NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T01079R000200160026-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 23, 2016
• Document Release Date: October 24, 2012
• Sequence Number: 26
• Publication Date: August 19, 1987
• Content Type: REPORT

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Central
Intelligence
National Intelligence Daily
Wednesday
19 August 1987
CPAS NID 87-193JX
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ugust 1 7
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Top Secret
Contents
South Africa: Strike Deadlocked ............................................:...
Notes
Sri Lanka: Attack Disrupts Parliament ........................................ 5
Iraq-USSR: Relations Strained .................................................... 5
Colombia-US: New Approach to Extradition .............................. 6
South Korea: Major Strike Ends .................................................. 7
OPEC: Overproduction Weakens Oil Prices ................................ 8
Special Analyses
Central America: Postsummit Moves ............................:............. 10
Panama: Opportunity for Dialogue .............................................. 12
UK: Thatcher's Privatization Program ............................:............. 14
Top Secret
19 August- 1987
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Next 4 Page(s) In Document Denied
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Positions on Wages and Benefits
Mining Companies
Wage increase of 15 to
23.5 percent
18 days annual leave.
Death benefits equal to two
years' wages
46- to 48-hour workweek
Wage increase of 30 percent
30 days annual leave
Death benefits equal to five
years' wages
40-hour workweek; no mandatory
overtime
Paid holiday on 16 June
Toa Secret
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2GV~
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South African mineowners and union officials apparently have
made little progress toward a settlement of the 10-day-old strike,
and tensions are increasing between workers and security
~a., l ~
Talks between mineowners and union officials aimed at limiting
strike-related violence broke down yest~ after the union reported
that 15 miners had been injured by police. Union leaders~hav___ e ____ f~~,~
maintained since the beginning of the strike that mineowners have
allowed the South African police to intimidate strikers 25X1
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Companies report some miners are returning to work, but most union
members are still on strike, according to press reports. The strike has
not spread widely to other sectors, although workers at a platinum
refinery struck this weekend over plans to move the plant. In addition,
the management of the state-run nuclear fuel I n abotage,
have locked out union workers.
Comment: Neither side has budged publicly from its initial bargaining
position. The strike has gone on much longer than mineowners
anticipated, however, and they may be reassessing their hardline
position on the wage issue. Union leaders probably are worried that
local union officials will become more tempted to use violence to
enforce the strike as the dispute drags on.
Although the strike at the platinum plant is not directly related to the
miners' strike, the platinum workers probably calculate that action
against minin companies already under pressure may bring
concessions.~erte ?production wn~~~r
Top Secret
4 19 August 1987
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Too Secret
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building early ~'Y.
07~,. !~
Sri Lankan President Jayewardene escaped injury from two
explosions and a shot fired at him during a meeting in the Parliament
RI LANKA: Attack Disrupts Parliament
one member of Pa lia~has~died and at least 14 others were
Minister Athulathmudali. Press reports indicate~6ele~e-~ie~evec~
+he Lam., .~+h.~ \/: w...L+h. D~,..~w.~ ~., ., ...h:.+h : .,.1 +.. +h.,
Indo-Sri Lankan peace accord, was behind the attac
~
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?~-t
t t=bf
i
e
ea
z~er~
ne
~eci#
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Comment: Additional attacks against government officials and ~''O~
installations are likely as Parliament attempts to reconvene~-arro.
Jayewardene probably will move ahead with the current
parliamentary session but will not allow debate on the controversial
peace accord. His assassination or additional attacks against his
senior ministers would most likely cause New Delhi to deploy troops
to Colombo and other areas of the Sinhalese south to restore order
and prevent the emergence of a hardline Sinhalese government. The
attack,yes#~a~r will probably help Jayewardene ease tensions within
h s own party over the accord by rallying support against Sinhalese
radicals.
