NATIONAL INTELLIGENCE DAILY WEDNESDAY 14 MARCH 1979

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81T00368R000100030036-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: February 8, 2012
• Sequence Number: 36
• Publication Date: March 14, 1979
• Content Type: REPORT

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LllfltUI Vl
Central
Intelligence
National Intelligence Daily
Wednesday
14 March 1979
Pop Secret 25X1
CO NID 79-061 JX
392
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Situation Report
North Yemen - South Yemen . . . . . . . . . . . 1
Briefs and Comments
Lebanon: More Threats to the Cease-Fire. . . . 2
European Community: Summit Concluded .
Grenada: Marxist Coup . . . . . . . . . . . . .
Southern Africa: Drought Damage. . . . . . . . 8
Morocco - Western Sahara: Military
Developments . . . . . . . . . . . . . . . 9
1 Top Secret
Namibia: South African Raids Continue. . . . 10
Chile-France: Mirage V Purchases . . . . . . 11
Special Analysis
Morocco: Hassan's Growing Problems . . . . . . 12
Overnight Reports . . . . . . . . . . . . . . . . . 15
The Overnight Reports, printed on yellow paper as the
final section of the Daily, will often contain materials
that update the Situation Reports and Briefs and Comments.
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No new developments in the conflict between North
and South Yemen have been reported, and attempts to mediate
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. 25X1
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 1)r_v11
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 by North Yemen in 1972, be returned to
southern control.
1 Top Secret
25X1
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Saudi Arabia apparently intends to begin withdraw-
ing from the Arab Deterrent Force in Beirut starting to-
day. Christian militia leaders reportedly plan to attack
Syrian troops in northern Lebanon soon, and the security
situation in southern Lebanon has deteriorated recently.
25X1
Lebanese Foreign Minister Butrus on Monday told Am-
bassador Dean that the Saudi contingent had received or-
ders to begin withdrawing. The Saudis last week had 25X1
seemed responsive to Lebanese and US requests to delay
their departure but, concerned over the Yemeni situation,
apparently decided to proceed immediately.
There are no indications that Lebanon has made prog-
ress in getting Syria to allow the Lebanese Army to re-
place the Saudis at key flashpoints between Syrian troops
and Christian militia units. An attempt by either the
Syrians or the militias to occupy the positions could
cause major fighting,
Militia leader Major Haddad has fired on Palestin-
ian-held villages daily for over a week, and last Thurs-
day he closed to UN peacekeeping forces all but one road
in the Christian-controlled enclaves. Haddad is likely
to continue his harassment now that Lebanon has shown its
determination to stick to its decision to stop paying the
former regular army troops under his command.
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The EC summit concluded yesterday in Paris, but in-
%
formation on the discussions is still sketchy. The new
European Monetary System, agriculture, energy, the future
of Euratom, and employment policies all received high- 25X1
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. 25X1
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-
ficials in Washington on Monday, prior to an EC Council
of energy ministers on 27 March. 25X1
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
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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DOMINICAN
REPUBLIC
St. Croix Saba (Neth.)
','?`; Barbuda
St. Eustatius
(Neth.) St. Kilts
St. Christopher (U.K.)'' ; Nevis Antigua (U.K.)
Nevis(U.K.) Antiguo
kedonda _
Montserrat (U.K.)
Carriacou
Island
Guadeloupe
(Fr.)
DOMINICA
Martinique
(Fr.)
Virgin Is.
(U.K.) Anegada
I Tortola
Puerto Rico- ~Anguilla,
Sr John (U.K.) (U.S) _ fhomas \ , StrMartin (Guadeloupe)
Isla Mona Vieques (Virgin I s \ /".s St: Barthelemy (Guadeloupe)
(Pto..0) (U.S.) \ St. Maarten
(Neth)
St. Vincen
(U.K.)
GRENADA
_I
Tobago
TRINIDAD AND TOBAGO
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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 rela-
tions with neighboring Caribbean countries and the US.
25X1
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
25X1 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 relationshi
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.
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SOUTHERN AFRICA: Drought Damage
Droughi 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 shortfall will
restrict its exports to other regions.
