NATIONAL INTELLIGENCE DAILY FRIDAY 27 JANUARY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100010087-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 27, 2016
• Document Release Date: May 24, 2010
• Sequence Number: 87
• Publication Date: January 27, 1984
• Content Type: REPORT

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Director of
Central
Intelligence
Top Semet
National Intelligence Daily
27 January
COPY 1 R ~j_
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Friday
27 January 1984
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Top Secret
France-Chad-Libya: French Military Moves .......................... 1 25X1
Honduras-Ell Salvador: Territorial Dispute ............................ 3
Guatemala: Political Developments ........................................ 4
USSR-Nigeria: Relations With New Regime ............................ 6
Argentina-Chile: Status of Beagle Channel Dispute .............. 6
Special Analyses
Contents
Jamaica: Stalling on Elections ................................................ 8
UK-Italy: Program To Develop Helicopter .............................. 8
Saudi Arabia-Pakistan: Arrest of Pakistanis .......................... 9
Japan-USSR: Prospects for Foreign Ministers' Meeting ........ 9
Eastern Europe-USSR: New CEMA Project .......................... 10
Nicaragua: Economic Decline Continues ................................ 12
Syria-Iran: Outlook for Relations ............................................ 14
Top Secret
27 January 1984
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Top Secret
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27 January 1984
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Top Secret
FRANCE-CHAD-LIBYA: French Military Moves
A French presidential adviser yesterday told the US Embassy that
French forces will soon launch a limited operation to destroy avionics
equipment in the Jaguar that was shot down on Wednesday, retrieve
the pilot's body, and free the two Belgian medics being held by the
rebels. According to a source of the US defense attache in Paris,
The adviser says Paris may need several days to decide how the
recent fighting will affect long-term policy in Chad. He indicated that,
in his view, Chadian oppositionist groups are under Tripoli's control
and that France and Libya have no choice but to negotiate mutual
withdrawals. He believes France would have to consider further
Comment: Dust storms probably delayed earlier plans to launch
a rescue mission. In addition, France's lack of an airborne early
warning capability in Chad would make an airstrike against targets in
The recent fighting is likely to have strengthened the hand of
French officials who favor a retaliatory attack even at the risk of a
military showdown with the Libyans. President Mitterrand probably
favors limited retaliation, followed by diplomatic efforts to obtain a
The French are deploying additional military forces in Chad for
possible action north of the 15th parallel.
Four additional Jaguars, a KC-135 tanker, and several transport
rived yesterday in N'Djamena.
the French also sent more armored
France has temporarily lifted restrictions on French military
operations north of the 15th parallel.
military action if such talks proved futile.
Meanwhile, the Libyan news agency has denied French charges
that Libya is responsible for the renewed fighting.
the north vulnerable to Libyan fighters
Libyan withdrawal.
2.5X1
25X1
25X1
The Libyans probably are satisfied for now with the rebel victory
at Zigey. They are likely to try to calm the military crisis, but they are
ready to resist forcefully any major French strike in the north.
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25X1
25X1
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Boundary representation is
not neoessaoly authoritative.
27 January 1984
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HONDURAS-EL SALVADOR: Territorial Dispute
Honduras is reemphasizing its territorial claim in the Gulf of
Fonseca, aggravating the longstanding dispute in the area with
El Salvador.
Honduran officials are publicly renewing their claims of
sovereignty over Meanguera Island-which has been occupied by
Salvadorans for more than a century-and are calling for an electoral
census there. These actions follow two strong Honduran protests over
language in the new Salvadoran constitution that implicitly asserts
El Salvador's sovereignty over Meanguera. Salvadoran officials allege
that Honduran reporters, soldiers, N census takers
have visited the island twice recently.
Salvadoran President Magana wants to avoid further controversy
over the Meanguera issue. Foreign Minister Chavez Mena says he is
willing to meet Honduran officials at the earliest opportunity, but he
indicated that a meeting scheduled for today with his Honduran
counterpart and the Defense Ministers of both countries may be
postponed. Meanwhile, the US Embassy has learned that the
Salvadorans soon will send an elite reconnaissance unit to
Meanguera for training purposes.
Comment: Despite efforts to calm the controversy, further
problems are likely to arise. Candidates in El Salvador's current
presidential campaign may inflame the territorial issue. Honduras is
likely to view the deployment of a Salvadoran military contingent to
the island as an escalation of the dispute.
Although a border commission established by a treaty of 1980
has been meeting on a fairly regular basis, both sides have been
reluctant to schedule high-level discussions to resolve the dispute.
The issue probably will remain deadlocked until it is referred to the
International Court of Justice next year as stipulated in the treaty.
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Top Secret
GUATEMALA: Political Developments
Chief of State Mejia issued a decree last week preparing the way
for Constituent Assembly elections in July, but many political party 25X1
leaders probably will not be satisfied.
