NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00091R000500040001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 27, 2016
• Document Release Date: September 7, 2012
• Sequence Number: 1
• Publication Date: March 18, 1987
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/11/16: CIA-RDP88T00091R000500040001-8
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'It Central
Intelligence
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National Intelligence Daily
Wednesday
18 March 1987
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op 5et,e
CPAS NID R7-nani
18 March 1987
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T Secret
Contents
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USSR: Poor Economic Performance Continues
Notes
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USSR-Angola-Cuba: Talks on Southern Africa
Finland: Implications of National Election
Greece: Spy Trials Dismissed
2
3
3
Ecuador: Political Problems
In Brief
4
5
Special Analyses
Angola: Seeking Support in Western Europe
Western Europe: Views on Chemical Weapons
Sudan: Prospects for Sadiq's Government
USSR-West Germany: Moscow Courting Bonn
8
10
11
13
Top Secret
18 March 1987
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USSR: Poor Economic Performance Continues
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Last month, for the second straight month, the Soviet machinery
sector failed to meet the goals of General Secretary Gorbachev's
ambitious revitalization campaign, thereby threatening the
attainment of this year's economic growth targets and posing a
further challenge to Gorbachev's program.
Although industrial performance improved somewhat from January to
February, it was down by more than 1 percent when compared with
the first two months of last year, acagaling-te-GIA-Gatettletioris. For
the second straight month, the civil machinery sector?central to
Gorbachev's modernization campaign?not only failed to achieve its
plan, but also weighed in significantly below last year's level.
The Soviets attribute these problems to the implementation of new
economic programs, especially in the area of quality control,
They also cite problems
with plant modernization and retooling but see drunkenness and
severe weather?factors the Soviets highlighted last month?as
secondary.
Comment: The machinery sector, which accounts for most of the
decline in overall industrial production, continues to suffer from the
effort to modernize plants while increasing production and improving
quality. Stringent enforcement of more rigorous quality control
standards has caused the rejection of a high percentage of machinery
products and thereby is the dominant factor in holding down growth.
The Soviets also are finding it difficult to work extra shifts on some
production lines while other lines are retooled. Many industrial
regions lack the public transportation, child care, and consumer
services to accommodate extra shifts.
The lackluster performance opening the year implies that Soviet
industry will have to grow at more than 5 percent for the remaining
months to meet this year's targets. Moscow has yet to indicate,
however, that it will compromise any of Gorbachev's ambitious plans
to ease the burdens on industry. As time goes on, Gorbachev will be
undOr increasing pressure to demonstrate that his measures can
produce higher quality products at the targeted quantity levels.
Top Secret
1 18 March 1987
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Top Secret
USSR-ANGOLA-CUBA: Talks on Southern Africa
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During consultations in the USSR last week, high-level
representatives of Moscow, Havana, and Luanda stated that the
elimination of apartheid is a necessary condition for a political
settlement in southern Africa,gqqeM.ing-to-Soviet-iare-rs-mxr'tg
Soviet Defense Minister Sokolov and Communist Party Secretaries
Dobrynin and Medvedyev met for two days with a Cuban delegation
led by Politburo member Risquet and an Angolan contingent that
included Defense Minister Tonha and Foreign Minister Van Dunem.
eefding-to4he-S.a3LietpressIthe delegations called for participation
of the UN, the OAU, and the Nonaligned Movement in achieving a
political settlement. In a departure from past coverage, they did not
reaffirm the Angolan Government platform of 1984, which calls for a
mutual South African-Cuban troop withdrawal from Angola and
Namibia.
Comment: Linkage of a regional settlement to the end of apartheid
and omission of the Angolan troop withdrawal formulation indicate a
hardening of the Soviet-Cuban-Angolan position. The-ellipilftele-en-a--
spensership-o-rftTffiregiorml-talits. The three co'untries probably see
few prospects for negotiations soon and will probably concentrate on
making gradual, steady military progress against the UNITA
insurgents while continuing attempts to isolate US and South African
positions on regional issues.
TOD Secret
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Top Secret
Distribution of Seats in Finnish Parliament
1987a
1983
200
200
Social Democrats b
56
57
Conservatives
53
44
Center Party b
40
37
Communists (Eurocommunists)
16
17
Swedish People's Party b
13
11
Communists (Stalinists)
4
10
Greens
4
2
Rural Party b
9
17
Christian League
5
3
Constitutionalists
0
1
Others
0
1
a Results of two-day general election that ended Monday.
b In current coalition government.
Top Secret
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18 March 1987
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Top Secret
FINLAND: Implications of National Election
Tough postelection bargaining among Finland's three largest parties
will determine whether the Conservatives?who made major gains?
will enter government for the first time since 1966. The Social
Democratic Party remains the largest party in parliament, while the
Stalinist faction in Finnish Communism continued to lose support in
the weekend voting.
