CENTRAL INTELLIGENCE BULLETIN

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030000010020-5
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• Document Page Count: 13
• Document Creation Date: December 21, 2016
• Document Release Date: February 14, 2008
• Sequence Number: 20
• Publication Date: April 12, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Tuesday April 12, 1977 CG NIDC 77-084C
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National Intelligence Daily Cable for Tuesday, April 12, 1977.
T e NID Cable is for the purpose of informing
senior US o icials.
CONTENTS
PAKISTAN: Demonstrations
Page 2
USSR-US:
Fishing Violations
Page 3
LEBANON:
Situation Report
Page 4
ZAIRE:
Situation Report
Page 5
ETHIOPIA: Unrest
Page 6
POLAND:
Trade and Payments Difficulties
Page 6
CHILE:
F-5 Problems
Page 8
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The success of the Pakistani opposition's demonstra-
tions last weekend could be a turning point in the campaign to
bring down Prime Minister Bhutto. The US embassy notes that
Bhutto still has considerable resources, but that he might soon
have to call on the army to maintain order. Many observers be-
lieve that if it comes to this, the generals will eventually
decide that the best way to restore order is to remove him.
The opposition's campaign protesting the rigging of
the National Assembly election on March 7 was quickly success-
ful in some areas--notably in the southern cities of Karachi
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and Hyderabad, which were placed under military control be-
cause of violent demonstrations. Until last weekend, however,
the campaign had failed to create significant disorders in the
Punjab, the most populous province and the key to Bhutto's fate.
Some opposition leaders were talking about seeking a compromise
along lines suggested by the Prime Minister.
On Saturday, the opposition was able to stage demon-
strations in almost every Punjabi city of any importance pro-
testing the opening of the provincial assembly. In Lahore, the
provincial capital, there were more deaths and other violence
than at any time during the campaign that forced president Ayub
Khan to step down in 1969. The army had to assist the police in
Multan.
There were demonstrations Sunday and yesterday in
many cities in honor of those killed on Saturday, and the op-
position has called on the people to stop paying taxes. In the
cities in the Sind, which have been relatively quiet recently,
the opposition is becoming more active.
Labor and students, two groups whose participation
cou a greatly to the campaign to oust Bhutto, have not been
involved so far, but there are some signs that both groups are
becoming active. Some labor organizations may have participated
in the demonstrations in Lahore on Saturday, and students have
organized a general strike in Karachi and plan to demonstrate
in Peshawar.
he embassy believes that Bhutto has been weakened
and may no longer be able to offer further concessions, since
the opposition would see these as an admission of weakness. The
opposition has been given new confidence, and it is unlikely
that the campaign will die out, despite the arrest of opposition
leaders and Bhutto's control of the security forces and much of
USSR-US: Fishing Violations
The USSR appears to be genuinely concerned with the
pro em of Soviet ships fishing illegally off the US coast.
Before the US Coast Guard seized the two Soviet fishing ves-
sels Zast weekend, an official in the Soviet Fishing Ministry
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told a US embassy officer in Moscow that he agreed with the
US that the time is past for Leniency due to unfamiliarity with
the US regulations.
The Soviet official said his government would make
every e ort to prevent incidents and would take strong meas-
ures against Soviet ships and captains that violate the US
regulations.
Before last weekend, 39 violations of the US 200-
nautical mile fishing zone had been reported by the US Coast
Guard, including 21 by the Soviets, for which civil penalty
actions have been initiated. Three of the recent Soviet viola-
tions off the New England coast involved the retention of pro-
hibited species of fish and fishing outside of authorized areas.
In the past, the Soviets have warned that boats re-
ceiving violations would be withdrawn from US waters. One boat
already has been sent home.
LEBANON: Situation Report
Palestinian-leftist forces in Lebanon are apparently
intent on capturing Mari Uyun before any cease-fire takes ef-
fect.
As of late yesterday, the Palestinians had the town
nearly surrounded, and some of the Christian defenders were
reported to be withdrawing. Fighting in other areas in southern
Lebanon was said to be limited to artillery and mortar exchanges
between the two sides.
The US embassy in Beirut reported yesterday that
both the Syrians and the right-wing Christian leadership had
indicated their readiness to agree to a cease-fire in place.
Syrian President Asad, however, apparently regards Israeli sup-
port for Christian efforts to secure the entire southern border
area as being responsible for the latest round of fighting.
Consequently, he probably would not be unhappy to see the
Christians lose Marj Uyun and may not attempt to limit Pales-
tinian-leftist movements until the Christians have been forced
out of the town.
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ZAIRE: Situation Report
There does not appear to have been much change in
the military situation in Shaba over the past few days. Scat-
tered fighting that began late last week is continuing; the
Katangans may have advanced slightly.
The Zairian government appears to be showing
concern about the possibility of trouble outside Shaba Region
near Lake Tanganyika.
South Africa has publicly denied press reports that
it is aiding the Zairians. A high-level South African security
official who visited Kinshasa earlier this month said that
Pretoria would not send troops or military supplies to Zaire,
since that would hurt rather than help President Mobutu. He
said his government would continue to extend commercial credits
and make fuel available to Zaire.
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Recent successes by insurgents in Ethiopia do not
appear o pose an immediate threat to the ruling military coun-
cil.
Most of the insurgent groups--including the Eritreans,
who have taken several government posts recently--seek separa-
tion from Ethiopia rather than the overthrow of the present
government. The military council's inability to deal effec-
tively with such groups could ultimately lead disgruntled lower
ranking officers to install a new government, but the US em-
bassy in Addis Abab sees no evidence that they have the will,
cohesion, or leadership to act against the council at this time.
