THE PRESIDENT'S DAILY BRIEF 19 JANUARY 1977

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006466952
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: January 19, 1977

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The President's Daily Brief
January 19, 1977
2
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Exempt from general
declassification schedule of E 0 11652
exemption category 5B( 11(21.13)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
January 19, 1977
Table of Contents
Egypt: Only strong police action or a reversal of the austerity
measures imposed in an effort to reduce an enormous state
budget deficit is likely to restore order. (Page 1)
Syria: President Asad has privately stated his determination to
prevent Palestinian footdragging from blocking progress to-
ward a Middle East settlement. (Page 2)
USSR-US: General Secretary Brezhnev has made a pointed call for
progress on arms control issues between the US and USSR on
the eve of President-elect Carter's inauguration. (Page 3)
Notes: Rhodesia; India; North Korea; USSR (Pages 5, 6, and 7)
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EGYPT: Only strong
police action or a re-
versal of the austerity
measures imposed on
Monday is likely to
restore order.
The government may have
deliberately moved
ahead too forcefully
and rapidly in order
to demonstrate to the
International Monetary
Fund that such reduc-
tions are politically
infeasible.
The US consulate in
Alexandria reports that
the demonstrators seem
to have little organi-
zation or leadership.
In an effort to reduce an enor-
mous state budget deficit, Egypt
announced that it would reduce
price subsidies on many consumer
goods and impose much higher tar-
iffs on others. Although a
smaller deficit will reduce in-
flationary pressures in the
longer term, the immediate effect
of the austerity measures has
been sharply increased retail
prices on many goods.
Egyptian officials last night an-
nounced that they are "ready to
review" the measures, but this
will only partially defuse popu-
lar discontent. Continued vio-
lent demonstrations could threaten
President Sadat's position, and
the minister of interior has
threatened to use force if the
violence resumes.
Proposed curbs on military spend-
ing as an alternative to civilian
austerity are believed to have
been successfully resisted by the
defense establishment.
IMF officials, who have been
urging reductions in price sub-
sidies, are currently in Cairo.
Sadat and Prime Minister Salim
until now have resisted IMF de-
mands even for gradual imposition
of economic reforms lest this in-
crease popular dissatisfaction.
The same apparently is true in
Cairo, indicating an alarming de-
gree of spontaneity and a wide-
spread depth of feeling over eco-
nomic grievances, which had been
1
--continued
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SYRIA: Syrian Presi-
dent Asad has privately
stated his determina-
tion to prevent Pales-
tinian footdragging
from blocking progress
toward a Middle East
settlement.
Asad 's remarks--both
public and private--
are a marked departure
from his position a
year ago, when he de-
manded that any further
Arab-Israeli territo-
rial negotiations must
involve the PLO.
growing in intensity before the
austerity measures were imposed.
In this atmosphere, political
agitators should have little dif-
ficulty stirring up further
trouble.
* * *
Asad had told a Time correspondent
in the course of an interview
published this week that refusal
of the Palestine Liberation Organ-
ization to attend the Geneva con-
ference would not "cause paraly-
sis" among the other Arabs.
Privately, Asad expressed himself
much more forcefully, according
to Time correspondent Wilton Wynn.
He indicated impatience with the
PLO's inability to devise a clear-
cut policy on either negotiations
or future Palestinian statehood.
His willingness now to negotiate
without the PLO if it is not ready,
and his public notice to the Pal-
estinians that he will not wait
long for their acceptance of ne-
gotiations are an indication of
his increased confidence since
the Lebanon intervention and the
Palestinian setbacks last year.
Zuhayr Muhsin, leader of the Syr-
ian-controlled Saida fedayeen or-
ganization, who was undoubtedly
reflecting Asad's views, told the
Time correspondent that it might
be possible to hold the Geneva
conference without the PLO. He
said that later the PLO could dis-
cuss its "status"--presumably
meaning independent statehood or
an arrangement with Jordan--di-
rectly with the Arab states.
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--continued
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FOR THE PRESIDENT ONLY
Asad's public position
goes further than that
of Egyptian President
Sadat, although actu-
ally the two leaders
probably are not far
apart.
USSR-US: General Sec-
retary Brezhnev has
made a pointed call
for progress on arms
control issues between
the US and USSR on the
eve of President-elect
Carter's inauguration.
Sadat has been privately trying
to force the PLO to make conces-
sions. Publicly, he still insists
that the PLO must attend the Ge-
neva conference and must gain in-
dependent statehood.
Except for minor tactical differ-
ences, Asad's public remarks es-
sentially express Sadat's private
desires. Asad's move in going
public should make it easier for
Sadat to continue his effort to
bring the PLO to a more accommo-
dating posture.
