NATIONAL INTELLIGENCE DAILY THURSDAY 19 JANUARY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100010059-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 27, 2016
• Document Release Date: May 24, 2010
• Sequence Number: 59
• Publication Date: January 19, 1984
• Content Type: REPORT

Director of
Central
Intelligence
-rw~. /. I
National Intelligence Daily
Thursday
19 January 1984
CPAS NID 84-015 X
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19 January 1984
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Contents
USSR: Andropov's Status ........................................................
Cuba-USSR: Frictions Over Grenada ......................................
PLO-Jordan: Meeting of Arafat and Hussein ..........................
Canada: Foreign Policy and Election Politics ..........................
Guatemala: Insurgent Activity ................................................
Japan-Iran-Iraq: Mediation Effort ..........................................
Ethiopia-Sudan: Increased Tension ........................................ 9
Nigeria: New Cabinet Appointed ............................................ 9
Norway-Nicaragua: Possible Increase in Aid .......................... 10
UK-Argentina: Advice to Falkland Islanders .......................... 10
Tanzania: Renewal of IMF Negotiations .................................. 11
Morocco: Scattered Unrest .................................................... 11
Special Analyses
Suriname: Economic Decline .................................................. 12
Tunisia: Implications of Bread Riots ....................................... 14
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USSR: Andropov's Status
General Secretary Andropov apparently has been recovering from
a combination of kidney, respiratory, and possibly immunological
problems.
The chief editor of Pravda, who said he was speaking "officially,"
told a US television interviewer that Andropov's treatment for "a
kidney ailment" had been complicated by croup and influenza. He
said Andropov probably would appear before a labor and youth
audience in the weeks preceding his election to the Supreme Soviet.
The Supreme Soviet election is scheduled for 4 March.
Early this
month a Soviet official Embassy that the doctors were
telling Andropov to avoid public appearances and meetings with
foreign leaders until h"s had "recovered its natural immunity."
Comment: Although Andropov's policies appear to be moving
ahead, he probably needs to do something soon to convey an
impression of physical soundness. The Politburo speeches that
precede the election are the next scheduled event at which the
General Secretary's failure to appear would be politically awkward.
Andropov's early reappearance does not appear to be certain, 25X6
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despite the editor's public declaration.
The General Secretary could be conducting the business of
state attributed to him even under conditions of partial medical
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CUBA-USSR: Frictions Over Grenada
Havana's defeat in Grenada has lowered the morale of the Cuban
armed forces and caused frictions in relations with the USSR, but this
poses no threat to continued bilateral military cooperation.
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senior u an o ficers are seriously disturbed by the Soviets'
influence over Cuban military policy
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Cuban officers were stunned
by the humiliating defeat in Grenada and that they believe Havana's
future foreign military policies should be more independent of
Moscow's influence. the officers want to
The Cuban people believe that the advisers failed to
organize the Cuban construction workers properly and that they fled
in the face of advancing US forces to seek refuge in the Soviet
Embassy. Criticism of the Soviets reportedly centers on Moscow's
failure to order its personnel to join the Cubans in resisting US forces.
Comment: The debacle in Grenada apparently has damaged the
self-esteem of the Cuban military establishment and lowered its
standing among the population. Havana evidently is trying to address
this problem by giving publicity to leaders of the armed forces. The
government recently staged a ceremony to bestow decorations on
two high-ranking officers for their service abroad
and the current bad feeling is unlikely to result in any major decline in
ubans are totally dependent on the Soviets for military aid, however,
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PLO-JORDAN: Meeting of Arafat and Hussein
PLO Chairman Arafat will hold talks soon with King Hussein on a
joint strategy toward Middle East peace talks, but they probably will
be unable to reconcile the differences that led to a breakdown of their
discussions last April.
Arafat and other Fatah leaders have
said in recent interviews that the basis of the talks will be the
resolutions adopted at the Fez Summit in 1982. These provided for
Palestinian self-determination and reaffirmed the PLO as the sole
representative of the Palestinians.
Comment: Hussein has facilitated Arafat's visit by offering to hold
talks without preconditions, but the King is unlikely to consider the
Fez resolutions an adequate basis for negotiations. The King's implied
threat to get the recently reconvened Jordanian parliament, which
includes West Bank representatives, to give him a mandate to
negotiate on behalf of the Palestinians independently of the PLO is
intended to help persuade Arafat to reach an agreement.
