(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100010051-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: January 12, 2017
• Document Release Date: May 24, 2010
• Sequence Number: 51
• Publication Date: January 17, 1984
• Content Type: REPORT

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Director of
Central
Intelligence
C: Y
yep-Secret
GPAS NtD 84-0f3JX
anyay._
~~
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Na#iona Intelligence Daily
Tuesday
17 January 1984
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Top Secret
Contents
EI Salvador: Government Military Successes ........................ 2
USSR-Lebanon: Views on an Expanded UN Role .................. 3
Netherlands-US: Prime Minister's Visit .................................. 4
UK-USSR-Eastern Europe: Bid To Improve Relations .......... 5
USSR: Personnel Appointments .............................................. g
China: Ideological Campaign Deemphasized .......................... 7
USSR: Review of Shootdown of Airliner ..................................
Israel: More Foreign Currency Controls .................................. 11
Yugoslavia: Offers of Financial Assistance ............................ 11
Australia-USSR: Political Talks Announced .......................... 12
Ivory Coast: Mounting Problems ............................................ 13
Malaysia: Investigation of Bank Scandal ................................ 13
Special Analysis
USSR-Pakistan-Afghanistan: Prospects for Negotiations .... 14
17 January 1984
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Boundary representation is Kilometers
not necessarily authoritative.
17 January 1984
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Top Secret
EL SALVADOR: Government Military Successes
The Army's morale should be improved by its successful defense
of a departmental capital and a key railroad bridge.
~~~ ~
Some 300 Army troops in and near Chalatenango city were
attacked on Sunday by a guerrilla force of unknown size. According to
the US defense attache, the government suffered six killed and 23
wounded, while at least 10 insurgents were killed. The attache reports
local units are pursuing the guerrillas, who withdrew to the north. 25X1
Other reports from the defense attache indicate insurgents had
earlier attacked government positions near the vital railroad bridge
across the Lempa River. The guerrillas pulled back after several short 25X1
skirmishes, and no government casualties were reported.
25X1
~~~.
As a result of the destruction of the Cuscatlan bridge
on 1 January, the road over the dam is a key link to the east.
The General Staff has approved a plan to strengthen Army forces
in the east. According to the defense attache, the 350-man
counterinsurgency battalions in San Miguel and Morazan
Departments will have their strength increased to about 540, and they
also will be given their own mortar sections.
Comment: The guerrillas probably were trying to duplicate their
recent successes at the Cuscatlan bridge and the EI Paraiso brigade
headquarters.
The planned force augmentation east of the Lempa-where the
war largely has been fought over the past few months-is likely to be
one of the first priorities of the newly established armed forces
training center. Strengthening the counterinsurgency battalions
should permit them to conduct extended field operations and to
operate more effectively against the guerrillas.
Top Secret
2 17 January 1984
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Top Secret
USSR-LEBANON: Views on an Expanded UN Role
receptive if Syria were to soften its opposition.
and UN attempts to secure its support for an expanded UN
peacekeeping role in Lebanon, but it probably would be more
Moscow has taken a noncommittal position toward recent Western
not consider the idea unless they were first consulted b the other
permanent members of the Security Council.
Under Secretary General Urquhart told
ecretary o tate hultz last week that the Soviets said they would
noncommittal position recently in separate conversations with him.
France did approach the USSR during the past month and
received only a noncommittal reply. The Lebanese Charge in Moscow
told the US Embassy that two Soviet officials had taken the same
Palestinians.
An officer of the Soviet Embassy in Washington, during an
appointment last week with Department of State officials, probed for
US views on an expanded UN role. He claimed that Moscow does not
have a firm position but would defer to the wishes of Syria and the
of the MNF without any expansion of the UN role.
Comment: The USSR has long been skeptical about the UN's
peacekeeping activities in the Third World, and it is unlikely to
support an expanded UN role in Lebanon as long as Syria resists it.
Soviet opposition also may reflect a belief that criticism within the
contributing countries and internationally will compel the withdrawal
Nevertheless, if Syria's position were to soften, Moscow might
find an expanded UN peacekeeping role an acceptable way of
achieving the withdrawal of US forces from Lebanon. The Soviet
Embassy officer may have been probing for some indication of US
interest in securing Moscow's cooperation in arranging a broader role
Top Secret
3 17 January 1984
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Netherlands: Parlia>rnentary Balance for ~NF
Favor deployment
Oppose deployment
Communist Party
Pacificist Socialist Party
Political Party of Radicals
Labor Party
Democrats 1966
Evangelical People's Party
Christian DemocraticAppeal
Liberals
Political Reformed
Reformed Political
Federation
i73-80
70-77
17 January 1984
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Top Secret
Prime Minister Lubbers, who arrives in Washington on Thursday,
continues to believe that INF is a no-win proposition for the
Netherlands.
