NATIONAL INTELLIGENCE DAILY WEDNESDAY 23 SEPTEMBER 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T01079R000300200006-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 21
• Document Creation Date: December 23, 2016
• Document Release Date: November 13, 2012
• Sequence Number: 6
• Publication Date: September 23, 1987
• Content Type: REPORT

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U4? Ift.et, Central
Intelligence
. RI A Intelligence
National Intelligence Daily
Wednesday
23 September 1987
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CPAC Nin R7-222.IX
23 September 1987
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Contents
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Persian Gulf: Situation Report
1
Nicaragua: Cease-Fire Announced
3
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Notes
Panama: Delvalle Considers Resigning
5
Brazil: Controversy Over Draft Constitution
5
Cuba: Paris Club Creditors Meet
6
Peru: Unresponsive Oil Policy
6
Colombia: Leftists Protest Political Murders
7
USSR: Personnel Reduction in Military Staffs
7
Sri Lanka-India: Tigers Reassessing Strategy
8
Philippines-ASEAN: Summit Venue in Question
8
Ethiopia: New Autonomous Regions Established
9
Somalia: Backpedaling on IMF Reforms
9
In Brief
10
Special Analyses
USSR: Politburo Polemics Intensify
11
Tetn qarriat
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PERSIAN GULF: Situation Report
Iranian Reaction
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Since the Iran Ajr was hit, Iranian leaders have continued to portray
themselves as undeterred by the prospect of conflict with the US or
international isolation. President Khamenei, speaking at the UN,
stressed the success of Iran's Islamic revolution despite opposition
from the US and the UN's allegedly weak response to Iraq's invasion
in 1980. Khamenei and Assembly Speaker Rafsanjani have both
publicly threatened retaliation against the US for the attack and
warned implicitly that US interests outside the Gulf are at risk, a point
repeated in a Tehran Radio commentary.
Comment: The Iranians' uncompromising rhetoric and their virtual
abandonment of any hint of flexibility on accepting UN Resolution 598
suggests an increased willingness to risk UN sanctions. The emotions
that are sure to be aroused in Iran over the deaths of Iranians by US
fire increase Iran's incentive to strike at US interests. Iranian leaders
probably believe they must act soon or lose credibility.
Gulf States' fftetats-have-erpresseefretfengramrstrakaffitite
Reactions S attack on the Iranian minelaybcksiaiwAllccoring to US
Embassy repoLtiag, he
Kuwailis,wereiReased to see the US actively back up its commitment
- -4-**-44/441-4eetasti'llaring4in
continued
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Soviet and Iranian
Foreign Ministers
Meet at UN
Comment: e-eatrelii-Azabia.and.the.UniladArabaniratestahave
Retietcreaeted.to.thezinside eirial+fete.fespense4s4ikeir4olte
farforatitergiveirRiya ..v,urre UtoughT-rtrattelbWard'Tehrawayttiqhe
LtAesmeretTeerili rr's-fT eritlfffiffiby0-fitsleriitotialm
Oman, whic refers to av d confrontation with. Tejai'ris likely to
,
refrain frt publicly sup orting the US attack, eying that th
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TASS characterized as "frank" talks between Soviet Foreign Minister
Shevardnadze and Iranian Foreign Minister Velayati at the UN on
44eft4er. Iranian media tried to portray a greater convergence of 25X1
opinion on bilateral trade and on the issue of UN sanctions as a 25X1
followup to Resolution 598. TASS mentioned only long-term bilateral
development, while decrying the West's exploitation of the "senseless sziai_
bloodshed" between Iran and Iraq. Shevardnadze said -fate-Mendayok.,-).1
that the US attack on an Iranian naval ship proved that a naval
buildup was risky and restated Moscow's opposition to a US military
presence in the Gulf. 25X1
Comment: The muted Soviet coverage of the Shevardnadze-Velayati
meeting may represent a slight tailoring of Moscow's position since
an Arab League delegation reportedly protested sharply to
Shevardnadze earlier this month Soviet reluctance to press Tehran
for a cease-fire. Shevardnadze's comment on the US attack repeats
the line Moscow has taken on the Gulf war since early July. The
Soviets undoubtedly will continue to focus more on the US and
Western naval presence in the Gulf than on Iranian unwillingness to
adhere to the UN cease-fire resolution
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Top Secret
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NICARAGUA: Cease-Fire Announced
The Sandinistas' announcement of a partial cease-fire is
probably intended to encourage rebel field commanders to
abandon the struggle and will put the onus on the insur ents for
any continued fighting.
