NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00659R000100290001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 27, 2016
• Document Release Date: October 9, 2012
• Sequence Number: 1
• Publication Date: February 5, 1987
• Content Type: REPORT

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Director of
Central
Intelligence
National Intelligence Daily
Thursday
5 February 1987
Top Secret
rpac nun 147-1)90.1Y
5 February 1987
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Contents
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India-Pakistan: Agreement To Pull Back Some Troops
Poland: Economic Gain Masks Basic Problems
Libya: Pressures on Economy Growing
Notes
1
2
3
Colombia: Top Drug Trafficker Arrested
West Germany: Possible Purchase of US Helicopters
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5
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In Brief
7
Special Analyses
USSR: Shcherbitskiy's Position in Doubt
Arab States-USSR-US: Significance of Al Basrah
Ethiopia-Sudan: Tension Over Insurgencies
Ecuador: Democracy Under Siege
8
10
12
14
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INDIA-PAKISTAN: Agreement To Pull Back Some Troops
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61,1 a/ Pa.
Indian and Pakistani negotiators agreed yesterday to pull back
some troops from a key narrow section of their mutual border
and to discuss furtherwithdrawals, sector by sector.
Ttre-agreerrient calls for most forces to withdraw within 15 days from a
sensitive segment of the border in southern Kashmir to peacetime
locations, according to press reports
Comment: The agreement should reduce tensions, but both sides are
likely to maintain a high level of readiness until India's Brass Tacks
exercise concludes this spring. Although the first step of the
withdrawal will amount to a deescalation in a key border area, the
chance of inadvertent clashes elsewhere will remain high so long as
troops from both states occupy forward positions.
Pakistani President Zia will portray the agreement as a statesmanlike
gesture that breaks the stalemate. The ruling Muslim League will
endorse it, but some Pakistani Army commanders probably will
question privately whether it adequately addresses the Indian buildup
in border areas not specifically designated. The Pakistani opposition
will charge that the government has sold out to New Delhi, but Zia
probably will be able to withstand such criticism so long as the
agreement is not breached.
Commanders on both sides probably will continue to deploy
forces until their respective Defense Ministries translate the
agreement into operational orders?most likely in a few days. The
drawdowns along the border are likely to be implemented slowly
because commanders on both sides are reluctant to move so quickly
as to give the other side any advantage
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Poland: GNP and Industrial Production,
1979-86
Percent change from previous year
10
Industrial
production
5
GNP
1979 80 81 82
83 84 85 86. r
?10
?15
aPrelitninary.
311827 2.87
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POLAND:
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Economic Gain Masks Basic Problems
Poland's modest economic rebound in /986 will be difficult to
sustain unless Wojciech Jaruzelski's regime is willing to address
basic economic problems.
GNP grew by 2-percent last year, as compared with 1.6 percent in
19851peteeePektukte4Mete"atese Accelerated industrial
production paced by strong growth in machine building and
electronics accounted for much of this gain. Near-record harvests
also contributed to improved economic performance.
On the other hand, increases in imports helped prop up industrial
production but prevented any improvement in the hard currency
trade balance, and Warsaw slid deeper into arrears to its creditors.
Despite improved supplies of food and consumer goods, shortages
persist, and officially reported inflation surged to an annual rate of
19 percent, up from 15 percent in 1985. Accaccliag..t.ca-the-66
.E.4:49elseyr many items\are available only on nonofficial markets at
two to three times th lofficial once..
Comment: Growth for 1986 may stfengthen opponents of economic
reforms and encourage the Jaruzelski regime to pursue its current
cautious policy. Warsaw has avoided measures that would address
Poland's fundamental economic problems in favor of preserving living
standards to ensure domestic tranquillity. The regime has not
adjusted market prices sufficiently to reflect scarcities, limited wage
increases, or diverted resources from consumption to investment in
competitive industries and debt service. Such measures would
improve the prospects for sustained economic growth but would hurt
consumers in the short run and almost certainly arouse popular
protests.