Comment: Lubbers has a reputation as a politician wedded to
compromise and consensus, but he has improved his domestic
standing by taking strong budget-cutting measures and weathering a
recent dispute with the trade unions over wage restraint. His tough
line on the economy, however, has forced him to expend political
capital that makes a forthright stand in favor of INF even more risky
for his divided Christian Democrats.
Lubbers has said a basing decision should be made in June, but
he is in a quandary over INF. Most Christian Democrats and their
Liberal coalition partners favor deployment, and the Prime Minister
himself is determined to remain faithful to NATO commitments.
The Dutch leader, however, still lacks a parliamentary majority on
INF. With a bloc of Christian Democrats opposed to INF, Lubbers
fears that even victory on the issue could risk an irrevocable split in a
party already troubled by a long-term decline in voter support.
To achieve an eventual positive decision on INF, Lubbers has
embarked on a strategy that implies deployment is inevitable,
seeming almost to suggest that a decision will be forced on the
government by circumstances beyond its control. Nonetheless, the
Prime Minister continues to hope for an arms control agreement that
will preclude the need for deployment in the Netherlands, or at least
substantially reduce the number of missiles stationed in his country.
Lubbers has already expressed several "personal" ideas about
how to get negotiations back on track. These include delaying the
deployment schedule and accommodating in part Soviet views on
British and French nuclear forces.
Top Secret
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Top Secret
UK-USSR-EASTERN EUROPE: Bid To Improve Relations
The UK plans to broaden political contacts with the USSR.
An official at the British Foreign Office told the US Embassy that
London probably will end its freeze on high-level discussions with
Moscow that has been in effect since the invasion of Afghanistan. As
a first step, Foreign Secretary Howe may invite Foreign Minister
Gromyko to visit the UK when the two meet in Stockholm this week. In
addition, the British believe that NATO should move away from
concentration on arms control issues to consideration of the whole
range of East-West relations.
Comment: Prime Minister Thatcher reportedly remains skeptical
that resuming consultations with senior Soviet officials will do much to
improve bilateral relations, but she now believes that British interests
will not benefit if other Allied leaders are given a monopoly of
contacts with the Soviets. In particular, she probably hopes that
improved ties will lead to increased trade.
A higher profile in dealings with Eastern Europe also is in keeping
with Thatcher's activist style of leadership. Thatcher plans to visit
Hungary early next month. If her visit to Budapest goes well, she may
try to schedule trips to other East European countries.
The Prime Minister is aware that more visible contacts with the
Soviets, coinciding with INF deployment, would be well received in the
UK. Thatcher's hardline reputation gives her freedom of maneuver in
dealing with Moscow. A more active British role in East-West relations
would undercut opposition claims that she has aligned herself too
closely with US policy toward the USSR.
Opposition leaders Kinnock and Steel are planning to visit
Moscow in the near future, and some Tories may urge Thatcher to
preempt her rivals by trying to become a mediator between
Washington and Moscow. She is unlikely to take such advice,
however, because of concern that Moscow might try to use any British
role as an honest broker to erect barriers between London and
Washington.
Top Secret
5 17 January 1984
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Top Secret
USSR: Personnel Appointments
More than a dozen high-level personnel appointments have been
made in the last five weeks.
The appointments-including that of a new deputy premier-
have featured the advancement of younger officials and the
retirement of the infirm and elderly. The new members of the Council
of Ministers, new regional party chiefs, and new Central Committee
department officials appointed since the second week of December,
all~e ages are known, are in their forties or early or middle fifties.
A majority of the 85 members of the Council of Ministers are at
least in their midsixties. About 30 are in their seventies.
Comment: General Secretary Andropov probably was involved in
these personnel moves, because the party Secretariat has the
responsibility for approving appointments at this level. None of the
new appointees is known to be his protege. The appointments
contribute to an appearance of vigorous leadership, however, and the
newcomers probably identify themselves with Andropov, believing
they owe their promotions to him.
Top Secret
6 17 January 1984
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Top Secret
CHINA: Ideological Campaign Deemphasized
The leadership has curtailed the campaign against "spiritual
pollution" out of concern that it could damage important economic
and political programs.
A series of public pronouncements from Beijing since early
December has placed increasingly tighter limits on the scone of the
campaign.
Comment: It is too early to confirm that the campaign has been
concluded, but it at least has been downgraded.
