NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030400010020-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 20, 2016
• Document Release Date: December 7, 2006
• Sequence Number: 20
• Publication Date: October 27, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
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 Approved For Rel
National Intelligence Daily Cable for 27 October 1977
T e NID a e is or a purpose o in orming
senior US officials.
EGYPT: Sadat's Six-Day Trip
BOLIVIA: Elections in 1978
UK: Economic Stimulation Package
USSR: Reaction to Hijacking
INDIA-USSR: Desai's Visit Ends
BRIEFS
Lebanon-Israel
Australia
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 JAMAICA-CUBA: Castro's Visit
I Cuban President Castro's state visit to Jamaica
from 16 to 21 October appears to have helped Prime Minister
Manley strengthen his control over the ruling People's National
Party following a period of serious factional quarreling.
Castro's restrained performance also allayed some Jamaican
suspicions of the Cuban leader. A new bilateral cooperation
agreement signed during the visit assures a continuing Cuban
role in Jamaica.
In a major public speech on 17 October, Castro ac-
knowledged Jamaica's right to follow its democratic path to
socialism and pledged not to intervene in the country's in-
ternal affairs. Local Marxists who would like to replace Man-
ley were given the clear impression that Havana's strong ties
to the Jamaican Prime Minister and his party do not depend on
ideology. Castro's ringing endorsements of Manley throughout
the visit--as well as his subdued references to the US--also
served to undercut criticism from radicals of Manley's shift
in recent months to a friendlier attitude toward the US.
//Castro's performance even received an enthusi-
astic response from moderates in Manley's party, who emerged
on top in the latest episode in the continuing intraparty ri-
valry. Finance Minister Patterson, the leader of the moderate
faction and a credible rival for party leadership, matched the
Prime Minister's glowing testimonials for the Cuban leader.//
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Castro and Manley also succceeded in overcoming some
l Jamaican worries about closer ties between Cuba and Ja-
l
oca
maica. The Cuban leader, projecting himself as a man of warmth
and moderation, was particularly effective in a wide-ranging
discussion with influential Jamaican church leaders, who gen-
erally have been cool to the Cuban revolution. Castro never
came across as the totalitarian Communist dictator portrayed by
the opposition Jamaica Labor Party--which, to its political
disadvantage, boycotted the visit.
To tighten the Cuban-Jamaican bond, the two leaders
signed a new bilateral cooperation agreement that continues
Cuban technical assistance to Jamaica.
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I Manley stressed that C'iban aid, in contrast to assist-
ance from "imperialist" countries, was offered "without strings."
There is some evidence, however, that Cuba's technical assistance
has political overtones. The Kingston press this week reported
that local Cuban-trained construction workers have formed a
Marxist-Leninist group that is to be affiliated with the ruling
party.
I Manley's political gains will be short-lived unless
he can spark a sharp economic recovery. The newly ascendent
moderates, moreover, still have to show that their policies can
lead to improved conditions or the radicals will regain their
influence.
I The US decision on Monday to postpone the announcement
of its proposed $63 million aid package is likely to rekindle
old tensions in Manley's party. A Jamaican official has already
warned a US Embassy officer that the US move may lead to local
speculation that Jamaica is being punished for the Castro visit
and that the US is using aid as a political weapon. Such remarks
reflect Manley's own views in the recent past; this is an issue
25X1 that has divided party moderates and radicals for most of the
past two years.
For his part, Castro probably left Jamaica confident
that his visit was successful. By rallying strongly to Manley's
support at a time when the Prime Minister was losing credibility
25X1 with party radicals, Castro has further strengthened his personal
ties with Manley.
I he Cubans, moreover, are well aware of the current
balance of forces in Jamaica and in Manley's party. They are
willing to be patient with the Jamaican leader as he adapts to
economic realities and to the demands of Western lending in-
stitutions.
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EGYPT: Sadat's Six-Day Trip
Egyptian President Sadat this weekend will begin a
six- ay trip to Romania, Yugoslavia, Iran, and Saudi Arabia.
Although he will be discussing bilateral issues with his hosts,
Sadat's main purpose will be to coordinate support for the
25X1 Arabs in the current effort to reconvene Middle East peace
talks.
For some time, Sadat has been stressing his strongly
held belief that European and nonaligned countries should be-
come more involved in efforts to resolve the Arab-Israeli con-
flict, and he presumably is undertaking this visit to under-
score the point. The officially guided Egyptian press in the
past several days has been warning against depending too heavily
on the US and the USSR to end the dispute and has suggested
25X1 that true peace may come only by shifting the peace process
from the "super-power to the nonaligned context."
