NATIONAL INTELLIGENCE BULLETIN

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday 3 November 1977
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CG NIDC 77/255C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
ammms
State Dept. review completed Top Secret
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National Intelligence Daily Cable for Thursday, 3 November 1977.
The NID Cable is for the purpose o informing
senior US officials.
CONTENTS
FRANCE-SENEGAL: Troop Buildup
CUBA: Nonaligned Summit Site
USSR: Grain Harvest and Imports
USSR: Soviets Threaten Trials
OPEC: Price Increase Maneuvering
SOUTH AFRICA: Sanctions Issue
BRIEFS:
South Africa - Zambia
Ecuador
Argentina
West Germany
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FRANCE-SENEGAL: Troop Buildup
//France sent additional troops to its military
garrison in Senegal on Tuesday, apparently in response to the
kidnaping last week of two French technicians in neighboring
Mauritania by Western Sahara insurgents of the Polisario Front.
The French apparently have made some progress in their diplo-
matic efforts with the Algerians to secure the release of the
hostages, and there is no indication the French will soon at-
tempt a military rescue. The French probably intend the troop
move to demonstrate their resolve to protect other French na-
tionals. Paris probably also hopes the military demonstration
will put pressure on the guerrillas and their Algerian support-
ers to release the French citizens.//
//The Defense Ministry announcement of the troop
move did not disclose the number of troops involved, but French
press reports indicate that several DC-8 transport aircraft
carried the troops to Dakar. Each DC-8 could carry as many as
130 lightly armed combat troops. The troops almost certainly
belong to one of France's highly trained airborne units. They
will be added to the roughly 1,000 military personnel normally
stationed in Senegal.//
//US Embassy officials in Nouakchott believe
the French already have at least 150 military personnel in
Mauritania, most of them in an advisory role, but the French
may have slightly increased their contingent there since May.//
French diplomatic efforts, perhaps bolstered by
their troop movements, apparently have begun to bear fruit.
During the course of yesterday's debate on the Polisario guer-
rillas in the UN General Assembly, the French representative
made reference to positive steps being taken by the Algerian
government.
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//If the French should decide they have no other
choice, they could swiftly move a commando team to airfields
in Mauritania or possibly, with Morocco's permission, to El
Aaiun in Western Sahara. At this time, however, the French prob-
ably do not know the exact location of the hostages and would
prefer to avoid the risks of attempting a military rescue.//
CUBA: Nonaligned Summit Site
//The Cuban Government has played host to
a number of African leaders in recent weeks. These visits have
apparently focused on current developments in the Horn of Af-
rica and southern Africa and have been used by Cuba to try to
demonstrate that its involvement in Africa continues to attract
wide backing. The Cubans have also indicated their concern
about attempts to move the nonaligned summit meeting in 1979
away from Havana and have taken pains to rally African support.//
Communiques issued after the visits to Cuba of the
Ethiopian, Ghanaian, and Zambian foreign ministers indicated
that the Cubans have succeeded in winning the support of those
governments for maintaining Havana as the summit site. The
Castro government undoubtedly will continue to seek help from
other nonaligned countries as well.
In addition to inviting likely allies to Havana, Cuban
emissaries probably will travel to less sympathetic nations in
an attempt to assuage their concerns. Cuba is also likely to
launch a propaganda campaign defending its presence in Angola
as necessary because of the threat posed by South African as-
sistance to the antiregime guerrilla forces.
A change in venue for the nonaligned summit would be
a dramatic setback for President Castro. The basic thrust of
his foreign policy in recent years has been to achieve a leader-
ship role for himself and for Cuba in the nonaligned movement.
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In a likely effort to undercut criticism that he is
too closely aligned with the USSR, Castro recently canceled
plans to attend the Moscow celebrations of the 60th anniversary
of the Bolshevik revolution. His brother Raul is heading the
Cuban delegation.
USSR: Grain Harvest and Imports
oviet grain output this year--194 million tons,
announced by President Brezhnev yesterday--seems adequate,
along with estimated imports, to cover the USSR's total grain
requirements. The USSR probably has concluded its grain pur-
chases for the year.
We believe that this year the Soviets have contracted
for the delivery of 20 million to 25 million tons of grain, in-
cluding about 15 million tons from the US. An estimated 18 mil-
lion to 20 million tons has been slated for delivery between
July 1977 and June 1978--including the bulk of this year's pur-
chases plus a small amount bought last year--and will be used
to cover shortfalls in the current crop.
Imports scheduled for delivery, added to the grain
harvest, give a total supply of about 213 million tons available
for domestic use and export to client states. This would cover
total Soviet requirements, roughly calculated at 205 million to
210 million tons--and possibly provide a small cushion. //A mem-
ber of the Soviet delegation to the current session of the Inter-
national Wheat Council meeting in London told a US Government
official that the Soviets bought grain this year for both cur-
rent use and stockbuilding.//
t is doubtful that the Soviets will make large new
purchases this year. They already have a head start on next
year's buying, having a possible 5 million tons slated for de-
livery in the last half of 1978. It seems likely that the So-
viets, being shrewd traders, would not have admitted to a 194-
million-ton crop before they had fully covered their needs.
