NATIONAL INTELLIGENCE DAILY SATURDAY 25 FEBRUARY 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000100020083-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 25
• Document Creation Date: December 27, 2016
• Document Release Date: May 27, 2010
• Sequence Number: 83
• Publication Date: February 25, 1984
• Content Type: REPORT

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Director of
Central
Intelligence
Top Secret
uary 1984
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Contents
Iran-Iraq: Fighting Continues .................................................. 1
PLO-Jordan: Preparing for Arafat's Visit ................................ 2
USSR: New Air Restrictions in Berlin ...................................... 3
Netherlands-US: Foreign Minister's Visit ................................ 4
Grenada: Political Maneuvering .............................................. 5
Austria-US: President's Visit .................................................. 7
Ell Salvador: Election Concerns of the Military ...................... 8
Persian Gulf-US: Unease About Policy in Lebanon .............. 9
USSR-Vietnam-China: Support for Hanoi .............................. 11
Angola: New Fighting in the East ............................................ 12
Spain: Effort To Disrupt Basque Election .............................. 13
South Korea: Further Easing of Political Ban ........................ 13
Special Analysis
West Germany: Economic Policy Under Attack .................... 14
25 February 1984
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Turkey
Iranian
bomber
awe
Top Secret
ich River front
06~h fron
helling
Iq Saud Af4b a
~r?fNeu,ral,o,
Top Secret
100
Kilometers
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IRAN-IRAQ: Fighting Continues
Iraqi lines are still intact east of Al Basrah, and both sides are
resuming attacks against each other's cities.
the Iraqis stopped the Iranian
heavy artillery bombardment.
US journalists have confirmed that Al Qurnah
is still in Iraqi hands. Iran claims its forces captured some oil facilities
in the swamps east of the main road in the Majnoon area.
The Iraqis bombarded Khorramabad and Borujerd with surface-
to-surface missiles yesterday, and the Iranians retaliated with artillery
and air attacks on Al Basrah, Al 'Amarah, and Rawanduz.
Comment: The Iraqis should be able to clear the Iranians out of
positions near the main road north of Al Basrah, largely because the
Iranians have to move supplies across about 25 kilometers of marsh
and swamp. Iraq's air superiority will allow it to use its helicopter
gunships to disrupt Iranian resupply efforts.
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PLO-JORDAN: Preparing for Arafat's Visit
Top Secret
PLO chief Arafat may meet with Jordan's King Hussein soon, but
they are likely to make little progress in developing a joint approach to
future peace negotiations with Israel.
Arafat chaired a meeting of the Fatah Central Committee earlier
this week to prepare for discussions with Hussein, and two of his
senior advisers arrived in Amman on Thursday. Press accounts state
the committee decided that Arafat could try to improve relations with
Jordan but that it cautioned he had no mandate to discuss Jordanian
representation of Palestinian interests.
The Jordanians have told the US Embassy that Arafat has to
be accompanied by members of the PLO decisionmaking bodies.
Amman is seeking to prevent Arafat from insisting that he has to refer
decisions back to his organization.
In addition, the Jordanians have lined up a group of pro-
Jordanian West Bank Palestinians to be present during Arafat's visit.
Amman wants the West Bankers to encourage Arafat to come to
Arafat Palestinians reportedly also may organize demonstrations in
support of the PLO leader. Recent disturbances at a West Bank
university were caused in part by clashes between Arafat loyalists and
by supporters of the PLO rebels who oppose negotiations with
Hussein.
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Comment: Hussein does not expect Arafat to commit himself-
during the first round of discussions-to a joint Jordanian-Palestinian
arrangement that would lead to negotiations with Israel. Nevertheless,
he wants to press Arafat more toward negotiations. The King will
point to Palestinian participation in Jordan's parliament and to the
presence of West Bank leaders in Amman as strong evidence of the 25X1
u
enc
man
i
i
rg
y felt by
y I ales
n
anns.
Arafat and his Fatah supporters are not yet committed to
cooperating with Hussein. Moreover, they are reluctant to take any
decisive steps for fear that a closer alliance with Hussein would cause
additional defections from the Arafat camp and could lead to a formal 25X1
split of the PLO.
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Berlin Air Corridor Altitude Restrictions
Berlin air traffic
control zone
Impact of Soviet Restriction Change on
New approach
5,500 F
4,500 F;
2,500 F( --
Norman lower limit of approaches
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Z'Ompulsory flight corridor
Flight restricted
c' elow 450Q feet
East:
Ge4any
not final border er soy h
not been eseli and some other
boundaries are of necessarily authoritative.
