IRAQ BLINKS -- PROVISIONALLY

C O N F I D E N T I A L STATE 244856



FOLLOWING BAGHDAD MRN 04277 DTG 26 JUL 90 SENT ACTION

SECSTATE WASHDC INFO ARAB LEAGUE COLLECTIVE BEING

REPEATED FOR UR INFO:



QUOTE : C O N F I D E N T I A L BAGHDAD 04277



E.O. 12356: DECL:OADR

TAGS: PREL, KU, IZ

SUBJECT: IRAQ BLINKS -- PROVISIONALLY



1. CONFIDENTIAL - ENTIRE TEXT.



2. SUMMARY. SADDAM HAS BLINKED: HOSTILE

REFERENCES TO KUWAIT HAVE DISAPPEARED FROM THE

MEDIA AND IRAQ WILL ATTEND A MEETING WITH

SENIOR KUWAITI OFFICIALS IN JEDDAH. BUT

ANTI-KUWAITI SENTIMENT CONTINUES STRONG HERE

AT ALL SOCIAL LEVELS, DRIVEN BY JEALOUSY,

BITTERNESS AND CONTEMPT. END SUMMARY.



WHAT DISPUTE?



3. AS FAR AS IRAQ'S GOVERNMENT-DIRECTED MEDIA

JULY 26 ARE CONCERNED, THE DISPUTE WITH KUWAIT

IS A "SUMMER CLOUD." GONE ARE THE HEADLINES

OUTLINING KUWAITI MISBEHAVIOUR, GONE ARE THE

AD HOMINEM ATTACKS ON KUWAIT FONMIN SABAH,

GONE ARE THE EDITORIALS OUTLINING IRAQ'S CASE.



4. INSTEAD, THE MEDIA FOCUS IS BACK ON DOMESTIC

AFFAIRS (THE DRAFT CONSTITUTION) AND THEY

HIGHLIGHT CONTINUING DIPLOMATIC ACTIVITY:



- SADDAM RECEIVING A PHONE CALL FROM MUBARAK.

(BUT MUBARAK IS NOT GIVEN CREDIT FOR MEDIATING

AND THERE IS NO/NO MENTION OF THE UPCOMING

KUWAIT-IRAQI MEETING IN JEDDAH).



- SADDAM'S ENVOYS DELIVERING THEIR MESSAGES IN

THE GULF AND MAGREB.



- SADDAM MEETING WITH ARAB LEAGUE SYG KLIBI TO

DISCUSS RECENT DEVELOPMENTS IN THE REGION AND

ARAB ARENA. (ALTHOUGH A PHOTOGRAPH OF KLIBI

WITH SADDAM MADE THE FRONT PAGES, THE MEDIA

(AND THE GOI) DOWNPLAYED HIS VISIT. HE WAS

SEEN OFF AT THE AIRPORT BY A MERE MFA UNDER

SECRETARY. KLIBI PROVES NOT TO BE A

MAHMUD RIAD, BUT THEN TUNISIA IS NOT EGYPT).



- SADDAM "SUMMONING" (VICE THE USUAL IRAQI

WORD "RECEIVING") THE AMERICAN AMBASSADOR,

FEATURED IN ALL THE MEDIA.



5. SIGNIFICANTLY, THE IRAQI MEDIA HAVE DROPPED

MENTION OF THE US/UAE JOINT EXERCISES. THE

ARMY'S DAILY "AL-QADISSIYAH" GIVES FRONT PAGE

COVERAGE TO JORDANIAN PRESS REPORTS LAUDING

SADDAM'S IDEA FOR ESTABLISHING AN ARAB FUND

(WHICH IS POPULAR IN JORDAN, EGYPT AND YEMEN)

AND CONDEMNING THE US NAVAL PRESENCE IN THE GULF.

