NATIONAL INTELLIGENCE DAILY MONDAY 2 APRIL 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00970R000200020003-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 22, 2016
• Document Release Date: June 2, 2010
• Sequence Number: 3
• Publication Date: April 2, 1984
• Content Type: REPORT

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OCPAS/CIG
CY#F 28S
National Intelligence Daily
Monday
2 April 1984
CPAS NID 84-077JX
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Contents
Iran-Iraq: Military Activity ........................................................ 1
Argentina: Domestic Reaction to Bridging Loan .................... 2
Honduras: Military Shakeup ....................................................
USSR-Syria: Status of Relations ............................................ 5
Romania-USSR: Dispute Over Military Modernization .......... 7
EC: Farm Spending Reforms .................................................. 9
UK-Nicaragua: Concern About Blockade .............................. 10
Ell Salvador: Courting the Conciliationists .............................. 11
Ethiopia: Growing Financial Difficulties .................................. 11
Australia: Changing Uranium Policy ........................................ 12
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IRAN-IRAQ: Military Activity
Flooding in the area north of At Racrah nrnhahIv will slow Iranian
preparations for a major offensive.
recent heavy rains
have flooded a large area between Iraqi and Iranian forces east of the
marshes. Some Iranian units have withdrawn to the north because of
in late March Tehran began
efforts to mobilize 1 million reservists by 1 April. Iranian officials
expressed doubt that this goal could be met, however, and said Iran
might, send no more than 500.000 poorly armed reservists to the
Comment: The Iranians could move some of their boats down
from the Majnoon Islands area to help move troops across the
flooded area. Because of the large number of men needed in the
coming offensive, however, they likely will decide against an
amphibious operation and will wait until the rain and flooding
The Iraqis probably are pumping water from the marshes into the
area to the east to help block the Iranian advance. Iraqi air attacks
have been ineffective against Iranian forces so far and will have to
become more aggressive and accurate if they are to help blunt Iran's
major offensive.
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ARGENTINA: Domestic Reaction to Bridging Loan
Opponents of the government already are strongly criticizing the
loan floated on Saturday, indicating that President Alfonsin is likely to
face difficulties in reaching a final accord with the IMF and foreign
lenders.
Argentine legislators clashed Saturday over the nation's
emergency loan package, according to press reports. The chairman
of the government's finance commission endorsed the arrangement,
but Peronists and leftists fear new austerity measures will be
demanded in return for financial assistance. They argue that the loan
package is a US gambit intended to use the participation of four Latin
countries-Mexico, Brazil, Colombia, and Venezuela-as a lever on
Buenos Aires to accept an IMF-based program.
Comment: Alfonsin remains committed to reaching an accord
with IMF and foreign lenders. Although. he is likely to work out a letter
of intent with the Fund in the next several weeks, domestic opposition
probably will hinder quick progress on a final accord.
The National Congress, including the Peronist-controlled Senate,
must approve both the budget and any final IMF agreement. The
Peronists and their labor union allies, as well as many of the
government's own supporters, will resist wage and public spending
cuts that threaten economic recovery.
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HONDURAS: Military Shakeup
The forced resignation of Armed Forces Commander Alvarez
demonstrates the strength of Honduras's nascent democracy and is
unlikely to, affect its strong support for US policy in the region.
President Suazo told the US Ambassador on Saturday that
growing dissatisfaction with Alvarez's. military leadership and reports
of his involvement in domestic politics had prompted his removal.
Military meddling-reportedly directed by Alvarez-was evident at
the annual convention of the opposition National Party in February.
Moreover, the US Embassy reports that Alvarez recently restricted
the access of military personnel to Suazo and also may have withheld
national security information from the President.
The Ambassador reports Suazo said that the military high
command backed the action-which also deposed three key Alvarez
supporters-and will submit candidates for Alvarez's replacement to
the Congress today. Air Force Commander Lopez, who attended
Suazo's meeting with the Ambassador, said that Alvarez had
tarnished the military's image internationally and that the Armed
Forces were united in support of his dismissal. Both Suazo and Lopez.
reiterated Honduran support for US policy toward Nicaragua and El
Salvador and pledged continued cooperation in joint military
Comment: The military shakeup appears to be based solely on
domestic political considerations and probably will have little effect
on Honduran foreign policy. Suazo probably feared that Alvarez's
recent contact with the National Party signaled a resurgence of the
military's traditional alliance with the Nationalists, which in the past
forced the Liberal Party from power. Moreover, Alvarez's recent
moves to restrict Suazo's military contacts, coupled with several
politically flavored public statements, no doubt struck Suazo as
challenging to his authority.
