(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000600010007-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: January 12, 2017
• Document Release Date: August 12, 2010
• Sequence Number: 7
• Publication Date: October 28, 1982
• Content Type: REPORT

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ELLI
Director of
d Central
(Cable)
National Intelligence Daily
Top Stcret
Top Secret
CPAS NIDC 82-252C
28 October 1 25X1
Copy 402
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USSR-US-China: Brezhnev's Speech to the Military . . . . . 1
USSR: Size of Grain Crop . . . . . . . . . . . . . . . . . 3
UK: Important Bye Zections . . . . . . . . . . . . . . . . . 4
Mexico-Guatemala: Border Problems . . . . . . . . . . . . . 5
Norway: INF Funding Issue . . . . . . . . . . . . . . . . . 6
Nicaragua: Pressure on Foreign Banks . . . . . . . . . . . 7
Oman: Aid for Arms Modernization . . . . . . . . . . . . . 7
Seychelles: New Coup Plot . . . . . . . . . . . . . . . . 8
China: Census Results . . . . . . . . . . . . . . . . . . . 8
Sri Lanka: President Plans Referendum. . . . . . . . . . . 9
France: Planned Cutback in Nuclear Power Program . . . . . 10
Kuwait: Stock Market Crisis . . . . . . . . . . . . . . . . 10
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USSR-US-CHINA: Brezhnev's Speech to the Military
President Brezhnev attacked US policies yesterday and indi-
cated US pressures require Soviet countermeasures, including initia-
tives toward China.
The Soviet leader, in a speech to senior military
officers, stressed the need for "even higher" combat
readiness and also emphasized the need to keep pace with
the US in weapons technology. In addition, he claimed
"practical preparations" are under way for the deployment
of intermediate range US missiles in Western Europe.
Regarding relations with China, Brezhnev said the
USSR "sincerely" wants to normalize ties but that Moscow
has seen no "radical" changes in China's foreign policy.
He then noted--without explanation--that the USSR cannot
ignore "the new things" that appear in Chinese policy.
Brezhnev's remarks came after
the US Embassy in Beijing had said that the Sino-Soviet
talks, which reportedly ended on 20 October, resumed this
week. According to the source, the Soviet delegation
should return home tomorrow.
Comment: Brezhnev's emphasis on increased combat
readiness and technological competition with Washington,
as well as references to his personal role in formulating
defense policy, probably were intended to reassure the
military that the leadership shares its concerns about
US strategic weapons developments. The speech, however,
falls short of an explicit call for increased defense
spending.
The President drew attention instead to shortcomings
in the domestic economy. In highlighting the theme of
economic self-sufficiency, he said the economy can rely
"almost entirely" on its own economic resources and
spoke of eliminating dependence on foreign grain "in the
future."
//Brezhnev's reference to "practical preparations"
for US missile deployments in Western Europe goes beyond
the previous official formulation. In March, Brezhnev
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stated that Moscow's moratorium on deployments of "medium-
range systems" would remain in effect until the US begins
practical preparations for such deployments. Brezhnev's
failure yesterday to mention the moratorium or Soviet
countermeasures indicates the USSR is trying to increase
anxieties in NATO about the consequences of initial US
deployments scheduled for the spring of 1983.//
As was the case in March, Brezhnev's emphasis on the
Soviets' desire for better relations with China was not
accompanied by any sign that the USSR is prepared to make
concessions. Nonetheless, the context of his remarks
yesterday seemed intended to indicate that relations with
China were a potential bright spot and could be used to
By telling the commanders that Moscow "must not
ignore" positive developments in Beijing, Brezhnev may
have had one eye on preparing the military for any new
initiatives toward China. Such initiatives might include
a gesture of a token unilateral troop withdrawal from the
Sino-Soviet border or a proposal for mutual withdrawals.
According to diplomats in Beijing, the Chinese expect some
i
i
n
tiative from the Soviets on the troop issue.
