NATIONAL INTELLIGENCE DAILY TUESDAY 10 MARCH 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00091R000400220001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 23, 2016
• Document Release Date: September 19, 2012
• Sequence Number: 1
• Publication Date: March 10, 1987
• Content Type: REPORT

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Director of
Central
Intelligence
National Intelligence Daily
Tuesday
10 March 1987
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Top Secret
CPAS NID 87-056JX
10 March 1987
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Contents
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Italy: Andreotti Tapped To Form Government
1
Chad-Libya: Diplomatic Maneuvering
2
USSR: Results of Trade Union Congress
3
Notes
Israel-Lebanon: Avoiding New Entanglements
4
South Africa: Preelection Maneuvering
4
Ecuador: Repercussions of Earthquakes
5
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Australia-New Zealand: Cooperation On Defense
6
West Germany: Bonn's Fiscal Stance Troubles Central Bank
7
?East Germany: Plans To Copy DEC Computer
7
In Brief
8
Special Analyses
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USSR: Republic Representation on Politburo Declining
11
Western Europe: Troubled by LDC Debt
12
East Germany: Expanding Role for Dissidents
14
Too Secre!
10 March 1987
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o ?oecrei
ITALY: Andreotti Tapped To Form Government
President Cossiga yesterday asked Christian Democratic Foreign
Minister Andreotti to form a new government, but opposition by
the Socialists to his candidacy and their maneuvering on
politically sensitive issues will make it difficult for the governing
coalition to im lement the prime-ministerial transition
agreement.
The Socialists last week effectively rejected an Andreotti-led
government by demanding that the Christian Democrats put forward
either Party Secretary De Mita or Party President Forlani as their
candidate for the prime-ministry. The Socialists are inflaming tensions
in the governing coalition by insisting that controversial
referendums?one for abolishing civilian nuclear energy programs,
another on judicial reform?be put to a national vote on 14 June as
scheduled. The Christian Democrats, supported by the Republicans,
want the coalition to reach a common position on the referendums
that would, in effect, avert a national vote, according to press
accounts.
Comment: The Socialists do not want the savvy Andreotti to succeed
Bettino Craxi because they fear he might outmaneuver them on policy
issues during the runup to the scheduled election in the spring of 1988
and diminish their prospects. Craxi's strategy of opposing Andreotti
while remaining open to a De Mita or Forlani candidacy is also
designed to scuttle the transition and to force an early election while
avoiding public blame. If the Christian Democrats refuse to offer an
alternative to Andreotti, the Socialists will be in a position to blame
them for destroying the coalition in order to satisfy Andreotti's
personal ambition.
If the Christian Democrats eventually offer a second candidate, the
Socialists will retain the option of provoking an early election by
demanding wide-ranging concessions on cabinet posts and
programs, including retention of the referendums. The Christian
Democrats will be especially reluctant to reach an agreement that
does not avert the referendums because they fear that their position
on the proposed questions will be rejected by the voters,
embarrassing the party and giving the Socialists a good opportunity
to force a snap election.
Top Secret
1 10 March 1987
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Top Secret
CHAD-LIBYA: Diplomatic Maneuvering
Sudan's attempts to arrange a meeting between Chadian
President Habre and Libyan leader Qadhafi are part of a flurry of
often com etin di lomatic efforts to resolve the Chad-Libya
conflict. I.r ;
r?
The OAU Chairman, Congolese President Sassou, has called for an
OAU minisummit tomorrow in Cairo to deal in part with Chad. Algeria
is continuing its discussions with Chadian officials and former
pro-Libyan rebel leader Goukouni on a possible reconciliation.
Nigeria is pushing for the simultaneous withdrawal, of Eteridhatidt..
Libyan forceKand has pledged to join other African states in
monitoring the pulloutfa".the-4.4,Wzrabassy.itukages.
Comment: Although a secret meeting between Habre and Qadhafi in
Sudan remains possible, recent heavy fighting in northern Chad and a
suspected Libyan connection to an attempt last week to destroy the
bridge linking N'Djamena and Cameroon may harden Habre's
opposition to negotiations. The OAU has a long history of debate and
inaction on the Chad issue, but moderate African leaders probably
will try to use the minisummit to isolate Qadhafi further. Algerian
efforts to mediate a reconciliation between Goukouni and Habre
appear to be making headway, but significant differences between
the two remain.
