SUPPORT GROWS FOR PERES' MIDEAST AID PLAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000403590002-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: January 12, 2012
• Sequence Number: 2
• Publication Date: April 7, 1986
• Content Type: OPEN SOURCE

STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/01/12 : CIA-RDP90-00965R000403590002-2
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WASHINGTON TIMES
7 April 1936
Support grows for Peres'
Mideast aid plan
By Bill Kritzberg
THE WASHINGTON TIME
billion each. The money would be raised
one-third from government, one-third
from banks, and one-third from industry.
The plan would include Egypt, Jordan,
Lebanon, and the West- Bank. Syria also
would to be invited to participate.
Mr. Peres reportedly was prompted to
make the initiative when negotiations be-
tween Jordan and the Palestine Liber-
ation Organization chief Yasser Arafat
broke down recently and, as a result, the
American-sponsored peace process col-
lapsed.
Israeli leaders are worried by the
prospect of growing radicalism resulting
from economic upheaval in the Middle
East and the dim prospect for peace.
Thus, Israel was motivated to suggest a
plan aimed at rescuing the economies of
its neighbors, most of which remain in a
state of war with the Jewish state.
The OPEC countries, according to Is-
raeli sources, are expected to lose $100
billion this year if the price of oil stays at
its current level.
As a result, Saudi Arabia will have a
deficit of $13 billion, and its foreign cur-
rency reserves of between $80 billion and
$90 billion could dry up in only two years.
In 1984, Saudi Arabia had a deficit of $24
billion. But it is the "oil poor" Arab states
that face the most dire consequences.
For example, Saudi Arabia has subsi-
dized the Syrian and Jordanian
economies. Syria has been informed that
its annual Saudi subsidy of $1 billion is to
be cut by an amount equal in weight to
the Saudi budget cuts as part of the king-
dom's austerity measures.
Syria's foreign currency accounts
have dropped to a low of $75 million, ac-
cording to these sources, meaning that
Syria technically is bankrupt.
Jordan also faces potential cuts in the
Saudi Arabian annual subsidy of $600
million a year and declining revenues
from the 300,000 Jordanian workers in
oil-rich states who send home remit-
tances.
With 2 million to 3 million workers
abroad, Egypt can expect declining re-
mittances and the imminent threat of so-
cial upheaval. Israeli sources say that
Egyptian President Hosni Mubarak is in
"serious trouble," despite real efforts to
make economic reforms.
Egypt spends $7 billion a year in food
and other subsidies and has lost $4 billion
in recent weeks alone. Oil revenues and
Suez Canal toll revenues have dropped
dramatically, and terrorism has cut tour-
ism profits. Its deficit this year is pro-
jected to be $6 billion dollars, the source
said.
While Israel stands to benefit eco-
nomically because of the decline in the
price of oil, Israel could be negatively
affected by the region's economic prob-
lems as West Bank Palestinians, who
have benefited from Jordanian subsidies
and remittances from family members
working in Persian Gulf states, feel the
impact of lost income.
Israel would like to see the West Bank
included in the plan to stave off
heightened tensions in the occupied ter-
ritories as living standards decline.
Support is growing in Washington for
a multibillion-dollar Middle East aid pro-
gram first proposed by Israeli Prime
Minister Shimon Peres last week.
The Reagan administration is con-
cerned that pro-Western Arab govern-
ments are in danger because of the fall-
ing price of oil.
Director of Central Intelligence
Wiliam Casey told the American-Israe
Public Affairs Committee yesterday that
a " arshall-type plan" was needed to
combat the "present danger" of Arab
radicalism, supported by Soviet
an aimed against "moderate Arab
states,"
Mr. Case said that Soviet support for
Libya and Syria were at an "all-time
high." Terrorism and Soviet naval
strength were aimed at intimidating Mid-
dle East countries friendly to-the United
fates, a sat .
In talks between Mr. Peres and Secre-
tary of State George Shultz last week, the
Israeli leader suggested a massive aid
program to bolster Arab states. Mr.
Shultz reacted positively and in an ad-
dress to a group of Jewish businessmen
said there was a close connection be-
tween economic developments in the re-
gion and political stability.
State Department spokesman Bernard
Kalb said' Wednesday, "we support the
overall objective of the proposal;' despite
the political and financial obstacles.
Mr. Peres was reluctant to speak of the
program publicly because of fear that
Israel's sponsorship might undo its
chances.
The plan as outlined by Mr. Peres
would call for the Western industrialized
countries to invest $28 billion dollars in
Arab countries suffering from declining
oil revenues.
Mr. Peres suggested investing $7.5 bil-
lion a year, with Western Europe, Japan
and the United States contributing $2.5
Declassified in Part - Sanitized Copy Approved for Release 2012/01/12 : CIA-RDP90-00965R000403590002-2