NATIONAL INTELLIGENCE DAILY WEDNESDAY 16 SEPTEMBER 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T01079R000300140006-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 24
• Document Creation Date: December 23, 2016
• Document Release Date: September 26, 2013
• Sequence Number: 6
• Publication Date: September 16, 1987
• Content Type: REPORT

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za.? t I V V II
Intelligence
National Intelligence Daily
Wednesday
16 September 1987
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T?Seccet
CPAS NID 87-216JX
16 September 1987
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Contents
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Persian Gulf: Situation Report
Sri Lanka-India: Tamil Strife Taxes Indian Force
Haiti: Electoral Progress Slow
Hungary: National Assembly To Debate Austerity Program
Nigeria: First Steps Toward Civilian Rule
Notes
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Lebanon-Palestinians: Talks To End Camps War
Colombia-Panama: Countering Drug Money Laundering
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North Korea-South Korea: Talks on Olympics Proposed
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In Brief
10
Special Analyses
Latin America: Urging New Debt Solutions
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PERSIAN GULF: Situation Report
Algerian Foreign
Minister Arrives
in Tehran
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According to the Iranian press, Algerian Foreign Minister Taleb
lbrahimi arrived in Tehrarryeeter-eiey to discuss bilateral issues and
the current session of the UN General Assembly. The Foreign Minister
will also visit Baghdad.
Comment: The Algerian Foreign Minister is likely to probe for signs of
Iranian flexibility on negotiating an end to the war. An Algerian
mediation effort in 1982 ended when Iraq shot down the Algerian
Foreign Minister's plane, killing all aboard.
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I LP OVUM'
SRI LANKA-INDIA: Tamils Strife Taxes Indian Force
India is planning stiffer military force to curb factional fighting
among Sri Lankan Tamil militants who are challenging the
implementation of the July peace ccord.
The Liberation Tigers of Tamil Eelam are'intensifying their efforts to
undermine the accord by defying Ind'an troops and Sri Lankan
authorities. The Tigers organized a large demonstration in the north
to protest India's alleged failure to protect them from attacks by rival
Tamil insurgents.
More than 150 people have died in the recent fighti7,
according to?Tress reports.
of it/ Se.p-fr
New Delhi is considering additional military efforts to force the Tamils
to cease their violence. Indian Prime Minister Gandhi met with his
senior minister 4y to discuss the fi htin ,`accordin to the
US-Embassy in New Delh
The Indian Army already has conducted cordon-and-search
operations in the east to disarm Tamil militants. accordina to the
Embassy in Colombo.
Comment: Jayewardene is concerned that the continued violence will
bolster the influence of Sinhalese opposition leaders against the
accord. India will probably try to prevent Indian troops from becoming
too mired in the Tamil fighting. An expanded Indian naval blockade
and aircraft overflights would be intended to signal Tiger leaders that
Indian patience is wearing thin. If these moves did not end the
clashes, the Indians would probably rely on their troop buildup to
expand cordon-and-search operations, ultimately the surest way to
enforce the accord among the still-armed Tamil groups. Such direct
military involvement would increase the chances of a protracted
Indian occupation of parts of Sri Lanka.
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HAITI: Officially Recognized Political Parties
Party
Leader Orientation
Haitian Christian Democratic Party (PDCH) Reverend Sylvio
Claude
Center left
Movement for the Organization of the Country Gerard-Philippe Center left; populist
(MOP) Auguste
National Agricultural and Industrial Party (PAIN) Louis Dejoie Centrist
Assembly of National Progressive Democrats Leslie Manigat Centrist
(RDNP)
Democratic Movement for the Liberation of
Haiti (MODELH)/Democratic Revolutionary
Party (PRDH)
Francois Latortue Centrist
Movement for the Installation of Democracy in Marc Bazin Centrist
Haiti (MIDH)
National Party for the Defense of Workers Reverend Dumas Centrist
(PNDT) Arnold
Haitian Social Christian Party (PSCH)
Gregoire Eugene Centrist
Mobilization for National Development (MDN) Hubert
DeRonceray
Centrist
National Party of Work (PNT) Thomas Desulme Center right; populist
National Union of Democratic Forces (UNFD) Lamartiniere Rightist; Duvalierist
Honorat
Union for Haitian Renewal (URH)
Edouard
Francisque
Far right; Duvalierist
Alliance for the Renaissance of Haiti (ARA) Alex Dominique Unknown
Party of Haitian Patriots (P PH)
Francois Magloire Unknown
National Union of Haitian Democrats (UNDH)
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Jean Theagene Unknown
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I QMACI
HAITI: Electoral Progress Slow
Haiti's independent electoral commission is proceeding slowly
with preparations for the presidential election on 29 November,
but the tense political atmosphere continues to impede the
campaign.
