NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029700010043-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: August 2, 2005
• Sequence Number: 43
• Publication Date: January 27, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday January 27, 1977 CG NIDC 77-021C
State Department review completed
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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National Intelligence Daily Cable for Thursday
I
The NLD Cable is for the purpose of informing
senior US officials.
SPAIN: Situation Report
USSR: Economic Performance
JAMAICA-GUYANA: Closer Economic Ties
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SOUTH AFRICA: Student School Boycott
CZECHOSLOVAKIA: Media Campaign
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EC: Nuclear Safeguards
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 SPAIN: Situation Report
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A measure of calm returned to Madrid yesterday as
the Spanish government demonstrated its intention to end the
political violence that has claimed seven lives since Sunday.
I I Prime Minister Suarez acknowledged the seriousness
o the recent incidents by canceling a planned trip to the
Middle East. He called a meeting of top security advisers yes-
terday. Police in the capital were reinforced with reserves
from outlying areas to guard against further incidents at the
funerals yesterday of three of the Communist lawyers who were
killed on Monday. Following the meeting, the government last
night reaffirmed its ban on all public demonstrations, and an-
nounced new measures giving the police wide-ranging search pow-
ers.
Responsibility for the murders has been claimed by
a i e-Known right-wing group calling itself the Apostolic
Anti-Communist Alliance. The large number of foreigners ar-
rested so far in the case appears to lend some credence to press
speculation that the rightist terrorists may have some ties
with an "international fascist organization." We have no con-
firmation of such ties. In yesterday's statement, the govern-
ment also threatened to expel all foreigners who may be con-
nected with extremist organizations or involved in subversive
activities.
I The government is being supported in its efforts to
restore calm by opposition political leaders, who yesterday
issued a second appeal to their supporters for calm. The new
statement came on the heels of a joint communique issued by
many of the same leaders and Prime Minister Suarez following
a meeting on Monday.
I I Communist and other leftist labor leaders did call
or a second day of protest strikes yesterday--in which thou-
sands of workers in Madrid, Bilbao, and Barcelona participated.--
but they insisted that the protest actions be confined to facto-
ries and offices so the presence of leftist workers in the
streets would not provide a ;pretext for further terrorist at-
tacks.
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latest violence, which appears to have been provoked at least
in part by left-wing extremist kidnapings of a high-ranking
government adviser and the head of the country's military
courts. These fears were reinforced yesterday when the right-wing
terrorist group threatened that the Spanish left would suffer
"a night of the long knives" if the two rightist hostages were
killed.
For the moment at least strong security forces and
leftist restraint appear to have given the government the up-
per hand against rightist opposition to Suarez' program of re-
forms. Should the rightists carry out their latest threat, how-
ever, and step up their campaign of killing leftists, the spiral
of violence which would ensue could deal a serious blow to
Spain's frail democracy.
Leftist party leaders are apprehensive about the
I Soviet industry continued its sluggish performance
during the fourth quarter of 1976, according to our analysis
of statistics presented to the Soviet Council of Ministers
last week. Agricultural output rebounded from a disastrous
1975, reflecting a record grain crop and a better than ex-
pected performance in the livestock sector.
We estimate that Soviet GNP grew by about 4 percent
in 1976, a marked improvement over the 1975 rate of 2.3 percent
and equal to the average for the early 1970s. The poor 1975
harvest disrupted industry and caused problems for the consumer,
but a record grain crop in 1976 pushed agriculture into a re-
covery.
The increase in industrial output of almost 4 percent,
according to our estimate, was the Soviet' worst performance
of the post World War II period. A downturn in processed food
production was the principal cause, although transportation
tieups and fuel distribution problems also contributed.
I Despite an encouraging performance in the energy
sectors, the growth in production of other industrial materials
was a poor harbinger for a possible acceleration of industrial
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growth in the first half of this year. Metals, forest products,
and construction materials grew at rates under. 3 percent com-
pared with averages of 4 to 5 percent in 1971-75. Crude steel
production, for example, fell about 2 million tons short of
planned output, in large part due to delays in the construction
of new capacity. Growth in output in 1976 was the smallest
annual increase since 1970.
