NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030200010026-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 16, 2016
• Document Release Date: June 16, 2005
• Sequence Number: 26
• Publication Date: June 15, 1977
• Content Type: REPORT

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TO:
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Wednesday June 15, 1977 CG NIDC 77-138C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Top Secret
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(Securit
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lop Secret
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National Intelligence Daily Cable for Wednesday, June 15,
e NID able is for the purpose of informing
senior officials.
CONTENTS
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EAST GERMANY: CU Meeting
SOUTH AFRICA: Soweto Anniversary
USSR: Pre-Belgrade Maneuvers
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Page 3
Page 5
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JAPAN-USSR: Communist Party Polemics
SPAIN: Policy Alternatives
CHINA-JAPAN: Protests
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EAST GERMANY: CU Meeting
East Germany may interfere tomorrow with West Germans
traveling to West Berlin to take part in a rally commemorating
the June 17, 1953 worker uprising in East Berlin.
I East German authorities will be closely monitoring
the transit routes between West Germany and West Berlin and
will very likely stop, search, and perhaps turn back vehicles
they think are carrying demonstrators to the event, which is
sponsored by the West German opposition Christian Democratic
Union. The West Germans assert that such actions would be in
violation of the inter-German transit treaty.
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I I Late last week, two Soviet diplomats in East Berlin
complain d about the planned demonstration to a member of the
French mission in Berlin. The Soviets noted they regard the
planned rally as a violation of the Quadripartite Agreement of
? 1971. The two diplomats did not threaten any action, as East
German authorities have done in meetings with various West Ger-
man officials, but they did underscore their complete support
for East Germany.
if East Germany does impede travelers to West Berlin.
prevented travelers from going to West Berlin to undertake ac-
tivity unacceptable to the East German regime. The Allies have
prepared a contingency protest note for delivery to the Soviets
Should the East Germans block the transit routes, it
would be the third time in the last four summers that they have
SOUTH AFRICA: Soweto Anniversary
The prospect of a serious outbreak of violence to-
morrow in Soweto, the black South African township outside
Johannesburg, has increased substantially during the past few
days. In many urban centers, blacks, sympathetic whites, and
perhaps some coloreds will be commemorating the anniversary of
the clash a year ago that touched off nationwide violence.
The arrest by security police last weekend of many
student leaders who had been advocating nonviolent demonstra-
tions on the anniversary removes an important element of re-
straint on student actions. There were several incidents in
Soweto yesterday when students stoned civilian and police ve-
hicles. In addition, a terrorist attack on Monday in which
three blacks shot and killed two whites and wounded a third
has unsettled the white community in Johannesburg.
I IThe terrorist. attack will probably strengthen the
insistence of white hardliners, especially in the police, on
a more repressive policy against black demonstrators. The So-
weto police chief has been advocating a firm but more concilia-
tory policy but has been unable to reduce violence. The arrest
of the student leaders was apparently carried out without his
knowledge, probably at the direction of the minister of justice.
The government's action. may in part have been taken because of
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the students' role in forcing the collapse of the Soweto Urban
Bantu Council, a largely ineffective government-sponsored ad-
visory body.
--A boycott of classes, already partially under way in
Soweto and elsewhere.
--A work boycott in the Johannesburg area, which is being
treated cautiously by black union leaders because of fears
of further government action against union activities.
--A nationwide day of mourning for the blacks killed dur-
ing the riots.
Pamphlets distributed in Soweto, in other townships
around Johannesburg, and to a lesser extent in the Pretoria
area, ask blacks to stay away from places of entertainment, to
dress in black, to shop only for essentials, and to attend
church services. The period of mourning may extend through
Sunday.
I In Cape Town, the previously apathetic Student Rep-
resentative Council at the white University of Cape Town has
distributed a pamphlet calling for change in South Africa and
solidarity with the blacks. Police have confiscated thousands
of the pamphlets. The mostly English-speaking and generally
liberal student body at the university has been quiescent
since the government cracked down on student activities in the
early 1960s.
Until now, virtually all leaders, both black and
white, have called for a peaceful observance of the anniversary
of the riots, but, with tensions running high, an isolated in-
cident could quickly touch off major violence. A highly visible
police presence in Soweto, which began last week, may serve
only to incite students, and another terrorist attack could
result in a return to the harsh police action of last year.
