NATIONAL INTELLIGENCE DAILY WEDNESDAY 14 MARCH 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000200010019-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 21
• Document Creation Date: December 27, 2016
• Document Release Date: May 27, 2010
• Sequence Number: 19
• Publication Date: March 14, 1984
• Content Type: REPORT

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J ?
National Intelligence Daily
Wednesday
14 March 1984
Director of
Central
Intelligence
6)CPAS/CTG
I Top Sewell
CPAS NID 84 061 JX
14 March
Coav A >q
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Portugal: Economic Problems ................................................ 8
UK-Libya: Concern About Libyan Terrorism .......................... 9
Brazil: Inflation Endangers IMF Program ................................ 10
Canada-US: Reaction to Cruise Missile Test .......................... 11
China-West Germany: Satellite Technology Cooperation .... 11
Spain: Development of New Tank .......................................... 12
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Contents
Iran-Iraq: Iraqi Advance Stalls ................................................ 1
USSR-Syria: Soviet Official's Visit Ends ................................ 2
NATO: Interest in New Tactics for CDE .................................. 3
USSR-Sweden: Alleged Presence of Minisubmarines ............ 4
Ell Salvador: Military Activity .................................................... 5
14 March 1984
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IRAQ-IRAN: Iraqi Advance Stalls
Iraqi forces have made only minor gains in trying to retake the
southern Majnoon island, and they face more problems in continuing
Iraqi units have
moved only a short distance on the southern Majnoon island since
Saturday. The Iranians are ferrying armored vehicles to the northern
island from their pontoon bridge, which is now 75 percent completed.
Iran accused Iraq of using chemical weapons during fighting
yesterday on the island.
some Iraqi commanders have been
replaced as a result of their poor performance during recent battles in
the marsh. High casualties among Iraq's predominantly Shia irregular
forces have prompted some antigovernment activity in several Shia
towns in Iraq
Comment: Iraq's lack of aggressiveness in attackin Iranian
forces
suggest t at its attempts to recapture the
islands will ai . t a minimum, Iranian reinforcements will slow the
Iraqi advance on the southern island and could stall it completely.
Even if Iraq is able to occupy the southern island, its forces probably
will not be able to advance across the narrow, kilometer-long
causeway to the northern island.
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Soviet and Syrian handling of Politburo member Aliyev's four-day
visit to Damascus, which ended yesterday, suggests the two sides
reached general agreement on major issues.
The joint communique says Aliyev met with President Assad and
Vice Presidents Khaddam and Rifaat Assad in an atmosphere of
"friendship and mutual understanding." Syrian media stress that the
two sides share "identical" views on regional and international issues
and that both welcome the US "defeat" in Lebanon.
In speeches on Saturday, Aliyev made no allusion to the divisions
in the PLO or between Assad and PLO leader Arafat, while Khaddam
praised the rebels and criticized Arafat only indirectly. The language
in the communique calls on the PLO to avoid "separate deals," such
as President Reagan's peace plan, and to cooperate with Syria.
The communique and Aliyev's speech omitted the usual Soviet
call for an international conference on the Arab-Israeli dispute
Comment: The visit of Aliyev, the highest ranking Soviet to travel
to Damascus in four years, appears to have gone more smoothly than
Khaddam's trip to Moscow last November. At that time, the USSR
indicated its unhappiness with Syria's support for Arafat's PLO
opponents.
Moscow's willingness to incorporate language in the communique
implicitly critical of Arafat's policies suggests it wants to avoid further
contention with Damascus over the issue. It also may indicate Soviet
concern about Arafat's recent discussions with Jordan's King
Aliyev presumably met with Rifaat to probe his views and
determine whether his new prominence as Vice President will affect
bilateral relations.
In addition, Aliyev probably tried to ascertain Syria's intentions in
Lebanon. The omission of a call for an international conference
evidently was in deference to Damascus, which has long been cool to
the idea. It also may reflect a Soviet assessment that prospects for
convening one soon are slim.
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The Allies generally have supported the US on tactics during the
first round of the Conference on Disarmament in Europe that ends on
Friday, but most may want a new approach by the time the talks
resume in May.
NATO members have rebuffed the East's attempts to focus the
negotiations on declaratory measures, especially nonuse of force and
no-first-use of force. They have countered Soviet charges that the
West is not serious about arms control.
