Excerpted from: ERRI DAILY INTELLIGENCE REPORT-ERRI Risk Assessment Services-Wednesday, October 7, 1998-Vol. 4 - 280

LEAD FOCUS

THE CONVERGENCE OF CRISES
By C. L. Staten, ERRI Executive Director and Sr. Analyst

-- Iranian troops are massed on the Afghanistan border. Iran warns that "its patience is being tested" by a Taleban failure to punish militants who allegedly killed nine Iranian diplomats. As many as 250,000 Iranian troops are conducting "exercises" on the Afghan border and could invade and engage the Taleban within 24 hours of receiving orders from Tehran.

-- 10,000 Turkish troops are said to be massed on the Syrian/Iranian border. Continued incursions by Turkish troops into Northern Iraq are being reported. As if that weren't disturbing enough, diplomatic rhetoric between Syria and Turkey has escalated in recent days, and Turkey has threatened to invade Syria and combat rebels suspected of engaging in cross-border raids and terrorist events.

-- Officially unconfirmed reports indicate that Iraqi forces are moving to crush opposition Communist and Shi'ite Muslim forces in the Southern part of Iraq. Rumors continue that Saddam Hussein may again attempt to mass troops near the Kuwaiti border and/or menace Saudi Arabia. Analysts suggest that the latest Iraqi troops movements might be a move to intimidate their neighbors and yet another attempt to prompt an expensive deployment by U.S. forces to the region. Further, ERRI analysts warn that Hussein continues to thwart U.N. chemical/biological weapons inspectors and will do just about anything in an attempt to manipulate the United Nations into ending sanctions that prevent Iraq's production or purchase of weapons of mass destruction.

-- Central Africa continues to be a troublespot with armed clashes occurring almost everyday. U.S. embassies have been evacuated in several countries following the twin bombings in Tanzania and Kenya. A number of militants were recently arrested in Uganda, as they tried to undertake a terrorist attack on a U.S. mission there. Open combat continues involving Sudan, Uganda, Rwanda, Angola, Zimbabwe, Lesotho, Namibia, and the Congo. According to Greg Mills, director of the South African Institute of International Affairs, "We are seeing the increasing militarization of interstate relations in the region."

-- As SecState Madeline Albright reportedly works diligently to negotiate the latest "land-for-peace" deal between Arafat and Netanyahu, the West Bank and Gaza strip are closed and guarded as fears rise concerning a possible large scale Hamas terrorist strike. Clashes between militant youths and Israeli Defense forces continue in Hebron and other flashpoints. Albright is quoted as saying unless agreement is reached soon that "time might be running out" for a peaceful resolution in the region.

-- Chilling concerns continue in Japan, South Korea and the United States, as the North Korean military threatens to carry out additional multi-stage ballistic missile tests. Multiparty discussions about a possible development of a theatre missile defense system are on-going and worries continue about the possible erratic behavior of a starving and economicly nonviable North Korea. Strikes by labor unions and demonstrations by anti-government "leftist" organizations also plague the Seoul government and could be precursors to further difficulties.

-- Ministers and economists in Japan admitted in the past few days that a number of large banks are on the verge of failure and that Japan's overall economy may actually be far weaker than earlier anticipated. Japan is seen as a linchpin to the economic strength of much of the rest of the Pacific Rim. Without Japan's support, investment and financing, several other Asian nations are expected to suffer a potentially devastating recession in the near term.

-- Several people were killed and dozens of others were arrested in demonstrations in Ecuador. Because of deteriorating economic conditions, common people are complaining that they can't afford the basic staples of existence, such as rice, cooking gas, and other necessities. Inflation in Ecuador has risen so rapidly in recent months that the government can't seem to get a handle on controlling the economy.

-- Unrest and sporadic violence continues in Indonesia as students and Muslim militants protest Prime Minister Habibie's seeming inability to manage out-of-control inflation and to clean up allegations of cronyism and corruption involving the Suharto family and friends. Some observers suggest that Indonesia could again erupt into major violence and another attempt to overthrow the established government, unless some solutions are found soon.

-- In a situation being compared to Indonesia, civil unrest and student demonstrations continue in Malaysia. As Prime Minister Mahathir Mohamad reportedly implements increasingly repressive measures and cracks down on opponents, the likelihood of escalating violence also increases. Recent moves to restrict the press, smear former protege' Anwar, and engage in brutal paramilitary tactics have, in fact, lessened the chance of a peaceful resolution of economic issues that plague the region.

-- And least we forget, in the past few days Russian Foreign Minister Igor Ivanov has threatened a return to "the Cold War." Ivanov, 52, a long time close associate of Russia's new prime minister, Yevgeny Primakov, is offering a return to a "state-controlled economy" as an answer to the crumbling state of economic reform in the formerly powerful Russia. Rhetoric coming from Moscow in recent weeks could indicate an increasing rise in the power of former communist/nationalist "hard-liners," and the possibility that Primakov may try "old-style" centralist government tactics in an effort to control the slide of the rouble. Russia's possible rejection of open-market reforms and a return to its communist roots bears great scrutiny in the coming days.

ERRI analysts say that, not in recent memory, do they remember as many potential troublespots that could imminently erupt into armed conflict. They also point out that there are any number of smaller regional ethnic, religious, geo-political and other conflicts that could boil over and grow larger in the coming days. More than one expert has suggested that it appears that our adversaries may be exploiting our preoccupation with "domestic affairs."

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