President Ortega, citing the regime's determination t comply with
the Central American peace plan, announced yestec4ay that Managua
would postpone offensive military operations in certain parts of the
country. Government troops will be concentrated in specific areas
and defend themselves only if attacked.
Ortega called on the National Reconciliation Commission headed by
Cardinal Obando to seek out insurgent field commanders and
determine their willingness to abide by a cease-fire and accept
government amnesty. Recently formed local peace commissions
comprised of prominent citizens, clergy, and relatives of insurgents
will also participate in talks with the rebels.
Simultaneously, Managua announced that the Catholic Church radio
station, closed since late 1985, will be allowed to reopen immediately.
Comment: Although no date for the start of the cease-fire was
announced, Managua is likely to move ahead quickly. The regime
probably calculates that the move will help head off international
pressure to negotiate a cease-fire aareement directly with rebel
leaders
The cease-fire probably will be limited to some isolated, sparsely
populated, rural areas in eastern and southern Nicaragua where large
numbers of insurgents operate. Withdrawing government troops from
such areas would limit the guerrillas' ability to attack better-defended
economic and military targets but would not abandon major
segments of the population to rebel control
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The reopening of the radio station follows the regime's decision last
weekend to allow La Prensa to resume publication and will be
welcomed by the church hierarchy. Deterioration of the radio station's
equipment over the oast 18 months may delay its opening for several
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PANAMA: Delvalle Considers Resigning
Panamanian President Delvalle will seriously consider resigning if he
and the repime cannot find a solution to the current political crisis,
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are telling him that he lacks support from the military, from the
ruling-party coalition, and, increasingly, from the business sector.
Moreover, he feels under pressure to bring about the removal of
Defense Chief Norieqa even as Noriepa's political position is
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Comment: Delvalle has raised the possibility of resigning several
times in the past to increase his leverage with Noriega. He probably
hopes this tactic will force the military to allow him greater latitude in
policymaking. Noriega and the General Staff want the President to
stay on, fearing his resignation would embolden the opposition and
increase international criticism. In addition, the military is reluctant to
allow outspoken Vice President Esquivel to succeed Delvalle.
BRAZIL: Controvers
The latest version of Brazil's draf constitution reflects minor
compromise on a few controversial issues, but the process still has a
long way to go and bitter debate is likely when the final draft reaches
the full Constituent ssembly next month. Xeeerefirig-to-the-tl&
Eattesg ey provisions include a parliamentary system of
government?to be implemented in March 1988?a six-year term for
President Sarney, and retention of?with some restrictions?the
military's prerogatives to protect law and order. The draft also
includes a watered-down but still controversial amnesty provision for
military personnel cashiered for political reasons.
Comment: The amnesty provision has been tempered to meet major
concerns of the armed forces, but military leaders are certain to
remain preoccupied over this issue and over the entire constitutional
drafting process. The military will continue to lobby Assembly
delegates to modify their positions on amnesty. President Sarney has
shown weak leadership thus far?in fact, the amendments he
proposed earlier have been largely rejected in this version?and is
not well positioned to moderate debate in the coming months. Ef - h e
ecanefflie-sittrattern-rtetertorates-farthwreontroliing-the-constitutiorral
-ppace&s-wiii-bretime-eveyrrnom-diffiettip
_TftnSiar_r_ga_
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CUBA: Paris Club Creditors Meet
The Paris Club of Western creditors will meet tomorrow and Friday to
discuss Cuban debt relief. Havana's failure to change economic
policies to meet debt repayment schedules has exhausted the
patience of official creditors, according to US Embassy reporting.
