NATIONAL INTELLIGENCE DAILY WEDNESDAY 30 APRIL 1980

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005148771
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 22
• Document Creation Date: June 23, 2015
• Document Release Date: February 1, 2010
• Case Number: F-2007-00460
• Publication Date: April 30, 1980

Director of
Central
Intelligence
APPROVED FOR RELEASE^
DATE: 01-20-2010
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 Contents
Situation Reports
Iran . . . . . . . . . . . . . . . . . . . . . . . . . . .
USSR-Afghanistan . . . . . . . . . . . . . . . . . . . . .
Briefs and Comments
1
3
USSR-US: Warning on Iran . . . . . . . . . . . . . . . . .
4
Nicaragua: Limited Concessions . . . . . . . . . . . . . .
8
Japan: Civilian Research and Development. . . . . . . . .
9
Turkey: Violence on May Day . . . . . . . . . . . . . . .
10
Liberia: End to Executions . . . . . . . . . . . . . . . .
11
Nigeria: Anti-Inflation Measures . . . . . . . . . . . . .
11
Special Analysis
Iran: Economic Conditions and Prospects . . . . . . . . .
12
r-
30 April 1980
 Top s ores
Iraq probably was responsible for yesterday's attemi ted as-
sassination of Foreign Minister Ghotbzadeh in Kuwait.
Kuwaiti authorities suspect the attackers were
The attack may lead to further decline in Iranian-
Iraqi relations. More border incidents are likely, and
the Iranians probably will search for some way to retali-
ate in kind for the attempt on Ghotbzadeh.
Defense Minister Chamran--who is not a particularly
influential figure--said yesterday he favors releasing
the hostages and argued that every country uses its
embassies to collect intelligence. Chamran is acutely
conscious of Iran's military weakness in the aftermath of
the US rescue mission, and he probably is concerned that
the US will mount military operations against Iran. (U)
The Iranian Army broadcast a warning to all its
units yesterday that the US may soon launch another
"plan" for military intervention. The broadcast stated
that US Marines have arrived in Bahrain. (U)
Bani-Sadr has publicly asked the European Parliament,
the Nonaligned Movement, the Islamic states, and the UN
to send delegations to Tehran on 10-12 May for a review
of the US aggression. The Nonaligned states were also
asked to convene in "emergency session" at the ministe-
rial level on this issue. (U)
1 P
30 April 1980
 The pro-Soviet Tudeh Party has issued a statement
condemning the rescue mission and characterizing it as
"one link" in a US conspiracy to overthrow the Khomeini
regime. The Soviet-controlled National Voice of Iran
radio based in Baku has taken a similar line on the mis-
sion and warned that the US is using a "fifth column" of
Iranians to support its "plots."
The Tudeh and other leftists probably are especially
pleased that the rescue mission has at least temporarily
halted the attacks on leftists at Iranian univers
Classes reportedly have resumed on some campuses.
Both President Bani-Sadr and the principal Kurdish
dissidents declared a cease-fire in the Kurdish areas ef-
fective at midnight local time last night.- Tensions
remain very high, however, and significant fighting could
resume if Bani-Sadr does not send a goodwill delegation
from Tehran to Mahabad today as the Kurds claim he will.
Both sides have indicated that the prospect of some prog-
ress in the autonomy negotiations may have permitted the
agreement on a cease-fire.
2
30 April 1980
 aria n.- ani
Afghanistan
0 150
-`may- Kilometers
U.S.S.R. J c j \ China
Boundary representation is
not necessarily authoritative
 Soviet troops also may have to assume more responsi-
bility for security in Kabul, where student demonstrations
have led to clashes with the Afghan police and Army. Ru-
mors that school girls involved in demonstrations were
killed by Afghan troops could inflame the situation.
Last weekend, the unenthusiastic popular reaction to
the second anniversary of the coup that brought the
Marxists to power in Kabul gave fresh testimony to the
government's weakness. President Babrak's speech empha-
sizing Afghanistan's ties to the USSR almost certainly
reinforced the belief that he depends on Soviet troops
for survival. During the ceremonies, the two deputy prime
ministers pointedly ignored each other in another display
of the deep divisions within the ruling party.
3
30 April 1980
 USSR-US: Warning on Iran
Moscow repeated a warning issued by President
Brezhnev in 1916 aga-inst military action in Iran and also is
increasing its efforts to isolate the US from its allies by its
propaganda on the abortive rescue mission in Iran and on Secretary
Vance's resignation.
a Soviet
Foreign Ministry official on Sunday warned that further
US military actions in Iran can lead to "most dangerous
results." The official recalled Brezhnev's statement of
19 November 1978, in which the Soviet leader warned that
military "interference" in Iran would be regarded by
the Soviet Union as affecting its "security interests."
