NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030300010038-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: September 7, 2006
• Sequence Number: 38
• Publication Date: September 1, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday September 1, 1977 CG NIDC 77-204C
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
DIA review(s) completed.
State Dept. review completed
Top Secret
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National Intelligence Daily Cable for Thursday, 1 September 1977.
T e NID Cable is for the purpose o informing
senior o icials.
CONTENTS
POLAND: Panic Buying and Hoarding
ISRAEL: Labor Party Disarray
RHODESIA-ZAMBIA: Feira Air Strike
RHODESIA: Election Returns
CYPRUS: Makarios' Successor
USSR-US: Attack on Toth Revived
USSR-SOMALIA: Siad Visit Ends
FRANCE: Fifth Missile Submarine
SWEDEN-USSR: Baltic Fishing Zones
BRIEFS:
France
Finland
China-Yugoslavia
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POLAND: Panic Buying and Hoarding
L Harvest shortfalls caused by floods have resulted in
oar zng of flour, rice, and groats by Polish consumers, and
serious shortages of these staples could develop. The regime
has told the public that supplies will be sufficient to meet
demand, but such assurances will not satisfy consumers once
they see empty shelves.
Twice last week the Warsaw daily Zycie Warszawy pub-
lished stories of "panicky" consumers who had been buying up
available stocks of flour "for a rainy day." The paper admitted
that "many" stores had run out of supplies.
We do not know how widespread the hoarding is, but
the fact that this sensitive subject has been raised publicly
is indicative of high-level concern. In recent years Polish
consumers have been prone to hoard at the first sign or rumor
of a shortage. Once a hoarding cycle begins, it is difficult
to halt.
I ILast summer, consumers were convinced that there was
a s or age of sugar, and the government finally had to impose
rationing in order to assure equitable distribution. If it can-
not quash the rumors or keep local stores supplied with grain
staples this month, it could be forced to adopt another ration-
ing plan.
The regime had been counting on a good harvest to
help boost livestock production and thus curb discontent over
continuing meat and other food shortages. This, the third suc-
cessive inadequate grain harvest, will assure that discontent
remains high and could exacerbate political infighting within
the leadership.
ISRAEL: Labor Party Disarray
The US Embassy in Tel Aviv has reported recently on
the pro ems confronting Israel's Labor Party. We agree that
the party faces formidable obstacles as it attempts to recover
from its election defeat in May.
The Embassy reports that the Israeli Labor Party has
yet to emerge from the doldrums of its election defeat and
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seems unlikely to be able to oppose the Begin government ef-
fectively for some time. Burdened with a largely discredited
leadership and serious factional divisions, Labor continues
to lose popular support.
A recent public opinion poll indicated that if a
national election were held now, Labor's parliamentary strength
would drop from its present 32 seats to 24, while Begin's
Likud Party would win an unprecedented outright majority. The
same poll also showed that nearly 70 percent of the electorate
thought Begin was the best choice for prime minister; less
than 10 percent favored former Labor Prime Minister Rabin,
Begin's closest competitor.
0
and the
levels.
between
:En contrast to Begin's strong leadership of his party
government, Labor's ranks remain split at nearly all
Labor's leadership continues to suffer from the rivalry
party chairman Peres and Rabin.
Although Rabin is still regarded as head of the
party's centrist Mapai faction, his inept leadership as prime
minister and the revelation of his illegal bank accounts in
the US are credited by most party members as prime factors in
Labor's defeat at the polls last spring. Rabin, accordingly,
has little chance of replacing Peres at the party's top spot
or serving again as prime minister. His sniping has served
mainly to disrupt Peres' attempts to unify the party's squab-
bling factions.
I un addition to personal feuding, the party also is
spilt over what strategy to adopt in opposition. On the left,
leaders of the Ahdut Ha'Avoda faction are quarreling over the
degree of militancy the party should assume. Some argue in
favor of a close alliance with the Mapam party, Labor's small
left-wing partner in the Labor Alignment, and for aggressive
opposition to Begin on all fronts. In particular, these mili-
tants favor using Labor's control of the giant Histadrut labor
federation to challenge government economic and social policies.
I I Many in the Ahdut faction and the party generally
regar t is strategy as unrealistic. They suspect the militants'
approach could enable Begin to turn the tables on Labor by cut-
ting off vital government subsidies and support for the Hista-
drut's wide-ranging business and labor enterprises.
