NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029700010012-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 20, 2016
• Document Release Date: August 3, 2005
• Sequence Number: 12
• Publication Date: January 8, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE 0
Saturday January 8, 1977
Top Secret b'= 2
(Security Classification) 25X1
CONTROL NO. J
CG NIDC 77-006C 0
0
State Department review completed
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
akmoms
0
Top Secret
la sification
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National Intelligence Daily Cable for Saturday, January 8, 1977.
25X1
The NID Cable :Ls tor the purpose or in o :Lng
senior officials.
CONTENTS
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USSR-US: Undisguised Pressure
USSR-EGYPT-SYRIA: Relations
FRANCE: Socialists Seek US Contacts
PANAMA: Labor Problems Possible
GREAT BRITAIN: Year End Assessment
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USSR-US: Undisguised Pressure
The USSR is accusing President Ford's administration
of putting pressure on President-elect Carter in order to damage
the process of detente. Attacks against opponents of detente
have long been standard fare in Soviet commentary but direct
? attacks against President Ford have been rare.
I uIn some unusually mean-tempered articles, the Ford
administration has been accused of using its last days to in-
crease military expenditures and to deploy new strategic weap-
ons systems. An article in Izvestia on Wednesday takes the
President personally to task for siding with the military-in-
dustrial complex in this regard. A Tass commentary on Thursday
by veteran Soviet observer Valentin Zorin charged President
Ford with trying to "interfere openly in the affairs" of his
successors.
For the past several days, Soviet media have been
describing the controversy in the US over intelligence esti-
mates of Soviet strategic objectives as part of a campaign to
"tie Carter's hands in foreign policy." Soviet commentary thus
far has not acknowledged that the debate in the US has focused
on the issue of whether the USSR is seeking superiority over
the US in the development of Soviet strategic forces. The So-
viets have always tried to avoid being drawn into a direct ex-
change of charges and countercharges about specific force
levels.
The Soviet media campaign began the first of the year
and is directed from the highest level. At least one Soviet of-
ficial has privately implied that Zorin's commentary can be
considered the semi-official Soviet response to US efforts to
reactivate the arms race. US embassy officers in Moscow have
heard from other sources that the Soviets attach particular
significance to the Zorin article.
President-elect Carter continues to receive friendly
handling from Soviet sources. General Secretary Brezhnev, in
an interview last week, credited him with an "understanding of
the urgency" of outstanding Soviet-US differences. Soviet news
media repeatedly refer to his campaign pledges about a commit-
ment to detente and to continued cooperation with the USSR.
F__ I
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//The USSR is expressing concern that the rap-
prochement between Egypt and Syria will have negative conse-
quences for Moscow's relations with Damascus.//
//The Soviets have also interpreted Saudi
Arabia's growing influence in both Egypt and Syria as a set-
back to their interests. Soviet commentary has privately ac-
cused the Saudis of acting as US proxies in the Middle East,
and Moscow presumably believes that the linkage between Egypt,
Syria, and Saudi Arabia is an indirect US effort to reduce
Soviet influence in the Arab states.//
Soviet press coverage of Asad's visit to Cairo in
December indicated that the USSR did not approve of Egyptian-
Syrian efforts to establish a "command structure for unified
policy." The Saudis are firmly associated with these efforts
toward reconciliation as well as any joint approach by Egypt
and Syria towards peace negotiations.
I IMoscow gave scant attention to Asad's meetings in
Cairo an virtually ignored the Egyptian and Syrian references
to forming a unified political command. Tass also was ostensi-
bly skeptical of any possibility of a rapprochement between
the two countries; the question of a rapprcchement was ignored
elsewhere in the Soviet media.
//The USSR fears that Damascus, which has hith-
erto s are oscow's opposition to the US-negotiated Sinai II
accord, is falling into line with Egypt's view that the US
holds the key to a comprehensive settlement in the Middle
East. The Soviets already have heavily criticized the Egyp-
tians for emphasizing the US role in the Arab-Israel settle-
ment process. The Soviet-Syrian relationship is still emerging
from the low point reached during the fighting in Lebanon and
is in a delicate stage that ludes any heavy-handed Soviet
criticism of the Syrians.// re c 25X1
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25X1 //The French Socialist Party has authorized two
of its senior members, Michel Rocard and Jean-Pierre Cot, to
seek "exploratory" contacts with the new US administration
during their private visits to the US next week.//
//Rocard had already taken steps to set up meet-
ings with officials of the new administration before receiving
the authorization of the party.//
official party representative, probably later this month, to
engage in more "concrete" contacts and try to set up a visit
to the US by party First Secretary Francois Mitterrand.//
//The party's executive committee plans to send
its foreign policy expert, Robert Pontillon, to the US as an
to try to convince US officials and press that he did not re-
present a force inimical to the interests of the US--or France
and Western Europe. In defense policy, in particular, Mitter-
rand has said the party should establish a public record of
moderation in order to try to forestall criticism by the US
and West Germany that could influence French voters.// I
//Mitterrand visited the US in ate 19/b
Observance of the anniversary this Sunday in Panama
of the 1964 anti-US riots is likely to be quiet. Labor unions,
however, may stage demonstrations to protest new, restrictive
labor legislation.
