NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030300010106-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 16, 2016
• Document Release Date: May 11, 2005
• Sequence Number: 106
• Publication Date: October 13, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE 0
Thursday 13 October 1977 CG NIDC 77/238C
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National Intel i ence Dail Cable for Thursday, 13 October 1977
e NID cable is or tfie purpose o informing 25X1
senior US officials.
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SOUTH AFRICA: Government vs. Press
POLAND-FRANCE: Economic Accords
PORTUGAL: Pressure on Socialists
SOUTH KOREA: Diplomatic Ties
BRIEF'S
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//Cuban leaders reiterated in two major policy
speeches ast week that the US must lift the economic blockade
without any Cuban concessions in return before major progress
can be made on other bilateral issues. President Fidel Castro,
in his speech to, a Cuban audience, went on to play down the
importance of normalized relations with the US. Marcelo
Fernandez Font, the Foreign Trade Minster, painted an unreaZis-
ticaZly optimistic picture of potential trade benefits to the
US in speaking to a group of businessmen in Washington.//
//Both men stated that major problems still separate
the US and Cuba and that normalization could be a long and slow
process. They did not rule out the possibility of Cuban compen-
sation for nationalized US properties, but stated that Cuban
counterclaims for US economic sanctions and "aggression" could
exceed the $1.8 billion US claim. Castro also said the US naval
base at Guantanamo Bay remains an irritant that will eventually
have to be resolved.//
business support for improved relations by grossly exaggerating
the potential benefits to the US of normalization. He asserted
that annual US exports to Cuba could amount to $300 million to
$350 million initially and exceed $1.0 billion in three to four
years.//
//Fernandez reflected Cuba's attempt to elicit US
//We believe that US exports could possibly reach
$300 million-$350 million in the first year or two, primarily
because of diversion of Cuban purchases from other Western
countries. There is little likelihood, given Cuba's continued
tight foreign payments position, that exports could reach $1.0
billion in the following two years. Cuba's hard-currency earn-
ings will grow slowly even with a new international sugar agree-
ment. Havana's ability to draw significantly on new credits will
be inhibited by already high debt service obligations.//
//Cuban officials have often stated that the US
share of hard-currency trade after normalization will not reach
50 percent. Under these circumstances, US ex orts to Cuba would
amount to no more than $750 million by 1981.
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Several major South African newspapers are defying
government threats of censorship by demanding official explana-
tions of the death of Steve Biko, the black political activist
who died in police custody on 12 September.
The South Africans have not released the autopsy re-
port on Biko, expected to have been completed by last Monday,
and two English-language papers have threatened to publish fur-
ther details about Biko's death if the government does not pro-
vide the facts soon. The press has already printed reports that
Biko, whom the government claimed died from a hunger strike,
suffered critical injuries to the brain and broken ribs, burns,
and possible kidney failure while in prison.
The government has reacted by lodging complaints
agains two newspapers, including the nation's largest black
paper, through a press council set up to enforce a code of self-
censorship. The press council was established in March after
the government backed down in the face of national and inter-
national protest on enacting proposed strict press censorship
legislation.
I IThe press was given a year's time to censor itself by
means o a press code which includes some of the sweeping mea-
sures that were in the proposed legislation. The press council
can fine a newspaper $11,500 and require a retraction for con-
travening the press code. The government already has the power
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Last month Prime Minister Vorster told a National
to impose censorship over all means of communication in times
of war; this authority was extended earlier this year to cover
periods of internal disorder.
Party congress that the government was watching the press and
was prepared to reintroduce the censorship legislation, which
contains provisions to close newspapers,.if the press did not.
put its house in order within the alloted year.
Prolonged government delay. in reporting the circum-
stances surrounding Biko's death can only increase the tension
between the South African Government and the press. Vorster,
concerned about extensive public criticism of his government,
might then carry out his threat.
POLAND-FRANCE: Economic Accords
Polish party Leader Gierek during his visit to France
as h obtained a French agreement to finance Polish grain
imports and to buy more Polish coal. No major trade or credit
agreements were concluded, however, as occurred during state
visits in 1975 and 1976. The absence of such agreements--to-
gether with the Polish cancellation of negotiations on a Large
French contract--may reflect Poland's need to control its hard-
currency trade deficit and debt by reducing less essential pur-
chases of Western goods on credit.
