TNAG-2611-FCO40-3802-International-support-from-the-USA-regarding-the-future-of-H-1992 — Page 8

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

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moved into the heart of the starvation zone.

One key Location

· Baidoa has been secured, but worries are now mounting about the threat to aid workers in Bardera and Kismayo, where many Somali gunmen have gone, to avoid the US advance.

Although public statements have played it down, the US and UN appear to be divided over policy on disarmament and the treatment of northern Somalia. The UN (and the French, deployed with the US) have publicly favoured disarmament of the Somali factions. The US have been more cautious, stressing their relief escort duties. The north is more stable does not have a starvation problem and deployment of coalition forces Less of a necessity than the south. The factions there (both north-east and north-west, the former British Protectorate) agreed to UN troop deployments before SCR 794 was contemplated.

The Prime Minister might say:

Know that you understand we were unable to contribute troops to Operation Restore Hope. Have provided 2 RAF transport aircraft and accompanying personnel.

- UK troops will not be on offer for UN operations to follow on from coalition forces. But we are prepared to consider civilian assistance. UN must soon decide how to tackle post-military phase.

Have seen reports of differences between US and UN over questions of disarmament and of deployment in northern Somalia.

Seems to us that some degree of disarmament is inevitable if coalition forces are to meet SCR 794 objective of a secure environment.

- Hope coalition forces will continue to take account of

threat to aid workers as Somali gunmen move into rural areas in flight from coalition forces.

Hong Kong/China

There are no particular points to make to President Bush all

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the action on MFN treatment for China and the proposed visit next year by the Governor, will take place after

President-elect Clinton's inauguration. The policies of the Bush administration have been favorable to our interests in Hong Kong. In any discussion of the subject with President Bush, the Prime Minister might like to say:

-

Thank you for all your actions over the years in ways helpful to our policy towards Hong Kong. Grateful for your help blocking Congress attempts to remove MFN status for China.

I told

Obviously hope that MFN status will be granted and are working towards that with the new administration. Clinton of our interest in this on Friday

-

Russia

There are no important differences among the Twelve over analysis of developments in Russia and the rest of the CIS and the Western response to them. The Prime Minister may therefore draw on the following briefing both in his Presidency capacity and in a separate bilateral with President Bush.

The VII Congress was severe set-back for Yeltsin, who lost both Gaidar and his own additional powers which expired on 1 December. His prestige and authority are diminished how far is not clear. The period up to the referendum in April will be one of uncomfortable cohabitation, with Yeltsin's freedom of manoeuvre circumscribed. But Yeltsin has retained leverage over the wording of the referendum. If it takes place it will allow the Russian people to express their view on different policy options this should clarify the political alternatives and help consolidate democratic

institution-building.

any.

Prime Minister Chernomyrdin has said that there will be personnel changes in his government, but has not announced

He has Some members of Gaidar's team may stay on. pledged in general terms to carry on the reform process: privatisation will continue and the 1993 budget will not be altered. But his record is conservative. He has backed a

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In

continued state energy monopoly and fuel price regulation. his first press conference he said that his government's main task would be to halt the contraction in output he would aim to prevent further falls in living standards, and 'improve' pricing policy in the energy sector. His scorn for the 'bazaar economy' heralds a less enlightened view on the informal sector and small-scale enterprise. Most worryingly, Chernomyrdin has neglected counter-inflation measures in his public statements. There is a real danger that Lax or complacent policies could lead to hyper-inflation, unprecedented in a country of Russia's size. The consequences would be far-reaching and dangerous.

G7 Deputies met Aven (still Russian Minister for Foreign Economic Relations) in Paris on 16 December, prior to a Paris Club meeting on 17 December where discussions are continuing. (We will ensure that you are sent telegrams reporting the results of the meeting.) They offered a reduction in the debt repayment due for 1993 from over 4 billion to 2.75 billion. This falls within the range that the Russians had previously indicated they could repay. Discussions continue.

Meanwhile elsewhere in the FSU Ukraine at last seems to be embarking on a radical reform programme under the new Prime Minister, Kuchma the Ukrainians are voicing growing concern about a possible energy crisis this winter. The decision of the Russian Congress to query the status of the Black Sea port, Sevastopol (allegedly not included when Crimea was transferred to Ukraine in 1954) could exacerbate the difficult Russia/Ukraine relationship. UN and CSCE efforts to resolve the conflicts in Nagorno-Karabakh, Georgia and Tajikistan continue, but without major break-throughs as winter sets in serious humanitarian problems are developing in each case. The Prime Minister might say:

- Yeltsin's self-confidence as demonstrated in London in

November not borne out. Indications that immediately before Congress opened Yeltsin reneged on various deals with opposition,

and decided to take more pro-reform stance. This clearly backfired. Subsequent weaving and ducking by Yeltsin unconvincing: Congress opposition pressed home its advantage.

Fall of Gaidar not unexpected, but still a serious set back.

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