NATIONAL INTELLIGENCE DAILY (CABLE) 8 DECEMBER 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000600010139-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 22, 2016
• Document Release Date: August 25, 2010
• Sequence Number: 139
• Publication Date: December 8, 1982
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/03/16: CIA-RDP84T00301 R000600010139-8
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National Intelligence Daily
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Sanitized Copy Approved for Release 2011/03/16: CIA-RDP84T00301 R000600010139-8 4 2
 Sanitized Copy Approved for Release 2011/03/16: CIA-RDP84T00301 R000600010139-8
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NATO: Meeting of Foreign Ministers . . . . . . . . . . . 1
Chad-Libya: Government Reinforcements in the North . . . 2
USSR-Finland: Tikohonov's Visit . . . . . . . . . . . . . 3
France-Argentina: Shipment of Naval Aircraft . . . . . . 7
Iran: Election of Assembly of Experts . . . . . . . . . . 7
Special Analysis
Poland: Prospects for Servicing Debt . . . . . . . . . . 8
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NATO: Meeting of Foreign Ministers
//NATO Foreign Ministers meet tomorrow and Friday to discuss
arms control, force modernization, and East-West relations, but
Spain will not sign the final communique./1
Spanish Prime Minister Gonzales announced in a press
conference in Madrid yesterday that Spain "will abstain
with respect" because of its current review of its NATO
membership. The announcement was made following the
first cabinet meeting of the new Spanish Government.
Comment: //The other Allies, except Greece, will
support NATO's decision to proceed with INF modernization
unless concrete results are achieved at the Geneva nego-
tiations. Although Denmark's parliament voted yesterday
to suspend its INF infrastructure payments, the Danes
//The Allies will endorse the zero option negotiating
position and will pledge again to welcome all con-
structive Soviet proposals at Geneva. West German
Foreign Minister Genscher may urge the Allies to respond
to a recent report of the USSR's willingness to discuss
//The Canadians, Norwegians, Danes, and Greeks have
urged moderation in dealing with the new Soviet leader-
ship. Almost all the Allies oppose specific reference
to NATO's declaration of last January that Poland has to
lift martial law, release political detainees, and engage
in dialogues with the Church and Solidarity before normal
relations with the West can resume. The French prefer
coordinating Western economic policy with the Eastern
Bloc in other forums that include West European neutrals
and Japan, and Paris wants language dealing with East-West
//The Allies almost certainly will not ask the US to
change the agreed INF negotiating position. At the same
time, they will need to show flexibility at Geneva and
at the MBFR and CSCE talks to undercut their domestic
critics and enlist support for missile deployments sched-
uled for next year. They probably will react cautiously
to a lifting of martial law in Poland but are likely to
reassess applicability of the NATO guidelines.//
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 //A French official says Habre has approximately 1,500
lightly armed men in the north.
The US Embassy in Cotonou reports that dissident recruits
are being flown from Benin to Libya for infiltration into
//The US Embassy in Paris reports that France still
has not decided to give Habre military aid. Chad received
some pledges of economic aid last week at an international
donors' conference in Geneva, but it did not receive much-
needed budgetary support.//
Comment: Barring a direct Libyan incursion, Habre's
forces probably can defend most of their northern posi-
tions against limited attacks by the dissidents and may
be able to overrun some of the smaller dissident camps.
The dissidents, however, are getting increasing support
from Libya, while Habre continues to suffer shortages of
ammunition and supplies.
Habre's small contingent of loyal northern troops
in the south will have difficulty maintaining order if
guerrilla activity breaks out there. The loyalty of the
southern troops currently allied with Habre is likely to
 Premier Tikhonov, in his meetings with Finnish President
Koivisto, will stress the new leadership's desire to maintain good
relations with Helsinki but will demand cooperation in redressing
the imbalance in bilateral trade.
Koivisto today is to visit the new Soviet town of
Kostamuksha, just east of the Finnish border, where he
and Tikhonov will inaugurate a mining complex built
largely by Finnish workers. The two leaders are to
proceed tomorrow to Helsinki, where Tikhonov will begin
a three-day official visit. Talks are expected to focus
on trade and economic cooperation, especially the problem
Comment: Tikhonov's visit was originally set for
late November and was postponed because of Brezhnev's
death, but Moscow quickly rescheduled it to demonstrate
continuity in Soviet foreign policy and the desire to
maintain good relations with Finland. Moscow hopes re-
cent agreements, including one allowing the Finns to
collect interest on the amount of the Soviet trade def-
icit, will dissuade Helsinki from trying to redress the
trade imbalance by limiting exports to the USSR.