Top Secret
2 10 March 1987
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op oecret
USSR:
Results of Trade Union Congress
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The All Union Central Council of Soviet Trade Unions approved
measures designed to revitalize trade unions in the USSR at its
congress late last month, but the reelection of Stepan Shalayev
as the group's chairman and the tentative wording of the
congress's decisions suggest that change may be slow in coming.
The congress authorized the "possibility" of a multicandidate
election. In a speech to the delegates, General Secretary Gorbachev
criticized trade union officials for "dancing cheek to cheek with
economic managers" and urged them to be genuine?not
subordinate?"partners of administration." Gorbachev and Shalayev
called on the country's 140 million trade union members to be active
on the international front and urged attending foreign labor
delegations to support Moscow's INF position.
Comment: Providing for the election of trade union officials fits into a
broader "democratization" campaign unveiled at the plenum of the
party's Central Committee in-J,anuary, which is apparently designed
to increase grassroots pressure on bureaucrats to accept
Gorbachev's reforms. If implemented, the proposal might give teeth
to Gorbachev's pled .e to increase the assertiveness of trade unions
against managers.
The cautious endorsement of the election and the retention of
Shalayev do not augur well for reform of Soviet trade unions,
however. Shalayev's trade union background and lobbying to retain
his post may have convinced Gorbachev to keep him on for now, but
his ties to the Brezhnev era make him a likely candidate for eventual
replacement.
Top Secret
3 10 March 1987
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'1:1?
BEIRUT
?
BEIRUT
INTERNATIONAL _
AIRPORT
Mediterranean
Sea
e r ,c. -ir ... , f r. one , _ .
'firtlee jt. ' .7-:,, e r!--- - -- - 1.' L c
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' ,
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I / . ?tin iv ifirefentat o
3.:."..? ..:--Lt''C4fidet"
"-""'!"....'"=-: - . !,
... ,--e....r- rolnerse r6puth
Top Secret
? 10 March 1987
?
Golan Heights
(Israeli occupied)
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Top Secret
ISRAEL-LEBANON: Avoiding New Entanglements
Israel has rebuffed Lebanese Christian and Druze appeals for support
against Syria's intervention in Lebanon. If Syria deploys surface-to-air
missiles in the Beirut area, however, or sends large numbers of
regular troops south of the Awwali River, Israel will react, a senior aide
to Defense Minister Rabin told the US Embassy. The aide said Israel
also might react if Syrian troops launched a massive operation that ?
caused heavy civilian casualties in Christian East Beirut. The official
nevertheless made clear that Israel does not expect an early Syrian
operation in East Beirut or large-scale Syrian deployment to the
south.
Comment: Israel's rejection of Christian and Druze overtures is
illustrative of its abandonment of its goal of redrawing Lebanon's
political map, which prompted its invasion of Lebanon in 1982.
Tel Aviv's focus is now on southern Lebanon, and it is determined to
avoid entanglement in power struggles between Lebanese factions
elsewhere in the country. Israel's main concern is the growing
strength of Hizballah and the PLO in the south, and Israeli officials
hope that Syria's intervention in Beirut will disrupt this trend.
SOUTH AFRICA: Preelection Maneuvering
Political activity is intensifying in South Africa as the deadline of
31 March approaches for nominating candidates for the white
election on 6 May. The leaders of the two rightwing parties claim that
they are moving closer to an electoral agreement that would improve
their chances against the ruling National Party. Three recent
or political
defectKis om the Nationalists who will run as independents called
jointly negotiations among "moderates" of all
races and an end to all discriminatory laws. Th well-k.29neditor of
a leading Afrikaans newspaper resigned
a er repeated
clashes with the National Party over his censuring of its intransigence
on reform.
Comment: An electoral pact would greatly improve the right wing's
chance of replacing the liberal Progressive Federal Party as the
official opposition. The rightwing parties will probably reach a limited
electoral agreement this month, although decisions as to which party
will run in which district remain highly contentious. The joint
statement by independent candidates and the editor's resignation will
keep media attention focused on reformist criticism of the
Nationalists and could encourage more defections.
