NATIONAL INTELLIGENCE DAILY WEDNESDAY 11 MARCH 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T00091R000400230001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 24
• Document Creation Date: December 23, 2016
• Document Release Date: September 20, 2012
• Sequence Number: 1
• Publication Date: March 11, 1987
• Content Type: REPORT

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ourector ot i wp-urcuru-i--
Central
gt Intelligence
National Intelligence Daily?
Wednesday
11 March 1987
?Top-Secret__
CPAS NID 87-057JX
11 March 1987
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Contents
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Kuwait-USSR-US: Protecting Kuwaiti Tankers
1
Qatar-Bahrain: Territorial Dispute Flares Again
2
Iran-Iraq: Military Developments
3
Zambia: Mounting Pressures on Kaunda
4
Eastern Europe-US: Lifting of Polish Sanctions
5
Nicaragua: Rebel Leadership Still in Disarray
6
Notes
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Madagascar: President Trying To Isolate Dissenters
7
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Colombia: Drug Control Set Back
9
USSR: Civilian Industry To Get Defense Resources
10
South Korea: Possible Chemical Agent Production
10
In Brief
11
Special Analyses
USSR: Gorbachev Asserting National Security Role
13
Japan-US: Limited Stimulus Package Likely
14
Top Secret
11 March
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KUWAIT-USSR-US: Protecting Kuwaiti Tankers
Kuwait will accept the US offer to protect its tankers but will
try to balance relations by reserving a token role for the USSR.
The US Embassy says the Kuwaiti Government yesterday decided to
accept the US offer to protect all 11 of its tankers. Meanwhile, Kuwait
will go ahead with plans to charter three Soviet commercial ships to
transport Kuwaiti oil through the Persian Gulf to European ports. A
Kuwaiti official implied that negotiations with the Soviets had
proceeded too far to reverse course. The Oil Minister claimed,
however, that there would be no increase in the Soviets' naval
presence aside from that which they already have to protect their Iraqi
arms carriers
Comment: Kuwait believes that US protection does not preclude
commercial charter deals with the Soviets. Kuwait probably feels
compelled to placate Moscow's disappointment over the
arrangement with the US and might consider increasing cooperation
with Moscow in other areas such as military procurements. Moreover,
token Soviet involvement would appease those within the Kuwaiti
leadership who favor a balanced foreign policy and who believe
Tehran would view an increased US military presence in the Gulf as
provocative.
Iran probably will not attack either escorted Kuwaiti ships, to avoid
provoking US military retaliation, or chartered Soviet tankers. Instead
it might try to intimidate Kuwait by attacking unescorted Kuwaiti and
third-country ships. Tehran may also sponsor sabotage against
Kuwaiti oil facilities, as it did on two occasions in the past year.
Although Moscow will be disappointed the US is playing a major role
in protecting Kuwaiti ships, it probably believes that even a limited
role for Soviet tankers would benefit the USSR's efforts in the region.
By only committing three tankers, the Soviets probably can avoid
taxing as escort vessels the two combatants they now have in their
Indian Ocean squadron.
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Bahrain-Qatar: Comparative Military Balance
I-1 Bahrain Qatar ( )=On order
Army
Personnel .3,500
Tanks 26 (28)
Armored 175
vehicles
Artillery
8,000
24
353
19(7) 114
Air Force and
Air Defense Navy
Personnel
Combat'
aircraft
Anti-
aircraft
weapons
200
12 (12)
33
300
25
27
Personnel
Combat craft
Patrol craft
Antiship
missiles
560
4(2)
5
16
700
9
31
48
312168 3-87
MANAMA
Bahrain
Gulf
pf
Bahrain
tlawar
Island
Disputed between
Bahrain and Qatar
Ira \r?
Ktmait
Area of
main map
Saudi
Arabia
Iran
Persian
Gulf
eln
,O
DOHA man
Oatar
U.A.E.
Bahraini
-Garrisd.n
Fasht ad Dibal
(reef)
Disputed between
Bahrain and Qatar,
v-
Qatar
0 25 Kilometers
r. I 1, t ft
0 25 Miles
7097663-87
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QATAR-BAHRAIN: Territorial Dispute Flares Again
Differing interpretations of last year's agreement between Qatar
and Bahrain to disengage from disputed territory are fueling
mutual suspicions, and, if mediation efforts fail, a military clash
is possible.
