NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030800010022-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: July 6, 2012
• Sequence Number: 22
• Publication Date: August 12, 1978
• Content Type: REPORT

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Top Secret 210,
(Security Classification)
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0 Access to this document will be restricted to
those approved for the following specific activities:
NATIONAL INTELLIGENCE DAILY CABLE
0 Saturday 12 August 1978 CG NIDC 78/188
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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25X1 A
Top Secret
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National Intelliaence Daily Cable for Saturday, 12 August 1978.
g
senior US officials.
The NID Cable is for the purpose of-informin
LEBANON: Military Situation Report
PORTUGAL: Soares Won't Join Government
EGYPT: Levels of Arab Aid
Malta
Ghana
-Er nana
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LEBANON: Military Situation Report
The cease-fire in Beirut was threatened Zast night
by a lareup in fighting between Christian militiamen and Syrian
troops. There are significant differences within the leadership
of the Christian Phalanges Party over the current efforts to
negotiate an end to the crisis in the city.
Relative calm prevailed during daylight yesterday,
but fighting broke out last night. The Syrian command announced
that an extremist militia group opened fire on Syrian troops,
who retaliated with artillery fire. Beirut Radio reported that
efforts were under way to restore the cease-fire.
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Portuguese Socialist Leader Soares announced yester-
day that his party--Portugal's Largest--would not participate
in a government formed by independent technocrat Alfredo Nobre
da Costa. Another prominent Socialist has informed the U3 Em-
bassy, however, that the party will probably allow Nobre da
Costa's government to take office and may even want it to con-
tinue in power until elections in 1980. Socialist refusal to
associate itself with the government will seriously impair ef-
forts to assemble a viable cabinet and would appear to condemn
the government to a weak, transitional role.
Calling President Eanes' appointment of a non--Social-
ist "unconstitutional," Soares told reporters that "it does not
make sense to us that the Socialists, elected by the people as
the biggest party, should not continue to govern." He added
that his support of Nobre da Costa's government would depend
on its composition and policies.
With Socialist participation ruled out, Nobre da Costa
faces the prospect of heading a government that lacks connec-
tions with the country's most important political networks. Only
the Center Democrats offer whole-hearted support. The Social
Democrats, though conservative, see no advantage in joining a
weak administration, and the Communists are ideologically unac-
ceptable.
Soares may be trying to force Nobre da Costa into an
eventual admission that he cannot form an"effective government.
In that event, Soares could hope that Eanes would nominate a
Socialist who would have a much better chance.
There is a possibility that the Socialist ac:tign
could throw the country into a grave dilemma. Already incensed
by Soares' efforts to circumscribe his authority as President,
Eanes could use Socialist recalcitrance as a pretext for declar-
ing the present legislative arrangement untenable. An election
would have to be held; it would, be regulated by outdated laws
that could make the results illegal. Eanes might then see no
alternative to declaring a state of emergency and assuming gov-
ernment powers himself until the impasse was sorted cut.
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he succeeds in putting together a cabinet, the Socialists are
ready with a longer term game plan. Socialist International Sec-
retary Rui Mateus claims that his party would extend only lim-
ited cooperation to such a government, but that it would be will-
ing to let it stand until the regularly scheduled elections in
1980.
Nobre da Costa, however, is not likely to give up. If
their long-neglected grassroots supporters for elections. If
held now, elections would find the party disorganized in com-
parison to its strongest opponent, the Social Democrats. A few
months in opposition would give the Socialists a chance to re-
'cover from a significant decline in popularity and to compete
more effectively with the Communists on their left.
The Socialists would use this interregnum to prime
could well be destructive to the emerging government's efforts
to mount an effective economic recovery policy. Any significant
success is likely to be seen as a threat to the Socialists and
to prompt active opposition that would almost certainly bring
the government down.
Viewing the crisis in such narrowly partisan terms
early elections are near completion.
ists would prompt a crisis until legislative preparations for
that a No re da Costa government could survive for more than a 25X1
few months. It still seems doubtful, however, that the Social-
Given the Socialists' cynical views, it is unlikely
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EGYPT: Levels of Arab Aid
The aid ails a ra donors.