410
Top Secret
March 1987
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Too Secret
Oil Facilities Damaged By Earthquakes
Pacific
Ocean
Colombia
Onto
Proposed emergency
pipeline linkup
Destroyed. Rio A
pipeline Segment
Golfo
de
Guayaquil
o?
41111, Oilfield
. Oil pipeline
? Refinery
Tanker terminal
Peru
0 100 Kilometers
0 100 Miles
Peru
goundary presentation is
not nese rily authoritative.
Top Secret
10 March 1987
709760 3-87
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Top Secret
ECUADOR: Repercussions of Earthquakes
The earthquakes in Ecuador last week, which damaged two major oil
pumping stations and destroyed 25 miles (40 kilometers) of the
__-country's main pipeline, might cost Quito more than $700 million in
repairs and lost exports. The cOuntry quickly suspended its foreign
crude sales. Ecuadorean officials have_proposed the construction of a
$20 million emergency link to Colombia's pipeline, which would allow
Ecuador to meet domestic needs. President Febres-Cordero is
seeking an emergency loan from the World Bank to repair the pipeline
and construct the Colombian link
Comment: The earthquakes have further set back an already
weakened economy. Oil has accounted for more than 45 percent of
the country's exports and 40,!:Arkent of government revenues.448----
Brabassy-sourzes.estimatestbat the overall effect of the disaster may
cost Ecuador as_much as 2 percent -of its GDP of $12 billion this year.
Already in arrears on its foreign debt payments to commercial banks,
Quito will be forced to prolong its suspension of debt servicing. The
earthquakes have temporarily dampened domestic criticism of
Febres-Cordero's administration, but his political opponents will be
quick to seize on any missteps in his moves to deal with the increasing
economic difficulties.
Top Secret
5 10 March 1987
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Top Secret
AUSTRALIA-NEW ZEALAND: Cooperation on Defense
Australian Defense Minister Beazley told New Zealand Defense
Minister O'Flynn in Wellington last week that the countries' bilateral
defense ties would not be affected by Canberra's disapproval of
Prime Minister Lange's antinuclear policies. They signed a
memorandum of understanding for a cooperative shipbuilding
program, and New Zealand concluded an agreement to purchase
Australian military rifles. A joint communique called for continued
combined training programs and exercises and suggested that both
Canberra and Wellington would focus greater attention on the South
Pacific region.
Comment: Lange will use Beazley's assurance that their defense ties
remain strong to blunt criticism of his defense and antinuclear
policies. Beazley's conciliatory stance contrasts with Australian
Foreign Minister Hayden's harsh criticism of Lange's government in
December, in which Hayden stated that Australia could not fill the
defense gap that resulted from the US suspension of its security
obligations to New Zealand under the ANZUS Treaty. Hayden's
rebuke probably forced Lange to commit New Zealand to increased
spending on joint defense programs rather than risk isolation from
Australia. According to the US Embassy in Canberra, Australian
Defense Department officials view Wellington's commitment to
cooperative defense programs as a minimum requirement for
continuing the current level of bilateral defense cooperation.
6
Top Secret
10 March 1987
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?
WEST GERMANY: Bonn's Fiscal Stance Troubles Central Bank
Many Bundesbank officials fear that Bonn will wait until late this
summer when second-quarter GNP data are available before making
a decision on stimulating the West German economy,
The bank,
favors bringing forward tax cuts now scheduled for 1 January,
because it has revised its economic growth forecast for 1987 sharply
downward to 1.9 percent.
Comment: The bank is probably concerned that inaction now will
lead to calls for a looser monetary policy or spark another
transatlantic row leading to renewed upward pressure on the mark.
Either would make it difficult for the bank to bring monetary growth
targets within range. The bank is also worried that delay would force a
federal response that was too hurried and not well thought out, one
that might prove harmful to the economy over the medium term.
Bonn, however, is certain to wait until first-quarter economic data are
released at the end of next month before making a decision. Even
then, the government will probably still hold off taking action, blaming
the bad statistics on the severe winter and playing up its recent
decision to enlarge tax cuts in 1988.
