NATIONAL INTELLIGENCE DAILY SATURDAY 12 MAY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000200030045-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 25
• Document Creation Date: December 22, 2016
• Document Release Date: June 8, 2010
• Sequence Number: 45
• Publication Date: May 12, 1984
• Content Type: REPORT

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Director of r".. Seei et
Central
Intelligence
.National Intelligence Daily
Saturday
12 May 1984
Top Secret
12 May 1984
Copy 285
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Top Secret
Contents
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Sri Lanka: Americans Kidnaped by Terrorists ..........................
Libya-Tunisia: Border Tensions ..................................................
Iraq-Iran: Shipping Industry's Response to Attacks ..:...............
Panama: Election Results Challenged ........................................
South America-US: Reaction to' Higher Interest Rate ..............
Afghanistan-USSR: Insurgent Strategy .....................................
Israel-IAEA: Position on Arab Nuclear Programs ...................... 11
Chad-Libya: Tenuous Progress by Habre .................................. 12
Iraq: Grumbling Against Saddam .................................................. 13
Kuwait-Iraq: Tensions Over Disputed Islands ............................ 15
Denmark-NATO: INF Infrastructure Funds Withheld ................ 17
West Germany: Political Controversy Erupts .............. :............. 17
China-North Korea: Hu Yaobang's Visit .............................. :..... 18
Cameroon: Time Running Out for Biya ....................................... 18
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12 May 1984
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LIBYA-TUNISIA: Border Tensions
Libya is increasing pressure on Tunisia in retaliation for the
dissidents' use of Tunisia as a starting point for the attack on
Tripoli this week.
The Libyan Foreign Ministry has warned that Libyan exile operations
involving Tunisia pose a grave danger to relations between the two
countries. According to Tunisian officials, on Thursday Libya
strengthened its military units along the border,
Tunisian officials also say Tripoli has
placed a police guard around the 'Tunisian Embassy and s
questioning people as they enter.
Tunisian officials call the dissident attack against Libyan leader
Qadhafi an internal Libyan matter and deny any involvement. Tunis
has also demanded that the Libyans release the three border auards
Comment: Qadhafi probably is hoping to cow Tunis into preventing
dissidents from again operating against Libya from Tunisia. A major
Libyan attack on Tunisia does not appear imminent, although minor
border incidents are possible. Qadhafi probably will maintain
Tunis may be overreacting to the increased Libyan security measures
resulting from the attack on Qadhafi. Moreover, Tunisian Prime
Minister Mzali may find it useful to overstate the Libyan threat in order
to divert attention from domestic problems and to demonstrate his
leadership to President Bourguiba. In any event, he will continue to
look to Washington for support against Libya.
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IRAQ-IRAN: Shipping Industry's Response to Attacks
Iraqi attacks on tankers trading at Khark Island are causing some
confusion in the international shipping market, but oil shipments
are likely to continue near normal unless the attacks intensity.
Although charter market data are not sufficient to establish a trend,
hull and cargo insurance rates have doubled following the most
Comment: More than enough tankers will be available to carry oil
from Khark unless the pace of attacks increases significantly. The
current depressed condition of the international tanker market makes
some owners willing to accept greater risks because they can now
demand premium rates. Tehran may, as in the past, offer incentives in
the form of insurance rebates and price discounts on oil to offset the
.higher transport costs for purchasers of Iranian oil.
If more Iraqi attacks lead to many refusals to call at Khark, the
disruption of Iran's oil exports could lead to an Iranian military
response. Iran, for example, could harass cargo ships headed for
Iraq and attack targets in Kuwait.
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PANAMA: Election Results Challenged
The outcome of the election is being challenged by both major
coalitions and apparently will go to the government-controlled
Electoral Tribunal for a decision.
Press reports indicate that a member o the
national counting board has resigned over alleged irregularities in
tabulating the votes.
Meanwhile, sporadic violence continues as a result of the protracted
vote count. Both the offices of the progovernment press and the
residence of opposition candidate Arias have been the target of
gunfire in recent days, according to the US Embassy. Opposition
sources believe the government staged the attack on the press offices
to provide a pretext for moving against the opposition newspaper, La
Prensa, which is now only one of two mass media outlets still open to
the opposition.
Comment: By raising enough challenges to throw the election into
adjudication, the government-and by implication the military-
believes that it can ensure Barletta's victory, while maintaining a
facade of legitimacy for the balloting. The election apparently
continues to be close, and only a few decisions in either candidate's
favor in the review process could provide the winning margin.