The Allies also have tried to discourage interest among the
neutral and nonaligned countries in nonuse of force and in measures
to limit military activities. They have tried to focus attention on the
West's own measures on exchange of information on, and prior
notification of, military activities.
Last Friday, however, the neutrals overcame their differences.
They formally proposed several confidence- and security-building
measures that include ceilings on certain maneuvers.
Meanwhile, media in Western Europe have emphasized the failure
of the conferees to agree on what they should negotiate. Allied
officials are voicing concern that, if the West does not change its
strategy, the stalemate will continue when talks resume.
Comment: Most Allies want to show their publics that some
progress is being made at Stockholm, especially while the INF talks
and START remain suspended. West Germany and the Netherlands,
in particular, believe the West should explore proposals advanced by
the neutrals for limiting military activities and consider possible
proposals that the West could advance along these lines. They view
measures for constraints as one of the few areas on which most
participants could agree to negotiate.
Moreover, many Allies are coming to believe that the West will
have to consider some form of declaration on nonuse of force to gain
the USSR's agreement to address the West's proposals on
information exchange and prior notification. Until recently, the Allies
were more concerned that any hint of Western willingness to discuss
nonuse of force could result in an unwelcome declaration that the
Soviets would pocket while refusing to negotiate on the West's
measures.
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into the Soviet,Unionl Boundary representation
not necessarily authoritative.
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USSR-SWEDEN: Alleged Presence of Minisubmarines
Last week a spokesman for the Swedish Navy said that a foreign
submersible tried to escape from the sealed-off Karlskrona
archipelago on 26 February. He also announced that the Navy is
giving priority to locating firm evidence, including tracks, of activity by
foreign submarines.
Prime Minister Palme, in his first public statement on the current
activity, said that no conclusions can be made about the identity of
the intruders. Despite the submarine search and harsh criticism by
opposition parties, he has moved to resume high-level bilateral
contacts with the USSR.
A government poll conducted late last year showed that 80
percent of the Swedes agreed that the USSR is a hostile or unfriendly
force. This is nearly double the number in 1981-just before a Soviet
submarine ran aground in Swedish waters
The US Embassy reports that there is strong support for taking
firm measures against the intruders and that publicity over the
incidents has led to record numbers of volunteers for territorial
defense organizations. Many Swedes, however, are uncertain about
using force in peacetime. They worry about the consequences if there
are Soviet casualties in any capture attempt.
Palme's need to maintain public support is likely to force him to
move cautiously in an effort to improve ties with Moscow.
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EL SALVADOR: Military Activity
Fighting between government and guerrilla forces in the central
and eastern parts of the country has increased in recent days. F---j 25X1
Comment: The Army in recent weeks has continued offensive
operations aimed at keeping the insurgents off balance. To regain the
initiative, however, the guerrillas probably will, launch surprise attacks
soon in the east.
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Prime Minister Soares, who arrives in Washington this week, is
determined to implement austerity measures required by the IMF,
despite political and social consequences.
Attempts by the Communists to exploit workers' grievances have
not raised labor unrest to serious proportions, but Lisbon is seeking a
relaxation of the terms of its IMF loan in talks with the Fund that begin
this week. IMF officials have said they will not change the current
account target but may ease the budget deficit target and ceilings on
domestic credit if the Portuguese fulfill other promises they agreed to
Comment: Talks with the IMF almost certainly will focus on
Lisbon's desultory efforts to reform public-sector enterprises and its
failure to raise food prices this year. The government does not want to
provoke labor unrest, and it has not raised domestic food prices
enough to offset price increases of imports. Lisbon may agree,
however, to additional layoffs at some of the major state-owned
companies.
Soares's Socialist-Social Democratic coalition has shown the
capacity to withstand pressures that have toppled previous
governments. Despite strains remaining from a vote last month that
split the coalition on abortion reform, the two parties are committed
to grappling with the country's economic problems.
The two parties soon have to select a presidential candidate or
candidates for the election in 1985, a task that could cause the
coalition to collapse. Soares wants to run, but he needs Social
Democratic support to win.
The Social Democrats have held out for a candidate of their own,
although they might ultimately back Soares if he offers them the
prime ministry. It is uncertain, however, that the Socialist Party would
be willing to agree.
