NATIONAL INTELLIGENCE DAILY (CABLE)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031200020001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: April 1, 2004
• Sequence Number: 1
• Publication Date: March 2, 1979
• Content Type: REPORT

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Intelligence
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National Intelligence Daily
(Cable)
Ton Secret
State Dept. review completed 25X1
Top Secret
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National Intelligence Daily (Cable)
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Situation Reports
China-Vietnam-USSR . . . . . . . . . . . . . .
.
. 1
Alert Memorandum
Iran . . . . . . . . . . . . . . . . . . . . .
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. 4
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Briefs and Comments
USSR-Iran: Soviet Position . . . . . . . . .
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. 7
USSR: Oil Export Problems. . . . . . . . . .
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. 8
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Chad: Military Situation . . . . . . . . . .
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. 10
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Morocco - Saudi Arabia: Hassan's Visit . . .
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Rhodesia: Smith's Intentions . . . . . . . .
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. 11
Special Analysis
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China: Youth Protests . . . . . . . . . . . .
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. 12
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China has formalized its offer, made earlier through
the media, to negotiate its differences with Vietnam. In
a note from the Chinese Foreign Ministry to the Vietnamese
Embassy in Beijing, China reiterated its call for "peace
talks" and suggested the two sides dispatch representa-
tives at the deputy foreign minister level to hold talks
"as soon as possible" at a mutually agreed upon location.
The Chinese note implies the negotiations would be re-
stricted to border problems. Vietnam has not yet re-
sponded to the proposal but almost certainly will reject
it; Hanoi has consistently refused to negotiate so long
as Chinese soldiers remain on Vietnamese soil. In the
event of a rejection, China will undoubtedly portray
Vietnam as the intransigent party.
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Like the speeches of the Soviet leaders who preceded
him, Premier Kosygin's election speech yesterday provided
no clues as to how Moscow will respond to the Chinese in-
vasion of Vietnam. Kosygin's remarks were notable for:
-- His statement that Vietnam would not be
abandoned in its "time of trial."
Criticism of unnamed international forces
who take "an equal approach" to China's
invasion of Vietnam and events in Kam-
puchea.
The attack on "imperialist forces in the West
and the Far East" for encouraging "the Chi-
nese leadership's aggressive course" and
trying to make states renounce their efforts
to curb the arms race.
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-- His reaffirmation of Soviet interest in
expanded trade and economic ties with the
US.
-- His conclusion that despite recent
developments, the trend toward relaxation
of tension remains "a leading one in in-
Kosygin said, however, that in view of escalation
by the "militaristic aggressive forces" in the world, it
is necessary to maintain and strengthen the Soviet de-
25X1 fense potential.
In stating that the "changes in Kampuchea are ir-
reversible," Kosygin implied that Moscow will continue
to resist efforts for a negotiated settlement of the
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The government of Prime Minister Bazargan is not in
effective control of Iran, despite some progress in re-
storing economic activity. His government has not suc-
ceeded in restoring law and order, is beset by political
divisions in its own ranks, is troubled by nascent au-
tonomy movements in Kordestan and Azarbaijan and is facing
a severe challenge from heavily armed and committed left-
ists. Bazargan's ability to cope with these problems is
limited by the collapse of the military and security
forces and the eroding loyalty of the revolution's para-
military forces, the Mujahadin. Bazargan's problems may
be increased now that Ayatollah Khomeini has left Tehran
for Qom and has removed himself from the day-to - dacon-
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We believe there is a good possibility that the
Bazargan government may not survive the combined pres-
sures posed by internal friction and a sustained chal-
lenge from the left. Even if Bazargan is able to remain
in office, he probably will have to continue to make far-
reaching concessions to the left in order to retain power.
There is also the possibility that the Prime Minister may
be overthrown by more radical members in or outside of
his own government, and there is potential for civil war
if he decides to challenge the left militarily..
Given the likelihood of prolonged instability in
Iran, there is little prospect that the Bazargan govern-
ment will be able or willing to develop effective coop-
eration with the US. The government will be preoccupied
with its own survival and maintaining the country's na-
tional cohesion; its reliability as an oil exporter will
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While the Soviets have maintained a cautious and
conciliatory line toward Bazargan in most respects thus
far, clandestine radio has tacitly supported his leftist
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opponents on one key issue--their insistence that they
be allowed to retain the arms which enable them to force
concessions from him. Moscow is likely to increase co-
vert efforts to broaden its contacts among the leftist
factions while gradually becoming more open in support
for Tudeh's claim to a role in the new power alignment.
