NATIONAL INTELLIGENCE DAILY SATURDAY 28 JANUARY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100010091-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 27, 2016
• Document Release Date: May 24, 2010
• Sequence Number: 91
• Publication Date: January 28, 1984
• Content Type: REPORT

National Intelligence Daily
Saturday
28 January 1984
CPAS NID 84-023JX 25X1
Director of
Central
Intelligence
26 January 1 W14
Copy , 285
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Contents
Chad-France-Libya: Indications of Conflict ............................
South Africa-Angola: Status of Military Withdrawal ..............
Norway-USSR: Impact of Espionage Case ............................ 4
Turkey: Council of Europe Membership Controversy ............ 5
Lebanon: Impasse Over Status of Druze Officers .................. 6
Israel: Bond Market Under Pressure ...................................... 6
USSR: Remarks on Arms Control Prospects ..........................
Iraq-Iran:
Jordan-Iraq: Pipeline Agreement ............................................ 8
Sudan: Relations With the South ............................................ 10
Cyprus: Turkish Settlement of Varosha .................................. 11
Special Analysis
Yugoslavia-US: President's Visit ............................................ 12
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Libya
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CHAD-FRANCE-LIBYA: Indications of Conflict
French and Chadian Government forces are moving north in
Chad, and the Libyans are reinforcing their air units.
Chadian Government troops are movin northward
rebel troops south of Fada
Yesterday the French ministry of Defense publicly announced
that French forces would advance approximately 100 kilometers
northward to establish control of the area as far as the 16th parallel.
Libya has sent six additional jet
fighters to Aozou in northern Chad and four to Ma'tan as Sarra in
southern Libyan
Comment: The French are likely to support the Chadian
Government's northward advance, but they would prefer to avoid a
conflict with Libyan forces at Fada
The reinforcement of the Libyan air defenses in Chad is in
preparation for possible French airstrikes. The Libyan air inventory in
Chad appears to have been increased to a level near that maintained
during the fighting last summer. Although the air buildup increases
Tripoli's ability to conduct offensive operations, Libya probably is not
prepared to meet a strong French military response.
If the Chadian Government advance stops short of the Libyan
stronghold at Fada, it would probably be engaged by Chadian rebels,
perhaps with limited Libyan air and advisory support. An attack on
Fada itself would significantly widen the conflict.
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Continued South African Presence in Angola
South
Atlantic
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Xangon (pre-operation)
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SOUTH AFRICA-ANGOLA: Status of Military Withdrawal
The South Africans have withdrawn most of their conventional
forces from Angola, but some 1,000 reconnaissance and irregular
troops continue to occupy bases in an expanded salient.
infantry battle groups and other infantry and logistic units have pulled
out of southern Angola.
repulsed an Angolan attempt to retake Cuvelai and is prepared to
reintroduce mechanized infantry units from bases in northern
Namibia to prevent its recapture.
the South Africans expected the
Angolans to nee when attacked and were surprised at their
willingness to fight. The Angolans for the first time used effectively
positioned minefields and conducted counterattacks at night with
Comment: South African forces in Angola are approximately the
same size and composition as before the latest military operation. The
occupation of Cuvelai, which occurred after Pretoria's offer of a trial
30-day cease-fire, extends South Africa's salient northward by more
Any effort by Luanda to reoccupy the town almost certainly would
draw a South African military response that would end any cease-fire.
Pretoria probably would commit lar er forces troduce heavy
armor in any subsequent incursion.
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NORWAY-USSR: Impact of Espionage Case
The recent arrest of an official in the Norwegian Foreign Ministry
on charges of spying for the USSR will affect Oslo's continuing
security policy debate, but is unlikely to do permanent damage to
already cool bilateral relations.
The Norwegian Government yesterday recalled its Ambassador in
Moscow following the arrest last week of Arne Treholt. The Soviet
Embassy says the charge is unfounded and alleges that the case was
deliberately timed to cause distrust at the meeting of the Conference
on Disarmament in Europe in Stockholm. Norway has announced no
further measures, but press reports indicate a number of Soviet
diplomats have abruptly left the country.
