NATIONAL INTELLIGENCE DAILY THURSDAY 19 FEBRUARY 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00091R000400060001-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 27
• Document Creation Date: December 27, 2016
• Document Release Date: August 31, 2012
• Sequence Number: 1
• Publication Date: February 19, 1987
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/11/21: CIA-RDP88T00091R000400060001-7
oirector Of I LBIl .MCGIF
.s.t, Central 25X1
Intelligence
National Intelligence Daily
Thursday
19 February 1987
Top Sccret
CPAS NID 87-040JX
reoruary 1137
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Top Secret
Contents
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Philippines-US: Preparing for Negotiations on Bases
1
Lebanon: Amal on Defensive
2
USSR-Iran: Foreign Minister's Visit to Moscow
3
North Yemen-US: President Salih's Trip Deferred
4
China: Agricultural Policy Under Debate
5
Notes
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India-USSR: Negotiations for Reactors
6
France-US: Trade Minister's Visit
7
EC-US: EC Members Likely To Avoid Oilseed Dispute
7
Chad-Libya: Habre's Maneuvers
8
Afghanistan: Severe Food Shortages
8
Uganda: Rebel Attacks in North
9
South Africa: ANC Reactions to Tambo's US Visit
9
In Brief
10
Special Analyses
USSR-Nicaragua: Materiel Assistance Reaches New High
11
Guatemala: Military's Growing Unease
13
South Korea: Ruling Party's Constitutional Strategy
15
17
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PHILIPPINES-US: Preparing for Negotiations on Bases
Manila is starting to review its options for the military basing
agreement with the US as a first step in preparing for bilateral
discussions on the future of the bases that might begin later this
year.
Philippine Ambassador to the US
Pelaez, seeking an early start to bilateral talks on the bases, recently
pressed President Aquino for a decision on whether to extend the
agreement beyond 1991?when either party may give notice of its
intention to withdraw?or to give the US notice that the agreement
will be terminated in 1991. Aquino reportedly wants to delay a
decision until after Philippine congressional elections in May,
however, in order to consult the new legislature.
several options are being discussed in
various Philippine agencies at this early stage of Manila's efforts to
define a strategy. Working-level officials have considered beginning
the regular five-year review of the agreement with the US late this
year or early next year but postponing a decision on terminating or
extending it.
Some have proposed scrapping the existing agreement for a new
25-year treaty if the US would agree to giving Manila greatly
increased levels of aid. Others have recommended, as an extreme
option, terminating the agreement, perhaps in conjunction with a
resolution at the ASEAN summit in Manila later this year that would
call for the withdrawal of Soviet and US forces from the region by
1992.
Comment: Ambassador Pelaez and senior Philippine defense officials
favor retaining the US bases, but Aquino's public position has been
ambiguous. She has promised only to keep her options open until
1991. Some senior officials view a new basing agreement as a means
of obtaining more US aid.
Although public opinion polls show that a majority of Filipinos favor a
continued US military presence, the vocal minority that is strongly
opposed will ensure a stormy debate. Under the recently approved
Philippine Constitution, a new agreement must win the approval of at
least two-thirds of the Philippine Senate, and the Philippine Congress
can decide whether the agreement should be presented to the public
for approval in a national referendum.
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Druze and Communist Attacks 15-18 February 1987
Mediterranean Sea
Mediterranean
Sea
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O 1 Kilometer
O 1 Mile
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19 February 1987
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LEBANON: Amal on Defensive
Tnn qpnrpt
The pro-Syrian Amal militia is losing ground in heavy fighting in
West Beirut against the combined militias of the Druze and the
Lebanese Communist Party.
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The attacks by the Druze and the Communists reflect theirj perception
that Amal is losing cohesion. Amal leader Nabih Barri has been in
Damascus for more than three months, which has compromised his
effectiveness during the sputtering war over the Palestinian refugee
camps in Lebanon. Daoud Daoud, a popular local leader and Amal's
key military and political official in southern Lebanon, resigned from
Amal on 10 February, according to press reports
Comment: Political and military problems have undercut Amal's
position in West Beirut. Even with the aid of the predominantly Shia
6th Brigade of the Lebanese Army, Amal's campaign against the
Palestinians has been unsuccessful; the latest rounds of the camps
war, particular!y in southern Lebanon, have spread the Shia militia's
forces thin.