//Until Brezhnev's announcement yesterday, we had
been estimating this year's Soviet grain output at 215 million
tons. Further information that we will be receiving in the next
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few weeks will allow us to make a better judgment of the accurac~25X1
of Brezhnev's figure. In previous years, however, the official
Soviet announcements of grain output have been basically accu-
rate.//
USSR: Soviets Threaten Trials
The Soviets are apparently again attempting to use
the prospect of trials of prominent human rights dissidents,
especially AnatoZiy Shcharanskiy, to dampen the public US stand
on human rights. Several recent developments that suggest this
may be designed to reinforce other propaganda and diplomatic
pressure to induce the US to desist from what Moscow regards as
confrontational tactics at the follow-up Conference on Security
and Cooperation in Europe now under way in Belgrade.
Shcharanskiy has been publicly accused of espionage
and treason, and lesser charges have been unofficially levied
against his colleagues, Aleksandr Ginzburg and Yuriy Orlov,
although no formal indictments have yet been made public. The
arrests of the three men early this year seriously weakened
the dissident group set up by Orlov in May 1976 to monitor So-
viet compliance with the Helsinki accords, but other members
of the group are reportedly now planning to revitalize its ac-
tivities.
In a toughly worded English-language article last Fri-
day, TASS repeated the many charges against Shcharanskiy that
the Soviets have developed since his arrest on 15 March. Noting
support for Shcharanskiy in the West, TASS attacked his charac-
ter, stating flatly that "this traitor to the motherland will
be punished with all the strictness of Soviet law." The article
stopped short, however, of indicating that treason would be the
formal charge.
On the same day, the editor-in-chief of the Soviet
weekly Literary Gazette, Aleksandr Chakovskiy, said during a
French television roundtable in Paris that Shcharanskiy would
be put on trial. Chakovskiy cited the Soviet Ministry of In-
ternal Affairs as the source of his prediction but dodged ques-
tions about the charge and other details.
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Chakovskiy said any trial would be an open one, sug-
gesting that a charge less than treason might ultimately be
levied against Shcharanskiy, as treason trials usually are
closed to the public. Literary Gazette has been Moscow's major
mouthpiece in anti-dissident propaganda.
Ginzburg's wife, meanwhile, has been told by officials
in Moscow to obtain a Soviet lawyer for her husband. This could
mean that the investigatory phase of Ginzburg's case is over and
an indictment is near.
If the Soviets intend to follow the letter of their
criminal procedure statutes in these cases, the dissidents will
have to be formally indicted within nine months of their arrests,
or be freed--at least temporarily. This means that indictments of
Ginzburg and Orlov, who were arrested in February, could come
this month, and of Shcharanskiy by the end of the year. Since
the cases could be continued by the courts, the timing of any
actual trials remains uncertain.
The Soviets, though taking a tough public posture, are
probably still weighing the benefits of any trials against the
costs to Soviet-US relations and have left most of their options
open while assessing bilateral diplomatic representations on
this issue. Most dissident sources refuse to speculate on the
fate of their arrested colleagues, but some of them evidently
continue to believe that one or more of the accused, whether
tried or not, may ultimately be expelled from the USSR.
There have, in fact, been rumors in Moscow that a
scheme involving forced exile for some imprisoned dissidents
may be forthcoming, possibly as part of an expected amnesty
keyed to the observations of the 60th anniversary of the Bol-
shevik revolution on 7 November. Dissident spokesman Andrey
Sakharov has already publicly called on the regime to include
political prisoners in any amnesty. An amnesty declared on the
50th anniversary excluded such prisoners.
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OPEC: Price Increase Maneuvering
V/Members of the Organization of Petroleum
=porvZng countries are engaged in public and private
ing on oil price policy as they prepare for the
ministerial meeting in Venezuela. No country is
mit itself to a position that makes last-minute
more difficult. The members are in a
and anxious to avoid a split such as
Qatar. At this point, agreement on a
percent effective on 1 January seems
crease at midyear possible.//
20 December
willing to com-
concessions
compromising mood, however,
occurred Last December in
price increase of 5 to 10
probable, and a further in-
Saudi Arabia will be far more reluctant
twit was last year to expend the political capital that
would be needed in any price confrontation with the remainder
of the cartel, unless it is backed by Iran. The Saudis are in
fact in a weaker position than they were earlier this year when
they failed to enforce a 5-percent increase in the face of a
collective decision by 11 other OPEC members to raise prices
by 10 ercen
//The Shah has not yet set Iran's position on
extent by how he assesses Saudi leverage in the oil market. In
mid-1977, Iran believed that a "soft" oil market and expanding
Saudi oil productive capacity would give Saudi Arabia more in-
fluence next year than it had in first half of this year. Since
that time, Iranian oil sales have risen substantially, and the
Shah could easily be convinced that the market is sufficiently
strong to merit an oil price increase of some 10 percent.//
an oil price increase. His decision will be determined to some
//Most other OPEC members will probably opt for a
price increase. Representatives of Venezuela, Iraq, Libya, and
Algeria have mentioned that price increases ranging from 8 per-
cent to 15 percent are justifiable because of inflation, the
decline of the US dollar, and the market's ability to absorb
higher prices.//
//Most cartel members also argue that higher oil
prices are necessary to force conservation in the consuming
countries. Several countries, including Saudi Arabia, believe
that the US has not done enough to limit growth in oil demand
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and that this is a major factor behind pressure for higher
prices. Cartel members maintain that a price increase now might
avoid much sharper, and more economically damaging, hikes over
the next two or three years.// -
/World oil production trends are likely to support
a price increase. OPEC oil exports are likely to rise in the
fourth quarter because of rising market requirements for the
winter and increased oil company liftings in anticipation of an
OPEC oil price hike at the end of the year. Oil production in
Iran, Kuwait, and Venezuela increased from July to September as
Saudi output declined following the midyear OPEC price com-
promise.//
//The recent Saudi decision to reimpose a produc-
tion ceiling of 8.5 million barrels per day on the Arabian-
American Oil Company will enable other OPEC members to increase
their market shares. Firming demand for non-Saudi OPEC oil will
give these members an added incentive for higher prices.
