MONTHLY FORECAST AND WARNING REPORT -- USSR-EE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91B00776R000100140033-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: January 4, 2017
• Document Release Date: April 22, 2008
• Sequence Number: 33
• Publication Date: July 18, 1984
• Content Type: MEMO

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NIC# 04134-84
18 July 1984
MEMORANDUM FOR: Director of Central Intelligence
THROUGH: David Y. McManis
National Intelligence Officer for Warning
Assistant National Intelligence Officer for USSR-EE
SUBJECT: Monthly Forecast and Warning Report -- USSR-EE
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2. Yugoslavia:
A. Discussion
The domestic situation has deteriorated somewhat over the last
few months but not to the extent of endangering the viability of the
political system in the short term.
On the economic side, international financing through 1984 has
been assured through agreement on a complex Western international aid
package. Yugoslavia is fulfilling the conditions imposed by the IMF
in exchange for the aid package, that is, gradually tying interest
rates to inflation, lifting price controls, and adjusting wages
accordingly. But these measures are depressing living standards and
have produced complaints about inequitable burdensharing in Croatia
and Serbia.
On the political side, the June party Plenum postponed until at
least the end of the year decisions on more fundamental economic
reforms and on the imposition of national party discipline on the
regional party bodies. All analysts agree that the situation will
probably get worse until it can start getting better but there is
disagreement on the implications on the June Plenum's failure to take
any basic decisions. Some analysts see it as an example of
procrastination and indecisiveness that bode ill for the future.
Others, however, believe that the party is deliberately allowing an
open debate among the rank and file and that this is a welcome
development. The reaction of major Yugoslav institutions to the new
situation is mixed. In keeping with the constitution, the Federal
Presidency underwent a complete change of membership at the beginning
of the year. It is now composed of more ambitious leaders who are
not only addressing the more critical issues more openly but also
seem to be using them as a means to strengthen their individual
political positions. Military leaders who had been openly critical
of the political leadership at the beginning of the year have been
quiescent -- either because they are now withholding judgment on the
new leadership or possibly because they are divided among themselves.
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On the foreign policy side, some leaders have manifested
irritation at the conditions being imposed by the IMF and by a
seeming tilt of Yugoslavia toward the West. The Soviets have also
periodically warned the country not to become too entangled with the
West. Perhaps to silence these domestic and foreign critics of
Yugoslavia's foreign policy, Chairman of the Executive Council, Mrs.
Planinc, recently made a trip to Poland, where she did not utter one
word of criticism about the Jaruzelski regime, and is now planning a
trip to Bulgaria with which relations have been somewhat strained in
the recent past. In addition, Yugoslav participants at the recent
annual meeting of the mixed Soviet-Yugoslav Committee for Economic
and Scientific-Technical Cooperation stressed the positive in the
relationship, probably to balance reports of the Western-dominated
"Friends of Yugoslavia" efforts with something positive from the
Soviet side. This effort seemed to pay off as the Soviets muted
their earlier criticisms of Yugoslavia and expressed "understanding"
for its economic stabilization efforts. But they will surely
maintain pressure to deter the Yugoslavs from adopting either
domestic or foreign policies completely abhorrent to Moscow.
3. Soviet-Cuban Relations
A. Discussion
The Soviet-Cuban relationship continues to be characterized by
economic and political cooperation albeit with some disagreements now
and then. On the political side there have been clear disagreements
about the causes of the fiasco in Grenada and Cuban support of the
Soviet Olympic boycott was tardy and seemingly relucant.
Nevertheless, Cuba joined the boycott and the two countries are
working together to reunite leftist groups in the Caribbean. On the
economic front, Castro pointedly stayed away from the recent CEMA
Summit, probably because he realized beforehand that Cuba was not
going to get CEMA's approval for the Cuban industrialization program
he wants. Indeed the CEMA Summit communique noted that Cuba would
continue its agricultural specialization. Economic differences,
however, have not prevented the USSR from giving, and Castro from
accepting, between four and five billion dollars of aid in 1983, an
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increase of about one billion over 1982. Overall, the Soviet
economic plan in regards to Cuba seems to be to keep that country
tied to it economically but to hope that Cuba will require less
economic aid in the future. Castro wishes to lessen that economic
dependence but his economy is in such poor shape that he cannot act
outside the parameters set by the Soviet Union.
The USSR continues to upgrade Cuban military capabilities and
recently delivered the radars associated--albeit not exclusively--
with the SA-5 system. If installed in Cuba, SA-5s would threaten US
reconnaissance flights and air traffic over Florida. However, we
have not detected any indications of SA-5 site construction activity,
a process that would take from two to six months to complete once
work was started.
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