NATIONAL INTELLIGENCE DAILY THURSDAY 11 MARCH 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000200010038-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 22, 2016
• Document Release Date: August 11, 2010
• Sequence Number: 38
• Publication Date: March 11, 1982
• Content Type: REPORT

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Intelligence
National Intelligence Daily
Thursday
11 March 1982
Top Secret
Copy 252
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Contents
/ Central America: Military Offensive in EZ Salvador . . . 1
3 Israel-Egypt: Boundary Disputes . . . . . . . . . . . . 4
,'"USSR: Debate Over Investment Strategy . . . . . . . . . 6
to Venezuela: Appeal to the US . . . . . . . . . . . . . . 7
Cl USSR-Iran: Sign of Soviet Displeasure . . . . . . . . . 9
~Q Greece: Socialist Budget . . . . . . . . . . . . . . . 10
EC: Roadblock to Sanctions Removed . . . . . . . . . . . 10
/~e UK: Amphibious Ships Retained . . . . . . . . . . . . . 12
/5-China: Accelerated Population Growth . . . . . . . . . . 12
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Top Secret
CENTRAL AMERICA: Military Offensive in El Salvador
The armed forces in EZ Salvador are taking the military ini-
tiative in order to upset insurgent plans to disrupt the elections.
Meanwhile, the Guatemalan Government appears headed for a showdown
with opposition parties protesting the election of General Guevara.
In Mexico, the Secretary of Defense has expressed concern that the
Guatemalan insurgency may eventually spread to his country.
The Salvadoran Army has begun a large-scale offen-
sive against a major insurgent base area in the central
part of the country. Almost 2,000 troops are involved
in the operation, which was launched with unusual secu-
rity precautions to avoid tipping off the guerrillas.
The base area is a key point in the distribution of
~/ insurgent supplies throughout El Salvador. It also is
a potential staging area for an attack on one of the
remaining bridges across the Lempa River.
Comment: The Army's most recent offensive appar-
ently upset insurgent plans to attack San Salvador, and
this operation may disrupt guerrilla raids on cities in
the country's central and eastern regions.
3
Postelection Crisis in Guatemala
All three opposition leaders are calling for demon-
strations against electoral fraud, including a daily
5 one-hour work stoppage. These protests are to culminate
in a large demonstration on Monday, the day election
results are to be validated by the congress. F
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government probably will declare a state of siege.
Top Secret
Comment: A general strike supported by business
and labor groups would embarrass the government but would
not jeopardize Guevara's accession to the presidency.
The Army shows every intention of using whatever force
is needed to silence dissent over the election results.
In the event of a strike or additional clashes between
the security forces and the regime's opponents, the
to maintain control there.
Mexican Secretary of Defense General Galvan recently
told a US official that he is convinced that the insur-
gency in Guatemala will eventually have an impact on
Mexico's internal security. Although Galvan acknowledged
C6 that some members of the government prefer to ignore the
problems posed by guerrilla activity along the border
with Guatemala, he said that he intends to do his best
with Guatemala.
Comment: Galvan's comments reflect growing anxiety
among senior Mexican military officials over the spread
of insurgency in Central America and highlight differences
3 in the government over Central American policy. Never-
theless, Mexican policymakers probably will continue to
resist efforts for more effective military cooperation
ua ema an gu p
Galvan claimed to have reached an agreement late
last month with his Guatemalan counterpart that will
ensure greater bilateral cooperation. He also expressed
a willingness to exchange information with the US on
t, t 1 ervilla o era1-ions
Top Secret
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Mediterranean Sea
Egypt
GAZA STRIP ,)
{Israeli- f
occupied
Israel 0
Sinai-Israel boundary
Israeli occupied f
El Arish-Ras Mohammed Line
(effective until 26 April 1982)
Gulf
of
Suez
Egypt
Boundary rOpresenrariwn is
net nmcassanly authodtatiue
Gulf
of
Aqaba
Res Mohammed
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2 withdraws on 26 April.
ISRAEL-EGYPT: Boundary Disputes
Israeli officials continue to insist that all disputes over
Z demarcation of the Sinai-Israel boundary be settled before Israel
1973 show the beach in Sinai, not Israel.
