NATIONAL INTELLIGENCE DAILY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 05301310
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 26
• Document Creation Date: February 27, 2023
• Document Release Date: February 24, 2023
• Case Number: F-2014-00485
• Publication Date: July 28, 1990

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Director of Cieneettetellisence
SataresiN 21 Agy 1990
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CPAS NID 90-175JX
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Contents
Persian Gulf: Kuwait Under the Gun
Notes
Liberia: Skirmishing Continues
5
Bulgaria: Leadership Under Fire
USSR:
Baltic Republics, Yel'tsin Get Cozy
6
7
Belorussia Climbs on Sovereignty Bandwagon
8
Armenians Seek To Force Gorbachev's Hand
8
Poland: Okays Privatization Bill, Seeks Investors
9
Papua New Guinea: Talks With Rebels May Open Tomorrow
China: Criticism of US Shift on Cambodia Growing
10
11
Zaire: Domestic Discontent Rising
11
In Brief
12
Special Analyses OPEC: Iraq on the Rise
13
Haiti: Rightist Assertiveness Threatens Elections 14
South Africa: Communist Party Goes Public 15
28 July 1990
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Crude Oil Prices, 1990
US$ per barrel
24
22
20
18
16
14
W. Texas Intermediate
� OPEC
�
1 1 1 1 1 1 1 1 1 1 1 I1 1 1 1 1 1 1 1 1 1 1
12 Jan Feb Mar Apr May Jun Jul
OPEC's New Production Shares (million barrels a day of crude oil)
New
Quota
Previous
Quota
July
Output
Need to
Cut
Algeria
0.827
0.827
0.8
Ecuador
0.273
0.273
0.3
Gabon
0.197
0.197
0.25
0.05
Indonesia
1.374
1.374
1.3
Iran
3.140
3.140
2.9
Iraq
3.140
3.140
2.9
Kuwait a
1.500
1.500
1.9
0.4
Libya
1.233
1.233
1.2
Nigeria
1.611
1.611
1.6
Qatar
0.371
0.371
0.4
Saudi Arabia a
5.380
5.380
5.6
0.2
UAE
1.500
1.094
1.9
0.4
Venezuela
1.945
1.945
2.0
Total
21.491
22.085
23.05
Includes Neutral Zone production.
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PERSIAN GULF: Kuwait Under the Gun
OPEC ministers agreed yesterday to raise the target price for oil to
$21 per barrel, but if Saddam Husayn does not receive assurances of
what he considers adequate compensation from Kuwait in talks over the
next few days, Iraqi military action is highly likely
OPEC Raises Price The ministers signed an accord raising the target oil price by $3 to
$21 per barrel and agreed to a new production ceiling of 22.5 million
b/d for the remainder of this year. The new ceiling is 400,000 b/d
above the previous ceiling but is about half a million b/d below recent
OPEC production because several producers have been exceeding
their quotas. Oil prices have risen in recent weeks in anticipation of
the new accord; the OPEC basket price has risen nearly $4 this month
to $17.50 per barrel.
Comment: If OPEC production remains near the new ceiling, the
basket price probably will average $17-20 per barrel for the rest of the
year, hovering in the upper end of the range during the fourth
quarter. Market psychology could boost prices earlier, especially if the
Gulf Arab states cut output as expected
Iraqi-Kuwaiti Senior Iraqi official Izzat Ibrahim and Kuwaiti Crown Prince Saad
Talks Set al-Abdallah are to meet in Jeddah today to begin talks arranged by
Egypt's Mubarak and Saudi King Fand to resolve the crisis. The
Crown Prince is due in Baghdad on Monday for talks with Saddam.
Baghdad yesterday reiterated that Kuwait must be prepared "to
remove the harm and aggression" Iraq has suffered, and the Crown
Prince said that Kuwait will not bow to threats and extortion.
Comment: Saddam almost certainly will present the Kuwaitis with a
set of demands, including repayment for "stolen" Iraqi oil, agreement
to contribute to an Arab reconstruction fund, and territorial
concessions; he may seek control of Warbah and Bubiyan Islands. If
he does not receive what he deems to be adequate payment, he almost
certainly will take military action. Saddam is unlikely to do so before
his meeting with the Kuwaiti Crown Prince.
continued
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LIBERIA: Skirmishing Skirmishing Continues
Johnson's rebel faction, reportedly consisting of about 250 men,
skirmished with government troops in Monrovia's business district
again yesterday. The group advanced within a mile of the US
Embassy but may have withdrawn to replenish ammunition from
bases on Bushrod Island.
