NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T01079R000200030001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 27, 2016
• Document Release Date: November 1, 2012
• Sequence Number: 1
• Publication Date: August 4, 1987
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2013/01/11: CIA-RDP88T01079R000200030003f5?fl
Director Of I up
Central
Intelligence Intelligence
National Intelligence Daily
Tuesday
4 August 1987
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CPAS NID 87-180.Dt
4 August 1987
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Contents
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Iran-Saudi Arabia: Aftermath of Mecca Riots
Western Europe-Middle East: Views on Arms Embargo
3
Notes
Iraq: Cabinet Changes
7
'USSR-South Korea: Talks on Olympics
Mozambique-USSR: Chissano Visit
9
Paraguay: Split in Ruling Party
10
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In Brief
12
Special Analyses
Panama: Banking Sector Under Pressure
Colombia: Insurgent Challenge Growing
13
14
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Top Secret
IRAN- Aftermath of Mecca Riots
SAUDI ARABIA:
Tehran continues to threaten the US and Saudi Arabia over the
Mecca riots.
Several pro-Iranian factions, including the
terrorists holding US hostages in Lebanon, have threatened reprisals
against US and Saudi interests. A bomb was thrown Sunday into the
deserted Saudi Embassy in Beirut, and bomb threats were
telephoned to the US and Saudi Embassies in Kuwait.
A speech yesterday attributed to Ayatollah Khomeini reiterated that
Iran intends to take revenge on Saudi Arabia and the US for the
deaths of the Iranian pilgrims. Iranian President Khamenei said Iran
will retaliate "in the Gulf." Tehran claims the Saudi police opened fire
on Iranian pilgrims, killing more than 600 and injuring 4,500, and
Ayatollah Montazeri has appealed to Muslims throughout the world to
free Islam's holy shrine from Saudi rule.
The Saudi Ministry of Interior has issued a strong warning to Tehran
that it will not tolerate behavior that endangers the security of holy
places and has banned demonstrations by Iranian pilgrims, according
to the US Embassy in Riyadh. Saudi television has shown scenes of
Iranian pilgrims attacking Saudi security personnel and is airing a
special report on attempts Iran made during the pilgrimage last year
to smuggle explosives into the Kingdom.
Persian Gulf states that have significant Shia populations have
responded in a low key to the riots. In addition to lodging a strong
protest with Tehran over the ransacking of its Embassy on Saturday,
Kuwait is considering what steps to take against the 42 Iranian
diplomats now in Kuwait, according to US Embassy reporting.
Bahrain, whose population is 70-percent Shia Muslim, is concerned
that the incident will inflame sectarian tensions. Most moderate Arab
leaders, while expressing concern over the violence, are supportive of
the Saudi action, and Egypt has called for an urgent Islamic summit
meeting. There has been no trouble among the Shia minority in Saudi
Arabia's Eastern Province.
continued
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Comment: Iran has a broad range of violent options, including
attacks on Saudi or US-associated shipping in the Gulf and calling on
pro-Iranian groups in the Gulf states or elsewhere to strike US or
Saudi facilities and personnel. The Iranian leadership probably hopes
to trigger anti-US protests in countries with large Shia populations.
Iranian condemnations of the US following the takeover in 1979 of
Mecca's Grand Mosque by Sunni fundamentalists helped provoke an
anti-US demonstration in Islamabad that led to the storming of the US
Embassy there.
Riyadh probably would like to avoid a further worsening of relations
with Tehran but does not want to appear to be weakening in
the face of Iranian threats. Tehran is likely to encourage further
confrontations, in the belief that pressure on Riyadh will persuade the
Saudis to reduce their support for the US presence in the Gulf.
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4 4 August 1987
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Top Secret
WESTERN EUROPE- Views on Arms Embargo
MIDDLE EAST:
West European members of the UN Security Council are
reluctant to support a possible arms embargo against Iran and
may try to limit or delay a resolution calling for an embargo.
