NATIONAL INTELLIGENCE DAILY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0001367614
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 22
• Document Creation Date: June 23, 2015
• Document Release Date: September 9, 2010
• Case Number: F-2007-00450
• Publication Date: October 16, 1985

APPROVED FOR RELEASE^ DATE:
07-22-2010
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 Politburo Cban:es Under Gorbachev
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 The results of the party Central Committee plenum yesterday
ahead forcefully with his economic agenda.
According to Soviet media, the Central Committee promoted the
newly appointed head of Gosplan, 56-year-old Nikolay Talon, to
candidate membership in the Politburo. The plenum also followed up
the replacement of Tlkhonov as premier two weeks ago by removing
him from the Politburo, while releasing his successor Nikolay Ryzhkov
The Central Committee approved the new party program, party
statutes, and the release of draft directives of the five-year plan for
1986-90. In his speech, Gorbachev said that it had not been easy to
reach agreement on the new plan and complained of problems
created by officials still bound by Inertia. He set an ambitious goal for
growth In annual national income through the year 2000 of almost
5 percent-a marked Improvement over the 3-percent rate achieved
management, worker Incentives. and economic efficiency
Comment: Talyzin's elevation to the Politburo is the latest Indication
that Gorbachev, who has vowed to emphasize a strategic role for the
planning agency, has given It greater authority compared with the
ministries. No other nead of Gosplan has enjoyed such status since
The long-expected removal of Talyzin's predecessor, Baybakov, and
the decision not to replace Ryzhkov as senior economic secretary
appear to give the new Premier great latitude in administering the
economy. Talyzin's promotion caps a restoration of the government
bureaucracy's representation on the Politburo, reducing the
likelihood of serious foot -dra ging against Gorbachev's economic
initiatives.
Gorbachev's criticism of economic cadres and the consolidation of
his new economic team suggests that further personnel changes are
ahead in the Council of Ministers. With the promotion of Talyzin,
78-year-old Ivan Arkhipov is the only first deputy premier on the
Council lacking Is days in the leadership appear to Usl
be numbered.
 Although the plenum appears to be giving Gorbachev a green light for
proceeding with his economic agenda. its failure to remove additional
Brezhnev holdovers from the Politburo and Secretariat, such as
Kazakh party chief Kunayev and Moscow party head Grishin, may be
a sign of lingering political resistance. Both reportedly are on the
Although Gorbachev gave few details of the party program, party
statutes, and five-year plan, he said they would be published shortly
for public discussion. These documents will give a clearer Indication
of how Gorbachev Intends to achieve his ambitious economic goals
and the roles he expects his new economic leadership to assume.
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GREECE: Now Austerity Measures
The austerity measures announced by Prime Minister
Papandreou lots last week probably do not go for enough to
reverse Greece's deteriorating balance-o/-payments situation or
to deal with problems In the domestic economy.
The new measures include a 15-percent devaluation of the drachma,
a ti hter oli on wa es, and new restrictions on imports
the government also wants to strengthen price
controls and to reduce the lay deficit in the public sector by
reducing public spending~
Papandreou prepared the way for the measures by warning that
Greece can no longer afford to spend more than it produces. In
introducing the new measures, he hinted that without the new policies
Greece would soon be forced to accept conditions Imposed by the
Both the conservative opposition New Democracy party and the
Communists have criticized the new policies as harmful to workers.
The Communists have threatened to use their disproportionate
strength in the labor unions to fight the new policies, clearly a warning
Comments: The new measures are aimed at reducing the current
account deficit, paving the way for a balance-of-payments loan from
the EC, and avoiding the need to request a rescheduling of foreign
debt. Total foreign debt will top $16 billion this year, and the current
account deficit Is likely to surpass the record of $2.4 billion In 1981.
The policies do not address the key question of reducing the large
state role in the economy. The program is unlikely to Improve the
profits of Greek companies, and private investment is likely to remain
depressed. It may, however, help reassure Greece's International
creditors, who have nt to lend to Greece as the
economy has faltered
The timing of Papandreou's decision to take on these difficult issues
probably reflects a desire to take advantage of his political strength in
that the worsening economy requires prompt action.