Moscow last cited this statement publicly in a TASS com-
mentary on 25 March.
Soviet propaganda recently has become even harsher,
attempting to portray a "serious and dangerous crisis in
Washington's whole foreign policy course." Most of the
commentary has attempted to present Secretary Vance as a
victim of the US political system and of intrigues
against him, but one Soviet domestic broadcast warned
that his departure "alerts" the world to "the dangerous,
adventurist course on which the US has embarked." (U)
The theme of US irresponsibility also was prominent
in Foreign Minister Gromyko's press conference in Paris
on 25 April and in the speech of candidate Politburo
member Ponomarev to the gathering of European Communists
in Paris on Monday. In addition, Gromyko warned the
Europeans against US "pressure." (U)
30 April 1980
 The Sandinistas are attempting to divide the opposition by
granting Zimited concessions.
To split private sector groups from moderate Alfonso
Robelo--who resigned from the junta last week to protest
Sandinista policies--the Sandinista National Directorate
has agreed to halt confiscations of private property,
permit citizens to appeal government decisions, and
rescind the state of emergency in effect since last
July. According to Sandinista leaders, representatives
of the private sector will replace Robelo and another
moderate on the junta.
In a related move, the dispute over the independent
newspaper La Prensa has been resolved in favor of the
owners, with pro-Sandinista employees leaving to estab-
lish their own paper. (S)
These concessions may not satisfy the coalition of
business groups and independent political parties that
has challenged recent actions by the National Directorate.
Other private sector demands have not been met. The gov-
ernment has announced that Robelo will be barred from the
junta, and the Sandinistas still intend to pack the
quasi-legislative Council of State--the decision that
precipitated the current crisis.
Anti-Sandinista unrest is increasing.
8
30 April 1980
 JAPAN: Civilian Research and Development
Japan is preparing to increase spending on civilian research
and development by 50 percent in the 1980s.
Japanese business interests and key government agen-
cies are pushing to raise the share of national income
devoted to civilian R & D from 2.1 percent to over 3 per-
cent by 1990 and to double government funding as soon as
possible. In a significant step toward securing the
political consensus required for an undertaking of this
magnitude, the lower house of the Diet has just estab-
lished a permanent Committee on Science and Technology.
Budget constraints may delay any big jump in government
spending for a year or two, although government-backed
loans could be made available sooner.
A study by the influential Japan' Development Bank
concludes that the government should provide greatly in-
creased subsidies for private commercial R & D. Such
subsidies would likely be channeled to high-technology,
export-oriented Japanese industries and would not in-
crease Japanese basic research as encouraged by the US.
Currently, the number of scientists and engineers
in Japanese industry is just over half that in US indus-
try. Expenditures by Japanese industry for R & D are
roughly a third that of US industry, but the cost is much
lower in Japan, making the gap in spending for R & D less
significant. In addition, military R & D does not divert
resources from profit-making endeavors.
During the coming decade, the gap in R & D invest-
ment for commercial purposes could be eliminated by the
planned increase in spending. Combined with on-going
aggressive acquisition of foreign technology, the increase
will help Japanese industry compete successfully with the
US in a widening range of advanced technology sectors by
the late 1980s.
-40f) Fie
9
30 April 1980
 TURKEY: Violence on May Day
The already high level of violence in Turkey is
likely to increase markedly tomorrow as leftists attempt
to defy a government ban on rallies and demonstrations.
There were clashes in Ankara yesterday when an alliance of
students and workers protested the ban, and authorities
in Istanbul are considering a curfew in the event of
expanded activity. May Day has been a time of heightened
turbulence in the last few years--particularly in Istan-
bul--and security forces have been placed on alert to
counter further outbreaks.
9P geQ*Q~L_
10
30 April 1980
 Liberian Head of State Doe's announcement yesterday
that his government will forego further executions and
that due process will be respected suggests that radicals
in the ruling military council have been dissuaded from
the need to clean house by more moderate elements. The
radicals also may have been influenced by the interna-
tional criticism of the executions that has isolated the
regime. Doe's pronouncement probably reflects the con-
sensus view of the council at this time and not a uni-
lateral decision on his part. There are still over 80
figures from the Tolbert regime under arrest and due to
appear before the military tribunal.
The government's recently announced anti-inflation
program is almost certain to encounter strong resistance
from increasingly restive labor groups, including the oil
workers' union. Urban workers, whose living standards
have dropped sharply under a general wage freeze in ef-
fect since 1976, probably will take exception to a pro-
posed 5 percent ceiling on annual wage increases. Lagos
has been trying for the past few weeks to head off a
number of potentially crippling strikes, but Nigerian
labor leaders probably will come under considerable
pressure from the rank-and-file for a nationwide walkout.
