MONTHLY WARNING REPORTS FOR MAY 1988

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91B00776R000400030019-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 23, 2016
• Document Release Date: June 24, 2013
• Sequence Number: 19
• Publication Date: June 28, 1988
• Content Type: MEMO

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The Director of Central Intelligence
Washington, D.C. 20505
National Intelligence Council
FROM: Charles E. Allen
National Intelligence Officer for Warning
SUBJECT: , Monthly Warning Reports for May 1988
1. Summary of Key Warning Issues:
The struggle within the Soviet leadership over party leader Gorbachev's
perestroyka is reaching a critical stage as the June Communist Party
conference begins. The Intelligence Community believes that the outcome
remains in doubt. Gorbachev appears to have won the latest round in the
exchange of polemics between Pravda and Soviet Russia this spring and he has
resumed the offensive in arguing for radica reform, while conservative
"Second Secretary" Ligachev's position has slipped. However, the conference
may not have the authority to replace a significant part of the Central
Committee--the core of the conservative opposition.. The Community agrees
that, given the magnitude of Ligachev's challenge, Gorbachev must clip his
wings in the next few months to avert a serious political defeat; he must
remove Ligachev from the sensitive "second secretary" position and transfer
the key ideology and personnel Secretariat portfolios to his allies. CIA/SODA
believes Gorbachev's chances are good while the rest of the Community rates
the outcome as a tossup.
This review reflects consideration of inputs generated at.warning meetings
conducted by the National. Intelligence Officers with Community representatives
from all areas. As such, it represents a Community-wide review, but it is not
a formally rnnrriinatf d (nmmitnity product. This document is protected by the
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USSR/Eastern Europe
The Soviets recently have successfully weathered two successions in
Eastern Europe and a new round of unrest in Poland, but party leader Gorbachev
and the reforms he has undertaken continue to have a profoundly unsettling
influence in Eastern Europe. The potential for Soviet missteps remains high.
There is Community agreement that long-term Soviet objectives in the
region remain unchanged; the Soviets seek bloc cohesion and stability, support
for Moscow's foreign policies, Communist dominance, increased defense
spending, and greater economic integration. Under Gorbachev, however, Soviet
management practices have changed. East European leaders have more room for
maneuver, and Moscow is not pressing for slavish imitation of Soviet reforms.
The threshold for Soviet military intervention may be higher under Gorbachev
than under Brezhnev and his two immediate successors. There is disagreement
over whether the "Brezhnev Doctrine" has been abandoned. DIA and CIA believe
the new rhetoric is primarily for propaganda purposes while State/INR and the
Assistant NIO for USSR are less dismissive of the rhetorical, agreeing that
Moscow will protect its interests but arguing that the Soviets are redefining
those interests.
. General Noriega has moved to cement and extend his influence in Panama and
probably calculates that he can remain in power even if he decides to renege
any formal accord with the United States. Most of the Community believes that
Noriega continues actively to lay the groundwork for a remaining a major
player in Panama. He has: created a new Strategic Military Council composed of
loyal troops to replace or influence the less politically reliable General
Staff; promoted loyalists to key positions; shaken up the Cabinet to improve
control of the civilian bureaucracy; and moved to exacerbate divisions among
opponents of the regime. The most likely leader of a coup--former Ambassador,
to Israel and Lt. Col. Herrera Hassan--has little chance of stirring action
against Noriega.
Over the longer-term, the NIO for Warning believes Noriega could chip away
at US interests in Panama, including rights to the Canal. He may want to
punish the US for its attacks on him personally and what he perceives as
serious damage to the Panamanian economy. We anticipate no direct challenge
.to the main provisions of the 1977 Treaties, but Noriega knows how to harass
US personnel and interfere with US diplomatic, military., and commercial
activities. He may decide to try to "slice the salami" in small pieces to
enhance Panamanian administrative claims to the Canal as 1999 approaches.
Still a comparatively young man, Noriega could, if elected President, remain a
thorn in the side of the US for many years to come.
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Guatemala
The failure of the coup in May against President Cerezo did little to
dampen the zeal of anti-regime forces and another coup attempt is likely.
Cerezo has bought some time by taking steps to meet some of the military's
concerns including breaking off plans to meet with insurgents and promising
more rifles for the army. He also may go easy on coup plotters by pardoning
them. However, Cerezo has a history of returning to original policies and has
angered the right by his decision to close a right-wing television station.
Further, his ruling party is split and he has failed to address corruption
charges or close the Cuban and Soviet press offices. Analysts are divided
over the timing of another coup attempt. Some believe another is likely
within 90 days while others think Cerezo's moves have bought him as much as
six to nine months.
