Anger Truth Little Steps Toward Democracy, by Habib Bqulares - b - FOR OFFIC[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02109: CIA-RDP82-00854R000540020036-5 FOR OFF[CIAL USE ONLY INTER-ARAB AFFAIRS PT-O PLAN TO ESTABLISH BASE IN JORDAN REVEALID. PM301549 London THE OBSER9ER in English 29 Nov 81 p 7 [Report by Colin Legum: "'PLO Plans Foothold in Jorda;L"'] [Text] A document has reached Western capitals purporting to be a secret plan under study by six leaders of the Palestine Liberation.Organization to re- establish a foothold in Jordan from which to carry on the fight against Israel. - The docwnent reached neighbouring countries from Amman. The need f.or a new independent base for m3litary operations has become acute because of Syria's hostility to the PLO leadership, especially Yasir 'Arafat _ and the opposition they are encountering in South Lebanon from the Christian militias, their Israeii allies and ttie Lebanese and Syrian suthorities. WO., Due to the extremely sensitive nature c,x the plan, the document outlining the new strategy is said to have been gival frr study to just the six top lea,ders _ who attended the secret conclave. It is sdid to have leak+ed out desgite extreme precautions. Those attending the meeting were Yasir 'Arafat; his deputy Salah Khalaf (also known as Abu Iyad) ; Abu al-Walid, the head of the PLO's operational wing; Abu al-Hul, the chief of intelligence; Hani al-Hasan, 'Arafat's close confidant; and Faruq Qaddumi, head of the political department. - The purported plan examines at length the 'developments in the Palest3nian _ revolution' since Black September 1970, when the PLO guerrillas were drivPn out _ of Jordan by King Husayn, leaving them o.zly Lebanon as a centre for military operations. After reviewing th e advances achieved in the Arab world and the international community s3nce 1970, the document concludes that no real progress has been made towards fulf illing the PLO's main aim of liberating Palestine. Analysing the reasons for failure,.the purported plan emphasises the 'physical separation' between the area of mil{tary operations in Lebanon and the mair. ~ concentrations of Palestinian popul&,ion in the West Bank and Gaza Strip, 1 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007102/49: CIA-RDP82-40850R040500024036-5 - FOR OFFICIAL USE ONLY T.t attributes responsibility for this separation to 'the Syrian occupying forces,' the Lebanese Christians and their militias, and Israel's military intervention in Lebanon. The document concludes that Jordan is the only place from which it would be possible to reach the Palestinians in the occupied territories and where the PLO would be free from the military pressures of the Syrians and Chr3etian Lebanese. It would also allow close contact with the Palestinians who make up 50 percent of'Jordan's population. The document stresses that their passive support could be converted into active cooperation through a PLO military presence in Jordan. The conclusion reached is that, unless the PLO military presence can be shifted to Jordan, there will be no future for the Palestin3an revolution. What is needed, the document insists, is that the Palestinians should acquire the same rights as they enjoy in Lebanon to establish autor.omous areas of control, free from Jordanian interference. It goes on to discuss ways of getting Jordanian acquiescence to allowing the PLO to return. The document admits it will not be possible tn get King Husayn's agreement to the return. It will be necessary to conduct clandest3ne nationalist activity among Palestinians in Jordan setting up 'revolut3onary ce113' which will serve as the bridge over which the Palestinian revolution will march back into Jordan. COPYRIGHT: The Observer Ltd 1981 CSO: 4400/106 2 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007102/49: CIA-RDP82-40850R040500024036-5 FOR OFFiCIAL USE ONLY F~ INTER-ARAB AFFAIRS GULF llIPLON'iATS COWENT ON MEDIATION EFFORT Jiv301351 London REUTER in English 1306 G'ZT 30 Dec 81 [Excerpts] Bahrain, 30 Dec (REUTER)--Syria and Saudi Arabia have agparently agreed on a major diplomatic drive to heal divisions in the Arab world following Israels annexation of the occupied Syrian Golan Heights, Gulf Arab diplomats said today. An understanding was reached last week by Sqrian President Hafiz al-Asad and Saudi Crown Prince Fahd and supported by other Gulf states which envisaged fresh ~ attempts to end the G�lf war and reconcile Syria and Iraq and Saudi Arabia and - Libya, the diploniats, who asked anynomity, said. They said they were not confident of the outcome because of the complexity of the rifts and what they called many negative factors combining against reconcilia- tion. They were.unable to give specifice of how the understanding would be. c,arried out. But the diplomats said they expected other unidentified Arab countries and the Palestine Liberaticm Organisation (PLO) to join the efforts at some stage. . Mr Asad, who ended a tour of Saudi Arabia and other states of the Arabian Peninsula on Monday, was expected to try to perauade Islamic revolutionary _ Iran, with which he.has strong ties, to accept peaceful efforts to end its 15-month-old war with Iraq, the diplomata said. Syrian officials in Damascus said todaq a high-level Iranisn delegation was expected there tomorrow. Saudi Arabia and Kuwait will at the same time approach Iraq on the possibility of ending the fighting and restoring its relations with Syria, severed by Baghdad at the start of the war over alleged Syrian support for Irans war effort, the diplomats said. Relieving Iraq of the war burden and normalising its ties with Syria are regarded as essential to enable the Araba to present same sort of cohesive front on Israels eastern border. 3 FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 FOR OFFICIAL USE ONLY While Iraq has been responsive to peace efforts by United Nations, non-aligned and Islamic mediators, Iran has rejected any notion of a ceasefire until after Iraq had withdrawn all its troops from Iranian territory captured in the first weeks of the war, the diplomats said. Relations between Syria and Iraq, both ruled by rival factions of the Ba'th Party, had been at a low ebb ever_ before the war, reflecting political and ideological disagreements and dePp mistrust. The diplomats said Syria was also expected to work for normalised relations i between Saudi Arabia and Libya, one of Damascus partners in the hardline Arab steadfastness front. The Syrian and Saudi leaders also agreed on the need to hold an Arab summit if the Security Council failed to act against Israel, the diplomats said. An Arab summit in Morocco last monzh cbilapsed because of confiict over the Saudi peace plan, which was opposed by Syria and other radicals for its implied recognition of Israel's right to exist. CSO: 4400/102 4 FOR OFF'[C[AL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007102/49: CIA-RDP82-40850R040500024036-5 FOR OFFICIAL USE ONLY INTER-ARAB AFFAIRS BRIEFS PFLP ARMS SHIPMENT--The PFLP, George Habash's Palestinian organization opposed to Yasir `Arafat, has just received an important arms shipment. The agent: Cuba. The cargo was unloaded at a north Lebanese nort under Syrian control. [Text] [Paris L'EXPRESS in French 11 Dec 81 p 991 [COPYRIGHT: 1981 s.a. Groupe Express] CSO: 4419%12 5 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R400504020036-5 FOR OFFICIAL USE ONLY ALGERIA ALGERIAN ECONOMIC SITUATION REVIEWED Paris MARCHES TROPICAUX ET MEDITERRANEENS in French No 1882, 4 Dec 81 pp 3215-3221 [Text] At a time when French-Algerian relationa aeem to be klaking a new turn and experiencing a revival, we are presenting a number of essential elements of the economic situation in Algeria, ae that country endeavors to apply the new development strategy that guided the conception of its 5-year plan for 1980-1984. Based on area (2,381,000 square kilometers), Algeria-is the second largest country on the African continent, after Sudan, and tenth�largest in the world. Because of an extremely high rate of demographic growth (3.2 