NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A028400010030-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 20, 2016
• Document Release Date: August 2, 2005
• Sequence Number: 30
• Publication Date: December 17, 1975
• Content Type: REPORT

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Top Secret
National 1 ntel 1 igence
Bulletin
State Department review completed
Top Secret
o ss g
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National Intelligence Bulletin
December 17, 1975
USSR: Serious economic problems created
by disastrous harvest and other shortcomings 1
EC-CHINA: Peking to talk
with EC on possible trade pact 3
LEBANON: Reaction to Karami's
charge of Israeli invasion plans 4
ISRAEL: Press painting
dismal economic picture 5
ANGOLA: National Union
forces make gains 7
ALGERIA: Continuing
military preparations 9
SPAIN: Government's statement
ofi basic principles 12
SOUTH KOREA -JAPAN: Kim
Tae-chung case 14
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National Intelligence bulletin
December 17, 1975
The disastrous grain harvest, coupled with chronic shortcomings in industrial
management and construction, has created the most serious economic problems for
the USSR in more than a decade. After slowing markedly in 1974, growth in gross
national product slumped to less than 2 percent this year.
The outlook for 1976 is bearish. At the heart of the 1975-76 slowdown is the
severe drought that prevailed during most of this year in the key grain regions.
Although lacking in detail, announcements from this month's meeting of the
Supreme Soviet reflected some of the major trends in the troubled economy:
--Overall farm output is down more than 10 percent in 1975, the drop
highlighted by the depressed grain harvest of about 137 million tons-80
million tons short of target; other crops generally were mediocre.
--The failure of meat output to rise in the fourth quarter, despite a sharp
increase in the number of anirr7als slaughtered, is a harbinger of difficulties to
come.
--Industry turned in a respectable performance-up 6.5 percent-with
machinery output leading the way.
--Military spending continued to rise in 1975 buoyed by procurement of
hardware for strategic weapons systems.
Looking ahead to next year, the Soviets have projected an implied planned
increase in gross national product of 5.5 percent. If this goal is to be met,
above-average weather conditions in agriculture will have to prevail.
If the rebound of 11 percent slated for farm output next year is to be achiE;ved,
an exceptionally sharp rise in crop production will be needed to more than offset
depressed livestock output. The shortfall in feedstuffs from the 1975 crop will mean
that distress slaughtering of livestock will have to continue into the first half of 1976
and that lower herd inventories, coupled with decreased slaughter weights, will bring
about a reduction of 15 to 20 percent in the output of livestock products.
The Soviets are planning a 4.5-percent rise in industrial output for 1976, the
lowest plan figure since World War II. This moderate goal reflects the following
unfavorable factors:
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National Intelligence Bulletin December 17, 1975
--shortages of agricultural raw materials for the food processing and soft goods
industries;
--persistent lags in the completion of new plans and the delivery of new
equipment-a condition that will hold back production of both light and heavy
industries;
--a slowing of the growth of the industrial labor force. Planners are reluctant to
draw further from the large pool of agricultural labor for fear of aggravating
chronic difficulties in the farm sector.
The investment data indicate a continued concern about old problems rather
than a basic restructuring of priorities. Growth in total investment in 1976 is to be
reduced to 4 percent, with emphasis on a reduction of the vast amount of capital
tied up in uncompleted investment projects; an increase in the share of producer
durables going for replacement of obsolete equipment; and maintenance of the high
priority of investment in agriculture and its supporting industries (40 billion rubles,
or more than one third of all investment).
The serious shortfall in farm output and the scheduled slowdown in industrial
growth will put consumer welfare programs under increasing strain. Increases in
consumer goods and services will be the lowest in the Brezhnev era. Similarly, the
annual boost in wages and salaries will be held to 3 percent to reflect poor prospects
for supplies of consumer goods. Even with consumer incomes rising more slowly,
demand for meat will continue to grow. Although supplemented by imports,
domestic meat supplies will fall considerably short of the 1975 level. Restricted food
supplies, taken together with the regime's refusal to raise retail prices, could result in
severe shortages.
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National Intelligence bulletin
December 17, 1975
Peking has accepted the EC offer to begin negotiations on a trade agreement
along the lines the EC suggested a year ago for pacts with Communist countries. A
Chinese delegation will come to Brussels for the negotiations, perhaps in early
February.
In contrast to the East European countries, Peking has acknowledged the
Commission's role as negotiator for all EC member states jointly under the common
commercial policy. The model agreement proposed by the Commission to all
state-trading countries suggests nonpreferential trade accords of five or ten years'
duration. It would include offers to enlarge or eliminate quotas. The model also
holds open the possibility of wider economic cooperation.
In addition, the Chinese missian in Brussels had already showed interest this
fall in the trade preferences available to all developing countries under the
Community's scheme of generalized preferences. Commission officials believe that a
Chinese application for generalized preferences would probably be granted by the
EC Council.
The EC ranks third this year-after Japan and Hong Kong-among Peking's
trade partners, and China would like to reduce its trade deficit with the Community.
In 1974 the EC exported goods valued at $975 million to China, while its imports
from China were valued at $828 million.
