NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030400010030-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 21, 2016
• Document Release Date: July 14, 2008
• Sequence Number: 30
• Publication Date: November 1, 1977
• Content Type: REPORT

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National Intelligence Daily Cable for Tuesdy, 1 November 1977
The NID Ca e is for t e purpose o informing
senior US officials.
USSR: Demonstration in Lithuania
POLAND: Gierek-Wyszynski Talks
UK: Pound Floating
TURKEY: Political' Strains
ISRAEL: Situation,. Report
INTERNATIONAL: United Nations
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Yugoslavia
China
Israel
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USSR: Demonstration in Lithuania
A report of a violent nationalist demonstration in
t e Lithuanian capital of Vilnius three weeks ago is still un-
confirmed. Such events, however, are not unprecedented in the
Soviet Union, particularly in the Baltic republics where anti-
Russian sentiment is always close to the surface.
t e disturbance, which occurred on 10 October, began
a a soccer game between the Lithuanians and a Russian team.
When the game ended, some 15,000 fans reportedly streamed out
into the streets, turned over cars and ripped down banners
erected to mark the the upcoming 60th anniversary of the Bol-
shevik Revolution. The riot ended after the police intervened
and made a number of arrests.
A similar demonstration reportedly took place in Vil-
nius two years ago when the victory of a popular local soccer
club triggered a mass demonstration. Thousands of participants,
mostly young students, marched around the city singing patriotic
Lithuanian songs until the police broke up the crowd. A far more
serious incident occurred in 1972, when the self-immolation of
a Lithuanian youth touched off a two-day riot throughout the
city of Kaunas. Local authorities were only able to restore order
with the help of heavily armed security forces. Reverberations
from this major outburst were felt throughout the republic for
months.
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Although the recent fracas was reportedly spontaneous,
several factors are contributing to popular antagonism toward
the Soviet authorities. Soviet harassment of the church, for
instance, has made the local atmosphere particularly volatile
since the Lithuanians are predominantly Catholic and view the
Church as a national symbol.
Recently, popular antagonism has also grown because
of the export of food produced in the three Baltic republics--
Lithuania Latvia, and Estonia--to other regions in the USSR
where shortages have developed. Vilnius is reportedly reasonably
well supplied with food compared to other areas, but the Lithu-
anians apparently still strongly resent the central government's
policy. A similar reaction over meat exports reportedly provoked
work stoppages in Latvia earlier this year and the ing of an
Estonian meat warehouse. 25X1
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POLAND: Gierek-Wyszynski Talks
The first meeting ever between Polish party Leader
zerec ana Stefan Cardinal Wyszynski suggests that both men
are increasingly concerned that current economic problems may
Lead to further popular unrest. The two men talked for two
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hours on Saturday, and a Polish news agency strongly suggested
that the talks were on broader issues than Church-State rela-
tions. The Polish media have widely reported the meeting.
Gierek, who is actively seeking the Church's coo
er-
p
ation to keep the lid on tensions, seems willing to make some
concessions. The government, probably helped pave the way for
the meeting by approving building permits for at least 18 new
churches in mid-October. Indeed, the meeting goes some distance
toward satisfying the Cardinal's insistence on open recognition
of the Church as a pillar of Polish nationhood. Gierek's visit
to Rome later this month to see the Pope is also an effort to
gain favor with Poland's overwhelmingly Catholic population.
Both the Church and the government want to prevent
serious public disturbances. In the past, the church has sup-
ported the government by calling on the Poles to work hard to
overcome economic difficulties. In return, the Church wants the
government to grant some of its demands. The government may
have granted the Church the building permits to blunt the Car-
dinal's demands for greater access to the state-controlled media
and a cessation of atheistic campaigns. Wyszynski on the other
hand may hope that Gierek will respond favorably on these
questions.
Wyszynski is due to go to Rome on 8 Nove
b
f
m
er
or an
audience with the Pope, and will probab ain there at least
through Gierek's visit.
UK: Pound Floating
//The British Government's decision to mi
i
i
n
m
ze
intervention in foreign exchange markets--in effect to permit
the pound to float upward--will ease inflationary pressures in
the UK, where prices are currently rising at an annual rate of
about 16 percent.
//The appreciation of the pound will initi
ll
a
y
worsen Britain's competitive position in international markets
by raising the price of British goods, but the longer term im-
pact is not as clear cut. If the reduction of inflation is suf-
ficient, Britain's competitive position could actually be im-
proved.//
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//The Bank of England h d b
een attempting to keep
the pound stable to maintain Britain's export competitiveness.
