MONTHLY WARNING REPORTS FOR SEPTEMBER 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91B00776R000300030018-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: December 23, 2016
• Document Release Date: June 5, 2013
• Sequence Number: 18
• Publication Date: October 19, 1987
• Content Type: MEMO

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The Director of Central Intelligence
N'ashing~on. D.C. 20505
National intelligence Council
19 October 1987
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central .Intelligence
FROM: John J. Bird
National Intelligence Officer for Warning
SUBJECT: Monthly Warning Reports for September 1987
1. Summary of Key Warning Issues:
Iran/Persian Gulf/US
Recent events have been sobering for the Khomeini regime. It has had to
cope with: increasing diplomatic isolation; the United Nations resolution on
the war and the spectre of an arms embargo; and the apparent increase in US
prestige among Gulf Arab states. The Intelligence Community is divided over
Tehran's likely response. One group of analysts contends that there is debate
in Tehran over strategy, with a hardline group wanting confrontation while
more pragmatic elements support a more measured course. Other analysts
believe the debate is over tactics and that the whole government of Iran would
take escalatory steps in the Gulf if it believed it could not accomplish its
objectives in other ways. The results may be the same regardless of which
judgment is correct. There will be a reaction in Tehran to the capture of its
This review reflects consideration of inputs generated at warning meetings
conducted by the National Intelligence Officers with Community representatives
from all areas. As such, it represents a Community-wide review, but it is not
a formally coordinated Community product.
CL BY SIGNER
DECL OADR
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mine_laying ship and the destruction of its small boats. We can expect
continued mine laying, increased tanker harassment, and more ship attacks. We
should also expect to see moves against Saudi Arabia or Kuwait. Facing
threats to its core interests and knowing that the US will not be forced out
of the Gulf easily, Tehran could conclude that US public opinion can be turned
in its favor only by the loss of American lives.
OPEC Oil Policy
A successful Iranian attack on Saudi or Kuwaiti oil production facilities
would have a significant impact. on world oil prices. Iran wants to increase
prices to about $28 per barrel but can only~do so by controlling output by
both Iraq and Kuwait. Short of winning the war, the best Tehran probably can
expect is for OPEC to increase the price to about $20 per barrel at its
December meeting. Even this will be difficult, however, unless OPEC
overproduction is reduced. CIA analysts believe Kuwait's current production
at nearly twice its OPEC quota can be attributed primarily to a desire to
increase its financial reserves as a cushion against any cutoff of .its oil
exports.
Libya/Chad/France/US
Neither Libya nor Chad will back down and relinquish the Aozou strip. The
next battle probably will be very costly for both sides and the Chadians are
slightly favored if they attack in great strength. Once the ceasefire is
broken, Libyan airstrikes will be furious and Tripoli probably will resume use
of chemical weapons. (The NIO/Warning notes that, based on indications of
growing Libyan concern over President Habre's military prowess, the likelihood
of chemical weapons use is increasing.) Habre's shortages of troops,
equipment, and supplies allow him only a thin margin, however; a prolonged wax
would favor the Libyans. Paris has warned Hahre aaainct ~n attack
worry a e as ai e o res rain im. a con is esca a es,~
France will be caught between its desire to demonstrate the credibility of the
French commitment in Africa and its fear of inflaming Arab opinion. These
concerns are likely to accentuate the differences between French and US
interests and introduce strains into our bilateral relationship.
Ethiopia
A famine comparable to the disaster of 1984-85 is almost certain. A key
deadline will be deliveries of about one million metric tons of food to
central distribution points before mass migrations to the cities and to Sudan
begin. Although the Ethiopian government probably can afford to buy food to
feed its urban population, we do not know if it has the resources or will to
alleviate distress in rural areas.
Turkey
Prime Minister Ozal seems well positioned to win reelection, but his
manipulation of election procedures, such as shortening the campaign period,
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may backfire. Even if these tactics secure victory, they may lend an air of
illegitimacy to the government and radicalize the opposition. Tampering with
the Constitution for political expediency sets a worrisome precedent.