The relative ease with which Suazo was able to take charge
indicates that the military favored Alvarez's removal and strengthens
the two-year-old civilian government's consolidation of power. Lopez
currently appears to be the frontrunner as Alvarez's replacement. His
reputation for competence and integrity probably will be welcomed by
members of the military who apparently took exception to Alvarez's
autocratic style.
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Ties between Moscow and Damascus, because of Syrian success
in Lebanon, are at a high point, but some disagreements persist. F
A Lebanese official told US officials that the
Soviets shared the Syrians' satisfaction with the current situation in
the Middle East, particularly the withdrawal of Western forces from
Beirut and the abrogation of the Israeli-Lebanese accord. The USSR
also accepts Syria's handling of its relations with Lebanese President
Gemayel.
The Soviets reportedly believe that Israel's current military
advantage would enable it to win a major conflict with Syria but that
the Syrians could inflict heavy losses. According to the Soviet official,
the USSR has agreed to supply Syria with additional modern aircraft
and air defense equipment. He also claimed that training for Syrian
personnel to assume control over SA-5 air defense missiles in Syria is
nearly complete and that the transfer would occur in the near future.
Moscow reportedly still supports Yasir Arafat's leadership of the
PLO and is considering his request to visit Moscow.
Syria, however, wants Arafat's removal and would view such a
visit as a setback for Syria. President Assad reportedly balked at the
USSR's requests to intercede with Iran to halt the war.
Comment: Moscow almost certainly believes support for Syrian
policies in Lebanon has helped restore its credibility in the Middle
East and has temporarily thwarted US efforts to resolve the Arab-
Israeli dispute without Soviet participation.
Other reports have suggested that the Soviets would transfer
SA-5s to Syrian control. Moscow also may be less willing to provide
arms at recent levels, because it believes large shipments of Soviet
weaponry to Syria since the summer of 1982 and the US withdrawal
from Lebanon have helped restore a military balance.
Longstanding Soviet-Syrian differences on Arafat and on the war
may persist. Nonetheless, Moscow is unlikely to let them sour bilateral
relations as Ion yria remains its only firm Arab ally.
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ROMANIA-USSR: Dispute Over Military Modernization
Bucharest is selling its most modern domestically produced
military equipment abroad, despite Moscow's urgings that it
modernize its armed forces more quickly.
In recent years the USSR has pushed Romania and other Warsaw
Pact members repeatedly to improve their military capabilities, but
Bucharest's severe economic problems have slowed its acquisition of
new weapons. To acquire hard currency and reduce production costs
for new weapons, however, the Romanians sold nearly all of their new
domestically produced TR-77 tanks to Egypt last year. They
reequipped their military units with obsolete T-34 tanks taken from
storage.
Romania also has refused to participate in Warsaw Pact
coproduction arrangements for the T-72 tank and the 122-mm self-
propelled howitzer. Instead, Bucharest has decided to produce less
expensive, modified versions of older generation systems that
incorporate improved Western technology. Romanian TR-77 and
TR-800 tanks, for example, are modified Soviet T-55s with more
advanced fire-control systems that reportedly are based on illegally
acquired Western technology.
Comment: Moscow appears to have agreed at least tacitly to
Bucharest's efforts to improve the economy at the expense of
modernizing its armed forces. The Romanians have refused in part to
participate in Warsaw Pact coproduction programs because the
arrangements apparently require prior Soviet approval of foreign
sales of jointly manufactured weapons. Romania's inability to produce
the most modern military equipment, however, is likely to have
reduced the attractiveness of its weapons to countries in the Third
The Romanians probably will continue to pursue foreign sales to
the detriment of their military forces. As a result, the capabilities of
their military forces, which already lag behind those of other Warsaw
Pact members by some 10 to 20 years, will continue to decline.
