NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00963R000100200001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 21
• Document Creation Date: December 27, 2016
• Document Release Date: October 18, 2012
• Sequence Number: 1
• Publication Date: July 24, 1987
• Content Type: REPORT

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~Ef uirecior or I v ~~~-sa_
Central 7!X1
National Intelligence Daily
Friday
24 July 1987
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Ton Secret
Contents
Western Europe-Japan-China: Assessing Soviet INF Offer ......
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Sri Lanka-India: Moves Toward Peace ...................................... 4
USSR: Grain Prospects Improve .................................................. 5
Kuwait-OPEC: Oil Production Increasing .................................... 6
Iraq: More Conciliatory Kurdish Policy ........................................ 6
Philippines: Sharp Reaction to Land Reform Decree ................ 7
North Korea-South Korea-US: Military Talks Proposed ............ 7
Fiji: Chiefs Propose Constitutional Compromise ........................ 8
Suriname: Tenuous Opposition Coalition .................................... 8
Mexico: Ruling-Party Vote Fraud ................................................ 9
Brazil: Party Demands Hamstring Bresser .................................. 9
Special Analyses
East Germany-West Germany: Summit Prospects .................... 11
India-China: Preparing for Prolonged Border Tension .............. 13
France-Southern Africa: Paris Reassessing Ties ...................... 14
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Top Secret
TK
WESTERN EUROPE- Assessing Soviet INF Offer
JAPAN-CHINA:
Reactions to General Secretary Gorbachev's acceptance of the
global elimination of all LRINF and SRINF systems have been
favorable, but the key NATO Allies are likely to reject Moscow's
condition that US warheads for West Germany's 72 Pershing lAs
be destroyed.
British Prime Minister Thatcher has welcomed Gorbachev's offer
provided there are no strings attached and that any agreement is
verifiable. West German Chancellor Kohl and Foreign Minister
Genscher have noted that the global elimination of all INF systems
would help to overcome some differences on verification. Japanese
Prime Minister Nakasone was receptive to the proposal but said the
government would have to study it carefully
Media reaction in Western Europe credits Gorbachev with removing a
key obstacle to an INF accord. Press accounts generally have
neglected to mention the Pershing 1A issue as a remaining obstacle.
Chinese news media carried without comment a strai h forward
summary of Gorbachev's interview on the Soviet offer
Comment: West European leaders probably will withhold a definitive
reaction until Moscow's position on the Pershing 1As becomes clear.
Bonn-for the time being, at least-almost certainly will reject
inclusion of the Pershing 1A warheads as part of an agreement. and
British and French officials are certain to support Bonn
The Kohl government will come under strong pressure from the public
and from political opposition to compromise on the Pershings, but the
government's position on their exclusion is unlikely to change as long
as Bonn is certain of support from its allies. At some point, however,
Bonn probably would be receptive if the Soviets were to offer to
bypass the Pershing issue by signing a separate agreement on LRINF
systems. London and Paris, on the other hand, strongly favor
including SRINF constraints in an overall INF agreement
Beijing almost certainly will welcome Gorbachev's announcement.
The removal of all medium-range missiles in the Soviet Far East is
Japan's primary arms control concern, and Tokyo probably is pleased
that Gorbachev specifically delinked cuts in Asian INF from earlier
demands for reciprocal cuts in US nuclear systems in the Far East.
Top Secret I?tixl
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SRI LANKA-INDIA: Moves Toward Peace
Meetings between Colombo, New Delhi, and Tamil groups this
week have resulted in significant progress toward a settlement
on Tamil autonomy, but Colombo's continuing military operations
and opposition from Sinhalese groups suggest President
Jayewardene will crack down hard on the insurgents if talks fail.
The US Embassy in Colombo says Jayewardene hopes for a
settlement, and some Sri Lankans speculate a deal may be cut this
week. Jayewardene met individually with many cabinet ministers this
week to urge their support for the proposals. Tamil insurgent
representatives and moderate Tamil politicians reacted favorably to
the plan in discussions with Indian Foreign Secretary Menon Tuesday,
according to US Embassy reports. Influential segments of the
Buddhist clergy and the main Sri Lankan opposition party are against
the proposals, however, and have warned that its acceptance might
reci itat nd's majority Sinhalese community.
