NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029400010014-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 16, 2016
• Document Release Date: January 4, 2005
• Sequence Number: 14
• Publication Date: October 8, 1976
• Content Type: REPORT

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nal Intelligence Daily Cable for Friday October 8, 19 76 .
The NID Cable is for the purpose o intorming
senior US officials.
THAILAND: Military in Control
RHODESIA: Nationalists' Meeting
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CUBA: SWAPO Leader Visits
PERU: Signs of Uncertainty
COLOMBIA: State of Seige
UK: Monetary Policy
ITALY: Economic Stabilization Program
JAPAN-CHINA: Peace Treaty
Developing Countries: Oil Price Rise
USSR-ANGOLA: Neto Welcomed Warmly
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THAILAND: Military in Control
I I The new military regime in Bangkok appears firmly
in control
I Admiral Sa-ngat and his colleagues continue to take
pains to convey the impression that they intend to pave the
way for an eventual return to representative government.
//Eighteen general officers--some of them recently
retired--have been appointed to the new ruling body--the Na-
tional Administrative Reform Council--but the military leaders
are having difficulty identifying and persuading prestigious
and compatible civilians to serve on the council with them.//
//Sa-ngat has indicated that the new council should
expect to manage Thailand's affairs for only a few months until
an interim civilian government backed by the military can be
formed, but council members differ widely on the length of time
they expect to be in office.//
//A national assembly is being envisioned to re-
write portions of the constitution, presumably to increase the
prime minister's power and to assure that the government will
become more stable.//
sequences.
I The strongly anticommunist posture of the new regime
has provoked sharp comment from Vietnam. Hanoi accuses the Thai
military of collaborating with the US in arranging the return
of exiled dictators in a deliberate scheme to provoke the down-
fall of parliamentary government. Hanoi warns that if the new
government follows a pro-US policy, it will face serious con-
RHODESIA: Nationalists' Meeting
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25X1 //Leaders of Bishop Abel Muzorew a's Rhodesian na-
tionalist faction will meet tomorrow in Salisbury to consider
various settlement proposals. 17 1 25X1
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//The Muzorewa faction is against allowing whites
to control the defense and security forces durin the transi-
tional period. I I other
nationalist groups also oppose continued white control of the
security forces.//
//Many white Rhodesians appear to have accepted
the likelihood of a black Rhodesian government within two years.
Most whites seem to be taking a wait-and-see attitude before
deciding whether to emigrate or to remain under a black govern-
ment.//
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//White businessmen are concerned that continuing
disunity among the black groups may lead to violence which
would affect whites as well. Many whites favor Joshua Nkomo,
who is widely regarded as the most moderate black leader, to
become the first black head of government.//
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I //The intention of many whites to remain in the
country cou change quickly if blacks gain control of the de-
fense and law and order portfolios under an interim government.
The whites fear that black control over the security forces
would lead to widespread violence by unruly guerrilla forces.
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I Apparently in response to recent US efforts to find
a peace ul solution to the problem of Namibia, the Castro
regime has sharply underscored its commitment to the "libera-
tion" of Namibia by greeting Sam Nujoma, president of the
South-West Africa People's Organization, with fanfare usually
reserved for friendly chiefs of state.
Nujoma arrived in Cuba on October 1 and was met at
the airport by four members of the Cuban party Political Bur-
eau, including Fidel Castro. High-level talks began almost
immediately and continued until October 4, when Nujoma began
the usual round of protocol activities and visits to historic
sites.
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I I According to the Cuban press, Nujoma paid strong tri-
bute to Castro and the Cuban people for the "practical" sup-
port they gave to Popular Movement forces in Angola, suggesting
that he expects to receive a similar pledge of assistance for
his own struggle. The Cubans are likely to provide Nujoma with
light weapons, supplies, training, and technical su r
PERU: Signs of Uncertainty
Peruvian President Morales Bermudez unexpectedly failed
to deliver the customary October 3rd "state of the revolution"
address in which he was to outline future government policy.
There was no explanation for the break with tradition, but sev-
eral sources suggest that government leaders could not agree on a
major aspect of policy, a more restrictive labor law likely to
provoke a violent reaction from the unions.
In the past three months, Lima has become increasingly
sensitive to growing domestic criticism. Leftists and other op-
ponents of recent policies charge that the regime is abandoning
the revolution. They cite as evidence the restoration of the
fishing fleet to private ownership, purges of leftists from the
government, improved relations with the US, and rumors of
reversals in the land distribution program. The press is
displeased with continuing government control, censorship, and
harassment of journalists.
J Many civilians are calling for an end to the suspen-
sion o iberties under the state of emergency decree, and some
leaders are taking steps to organize a political front to press
for restoration of civilian rule. Popular backing for the Pres-
ident seems weak, and the degree of armed forces support for
his position is uncertain.