Qatari officials believe that the agreement with Bahrain to settle their
dispute over Fasht ad Dibal also mandated the removal of all Bahraini
military forces from Hawar Island. According to the US Embassy in
Doha, the Qataris claim Bahrain has built roads and trenches and
deployed an air defense system on the island. A senior Qatari official
said Bahrain's "aggression" precludes a negotiated solution.
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Bahraini officials have assured US diplomats that Manama has no
plans to build up its forces on Hawar unless Qatar initiates hostilities.
But over the past year Bahrain has 25X1
improved its facilities on Hawar by constructing new ammunition
storage bunkers, vehicle shelters, and barracks. 25X1
Saudi Arabia has renewed its efforts to avert a conflict. Late last
month, Saudi Foreign Minister Saud visited Doha and Manama to
discuss grievances and has promised both sides a set of proposals
within a few weeks.
Comment: Varied interpretations of the agreement last year and the
probable failure of Saudi mediation raise the odds of an early clash
over Hawar. Doha believes the Saudis are biased because Riyadh has
paid for most of Bahrain's military buildup. Even so, Qatar probably
will wait for the results of this round of negotiations before resorting
to force. Doha rejected a compromise solution 10 years ago and is
not likely to settle for less than sovereignty over the island.
Bahrain fears diplomacy will cost it Hawar and is likely to stall any
mediation effort indefinitely. It probably believes that recent deliveries
of tanks and Crotale surface-to-air missiles, and the planned
acquisition of US F-16 aircraft and other advanced weapons, will
improve its ability to defend Hawar. Its improvements to facilities on
the island, however, do not constitute a significant increase in its
military capability and pose no threat to Qatar.
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IRAN-IRAQ: Military Developments
Iraq may increase its airstrikes as Iran consolidates its gains in
ground fighting in the south near Al Basrah and in the north near
Haj Umran.
Iranian units are
improving thew positions along the southwestern shore of Fish Lake
and trying to extend their control into the no man's land between the
frontlines.
Elsewhere, Iran claims that
two Iraqi counterattacks were defeated in the week-old operation on
the northern front near Haj Umran.
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Iraq says its warplanesiconduc/ed only 24 airstrikes on military
targets near the border( Meeelayy According to press reports, Iraqi jets
have also attacked as many as three Iranian shuttle tankers since
Sunday, badly damaging one.
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Comment: Iran probably will continue trying to nibble away at Iraq's
defensive positions east of Al Basrah, looking for weaknesses to
exploit. Iran's foothold on the west bank of Fish Lake could threaten
the Iraqi flank and jeopardize Iraq's ability to push back a large attack
without giving up more territory. Ficihtinp in the north remains a
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The lull in the air war has provided a much-needed respite for Iraq's
Air Force, which flew hundreds of missions daily throughout most of
January and February. The continued fighting east of Al Basrah,
however, and the anticipation of another large Iranian offensive in that
area probably will prompt Baghdad to resume intense airstrikes
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ZAMBIA:
Mounting Pressures on Kaunda
Military grumbling, unprecedented public criticism, and growing
economic troubles have complicated Zambian President
Kaunda's efforts to reassert his authority since the rioting over
food prices in December.
Kaunda's concern about the loyalty of the armed forces rom ted
him to cancel a trip last week to Ghan
orale among enlisted men a thrioncommissioned_officers_declined
on a feThibstantial salary increases were announced for
senio officers,
the reassignment of the popular Army
commander prompted brief work slowdowns at two Army bases
month.
Tensions have also increased between Kaunda and members of the
Zambian parliament, who have sharply criticized his domestic and
foreign policies in recent weeks, according to reports from the US
Embassy and the press. - ? ? ? ?
Kaunda has been the President since Zambia
became independent in 1964
IMF and World Bank officials are in Lusaka to evaluate the foreign
exchange auction, the centerpiece of Zambia's IMF-mandated reform
program. The suspension of the auction for the past six weeks has led
to shortages of raw materials, which have caused cutbacks in
production and temporary layoffs, according to the Embassy.(TM
Comment: Kaunda's reluctance to travel outside the country
indicates that he has not recovered his political confidence, which was
badly shaken by the food riots in December.