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USSR: Size of Grain Crop
//The grain harvest in the USSR is now virtually complete, and
it still appears likely the crop for 1982 will total about 165 miZ-
Zion tons.//
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^
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^
Estimates by Soviet officials
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of the crop range from 140 million tons to 190 million
tons.//
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//Since the beginning of July, the Soviets have
bought 16.5 million tons of grain, mostly in the last
six weeks. Canada and Argentina have sold them the larg-
est amounts, and Moscow is negotiating with Buenos Aires
for another 2 million tons.//
Comment: /Estimates of the grain harvest
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have been off by no more than 8 percent
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during each of the past four years. If the crop this
year were to prove to be that much higher than the current
//The total amount of grain Moscow will import in
the market year ending next June cannot be forecast with
precision. Purchasing patterns to date have not been
consistent with the roughly 45 million tons the Soviets
are likely to need to maintain current consumption levels.//
estimate, it would total about 178 million tons.//
lion.//
//Unless Moscow increases its orders from the US dur-
ing the next six weeks, total imports this year will fall
short of the 45-million level because of transportation
constraints. The limited amount of grain available from
other sources suggests the USSR would have to buy about
13 million tons from the US to reach the total of 45 mil-
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UK: Important Byelections
Top Secret
//The new political season in the UK, which could end with a
general election, will be ushered in by two important byeZections
today. //
//The contests are in Labor-held Peckham, near London,
and Tory-held Birmingham Northfield in the industrial mid-
lands. Both districts are economically depressed and in
the past have been Labor strongholds.//
Comment: //Labor needs victories in both contests to
maintain credibility as the major opposition to Prime Min-
ister Thatcher. Labor moderates, who strengthened their
position at the party conference in September, would like
to point to wins as proof that the party has to reverse
its leftward drift if it is to regain power.//
//Victory in Birmingham, where polls show a close
race, would be particularly satisfying. Labor has not
been able to win a byelection in a Tory-held seat since
1971, and its candidate is a moderate who told leftwing
spokesman Tony Benn to stay out of the campaign.//
//The Tories are hoping for strong second-place
finishes, particularly in Birmingham, which has many of
the skilled working-class voters who helped the Conserva-
tives win the general election in 1979. Third-place
finishes would revive fears the recession could bring
about a defeat in the next general election.//
//On the other hand, a Tory victory in Birmingham
would increase party pressure on Thatcher to call new
elections this spring. It also might encourage her to
proceed with a cabinet shuffle later this year.//
//The Social Democratic - Liberal Alliance also is
hoping for good showings in order to regain media atten-
tion. One of the more prominent Social Democrats is
running in Peckham.//
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MEXICO-GUATEMALA: Border Problems
//Guatemalan troop incursions, insurgent use of Mexican territory,
and refugee flows have become national issues in Mexico, desp2te the
government's efforts to play down border tensions.//
The government recently sent a federal security team
to the south to investigate alleged border incidents,
but--in keeping with its olic --it has not made the
team's findings public.
Mexican press coverage of the border has increased
substantially in recent weeks. The governor of Chiapas
recently told senators of the dangers of cross-border in-
cidents and called for greater federal attention to the
area.
The government has responded to the publicity by
creating a national commission to investigate incidents
along the border. Defense and internal security officials
also have tried to ease public concerns by maintaining
the situation is under control. In diplomatic channels,
Mexico has assured international relief agencies it is
sympathetic to the needs of Guatemalan refugees and has
urged the Guatemalan Government to restrain its troops
operating along the border.
Comment: //Mexico so far has ordered Army units in
the border area not to move against the insurgents and
has avoided antagonizing domestic leftists sympathetic
to the guerrilla cause. Nonetheless, the focus of na-
tional attention and the expected continuation of the
Guatemalan counterinsurgency near the border will aggra-
vate tensions. As a result, President-elect de la Madrid's
administration may be forced to expand refugee aid programs
and security measures in the area.//
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NORWAY: INF Funding Issue
//A political dispute is developing in Oslo over funding INF
Comment: //The minority Conservative government may
force a vote on Norway's $6.8 million contribution for
new medium-range nuclear missile sites in other NATO
countries during the budget debate next month despite
the opposition Labor Party's call for a delay. With
similar decisions still ahead in Denmark and perhaps the
Netherlands and Belgium, Labor Party leaders want to
avoid appearing to.take the lead in funding a project
that they believe is increasingly in jeopardy. Prime
Minister Willoch has rejected the request for delay and
has implied he would be willing to face a vote of confi-
dence on the issue.//
//The government evidently believes that anti-INF
groups in Norway will gather strength and that it is
prudent to seek passage of the funding soon. Nonetheless,
many politicians probably dislike this departure from the
usual consensus approach to decisions on security issues.//
//The antinuclear movements seem likely to secure
some defections from the Center and Christian People's
Parties, on which the minority government relies for
support. The voting outlook is further confused, however,
by the possibility that moderate members of the Labor
Party will abstain.//
//The debate in Norway has not spread to the Nether-
lands and Belgium. Unless the funding issue prompts
interest among INF adversaries and the public in the
status of site preparations, it is unlikely to contribute
to delay in missile deployments. The Norwegian debate,
however, may be a prelude to intensified activity by
opponents of INF throughout Western Europe in anticipation
of scheduled missile deployments late next year.//
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NICARAGUA: Pressure on Foreign Banks
The Sandinista. government has indicated it may re-
fuse to honor its foreign debts of over $1 billion if
its creditor banks do not soon extend a sizable new loan.
Nicaragua is seeking a short-term credit of $68 million
to cover both its next installment in December and imports
of agricultural supplies. Despite a disposition to help
Managua avoid default, foreign banks reportedly are re-
luctant to agree to such a large loan for fear of losing
more money.
