NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030200010081-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: August 7, 2006
• Sequence Number: 81
• Publication Date: July 20, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE 0
Wednesday July 20, 1977 CG NIDC 77-167C
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National Intelligence Daily Cable for Wednesday, July 20 1977.
The NIIL) Cable is for the purpose of in orming
senior officials.
CONTENTS
CHINA: Peking Posters on Teng
Page 1
UK: Crucial Wage Policy Vote
Page 2
SPAIN: EC Membership Application
Page 3
TURKEY: Coalition Government
Page 5
SUDAN: Negotiat
ion
s Publicized
Page 6
GHANA: Return t
o C
ivilian Rule
Page 6
PORTUGAL: Agrar
ian
Reform Bill
Page 7
SRI LANKA: Elec
tio
n Preview
Page 10
BRIEFS:
Page 11
Spain
The Bahamas
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CHINA: Peking Posters on Teng
Two posters appeared in Peking yesterday weZcom-
ing the 11 central decision" to restore Teng Hsiao-ping to all
the positions in the Chinese party, government, and military
that he held before his ouster in 1976. There has been no
of- ficial announcement from Peking on such a decision, in contrast
with the announcement last year of Teng's dismissal, and it is
not clear that the posters have official approval. A public
declaration of Teng's return would probably be greeted with a
rash of posters throughout the city.
25X1 There are indications that party leaders are now
meeting Fn- Peking, and. presumably Teng's status is high on the
agenda. It is possible, as one poster claimed, that Teng has
been "nominated" to return to his original positions.
On the other hand, the poster-writers may either be
jumping the gun on what they expect the meeting to decide, or
they may be trying to boost Teng's cause. As early as last Jan-
uary, poster-writers in Peking put up apparently unauthorized
posters calling for Teng's return and for his appointment as
premier.
It is possible that Teng will initially be re-
stored to is original positions but that adjustments will be
made during the course of the meetings.
The Peking press this month has defended Teng in all
respects, omitting only the use of his name. This transparent
support for Teng, and especially a statement in People's Daily
four days ago that he held his positions because of a decision
by Mao, stops just short of publicly reinstating him to his
former positions and may have prompted the posters.
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UK: Crucial Wage Policy Vote
//Britain's Labor government will probably win a
key vote today following a special parliamentary debate on its
pay policy. With the House of Commons adjourning later this
month, Prime Minister Callaghan will enjoy a four-month respite
from the rigors of keeping a minority government afloat. But
in the interim, the outcome of 17 major wage discussions will
indicate whether the trade unions intend to make responsible
wage demands and whether the government is determined to hold
to its pay guidelines, which call for holding wage increases
to an average of 10 percent. The results of this testing period,
plus CaZZaghan's ability to deal with the miners' demand for a
90-percent pay boost in November, will determine the Labor
government's chances of avoiding an early election.//
//The government's Liberal Party allies are dis-
appoints t at no formal pay agreement was reached with the
Trades Union Congress and probably doubt Labor's ability to
stick to its unilaterally declared policy. Even so, the likeli-
hood that the Liberals' already small parliamentary delegation
would be decimated in a general election this summer will
probably keep them from abandoning their pact with the govern-
ment.//
//Callaghan has also cultivated the support of
o er minor party members of Parliament. Ulster Unionist leader
James Molyneaux recently declared that the days when the Union-
ist automatically supported the Conservative Party are gone.
In fact, most Unionists are prepared to support the Labor gov-
ernment in a vote of confidence because of government conces-
sions in the area of local autonomy and in boosting the number
of Ulster's seats in Parliament.//
//Labor's plans to resubmit home rule legislation
tor Scotland and Wales in the next parliamentary session might
lead some nationalist members of Parliament to abstain rather
than vote against the government today. The nationalists could
be damaged politically if Callaghan is forced into an early
election that results in a victory for an anti-devolution Tory
government.//
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I //Chancellor of the Exchequer Healey's pay policy
received a small boost yesterday when the economic committee
of the Trades Union Congress reaffirmed its position that pay
settlements should be concluded only every 12 months. The com-
mittee's position, however, flies in the face of decisions by
powerful unions, such as the miners', to seek pay increases
before their current one-year settlements expire.//
//The actions of the Trades Union Congress' annual
con erence in September will determine the government's ability
to enforce a one-year period between wage increases. There ap-
pears to be a better than even chance that the federation will
vote to support this all-important rule.