EAST GERMANY: Plan To Copy DEC Computer
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2bAl
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omputer production in 25X1
East Germany would switch from the IBM-based Ryad mainframe
computers to copies of the Vax superminicomputers in the early
1990s. The Micro Vax ll is a relatively small, powerful computer with
adaptability to military use. Its duplication would de end on reverse
engineering its advanced microprocessor.
Comment: The Soviets and East Europeans may want to switch to
superminiproduction because of their difficulties producing
mainframe computers, which lag those in the West by more than
10 years. The agents probably are not seeking the actual
microprocessor but rather proprietary data on its design and
production process. Even with the necessary design information,
however, the East German microelectronics industry is unlikely to
have the needed production capability before the mid-1990s, making
a target date in the early 1990s overly ambitious.
7
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In
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Brief
Americas
?
Arturo Cruz resigned yes.ter-clay from UNO Directorate, according
to press ... probably frustrated about lack of progress in
negotiations on restructuring Nicaraguan rebel leadership ... Cruz
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apparently not bluffing this time.
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East Asia
?
i)
V
Japan's Liberal Democratic Party candidate defeated in upper
house byelection on Sunday ... probably reflects opposition to
government's controversial tax proposal ... tax issue may hurt
ruling party in nationwide local election next month.
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?
Australian Labor government ahead of opposition in latest polls
V
... first time since July... nevertheless, survey shows
conservative Queensland Premier Bjelke-Petersen would defeat
Prime Minister Hawke if he led opposition.
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USSR
Middle East
? Strongly anti-US journalist Genrikh Borovik new chairman of
Soviet Peace Committee ... will be highly visible spokesman for
Soviet propaganda themes at World Peace Council and other
international forums ...
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? Amal militia released 625 Palestinian prisoners in southern
Lebanon last week, including all it held in Tyre, according to US
Embassy in Beirut... it exhorted them to confront Israel
i ...
ncreased attacks on Israeli security zone likely.
? Turkey may threaten to reduce Syria's water supply as result of
raid on Saturday by Kurdish rebels allegedly based in Syria...
Ankara remains cautious toward Damascus, probably will not try
cross-border retaliation.
? General Attar, head of Iraq's chemical warfare program,
reportedly jailed ... will set back program, at least temporarily... X
replacement by President Husayn's son-in-law suggests political
housecleaning, not opposition to program.
Top Secret
8 10 March 1987
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Next 3 Page(s) In Document Denied
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Top Secret
USSR: Republic First Secretaries on the CPSU Politburo
During Previous Periods of Leadership Transition
Full Members
Candidate Members
1955
1
0
1957
3
6
1964
1
4
1982
2
4
1983
2
2
1985
2
1
Current
1
0
Republic Representation on the CPSU Politburo
Since 1952
Ukraine
Belorussia
Kazakhstan
1952 to present
1957-65,1967-83,1985-January 1987
1952-53,1957-58,1966-January 1987
Uzbekistan
1956-58,1961-75,1976-83
Georgia
1957-72,1978-85
Azerbaydzhan
1953,1976-82
Latvia
1957-61
Top Secret
10 March1987
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Special Analysis
USSR: Republic Representation on Politburo Declining
A-Sevist-ettieia4-seeeftHrUcLUEsk,p4binats?.,that General
Secretary Gorbachev isfroreparing the groundwork for the
eventual replacement of Ukranian party boss Shcherbitskiy.
Shcherbitskiy is the only republic party leader left on the
Politburo since the removal of Kazakh party chief Kunayev in
December. The decline in the number of regional party chiefs on
the Politburo is part of a broader effort by Gorbachev to
strengthen central authority over non-Russian republics.
Republic representation is at its lowest point since 1955; in 1982 six
republic leaders served on the Politburo. Including Scherbitskiy, there
are four non-Russians on the Politburo, but only two of these are
non-Slays, and both of them hold positions in Moscow and do not
represent the interests of a republic party. Thus, Gorbachev is
advancing the careers of individual non-Russians, while undercutting
the authority of minority nationalities.