Treholt had been under investigation for at least four years and
has admitted passing classified information to the KGB. Oslo says it
believes that Treholt probably has been an agent since the early
1970s, but that he had only limited access to NATO documents.
The government is mostly concerned about Treholt's role in
influencing policy in negotiations with the USSR on the Barents Sea
boundary and fishing rights. According to press reports, Treholt also
wrote a speech in 1980 advocating a nuclear-free zone, a notion the
Labor Party's left wing later established as party policy.
Comment: The long-term effect on relations with the Soviets
probably will be slight, but the issue is certain to affect Norwegian
security policy and politics. Oslo is likely to be less willing to
compromise any time soon on the contested boundary in the Barents
Sea, where Moscow hopes to exploit petroleum deposits.
The incident may halt the rising influence of the Labor Party's left
wing because it casts doubt on the integrity of its causes. Labor also
might find less public sympathy for its nuclear-free zone and nuclear
freeze initiatives, which it had hoped to use to attract support from
the coalition's centrist parties.
The case probably will not come to trial until 1985. The
Conservative Party is likely to exploit it in the parliamentary elections
slated for that year.
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TURKEY: Council of Europe Membership Controversy
Turkey's insistence on sending a delegation to the Council of
Europe's Parliamentary Assembly session next week has become a
point of honor for the Ozal government that could have far-reaching
foreign policy implications.
A number of West European delegates are dissatisfied with
Turkey's democratic credentials and record on human rights and
have threatened to block the seating of its delegation. Council
officials have been trying without success for weeks to work out a
compromise acceptable to Ankara.
Several US Embassies report, however, that there is a chance of
working out a last-minute compromise that would allow Turkish
delegates to be seated while various committees consider the
credentials question. US officials believe such a process could take
longer than the session is scheduled to last.
Comment: Many West Europeans want to avoid a showdown.
One way would be to delay a vote on Turkish credentials until the
Assembly session in May. By that time, local elections would have
taken place in Turkey, and West Europeans worried about Turkish
democracy presumably would have a weaker case.
If a vote takes place on the Assembly floor next week, however, a
majority of delegates probably will reject the Turkish delegation. The
Ozal government almost certainly would then make good on its threat
to withdraw completely from the Council.
A decision by the Turks to withdraw could ultimately disrupt their
relations with Western Europe on a broad range of issues. It even
might scuttle Ankara's hopes to become a member of the EC. In
addition, it would encourage the government-which already would
like to improve contacts with Islamic nations-to play down relations
with the West and increasingly seek ties to the Middle East and
southwest Asia.
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LEBANON: Impasse Over Status of Druze Officers
Druze leaders yesterday rejected Prime Minister Wazzan's offer
to reinstate Druze officers who have deserted the Army since
September. Druze spokesmen dismissed the offer as a meaningless
maneuver by the government because the Army is continuing to shell
Druze and Muslim positions in the mountains southeast of Beirut.
Wazzan claimed that the offer was a serious attempt by President
Gemayel to remove obstacles to the proposed security plan.
Comment: Wazzan's offer only partially addressed Druze
demands that the deserters be promoted and paid all back wages.
Druze leaders, who are apprehensive about a rumored Army
offensive, doubt that Gemayel is sincere about the security plan and
are in no mood to compromise. Their rejection of Wazzan's offer
further reduces the possibility that the security plan will be
implemented. Druze and Muslim militiamen seem prepared for a new
round of heavy fighting.
ISRAEL: Bond Market Under Pressure
Government bonds linked to the consumer price index are being
sold in such quantities that the Bank of Israel has been forced to
intervene to prevent a sharp drop in their price. The US Embassy says
the bank has bought $100 million worth of the bonds this month-
most just this week. Bank officials believe that recently imposed
credit restrictions have prompted businesses to sell bonds to pay
their bills. Civilian employees participating in a work slowdown at the
Ministry of Defense are compounding the problem by refusing to
issue checks to suppliers.
