NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029400010022-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: May 9, 2006
• Sequence Number: 22
• Publication Date: October 14, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday October 14, 1976 CI NIDC 76-241C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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State Dept. review completed
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(Security Classification) 25X1
Top Secret
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National Intelligence Daily Cable for Thursday October 14, 19 76 . 25X1
The NID Cable is for t he purpose of informing
senior US officials.
CONTENTS
CHINA: Arrests of Leftists
LEBANON: Situation Report
THAILAND: Planning Political Reform
Page 1
Page 4
Page 6
PANAMA: Torrijos' Anniversary
CANADA: Defense Minister Quits
JAMAICA: Alcoa Agreement
CUBA: Economic Prospects
NORWAY-USSR: Discuss 200-Mile Limit
Page 10
Page 11
Page 12
Page 14
Page 15
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CHINA: Arrests of Leftists
There has still been no public announcement of the
elevation of Hua Kuo-feng to posts formerly held by Mao Tse-
tung or of the arrests of leading members of the leftist fac-
tion in Peking.
1Private confirmation of Hua's change in status
which was made to Western newsmen Tuesday evening by Chinese
officials, presumably followed formal action by the plenum on
the Politburo's recommendation.
T+- is oss ib le that no public statement will be made
p
on the fate of the discredited leftists even after the meeting
in Peking ends; party leaders may wish the charges against them
to circulate internally, preferring that the bill of particulars
leak out only after some time has passed.
The confidence with which leaders from Hua on down are
however--and the undisguised glee and relief evidenced by
acting
,
many officials at lower levels--suggests that the dominant group
in Peking believes that it has a convincing case against the
leftist faction and that the leaderless but still significant
minority of leftist followers in the capital and the provinces
will not react to the arrests with uncontrollable violence. The
lack of official comment on the arrests does not seem to mean
that significant pressure for their release exists; communist
propaganda outlets in Hong Kong have removed from sale photographs
in which they appear.
So far as can be ascertained, the country is calm.
is no evidence thus far of special troop alerts in Peking
or in the provinces--including the sensitive Manchurian area,
which has been a hotbed of radical sentiment in the past year,
and Shanghai, from which three of the quartet of leftist leaders
hail. Regular troops apparently have been used to occupy Tsinghua
and Peking universities, centers of leftist agitation that have
been closely associated with leftist leaders Chiang Ching and
Yao Wen-yuan.
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The lack of strong reaction to the exercise of pre-
emptive power by dominant leaders in Peking follows patterns set
earlier in this decade. The left did not visibly resist a wide-
spread purge of its ranks in 19 70 , when the tide first turned
against the "radical" excesses of the Cultural Revolution. Even
more significantly, there was no overt reaction from the mili-
tary--which certainly had a strong hand to play--following the
fall of former defense minister Lin Piao in 1971.
The pattern of trouble in the provinces suggests that
it occurs when there has been some sort of indication from Peking
that agitation is permissible. There is now no one in Peking
giving that signal.
I I In the absence of any official announcements, rumors
continue to circulate in Peking regarding the number of persons
arrested late last week. The US Liaison Office reports that the
account now receiving most credence places the number at greater
than 50. In addition to a number of high officials in the min-
istries of education and culture who were closely associated
with Chiang Ching, there have been persistent reports that Po-
litburo member Wang Tung-hsing has also been arrested. Although
there is no direct confirmation of this story, it is plausible.
Most accounts of the past several days claim that Hua
own personal bodyguard, rather than the normal Peking
security force, which has been under Wang's direction, to make
the arrests.
I I In the month following Mao's death great propaganda
attention was devoted to the security unit, stressing its close
relationship to the deceased Chairman; the implication conveyed
was that the unit was "loyal" to Mao and all he stood for. This
treatment tended to link Wang to the leftist "defenders" of Mao-
ist principles. Although not as clearly identified with the
leftist cause as Chiang Ching, Yao Wen-yuan, Chang Chun-chiao,
and Wang Hung-wen, Wang has long been suspected of leftist sym-
pathies.
