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                      LEADING DEVELOPMENTS 
 
[source: Jan 12 {Bloomberg} wires; other wires] 
        Jan 12-- BRAZILIAN MARKETS IN TURMOIL. The Brazilian stock 
and bond markets fell to their lowest level in 4 months, and 
futures trading in the Brazilian real currency came to a complete 
halt, in a frightened response to the 90-day debt moratorium 
imposed by the Governor of Minas Gerais, Itamar Franco. 
        The Brazilian Bovespa stock market, after falling a combined 
8 percent on Thursday and Friday of last week, and 5.8% on Monday 
of this week, fell 7.6% today, to close at 5916, its lowest level 
in 4 months. The government's key "C" bond, which had fallen 3% 
yesterday, fell another 2.9% today, also to its lowest level in 4 
months. 
        There are signs of market singularity, which if sustained 
over a few days could lead to panic. For example, the rate on 
one-day certificates of deposit, which is an interest rates 
futures contract--indicating the expectation of future interest 
rates--and the most actively traded futures contract traded on 
Sao Paolo's commodities and futures exchange, soared 522 basis 
points (5.22 interest rate percentage points) to 37.46%, which is 
the highest level since October's 39.0% level. Moreover, in 
Brazil's currency futures market, which normally trades currency 
contracts of up to two to three months in the future, there were 
no takers on real currency contracts that expired in April. When 
no one wants to trade currency futures in the currency of an 
economy as large as Brazil's, this shows simultaneously 
expectation that the currency will be devalued, and widespread 
fright. 
        Further, according to reports from Brazil, today investors 
pulled $1.1 billion in flight capital out of Brazil. Brazil's 
foreign reserves, which stood at $75 billion in August of last 
year, are now $35 billion. 
        "I'm really starting to wonder where Brazil is going to get 
the $60 billion in foreign currency it needs this year," said 
Francisco Gros, Brazil chairman for Morgan Stanley Dean Witter & 
Co, and a former central bank president. "I'm not seeing any 
possibility of debt sales for the moment." 
 
[Source: wires, FNS transcript of NSC briefing on Menem-Clinton 
talks, EIR/Buenos Aires, Jan. 12] 
        BRAZIL'S FINANCIAL CRISIS COLORS ARGENTINE PRESIDENT'S VISIT 
TO WASHINGTON. National Security Council's James Dobbins reported 
today that Presidents Clinton and Carlos Menem discussed the 
Brazil financial crisis during their meeting on Monday, when 
Treasury Secretary Robert Rubin joined their discussions. Dobbins 
would say that Rubin "expressed the importance of supporting 
Brazil and Brazilian reforms as a way of insulating the Western 
Hemisphere from the global economic turndown that's taken place 
elsewhere." 
        On Jan. 12, Menem and Rubin met for breakfast with the heads 
of the IMF complex: IMF's Michel Camdessus, World Bank's James 
Wolfensohn, and the Inter-American Development Bank's Enrique 
Iglesias. The topic, again, was Brazil. Not much was reported 
following the meeting. Rubin told reporters afterwards that 
Brazil's President F.H. Cardoso "is absolutely committed to doing 
what needs to be done and he has the support of the global 
community." Iglesias forecast that the Minas Gerais debt 
moratorium problem "will settle. 
        Back in Buenos Aires, there is panic over the Brazil crash. 
The risk premium on Argentine loans has risen again, and the 
stock market is following Brazil's--down. Currency board thug 
Domingo Cavallo offered his recommendation, that Cardoso use "an 
iron fist" against Itamar Franco. 
 
[Source: wires 12.1.99] 
        WIESBADEN, January 12 -- RUSSIA TIGHTENS FOREIGN EXCHANGE 
CONTROLS, IMPOSES EXPORT TARIFFS ON COMMODITIES. The Russian 
Central Bank on Jan. 11 announced new rules for managing export 
earnings, requiring any Russian exporter to repatriate 75% of 
hard currency revenues, instead of the previous level of 50%. 
That is, exporters are only allowed to keep one quarter of their 
hard currency earnings, while the rest has to be converted into 
Rubles. 
        The new rule already went into effect on Jan. 10. 
Furthermore, the Central Bank now demands that this conversion of 
exporter's hard currency into Rubles be completed within 7 
working days after the export income has been generated, instead 
of the previous 14 working day limit. Meanwhile, the Ruble is 
further falling, reaching 23.06 Rubles per US-Dollar, compared to 
22.40 Rubles on Sunday. 
        According to Reuters, Russian Prime Minister Primakov has 
signed a resolution restricting exports of some commodities by 
introducing a 10% export tariff for 6 months from the date of its 
official publication on. The resolution was already signed on 
January 4th, but has not yet been published. The export tariff 
will be imposed on 7 metals, that is, copper, nickel, aluminium, 
lead, zinc, cobalt, and titanium, but also on several 
agricultural products. 
 
