Background Notes on Selected Middle Eastern Countries from the Department
of StateBackground Notes on Selected Middle Eastern Countries from the Department
of StatePEOPLE AND HISTORY
Egypt is the most populous country in the Arab world and the second-most populous on the African Continent. Nearly 100% of the country's 58 million people live in Cairo and Alexandria; elsewhere on the banks of the Nile; in the Nile delta, which fans out north of Cairo; and along the Suez Canal. These regions are among the world's most densely populated, containing an average of over 1,540 person per square kilometer (3,820 per sq. mi.).
Small communities spread throughout the desert regions of Egypt are clustered around oases and historic trade and transportation routes. The government has tried with mixed success to encourage migration to newly irrigated land reclaimed from the desert. However, the proportion of the population living in rural areas has continued to decrease as people move to the cities in search of employment and a higher standard of living.
The Egyptians are a fairly homogeneous people of Hamitic origin. Mediterranean and Arab influences appear in the north, and there is some mixing in the south with the Nubians of northern Sudan. Ethnic minorities include a small number of Bedouin Arab nomads in the eastern and western deserts and in the Sinai, as well as some 50,000-100,000 Nubians clustered along the Nile in upper Egypt.
The literacy rate is about 48% of the adult population. Education is free through university and compulsory from ages six through 12. About 87% of children enter primary school; half drop out after their sixth year. There are 20,000 primary and secondary schools with some 10 million students, 12 major universities with about 500,000 students, and 67 teacher colleges. Major universities include Cairo University (100,000 students), Alexandria University, and the 1,000-year-old Al- Azhar University, one of the world's major centers of Islamic learning.
Egypt's vast and rich literature constitutes an important cultural element in the life of the country and in the Arab world as a whole. Egyptian novelists and poets were among the first to experiment with new styles of Arabic literature, and the forms they developed have been widely imitated. Egyptian novelist Naguib Mahjfouz was the first Arab to win the Nobel prize for literature. Egyptian books and films are available throughout the Middle East.
Egypt has endured as a unified state for more than 5,000 years, and archeological evidence indicates that a developed Egyptian society has existed for much longer. Egyptians take pride in their "pharaonic heritage" and in their descent from what they consider mankind's earliest civilization. The Arabic word for Egypt is Misr, which originally connoted "civilization" or "metropolis."
Archeological findings show that primitive tribes lived along the Nile long before the dynastic history of the pharaohs began. By 6000 B.C., organized agriculture had appeared.
In about 3100 B.C., Egypt was united under a ruler known as Mena, or Menes, who inaugurated the 30 pharaonic dynasties into which Egypt's ancient history is divided--the Old and the Middle Kingdoms and the New Empire. For the first time, the use and managements of vital resources of the Nile River came under one authority.
The pyramids at Giza (near Cairo) were built in the fourth dynasty, showing the power of the pharaonic religion and state. The Great Pyramid, the tomb of Pharaoh Khufu (also known as Cheops), is the only surviving example of the Seven Wonders of the Ancient World. Ancient Egypt reached the peak of its power, wealth, and territorial extent in the period called the New Empire (1567-1085 B.C.). Authority was again centralized, and a number of military campaigns brought Palestine, Syria, and northern Iraq under Egyptian control.
Persian, Greek, Roman, and Arab Conquerors In 525 B.C., Cambyses, the son of Cyrus the Great, led a Persian invasion force that dethroned the last pharaoh of the 26th Dynasty. The country remained a Persian province until Alexander the Great. The Roman/Byzantine rule of Egypt lasted for nearly 700 years.
Following a brief Persian reconquest, Egypt was invaded and conquered by Arab forces in 642. A process of Arabization and Islamization ensued. Although a Coptic Christian minority remained--and remains today, constituting about 10% of the population--the Arab language inexorably supplanted the indigenous Coptic tongue. Ancient Egyptian ways--passed from pharaonic times through the Persian, Greek, and Roman periods and Egypt's Christian era--were gradually melded with or supplanted by Islamic customs. For the next 1,300 years, a succession of Turkish, Arabic, Mameluke, and Ottoman caliphs, beys, and sultans ruled the country.
European Influence
Napoleon Bonaparte arrived in Egypt in 1798. The three-year sojourn in Egypt (1798-1801) of his army and a retinue of French scientists opened Egypt to direct Western influence. Napoleon's adventure awakened Great Britain to the importance of Egypt as a vital link with India and the Far East and launched 150 years of Anglo-French rivalry over the region.
An Anglo-Ottoman invasion force drove out the French in 1801, and, following a period of chaos, the Albanian Mohammed Ali obtain control of the country. Ali ruled until 1849, and his successors retained at least nominal control of Egypt until 1952. He imported European culture and technology, introduced state organization of Egypt's economic life, improved education, and fostered training in engineering and medicine. His authoritarian rule was also marked by a series of foreign military adventures. Ali's successors granted to the French Promoter, Ferdinand de Lesseps, a concession for construction of the Suez Canal--begun in 1859 and opened 10 years later.
Their regimes were characterized by financial mismanagement and personal extravagance that reduced Egypt to bankruptcy. These developments led to rapid expansion of British and French financial oversight. This produced popular resentment, which, in 1879, led to revolt.
In 1882, British expeditionary forces crushed this revolt, marking the beginning of British occupation and the virtual inclusion of Egypt within the British Empire. During the rule of three successive British High Commissioners between 1883 and 1914, the British agency was the real source of authority. It established special courts to enforce foreign laws for foreigners residing in the country. These privileges for foreigners generated increasing Egyptian resentment. To secure its interests during World War I, Britain declared a formal protectorate over Egypt on December 18, 1914. This lasted until 1922, when, in deference to growing nationalism, the U.K. unilaterally declared Egyptian independence. British influence, however, continued to dominate Egypt's political life and fostered fiscal, administrative, and governmental reforms.
In the post-independence period, three political forces competed with one another: the Wafd, a broadly based nationalist political organization strongly opposed to British influence; King Fuad, whom the British had installed during the war; and the British themselves, who were determined to maintain control over the canal.
Although both the Wafd and the King wanted to achieve independence from the British, they competed for control of Egypt. Other political forces emerging in this period included the communist party (1925) and the Muslim Brotherhood (1928), which eventually became a potent political and religious force.
During World War II, British troops used Egypt as a base for Allied operations throughout the region. British troops were withdrawn to the Suez Canal area in 1947, but nationalist, anti-British feelings continued to grow after the war. Violence broke out in early 1952 between Egyptians and British in the canal area, and anti-Western rioting in Cairo followed.
On July 22-23, 1952, a group of disaffected army officers led by Lt. Col. Gamal Abdel Nasser overthrew King Farouk, whom the military blamed for Egypt's poor performance in the 1948 war with Israel. Following a brief experiment with civilian rule, they abrogated the 1923 constitution and declared Egypt a republic on June 19, 1953. Nasser evolved into a charismatic leader, not only of Egypt but of the Arab world.
Nasser and his "free officer" movement enjoyed almost instant legitimacy as liberators who had ended 2,500 years of foreign rule. They were motivated by numerous grievances and goals but wanted especially to break the economic and political power of the land-owning elite, to remove all vestiges of British control, and to improve the lot of the people, especially the fellahin (peasants).
A secular nationalist, Nasser developed a foreign policy characterized by advocacy of pan-Arab socialism, leadership of the "nonaligned" of the "Third World," and close ties with the Soviet Union. He sharply opposed the Western-sponsored Baghdad Pact. When the United States held up military sales in reaction to Egyptian neutrality vis-a-vis Moscow, Nasser concluded an arms deal with Czechoslovakia in September 1955.
When the U.S. and the World Bank withdrew their offer to help finance the Aswan High Dam in mid-1956, he nationalized the privately owned Suez Canal Company. The crisis that followed, exacerbated by growing tensions with Israel over guerrilla attacks from Gaza and Israeli reprisals, resulted in the invasion of Egypt that October by France, Britain, and Israel.
While Egypt was defeated, the invasion forces were quickly withdrawn under heavy pressure from the U.S. The Suez war (or, as the Egyptians call it, the Tripartite Aggression) accelerated Nasser's emergence as an Egyptian and Arab hero.
He soon after came to terms with Moscow for the financing of the Aswan High Dam--a step that enormously increased Soviet involvement in Egypt and set Nasser's Government on a policy of close ties with the Soviet Union.
In 1958, pursuant to his policy of pan-Arabism, Nasser succeeded in uniting Egypt and Syria into the United Arab Republic. Although this union had failed by 1961, it was not officially dissolved until 1984.
Nasser's domestic policies were arbitrary, frequently oppressive, and yet generally popular. All opposition was stamped out, and opponents of the regime frequently were imprisoned without trial. Nasser's foreign and military policies, among other things, helped provoke the Israeli attack of June 1967 that virtually destroyed Egypt's armed forces along with those of Jordan and Syria. Israel also occupied the Sinai peninsula, the Gaza Strip, the West Bank, and the Golan Heights. Nasser, nonetheless, was revered by the masses in Egypt and elsewhere in the Arab world until his death in 1970.
After Nasser's death, another of the original "free officers," Vice President Anwar el-Sadat, was elected President. In 1971, Sadat concluded a treaty of friendship with the Soviet Union but, a year later, ordered Soviet advisers to leave. In 1973, he launched the October war with Israel, in which Egypt's armed forces achieved initial successes but were defeated in Israeli counterattacks.
Camp David and the Peace Process
In a momentous change from the Nasser era, President Sadat shifted Egypt from a policy of confrontation with Israel to one of peaceful accommodation through negotiations. Following the Sinai Disengagement Agreements of 1974 and 1975, Sadat created a fresh opening for progress by his dramatic visit to Jerusalem in November 1977. This led to President Jimmy Carter's invitation to President Sadat and Prime Minister Begin to join him in trilateral negotiations at Camp David.
The outcome was the historic Camp David accords, signed by Egypt and Israel and witnessed by the U.S. on September 17, 1978. The accords led to the March 26, 1979, signing of the Egypt-Israel peace treaty, by which Egypt regained control of the Sinai in May 1982. Throughout this period, U.S.-Egyptian relations steadily improved, but Sadat's willingness to break ranks by making peace with Israel earned him the enmity of most other Arab states.
In domestic policy, Sadat introduced greater political freedom and a new economic policy, the most important aspect of which was the infitah or "open door." This relaxed government controls over the economy and encouraged private investment. Sadat dismantled much of the policy apparatus and brought to trial a number of former government officials accused of criminal excesses during the Nasser era.
Liberalization also included the reinstitution of due process and the legal banning of torture. Sadat tried to expand participation in the political process in the mid-1970s but later abandoned this effort. In the last years of his life, Egypt was racked by violence arising from discontent with Sadat's rule and sectarian tensions, and it experienced a renewed measure of repression.
On October 6, 1981, President Sadat was assassinated by Islamic extremists. Hosni Mubarak, Vice President since 1975 and air force commander during the October 1973 war, was elected President later that month. He was re-elected to a second term in October 1987 and to a third term in October 1993. Mubarak has maintained Egypt's commitment to the Camp David peace process, while at the same time re-establishing Egypt's position as an Arab leader. Egypt was readmitted to the Arab League in 1989. Egypt has also played a moderating role in such international fora as the UN and the Nonaligned Movement.
Mubarak was elected chairman of the Organization of African Unity in 1989, and again at the OAU summit in Cairo in June 1993. Domestically, since 1991, Mubarak has undertaken an ambitious reform program to reduce the size of the public sector and expand the role of the private sector. There has also been a democratic opening and increased participation in the political process by opposition groups. The November 1990 National Assembly elections saw 61 members of the opposition win seats in the 454-seat assembly, despite a boycott by several opposition parties citing possible manipulation by Mubarak's National Democratic Party (NDP). The opposition parties have been weak and divided and are not yet credible alternatives to the NDP.
Freedom of the press has increased greatly. While concern remains that economic problems could promote increasing dissatisfaction with the government, President Mubarak enjoys broad support.
For several years, domestic political debate in Egypt has been concerned with the phenomenon of "Political Islam," a movement which seeks to establish a state and society governed strictly by Islamic doctrine. The Muslim Brotherhood, founded in Egypt in 1928, is legally proscribed but operates more or less openly. Egyptian law, however, prohibits the formation of religion-based political parties. Members of the Brotherhood have been elected to the People's Assembly as independents and have been elected to local councils as candidates on the Socialist Labor Party ticket.
GOVERNMENT AND POLITICAL CONDITIONS
The Egyptian constitution provides for a strong executive. Authority is vested in an elected president who can appoint one or more vice presidents, a prime minister, and a cabinet. The president's term runs for six years. Egypt's legislative body, the People's Assembly, has 454 members--444 popularly elected and 10 appointed by the president. The constitution reserves 50% of the assembly seats for "workers and peasants." The assembly sits for a five-year term but can be dissolved earlier by the president. There is also a 258-member National Shura (consultative) Council, in which 86 members are appointed and 172 elected for six-year terms. Below the national level, authority is exercised by and through governors and mayors appointed by the central government and by popularly elected local councils.
Although power is concentrated in the hands of the president and the National Democratic Party majority in the People's Assembly, opposition party organizations make their views public and represent their followers at various levels in the political system.
In addition to the ruling National Democratic Party, there are nine other recognized parties. Since 1990, the number of recognized parties has doubled from five to 10. The law prohibits the formation of parties along class lines, thereby making it illegal for communist groups to organize formally as political parties.
Egyptians now enjoy considerable freedom of the press, and recognized opposition political parties operate freely. Although the November 1990 elections are generally considered to have been fair and free, there are significant restrictions on the political process and freedom of association for non-governmental organizations. Opposition parties continue to make credible complaints about electoral manipulation by the government. For example, in the 1989 Shura Council elections, the ruling NDP won 100% of the seats.
The process of gradual political liberalization begun by Sadat and continued under Mubarak is now on hold. A terrorist campaign that the government has been battling since 1992 has slowed the progress of democracy. Egyptian security services and terrorist groups remain locked in a cycle of violence. Groups seeking to overthrow the government have bombed banks and attacked and killed government officials, security forces, Egyptian Christians, secular intellectuals, and foreign tourists. They were responsible for the majority of civilian deaths in 1994. Some attacks have occurred in Cairo, but most of the violent incidents have taken place in the southern provinces of Assiyut, Minya, and Qena, which are located between Cairo and Luxor. A series of successful police counterterrorist operations since the beginning of 1994 has reduced terrorist capabilities and operations, particularly in Cairo; however, terrorists stepped up their activity in Minya in January 1995.
Egypt's judicial system is based on European (primarily French) legal concepts and methods. Under the Mubarak Government, the courts have demonstrated increasing independence, and the principles of due process and judicial review have gained greater respect. The legal code is derived largely from the Napoleonic Code. Marriage and personal status (family law) are primarily based on the religious law of the individual concerned, which for most Egyptians is Islamic Law (Sharia).
National Security
Egypt's armed forces are among the largest in the region, and include the army (290,000), air defense (70,000), air force (30,000), and navy (20,000). The armed forces inventory includes equipment from the United States, France, Italy, the United Kingdom, the former Soviet Union, and China. Most of the equipment from the former Soviet Union is being replaced by more modern American, French, and British equipment, of which significant amounts are being built under license in Egypt. To bolster stability and moderation in the region, Egypt has provided military assistance and training to a number of African and Arab states.
ECONOMY
Under comprehensive economic reforms initiated in 1991, Egypt has relaxed many price controls, reduced subsidies, and partially liberalized trade and investment. Manufacturing is still dominated by the public sector, which controls virtually all heavy industry. A process of public sector reform and privatization has begun, however, which could enhance opportunities for the private sector. Agriculture, mainly in private hands, has been largely deregulated, with the exception of cotton and sugar production. Construction, non-financial services, and domestic marketing are largely private.
Agriculture
More than one-third of Egyptian labor is engaged directly in farming, and many others work in the processing or trading of agricultural products. Practically all Egyptian agriculture takes place in some 2.5 million hectares (6 million acres) of fertile soil in the Nile Valley and Delta. Some desert lands are being developed for agriculture, but other fertile lands in the Nile Valley and Delta are being lost to urbanization and erosion.
Warm weather and plentiful water permit several crops a year. Further improvement is possible, but agricultural productivity is already high, considering the traditional methods used. Egypt has little subsistence farming. Cotton, rice, onions, and beans are the principal crops. Cotton is the largest agricultural export earner.
The United States is a major supplier of wheat to Egypt, through commercial sales and the PL 480 (Food for Peace) program. Other Western countries have also supplied food on concessional terms.
"Egypt," wrote the Greek historian Herodotus 25 centuries ago, "is the gift of the Nile." The land's seemingly inexhaustible resources of water and soil carried by this mighty river created in the Nile Valley and Delta the world's most extensive oasis. Without the Nile, Egypt would be little more than a desert wasteland.
The river carves a narrow, cultivated floodplain, never more than 20 kilometers wide, as it travels northward from Sudan to form Lake Nasser, behind the Aswan High Dam. Below the dam, just north of Cairo, the Nile spreads out over what was once a broad estuary that has been filled by riverine deposits to form a fertile delta about 250 kilometers wide (150 mi.) at the seaward base and about 160 kilometers (96 mi.) from south to north.
Before the construction of dams on the Nile, particularly the Aswan High Dam, the fertility of the Nile Valley was sustained by the water flow and the silt deposited by the annual flood. Sediment is now obstructed by the Aswan High Dam and retained in Lake Nasser. The interruption of yearly, natural fertilization and the increasing salinity of the soil have detracted somewhat from the high dam's value. Nevertheless, the benefits remain impressive: more intensive farming on millions of acres of land made possible by improved irrigation, prevention of flood damage, and the generation of billions of low-cost kilowatt hours of electricity.
The Western Desert accounts for about two-thirds of the country's land area. For the most part, it is a massive sandy plateau marked by seven major depressions. One of these, Fayoum, was connected about 3,600 years ago to the Nile by canals. Today, it is an important irrigated agricultural area.
Natural Resources
In addition to the agricultural capacity of the Nile Valley and delta, Egypt's natural resources include petroleum, natural gas, phosphates, and iron ore. Petroleum deposits are found primarily in the Gulf of Suez, the Nile delta, and the Western Desert. The petroleum and natural gas sector accounted for approximately 10% of GDP in FY 1991.
Petroleum products represented about 45% of export earnings during that period. The fall in world oil prices after the 1991 Gulf war pushed Egypt's benchmark "Suez Blend" to an average price of $15 per barrel in 1991, compared with $20 per barrel in 1990. Thus, the value of Egyptian crude oil exports dropped to $1.2 billion in 1991 versus $1.5 billion in 1990.
Petroleum production dropped slightly in 1991 to 44 million tons at 870,000 barrels per day. To limit the domestic consumption of oil, Egypt is encouraging the production of natural gas. Natural gas output continues to increase and reached 7.2 million metric tons equivalent in 1991.
Twelve petroleum exploration agreements were signed in 1992, under which six companies are expected to spend over $90 million to drill 24 wells.
Since 1991, the government has tried to attract enough foreign investment to maintain existing exploration and production and attract new investment. In October 1991, the government adopted a market- determined petroleum export pricing formula.
Transport and Communication
Transportation facilities in Egypt are centered on Cairo and largely follow the pattern of settlement along the Nile. The major line of the nation's 4,800-kilometer (2,800-mi.) railway network runs from Alexandria to Aswan. The well-maintained road network has expanded rapidly to over 21,000 miles, covering the Nile valley and delta, Mediterranean and Red Sea coasts, the Sinai, and the Western oases.
Egyptair provides reliable domestic air services to major tourist destinations from its Cairo hub (in addition to overseas routes). The Nile River system (about 1,600 km. or 1,000 mi.) and the principal canals (1,600 km.) are important locally for transportation. The Suez Canal is a major waterway of international commerce and navigation, linking the Mediterranean and Red Seas. Major ports are Alexandria, Port Said, and Damietta on the Mediterranean, and Suez and Safraga on the Red Sea.
Egypt has long been the cultural and informational center of the Arab world, and Cairo is the region's largest publishing and broadcasting center. There are eight daily newspapers with a total circulation of more than 2 million, and a number of monthly newspapers, magazines, and journals. The majority of political parties have their own newspapers, and these papers conduct a lively, often highly partisan, debate on public issues.
Radio and television are owned and controlled by the government through the Egyptian Radio and Television Federation. The federation operates two national television networks and three regional stations in Cairo, Alexandria, and Ismailia. The government also beams daily satellite programming to the rest of the Arab world, the U.K., and the U.S.
FOREIGN RELATIONS
Egypt was readmitted to the Arab League in May 1989, and the Arab League headquarters has returned to Cairo from Tunis. Former Egyptian Foreign Minister Abdel Meguid is the present Secretary General of the Arab League. President Mubarak chaired the Organization of African Unity from 1989 to 1990 and again in 1993. In 1991, Egyptian Deputy Prime Minister Boutros Boutros-Ghali was elected Secretary General of the United Nations.
Egypt played a key role during the 1990-91 Gulf crisis. President Mubarak helped assemble the international coalition and deployed 35,000 Egyptian troops against Iraq to liberate Kuwait. The Egyptian contingent was the second largest in the coalition forces. In the aftermath of the Gulf war, Egypt signed the Damascus declaration with Syria and the Gulf states to strengthen Gulf security.
Egypt also played an important role in the negotiations leading to the Madrid Peace Conference in 1991, which, under U.S. and Russian sponsorship, brought together all parties in the region to discuss Middle East peace. Since then, Egypt has been an active participant in the peace process and has been a strong supporter of the bilateral discussions leading to the 1993 "declaration of principles" and the October 1994 signing of the Jordan-Israel peace treaty.
Egyptian-Israeli relations improved after Labor's 1992 victory in Israeli national elections, and Egypt and Israel are committed to improving their bilateral relationship. By mid-1993, President Mubarak and Prime Minister Rabin had met twice, and other senior-level bilateral contacts have increased. There has also been progress on the return of Sinai antiquities to Egypt and on issues relating to military personnel missing in action. Agricultural cooperation continues to be the most active area of Egyptian-Israeli technical cooperation.
PEOPLE
Almost two-thirds of Iran's people are of Aryan origin--their ancestors migrated from Central Asia. The major groups in this category include Persians, Kurds, Lurs, and Baluchi. The remainder are primarily Turkic but also include Arabs, Armenians, Jews, and Assyrians.
The 1979 Islamic revolution and the war with Iraq transformed Iran's class structure politically, socially, and economically. In general, however, Iranian society remains divided into urban, market-town, village, and tribal groups. Clerics, called mullahs, dominate politics and nearly all aspects of Iranian life, both urban and rural. After the fall of the Pahlavi regime in 1979, much of the urban upper class of prominent merchants, industrialists, and professionals, favored by the former Shah, lost standing and influence to the senior clergy and their supporters. Bazaar merchants, who were allied with the clergy against the Pahlavi shahs, have also gained political and economic power since the revolution. The urban working class has enjoyed somewhat enhanced status and economic mobility, spurred in part by opportunities provided by revolutionary organizations and the government bureaucracy.
