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December 20, 2016
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August 8, 2006
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October 6, 1977
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1,11W 'AW 1,11W 'Aw 'Aw 1,11W 1,11W 'A 911 fir APPROVAL COMMENT A yy aw~ T ^NN'Y4~l~klaiWl7~c~cuac wv.,v~,v. .l iuirze cre{, CIA RD 9TOO975AO3O3OO RECOMMENDATION RETURN (Security Classification) Access to this document will be restricted to those approved for the following specific activities: NATIONAL INTELLIGENCE DAILY CABLE Thursday 6 October 1977 CG NIDC 77 233C L 0 1 NATIONAL SECURITY INFORMATION Unauthorized Disclosure Subject to Criminal Sanctions 0 MENEM& State Dept. review completed Top Secret 0 (Security Classification) AW Approved Adw For Release 2007/02/07 : CIA-RDP79T00975AO30300010 96-9 ? - - - ? A AW 25 25X1 Approved For Release 2007/02/07 : CIA-RDP79T00975AO30300010096-9 Approved For Release 2007/02/07 : CIA-RDP79T00975AO30300010096-9 Approved Fo National Intell' Daily Cable for Thursday, 6 October 1977 The NID Cable is for the purpose o inrorming senior US o icials. k5X1 CONTENTS ISRAEL-GUATEMALA: Possible Jet Sale Page 2 OPEC: Improved Port Conditions Page 2 YUGOSLAVIA: Career Rivalries Page 4 FRANCE: Majority Views on Left Rift Page 6 JAPAN: Handling of Hijack Criticized Page 7 CHINA: Oil Production Growth Page 8 PERU: Military-Political Cooperation Page 9 Nigeria Morocco Page 11 Approved Foti 25X1 Approved For Release 2007/02/07 : CIA-RDP79T00975AO30300010096-9 Approved For Release 2007/02/07 : CIA-RDP79T00975AO30300010096-9 Approved For Release 2007/02/07 : CIA-RDP79T00975A010300010096-9 ISRAEL-GUATEMALA: Possible Jet Sale //Israel reportedly is considering a sale of high-performance jet fighter aircraft to Guatemala, according to US Embassy sources in Mexico. Guatemala only recently re- quested fighter aircraft from the US.// In the past year, Guatemala has been seeking fighter aircraft from Italy as well as from Israel and the US. Italy reportedly offered to sell Guatemala 15 SF-260 aircraft, and Israel offered some ageing Super Mystere fighters. Last fall, the Guatemalans apparently decided that both packages were too expensive. The new interest in Israeli aircra t co- cnc:i es with ua ema a s request last month for five F-5E inter- ceptors and one F-5F trainer from the US. Israel may be offering its Mirage aircraft this time.// 1 71 Guatemala wants the $25-million US F-5 package to fill its air defense capabilities and is probably negotiat- ing with Israel in anticipation of a possible US refusal to sell the F-5. I IIn recent years, Israel has been Guatemala's major military supplier, providing transport aircraft, armored cars, small arms, and ammunition. 25X1 OPEC: Improved Port Conditions The unprecedented congestion in the ports of Middle East oil-producing countries since 1975 has eased con- siderably this year. At most ports, ships are encountering de- lays of 30 days or less, a vast improvement over the six- to Approve Approved For R seven-months waiting periods experienced Zast year. Surcharges and demurrage fees have been greatly reduced or eliminated from record ZeveZs of Zast year; damage to cargo also has been reduced. The improvement permits more orderly progress on de- velopment projects. The improvement in efficiency at the ports results mainly from the use of modern shipping technology--primarily roll-on/roll-off ships and containerships. The improvement is most evident at Jidda, where an estimated 25 percent of imports arrived by containerships in 1976. Similarly, roll-on/ roll-off ships--which only began calling at Jidda in late 1975--now deliver one-third of all imports through Jidda. Cargo amounting to 1.4 million tons was unloaded at the port during the first two months of 1977, an amount almost equal to the total cargo unloaded during all of 1974. Cargo-handling efficiency has also been raised, pri- marily through better management methods. In Iran and Saudi Arabia, for instance, the ministries in charge of ports have been reorganized, and incompetent officials have been replaced. Improvements in labor productivity have helped alleviate some problems. Foreign firms and laborers are being hired in increas- ing numbers to handle specific tasks--for example, organizing training programs, arranging cargo within storage areas, and designing custom forms. The performance of local workers is also being slowly upgraded. //The completion of several major port expansion projects as contributed to the reduction in congestion. Iran, Iraq, Saudi Arabia, and other oil producing states have had ex- tensive port development projects under way for the past sev- eral years. By 1985, these countries will have spent at least $15 billion on building new berths and warehouses, acquiring forklift trucks and other handling equipment, and otherwise improving facilities.