If Wang has been arrested along with the four
rominent
p
leftists, there are presently only 10 remaining full members of
the Politburo out of 21 elected at the 10th Party Congress in
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1973; of these, left-leaning Li Te-sheng, commander of the Shen-
yang Military Region, may also be in trouble and another member
is bed-ridden and wholly inactive. There is thus ample reason
for the Central Committee plenum to replenish this leading policy-
making organ. With the left-right political deadlock now broken,
this should prove less troublesome than previously.
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In any event, the record of dissension evident in the
public media during the month following Mao's death makes it
virtually certain that the leading leftists were somehow in-
triguing and "conspiring"--either to retain the shreds of power
they still possessed or to turn the tables on their "rightist"
enemies with the help of Wang Tung-hsing's Peking security unit.
The current Peking rumors suggest that in addition to "forging
Mao's will" the leftists attempted the latter course, forcing
Hua Kuo-feng's hand. But it is equally possible that important
military leaders, impatient with continued leftist intransigence
and agitation, urged Hua to make a pre-emptive move.
In either case, it is clear that when Hua acted he
had strong military support--in particular from Defense Minister
Yeh Chien-ying, from Su Yu, a leading member of the important
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military affairs commission, and perhaps above all from Chen Hsi-
lien, the commander of the Peking Military Region, who in a mes-
sage immediately following Mao's death pledged to defend the
capital against all vicissitudes, including intrigues against
the constituted central authorities. This military support
strengthens Hua's hand during the immediate crisis, but it also
makes him more dependent on the military over the lon er term.
LEBANON: Situation Report
The Syrian advance west and south of Jazzin continued
yesterday. Artillery barrages and ground movements in the moun-
tains east of Beirut indicate that another offensive may be de-
veloping there.
Syrian forces have taken Rum and are apparently con-
tinuing slowly toward Sidon, using tanks under cover of an ar-
tillery barrage. Sidon has been heavily shelled; the Syrians
are probably planning to cut the city off from its sources of
supply rather than take it outright, a move that would prove
costly.
The Syrian drive south of Jazzin toward Nabatiyah
has apparently reached Saydun. Other Syrian forces are moving
along the road toward Marj Uyun but have not yet reached Aramta,
which is defended by a contingent of Iraqi-dominated fedayeen.
It is not clear how far south the Syrians intend to
go. They are narrowing the gap between their positions and the
Israeli border but presumably remain wary of triggering an Is-
raeli reaction.
The situation in Beirut is tense. The Christian radio
claims 1,500 Iraqis have arrived in Lebanon, many of them sta-
tioned in Beirut's hotel district. The US embassy believes the
charge may be a Christian pretext for an operation to retake
the hotel district, where the embassy is located.
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Syria has announced that it will attend the Arab sum-
mit conference scheduled for October 1.8. Its delegation will
be headed by Foreign Minister Khaddam, not President Asad.--a
move presumably designed to undercut the summit's effectiveness
without appearing obviously obstructive.
Arab governments have not reacted to Palestine Liber-
ation organization chief Arafat's appeal earlier this week for
an emergency meeting of the Arab League foreign ministers--an
indication that there is little eagerness in Arab circles to
put pressure on Syria.
The Israeli government probably welcomes the new Syr-
ian offensive as a further blow to Palestinian-leftist pros-
pects in Lebanon and as an aid to Israel's efforts to eliminate
Palestinian commando units from southern Lebanon.
To this end, Israeli military authorities continue
to provide Christian forces near the Israel-Lebanon border with
tactical guidance and limited military aid, including small
arms, ammunition, and defensive training for villagers. The Is-
raelis are likely to step up this assistance, short of rein-
forcing the Christians with their own troops, should Palestinian
units put up stiffer resistance.
Israeli artillery units located along the border re-
porte y shelled Palestinian strongholds around Marj Uyun last
weekend in support of Christian attacks against these positions.