Unemployment, a major problem even before the revolution, has many causes, including population growth, the war with Iraq, and shortages of raw materials and trained managers. Farmers and peasants received a psychological boost from the attention given them by the Islamic regime but appear to be hardly better off in economic terms. The government has made progress on rural development, including electrification and road building but has not yet made a commitment to land redistribution.
Most Iranians are Muslims; 95% belong to the Shi'a branch of Islam, the official state religion, and about 4% belong to the Sunni branch, which predominates in neighboring Muslim countries. Non-Muslim minorities include Zoroastrians, Jews, Baha'is, and Christians.
HISTORY
The ancient nation of Iran, historically known to the West as Persia and once a major empire in its own right, has been overrun frequently and has had its territory altered throughout the centuries. Invaded by Arabs, Seljuk Turks, Mongols, and others--and often caught up in the affairs of larger powers--Iran has always reasserted its national identity and has developed as a distinct political and cultural entity.
Archeological findings have placed knowledge of Iranian prehistory at middle paleolithic times (100,000 years ago). The earliest sedentary cultures date from 18,000-14,000 years ago. The sixth millennium B.C. saw a fairly sophisticated agricultural society and proto-urban population centers. Many dynasties have ruled Iran, the first of which was under the Achaemenians (559-330 B.C.), a dynasty founded by Cyrus the Great. After the Hellenistic period (300-250 B.C.) came the Parthian (250 B.C.-226 A.D.) and the Sassanian (226-651) dynasties.
The seventh-century Arab-Muslim conquest of Iran was followed by conquests by the Seljuk Turks, the Mongols, and Tamerlane. Iran underwent a revival under the Safavid dynasty (1502-1736), the most prominent figure of which was Shah Abbas. The conqueror Nadir Shah and his successors were followed by the Zand dynasty, founded by Karim Kahn, and later the Qajar (1795-1925) and the Pahlavi dynasties (1925-1979).
Modern Iranian history began with a nationalist uprising against the Shah (who remained in power) in 1905, the granting of a limited constitution in 1906, and the discovery of oil in 1908. In 1921, Reza Khan, an Iranian officer of the Persian Cossack Brigade, seized control of the government. In 1925, he made himself Shah, ruling as Reza Shah Pahlavi for almost 16 years and installing the new Pahlavi dynasty.
Under his reign, Iran began to modernize and to secularize politics, and the central government reasserted its authority over the tribes and provinces. In September 1941, following the Allies' (U.K.-Soviet Union) occupation of western Iran, Reza Shah was forced to abdicate. His son, Mohammad Reza Pahlavi, became Shah and ruled until 1979.
During World War II, Iran was a vital link in the Allied supply line for lend-lease supplies to the Soviet Union. After the war, Soviet troops stationed in northwestern Iran not only refused to withdraw but backed revolts that established short-lived, pro-Soviet separatist regimes in the northern regions of Azerbaijan and Kurdistan. These were ended in 1946. The Azerbaijan revolt crumbled after U.S. and UN pressure forced a Soviet withdrawal and Iranian forces suppressed the Kurdish revolt.
In 1951, Premier Mohammed Mossadeq, a militant nationalist, forced the parliament to nationalize the British-owned oil industry. Mossadeq was opposed by the Shah and was removed, but he quickly returned to power. The Shah fled Iran but returned when supporters staged a coup against Mossadeq in August 1953. Mossadeq was then arrested by pro-Shah army forces.
In 1961, Iran initiated a series of economic, social, and administrative reforms that became known as the Shah's White Revolution. The core of this program was land reform. Modernization and economic growth proceeded at an unprecedented rate, fueled by Iran's vast petroleum reserves, the third-largest in the world.
In 1978, domestic turmoil swept the country as a result of religious and political opposition to the Shah's rule and programs--especially SAVAK, the hated internal security and intelligence service. In January 1979, the Shah left Iran; he died abroad several years after.
On February 1, 1979, exiled religious leader Ayatollah Ruhollah Khomeini returned from France to direct a revolution resulting in a new, theocratic republic guided by Islamic principles. Back in Iran after 15 years in exile in Turkey, Iraq, and France, he became Iran's national religious leader. Following Khomeini's death on June 3, 1989, the Assembly of Experts--an elected body of senior clerics--chose the outgoing president of the republic, Ali Khamenei, to be his successor as national religious leader in what proved to be a smooth transition.
In August 1989, Ali Akbar Hashemi-Rafsanjani, the speaker of the National Assembly, was elected President by an overwhelming majority. He was re-elected June 11, 1993, with a more modest majority of about 63%; some Western observers attributed the reduced voter turnout to disenchantment with the deteriorating economy.
GOVERNMENT
The December 1979 Iranian constitution defines the political, economic, and social order of the Islamic republic. It declares that Shi'a Islam of the Twelver (Jaafari) sect is Iran's official religion. The country is governed by secular and religious leaders and governing bodies, and duties often overlap. The chief ruler is a religious leader or, in the absence of a single leader, a council of religious leaders. The constitution stipulates that this national religious leader or members of the council of leaders are to be chosen from the clerical establishment on the basis of their qualifications and the high esteem in which they are held by Iran's Muslim population. This leader or council appoints the six religious members of the Council of Guardians (the six lay members--lawyers--are named by the National Consultative Assembly, or Majles); appoints the highest judicial authorities, who must be religious jurists; and is commander-in-chief of the armed forces. The Council of Guardians, in turn, certifies the competence of candidates for the presidency and the National Assembly.
The president of the republic is elected by universal suffrage to a four-year term by an absolute majority of votes and supervises the affairs of the executive branch. The president appoints and supervises the Council of Ministers (members of the cabinet), coordinates government decisions, and selects government policies to be placed before the National Assembly.
The National Assembly consists of 270 members elected to a four-year term. The members are elected by direct and secret ballot. All legislation from the assembly must be reviewed by the Council of Guardians. The Council's six lawyers vote only on limited questions of the constitutionality of legislation; the religious members consider all bills for conformity to Islamic principles.
In 1988, Ayatollah Khomeini created the Council for Expediency, which resolves legislative issues on which the Majles and the Council of Guardians fail to reach an agreement. Since 1989, it has been used to advise the national religious leader on matters of national policy as well. It is composed of the heads of the three branches of government, the clerical members of the Council of Guardians, and members appointed by the national religious leader for three-year terms. Cabinet members and Majles committee chairs also serve as temporary members when issues under their jurisdictions are considered.
Judicial authority is constitutionally vested in the Supreme Court and the four-member High Council of the Judiciary; these are two separate groups with overlapping responsibilities and one head. Together, they are responsible for supervising the enforcement of all laws and for establishing judicial and legal policies.
The military is charged with defending Iran's borders, while the Revolutionary Guard Corps is charged mainly with maintaining internal security. Iran has 25 provinces, each headed by a governor general. The provinces are further divided into counties, districts, and villages.
Principal Government Officials Leader of the Islamic Revolution--Ali Hoseini-Khamenei President--Ali Akbar Hashemi-Rafsanjani First Vice President--Dr. Hasan Ebrahim Habibi Foreign Minister--Ali Akbar Velayati Ambassador to the United Nations--Dr. Kamal Ali Naqi Kharazi
POLITICAL CONDITIONS
Iran's post-revolution difficulties have included an eight-year war with Iraq, internal political struggles and unrest, and economic disorder. The early days of the regime were characterized by severe human rights violations and political turmoil, including the seizure of the U.S. embassy compound and its occupants on November 4, 1979, by Iranian militants.
By mid-1982, a succession of power struggles eliminated first the center of the political spectrum and then the leftists, leaving only the clergy. There has been some moderation of excesses both internally and internationally, although Iran remains a significant sponsor of terrorism.
The Islamic Republican Party (IRP) was Iran's dominant political party until its dissolution in 1987; Iran now has no functioning political parties. The Iranian Government is opposed by a few armed political groups including the Mojahedin-e-Khalq (People's Mojahedin of Iran), the People's Fedayeen, and the Kurdish Democratic Party.
ECONOMY
Pre-revolutionary Iran's economic development was rapid. Traditionally an agricultural society, by the 1970s, Iran had achieved significant industrialization and economic modernization. However, the pace of growth had slowed dramatically by 1978, just before the Islamic revolution.
Since the revolution, increased government involvement in the economy has further stunted growth. Iran's current difficulties can be traced to a combination of factors. Economic activity, severely disrupted by the revolution, was further depressed by the war with Iraq and by the decline of oil prices beginning in late 1985. After the war with Iraq ended, the situation began to improve: Iran's GDP grew for two years running, partly from an oil windfall in 1990, and there was a substantial increase in imports.
A decrease in oil revenues in 1991 and growing external debt, though, dampened optimism. In March 1989, Khomeini had approved Rafsanjani's five-year plan for economic development, which allowed Iran to seek foreign loans. But mismanagement and inefficient bureaucracy, as well as political and ideological infighting, have hampered the formulation and execution of coherent economic policies.
All major business and industrial growth indicators are significantly below pre-revolutionary levels; unemployment was estimated to be 30% for 1993. Although Islam guarantees the right to private ownership, banks and some industries--including the petroleum, transportation, utilities, and mining sectors--have been nationalized. The import-dependent industrial sector is further plagued by low labor productivity, lack of foreign exchange, and shortages of raw materials and spare parts.
Agriculture also has suffered from shortages of capital, raw materials, and equipment, as well as from the war with Iraq; in addition, a major area of dissension within the regime has been how to proceed with land reform.
Oil revenues have been affected by the decline of oil prices. Oil accounts for about 90% of Iran's exports; because of reduced revenues, the government has imposed austerity measures, adding to the hardships of the Iranian people. In 1993, Iran's OPEC quota was about 3.4 million barrels per day, and estimated production was 3.5 million barrels per day.
Iran was unable to meet its obligations on short-term debt in 1993; by the end of the year, it was more than $9 billion in arrears on payments. Early in 1994, estimates of Iran's debt ranged from $16 billion to $30 billion.
FOREIGN RELATIONS
Khomeini's revolutionary regime initiated sharp changes from the foreign policy pursued by the Shah, particularly in reversing the country's orientation toward the West. In the Middle East, Iran's only significant ally has been Syria. Iran's regional goals are dominated by wanting to establish a leadership role, curtail the presence of the U.S. and other outside powers, and build trade ties.
In broad terms, Iran's "Islamic foreign policy" emphasizes:
-- Vehement anti-U.S. and anti-Israel stances; -- Eliminating outside influence in the region; -- Exporting the Islamic revolution; -- Support for Muslim political movements abroad; and -- A great increase in diplomatic contacts with developing countries.
Despite these guidelines, however, bilateral relations are frequently confused and contradictory due to Iran's oscillation between pragmatic and ideological concerns.
The country's foreign relations since the revolution have been tumultuous. In addition to the U.S. hostage crisis, tension between Iran and Iraq escalated in September 1980, when Iraq invaded Iran. Much of the dispute centered around sovereignty over the waterway between the two countries, the Shatt al-Arab, although underlying causes included each nation's overt desire for the overthrow of the other's government. Iran demanded the withdrawal of Iraqi troops from Iranian territory and the return to the status quo ante for the Shatt al-Arab as established under the 1975 Algiers Agreement signed by Iraq and Iran. After eight punishing years of war, in July 1988, Iran agreed to UN Security Council Resolution 598, which called for a cease-fire. The cease-fire was implemented on August 20, 1988; neither nation had made any real gains in the war.
Iran's relations with many of its Arab neighbors have been strained by Iranian attempts to spread its Islamic revolution. In 1981, Iran supported a plot to overthrow the Bahraini Government. In 1983, Iran expressed support for Shi'ites who bombed Western embassies in Kuwait, and in 1987, Iranian pilgrims rioted during the Hajj (pilgrimage) in Mecca, Saudi Arabia. Nations with strong fundamentalist movements, such as Egypt and Algeria, also mistrust Iran. Iran backs Hizballah, Hamas, the Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine-General Command--all groups violently opposed to the Arab-Israeli peace process.
Relations with Western European nations have alternated between improvements and setbacks. French-Iranian relations were badly strained by the sale of French arms to Iraq. Since the war, relations have improved commercially but periodically are worsened by Iranian-sponsored terrorist acts committed in France.
Another source of tension has been Ayatollah Khomeini's 1989 call for all Muslims to kill Salman Rushdie, British author of The Satanic Verses, a novel many Muslims consider blasphemous. The United Kingdom has sheltered Rushdie, and strains over this issue persist.
Iran maintains regular diplomatic and commercial relations with Russia and the other Newly Independent States of the former Soviet Union. Both Iran and Russia feel they have important national interests at stake in developments in Central Asia and the Transcaucasus. Russian and other sales of military equipment and technology concern Iran's neighbors and the United States.
Iran spends about 14%-15% of its GDP on its military. Branches of its military include ground forces, a navy, an air force, and Revolutionary Guard Corps. The Iran-Iraq war took a heavy toll on these military forces. Iran is trying to modernize its military and acquire weapons of mass destruction; it does not yet have, but continues to seek, nuclear capabilities.
PEOPLE
Of the approximately 5.7 million Israelis in 1996, about 4.6 million were Jewish. While the non-Jewish minority grows at an average rate of 4% per year, the Jewish population has increased by more than 15% over the last four years as a result of massive immigration to Israel, primarily from the republics of the former Soviet Union. Since 1989, nearly 710,000 such immigrants have arrived in Israel, making this the largest wave of immigration since independence. In addition, almost 20,000 members of the Ethiopian Jewish community have immigrated to Israel, 14,000 of them during the dramatic May 1991 Operation Solomon airlift.
The three broad Jewish groupings are: the Ashkenazim, or Jews who came to Israel mainly from Europe, North and South America, South Africa, and Australia; the Sephardim, who trace their origin to Spain, Portugal, and North Africa; and Eastern or Oriental Jews, who descend from ancient communities in Islamic lands. Of the non-Jewish population, about 76% are Muslims, 15% are Christian, and about 9% are Druze and others.
Education between ages five and 16 is free and compulsory. The school system is organized into kindergartens, six-year primary schools, three-year junior secondary schools, and three-year senior secondary schools, after which a comprehensive examination is offered for university admissions. There are seven university-level institutions in Israel.
With a population drawn from more than 100 countries on five continents, Israeli society is rich in cultural diversity and artistic creativity. The arts are actively encouraged and supported by the government. The Israeli Philharmonic Orchestra performs throughout the country and frequently tours abroad. The Jerusalem Symphony, the orchestra of the Israeli Broadcasting Authority, also tours frequently as do other musical ensembles. Almost every municipality has a chamber orchestra or ensemble, many boasting the talents of gifted performers recently arrived from the countries of the former Soviet Union.
Folk dancing, which draws upon the cultural heritage of many immigrant groups, is very popular. Israel also has several professional ballet and modern dance companies. There is great public interest in the theater; the repertoire covers the entire range of classical and contemporary drama in translation, as well as plays by Israeli authors. Of the three major repertory companies, the most famous, Habimah, was founded in 1917.
Active artist colonies thrive in Safed, Jaffa, and Ein Hod, and Israeli painters and sculptors exhibit and sell their works worldwide. Haifa, Tel Aviv, and Jerusalem have excellent art museums, and many towns and kibbutzim have smaller high-quality museums. The Israel Museum in Jerusalem houses the Dead Sea Scrolls along with an extensive collection of Jewish religious and folk art. The Museum of the Diaspora is located on the campus of Tel Aviv University. Israelis are avid newspaper readers. Israeli papers have an average daily circulation of 600,000 copies. Major daily papers are in Hebrew; others are in Arabic, English, French, Polish, Yiddish, Russian, Hungarian, and German.
HISTORY
The creation of the State of Israel in 1948 was preceded by more than 50 years of efforts by Zionist leaders to establish a sovereign nation as a homeland for Jews. The desire of Jews to return to what they consider their rightful homeland was first expressed during the Babylonian exile and became a universal Jewish theme after the destruction of Jerusalem by the Romans in 70 A.D. and the dispersal that followed.
It was not until the founding of the Zionist movement by Theodore Herzl at the end of the 19th century that practical steps were taken toward securing international sanction for large-scale Jewish settlement in Palestine--then a part of the Ottoman Empire.
The Balfour declaration in 1917 asserted the British Government's support for the creation of a Jewish homeland in Palestine. This declaration was supported by a number of other countries, including the United States, and became more important following World War I, when the United Kingdom was assigned the Palestine mandate by the League of Nations.
Jewish immigration grew slowly in the 1920s; it increased substantially in the 1930s, due to political turmoil in Europe and Nazi persecution, until restrictions were imposed by the United Kingdom in 1939. After the end of World War II, and the near-extermination of European Jewry by the Nazis, international support for Jews seeking to settle in Palestine overcame British efforts to restrict immigration.
International support for establishing a Jewish state led to the adoption in November 1947 of the UN partition plan, which called for dividing the Mandate of Palestine into a Jewish and an Arab state and for establishing Jerusalem separately as an international city under UN administration.
Violence between Arab and Jewish communities erupted almost immediately. Toward the end of the British mandate, the Jews planned to declare a separate state, a development the Arabs were determined to prevent. On May 14, 1948, the State of Israel was proclaimed. The following day, armies from neighboring Arab nations entered the former Mandate of Palestine to engage Israeli military forces.
In 1949, under UN auspices, four armistice agreements were negotiated and signed at Rhodes, Greece, between Israel and its neighbors Egypt, Jordan, Lebanon and Syria. The 1948-49 war of independence resulted in a 50% increase in Israeli territory, including western Jerusalem. No general peace settlement was achieved at Rhodes, however, and violence along the borders continued for many years.
In October 1956, Israel invaded the Gaza Strip and the Sinai Peninsula at the same time that operations by French and British forces against Egypt were taking place in the Suez Canal area. Israeli forces withdrew in March 1957, after the United Nations established the UN Emergency Force (UNEF) in the Gaza Strip and Sinai. In 1966-67, terrorist incidents and retaliatory acts across the armistice demarcation lines increased.
In May 1967, after tension had developed between Syria and Israel, Egyptian President Nasser moved armaments and about 80,000 troops into the Sinai and ordered a withdrawal of UNEF troops from the armistice line and Sharm El Sheikh. Nasser then closed the Strait of Tiran to Israeli ships, blockading the Israeli port of Eilat at the northern end of the Gulf of Aqaba. On May 30, Jordan and Egypt signed a mutual defense treaty.
In response to these events, Israeli forces struck targets in Egypt, Jordan, and Syria on June 5. After six days of fighting, by the time all parties had accepted the cease-fire called for by UN Security Council Resolutions 235 and 236, Israel controlled the Sinai Peninsula, the Gaza Strip, the Golan Heights, and the formerly Jordanian-controlled West Bank of the Jordan River, including East Jerusalem. On November 22, 1967, the Security Council adopted Resolution 242, the "land for peace" formula, which called for the establishment of a just and lasting peace based on Israeli withdrawal from territories occupied in 1967 in return for the end of all states of belligerency, respect for the sovereignty of all states in the area, and the right to live in peace within secure, recognized boundaries.
In the 1969-70 war of attrition, Israeli planes made deep strikes into Egypt in retaliation for repeated Egyptian shelling of Israeli positions along the Suez Canal. In early 1969, fighting broke out between Egypt and Israel along the Suez Canal. The United States helped end these hostilities in August 1970, but subsequent U.S. efforts to negotiate an interim agreement to open the Suez Canal and achieve disengagement of forces were unsuccessful.
On October 6, 1973--Yom Kippur (the Jewish Day of Atonement)--Syrian and Egyptian forces attacked Israeli positions in Golan and along the Suez Canal. Initially, Syria and Egypt made significant advances against Israeli forces. However, Israel recovered on both fronts, pushed the Syrians back beyond the 1967 cease-fire lines, and recrossed the Suez Canal to take a salient on its west bank, isolating Egyptian troops, who eventually surrendered.
The United States and the Soviet Union helped bring about a cease-fire between the combatants. In the UN Security Council, the United States supported Resolution 338, which reaffirmed Resolution 242 as the framework for peace and called for peace negotiations between the parties.
The cease-fire did not end the sporadic clashes along the cease-fire lines nor did it dissipate military tensions. The United States tried to help the parties reach agreement on cease-fire stabilization and military disengagement. On March 5, 1974, Israeli forces withdrew from the canal, and Egypt assumed control. Syria and Israel signed a disengagement agreement on May 31, 1974, and the UN Disengagement and Observer Force (UNDOF) was established as a peacekeeping force in the Golan.
Further U.S. efforts resulted in an interim agreement between Egypt and Israel in September 1975, which provided for another Israeli withdrawal in the Sinai, a limitation of forces, and three observation stations staffed by U.S. civilians in a UN-maintained buffer zone between Egyptian and Israeli forces.
In November 1977, Egyptian President Anwar Sadat broke 30 years of hostility with Israel by visiting Jerusalem at the invitation of Israeli Prime Minister Menachem Begin. During a two-day visit, which included a speech before the Knesset, the Egyptian leader created a new psychological climate in the Middle East in which peace between Israel and its Arab neighbors seemed a realistic possibility. Sadat recognized Israel's right to exist and established the basis for direct negotiations between Egypt and Israel.
In September 1978, U.S. President Jimmy Carter invited President Sadat and Prime Minister Begin to meet with him at Camp David, where they agreed on a framework for peace between Israel and Egypt and a comprehensive peace in the Middle East. It set out broad principles to guide negotiations between Israel and the Arab states. It also established guidelines for a West Bank-Gaza transitional regime of full autonomy for the Palestinians residing in the occupied territories and for a peace treaty between Egypt and Israel.
The treaty was signed on March 26, 1979, by Begin and Sadat, with President Carter signing as witness. Under the treaty, Israel returned the Sinai to Egypt in April 1982. In 1989, the Governments of Israel and Egypt concluded an agreement that resolved the status of Taba, a resort area on the Gulf of Aqaba.
In the years following the 1948 war, Israel's border with Lebanon was quiet, compared to its borders with other neighbors. After the expulsion of the Palestinian fedayeen (fighters) from Jordan in 1970-- and their influx into southern Lebanon, however, hostilities on Israel's northern border increased. In March 1978, after a series of clashes between Israeli forces and Palestinian guerrillas in Lebanon, Israeli forces crossed into Lebanon. After passage of Security Council Resolution 425, calling for Israeli withdrawal and the creation of the UN Interim Force in Lebanon peace-keeping force (UNIFIL), Israel withdrew its troops.
In July 1981, after additional fighting between Israel and the Palestinians in Lebanon, President Reagan's special envoy, Philip C. Habib, helped secure a cease-fire between the parties. However, in June 1982, Israel invaded Lebanon to fight the forces of the Palestine Liberation Organization (PLO).