Sinkor and C.ongotown remain quiet, although government soldiers
have resumed looting in the area,\
Comment: Johnson's forces will continue hit-and-run tactics in
downtown Monrovia, but supply shortages probably will prevent
them from maintaining a position in the area. Animosity between
Johnson and Taylor increases chances that US citizens may be caught
in crossfire between the rebel groups. A drawn-out battle against the
government, however, may force the rebels to call a temporary truce
5
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BULGARIA: Leadership Under Fire
At least 1,000 demonstrators yesterday protested the National
Assembly's decision�on grounds of national security�not to
publicize the speech former leader Todor Zhivkov is to give before
it next week. The unrest prompted Internal Affairs Minister
Semerdzhiev to offer his resignation.
Comment: The Socialist (formerly Communist) government is in a
no-win situation. The speech is likely to hurt its credibility, as
Zhivkov almost certainly will implicate most, if not all, of the current
leaders, including Premier Lukanov, in past abuses. Refusal to release
the speech risks widespread demonstrations and demands for the
government to step down. At a minimum, the controversy probably
has killed any chance the Socialists had of persuading the opposition
to join a coalition government, and it may sour more resignation,
-TM-Secret-
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USSR: Baltic Baltic Republics, Yel'tsin Get Cozy
Meeting in Riga, the three Baltic republic leaders and Russian
Republic President Yel'tsin agreed last night to conclude treaties
governing their relations within six to eight weeks. Russian Republic
representatives began talks with Lithuania this week and are
scheduled to begin discussions with their Latvian counterparts on
Monday. A senior aide to Gorbachev told Estonian President Ruutel
on Thursday that his boss wants to begin negotiations next week on a
new status for Estonia within the Soviet federation according to
Western press reports.
Comment: Yel'tsin probably hopes this accord will increase his
leverage over Gorbachev as the two leaders vie for influence over the
process of restructuring the union. He may also want to pressure
Gorbachev to soften his policy toward the Baltic republics. They
probably remain unsure about how much help they will ultimately
receive from Yertsin. Nevertheless, his apparent readiness to develop
relations and the possibility of the Russian Republic's recognition of
Baltic independence are likely to encourage the Baltic leaders to
continue to resist Gorbachev's entreaties that they should seek a new
status in a renewed federation rather than try to break away.
-TiirSteret-
7 28 July 1990
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Moldavia Takes Step To Implement Sovereignty
The Moldavian legislature on Thursday elected the republic's chief
prosecutor to replace a Moscow appointee. The move will intensify
the battle with the center for control of key republic institutions. A
similar action by Lithuania in March increased tension between
Vilnius and Moscow.
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USSR: Belorussia Climbs on the Sovereignty Bandwagon
Belorussia yesterday became the latest Soviet republic to adopt a
declaration of sovereignty. The declaration reserves to the republic
the right to secede from the USSR, says Belorussia will be a nuclear-
free zone and a neutral state, and asserts that no military base will be
permitted without its approval. The text also says the republic has the
right to maintain its own military forces ignoring Gorbachev's decree
Wednesday banning such formations.
Comment: Belorussia has been one of the central government's
strongest supporters. Its declaration, similar to one neighboring
Ukraine issued last week, is among the boldest Soviet republics have
adopted in terms of the wide responsibilities it asserts for the
republic. Like the Ukrainian pronouncement, it is a statement of
principle that will reauire more snecific leeislation to have any
practical effect.
USSR: Armenians Seek To Force Gorbachev's Hand
Spokesmen for Armenia's leading militant groups said yesterday they
will defy Gorbachev's order to disband and warned of bloody
confrontations if Soviet troops attempt to enforce it. Internal Affairs
Minister Bakatin said yesterday that Soviet authorities are prepared
to resort to force to disarm illegal militants, although
Bakatin and his subordinates were opposed to
issuance of the decree, believing it could not be enforced and would
drive illegal weapons underground. Meanwhile, Azerbaijan's
President Mutalibov, the only republic leader to date to endorse the
decree, announced that immediate steps would be taken to disarm
Armenians in his republic, which presumably would include those in
Nagorno-Karabakh.