Comment: The Conservative Party's gains make a center-right ruling
coalition as likely as another center-left government. The Center
Party will thus play a key role in coalition bargaining, and party leader
Vayrynen will probably side with anyone willing to offer him the prime-
ministry or a strong hand in foreign policy. Should Vayrynen's
demands prove excessive, a Social Democratic-Conservative alliance
excluding the Center Party is possible. If the Conservatives enter the
government, they are more likely to focus on domestic issues, such as
returning government-owned enterprises to the private sector, rather
than on changing foreign policy. Their willingness to maintain close
Finnish ties to the USSR makes Soviet acceptance of Conservative
participation in the government likely.
GREECE: Spy Trials Dismissed
Greek prosecutors have recommended that charges be dropped
against the two Greeks who were arrested for espionage in 1985 on
evidence provided by Soviet defector Sergei Bokhan. One of the
suspects had been accused of providing the Soviets with a traveling
wave tube, which is on COCOM's restricted list, and the other was
charged with selling blueprints for the Stinger missile. Last spring,
Greek courts acquitted the third suspect, a Greek naval officer
accused of selling NATO secrets
Comment: The prosecution was impeded by its inability to produce
Bokhan, who has resettled in the US. It nonetheless appears to have
pursued this case with less-than-wholehearted enthusiasm, and the
government took few, if any, steps to demonstrate its concern. The
outcome is likely to increase the wariness of other COCOM member
countries in viewing the Greeks' resolve to protect controlled
equipment and military secrets.
Top Secret
3 18 March 1987
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Top Secret
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ECUADOR: Political Problems
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President Febres-Cordero has acted decisively to cope with the
economic damage caused by the recent earthquakes, but belt-
tightening moves will complicate his political problems. He has cut
government expenditures and suspended public-sector imports.
Moves to increase prices for gasoline and public transportation have
already led to public protests and to sharp criticism from the
opposition parties
The leftist opposition in Congress has
called for a special legislativb-session to censure the administration
for its handling of the economic disaster.
Comment: The temporary truce between Febres-Cordero and the
Congress, announced only, last week, may be evaporating.
Congressional spokesman Andres Vallejo, who helped to conclude
the political cease-fire, has little moderating influence with extreme
leftists eager to discredit the administration before the election next
year. Meanwhile, Febres-Cordero has to contend with dissident
military elements, including former Air Force chief Frank Vargas, who
may seize on any volatile issue to challenge the government.
Top Secret
4 18 March 1987
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In Brief
Middle East
? Iranian missile boat damaged tanker carrying Saudi crude oil
Monday ... similar attack three days earlier missed ... Tehran
probably displeased over-reported Saudi agreement allowina
increased Iraqi oil exports ... further attacks likely.
Americas
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? Brazilian Planning Minister Sayad, only Cabinet member
advocating economic reforms, has resigned because of
disagreements with Finance-Minister Funaro ... further
consolidates Funaro's power, hardline stance on debt issue.
Top Secret
5 18 March 1987
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Top Secret
Special Analysis
ANGOLA: Seeking Support in Western Europe
Luanda has embarked on a well-orchestrated diplomatic and
public relations effort in Western Europe over the past six
months to undermine UNITA's campaign for Western support and
to obtain aid and investment for its deteriorating economy.
Moscow may be encouraging this effort in the hope of driving a
wedge between Western Europe and the US over aid to UNITA.
Luanda's relations with the USSR, Eastern Europe, and Cuba
remain strong; their military support remains a critical factor
in Luanda's ability to fight UNITA.
The Angolans moved rapidly to offset support for UNITA in Western
Europe after UNITA leader Savimbi's trip to France last year. Angolan
representatives in Lisbon, Paris, and London have sharply increased
their diplomatic activities, and the Angolan Foreign Minister traveled
to Portugal last December?the first official visit by a senior official
since Angola gained its independence from Portugal in 1975.
President dos Santos is expected to make state visits to Portugal and
France later this year, according to US Embassy reporting;
Luanda has emphasized in press articles
the success of its clemency program for UNITA and
other insurgent groups, its desire to improve relations with the West,
and its willingness to negotiate on regional issues,
US
Embassy reporting suggest that some West European officials believe
Angola is moving toward the West and is prepared to be more flexible
on regional negotiations.
Angola has also renewed its efforts to increase economic ties to
Western Europe in hopes of gaining additional debt relief, aid, and
investment to stimulate its economy, which has declined since the
sharp fall in oil prices last year.