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Iraq is reacting angrily to a perceived(warming in Soviet relations with
Iran. An editorial in an Iraqi newspape~~r-yes~ter~ajr warned indirectly
that the Soviets risked losing ~~ friends by dragging their heels in
implementing UN Security Council Resolution 598, which calls for an
end to the Gulf war. Similar criticism was voiced Saturda on Ira i
television
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Iraqi newspapers 25X1
~S9!3
are giving the US more frequent favorable comment than the USSR,
according to the US Embassy in Baghdad. 25X1
loin them in workino to halt a Soviet drift toward Tehran.
Iraqis, by making their criticism public, probably hope their allies will
Comment: Baghdad believes the USSR regards Iran as the greater
geopolitical prize and is concerned that Moscow's efforts to increase
Soviet influence in Tehran are at Iraq's expense. Iraqi dependence on
Soviet arms, however, limits Baghdad's ability to punish Moscow. The
Top Secret
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Too Secret
COLOMBIA-US: New Approach to Extradition
President Barco is pessimistic about prospects for the bilateral
extradition treaty and has asked the US to send a team of legal
experts to Colombia next month to help him devise a new way to
handle extradition of major drug traffickers, according to the US
Embassy. Bogota halted extraditions in July after Colombia's
Supreme Court ruled the treaty's ratifying legislation unconstitutional.
Since then, Colombian courts have revoked arrest warrants for
several major traffickers. Barco told the US Ambassador this week
that Colombia's congress is not likely to revalidate the treaty but said
he wants to explore other options with the US team
Comment: Barco's willingness to work with Washington reflects his
deepening concern about the inability of Colombia's judicial system
to prosecute traffickers effectively. Despite growing legislative and
public opposition, he remains firm in his support for some extradition
arrangement
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6 19 August 1987
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- Too Secret
SOUTH KOREA: Major Strike Ends
unrest began five weeks ago.
.~ces#sr~ey after the Vice Minister of Labor proposed a mediation plan.
He promised to help workers win pay raises by 1 September and to
persuade Hyundai's management to recognize a new worker
organization spanning the conglomerate's six main subsidiaries.
Nearly 400 strikes throughout South Korea remain unresolved, but
more than 500 other job actions have been settled since worker
K
Some 20,000 Hyundai workers ended their strike in provincial Ulsan
become violent, the government will consider stronger measures.
Comment: Hyundai is the second largest firm in South Korea, and
Seoul probably viewed the crippling strike there as a test case.
Government officials no doubt hope their formula will establish a
framework for resolving other labor disputes and allow the
government to keep intervention at a minimum. For now, Seoul can
maintain a low profile because the economy is strong-real GNP
growth through June was 15.3 percent-and disputes at many large
firms have been settled. If protests begin to hurt economic growth or
Top Secret
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Top Secret
OPEC Oil Production and World Oil Prices, 1987
World Average Crude Oil Prices
US per barrel
19
18
17
16
15
Jan Feb Mar Apr May Jun Jul
a Iran has not accepted a quota. Overall
quota includes an Iraqi quota of 1.466
million b/d, which other members
assigned to Iraq.
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Top Secret
X
OPEC: Overproduction Weakens Oil Prices
Rising OPEC production has caused spot North Sea oil prices to fall
by $2 a barrel over the past two weeks to near the same levels they
were in June. OPEC crude oil production in July reached about
19.3 million barrels per day-2.7 million b/d over the quota agreed
upon in June. Most of the major producers are currently producing
above their quotas, with Iraq-which refuses to abide by its OPEC
quota-Kuwait and the UAE being the worst offenders. Iraqi
production will rise by about another 25 percent when the additional
pipeline capacity through Turkey is fully operational-probably next
month. Some OPEC members, Iran in particular, have been selling oil
below official prices.
Comment: Barring a major escalation in Gulf hostilities, if price
discounting becomes more widespread or OPEC overproduction
continues into the fall, excess stock building may set the stage for
greater downward pressure on prices later this year.