Although Arafat wants to improve relations with Jordan, he
probably will be satisfied with small steps and limited progress. He is
unlikely for now to give Hussein approval to represent the
Palestinians in peace talks linked to the US initiative.
Most West Bankers probably would support such a move. Arafat,
however, would lose support even among his Fatah deputies-and
jeopardize his position as PLO chairman-if he were to compromise
on the PLO demands for self-determination and on the PLO's
exclusive right to represent the Palestinians.
Arafat apparently is still trying to improve relations with
some radical PLO groups. Their price will be strict adherence to
PLO resolutions that rule out an accommodation with Jordan.
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CANADA: Foreign Policy and Election Politics
Ottawa's recent foreign policy initiatives are designed to
complement Prime Minister Trudeau's peace campaign and provide
the Liberal Party with a platform for the next election.
Trudeau wants to talk with Soviet officials in Moscow about his
peace plan at the earliest opportunity, and he has said that he need
not meet with General Secretary Andropov. He also intends to
discuss his plan with the leaders of East Germany, Romania, and
Czechoslovakia later this month. His inclusion of opposition
spokesmen as observers in Canada's delegation to the Conference
on Disarmament in Europe is designed to give his initiative a
nonpartisan tone.
The government, meanwhile, has announced an aid package for
Nicaragua totaling nearly $15 million, compared with $2.5 million in
1983. It also has said it would join a UN-sponsored peacekeeping
force to replace the Multinational Force in Beirut.
Comment: Recent polls indicate that the voters expect Ottawa to
promote disarmament, facilitate development in the Third World, and
support the UN. The government's recent actions are in line with
these interests, and they also satisfy the Canadians' traditional desire
for a foreign policy different from that of the US.
Ottawa's initiatives will trouble opposition Conservative leader
Mulroney. His caucus is divided between a faction that favors a
foreign policy close to the Liberals and one that prefers a tough anti-
Communist approach. Increased assistance to Nicaragua is certain to
outrage several prominent Tories who have called for an end to
Canadian aid to Marxist governments. The aid package may cause
public disagreement between the party's two factions.
The Tories thus far have avoided defining their foreign policy
goals, choosing instead to support US policies in general and to
condemn the USSR's conduct. If the Tories bicker publicly over
foreign policy, and if-as is likely-the hardliners prevail, the Liberals
might succeed in portraying Mulroney as a "cold warrior." Mulroney
also probably is concerned that the Liberals will wage an election
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GUATEMALA: Insurgent Activity
The guerrillas are increasing attacks against Army units in the
countryside in an effort to recapture the tactical initiative that the
military has held since early 1982.
Comment: The frequency of the insurgents' attacks over the past
two months, the size of their units, and the territorial extent of their
actions suggest they are recovering from earlier setbacks. Guerrilla
forces probably have not grown substantially from their estimated
strength of 2,000 to 2,500. Nonetheless, their ability to increase their
attacks indicates that they have been reorganized and reeguipped.
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Vice Foreign Minister Nakajima arrives in Iran today-as part of
Tokyo's effort to help end the war.
Officials in the Japanese Foreign Ministry say Nakajima will invite
Iranian Foreign Minister Velayati to visit Japan. If he accepts, Tokyo
tentatively plans to offer a separate invitation to Iraqi Foreign Minister
Comment: Nakajima is carrying a proposal from Baghdad that
Tehran allow Iraq's port facilities to be repaired and Iraqi oil to be
shipped from the Persian Gulf in exchange for a pledge that Iraq will
not bomb Iranian oil facilities. Japanese Foreign Ministry officials
have told US officials that they have indications from Tehran that the
Khomeini regime may informally permit port repairs and a resumption
of Iraqi oil shipments. There is no evidence that Iran is willing to relax
pressure on Iraq, however, and the Japanese may be misinterpreting
Japan is the only major power to maintain close relations with
both countries. Although wary of the risks involved, it has emerged as
the most active third party in efforts to arrange a cease-fire.
Tokyo has a large stake in the flow of oil from the Persian Gulf,
and Japanese firms have invested almost $500 million in the nearly
complete petrochemical complex at Bandar-e Khomeyni. Tokyo is
concerned that, if Baghdad's demarche is accepted, Japanese
construction firms will be reluctant to work in the war zone unless US
firms are also present
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ETHIOPIA-SUDAN: Increased Tension
Eritrean insurgents have captured the border town of Tessenei,
the first important urban area to fall under their control in some years.