Daoud's resignation, although as yet unconfirmed, would be a serious
blow to Amal's prestige and greatly diminish the organization's ability
to influence events in southern Lebanon. Amal's rivals?the Druze,
the Communists, the Palestinians, and Hizballah?probably see
Daoud's resignation and Barn's reluctance to return to Lebanon as
signs of a major political crisis within Amal
Syria is probably not yet ready to move against Barri but may be in
touch with his rivals within Amal. Damascus is now trying to halt the
fighting in West Beirut, which is between factions generally
considered its allies. If it is unsuccessfurS, yria may carry through on
its threats to send more troops to Beirut.
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USSR-IRAN: Foreign Minister's Visit to Moscow
Iranian Foreign Minister Velayati's two-day visit to Moscow last
week saw both sides rehash old negotiatin stances in a series of
apparently acrimonious exchanges.
Velayati met with Soviet Foreign Minister Shevardnadze, President
Gromyko, Premier Ryzhkov, and Konstantin Katushev, who led the
USSR's delegation at the meeting of the bilateral economic
commission in Tehran two months ago.
Press accounts on both sides characterized the talks as frank. TASS
and lzvestiya quoted Gromyko as saying that Soviet and Iranian
views on the Iran-Iraq war did not coincide and that ending the war
through negotiations was a matter of common sense. He also said
that Iran bore full responsibility for its support of the Afghan
insurgents. The Iranian press tried to give a more optimistic view of
the talks by referring to economic cooperation proposals discussed in
December, the return of Soviet technicians to Iran, and the
resumption of Aeroflot se n. No joint communique was
issued following the talks.
Comment: The Velayati visit marks the highest level contact between
Iran and the USSR since the Iranian revolution. The absence of a joint
communique indicates the two sides remain far apart on important
issues, especially the Iran-Iraq war and Afghanistan.
Even on the issue of economic cooperation, where there is the
greatest potential for progress, the visit produced nothing specific.
Moscow probably views political gain as the most important reason
for negotiating trade agreements with Iran, but the Soviets do not
appear willing to make even a gesture toward economic cooperation
until they see signs of Iranian flexibility. The USSR will probably
continue to permit contacts to proceed, but at the pace it chooses.
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NORTH YEMEN-US: President Salih's Trip Deferred
North Yemeni President Salih's decision not to visit the US at this
time reflects his doubts about the benefits of a close relationshi
and a growing concern about the stability of his regime.
In addition, according to the US Embassy in Sanaa, North Yemeni
security forces uncovered a possible plot against Salih by a group of
military officers last month.
Comment: Salih is under fire from military and tribal leaders for his
handling of the South Yemeni exile issue and relations with the Saudis
and Soviets, and for his failure to secure Western military aid. US
arms sales to Iran and the issue of the $18 million have damaged
Washington's credibility in Salih's eyes. Furthermore, both Libya and
Iraq have been urging him to distance himself from the US, pressure
that Salih is not in a position to ignore. He will not proceed much
further in improving ties until he is sure of the value of a closer
relationship. In any case, Salih cannot afford the likely negative
domestic and foreign repercussions of too sharp a move away from
Moscow because of North Yemen's heavy dependence on Soviet
arms and advisers.
The President almost certainly wants to visit the US but may also be
reluctant to leave the country now. He is facing the most serious array
of domestic and external pressures since the height of the National
Democratic Front insurgency in 1981. Military and tribal leaders are
increasingly questioning his leadership and, in some cases, are openly
challenging his authority. Salih will not hesitate to deal ruthlessly with
his military opponents but may be less inclined to use force against
the tribes and risk losing their already tenuous support for his
government.
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19 February 1987
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Top Secret
CHINA:
Agricultural Policy Under Debate
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China's annual party guidance on rural policy?usually issued in
January?has been delayed, probably because of disagreements 25X1
on economic policy that have intensified since the fall of General
Secretary Hu Yaobang last month. 25X1
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?Althifrese offi ssrolficers, in Beijing last December
thathe draft guidance called for greater_incentivOs to-increase grain
output?ideally above 1984's record crop of 407 million metric tons.