percent), its population has nearly doubled since independence, numbering almost 20 million inhabitants, over half of which (57.5 percent) are under the age.of 20 and heavily concentrated in the northern regian of the country, with nearly 90 percent of the national territory constituted by Saharan zones. Despite the problems posed by this strong population growth, Algeria has been able to attain and maintain a particularly high rate of formation of fixed capital, mainly thanks to massive investments which, fram 10 percent of the gross national production (GNP) during the first decade of independence, went as high na 40 percent of the GNP in recent years. These {nvestments, esaentially made in the productive sector (70 percent in 1980), have a.'vsorbed oil revenue (which made up nine-tenths of Algerian exports from 1970 to 1979 and about one-third of the GNP) and are at the root of the foreign debt, service on which amounted to 21.7 percEnt of the value of exports at the end of 1978. However, because of the increased cost of hydrocar- bons in 1979, service on the debt dropped to about 20 percent at the end of 1981. Algeria's develo.pment strategy was based on the establishment of a heavy industry, financed by oil*revenue, whicn -is to become the country's subsequent instrwnent of development when hydrocarbons reberves would be exhausted. Actually, despite a-.ten- fold increase in investments between the first plan (1970-1973: 12 billion dinars) and the second (1974-1977; 129 billion dinars), industrial production still repre- sents on2y 10 percent of the GNP, whiZe the ehare of agriculture is stagnant at 8 percent. Furthermore, it is income from gas that apparently must complete, then replace, oil revenue in ensurjng the continuity of the development of the Algerian econam;. The productivity of the industrial public sector has not 1ived up to hoFes. Some plants have reached onlq 40 pexcent and sometimes as little as 15 per- cent of their capacity. 6 FOR OFF[CUL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-40850R040500024036-5 FOR OFFICIAL USE ONLY The perhaps excessive priority reserved for industrialization, criticized by certain economists, and the adoption following independence of a foreign pattern of develap- ment have imposed heavy sacrifices on the people, wh4se essential needs, particular- ly in the area of health, housing and "uasic consumer needs, have been neglected. Therefore, after two years of refleGtion and irt keeping with the orientations de- fined at the beginning of. 1980 by the Central Cotmmittee of the FLN, the new 5-year plan for the 1980-1984-period proposes to correCt past errors and deviations, gain control of the national production apparatus in order to improve productivity, garticularly through the decentralization of responsibilities at the level of pro- duction units, give a new thrust to agriculture and make up for the lag in meeting the basic needs of the peoplea The era of accelerated industrialization making massive use of foreign assistance and pesk technology seems to be coming ta an end in Algeria. The country must henceforth invest in keeping with its needs and means, economize on its oil reaources and rely more.c: its own xesources, while the utili- zation of foreign loans must remain litnited. ln 1978, Algeria was the third-ranking net borrower of all Third World countries, following Brazil and Mexico. One of the objectives of the 1980-1984 Plan is to reduce the weight of the debt to 15 percent of the value of exports. . " Algeria's Gross National Product at Current Prices (in billions of dinars) Exporta Public sector consumption Private sector consumption Formation of fixed capital Variations in reserves Less: Exports . Gross national product Variations in revenue Exports/revenue Imports/revenue 1470 1975 1976 1977 1978 1979, 1980 5.4 19.4 22.9 26.2 4 8.4 9.5 11.6 -15.0 17.1 22.2 12.2 26.8 31.9 38.9 46.8 55.1 70.8 7.6 24.4 31.2 39.3 52.4 53.1 64.9 0.7 3.9 0.6 2.4 7 - 26.5 - 27.5 - 36.5 22.9 . '56.3 68.5 81.9 98.4 122 132 11.7 + 16 + 21.6 + 19 + 20 + 24 + 9 24 34 , 33 32 � . 