NATIONAL INTELLIGENCE DAILY SATURDAY 14 JANUARY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100010043-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 26
• Document Creation Date: December 27, 2016
• Document Release Date: May 24, 2010
• Sequence Number: 43
• Publication Date: January 14, 1984
• Content Type: REPORT

Director of
Central
Intelligence
OCPAS CIG
CYi 285
b
National Intelligence Daily
Saturday
14 !;January 1984
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Contents
Lebanon: Increased Fighting .................................................. 10
USSR: Trade Officials Executed .............................................. 10
USSR-Angola: Economic Agreements Announced ................ 11
EC-US: Agricultural Trade Restrictions .................................. 11
South Korea: Opposition Campaign ...................................... 12
Mauritius-Libya: Libyan Office Closed .................................... 13
Sierra Leone: Growing Discontent .......................................... 13
Syria-Lebanon: Attitude Toward Security Plan ......................
1
Italy-Lebanon: Plans for MNF Withdrawals ............................
2
Suriname: Political Demands ..................................................
3
Ell Salvador: Military Developments ........................................
4
USSR-North Korea: Reaction to P'yongyang's Proposal ......
6
Libya-Ethiopia-Sudan: Dissidents Preparing for Attacks ......
7
Poland: Planned Price Increases ............................................
8
France-Spain: Crackdown on Basque Terrorists ..................
9
Special Analysis
Israel: Economic Turmoil ........................................................ 14
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SYRIA-LEBANON: Attitude Toward Security Plan
Damascus probably is willing to permit the Lebanese security plan
to be carried out, but its tough position on the broader issues of
Lebanese national reconciliation has not changed.
The US Embassy in Damascus reports, however, that Syrian
leaders told British Foreign Secretary Howe that further progress on
Lebanese national reconciliation will depend on the abrogation of the
Lebanese-Israeli troop withdrawal accord of last May. The Syrians
conveyed the impression that their position on this issue is hardening.
Comment: The Syrians probably believe that, if the security plan
is carried out, it will facilitate a withdrawal of the Multinational Force
contingents from Beirut, an important short-term goal of the Syrians.
Damascus thus is likely to encourage agreement on the plan in the
talks this weekend.
Despite this tactical maneuver, however, President Assad almost
certainly will stand firm on the more fundamental issues that have
impeded reconciliation among Lebanon's warring factions. In
particular, he also will demand the abrogation or at least the shelving
of the Lebanese-Israeli accord as a precondition to a political
settlement or to Syrian withdrawal from Lebanon. Assad probably
believes that a pullout of Western forces from Beirut would strengthen
his hand in pressing his demands on the Lebanese.
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Defense Minister Spadolini says privately that Italian withdrawals
from the Multinational Force may proceed more slowly than originally
planned because, of waning public interest, but the situation could
change abruptly.
Comment: The public's recent preoccupation with the holidays
and hints that a diplomatic breakthrough may be imminent have
reduced the immediate pressure on the government, but the situation
in Rome is delicate. A breakdown in the peace talks or a major
incident involving any of the MNF contingents almost certainly would
provoke renewed calls for withdrawal.
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No resolution of the labor crisis is in sight, and the strikers are
putting new emphasis on political demands.
The US Embassy reports that some of the bank workers who
struck yesterday in support of bauxite and electrical workers are
circulating a petition calling for worker solidarity and for the removal
of Army Commander Bouterse. This follows similar demands by
electrical workers for the military's return to the barracks and for the
restoration of democracy.
The Embassy says soldiers from a commando unit were guarding
the main facility of the Suriname Power Company in Paramaribo while
discontented electrical workers returned to work. Military units also
are stationed at the Suralco plant, but there have been no incidents
between the soldiers and the strikers.
Demonstrators calling for Bouterse's resignation stormed the
Surinamese Embassy in The Hague on Thursday, according to the
Dutch press, before being evicted by the police.
Comment: The lack of any identifiable leadership or plan among
the strikers makes it difficult for Bouterse to deal with their demands.
He probably still wants to avoid violence, fearing that the use of force
could lead to widespread support for the strikers.