The opposition is certain the balloting favors Arias, and continued
delays in announcing his victory or the naming of Barletta as the
winner could lead to more violence this weekend. The Defense Forces
have been patient dealing with the outbursts so far, but they probably
will feel less constrained once Barletta's victory is assured. The
military in the past has openly assaulted La Prensa's offices, and it
may again be considering such action as a means of muzzling
opposition charges of fraud.
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South America: Annual Impact of an Increase of
1.5 Percentage Points in Interest Rates
Key South American
Debtors
Projected
increase in
export
revenues
(million US $)
Estimated
increase in
interest
payments
(million US $)
Interest
increase as
a share of
exports
(percent)
Argentina
300
600
200
Brazil
2,500
1,275
51
Chile
528
210
40
Peru
100
120
120
Venezuela
200
375
188
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SOUTH AMERICA- Reaction to Higher Interest Rate
US:
The increase in the US interest rate is drawing fire from South
American leaders and. will lace new strains on financial rescue
programs.
Argentine President Alfonsin's public denunciation of the
development prompted government leaders in Mexico, Brazil,
Venezuela, and Colombia to issue a joint statement decrying the
increase. Argentine congressmen-already unhappy with rising
inflation-are claiming that the higher rate will prevent economic
recovery and threaten social peace.
The US Embassy in Brasilia reports that the government has reacted
with uncharacteristic harshness and believes the higher rates could
nullify gains made in its financial adjustment program.
Comment: Despite predictions of a resurgence of financial problems,
the immediate impact on South American debtors will be minimal.
Interest rates are adjusted every six months, and the new increase will
not take effect until later this year. The current growth in South
American exports will blunt the initial increase in the debt service
burden. Nonetheless, as the financial burden of the higher interest
rate grows, it will strain financial rescue programs.
An increase of 1 percentage point in world interest rates would
add some $2 billion to South America's annual debt servicing
requirements, according to the estimates of a respected financial
journal. Moreover, an increase in world interest rates could slow
recovery of exports to the developed countries.
Latin American governments probably will issue a collective
statement against the interest rate and trade policies of industrial
countries before the London Economic Summit. They probably
will also intensify demands for repayment concessions from
private bankers to offset the impact of higher rates in future debt
negotiations.
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AFGHANISTAN- Insurgent Strategy
USSR:
Insurgent leader Masood has sent most of his forces out of the
Panisher Valley in order to reduce Soviet pressure in the valley.
Masood, in a letter dated 7 May and delivered to the US Consulate
in Peshawar, says that only a third of his forces are in the Panjsher
Valley. He has established his headquarters to the north of the valley
and has sent most of his men elsewhere in Kapisa Province and into
Parvan and Baghlan Provinces in an effort to divert Soviet forces.
Masood says.his forces need ammunition and supplies and hope to
open a supply line into the valley through Laghman Province. He says,
however, that a local commander belonging to a rival insurgent group
has refused to allow the supplies to go through.
An East European military attache says the Soviets suffered
substantial losses in the current offensive, according to the US
Embassy in Kabul.
Although rivalries between insurgent groups continue to hamper
cooperation, all of the major resistance leaders have urged their
guerrillas to help Masood. The Soviets probably are concerned about
their combat n though the level of fighting has been low.
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SRI LANKA: Americans Kidnaped by Terrorists
The kidnaping of an American AID contractor and his wife is the
first such incident involving Americans in Sri Lanka's continuing
communal violence.
A Sri Lankan security official says the couple was taken by boat to
Tamil Nadu in southern India. In a note to President Jayewardene,
Tamil terrorists are demanding the release of 20 other terrorists now
in prison and a ransom of more than $2 million. The terrorists have
threatened to kill them b noon on Monday if their demands are not
met.
Colombo has formed a special task force within the Ministry of
National Security to discover where the terrorists are holding the
couple and are coordinating their efforts with the US Embassy. Both
the authorities in Tamil Nadu and the Indian Government have
promised to help find the the terrorists if they are traced to southern
India, according to the Embassy.
Comment: The terrorists are members of the People's Liberation
Army that is calling for the creation of a separate Tamil state. They
may hope to discredit the reconciliation. talks that began again on
Thursday in Colombo and to embarrass Jayewardene before his visit
to the US next month. They probably also intend to demonstrate his
inability to maintain law and order.
