NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030900010152-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 19, 2016
• Document Release Date: August 12, 2005
• Sequence Number: 152
• Publication Date: January 3, 1979
• Content Type: REPORT

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Intelligence
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"Release 2005/08/17: CIA-RDP79TOO975AO309000,
'National Intelligence Daily
Cable
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National Intelligence Daily (Cable)
TURKEY: Interior Minister Resigns . . . . . . . . 3
RHODESIA: New Constitution . . . . . . . . . . . . 6
NICARAGUA: Demonstrations . . . . . . . . . . . . 8
BRIEFS . . . . . . . . . . . . . . . . . . . . . . 9
FEATURE ARTICLE . . . . . . . . . . . . . . . . . . 11
ITALY: Current Account Gains
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TURKEY: Interior Minister Resigns
The resignation yesterday of Turkish Minister of
Interior Ozaydinli and the appointment of Deputy Prime
Minister EqubogZu as acting Interior Minister do not
present an imminent danger to the stability of the gov-
ernment. EqubogZu, however, is a political rival of
Prime Minister Ecevit, whose political base is further
weakened. Other resignations are possible, but no defec-
tions from the government's parliamentary majority are
foreseen. The country is relatively calm, and martial
Law apparently continues to work.
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Many in Turkey expected Ozaydinli to resign follow-
ing the religious and political riots in late December
that forced the government to impose martial law in 13
provinces and weakened Ecevit's control of the Republican
People's Party. Earlier, party factions had frequently
criticized Ozaydinli because he refused to be bound by
considerations of political patronage when making person-
nel changes, but Ecevit had usually defended him. At 25X1
the Republican People's Party caucus yesterday, Ecevit
apparently deemed Ozaydinli to be expendable.
Eyuboglu has strong support in the Republican
People's Party, and Ecevit probably did not want him to
be acting Interior Minister. The Prime minister probably
agreed to Equboglu's appointment to assure the support
of the party's right wing in a coming vote on an opposi-
tion-sponsored censure motion.
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Ecevit should win this vote. Ozaydinli has stated
that he will continue to support the government as a
parliamentary deputy, and there is no indication that
any member of Ecevit's two-vote majority will vote for
censure.
Other government ministers, however, may resign.
Minister of Justice Can, Minister of Youth and Sports
Cakmur, and Minister of Tourism Coskun are reportedly
under pressure to resign their posts. Both Cakmur and
Coskun strongly support Ecevit.
The first week of martial law has passed without
major incidents but a major test occurs today when stu-
dents return to the campuses following a week-long vaca-
tion. F77 I
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stitutional referendum scheduled for 30 January.
The proposed Rhodesian constitution published in
Salisbury yesterday gives more control to whites than
envisioned in the internal settlement agreement reached
last March. By further entrenching the whites' position,
the new constitution offers a strong inducement for
whites to stay in the country, at least through the con-
The constitution perpetuates the existing politi-
cal structure with a ceremonial president, a strong
prime minister, a weak senate, and a strong house of
assembly. The whites already have been guaranteed 28
out of 100 seats in the assembly and a number of cabi-
net posts. They also will hold 10 seats in the 30-mem-
ber senate. The name of the new state is to be Zimbabwe
Rhodesia.
The proposed constitution establishes specific cri-
teria that would ensure continued white domination of
the defense forces, police, judiciary, prisons, and pub-
lic services. It requires, for example, that:
-- The commissioner of police, all branch commanders
in the defense forces, and all members of the
police and defense force commissions possess
senior rank and longevity in their appropriate
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-- Posts in the prison or public service be given
only to "the most efficient and suitable" can-
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didates.
-- The legal system remain unchanged and judges be
required to have practiced under it for at least
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All important provisions in the constitution are to
remain in force for 10 years. A five-member commission on
which the blacks are guaranteed only two seats will, for
example, review the guarantee to the whites of 28 seats
in the lower house 10 years after the change of govern-
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tion effort is now in question.//
//Nicaraguan opposition forces today begin a week
of antigovernment demonstrations in observance of the
assassination of opposition leader Pedro Joaquin Chamorro
last January. Civil violence and guerrilla strikes are
expected, but they probably will not imperil Nicara uan
President Somoza's government.//
//Nicaragua's past year of political turmoil was
touched off by Chamorro's assassination. The country has
been comparatively calm since international mediators
arrived in early October, but the future of that media-
//Moderate opposition leaders who participated in
the negotiations with the government may be anxious to
reaffirm their anti-Somoza credentials by organizing
demonstrations and perhaps work stoppages. The highly
emotional anniversary observances will give the opposi-
tion a better opportunity for coordinated activity
it has had in some time.//
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The seven heads of Western and Third World govern-
ments who met in Jamaica last Thursday and Friday ex- 25X1
changed views on a broad range of issues involved in the
North-South dialogue. As planned, there were no decisions
made at the informal gathering.
