NATIONAL INTELLIGENCE DAILY MONDAY 22 JANUARY 1979

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81T00368R000100010039-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 27
• Document Creation Date: December 22, 2016
• Document Release Date: April 7, 2010
• Sequence Number: 39
• Publication Date: January 22, 1979
• Content Type: REPORT

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"" `';~ liirector of
l~~ ~` C t 1
en
ii
ra
~,~ .. ~~~ Intelligence
National Intelligence Daily
..Monday
22 January 1979
anuary
COPY ~~ .
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Situation Report
Vietnam: Changing Economic Aid
Relationships 3
Israel: West Bank Water 5
Afghanistan: Aid to Dissidents 6
Bangladesh: Economic Gains 7
Botswana: Meeting on Guerrillas 8
Peru: Moves Against Chile 8
UNCTAD: International Wheat Negotiations 9
Special Analyses
USSR: DoZZar Defense Activities Comparisons 10
Iran: Leftists in the Opposition 13
Overnight Reports 17
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in Tehran and Iranian military leaders may have helped
pave the ~yaz/ for the religious leader's return later this
Negotiat2ons between Ayatollah Khomeini 's lieutenants
large-scale bloodshed and that a military government
would have ZzttZe chance of aettina the economu moving
the miZitart' in genera?,?
pro a y rea Zzes t at a coup attempt zvouZd provoke
reports of increasingly widespread confusion and low
morale within the ranks of the military--including in
one elite Special Forces unit--in the aftermath of the
Shah's departure. According to press reports, several
thousand Air Force officers and enlisted men have gone
on a hunger strike to impress upon their superiors that
The Supreme Commanders Staff, however, has received
if he is not to delay further his return to Iran.
25X1
Prime Minister Bakhtiar's assertions that he will
not cede his constitutional powers to Khomeini have be-
come increasingly strident. Khomeini may have decided
to follow the advice of religious moderate Mohammad
Beheshti and Liberation Movement of Iran leader Mehdi
Bazargan that he avoid a direct confrontation with Bakh-
tiar and tolerate the Prime Minister's efforts for the
time being. While unlikely to retract his statement
that Bakhtiar's position is illegal, Khomeini may have25X1
they will not participate in a coup.
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The avoidance of a confrontation between Bakhtiar
and Khomeini's forces could help convince the military
that they too can work out an accommodation with the
religious group. At this stage, however, the Regency
Council and Khomeini's Islamic Revolutionary Council--
whose members are not yet known--have made little prog-
ress in resolving how the two groups will relate to one
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VIETNAM; Changing Economic Aid Relationships
Vietnam's invasion of Kampuchea u~iZZ force Hanoi
to rely increasingly on Soviet economic assistance, nozv
estimated to be at least $500 million annually. The
diversion of manpower and materials for military cpera-
tions in Kampuchea and heightened readiness along the
China-Vietnam border have boosted demand for imported
food and fuel and wi1,Z urther slow Vietnam's economic
performance. 25X1
Western donors are reassessing their aid programs
to Vietnam, both in protest against Hanoi's military
moves and in deference to relations with China. Japan--
Vietnam's most important non-Communist aid and trade
partner--is reviewing its aid agreement signed last
month for 150,000 tons of rice and $70 million in loans
and grants. The Dutch are considering freezing $25
million in unspent aid from previous programs. Although
Sweden has reportedly boosted its aid commitment for
1979 from $88 million to $92 million, Swedish Prime
Minister Ullsten said last week that Vietnam risks a
"reconsideration" of the aid it receives from Nordic
countries, and the aid question is likely to come up
for additional debate. Other Western donors and multi-~
lateral a encies are likely to reevaluate their programs
as well. 25X1
Among Communist countries, the USSR's closest East
European allies may feel compelled to increase their
estimated $125 million in annual aid to Vietnam by a
token amount and to give symbolic aid to the new
Vietnamese-backed government in Kampuchea. Several East
European countries have picked up some Chinese projects
in Vietnam in the wake of China's termination last year
of its estimated $300 million in annual aid to Hanoi.
