NATIONAL INELLIGENCE DAY
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP88T00659R000100040001-2
Release Decision:
RIPPUB
Original Classification:
T
Document Page Count:
21
Document Creation Date:
December 27, 2016
Document Release Date:
September 25, 2012
Sequence Number:
1
Case Number:
Publication Date:
January 6, 1987
Content Type:
REPORT
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imerniTzr of ?.01.? vw...1 co.
Intelligence
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National Intelligence Daily
Tuesday
6 January 1987
Top Secret
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CPAS MD 87-004JX
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6 January 1987
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Contents
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USSR-Afghanistan: High-Level Visit
1
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Syria: Assad Reins In His Lieutenants
Spain-NATO: Formula for Military Participation
Cyprus: Turks Resettling Greek Areas
Notes
3
4
5
Vietnam: Leadership Changes Delayed
6
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France-West Germany: Meeting on European Defense
In Brief
7
8
Special Analyses
Guatemala: Coping With Economic Problems
Tanzania: Mwinyi's First Year
10
12
Top Secret
6 January 1987
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USSR- High-Level Visit
AFGHANISTAN:
The visit to Kabul of Soviet Foreign Minister Shevardnadze and
International Department Chief Dobrynin is intended to underline
the seriousness of the national reconciliation policies just
announced by Afghan leader Na jib, but the two may also be there
to ensure Afghan compliance with Moscow's new tactics and to
assess the effectiveness of overall Soviet strategy.
The visit follows the Afghfparty plenum, at which 'a unilateral
tease-fire and measures or achieving national reconciliation were
announced.)
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Comment: This is the highest level Soviet delegation to visit since the
invasion. The visit is undoubtedly intended to reinforce at home and
abroad the impression of Soviet seriousness as Moscow prepares for
UN-mediated peace talks in Geneva next month. The Soviets
probably hope this visit and Najib's initiatives will put pressure on
Pakistan to offer concessions while absolving the Soviet-Afghan side
in advance of any failure in the negotiations. 25X1
Shevardnadze and Dobrynin may also be charged with providing a 25X1
firsthand assessment of the Afghan situation to the Soviet leadership.
Moscow continues to insist on its original goals in
Afghanistan, and Najib's speech at the plenum offered no departure
from either continued ties to Moscow or the primacy of the
Communist Party, although the Soviets are evidently using more
flexible tactics for achieving these goals. Shevardnadze and Dobrynin
are also likely to impress upon Afghan leaders Moscow's
unwillingness to tolerate resistance to the expanded program
bringing nonparty members into the government.
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By suggesting that Soviet troops might leave, however, Moscow may
actually reduce the stability of the Afghan regime. Morale in Kabul is
low, and resistance leader Gulbuddin has offered amnesty to regime
figures who seek his protection
Top Secret
1 6 January 1987
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Top Secret
SYRIA: Assad Reins In His Lieutenants
Syrian President Assad is dealing cautiously with problems
sparked by Syrian involvement in terrorism and with growing
rivalries among his closest advisers.
Uk.senior-Syr, iair-Ffirtrig tnistf e fi - S'anlaaesrlast.
wz..4.K-Af Assad apparently is delaying further changes in key
security and military positions while he assesses the impact of
recent reassignment3 No promotions or reassignments have been
-111.nounced since the ouster of two intelligence chiefs last month set
off rumors that dramatic personnel shifts were imminent.
Assad may believe that the shock waves generated by his recent firing
of the heads of the General Intelligence Directorate and the Political
Security Office will be sufficient to reduce infighting for the time
being
Top Secret
3 6 January 1987
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SPAIN-NATO: Formula for Military Participation
Top Secret
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Spain may be considering a formula for military participation in
NATO?that would include acceptance of commitments beyond
its borders?partially to improve its bargaining position in talks
with the US. 25X1
According to a newspaper in Madrid with close ties to the 25X1
government, the plan would stop short of formal Spanish integration
into the Alliance's military structure but would give NATO
commanders operational control of some Spanish forces in wartime.
Under the formula, US forces in Spain would be an element of
Madrid's contribution to the Alliance. The US Embassy believes that
the article in the press almost certainly originated with senior Spanish
defense officials and probably represents an attempt to gauge the
Spanish public's reaction to such a plan. In response to attacks by the
opposition parties, Foreign Minister Ordonez subsequently denied
publicly that Spanish troops might be stationed outside the country,
but he avoided defining the nature of the military ties that Madrid
plans to negotiate with NATO. 25X1
Comment: The timing of the press report may be linked to the
resumption of Spanish-US negotiations next month on the status of
US bases in Spain. Madrid believes its membership in NATO should
make possible .a reduction in the US military presence in Spain.