Ethiopian troops-reportedly numbering several hundred-
across the border and surrendered to the Sudanese Armv.
Sudan's longtime aid to the Eritreans and its
decision to publicize t e Ethiopian defeat at Tessenei will keep
tensions with Addis Ababa high. The Ethiopian leadership may
retaliate by further increasing its assistance to Sudanese dissidents
who are trying to overthrow President Nimeiri. Addis Ababa's eroding
position against insurgencies in the north almost certainly will prevent
it from committing its hard-pressed ground forces to intervene
directly in Sudan. It might, however, consider punitive airstrikes
against targets on the Sudanese side of the border
NIGERIA: New Cabinet Appointed
General Buhari's three-week-old regime yesterday appointed an
18-man cabinet composed of 11 civilians and seven military officers.
According to Radio Nigeria, the cabinet is generally representative of
Nigeria's 19 states and includes four members of the ruling Supreme
Military Council. Nigeria also has made a multimillion-dollar loan
repayment to international banks on schedule this week.
Comment: With the cabinet finally in place, Buhari now has to
outline plans for economic recovery in order to counter the sense of
drift his regime has created among Nigerians. The conventional
character of his cabinet, with only token representation for middle-
grade officers who favor more dynamic policies, is not likely to be
greeted with any enthusiasm. Nigeria's prompt payment on its debt
will be well regarded by Western bankers and should help pave the
way for further negotiations on debt rescheduling and on an IMF
accord. Buhari, however, has not begun preparing the public for
the sacrifices that an austerity program will demand.
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The Norwegian parliament's Foreign Affairs Committee, which
recently completed a 10-day factfinding trip to Nicaragua, Mexico,
and Costa Rica, is likely to criticize US policies in meetings in
Washington tomorrow with US officials responsible for Central
America. The 12 Norwegian representatives plan to discuss US policy
toward Central America, particularly Nicaragua. US Embassy officials
report that the group was impressed by the Sandinista government's
intentions to hold elections, and virtually all members of the
committee are now inclined to recommend an increase in Norwegian 25X1
Comment: The ruling Conservative Party has avoided giving
economic aid to Nicaragua for 1984 by promising future increases in
humanitarian aid. The government may find it difficult to ignore the
committee's findings, however, because of public sympathy with the
social ideals of such governments. If the opposition succeeds in
designating Nicaragua as a primary aid recipient, Norwegian aid
could be increased starting in 1985 from the current level of $700,000
to as much as $10 million. Such an increase would have to come at
the expense of one of Norway's current recipient countries, most
likely Pakistan.
London apparently is trying to encourage the residents of the
Falkland Islands to take a more conciliatory approach toward Buenos
Aires. Deputy Foreign Secretary Lady Young ended a visit to the
Falklands this week by saying that the islanders would benefit from
closer economic links with Argentina. She added that leading
Falklanders acknowledge the necessity for normal relations with
Buenos Aires.
Comment: Lady Young is a personal friend of Prime Minister
Thatcher, and her views of the situation in the South Atlantic will carry
weight. Her remarks probably are a reminder to the islanders that
British support will have some limits and that closer ties with
Argentina are essential for their future. If the local population agrees
to make some gestures of conciliation, Thatcher will have more room
to maneuver in the current diplomatic struggle with President Alfonsin
over the future of the Falklands. She repeatedly has said that any
concessions to Argentina have to be acceptable to the Falklanders
themselves-a right of veto that British voters may not accept
indefinitely.
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TANZANIA: Renewal of IMF Negotiations
An IMF team arrives in Dar es Salaam tomorrow in an effort to
break the yearlong deadlock on a new assistance package. Previous
discussions foundered on the IMF's demand that Tanzania devalue its
currency by at least 80 percent in return for new funding. President
Nyerere reportedly refuses to do this because he believes such a
move would provoke civil unrest.
Comment: Nyerere's prestige appears to be eroding rapidly as a
result of his failed socialist policies. His continued refusal to accept
IMF demands for devaluation will increase frustration among his
senior advisers, who already are concerned about his inaction. A
sizable devaluation, however, would result in price increases
and rnmmorlity -,hn 7 ges and lead to widespread disturbances.
