NEAR EAST AND SOUTH ASIA REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00289R000100260001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 64
• Document Creation Date: December 23, 2016
• Document Release Date: September 6, 2011
• Sequence Number: 1
• Publication Date: November 8, 1985
• Content Type: REPORT

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Directorate of
Intelligence MASTER fl!i COPY
DO MCT GIVE 01 T
0a AfK C Ill I
Near East and
South Asia Review
Seeret
NESA NESAR 85-024
8 November 1985
Cow 41 1
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Near East and
South Asia Reviev
Articles Morocco-Libya: Prospects for the Union
King Hassan and Colonel Qadhafi believe they have secured enough
economic and political benefits from the Moroccan-Libyan union to
encourage them to continue and even enlarge their association, but
mutual suspicions and widely divergent foreign policies will prevent
the integration envisioned by the treaty.
Palestinians: An Update on Abu Nidal Terrorism
The terrorist capabilities of the radical Palestinian Abu Nidal group
remain strong despite conflicting reports on whether the group's
leader, Sabri al-Banna, is dead or alive, and it continues to target
PLO and other Arab leaders working toward a settlement of the
dispute with Israel.
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Israel-West Bank: Profile of Palestinians 9
Under the Occupation
Israel's occupation of the West Bank has fostered major changes in
lifestyle for the territory's Palestinians. There are indications that
the population could increase dramatically if the West Bank's
increasingly urban, college-educated males decide to seek economic
opportunities at home rather than in the Arab states]
Lebanon: Amal and Hizballah-The Line 13
Between Politics and Terrorism
Lebanon's political dissolution has opened the door to Shia political
activism and at the same time created an environment of chaos in
which Shia political demands cannot be satisfied. Rivalry between
Amal and Hizballah may impel both toward greater participation in
terrorist acts to prove their commitment to the Shia cause.
Secret
NESA NESAR 85-024
8 November 1985
orlyl
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The Shia Amal Militia: Syria's Trump Card in Lebanon? I 19
Syrian efforts to gain influence with Nabih Barri's Amal militia by
providing arms and training seem to be intended to preserve Syria's
options while parallel political moves are made to. restore stability in
the greater Beirut area and foster political reform
SSNP: New Role in Lebanese AffairsF----] 23
Although the Syrian Social Nationalist Party is a minor Lebanese
party in terms of its geographic and political base, it stands to
enhance its influence significantly through close attachment to
Syrian policy objectives in LebanonF--]
Muhammad al-Imadi: Syria's Economic Reformist I 27
The recently appointed Minister of Economy and Foreign Trade,
Muhammad al-Imadi, gives Syria its best hope to pull out of its
Arab socialist economic morass, but his economic philosophy and
initial reforms have stirred up opposition because they challenge the
role of entrenched ideologues in the Bath Party and public sector.
Egypt: Financing the Muslim Brotherhood I 29
The Muslim Brotherhood in Egypt is primarily financed through its
legitimate local business, with additional funds received from
sympathizers and expatriate brothers in Saudi Arabia, the Arab
Gulf states, and Western Europe, and some funding obtained
through the exchange of US dollars in the black market
Secret ii
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Iraq: Rivalry for Control of the Intelligence Establishment
The struggle to control Iraq's intelligence services has tested the
political influence of President Saddam Husayn and created rifts
within his own clan, the Tikritis. A central figure in the contest has
been Saddam's half brother, Barzan al-Tikriti, ousted from the
directorship of the elite intelligence organization, Mukhabarat, in
Iraq's Dependence on Foreign Labor
Iraq will remain dependent on foreign laborers during the next few
years regardless of whether the war with Iran ends. The number of
foreign workers in Iraq is likely to decrease sharply only if oil
revenues fall precipitously and foreign payments pressures force
Baghdad to sharply curtail domestic spending and economic
activity.
Disagreements between radical and conservative factions have
stymied efforts to implement a major land reform program, and the
government's determination to increase agricultural productivity
also conflicts with the objective of giving peasants their own plots of
Rajiv Gandhi has signaled his intention to give security issues a high
priority by assuming the defense portfolio and by appointing key
aides to oversee defense procurement and internal security. He
probably will attempt to rehabilitate the police forces, reform the
arms procurement process, and reorganize the armed services.
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India: Foreign Military Assistance
India has engaged in a wide range of foreign military assistance
during 1985, including selling arms and equipment, providing
technical support to foreign militaries, and training foreign military
students, but its potential for expansion is limited by India's
nonaligned foreign policy and strong competition from established
suppliers.
India's Key Nuclear Advisers
The Indian Government's long familiarity with the nuclear weapons
issue and with the well-developed public debate on the subject gives
India a pool of influential nuclear experts who, while offering the
Prime Minister divergent points of view, differ more on the question
of when rather than whether India should embark on a weapons
program.
A group of 250,000 to 300,000 Biharis, Muslims stranded in
Bangladesh since the War of Independence in 1971 who consider
themselves Pakistanis, have been prevented from migrating to
Pakistan by a lack of money and other bureaucratic hurdles, and a
general lack of interest on the part of potential donors will probably
force the Biharis to remain in Bangladesh.
Some articles are preliminary views of a subject or speculative, but
the contents normally will be coordinated as appropriate with other
offices within CIA. Occasionally an article will represent the views
of a single analyst; these items will be designated as noncoordinated
views.
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Secret
Morocco-Libya:
Prospects for the Union
King Hassan and Colonel Qadhafi believe they have
secured enough political and economic benefits from
the Moroccan-Libyan union to encourage them to
continue and even enlarge their association. Both
derive advantage from the union in their efforts to
balance Algeria's power in the region. Hassan almost
certainly will continue the union as long as Qadhafi
backs Morocco on the Western Sahara question and
does not interfere in Morocco's internal affairs. He
will also expect Libyan economic support to help keep
a lid on Rabat's financial problems and to provide
jobs for Moroccan workers. The Libyan leader, for his
part, will look to Morocco to continue to withhold
support from Libyan dissidents and will encourage
Hassan to put distance between himself and
Washington. Mutual suspicions and widely divergent
foreign policies, however, will prevent the integration
envisioned by the treaty.
use this access to establish links with local opposition
groups. Despite Moroccan assurances to the contrary,
Rabat could decide to be a conduit for passing US
embargoed goods to Libya, particularly spare parts
for Libyan aircraft. We believe, however, that this is
unlikely unless Morocco's ties to the United States
deteriorate significantly and Hassan believed he had
little to lose from such a move.
In addition, Morocco may be persuaded to serve as a
transit point for Qadhafi's efforts to strengthen
Libya's military presence in Latin America. Although
Rabat allegedly has turned aside numerous Libyan
requests for air transit rights, some Moroccan officials
claim Hassan has allowed at least one civilian plane to
transit en route to Suriname. Hassan would have to
weigh potential risks to his ties to the United States if
he were to sanction additional flights.
Shades of Things To Come?
There are some aspects of the union that still can be
implemented. Heading the list is defense cooperation.
So far Hassan has not approved establishment of the
Defense Council, as stipulated in the Oujda Accord.
Nevertheless, if Morocco fails to acquire new ground
force materiel from Western sources to replace aging
US- and French-made equipment, we believe Hassan
would turn to Libya for financing or weapons.
Moreover, direct hostilities between Algeria and
Morocco probably would prompt Hassan to seek
Libyan intervention-or at least a show of force-
along the Libyan-Algerian border. Hassan, in our
view, would probably stop short of asking that Libyan
soldiers fight alongside Moroccans.
On balance, we believe that Morocco would be the
more likely party to end the pact. Hassan might allow
the treaty to atrophy if Qadhafi were to discontinue
economic aid, and more particularly if Libyan
assistance were to become a major political issue in
Morocco. The King might even break openly with
Libya if Qadhafi insisted on closer military
cooperation or on Rabat's adopting a more anti-US
and anti-Israeli stand. Hassan almost certainly would
denounce the union if Moroccan security uncovered
clear evidence of Libyan-sponsored threats to his
regime or if Qadhafi resumed supplying the Polisario.
If Rabat abrogated the pact, Qadhafi would turn
sharply on Hassan and seek to overthrow him.
Continuation of the union offers some potentially
significant benefits for Qadhafi. For example, Rabat
may agree to represent Tripoli in countries where
Libya has no official presence. Qadhafi would try to
Secret
NESA NESAR 85-024
8 November 1985
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Secret
Implications for the United States
Hassan almost certainly calculated that the
agreement would cause some cooling in his
relationship with the United States, but he
underestimated the depth of Washington's negative
reaction to the union. We believe that Hassan is
sincere in his statements to US officials that he wants
to maintain close relations with Washington. He will
use any sign that Libya has turned over a new leaf-
an unlikely occurrence in our view-to remind US
officials that dialogue is the only way to tame Qadhafi
and that the United States should join the effort.
For his part, Qadhafi will continue to use cooperation
with Morocco to enhance his international standing,
to encourage other moderate governments to improve
relations with Tripoli, and to persuade other Arab
states to join the union. He may also hope the
agreement will lessen US pressure on Libya.
Hassan will be watching closely for indications that
the United States wants to redefine its relationship
with Morocco. He will remain sensitive to
Washington's continued refusal to send senior US
officials to Rabat or to extend what he views as
appropriate courtesies to himself and other Moroccan
leaders. His wish to limit the damage to relations with
Washington gives the United States some leverage on
such issues as technology transfer and intelligence
matters. On the other hand, Hassan's personal
prestige is so heavily engaged in the union that-as he
has amply demonstrated-he will strongly resist
external pressures to abrogate it. Indeed, he may even
use the Libyan deal as a bargaining chip to obtain
new aid from the West. Hassan will consider any
cutback in bilateral programs by Washington as a
punitive action.
In the face of deteriorating bilateral relations and
growing domestic instability, Hassan could radically
reassess his overall ties to the United States. Under
these circumstances, he could:
? Refuse to allow US forces to use Moroccan facilities
under the US-Moroccan access and transit
agreement.
? Stop Voice of America operations in Morocco.
? Adopt a more radical stand on Middle East issues.
? Turn to Libya and the Soviet Union for military
assistance.
In addition to the union with Libya, Hassan could
make other shifts in Moroccan foreign policy if Rabat
does not receive what it regards as adequate aid from
its traditional supporters-particularly the United
States and France. We believe that these shifts could
include expanded commercial and economic ties to
Eastern Europe and the Soviet Union. Moscow
already has a substantial investment in Morocco's
phosphate industry. The ample publicity accorded by
Morocco to new trade accords with the Soviets in
September 1984, coupled with repeated favorable
comments of key Moroccan officials toward Moscow,
suggests a willingness to consider, if not undertake,
closer ties to the USSR and its allies. Hassan courted
the Soviets in the 1960s and knows that aligning his
policies with them would not solve Morocco's long-
term problems, but it could help relieve pressures in
the short term.
Continuation of the union will sharpen political
differences in North Africa. For example, the Libyan
expulsion of foreign workers-particularly
Tunisians-has complicated Hassan's relationship
with Tunis. Hassan's effort to mediate the dispute was
perceived in Tunis as one sided and biased toward
Libya. Moreover, the fact that Moroccan citizens-
albeit in limited numbers-are the only ones so far
allowed to replace the expelled workers almost
certainly will be seen by other states as further
indication of Hassan's acting on Qadhafi's behalf.
The agreement is particularly irritating to Algeria,
which continues to view the union as a tactical move
by Morocco to block Algerian efforts to end the
Western Sahara conflict and to promote regional
unity. Algeria probably hopes that personal
incompatibilities between Qadhafi and Hassan will
break up the pact. In the meantime, Algiers will
continue to support Libyan dissidents and could allow
the Polisario to attack Morocco directly from
Algerian territory-where Moroccan troops cannot
hit them without risking a major confrontation with
Algeria.
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Palestinians: An Update
on Abu Nidal Terrorism '
The terrorist capabilities of the radical Palestinian
Abu Nidal group remain strong, in our opinion,
despite conflicting reports on whether the group's
leader, Sabri al-Banna (Abu Nidal) is dead or alive.
The Abu Nidal group, which has long rejected any
political solution to the Arab-Israeli dispute, in the
past year has intensified attacks on pro-Arafat
Palestinians and those moderate Arab countries that
support them, particularly Jordan. The group has
threatened further attacks on West European and US
interests for their involvement in the Middle East
peace process
Abu Nidal senior officials apparently have recently
tightened what we believe was an already taut,
compartmented structure and, as part of this process,
may have transferred more of its elements from Syria
to Lebanon. Along with strengthening the group's
capabilities, we believe these changes reflect an
underlying concern among Abu Nidal leaders about
the reliability of Syria, their host since October 1983.
The group strives to maintain its independence, but
we believe it has accepted some terrorist tasking from
Damascus.
Al-Banna: Elusion or Illusion?
Sabri al-Banna, the group's founder, was rumored
dead and buried in Iraq in mid-1984, but over the last
few months, various reports-including alleged
interviews-claimed that he is alive and well in Libya.
At a minimum, we believe that the group's leaders are
trying to revive the aura of al-Banna to recoup the
losses in membership that followed rumors of his
death.
Three alleged interviews with al-Banna have appeared
so far in 1985. No photographs, however, have
accompanied these interviews, and explanations and
details are lacking or weak. The first interview
appeared last February when a French journalist
claimed to have talked with him in Tripoli, Libya.
The journalist later admitted that he could not be
certain that the man with whom he spoke was al-
Banna. A Kuwaiti journalist also claims to have
interviewed al-Banna in Tripoli in September. The
most recent alleged dialogue with Abu Nidal
appeared in October, in the West German magazine
Der Spiegel. No date and place of the meeting were
Abu Nidal group's operations have been planned and
directed for some time by al-Banna's two top deputies,
Mustafa Murad and Abd al-Rahman Issa. Dead or
alive, we believe the fate of al-Banna has no effect on
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Secret
NESA NESAR 85-024
8 November 1985
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Secret
Major Attacks Claimed by Abu Nidal Group a
December 1984-November 1985
1984
4 December
1985
21 March
24 July
8 August
31 August
Deputy Chief of Mission, Jordanian Embassy, killed in Bucharest (Black
September).
Leading Fatah military figure killed in Rome (Arab Revolutionary Brigades).
Fahd Qawasmah, PLO Executive Committee member, killed in Amman (Black
September).
Handgrenade attacks on Jordanian airline offices, Athens, Nicosia, Rome (Black
September).
Kidnaping of British journalist in Lebanon (ROSM).
Rocket fired and narrowly missed Jordanian Embassy office, Rome (Black
September).
Rocket fired at Jordanian airliner during takeoff, Athens, but did not explode
(Black September).
Bomb attack at British Airways office; grenade attack at Jordanian airline office,
Madrid (ROSM, Black September).
First Secretary, Jordanian Embassy, killed in Ankara (Black September).
Bomb exploded at hotel used by British tourists, Athens (ROSM).
Heavily armed man arrested near Jordanian Embassy, Athens who claimed
Black September membership and plan to kill Jordanian Ambassador.
Handgrenade attack at hotel in Athens to press Greeks to release above suspect
(Black September).
Grenade attack on Rome sidewalk cafe (ROSM).
Jordanian publisher and reported friend of Arafat killed in Athens (Black
September).