EDITORIALS AND COMMENTARIES RETURN TO EARLIER

THEMES: THE DANGER OF SOVIET JEWISH IMMIGRATION

TO ISRAEL; THE NEED FOR ARAB UNITY; THE USG'S

DESIRE FOR HEGEMONY IN THE GULF.



IRAQ BLINKED



6. THAT SADDAM ACCEPTED MUBARAK'S MEDIATION

AND AGREED TO A MEETING OF OFFICIALS IN JEDDAH

REINFORCES OUR VIEW THAT THE CENTRAL ISSUE FOR

IRAQ IS REVENUE, NOT THE BORDER. EVEN BEFORE

THE OPEC MEETING BEGAN, THE GOI'S SABER-

RATTLING HAD BEEN A MAJOR FACTOR IN THE SHARP

RISE IN OIL PRICES. THEN AT ITS JULY 25

SESSION, OPEC REPORTEDLY CAME TOWARD THE IRAQI

POSITION, AGREEING TO A MINIMUM PRICE OF USD

20 PER BARREL. WE EXPECT THE GOI TO BE

TOUGH DURING THE OPEC MEETING TODAY (JULY 26)

AND TO STAND OUT FOR USD 25. BUT HAVING RAISED

KUWAITI APPREHENSIONS SO HIGH BY CRUDE TACTICS,

THE GOI MAY HOLD OUT FOR OTHER CONCESSIONS;

E.G., OPENING OF THE DIRECT AIR ROUTE TO

KUWAIT.



7. IRAQ MIGHT ALSO PRESS FOR FORGIVENESS OF

WAR DEBTS. THE IRAQIS HAVE TOLD US THAT THE

GOK (BUT NOT THE SAG) CARRY THESE DEBTS ON THE

BOOKS THEY SHOW TO INTERNATIONAL FINANCIAL

ORGANIZATIONS. IN FACT, WE HAVE FROM A

WESTERN EMBASSY, TWO SEPARATE SENIOR SAUDI

SOURCES SAYING KUWAIT RECENTLY TRIED TO

COLLECT USD TWO BILLION FROM IRAQ, EVEN

GIVING IRAQ A JULY 31 DEADLINE. THIS SURPRISING

STORY, SHOULD IT PROVE TRUE, WOULD SHED

CONSIDERABLE LIGHT ON THE IRAQI CONCLUSION

THAT KUWAIT IS NOT AS SYMPATHETIC TO IRAQI

FINANCIAL STRAITS AS IT SHOULD BE.



KUWAIT BLINKED, TOO



8. THE IRAQIS WILL CONCLUDE THAT THE KUWAITIS

HAVE BLINKED TOO, SINCE ACCORDING TO BBC REPORTS

TODAY, KUWAIT HAS AGREED NOT/NOT TO ASK FOR

HIGHER PRODUCTION QUOTAS DURING THE LAST QUARTER

OF 1990.



EGYPTIAN MEDIATION CONTINUES



9. EGYPTIAN EMBASSY CONFIDED TO US JULY 26

THAT MUBARAK'S ADVISOR USAMA AL-BAZ HAS

ARRIVED IN BAGHDAD. IRAQI MEDIA ANNOUNCED

THAT HE MET WITH SADDAM JULY 26.



DEEP ANTI-KUWAITI SENTIMENT



10. IT IS DIFFICULT TO OVERSTATE THE DEPTH OF

ANTI-KUWAITI SENTIMENT IN IRAQ. THIS IS THE

EXTREMELY IMPORTANT BACKDROP TO CURRENT

TENSIONS. THE DISLIKE IS OLD AND DEEP -- NOT

SOMETHING TRUMPED UP BY THE MEDIA FOR THE

OCCASION. EVEN OUR MOST SOPHISTICATED IRAQI

COLLEAGUES AND CONTACTS BECOME NEANDERTHAL ON

THE ISSUE OF KUWAITIS.



