NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029500010040-0
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• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 22, 2016
• Document Release Date: August 18, 2006
• Sequence Number: 40
• Publication Date: November 23, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Tuesday November 23, 1976 CI NIDC 76-274C
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National Intelligence Daily Cable for Tuesda November 23, 1976.
2 X1
I IT he NID Cable is for the purpose of informing 25x1
senior US officials.
CONTENTS
MEXICO: Exchange Control
POLAND: Church Supports Workers
GREECE-TURKEY: Aegean Talks Conclude
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Page 1
Page 2
POLAND-USSR: Economic Aid
CHINA: Status of Chiao Kuan-hua
PERU: Bolivian Corridor Proposal
JAMAICA: Election Outlook
ARGENTINA: Possible Wage Increases
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MEXICO: Exchange Control
Mexico yesterday temporarily suspended trading in all
foreign currencies and gold by banks. The measure was necessi-
tated by massive capital flight in recent days as a result of
coup rumors and the continuing decline of confidence among busi-
nessmen.
Confidence has reached a new low since President
Echeverria's expropriation of about 100,000 hectares (250,000
acres) of rich farm land in the state of Sonora on Friday. The
expropriation was a drastic move by Echeverria in the waning
days of his administration to deliver on his promise to break
up large private farms and distribute them to landless peasants.
The move has evoked a strong outburst from conservative busi-
nessmen, who are trying to organize a business strike in pro-
test.
The expropriation will pose a serious problem for 25x1
president-elect Lopez Portillo, who takes office on December 1.
He has indicated that he will try to avoid division of land
holdings because it creates uneconomic units that hinder agri-
cultural production. Business and conservative interests will
urge Lopez Portillo to rescind the expropriation, but gounter-
2 x1
pessure from peasant rou s will make this difficult.
I
POLAND: Church Supports Workers
The Polish Episcopate has apparently renewed its
plea for amnesty for all persons involved in the June rioting
and has started to collect funds to aid the families of those
who were jailed or lost their jobs. Polish media have as yet
made no comment on these actions, which have been reported in
the Western press.
If the reports are true, the Catholic bishops have
increase pressure on the regime by lending their authority to
the campaign that the Committee for the Defense of the Workers
began in September. The church can attract much more attention
to the cause of the dismissed workers than can the committee,
which was founded by dissident intellectuals. The church has
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reportedly tempered this latest action, however, by deciding
not to launch a nationwide campaign or use the pulpit to make
pleas for money.
I The Episcopate joined the committee's cause just one 25x1
day after the government's press spokesman, Vice Minister for
Information Janiurek, branded the committee "illegal" under
Polish law. In answering a question from a foreign journalist,
Janiurek said the committee would be fought on the "ideologi-
cal" front, but he warned that "our patience isn't everlasting."
In an obvious effort to counter reports in the West-
ern press, Janiurek said that only 74 persons remain in jail
and that no one had been prosecuted for participating in strikes.
The committee disputes this figure.
In any event, the committee and Episcopate are more
interested in those workers who have suffered various kinds of
reprisals, including loss of jobs, than in those who are still
in prisop. On the former, the regime has been conspicuously
silent.
GREECE-TURKEY: Aegean Talks Conclude
Greece and Turkey made considerable procedural prog- 25x1
ress an roke some new substantive ground in their recently
concluded talks in Bern and Paris on the Aegean question, but
they have yet to take up the most difficult issues. Any follow-
up negotiations are likely to be intermittent and protracted.
Both sides assert that the talks in Bern dealing with
the continental shelf have set the stage for serious substan-
tive negotiations in the coming months. A committee of experts
is to work in secret on the question of delimitation of the
shelf, using the practices of other states and international
rules as guidelines.
According to a communique issued in Bern, the two
countries have also agreed not to take any actions in the Ae-
gean that could disrupt the talks, and not to try to discredit
each other in their bilateral relations with other states. In
practical terms, this apparently means that the Turks agreed
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not to engage in oil exploration in contested waters, and the
Greeks undertook not to lobby in the US and in Western Europe
against Turkey.
After a summer of high tensions, both sides seem con- 25x1
tent for the time being to limit their jockeying and to seek
some narrowing of their differences. The limited agreements
reached so far offer considerable scope for differing interpre-
tations, however.