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flights in the air corridors linking Berlin to West Germany during
scheduled military flights through those corridors.
The Soviet chief controller in the Berlin Air Safety Center
informed his Western counterparts on Monday that Soviet corridor
reservations would henceforth extend from the inner-German border
to the boundary of the Berlin air traffic control zone. During these
reservations, the Soviets would not guarantee the safety of Allied
aircraft flying below 4,500 feet at any point along the corridor. The
Soviet action was said to be in response to Allied protests about
Warsaw Pact military aircraft in the corridors.
Soviet officials did not respond for several days to Allied protests
against the first reservation on Monday. When the US Minister in
Berlin informally protested the second reservation that was
announced yesterday, a Soviet Embassy official said that Soviet
military authorities had determined that the higher ceiling was needed
to ensure the safety of Soviet military flight activity in the area just
outside the air traffic control zone. A formal statement delivered later
to Allied controllers at the Air Safety Center reaffirmed the second
Comment: In the past Soviet reservations applied only to the
middle segment of each of the three corridors and did not affect
Allied aircraft in their normal descent into, or ascent from, Tegel
Airport in Berlin. Allied aircraft now have to fly at an abnormally high
altitude as they enter or leave Berlin whenever the new Soviet
reservations are in effect, forcing planes using certain runways to
circle within the air traffic control zone to attain the proper altitude.
This complicates air traffic control procedures and could endanger
Soviet restrictions on the Berlin air corridors were not a problem
until the summer of 1980, when the Soviets ceased simply "closing"
specific areas to air traffic and began to coordinate the use of
airspace with the Allies at the Air Safety Center. This change of policy
apparently was made out of a heightened concern for flight safety that
may have stemmed from the Soviets' increasing use of close air
support for ground army maneuvers. The apparent confusion of the
Soviet Embassy official who received the initial Allied demarche on
Monday suggests that Soviet military authorities had decided upon
the new restrictions without consulting the Embassy.
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Top Secret
NETHERLANDS-US: Foreign Minister's Visit
Dutch Foreign Minister van den Broek will convey The Hague's
growing concern about INF prospects in the Netherlands during his
visit to Washington, which begins on Tuesday.
Comment: The Foreign Minister is a strong advocate of INF
deployments, but he and Prime Minister Lubbers may have been too
optimistic about the prospects of parliamentary approval. Lubbers
has committed his government to a decision by June, and he
probably will make a parliamentary vote on INF basing-for which
there is currently no assurance of a majority-a matter of confidence.
This policy has set the stage for a possible setback that might bring
down the government and adversely affect INF commitments in other
Both Lubbers and van den Broek are aware the Allies would
prefer that the Dutch continue to delay rather than risk a negative
vote. Several prominent members of van den Broek's Christian
Democratic Appeal party-which is the dominant party in
parliament-have already called for a postponement of the decision
beyond June.
Such a move, however, would delay basing preparations. Defense
Minister de Ruiter has pledged to defer construction until a decision
to deploy is made.
To induce a more favorable parliamentary consideration of the
issue, the government reportedly has devised a plan that calls for the
elimination of at least four of the Netherlands' six nuclear tasks. Even
if the Allies agreed to allow the Dutch to eliminate all four tasks,
however, there is no guarantee that INF would win parliamentary
approval.
INF will be the most important subject on van den Broek's
agenda, but he probably will raise several other bilateral issues.
The Hague is uneasy about what it considers the extraterritorial
application of US laws-particularly on future Dutch aircraft sales to
Libya-and the potential adverse effects on Dutch multinational
corporations of the taxing practices of some US jurisdictions. Van den
Broek also will underline the necessity for government-to-government
offsets in European purchases of US defense systems, such as those
The Hague obtained when it recent) bought the Patriot missile
system.
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GRENADA: Political Maneuvering
Election preparations are under way, but no broad-based
moderate coalition has emerged to oppose the rightist party of former
Prime Minister Gairy.
