NATIONAL INTELLIGENCE DAILY (CABLE)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031200100001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 15, 2016
• Document Release Date: April 29, 2004
• Sequence Number: 1
• Publication Date: March 12, 1979
• Content Type: REPORT

Director of
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Top Secret
9 Intelligence
National Intelligence Daily
(Cable)
State Dept. review completed
Top Secret
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National Intelligence Daily (Cable)
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Situation Reports
China-Vietnam . . . . . . . . . . . . . . . . . 1
North Yemen - South Yemen . . . . . . . . . . . 3
Briefs and Comments
Iran: Support for Bazargan . . . . . . . . . . 5
Iran: Soviet Economic Presence . . . . . . . . 6
Mexico: Reaction to President Carter's Visit . 7
Turkey: Economic Reform Program . . . . . . . 8
China: Change in 10-Year-Plan Targets
Rhodesia: Nkomo's Diminished Options
Mozambique - South Africa:
Warning on Terrorists . . . . . . . . . . . . 12
International: Terrorist Threats . . . . . . . 12
Chad: Peace Talks . . . . . . . . . . . . . . 12
Special Analysis
Venezuela: A New Administration Takes Over . . 13
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z layyerences over
border demarcations seem likely to complicate the initia-
tion of formal negotiations between China and Vietnam.
The Vietnamese Foreign Ministry issued a statement
yesterday claiming that Chinese troops have moved several
border marker posts "deep into Vietnamese territory" in
Lang Son Province. The statement described the inci-
dent as "particularly serious." It noted that the border
had been agreed upon by the two countries and called upon
the Chinese to stop moving border markers and other at- 25X1
tempts to change the border. Hanoi has said that it will
not negotiate as long as Chinese soldiers remain on
Vietnamese territory.
There is still no evidence of a Chinese military
buildup on the Laotian border, but Sino-Vietnamese pole-
mics over Laos continue to develop. On Saturday, China
issued an official protest accusing the Laotian Govern-
ment of "fabricating rumors to venomously attack China."
The Chinese note cited a Laotian Government statement
made last Tuesday which charged Beijing with threaten-
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Laotian independence, sovereignty, and territorial
integrity by harassing troops on the frontier as well as
interfering in the internal affairs of Laos.
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Beijing's protest also accused Vientiane of acting
under Soviet and Vietnamese pressure, thus softening
slightly the Chinese rebuke. The note revealed that on
Wednesday Vientiane demanded the withdrawal of the re-
maining Chinese roadbuildin units from northern Laos.
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This Chinese protest was followed up by a People's
')ally commentary which charged that Hanoi and Moscow are
using the accusations against China as a just4.fication
to crack down on antigovernment resistance in Laos.
The commentary asserted that such maneuvers will stir up
stronger antigovernment opposition in Laos.
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//The military situation in North Yemen did not
change over the weekend. South Yemeni airstrikes and
artillery and rocket barrages reportedly took place in
the Harib area yesterday, but there are no reports of
significant fighting in the AZ Bayda or Qatabah areas.//
South Yemeni forces
in the Harib area launched an artillery and rocket
barrage early yesterday followed by aircraft attacks
against North Yemeni forces. Aden apparently expects
further North Yemeni counterattacks and infiltration,
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//The US Embassy in Sana reports that available in-
formation does not support South Yemen's claim made late 25X1
last week that major new fighting was taking place be-
tween National Democratic Front and North Yemeni tribes-
ment in an area northeast of Sana.
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Military personnel from countries represented on the
Arab League observer force began arriving in Sana over
the weekend. The force eventually will total about 80 ob-
servers with representatives from Syria, Iraq, Jordan,
Algeria, Kuwait, the United Arab Emirates, and the Pales-
tine Liberation Organization. The group is supposed to
work out the details of troop withdrawals by both sides
and oversee the cease-fire.
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25X1 //Some of the NDF's weaponry and supplies come from
Libya,
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radio yesterday broadcast an NDF statement praising Libya's
role in the area and thankinq Tripoli for its support.//
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IRAN: Support for Bazargan
There were some signs over the weekend that Ayatollah
Khomeini is taking positive steps to reinforce the Bazar-
gan government, but the impact of these measures remains
to be seen. Procedures announced yesterday for the
referendum on 30 March on a new government indicate that
Khomeini is determined to proceed with his plans for an
Islamic republic.
