CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A028200010013-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 26
• Document Creation Date: December 21, 2016
• Sequence Number: 13
• Content Type: REPORT

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Top Secret
State Dept. review
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DIA review(s)
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National Intelligence
Bulletin
DOE review
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NSA review completed
Top Secret
N2 669
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National Intelligence Bulletin
October 28, 1975
CONTENTS
SYRIA-ISRAEL: Syrian preparations
would allow hostilities on short notice . . . . . . . . . . . . . 1
LEBANON: Extremists
expand area of hostilities . . . . . . . . . . . . . . . . . . . . 3
PORTUGAL: Government authority
appears to have increased . . . . . . . . . . . . . . . . . . . . 5
SPAIN: Officials focusing
attention on post-Franco period . . . . . . . . . . . . . . . . . 6
SPANISH SAHARA: Spain and
Morocco optimistic about agreement . . . . . . . . . . . . . . . 8
TURKEY: Demirel seeks coalition
consensus on US bases and Cyprus . . . . . . . . . . . . . . . 10
USSR-EGYPT: Moscow levels harsh
attack on Egypt and Sinai I I . . . . . . . . . . . . . . . . . . 12
USSR-CHINA: Moscow
reasonably relaxed regarding China . . . . . . . . . . . . . . . 13
VIETNAM: Communists agree
to repatriate 1,600 refugees . . . . . . . . . . . . . . . . . . 14
PORTUGUESE TIMOR: Situation report . . . . . . . . . . . . 15
FOR THE RECORD . . . . . . . . . . . . . . . . . . . . . 16
ANNEX: Egyptian President Visits Washington
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The Israeli-Syrian Disengagement Lines
Syria
-Line A-Israeli disengagement line
:Line A-1-1sraeti civilians only
line B-Syrian disengagement line
UYDOF-United Nations disengagement
lbserver force
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National Intelligence Bulletin
October 28, 1975
The Syrians continue to take military measures that would allow them to start
some form of hostilities on short notice.
There are also an increasing number
of rumors in Damascus that President Asad is planning to allow the UN observer
forces' mandate to lapse at the end of November and to start a limited war of
attrition on December 1.
At a minimum, the military moves and rumors are part of a calculated effort by
Asad to put pressure on the US and Israel to seek some way of satisfying Syria's
negotiating demands before the UN mandate expires. Asad,.however, knows that the
US and the Israelis have been expecting him to do just that. In order to pose a
credible threat, Asad would want to create the impression that he is prepared to go
beyond mere military posturing and that he regards some form of limited military
action as an acceptable risk.
If these pressure tactics are not successful, he could well rationalize the
necessity for some form of war of attrition or a limited seize-and-hold operation,
banking on the Israelis to react with restraint for fear of jeopardizing the Sinai
accord with Egypt. Many Syrians believe that they obtained satisfactory
disengagement terms in May 1974 only after waging a three-month war of attrition.
Asad is under no illusion that he can inflict a major military defeat on the Israelis.
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National Intelligence Bulletin
October 28, 1975
Although Tel Aviv is concerned about the Syrian moves, it is perplexed about
Syria's intentions. The Israelis appear to have focused on November 30 as the time
of most likely danger and are not expecting the Syrians to take action before then.
Syrian forces, however, have the capability to initiate military action at any time
because they are deployed close to the front.
Meanwhile, Israel may have taken some limited military measures to meet any
Syrian threat. A US military attache in Tel Aviv reported seeing a larger than usual
number of troops and reservists returnin to militar units Sunda Activit at
Israeli military camps appeared normal.
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National Intelligence Bulletin
October 28, 1975
The fighting in Beirut entered a new stage over the weekend, as Christian and
Muslim extremists for the first time engaged in sustained battles for control of
heretofore neutral areas in central Beirut. Previously, the two sides had stayed
generally within their respective enclaves, shelling nearby areas controlled by their
opponents and venturing. out only for hit-and-run bombing attacks in the
commercial areas of the city.
