NATIONAL INTELLIGENCE DAILY THURSDAY 18 AUGUST 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01094R000400010062-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 27, 2016
• Document Release Date: July 20, 2010
• Sequence Number: 62
• Publication Date: August 18, 1983
• Content Type: REPORT

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CY#I 285
National Intelligence Daily
Thursday
18 August 1983
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Contents
Argentina: Economic Moves .................................................. 3
France-Chad: Sending Additional Troops .............................. 5
USSR: Continued Ambiguity on INF Talks .............................. 6
Guatemala-Ell Salvador-Honduras: Military Cooperation
Nigeria: Concern About Election Results ................................ 7
USSR-Japan: Working-Level Discussions .............................. 8
Special Analysis
Egypt-USSR-Eastern Europe: Arms Purchases .................... 10
Top Secret
18 August 1983
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Government leaders have taken steps to preserve economic order
through the elections scheduled for October, but the policy measures
will heighten problems for the next administration.
Argentina's financial package came close to unraveling this week
because of the junta's reluctance to lift foreign exchange controls on
British firms in the country. Once the government agreed to meet loan
criteria, however, the IMF approved Buenos Aires's second draw on
loan funds.
The leadership also approved a new set of economic measures
designed to curb the inflation rate, which is now over 300 percent
annually. The measures include restraints on wage, price, and interest
rate hikes as well as on new government investment. A steep
surcharge was placed on income taxes, but, to placate industrialists,
the value-added tax was slightly reduced.
Nationalists have called the lifting of sanctions against the UK a
sellout. Labor leaders have complained that the package will not do
enough to maintain the workers' standard of living.
Comment: Reconciliation with the IMF has paved the way for new
funds necessary to sustain the recovery program. In addition, bankers
should now be willing to reschedule Buenos Aires's large short-term
debt.
The next government, however, will pay a price for these fleeting
gains. Although price controls will repress inflation rates for now, the
market distortions they create will set the stage for substantial jumps
later in the year. Interest rate ceilings and reduction in the value-
added tax also will work to restrain near-term inflation, but they will
discourage savings and spur capital flight.
Moreover, the tax package will not prevent higher deficits. This
will add to the inflationary pressures that will be one of the early
challenges facing the civilian administration. Labor will put pressure
on the new government to allow wage increases.
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FRANCE-CHAD: Sending Additional Troops
The US defense attache in Paris reports that the French will have
a total of about 1,400 troops in Chad by this weekend. The French
also have intensified their airlift to Chad and are sending in the
command and support units required for extended operations.
According to the attache, four Mirage F-1 fighters, four Jaguar
fighter-bombers, and four KC-135 tankers will be moved from bases
in central Africa to N'Djamena. The French are placing Crotale
surface-to-air missiles around the N'Djamena airport, and French
troops are occupying the east-west line from Salal to Arada.
Comment: In addition to helping counter any further Libyan and
dissident advances, these new commitments probably are intended
to strengthen France's position in any negotiations with Libya.
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5 18 August 1983
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USSR: Continued Ambiguity on INF Talks
A TASS report states that General Secretary Andropov told the
head of a visiting US trade union delegation yesterday that the USSR
will follow a constructive and flexible line in the Geneva talks "until"
the US Government, as a result of its INF deployments in Europe,
"compels us to concentrate on defensive countermeasures."
Comment: While promising "countermeasures," Andropov is
refraining from stating categorically that the talks would be broken off
once deployment begins. In private talks last month with West
German Chancellor Kohl, Andropov parried a direct question about
the prospects for negotiations by downgrading their importance in the
light of the "new situation" that would be created by deployment.
Andropov presumably wants to avoid a repeat of the problems
caused by Foreign Minister Gromyko's remarks at a press conference
in November 1979. On that occasion, Gromyko categorically ruled out
East-West arms talks if the NATO states agreed to the INF basing
decision the following month.
GUATEMALA-EL SALVADOR-HONDURAS: Military Cooperation
The new Guatemalan Government probably hopes that its
increasing support for US policy in Central America and its interest in
closer military coordination with Honduras and El Salvador will result
in US military assistance-as opposed to cash sales offered by the
US last January. Defense Minister Mejia says he wants to obtain
military aid, especially small arms and helicopter spare parts, directly
from the US or through El Salvador. Mejia and his Salvadoran and
Honduran counterparts last week discussed military coordination and
the possibility of Guatemala obtaining military aid from El Salvador.
The three ministers plan to meet again to discuss possible areas of
cooperation.
