NATIONAL INTELLIGENCE DAILY THURSDAY 23 AUGUST 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000400020087-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 22, 2016
• Document Release Date: June 11, 2010
• Sequence Number: 87
• Publication Date: August 23, 1984
• Content Type: REPORT

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(DCPgS/CIG ..
~Ylk 285
Director of
Central
Intelligence
nra~or~an~ell~gence Daily
Thursday
23 August 1984
CPAS N/D 84-198JX
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Ug'L~ A uSt 1984
?py ? ~ 5
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Top Secret
Contents
Poland: Amnesty Ends ..............................:................................
Africa: Reactions to Libyan-Moroccan Union ............................ 3
Israel: Weighing Emergency Economic Measures ...................... 4
Romania: Fortieth Anniversary Celebration ................................ 5
Liberia: Tensions Increase .......................................................... 6
West Germany-Poland: Foreign Minister Schedules Visit ........ 7
China-US: Reaction to Textile Rule Change ..............................
India-Sri Lanka: Stance on Intervention .....................................
Iraq-Jordan: Impasse in Pipeline Negotiations ..........................
Australia: Election Budget ......................................................... 10
Top Secret
23 August 1984
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Top Secret
POLAND: Amnesty Ends
The regime and released Solidarity leaders are engaged in
delicate maneuvering to determine whether any form of
accommodation is possible.
The government yesterday reported that only 585 of the 652 political
prisoners have been released, but an official suggested the final
results would not be known until the end of this week. According to
Western press reports, the authorities have dropped charges against
Lech Walesa's priest and have not intervened to prevent celebrations
of the amnesty.
Released Solidarity leaders say they will not give up the struggle for
independent unions but add that they need time to assess how to
proceed. One has told the US Embassy that the opposition has to
develop institutions to last over the long term and to avoid haphazard
moves he said characterized the underground's strategy during
martial law.
Premier Jaruzelski and other regime spokesmen have repeated their
warnings that they will not permit a return to anarchy: Local officials
have already warned several Solidarity leaders to stop their political
activities.
Comment: The authorities hope that their warnings and popular
resignation about the futility of open opposition will temper the
attitudes and activities of the released prisoners. They probably are
prepared to tolerate some activities by small groups and
contributions to the widespread underground press, but not large
symbolic reunions or efforts to reestablish contacts with workers.
The former Solidarity leaders are not likely to agree on a coordinated
strategy for the time tieing. The individuals have long held differing
opinions on how hard to press the regime. They are likely to debate
informally on Walesa's status as well as on whether the opposition
should change tactics and subvert the legal unions. Each of the
prominent leaders is likely to focus on his own region and test the
authorities' toleration for overt political activities.
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AFRICA: Reactions to Libyan-Moroccan Union
North African countries are dismayed by the unity agreement
between Libya and Morocco, but Rabat still plans to hold a
referendum on the treaty on 31 August.
The US Embassy says Algeria sees the union as a tactical move by
King Hassan to block Algerian efforts to promote regional unity and
end the Western Sahara conflict. Algeria believes its friendship treaty
with Tunisia and Mauritania is the vehicle for achieving those goals.
Tunisian officials acknowledge the agreement's call for unity but
emphasize Tunis's commitment to its treaty with Algeria. The
Egyptian Foreign Minister calls the union "a joke" and says Hassan
will suffer a serious loss of credibility by linking himself to Libyan
leader Qadhafi.
According to the US Embassy in Rabat, Moroccans overwhelmingly
support the union as a move to defend Morocco's position on
Western Sahara.
Although Tripoli is portraying the union as .the first step in Qadhafi's
cam ai n to unif the Arabs S ria is i norin a Lib an invitation to
join.
Comment: Hassan is a master manipulator of opinion in Morocco and
will see to it that the union receives strong support in the referendum.
He may, however, be underestimating the extent to which his alliance
with Qadhafi will jeopardize his support in the OAU on the Western
Sahara issue. Qadhafi is likely to find that no other state will join his
latest unity drive. Libya's ally Ethiopia has already questioned
Qadhafi's judgment in joining with a supporter of the US.
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ISRAEL: Weighing Emergency Economic Measures
Finance Minister Cohen-Orgad is considering emergency
economic measures in response to the continued deterioration
of the economy.
Press reports state that the proposals include a $1.5 billion cut in the
government budget, imposition of new taxes, and a 50-percent
increase in the price of basic commodities and fuel. The Finance
Minister is also considering reforms in employee cost-of-living
allowances.