The Governor General has stated publicly that elections will be
held this year, and the electoral commission says voter registration
will begin in mid-March. According to the US Embassy, however, the
commission lacks the technical and financial assistance to conduct
the enumeration efficiently or to mount an information campaign.
attempts to merge two political
parties-one conservative and the other moderate-to compete
against Gairy's group thus far have been unsuccessful. Nonetheless,
leaders of the two parties have told Embassy officials that they are
optimistic that a middle-of-the-road group will emerge in the near
Gairy has announced that he will not run in the elections, but he is
openly trying to revive his party and is assisting in the selection of a
candidate. To increase his limited public appeal, Gairy is suggesting
that he has US support
The New Jewel Movement, which was resurrected last month
under the cover of the Maurice Bishop Memorial Fund, is conducting
a variety of fundraising activities. According to the Embassy, many
Grenadians doubt the movement will put forth a candidate in the
elections. If it does, however, they believe he will be defeated.
Comment: Most Grenadians have shown little interest in
elections so far and appear confused by the sudden proliferation of
political parties. A low voter turnout is likely unless an information
campaign is mounted to motivate citizens to register and vote. Such a
turnout might favor Gairy, because he is well known. The failure of the
moderates to unite into a single coalition also would help the chances
of Gairy's party.
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President Rudolf Kirchschlaeger's largely ceremonial visit to the
US is intended to emphasize the generally good bilateral relations, but
he also may want to discuss East-West, Middle Eastern, and Central
American issues.
Kirchschlaeger arrives in New York tomorrow to begin a nine-day
visit. The US Embassy in Vienna reports that the Austrians believe the
trip reflects the close relations between the two nations. It also is
intended to balance the President's visit to Moscow in 1982, in
keeping with Austria's policy of neutrality.
Comment: There currently are almost no strains in bilateral
relations. Technology transfers to the USSR and Eastern Europe, as
well as US restrictions on the import of specialty steels, had caused
difficulties last year. A voluntary arrangement to restrict the reexport
of US-origin technology and the Orderly Marketing Agreement on
Austrian steel exports have partially resolved these problems
In 1983 Vienna launched the "USA Concept," a four-year
program commemorating the 35th anniversary of the Marshall Plan,
by promoting bilateral ties in a variety of fields. US and Austrian
representatives agreed last month to establish a program to
encourage scientific and technical cooperation, which the Austrians
plan to announce during the visit.
The Austrians also may want to have broader discussions on
foreign policy issues. They believe that, as neutrals, they can play a
useful role in world affairs. Austrian assessments of Central America
and the Middle East differ from those of the US, but Austria retains a
generally pro-Western orientation.
At the same time, Kirchschlaeger supports Austria's historically
close ties with its East European neighbors. Austrians continue to
believe detente is a workable policy, and they are likely to offer to help 25X1
reduce East-West tensions.
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EL SALVADOR: Election Concerns of the Military
Some military leaders are worried that a Christian Democratic
victory in the election on 25 March could threaten the autonomy of the
armed forces.
The US Embassy reports that Defense Minister Vides fears a
reformist government might attempt the wholesale replacement of
military leaders. Vides also indicates the armed forces are concerned
that a Christian Democratic administration could lead to a dialogue
with the insurgents and eventually would facilitate their integration in
the military.
The Embassy says President Magana believes extreme rightists
supporting presidential candidate D'Aubuisson are fomenting such
anxiety in the military. Magana plans to assist the chiefs of the armed
forces in drafting a paper that outlines the military's postelection
concerns. He also will help to win approval from all political party
leaders for the military's policy position.
Despite Vides's calls for neutrality during the campaign, the
Embassy reports that at least two important field commanders have
been reprimanded for trying to intimidate peasants to vote for
Comment: Vides's fears about potential election difficulties in the
military establishment and his concern about the apparent efforts by
rightist political forces to manipulate individual officers probably are
well founded. He and other pragmatic officers seem to regard the
military position paper as a device for preventing major problems,
particularly in dealings with Christian Democratic presidential
candidate Duarte and with D'Aubuisson.
Nevertheless, efforts by some officers to sway the vote appear
inevitable. Although these attempts are unlikely to have a substantial
impact on the voting, D'Aubuisson probably will be the main
beneficiary.
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PERSIAN GULF-US: Unease About Policy in Lebanon
The pullback of the US Marines in Lebanon has caused concern
among leaders in Qatar, the United Arab Emirates, and Oman that the
US cannot be relied upon to protect their security. Qatar's Crown
Prince Hamad asked US Embassy officials last week how the US
would deal with a similar show of force in the Persian Gulf. The chief
foreign policy adviser to the President of the UAE says the fall of
Lebanon is a forerunner of disaster for the Persian Gulf, which he
sees encircled by radical religious and nationalist forces. Omani
Minister of State for Foreign Affairs Alawi told a US banking
delegation on Sunday that US indecisiveness in Lebanon had resulted
in a victory for Syria and the USSR.
