NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030900010140-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 20, 2016
• Document Release Date: September 20, 2006
• Sequence Number: 140
• Publication Date: December 26, 1978
• Content Type: REPORT

25X1
Director of Top Secret
Intelligence
National Intelligence Daily
(Cable)
State Dept. review
completed
DIA review(s) completed.
Top Secret
CC, NIQC 7R-0299C
25X1
26 December 1978
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National Intelligence Daily (Cable)
CONTENTS
NICARAGUA: National Plebiscite . . . . . . . . . .
CHINA: Central Committee Plenum . . . . . . . . . 4
SPAIN: Political Maneuvering . . . . . . . . . . . 6
IRAQ-SYRIA: Rapprochement . . . . . . . . . . . . 8
TURKEY: Martial Law Declared . . . . . . . . . . . 9
SOUTH YEMEN: Security Problems . . . . . . . . . . 10
BRIEFS . . . . . . . . . . . . . . . . . . . . . 11
China
China-Vietnam
USSR
FEATURE ARTICLES . . . . . . . . . . . . . . . . . 13
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//Nicaraguan President Somoza has rejected signifi-
cant portions of the Latest proposal by international
mediators for a national plebiscite and transitional re-
gime; his action raises serious doubt that continuation
of the mediation effort is possible. Somoza has Left
open the possibility of further talks, but he is appar-
ently now more confident of his ability to retain power
and will yield ground only to buy more time to cement
his position. A collapse of the mediation effort will
enhance the prospects for concerted guerrilla action and
civil unrest.//
//Somoza's representatives advised that they would
be making counterproposals in due time, but this is prob-
ably a maneuver to avoid bearing the onus of having under-
mined the mediation. Their objections to the latest pro-
posal--questioning the basic concept of an internationally
supervised plebiscite on Somoza's continuation in office--
represent a step backward.// 25X1
//The Nicaraguan President's dilatory tactics in
the mediation have added to the strains on the unity of
the Broad Opposition Front. He has meanwhile significantly
increased the size of the National Guard, which now has
about 10,000 men, and acquired more munitions. The Guard,
moreover, has been successful against the Sandinista
guerrillas in recent clashes, and the guerrillas appear
for the present to have abandoned plans for an all-out
offensive. Venezuela, Panama, and Costa Rica have reduced
their pressures on Somoza, and completion of coffee and
cotton harvests in the next few months will hel ease
Nicaragua's critical financial squeeze.// 25X1
//Collapse of the hope for peaceful change through
mediation, however, will probably help galvanize those
who oppose Somoza inside Nicaragua and abroad. Public
and foreign support will likely increase for the Sandin-
ista guerrillas since many regard the guerrillas as the
only means remaining to oust Somoza. The guerrillas will
not resolve their ideological, tactical, and personal
differences overnight, but over time Nicaragua should
experience even greater polarization and spiraling vio-
lence.
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//The plenary session of the Chinese Communist
''arty's central committee that ended Friday endorsed a
~~ange of personnel and policy decisions that on balance
further strengthen the position of Vice Premier Teng
f,siao-ping. Teng, however, apparently had to settle for
less than he wanted on some issues important to him. The
plenum failed to come to grips with some of the same con-
1roversiaZ political issues that had reportedly sparked
"violent" clashes during the month-long preparatory meet-
25X1 ings for the plenum.//
//The plenum's decision to "shift" the nation's at-
tention away from the mass political campaign of the
past two years and toward the economic modernization
program was linked to party Chairman Hua Kuo-feng and
probably did not have Teng's whole-hearted support. Teng
has successfully used the criticism of the ousted Gang
of Four to rid himself of some lower level opponents and
to undermine the position of some political enemies at
the top. Although Teng is as eager for economic
progress as Hua, he seems to believe that the best way
Lo ensure such progress is with a thorough housecleaning
of politically suspect individuals. Several such people
remain on the party politburo, although they apparently
were criticized during the session and probably lost
much of their actual power during the plenum. Teng may
press for their formal removal at a later date.//
New appointments to the politburo and the rehabili-
tation of formerly disgraced officials seemed to reflect
compromises. Several younger officials close to Teng who
were rumored to be in line for politburo posts did not
get them. The four new members, however, are all close
to Teng. Among these, the most significant is Hu Yao-pang.
Hu controls party promotions, demotions, purges and re-
cruitments and, at 63, is in a position to ensure that
future leadership groups contain many pragmatic officials
25X1 like himself and Teng.
Hu's inclusion on the newly established party dis-
cipline committee gives Teng a watchdog on the entity
that probably will monitor the implementation of policies
at lower levels to make sure that local officials do not
ignore or alter them. The committee's head is economic
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specialist Chen Yun, who has. been restored to the party
vice chairmanship he lost in the 1960s, leapfrogging Wang
Tung-hsing, an opponent of the effort to desanctify Mao
Tse-tung.
