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To: goldsnow who wrote (22493)11/1/1998 11:50:00 PM
From: Giraffe  Read Replies (1) | Respond to of 116758
 
Global Intelligence Update
Red Alert
November 2, 1998

Iraq Moves to End Game on Eight Year Old Confrontation

Saddam Hussein has decided to test the United States once again,
leaving it to the U.S. to decide whether it wants to have a
crisis or not. Saddam's decision to stop cooperating with UN
inspectors is not surprising. The United Nations had been
scheduled to undertake a comprehensive review of the embargo on
Iraq. On Friday, the U.S. blocked efforts by Russia, China and
France to begin steps for lifting the embargo, effectively
blocking the review and committing the United Nations to
continuing the embargo indefinitely. Saddam, sensing a major
split developing in the United Nations and feeling that he had
nothing to lose and a great deal to gain, responded by, in
effect, canceling the UN weapons inspection program. It is now
up Washington to make the next move.

Saddam has followed an extremely rational and quite effective
policy since his defeat in Kuwait. The policy has had three
parts. First, he has focused ruthlessly on maintaining his power
domestically, crushing all opposition and frustrating all
attempts by foreign intelligence services to encourage and
support domestic resistance to his regime. Second, Saddam has
worked very hard to break apart the international coalition that
defeated him in 1991. He has done this regionally by trying to
manipulate the balance of power among Iran, Turkey, Syria and the
Arab gulf states. He has worked against the coalition
internationally by trying to split the United States off from its
Gulf War allies, particularly from Russia. Finally, he has
carefully but persistently resisted attempts to impose an arms
control regime on his country by limiting access to sites,
denying agreed upon facilities, and harassing the inspectors. He
has used periodic crises as a means of testing, manipulating, and
wearying the United States. Saddam has played his hand
brilliantly.

Saddam's great advantage in this game is that it was the only
game he was playing and, therefore, he could devote his full
attention to it. His main opponent, the United States, was
engaged in multiple games simultaneously. It could not afford to
pay its undivided attention to Iraq. In fact, with a plethora of
other international problems, the U.S. really couldn't afford to
devote very much attention at all. Saddam understood this and,
being a patient man, has carefully expanded his range of actions
until this weekend, when he effectively announced that the
armistice terms of the Gulf War were null and void. Saddam now
waits to see whether there will be any American response and what
form it might take.

Saddam noted the end of the last crisis with interest. Last
February, the United States was threatening air strikes unless
Iraq allowed weapons inspectors to go about their work. The U.S.
discovered, to its shock, that much of its regional and
international coalition had dissolved. They were simply not
prepared to back the use of force against Iraq. The Saudis were
not prepared to allow the United States to conduct an air
campaign from their soil. The Turks were also uncomfortable. As
important, China, Russia and France were all opposed to the use
of force. Together, this meant that the United States did not
have the facilities needed to conduct a sustained air campaign,
and that it could lose the legitimation of the United Nations if
it went it alone.

The United States was increasingly isolated in its Iraq policy
because its coalition partners were not particularly interested
in the Iraq problem anymore. The question of oil prices was much
more important in the Gulf than was Saddam Hussein. The question
of overwhelming American politico-military power was much more
important to Russia, China and France than was the question of
Saddam's power. Thus, the United States allowed itself to take
an apparent concession by Saddam as a valid excuse for ending the
crisis, and went away mumbling vague threats if Saddam violated
his promises. Of course, Saddam had no intention of keeping his
promises, since he had no intention of allowing the UN to inspect
his weapons facilities. Washington knew that, of course, but was
left without many effective cards. Saddam patiently waited for
an opportune moment to create another crisis, knowing that each
new crisis would both increase the stress in the anti-Iraqi
coalition and increase general American boredom with the whole
Iraqi question. Saddam picks his moments exquisitely.

The U.S. is just coming off a crisis with Serbia. Saddam has
been watching the Serbs carefully, and he knows that they have
gone to the Saddam Hussein School of diplomacy. The Serbs have
no intention whatever of abandoning Kosovo but they don't relish
NATO air strikes. Therefore, they are mostly following their
agreements, and will wait a while before blatantly breaking them.
But in this case, they can't wait too long, or the Albanians in
Kosovo will take over and entrench their power under U.S.
guardianship. So, Saddam knows that the U.S. will shortly have
to face a fact that is already obvious to everyone -- the Serbs
are not going to leave Kosovo. Now Saddam has a dream -- acting
in concert with other countries like Serbia and North Korea to
give the United States one crisis too many. He is piggy-backing
on Kosovo.

Second, his old nemesis, Iran, is busy trading insults with the
Taleban in Afghanistan. A large part of the Iranian army is
deployed to the east, along the Afghan border. Saddam's
nightmare of Iranian-U.S. collaboration against him appears
pretty unlikely at present because of this, and because of the
ongoing political crisis in Tehran. So his eastern frontier is
secure.