Bomb exploded at British
The Abu Nidal group generally claims credit for its operations in
other names, that is, Arab Revolutionary Brigades, Black
September, and the Revolutionary Organization of Socialist
Airways office, Rome (ROSM).
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the current capabilities of the group to carry out
terrorist operations.
Target: The Peace Process
We believe the Abu Nidal group's major goal is to use
terrorist tactics to derail efforts to reach a negotiated
settlement of the Arab-Israeli dispute. Since al-
Banna's rejection of the shift in PLO policy in 1974
toward a diplomatic solution, moderate PLO figures
have been the primary targets of the Abu Nidal
group; PLO Chairman Arafat almost certainly is the
major target. Since the Palestine National Council
met in Amman last November and King Hussein and
Arafat signed a peace initiative in February, senior
Jordanian officials and diplomats have been added to
the Abu Nidal hit list. The group claimed credit for
the assassination of moderate PLO Executive
Committee member Fahd Qawasmah last December
in Jordan and the assassination of a Jordanian
diplomat in Romania that same month. The group is
also believed to be responsible for the murder of
another Jordanian diplomat in Turkey last July.
The group recently threatened to murder two other
Executive Committee moderates, Muhammad
Milhim and Ilya Khuri, both of whom are prominent
supporters of the Middle East peace process and
possible participants in future talks between the PLO,
foreign governments indirectly, for their roles in the
peace process and their efforts against international
terrorism. In mid-1984 we believe the group was
responsible for two bombs that exploded at a US
Embassy warehouse in Amman and the Amman
Intercontinental Hotel, located across the street from
the US Embassy. It is not clear, however, that the
group was targeting the Embassy
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The Abu Nidal group has claimed credit for bombing
and grenade attacks in several West European
countries this year. Great Britain has been the target
of several Abu Nidal attacks designed to force the
release of group members, including al-Banna's
nephew, from British jails. The French Government
also has been threatened with violent reprisals if it
does not release two Abu Nidal members jailed there.
In the alleged interview with al-Banna that appeared
in Der Spiegel, Abu Nidal threatened the United
States and Great Britain directly, as well as other
we believe
the Abu Vidal group is the best organize and most
effective of the radical Palestinian terrorist groups.
member of the same family helps ensure a pool of
steady recruits, maintains the exclusivity of the group,
and provides a system of checks and balances to
prevent disloyalty.
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In 1985 the Abu Nidal organization turned to
bombing and grenade attacks in addition to more
precise assassination attempts against selected
individuals. This may indicate that better security for
senior-level PLO and Jordanian officials has made
accessibility to them more difficult. It also may mean
that the operatives are less experienced; bombing and
grenade attacks require less training.
Nidal group uses various covernames to carry out
terrorist operations. Although the group does not
always appear to have a clear-cut pattern for using
certain names, last year it appeared to conduct
operations against Persian Gulf targets under the
name "Arab Revolutionary Brigades." Following the
meeting of the Palestine National Council in Jordan
last November, the group used the name "Black
September" in claiming responsibility for attacks
against Jordanian and Palestinian targets. The name
may have been a reference to the Sabra and Shatila
massacres that took place in Lebanon during the
Israeli invasion in September 1982. Use of the name
may also be intended to mock and discredit the
former Fatah Black September terrorist organization,
defunct since 1974. We believe the group has used the
name "Revolutionary Organization of Socialist
Muslims" as its signature in attacks against targets
primarily in Western Europe.
Bases of Operations and External Support
The Abu Nidal group's central headquarters is in
Damascus. We assume that much of its training has
taken place at secret locations in Syria. We believe
that Syria has used the Abu Nidal group, along with
other radical Palestinians, to do its bidding, although
takes place
Libyan hospitality toward the Abu Nidal organization
appears to have grown this year, another indication
that the group may be looking for alternatives to
Syrian backing.
k the group is receiving "most" of
its support from Libyan leader Qadhafi, but we do not
have sufficient information to confirm the extent of
The Abu Nidal group's successful record in
conducting terrorist operations is undoubtedly
appealing to Qadhafi, given the ineptitude of many
Libyan agents. In exchange for increased Libyan
support and safehaven, Qadhafi may expect to play a
role in selecting Abu Nidal targets.
The Abu Nidal group probably has continued its
contact with Iran established in recent years. We do
not have adequate information to determine whether
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Tehran fulfilled its promise last year of more financial
support.
Conclusions
We believe that problems in advancing the Middle
East peace process will not halt the Abu Nidal group
from targeting moderate PLO and other Arab leaders
working toward a political settlement of the Arab-
Israeli dispute. The group might even try to attack US
officials involved in the peace process. We believe
Syria will encourage terrorism by the Abu Nidal
group when it believes its interests are not being
considered. Syria probably also will want to maintain
its support for the Abu Nidal group out of concern for
growing Libyan influence in the group.
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Israel-West Bank:
Profile of Palestinians
Under the Occupation
Israel's occupation of the West Bank, now 18 years
old, has fostered major changes in lifestyle for the
territory's nearly 1 million Palestinians.
As the job markets in the Arab Gulf states shrink, an
increasing number of Palestinian workers are
remaining home, seeking jobs in Israel. Officially
about 40,000 workers commute into Israel, although
unofficially there may be as many as twice that
number entering Israel to work. This trend may lead
to rapid, renewed population growth in the West Bank
after nearly a generation of stability. The West Bank
is also changing agriculturally as Israeli factories and
construction sites lure West Bank Arabs away from
their farms for better pay. Educational concerns, once
practically nonexistent, have now become an
important issue as Palestinians seek to improve their
opportunities on the West Bank.
Migration/Population Trends
The biggest factor affecting the West Bank other than
war has been its migration history. During the period
of Jordanian rule from 1948 to 1967, approximately
500,000 Palestinians left the West Bank for Jordan,
mainly because government policies accelerating
industrial growth and agricultural development on the
East Bank offered better employment possibilities.
The defeat of Jordan in the 1967 war and the Israeli
seizure of the West Bank caused another 226,000
people to leave.
Since 1968 more than 136,000 people have left the
West Bank, mainly because of lack of employment
opportunities, political tensions, and clashes with
Israeli authorities. Political and economic reasons still
cause many to migrate, especially those with
secondary or postsecondary educations, as most of the
jobs open to them in Israel and the West Bank are for
unskilled labor. Until recently the Arab population of
the West Bank has been relatively stable because of
the large number who have emigrated.
Since 1967 the West Bank Arab population has risen
from about 675,000 to an estimated 780,000,
including approximately 352,000 refugees. Nineteen
camps house 91,000 refugees, while the other 261,000
are registered as refugees and receive benefits but live
outside the camps. There are approximately 41,000
Israeli settlers living on the West Bank, bringing the
area's population to 821,000.
Currently, the Arab Gulf states provide enough jobs
for emigrating West Bank workers. Because of the
recession in the oil market, however, the job market is
not expanding as fast as the number of workers. If this
trend continues, West Bankers who would have
emigrated, mostly to the Gulf, may be forced to
remain in the West Bank and seek employment there
or in Israel. If they remain, Israel may see a rapid
increase in West Bank Arab population (the average
birthrate is currently 45 births per 1,000 women).
Where They Work
In 1967, agriculture (including farming, processing,
and marketing) engaged two-thirds of the Arab
population. Today only about one-third of the people
work in this sector both because of improved
agricultural technologies introduced by the Israelis,
reducing demand for labor, and because of the
decrease in land available for farming as a result of
land expropriations by the Israelis.
Although improved methods have caused productivity
to increase, they have also caused reductions in
manpower requirements and increased agricultural
output in an already full market. Neither Israel nor
Jordan is receptive to the increased supply because it
competes with their own production. Workers who
were once gainfully employed in the agricultural
sector must now seek employment elsewhere as the
demand for their skills has decreased.
On the other hand, Israel is providing work for more
than 40,000 commuting West Bankers, who are
mostly unskilled laborers working in construction.
Many rise before dawn and travel to the main
transportation centers where they catch buses to take
them into Israel. While some have full-time jobs,
others wait on street corners known to be frequented
Secret
NESA NESAR 85-024
8 November 1985
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West Bank Demographics
M Total population
Refugees
a Comprising the 1948 Palestine
population in what is now Israel
and the West Bank.
1973
1983
200
100
60
40
20
\
\
\
1972 1983
Refrigerators
1974 1983
Washing machines
1972 1983
Televisions
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by Israeli employers seeking day laborers. Because of
the cost and time involved in commuting, an
increasingly large number are staying overnight
illegally in Israel, often sleeping in crowded,
unsanitary hostels or on local beaches.
The Arab Gulf states provide a large number of jobs
for West Bank workers. Official Saudi Arabian and
Kuwaiti figures, for example, show a total of 400,000
Palestinian/Jordanian expatriates in their labor
forces. (Most West Bankers have Jordanian passports,
and distinguishing them from Jordanian citizens is
difficult.) Saudi Arabia and Kuwait offer the majority
of the good opportunities, such as administrative
personnel in the public and private sectors, banking
officials, and a few entrepreneurs. The majority of
these positions appeal to college graduates who do not
want to work in the unskilled jobs available in Israel.
Industry
Industrial growth in the Arab sector of the West Bank
has been almost nonexistent. Although the Israelis
have introduced some improvements in agriculture
and transportation (mostly for security reasons), they
have given no government assistance to local
industries. Furthermore, because of the unresolved
political status of the territory, investors are hesitant
to risk investing capital there.
At present, only three West Bank (Arab) firms have
more than 100 employees, and only 60 firms employ
more than 20. The total number employed in industry
has remained approximately 15,000 since 1970. By
the year 2010 Israeli planners envision that 108,000
new jobs will be created-83,000 for Jews and 25,000
for Arabs. By 1986 they plan for another 11,000
jobs-8,750 for Jews and 2,200 for Arabs.
The industrial development that the West Bank is
experiencing is in the Jewish sector. By 1983 there
were six industrial parks with 70 percent of the
employees Jewish. Settlements and private Jewish
firms, with large amounts of government aid, are
starting up new businesses and industries in the area,
including some high-technology enterprises.
and in the Arab states. Together these make up one-
third of the territory's GNP and help finance its large
trade deficit. Other funds come from taxes, fees,
charges for water and electricity, and loans and grants
for municipal purposes from the Israeli
administration. Some money from the PLO-
provided by Arab states-filters in, but it is not
recorded as Israel often prevents money from coming
into the West Bank when there is a hint of PLO
involvement.
Because Israel does not allow West Bank residents to
open and run their own banks, most West Bankers
either do not have bank accounts or keep their money
in foreign banks, usually Jordanian. Transactions are
carried out by money changers, who perform a variety
of functions including transferring balances between
residents and their foreign banks.
Some figures show improvement in the quality of life
for West Bank Arabs, but others show them still
struggling to acquire basic needs, such as water and
electricity. Town dwellers tend to do better than those
living in rural areas. Average spendable income has
increased as shown by the increase in durable goods,
but only 74.5 percent of all households in the area
have kitchens. Running water is found in only 45
percent of the homes-a major improvement since
1974 when only 23.5 percent had water. Electricity is
found in 96 percent of the homes in towns, but in rural
areas only 27 percent have it.
Schooling
According to one study, the Palestinian people have
one of the largest groups of university graduates in the
world relative to overall population. Yet high school
and college graduates often face a bleak future when
they look for jobs appropriate to their education in the
West Bank and Israel. There are few white-collar jobs
because of the generally poor economy, lack of growth
in the financial and managerial sectors, and Israeli
laws preventing Arabs from taking upper-echelon jobs
in Israel that could cause security problems (which in
practice denies Arabs access to the most remunerative
employment).
Money and Well-Being
The major source of income for West Bank Arabs is
remittances from migrant laborers working in Israel
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Israel has made it difficult for students to study
abroad by allowing them to return home only at
specific intervals. This restriction and the higher cost
of education abroad discourage many from traveling
outside the West Bank to gain a university degree.
Nonetheless, some Palestinians study outside the
territory (usually in Cairo, Amman, and in other Arab
states) because the subjects offered for study in the
four West Bank universities are limited. (Humanities,
commerce, and science are the most popular.)
Israeli authorities often close local secondary schools
and universities as punishment for anti-Israeli
demonstrations and rallies. They also keep a close eye
on the curriculum of the West Bank education
system. Publications dealing with Palestine, Arab
history, and politics are often banned. Over the years,
Israeli occupation authorities have compiled a long
list of books that are banned from the West Bank.
The present Labor-dominated government is more
concerned than many of its predecessors with the
quality of life of the West Bank Arabs and has eased
many of the harsh policies imposed by past
administrations. Under Labor prodding, occupation
officials have shortened the list of banned books and
shut down schools less frequently.
Future
There are indications of major trends taking hold in
the West Bank. One is the possibility of dramatic
increases in population if young West Bank males do
not emigrate, and another is an increasingly urban,
college-educated population.
Increases in the Arab population are likely to
aggravate employment problems. The West Bank has
few jobs to offer, and Israel is experiencing a
recession. Incidents of violence by West Bank youths,
already on the increase, are likely to rise to even
higher levels without new employment opportunities.
The industrial economy of the West Bank may see
some improvement and absorb a larger share of the
Arabs with higher education. But the lack of money
and investors and Israeli efforts to discourage
competition from the West Bank are likely to remain
major disincentives to significant industrial growth.
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Lebanon: Amal and Hizballah-
The Line Between
Politics and Terrorism
The rise of the radical Shia Hizballah movement in
Lebanon and its involvement in spectacular acts of
anti-US terrorism have added significantly to the
already fearsome reputation of Shia Islam established
by the rule of Ayatollah Khomeini in Iran. In
Lebanon, fundamentalists represent a small but
growing segment of the Shia community, the largest
and most deprived confessional group in the country.
Lebanon's political dissolution has opened the door to
Shia political activism and at the same time created
an environment of chaos in which Shia political
demands cannot be satisfied. The result has been a
steady increase in the stridency of moderate Shia
leaders confronted by the growing militance of their
own constituency and the obduracy of Lebanon's
other factions.
Nabih Barri, leader of Lebanon's mainline Shia Amal
organization, has an increasingly negative image in
the United States because of actions that have called
his moderate credentials into question. His call to
Shia soldiers in February 1984 to return to their
barracks rather than fire on their coreligionists in
Beirut subsequently led to the collapse of the US-
trained Lebanese Army and the loss of government
control over West Beirut. He has strongly criticized
the Lebanese Government-of which he is a
member-and demanded the resignation of President
Amine Gemayel. Barri has been particularly
prominent among those calling for stepping up attacks
on Israeli troops in south Lebanon.
Barri's "mediation" of the TWA hostage crisis last
June, however, has led to questions about connections
between Amal and the radical Shia Hizballah
movement that seized some of the TWA passengers.
In our judgment, Amal is not a terrorist organization.
As with most groups in Lebanon, however, it is not
easy to draw the line in an environment that defines
terroristic violence as unconventional warfare and
regards it as a legitimate extension of political
struggle.