Comment: Arabs of the Persian Gulf are ambivalent about
developments in Lebanon and US policy there. They profess to
support the legitimate government against extremists, but they want
to avoid appearing to side with Christians in a war with Muslims.
They have urged the US to stand up to the Syrians but say they are
appalled by the damage caused by US Navy shellings. Their
overriding concern is that the US pullback in Lebanon will encourage
Iranian aggression.
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USSR-VIETNAM-CHINA: Support for Hanoi
Pravda on Thursday carried a TASS dispatch from Hanoi
recounting Vietnamese press articles on the history of the Sino-
Vietnamese border dispute. TASS drew a sharp contrast between
Hanoi's "sincere efforts" to improve relations with China and
Beijing's demands for recognition of the existing border established
by Chinese "aggression" in 1979. The TASS dispatch also said that
the Chinese are continuing subversive activity against Laos and
Kampuchea and that they are "intimidating the ASEAN countries with
the specter of Vietnamese expansionism" in an attempt to "isolate"
Hanoi.
Comment: The article in Pravda is the USSR's first public
criticism of China since Andropov's death and marks a shift from the
more positive coverage given the talks in Moscow last week between
First Deputy Premier Aliyev and his visiting Chinese counterpart.
It probably was prompted by heightened concern over Sino-
Vietnamese border tensions. The article also may be designed to
reassure the Vietnamese that Moscow will protect their interests in
the Sino-Soviet talks scheduled for next month.
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ANGOLA: New Fighting in the East
A statement issued by UNITA on Thursday claims that
government troops, with the support of Cuban armor and aircraft,
have launched an offensive to recapture insurgent-controlled areas
in eastern Angola. UNITA cited the offensive as a reason it cannot
participate in the Angolan-South African cease-fire.
Comment: The offensive could be an attempt to relieve the
Angolan forces in Luau that have held out against insurgent attacks
since late January. UNITA now has over 3,000 soldiers near Luau, and
they probably will put up stiff resistance to any government effort to
reclaim lost territory. UNITA leader Savimbi is likely to believe that
a strong military showing in the east would underscore UNITA's
demand for a role in negotiations with Luanda leading to a regional
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SPAIN: Effort To Disrupt Basque Election
The Basque Socialist senator murdered on Thursday presumably
was killed by members of some offshoot of the terrorist organization
ETA, in order to disrupt the election tomorrow of representatives to
the Basque regional parliament and to strike back at Madrid for its
more ruthless tactics against Basque terrorists. Because of the
assassination, campaigning has been halted. All major parties,
including Herri Batasuna, the political front for ETA's military wing,
have condemned the act. Two groups have claimed credit for killing
the senator.
Comment: Popular revulsion may harm Herri Batasuna's showing
in the election because it is closely identified with terrorism. Sympathy
votes and the support of rightists who want to protest terrorism
will strengthen the Socialists' chances of placing a strong second
to the moderate Basque Nationalist Party. This could deprive the
Nationalists of their current working majority in the Basque
parliament. If they are forced to govern in coalition with either
the right or the left, their ability to cooperate with Madrid on
counterterrorism would be limited.
SOUTH KOREA: Further Easing of Political Ban
Seoul plans to announce today that President Chun is lifting the
ban on 202 of 301 persons prohibited from participating in politics. A
South Korean security official says several leading opposition figures
will not have their rights restored.
Comment: The announcement comes on the first anniversary of
Chun's initial easing of the ban, and he will point to it as an example of
his commitment to gradual relaxation of controls. The move should
strengthen the hand of Chun's ruling party in the parliamentary
elections expected later this year or early in 1985. The legal
opposition parties already are squabbling over how to absorb the
newly released politicians. Major opposition figures prohibited from
political activity will be tempted to violate the ban to preserve their
position. This could increase the chances for a clash with the
government this spring.
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West Germany:
Real GNP Growth
(Percent Change)
Unemployment
Seasonally Adjusted
(In Thousands)
IL
1984
(CIA
projected)
I I I I I I I I I I I I _I I I I I I 1
0 1979 1980 1981 1982 1983 1984
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Special Analysis
WEST GERMANY: Economic Policy Under Attack
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West German economic indicators are almost all positive, but the
government continues to be criticized for not tackling fundamental
problems. Business leaders complain of a lack of overall direction in
economic policy, and respected research institutes accuse the
government of lacking the will to bring about promised changes in the
structure of the economy that are necessary for medium-term growth.