Warsaw's economic strategy depends in part on the continued
willingness of creditors to delay repayment of Poland's debt and
interest. Polish industry is heavily dependent on intermediate goods
imported from the West. The IMF and Poland's creditors probably will
press Warsaw to limit import growth, raise exports, and reduce
domestic consumption in exchange for additional financial
assistance.
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LIBYA:
Tnn SPertat
Pressures on Economy Growing
Domestic economic difficulties aggravated by the cost of the
conflict in Chad are increasing popular unhappiness with the
regime of Muammar Qadhafi.
chronic food shortages in Libya are now critical.
Fresh dairy products, bread, and pasta are unavailable; fruits and
vegetables are hard to find; and meat, when available, is extremely
expensive and of poor quality. Rationing has not eased difficulties
because most stores have little or no food on the shelves.
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Shortages are most acute in the cities. 25X1
many Libyans continue to migrate to urban areas 25X1
in search of food and other scarce commodities such as ciaarettes,
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water is in short supply, waste removal is sporadic, and sanitary
conditions are extremely poor.
many Libyans attribute these
deprivations to regime stockpiling to support the conflict in Chad.
Many neither support nor understand that increasingly costly military
action and mounting casualties are compounding their frustrations,
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mobilization of reserves and the draftina of high school students also
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Comment: The war may be costing Libya $10 million a day.
Nevertheless, Qadhafi appears unwilling to draw on the country's
$6 billion in reserves to cover war needs. As a result, the cost of the
conflict apparently is being borne solely by the Libyan population.
Although the average Libyan has endured severe economic
disruptions since oil prices collapsed last year, current conditions
appear to be the worst to date. There have been no reports of
organized economic protests so far, but discontent is rising rapidly.
3 ruary
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COLOMBIA: Top Drug Trafficker Arrested
The arrest and immediate extradition to the US of Carlos Lehder,
one of Colombia's top cocaine traffickers, underscore Bogota's
determination to resist intimidation by narcotics interests, but the
move is likely to trigger a wave of reprisals. The flamboyant Lehder
has been wanted on a Florida drug charge since 1984. He is said to
have ties to Colombian guerrillas.
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Comment: Lehder's arrest will raise the morale of Colombia's
antinarcotics forces, which have tended to view the leadership of the
powerful cocaine cartel in Medellin as untouchable. The government's
action is likely to provoke retaliation against US and Colombian
officials?both in Colombia and abroad?by traffickers anxious to
spike the policy of extradition to the US. The cartel?which probably
was involved in a recent assassination attempt against the Colombian
Ambassador in Budapest and which last year murdered a key
prosecution witness in Louisiana?may also target witnesses against
Lehder in the US.
WEST GERMANY: Possible Purchase of US Helicopters
West Germany may turn to the US AH-64 Apache helicopter if the
embattled French-West German attack helicopter program is
canceled. According to the US Embassy in Bonn, budget overruns,
disagreements over design and configuration, and differing national
operational requirements have plagued the program from its
inception. Bonn and Paris are conducting a feasibility study for a new,
less capable single-engine combat helicopter that would not be ready
before 1995, nor would it fill all West German requirements for an
attack helicopter.
Comment: Bonn considers the Apache the most attractive military
option, but the government would need the support of West German
industrialists to select the US helicopter. They probably would require
that any deal provide cooperative advantages to West Germany, such
as work sharing, interoperability with other systems in the West
German inventory, and weapons standardization. Bonn might even
request a reciprocal purchase of a major West German weapon
system, such as the Leopard ll main battle tank
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Middle East
Europe
In Brief
Iraqi forces digging in east of Al Basrah ... Baghdad claims Iran
bombed Irbil T-kiestley.,-accarclinglo_la.apilassy,
Egypt's President Mubarak called yesterday for national
referendum on dissolving People's Assembly, whose mandate is
being challenged in court ... cited democratic benefits of new
ele tion laws .. o ositio le ders have endorsed move.
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? Jacques Franquet, former top French antinarcotics official, named
to head unit that is supposed to coordinate French counterterrorist
groups ... will probably have more success than redecessor in
improving cooperation among them and with US
UK to guarantee bank credits for machinery exports to USSR,
according to press... should enhance competition with West
Germany. France...
