NATIONAL INTELLIGENCE DAILY TUESDAY 24 FEBRUARY 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00091R000400100001-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 27, 2016
• Document Release Date: August 30, 2012
• Sequence Number: 1
• Publication Date: February 24, 1987
• Content Type: REPORT

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Director of
Central
Intelligence
National Intelligence Daily
Tuesday
24 February 1987
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Contents
Top Secret
Lebanon-Israel-Syria: Reactions to Intervention ........................ 1
China: Reforms in Rural Economy Affirmed ............................... 2
USSR: Modernization Pressures Taking Toll on Industry ............. 3
Iran-Iraq: New Attacks in South .................................................. 5
India-Pakistan: Talks Productive ................................................ 5
Suriname: Dealing With Demonstrators ...................................... 6
Special Analyses
North Yemen: Opportunities and Risks of Oil Wealth ................ 8
South Africa: Labor Troubles in Gold Industry .......................... 10
Hungary: Radicalization of Intellectuals ...................................... 12
24 February 1987
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Top Secret
Syrian Presence in Beirut
Mediterranean Sea
Top Secret
I Beirut
International
Airport
24 February 1987
Syrian checkpoint
c=> Roving Syrian
security patrols
Palestinian refugee
camp boundary
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LEBANON-ISRAEL- Reactions to Intervention
SYRIA:
The various Lebanese factions and Israeli leaders are reacting
cautiously to the Syrian military intervention in West Beirut.
Druze leader Junblatt told US officials he will cooperate with the
Syrians by allowing them to control supply roads into Beirut through
Druze strongholds southeast of the city.
There were sporadic clashes yesterday as Syrian forces continued to
move into selected areas of the city,
a warning would be premature.
Israeli officials have assumed a wait-and-see attitude toward the
Syrian troop movement, according to Israeli press. Although some
hardliners are demanding Tel Aviv issue a warning to Syria about
moving south toward Israel, Defense Minister Rabin argues that such
factional skirmishes may continue.
Even if the Syrians impose a temporary calm between the factions,
none of the underlying conflicts have been resolved. The Syrian forces
remain too small to police the city effectively, and kidnapings and
Christians are unlikely to seek a showdown with Syria.
assisted PLO infiltration into Beirut earlier this year-but the
Comment: Syria appears to have successfully pressed Junblatt into
accepting its intervention for now, but it will be difficult for Junblatt to
control his soldiers in Beirut, many of whom are non-Druze Muslims.
Even if Syrian forces stay out of Hizballah neighborhoods, their
presence will constrain Hizballah. Palestinians loyal to Arafat and
their Lebanese Sunni Muslim allies are certain to resist, especially if
the Syrians and their Shia ally, Amal, try to enter the refugee camps.
The Palestinians will also seek help from the Christians-who
While Israel is officially opposed to Syrian involvement in Lebanon,
it probably welcomes Syrian entanglement and preoccupation with
Top Secret
1 24 February 1987
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Top Secret
Reforms in Rural Economy Affirmed
The document, which was delayed by policy disputes and
Hu Yaoban 's resignation, calls for wider im lementation of rural
reforms
not yet deterred pragmatic economic reforms.
China's annual document on rural policy this year affirms key
reform policies, including new experiments with rural markets,
indicating that in this sector at least ideological debates have
industry.
Ithe document calls for expanding local rural credit
markets and supports the growth of individual enterprises and rural
It also reportedly calls for greater use of market incentives to increase
grain production, instead of falling back on state quota mechanisms.
State investment in rural infrastructure-especially irrigation
facilities-is to increase by 40 percent, with the emphasis on grain-
producing regions and poor areas.
Comment: The reformist tone of the document appears to be a
victory for acting party secretary Zhao Ziyang, who has declared that
the current ideological chill will not affect rural policy. Conservatives
have in the past criticized the emphasis on rural enterprises for
diverting attention from grain production. Although the document
strongly defends rural enterprises and entrepreneurs, it does not
promise support in the form of state credit or materials to that sector.
development of poor areas.