Yugoslavia and Romania have been critical of Viet-25X1
nam's military move, but may reluctantl continue their
$5 million aid program to Hanoi. 25X1
3 Top Secret 25X1
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Next 1 Page(s) In Document Denied
Q
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Schematic View of Aquifers
wens
~~
h~e;:titerranear,? ~=
Sra ~_,,_
-,`s,_~
~ndstone 'aa
?` clays
salt water
water;` -- -
__ _- _.
i
water table without additional pumping
water.tahle after more pumping
border
Q..:= _.
limestone
aquifer
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Because Israel would Zose control of more than one-
third of its water supply if it withdrew from the West
Bank, Prime Mznzster Begin will almost certainZ~ stand
by his promise to retain Israeli control over water
rights in ang resolution of the West Bank controversy.
Israel aZreadz~ uses more than 95 percent of its fresh
water supply, and the most feaszbZe and least expensive25X1
means of augmenting that supply could only partially
meet grow2ng demand over the next several years.
Of Israel's total usable water resources, more than
half is provided by groundwater, mainly from two large
aquifers--water-bearing underground zones. The larger
of these lies under both the West Bank and Israel proper.
25X1
Agriculture will continue to be predominant in the
West Bank economy, and improved irrigation systems are
essential to its growth. If the Israelis did not con-
trol the use of water, such improvements would lower the
water table in nearby parts of Israel, dry up Israeli
wells, and increase salt water intrusion under Israel's
coastal plain. 25X1
Israeli experts have determined that the only sig-
nificant and relatively inexpensive supplementary source
of water is recycled sewage. Treated sewage from the
Tel Aviv recycling facility, now in operation about two
years, can be used on selected crops at one-eighth the
cost of desalinated water. Projected annual production
from this facility eight years from now is only 100
million cubic meters, less than 7 percent of present
resaurcesn The only other proposed facility, at Haifa,
is not yet even in the detailed planning stage.
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Tzvo Afghan dissident groups in Pakistan may now 25X1
be receiving support from Saudi Arabia and the
The Liberation Front claims to have 2,000 members
in Pakistan and a following of 60`000 to 70,000 people,
mostly in Afghanistan. The smaller, Pakistani-backed
group has 1,000 to 2,000 members. 25X1
Both organizations, reportedly convinced that the
Soviet presence in Kabul precludes a successful mili-
tary coup, are supporting tribal rebels active in
eastern Afghanistan. The two groups are badly divided
over who should replace the current Marxist regime. The
Liberation Front aims to return the former royal family
to power; the other o.r anization opposes restoration of
the monarchy. 25X1
We cannot confirm the dissidents? claims of Saudi
and Pakistani. support. but have no reason to doubt them,
The leader of the Liberation Front has close connections
in Saudi Arabia and several gulf sheikdoms. The Paki-
stani Government has at the least allowed the rebels
refuge and. has not made a strong effort to restrict their
activities.
A significant part. of the Army--the mainstay of
any Afghan Government--is already involved in combating
tribal unrest, now limited to remote areas. Continued
and intensified fighting against the tribes would further
strain the loyalties of the military, many of whom are
tribesmen. from the affected areas.
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Bangladesh is nom into its fourth year of good
economic performance. Favorable zveather~ greater poZiti-
caZ stability, and continued large-scale support from
foreign aid donors have contributed to agricultural and
industrial progress. Nonetheless most Bangladeshis re-
main desperately poor. 25X1
President Ziaur Rahman has emphasized rural pro-
grams and population control and has directed a gradual
reduction in government regulation of imports and
prices--except in foodgrain marketing. In the indus-
trial sector, the government has emphasized better use
of manufacturing capacity, completion of projects, and
a greater role for the private sector. Zia has had
trouble, however, getting economic policies fully imple-
mented because competent officials are scarce and admin-
istrative structures inadequate. 25X1
Foodgrain production has grown at a 3.3-percent
annual rate since fiscal year 1975, but Bangladesh will
be hard pressed to keep long-term foodgrain output ahead
of population growth. Despite record grain production,
per capita availability of foodgrain in Fiscal Year 1978
was probably lower than in the early 1970x. Many poor
people cannot afford adequate food--a more intractable
problem than growing or importing sufficient supplies.
