NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00091R000500100001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 27, 2016
• Document Release Date: September 24, 2012
• Sequence Number: 1
• Publication Date: March 25, 1987
• Content Type: REPORT

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Director of TO
Central
Intelligence
National Intelligence Daily
Wednesday
25 March 1987
25X14
-top mcm
CPAS ID 87-069JX
25 March 1987
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Contents
Ten Secret
Italy: Andreotti Abandoning Bid To Form Government .............. 5
Mozambique: Status of Insurgency ............................................ 6
West Germany-USSR: Visit to Moscow ...................................... 8
Nordic States: Stalling on Nuclear-Free Zone ............................ 8
Sri Lanka: Insurgents Strike Back .............................................. 9
China-US: Trying To Sidestep FMS Program .............................. 10
China-Portugal: Agreement on Macau ........................................ 10
India: Failure of New Space Launch Vehicle ................................ 11
Special Analyses
Central America: Reactions to the Arias Peace Plan ................ 13
Spain: Gonzalez Government Under Fire .................................... 15
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ITALY: Andreotti Abandoning Bid To Form Government
Prime Minister-designate Andreotti's apparent abandonment of
his efforts to form a new government will move Italy one step
closer to a national election.
According to press accounts, Andreotti, a Christian Democrat, will
return his mandate to President Cossiga today unless the Socialists
agree to his proposals for averting the referendums on civilian nuclear
energy and judicial reform currently scheduled for 14 June. The
Socialists yesterday, however, strongly reiterated their position that
the referendums be held.
Comment: Cossiga prefers to avoid early elections and, over the next
few days, may ask another Christian Democrat or a leader of one of
the smaller coalition partners to seek to form a government to lead
the country until the election scheduled for next year. He could also
toy with the idea of forming a government of "technicians" drawn
from outside the party leaderships
Any effort undertaken by Cossiga to preserve the current parliament
however, is likely to founder. The Christian Democrats will be
reluctant to offer another candidate and will oppose any governing
formula that does not involve cancellation of the referendums-their
party expects it would suffer embarrassing defeats on both issues.
The Socialists, for their part, will continue to insist on holding the
referendums and on other demands lust as unacceptable to the
Christian Democrats.
Should Cossiga conclude he has no choice but to dissolve parliament,
as seems likely, the Socialists and Christian Democrats will clash on
the leadership of an interim government and over the timing of an
election. The Socialists will demand that Prime Minister Craxi remain
in office through the election and that the vote be held in late June,
allowing him to reap publicity benefits from hosting the Western
economic summit in Venice earlier that month. The Christian
Democrats will insist that Craxi be replaced by a Christian Democrat,
or a national leader such as a Senate President Fanfani, and that the
vote be held no later than the end of May to ensure cancellation of the
referendums
Top Secret
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Top Secret
MOZAMBIQUE: Status of Insurgency
talks with the RENAMO guerrillas.
Fighting in north-central Mozambique has been heavy over the
past month, and President Chissano appears committed to a
military solution despite rumors of government plans to begin
limane recently captured two towns
along the Zambezi River, and sma i _ in
the major towns they captured last month,
a
- - a e en route to the towns now occupied by
a_ weweans, according to US Embass
Provinces over the pV~e-'M-'Ch;oorr.4~_
the US Embassy. The insurgents have overrun se
ye_
Ziml can unit into Malawi,
,aJJpGa44W"1 Try
headquarters and seriously damaged_s__omeeconomic targets.
They also attacked_ imba'bw" and Tanzanian positions along the
Zambezi ;, ver" n Iicting light casualties and driving a small
negotiations.
-LMuwTwbAe'~the South African press and Mozambican exiles claim that
Maputo is considering talks with RENAMO, possibly to clear the way
for emergency food deliveries to the interior. In several recent public
statements, however, Chissano has strongly rejected entering
likelihood of RENAMO reoccupying those towns.
them. A Zimbabwean withdrawal would significantly increase the
Comment: Fighting will remain heavy throughout north-central
Mozambique during the dry season, which runs from April to
November. In a departure from past practice, Zimbabwean troops
have remained in liberated towns, suggesting an increased military
commitment and a lack of confidence in the Mozambicans' ability to
hold territory. The Zimbabwean units are vulnerable to attacks and
supply problems, however, and Harare may soon decide to withdraw
prospects for its amnesty program.