Should the situation degenerate into open civil war, the
Soviets are likely to funnel covert support to those ele-
ments that then appear most favorable to their interests,
while professing nonintervention and continuing to warn
r- I
the US against intervention.
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USSR-IRAN: Soviet Position
Soviet leaders have been notably quiet about Iran,
and a Soviet Foreign Ministry official told a US Embassy
officer this week that the situation there is unclear.
The Soviets are undoubtedly concerned about Ayatollah
Khomeini's anti-Communist orientation, however, and prob-
ably hope to strengthen those forces--especially'the
Tudeh (Communist) Party--they would prefer to see in
power.
The Soviet official indicated that the revolution
would not be stopped, although it might slow down r-
take a conservative turn because the left is weak.
The Soviet media coverage of the government of Prime
Minister Bazargan, while reminiscent of the cautious
line toward the Shah before his fall, has been both more
positive and more extensive. The Tudeh Party and the
Soviet-supported clandestine radio, the "National Voice
of Iran," which had consistently attacked the Shah, have
expressed support for Khomeini.
The Soviets, however, treat Khomeini's victory as
only the "first stage" in the revolution. While this
line can be defended as supporting the Bazargan govern-
ment, we believe it indicates the Soviets are hoping to
see movement toward a leftist regime. The "National Voice"
is calling on the revolutionary forces to retain their
arms despite the Bazargan government's efforts to disarm
the population. The "National Voice" argues that this
is necessary to guard the revolution against the threat
of imperialists and counterrevolutionaries.
The "National Voice" has also expressed support for
the Mujahadin, the terrorist group that defends Khomeini's
interests. We have no evidence of any open Soviet con-
tacts with either the Mujahadin or the Chariks, the left-
ist terrorist group. While both groups have probably re-
ceived assistance from Soviet-supported third parties,
the Soviets have generally avoided providing direct sup-
port to such extremist groups. It seems unlikely that
the Soviets would support any direct challenge to Kho-
meini and risk alienating him completely.
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USSR: Oil Export Problems
Recent severe weather in the USSR has boosted oil
consumption and slowed oil production. It has also Zed
to oil transport difficulties, especially in rail move-
ments. Another problem is the four-month cut-off in
.Tranian gas deliveries, which has forced Moscow to sub-
stitute oil for gas in the Transcaucasus region, causing
tb
cu
acks in oil deliveries to the West. The prospect is
F
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or a decline in total oil exports throughout 1979.
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CHAD: Military Situation
Forces loyal to President Malloum are abandoning
most of central and eastern Chad to rebel armies and
followers of Prime Minister Habre, a former rebel leader.
Units of the Chadian Army appear to be withdrawing south
to a line extending roughly from Am Timan to Mongo to
Ndjamena. Habre's army controls many of the towns in the
center of the country, including Oum Hadjer and part of
Ndjamena. Rebels led by Goukouni, the most influential
of the Muslim rebel chieftains, appear to have substanti-
ally strengthened their position and now control Mao
and Arada and most of the territory north. Goukouni's
forces and rebels allied with them also control most of
the Lake Chad region. By pulling back to the south,
Malloum undoubtedly hopes to retain administrative con-
trol over the most populous and wealthiest part of the
country where he also has his primary base of tribal
support. Goukouni, on the other hand, is taking ad-
vantage of the situation to strengthen his bargaining
position in the peace negotiations scheduled to take
place next week in Nigeria.
King Hassan is to visit Saudi Arabia next Monday,
according to the Saudi Ambassador in Rabat. Hassan may
request Saudi assistance in reopening direct Moroccan-
Algerian talks on Western Sahara. French efforts to
facilitate such contacts last month apparently were un-
successful. The war is going badly for Morocco, and
Hassan needs a political settlement. He will also dis-
cuss regional developments with the Saudis and request
renewed Saudi financial support. Saudi aid, other than
that tied to specific projects, has been generally
blocked for more than a year largely because of Moroccan
unwillingness to accept effective monitoring of its end
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Rhodesia: Smith's Intentions
//Prime Minister Smith's public statement last week 25X1
that he intends to run for Parliament in the national
election in April may be a ploy to gain bar aining lever- 25X1
age with the West, particularly the US.