Of
the four officials who were politically rehabili-
tated,
neither of the two still living was named to
25X1
either
former
the politburo or the central committee. The
party boss of Peking, whose return seemed in the
offing, did not appear a possible rebuff for Teng.
The complexion of the central committee is more de-
cidedly "Tengist" than earlier. Nine new members were
named, all of them in the Teng camp. The number of mem-
25X1
bers who attended the plenum was a sharp drop from the
number elected in August 1977, indicating a high rate of
casualties from the Teng-inspired political purge.
The plenum's announcement on the legacy of Mao did
not explore this question at length but did acknowledge
Mao's fallibility and urged that his work be evaluated
from an historical and scientific perspective. This issue
was apparently one of the most controversial, along with
the closely related subject of assessing the Mao-inspired
Cultural Revolution. The plenum completely sidestepped
that issue, indefinitely postponing an evaluation of that
event until "an appropriate time." I 25X1
Teng is likely to continue his push for removal of
political opponents and correction of historical mistakes
and this will keep him at odds with those in the leader-
ship eager to paper over their differences in the inter-
ests of steady economic progress. Conflict within the
leadership over such issues is not likely to adversely
affect the implementation of policy, but Peking's failure
even after the plenum to publish a list of politburo mem-25X1
bers in order of their political importance attests to
continued behind-the-scenes disagreements.
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SPAIN: Political Maneuvering
opt for a vote of investiture or a general election.
ipation of Prime Minister Suarez' decision on whether to
Political parties in Spain are maneuvering in antic-
gation--now scheduled for Thursday.
Suarez' term of office does not expire until 1981,
but the constitution ratified on 6 December requires him
to seek a new mandate for his government, and he must
make his decision within 30 days of the charter's promul-
A general election could give Suarez the additional
11 seats he needs to achieve a majority in parliament,
but he might equally well lose ground to his rivals, the
Socialists. A parliamentary vote of investiture--which
requires only a simple majority--would be a safer bet,
but it would leave Suarez de endent on other parties in
the difficult times ahead.
Rumors increasingly point to a third alternative:
investiture now and an election in the near future when
Suarez feels that the odds are more in his favor. In any
case, he is not likely to announce his decision until
next month.
In keeping with his tactic of throwing the opposi-
tion off balance, Suarez has reportedly offered the Com-
munists a chance to enter the "governing majority." Com-
munist leader Carrillo boasted of the offer to the So-
cialists but would not elaborate on the terms of the al-
leged proposal or reveal whether Suarez meant participa-
tion in the government as opposed to the parliamentary
majority.
Suarez would allow Communists into the government.
ness of the viscerally anti-Communist military--that
Suarez may be angling for the support of the 20 Com-
munist delegates, but he would probably stop short of a
formal pact tying the party to his government. In any
case, it is highly unlikely--given the current restive-
It seems more likely that Suarez' approach to the
Communists was designed to worry the Socialists who have
been concerned for some time by signs of "Italian-style"
cooperation between the government and Communists. Suarez
has used Communist sup ort before as a lever to pry the
25X1 Socialists into line.
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25X1
In the short term, Suarez may be seeking to resolve
differences that have bogged down talks on renewing the
pact concluded last year under which the major parties
cooperate on economic issues; the pact expires this
month. More generally, he may hope to extend the period
of political consensus that has characterized the past
two years. In the absence of a strong government, how-
ever, the very real problems ahead--stepped up Basque
terrorism, autonomy demands, unrest in the military, and
persistent economic difficulties--all argue for continued
cooperation between the major parties. 25X1
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IRAQ-SYRIA: Rapprochement
The developing political rapprochement between Iraq
and Syria has been accompanied by a vigorous expansion
of bilateral economic relations. In Late November, a
EJyrian delegation signed agreements to export $18 million
in consumer goods to Iraq--Syrian exports to Iraq in 1977
totaled $10 million. In the past few days, Iraq announced
reciprocal contracts were signed for the export of $12.5
million worth of household products to Syria. Although
no settlement has been reached on the reopening of the
Iraqi-Syrian pipeline, Iraqi Oil Minister Taveh Abdul
Karim recently declared that oil will soon begin to flow.
0
Since early December, Iraq and Syria have exchanged
at least three commercial and trade delegations and have
established a joint economic committee and subcommittees
on trade, oil, and water. The Iraqi Planning Minister has
stated that these committees will study joint development
of the two countries, which will coordinate their plan-
ning periods.
While there are limits to the amount of trade the
two countries can generate between themselves, the Iraqi
market could prove valuable to some Syrian public sector
industries that produce more than the domestic market
can absorb. Syria's small private manufacturers, ham-
strung by legal and regulatory restrictions in their
domestic market, may also find a ready market in Iraq.
