NATIONAL INTELLIGENCE DAILY (CABLE) 11 JANUARY 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000100010031-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: December 20, 2016
• Sequence Number: 31
• Content Type: REPORT

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Director of Top Secret
Central
Intelligence'} (1 0
National Intelligence Daily
Cable)
Top Secret
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Top Secret
Nicaragua: Strategic Road Construction . . . . . . . . . . 1
Ghana-Libya: Diplomatic Relations . . . . . . . . . . . . 2
Haiti: Renewed Invasion Attempt . . . . . . . . . . . . . 2
Bermuda: New Premier To Be Chosen . . . . . . . . . . . . 3
Special Analysis
Poland: Jaruzelski's Economic Measures . . . . . . . . . . 4
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Top Secret
NICARAGUA: Strategic Road Construction
//The government is building a new aZZ-weather road to the iso-
lated northeast, where there has been an increase in antiregime
activity in recent months.//
//The 425-kilometer road is being built with large-
scale Cuban assistance, and it will link the center of
the country with the key Atlantic coast port of Puerto
Cabezas--a regional military headquarters with a major
airfield. Military supplies for government forces now
arrive primarily by air or sea.//
//Progress on the road appears to have been fairly
steady despite the difficult terrain--about 65 Percent
is complete.
//The road probably will not be finished before the
rainy season begins in May. Once it is completed, it
will allow better reinforcement of small garrisons that
have been unable to contend effectively with anti-
Sandinista bands operating from Honduras, whose raids
have endangered important gold-mining and forestry
activities.//
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GHANA-LIBYA: Diplomatic Relations
A Libyan delegation arrived in Accra on Saturday
and was met by coup leader Rawlings with expressions of
friendship and cooperation. Yesterday, the two countries
reestablished full diplomatic relations.
Comment: The ousted Limann government had broken
relations with Libya in November 1980 because of fears
of subversion. Rawlings, on the other hand, almost cer-
tainly is expecting economic and military aid from
Tripoli. The nature and extent of such assistance may
become known after the current talks conclude, possibly
HAITI: Renewed Invasion Attempt
Government security forces apparently drove eight
members of Bernard Sansaricq's exile band into the hills
after they landed on Tortuga Island off Haiti's northern
coast Saturday from their base on South Caicos Island.
Sansaricq, whose ill-conceived plan to invade Haiti on
Friday was foiled by Turks Islands and Caicos Islands
officials, remained behind but claimed that his force
was preparing an imminent invasion of the mainland. The
Haitian Government has dispatched forces to pursue the
Comment: The small size of the exile force and its
lack of substantial weaponry make it an unlikely threat
to the Duvalier government. Authorities in Port au Prince
are calm, indicating their confidence that the exiles
will be rounded up. The situation remains confused,
however, owing to the poor state of communications in
northern Haiti and Sansaricq's unrealistic statements to
the press.
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//Bermuda's ruling party will vote Friday on a re-
placement for Premier Gibbons, who resigned last week.
Gibbons's resignation was anticipated. The United Bermuda
Party--which has ruled the island since 1968 and generally
represents white interests--is to elect Home Minister
Swan, a US-educated black, as his successor. Swan, like
Gibbons, is sympathetic toward the US and believes Bermuda
should look to Washington for its future security needs
when the island achieves independence from the UK--now
projected to occur within three years.//
Comment: //The ruling party has only a narrow majority
in the House of Assembly, and Gibbons's successor will be
under growing pressure from the black-based opposition
party to accelerate the timetable for independence, pursue
a nonaligned foreign policy, and address social and racial
inequities.//
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Premier JaruzeZski is turning his attention to rebuilding the
economy, now that overt resistance to martial law has been at Least
temporarily suppressed. Despite the negative impact of martial Law
on the. attitudes of the workers, his program may Lead to some sta-
bilization in the retail market and to increased production in some
sectors in the short run. Prospects for implementing effective eco-
nomic reforms and policies are poor, however, and Poland's basic
economic problems are Likely to continue. This, coupled with auster-
ity, will Leave the people with the same economic grievances that
contributed to the events of August 1980.
Financial problems will remain a
are not likely
payments are
that it can
and to show
revival and
economic recovery. Western creditors
rescheduled. Warsaw needs to demonstrate
pay at least the interest on past credits
some progress toward a sustained economic
toward political stability.
The regime has taken advantage of the martial law
period to schedule 300- to 400-percent increases in retail
prices for a wide range of food items and for domestic
utilities. These increases are to be offset by wage ad-
justments only for low income earners. They are needed
to absorb the excess purchasing power in the hands of the
population and thereby reduce shortages by discouraging
hoarding and speculation.
If shortages are reduced, farmers might then be more
willing to sell their production to the state because
there would be more goods for them to buy. The price
increases, however, will lead to a drastic decline in
purchasing power of the population and, if savings ac-
counts are not adjusted for inflation, to a sharp decline
in the real value of personal savings.
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The martial law regime so far has not won the con-
fidence of the farmers, which will be necessary if food
supplies are to be increased. Although the regime has
not vetoed any pending liberalization changes in agri-
cultural policy, it has threatened to force deliveries
of food. This would increase food supplies to only a
limited extent, because some private farmers are likely
to react by killing their livestock and destroying their
crops.
The recent resumption of a six-day workweek in the
mines and other key industries probably will lead to some
increases in production, although the lack of Western
food, raw materials, spare parts, and equipment will be
important constraints. Even though the regime has sug-
gested that working hours may be reduced to previous
standards once martial law is lifted, it probably will
be unwilling to risk losing the added production.
Coal output has already jumped substantially, ac-
cording to official data. If this trend is real, and if
it continues, coal production this year may reach
180 million tons, compared with the premartial law tar-
get of 168 million tons.
Popular Resentment
The austerity measures are extremely unpopular and
are virtually eliminating any government hopes of winning
worker support and discrediting Solidarity. Workers will
remember that Solidarity attached stringent conditions
to a general retail price hike and refused repeated gov-
ernment attempts to restore the six-day workweek.
The government can hope that initial resentment may
be reduced if its policies make goods more available and
shopping more convenient. Authorities recognize that
the price issue is an explosive one, however, and martial
law controls are likely to be extended beyond the date
of the price increases.
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Reforms of the Economic System
Martial law has greatly reduced the prospects for
basic economic reform. The government had already post-
poned the effective date of many reforms even before
martial law. Far-reaching worker self-management is a
dead issue and other measures are likely to be scaled
down.
A Council of Ministers decree on 30 December further
impaired planned reforms by giving branch ministries a
role again in imposing "production tasks" on enterprises
and by increasing the number of industrial sectors where
central control will be maintained. The government is
following through on the plans for wholesale price re-
form and for devaluation of the zloty, but those meas-
ures will be largely ineffective unless the economy is
decentralized.
Familiar Responses
Jaruzelski is likely in the short run to steep the
economy rather than rely on unfamiliar economic instru-
ments and forces. His government will find it difficult
to accept decentralization of decisionmaking, reduced
central planning, and use of such market mechanisms as
prices, interest rates, taxes, and profits to guide the
economy.
In the longer run, despite the apparently strong
desire of the leadership to avoid the failings of the
old economic system, the regime is likely to repeat the
experiments of the 1960s and 1970s, when bureaucratic
and party elements first limited the extent of the re-
forms of those years and eventually regained nearly
total control of the economy.
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