NATIONAL INTELLIGENCE DAILY MONDAY 14 MARCH 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01094R000200010008-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 27, 2016
• Document Release Date: November 19, 2012
• Sequence Number: 8
• Publication Date: March 14, 1983
• Content Type: REPORT

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Director of
Central
Intelligence
OCPAS/CIG
CY41 281
_)
National Intelligence Daily
Monday
14 March 1983
Top Scutt
CPAS NID 83-061.IX
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14 March 1983
Copy 261
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Contents
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EC-US: Trade Negotiations
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Spain: Antiterrorist Program
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Warsaw Pact: Polish War Stocks
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France: Municipal Runoff Elections
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International: Results of Nonaligned Summit
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East Germany: Peace Movement Conference
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Saudi Arabia: Funding for Arms Purchases
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Special Analyses
El Salvador: Military and Political Trends
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Israel-Lebanon: Tel Aviv's Policies
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Top Secret
EC-US: Trade Negotiations
EC Foreign Ministers probably will decide today to withdraw from
GATT-sponsored negotiations with the US over tariff adjustments
made necessary by Greek membership in the Community.
The negotiations, begun more than two years ago, have become
stalemated over questions of US-Greek trade. The Community
maintains that Greece's adoption of overall lower EC tariffs in 1981
has led to a liberalization of trade with the US and that the EC is owed
an annual credit of $187 million. The US holds'that it has lost trade
with Greece?$14.4 million annually?since Athens adopted the EC
tariffs and that the Community should lower other tariffs in return.
Comment: The EC believes the precedent of a trade credit and
renegotiation of tariffs must be established before Spain and Portugal
become members in two or three years. If tariffs on US farm goods
that now enter the Community duty free?particularly oilseeds and
oilseed products?cannot be readjusted upward by then, the EC
could be faced with massive dislocations and overproduction in
agricultural goods, especially olive oil.
The Community probably will move unilaterally to impose higher
tariff ceilings on some US goods?including soybeans and nongrain
feeds?to offset its claim for credit. EC Commission officials
informally have assured Washington, however, that even if ceilings on
some US exports are increased, the actual applied tariff rates are
likely to remain unchanged. Such action, although separate from
ongoing EC-US discussions on agricultural trade issues, probably
would be in part an EC response to US-subsidized flour and dairy
sales in markets claimed by the Community.
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Top Secret
SPAIN: Antiterrorist Program
Madrid is formulating plans for an offensive against Basque
terrorism, following the collapse of efforts to achieve a ne otiated
settlement with ETA, the Basque terrorist organization.
,Efforts by the Basque regional government to mediate between
Madrid and ETA's military branch failed last month. The central
government demanded a cease-fire before starting talks, and the
terrorists responded with a series of bombings and killings.
Madrid has since reaffirmed its intention to use vigorous
police methods against ETA. The government's plan includes a
reorganization of the police intelligence services; closer coordination
among national, regional, and municipal police forces. and a
campaign to encourage cooperation with the police.
Comment: The short-term prospects for curbing terrorist
violence are poor. The failure of the negotiations has embittered
relations between the regional government and Madrid and increased
tensions in the Basque provinces. Recent demonstrations by pro-
terrorist groups indicate that ETA retains a hard core of popular
support and that its military branch still has formidable sources of
supplies and funds.
The longer range outlook, however, is somewhat better.
According to press reports, ETA's political-military wing is financially
strapped and could dissolve soon. Dissension within and between the
two branches of ETA has reduced the organization's effectiveness
and caused a number of terrorists to abandon armed struggle
Anger over the military wing's recent assault on a Basque regional
police barracks may increase cooperation between Madrid and the
Basque regional government. The arrest of a number of terrorists in
past weeks suggests that, even without a substantial improvement in
cooperation, the central government's tough stance against terrorism
may over time have a telling impact.
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Top Secret
WARSAW PACT: Polish War Stocks
New information has led the Intelligence Community to reduce by
one-half its estimate of Poland's ammunition stocks and provides
further evidence of the growing gag between Soviet and Polish military
capabilities against NATO.