The US Embassy reports that isolated incidents of violence have
occurred in several cities but that there has been no general strike
over deteriorating economic conditions.
Comment: Following the recent bread riots in Tunisia, tensions
have increased in Morocco over impending additional price increases
and student grievances. Isolated demonstrations are likely to
continue, but the country's fairly effective security forces are alert to
potential disturbances. Rabat may have to choose between carrying
out austerity measures required by the IMF to ensure more financing
and risking serious disturbances similar to the large-scale food-price
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Suriname: Economic Indicators
Inflation Rate
Percent
International Reserves
at Yearend
Million US $
Exports by Sector, 1980
Percent
Other 5 -
Shrimp 6
Rice 8 -
79 80 81 82a 83a
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Special Analysis
SURINAME: Economic Decline
The four-week-old strike by Surinamese bauxite workers
continues despite the resignation of Prime Minister Alibux and his
cabinet and despite the decision of Army Commander Bouterse to
suspend controversial increases in income taxes, commodity prices,
and import duties. The strike is further damaging an economy already
suffering from government mismanagement and the suspension of
Dutch aid in December 1982. Even if the labor dispute were settled
quickly, the new cabinet would face severe economic problems
requiring harsh austerity measures that could lead to more unrest.
Suriname's economic outlook was clouded, even before the
current labor dispute, by the Bouterse regime's failure to find new
sources of aid or to formulate a policy to cope with the loss. To
maintain a high level of public spending and imports, the government
drew heavily on its once substantial foreign reserves, borrowed from
the Central Bank, and demanded concessional loans and
"contributions" from commercial banks and private businessmen. It
adopted only a few stop-gap austerity measures, including loosely
enforced import controls, currency restrictions, and the tax increases
that provoked the labor unrest.
Private investment has been inhibited by growing political
uncertainty and increasingly heavyhanded government regulations.
Production in the import-dependent agricultural and manufacturing
sectors has stagnated, and the aluminum industry's output has
dropped because of low world prices. Laws intended to protect jobs
failed to stem the rising rate of unemployment, which jumped to more
than 20 percent last year and prompted the regime to expel at least 25X1
2,000 laborers from neighboring Guyana.
Impact of Labor Unrest
The strike has closed down the aluminum industry, which
accounts for 80 percent of Suriname's exports and at least 20 percent
of government revenues. As a result, according to the US Embassy,
the country is losing as much as $750,000 a day in foreign exchange
earnings.
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Electric and bank workers also are participating in work
stoppages, apparently in direct support of the bauxite strikers.
Intermittent power outages caused by sabotage of electric facilities
have cut manufacturing output in Paramaribo and have caused some
food shortages.
Even if the labor dispute ends soon, the strikes will do long-
lasting damage to the economy. The restoration of aluminum output
to prestrike levels-if the foreign-owned companies decide to stay in
Suriname-will take at least a month. It could take several weeks just
to restore electric service.
Foreign funding is unlikely in the immediate future. Severely
declining exports and resurgent capital flight could virtually exhaust
Suriname's international reserves within a month, forcing a nearly
total halt in imports. The new cabinet-which has not yet been
appointed-will need to impose even harsher austerity measures than
the controversial ones proposed by Alibux's government.
More Problems Ahead
Paramaribo will have to consider much tighter import restrictions
and new tax levies on highly paid workers, including the bauxite
strikers who have caused the current disruption. It may even have to
impose rationing. Government expenditures could be trimmed by
cutting bloated civil service rolls, but this would add to already high
unemployment.
Pressure to undertake at least some of these measures is likely
to come from the international institutions now considering
Paramaribo's requests for loans. An IMF program, in particular, is a
prerequisite for substantial new commercial funding.
Any severe belt tightening, however, probably would be rejected
by Surinamers. Under the Dutch, they became accustomed to one of
the highest standards of living in the Caribbean region.
Increased austerity could provoke a surge in capital flight and
emigration of important skilled workers. Such developments would
outweigh any increase in remittances from the large Surinamese
population already living abroad. Those unable to leave would face
prolonged economic hardship and political uncertainty, and unrest
among them could spread quickly.
