NATIONAL INTELLIGENCE DAILY FRIDAY 8 JULY 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01094R000300010156-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 27, 2016
• Document Release Date: July 19, 2010
• Sequence Number: 156
• Publication Date: July 8, 1983
• Content Type: REPORT

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Director of
Central
Intelligence
T...+ c____a
CY4 285
Top Semet
CPAS NID 83-159JX
U8J Iy7983
Copy 2 85
National Intelligence Daily
Friday
8 July 1983
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Contents
USSR-West Germany: Discussions on INF ............................ 1
Ell Salvador: Status of Government Offensive ........................ 2
Chad: Government on the Defensive ...................................... 3
International: Reactions to US Decision on Steel .................. 4
Mexico: Reining in Labor ......................................................... 6
Yugoslavia: Western Aid Conditions Approved ...................... 7
NATO-Poland: Awaiting a Move by Warsaw ..........................
Nicaragua-Costa Rica: Sandinista Protest ............................
Panama: Foreign Policy Differences ........................................
Switzerland-USSR: Soviet Official Expelled .......................... 11
Special Analysis
Chile: Both Sides Regrouping ................................................. 12
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USSR-WEST GERMANY: Discussions on INF
Soviet leader an Chancellor Kohl no sign of
flexibility on INF.
Officials in Kohl's delegation say there was no indication during
the talks on Tuesday that Moscow was willing to concede any US
deployments. The Soviets maintained that SS-20s were needed to
balance existing British and French systems. Defense Minister
Ustinov indicated that a Soviet response to US deployments might be
a lifting of its self-imposed freeze on SS-20 deployments.
The West Germans claim, however, that the tone of the private
talks was more moderate and businesslike than Premier Tikhonov's
dinner speech on Monday and other public Soviet statements during
the visit would suggest. They asserted the Soviets hinted that some
sort of understanding could be reached if deployments were
postponed and that Moscow might be willing to drop the nuclear-
capable aircraft issue and concentrate on missiles at the Geneva
talks. The Soviets reportedly made no specific threat to break off the
talks if deployments proceed.
The US Embassy in Moscow reports that Pravda's assessment of
the discussions held on Tuesday was a forceful reiteration of the
USSR's position on INF. It strongly implied that Kohl had not been
swayed by Soviet arguments.
Comment: The Soviets' apparent belief that the visit was unlikely
to produce any movement in the INF debate evidently has been borne
out. They still appear to hope, however, that there is some chance
of delaying INF deployment and thereby killing it. Soviet media
commentary has criticized Kohl's consistent defense of the US
position but has not been so harsh as to suggest a decline in Soviet-
West German relations.
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The Army believes that the northern and central areas of San
Vicente Department are now clear of guerrillas, and it plans to shift its
attention to western Usulutan Department.
a battalion of elite
government troops is to begin a sweep today west of Berlin in
coordination with two battalions that are moving north from the Tres
Calles area. Other units are being deployed on the western side of the
Rio Lempa, in San Vicente Department, and along the Inter-American
Highway to block and ambush fleeing guerrilla forces. Smaller
government units will continue to patrol in northern San Vicente.
The guerrillas, meanwhile, continue to receive and distribute
military supplies in preparation for future operations.
Comment: Government casualties in San Vicente were light,
because guerrilla units generally avoided combat and abandoned
their base areas before the government troops arrived. A slow and
halting execution of the Usulutan operation may again allow the
guerrillas to evacuate the area if they choose. Their continued
acquisition of arms and ammunition, however, suggests they still
plan to strike hard elsewhere.
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The government's position in the east continues to erode, and the
Libyan-backed dissidents are preparing to attack Abeche soon. 25X1
Almost all of President Habre's forces are withdrawing from
Biltine toward Abeche. Biltine is the government's last defensive
position before Abeche.
Comment: The prospects are dim for a successful government
defense of Abeche. Habre's troops have been falling back since their
major defeat at Faya-Largeau on 24 June, and they are facing
shortages of arms and other equipment.
