NATIONAL INTELLIGENCE DAILY (CABLE)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031200120001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: April 2, 2004
• Sequence Number: 1
• Publication Date: March 14, 1979
• Content Type: REPORT

Director of
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~' . Intelligence
National Intelligence Daily
(Cable)
State Dept. review completed
Top Secret
Top Secret
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National Intelligence Daily (Cable)
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Situation Report
North Yemen - South Yemen . . . . . . . . . . . 1
Briefs and Comments
European Community: Summit Concluded
Grenada: Marxist Coup . . . . . . . . . . . . 3
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Southern Africa: Drought Damage. . . . . . . . 7
Namibia: South African Raids Continue. . . . . 8 25X1
Chile-France: Mirage V Purchases . . . . . . . 9
Special Analysis
Morocco: Hassan's Growing Problems . . . . . . 10
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No new developments in the conflict between North
and South Yemen have been re orted and attempts to mediate
the dispute continue.
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No further fighting was reported along the border
between North and South Yemen yesterday following the an-
nouncement of Aden's agreement to the cease-fire and
troop withdrawal. We have no evidence, however, that
South Yemen has begun to pull back its forces from North
Yemen. F77 I
Arab League representatives are continuing mediation
efforts, and Baghdad radio reports that the chiefs of
staff of the two countries will meet in Sana tomorrow.
Some normalization measures, such as reopening telephone
contact between the two countries, already have been
implemented.
The Yemeni summit meeting set for Kuwait on 28 March,
however, will have to grapple with more difficult issues.
The Kuwaiti Ambassador in Sana has informed the US Embassy
there that South Yemen is insisting that as part of the
overall cease-fire agreement, Kamaran Island, which was
occupied b North Yemen in 1972, be returned to southern
control.
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//The EC summit concluded yesterday in Paris, but in-
rormation on the discussions is stiZZ sketchy. The new
European Monetary System, agriculture, energy, the future
of Euratom, and employment policies all received hi h-
leveZ attention during the past week.//
//On Monday, the heads of government confirmed that
the EMS would begin yesterday. This had been made pos-
sible by France's earlier removal of its reservation and
the informal agreement among all EC members except the
UK on some agricultural issues. In Paris, the UK again
called for a freeze in farm prices, evoking no agreement.
There may have been some agreement in principle on the
problem of agricultural surpluses.//
//EC leaders decided in principle to hold EC oil con-
sumption this year to 500 million tons, about 5 percent
less than projected, matching the previously announced
target by the International Energy Agency. They also
called on the US and Japan to reduce oil use. EC offi-
cials reportedly linked survival of the EMS to US energy
conservation, which they argued was necessary to preserve
the value of the dollar against the German mark, the
strongest EMS currency. EC energy commissioner Brunner
will meet Energy Secretary Schlesinger and other US of-
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ficials in Washington on Monday, prior to an EC Council
of energy ministers on 27 March.//
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//French President Giscard proposed modification of
Euratom's authority over uranium supplies but failed to
gain initial support. A French proposal for a possible
common policy on nonproliferation will be discussed later
25X1 by EC Foreign Ministers.//
25X1 //The heads of government for the first time addressed
the concept of "work sharing," reducing working hours to
increase the number of persons employed.//
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GRENADA: Marxist Coup
The leaders of the Marxist-oriented New Jewel Move-
ment who seized power in Grenada yesterday are still at-
tempting to consolidate their control. Although much of
the 600-man defense force apparently surrendered, there
may be holdouts among the police and possibly in the
countryside, where deposed Prime Minister Gairy--cur-
rently visiting New York--had his strongest support. The
NJM probably will adopt a nonaligned policy in its reZa-
tions with neighboring Caribbean countries and the US.