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USSR: Pre-Belgrade Maneuvers
on the eve of the Belgrade conference, the Soviets
are stepping up their public and private counteroffensive on
the human rights issue and are preparing to hit back in a num-
ber of ways should the meeting develop into a full-fledged
verbal confrontation between East and West.
of Los Angeles Times newsman Robert Toth on charges of receiv-
ing state secrets from a Soviet citizen points up the recent
propaganda theme stressing the espionage potential of contacts
between foreigners and Soviet citizens. Toth, who has had close
contacts with dissidents, had been scheduled to leave the USSR
this Friday after a three-year tour, but he has now been told
not to leave Moscow and to appear for still more questioning
today.
The Soviets could try to link Toth to arrested human
rights-dissident Anatoly Shcharansky, who may be charged with
engaging in treasonous activities involving US diplomats and
journalists. The KGB presumably knew that Toth was introduced
The interrogation in Moscow on Saturday and yesterday
by Shcharansky to the Soviet scientist who gave Toth a paper
on parapsychology moments before both Toth and the scientist
were apprehended. If and when Shcharansky is brought to trial,
Toth's involvement would be useful to the Soviets in building
their case against the dissident.
The Shcharansky and Toth cases evidently are parts of
the carefully orchestrated Soviet attempt to inhibit any effort
by the West to put the USSR and its allies in the dock at Bel-
grade, and it is possible that the Soviets have not firmly de-
cided on the disposition of either case. At least one Soviet
official said recently that the investigation of Shcharansky's
case is continuing and would have to be completed before it
could be determined whether there would be a trial.
I Although the Soviet human rights movement has in re-
cent months been demoralized and weakened by arrest, exile,
emigration, and harassment of its members, what is left of the
dissident group set up to monitor Soviet compliance with the
human rights provisions of the Helsinki accords apparently con-
tinues to smuggle statements on this and related issues to the
West.
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One such document recently published in the West and
evidently timed for the opening of the Belgrade conference,
urges the West not to back down on the human rights issue but
also rejects the alternative of a propaganda confrontation. The
statement calls instead for an East-West agreement to establish
criteria accurately defining which restrictions on individual
freedoms are permissable in order to safeguard the interests of
the state. Similarly, it seems to call for a definition of what
constitutes "interference" in the internal affairs of another
state, a catch-all phrase used by the Soviets to deflect West-
ern expressions of concern on human rights in the USSR.
The authors of the statement point out that a refusal
by Moscow to negotiate such criteria would show that there is
an irresolvable contradiction between human rights and Soviet 25X1
state interests, in which case the USSR should never have signed
the Helsinki accord.
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JAPAN-USSR: Communist Party Polemics
Relations between the Communist Party of the Soviet
Union and the Japanese Communist Party, already poor, were
worsened on Monday, when Pravda ran an article rejecting the
Japanese party's claim that the Northern Territories right-
fully belong to Japan.
The Pravda article was in response to the Japanese
party s open letter of May 27, reaffirming the party's tradi-
tional policy and disputing the Soviet assertion that the
Northern Territories issue had been settled and has nothing
to do with current Japanese-Soviet relations. The Japanese
party's letter was probably prompted by the Japanese upper-
house election next month.
I Despite the Japanese Communist Party's efforts to
reinforce its image as a "national and independent" party by
highlighting the Northern Territories issue, the Japanese Com-
munists continue to be concerned about political campaign
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SPAIN: Policy Alternatives
//The Spanish government that emerges from today's
election--whatever its composition--will have to avoid the ex-
tremes of either harsh austerity measures or a strongly expan-
sionary program. The new government is likely to focus on de-
valuation, money supply, government investment, and labor
relations.//
I IThe economy continues to flounder after more than two
years o slow growth, rising unemployment, rapid inflation, and
deterioration in the current account. No foreseeable economic
program is likely to prevent 1977 from being another year of
poor performance. Gross national product will grow by only 2
to 2.5 percent, but prices will rise by about 30 percent, and
the current-account deficit will again approach $4.5 billion.
Investment will remain weak.
//Parties left and right of center have been cau-
tiously silent concerning comprehensive economic proposals.
Prime Minister Suarez, supported by the Union of the Democratic
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Center, has already indicated that he favors moderate austerity.
Fears of a backlash by labor and conservatives, however, will
tend to prevent the government from taking drastic measures.//
I //The more important economic measures likely to
be adopted or proposed this summer include:
--Devaluation of the peseta, perhaps by 15 percent.
--A moderate cut in money supply growth, combined with a
freeing of interest rates.
--An increase in government investment spending.
--Negotiation of a social pact with labor, offering such
concessions as higher unemployment benefits in return for
a pledge to moderate wage demands.//
//Before the year is out, the new government may
take action on other measures that are regarded as less urgent
although still very important. Steps to encourage private in-
vestment--particularly in the areas of import substitution and
export industries--would be high on this list. An effort to re-
duce tax evasion and distribute the tax burden more progres-
sively would be particularly popular.//
China's official protest to Japan this week against
the agreement between South Korea and Japan on the East China
Sea continental shelf is stronger than previous statements on
the issue by Peking, but it is unlikely to affect Chinese-
Japanese relations significantly.