Farm output grew by almost 5 percent last year, ac-
cording o our estimate, following an 8.5-percent drop in 1975.
A record grain crop of 224 million tons and a near-record cotton
harvest of 8.3 million tons boosted crop production by over 20
percent and eased import demand. This was partly offset, how-
ever, by the lower output of livestock products.
I Some of this year's agricultural statistics seem
inconsistent and may be padded by the Soviets. For example, the
USSR recently purchased 600,000 tons of sugar from the Philip-
pines and is rumored to have bought about 220,000 tons from a
French firm, taking advantage of current prices and supplement-
ing reduced domestic production. Yet the announced sugar-beet
harvest was a record 98.6 million tons, suggesting either a
much lower than normal sugar content in the beets, serious pro-
cessing problems, or an exaggerated production figure.
I Also, meat production was given at 13.3 million tons,
down rom 15 million tons in 1975 but considerably above our
forecast. Distress slaughtering in the wake of the 1975 harvest
had reduced livestock numbers and pointed toward a sharper re-
duction in output. Production at the reported level would have
required a stronger than normal showing by the private sector
and should have done more to ease meat supplies during the year.
I IFor the Soviet consumer, 1976 was the worst year of
0o shortages in more than a decade. Early in the year, meager
food supplies were reported principally in rural areas. By spring,
shortages intensified and spread to cities. The overall sit-
uation improved during the summer, with the availability of
fruits and vegetables, but meat shortages worsened. Despite
some improvement during the fall, severe shortages currently
remain common.
A reduction in non-grain imports and a rapid expansion
in exports allowed the USSR to cut its hard-currency trade de-
ficit in 1976. Last year's hard-currency deficit is estimated
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at nearly $5 billion, down from the record $6.4-billion de-
ficit incurred in 1975. About $3 billion was spent on grain
half from the US but that largely reflected purchases under
the US-USSR long-term grain agreement and orders placed to
augment the 1975 harvest.
The USSR was able to achieve a balance in its hard- 25X1
currency payments only by rapidly increasing its debt. By the
end of 1976, net indebtedness rose t roughly $14 billion, up
from $10 billion at the end of 1975.
I
JAMAICA-GUYANA: Closer Economic Ties
Faced with economic difficulties and problems in ob-
taining assistance, Guyana and Jamaica--with a strong boost
from Cuba--are seeking closer economic ties with the USSR and
Eastern Europe.
_?n;,ar,a i c sPekina an economic agreement with
I Jamaica is taking similar initiatives. Two high-level
CEMA o icials were invited to visit Kingston, and the Manley
government is reportedly considering an economic agreement
with CEMA. A Jamaican trade delegation will soon leave for Mos-
cow.
The USSR has also been invited to set up an embassy
in Kings on.
Relations were established between the two countries
in March 1975, but the Jamaican government had dragged its
feet on permitting a Soviet embassy in Kingston.
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Guyana and Jamaica both have huge current-account
e ici s, which provide a strong economic rationale for the
overtures. Lower sugar prices and rising import costs have off-
set much of the recovery in bauxite and alumina sales. The two
countries' inability to obtain foreign funds to cover these
deficits has led to severe austerity measures and an unsuccess-?
ful search for new economic aid.
Jamaican Prime Minister Manley seems to have been
particularly embittered by his dealings with the International
Monetary Fund. Jamaica recently was offered $50 million by the
IMF, but Manley found most of the requirements for the loan
politically unacceptable. He publicly blasted the IMF, which
he called the "central lending agency for the international
capitalist system," for laying down conditions that "always
include cutting programs which serve the people and their
needs."
I The USSR and other CEMA members are unlikely to pro-
vide muc, if any, cash aid to either country, but they might
provide some machinery and equipment credits in return for
sugar, bauxite, and alumina. It is unlikely, however, that sig-
nificant amounts of these items would be diverted to the com-
munist countries over the next few years.
