NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029200010044-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: August 9, 2005
• Sequence Number: 44
• Publication Date: August 26, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday August 26, 1976 CI NIDC 76-201C 0
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions 0
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National. Intelligence Daily Cable for Thursday, August 26, 1976
25X1 I The NID Cable is for the purpose of informing
senior US officials.
KOREA: Situation Report
CHINA: Anti-Teng Economics
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INDIA-USSR: Relations Threatened
EGYPT: Sadat Nominated
JAPAN: Leadership Fight
THAILAND: Defense Minister Resigns
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GREECE-TURKEY: Aegean
FRANCE: New Prime Minister
USSR-LIBYA-EGYPT: Soviet Comment
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KOREA: Situation Report
The North Korean proposal at the meeting of the Mili-
tary Armistice Commission yesterday seems designed to demon-
strate that Pyongyang is seeking a constructive approach to re-
ducing tensions. The North Koreans described their proposal to
separate the security personnel of both sides in the Joint Se-
curity Area as a way to avert further incidents.
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I I According to the North Korean statement, all previous
inci en s were "directly related" to the fact that opposing
military personnel must "stand face to face" or "pass by" the
other side's guard posts.
The North Koreans, in effect, are taking up a pro-
posal or a separation of personnel made by the UN Command in
1953 and again in 1970. At present, the UN Command has no guard
posts in the North Korean portion of the Joint Security Area.
Thus, it appears that it would only require the North Koreans
to pull their guard posts back in order to implement their
proposal.
In addition to creating a favorable impression abroad
of North Korean "reasonableness," the proposal probably is aimed
at deflecting attention from the UN Command's demands for North
Korean assurances that the safety of UN personnel be protected
and that freedom of movement for both sides in the Joint Secu-
rity Area will be respected.
I I Pyongyang may calculate that acceptance by the UN
Command of the proposal could be portrayed as acquiescence in
President Kim I1-song's call last Friday for joint efforts to
prevent a recurrence of the incident of August 18. On the other
hand, the North Koreans may believe that rejection of the pro-
posal by the UN, pending North Korean assurances on the safety
of UN personnel, would leave the UN Command vulnerable to
charges that it was unwilling to accept a reasonable measure
to avert further incidents.
During the meeting yesterday, the North Koreans re-
peatedly turned aside inquiries about the assault last week,
asserting that the subject had been adequately treated in Kim
Il-song's message which termed the incident "regrettable" but
evaded the question of responsibility.
Probably with an eye toward the large press represen-
tation from the West, the North Koreans were on their best be-
havior at the meeting, which was businesslike and devoid of the 25X1
customary communist invective.
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CHINA: Anti-Teng Economics
Economic factors may be working to the advantage of
Peking moderates in their efforts to hold in check the campaign
against former vice premier Teng Hsiao-ping and his supporters.
I IA People's Daily editorial published Monday appears
to reflect a growing concern within the Chinese leadership over
the effects of the campaign on industrial production. It calls
for tighter party control over anti-Teng activities, for more
leniency in dealing with other alleged "capitalist roaders,"
and for an end to factionalism. It is also the first editorial
since early April that has repeated an injunction against form-
ing "fighting groups."
The guidelines in the editorial take the hardest line
against disruptive activities since Teng first came under at-
tack and they may reflect rising moderate influence. While wide-
spread disorders would not seem to be in the interest of the
radical faction, the left has often appeared to condone, if not
encourage, a certain amount of ferment at the grassroots level
as a means of exerting pressure on political opponents.
Campaign-related factionalism and wall poster attacks
on provincial leaders have been evident in a number of places
for some time, particularly in Fukien and Chekiang.
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provincia ea ers wi n c ose moderate con aa n
out of sight for some time have reappeared. In Fukien, the re-
emergence of first party secretary Liao Chih-kao was accompanied
by a high-level provincial party meeting seeking a solution to
the chronic factionalism there.
I I The recent series of earthquakes in China have also
probably worked to the advantage of the moderates. In the wake
of these disasters, moderates are undoubtedly contending that
substantial industrial losses make it even more imperative that
production receive higher priority. This argument seemed to be
tacitly acknowledged in a People's Daily editorial two weeks
ago which warned against using the quake to divert attention
from the anti-Teng campaign.
//In addition, the moderates may now be in a
e er position to defend certain economic policies closely as-
sociated with Tena which are under radical fire.
The pace of whole-plant imports and raw-material ex-
ports has been a major bone of contention in Peking's leader-
ship for some time. In this regard, the fifth Five-Year Plan,
which was scheduled to take effect last Januar , has yet to be
finalized.
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Conservative whites have retained control of the
Namibian branch of South Africa's ruling National Party in an
election held Tuesday, the opening day of the branch party's
annual congress.
