WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A011400220001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 20, 2016
• Document Release Date: March 29, 2007
• Sequence Number: 1
• Publication Date: November 19, 1976
• Content Type: SUMMARY

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Secret
Weekly Summary
Secret
CI WS 76-047
No. 0047 / 76
November 19, 1976
Copy N2 16
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CONTENTS
I Europe
United Kingdom; Italy; West
Germany; France;
USSR-Yugoslavia
4 Middle Eas
Lebanon Western
Sahara; Iraq- uwait
6 Africa
Rhodesia;
Zaire-USSR
8 Western Hemisphere
Jrazl I;
ama ca
10 Asia
China-USSR;
Japan-Korea-US
11 Israel: The Impact of the Lebanese Crisis
14 New Soviet Efforts in the Middle East
16 Jordan: The King's Problems
19 USSR: Five-Year Plan
Comments and queries on the contents of this
publication are welcome. They may be
directe
Summar
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UNITED KINGDOM /._
Discussions are under way between the
British government and representatives of
the International Monetary Fund on
terms for a $3.9-billion credit.
Prime Minister Callaghan could accept
moderately stringent economic policy re-
quirements but, given its thin parliamen-
tary majority and the possibility of a
revolt of the left, the government would be
unable to accept or to enact harsh
economic policy guidelines without risk-
ing a confidence vote.
Prime Minister Callaghan would
probably accept:
? Controls on monetary growth and
domestic credit expansion.
? Gradual cutbacks in public sector
borrowing over the next three fiscal
years.
? Reduction of public spending as a
percentage of gross domestic product.
The Labor government has succeeded
up to now in persuading the unions to ex-
ercise restraint in wage contract demands,
but relations are becoming strained in the
face of high unemployment, declining real
wages, high prices, and skyrocketing in-
terest rates. Callaghan believes that harsh
terms for a loan from the Fund might be
the last straw and could upset the alliance
with the unions.
The unions' cooperation has been a
major factor in reducing inflation, cur-
tailing strikes, and initiating steps toward
halting some of the more extreme ex-
amples of featherbedding in British in-
dustry.
Labor's precarious majority in the
House of Commons is also being sorely
tested by the opposition parties in the
Commons and by the Conservative-
dominated House of Lords. Thus far, the
opposition in Commons has succeeded in
gutting one bill, while Labor has gained
passage of another by the narrowest of
margins. Three more bills must be passed
before the deadline on November 23, the
end of the current legislative session.
Tougher tests for Labor will come next
spring-home rule for Scotland, the
budget debate, and the vote that follows.
The budget is
austerity measures as a result of con-
ditions attached to the prospective loan by
the Fund. If Callaghan can work out
terms acceptable to both the government
and the unions, he will have a good chance
of remaining in office through next spring
and, with luck, perhaps even into 1978.
ITALY ' , ~,
Prime Minister Andreotti last week got
parliamentary approval of some key
austerity measures. On the critical ques-
tion of how to limit cost-of-living wage in-
creases, he avoided a showdown by referr-
ing it to industrial and trade union leaders
for solution.
A favorable vote on Andreotti's
package was never in much doubt; the
major nongovernment parties, including
the Communists, had signaled their inten-
tion to abstain. Parliament approved in-
creased taxes and public service tariffs
that had already been decreed, as well as
new measures requiring self-employed
workers and businesses to pay 75 percent
of their income taxes in advance. These
and other measures should bring in about
$6 billion in added revenue.
Andreotti thus has parliament2&Xalnc-
tion for his effort to reduce the
government's deficit-one of the two
main factors behind the country's persis-
tent inflation. In extensive discussions
with labor and management before the
debate, however, he was unable to work
out an agreed plan of attack on the equal-
ly important problem of wages.
Italian pay scales are tied by law to
cost-of-living indices, and in the last three
years wages have actually risen more
steeply than prices. Some labor leaders,
including Communists, have indicated
that they might consider modifications in
the wage structure, but they are reluctant
to tamper with the so-called "escalator"
mechanism itself-the more so as most
workers regard the "escalator" as
sacrosanct.
Faced with labor's resistance and
knowing that the Communists could bring
down his government, Andreotti tossed
the wage issue to industry and the unions.
He told them to come back in a month
with an agreed set of proposals. If they do
not, he added, the government would try
to attack the question through a cumber-
some system of fiscal transfers and 2f.X1
creased taxes, which the unions would
prefer to avoid.
Andreotti's challenge provides the
Communists with an opportunity to use
their considerable influence with labor to
work out an effective wage-restraint
program and thus gain a large share of the
credit should the austerity measures
succeed. The Communists, however, also
risk alienating rank-and-file unionists,
which could further contribute to dissen-
sion within the party. If they do agree to
hold down wages, the Communists are
sure to demand compensation in the form
of political or economic concessions they
can tout as evidence of their influence.
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WEST GERMANY
US efforts to limit the spread of nuclear
fuel enrichment facilities and reprocessing
plants have provoked suspicion in West
Germany and are likely to meet con-
siderable resistance. West German in-
dustry spokesmen assert that the US
proposals are aimed at restricting enrich-
ment activity to the US and the USSR.
Government officials in Bonn probably
consider this an overstatement, but they
place a high priority on protecting the
long-term interests of their nuclear in-
dustry. The West Germans fear that their
reactor sales would suffer if an inter-
national agreement were to prevent them
from offering a complete nuclear fuel cy-
cle.
The West Germans argue that the
safeguards embodied in major German
sales agreements last July with Brazil and
Iran adequately address legitimate con-
cerns about nuclear weapons prolifera-
tion; they cite the Brazilian agreement as
a model for the sale of nuclear technology
in cases where the purchasing country has
not signed the Nuclear Non-Proliferation
Treaty.
The government views nuclear power as
West Germany's major advanced
technology industry. Over the past 20
years, the government has invested about
$6.5 billion in nuclear research and
development.
Its desire to develop a nuclear power in-
dustry of global significance is linked to
the question of jobs. Government projec-
tions show that higher than normal un-
employment may persist in Germany
through the early 1980s.I
The official policy on foreign nuclear
sales has been a generally laissez-faire
one. The government ostensibly requires
an agreement guaranteeing the peaceful
use of nuclear materials before approving
export licenses. In fact, however, the
government has allowed industry free rein
in overseas sales. It has even facilitated
contacts by including key businessmen on
official visits to various capitals.
In the future, the government may be
forced to tighten up somewhat its
procedures for nuclear sales, but it is un-
likely to agree to any controls that will
seriously threaten the potential of any key
growth industry.
