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To: Gabriela Neri who wrote (15784)	8/12/1998 8:34:00 PM
From: CIMA	Respond to of 116805

Global Intelligence Update August 13, 1998 Angola Braces for Possible Spillover of Congo Fighting Angolan forces in the coastal enclave of Cabinda were placed on alert Wednesday, August 12, following the opening of a new front by rebels in the southwest of the Democratic Republic of Congo (DRC, formerly Zaire). The oil-rich Cabinda, a portion of Angola, is bordered by the DRC to the east, Congo to the north, and the Atlantic Ocean to the west. Cabinda Governor Amaro Taty said that Angolan forces would be able to keep the DRC fighting from spilling over into Cabinda, but he was "sure that the situation will become complicated" in the DRC. The border posts between Cabinda and the DRC have been closed since last week, and sources at the official "Journal de Angola" told Agence France Presse that DRC rebels had been deployed along the border since Sunday, August 9. The situation in Bas Congo province in southwest DRC is currently unclear. Tutsi rebels from eastern DRC opened the second front last week, in hopes of establishing a foothold from which to strike at Kinshasa. Radio France Internationale on August 10 reported a Nigerian pilot's claims that the rebels last week commandeered three aircraft to transport several hundred Rwandan troops from Goma to Kitona. Both sides claim to have the upper hand in the region, though corroborating reports from the scene are scarce. The rebels claimed to hold the oil town of Boma on Tuesday, and rebel commander Major Jean-Pierre Ondekane said his forces were preparing to take the river port of Matadi. Reports from the region claim that the rebels have continued to land troops and materiel at Kitona, and at the coastal towns of Moanda and Banana. One eyewitness claimed that up to three or four rebel cargo aircraft per day are landing in Moanda alone, though this may be exaggerated. DRC officials have denied the rebel claims, and say that government forces control the situation in Bas Congo. Whatever the status of the conflict in Bas Congo may be, its potential for spillover into Cabinda or Angola threatens both multinational oil operations and the tense peace between the Angolan government and UNITA. Angola is a major oil producer, second to Nigeria in Sub-Saharan Africa, with an average crude production of 720,000 barrels per day in 1997. Most of Angola's production capacity is located offshore of Cabinda, with some production off Angola's northern shore, and some onshore production north of Luanda. While the fact that Angolan crude oil production is located predominantly offshore buffers the threat of any spillover of the DRC's civil war, disruption in onshore support facilities could slow or temporarily halt some exploration and production activities. One additional threat, not as yet realized, is the possibility of the war in the DRC rejuvenating and fueling Angola's own civil war. The Angolan government this week stated that the country's peace process is "in deep crisis" due to UNITA's refusal to meet its remaining obligations under the peace accord on schedule. It is estimated that armed UNITA forces still number between 10,000 and 15,000 troops. Both the Angolan government and UNITA have, in the past, been involved in events in the DRC. Former Zairean leader Mobutu Sese Seko provided bases and logistics for UNITA during Angola's civil war, and UNITA forces reportedly fought alongside Zairean troops in 1997 against the forces of Laurent Kabila. In turn, the Angolan government supplied men and materiel to Kabila's forces. There is as yet no evidence of Angolan or UNITA involvement in the current crisis in the DRC, but the situation should be watched carefully. The war in the DRC has already begun to drag in neighboring states, as did the war to overthrow Mobutu. The longer the crisis continues, the more chance there is of it infecting Angola. ___________________________________________________ To receive free daily Global Intelligence Updates or Computer Security Alerts, sign up on the web at stratfor.com, or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com ___________________________________________________ STRATFOR Systems, Inc. 3301 Northland Drive, Suite 500 Austin, TX 78731-4939 Phone: 512-454-3626 Fax: 512-454-1614 Internet: stratfor.com Email: info@stratfor.com

To: Gabriela Neri who wrote (15784)	8/12/1998 8:57:00 PM
From: PaulM	Read Replies (2) \| Respond to of 116805

Secretary Rubin recently said an IMF gold sell off would send the wrong message to the markets. Specifically that it would give the impression of "selling the family silver." As in that article I posted a while back, the US$ is a world reserve currency and the IMF helps maintain that. Therefore, IMF will not sell its gold during a global monetary crisis (except to another CB or govt) but will encourage other countries to do so (again with obvious benefits for the $). E.g., with the CDN $ tanking against the $US, and having sold its gold, how will Canada defend its currency when it runs out of US $ reserves? No choice but to borrow dollars US. Which must be repaid.