High-level exchanges with Portuguese officials over the past few
months have focused on economic relations. An Angolan-Portuguese
commission will probably meet soon to discuss debt issues and joint
economic projects, according to US Embassy reporting. Luanda has
also sent representatives to West Germany and Portugal to talk with
West European businessmen about investment opportunities in the
nonoil sector
continued
Top Secret
8 18 March 1987
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Top Secret
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Ties to the USSR, Cuba
Luanda remains dependent on Soviet and Cuban backing for its
military effort to defeat UNITA. Soviet military deliveries, which
reached an estimated $1 billion last year, are continuing,
despite
recent Angolan hints of a reduction or departure of Cuban forces,
Havana has augmented its troops by some 1,600 since late 1985; it
now has about 37,500 troops in Angola.(
The Soviets and Cubans appear largely satisfied with bilateral
relations. Moscow probably recognizes that Western aid lessens or
removes a Soviet burden. Moreover, the Soviets and Cubans may
calculate that, if Luanda expands its ties in Western Europe, doing so
would reduce the likelihood that such governments would recognize
or provide support to UNITA.
Outlook
Angola is likely to push ahead with its initiatives in Western Europe
over the next year in order to undercut UNITA's attempts to gain new
support. Moscow and Havana are likely to monitor closely Angola's
dealings with the West and will quickly seek to rein in Luanda if closer
ties appear to be yielding appreciable Western gains in political
influence or threatening the Soviet military presence in Angola.
Luanda's moves may encourage West European governments to
exert new pressure on Washington to resume talks with Luanda.
Although Angola may agree to some informal communications with
US officials, it will probably continue to demand diplomatic
recognition and an end of US aid to UNITA before agreeing to serious
Too Secret
9 18 March 1987
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Top Secret
Special Analysis
WESTERN EUROPE: Views on Chemical Weapons
Some West European NATO Allies, including West Germany and
the UK, harbor growing doubts about the US commitment to a CW
ban, but France is becoming concerned that Western haste to
reach an agreement might produce an unverifiable ban and leave
Western Europe without a chemical deterrent in case of Soviet
noncompliance.
The British?following bilateral talks with the Soviets at Geneva?
view Moscow's attempts to narrow differences with the US as giving
the appearance of being constructive, but London questions their
sincerity.(
Moreover, the
West Germans, the Belgians, and the Netherlanders also have
complained that US verification concerns are slowing the negotiations
at a time when the Soviets are prepared to move more rapidly.
The French see Soviet moves as primarily designed to block the US
binary chemical weapons program and to speed the removal of
chemical weapons from Western Europe. Paris, which plans to
produce a modern chemical deterrent, also objects to early
declaration of CW stockpile locations and wants to retain a small
"security stockpile" as a hedge against Soviet noncompliance until
late in the proposed 10-year destruction period.
West European governments?especially the UK and France?are
increasingly skeptical of reaching an agreement on a global chemical
weapons ban soon, but some other West European officials may still
hope that an agreement could prevent any controversy related to the
resumption of production of binary munitions by the US later this
year. Moreover, most Allies believe that the US verification proposal
for mandatory challenge inspections is nonnegotiable and poses
security risks to sensitive Western military installations. They are
likely to press Washington to water down its proposal, and other
parties?like the British?might propose new compromises intended
to narrow the gap between Washington and Moscow.
France, however, is likely to remain out of step with the other West
European states by supporting the US binary program and by arguing
that a limited agreement permitting small chemical deterrents is more
prudent than a complete CW ban.
Top Secret
10 18 March 1987
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Top Secret
Special Analysis
SUDAN:
Prospects for Sadiq's Government
Nearly a year after taking office, Prime Minister Sadiq al-Mahdi
has achieved little apart from survival. By avoiding tough
decisions, he has allowed Sudan's economic morass to deepen
and has failed to show progress in resolving the civil war. Sadiq
probably is increasingly vulnerable to a military takeover
Sadiq's principal success has been in denying his enemies issues they
could use to mobilize opposition against him. He continues to blame
former President Nimeiri for Sudan's economic problems and for the
southern insurgency. Sadiq has staved off opposition from his own
northern Muslim constituency by refusing to abrogate Islamic law, a
major rebel demand, and by portraying the insurgents as agents of
Ethiopia intent on weakening Sudan.
Vulnerabilities
Sadiq, however, cannot claim even one major legislative achievement.
Proposed constitutional changes remain hamstrung. Key issues,
including amendments that would increase the Prime Minister's
power as well as provisions dealing with Islam's legal role in Sudan,
continually fall victim to factional infighting within the ruling coalition
or to opposition from the hardline National Islamic Front.
Sudan's economy still founders, increasing the potential for
demonstrations and strikes. Power shortages prompted street
protests in Khartoum last year, and Sudan's Energy Minister
forecasts more shortages starting this month. Meanwhile, the civil war
continues to siphon off revenues needed to provide goods and
services to southerners escaping the fighting.
continued
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Outlook
The military's impatience with Sadiql;ftetlieleetuvill almost certainly
grow this year. Libya's freewheeling military transits into western
Sudan as part of its campaign in Chad are giving ammunition to
critics of Sadiq's "evenhanded" approach to Tripoli.