// Another factor contributing to reduced port congestion in severa countries is a slowdown in the growth of imports. In Iran, for example, the volume of imports entering the country has remained essentially the same since late 1975. In Iraq, im- port volume in the first half of 1977 has actually fallen by about 15 percent. Approved For (Release 2007/02/07 : CIA-RDP79T00975t 030300010096-9 Approved Ff An important byproduct of reduced port congestion and more efficient cargo handling has been a lowering of import costs. At the height of congestion, government officials in Saudi Arabia estimated that damage to cargo left in open storage was driving up import costs at certain projects by 20 percent or more. Similarly, one business official in Iran stated that nearly 10 percent of the equipment that arrived last year was destroyed by rust before it could be put into operation. These problems still exist at all ports to some degree, especially in Iran, but the situation is no longer as serious as it was a year ago. The oil-producing countries still face internal dis- tribution problems. Their inland transport systems are antiquated and inadequately located for present-day needs. During the past three years, the highway and rail systems in Iran, Iraq, and Saudi Arabia have further deteriorated under the massive new import traffic. Iran, Iraq, and Saudi Arabia have drawn up ambitious development plans to remedy their internal transport problems. Between 1976 and 1980, these three countries together will spend about $10 billion on these facilities, triple the amount spent between 1971 and 1975. Most of the programs are focused on upgrading exist- ing net works and providing links to new industrial and mining centers. Except in Saudi Arabia, where highways have already been upgraded considerably, most internal transport projects are still in the design or early construction stages. By the mid--1980s, however, sufficient improvements should have been made to support the ambitious industrial development programs envisioned by these countries. //A resurgence of infighting within the Yugo- s av governmen over the post of defense minister is adversely affecting relationships among some of President Tito's subordi- nates and may also be a factor in the absence of Tito's wife from public view.// I //Defense Minister Nikola Ljubicic has long been reported lie for reassignment at the party congress next May. Last fall, a faction within the military high command moved to Approved Approved oust him and failed. Afterward, several senior officers--in- cluding Under Secretary of Defense Colonel General Djoko Jo- vanic--retired under a cloud.// //The officers involved drew their strength from their mem ership in an influential group of Serbian wartime partisans from the Lika region of Croatia. The Lika Serbs hold a disproportionately large number of key posts in the military hierarchy. Although their generation is heading into retirement, they are maneuvering to maintain influence as long as possible. Since Jovanic's departure, Admiral Branko Mamula, a deputy de- fense minister and commander of the navy, emerged as the Lika Serbs' candidate to succeed Ljubicic.// Communist Party's executive committee--appeared this summer. Dolanc once had aspirations to succeed Tito as party leader, but Edvard Kardelj--Tito's long-time confidant, who has made a surprising recovery from two operations for cancer--has re- portedly trimmed Dolanc's expectations. He now appears to want the Defense Ministry post as a holding position for the future. Competition between Admiral Mamula and Dolanc has become nasty.// /It may be that only Tito himself can stem the rivalry tor e ministry post before it spreads. He probably would like to do so without having to choose at this time be- tween his senior party subordinate, Dolanc, and Mamula, the standard-bearer of a powerful faction in the ministry. Tito could feel compelled to dampen the rivalry before he leaves on a trip to Paris and Lisbon next Wednesday. 25X1 25X1 Approved For Release 2007/02/07 : CIA-RDP79T0097PA030300010096-9 Approved Fo FRANCE: Majority Views on Left Rift The rift in the French Left Alliance over updatin g its Common Program has spurred the parties in the governing center-right coalition to rethink the assumptions of their electoral strategy and to determine how best they can exploit the Left's vulnerabilities. Except for the GaulZists, the par- ties are exercising extreme caution, fearing that by playing their hand too early they could give the Left an issue to rally around and divert attention from the Communist-Socialist feud. All government parties are also aware that whatever benefits may accrue to them from the near-breakdown of the Alliance, the poZZs still show that a majority of the French electorate still intends to vote for the Left opposition next March. In a letter to a meeting of Gaullist deputies Prime , Minister Barre noted last week that the divisions within the Left Alliance had "profoundly modified the political landscape." He made a discreet appeal to voters of all persuasions to sup- port the governing coalition and once a rain underscored tht-_ major campaign role he intends to play. These appeals must be read against the background of a three-year effort by President Giscard to reduce the strength of the Gaullists in