The Spaniards are almost certainly attempting to reinforce their
bargaining position by suggesting that their forces will be closely tied
to, although not formally a part of, the Alliance's military structure.
Madrid may think that this formula would support its desire for a
major maritime role in the area of the Strait of Gibraltar because it
would imply that Spanish forces would be subordinated to maor
NATO naval commanders in wartime.
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4 6 January 1987
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Too Secret
Yugo.
Bulgaria E3,rch Sea
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Greece
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_Crete
,
5
L ibya ---------L1--Q's".;,- 0
Egypt
Mediterranean Sea
Boundary representation is
cot necessarily authoritative.
*ANKARA
Turkey
NICOSI* ..---
yprus
Lebano
Isra
30 Kilometers
30 Miles
Jordj.
300 Kilo eters
3op Miles
Turkish-Cypriot ''-eiclministered area
I NICOSIA
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Mediterranean Sea
Western Sovereign
Base Area (U.K.)
Famagusta
(4
709255 (A04466) 1-87
Top Secret
6 January 1987
Mediterranean Sea
4%
Turkish-Cypriotoiadmin
.1644
0
Varo,sha
0
Greekzeeitlemen
(now abandont-ch
\
1 Kilometer
.5 1 Mile
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Top Secret
CYPRUS: Turks Resettling Greek Areas
Turkish Cypriot leader Rauf Denktash may move to strengthen
the independent status of the "Turkish Republic of Northern
Cyprus" by slowly resettling Varosha, the formerly Greek Cypriot
resort area in Famagusta.
Denktash has long thought Greek
intransigence toward UN-sponsored negotiations left him free to
pursue his objectives, which included reopening Varosha and gaining
international recognition for the "Turkish Republic of Northern
Cyprus," without being criticized?even in the US.,
Denktash has since 1974 repeatedly threatened to resettle Varosha.
In recent months, Turkish Cypriot officials have contacted foreigners
who owned property in Varosha apparently to urge them to register
their claims or risk losing their property. In addition,
as many as 200 students from the Turkish mainland have
taken up residence in a newly restored hotel in Varosha. They may be
military dependents of Turkish troops who have been using two other
hotels there since 1975.
Ankara has discouraged Denktash's aggressive moves, partly
because it believes his acceptance of the latest UN proposal has
given the Turks the diplomatic high ground, but it might tolerate a
slow infiltration of Varosha.
Turkish opposition leaders have recently criticized the Ozal
government for not standing up for Turkish rights abroad, especially
after the EC's recent rejection of freedom of movement for Turkish
labor. Since Turkey's recent border clash with Greece, Ankara may
not be so inclined to restrain Denktash.
Comment: Denktash may believe that the deadlock in the UN's
efforts for a settlement provides an opportunity to give further
legitimacy to the "Turkish Republic of Northern Cyprus." His current
actions follow a pattern similar to that which preceded his unilateral
declaration of independence, which he also threatened for years
before acting in November 1983.
Greece and Greek Cypriots have tacitly accepted a Turkish troop
presence in the two hotels for years, but they are highly emotional
about their rights in Varosha and would be likely to react vociferously
to further settlement. In that event, they would probably turn to the
international community for support and blame the US for not reining
in the Turks.
5
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6 January 1987
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VIETNAM: Leadership Changes Delayed
Hanoi announced Sunday that a nationwide election for a new
National Assembly will be held in April. When it convenes in June,
new Assembly will choose successors to Truong Chinh, Chairman of
the Council of State, and Pham Van Dong, Chairman of the Council of
Ministers. Chinh and Dong, along with party elder Le Duc Tho, lost
their Politburo positions at the party congress last month. The current
National Assembly was expected to choose successors to Chinh and
Dong at a session late last month
domment: The apparent success of the conservatives indicates they
emain strong even after the party congress strengthened advocates
of economic reform, led by new party chief Nguyen Van Linh, at
the expense of traditionalists, led by Chinh. The delay creates an
unprecedented situation in which the top government leaders do not
sit on the Politburo and suggests that Linh will encounter strong
opposition to his reform agenda.
6
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6 January 1987
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Top Secret
FRANCE-WEST GERMANY: Meeting on European Defense
President Mitterrand has requested a meeting with former West
German Chancellor Schmidt to discuss European defense, according
to a US diplomatic source who thinks they will probably meet early
next month. Mitterrand has rejected some of Schmidt's ideas in the
past?including a proposal in 1984 for the formation of a 30-division
Franco-German army that would ultimately reduce the need for US
forces in Europe?and relations between the two have been cool.
Comment: Mitterrand would be unlikely to endorse any new proposal
for a Franco-German army, but both leaders may issue a statement
emphasizing the need for greater European defense cooperation.
They may also reiterate their view that such US initiatives as SDI and
the proposal to eliminate all nuclear ballistic missiles are ill conceived.
