NATIONAL INTELLIGENCE DAILY (CABLE) 7 DECEMBER 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000600010135-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 22, 2016
• Document Release Date: August 25, 2010
• Sequence Number: 135
• Publication Date: December 7, 1982
• Content Type: REPORT

A 6 Central
Intelligence
National Intelligence Daily
(Cable)
CPAS NIDC 82-284C
7 Decem
2 '9
 East Germany: Financial Prospects . . . . . . . . . . 5
USSR - Saudi Arabia: Foreign Ministers Meet . . . . . . 6
USSR: Personnel Changes . . . . . . . . . . . . . . . . 6
USSR-Chad: Possible Reopening of Soviet Embassy . . . . 7
Australia: Early Election Possible . . . . . . . . . . . 8
Argentina: General Strike . . . . . . . . . . . . . . . 8
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 Defense Minister Ustinov's interview with TASS yesterday was
intended both as the authoritative Soviet response to President
Reagan's arms control speech last month and as an effort to spur
Ustinov threatened that if the US proceeds with the
deployment of MX, the USSR will deploy a similar ICBM.
He condemned the "dense pack" concept as a violation of
the SALT agreements and rejected US counterarguments
as "deliberate lies." He further affirmed that a US
decision to defend MX with an antiballistic missile
system would be a "direct breach" of the ABM Treaty if
the US chose to relocate its designated ABM site from
Ustinov may be seizing on the US MX decision to
put the onus for the arms race on Washington by portraying
Moscow's missile program as a justified and necessary
response. His assault'on alleged US ABM plans are
similarly designed to call US arms control motives into
question. Although the US noted in a Common Understand-
ing to the ABM Treaty that its ABM system would be lo-
cated at Grand Forks, the treaty itself allows each
side to defend either its capital or an unspecified
ICBM complex.
The choice of Ustinov to respond directly to
President Reagan's speech in such a lengthy and specific
rejoinder suggests that the Defense Minister may be
emerging as the new regime's principal spokesman on
defense issues--a role formerly assumed by Brezhnev.
In a separate address to a Soviet military audience
yesterday, Ustinov similarly warned that Moscow would
respond to US weapons programs. At the same time, he
noted that existing Soviet military might is "sufficient"
to meet the current challenge from the US--perhaps sug-
Toro Secret
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 Strong austerity measures have improved East Germany's trade
balance, but it stiZZ may need to reschedule its debt repayments.
East Berlin in recent months has cut imports sub-
stantially and has increased exports somewhat to reduce
its need for loans. Party leader Honecker late last
month announced a trade surplus of over $1 billion for
the first 10 months of 1982, the best report of his
//Despite the surplus and punctual repayments of its
debts, East Germany has only limited access to Western
credit.
Comment: East Germany has managed to avoid a
liquidity crisis this year by drawing down reserves,
improving its trade performance, and refinancing about
half of its debts falling due. The situation could be
more precarious next year, however, because much of
East Germany's maturing debt apparently has been con-
verted into shorter term obligations, its reserves are
dwindling, and Western bankers--except perhaps those in
With debt service payments equal to 69 percent of
annual foreign exchange earnings, East Berlin probably
will have to adopt even harsher austerity measures in
the months ahead to persuade Western bankers of its
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 An announcement in Pravda on Saturday reported the
meeting the day before between Foreign Minister Gromyko
and Foreign Minister Saud, who was a member of the visit-
ing Arab League delegation. The one-line report gave no
indication of the atmosphere or the subjects discussed.
Saudi media have given extensive coverage to Riyadh's
participation in the delegation and have stressed the
need for a "constructive" Soviet role in the Middle
Comment: //Moscow presumably is extremely pleased
with this first high-level Soviet-Saudi contact since
diplomatic relations were suspended in the 1930s. The
circumspect treatment of the meeting probably was in def-
erence to Saudi sensitivity about such contacts and may
represent a gesture of good will toward Riyadh. Saudi
leaders hope their involvement in the talks in Moscow
will prod the US into moving the peace process forward
and will deflect domestic and foreign Arab criticism
that Riyadh is too accommodating toward Washington.//
TASS yesterday announced the replacement of Komsomol
chief Boris Pastukhov by a deputy, Viktor Mishin. Pastukhov
replaces the head of the Soviet publishing organization,
who is being given another job. These shifts and rumors
of impending changes involve the propaganda bureaucracy,
which was under the direction of party secretary Suslov
until his death last January.
Comment: General Secretary Andropov presumably
approved of the changes, but it is not known whether
he instigated them. A Western journalist's report that
some members of Brezhnev's personal staff have been
relieved as assistants to the General Secretary is
another indication of Andropov's progress in assembling
 The Soviet Charge to Chad, who resides in neighbor-
ing Cameroon, visited N'Djamena last week and hinted to
the US Ambassador that Moscow soon plans to reopen its
embassy, which has been closed since the spring of 1980.
The Charge added that he met with a Foreign Ministry
official and that he believes President Habre's pros-
Comment: Although the Soviets backed former Presi-
dent Goukouni's regime and have no illusions about Habre's
pro-Western sentiments, they now seem resigned to dealing
with his government. Reopening their Embassy at this
time, however, probably would strain relations with
Libya. Libyan leader Qadhafi is increasing military aid
to Goukouni's rebel forces in northern Chad. Moscow
might be skeptical about Qadhafi's capabilities and
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 //The government's unexpected victory in an important
parliamentary byelection has revived speculation that
Prime Minister Fraser may call an early national election
between March and May 1983. The election result also
is prompting talk in the opposition Labor Party again
about a leadership change, with Bob Hawke--the most
popular political figure in Australia--seeking to replace
party leader Hayden.//
Comment: //Fraser may decide to capitalize on what
he sees as the voters' rejection of the Labor Party.
Political observers had been speculating that fraser
would prefer to complete his term of office which ends
next November, in hopes of an improvement by then in the
economy. If he decides to go to the polls early, Fraser
probably will wait until after the summer holiday season
ends in late January. Constitutional provisions against
elections in the final six months of a government's term
An estimated six to nine million workers partici-
pated in a nationwide work stoppage yesterday, according
to unconfirmed press reports. Buenos Aires was paralyzed
as public transportation remained idle and factories and
shops closed, although no violence or large demonstra-
tions were reported. Late yesterday President Bignone
reportedly met with key ministers.
Comment: The success of the strike will embolden
opponents of the regime, complicating political and eco-
nomic planning. Labor and political leaders will use
the strike's broad backing to build support for additional
demonstrations this month, and calls for early elections--
now tentatively scheduled for late next year--will inten-
sify. These leaders have already rejected the military's
proposal for an agreement on key economic and political
issues, and they now will be even less willing to negoti-
ate. Moreover, concessions to workers on wage and bene-
fit increases could adversely affect negotiations with
foreign lenders who are requiring austerity measures as
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 Sanitized Copy Approved for Release 2011/02/18: CIA-RDP84T00301 R000600010135-2