The withdrawal of Habre's tribesmen from Abeche may portend
growing ethnic splits and serious command and control problems. If
tribal tensions continue to mount, government troops could break
into rival factions. Moreover, new losses in the east are likely to
continue to undermine military morale.
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INTERNATIONAL: Reactions to US Decision on Steel
The EC and Canada may retaliate against the US for placing
quotas and countervailing duties on specialty steel imports.
The principal EC trade policy committee is meeting today to
consider a response. EC spokesmen said that the Community may
decide to press Washington for trade concessions on other products
by asking for compensation under GATT rules. Some EC officials are
threatening retaliatory tariffs on US products if no accommodation is
forthcoming.
Atlas Steel, Canada's largest producer of stainless steel, has
announced it will ask Ottawa for retaliatory duties on specialty steel
imports from the US. Canada imports four times more US specialty
steel than it exports to the US.
In Japan, officials in the Ministry of International Trade and
Industry have ruled out a GATT complaint. They also have said,
however, that they would seek clarification on how quotas would be
divided among countries. Last year Japan exported only $30 million in
specialty steel to the US.
Comment: Industrial countries are reacting negatively because
the new US restrictions reinforce their fears of increasing US
protectionism. Moreover, their officials believe that the US violated
the free-trade pledge made at Williamsburg.
The economic impact of the US measures will be small. For the
EC, the value of affected trade amounts to only $170 million, or
0.4 percent of total EC exports to the US in 1982. Nevertheless, these
new measures will affect some West European companies already
hurt by weak demand and by restrictions on carbon steel and military
equipment containing specialty metals.
In Western Europe, French calls for additional EC protectionism
may fall on more receptive ears. Canadian Prime Minister Trudeau
probably will give a sympathetic hearing to the industry's complaint,
partly to strengthen his government's popularity. Japan is unlikely to
retaliate for fear of intensifying trade disputes with the US.
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4 8 July 1983
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MEXICO: Reining in Labor
President de la Madrid's toughness in dealing with crucial labor
groups may serve to push problems with unions back several months.
Official labor unions have remained quiet in recent weeks despite
the administration's unwillingness to make major concessions on
wages. Pressure from organized labor has been strong and some
businesses were prepared to concede more, but de la Madrid allowed
minimum wages to rise only 15.6 percent in June. This increase lags
far behind the rise in the cost of living.
The President also has taken a hardline stance with Communist-
dominated unions. According to press and US Embassy reports, a
monthlong strike by nonacademic employees of the National
University- Mexico's largest Communist-led labor organization-
ended last week without a pay increase for the strikers.
The administration was inflexible during bargaining sessions and
was prepared to rule that the strike was illegal and to terminate the
workers' contracts. Members of another leftist union were undercut
by the announced liquidation of the government-owned company they
were striking.
Comment: De la Madrid's maneuvers will increase confidence in
his ability to handle challenges to the system without resorting to
repression. Although government-affiliated labor unions are
disappointed over the continuin fall in real wa es, they are unlikely
to threaten new strikes until fall.
The moves against leftist unions are the strongest in recent years.
They put opposition leaders on notice that disruptive demonstrations
will not be tolerated, and they probably will set back opposition
efforts to build links with labor.
The President's clear message to workers that nonconformity will
be punished should help uphold the status of Fidel Velazquez and
other progovernment labor leaders. Nonetheless, declining economic
conditions will make peaceful government-labor relations difficult to
maintain.
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YUGOSLAVIA: Western Aid Conditions Approved
The federal government earlier this week won a major victory in
securing regional agreement to strengthen central financial controls.
A lengthy federal assembly session passed three laws to carry out
federal guarantees for repayment of the Western financial aid
package. The National Bank in particular will play a greater role in
foreign debt management and in the distribution of foreign exchange.
Prime Minister Planinc asserted there was no acceptable
alternative to meeting Western bank conditions on loan repayments.
