NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030800010064-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 16, 2016
• Document Release Date: May 11, 2005
• Sequence Number: 64
• Publication Date: September 7, 1978
• Content Type: REPORT

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Thursday 7 September 1978 CG NIDC 78/209
NATIONAL SECURITY INFORMATION
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National Intelligence Daily Cable for Thursday, 7 September 1978
ITne NID Cable is for the purpose of informing
senior officials.
OPEC: Decline in Disbursements
CHINA: Chang's Visit to Japan
PERU: Mineworkers' Strike Ends
USSR: Widening Trade Deficit
TUNISIA: Bourguiba Returns
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I fret disbursements of concessionary economic aid
by members of the Organization of Petroleum Exporting Countries
will probably faZZ this year by at Least 20 percent after reach-
ing a record of $5.8 billion in 1977. The conservative Arab
Gulf states, although still providing the bulk of OPEC aid, are
cutting back their programs, and Iran's transfers probably will
faZZ by as much as 50 percent. Only Libya and Iraq will increase
The conservative Arab Gulf states continue to
receive enormous sums from oil sales and have large foreign
assets. Some are encountering intermittent cash shortages, how-
ever, because of poor budgeting, reduced oil sales, high imports,
international inflation, and the declining value of the dollar.//
//The Arab confrontation states, which depend on
the u onors, will be most severely affected by the aid re-
ductions. Disbursements to Egypt will decline sharply in 1978 25X1
nearly exhausted capital of their Gulf Organization for the De-
velopment of Egypt.
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CHINA: Chang's Visit to Japan
Chinese Deputy Chief of Staff Chang Tsai-chien will
begin an "unofficial" six-day visit to Japan tomorrow before
proceeding to Mexico City to attend Independence Day ceremonies.
Chang, the third-ranking Deputy Chief of Staff, is the first
senior Chinese military official to visit Japan. China sees the
visit as another way to irritate the Soviet Union, which is still
angered by the signing of the Chinese-Japanese Peace and Friend-
ship Treaty Zast month but, for precisely this reason, Japan is
likely to handle the visit in a Zow-key fashion.
25X1 Since early last year, China has invited several groups
ot retired Japanese military officers and academic defense spe-
cialists to visit China, in part to sell Chinese views about the
Soviet military threat in Asia. Japanese delegations this year
have met with senior Chinese officials, including Defense Minis-
ter Hsu Hsiang-chien and Deputy Defense Minister Su Yu. In March,
the first active-duty Japanese military officer not accredited
as a regular attache visited Peking as the leader of a Japanese
Defense Agency intelligence team.
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and, aware o Moscow's sensitivity to any proposed arms sale to
China, has avoided the suggestion of direct military links with
Peking.//
Tokyo has imposed an embargo on all arms sales
//Even so, the Chinese may hope that the visit
will provide a formal entree to the Japanese defense establish-
ment and that Tokyo may eventually reconsider the possibility
of military cooperation.// China obviously wants to create the
impression, particularly in Moscow, that broader Chinese-Japanese
cooperation is in the offing.
I I The USSR has already shown its concern over the visit,
c arging in a broadcast on Tuesday that the visit would pave
the way for a "Japan-China military alliance in the future
under the wing of the US."
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PERU: Mineworkers' Strike Ends
I A firm stand by Peru's military government seems fi-
naZZy to have ended an economically crippling miners' strike,
but scheduled budget cuts in the public sector Zed to a new
protest yesterday by government workers.
Most of Peru's 50,000 striking mineworkers returned
to their jobs on Monday and Tuesday following government threats
of dismissal. Several members of some remaining strikers' fam-
ilies reportedly were wounded yesterday when troops forcibly
evicted them from Lima's San Marcos University. In protest, strike
leaders called for a resumption of the walkout on Monday, but it
is doubtful that many miners, now weary of the month-long strike,
will respond.
I ITheir month-long strike, which effectively shut down
most of 'he industry, cost the economically troubled country
approximately $75 million in lost revenues.
I IThe government's threat to fire striking miners, coupled
WiLn IT_ efusal to reinstate 320 miners dismissed during the past
18 months, appears to signal a tougher line on union demands and
could trigger further disruptive strikes. Dissatisfaction is al-
ready growing among public sector workers over reports that the
government plans to dismiss 30,000 of them to demonstrate fiscal
restraint as part of its new economic stabilization program.
I I During a widely observed strike of state employees in
Lima yes erday, parades tied up traffic for several hours and
security forces used tear gas to break up some demonstrations.
The government workers are still poorly organized but, should
they gain the support of the large trade union confederations,
the government could face a serious new wave of labor strife.
Constituent Assembly President Victor Haya de la Torre
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succeeded late last month in diverting. the assembly's attention
from the country's labor troubles long enough to conclude debate
on internal rules of procedure. The assembly will now break up
into committees to begin the drafting of a new constitution.
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USSR: Widening Trade Deficit
deficit in the first half of 1978 as heavy imports of grain
pushed hard-currency imports to a record ZeveZ. Non-grain im-
ports are also on the rise, an indication that Moscow is satis-
fied that it has regained control of its balance of payments.