Tnn Coe~~ef
8 19 August 1987
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broad policy change
Soviets say 12 spouses of US citizens can emigrate after Supreme
Soviet overturned denials for access to state secrets ...other
pending appeals lacking US-Soviet angle will test if precedent is
occurring if agenda differences overcome
Soviet official also denied report, but did not rule out visit still
Vatican officials have retracted report that Pope invited to Ukraine
for 1,000th anniversary of Christianity as misunderstanding .. .
Americas ~ ~ Situation in Haiti normal yesterday following cancellation of
transportation strike ...ruling council, union reached compromise
on gasoline price increase ...settlement ma hel reduce tension,
ease economic disruption
Leading Chilean labor group rallying today on worker-related
issues ...Communists reportedly may demonstrate to provoke
security forces, building toward general strike next month .. .
moderate opposition unlikely to cooperate.
'~~Y~
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Conservative-led government, socialist opposition nearly even in
polls ...slowing economy aids opposition, but short campaign and
Europe
Danish Prime Minister calling for national election 8 September .. .
accomplishments favor incumbents
but such requests likely to be refused. 25X1
to Iranian protests o ear ier visits ... no US port calls scheduled,
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warships, ..probably response ~` 25X1
Pakistan indefinitel ost onin ort call y British, French
Top Secret
9 19 August 1987
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Agenda of Foreign Ministers' Meeting
- Establish Executive Commission comprised of five Central American Foreign Ministers.
- Establish working-level "technical commission" to help set timetables and guidelines for
elements of peace plan, including negotiations on security issues and Central American
parliament.
- Solicit aid of Contadora countries and UN and OAS Secretaries General to participate in
International Verification Commission and establish parameters for its work.
- Formulate joint request for EC economic aid.
- Prepare for meeting with Contadora Foreign Ministers on 22 August and agree on how
and when to get negotiations under way on security issues.
Positions of Central American Democracies on New US Aid to Nicaraguan Insurgents
Costa Rica:. Arias favors suspension of aid until 7 November, when many requirements of
peace accord take effect ...nevertheless, says he would respect any decision
US adopts.
Honduras: Azcona publicly supports continued US aid until 7 November and additional
assistance after that if Nicaragua does not comply with peace commitments .. .
Foreign Minister Lopez has termed immediate approval of contingency funding
"absolutely essential."
Guatemala: Foreign Minister Quinones, who recently resigned, told US officials additional US
aid should be approved immediately and held in escrow as contingency fund to
ensure Sandinista compliance ... Cerezo has not commented but is likely to
adopt a more detached stance.
EI Salvador: .Duarte not supporting aid in wake of peace agreement ...believes doing so
could jeopardize Salvadoran aid requests in US Congress ...wants aid resumed
if Sandinistas do not comply with accord ...most other Salvadoran officials
favor. approval of contingency funds now.
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Special Analysis
CENTRAL Postsummit Moves
AMERICA:
working committees to resolve ambiguities.
for the meeting in San Salvador of the five Central
American Foreign Ministers, who are charged with organizing
Leaders of the four Central American democracies are
convinced that the Guatemala peace accord will either achieve
peace or, if the Sandinistas refuse to implement democratic
reforms, isolate Nicaragua. Although they recognize that many
parts of the agreement are vague, they have no unified strategy
Nicaragua and reduced the influence of the Contadora mediators,
The Presidents of the democracies~believe~they have cornered
Costa Rican President Arias and
Guatemalan President Cerezo are relishing their personal diplomatic
triumphs, and Arias has won his goal of inducing Nicaragua to
withdraw its suit against Costa Rica in the World Court. Salvadoran
President Duarte views the accord as a means of isolating the
Salvadoran rebels diplomatically and of putting pressure on Managua
to follow his initiatives and conduct talks with the Nicaraguan rebels.
Foreign Ministers did not review the hastily drafted text.
Nevertheless, the initial euphoria has faded somewhat with the
realization that much work remains, according to Embassy reports.