FRANCE 16
The French National Assembly last
week approved increased outlays for
defense, adopting a 1977 defense budget
of 60 billion francs-about $12 billion at
current exchange rates. This is a 20-per-
cent increase over the 1976 budget; the
real increase is about 11 percent after in-
flation is taken into account.
Operating costs have accounted for a
growing portion of the defense budget
over the past two years; this year, they
will absorb about 59 percent. A major
cause is the pay raise ordered to alleviate
morale problems in the military. Rising
personnel costs will make it difficult for
France to meet its long-term goal of
reducing the percentage of the defense
budget devoted to operating costs.
The Assembly approved the budget
after Defense Minister Bourges an-
nounced that 1.3 billion francs for
procurement of new equipment for the
conventional forces had been added to the
58.4 billion franc budget originally
proposed. Opponents had criticized the
earlier budget for putting, too much
emphasis on paying off last year's debts
and not enough on future defense needs.
The 1.3 billion francs will allow the a~5X1
force to purchase more Mirage F-1 air-
craft, the army to buy French AMX-30
tanks, and the navy to complete construc-
tion of a support ship.
The nuclear programs did not receive as
large a share of the budget as they have in
the past, but they retained their favored
status, with emphasis on improving the
quality of existing forces. Bourges told the
Assembly that work will continue on the
navy's M-4 submarine-launched ballistic
missile and the S-3 intermediate range
ballistic missile. He also said that by
1980, the S-3 will replace the 18 older S-2
missiles. The S-3 is designed to carry a
one-megaton warhead to a range of 3,900
kilometers (2,100 nautical miles).
In addition, the current French
nuclear-powered ballistic-missile sub-
marine program apparently will be
limited to five instead of six. submarines.
The fourth probably will enter service
next year, and construction on the fifth
already is under way. France's sixth
nuclear submarine evidently will form the
first of a new class of attack submarines.
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USSR-YUGOSLAVIA !v , J ,
The communique issued after General
Secretary Brezhnev's official visit to
Yugoslavia this week shows signs of hard
bargaining, but the Tito regime is no
doubt pleased with the results.
To Yugoslavia, the key element in the
text is Brezhnev's reaffirmation of Soviet
promises made in 1955, 1956, and 1971 to
respect the Yugoslavs' "separate road to
socialism." The renewed promises by
Brezhnev will probably receive wide atten-
tion in the Yugoslav media. The Tito
regime needs them to build popular con-
fidence in the future.
The communique described the at-
Tito and Brezhnev meeting early this year
mosphere surrounding the talks as one of
"cordiality, mutual understanding, and
mutual respect." The word "trust" that
Tito permitted in the communique after
his meeting with Brezhnev in Kiev three
years ago was missing. The omission
seems to reflect Yugoslav
wariness-revived in 1974 by a resurgence
of pro-Soviet subversion-of the USSR's
intentions toward Yugoslavia.
Another basic element in the
document-reportedly sought by the
Soviets-is a mutual pledge to end
polemics over differences between the two
countries. The argumentative Yugoslavs
may find it difficult to abide long by the
letter of this agreement.
The Soviets are undoubtedly pleased
that the Tito regime agreed to expand
party-government contacts and coopera-
tion. Yugoslavia, however, managed to
insert the word "voluntary" into a state-
ment on the standards for cooperation in
the communist movement as a hedge
against imposition of Soviet views of dis-
cipline in foreign affairs.
The communique did not directly refer
to military relations, but its broad phras-
ing on bilateral cooperation suggests
the topic may have been discussed. We
have no information as to whether
Brezhnev requested increased naval
access to Yugoslav ports.
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LEBANON 1
Syrian units of the Arab peacekeeping
force moved unopposed into Beirut on
November 15, taking up preassigned
positions on both sides of the confronta-
tion line in the port and commercial dis-
tricts. Similar units have begun moving
into the Shuf region southeast of the city,
and north from the capital to take control
of the Christian radio station at Amshit
and to open the road to Tripoli. About
7,000 Syrian troops have been committed
to securing the Beirut area.
The Syrians have set up checkpoints on
the approaches to Beirut in an effort to
keep weapons out of the city and have
begun arresting looters. Their main objec-
tives appear to be control of the main
roads, port facilities, and airstrips. Beirut
international airport is scheduled to
resume operations on November 19.
A few thousand additional Syrian
troops have apparently crossed into
Lebanon in the past week to reinforce
security units in the Shuf area and on the
outskirts of Sidon. The peacekeeping
forces are expected to enter Sidon and
Tripoli by Lebanon's Independence Day,
November 22.
Although the deployment of these
forces has gone smoothly, Lebanese com-
mander al-Haj and his staff fear there
may be a resurgence of Palestinian-
inspired subversion and terrorism in
Beirut and elsewhere in Lebanon. Presi-
dent Sarkis reportedly has already ap-
pointed tribunals for Beirut, Sidon,
Tripoli, and Zahlah to try cases of
political sabotage.
Palestine Liberation Organization
chairman Yasir Arafat met this week with
Lebanese leftist leader Kamal Jumblatt to
discuss the provisions of the cease-fire
agreement and relations with Syria.
Arafat apparently is trying to arrange a
rapprochement between Jumblatt and the
Syrians. Jumblatt seems willing, but the
Syrians, who are attempting to undercut
Jumblatt, are likely to turn aside Arafat's
overtures.
Unrepentent Fatah hard-liner Salah
Khalaf, meanwhile, has charged that the
"conspiracy" against the Palestinian
resistance is continuing. He insists that
the fedayeen are entitled under the Cairo
accords to continue their operations
against Israel and to bear arms in
southern Lebanon.
The Palestinians reportedly have
moved large quantities of small arms. ar-
tillery, and ammunition to Sidon, Tyre,
and Nabatiyah to avoid having them con-
fiscated by Syrian troops. The Christians,
likewise, are caching weapons in their
areas.
5X1
Mediterranean
Leb
mshit
Syria
! UNUUF
ZONE
IGolant
Mika
0
0 Kilometsss
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Z6' -2 Z-z3
WESTERN SAHARA
As part of Saudi Arabia's increasingly
active role in Arab affairs, Saudi Crown
Prince Fahd has been traveling in Moroc-
co, Mauritania, and Algeria since
November I 1 in an effort to resolve the
Western Sahara dispute.