Comment: Nicaragua faces a severe foreign exchange
shortage as a result of declining export earnings, capital
flight, and falling foreign aid receipts. The Sandinistas
thus far have avoided defaulting on foreign debt payments,
but meeting the payment in December will be especially
difficult. Both sides have an interest in reaching
accommodation, however, and the banks probably will be
willing to come up with a small credit if the Sandinistas
can offer assurances of future steps toward austerity. C
OMAN: Aid for Arms Modernization
An Omani source has told the US Embassy the Defense
Ministers of the Gulf Cooperation Council will recommend
$1.2 billion in military aid for Oman at the Council
summit next month. The funds would be allocated over
six years for specific equipment purchases. In addition,
Saudi Arabia reportedly may provide a grant of $300 million
for military projects. Saudi Arabia, Kuwait, the United
Arab Emirates, and Qatar have provided Oman with $1 billion
for arms purchases since the mid-1970s.
Comment: If confirmed, the new funds will be the
first extension of military financial aid by the Council
to a member state. They may be intended to ensure future
Omani arms purchases are compatible with the Council's
goal of integrated weapons inventories. Although the
British have the inside track for sales of interceptor
aircraft and other modern military equipment to the
Omanis, the US may be asked to provide weapons the UK
cannot furnish. Muscat may use the aid from the Council
as leverage in negotiating terms of its access agreement
with the US.
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SEYCHELLES: New Coup Plot
President Rene's distrust of Western intentions
toward his regime will be deepened by press reports of
a new plot in London, apparently involving the same exile
group that was behind the attack by mercenaries last
Comment: //Growing factionalism in the government,
Rene's loss of popularity following the harsh repression
by Tanzanian troops of the Army mutiny in August, and
a rise in black nationalism are weakening the regime.
Rene probably is desperate enough to seek help from any
quarter, especially if he doubts Tanzanian willingness
to continue proping up his regime. Rene is not likely
to move against the US satellite tracking station at
this time, but his increasing dependence on outside sup-
port may result in a larger role for anti-Western powers.//
CHINA: Census Results
The census figures announced yesterday are substan-
tially lower than figures circulated earlier by some
Chinese officials, but the new total of slightly over
1 billion still confirms an increase in the rate of pop-
ulation growth. The officially reported population has
increased by 314 million since the last count in 1964.
The growth rate for 1981 is given as 1.45 percent, up
Comment: The census depends heavily on registration
tabulations of households, posing the danger that incom-
plete registration data has lowered the count. With
government encouragement of family planning undermined
by rural policies rewarding larger families, Beijing
will find it difficult to limit the growth rate.
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SRI LANKA: President Plans Referendum
Top Secret
President Jayewardene has announced plans to hold
a national referendum on extending the existing parlia-
ment until 1989 in lieu of the parliamentary election
due next July. The referendum is legal under the consti-
tution of 1978. It reportedly may be held as early as
mid-December. Before the vote, Jayewardene plans to
shore up the popularity of his United National Party by
asking all its members of parliament to resign so that
he can get rid of corrupt members.
Comment: The President views his own reelection
last week as a popular mandate to continue his pro-Western
government's market-oriented economic policies, and he
is gambling his victory will ensure a positive vote on
the referendum. Bypassing the election in 1983 would
prevent opposition parties from eroding the United
National Party's unusually large majority in the current
parliament and would prolong its ability to amend the
constitution. The referendum, however, also may allow
the disparate and demoralized opposition parties to
portray the President's party as afraid to face the
electorate. Such an issue might enable them to muster
a majority against the referendum.
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FRANCE: Planned Cutback in Nuclear Power Program
The government plans to reduce France's domestic
nuclear power program because of a slowdown in the growth
of electricity demand, and it will put more emphasis on
exports. Beginning in 1984, the National Electric
Company will slash its current order rate of three reac-
tors per year by as much as 50 percent. Plants under
construction are not affected, however, and France will
complete 30 nuclear power reactors by 1989.
Comment: Scaling down the program will be difficult.
Labor unions, nuclear power advocates, and opposition
parties are against the proposed cutback. The projected
reductions will not solve the problem of excess nuclear
power capacity by the end of the 1980s unless plants
already under construction also are delayed. To counter
its critics and reduce the damage to the nuclear industry,
the government probably will become even more aggressive
in the international nuclear reactor market.
KUWAIT: Stock Market Crisis
A sharp decline in stock prices in Kuwait over the
last several months is damaging the economy. Retail
activity is down, land prices have dropped, some contrac-
tors and private sector employees have not been paid, and
bankers fear a run by depositors. The government has
purchased $90 million worth of stock to help support share
values and has deposited $350 million in commercial banks
to improve liquidity. The cabinet on Sunday proposed a
special government fund that would be available to traders
unable to meet their commitments.
Comment: Postdated checks are commonly used in
Kuwait to pay for stocks, leaving investors overextended
when prices subsequently drop. The crisis developed when
many investors were caught short. The regime is reluc-
tant to antagonize speculators--some of whom reportedly
are members of the royal family--or bankrupt small inves-
tors. As a result, government expenditures to cover market
liabilities almost certainly will increase substantially
over the next few years.
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