30 47 40 45 . Annual average 1973-1978 = 6.4 10.2 7.2 6.5 + + (:NP (constant prices) growth % Algeria undertakes this new phase of its development with solid assets. Among the poor countries, Algeria is a rich nation with a gross national product in 1980 of 154 billion dinars (some 184 billion francs). In 1979, the per capital GNP was $1,580 (Morocco: $740; Tunisia: $1,120) and it placed Algeria in a good position among intermediate-income countries in World Bank classifications. Even i= its construction was onerous and even if errors-were made, the ,public industrial sector constitutes a platfonn for future development if Algeria does succeed, as it seems to want to, in putting together a diversified industrial fabric of sma1l and medium- zie enterprises* that should revive it and increase its wealth. Algeria has been wise enough to tenaciously build one of the instruments that can guarantee future generations of the country's economic independence and meet social needs, particu- larly employment. Retroactively marking the beginning of the new 5-year plan, the year 1980 began with the main reorientations of Algerian policy on the working and marketing of hydrocarbons, industry and agriculture. 7 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2407102109: CIA-RDP82-00854R000500020036-5 FOR OFFICIAL USE ONLY The priority given "to the conservation and preservation of national strategic reserves" led Algeria to make a voluntary 12-percent reduction in crude oil produc- tion in 1980. Nevertheless, the discovery of new deposits in 1980 increased petro- letim reserves to 1,213,000,000 tons, which could guarantee production at the current rate for 20 years. Natural gas production is linked to its marketing and Algeria has come to prefer halting deliveries of liquefied gas in certain cases, waiting far results from the negotiations it has entered into with its main custamers concerning prices, which it wants to link to the price of crude (see MARCHES TROPICAUX of 27 November, p 3169).. It has also put off constructian of the LNG 3.liquefaction complex at Arzew. For the time being, the predominsnce cf the hydrocarbon sector in the Algerian economy remains very marked, reprasenting 32.3 percent of gross national production for the 1976-1979 period (annual average) and 37.5 percent in 1980. The agricultural sector remains the "poor cousin," despite an improvement in cli- matic conditions. It contribured only 7.3 percent of the GNP in 1980, down from the average for the 4 previous years. Finally, the substantial investments made in the indiistrial'sector did not prevent a certain decline in its contribution to the GISP, which, from an average 10.6 per- cent for the 1976-1979 period, d:oprzd to 10.4 percent in 1980. The 1980-1984 Plan aims to correct these imbalances. The volume of investments will reach 400 billion dinars, half'for the cost of proj ects included before startup of the plan and not yet campleted. The essential objective that is, the implementation of actions that could meet the people's aspirations by about 1990 will be achieved through a far-reaching transformation of the general investment planning system, greater flexibility in and decentralizgtion of the management of the economy, the establishment of forrss of organization that will provide greater control of the production a.zd marketing apparatus, maximum utiliza- tion of capacities and better organization _ This plan provides for a real annual growth rate of 8.2 percent, higher than that ~ of the previous plan 7.5 percent although�it had actually been only 6.2 per- cent for the 1970-1976, 7.2 percent in 1979 an3 the low 6.5.percent in 1980, marking - a substantial iffiprovement over the 1960's, when the average was 4.4 percent. , An important change compared with the past is expressed in the more vigorous rate of the growth in consumption campared with�the grawth in investments. Growth in consumption will be 8.6.percent annually, campared with a little over 7 percent _ for investments. Inasmuch as the utilization of foreign bcrrowing has been limited to SO-billion dinars for the'.duration 3f the plan,' plan finF.ncing must essentially come from budget savings, estimated to total 200 billion dinars during the period. Some 60 percent of resources will came from oil taxes and 38 percent from regular taxes, as well as savings of enterprises and private parties. At 1979 prices, import needs for the period of the plan are an estimated 270 billi4n dinars, an annual growth rate of 6 percent. 