[Source: London Times 12.1.99] 
        WIESBADEN, January 12 -- POPE CONDEMNS AIR STRIKES AS "LAW 
OF THE STRONGEST." According to a report in the London , 
the Pope on Jan. 11 condemned the United States and Britain for 
their bombing raids on Iraq, which solved nothing and if 
anything, had made matters worse. In his annual "state of the 
world" address to diplomats, the Pope said that war "does not 
solve problems, it only complicates them, and leaves the civilian 
population to bear the tragic consequences." 
        The pope added, "International law cannot be the law of the 
strongest, or of a simple majority of states, or even of an 
international organization.... It must be a law which conforms to 
the principles of natural and moral law, which are always binding 
on parties in conflict and the various issues in dispute." 
        On January 22, the Pope will visit Mexico and 4 days later 
will stop in the US to meet Bill Clinton. Concerning the 
collapsed peace process in the Mid East, the Pope noted "it is 
not possible to keep people indefinitely between war and peace 
without the risk of dangerously increasing tension and violence." 
It would be unwise to delay tackling the status of Jerusalem any 
further. Only "honest dialogue, a real concern for the welfare of 
people and respect for the international order" could bring 
lasting solutions to a region where Islam, Judaism, and 
Christianity all had their roots. 
 
[Source: Fed News transript, Berger, 1/12/98] 
        U.S. NATIONAL SECURITY ADVISOR SANDY BERGER GAVE THE FIRST 
ADDRESS ON JAN. 12 AT THE CARNEGIE MEETING ON NUCLEAR 
NON-PROLIFERATION, KICKING OFF A DAY THAT INCLUDED SPEECHES FROM 
INDIA, ISRAEL, RUSSIA, AND CHINA, IN ADDITION TO THE U.S. Several 
of the speeches (which will be reported in the Jan. 14 briefing) 
contained sharply worded statements about nuclear threats and 
violations of the non-proliferation treaty. 
        Berger's speech, made while Defense Secretary Cohen, another 
member of the Gore-dominated "principal's committee," was in 
Japan, delivering "warnings" to North Korea and Iraq, is an 
illustration of the war danger that LaRouche outlined in his 
article on Confederate General Shelton, and why he must retire. 
        Berger said, that ``1998 was a troubling year; a year of 
living dangerously" where "several problems took a turn for the 
worse and perilous new trends have emerged." 
        "All of you here know what the key developments were. In 
May, India and Pakistan conducted nuclear tests that blew the lid 
off South Asia's long-simmering nuclear rivalry. These explosions 
threatened to trigger a far-fledged (sic) nuclear and missile 
race in the region. 
        "Also ominous was the rhetoric that surrounded these blasts, 
suggesting that many politicians and citizens in India and 
Pakistan believe that a nuclear weapons capability provided 
instant great power, status. In July, Iran's test of the Shahab-3 
missile, its version of the North Korean Nodong, extended 
Teheran's capability to target U.S. friends and allies in the 
Middle East as well as our forces in the region. Combined with 
Iran's continued pursuit of nuclear weapons, this missile 
development threatens the stability of the region, as if the 
stability of that region needed further threatening. 
        "In August, North Korea tested a Taepo Dong missile over 
Japan. This test, and the revelation that North Korea's 
constructing a suspicious underground site, have raised questions 
about the North Korean compliance with the Agreed Framework we 
negotiated in 1994 aimed at bringing stability and discouraging 
proliferation on the Korean Peninsula. If that agreement 
unravels, we could quickly return to the environment similar to 
'93 and '94 with increased risk of war and North Korean 
resumption of plutonium production. 
        "In August, Russia's economic crisis had heightened the 
challenge for Russia to control the leakage of sensitive 
weapons-related materials and technology beyond its borders. 
Weapons scientists and institutes face increased financial 
pressures to sell their wares to whomever is in the market, 
including rogue states." 
        "Finally, in December, Saddam Hussein once again broke his 
commitment to cooperate with the U.N. inspectors, ignoring our 
warnings...." 
 