Several weeks ago, the Israelis apparently provided similar
artillery support for Christian forces fighting Palestinian
units in the southern Lebanese village of Ayn Ibil.
Israeli troops have for some time conducted patrols
along principal Palestinian access routes on both sides of the
border; some press reports claim night patrols are now sent as
far north as the Litani River.[
The border patrols enable the 25X1
Israelis to give southern Christian villages advance warning
of impending Palestinian attacks. The Israelis reportedly have
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also provided a number of these villages with direct telephone
links so that the villages can call Israeli military units near
the border for emergency assistance, such as artillery support.
THAILAND: Planning Political Reform
I uIn a speech yesterday, Thai Prime Minister Thanin
ruled out an early return to Western-style democracy. Thanin
outlined a prolonged period of political reform that would
gradually restore democratic processes in four stages over a
16-year period.
The first four-year stage would be a period of
national reconstruction" in which an appointed unicameral
legislature would ensure political stability. During the second
four years, the legislature would be broadened into two houses
with equal powers--an appointed upper house and an elected
lower house.
The third stage, according to Thanin, would involve
the ceve opment of the democratic system," and the last stage
might see a return to a unicameral legislative--this time fully
elected.
The appointed legislature--which the military leaders
hope to have in place by the end of the month--undoubtedly will
be little more than a rubber stamp for the decisions of a
strong executive. It is not clear how much latitude will be
permitted the civilian cabinet that the military earlier
promised to set up.
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PANAMA: Torrijos' Anniversary
//The relatively bland observance on October 11
of the 1968 coup that brought strongman Omar Torrijos to
power is another indication that the government in Panama is
on the defensive.//
//The gathering of about 20,000 people--many of
whom were government employees officially encouraged to at-
tend--was far below official targets. Torrijos' appearance
was greeted with apathy and the mood of the crowd, like the
tenor of the speeches, was generally uninspired. The largest
cheer came when Torrijos announced that the following day
would be a holiday.//
//Torrijos acknowledged that the economic situa-
tion is difficult, but offered few specific solutions. He
enumerated urban ills such as increased unemployment, the ris-
ing cost of living, and poor transportation. In promising an
emergency public works program, he admitted that an unemploy-
ment survey had yet to be started, suggesting that much re-
mains to be done before an effective program can get under
way.//
//The General indicated he was considering two
steps which, if implemented, would add to discontent. Asking
for sacrifice, he said that new tax measures must be enacted
and that some articles of the labor code which are hurting
business must be changed. Labor unions would be particularly
disturbed if the labor code is revised in ways that reduce
their prerogatives.//
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//Torrijos' swipes at the US were perfunctory.
He did not set any deadlines in the canal negotiations nor re-
peat past Panamanian demands for an end to the US presence be-
fore the year 2000. He even noted that rash actions could cost
Panama support in the hemisphere.
CANADA: Defense Minister Quits
//Canadian Defense Minister James Richardson re-
signed yesterday because of differences with Prime Minister
Trudeau's program to promote bilingualism. Richardson's move
reflects increasing resentment among English-speaking Cana-
dians toward the bilingual program.//
//Trudeau is also under heavy attack for his wage
and price controls, seen by labor and business alike as major
causes of high unemployment and the sluggish economy. The Cana-
dian Labor Council has called a nationwide work stoppage to-
day to protest wage controls. There had been only lukewarm
support for the stoppage until recently, but indications of a
sudden surge of support among Quebec labor unions--usually the
most militant--point to a heavy response.//
//The legislative program presented at the open-
ing of Par iament on Tuesday suggests Trudeau is trying to
temper the more unpopular aspects of the government's bilin-
gual and economic controls program.//
//The government said it will place "high prior-
ity" on fostering understanding between English and French
Canadians, emphasizing language training and cultural ex--
changes for youth.//
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//There was no mention of Trudeau's statements
last year about the need for a continuation beyond 1978 of the
wage and price controls and on the failure of the free market
system. To promote the close cooperation with the private sec-
tor the government will launch a "major series of consulta-
tions" throughout Canada. It will ask provincial governments
to agree to early talks on the renewal of anti-inflation
agreements and on guidelines for eventual easing of wage and
price controls.//
//The failure to mention the thorny question of
constitutional amendments affecting the role of the provinces
suggests Trudeau is uncertain about his next move on this is-
sue.
