NATIONAL INTELLIGENCE DAILY (CABLE)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A031300130001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 15, 2016
• Document Release Date: April 29, 2004
• Sequence Number: 1
• Publication Date: April 16, 1979
• Content Type: REPORT

Director of
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Intelligence
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National Intelligence Daily
(Cable)
Top Secret
State Dept. review completed
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National Intelligence Daily (Cable)
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Contents
Briefs and Comments
Liberia: Riots in Monrovia . . . . . ? ? ? . ?
1
Poland: Winter's Effects on Economy. . . . . .
2
EC: Trade with China . . . . . . . . . . . . .
3
Italy:
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Special Analysis
Rhodesia: Looking Beyond the Election.
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The government of President Tolbert has been badly
shaken by widespread rioting and tooting that erupted in
Monrovia over the weekend in response to a proposed in-
crease in the price of rice, a staple for the city's
poor. Sporadic violence continued Zast night, and the
government has requested emergency US military equipment
and financial aid in restoring order.
Perhaps as many as 40 persons have been killed and
300 injured in clashes with the security forces, which
concentrated on combating the worst outbreaks of violence
and on guarding key government installations. Police and
military forces are overtaxed and exhausted, and some
army units have proven unreliable and joined in looting.
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The government has decided for now not to accept an offer
from neighboring Guinea to send 200 soldiers.
The government has declared martial law and a curfew -25X1
Extensive damage and looting has occurred in all business 25X1
sections of the capital. No American citizens or US
The government attributes the mob action to orches-
trated efforts by leftist opposition leaders and students
who called last week for demonstrations. The US Embassy
believes the rioting was spontaneous, however, and was
not politically organized. The rioting is a major set-
back for politically stable Liberia and President Tolbert,
who has been preparing to assume the chairmanship of the
Organization of African Unit which will hold its annual
summit in Monrovia in July.
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ingly difficult economic situation.
ing production shortfaZZs, which continued through the
first quarter of 1979, will complicate Poland's increas-
POLAND: Winter's Effects on Economy
Polish industrial output fell substantially last De-
cember and January in the wake of what Premier Jaroszewicz
called "almost unprecedented" cold and snow. The result-
a result of cutbacks in imports from the West.
and compound the difficulties industry already faces as
Industrial output in December dropped to 2 percent
below the December 1977 level and January production
plunged to 13 percent below the January 1978 level, as
transportation tieups and shortages of electrical power
partially idled plants. Output in many key industrial
materials and intermediate goods fell sharply, which is
likely to limit industrial production later in the year
The chemical industry, particularly affected by in-
terruptions in power supply and raw materials, reportedly
produced well below plan during the first quarter. This
may result in fertilizer shortages that could spell
trouble for Polish farmers, already behind in their
spring planting because of serious flooding in some
areas. F I
Poland will be hard pressed to make up lost produc-
tion and to smooth out deliveries of needed materials.
The chronic shortage of rail cars will hamper recovery.
The huge backup of urgently needed raw materials at
Polish ports highlights the transportation bottleneck.
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Warsaw also will be under pressure to overcome its
poor start in pushing exports this year. Early in Jan-
uary, the government declared a force majeure on exports
of coal and sulfur, which contributed to a 27-percent
January-to-January drop in exports to the West. The re-
sulting slump in export earnings is compounding the prob-
lems of the government as it struggles to meet Poland's
large and rising debt service payments.
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//West European hesitancy over certain trade conces-
sions threatens to delay the inaugural session next month
of the EC-Chinese joint commission. Several EC countries
have genuine economic difficulties with the proposed con-
cessions, and France may also be wary of accommodating
China on the eve of President Giscard's trip to Moscow.
West European interest in China, however, shows no sign
of declining.//
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//The joint commission, established in the EC-China
trade agreement negotiated over a year ago, is still
formally scheduled to meet. from 3 to 5 May in Beijing
to explore implementation of that accord. The EC, how-
ever, has been unable to agree on a position for nego-
tiating mutual concessions in the textile sector; some
countries favor increasing total EC imports, while others
would shift quotas to China from other producers. There
is also some disagreement over whether, and on what terms,
to treat China as a developing country for purposes of
the Community's generalized system of preferences.
France, the firmest opponent on textiles, has suggested
postponing the joint commission meeting for at least a
month. //
//France, Italy, and the UK fear the impact of Chi-
nese competition on their textile industries. EC offi-
cials also think France may still be irritated about
China's conflict with Vietnam and concerned about the
presidential trip to Moscow.//
//Other EC countries may also be reevaluating their
approach to the Chinese market. A West German newspaper
has suggested that many in the EC now feel the Community-
level approach of liberalizing Chinese quotas in many
trade sectors will primarily benefit West German exports.
EC countries may be anticipating more competition with
each other and thus may find little ground on which to
develop a more liberal EC policy for Chinese trade.//
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Force modernization and defense spending have be-
come an important political issue in Italy for the first
time in several years. The Communists and Socialists
have tried to use their control of nearly half the seats
in parliament to Limit arms spending and allocate re-
sources to social programs in the face of NATO's agree-
ment on a 3-percent real increase in defense expenditures.
