NATIONAL INTELLIGENCE DAILY FRIDAY 3 FEBRUARY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100020011-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 21
• Document Creation Date: December 27, 2016
• Document Release Date: May 25, 2010
• Sequence Number: 11
• Publication Date: February 3, 1984
• Content Type: REPORT

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Director of
C
l
entra
Intelligence
c"Y 285
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Contents
Argentina-UK: Reducing Tensions
USSR-UK-West Germany: Encouraging Opposition to INF
Italy: Christian Democratic-Communist Relations
Bolivia: President's Position Weakening
Saudi Arabia-US-Lebanon: Calls for US Withdrawal
Egypt-Sudan-Ethiopia: Mediation Effort
Sudan: Rebel Activity .. ............. .......
Israel: Possible Wage-Price Freeze ......
USSR-Romania: Differences Unresolved
USSR-Norway: Reactions to Expulsions
Netherlands-China: Improving Diplomatic Ties .
Western Europe-Turkey: Showdown Averted
Nicaragua: Church-State Friction
South Africa: Urban Violence
International: Terrorist Watch 14
Special Analysis
Morocco: Implications of Recent Violence 15
3 February 1984
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ARGENTINA-UK: Reducing Tensions
Buenos Aires and London continue to search for ways to
normalize relations, but neither is likely to show any flexibility on the 25X1
sovereignty of the Falkland Islands.
Press reports yesterday from Buenos Aires state that
government leaders will again offer to put a formal end to hostilities in
exchange for demilitarization of the Falklands and renewed talks
under UN auspices on sovereignty.
A British official told the US Embassy in London that Prime
Minister Thatcher contemplates a gradual warming of relations.
Foreign Secretary Howe yesterday rejected a UN role and called
again for a formal cessation of hostilities.
The UK's representative to NATO confirmed that "quiet" talks
with Buenos Aires will begin soon. He did not mention formal
Argentine acknowledgment of a cessation of hostilities as a condition
for the discussions.
Comment: President Alfonsin's strategy offers no substantive
change in Argentina's position. It is intended to put the UK on the
diplomatic defensive and to encourage domestic opponents of
Thatcher's policy on the Falklands. Alfonsin's intention to accept a
settlement of the Beagle Channel dispute with the Chileans, which is
upsetting civilian and military nationalists, limits his maneuvering
The British apparently are trying to persuade the Falklanders that
the conciliatory gestures London is making are in their interest.
Thatcher almost certainly would want the Argentines to guarantee
privately that hostilities would not be resumed. To demonstrate
flexibility and get initial talks under way, however, she may be willing
to forgo for a short time a public Argentine declaration on the end of
Thatcher continues to oppose resuming negotiations on
sovereignty. She used her recent trip to Rome to head off efforts by
third parties to mediate the dispute. Thatcher believes that only long-
term efforts by the Argentines to win over the islanders will make
negotiations on sovereignty possible.
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USSR-UK-WEST GERMANY: Encouraging Opposition to INF
The Soviets recently have used a variety of tactics to indicate their
continuing concern about INF deployments in the UK and West
Germany.
Last week British Liberal Party leader Steel was accorded a high-
level reception in Moscow. During his discussions with Steel, Central
Committee International Department chief Ponomarev criticized the
US and was inflexible on arms control issues. Although Ponomarev
also dismissed Prime Minister Thatcher's recent calls for an improved
East-West dialogue as a "cosmetic operation," USA Institute head
Arbatov and other officials were more positive about bilateral
Comment: British Labor Party leader Kinnock plans to visit
Moscow soon, and the Soviets are likely to give him similar treatment.
Kinnock probably wants to use the visit to strengthen his credentials
The Soviets also are likely to seek other ways to show their
approval of the West German Social Democrats' opposition to the
Kohl government's stand on INF. The Social Democrats enjoy the role
of an intermediary with the USSR, and in the past they have been
receptive to Moscow's approaches.
Although the Soviets are determined to show their displeasure
about the deployments, they probably will avoid steps that would do
serious damage to their relations with London and Bonn. Thatcher
and Kohl are likely to continue efforts to maintain a dialogue with
Moscow. Obvious attempts by the Soviets to appeal to their political
opponents, however, could backfire among British and West German
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4 3 February 1984
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ITALY: Christian Democratic-Communist Relations
The apparent thaw in relations between the Christian Democrats
and the Communists may reflect renewed interest in developing
limited cooperation
US Embassy officials have noted an improvement in relations
between the two parties since the meeting of the Communist Party's
National Directorate last month. At that time, Communist leaders
pledged stronger opposition to the Socialist-led government, but they
were cautious in their treatment of the Christian Democrats.