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ISRAEL-IAEA: Position on Arab Nuclear Programs
Israel's continued refusal to rule out preemptive strikes against
the nuclear facilities of its Arab neighbors could result in a
confrontation in the IAEA over its participation.
A resolution adopted by the IAEA General Conference last fall
requires a cutoff of all scientific and technical dealings with Israel,
unless Tel Aviv publicly renounces its right to attack nuclear facilities
in Iraq and other countries before the General Conference meeting
F- I
this September.
In a recent speech, Prime Minister Shamir cited Iraqi violations of
treaties forbidding the use of chemical weapons. He believes that
both Iran and Iraq would be willing to break similar agreements
prohibiting development of nuclear weapons. Although Shamir says
that international. action can be effective in punishing treaty violators,
he argues that all countries must rely primarily on their own actions
to guarantee their security.
Comment: The technical and financial impact of the cutoff would
be small. Shamir's remarks suggest that Tel Aviv does not intend
to change its longstanding position that it will take action to halt
suspected development of a nuclear weapons capability by any
of its Arab neighbors.
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Faya-L g`
season
highwa
Lake
Chad
Chad Y Sudan
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CHAD-LIBYA: Tenuous Progress by Habre
Chadian dissidents continue to chafe under Libyan control of the
north, while President Habre slowly improves security in the
south and central regions.
central region agreed last month to go over to the government in
exchange for food and salaries. The US Embassy in N'Djamena
reports that for the past several months the government-with
French budgetary support-has paid overdue salaries to civil
servants, troops, and former dissidents.
Paris continues to try to arrange a new round of reconciliation talks
in Brazzaville. The Embassy in N'Djamena reports, however, that
representatives of the Libyan-backed rebel government in exile
continue to demand that negotiations be held under OAU auspices
and on a faction-to-faction basis.
Comment: Libya's logistic problems in the north are not new, but
they will increase discontent with Tripoli's domination of the area.
The continued defections of former opponents from the north are
likely to add momentum to N'Diamena's efforts to foster national
reconciliation.
The Habre regime, however, will become increasingly dependent on
French economic aid as it supports more former dissidents. The new
loyalty of the refugees could erode rapidly if the government were to
fall behind in providing salaries or food.
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IRAQ:
Grumbling Against Saddam
Saddam Husayn.
Iraqis are said to be growing impatient over the war with Iran and
disgusted with the cult of personality glorifying President
many middle-class Iraqis 25X1
a rise in social tension 25X1
In addition, parents are worried that a recent government order
moving up the close of the school year to the end of May precedes a
massive callup of students. Iraqi security forces have been alerted for
fear their Army is not capable of defeating Iran. These Iraqis are
discouraged that the Iranians have withstood Ira i atte is to oust
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permitting his excessive self-promotion.
US diplomats in Baghdad say anti-Saddam handbills have appeared
there, attacking the weeklong celebration of Saddam's birthday late
last month. The handbills criticized the lavish praise of Saddam,
compared him to an emperor, and assailed the ruling Ba'th Party for
professionals on the performance of their duties.
he enjoys showing off by lecturing lawyers, doctors. and other
The diplomats also report that Saddam has recently begun acting as
an omniscient authority on most subjects. In television appearances,
power. He has been careful to keep Iraqi war casualties to a minimum.
Comment: The public grumbling is not a threat to Saddam's hold on
No matter how much some of the people may dislike Saddam, they
fear and hate the regime of Ayatollah Khomeini more. The
government probably will call up students this summer for military
training but release them for school in the fall.
Saddam's cult of personality could be a potential problem for the
Ba'th Party. Ba'thist ideologues already resent Saddam's effort to
promote himself at the expense of the party and could use it against
him if they decide he is no longer indispensable. Saddam retains firm
control over the securit forces, however, and will move quickly
against any opponents.
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Saudi
Arabia
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12 May 1984
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Kuwait
lands'
BGbiyin
shahr
I r a n
Persian Gulf
Saudi Arabia
Khawr Zubayr
Umm Qa~r
Warbah ~~ ~6
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KUWAIT-IRAQ: Tensions Over Disputed Islands
Kuwaiti officials are. worried about new signs of Iraqi intransigence in
settling claims to two disputed islands at the head of the Persian Gulf,
President Saddam Husayn, in a 25X1
recent interview with Kuwaiti journalists, noted the presence of Iraqi
troops on one of the islands and stressed that it was in Iraq's strategic
interest to control both. The journalists were also told by other high-
ranking Iraqi officials that Iraq has no territorial ambitions but will
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Comment: Baghdad is building a major naval base at Umm Qasr
harbor and has long insisted it needs the islands, which are at the
entrance, to defend the base.
will continue to support Iraq in the war with
Iran by selling oil on Iraq's behalf and by urging Western Europe and
Japan to help arrange a cease-fire and end arms sales to Iran. Kuwait
never 7 after the war with Iran
ends.
