NATIONAL INTELLIGENCE DAILY 12 OCTOBER 1985

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005500152
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 23
• Document Creation Date: June 24, 2015
• Document Release Date: September 9, 2010
• Case Number: F-2007-00450
• Publication Date: October 12, 1985

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National Intelligence Daily
Saturday
12 October 1985
APPROVED FOR RELEASED DATE:
07-22-2010
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Contents
USSR: Praise for East German Management Reform
Poland: Parliamentary Election
Notes
Japan: Tough Diet Session Ahead
Lebanon: Soviet Hostages
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in Brief 10
Special Analyses
Middle East: Aftermath of US Capture of PLO Hijackers
South Yemen: Socialist Party Congress
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USSR: Praise for East German Management Reform
A recent article In Pravda by East German leader Erich Honecker
Is yet another sign that the leadership in Moscow may be looking
to East Germany as a model for economic management reform.
The long article on East Germany's strong economic performance
addresses the success of the kombinat system. These industrial
combines control groups of enterprises and research organizations
for specific production tasks regardless of the units' ministerial
subordination, unlike the existing Soviet production associations.
They have assumed major responsibilities, but not at the expense of
tight central control. Honecker also praises the combines for
promoting more efficient use of resources and speeding the
introduction of technological advances into the production process?
major themes in Mikhail Gorbachev's prescriptions for the Soviet
economy.
Gorbachev praised the kombinat system and other East German
economic management practices in two speeches last spring, and his
close economic adviser Abel Aganbegyan underlined in an article last
August the combines' role in promoting technological innovation.
Comment: Publication of the Honecker article In the central party
newspaper, along with Gorbachev's past public references, indicates
that the Soviet leadership considers East Germany's experience
worthy of serious study and, possibly, emulation.
Of all the models of economic management available to Soviet
planners from within the socialist community, the East German
example Is probably the most attractive because of its demonstrated
ability to boost economic performance without decentralization or
other radical reform. The East Germans certainly will be pleased by
Moscow's approval of their approach to the economy.
The Soviets probably are not as interested In Hungary's economic
reforms, which include some decentralization of industrial
mana ement b t they have not tried to discourage Budapest.
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POLAND: Parliamentary Election
Success in Sunday's parliamentary election will be measured b
the size of the turnout rather than by the electoral results.
Solidarity's underground wing has tried to promote a boycott by
distributing an unusually large number of leaflets, interrupting official
television broadcasts with its anneals
The regime, in addition to arresting activists and taking other coercive
measures, has tried to encourage voting by implying a second major
amnesty of political prisoners if the turnout is high and by permitting,
for the first time, two candidates?both approved by the party?to
run for each of 410 seats.
Both Lech Walesa and Premier Jaruzelski have predicted a turnout of
75-80 percent. Solidarity has devised its own formula to estimate the
count; the government's press spokesman privately claims the regime
will be satisfied if 75 percent of the electorate participates.
Comment: If necessary, the regime will manipulate the returns to
ensure that the official results are no lower than 75 percent. It will use
the result as proof of Poland's stability?especially since its official
"period of overcoming the socioeconomic crisis" ends early next
year
Solidarity needs a large boycott to preserve its gradually eroding
standing as a mass movement that the regime has to engage in a
dialogue.
Neither Jaruzelski's domestic critics nor the Soviets will be impressed
by inflated figures and will continue to press him to bring the
opposition under tighter control. He may be more willing to increase
pressure on the Church since he no longer needs its neutrality on the
boycott issue.
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JAPAN: Tough Diet Session Ahead
Prime Minister Nakasone faces strong criticism from opposition
parties on the government's new defense spending plan, and it may
complicate smooth passage of key legislation during the
extraordinary Diet session opening Tuesday. The ruling party must
deal with a politically sensitive bill reapportioning Diet seats, as well
as bills on pension reform, pay increases for public employees, and
tax cuts. Nakasone also hopes to reduce trade friction with the US
with legislation accelerating tariff reductions and easing inspection
standards.
Comment: Although an opposition boycott or no-confidence motion
is unlikely and passage of the market-opening measures should go
smoothly, the way Nakasone handles opposition questioning on the
1-percent-of-GNP ceiling on defense spending could hur' his ability to
reach a compromise on other legislation, particularly the
reapportionment bill. The Supreme Court has ruled reapportionment
should occur before national elections can be held, and Nakasone
feels elections must be held by June 1986 if he is to have a chance to
remain in office for more than two terms.
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LEBANON: Soviet Hostages
Sunni Muslim fundamentalists in Beirut are unlikely to release
voluntarily their three surviving Soviet hostages.
factions in West Beirut believe the Soviets are in the
hands of the militia commanded by Shaykh Maher Hamud, an
outspoken member of the Union of Islamic Ulama, which has ties to
the fundamentalist Muslim Brotherhood. Shia Amal and Druze militias
have mounted an intensive search for the diplomats.