The new Soviet leaders will be no more willing than
their predecessors, however, to permit any major modifi-
cation of the unique Soviet-Finnish relationship. Moscow
has not been pleased with the more independent tone of
the government under Koivisto on some issues, and it will
continue to remind the Finns of the constraints imposed
by bilateral agreements on Finnish policy.
Finnish Government spokesmen, citing anticipated
reductions in the price of Soviet gas to Finland, have
displayed renewed interest in Soviet offers to sell
additional gas by extending to the country's two largest
cities a pipeline that now terminates in eastern Finland.
The Soviets may urge Helsinki also to make early decisions
on building a 1,000-megawatt nuclear-power plant in
Finland, undertaking exploitation of mineral resources in
the northeastern part of Finland, and starting other
joint projects. The Finns probably would prefer to put
off a decision on the still-untested Soviet nuclear
reactor and have shown little enthusiasm for allowing
a sizable Soviet presence in as strategically important
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//The Swedish Navy has discovered evidence of tampering with
an underwater communications cable connecting the Swedish mainland
sea floor in the immediate vicinity of the cable. While
no cuts or taps have been found on the cable, it does
appear in at least three places to have been lifted
from the sea floor and moved up to a meter and a half
//The Swedes conclude that the tracks, which were
partially covered by sediment, were made in October by
a submersible operating from a foreign submarine. They
now believe the submarine was involved in tapping oper-
25X1 The Navy has begun an examination of
other possible sites along the Swedish coast for evidence
that may explain earlier submarine activity.//
Comment: //While the conclusions drawn from this
discovery are still speculative, they offer one plausible
explanation of the numerous submarine incursions reported
over the past year in Swedish waters. The tape also
gives the Swedish Navy evidence with which to justify
its costly and embarrassing submarine hunt in October
and to support its request for funding of improvements
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INTERNATIONAL: UN Voting on Disarmament Issues
The UN General Assembly, which today begins its
annual voting on disarmament issues, is likely to pass
several resolutions opposed by the US that have been
overwhelmingly approved by the First Committee. These
include requests for US and Soviet reports on START and
INF talks, for a nuclear weapons freeze, and for a
nuclear test ban. The Assembly also is to consider the
committee's endorsement of proposals for a conference
to strengthen the verification provisions of the ban on
biological weapons, for an investigation by the Secretary
General of charges of continued use of chemical weapons,
and for talks on arms control in space. In Committee
action, all NATO members except Greece, Denmark, and
Iceland voted against the nuclear weapons freeze, and
the US cast the sole vote against the test ban resolution
drafted by its allies and a ainst the Mexican resolution
on START and INF.
Comment: The Soviets will use the disagreements
between the US and its allies and the requested report
on INF in their propaganda campaign to encourage further
antinuclear sentiment in the West. Moscow and its fol-
lowers probably will be isolated in opposition to the
Swedish resolution on biological weapons. The Western
resolution on the chemical weapons investigation will
pass by a smaller margin because some non-aligned states
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 that some 50 tons of munitions and spare parts are in-
cluded in the latest shipment.//
The new Super
Etendards have strengthened Argentina's naval air force.
Even so, targets in the Falkland Islands remain at the
far reaches of the Super Etendard's unrefueled combat
range, and the British have substantially improved the
An election will be held on Friday for an Assembly
of Experts that will have the power to choose Ayatollah
Khomeini's successor. The 83-man Assembly will have an
eight-year term. Qualifications for membership include
expertise on Shia law and loyalty to the Islamic
republic. Iranian leaders have stressed that the election
is a precautionary measure unrelated to Khomeini's health
and that it probably will not result in the selection of a
successor any time soon.