25X1
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. F_ -1 25X1
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
intra-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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MOROCCO - WESTERN SAHARA: Military Developments
King Hassan replaced the commander of Moroccan
forces in Western Sahara on Monday, according to press
reports from Rabat. In making the announcement, Hassan
hinted at a more aggressive policy toward the PoZisario
guerrillas, which could mean he is giving greater con-
sideration to strikes against Polisario camps in Algeria.
On the other hand, the change of field commanders and a
royal message to Parliament Zast week reiterating Mo-
rocco's right of hot pursuit may be designed to mollify
It is unlikely that the new commander, Colonel
Abrouk, will have any greater success fighting the in-
surgents than his predecessor, Colonel Bennani. The
Moroccan forces are in a worse military position now
than when Bennani assumed command. They are relying on25X1
static defense of fixed positions and have virtually
conceded the countryside to the insurgents. As a result,
the option of a strike at Polisario camps in Algeria,
destroying the source of the problem rather than dealing
with the symptoms, may become attractive.
Hassan, however, needs a political settlement. The
war is contributing to the general domestic malaise, and
he is unlikely to close the door to negotiations. He
presumably realizes that cross-border retaliation would
sour already uncertain prospects for negotiations on a
political settlement with Algeria and the Polisario
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Top Secret
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 somelheliborne ground
troops and a ground column also participated. The South
Africans probably destroyed a number of forward staging 25X1
bases used for infiltration into Namibia and captured
According to the South Af-
rican military commander in Namibia, the strikes were 25X1
primarily intended to prevent SWAPO from stepping up
guerrilla infiltration during the initial phase of a
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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
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
does not manage these building pressures more expedi-
tiously and adroitly in the next several months, he could
lose control of events and ultimately his throne.
Political drift has been evident in Morocco for at25X1
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-
sion and passivity. 25X1
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
criticism. 25X1
The war against the Algerian-backed guerrillas is
going badly, and Hassan's ability to obtain a political
settlement depends on a willingness by all parties to
the dispute to make previously unpalatable compromises
and a shared perception that a military solution is
--continued
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impossible. Algeria and the guerrillas may be less dis-
posed to compromise and more inclined to pursue a mili-
tary outcome in light of declining Moroccan performance
in combat against the Polisario. 25X1
The presence of the former Iranian leader in Morocco
is highly unpopular and is inviting dangerous comparisons
of the two monarchies. The King is surrounded by syco-
phants, disinclined to take advice, tolerates corruption
and glaring social inequities, and this year has devoted
an estimated 35 to 40 percent of the state budget to mil-
itary expenditues. Disaffected students in anti-Shah
street demonstrations have called not only for expulsion
of the Shah but also for the removal of Hassan. Unlike
the Shah, however, Hassan is his country's religious
leader, has not pushed rapid modernization, has unques-
tioned legitimacy as a monarch, and is being challenged
by political leftists, not religious conservatives.
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
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 25X1
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.
25X1
The government's inability to satisfy popular ex-
pectations for improved living standards and a more
--continued
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equitable distribution of national wealth has never been
more apparent. Labor strikes have been at above normal
levels since December. 25X1
At least some of the current strikes seem politically
motivated to embarrass 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
Labor, appears to be encouraging some of the strikes to
attract wider political support from militants throughout
organized labor. The Socialist Union has become increas-
ingly 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 restric-
tion of Hassan's autocratic powers. The government re-
sponse was to seize the party's newspaper to prevent
publication of the declaration, which also characterized
the monarchy as feudal. 25X1
Hassan will continue to rely on the military as his
ultimate base of support. If civil disturbances occur,25X1
the King will not hesitate to use the Army to suppress
them. There is no evidence of organized opposition in the
military
Military morale, however, is low because of the
guerrilla war in Western Sahara.
25X1
Hassan may yet be able to reverse his sagging for-25X1
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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(The items in the Overnight Reports section have not
been coordinated within the intelligence community.
They are prepared overnight by the Office of Current
Operations with analyst comment where possible from the
production offices of NFAC.)