I Poland accepted the French proposal to deliver up to
600, tons of wheat and barley in the marketing year beginning
August 1977, partly because the French reportedly offered favor-
able terms that allow repayment over a two-year period. The pur-
chase also reflects Poland's disastrous harvest this year and
the resultant need to import record amounts of grain in fiscal
year 1978. In addition, Poland received a $50 million credit
line to purchase French chemicals and semimanufactures.
The Poles persuaded the French to purchase 8 million
tons olish coal over the next 10 years. This amount is in
addition to the annual purchases of 4 million tons that France
is committed to under an agreement signed in 1975. A joint work-
ing group was established to study the possibility for further
expansion of Polish coal exports to France.
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I IThe Poles canceled negotiations on a $600 million
renc id to expand the Gdansk oil refinery. Equipment pur-
chases for the refinery would have been financed under a $1.7
billion French credit line extended in 1975. The cancellation
apparently results from Poland's need to curb new investment
projects that are dependent on hard-currency imports. Poland
also wants to reduce its mushrooming trade deficit with France,
which totalled $440 million in 1976.
//Portuguese President Eanes, in his speech
t zs Saturday-at the opening of the new session of the National
Assembly, will probably try to alert the minority Socialist gov-
ernment that it cannot depend on him for its survival if it is
not willing to take strong action to improve the economy. Eanes
is ZikeZy also to criticize the opposition parties for not work-
ing together in the interests of the country. His speech may
add more fuel to rumors that the government is on the verge
of coZZapse, but Eanes does not yet appear willing to give u
on Prime Minister Soares.
//A hard-hitting speech will enable Eanes to
main ain his distance from the Socialist government and pave
the way for taking a more direct role in government, if neces-
sary, without alienating the public. He has avoided doing more
than exerting behind-the-scenes influence so far but is feeling
the pressure to take a stronger role now that party bickering
has sharpened. He is also probably influenced by his military
staff advisers, who think little of civilian politicians.//
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I The presidential criticism will add to speculation
that e Socialist government, beset by economic problems,
attacks from opposition parties, and dissension within the
party's own ranks, may soon be replaced. The Socialists are re-
portedly planning a cabinet reshuffle in an effort to restore
public confidence in their rule and to counter opposition calls
for a new government.
The surprise resignation this week of Foreign Minister
e Biros Ferreira--who was expected to be replaced in any re-
shuffle---may complicate the plans. The cabinet's announcement
yesterday that it continues to support Soares, however, is
cooling speculation that several key ministers might resign in
sympathy.
The timing of the reshuffle may depend on the Social-
ists a ility to work out a continuation of their legislative
agreement with the Social Democrats. The Socialists are consid-
ering adding some Social Democrats to the government in return
for support in the legislature. The other two major parties,
the Communists and the Center Democrats, are agitating for a
new government and are unlikely to support the Socialists con-
sistently.
I Social Democratic head Sa Carneiro, moreover, has
been es enthusiastic than other party leaders about working
with the Socialists.
/Despite Soares' shortcomings, Eanes still ap-
pears to consi er him the best choice as prime minister and is
reluctant to jeopardize the ties to the West that the Socialists
have forged. Eanes has said that he would prefer a majority
coalition government, but probably realizes that a multiparty
arrangement at this stage would only decrease government effec-
tiveness. He can be expected to resist a more overt role for
himself until most other alternatives are exhausted and until
he can assume more Rower without risk to his popular and inter-
national support.//
SOUTH KOREA: Diplomatic Ties
South Korea is devoting increased attention to im-
proving its ties with other countries at a time when North Ko-
rea has adopted a Low diplomatic posture. Seoul has expanded
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the size and number of its missions abroad, reorganized the
Foreign Ministry, sent top officials abroad for bilateral dis-
cussions, and initiated modest aid programs.
In a growing number of countries with which it has
no official ties--Libya is a good example--South Korea has a
larger physical presence than does North Korea. The South is
also benefiting from the legacy of the North's rough and often
offensive diplomatic style; only a few governments still feel
sufficiently obligated to North Korea to eschew all dealings
with the South.