[source: Fed News transcript of Berger speech, 1/12/99] 
        NATIONAL SECURITY ADVISOR SANDY BERGER SPEECH TO THE 
CARNEGIE ENDOWMENT'S NON-PROLIFERATION CONFERENCE ON TUESDAY, 
REFLECTS THE ESCALATION OF TENSIONS GLOBALLY, ESPECIALLY ON THE 
NUCLEAR FRONT. In remarks which were uncharacteristic of other 
U.S. speakers at the conference, Berger made a number of specific 
policy statements on Iraq (see separate slug); on North Korea, 
and on the Russia situation. 
        On Russia, where the post-Iraq strain continues, Berger 
announced that three ``entities'' in Moscow were being put under 
``economic penalties'' for providing sensitive nuclear or missile 
technology to Iran. He stressed that the U.S. has the authority 
to take this action, which had previously been taken in July, 
1998, when Pres. Clinton imposed penalties on 7 other 
institutions. 
        "I want to announce that today the United States is imposing 
economic penalties against three additional Russian entities -- 
the Moscow Aviation Institute, Mendelyev University, NIKIET, or 
the Science Research and Design Institute of Power Technology -- 
for providing sensitive missile or nuclear assistance to Iran. 
Last July we took action against seven others. 
        "Let me be very clear. The administration has authority to 
act against entities that violate international non-proliferation 
standards, and we will use that authority to protect our 
security. In the end, though, the most effective shield against 
proliferation from Russia is not U.S. penalties but a Russian 
export control system that is designed to work and does. Only 
Russia can police its own borders, factories and technology 
industries." 
 
[source: FNS transcript of remarks of U.S. National Security 
Adviser Sandy Berger at Carnegie Endowment Conference on 
Non-Proliferation, Jan. 12, 1999] 
        U.S. NATIONAL SECURITY ADVISOR SANDY BERGER ON IRAQ.  At his 
speech to the Carnegie Endowment for Peace conference on 
non-proliferation on Jan. 12, Sandy Berger had the following to 
say with regard to Iraq: 
        ``On Iraq, the administration will use all means, including, 
if necessary, additional military force, to obtain Saddam's 
compliance with Iraq's commitments regarding weapons of mass 
destruction and with the relevant Security Council resolutions. 
We will adhere to our position that disarmament under these 
resolutions is the only path to sanctions relief.  And we 
continue to believe that UNSCOM is the appropriate entity to 
verify and monitor Iraq's disarmament. 
        ``It is up to Saddam to decide whether he wants sanctions 
relief by giving up his weapons of mass destruction.  In the 
meantime, we will be ready to act again if we see Iraq rebuilding 
a WMD capacity.  We will also continue to offer and enhance our 
humanitarian assistance to the Iraqi people, and most 
importantly, work toward the day when Iraq has a government that 
respects its people and lives in peace with its neighbors.  It is 
clear that real disarmament in Iraq will come only when there is 
a new government in Baghdad.'' 
 
                             ECO-FIN 
 
Jan. 12 (EIRNS)--THE STOCK MARKET IS FOR YAHOOS. Yahoo!, the 
Internet site, saw its stock rise 71 points--21%--to 414.5 on 
Jan. 11, raising its market capitalization to $41 billion, up $7 
billion in just one day. (The {combined} market capitalization of 
USX-Steel and Bethlehem Steel is just under $3.7 billion, or 
roughly half of what Yahoo! grew in just one trading session.) 
America Online had a more modest day, rising just 19 
points--13%--but raising its market capitalization $8.5 billion 
to $75.7 billion, moving it ahead of Ford, which it had trailed 
by $7 billion as of Friday, Jan. 8. Amazon.com saw its market 
share rise $3.9 billion, and Internet search engine Excite rose 
$1.2 billion, to $4.3 billion, a 40% increase. Broadcast.com rose 
a whopping $87--44%--for the day, CMGI rose over $70, and eight 
other Internet stocks rose more than $20 a share yesterday. 
        Some selected market capitalizations, as of the Jan. 11 
close, in billions: 
 