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Many Ahdut leaders reportedly also suspect that Peres,
himse a hardliner on many Arab-Israeli issues, and other
party conservatives are looking for an opportunity to break
away from the party and join a Likud-dominated national unity
government, possibly in tandem with disgruntled members of the
Democratic Movement for Change.
While the threat of an imminent war with the Arabs
or a serious confrontation with the US over peace negotiations
might well provoke such a development, it seems unlikely for
the present. Peres and conservative Democratic Movement leaders
probably aim for the time being to keep their distance from
Begin. In particular, they probably hope to exploit the criti-
cism leveled at Begin for his recent decisions on Jewish settle-
ments on the occupied West Bank, which some sectors of the
electorate have seen as poorly timed and as likely to damage
US-Israeli relations.
I Some moderate Labor leaders are pushing for the for-
mation o a new political coalition made up of centrist Labor
groups, the Democratic Movement, and the Liberal wing of Likud
and excluding both the Ahdut faction and Mapam.
Such a prospect is unlikely to be attractive either
to the Liberals in Likud, who have every reason to be satisfied
with their politically profitable marriage to Begin, or to the
Democratic Movement. Many Democratic Movement leaders would
fear domination by Labor or at the least would be apprehensive
that the Democratic Movement's reformist credentials would be
destroyed.
Peres has conceded privately that it will take some
time to reorganize his party and rejuvenate its image. Among
the party's top priorities will be to win back former Labor
supporters who defected to the Democratic Movement and to make
inroads into Likud's popularity among younger voters and dis-
advantaged Jews who immigrated to Israel from North Africa and
Asia.
Labor also faces the problem of presenting viable
alternatives to the policies of the Begin government. Peres'
and Rabin's criticism of Begin's handling of US-Israeli rela-
tions, for instance, have been somewhat muted, partly because
of the reluctance of Labor leaders to undermine Begin's posi-
tion at home on the eve of possible crucial peace negotiations.
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proven skillful in blurring differences between Labor and Likud
on peace issues by stressing the two parties' agreement on many
key points, including their opposition to a Palestinian state
on the West Bank, the participation of the Palestine Liberation
Organization in Geneva peace talks, and Israeli withdrawals to
the pre-June 1967 borders. Labor leaders probably hope that
they will be in a better position to offer alternatives to
Likud on domestic issues and may seek to do so when the govern-
ment eventually comes before the Knesset to present its economic
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and social programs.
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Begin and Foreign Minister Dayan, moreover, have
RHODESIA-ZAMBIA: Feira Air Strike
The Zambian Government yesterday announced that Rhode-
sian avrcraft had dropped several bombs at Feira in southeast
Zambia near the Rhodesian and Mozambican borders.
The incident reportedly was preceded by an exchange
of fire between Zambian and Rhodesian troops. The initial Zam-
bian statement, however, termed the attack "preplanned," and a
shrill reaction can be expected. President Ka.unda recently pre-
dicted Zambia would be attacked by air from Rhodesia.
This would be, if confirmed, the first known Rhode-
sian air strike into Zambia, although there have been numerous
such raids into Mozambique. The Rhodesians may have spotted a
guerrilla group in the area; there have been numerous cross-
border firing incidents in recent weeks. They may also have in-
tended the air attack as a warning to the Zambians to clamp
down on guerrilla activity originating in Zambia. A Rhodesian
communique said only that two positions on the Zambian side of
the border had been "neutralized " without indicating the method.
RHODESIA: Election Returns
Rhodesian Prime Minister Smith appears to have won
in yesterday-is election the mandate he was seeking to proceed
with his own settlement plan. By late in the day, his Rhodesian
Front had won in the 35 white constituencies where vote count-
ing had been completed. The party took almost 90 percent of the
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vote in these constituencies, suggesting that its candidates
very likely will also gain most of the remaining 15 seats re-
served for whites in the 66-seat parliament.
Even the incomplete returns show a sharp rebuff for
e two opposition parties that sought to challenge Smith's
leadership of the whites. The right-wing Rhodesian Action
Party, formed recently by 12 members of Parliament who broke
with Smith's party, opposes any constitutional settlement that
would result in black majority rule. The liberal National Unify-
ing Force advocates acceptance of the British-US settlement pro-
posals.