Comment: Under former President Rios Montt, Guatemala did
not cooperate actively with its two neighbors. Mejia already has
issued a condemnation of Nicaragua's support of Salvadoran and
Guatemalan guerrillas. Areas of possible cooperation include
intelligence and training exchanges, arms interdiction efforts,
coordinated border patrollina and blocking operations, and the loan
of equipment.
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NIGERIA: Concern About Election Results
Complete but unofficial gubernatorial election returns show
President Shagari's National Party sweeping 13 of 19 states. The US
Embassy reports that the federal election commission is reexamining
particularly controversial results in three states where opposition
incumbents lost in their ethnic homelands. The Embassy also notes
that several of Shagari's top advisers are concerned that their party's
victory may be too big to be publicly acceptable. Late press reports
indicate several persons, including National Party officals, have been
killed in protests that broke out over the election results.
Comment: Senior government officials are concerned about the
prospect of serious unrest in states formerly controlled by the
opposition. They could put pressure on the election commission to
carry out some last-minute rejuggling of election figures, or order new
elections in several of the more controversial states to try to reduce
tension. Failure to credit the opposition with more gubernatorial
victories could undermine public faith in the election process, provoke
ethnically based communal violence, and even encourage coup
plotting.
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USSR-JAPAN: Working-Level Discussions
A high-level official of the Soviet Ministry of Foreign Trade has
agreed to Japan's proposal for working-level discussions on bilateral
trade, probably in early October, according to press reports of
comments by Japanese Embassy officials in Moscow. Japanese
Foreign Minister Abe, during a brief stopover in Moscow on Sunday,
reaffirmed interest in reviving this dialogue and agreed to the usual
annual meeting with Foreign Minister Gromyko at the UN. According
to Abe, however, an improvement in relations depends on Moscow's
willingness to give attention to the political differences dividing the
Soviet media have criticized Abe's scheduled visit to Hokkaido
next weekend to inspect the Soviet-held Northern Territories. Deputy
Foreign Minister Kapitsa has asked Abe to refrain from any anti-
Soviet remarks during that visit. The Soviets doubt, however, that
Abe will comply.
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8 18 August 1983
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Special Analysis
EGYPT-USSR-EASTERN EUROPE: Arms Purchases
Egypt has increased its military purchases in the past several
months from the USSR and East European nations. Some of these
purchases are the first orders negotiated in many years. Egypt
continues to depend on the US and other Western countries for most
of its weapons. Nonetheless, this preference is unlikely to deter Cairo
from concluding deals that offer more attractive financial terms,
prolong the life of Soviet equipment in Egyptian inventories, and
improve, relations with Communist countries.
The Egyptian military has been frustrated at times by the high
cost of military supplies from Western countries and the long delays
in delivery. In addition, the Egyptians have experienced difficulties
integrating the US system of maintenance and of stocking spare parts
with their existing Soviet-model system.
Moreover, the Egyptians are still accustomed to the Soviet
practice of having a one-for-one duplication of spare parts for a given
weapon system.
Dependence on USSR
Before 1975, the USSR was Egypt's primary arms supplier. It
provided Cairo with $4 billion worth of warships, missiles, jet fighters,
tanks, and other arms
After the USSR curtailed arms shipments to Egypt in 1975, much
of the equipment provided by the Soviets became unserviceable or
obsolete. Egypt's problem in maintaining or replacing this equipment
is likely to have been behind the recent increase in military purchases
from the USSR and Eastern Europe.
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Other Communist Suppliers
Except for Romania, the members of Warsaw Pact countries
stopped selling arms to E t in 1 7
Romania generally did not consult the USSR about its previous
arms sales to Egypt, and it is unlikely to have done so recently when it
agreed to sell CairoO tanks. The deal is another sign of
Egypt's need to replace aging tanks that are too costly to repair.
Egypt has been unable to pay the total cost of 900 US M-60 tanks
required for its five-year modernization plan. The Romanian tanks will
cost only about one-fourth as much as the US tanks
The accord with Czechoslovakia for spare parts for T-54 and T-55
tanks and for the overhaul of light aircraft was the first military
agreement with Prague in eight years. A deal with East Germany to
overhaul some Soviet MIG aircraft in Egypt's inventory was the first
In addition, Egypt's order with Hungary for unspecified military
equipment was the first since 1974. A Hungarian delegation visited
Cairo in May to discuss more deals, possibly involving tank repairs
and the supply of armored combat vehicles.
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