British Prime Minister Thatcher will support an embargo, according to
press reports, but the UK wants an embargo to apply solely to
weapons actually being used in the war. The British have told US
officials that they would consider their recent sale of radars?to be
deployed on the Soviet-Iranian border?as exempt from an arms
embargo.
The French appear more willing to consider an arms embargo since
breaking ties to Tehran.
Comment: The West Europeans probably view the continued UN
negotiations as a means of deterring the US from military moves
against Iran, and they may be counting on the USSR and China to
scuttle the UN proposal. However, if the other Security Council
members support an embargo, the West Europeans are unlikely to
stand in the way, although they may try to delay or limit it. France,
West Germany, and Italy may try to delay implementation beyond the
30 to 45 days envisaged for acceptance of a cease-fire resolution.
London and Paris almost certainly will insist on limiting the scope of
any embargo.
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5 4 August 1987
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IRAQ: Cabinet Changes
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Iraqi President Saddam Husayn's removal of two longtime Shia A
government ministers apparently tightens his grip on policy. On cA
-ettfpefer, Saddam relieved Interior Minister Shakir and Trade Minister
Ali of their ministerial posts but not their positions in the ruling Ba`th
Party or on the Revolutionary Command Council. Both men were
commonly thought to hold their posts because of loyalty to Saddam
rather than competence. In other changes, First Deputy Foreign
Minister Ramadan has recently lost some of his control over
economic affairs and Husayn Kamil Ali Majid, Saddam's son-in-law,
448-Efftbess,2
has been made Actinginister of Heavy Industries,&eer-elifig-te-the-
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(
Comment: The changes will further centralize the President's power
and reduce the party's influence in economic and security matters.
Shakir had been losing influence on internal security issues to
relatives of Saddam's from their hometown of Tikrit. Ali's departure
probably is part of Saddam's drive to bring more technically
competent officials into the government to implement recently
announced economic reforms. 25X1
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7 4 August 1987
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USSR-SOUTH KOREA: Talks on Olympics
A nine-man Soviet delegation visited South Korea last week for
in-depth talks on arrangements for the 1988 Olympics and to inspect
sports facilities in Seoul, The main
topics covered were the logistics of getting the Soviet team, its
support staff, and other officials to Seoul and security arrangements
for their stay. The Soviets also raised the possibility of assigning an
attache to Seoul before the Olympics, an idea their hosts agreed to
support, and said Moscow probably would agree to send a cultural
troupe to Seoul during the games. The South Koreans reportedly
interpret the talks as further evidence that the Soviets will attend the
Seoul games.
Comment: The Soviets probably do indeed plan to attend. They
continue to support North Korea's attempt to host a larger shard of
the 1988 Olympic games than they have gained to date, but their
recent media coverage has suggested a growing impatience with that
effort. The proposal to assign an attache to Seoul is apparently the
first time the Soviets have shown an interest in establishing an
official presence there, and it suggests that they hope to use their
participation in the Olympics to ex and contacts with Seoul.
MOZAMBIQUE-USSR: Chissano Visit
Mozambican President Chissano's visit to the USSR, which concludes
br74.- 741,i T.4444Fsday-, appears intended to mollify Moscow while Maputo looks to
6 the West for economic and military support
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Ivia?Llits?:?jare strained because Chissano, who took office in November,
is !odd-rig to the West in search of aid.End-trayeFed-to-ttie-titi-alitlitely-
laefeFe-ahreemnitinist-ateR Maputo has criticized the quality of
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Seviete-efe4ispleased-wittutlae.smal449ut-growing.Britisti.influenGeAra
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Comment: Moscow and Maputo are already publicly characterizing
the visit as a success, but there will be some tough talking privately.
Moscow is unlikely to offer to increase its military assistance
substantially, because it believes the Mozambican military cannot
absorb any more. The Soviets nonetheless would like Maputo to
gAr-tail-ita-buddifig-seetoity-Eslatiertship-with-L-eheleft-ahtl-tj be
agreeable to-Soviet requests.forextended air and naval access to
Mozambique. glitssafte-is-likely-to-Fefuse.bot4.4q4.143VM ?scow
probably will agree to reschedule Mozambique's considerable debt to
the USSR along lines similar to Maputo's recent agreement with
Western donors.Woscow.also-mav?o7r-additional-token-economic?.
