CENTRAL INTELLIGENCE BULLETIN

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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
FROM. NAME, ADDRESS, AND PHONE NO.
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(Security Classification) 25X1 0
Top Secret
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NATIONAL INTELLIGENCE DAILY CABLE
Friday 25 August 1978 CG NIDC 78/U-2
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National Intelligence Daily Cable for Friday, 25 August 1978.
NID Ca e 1s fort e purpo
se of in
forming
senior US officials.
USSR - CHINA - WEST EUROPE
Page 1
SOUTH AFRICA - ZAMBIA: Raids
Page 3
KENYA: Situation Report
NICARAGUA: National Strike
Page 5
Page 6
CHINA - NORTH KOREA: Agriculture
Page 7
INTERNATIONAL:
BRIEFS
Racism Conference
Page 8
Page 9
International
Iceland
International
UNESCO
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The USSR warned West European governments, in an
authoritative Pravda article yesterday, not to sell advanced
arms and technology to China. The article reflects Soviet con-
cern over expanded Chinese - West European contacts, and it may
presage complaints through diplomatic channels.
The commentary was signed by "Observer," an indica-
tion of approval by the top leadership. The title, "A Short-
sighted and Dangerous Policy," uses remarks Soviet President
Brezhnev made last month in a speech admonishing the West not
to "play the China card" against the USSR.
Pravda asserted that Chinese delegations visiting
European capitals have only one aim--to obtain modern military
hardware and technology in support of Peking's "hegemonistic de-
signs." The article criticized the UK for showing interest in
selling jet fighters and tanks to China and the European Commu-
nity for signing an economic agreement with China last April.
The Soviets claim that the latter accord in effect excludes Pe-
king from restrictions on the sale of strategic materials to
Communist countries.
The Soviets have directed their previous high-level
public warnings against cooperation with China mainly at the US,
particularly since the visits to Peking of presidential advis-
ers Brzezinski and Press. More recently, both Soviet propaganda
and Brezhnev's private remarks to West German Chancellor Schmidt
in Bonn in May have revealed Moscow's rising concern over the
prospect of West European arms sales to China. That concern has
almost certainly increased since the US press began speculating
that Washington will drop objections to the sale of defensive
weapons to China by NATO countries.
Moscow may believe that the West Europeans are more
susceptible than the US to Soviet pressures, and the Pravda
article may foreshadow private high-level warnings such as those
made to France late last year. "Observer" asserted that selling
arms to China would be a "political miscalculation fraught with
serious consequences" that could unravel the fabric of European
detente.
The article also took aim at Chinese Premier and Party
? Chairman Hua Kuo-feng. Referring to his visits to Romania and
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Yugoslavia, it attacked efforts by Peking leaders to undermine
the political and ideological unity of the Communist states
in Eastern Europe.
The Soviets are especially bothered by the success of
Hua's visit to Yugoslavia and have criticized the conduct of
both Hua and his hosts. TASS noted yesterday that Hua has sharp-
ened his attacks on Soviet policy since arriving in Belgrade
and charged that Yugoslav newspapers have done nothing to disso-
ciate themselves from his remarks. The Soviet commentary also
highlighted the plans for further development of relations be-
tween the Chinese and the Yugoslav parties and raised the possi-
bility of Yugoslav arms deliveries to China.
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//South African ground forces began a lim-
ited incursion into Zambia on Wednesday in retaliation for the
shelling of a South African Army base in Namibia by guerrillas
of the South-West Africa People's Organization. The choice of
a "hot-pursuit" raid rather than stronger actions reflects
South Africa's intent to avoid disrupting the delicate polit-
ical process in Namibia and to reduce unfavorable interna-
tional reaction.//
Zambian Foreign Minister Mwale yesterday told foreign
representatives in Lusaka that about 200 South African soldiers
began the raid Wednesday afternoon and were still in Zambia yes-
terday. He said that the attackers had killed 12 civilians and
shelled a number of buildings and the airport at Sesheke.
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Pretoria's decision to limit its military reprisal
probably was influenced by UN Special Representative Ahtisaari's
recent visit to Namibia to gather information that will contri-
bute to Secretary General Waldheim's recommendations to the
Security Council on implementation of the Western settlement
proposal for Namibia. The South African military commander in
Namibia took the opportunity to brief the UN delegation on indi-
cations that SWAPO was planning an attack into the Caprivi Strip,
and South African Government leaders may now hope that Ahtisaari
will support UN measures to curtail guerrilla incursions from
Zambia and Angola.