Shia militiaman with flag of mainline
.gmal organization. F__~
Amal and Hizballah, nonetheless, have dramatically
different visions of Lebanon's future. Both are
committed to the improvement in the political status
of the Shia community, but they see the fulfillment of
their efforts in settings that are fundamentally
incompatible.F---]
Amal has a secular political orientation. It is
committed to the survival of a unified Lebanese state,
and its adherents seek their political destiny within
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NESA NESAR 85-024
8 November 1985
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the context of the Lebanese political system. Amal
seeks, ultimately, an end to sectarian politics in
Lebanon and redress of longstanding Shia grievances
through constitutional means.
Hizballah is committed to the establishment of an
Islamic republic in Lebanon and sees the eradication
of Western, particularly US, influence as the first step
in that process. Hizballah has had some success in its
attempts to outbid Amal in the competition for the
support of Lebanese Shias through its extensive social
welfare programs. Its most powerful drawing card,
however, has been the spectacular suicide operations
against the United States and Israel and its
surrogates
Amal and Hizballah are separate and distinct
movements in terms of structure, policies, tactics, and
ultimate goals. Amal, nonetheless, is riddled with
Hizballah sympathizers seeking to undermine Nabih
Barri's leadership and the movement's secularist
approach. The example of the Iranian revolution and
the experience of Israeli occupation have transformed
a growing number of Lebanon's once politically
despondent Shias into zealots determined to establish
Shia supremacy by whatever means necessary.
Hizballah's attraction stems from its brazenness in
carrying out daring operations that Shia rank and file
perceive as singlehandedly reversing US and Israeli
policies.
Hizballah sympathizers and covert adherents within
Amal have been identified at every level of the
organization from relatively minor military officials
to principal deputies of Amal chief Nabih Barri.
Despite the relationship of many Amal officials with
Hizballah, we believe that very few extend that
commitment to the establishment of a theocratic state
in Lebanon.
In our judgment, the senior and more politically
astute Amal figures perceive Hizballah as an effective
mechanism for asserting Shia influence on the
Lebanese domestic political process, and possibly, in
seizing power. Hizballah also serves as a foil for those
who accuse Barri of perverting Amal's goals and of
selling out the aspirations of the movement's founder,
the venerated Imam Musa Sadr.
The largely unsophisticated Shia masses probably
cannot differentiate the antithetical nature of Amal
and Hizballah aspirations. They are, however,
impressed by the apparent success of Hizballah's
tactics as opposed to the relative ineffectualness of
Amal's political program. Their affinity for Hizballah
is reinforced by the preachings of Iranian-trained
clerics who wield extraordinary authority over their
followers.
Loyalty and Leadership: Ties That Bind
The doctrine of clerical authority is central in shaping
patterns of loyalty among Shias. The Shias believe
that their clerics are endowed with spiritual power, an
article of faith that obligates all believers to follow the
rulings of the living ulema. Historically, Shia clerics
have been the focal point for political and social
protest movements in the Middle East challenging the
legitimacy of Sunni orthodoxy and its monopoly over
the mechanisms of state authority. As a result, the
prestige of the ulema has been enhanced because it
has become an established tradition that ulema who
are subservient to temporal authority are spiritually
inferior. These factors have resulted in a religious
hierarchy that can take independent positions and
lead independent movements.
The Shia religious hierarchy in Lebanon is tied to that
of Iran in both a religious and kinship sense. Lebanese
clerics receive their training in Iran or in Shia holy
cities in Iraq, where they become the disciples of
prominent Iranian theologians. Moreover, extensive
intermarriage between Iranian and Lebanese clerical
families has produced powerful theological dynasties
that have promoted-and will continue to promote-
solidarity between Iranian and Lebanese Shias as well
as purvey political influence
Amal, on the other hand, is a broad-based overt
organization that has been part of the Lebanese
political process for more than a decade. As such, it
reflects the same personal animosities and internal
factionalism of other Lebanese parties. Dissatisfaction
with moderate Amal leaders is spreading as increased
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awareness of Shia identity has led to growing
impatience among younger Amal activists fed up with
Amal's gradualist policies.
for implementing Iranian policy in Lebanon and for
overseeing Hizballah activities there. Hamza and
Dirani are principal supporters of Barri's rival,
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Within Amal, personal rivalries are high. We believe
that at the senior leadership level it is these rivalries-
rather than strictly ideological considerations-that
have spawned the close ties between senior Amal
officials and the Hizballah movement. Nonetheless,
power plays that depend for their success upon
Hizballah or Iranian support will produce a leadership
within Amal that is compromised by, and indebted to,
these radical elements.
The "Faithful" Within Amal
The "faithful" cadre within Amal-those
sympathetic to Hizballah and to the Islamic
government in Iran-are attempting to purge Amal of
its deviationist leaders and restore the movement to
what they perceive as the principles laid down by
Musa Sadr. The first objective is to remove Nabih
Barri from office.
The challenge to Barri is crystallizing on two levels.
Pro-Iranian radicals seeking to transform Lebanon
into an Islamic republic view Barri as a major
obstacle to their ambitions. He is also confronted by
personally ambitious challengers who, while not
committed to Islamic rule or Iranian hegemony in
Lebanon, are prepared to cut deals with Iran and
Lebanese fanatics to strengthen their own claims to
leadership.
Executive Committee head Hasan Hashem appears to
be Barri's principal rival for leadership of Amal. The
struggle between the two is personal rather than a
serious disagreement over policy or ideology.
Although both men were born in the south, Hashem
seems to draw most of his support from the Bekaa,
Hizballah's stronghold, giving the struggle serious
regional and ideological implications.
Barri has a number of lieutenants who are susceptible
to Iranian and Hizballah blandishments. The most
powerful Hizballah loyalists within Amal are Mustafa
Dirani, head of Amal security, and Zakariyah
Hamza, military chief for the Bekaa. Both maintain
close and continuing ties with Hizballah and with the
Iranian Ambassador in Damascus, who is responsible
Hashem.
Aqil Hamiyah, Amal's military chief for Beirut, is
another key radical figure within Amal. He maintains
some degree of loyalty to Barri but is also close to
Hamza Hamza
and Hamiyah are militarily capable of staging a coup
against Barri but probably are politically incapable of
maintaining the Amal organization as at least a
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been trying to oust are from areas that strongly
support Hamiyah and Hamza, including military
bosses in the southern Beirut suburbs who have close
ties to Hizballah spiritual guide Muhammad Husayn
Fadlallah.
Hamza, Dirani, and Hamiyah all hail from the
Bekaa-where Iranian and fundamentalist influence
is strongest. All three have maintained the
primitiveness associated with the Bekaa's tribalistic
social order, however, and epitomize the cadre of
thugs within Amal whose rapaciousness outweighs
their commitment to the Shia community, let alone to
the establishment of Islamic rule in Lebanon.
Nonetheless, under the right circumstances and for
the right price, any of them could be encouraged to
try to supplant their chief and lead Amal into an
alignment with Hizballah.
Hizballah and Amal: Terrorist Links?
There is no evidence linking Amal to terrorist attacks
carried out by Hizballah against US interests and
personnel in Beirut. It is clear, however, that extensive
and close contacts between Hizballah and individual
Amal members make unofficial, clandestine
cooperation a certainty. This has been confirmed for
resistance operations against Israeli forces and their
surrogates in south Lebanon and is highly probable in
the kidnapings of at least some US citizens. It is
unlikely, however, that Barri or other senior Amal
officials-except those directly involved with
Hizballah-would know of Hizballah plans in
advance.
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Although Amal does not espouse the virulent anti-US
rhetoric that has become a hallmark of Hizballah,
many Amal adherents are hostile to the United
States. US support for Lebanon's Christian-
dominated government, US support for the state of
Israel, and US hostility to the Islamic regime in Iran
are powerful motivators for young Shias. Most
probably would require little coaxing to participate in,
or at least cooperate with, Hizballah in anti-US
part of his overseer role, once Amal had interjected
itself into the hostage affair and agreement had been
reached between Hizballah and Amal to "share" the
hostages. Hamiyah was confident that he could take
actions.
The TWA hijacking last June was planned by
individuals with connections to Hizballah. Amal's
subsequent involvement in the hostage crisis is not
indicative of prior knowledge, cooperation, or
approval of Hizballah actions. We believe it was an
attempt by Barri to grab headlines from his detractors
and demonstrate his ability to deal effectively with
the United States and win concessions, in this case the
release of Shia prisoners in Israel, for the Shia
community.
Barri's deputy Aqil
Hamiyah accompanied Hizballah members on daily
visits to those hostages who were held separately from
the main group. We interpret Hamiyah's presence as
Hizballah sympathizers responsible for the planning
and execution of the TWA hijacking undoubtedly
resent being upstaged by Barri and Amal. The
carefully orchestrated press extravaganza
surrounding Barri's mediation effort and Amal's
public relations coup with the US hostages burnished
Barri's and Amal's credentials within the Shia
community and portrayed Amal to the world as the
legitimate champion of Shia rights.
Overwhelming evidence indicates that Hizballah was
responsible for all of the kidnapings of US citizens in
Lebanon. There is no evidence linking the Amal
organization to the kidnapings. In our view, however,
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it is highly improbable that Hizballah could move
kidnap victims between Beirut and the Bekaa without
the knowledge and probable participation of some
Amal officials.
Zakariyah Hamza and Mustafa Dirani, by virtue of
their key positions and close ties to Hizballah, are
likely candidates for cooperation with Hizballah in
this type of operation. We believe it would be difficult
for the hostages to be maintained in Beirut for any
length of time without the cognizance of at least one
of these officials.
Outlook
It is impossible to sever the links between Amal and
Hizballah. Despite the organizational separation of
the movements and their competitive and frequently
hostile relations, they are inextricably linked through
a myriad of informal networks based on family ties,
ideological beliefs, and personal rivalries. Barri is
aware of the threat, but his attempts to counter
radical influence within Amal have served instead to
further alienate his opponents and enrage their
followers.
Barri is fighting for his political life in an organization
that is susceptible to the influence of Shia extremists
who are implacable enemies of the United States. If
Barri loses power and his moderate policies are
repudiated by his successors, the United States will
lose its only avenue into Lebanon's vitally important
Shia community. Unless Amal can deliver tangible
political successes to the Shia community that would
diminish Hizballah's attraction, Amal has few
prospects of surviving as a moderate secular
organization.
Shia political demands cannot be fulfilled within the
Lebanese context as long as a political modus vivendi
eludes factional leaders. Despite Hizballah's inroads,
we believe that Amal continues to represent the
aspirations of the majority of Lebanese Shias. The
longer Shia frustrations fester, however, the more
irrelevant those distinctions will become. Rivalry
between Amal and Hizballah may impel both toward
greater participation in terrorist acts-especially
against Israel but also against the United States-in
response to escalating demands for proof of
commitment to the Shia cause
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The Shia Amal Militia: S ry ia's
Trump Card in Lebanon?
Syrian efforts to gain influence with Nabih Barri's
Amal militia by providing arms and training seem to
be intended to preserve Syria's options while parallel
political moves are made to restore stability in the
greater Beirut area and foster political reform. In
recent weeks Damascus has appeared committed to
designing a security plan for Beirut that would end
fighting in the city and encourage Lebanese factional
leaders to invite Syrian troops into the capital as
peacekeeping forces. At the same time, Syria is trying
to persuade the major Lebanese militias to surrender
their heavy weapons. Its parallel pursuit of earlier
plans to transform the Shia Amal militia into a
stronger and more dependable fighting force,
however, suggests Syria is preparing to use Amal
against Lebanese factions that oppose Syrian
objectives.
Plan To Reorganize Amal
Syria's delivery of Soviet-made T-55 tanks to Amal
late last July was the most visible sign that Damascus
had decided to favor Amal over other Lebanese
Muslim factions.
Aqil Hamiyah, Amal military chief for the Beirut
region and a trusted Barri adviser, proposed to the
Syrians earlier this year a plan to transform the
militia into three separate brigades. According to
Hamiyah's plan, a brigade would be based in each of
Lebanon's three predominantly Shia areas-West
Beirut, the Bekaa Valley, and south Lebanon. F_
Syria's continued involvement in reequipping and
training Shia militiamen evidently is part of its
strategy to keep its options in Lebanon open. With the
cynicism only a seasoned participant in Lebanese
affairs could have, Syria may be calculating that
Lebanese factional leaders-who are preoccupied
with doublecrossing each other-will be unable to
agree to any of the conditions in its proposed security
plan for Beirut. In the meantime, Syria undoubtedly
recognizes that it needs a capable surrogate in
Lebanon to avoid sending its own troops into
troublespots where it has interests.
Shared Concerns
Regardless of the outcome of the political talks, Syria
and Amal leader Nabih Barri will continue to share
many of the original motives for their plan to
reorganize the Shia militia. Their overlapping
concerns stem from several major developments since
at least early 1984 that have weakened Syria's control
over previously responsive factions and have indicated
that the Amal militia is losing ground in the Lebanese
power struggle.
Closer Druze-Soviet Ties. One key development was
the emerging Soviet military assistance relationship
with the Druze militia, traditionally a Syrian
Although tanks
Lebanese surrogate.
are not suitable in the mountainous Druze-controlled
Shuf area, they gave the militia the ability to take
control of flatter terrain. This alarmed the Shias
because the Druze, less dependent on Syrian approval,
then extended their area of control to include the
coastal road between the Shia southern suburbs of
Beirut and predominantly Shia south Lebanon. For its
part, Damascus no longer could count on Druze
leader Jumblatt to do its bidding and needed a new
Spreading Iranian Influence. The growing influence
of pro-Iranian radical Shias in traditional Shia
areas-the Bekaa Valley, south Lebanon, and the
southern suburbs of West Beirut-also has concerned
both Syria and mainstream Shia Amal leaders. In the
Secret
NESA NESAR 85-024
8 November 1985
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past year, radical Lebanese Shias affiliated with
Hizballah have used Iranian-supplied funds, food,
medicines, and literature to convert their
impoverished Shia compatriots to Khomeini's
vengeful brand of Islam. Amal fighters are poorly
paid and could find more profitable employment in
the ranks of Hizballah, which provides generous
support for the families of its militiamen. The
increased number of radical Shia attacks against the
Israeli-supported Army of South Lebanon and Israeli
patrols in south Lebanon deeply concerns southern
Lebanese Shias who fear Israeli retaliation will
ultimately force them to evacuate their homes. F_
Syrian President Assad evidently hopes that a
reorganized and better equipped Amal militia will
attract the support of more Lebanese Shias and check
the spread of Iran's influence in Lebanon. Syria's
concern over radical Lebanese Shia activity is
prompted by terrorist acts aimed at the West and
Hizballah-Iranian activities in the Bekaa Valley,
where about 15,000 Syrian troops are stationed near
the radical Shia stronghold in Baalabakk. Assad has
exercised little control over their activities because he
fears rupturing relations with Iran, which provides oil
to Syria, and because their terrorist activities against
Israeli surrogates in south Lebanon serve Syrian
interests without directly involving Syria. He almost
certainly realizes, however, that growing Iranian
influence among Lebanese Shias will weaken Syria's
power in Lebanon.