Fahd has met with King Hassan,
Mauritanian President Ould Daddah, and
President Boumediene. Fahd, who is ac-
companied by Foreign Minister Prince
Saud, will remain in the area most of this
week. If the discussions are encouraging,
the three North African leaders will be in-
vited to Saudi Arabia for an all-out effort
to resolve the Western Sahara issue.
Saudi Foreign Ministry officials say
that they have undertaken this diplomatic
initiative because the success of the efforts
of Saudi leaders with respect to Lebanon
enables them to redirect their energies to
North Africa, and because the Saudis
allegedly believe that Algerian President
Boumediene is now willing to find some
solution.
In any event, we believe the prospects
for a negotiated settlement soon are
remote. According to the Saudi account,
Boumediene recently indicated that a
settlement should respect the views of all
parties, including the Polisario Front
guerrillas, who are seeking independence
for the territory. The Moroccans are un-
likely to engage in any negotiations that
give the Front a significant role
25X1 25X1
IRAQ-KUWAIT Z ~-2
Oil-drilling operations under military
protection by both Kuwait and Iraq at
two points near their disputed border have
added a new and urgent dimension to
their long-standing territorial quarrel.
Kuwaiti Defense Minister Saad told the
UK ambassador on November 15 that the
Iraqis had recently bulldozed a road
about a half mile into Kuwaiti territory
and that a small number of Irragilsoldiers
2
Iraq iragoiI
operation
operation
Kuwait
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had taken up a position near the road. The
minister said Kuwaiti troops were block-
ing further construction or any attempt by
the Iraqis to advance.
The incident is the third Iraqi incursion
into Kuwait in two months. Iraq shows no
sign of withdrawing two small
detachments of troops that have been
camped on the Kuwaiti side of the border
since mid-September.
The Kuwait Oil Company began drill-
RHODESIA Z
Disagreement over a date for
Rhodesia's independence continued to
delay progress at the Geneva conference
this week. In addition to disputes between
the black nationalists and the white
delegation, rivalries among competing
nationalist groups remain a serious
obstacle to an agreement. Even should
ing operations last weekend in what
appears to be a government response to
the recent Iraqi moves in the border area.
The site of the Kuwaiti drilling, which was
to be supported by tanks and 200 troops,
is not far from an oil operation the Iraqis
began earlier this month just inside their
everyone settle on an independence date,
rivalries among the blacks will continue,
and perhaps become even stronger, when
the various parties try to come to grips
with the specifics of forming a transition
government.
25X1
Nkomo believes he must maintain a tough
position in concert with Mugabe because
he lost prestige among Rhodesian blacks
as a result of his break with the other
nationalist factions to engage in abortive
settlement talks with the Smith regime
5X1
5X1
early this year.
Mugabe apparently has been under
pressure to stick to a hard line from
members of the military wing of his Zim-
babwe African National Union, some of
whom would like the talks to fail. Several
ZANU military figures in Mugabe's
delegation left the conference earlier this
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cooperative relations. The Soviet anniver-
sary reception in Kinshasa was well
attended by high-ranking Zairian of-
ficials, although Mobutu himself did not
appear.
Mobutu certainly will move cautiously
in expanding relations with the USSR.
Even before the differences over Angola,
he kept the Soviets at arm's length.
Nevertheless, Mobutu probably
believes he must adapt to the strong posi-
tion the Soviets have established in
Angola and to the good relations they
have with most of Zaire's other neighbors.
Moreover, Mobutu would like to dis-
courage any Soviet or Angolan support
for Zairian dissidents, many of whom
in Angola.
25X 0
ZAIRE-USSR 5/-'~ - ~7
Relations between Zaire and the
USSR, brought to the brink of a
diplomatic break by their support for rival
groups during the Angolan civil war, may
be on the mend. Any movement toward
improved relations will probably be
gradual, however, given President
Mobutu's long-standing suspicions of
Soviet intentions in southern Africa.
According to the US embassy in
Kinshasa, the Soviet ambassador to Zaire
recently returned from consultations in
Moscow with instructions to do
everything possible to strengthen relations
and particularly to facilitate early
signature of cultural and commercial ac-
cords. The Zairian commerce minister is
preparing for a trip to Moscow to sign a
commercial agreement.
Mobutu sent Soviet President Podgor-
ny a congratulatory message on the occa-
sion of the anniversary of the October
revolution, something he did not do last
year. The message expressed the wish of
Zaire's official party to strengthen
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BRAZIL Sd
Once the votes are tallied nationwide
from Brazil's municipal elections of
November 15, the pro-government party
will probably be far out in front. The
country's leaders, however, will be closely
watching the performance of the opposi-
tion party. Earlier this year, President
Geisel called the elections a national
plebiscite for his administration, and his
recent campaign activities have attracted
broad attention to what ordinarily would
be a minor political event.
The official results are slow in coming
in. The most recent news reports indicate
that the opposition is leading in Brazil's
major cities, where its political base is
strongest. The pro-government party is
said to be winning in smaller towns and
rural areas. There is no question that the
government will win overall as a result of
its superior national organization, recent-
ly enacted campaign restrictions, and the
fact that the opposition was unable to
field candidates in approximately 1,000
smaller municipalities. The concern of the
military-backed regime, however, is that
its control of municipal offices may be cut
from the 90-percent victory in 1972 to
around 70 percent.
If Geisel is embarrassed by the show-
ing, he may make major changes in the
election laws, reorganize the part
system, or restructure his cabinet.
conomy. I
ressure to reimpose authoritarian
olitical controls and to exercise even
[lost important constituency. If not, he
asiness among prominent military of-
I policies. If the pro-government party
oes well, it should reduce the current un-
More significant, however, is the fact
hat Geisel has made the elections a test of
and wants to abolish current
election practices that allow several can-
didates within the same party to compete
for a single office.
arliament to permit him to reduce the
ecember rather than wait until the con-
itutional deadline in May. He has asked
The prospect of continuing economic
ecline may lead Prime Minister Manley
o move the national election to
ie has gone up to at least 25 percent of
e labor force.
ver the next six months. Real gross
ational product has already dropped
bout 5 percent this year and unemploy-
Jamaica's increasingly tight foreign
ayments position probably will result in
1AMAICA Q / ' 6 Z
and election day itself.
Jamaica's current-account deficit is
likely to reach a record $270 million this
year, Unless imports are cut back,
Jamaica will probably accumulate at least
a $200-million current-account deficit
next year. Export earnings have dropped
20 percent, mainly because of lower baux-
ite and alumina sales. Although bauxite
and alumina exports are picking up,
higher oil import costs will offset much of
the gain. Tourism receipts, cut sharply
because of growing civil unrest, show no
prospects for improvement. 25X1
Manley still must borrow at least $75
million more to cover his 1976
obligations. Otherwise, drawings on
foreign exchange holdings would reduce
the country's reserves to under $100
million-less than six weeks' import
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Jamaica's recent efforts to round up
new loans have fared poorly:
? The Organization of Petroleum
Exporting Countries' Special Fund
probably will not help.