In recent months, however, an improved balance of payments
picture increased upward pressure on the pound and forced Lon-
don to sell large quantities of sterling in foreign exchange
markets. While this dramatically increased the country's official
foreign reserve holdings--from $4 billion at the end of 1976 to
an estimated $20 billion by the end of October--it also strained
the monetary authorities' ability to control the money supply.//
//Pounds sold on the forei
gn exchange markets have
returned into the British, economy and depressed interest rates
and expanded domestic credit. The central bank discount rate
plummeted from 14.25 percent on 1 January to 5 percent by mid-
October.//
//Last week Chancellor of th
e Exchequer Healey an-
nounced a slight relaxation of controls on the outflow of capi-
tal from the UK, a move that did little to lessen the upward
pressure on sterling. Unwilling to continue selling pounds to
stabilize the rate, London reluctantly has permitted the pound
to float upward.//
//Reduced intervention ih
t
n
e foreign exchange
markets should slow the growth of the money supply, reduce in-
flationary pressure and help the government to limit domestic
credit expansion as required by the terms of its 1976 stand-by
credit from the Internat; nnai
pound should a -~ -` "`"-_" GLlY r ullu. The a reciat'
s of imported goods. 25X1
TURKEY: Political Strains
~//The approaching municipal eZeetions~
will further complicate the already troubled
political situation in the country. Political leaders will be
further distracted and find it more difficult to deal with
pressing domestic and foreign policy problems.//
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e-electoral maneuvering and the outcome
h
e pr
Both t
of the 11 December elections could have a significant impact
on the cohesiveness of the major parties and of the ruling
coalition.
ter Demirel's right-of-center Justice
i
i
s
n
Prime M
Party, the main partner in the coalition, and particularly the
opposition left-of-center Republican Peoples Party face debili-
tating internal fights over the choice of candidates. The cam-
paign, moreover, is likely to further exacerbate tensions among
the three squabbling coalition parties as each attempts to make
gains at the other's expense.
e Party is rural-based and is not likely to
ti
c
The Jus
replace the Republicans, who traditionally control most major
cities. Should the Justice Party lose a significant number of
votes to its two junior coalition partners, the minority in the
Justice Party who have advocated that the coalition be dissolved
would gain strength. These members of the Justice Party have
argued that the party already has made too many concessions to
the Islamic-oriented National Salvation Party and the neo-fascist
National Action Party. A poor showing by the two junior partners
could increase sentiment in those parties to withdraw from the
coalition and offer their votes to the Republicans.
nificant drop-off in support for the Republicans
A si
g
could weaken former Prime Minister Ecevit's control of the party.
Ecevit has already come under fire from a vocal minority of
party members who charge that he bungled the effort to form a
in June
i
.
on
government after the parliamentary elect
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ISRAEL: Situation Report
More demonstrations and work stoppages are expected
to follow yesterday's protest strikes against the Israeli
Government's new economic reform measures. Leaders of the
Histadrut Labor federation claim they are holding off calling
a nationwide strike for the time being in order to retain
maximum bargaining Leverage.
The Histadrut, which is controlled by members of the
opposition Labor Party but also contains pro-government labor
unions, probably also hopes to avoid a premature test of strength
with the government that could backfire. A Histadrut call for
a one-hour general strike to protest earlier subsidy cuts last
summer was a complete failure.
The central committee of the Histadrut reportedl
has
y
decided primarily to demand that workers' cost-of-living allow-
ances be increased in January to off-set expected price rises.
Such an increase would normally not come up for consideration
until April.
Finance Minister Ehrlich has indicated a readiness to
negotiate with labor leaders, but he will resist demands fo
r
wage increases that would undo his reform measures. To assuage
the low income constituents within the ruling Likud and undercut
Histadrut, Prime Minister Begin has also promised that the
government would compensate "disadvantaged sectors" for the
increased inflation caused by the new economic policy.