        Company   Cap. 
        -------------- ----- 
        America Online 75.65 
        Ford  73.48 
        Du Pont  66.99 
        General Motors 56.33 
        Yahoo!  40.91 
        Boeing  35.09 
        Amazon.com  29.22 
        Dow Chemical  21.51 
        Caterpillar  19.01 
        Lockheed  15.73 
        eBay  11.74 
        USX-Steel   2.40 
        Bethlehem Steel  1.28 
        
 
 
Wiesbaden, 12 Jan. (EIRNS) -- THE FIGHT BY THE TONY BLAIR 
GOVERNMENT TO ABOLISH THE HOUSE OF LORDS IS A LIFE OR DEATH 
BATTLE FOR BLAIR,' commented the above London source. "Last 
session of Parliament the Lords blocked repeated initiatives of 
Blair and he has to get them out if he is to impose his agenda. 
But it is a fierce fight whose outcome is by no means clear; it 
cuts to the heart of the British establishment. As well Rupert 
Murdoch at this point is going full steam in his press against 
Blair, underscoring a definite shift against Labour." 
 
[Source: Associated press & combined wires, 1/12/98] 
        THE RUSSIAN GOVERNMENT IS PLANNING TO SPEND ABOUT $4.6 
BILLION ON FOREIGN DEBT SERVICING, according to figures released 
during a session of the Duma (Parliament) on the budget, reports 
{Associated Press} from Moscow.  The wire report says that the 
Foreign Ministry confirmed this outlook explaining that the 
government "has no more than $5 billion" to service foreign 
debts.  Russia has foreign debt of $17.5 billion that matures 
this year. 
 
[source: Jan 12 AP wire] 
        Jan 12-- WORLD RAW STEEL PRODUCTION FALLS 2.5% IN 1998. 
Global raw steel output fell to 778.2 million metric tons, down 
2.5 percent from 798.5 million metric tons, the U.N. Economic 
Commission for Europe reported today. During 1998, steel output 
was increasing or steady during the first part of the year, but 
declined at a growing rate toward the end of the year, indicating 
the global downturn of many types of basic production, including 
steel, machine tools, and farm equipment. 
        Within the overall downturn, the raw steel output of China, 
the world's largest producer, increased. The table shows the 
output of the three largest steel producers: 
 
                     - Raw Steel Output - 
                 (in millions of metric tons) 
 
                 1998       1997       Change in Production 
                                      1998 compared to 1997 
 
China            114.0      108.0           5.6% 
United States     97.5       98.5        -  1.0% 
Japan            104.5       93.6        - 10.4% 
 
        The raw steel output of eastern Europe fell by 6.3%. [ref] 
 
[source: Jan 12 wires] 
        Jan 12-- DOLLAR RISES AGAINST THE YEN... FOR THE MOMENT. The 
dollar closed at 112.50 Japanese yen in Tokyo today, after 
falling as low as 108.21 yen on Monday, which had constituted a 
28 month low. In support operations today, the Bank of Japan 
reportedly bought between $1 and $2 billion worth of dollars. 

 
                          UNITED STATES 
 
        Jan. 12 (EIRNS)--CLINTON RESPONDS TO HOUSE ARTICLES OF 
IMPEACHMENT. Lawyers for President Clinton filed a 13-page answer 
to the Articles of Impeachment yesterday in the U.S. Senate.  The 
President responded by asserting that the charges in the Articles 
of Impeachment "do not permit the conviction and removal from 
office of a duly elected President." 
        "The charges in the articles do not rise to the level of 
"high Crimes and Misdemeanors" as contemplated by the Founding 
Fathers, and they do not satisfy the rigorous constitutional 
standard applied throughout our Nation's history," the  preamble 
to the answer stated. "Accordingly, the Articles of Impeachment 
should be dismissed." 
        The White House did not file an actual motion to dismiss the 
articles, which will not be done until after the first round of 
presentations and questioning in the Senate trial. 
 
[source: White House briefing, AP, Washington Post, Jan. 12] 
        HOUSE MANAGERS FILE LEGAL BRIEF, READS LIKE "A CHEAP 
MYSTERY."  The House of Representatives impeachment managers 
filed a 105-page trial memorandum on Jan. 11, which the White 
House described as an overblown account that "reads like a cheap 
mystery." 
        "I think there is overblown rhetoric in there about sinister 
plots," White House spokesman Joe Lockhart said. 
        Part of what Lockhart was referring to, was a statement in 
the House brief which said that the Senate must consider the 
entire pattern of the President's actions (which some interpret 
as making an argument for the introduction of the now-famous 
"secret evidence").  "It is essential to avoid considering each 
event in isolation, and then treating it separately," the House 
memo warns darkly. "Events and words that may seem innocent or 
even exculpatory in a vacuum may well take on a sinister or even 
a criminal connotation when observed in the context of the whole 
plot." 
 
