SECRET UK EYES A
arrangements. Despite the fact that Egypt is likely
likely to be offended by the cooling of GCC relations with her and increased contact with Iran, discussions with Iran on Gulf security have begun. These are likely to be dependent to some extent on the continued (although slow) improvement in Iran's relationship with the West, which has been illustrated by the release of hostages during the latter half of 1991.
5.
North and South Yemen unified on 22 May 1990 to form the Republic of Yemen. Plans provide for full democratic elections two and a half years from unification, and if these are realised, Yemen will be one of the most democratic and powerful countries in the region. The new Yemen has strained its relations with its neighbours over its support for Iraq during the war.
MILITARY ASSISTANCE
6.
Most of the Gulf states are now engaged in reviewing the role, structure, equipment and training of their military forces. The UK has not received any major equipment contracts to date, but there has been considerable interest in UK help with restructuring and training, notably from Abu Dhabi, Bahrain and Kuwait. In addition, we are preparing to conduct small scale exercises in the Gulf with land and air forces, and bilateral naval exercises with ARMILLA ships. These may develop into joint exercises with host states, and will assist them in developing their capabilities. The importance of the widely based allied response has reinforced the value of bilateral defence agreements, and states are keen to negotiate new agreements or to strengthen established ones. Kuwait and the US have signed an agreement allowing the US to stockpile munitions, conduct training exercises and have access to Kuwait's ports and airfields.
are negotiating with Kuwait over a defence cooperation agreement, and with Bahrain about establishing a Defence Cooperation Office there.
These understandings in general provide for discussions in time of need, and do not give assurances of military support. This policy is likely to be maintained in future negotiations.
7.
A major theme in reports from posts is our lack of financial flexibility which makes us appear both mercenary and disinterested in increasing our influence. Although we have used DPF to reduce costs in some cases, we should have the ability to provide study teams free of charge where we see the potential for future LSP or defence sales. Casting our bread on the waters in this way increases our goodwill; it is the equivalent of a free survey, and not providing this facility is costing us opportunities and goodwill.
THE MEDITERRANEAN NORTH AFRICA AND THE NEAR EAST
REGIONAL DEVELOPMENTS
The Gulf war also had considerable impact on the states of this region with respect to their defence relations with the
8.
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SECRET UK EYES A