SPAIN: EC Membership Application
//Spain may apply for full membership in the Euro-
pean ommun2 y next week. Such a bid would enjoy wide domestic
support. Last month's parliamentary election went a Zong way
toward satisfying EC members that Spain has forsworn Francoism,
but attaining membership is bound to be protracted and diffi-
cult.//
//Foreign Minister Oreja told the US ambassador
t i.s week at he plans to recommend that the cabinet approve
submission of an early application. If, as he believes likely,
the cabinet approves his proposal, he will travel to Brussels
next Wednesday to make the formal submission.//
//Earlier this month Spain notified the EC that
it would extend its 1971) preferential tariff agreement with
the original six EC members to include the three newer members.
Under this agreement, the six EC members gave preferential
tariff treatment to Spanish industrial exports in return for
similar treatment by Spain to their industrial goods. Final
negotiations for the expanded agreement are expected to be
completed by the end of the month pending settlement on agri-
cultural quotas for exports to the EC.//
//Spanish Prime Minister Suarez indicated some
time ago at Madrid would push ahead with its application for
full EC membership as soon as the parliamentary election had
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established Spain's democratic credentials. Since the election,
frustration over growing EC concern about the possible costs of
Spanish membership has resulted in some muted threats from
Spanish officials to withhold application, but the government
last week reaffirmed its intention to make a bid soon. If the
application is not made this month, it will probably come in
September.//
I //Oreja, in any case, said he does not expect the
EC Counci of Ministers to agree to consider Spain's bid until
September. He envisages negotiations beginning in mid-1978 and--
while not minimizing the difficulties Spain would face--spoke
optimistically of 1980 as a possible accession date. EC offi-
cials, however, expect accession to be delayed for at least
several more years. Both sides envision a six- to seven-year
transition period after entry during which Spain would adjust
to EC requirements.//
//EC members, France and Italy in particular, will
want sateguards against Spanish agricultural competition, and
some parts of the Community fear that Spain would be a dangerous
competitor in such items as steel, shoes, and textiles.//
//Spain's motives for wanting to join the EC are
in large part political. To many Spaniards EC membership repre-
sents acceptance, after 40 years of isolation, in a modern,
democratic Western Europe.//
//The Spanish government's commitment to full EC
membership seems firm, and in this it has the support of all
major political groups including the Communists and Socialists.
Opposition in Spain to EC membership comes mostly from xenophobic
extremists on the left and right and from those businessmen
afraid of more dynamic European industries.//
//EC membership will mean severe problems for
Spain ,s many inefficient producers who now are shielded by the
country's high protective barriers. At the same time, however,
it will allow some producers to lower costs by broadening their
market. Given a sufficient transition period--possibly six
years--Spanish firms should be able to adjust to the more com-
petitive environment.
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Turkish Prime Minister - designate DemireZ has ap-
parent y reached agreement with two small right-wing parties
to reassemble the "nationalist front" government that held power
prior to the country's recent parliamentary election. In a press
statement yesterday, DemireZ, leader of the Justice Party, im-
plied that the coalition parties have apportioned ministerial
portfolios and that only the relatively straightforward matter
of matching names and positions remained to be addressed. He
said he hoped to present a cabinet list to President Koruturk
later today.
If events flow as smoothly as Demirel hopes, Turkey
cou ave a government by the end of the month. Despite his
dislike of National Salvation Party leader Erbakan, who will
be part of the coalition, Koruturk would have little reason not
to approve Demirel's cabinet because the three parties in the
coalition control a majority of seats in the lower house. After
receiving presidential approval, the government would then have
a week to publish its program, and parliamentary debate and a
vote of confidence would ensue.
The major sticking point during the two weeks of tough
bargaining among Demirel, Erbakan, and Nationalist Action Party
boss Turkes was Erbakan's demand that his party receive seven
cabinet posts, reportedly including the education and interior
ministries. Demirel doubtless took exception to this demand at
least initially, for the National Salvation Party had the same
number of posts in the first "front" government at a time when
it controlled twice as many parliamentary votes.
I I When a cabinet list is published, it is likely to
snow a the Salvationists have largely gotten their way. De-
spite heavy election losses, Erbakan and his party still hold
the balance of parliamentary power and the key to Demirel's
becoming prime minister.
I Turkey's closely divided electorate will not greet
the announcement of a Demirel government enthusiastically. Many
in Turkey have reservationsabout the country being governed
again by a coalition that during more than two and a half years
in power proved largely incapable of focusing on the country's
many problems.
