CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030900010022-4
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• Document Creation Date: December 20, 2016
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NATIONAL INTELLIGENCE DAILY CABLE
Saturday 14 October 1978 CG NIDC 78/240 0
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The NID Cable is for the purpose of informing
IRAN: Politics and Economics
LEBANON: Situation Report
PALESTINIANS: Camp David Accords
CHINA-EUROPE: Inter-Party Ties
Page 1
Page 3
Page 4
Page 5
CANADA: By-Elections Prospects
Page 8
MALTA: Mintoff's Libyan Option
Page 9
FRANCE: Political Balance
Page 9
BRIEF
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South Yemen
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IRAN: Politics and Economics
The Iranian Government is being forced to re-
order its economic priorities in light of continuing political
unrest. The expensive military and nuclear power programs--
traditionally those most dear to the Shah and, therefore, im-
mune to previous cutbacks--are to bear the brunt of*budget re-
allocations. The Iranian domestic situation remains unsettled,
with strikes, demonstrations, and occasional deaths in many
areas. //Rumors that Prime Minister Sharif-Emami is about to
be replaced appear unfounded at present.//
Iran's top military procurement official, General
Toufanian, has told US officials that there will be changes
and postponements in equipment acquisition schedules. He noted
that Iran will not go ahead with the purchase of 140 additional
F-16 and 70 additional F-14 fighter aircraft, which Tehran has
been pressing the US Government to approve. Iran also will not
buy other fighter aircraft and several hundred large-caliber
howitzers as US sellers had expected.
Although there has been no official announcement
that the nuclear power program is to be curtailed, the program
apparently will be limited to the two reactors being built by
West Germany and two more the French are building. No further
work is likely on four more nuclear plants for which Iran and
West Germany had already signed letters of intent, and negotia-
tions on eight additional plants with France, the US, and other
Western suppliers are also likely to be halted.
The growing costs of the military and nuclear programs
reportedly have shocked the Shah and other Iranian officials
.
Planned military procurement from US suppliers during the cur-
rent year was slated at $2.3-$2.6 billion and the tentative pay-
ment schedule over the next five years averages well over $2
billion annually. The four nuclear plants under construction
will cost an estimated $6-$8 billion, with payments stretched
out through the late 1980s. Projections of costs for additional
nuclear power plants of comparable size have risen to an esti-
mated $3.0-$3.6 billion each.
Although a high-level decision apparently has been
made to free military and nuclear program funds for rural de-
velopment, infrastructure, and social welfare projects, most
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of the cutbacks will not impact on the current or next year's
budget. The government will have to find other means to cover
increased payments to public sector workers.
Government capitulation to substantial wage and bene-
tit emands is settling widespread strikes in government and
industry. The effect on the economy cannot be determined, but
renewed inflation seems almost certain.
//On the political front the Shah has told both
the US and British Ambassadors that he intends to retain the
Prime Minister, who is making some progress in his negotiations
with moderate religious leaders.//
//The rumors that Sharif-Emami would soon be
replaced most frequently mention as his successor Ali Amini, a
septuagenarian former Prime Minister who is reported to have
had at least two recent conversations with the Shah. Amini re-
portedly desires a greater role in the direction of the armed
forces, which the Shah is unlikely to permit unless he is also
prepared to give up most of his other authority. Dispute over
this point was a major factor in the Shah's break with Prime
Minister Mossadeq in 1952 and the subsequent overthrow of
Mossadeq.//
//Amini's major asset seems to be that he has
been untainted by association with the Shah's policies since
1962. Although some of the publicity for Amini was probably
self-generated, the fact that he is apparently regarded by many
as a potential prime minister suggests the paucity of political
talent in Iran.//
//Political opposition is momentarily in the
doldrums, partly because moderate opponents now realize that
the radical actions to which they had contributed might trigger
a complete collapse of governmental authority. The Shah's fierc-
est opponent among the Muslim clergy, Ayatollah Khomeini, is in
Paris after being expelled from Iraq, and another opponent,
Ayatollah Shariatmadari, at least occasionally consults with
Sharif-Emami's government to try to compromise their differ-
ences.//
//Demonstrations and bombings, some of them
directed against Americans, are continuing throughout the coun-
try. Many of these are probably spontaneous and not connected
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ith any nationwide campaign. Martial law remains in effect in
12 cities including Tehran.//
LEBANON: Situation Report
Sadruddin Khan, UN Secretary General Waldheim's special
representative to Lebanon, believes the Maronite Christians have
become more conciliatory toward Syria and are willing to support
an increase in the non-Syrian component of the Arab Deterrent
Force. Not all Maronite Leaders are committed to a moderate ap-
proach, but most do seem for now to favor talking to renewed
fighting. The movement yesterday of Lebanese Army units into
a Beirut suburb seems Limited.
Sadruddin told US officials in Damascus yesterday
that following his talks with Maronite leaders in Beirut he
had concluded that:
-- The Maronite militias want the cease-fire to hold.
-- They favor diluting the Syrian component of the ADF
so that non-Syrian troops replace the Syrians in
the heart of Beirut.