In August 1982, the PLO withdrew its forces from Lebanon. With U.S. assistance, Israel and Lebanon reached an accord in May 1983 that set the stage to withdraw Israeli forces from Lebanon. The instruments of ratification were never exchanged, however, and in March 1984, under pressure from Syria, Lebanon canceled the agreement. In June 1985, Israel withdrew most of its troops from Lebanon, leaving a small residual Israeli force and an Israeli-supported militia in southern Lebanon in a "security zone," which Israel considers a necessary buffer against attacks on its northern territory.
By the late 1980s, the spread of non-conventional weaponry--including missile technology--in the Middle East began to pose security problems for Israel from further afield. This was evident during the Gulf crisis that began with Iraq's August 1990 invasion of Kuwait.
When allied coalition forces moved to expel Iraqi forces from Kuwait in January 1991, Iraq launched a series of missile attacks against Israel. Despite the provocation, Israel refrained from entering the Gulf war directly, accepting U.S. assistance to deflect continued Iraqi missile attacks.
The coalition's victory in the Gulf war opened new possibilities for regional peace, and in October 1991, the Presidents of the United States and the Soviet Union jointly convened an historic meeting in Madrid of Israeli, Lebanese, Jordanian, Syrian, and Palestinian leaders which became the foundation for ongoing bilateral and multilateral negotiations designed to bring lasting peace and economic development to the region.
On September 13, 1993, Israel and the PLO signed a Declaration of Principles (DOP) on the South Lawn of the White House. The declaration was a major conceptual breakthrough achieved under the Madrid framework. It established an ambitious set of objectives relating to a transfer of authority from Israel to an interim Palestinian authority. The DOP established May 1999 as the date by which a permanent status agreement for the West Bank and Gaza Strip would take effect. Israel and the PLO subsequently signed the Gaza-Jericho Agreement on May 4, 1994, and the Agreement on Preparatory Transfer of Powers and Responsibilities on August 29, 1994, which began the process of transferring authority from Israel to the Palestinians.
Prime Minister Rabin and PLO Chairman Arafat signed the historic Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip on September 28, 1995, in Washington. The agreement, witnessed by the President on behalf of the United States and by Russia, Egypt, Norway, and the European Union, incorporates and supersedes the previous agreements and marked the conclusion of the first stage of negotiations between Israel and the PLO.
The accord broadens Palestinian self-government by means of a popularly elected legislative council. It provides for election and establishment of that body, transfer of civil authority, Israeli redeployment from major population centers in the West Bank, security arrangements, and cooperation in a variety of areas. Negotiations on permanent status began on May 5, 1996 in Taba, Egypt. As agreed in the 1993 DOP, those talks will address the status of Jerusalem, Palestinian refugees, Israeli settlements in the West Bank and Gaza Strip, final security arrangements, borders, relations and cooperation with neighboring states, and other issues of common interest.
Israel signed a non-belligerency agreement with Jordan (the Washington Declaration) in Washington, DC, on July 25, 1994. Jordan and Israel signed a historic peace treaty at a border post between the two countries on October 26, 1994, witnessed by President Clinton, accompanied by Secretary Christopher.
The assassination of Prime Minister Rabin by a right-wing Jewish radical on November 4, 1995 climaxed an increasingly bitter national debate over where the peace process was leading. Rabin's death left Israel profoundly shaken, ushered in a period of national self-examination, and produced a new level of national consensus favoring the peace process. In February 1996 Rabin's successor, Shimon Peres, called early elections. Those elections, held May 29 and the first featuring direct election of the prime minister, resulted in a narrow election victory for Likud Party leader Binyamin Netanyahu and his center-right National Coalition and the defeat of Peres and his left-of-center Labor/Meretz government.
GOVERNMENT
Israel is a parliamentary democracy. Its governmental system is based on several basic laws enacted by its unicameral parliament, the Knesset. The president (chief of state) is elected by the Knesset for a five-year term.
The prime minister (head of government) exercises executive power and has in the past been selected by the president as the party leader most able to form a government. In the May 1996 elections, Israelis for the first time voted for the prime minister directly, in accordance with recent legislation. The members of the cabinet must be collectively approved by the Knesset.
The Knesset's 120 members are elected by secret ballot to four-year terms, although the prime minister may decide to call for new elections before the end of the four year term. Voting is for party lists rather than for individual candidates, and the total number of seats assigned each party reflects that party's percentage of the vote. Successful Knesset candidates are drawn from the lists in order of party-assigned rank. Under the present electoral system, all members of the Knesset are elected at large.
The independent judicial system includes secular and religious courts. The courts' right of judicial review of the Knesset's legislation is limited. Judicial interpretation is restricted to problems of execution of laws and validity of subsidiary legislation. The highest court in Israel is the Supreme Court, whose judges are approved by the president.
Israel is divided into six districts, administration of which is coordinated by the Ministry of Interior. The Ministry of Defense is responsible for the administration of the occupied territories.
POLITICAL CONDITIONS
From the founding of Israel in 1948 until the election of May 1977, Israel was ruled by successive coalition governments led by the Labor alignment or its constituent parties. From 1967-70, the coalition government included all of Israel's parties except the communist party. After the 1977 election, the Likud bloc, then composed of Herut, the Liberals, and the smaller La'am Party, came to power, forming a coalition with the National Religious Party, Agudat Israel, and others.
As head of Likud, Menachem Begin became Prime Minister. The Likud retained power in the succeeding election in June 1981, and Begin remained Prime Minister. In the summer of 1983, Begin resigned and was succeeded by his Foreign Minister, Yitzhak Shamir. After losing a Knesset vote of confidence early in 1984, Shamir was forced to call for new elections, held in July of that year.
The vote was split among numerous parties and provided no clear winner leaving both Labor and Likud considerably short of a Knesset majority. Neither Labor nor Likud was able to gain enough support from the small parties to form even a narrow coalition. After several weeks of difficult negotiations, they agreed on a broadly based government of national unity. The agreement provided for the rotation of the office of prime minister and the combined office of vice prime minister and foreign minister midway through the government's 50-month term.
During the first 25 months of unity government rule, Labor's Shimon Peres served as prime minister, while Likud's Yitzhak Shamir held the posts of vice prime minister and foreign minister. Peres and Shamir switched positions in October 1986. The November 1988 elections resulted in a similar coalition government. Likud edged Labor out by one seat but was unable to form a coalition with the religious and right-wing parties. Likud and Labor formed another national unity government in January 1989 without providing for rotation. Yitzhak Shamir became Prime Minister, and Shimon Peres became Vice Prime Minister and Finance Minister.
The national unity government fell in March 1990, in a vote of no-confidence precipitated by disagreement over the government's response to U.S. Secretary of State Baker's initiative in the peace process.
Labor Party leader Peres was unable to attract sufficient support among the religious parties to form a government. Yitzhak Shamir then formed a Likud-led coalition government including members from religious and right-wing parties.
Shamir's government took office in June 1990, and held power for two years. In the June 1992 national elections, the Labor Party reversed its electoral fortunes, taking 44 seats. Labor Party leader Yitzhak Rabin formed a coalition with Meretz (a group of three leftist parties) and Shas (an ultra-Orthodox religious party). The coalition included the support of two Arab-majority parties. Rabin became Prime Minister in July 1992. Shas subsequently left the coalition, leaving Rabin with a minority government dependent on the votes of Arab parties in the Knesset.
Rabin was assassinated by a right-wing Jewish radical on November 4, 1995. Peres, then Deputy Prime Minister and Foreign Minister, once again became Prime Minister and immediately proceeded to carry forward the peace policies of the Rabin government and to implement Israel's Oslo commitments (including military redeployment in the West Bank and the holding of historic Palestinian elections on January 20, 1996). Enjoying broad public support and anxious to secure his own mandate, Peres called for early elections after just three months in office. (They would have otherwise have been held by the end of October, 1996.) In late February and early March, a series of suicide bombing attacks by Palestinian terrorists took some 60 Israeli lives, seriously eroding public support for Peres and raising concerns about the peace process. Increased fighting in southern Lebanon, which also brought Katyusha rocket attacks against northern Israel, also raised tensions and weakened the government politically just a month before the May 29 elections.
In those elections -- the first direct election of a prime minister in Israeli history -- Likud leader Benyamin Netanyahu won by a narrow margin, having sharply criticized the government's peace policies for failing to protect Israeli security. Netanyahu subsequently formed a predominantly right-wing coalition government publicly committed to pursuing the peace process, but with an emphasis on security first and reciprocity. His coalition included the Likud party, allied with the Tsomet and Gesher parties in a single list; three religious parties (Shas, the National Religious Party, and the United Torah Judaism bloc); and two centrist parties, The Third Way and Yisrael b'Aliyah. The latter is the first significant party formed expressly to represent the interests of Israel's new immigrants.
ECONOMY
Israel has a diversified modern economy with substantial government ownership and a rapidly developing high-tech sector. Poor in natural resources, Israel depends on imports of oil, coal, food, uncut diamonds, other production inputs, and military equipment. Its GDP in 1995 reached $87 billion, or $15,700 per person. The major industrial sectors include metal products, electronic and biomedical equipment, processed foods, chemicals, and transport equipment. Israel possesses a substantial service sector and is one of the world's centers for diamond cutting and polishing. It is also a world leader in software development and is a major tourist destination.
Israel's strong commitment to economic development and its talented work force led to economic growth rates during the nation's first two decades that frequently exceeded 10% annually. The years after the 1973 Yom Kippur War were a lost decade economically, as growth stalled and inflation reached triple-digit levels. The successful economic stabilization plan implemented in 1985 and the subsequent introduction of market-oriented structural reforms reinvigorated the economy and paved the way for its rapid growth in the 1990s.
Two developments have helped to transform Israel's economy since the beginning of the decade. The first is the wave of Jewish immigration, predominantly from the countries of the former U.S.S.R., that has brought some 700,000 new citizens to Israel. These new immigrants, many of them highly educated, now constitute some 12% of Israel's 5.7 million population. Their successful absorption into Israeli society and its labor force forms a remarkable chapter in Israeli history. The skills brought by the new immigrants and their added demand as consumers have given the Israeli economy a strong upward push.
The second development benefitting the Israeli economy is the Mideast peace process begun at the Madrid conference of October 1991, which led to the signing of accords between Israel and the Palestinians and a peace treaty between Israel and Jordan. The peace process has helped to erode Israel's economic isolation from its neighbors and has begun a process of regional economic integration that will help to stabilize the region. It has also opened up new markets to Israeli exporters farther afield, such as in the rapidly growing countries of East Asia. The peace process has stimulated an unprecedented inflow of foreign investment in Israel, as companies that formerly shunned the Israeli market now see its potential contribution to their global strategies. Israeli companies, particularly in the high-tech area, have recently enjoyed considerable success raising money on Wall Street and other world financial markets; Israel now ranks second among foreign countries in the number of its companies listed on U.S. stock exchanges.
The United States is Israel's largest trading partner; two-way trade totalled some $11 billion in 1995. The principal U.S. exports to Israel include computers, integrated circuits, aircraft parts and other defense equipment, wheat, and automobiles. Israel's chief exports to the U.S. include diamonds, jewelry, integrated circuits, printing machinery, and telecommunications equipment. The two countries signed a free trade agreement in 1985 that progressively eliminated tariffs on most goods traded between the two countries over the following ten years. Some non-tariff barriers and tariffs on goods not covered by the agreement remain, however. Israel also has a trade and cooperation agreement in place with the European Union and is seeking to conclude such agreements with a number of other countries, including Canada, Turkey, and several countries in Eastern Europe.
FOREIGN RELATIONS
In addition to seeking an end to hostilities with Arab forces, against which it has fought five wars since 1948, Israel has given high priority to gaining wide acceptance as a sovereign state with an important international role. Before 1967, it had established diplomatic relations with a majority of the world's nations, except for the Arab states and most other Muslim countries. While the Soviet Union and the communist states of Eastern Europe (except Romania) broke diplomatic relations with Israel in the 1967 war, those relations were restored by 1991.
Today, Israel has diplomatic relations with some 153 states. Following the Madrid conference in 1991, and as a direct result of the peace process, Israel established or renewed diplomatic relations with 62 countries. Most important are its ties with Arab states. In addition to full diplomatic relations with Egypt and Jordan, Israel now has ties of one kind or another with Morocco, Tunisia, Oman, Qatar, and Bahrain.
On October 1, 1994, the Gulf States publicly announced their support for a review of the Arab boycott, in effect abolishing the secondary and tertiary boycotts against Israel. Israel has diplomatic relations with nine non-Arab Muslim states and with 32 of the 43 Sub-Saharan states that are not members of the Arab League. Israel established relations with China and India in 1992.
DEFENSE
Israel's ground, air, and naval forces, known as the Israel Defense Force (IDF), fall under the command of a single general staff. Conscription is universal for Jewish men and women over the age of 18, although exemptions may be made on religious grounds. Druze, members of a small Islamic sect living in Israel's mountains, also serve in the IDF. Israeli Arabs, with few exceptions, do not serve. During 1950-66, Israel spent an average of 9% of GDP on defense. Real defense expenditures increased dramatically after both the 1967 and 1973 wars. In 1995, the military budget reached 10% of GDP and represented about 20.4% of the total 1995 budget.
In 1983, the United States and Israel established the Joint Political Military Group, which includes joint military planning and combined exercises. The United States and Israel have collaborated on military research and weapons development and have signed an agreement allowing Israel to participate in Strategic Defense Initiative (SDI) research.
PEOPLE
Jordanians are Arabs, except for a few small communities of Circassians, Armenians, and Kurds which have adapted to Arab culture. The official language is Arabic, but English is used widely in commerce and government. About 70% of Jordan's population is urban; less than 6% of the rural population is nomadic or seminomadic. Most people live where the rainfall supports agriculture. About 1.5 million Palestinian Arabs- -including more than 950,000 registered refugees and displaced persons-- reside in Jordan, many as citizens.
HISTORY
The land that became Jordan is part of the richly historical Fertile Crescent region. Its history began around 2000 B.C., when Semitic Amorites settled around the Jordan River in the area called Canaan. Subsequent invaders and settlers included Hittites, Egyptians, Israelites, Assyrians, Babylonians, Persians, Greeks, Romans, Arab Muslims, Christian Crusaders, Mameluks, Ottoman Turks, and, finally, the British.
At the end of World War I, the territory now comprising Israel, Jordan, the West Bank, Gaza, and Jerusalem was awarded to the United Kingdom by the League of Nations as the mandate for Palestine and Transjordan. In 1922, the British divided the mandate by establishing the semiautonomous Emirate of Transjordan, ruled by the Hashemite Prince Abdullah, while continuing the administration of Palestine under a British High Commissioner.
The mandate over Transjordan ended on May 22, 1946; on May 25, the country became the independent Hashemite Kingdom of Transjordan. It continued to have a special defense treaty relationship with the United Kingdom until 1957, when the treaty was dissolved by mutual consent.
The British mandate over Palestine ended on May 14, 1948, and the State of Israel was proclaimed. Neighboring Arab states, including Transjordan, moved to assist Palestinian nationalists opposed to this development, resulting in open warfare between the Arab states and the newly founded State of Israel. The armistice agreements of April 3, 1949, established armistice demarcation lines between Jordan and Israel, leaving Jordan in control of the West Bank. The agreements expressly provided that the armistice demarcation lines were without prejudice to future territorial settlements or boundary lines.
In 1950, the country was renamed the Hashemite Kingdom of Jordan to include those portions of Palestine annexed by King Abdullah. Jordan established three governorates on the West Bank: Nablus, al-Quds (Jerusalem), and al-Khalil. While recognizing Jordanian administration over the West Bank, the United States maintained the position that ultimate sovereignty was subject to future agreement.
Jordan signed a mutual defense pact in May 1967 with Egypt, and it participated in the June 1967 war between Israel and the Arab states of Syria, Egypt, and Iraq. After repelling the Arab attack, Israel extended its control to the Jordan River, including Jordanian-controlled eastern Jerusalem. In 1988, Jordan renounced all claims to the West Bank but retained an administrative role pending a final settlement on the West Bank. The U.S. Government considers the West Bank to be territory occupied by Israel and believes that its final status should be determined through direct negotiations among the parties concerned on the basis of UN Security Council Resolutions 242 and 338.
The 1967 war led to a dramatic increase in the number of Palestinians living in Jordan. Its Palestinian refugee population--700,000 in 1966-- grew by another 300,000 from the West Bank. The period following the 1967 war saw an upsurge in the power and importance of Palestinian resistance elements (fedayeen) in Jordan. Differing with the Jordanian Government's policies, the heavily armed fedayeen constituted a growing threat to the sovereignty and security of the Hashemite state. Tensions between the government and the fedayeen increased until open fighting erupted in June 1970.
Other Arab governments attempted to work out a peaceful solution, but by September, continuing fedayeen actions in Jordan--including the destruction of three international airliners hijacked and held in the desert east of Amman--prompted the government to take action to regain control over its territory and population. In the ensuing heavy fighting, a Syrian tank force (camouflaged as a Palestinian force) initially took up positions in northern Jordan to support the fedayeen. By September 22, Arab foreign ministers meeting at Cairo had arranged a cease-fire beginning the following day. Sporadic violence continued, however, until Jordanian forces won a decisive victory over the fedayeen in July 1971, expelling them from the country. Since then, the fedayeen have not presented a threat to the Jordanian Government.
No fighting occurred along the 1967 Jordan River cease-fire line during the October 1973 Arab-Israeli war, but Jordan sent a brigade to Syria to fight Israeli units on Syrian territory. Jordan did not participate in the Gulf war of 1990-91. Except for a period of border tension with Syria in 1980, it has been at de facto peace with all its neighbors. In 1991, Jordan agreed, along with Syria, Lebanon, and Palestinian representatives, to participate in direct peace negotiations with Israel sponsored by the U.S. and Russia.
GOVERNMENT
Jordan is a constitutional monarchy based on the constitution promulgated on January 8, 1952. Executive authority is vested in the king and his council of ministers. The king signs and executes all laws. His veto power may be overridden by a two-thirds vote of both houses of the National Assembly. He appoints and may dismiss all judges by decree, approves amendments to the constitution, declares war, and commands the armed forces. Cabinet decisions, court judgments, and the national currency are issued in his name.
The council of ministers, led by a prime minister, is appointed by the king, who may dismiss other cabinet members at the prime minister's request. The cabinet is responsible to the Chamber of Deputies on matters of general policy and can be forced to resign by a two-thirds vote of "no confidence" by that body.
Legislative power rests in the bicameral National Assembly. The 80- member Chamber of Deputies, elected by universal suffrage to a four-year term, is subject to dissolution by the king. Of the 80 seats, 71 must go to Muslims and nine to Christians. The 40-member Senate is appointed by the king for an eight-year term.
The constitution provides for three categories of courts--civil, religious, and special. Administratively, Jordan is divided into eight governorates, each headed by a governor appointed by the king. They are the sole authorities for all government departments and development projects in their respective areas.
POLITICAL CONDITIONS
King Hussein has ruled Jordan since 1953 and has survived a number of challenges to his rule, drawing on the loyalty of his military and serving as a symbol of unity and stability for both the East Bank and Palestinian communities in Jordan. In 1989 and 1993, Jordan held free and fair parliamentary elections. Islamists are represented in but do not dominate the parliament. King Hussein has shown a commitment to democratization, most importantly by ending martial law in 1991 and legalizing political parties in 1992.
Jordan's continuing structural economic difficulties, burgeoning population, and more open political environment have led to the emergence of a variety of political parties. Moving toward greater independence, parliament has investigated corruption charges against several regime figures and has become the major forum in which differing political views, including those of political Islamists, are expressed. While King Hussein remains the ultimate authority in Jordan, the parliament plays an important role.
Although Jordan in 1988 disengaged from the West Bank and ceased efforts to restore the country's 1948-67 position, it retains considerable influence in the West Bank--for example, regulating the operations of Jordanian banks and issuing limited-validity Jordanian passports to West Bankers.
ECONOMY
Jordan is a small country with limited natural resources. Just over 10% of its land is arable, and even that is subject to the vagaries of a limited water supply. Rainfall is low and highly variable, and much of Jordan's available ground water is not renewable. Jordan's economic resource base traditionally has centered on phosphates, potash, and their fertilizer derivatives; overseas remittances; and foreign aid. These are its principal sources of hard currency earnings. Lacking forests, coal reserves, hydroelectric power, or commercially viable oil deposits, Jordan relies on natural gas for 10% of its domestic energy needs. For the other 90%, Jordan depends entirely on its oil-producing neighbors.
Although the population is highly educated, its high growth rate (3.4%) and relative youth (more than 50% of Jordanians are under 16) will make it difficult for the economy to generate jobs and sustain living standards. Jordan's distance from other markets makes its exports less competitive outside the region, and political disputes among its traditional trading partners (Iraq, Saudi Arabia, and the Gulf states) frequently restrict regional trade and development.
Since 1987, Jordan has struggled with a substantial debt burden, lower per capita income, and rising unemployment. From 1988-90, the official cost of living index rose 56%, while the dinar lost 51% of its value against the dollar. In 1989, Jordan concluded an 18-month standby arrangement (SBA) with the IMF and achieved agreement with Paris Club creditors to reschedule $573 million of debt. At the same time, to increase revenues, the government raised prices of certain commodities and utilities, triggering riots in the south. The mood of political discontent that swept the country in the wake of the riots helped set the stage for Jordan's moves toward democratization.
The SBA was derailed by economic consequences of the 1990-91 Gulf war. While tourist trade plummeted, the Gulf states' decision to limit economic ties with Jordan deprived it of worker remittances, traditional export markets, a secure supply of oil, and substantial foreign aid revenues. UN sanctions against Iraq-- Jordan's largest pre-war trading partner--caused further hard-ships, including higher shipping costs due to inspections of cargo shipments entering the Gulf of Aqaba. Finally, absorbing up to 300,000 returnees from the Gulf countries exacerbated unemployment and strained the government's ability to provide essential services.
In February 1992, Jordan renewed its commitment to pursuing long-term economic growth and entered into another 18-month standby arrangement with the IMF, followed by another Paris Club rescheduling of $771 million. Success in implementing its economic reform program will depend upon how effectively the government can stimulate private enterprise and encourage trade and investment in productive enterprises. In 1992, economic performance was solid: With all IMF targets met by wide margins, Jordan's $4.7-billion economy grew an impressive 11%. Inflation was held to 6.8%, but unemployment persisted at high levels (20%-25%). Although much of the 1992 growth resulted from non-recurring factors--a construction boom and customs receipts generated by Gulf war returnees--Jordan experienced growth of about 6% in 1993.
Further economic reform efforts are likely to be tempered by concerns about effects on low-income voters. With parliament playing a more active role in the formulation of economic policy, it may be difficult to impose further belt-tightening measures. In the near term, Jordan will continue to depend on foreign grants and concessional loans to further its development efforts. While in the past the largest aid flows have come from the Arab states, the United States and other Western countries also have been important sources of development funds.