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I The leader of Turkey's largest labor confederation
said last week that if the Demirel government won a vote of con-
fidence he would lead a general strike until it fell. There are
other indications that the left is already chafing at the pros-
pect of several more years of rightist rule, and the Demirel
government may face a difficult time.
SUDAN: Negotiations Publicized
Sudanese President Numayri is apparently success-
u y concluding his effort to win over conservative opposi-
tion groups, especially the Ansar Islamic Sect and the Muslim
Brotherhood. Reconciling these groups would largely neutralize
Libyan and Ethiopian attempts to use exiled Sudanese dissidents
to undermine the Numayri government.
I I In a nationwide address Monday evening, Numayri dis-
closed at he met with Sadiq al-Mahdi, exiled leader of the
Ansar dissidents and a former prime minister, in Port Sudan on
July 6. Although he gave no details of his contacts with Sadiq
and other opposition leaders, Numayri said he had achieved
"great success" and expressed hope that a general agreement
on national unity will result.
Numayri released over 800 political detainees last
weekend, presumably as a consequence of his negotiations with
opposition leaders. According to press reports from Khartoum,
those released included Muslim Brotherhood leader Hasan al-
Turabi and some followers of Husayn al-Hindi, another prominent
opposition leader who like Sadig, has received Libyan and
Ethiopian support. r7 I
//Ghanaian leader Acheampong pledged on Monday
to return ana to civilian rule within the next 12 months in
an effort to get striking professional groups to return to
work. The professional groups had rejected the government's
plan, announced on JuZy 13, to return to civilian rule after
a two-year transition period and had continued the strike they
began on JuZy 1.//
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in a meeting with strikers on Thursday. In addition, he froze
Acheampong held fast to the two-year transition period
the assets of professional groups and insisted that the strikers
return to work as a precondition for further negotiations.
These actions hardened the resolve of professionals
to continue their walkout. While some professional groups re-
turned to work in Accra on Friday, lawyers, doctors, and phar-
macists continued their strike. Medical services had become so
inadequate that Acheampong appealed to the US, Britain, and
Nigeria for doctors.
//The government's decision to move up the date
tor a return to civilian rule was made to buy itself time. Pub-
lic reaction to the two-year transition proposal was not enthu-
siastic, and Acheamponcr was worried that if the strike continued
into the fall, university students would join in the efforts to
unseat the government./'/
//With the commitment to a one-year transition,
Acneampong will probably be able--at least temporaril
--to de-
y
flect the mounting criticism of his leadership; by ensuring
that the striking professionals will return to work, he may be
able to reduce public resentment toward his regime.// 25X1
1 17
PORTUGAL: Agrarian Reform Bill
I The Socialist minority government in Portugal faces
hard bargaining this week to secure approval of key agrarian
reform legislation. The Socialists are angling to obtain the
support of the centrist Social Democrats, since the conservative
Center Democrats and the Communists have already announced their
opposition to the bill. Prime Minister Soares told the US ambas-
sador in Lisbon that he is confident he has the backing of
President Eanes and will survive any challenges to his govern-
ment.
The Socialist proposal is designed to hand back land
illegally seized during the revolution by Communist-led groups,
but not to sacrifice the principle of land reform. Under the
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legislation, less land would be eligible for expropriation;
owners whose land had been taken would be granted some compensa-
tion and would have a limited right to ownership in parts of
their former holdings.
I IThe Communists have the most to lose if the legisla-
tion is passed. In rallies throughout the country last weekend,
they promised to fight to prevent enactment of the law or to
force basic amendments. The Communists can make trouble for the
Socialists in the streets, but probably do not have the means
to thwart government plans.
I IThe Center Democrats, the most conservative of the
tour major parties, oppose the bill because it recognizes some
expropriations and does not return all of the seized land. The
party announced last weekend that it would no longer cooperate
with the government on a case-by-case basis, but would support
Soares only if the Socialists accepted an overall political
agreement. Center Democratic leaders are claiming that defeat
on the agrarian reform measures could bring down the government.
I IThe centrist Social Democrats are the Socialists' best
hope tor allies to assure passage. They appear to be bargaining
for concessions from the Socialists on other issues. Most Social
Democratic legislators probably agree with the Socialist approach
to agrarian reform and believe the Communist influence needs to
be diminished if the agricultural sector is to get back on its
feet.