JAMAICA: Alcoa Agreement
Settlement of Jamaica's two-year contract dispute
with Alcoa earlier this week brings the country's bauxite and
alumina operations under closer government control.
Under the agreement, Jamaica will:
--Purchase a 6-percent share--worth about $10 million--
in Jamalco, a new joint company that will operate Alcoa's
Jamaican bauxite and aluminum properties.
--Buy all of Alcoa's mining and non-operating lands,
worth about $2.5 million.
--Settle disputes through private international arbitra-
tion.
--Jamaica agreed to reduce its bauxite production tax to
7.5 percent from the current 8 percent, effective for
eight years and retroactive to January 1, 1976.
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--Jamalco obtained guaranteed mining leases to cover its
bauxite requirements for the next 40 years.
--Alcoa agreed to drop its case with the International
Center for the Settlement of Investment Disputes.
Jamaica's equity and land purchases are to be made
at book value. The terms require a 10-percent down payment,
with the remainder spread over nine years at 7 to 8.5 percent
interest. The equity purchase in Alcoa's combined bauxite and
alumina operations is equivalent in value to the 51-percent
share of the company's bauxite holdings that the government
originally had been demanding. The accord stipulates that the
government can expand Jamalco's alumina capacity, thereby en-
abling it to increase its equity participation.
The agreement will become effective after legisla-
tive approval and after Alcoa's Clarendon alumina refinery is
restored to full operation. The 550,000-ton-capacity refinery
was damaged by an explosion in July and is not expected to be
completely repaired until late 1977.
The agreement also brings Jamaica closer to a final
settlement with the Kaiser and Reynolds aluminum companies.
Final accords are expected by the end of this year, and prob-
ably will be similar to the settlement with Alcoa.
The government's willingness to reduce the bauxite
tax reflects a desire to encourage the companies to increase
their Jamaican investments. The companies, however, are un-
likely to expand their Jamaican operations, which now account
for nearly two fifths of US bauxite and alumina supplies.
They are disturbed by past tax boosts, which have
o e the cost of imported. bauxite to the US to over $20 per
ton, and by mounting civil unrest to which they see no end.
The companies are diversifying their supply sources by invest-
ing in Australia, Brazil, and Indonesia.
The agreement will slightly reduce government reve-
nue in the near term, but this should not be a problem next
year. World aluminum demand is rising rapidly, resulting in
higher government revenues from bauxite sales. Jamaican baux-
ite revenues in 1977 are expected to lump b v as much as two
thirds to $220 million.
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CUBA: Economic Prospects
//After four years of sustained growth, the Cuban
economy now is suffering from persistent drought and a sharp
drop in world sugar prices.//
I I Cuba's three-year drought has been particularly se-
vere in t e three eastern provinces that account for the bulk
of agricultural production. Sugar output dropped last year,
and declines in rice and coffee production have forced cuts in
per capita rations. A reduction in raw material imports from
the West has slowed expansion in manufacturing.