The spread of the strikes and the emergence of demands aimed
at undermining the regime will put Bouterse in a difficult position. He
lacks a constituency outside the small military services, and he cannot
afford to offer power sharing or any other major political concession.
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EL SALVADOR: Military Developments
Fighting continues in central El Salvador,
Elements of the government's airborne battalion began an
operation south of the Guazapa Volcano on Tuesday, according to the
US defense attache. Salvadoran military officers say fighting
continues in northern La Libertad Department
The defense attache also reports the Salvadorans have
established a new general staff section that will be responsible for
controlling all armed forces communications. The section will focus
on improving communications security practices.
The establishment of the new general staff section is an important
step toward improving military performance. Lax communications
security has long plagued the high command. It probably has
contributed to the failure of several operations.
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USSR-NORTH KOREA: Reaction to P'yongyang's Proposal
The Soviets have given favorable press coverage to the proposal
North Korea made on Tuesday for talks with South Korea and the US,
but they almost certainly will seek to head off any attempt to include 25X1
A TASS dispatch on Wednesday from P'yongyang on the
proposal was carried the same day by lzvestiya under the title "An
Important Initiative" and by Pravda on Thursday under the title
"Putting Forward New Proposals." According to TASS, such
"constructive dialogue" is the only road to peace and reunification in
Korea in view of the current tensions "provoked by US aggressive
scheming." TASS made no reference to China's role in informing the 25X1
US of the proposal
Officials at the Soviet Foreign Ministry were relaxed about the
matter on Wednesday, when they discussed Korean problems with
US Embassy officers. They claimed that "the most important thing is 25X1
stability on the Korean peninsula."
The Soviets, however, were skeptical that a dialogue is possible in
the near future. As inhibiting factors, they cited the political impact of
the bombing in Rangoon and South Korean reservations about the 25X1
Comment: The USSR has long publicly endorsed a negotiated
settlement of the Korean question and would welcome talks that
limited the chances for renewed hostilities and led to a reduced US
military presence. In view of Moscow's own past initiatives on Asian
security, its determination to play a major role in the region, and its
treaty with North Korea, the Soviets probably would try to be included
in any larger conference. They would be likely to object to any move
to add China as a fourth party, but they might welcome expanded
talks if the USSR were also included.
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Libya
epub!flc
'Equator
Zafte
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Administrative
Boundary
Lake
Rudolf
Boundary representation Is
not necessarily authoritative.
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LIBYA-ETHIOPIA-SUDAN: Dissidents Preparing for Attacks
Dissident operations in southern Sudan are likely to continue,
despite conciliatory gestures toward southerners by President Nimeiri.
e US Embassy in Addis Ababa reports that it has learned
from a Sudanese dissident that elements associated with the group
also plan attacks soon on targets in Khartoum g the US
Embassy.
The US Embassy in Khartoum says the government, in a bid to
ease tensions in the south, has freed four prominent southern
politicians who were jailed last spring. Nimeiri also has appointed a
special emissary to contact dissidents in the south and a commission
to investigate southern concerns.
Comment: Libya, Ethiopia, and the Sudanese People's Liberation
Army probably hope they can take advantage of the political ferment
in Sudan caused by Nimeiri's controversial measures of the last
Improved relations between Libya and Ethiopia since their high-
level diplomatic exchanges late last year are resulting in stronger
cooperation to undermine Nimeiri. Addis Ababa feels threatened by
Khartoum's continuing support to northern Ethiopian insurgents and,
with Libya, is angered by Sudanese support of US interests in the
region.
Nimeiri's gestures toward the south, together with his recent
deemphasis of Islam, will reassure many Sudanese that he has
resumed a more moderate course. Some southern dissidents are
likely to be willing to negotiate with Khartoum. The Sudanese
People's Liberation Army and the other radical factions, however, will
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POLAND: Planned Price Increases
The regime's reduction -in the size of the increases in retail food
prices sets back its austerity program and reflects a continuing lack of
The new scheme reportedly provides for increases in food
prices averaging only 9 percent instead of the originally projected
15 percent. Retirees already have been granted early pension
increases, and the government is considering additional
compensation for them and for low-income workers. A government
spokesman indicates that in the future there will be smaller but more
frequent increases.