Chissano is unlikely to enter into serious negotiations or agree to a
"food truce" with RENAMO because he wants to avoid boosting the
insurgents' legitimacy. Maputo may initiate exploratory contacts,
however, as part of its counterinsurgency strategy to exploit
increasing divisions within the insurgent movement and to improve
Top Secret
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Top Secret
West German President von Weizsaecker and Foreign Minister
Genscher have accepted a Soviet invitation to visit Moscow in early
May, according to press reports. Soviet officials earlier claimed they
had told West German interlocutors that a presidential visit and a
formal apology by Chancellor Kohl for his comparison of General
Secretary Gorbachev and Nazi propaganda minister Goebbels last
October were necessary before Kohl could visit Moscow or
Gorbachev would travel to Bonn,
Comment: Bonn probably believes the invitation is confirmation that
Moscow is moving to improve relations after Kohl's speech to the
Bundestag last week, even though that address included no apology.
The Soviets may continue to show their displeasure, however, by
offering no commitment on any visit by Kohl or Gorbachev and giving
preferential treatment to other West German leaders such as
Genscher, who has strongly praised current Soviet domestic reforms.
Both sides will use the visit to express support for an INF agreement
and for expanding East-West trade. They also may conclude bilateral
agreements on nuclear energy and environmental cooperation
NORDIC STATES: Stalling on Nuclear-Free Zone
At their twice-yearly meeting in Reykjavik this week, the Foreign
Ministers of Denmark, Finland, Iceland, Norway, and Sweden
probably will again defer creating a high-level working group to study
the establishment of a Nordic Nuclear-Weapons-Free Zone.
Comment: Sweden and Finland will push hard for the working group,
which they see as a necessary step toward reaching a consensus on
creating a nuclear-free zone. Iceland-the strongest opponent of a
zone-will seek to block movement on this issue at least until the
Foreign Ministers' meeting in August. The Danes, sensitive to
perceptions that the smaller Nordic states are being bullied by their
larger partners, will probably support Iceland. If an intergovernmental
working group were created, some believe it would only serve to
"study the issue to death" while keeping it from the purview of more
radical parliamentary committees
Top Secret
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Top Secret
Recent Attacks by Tamil Insurgents
Gulf
of
Mannar
Indian
Ocean
0 50 Kilometers
i ~ ICI I ~ I~
0 50 Miles
Insurgent attacks
Palk
Bay
Tamil-
Bay
Of
Bengal
0
Vavuniya. inhabited
nsurgent attack
Medawachchiy
/ Serunewab- rea
Anuradhapura fSinhal(se villagers Bay
bssacred r \ of
I Bengal
Sinlja a
inhabited area
r' .%
%
NEW
DELHI
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and capturing eight, and 25 Sinhalese villagers are said to have been
killed by Tamil militants in the North Central Province. Government
spokesmen claim the insurgents are seeking to provoke attacks by
Army positions on the Jaffna Peninsula, killing at least ive soldiers
to-pzrt, the Liberation Tigers of Tamil Eelam have attacked
five attacks against government installations since
Ton Secret
SRI LANKA: Insurgents Strike Back ~
The largest Tamil insurgent group in Sri Lanka has launched at least
security forces.
Comment: The Tamil attacks, probably aided by recent arms
deliveries from India, are the first in nearly two months and mark a
shift from the insurgents' strategy of "fading away" instead of
engaging government forces. Their initial success suggests that the
Tigers' capabilities were not seriously hurt by recent government
military operations. New Delhi probably hopes to get negotiations
egaim bye and will raise objections if Colombo's
retaliation causes si nificant Tamil civilian casualties.
Top Secret
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200 of the new fighters during the early 1990s.
in order to avoid extending the already lengthy, expensive Foreign
Military Sales procedure Beijing reportedly plans to produce about
CHINA-US: Trying To Sidestep FMS Program
The Chinese recently askedra/firm for help in placing Aderavionics
technology intended for their F-8-2 fighter into a new-generation
fighter aircraf
hopes to make use o e avionics after completing the F-8-2 program
Comment: Using the avionics package designed for the F-8-2 in the
new aircraft will be impossible unless the company gaining the F-8-2
contract installs the package; no other firm will have access to the
package's software documentation. FMS rules prevent Beijing from
choosing the company to provide the F-8-2 avionics, but the Chinese
may hope to encourage a low bid from that firm by suggesting future
will travel to Beijing next month to sign the joint declaration
between China and Portugal, which this week produced the
agreement to return Macau to Chinese administration on 20
December 1999. Portuguese Prime Minister Cavaco Silva reportedly
CHINA-PORTUGAL: Agreement on Macau
Beijing has acceded to Lisbon's request that Macanese and local
Chinese entitled to Portuguese citizenship be allowed to hold
Portuguese as well as Chinese passports, according to press reports.