Comment: Combat supplies for the Soviets are estimated as
sufficient for two months
Poles.
This level is about twice that of the
In Warsaw Pact plans the Poles have important combat missions
early in a conflict before Soviet reinforcements arrive. If fighting in
Europe continued more than a month, ammunition would be required
from either Soviet stocks or Warsaw Pact theater stocks to enable a
continuation of Polish operations.
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Top Secret
FRANCE: Municipal Runoff Elections
Final returns in the second round of municipal voting indicate the
Socialists and Communists will retain control over a majority of the
232 largest cities, despite the net loss of 14 cities?in addition to 16 in
the first round?to the opposition center-right. Several prominent
Socialists, including Prime Minister Mauroy and Interior Minister
Defferre, won difficult runoffs. The Communists lost control of several
cities, however, and Communist leader Marchais has criticized the
Socialists for failing to sus ort Communist candidates in runoffs
against the center-right.
Comment: Gaullist leader Chirac's sweep of all voting districts in
Paris will strengthen his efforts to establish his dominance of the
center-right. The Socialists will be encouraged by their better showing
in the second round and by the left's success in holding its losses well
below those suffered by the center-right in the municipal elections in
1977. Pressures on President Mitterrand to carry out a major shakeup
of the cabinet probably have been reduced, but some changes could
take place soon. Marchais's criticism of the Socialists may presage a
serious quarrel within the coalition, particularly if Mitterrand moves
uickl to impose restrictive new economic policies.
INTERNATIONAL: Results of Nonaligned Summit
The Nonaligned Summit concluded in New Delhi Saturday by
issuing a communique markedly less critical of the US than previous
declarations. The Movement, however, continued to avoid criticizing
the USSR directly. India, which assumed the chairmanship from Cuba,
succeeded in its prime objective of reducing the emphasis on Global
Negotiations?the long-stalled plan for reform of international
economic institutions such as the IMF and the World Bank?in favor
of piecemeal proposals to bring immediate economic assistance to
developing countries.
Comment: The passing of the chairmanship to India appears to
have ended the ability of Nonaligned radicals to use the Movement as
a political weapon against the US, though some criticism of US
policies will remain. India probably will concentrate on breaking the
impasse in the North-South dialogue. Developing countries are likely
to adopt New Delhi's strategy of seeking less ambitious international
economic reform at UNCTAD VI, the North-South conference
scheduled for June in Belgrade.
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Top Secret
EAST GERMANY: Peace Movement Conference
East German peace activists recently held their first major
national coordinating conference in East Berlin. The US Embassy
reports Lutheran Church officials were the hosts for representatives
of 40 peace groups from throughout the country to exchange
information and experiences. The participants agreed to convene
again in the fall, but a militant minority said it would go ahead with
plans to hold its own conclave in May, which a Church official said
would be more "action oriented."
Comment: Church leaders organized the conference to maintain
influence over militant activists and to prevent them from holding their
own session. The Church probably will argue against the meeting in
May by pointing out it would provoke harsh retaliation from the
regime. Although such a line is likely to be persuasive to most 'eace
activists, it may not be enough to prevent the session.
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Top Secret
SAUDI ARABIA: Funding for Arms Purchases
Saudi General Madani, Chief of the Foreign Assistance and
Cooperation Department in the Ministry of Defense and Aviation,
recently told a US officer that Riyadh will continue to underwrite
selected foreign military aid expenditures. He said the Saudis had just
agreed to pay for a Moroccan order from the US for $43 million worth
of TOW missiles and munitions and a $3 million Pakistani contract for
US Redeye missiles. Madani also noted new aid initiatives are likely in
the coming months because of substantial bud setary allotments on
which Saudi assistance officers can draw.