During the first half of 1994, Jordan's economy dipped into recession. Its prospects for growth in the second half improved following Jordan's additional rescheduling of debt with Paris Club creditors, decisions by the U.S. and U.K. to forgive its official debt, and growing confidence as a result of progress in the Middle East peace process.
FOREIGN RELATIONS
Jordan has consistently followed a pro-Western foreign policy and traditionally has had close relations with the United States and the United Kingdom. These relations were damaged by support in Jordan for Iraq during the Gulf war. Although the Government of Jordan stated its opposition to the Iraqi occupation of Kuwait, popular support for Iraq was driven by Jordan's Palestinian community, which favored Saddam as a champion against Western supporters of Israel.
Since the end of the war, Jordan has largely restored its relations with Western countries through its participation in the Middle East peace process and enforcement of UN sanctions against Iraq. Relations between Jordan and the Gulf countries have improved only slightly since the Gulf crisis.
Jordan signed a non-belligerency agreement with Israel (the Washington Declaration) in Washington, DC, on July 25, 1994. Jordan and Israel signed a historic peace treaty on October 26, 1994, witnessed by President Clinton, accompanied by Secretary Christopher.
The U.S. has participated with Jordan and Israel in trilateral development discussions in which key issues have been water-sharing and security; cooperation on Jordan Rift Valley development; infrastructure projects; and trade, finance, and banking issues. Jordan also participates in the multilateral peace talks.
Jordan belongs to the UN and several of its specialized and related agencies, including the Food and Agriculture Organization (FAO), International Atomic Energy Agency (IAEA), and World Health Organization (WHO). Jordan also is a member of the World Bank, International Monetary Fund (IMF), Organization of the Islamic Conference (OIC), INTELSAT, Nonaligned Movement, and Arab League.
PEOPLE
The people residing in the State of Kuwait are primarily Arab in origin, but less than half of them are from the Arabian Peninsula. Many Arabs from nearby states took up residence in Kuwait because of the prosperity brought by oil production after the 1940s. However, following the liberation of Kuwait from Iraqi occupation in 1991, the Kuwaiti Government undertook a serious effort to reduce the expatriate population. Kuwait still has a sizable Iranian and Indian population. Seventy percent of native Kuwaitis are Sunni Muslims and 30% are Shi'a Muslims. There are very few Kuwaiti Christians. The 74% literacy rate, one of the Arab world's highest, is due to extensive government support for the education system. Public school education, including Kuwait University, is free, but access is restricted for foreign residents. The government sends qualified students abroad for degrees not offered at Kuwait University. About 1,000 Kuwaitis are currently studying in U.S. universities.
HISTORY
Kuwait's modern history began in the 18th century with the founding of the city of Kuwait by the Uteiba section of the Anaiza tribe, who wandered north from Qatar. Its first definite contact with the West was between 1775 and 1779, when the British-operated Persian Gulf-Aleppo Mail Service was diverted through Kuwait from Persian-occupied Basra (in Iraq).
During the 19th century, Kuwait tried to obtain British support to maintain its independence from the Turks and various powerful Arabian Peninsula groups. In 1899, the ruler Sheikh Mubarak Al Sabah--"the Great"--signed an agreement with the United Kingdom pledging himself and his successors neither to cede any territory nor to receive agents or representatives of any foreign power without the British Government's consent. Britain agreed to grant an annual subsidy to support the Sheikh and his heirs and to provide its protection. Kuwait enjoyed special treaty relations with the U.K., which handled Kuwait's foreign affairs and was responsible for its security.
Mubarak was followed as ruler by his son Jabir (1915-17) and another son Salim (1917-21). Subsequent amirs descended from these two brothers. Sheikh Ahmed al-Jabir Al Sabah ruled from 1921 until his death in 1950, and Sheikh Abdullah al-Salim Al Sabah from 1950 to 1965. By early 1961, the British had withdrawn their special court system, which handled the cases of foreigners resident in Kuwait, and the Kuwaiti Government began to exercise legal jurisdiction under new laws drawn up by an Egyptian jurist. On June 19, 1961, Kuwait became fully independent following an exchange of notes with the United Kingdom.
The boundary with Saudi Arabia was set in 1922 with the Treaty of Uqair following the Battle of Jahrah. This treaty also established the Kuwait-Saudi Arabia Neutral Zone, an area of about 5,180 sq. km. (2,000 sq. mi.) adjoining Kuwait's southern border. In December 1969, Kuwait and Saudi Arabia signed an agreement dividing the Neutral Zone (now called the Divided Zone) and demarcating a new international boundary. Both countries share equally the Divided Zone's petroleum, onshore and offshore.
Kuwait's northern border with Iraq dates from an agreement made with Turkey in 1913. Iraq accepted this claim in 1932 upon its independence from Turkey. However, following Kuwait's independence in 1961, Iraq claimed Kuwait, under the pretense that Kuwait had been part of the Ottoman Empire subject to Iraqi suzerainty. In 1963, Iraq reaffirmed its acceptance of Kuwaiti sovereignty and the boundary it agreed to in 1913 and 1932, in the "Agreed Minutes between the State of Kuwait and the Republic of Iraq Regarding the Restoration of Friendly Relations, Recognition, and Related Matters."
In August 1990, Iraq nevertheless invaded Kuwait, but was forced out seven months later by a UN coalition led by the United States. Following liberation, the UN, under Security Council Resolution 687, demarcated the Iraq-Kuwait boundary on the basis of the 1932 and the 1963 agreements between the two states. Although the demarcation is final and reaffirmed under Chapter VII of the UN Charter by UNSCR 833, Iraq has refused to accept and continues to make claims to Kuwait.
GOVERNMENT AND POLITICAL CONDITIONS
The State of Kuwait has been ruled by the Sabah family since 1751. The 1962 constitution contains detailed provisions on the powers and relationships of the branches of government and on the rights of citizens. Upon the death of an amir, the crown prince assumes his position. A new crown prince is then selected by members of the Sabah family from among the direct descendants of Mubarak the Great. Under the constitution, the designation is subject to the approval of the National Assembly. Since independence, successions have been orderly, both in 1965 and 1978.
Kuwait experienced an unprecedented era of prosperity under Amir Sabah al-Salim Al Sabah, who died in 1977 after ruling for 12 years, and under his successor, Amir Jabir Ahmed el-Jaber Al Sabah. The country was transformed into a highly developed welfare state with a free market economy. During the seven-month occupation by Iraq, the Amir, the Government, and many Kuwaitis took refuge in Saudi Arabia or other nations. The Amir and the government successfully managed Kuwaiti affairs from Saudi Arabia, London, and elsewhere during the period, relying on substantial Kuwaiti investments available outside Kuwait for funding and war-related expenses. His return after the liberation in February 1991 was relatively smooth.
Kuwait's first National Assembly was elected in 1963, with follow-on elections held in 1967, 1971, and 1975. From 1976 to 1981, the National Assembly was suspended. Following elections in 1981 and 1985, the National Assembly was again dissolved. Fulfilling a promise made during the period of Iraqi occupation, the Amir held new elections for the National Assembly in 1992. No political parties exist in Kuwait, although there are groupings (such as extended families) that function like parties. The ideological representation in the Kuwaiti National Assembly is broad, with a majority of the 1992 Assembly members being considered as "opposition" in their orientation. Although the Amir maintains the final word on most government policies, the National Assembly plays a real role in decision-making, with powers to initiate legislation, question government ministers, and express lack of confidence in individual ministers. Five of the elected National Assembly members were selected to serve as cabinet ministers.
ECONOMY
Kuwait is a small country with massive oil reserves, whose economy has been traditionally dominated by the state and its oil industry.
During the 1970s, Kuwait benefited from the dramatic rise in oil prices, which Kuwait actively promoted through its membership in the Organization of Petroleum Exporting Countries (OPEC). More recently, the economy has suffered from the triple shock of a 1982 securities market crash, the mid 1980s drop in oil prices, and the 1990 Iraqi invasion and occupation. The Kuwaiti Government-in-exile depended upon its $100 billion in overseas investments during the occupation in order to help pay for the reconstruction. Thus, by 1993, this balance was cut to less than half of its pre-invasion level. The wealth of Kuwait is based primarily on oil and capital reserves, and the Iraqi occupation severely damaged both. In the closing hours of the Gulf war in February 1991, the Iraqi occupation forces set ablaze or damaged 749 of Kuwait's oil wells. All of these fires were extinguished within a year. Production has been restored, and refineries and facilities have been modernized. Oil exports surpassed their pre-invasion levels in 1993 with production levels only constrained by OPEC quotas.
Oil
In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil Co. (KOC), jointly owned by the British Petroleum Co. and Gulf Oil Corp. In 1976, the Kuwaiti Government nationalized KOC. The following year, Kuwait took over onshore production in the Divided Zone between Kuwait and Saudi Arabia. KOC produces jointly there with Texaco, Inc., which, by its 1984 purchase of Getty Oil Co., acquired the Saudi Arabian onshore concession in the Divided Zone.
Offshore the Divided Zone, the Arabian Oil Co., 80% owned by Japanese interests and 10% each by the Kuwaiti and Saudi Governments, has produced on behalf of both countries since 1961.
The Kuwait Petroleum Corp. (KPC), an integrated international oil company, is the parent company of the government's operations in the petroleum sector, and includes Kuwait Oil Company, which produced oil and gas; Kuwait National Petroleum Co., refining and domestic sales; Petrochemical Industries Co., producing ammonia and urea; Kuwait Foreign Petroleum Exploration Co., with several concessions in developing countries; Kuwait Oil Tanker Co.; and Santa Fe International Corp. The latter, purchased outright in 1982, gives KPC a worldwide presence in the petroleum industry.
KPC has also purchased from Gulf Oil Co. refineries and associated service stations in the Benelux nations and Scandinavia, as well as storage facilities and a network of service stations in Italy. In 1987, KPC bought a 19% share in British Petroleum, which was later reduced to 10%. KPC markets its products in Europe under the brand Q8 and is interested in the markets of the United States and Japan.
Kuwait has about 77 billion barrels of recoverable oil; Saudi Arabia is the only single country which has larger reserves. Estimated capacity, before the war, was about 2.4 million barrels per day (b/d). During the Iraqi occupation, Kuwait's oil producing capacity was reduced to practically nothing. However, tremendous recovery and improvements have been made. Oil production was 1.5 million b/d by the end of 1992, and pre-war capacity was restored in 1993. Kuwait's OPEC quota in August 1994 is 2 million b/d.
Social Benefits
The government has sponsored many social welfare, public works, and development plans financed with oil and investment revenues. Among the benefits for Kuwaiti citizens are retirement income, marriage bonuses, housing loans, virtually guaranteed employment, free medical services, and education at all levels. Foreign nationals residing in Kuwait obtain some, but not all, of the welfare services. The right to own stock in publicly traded companies, real estate, and banks or a majority interest in a business is limited to Kuwaiti citizens and citizens of GCC states under limited circumstances.
Industry and Development
Industry in Kuwait consists of several large export-oriented petrochemical units, oil refineries, and a range of small manufacturers. It also includes large water desalinization, ammonia, desulfurization, fertilizer, brick, block, and cement plants. During the invasion, the Iraqis looted nearly all movable items of worth, especially high technology items and small machinery. Much of this has been replaced with newer equipment.
Agriculture
Agriculture is limited by the lack of water and arable land. The government has experimented in growing food through hydroponics and carefully managed farms. However, most of the soil which was suitable for farming in south central Kuwait was destroyed when Iraqi troops set fire to oil wells in the area and created vast "oil lakes." Fish and shrimp are plentiful in territorial waters, and large-scale commercial fishing has been undertaken locally and in the Indian Ocean.
Shipping
The Kuwait Oil Tankers Co. has 35 crude oil and refined product carriers and is the largest tanker company in an OPEC country. Kuwait is also a member of the United Arab Shipping Company.
Trade, Finance, and Aid
The Kuwaiti dinar is a strong currency pegged to a basket of currencies in which the U.S. dollar has the most weight. Kuwait ordinarily runs a balance-of-payments surplus.
Government revenues are dependent on oil revenues. Revenues for Kuwaiti fiscal year ending in June 1992 were $3 billion, down from a pre-war level of nearly $6 billion. Expenditures, mainly in costs of reconstruction and residual costs of the war, as well as major increases in defense spending, soared to nearly $40 billion, from a pre-war norm of about $10 billion. In 1993, Kuwait resumed pre-war spending levels.
The government's two reserve funds, the Fund for Future Generations and the General Reserve Fund, which totaled nearly $100 billion prior to the invasion in 1990, were the primary source of capital for the Kuwaiti Government during the war. Currently, these funds have been depleted to $40-$50 billion. The bulk of this reserve is invested in the United States, Germany, the United Kingdom, France, Japan, and Southeast Asia. In order of importance, foreign assets are believed to be invested in stocks and bonds, fixed yield instruments (mostly short term), and real estate. Kuwait follows a generally conservative investment policy.
Kuwait has been a major source of foreign economic assistance to other states through the Kuwait Fund for Arab Economic Development, an autonomous state institution created in 1961 on the pattern of Western and international development agencies. In 1974, the fund's lending mandate was expanded to include all-not just Arab-developing countries. Over the years aid was provided to Egypt, Syria, and Jordan, as well as the Palestine Liberation Organization. During the Iran-Iraq war, significant Kuwaiti aid was given to the Iraqis. Due to sizable post- war expenditures, Kuwaiti foreign assistance was limited to $350 million in 1992, but this is expected to rise slowly as budget deficits continue. From 1979-1989, bilateral aid to less developed countries totaled about $18 billion.
FOREIGN RELATIONS
Following independence in June 1961, Kuwait faced its first major foreign policy problem arising from Iraqi claims to Kuwait's territory. The Iraqis threatened invasion, but were dissuaded by the U.K.'s ready response to the Amir's request for assistance. Kuwait presented its case before the United Nations and preserved its sovereignty. U.K. forces were later withdrawn and replaced by troops from Arab League nations, which were withdrawn in 1963 at Kuwait's request.
On August 2, 1990, Iraq invaded and occupied Kuwait. Through U.S. efforts, a multinational coalition was assembled, and, under UN auspices, initiated military action against Iraq to liberate Kuwait. Arab states, especially the other five members of the Gulf Cooperation Council (Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab Emirates), Egypt, and Syria, supported Kuwait by sending troops to fight with the coalition. Many European and East Asian states sent either troops, equipment, or financial support.
After liberation, Kuwait concentrated its foreign policy efforts on development of ties to states which had participated in the multinational coalition. Notably, these states were given the lead role in Kuwait's reconstruction. Conversely, Kuwait's relations with those nations that supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, remain strained or non-existent. Palestine Liberation Organization (PLO) Chairman Yasir Arafat's support for Saddam Hussein during the war has also affected Kuwait's attitudes toward the PLO and the peace process.
Since the conclusion of the Gulf war, Kuwait has made efforts to secure allies throughout the world, particularly United Nations Security Council members. In addition to the United States, defense arrangements have been concluded with the United Kingdom, Russia, and France. Close ties to other key Arab members of the Gulf war coalition- -Egypt and Syria--have also been sustained.
Kuwait is a member of the UN and some of its specialized and related agencies, including the World Bank (IBRD), International Monetary Fund (IMF), World Trade Organization (WTO), General Agreement on Tariffs and Trade (GATT); African Development Bank (AFDB), Arab Fund for Economic and Social Development (AFESD), Arab League, Arab Monetary Fund (AMF), Council of Arab Economic Unity (CAEU), Economic and Social Commission for Western Asia (ESCWA), Group of 77 (G-77), Gulf Cooperation Council (GCC), INMARSAT, International Development Association (IDA), International Finance Corporation, International Fund for Agricultural Development, International Labor Organization (ILO), International Marine Organization, Interpol, INTELSAT, IOC, Islamic Development Bank (IDB), League of Red Cross and Red Crescent Societies (LORCS), Non- Aligned Movement, Organization of Arab Petroleum Exporting Countries (OAPEC), Organization of the Islamic Conference (OIC), Organization of Petroleum Exporting Countries (OPEC), and the International Atomic Energy Agency (IAEA).
DEFENSE
Before the Gulf war, Kuwait maintained a small military force consisting of army, navy, and air force units. The majority of equipment for the military was supplied by the United Kingdom. Aside from the few units that were able to escape to Saudi Arabia, including a majority of the air force, all of this equipment was either destroyed or taken by the Iraqis. Much of the property returned by Iraq after the Gulf war was damaged beyond repair. Iraq still retains a substantial amount of captured Kuwaiti military equipment in violation of UN resolutions.
Since the war, Kuwait, with the help of the U.S. and other allies, has made significant efforts to increase the size and modernity of their armed forces. These efforts are succeeding. The government also continues to improve defense arrangements with other Arab states, as well as UN Security Council members.
A separately organized National Guard maintains internal security. Police forces are under the authority of the Ministry of Interior.
PEOPLE
The population of Lebanon comprises Christians and Muslims. No official census has been taken since 1932, reflecting the political sensitivity in Lebanon over confessional (religious) balance. The U.S. Government estimate is that more than half of the resident population is Muslim (Shi'a, Sunni and Druze), and the rest is Christian (predominantly Maronite, Greek Orthodox, Greek Catholic, and Armenian). Shi'a Muslims make up the single largest sect. Claims since the early 1970s by Muslims that they are in the majority contributed to tensions preceding the 1975-76 civil strife and have been the basis of demands for a more powerful Muslim voice in the government.
There are over 300,000 Palestinian refugees in Lebanon registered with the United Nations Relief and Works Agency (UNRWA), and about 180,000 stateless undocumented persons resident in the country (mostly Kurds and Syrians). Palestinians and stateless persons are not accorded the legal rights enjoyed by the rest of the population.
With no official figures available, it is estimated that 600,000-900,000 persons fled the country during the initial years of civil strife (1975-76). Although some returned, continuing instability until 1990 sparked further waves of emigration, casting even more doubt on population figures.
Many Lebanese still derive their living from agriculture. The urban population, concentrated mainly in Beirut and Tripoli, is noted for its commercial enterprise, but chronic instability until 1990 in much of the country has had a strong negative impact on both agriculture and commerce. Lebanon has a higher proportion of skilled labor than any other Arab country.
HISTORY
Lebanon is the historical home of the Phoenicians, Semitic traders whose maritime culture flourished there for more than 2,000 years (c. 2700-450 B.C.). In later centuries, Lebanon's mountains were a refuge for Christians, and Crusaders established several strongholds there. Following the collapse of the Ottoman Empire after World War I, the five Ottoman provinces that had comprised present- day Lebanon were mandated to France by the League of Nations. The country gained independence in 1943, and French troops were withdrawn in 1946.
Lebanon's history from independence can be defined largely in terms of its presidents, each of whom shaped Lebanon by a personal brand of politics: Sheikh Bishara al-Khoury (1943- 52), Camille Chamoun (1952-58), Fuad Shihab (1958-64), Charles Helou (1964-70), Suleiman Franjiyah (1970-76), Elias Sarkis (1976-1982), and Amine Gemayel (1982-88). From the end of the term of Amine Gemayel in September 1988 until the election of Rene Moawad in November 1989, Lebanon had no president.
The terms of the first two presidents ended in political turmoil. In 1958, during the last months of President Chamoun's term, an insurrection broke out, aggravated by external factors. In July 1958, in response to an appeal by the Lebanese Government, U.S. forces were sent to Lebanon. They were withdrawn in October 1958, after the inauguration of President Shihab and a general improvement in the internal and international aspects of the situation.
President Franjiyah's term saw the outbreak of full-scale civil conflict in 1975. Prior to 1975, difficulties had arisen over the large number of Palestinian refugees in Lebanon and the presence of Palestinian fedayeen (commandos). Frequent clashes involving Israeli forces and the fedayeen endangered civilians in south Lebanon and unsettled the country. Following minor skirmishes in the late 1960s and early 1970s, serious clashes erupted between the fedayeen and Lebanese Government forces in May 1973.
Coupled with the Palestinian problem, Muslim and Christian differences grew more intense, with occasional clashes between private sectarian militias. The Muslims were dissatisfied with what they considered an inequitable distribution of political power and social benefits. In April 1975, after shots were fired at a church, a busload of Palestinians was ambushed by gunmen in the Christian sector of Beirut, an incident widely regarded as the spark that touched off the civil war. Palestinian fedayeen forces joined the predominantly leftist-Muslim side as the fighting persisted, eventually spreading to most parts of the country.
Elias Sarkis was elected president in 1976. In October, Arab summits in Riyadh and Cairo set forth a plan to end the war. The resulting Arab Deterrent Force (ADF), composed largely of Syrian troops, moved in at the Lebanese Government's invitation to separate the combatants, and most fighting ended soon thereafter. As an uneasy quiet settled on Beirut and parts of Lebanon, security conditions in southern Lebanon began to deteriorate. A series of clashes occurred in the south in late 1977 and early 1978 between the Palestine Liberation Organization (PLO) and Lebanese leftists on the one hand, and the pro- Israeli, southern Lebanese militia (eventually known as the "Army of South Lebanon," or SLA) on the other.
After a raid on a bus in Northern Israel left large numbers of Israeli and Palestinian guerrilla casualties, Israel invaded Lebanon in March 1978, occupying most of the area south of the Litani river. The UN Security Council passed Resolution 425 calling for withdrawal of Israeli forces from Lebanon and creating a UN Interim Force in Lebanon (UNIFIL), charged with maintaining peace. When the Israelis withdrew, they turned over positions inside Lebanon along the border to their Lebanese ally, the SLA, and formed a "security zone" which exists to this day under the effective control of Israel and the SLA.
In mid-1978, clashes between the ADF and the Christian militias erupted. Arab foreign ministers created the Arab Follow-Up Committee, composed of Lebanon, Syria, Saudi Arabia, and Kuwait, to end fighting between the Syrians and Christians. After the Saudi ambassador was wounded in December 1978, the committee did not meet again formally until June 1981, when it was convened to address security and national reconciliation. The committee was unsuccessful in making progress toward a political settlement and has been inactive since November 1981.
Israeli-Palestinian fighting in July 1981 was ended by a cease-fire arranged by U.S. President Ronald Reagan's special envoy, Philip C. Habib, and announced on July 24, 1981. The cease-fire was respected during the next 10 months, but a string of incidents, including PLO rocket attacks on northern Israel, led to the June 6, 1982, Israeli ground attack into Lebanon to remove PLO forces. Israeli forces moved quickly through south Lebanon, encircling west Beirut by mid-June and beginning a three- month siege of Palestinian and Syrian forces in the city.
Throughout this period, which saw heavy Israeli air, naval, and artillery bombardments of west Beirut, Ambassador Habib worked to arrange a settlement. In August, he was successful in bringing about an agreement for the evacuation of Syrian troops and PLO fighters from Beirut. The agreement also provided for the deployment of a three-nation Multinational Force (MNF) during the period of the evacuation, and by late August, U.S. Marines, as well as French and Italian units, had arrived in Beirut. When the evacuation ended, these units departed. The U.S. Marines left on September 10.
