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To: waldo who wrote (20372)10/2/1998 1:32:00 AM
From: CIMA  Respond to of 116871
 
Libya Seeks Leadership Role in Africa

Having dramatically turned his back on the Arab world, abolishing
the Arab Unity Committee and threatening to withdraw from the
Arab League for its failure to support Libya on the Lockerbie
bombing trial issue, Libyan leader Moammar Khaddafi has turned
his full attention to Africa. His agenda appears to be twofold,
to pay for and expand the diplomatic support he is receiving from
African countries, and to act in every way counter to what little
U.S. policy is detectable in the region.

The Organization of African Unity voted in June to ignore UN
sanctions on air travel to Libya, when such travel was required
for diplomatic or humanitarian reasons. Since then, 11 African
leaders have violated the sanctions, for which Khaddafi awarded
each of them medals of honor on September 30. Four of the
leaders were present in the Libyan coastal town of Sirte for the
awards ceremony, including Idriss Deby of Chad, Isaias Afwerki of
Eritrea, Yoweri Museveni of Uganda, and Ibrahim Bare Mainassara
of Niger. Other award recipients included Omar al-Bashir of
Sudan, Laurent Kabila of the Democratic Republic of Congo (DRC),
Robert Mugabe of Zimbabwe, and the leaders of Burkina Faso, the
Central African Republic, Gambia, and Mali.

Khaddafi's carefully targeted contributions to his African
neighbors go well beyond medals. This week the government of
Chad confirmed that it was providing 1,000 troops to support
Kabila in the DRC, though other sources counted nearly 2,000
troops sent. Chadian assistance to Kabila has been facilitated
by Libya, whose transport aircraft have shuttled the troops from
N'Djamena airport to the DRC for several days. The Associated
Press cited unconfirmed reports that Libya is financing the
Chadian troop deployment, and may even have replaced France as
the primary financier of the Deby government.

As STRATFOR reported in the September 23 Global Intelligence
Update, the U.S. tacitly backs Ugandan and Rwandan efforts
against Kabila, in part due to the merging of the DRC crisis with
the conflict in Sudan. Against Sudan, the U.S. supports Ugandan-
backed Sudanese rebels in the south, and Eritrean-backed Sudanese
rebels in the east. Sudan has reportedly deployed from between
2,000 and 10,000 troops to support Kabila, partially in an effort
to outflank the Ugandans. The twisted web of conflict that has
formed from Luanda to Asmara offers Libya a unique opportunity to
simultaneously emerge as the diplomatic hero of the continent,
while striking at U.S. policy in several places simultaneously.

Besides joining Sudan, among others, in bolstering the Kabila
regime, Libya has launched efforts to settle not only the Congo
crisis, but also the conflicts in Sudan, Ethiopia, Eritrea, and
Somalia. President Museveni's unexpected "working visit" to
Libya on September 29 sparked rumors that Khaddafi was attempting
to negotiate a settlement of the conflict. No results have yet
come of the visit, but further Libyan-Ugandan contacts are likely
in the near future.

This is particularly the case, as the conflict in the DRC was
undoubtedly not the only crisis on the agenda of Khaddafi's talks
with Museveni. Khaddafi is devoting substantial effort to
forging a settlement in Sudan. Sudan has accused Uganda of
actively supporting a recent Sudanese rebel offensive with troops
and armored vehicles, and on September 28, Khartoum ordered a
full-scale mobilization. Uganda denied the Sudanese claim and
warned that its army stood ready to defend against Sudanese
aggression. As in the DRC, Khaddafi appears to be coming in
against Uganda (and the U.S.). On September 28, the first
meeting of the Infrastructure Committee for Libyan-Sudanese
Integration signed a new accord on cooperation in the fields of
land and air transport, roads, energy and mines, power linkage,
industry, telecommunications, postal services, housing, and other
services.

On Sudan's other front, Khaddafi has attempted to forge a
settlement between Khartoum and Asmara, however Al-Bashir and
Isaias reportedly traded insults in Khaddafi's office while they
were both visiting Tripoli. Interestingly, it was apparently
Sudan that was unwilling to negotiate, as the Eritrean president
was described by the Ethiopian press as "eager to oblige." In a
sign that Libya has made some progress, if not toward peace than
at least toward Eritrea's realignment, President Isaias last week
blasted the United States for complicating the border dispute
between Eritrea and Ethiopia from the beginning. The U.S. has
attempted to suppress the conflict in order to maintain pressure
on Sudan. In doing so it has apparently thrown too much support
to Ethiopia for Eritrea's liking, driving Asmara back toward a
Libyan mediation offer.

On September 15-27, a delegation of the Libyan Revolutionary
Committee reportedly met in Asmara with the secretary general and
other representatives of Eritrea's ruling party. The two sides
reportedly resolved to implement agreements already reached
between the two countries, and to pursue further contacts. They
reportedly discussed issues ranging from Somalia and Sudan to the
conflicts in the DRC and on the Eritrean border.

Libyan efforts in Eritrea parallel those of Egypt, though with a
slightly different spin. Egypt, too, has offered to mediate the
dispute between Ethiopia and Eritrea, but Egypt is not also
attempting to relieve pressure on Sudan. In fact, Egypt hosts
the political representation of the Sudanese rebels. In a
statement to the Egyptian newspaper "Al-Ahram" on September 29,
Egyptian President Hosni Mubarak described Khartoum as devious,
and attacked the Sudanese regime for hosting terrorists.
However, in the same statement, Mubarak stressed his support for
Libya, and his understanding of Khaddafi's recent anger with the
Arab community over sanctions. Mubarak praised Khaddafi for
severing all links with terrorism and disposing of Libya's
chemical weapons. Libya and Egypt are already cooperating in
efforts to stabilize Somalia, and if they can resolve their
differences over Sudan, they could play a role in settling the
Ethiopia-Eritrea conflict.

