NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030200010016-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: August 3, 2006
• Sequence Number: 16
• Publication Date: June 9, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE 0
Thursday June 9, x..977 CG NIDC 77-' 3C
NATIONAL SECURITY INFORMATION
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National Intelligence Daily Cable for
purpose o informing
USSR-US: Tass Report on. Detente
JAMAICA: Deteriorating Economy
PAKISTAN: Situation Report
UK: Dark Wage Control Prospects
JAPAN - SOUTH KOREA: Shelf Agreement
PHILIPPINES: Military Clashes
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USSR-US: Tass Report on Detente
The Soviets have sharply criticized President Carter
for his assessment of Moscow's implementation of the Helsinki
agreement. They have warned that his statements could have an
"adverse effect on Soviet-American relations and detente as a
whole." Moscow's message appears to be that it will tolerate
criticism from Congress and US media on human rights issues
but that the President's report and Secretary Vance's testi-
mony on Monday are different matters. Soviet statements on
SALT, meanwhile, have been expressing the same critical atti-
tude toward US intentions that Moscow adopted after the Secre-
tary's talks with Soviet leaders in March.
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Yesterday's Pravda carried a Tass report from Wash-
ington that linked the President with the "enemies of detente."
This is the closest the Soviets have come in recent months to
charging him with a deliberate attempt to damage detente. The
article betrays Moscow' anger at being unable to prevent a
possible confrontation over human rights at next week's prepar-
atory session in Belgrade for review of the Helsinki govern-
ment.
A Tass commentary on Tuesday by senior political ob-
server Yury Kornilov makes the point that the accusations of
the US press against the USSR are one thing but that it is quite
another matter when the President "openly encourages and kin-
dles this ballyhoo." This statement indicates that Moscow will
tolerate criticism from the US on human rights so long as it
could be publicly viewed as unofficial and does not therefore
seem to challenge Soviet prestige and doctrinal positions.
I I Both commentaries repeat the allegation that dissi-
dents in the USSR are "agents and accomplices" of US intelli-
gence services--the leitmotif of the recent Soviet counterof-
fensive on human rights. This reflects the option Moscow has
developed to hold a show trial of arrested dissident Anatoly
Shcharansky. Such a trial could feature allegations that US
diplomats and newsmen have acted as conduits between the CIA
and Soviet dissidents.
Soviet media are still giving a cool. reception to the
President's remarks on SALT and are pointing to US weapons
developments as further confirmation of a gap between the ad-
ministration's words and deeds regarding strategic arms limit-
ations. In a broadcast to the US last week, a senior Tass of-
ficial said the "increased testing" of cruise missiles is a
further indication of Washington's efforts to secure an advant-
age at the expense of Soviet security and is "in violation of
US-USSR summit agreements."
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JAMAICA: Deteriorating Economy
I Jamaican Prime Minister Michael Manley is now foZ--
ow2ng the advice of political moderates by seeking assistance
from the International Monetary Fund and industrial nations,
but sufficient financing is proving difficult to obtain. If
Manley's moderate stance fails to produce results in a few
months, he will probably again turn to his radical advisers.