Prime Minister Gandhi will go to Sri Lanka next week.
The latest proposal expands on agreements negotiated last year
between Colombo and Tamil moderates and provides for two
separate provinces in the north and east to be governed by a single
provincial council-a key insurgent demand. It also calls for a
referendum within a year to decide if the two provinces should be
merged. New Delhi will negotiate on the Tamils' behalf, according to
US Embassy reporting, and, for the first time since he assumed office,
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Comment: The new proposals go further than previous offers in
addressing Tamil demands for autonomy, and they break new ground
in appointing India as a negotiator in the peace process. Success will
depend, however, on whether New Delhi can. deliver the main
insurgent group and whether Jayewardene can overc -
successfully ignore-domestic opposition to the plan.
jayewardene is
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New Delhi's new position as
face of domestic opposition.
Colombo and the insurgents. Gandhi risks another foreign policy
embarrassment if Jayewardene backs away from his promises in the
negotiator for the Tamils will put to the test its leverage on both
Top Secret
4 24 July 1987
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USSR: Grain Prospects Improve
Izvestiya reported today that the 1987 Soviet grain crop so far is
quite good "above or on a level with last year's." The harvest in 1986
was officially set at 210.1 million metric tons-the fourth largest ever.
Comment: It would take optimal growing conditions for the rest of the
crop season for the Soviets to produce 210 million tons this year. If
the weather is only average, the crop probably will be closer to
200 million tons. A dry fall and a harsh winter that hurt winter grains
was followed by a prolonged cool, wet spring that delayed sowing,
jeopardizing this year's crop. During the last two and a half months,
however, more favorable weather conditions over almost all Soviet
grain-growing areas have left most of the grain crop very healthy.
Top Secret
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KUWAIT-OPEC: Oil Production Increasing
Kuwait's decision to exceed substantially its OPEC oil production
quota threatens to undercut hard-won OPEC unit and further strain
relations with Iran Kuwait's oil 25X1
production increased sharply in June and may have reached 2 million
barrels per day by midmonth, almost double its quota. Iran and Iraq
have also been raising production-almost in tandem-over the past
few months, and the United Arab Emirates continues to lift more than
its quota. Total OPEC production currently exceeds its ceiling of
16.6 million b/d by more than 1.5 million b/d 25X1
Comment: Kuwait may be stockpiling crude as a hedge against
Iranian hostilities or trying to maintain its market share in the face of
Tehran's overproduction. Not all the oil is being sold, but sustained
Kuwaiti overproduction and exports would put pressure on oil prices.
It would also raise the risk of Iranian retaliation against Kuwaiti
tankers and oil facilities. Saudi Arabia may, in the extreme case,
threaten to stop supporting Kuwait's oil export operations in order to
prevent the OPEC accord from unraveling. Kuwait has not bowed to
pressure from Saudi Arabia or Iran in the past however, and probably
will continue its independent oil policy 25X1
IRAQ: More Conciliatory Kurdish Policy
Iraq is easing its repr ssive campaign against rebellious Kurds and
making attempts at conciliation. It has stopped razing Kurdish villages
and is allowing lowland Kurds to return to areas near their destroyed
towns. It has also reopened
negotiations with Jalal Talabani, who heads the dissident Popular
Union of Kurdistan. Izzat Ibrahim, Vice Chairman of the Revolutionary
Command Council and a longtime Kurdish expert, has again been put
in charge of the regime's Kurdish policy. He replaces security chief
Ali Hasan Al-Majid, who had been directing the harsh campaign.
Comment: Iraqi President Saddam Husayn appears to be heeding
advice from the military that the government risks losing more
territory to the rebels next winter if the Kurdish situation is not
defused. A more conciliatory policy may ease Kurdish animosity and
stem the recent increase in defections to Iran. A reduction in guerrilla
fighting in the North would make it less necessary to move Iraqi forces
from the front with Iran. Talabani probably is negotiating with
Baghdad both to relieve pressure on his forces and to hedge against
a reduction in Syrian support if Syrian-Iraqi relations warm. Baghdad
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Top Secret
Aquino's Land Reform Program
Component
Complete the distribution of rice and corn
lands following program begun by former
President Marcos ... includes about
13 percent of cultivated land.