I I Moderates in the party, led by Deputy Chairman Dirk
Mudge, had been privately predicting that they would wrest con-
trol from the conservative chairman, A. H. du Plessis. Both
men were re-elected to their posts.
The outcome of the election casts serious doubt on
the future of the plan for Namibian independence released last
week by a committee of the multiracial constitutional confer-
ence. That plan called for an interim government and indepen-
dence by December 31, 1978. It is supported by the white mod-
erates, but is opposed by conservatives who are not reconciled
to losing control of the territory.
I I The US embassy in Pretoria believes that South Afri-
can Prime Minister Vorster privately intervened to see that
the plan was publicized, but he was not willing to see an
open party split. The ambiguities of the plan and the outcome
of the party election can be used by Vorster to reassure Nami-
bia's white settlers that Pretoria will not be stampeded into
precipitate action on the future of the territory. 25X1
A long-standing dispute over exchange rates is threat-
ening to damage the close political relationship between India
and the USSR.
I I An official of the Indian External Affairs Ministry
w nose responsibilities include relations with the USSR told US
embassy officials on Monday that he did not expect an agreement
to come from negotiations slated to take place in New Delhi next
week on the Soviets' demand for a new rate favorable to Moscow.
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I IThe official indicated his government is prepared to
agree o a new rate for future transactions, but opposes retro-
active application of any change. The Indians claim they stand
to lose about $500 million if a new rate is applied to outstand-
ing Soviet loans.
I lAccording to the official, the Indian government con-
siders t e issue to be of great political as well as economic
significance and will not succumb to Soviet pressure. He added
that "very senior people" in the Indian government are ready to
accept a major change in Indo-Soviet relations, such as a re-
duction in Indian arms purchases and bilateral trade, if Moscow
does not back down.
I Ithe Indians are increas-
ing y issa is ie wi numerous aspects of Indo-Soviet economic
relations. Repeated Indian attempts to secure from Moscow more
advantageous terms on aid and trade have been largely unsuccess-
ful. New Delhi's frustration--at a time when Indian planners
are trying to spur economic development and have come to recog-
nize the limitations of Soviet aid--probably partially accounts
for the emotional overtones that have surrounded the rupee-
ruble issue.
The Indian official could be overstating the willing-
ness o is government to accept a major change in its relation-
ship with Moscow. Prime Minister Gandhi is unlikely to take any
action that would abruptly jeopardize relations with India's
major arms supplier.
Gandhi has, however, permitted a gradual cooling in
Pakistan, and the US. Such factors probably are encouraging
the Indians to stand up to the USSR on a matter in which they
see their economic and political interests deeply involved
In o-Soviet relations over the last several years. Her self-
confidence has grown as a result of her assumption of authori-
tarian power and India's somewhat improved relations with China,
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I I President Sadat was unanimously nominated yesterday
by the Egyptian People's Assembly to a second six-year term.
His nomination will be voted on in a popular referendum on
September 16, and he will take the oath of office on October
16.
25X1 Under Egypt's constitution, nomination of a candidate
by the eople's Assembly must be by a two-thirds majority. Four-
teen other candidates are reported to have submitted their names
yesterday, but none received a vote.
tor this fall. The general election will take place on October
28, and run-offs, if necessary, will be held on November 4.
Election of a new People's Assembly is also scheduled
JAPAN: Leadership Fight
Talks between Prime Minister Miki, Deputy Prime Min-
ister Fukuda, and Finance Minister Ohira yesterday and on Tues-
day failed to result in any announced decision on Miki's tenure
in office. No further meetings are scheduled for now, and nei-
ther Miki nor his opponents have altered their public positions.
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 I lAs the Prime Minister's recognized successor, Fukuda
holds the key role in the oust-Miki campaign and his explicit
consent is mandatory to any action by the party to remove Miki.
The caucus of the ruling Liberal Democratic Party adopted a mo-
tion yesterday calling for "freshening the party leadership"--
a codeword for Miki's removal--but refrained from passing a
specific no-confidence motion against the Prime Minister for
the time being.
I I Fukuda has preferred all along that Miki be removed
by negotiation rather than as a result of an open party battle.
He may well find the idea of Miki's voluntary resignation at-
tractive even at the price of a few additional weeks in office
for the Prime Minister.,
Like Ohira, however, Fukuda is well aware that allow-
ing i i to convene the Diet offers him a number of opportuni-
ties to extend his political life. Miki could, for example, use
the expected opposition of the left wing to the pending fiscal
bills to delay their passage for weeks, thereby diminishing both
the mood and the time available for any change in leadership be-
fore the general election.
I I Even so, Fukuda and Ohira hold the balance of power 25X1
in the party and, barring any major disagreement between them,
still retain the option of precipitating a cabinet crisis that
could well force Miki's resignation.