Sixteen of 100 border segments remain in dispute,
but only one, at Tabah Beach, where the Israelis have
built two tourist facilities, is being strongly contested
/ by Israel. The location of the border there was obscured
during the late 1960s when the Israelis destroyed the
border markers. Official Israeli plans for Tabah in
Israeli officials say they are flexible about most
of the disputed points but want the resorts at Tabah
included within Israel. Until this dispute is settled,
construction of crossing facilities at Tabah--one of
the four entry checkpoints on the border--cannot begin.
Tabah Beach.
Comment: Egypt and Israel probably will complete
the boundary demarcation before 26 April, although they
may not be able to finish their customs facilities at
the four designated crossing points by the date of with-
drawal. The tourist facilities at Tabah are within the
Sinai, and Egypt will continue to demand ownership of
to discuss a compromise.
Prime Minister Begin probably will not make the
issue a pretext for delaying withdrawal. He will urge
the Egyptians to compromise, however, and he also may
seek US intervention. Israeli Foreign Ministry officials
reportedly believe that Egyptian Foreign Minister Ali,
during his recent tour of the Sinai border with Defense
Minister Sharon, for the first time showed an inclination
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C
benefit in the longer run.
suggests support for these views within the top leader-
ship, particularly from party Secretary Kirilenko, who
has been the strongest supporter in the Politburo of
machine-building. The dispute is not over the rate of
growth of investment but over whether to allocate more
to machinery, with less going to such sectors as land
reclamation, chemicals, metallurgy, timber, and coal.
These and other sectors, Kirilenko would argue, would
USSR: Debate Over Investment Strategy
the five-year plan, which ends in 1985.
A recent Pravda article indicates that the debate is con-
tinuing over the investment priorities adopted Zast November in
standards.
Prominent Soviet economist Abel Aganbegyan criti-
cizes what he views as the insufficient expansion of
capacity for production of more and better quality
machinery, which, he maintains, is crucial to regain the
higher rates of growth of the past. Growth below this
level would prevent the USSR from raising living
Aganbegyan--noting manpower shortages, a planned
smaller share of output devoted to investment, and the
rising cost of extracting natural resources--stresses
the familiar theme that growth now heavily depends on
raising output per worker. This, he says, can be
attained only through much more rapid modernization and
mechanization of industry. The Soviets, however, have
been allocating only a. small share of total investment
to the machinery sector.
Comment: The publication of the article in Pravda
antagonizing powerful interest groups.
at the expense of growth in other sectors, thereby
The shifts might well create new bottlenecks or
intensify old ones. Moreover, they would have to come
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VENEZUELA: Appeal to the US
Top Secret
Venezuelan leaders are pleading for US help in dealing with
economic and political problems caused by sagging oil prices, but
so far they do not anbear to be considering specific long-term
Energy Minister Calderon Berti estimates that revenue
for 1982 will be $3.5 billion less than last year, and
private estimates indicate a more severe drop. The
Minister has told US officials privately that the losses
cannot be offset by domestic spending cuts alone and
2 urged the US to help.
Calderon Berti asked for a two-year agreement to
/ supply oil for the US strategic reserve, which would
enable Venezuela to meet minimum export needs. He noted
fj Venezuela's past services to the US, including supplying
4 petroleum during the OPEC boycott, and its current close
The ruling Social. Christian Party is moving toward
elections in 1983 burdened by an unpopular President, a
stagnating economy, and political infighting over who
should be the party's candidate. The opposition Demo-
cratic Action Party, which dominates congress, has
scheduled an inquiry into the government's oil policy
and hopes to broaden this into an attack on domestic
and foreign policies.
Venezuela traditionally has offset unexpected drops in
income by foreign borrowing, but, because of some past
excesses, Herrera is committed not to use this method.
Rather than cut back on social services, he may force
the nationalized oil industry to absorb the drop in
revenues. It could borrow abroad or cut investment,
particularly in the multibillion-dollar Orinoco heavy
Comment: Although President Herrera is making some
effort to reduce spending, his alternatives are limited.
oil development project.