11. THE KUWAITIS WHO COME TO IRAQ WITH POCKETS

FULL OF IRAQI DINARS (PURCHASED AT THE BLACK

MARKET RATE WHICH IS LESS THAN ONE-TENTH OF THE

OFFICIAL RATE) AND WHICH THEY OSTENTATIOUSLY

SPEND, ARE NOT THE EDUCATED MIDDLE CLASSES --

THEY GO TO EUROPE. IRAQ GETS THE EQUIVALENT OF

"PO WHITE TRASH", THE LOWER MIDDLE CLASSES,

WHO CAN BE SEEN IN BASRA IN THEIR SCORES ON

A FRIDAY, AND IN THE NORTHERN SUMMER RESORTS,

OFTEN DRUNK, SOMETIMES DISORDERLY, AND OFTEN

GAMBLING IN THE OTHERWISE EMPTY CASINOS. THEY

ALSO COME TO BAGHDAD IN DROVES, PROVIDING THE

CLIENTELE FOR CHEAP NIGHTCLUBS AND CALL GIRLS.



12. IRAQIS DEEPLY FEEL THAT THE KUWAITIS ARE

IMMENSELY STINGY SHYLOCKS, LIVING HIGH WHILE

IRAQ, WHICH MADE SUCH TERRIBLE SACRIFICES

DURING THE WAR, IT STILL SUFFERING. INDEED,

WHEN SADDAM MADE THAT POINT TO THE AMBASSADOR

(BAGHDAD 4237),TWO OF HIS STAFFERS (WHO BOTH,

WE CAN SAFELY ASSUME, LOST RELATIVES IN THE

WAR) BURST INTO TEARS. AND AS A MEASURE OF

JUST HOW MUCH IRAQIS DISLIKE THE KUWAITIS,

TWO OTHER IRAQIS ON THAT DAY VOLUNTEERED TO

US THEIR DISLIKE. ONE COMPLAINED HIS SISTER

COULD NOT WALK ALONE IN CENTRAL BAGHDAD

ANY MORE BECAUSE OF HARRASSMENT FROM KUWAITIS,

WHILE A SUCCESSFUL IRAQI TRADER COMPLAINED

BITTERLY ABOUT THE KUWAITI OBSESSION WITH

MONEY.



13. IRAQI ATTITUDES TO KUWAITIS CONTRAST

SHARPLY WITH THEIR ATTITUDE TO MOST OTHER ARABS.

NO MATTER HOW BAD RELATIONS BECOME WITH, FOR

EXAMPLE JORDAN, THERE IS ALWAYS A FELLOW

FEELING TOWARDS EAST JORDANIANS, A FEELING

ABSENT TOWARD KUWAITIS.



ARENS' PROPAGANDA SUCCESSFUL



14. THE ISRAELI PRESS AND DEFMIN ARENS HAVE

SUCCEEDED IN MAKING THE IRAQIS BELIEVE THAT

ARENS WAS SUMMONED TO WASHINGTON TO DISCUSS

THE GULF. CERTAINLY SADDAM EXPRESSED THIS

VIEW IN HIS JULY 25 MEETING WITH AMBASSADOR

AND WE INVITE DEPARTMENT'S ATTENTION TO ARENS'

TV INTERVIEW JULY 25 (FBIS TA2507201890) IN

WHICH HE REFERS TO HIS CONVERSATION WITH

DEFENSE SECRETARY CHENEY ON THE GULF.

MILITARY ACTIVITY



15. JULY 26 IS THE FIRST DAY FOR A WEEK WHEN

WE HAVE NOT/NOT SEEN RAILWAY CARS LOADED WITH

MILITARY EQUIPMENT IN THE MARSHALLING YARDS

IN MANSUR. THIS COULD MEAN THAT ALL THE

EQUIPMENT THE GOI FORCES ON THE BORDER NEED IS

ALREADY IN PLACE, OR THAT NO NEW FORCES ARE

BEING SENT SOUTH.



GLASPIE

UNQUOTE



EAGLEBURGER