CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030900010088-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 20, 2016
• Sequence Number: 88
• Content Type: REPORT

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A Eti~F~, Director of Top Secret
National Intelligence Daily
(Cable)
24 November 1978
State Dept. review completed
Top Secret
DIA review(s) completed.
CG NIDC 78-0273C
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USSR-US-CUBA: Impact of MIG-23 . . . . . . . . . . 1
ISRAEL-LEBANON: Situation Report . . . . . . . . . 2
WARSAW PACT: Nuclear Declaration . . . . . . . . . 4
INDONESIA: Devaluation of the Rupiah . . . . . . . 6
BRIEFS . . . . . . . . . . . . . . . . . . . . . . 7
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USSR-US-CUBA: Impact of MIG-23
The USSR is adopting a tough public posture
over the MIG-23 presence in Cuba in an apparent effort
to blame the contretemps on antidetente forces in the
US. Privately, Moscow appears to be trying to convince
the, US that it will try to be responsive to US concerns.
Soviet commentary--both public and private--also indi-
cates that Moscow is aware of the possible impact of the
issue on the Strategic Arms Limitation Talks.
On Wednesday TASS replayed Cuban President
Castro 's strong rejection of US statements of concern
about the MIG-23s and his assertion that the aircraft
were tactical and "purely defensive." Pravda made similar
assertions several days ago and charged that unnamed op-
ponents of detente were trying to create "suspicion and
ill-will" at a time when the SALT talks were entering a
decisive phase.
A Soviet diplomat in Havana took a more concil-
iatory line in a conversation with a US official on
Tuesday. He stated that the problem can be "solved pos-
itively" and added that Moscow was aware of specific US
concerns. He refused, however, to be drawn out on any
specifics of a "solution."
The diplomat's remarks, suggest that he was
speaking on instructions from the highest levels of the
Soviet Politburo, which has probably not decided on a
definitive response to the US. His reference to Politburo
candidate member Ponomarev's recent remarks on creating
the proper conditions for the completion of a SALT
treaty suggests the Soviets are aware of the impact of
the MIG-23 issue in the US.
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ISRAEL-LEBANON: Situation Report
//Israel has apparently increased its
arms aid to Lebanon's Christian militias and is takina
steps to extend its influence all along the Christian--
dominated security belt in southern Lebanon. During the
two months since renewal of the UN mandate in southern
Lebanon, the Israelis have done little to facilitate UN
efforts to extend operations to the areas controlled by
Lebanese Christian militias under Major Haddad, Israel's
{ally. The Israelis instead have continued to encourage
senior UN officials to work directly with Haddad in an
apparent effort to legitimize his presence and autonomy.//
//A source of the US defense attache in
Beirut reports that Israeli materiel has been arriving
in the Christian-controlled port of Juniyah three times
a week since mid-October. This appears to be at least the
second boost in Israeli arms deliveries to the Christian
militias since bitter fighting erupted between them and
the Syrians in June. The Israelis first increased de-
liveries of tanks and artillery in early August--which
allowed the militias to employ heavy equipment for the
first time in the clashes in and around Beirut last
month.//
//According to sources of the attache,
the militias have received some 20 older tanks, several
155-mm howitzers, and an "unusually great amount" of
am-
munition since mid-Oct b
(Israel also appears to
be expanding the training it offers the militias in order
to accommodate the new equipment; Christian personnel
have long been going to Israel for basic training, and
they now are receiving artillery training.//
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/The Israelis appear now to be paying the
militias' salaries in addition to providing supplies and
equipment. There are also indications that the Israelis
are retaining and improving fortified positions they held
before their incursion into southern Lebanon last March.
UN sources report--and the US attache in Beirut observed
in some cases--that the Israelis have moved the border
fence north in several locations to gain control of ad-
vantageous terrain.//
//The Israelis' principal concern, shared
by the government and the public alike, is to preserve
the security of the Lebanese Christian-controlled buffer
along Israel's northern border to ward off Palestinian
guerrilla raids. Israelis generally continue to regard
UN officials as amenable to Arab and Palestinian pressure
and remain skeptical that UN troops would function as ef-
fectively as Haddad's forces.//
//The Israeli Government clearly will not
be inclined to countenance any change in its Lebanese
policies that could expose it to public charges of having
weakened in its support for the Christians--with whom
many Israelis identify emotionally.
