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25X1 " ;A-oor&@~d9F9f Release 2005/08/17: CIA-RDP79T00975AO30900 cret Central Intelligence National Intelligence Daily (Cable) Top Secret CG NIDC 78-0294C 19 December Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Copy 613 25X1 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975A0309000 a ret National Intelligence Daily (Cable) CONTENTS ARAB STATES - ISRAEL: Treaty . . . . . . . . . . . 4 SOUTH AFRICA: Urban Terrorism. . . . . . . . . . . 7 USSR: Agricultural Research. . . . . . . . . . . . 8 CHILE: Economic Reform Program . . . . . . . . . . 9 BRIEFS . . . . . . . . . . . . . . . . . . . . . . . 11 The National Intelligence Daily Cable will not be published on 24, 25, 31 December or on 1 January. 25X1 25X1 25X1 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975A030900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975A030900 West Germany's fast breeder reactor program is now back on track, but it is ZikeZy to remain a thorny po- ZiticaZ issue for ChanceZZor Schmidt's government for some time. The junior coalition partner, the Free Demo- crats, proved troublesome during the Bundestag debate last week that ended in a vote narrowly endorsing the renewal of construction at the Kalkar plant. The Bundes- tag Zeft unanswered the timing and conditions for resum- ing construction and avoided a potentially divisive de- cision on the actual operation of the plant--issues that are certain to spur renewed public debate on the role of nuclear energy in West Germany. 25X1 25X1 The Bundestag action followed an earlier court ruling that set aside a legal challenge to the 300-mega- watt reactor at Kalkar in North Rhine - Westpahalia; the challenge had held up construction since July. The So- cial Democratic - Free Democratic coalition turned back an opposition motion to give full approval to the Kalkar plant but had to put heavy pressure on six Free Demo- crats to avoid a defeat of its own qualified measure. The six were influenced by antinuclear sentiment in the party's rank and file. Only last-minute resignation threats by party leaders, including Foreign Minister 25X1 Genscher, persuaded the recalcitrant Free Democrats to abstain, thus allowing the government measure to pass by five votes and averting a coalition crisis. There is widespread support in the Bundestag for fast breeder technology. The opposition Christian Union parties, representing nearly half of the Bundestag, are strongly behind the Kalkar project, while most Social Democrats, the senior coalition partner, also back the effort. The government's slim 11-seat majority in the Bundestag, however, makes it highly susceptible to pres- sure on such issues from small groups in both coalition parties when the opposition chooses to challenge along party lines. The completion of the plant at. Kalkar, even if con- struction resumes immediately, may well slip past its 1981 target date. Minister President Rau of North Rhine - Westphalia could have some difficulty in getting his divided cabinet to approve a permit for the third phase of construction, although officials in Bonn be- lieve the project will get state approval. 25X1 1 Top Secret Approved For Release 2005/08/17 : CIA-RDP79TOO975AO30900010130-4 25X1 25X1 0 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Although the West Germans do not expect their first commercial fast breeder reactor to be ready until 1990, they are clearly committed to the development of fast breeder technology as an integral part of their long- 25X1 term strategy on energy. 25X1 O Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 25X1 Egyptians are reacting to the missed deadline for an Egyptian-Israeli treaty by emphasizing the difference between the US and Israel and trying to portray the US position as completely in accord with Egypt's. In Israel, there has been an outpouring of criticism of US negoti- ating tactics from all sides. Official reaction from 25X1 other Middle East governments has been sparse, but the general mood among them is one of relief that they, at least temporariZ do not have to face a signed treaty. I I In an interview given over the weekend, Egyptian President Sadat projected a calm and optimistic attitude but strongly implied that Egypt would stand firmly behind its demand for linkage between the two accords and on the priority of its treaty obligations. Egypt is prepared, he said, to wait for Israel to change its position. Gov- ernment officials and the press in Egypt have generally tried to keep their commentary from further disrupting the negotiating atmosphere, but there have been direct criticisms of Israeli Prime Minister Begin reminiscent of previous Egyptian efforts to sin le out and undermine 25X1 the Israeli leader. The current impasse in negotiations serves Sadat's purposes in several ways. It dramatizes Egypt's efforts on behalf of a comprehensive settlement and highlights what Egypt hopes will be interpreted by the other Arabs as a closer alliance between Arab and US interests at the expense of Israel. We expect that the Egyptians will play up these themes and that Sadat will not push any new ini- tiative until he sees some give in Israel's attitude. cabinet colleagues to show further flexibility. 