Facing such criticism, Peru's leaders apparently dis-
agree on the new job security law and on its timing. Since it
would reportedly restrict strikes and give management greater
latitude in dismissals, it would be certain to evoke labor
protest which could catalyze dissatisfaction throughout the
country.
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COLOMBIA: State of Seige
wide state of siege.
Colombian President Lopez has again imposed a nation-
Government spokesmen said the action was necessary to
counter a wave of labor unrest and kidnapings. The action may
also be timed to guarantee optimum security conditions during
the official visit next week of Spanish King Juan Carlos.
I Colombia has a long tradition of student and labor
problems, as well as urban and rural violence. The previous
state of siege, lifted in June, lasted a year.
UK: Monetary Policy
//The British government, in a surprise move,
yesterday boosted the Bank of England's minimum lending rate
by 2 percentage points to a record 15 percent.//
//Chancellor of the Exchequer Healey also in-
structed the Bank of England to call up special deposits from,
commercial banks equivalent to 2 percent of most deposit lia-
bilities, or approximately $1.2 billion. In reaction to the
announcement, the pound rallied somewhat from the day's low
of $1.64, closing at $1.67 in London.//
//These measures were taken to slow the growth
in the money supply and cut inflation. Healey has set a target
of 12 percent for money supply growth for the fiscal year end-
ing next March. As recently as the three-month period ending
in mid-August, the money supply was growing at an annual rate
of 16 percent. A further acceleration reportedly has taken
place since then due to increased bank borrowing by the public
sector.//
//The minimum lending rate has now been hiked 6
percentage points since mid-April. The government had also in-
creased the special deposit requirement by 1 percent in Sep-
tember.//
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//The announcement yesterday was aimed at least
partly at the International Monetary Fund, to which London
has applied for a $3.9-billion loan. By tightening credit, the
British may be able to avoid an IMF demand for further public
spending cuts and subsequent charges from left-wing Laborites
that Healey is permitting "foreign bankers" to dictate inter-
nal British policies. Spending cuts beyond those already
scheduled for the next fiscal year would be extremely un o u-
lar.
ITALY: Economic Stabilization Program
I I Prime Minister Andreotti this week began to seek par-
liamentary support for his economic stabilization program.. The
Communists, whose cooperation in Parliament is essential to the
government's survival, seem inclined to work with the Prime
Minister, but they also are determined to exert as much influ-
ence as possible.
Andreotti has asked Parliament to consider two pro-
posals that form the bare minimum for any effective economic
stabilization effort. To dampen inflationary pressures, he is
requesting that automatic increases in cost-of-living allowances
be reduced for the upper 20 to 25 percent of wage earners and
that there be no further increases in the allowances for the
highest paid workers.
Andreotti also wants to increase prices for many pub-
lic services and government-controlled commodities; some of the
funds raised by hiking public service charges would be used to
help finance a controversial industrial modernization and devel-
opment program, the details of which Andreotti has not yet dis-
closed.
The Communists' inclination to cooperate with Andreotti
is illustrated by the receptivity of the Communist-dominated
unions to Andreotti's proposed limitation on cost-of-living in-
creases. The unions dominated by Andreotti's Christian Democrats
were less receptive because of their larger proportion of highly
paid workers.
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The response of the Communists to Andreotti's planned
price increases, on the other hand, demonstrates the party's
determination to shift economic and fiscal decision-making as
much as possible to Parliament--a development that would enable
the Communists to exert maximum influence on the government's
program.
I I Andreotti initially tried to raise certain prices by
decree, as the government is legally empowered to do. The Com-
munists, however, are holding Andreotti to an earlier pledge to
consult Parliament, and the issue is being considered this week
by two committees, one of which has a Communist chairman.
Communist leaders feel a need to reassure the rank
and file about the party's indirect support for Andreotti. There
are increasing signs that many Communist supporters cannot under-
stand why the party, given its election gains in June, has not
demanded greater power or made more of an effort to get into the
government. The Communist leadership is clearly seeking to dem-
onstrate that it is fully aware of the party's increased weight
and is determined to use it in the best interests of the party.
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JAPAN-CHINA: Peace Treaty
I I Prospects have not improved for the early conclusion
of a Sino-Japanese peace and friendship treaty following the
brief meeting between foreign ministers Chiao Kuan-hua and Kosaka
in New York on Monday. They apparently did not discuss the anti-
hegemony clause--the implicitly anti-Soviet formulation that is
the only remaining obstacle to final agreement.
Japanese Foreign Minister Kosaka confined himself to
expressing hope that the treaty would be concluded at an early
date. His main purpose was to improve the atmosphere in bi-
lateral relations and to establish himself as a friendly nego-
tiating partner. He has publicly described the meeting as a
"prelude to renewing negotiations."