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THAILAND: Defense Minister Resigns
The resignation yesterday of Thai Defense Minister
Thawit may open the way for Prime Minister Seni to reward mili-
tary leaders who stood by the government during the unauthorized 25X1
return last week of former strongman Praphat.
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cabinet could strengthen Seni's hand in keeping the military
Having well-connected professional military allies in the
GREECE-TURKEY: Aegean
25X1 I I The UN Security Council yesterday concluded its de-
Daue on Aegean continental shelf dispute by approving a
resolution designed to placate Greece without unduly antago-
nizing Turkey.
25X1 The resolution urges both parties to exercise re-
straint' calls on them to resume direct negotiations, and re-
minds them of the role the International Court of Justice could
play in settling their remaining differences.
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Passed by consensus, the resolution was the result
o near y two weeks of hard bargaining. The Greeks originally
sought strong references to Turkish seismic exploration in con-
tested areas and to international adjudication. The Turks
fought hard to dilute such references after they failed to fend
off a formal resolution.
Greek Prime Minister Caramanlis expressed satisfac-
tion wit the resolution--especially its reference to the
Court--and called on Turkey to abide by its recommendations.
Caramanlis has staked his prestige on his simultaneous appeals
to the Security Council and the International Court.
After adoption of the resolution Caglayangil said his
government still held that there was no need for the measure.
He added that Athens' unilateral application to The Hague
Court was contrary to the spirit of the resolution and said
that in this instance Turkey will not recognize Court action
as binding. The Turks have declined to participate in the
Court's hearings on the Greek appeal which began on Wednesday.
Turkish Foreign Ministry sources yesterday were quoted as
saying that to do so would merely give legitimacy to the Greek
case.
The continued tension resulting from the Aegean dis-
pute may be spilling over into Cyprus, where there apparently
was a serious violation of the cease-fire by Turkish forces in
Nicosia yesterday. Turkish troops also advanced at several
points into the UN-patrolled neutral area separating the two
zones. This action apparently was intended to back up the Turks'
claim to use half of the neutral area for farming purposes even
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though they had earlier agreed to exclusive Greek Cypriot use
of the entire area. UN officials in Cyprus are scheduled to
meet with Turkish authorities today to discuss the issue. I
President Giscard yesterday named Raymond Barre to
succeed Jacques Chirac,who resigned as prime minister after
disagreements with the President over government policy and
political strategy. A new cabinet is to be named by the end of
the week.
I I Barre, who is 52 years old, has no political affilia-
tion , e listed himself as a member of the "presidential ma-
jority" when he was named minister of foreign commerce last
January.
I I Barre's appointment does not appear to indicate that
the President is ready to break with the Gaullists. The cabinet
shuffle may be a holding action, caused by Chirac's determina-
tion to get out. Some reports indicate that Giscard would have
preferred to wait until after the municipal elections next
March to make major changes.
In a press conference after naming the new prime min-
ister, Giscard indicated that Barre would be carrying out the
President's instructions rather than initiating policy. Giscard
also noted that the appointment reflects his desire to combine
all parties of the governing majority into a "presidential ma-
jority" and eventually to form a center-left government.
I The choice of Barre, an economics expert, indicates
that the new government will tackle more vigorously the problems
of inflation, unemployment, and monetary stability that are of
primary concern to the citizens and a crucial factor in the
coalition's survival in the next legislative election.
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The USSR for the first time publicly acknowledged in-
creased tension between. Libya and Egypt. In a broadcast on Tues-
day, the Soviets replayed Libyan denials of complicity in the
hijacking of an Egyptian aircraft earlier this week.
The Soviets avoided suggesting either that Egypt was
responsible for the incident or that it was seeking pretext for
action against Libya.
The broadcast did not mention incidents between the
two countries--Egypt's anti-Qadhafi rhetoric, or Cairo's blam-
ing Libya for the hijacking incident. The broadcast charged
that Israel and its backers were seeking to use such incidents
to divide the Arab World.
I I The broadcast commented positively about alleged ef-
orts to improve relations between Libya and Egypt and reproached
Cairo for not doing more in this regard. This reproach, by So-
viet standards, is mild given the USSR's poor state of relations
with Egypt and its relatively better relations with Libya.
The USSR may be disinclined to get too closely asso-
ciated with Libya and Qadhafi, particularly in view of his more
adventuristic statements and actions in recent months.
I IEgypt late last night accused Libya of kidnaping on
Tuesday two Egyptian security men from an Egyptian-chartered
airliner at Tripoli airport. According to an Egyptian statement
the plane was chartered from a US company and carried an Ameri-
can crew. Egypt called the incident an "act of air piracy" and
warned it would take appropriate but nspecified countermeasures.
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