Comment: Armenian republic leaders will probably try to avoid
taking action on the decree, thereby forcing Gorbachev to move
unilaterally against Armenian militants or risk exposing the
hollowness of his order. Senior security and military officials wish to
avoid becoming involved in interethnic disputes because of resulting
antimilitary sentiments and sagging troop morale but will implement
the decree if so ordered. Mutalibov's endorsement of the decree as a
means of disarming Armenians indicates the potentially divisive
nature of the order as some leaders try to turn it aeainst local
enemies.
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POLAND: Okays Okays Privatization Bill, Seeks Investors
Poland's long-awaited bill to turn state firms into private ones easily
cleared the legislature Thursday, but Warsaw faces formidable
hurdles in attracting investors. The government has succeeded in
limiting worker participation on the boards of directors of private
firms to 30 percent, despite pressure from Solidarity legislators, but
employees will be able to buy as much as 20 percent of the shares of a
firm at preferential prices. Government approval will be required
when foreign investors propose buying more than 10 nercent of a
company.
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Comment: The bill is the centerpiece of Finance Minister Balcerowicz's
program to restructure the economy. The lack of adequate domestic
investment capital makes foreign investment crucial to Warsaw's goal
of privatizing 20 to 30 companies by year's end. West Germany is the
most promising source of capital, but old fears of German domination
impelled the government to retain a veto on foreign participation.
Additional obstacles for foreign investors include Poland's outdated
industrial infrastructure and its lack of modern communications
transportation systems. NR
NR
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PAPUA NEW GUINEA: Talks With Rebels May Open Tomorrow
Foreign Minister Somare claims he will not discuss secession during
talks with the Bougainville insurgents to begin on a New Zealand
warship tomorrow, according to press reports. Insurgent leaders, who
declared Bougainville Island independent in May after forcing Port
Moresby's troops to retreat, have not confirmed they will participate
in the talks. Rebel cohesion reportedly has eroded since Port Moresby
began a blockade of the island later in May. But the militants have
not softened their demands for secession and for unrealistic
compensation before they will reopen the Australian-owned cooner
mine they forced to shut down last year.
Comment: The talks are unlikely to resolve the standoff and may
collapse immediately because no agenda has been set and neither side
appears teady to compromise. Although government troops are ill
prepared and led, some officers believe an invasion of Bougainville
would salvage their image. Wellington probably sees its mediation
role as proof at home and abroad that New Zealand remains a force
in the region.
10 28 July 1990
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CHINA: Criticism of US Shift on Cambodia Growing
Hong Kong newspapers that Beijing controls have increased their
attacks on the US policy shift on Cambodia, calling the move
ill-considered and reckless. They also are spotlighting criticism by
ASEAN and the Cambodian resistance.
The Chinese Assistant Foreign Minister
for Asian Affairs, meanwhile, was in Bangkok this week for
consultations and has invited the three resistance factions to meet in
Beijing on 8 August.
Comment: The use of unofficial channels to advance its harshest
critiques suggests Beijing does not want to complicate further its
relations with Washington. China almost certainly will increase its
efforts to work with ASEAN countries and the Cambodian resistance
toward a Cambodian settlement that curbs Vietnam's influence in
Indochina and gives the Khmer Rouge a role. When Premier Li Peng
visits Jakarta early next month to restore diplomatic relations, he
may revive an earlier proposal for a regional meeting on Cambodia to
include China Vietnam Thailand Indonesia and Laos.
ZAIRE: Domestic Discontent Rising
Negotiations between the government and striking civil servants are
deadlocked, increasing the likelihood of clashes between strikers and
security forces. Civil servants believe the Mobutu regime has the
economic resources to meet their demands and are increasingly
frustrated by the government's intransigence,
he strikes reportedly have spread to parts of the
private sector and to key government-controlled companies,
including the diamond and copper industries. Students have taken
to the streets chanting anti-Mobutu slogans
Comment: Mobutu's profligacy, declining export earnings, and
reductions in Western bilateral and IMF and World Bank lending
are limiting the government's ability to meet the demonstrators'
demands. Public discontent is also being fueled by the slow pace of
political reforms Mobutu promised in April.
