NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000500020015-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: June 16, 2010
• Sequence Number: 15
• Publication Date: October 4, 1984
• Content Type: REPORT

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,M otrector or Tep,Geer
Centr
Q.LTJ~ me lial:_:
OCPAS/CIG,
CY'.S .477-486
1-oa'
~o 0
National Intelligence .Daily
Thursday
4 October 1984
4 October 1 84
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 Egypt-Iraq-Saudi Arabia: Seeking Renewed Relations ............ 1
Poland: Views on IMF Membership......... ... ........... ..................... 2
Kampuchea: Military Activity ...................................................... 3
Peru: Jeopardizing Credit ................................. ........................:. 4
Notes
Persian Gulf: Quiet Anticipated for Shia Holiday ......! .................. 5
Netherlands: Problem for COCOM Enforcement. ....................... 6
Mozambique: Cease-Fire Talks .................................................. 6
Bolivia-US: Concessions Offered for Aid ..................................... 7
Cyprus: Turkish Cypriot Activity ............................................... 7
EC: Budget Settlement ............. __. 8
In Brief 9
Special Analyses
USSR: Possible Central Committee Plenum .............. 1................. 12
India: Gandhi's Political Reverses .............................i.................. 14
Ton Secret 25X1
4 October 1984
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Comment: Cairo believes restored relations with Baghdad, which
spearheaded the Arab League decision to isolate Egypt, would give
momentum to its reintegration into the Arab fold. Until now Cairo has
maintained that the timing and circumstances of renewed relations
are up to Baghdad.
Yamani's visit to Cairo was planned before Jordan's decision, but his
meeting with Egyptian President Mubarak was attended by the head
of the Saudi Interests Section and is the first Cabinet-level meeting
with Egyptian officials since the Camp David accords. Saudi Arabia
probably would not obstruct an Iraqi move to restore ties, but it and
the other states of the Persian Gulf are unlikely to follow suit without
Baghdad would prefer not to restore ties with Cairo luntil the Arab
League approves Egypt's reintegration. Such a consensus is unlikely,
however, and Iraq may soon restore relations on itslown-but
possibly after a second Arab state does so with limited repercussions.
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POLAND: Views on IMF Membership
Warsaw increasingly believes that me
International Monetary Fund and Wor
Poland's economic recovery, but som
mbership inl the
ld Bank is crucial to
e top officials are wary of
Poland has based its strategy for economic recoveryjon the hope of
receiving substantial credits from the IMF and World!Bank by mid-
1985, Poland's recent] amnesty was 25X1
intended to influence Western countries to allow Polish membership
in both organizations. 25,X1
Key officials reporte
conditions that coul
continue to balk at
dly are increasingly willing to accept IMF
d lead to further economic reforms. Others
Ise IMF scrutin and at tou her 25X1
austerity measures,
The Poles reportedly do not expect Moscow to oppose their
membership because it is not prepared to assume Warsaw's financial
Comment: Although the Poles now appear to be more realistic about
the benefits of IMF membership,. they still believe they can get new
credits quickly. Even if processing of Poland's IMF membership
began today, technical problems, including Poland'sjsizable overdue
debt payments, would probably delay entry until 1986.
Moreover, Warsaw's continued reluctance to impose tough austerity
measures would hamper negotiations for sizable Fund credits.
Poland's failure to obtain large amounts of Western credits over the
next five years will severely retard the growth of imports necessary for
economic expansion.
The Soviets are unlikely to provide the, necessary aid. Although they
will continue to object to further Polish political concessions, they
probably will not block Warsaw's entry.
-Too secret
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their positions before the dry season from Novem I bar to May.
The US Embassy in Bangkok reports heavy fighting near the
Communist guerrilla stronghold at Phnom Melai this week.
KAMPUCHEA: Military Activity
Combat activity Is Increasing as Vietnamese and Communist
Democratic Kampuchean guerrilla forces attempt to strengthen
25X1
25X1
25X1
The Viet annese have steoned tin sween and ambush operations
the area.
Comment: The Vietnamese in the past have withdrawn most of their
units to the interior during the rainy season. This year, however, they
have maintained steady pressure against the major resistance bases
along the Thai border. This strategy has stymied non-Communist
forces and has kept Communist operations well below last year's
levels. Intense localized fighting is likely over the next few weeks as
the Vietnamese attempt to prevent the guerrillas from gaining
25X1
To S t
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Peru's refusal to meet Interest payments on its debt will
jeopardize foreign financial support for the rin nine
months of President Belaunde's term.
