NATIONAL INTELLIGENCE DAILY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0001367616
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 21
• Document Creation Date: June 23, 2015
• Document Release Date: September 9, 2010
• Case Number: F-2007-00450
• Publication Date: October 18, 1985

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Contents
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Liberia: Postelection Tensions
Latin America-US: Reaction to Debt Initiative
USSR: Task Force on Economic Reform
Notes
France: Terrorists Attack Rightist Party
Warsaw Pact: Summit To Endorse Arms Positions
Pakistan: One Step Toward Civilian Government
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In Brief 11
Special Analyses
International: Implications of Achille Lauro Hijacking 12
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LIBERIA: Postelection Tensions
Turnout was heavy for the presidential and legislative elections
that were held on Tuesday without major incident, but frustrated
members of the military or opposition may still attempt to oust
Head of State Doe.
Preliminary returns indicate
that Doe's National Democratic Party may have won 45 percent of the
S ? ?.:? ? S : ?'.1
most voters felt free to cast ballots for
any of the four participating parties. Opposition leaders, nevertheless,
intend to protest the establishment of several unauthorized polls on
military bases and other violations of election procedure
Comment: The next month may be volatile as votes are tallied and
election procedures?and possibly results?are challenged. Although
opposition leaders appear generally satisfied with the manner in
which the elections were conducted, they remain wary of possible
government tampering with the results. Doe probably will try to
handle complaints of fraud through the Special Election Commission,
but may resort to harsh action if opposition supporters take their case
to the streets.
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LATIN
AMERICA-US:
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Reaction to Debt Initiative
Latin American debtors generally have welcomed the US
Initiative on debt presented last week in Seoul, but they doubt
that it will be enough to solve the region's financial problems.
High-ranking government officials in Brazil. Mexico. and Argentina
view the proposal as an important gesture, a sign that the US
recognizes the needs of debtor countries to restore economic growth
and to obtain more foreign capital. They are particularly encouraged
by US intentions to promote substantially increased lending by
multilateral institutions?the World Bank and the Inter-American
Development Bank?and by commercial banks. None of the region's
debtors have voiced opposition to the initiative, although Peruvian
Finance Minister Alva Castro reaffirmed Lima's position that the debt-
related functions of the IMF should be eliminated.
Comment: Most Latin American debtors probably will await firm
commitments from the multilateral development institutions or
commercial banks before offering stronger endorsements of the US
initiative. They aiso will seek further information about the prospects
for increased donor contributions to the World Bank, World Bank
guarantees for commercial lending, and cofinancino between the
World Bank and commercial banks.
Meanwhile, the concern that the initiative leaves the issue of interest
payment burdens unresolved may prompt the debtor countries to
increase pressure on creditors to defer intecest or place a cap on
interest payments.
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USSR: Task Force on Economic Reform
A Soviet task force on economic reform is reportedly considering
measures to promote competition among industrial firms,
increase labor productivity, and legalise private activity in
consumer services.
a Soviet economic institute
was
estahlishe i . ry so?y o e senior po
leadership. he task force may be headed by
Gosplan's deputy chairman. z erman Gvishiani. and may include
Abel Aoanbeqyan, one of Gorbachev's top economic advisers.
proposing a compre;lensive oroaram but the leadership wants
recommendations sooner.
the group is two or three years away from
The group agrees that some type of business mechanism?other than
market pricing?is needed to make Soviet industry more efficient. It
also agrees that enfirnrise manarirs should have more control over
staffing and payroll. olerating a
2-percent unemployment rate would advance both these goals
industrial firms be allowed to choose their
own suppliers and that noncompetitive enterprises be closed or
reorganized the task force is studying ways to legalize a
large number of consumer services currently available only on the
black market.
Comment: proposals on unemployment and market
competition reflect ideas not yet agreed on by the task force. The
decision to establish a task force to prepare recommendations on
such politically sensitive subjects is itself significant and indicates that
Gorbachev is looking for specific ways to back up his calls to improve
economic performance.
Although the task force is reportedly under pressure to come up with
its recommendations, the leadership probably will not take quick
action on permitting unemployment, expanding the private sector, or
other controversial issues. It is more likely to initiate small-scale
experiments while assessing the economic gains from measures
already put into place. Gorbachev, however, is anxious to implement
noncontroversial suggestions quickly, to maintain the momentum of
chanoe that has characterized his economic program to date.
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FRANCE: Terrorists Attack Rightist Party
The leftwing terrorist group Direct Action has bombed three Paris
communications facilities to protest appearances by the head of the
rightwing National Front party. The group attacked radio and
television stations on Monday and the offices of the government
broadcasting authority on Wednesday. There were no casualties. but
the blasts caused extensive property damage.
Comment: The bombings were carried out by the "Symbolic Wing" of
Direct Action?which appears to focus on domestic political issues?
and may portend additional attacks against National Front activities.
A second, hardline international faction has attacked defense-related
targets. The National Front made significant gains in local elections
last March; the terrorists probably are citing these satins to rationalize
their actions to prospective supporters
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WARSAW PACT: Summit To Endorse Arms Petitions
The Warsaw Pact's highest policymaking body, the Political
Consultative Committee, will meet in Sofia on 21-23 October. Such
meetings are held biennially and bring together the party leaders,
premiers, and foreign and defense ministers from the USSR and its
six East European allies. The present session was scheduled for last
January but was postponed because of Chernenko's health.
the Soviets want a
smooth meeting and are concentrating on securing a show of support
nounced positions rather than offering any new initiatives.