Sadat added Saudi Arabia to his itinerary
We
have no in orma ion on the reasons for the Saudi invitation,
but we presume they involve current Arab maneuvering with re-
gard to the US working paper on reconvening the Geneva confer-
25X1 ence.
25X1-timetable on '-9 November--the third anniversary of the formation
of an aZZ-military government in Bolivia. Banter's plan moves
up the election date from 1980 to mid-1978, and it reportedly
includes the appointment of an interim executive so that
Banzer can resign from the presidency six months before the
election and run as a civilian candidate. The President has
been consolidating support in his administration and in i.l.e
military for an early election.//
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I //A close adviser to Banzer told the US Embassy in La
Paz recently that Interior Minister Pereda, a loyal confidant
of the President, and Foreign Minister Adriazola are the most
likely candidates for the job of interim president. Banzer
apparently is still discussing his political plans with his
advisers, however, and few firm decisions have been made.//
//Last week, Banzer made a three-day tour of the coun-
try's most important military bases to ensure support from major
unit commanders as well as to bolster his image among the armed
forces--his main base of support. He already has the concurrence
of the military high command and his cabinet for his new elec-
tion timetable. Changes in four cabinet posts earlier this month
no doubt were intended to reinforce the President's position,
and the recall of several ambassadors to La Paz last week prob-
ably is also related to his campaign to consolidate support.//
//One of the major factors influencing Banzer's de-
cision in favor of an early election is his interest in disas-
sociating himself from the stalemated corridor-to-the-sea nego-
tiations with Peru and Chile. With Banzer resigning to run for
election, an interim president would inherit responsibility for
the emotional issue of whether to exchange territory with Chile
to obtain an outlet to the Pacific.
government.
I There is some feeling in the Banzer administration
that, in the event of a Peru-Chile war in which Bolivian terri-
tory was violated, Bolivian requests for assistance from the US
would be more favorably considered if they came from an elected
r UK: Economic Stimulation Package
/British Chancellor of the Exchequer Healey has
announced an economic stimulation package that includes reduced
personal income taxes and increased government aid to the hard-
pressed construction industry. The stimulus amounts to $1.8 bil-
Zion for the remainder of the fiscal year ending 31 March 1978
and calls for an additional $3.5 billion boost in the 1978-79
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fiscal year. This level of stimulation could push real GNP growth
next year to perhaps 3 percent but will probably reduce by more
than half the previously anticipated $3 billion surplus in Bri-
tain's current account. Plans for 1978-79 may be revised, how-
ever, before formal submission of the budget next spring.//
/Britain's economic recovery has slowed this year
because of austerity measures aimed at improving the balance of
payments and curbing inflation, which is running at about 16 per-
cent annually. With real GNP expected to advance only 0.6 per-
cent in 1977, unemployment has risen to a postwar high of 1.45
million (seasonally adjusted).//
/While London has wanted for some time to give the
economy a much-needed shot in the arm, improvements in the bal-
ance of payments and renewed confidence in sterling have only
recently enabled the government to take positive action. The cur-
rent account swung into the black in the third quarter and is
likely to show a surplus of perhaps $300 million for the year
as a whole, compared to a $2.7 billion deficit in 1976.//
//Another factor permitting the new reflationary
measures has been the unexpected low level of government borrow-
ing so far this year. Under the 1976 agreement with the Inter-
national Monetary Fund for a $3.9 billion standby credit, Brit-
ain obligated itself to keep public sector borrowing within a
$15 billion ceiling. Even with the increased fiscal deficit,
caused by the reflation package, the government estimates 1977-
78 fiscal year borrowing at only $13 billion.//
//The main aim of the package is to prevent the
bleak unemployment picture from worsening. By stimulating con-
sumer spending through income tax reductions and by expanding
government expenditures, the government hopes to generate 30,000
new jobs in the first quarter of next year and a total of 170,000
new jobs by the end of 1978-79 fiscal year.//
//The tax cuts will boost personal disposable income
by $1.6 billion in the remainder of the current fiscal year. For
the 1978-79 fiscal year, Healey proposed a $2.1 billion tax re-
duction, hoping that the resultant rise in real disposable in-
come will help moderate trade union wage demands.//
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25X1 //Government spending will increase next year by
$1.8 billion. Of this amount, about $700 million will go directly
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into the construction industry.