        Jan. 12--DID REHNQUIST LIE UNDER OATH? There is abundant 
evidence that Chief Justice William Rehnquist lied under oath 
during his Senate confirmation hearings in 1971 and again in 
1986. 
        The current issue of {New Federalist} reprints a 1992 {NF} 
article which describes the arguments Rehnquist made as a clerk 
to Supreme Court Justice Robert Jackson in 1952, in which 
Rehnquist contended that the Supreme Court should uphold 
segregation. During his first confirmation hearing for the 
Supreme Court, in 1971, Rehnquist was asked about a memorandum he 
had written which argued that the segregationist "separate but 
equal" doctrine should be upheld by the court. Rehnquist stated 
that the memorandum represented Justice Jackson's views, not his 
own. This was disputed by a number of people at the time, 
including Jackson's longtime secretary and confidant Elsie 
Douglas, who said that Rehnquist's story was "incredible on its 
face," and that he had "smeared the reputation of a great jurist" 
by attributing segregationist views to Justice Jackson. 
        In 1986, when Rehnquist was nominated for Chief Justice, the 
issue came up again. Despite new evidence which had surfaced 
concerning his 1952 memorandum--some of which was reported in the 
1975 book on the school desegregation cases, {Simple Justice} by 
Richard Kluger--Rehnquist stuck to his story, under questioning 
by Senator Edward Kennedy and others. Under oath, Rehnquist 
maintained that the "I" in the memo (it was written in the first 
person), referred to Jackson, not himself. 
        As legal writer Jeffrey Rosen puts it in the January 11 
issue of the {New Yorker}: "it all depends on what I mean by 
`I.'" 
        In 1971 and again in 1986, Rehnquist was also confronted 
with evidence that he was part of a Republican party effort to 
prevent blacks and hispanics from voting in Arizona in the early 
1960s. In his 1986 hearings, Rehnquist testified that he had 
never directly challenged any voters at the polls. Rehnquist 
claimed his role was to "arbitrate" disputes, but a former 
federal prosecutor, James Brosnahan, who had collected statements 
about voter intimidation for the FBI, testified otherwise. 
        Another eyewitness, Dr. Sidney Smith, testified that he had 
seen Rehnquist confront two black men at a polling place, and 
tell them; "You have no business being in this line trying to 
vote. I ask you to leave." 
        As we reported in the Jan. 11 morning briefing, the {Arizona 
Republic} of Phoenix has reported more details of the 1962 and 
1964 incidents, and notes that some local citizens who were 
involved in the incidents with Rehnquist "think he lied, under 
oath, at both hearings." 
        One is Manuel Pena, a 30-year veteran of the Arizona state 
legislature, who was a poll-watcher in south Phoenix during the 
1962 elections, and who had confronted Rehnquist who was 
illegally challenging voters inside a polling place. In fact, 
Pena and Rehnquist almost came to blows. As Pena puts it: "It's 
just ironic that we have somebody presiding over a Senate that 
may find the President guilty of perjury, who is himself guilty 
of lying under oath." 
 