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UK-LIBYA: Concern About Libyan Terrorism
The British Government is worried that the bombings in the UK
over the weekend portend more Libyan-sponsored terrorism.
According to the US Embassy, London, the Foreign Office has called
on Tripoli to honor the commitment it made in 1980 to refrain from
violence in the UK. The Libyans reportedly have responded by saying
that, if London persists in accusing them of complicity in the
bombings, they will review their policy of not providing aid to the Irish
Republican Army. The Embassy also reports that the British have
decided to expel some Libyan diplomats in response to the
bombings.
Comment: The threat of Libyan retaliation against some of the
8,000 British nationals in Libya limits London's leverage over Tripoli.
In addition, the UK probably is reluctant to jeopardize its substantial
economic dealings with Libya, which last year imported British goods
worth $500 million. Unless there is a substantial increase in Libyan-
sponsored terrorism in the UK, the government is unlikely to do much
beyond expelling the Libyan officials.
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BRAZIL: Inflation Endangers IMF Program
Increasing inflation is jeopardizing Brazil's IMF stabilization
program. After subsiding substantially during the last two months of
1983, inflation surged again in January and February at an annual rate
exceeding 200 percent. The IMF wants Brazil to hold inflation down to
Comment: Because of Brazil's indexation system, steeply rising
prices are reducing prospects for meeting the IMF's fiscal and
monetary targets for the first quarter of the year. Failure to meet
targets for the first quarter probably will require further renegotiation
of the already revised IMF agreement and disrupt impending foreign
bank support. The rising inflation also is likely to convince a growing
number of Brazilians that the stabilization program is not working.
Unless inflation is reduced substantially by April or May, Brasilia will
face intense demands at home for a break with the IMF and for a
moratorium on debt repayment.
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CANADA-US: Reaction to Cruise Missile Test
Less than 1,000 people participated in anti-cruise-missile protests
last weekend in Canada. Three people were arrested when
demonstrators scuffled in front of the US Embassy. Media reports
state that cold weather prevented larger participation, but the
Embassy suggests that public interest in testing may be eroding. 25X1
Comment: The antitesting groups lost momentum when a federal
court refused to issue an injunction, and Ottawa announced the test
only 48 hours before it was conducted. Nevertheless, antitesting
groups continue to challenge the constitutionality of the government's
decision to permit the tests. They probably are encouraged by press
reports of Washington's intention to ask permission to test additional
weapon systems in Canada. A favorable court decision or further US
requests could become an issue in the coming federal election
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CHINA-WEST GERMANY: Satellite Technology Cooperation
A protocol for cooperation in space science and technology
signed by the Chinese and the West Germans in Bonn last week may
give West Germany an edge over other competitors in trying to sell
direct broadcast satellites to China. The protocol provides for
extensive cooperation in communications satellite systems research,
development, and manufacture. Press reports state the two countries
also will cooperate in the production and design of telephones,
radios, and scientific satellites. The Chinese Minister of Aeronautics
Industry visited West German firms before signing the agreement.
Comment: China plans to announce its decision on a foreign
supplier for a direct broadcast satellite in September. To develop the
capability to manufacture its own satellites, Beijing wants the
purchase to include provisions for technology transfer. Extensive
contacts between China and West Germany suggest that Bonn may
be willing to transfer technology in order to strengthen its competitive
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SPAIN: Development of New Tank
The US defense attache reports that Spain has decided to
develop a main battle tank rather than coproduce the West German
Leopard II or the French AMX-32. The tank will be a successor to the
French-licensed AMX-30, which will not be produced in Spain for
domestic orders after this year. Madrid is seeking technology for the
new project from France, West Germany, and the US. A major factor
in the decision will be the right to use the licensed technology to
produce an export variant.
Comment: Spain hopes this project will help modernize its
defense industry and maintain employment. Although the Army will
order 400 tanks, Madrid is trying to guarantee long-term production
by offering a competitive tank on the export market. Madrid has
stated that French armored vehicle technology is inferior and that US
transfer policies are too restrictive, suggesting that Spain probably
will choose West German technology. Bonn is interested in
cooperating with Madrid, because this would allow West Germany to
gain from sales to countries to which it cannot sell directly.
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