NATIONAL INTELLIGENCE DAILY THURSDAY 5 JANUARY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100010011-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 27, 2016
• Document Release Date: May 24, 2010
• Sequence Number: 11
• Publication Date: January 5, 1984
• Content Type: REPORT

Director of
Central
Intallinnnen
UCPAS/C IG
CYE 28
National Intelligence Daily
Thursday
5 January 1984
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b January 1964
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Contents
Suriname: Bouterse Demands Return to Work ...................... 3
Nigeria: New Government Outlines Policies .......................... 4
China-US: Visit of Premier Zhao Ziyang ................................
Tunisia: Bread Riots Subside ..................................................
Bulgaria: Changes in the Leadership ......................................
France-Lebanon: Aircraft Carrier To Leave Station .............. 9
USSR-France: Claim About Delivery of Gas .......................... 11
Oman: Implications of Cabinet Changes ................................ 11
Special Analysis
Iraq: Possibilities for Exporting Oil .......................................... 12
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SURINAME: Bouterse Demands Return to Work
Army Commander Bouterse is adopting a conciliatory, but
authoritative, posture, while trying to make Finance Minister Caldeira
the scapegoat for the labor crisis.
In an interview televised on Monday, Bouterse told strikers that, if
they did not return to work, Alcoa would close down the Suralco
bauxite operation. According to the US Embassy, Suralco has denied
making such an ultimatum.
Bouterse publicly blamed Caldeira for unauthorized imposition of
new taxes, the labor unions for keeping the workers uninformed, and
bauxite plant management for preparing to withhold new taxes. He
complained that the workers had not taken their problems personally
The Army Commander emphasized that some of the strikers'
demands were not negotiable. He indicated, however, that tax
increases would be postponed pending further discussions with the
workers through union leadership.
In a talk yesterday with the US manager of Suralco, however,
Bouterse reportedly said he had the options of using force to end the
strike, rolling back some of the proposed new taxes, or making
changes in his government. Although he appeared to favor the third
option, he gave no clear indication of his next move.
On Tuesday Fred Derby-the president of the bauxite union, who
has been spurned by its membership-appealed to the strikers to
return to work and let the union represent them in negotiations with
the government. The Embassy indicates that the strikers did not
appear receptive to Derby's speech.
Comment: If Bouterse decides to make governmental changes,
he is likely at a minimum to remove Caldeira.
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NIGERIA: New Government Outlines Policies
Head of State Buhari has reiterated his pledge that Nigeria will
meet its international obligations and follow through on austerity
measures, but political pressures to find a quick economic fix could 25X1
change his plans.
A Nigerian official has told the US Embassy that the former
government's austerity budget announced two days before the coup
is likely to be accepted by the military with only minor modifications.
At the same time, Buhari has indicated publicly that unorthodox
solutions may be required to turn the economy around.
The Embassy reports that Buhari in a meeting with the diplomatic
corps emphasized his desire for good relations with all countries. He
cited corruption, unemployment, and economic mismanagement as
reasons for the takeover. Buhari also cautioned foreign observers
against "patronizing sentiments" about the end of Nigeria's civilian
experiment
Military governors for the 19 states have been appointed, with
senior Army officers predominating. Southerners and minority groups
are better represented among the governors than on the
policymaking Supreme Military Council.
Comment: Buhari's promises to meet Nigeria's obligations and to
impose austerity measures are encouraging, but they do not square
entirely with his more populist statements made for domestic
consumption. The new leader is likely to find that expectations raised
immediately following the coup will make it even harder to win popular
support for an austerity budget. Plotting by junior or middle-grade
officers is likely if Buhari does not introduce enough reforms or if the
rthern-dominated or too conservative.
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CHINA-US: Visit of Premier Zhao Ziyang
Chinese leaders hope Premier Zhao's visit starting next
Tuesday-the first ever by a Chinese head of government-will help
promote smoother economic and political relations with the US and
strengthen China's strategic position.
Chinese leaders are justifying the visit on strategic grounds.
According to official Chinese guidance, they maintain that it will
improve China's position in the Sino-Soviet-US triangular relationship
and add to China's global stature. Some Chinese officials privately
say the country's strategic position has weakened over the past year.
Premier Zhao stressed to a news conference on Tuesday that
China wants relations with the US to develop in a "steady and
sustained way." Zhao said that he would not urge the US to end arms
sales to Taiwan. He would, however, call on the US to avoid actions or
statements that obstruct peaceful reunification.
Zhao told visiting US governors last month that China wants a
further loosening of restrictions on technology transfer. He said it
seeks greater investment by US firms.
Comment: The Chinese attach special symbolic and strategic
importance to the visit. Although they are no longer advocating a
"united front" against the USSR, Beijing still wants to develop a
relationship with the US that adds to the uncertainty in Moscow about
the possible extent of Sino-US cooperation.