Comment: An erosion of public faith in the government's ability
to deal with economic problems also may be a factor. Promises made
to a small coalition party to ensure its vote on the no-confidence
motion on Wednesday will undermine the austerity budget approved
by the Cabinet last Sunday. Most Israelis probably believe that the
Finance Minister will sacrifice his economic program to keep the
government in office. If the selling wave spreads to the stock market,
the government probably will be forced to spend large sums of money
to prevent another collapse similar to the one last October.
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USSR: Remarks on Arms Control Prospects
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The Director of the Institute of the USA and Canada, Georgiy
Arbatov, used an interview this week with an Italian newspaper to
endorse the one-year moratorium on nuclear missile deployments in
Europe proposed by the Palme Commission-a 17-nation group of
politicians and arms control experts. Although Arbatov asserted that
INF talks can resume only if the situation that preceded NATO
deployments is restored, he called the moratorium proposal "a very
important initiative" that could provide an opportunity to develop new
approaches to deadlocked arms control talks. He also stated that
British and French representatives eventually will have to participate
in INF negotiations, although bilateral discussions between the US
and the USSR will remain necessary.
Comment: Arbatov is the first Soviet official to suggest publicly
since the suspension of the START and INF talks that a moratorium
on further deployments might break the deadlock. His approval of the
moratorium proposal is in line with the USSR's longstanding strategy
of putting pressure on the US by selectively endorsing West European
initiatives. The idea also reflects Moscow's hope that any delay in
NATO deployments would lead to increased public pressure for a
permanent halt. Arbatov's call for eventual British and French
participation in INF talks is the most explicit Soviet statement to date
on that issue.
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Press reports from
bag a state at raqi tig eh r urs ay overflew Tehran and a
number of other Iranian cities and that artillery units fired on Iranian
positions east of Al Basrah.
Comment: The Iraqi overflights were intended to warn Tehran
that Baghdad can retaliate with airstrikes deep inside Iran if an
offensive takes place.
JORDAN-IRAQ: Pipeline Agreement
Jordan's King Hussein and Iraq's Deputy Prime Minister
Ramadan agreed in principle yesterday to the "immediate"
construction of a pipeline across Jordan to the Red Sea, according to
the US Embassy in Amman. Baghdad is insisting on US participation,
and it intends to award the construction contract directly to a US firm.
Representatives of the firm are scheduled to begin negotiations early
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Comment: It will take up to two years to build the proposed
pipeline, which will have a capacity of 1.5 million barrels per day. The
project will cost a minimum of $1.5 billion, and government
guarantees probably will be necessary to ensure that financing is
available-most likely from the oil industry. The prospect of increased
oil revenues would give a psychological boost to the financially
pressed Iraqis and remove some of the domestic pressure to intensify
the war. It also may induce Iran to revise its war-of-attrition strategy. 25X1
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Influential southern leaders, encouraged by the regime's
conciliatory gestures, have decided to try to negotiate a political
settlement with the government
In recent days President Nimeiri and some of his closest
adviser s have met with a number of leading southern politicians
including some released from jail earlier this month.
Comment: Some of the southerners, now inclined to negotiate,
until recently were contemplating active opposition to the
government. They are sure to demand greater autonomy for the south
in any talks. Even if these political leaders reconcile with the regime,
several armed dissident factions will continue their operations
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NICOSIA
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UN officials in Cyprus have told the US Embassy that a dozen
Turkish families recently were allowed to occupy vacant houses in a
section of the Greek Cypriot town Varosha. The town was evacuated
during the hostilities of 1974 and cordoned off by Turkish troops. The
move is not yet widely known. Varosha has long been a focal point in
the intercommunal talks, and Turkish Cypriot leader Denktash earlier
this month proposed that the UN take control of a large part of the
town as an interim step toward partial Greek resettlement.
Comment: The Turkish Cypriots could move to settle all sections
of Varosha not offered to the Greeks in Denktash's proposals. Both
Denktash and Ankara probably hope to goad the Greek Cypriots into
accepting their terms for a Cyprus solution, but Greek and Greek
Cypriot leaders are likely to harden their stance against negotiating
with the Turks. Denktash also may believe this action will appease
those Turkish Cypriots who are demanding that Varosha be opened
up for settlement.