Mejia did not accede to the parties' demand that the assembly
have legislative functions, including the power to name a provisional
president. He did respond to one of the politicians' demands,
however, by allowing 23 of 88 assembly deputies to be elected as 25X1
national at-large candidates.
The rightist National Liberation Movement-the strongest
party-reportedly has agreed to an alliance with a smaller rightwing
group to contest the elections, and it is discussing an election
coalition with two other parties. Several leftist and centrist parties
also are considering an alliance
Meanwhile, the government says almost
700,000 voters have been registered, mostly in Guatemala City.
Party leaders from both the right and left claim that the military's
control over the civilian defense forces is paralyzing political
organizing in the countryside. They also are concerned that the Army
Comment: Political leaders are likely to continue demanding that
the assembly be allowed to nominate a provisional president, and
they may claim that Mejia's continued opposition demonstrates his
intent to remain in power. Mejia's opponents probably will use this
argument to seek military support for their plans to oust him.
Perceptions of the legitimacy of the elections-at home and
abroad-also could be undermined if complaints of military
involvement in the political process continue.
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USSR-NIGERIA: Relations With New Regime
Soviet media have given increasingly favorable coverage to the
new military government in Lagos. When Nigerian officials visited
Moscow last week, TASS said the USSR confirmed its readiness to
develop a "mutually advantageous" cooperative relationship.
Comment: Moscow is trying to protect its economic interests,
and it presumably hopes for expanded contacts with Lagos. Soviet
officials, however, probably have no illusions that Nigeria will
fundamentally change its economic and political orientation toward
the West. The $1.2 billion Ajaokuta steel plant in Nigeria is the largest
Soviet aid project in Sub-Saharan Africa. The Nigerians have
complained that the plant is badly planned, poorly constructed, and a
source of corruption.
ARGENTINA-CHILE: Status of Beagle Channel Dispute
Argentine and Chilean officials are optimistic following the signing
of a "Declaration of Peace" this week on the Beagle Channel dispute,
but growing opposition in Buenos Aires to ceding the islands claimed
b both sides could delay final settlement.
Comment: The opposition in Argentina currently is fragmented,
but military leaders and rival Peronist politicians could exploit the
issue to try to undermine President Alfonsin. If Alfonsin has to prolong
the talks to seek greater public support, the issue could become
increasingly tied to other controversial policy initiatives, and this
might delay a settlement.
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JAMAICA: Stalling on Elections
Government officials say Prime Minister Seaga is planning to
postpone local elections until the end of the year. Seaga is confident
his party still enjoys majority support, but he fears a poor showing in
local contests this spring would intensify pressure for new general
elections. By delaying the local elections, Seaga believes he can stave
off a general election until the middle of 1985. The Embassy reports
that one prominent local pollster interprets the last-minute surge in
voter registration this month as a sign that voters are swinging to
former Prime Minister Manley and his People's National Party.
Comment: Public sentiment clearly favors a new general election
based on the updated voting lists. Seaga probably hopes to put it off
until his program of creating public works jobs and the dispensation
of political favors assure a victory for his party.
UK-ITALY: Program To Develop Helicopter
The UK and Italy announced on Wednesday an agreement to
develop jointly a long-range helicopter-designated the EH-101-for
both military and civilian use. Participating Italian and British firms are
to receive government funds to develop the civilian version. Each
country's Navy plans to order large numbers of an ASW version,
which is expected to enter service in the early 1990s. A military
transport version capable of carrying six tons of cargo or 28 troops 25X1
also will be developed.
British and Italian firms began work in 1980 on a common design
to replace current inventories of Sea King long-range ASW
helicopters. The resulting design is slightly smaller than the Sea King
and is powered by three rather than two gas turbine engines,
providing greater lifting capability. Both countries are expected to
market the helicopter abroad as a replacement for the Sea King. 25X1
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SAUDI ARABIA-PAKISTAN: Arrest of Pakistanis
Saudi security forces arrested a large number of Pakistani
nationals in Medina last month for publicly staging an Islamic
ceremony prohibited by Saudi law, according to the US Embassy in
Jiddah. Several Saudi Shias took part and also were arrested. The US
Embassy in Islamabad reports that the arrests prompted a
demonstration last Saturday in front of the Saudi Consulate in
Lahore. Saudi Interior Minister Nayif made an unscheduled visit to
Islamabad on Tuesday to confer with President Zia.
Comment: Public demonstrations in Saudi Arabia of any kind,
especially by foreign workers, are rare and usually evoke a strong
response from security forces. There is no reporting to indicate that
the disturbances were the result of Iranian subversive efforts, but
Saudi Shias were involved, and there is considerable evidence that
Iran wants to promote disruptive activities in the Persian Gulf states.