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East Asia
? Taiwan's trade surplus reached record $15.6 billion last year ...
US statistics indicate Taipei's deficit with US topped $15 billion
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imports from US increased at lowest rate among Taipei's major
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Moscow's Attacks on the Ukraine
Since Mikhail Gorbachev became General Secretary of the Soviet Communist Party, Vladimir
Shcherbitskiy and his subordinates have come under increased criticism, but Shcherbitskiy
has nevertheless kept his own people in office in the Ukraine.
Spring 1985: Gorbachev and party Secretary Ligachev visit Dnepropetrovsk, the political base
of Leonid Brezhnev and of Shcherbitskiy, and criticize shortcomings in economic and cadre
work.
Autumn 1985: Pravda articles criticize Lvov Oblast First Secretary Dobrik, an associate of
Shcherbitskiy, for economic mismanagement and ineffective leadership. Shcherbitskiy
reportedly goes to Moscow to defend Dobrik.
December 1985, March 1986: Pravda criticizes Chernigov Oblast First Secretary for giving
unjust punishments and for abuses in cadre work. Shcherbitskiy responds personally to
Pravda, but no local officials removed.
June 1986: Gorbachev criticizes officials in Cherkassy Oblast for punishing an institute
director who violated regulations when he introduced innovative technology at a plant and
calls for the director's reinstatement. Pravda subsequently criticizes Cherkassy First
Secretary for having wrongly claimed to have corrected the situation. In a letter to Pravda,
Shcherbitskiy admits the accuracy of the charges and reports that the First Secretary had
been "rebuked."
July 1986: Pravda editorial implicitly links problems in the Ukraine and Kazakhstan by
criticizing the performances of three first secretaries from the Ukraine and four from
Kazakhstan but none from other regions.
October 1986: Party Control Committee accuses Kirovograd First Secretary, a protege of
Shcherbitskiy, and several Moldavian party officials of padding figures. Party officials from
Moldavia, but none from the Ukraine, fired.
December 1986: Pravda reveals that a Central Committee decree blames the Ukrainian
leadership for unsatisfactory grain production. Pravda's account of discussion of the decree
at the plenum of the Ukrainian Central Committee is slanted to reflect poorly on Shcherbitskiy.
January 1987: Pravda carries account of an attempt by officials in Voroshilovgrad to
incriminate a local journalist. KGB chief Chebrikov reveals that he has reprimanded Ukrainian
KGB chief and fired the Voroshilovgrad KGB chief.
January 1987: Ligachev criticizes Ukrainian Central Committee for intolerable slowness in
implementing agricultural reforms and points out that the Ukraine has gone from being a
producer of surplus grain to a net consumer of grain.
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Special Analysis
USSR:
Shcherbitskiy's Position in Doubt
There is mounting evidence that General Secretary Gorbachev is
building a case to replace Ukrainian party boss Shcherbitskiy,
the only remaining regional leader of the Brezhnev era on the
Politburo. Because Shcherbitskiy has a strong base of support in
the Ukrainian Central Committee and Gorbachev wants to avoid
the sort of local resistance provoked by the removal of two other
regional party bosses, Gorbachev may delay ousting the
Ukrainian leader until he is confident that the groundwork has
been carefully laid.
Moscow increased its criticism of the Ukraine in December with a
decree by the Soviet party's Central Committee blaming the region's
leadership for agricultural failures. The latest attack on Shcherbitskiy
came from party "Second" Secretary Ligachev, which suggests that
Ligachev supports the effort to unseat him. Without naming
Shcherbitskiy, Ligachev criticized the Ukrainian Central Committee,
which Shcherbitskiy heads, for being so "intolerably slow" in
implementing agricultural reforms that the Ukraine has changed from
a producer to a consumer of grain. Ligachev linked his criticism of the
Ukraine to similar comments about Kazakhstan and Voronezh Oblast,
where local first secretaries recently have been removed
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Another attack earlier in January took the form of an expose in
Pravda of illegality and mismanagement in the Ukraine that
implicated the first secretary and other top officials in Voroshilovgrad
Oblast. Four days after the expose was published, the Ukrainian
leadership reprimanded several officials, but this mild response
contrasts sharply with KGB Chairman Chebrikov's almost
simultaneous dismissal of the Voroshilovgrad KGB chief for his
involvement in the affair.
