NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030400010022-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: November 13, 2006
• Sequence Number: 22
• Publication Date: October 26, 1977
• Content Type: REPORT

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Wednesday 26 October 1977 CG NIDC 77 248C
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National Intelligence Daily Cable for Wednesday, 26 October 1977.
25X1
The NID Cable is or the purpose o in orming
senior US officials.
PANAMA:
ITALY:
FRANCE:
Post-Plebiscite Prospects Page 1
Foreign Policy Agreement Page 2
Left Showing in Polls Page 4
WEST GERMANY: Economic Stimulation
Page 5
CHINA: Fertilizer Plant Problems
Page 7
UN - SOUTH AFRICA: Sanctions
Page 7
Page 8
BRIEFS:
Australia
El Salvador
Egypt
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PANAMA: Post-Plebiscite Prospects
/The government's two-to-one margin of victory
in Sunday's plebiscite on the Panama Canal treaties was on the
Zow side of pre-balloting estimates and is likely to spur the
opposition to increase its political activity. Chief of Govern-
ment Omar Torrijos' flurry of Zast-minute speechmaking and
interviews, while balanced on the whole, contained the seeds
of further controversy regarding treaty provisions.//
//Leaders of the Independent Lawyers Movement--
which led opposition to the treaty--as well as treaty negotia-
tor de la Rosa have already noted that the size of the negative
vote could lead to renewed political activity. The Liberal Party,
one of the two major factions before Torrijos seized power in
1968, may be preparing a constitutional challenge to the gov-
ernment's nine-year-old ban on party activities. The Liberals'
last-minute support for the treaties was designed, at least in
part, to prompt the government into allowing them greater po-
litical latitude after the plebiscite.//
//The election of Panama's large unicameral legis-
lature is scheduled for next year, and the political parties
hope to be able to renew their activity. Although the legisla-
ture has been little more than a rubber stamp for Torrijos, it
does choose the president. Panama's politicians now recognize
that it is the country's only legitimate political forum.//
//Sometime next year General Torrijos must decide
w e er o seek the presidency or revalidate his extensive
special powers as chief of government. In all likelihood,
Torrijos has not yet made a final decision.//
//The plebiscite vote does not provide a clear
indication o the extent of Torrijos' opposition or support.
Panamanians who voted "no" included not only those opposed to
the treaties, but also those who were voting against the Gen-
eral, against prevailing economic conditions, or perhaps even
against the Americans leaving.//
//The treaties appear to have run into the heav-
iest opposition in the city of Colon, where unemployment has
hit the hardest, and in Panama City, where anti-Torrijos senti-
ment among students and ultranationalists also played a part.
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The heaviest pro-treaty vote came from the General's home prov-
ince. The relatively free vote reflects the regime's consider-
able confidence both in the outcome of the vote and in its
ability to handle rekindled political interests.//
//Torrijos' speeches and interviews during the
days just before the vote will provide some grist for opponents
of the treaty. In interviews, he warned of violence if the
treaties were rejected in the US; he has usually played down
this possibility in public speeches--a standard Torrijos incon-
sistency. In his address to the nation last Thursday, during
which he read the text of the recent US-Panama statement on
neutrality and expeditious passage, Torrijos nonetheless gave
the impression that the US defense role could be exercised only
at Panamanian initiative.//
//Torrijos' remarks--not surprising given the do-
mestic political context--are unlikely to be the last in this
vein. In a post-plebiscite interview, negotiator de la Rosa
noted again that "the treaties are ambiguous--where we read
black, they will read white." In his first public comment on
the treaties, former Foreign Minister Boyd--who lost his job
earlier this year--called the neutrality treaty a legal absurd-
ity that a future government should try to correct through re-
course to the UN.
ITALY: Foreign Policy Agreement
A resolution presented in the Italian Senate
Last week marks the first formal agreement in the foreign poZ-
icy area between the governing Christian Democrats and the
five parties--including the Communists--that support Prime
Minister Andreotti indirectly by abstaining in parliament.
The resolution was introduced at the end of a routine
foreign policy debate by representatives of the six parties.
The document is cast in general and noncontroversial terms. It
supports, for example, a full discussion of European security
and cooperation issues at Belgrade, direct elections to the
European Parliament, the further integration of Western Europe,
and an equitable solution in the Middle East.