8 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R400504020036-5 FOR OFFICIAL USE ONLY General Investment Program 1980-..L984 (in billions of dinars) Programs Spending Authorizations RAR New 1980- 1979 Pro . Total 1984 Percent Beyond Industry 79.5 132.2 211.7 154.5 ( 38.6) 57.2 including hydrocarbons 28.4 49.3 7707 ,6305 ( 15,1) 14.7- Agriculture 17.8 41.6 59.4 47.1 ( 11.7) 12,3 Forestry , 0.7 3.3. 4.0 3.2 ( 0.8) 0.S Agriculture 6.0 1709 23.9 20.0 ( 4.9) 3.9 Waterworks 10.9 19.1 30.0 23.0 ( 5.7) 7.0 Fishing 0.2 1.3 1.5 0.9 ( 0.3) 0.6 Transport ' . 2.4 13.4 15.8 13.0 ( 3.2) 2.8 Economic Infrastructure 19.9 36.2 56.1 37.9 ( 9.5) 18.2 Communications excluding rail 6.8, 12.5 19.3 12.5 6.8 Rail inf rastructure 1.8 7.1 8.9 5.0 3.9 Telecommunications 1.8 6.2 8.0 6.0 2.0 Storage-distribution 8.8 9.0 17.8 13.0 4.8 Industrial zones 0.7 1.4 2.1 1.4 0.7 Housing . 34.5 58.0 92.5 60.0 15. ) 32.5 Education-training . . 30.3 35.4 65.7 42.2 ( 10.5) 23.5 Social Infrastructures 6.7 14.3 21.0 16.3 ( 4.1) 4.7 Including hea�lth 3.6 6.2 9.8 7.0 2.8 Collective Equipment 2.4 10.9 13.3 9.6 ( 2.4) 3.7 Construction Enterprises 3.4 21.6 25.0 20.0 ( 5) 5.0 Total 196.9 363.6 560.3 400.6 (100 ) 159.9 Principal Economic Sectors Oil and Natural Gas ti though it represents by far the main source of foreign exchange, Algerian oil car- ries little weight in the international oil balance. Alger:ian production is not over 2 percent of all world production, 4 percent of OPEC production and 6 percent of Arab production, although Algeria has taken from ita reserves the highest pro- portion regiatered in the world, reaching 6 percent in 1979, compared with an aver- age of 3 percertt in Arab oil-producing countries and 1 percent in Norway and the North Sea. Oil Production and Exportation Production Exports (1,000.tons) (1,000 tons) millions) 1972 50,085 46,592 1,032 1973 51,154 45,002 1,430 1974 47,172 42,110 4,878 1975 47,664 39,662 3,723 1976 50,424 45,600 4,799 9 FOR OFF[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02109: CIA-RDP82-00850R000500020036-5 (Oil Produc., cont.) FOR OFW7CiAL iJSE ONLY 1977 51,696 48,400 5,536 1978 54,420 �49,000 5,825 1979 53,700 48,400 7,513 1980 47,424 40,000 11,700 1981 (est.) 35,500 to 39,6 00 Algeria's Energy Reserves (1980) Gas 3 Oil - ) (billions m (millio ns�tons) - Current reserves Predicted reserves Potential reserves - Total World 2,974 I,100 520 �9L 299 ..22 3,793 1,213 77,600 91,100 Crude oil production, which reached a ceiling of,between 50 and 54 million tons between 1976 and 1979 and which was deliberately reduced by 12 percent in 1980, should experience a farced regressian of some 25 parcent in 1981 as a result of fche decrease in deductions from foreign companies'because of the-reduction in world consumption but also the high cost of Algerian oil. Brought down to* $37.5 a barrel following the OPEC.meeting of 29 October 1981, the cost ot Algerian crude is among the highest in the world and Algeria must face the competition of Nigerian crude and crude frota the North Sea. Nevertheless,.bartering (using oil to pay for all or part.of the equipment or coasumer good imports), the generally predicted increase amounting to 3 percent bf the price of crt:de annually in real terms aver the next decade, and the increase in'uggraded products in the form of condensates and refined oil should lasgely compensate for the reduction in value of the production of crude. . Actually, it is gas and not oil that is the main energy resource of�Algeria, whose immense proven reserves, some 3 