Libya/Benin
Libyan activity in Benin has increased again and Colonel Qadhafi's agents
probably will resume using Benin to carry out subversive and terrorist
operations in Africa. President Kerekou has rescinded restrictions on Libyans
in Benin; the head of the Libyan Peoples Bureau has returned, a Libyan front
company has reopened, Libyan Airways is beginning service, and Chadian rebels
are transiting Benin for military training in Libya. Analysts conclude that
Tripoli virtually "owns" anyone of importance in the Benin government.
USSR/Cape Verde
Soviet activity is on the rise in Cape'Verde and Moscow probably is
pressing for a new fishing agreement. If the Soviets also renew pressure for
military access, the Praia government may eventually give in. Signs of the
greater Soviet presence are everywhere. The embassy appears to be the
Soviets' largest in Africa. Soviets are heavily involved in harbor
rehabilitation and they use the Praia airport to rotate fishing fleet crews.
State/INR concludes that Cape Verde is up for grabs; it will deal with anyone
who will provide assistance. The Soviets may want to use Cape Verde for ocean
reconnaisance by TU-95 aircraft.
2. Trend Commentary:
Poland
In the wake of recent strikes, the Community met to assess events and
discuss the outlook for Poland over the next few months. The following is the
NIO/Europe's "sense of the Community" report on that meeting. Labor unrest
will continue over economic issues but unrest is unlikely to escalate into a
nationwide movement. The regime will crush unrest if it shows signs of
spreading nationwide. The impasse in Polish society has deepened and each of
the country's major institutions the regime, Solidarity, the Church, the
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official unions, and the Sejm--has been divided by recent unrest. Prospects
for economic recovery, social dialogue, and national reconciliation have been
set back. Although the resolution of the Gdansk strike gives the regime the
opportunity to negotiate from a position of relative strength, there is no
sign that it wants serious social dialogue.
Events in Poland will engender government caution elsewhere in Eastern
Europe, but are not likely to spur workers to action. The Polish events were
not of Gorbachev's making and are not related to his reform program. The
unrest is not likely to alter his approach to Eastern Europe, much less his
domestic strategy.
The basic elements of the Polish government's program are unaltered and
Poland's evolution depends basically on internal developments. We should be
wary of concluding that US leverage has increased. At best, the US can
continue at the margins to play a role in promoting movement toward economic
reform and internal liberalization.
Hungary
Community analysts met recently to discuss the outlook for Hungary through
the rest of 1988; following is a "sense of the Community" report of that
meeting. The new Hungarian leadership rode to power on a pledge to effect
major changes in economic and political structures that had long been blocked
by the ousted Kadar regime. It is, however, burdened by an enormous debt
burden that makes economic recovery doubtful in the near term. It also faces
high popular expectations for rapid change. To implement needed austerity
measures, the new leadership must win popular support, or at least
aquiescence, through a credible reform strategy and political concessions.
The likelihood of both radical reform and major unrest will increase.
The wholesale leadership changes revealed the depth of frustration and
dissatisfaction among party rank-and-file after years of drift and erosion of
the Party's role under Kadar. While new leader Grosz appears forceful, the
new leadership as a whole is likely to be weak and divided for the next few
months and change probably will be evolutionary until it sorts itself out.
The key to the near term will.be the leadership's ability implement effective
reform while containing rising public expectations for political change. Over
the longer term, the scope of conceivable change has expanded considerably.
Other East Europeans will be watching how the Hungarians handle issues like
plant closings and layoffs for a model of how they can handle similar
problems. The Hungarian succession may also embolden the rank-and-file in
other East European parties to exert pressure from below for change.
Implementation of major reforms would magnify the pressures already created by
Gorbachev; reformers would become more assertive even as conservative regimes
took repressive countermeasures. Western governments will be caught between a
desire to encourage liberalizing reform and the reality of Hungary's poor
economic situation.
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India/Pakistan
Tensions between India and Pakistan continue and clashes over the Siachen
Glacier are likely this summer, but the Community does not expect a major
confrontation soon. The Pakistanis probably will seek to avenge their defeat
on the glacier last summer with an assault on Indian positions in June or July
but the battle will stay localized. Bilateral tensions also include
allegations by Prime Minister Gandhi of unspecified "Sikh training camps" in
Pakistan; Sikh-related killings in India have doubled in each of the last two
years. In addition, both countries are developing missiles and India will
almost certainly accelerate its efforts if Pakistan fields a missile.