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Andreotti Goes to His Bench
Andreotti has selected respected, competent replacements for his cabinet, but only the new
Defense Minister has a national political reputation.
Defense Minister Virginio Rognoni, an elder statesman in the Christian Democratic Party's
left wing, lacks experience in defense matters. As Interior Minister (1979-83), he successfully
directed the fight against terrorism after the murder of party leader Aldo Moro by terrorists.
Rognoni has led the party group in the Chamber of Deputies served as Justice Minister and
wasi,resdent of the Justice Comniittee.
Rognoni studied law at Yale. He turns 66 on 5 August.
Agriculture Minister Vito Saccomandi, who has been director general for international
relations in the Agriculture Ministry, has sought constructive solutions to differences
between the EC and Washington on agricultural trade matters. He believes a compromise on
agriculture is necessary at the Uruguay Round to avoid the disintegration of multilateral
trade negotiations and the creation of regional trading blocs. Saccomandi, a professor of
agricultural marketing, has served on the EC staff. He is 51.
Other new ministers include two Christian Democratic legislators, Public Works Minister
Franco Piga and Education Minister Gerardo Bianco, and a former law professor, Minister
of Southern Development Giovanni Marongiu,
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In Brief
Europe
� Italian Prime Minister Andreotti has replaced cabinet members
who resigned on Thursday... their Christian Democratic Party
faction says it will support government in confidrn re vote today
... government nonetheless sure to be weaker.
� Bulgaria has asked Romania to close chemical plant near border,
claiming it causes severe chlorine pollution in Bulgaria...
continuing demonstrations, domestic nressure on Sofia will keen
issue prominent in bilateral relations.
� Soviet Foreign Ministry spokesman Gerasimov suggests
normalization of ties to Albania imminent ... possibly in days,
Albanian UN representative says ... Moscow eager for political,
economic, cultural ties despite Western criticism of Tirane.
NR
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Special Analysis
OPEC: Iraq on the Rise
Baghdad has exploited divisions among OPEC members and used
threats of military action against Kuwait to gain significant control over
OPEC policy. It undoubtedly believes it will have a much larger say in
future OPEC decisions and may periodically resort again to military
threats to extort concessions from other regional producers.
Baghdad's moves sharpen the division of OPEC into two camps:
price hawks led by Iraq and moderates led by Saudi Arabia. The
struggle focuses on whether to raise production quotas or oil prices.
Baghdad and the other price hawks�Iran, Libya, and Algeria�favor
increasing oil prices to $25 per barrel as soon as possible and to
$30 over the next several years. Higher prices and production
restraint by OPEC members will help Iraq finance planned expansion
of its oil production capacity and position itself to demand increased
production quotas in the future. The moderates, including the smaller
Persian Gulf states, remain concerned that substantially higher oil
prices will lead to lower oil demand by stimulating conservation and
the development of alternative fuels, and by &messing economic
growth in consuming countries
The burden of challenging Iraq falls mainly on Saudi Arabia. Riyadh
still has significant power in OPEC because of its excess production
capacity and huge reserves but is unlikely to challenge Baghdad in the
short term. It wants to avoid direct confrontation or a further
escalation of regional tensions. Saudi Arabia also stands to gain from
moderate price increases and probably believes it can keep Iraq from
pushing prices to levels that would reduce demand.
Riyadh probably would reassert itself in OPEC if Iraq were to press
cartel members to cut production from currently agreed levels or if
the Saudis believed prices were rising too fast. Saudi Arabia can also
substantially increase its oil production in an effort to moderate Iraqi
behavior. Short of that, Riyadh could provide financial assistance to
Baghdad in return for flexibility on oil policy.
-TiirSerret�.
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Special Analysis
HAITI: Rightist Rightist Assertiveness Threatens Election
President Trouillot has weathered another political storm that
threatened to bring down her interim government, but the increasing
assertiveness of the far right has greatly diminished prospects for a free
and fair election in November.
Trouillot's willingness to discuss an accommodation with the
cogoverning State Council helped reduce popular pressure on her to
resign after two former Duvalierist ministers returned to Haiti early
this month. her decision to accede to the
Council's demand that the protocol defining their relationship be
published in the government newspaper has opened the way for talks
on other disputes. Key leaders in the country's major political coalition
have decided to back a negotiated settlement, but talks are likely to be
short lived unless Trouillot makes other concessions.