The US and some other foreign embassies have been hit in the widespread
firing. Predictably, this has prompted several embassies to speed the evacuation of
nonessential personnel from Lebanon. Approximately half of the 7,000 Americans
normally resident in Beirut have already departed.
The expansion of the area of hostilities has reduced further the limited area
over which the Lebanese government has effective control. Prime Minister Karami
announced the eighth in the most recent series of cease-fires after an emergency
cabinet meeting Sunday afternoon; his call was immediately and widely disregarded.
center th international airport, to control selected government buildings and
installations in Beirut, and in a very limited way to replace internal security service
units on the periphery of the city.
The spread of fighting over the weekend apparently represented only the
continuing deterioration of the general security situation rather than the
introduction of any additional groups into the hostilities. The major fedayeen
groups, including Fatah and Saiqa, reportedly are supplying weapons to Lebanese
and Palestinian extremists, but they have not yet become directly involved in the
fighting. Fatah headquarters in Beirut continues to admonish all Fatah units to
respect the cease-fire.
Parliament tried twice over the weekend to convene, but failed for lack of a
quorum. Many members stayed away because of the security problem, others
probably to forestall a widely anticipated public split between Karami and Shamun.
So far, the army has been used only to secure the road from the city
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National Intelligence Bulletin
October 28, 1975
The Prime Minister has been inching toward an open challenge to Shamun and
President Franjiyah, and any comprehensive parliamentary debate could end in a
vote of confidence in Karami or even introduction of a motion demanding
Franjiyah's resignation.
The majority of the parliament is Christian, but Karami may now be prepared
to gamble that he would win a confidence vote. At the same time, he may believe he
could force a showdown that would, at a minimum, prompt Muslims and leftists,
including Socialist leader Kamal Jumblatt, to rally behind him. He may see this as a
way to oblige moderate Christians indirectly to criticize Franjiyah by acknowledging
that Karami is preferable to any likely alternative. Despite his inability to end the
fighting, Karami apparently retains the important backing of the Syrian government
and the Palestinians. He has steadily gained strength among Lebanese at Franjiyah's
expense.
Franjiyah almost certainly has been counseled by right-wing extremists to resist
any move by Karami to expand his power further or to reduce the President's.
It is also possible that if the security situation continues to deteriorate,
Christian army officers will be moved by a sense of frustration or the President's
ineptness to seize control of the government, with or without Franjiyah's
acquiesence. In the past, such thoughts would have been discarded by awareness
among high-ranking officers that any such move would lead to civil war and to
widespread divisions within the army.
These officers could soon conclude that Lebanon is already in civil war, and
that there is more to lose by waiting than by acting.
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National Intelligence Bulletin
October 28, 1975
The government appears to have emerged from the events of the past few days
with its authority somewhat strengthened, despite a series of terrorist bombings and
a spate of coup rumors.
On his arrival Saturday in Porto, where he went to shore up the regional
military commander in the face of leftist attacks, Prime Minister Azevedo said that
authority and discipline would be reinstated in Portugal "at any price." Although
Azevedo's words at the pro-government rally were not as uncompromising, the
Prime Minister's trip to Porto signaled his strong support for the northern
commander's efforts to restore military discipline. Such efforts were undermined
earlier this month by Army Chief of Staff Fabiao when he acquiesced to the
demands of rebellious soldiers.
The Prime Minister said his visit to Porto was the first in a series to various
parts of the country, which presumably he will use to mobilize popular support for
his government. Although the Communists urged their supporters not to attend
Azevedo's rally, his appearance in Porto drew about 100,000 people. This number
contrasts sharply with an anti-government demonstration last week in Lisbon, which
drew only about 13,000.
In a further positive move, the government on Friday announced new
.
commanders for the Republican National Guard and the civil police
The military alert announced on Friday ended abruptly on Saturday with the
explanation that the country is now calm. Whatever the reason for the alert, it
appears to have been skillfully used by the government to at least temporarily seize
the initiative and marshal its forces.