The start of the rainy season next month will give the insurgents in
the south the upper hand, and Army casualties are likely to mount,
heightening the senior officers' frustration with Sadiq. Renewed civil
disorders could impel the military to push the civilian government
aside if Sadiq continues to show no sign of strong leadership
Top Secret
12 18 March 1987
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TOD Secret
Raising the Reunification Question
Moscow has dangled the idea of German reunification before Bonn at times in the past,
almost always to discourage West German actions that would adversely affect Soviet
interests. For example, some Soviets raised the issue in 1983 when the debate on the basing
of US INF systems in West Germany was at its zenith.
\in the most recent, authoritative Soviet
public pronouncement on the reunification issue?in the weekly Moscow News?the Central
Committee's German expert Portugalov said that "the life of Germans as a nation is only
possible within the framework of two independent and sovereign states."
In addition, Moscow has recently supported the East Germans' attempts to use CDE
confidence-building measures to legitimize East Berlin as their capital. The East Germans plan
to hold briefings at a Defense Ministry building in East Berlin for Western observers of coming
military exercises, despite protests from the three Western powers, who do not accept any
non-Soviet military presence in East Berlin.
Too Secret
18 March 1987
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Special Analysis
USSR- Moscow Courting Bonn
WEST GERMANY:
The Soviets are moving quickly to expand their influence in West
Germany to reduce US leverage in Bonn. They seem to be sending
deliberately mixed signals on when and how much political
relations can be improved. Moscow is hinting that it is even
willing to discuss German reunification, but it also is insisting
that a meeting between Chancellor Kohl and General Secretary
Gorbachev would be possible only if Kohl apologizes publicly for
comparing Gorbachev's propaganda skills to those of Josef
Goebbels. Over the near term, Moscow will seek to build on the
current momentum of its trade and security initiatives to expand
West German participation in modernizing the Soviet economy
and to obtain support for its arms control proposals. Both East
and West Germany want improved relations between Bonn and
Moscow, but any Soviet ploy on reunification would cause
serious problems for Bonn and East Berlin.
Even before the reelection of Kohl's coalition government in late
January, Moscow moved to improve trade relations with Bonn and to
appeal to West German desires for reduced East-West tensions. On
economic issues, the Soviets conveyed their interest in joint ventures
in which West German firms would play a key role.
The Soviets have other cards to play. These include offering freer
emigration of ethnic Germans, encouraging East Berlin to allow
greater intra-German visits, and setting a date for a visit to Bonn by
Foreign Minister Shevardnadze.
In a recent article for a Moscow weekIlk, jSbietoffal
noted approvingly the view of "progressive minded" Germans that
the German nation can exist only as two independent states.
Gorbachev might nevertheless want to stimulate a divisive debate on
reunification in West Germany, although he probably recognizes that
doing so would foment controversy in the Warsaw Pact as well as in
NATO. Indeed, a revival of the German question might immobilize
both alliances and possibly threaten Gorbachev's other initiatives,
which are aimed at distancing the West Europeans from the US.
continued
Top Secret
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Top Secret
A major problem the Soviets have had in wooing the West Germans
has been their displeasure with Kohl's refusal to apologize for
comparing Gorbachev's propaganda skills to those of Goebbels. They
have underscored their feeling toward Kohl by dealing exclusively with
Foreign Minister Genscher and singling him out for special praise for
his attitude on East-West relations.
Mixed Reaction in Both Germanys
Bonn is eager to improve relations. Genscher has publicly praised
Gorbachev's domestic reforms and called for a positive Western
response. Kohl is pressing for an international conference on East-
West trade and has been receptive to Moscow's arms control
initiatives. He is unlikely to offer a formal apology for the Goebbels
reference but will probably try to satisfy Soviet demands with
conciliatory statements.
East Berlin also welcomes Soviet overtures to Bonn, especially if
they create an atmosphere that would enable East German leader
Honecker to visit West Germany. Any Soviet demand for
humanitarian concessions to please Bonn would be resisted,
however, because the East Germans want to control the pace of these
potentially destabilizing changes.
The reunification issue raises problems for both Germanys. A sign
that the Soviet leadership was seriously rethinking the question would
set off an intense debate in West Germany. The opposition and West
German media would press the government to explore any hope of
reunification, and neutralist sentiments would probably increase.
The problem for East Germany would be even more threatening.
Soviet hints about reunification would be destructive to the regime's
long struggle to create a sense of nationhood, and frictions with
Moscow could become intense.
Top Secret
14 18 March 1987
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