NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030300010006-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: February 14, 2006
• Sequence Number: 6
• Publication Date: August 13, 1977
• Content Type: REPORT

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Saturday August 13, 1977 CG NIDC 77-188C
DIA review(s) completed.
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NATIONAL SECURITY INFORMATION
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NATIONAL INTELLIGENCE DAILY CABLE 0
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CIA-RDP79T00975A0303000W6secret
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National Intelligence Daily Cable for Saturday, August 13, 1977.
The NID Cable is for the purpose o intorming
senior US officials.
CONTENTS
LEBANON-ISRAEL: Situation Report
ETHIOPIA-SOMALIA: Situation Repor
t
Page 1
Page 2
ZAIRE:
More Debt Relief
Page 5
GUYANA:
BRIEFS:
Economic Difficulties
Page 7
Page 9
Chile
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LEBANON-ISRAEL: Situation Report
I I The military situation in southern Lebanon
t-7 ~] has no c ange much in recent days, although fairly heavy
shelling continues. The Israelis are making contradictory as-
sessments of the situation there and may be trying to build a
case either for military intervention or a US demarche to the
Syrians.
I The Palestinians assert that the Israelis initiated
a heavy 'artillery barrage against Nabatiyah late Thursday and
that an Israeli infantry company attempted to enter Yarun yes-
terday but was repelled. The Palestinians clearly fear an im-
pending Israeli attack.
Lebanese army commander Khury told the US defense
attach e ursday that he and Foreign Minister Butrus agree that
Lebanese army units should not be sent to the south to imple-
ment the Shaturah agreement until a cease-fire is in effect
and Palestinian forces have withdrawn from the border area.
Khury believes he would need at least two weeks to execute any
order to proceed south. At present, he is placing token forces
in barracks in the south and sending selected officers into the
area to lay the groundwork.
//Senior Israeli officials, meanwhile, continue
o asser at the Christians are in desperate straits. Chief
of Staff Gur told the US defense attache that he believes the
Christians' ability to hold out against the Palestinians may
collapse without continued and perhaps increased Israeli
assistance.//
//Gur indicated that he opposes a major Israeli
military incursion into southern Lebanon at present and has
prevailed for now over senior Israeli military officers who
favor such a strike. Gur would not estimate the limits of Is-
raeli patience, but urged that the US take immediate action
to defuse the situation by encouraging Syria to persuade the
Palestinians to withdraw north of the Litani River.//
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the Israeli chief
of
planning
believes
that
the
pre
sent combina-
tion of Israeli a
nd
Christian
forces is
sufficient
to maintain
a "satisfactory situation" in the south until some alternative
can be worked out to provide security in the border area.
//We continue to believe, based on our own reading
o e si ua ion in southern Lebanon and contradictory assess-
ments from the Israelis, that Israeli leaders are trying to
build a credible case either for direct military intervention
in southern Lebanon or for the need for a US demarche to the
Syrians to rein in the Palestinians. The Israelis may calculate
that either move would harm US efforts to encourage the Pales-
tinians to adopt a more moderate negotiating position.//
//Indeed, Syrian President Asad would probably re-
gard such a demarche as unwarranted US pressure on Israel's
behalf. As such, it could well weaken US credibility with both
the Syrians and the Palestinians.//
ETHIOPIA-SOMALIA: Situation Report
Somali forces in the south apparently intend to
attempt to extend their control over parts of Bale and Sidamo
provinces beyond the area traditionally claimed by Somalia.
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Ethiopia
has already given up considerable groun in e sou , includ-
ing all the territory bordering on Somalia and part of that
bordering on Kenya. A few outposts remain, but they are sur-
In recent weeks, it has become evident that the
territorial claims of the Western Somali Liberation Front ex-
tend deep into Ethiopia, beyond the area inhabited by ethnic
Somalis and historically claimed by Somalia. Somali Liberation
Front maps shown to Western journalists lay claim not only to
the Ogaden but to all of Bale, Sidamo, and Arusi provinces.