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The document's significance lies more in its existence
than its substance. During the three months of negotiations that
led to the government program agreement reached by the same six
parties last summer, the Christian Democrats successfully re-
sisted Communist efforts to include foreign policy in the ac-
cord. The Christian Democrats stressed the limited and emer-
gency nature of that agreement--it focused mainly on economic
policy and public order issues. By excluding foreign policy,
they sought to emphasize that the accord was not a general po-
litical agreement among the parties.
The Communists, however, are citing the Senate resolu-
tion as evidence that foreign policy is now part of the six-
party agreement and therefore subject to negotiation. They as-
sert, moreover, that the resolution merely formalized a situa-
tion that already existed; the Communists have said for some
time that their acceptance of Italian membership in NATO and
the EC has helped create a broad consensus on the main lines
of Italian foreign policy.
//The Christian Democrats have not yet responded
orma. y to the Communists' interpretation of the document. I
//The Communists' interpretation of the resolu-
tion does not presage an attempt by the party to alter the main
lines of Italian foreign policy in the near future; for now the
party's goal is simply to establish a position for itself in
the formal foreign policy process. Its stress on the importance
of the;resolution is probably also a trial balloon to see if
the Christian Democrats are ready to accept in principle the
id
ea of greater Communist involvement in the foreign policy
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FRANCE: Left Showing in Polls
The r?ft in the French Left AZZiance has
not Lessened the popular appeal of the Socialist Party nor
seriously damaged the image of its leader, Francois Mitterrand.
Polls conducted early this month show, in fact, that 49 percent
of those interviewed believe that the Socialists' chances in
the election next March have been enhanced by the steadfast
image they have projected in their L-quabble with the Communists
over updating their Common Program.
itterrand still has the esteem of a large majority
o the French. In one poll only 19 percent thought less of him
now than they did before the breakdown in the negotiations, and
these apparently are primarily Communist voters. Fifty percent
of Socialist voters said that the "crisis in the Left" would
not change their vote; 25 percent said that it would make it
easier for them to vote Socialist.
The Socialist Party continues to be perceived as the
party most capable o.f assuring good economic performance, pro-
tecting public liberties, and reducing social inequalities.
Voters ranked the Gaullists extremely low on these three issues.
Even so, those polled see Mitterrand's chances of
coming to power and his ability to maneuver as reduced. This
response reflects a recognition that the Socialists need Commu-
nist support on the crucial second ballot of the election in
order to gain the seats that could enable them to emerge as
the largest party in the Assembly.
There were some surprises in the responses of Commu-
nist voters. Despite the drumbeat of Communist propaganda
accusing Mitterrand and the Socialists of "swinging to the
right," only 17 percent of Communists voters believe that the
Socialists are in fact seeking an accommodation with the parties
in the governing coalition; 62 percent of the Communists believe
that the Socialists are seeking a reconciliation with them.
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68 percent of the French believe that the situation within the
Left has irrevocably changed. The dimensions of this change are
not clear to the voters. But the fact that more people now view
Mitterrand as closer to President G:Lscard than to Marchais-- 25X1
and realistically or not expect a Socialist-Giscardian coalition
in the event of a Left victory--indicates how fluid the political
situation has become.
WEST GERMANY: Economic Stimulation
Even if the Left eventually signs an electoral accord,
I arty Legislative approval in West Germany of a $6
z eon economic stimulation program appears virtually certain.
A joint parliamentary committee Last week agreed on a compromise
tax package that has the support of financial spokesmen in all
political parties. The Lower house is expected to pass the pro-
gram today, and approval by the upper house is expected at its
session on 4 November.
The tax compromise includes an increase in the basic
personal tax exemption, reducing the annual tax liability of
single taxpayers by $20 and that of married couples by $40. It
also provides for a deduction from taxable income that lowers
the annual tax liability of single -taxpayers by $50 to $125
and that of married couples by $100 to $250.
The noncontroversial provisions of the stimulation
program include an increase in the tax-exempt portion of
Christmas bonuses, a liberalization of depreciation allowances
on business assets, and a $1.3 billion increase in 1978 expendi-
tures by federal, state, and local governments.
The $6 billion program increases the prospects for
reaching the government's 4.5-percent GNP growth target for
1978. Its final effect, however, depends on the willingness
of cautious West German consumers and businessmen to spend
the extra money left them by the tax collector. State and local
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governments, moreover, may not follow through as strongly as
25X1 hoped with additional ex enditures.
