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[EXCERPTS]
Statement by Acting Director of Central Intelligence
George J. Tenet
Before the Senate Select Committee on Intelligence
Hearing on Current and Projected National Security Threats to the United States

FEBRUARY 5, 1997

The Russian military, meanwhile, is suffering from serious social and economic difficulties. The process of downsizing, organizing, and adjusting to new missions will be long and hard, given reduced defense resources. Russian military planners also are examining very closely various ongoing arms control regimes and treaties -- particularly CFE, START II, CWC, and ABM -- to assure that they adequately protect what they perceive to be key Russian security needs during this period of great change and uncertainty. Economic hardship, flagging morale,

and corruption raise other military concerns as well: the security and control of nuclear weapons and fissile materials.

Despite these difficult times for the military, Russia retains a major nuclear arsenal -- nearly 6,000 deployed strategic warheads -- and a range of development programs for conventional and strategic forces. In terms of overall military planning, the Russian government is emphasizing research and development over production in its parceling of a tight defense budget.
... ... ...

North Korea

The continued deterioration of the North Korean economy is weakening the stability of the regime. North Korea's grain harvest last fall was less than half of its projected need for this year, and industrial operations in December fell to less than half the pace of 1992. The declines are the result of poor weather, a lack of fertilizer, raw materials shortages, aging factories and infrastructure, the inefficiencies stemming from central planning, and the large share of non-food output that goes to the military.

The decline in living conditions is eroding popular faith in the regime. Shortages of food and fuel in the military are becoming common and causing morale and discipline problems. Potential dangers to the regime could include: food shortages becoming widespread among front-line military units, the security services becoming reluctant to crack down on dissent, or elites concluding that their fortunes were no longer inextricably linked to Kim Chong-il. While we have no evidence that any of these conditions are present at this time, we remain concerned about how the regime's evolution will play out.

The North's economic difficulties make it even more dependent on external assistance -- most of which comes from China, Japan, South Korea, and the United States. Food aid, for example, last

year totaled nearly 700,000 tons. Without additional imports or aid, the North probably will face worse food shortfalls this spring.

What makes us especially concerned about the future evolution of North Korea is its military strength. Its 1.1 million-strong military retains the ability to inflict enormous destruction on Allied forces, including the 37,000 US troops deployed in South Korea. North Korea's long-range artillery and surface-to-surface missiles near the DMZ can hit forward defenses, US military installations, and Seoul. We are increasingly concerned about North Korea's exports of major weapons systems.

On a more positive note, regarding the October 1994 Agreed Framework, the IAEA has maintained a continual presence at Yongbyon since the May 1994 defueling of the reactor. North Korea has not refueled its reactor or operated its reprocessing plant at Yongbyon and has halted construction of additional, larger reactors.

Iran

Turning to Iran, conservatives secured a plurality in last March's Majles, or Parliamentary, elections and are positioning themselves to capture the presidency in June. This political feat will not blot out the reality of Iran today: economic stagnation, rising numbers of disaffected youth, and questions about the clerics' day-to-day role in governance.

Despite growing discontent among many Iranians, opposition to clerical rule lacks a charismatic leader or an institutional power base. Moreover, the clerics are adept at burying their differences in the interests of retaining their control.

Iran's leaders know they face twin challenges of ebbing public support for the revolution at home and superior American military power abroad as witnessed in Desert storm. But they have no, intention of abandoning their anti-western stance or their goals in the region. Rather, they will seek other ways to undermine the US position -- for example, by improving their military capabilities relative to their neighbors and by using what we call asymmetric means -- ranging from the increased use of terrorism to developing weapons of mass destruction -- in order to subvert or intimidate our

allies, undermine the confidence of our friends and allies in our military presence, and eventually expel us from the region. Moreover the Iranians are attempting to improve their foreign ties by reaching out to the Turks and Kazaks, and by solidifying their oil supplier relationship with Japan and Germany.

Iran is improving its ability to potentially interdict the flow of oil through the Strait of Hormuz. For example, it has acquired Kilo- class submarines from Russia and is upgrading its antiship missile capabilities. It is building its capabilities to produce and deliver weapons of mass destruction -- chemical, biological, and nuclear -- and in less than 10 years probably will have longer range missiles that will enable it to target most of Saudi Arabia and Israel.

Iran sees terrorism as a useful tool. In addition to carrying out its own acts, Iran continues to sponsor training in the region and millions of dollars to a variety of militant Islamic groups such as Hizballah and Palestinian groups opposed to the peace process.

