NATIONAL INTELLIGENCE DAILY MONDAY 18 JANUARY 1982

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005065473
• Release Decision: IPPUB U
• Document Page Count: 14
• Document Creation Date: June 23, 2015
• Document Release Date: September 9, 2010
• Case Number: F-2007-00446
• Publication Date: January 18, 1982

(b)(1)
(b)(3)
APPROVED FOR
RELEASE^ DATE:
21-Jun-2010
 / Poland: Proposed Price Increases Postponed . . . . . . . . i
3 USSR: CaZZ for US-Soviet Summit . . . . . . . . . . . . . 2
China: Prospects for Bureaucratic Reform . . . . . . . . . 3
~7 . . 4
(D Syria-USSR: Foreign Ministers' Meeting . . . . . . . . . . 5
Israel: Inflation Slows . . . . . . . . . . . . . . . . . 7
Hungary: Economic Policy Debate . . . . . . . . . . . . . 7
18 January 1
 J
POLAND: Proposed Price Increases Postponed
continues.
The government has postponed implementation of sharp price
increases because it fears public reaction. Archbishop GZemp again
has criticized martial Law practices, and the regime has denied the
statement by its Ambassador to the UK that martial law may end in
two or three weeks. The intense West German debate over Poland
The authorities announced over the weekend that they
will "amend" their proposed 200- to 400-percent price
rises on consumer items. The statement said the changes
would be presented to the public "as soon as possible."
learned last Thursday that the period for
public iscussion already had been extended to the end
31 December.
Comment: The regime appears to be as indecisive
about its future economic policies as about its political
course. It clearly does not feel secure enough to im-
plement the steep increases officially proposed on
under discussion.
The government certainly recognizes that continued
detention of Solidarity activists could heighten the
vehemence of the public's reaction to the increases.
The regime is also aware that in pre-Solidarity days the
population reacted spontaneously and violently to price
increases that were far more moderate than those now
the people.
--continued
Glemp Speaks Out Again
Archbishop Glemp yesterday restated his public
criticism of martial law. He accused the authorities
of continuing arrests, not releasing the detainees, and
maintaining its campaign of extracting loyalty oaths.
Glemp said that these actions increase the hostility of
18 January 1982
 Comment: Glemp's criticism is probably intended to
influence the political and economic program that
Jaruzelski is slated to unveil to parliament next Monday.
Polish bishops will meet this week, and they, too, may
make a strong statement warning the government leaders
that they cannot expect cooperation from the Church if
they continue their harsh practices. Such pressure
could stiffen the resolve of regime conservatives, who
see the Church as their enemy.
The West German Debate
Public reaction to the bitter debate in the West
German Bundestag on Thursday carried over into the week-
end. Chancellor Schmidt on Saturday told a Bavarian
audience composed of Socialist Democratic Party members
that despite foreign criticism he would hold to his
policy of restraint and cooperation with the East.
Schmidt stated that martial law was "probably the slightly
lesser evil for Poland," given the threat of Soviet
intervention.
The opposition, meanwhile, on Saturday continued
to use repression in Poland as an argument against
Schmidt's detente policies. A spokesman referred to
the Chancellor's pursuit of detente as "a debilitating
drug, sapping the will to self-defense."
ii
18 January 1982
 USSR: Call for US-Soviet Summit
The deputy director of the prestigious Institute of World
Economy and International Relations, Oleg Bykov, on Thursday advo-
cated a meeting between Presidents Reagan and Brezhnev as the most
effective wau of estahlishina a more useful noZitiraZ dialogu.
IBykov
asserted that the problems besetting US-Soviet relations
must be kept "in proportion," and urged that the two
countries emphasize arms control and restraint to avert
confrontations. He claimed that agreements on limiting
chemical and radiological weapons and nuclear tests and
concurrence in a conference on "military detente" in
Europe are nearly completed and could provide the first
steps toward a summit meeting.
Bykov said that Soviet policymakers do not view
events in only US-Soviet terms as depicted by Soviet
propagandists and that they understand that problems
such as Poland do not arise mainly because of US actions.
He indicated Soviet officials regard the US President
as a full-fledged conservative but not as an ideologue
like some of those around him.
Comment: Although Bykov's views represent an unof-
ficia reflection of attitudes held by senior Soviet
scholars and policy planners, they may indicate positions
that will be raised next week by Foreign Minister Gromyko
in his talks with Secretary of State Haig. The renewed
interest in summitry voiced by Bykov already has been
discussed on Moscow television and is likely to be 9iven
increased attention in Soviet media.