? Canada last month promised $25
million in short-term cash-part of a
$100 million package, the rest of which
is longer term project credits.
? The International Monetary Fund
added $15 million this week.
? China refused a request for $30
million.
Rising private capital flight and the
government's difficulty in garnering large
new funds point to a payments gap in
1977 that dwindling reserves would be un-
able to cover. Manley's settlement with
Alcoa last month setting an eight-year
ceiling on bauxite taxes leaves little
chance of help from a bauxite tax hike.
The Chinese have publicly and
authoritatively rebutted speculation that
they might respond positively to recent
Soviet gestures toward them.
At a banquet on November 15 honoring
visiting Central African Republic Presi-
dent Bokassa, Vice Premier Li Hsien-nien
lambasted the Soviets in such uncom-
promising terms that diplomats from the
USSR and its closest East European
allies walked out of the hall. The Soviet
diplomats departed during Li's attack on
"wildly ambitious" and "criminal" Soviet
actions in Africa, a popular theme in
Chinese propaganda for several months.
Had they stayed longer, the Soviet of-
ficials would have heard Li, who is likely
to become premier soon, accuse the
Soviets of creating "false impressions"
about a relaxation in relations between
the two countries. Li asserted that
Moscow's "arrogant demands" that
China change its policy were wishful
thinking and said the Chinese would con-
tinue to carry out Chairman Mao's
"revolutionary line in foreign affairs," a
reference to China's opening to the US.
Chinese officials seem to recognize that
the USSR has had some success in por-
traying its initiatives since the death of
Mao Tse-tung two months ago as serious
efforts to reconcile differences. The
Chinese have been asserting privately that
these gestures are not genuinely con-
ciliatory, and Li's remarks are almost cer-
tainly intended to dispel widespread
foreign press speculation about the
possibility of a thaw in Sino-Soviet
relations.
Since Mao's death, Chinese propagan-
da has remained vociferously anti-Soviet.
Given the foreign press speculation about
possible relaxation in relations with the
Soviets, however, the Chinese apparently
believed it was necessary to address the
subject of the Soviet overture directly and
in a manner designed to put this specula-
tion to rest.
It is likely that China finds little new in
current Soviet blandishments. In any
event, the Chinese are almost certainly
disinclined to consider seriously the sen-
sitive issue of relations with the USSR
while they are still busy putting their
domestic house in order and before they
can assess the attitude of the new US ad-
ministration toward China.
JAPAN-KOREA-US
The Japanese government last week
mounted a public campaign to underscore
its desire for a continued US military
presence in South Korea-an effort that
clearly reflects Japanese concern over the
future course of US - South Korean
relations.
Over the past week or so, this theme
has been emphasized in:
? A speech by Japanese Am-
bassador Togo in Minneapolis.
? An interview given by the
Japanese ambassador in Seoul.
? Remarks by Japanese Defense
Agency and Foreign Ministry officials.
Heavy Japanese press coverage and
editorial comment reflect the apprehen-
sion that relations between Washington
and Seoul may be strained for some time
to come.
Public remarks by Japanese officials so
far have not raised questions about the
basic US commitment to defend South
Korea. Still, the Japanese are clearly un-
easy about the possible effects of alleged
South Korean improprieties in the US
and uncertain about the policies of the
next US administration.
In orchestrating this public effort, the
Japanese are showing little regard for
North Korean sensitivities about a con-
tinued US troop presence on Korea. The
North Korean regime has reacted
vigorously to each official Japanese state-
ment on the subject and is giving heavy
play to press accounts of alleged South
Korean improprieties in the US.
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Most Israeli leaders think the outcome of the Lebanese
civil war has weakened Israel's long-term strategic position.
They are not sure what to expect next from the Arab states but
are not likely to change their basic approach to negotiations.
Israel: The Impact of the Lebanese Crisis
Most Israeli leaders believe that the
collapse of Lebanon's political system and
the rise in Syrian influence in Lebanon
will inevitably lead to a weakening of
Israel's strategic position-if not now,
then surely in the long run. Prime
Minister Rabin's government has felt
powerless to prevent these developments.
It would concede that Lebanon could have
rapidly become a much greater threat to
Israel had Syria not intervened in the way
it did.
Israel's major concern last winter was
that Syria might move without warning to
impose a leftist Muslim regime in Beirut
by military means. Such a step would
have forced the Rabin government either
to accept a fait accompli and face a storm
of criticism at home, or to react by oc-
cupying southern Lebanon and running
the risk of triggering a wider Middle East
conflict.
The Syrians' split with the Palestinian
guerrillas and their tactical alliance with
the Lebanese Christians last spring thus
came not only as a pleasant surprise to
Israeli leaders but also did much to reduce
domestic pressures on them to become
more directly involved in the crisis. Even
so, the Israelis remain wary of Syrian in-
tentions.
Palestinians, Syria, and nearly every
other principal Arab state with Lebanon
has resulted in:
? A virtual suspension of fedayeen
terrorist raids on northern Israel.
? A relaxation of military tensions
on the Golan Heights.
? A welcome breather from Arab
pressures to resume negotiations for
further territorial withdrawals.
? Until recently- a deenenino, of the
split between Israel's two main adver-
saries, Egypt and Syria, caused initial-
ly by Egypt's signing of the second
Sinai agreement.
The Israelis believe their policy of
"calculated restraint" toward Syrian in-
tervention and their covert aid to the
Lebanese Christians have also kept the
growth of Syrian influence in Lebanon
within acceptable limits and helped
The Pluses...
Israel has received a number of
short-term benefits from the Lebanese
conflict. The preoccupation of the
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Organization.
Syria has thus far carefully heeded
Israeli warnings not to cross the so-called
"red line." Syrian forces have generally
kept well north of the Lebanese-Israeli
border and have been used primarily to
block a leftist takeover in Lebanon and to
rein in the Palestinians-objectives that
parallel Israel's own aims in many
respects.
Israeli
Christians
support has helped the
to preserve some measure of
independence and, of more immediate im-
portance to Tel Aviv, to gain control over
part of southern Lebanon once used by
the fedayeen to stage terrorist attacks on
Israeli settlements in northern Galilee.