The Communists concurred, for example, with Christian
Democratic secretary DeMita's call for an interparty pact to promote
the reform of governmental institutions. They also called on their
followers to seek common ground with Catholic forces on issues like
A number of Christian Democratic leaders have responded
positively to these overtures. Moreover, the improvement in relations
has led to renewed press speculation about prospects for Christian
Democratic-Communist cooperation at the local and regional level.
Since the meeting of the Communist Directorate, two prominent
Christian Democratic leaders in Sicily have hinted that an alliance with
the Communists should be formed in the regional government to
Comment: Craxi, who has been in office for five months, probably
worries that the issues troubling his governing coalition will become
more divisive. He is likely to have noticed the points of similarity
between the recent Christian Democratic-Communist dialogue and
the contacts between the two parties that preceded their limited
collaboration during 1976-79. At this stage, however, the process
of rapprochement between the Christian Democrats and the
Communists still poses serious problems for both and, if it proceeds,
it will move slowly.
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BOLIVIA: President's Position Weakening
President Siles's ineffectiveness is providing his military and
civilian opponents with new arguments in their schemes to oust him. 25X1
The US Embassy reports that Siles's recent capitulation to
demands by labor for higher wages and other concessions will
undercut economic stabilization efforts and antagonize the private
sector. Some business leaders reportedly are looking for a successor
to Siles. In addition, his failure to change any of the important
portfolios in a cabinet reorganization in January led the Congress to
censure his administration for the second time in two months.
The President recently relieved some pressure on his government
by assigning armed forces Chief of Staff Anez, the principal coup
plotter, to a foreign post. Anez's successor has already told the US
defense attache, however, that he wI try to oust Siles sometime
during the next few months.
Sites is aware of the continuing threat
Comment: Siles's opponents have been deterred so far by their
inability to unite and by US support for the President, but his poor
performance could become an overriding consideration in the next
month or two. The military's dominance historically has ensured
bloodless coups, but an attempt to oust Siles now could produce
widespread violence.
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7 3 February 1984
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SAUDI ARABIA-US-LEBANON: Calls for US Withdrawal
Crown Prince Abdallah is taking advantage of King Fahd's
absence from Saudi Arabia to criticize the US military presence in
Lebanon. The Saudi press reported yesterday that Abdallah, in a
meeting with visiting US businessmen last Sunday, called for an early
withdrawal of US forces from Lebanon. US Embassy officials say the
press reports contradict Abdallah's actual remarks, however, in which
he emphasized his opposition to a premature pullout of US forces. 25X1
Comment: Abdallah previously has used Fahd's absences to
endorse publicly positions contrary to official policy.
Fahd will be annoyed, and he
probably will issue a "correction." During future trips abroad, the
King is likely to try to maintain tighter control over domestic media.
The US Embassy in Addis Ababa reported yesterday that Egypt
apparently has accepted an Ethiopian invitation to mediate a
reduction in the current border tensions between Ethiopia and Sudan.
The Egyptian Ambassador in Addis Ababa told US officials that Egypt
has offered to send Minister of State for Foreign Affairs Ghali to
Ethiopia next Wednesday to discuss the situation. The Ambassador
also said that the Ethiopians had requested a meeting between
Chairman Mengistu and President Mubarak but that Egypt was
deferring a decision until it could gauge Ethiopian intentions.
Comment: Egypt is likely to see mediation as an opportunity to
alleviate one of the security problems facing its close ally Sudan and
to develop warmer relations with Ethiopia. The strategic importance
to Egypt of Nile River water underlies its keen interest in having
friendly ties with both countries. Past mediation efforts have been
unsuccessful, however, and Ethiopia probably has no intention of
making any significant concessions to Sudan.
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8 3 February 1984
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Libya
0 150 Kilometers
i,T1-1
0 150 Miles
Kenya
Saudi
Arabia
Top Secret 25X1
February
1984
Egypt
ok
Sudan "9?
Administrative
Bound
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'Lake
n., Nasser r
C
KHARTOUM*
Oil pipeline
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SUDAN: Rebel Activity
Southern rebels yesterday attacked an important Chevron base
camp in the south and killed three oil ex loration workers and 25X1
wounded seven others. 25X1
past two months, two workers were kidnaped and several were
robbed, and many are leaving the country. Army units have been
unable to guard against the increasingly effective attacks.
Comment: Some southern dissidents are making Chevron a
target because the company and the government are constructing a
pipeline from the southern oilfields to the Red Sea. Many southerners
believe the revenues from the project will benefit only the north.
Increased violence in the south could undermine Khartoum's recent
efforts to reconcile its differences with southern leaders.