trillion cubic meters, represent 3.9 percent of world reserves in 1981 and put Algex3a in place in the world, after the Soviet Union, Iran and the United Statea. . Algeria produces two kinds�of gas: natural gas and gas cambined with oil, but at the present time, Algeria resells only the former. As for the Zatter, it is either burned or used as an auxiliary means for the extraction of oil. Algerian gas production is still low (between 14 and 16 billion cubic meters a year (1978-1980). It is estimated that it could reach 100 billion cubic meters in 1984, providing Algeria with foreign exchange equivalent. to its oil revenue. If the country agreed to export unrefined gas in order to r.espond to the urgent needs of the international market, it was on the candition' that in the future, the major portion should*be turned into liquid gas before export. However,.Algeria now has an excess liquefaction capacity. In Auguat 1981, the na.tional liquefied natural 10 FOR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02109: CIA-RDP82-00850R400500020036-5 FOR OFFICIAL USE ONLY _ gas production capacity has doubled, reaching 30 billion cubic meters, with the startup of the latest three liquefaction lines at the GL 1 K unit in Skikda. How- - ever, three liquefaction programs were abandoned this year (GL 3 Z at Arzew; GL 2 h - at Skikda; and GL 1 C at Issers). _ Actually, 1981 like 1980 was a year of transition for Algerian authorities, a year that should gradually lead to the equivalence of crude oil and gas prices. For that purpose, Algeria has gane so far as to break several contracts with Atnerican _ custamers (Tenneco and E1 Paso, at 20.5 billion cubic meters a year). Sales con- tracts that are currently operational were reduced from 16.8 to 6.3 billion cubic meters. Liquefied Natural Gas Sales Contracts - Quantities . - Billions � Duration - Thermal Units Billions Startup Contract Customer and Country Year M3 Year Date (Years) - Active - British Methane (United Kingdom) 103.4 1.1 1965 15 ^rench Gas Company (France) 5.3 0.6 1965 25 French Gas Company (France) 35.0 3.7 1973 25 Distrigas (Belgium) . 12.0 1.3 1976 20 Enagas (Spain) 45.0 4.8 1976 23 Revived _ E1 Paso (United States) 103.4 10.9 1978 25 - Distrigas (Belgium) 50.0 5.3 1980 20 French Gas Company (France) .51.5 5.4 1980 20 Panhandle (United States) . 45.0 4.8 1980 20 ENI [National Hydrocarbons Agency) ' 85.0 9.0 1982 20 - (Italy) Being Approved E1 Paso (United States) 103.4 10.9 1982 20 Tenneco (Canada) ' 100.0 10.6 1981 20 Ruhrgas-Gasunie (FRG) 75.6 8.6 1982 20 SONATRACH is turning back to Europe. The two partners ready to receive additional quantities are France and Italy. However, in both cases, although the laying of the Algerian-Italian gas pipeline and construction of the Montoir terminal have just been completed, negotiations begun on prices have turned.out to be difficult. Actually, the Algerians, who have invested heavily in working their gas, do not intend to "sell it off"~(see MARCHES'TROPICAUX, 27 I3ovember, p 3,169, Algerian position on the price of liquefied natural gas). Industry Industry is in second rank after energy in the Algerian economy. It concentrates on heavy industries: iron and steel metallurgy, machinery, electronic and 11 FOR OFF'[CIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2407/02109: CIA-RDP82-00850R000500420036-5 FOR OFF7CIAl. USE ONLY  petrochemical complexes. The objective of Algerian planners was, to replace indus- try for oil in the future as the main source of national revenue. But the.reaults have not been in proportion to the sums invested. 