Comment: Madani's statements indicate his department
probably is in a good position to defend its programs against
budgetary cutbacks. The Saudis almost certainly are reluctant to
reduce foreign aid substantially because they view it as important for
their security to support both radical and moderate Arab regimes. In
addition to military funding commitments of $2.5 billion annually in
1979-82, economic aid pledges have averaged $2 billion a year since
1978. Disbursements to Iraq, which exceeded $9 billion in the last 30
months, are likely to continue.
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Special Analysis
EL SALVADOR: Military and Political Trends
The tactical balance in the war remains unchanged, with the
insurgents' increasingly aggressive small-scale attacks being met by
large government sweeps. Nevertheless, the guerrillas appear to be
preparing for widespread offensive actions in coming weeks. The
government's decision to hold elections this year?an apparent
attempt to regain the political and psychological initiative?may spur
the insurgents' efforts.
Since the insurgents began intensifying their actions in October,
the government's 30,000-man force has suffered an average of 275
killed or wounded per month. The US Embassy, meanwhile, reports
the government is increasing forced conscription. The accelerated
military activity also has resulted in a growin number of civilian
casualties since the beginning of the year.
Insurgent Tactics
Fighting has slowed in the past few weeks, but the guerrillas
continue to attack small towns and isolated government posts. The
frequency and magnitude of these actions underscore the insurgents'
increasing mobility. The attacks also suggest the guerrillas are
making effective use of local militias as part,lor as a complement
to, their 4,000 to 6,000 armed regulars.
The insurgents appear confident they have seized the tactical
initiative, and they are trying to strengthen their popular and
international support. They recently proclaimed northern Morazan
Department a "free territory" and claim to have inflicted heavy
casualties on government forces. These claims probably are inflated
for propaganda purposes, but the insurgents apparently have
captured increasing amounts of weapons and ammunition over the
past several months.
A recently captured insurgent document states coordination is
improving among the various guerrilla factions,
Nevertheless, there are indications that friction and rivalry among
factions still exist. Additional problems include desertions and
shortages of food.
continued
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Tot) Secret
The recent movement of large numbers of combatants into
strategic areas around the country and increased resupply operations
suggest the guerrillas are well along with their plans for a wide-scale
offensive in the spring. They clearly intend to put pressure on
government forces on all fronts in order to weaken the Army's ability
to protect key economic targets. The guerrillas hope attacks on these
targets will erode public confidence and increase calls for
negotiations leading to power sharing.
The Government's Performance
Guerrilla successes in recent months have increased the
nervousness in Central America over the status of the war and drawn
international attention to the insurgent cause. The government's
superiority in weapons and manpower, however, generally has kept
the insurgents from advancing into new areas. During recent fighting,
government forces have shown some improvement in field
communications, greater willingness to conduct night operations, and
a new ability to infiltrate _guerrilla lines with long-range
reconnaissance patrols.
Nevertheless, a recent large-scale government sweep north of
San Salvador revealed continued weaknesses. According to US
military sources, the operation was marred by fundamental errors in
command and control, poor tactical discipline, and disregard for
communications security. The same sources also noted that the
failure of some units to establish blockin ositions enabled large
numbers of guerrillas to escape.
The insurgents are trying to add to the military's difficulties by
continuing to release captured prisoners and by propaganda
broadcasts from a former assistant defense minister who was
captured last June. There are few indications, however, that this
psychological strategy is paying major dividends.
government morale continues to be high in
most units, particularly in the US-trained battalions
The ability of the high command to weather recent challenges to
its authority and to maintain institutional unity suggests that morale
may even improve. The prospect that Defense Minister Garcia will
soon step down should enable the officer corps to concentrate on the
war effort and lessen the concerns of neighboring governments.
Moreover, there is some chance that Garcia's replacement?most
likely National Guard leader General Vides Casanova?will heed
Garcia's critics and support a more aggressive strategy.
continued
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Political Complications
The military situation probably will be complicated by increased
political infighting in the government as the major parties prepare for
the elections, now scheduled for December. The guerrillas are likely to
try to capitalize on any divisions in the government as the election
process gets under way, hoping to undercut its legitimac b
demonstrating their own political and military strength.