The call for arms control and summitry renews themes
advocated by Brezhnev 11 months ago in his party congress
speech and appears aimed at exploring possible improve-
ments in bilateral relations following the resumption
of negotiations on INF limitations and the imposition
of martial law in Poland. By alleging that some arms
control agreements could be achieved rapidly, Bykov im-
plies the US condition that adequate preparations precede
a summit could be accommodated. In bypassing the issue
of linkage, he apparently is testing whether the emphasis
on arms control in the President's speech in November
can be actively pursued despite intervening developments.
2
18 January 1982
 CHINA: Prospects for Bureaucratic Reform
Powerful political and institutional barriers will hinder
the government reorganization recently announced by Premier Zhao
Ziyang and ultimately will prevent Beijing from fully attaining
its goal of a responsive, professional bureaucracy.
The reform is calculated to increase economic effi-
ciency, eliminate bureaucratic impediments to other
economic and political reforms, a secure the succes-
sion for allies of Deng Xiaoping.
he government plans to reduce 108
ministerial-level organizations by at least two-thirds,
retire large numbers of aged or ailing senior officials,
and replace many politically well-connected but generally
incompetent officials with technocrats.
although the leadership agree on
the need for the reforms, implementation will be resisted
by the many senior party officials whose careers are
Comment: Although the reformers probably will
simplify the government organizational charts and force
the retirement or demotion of large numbers of admin-
istrators, political horsetrading will dilute the impact
of the measures. The magnitude of the task and the
resistance it will arouse virtually guarantee that
Beijing will not meet its self-imposed one-year time-
table.
The shakeup in the capital, moreover, will compli-
cate the process in the provinces, where many displaced
officials may be sent. More important, organizational
reforms will not eliminate the principal problems in
the bureaucracy--including cronyism, staff expansion,
and inertia.
18 January 1982
 SYRIA-USSR: Foreign Ministers' Meeting
The restrained tone of the joint communique from
the meeting last week between the Soviet and Syrian
Foreign Ministers suggests that Syria did not get all the
Soviet political and military support--on the Golan
Heights issue, in particular--that it was seeking.
Syrian Foreign Minister Khaddam claimed in an interview
on Friday that "measures to counter" Israel's annexation
of the Golan were discussed. The communique, however,
only condemned the Israeli move and noted in general
terms the "need to halt the dangerous development of the
situation" in the Middle East. It did not call for
countermeasures or even cite the UN sanctions that
Damascus has been seeking. The two sides called for a
continued strengthening of cooperation in all areas,
"including the military field," but the Syrian delegation
did not include military officials.
Comment: Judging from the public record of the
meeting, Damascus will not be satisfied with the results.
There is nothing to suggest that Khaddam made any progress
in obtaining the "strategic cooperation" agreement he
had earlier stated that Syria was interested in. Although
Soviet Armed Forces Chief of Staff Ogarkov's participation
in the meeting seemed designed to signify continuing
Soviet military support for Syria, the routine language
in the communique on defense cooperation implied no new
commitments from Moscow. The unusual emphasis on the
"utmost importance" of political consultations on the
Middle East situation might be an indication of Damascus's
displeasure with Moscow's slowness in agreeing to the
meeting, but it could also reflect Soviet concern that
Syria not take precipitate actions without prior consul-
tations.
18 January 1982
 ISRAEL: Inflation Slows
The Israeli Government announced on Friday that the
inflation rate was reduced to 102 percent for 1981 from
133 percent in 1980.
Comment: Large subsidy expenditures to hold the
line on prices, particularly prior to the election last
June, are the major reason for the improvement. Infla-
tion probably will increase this year because the govern-
ment has not dealt with the underlying causes--increasing
wages, high consumer demand, and the growing budget
deficit.
HUNGARY: Economic Policy Debate
Debate among government officials and intellectuals
over economic policy has intensified recently in the
face of weakening balance-of-payments position. Some
critics
are arguing or faster growth and accelerated----
economic reform in order to encourage export industries
and weed out unprofitable enterprises. Ferenc Havasi,
the Politburo member responsible for economic policy,
contends, on the other hand, that Hungary should continue
its policy of slow growth and gradual reform and accept
the trade deficit this year as the cost of maintaining
living standards.
Comment: Cutbacks in deliveries of oil from the
USSR and fear of further reductions in raw materials
shipments may have helped intensify the debate. Havasi
has won such arguments before and is in a good position
to do so again. He can argue that accepting the critics'
program would lead, in the short term at least, to in-
creased inflation, more unemployment, and larger trade
deficits. Pressure from the critics, nonetheless, could
prompt Budapest to speed up parts of its reform program.
7
18 January 1982