NATIONAL INTELLIGENCE DAILY FRIDAY 13 NOVEMBER 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T01422R000100100003-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 23, 2016
• Document Release Date: October 18, 2013
• Sequence Number: 3
• Publication Date: November 13, 1987
• Content Type: REPORT

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Director of
Central
Intelligence
A
National Intelligence Daily
Friday
13 November 1987
--roirSeetet
CPAS NID 87-264JX
13 November 1987
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Contents
Arab States: Reported Syrian Shift on Iran-Iraq War 2
Angola-USSR: Cuban Troop Withdrawal at Issue 3
Yugoslavia: Government Collapse Possible 4
Romania: Headed for Grim Winter 5
Notes
Nicaragua: Opposition Party Divides 8
El Salvador: New Killings Plague Government 8
Bangladesh: Government Arrests Opposition Leaders 9
Vietnam-Cambodia: Hanoi May Join Talks 10
USSR: High Cost of Industrial Modernization 11
In Brief
12
Special Analyses
China-India: Border Talks Open in New Delhi 13
Tunisia: Prospects for New Government 15
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ARAB STATES: Reported Syrian Shift on Iran-Iraq War
Jordanian officials believe Syria has dramatically altered its
position on the Iran-Iraq war, but differing accounts of Syrian
support for the authoritative final resolutions capping the Arab
League's summit suggest Damascus may still be weighing its
options.
A senior Jordanian official has told US Embassy officials in Amman
that Syria will not submit reservations on any summit resolutions and
that it will restore diplomatic relations and open its border with Iraq
within two weeks. The Jordanian official claimed that the resolutions
are still in draft and will not be available before next week. He said
that financial inducements were not responsible for the changed
Syrian position.
Bahraini Foreign Minister Khalifa, however, has told US officials in
Manama that Syria has already stated its intention to reserve on key
resolutions, including Arab League support for Kuwaiti measures to
protect its shipping and the possible implementation of the Arab
defense pact. Adding to the confusion about the resolutions, the Iraqi
News Agency has published texts of summit resolutions it claims were
issued by the League in Amman; no other source has put out any
version of the resolutions. Moreover, Syrian Foreign Minister Shara
has publicly discounted the reports of a reconciliation between
Damascus and Baghdad.
Comment: If the Jordanian official's account of Syria's position is
accurate, it would represent a major shift in Syrian tactics on the
Iran-Iraq war. Still, Damascus would almost certainly try to maintain
its ties to Tehran and seek to use its support for League criticism of
Iran primarily as a way to extract major financial assistance from the
Gulf Arab states.
Arab League resolutions?not the final communique issued on
Wednesday?represent official League positions, and League
members have 10 days from the date they are issued to reserve on
any or all of them. Syria, for example, reserved its position on several
resolutions critical of Iran that were issued by the Arab League
foreign ministers when they convened two months ago.
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ANGOLA-USSR: Cuban Troop Withdrawal at Issue
The Angolan Government appears to be trying to gain Soviet and
Cuban approval for a new, more flexible proposal on Cuban
troop withdrawal.
During his visit to Moscow last week for the 70th anniversary of the
Bolshevik Revolution, President dos Santos almost certainly
discussed his new plan calling for a more rapid withdrawal timetable
for Cuban troops in exchange for a South African departure from
Namibia under UN Security Council Resolution 435. According to US
diplomatic reporting, Angolan Chief of Staff N'dalu and Foreign
Minister Dunem visited Havana and Moscow last month to discuss the
new plan. African specialists in the Soviet Foreign Ministry said last
week that Moscow does not oppose the US-Angolan talks but
believes Havana should be included in the Cuban troop withdrawal
negotiations.
Comment: The recent failure of Luanda's military offensive against
UNITA may have increased the leverage of dos Santos and other
senior officials within the regime who favor flexibility on the
withdrawal issue in order to constrain South Africa's ability to support
UNITA and to improve relations with the West. Because the security
of the regime is dependent on Moscow and Havana, however, the new
proposal is subject to their approval.
Havana almost certainly will continue to delay any agreement on a
timetable that would call for a rapid withdrawal of its forces. Although
direct Cuban participation in the talks might help provide Fidel Castro
a face-saving way out of Angola, he almost certainly is concerned that
a withdrawal would damage his international prestige unless he can
present it as a victory. He also probably is concerned about the
problems of reintegrating 37,000 Cuban military personnel into an
already weakened economy.