                         EASTERN EUROPE 
 
[Source: Nezavisimaya Gazeta, Dec. 29] 
        Jan. 12--RUSSIAN TOPOL-M PUBLICITY. The Dec. 29 Nezavisimaya 
Gazeta article, which reported Defense Minister Marshal 
Sergeyev's remarks about the Topol-M (SS-27) ICBM (in briefing of 
Jan. 10), went on to provide more technical specifications of the 
missile, as well as some nuclear saber-rattling that is 
reminiscent of the mid-1980s "Global Showdown" period, but with a 
degree of detail never heard in the pre-glasnost Soviet Union. 
Igor Korotchenko's article, promoting the qualities of Topol-M, 
is set on two stages at once: the fight within the Russian 
command, over resource allocation and the force structure, and, a 
shift towards "doomsday" military relations globally (cf. 
LaRouche, "Why Gen. Shelton Must Retire Now"). 
        Korotchenko wrote, "The Russian military and political 
leadership intends to devote priority attention to the Topol-M 
program, which will be financed, regardless of the economic 
situation in the country." Topol-M was developed at the Moscow 
Heat Engineering Institute in versions for stationary basing in 
silos, or for ground-mobile launch vehicles. Korotchenko reported 
the system's launch weight, throw-weight, warhead, and so forth. 
He asserted, "It should be noted, that the Topol-M is capable of 
successfully overcoming not only the existing, but also 
prospective ABM systems of the United States of America." 
        The Nezavisimaya article named five officers responsible for 
the deployment of the first Topol-M ICBMs, from 
Commander-in-Chief of the Strategic Rocket Corps Gen. Col. 
Vladimir Yakovlev, down to commander of the 104th Rocket Regiment 
Col. Yuri Petrovsky--"and several other officers, who carried out 
their military and professional duty under the difficult 
circumstances of the work being only 50% financed, and delays of 
many months in the payment of monetary compensation." For this 
reason, the 104th regiment received from Marshal Sergeyev the 
first-ever award pennant, "For Courage and Military Valor." 
        In conclusion, Korotchenko wrote that the Topol-Ms would be 
on active duty as of Dec. 30. "Although the flight computers of 
all ten ICBMs are set to zero, the process of entering their 
combat flight data to strike targets on the continental USA, if 
the necessity arises, will take a little less than one minute." 

 
[Source: Komsomolskaya Pravda, via RussiaToday online, Jan. 12] 
        Wiesbaden, Jan. 12--FOUR RUSSIAN GENERALS RESIGNED IN 
PROTEST OF THE TOPOL-M PROGRAM, yesterday, today's issue of 
 reported. Their protest also goes aagaint 
the merger of their forces with the strategic missile forces. 
        The four generals, the commander of the early warning 
missile attack forces, Gen. Sokolov, and his three deputies, 
submitted letters of resignation to Strategic Missile Troops 
commander Gen. Vladimir Yakovlev. Sokolov openly voiced his 
opinion that the popular Topol missile systems should not be 
produced and used in combat any longer, because they are 
"old-fashioned systems," and U.S. missile defense systems could 
easily bring the Topols down, he said. 
        He added it would have been wiser to develop intelligence 
systems, rather than spend large amounts of money on nuclear 
missiles, which are already plentiful in Russia. 
 
[Source: RussiaToday online, Jan. 12] 
        Wiesbaden, Jan. 12--RUSSIA PRESENTED THE FIRST PROTOTYPE OF 
ITS STEALTH BOMBER, developed by MIG, yesterday. The aircraft, 
known as "Project 1.42" among western experts, is said to have 
the same capacities as the American version. The project of a 
genuine Russian version of stealth bomber technology has been 
debated in Russia, over the past eight years. The Primakov 
government wants to go ahead with funding of the program, now. 
         According to {AP}, Defense Minister Sergeyev and Russian 
Orthodox Metropolitan Kirill attended the ceremony.  According to 
{AP}, the designer of the fighter, Mikhail Korzhuyev said that if 
this plane was used "to beat off the Anglo-American raids on 
Iraq," that 90 percent of all launched "guided weapons, including 
cruise missiles" would be shot down. 
 
[Source: Itar-Tass, Jan. 11] 
        Wiesbaden, Jan. 12--PRIMAKOV SIGNED A DECREE ON SETTING UP A 
NEW SPACE ROCKET COMPLEX, which will be constructed at Svobodny, 
yesterday. The new complex will be of the Strela type, a complex 
that already exists. 
        The Svobodny Cosmodrome project will be run under the 
federal Russian space program, and will be funded from 
extra-budget funds. From this January on, already, the 
mcahine-building research and production amalgamation and the 
Moskovsky Institut Teplotekhniki (Institute of Heat Engineering) 
state enterprise will participate in financing the maintenance of 
Svobodny Cosmodrome on the basis of agreements with the Russian 
Defense Ministry. 
        The procedure of creating and operating the infrastructure, 
and the maintenance at the new complex will be worked out in 
cooperation between the defense ministry, the space agency, and a 
number of (select) enterprises, along the model that is already 
applied at the Start and Strela complexes. 
 
