NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030300010056-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 16, 2016
• Document Release Date: May 12, 2005
• Sequence Number: 56
• Publication Date: September 13, 1977
• Content Type: REPORT

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Tuesday 13 September 1977 CG NIDC -77-213C
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National Intelligence Daily Cable for Tuesday, 13 September 1977
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e NID Cable is tor e purpose o intorming
senior o icials.
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TURKEY: Economic Package Announced
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TURKEY: Economic Package Announced
The economic stabilization measures announced by
Turkey last week will do ZittZe to alleviate the country's
critical foreign-exchange shortage, balance the budget, or
fight inflation. The DemireZ government will have to adopt ad-
ditional measures to gain an International Monetary Fund Zoan
and restore the confidence of international lenders. Without
foreign funds, Turkey's industrial production will be curtailed
and unemployment will worsen.
The most significant feature of the new package in-
volves increases in prices of goods and services produced by
state-owned economic enterprises. Prices of regular gasoline,
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which had been subsidized, were raised 96 percent, and fuel
oil prices were raised 62 percent. Prices of paper, cement,
iron and steel products and electricity were increased between
25 and 70 percent; telephone and postal rates were more than
doubled. Without these rate hikes, state companies would have
lost an estimated $2.5 billion in 1977.
The program will not lead to a balanced budget as
the government asserts. While gasoline and fuel oil price hikes
should discourage oil imports, Turkey's current-account deficit
will still not be much below $2.5 billion this year. The higher
prices will aggravate inflation, currently running 25 percent
annually. Government measures to control inflation--an increase
in banks' reserve requirements and a one-year limit on consumer
credit--will have little impact.
The raft of measures designed to improve the balance
o L paymen s, including minor concessions to exporters, disin-
centives for automobile imports, a five-year exchange rate
guarantee on worker remittances, a renewed promise to sell off
wheat stocks, and a surcharge on import guarantees, probably
will have a small positive effect.
I I Turkey did not announce a substantial currency de-
valuation or a credible commitment to end recurrent budget def-
icits, moves considered important by banking circles and the
IMF. Prime Minister Demirel reportedly recognizes the importance
of these measures, but apparently has bowed to the views of
Deputy Prime Minister Erbakan in the interest of preserving his
coalition.
I I Erbakan, who controls most of the important economic
po icymaking posts, is firmly committed to industrialization
and loath to adopt any policies that would threaten the high
growth rates that have become Turkey's norm. He apparently con-
siders the IMF suggestion for a sharp devaluation an infringe-
ment of Turkish sovereignty.
I International bankers have made it clear that any new
loans are contingent upon an agreement between Turkey and the
IMF. Ankara owes an estimated $700 to $800 million for imports
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and $300 million in overdrafts on foreign banks. Foreign-ex-
change deposits totaling $385 million will come due for re-
demption or renewal by the end of the year; Ankara has been
having trouble meeting demands for redemption of such deposits
for several months.
Turkish officials have referred repeatedly in recent
weeks to a US "economic embargo," implying that the US Govern-
ment was responsible for the refusal of US banks to extend new
loans and for the withdrawal of some foreign-exchange deposits
by the banks from Turkey. Turkish proponents of this theory 25X1
have retreated somewhat in the face of strong denials by US
officials, but the shadow of the charges remains.
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Valentin Turchin, one of the few
i
prom
nent dissidents
remaining in Moscow, told Western reporters yesterday that he
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had received permission to emigrate to Israel and would leave
the USSR with his family within a month. He plans eventually
to move to the US and to teach at Columbia University.
Turchin was one of the founders of the illegal Moscow
branch of Amnesty International. Although he was never formally
a member of the dissident Soviet group set up to monitor Mos-
cow's compliance with the Helsinki accords, he attended its
meetings and was active as an intermediary between the group
and Westerners in Moscow. Since the arrest earlier this year
of the monitoring group's leadership--including Yury Orlov,
Anatoly Shcharansky, and Aleksandr Ginzburg--Turchin had been
acting as the main spokesman and interpreter into English for
this and various other dissident groups.
terday he thinks it is a "great pity" that Turchin is leaving.
the Moscow dissident community of one of its major contacts
with Westerners. Leading dissident Andrey Sakharov said yes-
I has not been publicly accused by the Soviet
media o criminal activity or other misdeeds as have the ar-
rested dissidents. His emigration is thus an easy way to divest
Paraguay:
interests.
believed that such a denial would be contrary to Paraguayan
Paraguay has decided to allow the Inter-American Hu-
man Rights Commission to visit the country after almost a year-
long delay. The decision reflects the government's desire to
avert a confrontation with the US. In July, Paraguay withdrew
two loan applications before the International. Development Bank
after being advised the US would veto such loans until a visit
by the commission was approved. Uruguay and Brazil exerted
strong pressure on President Stroessner to deny the human
rights group permission to visit, but Stroessner apparently
I IZambian President Kaunda's announcement Sunday that
is country could not be host for the organization of African
Unity extraordinary summit on Western Sahara next month is a
setback for Algeria, which has been trying to keep alive its
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dispute with Morocco and Mauritania in the OAU and the UN. Mo-
rocco and Mauritania, however, will continue their efforts to
scuttle the meeting altogether and to block further discussion
of the Sahara problem at the UN this fall.
Kaunda cited the current situation with Rhodesia as
the reason for his action. He was undoubtedly also influenced
by uncertainty over who would pay the considerable cost of the
summit. OAU President Bongo has initiated a search for another
host for the summit, but he is unlikely to be able to hold the
meeting as scheduled because of the short a e of time and lack
of interest among many OAU member states .
Nepal:
//King Birendra named a former Premier, Kirti
Nidhi Bista, to form a new government yesterday following the
unexplained resignation last Friday of former Prime Minister
Tulsi Giri. Five of eight cabinet ministers under Giri, in-
cluding the former foreign minister, have been recalled to
serve in the new government.//
//Bista, who served as prime minister from 1969
to 1970 and again from 1971 to 1973, has no political following
of his own and owes his appointment exclusively to the King,
who dominates Nepalese politics. Bista's early pro-Chinese and
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anti-Indian sentiments have reportedly moderated in recent
years. The new Prime Minister is considered an experienced and 25X1
competent, though far from brilliant, administrator who prefers
delegating res onsbilit to making hard political decisions
President Pinochet, reflecting a familiar tough deter-
mination, announced Sunday that the state of siege in effect
since 1973 will continue. The overall tone of his address on
the fourth anniversary of the overthrow of the Allende regime
was mildly upbeat, as he cited some economic gains and politi-
cal initiatives.
Pinochet said Chile will not modify the route it has
mapped, out in order to gain the "good graces" of certain coun-
tries. He did acknowledge a slow but progressive improvement in
the attitude of the US toward "Chilean reality."
After Pinochet's announcement in July of a phased re-
turn to limited popular elections by 1985, administration spokes-
men apparently had some second thoughts about a timetable; they
subsequently emphasized they intended to keep the process tightly
in hand and criticized "impatient" Chileans. Thus, although 25X1
Pinochet's announcement is no real surprise, it will disappoint
the many observers who had hoped he would follow up on pled es
of a return to constitutional rule by easing restrictions. II
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