In spite of the invasion, the Lebanese political process continued to function, and Bashir Gemayel was elected President in August, succeeding Elias Sarkis. On September 14, however, Bashir Gemayel was assassinated. On September 15, Israeli troops entered west Beirut. During the next three days, Lebanese militiamen massacred hundreds of Palestinian civilians in the Sabra and Shatila refugee camps in west Beirut.
Bashir Gemayel's brother, Amine, was elected President by a unanimous vote of the parliament. He took office September 23, 1982. MNF forces returned to Beirut at the end of September as a symbol of support for the government.
In February 1983, a small British contingent joined the U.S., French, and Italian MNF troops in Beirut. President Gemayel and his government placed primary emphasis on the withdrawal of Israeli, Syrian, and Palestinian forces from Lebanon, and in late 1982, Lebanese- Israeli negotiations commenced with U.S. participation.
On May 17, 1983, an agreement was signed by the representatives of Lebanon, Israel, and the United States that provided for Israeli withdrawal. Syria declined to discuss the withdrawal of its troops, effectively stalemating further progress. Opposition to the negotiations and to U.S. support for the Gemayel regime led to a series of terrorist attacks in 1983 and 1984 on U.S. interests, including the bombing on April 18, 1983 of the U.S. embassy in west Beirut (63 dead), of the U.S. and French MNF headquarters in Beirut on October 23, 1983 (298 dead), and of the U.S. embassy annex in east Beirut on September 20, 1984 (8 killed).
Although the general security situation in Beirut remained calm through late 1982 and the first half of 1983, a move by Christian militiamen into the Druze-controlled Shuf area southeast of Beirut following the Israeli invasion led to a series of Druze-Christian clashes of escalating intensity beginning in October 1982. When Israeli forces unilaterally withdrew from the Shuf at the beginning of September 1983, a full-scale battle erupted with the Druze, backed by Syria, pitted against the Christian Lebanese Forces (LF) militia as well as the Lebanese army. U.S. and Saudi efforts led to a cease-fire on September 26. This left the Druze in control of most of the Shuf. Casualties were estimated to be in the thousands.
The virtual collapse of the Lebanese army in February 1984, following the defection of many of its Muslim and Druze units to opposition militias, was a major blow to the government. As it became clear that the departure of the U.S. Marines was imminent, the Gemayel Government came under increasing pressure from Syria and its Muslim Lebanese allies to abandon the May 17 accord. The Lebanese Government announced on March 5, 1984, that it was canceling its unimplemented agreement with Israel. The U.S. Marines left the same month.
Further national reconciliation talks at Lausanne under Syrian auspices failed. A new "government of national unity" under Prime Minister Rashid Karami was declared in April 1984 but made no significant progress toward solving Lebanon's internal political crises or its growing economic difficulties.
The situation was exacerbated by the deterioration of internal security. The opening rounds of the savage "camps war" in May 1985--a war that flared up twice in 1986-- pitted the Palestinians living in refugee camps in Beirut, Tyre, and Sidon against the Shi'ite Amal militia, which was concerned with resurgent Palestinian military strength in Lebanon. Eager for a solution in late 1985, Syria began to negotiate a "tripartite accord" on political reform among the leaders of various Lebanese factions, including the LF.
However, when the accord was opposed by Gemayel and the leader of the LF was overthrown by his hardline anti-Syrian rival, Samir Jaja, in January 1986, Syria responded by inducing the Muslim government ministers to cease dealing with Gemayel in any capacity, effectively paralyzing the government. In 1987, the Lebanese economy worsened, and the pound began a precipitous slide. On June 1, Prime Minister Karami was assassinated, further compounding the political paralysis. Salim al-Huss was appointed acting prime minister.
As the end of President Gemayel's term of office neared, the different Lebanese factions could not agree on a successor. Consequently, when his term expired on September 23, 1988, he appointed Army Commander General Michel Aoun as interim Prime Minister. Gemayel's acting Prime Minister, Salim al-Huss, also continued to act as de facto Prime Minister. Lebanon was thus divided between an essentially Muslim government in west Beirut and an essentially Christian government in east Beirut. The working levels of many ministries, however, remained intact and were not immediately affected by the split at the ministerial level.
In February 1989, General Aoun attempted to close illegal ports run by the LF. This led to several days of intense fighting in east Beirut and an uneasy truce between Aoun's army units and the LF. In March, an attempt by Aoun to close illegal militia ports in predominantly Muslim parts of the country led to a 6-month period of shelling of east Beirut by Muslim and Syrian forces and shelling of west Beirut and the Shuf by the Christian units of the army and the LF. This shelling caused nearly 1,000 deaths, several thousand injuries, and further destruction to Lebanon's economic infrastructure.
In January 1989, the Arab League appointed a six-member committee on Lebanon, led by the Kuwaiti foreign minister. At the Casablanca Arab summit in May, the Arab League empowered a higher committee on Lebanon--composed of Saudi King Fahd, Algerian President Bendjedid, and Moroccan King Hassan--to work toward a solution in Lebanon. The committee issued a report in July 1989, stating that its efforts had reached a "dead end" and blamed Syrian intransigence for the blockage. After further discussions, the committee arranged for a seven-point cease- fire in September, followed by a meeting of Lebanese parliamentarians in Taif, Saudi Arabia.
After a month of intense discussions, the deputies informally agreed on a charter of national reconciliation, also known as the Taif agreement. The deputies returned to Lebanon in November, where they approved the Taif agreement on November 4, and elected Rene Moawad, a Maronite Christian deputy from Zghorta in north Lebanon, President on November 5. General Aoun, claiming powers as interim Prime Minister, issued a decree in early November dissolving the parliament and did not accept the ratification of the Taif agreement or the election of President Moawad.
President Moawad was assassinated on November 22, 1989, by a bomb that exploded as his motorcade was returning from Lebanese independence day ceremonies. The parliament met on November 24 in the Biqa' Valley and elected Elias Hraoui, a Maronite Christian deputy from Zahleh in the Biqa' Valley, to replace him. President Hraoui named a Prime Minister, Salim al-Huss, and a cabinet on November 25. Despite widespread international recognition of Hraoui and his government, General Aoun refused to recognize Hraoui's legitimacy, and Hraoui officially replaced Aoun as army commander in early December.
In late January 1990, General Aoun's forces attacked positions of the LF in east Beirut in an apparent attempt to remove the LF as a political force in the Christian enclave. In the heavy fighting that ensued in east Beirut and its environs, over 900 people died and over 3,000 were wounded.
In August 1990, the National Assembly approved, and President Hraoui signed into law, constitutional amendments embodying the political reform aspects of the Taif agreement. These amendments gave some presidential powers to the council of ministers, expanded the National Assembly from 99 to 108 seats, and divided those seats equally between Christians and Muslims (see GOVERNMENT section below).
In October 1990, a joint Lebanese-Syrian military operation against General Aoun forced him to capitulate and take refuge in the French embassy. On December 24, 1990, Omar Karami was appointed Lebanon's Prime Minister. General Aoun remained in the French embassy until August 27, 1991 when a "special pardon" was issued, allowing him to leave Lebanon safely and take up residence in exile in France. 1991 and 1992 saw considerable advancement in efforts to reassert state control over Lebanese territory. Militias--with the important exception of Hizballah--were dissolved in May 1991, and the armed forces moved against armed Palestinian elements in Sidon in July 1991. In May 1992 the last of the western hostages taken during the mid-1980s by Islamic extremists was released.
In October 1991, under the sponsorship of the United States and the then-Soviet Union, the Middle East peace talks were convened in Madrid, Spain. This was the first time that Israel and its Arab neighbors had direct bilateral negotiations to seek a just, lasting, and comprehensive peace in the Middle East. Lebanon, Jordan, Syria, and representatives of the Palestinians concluded round 11 of the negotiations in September 1993.
A social and political crisis, fueled by economic instability and the collapse of the Lebanese pound, led to Prime Minister Omar Karami's resignation May 6, 1992. He was replaced by former Prime Minister Rashid al Sulh, who was widely viewed as a caretaker to oversee Lebanon's first parliamentary elections in 20 years. The elections were not prepared and carried out in a manner to ensure the broadest national consensus.
The turnout of eligible voters in some Christian locales was extremely low, with many voters not participating in the elections because they objected to voting in the presence of non-Lebanese forces. There also were widespread reports of irregularities. The electoral rolls were themselves in many instances unreliable because of the destruction of records and the use of forged identification papers. As a consequence, the results do not reflect the full spectrum of Lebanese politics.
Elements of the 1992 electoral law, which paved the way for elections, represented a departure from stipulations of the Taif agreement, expanding the number of parliamentary seats from 108 to 128 and employing a temporary districting arrangement designed to favor certain sects and political interests. According to the Taif agreement, the Syrian and Lebanese Governments were to agree in September 1992 to the redeployment of Syrian troops from greater Beirut. That date passed without an agreement. In early November 1992, Prime Minister Rafiq al-Hariri formed a new cabinet, retaining for himself the finance portfolio. The formation of the Hariri Government was widely seen as a sign that the Government of Lebanon would seriously grapple with reconstructing the Lebanese state and reviving the economy.
GOVERNMENT
Lebanon is a parliamentary democracy in which the people constitutionally have the right to change their government. However, until the parliamentary elections in 1992, the people had not been able to exercise this right during 16 years of civil war. According to the constitution, direct elections must be held for the parliament every 4 years. Parliament, in turn, elects a president every 6 years. The last presidential election was in 1989. The president and parliament choose the cabinet. Political parties may be formed and some in fact flourish.
Since the emergence of the post-1943 state, national policy has been determined largely by a relatively restricted group of traditional regional and sectarian leaders. The 1943 national pact allocated political power on an essentially confessional system, based on the 1932 census. Until 1990, seats in parliament were divided on a 6-to-5 ratio of Christians to Muslims. Positions in the government bureaucracy were allocated on a similar basis.
Efforts to alter or abolish the confessional system of allocating power have been at the center of Lebanese politics for more than 30 years. A series of amendments has substantially altered the constitution of 1926. Among the more significant is Article 95, which provides that the confessional communities of Lebanon shall be equitably represented in public employment and in the composition of the cabinet but that such a measure is not to impair the general welfare of the state. This article supplements the National Covenant of 1943, an unwritten agreement that established the political foundations of modern Lebanon. The covenant provides that public offices shall be distributed among the recognized religious groups and that the three top positions in the governmental systems shall be distributed as follows:
-- The president is to be a Maronite Christian; -- The prime minister, a Sunni Muslim, and -- The president of the National Assembly, a Shi'a Muslim.
Those religious groups most favored by the 1943 formula sought to preserve it, while those who perceived themselves to be disadvantaged sought to revise it on the basis of updated demographic data or to abolish it entirely. The struggle gave a strongly sectarian coloration to Lebanese politics and to the continuing civil strife in the country.
Under the national reconciliation agreement reached in Taif, Saudi Arabia, in October 1989, members of parliament agreed to alter the national pact to create a 50-50 Christian- Muslim balance in the parliament and reorder the powers of the different branches of government. The Taif agreement, the political reform aspects of which were signed into law in September 1990, further modified the constitution to permit greater power-sharing and put in writing many of the provisions of the national pact.
Constitutional amendments embodying the political reforms stipulated in the Taif agreement became law in 1990. They included an expansion of the number of seats in parliament and the division of seats equally between Muslims and Christians and the transfer of some powers from the president to the prime minister and council of ministers.
Constitutionally, the president has a strong and influential position. The president appoints the council of ministers and designates one of them to be prime minister. The president also has the authority to promulgate laws passed by the National Assembly, to issue supplementary regulations to ensure the execution of laws and to negotiate and ratify treaties.
The National Assembly, only sporadically active since 1975, is elected by adult suffrage based on a system of proportional representation for the confessional groups of the country. Most deputies do not represent political parties as they are known in the West, nor do they form Western-style groups in the assembly. Political blocs are usually based on confessional and local interests or on personal allegiance rather than on political affinities.
The assembly traditionally has played a significant role in financial affairs, since it has the responsibility for levying taxes and passing the budget. It also exercises political control over the cabinet through formal questioning of ministers on policy issues and by requesting a confidence debate.
Lebanon's judicial system is based on the Napoleonic Code. Juries are not used in trials. The Lebanese court system has three levels--courts of first instance, courts of appeal, and the court of cassation. There also is a system of religious courts having jurisdiction on personal status matters within their own communities, i.e., rules on such matters as marriage, divorce and inheritance.
POLITICAL CONDITIONS
In addition to its indigenous political groupings, Lebanon contains branches of many other political parties of the Arab world. These cover the political spectrum from far left to far right, from totally secular to wholly religious and often are associated with a particular religion or geographic region. Palestinian refugees, numbering about 400,000 and predominantly Muslim, constitute an important and sensitive minority.
Lebanese political parties are generally vehicles for powerful leaders whose followers are often of the same religious sect. The interplay for position and power among these leaders and groups produces a political tapestry of extraordinary complexity.
In the past, this system worked to produce a viable democracy. Recent events, however, have upset the delicate Muslim-Christian balance and resulted in a tendency for Christians and Muslims to group themselves for safety into distinct zones. All factions have called for a reform of the political system.
Some Christians favor political and administrative decentralization of the government, with separate Muslim and Christian sectors operating within the framework of a confederation. Muslims, for the most part, prefer a unified, central government with an enhanced share of power for themselves commensurate with their percentage of the population. The reforms of the Taif agreement moved in this latter direction.
ECONOMY
Lebanon's economy is liberal and open, and traditionally heavily oriented toward services. Lebanon served historically as a haven for Arab capital and as a Middle East transit point and enjoyed a vibrant and largely unregulated private sector. Lebanon's banking and tourism sectors flourished between the Gulf oil boom of 1973 and the beginning of Lebanon's civil war in 1975 by serving regional needs. Real GDP growth was 6% per year from 1965 to 1975.
Despite the civil war and mounting government budget deficits resulting from an inability to collect taxes, Lebanon kept its currency stable and inflation rate manageable until the early 1980s. Expatriate workers' remittances, the flow of capital from abroad to support various militias, the PLO's economic activities, and the narcotics trade all contributed to a positive balance of payments.
Events in the early 1980s, including the Israeli invasion of 1982, conspired against the Lebanese economy, resulting in accumulated infrastructure damage, massive dislocations of the population, growing migration of people and capital, and the uprooting of the PLO bureaucracy.
Recession in the Gulf led to a sharp reduction in remittances. Beirut's prominence as a center for finance, commerce, and tourism faded away. A calmer security environment in 1986- 87, combined with a sharp depreciation of the Lebanese pound and a decline in labor costs resulting from inflation of 600%, produced a modest economic rebound. Growth was cut short by the general chaos of 1988-90.
Hostilities in 1989-90 in industrial and prosperous areas of Lebanon had a dramatic and negative impact on production and exports, triggered massive outflows of capital and people, and created circumstances resulting in the "dollarization" of the economy.
The end of hostilities in 1990, the beginning of the process of national reconciliation, and the removal of internal barriers to the movements of goods and people produced a short- term economic boom in 1991. This high level of activity proved unsustainable, largely because of enormous state deficits, poor economic management by the government, public sector corruption, the unavailability of commercial credit, and the collapse of public confidence in the nation's leadership.
A large, retroactive public sector salary increase in late 1991, financed through the sale of Treasury bills, precipitated a crisis: From January 1, 1992, to early October, inflation galloped to about 130%, and currency lost 180% of its value. The high cost of living became, and has remained, an issue of acute concern to the Lebanese public.
A surge of optimism swept across Lebanon with the advent of the Hariri Government in October 1992, amidst expectations that the billionaire businessman and his team of advisors would reform state finances and administration, embark on needed emergency infrastructure reconstruction, and attract foreign aid. Demand for Lebanese pounds jumped immediately, despite substantial intervention by the central bank to stabilize the exchange market (the pound was valued at the end of May 1993 at 1,740 to a dollar, after an early October 1992 low of 2,400 to a dollar). There was also evidence of deflation.
The Ministry of Finance has achieved remarkable advances toward closing the budget deficit, despite rigidities in debt servicing, the public sector payroll, and large subsidies to the electricity and telephone companies. The deficit in the first quarter of 1993 amounted to $104 million, compared to $550 million in the first quarter of 1992.
The absence of functioning services is a serious obstacle to growth. The Hariri Government has made infrastructure rehabilitation a centerpiece of its efforts, using the December 1991 emergency rehabilitation plan (ERP) as a blueprint. It calls for spending $2.3 billion in the next 2.5 years, primarily on rejuvenating the electricity, telecommunications, water supply, waste water, and solid waste management sectors.
The government has already begun pre-qualifying international firms for projects in those fields. The government has in hand commitments for over $900 million in allocated and non- allocated foreign assistance, almost entirely in the form of loans.
In February 1993, the World Bank signed an agreement to loan $175 million in support of ERP. Future aid, necessary for partial financing of an ambitious $13-billion, 10-year development plan revealed by the government in March 1993, will depend largely on the Hariri team's ability to point to a record of economic stabilization and well-managed use of current assistance flows for reconstruction.
Hariri's economic policy is firmly rooted in the principle that infrastructure spending and budget austerity will stimulate private-sector growth. The prime minister's advisers hope to develop more sophisticated capital markets to attract a portion of Lebanese capital held abroad, which amounts to tens of billions of dollars, institutionalize exchange rate stability, and help manage a debt burden which is bound to grow as ambitious rehabilitation plans proceed.
The formation of a private real estate company to rebuild the downtown commercial center of Beirut is a centerpiece of the Hariri team's strategy for hooking economic recovery to the engine of private sector investment. The company will expropriate property in the area and compensate owners with shares in the company. The company is to obtain capitalization equal to half of the estimated property value in the development zone, estimated at $4 billion. Gulf Arab businessmen have already committed about $500 million to the controversial project.
Lebanon may have experienced a modest balance of trade deficit in the first quarter of 1993, estimated by a private bank at $1.8 million. A large trade deficit was virtually eliminated by capital inflows. Gold reserves amounted to $3 billion, and foreign exchange reserves at $1.2 billion. Foreign debt may approach $700 million today, and domestic public debt exceeds $2.5 billion.
Another issue bringing increasing attention to Lebanon is its role as a major drug producing and trafficking country. In addition to traditional hashish production, opium is cultivated and processed into heroin in Lebanon, and Lebanese traffickers have become increasingly involved in the cocaine trade.
The dramatic expansion of drug activities in Lebanon can be traced primarily to the breakdown of central government authority. Because of the potential for huge profits from the drug trade, many militias in Lebanon, including known terrorist elements, are thought to be engaged in one or more aspects of the drug trade to finance their operations.
Since 1976, Syrian troops have occupied Lebanon's prime drug-producing area, the Biqa' Valley. They constitute the only formal security authority in this area.
FOREIGN RELATIONS
Lebanon's foreign policy reflects its geographic location, the composition of its population, and its reliance on commerce and trade. Lebanon hopes to reestablish good ties with Western countries and in the Middle East. Lebanon remains friendly with Western countries and follows a generally cautious course in its relations with countries of the former Soviet bloc.
Lebanon's foreign policy is also heavily influenced by Syria, which maintains forces throughout parts of Lebanon. Lebanon did not participate in the 1967 or 1973 Arab-Israeli war or in the 1991 Gulf War. Lebanon and Israel are now conducting bilateral negotiations in the Arab-Israeli peace process.
PEOPLE
About 50% of the population lives in Muscat and the Batinah coastal plain northwest of the capital; about 200,000 live in the Dhofar (southern) region, and about 30,000 live in the remote Musandam peninsula on the Strait of Hormuz. At least 550,000 expatriates live in Oman, of whom about 455,000 are guest workers from South Asia, Egypt, Jordan, and the Philippines.
Since 1970, the government has given especially high priority to education to develop a domestic work force, which the government considers a vital factor in the country's economic and social progress. In 1986, Oman's first university, Sultan Qaboos University, opened. Other post-secondary institutions include a technical college, banking institute, teachers training college, and health sciences institute. As many as 200 scholarships are awarded each year for study abroad.
HISTORY
Muscat and Oman (as the country was called before 1970) was converted to Islam in the seventh century A.D., during the lifetime of Muhammad. Ibadhism, a form of Islam tracing its roots to the Kharijite movement, became the dominant religious sect in Oman by the eighth century. Contact with Europe was established in 1508, when the Portuguese conquered parts of the coastal region. Portugal's influence predominated for more than a century, with only a short interruption by the Turks. Fortifications built during the Portuguese occupation can still be seen at Muscat.
After the Portuguese were expelled in 1650 and while resisting Persian attempts to establish hegemony, Muscat and Oman extended its conquests to Zanzibar (now part of Tanzania), other parts of the eastern coast of Africa, and portions of the southern Arabian peninsula. During this period, political leadership shifted from the Ibadhi imams, who were elected religious leaders, to hereditary sultans who established their capital in Muscat. The Muscat rulers established trading posts on the Persian coast (now Iran) and also exercised a measure of control over the Makran coast (now Pakistan) of mainland Asia. By the early 19th century, Muscat and Oman was the most powerful state in Arabia and on the East African coast.
Muscat and Oman was the object of Franco-British rivalry throughout the 18th century. The British developed the stronger position in 1908 through an agreement of friendship. During the 19th century, Muscat and Oman and the United Kingdom concluded several treaties of friendship and commerce. Their traditional association was confirmed in 1951 through a new treaty of friendship, commerce, and navigation by which the United Kingdom recognized the sultanate as a fully independent state.
When Sultan Sa'id Sayyid died in 1856, his sons quarreled over his succession. As a result of this struggle, the empire--through the mediation of the British Government under the "Canning Award"--was divided in 1861 into two separate principalities--Zanzibar, with its East African dependencies, and Muscat and Oman. Zanzibar paid an annual subsidy to Muscat and Oman until its independence in early 1964.
During the late 19th and early 20th centuries, the sultan in Muscat faced rebellion by members of the Ibadhi sect residing in the interior who wanted to be ruled exclusively by their religious leader, the Imam of Oman. This conflict was resolved temporarily by the Treaty of Seeb, which granted the imam autonomous rule in the interior, while recognizing the nominal sovereignty of the sultan.
The conflict flared up again in 1954, when the new imam led a sporadic five-year rebellion against the sultan's efforts to extend government control into the interior. The insurgents were defeated in 1959 with British help. The sultan then terminated the Treaty of Seeb and voided the office of the imam. In the early-1960s, the exiled imam obtained support from Saudi Arabia and other Arab governments, but this support ended in the 1980s.
In 1964, a separatist revolt began in Dhofar Province. Aided by communist and leftist governments such as the former South Yemen (People's Democratic Republic of Yemen), the rebels formed the Dhofar Liberation Front, which later merged with the Marxist-dominated Popular Front for the Liberation of Oman and the Arab Gulf (PFLOAG). The PFLOAG's declared intention was to overthrow all traditional Arab Gulf regimes in the Persian Gulf.