I I Smith is meeting today with Ambassador Young and
British oreign Secretary Owen on the British-US proposals,
even though during the election campaign he indicated that he
would take a victory as a mandate to go ahead with his own
settlement plan. According to one press report, he will soon
announce the names of moderate black nationalists whom he will
invite to join a new broad-based government.
I Although Spryos Kyprianou yesterday was
ee are 2n-erzm president of Cyprus to fill out the remainder
of the late President Makarios' term, the contest to fill
Makarios' other role as Archbishop is in full swing. Given the
Church's formidable political clout, the results of the contest
will have a major bearing on the regularly scheduled presiden-
tial election in February.
The Archbishop of the Orthodox Church of Cyprus is
selected in a three-tiered indirect popular election that is
not expected to be completed before late November. The front-
runner is the acting Archbishop, Bishop Chrysostomos of Paphos,
who was close to Makarios before the latter came to resent his
aggressiveness. Chrysostomos has exhibited a propensity for
political involvement and for ultra-nationalist and leftist
rhetoric--a trait that is not unusual among members of the
Greek Cypriot clergy.
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I I Chrysostomos has secured the support of the "coali-
tion e ind Kyprianou--the interim President's centrist Demo-
cratic Front and the Communist and Socialist parties. In return,
Chrysostomos apparently has agreed to support Kyprianou for the
presidency in February.
//Pitted against Chrysostomos is Bishop
rysan_ os of Limassol, who was also close to Makarios.
Chrysanthos is known for his probity and general moderatio
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well as his belief that the Church should lessen its involvement
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of Chrysostomos to withdraw; last week there was an apparent
attempt to bomb his residence. He is said to be despondent and
contemplating dropping out of the race on the grounds that it
has been politicized and that its outcome is a foregone conclu-
sion.
J If, as seems likely, Chrysostomos is elected Arch-
bishop, he can be expected to involve himself heavily in the
presidential campaign and in the domestic and foreign policies
of the Greek Cypriot community, using the prestige of his of-
fice and. the Church's vast wealth as instruments of influence.
Although there is a slight chance he may even make a play for
the presidency, he is more likely to support Kyprianou.
I I Chrysostomos' backing, together with support from the
e --w ich views Kyprianou as the most malleable candidate--
will make Kyprianou a formidable contender if illness or pres-
sure from his centrist and rightist colleagues do not force him
to withdraw. If he does withdraw, Chrysostomos might be tempted
to run himself. Alternatively, Chysostomos could throw his sup-
port to someone like Greek Cypriot negotiator Tassos Papadopoulos
or a nonpolitical candidate. He is unlikely to support Clerides.
USSR-US: Attack on Toth Revived
After a six-week silence on the subject, Soviet media
yester ay revived the attack on Los Angeles Times newsman Robert
Chrysanthos has come under pressure from su
ort
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Toth, who was interrogated at Length by the KGB before Leaving
Moscow last June and was subsequently charged by Tass with en-
gaging in espionage.
A long article in yesterday's Literary Gazette sought
to document this charge by quoting from a letter allegedly sent
to Toth by a former US Embassy military attache. The Literary
Gazette piece is part of an ongoing Soviet effort to restrict
the access of Westerners to the local population in the USSR
by portraying unofficial contacts between Western newsmen and
embassy officials with Soviet citizens as constituting espionage.
Tycally, the Literary Gazette article concludes that the US de-
sire for a "free flow of information" is a subterfuge designed
to facilitate the collection of intelligence information in the
USSR.
I The harshness of the Literary Gazette article was
tempere by two facts. Consistent with other Soviet press at-
tacks on US Embassy officials this year, yesterday's article
named only US officials no longer stationed in the USSR. Second,
the article did not link Toth's activities to the investigation
of any Soviet dissident.
Earlier KGB questioning of Toth had focused on his
relationship with arrested Jewish dissident Anatohy Shcharansky,
who may eventually be tried for treason and who has previously
been attacked by name in the Soviet press. A Foreign Ministry
official, when questioned about the article by a US Embassy
official, said he thought the article was directed at Soviet
readership as a response to the Western defense of Toth that
many Soviets had heard on the Voice of America and "from other
sources."