Nayif's quick trip to Pakistan-only two days after Zia had visited
Saudi Arabia-shows Riyadh's desire to prevent the incident from
damaging bilateral relations.
JAPAN-USSR: Prospects for Foreign Ministers' Meeting
Foreign Minister Abe reiterated his interest in promoting a
political dialogue with Moscow during Soviet Ambassador Pavlov's
courtesy call on Monday, according to a senior Japanese official.
Pavlov acknowledged that it was Foreign Minister Gromyko's turn to
make a visit but added that it would have to be preceded by "solid
preparations." Japanese officials say Abe is interested in meeting
with Gromyko-despite serious reservations in the Foreign Ministry-
even if he does not come to Japan. Abe "would consider" a stopover
at the Moscow airport on one of his trips to Europe this spring if the 25X1
Soviets proposed such a meeting.
Comment: Abe hopes to become prime minister and believes a
successful diplomatic opening to the USSR would work to his benefit.
The Soviet media remain critical of Tokyo's foreign policy, and their
comments on Abe's current US visit suggest their belief that a
meeting with Gromyko would not accomplish much. The media also
have reported, however, that Abe has called for improved relations.
The Soviets might propose a meeting at the airport, if only to test 25X1
Abe's sincerity.
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EASTERN EUROPE-USSR: New CEMA Project
A Romanian official has told the US Embassy in Moscow that
Romania probably will join East Germany, Hungary, and
Czechoslovakia in construction of the Krivorozhye iron ore combine in
the Ukraine. The combine will cost the equivalent of an estimated
$3.6 billion, and, on completion in 1990, will produce 12.8 million
metric tons of iron ore pellets annually. The East European states will
provide manpower, equipment, and possibly hard currency in
exchange for iron ore deliveries over a 10-year period.
Czechoslovakia has announced it will contribute the equivalent of
nearly $500 million and will receive 1 million metric tons of ore
annually from 1991 to 2000.
Comment: Approval of this project-the first major CEMA joint
investment since the mid-1970s-reflects a renewed Soviet push for
East European investments in return for deliveries of raw materials. In
the past, however, such projects have been hindered by difficulties in
reaching agreements on pricing and the amount of East European
investments. The East Europeans are facing poor prospects for trade
with the West and Moscow's tough line on future exports of oil and
other raw materials. As a result, they now may believe that they have
little alternative to greater participation in Soviet resource
development.
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Major Insurgent Attacks Against Economic Targets, 1983
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Special Analysis
Top Secret
Nicaragua's economic slide of the past two years has been
accelerated by damage caused by the anti-Sandinista insurgents, but
the harm has been far less than that caused by the guerrillas in
El Salvador. Since July, increased insurgent activity against
Nicaraguan military targets has also affected some economic facilities,
including oil storage tanks, port facilities, and state cooperatives. The
USSR, in a significant departure from its past economic aid policy, is
helping to make up the losses from insurgent attacks on oil facilities
by shipping petroleum to the Sandinistas. The insurgents claim to
have laid mines near Nicaragua's main oil port, however, and they
The Sandinistas claim that the attacks have cost over $100
million. Most recent analysis indicates that the total direct and
indirect damage, however, does not amount to more than $30 million,
or about 1 percent of Nicaragua's output in 1983. The actual drain on
the treasury is less because many facilities and materials have yet to 25X1
be rebuilt or replaced.
The largest direct costs stem from the destruction of oil facilities.
Damages from the raid in October on the port of Corinto probably
amount to $5 million, including loss of $2.1 million worth of diesel fuel.
About $650,000 worth of fuel and equipment has been destroyed by
the sabotage of other oil facilities.
The indirect costs of the insurgency are more difficult to estimate.
Gold exports, which normally account for 4 percent of export
earnings, were slowed at least temporarily by the loss of fuel.
Insurgent attacks in the interior also have hampered commerce
and agriculture. The guerrillas have kept some coffee harvested for
export bottled up in the interior and frightened away some coffee
The insurgency, however, has not yet prompted the regime to
spend substantially more on defense and security. Government
figures show that spending in 1983 for these purposes was virtually
the same as in 1982.
Most of the national security budget of $200 million-15 percent
of total spending-and a fair portion of the personnel on active
military duty probably would have been used for military purposes
continued
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Nicaragua: Estimated Drawdowns of Official
Foreign Economic Aid
Grants, Loans, and Supplier Credits
Million US S
600
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even if Nicaragua were not facing an insurgency. The government
spends little on arms and ammunition because Cuba and the USSR
provide most of these items without demand for immediate cash
payment.