In mid-1974, PFLOAG shortened its name to the Popular Front for the Liberation of Oman (PFLO) and embarked on a political rather than a military approach to gain power in the other Persian Gulf states, while continuing the guerrilla war in Dhofar.
Sultan Qaboos bin Sa'id assumed power on July 24, 1970, in a palace coup directed against his father, Sa'id bin Taymur, who later died in exile in London. The new sultan was confronted with insurgency in a country plagued by endemic disease, illiteracy, and poverty.
One of the new sultan's first measures was to abolish many of his father's harsh restrictions, which had caused thousands of Omanis to leave the country, and offer amnesty to opponents of the previous regime, many of whom returned to Oman. He also established a modern government structure; and launched a major development program to upgrade educational and health facilities, build a modern infrastructure, and develop the country's resources.
In an effort to curb the Dhofar insurgency, Sultan Qaboos expanded and re-equipped the armed forces and granted amnesty to all surrendered rebels while vigorously prosecuting the war in Dhofar. He obtained direct military support from Iran and Jordan. By early-1975, the guerrillas were confined to a 50-square-kilometer (20-sq.-mi.) area and shortly thereafter were defeated. As the war drew to a close, civil action programs were given increasing priority throughout the province and since then have become major elements in winning the allegiance of the people. The PFLO threat appeared to diminish further with the establishment of diplomatic relations in October 1983 between South Yemen and Oman, and South Yemen's subsequent diminution of propaganda and subversive activities against Oman. In late- 1987, Oman opened an embassy in Aden, South Yemen, and appointed its first resident ambassador to the country.
GOVERNMENT AND POLITICAL CONDITIONS
Sultan Qaboos bin Sa'id, the monarch, rules with the aid of his ministers. His dynasty, the Al Sa'id, was founded about 250 years ago by Imam Ahmed bin Sa'id. The sultan is a direct descendant of the 19th-century ruler, Sa'id bin Sultan. The sultanate has no constitution, Western-style legislature, or legal political parties.
Oman's judicial system traditionally has been based on the Shari'a--the Koranic laws and the oral teachings of the Islamic Prophet Muhammad. The Shari'a courts fall under the jurisdiction of the Ministry of Justice, Awqaf, and Islamic Affairs. Oman's first criminal code was not enacted until 1974. The current structure of the criminal court system was established in 1984 and consists of a magistrate court in the capital and four additional magistrate courts in Sohar, Sur, Salalah, and Nizwa. In the less-populated areas and among the nomadic bedouin, tribal custom often is the law.
Administratively, the populated regions are divided into numerous districts (wilayats) presided over by governors (walis) responsible for settling local disputes, collecting taxes, and maintaining peace. Most wilayats are small; an exception is the wilayat of Dhofar, which comprises the whole province. The wali of Dhofar is an important government figure, holding cabinet rank, while other walis operate under the guidance of the ministry of interior.
In November 1991, Sultan Qaboos established the Majlis ash- Shura (Council of Deliberation/Consultation), which replaced the 10-year-old State Consultative Council, in an effort to systematize and broaden public participation in government. Representatives were chosen in the following manner: Local caucuses in each of the 59 districts sent forward the names of three nominees, whose credentials were reviewed by a cabinet committee. These names were then forwarded to the sultan, who made the final selection. The Council serves as a conduit of information between the people and the government ministries. It is empowered to review drafts of economic and social legislation prepared by service ministries, such as communications and housing, and to provide recommendations. Service ministers may also be summoned before the Majlis to respond to representatives' questions. It has no authority in the areas of foreign affairs, defense, security, and finances.
After North and South Yemen merged in May 1990, Oman settled its border disputes with the new Republic of Yemen on October 1, 1992. The two neighbors have cooperative bilateral relations.
Although Oman enjoys a high degree of internal stability, regional tensions in the aftermath of the Persian Gulf war and the Iran-Iraq war continue to necessitate large defense expenditures. In 1992, Oman budgeted $1.73 billion for defense--about 15% of its GDP. Oman maintains a small but effective military, supplied mainly with British equipment in addition to items from the United States, France, and other countries. British officers, on loan or on contract to the sultanate, help staff the armed forces, although a program of "Omanization" has steadily increased the proportion of Omani officers over the past several years.
ECONOMY
When Oman declined as an entrepot for arms and slaves in the mid-19th century, much of its former prosperity was lost, and the economy relied almost exclusively on agriculture, camel and goat herding, fishing, and traditional handicrafts. Today, oil fuels the economy and revenues from petroleum products have enabled Oman's dramatic development over the past 20 years.
Oil was first discovered in the interior near Fahud in the western desert in 1964. Petroleum Development (Oman) Ltd. (PDO) began production in August 1967. The Omani Government owns 60% of PDO production, and foreign interests own 40% (Royal Dutch Shell owns 34%; the remaining 6% is owned by Compagnie Francaise des Petroles [Total] and Partex). In 1976, Oman's oil production rose to 366,000 barrels per day (b/d) but declined gradually to about 285,000 b/d in late 1980 due to the slow depletion of recoverable reserves. From 1981 to 1986, Oman was able to compensate for declining oil prices by increasing its production levels, which reached 600,000 b/d. With the collapse of oil prices in 1986, however, revenues dropped dramatically. Production was cut back temporarily in coordination with the Organization of Petroleum Exporting Countries (OPEC), and production levels again reached 600,000 b/d by mid-1987, which helped increase revenues. By mid-1993, production had climbed to more than 750,000 b/d but falling oil prices may necessitate further adjustment. Oman is not a member of OPEC but is a leader of Independent Petroleum Exporting Countries.
Oman does not have the immense oil resources of some of its neighbors. Nevertheless, recently, it has found more oil than it has produced, and total proven reserves rose from 2.9 billion barrels in January 1982 to 4.6 billion barrels by the end of 1992. The outlook for additions to reserves is promising, although Oman's complex geology makes exploration and production a challenge. Recent improvements in technology, however, have enhanced recovery. Natural gas reserves, which will increasingly provide the fuel for power generation and desalination, stand at 17 trillion cubic feet. Studies are currently underway to supply export of gas for liquefied natural gas after processing in Oman.
Agriculture and fishing are the traditional way of life in Oman. Dates and limes, grown extensively in the Batinah coastal plain and the highlands, make up most of the country's agricultural exports. Coconut palms, wheat, and bananas also are grown, and cattle are raised in Dhofar. Other areas grow cereals and forage crops. Poultry production is steadily rising. Fish and shellfish exports reached $35 million in 1991.
The government is undertaking many development projects to modernize the economy and improve the standard of living. Increases in agriculture and especially fish production are believed possible with the application of modern technology. The Muscat capital area has both an international airport at Seeb and a deepwater port at Mina Qaboos. An airport in Salalah, capital of the Dhofar Governate, and a seaport at nearby Raysut were recently completed. A national road network includes a $400-million highway linking the northern and southern regions. In an effort to diversify, the government built a $200-million copper mining and refining plant at Sohar. Other large industrial projects include an 80,000 b/d oil refinery and two cement factories. An industrial zone at Rusayl is the showcase of the country's modest light industries. Marble, lime-stone, and gypsum may prove commercially valuable in the future.
Some of the largest budgetary outlays are in the areas of health services and basic education. The number of schools rose from three in 1970 to more than 840 by 1993, while hospital and clinic beds increased during this period from 12 to 4,355.
The subsequent drop in oil prices over the 1980s, combined with rapidly growing recurrent outlays and ambitious spending programs for development and defense usually have created budget deficits every year (except 1990) since 1982.
Economic growth surged in Oman in 1992. This was the direct result of the improvement in Oman's oil sector, which experienced higher prices and an increased production level. The other key sector of the economy, government spending, is directly driven by the amount of oil revenues the government receives.
The economic outlook for the remainder of the 1990s is good, although falling oil prices once again will require budget cutbacks. The Omani Government is continuing to pursue its fourth five-year plan, launched in 1991, to reduce its dependence on oil and expatriate labor. The plan focuses on income diversification, job creation for Omanis in the private sector, and development of Oman's interior. Government programs offer soft loans and propose the building of new industrial estates in population centers outside the capital area. The government is giving greater emphasis to the "Omanization" of the labor force, particularly in sectors such as banking, hotels, and municipally-sponsored shops benefiting from government subsidies. Currently, efforts are underway to liberalize investment opportunities in order to attract foreign capital.
U.S. firms face a small and highly competitive market dominated by trade with Japan and Britain and re-exports from the United Arab Emirates. The sale of U.S. products also is hampered by higher transportation costs and the lack of familiarity with Oman on the part of U.S. exporters. However, the traditional U.S. market in Oman, oil field supplies and services, should grow as the country's major oil producer continues a major expansion of fields and wells.
FOREIGN RELATIONS
Except for a brief period of Persian rule, the Omanis have remained independent since 1650. Under its previous ruler, Oman had limited contacts with the outside world, including neighboring Arab states. When Sultan Qaboos assumed power in 1970, only two countries, the United Kingdom and India, maintained a diplomatic presence in the country. A special treaty relationship permitted the United Kingdom close involvement in Oman's civil and military affairs. Ties with the United Kingdom have remained friendly under Sultan Qaboos.
Oman pursues a moderate foreign policy. It supported the Camp David accords and was one of three Arab League states, along with Somalia and Sudan, that did not break relations with Egypt after the signing of the Egyptian-Israeli Peace Treaty in 1979. Oman supports the current Middle East peace initiatives, as it did those in 1983. In April 1994, Oman hosted the plenary meeting of the water working group of the peace process, the first Gulf state to do so During the Persian Gulf crisis, Oman assisted the UN coalition effort. Oman has developed close ties to its neighbors; it joined the six-member Gulf Cooperation Council when it was established in 1980.
For many years, Oman avoided relations with communist countries because of the communist support connection to the insurgency in Dhofar. Recently, however, Oman has undertaken diplomatic initiatives in the Central Asian republics, particularly in Kazakhstan, where it is involved in a joint oil pipeline project. In addition, Oman maintains a low-key relationship with Iran, its northern neighbor, and the two countries regularly exchange delegations. Oman is an active member in international and regional organizations, notably the Arab League. Oman is a temporary member of the UN Security Council for 1994-95.
PEOPLE
Saudi Arabia's 1992 population is estimated to be about 16.9 million, including about 4.6 million resident foreigners. Until the 1960s, most of the population was nomadic or semi-nomadic; due to rapid economic and urban growth, more than 95% of the population now is settled. Some cities and oases have densities of more than 1,000 people per square kilometer (2,600 per sq. mile).
Saudi Arabia is known as the birthplace of Islam, which in the century following Muhammad's death in 632 spread to much of the Mediterranean world. Islam obliges all Muslims to make the Hajj, or pilgrimage to Makkah, at least once during their lifetime if they are able to do so. The cultural environment in Saudi Arabia is highly conservative; the country adheres to a strict interpretation of Islamic religious law (Shari'a). Cultural presentations must conform to narrowly defined standards of ethics. Men and women are not permitted to attend public events together and are segregated in the work place.
Most Saudis are ethnically Arab. Some are of mixed ethnic origin and are descended from Turks, Iranians, Indonesians, Indians, and Africans, most of whom immigrated as pilgrims and reside in the Hijaz region along the Red Sea coast. Many Arabs from nearby countries are employed in the kingdom. There also are significant numbers of expatriate workers from North America, South Asia, Europe, and East Asia.
HISTORY
Except for a few major cities and oases, the harsh climate historically prevented much settlement of the Arabian Peninsula. People of various cultures have lived there over a span of more than 5,000 years. The Dilmun culture, along the Gulf coast, was contemporaneous with the Sumerians and ancient Egyptians, and most of the empires of the ancient world traded with the states of the peninsula.
The Saudi state began in central Arabia in about 1750. A local ruler, Muhammad bin Saud, joined forces with an Islamic reformer, Muhammad Abd Al-Wahhab, to create a new political entity. Over the next 150 years, the fortunes of the Saud family rose and fell several times as Saudi rulers contended with Egypt, the Ottoman Turks, and other Arabian families for control on the peninsula. The modern Saudi state was founded by the late King Abd Al-Aziz Al-Saud (known internationally as Ibn Saud). In 1902, Abd Al-Aziz recaptured Riyadh, the Al-Saud dynasty's ancestral capital, from the rival Al-Rashid family. Continuing his conquests, Abd Al-Aziz subdued Al-Hasa, the rest of Nejd, and the Hijaz between 1913 and 1926. In 1932, these regions were unified as the Kingdom of Saudi Arabia.
Boundaries with Jordan, Iraq, and Kuwait were established by a series of treaties negotiated in the 1920s, with two "neutral zones"--one with Iraq and the other with Kuwait--created. The Saudi-Kuwaiti neutral zone was administratively partitioned in 1971, with each state continuing to share the petroleum resources of the former zone equally. Tentative agreement on the partition of the Saudi-Iraqi neutral zone was reached in 1981, and partition was finalized by 1983. The country's southern boundary with Yemen was partially defined by the 1934 Treaty of Taif, which ended a brief border war between the two states. It remains undefined in many areas. The border between Saudi Arabia and the United Arab Emirates was agreed upon in 1974. Boundary differences with Qatar remained unresolved.
King Abd Al-Aziz died in 1953 and was succeeded by his eldest son, Saud, who reigned for 11 years. In 1964, Saud abdicated in favor of his half- brother, Faisal, who had served as Foreign Minister. Because of fiscal difficulties, King Saud had been persuaded in 1958 to delegate direct conduct of Saudi Government affairs to Faisal as Prime Minister; Saud briefly regained control of the government in 1960-62. In October 1962, Faisal outlined a broad reform program, stressing economic development. Proclaimed King in 1964 by senior royal family members and religious leaders, Faisal also continued to serve as Prime Minister. This practice has been followed by subsequent kings.
The mid-1960s saw external pressures generated by Saudi-Egyptian differences over Yemen. When civil war broke out in 1962 between Yemeni royalists and republicans, Egyptian forces entered Yemen to support the new republican government, while Saudi Arabia backed the royalists. Tensions subsided only after 1967, when Egypt withdrew its troops from Yemen.
Saudi forces did not participate in the Six-Day (Arab-Israeli) war of June 1967, but the government later provided annual subsidies to Egypt, Jordan, and Syria to support their economies. During the 1973 Arab- Israeli war, Saudi Arabia participated in the Arab oil boycott of the United States and Netherlands. A member of the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia had joined other member countries in moderate oil price increases beginning in 1971. After the 1973 war, the price of oil rose substantially, dramatically increasing Saudi wealth and political influence.
In 1975, King Faisal was assassinated by a nephew, who was executed after an extensive investigation concluded that he acted alone. Faisal was succeeded by his half-brother Khalid as King and Prime Minister; their half-brother Prince Fahd was named Crown Prince and First Deputy Prime Minister. King Khalid empowered Crown Prince Fahd to oversee many aspects of the government's international and domestic affairs. Economic development continued rapidly under King Khalid, and the kingdom assumed a more influential role in regional politics and international economic and financial matters.
In June 1982, King Khalid died, and Fahd became King and Prime Minister in a smooth transition. Another half-brother, Prince Abdullah, Commander of the Saudi National Guard, was named Crown Prince and First Deputy Prime Minister. King Fahd's brother, Prince Sultan, the Minister of Defense and Aviation, became Second Deputy Prime Minister.
Under King Fahd, the Saudi economy adjusted to sharply lower oil revenues resulting from declining global oil prices. Saudi Arabia supported neutral shipping in the Gulf during periods of the Iran-Iraq war and aided Iraq's war-strained economy. King Fahd played a major part in bringing about the August 1988 cease-fire and in organizing and strengthening the Gulf Cooperation Council (GCC), a group of six Arabian Gulf states dedicated to fostering regional economic cooperation and peaceful development.
In 1990-91, King Fahd played a key role before and during the Gulf war. It was his early, formal request to President Bush for military assistance on August 6, 1990, that allowed U.S. troops to deploy in time to avert possible moves by Iraq's Saddam Hussein into Saudi Arabia. King Fahd's action also consolidated the coalition of forces against Iraq and helped define the tone of the operation as a multilateral effort to reestablish the sovereignty and territorial integrity of Kuwait. Acting as a rallying point and personal spokesman for the coalition, King Fahd helped bring together his nation's GCC allies, Western allies, and Arab allies, as well as non-aligned nations from Africa and the emerging democracies of Eastern Europe. He used his influence as Custodian of the Two Holy Mosques to persuade other Arab and Islamic nations to join the coalition.
GOVERNMENT AND POLITICAL CONDITIONS
The central institution of Saudi Arabian Government is the monarchy. No formal constitution exists; there are no political parties or national elections. The authority of the monarchy is based on Islamic law (Shari'a). The king's powers are limited because he must observe the Shari'a and other Saudi traditions. He also must retain a consensus of the Saudi royal family, religious leaders (ulema), and other important elements in Saudi society. The leading members of the royal family choose the king from among themselves with the subsequent approval of the ulema.
Saudi kings gradually have developed a central government. Since 1953, the Council of Ministers, appointed by and responsible to the king, has advised on the formulation of general policy and directed the activities of the growing bureaucracy. This council consists of a prime minister, the first and second deputy prime ministers, 20 ministers (of whom the minister of defense is also the second deputy prime minister), two ministers of state, and a small number of advisers and heads of major autonomous organizations.
Legislation is by resolution of the Council of Ministers, ratified by royal decree, and must be compatible with the Shari'a. Justice is administered according to the Shari'a by a system of religious courts whose judges are appointed by the king on the recommendation of the Supreme Judicial Council, composed of 12 senior jurists. The independence of the judiciary is protected by law. The king acts as the highest court of appeal and has the power to pardon. Access to high officials (usually at a majlis, or public audience) and the right to petition them directly are well-established traditions.
The kingdom is divided into 13 provinces governed by princes or close relatives of the royal family. All governors are appointed by the king.
In March 1992, King Fahd issued several decrees outlining the basic statutes of government and codifying for the first time procedures concerning the royal succession. The King's political reform program also provided for the establishment of a national Consultative Council, with appointed members having advisory powers to review and give advice on issues of public interest. It also outlined a framework for councils at the provincial or emirate level.
In September 1993, King Fahd issued additional reform decrees, appointing the members of the national Consultative Council and spelling out procedures for the new council's operations. He announced reforms regarding the Council of Ministers, including term limitations of four years and regulations to prohibit conflict of interest for ministers and other high-level officials. The members of 13 provincial councils and the councils' operating regulations also were announced in September 1993.
ECONOMY
Oil was discovered in Saudi Arabia by American geologists in the 1930s, although large-scale production did not begin until after World War II. Oil wealth has made possible rapid economic development, which began in earnest in the 1960s and accelerated spectacularly in the 1970s, transforming the kingdom.
Saudi oil reserves are the largest in the world, and Saudi Arabia is the world's leading oil producer and exporter. Oil accounts for more than 90% of the country's exports and nearly 75% of government revenues. Proven reserves are estimated at more than 260 billion barrels--about one-quarter of world oil reserves.
More than 95% of all Saudi oil is produced on behalf of the Saudi Government by the parastatal giant, Saudi ARAMCO. In June 1993, Saudi ARAMCO absorbed the state marketing and refining company (SAMAREC), becoming the world's largest fully integrated oil company. Operating in the former neutral zone, the Japanese-owned Arabian Oil Company (AOC) and the Saudi subsidiary of Texaco, Saudi Arabian Texaco, provide the rest of Saudi crude oil production. Most Saudi oil exports move by tanker from terminals at Ras Tanura and Ju'Aymah. The remaining oil exports are transported via the east-west pipeline across the kingdom to the Red Sea port of Yanbu.
Due to a sharp rise in petroleum revenues in 1974 following the 1973 Arab-Israeli war, Saudi Arabia became one of the fastest-growing nations in the world. It enjoyed a substantial surplus in its overall trade with other countries; imports increased rapidly; and ample government revenues were available for development, defense, and aid to other Arab and Islamic countries.
But higher oil prices led to development of more oil fields around the world and reduced global consumption. The result, beginning in the mid- 1980s, was a worldwide oil glut, which introduced an element of planning uncertainty for the first time in a decade. Saudi oil production, which had increased to almost 10 million barrels per day (b/d) during 1980-81, dropped to about 2 million b/d in 1985. Budgetary deficits developed, and the government drew down its foreign assets. Responding to financial pressures, Saudi Arabia gave up its role as the "swing producer" within OPEC in the summer of 1985 and accepted a production quota. Since then, Saudi oil policy has been guided by a desire to maintain market and quota shares.
Through five-year development plans, the government has sought to allocate its petroleum income to transform its relatively undeveloped, oil-based economy into that of a modern industrial state while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed rapidly, and the standard of living of most Saudis has improved significantly. Dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. A shortage of skilled Saudi workers at all levels remains the principal obstacle to economic diversification and development; about 3.5 mil-lion non-Saudis are employed in the economy.
Saudi Arabia's first two development plans, covering the 1970s, emphasized infrastructure. The results were impressive: The total length of paved highways tripled; power generation increased by a multiple of 28; and the capacity of the seaports grew tenfold. For the third plan (1980-85), the emphasis changed. Spending on infrastructure declined, but it rose markedly on education, health, and social services. The share for diversifying and expanding productive sectors of the economy (primarily industry) did not rise as planned; but the two industrial cities of Jubail and Yanbu--built around the use of the country's oil and gas to produce steel, petrochemicals, fertilizer, and refined oil products--were largely completed.
In the fourth plan (1985-90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. The private sector became more important, rising to 70% of non-oil GDP by 1987. While still concentrated in trade and commerce, private investment increased in industry, agriculture, banking, and construction companies. These private investments were supported by generous government financing and incentive programs. The objective was for the private sector to have 70%-80% ownership in most joint venture enterprises.
The fifth plan (1990-95) emphasizes consolidation of the country's defenses; improved and more efficient government social services; regional development; and, most importantly, creating greater private- sector employment opportunities for Saudis by reducing the number of foreign workers.
The sixth five-year plan will focus on lowering the cost of government services without cutting them and will seek to expand educational training programs. The plan calls for reducing the kingdom's dependence on the petroleum sector by diversifying economic activity, particularly in the private sector, with special emphasis on industry and agriculture.
FOREIGN RELATIONS
Saudi foreign policy objectives are to maintain its security and its paramount position on the Arabian Peninsula, defend general Arab interests, promote solidarity among Islamic governments, and maintain cooperative relations with other oil-producing and major oil-consuming countries. Saudi Arabia joined in the Islamic world's condemnation of the Soviet invasion of Afghanistan. Saudi trade and diplomatic relations with the countries of Eastern Europe, the former Soviet Union, and the People's Republic of China are growing at a cautious rate.