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National Intelligence Bulletin October 28, 1975
Most Spanish officials do not believe General Franco will recover from his grave
illness and have focused their attention on the post-Franco period.
Various elements of what has been the illegal opposition during the Franco era
have indicated that they are prepared to act in a cooperative, responsible manner
during the initial phase of the transition period.
--A leading official of the Communist-dominated Workers' Commissions told
the US labor attache that they have spread the word to their membership to
avoid strike activity and other protest action during the transition.
--Felipe Gonzalez, secretary general of the Spanish Socialist Workers Party, told
US Ambassador Stabler that his party will give Prince Juan Carlos a chance to
open up the political system. A Basque Socialist Party official echoed these
sentiments, and Gonzalez believes that Spanish Communist Party leader
Carrillo also supports this attitude, despite the contradictory statements made
by Communist Party officials.
--An intimate of Tierno Galvan, leader of the Popular Socialist Party and a rival
of Gonzalez', claims that his party will not make trouble for Juan Carlos, at
least initially.
These comments strongly suggest that a majority of political groups believe
that full-scale opposition tactics at this time would only prejudice their long-term
interests and invite repression. Their future course of action, however, will depend
on their assessment of Juan Carlos' performance.
The first clues as to Juan Carlos' intentions should appear in the nationwide
speech he is expected to make after the transfer of power ceremonies. He hopes to
form a new government, and its composition will be used by opposition groups to
measure how far and how fast Juan Carlos is prepared to press for reform.
The new head of state will not be able to satisfy all shades of political opinion,
but he has a good chance of winning the support of a commanding majority if he
develops a policy that clearly departs from the tenets of Franco's rule without
appearing to be an abrupt rupture from that era. Thus, he will have to make some
progress toward establishing a freer political system, but only gradually, and with
clear indications that the evolution is being tightly controlled by competent
authorities.
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National Intelligence Bulletin
October 28, 1975
Inevitably, there will be some trouble regardless of how skillfully Juan Carlos
manages this process. Fifteen alleged members of the far-left terrorist Antifascist and
Patriotic Revolutionary Front were arrested over the weekend; this group will
continue, and may intensify, its terrorist campaign when Juan Carlos assumes power.
Violence from the extreme right may also increase. On Sunday, a right-wing
group called the Death Commandos publicly ordered 17 prominent Catalans
associated with leftist political groups to leave the country 24 hours after Franco's
death or face death themselves.
The military, and to a greater extent the police forces, are maintaining a
low-level alert status.
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National Intelligence Bulletin
SPANISH SAHARA
October 28, 1975
Spain and Morocco are optimistic that they can agree on a settlement of the
Spanish Sahara. Moroccan Foreign Minister Laraki was in Madrid for talks fate last
week, and a high Spanish official told the US embassy that when the Moroccan
negotiators returned to Madrid soon, possibly this week, progress would be evident.
A dispute in the Spanish government between Prime Minister Arias' policy to
cede the Sahara to Morocco in return for guarantees regarding Spanish interests in
the territory and Foreign Minister Cortina's insistence on granting self-determination
was settled by discarding Cortina's policy, according to the official. The source
claimed the government considered the present problem to be between Spain and
Morocco and not between Spain and Algeria. Previously, Spain had insisted on
Algerian agreement to avoid a Moroccan-Algerian clash when Spain withdrew. The
Spaniards are being very tight-lipped about the actual terms of the proposed
settlement. If Algeria has a problem with Morocco, that is a separate matter.
The Spaniards want to settle the Sahara problem quickly, before the Moroccan
march to the Sahara proceeds much further. The Spanish official said under no
circumstances could Spain let the marchers enter Saharan territory. Spain may also
want to have a settlement before the post-Franco era gets under way. To facilitate a
settlement, a bill has been submitted to the Cartes which would empower the
government to take any action necessary to decolonize the Sahara.
