NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029200010002-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: August 9, 2005
• Sequence Number: 2
• Publication Date: August 2, 1976
• Content Type: REPORT

OF AW AW AW AMV AW AAIV ,AW AAW AAW AAF
-ApDrW-4ffArR
e lease 2006/03/17
TO:
NAME AND AD ESS
DATE
INITIALS
1
2
3
4
ACTION
DIRECT REPLY
PREPARE REPLY
APPROVAL
DISPATCH
RECOMMENDATION
COMMENT
FILE
RETURN
CONCURRENCE
INFORMATION
SIGNATURE
REMARKS:
FROM:
NAME, ADDRESS, AND PHONE NO.
DATE
(Security Classification)
1
2.33
State Department review completed
1
Access to this document will be restricted to
those approved for the following specific activities:
Monday August 2, 1976 C1 NIDC 76-179C
w
0
0
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
1
1
1
1
1
Top Secret 25X1 0
(Security Classification)
Approved For Release 2006/03/17 : CIA-RDP79T00975A02 200010 -
A1111W 'Adw AAW IAW 'Aw Awr 'Aw Adw Adw AJ
CIA-RDP79T00975A029200?f42gecret
 25X1 Approved For Release 2006/03/17 : CIA-RDP79T00975AO29200010002-5
Approved For Release 2006/03/17 : CIA-RDP79T00975AO29200010002-5
 Approved For Fjelease 2006/03/17 : CIA-RDP79T00971
National Intelligence Daily Cable for Monday, August 2, 1976.
T e NID Cable is for the purpose of informing
senior o icials.
25X1
BRAZIL: Trade Deficit Declining
Approved For Pelease 2006/03/17 : CIA-RDP79T0097*029200010002-5
 25X1 Approved For Release 2006/03/17 : CIA-RDP79T00975AO29200010002-5
Next 1 Page(s) In Document Exempt
Approved For Release 2006/03/17 : CIA-RDP79T00975AO29200010002-5
 Approved For RO
The designation of Major General Abd Ar-Rahman
K u ay awi as Syria's new prime minister to replace Mahmud
al-Ayyubi who resigned, reflects President Asad's confidence
in his domestic position and his policies, especially toward
Lebanon.
I I Ayyubi offered to resign after losing his top party
post in intraparty elections last year. Asad believed, however,
that an effort to unseat Ayyubi was directed at curtailing his
own power, and he refused to replace Ayyubi in order to avoid
any appearance of giving in to internal pressures.
With Syrian troops entrenched in Lebanon and a Syr-
ian-Palestinian accord reached, Asad apparently believes that
his position is strong enough to go ahead with the cabinet
change. No other cabinet appointments have been announced, but
many key ministers are likely to retain their positions in
order to underscore Asad's intention to continue his present
policies.
Khulayfawi is a long time confidant of President Asad.
He was one of Asad's key supporters when Asad took power in
1970, and he served as minister of interior and prime minister
until ill health forced him to resign in late 1.972. Well re-
garded in both party and military circles, Khulayfawi is a
strong, effective, pragmatic administrator.
I I Like Ayyubi, Khulayfawi is from a prominent Damascus
ami y and is a member of Syria's Sunni orthodox Muslim major-
ity. His selection preserves the regional and confessional bal-
ance in Asad's regime. Asad and many of his supporters in the
army belong to a small Muslim sect from Syria's coastal region.
Asad may also have appointed Khulayfawi as prime minister to
strengthen support for the government within the military.
Approved For Release 2006/03/17 : CIA-RDP79T00975P 029200010002-5
 Approved For elease 2006/03/17: CIA-RDP79T00
//We do not think that recently noted Chinese and
Soviet activities in the small island states of the Southwest
Pacific are a portent of a significantly increased presence
there. Nevertheless the interest in the area of both countries
can be expected to continue as additional island dependencies
achieve nationhood over the next several years.//
I //Recently increased activity is small scale and
consistent with the desire of both countries to expand their
world-wide presence and influence by traditional means of dip-
lomatic relations, trade, and aid.//
//The USSR has a strong interest in expanding
fishing operations wherever it can. We believe this would be
a major motivating factor of any further increase in Soviet
activity in the area.//
//The USSR has not shown a naval interest in the
area. To be sure, there is a long-range Soviet interest in US
lines of communication with its allies, including Australia
and New Zealand. But we do not anticipate that this interest
will lead the USSR to increase its naval presence in the
Southwest Pacific in the near future.//
//In this area, as in others, Moscow-Peking
rivalry is an element in stimulating the interest of both.