Several Foreign Ministry officials say the plan was not intended to
deal with all contingencies and in many respects is only a framework
for further talks. The Presidents met alone at the summit, and the
Separate Strategies
Although all the democracies agree with the need to keep the
pressure on Nicaragua, only EI Salvador has devised an active
strategy. Duarte has challenged the Salvadoran rebels to enter
cease-fire negotiations far in advance of the accord's deadline of
90 days and insists that Nicaragua do the same with its own
insurgents. EI Salvador~has~esfablished a national dialogue
commission in addition to the panel established by the peace
agreement, announced its willingness to permit Nicaraguan
inspections of its territory, and made plans for other unilateral moves,
such as requesting peacekeeping forces to patrol the border.
Duarte's attempts to promote parallel negotiations in EI Salvador and
Nicaragua pose hazards for the anti-Sandinista rebels, who
undoubtedly have misgivings about his demand that they accept the
continued
Top Secret
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Top Secret
peace accord as a prior condition for talks with Managua. Moreover,
San Salvador does not want to demand that Managua halt military
deliveries from the Soviet Bloc because it does not want to undermine
its own case for US aid
In contrast to EI Salvador, Guatemala has undertaken no initiatives
and insists that its rebels must abandon the armed struggle before
talks begin. The accord imposes few burdens on Honduras and Costa
Rica, which have no insurgencies, other than they not allow their
territory to be used for rebel attacks. Honduran President Azcona
says the Nicaraguan guerrillas will have freedom to operate over the
next 90 davs, according to the US Embassv.l
more vigilant in preventing rebel use of its territory
Foreign Ministers Emphasize Procedure
In accordance with the peace agreement, the Foreign Ministers are
meeting as an Executive Committee to negotiate details for
implementation. The accord does not specify the number of working
committees or their internal organization, and Embassy reports
suggest the democracies have given these aspects little thought. A
Salvadoran official says the meeting will focus on procedural matters
rather than clarifying major substantive issues, such as cease-fire
provisions.
The discussion of issues to be covered in arms limitation talks may
prove controversial. Honduran officials have told the US Embassy in
Tegucigalpa that their major concern with the summit agreement is
that it leaves the entire topic unresolved and open-ended. The
Presidents requested Contadora mediation to tackle security issues,
and the Foreign Ministers will travel to Caracas for talks with their
Contadora counterparts on Saturday
Concerns Over US Policies
The democracies say the Guatemala peace agreement satisfies basic
US interests and are anxious that Washington support it, according to
Embassy reports. Duarte and Azcona plan to meet with the
Nicaraguan rebel leadership to explain their policies.
The democracies have different positions on future US aid to the anti-
Sandinistas, ranging from Azcona's open support of contingency
funding to Arias's muted opposition. Managua is almost certain to
bring strong pressure on them to denounce US aid as incompatible
with the agreement, and disagreement over the issue could disrupt
the Foreign Ministers' meeting.
11 19 August 1987
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Chronology of Selected Events in Panama
9-10 June Violent clashes between
demonstrators and security
forces.
11 June State of emergency imposed.
11-16 June General strike.
20 June State of emergency extended.
28 June Opposition marches.
29 June State of emergency lifted.
30 June Proregime rally.
2 July Firebombings.
3 July Antiregime violence.
4-5 July General strike.
8 July Ban on protests.
10 July Opposition rally.
26-27 July Government crackdown.
27-28 July General strike.
31 July Proregime rally.
6 August .Opposition rally.
17 August ? Opposition rally.
17-18
August
Sparked by Chief of Staff Diaz's charges of
Noriega's involvement in electoral fraud,
political murder, and corruption.
80 percent of businesses. comply initially; 200
detained by security forces.
6,000 women call for Noriega's ouster.
5,000 to 10,000 participate in front of US
Embassy, denounce US Senate resolution.
Police stand by during attacks on opposition
businesses.
