NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030500010066-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: May 17, 2006
• Sequence Number: 66
• Publication Date: February 10, 1978
• Content Type: REPORT

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Friday 10 February 1978 CG NIDC 78/034C
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
dkENEWD
State Dept. review completed Top Secret 25X1 0
(Security Classification)
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National Intelligence Daily Cable for Friday, 10 February 1978.
The NID Cable is for the purpose o informing
senior o icials.
LEBANON: Situation Report
Page 2
USSR: Winter Grain Conditions
Page 5
GREECE-TURKEY-CYPRUS: Relations
Page 6
WEST GERMANY: Economic Growth
Page 7
UK: Wage Settlement Victory
Page 8
JAPAN: Foreign Exchange Controls
Page 10
PHILIPPINES: Pol
BRIEFS:
itical Maneuvering
Page 10
Page 11
Romania
Syria
Canada-USSR
Paraguay
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LEBANON: Situation Report
//Heavy fighting between Lebanese Christian
militiamen and Syrian peacekeeping troops continued yesterday
in Beirut and the suburb of Fayyadiah. Christian Phalanges
Party, Palestinian, and Lebanese Muslim leaders are urging
restraint. There has been no official Israeli reaction, nor
any unusual Israeli military activity along the Lebanese bor-
der./1
In the fighting, Syrian forces in the al-Shiah sec-
tion of Beirut exchanged rocket and artillery fire with Chris-
tian forces in Ayn Rummanah. There were also reports of heavy
fighting in the Christian area of Ashrafiyah. Senior Lebanese
and Syrian officials are meeting in Damascus in an attempt to
arrange a cease-fire.
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The Syrians are demanding that the Lebanese turn
over to them the Christian military commander, who the Syrians
believe was responsible for the initial clashes at Fayyadiah
on Tuesday, in which Syrian forces took substantial casualties.
Neither the government nor Christian leaders of the Lebanese
Front are ready to meet the Syrian demand for the arrest of
the army commander, and cease-fire efforts are apparently being
held up by this issue.
//The Palestinian leadership probably is concerned
that any significant involvement in the current fray will serve
only to intensify anti-Palestinian sentiment in Lebanon. Syria,
moreover, doubtless is strongly counseling restraint by the
Palestinians.//
Lebanese Muslim leaders are also urging their fol-
lowers to remain calm. Former prime ministers Rashid Karami
and Abdallah Yaffe, both moderate Muslims, issued calls for
restraint. There have been only isolated reports of activity
among Lebanese leftists forces, and the heavily Muslim areas
of western Beirut have remained quiet.
The Israelis' low-key behavior thus far
robabl
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p
y re
flects their hope that the fighting will diminish quickly and
not become a major issue that could complicate peace talks with
the Egyptians.
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Israeli Defense Minister Weizman, the cabinet offi-
cial responsible for policy on Lebanon, has taken special pre-
cautions since the beginning of negotiations with the Egyp-
tians to avoid provocative entanglements in Lebanese affairs.
He will favor continued caution and will counsel Israel's
Lebanese Christian allies against escalating hostilities with
the Syrians.
Should the Syrians inflict major military losses
upon Christian forces, however, the Israelis would see no al-
ternative to providing logistic or other support essential for
the Christians' defense. The Israelis would also perceive less
need for restraint in support of the Christians should Pales-
tinian military units, with apparent Syrian backing, attack
Christian positions in southern Lebanon or elsewhere in the
country, or should Palestinian guerrillas stage cross-border
tprrnrist raids or rocket attacks on northern Israel.
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USSR: Winter Grain Conditions
The USSR's winter grain crop--normally about
one-third of total grain production--has thus far sustained
only an average amount of winterkill. About one-third of the
winter grain area has at best minimal snow cover, however, and
is vulnerable to sudden cold snaps. Assessment of the full ex-
tent of this winter's damage cannot be made until late sprincq.
Because winterkiZZed areas will be reseeded to spring grains,
even more than normal losses this winter would not necessarily
preclude a successful 1978 grain harvest. A crop of 205 million
tons, the midpoint of a range indicated by the projection of
past yield trends, would suggest Soviet imports of 20 million
to 25 million tons in marketing-year 1979.
Winter grain sowing operations last fall were largely
successful. Favorable weather in the main winter grain areas of
the European USSR allowed seeding on about 38.5 million hectares.
