(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00447R000201560002-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: January 12, 2017
• Document Release Date: June 28, 2011
• Sequence Number: 2
• Publication Date: April 17, 1985
• Content Type: MEMO

=iii..
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Office of East Asian Analysis
DIRECTORATE OF INTELLIGENCE
15 April 1985
,(~
NOTE FOR: C/CH ~`~'
C/NEA
C/SEA
SUBJECT: Treasury Request for Support
We received a telephone call today
th
dlier who works w
B
A
u
from Nomie
arently i
Doug Mulholland at Treasury. pp
they are getting a team together to
attend the annual Asian Development
Bank meetings which commenca eeandwaek.
They would like from us a p g
half description of the political
siutation in the following six countries:
Indonesia, South Korea, Malaysia,
Philippines, Taiwan, and Thailand.
According to Ms. Budlier, they
would like to have the material LDX'ed
to them on Thursday, 18 April. Would
you please let us have the,Thursc~'ain
the front office by o.o.b., ____ _ _ -_.y. the
18t?~ . Thanks
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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
17 April 1985
Taiwan: Looking Toward the Future
Summary
As Taiwan enters its fourth decade of
Kuomintang (Nationalist Party-KMT) rule, it faces a
series of domestic and foreign problems that have
created an atmosphere of political frustration and
uncertainty, among both the ruling mainland elite
Domestic Concerns
President Chiang Ching-kuo, now 79 and in failing health,
has been frustrated in his attempts to construct a viable plan
for his succession and has failed in his efforts to establish a
consensual government of senior, conservative party elders and
younger., moderate mainlanders and Taiwanese. The incapacitation
of Chiang's heir apparent, a moderate technocrat, in 1984 has led
to a rise in influence of the conservative old guard, whose
primary concern is maintaining the status quo. The conservative
resurgence has increased the alienation of younger, more moderate
politicians, both in the party and government who favor moderate
political and economic reforms that will allow Taiwan to maintain
its rapid economic growth while opening up the political arena to
a broader spectrum of the population. As a result, factional
infighting has increased, and heightened tensions among top party
and government leaders have been reinforced by rumors that the
President intends to reorganize the government later this spring.
This memorandum was prepared by China
Division, Office of East Asian Analysis. It was requested by
Department of Treasury. Comments and questions are welcome
and should be directed to Chief, Foreign Affairs Branch,
nrn
EA M 85-10078
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The government has been rocked by a succession of political
and economic controversies in the last year that have damaged its
credibility. For example:
-- Several coal mine disasters in the summer of 1984 led to
calls in the Legislative Yuan for the resignation of the
Premier and Minister of Interior.
-- A series of sensational articles in the opposition press
on the private lives of the Chiang family heightened
tensions between the government and the predominantly
Taiwanese opposition.
-- The January 1985 disclosure that three members of Taiwan's
Defense Intelligence Bureau were involved in the murder of
Chinese-American writer Henry Liu seriously damaged the
governments' "clean image."
-- The forced resignation in February of the moderate head of
the KMT called into question the President's intention to
liberalize the party.
-- The Tenth Cooperative Banking scandal that led to the
arrest and conviction of a legislator and resignation of
the Minister of Economic Affairs.
Foreign Affairs
At the same time, there has been a hardening of Taiwan's
foreign policy line, particularly with regard to its unofficial
relationship with United States, and its membership in
international organizations. This hardening is a result of
Taiwan's growing sense of diplomatic isolation, fed by:
-- Improvements in US-China relations.
-- Increased Chinese efforts to undermine Taiwan's diplomatic
ties in Latin America.
-- The improvement in unofficial relations between China and
Singapore and South Korea.
-- The signing of the China-UK accord on Hong Kong's
future. 25X1
In addition, Taiwan's recent attempts to increase the
"officiality" of its relationship with the United States probably
is a result of Taipei's perception that the Reagan administration
is sympathetic to its concerns and, with an intensive lobbying
effort, might upgrade Taiwan's status in Washington.