The Jamaicans probably have no illusions about the
communis world providing sufficient help to overcome Jamaica's
economic ills, but the Manley government probably does see a
chance to broaden its export markets and encourage East Euro-
pean and Soviet assistance in certain technological areas.
The timing of Manley's initiatives suggests that he
may have concluded that he is not likely to fare much better
with the US than with the IMF. He has not, however, ruled out
the possibility of an approach to the new US administration.
Like Jamaica, Guyana sees the overtures to the com-
munist countries as consistent with a policy of nonalignment,
but Burnham may be more willing than the Jamaicans to make po-
litical concessions to the Soviets. Burnham particularly wants
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assistance to help construct a major hydroelectric complex.
The Guyanese have approached the Soviets on this matter before
without success. This time, Burnham may be willing to make new 25X1
overtures to the Soviets, such as appearing to grant a more
active role in the government to the Moscow-oriented opposition X1
party led by Cheddi Jagan. F7 -1
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SOUTH AFRICA: Student School Boycott
I Most black high school students in South Africa's
cape o n area are continuing to observe the school boycott,
but the pressures for ending it are mounting.
The students most eager to return to school are the
seniors, who wish to complete the term and move on to the uni-
versity. Many seniors are fearful, however, of reprisals from
the militant younger students, who do not see missing a year
of "Bantu" education as any great loss. One of their major com-
plaints is that the government spends on black students only a
fraction of what it spends on white students.
A small break in student solidarity was reflected in
the presence of about 600 of 3,000 high school students at
their desks yesterday. The militant student leadership, how-
ever, will probably try hard to keep the boycott going. Several
militant student leaders recently told US embassy officials
that to end the boycott would amount to capitulation to the
government.
In the Johannesburg area, South African authorities
appear to 'have weakened the leadership of the Soweto Student
Representative Council. One of the main leaders fled in mid-
January to Botswana, where he joined one of the early leaders
of the Soweto riots who had fled to the UK last August. Accord-
ing to the principal of one of the leading high schools in
Soweto, the newest council leader is weak and not expected to
last long.
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The South African police apparently have been able to
disrupt the organizational apparatus of the Soweto student
group. Nevertheless, the students managed an effective boycott
of year-end examinations, and many leaders have avoided police
nets.
Most black students in the Johannesburg area are in
school, and it seems likely that the seniors will take their
CZECHOSLOVAKIA: Media Campaign
The Czechoslovak media campaign against alleged spies
and foreign enemies, designed in part to draw attention away
from human rights issues, has reached a new high with an attack
against alleged British intelligence efforts in the country.
Prague television on Sunday carried a forty-minute
program on British embassy activities; the program included
interviews with Czechoslovaks who charged that British diplo-
mats had tried to recruit them. Specific accusations of espio-
nage were made against several Britons, including a former am-
bassador in Prague during the 1960s. The show included a tape
of a purported meeting--filmed by a hidden camera--between Otto
Ornest, one of the four prominent dissidents arrested on Jan-
uary 17, and an unnamed Western diplomat.
I I The program clearly betrays the regimes concern with
the growing publicity in the West on the human rights issues
raised by the Czechoslovak group known as Charter 77. The show
is clearly designed to curb contacts between Western diplomats
and journalists on the one hand and Czechoslovak dissidents and
ordinary citizens on the other, and to discredit foreign inter-
est in Czechoslovak dissident activity by portraying it as 25X1
merely another facet of Western intelligence activity. The pro-
gram coincided with an attack by president and party chief
Husak against Western "slander" of the Prague regime. 2X1
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FRANCE - SAUDI ARABIA: Relations
French President Giscard's four-day visit to Saudi
Arabia this week undoubtedly gave a boost to French efforts to
improve relations with the Arab states. Both Giscard and Saudi
King Khalid are treating the visit as a major success, although
little progress was made in the areas of economic and military
cooperation and the leaders broke almost no new ground politi-
cally.
Despite reports that Khalid's ill health would pre-
vent him from greeting Giscard, Khalid not only received Gis-
card on his arrival but also saw him off at the conclusion of
the visit.