0 ARAB STATES - ISRAEL: Treaty cry against the US will make it harder for Begin and his In Israel, both coalition and opposition leaders have accused Washington of exerting unfair pressure on Tel Aviv and conspiring with Egypt. In this charged at- mosphere, the cabinet's rejection of the latest peace pro- posals has undoubtedly boosted Begin's stock among Is- raeli hawks. By the same token, however, the public out- Approved For Release 2005/08/17 : CIA-RDP79T00975A030900010130-4 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975A030900010130-4 25X1 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975A0309000'CDQtet 0 25X1 The prospect that it would have a tough fight in obtaining ratification of the treaty probably played a decisive part in the cabinet's rejection. Indeed, senti- ment against any treaty that includes a provision for 25X1 the west bank autonomy plan has been growing steadily in the opposition Labor Party, on which Begin has become de- l I pendent for support on peace treaty issues. 25X1 Israeli leaders may believe that standing up to US pressure will improve their bargaining position and ease their problems in gaining ratification by the Knesset later. In any event, when Begin appears before the Knes- set today, he is expected to demand that the US revert to its "true" mediator role and that Egypt modify its demands. Begin can c nt on strong bipartisan support for such a position. Saudi Arabia and other moderate Arab states are probably relieved to escape for now a development that they believe would have split the Arab world, isolated Egypt, and forced them to choose sides more clearly. In recognition of these concerns, the Saudis had been urg- ing Sadat to delay talks. Suspension of the talks also temporarily relieves the Saudis from demands by Iraq, Syria, and others that they impose the sanctions against Egypt voted at the Baghdad Summit if it signs a treaty with Israel. Leaders of the Palestine Liberation organization probably hope that the current impasse will mark the end of the Camp David accords, which the PLO leaders believe do not adequately provide for their future control of the occupied territories. Some influential Palestinians may also hope that the delay is the first step in Egypt's re- gaining its former influence in the Arab world--a devel- opment that would once again offer the PLO an alternative to its uncomfortably close relationship with Syria. Syria has not reacted publicly. It will presumably continue its standard propaganda line that Egyptian-Is- raeli differences over a peace agreement are artificially created by-the US, Egypt, and Israel to mask a separate agreement. 5 To Secret Approved For Release 2005/08/17 : CIA-RDP79T00975A0309000 25X1 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Approved For Release 2005/08/17: CIA-RDP79T00975A0309000 et 1 -1 25X1 The frequency of terrorist acts of sabotage has in- creased noticeably in the Johannesburg area during the past three weeks. There is no indication that widespread urban violence is imminent in South Africa, but the 25X1 flurry of low-level incidents indicates a pattern of ur- ban violence that is gradually increasing despite exten- sive government security precautions. Last year, there was a spate of urban bombings during the Christmas season: a large shopping center in Johannesburg and several police stations were damaged. The incidents this year appear to consist more of de- liberate sabotage than of wanton terrorist attacks that produce a backlash from both the white and the black communities. Thus far, the Soweto Community Council building, a symbol of government authority to many ur- ban blacks, has been bombed. A depot supplying govern- ment-owned beer halls for blacks was also set afire, and a large dynamite factory near Johannesburg was exten- sively damaged. F_ I In October, the Minister of Justice warned the white population to expect increased terrorism, partic- ularly from the African National Congress, the largest of the exiled liberation organizations. During November, the government publicly acknowledged on two'occasions that trained guerrillas were infiltrating South Africa from neighboring states. The police have begun a series of arrests of urban blacks, and they can be expected to mount lar er security crackdowns if the sabotage con- tinues. 