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WARSAW PACT: Nuclear Declaration
The Warsaw Pact Political Consultative Commit-
tee, which ended a two-day meeting in Moscow yesterday,
has called for a meeting of the five nuclear powers--
including China--to discuss banning all nuclear weapons
from their arsenals. The Consultative Committee, comprised
of the Communist party leaders of the seven Warsaw Pact
countries, also called for the main military powers to
reduce their defense budgets for the next three years.
Summit participants also suggested in a lengthy
declaration that, in addition to curbing nuclear weapons,
the five nuclear powers should discuss the conversion of
nuclear energy to peaceful uses only. China, the only
Communist state besides the USSR to possess nuclear
weapons, is likely to reject the call as a "scheme" to
increase the Soviets' arms superiority over other coun-
t:ries.
The Warsaw Pact declaration also called for
talks on limiting weapons systems that have thus far not
been covered in East-West arms negotiations. The NATO
allies met this week to discuss so-called gray area
systems--those not under discussion at SALT or the Mutual
and Balanced Force Reduction talks. Although they de-
nounced NATO for wanting to increase military appropria-
tions, the Communist leaders did not threaten to enlarge
the Pact's own arsenal.
The declaration denounced US and Western sup-
port to issidents in Communist countries and branded
any such effort as interference in internal affairs. It
in turn accused the West of violating human rights by
supporting so-called reactionary regimes.
The final document does not contain any crit-
icism of China nor does it repeat recent Soviet com-
plaints about the willingness by some Western states to
Nell arms to China. The avoidance of these issues prob-
ably reflect Romanian President Ceausescu's opposition
at the meeting to any formulation that would be critical
of the Chinese leadership. It is possible that during
the session Ceausescu was attacked for his own ties with
China, particularly in connection with the visit of Chi-
nese party Chairman Hua Kuo-feng to Romania last summer.
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The declaration's failure even to mention the
Vietnamese-Kampuchean hostilities may also be due to
Ceausescu's objection to the inclusion of touchy issues
involving Communist states not represented at the meet-
ing.
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INDONESIA: Devaluation of the Rupiah
The Indonesian Government has bolstered its
security forces because of its concern about possible
violent consumer reaction to price increases following
the 33-percent devaluation of the rupiah Zast week. Thus
far, however, the situation has been calm, and rumors of
widespread disturbances in some major cities have proved
unfounded.
About one-quarter of the retail shops in sev-
Eera arge cities were closed over the weekend, either
because of fear of violence or because merchants had not
completed marking up inventories. Prices in Jakarta have
increased between 30 and 50 percent, but businessmen ex-
pect them to stabilize eventually at a level 25 or 30
percent higher than before the devaluation.
Poorer consumers will for a time escape the
brunt of price boosts because of government controls on
;ome basic necessities, including rice and kerosene.
Government rice stocks are at record high levels, and
rice harvest prospects are good; this should moderate
increases in food prices somewhat.
The government also broke the rupiah's formal
Link to the US dollar and announced a "managed floating
.rrrate." After the last devaluation in 1971, Indonesia's
large oil earnings buoyed the rupiah, but it had lately
become overvalued given the economy's high rate of in-
flation. As a result, nonoil exports became increasingly
uncompetitive, and imported goods displaced locally made
products.
Faced with the likelihood of slow growth in
oil revenues over the next few years, Indonesia must
raise exports of nonoil commodities substantially, es-
pecially manufactures, to finance its ambitious develop-
ment plans. There was no immediate, compelling reason
for a devaluation at this time but--with Indonesia's cur-
rent account in surplus this year and inflation now
under control--government officials apparently felt that
the economy was at its strongest and was best able to
adjust to the temporary disruption of a devaluation.
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//The New Zealand electorate is likely to
give Prime Minister Muldoon's ruling National Party a
vote of confidence over the opposition Labor Party in
tomorrow's national election.//
//Neither party has been able to come up
with an effective plan to combat continuing economic
malaise and the average voter has a "plague-on-both-your-
houses" attitude. These factors may enable the small So-
cial Credit Party to play a spoiler's role. The govern-
ment has 55-seats in the newly enlarged 92-seat parlia-
ment.//
//Muldoon has stood by his decision to al-
low port calls by US nuclear-powered warships--a partic-
ularly sensitive issue in New Zealand politics--although
he has linked the port calls to increased access for New
Zealand beef to the US market. Labor Party leader
howling has reaffirmed Labor's opposition to visits by
US nuclear ships.
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