-- They are prepared to give President Sarkis another
chance to form a government of national unity.
He said that the militias seem fed up with the fight-
ing and realize their close ties with Israel are harming them
in terms of ultimate reconciliation in Lebanon.
The UN envoy talked only with Dany Shamun and Amin
umayyi -two of the more moderate Maronite leaders--before
reaching his conclusions. Their moderate line does not neces-
sarily represent the final word from the militias. The leaders
of the Maronite groups are reviewing their options in the wake
of the UN-sponsored cease-fire and Sarkis' initiative to expand
the non-Syrian components of the Deterrent Force.
A decisive Maronite turn toward moderation may depend
onL he results of the contacts under way between Syrian Presi-
dent Assad and a personal representative sent by Shamun to Da-
mascus.
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The Syrians seem amenable to a political settlement
with the Maronites and perhaps to some modification of the
Syrian presence in Beirut. Assad apparently is willing to see
relatively moderate leaders such as Dany Shamun and Amin Jumayyil
participate in a new government under Sarkis, although Assad
will also want Muslim leftists represented. Assad is probably
skeptical that hardline Maronite leader Camille Shamun will ac-
cept a compromise.
The Lebanese Army on Thursday sent about 500 men into
the Maronite-controlled suburb of Hadath. Prime Minister Huss
said the deployment was aimed at securing the road through
Hadath to the presidential palace. His statement apparently was
intended to forestall speculation that the move was related to
a plan by Sarkis to have the Army replace ADF units along the
confrontation line with the Maronites.
The Army units took over positions that National
Liberal militiamen had agreed to vacate; ADF positions were not
changed.
PALESTINIANS: Camp David Accords
Official statements by the Palestine Libera-
tion Organization continue to contain harsh criticism of the
Camp David accords. //Some PLO leaders, however, are closely
watching post - Camp David developments and ultimately may be
willing to exploit quietly the opportunities the agreements
offer the Palestinians.//
The Fatah Central Committee on 4 October issued a
tough statement reiterating the organization's "absolute rejec-
tion" of the Camp David accords. The communique called on all
Palestinians, including those in the occupied territories, to
reject the idea of a self-governing authority on the West Bank
and in Gaza and to boycott any elections held to establish such
a body. Fatah warned that anyone who becomes involved will "pay
the price for his betrayal."
We believe Arafat and his moderate colleagues are en-
gaging in a certain amount of posturing for the benefit of Pal-
estinian extremists and their radical Arab allies. He may also
hope to discourage non-PLO supporters in the occupied territories
from openly backing the agreements reached at Camp David.
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CHINA-EUROPE: Inter-Party Ties
The inclusion of a French Communist Party member in
a group o journalists who visited Peking a few weeks ago is
the latest indication that the Chinese are reconsidering their
policy toward the major Communist parties of Western Europe.
Rene Dument, the director of a Limoges newspaper, is the first
French Communist journalist to visit Peking since 1964.
moment"
Chinese
future.
Deputy Foreign Minister Yu Chan minimized "for the
the chances of reconciliation between the French and
parties but did not rule out such a development in the
Yu told the delegation that the Eurocommunist parties
are showing "a certain independence" from Moscow and opposing
Soviet claims of preeminence in party affairs but pointed out
that the Chinese party still has ideological differences with
the Eurocommunists.
His comments suggest lengthy, delicate maneuvering
that could be upset by extraneous events before party ties are
restored with the French or Italians. In the meantime, the
Chinese will continue to maintain relations with small, anti-
Soviet, "Marxist-Leninist" splinter parties in Western Europe.
//This summer, party chairman Hua Kuo-feng
indicated that the Chinese had no objections to the renewal
of contacts with the Italian Communist Party, in itself a de-
parture from Peking's tactics earlier this year.
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The defeat of the leftwing alliance in the French
election last spring, however, may have caused the Chinese to
reformulate their tactics. An authoritative Communist newspaper
in Hong Kong blamed the defeat on an unrealistic social program
and French Communist undermining of security through opposition
to NATO. With the threat of its participation in a leftwing gov-
ernment apparently removed, the Chinese may believe that the
French party is in no position to undermine NATO and thereb
damage an important Chinese interest.
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CANADA: By-Elections Prospects
//By-elections on Monday for 15 Canadian Parlia-
mentary seats will test the mood of the voters. Prime Minister
Trudeau's Liberal Party majority in Parliament will not be af-
fected by the results, but, with a general election Less than
a year away, the three major parties realize the symbolic value
of these elections and have campaigned vigorously.//
//Of primary concern to the electorate are the
sluggish state of the economy and Trudeau himself. In an effort
to spur the economy, Trudeau announced in late summer a series
of measures to cut federal spending, fight inflation, and create
jobs. But the various parts of the program were haphazardly in-
troduced and have yet to elicit much enthusiasm from the public
or to aid the economy.//
//The secondary issue--Trudeau--permeates every-
thing else. Polls by the parties show that many voters dislike
and distrust the Prime Minister but still consider him to be
the most able leader on the national scene. This preference,
reflects opposition Progressive Conservative leader Joe Clark's
persistent image problem; he is an unknown with little charisma.//
//The Liberals are more concerned about the loca-
tion of the seats they may win Monday than about the number.
