NATIONAL INTELLIGENCE DAILY TUESDAY 13 SEPTEMBER 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01094R000400010146-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 21, 2016
• Document Release Date: August 25, 2008
• Sequence Number: 146
• Publication Date: September 13, 1983
• Content Type: REPORT

Director of Top Secret
Central
Intelligence
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DIA review
completed.
National Intelligence Daily
Tuesday
13 September 1983
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CPAS NID 83-215JX
September 1983
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Contents
Lebanon: Steps by MNF Contributors .................................... 1
Poland: Renewed Repression .................................................. 6
Belgium: Defense Minister's Comments on INF .................... 7
East Germany-West Germany: Increased Contacts ..............
International: Turning Point for Antarctic Treaty .................. 9
Special Analysis
Yugoslavia: Financial Rescue for This Year ............................ 10
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Mediterranean
BEIRUT
Beirut
International
Airport
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LEBANON: Steps by MNF.Contributors
The stalemate in Lebanon continued yesterday as European
contributors to the Multinational Force took stronger measures to
protect their contingents in Beirut.
The US defense attache in Paris reports French naval
officials contemplate delaying scheduled maintenance for the aircraft
carrier Foch to ensure continuous support for their ground forces.
Last Friday, London ordered six Buccaneer fighter-bombers to
Akrotiri, Cyprus, and press reports indicate the British have since
flown reconnaissance missions over Beirut
The US Marines at Beirut International Airport and Lebanese
Army positions in the area of Alayh and Suq al Gharb were
sporadically shelled yesterday, but no major fighting occurred. The
US defense attache in Beirut assesses the Lebanese Army in the
Alayh region to be capable of inflicting heavy casualties on any
attacker.
Comment: The steps taken by the British, French, and Italian
contributors to the MNF suggest they will remain in Beirut for the time
being and will respond militarily to attacks. Their actions, intended as
a deterrent, also have improved their ability to conduct military
operations or to conduct a withdrawal if necessary.
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POLAND: Renewed Repression
The regime is following its amnesty program with new efforts to
intimidate workers and to isolate troublemakers.
\A
former Solidarity spokesman claims that during his interrogation the
secret police bra ged about the extent and nature of the crackdown.
Comment: Although the firing of some workers may provoke
local protests, the police action probably will encourage greater
conformity. The crackdown will, however, only deepen popular
resentment and reduce the incentive to cooperate with the authorities
to help overcome economic difficulties.
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Defense Minister Vreven last week told the press that there
"should no longer be any secret" that Florennes, which is in French-
speaking Wallonia, is the most suitable site for INF deployment in
Belgium. He called for military-to-military talks on disarmament
between NATO and the Warsaw Pact but said that, unless the Soviets
agree to dismantle SS-20s, Belgium should deploy cruise missiles.
Vreven added that missile emplacements in Belgium could be
dismantled if an agreement is reached later.
Comment: Vreven's statement once again puts the choice of
Florennes on record, but the government still has not made a formal
announcement. Brussels apparently prefers to avoid internal conflict
by characterizing the site as tentative until deployment takes place.
The Defense Minister's comments about military-to-military talks
probably are meant to reaffirm that Belgium wants negotiations to
continue throughout the deployment process.
A recent increase in private meetings between East German
leaders and important West German politicians seems to be part of
an East German effort to protect bilateral relations, especially
economic ties, as INF deployments are made by NATO later this year.
Since May, party leader Honecker has met with former Chancellor
Schmidt, Christian Social Union chief Strauss, and several important
Social Democratic leaders, and he is to talk with West Berlin Mayor
von Wiezsaecker later this month. Other East German Politburo
members have met with politicians from the governing and opposition
parties in Bonn. An East German foreign policy specialist recently
said that such contacts will provide alternate lines of communication
in the event that official contacts become difficult to sustain.
Comment: The East Germans have lobbied strongly against INF
deployments but appear resigned to them. While East Berlin will take
part in any Warsaw Pact plan to counter Western deployment, it has
strong economic incentives to insulate ties with West Germany from
any downturn in broader East-West relations.
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INTERNATIONAL: Turning Point for Antarctic Treaty
Nations adhering to the Antarctic Treaty will try at their 12th
regular consultative meeting in Canberra, which opened today, to
overcome their reputation as a secretive club. They are encountering
new demands from the Third World for a role in Antarctic activities.