As part of a general Soviet effort to appear supportive of political
solutions to regional conflicts, Moscow may adopt a more flexible
public position on the negotiations. In private, the Soviets will not
press the Cubans on a withdrawal at this time because Soviet-Cuban
ties are already tense and because a continuation of the status quo
would not threaten Soviet interests. Moreover, Moscow would gain
little by this pressure because it probably calculates that South
African intransigence on withdrawal from Namibia will stall
negotiations.
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Top Secret
YUGOSLAVIA: Government Collapse Possible
Chances are growing that the government of Premier Mikulic
will fall within the next six months.
The first test comes today as debate on Mikulic's revised
anti-inflation program begins in the Federal Assembly. The
government's original plan to curb inflation, now running at
135 percent annually, had to be rewritten after strong opposition from
several regional assemblies. Should Mikulic's latest plan fail to win
support, delegates reportedly may seek his resignation through an
unprecedented vote of no confidence.
Another hurdle will come soon, when Belgrade asks Western banks
and governments for new debt relief, probably on terms that will
provoke sharp confrontation. Creditors have told Belgrade that any
new agreement must include an accord with the IMF?probably a
standby involving strict oversight. Mikulic has pledged publicly to
avoid a formal IMF standby program
A third test comes next May, when the government faces a
constitutionally required vote of confidence midway through its
four-year term. Until now, such votes have been pro forma.
Comment: Mikulic is likely to survive the current crisis, but chances
are about even that he will resign or be forced from office by next
May. He has publicly linked his tenure to the economy's recovery, the
prospect of which is poor, and he will probably grow increasingly
frustrated by regional opposition to his programs. Mikulic's pride may
lead him to resign rather than face the public humiliation of a
no-confidence vote.
If Mikulic goes, his successor is no more likely to be capable of
overcoming fractious regional interests and implementing the reforms
the economy badly needs. Under an informal regional selection
process, his successor is likely to be drawn from the more backward
southern republics, which are less inclined to follow market-oriented
policies. Any successor, however, is likely to continue Belgrade's
longstanding foreign policy of balancing between East and West.
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Top Secret
ROMANIA: Headed for Grim Winter
The outlook for the economy this winter appears unusually bleak,
and the recent appointment of a former head of the security
service as Interior Minister and other personnel moves probably
reflect the regime's fear of a growing potential for unrest.
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Many Romanian officials are deeply concerned about this winter's
food supply, The grain crop this year 25X1
was about 15 percent less than that in 1986, and some other crops
also fared poorly. 25X1
Energy supplies will be taut; Romania's electrical generating capacity,
according to recent information, is at best no higher than it was last
winter, when several sectors suffered cuts of 30 percent in gas and
electricity. Sharp cuts in energy supplies to households were
announced this week, much earlier in the cold season than in past
years. Factories and enterprises are likely to face shortages of other
materials. In a move to force enterprises to become more efficient,
President Ceausescu recently announced the government will seize all
stocks of raw materials, leaving enterprises only sufficient materials
to meet short-term production goals.
Comment: Ceausescu could avoid further deterioration of the food
supply by purchasing grain on the world market, but he is unlikely to
do this because of his determination to use scarce hard currency to
reduce Romania's debt. The regime presumably hopes the recent
purge of high-level energy officials?who had failed to ensure proper
maintenance of some power plants?will remedy problems with
electricity supplies, but inadequate fuel to generate electricity will limit
improvements in the power supply. If Ceausescu follows through on
his orders to confiscate raw materials from factory stocks, many
enterprises will experience increased disruptions.
The populace, fearful of the security service, has accepted significant
deprivation over the past several years. But the regime presumably
realizes that the economy will experience more than its usual serious
winter troubles and that the people are facing reductions from last
winter's marginal food and energy supplies. Ceausescu's power
appears firm, but his elevation of a security expert to head the Interior
Ministry indicates that he is taking no chances in ensuring the
continued loyalty of the security service, the regime's chief mainstay.
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NICARAGUA: Opposition Party Divides
A split within Nicaragua's major opposition party apparently will
further hinder efforts by regime opponents to press the Sandinistas
for democratic reforms. The US Embassy reports that Social Christian
Party President Erick Ramirez barred his rival's supporters from the
party's congress last weekend. Ramirez, whose opponents have
accused him of cooperating with the Sandinistas, also withdrew the
party from the opposition alliance?the Democratic Coordinadora.
Comment: The Social Christians have long been plagued by
infighting; the latest split is the worst in their history. The party has
been the opposition group most successful in organizing grassroots
support, but its recent troubles will hurt its organizational work at the
local level and thereby further reduce the opposition's prospects for
winning municipal elections and seats in the planned Central
American parliament. Without the Social Christians, the opposition
alliance will probably find it more difficult to organize antigovernment
marches.