//The Soviet news agency Tass announced
yes er ay a omaZi President Siad had Left Moscow after two
days of discussions with Premier Kosygin, senior party secre-
tary and ideologist SusZov, and Foreign Minister Gromyko. Siad
apparently did not meet with President Brezhnev, who is re-
portedly vacationing in the Crimea.//
/In reporting Siad's visit, Tass noted that
bo "sides exc anged opinions on questions of mutual interest,"
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 Approved
an indication that the Soviets and Somalis could find little
to agree on and are still at loggerheads over Somalia's role
in the Ogaden. Siad's visit was in response to a request from
Brezhnev, who reportedly dispatched a plane to Mogadiscio to
bring the Somali President to Moscow. The invitation was part
of Moscow's continuing effort to mediate the Somali-Ethiopian
conflict.//
//According to the official Egyptian news agency,
is stopped in Cairo on his return trip yesterday and talked
with President Sadat. Siad has sought close cooperation with
Egypt on Red Sea security matters, and he no doubt briefed
Sadat on his talks with Soviet leaders. Siad very likely also
pressed Sadat for more military aid in Somalia's struggle
against Ethiopia.
FRANCE: Fifth Missile Submarine
//France will launch the fifth, and Zast, of its
e ou a e-class ballistic missile submarines this month. In-
stead of building more of this class, the French are developing
a new submarine to be armed with multiple-warhead missiles.
The first of the new class is likely to be operational in the
mid-1980s.//
//The last Redoutable-class submarine, called the
Tonnant, will be launched from Cherbourg on 17 September, ac-
cording to US defense attaches in Paris. It will have to under-
go outfitting and sea trials and probably will not enter active
service until 1980. The Tonnant will be equipped with new M-20
missiles, each of which can carry a one-megaton warhead to a
range of some 3,000 kilometers.//
//France had originally planned to build a sixth
rine o this class but suspended construction last year.
The sixth boat is now expected to be the first of a new, smaller
class of submarine armed with M-4 multiple warhead missiles.//
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SWEDEN-USSR: Baltic Fishing Zones
I The USSR and Sweden, contrary to earlier expectations,
apparen y are ready to work out a compromise on fishing zones
in the Baltic Sea.
I The Soviets had been expected to stand firmly with
other Ba tic states in opposition to Sweden's claim to 45 per-
cent of the Baltic as its fishing zone. In the past Moscow had
refused to discuss national fishing zones in the Baltic, pre-
ferring instead the present catch-quota system.
The Soviets' apparent willingness to work out an
arrangement with Sweden will serve to soften the strong objec-
tions of the other littoral states voiced shortly after the
Swedish announced their claim. The littoral states will meet
next week in Warsaw.
Finland, which is concerned about maintaining good
relations with the USSR and Western countries, feared that a
prolonged dispute could develop between the USSR and Sweden.
Denmark, West Germany, Poland, and East Germany will have little
choice but to follow the pattern set by the Soviets.
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//France announced yesterday a modest package of
re a ionary measures, as expected. Prime Minister Barre told
reporters that the measures include supplementary credits for
large industrial projects, aid for public works, allowances
for school children, financing for subsidized housing, and a
reduction in the discount rate. The package is valued at about
$800 million.//
//These measures will give a small boost to the
economy wni e not violating Barre's basic policy of fighting
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inflation. The economic impact will not be great, but the mea-
sures will demonstrate the government's concern over slow eco-
nomic growth. Barre undoubtedly hopes to defuse some of the
left's criticism of his handling of the economy before
elections next March.
Finland
Finland announced a 3-percent devaluation of its cur-
rency on Wednesday. The decision to devalue the Finnmark by
less than the recent Swedish devaluation of 10 percent probably
is aimed at trying to limit political rhetoric during the presi-
dential campaign this fall and to mollify the labor unions. In
April, Finland devalued by nearly the same amount as Sweden.
A devaluation at this time in step with Sweden's would
trigger nationwide labor contract negotiations. Finland's
governing five-party, left-center coalition, put together by
President Kekkonen in June, could be pulled apart if labor
troubles were added to economic stabilization efforts now under
way.
China-Yugoslavia
I ton the second day of his state visit to China, Yugo-
slav President Tito continued to receive the warmest Chinese
welcome for a foreign visitor in recent memory. He held "cord-
ial and friendly" talks yesterday with Chairman Hua Kuo-feng
and became the first foreigner to pay his respects at the mauso-
leum of Mao Tse-tung. Four of China's top five leaders have now
met with Tito, clearly demonstrating Peking's intention to
counter Moscow by strengthening 25X1
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