That issue was the focus of the fourth and final round of negotiations
recognize the Portuguese passports only as travel documents.
Comment: The terms of Macau's transfer are likely to be modeled
after the Sino-British Joint Declaration on Hong Kong, but Macau lags
far behind Hong Kong in preparations to train local Chinese to
administer the territory. The Macau Government will probably
implement a program in the interim to facilitate the transfer of
administration to local Chinese and Macanese, in part to prevent a
flight of Portuguese passport holders to Portugal. China's apparent
concession on passports conflicts with its nationality law-citizens
of China cannot hold dual nationality-and Beijing probably will
Top Secret
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Too Secret
India: Augmented Space Launch Vehicle
Top Secret
Fourth stage
Spacecraft
Heat shield
Third stage
Second stage
First stage
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Too Secret
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INDIA: Failure of New Space Launch Vehicle
The highly publicized first launch of India's new space booster-the
Augmented Space Launch Vehicle-ended in failure yesterday,
Comment: The failure marks another political problem for Prime
Minister Gandhi, who attended the launch. It is also a setback for
India's space program; the last launch was in April 1983, and the
future of the program depends in part on the success of this space
vehicle. The new vehicle can carry a payload three times the weight of
that carried by India's older booster and is intended to test hardware
for India's next-generation, larger launch vehicle. The next launch,
carrying a West German multispectral optical sensor, was scheduled
for early next year; it,now may be delayed.
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Top Secret
Americas
Europe
Chile's two main labor onfederations staging peaceful,
antigovernment protest y, I ,IS EwWa-s , ro^^r+ .. first such
effort by labor since 198,3.:. major demonstrations unlikely, but
slum area violence, numerous arrests possib e.
Some violence likely during.todstrike by Ecuadorean workers
protesting government's- austerity measures ...pftists seeking
impeachment of President Febres-Cordero ...
poesibte to ... extensive security measures taken.
Large arms cache discovered recently in northern Chile, a
... includes M-16 ammunition, rocket-propelled grenades
.. same items similarly found last year ... terrorists may still have
significant amounts of hidden arms.
British Labor leader Kinnock confirms party would keep US
missiles pending INF agreement but would remove them within five
years ... statement aimed to reassure leftwingers yet make
Kinnock look reasonable during US visit opening tomorrow.)
South African railworkers' strike spreading ... now i
11,000 blacks ... bombing at Soweto train station
nvolves
h4errdnq'
apparently strike-related ... Pretoria's authorization
dismissals may provoke clashes with security forces.
Y
of summar
Uganda last week agreed to broad World Bank, IMF reform
package, according to US Embassy ... Kampala unlikely to meet
terms of accord as political, security sit
a
Bomb blast Amy in Lahore, Pakistan, killed six, injured 52,
target was meeting of anti-
,Shia Sunni fundamentalists ... no evidence of Afghan involvement
... incident will increase local Shia-Sunni tensions.
Tunisian arrested for bombing Djibouti restaurant frequented by
French soldiers may have been recruited by radical Palestinian
group ... it has ties to Lebanese Armed Revolutionary Faction,
whose terrorist leader remains jailed in Paris.
Top Secret
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Top Secret
Key Provisions of the Current Contadora
Draft Treaty and the Arias Peace Plan
Officially would take effect when ratified by all five Central
American countries but would prohibit actions that would
"frustrate" the purpose of the treaty in the interim.
Would create a Verification and Control Commission on
security matters (VCC) made up of four members proposed by
the Contadora mediators and approved by each Central
American country.
Calls for democratic, representative, pluralistic political
systems in accordance with national laws. Would guarantee
equal conditions for all political parties to participate in
election, with guaranteed access to mass media.
Would create commission consisting of the Secretaries
General of the UN and the OAS and Foreign Ministers of the
Contadora Group and the Support Group. Each country facing
an armed insurgency is to form a National Commission for
Reconciliation and Dialogue consisting of representatives from
the government, the internal political opposition, the Catholic
Church, and the Inter-American Human Rights Commission.
Within six months, the Central American Presidents are to
meet to evaluate progress in executing the treaty.