In a speech yesterday, Brezhnev
urged the completion of a SALT II
accord based on the Vladivostok
outline "in the nearest future,"
adding that the USSR was prepared
to conduct "businesslike talks"
on improving the Nonproliferation
Treaty and reaching agreement on
mutual force reductions in Central
Europe. He noted that discussions
on the latter could be held at
"any level and at any venue."
The Soviet leader also got into
the US intelligence controversy
over Soviet strategic objectives
by terming allegations of Soviet
efforts to reach superiority in
the arms race as "absurd and to-
tally unfounded." Soviet media
have hitherto ignored the fact
that a central issue in the US
debate is whether Moscow is try-
ing to achieve military superior-
ity.
Soviet commentary has also failed
to acknowledge that the Soviet
civil defense program is at issue
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in the current debate, although
Brezhnev stressed that the Soviets
will continue to "perfect their
defenses" and "never sacrifice
the security of their country."
Meanwhile, Soviet analysts are
becoming less cautious in eval-
uating the new US administration's
cabinet and are giving for the
most part positive ratings.
--Harold Brown was described as
a dove on disarmament, who has
called for "radical steps" in
that field.
--Cyrus Vance was similarly de-
scribed as favoring arms limits
and better US-Soviet relations.
--Michael Blumenthal was noted
for favoring increased foreign
trade.
These open remarks point toward
an early private sounding of Pres-
ident-elect Carter's position on
East-West relations, particularly
in the area of arms control. The
Soviets for the next few months
undoubtedly will present their own
intentions in the best possible
light in order to gauge the re-
sponses of their counterparts.
* * *
--continued
4
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The South Africans have
announced that Prime
Minister Vorster and
Ivor Richard, British
chairman of the recessed
Geneva conference on
Rhodesia, will discuss
new British proposals
for a UK security role
in a Rhodesian transi-
tion government.
Indian Prime Minister
Gandhi has opted to
hold an election for
the lower house of par-
liament in March, re-
versing an apparent
earlier decision to
wait until 1978.
NOTES
Richard, who will then meet with
Rhodesian Prime Minister Ian
Smith, would like to have strong
backing from Vorster to help per-
suade the Rhodesians to accept
the new proposals. Smith will
not find the British proposals
easy to accept.
The black nationalists and the
white Rhodesians each have demanded
control over the defense and se-
curity ministries in a transition
,government.
* * * 25X1
A number of factors probably con-
tributed to her change of mind:
--She has made progress in her
efforts to gain control of poli-
tics in the 22 states.
5
--She has had considerable suc-
cess in intimidating the opposi-
tion. The recent release from
prison of many opposition politi-
cians reflects her confidence in
their inability to present a seri-
ous challenge to her, and is an
attempt to give the election an
appearance of fairness.
--continued
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A North Korean party
and government dele-
gation headed by Pre-
mier Pak Song-choZ is
scheduled to arrive in
the USSR today for a
three-day visit.
--Her son Sanjay has increased
his political following and, as
the result of extensive touring,
is now a nationally known figure.
The Gandhis appear to have de-
feated efforts by pro-Soviet Com-
munists and Congress Party left-
wingers to limit the growth of
his influence.
--The economic situation is good,
but it could deteriorate substan-
tially if next summer's rainfall
is scant.
Gandhi may have felt that an elec-
tion would help India's interna-
tional image, especially because
neighboring Pakistan, and probably
Sri Lanka, are holding elections
as scheduled this year.
This will be the first opportunity
for a high-level exchange of views
in nearly a year, but the visit is
not likely to produce much in the
way of substance. Little sophisti-
cated Soviet military equipment
has been observed in North Korea
in the east three ears. Moscow
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is continuing to as- 25X1
sist on a number of industrial
plant projects.
Soviet - North Korean relations
have been decidedly cool in recent
years. The USSR recognizes that
Chinese influence is predominant
in Pyongyang and sees Soviet in-
terests as being best served by
preserving the status quo on the
Korean peninsula. During the
tense period following the Panmun-
jom incident last August, Soviet
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--continued
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Two Soviet naval IL-38
antisubmarine warfare
aircraft flew yesterday
from Tashkent to Somalia,
officials, in private remarks to
the US, quickly dissociated the
USSR from what they termed Presi-
dent Kim Il-song's penchant for
adventurism.
The North Koreans probably will
make another attempt to arrange a
visit by Kim. He wants a visit
to balance his highly publicized
trip to Peking in the spring of
1975, but because of Moscow's de-
sire to get off to a good start
with the new US administration,
the USSR is not likely to receive
Kim any time soon.
* * *
Soviet IL-38s last visited Somalia
from November 22 to December 14.
On December 9, they flew a marl- 25X1
time reconnaissance mission over
a US naval task group, led by the
amphibious assault ship USS Guam,
then en route to a port visit at
Mombasa, Kenya. 25X1
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