//Self-proclaimed Prime Minister Maurice Bishop, a
34-year-old London-educated lawyer, heads the NJM, which
grew from a fringe group in the early 1970s into the
leading opposition in the 1976 elections that Gairy only
narrowly won. NJM appeal was heightened by Gairy's often
arbitrary and sometimes brutal rule since 1967. The NJM's
early stress on radicalism and underground activity gave
way, perhaps with Cuban encouragement, to more conven-
tional political action by 1974. We have only a fragmen-
tary outline however, of the recent NJM relationship
with Cu_ a.
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ere is some evidence of possible
Cuban tun ding an perhaps sponsorship of militar train-
ing for a few Grenadians outside the country.//
With the exception of Jamaica and Guyana, most 25X1
Caribbean governments will react very cautiously to de-
velopments in Grenada. Although there are no other
Marxist parties in the Eastern Caribbean with as much ap-
peal as the NJM, recently independent Dominica faces a
growing pro-Cuban group, and leaders of each of the
smaller islands are uncomfortably aware of how their
small defense forces might easily be overwhelmed. The
left-leaning Jamaican administration, on the other hand,
reportedly is planning to recognize the Bishop government,
and Prime Minister Manley is said to have been elated by
the coup.
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SOUTHERN AFRICA: Drought Damage
//Drought damage to southern Africa's crops and graz-
ing Lands has boosted import needs and raised fears of
serious food shortages. Beginning this summer, regional
requirements for foodgrain imports could rise by 600,000
tons. South Africa--traditionally the region's Largest
supplier--will probably increase its grain sales to the
nearby countries even though its own crop short aZZ will
restrict its exports to other regions.//
//Rains brought some relief in late January, but the
area planted to corn and other crops in the food deficit
nations of the region has been reduced by about 20 per-
cent. South Africa's corn production this spring is ex-
pected to fall 25 percent below last year's level. South
Africa, however, is building up stocks and beginning this
summer South African exports to the deficit nations will
most likely increase by about 500,000 tons. To do this,
South Africa will have to cut shipments to Taiwan and
Japan.//
//Grain and food prices throughout the region undoubt-
edly will increase, leading to higher inflation and in-
tensifying balance-of-payments problems. Although most
regional grain import needs will be covered by South
Africa, aid requests to Western nations are increasing.
The possibility of severe food shortages will promote
infra-area trade and possibly greater official recogni-
tion of this trade. Rhodesia, with political motives
in mind, has offered surplus wheat and corn to Zambia.
Although existing border and transit restrictions may be
eased, transportation and distribution in the area will
remain a problem, especially for Zambia--where grain im-
ports could exceed 450,000 tons.//
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NAMIBIA: South African Raids Continue
Yesterday, South African forces continued the at-
tacks that since 6 March have struck at least 13 South-
West Africa People's Organization camps in Angola and
Zambia. South African and Angolan authorities say few
guerrillas were killed in the attacks. Action consisted
primarily of airstrikes, although some heliborne ground
troops and a ground column also participated. The South
Africans probably destroyed a number of forward staging
bases used for infiltration into Namibia and captured
rican military commander in Namibia, the strikes were
primarily intended to prevent SWAPO from stepping up
guerrilla infiltration during the initial phase of a
truce under UN auspices.
According to the South Af-
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CHILE-FRANCE: Mirage V Purchases
//The Chilean Air Force appears ready to purchase a
squadron of French-built Mirage V fighter aircraft rather
than add to the US-built F-5s already in its inventory.
US restrictions on arms exports to Latin America and a
French promise to deliver this year have been key factors
in Chilean thinking. Chilean Air Force officers, fearful
that papal mediation may not solve Chilean-Argentine
problems over the Beagle Channel, have been attracted
to the Mirage V's impressive ground-attack capability.