This is equal to the area sown for the 1977 harvest and roughly
3 million hectares above the average for the last five years.
//Despite some localized problems, crop develop-
ment during the fall was favorable. Gradual cooling from mid-
September to early October hardened plants in most areas, making
them less susceptible to freezing. By mid-October, winter grains
in the northern regions had entered winter dormancy and growth
in the southern winter grain areas had slowed.
//Most of the damage done thus far occurred be-
tween mid-December and mid-January. A succession of high pressure
systems moved slowly across the northern European USSR, bringing
cold arctic air into the southern winter grain areas. Freezes
to -22 degrees Celsius were common, with temperatures as low as
-20 degrees reported as far south as Krasnodar. Because of un-
seasonably warm weather in November, plants in some areas had
renewed growth and were not sufficiently hardened to withstand
severe cold. In addition, snow cover over much of this area was
not adequate to insulate the crop.//
//For the USSR as a whole, the area lost to win-
terkill thus far appears to be no greater than average, roughly
15 to 20 percent of the sown area. Conditions have been variable,
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however, and in some localized areas losses are believed to be
substantial. Poor emergence and exposure to killing frosts have
lowered yield. prospects for much of the central black earth
zone.//
//In some parts of the important winter grain
producing areas of Moldavia, the Ukraine, and the north Cau-
casus, frequent exposure to killing temperatures without ade-
quate snow cover has led to above-average winterkill.//
Although the area with at least minimal snow cover
has expanded since mid-January, much of the winter grain area
remains snow-free and vulnerable to extreme temperatures. Alter-
nate periods of thawing and freezing, which can cause widespread
damage, are common from mid-February through mid-April.
Although areas lost during the winter will he reseeded
to lower-yielding spring grains, above-average winterkill would
not preclude a successful 1978 grain crop. Soviet plans call
for a harvest of 220 million tons, which is almost 25 million
tons above 1977 production.
Projection of past yield trends, employing varying
assumptions regarding 1978 weather prospects, indicate that
expectations for a crop of between 195 million and 215 million
tons would be more reasonable. A crop within this range, which
is by no means certain, would leave the Soviets short of the
grain required to continue the current strong recovery of the
livestock program and would necessitate imports. For example,
a crop of 205 million tons, the midpoint of this range, suggests
Soviet imports in marketing-year 1979 (October 1978 - September
GREECE-TURKEY-CYPRUS: Relations
//The prime ministers of Greece and Turkey have
agreed to an exploratory summit meeting sometime next month to
establish a "climate of confidence" in bilateral relations.
The meeting will be the first between leaders of the two coun-
tries since May 1975.//
//The initiative for the meeting was taken by
Turkish Prime Minister Ecevit, who is looking for a foreign
policy success to consolidate his position and help secure
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badly needed military and economic aid. Greek Prime Minister
Caramanlis was equivocal at first, fearing that Ecevit was
more intent on improving Turkey's image than on finding solu-
tions to the Cyprus and Aegean disputes.//
//Caramanlis has dropped his demand that there
first be progress at lower levels, and both leaders now view
the meeting as exploratory. Caramanlis' recent meetings with
major West European leaders may have contributed to his change
of mind. It is also possible that the new Turkish administration
has already relayed to the Greeks its general approach to the
Aegean and Cyprus problems.//
//Comments by Turkish officials to US Embassy
officers suggest that on the Aegean, the Turks are not in prin-
ciple opposed to the Greek plan for delimiting the coastal
shelf. The Greeks envisage a series of alternating finger-like
salients, with the Greek salients encompassing the easternmost
Greek islands and the Turkish salients extending midway into
the Aegean. The Turks would prefer an emphasis on joint exploi-
tation and a minimum coastal shelf for each side.//
//On Cyprus, the Turks apparently intend to
submit etaile constitutional proposals. Their as yet unpub-
licized plans on territory have reportedly drawn fire from the
Turkish Cypriot leadership, suggesting that Ecevit may intend
to offer more than a token return of territory to the Greek
Cypriots.//
//The Ecevit administration's position on the
Aegean will become clearer on Sunday, when talks on the coastal
shelf resume in Paris. Turkish proposals on Cyprus will be re-
layed to UN Secretary General Waldheim later this month. He
will then determine whether they warrant a resumption of the
intercommunal talks, probably sometime in March before the
Caramanlis-Ecevit summit.