The result probably would adversely affect US interests.//
//Jamaica faces a sharply tightened foreign ex-
c ange in this year. Although the current-account deficit
is declining sharply because of increased bauxite and alumina
sales and continuing import constraints, the capital account
will get much worse. This is a result of higher debt-servicing
obligations, a further reduction in capital receipts, and con-
tinuing capital flight., Despite severe austerity measures and
a probable IMF loan, Jamaica faces a foreign payments gap of
about $100 million in 1977, mainly in the third quarter.//
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I //The battle among Manley's advisers over the
government's approach to the economic dilemma has so far passed
through two distinct stages. The first culminated in January-
about a month into Manley's second term--and represented a high-
water mark in the influence of young Marxist-oriented radicals
in the ruling party. Manley named several of them to key minis-
tries responsible for implementing social change and assigned
others to draw up an "emergency production program." He also
said he would look to the USSR for economic assistance.//
//By late April, however, Manley had significantly
altered is actics. Disappointed by the response from the USSR
and the Soviet-dominated Council for Mutual Economic Assistance,
as well as by the failure of the radicals to devise a program
that would get the economy moving, Manley, at least at that
time, rejected their economic schemes.//
//He turned once again to his more orthodox eco-
nomic a vi.sers for a plan to meet the stipulations of the IMF,
which he had vilified a few months earlier. At the same time,
party moderates--led especially by Foreign Minister Patterson--
began strenuously to oppose the radicals' efforts to expand
their power base in the government and party.//
//The radicals have been regrouping and waiting
tor an opportunity to prove to Manley that they are correct in
contending that there has been no basic change in US policy to-
ward Jamaica. They have taken pains to dissociate themselves
from attempts to obtain assistance from the West.//
//For example, two leading radicals who were named
to the Jamaican team that recently met with a US economic mis-
sion absented themselves from every session. The radicals, more-
over, have apparently tried to undermine relations with the US
through a story they planted in the press that was designed to
raise false expectations concerning the amount of future US
assistance.//
//If economic problems worsen, the result will be
eig ene political instability. Manley is likely to suffer a
significant loss in popular support as unemployment mounts, in-
flation increases, and basic goods become unobtainable. Intra-
party tensions will probably increase.//
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//Unless Jamaica can find more foreign financial
e p--inc uding debt rescheduling--than is now in sight, Manley
will have essentially two options: tough it out, or boost baux-
ite taxes again. If he chooses the first, Jamaica would have
to slash imports by as much as 20 percent below last year's de-
pressed level. Even so,, severe payments problems would persist
over the next few years, requiring continued stiff austerity
measures and increasing the :Likelihood of severe political
problems.//
//At the moment, the odds are strongly against
ano er uxite tax increase--as long as Manley believes fur-
ther foreign financial assistance will be available. If such
aid does not materialize, he probably will turn back to his
radical advisers, and a bauxite tax increase and other nation-
alistic pressures against US investments on the island could
well follow.//
//Manley probably would also seek closer relations
with Cuba. Although he apparently has been disappointed in the
size of Soviet aid offers thus far, his attempt to lessen de-
pendence on the US could lead to increased overtures to the
USSR. Moscow is unlikely to provide cash aid but has indicated
that some trade arrangement could be worked out, probably in-
volving small purchases of bauxite and alumina.//
//Even if Jamaica nails down enough foreign loans
to cover its payments gap this year, Manley will stick to his
goal of creating a "democratic socialist" society. Manley's
commitment to aligning Jamaica with the third world is also un-
shakeable. If relations with the US improve, however, differ-
ences could be dealt with in an atmosphere free of last year's
undertones of hostility, and Manley would feel less compelled
to identify with the more radical members of the third world.
PAKISTAN: Situation Report
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I The political crisis has had a serious impact on the
Pakistani economy. Strikes and curfews called during the
three-month campaign to oust Bhutto have, on occasion, virtually
shut down economic activity in major cities, leading to a de-
cline in industrial production and shortages of raw materials.
I IThe Karachi area has been hardest hit; labor problems
have s owed the unloading of ships and caused the port to be
closed for several days. Transportation of goods from the port
to the rest of the country has been disrupted, and industry in
the Karachi area is estimated to have lost the equivalent of
one month's production.
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I lInflation, which was cut to 8 percent in 1976 from
more than 20 percent in 1975, is rising again. Price increases
have been fueled by substantial raises granted to government
employees just before the March election, as well as by pro-
duction losses and shortages. Pay increases in the private
sector are likely to follow.
Pakistan's finance minister cited political disruption
as a ac or when he recently lowered export targets for the
year by some 18 percent. The balance of payments may also be
affected by lower remittances from overseas workers. Pakistani
workers, who were expected to contribute $450 million in foreign
exchange for the fiscal year ending June 30, may hesitate to
send payments home because of political instability.