Shcherbitskiy seems to have been targeted primarily as a result of
policy differences with Gorbachev in several key areas. He is more
cautious than the General Secretary on cultural relaxation and
economic reform, less optimistic about the prospects for East-West
detente, and places greater emphasis on defense needs. In contrast
to Dinmukhamed Kunayev and Viktor Grishin, the party bosses
Gorbachev ousted in Kazakhstan and Moscow, Shcherbitskiy does
not appear to be vulnerable to charges of corruption or
mismanagement.
continued
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Top Secret
Strength in the Ukraine
So far, Shcherbitskiy has been very successful in protecting Ukrainian
officials criticized by Moscow. The Voroshilovgrad party leader is the
fourth oblast chief from the Ukraine who remains in office after sharp
criticism from the center. Many officials in other regions have been
fired after similar attacks
Shcherbitskiy cannot be removed from his position as Ukrainian party
chief without a vote by the local Central Committee. This would not
necessarily be a pro forma operation, given the debts that other
Ukrainian leaders owe to him and the precedent set by the Moscow
party organization's strong resistance to the removal of Grishin in
December 1985. The Ukraine was still occasionally being praised in
the media in November and December 1986, which suggests that
Shcherbitskiy may still have defenders in Moscow.
Implications
Given his strength in the Ukraine, Shcherbitskiy may hang on to his
position for some time. If Gorbachev maintains his political
momentum, there is little doubt that Shcherbitskiy eventually will be
removed.
His removal would send a strong signal throughout the party that
officials can lose their jobs if they fail to support central policies
actively. In light of the increased criticism of the Ukraine, the longer
Shcherbitskiy remains in office, the more his presence will be viewed
as a sign of Gorbachev's weakness.
There are several rumors that Gorbachev wants to replace
Shcherbitskiy with KGB chief Chebrikov, presumably because he
wants a strong hand in the Ukraine to break up Shcherbitskiy's
machine and to put his own man at the helm of the KGB. Appointing
Chebrikov would risk touching off demonstrations, however, as
happened when Kunayev was replaced by a Russian in Kazakhstan.
Although Chebrikov is originally from the Ukraine, he too is an ethnic
Russian whose appointment would break recent precedent and be
strongly resented by Ukrainian officials and ordinary citizens alike.
Shcherbitskiy's departure would leave President Gromyko as the lone
representative on the Politburo of the Brezhnev era, further shifting
the balance in the leadership in the direction of change.
9
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Special Analysis
ATES- Significance of Al Basrah
Prospects remain good that Iraq will be able to defend Al Basrah
in the near term, but Iran's success in pushing toward the city
has raised concerns throughout the region about the staying
power of the Iraqi military in the south. Most Arab leaders see
Baghdad's ability to hold Al Basrah as essential to prevent the
establishment of a radical Shia regime in southern Iraq, the
downfall of President Saddam Husayn, and the violent export of
the Iranian revolution.
The Arab states on the Persian Gulf believe significant Iraqi military
reverses increase their own risk of intimidation, sabotage, and even
military action from Iran. Their large Shia populations make them
vulnerable to heightened domestic religious fervor and unrest, and
the fall of Al Basrah probably would result in antire ime activities by
the Shias in several states
The Gulf Arab states have already intensified their efforts to improve
security and military ties to other Arab states. The recent warming
trend in their relations with Egypt is due in part to Iraqi military
setbacks.
The fall of Al Basrah probably would prompt at least Saudi Arabia
and Kuwait to make some show of military force?perhaps the
deployment of Gulf Cooperation Council troops to Kuwaitattclis
? n-cleser-seetrrIty
?cooperation-with the US but-T4ot-to -the-point-ofIroveking-ir At
the same time, the Gulf Arab states probably would try to improve
their political and economic ties to Iran to give Tehran a stake in
maintaining cordial relations.