//Despite increased purchases from Communist coun-
tries, o a imports will fall below last year's level. Cuba's
foreign trade deficit will increase an estimated 25 percent
from last year to some $500 million.//
//The collapse of sugar prices has sharply reduced
Cuba's hard-currency earnings, forcing greater reliance on So-
viet economic assistance. Moscow presently charges Cuba only
about half the world market price for oil and has agreed to pay
30.4 cents per pound for Cuban sugar through 19 80 , well above
the current world market price of 9.0 cents. Direct Soviet
balance-of-payments aid also will increase.//
//At the same time, Cuba has cut its Eurocurrency
borrowing and has drawn sparingly on some $2 billion in Western
trade credits. Cuba apparently chose this course because bleak
prospects for sugar prices would make repayment difficult.//
//This year's slowdown has ended four years of
sustained economic growth, the longest such period since Castro
seized power in 1959. The 3-percent average annual gain re-
flected rising investment, which was facilitated by Soviet fi-
nancial and technical assistance and, after 1973, by high world
sugar prices and increased Western trade credits. The economy
also benefited from more systematic planning and budgeting
procedures, introduced under Soviet prodding.//
The Castro government has not measurably reduced Cu-
an epen ence on exports of sugar or on imports of foodstuffs
and industrial materials. Nickel production has not increased,
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and highly publicized investments in cattle and citrus have
failed to pay off because of feed shortages and persistent
drought.
Cuba remains dependent on imports for petroleum, for
most capital goods, for nearly one third of its foodstuffs, and
for a large share of manufacturing inputs.
//The current setback will force some downward re-
vision of Cuba's first five-year plan (1976 to 1980), which was
based on world sugar prices of 15 to 20 cents a pound. The
plan's basic strategy, however, will remain unchanged. This
calls for continued growth in sugar production as well as an
effort to diversify agriculture to replace foodstuffs now being
imported. Investment in industry will continue to receive high
priority, at the expense of social outlays.//
//Economic growth will be slow at best, because
the drought has already damaged the 19 76-19 77 sugar crop. Dim
prospects for a major increase in world sugar prices will keep
imports from the West low. Cuba, however, can replace most es-
sential Western goods with imports from Communist countries.
Castro's temporary moratorium on new projects using Western
financing and capital goods will eliminate several potentially
productive activities.//
//Although the government is cutting back sharply
on hard-currency spending by diplomatic missions, it is unlikely
to reduce its small economic assistance programs to developing
nations in Africa, Asia, and the Caribbean. Havana could afford
major interventions such as in Angola only if they were paid
for by the USSR.//I
NORWAY-USSR: Discuss 200-Mile Limit
I INorway and the USSR began talks this week on adjusting
their reciprocal fishing agreements in the light of Norwegian
plans for a 200-mile economic zone. The talks will be complicated
by a dispute over demarcation of the Barents Sea and continuing
friction over Norway's Svalbard archipelago.
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The Soviets have conducted missile firings into the
Barents Sea on three occasions in the past 12 months, temporar-
ily closing a portion of the area in dispute between the two
countries. This area lies between a Norwegian-proposed median
line boundary and a sector line claimed by the Soviets.
Twice last summer the Norwegians sent a research ship
to conduct seismic tests in the disputed zone, apparently to
determine its oil potential. The two governments have exchanged
protests over each other's activities in the area.
Norway was prepared to compromise at the last round of
demarcation line talks in June, but the Soviets insisted that
Oslo accept the sector line, which would allow the Soviets to
exert economic control over the entire 155,000 square kilometers
in contention. Although the Norwegians had hoped to settle the
Barents Sea dispute before declaring their 200-mile economic
zone next year, they rejected out-of-hand the USSR's uncompro-
mising position. The Norwegians still plan to declare a 200-mile
limit on January 1 if Parliament approves the enabling legisla-
tion.
A new dispute over Svalbard also appears to be brewing
as a result of Moscow's stationing of five large helicopters at
the Soviet administrative headquarters at Barentsburg. Each
helicopter is capable of transporting 30 men to any part of the
archipelago on short notice. The Norwegians contend that the
Soviets should have sought permission to station the new heli-
copters there.
Although 40 nations share equal economic exploitation
rights on Svalbard under a 1920 treaty, only Norway and the
Soviet Union currently conduct commercial mining operations
there. The USSR has consistently tried to evade Norwegian efforts
to assert administrative control over the Soviet settlement on
the archipelago.
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