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Looking Down the Road
Despite these problems we believe the short-term outlook for
Taiwan is generally good. Taiwan's economy has continued to
expand, and its population enjoys an extremely high standard of
living. President Chiang's health, however, injects an element of
uncertainty. If Chiang dies without a viable succession
arranged, we believe that factional infighting between the hard-
line old guard and the moderate younger generation will
escalate. Although a post-Chiang government probably will hew to
policies established by Chiang, a struggle for control of the
policy-making apparatus could jeopardize the prospects for
moderate reforms. The political opposition on the island is
splintered, however, and we do not believe they pose' any
significant threat to the stability of the regime.
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. Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
18 April 1985
South Korean Political Scene
Leading up to his visit to the United States in late April,
President Chun has sought to avoid confrontation with his newly
assertive opposition.
-- Moderates in the government and the ruling party have
been assigned to pursue a dialogue with the opposition.
-- Chun, meanwhile, has sought to foster a statesmanlike
image, focusing on such matters as talks with the North
Koreans.
-- Nonetheless, he is increa i olated behind
conservative advisers. 25X1
The New Korea Democratic Party, associated with dissident
leaders Kim Dae Jung and Kim Young Sam, has proven a powerful
magnet, attracting a wide range of opposition figures.
-- The government-manipulated opposition party has merged
with the NKDP. The enlarged party can claim to speak
for half the voters, although the ruling party retains
its parliamentary majority.
The parliamentary session of the National Assembly that will
open next week will be a litmus test of prospects for political
stability during the next few months.
-- We do not expect the opposition to seek an early
confrontation over its demands for direct presidential
elections and other fundamental reforms.
- The government appears reluctant to compromise even on
the opposition's minimum demands, however, risking an
impasse that could spark a clash.
This memorandum was prepared by
Korea Branch, Office of East Asian Ana y
i 25X1
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Campus protests have been less heated this semester than
last fall, but this could change in coming weeks.
-- Chun's visit -- coinciding with the 25th anniversary of
the Student Revolution in 1960 -- will be an occasion
for protests against US support for Chun.
-- The greatest potential for unrest will occur around the
18-27 May anniversary of the Army's ha ssion of
anti-Chun rioters in Kwangju in 1980. 25X1
If these protests involve major violence and, in particular,
require use of the Army to control them, we would anticipate an
intensification of the dissatisfaction that the military already
has with Chun.
-- The Army is concerned above all with maintaining an
atmosphere of domestic stability without having to
resort to ruthless suppression of demonstrators.
-- If domestic stability deteriorates sharply, or appears
on the verge of doing so, we would not rule out the
possibility of the Army staging a coup against Chun.
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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
18 April 1985
South Korean Political Scene
Leading up to his visit to the United States in late April,
President Chun has sought to avoid confrontation with his newly
assertive opposition.
Moderates in the government and the ruling party have
been assigned to pursue a dialogue with the opposition.
Chun, meanwhile, has sought to foster a statesmanlike
image, focusing on such matters as talks with the North
Koreans.
Nonetheless, he is increasin 1 isolated behind
conservative advisers. 25X1
The New Korea Democratic Party, associated with dissident
leaders Kim Dae Jung and Kim Young Sam, has proven a powerful
magnet, attracting a wide range of opposition figures.
-- The government-manipulated opposition party has merged
with the NKDP. The enlarged party can claim to speak
for half the voters, although the ruling party retains
its parliamentary majority.
The parliamentary session of the National Assembly that will
open next week will be a litmus test of prospects for political
stability during the next few months.
-- We do not expect the opposition to seek an early
confrontation over its demands for direct presidential
elections and other fundamental reforms.
-- The government appears reluctant to compromise even on
the opposition's minimum demands, however, risking an
This memora mum was prepared by
Korea Branch, Office of East Asian Ana ysis
85-10080
i 25X1
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I I
Campus protests have been less heated this semester than
last fall, but this could change in coming weeks.