The regime is tightening its control of all regions, not just non-Russian
ones. But localism is more threatening to Moscow in areas where it is
strengthened by anti-Russian sentiment, and there is a distinct
nationalistic dimension to Gorbachev's recent appointments. The
number of Russians appointed to key posts in non-Russian republics
increased in 1986, including the naming 'of a Russian to replace
Kunayev in Kazakhstan. At the party-congress last year, Second
Secretary Ligachev urged crossposting of party officials from one
re ion to another as a way to break up entrenched provincial elites.
The unrest and violence in Alma Ata provoked by Kunayev's removal
may, however, force a reassessment of tactics. In a speech to the
Central Committee in January, Gorbachev said the composition of
party officials should reflect the country's national structure. Least-
wItla-a-K-GB officer-try- tel-a446-4ipleritaktrarerotbuchev-hadlearn?Lvtr
a lesson f tistarvatTdrutit?of-respect-ftrittethatitterprotitl
niktraditionsrfral?astirreIrrere?tt Vetnzrainiayrnytrtiere?mrw
whether-to-repiacei;Strth
Top Secret
March 1987
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Top Secret
Brazil: Loans From Commercial Creditors a
March 1986
Billion US $
Creditor Country
Medium and
Long Term
Short Term
Total
Country Share
(percent)
US
18.6
5.7
24.3
31
Major West European
creditors
21.4
1.7
23.1
30
UK
8.7
0.8
9.5
13
France
6.2
0.5
6.7
9
West Germany
3.9
0.2
4.1
5
Switzerland
1.6
0.2
1:8
2
Belgium
1.0
1.0
1
Japan
9.2
1.5
10.7
14
Canada
4.7
0.3
5121
6
Other
14.1
0.8
14.9
19
Total
68.0
10.0
78.0
100
a Brazilian Central Bank estimates.
Top Secret
, 10 March 1987
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Special Analysis
WESTERN EUROPE: Troubled by LDC Debt
West European governments and banks fear that Brazil's
unilateral decision to suspend interest payments on $68 billion
owed abroad is moving the international debt situation into a
dangerous new phase that probably will require changes in
creditor strate . The see LDC debt, however, mainly as a US
problem.
Although their public reaction has been subdued, West European
bankers fear the Brazilian move will snowball and induce other
debtors to suspend payments. Their concern has been further
aroused by the failure of creditors to complete a refinancing package
for Mexico after six months of trying.
Brazilian Finance Minister Funaro undoubtedly believes that
European governments are more sympathetic to debt relief than is
the US and probably is pressing them to take a greater lead in the
debt crisis. West European officials, however, almost certainly put him
off during his recent talks in Western Europe, stressing that Brazil
should take a nonconfrontational attitude in talks with commercial
banks.
Searching for a Long-Term Strategy
The West European banks generally view refinancing only as a way to
buy time to develop a more permanent solution. Bankers in several
West European countries believe that, over the medium term, further -
writeoffs and schemes to ease interest payments will be needed; they
see increased lending by the World Bank and debt relief as part of a
long-term solution. Officials in one major West European bank are
discussing the idea of a "supranational" bank, supported by banks
and creditor governments, that would take over the debt.
The West Europeans are unlikely to mount a major debt initiative of
their own, despite their dissatisfaction with the current approach.
They have written off from their books a larger share of their LDC
loans than US banks have and believe the US, whose banks are at
higher risk, should shoulder the primary responsibility for finding a
solution.
West European banks and governments are likely to urge that
Washington give US banks tax help and relax regulations to enable
them to write off debt more easily. They regard US regulations as a
straitjacket that prevents US banks from reducing their vulnerability
continued
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Top Secret
and exploring creative solutions to the problem. One Swiss banker
reportedly considers the reaction of US bank regulators the key to
averting a full-blown crisis.
The West Europeans resent what they consider strong-arm US tactics
to make them endorse agreements they do not fully support. They
privately criticize the US role in arranging the Mexican package.
Bankers and government officials in many West European countries
believe that creditors lost significant leverage when they succumbed
to what they regard as US pressure and agreed to a Paris Club
rescheduling for Brazil in January without an IMF program.