I For example, the Turks are already inclined to be- 25X1
lieve t a the Greeks are violating their commitment. The Turks,
moreover, may find it difficult not to resume an assertive pol-
icy in the Aegean next spring, as the campaign for their October
parliamentary election heats up. For their part, the Greeks are
unlikely to refrain completely from their traditional efforts
to see rful
Turks. 21X1
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POLAND-USSR: Economic Aid
The Soviet economic aid package to Poland--agreed 25x1
upon during party leader Gierek's visit to Moscow earlier this
month--will give Poland's economy a boost and help improve its
balance of payments. The package includes the resumption of
grain deliveries, shipments of raw materials above planned
levels, increased deliveries of consumer goods, and, according
to press reports, a low-interest loan worth $1.3 billion at the
current exchange rate.
creased imports of machinery, raw materials, and possibly grain
from the USSR. At the least, Poland would not have to divert
exports from the West to pay for the additional Soviet deliver-
ies.
The report of the Soviet loan credit is still uncon- 25X1
firmed If true, the credit probably would be used to finance in-
I credit may allow Poland to redirect some of its 25x1
exports from the USSR to other markets. Coal and other products
could be sold in the West for hard currency, and a suspension
or reduction of meat exports could be used to bolster domestic
meat stocks, already at an alarmingly low level.
IThe resumption of Soviet grain deliveries and in- 25x1
crease shipments of raw materials will allow Poland to curb
further the growth of its hard-currency imports in 1977. The
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Soviets reportedly will deliver at least 1 million tons of
barley and an undetermined amount of wheat to Poland next year.
I Details on raw materials deliveries are sketchy. Po-
land reportedly will receive shipments of oil in 1977 at 1976
prices. The Soviets may also have agreed to increased deliveries
of raw materials, such as iron ore, that Poland buys from the
West for hard currency.
Polish consumers will benefit somewhat from increased
imports of consumer goods in chronic short supply--ref
color television sets, and small household appliances. 25[1
I The political status of Chinese Foreign Min- 25x1
ister Chiao Kuan- ua seems to be in question. //Rumors are cir-
culating in China and in Chinese missions abroad that he will
be removed from his post.// He last appeared in public on No-
vember 11; since that time he has missed two important visits
at which he would normally have been present.
The official explanation for Chiao's failure to meet
visiting President Bokassa of the Central African Republic was
illness. He is reportedly being "investigated," however, be-
cause of his wife's alleged ties to Mao's disgraced widow,
Chiang Ching.
I IWe have no reason to believe Chiao was linked to the
tour e fists now under attack--he was, in fact, a protege of
the late premier Chou En-lai--nor can we confirm allegations
that Chiao's wife had ties to Chiang Ching. Chiao's political
difficulties, if indeed they exist, would, however, seem to be
related to domestic issues rather than to any unhappiness over
his conduct of foreign policy or his foreign policy positions.
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time--but he seemed genuinel leased by Hua's promotion and
the arrest of the leftists. 25-111
By most accounts, Chiao has gotten along well with
new party Chairman Hua Kuo-feng. He played no role in Hua's
move against the leftists--he was at UN headquarters at the
PERU: Bolivian Corridor Proposal
Ocean. Chile made its own proposal last December.
Peru has presented Chile with a formal counterproposal 25X1
for creation of a corridor giving Bolivia access to the Pacific
--Eventual cession to Bolivia of sovereignty over a corri-
dor through northern Chile to a point short of the ocean.
--Tripartite administration by Peru, Chile, and Bolivia
of the remaining section of the corridor to the sea.
--Tripartite administration of the Chilean port of Arica.
--Authorization for Bolivia to construct its own port and
to control the corridor's coastline.
I The original Chilean proposal was to grant Bolivia 25x1
exc usive sovereignty over a similar corridor, with no addi-
tional provisions.
hoped to regain territory in the Arica region which was lost to
Chile in the last century, and consequently welcomes any delay
on the corridor issue.
With their current proposal, the Peruvians apparently 25x1
are counting on Chile and Bolivia to disagree. Peru has long
I The Bolivian government will study the Peruvian pro-
posal, but for the present is likely to await Chilean reaction.