Paris Club chairman Trichet has reportedly said that creditors might
have to "reorient their whole thinking on Cuba," suggesting the Club
is tiring of one-sided efforts to help Havana meet payments. Cuba last
July released data showing increased hard currency deficits and
near-zero economic growth in 1986.
Comment: The Paris Club will probably extend no new credits to
Cuba because of Havana's refusal to cooperate on economic
adjustment. They may compromise on old debt to encourage future
repayment, but deteriorating hard currency accounts probably
preclude full Cuban payments to creditors this year. Lack of credit will
continue to limit Havana's access to Western imports critical to
growth, which will, in turn, accelerate Cuba's economic slide.
PERU: Unresponsive Oil Policy
Peru's failure to address the concerns of a major US oil company may
prompt the firm to withdraw, according to the US Embassy, a move
that would discourage foreign investment in this key industry. The US
firm, which produces nearly half of Peru's oil, is entangled in tax
disputes, has encountered bureaucratic delays in importing critical
supplies and equipment, and faces accusations that it improperly
remitted more than $800 million to its home office. Another US oil
firm, whose operations were nationalized in December 1985, has yet
to receive any compensation.
Comment: The pullout of the company would be a major blow to an
industry that from 1980 to 1985 was Peru's major foreign exchange
earner. Since President Garcia took office, oil production has
dropped 14 percent, and last year export volume declined by a fifth.
Despite complaints by Peru's national oil companies about
underfunding and complex import controls, which have delayed
deliveries of spare parts, Garcia has paid only lipservice to the
industry's problems
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COLOMBIA: Leftists Protest Political Murders
Communist labor leaders are organizing emonstrations
4errref4ew to protest recent murders o eftwing politicians, union
leaders, and educators. Marches are planned in five major cities, and
as many as 50,000 people may demonstrate in Bogotajeser-eliftg-to
4fte-e8-Ernfrassyv Ansufg en t-f ront-
AccianizatiaapAlnnp.-411-tise.444e-pall4es-444-arouer-r414-a-uriltv,
Comment: The year-old Communist labor confederation, Colombia's
largest labor group, has been working with the insurgents to publicize
charges that the military and rightwing death squads are involved in
the murders of leftists. Similar protests in June attracted large crowds
but did not result in major violence. More demonstrations are likely
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and will probably culminate in a general strike before the end of the
year.
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USSR: Personnel eduction in Military Staffs
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The taffs of all oviet headquarters at military district level and
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above will be cut by 15 percent,
pfficersCaffected by the cuts reportedly will
be reassigned to combat units or retired if age 60 or older; new
officers assigned to key headquarters billets will be one rank lower
than the current incumbents.
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the program would be completed by the end of the year
and would affect approximately 700 generals. General Secretary
Gorbachev may have revealed this decision during a meeting with
senior officers early in the summel,Avhere he questioned the USSR's
need for 4,000 general officers.
Comment: If both officers and enlisted personnel arMncluded in this
program, the overall cuts may involve tens of thousands of men. Of
the reported 700 generals affected, most probably are over age
60 and will be retired. Gorbachev believes that cuts in headquarters
staffs are needed as part of his drive to save resources and eliminate
unnecessary or unproductive officers. The 15-percent reduction in
staffs, however, probably will cause resentment among senior
officers, especially coming on the heels of the personnel firings that
resulted from the Cessna incident. Many younger officers might see
the move as potentially beneficial to their careers.
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SRI LANKA-INDIA: Tigers Reassessing Strategy
rrhe press reports
that one Tiger leader has resorted to a hunger strike to win support
for his group's position and that the Tigers have finally submitted
nominees for the interim provincial council to the Indian Government.