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Top Secret
USSR-IRAN: Sign of Soviet Displeasure
Moscow's latest public displeasure over relations
with Iran appears designed to caution Tehran that it will
have to take new actions if the situation is to improve.
An article in Pravda this week acknowledges improved
economic cooperation but lists grievances against Iran.
Among other things, it cites the reduction of Soviet
diplomatic personnel in Tehran, the unilateral termination
of the Society of Soviet-Iranian Cultural Relations, and
the anti-Soviet rhetoric of Iranian media. The commen-
tary also criticizes "conservative factions" in the leader-
, / ship for obstructing closer bilateral relations.
l~
Comment: The article appears to be a warning that
Moscow's tolerance for anti-Soviet actions is limited
and that Tehran should meet the USSR halfway if it wants
continued economic and military support. The Soviets may
hope that Iran's current economic problem will provide
the necessary impetus for improving political relations.
The singling out of "conservative elements" may be aimed
at weakening their positions in relation to the factions
that apparently favor closer cooperation with the USSR.
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deficit by 5 percent.
GREECE: Socialist Budget
The government's first proposed budget projects a
deficit of $4 billion, almost 10 percent of GNP. Accord-
ing to press reports, expenditures are to rise by
35 percent--roughly 10 percent in real terms--including
increases of 27 percent for defense spending, 15 percent
for salary and pension costs, and 42 percent for social
welfare. Higher taxes are expected to produce a 58-
percent increase in revenues, which would reduce the
Comment: Revenue projections probably are too
optimistic, particularly if output remains depressed.
1 In addition, salary and pension expenditures, which
comprise over one-third of the budget, almost certainly
will rise more than projected because of large raises
already granted to lower income workers and government
promises to index wages. Prime Minister Papandreou
sees this budget as creating favorable conditions for
the five-year development plan beginning in 1983, but,
with falling private investment, income redistribution,
and an inflationary budget, economic problems are likely
to intensify by the end of the year.
EC: Roadblock to Sanctions Removed
Denmark's agreement to drop its procedural reserva-
tion against EC restrictions on imports from the USSR
removes the final roadblock to carry out the EC sanc-
tions that were put in final form late last week. The
measures reportedly will be imposed early next week by
all EC members except Greece, which continues to oppose
Washington to take action.
Comment Other EC members probably convinced
Copenhagen to drop its objection because of the minimal
effect sanctions would have on Denmark's trade and
because of the increasing pressures on the EC from
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UK: Amphibious Ships Retained
amphibious capability at the current level.
NATO that by keeping the ships it will maintain its
The government has decided to keep two large land-
ing ships that were to be scrapped, but it evidently
will go through with the sale of a carrier to Australia.
The carrier is to be delivered in late 1983, after a
sister ship becomes operational. The UK has claimed to
Comment: All major amphibious ships were to be
taken out of service by 1985, and the UK would have had
difficulty fulfilling its NATO mission of rapidly rein-
forcing the northern flank or moving intervention forces
outside the NATO area. Retaining the two ships will
help but will not stop the decline of UK amphibious
capabilities. Both Royal Navy officials and Conservative
backbenchers apparently are resisting the decision to
sell the carrier, and the government may have acted now
in order to counter parliamentary opposition to the sale.
CHINA: Accelerated Population Growth
Beijing is forecasting a birth rate of about 2 per-
cent per year for each of the next two years, up from an
average of about 1.8 percent for each of the last two
years. With a population of about 1 billion at the be-
ginning of this year, this would result in an addition
of some 28 million people by the end of 1983. Beijing
now admits that the "one-child-per-couple" policy needs
to be changed to make family planning more acceptable
and realistic. Some provinces recognize that making
the household rather than the commune the key agricul-
tural production unit and assigning land on a per capita
basis encourage large families.
it will further impede economic development.
below 1.2 billion through the end of the century, and
Comment: The more rapid increase in population
results in part from a higher proportion of couples of
childbearing age in the population, a new law lowering
the legal age for marriage, and the effects of the agri-
cultural policy. The new trend threatens to prevent
China from achieving its goal of keeping the population
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Top Secret
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