WEST GERMANY: Economic Growth
West German ChanceZZor Schmidt, in his mid-January
state-of-the-nation address, cited data from the First National
City Bank of New York to support his contention that the West
German "locomotive" alone does not have sufficient power to
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pull other developed countries out of recession. The Citibank
figures purport to show that 1-percent faster economic growth
in West Germany would generate additional growth of only 0.05
percent in the UK and 0.07 percent in France, but these figures
appear to be based on incomplete analysis.
I lAnalyses by the Organization for Economic Cooperation
and Deve opment's secretariat and by CIA suggest that increased
West German growth would have a significantly larger -mpact on
the economies of its principal trading partners. The Citibank
data referred to by Schmidt apparently include only the direct,
first-round impact of faster West German growth and ignore the
ripple effects of international trade linkages.
I lAccording to preliminary OECD calculations, which
include nth the direct and indirect effects, 1-percent faster
growth in West Germany, sustained for 12 months, would add
about 0.2 percent to GNP in the UK, 0.3 percent in France, 0.4
percent in Italy, and about 0.5 percent in Scandinavia and
the Benelux countries. CIA's linked-trade model shows slightly
smaller increases than those of the OECD: 0.18-percent incre-
mental growth in the UK, 0.24 percent in France, 0.2 percent
in Italy, and just under 0.4 percent in the smaller developed
countries.
UK: Wage Settlement Victory
//British Prime Minister Callaghan extended his
string of wage settlement victories yesterday, when the ex-
ecutive committee of the National Union of Miners accepted
in principle the government's pay offer. Radical union leaders
have condemned the decision but appear powerless to stop it.
Unions that have not yet come to terms with the government
will now be under increased pressure to settle.//
//The settlement, which will give the miners a
wage increase close to the 10-percent limit set by the Prime
Minister, is the government's biggest success to date in its
current effort to control inflation. Initially, the union de-
manded a 90-percent increase.//
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//The government's hand was strengthened by ear-
lier settlements with other unions that stuck to the guidelines
and by a lack of support for the miners from the Trades Union
Congress and other unions. The government was also bolstered
by the improving economic picture; inflation is dropping even
faster than the government had anticipated.//
//Possibly the most important point in the govern-
ment's favor, however, has been the gradual acceptance in every
mine region--even the most radical--of lucrative productivity
incentive schemes to supplement income. At the outset of nego-
tiations, when the union was more confident, such schemes were
rejected by the national membership.//
//The situation is far different from that in 1974,
when militant miners, with the support of then opposition spokes-
man Callaghan, were able to topple the Conservative government
of Prime Minister Edward Heath. The current mine leaders have
accepted the government's offer as a "fact of life." Only a
few die-hard radicals continue to call for rejection of the
pact and a campaign of industrial action, although even they
now seem resigned to the inevitable.//
//Details of the settlement, including its size,
will be worked out between the two sides during the next two
weeks. After that, the executive committee will formalize its
acceptance. Yet undecided is the question of placing the pack-
age before the 250,000-member union for rank-and-file approval.//
//Government negotiators will now turn to other
unions in an attempt to preserve the incomes policy. Although
agreement with the miners strengthens Callaghan's hand for the
future, the government still faces several difficult tests,
each requiring cautious maneuvering. Talks with the electric 25X1
power workers will begin soon, and will be followed by talks
with railway workers, gas and steel workers, shipbuilders, gaso-
line tanker drivers, civil servants, and others.
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JAPAN: Foreign Exchange Controls
relax foreign exchange controls. The program stems from the
mid-January US-Japanese agreement calling for a sweeping re-
view of Japan's foreign exchange control system as one step
toward reducing its balance-of-payments surplus.
The package, scheduled to take effect on 1 April,
Japan announced a 12-part program Late Last month to
provides for the following, in order of importance:
-- Procedures will be simplified for overseas direct in-
vestment by Japanese, direct investment in Japan by
foreigners, the introduction of foreign technology
in Japan, and overseas real estate investments by
residents of Japan.
Standard Method of Settlement regulations will. be re-
laxed to give importers more flexibility in their
financial arrangements.