I IThe area outside the Ogaden includes much of the
homeland of the southern branch of the Galla ethnic group,
which has a long history of opposition to control by Addis
Ababa. There was an active anti-government insurgency in Bale
and Sidamo in the late 1960s, but organized operations ended in
1970 when Waqo Guto, one of the major insurgent leaders, ac-
cepted a government amnesty.
I The Gallas, with support from Somalia, renewed the
fighting in late 1975 when the ethnic Somali insurgents became
active. Last year, Waqo Guto went to Somalia and
led an organization called the Oromo Libera-
tion Front; romo is the traditional name of the Gallas. The
Oromo Front, however, never developed a separate identity. The
guerrilla bands in Sidamo and Bale appear to be a mixture of
Gallas and ethnic Somalis. The absorption of the Gallas into
the Western Somali Liberation Front was eventually :formalized.
Wago Guto is the chairman of the Front's politbureau and denies
knowledge of an Oromo Liberation Front.
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The Somali Liberation Front's broad territorial claims
may be a political ploy aimed at future negotiations with Ethio-
pia. The Gallas probably want substantial autonomy for their
territory and do not wish to be subordinate either to Addis
Ababa or Mogadiscio. Somalia, by supporting Galla insurgents,
helps tie down Ethiopian troops that could be used in the Oga-
den. The Somalis may intend to use the Galla territorial claims
as a bargaining chip to pressure Addis Ababa into making con-
cessions in the Ogaden.
I IThe claims of the Somali Liberation Front will stiffen
Etniopian resistance to a negotiated settlement. If the Galla
succeed in wresting, control of their territory from Addis Ababa
it might encourage separatism Ethiopian ethnic
groups.
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!/Despite repeated debt rescheduling, Zaire's
economy remains near bankruptcy. The economy has contracted
for three consecutive years as a result of balance-of-payments
problems, stagnating copper output, and the effects of nation-
alization programs. The government continues to overspend, and
the resulting budget deficits have contributed to rapid infla-
tion. We foresee no basic improvement in the economy, and Zaire
will continue to need substantial foreign debt relief at least
through 1978.//
//Lack of restraint in government spending and
e arop in copper output have kept the economy in a severe
financial bind since 1974. During that year, the oil import
bill more than doubled, while imports of raw materials and
intermediate goods rose more than 50 percent.//
//Although stringent import controls cut foreign
purchases s arp y in 1975, the collapse of world copper prices
depressed export earnings by an even larger amount. At the same
time, capital inflows fell by a half in the wake of Mobutu's na-
tionalization program. By the end of 1975, net foreign reserves
had declined to $39 million--less than two weeks' worth of
imports--and the foreign debt had climbed to $1.7 billion.//
//The three-year decline in real economic growth
has been accompanied by an inflation rate accelerating to 80
percent because of the general supply squeeze and a huge in-
crease in government spending.//
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//In the past 15 months, Zaire has negotiated nearl\
700 million in debt rescheduling and new loan commitments, in-
cluding about $100 million in bilateral assistance from the US,
the UK, West Germany, France, and other Western governments.
An agreement signed in London last November provided for a
$250-million loan if interest arrears were paid up and interest
payments kept current. Although Zaire has met this condition,
terms for the loan still have not been agreed on.//
//Zaire's continuing need for foreign assistance
as placed President Mobutu in a dilemma. Foreign creditors are
demanding economic reform, but Mobutu may face a political risk
if strict austerity and reform measures are followed. Zaire has
promised to curb government spending, control wages, and limit
credit expansion. As part of an agreement with the International
Monetary Fund, Zaire devalued the currency 42 percent in March,
agreed to prolong import controls, and reversed its nationaliza-
tion policy.//
//Living up to most of these conditions already is
proving difficult. Budget expenditures continue to rise and
tight wage controls will be nearly impossible to enforce. Al-
though Kinshasa has started a denationalization program, many
foreign firms are unwilling to return.//
//Zaire will need $550 million this year to cover
its current-account deficit plus amortization of its medium-
and long-term debt. Even if Zaire received all the foreign
funds now committedp however, it would still need more than
$200 million. Because Zaire's poor credit rating limits access
to even short-term markets, the financial shortfall probably
will lead to further arrears on debt repayments.//
1//Mobutu has recently promoted the idea of a
"Marshall plan" for Zaire. Most creditor governments view the
plan as duplicative and as an attempt to escape close interna-
tional economic supervision. Kinshasa's commitment to economic.