Redistribute land seized from Marcos cronies
as well as foreclosed and idle lands ...
almost 10 percent of cultivated land.
Redistribute or provide for equity shares in all
other farms ... includes sugar and coconut
plantations ... 18 percent of cultivated land.
Allocate public lands ... 14 percent of
cultivated lands.
Too Secret
24 July 1987
Relatively little controversy ... but
administrative problems could slow
distribution.
Legal complications likely to slow disposition
of seized lands.
Most contentious component ... sugar and
coconut farmers resistant ... some
threatening to take up arms.
Program still in early planning stages.
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Top Secret
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PHILIPPINES: Sharp Reaction to Land Reform Decree
A decree President Aquino issued Wednesday outlining a $2.5 billion
program to redistribute some 55 percent of the agricultural land has
met immediate and widespread opposition. Although Aquino left
important details of the program for the decision by the new
Congress-which convenes Monday-some legislators have already
announced they will craft their own program. According to press
reports, at least 15 associations of landowners have said their
members will not give their land up and will destroy their crops if
Aquino's program is enacted. The largest farmworkers union, a
Communist-dominated group that claims Aquino's program has too
many loopholes and is doomed to fail, planned a protest rally in
Manila today
Comment: The legislation is likely to bog down in the Congress
because most congressmen are large landowners or depend heavily
on landowners for political support. Politically powerful sugar and
coconut farmers-who stand to lose their source of income in return
for a vague package stretching compensation over 10 years-may be
the most vocal opponents. Should the Congress hesitate too long,
Communist-led radical farmers and landless peasants will increase
their protests, raising the risk of violence. A farmers' rally in Manila
earlier this year left 12 demonstrators dead.
NORTH KOREA-SOUT KOREA-US: Military Talks Proposed *Xq
07(A-4
North Korea
proposed that the two Koreas and the US
begin talks on arms reduction next March in Geneva, with observers
from the Neutral Nations Supervisory Commission. The proposal
includes reducing the armed forces of each Korea to fewer than
100,000 troops by 1991, removing US forces and nuclear weapons
from the peninsula, closing US military bases, and converting the
Demilitarized Zone into a "peace zone." P'yongyang proposed that
the Commission verify the actions. It announced that it will reduce its
own army by 100,000 troops by yearend.
Comment: The offer repackages several longstanding North Korean
themes; P'yongyang almost certainly floated it for propaganda gain
and to take advantage of political uncertainty in the South. The
initiative's timing-three weeks after South Korean President Chun's
handpicked successor called for democratic reform-and the
proposal that talks begin immediately after a new President takes
office suggest the North hopes to give the o osition students and
dissidents in the South a campaign issue
Tnn SP_f_rP_t
7 24 July 1987
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Tee Secret
FIJI: Chiefs Propose Constitutional Compromise
remaining in the Commonwealth.
Fiji's traditional Council of Chiefs proposed Wednesday that the
52-member lower house of parliament be expanded by adding
10 seats of ethnic Fijians, in addition to the 22 seats reserved for them
under the existing constitution. The proposal will be considered by
the Governor General's constitutional review committee, which
includes a minority faction led by deposed Prime Minister Bavadra.
Meanwhile, Colonel Rabuka, who led the mid-May coup, reversed his
position on declaring a republic and announced he now favors
important sugar industry if the regime declares a republi
and leaders of the deposed coalition government, which was
predominantly Indian, have threatened a national strike in the
Comment: The decision of the Council of Chiefs is designed to ensure
the dominance of the native Fijians over the slightly more numerous
ethnic Indians. Both the decision and Rabuka's reversal reflect the
success of moderate elements-led by former Prime Minister Mara.
Nevertheless, the political climate is increasingly polarized. Militant
Fijian youths rampaged against Indian businesses this week in Suva,
ISURINAME: Tenuous Opposition Coalition
Suriname's three major ethnically based political parties recently
formed a coalition to contest the National Assembly election in
November, but inherent tensions already threaten its prospects.
he leader of the-
smallest party reportedly is distrusted by other party leaders because
he has cooperated more readily with Bouterse. Aeeordling-taltmrbS
t-mbaoo party leaders expect the turnout at a rally scheduled in
early August to dwarf 1ne Bouterse recen
they anticipate easily winning the election.
to determine the president.
