NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030600010040-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: August 28, 2006
• Sequence Number: 40
• Publication Date: March 23, 1978
• Content Type: REPORT

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CIA-RDP79T00975A030600p6Q4ge c re t
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WTM m-rn*T7T TTTmTaTT_T('_TTT(`T.'' T17TT.V cART.F. 0
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Thursday 23 March 1978 CG NIDC 78/068C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Top Secret
State Dept. review completed
(Security Classification)
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0 AV 'Aff 'Aar Aff 'Aar AWAAW ARr Aff JA
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mnt-innAl Tntelliaence Daily Cable for Thursday, 23 March 1978.
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senior als.
CONTENTS
USSR-AFRICA: Meeting in Moscow
IRAN: Naval Fleet Acquisitions
ALGERIA: Dissident Activity
RHODESIA-BOTSWANA: Refugee Flow
UNITED KINGDOM: Callaghan Visits US
EC: Promoting Economic Growth
FRANCE: No Prime Minister Named Yet
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USSR-AFRICA: Meeting in Moscow
//The Soviets are holding high-level meet-
ings in Moscow with key African Leaders and-senior Soviet ad-
visers in Africa. The Angolan chief of state will want to dis-
cuss the possibility of increased Soviet and Cuban military
assistance in order to deal with continuing insurgencies in
his country. The Soviets will certainty want to hold a general
discussion of ways and means to keep the pot boiling in Rhode-
sia. At this point, the USSR needs to prevent the continued
progress of the internal settlement in Rhodesia and to improve
the chaotic guerrilla operation there.//
Serious economic difficulties plaque regime. Politic
sidence is still a problem, and major economic and social prob-
lems remain unresolved.//
//Neto's major concern is the increased pressure
he is facing from Jonas Savimbi's insurgent forces--the Na-
tional Union for the Total Independence of Angola--which now
operate in over half the country and pose a growing political
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and military threat to the regime. The level of fighting has
increased in recent months, and Angolan and Cuban troops are
sustaining numerous casualties in all parts of the country.//
//Neto will presumably want to discuss additional
Soviet and Cuban military assistance;, including additional Cuban
combat forces. Neto may also convey a request from the South-
West Africa People's Organization for additional Soviet and
Cuban assistance because of the possible impasse in negotia-
tions on Namibia.//
//Chairman Mengistu--after his victor in
the Ogaden--is now focusina on Eritrea- F_
The
USST interest in consolidating its influence in is Ababa
strongly suggests that it will continue to support Mengistu's
plans to break the power of the insurgents before entering
any negotiations with them. An expansion of Soviet involvement
in the Eritrean fighting is likely.//
//Moscow would probably prefer to try to settle
the Eritrean problem peacefully before embarking on an all-out
military campaign. Mengistu, on the other hand, appears deter-
mined to defer any talks with the Eritreans until he regains
military dominance in the province. The Soviets will eventually
go along with Mengistu if they have to and are already portray-
ing the Eritreans as surrogates for Western interests in order
to. justify Soviet support for an anti-insurgency campaign.//
The Soviets will have to grapple with ways and means
to keep the pot boiling in Rhodesia. The Soviets want to pre-
vent progress toward an internal settlement in Rhodesia and to
improve the chaotic guerrilla operations based in Zambia and
Mozambique. The swearing-in of the three black leaders in the
transitional government in Salisbury on Tuesday adds some
urgency to Soviet efforts.
//The Soviets, however, face a number of problems
in trying to formulate a coherent strategy toward the Rhodesian
insurgency. The most important at this point are political
constraints. The frontline presidents, particularly Zambian
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President Kaunda, are hesitant to permit an expanded Soviet
and Cuban presence in southern Africa. Kaunda is under domestic
pressure to abandon his preoccupation with the Rhodesian prob-
lem, and he himself fears Rhodesian military retaliation.//
The Soviets, in turn, may distrust Mozambican Presi-
dent Mac el and the insurgent faction based in Mozambique be-
cause of their willingness to accept aid from China.
The reluctance of the frontline presidents, who are
meeting his weekend in Dar es Salaam, to encourage the Soviets
is preventing a greater Soviet commitment to the insurgents.