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DENMARK-NATO: INF Infrastructure Funds Withheld
The Danish parliament voted on Wednesday to withhold from NATO
some $4.8 million in payments for INF infrastructure development-
approximately one-fifth of Denmark's scheduled contribution. The
parties in the pro-NATO minority government abstained on the
resolution, which was sponsored by the Social Democrats. Last week
parliament passed a resolution directing the government to work
toward banning nuclear weapons in Denmark under all
circumstances.
Comment: NATO could challenge the Danish decision, because
legally the Alliance controls the funds that have been obligated for the
infrastructure. If Copenhagen succeeds in denying the payment, it will
not affect INF deployment schedules because Danish infrastructure
payments are among the smallest in NATO. The Allies will regret the
decision but will not want to create a crisis in the Alliance over the
issue, as long as the Danes can find some means to compensate
for these funds. The government, for example, could arrange
compensation without the opposition's knowledge by rebating some
funds it receives from NATO for other projects.
WEST GERMANY: Political Controversy Erupts
The Kohl government has provoked a controversy by proposing
legislation to grant amnesty to people accused of tax evasion
resulting from campaign contribution improprieties. The proposal,
which specifically excludes Economics Minister Lambsdorff, was put
forward by the Bundestag caucuses of the governing parties without
'prior public discussion or consultation with the opposition Social
Democrats. The Free Democrats in the coalition are divided on the
issue, and the proposal was a major topic of debate in recent days
at the Christian Democratic Union congress.
Comment: There is virtually no chance the government will fall
over this issue or that Chancellor Kohl will agree to withdraw the
legislation. Nonetheless, the government's proposal-and the
secrecy with which it was formulated-have caused more dissension
within the governing parties than any other issue since the center-
right coalition came to power in 1982. The government's handling of
the issue could do long-term damage to the morale of the Christian
Democratic and Free Democratic Parties as well as to the Kohl
government's public standing.
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CHINA-NORTH KOREA: Hu Yaobang's Visit
The visit by Chinese party leader Hu Yaobang, which ended
yesterday, clearly was meant to counter strains caused by Beijing's
warming relations with the US and Japan and by Kim II-song's
planned summit in Moscow. Press reporting indicates that Kim
displayed unusual hospitality and gave repeated pledges of
friendship. Hu matched these with criticism of US troops in South
Korea, contacts with Kim's son Kim Chong-il and the North Korean
military, and strong support of P'yonavana's proposals for
confederation and tripartite talks.
Comment: Hu probably helped assuage North Korean concerns
about Chinese intentions following President Reagan's visit to Beijing.
When Kim is in Moscow, he will tr to use Hu's tri to extract greater
assistance from the Soviets.
CAMEROON: Time Running Out for Biya
The US Embassy reports that President Biya is rapidly losing support
as criticism of his indecisiveness increases, following the coup
attempt last month. Biya's continued absence from public view is
contributing to the general impression of weakness and is prompting
talk about possible successors. Lack of information about the trials
and executions of coup plotters now taking place adds to political
uncertainty. The Embassy says the military appears to be assuming
greater responsibility for governing the country.
Comment: Loyal Army officers who rescued Biya last month may now
be discussing how long they can allow the political drift to continue.
The Army leadership may decide there is no choice but to force Biya's
resignation or remove him from office, lest the appearance of a
leadership vacuum tempt younger officers to move first.
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Europe
In Brief
- Honduras yesterday declared Nicaraguan Ambassador persona
non grata ... in reaction to helicopter shootdown on Tuesday ...
Honduran armed forces on alert but unlikely to retal'
Tegucigalpa probably will strengthen border forces.
sent to Caribbean.
Soviet Navy task group that held exercises with Cubans departed
Caribbean Thursday ... probably bound for Mediterranean ...
included carrier Leningrad, largest, most capable Soviet ship ever
... parliament to debate allegations next week.
- Italian Prime Minister Craxi has rejected resignation of three
Social Democratic ministers .. set off by allegations Social
Democratic Budget Minister was member of outlawed P2 Lodge
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