Comment: Common hatred of Bouterse will help hold the coalition
together initially, but ethnic and political differences probably will
surface as the election approaches. Surinamers may be reluctant to
embrace the coalition because they believe elections will not affect
Bouterse's hold on power. If the coalition gains sizable popular
support, Bouterse probably will try to destroy it through a
combination of co-optation and intimidation. Defection of even a
minor party to Bouterse might give him enough votes in the legislature
Tot) Secret
8 24 July 1987
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Top Secret
State of Mexico: Fradulent Voting Results
Voter turnout: 1,885,151
Mexican
Socialist
Party
8.9
National
Action
Party
9.9
Percent Actual Votes Percent
Institutional
Revolutionary
Party
63.6
Voter turnout: 890,000
Other 9.0
National
Action
Party
14.6
Institutional
Revolutionary
Party
33.7
Ton Secret
24 July 1987
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MEXICO: Ruling-Party Vote Fraud
Vote tampering in elections this month robbed the Mexican Socialist
Part of the governorship of the State of Mexico 25X1
the party-a recently formed leftist coalition-won almost 25X1
43 percent of the vote against 34 percent for the ruling Institutional
Revolutionary Party. Official tallies, however, gave the PRI 63 percent
of the vote and the Socialists 9 percent. my 25X1
25 percent of registered voters cast ballots, but the State Electoral
Commission doubled that amount. In addition ballots were altered at
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Comment: Ruling-party officials probably hoped a sweeping victory in
the country's most populous state would set the tone for the
presidential election next year. The unexpectedly strong showing by
the left may indicate it will be a greater challenge to the PRI than the
conservative National Action Party, the traditional runner-up. The
75-percent abstention rate probably hurt the ruling party, and party
officials probably will try to select candidates with more appeal and
resort to more liberal use of economic stimuli to woo voters in future
elections.
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BRAZIL: Party Demands Hamstring Bresser
Brazil's ruling party, the Democratic Movement Party, has put Finance
Minister Bresser on notice that domestic growth must not be
jeopardized by an agreement with creditors. The party has announced
an economic platform calling for growth and higher salaries; the party
is strongly opposed to policies that would lead to recession. Its
platform stresses that Brazil must not allow formal or informal
monitoring by the IMF and must reduce transfers abroad in order to
increase domestic investment
Comment: Although Bresser's long-range plan is broadly consistent
with the goals of the ruling-party platform, the party remains
antagonistic toward creditors. Domestic political pressures are
already causing Bresser to backpedal on an IMF agreement, the
resumption of interest payments, and the option of converting some
debt into foreign investment. The ruling party, by restraining the
Finance Minister's ability to offer compromises, is increasing the risk
that current talks with bankers will prove fruitless. Lack of foreign
financial support would make it hard for Brazil to increase investment
needed for rapid growth. Obtaining sufficient investment funds is
essential to Bresser's long-range plan. Public deficit targets will have
to be adjusted upward, if necessary, to prevent recession, making it
difficult to keep inflation in check. Rising prices and increased
domestic demand would endanger export targets, which are already
ambitious when viewed against the recent arowth of international
trade.
Tnn Apr_rpt
Top Secret
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terrorists ...
Communists
Haitian Communists reportedly planning attacks on US Embassy,
diplomats this week ... may have assistance from Middle Eastern
willing to target US officials.
South Asia H Police killed five in Bangladesh during first half of 54-hour
antigovernment general strike, according to press, LiG Embassy
... police and opposition increasingly aggressive.
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130,000 Iranian Hajj pilgrims staged peaceful . 25X1
additional Iranian-led protests likely. 25X1
demonstrations in Saudi Arabia on Friday, Tuesday ... much
anti-US rhetoric, but security forces avoided confrontation ...
Iranian military threat ... no major policy changes likely.
in Saudi Arabia, according to US Embassy ... will discuss
cooperation with US reflagging operation, contingency plans for
- Gulf Cooperation Council ministerial meeting to be held Saturday
propaganda advantage.
