NATIONAL INTELLIGENCE DAILY (CABLE) 7 MAY 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000300010023-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 21, 2016
• Document Release Date: September 23, 2008
• Sequence Number: 23
• Publication Date: May 7, 1982
• Content Type: REPORT

Approved For Release 2008/09/23 : CIA-RDP84TOO301 R000300010023-9
Di
rector of
Central
Intelligence
('9V
National Intelligence Daily
(Cable)
7 May /981
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9 25X1
Iran-Iraq: Fighting Intensifies . . . . . . . . . . . . 5
China-India: Beijing's Diplomacy. . . . . . . . . . . . 7
Angola-Namibia: Debate Over SWAPO . . . . . . . . . . . 8
Haiti: Possible Political and Economic Changes. . . . . 9
Ethiopia-Sudan: Rapprochement Ending. . . . . . . . . . 11
International: Interest Rate Problems . . . . . . . . . 11
China: Budget Increases . . . . . . . . . . . . . . . . 12
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
Iq
Next 3 Page(s) In Document Denied
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
IRAN-IRAQ: Fighting Intensifies
days.
Top Secret
Both sides have launched new attacks after a ZuZZ of several
//Iraqi forces launched a counterattack yesterday
against Iranian units holding sections of the Ahvaz-
Khorramshahr road. The equivalent of two armored divi- 25X1
sions reportedly are involved in this effort.//
//The Iraqis claim their Air Force is conducting
widespread strikes against Iranian forces west of the
Karun River. Iran is transferring major reinforcements
into its bridgehead in that sector.//
The Iranians attacked yesterday west of Dezful and
reportedly have scored some gains on the road to the
border post at Fakkeh.
the Iraqis are fighting
harder than they did in late March. Moreover, the US
Interests Section in Baghdad notes that public confidence
has been increased by government claims of major gains
and media coverage of Iranian losses.
The Interests Section also reports serious civil dis-
turbances in the Kurdish cities of Irbil and As
Sulaymaniyah. The demonstrations against the government
appear well organized and timed to coincide with the
Comment: //Despite the Iraqis' improved performance,
they are unlikely to commit sufficient forces or have the
determination to drive the Iranians off the Ahvaz-
Khorramshahr road. The Iranian attacks
probably are diversions aimed at preventing
Iraq from transferring reinforcements south.//
//The demonstrations in the Kurdish cities--the first 25X1
major demonstrations against the government since the war
began--will be extremely unsettling to Iraqi leaders, who
are already anxious to end the war.//
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84T00301 R000300010023-9
CHINA-INDIA: Beijing's Diplomacy
China is accelerating efforts to normalize relations with
India to capitalize on Prime Minister Gandhi's attempts to dilute
her close ties with Moscow.
Chinese officials have informed the Indian Government
that they are prepared to seek a comprehensive settlement
of the border dispute during their second round of talks
in New Delhi beginning on 17 May. One official hinted
at Beijing's willingness to make concessions in the dis-
puted Aksai Chin portion of the western frontier.
China also has proposed that each side open one con-
sulate, that the Indian Defense Minister visit China this
year, and that the Indians send a fact-finding group to
Tibet. The Chinese previously have attempted to. prove
their good intentions in Tibet by seeking an accommoda-
tion with the exiled Dalai Lama, who resides in India.
Comment: Beijing could return part of Aksai Chin
without jeopardizing its strategic road through the
region. If New Delhi indicates that it eventually will
give up most of the Aksai Chin in return for Chinese
recognition of Indian claims in the disputed eastern
sector and for a few additional concessions, the Chinese
would respond favorably.
At this point, however, the Chinese do not expect
rapid progress. A lack of Indian flexibility probably
would keep the Chinese from tabling their concessions,
although Beijing will continue to hint at them to keep
negotiations alive.
Approved For Release 2008/09/23: CIA-RDP84T00301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84T00301 R000300010023-9
The rejection by the South-West Africa People's Organization
and the Frontline States of the Western Contact Group's proposals
on an electoral system for Namibia will cause new tensions in the
Angolan Government.
Angolan officials had urged SWAPO to accept the
proposals, but the other Frontline States--with the
possible exception of Zambia--did little to support these
efforts. Many members of the regime in Luanda are anxious
for a settlement on Namibia, which they hope will bring
an end to South African attacks in southern Angola. Most
Angolan leaders believe that, unless the Namibian problem
is resolved, they will never be able to cope with the
South African - backed insurgents of the National Union
for the Total Independence of Angola.
