NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029100010050-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: June 12, 2012
• Sequence Number: 50
• Publication Date: July 30, 1976
• Content Type: REPORT

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Friday July 30 , 19 76 CI NIDC 76--178C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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National Intelligence Daily Cable for Friday, July 30 1976.
The NID Cable is for t o purpose o in orming
LEBANON: Situation Report
JAPAN: Lockheed
KENYA-UGANDA: Relations
CUBA: US Trade
ITALY: New Cabinet
THAILAND: Phichai's Trip
CHINA: Refuses Tin Council
GREECE-TURKEY: Aegean
MBFR-FRANCE: Force Data
ITALY: Monetary Reserves
POLAND: Meat Prices
USSR-ROMANIA: Soviet Economic Aid
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LEBANON: Situation Report
but PLO chairman Yasir Arafat, according to an Egyptian news
service, said that he had not yet approved the document.
eign minister Khaddam and Palestine Liberation Organi zati-i r_e-:~p-
resentative Qaddumi had signed the Syrian-Palestinian accord,
Damascus Raido announced last night that Syrian For.-
ulating Palestinian activities in Lebanon, and the opening of
roundtable negotiations among the Lebanese under president-elect
Sarkis.
cease-fire within 10 days, adherence to the Cairo agreement reg-
The accord, according to Damascus Radio, calls tor a
The provision for restricting Palestinian activ-
ity in Lebanon presumably is one of the main bones of contention
between Arafat and the Syrians.
Qaddumi was supposed to have obtained Ara-
fat's final approval for an accord with the Syrians, and Libyan
Prime Minister Jallud said on Wednesday that he hoped Arafat
himself would go to Damascus to sign the agreement.
//The agreement, as announced, contains no pro-
vision for Syrian withdrawal from Lebanon but the Syrians may
have promised Qaddumi that they would withdraw from Sawfar on
the Beirut Damascus highway.
Although Syria has several times before promised to
wit raw from Sawfar and failed to follow through, Damascus now
might calculate that Christian forces advancing from the north
could effectively control the area.
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In Beirut, Christian forces renewed attacks on
the Shia Muslim district of Nabaa early yesterday after a lull
of several days. //Presumably to relieve pressure on Nabaa,
leftist and Palestinian forces launched an attack into the Chris-
tian district of Ayn Rummanah.
edly urged that the evacuation be allowed to proceed, and the
Syrian pressure has apparently induced Interior Minister Shamun
refused to guarantee a cease-fire. //Syria, however, has report- 25X1
from Tall Zatar was postponed yesterday because Shamunist forces
The scheduled Red Cross evacuation of wounded
today.
evacuation and would arrange the details in a series of meetings
Shamun announced yesterday that he had agreed to the
Party, Yasuhiro Nakasone, may be the next major political fig-
ure to be implicated in the Lockheed affair.
Secretary general of the ruling Liberal Democratic
was listed in the Lockheed-related data given by the US to Jap-
anese prosecutors.
erupted in February, partly because he occupied a key position
in the government of former prime minister Tanaka. A major Jap-
anese daily newspaper reported yesterday that Nakasone's name
Nakasone has been linked to the scandal since it first
Miki with a potentially far more serious problem than Tanaka's
arrest. Nakasone is Miki's single major political ally and was
appointed to his party post by Miki. If Nakasone is not named
Nakasone's involvement would present Prime Minister
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by the prosecutors, suspicion will build that a cover up is un-
der way. Nakasone's arrest, on the other hand, would generate
strong--perhaps overwhelming--pressures for Miki's resignation.
'/Despite Japanese press speculation to the
sign if one of his party officers or cabinet members were impli-
cated. He is publicly building a case for remaining in office by
closely associating himself with the need for thorough party re-
form--a theme now being echoed throughout the Japanese political
establishment.
contrary, Minot committed himself on whether he would re-
The outcome of the investigation could substantially
alter these calculations, and at this point, a potentially ex-
plosive clash between Miki and his opponents is in the making.
//Despite a flurry of mediation efforts, there
has been little change in the Kenya-Uganda dispute since earlier
in the week.
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//The concession on kerosene and Foreign Min-
ister Waiya i s p
week reportedly were aimed at forestalling criticism of Nairobi
by other Africans, especially after Amin's call for an OAU inves-
tigation of the dispute.//
k tout ublic defense of Kenya's position this
OAU Secretary General Eteki held discussions with Ken-
yatta and other Kenyan officials yesterday and he may be going
on to Kampala. The Mauritian Foreign Minister is also attempting
to mediate, apparently under the auspices of Mauritian Prime
Minister Ramgoolam, the current OAU chairman.
iatory steps against the 200-300 remaining Britons in Uganda
following London's diplomatic break this week. The Ugandan
leader has said, however, that he is no longer obliged to com-
pensate several thousand British Asians who lost property when
he expelled them from Uganda in 1972.