Mitterrand probably thinks that his meeting with the most prominent
moderate West German Social Democrat would improve the fortunes
of Schmidt's faction after the SPD's expected loss in the coming West
German national election. He probably also believes that such a
meeting will help him to reassert his role in French foreign policy?
an area in which Prime Minister Chirac has grabbed the initiative.
Mitterrand has no interest in undercutting the government of
Chancellor Kohl, but he may believe that such a meeting would put
pressure on Kohl to support French-sponsored bilateral defense
projects that have become bogged down.
Top Secret
7 6 January 1987
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In Brief
East Asia
Middle East
? South Korean Defense Ministry preparing letter accepting SDI
participation, according to US Embassy... likely to hedge for fear
Soviets will threaten boycott of 1988 Olympics... bureaucratic
infighting under way over which agencies will participate.
? About 400 Chinese students burned party newspapers
at Beijing University to protest press distortions of demonstrations
... students quiet elsewhere... authorities expediting students'
trips home for semester break to defuse further activity.
? China's coal exports grew by 30 percent last year to almost
10 million tons, or $400 million... Beijing hopes to reach
16 million tons this year... may cut into US market in East Asia.
? Iran named former Revolutionary Guardsman Ambassador to
Lebanon ... recall of last envoy demanded in 1983 for meddling in
domestic affairs... reflects Iran's desire to better monitor
increased radical Shia in Beirut and southern Lebanon.
? Lebanese ArmyvOlashed with security units loyal to President
yesterday in Christian enclave east of Beirut, saye
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.. likely to aggravate violence among Christians.
Europe
? French Government resisting union demands for wage increases
... facing demonstrations and brief shutdowns of public services
today ... still smarting from defeat on university reform, likely to
hold firm unless protests widespread.
? Leaders of major Pr t parties in Northern Ireland appealing
to Queen for referendum on.10-Irish Accord ... UK will
probably refuse... parties may use refusal to justify support for
civil disobedience.
continued
Top Secret
8 6 January 1987
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Amazon
GpIto de
Guayaquil
Brazil
South
Pacific
Ocean \pm'
r
e ?
?
300 Kilometers
3100 Miles
4
y
?
I
11
"N( Titicaca
Lego
*L A PAZ
Bolivia
nBc7nnodcaz repirye: ion
sari Unththotrihaive. Chile
Top Secret
6 January 1987
709260 (A01292) 1-87
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Top Secret
Americas
? Major gas find in southeastern Peru . . . if estimates accurate,
would boost reserves from lowest to third highest in South
America... may offset impact of dwindling oil reserves.
? Torrential rains in western Cuba damaged, destroyed estimated
25 percent of tobacco crop... may lose $13 million in hard
currency exports to West... rains provide limited relief from
current drought.
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South Asia
Liberation Tigers, the most powerful Sri Lankan Tamil guerrilla
group, announced control of civil administration in north on
1 January ... formed new political party, probably to woo northern
civilians... Colombo cutting fuel shipments in retaliation.
Top Secret
9 6 January 1987
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Guatemala: Economic Indicators, 1981-86
Note scale changes
Real GDP Growth
Percent
2
Budget Deficit as a Share of GDP
Percent
-4 1981
82
83
84
85
86a
Real GDP Per Capita
Index: 1981=100
100
?
80
60
40
20
_
-8 1981
82
83
84
85
86a
Inflation
Percent
40
30
20
1981 82 83 84 85 se 1981 82 83 84 85 86a
Coffee Export Earnings
Million US $
1981
82
83
84
85
86a
a Estimated.
311510 1.87
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Top Secret
Special Analysis
GUATEMALA: Coping With Economic Problems
Despite an improved financial situation and progress in
restraining inflation, the fundamental problems of Guatemala's
economy remain unsolved. The prospects for growth this year
are limited, and uncertainties about exports, budget problems,
and private investment will probably lead to a further decline in
living standards that will undercut President Cerezo's popularity.
The government has been able to reduce its fiscal deficit and stabilize
land strengthen the national currencyeaGcorziinQ.1a1be-La-Erabassy%
Since July, the rate of inflation has fallen considerably, although
inflation averaged 35 percent for the year?nearly double the rate in
1985. The economy failed to grow last year. however, and per capita
income has fallen 20 percent since 1981.
Successful negotiations with private banks cut Guatemala's debt
service by more than one-third last year. Cerezo failed to secure an
accord with the IMF, however, because of disagreement over the
timing of tax reform and the establishment of a new, unified exchange
rate4aeeeref+ng-tertIS-fm1Tassy1eporttm. The scheduled debt service
of $500 million this year will swallow 20 percent of the government's
budget and strain the economy further.