Most important, Yeltsin is finished. Primakov, an old Middle
East hand from his KGB days, is in control of Russia. Primakov
is not only an old friend of Iraq, but he doesn't really care
much for the United States. Most important, the U.S. is not
giving Primakov what he wants -- a great deal of money to try to
refloat his bankrupt economy and get Russia through what promises
to be a terrible winter. Primakov knows better than to expect
charity from the U.S. He also knows that the U.S. does not want
him reasserting his influence in the Middle East and undermining
U.S. policy in the region. Therefore, that is precisely what he
is going to do, as this is the only lever he really has at this
point. If this doesn't work, then Russia has no further use for
the U.S. anyway, and will be looking to renew old friendships.

Saddam is shrewd and he is patient. He has now posed a terrific
problem for Washington. He has simply repudiated his agreements
from the armistice of 1991. Technically, the war should resume.
Technically, the U.S. is not only free, but pledged, to resume
military operations against Iraq. But the United States has big
problems. U.S. military leaders have been making it publicly
known that the tempo of operations imposed on them by the Clinton
Administration, coupled with massive budget cuts, has severely
limited the U.S. military's effectiveness. In our judgement,
this is not simply posturing for more budget dollars. U.S.
forces are quite weak. The logistical demands of simultaneous
operations in Kosovo and the Persian Gulf on the scale required
in both cases may simply be beyond the capacity of U.S. forces.
It can be done, but it will be rough. Diplomatically, the U.S.
is pretty much alone.

Domestically, of course, there are some attractions to a crisis.
Quick air strikes probably would boost Democratic chances in this
Tuesday's elections. But it takes a while to organize air
strikes. If they do happen in the next 48 hours, the suspicion
that they were planned before Saddam's statement will be strong,
and probably well-ground. After the election, there are the
impeachment hearings. But Clinton is still smarting about "wag
the dog" accusations after the Afghan-Sudan attacks. It could
hurt him more than it helps him.

It seems to us that Saddam is now testing the waters for the end
game. In his mind, the objective foundations of America's anti-
Iraqi policy have dissolved. The possibility of a sustained air
campaign is low and he thinks he can survive the kind of quick
air strikes the U.S. has come to favor. Moreover, Saddam is
calculating that, like last spring, the United States will grasp
at any excuse not to strike. He will therefore eventually give
some vague promise that no one expects him to keep, allowing the
U.S. to get off the hook gracefully.

In our view, Saddam is on the verge of checkmating the United
States. The old coalition is gone. U.S. forces are spread too
thin to be effective. An effective campaign against Iraq would
require massive call-ups of reserve units and several months to
prepare. Without Saudi backing, it probably can't be done. If
he can force the United States to back-off, Saddam is home free,
at least as far as the U.S. is concerned. That leaves two other
problems -- Israel and Iran. Neither wants to see Saddam
unchained, and both have some means of trying to get him under
control. Indeed, as the U.S. tires of its endless containment of
Iraq, this could be exactly what Washington has in mind -- let
the Israelis and Iranians worry about Saddam. This isn't a bad
policy, so long as it is a policy and not simply exhaustion
talking.

The American problem is that its enemies are defining its foreign
policy agenda. The system of American commitments and guarantees
casually entered into has created a situation where any minor
power can create a crisis at will and then vaguely capitulate if
they wish. Serbia, Iraq, Korea and the rest define the tempo of
the relationship, not the other way around. Moreover, the
geographical diversity of U.S. commitments means that the U.S. is
not in a position to impose a definitive resolution on an
adversary. The U.S. therefore lurches from confrontation to
confrontation on a schedule set by its opponents. The problem is
in the concept driving the policy. So long as U.S. foreign
policy is driven primarily by ad hoc commitments based on passing
sentiment rather than on strategic principles, the ad hoc will
continue to drive U.S. policy. Nowhere is this clearer than in
Iraq, where U.S. commitments, interests, and capabilities have
now hopelessly diverged. Washington will spend this week trying
to wire them together again. Saddam will watch and retreat or
press forward as events warrant. Saddam knows that time is on
his side.



To: goldsnow who wrote (22493)11/2/1998 5:49:00 AM
From: Bobby Yellin  Read Replies (1) | Respond to of 116758
 
Yen on the offensive vs dollar and mark in Europe
biz.yahoo.com
"German authorities' debate regarding interest rates continued, with Bundesbank deputy governor Juergen Stark saying on
Monday that high budget deficits could force an interest rate hike by the European Central Bank." isn't that interesting especially with Germany's high unemployment.
also can't find the article which mentioned quote from Japanese official talking about high debt in USA..