EL SALVADOR: New Killings Plague Government
Three well-publicized killings in El Salvador in recent weeks are
probably unrelated, but they may presage a resurgence of politically
motivated murders as elections slated for next spring draw near. The
two most recent victims appear to be farmworkers, whose murders,
according to the US Embassy, may have been a common crime
disguised to appear politically motivated. The government has made
little progress in investigating the killing of a prominent leftist human
rights activist late last month. His death derailed government
negotiations with the rebels. Meanwhile, a recent UN study accuses
the insurgents of widespread summary executions of civilians and
indicates that political killings of civilians by the military continue to
decline.
Comment: Both the extreme left and radical right benefit from such
killings, which both discourage leftists now in exile from returning to
participate in next year's legislative elections and serve as a pretext
for the insurgents to avoid meaningful peace negotiations. On
balance, however, the left gains more in propaganda terms when a
prominent leftist activist is killed, because the government is almost
always blamed for such murders, even though government links to
rightwing extremist groups have been dramatically reduced since
1984.
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BANGLADESH: Government Arrests Opposition Leaders
President Ershad's use of mass arrests, including the detention of
both major opposition leaders, and of steps to prevent demonstrators
from entering Dhaka have stopped the opposition from fomenting
enough disorder to topple his government. According to US Embassy
and press reports, police put Nationalist Party leader Begum Ziaur
Rahman and Awami League leader Sheikh Hasina Wazed under
house arrest on Wednesday to undercut the opposition's momentum.
A general strike called by the opposition was observed throughout the
country yesterday.
Comment: The opposition, which plans to announce its next step
today, aims to create enough turmoil to provoke the military to
intervene and bring to an end the rule of the unpopular Ershad. The
security situation would have to deteriorate significantly more than it
has so far for that to happen. the
opposition may call for daily half-day strikes?already announced for
tomorrow and Sunday?to keep the government on edge, but it is
unlikely that strikes alone will energize the campaign against Ershad.
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VIETNAM-CAMBODIA: Hanoi May Join Talks
Vietnamese Foreign Minister Nguyen Co Thach may meet with Prince
Sihanouk in France before the end of this year to discuss Cambodia,
Thach reportedly will either attend the
proposed meeting between Prince Sihanouk and People's Republic
of Kampuchea Prime Minister Hun Sen or meet separately with
Sihanouk. Topics for discussion are likely to include the composition
of a postsettlement government,
Comment: Vietnam may have concluded the time is right to
participate in talks after recent tactical adjustments in China's
position on Cambodia and on the future role of the Khmer Rouge.
Hanoi probably senses an opportunity to animate further the
diplomatic process and to increase the Khmer Rouge's isolation?or
even to begin discussing its role in a settlement, with an eye toward
minimizing that role. Although Vietnamese participation would
improve the chances for more substantive negotiations, Hanoi wants
its client regime to appear to be leading the effort and therefore
would keep a low profile.
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USSR: High Cost of Industrial Modernization
Late last month, in a public lecture that once would have been
remarkable for its frankness, a Soviet economist painted a grim
picture of the backwardness of the USSR's industries, blaming the
enormously inefficient use of labor and material resources for poor
industrial performance. He noted that 50 million workers?a third of
the labor force?are performing manual labor in the USSR, a figure
unchanged since 1970, and complained that 35 billion rubles are
spent annually on machinery maintenance and repair. The economist
also said that "Siberian economists"?a reform-minded group
increasingly prominent under General Secretary Gorbachev?have
estimated the cost of modernizing the country's industrial base at
3.5 trillion rubles.
Comment: Although the reference to 3.5 trillion rubles?five times
the gross national product?undoubtedly includes more than capital
investment, it underscores the huge commitment of resources that
would be required to modernize Soviet industry. Effective
modernization would require that most new investment be targeted
not only for equipment and processes that improve the quality of
industrial output, improve labor productivity, and reduce repair
expenses but also for developing the vast infrastructure to use it,
including extensive worker training.
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In Brief
Americas
Middle East
? Nicaraguan Cardinal Obando in Washington through tomorrow to
consult with Ortega, members of Congress, rebel political leaders
... reportedly wants to discuss procedures for cease-fire talks
before agreeing to serve as mediator.
? Cuban military advisers going to Algeria in January to train
Polisario, . . . previous aid
limited mainly to medical personnel, some training in Cuba ...
Algiers likely to impose strict controls.