The ruling council has provided $6 million to finance the commission's
activities and has legally recognized at least 15 political parties,
allowing them to field presidential candidates, according to the
US Embassy. Nevertheless, electoral commission members remain
dubious of the council's commitment to democracy and have said
they will not begin extensive organizing throughout the country until
the council guarantees the safety of election workers and candidates.
The Embassy says leading moderate presidential contenders are
concerned about their safety because of the murder of a centrist
leader last month by peasants.
Several dissidents who participated in earlier antigovernment
demonstrations have been murdered in the capital in recent weeks
Colonel Jean-Claude Paul, commander of the elite Dessallines
Battalion, is responsible for some of the recent killings.
Paul has formed a private 50-member security
force, largely from loyal troops and former militiamen. Although the
council has been under public and foreign diplomatic pressure to
replace Paul, council member Regala reportedly has ruled out his
removal
Despite widespread public doubts about the council's political
intentions President Namphy and
Regala remain committed to holding the election.
Comment: Even if election preparations are completed on time, the
candidates' hesitant campaigning could lead to a low voter turnout
that would undercut the election's legitimacy
Namphy and Regala probably are reluctant to discipline or remove
Paul because such a move would ieopardize the council's critical
military support.
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HUNGARY: National Assembly To Debate Austerity Program
MI6
Debate on the government's proposed tax reform and austerity
program, which begins in the National Assembly today, is likely
to be acrimonious and might result in a sizable number of
opposing votes
Ereetlier-fittrivarrerraffretaNTas-tutS-erntrasyy4146t the National
Assemblis unlikely to take the unprecedented step of voting down
the Council of Ministers' program, but it may weaken measures
intended to improve the balance of payments, to restructure industry,
and to further economic reform.)The leadership has already decided
to move more cautiously in/educing subsidies in order to limit
bankruptcies where highrtrnemployment could arise,
Despite the regime's consultation with many interest groups, broad
opposition to the pacTiRcontinues to build,EfterefirtesitrErritessy
Feper4itg Public trust in the government is waning, and the trade
unions fear unrest if price increases and a new personal income tax
squeeze living standards further.
Prime Minister Grosz, in a frank interview designed to win support for
the program and restore regime credibility, warned that there are no
better alternatives and that temporary hardships must be accepted.
He blamed current economic problems on the leadership and hinted
at calling an extraordinary party congress before 1990. Maior
personnel chanqes are ,slated for later in the fall
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Comment: The National Assembly usually registers pro forma
approval of party programs, but the deteriorating economic situation 25X1
has provoked its members to express dissent more openly. While the
regime may welcome debate as a demonstration of its receptiveness
to society's concerns, dilution of its program might severely hamper
efforts to revive the economy and reassure creditors, tarnishing
Grosz's image as a strong leader. Rumors of personnel changes
following the session indicate Grosz will try to push ahead with the
program, despite the risk to the already fragile social consensus.
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NIGERIA: First Steps Toward Civilian Rule
Nigeria's military rulers are taking the first steps toward
returning to civilian leadership, but the transition does not
appear to be engendering much enthusiasm among a population
discouraged by the failure of an ambitious economic reform
program to show tangible results.
Guidelines for nonpartisan local elections scheduled for early
December?have yet to be announced, but voter registration will
begin next month. Former politicians have already begun jockeying
for power despite a ban on political activity,Escoar-diag-tcmtlaia-leAS
Zaspiaosegatte-Errrbassreelstrrepe4e414eilhe committee appointed to
review the 1979 constitution !have six Months to complete its
work; it apparently is barred from addressing contentious issues such
as the establishment of Islamic courts,
Comment: President Babangida probably hopes that by retaining the
ban on political activities for as long as possible and by limiting the
range of acceptable constitutional changes he can avoid focusing on
the sharp ethnic, regional, and religious differences that have created
instability in the past. The regime will be hard pressed to keep
tensions in check, however, as the pace of political activity quickens.