The guerrillas also will be motivated by a desire to maintain their
political and military momentum. Even at this early stage, they
probably fear the government will repeat its electoral success of
March 1982.
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Top Secret
BEIRUT
Mashy/a
An Naha yah
mew
Haddad Enclave r--/
r (Pre-lune 1982) j
Golan
Heights
(Israeli occupied)
Israel
633866 3-83
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14 March 1983
Boundary representation is
not necessarily authoritative
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Top Secret
Special Analysis
ISRAEL-LEBANON: Tel Aviv's Policies
Tel Aviv's military, political, and economic policies in southern
Lebanon are designed to advance goals that the Israelis have been
pursuing since their first invasion of the area in 1978. Their most
immediate goal is to assure that a PLO military structure does not
reemerge once Israeli forces withdraw. The Israelis also are reparing
the groundwork for a prolonged military occupation.
Israel has taken a number of steps to help Major Haddad, its
principal surrogate in southern Lebanon, and his 1,500-man
Christian-Shia militia consolidate control over the area south of the
Awwali River. Haddad's move into Sidon last month with Israeli
backing was designed to stake his claim as de facto military governor
of the south. In addition, the Israeli military has regularly harassed
contingents of the UN force in order to give Haddad freer rein and
drive home Israel's opposition to a UN presence.
The Israelis also are trying to create local militias that they believe
eventually will forge alliances with Haddad. The Israeli Army so far has
armed over a half dozen local grou s and has even begun providing
weapons to anti-PLO Palestinians.
The most important of these militias is the Shiite National Guard.
It numbers less than 100 men and is led by the scion of the most
prominent Shiite family in Tyre.
Political Control
Israeli political actions have tended to undermine central
government institutions in southern Lebanon. For example, a civil-
action team appointed by the Israeli military has offered services for
which Beirut theoretically is responsible. In addition, the work of
Lebanese Government employees in the south reportedly has been
obstructed by the Israeli military authorities, who have threatened to
deport noncooperative officials.
In late January the Israelis called a meeting of village heads to
discuss the formation of a council that would cooperate with Israeli
authorities in the area. The local leaders were cool to Israeli
suggestions, but even without a formal mechanism they still have to
deal directly with the Israelis on most matters.
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Top Secret
Economic Policies
As soon as Israeli forces secured the area beyond Haddad's
enclave, Israeli businessmen traveled there to exploit economic
opportunities. By late summer, Israeli foodstuffs and other goods
began appearing in southern Lebanese towns and villages, as well as
in Beirut. The Israelis also began extending bus routes and other
basic services to southern Lebanon and opened Haifa to Lebanese
merchants as a duty-free port.
Estimates of the monthly value of Israeli exports to the area range
from $10 million to $70 million. Even the lowestfigure xceeds the
current level of Israel's nonoil trade with Egypt.
Israeli goods marketed under Lebanese trade names have begun
appearing in other Arab states. This development has led in part to
the imposition of Saudi and Jordanian restrictions on Lebanese
goods.
Israeli Intentions
To prevent the return of PLO fighters to southern Lebanon, the
Israelis believe the area south of the Awwali River has to be a
permanent military cordon sanitaire under Haddad's control, even if
this comes at the expense of the central government's authority. In
addition, Prime Minister Begin needs clear security gains with which
to counter any further questions about the long-term value of
Operation "Peace for Galilee."
Israeli actions in southern Lebanon also are aimed at improving
Tel Aviv's position in the negotiations. The strengthening of Haddad is
intended to give the Lebanese Government no option but to retain
him as military kingpin in the south. In addition, Israel believes a web
of economic ties with Lebanon will make it more costly for Beirut to
renege on any normalization agreement.
All of these policies give Tel Aviv maneuvering room in the event
negotiations drag on or break down. By strengthening Haddad and
other Lebanese surrogates, the Israelis hope to ease the military
burden of a prolonged stay. Israeli moves also pave the way for a
permanent occupation of the area as a last resort.
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