Spain apparently wants the UN's blessing. The information minister also stated
that Spain stood by its policy, communicated to the UN Secretary General last May,
to decolonize under UN auspices. Such decolonization, however, could in the
Spanish view include handing the territory over directly to the Moroccans.
Moroccan Foreign Minister Laraki at his departure October 25 commented that
he was "very satisfied" with the conversations in Madrid. He said the two sides
discussed ways of settling the dispute peacefully in accordance with the UN Security
Council resolution of October 22, and that Spain and Morocco were "on the road to
agreement." After briefing King Hassan in Marrakech, the foreign minister made a
quick trip to Mauritania on October 26. His Mauritanian counterpart reportedly
arrived in Morocco yesterday for talks with the King. Both countries claim the
Spanish Sahara and apparently have an agreement to partition the territory.
Meanwhile, diplomatic contacts are continuing in an effort to avert a crisis over
Morocco's mass march to the Spanish Sahara. King Hassan, in an interview broadcast
yesterday, repeated his intention to proceed with the march, although Rabat is
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National Intelligence Bulletin
October 28, 1975
delaying the final leg from the border to El Aaiun, the Spanish territory's capital.
According to press reports from Marrakech, King Hassan now plans to lead the
march into Spanish Sahara in about two weeks.
UN Secretary General Waldheim, by a recent Security Council resolution
authorizing him to undertake immediate consultations with the parties involved,
spoke with King Hassan October 26 and went on to Mauritania the same day. He
was in Algiers yesterday and arrived in Madrid last night. Tunisian and French
diplomats were also in Morocco over the weekend to urge Hassan to exercise
restraint.
In the Spanish Sahara, evacuation of Spanish civilian and military dependents is
said to be under way. The Polisario Front, a Saharan political group supported by
Algeria, held a large demonstration in El Aaiun October 26 in support of
independence for the territory.
. Algeria is increasing its press attacks against Moroccc to counter King Hassan's
claim to Spanish Sahara and respond to virulent anti-Algerian attacks being printed
by opposition political parties in Morocco. The Algerians are giving heavy play to
adverse world press reaction to Morocco's planned march. They are openly
questioning how bilateral negotiations between Rabat and Madrid,, "an be reconciled
with the Security Council resolution last week that called for a'dialogue among all
interested parties, a formulation that would allow AlgeriaajVparticipation in.any
talks. The Algerian press also has pointedly emphasized that Morocco's historically
"non-existent" territorial claim to Spanish Sahara was recently questioned in an
advisory opinion by the International Court of Justice.
At the UN, Algerian Foreign Minister Bouteflika can be expected to argue that
the recent Court opinion clearly supports self-determination for the Spanish Sahara.
He is also likely to call for consultations with the people of Spanish Sahara, as
recommended in a recent UN fact-finding report.
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National Intelligence Bulletin
October 28, 1975
Turkish Prime Minister Demirel is still trying to reach a consensus within his
coalition that would allow him to act decisively on both the bases issue and the
Cyprus problem. Negotiations on the status of the US bases are scheduled to begin
this week; no date has been set to resume the talks on Cyprus.
The National Security Council meeting on October 20 agreed to recommend
that talks be opened with the US on the bases and to try again for a solution to the
Cyprus problem. The cabinet has yet to meet to consider the Council's
recommendations, and when it does, Demirel's most troublesome coalition partner,
Necmettin Erbakan-who feels on stronger ground there than in the Security
Council-may still raise objections to the Council's recommendations.
Erbakan appears determined to maintain his obstructionist position within the
government despite his party's substantial losses in the recent senatorial elections.
relations between Demirel and Erbakan have
deteriorated since the election. rbakan's party has openly threatened to boycott
cabinet meetings until Demirel accepts its conservative policies reiterated by the
leadership on October 20.