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 Any demonstrations would be directed against the
Panamanian government rather than the US. The government would
move swiftly to ensure that they did not get out of hand. Ba-
nana workers in the Atlantic region began a strike protesting
the new labor law earlier this week, but union leaders else-
where do not seem ready to call for a general strike for fear
of government retribution.
The new legislation ends many of the provisions of
a 1972 labor code that measurably increased worker benefits.
It freezes existing contracts between employers and unions for
two years, limits the right to strike, makes it easier for em-
ployers to dismiss workers, and limits annual wage increases
to amounts already under contract.
Last September, some labor groups showed their dis-
satisfaction with the government's handling of the economy by
supporting student-led disturbances over price rises and in-
creasing unemployment. The revised labor code will result in
more complaints and worsen relations between labor and govern-
ment.
//The NID Cable today prints excerpts from a re-
port by the US embassy in London in which the embassy reviews
developments in Great Britain in 1976 and looks ahead to 1977.//
I
//The year 1976 was a dismal one for the British,
perhaps the worst year since the end of World War II.//
//The most damaging drought for 500 years burned
the country brown. June was the hottest month this century.
The pound plummeted to $1.56. Wilson resigned, Callaghan had
to cope. A Trotskyite was named the Labor Party's youth organ-
izer. British mercenaries killed each other in Angola. Rabies
threatened UK ports. Parliament and parties divided. So did
Princess Margaret and Lord Snowden. England lost the cricket
test with the West Indies and the World Cuo soccer qualifying
match in Rome. Britain lost the "Cod War."//
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//Bombs exploded in London, 296 died in Northern
Ireland's civil war, the British ambassador was murdered in
Dublin, and the European commission on human rights found
Britain guilty of torture of internees in Northern Ireland in
1971. The government borrowed a massive $6.8 billion abroad.
The Tate Gallery exhibited 120 bricks in a pile. An American
oil company bought the observer. The devolution debate began
bitterly at Westminster. Unemployment reached a million and a
half, inflation fell to 15 percent.//
//December was not any worse. After protracted
and painful negotiations with the International Monetary Fund,
Chancellor Healey produced an economic package tailored to re-
duce government borrowing by about $6 billion over the next
two fiscal years.//
/Most of the reduction will be achieved by
spending cuts, including about $381 million in defense. The
rest will come from excise tax increases. In return, the IPIF
has approved Britain's request for a standby drawing on its
remaining $3.9 billion in credit facilities. The money will be
handed over in stages provided that Britain achieves agreed
domestic credit targets.//
//The coming cuts in public spending follow the
pattern established during a similar exercise in July. They
are scattered among the various spending programs and meant to
minimize job losses in the public sector. Some observers have
concluded that these cuts must lead to reductions in private
sector employment, particularly in the construction industry,
which already bears a disproportionate share of existing unem-
ployment.//
//Even so, the IMF monitoring, the monetary and
fiscal targets of the package, and the likelihood of a balance-
of-payments surplus in 1978 have helped to restore some confi-
dence in foreign exchange markets.//
/Nonetheless, after the December package, few
Britons will reach the end of 1977 as well off in real terms
as they are now. Continuing wage restraint plus inflation ex-
pected to average 12 to 15 percent over 1977 will slice pre-
tax income. With real take-home pay dropping by possibly 5 to
6 percent, a fall in consumer spending is all but inevitable.//
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//Government spending will be lower in 1977 with
the reductions confined largely to capital spending. Overall
investment will be slightly reduced in 1977, influenced by
lower outlays on housing, the nationalized industries, and the
peaking, at least for the moment, of North Sea development
spending.//
I //The likely rise in manufacturing investment
will not offset these declines. The only buoyant elements in
the pattern are expected to be net exports and inventory accu-
mulation. Lower levels of imports stemming from weak domestic
demand and rapidly increasing North Sea oil output, coupled
with rising exports in the wake of the large depreciation of
sterling, should produce a margin of net exports consistent
with overall economic growth of 1 to 2 percent in 1977.//
//Given such sluggishness, it is unlikely that
any progress will be possible in reducing unemployment below
its current level (1.3 million or 5.5 percent). In fact, job-
less totals could go as high as 1.7 million by the end of the
year.//
rehabilitation depends will actually take place.
//In sum, 1977 will be a further tough year for
Britain, its economy, and its citizens. Rising unemployment,
continued high inflation, and little growth will persist. Al-
though these problems will be somewhat softened in the course
of the year by the impact on the balance-of-payments of large
flows of North Sea oil, there are still only the faintest signs
here that the much discussed shift of resources from current
consumption to investment and export on which the UK's economic
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Top Secret
(Security Classification)
Top Secret
for--Release 2006/03/17 : CIA-RDP79T00975A029700010012-9
(Security lassification)