-- Chun's visit -- coinciding with the 25th anniversary of
the Student Revolution in 1960 -- will be an occasion
for protests against US support for Chun.
-- The greatest potential for unrest will occur around the
18-27 May anniversary of the Army's harsh su ression of
anti-Chun rioters in Kwangju in 1980. ~ 25X1
If these protests involve major violence and, in particular,
. ..require use of the Army to control them, we would anticipate an
intensification of the dissatisfaction that the military already
has with Chun.
-- The Army is concerned above all with maintaining an
atmosphere of domestic stability without having to
resort to ruthless suppression of demonstrators.
-- If domestic stability deteriorates sharply, or appears
on the verge of doing so, we would not rule out the
possibility of the Army staging a coup against Chun.
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Central Intelligence Agency
Washington, D. C. 20505
DIRECTORATE OF INTELLIGENCE
18 April 1985
Thailand: The Current Political Scene
Prime Minister Prem is enjoying his strongest political
position since taking office in 1980. An appointed, nonpartisan
prime minister, Prem has now been in office longer than any other
Thai civilian head of government. A challenge by Army Commander
Arthit has been blunted, and Prem retains the support of the
palace, important senior Army officers, and his four-party ruling
coalition. .,~v~
Prem and his coalition
government appear likely to remain in office for at least one
more year.
The opening of Parliament later this month, however, will
signal the beginning of a difficult political season for Prem
that will carry through to late September, when promotions of
senior military officers are published. Prem will be tested in
four main areas:
Economic policy. Austerity measures to back up last
year's currency devaluation and to cut the budget deficit
will offend labor groups, farmers, opposition
politicians, and entrenched economic interests.
Party politics. The opposition Thai Nation Party will
try to use economic issues to bring down Prem's
government and to widen latent rifts within the ruling
parties of the coalition.
-- Arthit. In recently extending Arthit's tenure as army
chief, Prem solved the immediate problem of Arthit's
scheduled retirement in September. Despite assurances
that Arthit will stay out of politics, Prem will have to
keep an eye on him.
-- Military restiveness. Including the military in
government-wide austerity measures will be a challenge;
the Air Force's la uy US F-16s has already stirred
controversy.
is memorandum was prepared by Southeast Asia
25X1
Division, Office of East Asian Analysis. Comments and questions
are welcome and should be addressed to Chief, Southeast Asia
Division, OEA
25X1
25X1
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~ ~
Prem will be helped in meeting these tests by moderate
economic growth--forecast at 5 to 6 percent for this year--that
will undercut some of the unpopularity of his economic policies,
as well as by continuing disunity among opposition politicians.
He will probably change some cabinet ministers to ease
difficulties with coalition dissidents, but the dissidents--
though troublesome--probably lack sufficient power to cause the
coalition's collapse. In addition, Prem's increasing political
confidence bodes well for his ability to surmount these obstacles
and for his rivalry with Arthit. Although Arthit will probably
try to capitalize on any slips by Prem, the Prime Minister's
chances of continuing to outmaneuver him are good.
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Central Intelligence Agency
Washington. D. C.20SOS
DIRECTORATE OF INTELLIGENCE
18 April 1985
Malaysia: Recent Political Developments
According to the US Embassy, Prime Minister Mahathir, in
power since 1981, is gearing up for an early national election
which he would like to call no later than April 1986, a year
before he must dissolve Parliament and turn to the voters for a
new five-year mandate. The timing of elections, however, will
largely depend on the government's ability to limit any
unfavorable political fallout generated by several recent
issues.
-- Crisis in the Malaysian Chinese Association (MCA), the
number-two party in Mahathir's ruling coalition. The
battle for control between two rival factions, now over a
year old, .has heated up again as the two-month-old
compromise agreement has foundered, according to the US
Embassy. Unless the MCA gets its act together, the
coalition's image of racial unity will be further
tarnished and support for the Chinese opposition party
may grow..