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INTERNATIONAL: United Nations
//The Special Political Committee of the UN Gen-
eral Assembly (UNGA) is debating a draft resolution on inter-
national aviation safety. The West German rescue operation in
Somalia and the recent refusal of Third World countries to
grant terrorists political asylum have created a favorable at-
mosphere in the UN for the debate on measures to prevent hi-
jackings.//
/The international response to terrorism in the
past has been relatively weak and ineffective. A substantial
number of countries fear that effective international measures
against terrorism could be used to suppress or deny the legit-
imacy of "national liberation movements." Many states resist
the infringement of national sovereignty implied in an inflexi-
ble curtailment of the right to grant political asylum. Finally,
many countries are reluctant to commit themselves to any course
of action that might invite retribution by terrorist groups.//
//Over the past 14 years, six international con-
ventions have been concluded that deal with some aspect of in-
ternational terrorism. These accords reflect widespread concern
that something must be done, but they do not effectively con-
strain terrorist activity.//
//Following the tragedy at the Olympic Games in
1972, the UNGA formed a committee to consider measures to pre-
vent international terrorism. The desire of many members to
protect favored "national liberation movements" led the group
to study the factors that "cause some people to sacrifice human
lives, including their own, in an attempt to effect radical
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change." The fruitless efforts of the committee underscore the
difficulty of striving for comprehensive solutions to the prob-
lem in international forums.//
//UN counter-terrorism accords have covered only
specific types of terrorist acts. US efforts, begun in 1972,
to persuade the UNGA to adopt a "Convention for the Prevention
and Punishment of Certain Acts of International Terrorism" were
unsuccessful. The West Germans have thus far not succeeded in
obtaining agreement on an international convention against the
taking of hostages.//
man
sue
//The recent hijackings of Japanese and West Ger-
airliners inspired increased interest in the terrorism is-
at the current UNGA session. Forty-six nations joined to
propose a draft resolution that condemns hijacking and calls
for an improvement of airport security as well as ratification
of three existing conventions on hijacking. The sponsors are
primarily from Western Europe, Latin America and Africa; there
are none from the Middle East or Eastern Europe.//
//Debate is likely to be estrident
but the
,
tion stands a good chance of passage. Previously
various A
b
,
ra
and African nations argued that no convention could apply to
national struggles for self-determination. Recently, however,
the PLO leadership has condemned hijacking and the taking of
hostages--a move that should allow Arab governments to take a
more moderate stand on the resolution. The Communist states
have resisted over-arching antiterrorism conventions that would
impede the operations of favored insurgent movements. They have,
however, supported moves to combat hijacking and will probably
support the General Assembly resolution.//
//Although the proposed. resolution
with
,
only moder-
ate amendments, will probably be accepted, its enforcement is
not guaranteed. Indeed, it is not likely to constrain effectively
international terrorism more than earlier resolutions did. De-
cisive UN action would require fundamental changes in perceived
national interests. the UN could reflect but not generate.
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Yugoslavia
USSR has raised the value of a 1972 ruble credit
The
to Yugoslavia from $540 million to $750 million. Yugoslav Pres-
ident Tito apparently requested the increase during his visit
to the USSR in late August to cover cost overruns on equipment
for 42 industrial projects agreed to under the original credit.
have so far delivered only one third of
t
i
s
e
The Sov
theequipment covered by the 1972 credit. Completion oof the 42
projects, originally scheduled for 1976, has now been postponed
to 1980.
line of credit, the USSR provides
h
e new
Even with t
on y a small share of Yugoslavia's foreign financing. Yugoslavia
owes only ahnut 5 percent of its medium- and long-term debts to
the USSR.
cutions recently reported in China's provinces
h
e exe
T
crackdown on social disorder that is directed
f
a
are part o
mainly at ordinary criminals. Chinese authorities may have exe-
cuted some members of political factions but they have not in-
stituted a wider or more violent purge of sympathizers of the
"gang of four."
t of those executed have been charged with "counter-
M
os
revolutionary offenses"--a term loosely defined in China--but
appear to have commited criminal acts.
much disruptive behavior went unpun-
ears
recent
I
,
y
n
ished because of an ineffective public security system. Peking
is now pushing a campaign to revive state security organs. A
strongly worded article in the October edition of the party
iournal Red Flag calls for a return to "work according to law."
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Former Israeli Foreign Minister Abba Eban may be
an ambassadorial post, possibly in Washington.]
as denied the rumors, but would welcome such an offer.
Although he is a member of the Labor Party opposition
,
Eban has sought to remain on good terms with Begin. At the Prime
Minister's request, Eban toured the US shortly after the May
election to explain Israel's negotiating stance. Recently, he
has been somewhat critical of the hardline position adopted by
his own party toward the US-Israeli working paper on reconvening
the Geneva Conference.
Should Eban be appointed, the move would be another
coup for Begin and a jolt to the Labor Party, which is still
smarting from the defection of Moshe Dayan. The appointment
would also help Begin's relations with American Jews, who hold
Eban in high esteem as a result of his lenghty prior service
as Israel's ambassador to the US and the UN.
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