Central Bank officials recently indicated that they do+not intend to
draw on Peru's $1 billion in foreign exchange reserves for debt
payments until foreign bankers release the final $10d, million
installment of an embargoed loan. According to the S Embassy
President Webb reportedly is resisting pressure from a Finance 25X1
Minister to disburse interest paym n until the over'nment moves to
reduce the growing budget deficit.
25X1
Some banks have lowered the status of Peruvian loans and have
stopped recording the accrual of interest on them, according to the
Embassy. Moreover, the $2.5 billion refinancing plani for this year,
originally scheduled to be signed on 31 August has been postponed
until at least 10 October.
Comment: Lima's pressure tactic is likely to backfire. The unpaid
interest and the disagreement within the government will complicate
reconciliation with the IMF and make foreign bankers more reluctant
to release the $100 million loan, renew trade credit, and refinance
maturing debt. F- i
If cash problems intensify, Belaunde might suspend talks with
bankers. As a last resort, he could also declare a moratorium on
foreign debt payments in hopes of rallying nationalist sentiment to
improve his party's standing among voters.
Too Secret
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t oo aecrer
Saudi
Kuwbit
-*'Kuwait
Iran
Manama ~Bahraln
0. Persian Gulf
*Doha
Qatar
750,000
500.000
250,000
416Percent Shia
Note: Figures for Saudi Arabia are
for the Eastern Province only.
Shies represent five percent
total population.
Gull of Oman
Top Secret
25X1
4 Oct6ber-1984
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Abu Dhabi
adm;e
tme/1 I
LOman
l
Ash Sharqiyah f
(Eastern Province)
Oman
ao dew bey'
P. D. R. Y. Admnistran.e
(South Yemen)
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PERSIAN GULF: Quiet Anticipated for Shia Holiday
Security officials in the Arab states of the Persian Gulf are alert to
possible unrest during the Shia celebration of Ashura which begins 25X1
tonight, but do not expect disturbances. Kuwaiti
authorities have deported more than 900 people-most o t em
foreign Shias-since April and have warned community leaders not to
encourage demonstrations. Bahrain has banned foreign Shia religious
teachers from entering the country. The Shia community there hopes
its good behavior during the holiday will win the reopening of its
educational center and the release of 11 imprisoned leaders of the
Shia Dawa Party. 25X1
Comment: Ashura-commemorating the martyrdomlof the Prophet's
grandson at Sunni hands-has erupted in antigovernment violence in
the past, but this year most Shia communities appearlto want to avoid
any confrontation with government authorities. Shia leaders in Kuwait
may still revere Khomeini and his revolution, but they hope to gain
seats in National Assembly elections next year. In Saudi Arabia,
clashes with the Shias in 1979 and 1980 led the regime to increase
spending on development in Shia areas and to improve relations with
the Shia community.
Top Secret
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Ministry, which had hoped the case would serve as a warning to
potential diverters now fears it might have the opposite effect.
NETHERLANDS: Problem for COCOM Enforcement
The ruling last week by a Dutch court on exports of sensitive material
may have a negative effect on Dutch efforts to stop diversions of
COCOM-controlled equipment. A Dutch firm was acquitted of
charges that it illegally exported high-resistant steel pipes for a
uranium enrichment plant in Pakistan. The judge held that no export
license was required because the pipes were not designed specifically
for use in a nuclear facility and were not strategic. The Foreign
Comment: Although this case did not involve exports to a Communist
nation, it may be used as a precedent for challenges to COCOM
controls. The greatest effect may be on COCOM rules that control
equipment designed specifically for certain functions-for example,
cause major divisions within the ruling FRELIMO party.
on terms for a settlement. Pretoria continues to back insurgent
demands for a government of national reconciliation, while Maputo
has offered only a general amnesty. A South African military presence
in Mozambique would strain Maputo's relations with Moscow and
Havana-both of which maintain a large number of advisers in
Mozambique-and further damage Machel's remaining credibility as
Comment: Although the insurgents acknowledged Somora Machel as
the President during the talks, both sides probably remain far apart
MOZAMBIQUE: Cease-Fire Talks
The Mozambican Government and the Mozambican !National
Resistance insurgents yesterday formally agreed to negotiate a
cease-fire following South African-mediated talks in' Pretoria. A
commission of Mozambican Government and insurgent
representatives chaired by a South African official now is in session.