-- Financial scandal involving the government-owned Bank
Bumiputra. Kuala Lumpur's slowness in investigating the
affair has fueled speculation of a government coverup and
damaged the political standing of the Mahathir
administration, which was elected under a banner of clean
government. The ongoing investigation of six bank
officials accused of corruption could uncover further
evidence unfavorable to the Mahathir administration
1X1
-- Stepped up challenge from the opposition Islamic party,
Parti Islam Sa-Malaysia (PAS), which is the only serious
competition for the Malay vote for Mahathir's United
Malays National Organization Party. Over the past year,
PAS has put the government on the defensive by
criticizing its Islamic credentials. Kuala Lumpur is
hampered from pushing harder on Islamization,
This memorandum was prepared by Southeast
25X1
Asia Division, Office of East Asian Analysis. Comments and
questions are welcome and should be addressed to Chief, Southeast
Asia Division, OEA
25X1
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I I
however, by the need to retain political support of
Malaysia's large non-Muslim community--the Chinese and
Indians that together account for 45 percent of the
-- Heightened communal tension. The Mahathir
administration's image among the large ethnic Chinese
community has been damaged by its mishandling of several
issues, particularly Kuala Lumpur's plan--shelved earlier
this year--to develop land where a Chinese cemetery is
located. The Chinese are also concerned that the
government may put more economic restrictions on them in
an attempt to meet the targets of its pro-Malay economic
program--embodied in the New Economic Policy--by the 1990
J.., Jl ..-__
Mahathir almost certainly will not call elections until the
MCA's political wounds are healed. At the same time, he has
several things on his side to carry him through this difficult
period. The government can prevent any unfavorable disclosures
regarding the Bank Bumiputra scandal from becoming public. Also,
good economic growth, which is expected to continue at about 6
percent this year, will enable the government to deliver on its
economic promises, undercutting the appeal of PAS and taking some
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? Central Intelligence Agency
DI RECI'~tATB OF INTSLL I Ci@iCE
18 April 1985
Indonesia: Recent Developments and Near-Term Outlook
Terrorist incidents since antigovernment rioting last
September reflect growing political opposition to some regime
policies, but- pose no immediate threat to political stability.
President Soeharto remains the unchallenged leader with the full
support of the military and shows no sign of retiring when his
term expires in 1988. His ruling circle is well equipped to cope
with the current strains. He has created a powerful presidential
rule with military officers loyal to him placed in strategic
positions throughout the military and civilian bureaucracy.
Although the Constitution provides for Vice President Umar
Wirahadikusumah to succeed should Soeharto depart the scene
unexpectedly, there is thus far no clear successor. Soeharto's
most powerful deputy, Armed Forces Commander Murdani, a
Christian, is unlikely to succeed as president in this
predominantly Muslim country. State Secretary Sudharmono
dominates the civil bureaucracy, but has no independent power
base. The senior military leadership will have the deciding vote
in approving any successor, who will probably come from their
ranks. -
The recent rash of disturbances--bombings, fires, and bomb
threats against such targets as Chinese-owned banks, department
stores, a Christian church and seminary, and even the nation's
most revered cultural monument, the ancient Buddhist temple at
Borobudur--has increased tensions. The attacks reflect
resentment of the regime's anti-Islamic stance as well as social
discontent over economic hardship and inequities. Antigovernment
This memorandum was prepared by Islands Branch,
Southeast Asia Division, Office of East.As an Analysis. Comments
and questions are welcome and should be addressed to ChieY
Southeast Asia Division, OEA
25X1
25X1
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pamphleteering and speeches are also sharply critical of the
elite's ties--particularly Soeharto's--to the Chinese business
community. Several bombing incidents have clearly been symbolic
attacks on the government, apparently by radical Muslim fringe
groups.
Terrorist incidents are likely to recur in response to the
regime's authoritarian approach to political opposition,
particularly in the face of continued economic hardship and the
wide income gap between the elite and the masses. A serious
incident during the Bandung Conference on 24-25 April could
damage Jakarta's international prestige.
