NATIONAL INTELLIGENCE DAILY (CABLE) 10 FEBRUARY 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000100010132-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 21, 2016
• Document Release Date: August 28, 2008
• Sequence Number: 132
• Publication Date: February 10, 1982
• Content Type: REPORT

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Director of Top Secret
Central
Intelligence
Top Secret
COIV~DC:8 -034&-'
40 e rustr' 1 8~
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Top Secret
Israel: Concerns Over Lebanon . . . . . . . . . . . . . . 4
25X1
Thailand: Military Operation Against Drug Traffickers . . 5
Indonesia-USSR: Expulsion of Soviets . . . . . . . . . . . 6
Mauritania: Alleged Coup Plot . . . . . . . . . . . . . . 7
Special Analyses
Syria: Domestic Unrest Growing . . . . . . . . . . . . . . 9 25X1
Poland: Financial outlook . . . . . . . . . . . . . . 11
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Top Secret
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Danish Prime Minister Jorgensen yesterday publicly
criticized US and NATO intentions to confront the Soviets
at the CSCE meeting in Madrid on the Polish question and
attacked US policy on El Salvador. Jorgensen noted
Danish opposition to the imposition of martial law in
Poland, but implied that Washington had not sufficiently
considered Allied concerns before responding to the
Comment: These criticisms conflict with official
Danish statements at recent NATO consultations. They
apparently reflect Jorgensen's growing lack of confi-
dence in US leadership on the Polish issue. Denmark is
the first Ally to break from NATO's consensus favoring
strong condemnation at the CSCE session of Soviet inter-
ference in Polish affairs.
25X1
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Some Israelis apparently are warning Prime Minister Begin 25X1
that public opinion will not support a military move into Lebanon
unless there is a significant terrorist provocation.
A number of cabinet ministers are said to be con-
cerned that Begin and Defense Minister Sharon--through
a media campaign citing terrorist attacks on Jews in
Europe and infiltration of PLO terrorist groups through
Jordan--are laying the groundwork for an attack based
on minor cease-fire violations. The ministers believe
that such an attack would aggravate Israel's already
strained relations with the US and would be difficult
to justify to the public, particularly if it led to sub-
stantial Israeli casualties.
Some press commentary also is critical of Sharon's
tough statements, citing pleas for government restraint
from residents of northern Israel as signs of popular
concern.
Comment: The domestic debate on this issue probably
weighs heavily in Begin's calculations about when and
under what circumstances to strike at the Palestinians.
He almost certainly is anxious to have the cabinet and
public opinion solidly behind him should he order an
attack in the absence of a major provocation by the
Palestinians.
Nonetheless, Begin and Sharon appear convinced that
a military move into Lebanon will ultimately be necessary. 25X1
They also may be arguing that President Assad's domestic
troubles would inhibit any significant Syrian resistance
to a limited Israeli move into southern Lebanon.
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THAILAND: Military Operation Against Drug Traffickers
//The Thai Government is continuing sweep operations in the
northern part of the countr against dru traffickers belonging to
the Shan United Army.// 25X1
//Shan forces have splintered into small groups and
have fled to border areas or into Burma to regroup.
Burmese Army units are a short distance from the border
but have not cooperated with the Thai despite Rangoon's
longstanding enmity toward the Shan forces.//
//The three US tourists released last weekend by
the Shans were asked to give President Reagan letters
describing their group as an ethnic minority oppressed
by the Burmese.//
Comment: //Thailand will find it difficult to main-
tain pressure on the Shans over the longer term. Burma's
failure to take aggressive action against fleeing Shan
troops could lessen the impact of the offensive, and
Thailand would have to commit a large number of troops
to prevent Shan forces now in Burma from returning.//
//Although the Shan United Army blames the US for
Thailand's antinarcotics operations and could still
seek reprisals, it has not yet singled out Americans.