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virtually no hope for a negotiated settlement.//
nationalists will point to it as further proof there is
Smith apparently eci e ear y i
year that he would offer to reverse this decision in
exchange for Western promises to lift sanctions or some
form of Western recognition for the government of na-
tional unity set to assume power in May. Most senior
Rhodesian officials reportedly were surprised by Smith's
announcement and believe it was a political mistake.
They apparently had hoped he would take advantage of
the heavy vote of confidence the proposed constitution
received in the white referendum on 30 January and an-
nounce his plans to retire from politics. Such a move
would have strengthened prospects for the internal settle-
ment. Smith's announcement will encourage the whites to
support the internal settlement, but external black 25X1
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CHINA: Youth Protests
Chinese leaders seem to recognize that, in the long
term, the success or failure of their drive to modernize
the nation depends in part on how effectively they can
harness rising public expectations. In recent months, the
leadership has been fairly tolerant of peaceful demonstra-
tions by young people impatient for the improved living
conditions they associate with modernization. The disrup-
tive protests by urban youth in Shanghai early last month,
however, prompted swift but measured action to restore
order and to prevent similar outbreaks elsewhere.
In early February, youth who had been resettled in
rural areas in lieu of college or factory employment took
advantage of liberal leave and travel policies during the
Lunar New Year celebration to return to Shanghai and pro-
test the refusal of local leaders to approve their perm-
anent transfer back to the city. Students blocked rail
service, damaged streetcars, tied up traffic, and
rounded the municipal offices.
The central authorities responded swiftly. Public
security officials warned the protesters to cease and
after a series of meetings and the receipt of a hastily
telephoned directive from Beijing, the disruptions ended.
According to the city's radio service, only two of the
protesters were detained.
The Shanghai protests, while the most violent, are
not the first involving disgruntled resettled students.
Protests by the students--unhappy about their educational
or urban job prospects--have occurred throughout the
history of the "down-to-the-countryside" program. Modi-
fications of the program announced at a national con-
ference last fall heightened expectations that real im-
provements were just around the corner and led the stu-
dents and urban youth to demand immediate improvement
in their living condition and transfers home. Beijing
had tried to avoid the impression that changes would come
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swiftly; the conference held that, while it was possible
to "modify the policy and improve methods," the end of
the program and the solution of related problems could
come only after modernization, that is, slowly.
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The most successful and widely publicized protest
came in late December when a group of 28 students from
the border areas of Yunnan went to Beijing and demanded
a meeting with top officials. Although Premier Hua
Guofeng and Vice Premier Deng Xiaoping apparently did
not meet with the group, Vice Premier Wang Zhen, who once
had responsibility for the resettlement program, and
the Minister of Civil Affairs did. They sharply rebuked
the students for leaving their workposts and warned that
such behavior could seriously damage China's moderniza-
tion effort.
The Shanghai protests, and similar disturbances
in Hangzhou and Nanchang, reflect potential contradic-
tions in China's overall drive toward modernization. The
relaxation of restrictions on the public airing of griev-
ances last fall was aimed largely at generating popular
enthusiasm for modernization. The regime's open commit-
ment to change and, more specifically, to the improvement
of living conditions already appears to be resulting in
rapidly rising levels of expectation and a de ree of pro-
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How successful Beijing is in balancing popular ex-
pectations against realistic goals will be an important
factor determining the long-term success or failure of
its modernization effort. Beijing's response to the re-
cent protests, in fact, suggests a deep awareness of the
long-term implications of such unrest.
The leadership has taken strict action only against
a small number of instigators. More important, it has
not attempted to sweep the recent disturbances under the
rug. Instead, it has widely publicized the Shanghai
protests as a means of forcefully restating its basic
policy that "socialist democracy" is necessary but that
it cannot be permitted to disrupt the modernization ef-
fort. The leaders have begun to drive home the sobering
point that improved conditions, both political and so-
cial, depend on how successful the drive is to boost pro-
duction and modernize China.
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