For its part, Iraq's major export will undoubtedly con-
tinue to be light crude oils.
Reopening the Iraqi-Syrian pipeline--which has been
shut down since April 1976--rests on resolving questions
of fees and pipeline utilization and the prices Syria
will have to pay for Iraqi oil. Once these issues are
resolved, it will take several months to put the line
in operation. Reopening of the line would provide Syria
with $150 to $200 million in transit fees each year.
Crag's gains from a reopening of the pipeline would be
mostly political; Baqhdad would gain flexibility to deal
with changing oil market conditions and would be less
vulnerable to pressure from Turkey, which now controls
a section of Iraq's only operating pipeline to the Med-
iterranean.
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The Turkish Government's declaration of martial Law
early this morning in 13 provinces, including Ankara and
Istanbul, is a significant departure from Prime Minister
Ecevit's Zong-held policy of not using the military to
control violence. Ecevit has-been under increasing pres-
sure to control the continuing religious and political
clashes, which have claimed over 600 Lives this year,
and he may fear defections from his government if he
fails to push for strong measures. I 25X1
The latest rioting began Friday, when a clash be-
tween rival religious groups was followed by widespread
looting and burning. Nearly 100 persons were killed in
the rioting, and when troops sent in to quell the vio-
lence were attacked by the rioters, Ecevit finally agreed
to declare martial law. I 25X1
Ecevit has been able to resist pressures for using
the military because most of the violence has involved
competing religious and political groups, who have di-
rected their efforts at each other and not at the govern-
ment. The Turkish military has supported Ecevit's avoid-
ance of repressive tactics because it has been badly
stung by previous experiences with martial law. I] 25X1
Now, however, Ecevit is being pressed by members of
his Republican People's Party, as well as the opposition25X1
to take a firm stand. Despite his personal distaste for 25X1
repressive measures, Ecevit may have little choice if he
wants to avoid a further weakening of his position. Q;~
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SOUTH YEMEN: Security Problems
//South Yemeni-sponsored subversion and tribal feud-
ing are worsening security conditions in North Yemen.
in early improvement in the situation is unlikely. Over
fhe long term the government in Sana faces the prospect
of a gradual lessening of its control over outlying
areas, particularly those adjacent to the border with
25X1 south Yemen.//
According to a recent US Embassy assessment, South
Yemeni - sponsored subversion against North Yemen poses
a serious threat to the internal security. Several "ter-
rorist-type" incidents have been reported in recent
weeks, particularly in areas near Taizz. Incidents have
included the assassination of local officials, planting
of land mines, attacks on road construction crews, and
t-.ruck hijackings. Stories are also circulating that ter-
rorists have attacked the bodyguards of the Vice Presi-
dent and the Minister of Interior.
Inhabitants of the affected areas are pressing the
government to act forcefully to control the situation.
North Yemeni President Salih reportedly has sent two of
his most reliable military commanders to the trouble
spots to reassert the central government's authority,
but these and other countermeasures have not proven ef-
25X1 fective so far.
//North Yemeni officials have been pressing for the
early delivery of Saudi Arabian - financed US arms and
have some reason to emphasize to US officials the threat
they face from South Yemen.//
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China's economy continued to recover strongly this
year from the political turmoil of 1976. Based on pro-
jected year-end figures announced by Peking, GNP has
grown by about 10 to 11 percent with industrial output
up sharply, perhaps by 13 to 15 percent, and agricultural
output up moderately, by nearly 4 percent. 25X1
The growth rate in industry exceeded the "over 10-
percent" average annual rate the Chinese leadership hopes
to achieve between 1978 and 1985. Steel spearheaded the
industrial advance; output increased by 29 percent, or by
7 million tons. Production of coal, cement, and chemical
fertilizer also rose substantially. 25X1
The estimated production of 295 million tons of food
grains--9 million tons above the 1977 level--is a record
high. Peking put the early grain harvest at 10 million
tons above last year's; a severe drought in some rice-
producing areas, however, has probably kept the late har-
vest at or below last year's level. The growth in agri-
cultural production as a whole was slightly less than the
4-percent to 5-percent annual rate stipulated for the
period between 1978 and 1985. 25X1
After the border incident on Saturday in which nine
Chinese and three Vietnamese apparently were killed, Pe-
king stepped up the level of its warnings to Hanoi with
a "strong protest" through diplomatic channels on Satur-
day and a lengthy People's Daily editorial yesterday.