Political Repercussions
These policies have provoked neither strong criticism nor public
unrest, largely because Cerezo has enjoyed a honeymoon as
Guatemala's first civilian President in nearly 20 years. The return to
democracy helped him win promises of more than $300 million in
development assistance and trade credits during a five-nation
European tour in Octobe?ascoLdineert1S-7711178my-Fepogiagr
By emphasizing consensus and compromise, Cerezo has partially
allayed concerns that he would embark on a more radical course.
Businessmen also believe
that higher taxes on exports last year and increased scrutiny of
foreign trade transactions portend greater government interference
in the economy, aceording4es.Embassy4.eper4ing.
continued
TOD Secret
10 6 January 1987
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Top Secret
Cerezo has yet to face substantial opposition from an increasingly
active labor sector. The government's failure to ensure that both
public- and private-sector workers will get salary increases early
this year could lead, however, to labor unrest.
Outlook
Trade and budget problems, together with declining investor
confidence in the private sector, will probably limit economic growth
this year to 1 percent; and foreign exchange pressures that had eased
in 1986 are likely to start rising again. Embassy reporting suggests
that a projected fall in coffee receipts, which account for one-half of
the country's export earnings, will intensify balance-of-payments
problems. Declining tax revenues, which will probably result this year
from lower export earnings and the phasing out of certain taxes, will
leave the government's budget seriously underfunded. Moreover,
foreign exchange shortages are likely to reduce imports and make
debt servicing more difficult.
A continued decline in living standards and the increased risk of
popular unrest will tempt Cerezo to turn to populist policies and
expanded social programs to placate the lower classes and maintain
order. His failure to take tough stabilization measures, however, could
lead to even more acute economic problems and weaken his standing
with all segments of Guatemalan society.
In the best case, stable coffee prices and continued success in debt
rescheduling might allow Cerezo to enact new economic reforms or
policies to stimulate business activity. Then, in the absence of severe
foreign exchange shortages or budgetary shortfalls, the government
might be able to maintain its progress in combating inflation. In that
event, economic growth this year could be as high as 2 percent.
Top Secret
11 6 January 1987
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Special Analysis
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TANZANIA:
Mwinyi's First Year
President All Hassan Mwinyi has taken some initial steps to
reform Tanzania's stricken socialist economy during his first
year in office. He must yet contend with his still-influential
predecessor, Julius Nyerere, who is obstructing any effort to
move away from hisocialist system. Mwinyi's decision to
intervene in Mozambique's civil war and endemic government
infighting also threaten to undermine his efforts to proceed
with economic reform.
Since taking office in November 1985, Mwinyi has negotiated an
accord with the IMF, rescheduled international debts, and enacted a
realistic five-year economic recovery plan. Nyerere, who retains the
party chairmanship, has resisted these economic reforms because
he sees them as undermining his cherished socialist legacy.
The Mozambican Morass
In November, pressure from the Frontline States and from Nyerere
apparently pushed Mwinyi to agree to send troops to Mozambique to
help fight the South African-backed RENAMO rebels. The President
is mindful of Nyerere's economically disastrous military intervention in
Uganda to oust dictator Idi Amin in 1978-79. He also reportedly fears
the costs of intervention in Mozambique will lead to abrogation of the
IMF agreement, linchpin of his economic reform program.
The Domestic Scene
The pragmatic Mwinyi
I wrung the
concessions on economic reform from his former mentor. Mwinyi's
continued
Top Secret
12 6 January 1987
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Top Secret
efforts have provoked controversy between like-mind d pragmatists
and Nyerere's loyalists in the government and party, hich has
slowed implementation of reform measures
Asa
result, there is growing disappointment a-mong those who expected
that new economic policies and fresh aid infusions would bring about
a quick and dramatic rise in living standards
Mwinyi has not followed up his popular campaign to eliminate
corruption by prosecuting implicated government officials, largely
because many suspects have direct links to Nyerere. The decision
has cost Mwinyi some domestic support in recent months. He is
compensating by taking up several less volatile issues, including
wildlife poach i ng,asGor44fig-tcrth'elIS-Ernbassy,
Outlook
If Tanzanian troops become bogged down in a long and inconclusive
struggle in Mozambique, the costs, coupled with Nyerere's
obstructionism on economic affairs, may jeopardize Dar es Salaam's
ability to meet IMF standards for review of the standby agreement
early this year. And when the decision to send troops to Mozambique
becomes widely known, it is likely to be unpopular with most
Tanzanians who believe deep-seated economic problems must be
solved first.
Nyerere almost certainly will continue to slow the dissolution of
socialist structures, even if he makes good on his promise to resign
the party chairmanship this year. In any case, Mwinyi probably will not
regain the political momentum he enjoyed last summer at the height
of his anticorruption drive.
Top Secret
13 6 January 1987
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