The decision to increase state investment probably was made
because reformers realize that their policies make them vulnerable to
conservatives' charges of neglect!ng_irrigation infrastructure and the
from simply-increasing prices to stimulate production.
Reform leaders are gambling that the harvest this year will be a good
one. Their policies will come under heavy fire at the party congress
scheduled next fall if grain production drops this year. Reformers are
hoping that, by reducing grain quotas and increasing market outlets
for surplus grain, they can increase production. Financial constraints
and the fear of adverse reaction if retail food prices rise prevent them
Top Secret
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Top Secret
C
Wyg
Modernization Pressures Taking Toll on Industry
The decline in Soviet industrial production last month is a
setback for General Secretary Gorbachev's drive for economic
revitalization and, if it continues, could test the leadership's
commitment to his modernization strategy.
Total industrial production declined by about 3.5 percent, compared
with that in January 1986, with only energy, processed food, and
chemicals showing improvements. The civilian machinery sector-
which is central to Gorbachev's modernization campaign-was
down by more than 13 percent. Moscow blamed industry's poor
performance on products not measuring up to more stringent quality
control, unusually cold weather in the European USSR, and less work
time than in January last year.
Comment: The sharp decline in machinery production is
unprecedented and accounted for most of the decline in overall
industrial production. Given the priority now accorded the machinery
sector, poor performance almost certainly surprised the leadership
and probably figured heavily in Gorbachev's criticism of the economy
at the Central Committee plenum last month
Evidence is mounting that the machinery sector is suffering
considerable disruption as it strives to meet Gorbachev's ambitious
targets for quality and quantity.
shifts.
On 1 January the Soviets introduced a more stringent quality control
system at 1,500 important enterprises. Products not approved by the
new quality inspectors are excluded from final output figures, and
Soviet press reporting indicates as much as 90 percent of the output
of some plants has been rejected at first inspection. Many plants are
having problems retooling and maintaining production levels at the
- same time, despite high-level pressures to introduce additional work
According to Gorbachev, plants are experiencing problems shifting
to new forms of economic management. Plants now are held
accountable for meeting all contract commitments and for arranging
a greater share of their financing and materials.
Not permitting rejected products to be counted in output totals
exposes managers at all levels to public scrutiny and clearly is a
pressure tactic. It illustrates the leadership's willingness to incur
political risks to press Gorbachev's programs.
Top Secret
3 24 February 1987
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Too Secret
IRAN-IRAQ: New Attacks in South
Iranian attacks on Iraqi positions near Al Basrah yect ay could
prompt Baghdad to resume airstrikes on Iranian cities. Tehran
claimed that it simultaneously began a new phase of guerrilla
operations in northern Iraq. Baghdad announced it had stopped the
c0)
attacks near Al Basrah and ran had captured Iraqi positions
in the Hawizah marsh on eanwhile, 25X1
Iran-4s deployed a launcher and radar for a Chinese-built 2oA]
HY-2 anti shi cruise missi a on Qeshm Island.
be made operational-quickly;
Guerrilla operations may be designed to tie down Iraqi forces and
complicate Baghdad's planning. Because the Iranian ground attacks
violate the conditions of the cease-fire established last week, Iraq
probably will resume its airstrikes on cities as it has threatened to do.
The HY-2 site-which can cover most of the Strait of Hormuz-could
Comment: r nian a a sin the south are limited probes for
Iraqi weaknesses, possibly in preparation for another offensive.
INDIA-PAKISTAN: Talks Productive
Prime Minister Gandhi and President Zia have said their discussions
over the weekend cleared up misunderstandings over the recent
military buildup along their border. They also reviewed other
contentious issues related to border security-drug trafficking,
infiltrations of terrorists, and smuggling. Gandhi told the press he
hoped the two sides would "seal" their common border in an effort
to deal with these problems. Zia said he considered the recent
agreement to pull back troops the equivalent of a "no-war" pact.