She predicted economic prospects would remain difficult through
1989-four years longer than previous forecasts.
The laws were opposed by regional politicians, who regard any
reconcentration of authority in Belgrade as a threat. The intensity of
the fight embarrassed some federal leaders. Critics called the
Western insistence on federal guarantees interference in internal
affairs and questioned the leadership's ability to defend Yugoslav
sovereignty.
The US Embassy reports that at one point Deputy Premier
Dragan, Yugoslavia's chief negotiator and the cabinet's leading
advocate of economic reforms, was nearly forced to resign. He had to
go to Slovenia to argue the government's cause before his home
republic grudgingly accepted the new measures.
Comment: The federal officials used a great deal of political
capital in securing the passage of these laws, and they presumably
made some behind-the-scenes deals. The leadership in Belgrade will
have an even tougher fight on its hands when the government
presents its long-term economic stabilization program later this year.
The regional leaders will be anxio to prevent any further erosion of
their authority.
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NATO-POLAND: Awaiting a Move by Warsaw
At NATO meetings earlier this week, most of the Allies resisted an
earlier proposal by the US for national demarches to Warsaw calling
for the release of political prisoners in exchange for beginning talks
on debt rescheduling. The West Europeans raised no objections to
the planned unilateral US demarche to Poland. Although the West
Germans said they had already spoken to the Poles, the other Allies
said they would make no parallel moves unless approached by
Comment: The Allies are likely to fear that hints of a softening of
the West's position at this time would weaken Premier Jaruzelski's
incentive to lift martial law, which they believe may occur by 22 July,
Poland's National Day. At the same time, they are reluctant to link
rescheduling to the internal situation in Poland. When Poland's
Western creditors meet on 25 July, most of the Allies probably will
support consideration of rescheduling.
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NICARAGUA-COSTA RICA: Sandinista Protest
Managua has issued a protest requesting that San Jose prevent
insurgents from launching further attacks from Costa Rican territory.
Spokesmen for guerrilla chief Eden Pastora earlier this week said his
forces still had the town of San Juan del Norte under siege. A Costa
Rican official confirms that the insurgents released about 40
Sandinista prisoners to the Red Cross at the Costa Rican border.
Meanwhile, the Sandinistas have announced plans to evacuate some
500 families from the border area.
Comment: The Sandinistas evidently are putting up a strong
defense of San Juan del Norte. The town would be useful to Pastora
as a logistic base, and a victory there also would encourage his
supporters. Sandinista measures to remove families from the area
probably will increase the flow of refugees to Costa Rica, thereby
adding to the tension between Managua and San Jose. It also may
increase opposition in Costa Rica to President Monge's permissive
olic toward anti- andinista activity in the country.
PANAMA: Foreign Policy Differences
Foreign Minister Amado apparently has moved to soften the
tough position adopted by National Guard Commander Paredes in
Costa Rica last week. Amado has publicly suggested that Paredes's
comments criticizing Cuba and Nicaragua for their involvement in
Central America represent neither a threat nor a change in
Panamanian policy. The US Embassy reports that conservative
supporters of Paredes may have urged him to take the more
outspoken line. Panama's extreme left is criticizing the statements,
vowing to continue its revolutionary struggle in the region.
Comment: The conduct of foreign policy continues to be diffused
among several civilian officials and Guard officers. Amado's action
probably reflects fears in the Foreign Ministry that Paredes's
statements would undermine Panama's neutrality, including its role in
the Contadora peace initiative. Despite leftist criticism of Paredes for
his interference in policy-related matters, his tough anti-Communist
policy is likely to strengthen support for his presidential aspirations
among conservatives.
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SWITZERLAND-USSR: Soviet Official Expelled
Swiss security officials have confirmed that the Justice Ministry
has ordered the expulsion of the Soviet Vice Consul in Geneva for
collecting political, economic, and scientific information.