ISRAEL: Possible Wage-Price Freeze
Israeli officials say the government intends to try to negotiate
a wage-price freeze with the Histadrut, the large trade union
organization, in order to reduce the inflation rate of nearly
200 percent. The officials add that, if an agreement cannot be
reached, the government may legislate a freeze.
Comment: Union officials are certain to resist the plan because
they believe it would put a disproportionate burden on wage earners.
Moreover, in view of the Histadrut's ties to the Labor Party, there is
little political incentive for it to reach an accommodation with the
government. A freeze would do nothing to remedy the underlying
causes of inflation, however, and prices would continue to soar after a
freeze were lifted.
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Foreign Minister Gromyko's discussions with Romanian leaders in
Bucharest this week evidently failed to resolve differences on INF and
other issues. The communique stated that the two sides "exchanged
views" on bilateral and multilateral cooperation and on important
international issues, especially regarding the situation in Europe. It
characterized the talks as taking place in a "businesslike and
comradely atmosphere." On the day of Gromyko's departure,
President Ceausescu-in a dinner toast for visiting Prime Minister
Trudeau-called on both the USSR and the US to halt deployment of 25X1
nuclear missiles in Europe and resume negotiations
Comment: The language in the communique suggests there was
strong disagreement, probably over bilateral economic relations,
cooperation within CEMA, and Romania's position on INF.
Ceausescu's indirect criticism of Soviet countermeasures in his toast
to Trudeau suggests the Romanians stood their ground on INF. The
Romanians also probably again requested-apparently without
success-more favorable economic treatment.
USSR-NORWAY: Reactions to Expulsions
The Soviet Embassy in Oslo on Wednesday strongly denied
Norwegian charges that the five expelled Soviet diplomats were
involved in espionage, and it warned that the USSR could respond in
kind. In addition to the five diplomats-who included a counselor
identified by the Norwegians as the KGB resident-Oslo is barring
four others from reentering Norway and has informed Moscow it
cannot replace the five who have been expelled. The Norwegian
parliament informed the Soviet Embassy yesterday that a planned
parliamentary visit to Moscow this summer has been canceled. At the
same time, however, government sources said that visits to Norway
by leading Soviet officials and talks on matters of mutual interest
should take place as scheduled.
Comment: Although the USSR did not retaliate for the expulsion
of seven diplomats from Norway in 1977, the fact that Oslo has for the
first time set a limit on the size of Soviet diplomatic representation
may prompt Moscow to expel some Norwegians. The Soviets want to
avoid further damaging their image in the Nordic region, however,
especially while the Conference on Disarmament in Europe is in
session in Stockholm.
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NETHERLANDS-CHINA: Improving Diplomatic Ties
The Dutch and the Chinese have agreed to exchange
ambassadors and to normalize relations that have been strained
since 1981, when The Hague signed an arms deal with Taiwan. The
Dutch cabinet decided in December not to sell additional military
equipment to Taipei, but the Netherlands will honor its commitment to
deliver two submarines to Taiwan by 1987. The Chinese have offered
to place commercial orders exceeding the value of the deal with
Dutch firms, and in coming months the Dutch Secretary of Trade and
three trade delegations plan to visit Beijing.
Comment: The Hague is anxious to reduce the economic impact
of the cancellation of the deal with Taiwan, which could aggravate a
17-percent unemployment rate. The prospect of opening up the large
Chinese market is likely to have played a key role in the decision to
abrogate the agreement with Taiwan. If China fails to increase its
purchases from the Netherlands significantly, however, the Dutch
Government probably will reassess its decision not to expand arms
sales to Taiwan.
The Parliamentary Assembly of the Council of Europe concluded
its session prematurely yesterday without debating the issue of the
Turkish delegation's credentials. A strike by the International
Association of Conference Interpreters forced the session to end
before the question of seating the Turks could reach the floor.
Comment: Although many delegates were relieved at not having
to deal with the credentials controversy, the issue will come up again
at the Assembly's session in May. At that time, however, local
elections probably will have taken place. The elections may
strengthen Ankara's case for participation in the Assembly and
reduce demands for a debate.
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The Sandinistas' refusal to accept teachers appointed by the new
director of a Catholic high school in Managua has increased tension
between the church and the state. the former 25X1
proregime director-realizing that he would not be retained-had
brought on the problem by firing several teachers and hiring 17 pro-
Sandinistas, including at least one Cuban. The new director replaced
these teachers, but the Ministry of Education insists that the school
reinstate them. The Catholic bishops' conference has protested the
government's interference, but Junta member Ramirez has warned 25X1
that the state will take over the school if the church closes it.