The Palestinian Problem. The performance of the
Amal militia during the heavy fighting with the
Palestinians last May and June helped convince
Syrian leaders that it needed improvement. The Shia
militiamen tried to rout Palestinian fighters from the
refugee camps in West Beirut, but stiff Palestinian
resistance and a fortified network of tunnels under the
Damascus believes no security plan will take hold in
Beirut unless Amal can first bring pro-Arafat
Palestinians in the camps under its control. The
Palestinians and a myriad of small Lebanese militias
are not parties to the negotiations with Damascus and
could easily play a "spoiler" role in any cease-fire
effort.
Outlook
Syria probably views its efforts to strengthen the
Amal militia as a prerequisite to any viable security
arrangements for Beirut. Damascus is willing to send
its troops into the war-ravaged Lebanese capital,
but only when the major
factions agree to a cease-fire and invite Syrian troops
to patrol both Christian East and Muslim West
Beirut-conditions not likely to be met. Damascus
probably calculates that a strong Amal militia could
effectively police West Beirut, obviating the need for
a sizable Syrian troop deployment. If it deploys troops
to Beirut, Damascus almost certainly would use the
Amal militia to control smaller militant factions and
limit Syrian casualties.
Closer Syrian-Amal ties also would bolster Syria's
ability to control events outside Beirut without
involving its own troops. The Syrians probably would
try to use the three Amal militia brigades in south
Lebanon, the Bekaa Valley, and West Beirut against
other Lebanese factions opposed to Syrian interests.
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Finally, developing Barri's militia is likely to
compensate for Syria's loss of influence with the
Druze and preserve its ability to manipulate events in
Lebanon.
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Lebanese Affairs
Recent suicide bomb attacks in south Lebanon by
members of the Syrian Social Nationalist Party
(SSNP) against Israeli and Army of South Lebanon
targets have moved this obscure group into the
Lebanese political limelight. Syria has found in the
SSNP an effective, versatile, and willing surrogate to
accomplish its objectives of confronting Israeli
occupation forces and punishing recalcitrant
Lebanese factions who fail to toe the Syrian line.
The SSNP probably hopes its subservience to Syria
will promote its rise to political prominence. The
SSNP's recently acquired notoriety has helped attract
new members from a variety of sects throughout
Lebanon. Although the SSNP remains a minor party
in terms of its geographic and political base, it stands
to enhance its influence significantly through close
attachment to Syrian policy objectives in Lebanon.
The SSNP is a political enigma whose motivations
and doctrine are fraught with contradictions.
Although its members are mostly Greek Orthodox
Christians, it is a secular party whose primary
adversary has traditionally been the Christian
Phalange Party. Neither the SSNP's Christian base
nor its secular philosophy accord with suicide
bombings, typically a tactic of religious extremists.
Even though it is one of the most pro-Syrian parties in
Lebanon, the SSNP has been banned in Syria for the
last 30 years.
The size of the SSNP militia has grown in the last
year as has its role as a militia spearhead in
campaigns where Syria has been reluctant to commit
its own troops. At Syria's behest, the SSNP has
fought alongside factions as diverse as the mainstream
Shia Amal in the war of the Palestinian refugee
camps in Beirut and the Arab Democratic Party in
A History of Tumult
The SSNP (originally known as Parti Populaire
Syrien) was founded in 1932 by a Greek Orthodox
Lebanese, Antun Sa'da, who formed his organization
into a pan-Syrian, paramilitary, Fascist youth
movement. The SSNP agitated against French rule
and subsequently the Lebanese Government until the
party was accused of subversion in 1949, resulting in
Sa'da's execution and the disbanding of the party.
its principal activists jailed.
Many SSNP members relocated to Syria, where they
formed a rightwing party that immediately became
unpopular with the ruling Sunni Muslim elite. The
party was eventually banned in Syria, following the
assassination in 1955 of a popular Alawite officer by
an SSNP member. The SSNP returned to Lebanon,
where it became implicated in a coup plot in 1961
resulting in its being driven underground and many of
In the 1960s and 1970s the tenets of the SSNP were
almost completely reversed. The notion of a Greater
Syria was abandoned in favor of the pan-Arab
ideology that was ascendant throughout the Arab
world. The party rallied to the cause of the
Palestinians in the aftermath of the 1967 Arab-Israeli
war and formed a close association with the PLO.
Formal Structure
The SSNP was again legalized in Lebanon in 1970,
and thereafter it worked to organize itself primarily in
Greek Orthodox enclaves in Al Khoura and the upper
Matn. A party apparatus was set up in these areas in
accordance with the party's constitution, which has
gone through various incarnations through the years.
With some exceptions the party's operations seem to
follow the spirit if not the letter of its constitution with
regard to selecting leaders and forming policy.F_~
Secret
NESA NESAR 85-024
8 November 1985
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The highest SSNP decisionmaking body is the
Supreme Council, composed of approximately 12
members. Trustees of the party, who are themselves
appointed by the Council, elect the members of the
Council and the president every three years. The
president of the Council exercises executive power and
is the commander of the militia.
The party depends on local administration to carry on
day-to-day operations. The party is administratively
divided into several regions, and its members are
organized in village and neighborhood sections.
in areas where it has taken
over undisputed control, such as in Al Khoura, the
SSNP has assumed the responsibilities of civil
Although the Syrians were generous in supplying
arms, they balked at allowing the party to reestablish
itself in Syria.
When the Israelis began to withdraw from Lebanon,
the SSNP competed with other factions for territory
in the Shuf and West Beirut. Despite its professed
commitment to cooperate with other Syrian-backed
militias, some within the SSNP feared that the Shia
Amal and Druze militias would attack Greek
Orthodox villages in the south. The relatively small
size of the SSNP militia, however, gave them little
choice but to seek a modus vivendi with these militias
in the hope that Syria would protect SSNP interests.
administration.
War and Opportunity
The SSNP viewed the outbreak of the Lebanese civil
war as an opportunity to further its political ambitions
by fighting for the abolition of the confessional system
of government. After some initial dissension among
rightwing and leftwing groups in the party, the SSNP
joined other leftist militias against Christian forces.
Although the SSNP relied on the Syrians for support,
they maintained their political autonomy despite
repeated Syrian attempts to co-opt them.
Syria Calls the Shots
As Israeli ground forces withdrew from areas where
SSNP operation centers were located, party policy fell
increasingly under Syrian influence. A split within
Fatah dried up a substantial source of aid to the
SSNP, and party leaders were forced to abandon their
pro-Arafat allies in favor of pro-Syrian Palestinian
groups to restore this funding. In addition, differences
between Libyan leader Qadhafi and Syrian President
Assad over the Palestinian split resulted in Syria's
cutting off Libyan arms and money to the SSNP.
Resurrected From the Ruins
The Syrian retreat in the face of invading Israeli
forces in 1982 created dissatisfaction among SSNP
members with their political bosses. Party members in
the north remained under Syrian control, but SSNP
leaders in the south began to direct their operations
with Libyan aid and Palestinian support. An Israeli
service reports that the SSNP, together with other
leftwing political groups who comprised the so-called
Lebanese Resistance Front, undertook rear-guard
actions and guerrilla tactics as a means of combating
Israeli occupation forces.
In the aftermath of its humiliating defeat, Syria chose
to rely on the SSNP and other factions to press the
attack against Israeli occupation forces in south
Lebanon. At Syria's invitation, SSNP leaders began
making frequent trips to Damascus in the summer of
1983 to seek military assistance and political support.
As the Syrians reestablished their preeminence in
Lebanon in 1983-84, more SSNP leaders accepted the
practicality of subordinating their interests to Syria.
The SSNP could thereby safeguard its source of
arms, reduce its vulnerability to larger militias
aligned with Syria, and be in a position to be included
in a reconstituted Lebanese Government.
The participation of the SSNP militia in the war of
the camps last May created controversy in the ranks
and strained Syrian-SSNP relations. According to
press reports, elements within the party sympathetic
to the Palestinians were given an ultimatum by pro-
Syrian members, with implicit Syrian backing, to toe
the line or be purged. The members of the SSNP
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Supreme Council eventually agreed to an alliance
with Amal probably for practical reasons rather than
ideological ones.
The SSNP has added to the drama of these attacks by
broadcasting videotaped interviews with the suicide
bombers on Syrian television shortly after the attacks.
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New Militancy
The SSNP's alliance with Amal, as part of Syria's
loose coalition of Lebanese factions, has afforded it
the opportunity to carry out frontline military
operations against Israeli and ASL positions in south
Lebanon. Although many of these attacks have
questionable military value, the spate of suicide car
bombings has given the Israelis and the ASL cause
for concern
In the past several months, spectacular operations
have been carried out by the SSNP in south Lebanon:
? 12 March-A suicide attack south of Jazzine. The
person carrying out the attack was a Druze from the
Sofar region. There were no other casualties.
? 9 April-A suicide attack in Batr A-Shuf. It was
carried out by a female Shia from the village of
Aqnun in south Lebanon. Two other people were
killed, and two were injured.
Despite the SSNP's multiconfessional composition,
there have been no reported instances of confessional
strife within the militia or the party. There is no
evidence that the SSNP has had difficulty sending
militiamen against their confessional brethren
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Decision From Below
Available evidence indicates that the decision to
embark on a suicide bombing campaign was made by
lower level officials in the SSNP who advocate a more
militant role for the party. Led by As'ad Hardan, the
SSNP commander for resistance operations in south
Lebanon, this faction has sought to promote its point
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? 9 July-A suicide attack in the Hasbayya region. It
was carried out by a 20-year-old Syrian from
Aleppo. His religious affiliation is unknown. Two
ASL men were killed and three wounded along with
eight civilian fatalities.
? 9 July-A suicide attack in Biyada carried out by a
female 28-year-old psychology student at the
University of Beirut. She was posssibly a Druze
from the Shuf. There were two wounded Israeli
soldiers and two ASL wounded.
? 6 August-A suicide attack against Israeli military
headquarters in Hasbayya. It was carried out by a
23-year-old man whose origins and religious
affiliation are not known. The attack was carried
out on an explosives-laden donkey and resulted in
the attacker's death.
? 4 November-A suicide car bomb attack against an
Israeli patrol in Arnun. The driver was a 24-year-
old Syrian from Baniyas. Three people were
reported killed and two injured in the attack.
Syria, realizing the propaganda value of these attacks,
tacitly supported Hardan despite opposition from
some party leaders who resented his renegade tactics
and feared Israeli reprisals. Press reports-
ndicate that the Syrians aided Hardan in
eliminating his staunchest critic, SSNP Defense
Minister Muhammad Salim, whose shooting death in
Jdita on 3 July is still shrouded in mystery. The
Syrians, however, headed off Hardan's subsequent
power play against the largely pro-Syrian Supreme
Council in the interest of party stability
Syria's claims that it is not involved in the suicide
attacks are probably false.
By denying
responsibility for these attacks, the Syrians hope to
portray them as expressions of Lebanese resistance to
Israeli occupation and thus avoid Israeli reprisals.
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Prospects
The SSNP's political and financial reliance on Syria
virtually assures its compliance with Syrian directives
for the near term. The SSNP will continue to
ingratiate itself with the Syrians through self-sacrifice
in the hope of enhancing its role in a future Lebanese
political settlement. SSNP compliance will also deter
the Syrians from intervening directly in the party's
political processes.
The Syrians will probably encourage greater use of
SSNP suicide bombers as a means of eroding Israeli
will to remain in south Lebanon. The Syrians,
however, will probably insist on a greater role in the
planning and execution of suicide attacks to
coordinate them with similar attacks by other leftist
Lebanese factions.
Syria is likely to increase its use of the SSNP to prod
intransigent factions to accept Syrian-sponsored
political reforms.
If a political settlement based on reform of the
confessional system emerges, the SSNP may attempt
to establish a canton in the areas it now controls in the
upper Matn and Al Khoura. In the meantime, the
SSNP will probably continue to attract new recruits
in the environment of chaos and confused loyalties
wrought by political instability in Lebanon
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Muhammad al-Imadi:
Syria's Economic Reformist
The recently appointed Minister of Economy and
Foreign Trade, Muhammad al-Imadi, gives Syria its
best hope to pull out of its Arab socialist economic
morass. Imadi is a well-respected economist who is
determined to reform the Syrian economic system.
Since assuming office last July, Imadi has pushed
through changes in Syria's restrictive foreign
exchange and import regulations and has developed
an extensive program to help revitalize Syria's private
sector. His economic philosophy and initial reforms
have stirred up opposition, however, because they
challenge the role of entrenched ideologues in the
Bath Party and public sector. Imadi appears to have
President Assad's support, and a senior financial
official told the US Embassy that Imadi will be
Deputy Prime Minister for Economic Affairs by the
end of the year
Imadi's Background and Philosophy
Imadi is a 55-year-old Sunni Muslim and was born in
Damascus. He was educated at Damascus University
and New York University, receiving a doctoral degree
in economics in 1960. He has held several economic
positions in the Syrian Government, including
Minister of Economy and Foreign Trade from 1972 to
1979, a relatively good period for Syria's economy.
During his first period as Minister of Economy, Imadi
applied his talent, energy, and economic philosophy to
rationalize the rigidly state-controlled economy. With
Assad's backing he introduced a series of measures to
decentralize the system. Through his personal skills
and extensive contacts, he succeeded in attracting
capital from private investors and Western
governments. He was also credited with stanching the
outflow of people and capital from the country that
had been provoked by the imposition of Ba'thist
socialism in 1963. Imadi's first period in office ended
with the economy sinking under the weight of Syria's
military involvement in Lebanon and his
liberalization policies under fire from party leftists. In
April 1979 he accepted an appointment as head of the
Development.
An assessment of Imadi's performance by US
Embassy officers in 1979 suggests that, despite his
good intentions, he lacked either the will or the clear
mandate to fully execute his policies. This assessment
characterized him as a "left-of-center Keynesian
economist" who measured economic progress solely in
terms of consumption. More importantly, Imadi
apparently lacked the political backing to overcome
his opposition, which included party ideologues and
others, such as the President's brother Rif`at, who
profited from the existing system
The US Embassy in Damascus currently describes
Imadi as a highly respected technocrat known for his
laissez-faire philosophy and his pragmatic approach.
He is well liked by the Syrian business community
and appears to have regular access to President
Assad. In August the Embassy reported that a highly
placed official stated that Imadi was meeting daily
with the President and getting along well with him.
The Embassy also reported that Imadi quickly
initiated studies on:
? Stimulating investment and production by
subjecting public-sector companies to greater
competition.
? Encouraging private investment in a broader range
of mixed public-private ventures and even in purely
private enterprises.
? Reform of the highly artificial exchange rate for the
Syrian pound.
? Reduction of the large-up to 110 percent-deposit
required by the Syrian Commercial Bank for
foreign exchange letters of credit to pay for imports.
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NESA NESAR 85-024
8 November 1985
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In a wide-ranging conversation with the US
Ambassador in September, Imadi expressed his strong
commitment to increasing reliance on the private
sector. At the same time, he "conveyed a sense of self-
confidence that he has the influence to achieve
reform." Imadi stressed that he was not against the
public sector but that the majority of the Syrian
people remained in the private sector, and it was
simply good sense to solicit their capabilities for
Syria's economic development.