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KENYA: Situation Report
President Moi and his colleagues are
tin
A
'
g
c
s
Kenya
continuing their efforts to ensure a smooth transition foZZow-
ing the death early this week of Jomo Kenyatta.
a strong supporter of Moi,
ral Njonjo
G
,
ene
Attorney
has apparently taken the lead in seeing that succession provi-
sions of the constitution are followed. According to a source
of the US Embassy, Njonjo wants to restrict the country's only
political party to one candidate, who, in the absence of other
nominees, would then be proclaimed president.
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Political maneuvering is probably subdued in the wake
of Kenyatta's death and will not go into high gear until after
the funeral and the announcement of a nominating date. A strug-
gle for the nomination between Moi--a member of the minority
Kalenjin tribal group--and his opponents from Kenyatta's inner
circle of Kikuyu tribal leaders could strain the already weak
party apparatus and upset the current calm.
The performance of Moi and his supporters so far, how-
ever, suggests that they will be able to consolidate their po-
sition and secure the nomination for Moi or possibly fcr a com-
promise candidate such as Finance Minister Kibaki, a pcpular
Kikuyu in the Moi camp.
There have been no serious security problems since
Kenyatta's death, and major leaders such as Moi seem relaxed
and confident. Military and police units remain on alert as
a precautionary measure. The military seems content to maintain
its neutral position.
The successful conclusion yesterday of the Nicaraguan
guerrilla operation apparently has encouraged the forces op-
posed to President Somoza to resurrect plans for a national
strike. Some organizers would like to launch the strike today,
but it could be delayed until next week. Somoza has weathered
two national strikes this year, but an effective shutdown of
commercial activity for more than a few days would aggravate
economic difficulties and clearly increase pressure on the gov-
ernment.
President Somoza appeared pleased with the govern-
ments handling of the guerrilla operation and confident that
it would turn public opinion against the Sandinista National
Liberation Front. Cheering crowds that witnessed the airport
departure, however, probably accurately illustrate the growing
popularity of the guerrillas. The Sandinistas flew to Panama
accompanied by several mediators and by 50 compatriots and
political prisoners whose release they had demanded. The guer-
rillas also obtained $500,000 in ransom.
Earlier this week, leaders of the Broad Opposition
Front, a loose coalition of most anti-Somoza qroups, canceled
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strike plans because business support was lacking. Now they
hope to capitalize on the heightened opposition mood generated
by the guerrilla operation. The effectiveness of the stoppage
will also be enhanced by a recent unpopular increase in con-
sumer taxes and by existing strikes by health and construction
workers.
The key to success, however, will be business parti-
cipation. Workers and small merchants, particularly those out-
side the capital, will probably back the strike initially.
Owners of larger businesses, on the other hand, are frightened
by the specter of guerrilla violence and, moreover, seem more
reluctant to incur the economic losses a long strike would en-
tail.
CHINA - NORTH KOREA: Agriculture
//China is likely to exceed last year's es-
timated 285-million-ton grain harvest, barring adverse weather
for the remainder of the crop season. This would be the first
significant increase in agricultural output since 1975. Grain
production in North Korea this year should equal, and may ex-
ceed, the 1977 harvest--reportedly a record 8.5 million tons.//
//The Chinese have yet to harvest some 60 per-
cent of the 1978 grain crop. Coarse grains throughout most of
the North China Plain are faring better than last year, when
extensive flooding and waterlogging led to widespread crop
losses. Growing conditions in Northeast China are similar to
last year's excellent conditions except in scattered localities
where heavy rains are causing waterlogging and will bring local
yields below last year's levels.//
//Growing conditions for intermediate and late
rice crops are largely favorable except in areas of South China
where heavy rains caused recently transplanted late rice seed-
lings to float. Delays in replanting may cause reduced yields
if there is an early fall cool spell.//
//China's winter grain output was reportedly 5
million tons over last year's poor harvest.
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//The North Koreans are in a good position to
equal or even exceed last year's record grain output. There
appear to be no significant problem areas, an indication that
the irrigation systems were effective in combatting a spring
drought.//
//North Korea's reported increased use of
high-yielding rice varieties and the greater area planted to
corn should more than offset the limited crop damage that re-
sulted from heavy thunderstorms earlier this summer. With good
weather for the remainder of the crop season, the harvest could
even reach the target of 8.8 million tons called for in the
1978 plan.