Peking's concerns are particularly heightened by its broader
anxieties over growing Soviet naval strength in the Pacific.
Peking's rivalry with Taiwan also stimulates its interest in
diplomatic relations.//
Approved For Wlease 2006/03/17 : CIA-RDP79T00971AO29200010002-5
 Approved For R4
25X1 //The small island states have been extremely
cautious in their dealings with Moscow and Peking and are
likely to remain so.
Approved For Rel*ase 2006/03/17 : CIA-RDP79T00975A0;9200010002-5
 Approved Foil
The West German government is supporting development
of new industries in labor-surplus countries such as Turkey and
Yugoslavia to encourage foreign workers to return home.
Approved Fort
 Approved Fort
Release 2006/03/17 : CIA-RDP79T00975 029200010002-5
According to the German press, Bonn hopes soon to
have the program ready to be announced publicly. Its principal
feature will be an investment fund to provide capital for the
creation of the new enterprises. The projected fund will be
supported by:
--Contributions of about $1.2 billion annually from the
West German development aid budget.
--Savings deposited in German banks by foreign workers.
--Possibly, credits provided by the governments of the
labor-exporting countries.
I West German officials reportedly plan soon to discuss
the details with Turkey and Yugoslavia--the two countries that
supply half the foreign laborers in West Germany.
The concept of establishing new industries in south-
ern European countries is not new. West German and Yugoslav
officials have discussed for several years the idea of utiliz-
ing foreign workers' savings for this purpose. Minister for
Economic Cooperation Bahr got a favorable response when he
raised the idea with the Turks last March.
I I Bonn has clearly decided to reduce the number of
foreign laborers in West Germany, although the recession has
already led to a decline from about 2.6 million in late 1973 to
about 1.9 million today. Officials in the labor-supplying coun-
tries will probably endorse the investment program but some,
particularly the Turks, will be disturbed at Bonn's desire to
limit access to its labor market.
Ankara has been seeking EC agreement on freer move-
ment for Turkish workers as part of a larger package improving
the terms of its associate membership in the Community. 25X1
Approved For Release 2006/03/17 : CIA-RDP79T0097
 25X1 Approved For Release 2006/03/17 : CIA-RDP79T00975AO29200010002-5
Approved For Release 2006/03/17 : CIA-RDP79T00975AO29200010002-5
 Approved For Release 2006/03/17 : CIA-RDP79T00975AO
//EC foreign ministers this week agreed to adopt
a common stand at the Law of the Sea negotiations, which open
today in New York. The Community has made considerable prog-
ress in working out common positions on some Law of the Sea
issues, but major problems must still be resolved.//
//The Nine will seek a clause which would allow
regional economic groups such as the EC to become parties to
the convention. The Nine also have adopted common positions
on the creation of an international seabed authority in which
the EC would participate and on a mechanism for the settlement
of disputes.//
0 /
/The EC generally supports giving littoral states
mineral jurisdiction over that part of the continental shelf
which extends beyond 200 nautical miles. The Irish and the UK,
however, are holding out against sharing the benefits from
the exploitation of such mineral resources among all states.//
//The Community is also divided over the question
o preventing monopolistic exploitation of the seabed. Bonn--
anticipating that this will be an issue in the federal election
campaign--is likely to push strongly for non-discriminatory
access to deep seabed resources as well as against restrictions
on scientific marine research.//
Approved For Release 2006/03/17 : CIA-RDP79T00975A0g9200010002-5
 Approved For
I //The foreign ministers also announced agreement
in principle to create a fishing zone extending 200 miles from
the territory of the member states.//
//The UK has been pushing hard for this decision.