That threat, which was accompanied by Erbakan's reiteration of his
uncompromising position on Cyprus, sparked a wave of speculation about the
possible break-up of the coalition. The government will probably survive, but there
is likely to be continued bickering between Demirel and Erbakan in the coming
weeks, with the Prime Minister's ability to act decisively hanging in the balance.
Demirel is trying to reduce Erbakan's influence in the coalition by wooing
dissident parliamentary deputies from minor parties on the right-including
Demirel is unlikely, however, to win enough support through these maneuvers to
offset the possible defection of Erbakan from the coalition. The Prime Minister is
said to be also considering offering more ministries to Salvationist deputies in
exchange for a softening of Erbakan's position on the Cyprus question.
In approaching sensitive foreign policy issues, Demirel will also be keeping an
eye on opposition leader Ecevit and the military. Ecevit's strong showing in the
election may make him more aggressive and reluctant to give Demirel the latitude he
needs to deal decisively with these problems. Their views on Cyprus are not far
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National Intelligence Bulletin
apart, but Ecevit continues to take a hard line on the US bases.
October 28, 1975
The military wants to consolidate gains made last summer on Cyprus, restore
relations with the US, and ease Turkey's sense of international isolation. Military
leaders generally agree that the government's continuing inaction is adding to these
already sensitive problems. They may already have put pressure on the
politicians-Demirel in particular-to reach some solution on the Cyprus issue and
move to normalize relations with the US.
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National Intelligence Bulletin October 28, 1975
The USSR issued its strongest attack to date on Egyptian policies and Sinai I I
on the eve of President Sadat's arrival in the United States.
Pravda on Saturday, in an article signed "Observer," indicating top-level
Kremlin endorsement, bitterly rebutted Sadat's allegations of less than wholehearted
Soviet diplomatic and military support. The article seemed aimed at getting
Moscow's case on the record and discrediting Sadat's arguments for dealing with the
Pravda was particularly resentful about Egyptian public criticism of Soviet
military aid, saying it was "utter distortion" to suggest that all Moscow had sent to
Egypt during the 1973 war were "several bagfuls of spare parts." It also
demonstrated continuing Soviet nervousness about the future of the Soviet-Egyptian
treaty, saying that Sadat himself had called for the accord.
In an apparent allusion to Sadat's plans to discuss US military assistance during
his Washington visit, Moscow reminded the Egyptians that their experience with the
West in the early 1950s demonstrates that "one would hardly expect imperialist
states to show concern for building Egypt's military strength."
Despite its scathing tone, the article did not attack Sadat by name and kept the
door open for better Soviet-Egyptian ties. Pravda, however, clearly put the burden
on Egypt for initiating such an improvement, saying that cooperation cannot
develop if one party follows policies that undermine it.
In the context of attacking Sadat's reliance on Washington for a Middle East
settlement, the article issued Moscow's most authoritative exposition of its
opposition to Sinai 11. Although toughly worded, the statement essentially expressed
publicly what the Soviets have been saying privately. It particularly chastises the
provision for US observers in the Sinai, calling it "fraught with far-reaching,
dangerous consequences."
Although Pravda reiterated the usefulness of the Geneva conference as the
forum for resolving the conflict, it did not completely reject further partial steps
toward a settlement under the Geneva umbrella. The impression created is that
Moscow does not close out any practical options for the next ste in Middle East
diplomacy, as long as it is undertaken with Soviet participation.
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National Intelligence Bulletin
October 28, 1975
The Soviets continue to take some fairly sharp propaganda shots at the
Chinese, but their public and private commentaries on the relationship suggest
stalemate rather than further deterioration.
On October 22, Pravda carried an article accusing the Chinese of escalating
their anti-Soviet campaign. The article attacked the Chinese for failing to normalize
relations with Moscow, charging that Peking had dragged out negotiations on the
1975 Sino-Soviet trade agreement and made it impossible for the two sides to hold
their annual river navigation talks. It attributed China's increased hostility toward
Moscow, however, to Mao's frustration over the failure of his domestic and foreign
policies.
