NATIONAL INTELLIGENCE DAILY (CABLE) 28 AUGUST 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000400010202-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 21, 2016
• Sequence Number: 202
• Content Type: REPORT

Central
Intelligence
Top Secret
National Intelligence Daily
(Cable)
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CPAS NIDC 82-202C
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 Israel-Lebanon: PLA Brigade Evacuated Overland . . . . . 1
25X1
Poland: More Demonstrations Ahead . . . . . . .
4
 //One of the two Syrian-controlled Palestine Liberation Army
brigades stationed in West Beirut was evacuated overland to Syria
yesterday. Syrian and Israeli officials have assessed the prospect 25X1
for withdrawing their forces in Lebanon, which now total about 46,00,
and 33,000, respectively. A Soviet press agency item has reemphasized
Soviet unhappiness with US deployments in Lebanon.//
//The Palestine Liberation Army brigade, consisting
of about 1,255 fighters, was the first unit evacuated by
road convoy. Italian troops escorted it to the Syrian
border. Another 1,300-man Palestine Liberation Army 25X1
brigade and 3,000 Syrian regular troops are scheduled
Approximately 720 PLO fighters left for Syria by
ship yesterday, bringing the total of PLO personnel
evacuated to some 5,000.
on e nes ay quoted a
ran ing military o icia as saying Syria was prepared
to withdraw its remaining forces from all of Lebanon if
the Israelis leave. On the same day, an assistant to
Israeli Defense Minister Sharon told a member of the US
defense attache's office that Israel's forces would not
leave Lebanon until the Syrians had departed. He said
Israel was prepared to push the Syrians out militarily
Comment: The Syrian officer's statement implies a
willingness by Damascus to reconsider its refusal to pull
out its troops without a request from the Lebanese Presi-
dent and the Arab League. The Syrian presence in Lebanon
is sanctioned by an Arab League mandate, and the Syrians
have rejected an equation between the Israeli presence
and their own. The official, however, may be signaling
that a deal could be struck at some point that would lead
 //Although Israel has been drawing down its forces
in the Beirut area, Israeli troop dispositions in the
Bekaa valley remain essentially unchanged. Israeli units
withdrawn thus far have been reserve cadres and artillery.//
//Regular Army units continue to man positions along
the Beirut-Damascus highway and in the Bekaa Valley.
Israeli troops in Lebanon now number about 33,000, down 25X1
//Syria reportedly has reinforced its units in the
Bekaa Valley with at least two brigades
Damascus
has maintained a high force level in Lebanon since early
Comment: Syrian reinforcement of the Bekaa Valley
would indicate that Damascus does not intend to withdraw
from Lebanon without a fight. Nevertheless, Israeli
air supremacy, dominance of the ridgeline overlooking
the Bekaa Valley, and ability to bring in reinforcements
rapidly would give Israel a substantial advantage in any
An article by the Soviet press agency, Novosti,
in English on Thursday revived the USSR's categorical
opposition to the deployment of US forces in Beirut.
The item charged the the deployment was an "unfriendly
act" that further aggravates US-Soviet relations. Al-
though it suggested that the USSR could not remain in-
Pravda carried a related but much more restrained 25X1
article by the same author, a prominent commentator on
 Comment: The press agency article contrasts with
recent Soviet media silence on this issue
Use of this low-level vehicle seems designed to
reemphasize Moscow's unhappiness with the deployment 25X1
without committing Soviet prestige to opposing something
 The regime, meanwhile, is working hard to intimidate
the populace. Yesterday it announced completion of a
Polish-Soviet military exercise and the strengthening of
security forces in the militant cities on the Baltic.
Polish television announced that police had arrested 108
demonstrators in Lodz, about 110 kilometers southwest of
The USI lestimate protests in
the next several days will rival those staged in mid-May.
They also expect the regime will be able to keep demonstra-
tions under control. (C)
Pravda on Thursday published an overview of the internal
situation in Poland that focused on the slow economic and
social recovery there and blamed the persistence of
"bourgeois ideology" and "revisionists" in the private
sector. The article ends on an uncertain note, however,
foreseeing a continued "difficult struggle" in Poland.