The Chinese are particularly interested in promoting broader
economic ties to facilitate their modernization program. Finally, they
want to establish better personal relations with the President and key
figures in the administration.
Premier Zhao is aware that his handling of the trip will set the tone
for the President's visit to China in April. He knows it also will reflect
his own ability to manage important foreign policy matters.
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Sporadic violence may continue, but the government appears to
have weathered the worst of the disturbances.
Tunisian authorities, despite continuing incidents, have gained
control over the widespread riots that broke out last week and have
taken some measures to alleviate the economic grievances that
started them. the combination of
military and police action and the emergency measures announced by
President Bourguiba on Tuesday have largely quieted the riots.
Prime Minister Mzali, in a nationwide television address, said the
government would stand firm on abolishing the bread subsidies but
would take steps to ease the burden on the poor. Several provincial
governors began increasing welfare subsidies to the needy two days 25X1
ago.
The Libyan news agency reports that senior Tunisian officials
have arranged for a Libyan delegation to visit Tunis soon to discuss
the disturbances, and a Libyan executive jet was seen at the Tunis
airport esterda .
Comment: Tunisian security services presumably will monitor
student groups who participated in the rioting. They will search for
evidence of Islamic fundamentalist or Libyan complicity.
Tunisia may have encouraged the visit by the Libyan delegation in
order to revive bilateral ties. Tunis would want to avert any Libyan
effort to exploit the disorders.
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BULGARIA: Changes in the Leadership
Extensive personnel and organizational changes announced this
week reaffirm party leader Zhivkov's political control and his
continuing commitment to cautious economic reforms.
A plenum of the Central Committee on Tuesday endorsed a
memorandum by Zhivkov on urgent economic and personnel issues
and announced the largest shift of officials in recent memory.
Chudomir Aleksandrov, formerly a party secretary with a technical
background, and Yordan Yotov, the editor of the party newspaper,
were promoted to the Politburo.
Four new candidate members of the Politburo include two
internal security functionaries, Interior Minister Stoyanov and party
secretary Atanasov, and two economic experts, Grigor Stoichkov and
Stanish Bonev. The plenum added Emil Khristov, an economist and
reform advocate, to the Secretariat.
Government changes include the consolidation of several
ministries, the dissolution of four government commissions, and the
promotion of new Politburo member Aleksandrov to First Deputy
Prime Minister. Politburo members Todor Bozhinov and Ognyan
Doynov will head the important but much criticized ministries of
Energy and Raw Material Resources and Machine Building and
Electronics, respectively. New candidate Politburo member Stoichkov
heads the troubled Construction Ministry while retaining his post as
deputy premier.
Comment: These changes suggest that, after a reevaluation,
Zhivkov is ready to move forward on economic reforms. The overall
effect of the changes is to increase the influence of technical experts
in the party hierarchy. At the same time the rise of conservatives like
Yotov, Stoyanov, and Atanasov in noneconomic areas may be
intended to reassure hardliners in Sofia and in Moscow that reforms
will not undermine party control.
The government changes will reduce the bureaucracy and give
Doynov and Bozhinov-two key reform proponents-control over
crucial ministries where resistance could obstruct reforms. These
changes set the stage for a party conference to improve production
quality scheduled to be held in the spring.
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The US defense attache in Paris reports that the French aircraft
carrier Clemenceau-currently off the coast of Lebanon-is
withdrawing to Toulon for unscheduled repairs. According to French
Navy officials, the withdrawal is temporary and does not represent a
change in the French Government's policy of keeping a carrier off
Lebanon for the duration of the crisis there. They expect the ship to
be back on station by the end of the month. France's second carrier,
the Foch, currently is undergoing maintenance at Toulon following
operations off Lebanon and reportedly is being kept ready to sail
within three to four days' notice until repairs to the Clemenceau are
completed.
Comment: The absence of a carrier substantially reduces
France's capability to support its forces in Lebanon. The Foch
probably would need about a week to reach the area, if required. The
approximately 20 fighters and fighter-bombers aboard the
Clemenceau are the only readily available tactical air support for
French forces. The French also have relied on carrier aircraft for
reconnaissance and-on two occasions-for retaliatory airstrikes.
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USSR-FRANCE: Claim About Delivery of Gas
TASS announced on Monday that the Soviet gas export pipeline
to Western Europe is now operational and that France received its
first deliveries from Urengoy on New Year's Day, thus delivering a
blow to US policy. According to a French Embassy official in Moscow,
however, France has received gas from Urengoy through the existing
domestic pipeline network since 1982. He denies that French imports
were now being transported through the export pipeline.
Comment: It is unlikely that the export pipeline is operational and
the claim appears to be propaganda to show that the US sanctions
have been ineffective. Although pipelaying operations were finished
last fall, construction of the compressor stations is incomplete.
this construction is
proceeding fairly rapidly, and that at least 13 of the 40 line stations
will be in the late stages of construction or be completed by April.