Amin so far appears not to have taken any major retal-
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Among the key assignments are:
--Foreign affairs to outgoing defense minister Forlani.
--Defense to Vito Lattanzio, who has served as defense
undersecretary in several previous governments.
A substantial share of Cuba's trade with non-Commu-
nist countries has gone to US subsidiaries since the partial
lifting of the US embargo in August 1975.
In the past 10 months, Cuba has awarded foreign sub-
of US companies sales contracts totalin
$293
il
g
m
-
lion--the equivalent of one fifth of Cuba's estimated non-Com-
munist imports in 1975. About 60 percent of the sales have in-
volved agricultural commodities.
sidiaries
about $2-million worth of tobacco and molasses.
Some 85 percent of the business went to US
b
id
su
s
-
daries located in countries such as Canada and Argentina that
are already among Cuba's larger trading partners. Purchases
from Cuba by US subsidiaries thus far have been limited to
ITALY: New Cabinet
Italian prime minister - designate Andre
tti's
h
o
C
ris-
tian Democratic minority government that he submitted to Pres-
ident Leone yesterday contains several new faces and some tech-
nocrats, suggesting an attempt to create a fresh image for his
party.
prime
In a departure from tradition
there are no form
,
er
ministers in the cabinet with the exception of Andreotti.
The most conspicuous absentees are out
oi
i
g
ng pr
me
minister Moro and former prime ministers Rumor and Colombo,
who held the foreign affairs and treasury portfolios in the
previous government. The exclusion of Colombo seems designed
to appeal to the Socialists and Communists, who blame him for
many of Italy's economic problems.
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--Treasury to Gaetano Stammati, an independent banker who
was finance minister in the last government.
--Finance to Filippo Pandolfi, who moves up from being
deputy minister.
--Foreign trade to Rinaldo Ossola, who recently announced
his resignation as director of the Bank of Italy.
--Labor to Tina Anselmi--Italy's first woman cabinet min-
ister--who has been active in the Italian women's movement
and in Christian Democratic labor and youth affairs.
today and it will face its first confidence vote next Wednesday
in the Senate. The confidence vote in the Chamber of Deputies
will be held the following week.
President Leone will swear in Andreotti's government
gram prior to the confidence votes.
abstain, party leaders said yesterday that they would not an-
nounce an official decision until Andreotti presents his pro-
to survive the confidence vote. Although they are expected to
The government will need abstention by the Communists
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THAILAND: Phichai's Trip
countries beginning this weekend.
ations with Laos and Vietnam during his visits to the two
Thai Foreign Minister Phichai hopes to normalize re-
border clashes between Thailand and Laos that followed the com-
munist take-over in Laos last year. Bangkok's closure of the
border, except for one entry point, has severely strained the
Laotian economy. The Lao view the border closure as the major
obstacle to better relations.
Phichai wants to end the mutual recrimination and
movement of goods and people across the border. Phichai appar-
ently is prepared eventually to open additional points of entry
near major commercial centers. Another problem, less likely to
be resolved, is Thai army support for Laotian resistance ac-
tivities.
insurgents and is reluctant to drop all restrictions on the
Bangkok is concerned about Laotian support to Thai
are concerned by Phichai's eagerness to establish relations
with Hanoi. They blame the foreign ministry for the departure
of all US troops and believe that Thailand has alienated its
staunchest ally in exchange for an improvement in relations
with Indochinese communist regimes that actively support Thai
insurgents in the north and norteast. The police roundup of
Vietnamese refugees in Bangkok on the eve of Phichai's trip is
already being interpreted by the Bangkok press as an attempt by
some rightists to sabotage the talks in Hanoi.
Conservative Thai politicians and military officers
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25X1 The Vietnamese thus far have not insisted that Thai-
land return aircraft flown out of Saigon last year as a precon-
dition to the establishment of diplomatic ties. Talks between
the two sides broke down last year over this issue, and should
it continue to be a sticking point, conservative opposition,
particularly within the Thai military, could probably sidetrack
the negotiations. If the Vietnamese are willing to ignore this
issue, the Thai conservatives probably would not stand in the
way of opening relations.