Iraq

Iraq under Saddam continues to present a serious threat to US forces, interests, and allies. In 1996 Iraqi forces again fired at coalition forces as Saddam tried to test his limits ~ as he has every year since Desert Storm. His long-term goals have not changed. He is unrepentant for having triggered the Gulf war. He remains hostile to Israel and the peace process, and he is determined to possess weapons of mass destruction and to dominate the Gulf region. His military remains the largest in the Gulf region -- an abiding threat to Iraq's southern neighbors, and to Kurdish and Shia Iraqis.

UN sanctions remain intact and, given Baghdad's continued evasive stance toward UN weapons inspectors, are unlikely to be lifted anytime soon. These sanctions severely constrain Saddam, and he has managed to survive the pressures sanctions have created almost entirely due to the strength of his elaborate security services, which have priority access to Iraq's constricted resources. These forces have been very successful in penetrating and destroying organized political opposition inside Iraq. Nevertheless, Iraq's economy is in shambles, and the intense resentment that the regime has engendered in Iraq still poses a constant threat to Saddam and his family, as suggested by the assassination attempt against Saddam's son Uday in December.

Saddam's propaganda machine has touted UN Resolution 986 as the beginning of the end of sanctions and as the first step toward a return to normalcy. If properly enforced, however, Resolution 986 will modestly benefit the average Iraqi without significantly improving the regime's crumbling infrastructure. Indeed, the regime's overselling of Saddam's acceptance of 986 may backfire as sanctions continue, and the modest nature of the gains for the Iraqi people under 986 become clear. Pessimism even at the center -- within Saddam's establishment -- is likely to resurface as

Iraqis realize that sanctions remain intact, the economy remains crippled, and institutions like the Iraqi military continue to decline. We cannot rule out that Saddam's frustration with this situation will prompt him to threaten another military confrontation with the United States and its Coalition partners.

... ... ...

Proliferation of Weapons of Mass Destruction

Now let me turn to the issue of proliferation. Not too many years ago, the primary threat facing the United States was from a single country with its thousands of nuclear weapons on alert. Today we face a spectrum of threats from more than two dozen countries developing or acquiring the same kinds of devastating weapons we feared during the Cold War. Our concern is increasing as the ability of these countries to develop indigenous capabilities, including production technologies, continues to grow.

For years, our greatest concern has been the loss of control of nuclear weapons or materials that can be used in such weapons. In the past, there were two impediments to would-be

proliferators: the technical know-how for building a bomb and the acquisition of the fissile material. Fissile material is the highly enriched uranium or plutonium whose atoms split apart in a chain reaction and create the energy of an atomic bomb.

Today, the major impediment to a nation committed to acquiring a nuclear capability is the acquisition of fissile material. It is by no means easy to make a nuclear weapon, but knowledge of weapons design is sufficiently widespread that trying to maintain a shroud of secrecy around this technical knowledge no longer concerns about nuclear weapons and materials security in the countries of the Former Soviet Union.

Several US programs, such as the Nunn-Lugar program on Cooperative Threat Reduction, are designed to improve this security.

But, Russia and the other states of the former Soviet Union are increasingly not the only potential sources of nuclear weapons and materials. Weapons stockpiles are increasing in other countries, and materials reprocessed from power reactors are becoming more widespread.

Nuclear weapons are certainly not our only worry. Materials and technologies for other weapons of mass destruction are more accessible now than at any other time in history. About 20 countries, among them Iran, Libya, and Syria, have or are actively developing chemical and biological weapons.

Let's look at two examples. Despite the most intrusive inspection regime ever imposed against weapons of mass destruction programs, Iraq still has not properly accounted for all its program

activities, according to the United Nations Special Commission. In the biological weapons area, Iraq declared that it produced a total of 11,000 liters of concentrated botulinum toxin and 8,500 liters of anthrax. At least some of this was weaponized in the form of 122-mm rockets, bombs, and warheads. While the Iraqis have said they were all destroyed after the Gulf war, they have not provided verifiable evidence of their destruction. Moreover, Iraq has the ability to restart these programs as soon as sanctions are lifted and the UN presence reduced.

Iran has an increasingly active chemical weapons program. Over the last year, it has sought the capability to produce not only the chemical agents themselves, but also the precursor chemicals, making it less vulnerable to export controls of its foreign suppliers.

In the last few years, the state-sponsored weapons of mass destruction programs are yielding some of our concern to the possibility of terrorist use. Terrorist interest in chemical and biological weapons is not surprising, given the relative ease with which some of these weapons can be produced in simple laboratories, the large number of casualties they can cause, and the residual disruption of infrastructure. We are increasingly seeing terrorist groups looking into the feasibility and effectiveness of chemical, biological, and radiological weapons. And as the Aum Shinrikyo terrorist incident in the Tokyo subway showed, no country is invulnerable to the possibility of massive, civilian casualties from terrorist use.