'In 10 years, tMe industrial sectbr absorbed 170 billion Aigerian dinars, which weFe spent to set up plantg thets - based on the quality of their equipment, were to vie with those in many industrial- ized countries. Poor management and carelessness, joine3 with the control exercised over them by foreign experts, reduced their to 40 percent, 30 percent and sometimes less. Consequently, the growth in investments in the industrial fiel_d was accompanied by a considerable drop in productian and, consequently, in production. In metal- lurgy and iron and steel, production dropped by 27 percent between 1974 and 1978. Lead production dropped much more than iron and steel production, dropping by 75 - percent in 1978 compared with 1972. The same is true for zinc (down 42 percent). Heading the industries with r.ioteworthy progress are weaving,'spinning and tanning. = As for the equipment industry (trucks, tractors, harvesters, and so on), part of the production is still stor�ed because it was not marketed to self=managed proper- ties and farm cooperatives under the agrarian revolution. By way of example, out of - 20C trailer tractors already built,.174 were'still in stock. Actually, according to the objectives of the new 1980-1984 Plan, investments in industry should increase moderately until they represent�38 percent of all invest- ments, compared with 60 percent for the previous plan. New plans tend to strengthen industries that can meet the urgent needs of the population and inerease productiv- ity. Program of Industrial Investments Planned fnr 1981 Annual Plan Share of Rem. Inv. Remaining To be Made in Investments Total Prog. New Pro- % of To Be Made (in grams Total Total Hydrocarbons 8,800 56.8 6,700 15,500 40.8 Electricity 1,000 32.2 2,100 3,100 8.1 Petrochemistry 900 94.7 50 950 2.5 - Minirtg 350 63.6 200 550 1.4 Iron and steel industry 3,230 92.3 270 3,500 9.2 Mach. and elec. construction 4,750 91.3 450 5,200 13.7 - Light chemistry 1,290 96.3 50 1,340 3.5 - Building materials 1;150 79.6 295 1,445 3.8 Food 2,600 92.8 200 2,800 7.3 Textiles 1,820 95.8 80 1,900 5 Leathers 105 65.6 55 160 0.4 Wood and paper 870 91.5 80 950 2.5 - Local industrj 500 86.2 80 580 1.5 ` General studies 15 100 15 Total 27,380 72 10,610 37,990 100 Source: Ministry of Planning and National Development (MPAT) 12 ROR OFFICIAL USE ONLY APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500020036-5 FOR OFF'ICIAL USE ONLY Half of the expenditures pro�uided for in.the plan will be devoted to the completion of projects underway (paper mills, cement works, petrochemistry) or already planned (chemistry, mechanical industry). The other half will be allocated.for the con- struCtion of smaller and more concentrated units in the building materials sectbr ~ (iron and cement) and the durable eonsumer goods sector. - Nevertheless, of the investment program for 1981 (83.8 bi'llion dinars), some 38 billion will be devated to industry (45 percent). However, the 72 percent of the industrial investments already r;ommitted actually correspond to investments pre- viously planned and not complet-ed.. , The share of the industria.l sector in the GNP showed a slight decline in 1980=1981 ~ to 10.5 percents but processing'industries rose 11 percent in 1980 comapared with 1979. This improvement corresponds to.a certain resurgence in productivity covering 25 percent of production capacity.. T.he-latter suffers in particular from difficul- ties in of agricultural produc.ts due to the deterioration of the agricultural sector. By way of example: the Relizane agroindustrial unit, whicli represented an invest- ment of 200 million dinars} went into productian in 1975 with a processing capacity, of 15,000 tons a year for five assembly lines (processing of oranges, tomato paste, grape juice, processing and packing of olives and various vegetables). At the pre- sent time, two lines are operating regularly, with the ofihers being halted for lack of supplies of the necessary agricultural products. The plant handled 4,588 tons of farm products in 1980 (30 percent capacity), compared with 2,490 tons in 1979 (16 percent of capacity). In addition, the SONZC (National Cellulose Industries Company) alfa3,fa camplex produced 20,000 tons of paper pulp'in 1980 (30 percent of the capacity of 66,000 tons), up 12.5 percent campared with 1979. This complex still suffers f rom agri- cultural supply problems (alfalfa). Normally, it should receive 500 tons a day of alfalfa, but it never received over 60 tons a day. . B