...And Possible Minuses
Despite the pluses, the long-term con-
sequences of what has happened in
Lebanon are far less clear, and Tel Aviv is
worried.
With characteristic pessimism, many of
Israel's leading press commentators have
argued that whatever the outcome in
Lebanon, it will ultimately be to Israel's
disadvantage. They see Lebanon in-
evitably slipping from its status of relative
neutrality into the ranks of the Arab con-
frontation states under the influence of a
stronger, more aggressive Syria, and the
closing of Arab ranks once more against
Israel.
Some Israeli commentators have
already expressed alarm over the recon-
ciliation between Egypt and Syria, expec-
ting the Arabs, at a minimum, to shift
their anti-Israeli propaganda campaign
back into high gear.
Foreign Minister Alton and Minister of
Defense Peres, as well as other Israeli of-
ficials, have expressed similar concerns
about the future. For the present,
however, the Israelis are not particularly
worried about the presence of Syrian
troops in Lebanon.
Israeli chief of staff Gur recently dis-
counted any immediate military threat,
noting that the current division of Syrian
forces between Lebanon and the Golan
Heights puts Syria at a relative military
disadvantage. The Israelis also know and
are probably counting on the fact that the
Syrians are likely to have their hands full
for many months in Lebanon.
South Lebanon
The Israelis will continue to keep a
close watch, especially on southern
Lebanon, for any indication of a change in
Syrian intentions. The Rabin government
has already warned Syria publicly, and
apparently through diplomatic channels,
that it will not tolerate a resumption of
fedayeen cross-border operations from
territory under Syrian control.
Israel does not under any cir-
cumstances want the Palestinian
guerrillas to re-establish a strong presence
near Israel's northern border. Ideally, the
Israelis would like to see some kind of
canton or federation system emerge in
Lebanon that would leave: the south free
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of hostile Palestinian forces and in the
hands of Christian and Muslim groups
friendly to Israel.
Consequently, the Rabin government
will continue its so-called "good fence"
program and its arms aid to Christian
forces operating in the south,
? To encourage them to continue to
look to Israel for support.
? To help them consolidate their
hold over areas along the border from
the coast to Bint Jubayl and farther
north around Marj Uyun and
al-Qulayah.
? To strengthen their overall
bargaining position in the negotiations
yet to come over Lebanon's future.
The Israeli government will continue
acting cautiously. Thus far, it has kept its
military involvement in the fighting in the
south to a bare minimum and has even
denied its obvious aid to the Christians,
presumably in part to avoid offering the
Arabs additional reasons for uniting
against Israel and in part to avoid giving
the US reason to ask the Israelis to stop.
Should the Palestinians decide to
challenge the Christians' hold on this
area, the Israelis would face an agonizing
dilemma, especially if the Christians were
in danger of losing. Defense Minister
Peres indicated recently that Israel would
do everything in its power short of open
intervention to help its Christian allies.
The Palestinians appear too weak and
preoccupied with surviving to mount such
a challenge, perhaps for many months. It
is highly likely, moreover, that Israeli
pressure, combined with Syria's attempts
to exert greater control over the PLO, will
sharply reduce if not eliminate the
fedayeen capacity for staging cross-
border operations from Lebanon.
Beyond Lebanon
Despite its transient importance,
neither the Israelis nor the Arabs have
ever regarded the Lebanese crisis as
anything more than a sideshow to the
main Arab-Israeli dispute. Tel Aviv has
already begun to focus on what the Arabs
are likely to do now that the war is almost
behind them, and especially on the im-
plications for Israel of the Syrian-Egyp-
tian rapprochement.
In general, the Lebanese civil war does
not appear to have changed Israeli think-
ing about Syria or the other Arab states in
any basic way. The Syrian-PLO split has,
at most, encouraged the Rabin govern-
ment to believe that it may be possible
eventually to reach a better accommoda-
tion with Syria.
Prime Minister Rabin still believes that
the Arabs are not ready to make peace
with Israel and that the best that can be
achieved for now are more interim
agreements.
The Israelis are uncertain about the
significance of the Arab summit meetings
last month. Rabin and other top Israeli
officials have indicated they believe that
Syria, in exchange for Egyptian recogni-
tion of its hegemony over Lebanon, has
had to drop its objections to the Sinai
agreement and to accept President
Sadat's and the Saudis' approach to peace
negotiations with its implicit reliance on
the US as the catalyst for future
25 Miles
2 5 Kilometers
BEIRUT
!ebanon
Msrj Uyun AMASCUS
'I RI? I VF.1N. AI;Qulsyeh
A.1; l Bint Jubyll ~ 0LAN
Syria
,,vv; -,HEIGHTS
agreements.
The Israelis expect at a minimum,
therefore, that the Arabs will push for a
resumption of the Geneva peace talks next
year and increase their pressure on the US
to extract concessions from Israel.
Beyond that, the Israelis are unsure
whether the reconciliation between Egypt
and Syria will result in a softening of
Syria's position or a hardening of Egypt's.
Before the Arab summits, Israeli press
commentators and some senior Israeli of-
ficials suggested that a stronger, more
self-confident Syria might turn out to be
more flexible in negotiations. They in-
dicated that they did not expect Syria to
end its close association with the PLO,
but they speculated that Syria might be
prepared to drop its insistence on direct
PLO participation in the Geneva talks,
now that that tactic has outlived its
usefulness.
More recently, Rabin has expressed
concern that Syria, Egypt, and Saudi
Arabia might put pressure on the
Palestinians to abandon terrorism and
moderate their political position in order
to make it difficult for the US, and in turn
Israel, to continue to deny the PLO a role
in the peace talks. Israeli leaders especial-
ly fear that the US might go along with
such a move.
Whatever tactics the Arabs adopt, the
Israelis are unlikely to change their basic
negotiating strategy. Rabin is no more
anxious now than he ever was to move
ahead rapidly toward additional
agreements.
The Israeli government, therefore, will
be ready to consider new approaches to
negotiations, but will want to string them
out. Time remains a valuable commodity
to the Israelis in any future negotiations,
almost as valuable as territory itself.
Rabin wants more time to strengthen
Israel's military defenses, to see whether
the Arabs will live up to their past
agreements, to test the sincerity of those
Arab leaders who profess to be willing to
live in peace with Israel, and to adjust psy-
chologically and politically to shrinking
security borders, if it comes to that.
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Soviet leaders apparently now think events in the Middle
East will soon move toward a diplomatic showdown. They
believe they must act quickly to avoid being left on the sidelines.