Foreign donors and Bangladeshi officials have had diffi-
culty balancing the conflicting goals of high prices for
farmers, low prices for consumers reduced budget subsi-
dies, and lower grain imports. 25X1
Economic recovery has not eased Bangladesh?s severe
balance-of-payments problems. Imports are still two to
four times as large as exports, and foreign aid continues
to finance the bulk of investment and part of current
consumption. Bangladesh has also come to depend on grow-
ing remittances from overseas workers in Middle Eastern
countries. The gains in foreign exchange, however, have
been offset by a loss of trained personnel.
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BOTSWANA: Meeting on Guerrillas
Botswanan, Rhodesian, and South African officials
are scheduled to meet in Pretoria this week to discuss
the use of Botswana by guerrillas as a staging area.
The Rhodesians have, in recent weeks, become increasingly
concerned that the Botswanan military has been turning
a blind eye to Zimbabwe African People's Union infiltra-
tion of Rhodesia via Botswana and has been providing
logistic support for ZAPU. The South Africans believe
that recent terrorist incidents in northern South
Africa have also been mounted from Botswana. The
5ou.th Africans and Rhodesians will no doubt press Bot-
swana to enforce more rigorously its announced policy
of denying its territory for sanctuary and transit by
guerrillas. Botswana has but meager security forces,
and the government will find it difficult--if not
impossible--to comply with such demands.
PERUe Moves Against Chile
Peru on Saturday declared Chilean Ambassador to Peru
Bulnes persona non grata and officially recalled Peru's
Ambassador to Chile. The Peruvians also announced the
execution that day of a former Peruvian Air Force ser-
geant accused of having engaged in espionage for Chile.
After the Chilean Foreign and Interior Ministers re-
portedly met at length, the Chilean Government Saturday
night expressed regret at Peru's action and asserted
that any acts of espionage were "isolated individual
actions" not based on higher orders. The Peruvian ac-
tions are surprising, although longstanding Chilean-
Peruvian tensions are likely to be heightened this year
by the centennial observance of the War of the Pacific.
Peru's security concerns are genuine, but the resort to
such serious moves may also reflect a desire by the mili-
tary government to divert attention from pressing do-
mestic problems.
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25X1
UNCTADs ::nternational Wheat Negotiations
The UN Committee on Trade and Development negoti-
ating conference for a new International Wheat Agreement
will .reconvene today in Geneva. In the three months
since the last negotiating conference, the US and the
EC have agreed on international wheat price support
levels, the more important of the two issues on which
they deadlocked. They will now attempt to obtain a con-
sensus among other participants on this part of the
agreement. The negotiations, which have been going on
for a year, are of major importance to wheat importing
countries because of their implications for guaranteed
access to supplies, as well as to wheat exporters pri-
marily because of their price stabilization goal.
25X1
25X1
~ 'I'~-p Secret
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US 1,255
USSR 1,415
Miliiary Forces ~?~~~
The dollar cost estimates reflect fhe cost o'r producing and manning in fhe US a military force of the
same: size and weapons inventory as the Soviet force and of operating that force as the Soviets do. The
costs for military forces--investment and operating (less pensions)-arc best estirnates, with possible
error margins displayed. The estimated costs of Soviei RDT&E are derived in the aggregate, using
a less certain methodology. Because they provide only rough measures, they are shown separately from
the dollar costs of military forces. The US defense costs are in terms of outlays based primarily on the
Department of Defense Total Obligational Authority (TOP,) in The Five-Year .Defense Program,
October 1978. The estirnated dollar costs of projected Soviet defense activities for 1979 and 1980 are
preliminary assessments subject to greater uncertainty than those for earlier years. Comparable
US data were not available.
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USSR: Dollar Defense Activities Comparisons
The foZZou~ing is an abr2dged version of an uneZassi-
fzed paper presenting the CIA's Zatest comparison, in
doZZar terms, of US and Soviet defense activities. The
m2ssion definitions foZZow the guideZznes in the De-
fense Planning and Programming Categories issued by the
Department of Defense in November 1978.
25X1
The military establishments of the USSR and the
US are difficult to compare because they differ so much
in missions, structures, and characteristics. Any com-
mon denominator used for comparative sizing--such as
dollar costs--is imperfect, and this analysis should
not be used alone as a definitive indicator of the
relative effectiveness of US and Soviet military forces.