Saudi Arabia signed the UN Charter in 1945. The country plays a prominent and constructive role in the International Monetary Fund, the World Bank, and Arab and Islamic financial and development assistance institutions. It is one of the largest aid donors in the world and gives aid to numerous Arab, African, and Asian countries. Jeddah is the headquarters of the Secretariat of the Organization of the Islamic Conference and its subsidiary organization, the Islamic Development Bank, founded in 1969.
Membership in the 13-member OPEC and in the technically and economically oriented Arab producer group--the Organization of Arab Petroleum Exporting Countries--facilitates coordination of Saudi oil policies with other oil-exporting governments. As the world's leading exporter of petroleum, Saudi Arabia has a special interest in preserving a stable and long-term market for its vast oil resources by allying itself with healthy Western economies which can protect the value of Saudi financial assets. It generally has acted to stabilize the world oil market and tried to moderate sharp price movements.
The Saudis frequently help mediate regional crises and actively support the Israeli-Palestinian peace negotiations. A charter member of the Arab League, Saudi Arabia supports the Arab position that Israel must withdraw from the territories which it occupied in June 1967, including East Jerusalem. Saudi Arabia supports a peaceful resolution of the Arab-Israeli conflict but rejected the Camp David accords, claiming that they would be unable to achieve a comprehensive political solution that would ensure Palestinian rights and adequately address the status of Jerusalem. Although Saudi Arabia broke diplomatic relations with and suspended aid to Egypt in the wake of Camp David, the two countries renewed formal ties in 1987.
In 1990-91, King Fahd and Saudi Arabia played an important role in the Gulf war, developing new allies and improving existing relationships between Saudi Arabia and some other countries. However, there also were diplomatic and financial costs. Relations between Saudi Arabia and Tunisia, Algeria, and Libya deteriorated. Each country had remained silent following Iraq's invasion of Kuwait but called for an end to violence once the deployment of coalition troops began. Relations between these countries and Saudi Arabia are slowly returning to pre-war status.
Saudi Arabia's relations with those countries which expressed support for Saddam Hussein's invasion of Kuwait--Yemen, Jordan, and Sudan--were severely strained during and immediately after the war. For example, several hundred thousand Yemenis were expelled from Saudi Arabia after the Government of Yemen announced its position, thus exacerbating an existing border dispute. Saudi-Yemeni relations, especially in the wake of the 1994 Yemen civil war, remain fragile and of significant concern to the Saudi Government. The Palestine Liberation Organization's support for Saddam cost it financial aid as well as good relations with Saudi Arabia and other Gulf states. Recently, though, there have been the beginnings of a rapprochement between Saudi Arabia and the Palestinians, with the Saudi Government providing assistance for Palestinian Authority start-up costs.
During and after the Gulf war, the Government of Saudi Arabia provided water, food, shelter, and fuel for coalition forces in the region. There also were monetary payments to some coalition partners. Saudi Arabia's combined costs in payments, forgone revenues, and donated supplies were $55 billion. More than $15 billion went toward reimbursing the United States alone.
PEOPLE
Ethnic Syrians are of Semitic stock. Syria's population is 90% Muslim-- 74% Sunni and 16% other Muslim groups including the Alawi, Shia, and Druze--and 10% Christian. There is also a small Syrian Jewish community.
Arabic is the official, and most widely spoken, language.
Arabs, including some 300,000 Palestinian refugees, make up 90% of the population. Many educated Syrians also speak English or French, but English is the more widely understood. The Kurds, many of whom speak Kurdish, make up 9% of the population and live mostly in the north-east corner of Syria, though sizable Kurdish communities live in most major Syrian cities as well. Armenian and Turkic are spoken among the small Armenian and Turkoman populations.
Most people live in the Euphrates River valley and along the coastal plain, a fertile strip between the coastal mountains and the desert. Overall population density is about 140/sq. mi.
Education is free and compulsory from ages 6 to 11. Schooling consists of six years of primary education followed by a three-year general or vocational training period and a three-year academic or vocational program. The second three-year period of academic training is required for university admission. Total enrollment at post-secondary schools is over 150,000. The literacy rate of Syrians aged 15 and older is 78% for males and 51% for females.
Ancient Syria's cultural and artistic achievements and contributions are many. Archaeologists have discovered extensive writings and evidence of a brilliant culture rivaling those of Mesopotamia and Egypt in and around the ancient city of Ebla. Later Syrian scholars and artists contributed to Hellenistic and Roman thought and culture. Zeno of Sidon founded the Epicurean school; Cicero was a pupil of Antiochus of Ascalon at Athens; and the writings of Posidonius of Apamea influenced Livy and Plutarch.
Syrians have contributed to Arabic literature and music and have a proud tradition of oral and written poetry. Although declining, the world famous handicraft industry still employs thousands.
HISTORY
Archaeologists have demonstrated that Syria was the center of one of the most ancient civilizations on earth. Around the excavated city of Ebla in northern Syria, discovered in 1975, a great Semitic empire spread from the Red Sea north to Turkey and east to Mesopotamia from 2500 to 2400 B.C. The city of Ebla alone during that time had a population estimated at 260,000. Scholars believe the language of Ebla to be the oldest Semitic language.
Syria was occupied successively by Canaanites, Phoenicians, Hebrews, Arameans, Assyrians, Babylonians, Persians, Greeks, Romans, Nabataeans, Byzantines, and, in part, Crusaders before finally coming under the control of the Ottoman Turks. Syria is significant in the history of Christianity; Paul was converted on the road to Damascus and established the first organized Christian Church at Antioch in ancient Syria, from which he left on many of his missionary journeys.
Damascus, settled about 2500 B.C., is one of the oldest continuously inhabited cities in the world. It came under Muslim rule in 636 A.D. Immediately thereafter, the city's power and prestige reached its peak, and it became the capital of the Omayyad Empire, which extended from Spain to India from 661 to 750 A.D., when the Abbasid caliphate was established at Baghdad, Iraq.
Damascus became a provincial capital of the Mameluke Empire around 1260. It was largely destroyed in 1400 by Tamerlane, the Mongol conqueror, who removed many of its craftsmen to Samarkand. Rebuilt, it continued to serve as a capital until 1516. In 1517, it fell under Ottoman rule.
The Ottomans remained for the next 400 years, except for a brief occupation by Ibrahim Pasha of Egypt from 1832 to 1840.
French Occupation In 1920, an independent Arab Kingdom of Syria was established under King Faysal of the Hashemite family, who later became King of Iraq. However, his rule over Syria ended after only a few months, following the clash between his Syrian Arab forces and regular French forces at the battle of Maysalun. French troops occupied Syria later that year after the League of Nations put Syria under French mandate.
With the fall of France in 1940, Syria came under the control of the Vichy Government until the British and Free French occupied the country in July 1941. Continuing pressure from Syrian nationalist groups forced the French to evacuate their troops in April 1946, leaving the country in the hands of a republican government that had been formed during the mandate.
Independence to 1970 Although rapid economic development followed the declaration of independence of April 17, 1946, Syrian politics from independence through the late 1960s was marked by upheaval. A series of military coups, begun in 1949, undermined civilian rule and led to army colonel Adib Shishakli's seizure of power in 1951. After the overthrow of President Shishakli in a 1954 coup, continued political maneuvering supported by competing factions in the military eventually brought Arab nationalist and socialist elements to power.
Syria's political instability during the years after the 1954 coup, the parallelism of Syrian and Egyptian policies, and the appeal of Egyptian President Gamal Abdel Nasser's leadership in the wake of the 1956 Suez crisis created support in Syria for union with Egypt. On February 1, 1958, the two countries merged to create the United Arab Republic, and all Syrian political parties ceased overt activities.
The union was not a success, however. Following a military coup on September 28, 1961, Syria seceded, reestablishing itself as the Syrian Arab Republic. Instability characterized the next 18 months, with various coups culminating on March 8, 1963, in the installation by leftist Syrian Army officers of the National Council of the Revolutionary Command (NCRC), a group of military and civilian officials who assumed control of all executive and legislative authority. The takeover was engineered by members of the Arab Socialist Resurrection Party (Ba'ath Party) which had been active in Syria and other Arab countries since the late 1940s. The new cabinet was dominated by Ba'ath members.
The Ba'ath takeover in Syria followed a Ba'ath coup in Iraq the previous month. The new Syrian Government explored the possibility of federation with Egypt and Ba'ath-controlled Iraq. An agreement was concluded in Cairo on April 17, 1963, for a referendum on unity to be held in September 1963. However, serious disagreements among the parties soon developed, and the tripartite federation failed to materialize. Thereafter, the Ba'ath regimes in Syria and Iraq began to work for bilateral unity. These plans foundered in November 1963, when the Ba'ath regime in Iraq was overthrown.
In May 1964, President Amin Hafiz of the NCRC promulgated a provisional constitution providing for a National Council of the Revolution (NCR), an appointed legislature composed of representatives of mass organizations (labor, peasant, and professional unions), a presidential council (in which executive power was vested), and a cabinet.
On February 23, 1966, a group of army officers carried out a successful, intra-party coup, imprisoned President Hafiz, dissolved the cabinet and the NCR, abrogated the provisional constitution, and designated a regionalist, civilian Ba'ath Government. The coup leaders described it as a "rectification" of Ba'ath Party principles.
The defeat of the Syrians and Egyptians in the June 1967 war with Israel weakened the radical socialist regime established by the 1966 coup. Conflict developed between a moderate military wing and a more extremist civilian wing of the Ba'ath party. The 1970 retreat of Syrian forces sent to aid the PLO during the "Black September" hostilities with Jordan reflected this political disagreement within the ruling Ba'ath leadership. On November 13, 1970, Minister of Defense Hafiz al-Asad effected a bloodless military coup, ousting the civilian party leadership and assuming the role of Prime Minister.
GOVERNMENT
Upon assuming power, Hafiz al-Asad moved quickly to create an organizational infrastructure for his government and to consolidate control. The Provisional Regional Command of Asad's Arab Ba'ath Socialist Party nominated a 173-member legislature, the People's Council, in which the Ba'ath Party took 87 seats. The remaining seats were divided among "popular organizations" and other minor parties. In March 1971, the party held its regional congress and elected a new 21- member Regional Command headed by Asad.
In the same month, a national referendum was held to confirm Asad as President for a seven-year term. In March 1972, to broaden the base of his government, Asad formed the National Progressive Front, a coalition of parties led by the Ba'ath Party, and elections were held to establish local councils in each of Syria's 14 governorates. In March 1973, a new Syrian constitution went into effect followed shortly thereafter by parliamentary elections for the People's Council, the first such elections since 1962.
The Syrian constitution vests the Arab Ba'ath Socialist Party with leadership functions in the state and society and provides broad powers to the President. The president, approved by referendum for a seven- year term, is also secretary general of the Ba'ath Party and leader of the National Progressive Front. The president has the right to appoint ministers, to declare war and states of emergency, to issue laws (which, except in the case of emergency, require ratification by the People's Council), to declare amnesty, to amend the constitution and to appoint civil servants and military personnel.
Along with the National Progressive Front, the president decides issues of war and peace and approves the state's five-year economic plans. The National Progressive Front also acts as a forum in which economic policies are debated and the country's political orientation is determined. However, because of Ba'ath Party dominance, the National Progressive Front has traditionally exercised little independent power.
The Syrian constitution of 1973 requires that the president be Muslim but does not make Islam the state religion. Islamic jurisprudence, however, is required to be the main source of legislation. The judicial system in Syria is an amalgam of Ottoman, French and Islamic laws, with three levels of courts: courts of first instance, courts of appeals and the Constitutional Court, the highest tribunal. In addition, religious courts handle questions of personal and family law.
The Ba'ath Party emphasizes socialism and secular Arabism. Although Ba'ath Party doctrine seeks to build national rather than ethnic identity, ethnic, religious and regional allegiances remain important in Syria.
Members of President Asad's own sect, the Alawis, hold most of the important military and security positions. In recent years there has been a gradual decline in the party's preeminence, often in favor of the leadership of the broader National Progressive Front. The party is also now dominated by the military, which consumes a large share of Syria's economic resources.
Syria is divided administratively into 14 provinces, one of which is Damascus. Each province is headed by a governor, whose appointment is proposed by the minister of the interior, approved by the cabinet and announced by executive decree. The governor is assisted by an elected provincial council.
National Security
President Asad is commander-in-chief of the Syrian armed forces, comprising some 400,000 troops and a substantial number of reservists. Males serve 30 months in the military upon reaching the age of 18. About 30,000 Syrian soldiers are currently deployed in Lebanon.
The break-up of the Soviet Union, long the principal source of training, materiel, and credit for the Syrian forces, has forced Syria to find other military suppliers. Syria has in recent years purchased tanks from Slovakia and Russia, howitzers from Bulgaria, and SCUD missiles from North Korea. Syria received significant financial aid from Gulf Arab states as a result of its participation in Gulf war, with a sizable portion of these funds earmarked for military spending. Besides sustaining its conventional forces, Syria has sought to improve its unconventional weapons capability. While expanding its missile force, Syria continues to develop its chemical weapons capability.
POLITICAL CONDITIONS
Syria is ruled by an authoritarian regime which exhibits the forms of a democratic system but in which President Asad wields almost absolute authority. His government has held power longer than any other since independence. In March 1992, Asad began his fourth seven-year term. His survival is due partly to a strong desire for political stability as well as to his government's success in giving groups such as religious minorities and peasant farmers a stake in society.
The expansion of the government bureaucracy has created a large class which owes its position to Asad, whose strength is due also to the army's continued loyalty and the effectiveness of Syria's large internal security apparatus, both comprised largely of members of Asad's own Alawi sect. The several main branches of the security services operate independently of each other and outside of the legal system. Each continues to be responsible for human rights violations.
Key decisions regarding foreign policy, national security, and the economy are made by President Asad, with counsel from his principal advisors. The parliament, in which the Ba'ath Party is guaranteed a majority, is elected every four years but has no independent authority. It cannot initiate laws; it may only react to initiatives by the executive.
All three branches of government are guided by the views of the Ba'ath party, whose primacy in state institutions is assured by the constitution. The Ba'ath platform is proclaimed succinctly in the party's slogan: "Unity, freedom, and socialism." The party is both socialist--advocating state ownership of the means of industrial production and the redistribution of agricultural land--and revolutionary--dedicated to carrying a socialist revolution to every part of the Arab world. Founded by Michel 'Aflaq, a Syrian Christian, and Salah al-Din Al-Bitar, a Syrian Sunni, the Ba'ath Party embraces secularism and has attracted supporters of all faiths in many Arab countries, especially Iraq, Jordan, and Lebanon. Since August 1990, however, the party has tended to de-emphasize socialism and to stress pan-Arab unity.
Syria has been under a state of emergency since 1963. Syrian Governments have justified martial law by the state of war which continues to exist with Israel and by continuing threats posed by terrorist groups (radicals, Iraqi and Lebanese). The current government has suppressed all challenges to its authority. Commercial and urban elements, whose power and status have been eroded by the Ba'ath Party and its policies, constitute part of the opposition. The most significant opposition, however, has come from fundamentalist Sunni Muslims, who reject the basic values of the secular Ba'ath program and object to rule by the Alawis, whom they consider heretical. From the late 1970s until its suppression in 1982, the arch-conservative Muslim Brotherhood posed an ongoing armed challenge to the regime. In response to an attempted uprising by the brotherhood in February 1982, the government crushed the fundamentalist opposition centered in the city of Hama, leveling parts of the city with artillery fire and causing many thousands of dead and wounded. Since then, public manifestations of anti-regime activity have been very limited.
In August 1994 parliamentary elections, the National Progressive Front won 167 of the 250 seats in the People's Council; most of those 167 seats went to Ba'ath Party members. Independents won the remaining 83 seats.
In December 1991, President Asad won a fourth seven-year term as president in a popular referendum on his candidacy. According to results announced by the Syrian Government, President Asad received a 99% affirmative vote with a reputed 99% of the eligible electorate voting.
ECONOMY
Syria is a middle-income developing country with a diversified economy based on agriculture, industry and an expanding energy sector. During the 1960s, citing its state socialist ideology, the government nationalized most major enterprises and adopted economic policies designed to address regional and class disparities. Despite the positive growth rates of the past few years, this legacy of state intervention and price, trade, and foreign exchange controls still hampers economic growth. Despite a number of significant reforms and ambitious development projects of the early 1990s, Syria's economy still is slowed by large numbers of poorly performing public sector firms, low investment levels, and relatively low industrial and agricultural productivity.
Syria's support for Iran during the Iran-Iraq War isolated it from its Arab neighbors in the 1980s. This isolation, combined with the drop in oil prices, caused a fall in real growth during the 1980s from 10% to an average of 2.5% per year--less than the population growth rate of 3.8%. Living standards for most income groups in Syria declined during the decade. A severe drought in 1989 compounded economic problems, forcing use of scarce foreign exchange reserves to import extraordinary amounts of wheat, flour and other foodstuffs.
Syria's participation in the multinational coalition against Iraq in the 1990-91 Gulf war ended the years of isolation, however, and gave it access to substantial European, Japanese, and Gulf financial resources (estimated at $500 million annually from 1990-92, with another $2 billion promised, but not yet delivered by Gulf states in accordance with the Damascus Declaration of March 1991). In addition, Syria began to look to new markets as economic ties with Moscow and Central Europe began to loosen.
Despite a declining manufacturing sector, by 1992, the effects of foreign aid, the new investment law of 1991, increased petroleum production, and exceptionally good harvests combined to boost GDP growth and enable the government to initiate a number of projects to rehabilitate the country's deteriorating infrastructure and public sector enterprises. Current plans, many of which still lack secured financing, include upgrades of Syria's antiquated phone system and severely underpowered electricity grid, as well as steel mill, cement, and fertilizer plant construction.
Despite the improvements of 1989-92, Syria's economy faces serious challenges. With almost 60% of its population under the age of 20, and a growth rate (3.8%) among the world's highest, higher unemployment rates seem inevitable. Oil production likely will level off over the next decade, and financial aid flows from the Gulf are slowing. Syrian economic reforms thus far have been incremental and gradual, with large- scale privatization not even on the distant horizon.
Commerce has always been important to the Syrian economy, which benefited from the country's location along major east-west trade routes. Syrian cities boast both traditional industries such as weaving and dried-fruit packing and modern heavy industry.
The bulk of Syrian imports have been raw materials essential for industry and agriculture, advanced oil-field equipment, and heavy machinery for the infrastructure construction. Major exports include crude oil, refined products, raw cotton, cotton knits, fruits and vegetables. Aside from commitments of foreign aid, earnings from oil exports are one of the government's most important sources of foreign exchange.
Of Syria's 72,000 square miles, roughly one-third is arable, with 80% of cultivated areas dependent on rainfall for water. Since 1989, the agriculture sector has recovered from years of government inattentiveness and drought. Most farms are privately owned, but marketing and transportation are controlled by the government.
The government has redirected its economic development priorities from industrial expansion into the agricultural sectors in order to achieve food self-sufficiency, enhance export earnings, and stem rural migration. Thanks to sustained capital investment, infrastructure development, subsidies of inputs, and price supports, Syria has gone from a net importer of many agricultural products to an exporter of cotton, fruits, vegetables, and other foodstuffs. One of the prime reasons for this turnaround has been the government's investment in huge irrigation systems in northern and northeastern Syria, part of a plan to increase irrigated farmland by 38% over the next decade.
Recent dam construction in Turkey has reduced the flow of the Euphrates to Syria and Iraq. This has limited Syria's hydroelectric power generating capacity and caused greater domestic dependence on oil, Syria's main foreign exchange earner.
Adequate flow of the Euphrates is crucial to Syrian agriculture and power supply and is expected to be assured in a formal agreement with Turkey. Nonetheless, Syria will need to adopt a more comprehensive conservation program to ensure adequate water supply over the long term.
Syria has produced heavy grade oil from fields located in the northeast since the late 1960s. In the early 1980s, a light-grade low-sulphur oil was discovered near Dayr az Zawr in eastern Syria. This discovery relieved Syria of the need to import light oil to mix with domestic heavy crude in refineries.
Recently, Syrian oil production has been about 580,000 barrels/day, and reserves are estimated at 1.7 billion barrels). Syria exports about 300,000 b/d, which brings in approximately $3 billion annually and makes up 80% of total foreign exchange earnings.
Although its oil reserves are small compared to those of many other Arab states, Syria's petroleum industry in 1989 helped the country achieve its first trade surplus in over a decade, and has accounted for almost three-quarters of the country's export income. Government plans call for major investment to exploit recently discovered natural gas reserves to maximize export revenues by freeing up oil from domestic consumption.
Ad hoc economic liberalization has provided a boost to Syria's small but dynamic private sector. In 1990, the government established an official parallel exchange rate, (neighboring country rate, or NCR) to provide incentives for remittances and exports through official channels. This action improved the supply of basic commodities and contained inflation by removing risk premiums on smuggled commodities.
Over time, the government has increased the number of transactions to which the more favorable neighboring country rate applies. Nonetheless, government and certain public sector transactions are still conducted at the official rate of 11.2 Syrian pounds to the U.S. dollar, and exchange-rate unification remains an elusive goal.
Although private sector firms have not had access to official foreign exchange since 1984, the government's Investment Law #10 of 1991 permits retention of foreign exchange earned from exports in order to finance certain imports of raw materials. The government retains a monopoly on "strategic" imports, such as wheat and flour, but it has expanded the list of unrestricted imports. This law also grants qualifying investors tax holidays and duty-free privileges for the import of capital goods and inputs, permits some foreign exchange transactions at the favorable neighboring country exchange rate, and encourages joint public/private sector ventures in which the government holds a passive 25% interest. Since passage of this law, over 400 new companies have been formed, with approximately $1.8 billion in new investments. While these reforms have attracted offshore savings from Syrian expatriates, Western and Arab investors are waiting for additional economic liberalization, including private banking facilities, a unified exchange rate, and development of a stock market.
Given the poor development of its own capital markets and Syria's lack of access to international money and capital markets, monetary policy remains captive to the need to cover the fiscal deficit. Interest rates are fixed by law, and most rates have not changed in the last 20 years. Basic foodstuffs continue to be heavily subsidized, and social services are provided for nominal charges.
Through two decades of heavy military spending and expansion of the public sector, Syria accumulated an external debt (to the former Soviet Union, Iran, and the World Bank among others) conservatively estimated at $16 billion. Syria manages its debt by indefinite deferment--it is badly in arrears on payments to the World Bank and has suspended clearinghouse arrangements to draw down debt with its largest creditor, Russia. Any programmed multilateral debt rescheduling, which usually depends on a structural adjustment program with the IMF, seems unlikely in the near future.
FOREIGN RELATIONS
Ensuring national security, increasing influence among its Arab neighbors, and achieving a comprehensive Arab-Israeli peace settlement which includes the return of the Golan Heights are the primary goals of President Asad's foreign policy. Syria's participation in the U.S.-led multinational coalition aligned against Saddam Hussein marked a dramatic watershed in Syria's relations both with other Arab states and with the West. Syria participated in the multilateral Middle East Peace Conference in Madrid in October 1991.