USSR opening trade office in Guatemala early next year,
. agreement concluded during congressional trip to
Moscow in August ... President Cerezo, sensitive to military
opposition, unlikely to establish diplomatic ties.
? Saudi press reports first meeting in more than year between North
Yemeni, Saudi heads of state... both sides looking to ease
tensions caused by continuing border problems ... Saudi aid also
likely to be discussed.
Europe ? Panic buying in Poland fueled by fear of inflation worsening under
reforms ...
East Asia
.. people skeptical regime can
increase consumer goods, stabilize prices.
? Bulgaria announcing auctions to lease hundreds of small
businesses to individuals ... first attempt at private enterprise,
major part of economic reform ... any postponement of next
month's party conference could delay further reform.
? China's National People's Congress leaders to appoint acting
premier to replace Zhao Ziyang, says Chinese press...
traditionalists' choice Li Peng favored ... Zhao's willingness to
resign suggests reformers won significant concessions.
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Special Analysis
CHINA-INDIA: Border Talks Open in New Delhi
Chinese Vice Foreign Minister Liu and Indian Foreign Secretary
Menon meet today in New Delhi for the first round of border talks
since tensions along the frontier increased last spring. Neither
side is optimistic that the negotiations?the latest in a series
begun in 1981?will result in a delineation of the border.
A Chinese diplomat told US Embassy officials
in New Delhi early last month that progress during this round would
be very difficult, and Chinese academics subsequently told US
diplomats in Beijing that there had been no sign of change in official
Indian views on the boundary dispute.
Troop Dispositions
Both sides seem to have tried over the bast few months to reduce the
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9gyi
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diplomatic reporting indicate
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that New Delhi has postponed a reinforcement exercise along the
Chinese frontier until late next year.
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The necessary military forces remain in place, however, for renewed
tension next sprino should the current round of talks yield no political
breakthrough.
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continued
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No Sign of a Breakthrough
Prime Minister Gandhi has little to gain at home right now from a
statesmanlike gesture and would face criticism if he appeared to give
in to Chinese pressure. New Delhi probably is satisfied that its
strategy of seasonal military patrols and Parliament's grant of
statehood to Arunachal Pradesh last year give India de facto control
of land it claims along the eastern border.
The Chinese also are unlikely to bring fresh initiatives. Beijing?
believing itself the aggrieved party?is waiting for New Delhi to make
the first move. A Chinese diplomat in New Delhi told US Embassy
officials early last month that it is up to India to show a willingness to
compromise.
To complicate matters, the same diplomat said Beijing would raise
India's handling of the Tibetan issue during the bilateral discussions
opening today.
China seems to have been placated by subsequent statements from
New Delhi's Ministry of External Affairs that called on the Dalai Lama
to refrain from political statements while on Indian soil. Anti-Chinese
demonstrations by Tibetans in India durino the talks-
easily rekindle Chinese sensitivity on this issue.
could
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Special Analysis
TUNISIA: Prospects for New Government
President Ben Al's initial actions bode well for Tunisia's stability
as well as for the continuation of its strongly pro-Western foreign
policy, including close relations with the US. 25X1
Ben Al's willingness to open the political system stifled by former
President Bourguiba will gain the public's confidence and give the
government a grace period in which to meet some of the political,
economic, and social needs of the country. It is unlikely that
Bourguiba or his supporters will immediately challenge Ben All; if they
did, they probably would not succeed.
The greatest threat to the new government will come from the Islamic
fundamentalists, the largest opposition group. Ben Ali has decided to
postpone trials of fundamentalists to avoid provoking protests
against his government but has indicated that the crackdown against
fundamentalists will continue even if those who have not committed
serious crimes are released from jail. Fundamentalist leaders have
approved of the takeover and are pressing for further political reform.
As the President liberalizes the political system, he must take care not
to jeopardize his standing with supporters in the ruling party and the
Army. Bourguiba's Destourian Socialists have ruled the country since
independence 31 years ago, and they are probably concerned that
new freedoms for the opposition might weaken their hold on power.
Tunis will try to strengthen relations with moderate Arab states while
remaining wary of Libya and Algeria. Ben Ali probably will continue to
rebuild relations with Tripoli and eventually restore diplomatic ties,
but he is not likely to respond to Algerian urging that Libya be
permitted to join the treaty linking Tunisia with Algeria and Mauritania
without guarantees against Libyan meddling in Tunisian affairs.
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Ben Ali almost certainly views security and economic aid from the US
as crucial to Tunisian stability. He will not, however, want to appear
overly dependent on the US, given the perception among some
Tunisians that his links to Washington are close. 25X1,
LA I
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