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Special Analysis
President Spiljak, during his visit to the US next week, will seek a
demonstration of Belgrade's political importance to Washington and
help in dealing with the IMF. The Yugoslavs have made no progress in
controlling inflation, and political bickering is blocking structural
reform of the economic and political sectors. Military impatience is
increasing as the public loses confidence that the divided leadershi
can manage the country's problems under the present system.
On the plus side, Yugoslavia has made substantial progress in
improving its external financial position. Belgrade achieved a
$100 million surplus in its hard currency current account-as
compared with a $1.4 billion deficit in 1982-primarily by cutting back
imports and by diverting exports from CEMA to the West.
Total net foreign debt is virtually unchanged from the figure of
$18 billion in 1983, however, and Yugoslavia needs debt relief again
this year. Devaluation, higher interest rates, import cutbacks, and
other measures also have contributed to economic hardships. Real
wages and the standard of living continued to decline in 1983,
inflation accelerated to an annual rate of 59 percent, some consumer
goods are in short supply, and energy shortages are forcing
scheduled outages of electricity.
Financial Needs
This year the current account is likely to improve less than it did
last year, and a surplus of $350 million is expected. The devaluation,
combined with economic recovery in the West, may stimulate exports.
Any increase in hard currency exports will have to be based on
growing production, and Belgrade plans to increase hard currency
imports of raw materials and intermediate goods.
The Yugoslavs are not requesting new money this year, but they
need to cover between $2.9 billion and $3.4 billion in maturing debt. If
agreement with the IMF cannot be reached in the next month on
prices, interest rates, and foreign exchange policies, foreign trade
could be damaged and other economic dislocations could result.
Spiljak and other Yugoslav leaders exaggerate US influence over IMF
policies, according to the US Embassy, and expect Washington to
push the Fund for concessions.
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Political Concerns
Uncertainty is increasing in Yugoslavia as Spiljak and most
members of the collective Federal Presidency prepare to leave office
in May as part of the constitutional rotation process. The Embassy
reports that the popular mood is souring as legislation on reforms is
stalled. The political stalemate-reflected in Premier Planinc's threats
to resign over lack of action on key policy measures-has prompted
even some prominent party members to criticize the leadership's
irresolution.
There is even increasing speculation of forceful military
intervention in politics. Military leaders, including the Defense
Minister and the Chief of Staff, have publicly criticized the political
leadership's handling of the economic crisis and called for action
against recalcitrant leaders.
The Defense Minister last month attacked speculation about the
Army usurping power, but he upheld the Army's right to "defend the
revolution."
many military officers believe they have o
become involved in all aspects of decisionmaking. Despite such
criticism. y has pledged loyalty to the political
system.
Nevertheless, political pressure from the generals probably will
increase. If continuing economic problems lead to popular unrest,
military leaders will turn to civilian hardliners to restore stronger
central authority.
International Issues
Yugoslavia recently signed a trade protocol for 1984 with the
USSR, its largest trading partner. In seeking US assistance with the
IMF, Spiljak may implicitly threaten that Yugoslavia will turn more to
the East rather than accept IMF demands for more austerity.
Although the Soviets have complained to Yugoslav officials about
Belgrade's economic ties to the West, Moscow cannot meet
Yugoslavia's needs for financial support and technology
Yugoslavia has refocused some of its foreign policy initiatives on
Europe as its prestige in the Nonaligned Movement has declined since
President Tito's death in 1980. Belgrade is alarmed by the effect of
US-Soviet rivalry on European security, and, while critical of both
superpowers' policies on INF, blames NATO's missile deployments for
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aggravating regional tensions. Yugoslavia is an active member of the
neutral and nonaligned bloc in the Conference on Disarmament in
Europe, and it is urging its partners to submit their own list of
confidence- and security-building measures.
Belgrade supports the Arabs in their disputes with Israel, and it
periodically tries to mediate between Iran and Iraq. The Yugoslavs
have tried alienating either the US or Cuba on Central
America.
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