reform was called into question this week by the firing of
Central Bank Governor Sambwa, the only independent economic
adviser close to Mobutu. Mobutu said that Sambwa's dismissal
marks the beginning of a purge of civil servants. The purge
could further shake the confidence of Zaire's creditors if
other competent civil servants connected with economic stabili-
zation are dismissed.//
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'/Zaire probably will require additional emergency
debt relief next year. A strong comeback in copper exports is
not in store, given continuing transport problems and the weak
copper market, while the surge in coffee earnings is already
running out of steam. As a result, little or no gain is ex-
pected on the export side. With import volume still 30 percent
below 1974 levels, further cutbacks will be difficult to absorb.
Zaire faces foreign debt payments of $450 million in 1978.
I IGuyana's economic difficulties, brought on by
a tightening foreign exchange squeeze, have worsened markedly
in recent weeks. With an election due by next July, these prob-
lems, including industrial layoffs and labor strife, spell
trouble for the ailing Prime Minister Burnham.
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//Guyana's balance-of-payments problems began to
intensity last year as a result of falling sugar prices and
production shortfalls in bauxite and rice. Sugar, bauxite, and
rice together account for about 80 percent of Guyana's export
earnings. Guyana achieved a record spring rice crop this year,
but low sugar prices, which the government says are below pro-
duction costs, and the continuing lackluster performance in
bauxite production have slowed the recovery. Early this year,
the government was forced to resort to drastic import restric-
tions and other austerity measures.//
//The inability to import needed materials has
led many private and state businesses--some of which are them-
selves foreign exchange earners--to make major cutbacks in
work forces and in some cases to talk of shutdowns. Labor-in-
tensive industries, such as garment making and food processing,
have been particularly hard hit. Spare parts shortages, more-
over, are hampering the maintenance of production equipment. A
government official stated recently that inability to import
spare parts has kept more than half of the government's trans-
portation equipment out of operation.//
Austerity measures already on the books are likely
to slash imports this year 16 percent below the 1976 level.
Finance Minister Hope indicated this week, however, that fur-
ther import cuts will be required if new loans are not forth-
coming soon. In order to maintain even the current low level
of imports for the rest of this year, Guyana needs at least
$50 million in new financing. The country's gross foreign ex-
change holdings are reportedly less than $20 million--enough
to cover only three weeks' imports.
So far, Guyana has had little success in securing
major foreign financial assistance. The government has been
seeking a loan of $47 million from Trinidad and Tobago--so far
to no avail--and Burnham plans to travel to Libya later this
month in search of aid. The foreign minister went to Libya in
June; he returned with a promise of $5 million.
Guyana's economic difficulties have resulted in
mounting political problems for Burnham. In recent months his
support, particularly among workers, has begun to erode. The
opposition People's Progressive Party, led by Cheddi Jagan,
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has been quick to try to exploit the situation by striking al-
liances with radical splinter parties that have had some recent
success in appealing to Afro-Guyanese workers hitherto loyal to
Burnham.
On Tuesday, Jagan moved to take advantage of Burnham's
difficulties and the divisions within the ruling party by call-
ing for the creation of a national patriotic front. This appeal
is apparently directed at the left wing of Burnham's People's
National Congress in an effort to woo members who are dissatis-
fied with the more moderate course he has recently pursued. It
is unlikely that any members of the ruling party would be will-
ing to join such a front, but Jagan's gambit will increase
pressure on Burnham to shift leftward.
I The Chilean government's announcement that it will
revoKe e decree creating the notorious secret police, the
National Intelligence Directorate, should help improve its
human rights image. President Pinochet had been under fire
from civilian and military officials for months to curb DINA's
absolute powers.
I I Some of DINA's police powers presumably will be as-
sume By the Carabineros and, according to press reports, a
National Information Center will be formed to gather intelli-
gence "to safeguard national security." Some armed forces in-
telligence units have also been responsible for the abuses
that have occurred in Chile; it is not yet clear whether they
are affected by the shakeup.
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