US Embassy unable to confirm alleged RENAMO massacre last
weekend of almost 400 civilians in southern Mozambique ... no
firsthand accounts available ... Maputo exploiting incident for
President Kaunda probably next OAU chairman
H OAU summit opening-Mendey-probably will avoid harsh criticism
USSR "- USSR on 7 Julytwithdrew ships urveilling area near Bermuda
where Yankee-class submarine sank last fall ... probably for
operations elsewhere ... coverage expected to resume
primarily watches for Western salvage attempts, debris.
confront previously taboo issues
opening of other archives and approval of monument to Marshal
Zhukov, war hero persecuted by Stalin ... shows willingness to
Top Secret
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x
Special Analysis
EAST GERMANY- Summit Prospects
WEST GERMANY:
East German leader Honecker's visit to Bonn in early September,
his first, will advance the long effort he has made to legitimize
his regime and normalize relations with West Germany on his
terms. Moscow's approval of a German summit is a major
tactical shift, probably intended to induce Bonn to accept the
Soviet demand for destruction of the US nuclear warheads for its
Pershing 1A force or to have Bonn urge the US to exclude all
short-range INF systems from an INF accord. The Soviets this
week publicly highlighted the Pershing issue as a principal
obstacle remaining to an INF agreement.
The visit will have great symbolic importance for all Germans, in part
because it has been so long and difficult in the arranging. It is at least
the third attempt Honecker has made to reciprocate the official visit
Chancellor Schmidt made to East Germany in 1981. The continuing
Soviet veto of a German summit has been a major bone of contention
between Honecker and Moscow.
Honecker has long sought an official trip to West Germany for his own
prestige and to validate his claim to head a separate and sovereign
German state. Whatever the protocol limitations imposed by Bonn,
the Western public will view the event as a full-blown visit by a foreign
head of state. Honecker will also visit his hometown in the Saarland,
where his sister lives, and call on President von Weizsaecker and
important regional leaders, including Bavaria's Franz-Josef Strauss.
Honecker's reception by Chancellor Kohl in Bonn makes it likely the
East Germans will press Kohl to reciprocate with a visit to East Berlin.
Such a visit would buttress East Germany's claim, contrary to the
Four-Power Agreement, that the Soviet Sector of Berlin is its capital.
In Bonn, the two sides will sign an environmental agreement and may
conclude accords on nuclear energy and scientific and technical
cooperation, . They may
agree to joint projects for sharing electric power and improving
highways and rail service from West Germany to West Berlin.
Top Secret
11 24 July 1987
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Top Secret
The West Germans may ask Honecker to rescind a recent decision to
limit the amount of hard currency available to East German travelers
to the West. While admitting no linkage, Honecker might consider a
deal in return for Bonn underwriting this travel or an expensive
project in East Germany like environmental cleanup. He is likely to
press his proposal for a nuclear-weapons-free corridor in Central
Europe as well as Moscow's position on Pershing missiles. Bonn will
stress its support for major reductions in conventional, chemical, and
short-range nuclear forces.
A successful summit may help the Christian Democrats and Free
Democrats in two West German state elections shortly after
Honecker's departure but could also lead to public pressure for major
concessions to East Germany, such as recognizing a separate
citizenship. Honecker is likely to hope that after Bonn he will be able
to visit Paris and London.
Top Secret
12 24 July 1987
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Special Analysis
Preparing for Prolonged Border Tension
put forward proposals for talking about their differences.
Since mid-June, New Delhi and Beijing have stopped exchanging
strongly worded warnings against the use of military force and have
the Chinese regarded Indian Foreign Minister iiwar s
in Beijing, and Tiwari reportedly plans to go in October.
visit to Beijing last month as a conciliatory gesture and have invited
him to return. The Indians have agreed, according to the US Embassy
however, is likely to fall short of China's expectations.
Aksai Chin territory in the west to demonstrate flexibility. India's
position that its claims to Arunachal Pradesh are not negotiable,
The Chinese expect Tiwari to offer concessions, and Prime Minister
Gandhi probably will give him leeway to discuss China's claims to the
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Although, the political atmosphere has improved somewhat, neither
side seems ready to make the concessions necessary for serious
_
negotiations. F
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both sides anticipate a prolonged period of tension.
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movements. New Delhi may be hoping to forestall a Chinese militarv
move by delaying its "Checkerboard" exercises until fall.