. z
VI I
More aggressive Iranian policies in the region would threaten Egypt
and Jordan?Iraq's key Arab supporters outside the Persian Gulf?
heighten tension in Lebanon, and complicate Syrian and Libyan
support for Tehran. Neither Cairo nor Amman is willing to send
meaningful numbers of troops to Iraq, although they might send some
forces to other Gulf Arab states to signal their concern. They would
expect significant financial assistance in return for any such
commitment, and Egypt would also expect full reintegration into the
Arab League.
Iranian military advances are making it harder for Syria to support
Tehran, but the depth of President Assad's hatred of Saddam Husayn
probably precludes a reversal in the Syrian position as long as the
Iraqi leader remains in power. Iran's potential to act against Syrian
objectives in Lebanon also weighs against any move by Damascus to
continued
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abandon Tehran. Strong Arab pressure on Damascus, however,
including threats to reduce aid, might prompt Assad to modify his
public position.
Implications for Moscowton.
,?,-,3:13e-USSRVIratrrpliffilifratrriSmcplieTziwcancerneckliet4.14e,ti&-*
migtit_u_s_eAraqirsetbacks.to4ustity;aminCi7-eaSeirr-
'Tli-aull.,and-Meseew-pmbatity-would111trentrits"
Bag bgad.ifIr.aa.agaiszed-a-major-viclorR The Soviets probably'
would renew their calls for a negotiated settlement and a return to
prewar boundaries and intensify their public criticism of Iran.
Although Moscow might provide Iraq with additional advanced
weapons?including the SS-21 missile system?it probably would not
provide longer range systems. The Soviets also would try to capitalize
on Gulf Arab fears b ?ffering them increased security assistance.
An invigoration of Islamic fundamentalist fervor in the region would
heighten prospects for instability in such pro-Western states as
Kuwait and Bahrain, and possibly in Egypt, Jordan, and Saudi Arabia.
Iraq might seek closer cooperation with the USSR. Even the Gulf
Arabs?particularly Kuwait?might seek improved relations with
Moscow, laeiieving-the-Biwiets-44eve-a-eyeater-ability-than-the-4S-te
Jestoein-iren. Meterirani7OVerses-prolTablrait
.
csm,that-US-erms-sales-tolran-were-responsible,forrtheitantag__
ritmances;,
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Special Analysis
ETHIOPIA-SUDAN: Tension Over Insurgencies
Relations between Ethiopia and Sudan have deteriorated sharply
in recent months as a result of suspicions stimulated in part by
the increased support that each has given to insurgents in the
other's territory. Each is putting more pressure on the other to
stop such aid, and each has launched efforts to rally regional and
international political support. The worsening relatinshio dims
11)
prospects for negotiations to end either insurgency.
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Both sides are retaliating more aggressively as strains continue to
mount. Addis Ababa has begun to use helicopters to resupply the
insurgents in southern Sudan. The Ethiopian Air Force launched
airstrikes in November on Eritrean rebel camps in northern Sudan
killing es Sudanese civiliansfraGeer-difig-te-thet1S-Emtrassy 25X1
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K4ar..toupa-i?s-Fe4aliating....b.mitveerr large stocks of ,weapons?
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to ' -ean-Febekeetions-,
litical Maneuvering
Each sid?so is trying to gain regional and international political
leverage. Kh-r.teum withdrew its Ambassador from Ethippia-ro-llowing
the airstrikes and irmlIy protested to the OAU. PriM-e Minister
Sadiq publicly condemne thiopian "aggression" and for the first
time acknowledged Sudan's spport for-the Eritreans.
?
Ethiopia's Foreign Ministe_crecently visited-Egypt to discuss regional
matters and to deliver-arnessage from Chairm-amMengistu.
A Legacy of Suspicion
Mengistu has long suspected Sudan and other Muslim states of trying
to dismember Ethiopia by supporting the insurgents in Eritrea, whom
he regards as tools of Western and Arab "imperialism,"
Libya's suspension of aid to the Sudanese
12
continued
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rebels, its military support for the Sadiq regime, and threats by Libyan
leader Qadhafi to provide assistance to the Eritreans if Mengistu does
not stop his support to the Sudanese insurgents all have contributed
to his suspicions.
