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December 20, 2016
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May 19, 2006
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December 8, 1976
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AW AV - - - - - AAF AF ROUTING TO: NAME AWffAESS DATE INITIALS APPROVAL DISPATCH COMMENT FILE CONCURRENCE INFORMATION CONTROL NO. Access to this document will be restricted to those approved for the following specific activities: Wednesday December 8, 1976 CI NIDC 76-286C w NATIONAL SECURITY INFORMATION Unauthorized Disclosure Subject to Criminal Sanctions Top Secret ...-........r..................r......- (Security Class CIA-RDP79T00975A02960T0dfP9 ret (Security Classification) Approved For Release 2007/03/07 : CIA-RDP79T00975A029600010014-8 25X1 Approved For Release 2007/03/07 : CIA-RDP79T00975AO29600010014-8 Approved For Release 2007/03/07 : CIA-RDP79T00975AO29600010014-8 Approved For National Intelligence Daily Cable for Wednesday December 8. 1976. 25X1 e NID a is o e purpose informing senior officials. LEBANON: Situation Report RHODESIA: Guerrilla Delegation Page 1 Page 3. OPEC: The Roots of Inflation CHILE: Progress on Human Rights BRAZIL: Election Results Page 5 Page 7 Page 8 CHINA: Grain Imports Page 10 Page 10 Approved For Release 2007/03/07 : CIA-RDP79T00975A029600010014-8 Approved For LEBANON: Situation Report Renewed tensions in both southern and northern Leba- non may further complicate efforts by the Syrian-dominated se- curity forces to begin collecting heavy weapons. According to unconfirmed press accounts, all the major combatants--including the Palestinians--reportedly agreed in principle earlier this week to a plan for disarmament. Implementation of the plan has already been delayed at least until next week. Tel Aviv's continuing warnings that it will not tol- erate t he presence of a non-Lebanese military force to police the border area gives President Sarkis little room to find a Approved For Release 2007/03/07 : CIA-RDP79T00975A029600010014-8 Approved For compromise solution. There is no Lebanese force capable of main- taining security in the south, and efforts to create such a force with an acceptable balance of Christians and Muslims would cause a potentially dangerous delay in implementing other as- pects of the cease-fire agreement, especially the roundup of weapons. Approved For Release 2007/03/07 : CIA-RDP79T00975AO29600010014-8 Approved For RHODESIA: Guerrilla Delegation I I The Rhodesian guerrilla leaders who arrived in Ge- neva last week to participate in the settlement talks have been playing a low-key role as part of Robert Mugabe's nationalist delegation. Despite earlier indications that these men might challenge Mugabe's leadership of the Zimbabwe African National Union delegation, there has been no sign yet of such a move. The US mission in Geneva reports that Mugabe has appeared much more relaxed and confident since the arrival of the military leaders. Approved For Release 2007/03/07 : CIA-RDP79T00975A029600010014-8 Approved Foil (C) Nkomo has told the US mission that he believes the guerrillas can be more fully controlled now that their leaders are at the conference. He hopes to take advantage of their presence by resuming negotiations begun some time ago on mili- tary coordination between his own forces and the ZANU guerril- las. The US mission reports t at there may be as many as ive basic subgroups within ZANU and that Mu abe's deleaation remains an extremel r fragile coalition.// I Approved For Release 2007/03/07 : CIA-RDP79T00975AO29600010014-8 Approved Foil ontrary to assertions by the Organization of Petroleum Exporting Countries, we find that import prices have not been an important factor in inflation in OPEC member coun- tries since late 1974. //OPEC's Economic Commission board has stated that members now pay 26 percent more for their imports than they did at the time of the last oil price increase in October 1975.// I Import prices were the leading cause of OPEC domestic inflation in 1973 and much of 1974. Our price indexes show that import prices paid by OPEC countries increased 22 percent in 1973, while consumer prices in those countries rose 10 percent. A similar situation seemed to hold for 1974, when import prices jumped 25 percent and consumer prices 17 percent. At least one third of the 1974 increase in import prices, however, reflected the impact of higher OPEC oil prices on Western cost structures for goods and services sold to the OPEC countries. Since late 1974, the role of import prices in infla- tion has all but disappeared. Our indexes show gains in import prices of only 7 percent in 1975 and 2 percent this year. The $90 billion increase in OPEC revenues between 1973 and 1974 has prompted most members to embark on vastly accelerated govern- ment spending programs. Domestic price increases have averaged 20 percent annually in the last two years and would have risen even faster had wage and price controls not been imposed in several OPEC countries. Approved For Release 2007/03/07 : CIA-RDP79T00975AO29600010014-8 Approved For 4elease 2007/03/07 : CIA-RDP79T00975A0 9600010014-8 25X1 I --Port backlogs, which have led to huge demurrage fees and surcharges. --Rising overland transport fees, which more than doubled between 1974 and 1975 in Iran, Iraq, Saudi Arabia, Libya, and Nigeria. --An intense competition for labor that has boosted wages to as much as eight times above the 1973 level in some sectors, notably construction. --Skyrocketing rents because of severe housing shortages. As a result, the prices of both consumer goods and development projects is much higher among OPEC countries--par- ticularly in the Middle East--than elsewhere in the world. For example, a new 500,000-ton-per-year ethylene plant costing roughly $500 million in the US or Western Europe could cost more than $1 billion in the Middle East. Because of cost over- runs, many Western contractors have refused to sign fixed-price agreements for Middle East projects. Strong inflationary