At the Jamaica summit with Schmidt and Jamaican
Prime Minister Manley were the heads of government of
Australia, Canada, Nigeria, Norway, and Venezuela.F
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//France blocked the scheduled start-up of the Euro-
pean Monetary System yesterday until other EC members
agree to change the Community's agricultural pricing
policy. Unless France, which now holds the EC presidency,
calls an early meeting of the EC's Agricultural Council
to deal with the problem, the monetary system is unlikely
to start up officially until after the next regular
rneetina of the Council on 15 January.//
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The Italian current account balance has improved
dramatically since 1976. The $7.5 billion in 1977 and
1978 surpluses has been used to repay debts and build
reserves to a near-record level. Italian Government
economists view the strong performance as a cyclical
phenomenon and are pushing a proposed three-year eco-
nomic stabilization program designed to slow inflation.
Critics contend that the surplus results from a perma-
nent decline in the propensity to import and argue for
a more expansionary policy. Although tourism should make
another strong contribution to the current account show-
ing in 1979, higher prices for imported oil, rising Labor
costs, stockbuilding, and Italian participation in the
European Monetary System will be pressing in the opposite
direction.
A number of factors contributed to last year's un-
precedented current account surplus--some fortuitous,
others policy induced. Low GNP growth and slack import
prices for some raw materials helped hold down the im-
port bill, while exports were up about 15 percent. Italy's
competitive exchange rate policy has helped Italian manu-
facturers maintain their world market share near its all-
time high. Flocks of tourists from northern Europe, en-
couraged by a bargain lira, pushed tourist s endin up
nearly 50 percent in 1978.1 1 25X1
Italy has been saddled with heavy medium- and long-
term debt, much of it official borrowing to cover bal-
ance-of-payments deficits in 1974 through 1976. A year
ago, Italy's gross medium- and long-term hard currency
debt--public and private--totaled $20.8 billion. Although
the debt service burden rose substantially in 1978, the
current account surplus has permitted punctual repayments,
thereby boosting Italy's international credit standing.
Official reserves in the past 12 months grew 28 percent
and now stand at a comfortable $9.6 billion.
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With the current account improving, Italy launched
a series of moves to ease exchange controls on exporters
and importers as well as Italian tourist spendings over-
seas. Peeved with the Italian penchant for slapping on
exchange controls whenever the lira is threatened, Italy's
JC partners have greeted the easing of restrictions with
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Government planners contend that austerity measures
have slowed import growth and that a firmer lira and
higher interest rates have discouraged speculative stock-
piling of imports. From this perspective, the surpluses
appear transitory; as soon as the government releases
the financial brakes, an import buying spree would swing
the trade account once again into the red. Wage and pub-
lic finance reform are needed, government economists con-
Lend, before Italy can attain stable growth.
Critics argue that the turnaround in Italian for-
eign accounts has been too sharp and too prolonged to be
explained by cyclical forces. They maintain that a struc-
tural shift has occurred, a permanent lowering of the
propensity to import. According to this line of reason-
ing, business firms have developed import substitution
measures and have switched to energy-saving production
techniques. Backers of the second theory contend that
Italy has been more successful than other major indus-
trial countries in this adaptation process because of
its greater reliance on small, flexible firms. Because
the improvement in foreign accounts is here to stay--
these dissenters argue--the government has ample free-
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Industrialists are advocating a return to fast
growth by diverting foreign exchange from rapid debt re-
payment to finance imports of capital goods and indus-
trial material. Similarly, the unions are insisting that
Italy not follow the West German practice of accumulat-
ing exchange reserves. They especially favor more spend-
ing to finance job-creating investment and economic de-
velopment in the Mezzogiorno underdeveloped south.
The Italian current account should make another
strong showing in 1979. Slippage on trade almost cer-
tainly will be offset by gains on invisibles, with tour-
ist receipts continuing to rise.
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As the economy picks up, import volume is likely to
register a sizable increase. New labor contracts slated
to be negotiated this winter for more than 5.5 million
workers will bring higher wages and probably shorter
hours. In the short run, as negotiations become more
heated, strikes and worker rallies are likely to multi-
ply, causing a reduction in output and exports.
The government's continued inability to stem in-
creases in transfer payments to state enterprises, local
governments, and welfare groups will add fuel to infla-
tion. In short, some erosion of Italian export competi-
tiveness appears unavoidable in the absence of lira de-
preciation.
Participation in the proposed European Monetary Sys-
tem, which will tie the lira to other EC currencies,
could also have a negative effect on this year's current
account performance. In recent years, Italy has been
able to preserve export competitiveness by allowing the
lira to de reciate against the currencies of most trading
rivals.
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