SOUTH AFRICA: Sanctions Issue
South Africa has reacted to growing antiapartheid
pressures from the West by suggesting that its constructive
rote in the Rhodesian and Namibian settlement negotiations
could be jeopardized.
Foreign Minister Botha said in a television interview--
after the US announced it would support a mandatory arms embargo
against South Africa--that it was going to be more difficult as
a result of that decision to achieve solutions in Rhodesia and
Namibia. In another interview, Botha hinted that the mutual
trust built up so far during the negotiations could be broken.
A progovernment newspaper editorialized that a UN Security
Council finding that South Africa was a threat to peace could
"end further peace talks on southern Africa."
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More likely, Vorster will use the sanctions issue as
justification for hard bargaining tactics in continuing diplo-
matic efforts to bring about negotiated settlements in Rhodesia
and Namibia. Hardline statements may eventually make it polit-
ically difficult for Vorster to be identified publicly with any
compromise settlement.
South African and Zambian troops clashed yesterday
at Sesheke, on the Caprivi Strip border between Namibia and
Zambia, according to official spokesmen from both capitals.
Lusaka claimed that the South Africans attacked the
town shortly before noon yesterday, with combat continuing un-
til late in the afternoon. Zambia also claimed that a South
African aircraft was downed during the action. Pretoria coun-
tered that the heavy fighting was initiated by the Zambians
and denied that South African aircraft participated.
Over a year ago, South African troops attacked a
guerrilla camp maintained by the South-West Africa People's
Organization at Sesheke. Zambia protested the incident at the
UN, claimin that the South Africans had attacked a Zambian
town
The conciliatory approach of the Ecuadorean Govern-
ment in recent days appears to have reduced the threat to pub-
lic order stemming from reactions to the 18 October sugar mill
clash outside Guayaquil. With the marked decrease in violent
demonstrations, the chances for a prospective coup attempt by
Supreme Council member Luis Duran--who hoped to capitalize on
the recent civil unrest--also appear further diminished.
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In the past few days, President Poveda and Government
Minister Jarrin have attempted to mollify striking sugar workers
and human rights representatives protesting the incident, in
which a large number of workers lost their lives during a con-
frontation with police. As evidence of its good faith, the gov-
ernment has offered to release one prominent student protest
organizer and speed legal proceedings against detained union
leaders.
Some labor observers believe the government is pre-
pared to make significant concessions to the sugar mill work-
ers in exchange for an end to their strike.
Argentina
The Argentine Government has apparently granted some
wage increases in an attempt to suppress the worst labor prob-
lems since the military takeover in March 1976. Railroad work-
ers, who have engaged in sporadic work stoppages in the past
week, are returning to their jobs following a pay increase and
a government threat of sanctions.
Military and security forces yesterday took control
of the strike-bound subway in Buenos Aires. Pilots on the na-
tional airline are threatening to resign unless their demands
for wage increases are met. In addition, the government-run
National Bank was closed yesterday by striking bank workers.
Outside the capital, water and power workers are on strike in
Rosario.
Wage increases in any sector of the economy will
probably create pressures for wage increases from other sec-
tors.
West Germany's current-account surplus amounted to
only about $200 million during the first three quarters of
this year, down sharply from the $1.6 billion surplus recorded
during the corresponding period of 1976. We now expect the
full-year 1977 surplus to be substantially below the 1976
level of $3.4 billion.
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The unexpectedly large deterioration in the current
account resulted from a more than $2.3 billion increase in the
services deficit and a $600 million boost in the unilateral
transfer deficit. The trade surplus, on the other hand, rose
by $1.5 billion.
Increased travel expenditures and a sharp rise in
the profits distributed by West German companies to foreign
stockholders were mainly responsible for the larger deficit on
services. The increase in dividend payments reflects generally
higher business earnings and the impact of corporate tax reform.
The boost in the unilateral transfer deficit was almost entirely
attributable to the appreciation of the mark against the US 25X1
dollar. 25X1
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