The Saudis' CSS-2 Acquisition
Saudi Arabia continues its CSS-2 deployment program. Construction has
proceeded at a rapid pace in recent months. The Community has discovered a
new base at Rawdah, which appears to be a missile storage facility. The King
Khalid Military City may be associated with the CSS-2 and missiles have
arrived at the Red Sea port of Jiddah. There is evidence that Pakistan has
served as a transshipment point for Chinese personnel and equipment in support
of the program.
Senegal
Urban unrest in Senegal appears to have peaked, now that opposition leader
Wade is out of jail, but student demonstrations and protests over economic
grievances probably will continue.
3. The NIO/Warning notes these additional areas of warning concern:
Nicaragua
The Sandinistas are making preparations to attack the Resistance
militarily but are likely to hold off in the near term to avoid renewal of US
lethal aid to the rebels. They undoubtedly will continue to try to isolate
the Resistance politically, encourage divisions in the Resistance Directorate,
and maintain the diplomatic high road of appearing to want a peaceful
solution. Nevertheless, they apparently are making plans for major military
strikes aimed at defeating the Resistance on the battlefield.
The regime is improving its military position. Managua has been
increasing its military strength during the ceasefire period and, according to
continues to prepare troops and supplies. It already
has s ronq positions opposite major Resistance enclaves in Honduras.
President Ortega plans to strike
--perhaps by mid-July--and intends a
final defeat of the Resistance by December. the
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offensive will include defeat of Resistance forces during sustained combat
operations featuring national mobilization; this could involve strikes into
sanctuaries in Honduras. The plan also includes surrounding the US Embassy in
Managua, harassment of Embassy personnel, and cut-off of utilities to the
Embassy--preludes to breaking diplomatic relations. Managua's reported plans
are consistent with the operations of some other Communist regimes as they
have consolidated power and are consonant with Nicaraguan defector Major
Miranda's revelations of ultimate Sandinista intentions.
Pakistan/US
United States relations with Pakistan soon could be aggravated by one or
more of a series of thorny issues. President Zia may be unwilling to meet
Congressional demands for modification of Zia's behavior--including a disdain
for democracy as shown by his summary dissolution of parliament last
month--that could affect the course of negotiations on US weapons sale,
particularly the E-3 airborne warning and control system, and US economic
assistance.
Zia faces difficult domestic political troubles and major external dangers
that will influence his decisions. He may renege on promises to restore the
course of democratization following the dissolution of parliament last month.
The growing perception of a threat from India probably will keep Zia committed
to acquiring Chinese M-9 and possibly CSS-2 missiles, domestic ballistic
missile development, and the acquisition of nuclear weapons. Moreover, Zia
has his own interests in a "solution" to the situation in Afghanistan that
could lead to disputes with Washington. Mounting economic problems and the
need for aid will tend to mute his opposition to US concerns, but he will be
sensitive to criticism at home that he is taking orders from the Americans.
With the unifying mutual interest of a Soviet withdrawal receding into
history, bilateral political relations are likely to remain strained for some
time to come. Over the longer-term, bilateral tension and perceived US moral
imperialism could lead Zia and his successors to follow Saudi Arabia in
adopting positions more independent of the US and perhaps yet closer to China.
North.Korea
The construction of four SA-5 firing positions at Pyongsan, just north of
the Demilitarized Zone, poses an increased threat to US SR-71 reconnaisance
aircraft, other US and South Korean military aircraft, and commercial
airliners using the international airport at Seoul.
North Korea's immediate objective probably is to create a sense of
insecurity about the Seoul Government's ability to protect athletes and
visitors traveling to the Olympics. P'yongyang consistently has indicated
that it'intends to find ways to disrupt the games. North Korea probably
expects that word of the construction will become public soon and that it will
aid its propaganda campaign directed. at undermining confidence in South
Korea's efforts to provide'security for the Olympics.
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On a broader scale, P'yongyang is also intent on upgrading its air
defenses to counter the steady US and South Korean modernization of their air
forces in the South. The threat to SR-71 flights, which the North considers
to be particularly provocative, must be considered high.
South Korea
The most serious threat to Seoul's hopes for a trouble free, well attended
Olympics in September may be rowdy radical students who can project an
international image of instability in South Korea. Only a comparatively few
radicals can accomplish a lot. US efforts to counter a possible North Korean
threat--such as plans to station a carrier battle group off the Korean coast
during the Games--could be used by radical leaders to incite the students to
more violence. South Korean security forces can control demonstrators, but
radicals probably will be able to cause some trouble during the Olympics,
inflame anti-US sentiment, and ultimately serve the North Korean regime's
objective of discrediting the Seoul-hosted Games.