Details of the fighting are murky, but it apparently in-
volved armed militia and border guards, not regular
forces. Hanoi announced after the incident that rail
service between the two countries had been suspended,
apparently indefinitely. I I 25X1
The Chinese editorial recounted a long list of com-
plaints against Vietnam, connected these "anti-China"
activities with Hanoi's efforts to subjugate Kampuchea,
and concluded with the warning that the Vietnamese will
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 The USSR is giving high priority to the development
of nuclear and hydroelectric power in order to reduce its
reliance on oil and gas. The Minister of Power and Elec-
trification recently announced a long-range plan to in-
crease the production of electric power at nuclear and
hydroelectric plants to one trillion kilowatt hours--
about 45 percent of total electricity output--in the
25X1 next 10 to 12 years.
In view of past problems and an inadequate indus-
trial base to supply the nuclear construction program,
the goal for nuclear power--about two-thirds of the
planned increase--is probably well beyond reach without
assistance from Western countries. The Soviets will need
100,000 megawatts of nuclear generating capacity to reach
the 1990 output goal. Their total capacity now is only
about 7,200 megawatts, and an additional 3,000 megawatts
is scheduled to go into operation by the end of this
25X1 year.
receive "the punishment they deserve" if the provocations
continue. It is the clearest public sign to date that
Peking hopes to deflect Vietnamese pressures on Phnom
Penh by maintaining a high level of tension on the Sino-
Vietnamese border.[ I
Most new hydroelectric stations will be located in
the eastern USSR, away from the most populated areas.
The 1990 goals for hydroelectric power stations--about
one-third of the overall one trillion kilowatt hour goal--
may be attainable, although these hydroelectric stations
have a much lower operation cycle than nuclear plants.
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 After less than a month in office, Bolivia's con-
:.ervative President Padilla faces serious labor unrest
and growing disaffection within the highly politicized
military establishment. So far, he has not asserted au-
thority over his administration, which is dominated by a
loosely knit group of junior officers pushing for na-
tional elections by next July. Padilla will probably not
last as President until then. He has not shown that he
has the skills to cope with deepening economic problems
and the highly conspiratorial political environment.
Rumors of coup plotting are already widespread and a
move against the government could come at any time.
Late last month, the government reached a wage
agreement with the state-owned mining confederation, but
mineowners' claims that they cannot afford to grant major
salary increases have complicated negotiations with unions
in the private sector. If a general accord is not reached
in the near future, the mining confederation threatens
to initiate an industry-wide strike. The mining industry
is Bolivia's major source of foreign exchange earnings.
Transportation, telephone, and public utility work-
ers last week called a general strike to force the gov-
ernment to grant salary increases and more union autonomy
and to meet its financial obligations to the national
railway enterprise. Padilla has not indicated how he in-
tends to deal with labor's demands, but the nation cannot
afford to lose its rail service to key mininq areas for
any length of time.
//To try to shore up his political position Padilla
may eschew unpopular economic austerity measures recom-
mended by the International Monetary Fund to ease Bolivia's
balance-of-payments difficulties. According to several
reports, the government was prepared to raise prices of
petroleum products and was seriously considering a de-
valuation of the Bolivian peso. Now, however, the Presi-
dent has reportedly decided against such moves. He
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undoubtedly reasons that the austerity measures would
play into the hands of his civilian and military foes and
undermine the business community's already shaky confi-
dence.//
//Military opposition to Padilla's government is
also keeping the situation unstable. Conservative offi-
cers fear that a rush. to elections will allow former
President Siles Zuazo; who has extensive leftist connec-
tions, to gain power--an intolerable development for
them.//
Officers of the Bolivian armed forces are deeply
divided between those who believe that they should re-
vitalize their professionalism by retiring from politics
and those who fear that elections will breed more politi-
cal instability by bringing a leftist or Marxist govern-
ment to power. These tensions worked to undermine Presi-
dent Pereda's government, and Padilla's seizure of power
has not calmed the officers. 25X1
The situation has been further complicated by the
Padilla government's shoddy treatment of former President
Banzer, who provided Bolivia with the longest period of
political and economic stability the country has known.
Late last month, for example, the government reconfirmed
Banzer as Ambassador to Argentina only to dismiss him
abruptly two days later. II 25X1
Banzer exiled several of the junior officers who
now wield power. Their anti-Banzer sentiment is not at
all pervasive in the armed forces, however, and efforts
to discredit the former president could backfire.
The US defense attache in La Paz believes that Army
Commander General Azero is the most likely to lead a coup
against Padilla. Although Azero appears to be loyal to
Padilla's government and is publicly supporting elec-
tions, he shows signs of being an opportunist and could
betray Padilla as he did Banzer and Pereda. 25X1
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with. all these factors in play, the situation is
highly unstable. The fragile military unity that Banzer
was able to sustain during his lengthy tenure is rapidly
disintegrating as both active-duty and retired officers
maneuver behind the scenes. Bolivia once again appears
to be sliding toward the political chaos that has in-
hibited policy formulation and economic growth for most
of its history.
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