Moscow's decision to publicize Sino-Soviet problems at a time when Sino-US
discussions were in progress is very unusual. In the past, the Soviets have generally
sought to convey an upbeat impression of Sino-Soviet relations.
Moscow's handling of Secretary Kissinger's visit suggests that the Soviets are
not as concerned as they once were about China's ability to use its contacts with
the US against the USSR. For the first time, Soviet propaganda has contrasted
China's opposition to detente-related development with the position taken by the
Secretary. Moscow has especially noted Sino-US differences in assessing the results
of the recently concluded European security conference.
Privately, Soviet officials, including China expert Mikhail Kapitsa, have been
playing down the significance of Moscow's harsher propaganda line on China ever
since it appeared in mid-August. In a recent conversation with Ambassador Stoessel,
Kapitsa ran through the litany of stalemated substantive issues, noting that:
--the volume of Sino-Soviet trade will probably decline in the coming year,
--the annual river navigation talks were not held because of Peking's insistence
on discussing broader issues,
--no progress has been made in the border talks, although the chief Soviet
negotiator might return to Peking in a few months,
--no access had been granted to the Soviet helicopter crew that China has
detained since March 1974.
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October 28, 1975
Meanwhile, the Soviet and Chinese reconnaissance flights, which have
prompted speculation about heightened tension along the border, continue. We have
no evidence of any border incidents, however, and Kaoitsa said there had been nnne
The Vietnamese communists have agreed to repatriate some 1,600 refugees
who set sail from Guam nearly two weeks ago.
Hanoi announced over the weekend that the communist government in South
Vietnam, while deploring Washington's decision to allow the refugees to depart
Guam without Saigon's permission as a "blatantly provocative" violation of
Vietnamese sovereignty, had nevertheless decided to accept the refugees on
humanitarian grounds-"this time only." The North Vietnamese indicated, however,
that all future requests for repatriation will be decided by the Saigon regime alone
on a case-by-case basis.
The communists remain highly suspicious of the refugees. Communist air and
naval units immediately surrounded the ship carrying the refugees when it arrived
off the South Vietnamese port of Vung Tau on Saturday. Moreover, intercepted
communist military communications advocated "capturing the refugees under the
terms of unconditional surrender."
Thus far, we have no evidence that the communists have actually permitted any
of the refugees to disembark. The ultimate point of debarcation is also unclear
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National Intelligence Bulletin October 28, 1975
Indonesian reinforcements have reached the front lines in Portuguese Timor,
following an unsuccessful Fretilin counterattack against Lahamea. The arrival of
reinforcements and continuing aerial reconnaissance suggest that a new Indonesian
offensive against Atabai and Bobonaro can be expected soon.
The Fretilin counterattack on October 23 was beaten back by Indonesian
heavy weapons fire, possibly including PT-76 tanks committed earlier in the week.
Indonesian communication intercepts indicate that Fretilin is being troubled with
undisciplined personnel and a lack of trained heavy weapons personnel.
A second infantry battalion from Java has been dispatched to Timor. Two
companies were airlifted in and deployed immediately to the front. The rest of the
battalion with attached artillery has sailed on a merchant vessel. Jakarta has
consistently underestimated the strength of the Timorese leftists, and further
reinforcements may be necessary.
On the political scene, Jakarta has agreed to meet with Portuguese diplomats in
Rome on November 1. Indonesia will undoubtedly continue to insist that the
Portugal regain control of Timor or authorize Indonesian intervention. Lisbon still
hopes for UN or multination intercession, but these hopes are growing increasingly
dim. Indonesia is continuing to deny invasion, but the continued flow of
reinforcements implies that military pressure will increase until a bid for integration
from the Indonesian-backed Timorese factions can be used to justify unification
with Indonesia.