Tehran Radio announced on Saturday Khomeini's in-
structions advising government officials to ignore any
recommendations for hiring and firing of individuals
made by his spokesmen or relatives. Khomeini stressed
that they had no right to interfere in such matters.
Revolutionary committees have been obstructing the nor-
mal activities of the various government ministries and
making recommendations on personnel and procedures.
A reorganization of the various revolutionary
committees also was made public and new guidelines for
the operations of the committees were established. Mo-
hammed Reza Mahdavi-Kani, who had previously been ap-
pointed to coordinate committee activities, has become
supreme chief of the 14 committees operating in Tehran
and the others in the rest of the country. Mahdavi-
Kani reportedly was appointed to this position by Kho-
meini with Bazargan's approval.
Yesterday, Bazargan ordered his Interior Minister
to make arrangements for the national referendum that
will ask the single question, "Do you want an Islamic
republic to replace the monarchy?" This formula has
been criticized by liberal dissidents and the Prime
Minister, but Khomeini has remained adamant in his de-
mand for an Islamic republic.
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//Moscow continues work on Iranian development con-
tracts and is truing to maintain a vigorous presence in
its technical assistance programs. Soviet economic aid--
'1.2 billion since 1963--has helped to develop key Ira-
nian industrial facilities. The ultimate disposition of
Soviet projects is still uncertain, however, as Iran
reassesses its development priorities and its relation-
ships with foreign contractors.//
Even though work schedules have been disrupted by
the political turmoil, most Soviet technicians have re-
mained and have continued work at a number of major proj-
ects. Nearly 4,000 Soviet technicians apparently have
been allowed to maintain operations at the showcase
Isfahan steel mill. Although the IGAT-I pipeline, which
carries natural gas to the Soviet border, is now shut
down, the new government may well assign a high priority
to natural gas projects. An IGAT-II pipeline project
probably will service a 20-year trilateral accord with
the USSR for gas sales to Western Europe. Under that
deal, the USSR--for a fee--would receive Iranian gas at
the border and deliver equivalent amounts of Soviet gas
to Iranian hard-currency customers in Western Europe.
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//The 3-50-billion-cubic-foot annual flow of Iranian
gas to the USSR since 1970 has been more than enough to
service Tehran's $1.4 billion economic and military aid
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MEXICO: Reaction to President Carter's Visit
//President Carter's trip to Mexico has at least
forestalled a potential decline in bilateral relations
and may have laid the groundwork for significant progress
on key issues. President Lopez Portillo probably feels
that the agreement to meet again this summer was the most
important result because it establishes a timetable for
and focuses presidential attention on the resolution of
differences. At the same time, the heightening of Mexican
expectations greatly magnifies the effect of the next few
months of negotiations on the longer term course of US-
Mexican relations.
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s gener-
ally believe Lopez Porti o i we in acing up to the
"Colossus of the North" and advising the US that Mexico
expects greater attention and respect from Washington.//
//Lopez Portillo's public criticism of US
attitudes
toward Mexico--which has been overplayed in the
US me
dia--
was not entirely
for
domestic consumption. It
was al
so
designed to put
the
US on notice that the bilateral r
e-
lationship is in
for
some renovation and that issues
should take precedenc
e over ceremony and personal dyn
a-
mics. By making this
case with the US, and at the sa
me
time scoring essentia
l-points at home, Lopez Portillo
is likely to feel he has more room to maneuver now than
he had last year.
//For the Mexicans, nevertheless, consummation of a
natural gas deal will be an essential condition for
success in the bilateral negotiations leading up to
the next summit. Its overriding importance stems from
the intense public spotlight that has lately fallen on
Mexico's petroleum potential and from the psychological
logjam the gas sale represents in Mexico's efforts to
map out a "petropeso" development strategy. The Mexicans
realize that other important issues--such as trade and
undocumented migration--are less susceptible to quick
resolution.
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TURKEY: Economic Reform Program
Negotiations for massive international financial aid
to Turkey have reached an impasse. Ankara has repeatedly
rejected economic reforms recommended by the International
Monetary Fund--deemed preconditions for large-scale as-
sistance--and has announced its own halfway measures aimed
at balancing foreign pressures for austerity with domestic
25X1 Political concerns.