London fears that foreign fishermen--particularly Soviet--will
converge on Community waters when the US, Norway, and Canada,
following Iceland's example, unilaterally establish a 200-mile
fishing zone early next year.//
//The Nine, responding in part to West German,
Dutch, an talian resistance to taking action before the
question had been resolved at the UN talks, agreed to delay
issuing a formal declaration until after this session concludes
in September.//
//The declaration raises many additional problems
tor the Community, however, including negotiating reciprocal
fishing rights with third countries. The Commission has already
begun to sound out several countries--Iceland, Norway, Canada
and the US--on fishing rights.//
//The question of Community prerogatives is likely
to arise once negotiations formally begin. The Soviets, for
example, will presumably insist on maintaining fishing rights
in EC waters, but have shown no willingness to deal directly
with the Community.
In an unusually positive but low-key gesture in late
July, an East German friendship society presented an unexpected
Approved ForiRelease 2006/03/17 : CIA-RDP79T00975Ag29200010002-5
 Approved For Release 2006/03/17 : CIA-RDP79T0097~
US bicentennial program. Invitations to the event were received
only three days in advance, and several East German officials
appeared to go out of their way to obtain assurances that
Ambassador Cooper would attend.
The program, which included a surprisingly objective
overview of US history, was well covered by East German tele-
vision and press.
The US embassy believes that this gesture--in contrast
wi the -pro forma coverage of the embassy's bicentennial re-
ception--was intended to demonstrate the Honecker leadership's
interest in a further improvement in bilateral relations.
I I The East German interest was also evident in East Ger-
man assador Sieber's talks with State Department officials
prior to his return for home leave and consultation. Sieber
tried hard to make some progress on trade and fisheries issues.
Negotiations on a consular agreement are at an impasse because
of East German insistence that their existence as a sovereign
state be specifically spelled out in any consular agreement.
Approved For Release 2006/03/17 : CIA-RDP79T009715AO29200010002-5
 Approved For RO
BRAZIL: Trade Deficit Declining
I Brazil's efforts to slash its trade deficit are mak-
ing ea way.
The deficit fell to $1.3 billion during the first six
months of 1976, compared with $1.8 billion in the same period
last year. Exports should increase about 16 percent in the sec-
ond half of 1976. It was 5 percent in the first half, for an
overall 11 percent for the year. The trade deficit for the year
as a whole should be 60 percent lower than last year.
Approved For R~Iease 2006/03/17 : CIA-RDP79T009754 029200010002-5 25X1
 Approved For Release 2006/03/17 : CIA-RDP79T00975
Despite rising interest payments on foreign debt,
e improvement in the trade balance is likely to reduce the
current-account deficit to $5 billion for the year--down nearly
$2 billion from 1975.
I I After a slow first quarter--caused by reduced sugar
sa es, J e result of lower world prices and the July 1975
frost--export earnings are picking up rapidly this year. For-
eign sales in June climbed to $1 billion, the highest monthly
total ever accumulated.
I I A record value of coffee exports made up nearly one
it o the total. Sharply rising world coffee prices contrib-
uted to the jump. Increased soybean prices and a decision to
discontinue at the end of June tax incentives designed to pro-
mote soybean exports also were factors in Brazil's record June
trade performance.
Stringent import controls also are an important fac-
tor in the trade improvement. Government organizations, which
account for nearly half of all imports, have been ordered to
cut purchases abroad by 25 percent in 1976, and the requirement
for a non-interest-bearing advance deposit with the Central
Bank equivalent to the value of an import has been expanded to
cover nearly one third of Brazil's imports.
Overall import: volume, already down about 4 percent
in the' first six months, is unlikely to exceed 90 percent of
the 1975 level.
Record harvests for some crops and a revival of in-
dustrial output prompted by strengthened consumer demand in the
first half of the year should raise Brazil's real economic
growth rate slightly--to 5 percent--in 1976 despite.import re-
strictions. This recovery still leaves the country well below
the 10 percent averaged annually during the 1968-1974 boom
period.
Approved ForlRelease 2006/03/17 : CIA-RDP79T00975A~029200010002-5
 AMr Ad pproveu rur Rel 06/UOWCIA- 00 20 5 Agw Aiw
To Secret
(Security Classification)
Top Secret
gyred- For Release 2006/03/17 : CIA-RDP79T00975AO29200010002-5
(Security lassification)
J