Comment: The Tigers apparently recognize that their efforts to
dominate rival Tamil groups and intimidate residents of Eastern
Province through violence have weakened support for their
organization. They may hope that a temporary emphasis on
nonviolence will recover lost support and that a show of cooperation
with India, particularly through the submission of names for the
interim council, will strengthen their position in the future provincial
government. Sri Lanka's local Tamil population may feel emboldened
by the presence of Indian troops, however, and may respond less
than enthusiastically to Tiger efforts.
PHILIPPINES-ASEAN: Summit Venue in Question
x
Senior officials from several member countries of Association of
Southeast Asian Nations have expressed concern about the security
situation in the Philippines and may request that the meeting of
ASEAN heads of state, scheduled for December in Manila, be
postponed or moved, Indonesian
Foreign Minister Mochtar reportedly plans to suggest a change of
venue at a special meeting of ASEAN foreign ministers in New York
this month. President Aquino has publicly pledged full security for
visiting ASEAN leaders and claims the armed forces are taking
measures to make Manila secure.
Comment: The concerns of the ASEAN leaders are part of the
aftermath of the recent coup attempt in the Philippines and the
military's failure to capture the rebel military leader, Colonel Honasan.
Aquino almost certainly sees the summit as an opportunity to improve
the Philippines' international status, show Manila can play an active
regional role, and demonstrate the viability of her government. The
loss of the summit would be seen as a vote of no confidence from
ASEAN neighbors. Unless Aquino can convince them she is firmly in
control, she will probably fail to secure the summit
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ETHIOPIA: New Autonomous Regions Established
Ethiopia has announced the creation of five autonomous regions?
Eritrea, Tigray, and Assab in the north, and Dire Dawa and the
Ogaden in the east?that will have limited control over their internal
economic and political affairs. Addis Ababa also redrew existing
provincial boundaries to create a total of 24 provinces with a view to
increasing administrative efficiency.
Comment: President Mengistu probably hopes to undercut local
support for insurgents by meeting some of the demands for self-rule
by dissidents in Eritrea, Tigray, and the Ogaden. In addition, Addis
Ababa may calculate that the granting of a measure of autonomy to
ethnic Somalis in the Ogaden?which Mogadishu has long identified
as its principal objective in pressing Somalia's claim to the region?
will clear the way for resumption of stalled talks on the disputed
border. The creation of the regions may marginally erode local
support for the regional rebellions, but Eritrean and Tigrean leaders
have already rejected the new arrangement. Somalia probably will
dismiss the chanaes as cosmetic and adopt a wait-and-see attitude.
SOMALIA: Backpedaling on IMF Reforms
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President Siad has announced plans to reverse key parts of Somalia's
IMF reform program by ending the foreign exchange auction and
reimposing fixed prices on some food items, according to the US
Embassy. The Foreign Minister told US diplomats that the changes
are not intended to repudiate reform but to bring it into line with
domestic priorities. A member of the Siad family recently charged
privately, however, that US pressure for economic liberalization is
intended to undermine the President's rule, according to the
Embassy
Comment: Siad probably decided to cancel the auction?which has
sharply devalued the Somali shilling?to appease his Marehan clan,
whose financial and political interests have been damaged by the IMF
reforms. He probably judged that Mogadishu's declining ability to pay
for imports, together with reduced US military aid, is eroding vital
support from the armed forces. He also may have concluded that
returning the economy to government control will improve the
standard of living. In breaching IMF guidelines, Somalia risks losing
substantial assistance from the US and others, but Siad probably
expects to persuade donors to accommodate the changes.
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USSR
Americas
In Brief
Soviet Foreign Ministry announced two Soviet advisers earlier
reported missing in southern Libya died during hostilities...
assigned no blame to Chad for deaths ... first public admission of
Soviet casualties in Libya.
Soviet and Chinese Foreign Ministers met at UN for fourth annual
discussion ... TASS account indicated agreement on many
international issues, disagreement on Cambodia .. . Chinese
media reported only the divergence on Cambodia.
Nicaraguan independent newspaper La Prensa may have tacitly
agreed to exercise restraint in criticizing regime ...?Ofter-totel-tiS
Embassy-the daily will observe certain limits ... owners probably
fear harassment, another shutdown.