These incentives-would include raising the price the government pays
for grain and allowing peasants to sell more of their output on the
market rather than to the state. The draft also called for higher state
investment in infrastructure and technology. 25X1
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Party conservatives prefer strong administrative measures to
increase grain output, which they believe is too low because peasants
have moved-into more lucrative cash crops. Several conservative
editorials have attacked the diversion of land from grain and called
attention to income disparities that run counter to Communist values.
Comment: Without the party guidance, peasants must decide
themselves what spring plants to put in. They will probably continue
to go with cash crops in lieu of grain, feeding conservative criticisms
of incentive-based reform policies. Raising grain prices would strain
China's budget or, if the increases are passed on to consumers,
prompt anger among urban residents who often perceive that only
farmers have benefited from the reform program thus far. At the same
time, the conservative prescription of levying more stringent grain
output requirements would not be welcome among peasants.
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INDIA-USSR: Negotiations for Reactors
The 'Indian Government has decided to begin negotiations with the
Soviets to purchase nuclear power reactors.
India plans to use nuclear
energy to augment its commercial power supply, which fell about
11 percent short of demand last year. Nuclear-generated output has
suffered largely because of persistent technical problems with
indigenous heavy water power plants. 25X1
Comment: New Delhi apparently realizes that reliance on indigenous
reactors alone?long a major goal of India's nuclear power
program?will prevent the government from meeting its ambitious
power and industrial growth targets for the 1990s. The Gandhi
government can probably blunt domestic criticism of buying abroad
by emphasizing that the Soviets are likely to offer concessionary
financing and that Moscow will not ask India to place its entire nuclear
program under safeguards. Indian concerns about financing and
safeguards are still likely to prolong the negotiations. Moscow and
pro-Soviet elements in India will view the decision as a sign that Indo-
,Soviet relations remain vigorous.
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France:
Michel Noir
Age 42 . . . Trade Minister for less than
one year but appears to be increasing his
influence on major trade policy decisions
. . . close to Prime Minister Chirac, a
driving figure behind right's free-market
economic theories . . . nonetheless willing
to support protectionist measures for
high-technology industries, agriculture,
textiles . . . has recently lashed out at US,
accusing Washington of "Rambo-style"
trade war . . . relies heavily on expert staff
in negotiations . . . has reputation for
independent, impulsive behavior. . .
speaks some English.
3119472-87
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FRANCE-US: Trade Minister's Visit
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Trade Minister Noir arrives in Washington today to serve notice of
French unhappiness with recent US-EC trade developments.
According to the US Embassy in Paris, he wants to discuss
agriculture, Airbus, the new GATT round and preparations for the
Western economic summit in Venice.
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Comment: Noir will stress France's desire to cooperate with the US
on trade?perhaps citing its agreement to launch the GATT round. He
nonetheless will also register France's growing irritation with what it
perceives as an increasingly demanding US economic policy, and
argue that his government cannot continue to give in. Predictions for
French trade performance are gloomy, and Prime Minister Chirac is
under pressure to produce successful economic results in order to
revive his flagging popularity. Noir will argue that France paid a heavy
price in the settlement of the US-EC trade dispute over the entry of
Spain and Portugal to the Community. He will also emphasize the
importance of the recently unveiled Airbus to the French economy
and rebut suggestions that the firm engages in predatory pricing
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EC-US: EC Members Likely To Avoid Oilseed Dispute
The EC Commission has recommended tax and subsidy proposals
that threaten US soybean exports to the EC, which are worth more
than $2 billion annually. It proposes that a new tax be levied on EC
producers of vegetable oil and that the proceeds be used to subsidize
EC oilseed growers, leaving US and Asian exporters of oilseeds at a
competitive disadvantage. The tax would also be intended to
encourage the consumption of butter in the Community over
margarine, which is made from oilseeds. EC stockpiles of butter
currently amount to 1.3 million tons
Comment: The EC's agriculture ministers are likely to reject the
proposed tax when they consider it later this spring, fearing the
prospect of serious trade disputes with the US and Asian exporters of
oilseeds. The UK, West Germany, the Netherlands, and Denmark
oppose the tax and would be able to block its adoption under EC
voting rules. EC members have rejected similar proposals to tax
vegetable oils three times over the past 15 years.
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7 19 February 1987
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Libyan forces
di garrison
Progovernment forces
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French forces
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19 February 1987
zi?