Comment: The publication of such an article suggests
Moscow is concerned about what may occur in Poland next
week and wants to prepare the Soviet public for any even-
tuality. The reference to "bourgeois" and "revisionist"
remnants underlines Soviet frustration at the persistence
of worker opposition. In the coming week, the USSR is
likely to highlight economic sanctions and other alleged
Western interference in Polish affairs and to signal
support for the martial law regime's efforts to maintain
 Iraqi airstrikes on Khark Island over the past two weeks have
damaged oil export facilities and discouraged some tankers'from
loading.
//Air attacks on 18, 20, and 25 August destroyed four
medium storage tanks. They also damaged a pipeline lead-
ing to the jetty where tankers load oil and one of six
pipelines that carry crude to Khark Island from the main-
//Although no tankers had been observed loading at
the jetty, at least five tankers have loaded at other
facilities at Khark since 17 August. Tankers are still
Comment: //Iraq probably will have to inflict major
damage to the loading facilities or to a foreign tanker
before a substantial reduction in Iranian oil exports is
likely.//
//In spite of the risks, there are still great incen-
tives for purchasers. Even with higher transport and
insurance rates, Iranian crude still has a $2.40 per
barrel cost advantage over Arabian crudes. Moreover,
tanker owners stand to make better than 100-percent
profit for such dangerous hauls in spite of a depressed
the Iranian economy. Oil payments usually lag two to
three months. This flow of income and Iran's foreign
exchange reserves should allow Tehran to continue the
 Approved For Release 2008/08/06 : CIA-RDP84T00301 R000400010202-9
Top Secret 25X1
COSTA RICA - NICARAGUA: Asylum Offered to Key Exile
President Monge's offer of asylum to exiled Nicaraguan revo-
lutionary hero Eden Pastora underscores his determination to continue
the hard line against the Sandinistas, despite some opposition in 25X1
his ruling party.
//Monge made the offer when he met Pastora during
presidential inauguration ceremonies earlier this month 25X1
in the Dominican Republic. It is contingent on Pastora's
pledge to refrain from the kind of military activity that
Comment: Monge's offer, which Pastora almost cer-
tainly will accept, appears to be a victory for Volio.
He is largely responsible for the increasingly hard line
against the Sandinistas, and he has been locked in a power
The President realizes Pastora will be difficult to
control. His offer, however, probably reflects his anger
at Sandinista complicity in a recent terrorist incident
//The move will aggravate tensions with Nicaragua, but
Monge may reason that growing international disillusion
with the Sandinistas will reduce chances of retaliation.
Nevertheless, the Sandinistas regard Pastora's popularity
 SPAIN: Early Election
Prime Minister Calvo SoteZo announced yesterday that national
elections will be held on 28 October. After CaZvo SoteZo met with
the cabinet on Thursday, King Juan Carlos signed a decree dissolving
parliament. 25X1
Comment: The early election favors the opposition
Socialists, who have considerable momentum as the front-
running party. Calvo Sotelo and other leaders of the
Center Democratic Party probably believed, however, that
they had to start the campaign now in order to prevent
further defections to former Prime Minister Suarez's
Social Democratic Center and other new splinter parties.
An early election also denies the new parties time to
build up campaign organizations and establish their
identity with the voters. 25X1
 CHILE: Cabinet Changes
President Pinochet on Thursday asked for the resigna-
tion of his cabinet and probably will name new ministers 25X1
next week. As in the shakeup in April, the government
announced that new economic measures designed to combat
the deepening recession will accompany the changes.
Comment: Pinochet has effectively used such shakeups
in the past to regain the political initiative and re-
store confidence in his administration. The last two
reorganizations, however, brought rapid and unexpected
economic policy changes and led to increased
certainty. Pinochet's hold on power depends
publi
large
c un-
ly on
the order and economic progress he has enforced.
public confidence is shaken, his regime could face
If
its
25X1
 Public support for President Rene is eroding fol-
lowing the Army muting last week, according to the US
Embassy. The public generally sympathizes with the
mutineers, who may have included up to 200 of the 700-
man Army. The Seychelois especially resent the key role
Comment: Rene is likely for now to continue relying
on Tanzanian troops. Further weakening of his position
or another challenge to his rule probably would cause him
to ask France or the USSR to assist his security services.