Comment The Soviets want to emphasize Pact unity before the
Geneva meeting next month and will make sure their recently unveiled
package of arms control proposals has a clear endorsement. A
political declaration containing a laundry list of past overtures, with
particular emphasis on such European issues as nuclear- and
chemical-weapons-free zones, is a certainty. General Secretary
Gorbachev may use the meeting?or a possible speech to the
UNESCO General Conference in Sofia immediately afterward?to
expand on his latest proposals, particularly with respect to INF.
PAKISTAN: One Step Toward Civilian Government
Pakistan's National Assembly has approved a revised bill laying the
groundwork for civilian government, but the compromise probably
creates problems for that government over the extent of political
activity and Islamization. To win approval for clauses validating the
actions of the martial law regime and protecting President Zia from
prosecution, the regime accepted limitations on the power of the
president to dissolve the parliament, and it promised an early debate
on a law governing political parties. A small group of independent
delegates also succeeded in passing a resolution requiring the
introduction of a constitutional amendment by next April forcing all
laws to conform to Islamic principles
Comment: Zia probably yielded more than he would have liked to get
the unanimity he believes will legitimize his martial law regime and his
coming term as civilian president. The proposed legislation on
political parties would give the government tight control over the
opposition and is likely to face another challenge in parliament.
ilrtensio
Parliamentary discussion of Islamization is likely to rekindle
between Pakistan's ma'ority Sunnis and the minority Shies.
Top Secret
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In Brief
Middle East
Americas
USSR
Europe
? Ottawa announced merger yesterday of Mercantile Bank?
Canada's eighth largest?with bigger bank ... Mercantile had
liquidity problems after two banks failed last month... doubts
about small banks, Ottawa's financial competence likely to linger.
? Uruguay and Cuba resumed diplomatic relations yesterday after
21 years... President Sanguinetti assured US that Cuban
presence in Montevideo will be small ... represents no shift in
Uruguay's basically pro-West foreign policy.
? Foreign Minister Shevardnadze will head Soviet delegation to
UNGA 40th anniversary session, despite earlier reports Gromyko
would attend ... another sign that Gromyko, although duties only
ceremonial as President, has minor role in foreign affairs.
? Leaders of West German Green Party in Hessen have agreed to
coalition with Social Democrats ... Greens' first participation In
government at state level ... unpredictable rank and file to vote on
agreement 27 October.
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Special Analysis
INTERNATIONAL: Implications of Achille Lauro Hijacking
The pirating of the Italian ship and US interception of the
terrorists have caused a number of countries to reassess their
relations with the US and the PLO.
In Western Europe the wrench has been areatest in Italy, bringing
down the aovernment there yesterday
Rome's commitment to INF Ceployment
and its ties to NATO and the US probably are strong enough to
withstand this strain, but, in the short run, the Italians will
demoTrate their anaer by being less accommodating across the
board.
The hijacking has contributed to a growing belief in Western Europe
that Arafat is playing a double game?preaching peace while
organizing terrorist attacks. West Europeans are likely to be more
chary of dealing with the PLO in the short term, but they will not
abandon their belief that the PLO ultimately must be accommodated
in any Middle East peace process.
West Europeans have also acquired a heightened awareness?and
wariness?of the US determination to crack down on terrorism. Some
countries have already called for stronger efforts to forge an
inter 45. it=e re ? e :e=rr ? rist coo .eration. On the other
hand press allegations that
US forces tried to fly the hijackers to the US before Rome could
intervene will stoke smoldering fears that the US will n hor r host-
country sovereignty over NATO bases in time of crisis.
Eastern Europe and the USSR
In the communique issued following the meeting between General
Secretary Gorbachev and Libyan leader Qadhafi, the Soviets
abandoned their initial low-key criticism and called the US action "air
piracy" and an example of the US policy of "state terrorism." They
are almost certain to use the incident for propaganda purposes with
the Arabs and will probably focus their efforts on Egypt, hoping to
erode its confidence in the US, and on Arafat, attempting to disrupt
the PLO-Jordanian peace initiative.
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Yugoslavia, which has long been supportive of the PLO, probably
calculated that Italy's refusal to hold Abu Abbas would minimize the
risk of a strong US reaction against Belgrade's decision to receive
him. Relations with the US are important to Yugoslavia, particularly in
the context of dealing with Western lenders, but Belgrade is anxious
to preserve its access to Middle Eastern oil and to hard currency from
arms sales to Arab countries. It also will use its hospitality to Abu
Abbas to improve its standing in the Nonaligned Movement.
China
An unusually strident commentary in People's Daily on Wednesday
accused the US of "trampling" on international law by intercepting
the Egyptian aircraft. The commentary linked the action to US
support for Israeli policy in the region, including the bombing of the
PLO headquarters in Tunis, and took the US to task for a "passive"
attitude toward the Jordanian and Palestinian peace efforts.
The Chinese have seized on the incident during Vice President Bush's
visit to demonstrate independence from the US and to dramatize their
disagreement with US policy in the Middle East.
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