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The Socialist International's special conference on disarmament,
opening today in Vienna. will discuss the second draft of a study by Its
Advisory Committee on Disarmament and Arms Control, which is
considerably less pro-Soviet than Its predecessor. Unlike the previous
draft, which had called for a moratorium on INF deployment, the new
report urges both superpowers to reduce medium-range nuclear
forces in Europe. It also advocates on-the-spot verification of arms
control agreements and no longer mentions a Central European
nuclear-weapons-free zone. The latest report is still critical of SDI but
calls for establishing "unambiguous limits to research" on space
weammso the Afar draft demanded a total ban on the US plan.
Comment: The greater willingness to consider US arms control
concerns probably reflects in part appreciation for the high-level
attention a delegation of the Advisory Committee received during its
visit to the US last March. It probably also Is the result of pressure
from French. Italian, and Portuguese Socialists, who have criticized
 CHINA: Economy Still Ovarh.ated
Official Chinese statistics show that the economy is continuing to
grow at a rapid pace, with the growth rate of Industrial output
Increasing 21.1 percent faster during the first three quarters of this
year than in the corresponding period last year. Energy output rose by
almost 11 percent-because of new oil finds and reforms in the coal
Industry. The volume of freight carried on the railroads during the first
three quarters of 1985, however, increased only by 5.4 percent.
Comment: The exceptionally rapid growth of the Chinese economy
this year has aggravated longstanding economic bottlenecks.
Although the industrial growth rate is down slightly from the January-
June level, the decline can be attributed more to the normal third-
quarter slowdown than to the success of remedial measures. Despite
the rapid growth in energy production, China's serious energy
shortage continues, and its failure to expand rail transport has made
It difficult for Beijing to utilize its growing stock of coal. The
overheated economy has been caused in large measure by a highly
Inflationary surge in capital investment spending-45 percent during
the first half of 1985-and by a hike in the cost of labor of more than
20 percent.
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16 October 1985
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USSR: Earthquake Damage
Some key Soviet Installations may have been damaged by the
powerful earthquake measuring 6.1 on the Richter scale that struck
Soviet Central Asia 140 miles (230 kilometers) north-northeast of the
Ta)ik capital of Dushanbe. It caused damage to Industrial and
residential buildings and, according to TASS, loss of life. The
epicenter was at the village of Kayrakkum located about 9 miles
(15 kil t Industrial center of Leninabad, population
150.000.
Comment: A uranium concentration plant Is only 6 miles
(10 kilometers) from Kayrakkum, while a nearby dam that backs up a
30-mile-long (50-kilometer) reservoir would flood Leninabad if it were
to break. Earthquakes of this magnitude can even damage structures
designed to withstand such forces
 Ihas tentatively Identified body washed up
now Tartus, Syria, Thursday as Achille Lauro hostage Klinghoffer
downward through skull ... official autopsy pending.
- Portuguese frigate program may be further delayed .. .
Netherlands haggling over extent of Involvement by its industry
... Usbon and West German firm, the grime contractor. will try to
proceed regardless of Dutch financing
- British court ruled against Prime Minister Thatcher's policy of
withholding grants to force local governments to control spending
overturn court ... revival of issue embarrassing for Tories.
- Finland's Communist Party expelled district organizations
dominated by Soviet-backed wing Sunday ... party's chances In
1987 elections further diluted If breakaway partv forms. as ms
likely ... Soviet-Finnish relations unaffected.
- French-led Arlanespace consortium announced launch insurance
with much lower than 20- to 25-percent premiums of commercial
insurers ... responding to loss of four satellites last month ... will
cover launch phase only, but may increase its share of launch
International - Arab countries will call today for UN vote to expel Israel from
General Assembly ... Israeli seat secure ... Tunis air raid,
however, probably will make vote closer than previous challenges.
frigate an route from Red Sea to Al Jubayl naval base on Persian
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 - Japanese Government yesterday unveiled $14 billion plan to
increase housing, public works spending, consumer credit ...
meant to reduce trade surplus, but too small to have much impact.
- Indonesia, USSR discussing. Moscow's $240 million offer to help
finance hospital construction ... would be first aid project since
mid-1960s ... Jakarta unlikely to accept offer without tight
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