CONFIDENTIAL

14. Saudi Arabia: Political and/or solvency crisis. Either could provoke the other.

15. Nigeria: Military fail to resolve political crisis; civil unrest; ethnic divisions spread in army; descent towards civil war.

Major: jobs, especially aerospace dependence on Al Yamamah. Destabilisation of Gulf states.

Major: £600m exports; £1.3 billion investment; key Nigerian role in stabilising Liberia/Sierra Leone.

Hope it does not happen until Al Yamamah paid for. Watch for warning signs (assassination of King Fahd; market unease at Saudi borrowing; religious fundamentalism turning to political radicalism).

Measures aimed at Nigerian

military; close co-ordination with US and EC.

CONFIDENTIAL

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