Recently, a $500-million commercial loan that Islam-
abad had been counting on was postponed. The banks that were
to provide the loan--and the government of Iran, which had
agreed to guarantee it---were apprehensive because of the polit-
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UK: Dark Wage Control Prospects
//Jack Jones, the chief of Britain's largest Za-
or union and a key figure in maintaining harmony between the
unions and the government, has dealt a blow to Prime Minister
CaZZaghan's chances of getting another restrictive national
wage agreement. Jones' union of transportation workers decided
last week not to risk a divisive floor fight at its annual
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meeting next month, and to sponsor instead a resolution caZZ-
ing for an "orderly" return to collective bargaining when cur-
rent wage curbs expire on July 31.//
//Jones is now lined up with many other Trades
Union Congress leaders who favor only an "understanding" with
the government that the unions will not demand wildly infla-
tionary pay increases in future contract negotiations. Union
leaders are apparently prepared to promise to adhere to the
rule that requires a union to wait one year before negotiating
a new wage contract. This rule prevents militant unions from
re-opening wage talks in attempts to keep up with the latest
and most favorable agreements elsewhere.//
//If the one-year rule remains in effect, most
major unions will not be eligible for new wage contracts until
next winter or spring. Trades Union Congress officials believe
this would help stave off the kind of wage explosion that fol-
lowed when the Heath government ended pay controls in 1974.//
//Pressure from grass-roots union members for a
return to collective bargaining is so strong that the Trades
Union Congress is being forced to turn its attention to polic-,
ing the current wage guidelines. Some unions are stalling their
contract talks in hopes of doing better after controls end on
July 31. F7 I
JAPAN - SOUTH KOREA: Shelf Agreement
I IThe Japanese - South Korean continental
shelf agreemen , w ich took effect yesterday, paves the way
for joint oil exploration and development of the East Asian
continental shelf. South Korea ratified the agreement in 1974
but was increasingly frustrated in its efforts to explore for
badly needed energy sources by prolonged Japanese debate on the
is sue.
South Korea's interest in the continental shelf dates
,
back to a 1968 UN survey indicating that the East Asian shelf,
stretching 2,700 kilometers from the Yellow Sea to the Gulf of
Tonkin, has excellent petroleum-bearing prospects.
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Seoul has been trying for some time to get drilling
under way in the area where Japanese and South Korean claims
overlap. It has granted a concession in the disputed area to
a US-British consortium, the Korean-American Oil Company. Ac-
cording to the Japanese - South Korean agreement, any oil found
in the jointly claimed area is to be shared equally.
In Japan, the treaty has been a sensitive political
issue for Prime Minister Fukuda's government. Most Japanese
opposition parties have resisted increased cooperation with
South Korea and have seen the issue as an opportunity to em-
barrass the government. Fukuda, while sympathetic toward South
Korea, also has been interested in exploiting any new energy
sources. Japanese concern over Chinese opposition to the agree-
ment was an additional factor in the delay, although Peking
has registered its objections in a low-key fashion.
//The lower house of the Japanese Diet ratified
the agreement early last month. To complete ratification, Fukuda
and other Japanese leaders succeeded in extending the Diet ses-
sion beyond June 8 so that a final vote by the upper house
would not be necessary. According to Japanese law, if more than
30 days remain in the Diet session after a treaty is passed by
the lower house, the treaty is automatically approved without
upper house action.//
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PHILIPPINES: Military Clashes
A US embassy official who recently visited the area
or slim rebellion believes that the Philippine military,
Christians, and Muslims all hope the cease-fire will continue.
A general call to arms by the Moro National Liberation Front--
the Muslim political organization--is unlikely, especially in
view of the moderate stand that the Islamic Conference adopted
last month on the Muslim question.
I ILocal rebel leaders also are reluctant to resume the
conflict on a major scale, but there remains a possibility
that small incidents could grow into a larger conflict.
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