Yugoslavia
The Yugoslavs have declared a moratorium on repayment of principal owed to
commercial banks and are likely to do so with Western government creditors as
well. Belgrade is likely to ask this month for a rescheduling of all maturing
principal--and possibly interest--over the next three years. In response,
creditors probably will demand tight oversight--a position the Yugoslavs have
rejected. Prime Minister Mikulic may resign over the issue. Such a decision
would throw the leadership into further disarray.
2. Trend Commentary:
USSR/East Asia
Recently completed consultations between Soviet Foreign Ministry and US
officials on East Asian affairs were notable because of new approaches the
Soviets took on some key issues. The Soviets were cautiously optimistic about
prospects for improving ties with China and avoided criticism of Chinese
policies. They avoided replaying Vietnamese and Cambodian positions on the
Cambodia issue and hinted at some flexibility on how talks should be
conducted. The Soviets' positions on Japan and Korea, however, remained
unchanged. They were very hard on Japan and were unwilling to distance
themselves from North Korea's approach to the problems of the peninsula. The
Soviets reconfirmed their position on Taiwan but curiously did not mention the
Philippines. NIO/East Asia notes. that we must be prepared to analyse the
impact on the United States of future improvements in Sino-Soviet relations
and any new Soviet initiatives in Southeast Asia and the Pacific.
West Germany
Chancellor Kohl's Pershing lA decision marked a turning point in Bonn's
security posture. The Christian Democrats have decided that they will be the
champions of arms control and detente--an increasingly popular political
stance--and will not cede that ground to any other political party. We can
expect continued strong pressure from Bonn for East-West discussions on
short-range nuclear forces (SNF)--toward a possible "triple zero" option.
Some urging that NATO adopt a common policy on SNF and fear that
without a NATO position, another Soviet "zero" initiative could stampede the
Federal Republic toward denuclearization on Moscow's terms.
Western Europe/Persian Gulf
Although the Allied naval presence in the Persian Gulf has expanded
rapidly, the West Europeans lack the capacity to defend against increased
small boat attacks and may be loathe to expand operational cooperation by
apportioning zones of coverage, for example. The attack on the British flag
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vessel "Gentle Breeze" outside the British protection zone did not offer an
indication of Allied reaction to escalating conflict; the real test .will come
with an attack on a West European combatant.
Nicaragua/Central American Peace Plan
The insurgents have made gains against the Sandinistas over the past two
months, but the ceasefire could adversely affect morale and prompt increased
desertions while providing Managua a much needed respite from months of heavy
insurgent pressure. The ceasefire also complicates the peace process. An
insurgent failure to comply will be seen as a violation of the peace
agreement. Furthermore, the Sandinistas may continue to insist on bilateral
talks with the US. If the peace plan fails, the Sandinistas' buildup along
the Honduran border may be prelude to an incursion in the next five months.
Latin American Debt Cartel?
The Intelligence Community sees .little likelihood that Latin American
debtors will follow Brazil's recent calls for a united front against
international lenders. However, if Brazil wins any concessions from the IMF,
other debtors are unlikely to settle simply for tying payments to gross
domestic product. They will be looking for new and creative approaches to
debt repayment.
Presidential Commission on AIDS, said that worldwide data on AIDS are grossl
International--AIDS
AIDS continues to spread throughout the world, particularly in sub-Saharan
Africa. Some 125 countries have reported cases to the World Health
Organization, which estimates that five to ten million people in the world
have the AIDS virus and that at least three million new cases of AIDS will
emerge in the next five years. At the first Intelligence Community warning
meeting on AIDS, Mr. William Walsh, economic and international advisor to the
inadequate.
the US. Any new group that it allows to emigrate may contain a high
proportion of AIDS carriers and victims.
imme is a concern, ana ys s e ieve u a may ry o ors vic ims on
Sub-Saharan Africa/Lebanon/Terrorism
There are worrisome trends in the recent growth of sub-Saharan Africa's
Lebanese population. Now numbering 450,000, primarily in central and western
Africa, they are becoming increasingly Shiite and activist. Hizballah is
growing rapidly and may soon replace Amal as the largest group. African
intelligence services are inept at monitoring the Lebanese and airport
security is lax. They could not prevent a well planned terrorist incident,
including a repeat of the recent hijacking in the Central African Republic.