Clashes involving students and police at
University of Panama result in 100 injured.
Called over weekend; only partial
compliance.
Announced by Delvalle after three days of
peaceful-but growing-opposition
demonstrations.
Broken up by security forces; 300 detained;
businesses, government offices, schools
closed.
Diaz arrested; opposition newspapers closed.
90 percent compliance; first confirmed death
in antigovernment protest in outlying
province.
Draws 50,000 to 75,000 to mark anniversary
of former strongman Torrijos's death;
government workers given time off to attend.
Involves 40,000 to 60,000; lifting of ban on
rally prevents violence.
5,000 to 8,000 participants; leaders blamed
low turnout on presence of security forces.
Mixed compliance; less successful than prior
efforts.
Top Secret
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X
Special Analysis
Opportunity for Dialogue
the regime.
Opposition leaders probably view the disappointing response to
their strike on Monday as a sign the movement is losing its
momentum. Some now may be willing to abandon their demand
that Defense Chief Noriega resign immediately in the interest of
initiating a dialogue while the opposition still has leverage on
strategies to exert pressure on the regime.
specific political agenda, may have difficulty agreeing on new
The National Civil Crusade's call for a fourth general strike to
demonstrate for Noriega's ouster resulted in only a partial shutdown
of Panama City, despite an earlier decision by the opposition to
shorten the strike from 72 hours to 24 hours. A growing segment of
the business community now appears unwilling to endure the
increasing economic sacrifices required for continued strike activity.
Moreover, the regime's recent tough actions, including closing the
opposition press and issuing arrest warrants for opposition leaders,
place the Crusade increasingly on the defensive. US Embassy
reporting suggests the opposition, lacking clear leadership and a
Regime Response
politics.
The government probably will attempt to capitalize on the Crusade's
lack of direction by redoubling its efforts to bring the opposition to
the bargaining table. The regime has said it is anxious to enter into a
dialogue and is willing to meet many opposition demands, including
electoral and judical reforms and a withdrawal of the military from
The regime might also agree to
cancel the arrest warrants on Crusade leaders if the opposition
agreed to reopen the opposition press if the Crusade pledges in
Top Secret
12 ugust 1987
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Top Secret
return to cease publishing "seditious" material. The government has
steadfastly refused, however, to negotiate Noriega's removal before
his planned resignation after the 1989 election.
The government, sensing that a growing moderate faction of the
opposition is willing to negotiate, has ap roached businessmen and
bankers to serve as intermediaries, and 25X1
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Prospects for Dialogue
The outlook for negotiating a resolution of the crisis would improve
considerably if the opposition retreated from its demand that Noriega
resign immediately and if the Defense Chief indicated willingness to
consider stepping down before the election in 1989. If the opposition
refuses to begin talks soon, the regime, sensing opposition
momentum is waning, may raise the ante by setting new
preconditions for a dialogue
Top Secret
13 19 August 1987
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Top Secret
Pro}it Performance of Privatized Companies
Million US $
Company
Year of
Pretax Profit (Loss) to Financial Year Ending
Privatization
1981
1982
1983
1984
1985
1986
British Aerospace
1981
105.9
127.1
123.5
180.3
225.8
260.0
Cable and
Wireless
1981
96.1
133.8
235.1
285.1
367.8
442.5
Amersham
International
1982
6.1
12.7
16.8
20.5
25.8
26.3
National Freight
Consortium
1982
6.5
15.1
17.7
70.3
40.8
55.5
Brit011
1983
655.5 a
771.0
879.0
1,032.0
1,095.0
NA
Associated British
Ports
1983
-15.5
8.3
21.7
-9.6 b
25.8
25.8
Enterprise Oil
1984
48.3 ?