Until the frontline presidents and the rival insurgent factions
in the Patriotic Front decide on military strategy and tactics,
the Soviets will be in a weak position to push events along.
If the Soviets push too hard, the Africans will be-
come suspicious. if the Soviets are hesitant, they may miss an
opportunity. For the near term, Moscow will surely watch closely
for new opportunities and be respons' e to any African feelers
for additional military assistance. 25X1
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IRAN: Naval Fleet Acquisitions
I I Iran is negotiating agreements with West Germany
ana the Netherlands for the purchase of six 209-type diesel
submarines and 12 frigates as part of the Shah's continuing
effort to expand Iranian power in the Persian Gulf. These
purchases--probably totaling more than $2 billion--would be
Tehran's largest military orders from non-US sources. The
orders would be a welcome boost to both Dutch and West German
shipyards, which are suffering from Zagging orders and unem-
ployment.
Iran would pay cash for the West German submarines,
which would be delivered over the next four years. Iran cannot
obtain frigates from West Germany before 1983 because they are
still on the drawing board; Dutch frigates would be more readily
available.
Following his recent visit to Iran, the Dutch State
Secretary for Economic Affairs announced that the Iranian Gov-
ernment would soon order eight Kortenaer-class frigates from
the Netherlands and perhaps another four frigates from West
Germany. He was confident that the Dutch cabinet would issue
an export license and that parliament would not oppose the
order.
West Germany's Chairman of the Parliamentary Defense
Committee indicated that his committee did not oppose the pro-
posed sale. West Germany has apparently relaxed further its
1971 decision to sell arms only to NATO countries and now bans
sales only to "areas of tension." Some members of the Social
Democratic Party, however, are critical of the expansion of
arms sales.
//The Shah is attempting to develop a modern navy
to protect Iranian oil routes, particularly in the Strait of
Hormuz and the Arabian Sea. Iran recently received two guided-
missile patrol boats from France and will acquire 10 more by
the end of 1980. It will obtain its first Tang-class submarine
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from the US next year, with two more to follow by 1983; four
Spruance-class dest are also on order from the US for
delivery by 1982.//
ALGERIA: Dissident Activity
//Small groups of Algerian dissidents have
rat ded police posts in both western and eastern Algeria during
the past month. The dissidents are almost certainly supported
by Morocco but seem to pose no serious threat to President
Boumediene, who retains the backing of his own military.//
Morocco may have decided that using the dissidents
to create unrest in Algeria is a relatively safe way to retal-
iate against Boumediene for his support of the Polisario Front,
which is seeking to wrest control of Western Sahara from Morocco
and Mauritania. It is also possible that Moroccan irregulars
are responsible for some of the raids. Algeria probably believes
that Morocco is behind the dissident activity and will retaliate
by increasing support to Moroccan dissidents in Algeria.
Although disillusionment with the meager benefits of
Algerian-style socialism and Boumediene's stewardship is prob-
ably growing, dissident exiles or Moroccan irregulars, if they
are involved, probably cannot capitalize on this discontent.
The dissidents' public links with the Moroccan overnme
weaken their credibility.
Far more crucial to Boumediene's tenure is the atti-
tude of the Algerian military, which would hold the balance of
power in any internal struggle. Boumediene, who serves as his
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own defense minister, has assiduously cultivated close ties
with his senior officers. 25X1
officers probably exist, Boumediene does not now appear to face
a formidable challenge from them.
//Although some small cliques of disgruntled
RHODESIA-BOTSWANA: Refugee Flow
Botswana has experienced a major influx of refugees
from Rhodesia since Rhodesian Prime Minister Smith and black
Leaders inside Rhodesia signed their settlement agreement early
this month. The refugee camps in Botswana have been a Lucrative
recruiting ground for the Rhodesian guerrilla groups, particuZ-
arly Joshua Nkomo's Zimbabwe African People's Union. The trans-
itional government in Rhodesia hopes to induce Large numbers
of guerrillas to Lay down their arms and return to Rhodesia,
but this will be difficult if it cannot stem the flow of po-
tential guerrillas out of the country.