Two of the insurgent groups are trying to overthrow
the council. Marxist urban guerrillas of the Ethiopian Peoples
Revolutionary Party can cause trouble in Addis Ababa, but they
are too weak to oust the government by themselves.
The Ethiopian Democratic Union--which wants a mod-
erate, pro-Western government--has taken two important posts
on the Sudanese border, and the embassy believes it could be-
come stronger with Arab help. To overthrow the council, however,
it eventually would have to gain the support of a substantial
part of the military.
POLAND: Trade and Payments Difficulties
/Poland posted a record trade deficit of
$3.3 billion with developed countries in the West last year,
despite a slight recovery in exports and efforts to curb import
growth. With a rapidly rising hard-currency debt--$10.2 billion
at the end of 1976--Warsaw found it increasingly difficult to
arrange for Western loans to cover its trade deficit and debt
service last year. Poland is likely to incur a trade deficit
of $2.5 billion to $3 billion in 1977, thus intensifying its
payments problems and possibly forcing the Poles to seek debt
refinancing. The need to deal with persistent consumer dis-
satisfaction at home makes it more difficult for Warsaw to
cope with its debt problem.//
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Poland needed $5 billion in 1976 to cover its current-
account deficit and debt service. It drew at least $2 billion
in government-backed export credits and almost $200 million in
US Commodity Credit Corporation credits. It also received $300
million in West German payments to the Polish pension fund and
concessionary credits, and may have used most of a $200-million
Iranian credit extended in 1975.
The remaining financing probably was met through in-
crease orrowing from commercial banks. As of September, Po-
land's net liabilities to Western commercial banks had increased
by $1 billion to $4.4 billion.
//Despite its apparent success in obtaining
funds in 1976, Poland appeared to be under a great deal of fi-
nancial pressure. Several attempts to secure additional finan-
cing were unsuccessful
Increasing repayments and difficulties in raising
funds will force Poland to curb imports from the West even
further in 1977. The economic plan for this year calls for a
total import growth of less than 3 percent. Imports from Com-
munist countries are scheduled to rise by 10 percent, indicat-
ing that the regime plans to reduce imports from the West.
Polish officials have, in fact, expressed optimism about hold-
ing hard-currency imports at or below the 1976 level.
Although Poland is likely to find it difficult to cut
imports from the West in 1977, the task is not impossible. A
16-percent increase in planned Soviet oil deliveries to 256,000
barrels per day should enable Warsaw to limit its purchases of
Western oil. Western grain imports can be cut substantially if
there is at least an average grain harvest along with deliveries
of at least 1 million tons of Soviet grain. Imports of Western
plants and equipment will be slowed drastically by the post-
ponement or cancellation of almost $1.7 billion in such pur-
chases.
If the Western economies continue to recover, Polish
arc-currency exports should accelerate this year, rising per-
haps by 15 to 20 percent, to as much as $4 billion. Long-term
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contracts already have assured Poland markets this year for
its major exports of coal copper, sulfur, and ships. Earnings
from raw material exports, however, will depend on world prices
for these commodities.
Depending on the weather, however, Poland may have
to o back on coal exports, as it did last year to counter-
act consumer complaints about shortages. For the same reason,
meat and live animal exports will remain depressed as Poland
tries to cope with domestic dissatisfaction with persistent
meat shortages. If for any reason Poland is forced to increase
imports of consumer goods, its trade balance and payments
position will be further exacerbated.
Poland will have a trade deficit with the developed
West of .5 billion to $3 billion even under favorable cir-
cumstance.---zero import growth, a good harvest, and a 15- to
20-percent growth in exports. We expect that the Poles will
need $4 billion to $4.5 billion in financing this year, to
cover the country's deficit and mounting debt repayments.
Poland can still tap part of a $1.3-billion French
credit-line extended earlier this year, most of a 1976 Cana-
dian credit worth $500 million, and $300 million in West Ger-
man credits and pension payments. Overall, Warsaw can probably
count on at least $2.5 billion from Western government and
government-backed credits. The remainder will have to be sought
mainly from Western banks. Despite growing apprehensions, West-
ern lenders probably will continue to provide Poland with funds
for major projects--albeit stiffer terms.
//In the longer term, Poland cannot keep
cutting hard-currency imports without disrupting its economic
plans. Warsaw will try to get additional financing any way it
can, possibly even by seeking admission to the International
Monetary Fund. Debt refinancing is also an option, particularly
if domestic economic problems worsen ubstantially.//
//Problems with the F-5 fighter aircraft acquired
from the US during the past year are seriously affecting the
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Chilean air force's already limited combat capabilities. The
problems further tilt the Andean military balance in favor of
Peru.//
//The US defense attache in Santiago reports that the
aircraft have faulty afterburner liners and that this problem,
along with a scarcity of spare parts, has forced the air force
to halt all air combat training and curtail other normal train-
ing activities. Only six of Chile's 18 F-5s are operational,
and three of these six are being kept flying through cannibal-
ization of other F-5s.//
//Unless the afterburner problem is solved quickly,
Chile will have little air defense capability and will be
forced to rely on its 30 obsolescent British Hawker Hunter air-
craft. The UK imposed an embargo on delivery of aircraft en-
gines to Chile some time ago, and many of the Hawker Hunters
may not be operational.//
//Peru will soon receive 36 Soviet SU-22 fighter-
bombers, which will pose a greater threat to the Chileans if
their F-5 fleet continues to deteriorate.
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