?aunda probably
realizes that he cannot take ntloyalt tor granted. If living standards
continue to decline, as seems likely, ? iscontent will probably increase
ted ranks.
among the junior officers and the enl
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EASTERN EUROPE- Lifting of Polish Sanctions
US:
The lifting of US sanctions against Poland has been well received
in Eastern Europe and has revived interest there in probing
Washington's intentions toward the region in the hope of
obtaining political and economic gains.
Poland predictably welcomed the US action, rejected any linkage of
it to domestic reforms, and branded any US policy of differentiation
toward the East as wishful thinking. The Romanians let it be known
that their "independence" from the USSR on arms control and
foreign policy issues also deserves such treatment as multiyear
most-favored-nation trade status and manifested surprise that the US
should view Poland as less dependent on Moscow than Bucharest.
Hungarian Deputy Foreign Minister Kovacs also complained about
the hardship of annual MFN review, but he assured US officials that
Budapest will ursue economic reforms and values highly its ties to
the West.
The Bulgarians, expressing interest in improved relations, will send 25X1
a delegation to Washington in the next several weeks to press their
application to the GATT and the reestablishment of the Bulgarian-
American Economic Trade Council. Neither East Germany nor
Czechoslovakia has responded to the lifting of sanctions against
Poland.
Comment: The US opening to Poland seems to have signaled to the
East Europeans the possibility of a softened US policy toward the
region. Several regimes apparently believe that if they make strong
presentations of their reformist intentions they may obtain economic
concessions from Washington.
The East Europeans are keenly aware, however, that Moscow closely
monitors their economic ties to the West, and, like Poland, they must
be able to stress Communist self-interest as the sole basis for such
arrangements. Nonetheless, the speed with which they have moved to
seek at least the same "deal" they believe Poland got suggests that
they believe the USSR is allowing them some slack for obtaining from
the West technology and economic assistance not available in the
East.
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NICARAGUA: Rebel Leadership Still in Disarray
The resignation of Arturo Cruz from the Directorate of the
Unified Nicaraguan Opposition and renewed pressure from
Costa Rican President Arias have set back efforts by moderates
on the Directorate to establish civilian control over the insurgent
military effort.
Cruz indicated that his resignation Meftelay stemmed from frustration
over the inability of political moderates to obtain influence in military
affairs, according to press reports
On , Arias threatened to ban UNO political leaders from
meeting in Costa Rica if they assume control over the insurgents'
military funding.e=xiing-to-p4:ess_cepor4Robelo and Chamorro,
who regard political activity in Costa Rica as essential to the anti-
Sandinista effort, said they would reconsider the issue.
Comment: After a series of threats intended to strengthen his
position, Cruz apparently is determined to leave the rebel leadership
for good. Robelo and Chamorro may try to continue their political
activity in San Jose but forgo efforts to gain control over rebel military
operations. In that event, the leaders of the Nicaraguan Democratic
Force, the main insurgent military organization, would have little
reason to submit to civilian oversight.
Arias apparently fears his claims of neutrality have been damaged by
reports of insurgent use of a covert airfield in Costa Rica. He is likely
to remain insistent that anti-Sandinista exiles in Costa Rica have no
direct connection to the military effort.
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MADAGASCAR: President Trying To Isolate Dissenters
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President Ratsiraka of Madagascar probably still hopes to reach a
political solution to the violent protests of university students that
have flared on and off since December, but he may be forced to crack
down more forcefully
&E-44TbassrreprortstilizatItie widespread looting and
burning of the property of ethnic Indians7vihich plagued provincial
cities last week, might spread to the capital.
Comment: Ratsiraka continues to deal cautiously with the unrest,
which is the most serious threat that he has faced during his 12 years
in power. He might offer opposition figures increased influence in an
attempt to defuse tensions. Reduced opposition support for the
students would put the regime in a better position to contain the
violence. If ethnic violence spreads to the capital, this would give new
impetus to the students and other dissidents, further taxing the
security forces.
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COLOMBIA: Drug Control Set Back
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Recent court decisions in Colombia have hurt Bogota's ability to
maintain momentum against the country's drug trafficking,kingpins.