While Syria's involvement with the multinational coalition during the Gulf war and participation in the peace process have helped to improve Syria's relations with the West, concern remains over the continuing presence of terrorist groups in Syria and Syrian-controlled areas of Lebanon, Syria's human rights record, and Syrian involvement in narcotics activity in Lebanon. Syria's relations with Western nations were particularly strained in the past decade because of Syrian support for groups involved in international terrorism, including the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), the Palestine Islamic Jihad (PIJ), the Abu Nidal Organization (ANO), Hizballah, the Turkish Revolutionary Left (Dev Sol), the Kurdish Workers Party (PKK), and the Japanese Red Army (JRA).
Relations with Other Arab Countries
Syria's relations with the Arab world were strained by its support for Iran during the Iran-Iraq War, which began in 1980. With the end of the war in August 1988, Syria began a slow process of reintegration with the other Arab states. In 1989, it joined with the rest of the Arab world in readmitting Egypt to the 19th Arab League Summit at Casablanca.
This decision, prompted in part by Syria's need for Arab League support of its own position in Lebanon, marked the end of the Syrian-led opposition to Egypt and the 1977-79 Sadat initiative toward Israel, as well as the Camp David accords. It coincided with the end of the 10- year Arab subsidy to Syria and other front-line Arab countries pledged at Baghdad in 1978. Syria reestablished full diplomatic relations with Egypt in 1989. In the 1990-91 Gulf war, Syria joined other Arab states in the U.S.-led multinational coalition against Iraq.
Involvement in Lebanon Syria plays an important role in Lebanon by virtue of its history, size, power, and economy. Lebanon was part of post-Ottoman Syria until 1926, when the French established Lebanon as a separate nation. The presence of Syrian troops in Lebanon dates to 1976, when President Asad intervened in the Lebanese civil war on behalf of Maronite Christians.
Following the 1982 Israeli invasion of Lebanon, Syrian and Israeli forces clashed in eastern Lebanon. The late U.S. Ambassador Philip Habib negotiated a cease-fire in Lebanon and the subsequent evacuation of PLO fighters from West Beirut.
However, Syrian opposition blocked implementation of the May 17, 1983, Lebanese-Israeli accord on the withdrawal of Israeli forces from Lebanon. Following the February 1984 withdrawal of the UN Multinational Force from Beirut and the departure of most of Israel's forces from southern Lebanon a year later, Syria launched an unsuccessful initiative to reconcile warring Lebanese factions and establish a permanent cease- fire.
Syria actively participated in the March-September 1989 fighting between the Christian Lebanese Forces and Muslim forces allied with Syria. In 1989, Syria endorsed the Charter of National Reconciliation, or "Taif Accord," a comprehensive plan for ending the Lebanese conflict negotiated under the auspices of Saudi Arabia, Algeria, and Morocco.
At the request of Lebanese President Hrawi, the Syrian military took joint action with the Lebanese Armed Forces on October 13, 1990, to oust rebel General Michel Aoun who had defied efforts at reconciliation with the legitimate Government of Lebanon. The process of disarming and disbanding the many Lebanese militias began in earnest in early 1991. In May 1991, Lebanon and Syria signed the treaty of brotherhood, cooperation, and coordination called for in the Taif Accord which is intended to provide the basis for many aspects of Syrian-Lebanese relations. The treaty provides the most explicit recognition to date by the Syrian Government of Lebanon's independence and sovereignty. According to the U.S. interpretation of the Taif Accord, Syria and Lebanon were to have decided on the redeployment of Syrian forces from Beirut and other coastal areas of Lebanon by September 1992.
Arab-Israeli Relations
Syria was an active belligerent in the 1967 Arab-Israeli war, which resulted in Israel's occupation of the Golan Heights and the city of Quneitra. Following the October 1973 Arab-Israeli war, which left Israel in occupation of additional Syrian territory, Syria accepted UN Security Council Resolution 338, which signaled an implicit acceptance of Resolution 242. Resolution 242, which became the basis for the peace process negotiations begun in Madrid, calls for a just and lasting Middle East peace to include withdrawal of Israeli armed forces from territories occupied in 1967, termination of the state of belligerency and acknowledgment of the sovereignty, territorial integrity, and political independence of all regional states and of their right to live in peace within secure and recognized boundaries.
As a result of the mediation efforts of then U.S. Secretary of State Henry Kissinger, Syria and Israel achieved a disengagement agreement in May 1974, enabling Syria to recover territory lost in the October war and part of the Golan Heights occupied by Israel since 1967, including Quneitra. The two sides have effectively implemented the agreement.
In December 1981, the Israeli Knesset voted to extend Israeli law to the part of the Golan Heights over which Israel retained control. The United Nations Security Council subsequently passed a resolution calling on Israel to rescind this measure.
Syria participated in the Middle East Peace Conference in Madrid in October 1991. Although serious gaps remain between Syria and Israel, through the mediation of the U.S., real negotiations are underway which have become detailed and substantive. Concrete ideas have been conveyed on key issues such as withdrawal, security arrangements, normalization of relations, timing, phasing.
Syria is a member of: the Arab Bank for Economic Development in Africa, Arab Fund for Economic and Social Development, Arab League, Arab Monetary Fund, Council of Arab Economic Unity, Customs Cooperation Council, Economic and Social Commission for Western Asia, Food and Agricultural Organization, Group of 24, Group of 77, International Atomic Energy Agency, International Bank for Reconstruction and Development, International Civil Aviation Organization, International Chamber of Commerce, International Development Association, Islamic Development Bank, International Fund for Agricultural Development, International Finance Corporation, International Labor Organization, International Monetary Fund, International Maritime Organization, INTELSAT, INTERPOL, International Olympic Committee, International Organization for Standardization, International Telecommunication Union, League of Red Cross and Red Crescent Societies, Non-Aligned Movement, Organization of Arab Petroleum Exporting Countries, Organization of the Islamic Conference, United Nations, UN Conference on Trade and Development, UN Educational, Scientific and Cultural Organization, UN Industrial Development Organization, UN Relief and Works Agency for Palestine Refugees in the Near East, Universal Postal Union, World Federation of Trade Unions, World Health Organization, World Meteorological Organization, and World Tourism Organization.
PEOPLE
Unlike other people of the Arabian peninsula who have historically been nomads or semi-nomads, Yemenis are almost entirely sedentary and live in small villages and towns scattered throughout the highlands and coastal regions.
Yemenis are divided into two principal Islamic religious groups: the Zaidi sect of the Shi'a, found in the north and northwest, and the Shafa'i school of Sunni Muslims, found in the south and southeast. Yemenis are mainly of Semitic origin, although African strains are present among inhabitants of the coastal region. Arabic is the official language, although English is increasingly understood in major cities. In the Mahra area (the extreme east), several non-Arabic languages are spoken. When the former states of north and south Yemen were established, most resident minority groups departed.
HISTORY
Yemen was one of the oldest centers of civilization in the Near East. Between the 12th century BC and the 6th century AD, it was part of the Minaean, Sabaean, and Himyarite kingdoms, which controlled the lucrative spice trade, and later came under Ethiopian and Persian rule. In the 7th century, Islamic caliphs began to exert control over the area. After this caliphate broke up, the former north Yemen came under control of Imams of various dynasties usually of the Zaidi sect, who established a theocratic political structure that survived until modern times. (Imam is a religious term. The Shiites apply it to the prophet Muhammad's son-in-law Ali, his sons Hasan and Hussein, and subsequent lineal descendants, whom they consider to have been divinely ordained unclassified successors of the prophet.)
Egyptian Sunni caliphs occupied much of north Yemen throughout the 11th century. By the 16th century and again in the 19th century, north Yemen was part of the Ottoman empire and in some periods its Imams exerted suzerainty over south Yemen.
Former North Yemen
Ottoman government control was largely confined to cities with the Imam's suzerainty over tribal areas formally recognized. Turkish forces withdrew in 1918, and Imam Yahya strengthened his control over north Yemen. Yemen became a member of the Arab league in 1945 and the United Nations in 1947.
Imam Yahya died during an unsuccessful coup attempt in 1948 and was succeeded by his son Ahmad, who ruled until his death in September 1962. Imam Ahmad's reign was marked by growing repression, renewed friction with the United Kingdom over the British presence in the south, and growing pressures to support the Arab nationalist objectives of Egyptian President Qamal Abdul Nasser.
Shortly after assuming power in 1962, Ahmad's son, Badr, was deposed by revolutionary forces which took control of Sanaa and created the Yemen Arab Republic (YAR). Egypt assisted the YAR with troops and supplies to combat forces loyal to the Imamate. Saudi Arabia and Jordan supported Badr's royalist forces to oppose the newly formed republic. Conflict continued periodically until 1967 when Egyptian troops were withdrawn. By 1968, following a final royalist siege of Sanaa, most of the opposing leaders reached a reconciliation; Saudi Arabia recognized the Republic in 1970.
Former South Yemen
British influence increased in the south and eastern portion of Yemen after the British captured the port of Aden in 1839. It was ruled as part of British India until 1937, when Aden was made a crown colony with the remaining land designated as east Aden and west Aden protectorates. By 1965, most of the tribal states within the protectorates and the Aden colony proper had joined to form the British-sponsored federation of south Arabia.
In 1965, two rival nationalist groups--the Front for the Liberation of Occupied South Yemen (FLOSY) and the National Liberation Front (NLF)--turned to terrorism in their struggle to control the country. In 1967, in the face of uncontrollable violence, British troops began withdrawing, federation rule collapsed, and NLF elements took control after eliminating their FLOSY rivals. South Arabia, including Aden, was declared independent on November 30, 1967, and was renamed the People's Republic of South Yemen. In June 1969, a radical wing of the Marxist NLF gained power and changed the country's name on December 1, 1970, to the People's Democratic Republic of Yemen (PDRY). In the PDRY, all political parties were amalgamated into the Yemeni Socialist Party (YSP), which became the only legal party. The PDRY established close ties with the Soviet Union, China, Cuba, and radical Palestinians.
Republic of Yemen
In 1972, the governments of the PDRY and the YAR declared that they approved a future union. However, little progress was made toward unification and relations were often strained. In 1979, simmering tensions led to fighting, which was only resolved after Arab League mediation. The goal of unity was reaffirmed by the northern and southern heads of state during a summit meeting in Kuwait in March 1979. However, that same year the PDRY began sponsoring an insurgency against the YAR. In April 1980, PDRY President Abdul Fattah Ismail resigned and went into exile. His successor, Ali Nasir Muhammad, took a less interventionist stance toward both the YAR and neighboring Oman. On January 13, 1986, a violent struggle began in Aden between Ali Nasir Muhammad and the returned Abdul Fattah Ismail and their supporters. Fighting lasted for more than a month and resulted in thousands of casualties, Ali Nasir's ouster, and Ismail's death. Some 60,000 persons, including Ali Nasir and his supporters, fled to the YAR.
In May 1988, the YAR and PDRY governments came to an understanding that considerably reduced tensions including agreement to renew discussions concerning unification, to establish a joint oil exploration area along their undefined border, to demilitarize the border, and to allow Yemenis unrestricted border passage on the basis of only a national identification card.
In November 1989, the leaders of the YAR (Ali Abdallah Salih) and the PDRY (Ali Salim Al-Bidh) agreed on a draft unity constitution originally drawn up in 1981. The Republic of Yemen (ROY) was declared on May 22, 1990. Ali Abdallah Salih became President and Ali Salim Al-Bidh became Vice President.
A 30-month transitional period for completing the unification of the two political and economic systems was set. A presidential council was jointly elected by the 26-member YAR advisory council and the 17-member PDRY presidium. The presidential council appointed a Prime Minister, who formed a Cabinet. There was also a 301-seat provisional unified Parliament, consisting of 159 members from the north, 111 members from the south, and 31 independent "at-large" members appointed by the chairman of the council.
A unity constitution was agreed upon in May 1990 and ratified by the populace in May 1991. It affirmed Yemen's commitment to free elections, a multi-party political system, the right to own private property, equality under the law, and respect of basic human rights. Parliamentary elections were held on April 27, 1993. International groups assisted in the organization of the elections and observed actual balloting. The resulting Parliament included 143 GPC, 69 YSP, 63 Islaah (Yemeni grouping for reform, a party composed of various tribal and religious groups), 6 Baathis, 3 Nasserists, 2 Al Haq, and 15 independents. The head of Islaah, Paramount Hashid Sheik Abdallah Bin Husayn Al-Ahmar, is the speaker of Parliament.
Islaah was invited into the ruling coalition, and the presidential council was altered to include one Islaah member. Conflicts within the coalition resulted in the self-imposed exile of Vice President Ali Salim Al-Bidh to Aden beginning in August 1993 and a deterioration in the general security situation as political rivals settled scores and tribal elements took advantage of the unsettled situation. Haydar Abu Bakr Al-Attas (former southern Prime Minister) continued to serve as the ROY Prime Minister, but his government was ineffective due to political infighting. Continuous negotiations between northern and southern leaders resulted in the signing of the document of pledge and accord in Amman, Jordan on February 20, 1994. Despite this, clashes intensified until civil war broke out in early May 1994.
Almost all of the actual fighting in the 1994 civil war occurred in the southern part of the country despite air and missile attacks against cities and major installations in the north. Southerners sought support from neighboring states and received billions of dollars of equipment and financial assistance. The United States strongly supported Yemeni unity, but repeatedly called for a cease-fire and a return to the negotiating table. Various attempts, including by a UN special envoy, were unsuccessful to effect a cease-fire. Southern leaders declared secession and the establishment of the Democratic Republic of Yemen (DRY) on May 21, 1994, but the DRY was not recognized by the international community. Ali Nasir Muhammad supporters greatly assisted military operations against the secessionists and Aden was captured on July 7, 1994. Other resistance quickly collapsed and thousands of southern leaders and military went into exile.
Early during the fighting, President Ali Abdallah Salih announced a general amnesty which applied to everyone except a list of 16 persons. Most southerners returned to Yemen after a short exile.
An armed opposition was announced from Saudi Arabia, but no significant incidents within Yemen materialized. The government prepared legal cases against four southern leaders (Ali Salim Al- Bidh, Haydar Abu Bakr Al-Attas, Abd Al-Rahman Ali Al-Jifri, and Salih Munassar Al-Siyali) for misappropriation of official funds. Others on the list of 16 were told informally they could return to take advantage of the amnesty, but most remained outside Yemen. Although many of Ali Nasir Muhammad's followers were appointed to senior governmental positions (including Vice President, Chief of Staff, and Governor of Aden), Ali Nasir Muhammad himself remained abroad in Syria. In the aftermath of the civil war, YSP leaders within Yemen reorganized the party and elected a new politburo in July 1994. However, the party remained disheartened and without its former influence. Islaah held a party convention in September 1994. The GPC did the same in June 1995.
In 1994, amendments to the unity constitution eliminated the presidential council. President Ali Abdallah Salih was elected by Parliament on October 1, 1994 to a five-year term. The constitution provides that henceforth the President will be elected by popular vote from at least two candidates selected by the legislature. The next Parliamentary elections are scheduled for April 1997.
Principal Government Officials
President--Ali Abdallah Salih
Vice President--Abd Al-Rab Mansur Hadi
Prime Minister--Abd Al-Aziz Abd Al-Ghani
Deputy Prime Minister--Abd Al-Wahhab Al-Anisi
Deputy Prime Minister, Minister of Foreign Affairs--Abd Al-Karim Al-Iryani
Deputy Prime Minister, Minister of Planning and Development--Abd Al-Qadir
Bajamal
Deputy Prime Minister, Minister of Industry, Minister of Oil and Mineral
Resources--Muhammad Said Al-Attar
Ambassador to the United States--Moshin Al-Alaini
Ambassador to the United Nations--Abdallah Al-Ashtal
The Republic of Yemen maintains an embassy in the United States at 2600 Virginia Avenue NW, Suite 705, Washington, DC 20037 (tel: 202-965-4760).
ECONOMY
At unification, both the YAR and the PDRY were struggling underdeveloped economies. In the north, disruptions of civil war (1962-70) and frequent periods of drought had dealt severe blows to a previously prosperous agricultural sector. Coffee production, formerly the north's main export and principal form of foreign exchange, declined as the cultivation of qat increased. Low domestic industrial output and a lack of raw materials made the YAR dependent on a wide variety of imports.
Remittances from Yemenis working abroad and foreign aid paid for perennial trade deficits. Substantial Yemeni communities exist in many countries of the world, including Yemen's immediate neighbors on the Arabian peninsula, Indonesia, India, East Africa, the United Kingdom, and the United States. Beginning in the mid-1950s, the Soviet Union and China provided large-scale assistance to the YAR. This aid included funding of substantial construction projects, scholarships, and considerable military assistance.
In the south, pre-independence economic activity was overwhelmingly concentrated in the port city of Aden. The seaborne transit trade which the port relied upon collapsed with the closure of the Suez canal and Britain's withdrawal from Aden in 1967. Only extensive Soviet aid, remittances from south Yemenis working abroad, and revenues from the Aden refinery (built in the 1950's) kept the PDRY's centrally planned Marxist economy afloat. With the dissolution of the Soviet Union and a cessation of Soviet aid, the south's economy basically collapsed.
Since unification, the government has worked to integrate two relatively disparate economic systems. However, severe shocks including the return in 1990 of approximately 850,000 Yemenis from the Gulf states, a subsequent major reduction of aid flows, and internal political disputes culminating in the 1994 civil war hampered economic growth.
Since the conclusion of the war, the government entered into agreement with the International Monetary Fund (IMF) to institute an extremely successful structural adjustment program. Phase one of the IMF program includes major financial and monetary reforms, including floating the currency, reducing the budget deficit, and cutting subsidies. Phase two will address structural issues such as civil service reform. IMF credits over the next three years may total as much as $600 million. The World Bank is also active in Yemen, providing an $80 million loan in 1996. Yemen has received debt relief from the Paris Club and is in negotiation with Russia regarding its estimated $6.5 billion Soviet debt. Some military equipment is still purchased from former East Bloc states and China, but now on a cash basis.
Following a minor discovery in 1982 in the south, an American company found an oil basin near Marib in 1984. 170,000 barrels per day were produced there in 1995. A small oil refinery began operations near Marib in 1986. A Soviet discovery in the southern governorate of Shabwa has proven only marginally successful even when taken over by a different group. A western consortium began exporting oil from Masila in the Hadramaut in 1993 and production there reached 180,000 barrels per day in 1995. More than a dozen other companies have been unsuccessful in finding commercial quantities of oil. There are new finds in the Jannah (formerly known as the Joint Oil Exploration Area) and east Shabwah blocks. Yemen's oil exports in 1995 earned approximately $1 billion.
Marib oil contains associated natural gas. Proven reserves of 10-13 trillion cubic feet could sustain a liquid natural gas (LNG) export project. Medium-term economic prospects for the country depend upon the outcome of the gas export project and plans to upgrade port facilities at Aden. In September 1995 the Yemeni Government signed an agreement that designated Total of France to be the lead company for an LNG project. American companies are engaged in ongoing discussions with the Government of Yemen regarding their participation in LNG projects. Progress continues in making Aden a free zone and finalizing plans to construct a modern container port and other facilities in Aden.
FOREIGN RELATIONS
The geography and ruling Imams of north Yemen kept the country isolated from foreign influence before 1962. The country's relations with Saudi Arabia were defined by the Taif Agreement of 1934 which delineated the northernmost part of the border between the two kingdoms and set the framework for commercial and other intercourse. The Taif Agreement has been renewed periodically in 20-year increments, and its validity was reaffirmed in 1995. Relations with the British colonial authorities in Aden and the south were usually tense.
The Soviet and Chinese Aid Missions established in 1958 and 1959 were the first important non-Muslim presence in north Yemen. Following the September 1962 revolution, the Yemen Arab Republic became closely allied with and heavily dependent upon Egypt. Saudi Arabia aided the royalists in their attempt to defeat the Republicans and did not recognize the Yemen Arab Republic until 1970. Subsequently, Saudi Arabia provided Yemen substantial budgetary and project support. At the same time, Saudi Arabia maintained direct contact with Yemeni tribes, which sometimes strained its official relations with the Yemeni Government. Hundreds of thousands of Yemenis found employment in Saudi Arabia during the late 1970's and 1980's.
In February 1989, north Yemen joined Iraq, Jordan, and Egypt in forming the Arab Cooperation Council (ACC), an organization created partly in response to the founding of the Gulf Cooperation Council, and intended to foster closer economic cooperation and integration among its members. After unification, the Republic of Yemen was accepted as a member of the ACC in place of its YAR predecessor. In the wake of the Gulf crisis, the ACC has remained inactive.
British authorities left southern Yemen in November 1967 in the wake of an intense terrorist campaign. The people's democratic Republic of Yemen, the successor to British colonial rule, had diplomatic relations with many nations, but its major links were with the Soviet Union and other Marxist countries. Relations between it and the conservative Arab states of the Arabian peninsula were strained. There were military clashes with Saudi Arabia in 1969 and 1973, and the PDRY provided active support for the DHOFAR rebellion against the Sultanate of Oman. The PDRY was the only Arab state to vote against admitting new Arab states from the Gulf area to the United Nations and the Arab League. The PDRY provided sanctuary and material support to various international terrorist groups.
Yemen is a member of the United Nations, the Arab League, and the organization of the Islamic conference. Yemen participates in the nonaligned movement. The Republic of Yemen accepted responsibility for all treaties and debts of its predecessors, the YAR and the PDRY. Yemen has acceded to the nuclear nonproliferation treaty. The Gulf crisis dramatically affected Yemen's foreign relations. As a member of the UN Security Council (UNSC) for 1990 and 1991, Yemen abstained on a number of UNSC resolutions concerning Iraq and Kuwait and voted against the "use of force resolution." Western and Gulf Arab states reacted by curtailing or canceling aid programs and diplomatic contacts. At least 850,000 Yemenis returned from Saudi Arabia and the Gulf.
Subsequent to the liberation of Kuwait, Yemen continued to maintain high-level contacts with Iraq. This hampered its efforts to rejoin the Arab mainstream and to mend fences with its immediate neighbors. In 1993, Yemen launched an unsuccessful diplomatic offensive to restore relations with its Gulf neighbors. Some of its aggrieved neighbors actively aided the south during the 1994 civil war. Since the end of that conflict, tangible progress has been made on the diplomatic front in restoring normal relations with Yemen's neighbors. The Omani- Yemeni border has been officially demarcated. Following a period of tension over the Saudi-Yemeni border in early 1995, negotiators met to discuss outstanding issues, President Salih visited Saudi Arabia, and Saudi-Yemeni negotiations on the border and other matters have continued. Yemen is also committed to international arbitration in the resolution of the Hanish islands dispute with Eritrea.