For his part, Sadiq believes that the Mengistu regime seeks to divide
Sudan and to obstruct Khartoum's efforts to rebuild its economy,-
aeGrarzlimg-te4Ige-IdS-Embassrirr-Kilartourn. Sudan's public
statements have changed to reflect this view; they attack Sudanese
rebel leader John Garang as an "Ethiopian puppet" and insist that he
must demonstrate his independence from Addis Ababa before
Khartoum will even consider negotiating with the rebels.
Outlook
The recent aggravation of the longstanding, fundamental distrusts
between Sudan and Ethiopia and the growing support that each is
giving to the insurgents in the other state all but kill any hope for
negotiating an end to either insurgency at least for the near term.
Since Mengistu rebuffed Sadiq's offer of peace last year, Sadiq has
appeared determined to exact a high price for Ethiopia's
intransigence. For his part, Mengistu probably will continue to impede
the access of moderate African leaders to Garang and to block
negotiations between Khartoum and the rebels. As a result, US-
sponsored attempts to foster a negotiated settlement in Sudan are
likely to remain thwarted
Despite the strains between Addis Ababa and Khartoum, neither
appears willing to risk a direct military confrontation. Sadiq's military
options are limited because the Sudanese forces already are
stretched thin. Ethiopia would be unlikely to initiate sizable cross-
border operations because such a move would invite greater regional
sympathy, and possibly increased Libyan military support, for the
Sadiq regime. Mengistu probably hopes that his proposed visit to
Egypt will help to limit regional support for Sudan and to lend
momentum to his efforts to portray Ethiopia as the aggrieved party.
Top Secret
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Special Analysis
ECUADOR: Democracy Under Siege
Leftist opposition groups and former Air Force Commander
Vargas are still trying to oust President Febres-Cordero, but the
President's opponents lack the unity and the support of the
Army, which would be needed to force him from office. Although
Febres-Cordero appears to be back in charge, he will have to
maintain his combative stance to keep opposition forces at bay.
Vargas, who was released from prison in exchange for the President
during the mutiny at Taura airbase last month, is in hiding but has not
left the country. He emerged last week to tell reporters he is willing to
lead a coup or to head a leftist political coalition in the presidential
election next January. As long as Vargas remains at large, he
probably will serve as a catalyst for violent, spontaneous moves
against Febres-Cordero
leftist party, the Vlaoist-Ropular Democratic
Movement, has had some su
anii-6767farent.
demonstrations in Quito to sustain the crisis.
the_garty_hasTtried- ()laical offensive in the
?g.i aturelVdtae-FetreS-Cordero's resignation but has failed to
.raotilid-c-trsia5r5ort from-other-leftist-parties,
moves to unite the left are-foundering-o-n-ideisItTirar
../- 1/4anct_tacjical_divisions. The legislators are also afraid that the Army will
i
-----dibrartid=the-assembly 'Lit yotes?f-or ii-npeachifient.-Irateda,lhellisift
proposed a nonbfridin resolution urging _tb.e_President-tp-resigia.,,,,
Outlook
Although Army and Navy commanders at first were outraged by
Febres-Cordero's agreement to free Vargas, they are again backing
the President. They apparently realize that their support for Ecuador's
democratically elected government is necessary to maintain
V...assistance and ..good will of Ecuador's neighbors. ,
ebres-Cordero's decisions last week to imprison the Air Force
mutineers and to fire Air Force Commander Andrade apparently have
reassured his supporters and enabled Army Commander Asanza to
rally the Army around the government.
continued
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The Army's threats to dissolve the legislature and the President's
increasing dependence on the Army have put the 1988 election in
jeopardy. Febres-Cordero cannot run for reelection, but, even if he
could, the leftist opposition would stand a good chance of winning. At
the very least, political polarization and unresolved splits in the
military will keep the President on the defensive for the remainder of
his term.
Febres-Cordero is unlikely to moderate his combative approach
toward his many opponents, and the rest of this year, probably will be
marked by frequent demonstrations and efforts by legislators to oust
key government advisers. The Army's role in politics is likely to
increase as the 1988 election approaches.
Top Secret
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