Despite protestations to the contrary, the Shan United
Army is primarily a drug-trafficking organization rather
than a "liberation army."//
5 25X1
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INDONESIA-USSR: Expulsion of Soviets
The Indonesian Government has expelled a Soviet
military attache for spying, arrested an Aeroflot offi-
cial who also may be involved in espionage, and shut
down a minor Soviet consular post on South Borneo. Anti-
Soviet sentiment has been building since last December,
when Radio Moscow aired a congratulatory message from
the banned Indonesian Communist Party to President
Brezhnev.
Comment: Jakarta's retaliatory moves reflect its
fears that the Soviets may meddle in national elections
in May and its heightened anxiety about Soviet influence
in Southeast Asia. The USSR probably will not make any
official conciliatory moves soon, however, and conse-
quently the Indonesians are likely to intensify their
anti-Soviet campaign.
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MAURITANIA: Alleged Coup Plot
the US Embassy in Nouakchott
report that former President Ould Saleck, the commander
of the capital military region, and other prominent
individuals were arrested last Saturday for allegedly
plotting to overthrow President Haidalla. Haidalla
briefly delayed his departure for the OAU meeting in
Nairobi to deal with the situation.
Comment: Haidalla's decision to attend the OAU
meeting reflects confidence that his position is secure,
but increasing criticism of his regime suggests that
another attempt to remove him may be made soon. The
upheavals in leadership that have become almost chronic
in Mauritania could further complicate the attempts to
resolve the dispute over Western Sahara, possibly by
providing new support for the Polisario.
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SYRIA: Domestic Unrest Growing
//The current heavy fighting in Hamah--the most serious since
1980--and coup plotting in the armed forces Zast December underscore
the breadth of opposition to President Assad's minority AZawite re-
gime. Despite these two challenges to his rule, Assad still seems
to retain the loyalty of the AZawite military elite, the core of
his power base. The failure to deal with the underlying causes of
discontent and Assad's increasing reliance on repression, however,
will intensify the alienation o the jority Sunni community and
give rise to more violence.// 25X1
//The government appears to have regained the upper
hand in Hamah and to have prevented the fighting from
spreading. The violence apparently grew out of a cam-
paign of repression by soldiers of the elite Defense
Companies, commanded by the President's brother Rifaat. 25X1
Religious leaders reportedly exhorted the residents of
Hamah to resist government repression, and for two days
they evidently were in control of the city.//
//Assad's immediate objective will be to restore
order in Hamah and keep the violence there from spread-
ing to Aleppo and other chronic trouble spots in the
north. He will use whatever force is necessary to quell
the remaining opposition in Hamah and maintain control
in Damascus. Elite units, largely manned by Alawites,
probably will continue to bear the brunt of fighting to
minimize the risk of serious splits in the regular armed
forces along confessional lines.//
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Top Secret
//The President does not appear to be in imminent
danger of losing control of events. His predominantly
Alawite guard forces are large enough to handle several
civil disturbances simultaneously, and his security ap-
paratus appears able to keep on top of threats to the
regime from within the armed forces.//
//During his more than 11 years in power, Assad has
developed an intricate system of checks and balances
to maintain his hold on power. There are several over-
lapping and competing intelligence and security services
to neutralize antiregime activity.//
//Rifaat commands more than 20,000 heavily armed
soldiers. They are stationed primarily in and around
Damascus and are trained to seize vital points in the
city and protect key leaders.//
//Assad's nephew Adnan commands a smaller antitank
force of 4,000 to 5,000 men on the outskirts of the
capital. These units constitute formidable obstacles
to a coup attempt.//
//Assad is likely to become increasingly dependent
on repression and his security apparatus to retain power.
Nonetheless, the resentment among the majority Sunni
community of Alawite arrogance, corruption, and domina-
tion of Syria will grow.//
//The regime's secular ideology and its socialist
approach to the economy have alienated large sections
of the middle class. The use of repression may enable
Assad to survive for a considerable time, but the deep-
seated causes of political alienation represent a growing
threat that will ultimately lead to the President's un-
doing.//
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Poland's financial situation since the imposition of martial
law has deteriorated further and now has come down to default, con-
tinued stalemate with the banks, or delayed rescheduling. None
of these outcomes will do much either to damage Warsaw's already
shattered hard currency trade and financial relations or to restore
its creditworthiness. Prospects remain poor for surmounting the
financial hurdles that prevent imports of the raw materials, spare
parts, and semimanufactured goods necessary for economic recovery.