Malaysia is asking to have Antarctica's status put on the agenda of
the UN General Assembly when it meets later this month. Current
efforts by the consultative parties to write a treaty governing
exploitation of Antarctic mineral resources have prompted new Third
World interest in the continent.
Comment: The consultative parties probably will allow somewhat
wider participation in their meetings and access to their reports. The
Malaysian initiative is likely to result in some debate at the General
Assembly. The recognition yesterday of India and Brazil as the 15th
and 16th consultative parties, however, will slow the initiative's
momentum, and the resulting discussion is likely to be protracted.
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Special Analysis
YUGOSLAVIA: Financial Rescue for This Year
Yugoslavia on Friday concluded a much delayed agreement with
Western bankers that completes a broader financial rescue package
worth $6.6 billion. The rescue program will not restore the essentially
bankrupt country to solvency, and further help will be required next
year. To make any headway in resolving its financial problems
Belgrade needs the cooperation of powerful regional officials, but they
are reluctant to support any policies that they would view as
strengthening federal power at their expense.
The debt crisis in Yugoslavia is the result of broad economic
problems that began under the late President Tito. During the 1970s
expansionary credit policy and reliance on imports stimulated
economic growth and increased living standards. These policies,
however, also caused growing inflationary pressures, deterioration in
the balance of payments, and the buildup of a large foreign debt.
For the past four years Yugoslavia has tried to cope with these
problems by restricting domestic demand. In addition to the tight
money policy mandated by the IMF and devaluations of the dinar,
Belgrade has used administrative controls to try to stabilize the
economy.
The Difficulties of Stabilization
This program has not accomplished what Belgrade had hoped.
The deficit remains in the hard currency account, although it has been
reduced significantly. Inflation has not been brought under control.
The austerity measures have contributed to the declining
performance of the Yugoslav economy over the past several years.
Import reductions, about 10 percent this year after a 15-percent drop
between 1980 and 1982, are having a severe impact. Energy
shortages are requiring the authorities to impose blackouts in many
parts of the country, and gasoline rationing is to be extended to the
end of the year.
Industrial output in the first half of the year is still at the level of
last year, but it will decline substantially by this fall because of raw
material and energy shortages. Unemplo ment is risin and real
incomes have been falling for five years.
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Shortages of necessities continue to aggravate consumers. To
make matters worse, efforts to expand exports will divert some
products in short supply to foreign markets.
More Help Needed
The package provides enough financing for the country to pay its
bill this year, but Yugoslavia will still require about $1.5 billion in debt
relief from governments and banks next year. Commercial bankers
and some governments will be reluctant. to support another such
rescue effort, however, because they believe that a formal
rescheduling is the only way to ensure that all creditors share the
Belgrade's creditors will insist the government enforce its
austerity measures, despite urging by officials of the regional
republics and by the workers that the government relax them. As long
as such a program is in place, Western lenders, despite the misgivings
of many, probably will be willing to refinance most of the maturing
debt, because the alternative default is not in their interest.
Political Repercussions
Belgrade last year had refused to reschedule its foreign debt
formally, because it believed that rescheduling would be an admission
that the leadership could not deal effectively with Yugoslavia's
economic problems, and such an admission might lead to political
instability. The government sees the rescue package, arranged by the
US and the IMF, as a safe alternative method of debt relief.
Nevertheless, the continuing deterioration of the economy and
future requirements of debt relief will make government policies
appear ineffective. Yugoslav leaders in recent months have expressed
concern that unhappiness with the economic situation will aggravate
ethnic nationalism in the republics.
Slovene and Croatian officials oppose new laws that will
strengthen the central bank at the expense of regional prerogatives.
They will resist their implementation.
In addition, some Yugoslav leaders argue that the country is
moving too close to the West. They are likely to exploit the failure of
the effort this year to make Yugoslavia solvent ain in order to
discredit those who arranged it.F- 7
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The Financial Rescue Package for Yugoslavia, 1983
The package includes:
- $1.3 billion, mostly in export credit guarantees, from
15 Western governments.
- $600 million from the International Monetary Fund.
- About $400 million from the World Bank in project and
structural adjustment loans.
- A $500 million short-term loan from the Bank of
International Settlements to tide Yugoslavia over until the
end of the year.
- An agreement by Western bankers to provide $1.8 billion
in short-term credits through January 1985 to refinance
$1.4 billion in maturing medium- and long-term debt and
to provide $600 million in new longer term loans.
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