Imadi stated that his current priorities were to
identify sectors in which private investment could be
encouraged and to place emphasis on mixed
private/public-sector companies as a means of
mobilizing private capital. When questioned
concerning Syria's multiple exchange rates, Imadi
agreed that they are "the biggest mess." He
confirmed that exchange rate reform is a high priority
for him and that Syria should have a single rate. He
conceded that such a reform will be very difficult and
will not be accomplished overnight.
Initial Reforms
Since Imadi assumed office last summer, there have
been some reforms of the Syrian economic system. In
highly publicized announcements in September, the
Syrian Government increased civil servant wages and
retiree benefits and increased fuel allowances for
government employees. At the same time, with less
publicity, the government cut its subsidy of certain
commodities by raising prices of fuels from 25 to 75
percent and by, raising prices of sugar, tea, and
cigarettes by 33 to 100 percent. In a subsequent
conversation, Imadi alluded to these increases-and
government budget reductions-as harsh but
necessary medicine to get the Syrian economy back on
its feet.
The government has also reduced the deposit required
of private firms for imports of capital goods from 110
percent of their value to 50 percent. There have been
rumors that Imadi will soon reduce the rate to 20
percent. Imadi has also pushed through decrees
liberalizing private-sector imports of raw materials,
spare parts, and agricultural commodities. F__1
circulated a four-year economic reform plan that
substantially expands the role of the private sector in
the economy. The plan, approved by President Assad
and the Cabinet, calls for:
? The free import of all goods by the private sector.
? Private-sector manufacturing in any sector of the
economy.
? Private-sector investment in and joint business deals
with public-sector companies.
? Private-sector import of foreign currency without
restrictions.
? The encouragement of foreign investment,
especially by Arab governments and Syrians living
abroad, in the Syrian private sector.
? Central bank guarantees of foreign investment in
the Syrian private sector.
Imadi's Opposition
Imadi does not have a free hand in implementing his
reform proposals, and he faces opposition from several
quarters. He is politically vulnerable in a regime
dominated by minority Alawi Muslims, including
some steeped in Ba'thist socialism. This vulnerability
is amplified by his liberal economic views and his
openness toward the United States. Imadi's plans
contrast sharply, for example, with the economic
policy statement delivered by Prime Minister Kasm in
May. At that time, Kasm made clear his view of the
continued primacy of the public sector and the need
for stringent government regulation of the economy.
Imadi's policies have also raised opposition in the
leftist, particularly Communist, press, and he will
have to overcome objections from hardline Ba'thist
socialists. In addition, economic reform will
undoubtedly encounter opposition from a recalcitrant
section of the civilian bureaucracy and from public-
sector managers who have vested interests in
maintaining the status quo. Imadi appears to have the
high-level backing necessary for reform, however, as
the abysmal state of the Syrian economy cries out for
remedial government action
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Egypt: Financing the
Muslim Brotherhood
The Muslim Brotherhood in Egypt is primarily
financed through its legitimate local businesses.
Additional funds are received from sympathizers and
expatriate Brothers in Saudi Arabia, the Arab Gulf
states, and Western Europe. Some funding is obtained
through the exchange of US dollars in the black
market.
The Muslim Brotherhood is Egypt's oldest and largest
fundamentalist organization with an estimated .
500,000 members and sympathizers. Over the last
several years, it has discarded violence in favor of
moderate tactics designed to achieve a more
conservative Islamic state living under the rule of
sharia (Islamic law)0
The Brotherhood in Business
The Egyptian Government has unintentionally
subsidized the Brotherhood's modern business
activities.. According to the US Embassy in Cairo, all
Brotherhood members imprisoned by President Nasir
in the 1950s and 1960s were given 1,000 Egyptian
pounds (about $1,300 at the current rate of exchange)
for each year they were confined. Upon their release
in the 1970s-some leaders served nearly 20 years-
this money was pooled and invested in small
businesses. Several of these businesses have prospered,
due in part to the boost Sadat's "Open Door"
economic policies gave to private enterprise.
To avoid government interference or takeover of their
enterprises, the Brotherhood usually forms
partnerships with businessmen who are not members
of their organization. Part of the companies' profits-
including money from overstated expenses-is
donated to the Brotherhood. Most of the firms recruit
and hire Brotherhood members.
major businesses
? Arab contractors. Now nationalized, it is Egypt's
largest construction company. Through its manager
and former owner, Usman Ahmad Usman, the
company maintains ties to the Brotherhood.
Usman-believed to be a senior Brotherhood
member-was President Sadat's confidant and
former Minister of Construction. The company
employs many Brotherhood members and has
controlling interest in about 40 other companies in
Egypt and abroad that also support the 25X1
Brotherhood.
? Faisal Islamic Bank of Cairo. Owned by a Saudi,
but managed by an Egyptian, Ahmad Ali Kamal.
Kamal is an active Brotherhood member
The bank often
overstates investment or advertising expenses to
cover donations to the Brotherhood. Kamal and
other Brotherhood officers of the bank also give
money from padded expense accounts to the
Brotherhood, and many sympathetic investors give
their share of the bank's profits to the Brotherhood.
? Al-Shari' Group. A holding company owned by a
longtime member of the Brotherhood
0 It has five factories in Egypt including a
major pipe and plastics producer.
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? Al-Salam Group. Owned by a longtime
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companies in Egypt
Black-Market Dollars
The Brotherhood also raises money by selling US
dollars on the Egyptian black market. 25X1
a Brotherhood leader annually travels 25X1
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members and benefactors. The hard currency is then
sold on the Cairo black market at between 25 and 50
percent higher than the official exchange rate.
Secret
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Financial institutions:
? Islamic International Bankfor Investment
? Al-Huda Companyfor Investments
? Faisal Islamic Bank of Cairo
Construction and manufacturing:
? Arab Contractors
? Al-Nasr Steel Works
? Al-Mutahida Construction
? Al-Fatah al-Islami Companies
? Al-Manzalaw Commercial and Industrial
Company
? Hammad Organization
? Al-Mustofa Furniture Center
? Al-Sharif Group
? Hilal Group
Trade and services:
? Groppi Company: cafeterias and restaurants
? Al-Rayan Organization: transportation
? Furniture al-Salam
? Handassia Car Company: Mercedes-Benz agency
? New Mimex Company: iron and wood imports
? Tulba al-Attar Stores: spices and perfumes
? Vert Hayim Stores and Company: clothing and
textiles
? Al-Kasrawi Company: Toyota cars and trucks
? Ismail Ali Company: Egyptian rug exports
? Arabi Company: Toshiba appliance distributor
? Al-Ahram Stores: television and appliances
? Al-Mughir Stores: machinery
European Connection
The bank accounts of Islamic cultural and religious
centers in West Germany are collecting points for
money that is funneled to the Brotherhood in Egypt
and elsewhere, Funds
come from individual benefactors in Saudi Arabia,
expatriate Egyptian Brothers, and sympathetic
Muslims living in Europe and North America.
Prospects
We believe that the Muslim Brotherhood's broad
financial base will allow it to survive almost
indefinitely. Although the Mubarak government is
chiefly concerned with the resurgence of radical
fundamentalist groups, such as al-Jihad, Takfir wa
Hijra, and Jama'at Islamiya on university campuses,
the Brotherhood has the organization and money to
outlast the radicals and to sustain pressure on the
government for legal recognition and a more
conservative Islamic outlook in Egypt. Even if
President Mubarak grows wary of the Brotherhood,
the government will find it costly to suppress the
organization's legitimate businesses because they are
usually linked to politically influential non-
Brotherhood partners.
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Iraq: Rivalry for Control of the
Intelligence Establishment
The struggle to control Iraq's intelligence services has
tested the political influence of President Saddam
Husayn and created rifts within his own clan, the
Tikritis. A central figure in the contest has been
Saddam's half brother, Barzan al-Tikriti, who was
director of the elite intelligence organization,
Mukhabarat, from 1979 until 1983. Barzan initially
was effective in protecting Saddam's interests, but the
President grew to mistrust him and removed him.
Many in Saddam's regime welcomed Barzan's ouster,
but we believe that Barzan and his followers will
reassert themselves at the first opportunity. F___]
Background
Saddam Husayn created Mukhabarat (Mudiriyat al-
Mukhabarat al-Amma) in 1969 as the security organ
of Iraq's ruling Bath Party.' He appointed as its first
director a trusted lieutenant, Nazim Qazar, but in
1973 Qazar betrayed Saddam by attempting a coup.
According to press reports, the betrayal shocked
Saddam and caused him to exercise tighter control
over the powerful intelligence agency. In 1979, when
Saddam became President, among his first acts was to
appoint his half brother, Barzan, as director of
Mukhabarat.
Barzan initially proved effective as director. He
destroyed the infrastructure of the Iraqi Shia
opposition group, Dawa, rendering it practically
incapable of functioning inside Iraq. He also drove
Iraq's Communist Party underground and dispersed
the leadership of the Kurdish opposition movement
into exile in Iran and Syria.
In 1980, however, Barzan appointed several family
members to top posts in Mukhabarat.
By 1982, Barzan controlled-along with
Mukhabarat-several related security units,
including the internal security agency (Mudiriyat al-
Amn al-Amma) and military intelligence (Mudiriyat
al-Istikhbarat al-Askariya). This made him the virtual
"czar" of Iraq's intelligence establishment, a
bureaucracy of several thousand officers and agents
with a budget of millions of dollars. US diplomats
regarded Barzan in 1982 as the second most powerful
man in Iraq and the likely successor to Saddam
According to US diplomats, the prospect of Barzan's
becoming president alarmed a number of high party
leaders and military commanders, who hated and
feared Saddam's half brother. Barzan had encroached
on the authority of both the party and the Army.
Leaders who tried to frustrate Barzan's power plays
were arrested on charges of disloyalty to the regime.
The diplomats reported that a majority of the
Revolutionary Command Council (RCC), Iraq's
highest governing body, demanded in the summer of
1983 that the President dismiss Barzan. The demand
initially proved unsuccessful.
Barzan's Fall
Nonetheless, Saddam apparently mistrusted Barzan
and was waiting for a more opportune time to move
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intelligence officials, who viewed the appointees as
incompetent. Nevertheless, few spoke out, believing
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that Saddam had approved Barzan's actions-F
Husayn Kamal al-Majid, to check on Barzan's
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' Ahmad Hasan Bakr, then President, was ill and left much of the
running of the government to Saddam j
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Saddam intensified the surveillance by appointing his be rehabilitated at a later date. The disaffected
son Uday to be Barzan's deputy
Tikritis thus remain a potential threat to the regime.
In October 1983, Saddam announced the marriage of
his daughter to al-Majid, an action that produced Moreover, the patriarch of the Tikriti clan, Telfah,
violent recriminations from Barzan.
Barzan confronted Saddam and, in an angry
exchange, demanded that the daughter marry
someone from his side of the family. Saddam refused,
and Barzan withdrew to his estate in Tikrit along with
two of his full brothers, Watban and Sabawi.
Barzan's action caused Saddam to remove him from
office.
After Barzan's removal, Saddam ordered a purge of
Mukhabarat. He discovered
the agency was largely composed
of Barzan loyalists. Barzan and his brothers had, in
effect, turned it into their personal power base. F--]
The Intelligence Apparatus Today
In the aftermath of the Barzan affair, Saddam
appeared to make an effort to pacify party leaders by
appointing Fadhil al-Barraq as director of
Mukhabarat. Al-Barraq is a protege of Sa'dun
Shakir, Iraq's Interior Minister, who also is a top
party leader and a member of the RCC.
Saddam has not, however, ceded control of the
intelligence services to the party. He has created a
special palace security unit and placed it under the
direction of his cousin al-Majid.
his unit is becoming a riva
to Mukhabarat. The internal security agency and
military intelligence also have received new directors.
Saddam appointed another cousin, Hasan Ali al-
Majid, to command the internal security unit, and a
leading Shia military officer, Mahmud Shakir
Shahin, has become head of military intelligence.
Barzan and his brothers Watban and Sabawi are still
in eclipse, but they have not been eliminated. Saddam
may be reluctant to execute his half brothers because
they retain influence with the Tikriti clan. It also may
suit his purposes to keep them on the shelf, perhaps to
has begun recently to speak out against the party,
Although Telfah has not attacked
Saddam explicitly,
hostility toward the President is clear.
1 Iraq's Bath Party supports a secular government in Iraq.
Although Ba`thists regard Islam as the preeminent faith in Iraq,
they reject mixing religion and politics
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Iraq's Dependence
on Foreign Labor
Iraq will remain dependent on foreign laborers during
the next few years regardless of whether the war with
Iran ends. Continuation of the conflict will require the
approximately 1.25 million foreign workers to
maintain output in agriculture, construction, and
industry. When the fighting ceases, we expect the
demand for labor as Iraq begins reconstruction will
translate into increased demand for foreign workers
because it is unlikely that Iraq will quickly reduce the
number of its military personnel. The number of
foreign workers in Iraq is likely to decrease sharply
only if oil revenues fall precipitously and foreign
payments pressures force Baghdad to sharply curtail
domestic spending and economic activity.
Impact of Oil Boom
Iraq's ambitious economic development efforts
following the oil boom in the 1970s created a
manpower shortage that forced it to greatly expand its
foreign labor force. Despite drawing large numbers of
Iraqis into the armed forces after 1979 to fight Iran,
Iraq forged ahead with its development program, and
the number of foreign workers peaked at about 1.8
million in 1982. As the war continued and oil revenues
fell from nearly $30 billion in 1979 to slightly under
$10 billion in 1983, the government curtailed
development efforts and imposed strict spending
limits. A cessation of new projects starting in 1982
caused an exodus of laborers as projects were
completed. For example, the number of Egyptian
workers dropped 30 percent in 1983, while the
number of Asian workers declined by 50 percent,
according to the US Embassy in Baghdad. After
1983, careful budgeting, continued aid from Arab
allies, and foreign debt reschedulings enabled Iraq to
start several postponed projects. The result was the
stabilization of the foreign work force at about 1.25
million, or more than one-fourth of the labor force.
Key Role of Foreign Workers.
in Agriculture and Industry
Iraq relies on foreign workers to sustain agricultural
and industrial production. Military requirements and
Foreign Workers in Iraq, 1985 a
United States, 4
Western Europe
the shift of population to cities have caused a severe
shortage of Iraqi farmworkers. According to press
reports, the 650,000 foreign agricultural laborers in
Iraq are equivalent to 70 percent of the native Iraqi
agricultural work force. The vast majority-
550,000-of expatriate farmworkers are Egyptians.
To recruit Egyptian farmers, Iraq has given hundreds
of Egyptian families free land, livestock, and homes,
according to press reports.
Several large irrigation and water conservation
projects under way are likely to keep Iraq's demand 25X1
for foreign farm labor high. For example, press
reports indicate that Chinese and South Korean
companies are working on irrigation projects in North
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Secret
Jazira. In addition, Iraq is continuing work on several
dams that will regulate river levels and provide water
for irrigation.
Foreign Workers Not a Security Threat
To prevent foreign workers from becoming a serious
security threat, Baghdad carefully monitors their
activities. Iraqis may be jailed if they do not report
immediately any act committed by a foreign worker
There are approximately 600,000 foreign workers in
Iraq involved in nonagricultural output, compared
with 2 million native Iraqi nonagricultural workers. A
shortage of technicians and less skilled workers
requires Iraq to use foreigners in industrial plants:
East European
technicians are being used for preventive
maintenance at several petrochemical and fertilizer
plants.