The transition begins at a time of heightened tensions between
Christians and Muslims, and Eaaabaeey?oeporgmany Nigerians
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..1;4443jefie&s-coTrtintrITITUMTUrrilt"prob
process. The military itself is unhappy about s
has shown little enthusiasm for retumai, ? civilian rule,
small
businessmen are:cofffilaining because rising interest rates are
threatenlLig-ttfC businesses. Government plans to reduce petroleum,
tra scet, and power subsidies will increase dissatisfaction with the
' 'tuationf
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LEBANON-PALESTINIANS: Talks To End Camps War
Recent talks between Palestinians in southern Lebanon allied with
Yasir Arafat and the pro-Syrian Amal militia are allowing both sides a
respite, but major fighting probably will resume shortly. The recent
negotiations, aimed at ending the nearly three-year-old struggle for
control of the Palestinian refugee camps, produced a shaky cease-fire
that was broken onaaday when Amal militiamen fired on the camps
in Beirut and Sidon. geeereling4o-the-US-ErrthessE Ames original
demand that the Palestinians reduce their armed presence in the
south and withdraw to the camps was not seriously addressed. The
Palestinians had demanded that Amal lift the nine-month-old siege of
the camps in Beirut and Tyre and that they be allowed to rebuild the
camps.
Comment: Deep animosities between Arafat and Syrian surrogates
remain serious obstacles to an agreement on the role of the
Palestinians in Lebanon. Syria is preoccupied with more pressing
regional and internal issues and may view the cease-fire as a way to
deemphasize the conflict with Arafat. Arafat may see the talks as an
opportunity to ameliorate dissatisfaction with his leadership among
some of his lieutenants in Lebanon
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Colombia-Panama:
Surplus US Currency Returned to the Federal Reserve a
Million US $
Panama
Colombia
L I
100
80
60
40
20
0 1985b 1986b 1987b
a Monthly Average.
b January through July.
314201 9-87
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I till
COLOMBIA-PANAMA: Countering Countering Drug Money Laundering
Colombia's Council of Ministers is considering legislation to
discourage the laundering of drug money through Colombian banks.
According to press reporting, the proposal was triggered by a surge
in capital flows to Colombian banks this year brought about by the
current political crisis in Panama, a major money-laundering center.
The law would obligate Colombian financial institutions to report
deposits of more than $200,000 and withdrawals in excess of
$2,000. A depositor's inability to explain satisfactorily the legitimacy
of his funds would subject him to arrest and trial.
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Comment: US bank data indicate that US currency returns from
Colombia have surged, offsetting sharply lower returns from Panama.
The shift is a strong indication of money laundering as well as of
capital flight. The proposed law demonstrates Bogota's attempt to
control drugs, but the government lacks a significant enforcement
capability. Moreover, the proposed deposit reporting requirement is
too high to pose more than an inconvenience to traffickers. There is
no prescribed punishment for banks that fail to report or knowingly
accept illicit funds, and an asset forfeiture provision is lacking.
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NORTH KOREA-SOUTH KOREA: Talks on Olympics Proposed
P'yongyang yesterday called for talks with Seoul to break the
deadlock over cohosting of the Olympics. A South Korean Olympic
official responded publicly that the South is willing to discuss the
matter with the North after consulting with the International Olympic
Committee. Seoul's first reaction, however;
,was to reject the talks proposal and demand
that P'yongyang accept(the share of aames offered by the IOC in July?
Deeer-elifig-4e4lae-146-Soloset0
Comment: The games open in a year, and time is running out for an
agreement. P'yongyang's offer may be part of a renewed effort to win
international support for its demand for equal status. The North has
gained little in the existing talks forum, and P'yongyang almost
certainly is disappointed by its failure to win concessions on
cohosting before invitations are issued tomorrow. It may test
prospects for a renewed Olympic boycott campaign at a conference
of Communist sports ministers next week in the USSR. Although the
South's official response underscores its desire to be seen as flexible.
Seoul's preference for a hardline approach suaaests any talks will
face major obstacles
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In Brief
Middle East
Americas
Africa
? USSR yesterday said two Soviet advisers missing in southern
Libya ... earlier reports indicate Chad captured Eastern Bloc
personnel in raid on Malan as Sarra airfield ... unusual public
move supplements diplomatic efforts for release.
Lebanon's economy helping Libyan effort to recruit Lebanese
mercenaries.., I says about 150 Druze signed up
for $2,000 monthly salary, enormous sum by Lebanese standards
... recruiting continues among Lebanese Shia.
Jordanian Prime Minister Rifai claims agreement reached on
technical specifications for MIG-29 purchase from Soviets,
according to financino remains
only obstacle, but Rifai confident will be resolved.
Israel, Hungary agreed yesterday to establish lim'ted diplomatic
relations ... after Poland, second East European state to establish
Interests Section in Tel Aviv in past year... Israelis hoping for
similar agreements with Bulgaria, Yugoslavia.