I I Talks focused primarily on international issues, in-
cluding Arab relations with Western Europe and the situation
in the Middle East. Giscard offered strong support for Saudi
initiatives regarding an overall settlement in the Middle East,
emphasizing in particular the need for a major diplomatic ef-
fort this year.
During the visit, Giscard reaffirmed France's willing-
ness to build a nuclear research center in Saudi Arabia, as
well as to explore possibilities for solar energy development.
He also signed a three-year contract increasing French imports
of Saudi crude oil to France by one third; he praised the Saudi
decision to increase the price of its oil by only 5 percent.
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The visit's final communique noted recent bilateral
progress that has been made in the areas of economic and tech-
nical cooperation and discussed prospects for future coopera-
tion, but no new projects were announced. At his press confer-
ence, Giscard indicated that military sales had not been dis-
cussed during the visit; there was no mention of new military
contracts in the communique.
I
Khalid has accepted Giscard's invitation to visit
date for the visit will be set later.
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EC: Nuclear Safeguards
I //Prospects appear to be improving for the imple-
mentation o the nuclear safeguards agreement worked out be-
tween the International Atomic Energy Agency and the nine Euro-
pean members of EURATOM.//
//Application of the safeguards--which are re-
quired under the 1968 Nonproliferation Treaty--has been held
up for months because of internal EC differences. In particu-
lar, France refuses to accept a proposal by the EC Commission
for implementation of safeguards on a Community-wide basis,
which would bypass the need for country-by-country approval.
The French argue that implementation should be a national and
not a Community matter.//
//Because of this French position, five EC mem-
bers now must adopt domestic legislation in order to bring the
agreement into force. These legislative measures are needed to
oblige nuclear utility facilities in the five countries to ac-
cept the inspection activities of the international agency. In
the cases of West Germany, Belgium, and Luxembourg, parliamen-
tary action is required, which could take up to a year to com-
plete.//
//To avoid further delays in implementing safe-
guards, the international agency has proposed that while na-
tional legislatures debate the issue, the safeguards agreement
be regarded as binding on each country's domestic nuclear fa-
cilities. EC officials have said EURATOM can accept this solu-
tion, although it probably requires approval by the EC Council
of Ministers when it next meets on February 8.//
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//The EC states are under some pressure to take
action soon. Canada suspended further shipments of uranium to
them until the safeguards agreement is applied. West Germany
has contracted to receive 1,000 tons of uranium from Canada
within the next 12 months, and the Canadian suspension deci-
sion could have an impact on West German public utilities.
F__ I
NORTH KOREA: Arms Reduction
South Korea's ruling party yesterday moved quickly to
re3ec orth Korea's renewed proposals for North-South arms re-
ductions and for political talks between the Koreas.
I I In a letter addressed to various political groups in
the Sout, the North Koreans said they were prepared to cut
force levels drastically and to meet with South Korean repre-
sentatives at an early date at. Panmunjom or any other agreed
site for consultations aimed at reducing tensions and producing
eventual reunification.
At the same time, the North Koreans sharply attacked
the authorities in the South and demanded that Seoul, in effect,
renounce its basic foreign and. domestic policies and accept the
North's approach to reunification.
Pyongyang apparently hopes to regain at least a meas-
ure of the initiative in the diplomatic sparring between the
Koreas. North Korea probably considers its proposals an indirect
counter to President Pak's recent call for a North-South non-
aggression pact.
I IThe North Koreans probably also want to demonstrate
some flexibility and moderation, with an eye to securing addi-
tional international support. Several high-level North Korean
officials have been traveling abroad in recent weeks, appar-
ently trying to gain backing for North Korea in the annual com-
petition with South Korea in various international forums.
I In recent years, North Korea's handling of the key
issue o North-South political discussions has appeared incon-
sistent. At times, high officials have attacked Pak by name
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and virtually ruled out talks with his government; on other
occasions, such as now, North Korea has taken pains to avoid
ruling out talks, provided various conditions are met. This
inconsistency probably reflects the North's desire to appear
reasonable while pressing political and diplomatic attacks
against the South.
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