The data presented here are expressed in constant 1978
(midyear) dollars so that trends in the cost estimates
reflect changes in military forces and activities rather
than inflation. The US figures have been converted to
calendar year outlays and adjusted to achieve compara-
bility.
25X1
Aggregate Defense Costs
For the 1968-78 period, the cumulative estimated
dollar costs of Soviet defense activities exceeded US
outlays by aver 10 percent. Estimated in constant
dollars, Soviet defense activities increased at an aver-
age annual rate of 3 percent, with growth rate fluctua-
tions reflecting primarily the phasing of major pro-
curement programs for missiles, aircraft, and ships.
Evidence on weapon systems currently in production
and development, continuing capital construction at
major defense industries plants, and the increasing
costs of modern weapons indicate that the long-term
growth trend in Soviet defense activities will prob-
ably continue into the 1980s. 25X1
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In contrast, the trend in US defense outlays
in constant dollars has been downward for most of the
period. US outlays declined continuously from the
Vietnam peak of 1968 until 1976. They increased slightly
in 1977 and grew by 3 percent in 1978 as increases in
procurement and research and development offset con-
tinuing declines in personnel costs. As a result of
these diverging trends, the estimated dollar costs of
Soviet defense activities caught up with US defense
outlays in 1971 and exceeded them by a widening margin
until 1977. In 1978 the Soviet total was about $146
billion, nearly 45 pE~rcent higher than the US total of
$102 billion.
Military Mission Comparisons
Over the 1968-78 period, the level of Soviet activity
far strategic forces (.exclusive of research and develap?
merit) measured in dollars was two and a half times that
of the US. Soviet activities showed a slight dip in
the early 1970s with the completion of third_generation
ICBM deployment programs, but they rose in the mid-1970s
with the deployment of fourth-generation systems. US
activities declined steadily until 1976, when they
began growing at a slow rate. In 1978 the Soviet level
was about three times that of the US. 25X1
Estimated dollar costs of Soviet activities for
general purpose forces (exclusive of research and
development) have .exceeded comparable US outlays since
1970, and the gap widened every year until 1978. For the
1968-78 period, the Soviet total for this category was
about 35 percent higher than the US total. The L,TS
level of support activities has exceeded that of the
Soviet Union aver the 1968-78 period by approximately
35 percent when measured in dollar terms, but the
difference has narrowed significantly over. the period.
Support activities account for 50 percent of the total
US defense outlays and some 30 percent of the total
estimated dollar cost efense activities
for the entire period. 25X1
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~a4_ ~ ~_ _ _ _ _ _ _
US and Soviet Defense Activities
a? ~ ~. ~ ,;~~ _E~ ,_.;
Total (with RDT&E)
Investment
50 ~ Billion 1978 Dollars
0 1968 70
Operating
100 Billion 1978 Dollars
20
~_-
-? - ? ~_
0 1968 70 72 74 76 78
0 1968 70 72 74 76
Investment includes all costs for procurement of military hardware and the construction of facilities,
but excludes RDT&E. Operating includes all personnel-related costs (with the exception of pensions)
and all costs associated with the operation and maintenance of weapon systems and facilities.
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Resource Comparisons
Soviet and US defense activities can also be
compared in terms of major resource categories: mili-
tary investment, operatin costs and research and
development costs. 25X1
The trends in military investment followed closely
those for total defense costs in both countries. The
Soviet investment estimate showed an upward trend but
displayed cycles in annual growth rates that were re-
lated to the phasing of major procurement programs--
especially those for missiles and aircraft. The esti-
mated dollar cost of Soviet investment programs was
fairly constant during the early 1970s, rose in the
mid-1970s, and declined slightly in 1978. This dip
occurred because several major procurement programs
have ended or are nearing completion. New systems
are expected to enter production in the next year or so,
however, resulting in another cyclical increase. The
US investment figure fell continuously from 1968 until
1975 and then increased. at a slow rate before jumping
substantially in 1978. 25X1
The estimated dollar cost of Soviet military in-
vestment exceeded comparable US spending by about 75 or
80 percent in 1975-77 and by about 65 percent in 1978.
For the entire period it was 30 percent higher.