The regime will continue its hardline approach to domestic
disorder. Measures include the sharp crackdown by security
forces against rioters and suspected terrorists and the recently-
renewed campaign of extralegal killing of criminal suspects. The
government shows no sign of easing its efforts to check political
Islam by imposing the secular state ideology, Pancasila, on all
religious and political groups.
Authorities have sought to allay the fears of moderate
Muslim leaders that Jakarta contemplates a widespread crackdown
against the Muslim community. Military officials are assuring
Islamic leaders the government considers the terrorist incidents
the work of small extremist groups.
Those among the intelligentsia, middle-class, and moderate
Islamic mainstream opposed to government policies lack
organization and leadership. The heads of the two ostensibly
independent political parties are controlled by the government as
is the hierarchy of the single national labor federation. Campus
political activity is forbidden and students generally are
apathetic. Authorities closely monitor the activities of known
groups that might criticize the government.
2
OONFIDENTIAL
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Central Intelligence Agency
Washington. D. C 20505
DI RECI'~TB OF INTELL I GSNCB
18 April 1985
The Philippines: Current Political Developments
President Marcos's health is showing marked improvement
since his illness last winter. Several recent moves suggest that
he now believes he is more capable of managing political events
in Manila than at any time since his seclusion.
-- Marcos vowed publicly last February to reinstate
General Ver as Armed Forces Chief of Staff if he is
acquitted of charges that he was involved in the
assassination of Benigno Aquino--a likely prospect.
This move almost certainly will entail substantial
domestic and international political costs for
Marcos.
-- Marcos also fired independent-minded Foreign Minister
Tolentino and publicly chastised outspoken Labor
Minister Blas Ople last month, probably in an effort
to tighten discipline in the ruling party and dampen
speculation about an early presidential election.
Despite Marcos's renewed vigor, his long-term health
prospects remain poor--a circumstance that has ensured continued
succession maneuvering among ruling party and opposition
politicians.
This memorandum was prepared by Islands 25X1
Branch, Southeast Asia Division, Office o ast Asian Analysis.
Garments and uestions are welcome and should be addressed to 25X1
Chief, Southeast Asia Division, OEA 25X1
25X1
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-- Mrs. Marcos has been travelling extensively overseas
and in-country to improve her leadership image and
reportedly is trying to line up support among ruling
party stalwarts for her candidacy.
-- Defense Minister Enrile intends to challenge Mrs.
Marcos for the nomination and is using his position
to garner support for his candidacy within the
military.
-- Opposition leaders held a national conference last
month to select a presidential candidate in case
early elections are called but no nominee emerged.
Recent rifts within the leadership of several major
parties will now make it even more difficult for the
opposition to reach a consensus.
Impressive political and military gains over the past two
years by the Communist Party and its military wing, the New
People's Army, underscore its growing influence nationwide. The
Philippine government estimates that the insurgency has grown 23
percent annually since 1981 and now has approximately 16,000
full-time insurgents. The NPA is also demonstrating increasingly
sophisticated military capabilities, including frequent company-
size attacks and a well-organized urban warfare structure poised
for future attacks in Manila.
Marcos apparently is still unwilling to make major reforms
in_the military--a prerequiste to substantial improvements in the
the root causes o the insurgency go deeper than an ineffective
and abusive military and will require a coordinated effort on the
part of both civilian and military agencies to stem the growth of
the NPA.
The impending return of Ver as Armed Forces Chief has also
aggravated long-simmering discontent
/ This was underscored
recently when alumni from the Philippine Military Academy carried
placards calling for reforms during an address given by Marcos
before this year's graduating class. The reform movement
probably will gain momentum because Marcos is not likely to bow
to reformist pressures from within or outside the military.
Continued gains by the insurgents are also likely to foster
discontent within the middle-level and junior officer ranks.
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