The Chinese note accuses Japan of disregarding
China's viewpoint and sovereignty and warns that "no country
or private person may undertake development activities" on the
shelf. Peking's warning is unlikely to be tested soon. Tokyo
must enact domestic enabling legislation before Japanese com-
panies can undertake activities on the portion of the shelf
covered by the agreement.
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As in previous Chinese protests, Peking asserted that
division of the continental shelf should be accomplished in
consultations with other concerned nations. Tokyo undoubtedly
would welcome consultations, as would South Korea, which is
eager to establish contact with Peking. Mindful of its rela-
tions with North Korea, however, China is unlikely to follow
up its suggestion for consultations, especially if South Korea
is to be involved.
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I //Turkey will face another critical foreign ex-
change shortage within the next six months unless it obtains
outside help. The timing of the shortage will depend on how
long Ankara can hold up payments for imports and how long for-
eign bankers are willing to maintain deposits of foreign cur-
rency in Turkish banks. In the interim, Turkey may approach
the US for emergency credits.//
I //Turkey has financed nearly half of its cumula-
tive -bi lion current-account deficit in 1975-1976 through
so-called convertible lira deposits. Deposits totaling $600
million must be returned or renewed before September; Turkey
currently has only $600 million in foreign exchange reserves.
The country narrowly avoided a balance-of-payments crisis a
few weeks before the June 5 election largely because of a
credit from West Germany.//
//Turkey now has exhausted readily available
sources o inancing. Creditors and potential creditors are
telling Turkish officials that Ankara will first have to begin
negotiations for assistance from the International Monetary
Fund. With a much larger share of its foreign debt in private
hands than ever before, Turkey is beginning to recognize that
conditions for rolling over this debt may be stringent.//
//Discussions with the IMF will take time. The
Demirel government did not permit IMF representatives in the
country for more than a year, fearing their policy recommenda-
tions would be politically unworkable for the shaky coalition.//
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//The inconclusive election results have left open
e question of who will head the new government, although op-
position leader Bulent Ecevit will attempt to assemble a cabi-
net first. Whether he or Demirel is the new prime minister
probably is less crucial to the shape of economic policy than
whether current Deputy Prime Minister Erbakan, an autarkist
and obstructionist, is once again in the government.//
//The Turks strongly resent outside "interference"
in their affairs, and Erbakan probably would resist going to
the IMF. Both Ecevit and Demirel would attempt to minimize pos-
sible conditions for aid, but Erbakan's presence in the cabinet
would permit them even less leeway for negotiating.//
//Turkey's decision to finance rather than to try
to re uce Its current-account deficit reflects the political
circumstances faced by weak caretaker and coalition governments
during the last four years. All parties have been bent on push-
ing rapid economic growth and, building up Turkish military
forces despite the steep rise in oil prices and the world re-
cession. For example, retail petroleum prices have not reflected
the world-wide price increases since 1973. None of the political
parties was willing to jeopardize its position by dampening im-
port demand. The US arms embargo put further strain on the bal-
ance of payments as the Turks began shopping for weapons in
Western Europe on less favorable terms.//
prepare themselves or their people for the austerity measures
the new government will have to adopt to restore the country's
credit rating. A substantial devaluation is the only move re-
portedly now under consideration.//
//Turkish leaders apparently have done little to
//Ankara probably would accept IMF recommendations
for limits on the growth of domestic credit and the money sup-
ply, but would strongly reject curbs on military spending. The
government might accept :Limits on nonmilitary spending if they
did not involve cuts in politically sensitive programs such as
price subsidies. Ecevit, strongly supported by labor, would be
particularly resistant to proposals for wage restraints.//
//Regardless of what steps Ankara takes, slower
economic growth is a foregone conclusion. Without additional
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foreign assistance, Turkey would have to slash imports--possi-
bly by direct controls on nonmilitary goods. With foreign as-
sistance and a moderate austerity program, the cuts would be
more gradual and less severe. Restoration of US military aid
could partially ease the foreign exchange shortage but only if
the Turks decided to cut back on purchases of West European
arms.//
//Inflation and unemployment probably will in-
crease. Devaluation of the Turkish lira would immediately raise
the cost of imports and subsequently retain prices. In addition,
wage pressures remain strong despite very high unemployment.
The West European nations that have been outlets for surplus
Turkish labor are themselves troubled b hi h unemployment and
continue to send Turkish workers home.
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