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? Frontline States to hold summit in Tanzania later this week,
according to press... probably will formulate common strategy
for UN General Assembly discussions on Namibia, discuss
Commonwealth meeting next month in Vancouver.
continued
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East Asia
Europe
Press indicates Vietnam freed some 500 civilian, military officials
of former South Vietnamese Government ... claims more than
6,500 freed under amnesty announced this month ... suggests
more responsive approach to t;IShumanitarian concerns.
- Former South Korean Prime Minister and Security Chief Kim
Chong Pil to announce presidential candidacy later this month...
ruling camp apparently failed to deter bid ... would lessen votes
for ruling-party nominee Roh Tae Woo
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- Norway's rightwing Progress Party gained against ruling Labor
and Conservatives in nationwide municipal elections Monday ...
mainstream parties probably will retreat to traditional platforms to
regain support ... national election set for fall 1989.
- Defense Minister von Eekelen told press yesterday Netherlands
might halt INF preparations when US-Soviet arms control
agreement signed ... probably not official position ... publi
pressure to cease preparations likely before US ratification.
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- Poland's Jaruzelski visiting East Germany today. ... first Bloc
leader to see Honecker since his West German trip.., likely to
stress permanence of Germany's division, Poland's western
border... Poles uneasy over inter-German relations.
- Leader of UK Campaign for Nuclear Disarmament will join Liberals
... embarrassment for Liberal leader Steel, who must contend
with powerful disarmament wing ... complicates merger with
Social Democrats, who are committed to nuclear defense.
- Romanian President Ceausescu replaced three Deputy Prime
Ministers, reorganized several ministries.., reflects concern with
poor economic performance... not likely to im rove econom
weakened by energy, raw materials shortages
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Special Analysis
LATIN AMERICA: Urging New Debt Solutions
Key Latin American debtor nations increasingly are denouncing
efforts by creditors to resolve the region's debt problems and are
calling for new approaches, particularly to ease interest
payment burdens. They hope collective action will strengthen
their leverage in seeking major concessions.
Several of the large debtors, reacting to growing domestic political
pressures and persistent economic difficulties, have criticized debt
renegotiation procedures as time consuming and of only short-term
usefulness. The major Latin debtors instead are stressing the need for
innovative solutions that will make debt servicing manageable over
the long term.
Brazil has been the most strident in pushing for new strategies. In
meetings with creditors early this month, Finance Minister Bresser
called for a mechanism to convert half of Brazil's $70 billion
commercial bank debt to discounted bonds. Although Bresser
moderated his proposal following strong negative reactions from
creditors, Brazil continues to insist on some form of substantial relief
from interest payments.
cetrimental effect of the debt-service budenorrttT?Womy and maressed-frustratiorrove
wants a new longe,,r_Ism.sokilion'ttlilie?debt issue, according to the
US Embassy-in-Btienos Aires. In particular, he advocates lowering
ayments4o.24o-4-perce7
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Mexican President de la Madrid, although satisfied for now with the
financial accord reached with the banks early this year, has asserted
that creditors must take .reater responsibility for achieving a lasting
debt resolution.
Factors Influencing Debtors
A combination of pressures and opportunities are prompting the
major debtors to intensify their push for a new strategy at this time.
Economic forecasts indicate that slow growth and rising interest rates
in industrial countries may aggravate already weak payments
positions among debtor nations. Political gains by proponents of
continued
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hardline debt policies?like the Peronist victories recently in
Argentina?are exerting increasing influence on moderate
policymakers. Latin debtors see an unprecedented opportunity to win
major concessions in view of the commercial banks' enlarged
loan-loss reserves and the heightened sympathy apparent among
creditor governments.
Delegates of the Cartagena Group of debtors agreed late last month
to recommend to their 11 member governments that the Group
become more active in devising approaches to the debt problem,
according to the Embassy in Montevideo. A key proposal reportedly
under consideration is to tie debt-service payments to banks to the
lower values of the debts in the secondary markets.
Brazil's Bresser said he intends to meet with his Mexican and
Argentine counterparts in New York on 24 September to discuss new
approaches to debt before the annual joint IMF-World Bank
meetings. The debt problem probably will be the major issue that
Latin American governments raise, both in formal and informal
sessions, at the IMF-World Bank meetings
Implications
The international banking community will staunchly oppose radical
Brazil-style proposals because they would decimate the gains
achieved in tough negotiations with Mexico and Argentina, would
weaken the link between domestic policy performance and external
assistance, and might threaten the solvency of major US banks. On
the other hand, the continued inability of Latin governments to obtain
sufficient new financing and debt relief to meet development needs
will increase the likelihood that populist politicians will replace more
moderate leaders. Such shifts already are binning to occur in
Argentina, Ecuador, and Venezuela.
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