Searching for Help
The economic decline last year was mainly the result of the
burden of a $3 billion foreign debt, bankers' refusal to extend new
loans, growing shortages of skilled labor, the junta's economic
policies, and low world prices for commodities. These problems have
led to 19-percent unemployment, 20- to 30-percent inflation, scarcity
of clothing, and rationing of gasoline and some foodstuffs.
With output already down about 25 percent from prerevolutionary
levels, the Sandinistas are worried about any additional economic
hardships. To strengthen their appeals for international aid-and to
deflect domestic criticism on economic issues-the Sandinistas
exaggerate the cost of the insurgency, at one time putting it at
$4 billion. Despite such claims, and the actual increase in insurgent
activity, Managua last year received less non-Communist aid than in
The Outlook in 1984
The insurgents have not seriously damaged Nicaragua's basic
infrastructure, but they could still cripple key export earnings and
imports. If mines that the insurgents claim to have laid at Puerto
Sandino sink any oil tankers, for example, shipping costs could soar.
Resulting cuts in hard currency receipts and vital imports would
immediately strike hard at all sectors of the economy.
Nicaragua's other key concern is to secure enough financing to
import the oil it needs just to run the economy at the level of last year.
Next month Mexico is scheduled to begin reducing oil shipments by
about one-fifth-a drop of some $25 million annually.
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Special Analysis
SYRIA-IRAN: Outlook for Relations
The Syrians continue to view economic and political ties with Iran
as beneficial despite the basic incompatibility of the two countries'
long-term regional objectives. Their attitude toward Tehran is shaped
chiefly by a concessionary oil arrangement and shared hostility toward
Iraq, the US, and Israel. Nonetheless, President Assad almost
certainly recognizes that Iran's ultimate goal of establishing Islamic
republics throughout the region will eventually bring the two sides into
In recent years, common short-term policy objectives toward Iraq
and Lebanon have prompted the Syrian and Iranian Governments to
establish close relations. Assad opposes Iraqi President Saddam
Husayn and has assisted Tehran's war effort by refusing to allow Iraqi
oil to transit the pipeline through Syria to the Mediterranean. He also
has facilitated Iran's procurement of military equipment since the 25X1
In return, Iran provides Syria with substantial quantities of high-
quality crude oil at below-market prices. Although Damascus
invariably fails to pay most of its debts to Tehran, the Iranians remain
eager to supply oil as an inducement to keep the Iraqi pipeline closed.
Assad probably realizes that no other government would offer his
country such generous terms or allow it to fall so far behind in its
payments.
The two regimes also share the immediate goal of getting the
Multinational Force and Israeli troops to leave Lebanon. The Syrians
allow some 300 to 700 Iranian Revolutionary Guards to maintain
camps in the Bekaa Valley in Lebanon and to train local Shias to
conduct terrorist activities against US, French, and Israeli forces.
Damascus thus exerts pressure on the Lebanese Government and
MNF contingents while avoiding direct involvement.
Long-Term Incompatibility
Despite common interests, the two governments have
irreconcilable long-term goals. The Iranians want to transform Iraq
and Lebanon into Islamic republics. Damascus in turn seeks to install
pro-Syrian regimes.
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The establishment of Islamic republics in the region would
threaten Assad's secular Alawite regime. Moreover, the President
almost certainly recognizes that Tehran hopes to replace his own
government with a fundamentalist Islamic one.
Assad probably is concerned that Iran's support for radical
Lebanese Shia groups could become a problem for Syria over the
long term. The growing presence of Iranian-backed Shia terrorists in
the Bekaa Valley could threaten Syria's ability to control the situation
Differences also exist in the two countries' willingness to work
with the US to ease regional tensions. Assad-under certain
circumstances-would be willing to strike a deal. Iran and its
Lebanese surrogates, however, oppose all negotiations and would
use terrorism to try to sabotage any conciliatory moves by Syria.
Prospects
At this stage, Damascus apparently believes that the advantages
of an arrangement with Tehran outweigh the disadvantages. Assad
probably doubts that the Iranian-backed Shia extremists pose a
serious threat to Syrian interests so long as they remain a small
minority in Lebanon. He may be apprehensive about the long-term
spread of Iranian-inspired Islamic fundamentalism in the region but
probably is confident that his regime is in no immediate danger.
In addition, Syria presumably believes that its control over the
Iraqi pipeline gives it considerable leverage in dealing with the
Iranians, who want to prevent Iraq from collecting oil revenues. Assad
could threaten to reopen the pipeline if Tehran embarked on a policy
that he opposed.
Assad's attitude probably will harden, however, as the latent
strains in the alliance become more pronounced. A major regional
development, such as the end of the war between Iran and Iraq or the
assassination of Saddam Husayn, also could prompt a change in
Syrian policy. In time, Damascus almost certainly will abandon its ties
to Tehran, because the relationship has increased frictions with the
Persian Gulf states and deepened Syria's isolation in the Arab world.
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