? Press reports indicate that there are 36 Chinese
technical and managerial teams working in Iraqi
factories.
? According to press reports, Swiss, Turkish, and
Indian companies manage, operate, and provide
technical training for several cement plants.
Although Baghdad has instituted education and
training programs to increase the skills of its work
force, foreign labor will continue to be used, especially
for petroleum and power generation projects:
? According to press reports, the Soviet Union has
signed a technical and economic agreement to drill
and develop the west Qurna and North Rumaila
oilfields.
? Also according to press reports, Italian and British
companies will build a degassing plant in the East
Baghdad oilfields.
? Press reports indicate that a South Korean firm is
involved in several power generation projects in
Iraq, including the $700 million Al-Musayyib power
station.
The extensive use of foreign workers has added to
Iraq's foreign exchange problems. Although Iraq does
not publish data on worker remittances, we believe
they could total as much as $3 billion per year. For
example, Egyptian remittances from Iraq may
approach $2 billion annually, according to the US
Embassy in Baghdad. To help control the outflow of
currency, an agreement with Egypt calls for
remittances to be channeled through Iraq's Rafidain
Bank. Baghdad periodically has tightened controls on
remittances to ease foreign exchange pressures but
has relented when foreign workers complain and
many foreign workers are questioned
before they travel outside Iraq and after they return.
Foreign worker complaints have been limited,
centering on economic issues, such as delayed pay,
and the war:
? The US Embassy in Baghdad reported that a
threatened strike in 1983 by 1,000 Indian workers
over delayed pay was averted when Iraqi authorities
threatened immediate deportation of all
participants.
? According to another Embassy report, Sudanese
serving in the Popular Army militia as rear-echelon
truckdrivers have complained about being forced to
stay at the front after transporting Iraqi soldiers
there.
Despite Iraq's severing of diplomatic relations with
Egypt in 1979, the Iraqi Government has been
particularly careful to avoid alienating Egyptian
workers, who are the largest component of Iraq's
foreign work force. The government has improved
working conditions for Egyptians since 1984 when
remittance restrictions were imposed and reported
cases of mistreatment caused thousands of Egyptians
to leave the country. Remittance restrictions
subsequently were eased, and, according to the US
Embassy in Baghdad, President Husayn has issued
orders that mistreatment of Egyptians will result in
severe punishment. According to press reports, senior
Egyptian and Iraqi officials recently discussed
proposals to foster ties between Iraq and its Egyptian
workers, including:
? The establishment of a Rafidain Bank branch in
Alexandria to speed remittance transfers.
threaten to leave Iraq.
25X1
25X1
25X1
25X1
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In February 1985, President Saddam Husayn
proposedforming an Institute of Production and
Automation to.focus on using robots in industry.
Iraq's goal is to use robots to replace. foreign labor
and to improve industrial efficiency. The institute is
to be headed by Dr. Hassan A. Salman, the only
Iraqi to hold a doctoral degree in robotics-from
Waseda University in Tokyo. The institute will be
part of the Ministry of Industry and have an initial
staff of 10. Initially, the institute will experiment
with robots for parts assembly and machining and
then use the results in a truck assembly plant. It will
then examine the use of advanced robots in
applications such as underwater oil exploration.
? A plan to set up joint-contracting companies.
? Giving priority to Egyptian contractors bidding on
projects in Iraq.
Outlook
The number of foreign workers in Iraq during the
coming years will depend on the course of the war
with Iran and on Iraq's foreign financial position.
Barring a financial crisis, the number of foreign
workers is likely to remain stable until the war ends as
the government proceeds with development projects
and continues drafting native Iraqis into the armed
forces. When the war ends, we expect the demand for
foreign labor will expand as Baghdad begins postwar
reconstruction. We believe that Iraq will remain wary
of Iran and that any reduction in military manpower
will be slight.
If oil revenues fall precipitously and foreign payments
pressures force Iraq to institute tough domestic
austerity, the number of foreign workers could fall
sharply. Should this occur, the Egyptian economy will
have difficulty reintegrating an influx of returning
workers. Cairo currently is reducing its public-sector
work force, and a large influx of workers from Iraq
could cause a sharp increase in unemployment. Egypt
would also experience further pressure on its already
inadequate supply of urban housing.
Over the longer term Baghdad is taking steps to
alleviate its dependence on foreign labor. Measures
include fostering the participation of women in the
work force, concentrating on capital-intensive
development projects, and improving worker skills.
According to Iraqi press reports, women comprise
about 25 percent of the work force, and their share is
growing. The US Embassy in Baghdad reports that
Bath Party officials have encouraged women to join
the work force and that the number of working
women will drop only slightly, if at all, once the war
Iraq is emphasizing science and technology training to
enable native Iraqis, both to replace skilled foreigners
and to operate capital-intensive equipment that can be
used to replace foreign workers. Baghdad continues to
stress education and training programs to raise skill
levels. In addition, Iraq is planning to establish a
robotics institute to study ways for robots to reduce
the number of workers in factories and increase
quality control. These efforts, however, will not lessen 25X1
Iraqi dependence on foreign labor any time soon.
25X1
25X1
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of Land Reform
Disagreements between radical and conservative
factions in Tehran have stymied efforts to implement
a major land reform program. The government has,
nevertheless, distributed land it owns and has tried to
improve agricultural conditions to strengthen rural
support for the regime and stem migration to urban
areas. The regime, however, has been unable to check
the influx of people into the cities, and some of its
policies have actually encouraged rural emigration.
Conservative opposition to major land reform and the
need to increase agricultural productivity are likely to
prevent significant redistribution of land to small
landholders in the near term.
Situation at the Outset of the Revolution
In Land and Revolution in Iran, Eric Hooglund
contends that, "the basic character of the agricultural
regime under the Shah-despite land reform-was
one in which a minority of owners derived profit from
farming by exploiting the labor of a majority of
villagers." Although some 2 million peasant families
received land under the Shah's land reform, 70
percent received less than the 7 hectares considered
necessary for subsistence. About 1.2 million
agricultural laborers throughout Iran received no land
at all. Hooglund found that among 400 villages in
northwestern Iran, 60 percent of the families received
no land, and the other 40 percent got less than was
needed for subsistence. One per cent of families
remained in control of 21 percent of the arable land.
Redistribution of land under the Shah was limited
partly because many farmers, unable to eke out a
living, were forced to sell out at low prices to large
landowners and migrate to the cities. In addition, the
government tried to improve agricultural efficiency by
evicting some 600,000 peasants from their land to
make room for large agribusinesses (each farming
over 5,000 hectares) and pressing some 300,000
peasants into joining agricultural cooperatives.
virtually every province of Iran. Many believed that
expropriation of land was essential to improve their
condition. A remark by a peasant in the village of
Khairabad reflects an apparently widespread
sentiment among the rural poor: "We continue to
struggle day and night for a piece of bread. If we all
speak of an Islamic Republic, then we must all be
equal; everyone who toils and suffers must also have a
living. At least things should not be such that we die
of hunger, while others are bursting with satiation."
Peasants probably carried out most of the seizures,
but landlords also reclaimed land they had lost under
the Shah's land reform. Government agencies such as
the Foundation for the Disinherited and revolutionary
committees in the provinces claiming to act on behalf
of the government seized some land as well.
Ideological Battle
Radical and conservative factions within the regime
have been deeply divided over the issue of land
reform. Many radicals see the issue as central to their
aspirations to transform the Iranian society and
economy. They have been influenced by clerical and
lay thinkers who, in the decades before the revolution,
developed an interpretation of Islam as an egalitarian
creed primarily concerned with social and economic
justice. These thinkers argue that Islamic law puts the
good of the community above the right to private
property. They further contend that Islam entrusts
the Islamic jurist with power over the acquisition and
disposal of property to help ensure that all members of
society get a just portion.
Conservative clerics view the more extreme land
reform proposals as violations of Islamic teaching
about the sanctity of private property. They and their
allies among the bazaar merchants fear that such
measures could serve as the opening wedge for an
attack on other forms of property. Middle-level
farmers and agricultural experts have sided with the
conservatives against the most sweeping proposals,
The Iranian revolution released long pent-up
dissatisfaction among Iranian peasants and
agricultural workers, and land seizures took place in
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arguing that these would break up highly productive Land Reform Legislation Since the Revolution
middle-sized farms.
These divisions were reflected at the beginning of the
revolution in the divergent reaction of local officials to
land seizures. In some areas ad hoc committees of
Revolutionary Guards and the local branch of the
Crusade for Reconstruction acquiesced in and
sometimes encouraged land seizures by peasants; in
other areas government officials opposed such actions.
Religious judges often sided with landowners against
peasant seizures. A judge in Fars Province told
peasants: "Just as these prayer beads belong to me,
the lands belong to their owners. You have no right to
trespass on them."
September 1979-Very limited in scope. Passed by
Revolutionary Council. Calls for distribution of
arable land held by government or confiscated from
members of Shah's regime. Affects about 100,000
hectares.
April 1980-Calls for radical redistribution. Passed
by Revolutionary Council, but suspended by
Khomeini in November 1980 because of widespread
abuses and strong opposition from conservative
clerics. If continued, would have resulted in breakup
of all but smallest holdings (under 7 hectares).
The depth of disagreement over land reform has
prevented the regime from implementing a
comprehensive program. Legislation requiring the
breakup of all but the smallest holdings was passed in
April 1980 but provoked such strong opposition and
resulted in so many unauthorized land seizures that
Ayatollah Khomeini suspended the articles dealing
with private property that November. In December
1982 the Majles passed a more moderate bill, calling
for leasing rather than redistributing land, but it was
overturned by the Council of Guardians for violating
Islamic law and the Iranian Constitution. The
Council now must rule on a very limited bill, passed
last May, that would give peasants and squatters
rights to land they settled after the revolution but
would allow large landowners who escaped
redistribution to keep their estates. The Council will
face considerable pressure to approve the bill, but it
probably will have difficulty squaring all aspects of
the bill with the requirements of Islamic law.
Khomeini's ambivalence on this issue has contributed
to the failure to pass major legislation. Although he
has frequently stated publicly that most large
landlords could be dispossessed because they had
acquired their land illegally, he has never endorsed
land reform. Khomeini apparently has been troubled
by the outspoken opposition of top clerics to any plan
that proposes to confiscate lawfully acquired property.
He probably fears that public disputes among top
religious leaders about such issues could undermine
support for the regime. Khomeini may also have
December 1982-Passed by Majles. On balance, a
victory for conservatives. Limited the size of
landholdings to about 20 hectares on average but
required leasing rather than divestiture of land.
Contained loopholes allowing landowners to lease to
their children and exempted dairy, livestock, and
mechanized farms.
January 1983-Council of Guardians overturned
1982 bill as un-Islamic and unconstitutional.
May 1985-Compromise legislation, limited in
scope, subject to future ruling by Council of
Guardians. Allows peasants and squatters to assume
ownership of lands settled after revolution. Allows
large landholders who escaped redistribution to
retain their estates. Would affect 600,000 hectares.
hoped that the passage of time would make the
peasants' seizures of land irreversible without
government intervention.
Conservative opposition almost certainly will block
the adoption of a major land reform in the near term.
Any future attempt to implement significant reform
also would have to untangle ownership claims
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resulting from past seizures of land and the practice
of falsifying land claims. Moreover, the government's
determination to increase agricultural productivity-
which requires consolidating small farms into large
mechanized agribusinesses-conflicts with the
objective of giving peasants their own plots of land.
Interim Measures
The regime has found various ways to circumvent the
absence of a comprehensive land reform. It has, for
example, continued to distribute wasteland and land
already confiscated, according to the provisions of the
1979 Revolutionary Council land bill, which the
Council of Guardians has never overturned. The
government controls about 100,000 hectares of
agricultural land confiscated from members of the
Shah's regime. The revolutionary organizations
responsible for the rural areas administer hundreds of
thousands of hectares of disputed land.
After the Council of Guardians rejected the 1982
Majles land bill as un-Islamic, Musavi Ardabili, head
of the Supreme Judicial Council, instructed judges
not to adjudicate claims to recover confiscated land
until new legislation was passed. The government also
has drawn on interpretations of Islamic law by pro-
land reform clerics. Ayatollah Montazeri, for
example, has ruled that the custom by tribal leaders
of claiming ownership of natural pasture violates
Islamic law and that such lands belong to the
government. He has ordered these lands placed under
the control of the government's land distribution
office.
Expanded Government Role
The government has used its involvement in
agricultural areas to help strengthen rural backing for
the regime. Hooglund notes that support for the
revolution was weak in the villages in the year before
the Shah's ouster, the most prevalent attitude being
cynicism that the new regime would perpetuate the
inequities they had suffered under the Shah.
The central government controls village politics
through cultivation councils, land distribution
committees, and the presence of local spiritual leaders
who often act as government spokesmen regarding
local economic and agricultural conditions. By
January 1980 the government had established
approximately 25,000 Islamic committees to operate
in the villages. Shaul Bakhash in Reign of the
Ayatollahs writes that "government representatives
have extensive authority to dictate which crops are to
be planted by land and loan recipients and to
intervene in the agricultural decisions of individual
farmers."
Country Versus City: Conflicting Policies
A major reason the government has sought to
implement land reform is to help stem migration to
the cities. Tehran's population, for example, has more
than doubled since 1979, when it had 4.5 million
inhabitants. The government has tried to offset the
failure to enact land reform by improving living
conditions in rural areas. In a speech in 1983, Prime
Minister Musavi said that to stem emigration, rural
areas would be improved at the expense of the cities; a
government-sponsored conference on agriculture last
summer was devoted largely to this issue. Official
figures claim that 1,500 villages have been supplied
with electricity and that wells for drinking water have
been provided to about 5,500. There are, however,
some 60,000 villages in Iran. The regime also
subsidizes some farm costs and is pushing
mechanization to increase agricultural productivity.
Last spring the government announced that to help
prevent migration from rural areas it was setting the
minimum wage for agricultural workers at the same
level as that for urban factory workers. Although the
average farmer is probably better off now than before
the revolution, urban workers are still better off. An
article on economic policy in the government-
controlled press earlier this year said that the tide of
rural people flowing into the cities remained
unchecked.
The government has been unable to cope with the
urban population explosion. According to Bakhash,
the regime has pursued "conflicting, ill considered,
and poorly administered urban housing policies,
which have brought about some shifts but no major
improvement in housing patterns." Between the
revolution and 1983, the government nationalized
large quantities of undeveloped land in Tehran and
began parceling it out to the poor. Although this
resulted in the distribution of about 50,000 plots to
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lower-income families by 1983, it also encouraged
increased rural emigration by people seeking land.
The government created a large bureaucratic
apparatus to try to regulate land use and the
construction and sale of housing, but this has
hampered construction in the private sector and
encouraged corruption. The government has not been
able to start a single major housing program, and
housing shortages remain acute.
The regime's efforts to provide cheap food for the
urban poor and working class-key supporters of the
regime-also have worked against its policy of
stemming migration to the cities. Subsidies for
imported food have helped keep the prices of Iranian
farm products artificially low, forcing many farmers
to sell out and seek work in the cities.