30 April 1980
 IRAN: Economic Conditions and Prospects
The Iranian economy has been running at half speed since the
revolution, and there are no signs that a substantial improvement
is imminent. Despite publicity given by the Iranian Government to
some recent trade deals with the USSR and East European countries,
the Bloc does not represent an attractive alternative to Western
goods or markets.
The modern sectors have been most disrupted, with
oil production down to about 2.4 million barrels per day
in first quarter 1980 or about 45 percent of its prerevo-
lutionary level. Industrial production has been stagnant
for months at less than half normal production, and
large-scale construction activity has virtually ceased.
Grain production reportedly was above average in 1979
due to good weather, and first reports from Iran indicate
that another good crop is expected this year.
The deterioration of the economy has not yet caused
extensive unrest due to Iran's ability to obtain basic
foods and other necessities in sufficient amounts. The
standard of living has been lowered to an austere level,
however, with quality foods and manufactured goods dif-
ficult to find.
Oil production has been troubled by marketing dif-
ficulties, organizational and labor problems, and in-
creasingly frequent sabotage of oil facilities. The
Iranians also are having some problems in obtaining some
spare parts, chemicals, and other materials for the oil
industry that formerly were purchased from US suppliers.
Iranian difficulties in finding alternative sup-
plies are attributable to the lack of organization
30 pri r-IM
 rather than the absence of sellers. The greatest prob-
lem is acquiring refining catalysts and other process
chemicals.
Tehran last week began denying crude oil to Japanese
companies due to disputes over oil prices. British
Petroleum and Shell had previously suspended their own
purchases. In all, over 900,000 barrels per day of Ira-
nian crude exports are affected.
Industry
Iran's major industries continue to be plagued by
strikes, low labor productivity, worker interference in
management, and a lack of competent technical and mana-
gerial personnel. Shortages of raw materials and capital
goods from abroad--due mostly to Iranian mismanagement--
are major problems.
The takeover last summer of private Iranian owner-
ship of major industries served to prevent the layoff of
excess workers and assured the companies' survival
through government subsidies. Joint venture operations
with foreign partners--who provide some technical and
managerial services plus better access to spare parts
and raw materials--have generally fared better than the
wholly Iranian operations.
Central Bank officials have stated that 80 percent
of Iran's industrial plants are facing severe operating
problems. The General Motors plant, which has been
operating at less than 50 percent of normal, is expected
to run out of assembly kits within two months; Renault
and Sunbeam were operating at below 40 percent and 50
percent, respectively.
30 April 1980
 The blocking of Iranian assets has caused a number
of loans to be declared in default. Although the gov-
ernor of the Central Bank in late March stated Iran's
intentions to service its foreign debts, Iran has in-
tentionally withheld payment to US banks.
Japanese and British banks recently have expressed
concern about overdue payments on Iranian loans, and
Japanese pressure to secure payment commitments did not
elicit a positive response from the Central Bank. While
non-US creditors are pointing out in strong language
the implications of default, in most cases they have not
acted to close out loans.
Sanctions-Related Prospects
In the event of an imposition of economic sanctions
by Western Europe and Japan, Iran would not be willing
or able to redirect much of its trade to Soviet Bloc
countries, which now account for only 5 percent of Ira-
nian imports. Iran's priority needs are for food and
other agricultural products which the Bloc countries
would be hard pressed to provide.
Iran would first attempt to fill its industrial
materials requirements through transshipments from third
30 April 1980
 Overland Transport Routes Into Iran
 parties, although Communist countries could supply some
goods. Maintenance of Iran's plant and equipment--almost
entirely of Western origin--requires Western-made com-
ponents.
The Bloc would not be a major market for Iran's
exportable oil, in large part because of Soviet and East
European hard currency constraints. Iran could find a
substantially increased market for more of its oil in the
USSR and Eastern Europe only if the Soviets agreed to
export more of their own oil to the West and consume
Iranian crude in its place.
In the event of a blockade of Iranian ports, Tehran
would have no choice but to turn to the USSR to help
meet its needs. Soviet overland rail and highway routes,
which would have to handle all Iranian imports, would
be put under severe strain just to transport the annual
Iranian food requirements of 4 to 5 million tons. Dis-
organization and civil unrest in Iran have held the flow
of goods far below even this level for months. Moving
increasing quantities of goods across the border would
require a large diversion of freight cars and other
scarce equipment in the USSR.
15
30 April 1980
 _!F0p 8eort-_