? Police in Rome arrested three suspects yesterday for attempted
murder of Colombian Ambassador to Hungary last January...
drug traffickers probably contracted hit team ... Ambassador,
former Justice Minister, active antidrug proponent in UN.
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East Asia
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Europe
Hungarian Premier announced financial problems causing
withdrawal from the Soviet Tengiz oil and gas project ...
Gorbachev reportedly approved Hungarian pullout
last July.
costly participation uneconomical for Budapest.
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?
UK's Tornado air defense aircraft unlikely to be fully
operational
until mid-1990, ..
budget
until 1996..
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constraints delaying purchase of advanced missiles
radar improved but still below design specifications.
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? Austrian Chancellor Vranitzky changed mind about
opposition leader Walesa during current visit to Poland
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meeting
.. . first
Western head of government to visit
since martial law probably
bowing to pressure from Warsaw
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? Greek Prime Minister announced third Cabinet reshuffle in
11 months... five ministers out, three prominent
in, major posts untouched... Papandreou may
leftwingers back ><
be mollifying left
wing after party divisions over his centrist policies.
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Tnn Sprrpt
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Possible Politburo Alignment
Gorbachev Supporters
Viktor Nikonov a
Agriculture Secretary
Praised by Gorbachev as agricultural reform coordinator.
Nikolay Ryzhkov
Premier
Backs radical economic reform but may prefer slower pace.
Eduard Shevardnadze
Foreign Minister
Loyalty extends beyond foreign policy matters.
Nikolay Slyun'kov a
Economic Secretary
Economic reform specialist; backed by Ryzhkov.
Aleksandr Yakovlev a
Propaganda Secretary
Handpicked by Gorbachev; leading advocate of drastic reform.
Lev Zaykov
Industry Secretary
Promoted rapidly under Gorbachev; backs party reform.
Position Unclear
Vitally Vorotnikov
RSFSR Premier
Speeches noncommittal; promoted under Andropov.
Mikhail Solomentsev
Party Control Chief
Basically for reform but may have reservations.
Probably Skeptical
Geydar Aliyev
1st Deputy Premier
Reportedly at odds with Gorbachev and under investigation
for corruption.
Viktor Chebrikov
KGB Chief
Supported Gorbachev at first but now sees dangers;
Gorbachev rumored to want new KGB chief.
Andrey Gromyko
President
Gave key support to Gorbachev in 1985. May have strong
objections to policies; could be pivotal figure in this group.
Yegor Ligachev
Number Two in Party
Supported Gorbachev at first, now alarmed by his policies.
Being squeezed out.
Vladimir Shcherbitskiy
Ukraine Party Chief
Has begun to back some reforms but might side with
opponents in showdown.
3 Promoted to full Politburo member at June 1987 plenum.
Top Secret
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Special Analysis
USSR: Politburo Polemics Intensify
General Secretary Gorbachev strengthened his hold on the
Politburo at the June plenum, but it appears that his reform
agenda is alienating a still-powerful Politburo minority
increasingly skeptical of aspects of his program. Party secretary
Ligachev and KGB chief Chebrikov, taking advantage of
Gorbachev's absence on vacation, have launched an attack on
abuses of openness?glasnost?that appears to be a direct
challenge to key Gorbachev policies. Unless the party leader can
silence these dissenting voices?either through accommodation
or a showdown?their outspokenness will encourage those in the
lower ranks of the party who are resisting Gorbachev's policies.
Comment: Public differences between Gorbachev and his de facto
party deputy, Yegor Ligachev, became increasingly evident about the
time of the June plenum. At the plenum, Gorbachev promoted three
allies to full Politburo membership, diluting the influence of Ligachev,
who has been acting as a spokesman for party conservatives. Despite
the promotion of Aleksandr Yakovlev and Viktor Nikonov to oversee
ideology and agriculture, respectively, Ligachev continues to be
active in these fields, sending messages that appear to conflict with
those of Gorbachev's allies. This has been most evident in the
ideological sphere, where Ligachev has differed openly with
Gorbachev and Yakovlev over the limits of glasnost.