The economic outlook, therefore, is for continued stagnation and
falling standards of living.
Warsaw has notified the banks that the interest due
last year will be paid up by Monday, paving the way for
signature by March of the agreement rescheduling Poland's
obligations for 1981 to private creditors. Bankers
generally are confident that the Poles will keep their
promise, but $200 million remained unpaid at the end of
January. To be paid on time, interest payments will
have to be made faster than they have been in the past
Even if Warsaw fails to meet the deadline, the
banks still may not call default. Creditors have held
off through many months of Polish moratorium, arrearages,
missed deadlines, economic sl , political turmoil,
and now martial law. um 25X1
The banks would prefer to keep the trickle of in-
terest payments flowing and to avoid writing off large
loans. The banks hope that Moscow will provide the
money, but Polish officials claim that they expect no
further Soviet help.
The likelihood that Poland will be declared in
default will increase, however, if the impasse continues
on rescheduling payments due in 1981, while Poland falls
further behind in its payments due this year. Any of
the 501 banks with which Warsaw is behind in its interest
and principal payments could declare Poland in default.
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Creditor governments could take similar action on
several grounds:
--In some cases, Warsaw apparently has not paid the
10 percent of principal and interest due in 1981
that was not covered by the agreement rescheduling
obligations for official creditors.
--Overdue payments already are building this year
on government-guaranteed credits.
--The imposition of martial law makes the regime vul-
nerable to a provision that allows the Western
creditors to abrogate the rescheduling agreement
under exceptional circumstances.
Legal default would prompt a scramble by private
creditors for Poland's assets in the West, the value of
which would offset only a fraction of Poland's hard
currency debt. The impact on foreign trade would be 25X1
limited, because it dropped substantially in 1981 and
has fallen further since martial law was declared.
Although the immediate additional damage would be
small, being declared in default probably would make it
more difficult for Poland to reestablish its creditworthi-
ness and delay access to new loans. The stigma of
default would be difficult to overcome, and suits and
claims could tie up Polish financial and commercial
relations for some time.
If the impasse continues beyond next week without
a declaration of default, Warsaw would still have to
place an extremely high priority on paying banks on 1981
interest rather than buying imports. With reserves
depleted and export revenues reduced to a trickle, there
are few funds left for imports.
If Poland manages to pay interest and other required
fees it will have cleared the immediate financial hurdle.
The completion then of the rescheduling agreement would
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be the first major economic agreement with the West since
martial law. The Poles unrealistically hope that banks
would then restore short-term credit lines, allowing
some expansion of trade.
Even with a private debt relief agreement Poland
would have to tackle the massive burden of some $10
billion in payments due in 1982. This year Warsaw owes
$5 billion in principal to Western governments and banks,
and another $1.8 billion to non-Western creditors.
Interest charges are estimated at $3.3 billion.
The Polish Government apparently has made no pay-
ments due this year, concentrating instead on meeting
obligations for 1981. With no debt relief arranged,
Poland is falling behind in its payments to all credi-
tors at the rate of $800 million per month.
The Poles are likely to request a moratorium on
debt service for 1982 and then pay those creditors most
likely to declare default or to extend new credits.
Highest priority will be given to paying the $2.5 billion
in interest to private banks. The Poles and their pri-
vate creditors also probably will urge governments to
open negotiations for debt relief on guaranteed obli-
gations due to be paid this year or at least ask official
creditors not to declare default.
As long as nearly all Western government credits
remain blocked by sanctions, Warsaw will not be able to
repeat the tactic it employed last year, using commodity
credits extended by Western governments to cover debt
service. Even if Warsaw is able to join the IMF late
this year, private bankers are unlikely to change their
attitudes or to provide much immediate financial help.
The Poles' recent announcement that they plan to
accumulate a trade surplus of $500 million for the
first half of this year indicates that Warsaw is choos-
ing to sacrifice imports to pay at least some debt
service.
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Top Secret
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