,f far short of Egypt's expectations and of recent
estimates of its needs by the International Monetary Fund and
the World Bank. Unless larger amounts of new aid can be ob-
tained before the end of the year, Egypt could find itself
pushing against the short-term borrowing limits set by its re-
cent agreement with the IMF,.
az promised
2 at a meeting on 27 July of a group of wealth A L
Egypt is disappointed with the amount of 7
Egypt had been hoping for new commitments
f
600
o
$
million to $1 billion in quickly disbursable grants or long-
term loans, but the Gulf Organization for the Development of
Egypt--a donor organization composed of Saudi Arabia, Kuwait,
the United Arab Emirates, and Qatar--granted only $250 million
in debt relief for 1978 and 1979 and promised substantial debt
writeoffs in subsequent years.
The Gulf donors contended that cash flow bl
declinin pro ems,
g petroleum revenues, and the falling value of the
dollar limit their ability to provide more economic assistance.
Although these are important problems, the conservative Arab
states of the Persian Gulf may also be trying to retain their
economic leverage in an attempt to ensure that President Sadat
is responsive to their interests in peace negotiations with
Israel.
a
greement
with the IMF to make further economic reforms temporarily re-
moves this longstanding Arab excuse for delaying new aid com-
mitments.
ian financial management, although Cairo's recent
rVV1
F _j During 1976 and'1977, the Gulf donors committed $2
billion in loans and guarantees to Egypt. All but $100 million
of this money has been used to pay off foreign debt arrears,
which reached $1 billion early in 1977, and to help Cairo cover
its remaining foreign financial gap in 1977 and the first half
of 1978.
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and a like sum in 1979. Cairo will find it difficult to borrow
and World Bank estimates that Egypt needs $600 million i 1978
The latest aid commitment falls short of recent IMF
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the remaining funds needed, even though the writeoff of its
debts to the Gulf donors should improve its credit rating. Al-
though the donors promised to help Egypt secure $150 million
in short-term commercial credits, sharp increases in Cairo's
short-term borrowing are limited by the terms of the IM]a agree-
ment. Egypt, moreover, lacks the credit standing needed to raise
large amounts through medium- and long-term commercial loans.
The Iranian Government has declared martial law in
the city of Isfahan, the first time that such a measure has
been used for nearly 15 years. There have been extens=ive riots
and demonstrations in Isfahan for the last week, some directed
against Americans. The demonstrations stem from the commemora-
tion of the death of a prominent clergyman and have apparently
been encouraged by another clergyman who recently returned to
Isfahan after being exiled to another city two months ago for
participating in earlier demonstrations. He has once again been
arrested.
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highly publicized liberalization program indicates a high degree
The declaration of martial law in. the face of the
of concern on the government's part but also reemphasizes the
Shah's point that violence for political ends will not be tol-
Prime Minister Mintoff may be on the verge of carrying out his
threat to turn to Libya for the bulk of his economic assistance,
as a result of the West European failure to meet his demands
for aid by 31 July.//
//According to Maltese Attorney General Mizzi,
Ambassadors, Mizzi admitted that the decision is not firm, but
he expressed confidence that Mintoff will move toward taking
the "Libyan option." Mizzi restated some of the old Maltese
demands, such as direct budgetary subsidies instead of project
assistance or loans.//
//In recent conversations with the US and French
probably make a more definitive statement on the matter after
his return to Malta on 12 August.//
negotiated-with Mintoff believe the negotiating process has
not been derailed, although it may be delayed. Mintoff will
//Both the US Embassy and a French diplomat who
for most of his aid after the British withdraw, he may be doing
so on nothing more than faith. Qadhafi is'parsimonious with cash,
and in fact is inclined to deemphasize cash aid in favor of
technical assistance or equipment transfers. Although he has
publicly promised aid to Malta, there is no evidence that he
has agreed to give Mintoff the kind of help he has been demand-
//If Mintoff is really thinking of a turn to Libya
ing from the Europeans--$200 million over a five-year period.
position to Head of State General Akuffo's plan to transfer
power next year to a transitional, nonparty civilian government
to rule for at least four years.
Politically aware Ghanaians are expressing their op-
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reaching political changes, and many Ghanaians favor an early
lifting of the ban on political parties and a swift return to
a civilian party-based government.
The coup last month raised expectations for far-
Akuffo s transitional government scheme, indicating that
Akuffo's efforts to gain the support of professionals to work
for political and economic reform are in jeopardy. This could
generate new frictions among military leaders who want to re-
Ghana's bar association this week came out against
turn the army to the barracks as soon as possible.
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