207.7
207.8
166.7
Jaguar
1984
-47.5
14.4
75.0
137.3
181.9
181.2
British Telecom
1985
855.0
1,404.0
1,546.5
1,485.0
2,220.0
2,715.0
British Gas
1986
645.0
1,204.5
1,363.5
1,068.0
1,173.0
British Airways
1987
- 211.5
- 162.0
111.0
277.5
286.5
292.5
a Part of British National OII Company.
b Effects of coal strike.
Eight-month figures only.
Top Secret
19 August 1987
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Top Secret
Special Analysis
Thatcher's Privatization Program
benefits of the program.
Prime Minister Thatcher's drive to return state-owned industries
to the private sector is redressing some of the worst ills
associated with state ownership of British industry. As
privatization has been accompanied by generally favorable
economic performance, few in the UK now challenge Thatcher's
assertion that the economy can grow and provide jobs without
extensive government intervention. At the same time, however,
London's failure to deregulate some privatized industries and
curb market dominance by monopolies may limit the long-term
among services typically provided by the public sector
deficits and taxpayer liability for the losses of state-owned
enterprises. As a complement to privatization, Thatcher has also
introduced plans to deregulate industry and to promote competition
Thatcher has spelled out several specific goals for the program,
including increased competition and efficiency in the denationalized
sector, expanded stock ownership, and reduced government budget
Economic Impact
to 1.5 percent in 1986.
Privatization has greatly reduced the government's role in the British
economy. The government has sold one-third of the state sector's
assets, including all or part of companies involved in aerospace,
chemicals, energy, telecommunications, and transportation. It has
raised more than $17 billion since 1979, and the sale of public
housing to tenants has added another $19 billion in income, helping
reduce the deficit from 4.9 percent of Qross domestic product in 1979
Thatcher's program.
A recent government study found that as a result of government
policies, particularly privatization, stock ownership has tripled since
1979; almost 20 percent of the adult population now own stocks. The
expansion of share ownership will make it more difficult to reverse
So far, however, Thatcher has done little to encourage competition
within the privatized industries, and the nationalized sector continues
to dominate major sectors of the economy such as coal, steel, water,
and electricity. Several firms, including British Telecom and British
Gas, have been sold intact and kept their monopoly status. And
although London has permitted small companies to compete against
monopolies in specialized areas, particularly in telecommunications,
continued
Top Secret
14 19 August 1987
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Top Secret
the failure to deregulate the newly privatized industries and curb
market dominance by monopolies continue to stifle vi orous
competition and reduces the benefits of privatization.
1987 election, as did most first-time homeowners.
without expending new public money. Public opinion polls showed
that a majority of first-time shareowners voted Conservative in the
Thatcher has gained politically from privatization. She has touted her
government's success with initial privatizations and has used funds
from asset sales to cut taxes and increase the Tories' popularity-
Outlook
industries to private ownership
Thatcher has pledged to continue privatization in her third term, but
her current approach is not likely to correct past mistakes. London
will concentrate on privatizing public utilities, including electricity and
water, where the direct economic benefits are doubtful. The
government will also sell its remaining stake in British Petroleum this
summer and the remaining subsidiaries of the National Bus Company.
Thatcher has ruled out for now the sale of the steel and coal
industries, although ultimately she probably intends to return these
privatization program.
regardless of its rhetoric, would have great difficulty reversing the
Whether or not privatization improves British competitiveness,
Thatcher has successfully broken the decades-old public view that an
increasing state sector was both inevitable and in some ways more
appropriate for the UK. Public acceptance of a reduced government
role in industry and an environment of greater opportunity for
entrepreneurs are likely to lead to a stronger emphasis on free
markets in shaping economic policy. Even a future Labor government,
Toy Secret
Declassified in Part -Sanitized Copy Approved for Release 2012/12/26 :CIA-RDP88T01079R000200160026-4
 Declassified in Part -Sanitized Copy Approved for Release 2012/12/26 :CIA-RDP88T01079R000200160026-4
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Top Secret
Declassified in Part -Sanitized Copy Approved for Release 2012/12/26 :CIA-RDP88T01079R000200160026-4