Comment: Shaykh Hamud is a likely suspect in the kidnaping
because of his deep sympathy for Shaykh Shaban, leader of the Sunni
fundamentalist group embroiled in the Tripoli fighting. Moreover,
Hamud, with a power base In Beirut, has the means to carry out such
an operation. He is likely to hold the hostages as leverage against
further Syrian attacks on Tripoli and its inhabitants. Amal and Druze
efforts to find the hostages come as both militias are looki
increasingly to the USSR for military supplies and training
-CIA, DIA, NSA-
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Europe
In Brief
? Next French nuclear test appears imminent.., three Greenpeace
ships present... one has sailed within several hundred yards of
12-mile limit patrolled by French Navy. ... no serious incidents yet
... tensions high
? Turkey has aareed to bay USSR in hard currency for natural gas,
... Ankara previously insisted on
barter deal ... still negotiating price.
? Two members of Lebanese Armed Revolutionary Faction terrorist
group released by Italian appeals court ... charges dropped due
to insufficient evidence.., had been convicted of smuggling
explosives into Italy.
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Americas
Africa
? Press reports Ecuador has severed relations with Nicaragua.. .
follows criticism by Managua of possible Quito role in Contadora
process ... action probably reflects conservative President
Febres-Cordero's sensitivity to criticism of close ties to US.
? Colombian authorities confirm one of four US citizens kidnaped on
5 October by the Revolutionary Armed Forces of Colombia
escaped .. . no demands made by guerrillas yet ... group released
two kidnaped US citizens In 1983 following large ransom.
? Ugandan Government offensive bogged down ... peace talks in
Nairobi may resume Monday. ... insurgent leader Museveni
unlikely to attend ... quick progress unlikely
? Ethiopian Chairman Mengistu will visit USSR, North Korea,
ossibl India early November,
robably seeking economic aid, possibly military
support.
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Special Analysis
MIDDLE EAST: Aftermath of US Capture of PLO Hijackers
Egypt was surprised and embarrassed by the US interception of
its plane carrying the four PLO hijackers and the two Palestinian
officials?Muhammad Abbas and Zuhdi al-Oudra?who
accompanied them. But reaction within the region has been
generally quiet and followed predictable fines, with Israel
cheering the move and Arab states condemning It as an "act of
piracy."
All three factions of the Palestine Liberation Front strongly deny
involvement in the ship hijacking, but many sources believe Abbas's
pro-Arafat group was responsible. Jordanian, Israeli, Lebanese, and
Austrian officials and Palestinian sources cited in the Arab press all
point the finger at Muhammad Abbas. If he was in fact responsible,
then It may also be true that PLO chief Yasir Arafat originally
authorized the operation as a way of infiltratina the terrorists into
Israel at Ashdod, the ship's next port of call.
Iran has called the US interception an act of collusion among the US,
Egypt, Tunisia, and Italy?an allegation that furthers Tehran's efforts
to inflame Muslim discontent in Egypt.
Libyan leader Qadhafi has remained mute about the hijacking and the
US interception, even though the state news agency continues to
spout anti-American and anti-Egyptian propaganda. Nor Is there
direct evidence of Libyan involvement, although Qadhafi?who is in
Moscow?supports one of the radical factions of the Palestinian
Liberation Front based in Damascus. In the past Qadhafi's silence
about such incidents has been an indicator of involvement, including
the Red Sea mining of 1984.
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Special Analysis
SOUTH YEMEN: Socialist Party Congress
The Yemeni Socialist Party congress, which begins today, should
broaden support for President Hasani's pragmatic policies of
regional moderation and expanded ties to the West. Hasani will
use the greater support to further trade with the European states
and Japan, and he may make overtures to the US.
Hasani has been the driving force in Aden's transformation from an
exporter of revolution and haven for international terrorists to a
respectable, relatively moderate socialist state. Since he took power
in 1980, South Yemen has ended its support for regional insurgents,
normalized relations with Oman, and established diplomatic ties to all
NATO countries except the US.
Bucking the Hardliners
Hasani has been able to stack the congress delegation with his
supporters and keep the vital support of the Soviets, but he
nonetheless may have to compromise with the left wing of the Yemeni
Socialist Party. One possibility would be to give pro-Moscow
ex-President Ismail, who returned this year from exile in the USSR, a
more prominent position in the party hierarchy. If Ismail does not
obtain a seat on the Politburo or a prestigious position on the Central
Committee, It would indicate that Hasani is confident of his political
control
Moderation To Continue
If, as seems likely, Hasani consolidates support for his pragmatic
policies at the party congress, South Yemen will be in a better
position to turn to the West for economic and technical aid. South
Yemen's stagnant economy has not benefited markedly from Soviet
aid, and Hasani supporters argue strongly that the
West would help Aden more. The discovery of oil in North Yemen by a
US firm after unsuccessful Soviet exploration could provide additional
support for such arguments. The fact that Oman recently established
relations with the USSR may help Hasani do the same with the US, on
the arounds that he Is matchina Oman's ties to both superpowers.
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