With a national election set for 3 and 4 June, the issue
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Defense Minister Ruffini briefed the Senate last
month on the force modernization program authorized in
1977 and on the impact of a curtailment on Italian mili-
tary capabilities. Parliamentary review of authorized
but incompletely funded programs is disconcerting to the
military and threatens the arms industry. Inflation has
already forced a curtailment of some programs, and par-
liament, once it is reconstituted following the election,
will probably be inclined to cut others.
Because the current government crisis has precluded
parliamentary consideration, the arms debate has shifted
to the Italian press. Former military officers or other
defense advocates have written most published opinions.
Their articles discuss basic defense issues--such as
Italy's strategic objectives, its role in NATO, and the
relevance of new weapons to the nation's defense require-
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//Defense-related issues are not likely to play a
large role in the election campaign--but the Communists
and Socialists could use them as part of their attack on
the Christian Democratic governing record.//
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RHODESIA: Looking Beyond the Election
The transition to a black-Zed government in Rhodesia,
to be completed in late May or early June with the ap-
pointment of a black Prime Minister, will not mean an end
to the fighting or bring widespread international recogni-
tion of the new regime. It will, however, affect the
political context in which internal and external black
leaders maneuver for power, and it will pose hard choices
for those states most closet involved in the Rhodesian
imbroglio.
The Rhodesian Government is making an all-out ef-
fort to ensure adequate security and a large turnout this
week when Rhodesian whites and blacks go to the polls to
elect 72 black representatives to the House of Assembly.
The whites held a separate election last week to choose
the 20 directly elected white representatives. The 20
white and 72 black newly elected members of the House
will elect eight more white members on 7 May.
The government has canceled all military and police
leaves during the election period and called up all civi-
lian reservists to provide security and to police the
polling stations during the election. Some 75,000 Rhode-
sians will be mobilized for the effort. These forces will
be assisted by about 10,000 ex-guerrillas and local re-
cruits who are loyal to internal black leaders Bishop
Muzorewa and Reverend Sithole. Voting will be staggered
throughout the country over a five-day period. Govern-
ment pressure and intimidation by the black parties and
their auxiliary forces is likel to result in a fairly
high turnout.
Although the Zimbabwe African National Union and the
Zimbabwe African People's Union are committed to disrupt-
ing the election, it is unlikely either can prevent it
from taking place. ZANU and ZAPU now have more than
10,000 guerrillas inside Rhodesia and are infiltrating
several thousand more. Both groups plan to intimidate
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voters, attack electoral officials and polling stations,
and possibly stage incidents near the polling stations
to distract the security forces. It is likely, however,
that the Rhodesian security forces will be able to main-
in
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Although the new parliament will be numerically
dominated by blacks, the whites will retain substantial--
if not controlling--influence in the new government. Con-
tinued white domination of the military, police, judiciary,
and civil service will be ensured by the constitution,
which establishes criteria such as senior rank, longevity,
and "efficiency and suitability" for appointment to top
positions in these fields. Moreover, none of these so-
called entrenched clauses in the new constitution can be
amended or deleted without the approval of 78 members of
the House, which would require at least six white votes.
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Bishop Abel Muzorewa will probably win a strong
position of leadership in the new government of national
unity, with his party winning at least half the black
seats in Parliament. His closest rival, Reverend
Ndabaningi Sithole, has lost ground in recent months,
and his party probably will win no more than 20 seats.
Chief Jerimiah Chirau, the other black leader in the in-
ternal government, lacks broad popular support, but his
organization should pick up a few seats. Chief Ndiweni,
who broke with Chirau last November to form his own
Ndebele-based party, has not developed a strong political
base, but his part could win enough seats to gain a post
in the cabinet.
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Muzorewa will seek to consolidate his position by
strengthening his relationship with the whites, estab-
lishing greater control over the countryside, and in-
ducing defections from ZANU and ZAPU. He may try to
split the guerrillas further by offering to strike a
separate deal with ZANU or ZAPU. We doubt, however, that
the white leaders will show enough flexibility to allow
Muzorewa to propose a deal acceptable to either guerrilla
leader.
These factors account for a growing confidence among
whites that the internal settlement might eventually
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succeed. A continuation of these trends could lead to a
hardening of white attitudes and a growing reluctance to
seek a political deal with the guerrillas. Given the
probability that the level of fighting inside Rhodesia
will escalate, however, most whites probably will continue
to support efforts to negotiate some sort of a political
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The election of a new government, coupled with a
continuation of the fighting, will create some hard
choices for those states most closely involved with the
Rhodesian problem. The frontline states will continue
to support the guerrillas, but an intensification of the
fighting could force some presidents into an open-ended
commitment to an increased Soviet and Cuban presence in
their countries. The frontline states might also have
to consider the possibility of supporting one guerrilla
group against the other in the event of a civil war.
If the Soviets and the Cubans continue to favor
ZAPU over ZANU, they risk alienating Tanzania and Mozam-
bique, which would like to see support spread more evenly
between ZAPU and ZANU. If they agree to support both
groups, however, they could become involved on both sides
of a civil war. A decision by Nkomo to make a separate
deal with Muzorewa and return to Rhodesia could ultimately
force the Soviets and the Cubans to throw their support
solely behind ZANU. Regardless of how these various
factors play out, Soviet and Cuban involvement with the
guerrilla forces--and with their hosts--will continue to
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