Although the President's position appears to have stabilized, the
government is reluctant to challenge the powerful far right, a key
Council demand. The military, many of whose leaders reportedly are
sympathetic to the right, has yet to arrest the returned Duvalierists
for past crimes or the men responsible for an attack on the Council
last month that left one member dead. Several leading Duvalierists
reportedly have armed supporters and are well financed;
Even the voluntary departure from Haiti of those responsible for the
latest turmoil probably would not significantly diminish the threat to
the election. Radical leftists would try harder to force out other
Duvalierists, increasing the likelihood of clashes between the two
extremes. Moreover, any Duvalierist who leaves almost certainly will
continue plotting while safely abroad.
The government's failure to bring the far right to heel has heightened
concern among leaders of mainstream parties about Trouillot's ability
to prevent extremists from dominating or disrupting the election.
Most parties almost certainly will boycott the election if Duvalierists
intimidate the election board into ignoring the constitutional ban
against their participation. If the board prevents most Duvalierists
from running, the resulting increased violence by the far right will
greatly reduce voter turnout and may even cause cancellation of the
election.
"Torseefitt_
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South Africa
Joe Slovo
Communist Party's Political Strategist
Slovo has been a Communist activist for almost 50 years and
an ANC member since the 1960s. The South African
Government has long touted him as public enemy number
one, but he is a member of the ANC team meeting with the
government on a new constitutional dispensation. Slovo
probably hopes launching the SACP as an overt party will
dispel concerns about Communist influence in the ANC. He
is likely to maintain unity between the SACP and the ANC
during the talks, but the groups' interests probably will
diverge in the long run.
The pragmatic Slovo seems to have reevaluated his
doctrinaire beliefs and now advocates multiparty democracy.
He explains the failed Communism of Eastern Europe as an
ideological distortion that separated "socialism" from
democracy. Slovo still calls for some nationalization to
redress the imbalances of apartheid, however, and recent
allegations that he continues to build underground military
networks call into question his commitment to peaceful
change.
Slovo was tried for treason and banned in the early 1960s. He
fled South Africa in 1963 and subsequently served as the
ANC's military operations chief until he became the SACP
secretary general in the mid-1980s. Until recently the only
white on the ANC Executive Committee, Slovo is widely
respected by other ANC leaders, whom he advises on both
political and military matters; he is a folk hero in black
townships.
Trained as a lawyer, the 64-year-old Slovo is a formidable
negotiator; he helped draft the Freedom Charter in 1955. He
is a widower, his wife having been killed by a letter bomb in
1982.
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SOUTH AFRICA: Communist Party Goes Public
The South African Communist Party (SACP) marks its 69th anniversary
tomorrow by founding an overt political party. It has been shaken by
waning influence over ANC strategy and by Pretoria's claims of
involvement in 4 plot to subvert the ANC-governmrst talky. hut it
retains widespread support among black militants.
Pretoria has alleged a plot by the SACP and the ANC's military wing
to overthrow the government if talks fail; it apparently hopes to
divide ANC moderates led by Nelson Mandela from hardliners in the
SACP and the ANC's military wing. Pretoria plans to use the alleged
conspiracy to press Mandela for a formal end to the armed struggle in
the talks that resume on 6 August.
So far, however, Mandela and other ANC political leaders have stood
by the Communist Party and the ANC's military wing, condemning
the government's crackdown on ANC operatives, including the arrest
of a member of the ANC National Executive Committee. Mandela
has stressed publicly that the ANC will not review its commitment to
armed struggle until its remaining preconditions to talks have been
met, but he maintains that most of those arrested were operating
under outdated orders and infiltrated before the ANC-government
talks in May.
Despite strains between the two groups, the SACP's heavy
representation in the ANC leadership probably will ensure that the
alliance remains intact until the two organizations compete in a new
political system. Nevertheless, SACP influence over ANC strategy is
constrained by the ideological impact of trends in the USSR and
Eastern Europe and the dominance of moderates in the ANC who are
eager to maintain Western support, Despite widespread sympathy for
SACP aims among militant youth and trade union leaders, the party's
limited funds and overlapping membership with the ANC will limit
its ability to organize a separate constituency
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