Liberal Party polls have been showing a downturn of the party's
popularity in southern Ontario, a region--along with Quebec--
critical to Liberal success in next year's general election. A
poor showing in the race for the five vacant seats in Toronto
would be a blow to Liberal morale and Trudeau's prestige within
the party.//
//Although the Liberals will continue to hold
their majority in Parliament, they worry that the antigovern-
ment vote--customarily more vigorous in by-elections--will be
even stronger than expected. The psychological effects, with
a general election approaching, could be hard to overcome.
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MALTA: Mintoff's Libyan Option
//Maltese Prime Minister Mintoff in a recent speech
again threatened that Malta will coon:-erate closely with Libya
if France, West Germany, and Italy do not provide direct grants
lta will lose
M
illi
a
on
to help offset the $70 million to $80 m
annucllu following the British military withdrawal next March.
//Mintoff has cited Qadhafi's public pledges of
economic assistance--and Libya's recent deliveries of four heli-
copters and two patrol boats--to assert that Libya is more re-
sponsive than the West to Malta's needs.//
//The Italians are now trying to work out an ar-
rangement under which the West Europeans would agree among them-
selves on an aid package, consult the Libyans, and then approach
Mintoff with a joint offer. The Italians anticipate a wary re-
sponse from the West Germans in particular but hope to sell the
idea as a way of coping with Mintoff's practice of playing one
side off against the other.//
//Now that the West Europeans think they have some
idea of the nature of Mintoff's "Libyan option," they are likely
to put increased pressure on him to drop his demand for budgetary
aid and to neaotiate a package of low-interest loans and project
assistance.
FRANCE: Political Balance
//French President Giscard, who has persistently
maintained his Long-term idea of bringing the Socialists into
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a center-left coalition, has reportedly been persuaded by ac-
cumulating evidence and the advice of his staff that the idea
must be put off until after the 1981 presidential election.//
//Most political observers have long considered
iscar s plan unrealistic, but the President, possibly encour-
aged by his confidential soundings, has been reluctant to give
it up. Giscard's appointment early last month of former Left
Radical chief Robert Fabre to a high-sounding job of surveying
the unemployment problem may have been intended to show support
for the policy, but others interpreted it as a clumsy effort to
split the left. The Left Radicals expelled Fabre almost imme-
diately.//
//The leading reason for Giscard's change in
tactics is apparently his conclusion that the delicate balance
within the center-right majority, which depends on substantial
cooperation by Jacques Chirac's Gaullists, would be disturbed
by Gaullist suspicion that the President is still trying some-
how to switch to a center-left alliance. Giscard's decision to
build a sixth nuclear submarine has been widely interpreted as
a bow to the Gaullists, and relations between them and Giscard's
Union for French Democracy have momentarily improved.//
//The notion of forming a single center-right
list to contend with other French groups in the election next
year of the European Parliament is also still afloat. It is not
clear that Chirac will make such an offer on acceptable terms or
that Giscard overwhelmingly wants it, but agreement on a joint
list probably would relax tensions within the majority.//
//The quarrels within the Socialist Party have
convinced Giscard that Socialist leader Francois Mitterrand needs
to press for left unity to win Communist votes for his presiden-
tial ambitions in 1981. Socialist national secretary Pierre
Mauroy, with whom Giscard's advisers had been in touch some
months ago, is now seen as a Mitterrand loyalist who will make
no move of his own.//
//Michel Rocard remains Giscard's long-term
hope to lead the left into coalition with the center
but he
,
believes that Rocard cannot make any deals until after Giscard's
expected reelection in 1981. Giscard sees Rocard as a potential
prime minister in a center-left government, at that time, prob-
ably with the support of Mauroy.//
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//The odds remain long against such a reshuffle
in French politics. It is unlikely that Rocard could take a
united Socialist Party into a center-left coalition in 1981,
and any opening to, the left may have to await the parliamentary
election in 1983.
The long-heralded restructuring of South Yemen's sole
legal political party is under way, and party leaders have an-
nounced t~ieir intention to abolish the current five-man Presi-
dential Council. Changes in the party and in some governmental
organizations may provide clues to the current strengths of the
various political factions.
The old Unified National Front was renamed the Yemeni
Socialist Party on Wednesday. The Presidential Council will be
replaced by a Presidium of the country's legislative body, the
Supreme People's Council. The new party, government, and legis-
lative structure appears to parallel the Soviet model, probably
owing to the influence of Soviet advisers.
If party chief and strongman Abd al-Fattah
Ismail is named Chairman of the Presidium, it could provide
evidence that his power is enhanced despite reports of opposi-
tion to him. //Recent reports have suggested that Ismail, who
is of North Yemeni origin, has come under increasing criticism
from South Yemenis who oppose the domination of the government
by native North Yemenis.
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