Negotiations on the second phase of.troop withdrawals will begin
Thursday when the Indian delegation arrives in Pakistan, according
cheering the Pakistani team at a cricket match
answering press questions, praying at two Muslim shrines, and
Comment: The atmosphere at the meeting suggests discussions on
additional troop withdrawals will be successful. An early resumption
of meetings on other border issues and trade will be a further sign
that both Gandhi and Zia have renewed their commitment to
improving relations. Zia took full advantage of the public relations
opportunities in India to promote a statesmanlike image at home-
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Top Secret
SURINAME: Dealing With Demonstrators
kt
swath-der-r}? use mmi -i~~
ircums#-a
Government officials have closed schools at least through
25 Fe ruary, the seventh anniversary of the regime, and are
organizing various street activities to divert the attention of youths.
Meanwhile, the rebels launched two attacks on government troops
last week, but the regime reportedly has decided against launching
any major counterattacks until spare parts can be obtained for two
recently acquired military helicopters.
Comment: Bouterse has said in the past that the only thing that could
bring him down was a popular uprising, and he and his senior security
advisers appear to be taking great care to ensure that the level of
violence does not escalate. Until a major counterattack is launched,
Bouterse will have more troops at his disposal to deal with the
demonstrators.
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6 24 February 1987
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In Brief
USSR - Soviets' Trade Unions congress opening try, runs through /'
Sati=Uw agenda centers on unions' role in economic (i
es in +nn i ininn InnAorchin avner-terl
~L rn..i+~li~~+inn chan
g
General Secretary Gorbachev likely to address.
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USSR has delivered two 25X1
minesweepers to Vietnam ... provide limited capability to clear
shallow coastal, inland waters ... Hanoi emphasizing coastal
defense in Navy development. 25X1
G/5
Europe
- Opposition press attacking Spanish Education Minister Maravall
for giving in to demands for education reforms ... secondary
schools closed since December ... Maravall's resi nation would
he firet mainr cathark fnr Cnrtialiet nnvarnmant
Americas - Chile's bank creditors agreed yesterday to reschedule $12 billion
of roughly $20 billion external debt, according to US Embassy ...
U concessions granted will save Santiago $535 million this year .. .
threat of debt moratorium may have pushed banks into
agreement.
I op %*ecrez
R..
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Top Secret
North Yemeni Oil Potential
Boundary representation Is
not necessarily authoritative.
,-Basin`'
ial Zugar
Y.A.R.)
-20
m9
AL }(N P~1
eo.pi e's a
ld%1ic
o:
Oil
Condensate
Dry gas
++~ Oil pipeline (under construction)
0 40 80 Kilometers
I t 1
0 40 80 Miles
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24 February 1987
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Special Analysis
NORTH YEMEN: Opportunities and Risks of Oil Wealth
North Yemen has the resource potential to become an important
oil exporter in the 1990s. Photogeologic analysis indicates that
Sanaa's recoverable oil could amount to more than 6 billion
barrels-larger than Egypt's reserves and many times the
400 million barrels now being developed. Oil revenues present
Sanaa with a number of economic options, but oil alone will not
solve North Yemen's serious economic problems or provide it
with political stability.
will rise to about 400,000 b/d by 1995.
Most of North Yemen's oil potential is in the concession near Ma'rib,
where reserves could exceed 4 billion barrels. The concession
includes North Yemen's only producing oilfield, the Alif, which began
production last April. The current output of 10,000 barrels per day at
Alif is expected to rise to at least 135,000 b/d in 1988, when exports
will flow through a new export pipeline to the Red Sea. If sizable
amounts of additional oil are confirmed in the Marib al Jawf basin
between now and the early 1990s, as is likely, production probably
Saudi Arabia.
Geologic analysis also indicates that a concession near Sanaa
contains about 1.5 billion barrels of reserves and that North Yemen's
offshore oil reserves may be at least 500 million barrels. In addition,
there is a good chance that significant volumes of oil will be found in
disputed border areas claimed by North Yemen, South Yemen, and
Actual production levels will depend on Sanaa's ability to balance
domestic demands and foreign policy considerations and, to a lesser
extent, the ability of the international market to absorb more oil.