I Chinese Foreign Minister Chiao Kuan-hua reportedly
accepted in principle the desirability of an early agreement,
but he reiterated Peking's hope that Japan would agree to repeat
the hegemony clause contained in the Sino-Japanese communique of
1972 that established diplomatic relations.
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Developing Countries: Oil Price Rise
25X1 A senior Japanese Foreign Ministry official has ex-
pressed the view that neither government is now prepared to
make any "concrete moves" toward the other and that serious
negotiations will not resume, at least until after the Japanese
election that must be held by December.
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Petroleum Exporting Countries--would add $750 million to the net
import bills of the 12 non-OPEC developing country members of
the Conference for International Economic Cooperation.//
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//A decision to increase the price of oil 15 per-
cent--expected at the December meeting of the Organization of
//Nevertheless, they are unlikely to oppose OPEC's
action because of their desire to maintain a unified position
in the North-South dialogue and because they want additional
OPEC aid.//
The impact of the oil price hike on individual coun-
tries would vary widely.
I ITotal import bills for Brazil, India, Pakistan, and
Jamaica would rise by 2.6 percent to 4.1 percent, compared
with a non-OPEC developing country average of 1.3 percent.
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Brazil would add $500 million to its oil import costs at a time
when economic growth is expected to decline and inflationary
pressures are strong. The adverse impact of the oil price rise
on recovery in the developed countries would slow Brazilian ex-
port growth.
For India and Pakistan, the higher oil costs would be
easier to manage because food imports are down as a result of
improved harvests. They had hoped, however, to use money not
spent on food imports for development projects and will seek
additional assistance from OPEC members.
The oil price change would hit Jamaica at a time when
bauxite and alumina exports are recovering. About half of Jamai-
can oil imports are used in the processing of alumina. Antici-
pated export gains, however, would far outweigh the adverse ef-
fects of the oil price increase.
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eir import costs from the price hike alone rise in the range
of 1.1 to 1.4 percent.
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Real economic growth in Yugoslavia and Argentina would
be adversely affected by reduced exports caused by an oil price
rise. While Yugoslavia has the stronger domestic economic posi-
tion, its $2.5-billion trade deficit this year would make the
absorption of oil costs harder. Recovery of copper exports in
Zambia, and of cocoa, coffee, and wood exports in Cameroon would
help absorb higher oil costs without seriously disrupting eco-
nomic expansion.
strong views on the oil price rise.
line in 1977. Zaire, almost self-sufficient in oil, has no
As net oil exporters, Mexico and Egypt would benefit
substantially from any oil price increase. Oil earnings would
rise in Egypt by $90 million and in Mexico by $130 to $190 mil-
lion. Peru expects to become nearly self-sufficient in petroleum
with the completion of the first stage of the Trans-Andean pipe-
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USSR-ANGOLA: Neto Welcomed Warmly
The USSR has given an enthusiastic welcome to visit-
ing Angolan President Agostinho Neto, whose delegation arrived
in Moscow yesterday.
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25X1 I I An impressive array of Soviet officials greeted Neto
at the airport--including President Podgorny, Foreign Minister
Gromyko, and First Deputy Premier Tikhonov, who is probably
filling in for ailing Premier Kosygin. Later in the day General
Secretary Brezhnev hosted a dinner in Neto's honor.
25X1 I It is not surprising that the Soviets would afford
Neto such treatment. The Popular Movement's victory in Angola
was one of Moscow's most important and visible foreign policy
successes in the past few years. It refurbished the Soviets'
revolutionary credentials, enhanced their status among the
radical black African states, and gave them an important win
over their Chinese competitors in Africa.
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The Soviets probably hope to capitalize on this suc-
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cess in expanding their influence in post-war Angola and among
the liberation movements of southern Africa--a hope that prob-
ably in part underlies Moscow's indignation at Western attempts
to resolve the crisis in that region.
This is Neto's first visit to the USSR since the es-
tablishment of his government. The Soviet invitation was issued
last May, when Angolan Prime Minister Nascimento was in Moscow
seeking additional Soviet assistance.
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ing Neto's visit. Angola's current number-one priority is the
development of its economy, and Neto brought with him Angolan
officials responsible for economic affairs.
25X1 In his dinner speech last night, Brezhnev acknowledged
Angola's need to restore its war-shattered economy as soon as
possible and held out the prospect of Soviet assistance. Brezhnev
added that Neto's visit will "serve as a new incentive toward
deepening and broadening Soviet-Angolan relations."
25X1 Soviet military aid will probably also be discussed.
Neto brought a senior military adviser with him, and Soviet
Defense Minister Ustinov attended last night's dinner.
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25X1 I I Brezhnev took advantage of the dinner to refer to the
tensions in southern Africa. He offered the most authoritative
Soviet criticism of those who "are attempting to substitute a
fictitious liberation...for a true one." Neto is one of the
"front-line" black African presidents, and the Soviets may view
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