Even members of Chancellor Kohl's center-right coalition question
whether the government can deal effectively with the country's
underlying economic ills.
Kohl had campaigned on a pledge to restore confidence and
incentive to an overtaxed, overregulated economy that was burdened
by a financially unsupportable social welfare system. The new
government moved quickly after taking office in October 1982,
increasing taxes and cutting social benefits, which reduced large
budget deficits substantially.
Over the past year growth has consistently outstripped forecasts,
and each new projection has been more optimistic than the one
before. After real GNP growth in 1983 of 1.3 percent, forecasts
for 1984 range from 2.5 to 3 percent, largely on the strength of
expected gains in exports and investment of 5 percent or better.
Unemployment, West Germany's most intractable economic problem,
could ease slightly this year.
Nevertheless, the government's much-proclaimed economic
turnaround has not yet materialized. West German businessmen
detect a sense of drift in economic policy as the government fails to
follow up on its initial steps.
Uncertainty in the business community has been fostered by:
- Government vacillation over tax reform and over how to
reorganize the social welfare system.
- Bickering within the coalition.
- The impending trial of Economics Minister Lambsdorff,
who is charged with corruption.
continued
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Kohl has been buffeted by a succession of problems related to
the economy. The proposed merger of the Thyssen and Krupp steel
companies collapsed in November, after Kohl had committed his
prestige by intervening to resolve differences delaying the plan. The
merger was central to government efforts to reorganize the steel
sector, which is being hurt by weak demand and cheap imports.
The bankruptcy of West Germany's largest construction company
also caused anxiety about the economy to grow. Some banks,
moreover, had to take emergency action to bail out a major private
bank.
The aggressive Metalworkers Union, the country's largest union
with 2.6 million members, announced last October that it was
mobilizing to secure a 35-hour workweek. Since then, labor has
demonstrated a new militancy in the face of firm resistance by
employers. Government officials and businessmen fear that serious
industrial disputes will develop this spring that could threaten the
recovery.
Widespread Criticism
West Germany's five major economic research institutes
acknowledged last fall that the economy was recovering more rapidly
and strongly than they had thought possible. As a result of unresolved
problems inherent in the structure of the economy, however, they
expect the recovery to be short lived.
The institutes believe business generally lacks confidence that the
growth will be sustained because the government has presented no
medium-term economic strategy. Specifically, Bonn has not made the
changes it led business to expect.
Subsidies to ailing industries, taxation, and bureaucratic
regulation have increased. According to the institutes, these
developments are discouraging investment and initiative.
A number of government leaders, as well as rank-and-file
members of the parties in the government, reportedly also lack
confidence in the government's policy. They worry that, if the recovery
were to founder and unemployment to resume its climb, the
government could be unseated by the Social Democrats in 1987.
Lambsdorff himself has said the election will be won or lost on
the issue of the economy. Government support among workers is
continued
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particularly vulnerable. They have lost income as a result of austerity
Some Cautious Optimism
The Council of Economic Experts presented a hopeful analysis in
November, asserting 3-percent real growth is attainable this year with
exports and investments playing leading roles. It seems determined
to counteract the widespread pessimism, which it considers
exaggerated. The council believes that such a misreading of the
economy has a self-fulfilling, depressing effect on investment.
The council, however, states that it is concerned that not enough
is being done to dismantle obstacles to growth. In particular, it cites
the need for tax reform and for ending oversubsidization of ailing
For the government, the most welcome aspect of the current
economic rebound is the respite in the growth of unemployment.
Joblessness is still near record-high levels, with 9 percent of the labor
Since August, however, joblessness has been inching downward.
Forecasters increasingly see unemployment holding steady or
declining slightly this year.
Outlook
Kohl is not yet in political trouble over the economy. Polls show
that, if an election were held now, the Christian Democrats would do
virtually as well as in the election last March.
The current limited recovery offers an opportunity to establish an
economic policy for the medium and longer term. Kohl almost
certainly realizes his political future largely depends on his handling of
the economy. He reportedly would like to introduce a new economic
strategy in May at the congress of the Christian Democratic Party.
The government, however, is unlikely to take decisive action on
the economy any time soon. Kohl remains reluctant to intervene in the
disputes over the timing of tax reform and other issues or to take a
position on the details of any issue. So far, he has not shown the will
to override internal dissension and develop a program.
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