North Yemen's resources probably could support a production rate
as high as 800,000 b/d. Sanaa is likely to choose to develop its
resources at a more conservative pace, however, largely because of
the government's need to temper rising expectations and to avoid
losing its traditional sources of revenue and foreign exchange-
remittances from Yemenis working outside the country and foreign
Challenges to Salih
North Yemen will face difficult economic and political problems under
any development plan. The country has few resources. Almost two-
thirds of the population is engaged in subsistence agriculture, and,
other than the oil, there are few known commercially exploitable
Top Secret
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Top Secret
minerals. President Ali Abdullah Salih has deftly coped with a
population accustomed to poverty and isolation, but new oil
discoveries will force him to adapt his tactics to a higher level of
public expectations.
Even if it opts for a restrained development plan, North Yemen would
earn nearly $1.5 billion in annual oil revenues by the mid-1990s,
enabling it to develop a badly needed infrastructure, new industries,
commerce, and services. The advent of oil revenues, however, will
raise demands of the North Yemeni technocrats, educated elite, and
tribal and military leaders for a greater role in the decisionmaking
process, especially concerning the distribution of oil income.
President Salih is likely to try to use the disbursement of oil revenues
to consolidate his political control over both his opponents and his
supporters
Oil will offer Sanaa greater flexibility in dealing with Moscow and
Washington and enable it to further its goal of balancing relations with
both. President Salih probably will try to use his relationship with the
US to gain economic aid as well as needed oil exploration,
production, and processing technologies that the USSR cannot or will
not provide. More direct links to the West-and particularly the US-
probably will gradually develop as oil provides new opportunities for
investment, but progress will be slow
Top Secret
9 24 February 1987
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Special Analysis
SOUTH AFRICA: Labor Troubles in Gold Industry
South African security officials and mineowners are increasingly
concerned that recent fighting among black workers and other
labor problems might intensify and eventually seriously damage
production in the vital gold-mining industry. Labor troubles to
date have affected revenues only slightly, but mining companies
L y`- are improving security and stockpiling unrefined aold ore to
hedge against lengthy work disruptions.
Some 85 gold miners have been killed in factional violence in the past
two months. Mineowners and government officials are concerned that
industrial sabotage and labor union militancy threaten security and
production in the mines.
fir-icons laborspecla-list$esbmat tha o - pro uc ion fell by about
eca se o - a , prob1le ,-lout a ve erf s we e
that some mine fires late last year were deliberately set after,
individual company-owners refused to accept a wage settlement
reached between the Union and the federation of mineowners.P 25X1
Mineowners and the government have taken a number of steps to
reestablish stability in the mine work force. Management wants to hire
fewer, more highly politicized black South Africans and has pressed
Pretoria not to expel foreign mineworkers in retaliation against the
policies of neighboring states. Last month, Pretoria decided not to go
Top Secret
10 24 February 1987
.o-thurt because~of=;their-isfn pTice f -td-gGtd.
lower category workers.
The mining companies and the black National Union of Mineworkers
agree that such factors as the use of migrant labor and single-sex
hostels are major elements in fanning tribal tensions behind much of
the recent violence. AeeeFding4 Basotho workers
from Lesotho, who have risen to the highest job categories in most
mines and who supervise members of other ethnic groups, oppose
attempts by the Union, dominated by South African Xhosas, to recruit
_Je
? Successful Union organizing has increals dhe possibility of strikes ate J
he mines. r,~,un ,zruc3r s~ s~stlmatei th 074igWe-
V t e, z
`
rk~ercould affec
'r W~Pq4Ue.
j39-geld~raai _Most companies and the Union have attempte o
~ work together
f_.t on-many issues, but mining officials reportedly believe.
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Top Secret
ahead with its decision to expel 60,000 Mozambican workers. In
addition, mining companies have tried to protect themselves from
strikes by rotating one-third of their work force every four months.