,aid-or?loarisrj
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9 4 August 1987
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Top Secret
PARAGUAY: Split in Ruling Party
Paraguayan President Stroessner won a Pyrrhic victory at the
convention over the weekend of his fractured and weakened
Colorado Party. The pro-Stroessner Militant faction seized control of
the convention when the Traditionalist grouping?which favors
limited political reform?walked out after claiming that the police
were blocking some members from entering the meeting. The press
reports that the Militants may soon purge Traditionalists from the
Foreign Ministry and the military and speculates that Stroessner may
now clamp down further on the political opposition and begin to
groom his son Gustavo for the presidency. Opposition parties have
denounced the gangster-like tactics used at the convention and have
proposed that the Colorado Traditionalists join with them to confront
the ruling party.
Comment: The split weakens the regime's legitimacy and does not
augur well for a smooth transfer of power. It leaves Colorado
Traditionalists?who have considerable popular support?with little
influence in the government and will disturb the military, much of
whose leadership dislikes the Militant faction and would oppose the
younger Stroessner's assumption of power. More violence?probably
including human rights violations?is likely as Stroessner moves to
reassert his control.
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4 August 1987
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Ten Sperpt
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In Brief
Americas
Europe
South Asia
Africa
Middle East
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Jamaican opposition leader Manley dropping call for immediate
election, . may need time to
recover from surgery in April ... early election unlikely unless
Prime Minister Seaga anticipates victory.
Press reports Brazil's two largest rival labor organizations calling
general strike for 20 August ... demanding increased wages,
salary adjustments tied fully to inflation ... government may offer
small concessions to avoid derailing economic plan.
(A4211'6
Poland's civil airline wants to lease Western airliners, &serntst
149-Erfelyassi... discovered serious problems with its Soviet jets
after recent crash ... interest growing in buying Boeing or Airbus
though Moscow will object.
Greek Foreign Minister to begin procedural talks for base
negotiations with US Ambassador on 4 September... prelude to
substantive discussions, which are likely to be difficult ... Athens
planning to raise Cyprus issue, Aegean dispute.
rkejatictley
China delivered large fleet oiler to Pakistan last weekend ...
first foreign sale of 20,000-ton supply ship used to support
long-distance naval operations... Pakistan's Defense Minister
attended transfer ceremony in China.
South African mineworkers' union calling nationwide strike to
begin Sunday. ... could be largest since union founded in 1982 ...
prolonged disruption of gold, coal industries would provoke harsh
response from Pretoria ... settlement still possible.
Zaire expelled three Soviet Embassy personnel last week for
spying ... follows recent Soviet visits aimed at improving relations
... incident suggests diplomatic efforts not likely to be productive.
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Ton Secret
12 4 August 1987
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Special Analysis
PANAMA:
Banking Sector Under Pressure
The announcement last week of a long-planned withdrawal by the
largest US-owned commercial bank in Panama comes at a
crucial time for the regime. Increasing unemployment and
liquidity problems at Panamanian-owned banks probably are the
most serious economic problems facing the government.
Although some international banks may withdraw if political
turmoil continues, such action by itself probably would not
cripple the economy.
The regime is concerned that the US bank's withdrawal will give new
impetus to opposition efforts to force the ouster of General Noriega.
Panamanian banks have stopped local lending and delayed payments
to some government creditors because of accelerating capital flight.
Strict bank secrecy laws and a lack of capital controls will make it
difficult for the government to monitor or control financial flows. The
increasing illiquidity of Panamanian banks could affect the
government's ability to meet its payroll or make interest payments on
its commercial bank debt. The National Bank of Panama, equivalent
to a central bank, though hard hit by the crisis, remains reasonably
solvent,
In strictly economic terms, the pullout of additional international
banks probably would have only a limited impact on the economy if
major Panamanian banks regained strength, although capital flight
would accelerate and public confidence in the regime would erode
further. Moreover, the regime probably could withstand a gradual
decrease in financial-sector operations because other components of
the service economy?the canal, oil pipeline, and free trade zone?
would be largely unaffected.