Measured in dollar terms, operating costs made up 25X1
the largest share of the total defense costs for both
countries. Estimated Soviet dollar costs in this
category grew continuously during the period, reflect-
ing growing force levels, and exceeded those of the US
by a widening margin after 1971. By 1978 they were 25
percent above comparable US outlays. US outlays de-
clined rapidly after 1968 until the mid 1970s, reflecting
the reduction anal eventual end of the Vietnam involve-
ment. Since that time the increase in operations and
maintenance casts has offset the continued decline
of personnel costs so that operating costs as a whole
have remained fairly constant. 25X1
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IRAN: Leftists in the Opposition
Leftists appear to have played only minor roles in
the demonstrations and disturbances of the past year in
Iran. It is difficult to assess the strength of leftist
influence in the widely disparate opposition movement.
In this period of weakening poZitzcaZ authority, hoz~-
ever, the Ze fists are robabZ in a position to cause
trouble. 25X1
The opposition movement in Iran over the past
year has emerged as a collection of dis crate groups
with differing ideologies: 25X1
-- The most cohesive segment has been the reli-
gious opposition centered on Ayatollah
Khomeini. 25X1
-- The National Front is a secular coalition
group with experienced political talent but
with. differing views across the political
spectrum. 25X1
-- On the left are the Communist Tudeh Party,
the People's Sacrifice Guerrillas (a
terrorist group), and various splinter
groups, mainly students with ex
Marxist or Maoist leanings.
Much of the leftist leadership is anonymous. The
Tudeh probably played only a minor role during the past
year in organizing the demonstrations that led to the
current crisis. The degree of Tudeh influence in the
opposition is difficult to measure because many Iranians
tend to label. any leftist a Tudeh member. The People's
Sacrifice Guerrillas have been active since the early
1970s. In the past year they may have staged several
attacks on police posts, and they were probably respon-
sible for some recent assassinations.
25X1
--continued
Top Secret
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25X1
Events of recent months indicate that extreme
leftists are well-organized in the oilfields and that
they are not responsive to the control of conservative
religious or moderate opposition leaders:
-- Two prominent oil officials, one American
and the other Iranian, were assassinated
on 23 December; apparently the murders
were the work of professionals.
K omeini a urge is o ow-
ers to avoid such acts, was displeased
that they had occurred, and believed
that radical leftists were responsi-
ble.
Tudeh for years
has tried to recruit workers in the oilfields. An
East European official stated early this month that
the Tudeh is active in the oilfields but still lacks
the numbers and power to be an influential independent
force. 25X1
The radical leaders in the oilfields probably
also include many non-Communists who, during their
education abroad, were exposed to the tactics of strikes
and demonstrations.
would have to be removed.
-- Liberation Movement of Iran leader Bazar-
gan, negotiating with strikers on Kho-
meini's behalf to resume production
to meet domestic needs, was surprised
to discover that Khomeini's writ was
not universally accepted among the
strikers, and that some groups had
"very leftwing affiliations." Bazargan
later told colleagues that his diffi-
culties were the work of "Communists"
and that he had a list of those who
25X1
--continued
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the strike leaders were po-
litically savvy, younger technical employees. Signifi-
cant numbers of Iranian students have returned home
from the US and Western Europe in recent months. The
situation is complicated further by the fact that Arab
oil workers may have exploited the situation to demand
a greater ethnic voice in the political process.
The Tudeh staged. its first demonstration in Tehran
yesterday; it reportedly attracted 10,000 participants.
There is evidence that some previous demonstrations 25X1
probably were led by people beyond the influence of
Khomeini or the moderate opposition leaders, who have
urged their followers to shun violence in order to avoid
provoking the military into a crackdown. The frequent,
apparently uncoordinated lapses into violence in various
cities have worried these leaders and led them to step
up their pleas that people must not take justice into
Khomeini and other opposition leaders have been
concerned for some time that their ability to control
events is slipping and, whatever the basis for their bE25X1
liefs, they are inclined to attribute this to leftist
religious leaders 25X1
were aving i icu y in rying o enforce discipline
on demonstrators.
opposition leaders says a a are a rai t at con- 25X1
tinuing disorders might polarize the opposition move-
ment between the religious, leadership and the left, es-
pecially the Tudeh Party.