,AGG9Pcting-to..t.120-1..L.S.Eriabass*, the Supreme Cour as re,a irmed its
earlier finding that Colombia's extradition treaty with ther4of 1979
was ratified illegally and is not valid. It ha?s also ruled that President
Barco could not legally assign jurisdiction for narcotics cases to the
military. A military court subsequently released Evaristo Porras, the
most important drug trafficker in custody in Colombia.
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Comment: Barco supports extradition, but the Court's decisions have
crippled the process and may cause the government to resubmit the
treaty to the Colombian congress for reratification. Prospects for
reratification are uncertain, however, because several congressional
leaders have ties to narcotics interests. Without the military's
involvement, corrupt and intimidated civilian judges will not hold drug
traffickers long enough to extradite them. Even if Barco upholds the
treaty, the Court is unlikely to consider new extradition cases, fearing
reprisals from traffickers
Ton Sacra!
9 11 March 1987
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USSR: Civilian Industry To Get Defense Resources
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During a recent interview on Hungarian television, a prominent Soviet
economist close to the leadership claimed that defense industry
specialists and new production technologies will be transferred to the
civilian sector to aid the industrial modernization campaign. The
economist?Abel Aganbegyan?also assert9d that leading defense 25X1
industrial enterprises and design institutes will develo and
manufacture equipment for light industry.
Comment: The statements are consistent with the leadership's recent
exhortations for the defense industries to produce more and better
consumer and producer goods in support of General Secretary
Gorbachev's industrial modernization campaign. Although defense-
industrial personnel and organizations have been called on to support
civilian projects in the past, the extent of their participation has been
limited to the selective transfer of managers and some scientists and
to the limited participation of some design and production
organizations. Gorbachev's successful bid to force the defense sector
to surrender both sophisticated design and production resources?if
accomplished on the more substantial scale implied by
Aganbegyan?would be a strong indication of the high priority the
leadership has given the modernization drive.
SOUTH KOREA: Possible Chemical Agent Production
South Korea for several years has been importing chemicals from
West Germany?ostensibly for fungicide manufacture?that are
precursors to the production of nerve agents. According to US
diplomatic reporting, the West German firm Hoechst has confirmed
that in 1985 and 1986 it supplied 240 tons of the phosphorous
oxychloride to Korea Explosives?an explosives and agricultural
chemical manufacturer. Hoechst reportedly has provided
phosphorous trichloride as well as phosphorous oxychloride to the
Korean company since 1982.
Comment: The use of these chemicals for fungicide production is not
implausible, but both are necessary for the production of the nerve
agents tabun, sarin, and soman. Hoechst has been an active supplier
to the Iraqi chemical weapons program and may also have been
involved in supplying the Egyptian program since the 1970s.
Development of offensive chemical weapons would be in keeping with
Seoul's belief that, unless deterred, North Korea would employ a
massive chemical attack in wartime.
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In Brief
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Europe
?Fianna Fail leader Haughey elected Irish Prime Minister by vote of
pc), 83 to 82 ... speaker cast tie-breaking vote after key independent
?I abstained... Haughey's need for support from independents will
make tenure difficult, probably short lived.
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? Rome interested in acquiring US AWACS, 25X1
. . increasingly concerned about air defense in south ?5X1
it \JD after Libyan missile and Libyan aircraft entered Italian airspace
undetected twice in 1986.
? New primate of Hungary, Archbishop Laszlo Paskai, will probably
continue nonconfrontational policies toward regime... close
associate of his predecessor, Cardinal Lekai ... regime pushed
hard for Paskai's appointment.
continued
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op oecret
Americas
Africa
USSR
NR2
Middle East
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? Intruder aircraft shot down by Honduran Air Force near
Salvadoran border on Monday niaht tentatively identified as
US-re istered cargo plane,
. probably involvea in narcotics trafficking.
? Angola reportedly forcing Chevron Oil to sell 10 percent of oil
holdings there to non-US companies... British, French, Italian,
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Dutch, Brazilian firms interested ... reflects Luanda's concern US
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may compel its companies to withdraw.
including
Ethiopian military activit ncrdasing in Ogaden,
presence of three fighters at forward airbase,
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.. Addis Ababa may be Planning cross-border raid
or support for attacks by Somali dissidents
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?
Mozambican dissidents in Western Europe,
rebel leader planning
new opposition group ... critical of Portuguese, South African
support for RENAMO ... may weaken political
win but not likely
to hamper military operations in near term.