Bahr
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Abeche
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Egypt
Sudati
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CHAD-LIBYA: Habre's Maneuvers
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Chad probably will increase its harassment of Libyan forces in the
north over the next few weeks in order to forestall an expected Libyan
counterattack on Fada. N'Djamena has infiltrated troops to positions
near Libyan units in the Tibesti region, north of Faya-Largeau, and
around Ouadi Doum
Comment: Chadian guerrilla efforts in the past have had little success
deterring Libyan preparations for offensive activity. Still, Habre
probably hopes he can divert Tripoli's attention and take pressure off
Fada. Successful negotiations with Goukouni?the most prominent
Chadian leader other than Habre?would give the President a major
propaganda victory and help him discredit Tripoli's claim to a role in
Chadian reconciliation. The extent of Tripoli's control over Goukouni
remains unclear. He is probably constrained by concern for the safety
of his family and followers, who remain in Libya. Goukouni's stay in
Algiers may provide his final opportunity to come to terms with Habre
and remain a force in Chadian politics.
AFGHANISTAN: Severe Food Shortages
Afghanistan faces a severe food shortage that will almost certainly
increase the regime's dependence on the USSR for imports but ma
also hinder the ability of the resistance to sustain its forces.
food production has
diminished and predicts a 40-percent rise in prices by summer.
I food shortages and rising prices, coupled with high
unemployment, have prompted many people to leave Kabul in recent
months.
Comment: Most of the problems are probably the result of
inadequate precipitation, the ravages of combat, and problems in
transporting food from areas that produce surpluses to those
suffering a deficit. Continuing food shortages will make it difficult for
the regime to persuade refugees to accept national reconciliation and
return to Afghanistan. Some of those leaving Kabul and other areas
will probably go to Pakistan, further aggravating tensions there
between refugees and the local population. Unless late-winter
precipitation compensates for current inadequate snow levels, there
will be another year of poor harvests in some regions.
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UGANDA: Rebel Attacks in North
Ugandan President Museveni is concerned about increasing rebel
activity in northern Uganda and will soon use helicopter gunships and
light strike aircraft piloted by Libyans against the insurgents,
The rebels temporarily overran the
district capital of Gulu on Sunday, capturing arms, ammunition, and
uniforms Army units nearby
avoided engaging the insurgents, who killed or wounded many
civilians before fading into the bush.
Comment: Two months ago, Museveni publicly pledged to defeat the
rebels by May, but the chance of a victory by then is virtually nil. As
the insurgents increase their attacks, the Army, beset by sagging
morale and poor discipline, is becoming less willing to engage in
combat. Museveni's failure to fulfill his pledge will probably erode
support for the government in both the Army and among the public.
Moreover, Uganda's increasing dependence on Libyan and Soviet
military aid will further damage Museveni's standing with his
conservative supporters in Uganda and hurt Kampala's relations with
such neighboring states as Kenya and Zaire.
SOUTH AFRICA: ANC Reactions to Tambo's US Visit
Senior ANC members reportedly were pleased with the meeting last
month between ANC President Tambo and Secretary Shultz and
believe that Tambo should meet aaain with the Secretary if he travels
to southern Africa. despite
some initial opposition, the ANC's executive committee unanimously
agrees that the talks demonstrated that the US is willing to maintain
high-level contacts and set a precedent for future meetings. The ANC
also reportedly is pleased with the recently issued recommendations
of the Secretary's Advisory Committee on South Africa.
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Comment: The ANC clearly believes it has scored an important
diplomatic victory with the visit, although some officials are still wary
of establishing closer relations with the US. The group's preference
that the next meeting between Tambo and the Secretary take place in
southern Africa probably reflects a desire not to appear too eager to
pursue contacts.
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In Brief
Americas
? As many as 2,000 demonstrators marched through capital of
Suriname past two days calling for Head of Government
Bouterse's ouster rfirstinfljor public demonstrations against
regime since 1982.
Mexican judge reportedly dropped charges against businessmen
in custody nearly two years for helping drug kingpin Rafael Caro
Quintero flee Mexico ... authorities probably hoping US attention
has subsided enough to close discreetly such cases
Nicaraguan rebels last week destroyed two electrical towers near
power plant 50 miles north of Managua ... guerrillas claim several
cities blacked out for two days..