The religious leaders who largely inspired the
broad opposition movement are still its vanguard.
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The dissipation of authority, symbolized by an erosion
of the military's cohesion, the virtual dissolution of
the intelligence and security organization SAVAK, and
the Shah's departure, is bound, however, to encourage
all opposition groups--especially the leftist groups
with their own ideas of what the new order should be.
The Tudeh and other leftist groups probably look forward
to a "revolutionary" period of chaos and liberalized
political standards in which the ho e to or anize their
cadres throughout the country. 25X1
The leftists are likely to become increasingly
active among Iran's students, who have long been a
primary source of recruits for ultraleft and terrorist
organizations. Leftist groups will probably also re-
double their efforts to infiltrate all sectors of gov-
LJ/~ I
The slippage of power from the hands of the con-
servative and moderate opposition leaders may become
most apparent in the labor field. There was no labor
movement in Iran until late last year--the few unions
were discredited and had little influence. In re-
cent months, however, the workers have discovered their
power and learned that they can bring the country to a
standstill. New worker organizations will become power-
ful forces in the future Iranian political equation, and
they will demand a voice in future governments.
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(The items in the Overnight Reports section have not
been coordinated within the intelligence community.
They are prepared overnight by the Office of Current
Operations with analyst comment where possible from 25X1
the production offices of NFAC.)
Algeria
The government announced yesterday that a successor
to President Boumediene, who died on 27 December, will
be elected on 7 February. The only candidate to be voted
on will be selected at the congress of the ruling National
Liberation Front that opens Saturday. 25X1
?-continued
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USSR-Italy
Foreign Minister Gromyko today begins a five-day
official visit to Italy, where considerable controversy
has developed over President Brezhnev's recent letter to
Prime Minister Andreotti warning against Western arms
sales to China. The letter has been published in Italy,
and the Socialist-leaning newspaper La RepubbZica, for
example, yesterday termed it "rude interference in the
sovereign affairs of a nation." The Communist Party
daily Z'Unita only mentioned the letter without comment
in a dispatch filed from Moscow. Gromyko is scheduled
to confer Wednesday with Pope John Paul II; he had papal
audiences with Paul VI in 1966 and 1974.
King Hussein begins an overnight visit to Saudi
Arabia today. According to Amman radio quoting an offi 25X1
cial Jordanian source, Hussein will confer with King
Khalid and other senior Saudi officials on '?Arab affairs
in light of the recent developments in the area."
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Top Secret
The US Mission at EC headquarters in Brussels re-
ports it has learned that the EC Commission will discuss
the issue of continued economic assistance to Vietnam
this week (see related article in Briefs and Comments).
The top aide to EC Commission Vice President Haferkamp
is hopeful that the Commission will decide--at least for
now--not to proceed with EC project assistance to Hanoi,
although EC food aid to Vietnam will probably be con-
tinued. EC Development Commissioner Cheysson, on the
other hand, sent a representative to Hanoi last week for
talks on the Mekong Delta project despite the opposition
of Haferkamp and other Commissioners. The US Mission
notes that Cheysson, a French Socialist, has maintained
significant personal relations with Hanoi officials for
Angola-China
Angola's ruling party has decided to accept a Chi-
nese request for a meeting "to pave the way for the es-
tablishment of diplomatic relations," according to a
Radio Luanda broadcast yesterday. The broadcast asserted
that the party's Political Bureau had made its decision
on 5 January. 25X1
T e C 2nese may now reason a
their reluctance to estabZZSh ties zuzth Angola because of
the Cuban presence h d mereZ Ze t a clear field to Cuba
and the USSR there.
25X1
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Portugal
The US Embassy reports that the Lisbon Office
Workers' Union--the largest, best-financed, and best--
organized union in Portugal--appears to have voted last
Thursday to affiliate with the non-Communist General
Workers' Union (UGT) rather than the Communist-led In-
tersindical, which has been predominant on the Portuguese
labor scene. The Embassy now sees a "briight" future for
the non-Communist association, which has its first con-
gress this week as a viable alternative to the Intc~r-
sindical. 25X1
COMMENT: The non-Communist labor organisers ha