No firm date has been set for the increases to go into effect. The
Council of Ministers yesterday ordered further study of revisions
proposed by government-sponsored unions.
The authorities are taking action to show their responsiveness to
public opinion. The party newspaper reported criticism of the most
recent plans by representatives of the unions and promised to
forward the comments to the Council of Ministers, where the decision
Comment: The retreat on price increases will make it more
difficult for Warsaw to persuade Western creditors that it is
committed to austerity and that it has a coherent economic policy.
The action also will delay an overall realignment of retail prices that
will balance supply and demand. The regime now is committed to
increase subsidies for food and consumer goods-already 20 percent
of the budget for 1984-causing more inflation.
The authorities are likely to hope that they can improve their
credibility by allowing and even encouraging a critical discussion of
their policies. They also hope to show they have learned from
experience not to surprise the workers with large, unexpected
Large-scale violent protests over these increases seem unlikely.
The generally bad economic conditions, however, rK)robabl Will cause
some scattered demonstrations. F 7
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Top Secre4
, A..
Bayonne/
L~BQt7Ft6
San Sebastia
The Basque Region
Historical Basque area boundary
-?- International boundary
- Spanish internal administrative
boundary
Former French internal administrative
boundary
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FRANCE-SPAIN: Crackdown on Basque Terrorists
New French operations against Basque terrorists may lead to
closer cooperation with Spain in dealing with the problem.
French authorities are cracking down on Basque terrorists in
southern France. Earlier this week police detained top leaders of the
Spanish organization ETA and either expelled them from the country
or moved them to northern France. They also arrested five members
of the French Basque terrorist group
These actions follow the murders in Southern France of several
key ETA leaders by the obscure Antiterrorist Liberation Group.
Comment: Although Paris has played down the significance of its
actions, they may reflect a shift in the French view of the Basque
problem. Paris has long been troubled by signs of growing violence
and Basque radicalism in the French Basque region, and the murders
by the Liberation Group-which provoked violent pro-ETA
demonstrations in southern France-appear to have confirmed its
fears. French authorities may be concerned that they will soon have to
deal with violence among their own Basques, if they do not take
action to control a potentially explosive situation.
Paris also may be indicating to Madrid that ETA can be deprived
of its sanctuaries in southern France by other means than a campaign
The crackdown may provoke reprisals either by the ETA or by the
French Basque terrorist group that could increase the level of
violence on both sides of the Pyrenees. In the long run, however,
close counterterrorist cooperation between Paris and Madrid could
be the key to defeating ETA. Such a defeat would remove the most
potent threat to political stability in Spain.
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LEBANON: Increased Fighting
Delays in carrying out the security plan are causing new tensions
between the Lebanese Army and armed Muslim factions. Intermittent
heavy fighting continued among nearly all opposing factions in the
Beirut area yesterday. US Marines came under the most intense small
arms fire in a month and directed mortar and machinepun fire at
nearby Druze and Shia attackers.
Comment: Opponents of the government may be planning new
terrorist attacks against the national contingents of the Multinational
Force in an effort to intensify demands in their home countries that
they withdraw from Lebanon.
USSR: Trade Officials Executed
TASS announced yesterday that two former officials of the State
Committee for Foreign Economic Relations had been executed for
"systematically taking large bribes." One official was the former
chairman of the association that provides foreign support for Soviet
electric power stations. The other was the former director of the
import office of the same association. The announcement says that
the Presidium of the Supreme Soviet denied an appeal for clemency
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Comment: The executions indicate that General Secretary
Andropov's campaign against corruption is continuing. Andropov is
the Chairman of the Presidium of the Supreme Soviet-the appellate
body in capital cases of this kind. These are the highest level officials
to be executed for corruption since Andropov became the party 25X1
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USSR-ANGOLA: Economic Agreements Announced
Agreements with Angola were signed in Moscow yesterday to
develop a fishing complex employing 6,000 persons and to cooperate
in constructing oil depots, producing building materials, and starting
farm machinery repair workshops. The value of the projects was not
disclosed. The USSR has extended about $430 million in economic
aid to Angola since 1975, but only about $32 million is believed to
Comment: The timing of the announcement comes on the heels
of disclosure that the USSR and Cuba have agreed to provide more
military aid to Angola. It suggests a coordinated effort to demonstrate
firm backing for Luanda against increased pressures from Pretoria
and South African-backed guerrillas. The new aid agreements do not
provide for badly needed imports for the deteriorating Angolan
economy or for skilled technical services to revitalize idle industries.