New Soviet Efforts in the Middle East
The USSR believes that the coming
months may offer opportunities for mov-
ing toward resumption of the Geneva
talks. The USSR is publicly committed to
a comprehensive settlement between the
Arabs and Israelis and has stated that it
cannot be excluded from the diplomatic
process. The Soviets realize that the in-
stallation of a new US administration
could create a different diplomatic en-
vironment that might pave the way for the
Soviets to return to the negotiating arena.
The Soviet proposal made on October 1
to resume the Geneva conference was a
reminder that Moscow intends to take
part in any major diplomatic activity
affecting the area.
If the Geneva conference is reconvened,
the Soviets could increase their chances of
playing a significant role by improving
relations with Egypt. The USSR is now
making a fresh effort to explore rap-
prochement with Egypt. The Soviets have
also moved to ease the strains on their
relations with Syria that were produce
by the Lebanese war.
The Soviets hope that Egypt is disap-
pointed that it has not received more fro
the US and that Arab opposition t
Egypt's separate dealings with the U
limits the possibilities for another roun
of US-sponsored negotiations. Th
USSR can also exploit Arab anxiet
about the new US administration an
Arab opposition to the recent US-Israel
arms deal.
Finally, the Soviets may feel compelled
to act now because of Saudi Arabia's
growing influence in Egypt and Syria and
its contribution to arranging of a cease-
fire in Lebanon. The Soviets undoubtedly
believe that the Saudis are acting as US
proxies in the Middle East and the
USSR must be apprehensive about Saudi
Arabia's success.
Approach to Egypt
The Soviet search for greater involve-
ment in the negotiations in the Middle
East has started with Egypt, the linchpin
?r erwiet efforts in the area for 20 years.
During the past four years, Soviet-Egyp-
tian relations have suffered a series of set25X1
backs; President Sadat expelled Soviet
advisers, terminated Soviet use of Egyp-
tian naval facilities, and unilaterally
abrogated the Soviet-Egyptian friendship
treaty. Egypt's search for the good offices
of the US in a series of Arab-Israeli
negotiations has been particularly
irksome to the Soviets.
The USSR has also been concerned
about Sadat's domestic policies. A
political shift to the right has taken place,
and key leftists in the government and the
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Arab Socialist Union have been purged.
A parallel shift has taken place in the
economic sphere, with some of Egypt's
socialist institutions de-emphasized in
favor of the entry of private Arab and
Western capital.
There is little likelihood that the USSR
can dissuade Sadat from these policies,
but for the first time in more than a year
the USSR is trying to break the im-
passe.
Soviet Foreign Minister Gromyko
met with Foreign Minister Fahmi in
Bulgaria on November 3 and 4 to explore
The terse communique issued at the end
of the talks, however, indicated that both
sides were still wary of each other and
possibly that the discussions did not go
well.
Egyptian Reaction
How the Egyptians will react to these
inducements is not clear, but the USSR is
probably confident of a reasonable
response. Soviet thinking may run along
these lines:
? Cairo expects more attention
from the US if the Soviet-Egyptian
connection can be revived.
? The Egyptian military would
favor a resumption of Soviet military
deliveries.
Syria
Soviet-Syrian relations have been
strained as a result of the prolonged
fighting in Lebanon, and the USSR is
likely to make the first moves to repair
the damage.
Moscow was clearly uncomfortable
with the Syrian-Palestinian rift but could
do little so long as Syria was pursuing its
offensive and ignoring cease-fires sup-
ported by the USSR. The Soviets made
their case both publicly and privately
against President Asad's actions but,
despite Palestinian importuning, never
applied decisive pressure on the S rians.
There has been no evidence thaZt.JSSR
tried to use the usually responsive but
politically weak Syrian Communist
Party to put pressure on Asad. The So-
Asad, viets were careful not to26Mrdize
who had previously avoided public discus- their basic interests in Syria by un-
sion of his differences with the USSR, duly antagonizing Damascus.
went out of his way to be critical of the The USSR is not optimistic about the
Soviets success of the current cease-f215,Xbtt if it
holds, the Soviets will move cg8lxlI to try
to repair the damage done to relations
with Syria. Brezhnev's speech to the Com-
munist Party Central Committee plenum
last month marked a step in this direction.
In his discussion of the situation in
Lebanon, he implied that Syria's involve-
ment in "the orbit of military actions"
had been in response to Lebanese Chris-
tian and Israeli actions.
The Soviet treatment of Syria is now
Soviet press attacks were the most vise- couched in terms intended to smooth over
ble expression of Soviet displeasure. Of- differences. The USSR could make ad-
ficials in Syria linked the recent cutback ditional offers of military and economic
in Soviet scholarships for Syrian students assistance to counter residual Syrian
to Syria's involvement in Lebanon. bitterness. The Soviets delh*radl $200
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million in arms to Syria in the first nine
months of 1976.
Geneva Conference
The Soviet call for a return to the
Geneva peace conference is similar to that
Moscow made last April, but the Soviets
apparently now believe that events in the
Middle East will soon enter a critical
phase and that they must move quickly to
avoid being left on the sidelines. The
USSR may also believe that this time the
chances of reviving Geneva are enhanced
because:
? Egypt does not consider indepen-
dent negotiations under US auspices
as a productive option.
? The US has apparently aban-
doned the step-by-step approach and
accepts Geneva as the venue for com-
prehensive talks.
Moscow's Geneva proposal was
carefully constructed to appeal to both the
Palestinians and the Israelis.
The USSR stressed that Palestinian
attendance would be "on an equal footing
from the very outset," showing its con-
tinued support of the PLO's role.
The only new element in the Soviet
position on the Geneva conference is
calculated to appeal to Israel-an agenda
item to "end the state of war" as a key
aspect of any eventual settlement. The
stress on "appropriate international
guarantees" for Israel's existence and
security might also be intended by the
Soviets to placate the Israeli government.
Moscow originally suggested that the
conference reconvene in October or
November, but Brezhnev in his speech to
the Central Committee plenum last
Jordanians, including military men, are becoming more
and more disillusioned over the government's failure to deal
effectively with the country's domestic problems. At the mo-
ment, however, King Husayn's position seems to be still secure.
month pointedly avoided a specific time
frame.
The Soviets have one serious problem
in their attempted revival of Geneva. As
long as they support the idea of a peace
conference, they will be partly responsible
for getting the proposed participants to
attend. This will not be easy for a number
of reasons:
? Egypt ostensibly supports a return
to Geneva, but as long as the
Soviet-Egyptian impasse continues,
Sadat will refuse to close the door to
US-sponsored diplomacy.