The increased diplomatic activity reflects several
0 ou Korea's basic concerns. Shaken by the planned with-
drawal of US ground troops over the next several years, Seoul
has decided to expand its foreign relations as a means of de-
creasing dependence on the US. Japan, which has lobbied vigor-
ously for South Korea's interests at the UN, is now also play-
inq_ a significant role in trying to open communications lines
to Communist countries and to sub-Saharan Africa. In the Middle
East, Saudi Arabia is South Korea's key patron; Morocco is
playing a similar, if more modest, role in North Africa.
South Korea is also seeking to strengthen its economic
ties with the Third World because of the mounting protectionism
against South Korean goods among the industrial nations. Seoul
must continue a rapid expansion of exports if it is to meet
economic growth targets and fund its military development pro-
grams.
4 This is also a period of special opportunities. South
Koreas strong economic development is an irresistible attrac-
tion to countries that are seeking development aid and that
appreciate the advantages of employing Korean workers on con-
struction projects.
Seoul continues to regard the Middle East as the area
that offers it the best prospects for economic gain over the
next several years. A stream of Arab ministers has come to Seoul,
including four cabinet officials from Saudi Arabia alone. Seoul,
in turn, has sent its Prime Minister and construction and com-
merce ministers on missions to the region.
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I I The South also has increased attempts to establish
relations with Communist countries, particularly the USSR and
China. Seoul would view a breakthrough in this area as a major
setback for Pyongyang and as a step toward acceptance of a "two
Koreas" status quo.
I I South Korea's interest in law-of-the--sea matters has
substantially increased. A bill establishing a 12-mile terri-
torial sea is now pending, and vigorous efforts are being made
to compensate for the loss of US and Soviet fishing grounds by
signing cooperation agreements with littoral nations in South
America, North Africa, and the Pacific.
Seoul has welcomed foreign defense visitors in an at-
tempt to increase its sales of small arms and ammunition. Mor-
occo, Indonesia, Taiwan, the Philippines, Thailand, Ecuador, and
Chile have sent top military officers to Seoul this year.
I In the coming year, South Korea's attempts to strengthen
its international position are likely to accelerate further. The
size of the Foreign Ministry is being expanded and Seoul is work-
ing to fulfill ambitious plans to establish more missions--both
political and trade--abroad and to conclude a broader range of
cooperative bilateral agreements.
//Brazilian President Geisel has fired his Army
Minister, General Frota, and replaced him with 3rd Army Com-
mander General Bethlem. The official announcement states that
Frota was relieved of his duties for personal reasons, but it
is clear that Frota's maneuverings to promote himself as a presi-
dential candidate caused his dismissal.//
//It is not yet clear how the removal of Frota
will a tec the political future of intelligence chief General
Figueiredo, who seems to be the front-runner to succeed Gei-
sel in March 1979.//
//The elevation of Bethlem opens up a field
comman an provides another slot for promotion to four-star
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general. Should Figueiredo obtain either, it would greatly
Spain
The assembly of the Council of Europe yesterday unani-
mously recommended that Spain be invited to apply for member-
ship. Spain is likely to become a full member before the end of
the year. Portugal was admitted last year.
The admission of Spain into the 19-member Council of
Europe, though not unexpected, will give a psychological boost
to the Spanish Government's efforts to move Spain into the EC.
Senior Spanish officials, however, are well aware that it will
not materially affect the EC negotiations, which will be long
and arduous.
Equatorial Guinea - Spain
Spain plans to withdraw its officials and technicians
rom Equatorial Guinea over the next several months, according
to an official of the Spanish Foreign Ministry. The Spanish
Government decided to do so after Equatorial Guinean President
Macias made an anti-Spanish speech during his visit to Peking
last month. A speech by Macias in March had :Led Spain to suspend
diplomatic relations with its former colony.
J The Spanish intend to set the stage for their pullout
by reminding Equatorial Guinea that it has not lived up to its
commitments to share financial support for certain joint proj-
ects. When the Equatorial Guineans fail to respond positively,
Madrid will react by withdrawing the approximately 150 Spaniards
who are serving in the country. The Spanish Government is con-
cerned, however, that once its intentions become apparent, Macias
may threaten the lives of Spaniards still in the country.
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