RESTRICTED FROM ROME
037761
MDHIAN 7927
EASTERN EUROPE. BUT IF THE MEETING COULD CONFIRM MASSIVE ECONOMIC SUPPORT FOR COUNTRIES LIKE JORDAN, TURKEY AND EGYPT THIS WOULD SEND A STRONG SIGNAL TO SADDAM.
6.
BOORMAN (IMF) THEN SKETCHED OUT THE IMF'S ASSESSMENT OF THE ECONOMIC SITUATION IN JORDAN AND EGYPT, BASED ON IMF
WEEKS. MISSIONS TO BOTH COUNTRIES WITHIN THE LAST FEW
ON EGYPT, HE REFERRED TO THE DISCUSSIONS ALREADY UNDER WAY BEFORE THE GULF CRISIS. THE EGYPTIAN GOVERNMENT HAD ACCEPTED MANY IMF RECOMMENDATIONS BUT SOME DIFFICULT THAT DECISIONS REMAINED TO BE TAKEN IN KEY POLICY AREAS. SAID, EGYPT WAS NOW SUFFERING SUBSTANTIALLY FROM THE GULF CRISIS. NEW ESTIMATES OF ITS EFFECT UPON TRADE, REMITTANCES AND TOURISM HAD CAUSED THEM TO REVISE UPWARDS
GULF CRISIS. THEIR ESTIMATES FOR OVERALL IMPACT OF THE THEIR TOTAL NOW FOR FINANCIAL YEARS 1990-91 WAS 400-500 MILLION DOLLARS MORE THAN THE 3.5 BILLION ORIGINALLY ESTIMATED.
7.
ON JORDAN, BOORMAN SAID THAT THE IMF CONSULTATIONS WERE STILL UNDER WAY SO ALL ESTIMATES WERE PRELIMINARY. BUT THE EFFECT OF THE GULF CRISIS ON THE JORDAN ECONOMY HAD CLEARLY BEEN ENORMOUS. TO QUOTE SOME EXAMPLES, MANUFACTURING OUTPUT WAS NOW DOWN BY 9 PERCENT. THE TRANSPORT INDUSTRY WAS DEVASTATED WITH UP TO 12,000 TRUCKS IDLE. UNEMPLOYMENT, AT 15 PER CENT BEFORE THE CRISIS, WOULD NOW BE SWELLED BY 15,000 UNEMPLOYED TRUCK DRIVERS AND 200,000 MIGRANT WORKERS RETURNING WITH THEIR FAMILIES TO JORDAN. BOTH THE LOSS OF REMITTANCES AND THE DROP IN TOURISM WOULD HAVE SERIOUS CONSEQUENCES, AS WOULD THE INCREASED COST OF OIL. ALL TOLD THEY CONTINUED TO ESTIMATE THE COST OF THE GULF CRISIS TO JORDAN AS 1.4 BILLION AN DOLLARS IN 1990 AND 3 BILLION DOLLARS IN 1991 THIS IN ECONOMY WHOSE TOTAL SIZE WAS ONLY AROUND 4 BILLION. JORDAN
ALL DESPERATELY NEEDED HELP QUICKLY.
HELP SHOULD BE IN
GRANTS FORM.
8.
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BOCK (WORLD BANK) THEN SPOKE ABOUT TURKEY, THE TURKS WHICH HAD BEEN HARD-HIT BY THE CLOSURE OF THE OIL PIPELINE WAS LOSING THEM REVENUE OF A MILLION DOLLARS A DAY. MOREOVER, THERE WAS INCREASED
THE EXPENDITURE. OVERALL EFFECT HAD BEEN TO SLOW GROWTH, ΤΟ INCREASE INFLATION AND TO WORSEN THEIR BALANCE OF PAYMENTS DEFICIT.
MILITARY
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