I
Soviet press commentary following the Lufthansa hi-
USSR: Reaction to Hijacking
jacking has put the USSR on record as opposed to air piracy
and indicates that Moscow may be willing in the future to coop-
erate more with other states and the UN in dealing with the
problem. At the same time, the Soviets have used the incident
as an occasion to attack the West's refusal to return hijackers
from Eastern Europe and the USSR.
25X1 The Soviet press has carried several articles related
to the hijacking. On 19 October, Pravda, Izvestia, and Krasnaya
Zveszda ran a TASS statement describing the incident as a "crim-
inal act" by "isolated elements of an anarchist-leftist band"
aimed at provoking a reaction that would play into the hands of
right-wing extremists in West Germany. On the same day, Izvestia,
without comment, also carried UN Secretary General Waldheim's
condemnation of hijacking.
Immediately after the TASS statement appeared, the
Soviet press began a series of articles accusing the West of
following a "double standard" in hijacking cases. Last week,
a TASS commentary noted that a father and son in October 1970
seized a Soviet passenger plane, killed a stewardess, and
forced the crew to land in Turkey. According to TASS, both men
are now free and living in the US.
I The TASS commentary also observed that none of the
persons involved in a hijacking of an Aeroflot flight in May
or of a Czechoslovak flight on 11 October have been returned
to the USSR. The 1970 case was the subject of a press conference
by the Soviet Foreign Ministry on Monday and a Pravda commentary
on Tuesday that argued that nothing can be done about hijacking
as long as the West refuses to return Soviet and East European
hijackers.
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Missing from all the commentaries is the standard So-
viet line that terrorist acts such as hijacking are the result
of the international political, social, and economic systems
and that the reactionary and imperialist forces that perpetuate
these systems are as much to blame as the individual terrorist
groups. The Soviets may have abandoned this line because of the
recent hijackings of the Soviet and Czechoslovak planes; the
argument could be turned against the Soviets and prove embarrass-
ing.
The Soviets probably have always been uncomfortable
with the terrorist issue. While they have opposed terrorist
acts, including hijacking, their willingness to cooperate with
the UN or other powers has been constrained by their ties to
Arab radicals and national liberation movements. Recent hints
that some of the Arab states are beginning to reassess their
positions on the question may be allowing the Soviets to adopt
a more cooperative attitude.
Earlier this month, an Izvestia correspondent assailed
the Japanese Red Army for its alleged Maoist tendencies, and
Pravda commentary this week referred favorably to the current
UN deliberations on terrorism. According to West Germany's
Ambassador to the USSR, the Soviets honored a West German re-
quest during the Lufthansa hijacking and asked South Yemen not
to allow the plane to land in Aden.
Soviet President Brezhnev and Indian Prime Minister
1esai appeared satisfied at the outcome of the Prime Minister's
just-concluded visit to the USSR. In their joint communique re-
leased yesterday, the two leaders emphasized that the principles
of the Indo-Soviet Friendship Treaty of 1971 would continue
but that the treaty would not interfere with either nation's
pursuit of relations with third parties.
The communique was unexceptional, citing many areas
of agreement reached on bilateral and other international
issues. At a press conference, Desai referred to a Soviet "com-
mitment by implication" to continue economic aid to India. Ac-
cording to the communique, the two leaders agreed that next
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year they will draw up a long-term program to develop major
sectors of the Indian economy through mutually beneficial ar-
rangements and two-way trade exchanges.
The Indian press service, in describing a long ses-
sion between Desai and Brezhnev on Tuesday, reported that the
two leaders were able to establish good personal rapport. It
noted, however, that Desai was "disarmingly frank and outspoken"
in dealing with some issues, including nuclear disarmament. He
was described as taking strong exception to the "double stand-
ard" set by the nuclear powers in their relations with nuclear
have-nots.
I Desai was equally vehement, according to the press
service, in pressing the needs of the developing nations and
the importance of an equitable international economic order.
The two leaders apparently were careful to avoid raising po-
tentially contentious bilateral issues such as the rupee-ruble
exchange rate.
Lebanese authorities held an inconclusive meeting
with Israeli officials on Tuesday and canceled a session sched-
uled for today to discuss the implementation of the Shaturah
agreement. The Lebanese Government apparently is still having
trouble working out arrangements with the Palestinians for a
withdrawal of their forces from southern Lebanon--one of the
principal Israeli prerequisites for allowing Lebanese Army units
to move into the border area. 25X1
I Irime Minister Fraser today announced that a general
election will be held 10 December. At stake are all the seats
in the House and one-half the seats in the Senate.
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