Limits on certain transactions--for example, on remit-
tances sent abroad, currency acquired for travel over-
seas, and foreign currency bank deposits--wil.l be
raised or removed.
One of the most significant aspects of the package
appears to be the increased role it assigns to the Bank of
Japan in monitoring the foreign exchange system. For example,
in the case of direct investment in Japan, the bank will ap-
parently replace the Ministry of International Trade and In-
dustry as the final voice on approvals. The ministry in the
past has generally responded to pressure from Japanese industry
and resisted foreign investment in Japan. In view of sagging
profits and substantial excess capacities, Japanese industries
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PHILIPPINES: Political Maneuvering
The decision by the major opposition group in the
Philippines--the resurrected Liberal Party--to boycott the 7
April parliamentary election is aimed at seriously undercutting
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 President Marcos' effort to demonstrate the Legitimacy of the
first election held under martial law. Some opposition figures
may, however, form another slate or run on an individual basis.
Marcos had attempted to mollify opposition critics
barracks on election day. Liberal Party leaders, however, ob-
jected to a provision of the new electoral code permitting the
voter to cast his ballot for a straight pro-Marcos ticket.
by meeting some of their demands, such as non-partisan super-
vision of the polling booths and confining the police to their
Marcos has already moved to counter the boycott by
Party, some liberals, and members of civic organizations, to
run in the election. The Philippine leader evidently hopes to
create an atmosphere of political give-and-take as candidates
maneuver to have their names included on the pro-Marcos slate.
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announcing the formation of a new political organization called
the "New Society Movement," a coalition of pro-Marcos elements
including legislators from Marcos' pre-martial law Nationalist
The political campaign is scheduled to get under way
officially on 17 February. Marcos intends to appoint a number of
cabinet members to parliament but has told several others--in-
cluding Defense Secretary Enrile--that he expects them to com-
pete in the election. In addition to Marcos, 14 parliamentary
representatives will be elected from pro-Marcos sectors of la-
bor, agriculture, and the national youth movement. The remain-
ing members of the 200-man body will come from the Philippines'
14 provincial regions.
There are reports that Mrs. Marcos hopes to head the
list of candidates from the Manila region in what would be her
first bid for elective office. She was appointed governor of
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Egyptian President Sadat will visit Romania this
weekend, presumably to brief President Ceausescu on the out-
come of his talks in the US and Western Europe.
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Ceausescu fully supported Sadat's peace initiative
in November, and he no doubt believes that a peaceful settle-
ment would vindicate his decision to maintain diplomatic re-
lations with Israel when the other Warsaw Pact states broke
relations in 1967.
I In recent public speeches, Ceausescu has reiterated
Romania s position that there must be a complete Israeli with-
drawal from the occupied territories, the establishment of a
Palestinian state, and a security guarantee for all the states
in the region, including Israel.
Syria
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Syrian President Asad, running unopposed, was re-
elected on Wednesday to a second seven-year term. A massive
government and Baath Party effort ensured that voter turnout
was relatively high, although probably nowhere near the 97 per- 25X1
cent the government claimed. Asad is certain to portray the re-
suits as an overwhelming mandate for his current policies, es-
pecially his opposition to Egypt's peace initiative.
//Canadian External Affairs Minister Jamieson an-
nounced in Parliament yesterday that 13 Soviet officials were
being expelled from the country for espionage. Jamieson said
that all 13 had been involved in an attempt to recruit a member
of the Royal Canadian Mounted Police in order to infiltrate
the Security Service. Jamieson said that a strong protest has
been conveyed to the Soviet authorities about these activities.
The Canadian Ambassador to Moscow will not be withdrawn, but
Jamieson will cancel his planned visit to the USSR next month.
The Canadian Government and the RCMP will both win domestic
approval from the incident.
Paraguay
I Paraguayan President Stroessner is sure to win another
five-year term in the general election on Sunday. He has been
President for 24 years. In the past year, the constitution has
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been amended so that he can succeed himself indefinitely, and
the government has maneuvered the traditional opposition parties
out of the picture by officially recognizing two discredited
minority factions.
The voting probably will not need to be rigged be-
cause Stroessner is genuinely popular and is given credit for
the economic expansion and political stability the country has
experienced during his regime. Stroessner is staging the elec-
tion primarily to improve Paraguay's image abroad.
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