Comment: SWAPO's rejection of the proposals, which
apparently was encouraged by Moscow and Havana, will in-
tensify the debates in Luanda between pro-Soviet hard-
liners and black nationalists over continuing Angola's
unconditional support for SWAPO and over the pervasive
Cuban and Soviet presence in Angola. The hardliners
have had the upper hand for some time, and the position
of President dos Santos and the black nationalists prob-
ably has been weakened further by the lack of progress
in the negotiations on Namibia.
As South African and UNITA attacks continue to cause
casualties and to damage Angola's shaky economy, either
side might attempt to force a change in the regime.
Top Secret
Approved For Release 2008/09/23: CIA-RDP84T00301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
HAITI: Possible Political and Economic Changes
cal opposition and prepare the way for fiscal reform.
President Jean-Claude Duvalier recently has taken several
actions that could encourage the formation of an independent poZiti-
Duvalier has announced that municipal elections
would be held next year and that he would establish a
human rights commission. He invited Haiti's exile
return and participate in the new political process.
groups
Last weekend, he fired two members of the Cabinet for
obstructing the economic reform efforts of widely re-
spected Finance Minister Bazin.
Comment: Duvalier's modest attempts at political
liberalization and fiscal accountability appear to be
part of a broader effort to disassociate his regime from
that of his notorious father. The President realizes
that efforts to overthrow his government are likely to
become increasingly serious if he does not make some
inroads on Haiti's many political and economic problems.
His commitment to reform, however, will be measured by
performance of the human rights commission.
the holding of honest promised elections and by the
The President's reaffirmation of Bazin's mandate
probably will persuade the IMF to go ahead with the first
installment of a $39 million loan. Although Brazil is
not likely to extend an invitation to Duvalier, his will-
ingness to travel reflects his new confidence in the
strength of his position.
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84T00301 R000300010023-9
ETHIOPIA-SUDAN: Rapprochement Ending
Relations between Ethiopia and Sudan continue to
deteriorate because of Addis Ababa's collaboration with
Libya in the training of Sudanese dissidents and plots
to assassinate President Nimeiri. Last week, Chairman
Mengistu rejected an official Sudanese protest of the
Ethiopian activity, charging that Khartoum's support of
the Eritrean insurgents is the primary reason for the
rising tensions.
Comment: //The Ethiopian leader is concerned over
the inability of his forces to score a decisive military
victory in Eritrea. His anti-Nimeiri activities appar-
ently reflect in part his erroneous belief that the
Sudanese are providing large-scale aid to the Eritreans.
The Sudanese probably will ease their restraints on the
Eritreans and other Ethiopian dissidents. Khartoum also
will facilitate assistance to these groups from moderate
Arab states.//
High interest rates in the major industrialized
countries are likely to be a contentious issue at the
economic summit in Versailles, with most of the partici-
pants blaming US rates for at least some of their problems.
Nominal interest rates in the seven countries are falling,
but, except in Japan, they remain near all-time highs.
The high cost of credit is contributing to the reduction
in real investment in all of the major industrialized
countries. Canada, West Germany, Italy, and the US have
been hardest hit, with estimated declines of 4 to 8 per-
cent in investment from a year ago.
Comment: Steep US interest rates have contributed
significantly to increased rates in Japan, West Germany,
Canada, and the UK but have played only a minor role in
France and Italy, where high inflation and large budget
deficits probably have been the dominant factors. Infla-
tion is slowing in Japan, West Germany, Italy, and the
UK, and this--together with possible relaxations in mone-
tary policies--is likely to help reduce interest rates
in these countries, particularly if US rates also drop.
On the other hand, ballooning government deficits or sub-
stantial increases in private demand for credit as econ-
omies start to recover would tend to keep rates up even
Approved For Release 2008/09/23: CIA-RDP84T00301 R000300010023-9
 CHINA: Budget Increases
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
Budget estimates for 1982 issued this week in
Beijing indicate that military outlays will rise by
6 percent to $9.9 billion and capital spending will
increase by nearly 20 percent.to $16.5 billion. Despite
these increases, the government hopes to keep the deficit
down to $2 billion through austerity measures, another
domestic bond issue, and $2.8 billion in foreign loans.
ness and the slowdown in economic growth.
Comment: The new budget reverses the trends in
1979-81 that showed defense spending declining from
$12.4 billion to $9.3 billion and budget-financed in-
vestment outlays--excluding foreign loans--falling from
$24.7 billion to $13.9 billion. The reversal reflects
pressure from those in the leadership, including repre-
sentatives of the Army, concerned over military prepared- 25X1
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
Iq
Next 2 Page(s) In Document Denied
Approved For Release 2008/09/23: CIA-RDP84TOO301 R000300010023-9
 Approved For Release 2008/09/23 : CIA-RDP84TOO301 R000300010023-9
1VV "ll I L