Ju ly 1989 Number 177

CONTENTS

_____________ •COVER STORY*_____________ 6 It is a year since Iran accepted a ceasefire in the Gulf. Now that the dust o f war has settled, The Middle East looks at the effects of the prolonged conflict on Iran and Iraq

POLITICS

11 Egypt has returned to the fold and has even struck up some cordiality with Libya. The predominant factor is rivalry between Iraq and Syria 13 Sheikh Mohammed Fadlallah,

one o f Lebanon’s most prominent Shia leaders, gives his analysis of the country’s crisis 14 Speaking to The Middle East:

Richard Armitage, the outgoing US secretary of war 15 Saddam Hussein unleashes the final assault on Iraq’s Kurds 17 Iran is buying fighter planes made by Romania and

Yugoslavia with British engines 18 After Khomeini’s death,

Iran’s leaders strive to present a united front 19 Arab volunteers are fighting alongside the mujahedin in Afghanistan, but sometimes to disruptive effect 20 Moroccans and Sahrawis both claim confidently they will win the forthcoming referendum in the Western Sahara 22 Erdal Inonu, Turkey’s social democrat leader, looks set to become the country’s next prime minister

•SPECIAL SURVEY*

25 Italy tries to revive its flagging trade relations with the Middle East

COVER STORY IRANAND IRAQFACETHE PROBLEMS OFPEACE Talks between the former combatants in the Gulf war are getting nowhere, and Iran and Iraq have turned their attention to domestic problems. The war created firm foundations for the Islamic republic but now Tehran faces the need to adapt the constitutional structure to peacetime in the post-Khomeini era. Iraq, meanwhile, is determined to back up its new stature in the Arab world by revamping the economy. Page 5

STICKINGTOGETHERAFTER KHOMEINI

•BUSINESS AND FINANCE*

28 Egypt, Morocco and Sudan are amongst the Arab world’s biggest debtors, and they are finding it hard to swallow the IMF’s medicine 32 The pilgrimage season in

Saudi Arabia is becoming highly commercialised 33 Opec satisfied itself last month with a production increase, but the cracks were only papered over 34 Oil looks like the best hope for Syria’s sickly economy 36 The first of a regular series on business travel in the Middle East 38 Personal finance: a report on the risky world o f options trading

BOOKS

41 Israeli strategists assess the country’s uninviting options 42 Bani Sadr looks back on his term as Iran’s first president 44 How the West has seen the

Orient

MOSAIC

45 Jewellery through the ages -

an examination o f one of the Middle East’s oldest decorative arts 47 The inspiration for the most

American of US symbols was found in the Arab world 49 A Turkish flavour still runs through Hungary’s culture, centuries after the Ottomans left 50 Culture and choreography are combined to create a contemporary style of dance which appeals to audiences from East and West alike

The long-awaited demise o f Ayatollah Khomeini was expected to entail a bitter power struggle in Iran. That might yet happen. For the time being, however, the country’s fractious leaders have decided to present a face of unity to the people and the world - and it looks as if Rafsanjani has emerged at last as the Islamic Republic’s strongman. Page 18

PERSONALDECORATION

Jewellery is one o f the oldest forms of decorative art known to man and excavations in the Middle East have unearthed some of the most exciting examples of this ancient art. A new publication, Seven Thousand Years o f Jewellery, brings together examples from all major phases of man’s history. Page 45

Cover photo: M ingam /F rank Spooner

The Middle East July 1989 3