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Syria reportedly has chosen Chile's Pillan turboprop trainer
aircraft over Brazilian competitor ... $40 million contract to be
completed in mid-March... 15 of 60 tq! be delivered immediately
after agreement signed.
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Special Analysis
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USSR:
Gorbachev Asserting National Security Role
In recent weeks, General Secretary Gorbachev has made new
strides in strengthening his control over national security
decision making. He still must take into account the views of his 25X1
Politburo colleagues in making decisions about the military
budget and Soviet arms control negotiating strategy, but he has
considerable room to maneuver.
Gorbachev's appointment in January of an ally, Anatoliy Lukyanov, to
the Secretariat marks a new stage in his consolidation of control over
the national security apparatus. Lukyanov has no military experience,
but his recent appearances indicate he is assuming some
responsibility for military and security affairs, while continuing to run
the General Department?which handles paperwork for the Politburo.
Lukyanov's combined responsibilities may be part of an effort by
Gorbachev to increase the role of civilians in defense matters?a goal
he has reportedly been working toward. Another Gorbachev ally,
Lev Zaykov, is still overseeing defense industries and serves in the
Secretariat as an overseer of the defense sector.
Gorbachev's new momentum in national security affairs was evident
in his proposal last month to separate INF from other issues, which
apparently surprised many Soviet officials. A few days before the
announcement, the head of the Soviet delegation in Geneva gave no
indication that new arms control proposals would be forthcoming.
Asscir.clizugialba-LISZnabasay.in Moscow, Deputy Foreign Minister
Ete,ssmsch aid Gorbachev-Kai:I attended an unusually long
-,--Politburo meeting two days before the announcement, suggesting
that the Politburo's decision was made then.
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In making the INF proposal, Gorbachev underscored his authority
over military and security affairs by citing his position as head of the
Defense Council. His use of the title was unusual; previous General
Secretaries have been so identified b other s okesmen but have not
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Japan
Tadashi Kuranari
Minister of Foreign Affairs
Age 67 . . . one of Nakasone's
closest confidants . . . widely
respected in Japanese political
circles as expert in economic
policy, especially agricultural issues
. . . has dealt with US-Japanese
trade relations during 28-year Diet
career . . . well versed in arms
control?of particular interest to
Min as native of Nagasaki. . .
cautious, detail oriented,
sometimes slow in responding to
questions.
Budget Deficit as a Share of GNPa
Percent
6
5
4
3
2
1
z
.0 4980,, ?Ili' 82 83 84 85
a Central government budget.
b Estimated.
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86b 87b
312167 3.87
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Iv
Special Analysis
JAPAN-US: Limited Stimulus Package Likely
When Japanese Foreign Minister Kuranari visits Washington
this week, he is likely to discuss Finance Minister Miyazawa's
promise in Paris last month to stimulate Japan's economy. Any
stimulative package, however, will almost certainly leave Tokyo's
policy of fiscal austerity intact and will have a minimal effect on
the economy and the trade balance.
The Trade Ministry?long an advocate of increased government
spending?is the leading proponent of a large supplementary budget.
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probably trying to gain support for stimulus from the ruling party?
which faces a local election next month?pointing to continued bad
economic news, such as the record unemployment rate of 3 percent.
Before altering fiscal policy, however, Nakasone would have to
repudiate budget austerity, a policy he has pursued since assuming
office in 1982. In addition, the powerful Finance Ministry is not
convinced that a large package is necessary. Even without new
stimulus, Japanese Government economists, assuming yen-dollar
stability, are predictin that economic growth will begin to recover
later this year
The package Nakasone brings to Washington next month is not likely
to alter the basic thrust of Japanese fiscal policy or to contain more
than token measures designed to provide a limited boost to the
economy. Nakasone will probably not want to present such a package
to the Diet before the now deadlocked tax reform issue is settled,
fearing it would be held hostage to the tax reform controversy?just
as the 1987 budget has been. If the current stalemate on tax reform
persists, it may be fall before the Diet will consider the new package.
Top Secret
14 11 March 1987
Declassified in Part - Sanitized Copy Approved for Release 2012/12/04: CIA-RDP88T00091R000400230001-8
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Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/12/04: CIA-RDP88T00091R000400230001-8