Luanda also is making efforts to obtain economic aid in the West.
EC-US: Agricultural Trade Restrictions
The EC Commission on Thursday proposed that the Community
place tariffs on imports of corn gluten feed and other animal feed
substitutes. Most of these products come from the US and now enter
the EC duty free. The Commission would place a tariff only on imports
exceeding 4.5 million tons, and it is willing to negotiate under GATT
auspices a trade compensation arrangement with the US. The
Commission argues that cheap imported substitutes aggravate the
EC agricultural glut by displacing domestic grain and encouraging
dairy surpluses.
Comment: The EC Council probably will approve the proposals
by mid-February, and GATT consultations could start by early spring.
The quotas will have little immediate impact on US exports. Last year
the US sold less than 4 million tons of the products to the Community,
but the EC apparently believes that US sales could rise in the future.
Although philosophically opposed to the Commission proposal, the
UK and West Germany probably will acquiesce in return for
agreements by other EC members on Common Agricultural Policy
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SOUTH KOREA: Opposition Campaign
South Korean dissidents have launched a major campaign on
behalf of a clergyman and two professors indicted this week for
"antistate" activity. The three had been researching the treatment
of the unification issue in school textbooks. Intelligence Chief Lho
reportedly is trying to calm the controversy by advising the dissidents
Comment: The government is more than usually sensitive about
the unification issue, now that North Korea has publicly proposed
talks. Dissidents appear divided over the wisdom of challenging the
government, but they believe strongly in the public's right to discuss
the issue. Indictment of the three makes compromise difficult, and
airing the charges in a public trial could provoke greater
antigovernment sentiment. Lho probably is telling the dissidents he
can persuade the government to take a softer line on prosecution if 25X1
they ease up on their protests.
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MAURITIUS-LIBYA: Libyan Office Closed
Prime Minister Jugnauth yesterday ordered the immediate
closure of the Libyan People's Bureau in Port Louis, according to a
senior Mauritian official. All Libyan diplomatic personnel, except for
one official who will remain temporarily to handle administrative
matters, were to depart the country within hours.
Comment: The action follows Mauritius's reported discreet
expulsion last month of a Libyan attache for activities "inappropriate
to a diplomat." The Libyans have interfered extensively in Mauritian
internal politics, particularly in the Muslim community. Jugnauth-
who at one time sought closer relations with Libya and the USSR-
became angered at reports that Tripoli and Moscow backed the
major opposition party in the election last August. The expulsion
order also may be an effort to gain favor with Saudi Arabia, with which
Mauritius has been hoping to establish economic ties.
SIERRA LEONE: Growing Discontent
President Stevens has closed the country's main university
indefinitely, following violent student disturbances earlier this week in
the capital over shortages of cooking oil and gasoline. The students
regard Stevens as responsible for widespread economic hardships,
and their protests coincided with the President's opening address to
the national convention of Sierra Leone's sole political party. The
government quickly contained looting by the few hundred
participants, and no new disturbances have been reported.
Comment: Stevens's 15-year-old regime is periodically
wracked by economically inspired student and labor disorders.
The government is now trying to head off a threatened strike by
miners for overdue pay that could lead to more violence later this
month. If Stevens imposes austerity measures needed to obtain IMF
assistance, public disaffection over layoffs, inflation, and shortages
of essential goods is likely to increase.
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Israel: Economic Indicators
Consumer Prices
Percent change
200
25
0 1977 78 79 80 81 82
US Aide
Billion US $
3.0
0 1977
a Estimated.