The French, however, are reluctant to become involved
for financial and political reasons, and Moscow would be
unlikely to provide a military garrison. The USSR would
be more likely to try to arrange Cuban and East German
help and, in return, might seek regular air and naval
access to facilities in Seychelles
Top Secret
 The financial crisis in Mexico is highlighting again the grow-
ing debt burden of the developing countries. Mexico, Argentina, and
Brazil are the three largest debtors among developing countries, and
the first two are likely to obtain some form of debt relief from
commercial banks before the end of the year. The international
financial community is increasingly concerned about the implications
The total of the developing nations' medium- and
long-term external debt is likely to approach $550 bil-
lion by the end of 1982, up from $150 billion only seven
years ago. Until this year only the smaller developing
countries--with an aggregate debt of only $10 billion,
or some 2 percent of total developing country debt--have
been in arrears on their debt payments. Now Mexico and
Argentina are in arrears, and the countries in evident
financial trouble have nearly 25 percent of the aggregate
The international financial community is most con-
cerned about the situation in Mexico. Overambitious
development goals; heavy borrowing that has pushed for-
eign debt, including short-term, to upwards of $80 bil-
lion; and loss of confidence among Mexicans in the govern-
ment's ability to manage the economy underlie the crisis.
Mexico has virtually exhausted its foreign reserves,
but it still has to repay more than $30 billion in short-
and long-term loans coming due over the next 12 months.
Mexico City, in what promises to be the largest debt re-
scheduling in history, probably will try to refinance
more than $20 billion in short-term bank debt and to get
 Other countries, especially in South America, also
are having difficulty managing their international fi-
nances. Argentina--the third-largest debtor among de-
veloping countries--faces serious repayment problems
following the economic disruptions caused by the costly
The resignations last week by the Economy Minister
and the president of the Central Bank in a dispute over
economic policy will reinforce the conviction growing in
the banking community that the Argentine economy is pre-
carious. Unless Buenos Aires moves quickly to put its
house in order, it probably will also be forced to seek
a rescheduling of the $15 billion coming due in the sec-
Chile and Peru also could encounter difficulty be-
cause of reduced export earnings, rising debt servicing
burdens, and declining confidence among lenders. Venezuela
could face repayment problems if it is unable to refinance
Debt restructuring is becoming more attractive to
other countries in less immediate jeopardy. This option
is now openly discussed in Brazil, even though the country
is meeting its foreign financing requirements in good
order. Growing numbers of Brazilians are discussing the
Some Brazilian economists are calling for the major
Latin debtors to seek a collective renegotiation. Despite
the debate, there apparently is no support for voluntary
debt renegotiations in Brazilian Government circles or
The current debt crises in Mexico and Argentina are
bound to stimulate a great deal of concern about the
stability of the international financial system. So far,
both countries have acted responsibly in dealing with
 Debt renegotiations by Mexico and Argentina will not
of themselves impair the profitability or solvency of
the creditor banks as long as full interest payments are
made. Nonetheless, they are likely to make bankers and
substantial credit to the developing countries.
The debt problems of the developing countries will
cause lenders to pay closer attention to the particular
economic and political problems of individual nations.
The maturity structure of the external debt of a number
of major borrowers, including Argentina and Venezuela,
has become heavily weighted toward short-term obligations.
The need for constant refinancing, combined with the
susceptibility to reductions by the banks in new lending,
Although developing-country financial problems are
not limited to Latin America, the debt management dif-
ficulties being encountered there have the most serious
implications for the US. The Federal Reserve reports
that US banks--excluding foreign subsidiaries--had ex-
tended some $70 billion in credits to Latin American
borrowers at the end of the first quarter of 1982. US
banks account for some 40 percent of industrial countries'
US financial institutions could be whipsawed by
financial rumors, unanticipated shocks, and the failure
to arrange orderly debt reschedulings. Any visible effort
by the US Government or by US banks to help resolve Latin
American economic problems by encouraging austerity meas-
 Approved For Release 2008/08/06 : CIA-RDP84TOO301 R000400010202-9
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