Secret 44
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Secret
India: Rajiv Gandhi
as Defense Minister
Rajiv Gandhi has signaled his intention to give
security issues a high priority by assuming the defense
portfolio and by appointing key aides to oversee
defense procurement and internal security. The poor
performance of India's paramilitary and police forces
in controlling communal violence, breaches of security
in the defense establishment, the rising cost of arms
modernization programs, serious interservice rivalries,
and the maturing of Pakistan's nuclear weapons
program have, in our judgment, prompted Gandhi to
assume his new duties. As Defense Minister, Gandhi
probably will attempt to rehabilitate the police forces,
reform the arms procurement process, and reorganize
the armed services. Depending on his assessment of
Pakistan's nuclear weapons progress, he may also
reactivate India's nuclear weapons program.F__1
New Broom
Gandhi used his September Cabinet shuffle to place
himself and two key aides in charge of the nation's
security forces. The Prime Minister took over the
defense portfolio, transferring the incumbent, P. V.
Narasimha Rao to the new Ministry of Human
Resources. Rao was
transferred because he was perceived as pro-Soviet, a
characteristic not in keeping with Rajiv's desire to
turn increasingly to the United States and Western
Europe for needed military technology.
He also appointed his top two young aides to
important sub-Cabinet positions on defense and
internal affairs. As Minister of State for Defense
Research and Development, Arun Singh, Gandhi's
former parliamentary secretary, will be in charge of
all defense matters. Arun Nehru, as Minister of State
for Internal Security, also will report directly to Rajiv
instead of to Home Minister Chavan, his nominal
superior
Internal Security and Paramilitary Forces
We believe that Gandhi and Nehru will make a
substantial effort to improve India's internal security
forces. The inability of poorly trained, armed, and led
local police forces to contain civil unrest has forced
the government to call out paramilitary forces and
regular Army troops over 400 times in the last five
years and on over 100 occasions in 1984, according to
Indian Government figures. This year:
? Policemen in Gujarat rioted along with other
groups, protesting state reverse discrimination
policies, forcing the Army to maintain order for
three months.
? Border clashes broke out between the state police of
Assam and Nagaland in July, leaving 50 dead
before paramilitary forces intervened.
? Gandhi ordered units of the Border Security Forces
and the Indo-Tibetan Border Guards to prepare for 25X1
internal security operations during the Punjab
elections because local police were both too corrupt
and ill prepared for civil unrest.
Nehru has stated publicly that improving the
performance of local police forces is the key to solving
India's internal security problem. He wants to
improve their training and leadership and remove 25X1
them from the influence of local politicians to increase
their credibility as a force for law and order. Nehru
also plans to replace the police's obsolete .303 Lee-
Enfield rifles, the standard personal weapon, with 25X1
handguns.F____1 25X1
Although there is no indication that Nehru plans to
reorganize and streamline India's numerous
paramilitary forces, this would be a logical second
step. Indian critics point to the mixed quality of the 14
different forces that perform internal security duties
and help guard border areas. The Assamese Rifles,
for example, are highly regarded, while the larger
Central Reserve Police and the Border Security
Forces are less well regarded. Many of these forces
were created after established paramilitary units
failed to perform properly. The 2,000-man National
Security Force, for example, was formed last year to
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Secret
protect high government officials and to combat
terrorism.
Defense Reorganization
Rajiv is likely to institute sweeping organizational
changes in the Ministry of Defense.
Gandhi called for
an "apex body to control national security" and
"interservice operations under unified commands" at
a recent conference of military commanders. He has
also appointed a retired general to study the
feasibility of adopting a Joint Chiefs of Staff (JCS)
organization for the Indian services.
While awaiting that report, the Prime Minister has
informed the service chiefs that he expects to see them
together more frequently, even at social occasions.
Gandhi brought the Army and Air Force chiefs of
staff to a conference of naval commanders last month
and had the Army and Navy chiefs present for an Air
Force memorial service in New Delhi last month-
both firsts for India's military
A study for an Indian JCS was proposed
unsuccessfully two years ago by the former Vice Chief
of Army Staff, Lt. Gen. S. K. Sinha. Sinha
recommended that the services have greater
representation at the higher levels of decisionmaking
to meet the country's more complex defense
requirements even though he realized that many
civilian leaders feared that an increased role for the
military would threaten India's democratic
institutions. Within the military there also was-and
undoubtedly is-some concern that, under a unified
command, the Army (with over 1 million men) would
dominate the other two services (with less than
200,000). Gandhi is probably willing to take these
risks given his political popularity, his distrust of the
civilian bureaucracy, and his debt to the Army for
having maintained civil order in India over the last
several years
Interservice Rivalries
Gandhi has already sided with the Army in its dispute
with the Air Force over the control of India's
helicopter forces. ay that
Gandhi has given his blessing tote Army's efforts as
a reward for their internal security efforts. According
to an Army study written by
Army Vice Chief Sundarji, arguing for the creation of
an Army Aviation Corps, has been sent to Arun Singh
for approval. Earlier reports indicated that the plan
called for a three-phase takeover of all Air Force
helicopter and fixed-wing assets that support Army
logistics, as well as India's small attack helicopter
force. The Army wants to expand that force from 12
Soviet Hinds to perhaps as many as 150 Western-
built aircraft.
The Air Force is fighting a rear-guard action. Air
Chief LaFontaine wants the Air Force to manage
India's attack helicopter pilots and opposes Sundarji's
plan to rotate them between helicopter and armor
units at two-year intervals. He is also critical of
preliminary Army plans to use the helicopters to
attack the flank of enemy armored columns because
they would be extremely vulnerable to ground fire
once they crossed the forward edge of the battlefield.
Procurement Practices
The Army's poor staff work in preparing to buy a
large number of helicopters, valued at over $500
million, is symptomatic of another problem that
Gandhi and Arun Singh will begin to wrestle with in
the coming year. For the past decade, India's military
has had virtually a free hand in ordering foreign
military equipment. Foreign suppliers have sometimes
refused their requests, and India's bazaar-style
negotiating has delayed contracts. Yet the military
has frequently obtained the types of weapons it has
desired, if not always the specific models and
numbers. Soviet willingness to provide equipment on
easy credit has been a big factor behind the rapid rate
of growth.
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Gandhi's desire to buy more Western arms will, over
time, change Indian buying patterns and require a
more careful procurement process. India's limited
hard currency reserves as well as the complexity of
the systems being purchased will argue for a more
careful selection process. In the next few years,
Gandhi could begin to force trade-offs among
individual service purchases and dictate purchases of
common systems.
Developing the selection processes and budgetary
tools will probably be a key aspect of Singh's duties.
They could be useful in helping to maintain civilian
control over India's military establishment if Gandhi
approves the creation of a joint military staff. They
could also force the Indian military to develop more
quickly the leadership and managerial skills that have
been ignored during the rapid expansion of the Indian
military arsenal over the last decade.
The Nuclear Issue
Perhaps the most important decision that Gandhi will
face as Defense Minister in the coming year will be
over India's response to Pakistan's nuclear weapons
program. New Delhi has signaled its concerns to both
Washington and Islamabad:
Gandhi's public comments on Pakistan's nuclear
program have become increasingly hostile.
? New Delhi has highlighted the startup of its
experimental breeder reactor that could provide
plutonium for its own weapons program.
? The Indian Air Force has raised barrage balloons
for the first time over one of its forward airbases
near the Pakistani border, perhaps demonstrating
its option of launching a preemptive strike against
Pakistan's nuclear facility at Kahuta, which is
protected by similar balloons)
If Gandhi rules out both a preemptive strike-which
would almost certainly lead to retaliation and a wider
war-and the nonnuclear option-which would leave
India at a serious strategic disadvantage-there will
be increased pressure to build more than a small
nuclear arsenal to match Islamabad's potential atomic
weaponry. Commentators in New Delhi think tanks
have noted not only Pakistan's nuclear threat but also
That posed by India's long-term nuclear rival, China.
Gandhi could well be motivated by such arguments
and traditional Indian great power aspirations to
launch a program that looks to the acquisition of
intermediate-range ballistic missiles, thermonuclear
weapons, and the requisite nuclear command and
control systems.
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India: Foreign
Military Assistance
India with the world's fifth-largest defense
establishment, has engaged in a wide range of foreign
military assistance during 1985. These activities
include selling arms and equipment, providing
technical support to foreign militaries, training
foreign military students, and sending and receiving
military delegations. They are aimed at gaining
influence, mostly in the Indian Ocean region or in
countries that-like India-depend on Soviet
equipment. Though India probably hopes to expand
its military assistance, its potential is limited by
India's nonaligned foreign policy and, in the case of
arms sales, by strong competition from established
suppliers.
Arms and Equipment Sales
India is one of the biggest arms producers in the Third
World, but it exports relatively little military
equipment largely because of domestic military
requirements. Even if Indian industry had the
capacity to produce for export, New Delhi's desire to
avoid being labeled as a "merchant of death" would
constrain marketing. Moreover, Indian military
products are only of modest sophistication and are less
highly regarded than those of the industrialized
nations and even such developing countries as Brazil
and Singapore that are better established as producers
and suppliers.
Still, India is trying to increase its arms and
equipment sales abroad and hopes that it can expand
further in this market, especially in the aeronautics
field. The Indians have sold a small number of Chetak
helicopters (an indigenously produced single-engine
craft based on a French design) to countries such as
the USSR and Nepal and are discussing the sale of
helicopters and components to other countries as well.
They are also attempting to market a domestically
produced trainer aircraft but have yet to find any
buyers
India asked the USSR in 1982 for permission to
export MIG-21 parts it currently makes under Soviet
license, and we believe New Delhi is still interested in
this arrangement. If successful, India could step into a
lucrative market as a supplier of parts for countries
with older, hard-to-maintain Soviet equipment.
Technical Support
Providing technical support to foreign military
establishments involves less political risk and a lower
profile than arms sales but promises greater benefits
in generating foreign business and supporting
domestic industry. Aeronautic-related activities hold
the most potential. So far this year, India has repaired
helicopters that it had previously sold to the USSR
and has provided spare parts (cannibalized from its
unused MIG-17s) and technical support to North 25X1
Yemen's MIG-17 squadron. Also, Army Chief of
Staff General Vaidya promised Indian support for
Nigeria's arms production efforts during his recent
visit there.
Training
India trains an increasing number of foreign military
students-both in its military schools at home and by
sending training teams abroad. These efforts provide
opportunities for India to gain influence through ties
to foreign military establishments and, especially in
the case of training teams, to obtain some insights into
how other countries conduct military affairs.
Most of the foreign students in India are from other
Indian Ocean nations. This year Indians provided
internal security training to Mauritius and Tanzania.
Uganda has also shown interest in Indian training
Indian Air Force teams began a training program in
North Yemen this year. Similar groups were expelled
last year from Egypt, after having been accused of
spying. Nigeria dropped the Indians in favor of the
Soviets.
India has also increased foreign access to its senior-
level staff schools. The 1985 class of the Indian
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Estimated Values of Indian Military Assistance
Agreements (A) and Deliveries (D), 1980-84
Middle East
1
21
20
10
NA
4
0
0
7
0
Sub-Saharan Africa
NA
0
0
NA
4
4
0
0
1
0
Defense Services' Staff College has enrolled 25
foreign. officers from 18 countries. New Delhi recently
granted a US request for a space in the 1986 class.
India and the Iran-Iraq War
The five-year-old Iran-Iraq war provides the most
dramatic example of India's military assistance
efforts. In addition to trying to play a major
diplomatic role in. resolving the conflict, New Delhi
has been involved since the war began in supplying
military training, advice, and even equipment to both
sides.
India agreed to provide about $25 million worth of
military assistance to Iran from 1980 to 1984 and
delivered about $14 million, mostly equipment and
ammunition. So far this year, India has sold jeeps,
explosive ordnance, and naval tankers to Iran, and
naval. weapons have been
sold as well. Iran also has had students in several
Indian Navy courses this year and has shown some
interest in Indian military training teams
India's materiel sales to the Iraqi military have not
been as great as those to Iran, but its in-country
presence has been much larger and more extensive.
New Delhi has helped build roads and airfields in Iraq
in addition to constructing a joint-venture munitions
plant in Baghdad. India has more military trainers
stationed in Iraq than in any, other foreign country-
70 to 80. About half are flight instructors, and the
rest provide naval training and instruction in a wide
variety of army skills and have assisted Iraq in
establishing its senior staff college. Indian officers
from all three services teach at this college.
imports from Iraq.
India gains several benefits from its military ties to
Iran and Iraq. First, India's team in Iraq gets to
watch a major mechanized southwest Asian war from
the perspective of a largely Soviet-equipped force .
fighting a largely US-equipped force-a conflict that
in many ways approximates a future Indo-Pakistani
war. Second, aiding Iraq helps India maintain good
relations with important moderate Arab powers in the
Middle East, like Egypt and Saudi Arabia, who
support Iraq but do not want to risk the consequences
of lending it overt military support. Third, India has
important economic interests in seeing Iraq win, since
it is involved in extensive construction operations
there and receives a significant amount of its oil
New Delhi is also concerned that the spread of
Islamic fundamentalism that could result from an
Iranian victory may lead to instability in Pakistan and
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unrest among India's large Muslim minority. Indian
support to Iran should be viewed as political bet-
hedging and taking the opportunity to see the war
from the other side.
Military Delegations and Showing the Flag
Another way in which New Delhi has increased its
efforts to show its regional military power has been
through the dispatch of delegations and of naval
missions. Since January India's Army Chief of Staff
General Vaidya has visited Nigeria, the Soviet Union,
France, Switzerland, and Italy; Navy Chief of Staff
Admiral Tahaliani completed a trip this fall to
Yugoslavia, Italy, and Sweden; the Navy Vice Chief
of Staff and the Western Fleet Commander have each
visited the United States this year; the late Air Force
Chief of Staff Air Chief Marshal Katre made a trip to
Italy last spring, and his successor, Air Chief Marshal
LaFontaine, visited Romania this fall. These visits
provide learning opportunities for Indian officers and
initiate or maintain important military contacts and
relationships
In return, New Delhi has received important military
visitors. This year India has been visited by the
Nepalese Army Chief of Staff, the US Chief of Naval
Operations, the chairman of the US Joint Chiefs of
Staff, and several senior Soviet delegations, including
the Chief of Staff of the Soviet Air Force.
India also regularly receives and conducts naval port
calls. So far this year, a five-ship squadron visited
Malaysia, Singapore, Thailand, Indonesia, and
Brunei; a two-ship force called at Djibouti, Oman,
and Ethiopia; and another two-ship force cruised to
Madagascar and Mauritius. The Indians have
received naval visits from Japan, Iran, Australia, the
United States, and the USSR so far this year
Outlook
Indian foreign military assistance is likely to continue
to expand, but only at a modest pace. High
consumption of local military production and the 25X1
commanding leads of other countries in several fields
will remain serious handicaps to growth. An increase
in India's arms sales and technical assistance
programs will depend largely on establishing a market
for its aeronautic products. The Indian military
probably has the capacity to expand foreign training
programs further, but only with countries that cannot
afford more experienced, more highly regarded, and
more expensive training from other nations.