The disagreement over Sudan, however, is key. Just as the U.S.
is attempting to weave a connected, yet confused and often
contradictory policy that covers all of Africa's merging
conflicts, so Libya's efforts to play a competing role in the
region are meeting some of the same difficulties. Libya may get
its way in Congo, but that is lower on the U.S. priority list
than Sudan. Libya can aid Sudan and try to draw of Eritrean
assistance to the rebels, but this may run afoul of Egypt. Libya
may have found a place in Africa where it can roam free and
attempt to develop a leadership role, but in all, Libya will have
about as much luck dealing with this mess as has the United
States.

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Internet: stratfor.com
Email: info@stratfor.com




To: waldo who wrote (20372)10/2/1998 1:33:00 AM
From: Sergio R. Mejia  Read Replies (1) | Respond to of 116871
 
"If the New York stock market isn't attractive, investors are going to turn to gold,"

(From South China Morning Post)

Friday October 2 1998

Gold wins favour on heels of stocks fall

AGENCIES
Gold rose in Asia yesterday as investors bought the
metal as a safe haven after stocks fell in New York,
where the Dow Jones Industrial Average suffered
its biggest decline in three weeks.

"If the New York stock market isn't attractive,
investors are going to turn to gold," said Masanori
Tashiro, a commodities analyst at Sunrise Trading.

Many saw gold as a lower-risk investment than
equities or currencies, traders said.

Gold for delivery in August next year, the most
active contract on the Tokyo Commodity
Exchange, rose 21 yen to 1,289 yen a gram, or
US$293.27 an ounce, a more than one-month high.

In London interbank trading, gold for immediate
delivery gained as much as 10 cents to $297.05 an
ounce.

Benchmark US and European stock indices staged
their biggest falls in a July-September quarter since
1990 on concern about slowing economies
worldwide.

Capital flight in Latin America sent indices there
plunging 20 per cent or more, and Russia's index
lost 71 per cent of its value.

Amid the rout, some hedge funds had exited the
New York Stock Exchange and bought gold, said
Hideo Terasaki, an official at Orient Trading.

"There's a flight to quality," said Peter Upton, a
trader at Dresdner Kleinwort Benson, adding that
lower bond yields had caused bonds to lose some
of their attractiveness as an alternative to stocks
and boosted the allure of gold.



To: waldo who wrote (20372)10/2/1998 1:43:00 AM
From: Sergio R. Mejia  Respond to of 116871
 
Dow forecast to extend drop into fourth quarter (further 5 to 10 %)

Friday October 2 1998

Dow forecast to extend drop into fourth quarter

REUTERS in New York
Stocks in the United States may fall a further 5 to
10 per cent in a volatile fourth quarter amid what
some analysts are calling the world's worst financial
crisis in decades.

That would snap the Dow Jones Industrial
Average's three straight years of gains of more than
20 per cent - the most powerful run in its 101-year
history.

Investors are concerned about the worst third
quarter for earnings in seven years, Asia's economic
turmoil and the crises in Latin America and Russia,
and the exposure of US banks and trading groups
to those markets.

"I'm half frightened and half bearish," Barton Biggs,
the influential chief global strategist at Morgan
Stanley Dean Witter, told CNBC television on
Wednesday.

"I think we are still in a bear market," he said.
"There is still a chance we'll have a rally that is going
to last a couple of weeks and take us up a further 5
to 10 per cent before we plunge into the abyss."

He expects the Dow to eventually fall below 7,000
unless there is a "massive, co-ordinated interest rate
cut around the world" and a new type of financial
architecture is formed to address global economic
problems.

On Wednesday, the Dow lost 237.9 points to close
at 7,842.62, ending its worst third quarter in eight
years with a 12 per cent decline. In early trading
yesterday, the Dow was 168.38 points lower at
7,674.24.

The Dow is down about 1 per cent since the
beginning of the year and 16 per cent below its
record high of 9,367.84, touched in July.

The gloomy outlook comes despite the superlatives
used to describe the US economy, now in its eighth
year of continuous expansion.

A cut in short-term interest rates this week by the
Federal Reserve and hopes for a further loosening
of monetary policy might not be enough to prop up
the market right away, sources said.

"I think investor attention will be riveted on earnings
reports of companies with exposure to Asia and
other areas of international slowdown, and it will
likely take its toll on the market," said A.C. Moore,
chief investment strategist at Dunvegan Associates.

He expects stocks to shed a further 10 per cent
from current levels.

Fourth-quarter forecasts are still rosy at a positive
9.4 per cent, compared with a year earlier, but that
is likely to be trimmed back. Earnings for the year
are expected to be 3.8 per cent stronger.

And, of course, October has a bad reputation.

With the biggest point loss in history in October last
year, the record 22.6 per cent sell-off in 1987, and
the 12.8 per cent tumble in 1929, October is one of
the worst months of the year.

In point losses, the month is at the bottom of the
rankings, according to Yale Hirsch, publisher of the
Stock Trader's Almanac.

Mr Hirsch expects the Dow to break below 7,400
and eventually 7,000, with the final straw coming
from individual investors.

"Most troublesome is the attitude of people who
have been so bullish buying on any dip," he said.
"Suddenly when they turn and things drop, it almost
becomes self-fulfilling."