Cohen-Orgad intends to proceed with his plans, regardless of the
status of negotiations to form a new government. He reportedly may
invoke the government's emergency powers to carry out the plan if
the Knesset rejects his proposals. The measures would then expire in
three months, unless the Knesset reconsiders.
The proposals are aimed at curbing inflation and improving the
balance of payments. The consumer price index increased by
12.4 percent in July, and the annual rate of inflation for the first seven
months of the year now stands at about 380 percent.
The Bank of Israel acknowledged last week that its foreign currency
crisis is much more serious than previously reported. Foreign
exchange reserves declined in July to $3.1 billion.
Comment: If implemented, the measures will reduce living standards
and increase unemployment. Leaders of Histadrut, Israel's large trade
union organization, are already upset about recent surges in the
unemployment rate and probably will not cooperate in a government
austerity program. In the past, finance ministers have resigned when
measures to deal with economic deterioration have proved to be
unpopular.
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Top Secret
ROMANIA: Fortieth Anniversary Celebration
President Ceausescu will use the 40th anniversary of Communist
rule to strengthen his international prestige, but widespread
economic hardship and social malaise continue to weaken his
domestic standing and increase Romania's vulnerability fo Soviet
influence.
Representatives from more than 100 countries will attend the
ceremonies today. The US and most NATO countries are sending
ambassadors, and.East German leader Honecker, Chinese President
Li Xiannian, and perhaps PLO chief Arafat are coming. Moscow will
be represented by Politburo member Vorotnikov.
Comment: Food and energy shortages have moderated somewhat
since last winter, but they remain serious, and supplies probably will
not improve soon. Adverse weather has dimmed harvest prospects.
Continuing layoffs and pay cuts for failure to meet overambitious
production targets are adding to the population's misery.
Public reaction has been limited mainly to grumbling, sporadic
antiregime pamphleteering, and increased worker absenteeism.
There also have been new signs of restiveness among the Hungarian
minority.
Romania has recently obtained Soviet agreement to increase
deliveries of several raw materials-possibly including oil-partially in
return for further investment in Soviet projects to develop raw
materials. If fully carried out, these arrangements could increase
Romanian economic dependence on the USSR. Moscow almost
certainly would hope for more cooperation in foreign policy matters.
Ceausescu, however, is unlikely to abandon the independent behavior
that has become the hallmark of his regime.
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Top Secret
Monrovia remained tense yesterday following clashes between
the armed forces and antiregime students during Head of State
Doe's address to the Interim National Assembly.
Soldiers reportedly injured some students when they fired into the
crowd and beat several demonstrators who were protesting the arrest
of opposition leaders accused of coup plotting. Doe afterward closed
the university and dismissed its administration, claiming the
institution fostered political opposition.
Comment: Doe appears unaware or unconcerned that these actions
have eroded the public good will he generated last month by ending
the four-year ban on political activity. His speech to the Assembly
suggests that several opposition parties will soon be banned. Doe
apparently is also considering using threats-real or imagined-to
his regime as a pretext to delay further or even to cancel the return to
civilian rule scheduled for January 1986.
Additional arrests of political leaders will further fuel public
grumbling. Opposition parties remain in disarray, however, and are
unable to fight Doe's moves. Student resentment continues
unabated, but activists probably want to avoid a replay of the Army's
overreaction yesterday.
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WEST GERMANY-POLAND: Foreign Minister Schedules Visit
West German Foreign Minister Genscher reportedly plans to visit
Poland from 21 to 23 November. He will be the first high-level
Western visitor there since martial law was imposed in December
1981. Other Western Allies also favor resuming high-level contacts in
response to the Polish amnesty. Both Greek Prime Minister
Papandreou and Italian Foreign Minister Andreotti are considering
Comment: Genscher's trip. is part of a major effort by Bonn to
maintain ahigh-level dialogue with Eastern Europe. West German
officials admit that this goal has received a higher priority since INF
deployments began, because of Moscow's cautiousness in pursuing
improved relations with the West. Although Poland recently has
supported Moscow's charges that revanchism is on the rise in West
Germany, Genscher probably is encouraged by Warsaw's willingness
to host him despite the Soviet campaign. Other NATO Allies share
Bonn's view that better political and economic ties can ease East-
West tensions and encourage further liberalization in Poland.