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Terrorism
Iran continues to develop contingency plans for possible attacks against
US personnel and facilities. The risk of such attacks has increased since the
"Iran Ajr" incident. CIA believes that some plans have been completed and
that assets in place--probably non-Iranians--are ready to undertake terrorist
actions. DIA believes that the threat to American interests in Honduras is
medium and is likely to remain so for the rest of this year; analysts expect
terrorist activity to remain low despite the large US presence and numerous
lucrative targets. In contrast, the level of terrorist activities by West
European groups has declined over the past year. West Germany's Red Army
Faction has not staged an attack since October 1986. Both France's Action
Directe and Italy's Red Brigades have been hurt by arrests. The groups remain
able to act, however; a Red Brigades faction reportedly also has been in
contact with both Libya and the Sandinistas.
3. NIO/Warning notes these additional areas of warning concern:
Philippines
President Aquino's support is weakening. A recent rally in Manila drew a
scant 3,000 people, for example, and both civilian and military opposition is
growing. Meanwhile, the communist New People's Army is stepping up attacks on
bridges, possibly signaling a shift in tactics toward sustained attacks on
economic targets. Continued guerrilla successes, aided by divisions within
the military, will accelerate political polarization and encourage opponents
of Aquino to increase their efforts to or aniz b
force her from office
(coup
ea er o one onasan as state pub icly that he will lead another coup.
Iran/Libya
Iranian Revolutionary Guard naval forces in Lebanon may present a new kind
of threat to IIC and allicrt m~ritimc in+or.ortr in +hr. M...1-0+........ ~.... ~.. C.. .. ........
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a mine o sou ern a anon a ege to be similar 25X1
recen yin a Persian Gulf while Lebanese found three others;
a Revolutionary Guard commander claimed at about the same time that his
contingent already had laid near Tyre. In addition, Libya may try to 25X1-
lay mines off the Suez Canal. n a cases, the mine laying is likely to be ~
covert. It may be difficult to prove responsibility. We cannot count on
catching these mine layers red-handed.
India/Sri Lanka
India's intervention in Sri Lanka seems to reflect Rajiv Gandhi's adoption
of a doctrine formulated by his mother asserting an Indian right and
responsibility to protect ethnic Indians anywhere. India committed most of an
infantry division plus police forces to northern and eastern Sri Lanka in
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recent weeks to help enforce a peace agreement concerning the Tamil (ethnic
Indian) insurgency and increased its troop strength after fighting broke out
between. Indian troops and Tamil militants. In addition to introducing a force
that could dominate the whole Sri Lankan Army, the Indians have obtained
Colombo's agreement to restructure the Sri Lankan state and to a virtual
Indian veto of national security policy in Sri Lanka. It is not yet clear how
far Gandhi intends to go in establishing dominance over Sri Lanka. The
instability in Fiji between the native Fijians and the ethnic Indians may soon
be another case for Indian intervention using the Navy to "protect" ethnic
Indians.
Braz i 1
President Sarney's ruling coalition has collapsed and his efforts to break
the political impasse may have set the stage for new challenges to his
leadership. Sarney wants to keep the current presidential system in the new
constitution while most legislators debating the constitution favor a
parliamentary system. Economic troubles continue and the recent initiative to
secure debt relief from international bankers failed, generating
recriminations. Meanwhile military discontent is rising as soldiers criticize
Sarney and demand pay increases. The constitutional debate will be crucial.
Increased economic problems, moreover, could lead to broad based protests,
providing a pretext for military intervention.
Tunisia
President Bourguiba's campaign to suppress all political opposition is
escalating with crackdowns on Islamic fundamentalists, including two
executions and a life sentence for a fundamentalist leader. Far from ensuring
smooth succession, however, the regime's efforts are increasing discontent and
ensuring chaos, uncertainty, and confusion when the succession crisis comes.
The Libyan threat almost certainly will increase in the post-Bourguiba period,
and Algeria too seems poised to influence the succession struggle.
Iran/Iraq
Political stakes in the war are high. The potential for sudden collapse
of either government is out of proportion to actual or likely military
results. Military and civilian opposition to Husayn continues. Meanwhile, in
Iran, Khomeini seems to have lost some control over the power struggle among
his successors, and his death could lead to major instability within the
successor government.
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 SUBJECT: Monthly Warning and Forecast-Meetings for September-1987
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