? Syria and Jordan have not em-
braced the Soviet proposal.
? The role of the PLO is a major
representational problem.
? Israel has already responded
negatively.
25x1
Jordan: The King's Problems
King Husayn and other Jordanian
leaders are coming under increasing
criticism for failing to deal effectively
with the country's domestic problems.
Disaffection-caused mostly by a high
rate of inflation-is especially noticeable
among the East Bank, non-Palestinian
population that has always provided the
basic strength of the armed forces, the
security services, and the monarchy.
In foreign affairs, Jordan-which has
almost no ability to take independent in-
itiatives-is marking time. Jordan is slow-
ly repairing the damage to its relations
with Egypt and Saudi Arabia caused by
its close ties to Syria, but has no effective
strategy for dealing with its basic
problems: Israel, the Palestinians, and the
West Bank.
Jordan's political and military leaders
are not well prepared to deal with'the
country's problems. Fortunately for them,
these problems appear at present to con-
stitute only chronic irritants. They do not
seem to threaten Husayn's position.
Prime Minister Mudhir Badran has
concentrated on domestic matters sire X1
his appointment in July, but his lack of a
political base and his limited access to
human and financial resources make it
difficult for him to demand sacrifices
of the people or changes in the govern-
ment.
Badran, moreover, apparently has only
limited backing from the King, who is in-
clined to concentrate only on foreign and
military affairs. Husayn only recently
turned again to Jordan's economic and
administrative problems, which he has
always treated on a sporadic basis.
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The armed forces commander, Sharif
Zayd bin Shakir, is an able officer but is
25X6 widely regarded as too
Westernized, and determined to acquire
military hardware at the expense of the
well-being of his troops. He evidently has
been reluctant to implement plans to
reorganize and reduce the size of the ar-
my-steps necessary to improve pay and
living conditions-lest he diminish his
own power base.
Most of the other high-ranking army
officers, who generally are drawn from
the Bedouin who predominate in the ar-
my, are inept. They show no signs of hav-
ing the managerial skill or royal contacts
needed to deal effectively with the army's
problems.
Army Complaints
Morale in the armed forces has serious-
ly declined during the past year and is not
likely to improve soon. Inflation has cut
the purchasing power of the soldier's pay
by half in the last two years. Despite a pay
increase announced late last week, a
junior officer is still paid less than an un-
skilled construction worker.
The pay problem has resulted in in-
creased desertions and has prompted
many soldiers to take a second job, which
is illegal. It has also led an unprecedented
number of officers and men to seek to
resign.
Although the level of military unrest is
higher than at any time in recent years, it
has not yet resulted in any open rebellion
such as occurred in the garrison town of
Zarqa in early 1974. Enlisted men,
however, are now openly critical of the
army leadership and, less frequently, of
the King himself.
There is no evidence that any group in
the military is considering more radical
forms of protest or a move against the
King. Most army officers only want to at-
tract the King's attention to their
economic needs in the hope he will
provide some relief.
Among senior officers, morale may im-
prove when the US-supplied air defense
system is finally installed and when other
programs to upgrade army equipment are
implemented.
Military commanders are hoping to
provide regular salary increases to bolster
morale over the longer term. This will
require the negotiation of additional
foreign financial subsidies, however, or a
substantial reduction in the size of the ar-
my. One plan under consideration aims at
a reduction from five to four army
divisions.
The inflationary pressures that are
hurting army personnel and middle-class
civil servants are not likely to abate. These
pressures result from world-wide inflation
and the rapid expansion of the Jordanian
economy. Domestic growth and the move-
ment of foreign businesses and capital to
Jordan from Lebanon have created and
are likely to sustain inflationary shortages
of labor, developed land, and imported
goods.
East Bank Sentiment
A combination of minor political
developments over the past few months
has led East Bankers-middle-class urban
residents and rural Bedouin alike-to
question increasingly their customarily
positive views of the King and his dedica-
tion to protecting their interests.
Conservative Bedouin leaders complain
that their legal prerogatives have been
reduced by the establishment of modern
courts, and that they are not adequately
represented in high government and army
posts. In fact, the current cabinet does not
include any spokesman for Bedouin
interests, and the Bedouin lost their high-
est ranking representative in the army
through his forced retirement early this
year.
East Bankers also are upset over the
lifestyle of the King, his family, and his
advisers. Religious conservatives, who
complain about the royal family's Wester-
nized, jet-set behavior, were offended by
the fact that Husayn was abroad for most
of the recent month of Ramadan.
More sophisticated middle-class urban
residents are also critical of the royal
family and its hangers-on. The middle
class, which customarily has been a prin-
cipal recipient of civil service and other
government benefits, is now alarmed and
envious that full employment, increasing
land prices, and widespread corruption
have made unskilled workers and the up-
per classes the chief beneficiaries of Jor-
dan's rapidly growing economy.
The Palestinians
In public, King Husayn has consistently
affirmed Jordan's adherence to the deci-
sion of the Arab summit in Rabat in 1974
that the Palestine Liberation Organiza-
tion is the sole legitimate representative of
the Palestinians. This stand has quieted
the previously intense debate about the
rights of the Palestinian majority on Jor-
25X1
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dan's East Bank by inhibiting independent
Palestinian political activity in Jordan.
The King's nominal concession of the
Israeli-occupied West Bank to the
Palestinians, where they constitute vir-
tually all of the Arab population, has had
its greatest impact on Jordan's domestic
politics. The King has used this conces-
sion to clear the way for increased
Hashemite-Bedouin political dominance
on the East Bank. Although Palestinians
are alloted a quota of portfolios in the
Jordanian cabinet, are heavily represented
in the civil service, and serve in increasing
numbers in the army, the King has made
clear that there is no room for the
organized pursuit of Palestinian
nationalism in Jordan.
The Palestinians also have been in-
timidated by Jordan's support of Syria's
involvement in the Lebanese conflict.
Several prominent members of the
Palestinian community in Amman were
arrested last summer following their
public criticism of Syria's military moves
against Palestinian forces in Lebanon.
Husayn's success in keeping the Palesti-
nian issue quiet is a major domestic vic-
tory. Palestinian nationalism represents
the greatest long-term threat to the
Hashemite monarchy.
Manifestations of East Bank - Palesti-
nian rivalry are likely to surface again in
Jordan's domestic politics whenever Jor-
dan and the Palestinians are called on to
participate in-or stand aside for-a new
round of general Middle East peace
negotiations.