Libya/Chad
Libyan leader Qadhafi's abrupt recognition of the Habre regime in Chad has
bought Tripoli more time to prepare covertly Chadian rebels to renew
hostilities in the disputed Aozou strip--possibly before the end of summer.
Qadhafi's diplomatic maneuver follows a late May failure by the Organization
of African Unity to resolve claims by both countries to the mineral-rich Aozou
area, which Libya has held since 1973. Habre does not plan to re-initiate
hostilities for now, but has reinforced his troops in the region. He has
bounced the ball back to Qadhafi--whom he deeply distrusts--with a bid to
resume diplomatic relations and a guarded offer to talk. Habre hopes that
over time Qadhafi will tip his hand on his true intentions to African and
world leaders.
Libya wishes to expand the buffer between its positions in the Aozou and
thousands of Chadian troops within- a range of about about 75 miles to the
south. Because Tripoli's own forces in the area suffer major morale problems
and because previous losses in Chad have caused public criticism, Qadhafi is
unlikely to risk Libyan casualties in a major offensive soon. Instead, he is
attempting to rebuild and supply a Chadian rebel force that could challenge
Habre's claim to control of the country. Since early May, Libya has
cooperated with rebel leader Goukouni to transport at least 200 Chadian rebels
to Tripoli from Nigeria and other West African countries through Benin.
Libya/Africa
In recent months Libyan leader Qadhafi has initiated a policy of
cooperative diplomacy to mask an infrastructure that supports terrorism and
subversion throughout Africa. He has used a variety of established
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mechanisms--commercial firms, People's Bureaus (embassies), and cultural
societies--to support terrorism against his own dissidents abroad and
subversion aimed at other African leaders in order to influence their policies
vis-a-vis Libya.
o Front trading companies and Libya-African Airlines provide logistical
support to terrorist operations by transporting weapons and explosives to
subversive elements in west and central Africa.
o People's Bureaus in Accra, Cotonou, Kampala, and Lagos give direct
support to subversive elements in those countries. Kenya recently closed the
People's Bureau in Nairobi as a result of its unacceptable activities.
o Student recruiting, often under the false guise of academic or
religious training, brings thousands of students from various African
countries to Libya for paramilitary training. In particular, anti-Chadian
rebel groups benefit from this scheme.
o The World Islamic Call Society and the Green Book Study Society,
"missionary" groups located throughout Africa with a heavy concentration in
Benin, The Gambia, and Ghana, provide a cover for Libyan terrorist support and
recruitment.
To protect and provide more venues for his undercover operations, Qadhafi
has recently made diplomatic overtures to Liberia, Nigeria, Tunisia, and Chad,
offering in some cases to renew diplomatic relations and in other cases to
cooperate on political, economic and educational efforts. In order to improve
communication between Libya and its neighbors, Qadhafi has begun a program of
liberalization on the home front, including renewed public appeals for
dissidents to return to Tripoli. He may temporarily curtail operations
against dissidents abroad while attempting to woo them home. But given
Libya's entrenched infrastructure throughout Africa, Qadhafi will continue his
pursuit of insurgency and terrorism in the region.
Israel/Saudi Arabia/China
Israel soon could strike Saudi Arabia's CSS-2 intermediate range ballistic
missiles. A strike would be consistent with previous Israeli attacks on Arab
facilities it believes to be particularly dangerous. The Israelis clearly are
concerned about the introduction of ballistic missiles in the Middle East and
the increased use of chemical weapons by Iran and Iraq. They have conducted
an unusual series of long-range training exercises recently that could prepare
aircrews for an attack on harbor facilities as missile equipment arrives or
the missile bases in the desert; alternatively, the training may, be in
preparation for raids on Libyan or Iraqi chemical weapons production
facilities. A'harbor strike would generate some international criticism, but
probably would be successful and play well at home. Less likely, the Israelis
could opt to sink Chinese vessels at sea, simplifying their military problem
but endangering a long-standing beneficial relationship with Beijing. In
either case, an Israeli attack would generate criticism of the US for not
reining in Tel Aviv. Israel's gain might be fleeting; China probably would
replace any missiles destroyed.