I Soares realizes that Social Democratic leader Sa Car-
neiro cou d still change his party's stance. The Prime Minister
is confident he will survive the vote, however, and has taken
several actions to minimize the risks:
--The government postponed a vote on its mid-term economic
program until the fall session of the legislature to avoid
more problems with the Social Democrats and Center Demo-
crats. The Socialists might have had to turn to the Com-
munists for support on the program and thereby weaken their
efforts on agrarian reform.
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--The Socialist leaders are easing leftist dissidents out
of the party in order to keep internal party problems from
overshadowing the parliamentary battle. The Socialists re-
portedly plan to announce that the dissidents are not being
expelled but have cut themselves off from the party.
--Some Socialists are saying that they are planning to re-
organize the government in the fall and will probably in-
clude some independents.
I IThe biggest factor in Soares' favor continues to be
e support of President Eanes, who has shown no sign of want-
ing a change in government. Eanes has been holding long meetings
with the opposition leaders this week to discuss legislative
issues.
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I J Sri Lankan voters may continue their tradition
o voting out incumbent governments when Prime Minister Bandar-
anaike's Zeft-of-center Sri Lanka Freedom Party stands for re-
election tomorrow. Neither domestic nor foreign policies are
likely to change radically over the short term regardless of
which of the two major parties forms the next government.
Voter dissatisfaction with the country's 20-percent
unemployment rate and 10- to 20-percent inflation rate could
result in a victory for the major opposition party, the more
conservative United National Party led by J. R. Jayewardene.
The National Party governed from 1965 to 1970, when it was
overwhelmingly defeated at the polls.
Leftists, angered by Bandaranaike's relatively moder-
ate an o ten antilabor economic policies, will probably vote
for the United Left Front, a coalition of leftist groups that
allied with Bandaranaike in the 1970 election but then split
from her. A leftist protest vote would siphon votes from govern-
ment candidates and increase the National Party's chances of
winning the 85 seats it needs in the 168-member Assembly to
form a majority government.
I IShould the National Party win less than 85 but more
an 65 seats, it should still be able to form a coalition with
the 20 candidates certain to be elected as representatives of
the island's major ethnic minority group--the Tamils. The Free-
dom Party would have more difficulty winning the support of
Tamil representives, but could possibly patch together another
leftist coalition by making substantial concessions to the left-
ist parties.
I I Since its defeat in 1970, the United National Party
has trie to shed its image as a fiscally conservative party
of the wealthy for a more moderate image. While the party would
be unlikely to return the industries and tea estates nation-
alized by Bandaranaike's-government to private control, it would
not permit further nationalizations.
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The National Party's foreign policies might be more
openly pro--West than those of the present government, which
pursues a neutral policy. Jayewardene, however, would not com-
mand the respect that Bandaranaike has been accorded within the
nonaligned movement. Sri Lanka's moderating voice in Third World
forums--particularly the Nonaligned and Law of the Sea confer-
ences--could thus be muted.
The party that wins tomorrow may have little influence
on the ong-term problem posed by the island's largely unemployed,
locally educated, and increasingly disaffected youth. The coterie
of older, Western-educated politicians and businessmen that has
dominated Sri Lanka's established political parties and the
economy for years has been unable to inspire or even control the
youth, who see the economy as stagnant, society as decaying, and
the leadership as lethargic.
J When Bandaranaike suspended the national assembly in
February in order to avoid an embarassing no confidence vote,
the state of emergency that had been in effect. since an insur-
rection of young Sri Lankan radicals erupted in 1971 automati-
cally lapsed. Most of the former insurgents have since been re-
leased from jail and are busily reorganizing their supporters.
The principal insurgent organization, the People's Liberation
Front, is running candidates for 15 assembly seats.
Spain:
I I King Juan Carlos of Spain yesterday issued a royal
decree directing a three-month freeze on prices of goods and
services. Prices may only be increased to cover rises in pro-
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duction costs. The decree probably is a sop to labor, which
has criticized the government's recent 20-percent devaluation
of the peseta as inflationary.
The price control measure lacks stiff guidelines and
will be difficult to enforce. The government has yet to announce
details of its economic program dealing with inflation, includ-
ing statements on wage policy. credit expansion, and money sup-
ply.
Prime Minister Lynden Pindling and his Progressive Liberal
Party appear headed for a substantial victory in yesterday's
parliamentary election, the first since The Bahamas gained in-
dependence four years ago. With more than 60 percent of the
votes counted, Pindling's party was on the way to retaining 29
seats--and could win more--in the 38-member House of Assembly.
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