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CHINA-US: Reaction to Textile Rule Change
China has joined the ranks of textile exporters protesting a US
proposal to change its method of determining the country of origin of
textile imports. Beijing formally warned last week that it will not
comply with the rule change, which it believes violates both
international and bilateral agreements on textile trade. The Chinese
imply that the unilateral rule change would disrupt its trade
relationship with the US. According to the US Embassy in Beijing,
they estimate that the change could cost them 100,000 jobs and
$300 million in trade.
Comment: Textiles are an important part of China's trade with the
US-representing nearly half of its $1.5 billion in exports during the
first six months of this year. The US proposal may provoke a
repetition of Beijing's embargo in 1983 on selected US goods. The
most likely candidate for any retaliation would be grain, which
accounted for 24 percent of China's $1 billion worth of imports from
the US through June. Other possibilities are logs and synthetic fibers.
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`Top.`Secret
Tamil' Nadu
Ara6ran
Sea
7'am~il re
Guff
of
Mannar
-Top Secret
Banglay e
23'i4ugust 1984
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Top Secret
A senior Indian official has told the US Embassy that New Delhi will
limit itself to urging a political settlement between Colombo and Sri
Lanka's Tamil dissidents, despite growing demands from India's
Tamil leaders for direct Indian intervention. Western diplomats say
President Jayewardene believes that India may step up aid to
dissident Sri Lankan Tamils or intervene militarily. Sources of the US
Consulate in Madras confirm that the government of Tamil Nadu
State is permitting the shipment of arms to Sri Lankan Tamils even
after recent agreements between Colombo and New Delhi to stop the
flow.
Comment: New Delhi would directly intervene in Sri Lanka only as a
last resort, if security there deteriorated sharply and resulted in a
major influx of Sri Lankan Tamils into India. The Indian Government
probably would prefer to stand by its agreement with Colombo.
Nonetheless, New Delhi is unlikely to risk a political backlash from
Indian Tamils by choking off their aid to Sri Lanka's Tamils.
IRAD-JORDAN: Impasse in Pipeline Negotiations
A senior representative of the prime contractor for the proposed Iraq-
Jordan pipeline has advised an official of another firm that his
company is no longer participating in the project, according to the US
Embassy in London. The action is a result of Baghdad's insistence on
US security guarantees for the pipeline and on favorable financial
terms that the US and the banks will not provide. The representative
says his company will reconsider if the Iraqis are willing to
compromise.
Comment: The. contractor may be taking this position as a
negotiating ploy to obtain concessions from Iraq. The other firm is
likely to have passed the comments on to Baghdad. With progress
being made on the Iraq-Saudi Arabia pipeline and a second Iraq-
Turkey line, Baghdad probably believes it can let the impasse
continue until its demands are met.
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AUSTRALIA: Election Budget
Canberra's budget for fiscal year 1984-85, released on Tuesday,
contains new expenditure and revenue measures intended to
encourage economic growth and cater to important interest groups.
Press reports highlight incentives to private investors, increased
social benefits, and tax cuts for middle- and low-income wage
earners. The budget calls fora 13-percent increase in total
expenditures. Revenue increases resulting from Australia's strong
recovery are expected to keep the deficit to $5.7 billion, a decline of
more than $1 billion from last year.
Comment: Through increased social spending, the budget counters
charges by Labor's left wing that the "Hawke conservatives" have
abandoned the party's social mandate. The budget tax cuts will pacify
organized trade unions-Labor's most important constituent. By
making gestures to business and labor, the budget improves Prime
Minister Hawke's chances in early elections expected late this year or
early in 1985.
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Middle East -Inexplicably large number of floating oil drums reported off North
Yemen's Red Sea coast where mines have exploded ...adding to
delays as ships maneuver to avoid them ...possibly set adrift to
generate confusion among minehunters.
Americas -Nicaraguan workers at state-owned brewery staged strike this
week to protest low wages ...first stoppage since right to strike
restored on 6 August ...Sandinistas will have to negotiate
In Brief
carefully to avoid repetition elsewhere.
- Tanzania's inability to pay oil bills for last ear rom tin ma'or
suppliers to delay new shipments
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may prompt repeat of oil crisis of a year ago.
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Terrorist Watch
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French naval forces, according to the US defense attache in
Paris, increased harbor security in Toulon this month because
of a reported terrorist threat against French and US naval.
forces there. It is uncertain whether this threat is connected
with the rash of bombings carried out this month in
southeastern .France by M-5, a previously unknown group.
- Recent reforms in the Italian preventive detention system may
result in the release of up to 300 accused terrorists. The
possible releases worry Italian security authorities, because
they would jeopardize recent successes in combating
terrorism.
continued
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