NATIONAL INTELLIGENCE DAILY MONDAY 20 AUGUST 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000400020074-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 22, 2016
• Document Release Date: June 11, 2010
• Sequence Number: 74
• Publication Date: August 20, 1984
• Content Type: REPORT

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Director of
Central
Intelligence
National Intelligence Daily
Monday
20 August 1984
nrPaSJCIG
cY# .285
CPAS NID 84-195JX
20 August 1984
Copy 2 8 5
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Top Secret
Contents
Red Sea: Developments in Mine Clearing .................................. 1
Nicaragua: Church-State Conflict .............................................. 3
Philippines: Antigovernment Demonstrations Planned ............ 4
China-US: Military Relations on Track ...................................... 5
West Germany: Resentment Over West Berlin .......................... 6
Special Analysis
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Top, Secret
People's
Democratic
Republic of Yemen
` Top Secret
Y-,-..,1-`AOEN Gulf of Aden
Ethiopia
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Top Secret
RED SEA: Developments in Mine Clearing
No mines were discovered during weekend minesweeping
operations.
The US Navy swept the approaches to Jiddah, Saudi?Arabia, over the
weekend, and the Saudi Government is satisfied that there are no
armed mines in the area. French minesweepers are scheduled to
begin their operations inside the port area today. Meanwhile, bad
weather continues to hamper operations off the Egyptian coast, and
Egypt has decided not to permit minesweeping operations in the
vicinity of Ra's Shukhayr.
Comment: Cairo probably is concerned about the possibility of
damage to the underwater oil pipelines that cross from Ra's Shukhayr
to the At Tur oilfields in the Sinai.
Soviet Operations
The Soviet helicopter cruiser Leningrad and an accompanying
destroyer passed through the Turkish Straits yesterday en route to an
expected arrival on 23 August in the Red Sea. These ships will join the
Soviet minesweeper and diving tender that passed through the Suez
Canal over the weekend and are now headed for the mouth of the Red
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continued
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Top Secret
The four Nicaraguan priests ordered to resign their government
positions by the end of the month will defy the Vatican, thus
aggravating local church-state tensions.
The Sandinistas' official newspaper says the churchmen, including
Foreign Minister D'Escoto and two other Cabinet members, will
accept any punishment prescribed by Rome. The four have been told
by Managua Archbishop Obando y Bravo that they have until the end
of August to comply.
The order follows growing antipathy in the government against
Obando, which has included Sandinista allegations that the
Archbishop has been involved in improper political activities. The
country's nine bishops are demanding that the government-
controlled news media stop attacking Obando, who recently
expressed support for opposition demands for free elections.
According to the press, the Archbishop also implied that parishoners
should not vote for the regime.
Meanwhile, the government has announced it will prosecute a
Nicaraguan priest for counterrevolutionary activities. Some 10 foreign
priests were expelled from Managua in July after some had marched
in his support.
The Archbishop has charged that the government has denied visas to
seven foreign clergy who were coming to work in Nicaragua. Earlier
this month, the regime deported a visiting Venezuelan bishop shortly
after his arrival in the capital. The US Embassy says the Sandinistas
later apologized after the Venezuelan Embassy protested the
incident.
Comment: Defiance of the Vatican will undermine Sandinista claims
that there is no fundamental incompatibility between their brand of
Marxism and Catholicism. The regime probably is willing to risk
international disapproval of its actions, believing that a concession to
its strongest domestic foe would be viewed at home as a sign of
weakness and invite additional challenges.
The government's harassment of the visiting bishop probably was
intended to indicate its displeasure at the Venezuelan church
hierarchy's support for Obando. Opposition political leaders will soon
visit Latin America and Western Europe and will try to capitalize on
Sandinista actions against the church.
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Manila
Bay
z"
anto Domingo
church
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Mi;a n a o
i
avao,,
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Manila
Assembly point
Planned route
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Top Secret
PHILIPPINES: Antigovernment Demonstrations Planned
Demonstrations in Manila tomorrow commemorating the
anniversary of the assassination of opposition leader Benigno
Aquino promise to be the largest and potentially the most violent
of any since last year.
An array of opposition groups will converge on Luneta Park tomorrow
from three locations around the capital. Reporting suggests that the
opposition hopes to assemble close to 1 million people by busing in
supporters from nearby provinces. Smaller demonstrations are
planned in other cities, including Davao, Cebu, Bacolod, and Angeles.
The Communist Party of the Phili ines's political front organizations
will participate in the rallies.
The military and police have been on alert since last week.
On Saturday, the Supreme Court ruled that the opposition's activities
could take place.
In recent weeks, violent c as es have
occurred when security forces enforced the "no permit" strategy, but
the Supreme Court's ruling suggests President Marcos will now have
to allow the demonstrations.
Should the government move against tomorrow's protest, however, it
would likely do so at the four assembly points-before the opposition
has a chance to bolster its forces by marching through the university
belt and the slum district.
Even if the opposition fails in its goal to assemble 1 million people-
which seems likely-and the regime permits rallies, at least some
violence is probable. The palace is within easy walking distance of
Luneta Park, and there is an outside chance Communist agitators will
provoke a march on the US Embassy.
Top Secret.
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Top Secret
CHINA-US: Military Relations on Track
Chinese military leaders are apparently pleased with the
progress being made in US-China military ties.
According to the US defense attache in Beijing, Defense Minister
Zhang was pleased with his June visit to Washington. Zhang and his
delegation reported positively on the visit to key Chinese
policymakers, including Party General Secretary Hu Yaobang.