Upon signature, parties in conflict in each country are to begin
a cease-fire. Each government is to begin a dialogue with all
unarmed internal opposition groups and increase the
democratic, representative, and pluralistic nature of its
political system. Within 60 days, governments are to declare a
general amnesty for insurgents and political prisoners; to
restore freedoms of association, assembly, and speech; and to
guarantee free access to mass media. During the first six
months of next year, each government is to hold free, open,
and democratic elections to choose representatives to a new
regional parliament and, after that, equally free elections for
positions at all levels of government in accordance with
existing election schedules.
Treaty unclear on exact timing but apparently upon signature Within 60 days of signing, the five Central American
would require the five Central American countries to begin governments are to begin negotiations on the control and
negotiations to determine "reasonable" levels of arms and reduction of their current weapons inventories and on the
troops. After ratification, parties apparently must suspend all number of their military forces.
military purchases except ammunition and spare parts. Within
60 days, the VCC would suggest limits and a schedule for
reductions. If agreement is not reached, the VCC's proposals
are to be implemented and, over a long term, restrictions on
foreign military advisers, bases, and exercises are to be lifted.
(Continued)
Too Secret
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Top Secret
Special Analysis
CENTRAL Reactions to the Arias Peace Plan
AMERICA:
Costa Rican President Arias's Central American peace plan has
failed to gain more than lukewarm support in the region since
he proposed it in mid-February. The Contadora mediators and
Nicaragua are likely to try to fold it into the existing Contadora
draft treaty.
Arias is optimistic that his proposal will either force the Sandi nist s-to
e$tablish a democratic system or-if Managua refuses to do -help $
to b ild an international consensus not to oppose incr ed..
broad international backing.
Core Four Disunity`
little enthus' sm to try again.
Arias has failed to unite the other reore Four countries-Honduras, El
Salvador, and Guatemala' behind his plan. US diplomatic reporting
indicates that Honduras and E( Salvador have major objections to
the vague military provisions of'his proposal. Tegucigalpa seems
especially concerned that the call for an immediate cease-fire
between governmentsrand insurgents,in Central America would cause
the Contras to retreat to their border camps in Honduras. Attempts
by the Core Fou o meet to coordinate changes in the Arias plan have
failed so far; Honduran officials have told theUS Embassy there is
bepause Nicaraguan President Ortega was not present. Cerezo is
Guatemalan PresidentACerezo, at a
meet' g of the Core Four in February, refused to agree tothe plan
anning to visit Managua soon to discuss the plan, according toAhe
S Embassy in Guatemala City. He has consistently avoided pressi
Managua for significant concessions.
Honduras and El Salvador probably fear t ia ra-and Cerezo
are more interested in promoting themselves as regional statesmen
than in devising a peace plan acceptable to other Central American
democracies. The US Embassy in San Jose reports Arias wants to
include politicians of known pro-Sandinista sympathies in a
delegation he intends to send to Managua to discuss both his plan
,and the Central American summit scheduled later this spring in
Guatemala.
Top Secret
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Top Secret
Key Provisions of the Current Contadora
Draft Treaty and the Arias Peace Plan (Continued)
Would prohibit all political, military, financial, and Upon signature, all external aid to insurgents in the
logistic assistance to groups seeking the removal or region is to end. Each government is to reaffirm its
destabilization of other governments. Would'direct each commitment not to provide safehaven or military
government to devote all available means to deny such assistance of any kind to groups trying to destabilize
groups use of its territory. (No time period stipulated.) other countries.
Would suspend all international military exercises for 90 Not covered.
days after final ratification. Would allow one exercise
per year until the parties agree on limitations on arms
and military forces, after which exercises with forces _
from outside Central America would be prohibited. Only
minor restrictions on national exercises. Controls would
be lifted if an arms limitation agreement were not
reached.
Would eliminate all foreign military advisers within 180 Not covered.
days of signing. The VCC is to propose limits on the
number of technical advisers to be permitted in the
future. Controls are to be lifted if an arms limitation
agreement is not reached.
Would eliminate all foreign military bases and foreign Not covered.
military schools within 180 days of signing and prohibit
the establishment of new ones. Controls would be lifted
if an arms limitation agreement were not reached. - -
Top Secret
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Tom Secret
IThe
Contado roup has already issued .ate, unique pr isia n.g some
ele is of the Arias plan as beneficial to the broader--peace pr-oceis~;.
The Sandinistas initially were wary of the plan, probably because they
were excluded from the early negotiations. In recent weeks, however,
Managua has announced it will attend the meeting in Guatemala and
would accept several key provisions of the proposal-including
dialogue with the unarmed domestic opposition and freedom of the
press-if it were integrated into the Contadora process.