                             AFRICA 
 
Jan. 12 -- SUDAN AGRICULTURAL PRODUCTION REPORT. In a press 
released issued by the SAudan Embassy in London January 4, 
encouraging data on Sudan's agricultural production in 1998 are 
given. The figures make quite clear, that the famine still 
threatening vast layers of the population in the south, is due to 
the continuing war of the SPLA's John Garang, and his 
international masters. 
        The press release reads as follows: 
        "According to a report by the Minister of Agriculture and 
Animal Resources, agricultural production of seeds and grains for 
the 1998-1999 season has been estimated at 6.2 million tons, the 
highest rate ever inm the history of the country, and the actucal 
production area was 32.1 million feddans. The production area for 
sorghum was increased by 20% compared to last season, in spite of 
the fact that many cultivated areas were flooded as a result of 
heavy torrential rains. The production of sorghum was 4.6 million 
tons and that was much higher than last season. Production area 
for millet was increased by 4% compared to last season and the 
rate was over a million tons. Wheat produced was 400,000 tons 
this season. Sudan has signed contracts to export 800,000 tons of 
grain to European and Middle Eastern markets. Rice was 
traditionally grown, production of oil seed is estimated to 1.2 
million tons. Groundnut production amounted to 800,000 tons, 
sesame to 274,000 tons, sunflower to 1,000 tons and cotton 
106,000 tons. 
        "Sudan consumes 2.4 tons of grain annually. 
        "We therefore believe this is a solid background to keep in 
mind when some reports start circulating about 'famine' in Sudan. 
What these reports do not mention is that famine is actually 
created by the SPLA rebels in those areas controlled by them. The 
rebels do not allow the civilians, who are virtually captives, to 
build their lives nor do they allow them to go anywhere else 
where they could do that. The SPLA rebels keep rejecting the 
Sudanese Government's offer for a comprehensive ceasefire or a 
negotiation to a political settlement, as it is in their benefit 
for the famine situaiton to persist, to use it as a means for 
their political goals, especially when they are not affected by 
it but are fed on a regular basis." 
 
Jan. 12 -- SUDANESE GOVERNMENT DENIES CHARGES OF RELIGIOUS 
PERSECUTION. In a press release issued through the Sudan Embassy 
in London Jan. 6, certain facts are presented, to counter the 
"smear campaign" against the country, around the case of two 
Christian priests being put on trial. The two are accused of 
having been involved in exploding bombs in Khartoum in June 1998. 
The release explains that the martial law and court system under 
which they are being tried, dates back to 1986, i.e. before the 
current government came into power. It adds that civilians may be 
tried in this court, if they attack military targets, according 
to the law. The lawyer for the accused, chosen by them, is a 
southern Sudanese, a Christian and a former Vice President under 
the NImieri regime, named Abel Alier. 
        The court proceedings, which are open, are being attended by 
European diplomats. The suspects were allowed visits and gifts by 
relatives, and the Vatican Ambassador during the holidays, etc. 
The release concludes, "Talking at this time about the sentence 
they may get, is mere speculation." 
 
Jan. 12 -- SUDAN HOSTS OAU MINISTERIAL MEETING ON REFUGEES, 
RETURNEES AND DISPLACED PERSONS IN AFRICA. The conference of the 
organization of African Unity, was held in the Sudanese capital, 
Khartoum, from Dec. 13-15, 1998. The decision of the Sudanese 
government to ghost the important meeting came "in light of 
Sudan's vast experiences on refugees as one of the first 
countries in Africa to receive and host large numbers of refugees 
since the early sixtioes," according to a press release issued 
before the conference. It noted, that Sudan was currently hosting 
"1.1 million refugees from some of its neighbors," and "has a 
long history of hospitality towards any person who sought refuge 
in its territories." 
        The meeting in December, attended by OAU member states, the 
office of the UNHCR, and international organizations, issued a 
final declaration. In it, the group notes the deteriorating 
situaiton of refugees, returness and displaced persons, and 
recognizes the main causes "are situated within Africa itself" 
and says the "eradication of these causes is primarily the 
repsonsability of African countries with the support of the 
international community." The declaration notes with concern the 
"diminishing donor commitment to provide humanitarian assistance" 
but expresses appreciation for assistance rendered by the UNHCR, 
ICRC, etc. 
        The declaration deals also, albeit diplomatically, with the 
fact that humanitarian assistance is often used by the 
belligerents, or to support belligerents. For example: "Bearing 
in mind also the security concerns of States facing problems of 
large scale refugee influx and internally displaced persons and 
the responsibility of States and non-state actors to ensure the 
security of humanitarian workers as well as the need to maintain 
the civilian and humanitarian character of the refugee camps and 
settlements,..." express concern about the growing problem, and 
urge the OAU countries to address the causes, etc. 
        The declaration calls on countries to accede to the relevant 
conventions on refugees, and to adopt the necessary laws, 
nationally, to implement them; it reaffirms the "right to return 
and also the principle of volontary repatriation" and appeals to 
countries to make this possible; it calls for integrating those 
who cannot return home. the declaration expresses the gravest 
concern over the rate of increase in the displaced persons and 
refugees, and appeals to internaiotnal bodies to generously 
contribute" to alleviate the problem. It urges all member-states 
to guarantee the security of humanitarian personnel and "request 
organizations and aid workers to abide by the national laws and 
regulations of the countries where they operate." 
        Most importantly, they "urge Member States and all other 
actors, in consultation with the OAU and UNHCR, to separate armed 
elements from civilian refugee population to ensure the civilian 
and humanitarian character of refugee camps and settlements." 