Bolivian leaders probably will be displeased that their coun-
try's sovereignty in the proposed corridor would not continue
to the sea.
negotiations to keep relations with Peru amicable, but will
Chile seems likely to take strong exception to Peru's
counterproposal. The Pinochet administration may well continue
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nevertheless have reservations, particularly about the proposed
joint administration of the port of Arica. Indeed, the semi-
official press in Santiago has already billed Peru's offer as
"a negative response" to Chile's earlier bid.
There is a good chance that negotiations will eventu- 25x1
ally founder or reach a stalemate. Chile may not be entirely
reluctant to see the corridor idea languish or fail altogether,
since realistic hopes in Santiago for a workable solution have
probably never been very high.
Both sides may prefer, nevertheless, to keep the talks 25X1
going as long as possible. Should a breakdown occur, border ten-
sions would probably increase. 25x1
Jamaican Prime Minister Manley has called for an
early general election, on December 15, in an apparent effort
to act before a further erosion of his popularity, as Jamaica's
economy continues its decline.
I IManley's People's National Party and the opposition
Jamaica Labor Party led by Edward Seaga appear to be running
nearly even. A newspaper poll in late October indicated that
the ruling party was leading in the popular vote by 51 to 49
percent, but that the Labor Party was likely to achieve a
28-25 advantage in parliamentary seats under the present dis-
trict arrangement. The House of Representatives, however, is
expected to approve today a government proposal to redraw par
liamentary district boundaries and create seven new seats.
I Manley is relying heavily on this gerrymandering
move. He is also counting on his skill as a campaigner to re-
verse middle-class voter defection from his party and prevent
abstentions by party members who are dissatisfied with his
handling of the economy and alarmed at the growing influence
of the party's left wing.
The closeness of the race reflects the marked decline 25x1
in the Manley government's popularity. In the last national
election, in 1972, his party won 56 percent of the popular
vote, and it currently holds more than twice the number of
seats in the parliament held by the opposition.
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I IManley has acknowledged being concerned about his
party's prospects and is supporting the renomination of even
its conservative members of parliament if they have proven
vote-getting ability. The leading party leftists have also
been given a place on the ticket, as candidates for the new
districts.
nonetheless be handicapped by the fact that many of its candi-
dates are young and not as well known as those of the ruling
party.
The opposition Labor Party has been campaigning hard
for several months, and Seaga expects to win. His party could
persons, including nine members of the Labor Party.
The campaign may well be plagued by violence. Already 25x1
a clash between ruling party activists and part of a motorcade
carrying Seaga and former prime minister Shearer injured ten
on their own initiative. The election will be held under a
state of emergency, however, and Manley can be expected to use
his broad temporary powers to intimidate the opposition and
even to carry out massive arrests if he deems it necessary to
ensure his re-election.
There have been other scattered incidents, apparently 25X1
instigated in most cases by members of the ruling party acting
Manley has been stressing the theme of "national 25x1
unity against imperialism," and his attacks on the A-could b
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ecome mothe CIA--could become more pointed.
ARGENTINA: Possible Wage Increases
The Argentine government is preparing to announce
wage increases in an effort to reduce labor restiveness, which
has become serious in recent months.
Economy Minister Martinez de Hoz earlier this month
said the ruling military junta would allow "selected" pay in-
creases by the end of the year. A general wage hike of some
12 percent last September has already been wiped out by cost-
of-living increases totaling nearly 20 percent in September
and October.
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President Videla late last week reportedly approved
a proposal that would allow raises for "practically all" pri-
vate-sector unions. The increases are to be retroactive to
November 1.
In recent months, labor dissatisfaction has resulted
in several serious challenges to the junta's ban on all strike
activity. Electric power workers recently staged a series of
strikes and slowdowns; port workers have engaged in a slowdown
in recent weeks; and thousands of auto workers walked off their
jobs some months ago.
Although the new pay boost will provide short-term
help for the junta's problems with labor, it will hurt in an-
other respect. The granting of a wage increase will be seen as
a concession and eventually will invite challenges from labor
and others who see the 'unta's position as weakening. 5x1
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