//The World Conference to Combat Racism and Racial
l)i.sorimination, which opened in Geneva two weeks ago, is sched-
uled to close late today with adoption of a declaration and a
17nn of action. It appears that the declaration will not spe-
'ific7lZy equate Zionism and racism. Instead, the version
likeLU to be adopted condemns Israeli - South African: coopera-
tion and denounces Israeli discrimination against the Palestin-
ians. The major countries of the European Community have
threatened, however, to dissociate themselves from the con-
ference if the references to Israel remain.//
//The World Conference hopes to draw up a plan to
implement UN decisions on racism, racial discrimination, apart-
heid, and decolonization. The US and Israel have boycotted the
conference.//
//In a tactical move to ensure African and Arab
solidarity, the Arab group drafted statements against. Israel
that stop short of directly equating Zionism with racism. The
statements claim that there is an expanding relationship be-
tween Israel and South Africa in the economic, commercial, mili-
tary, and nuclear fields. The :statement condemns this alliance.
Its language has been incorporated in a draft presented by the
Africans that is now the subject of intense negotiation within
a working group.
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Increased chartering of tankers throughout the world
has pushed tanker rates to their highest level since the rush
at the end of 1977 to transport oil cargoes before an antici-
pated oil price boost. The current upward trend in charter
rates began in the Persian Gulf, where average rates for ship-
ments to Europe on very large crude carriers have risen from
$3.38 per ton in early June to more than $6.76 a ton in mid-
August.
Voyage chartering on the Gulf-to-Europe route reached
a historic high during the week ending 4 August but slumped
again the following week. Along with increasing demand, the
number of ships available for charter in the Gulf dropped
sharply in mid-July and probably fell to zero in early August.
The demand for tankers has increased because charter-
ers assume that another oil price increase is inevitable. Ja-
pan's implementation of its scheme to store oil in large tank-
ers has undoubtedly also put short-term pressure on rates.
Enough tanker owners probably will be taking tankers out of
lay-up and returning them to service to cause a leveling of
rates within a month.
Ludvik Josepsson, Communist leader of Iceland's
People's Alliance, yesterday gave up his effort to form a gov-
ernment but apparently is willing to continue negotiations
with the Social Democrats and the Progressives. The negotia-
tions, which have been concentrating on the details of a gov-
ernment economic program, stalled when the Social Democrats
balked at the Communists' demand for the office of prime min-
ister. President Eldjarn probably will call on the leader of
the Progressive Party to try to form a coalition and end the
two-month hiatus in government.
//Jamaican Prime Minister Manley is apparently
trying to reschedule a summit meeting of world leaders to
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consider a variety of North-South economic issues. Manley, who
first suggested the summit conference last winter, called off
a meeting scheduled for late May when West German Chancellor
Schmidt and Canadian Prime Minister Trudeau were unable to
participate at that time.//
//Manley has now reportedly invited West Germany,
ezuela,
the UK Canada, Australia, Denmark, Norway, Nigeria, Ve:
,
Tanzania, and Malaysia to meet in Jamaica in August or Septem-
ber. Schmidt has replied that he is prepared to participate in
the meeting but suggested that December or January would be a
better time. The meeting would then fall between the resumed
negotiations on the Common Fund scheduled for November and the
ministerial conference of the developing countries' Group of 77
in February.
Director General of the UN Educational,
Amadou M'Bow
,
and Cultural Organization, released the final draft
Scientific
,
on Wednesday of a declaration on mass media that closely resem-
bles one submitted to UNESCO by the USSR in 1972. If the text
is adopted at the 20th UNESCO General Conference in October,
it will endorse principles that make governments responsible
for the publications, activities, and staff of their countries'
news media operating internationally and sanction direct govern-
ment control over domestic media. The declaration will also
permit regulation of local correspondents of foreign news media.
Western media have harshly criticized the draft. Some
developing states and most Western nations oppose it and will
attempt to block its submission to the conference this fall.
This effort is unlikely to succeed, however, as M'Bow is under
considerable pressure to introduce the draft to ensure support
from those developing states that originally approved has
candidacy as UNESCO Director. General.
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