 
                           MIDDLE EAST 
 
Jan. 12 -- IRAQ CRISIS ESCALATING DAILY. In accordance with 
British-American military plans to renew aggression against Iraq 
by the end of Ramadan, incidents are occurring daily, and the war 
rhetoric is heating up as well. Another clash was reported Jan. 
11, when US fighter jets attacks Iraqi missile sites, allegedly 
after Iraqi air defense missile systems had iluminated them. Two 
F-15s dropped precision guided bombs in a missile launmch site, 
and an F-16 fired a HARM missiles at another target. 
        A report in the Jordan Times quoted US officials in 
Washington, saying that the UK and US would continue their 
monitoring of the no-fly zones. NSC spokesman David Leavy said, 
"The coalition (sic) will continue to enforce the no-fly zones 
vigorously. These provocations are a reminder of the threat that 
President Saddam [Hussein] poses to the region and the need for 
vigilance in containing that threat." 
        Kuwait has reportedly put its army units on "maximum combat 
alert," according to the same report. Kuwait is said to have 
15,300 active forces and 24,000 reserves, according to the London 
International Institute for Strategic Studies, and the Kuwaiti 
defence Minister Sheikh Salem Sabah Al Salem Al Sabah, said that 
measures would be taken to call up the reserves. 
        Iraqi statements Jan. 10, to the effect that it would no 
longer recognize the validity of the UN resolutions, including 
the one demarcating the border to Kuwait, were interpreted in 
Kuwait as threats. 
        US Secretary of Defense Cohen again said on Jan. 11, that 
the US would move militarily if Kuwait or other neighbors were 
threatened by Iraq. He pointed to Iraq's possible refusal to 
recognize Kuwait as a violation of the UNSC resolutions. In 
response to questions regarding plans for post-Ramadan attacks, 
he refused to be explicit, but said, "I wouldn't want to 
speculate on what we might do in the future." 
        According to the Independent Jan. 12, "It is possible the US 
may deploy more forces to defend Kuwait." It referes to a meeting 
of Clinton with his national security team Jan. 9, during which 
this was discussed.  
  
[Source: Ha'arett, January 12, 1999] 
        SHIMON PERES CALLS FOR A NEGOTIATED PALESTINIAN STATE: 
Speaking before the Palestinian legislature, Shimon Peres called 
for the Palestinians to forge and independent state through 
negotiations. "It is our deep hope that the Palestinians will 
gain independence. It's in our common interest to see a 
Palestinian state in place as a result of negotiations--a stete 
that lives democratically and flourishes economically." Peres 
received a standing ovation, although only 20 of the 88 
legislators were there. 
        U.S. Congressman Thomas Lantos also made a plea for the 
Palestinians not to unilaterally declare a state on May 4. "My 
plea to my Palestinian friends is just a simple plea. Don't do 
anything on May 4 because all hell will break loose and your 
achievments will go down the drain." 
        Also present at the meeting were other board members of the 
Peres Center for Peace who are in the region for a meeting of 
that organization's board. This includes Mikhail Gorbachev, 
Archbishop Desmond Tutu and former South African President F.W. 
de Klerk. 
        Both Henry Kissinger and Egyptian Foreign Minister Amir 
Moussa were also on hand at the Center's event held in Tel Aviv. 



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