the governing coalition and woo the support of moderate Socialists and Left Radicals. The Giscardians and Centrists are convinced that a process is under way by which the left and right blocs in France are being broken down. This fits in with Giscard's game plan, which foresaw that inherent contradictions within the Left would eventually lead to a split and that a consensus might then evolve around an enlarged center representing Giscard's "ad- vanced, liberal" society. I IThe Giscardians are probably hoping that the break they have been predicting for years has finally come and that the dispute in the Left will last until December, at which time it will be difficult for the Left to reorganize its campaign to maximum efficiency. Approved Approved Fc They are wisely taking nothing for granted, however, and are acting on the assumption that the Left will eventually agree to an electoral alliance and that the two sides will go into the March election in more or less their present form. Most speculation within the governing coalition apparently focuses on the possibilities for new combinations after the election. Gaullist leader Jacques Chirac and his party have pre- dictably chosen to interpret the break in the Left differently. The Gaullist line is that the political landscape has not fund- amentally changed; the Socialists, trapped in their "collectiv- ist, Marxist" option, have become the Gaullists' principal target. Chirac has called on Left Radical voters who have be- come disillusioned with the Left Alliance to rally to his party, but he has specifically excluded Socialist voters from his "strategy of welcome." I IThe Gaullists probably had little chance of attracting Socialist voters anyway, but by rejecting their votes in advance they differentiate themselves from the other parties in the governing coalition and hope to deny the Socialists any increased respectability they might gain from a break in the alliance. The Gaullists are concerned that a Socialist party freed from the Communists and returned to its fluid "catch-all" state might f t i o st par try to make serious inroads into the crucial centr d d . e the electorate that is still undeci JAPAN: Handling of Hijack Criticized I Widespread domestic criticism of Japan's tactics dur- z c Dne cent aircraft hijacking by Japanese Red Army terrorists has sparked dissension within the cabinet and political sniping at Prime Minister Fukuda. The episode is unlikely to become a major political problem, however, although Fukuda's opponents in the ruling party and the Diet will use it to attack Fukuda's leadership abilities. ITV,oblem in the cabinet reflects the attempt by t s some minis er government's handling of the incident. Although the Minister of Justice has taken official responsibility for the release of the prisoners and has resigned, criticism has centered on the government's agreement not to request the terrorists' ex- tradition if Algeria permitted the hijacked aircraft to land. e p to insulate themselves from criticism of the Approved For RoIease 2007/02/07 : CIA-RDP79T00975 Approved F Foreign Minister Hatoyama and other Foreign Ministry lurricial s have so far borne the brunt of the criticism for al- legedly giving in to the Algerians without formal cabinet ap- proval. The cabinet endorsed the decision after the fact, but Foreign Ministry officials maintain that they had tacit cabinet approval beforehand. I Aside from the effort by Fukuda's opponents to capi- on the incident, some of the attacks on the Foreign Min- istry have apparently been orchestrated by Chief Cabinet Secre- tary Sonoda, who is well known as an antagonist of the Foreign Ministry. I I Fukuda has sought to contain the controversy, despite is previous agreement with the Algerians, by attempting to open negotiations to return the hijackers. Failing that, the Japanese will undoubtedly stress that they have requested that the Alger- ians prevent the hijackers from leaving the country and ensure that the $6 million ransom not be diverted to terrorist coffers. Some members of the opposition may attack the government's be- havior in the Diet to embarrass Fukuda, but at this point the political contention seems likely to diminish as public atten- tion to the episode wanes. CHINA: Oil Production Growth I A Chinese crude oil production rose by only 10 percent e Zrst eight months of this year compared with the same period Zast year, according to the New China News Agency. This rate of increase indicates that crude oil production will be about 92 million tons this year. I Oil output rose by about 13 percent in 1975 and 1976. The average for 1960-1974 was at least 20 percent. The eight- month increase so far this year is down slightly from the 10.6- percent claim for the first half of the year. There are two apparent explanations for the decline in e growth of crude oil output, although it is not clear which has played the predominant role. The first is that growth in total demand has been declining. Exports have not increased during the last two years because of buyer resistance in Japan, and domestic consumption has been held back by