7 Top Secret Approved For Release 2005/08/17 : CIA-RDP79T00975A0309000 - 25X1 25X1 I Tan Secret 7 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 USSR: Agricultural Research The USSR is looking to its Academy of Sciences for greater assistance in improving the nation's agricuZturaZ performance. Despite the record-breaking grain harvest of 235 million tons this year, Soviet planners recognize that a significant increase in technological know-how, improved management techniques, and more effective agricuZturaZ re- search are necessary to meet ambitious goaLs established 25X1 for the next few years. Earlier this month, Agriculture Minister Mesyats and newly elected Party Secretariat member Mikhail Gorbachev-- who has succeeded the late Fedor Kulakov as the party's chief overseer for agricultural matters--attended a spe- cial meeting of the Academy held to discuss its role in agricultural development. The Academy does not now have an agricultural department among its 16 functional re- search units. The collaboration of Academy researchers with specialists in the Agriculture Ministry and other government bodies concerned with agriculture has generally been limited and ineffectual because the Academy has been reluctant to devote as much of its resources to applied economic and agricultural programs as the party would 25X1 like. The special meeting of the Academy on agricultural questions took place only nine days after Gorbachev's appointment to the Secretariat, suggesting that one of his first priorities in his new role may be to integrate the Academy into the nation's agricultural research ef- forts. As a result of this meeting, the Academy is now drawing up a draft program that will specify areas re- quiring greater Academy attention in the development of Soviet agriculture through 1985. Fop Secret 8 25X1 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975A03090001~ et 25X1 CHILE: Economic Reform Program The Pinochet government's thoroughgoing economic program has reversed former President AZZende's socialist revolution and transformed Chile into a market-oriented, free-trade economy. Chile has restored economic growth, stopped rampant inflation, and at least temporarily elim- inated payments problems. Industry and agriculture are becoming more internationally competitive, the country is now living within its means, and its overriding de- pendence on copper exports has been greatly reduced. With US bankers and businessmen in the vanguard, growing in- ternational business confidence in the junta's program has paved the way for new loans and new direct invest- ment, enabling the junta to relax austerity policies that have hit hard at the poor. 25X1 The junta's program has touched every aspect of the economy. Policymakers have slashed government spending and reduced state involvement in the economy. The junta has decontrolled prices of industrial products, re- strained wages, and boosted agricultural production in part by ending land reform. The government has reestab- lished Chile's international credit rating and improved its international payments position. It has also moved to revitalize the industrial base and to generate new jobs. The poor and workers, who have borne the brunt of the stabilization program, still represent a source of potential social and economic unrest. The complete aban- donment of price controls has raised the cost of essen- tial goods, while tariff reforms and austerity measures have helped to keep unemployment at a high level. Real earnings of miners, utility workers, and government em- ployees, moreover, have not yet regained 1970 levels. The Pinochet regime is forestalling social unrest by re- 25X1 stricting political liberties, maintaining strict labor discipline, implementing a public works program, and in- creasing spending on social services for the poor. Any of several potential problems--the results of the US investigation of Orlando Letelier's murder, an armed conflict with Argentina over the Beagle Channel, or the Regional Inter-American Labor organizations planned boycott of Chilean products--could trigger inter- national payments problems next year. We nonetheless ex- pect the economic gains and structural improvements of 9 To Secret Approved For Release 2005/08/17 : CIA-RDP79T00975A030900d10130-4 25X1 T 25X1 25X1 25X1 year, however, the Chilean junta must take steps to boost domestic savings and investment from their still Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 I the economic program to continue. To maintain economic growth in the 6-percent to 7-percent range beyond next relatively low levels. 10 Approved For Release 2005/08/17 : CIA-RDP79T00975A030900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975A030900 25X1 25X1 India's lower house of parliament may soon vote on a government motion that could send former Prime Minister Gandhi to jail for the remaining 10 days or so of the current session and possibly deprive her of the parlia- mentary seat she won in November. F_ I 25X1 The anticipated vote will climax a heated debate on Prime Minister Desai's tough motion to punish Gandhi for alleged contempt of parliament. A parliamentary committee recently found Gandhi guilty of having obstructed an of- ficial investigation in 1975 of her son San'ay's car man- ufacturing project. 