South Africa produces nearly 22 million ounces of gold annually,
accounting for about 24 percent of gross domestic product and
nearly 45 percent of export revenues. A lengthy, industrywide strike,
although unlikely, would cripple the country's nascent economic
recovery and create a current account deficit that would endanger
the debt repayment agreement with Western banks.
Neither the mining companies nor the National Union see benefit in a
prolonged shutdown, and both are likely to continue to seek bases for
cooperation. The Union, however, will also press the mines on bread-
and-butter issues and is likely to carry out work actions that disrupt
production temporarily in some mines. TN on
abov,egrGu,nd-sucks ore-now about a six-r ,t~ .,supply C~b
ma' air) ste_ajd_ Aawct on. 25X1
Mineowners know, however, they cannot totally insulate the mines
from the political ferment in South Africa. Gold mines are particularly
susceptible to arson, and owners realize they may eventually have to
ask government security forces to intervene
violence are 25X1
optimistic a ey cou ease y stop aboveground hostilities but are
botage and violence underground.0 7FXI
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Top Secret
Special Analysis
HUNGARY: Radicalization of Intellectuals
Hungarian intellectuals are attacking the regime more
aggressively than at any time since the 1956 revolution, and their
actions have already promoted some disunity within the
leadership. Writers critical of the regime recently took over the
officially sponsored Writers Association, prompting Budapest to
threaten sanctions if the writers do not fall into line. To date,
Budapest has denied the Association the right to deal with
foreign literary groups and has reduced its funding. Skirmishes
between intellectuals and the authorities will probably continue
and grow in significance, which in turn may encourage other
dissatisfied groups to speak out and drive more intellectuals into
the ranks of the dissidents.
Relations between the writers and the regime have been souring for
years, as more and more writers have felt compelled to address f
Hungary's mounting economic and social problems. These problems,
along with a widespread perception of leadership indecisiveness, -,._
have opened party leader Kadar to criticism that was rarely voiced
during better times. Meanwhile, the writers have been encouraged to
speak frankly by the growing latitude in Soviet culture and in norms
for self-censorship.
The growing tension broke into the open at an Association meeting in
November, when writers protested the closing last summer of the
journal Tiszataj for publishing a poem critical of General Secretary
Kadar's role in suppressing the 1956 revolution. Party propaganda
secretary Berecz threatened the writers with further repression if they
continued to oppose regirrte policies.
One writer that he had not seen such emotional
exchanges between writers and authorities since 1956. The angry
writers elected one of the editors of Tiszataj as an officer of the
Association and reportedly refused to elect any party members to the
steering committee. In response, at least 25 proregime writers have
left the Association.
30-
-T-he-14Sz,r y report,fthat Berecz, often mentioned as a successor
to Kadar, tarnished his image badly by allowing himself to be
provoked by the writers and is now fighting for his political life. For
advice on how to clean up the mess, Kadar reportedly turned to
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longtime culture czar and Politburo member Gyorgy Aczel, who is
reputed to be a rival of Berecz. The Embassy reports that Aczel
recommended a policy of conciliation but that Kadar, stung by the
writers' criticism and mindful of the inflammatory role played by
intellectuals in 1956, is determined to pursue a tougher policy.
the regime ordered the 25 writers to
resign in an apparently failed effort to split the Writers Association.
The Minister of Culture has since issued thinly veiled threats that, if
the writers do not moderate their position, the regime may end their
subsidy or establish a rival organization.
The direct attacks on party officials and policy in an open forum
suggest that the era of self-censorship is drawing to a close. A serious
challenge to the regime could arise if the intellectuals find common
cause with other discontented groups-such as youths and
workers-and forge a coherent program for change.
Kadar may find it difficult to stick with a tough line if developments in
the USSR are interpreted as supporting the intellectuals' drive for
openness. On the other hand, if Kadar moderates his policy and
becomes more conciliatory, he risks reinforcing his image as an
Top Secret
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