1. (S-ENTIRE TEXT)
2. EGYPTIAN EMBASSY OFFICERS ZANT AND MAREDY CALLED ON NEA/IRN OCTOBER 10 FOR A BRIEFING ON IRAN. IN GENERAL EGYPTIANS APPEARED TO SHARE GENERAL LINES OF OUR ASSESSMENT SUMMARIZED BELOW.
3. THE ECONOMY: INDUSTRIAL PRODUCTIONS STILL DOWN 58 PERCENT. OIL PRODUCTION HOLDING 3.5-4.8 MILLION B/D WITH REVENUES PROBABLY EXCEEDING 1978. GREATEST DEFICIENCY IS LOSS OF EXPERIENCED MANAGERS. UNEMPLOYMENT ESTIMATED 20-40 PERCENT; INFLATION 20 PERCENT. GOOD AGRICULTURAL YEAR. SPOTTY SHORTAGES SOME MERCHANDISE. GENERALLY SLOW MOVEMENT TOWARDS RECOVERY. ENCOURAGING THAT INCREASING NUMBER OF US FIRMS BEING PAID AND SOME AGREEING TO RESUME WORK (FLUOR ON ISFAHAN REFINERY, AMC TO ASSMBLE JEEPS).
4. KURDS AND ARABS: RECENT OUTBREAK OF BOMBINGS AND ARMED ATTACKS CONSIDERED SERIOUS DIFFICULT TO EVALUATE IMPLICATIONS FOR REGIME, HOWEVER, AS THERE HAVE BEEN MOMENTS OF SERIOUS DIFFICULTY FOR PGOI IN THE PAST.
5. ARMED FORCES: SLOW MOVEMENT TO REGROUP. NEW COMMANDER OF IAF APPEARS STRONG AND DETERMINED. OUR CONTACTS WITH IRANIAN MILITARY GENERALLY BUSINESSLIKE AND POSITIVE IN TONE.
6. LEFT AND MIDDLE CLASS: LYING LOW. SMALL IN NUMBER, NO MASS APPEAL, FRAGMENTED, LACK OF STRONG, CHARISMATIC LEADERS. POTENTIAL AUGMENTATION OF STRENGTH SHOULD PRESENT REGIME SUMBLE BADLY. TUDEH PARTY SMALL AND DISCREDITED BY SOVIET LINKAGE.