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80 81
Fiscal year
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Special Analysis
ISRAEL: Economic Turmoil
Threats by the smaller parties to leave the coalition and growing
labor unrest are severely testing Prime Minister Shamir's ability to hold
his coalition together and to enact desperately needed austerity
measures. Finance Minister Cohen-Orgad's austerity program is
unlikely to get off the ground, however, because of the strong
opposition within the government. Without an effective austerity
program, Israel's balance-of-payments situation will continue to
deteriorate, leading it to turn to the US for relief.
The cabinet on 1 January set a ceiling for the annual budget
beginning in April at $1 billion below spending in the current fiscal
year. After subtracting defense imports and debt servicing, each
ministry would have to absorb an average cut of 9 percent in real
terms to stay within the ceiling. Cohen-Orgad also is calling on the
Histadrut, the large trade union organization, to agree to a decline in
real wages of at least 10 percent.
A committee made up of ministers with primarily economic and
social portfolios has now decided to raise the budget ceiling, reducing
required average cuts to only 7 percent in real terms. Welfare
ministries would absorb smaller cuts. The committee has not yet
concluded its deliberations, however, and the budget ceiling could
well be raised again.
Opposition to Austerity
The marginal adjustments to the budget have not been enough to
satisfy the opposition. Members of the National Religious Party and
the TAMI and Tehiya parties have threatened to leave the Likud
coalition if allotments for their favorite projects are cut.
The Tehiya party objected to reported plans to freeze settlements
in the West Bank. Shamir quickly promised that there would be no
freeze, although he has left the door open for lower spending levels.
TAMI, with a low-income constituency, and the National Religious
Party have threatened to join the Labor Party unless social welfare
spending, including free high school education, is left intact. The US
Embassy reports that TAMI has begun discussions with Labor
leaders.
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An estimated 40,000 government workers- 10 percent of public-
sector employees-are now involved in strikes and slowdowns to
demonstrate their opposition to the current annual inflation rate of
200 percent and to Cohen-Orgad's call for large cuts in real wages.
More strikes are likely because workers fear budget cuts will mean
fewer jobs.
On 1 January the cabinet also authorized Cohen-Orgad to
negotiate a package deal on wages, prices, and taxes with the
Histadrut and the Manufacturers' Association. Union officials rejected
the idea. They believe that differences between the government and
the Histadrut are too great to resolve and that the government is
trying to put the burden of economic retrenchment on wage earners.
Cohen-Orgad's austerity program is unlikely to be put into effect.
Even after the ministerial committee makes its recommendations, the
full cabinet still has to approve the budget, giving ministers another
opportunity to increase their funding. Although Shamir appears to
back the cuts, he probably would do an about-face if he were
persuaded his government would topple.
Even if budget cuts are adopted, experience suggests they
will probably not be implemented. Israeli ministers are not held
responsible for budgetary mismanagement. As a result, their actual
outlays can easily exceed their budget limits.
The Histadrut has little incentive to reach an accommodation
with Cohen-Orgad. It supports the Labor Party, which believes the
faltering economy may soon bring Shamir down.
Officials of Histadrut probably calculate that they could get a
better deal from Labor. They believe that they could not sell Cohen-
Orgad's proposals to their members and that they have nothing to
lose by taking a tough stand.
If Cohen-Orgad somehow overcomes these obstacles and puts
his austerity program in place, the resulting economic slowdown
would cause unemployment that would quickly put an end to the
experiment. One of the basic tenets of Israeli policy has always been
that significant unemployment is unacceptable because of a moral
obligation to provide jobs for Jews coming to Israel.
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Israeli officials say that an unemployment rate above 7 percent
would force them to adopt expansionary policies. Unemployment now
stands at 4 percent.
Cohen-Orgad is pushing his austerity program in order to reduce
domestic demand and thereby free more production for exports. In
addition, the demand for imports would be curbed. which also would
help reduce Israel's foreign trade deficit.
Since Cohen-Orgad is unlikely to succeed, Israel's balance-of-
payments situation will continue to deteriorate. Unless Tel Aviv
manages to secure substantially more foreign financial backing than
is likely to be available from commercial lenders, the country will have
a foreign exchange crisis. Israeli officials, finding it politically
unpalatable to attempt a program requiring economic sacrifice by the
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