25X1 Desai reluctantly bowed to pressure from the anti- Gandhi hardliners, who apparently dominate his Janata Party's majority in the lower house. He personally agrees with more moderate party members who hold that expelling Gandhi from parliament will simply serve her purposes by making her a martyr and the focus of nationwide attention. If Gandhi is expelled, she could seek reelection and would probably win by an even larger margin. There is other squabbling within the Janata Party 25X1 because Desai has been unable to achieve a reconciliation with ambitious former Home Minister Singh, whom Desai dropped from the Cabinet last June. Singh is planning a 11 Top Secret L A4 QA 4 25X1 - Approved For Release 2005/08/17 : CIA-RDP79TOO975AO309000 25X1 I public demonstration in New Delhi on Saturday to demand more benefits for the peasants of northern India--the backbone of Singh's support F77 I A personal appearance by former Prime Minister Bhutto before the Pakistani Supreme Court yesterday could mark the beginning of the final stage of his appeal trial. Both the prosecution and the defense have completed their arguments, and Bhutto--sentenced to death for political murder earlier this year--requested that he be allowed to make his own concluding remarks before the seven-man tribunal. He is scheduled to continue his statement to- 25X1 day? If the Supreme Court upholds the death sentence-- and it is likely to do so--President Zia could bow to international pressure and spare the former Prime Minis- ter's life. Clemency would, however, further erode Zia's support within the military and might give senior offi- cers--already disenchanted with Zia's performance as President--enough cause to remove him from power. A Soviet delegation headed by Mikhail Solomentsev, Premier of the Russian Republic, traveled to Yugoslavia yesterday. The Soviets had earlier postponed Solomen- tsev's trip, originally scheduled for September, after the visit to Yugoslavia by Chinese party Chairman Hua 25X1 Kuo-feng. Soviet-Yugoslav relations have been strained over the past year because of continued policy differences, in addition to Yugoslavia's developing relationship with China. The rescheduling of Solomentsev's visit reflects the USSR's willingness to ut a better face on relations 25X1 with the Yugoslavs. The visit does not mean, however, that either side has set aside differences over China. Yugoslav media commentators last week sternly criticized a recent arti- cle in the Soviet party Central Committee's journal Kom- rnunist for its "improper and malicious" statements about the Yugoslav-Chinese relationship. This polemic could 25X1 To Secret 12 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 Approved For Release 2005/08/17 : CIA-RDP79T00975A030900 chill the atmosphere for Solomentsev in Belgrade and ob- struct chances for a meeting between Presidents Tito and Brezhnev, which was also postponed this fall. 25X1 Spain 25X1 The regional government in the Basque area of Spain-- the council set up under provisional autonomy statutes early this year--last night called for talks with the Basque terrorist organization ETA. There is little chance that the terrorists, who have killed. over 30 people in stepped-up attacks since 1 October, will respond favor- ably. The regional government, which is dominated by So- cialists and Basque Nationalists, also urged political parties and labor unions in the region to organize peace demonstrations during the next two months. Such a demon- stration was carried out peacefully in Bilbao last month; on its fringes, however, countermarches by ETA sympathi- zers led to clashes with police. 25X1 The regional government's initiatives may simply re- flect an effort to improve its image prior to negotiations with Madrid on a final autonomy statute under the new con- stitution. If the government is sincere, however, its initiatives could represent an important step toward iso- lating ETA and its sympathizers from moderate Basques who so far have been reluctant to condemn the terrorists out- right. In the long term, a polarization of Basque political forces could help to break the deadlock in relations be- tween the central government and the moderate Basques. In the short term, whatever the motives of the regional government, the proposed rallies could easily lead to con- frontations and a new cycle of violence in the Basque region. 13 Top Secret 25X1 Approved For Release 2005/08/17 : CIA-RDP79T00975A03090001 - Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4 'Fop Secret Top Secret Approved For Release 2005/08/17 : CIA-RDP79T00975AO30900010130-4