In theory, Prime Minister Ecevit's reform program
emphasizes the need for public sacrifice and a determina-
tion to solve Turkey's problems through more effective
use of its own resources. In fact, his vague proposals
repeat previous goals without suggesting specific reme-
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dies.
to reschedule bank credits.
definitely its negotiations with international creditors
//Last week, West German Chancellor Schmidt failed to
convince Turkey to accept the IMF guidelines, and aid
discussions between Turkey and the Western allies have
been suspended. Turkish Foreign Minister Ockun called
EC ambassadors in Ankara together and delivered heavy-
handed demands for greater assistance than the EC had
offered. On Wednesday, Turkey unexpectedly postponed in-
Ecevit's tough talk is a gamble. He lacks the po-
litical strength to make the IMF's guidelines stick, and
so he hopes to drag the negotiations as close to the brink
as possible--trading on Turkey's enhanced value to the
West in the wake of the Iranian revolution. His tactics
of standing up to the West may divert domestic criticism
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If the West drops its insistence on the IMF condi-
tions, Ecevit will emerge strengthened. Turkey must have
aid, however, and it seems more likely that Ecevit event-
ually will have to back down and pay a hi h olitical
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CHINA: Change in 10-Year-Plan Targets
Beijing has announced that it intends to scale back
investment in the steel industry, the first of what prob-
ably will be a series of adjustments to its economic plan.
The move, designed to help guarantee improved living con-
_litions and a rapid expansion of exports, will channel
freed resources to agriculture and light industry.
China has called for a reduction in some other tar-
gets as well. The grain output target of 400 million
tons by 1985--compared with the 295 million tons in 1978--
is perhaps even more unrealistic than the goal for steel.
To achieve such a goal, China would have to produce an
additional 15 million tons of grain annually, compared
with the annual average of five million tons actually
produced over the past decade. Similarly, the plan for
doubling coal output by 1987 to more than one billion
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The Chinese Government lowered its sights two
months after a Central Committee Plenum subjected econo-
mic plans and policies to a careful review. The Chinese
Government apparently realizes that failure to meet
rising expectations could lead to potentially explosive
situations. Demonstrators in Beijing and Shanghai al-
ready have demanded better jobs and improved living con-
ditions. The leadership also wants to feel assured that
export goals will be met and that China will not suddenly
be confronted with large balance-of-payments problems.
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The Minister of Light Industry and a People's Daily
editorial for the first time have advocated imports of
advanced technology for light industry, with the editorial
referring to imports of technology as "an important me-
thod" for modernizing light industry.
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RHODESIA: Nkomo's Diminished Options
Joshua Nkomo, leader of the Zimbabwe African People's
Union, seems locked into a military course of action that
could prove disastrous for him and for ZAPU. To revive 25X1
his political fortunes, Nkomo needs either an accommoda-
tion with the government in Salisbury or a new interna-
tional push for a political settlement.
Several factors have contributed to Nkomo's dilemma:
-- His alliance with Robert Mugabe, leader
of the Zimbabwe African National Union,
has all but collapsed, depriving him
of an important political forum--the
Patriotic Front.
-- Mugabe has emerged as Nkomo's equal in
the nationalist movement, largely be-
cause of ZANU's steadily expanding mili-
tary activities inside Rhodesia.
-- The shooting down of two Rhodesian ci-
vilian airliners in the past six months
by ZAPU guerrillas has made an accommo-
dation with the Salisbury regime much
more difficult.
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Heavy fighting between the two groups, combined with the
likely increase in longstanding frictions between ZAPU's
political and military leaders, would throw Nkomo's lead-
ership position into jeopardy.
Nkomo probably is aware of the gloomy military pros-
pects, and he may try to revive his political fortunes by
again attempting accommodation with the Salisbury regime.
He would find it difficult if not impossible to approach
Prime Minister Smith. His relations with Bishop Muzorewa
are badly strained, but he might explore an accommodation
indirectly through other internal leaders such as Ndaban-
ingi Sithole or Chief Chirau. A new international initia-
tive toward a settlement also would significantly help re-
vive Nkomo's prestige and put him back in the limelight.