The Core Four will probably try to negotiate a united position in the
coming weeks in an effort to counter Contadora and Nicaraguan
maneuverings. To hold the initiative at least until the five Central
American presidents meet in Guatemala, Arias is likely to pay greater
attention to Honduran and Salvadoran security concerns, but he
probably will not allow changes that would obviously give the
Sandinistas an excuse to reject the plan. er-e~; 41~r Eeux_
via-the S and-ol pear-ing be-o ssirc cting-the-peace-p
d Ag W,st.wac-aa425X1
President Ortega's public offer last week to drop Nicaragua's
objections to US military bases and exercises in Central America-
long a sticking point in the Contadora negotiations-is a sign that the
Sandinistas are again trying to portray _the Core Four's demands as
the sole obstacles to a settlement. n
poin-ts MM-an~ague-prvbabiy hopes. tbat$aiAi v
process,wouid-cei p-lwate US efforts t~ cor~#iraaue r~a~i -rniritMy
aid4e-the~Con r? was andlbat-it wo afs s-ta e o w a i ees as the
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Top Secret
14 25 March 1987
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Top Secret
Special Analysis
SPAIN: Gonzalez Government Under Fire
For the first time in his five-year tenure, Spain's Socialist Prime
Minister Gonzalez faces widespread popular discontent over
social and economic policies. He remains strong politically, but
local elections scheduled for this spring may prompt him to use
the negotiations with the US on use of bases in Spain to score
points with the public and to retain the support of his
increasingly restless left wing.
The prudent economic policies of Gonzalez have served Spain well
since the Socialists came to power in 1982. Inflation fell from 14.4
percent in 1982 to 8.3 percent in 1986; the current account has
improved from a deficit of more than $4 billion to a surplus of $5
billion; and Spain's 3-percent economic growth rate is its best since
1978, exceeding the EC average. Gonzalez has also increased foreign
confidence-more than doubling foreign investment in the country
last year
These gains have not come without cost. Spain has an unemployment
rate of more than 21 percent, the highest in Western Europe.
Moreover, improvements in education and health care under
Gonzalez have been slower than some would like.
Mounting Discontent
Until recently, the public has accepted the government's policies
as necessary to solve Spain's economic problems, but the relative
domestic calm is ending. High school students staged a series of
strikes over the past three months that ended with the government
giving in to demands for lower tuitions and more scholarships.
Farmers and workers have subsequently attacked the government's
plans for restructuring the agricultural and industrial sectors and
maintaining tight control over wages. Doctors, teachers,
transportation workers, and miners are also expressing their
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More worrisome for Gonzalez are the indications of dissension within
Socialist ranks. some party 25X1
members are criticizing him for failing to push social reforms more
vigorously and for remaining aloof from the rank and file. Although
the Socialists' labor affiliate refused to join the recent Communist-
backed worker demonstrations, it has begun to distance itself from
the government's anti-inflation policies chiding the Finance Minister
for his efforts to restrict wages 25X1
Top Se r
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The growing restiveness is also reflected in recent opinion polls.
Some 79 percent of Spaniards believe that unemployment has
worsened this year, although the rate of joblessness actually has
fallen slightly. The public is pessimistic about other social issues as
well, including terrorism, drugs, and health care. Such discontent
could deepen if the police overreact in their effort to control
demonstrations.
Gonzalez, Strong but Vulnerable
Despite the growing dissatisfaction with his policies, Gonzalez
remains personally popular, and the opposition divided and weak.
Polls suggest that if a national election were held tomorrow, the
Socialists would almost certainly win. For a party not used to being on
the receiving end of protests, the recent demonstrations nonetheless
must have had a sobering effect, particularly with regional and
municipal elections to be held in June.
Gonzalez probably
also tears that former Prime Minister Suarez-whose nationalist and
populist rhetoric is increasingly appealing to center-left voters-will
be the net beneficiar of any aeneral unrest and fissures among the
Socialists.
Implications
Despite a generally favorable economic outlook for this year,
Gonzalez is unlikely to alter his policies significantly because he is
strongly committed to preparing Spanish business to face EC
competitors. Instead, he may use foreign policy issues to deflect
criticism of his domestic policies and to solidify his base of support
among left and center voters in the runup to the June elections.
Gonzalez may, for example, play up his government's promise of large
reductions in US forces by publicly highlighting differences with
Washington-a tactic that could further limit Madrid's maneuvering
room in the bases negotiations.
Tot) Secret
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