The campaign appears originally to have been intended to
reaffirm the leadership's commitment to ideological orthodoxy while
discrediting party authors who have defended ideas that undermine
the party's ideological foundation. The results of the effort appear
inconclusive, but it probably intimidated voices in the party that are
influenced by Western Marxist concepts at the cost of reviving
longstanding disputes between reformists and conservatives in the
leadership.
The immediate reasons for the campaign against spiritual
pollution, which began three months ago, remains unclear. If Hu
Yaobang, the Politburo leader most associated with the party liberals,
had recently been in difficulty-as earlier reports indicated-he
appears now to have regained some political initiative.
Top Secret
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Top Secret
USSR: Review of Shootdown of Airliner
An article in the January issue of a Soviet Air Force journal
suggests that the Soviets are dissatisfied with the performance of air
defense personnel during the destruction of the South Korean airliner
but that they find no fault with the procedures governing the downing
of civil aircraft.
Colonel General Golubev, chief of the Air Force's Directorate of
Combat Training, writes that the interceptor pilot is the key element in
missions against intruding aircraft and that under certain
circumstances he has to make the final decision on interception. He
also criticizes ground commanders who avoid difficult decisions. The
article stresses the need for continued vigilance against aircraft that
deliberately violate Soviet airspace-as it claimed was done by the
South Korean airliner-and the necessity for a quick Soviet reaction.
Comment: The article appears implicitly to criticize the actions of
the air defense personnel without acknowledging Soviet culpability for
the incident. It probably is a call for more realistic training that could
include giving pilots more flexibility in carrying out the decisions of
ground authorities. Pilots normally are under rigid ground control, 25X1
and a proposal for such a change would be likely to prompt debate.
Such criticism would be consistent with indications of confusion
and delay in deciding on what action to take against the airliner. This
delay and the haste that resulted when action finally was taken
probably prompted Golubev's emphasis on the need for pilot
flexibility and for quick responses in such situations.
On the other hand, the article seems to reinforce earlier official
statements that in the future even airliners identified as off course by
error will be shot down as a final resort if they do not respond to
Soviet instructions. Earlier this month the Soviets proposed changes
to the Chicago Convention on the handling of international air traffic
that would assign culpability to the errant airliner, should its violation 25X1
cause it to be shot down.
Top Secret
8 17 January 1984
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Top Secret
ISRAEL: More Foreign Currency Controls
Finance Minister Cohen-Orgad yesterday announced new
restrictions of foreign currency transactions in order to strengthen
foreign exchange reserves. According to press reports, Israelis
traveling abroad will be allowed to purchase only $2,000 in foreign
exchange-a $3,000 limit had been imposed on 1 November. Foreign
bank accounts will no longer be permitted, and foreign stock
holdings-$700 million according to the Bank of Israel-have to be
liquidated within a year. Dealings in gold and gold futures are now
prohibited.
Comment: Cohen-Orgad probably took this action to provide
foreign exchange to finance the growing trade deficit without having
to draw down foreign exchange reserves. After depleting reserves by
about $150 million last year, Israeli officials probably are afraid that
additional reductions in reserves might cause commercial bankers to
restrict their lending to Israel. Enforcement of these measures,
however, will be difficult.
YUGOSLAVIA: Offers of Financial Assistance
The US Embassy in Paris reports that Western government
creditors agreed in principle last week to refinance on favorable terms
all officially backed loans to Yugoslavia that are coming due this year.
This refinancing is contingent on Belgrade's first meeting the terms of
the IMF for a standby agreement. The major points still in dispute are
the IMF's demand that Yugoslavia raise interest rates to the level of
inflation and that it centralize control of foreign exchange.
Comment: The Western governments' offer-in conjunction with
a similar offer from commercial banks-gives Yugoslavia a chance to
improve its financial position substantially this year. The
governments' insistence on the tough IMF criteria suggests strong
reservations about Belgrade's ability to manage the economy, which
they believe could prevent financial recovery. The regime recently
made minor concessions to the IMF, but there is substantial political
resistance in Yugoslavia to centralized management of foreign
exchange and to higher interest rates. Belgrade ultimately will have to
compromise, or jeopardize the recent improvement in relations with
its creditors.
Top Secret
11 17 January 1984
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Top Secret
The Australian Government has announced it will hold political
consultations with the USSR in early March. These will be the first
high-level discussions between the two countries since the Soviets
invaded Afghanistan.