pressures will persist in most OPEC countries for at least the next several years. There is no way to expand the availability of goods and services fast enough to meet the booming demand. Nearly all OPEC governments thus have been forced into price control and subsidy programs. Price controls have been applied mainly to consumer items. Subsidies, initially for imported foodstuffs, now have been extended to such commodities as construction materials and capital goods. Iran, for example, now spends $1.5 billion a year on subsidies. These programs tend to stay in force long beyond their need. n y Algeria seems to be combining a slowdown in construc- tion activity with a conscious policy of relaxing price con- trols. Approved or a ease - - The continuing rapid inflation in OPEC can be directly Approved For CHILE: Progress on Human Rights //Our judgment that the Chilean government recently has substantially improved its practices in the area of human rights is supported by evidence collected by some of the junta's most persistent critics.// recently confirmed to the US embassy in Santiago that recent government actions have gone a long way toward resolving the controversy over political pris- oners. I the number of prisoners held by the government has declined s arply. figures show that most of those being tried or serving sen- tences are now out on bail, on parole, or under house arrest. The government is reported to be taking steps to commute the sentences of many persons already convicted; some 1,110 report- edly have been granted permission to go into exile and about 800 of these have already left the country.// I //Despite allegations by local communists and Radio Moscow t at many persons recently freed have been rearrested and that unidentified bodies have appeared in the Santiago morgue, I lare convinced that there have been no new instances of illegal detention or killings. Although cases of unsolved disappearances are still pending, security forces do not appear to be engaged in the kinds of human rights violations that earlier aroused international condemnation.// //Another sign of a more humane trend in government policy is a report that local military zone commanders are using their discretionary powers under the state of siege to reduce sentences. One regional commander told a US embassy officer that the number of persons detained in his province had diminished from 165 to 2 within the past year.// //President Pinochet may be getting--and heeding-- advice to ease the tough security restrictions that have been in 25X1 25X1 Approved For Release 2007/03/07 : CIA-RDP79T00975A029600010014-8 Approved F force since the coup three years ago. There is some information to suggest that the influence of hard-liners in the government has decreased and that Pinochet now thinks a new approach is justified by domestic tran uilit and the high cost of Chile's international isolation. 25X1 I I The returns from Brazil's nationwide municipal elec- tions, eld November 15, have enhanced President Geisel's image. Tensions among conservative military leaders critical of Geisel's gradual moves toward political liberalization have been reduced by the strong support won by the pro-government party. The Presi- dent now can claim to have an election mandate for his innova- tive approach to major policy issues. In the past, the local contests for approximately 4,000 municipal council seats and nearly as many mayorships have not been politically significant. Early this year, however, Geisel elevated them to national importance by proclaiming them a "plebiscite" on his administration. He also broke a 12-year tradition of presidential noninvolvement in civilian politics, and--despite his reserved manner--has proved to be an adept cam- paigner. There is no doubt that Geisel views the returns as a national vote of confidence in his leadership; his buoyant mood has had a calming effect on the rest of the country. A rash of bombings--attributed to right-wing extremists who opposed Geisel's political activism--subsided with the elections, and military criticism of the administration has softened noticeably in re- cent weeks. The President's respite from criticism and disruptive political maneuvering will almost certainly be temporary. Con- tinuing economic problems and the likelihood of a mild recession Approved For Release 2007/03/07: CIA-RDP79T00975A029600010OT Approved For Re next year make it more likely that, after a short breathing period, military hard-liners and leading industrialists will re- new their complaints. 25X1 25X1 Approved For Release 2007/03/07 : CIA-RDP79T00975AO29600010014-8 Approved For R - 600010014-8 CHINA: Grain Imports I IChina is not likely to increase its grain imports substantially in 1977 despite the poor crop this year. So far, Peking has purchased 1.3 million tons of wheat for delivery in the first half of 1977--500,000 tons from Aus- tralia and 800,000 tons from Canada. Both countries expect further negotiations in late spring or early summer, but we do not expect total Chinese grain imports for the year greatly to exceed the 2 million tons purchased for delivery in 1976. Crop conditions in China have not been good this year, an e hinese have not said much about the results of the fall harvest. The absence of large new purchases probably reflects comparatively good grain crops near the large coastal cities, efforts to save foreign exchange, and plans to use existing stocks to meet production shortfalls. Prime Minister Gairy of the small Caribbean state of Grenada was returned to power in the general election held yesterday, but his United Labor Party's parliamentary majority was sharply reduced to a three seat margin. Gairy's party defeated a radical-dominated, stri- dently anti-US coalition led by the pro-Cuban New Jewel Move- ment. 1 1 1 1 0 0 0 0 ToOS 6 For Release 2007/03/07 : CIA-RDP79T00975A029600010014-8 (Security Classification) 0 (Security Classification) AdV AAF AAF AAW AW AAF AAW AdV AAW A&4 Approved For Release 2007/03/07 : CIA-RDP79T00975AO29600010014-8