25X1 Moreover, Phichai would encounter even less conser-
'
s inten-
vative opposition if he can obtain some sign of Hanoi
tion in principle to repatriate some, if not all, of the Viet-
namese refugees that have been living in Thailand since the
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CHINA: Refuses Tin Council 25X1
Peking has informed the 30-member International Tin 25X1
Council that China will not
participate in the five-year international agreement that be-
came effective on July 1, 1976. Although not a surprise, China's
announcement undoubtedly was a disappointment to such major pro-
ducers as Malaysia who were seeking China's membership and
hoping to gain some influence over Peking's tin exports.
Last year's exceptionally heavy selling by China ran 25X1
counter to Council efforts to restrain tin supplies and arrest
falling prices. China produces 8 percent of world tin output.
If Peking joined, the Council would account for well over nine
tenths of world tin production.
GREECE-TURKEY: Aegean
ing to a Turkish radio broadcast. The naval escort seems pri-
marily intended to counter domestic criticism that the Demirel
government is not pressing its Aegean claims forcefully enough,
although it also serves as a warning to the Greeks.
9
the Aegean Sea yesterday accompanied by a naval escort, accord-
The Turkish seismic research ship Sismik I entered
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that the ship will spend about ten days in Turkish territorial
waters, surveying in and around Saros Bay before entering inter-
national waters near the Greek island of Samothrace, where it
will operate until August 20. The extended stay of the Sismik
I in Turkish territorial waters gives Turkey and Greece an op-
portunity to resume the negotiations that were broken off last
week.//
//A Turkish official informed the US embass
avoid a confrontation, they appear equally determined to avoid
//Although both governments seem anxious to
any moves that could weaken their claims in the Aegean or leave
them vulnerable to attacks by domestic political opponents. The
Caramanlis' government in Athens must also cope with the Greek
military, which still is angry over the losses it suffered at
the hands of the Turks on Cyprus,
the conditions for safe passage of the ship. Tensions are likely
to increase if there are no new talks or if they fail and the
Sismik sails into disputed waters with a naval escort.//
activities of the Sismik I may be difficult despite the rela-
tively narrow differences still separating the two sides on
/Settlement of the controversy over the
to the Sismik's appearance in the Aegean by calling off the
latest round of talks on Aegean air space rights set to be
held this week in Paris and by stepping up efforts to monitor
the Sismik's movements. According to the US defense attache in
Athens, all Greek submarines put out to sea yesterday, and there
are press reports that some units of the Greek navy are en route
to patrol near the Greek islands off the Turkish coast
//For the time being, the Greeks have res onded
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at the Vienna force reduction talks.//
eir decision not to include French forces in Western figures
//The French have provided some insight into
have long been concerned that the Western concept of collective
reduction commitments over a given geographical area would im-
pinge on France's ability to deploy its own forces.//
//Much of the French rationale is not new. They
forces in the Western data would undermine the French position
of exempting their forces from any collective commitment.//
//In the French view, inclusion of their
tions in overall European armaments as an additional threat
to their flexibility that reinforces their desire to avoid
including the French forces in Western figures.//
//French officials now cite possible reduc-
withdrawal of some US nuclear elements in its negotiating
package was a one-time offer, the French believe that--in the
long run--an MBFR agreement will include a collective limit
for the Allies on nuclear armaments of the type reduced by the
US.//
//Although the Allied offer to include the
grounds that not only is it bad in itself but it also could
be an obstacle to introducing French nuclear armaments into
West Germany at some future time.//
//They object to such a restriction on the
French forces in Western figures resulted from a conjunction
of events. On the one hand, they share the Allied view that
the negotiations may enter a more active phase now that the
Soviets have tabled force data.//
//The French say their decision not to include
intended to counter recent Soviet pressure on France to partic-
ipate in the Vienna negotiations and to show more receptivity
to Soviet disarmament initiatives.//
//Additionally, they imply that their move is
forces may thus be intended as an attempt by Paris to ensure
its freedom of action regarding its deterrent force.//
//The French decision to withhold data on
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exempted from a common ceiling--the Soviets might be allowed
to compensate for any increase in French forces by increasing
the size of their own. The Allies are resisting this proposal.//
//Paris has proposed that--with French forces
it because they fear that any arrangement singling out French
forces will make it difficult to resist Soviet demands for
limitations on their own forces, are particularly unhappy with
//The West Germans, who want to avoid unique
national reduction commitments.
ITALY: Monetary Reserves
drawn on its swap facility with the Federal Reserve Bank of New
York.
since the 'June elections, Italy has increased its foreign cur-
rency reserves by $1.12 billion through lira sales. In addition,
the sales have enabled Italy to repay all of the $500 million
Treasury Minister Colombo reported yesterday that
appear to be the Christian Democrats' retention of a plurality
in last month's general election, the prior deposit scheme, and
the normal influx of summer tourists. An expected extension of
the amnesty permitting the return of capital illegally exported
is also likely to encourage the return of funds.