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Special Analysis
TUNISIA: Implications of Bread Riots
The recent protests over increases in bread prices reflect deep
social strains in Tunisia and unhappiness with a political
establishment that many of the urban poor, the young, and the
unemployed find insensitive to their needs. The disorders have
severely shaken the government, dislocated economic plans, and
weakened Prime Minister Mzali's chances to succeed President
Bourguiba. The suspension of the price increases, however, has given
Mzali a chance to address grievances and try to repair his position.
Meanwhile, Tunisia will continue to look to the US for economic aid
and for help in discouraging Libyan meddling.
The protests began spontaneously when the government
removed subsidies on cereal products before carrying out promises
to supplement incomes of the poor to protect them from the doubled
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The ruling Destourian Socialist Party was as ill prepared as the
government for the disturbances. Local leaders failed to anticipate
the intensity of the reaction to the price hikes. Party members did not
respond to government efforts to mobilize them to help bring the 25X1
Broadcasts-of unknown origin-of anti-Mzali slogans on police
radio frequencies have raised some question within the regime about
the reliability of the police and security forces. The Army, however,
performed well. Bourguiba's appeal to the US for immediate delivery
of military equipment unsuited for riot control may have been
intended in part to reward the officer corps for its loyalty.
Social Strains
The Tunisians who rioted are deeply alienated from a political
establishment that represents the upper and middle classes.
Economic growth has benefited mostly the northern urban areas,
leading to serious regional imbalances, especially in comparison with
the southern and western areas, where the disturbances began. Rural
unemployed have migrated to the cities in the north, however, where
social services have been unable to meet their needs.
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Radical Muslims are particularly well placed to exploit the
discontent. Bourguiba's secular policies and the increasing
Westernization of the middle and upper classes have given Islamic
fundamentalism power and credibility among the dispossessed.
Members of the underground Islamic Tendency Movement-
whose leaders were imprisoned several years ago-claim credit for
some of the disturbances. Security officials confirm the involvement
of fundamentalists, who are the only important organized opposition
group working to undermine the government.
Political Repercussions
The protests have been politically costly to Mzali, who was
charged with carrying out the decision to remove the subsidies. His
statements during the disturbances that the government would
proceed with its program probably reaffirmed popular
misconceptions that he-rather than Bourguiba-had planned the
price hikes. He also is blamed for ordering the sometimes
heavyhanded suppression of the riots by Army and security forces.
Bourguiba's abrupt suspension of the price increases undercut
Mzali's own efforts to make amends with the poor. Protesters
throughout the country called for the dismissal of Mzali, who finally
admitted publicly that he miscalculated the degree of opposition to
Economic Dilemma
This year the government anticipates increased expenditures of
about $200 million-an amount it cannot afford-if subsidies are left
in place. Poor agricultural harvests in the last two years have
increased the outlay for food imports. The country also has been hurt
by the effects of global recession on its key foreign exchange
earners-petroleum, phosphates, and tourism.
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In drafting the new budget, the government will have to reduce
some subsidies gradually and postpone development projects. These
measures in turn will make the inflation worse and lead to higher
deficits at a time when investor confidence presumably is shaken.
Mzali has considerable managerial and political talent to draw
upon in designing his new economic program. He also has the
tentative support of organized labor, one of the most powerful
political forces in the country.
On the other hand, Mzali's new budget will hurt the middle class,
his traditional political base of support. Moreover, it could endanger
the fragile wage agreements between the government and organized
Prospects
Bourguiba's prestige and political skill helped calm the
disturbances, but the ailing President is nearing the end of his rule.
His political demise without a strong heir apparent-in the worst
case-could encourage bitter political infighting, paralyze
policymaking, and prevent the government from adequately
addressing social problems. This in turn could prompt increasing
agitation by radical Muslims and eventual intervention by the armed 25X1
Mzali faces an uphill fight in repairing his damaged position. He
will have to restore Bourguiba's confidence in him, persuade his
middle-class constituency of the need for sacrifice, and win
acceptance among the poor.
Tunisian officials may be using Libya as a scapegoat to rally
national popular support behind the government and attract US aid.
Despite Tunisian claims, it remains unclear whether Libya was behind
the recent sabotaae of an oil pipeline on the Tunisian-Algerian border.
Libya apparently was not involved in the disturbances but is likely
to be encouraged by them to give more help to Tunisian dissidents. It
probably will do so discreetly, however, to avoid provoking a strong
response from the US or jeopardizing its efforts to improve relations
with other Maghreb states.
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