Comment: The Vice Consul has been identified as a member of
the KGB, and his activities suggest that he was a science and
technology officer. He is the fifth Soviet official to be expelled from
Switzerland this year, but the first accused of scientific and economic
espionage. Well-publicized expulsions this year suggest a tougher
Swiss security policy and heightened government concern over the
650 Soviet diplomats in Geneva.
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Special Analysis
CHILE: Both Sides Regrouping
The third national day of protest, scheduled for next Tuesday, will
be a more nearly true test of the opposition's strength than previous
demonstrations. Both the government and the opposition have
suffered setbacks and are reevaluating their strategies. Political party
and union leaders will have to foment widespread protests throughout
the summer, however, to weaken the strong backing President
Pinochet is receiving from the Army and to force him to adopt a more
rapid transition to democracy.
In May and June the opposition mobilized demonstrators mainly
from the middle class-including many former government
supporters-to stage largely nonviolent protests over high
unemployment, the country's huge foreign debt, and the record
number of bankruptcies among farmers and industrialists. The
protests also reflected impatience with President Pinochet's timetable
for returning to civilian rule in 1989. In addition, the opposition made
it clear that it wants the government to authorize the return of
thousands of exiles.
The opposition lost its momentum late last month when a walkout
by copperworkers and an attempt at a national strike-called to
protest the arrest of the president of the Copperworkers'
Confederation -collapsed quickly. Preparations were poor, backing
from political coalitions was weak, and the government arrested
protest leaders, fired strikers, occupied mines, and censored the
press.
At the same time, Pinochet made some concessions aimed at
undercutting support for the opposition. The government announced
wage increases for public employees, granted debt relief for farmers
and small businessmen, authorized the return of 126 exiles-
including several prominent opposition leaders-and promised
citizens they could soon make a greater contribution to the legislative
process. Most of the copperworkers fired for striking were rehired,
and the Interior Minister-a hardliner-met with labor leaders to
discuss their grievances.
Pinochet coupled these concessions with a warning that a third
national protest would not be tolerated. The caution was reiterated
by the new garrison commander in Santiago, who apparently was
appointed because his predecessor was unwilling to use troops to
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and arrested five leaders.
repress the protest last month. When the National Union Coordinating
Group-a major labor confederation-announced its support for the
protest yesterday, security agents promptly raided its headquarters
Strategies Under Review
Both sides seem to be reevaluating their positions.
The President has no long-term strategy.
strikes.
The opposition groups, which coalesced in early spring, now are
troubled by lack of cooperation between labor groups and political
parties and by friction among the parties. Many labor leaders were
disappointed by the lack of support from.political leaders during the
emphasizing debt relief.
Some younger union leaders believe the opposition parties have
been inept in dealing with Pinochet and that only labor actions have
induced the government to pay attention to opposition demands. In
the aftermath of the strikes, unions are focusing their attention on
their separate interests-copperworkers are seeking to have their
president released and all fired miners rehired while truck owners are
for next Tuesday.
The political coalitions, which believe the strikes were premature
and ill advised, are trying to reestablish themselves as the leaders of
opposition activities. The National Development Project and the
Christian Democratic Party are the major organizers of the protest set
Both political coalition leaders and unionists will try to renew their
cooperation.
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The opposition still hopes to persuade the military to press
Pinochet to make concessions or, failing that, to remove him from
power. US Embassy and attache reports, however, indicate that the
Army's support for Pinochet remains solid.
press accounts, on the other hand, generally suggest that his support
among the more liberal but less influential Navy and Air Force officers
may be slipping.
The President's continued refusal to undertake some substantial
political reforms and economic adjustments are increasing the
likelihood of confrontations between the government and the growing
opposition. To undermine the backing Pinochet is receiving from the
Army, however, the demonstrations would have to be much larger
and more widespread than they have been so far. If this occurs,
Pinochet probably would be urged by the military to adopt a shorter
transition timetable, accelerate the return of exiles, and revise his
economic policies. Refusal would risk removal from office by the
military.
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