Major factors influencing the increase in reserves
percent non-interest-bearing deposit on most foreign purchases,
has been extended three months. The high interest rates in Italy
have also helped the lira.
stabilized the exchange rate. The scheme, which requires a 50-
The import deposit plan has absorbed liquidity and
the reserve increases has kept the lira, which closed at 835.3
to the dollar yesterday, remarkably stable since the elections.
In the last week, the Italian currency has not varied by more
than one lira from the 834.5 to the dollar rate; nor has it
varied from the 835 to 840 range since the beginning of July.
Italian authorities have intervened in order to obtain reserves
and to avoid greater lira appreciation that could hurt exports.
The exchange market intervention that has accompanied
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lion gold-backed credit granted by West Germany is due in Sep-
tember. While no decision on repayment has been made, Italy may
pay back $200 to $500 million in order to make it easier to
renegotiate the loan and to avoid having to pledge more of its
gold reserves as collateral to counter the fall in gold prices.
A plan under which all or part of the loan could be renegotiated
will not be discussed until an Italian government has been
formed.
The lira still faces an uncertain future. The $2 bil-
ment, as well as by the high rate of inflation. Italy's con-
sumer price inflation, currently at a 20-22 percent annual rate,
is more than double the average rate of its major trading part-
over the-durability and economic programs of the next govern-
The lira's prospects will be clouded by uncertainties
ners.
on Wednesday that Warsaw will not raise meat prices this year.
Prime Minister Jaroszewicz proposed two weeks ago a compromise
price package in which meat prices would go up 35 percent this
year while other food prices would remain unchanged.
A top Polish party official told the US ambassador
increases shows the regime's lack of resolution and fear of the
Polish consumer since the June riots. It confirms an earlier
report that the disorders had caused depression, defensiveness,
and loss of self-confidence in the leadership.//
//This new postponement of badly needed price
wi ur the economy. He said that meat exports, a good source
of hard currency, have been cut. He said that Poland will have
to import approximately 100 thousand tons of meat this year,
adding that some of this would come from China.
The party official admitted that the postponement
The official indicated that Poland expects to import
because of its own poor harvest.
considerable quantities of wheat from the USSR and some from
the US. The USSR normally ships 1 to 2 million tons of grain
to Poland each year, but last August Moscow suspended shipments
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the new president of the local government. Ali Aref Bourhan, the
former president, resigned two weeks ago after losing the sup-
port of a majority of the assembly's members.
the Atars and Issas yesterday elected Abdella Khamil Mohamed as
The legislative assembly of the French Territory of
ritory's governing council until recently under Ali Aref, was
elected by only 24 of the assembly's 40 deputies. According to
press reports, the others walked out in protest over Khamil's
nomination.
Khamil, an Afar who has been the secretary of the ter-
litical party, but they may believe Khamil is too closely iden-
tified with the policies of the discredited Aref. Khamil's lack
of support is apparently not related to the traditional animos-
ity between the territory's two major ethnic groups, the Afars
and the Issas.
Most of them are Afars and members of Khamil's own po-
cates France still faces serious obstacles in its efforts to
form a government of national unity to lead the FTAI to indepen-
dence. A referendum on independence will probably be held in
March.
The divisiveness demcnstrated in the assembly indi-
an the election of a new leader as the first steps toward the
creation of a broad-based coalition government that Paris be-
lieves is necessary to withstand pressure from Somalia aided
1
France viewed the resignation of the unpopular Aref
1
by its supporters in the territory, to incorporate the
territory.
USSR-ROMANIA: Soviet Economic Aid
may be asking the Soviets for more economic support, particu-
larly supplies of crude oil and other raw materials. If the So-
viets ignore the requests, the surface calm that currently marks
Romanian-Soviet relations could be disrupted.
The US embassy in Moscow believes that the Romanians
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for a "better deal" at a recent session of the joint Romanian-
Soviet economic commission in Moscow. Such an overture is con-
sistent with Bucharest's persistent demand that CEMA concentrate
on equalizing the economic development of its members.
The embassy says that the Romanians probably pressed
Moreover, the growth in Romania's domestic consumption of oil
has already outstripped the annual increase in production; in
the past, Moscow has rejected Bucharest's requests for Soviet
crude.
has e the pinch of increased Soviet prices for raw materials.
The Romanian economy, like others in Eastern Europe,
pend heavily on the Soviets to supply these minerals.
The Romanians lack coking coal and iron ore, and de-
to Romania unless it obtains significant political concessions.
There is no evidence that Ceausescu intends to alter his regime's
It is unlikely that Moscow will provide increased aid
independent ways.
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