For the first time, these concerns of Ligachev's are being openly
supported by another Politburo member. He and Chebrikov are now
suggesting that Gorbachev's policies are producing unacceptable
consequences. there are other
contentious issues in the Politburo, such as economic reform and
arms control. In his latest remarks Ligachev stressed that the media
should be guided by the speeches of Gorbachev and "other
leaders"?rather than just the party leader, as is the norm. Speeches
last week by Ligachev and Chebrikov laid out their concerns about
Gorbachev's program.
Their principal theme is that glasnost is getting out of control.
Ligachev lashed out at editors who on their own authority print only
one side of a story. He called for the practice to be "stamped out,"
hintin strongly at the need to impose tighter controls on the media.
Both leaders also argued that glasnost is being used by enemies to
subvert Soviet society and stir up minority nationalities; they
specifically pointed to recent demonstrations in the Baltic republics.
continued
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Ligachev claimed that reactionary forces are forming a "united front"
to "wreck our policy." Chebrikov, implicitly criticizing the release of
political prisoners who then aid the West, argued in effect that human
rights concessions do not work.
Both men were sharply critical of current efforts to reinterpret Soviet
history, particularly the reopening of the Stalin question and efforts to
discredit the Brezhnev era. Ligachev has defended the economic
gains made during the Brezhnev years and noted that military parity
with the West was achieved then. Gorbachev and his allies have been
encouraging the historical critics, apparently hoping that by
thoroughly discrediting the past they will help pave the way for major
reforms.
Both leaders implicitly defended the current system of collective
agriculture. Gorbachev has announced agriculture will be the subject
of a forthcoming plenum and hinted that he wants fundamental
changes in the current system. A debate is raging in the Soviet press
over the merits of collectivization, and the remarks of Ligachev and
Chebrikov decisively reject the line being advanced by reformers that
it was a mistake.
Prospects
The changes at the June plenum appear to have ensured Gorbachev
a slim working majority on most issues. If he were in serious political
trouble, Foreign Minister Shevardnadze would probably not have
been able to take the initiatives that led to basic agreement with the
US on an arms control package
The sharpening of Ligachev's rhetoric and his apparent alliance with
Chebrikov, however, suggest that differences within the Politburo
may be approaching a critical point. Gorbachev's support is weaker in
the party Central Committee, where a majority of members attained
their positions under Brezhnev and many members feel threatened by
Gorbachev's reforms. many
military officers see the reforms as eroding their influence on policy
and even their control over subordinates. A disaffected Politburo
minority might try to bring its case to the Central Committee
The current assault on Gorbachev's policies may stem more from
desperation than strength. There have been persistent rumors in
Moscow over the past year that Gorbachev plans to move Chebrikov
and Ligachev to less influential posts. Perhaps to set the stage,
12
continued
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Gorbachev reportedly established recently special groups headed by
supporters to monitor the KGB and control the course of glasnost.
Even under a policy of glasnost, the airing of top-level dissenting
views is not in Gorbachev's interest and he will want to move to
silence them.
INR-Gomment:4NR-lie4ieweithis analysis overstates both the intensity
of disagreement within the Politburo and its effect on leadership
cohesion. The differences identified here would in the past have been
signs of a serious challenge to a party leader, but the latitude for
public debate among leaders may be broader in the Gorbachev era of
glasnost.
The differences appear to center on how to implement reforms that all
agree are essential. Ligachev and Chebrikov do reflect uneasiness
among segments of the party over the trend of events in the cultural
field, and Gorbachev and Ligachev do differ in tone and emphasis.
Gorbachev himself, however, has warned that limits must be placed
on glasnost, called for "more discipline, more order," and
condemned a "disrespectful attitude" toward the achievements of the
Stalin era. Gorbachev, in sum, has encouraged the airing of divergent
views, and is not necessarily threatened when they appear.
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