This should provide more than enough power to meet new delivery
obligations to Western Europe for this year. Even if construction
should slow substantially, the USSR probably would be able to meet
its commitments by using capacity available in the domestic pipeline
network.
OMAN: Implications of Cabinet Changes
The appointment of two new ministers and other changes last
Sunday represent a consolidation of power by nationalist advisers
close to Sultan Qaboos, Salim al-
Ghazal!, an ardent nationalist who was removed as de facto Defense
Minister in 1981 at the behest of the British Chief of Defense Staff,
has been appointed to the cabinet as Minister of Commerce and
Industry. The US Embassy in Muscat says changes also were made to
deal with corruption. The ministers who were replaced had extensive
business holdings that created highly visible conflicts of interest.
Comment: The cabinet changes probably were engineered by
Foreign Minister Alawi and head of the Palace Office al-Ma'mari. Both
men have reputations as nationalists who encourage promoting
Omanis into top government and military positions. Although pro-US
and staunchly anti-Communist, they believe that Oman should receive
greater compensation for US basing rights. The cabinet changes and
other personnel moves expected later this year, including the first
appointments of Omanis to head the Army and internal security
service. DTO bly will diminish British influence in the long term.
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Special Analysis
IRAQ: Possibilities for Exporting Oil
Iraq is pursuing several alternatives for increasing its oil exports,
but over at least the next year there is little relief in sight for its slowly
deteriorating economy. Extended negotiations and long leadtimes for
new pipeline construction will increase Baghdad's frustration and
could lead to the disruption of oil traffic in the Persian Gulf.
Expansion of the Iraqi-Turkish pipeline by the middle of the year
will allow Iraq to increase oil exports by 300,000 barrels per day.
Resumption of exports through the Persian Gulf are still blocked by
the threat of Iranian attacks that prevents Baghdad from restoring its 25X1
damaged export terminals in the Gulf.
Poor political relations between Baghdad and Damascus preclude
reopening the Iraqi-Syrian-Lebanese pipeline. In recent months,
however, progress on Iraqi proposals to construct new pipelines
through Saudi Arabia and through Jordan have given Baghdad hope
for eventually increasing its oil exports.
New Oil Export Proposals
Baghdad apparently has obtained Riyadh's agreement in
principle to build an Iraqi link to the Saudis' pipeline to the Red Sea.
The link could enable Iraq to increase its annual revenues by some
$5 billion by 1985
Riyadh's suspicions of Iraqi intentions after the war ends and
concerns over potential retribution by Iran make the Saudis reluctant
partners in the venture, and they still may delay it. Riyadh appears
adamantly opposed to the Iraqi request to build a large, separate
pipeline across Saudi territory to the Red Sea.
As an alternative to the Saudi spur, the Iraqis have been talking
with Jordan about the construction of an export pipeline to the Red
Sea. This project potentially could provide at least $15 billion annually
in revenues but would take at least two years to complete. Although
King Hussein reportedly favors the project, the proximity to Israel of
the pipeline route concerns the Iraqis
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Other possibilities for export pipelines have been discussed.
These include a new line through Turkey and a Gulf-wide pipeline
network terminating outside the Strait of Hormuz in Oman. There is
little likelihood that any of these plans will go beyond the talking 25X1
No Early Solution
All of the proposals involve sizable financial commitments and
have lengthy construction times. None of Iraq's alternatives provides
immediate relief for its economic problems. Even the expansion of the 25X1
pipeline across Turkey will not allow Ba"~ cover its current
account deficit in the coming year.
Only half of Iraq's projected deficit this year-estimated at
$5-7 billion-will be met by economic assistance from other Arab
countries. The remainder will have to be financed by commercial
loans and supplier credits or will require a further drawdown of 25X1
Baghdad's already depleted foreign reserve holdings.
Spending on development projects has been cut back in recent
years, as has the importation of foreign goods, down an estimated
economic austerity will hurt civilian morale.
40 to 50 percent in 1983 from the $20 billion Deak in 19 ntinuing 25X1
The Saudis probably are hoping that the promise of a pipeline link
will ease the Iraqis' concerns over their current financial plight and will
induce them to defer adopting a more aggressive strategy in the war
with Iran. The revenues alone would not be sufficient to alter Iraq's
economic and strategic disadvantages, however, and would have to
be supplemented with continued economic aid. Even a solution to
Iraq's economic problems would not rule out an attempt by Iraq to 25X1
end the war quickly by inflicting heavy damage on vital facilities in
Implications for the West
the vulnerable shipping routes through the Strait of Hormuz.
Over the longer term, Iraq is likely to persist in its attempts to
develop alternative pipeline export routes. Any significant increase in
Iraq's export capability in the next two to three years could have
a depressing effect on world oil prices in the absence of further
production restraints by other producers. A pipeline route to the Red
Sea through Saudi Arabia or Jordan would also ultimately enhance
the security of Western oil supplies by providing an alternative to
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