Comment: Canberra believes the Soviets will want to focus on
Southeast Asia because of recent friction between Australia and
ASEAN over the Kampuchean problem. It is likely, however, to use the
talks to strengthen trade ties. The Australians may raise the idea of a
long-term wheat agreement, which they are anxious to secure with
Moscow this year. Since the Hawke government assumed office
nearly a year ago, it has resumed cultural, academic, and scientific
ties with the USSR and lifted bans on visits by Soviet ships.
Top Secret
12 17 January 1984
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T?p S~~re4
North
Atlantic
Ocean
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~~
Gibraltar (U.K.)
Algeria
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KILOMETERS
Boundary representation is
not necessarily authoritative
T?p Secr?t 25X1
17 January 1984
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Top Secret
IVORY COAST: Mounting Problems
Pro-Western President Houphouet-Boigny is to undergo medical
treatment in Europe next month for an unspecified ailment, according
to the US Embassy. The 78-year-old leader has consistently refused
to name a successor, and the Embassy believes that a leadership
struggle may result if he dies or is incapacitated before presidential
elections are held next year. Houphouet is concerned that his
country's economic troubles, which have prompted austerity
measures, could encourage growing opposition to his government.
Ivory Coast is the second-largest debtor nation in Sub-Saharan Africa
after Nigeria.
Comment: Political infighting is likely to increase as leading
politicians maneuver for position in anticipation of the elections.
Additional cuts in government spending and growing
unemployment-especially among some 2 million foreign African
residents in the country-might provoke social unrest. This could
provide Libya with opportunities for meddling and increase the risk of
a military takeover.
MALAYSIA: Investigation of Bank Scandal
Prime Minister Mahathir-who begins his visit to the US today-
named athree-man committee last week to conduct aclosed-door
inquiry into the biggest bank scandal in Malaysia's history. The
scandal broke early last year after the Bank Bumiputra's wholly
owned subsidiary in Hong Kong made large unsecured loans to three
property speculators in Hong Kong. An estimated $700 million was
lost when the property market collapsed in Hong Kong.
Comment: Mahathir's action is unlikely to stop public speculation
that the government leadership is trying to cover up the affair. If
officials close to the Prime Minister are implicated, it will increase the
odds that he will be challenged by party members before the party
elections in May.
Top Secret
13 17 January 1984
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Special Analysis
USSR-PAKISTAN-AFGHANISTAN: Prospects for Negotiations
The regime under General Secretary Andropov has made more
use of talks with Pakistan and with the insurgents in Afghanistan as an
adjunct to the USSR's four-year military effort in Afghanistan. In recent
months, however, the Soviets appear to have concluded that the UN-
sponsored indirect talks between Afghanistan and Pakistan were
deadlocked and that prospects for a political settlement on their terms
were dim. Moscow has been somewhat more successful in its
attempts to negotiate limited cease-fires with insurgent leaders in
Afghanistan. These efforts are likely to continue in the months ahead.
The military and political stalemate in Afghanistan was high on
Andropov's agenda when he took office in the fall of 1982. At
Brezhnev's funeral, he singled out both Afghan President Babrak and
Pakistani President Zia for private meetings. Soviet spokesmen
subsequently sought to spread the impression Andropov was
interested in a political settlement.
Reporting from UN officials suggests that, even before Brezhnev
died, Moscow had decided to encourage an impression of progress in
the UN talks in hopes of reducing criticism of Soviet policy at the
Nonaligned Summit in New Delhi last March. Movement in these talks
continued after the summit, and the USSR's Afghan clients made a
number of procedural concessions that helped keep the dialogue
alive.
Top Secret
Toa Secret
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Top Secret
there is a new resignation in Moscow to a
long-term military a ort. party letter on the outlook for Afghanistan
circulating in the USSR early this fall ignored the UN talks entirely. It
asserted that the USSR would be in Afghanistan several decades or
longer-even thouah it claimed the number of Soviet troops would
Top Secret
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Toy Secret
Prospects
The increasing effectiveness of the insurgents in recent months-
and Moscow's reluctance to augment its forces in Afghanistan-
probably will prompt the Soviets to continue their efforts to negotiate
limited truces. The negotiations, however, are unlikely to reduce
insurgent activity substantially in the short term. The longer term
outlook depends on the amount of support the resistance forces
receive from Pakistan.
The Soviets will try to keep the UN talks alive, if only to give
credibility to their professions of interest in a political settlement.
They apparently see the negotiations as a useful channel in the event
internal developments in Pakistan eventually lead to a more
accommodating policy in Islamabad. There are no signs that the
Soviets are prepared to consider a compromise settlement that would
change the orientation of the regime in Kabul.
Top Secret
16 17 January 1984
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~?~9 ~ie~~~~
Tip Secret
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