Chinese defense officials reportedly pushed for the current China visit
by Navy Secretary Lehman as a demonstration of further
improvements in relations, despite Foreign Ministry objections to a
visit before the US elections.
Comment: Beijing appears resigned-for now-to not receiving the
most advanced US military technology but probably will begin
pressing US limits as the relationship develops. Meanwhile, the
Chinese remain extremely sensitive on the question of US arms sales
to Taiwan
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Top Secret -
East Germany's refusal to apply fully to West Berlin an easing of
travel restrictions between East and West Germany has reduced
the political benefits to Bonn of its recent credit guarantee to
East Germany and may complicate future negotiations.
Government spokesmen in Bonn say that some of the reduced
restrictions on travel that East Germany agreed upon in exchange for
a credit guarantee last month do not apply to West Berlin. These
include provisions lengthening visits in border areas from one to two
days and multiple-entry permits from three to six months.
The Kohl government has implied publicly that the Soviet campaign
against German "revanchism" is the reason. Officials claim the West
German negotiator had been led to believe the agreement would
apply also to West Berlin, but public Soviet displeasure over
improving intra-German relations forced East Berlin to reverse its
position.
Comment: This latest controversy over West Berlin has reduced the
political benefits of the agreement for the Kohl government by
creating the public impression of a careless or incompetent approach
to the negotiations. Still, the issue is unlikely to prevent Bonn from
pursuing additional agreements on such matters as travel, the
environment, and cultural exchanges.
Bonn almost certainly will concentrate on gaining equal benefits for
West Berlin in future talks, possibly by demanding written agreement
to that effect. This could complicate future negotiations in view of the
differing interpretations of the two countries on the ties between West
Germany and West Berlin.
The Quadripartite Agreement may complicate matters further. The US
Mission in West Berlin has observed that the differing treatment of
West Berlin may violate provisions of the Agreement. One paragraph
specifically states that permanent residents of West Berlin should
enjoy travel rights "comparable to those applying to other
persons ...." The Western interpretation has been that West
Berliners enjoy travel rights at least equal to those of the West
Germans.
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In Brief
process.
- Liberian Head of State Doe yesterday arrested two opposition .
party leaders and two members of disbanded military council for
"security reasons" ... provocative move could spark violent
demonstrations, increase coup plotting, and threaten electoral
... treated US call for summit as election ploy.
bulletin used by Secretariat officials, including Secretary General
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- UN Secretariat's press service under Soviet influence with 25X1
appointment of Soviet official in July ... selects items for internal
both contentious issues.
- Soviet President Chernenko reportedly plans to attend regularly
scheduled Warsaw Pact summit in Bulgaria in late fall ... main
topics expected to be Pact solidarity and contacts with West-
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Special Analysis
SOUTH AMERICA: Tenuous Financial Balance
Most of South America's debtor nations will encounter worse
financial conditions through the rest of this year. Although the
largest-Brazil, Argentina, and Venezuela-will have improved
trade surpluses, financial strains among the smaller debtors and
even Argentina will continue to grow. Argentina and the smaller
debtors will be particularly short of liquid funds in the second
half of the year-resulting from increased interest payments that
will fall due and from restricted foreign bank lending. They may
opt to use scarce financial resources for growth rather than
repaying foreign debt.
Official data indicate, that South America's trade surplus reached
$13 billion during January-June, a 50-percent improvement over the
comparable period in 1983. Brazil netted approximately $6 billion,
while Argentina and Venezuela netted about $3 billion each. The
smaller debtors-Bolivia, Chile, Colombia, Ecuador, and Peru-
accrued a surplus of only about $100 million all together because of
falling commodity prices.
Brazil's large trade surplus and access to foreign credit has eased its
liquidity strains, according to the US Embassy. Argentina and
Venezuela have resorted to tough import and foreign exchange
controls and delays in interest payments to prevent new shortages of
foreign exchange.
The Andean debtors, on the other hand, are suffering from depressed
exports and tight foreign credit, prompting Bolivia to suspend debt
servicing in June and Peru to miss its interest payment in July,
according to US Embassy reports.
Pressures To Intensify
foreign creditors are reluctant
to lend more money to the financially pinched debtors, which is
adding to their cash-flow difficulties in the second half of 1984.
- Argentina will be unable to get new loans to close its projected
$3-4 billion payments gap until it obtains an IMF agreement,
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- Chile will face difficulties in securing additional loans because
of poor repayment prospects, while the US Embassy reports
that Peru's failure to pay interest is making bankers cautious
about disbursing committed funds.
continued
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Top Secret
- Colombia's resistance to an IMF-supported program probably 25X1
will cause it to lose its existing credit lines
while Ecuador will be unable to obtain new 25X1
credit until it reaches a new agreement with the IMF.
Press and US Embassy reports indicate that officials of Peru, Bolivia,
Chile, Colombia, and Argentina are facing political pressures for
economic revitalization. Thus, they may begin to abandon or reject
austerity in favor of growth strategies that depend on increased
Higher interest rates are likely to add $500 million to South America's
debt service in the fourth quarter, an increase that Brazil and
Venezuela will be able to absorb, but one that will strap the small
debtors. Moreover, South American governments are concerned that
their new success in exporting to the US and other industrialized
countries risks provoking a further growth in protectionism there.
imports.
Implications for the US
Persistent financial difficulties throughout South America probably
will cut US sales to the region this year by $300 million from last
year's already depressed level of $10 billion. At the same time US
imports from the region are growing.
The smaller debtors may resort to unilateral action to relieve debt
payment problems. US Embassy reports indicate, for example, that
Santiago already has made veiled threats to suspend debt servicing
payments if interest rates or trade restrictions increase.
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Top oecrei
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