Outlook
West European banks are likely to become less willing participants in
refinancing packages unless they see progress toward a long-term
resolution of the debt problem. West European governments
probably will urge Washington to move toward a solution that would
include substantially expanded lending by multilateral banking
institutions. In the short term, however, both governments and banks
are likely to cooperate with the US in trying to isolate the Brazilian
situation from that of other LDC debtors, particularly Argentina. The
banks are unlikely to retaliate against Brazil as long as there are
prospects for talks, but they will press their governments to convince
Brazil that an IMF program is needed.
Top Secret
13 10 March 1987
Declassified in Part - Sanitized Copy Approved for Release 2012/11/16: CIA-RDP88T00091R000400220001-9
Declassified in Part - Sanitized Copy Approved for Release 2012/11/16: CIA-RDP88T00091R000400220001-9
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Special Analysis
EAST GERMANY: Expanding Role for Dissidents
The increasing involvement of East Germany's independent
peace movement in such causes as civil liberties, ecology, and
human rights and its growing number of international
connections are posing greater challenges to the regime. The
dissidents are now focusing on the need for internal changes and
are invoking the rhetoric of General Secretary Gorbachev's
openness campaign to press their points. The regime will
probably try to co-opt the current, more conservative leadershi
of the Protestant Churches, the dissidents' protector.
The dissidents' new approach was evident late last month at a mass
meeting in Leipzig, where representatives from 200 church-sponsored
peace groups demanded the regime renounce nuclear power and halt
construction of new nuclear power plants. The participants, who
foreign observers described as more self-confident and militant than
before, also called for free s eech and assembly and the easing of
foreign travel restrictions
Expanding Agenda and International Contacts
The independent peace movemen s
-West_Gernaanarose in the early 1980s principally to assist
conscientiojectors and to agitate against INF deployment.lay?
beth-ttie-W6-anti-isteS.R.:-The Protestant?primarily Lutheran
Churches, sharing these concerns and eager to reach out to youths,
provided a safehaven for several thousand members of the peace
groups. The decline of INF as an issue, increasing church caution, and
stead regime pressure deflated but did not eliminate the movement.
? ? ?
I ?
VI
Activists continue to agitate against the "militarization of society" but
have attracted a larger constituency addressing the ecological
concerns of East Germans, who live in one of the most polluted
countries in Europe. They have peppered the authorities?even party
leader Honecker?with petitions protesting government inattention to
these problems, especially after the Chernobyl' disaster.
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Dissidents have increasingly focused on the repressive political
system and have demanded that the regime conform 'to human rightst
guarantees embodied-in-the CSCE agreements, They_ace:also;?
_appealing more frequently to world-opinionVt-lAnonfac4s.with
West-Gem/aft-Greens:
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10 March 1987
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Declassified in Part - Sanitized Copy Approved for Release 2012/11/16: CIA-RDP88T00091R000400220001-9
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Dissident-groups-are,increasing_doatacts.with similar groups in.
Eastern Europep,anikevenitbe-ttlGrLast October, forexam1:11"07East
German dissidents joined Hungarian, Czechoslovak, and Polish
-groups to produce a well-publicized manifesto marking the Soviet
ilwasion of Hungary in 1956.
The Regime's Problem
East German authorities handled the old peace movement with
selective pressure and forced emigration, but the new dissidents are
more formidable. They have not dissipated their energy on
unattainable disarmament goals and are determined to stay in East
Germany and change it internally. Their calls for civil liberties and for
citizen initiatives may find appeal beyond their youthful constituency.
They?not the regime?applaud Gorbachev's demand for openness
and democratization and believe this will force the government to
move in their direction.
The regime is harassing dissident leaders, but it is also concerned
with adverse international publicity,---espe?414y-Gtur4141ae
ruSnF rnizXlag, Party officials will probably increase efforts to get the
churches to control the dissidents by offering more privileges and
opportunities for formal cooperation. Friction is already evident
between a new, more conservative church leadership and militant
pastors and dissidents who consider the current church-state
relationship too cozy.
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15 10 March 1987
Declassified in Part - Sanitized Copy Approved for Release 2012/11/16: CIA-RDP88T00091R000400220001-9
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Declassified in Part- Sanitized Copy Approved for Release 2012/11/16: CIA-RDP88T00091R000400220001-9