The larger Argentine Air Force was augmented by the
recent purchase of 24 to 26 Mirage Vs from Israel.//
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MOROCCO: Hassan's Growing Problems
lose control of events and ultimately his throne.
does not manage these building pressures more expedi-
iousZy and adroitly in the next several months, he could
Growing domestic and foreign policy problems are
undermining King Hassan's authority and encouraging open
political opposition. No one issue constitutes a serious
challenge, but the convergence of these problems has pro-
duced a malaise not seen since the early 1970s. If Hassan
Political drift has been evident in Morocco for at
least six months, with the King and his ministers seem-
ingly unprepared to respond effectively to current prob-
lems. There are no easy solutions to Morocco's problems;
some are partially dependent on factors beyond the King's
control. Nonetheless, criticism of Hassan's stewardship
is growing, as is a general perception of royal indeci-
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//The unending conflict over mineral-rich Western
Sahara is Hassan's principal preoccupation, a contributory
cause of many of his domestic problems, and a growing po-
litical liability. Last fall, there were numerous com-
plaints from Moroccan citizens about the costs of the war
and from students about the sacrifices involved in hold-
ing on to the disputed territory. The King's moderate
response to a Polisario guerrilla raid in late January on
a southern Moroccan town--albeit in the interest of keep-
ing the door open for negotiations--evoked widespread
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//The war against the Algerian-backed guerrillas is
going badly and Hassan needs a political settlement. His
ability to obtain one, however, depends on a willingness
by all parties to the dispute to make previously unpalat-
able compromises and a shared perception that a military
solution is impossible.
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The presence of the former Iranian leader in Morocco
is highly unpopular and is inviting dangerous comparisons
of the two monarchies.
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Disaffected students in anti-Shah
street demonstrations have called not only for expulsion
of the Shah but also for the removal of Hassan.
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Unlike the Shah, however, Hassan is his country's
religious leader, has not pushed rapid modernization, has
unquestioned legitimacy as a monarch, and is being chal-
lenged by political leftists, not religious conservatives.
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Morocco faces serious economic problems that are
likely to persist into the early 1980s. Unemployment is
high, wage increases have fallen far behind inflation,
and rapid population growth has resulted in a net decline
in per capita food production. The stringent austerity 25X1
program adopted last year to reduce a large commerical
trade deficit is producing substantial distortions in the
domestic economy and adding to labor unrest.
Morocco's financial situation appears increasingly
precarious. Morocco's debt service ratio is expected to
rise to about 28 percent this year--more than 20 percent
generally is considered a high risk by international
lenders--and to continue to climb over the next few years.
Morocco is also experiencing serious foreign exchange
shortages, the loss of budgetary support from Saudi
Arabia more than a year ago, and the mounting financial
burden of the Sahara conflict. F_ I 25X1
The government's inability to satisfy popular ex-
pectations for improved living standards and a more
equitable distribution of national wealth has never been
more apparent. Labor strikes have been at above normal
levels since December. F7 I 25X1
At least some of the current strikes seem politically
motivated to embarras the government. The Socialist
Union of Popular Forces--the only militant political
party on the Moroccan scene--working through its newly
formed labor affiliate, the Democratic Confederation of 25X1
Labor, appears to be encouraging some of the strikes to
attract wider political support from militants throughout
organized labor.
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The Socialist Union has become increasingly open in
pursuing long espoused demands for political and economic
reforms. At the close of its party congress in December,
the Union boldly called for partial restriction of
Hassan's autocratic powers. The government response was
to seize the party's newspaper to prevent publication of
the declaration, which also characterized the monarchy as
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Hassan may yet be able to reverse his sagging for-
tunes by recourse to his consummate skill in manipulating
competing political interests and his flair for undertak-
ing dramatic gestures in a new policy direction. Hassan's
message last week to a special session of parliament call-
ing for continued sacrifices and the formation of a na-
tional unity council in support of Western Sahara policy
is unlikely to divert popular attention from domestic
problems. A bold initiative toward a political settle-
ment of the Western Sahara dispute or against economic
ills at home, however, would help reverse domestic
malaise and Hassan's image of ineffectiveness.
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