- Colombian drug traffickers, seeking release of Carlos Lehder, plan
to kidnap US official ? ?
attempt reportedly to occur before Lehder's scheduled court
appearance in Florida next month.
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Middle East Iran expelled two West German diplomats, closed three
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consulates, threatened trade retaliation to protest television spoof 25X1
of Ayatollah Khomeini ... Tehran unlike!y to risk commercial links
to its second-largest trade partner. 25X1
? Tripoli has televised executions of nine Islamic activists charged 6
with murdering Revolutionary Committee official and conspiring to
attack Soviet personnel, commit sabotage ... Qadhafi
underscoring hard line against unrest in Libya. 25X1
? More than 1,200 arrests in Syrian crackdown on persons flouting
austerity program, _ _
idprimarily shopkeepers in Damascus selling goods above official
prices ... crackdown to be extended to Aleppo.
Soviet parliamentary delegation arrived in Sudan
according to Soviet press... continues both sides' efforts to
improve relations... trade protocol may be signed, according to
Sudanese press.
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To
Estimated Value of Warsaw Pact Military
Deliveries to Nicaragua, 1982-86
Million 1986 US $
600
East
European
500
400
USSR
300
200
100
0 1982 83 84 85 86
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Top Secret
Special Analysis
USSR-NICARAGUA: Materiel Assistance Reaches New High
(
The estimated value of Warsaw Pact military deliveries to
Nicaragua rose 108 percent last year, while Moscow's percentage
of the total value climbed from 74 percent to 93 percent. The
Soviets' unprecedented efforts to mask the timing and content of
some shipments suggest Moscow is trying to disguise its
increasingly direct role as Managua's arms supplier and to
minimize Washington's ability to respond to the increase in
Soviet assistance.
Last year, the Soviets delivered approximately 17,000 tons of military
materiel worth an estimated $537 million, including 24 MI-17 assault
transport helicopters, six MI-25 helicopter gunships, and more than
1,300 military vehicles. Four AN-26 transport aircraft and a leased
AN-30 aerial survey aircraft were sent via Cuba. Ammunition, spare
parts, and other supplies, which characterized the bulk of deliveries in
1985, remained at high levels last year.
By contrast, East European deliveries dropped to approximately
$38 million last year, down from $72 million in 1985. East Germany
delivered the majority of this aid, which consisted of vehicles and
spare arts. Poland supplied two MI-2 light utility helicopters via
Cuba
In the past, Moscow has used other countries, including Algeria,
Bulgaria, and Cuba, to transship Soviet weapons. Materiel is almost
certainly shipped to Nicaragua from Cuba on the Nicaraguan and
Cuban ships that travel regularly between the two countries, but the
quantity and type of cargo delivered is generally unknown. A Cuban
ship may have delivered as much as 4,300 tons of unidentified military
cargo in containers to Corinto in August,
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Top Secret
Special Analysis
GUATEMALA:
o?
Military's Growing Unease
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pc,
Recent coup plotting by both junior and senior Guatemalan
officers underscores the military's discontent with President
Cerezo's economic policies and other issues. The High Command
backs Cerezo for now, but its support could dissipate quickly if
he backslides on the military's counterinsurgencyff rt or there
is widespread civil unrest over the next year. 25X1
Cerezo av1ded serious confrontation with the military during is first
gram
rights.
fears
year in office
and refusing to
Cerezo accomm
among officers tha
y publicly endorsing the counterinsurgency pr
rosecute officers for past abuses of huma
ates the military on most issues, easin
he might embark on a radical path,
The officer corps has given Cerezo a fr
e hand and,
despite misgivings, co inues to voice support for his conomic and
foreign policies.