I J According to officials in Botswana, the total number
of o an refugees now exceeds 5,500, up from 3,000 a month
ago. In one 48-hour period, some 500 persons crossed into Bots-
wana
Reasons for the sudden upsurge are unclear. Some of-
ficial s believe that the marked increase shows that there is
no confidence in.the internal settlement, at least on the part
of the Ndebele, who are not represented in the arrangement.
Others think that the increase stems from stepped-up military
operations in western Rhodesia. All the officials concerned
with the refugees agree, however, that the internal settlement
will not help to discourage guerrilla recruitment or to deter
blacks--at least the Ndebele--from leaving Rhodesia.
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Now that the transitional government has been formally
installed in Salisbury, it will probably make an early announce-
ment of an amnesty for guerrillas. The internal settlement will
have to show evidence of its staying power and the fighting
will have to get worse for the guerrillas, however, before any
significant number of them decide to surrender. In the mean-
time, guerrilla leaders will do all they can to prevent de-
fections.
If the refugee flow continues to grow and if it con-
tains significant numbers of potential insurgents, this could
offset whatever number of guerrillas eventually defect. This
would be particularly true if there should be a similar upsurge
in the flow of refugees from eastern Rhodesia into Mozambique.
UNITED KINGDOM: Callaghan Visits US
//British Prime Minister Callaghan's visit to the
US today coincides with a growing British pessimism over stag-
nating world economic conditions. Concern has mounted in recent
weeks that negative international economic trends will undermine
the UK's economic fortunes, which had seemed very bright. Cal-
Zaghan's aim is to urge the Western industrialized nations to
take unified action, which he hopes will help to shore up his
domestic political position as a general election approaches,
possibly Later this year.
//Disappointing economic indicators, suggesting
trends that North Sea oil revenues cannot fully counteract, have
triggered Britain's concerns. Although the indicators have not
pointed to startling shifts, continued economic sluggishness
has dampened hopes that the British economy was about to expand
after years in the doldrums. British leaders are increasingly
worried that the current international economic malaise will
blunt their attempts to control unemployment and inflation and
hinder efforts to increase industrial production.//
//Trade among countries of the Organization for
Economic Cooperation and Development will probably grow this
year by only 4 to 5 percent, thus reducing exports. If the UK's
export performance is weak, it will be unable to realize its
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3.5-percent GNP growth projection without a substantial fiscal
stimulus. Excessive stimulation, however, could overheat the
economy--particularly with a strengthened pound--leading to a
further rise in imports.//
//Labor Party leaders fear that a general economic
slowdown will dampen investment incentives and lead to a new
wave of protectionism. Callaghan believes this would hurt his
country's delicate balance of trade and its already eroded in-
ternational competitiveness more than it would most other West-
ern countries.//
//Callaghan argues that only a coordinated effort
by Western leaders to encourage higher growth rates can reverse
current trends. He advocates acting in the near future to sta-
bilize the dollar and other currencies, to promote long-term
capital flows and investment, to increase trade, and to develop
an effective Western energy policy. He hopes that prompt action
will help to salvage his government's largely successful anti-
inflationary program.//
//Callaghan's trip to the US follows his talks,last
week wi West German Chancellor Schmidt. The two leaders were
trying to reach common positions before the EC summits next
month and again in July and the summit of industrialized
countries later that month in Bonn. Callaghan apparently did
not attempt to press Schmidt into doing more to stimulate the
West German economy, and he seems anxious to mediate strains
between Washington and Bonn.//
//Conservative leaders have been skeptical of the
motives for Callaghan's economic summitry. Some Tory members of
Parliament argue that Callaghan is concerned about Western
economic stability because the outcome of the next election
will be largely determined by economic conditions--particularly
the level of unemployment and inflation. The government's in-
ability to show improvement could, in fact, damage the Labor
Party's chances at the polls.//
//Many Laborites in Parliament believe that refla-
tionary clauses in the new budget--which will be presented next
month--will help the government in the short run, especially if
these include promised tax cuts. Such relief could be temporary--
particularly if the stimulus package begins to heat up the econ-
omy--and may lead to a worsening balance of trade and accelerated
unemployment and inflation.//
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will probably be unable to put it off beyond this fall.