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India's Key
Nuclear Advisers
The Indian Government's long familiarity with the
nuclear weapons issue and with the well-developed
public debate on the subject gives India a pool of
influential nuclear experts who will have a strong
impact on any decision to acquire nuclear weapons.
These advisers offer the Prime Minister divergent
points of view, but they differ more on the question of
when rather than whether India should embark on a
weapons program. We believe the price India must
pay-diplomatically and economically-to develop
nuclear weapons will weigh as heavily in its final
decision as the pace of Pakistan's nuclear program.
Gandhi's Decisionmaking Style
Rajiv Gandhi's decisionmaking style is consultative
and decisive. Unlike his predecessor, Indira Gandhi,
who dithered for long periods, Rajiv is quick to
identify problems, examine issues, and seek workable
solutions. He looks to his advisers for facts and
options and seeks counsel from those he considers
experts-professionals who had no influence in his
mother's circle. According to the US Embassy in New
Delhi, Indian officials say that Gandhi asks questions
that reveal a thorough understanding of technical
concepts.
the civil nuclear program in the event of a decision to
acquire nuclear weapons. Singh has been involved in
high-level discussions with the Pakistanis on nuclear
matters. He had previously acted as Gandhi's
principal secretary; his duties included clearing
everything before it reached Gandhi's desk. His views
on nuclear issues are not known.
G. Parthasarthy's longevity in government-he is
currently head of the Policy Planning Committee of
the Ministry of External Affairs-combined with his
personal and influential relationship with the Gandhi
family probably ensure him a place in nuclear
decision making. Parthasarthy is the titular head of
the influential South Indian Brahman set-four of
whose members are nuclear advisers, according to the
US Embassy. Although diplomatic sources in New
Delhi predicted that Parthasarthy would not last long
in Rajiv's government because of his leftist
orientation, he has been involved in all major talks
with Pakistan, including nuclear discussions. In the
past he was active in the discussions with the United
States and France over the issue of spare parts for the
Tarapur reactor and with the Soviets on the issue of
heavy water purchases in the mid-1970s.
Parthasarthy also participated in the 1974 decision to
test a nuclear device in the Thar Desert and has since
indicated that New Delhi did not fully calculate the
Political Advisers and Point Men
Gandhi's advisers are a mix of new faces and longtime
experts. He has included government officials,
security experts, and scientists in his inner circle.
Arun Singh, Minister of State for Defense Research
and Development, is the Prime Minister's most
trusted adviser. Singh's new position in the Ministry
of Defense makes him responsible for India's external
security and de facto Minister of Defense, according
to the Indian press. The Indian press speculates that
Gandhi appointed Singh to ensure that he had a
trusted official in charge of the ministry in the event
of a decision to launch a nuclear weapons program.
Singh is responsible for a large network of defense
research establishments that will interact closely with
political and economic costs of the test
One of the most vocal proponents of nuclear weapons,
K. Subrahmanyam is the widely accepted spokesman
for the probomb lobby as well as a key Gandhi adviser
on security issues. Subrahmanyam, a career Indian
Administrative Service officer, director of the
Institute for Defense Studies and Analysis, and
recently appointed member of the India Security
Council, his views on
Indian nuclear arms have little to do with Pakistani
nuclear developments. Subrahmanyam has long held
that India, to position itself properly in the global
order and to demonstrate its abilities vis-a-vis China,
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Arun Singh
Gopalaswamy
Parthasarthyr
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should have a nuclear weapons program. He uses the
specter of a nuclear Pakistan to gain support for his
opinions, although he believes that India and Pakistan
would benefit from the resulting balance of power if
both states controlled nuclear weapons.
We believe that Subrahmanyam-who writes a
regular column in the Times of India-frequently
tests ideas for government policy options in his
column. In recent publications he has suggested-in
reaction to Pakistan's announcement that it could
enrich uranium-that India publicly justify its own
weapons program and project an image that it "may
be harboring some bombs in the basement with the
last wire yet to be connected."
Subrahmanyam is considered by the Indian press as
well as Western academics to be the best placed of
India's nuclear and security issues experts.
he is a ghostwriter for
art asart y on strategic issues. The institute
Subrahmanyam heads is charged with training
military officers and diplomats in strategic analysis
and security studies.
Romesh Bhandari, the Foreign Secretary, is a relative
newcomer to nuclear decision making circles, and we
believe he is consulted primarily because of the
position he holds. Bhandari probably advises on
tactics and diplomacy and takes part-at least
nominally-in all nuclear discussions with Pakistan.
Before becoming Foreign Secretary, Bhandari said
that he did not believe India could live with a nuclear
Pakistan, according to the US Embassy.
Scientists
In our judgment, Gandhi's technological orientation
makes him more receptive than his predecessors to the
advice of scientists. His statements indicate that he is
probably in fairly regular contact with key members
of the scientific community
V. S. Arunachalam, the Scientific Adviser to the
Ministry of Defense, is one of the key participants in
nuclear decision making, according to the US
Embassy in New Delhi. He is highly respected and
has close allies within the Ministry of Defense. The
Embassy reports that Arunachalam not only has
Rajiv's attention on defense-related nuclear issues and
gets on well with Arun Singh but is also well
connected to the South Indian Brahman circuit in
New Delhi-which includes G. Parthasarthy and K.
Subrahmanyam. Arunachalam oversees some 70
defense laboratories and would be an important
contact point between the Ministry of Defense and the
program guiding nuclear weapons research and
development
Arunachalam often represents India on technology
and nuclear applications issues and, the Embassy
reports, is a skilled proponent of his country's
interests. Over the last 15 years Arunachalam has
worked on the fringes of the Indian atomic energy
program.
Arunachalam has worked and studied in the United
States and is
favorably disposed toward the United States even
though he criticized Washington's refusal to supply
spare parts for the Tarapur reactor. He has been the
bridge between the US position and that of Raja
Ramanna-head of the Indian Atomic Energy
Commission (IAEC)-on the nuclear assurances
package in the recent Memorandum of
Understanding on US high-technology exports to
India. Arunachalam indicated to US officials that
only he and Bhandari could give the assurances
package the backing it needed to be approved by the
Cabinet.
According to the US Embassy, M. G. K. Menon is
one of New Delhi's most important scientific advisers
on nuclear matters. Menon, another South Indian,
was close to Indira Gandhi and appears to get on well
with Rajiv Gandhi. He is one of five members of the
Planning Commission responsible for government
scientific programs and has a major voice in the
allocation of funds. He is also chairman of the
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Cabinet's Scientific Advisory Committee. Menon is
one of India's most renowned scientists and represents
India on almost every international scientific
committee and commission. During the discussions
with the United States on nuclear assurances, Menon
on occasion substituted for Arunachalam. Like
Ramanna and Arunachalam, Menon has served as
Scientific Adviser to the Ministry of Defense
Splintered Opinion
An analysis of the views of Rajiv Gandhi's key
advisers reveals no clear mandate on the issue of
nuclear weapons. We speculate that the advisers are
not discussing whether but when India should embark
on a nuclear weapons program. The public debate in
India more often revolves around the proper and
timely response to Pakistan's growing nuclear
capabilities than the moral issues of developing
nuclear weapons.
A nuclear weapons program will entail diplomatic and
economic costs that, in our judgment, will figure into
the discussion. A decision to move ahead with a
nuclear weapons program immediately would
probably delay substantially Gandhi's plans for his
country's development by cutting it off from foreign
technology and financial assistance. Key advisers,
notably Arunachalam, Arun Singh, and M. G. K.
Menon, are probably more hesitant to "go nuclear"
immediately because of their belief that India needs
additional technology transfers from the West.
Subrahmanyam and Ramanna, on the other hand,
have been longtime proponents of India's becoming a
nuclear weapons power and probably argue for an
earlier initiation of a nuclear weapons program.
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of South Asia
A group of some 250,000 to 300,000 Biharis have
been stranded in Bangladesh since the War of
Independence in 1971. They are Muslims who
consider themselves Pakistanis and want to migrate to
Pakistan, but lack of money and other bureaucratic
hurdles have held up their departure. Dhaka does not
want to continue sheltering and feeding the Biharis;
Islamabad is willing to take them back but does not
want to foot the bill. Both states have appealed to the
Muslim world to assist in the transfer of the Biharis to
Pakistan by paying transport and resettlement costs,
estimated at $300-500 million, but general lack of
interest will probably force the Biharis to remain in
Bangladesh for the near term.
Who Are the Biharis?
The Biharis in Bangladesh are Urdu-speaking
Muslims who left the Indian state of Bihar after the
partition of India in 1947 to escape persecution at the
hands of Hindu Biharis. The Muslim Biharis settled
in what was then East Pakistan and, along with West
Pakistanis working in East Pakistan, came to
dominate the upper class. The Biharis also accounted
for one-fifth of the region's railroad and industrial
workers. By 1971 the Biharis in East Pakistan
numbered 1 million.
After the Bangladesh revolt broke out in 1971, the
Biharis declared their loyalty to West Pakistan. Once
independence was achieved for Bangladesh, the new
government in Dhaka stripped the Biharis of their
homes, money, and businesses. Some of the wealthier
Biharis fled to Pakistan, but 250,000 to 300,000
Biharis remain in Bangladesh living in some 60
camps. Each camp resident receives only 3 kilograms
of rice per month from the government, according to
press reports.
Since 1971, some 280,000 Biharis have been
transferred to Pakistan under the auspices of the
United Nations. The US Embassy in Dhaka further
reports that several thousand Biharis reach Pakistan
Biharis bury their dead in mass grave after
clashes with Bangladesh Security Forces,
1972. F__~
each year on their own, either by going overland
across India or flying to Pakistan by way of Nepal.
Terms for the return of the Biharis and all other
Pakistanis from Bangladesh and India were set in the
Tripartite Agreement of 1974, which was signed by
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India and Pakistan and consented to by Bangladesh.
The agreement specified that Pakistan would accept
only three categories of non-Bengalis-those
domiciled in Pakistan, employees of the central
government and their families, and members of
divided families.
The Pakistani View
Pakistan has said that it has taken back most of the
Biharis in these three categories. The remaining 500
or so Biharis who are still in Bangladesh and eligible
to return to Pakistan under the 1974 agreement are
being held up because of bureaucratic snags between
the Bangladesh Government and the UN High
Commissioner for Refugees (UNHCR), according to
the US Embassy in Islamabad. Pakistan will accept
the remaining 250,000 to 300,000 Biharis only if
another country or organization picks up the tab for
transportation and resettlement expenses, which
Islamabad estimates at $500 million.
In our view, Islamabad is using the funds issue as a
pretext to avoid adding to the number of Biharis in
Pakistan. Ethnic riots in Karachi between Biharis and
Pathans in April 1985 resulted in an estimated 200
deaths during the street fighting and Army
intervention, according to the US Consulate in
Karachi. According to US Embassy reporting,
Pakistani Biharis accuse the government of dragging
its feet on bringing the Biharis in Bangladesh to
Pakistan. Biharis living in Karachi also complain of
discrimination and police harassment
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The Bangladesh Position
Bangladesh does not consider the Biharis to be
refugees but instead refers to them as "displaced
Pakistanis"-a distinction that allows Dhaka to shift
responsibility for the Biharis to Pakistan. According
to US Embassy reporting, Bangladesh considers the
repatriation issue to be between the Biharis and
Pakistan, and that Bangladesh has fulfilled its
obligations under the 1974 Tripartite Agreement.
Dhaka contends that the Biharis are no longer
persecuted and are eligible for Bangladesh
citizenship. Biharis are "free" to leave Bangladesh
any time they wish. Biharis, however, have no desire
to become citizens of Bangladesh, and most have no
means of financing their departure.
The Biharis' Would-Be Rescuers
The international organization most active in working
for the transfer of the Biharis to Pakistan is the
Muslim World League. The League raises funds for
the Biharis' resettlement from both Muslim and non-
Muslim nations. According to US Embassy reporting,
Saudi Arabia and West Germany have both
contributed to the Biharis' cause. Dr. Abdallah Nasif,
Secretary General of the League, has taken the lead
in keeping the Bihari issue alive in Islamic circles.
The League estimates that at least $300 million is
needed to transport and resettle the Biharis.
Many observers see the UNHCR as providing some
of the transportation for moving the Biharis to
Pakistan, as it did in the 1970s. The UNHCR,
however, does not regard the Biharis as official
refugees because it does not consider them to be
persecuted by the Bangladeshis.
Another interested party in the Biharis' dilemma is
Lord Ennals, a former British Member of Parliament
who has worked with the Muslim World League in
collecting money for transporting the Biharis. Lord
Ennals has suggested that a future Bihari migration
to Pakistan be phased to keep disruptions to a
minimum. He has shuttled back and forth between
Pakistan and Bangladesh in the past 13 years trying
to find a way to bring the Biharis to Pakistan.F
Governments Haggle ...
Funding is still lacking for resettling the Biharis.
Although recent Western press reports alleged that an
agreement between Pakistan and Bangladesh on the
Biharis was imminent, Pakistani officials say that not
enough of the needed $500 million has been collected,
according to US Embassy reporting. Embassy sources
in Islamabad say that Bangladesh has proposed a
joint commission to handle resettlement but that the
Pakistani Government is unwilling to accept the
remaining Biharis until it receives firm financial
commitments from donor countries such as Saudi
Arabia.
The Bihari issue has disturbed otherwise cordial
relations between Dhaka and Islamabad. According
to the US Embassy in Dhaka, Bangladesh Foreign
Minister H. R. Choudhury raised the issue at the
meeting of the Islamic Conference Organization in
Sanaa in December 1984 to generate some movement
on the problem. Then Finance Minister Ghulam Ishaq
Khan, representing Pakistan, criticized Choudhury
for bringing up a "sterile" issue. The Bangladesh
representative retorted that sterility is something for
old men to worry about, an obvious reference to the
aged Khan.
... While the Biharis Wait
Prospects for an organized transfer of the Biharis to
Pakistan from Bangladesh are not bright. The Bihari
issue is not a priority for potential donors such as the
Arab oil states, which are cutting back on spending
because of the sluggish oil market. Although both
Islamabad and Dhaka remain publicly committed to
resolving the Bihari issue, Bangladesh can do little
more than keep them alive on subsistence rations, and
Pakistan does not want to upset its own fragile ethnic
balance.
The Bihari problem may solve itself, over the long
run. Although reliable figures are lacking, Pakistani,
Bangladesh, and UN officials all believe that the
Bihari population in Bangladesh is slowly decreasing
because of legal and illegal Bihari emigration to
neighboring countries. The Bihari issue may ruffle
Declassified in Part - Sanitized Copy Approved for Release 2012/07/18: CIA-RDP87T00289R000100260001-0
 Declassified in Part - Sanitized Copy Approved for Release 2012/07/18: CIA-RDP87T00289R000100260001-0
Secret
Pakistani-Bangladesh relations and contribute to
Pakistani ethnic tensions, but we do not believe that it
seriously threatens the stability of either country.
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/07/18: CIA-RDP87T00289R000100260001-0
 Declassified in Part - Sanitized Copy Approved for Release 2012/07/18: CIA-RDP87T00289R000100260001-0
Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/07/18: CIA-RDP87T00289R000100260001-0