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National Intelligence Bulletin
FOR THE RECORD
October 28, 1975
CUBA-US: A US Coast Guard aircraft on a search-and-rescue mission south of
Florida was harassed by Cuban fighters Sunday. After intercepting the US aircraft
about 40 nautical miles northwest of the Cuban coast, the fighters made numerous
close passes and rocked their wings indicating that the Coast Guard aircraft should
follow them. The US aircraft descended to a very low altitude and returned to
Florida with the fighters following for some distance.
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National Intelligence Bulletin
October 28, 1975
USSR-YUGOSLAVIA: The Moskva-class guided-missile helicopter ship
Leningrad, a "destroyer," and a submarine are scheduled to visit Dubrovnik,
Yugoslavia, from October 30 to November 5. While not identified, the submarine
will most likely be an F-class, and the "destroyer" will probably be a Kara-class
guided-missile light cruiser. There has been one previous visit to Yugoslavia by a
Kara-class ship in 1973 and one by a Moskva-class ship in 1974. Currently, an F-class
submarine is undergoing overhaul in Tivat. These port visits are indicative of
Moscow's intentions to maintain cordial military ties with Yugoslavia.
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National Intelligence Bulletin October 28, 1975
Egyptian President Visits Washington
President Sadat's isolation in the Arab world as a result of the second Sinai
agreement affects his domestic position, and it is here that he will look to the US for
insurance against an erosion of his support at home.
Despite criticism from Egyptian leftists, who instinctively oppose Sadat's
policies, especially the disengagement agreement, the majority of Egyptians
currently support the agreement and back Sadat.
--They had been growing restive over the continuing no-war, no-peace situation
and are pleased that demonstrable progress has been made toward a return of
more Egyptian territory.
--They anticipate that a respite from preparations for war will give the
government time to concentrate on revitalizing the economy and will
encourage foreign investors who have been deterred by the possibility of war.
--They rally around Sadat precisely because the other Arabs are criticizing him
and the agreement so vehemently.
A Strong Prop
Indeed, the criticism by outsiders is, in a way, Sadat's strongest domestic prop
at the moment. Egyptians think of themselves as a bit better than other Arabs and
do not like being told how to run Egyptian affairs by brethren who have not always
been successful in running their own affairs.
The Egyptians believe, with a touch of self-pity, that while they have borne the
brunt of four wars in the service of other Arabs, the others have profited with arms
and oil money in abundance. They deeply resent that they or their President should
be tagged an Arab traitor.
Dangers, for Sadat, nonetheless, lurk in the very things that now work to his
advantage. The current Egyptian satisfaction with the progress made in negotiations
will wane as time passes, and it is likely that satisfaction will turn to impatience as
the months pass and Sadat does not press for more negotiations for the next few
years.
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If the few years do not bring either negotiated territorial returns or war,
discontent may become a problem within the military. Senior military officers
recognize that Egypt probably could not have succeeded in taking by force the
territory it has retrieved through negotiation. They are, therefore, generally satisfied
with the disengagement agreement.
Many younger officers, however, seem to have an exaggerated notion of
Egypt's military capabilities and apparently believe that Egypt might have gained
more militarily.
Discontent in the armed forces may be magnified if the virtual termination of
Soviet military deliveries is not compensated for by a substantial influx of
equipment from other sources.
Economic Expectations
Sadat faces a difficult time economically. While the disengagement agreement is
welcomed for the economic benefits that are expected to flow from it, Sadat will be
in trouble if the benefits are not soon evident to the man in the street, who is weary
of standing in food lines, finding other essentials in short supply, and paying high
prices for what he does obtain.
The government has raised expectations to a high pitch, and it will be
hard-pressed to fulfill them. Shortcomings here will provide leftist agitators fertile
ground for fomenting political protest.
Sadat faces another internal danger because of the position in which the
disengagement agreement has placed him with other Arabs. Although he is currently
the object of approbation by Egyptians, who applaud his vehement responses to
Arab criticism, these same Egyptians may eventually come to regret that Sadat has,
through the second Sinai agreement, allowed Egypt's leadership of the Arab world
to diminish.