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//Callaghan will try to time the general election
EC: Promoting Economic Growth
I //The EC Council met in Brussels earlier this
week to consider a program to boost international economic
confidence. The program, which was prepared by the EC Commis-
sion, calls for the kind of unified action that British Prime
Minister CaZZaghan is advocating. The Commission hopes that a
common EC position on promoting economic growth will foster
fruitful discussions between the Europeans and the US, Canada,
and Japan at the summit of industrialized countries this sum-
mer in Bonn. A unified EC position would clearly give CaZZaghan
a greater chance of achieving his goals. It may even be indis-
pensable./1
//Reactions by the EC ministers to the Commission's
proposals for a strategy of concerted economic expansion were
generally favorable, but no decisions were taken on specifics.
Not surprisingly, the West Germans were the most reserved on
making commitments to growth targets and a timetable for de-
cisions. Economics Minister Lambsdorff said Bonn still needs
at least until May to assess the impact of its own national
measures, and he called the Commission's target of 4.5 percent
for EC economic growth for the year beginning in July "opti-
mistic."//
//The Commission forecasts that the Community's
grow rate this year will be only 2.8 to 3 percent unless
there is further action. The Commission is trying a different
approach than just once again reaffirming an overall growth
it is calling for an examination of the performance of
t
t
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arge
the member countries in order to establish how each country
can contribute to a concerted growth plan.//
//The Commission's program also parallels Calla-
ghan's y linking expansion to trade liberalization, aid to
developing countries, and energy conservation. The Commission's
strategy unlike Callaghan's would also seek to foster growth
through encouraging effective industrial sectors and phasing
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out noncompetitive ones. The British have, in fact, been re-
luctant to give the EC authority over British problem indus-
tries.//
//At the meeting in Brussels, the British called
tor a common EC strategy as a prelude to broader discussions.
West German "inhibitions on growth" and American "inhibitions
on the dollar," Chancellor of the Exchequer Healey said, should
be broken, but not by a piecemeal approach like the recent US-
German agreement on the dollar. Healey said that the fluctuations
between the currencies in and outside of the EC "snake" were a
minor problem compared to those of the dollar.//
//The Commission doubtless believes that its new
strategy has started as well as might be expected--given West
Germany's continued reservations. It may hope that West German
Chancellor Schmidt will have a stronger interest in the success
of the EC and Western summits than on previous occasions, be-
cause he will be chairman both of the Community's July summit
and the session in Bonn.//
//Callaghan will probably tell the US that the
community
operate"
is
on
trying to do its part, but that the US must "co-
the dollar, inflation, and energy before there is
much hoe
of
budging the West Germans.
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FRANCE: No Prime Minister Named Yet
French President Giscard announced Last night that
he OTTZ. egin "extensive consultations" today with Labor,
business, and political Leaders on the most important problems
the nation faces. He said he will name a new prime minister
after completing the talks.
Earlier in the day, a spokesman for the President
said the Barre government would remain in a caretaker capacity
at least until 3 April when the new Assembly opens its spring
session. There is no deadline for forming the. new government
and it is not required to win confirmation of the Assembly.
Giscard congratulated the voters on their choice in
the election but added that he also feels a responsibility to
meet the needs of those who voted for the Left. He said the
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new government will focus on solving important economic and
social problems--especially on ensuring a regular increase in
purchasing power for the lowest paid--and on decreasing
France's political polarization.
Giscard said he expects all of his new majority to
support 'boldly and ardently" his programs, an oblique refer-
ence to Gaullist party leader Chirac's refusal fully to accept
presidential leadership. Giscard also called for "sensible
coexistence" with the Left and asked its leaders to overcome
traditional obstacles to helping the government meet the
people's needs.
The President noted that it is too soon to move to
the center-left coalition he desires, and promised not to try
to entice individual leftist deputies into his camp. Giscard
left open, however, the possibility of showing his desire to
broaden his political base by co-opting some of the Left's
programs and appointing to the new government persons who
"symbolize an opening up" of the political spectrum.
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