We project that the USSR will have a hard-currency trade defi-
cit of about $4 billion, which it will have little troubl=e
financing through gold sales, arms sales, and long-term govern-
ment-backed credits for equipment.
The USSR registered a $3 billion hard-currency trade
billion more than the first half of 1977, reflecting heavy pur-
chases following the downturn in the 1977 crop.
billion--was greater than expected because of a turnaround in
non-grain imports, which had fallen steadily throughout 1977
as a result of Soviet efforts to reduce the hard currency trade
deficit. Equipment imports are running higher than expected.
Oil imports from Iraq increased by $80 million to $347 million.
Grain imports also increased to an estimated $1.6 billion, $1
The rapid rise in imports--from $7.7 billion to $8.8
25X1 Soviet hard-currency exports increased 14 percent
over the first half of last year to $5.8 billion on the strength
of higher exports to certain developing countries. Exports to
Western industrial countries, with the exception of West
Germany, declined.
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a drastic deterioration in prospects for the Soviet grain
crop--which now appear excellent--grain imports will be down
by as much as half in the last six months of the year. Current
contracts call for $600 million to $800 million worth of grain
shipments to the USSR in the third quarter. Moscow has yet to
place its orders for the current crop year, and scheduled de-
liveries for the fourth quarter are negligibile.
the first half level, with imports down and exports up. Barring
The deficit in the second half should be well below
25X1 Equipment imports are likely to fall below their cur-
en pace. Equipment orders, a reliable lead indicator for im-
ports, fell by 40 percent in 1977 and remained at the sane low
annual rate through the first half of 1978. Minister of Foreign
Trade Patolichev has explained that the USSR's reduced level of
equipment orders is due to construction bottlenecks and that
problems would continue for another year or two.
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what higher because of seasonal factors. A large increase, how-
ever, seems precluded by the slow pace of Western growth. Oil
exports, the mainstay of Soviet export gains in recent years,
will probably grow little this year. There has been no price
increase, and export volume to hard-currency countries will
probably be about the same as the 1977 level of 1.1 million bar-
rels per day.
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Exports for the remainder of the year should be some-
TUNISIA: Bourguiba Returns
Tunisian President Bourguiba--accompanied by his
wife--returned to Tunis on 31 August from a two month stay in
Switzerland and Franr rest and medical treatment. The
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contentious po itica decisions at w2 affect the
political climate in Tunis over the next several months.
The basic issue facing the Tunisian leadership is
whether to adopt a policy of political liberalization and
seek reconciliation with domestic opponents or to continue
the present hardline approach to political opposition. A
conciliatory approach would be embarrassing but not fatal to
Prime Minister Nouira and other conservatives in the present
government.
I I Bourguiba, whose authority is unchallenged, may none-
theless seize the opportunity to impose a political compromise
that he hopes would mollify domestic critics. The return of
Bourguiba's wife--who is said to favor reconciliation and has
had two months to influence the President's thinking--further
suggests the government will seek an accommodation.
The most immediate problem is the legal disposition
of some 100 labor activists who are being tried for their
alleged role in the rioting that accompanied the country's
first general labor strike last January. The Tunisian Court
of Cassation--in effect, the supreme court--has upheld a lower
court decision that there were insufficient criminal grounds
to try the case. The government has now decided to refer the
case to the state security court.
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25X1 Former labor leader Achour, who is still awaiting
trial, wi 1 also be brought before this court. It is likely,
however, that once Achour and other labor activists are con-
victed on at least some of the charges, Bourguiba will exercise
his constitutional right of pardon to signal his desire for re-
conciliation.
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The government will also have to decide how to react
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to international and domestic charges that Tunisian security
personnel tortured some labor activists. If a conciliatory
policy is in the offing, the government will probably avoid an
official response and hope that such criticism will dissipate.
Another pending issue is whether the government
will grant legal status to the liberal opposition political
party, the Movement of Social Democrats. The government is
likely to let the pending application lapse, but it may
approve the party sometime next year. In the interim, efforts
will be made to energize the ruling, but largely moribund,
Destourian Socialist Party.
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Syrian Foreign Minister Khaddam visited Libya yester-
day. The trip may be part of an effort to convene a third sum-
mit of the "Steadfastness Front" of Arab hardliners formed last
December to oppose Egypt's peace initiative. Recent Arab press
reports have speculated that discussions are under way among
the Front's members--Syria, the Palestine Liberation Organization,
Libya, Algeria, and South Yemen--about holding a summit in
Damascus after the Camp David talks end.
I I Syrian President Assad strongly criticized the Camp
David to s in a speech yesterday, warni that Syria would not
be bound by any decisions reached there.
Afghanistan
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On Tuesday, the Afghan Government informed the US,
the UK, Iran, Pakistan, Yugoslavia, and possibly Czechoslovakia
that it is recalling its ambassadors to those countries. The am-
bassadors--members of a faction led by former Deputy Prime Mini-
ster Babrak Karmal, President Taraki's main rival in the ruling
People's Democratic Party--were exiled to these posts in late
June and early July.
Taraki apparently believes the men still represent a
security threat, and he probably suspects them of plotting with
supporters still in Afghanistan and other opponents of the
regime. Few of the ambassadors are expected to return to Kabul.
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