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MOZAMBIQUE - SOUTH AFRICA: Warning on Terrorists
//The South African Government late last month warned
Mozambique that it will not tolerate terrorist infiltra-
tion from Mozambique or the establishment of terrorist
bases in Mozambique close to the South African border-
South Africa presented the warning during
negotiations on a new railways agreement signed in
Johannesburg on 26 February. It believes Mozambique's
dependence on South Africa for transportation and as a
source of employment and foreign exchange will discourage
its support for the guerrillas. Mozambican President
Machel is firmly committed to the guerrilla cause,
however, and is not likely to curtail his support. I
INTERNATIONAL: Terrorist Threats
US diplomatic facilities in Vienna, Brussels, Stock-
holm, and Munich received letters last week from a group
calling itself the Secret Trans-World Organization for
Punishment threatening retaliation against US diplomats
for alleged US orchestration of the Chinese invasion of
Vietnam. The letters mention past attacks on US diplo-
mats and warn that armed bodyguards, armored cars, vary-
ing routes, and keeping schedules secret will not pre-
vent attacks by the organization. The stationery appears
to be of Japanese origin, but we have no other informa-
tion on the group.
President Malloum and Muslim Prime Minister Habre
met in Kano, Niqeria, on Saturday for peace talks. We
do not yet have any details on the discussions. A cease-
fire appeared to be holdinq satisfactorily in Ndjamena
yesterday.
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VENEZUELA: A New Administration Takes Over
//Luis Herrera Campins today becomes Venezuela's
fifth freely elected president since the fall of the dic-
tatorship 21 years ago. He faces a formidable task. The
public is impatient for quick solutions to the country's
many nagging problems--crime, corruption, inflation, poor
public services, and housing shortages. Herrera's Social
Christian Party (COPEI)--in the opposition during the
five-year tenure of outgoing President Carlos Andres Pe-
rez--does not have a majority in either legislative cham-
ber. It will have to rely on several small leftist par-
ties to enact the new President's legislative programs.//
//Many of Herrera's programs are keyed to the long
term and will not bear fruit until near the end of his
tenure, if that soon. Meanwhile, Perez' Democratic Ac-
tion Party will be looking for openings to attack the
new government if only to boost morale and start to heal
the serious divisions within the party that were aggra-
vated by its electoral defeat in December. The munici-
pal elections scheduled for 3 June are already being
touted as a referendum on the first weeks of the Herrera
administration.
//Overall, Herrera is unlikely to change the basic
policies of the Perez administration, but there will be
a shift in priorities and a reexamination of projects al-
ready under way. The new President will take a less ac-
tive international role and will concentrate on domestic
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affairs. It will probably require several months for the
new administration to settle in and establish the policies
that will characterize its ideological moorings for the
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//In foreign affairs, Herrera sets high priority on
close and friendly relations with the Carter administra-
tion.
Both Herrera and his party are con-
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and the oil companies during the last Social Christian
administration (1969-1974)F I
//Herrera--unlike his predecessor--holds no ambition
to be a spokesman for the Third World. He will, never-
vinced that Venezuela was treated inequitably by the US
theless, continue supporting a new international economic
order, human rights, and nuclear nonproliferation. Al-
though he, like the majority of Venezuelans, will be
sympathetic to democratic forces in Nicaragua, he is not
likely to allow Venezuela to become as enmeshed in that
situation as did his predecessor and will limit Venezuela's
role to defending the human rights of the Nicaraguan peo-
ple in regional and international forums.//F I
//Venezuela's support for OPEC will not change, and
the new administration will continue to press for petro-
leum prices as high as the world market will allow.
Herrera supported the most recent round of price hikes
and will place his government fully behind efforts to
increase crude oil prices at the OPEC meeting later this
month.//
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//Herrera agrees that the Orinoco Tar Belt is Vene-
zuela's resource of the future and will back all ef-
forts to exploit these huge reserves. He does not regard
the US or American petroleum companies as the sole source
of the necessary technology, however, and will continue 25X1
Perez' policy of seeking foreign assistance, principally
from Western Europe and Canada.// I
//Several issues are still unsettled from the na-
tionalization of the oil industry in January 1976; Herrera
will probably not be any more inclined than Perez to rush
settlement. Venezuelan courts are now considering back
tax claims against the former concessionaires totalling
nearly $1 billion--about equal to the total compensation
due the companies for their nationalized assets. Herrera
and his party have in the past been less flexible than
Perez on issues involving the national patrimony.//
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