Peace Talks
Husayn's public position is that he will
participate in a new round of negotiations
if asked to do so by the parties already in-
volved. He says he will do so only as a
spokesman for a confrontation state,
however, and not as an aspirant for con-
trol of the West Bank.
Despite this stand, Husayn probably
continues to view the future of the West
Bank as bound up with that of Jordan. He
would still like to see the two banks of the
Jordan reunited in a federation in which
the Palestinians would play an
autonomous but subservient role. The two
areas even now are joined by commercial
and family ties.
Officially, Jordanian spokesmen show
no interest in occasional statements by the
Israelis that Jordan must be involved in
any negotiations on the future disposition
of the West Bank. Privately, however, the
Jordanians probably welcome such
statements. They continue to take
cautious steps to protect or enhance their
limited political influence in the area.
Jordan's West Bank policy is im-
plemented by the activist minister of
culture and information, Adrian Abu Aw-
dah, who acts as prime minister when
Badran travels outside Jordan. Awdah
works to preserve Amman's ties to
selected West Bank officials and at the
same time attempts to undercut the
appeal of the current PLO leadership in
the area.
Awdah's success will be limited both by
Jordan's lack of substantial funds to dis-
tribute on the West Bank and by the
reluctance of the more nationalistic group
of West Bank mayors elected last spring
to be seen cooperating with the Jordanian
government.
Arab Relations
Jordanian officials are uneasy that they
played no significant role in the in-
ter-Arab talks that led to the current
cease-fire in Lebanon. They are none-
theless relieved that Syria and Egypt
have at least temporarily reconciled their
differences. Amman's consistent backing
of Syria had led to serious strains in Jor-
dan's relations with both Egypt and Saudi
Arabia.
Husayn seeks as a matter of principle
to temper his close association with Syria
by maintaining good relations with Egypt
and the conservative Persian Gulf states.
This has been facilitated in recent months
by the removal of the pro-Syrian former
prime minister, Zayd Rifai, and by the
successful negotiation of Saudi funding
for a US-supplied air defense system for
Jordan.
Prime Minister Badran is much less
enthusiastic than his predecessor about
the merits of Jordan's recently developed
military and economic cooperation
arrangements with Syria, but he has made
no attempt to terminate them. With
foreign affairs even more firmly in the
King's hands, relations with Syria are
likely to continue essentially unchanged
for the foreseeable future.
Jordan's involvement in Lebanon has
been limited. Husayn probably would be
willing to contribute limited numbers of
Jordanian troops to the Arab peacekeep-
ing force in Lebanon, but he is not likely
to be asked, as this would be unacceptable
to the Palestinians 5X1
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The new Soviet five-year plan has relatively modest goals.
Even so, prospects are not good for their fulftllment.
-b5
USSR: Five- Year Plan
a
The Soviet economy has not regained
the momentum it lost because of the crop
disaster last year. Even the improvement
the Soviets expect next year probably will
not get the economy back on the schedule
established by the tenth five-year plan
(1976-1980).
The five-year plan was nevertheless for-
mally ratified by the Supreme Soviet and
a party plenum in late October virtually
unchanged from the version presented to
the 25th Party Congress last March.
Although the plan goals are relatively un-
ambitious, the prospects for fulfillment
are not good.
A 3-percent growth in gross national
product is projected for 1976, compared
with the planned average annual growth
of 5 percent for 1976 to 1980. Industrial
production grew by an estimated 4 per-
cent during the January to September
period-the lowest rate since World War
II-largely due to a decline in processed
food production, which is suffering from
last year's harvest shortfall.
The estimate for a low GNP growth
rate this year also rests on a projected
1-percent growth in total farm output.
Although the harvest-particularly of
grains-was good, livestock production
is likely to drop by 13.5 percent.
A Slow Start
Few details of the 1977 plan were dis-
closed last month, but most goals seem
surprisingly modest in view of the fact
that the economy will be bolstered by a
good supply of agricultural raw materials.
The growth rate planned in 1977 for in-
dustry, for example, is only 5.6 percent
compared with the average annual rate of
6.5 percent projected in the five-year plan.
Given the slow start in 1976, the Soviets
must sustain high rates of growth
throughout the remainder of the five years
if the 1980 targets are to be met. Industry
would have to grow by an annual average
rate of almost 7 percent and agriculture
by more than 6.5 percent in 1977 to 1980,
Both rates exceed the Soviet record since
1970 and seem beyond reasonable expec-
tations.
The final version of the five-year plan
leaves intact the main thrust of the version
released in March:
? Relatively rapid industrial
growth.
? Ambitious farm targets backed by
a large allocation of resources.
? Continued pledges to the con-
sumer.
? Slower growth in new investment
with emphasis on completing old pro-
jects.
? Stress on increasing productivity.
The final goals for consumer goods out-
put, industrial materials, agricultural out-
put, and investment are at the upper end
of the range given to the party congress
last March. A few targets are at the lower
end, particularly those for total industrial
output and producer goods. Only the
labor productivity goal falls below the
original target. The lowering of this goal
is particularly ominous for the Soviets
since they must now depend largely on in-
creases in productivity for growth.
A Forceful Presentation
General Secretary Brezhnev's unusual-
ly frank and forceful presentation of the
plan to the party plenum identified the
areas most crucial for the plan's success
as agriculture, investment, and produc-
tivity. While indicating that the economy
was not doing particularly well in these
areas, his tone was optimistic.
According to Brezhnev, the most press-
ing task in 1976 to 1980 is to improve the
performance of agriculture. In a rare
acknowledgment of the close competition
for resources, he called the investment
allocation to this sector "a tremendous
sum" that necessitated "curtailing some
of the requirements of other branches of
the economy."
Brezhnev said that neglect of the con-
sumer sector by production and planning
organizations would not be tolerated. He
called for "achieving breakthroughs in the
entire sphere of consumer goods output
and services," identifying the satisfaction
of consumer demands as a major prere-
quisite to the success of the five-year plan.
Although acknowledging the looming
labor shortage, Brezhnev offered no
solutions other than a general appeal for a
more rational use of labor.
The latest industrial investment figures
show that most funds will continue to go
into those sectors that are deemed impor-
tant to scientific and technical
progress-chemicals, petroleum,
metallurgy, electronics, and the heavy
machine building industries. Brezhnev
called the implementation of the invest-
ment program "probably the central
problem" and admitted the difficulties of
achieving a large boost in the stock of
plant and equipment with minimal invest-
ment funds. He promised adoption of new
measures to speed up the process of com-
pleting unfinished construction ro.ects.
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