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Saudi Arabia/Iran
The annual Hajj pilgrimage of Moslems to Mecca and other holy sites this
July already is straining Saudi/Iranian relations and will give Tehran
additional opportunities to strike at Saudi Arabia, including sabotage its oil
facilities. Tehran appears already to be gearing up for a major test of Saudi
security. It intends both to punish the Saudis for their support for Iraq and
to gain revenge for the deaths of several hundred Iranian pilgrims in Mecca
last year when security forces fired on rampaging demonstrators. Iran has
begun to line up sympathetic non-Iranian Shias and reportedly had intended to
send 150,000 Iranians--undoubtedly including many Revolutionary Guards--to
Saudi Arabia, despite the Saudi intent to limit the number of Iranians to less
than 50,000; it announced in mid-June that it will deliver no Iranians.
Even if it sends no pilgrims, we expect Tehran to try to foment trouble in
the predominantly Shia Eastern Province, challenge the legitimacy of the Saudi
royal family, attack more economic targets, spread propaganda among other
pilgrims, and generally disrupt the Hajj. Riyadh probably will have trouble
controlling the crowds even with the assistance of security forces from other
Islamic states and will blame Tehran for disturbances. Attacks on the sizable
American community would make good on Iranian threats to punish the US for its
"support" of Iraq; they also would be embarrassing for the Saudis and thus
desirable for Iran. In any case, bilateral ties are likely to be strained
still further.
Iran/Israel
The apparently growing, effective use of chemical weapons by
Iraq--including recent chemical attacks in the Al Faw and Fish Lake
areas--could lead Tehran and Tel Aviv to collaborate to attack the Samarra
production facility that is turning out an estimated 15 metric tons of agent
per day. There is some evidence that Iraq is concerned about the possibility
of such an attack and has expanded facility defenses. Israel and Iran long
have had a military relationship aimed against Iraq, and Tel Aviv could offer
the Iranians intelligence, planning, operational, and logistical assistance
for such an operation. Although less likely, Israeli commandos might stage a
heli-borne assault from Iranian territory. Cooperation also could include the
use of Israeli aircraft, perhaps painted in Iranian colors, to attack the
plants from Iranian airfields despite heavy air defenses and Israeli
assessments that the large--25 square kilometer--Samarra complex is best
suited to ground attack. Both countries operate US-made F-4 aircraft.
Alternatively, planes flying directly from Israel could refuel in Iran.
Chances of success would be limited. Any attacking force would have to be
large and well prepared; it probably would suffer losses. Moreover, Iraq has
another complex in central Iraq that could maintain production and Iraq's
chemical weapons inventory would not be affected.
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President Garcia's erratic governing style could trigger a military coup
before the end of the year if he continues to support measures that are
unpopular with conservative military leaders. US business interests could be
threatened during the unrest accompanying a coup, or if Garcia decides to
counter broad dissatisfaction with the crumbling economy by nationalizing
US-owned companies.
the military and government long have simmered because of Garcia's lack of
support for the Army's counterinsurgency campaign, the poor level of military
armaments and supplies, favoritism shown by the President to the ruling
party's paramilitary, and his leftist international policies. Officers are
likely to resume plotting if Garcia does not change his policies towards the
armed forces. Garcia could also cause coup planning to resume--in attempting
to appeal to the beleaguered poor and middle classes--if he impulsively
presses for any of the following measures:
o Constitutional changes, which would allow him to extend his term of
office by at least two years beyond 1990. In late April, Garcia shocked armed
forces officers by suggesting they support him in altering the constitution to
allow him more time to complete his failing economic, anti-drug, and
counterinsurgent programs.
o Acceleration of nationalization of major industries. To appeal to the
poor, Garcia in the past has nationalized several private banks and off-shore
oil facilities. He has also threatened to take over more private-sector firms
to increase government revenues. Such a move would affect US-owned companies
in the petroleum, copper, and pharmaceutical industries. Already, Peru's
economic outlook is deteriorating because foreign oil companies are reluctant
to invest because of the current political climate.
o Turning foreign policy sharply leftward. New commercial and military
agreements with the USSR and Cuba would further increase those countries'
influence in Peru. Garcia is close to concluding at least one major
arrangement with the Soviets on fishing rights and may soon reach another with
the Cubans. He has also expressed interest in military assistance programs
with Cuba and the East bloc, which would open Peru further to the presence of
military advisers from these countries.
Military officers do not relish the prospect of staging a take-over
because of Peru's deep-seated ills and their.loyalty to the constitution.
Furthermore, a recent Ministry of Interior investigation into charges that the
Army has massacred civilians in its counterinsurgency campaign has cast broad
public suspicion on the military and lessened prospects for public support for
a. military take-over. Army officers would almost certainly resume planning to
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overthrow Garcia, however, if the President should decide to use the massacre
charges to crack down on the military.
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