NATIONAL INTELLIGENCE DAILY WEDNESDAY 23 OCTOBER 1985

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005500158
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 24
• Document Creation Date: June 24, 2015
• Document Release Date: September 9, 2010
• Case Number: F-2007-00450
• Publication Date: October 23, 1985

Wednesday
23 October 1985
APPROVED FOR RELEASE^ DATE:
07-22-2010
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 Yugoslavia: Disappointing Trade Performance
Syria-Arab States: Possible Summit
South Africa: Violence in Western Cape Province
India-Bangladesh: Agreement on Sharing Water
Senegal-US: President Diouf's Visit
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 WEST GERMANY-POLAND: Parties' Statement on Security
Representatives of the West German opposition Social Democratic
Party and the Polish Communists plan to issue a joint statement on
confidence-bull ' n visits Bonn
on 7 November, The statement
is to repeat standard Social Democratic calls for greater East-West
collaboration on security, including a nuclear weapons freeze,
nuclear- and chemical-weapons-free zones, and the nonmilitarization
of space. The two parties also will demand an end to all nuclear tests
and reductions in offensive conventional weapons in central Europe.
Comment: The Social Democrats apparently are determined to
continue their talks with East European Communist parties even
though such contacts may make it harder for Johannes Rau, the
party's prospective chancellor candidate, to deflect Christian
Democratic charges of undermining the Western Alliance. The Social
Democrats probably are mainly Interested in upstaging the
government on Ostpolitik-especially because polls show far greater
support In West Germany for improving relations with the East than
for strengthening NATO defenses. Warsaw may be using what it sees
as growing Social Democratic strength to induce Chancellor Kohl's
government to give renewed assurances that it respects the legal
validity of the German-Polish border, among other issues.
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 Latest official figures show that Yugoslavia is falling short of IMF
targets for hard currency balance-of-payments performance this year.
Despite improvements in recent months, poor trade results early this
year and smaller-than-expected growth in tourism saddled Belgrade
with a current account deficit of $77 million for the first seven months
of 1985, as compared with a 'surplus of $225 million for the same
period last year. The Yugoslavs also suffered a $393 million drain on
the capital account. To cover shortfalls, Belgrade has had to draw
down its hard currency reserves to a level comparable with that
during its liquidity crisis in 1982.
Comment: Although its performance apparently improved in August,
Belgrade is unlikely to meet the IMF targets of an $880 million current
account surplus and a $200 million increase in reserves for this year.
Belgrade may try to cut back imports to improve its position, but this
would probably depress its industrial performance of its industry.
Failure to achieve the IMF goal will hurt prospects for both the
multiyear debt-rescheduling agreement from Western governments
and an end to close IMF supervision, which Belgrade hopes to
negotiate next year
 The cordial tone of the reconciliation talks in Riyadh between Syria
and Jordan may pave the way for an Arab minisummit sponsored by
the Saudis. The Prime Ministers of Syria and Jordan concluded two
days of talks on Monday with a three-point accord affirming their
willingness to normalize relations and pursue
Ian as envisioned at the Fez summit In 1982.
Comment: King Hussein wants to improve relations to reduce the
threat of Syrian-sponsored terrorism against Jordanian interests.
President Assad probably believes the Hussein-Arafat initiative has
been fatally weakened by recent events that damaged Arafat's
international standing. Assad's willingness to seek an
accommodation with Jordan-and possibly Iraq-probably also is
calculated to obtain further Saudi aid and perhaps to seek alternative
 Senior officials in Pretoria are divided over extending the s
emergency to new areas including western Cape Province,
The Province is now experiencing its second
week of increased violence. New riot control equipment-including
water cannons-has been sent to the area to combat violence by
militant youths, including attacks on white-owned property. Nine
expressed their support for youths involved in the unrest.
Comment: Pretoria is unlikely to extend emergency powers to the
western Cape because it would provoke international criticism and
probably aggravate unrest in the townships as the government
prepares for parliamentary byelections later this month. Moreover,
the government can take more severe security measures without the
formality of extending the state of emergency. Whites in the area are
likely to resort to vigilantism if the violence continues to spread
 Drainage basin
Canal
s ?
 Prime Minister Gandhi and President Ershad agreed on a formula to
settle problems on Shari
summit in the Bahamas.
the two leaders ecide to extend 1982 on
snaring water from the Ganges River and to set up a joint commission
to study ways to increase the flow of the river. The study is to be
completed in a year, after which i and Ershad will meet again to
work out a new agreement.
Comment: The agreement illustrates Gandhi's efforts to improve
India's relations with its neighbors. Bangladesh will be heartened by
his willingness to solve the water problems, long an irritant In bilateral
relations. The two sides have conflicting ideas on how to increase the
river's flow, however, and negotiatiop! within the inint cnmmlcsinn
probably will take longer than a year
 Committee ... Khuri distressed by collapse of planned meeting of
UK Foreign Secretary and PLO-Jordanian group departure
would weaken Arafat's moderate support.
Iraq diverting more imports to
ports outside Persian Gulf to prevent Iranian seizures ... use of
ports in Turkey, Jordan, Saudi Arabia will increase costs and
delays.
Ireland likely to withdraw contingent from UNIFIL within six
months if Israel remains In southern Lebanon ... Dublin believes
Israeli presence endangers its unit by attracting terrorists ... also
- Peru to step up antinarcotic efforts this month ... in reversal of
policies, military will support police operations in major coca-
growing area ... will test commitment to drug control by President
 integrated microcircuits being used in scientific satellite ...
suggests equally advanced technologies to
spacecraft that may be tested in 1987-88.
Soviet-produced very-large-scale
- Philippines First Lady Imelda Marcos leading religious and
parliamentary group to Moscow Saturday ... requested audience
with high-level Soviet officials, including Gromyko and
- New finds increased January-September production at China's
second-largest oilfield by almost 24 percent over same period in
1984 ... Beijing investing $8 billion to double field's output by
11.
r
 To,, See. 1
Special Analysis
with economic difficulties and an 1MF austerity program.
Senegal's economic development has been stunted by recurrent
drought, a limited number of products for export, and
mismanagement of the country's scarce resources. Consumption
continues to exceed production, necessitating IMF and other
international assistance as well as frequent debt reschedulings. As a
result, Senegal receives the largest amount of foreign aid in French-
Diouf understands the need for economic reform and took politically
risky steps in April to remove government subsidies on basic
consumer goods and to Impose other measures to liberalize the
economy. Political constraints, rapid population growth, and the
Deteriorating economic conditions have reduced Diouf's popularity to
its lowest point since he took office in 1981. Government officials and
special interest groups, including labor unions and powerful Muslim
brotherhoods, are likely to obstruct reforms that threaten their
privileges. Although reaction to austerity so far has been nonviolent,
Diouf is suspicious of Soviet, Libyan, and Iranian activities in the
region and believes that only strong Western support can adequately
protect West Africa. Although Diouf will continue his moderate, pro-
Western foreign policy, he will need large amounts of Western
assistance to keep his country afloat. France Is Senegal's principal
protector and economic benefactor, but it lost some credibility
following its withdrawal from Chad last year, and Diouf is likely to look
Increasingly to the US for support
t
? .