The South African Foreign Minister announced the commission will
set a date for the cease-fire that, South African troops will help to
Top, Secret
6 4 October 1984
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I op ;Secret
Bolivian President Siles has promised the US Ambassador that he
would remove Communist Party members from his government,
arrest major narcotics traffickers, and carry out tough economic
measures in return for $100 million in US economic assistance. Sites
argues that such aid would enable him to complete his term and
ensure the establishment of democracy. The US Embassy predicts
that Sites, facing growing pressure from the military,;will be ousted
unless he moves to stem the deterioration in the economic situation.
Comment: The danger of runaway inflation is growing, and divisions
in the labor movement reduce labor's ability to challenge unpopular
moves by Siles. Together these factors strengthen the likelihood that
he will agree to some long overdue austerity measures. Nevertheless,
renewed pressure by labor could cause him to fail to follow through.
Siles probably is increasingly willing to oust the Communists, whose
usefulness has diminished following their removal from the leadership
of the national labor confederation. The President recently has taken
According to a m assy, the ur is
Ambassador also said that the Turkish Cypriot Constituent Assembly
was scheduled to meet this week and at some point [would begin
discussion of a new draft constitution.
Comment: Despite Turkish Cypriot assurances that nothing
significant will take place before the next round of UN-sponsored
talks on 15 October, the Turkish side is probably laying the
groundwork for elections some time this fall. The scheduling of
elections-or any developments in that direction-almost certainly
would be fatal to the UN peace initiative and would be likely to lead to
T
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 EC: Budget Settlement
The agreement of EC Foreign Ministers on a supplementary budget
for the rest of the year will give the Community onlyia short respite
from its financial woes. The agreement on Tuesday provides almost
$750 million in emergency revenues-interest-free loans from
member states to be repaid when new Community tax measures
become effective in 1986. The plan is contingent on' the EC Council's
final approval of new regulations to curb agricultural spending and on
the European Parliament's release of a budget rebate of nearly
$550 million to the UK. The European Parliament will consider the
rebate later this month, when it takes up the draft budget for next
year.
Comment: The 1985 budget continues to provide expensive
agricultural price supports and will almost certainly cause further cost
overruns. These will require special steps again next year. EC
attempts to control farm spending are unlikely to prove effective, and
the Community probably will repeat its cycle of budgetary problems in
1986 and 1987.
To in Secret
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In Brief
Americas - Salvadoran guerrillas reinfiltrating area near naval base with eye 25X1
Middle East - Iraqi media announced arrival yesterday of Deputy Chairman of 25X1
Soviet Council of Ministers ... will visit dam being constructed by
Soviets ... may discuss ener ro'ects and details of reported
$2 billion Soviet loan. 25X1
insurgentsin
capital thinking again of strikes against US facilities, including
Embassy.
- USSR reportedly has asked to open consular office in Trinidad
and Tobago ... first indication of Soviet interest ! .. some
Trinidadian officials interested in expanded trade,' but domestic
Trudeau's, but they are unlikely to leave UNESCO.
partisanship ... demarche made in attempt to prevent US
withdrawal from organization ... Tories' tone tougher than
- US Embassy says Saudi Arabia will appoint former Health Minister
Gosaibi, fired for writing poem critical of King, as ambassador to
Bahrain ... important diplomatic post ... appointment represents
unusually quick political rehabilitation.
cont nued
ToTol 25X1
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up Secret
Eastern Europe - Publicity about some 43 East German asylum seekers in West
German Embassy in Prague threatens resolution of issue ... East
Berlin wary of Soviet concern over humanitarian concessions ...
Bonn sensitive ni hm nt given some previous asylum
seekers. I
- Soviet official reports sunflower seed crops-providing vegetable
oil for consumers and protein for livestock-affected by blight ...
says USSR must import million tons of vegetable oil and
500,000 tons of soybean meal ... Brazil probably will benefit most
East Asia - China conducted underground nuclear explosion yesterday ...
yield about 20 kilotons ... first Chinese nuclear test this year,
30th overall, and eighth underground test ... has conducted about
one test a year since 1979 ... no atmospheric tests since 1980.
To S t
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Top Secret
Western Europe - A group calling itself the Fighting Communist Cells has
claimed responsibility for the recent bombings in Brussels of
two multinational firms that manufacture items used with
NATO cruise missiles. A communique suggests that terrorist
attacks against other firms involved with cruise missiles also
may be planned.
- Greek police have strengthened security at US installations,
official residences, and businesses after receiving information
that terrorists plan to attack "an American target" in Athens.
Most likely the terrorists are members of 17 November, a
Greek leftist group responsible for assassinating a US naval
officer last year. I
Top Secret
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25X1
25X1
October-rather than before the end of next week, as earlier
reports suggested. Soviet Ambassador Dobrynin told a US
official on Monday that he would not be attending the meeting
If Dobrynin is correct, it may be that this year's grainIharvest -the
sixth consecutive below-average crop-has prompted an
extraordinary review of Soviet agricultural policy. Such a review could
hurt Mikhail Gorbachev, the party secretary in charge of agriculture.