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CHINA: Fertilizer Plant Problems
//China is not fully utilizing the recent
growth in its fertilizer production capacity because of con-
tinuing technical difficulties. If these problems persist,
China's fertilizer output could fall well short of the ambi-
tious 1980 target of 60 million to 70 million tons.//
In 1976, political unrest and earthquake damage com-
bined with various technical problems--mainly a lack of main-
tenance and poor operator control--to depress fertilizer out-
put. Despite a reported 27-percent boost in output during the
first eight months of this year, China's newly installed fer-
tilizer plants remain underutilized. Six of the new ammonia-
urea complexes--which are among the world's largest--apparently
produced only about half of their potential output of 5 million
tons during the January to August period.
In recent years, China has purchased 13 giant fertil-
izer complexes from the US, Japan, France, and the Netherlands.
Six of the plants are currently in operation and five more are
scheduled to begin production next year. The remaining two will
not come on stream until at least 1979. These plants may be
modified to use naphtha feedstock instead of natural gas be-
cause of a delay in the construction of the natural gas pipe-
line originally intended to service the plants, 25X1
/African delegates at the UN Monday called on
t e Security Council to apply mandatory economic sanctions and
an arms embargo against South Africa. The Africans Left no doubt
that after Last week's crackdown on dissidence by the South
African Government they will no Longer find palatable "mere
condemnations" of South Africa.//
//The coordinating bureau of the nonaligned states--
which purports to represent 86 members of the UN--on Friday
called for a time limit to the Western states' negotiations
with South Africa over the future of Namibia. It also advocated
mandatory sanctions and an arms embargo against Pretoria should
the deadline not be met.//
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//Delegates of the five current Western members of
the security Council--the UK-, France, West Germany, Canada, and
the US--caucused after yesterday's Council meeting. As in the
case of the public debate, the US was the focal point; the
other Western states expressed particular concern over the need
for time should the US be willing to go much beyond past Security
Council statements on South Africa.//
//UK delegate Richard said his government could
probably agree to "something on arms and investments" but indi-
cated that the UK would veto any resolution calling for manda-
tory economic sanctions. The Canadian and West German delegates
said that their governments would have constitutional problems
with a resolution calling for restrictions on investments in
South Africa.//
//The Security Council will reconvene Tuesday to
continue its discussion of the situation in South Africa.
//Australian Prime Minister Fraser on Monday con-
firmed speculation that he will call an early election, prob-
ably in December or next spring.
//The Fraser government, elected two years ago
with a record parliamentary majority, is not obliged to hold
an election until early in 1979. It realizes, however, that
the depressed economic situation is unlikely to improve sig-
nificantly over the next year.//
/By moving now on the election, moreover, Fraser
is capitalizing on public approval of his decision, announced
in August, to allow the mining and export of uranium--fought
by the Labor Party opposition. He is also taking advantage of
public annoyance over disruptive: strikes by Labor Party-sup-
ported trade unions. C
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(told the US Defense Attache in
San Sava or that a group within the Salvadoran Government is
preparing to stage a spectacular terrorist act, possible di-
rected against US officials, to occur around the time of the
arrival of new US Ambassador Devine today. The Machiavellian
purpose of the government group--allegedly close to President
Romero--is to demonstrate the serious subversive threat facing
the government so the US will provide greater aid.//
//Rumors of involvement in terrorist actions by
disc_jruntled military officers, perhaps in collusion with ex-
tremists among the wealthy rightist elite, have persisted in
El Salvador for the last year. The two groups have been dis-
satisfied with Romero's failure to take firm action against
leftist terrorism. While these stories are unsubstantiated and
the latest plot to be reported seems unlikely, both groups are
capable of such action.
Egypt
Egyptian President Sadat last night made public his
cabinet shake up, in which the key members of the outgoing gov-
ernment--Prime Minister Salim, Planning Minister Qaysuni, Foreign
Minister Fahmi, and War Minister Gamasy--were retained in their
posts. Sadat named seven new ministers, but the changes appear
to be largely cosmetic and designed to reduce popular frustra-
tions by fostering the impression that Sadat is assembling a
team better able to deal with pressing economic problems and the
Middle East peace negotiations.
Recent articles in AZ-Ahram had implied that Salim
would continue as Prime Minister despite his lack of personal
popularity and his generally poor performance in running the gov-
ernment and in leading Sadat's centrist party in the Egyptian
Parliament. He did lose his post as Interior Minister, however,
reflecting Sadat's disappointment over Salim's failure to con-
tain the recent upsurge in extremist activity by both the right
and the left in Egypt. F__ I 25X1
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