NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029600010014-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: May 19, 2006
• Sequence Number: 14
• Publication Date: December 8, 1976
• Content Type: REPORT

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Access to this document will be restricted to
those approved for the following specific activities:
Wednesday December 8, 1976 CI NIDC 76-286C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Top Secret
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CIA-RDP79T00975A02960T0dfP9 ret
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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
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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
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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.
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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.
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(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
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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.
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--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.
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The continuing rapid inflation in OPEC can be directly
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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
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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
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next year make it more likely that, after a short breathing
period, military hard-liners and leading industrialists will re-
new their complaints.
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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.
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