On the other hand, his high profile in recent months suggests that he
has not suffered politically from this harvest, and a Central Committee
plenum on agriculture would give him an ideal o ortunit to
demonstrate his leadership abilities.
deal with personnel changes. Although no specific personnel moves
have been tied to the plenum, Premier
Nikolay Tikhonov, 79, will be replaced by Vitaliy Vorotnikov, the
Russian Republic Premier. The recent illness of 83-year-old Vasiliy
Kuznetsov, First Deputy Chairman of the Supreme Soviet Presidium
and a candidate member of the Politburo, suggests that he too could
relinquish his posts. Among the younger leaders, Vladimir Dolgikh,
the 59-year-old party secretary in charge of heavy industry and a
possible Chernenko ally, seems a likely candidate for; promotion from
It remains unclear whether any leadership changes would include
Chernenko. His recent public appearances and the unusual tributes
paid to him on his birthday last week-particularly his public
designation as "Supreme Commander in Chief" by Defense Minister
Ustinov-suggest a strengthening of his political position. On the
other hand, these accolades may be an effort to pave the way for
honorable retirement. 25X1
continued
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Gandhi's Political Reverses
Major political problems In an election year have forced Prime
Minister Gandhi to halt efforts to bring oppositionL led states
under her control and to divide Sikh dissidents. To regain the
initiative, she probably will step up her party's efforts to splinter
the emerging opposition alliance that threatens her prospects In
the election, which should be called before February, according 25X1
to the Indian constitution.
Gandhi probably hoped that restoring Chief Minister Rama Rao to 25X1
power in Andhra Pradesh would stem the loss of su ort for her party
in the southern states. 25X1
Most Indian observers a p re ice a pro es
voting in Andhra Pradesh against the Congress Party's involvement in
Rama Rag's would carry over into the national parliamentary
elections.
Fallout from Gandhi's dismissal of Rama Rao, however, probably has
already damaged her strategy in the south beyond repair. Reactions
in the regional party that rules neighboring Tamil Nadu State have
caused a split that may seriously hurt its leader-a longtime Gandhi
ally. Indian analysts estimate that party unity there probably would
have assured her of at least 20 parliamentary seats, which she may
now lose.
Gandhi's removal of Army guards last week from the' Sikhs' Golden
Temple at Amritsar probably was aimed at undercutting Sikh unity
against her government. A coalition of Sikh factions had threatened
to march on the Golden Temple on Monday. She is likely to postpone
the controversial issue of a political settlement with the Sikhs until
Renewed violence from militant Sikhs this week maylmake Gandhi's
gesture toward moderate Sikhs fruitless. The government was forced
to send paramilitary troops into the Golden Temple after followers of
continued
To
ISecret
b
o
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divisive influence in the opposition if, capitalizing on the wave of
sympathy that followed his ouster, he renews his claims to be a
national spokesman for the opposition. His past efforts alienated
25X1
Opposition Strategy
Opposition party leaders are portraying Rama Rao's!return to power
as a victory for their protest campaign against his ouster. Andhra
Pradesh was the third state since May in which a governor appointed
by Gandhi dismissed an elected chief minister and his government.
The leaders fear she might t for control of other opposition-led
states before elections. 25X1
Gandhi probably hopes Rama Rao's restoration has deprived the
fractious opposition parties of the only issue that has united them
since her return to power in 1980. Rama Rao could even become a
Without a single unifying issue, the diverse opposition may fail to
achieve a broad, durable alliance. The opposition is now likely to
focus anew on such criticism of Gandhi's government as the division
of authority between national and state governments, law and order
problems, corruption and unresolved re ional grievances in Assam
and Tripura States.
Prospects for National Elections
Gandhi's main concern is to encourage divisions in the opposition. If
she partially succeeds and faces an alliance including only some of
the opposition parties, she probably will calculate that national
approval of her crackdown on the Sikhs in Punjab will net enough new
votes from northern Hindus to offset the loss of support from
If, however, Gandhi concludes that a broadly unified 'opposition or her
own weakened standing might cost her the election, she may move to
postpone it. She probably is reluctant to use a declaration of a
national emergency to do so because it might galvanize the
opposition to unite, as it did in 1975. She may choose instead to 25X1
invoke a constitutional loophole allowing her to Postpone elections
15 4 October 1984
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