-CIA, DIA, NSA-
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EC: Farm Spending Reforms
EC Agriculture Ministers on Saturday adopted several
unprecedented measures to cap the runaway farm spending that has
brought the Community to the brink of bankruptcy. The new
measures, which have been blocked by Ireland since the EC summit
two weeks ago, impose quotas with strict penalties on milk
production and cut overall farm prices in the EC this year by about
1 percent. The ministers also agreed to phase out the system of
border taxes and subsidies on intra-EC agricultural trade.
Nevertheless, EC farm spending will still exceed expected revenues
this year by $2-3 billion.
Comment: Approval of the agricultural package considerably
eases the crisis atmosphere fanned by the failure of two EC summits,
but the Community's financial disputes remain unresolved. The EC
still faces insolvency this fall because the UK is likely to veto
proposals to raise additional funds to cover the budget shortfall
unless London's annual payments to the EC budget are permanently
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UK-NICARAGUA: Concern About Blockade
London is concerned about the possible consequences of
casualties from the mining of Nicaraguan ports. A Foreign Office
official told US Embassy officers that the recent mining of a vessel
with a British crew has raised fears that loss of British lives would
seriously embarrass Prime Minister Thatcher. The official implied that
Washington should prepare plans for dealing with the political fallout
in the UK that probably would result from casualties incurred as a
result of the mining.
Comment: Prime Minister Thatcher is basically sympathetic to
US objectives in Central America. Since the Grenada invasion,
however, she has been sensitive to charges that Washington does not
take British views seriously enough, even when British lives are
endangered by US-supported policies. The British probably hope that
the US will make Nicaraguan rebels aware of potential problems from
their mining activity and that Washington will keep London informed
so as to minimize difficulties for Thatcher.
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EL SALVADOR: Courting the Conciliationists
Christian Democrat Duarte and ultrarightist D'Aubuisson both are
seeking support from Conciliationist Guerrero in the second round of
the presidential election, but Duarte appears to have the inside track.
Final results of the first-round of voting, as released to the press,
show Duarte with 43.1 percent, D'Aubuisson with 29.7 percent, and
Guerrero with 19.3 percent.
US Embassy sources say the Christian
Democrats are preparing a broad platform in hopes of attracting the
Conciliationists and smaller parties and assuring a majority in the
National Assembly.
Comment: The second round of the voting probably will be held
early next month. Guerrero may be reluctant to support Duarte openly
for fear of retaliation from the ultraright, but he is likely to attempt to
arrange a secret deal. Duarte almost certainly would like to get
Conciliationist support for the second round, and he probably
calculates he is in a strong bargaining position. The negotiations are
likely to be lengthy.
ETHIOPIA: Growing Financial Difficulties
Addis Ababa's precarious foreign exchange situation threatens
its ability to pay for imports. A source of the US Embassy says that
current reserves will cover payments for two weeks of imports, as
compared with an average of 13 weeks in 1983. The government
reportedly is issuing unbacked checks to foreign suppliers of luxury
goods. It also is delaying crediting the accounts of foreign embassies
and international organizations operating in Ethiopia.
Comment: Addis Ababa is likely to hope that export earnings
from traditionally high coffee shipments in the next few months will
relieve the cash shortage. Nonetheless, the government probably will
have to take additional emergency measures, stiffen import controls,
and ask the USSR for more economic assistance. Moscow is unlikely,
however, to do more than allow Addis Ababa additional time to make
debt payments due this year on military aid. Ethiopia eventually may
have to overcome its reluctance to approach the IMF-which it views
as an instrument of US policy-for a balance-of-payments loan.
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AUSTRALIA: Changing Uranium Policy
Prime Minister Hawke is gaining broad support for a more liberal
uranium export policy, despite the opposition of the ruling'Labor
Party's strong antiuranium faction. A draft of an official position
paper, which was leaked to the press last week, supports
development of new uranium mines and permits exports to countries
maintaining strict nonproliferation standards. In addition, a growing
number of key party leaders recently have joined Hawke in rejecting
the party's platform, which calls for a complete phaseout of the
$420, million per year export industry.
Comment: Hawke wants to exploit Australia's uranium reserves,
which are the largest in the non-Communist world, and has been
lobbying hard for his position. He faces a showdown with the left wing
over the issue at the party's biennial conference in July. The
conference will provide his first chance to change the platform, and it
now appears he has the votes to win. A victory would strengthen his
role as party leader and undercut further leftwing influence in his
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