The loss of some jobs in the financial sector?which employs roughly
1 percent of the labor force?would add to urban unemployment.
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13 4 August 1987
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Special Analysis
COLOMBIA:
Insurgent Challenge Growing
The Revolutionary Armed Forces of Colombia?FARC?the
country's largest rebel group, over the past six months has
begun to forge stronger political and operational alliances with
Colombia's other major insurgent organizations and to broaden
international support. This effort is aimed at achieving
leadership over a united insurgent movement and gaining local
political power for the first time in the mayoral election next
spring. President Barco, who is trying to strengthen
counterinsurgency capabilities, has not addressed the rebels'
growing political activism.
Despite continued clashes with the military, FARC leaders are
focusing on building closer political and military ties to the National
Guerrilla Coordinator, a loose alliance comprising the National
Liberation Army, M-19, and the People's Liberation Army. FARC
probably sees closer coordination as a means of imposing its
strategic priorities on the smaller groups. The National Liberation
Army, for example, has recently avoided its favorite target?the
nation's major oil pipeline?perhaps because of government
countermeasures, and twice last month ambushed military units with
tactics used by FARC in a brutal attack in June.
Rebel Political Initiatives
FARC and the National Guerrilla Coordinator have jointly organized
mass strikes this year, according to the US Embassy
They achieved an unprecedented degree of coordination
in June during demonstrations in northern Colombia that lasted
for three days, and the two groups reportedly plan more strikes
beginning this month. The rebels have shrewdly exploited government
civic action efforts, organizing local protests where development
work is planned and then taking credit for successful projects.
The insurgents are increasingly focusing on Colombia's first mayoral
election, scheduled for March. FARC leaders recently have avoided
major battles with government forces in an effort to protect the legal
status of their political front, the Patriotic Union. The US Embassy
estimates that the party could win political control of as many as
80 towns in regions where FARC is active. The People's Liberation
Army, which signed an accord with FARC in April, recently formed'a
similar front group.
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4 August 1987
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Rebel leaders are likely to
accelerate local political lobbying, often relying on armed
intimidation, as the election nears.
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The Patriotic Union is spearheading a campaign by all four major
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rights abuses by the military, The 25X1
Colombian Communist Party, FARC's parent group, reportedly is
soliciting aid for the campaign from other leftist groups in Latin
America and Europe. Patriotic Union leaders, in an effort to gain
overseas credibility, have made public appearances in both Paris and
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Outlook
FARC's aggressive effort to take advantage of the political protection
afforded by the fraying three-year-old truce with the government
places President Barco in an awkward position. He recognizes that he
would incur political damage if he moved to halt this exploitation by
breaking the truce himself. He also needs to prolong the truce,
despite the widening hostilities, to gain time to develop a more
effective national security strategy, as evidenced by his request to the
US to arrange a recent top-level seminar on insurgency.
Barco has accelerated efforts to improve Colombia's limited
counterinsurgency capabilities. Following the bloody attack by FARC
in June, he approved a $213 million supplemental defense
appropriation for 1987, of which $64 million has been funded,
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be slowed, however, by chronic deficiencies in mobility, manpower,
and training within the security forces.
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Barco is also aware that rebel politicians are gaining support in rural
areas, but he has made no systematic attempt to counter their
political program. Bogota has traditionally paid little attention to
grassroots politics, and its political, military, and economic initiatives
have never been well coordinated. The country's diplomatic service is
ill equipped to counter FARC's overseas propaganda. The traditional
parties already lag behind the guerrillas in preparations for the
election, and this gap is likely to widen in the coming months, placing
increasing political pressure on the Barco government and probably
leading to more violence.
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