Troublesome Issues
The armed forces are most conc rned
the lack of a rural development pr gra
control the growing movement for I
disorder and fuel popular support fo
that (sing consumer prices,
m,? d Cerezo's failure to
orm could lead to civil
e insurgency
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The military is also trouble y Cerezo's caprous leadership style
and has doubts about his ntentions.
he return to Guatemala
many exiled
extremists, some of om plan to form a leftist park and infiltrate
labor, has heighten /d the military's suspicions that tft President
might give poten ally radical groups too much leeway. Ithough
Cerezo has rej, ted calls by the insurgents for a dialogue s-they
lay down theXarms, the military leadership is wary of his willingness
to talk eve,K informally with representatives of the guerrillas,
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continued
Ton Secret
19 February 1987
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TOP Secret
While the military largely backs the governmen '-s-policy of "active
neutrality" in relations with Nicaragu officers believe Cerezo is
overly accommodating to the S s whose su ort has hel ed
he Guatemalan i
some militar eaders delieve the reduction in US military aid
from 5 million I year to 2 million this year reflects Washington's
displeasure Cerez ' stance. They also fear that "active
neutrality" could lead to Cerezo's acceptance of recent diplomatic
over,r6s by Cuba and other Communist countries
Despite mounting tensions, the military is unlikely to move against the
President in the immediate future the
military is convinced that the countly's transition to democratic
government has improved Guatemala's international image and
secured more economic and military aid.
Recent changes in the military's command has placed officers loyal to
Cerezo in key positions, The
newly appointed Defense Minister, General Gramajo, back-iterezo
and is himself widely supported in the officer corps, especially by
'unior officers. He is likely to keep military discontent under control.
As the guardian of national security, however, the military would
probably feel justified in removing Cerezo if his economic policies
resulted in severe domestic turmoil or increased popular support for
the insurgents or if he adopted a conciliatory position toward the
insurgency or Communist countries. Limited prospects for economic
growth this year, continued high unemployment, declining living
standards, and a recent 30-percent hike in electricity rates have
increased the likelihood of popular unrest
Top Secret
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14 19 February 1987
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Declassified in Part - Sanitized Copy Approved for Release 2012/11/21: CIA-RDP88T00091R000400060001-7
Top Secret
Special Analysis
SOUTH KOREA: Ruling Party's Constitutional Strategy
The human rights issue has forced South Korea's ruling
Democratic Justice Party to push its deadline for revising the
Constitution from next month to the summer. Some party
strategists idoubt, however, that even then will they have the
opposition votes needed to pass the government's proposal for a
parliamentary system. President Chun's advisers are exploring
other options, including extending the President's term and
returning to the constitutional issue after the Olympics in 1988.
Ruling party leaders also are trying to anticipate how much
pressure the US will put on Chun to be more flexible on political
reform.
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Since last summer, the party publicly has espoused compromise on
constitutional reform while the security services worked privately to 25X1
buy or coerce opposition votes. 25X1
The strategy unraveled last month, however, following
demonstrations sparked by the death of a student in police custody.
leaders of the ruling party believe that the
incident?graveiy_clamaged their chances for swinging over enough
opposition voteJ even conservative members
of the opposition are increasin?gly-wl about being perceived as
turncoafy
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Among themselves, some members of the ruling party reportedly
favor sidestepping constitutional revision until after 1988. Chun,
however, holds the reins tightly, and party leaders are reluctant to
stake a new position on the revision issue without his approval. With
Chun's future political role in the balance, no politician is willing to
propose strate les the President would interpret as a challenge to his
objectives. 25X1
Chun's Perspective
Chun already may be actively considering other ways to handle the
succession:
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Top Secret
19 February 1987
Declassified in Part - Sanitized Copy Approved for Release 2012/11/21: CIA-RDP88T00091R000400060001-7
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To ? Secret
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The President appears increasingly frustrated with the success his
opponents are having exploiting human rights abuses and other
issues to block his revision agenda. Although his flexibility has
surprised his antagonists in the past, Chun currently seems inclined to
follow the hard line his security services are urging. 25X1
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The US Factor
g the South Korean Government
was worried by the Assistant Secretary of State's recent speech
stressing the importance of an apolitical military and Chun's
retirement from politics in 1988. Chun
apparently is concerned that a heartened opposition may push harder
for political liberalization.
_ -
commen ary rom "as ing on,
althou_gh so far there is no evicience-that-they-have-tried-tIrruadge
Chttil-to-las-rmarellexible. According_t_g_tte_ErnbassOhe moderates
still hope to use the promise of reforming the election'oode?a major
opposition demand?to entice opposition leaders back to the
bargaining table on constitutional reform.
Top Secret
16 19 February 1987
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Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/11/21: CIA-RDP88T00091R000400060001-7