Comment: The church hierarchy considers the government's
action to be a direct threat to the autonomy of church schools and, by
extension, to the church itself. The regime's response indicates
that its claimed dialogue with the church has not resolved any
fundamental problems between the two sides. Moreover, the dispute
could cause other political problems for the Sandinistas. For example,
the opposition newspaper, La Prensa, refused to publish twice
recently because several stories on the incident were censored.
The homes of four black township officials in the Johannesburg
area, including the new mayor of Soweto, have been firebombed in
recent weeks. The attacks follow controversial black local elections
held late last fall, in which only 11 percent of the eligible voters in
Soweto participated.
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Comment: The attacks probably were carried out by local black
youths, who regard local authorities as ineffective stooges of the
white government. Tensions in the black townships have been
heightened by large-scale unemployment, increases in rent and
transportation costs, soaring rates of violent crimes, and the
exclusion of blacks from the new constitution, which grants limited
political rights to Coloreds and Indians. An increase in urban unrest is
likely before the Colored and Indian elections for the new parliament,
tentatively scheduled for this spring. The banned African National
Congress and other groups opposed to the constitution also probably 25X1
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Europe
- In West Germany, the opening of the trial of two leaders of
the Red Army Faction could provoke violence. The two are
considered among the most dangerous West German
terrorists. They are being tried for nine murders and
several attempted murders, including the attack in 1981
against the commander of the US Army in West Germany.
Previous trials of key members of the Red Army Faction
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have been marked by violence.
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Recent Unrest in Morocco
Spain
*Gibraltar
(U.KJ
Tangier,
, I
VTitouan
`` Al Hoceima
Ksar el Kehir
RABA *y
Agadirr --
Marrakech. Morocco
Algeria
I Army deployment
0 150
t I
Kilometers
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Special Analysis
MOROCCO: Implications of Recent Violence
The recent incidents of violence-mostly involving students-are
the first serious manifestations of discontent over the government's
austerity measures and deteriorating social services. Forceful action
by the Army and the security forces and King Hassan's promise not to
increase further the price of food staples have brought a superficial
calm to the major cities. The underlying economic and social
problems remain, however, and Rabat probably will look to
Washington for increased assistance.
Hassan has publicly blamed the disorders on foreign agents, but
few Moroccans believe him. The Jewish community in Tangier is
worried that the King's reference to "Zionist secret agents" may
provoke a reaction against Moroccan Jews.
National labor unions did not participate in the demonstrations.
Moroccan political parties supported the regime's efforts to calm the
population.
The use of regular Army units untrained in riot control techniques
was one reason for the high casualties suffered-perhaps 100 dead
and several hundred wounded. There is considerable resentment over
the extensive use of force
Isolated student protests have continued since the security
crackdown and the King's speech. Hassan has reacted by having
300 students in Rabat expelled from school.
Economic Dilemma
Drought and a weak market for phosphates-the country's
largest export-required Rabat to adopt stiff austerity measures in
August 1983. The actions have trimmed inflation and reduced
balance-of-payments and budget deficits, but they also have slowed
economic growth and development, increased unemployment in
urban areas to more than 25 percent, and have provoked unrest.
continued
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The regime has taken steps to ease the effects on the poor, at
least temporarily. The austerity measures, however, have shaken the
confidence of the middle and upper classes.
Efforts to reschedule about $1.5 billion in foreign debts due in
1984 are nearly complete. Additional rescheduling, however, probably
will be necessary in 1985 and 1986. Current foreign exchange
reserves of about $40 million are adequate to cover less than a week
of imports.
Hassan will continue to face growing domestic challenges. The
economy-even under the best management-will take years to
recover. Students, the poor, and the unemployed are likely to react to
the rising cost of living, official corruption, and lack of jobs with
periodic acts of violence. Over half the population is under 20, and
young people may be increasingly prone to stage protests.
Islamic fundamentalist agitators also probably will be more active.
There will be criticism of the King's ostentatious living and Western
ways and the cost of the Saharan war.
The large and fairly effective security establishment is likely to
be able to maintain control for the near term. Prolonged unrest
nevertheless could test the loyalty of younger security personnel.
The recent disturbances will force the King to make some hard
choices. He may have to adopt a more expansionary economic
program in order to deal with unemployment. The King's promise to
hold down prices on basic commodities, however, will jeopardize the
government's financial stabilization program and the standby loan it
Some Moroccans are now questioning expanded relations with
the US because they believe the country is not getting enough US
assistance. Prime Minister Karim-Lamrani, who will visit Washington
late this month, probably will argue that the US has to do more for
Morocco.
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