Comment: The ruling clerics are trying to institu-
tionalize the succession process and further consolidate
the revolution. The Assembly probably will include the
most senior clerics and top government leaders. It can
choose either a single successor or a council of three
or five clerics, but lack of consensus among the clerics
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//The decline of the Polish economy apparently has been stopped,
but recovery is not likely any time soon because of the burden of
the hard currency debt. The Poles signed a rescheduling agreement
with private banks in November, but foreign government creditors
have not rescheduled the debt for 1982, and overdue payments of at
least $5 billion are likely at the end of the year. If martial law
is lifted this month as anticipated, the Poles are certain to urge
Western governments to lift sanctions and begin debt relief dis-
cussions. Poland almost certainly will not be able to obtain the
nearly $12 billion worth of debt relief and new credits it needs
Warsaw has been forced to run a trade surplus this
year to try to pay interest owed to Western banks. Pre-
liminary Polish data show that exports in the first
10 months of 1982 were equal to the pace in 1981 but that
imports were down 28 percent. The trade surplus, however,
meets only a small part of Warsaw's large financial needs.
The reductions in imports have hindered economic
recovery. Grain imports have been slashed, leading to
declines in livestock production. Manufacturing indus-
tries have been hurt by shortages of imported spare
//On 3 November Western banks and the Polish Govern-
ment signed an agreement to reschedule 95 percent of prin-
cipal payments due to private banks in 1982. The agreement
calls for the remaining 5 percent of principal to be
paid next year and for interest payments of $1.1 billion
originally due in 1982 to be paid in three installments
on 19 November and 20 December 1982 and on 20 March
 Although Warsaw's financial condition has continued
to deteriorate and overdue debts have soared, relations
between the Poles and the bankers are somewhat smoother
than earlier in the year. Polish officials who argued
for a moratorium on Poland's debt seem to have lost
influence, and threats by Western bankers to declare
Polish loans in default have subsided. There are wide-
spread reports, however, that banks in several Western
countries are quietl and gradually writing off their
Polish loans.
The Poles now face a financial gap in 1982 of as
much as $6.7 billion, most of which is unrescheduled pay-
ments owed to Western governments and to CEMA creditors,
Arab banks, Brazil, and suppliers. Debt relief from
these creditors may cover $1 million to $2 billion, but
the gap probably will still be about $5 billion at the
end of 1983.
Warsaw will owe western governments $7 billion next
year, including unpaid debts due this year, and, in anti-
cipation of the lifting of martial law, pressure already
is building to open debt relief talks. Sweden, Austria,
and Switzerland announced to the Paris Club last week
that they were considering splitting from the other
//Some West European governments argued earlier this
year that the West should respond favorably to small
steps by Warsaw to ease martial law restrictions. Most
West European allies probably will push for rescheduling
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after the end of martial law--even if NATO's conditions
for the lifting of martial law, the release of internees,
and the opening of discussions with Solidarity and the
If the creditor governments decide to resume re-
scheduling negotiations with the Poles, both sides will
start far apart. Warsaw's anticipated request for total
debt relief will be a first step in its efforts to secure
resumption of large Western credits to revive the Polish
economy. The governments, on the other hand, are primarily
interested in getting Poland to make debt payments.
//Both sides are likely to be disappointed. Even
before martial law, Western governments had stopped pro-
viding new money. Moreover, they will be competing with
//More than $13 billion in debt service is due next
year. This includes:
-- $5 billion in principal payments on medium-
and long-term loans under original loan con-
tracts.
-- About $4 billion in interest, including char es
on rescheduling agreements.//
//Assuming industrial production does not slump fur-
ther, a current account surplus--excluding interest--of
$1.4 billion is possible, leaving a financing requirement
of $11.7 billion. Since the outlook remains poor for
new credits, however, the financing requirement for 1983
will have to be covered by debt relief, whether under
formal agreements or by creditors' continued tolerance
//The Poles indicated to the banks last month that
they want total debt relief next year--rescheduling of
all principal payments and the recycling of all interest
paid into new short-term credits. The banks immediately
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 //According to other reports, the Poles may ask to
renegotiate the repayment schedule for obligations due
over the next three years. Serious discussions will not
begin until after the first of the year. Negotiations
then may be complicated by the failure to honor past
agreements. Warsaw this year has met payments called
for under the agreement of 1981 more or less on time but
will have-difficulty servicing two such agreements next
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