Guyana's Prime Minister Burnham told the US Embassy
in Georgetown last night that Foreign Ministers of the
Caribbean Common Market states will meet today in Bridge-
town, Barbados, to discuss the situation on Grenada (see
Brief and Comment). Jamaica apparently will attend.
Burnham did not appear downcast in asserting that the
New Jewel Movement now controls Grenada; he stressed to
the Embassy his hope that there be no outside interfer-
ence on the island pending the review of the situation
by the neighboring states. 25X1
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Middle East
According to late press reports, Red Cross officials
have announced the exchange at Geneva airport today of
an Israeli soldier for approximately 80 Palestinians.
The exchange is described as the first between Israel and
the Palestinians. The Israeli soldier--seized in south
Lebanon last April--was flown in from Damascus, and the
Palestinians reportedly arrived on an Israeli civil air-
Kampuchea
The US Embassy in Beijing reports that Prince
Sihanouk early this month told French Ambassador to China
Arnaud that he would not work with a new Pol Pot regime
and disagrees with China's view that the Pol Pot forces
are essential to a solution of the Kampuchean problem.
Sihanouk said he prefers a neutral Kampuchea--one
friendly to Beijing while maintaining good relations
with Vietnam and the USSR--and no early withdrawal of
Vietnamese forces, since that allegedly would lead to a
comeback by Pol Pot. The Embassy comments that Sihanouk
remains very much his own man; he evidently is searching
for a united front stategy that will not give a leading
role to Pot Pot's supporters and will not be a Chinese
The US Embassy in Bangkok reported yesterday that a
considerable body of influential Thai opinion thinks Prime
Minister Kriangsak should postpone his visit to the USSR,
which is scheduled to commence a week from today. Several
ranking members of the government have told US Ambassador
Abramowitz that Thailand will gain nothing from a visit
to the state which has underwritten Hanoi's adventurism.
The Embassy notes, however, that Kriangsak continues to
say, publicly and privately, that he is going; he appar-
ently feels he has committed himself and must go in order
to preserve a posture of balance in Thailand's relations
with the great powers. 25X1
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On the eve of tomorrow's inauguration of President-
elect Figueiredo, striking auto workers have closed down
several plants in Sao Paulo, and students in Rio de
Janeiro and Sao Paulo are said to be planning protest
demonstrations. The workers are demanding pay hikes 34
percent above what the government is willing to grant;
the students presumably seek to draw attention to the
military's continued political dominance. None of the
actual or planned activity has anti-US overtones, and no
COMMENT: Neither situation is likely to become
violent. The government has taken a conciliatory ap-
proach to similar strikes in recent months and is likely
to do so again. In the case of the students, the regime
will probably also take a "hands-off" approach, inter-
vening only in the event of serious disorder.
A special session of Parliament on France's burgeon-
ing unemployment problems opens today. President Giscard
formally called the session Monday in response to the
requisite number of deputies seeking debate on the govern-
ment's economic program. According to the US Embassy
in Paris, he is playing "hardball" with Gaullist leader
Chirac--a likely rival in the presidential election in
1981. In his statement, Giscard claimed that Gaullist
leaders had provoked the special session without consult-
ing the party's elected representatives and were being
inconsistent with President de Gaulle's action in similar
circumstances in 1960. Giscard, the Embassy notes, thus
has obliquely accused Chirac of running his party like a
dictator and of betraying the Gaullist concept of presi-
dPntia1ism_
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Saudi Arabia Turkey
The West German Foreign office has informed the US
Embassy in Bonn that Saudi Arabia intends to provide Tur-
key with $250 million in credits to be divided between
project assistance and funds for the purchase of spare
parts and raw materials. The Embassy was unable to ascer-
tain a further breakdown of these credits or the time
frame for disbursement; the assistance is to be provided
on a strictly bilateral basis and will not be coordinated
with any Western aid initiative under OECD auspices. The
West German Embassy in Jidda reports that contrary to
press reports in Ankara, the Saudis and Libyans are not
contemplating the formation of a joint consortium to aid
Turkey.
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Top Secret
Top Secret
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