Neither side is likely to risk a major military clash until after Tiwari
presents his proposals in Beijing. If political talks are held but fail to
satisfy Beijing, the Chinese are likely to postpone a date for the next
round of border talks-now rumored for November-and may try to
seize some Indian territory before winter weather restricts troop
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Top Secret
Special Analysis
FRANCE- Paris Reassessing Ties
SOUTHERN AFRICA:
French Prime Minister Chirac and President Mitterrand are
expanding contacts with southern Africa's Frontline States and
taking a more critical line toward Pretoria; they are responding
to domestic pressures and positioning themselves for the
presidential election next year. Underlying differences on South
Africa will probably preclude major shifts in French oli on
sanctions and divestment.
The impetus for France's efforts to improve relations with Angola,
Mozambique, and Zimbabwe has come from French arms
manufacturers and other businessmen, including the management of
the oil consortium Elf-Aquitaine, who see opportunities for French
trade and investment The US 25X1
Embassy in Paris reports that Elf officials have been pressing Chirac
in particular to withdraw support from UNITA which has
Elf's operations and technicians in Angola. 25X1
French Foreign Ministry officials have helped persuade Chirac that his
narrow concentration on francophone Africa-in contrast to the
Socialists' broader perspective-was ill-advised, according to the
Embassy. This spring Chirac sent his diplomatic counselor to the
Frontline States to solicit their views on South Africa and other
regional issues. French and Mozambican officials recently discussed
military aid, and the French agreed to open a $170 million line of
credit to Maputo
Chirac Still Straddling Issue
Chirac may hope that improved relations with the Frontline States will
add credibility to his conservative government's ill-defined policy
toward the region. Since he came to power last year, he has
attempted to steer between those in his government who view the
ANC as a vehicle for Soviet interests in South Africa and human rights
activists who favor a hardline attitude toward Pretoria. He has
distanced himself from the divestment and sanctions movements, for
example, by taking refuge behind British and West German
opposition to sanctions within the EC, but he has been increasingly
critical of South Africa recently.
continued
Top Secret
24 July 1987
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Top Secret
Chirac's efforts to improve his South African credentials have been
hurt by a group of conservative legislators from his governing
coalition and the extreme right who claimed on returning from a
factfinding trip to Pretoria that apartheid no longer exists in South
Africa. Chirac is being pressed by some government ministers to
refute those statements and risks losing centrist voters in his
campaign for the presidency next year if he fails to clarify his stand.
Mitterrand Pressing Ahead
President Mitterrand, who remains noncommittal about a second
term, is trying to profit politically from the conservatives' ambivalence
toward South Africa. For example, he has refused to accept the
credentials of Pretoria's Ambassador-designate until South Africa
makes concessions on a French citizen imprisoned in South Africa for
refusing to testify against ANC activists. Recently Mitterrand's wife
participated in a highly publicized meeting in Senegal between the
ANC and a group of moderate Afrikaners.
Mitterrand supports expanded contacts with Angola and
Mozambique with enthusiasm, probably seeing an opportunity for
France to encourage these states' flirtation with the West and for him
to take the lead from Chirac on policy there. Mitterrand has invited
Angolan President dos Santos to Paris in September, apparently
hoping to counter UNITA leader Savimbi's controversial visit there
last year. The Embassy suggests the energetic new French
Ambassador to Angola may have ties to Mitterrand's Socialist Party.
South Africa is not likely to be a key issue in the French presidential
election expected next spring, but Mitterrand and Chirac will try to
use it in a way that will curry favor with concerned voters and
francophone African leaders-who frequently provide campaign
financing to French candidates. Chirac is not likely to shift
substantially his policy toward Pretoria before the election because a
tougher stance might lose him some conservative votes, while a softer
approach would further alienate centrists.
Mitterrand, for his part, will probably pursue a strategy of moral
posturing on South Africa, as he did before the legislative election last
year. Both leaders will continue to promote contacts with Angola and
Mozambique and urge them to turn westward, but Chirac is unlikely
to abandon discreet contacts with UNITA.
Top Secret
15 24 July 1987
Declassified in Part - Sanitized Copy Approved for Release 2013/04/03: CIA-RDP88T00963R000100200001-6
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/03: CIA-RDP88T00963R000100200001-6
Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2013/04/03 : CIA-RDP88T00963R000100200001-6