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National Intelligence Bulletin
December 17, 1975
Prime Minister Karami's statement yesterday that he had heard of Israeli plans
to invade Lebanon on the pretext of saving Lebanon's small Jewish community has
caused a considerable stir in Beirut and other Arab capitals.
The Prime Minister claimed he heard a broadcast over Israeli radio early
yesterday morning announcing Tel Aviv's intentions, but Israel quickly denied any
such broadcast. Karami's allegations nevertheless prompted standard warnings from
Cairo against fsraeli intervention in Lebanon.
Lebanese leaders frequently seek for their own political reasons to portray Tel
Aviv as posing a major threat to Lebanese unity and as being responsible for
Lebanon?s internal problems. They may, however, be genuinely worried about
possible Israeli action in the wake of Tel Aviv's recent air attacks on Palestinian
camps in Lebanon.
The fighting in Beirut has dropped off considerably as the latest cease-fire is
slowly being implemented. The presence of security forces in the hotel district has
helped quiet the downtown area, although Muslim leftists and Christian Phalangists
could easily retake their respective strongholds. Scattered fighting throughout the
suburbs continues, but in general the situation has improved enough to allow
Lebanese leaders to focus on political solutions to the dispute.
The severity of the recent flare-up apparently has prompted a more
conciliatory attitude among principal government leaders. According to US officials
in Beirut, Prime Minister Karami and President Franjiyah have been working
together more constructively. Interior Minister Shamun, the strongest Christian in
the cabinet, is reported to have reached at least a temporary reconciliation with
Karami over the weekend. Shamun was scheduled to meet with Palestinian leader
Yasir Arafat yesterday.
This cooperation will
has once again beco
representation in a new go
Damascus early this week
help Karami in his efforts to expand the cabinet, which
me his top priority. Leftist leader Jumblatt-whose
vernment is considered essential-returned from his tri to
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Syrian efforts over the past twa weeks to mediate among Muslim and Christian
leaders are generally being credited for having smoothed the way for the latest
cease-fire and the renewed political talks. Prior to the outbreak of fighting last week,
Phalanges Party leader Jumayyil met with President Asad and had at that time
expressed willingness to cooperate.
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National Intelligence Bulletin
December 17, 1975
Recent Israeli press releases painting a dismal picture for Israel's economy next
year probably are geared far the kickoff of the 1976 United Jewish Appeal
campaign and US Congressional hearings on the Israeli aid package. Israel forecasts a
6-percent increase in imports, against a 9-percent rise in exports resulting in about a
$3.7-billion trade deficit. What the press releases do not say is that, with expected
transfers and $2.3 billion in US aid, this would mean a 1976 balance-of-payments
surplus of $500 million; our earlier estimate was far a $200-million surplus.
With respect to the domestic economy, Tel Aviv also has released an unrealistic
set of projections:
--a $12-billion budget, 40 percent above the budget for the fiscal year;
--a 25-percent rise in industrial output;
--an incredible 62-percent hike in unemployment, to a rate of 5.2 percent.
The Israelis claim that the new budget in real terms will be 5 percent below the
fiscal 1976 level, implying a highly unlikely return to the 40-percent annual inflation
rate of 1974. The price outlook for 1976 is closer to the 20- to 25-percent rate
expected this year.
With only a small increase expected in the labor force, substantial new packets
of unemployment seem out of the question. A similar Israeli unemployment forecast
last year failed to materialize.
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National Intelligence Bulletin December 17, 1975
ANGOLA
The National Union for the Total Independence of Angola, assisted by forces
of the National Front for the Liberation of Angola, captured Cela, in central Angola
An official National Union
communique issued Monday stated t at t e orce is now moving toward Quibala,
about 180 miles southeast of Luanda.
In eastern Angola, the National Union has consolidated its hold on Luso,
recaptured from the Popular Movement last week.
North of Luanda, there have been no recent significant changes in the military
situation. The drive begun by the Popular Movement two weeks ago toward the
headquarters of the Zairian-backed National Front apparently remains stalled some
50 miles away, mainly because several river bridges were destroyed by retreating
Natianal Front forces.
At a press conference in Luanda yesterday, the Popular Movement exhibited
four South African soldiers captured during the fighting around Cela. Publicity
about South African participation in the National Union -National Front operations
is seriously damaging the nationalist credentials of the two groups; it has already
prompted Nigeria's and Tanzania's recognition of the Luanda regime and is clearly
causing other African governments that have held off to waver. The Popular
Movement, and its backers, can be expected to focus as much attention as possible
on South Africa's involvement.
Meanwhile, the Organization of African Unity's timetable for its emergency
summit on Angola is now uncertaino As originally planned by OAU officials, the
summit was to have been preceded by a preliminary planning session of foreign
ministers in Addis Ababa from December 19 to 21.
OAU member states have now agreed, largely at the behest of the states that
support the Popular Movement's regime, to hold the two meetings in succession but
have not yet agreed on timing. Unless they resolve the issue soon, no meetings are
likely to be held until after the first of the year.
On Monday, Sudan became the 14th African country and 30th worldwide to
recoanize the Popular Movement's regime.
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