This sentiment is already apparent among leftists in Egypt, and Sadat could
become much more vulnerable to charges of destroying a legacy of Arab leadership
that Nasir devoted his life to building up. Even those Egyptians who support Sadat
may come to believe, through an emotional evocation of the hero Nasir, that things
were somehow better before Sadat came along.
Economic Aims
Since late 1973, President Sadat has been trying to overcome six years of zero
growth and declining living standards. He aims to overhaul Egypt's highly inefficient
economic structure, entice foreign investment, and reorient the economy so it can
begin to compete in Western markets.
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Sadat has rebuilt much of the war-damaged Canal Zone and stabilized the
Egyptian standard of living. These successes have been financed by the rich Arab
states, whose assistance jumped from $650 million in 1973 to $2 billion in 1975.
This money allowed the value of Egyptian imports to rise 90 percent in 1974
and some 60 percent this year. As a result, the 1975 current-account deficit will
likely reach $3 billion, one of the largest among the developing countries.
Sadat must, however, maintain economic momentum. A continuation of the
5-percent growth rate will require financial assistance equal to 1975 and for at least
the next few years. Egypt will earn foreign exchange from the Suez Canal and from
Sinai oil, but the increases will just offset expected hikes in imports.
Sadat so far has been unable to line up the financial support needed. The rich
Arabs have kept him on hand-to-mouth basis, and this has deterred Egyptian
long-term planning and led to excessive short-term commercial borrowing, designed
in part to force Arab donors to rescue Cairo from its financial straits.
This financial brinksmanship has in turn reinforced Arab distrust of Egyptian
administrators and further delayed long-term aid.
Unable to secure a satisfactory financial commitment from other Arabs, the
Sadat government has sought since last year to extend the moratorium on military
debt to the USSR. Moscow so far has refused. Egypt is in arrears, and shipments of
Soviet military goods have all but stopped.
Failure to reach a financial accommodation with the USSR would be costly to
Egypt in the absence of further Western or Arab assistance. If Soviet repayment
terms are to be met, Cairo must divert to the USSR $300 million annually in goods
now being shipped to the West. Continued refusal to pay the USSR may threaten
Egyptian exports to the USSR. Because Egypt would have a hard time marketing
these goods elsewhere, an additional hard-currency outlay of perhaps $300 million
would be required to replace Soviet with Western goods.
Looking to the US
Sadat will look to the US for the economic and military aid he believes will be
needed to shore up his position against possible domestic threats.
On the economic side, he probably will seek a multi-year economic aid
commitment, large enough to serve as an example for other donors. He will also
want sufficient technical and administrative support, through either a bilateral
agreement or a consortium arrangement, to inspire substantial long-term Arab aid
and investment.
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On the military side, he will ask the US to lift its embargo on arms shipments
to Egypt. The fact that the US delivers arms to Israel does not in itself bother Sadat;
he recognizes this as a necessary ingredient in Washington's ability to press Israel
diplomatically.
What does bother him is that the US does not deliver arms to Egypt. This uneven
treatment, this lower priority accorded Egypt, is in his mind almost the only thing
still wrong in the US-Egyptian-Israeli triangle.
He does not expect parity, and he does not want to be dependent again on a
single source of arms. He does hope for some US military equipment, both as a
symbol that Egypt is as important to the IJS as is Israel and as a means of righting
what he sees as the heavy imbalance caused by Israel's rearmament when Egypt's
prime source of arms has been all but cut off.
Sadat needs US arms for reasons more important than simply his frame of
mind. He has frequently been subject to criticism from the Egyptian military for
endangering Egypt's supply of Soviet equipment. Unless he can obtain a relatively
steady flow of arms, preferably from the US, he is likely to come under attack for
seeming to condone US efforts to reinforce Israel's military su eriorit while
allowing Egypt to lapse still deeper into military inferiority.
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Top Secret
Top Secret
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