the slow growth of the economy. Approved For Release 2007/02/07 : CIA-RDP79T00974A030300010096-9 I 25X1 Approved F4 The Chinese therefore may have been deliberately hold- ing ack crude production. Peking said as much in 1976, when it announced that crude productive capacity increased by 20 percent during the first half of that year while actual crude output in- creased by only 10 percent. because of equipment breakdowns, internal pipe corrosion, and leakage of sand into pumps. The other explanation is that the industry has been facing increasing technical problems. The leader of a Chinese technical delegation that recently toured US oil facilities said that existing Chinese oilfields are "problem--ridden." He indi- cated that some wells are operating only 25 percent of the time The growth rate at Ta-ching, which accounts for about half of China's oil production, appears to be leveling off. Growth at the next two largest fields, Sheng-li and Ta-kang, is much below past rates. The geology of Sheng-:Li and Ta-kang is unusually difficult, and most of the new wells must be drilled deeper than the 2,000 or 3,000 meters of the earlier wells. E The Chinese also announced a 24-percent increase in natural gas production during the first eight months of 1977. Current. output may be at an annual rate of about 80 billion cubic meters. Chinese industry is not benefiting fully from this gas because an estimated 80 percent of it is being produced in Szechwan Province, where there is no way to transport it to re- gions with the largest concentrations of industrial users. Talks with Japan on importing liquefaction plants to process Szechwan gas for transport are still in the preliminary is l t gas ura stage. Currently, the largest industrial use for na as a raw material for imported urea fertilizer complexes. PERU: Military-Political Cooperation //The head of Peru's military government, Pres- ident Mora es Bermudez, has apparently agreed to cooperate po- Zitically with Victor Haya de Za Torre, leader of the country's largest political party, the American Popular Revolutionary AZ- liance. Cooperation between the two figures could smooth the period leading to the national election scheduled for 1980.// Approved Fc r Release 2007/02/07 : CIA-RDP79T00975 030300010096-9 Approved The 84-year-old party leader's decision not to be a presidential candidate in 1980 because of his age probably con- tributed to Morales Bermudez' willingness to cooperate with APRA. The party has long played a major role in Peruvian poli- tics, but since 1930 the military has repeatedly conspired to keep Haya out of office. I 4The government's principle inducement for cooperation appears to be APRA's broad political base, particularly its strong ties to organized labor. Morales Bermudez will undoubtedly be obliged to impose some further unpopular austerity measures in order to obtain vi- tal credits from the International Monetary Fund and commercial foreign lenders to shore up Peru's troubled economy. Acceptance of these measures by APRA's labor rank-and-file could help avoid a repetition of the widespread demonstrations and protests that forced the government to back down from the austerity program it sought to implement last June. Approv Approved F Nigeria Nigeria has apparently decided on a new policy aimed , at stepping up economic pressure against South Africa to end apartheid. The Nigerian Government has reportedly directed that foreign firms contracting with the Defense Ministry must certify that they have no business or other affiliation with South Africa. It is unclear if this directive applies to other govern- ment ministries as well. I I In the first application of the new policy, Nigerian e en nistry officials told a US firm during recent negotia- tions for the sale of a communications vehicle that a South Africa boycott clause must be part of the contract. Obasanjo said Nigeria might initiate some sort of boycott action In a vaguely worded threat last August, Head of State Approved For Release 2007/02/07 : CIA-RDP79T00975AOP0300010096-9 Approved Fo against foreign firms that do business with both Nigeria and South Africa. Lagos already puts informal pressure on multina- tional firms in Nigeria to ceas nvestment in South Africa. Moroccan King Hassan dismissed his cabinet last ni ht g and asked Prime Minister Ahmed Osman to form a new one, accord- ing to an official communique. A cabinet reshuffle has been expected since parlia- mentary elections were held in June. The reshuffle is a prelude to the opening of Parliament later this month--the first time it will have met since the early 1970s. I IThe King, for cosmetic purposes, will probably appoint some members of opposition parties to non-sensitive cabinet positions. He is likely to keep old line loyalists in the sen- sitive posts. His policy is to divide and rule, and he will continue to make all important decisions. Approved Adr Approved For Release 2007/02/07 : CIA-RDP79T00975AO30300010096-9 Top Secret (Security Classification) 0 1 1 1 1 1 1 1 1 1 1 1 Top Secret (Security PE(dif gonQr Release 2007/02/07 : CIA-RDP79T00975AO30300010096-9