CENTRAL INTELLIGENCE BULLETIN

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NATIONAL INTELLIGENCE DAILY CABLE 0
0 Monday 17 October 1977 CG NIDC 77/241C 0
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National Intelligence Daily Cable for Monday, 17 October 1977
T e NID Ca le is for t e purpose of informing
senior US o icials.
RHODESIA: Nkomo's Position
CUBA-MOZAMBIQUE: Closer Ties
SUDAN-USSR: Diplomat Expelled
DJIBOUTI: Fragile Government
USSR: Sakhalin Oil Discovery
POLAND-US: Financial Leaders
PORTUGAL: Eanes' Speech
EC - ARAB STATES: Dialogue
BANGLADESH: Zia Dissolves Parties
Nigeria
India
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RHODESIA: Nkomo's Position
//Rhodesian nationalist leader Joshua Nkomo
has increasingly occupied center stage in the Rhodesian settle-
ment effort in recent weeks. Nkomo, who is benefiting from major
weaknesses among all of his rivals, seems to be growing more
confident about his prospects for becoming the leader of a Zim-
babwe government. Nkomo's opponents are showing concern about
his increasing strength, while the Smith government apparently
has renewed its interest in involving Nkomo in a settlement.//
//Nkomo believes that the military strength
of his Zimbabwe African People's Union puts him in a good posi-
tion for the coming settlement talks under the UK-US proposals.
He apparently feels that the frontline African presidents have
accepted him as the leader of his Patriotic Front alliance with
Robert Mugabe's Zimbabwe African National Union and that ZANU's
continued internal problems will enable him to be the dominant
voice in the settlement talks.//
//Realizing that he is not strong enough now
to be assured of the top spot in a Zimbabwe government, Nkomo
is moving cautiously and trying to keep his options open with
regard to the settlement talks. ZAPU leaders are uncertain of
their electoral strength inside Rhodesia and would prefer a
solution that would give them effective power well before any
election.//
//At the same time, ZAPU is beginning to con-
sider methods of improving its political position. The group's
Secretary General, Joseph Mzika, told US officials in Lusaka
last week that while it is necessary to keep the momentum of
the settlement effort going, a six-month transition period might
not be long enough because Nkomo and others who have been in
exile have much to do to prepare for elections.//
//Some ZAPU leaders are concerned because
their support comes mainly from the minority Ndebele tribal
group. They want to develop at least a temporary alliance with
political figures inside Rhodesia from the majority Shona group,
in order to ensure that Nkomo wins in an election. The ZAPU
leaders believe that no coalition with Muzorewa's faction is
possible because of deep enmity between Nkomo and Muzorewa, but
that ZAPU might be able to join in a loose alliance with Sithole's
followers.//
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//Some of Nkomo's rivals have be
come more
concerned about Nkomo's strength as a result of Z
bi
am
an Presi-
dent Kaunda's meeting with Rhodesian Prime Minister Smith last
month.
u: a1YV quently canceled further talks with ZAPU, w is ad been sched-
uled to begin this past weekend in Tanzania and would have been
aimed at strengthening the fragile Patriotic Front alliance.//
//Muzorewa's faction also sus
t
pec
s that the
Kaunda-Smith meeting was designed to promote Nkomo's fortunes.
Muzorewa raised the issue with a US official in London last
week and warned that the UK and the US should not give undue
influence to Nkomo. He also asserted that his faction should
participate in military talks arranged by Lord Carver and Gen-
eral Prem Chand.//
//Some followers of Muzorewa and M
b
uga
e ap-
parently favor an alliance between the two to block Nkomo's
bid for power. There is no indication, however, that the two
lead
h
ers t
emselves are activel considerin such a coalition.//
CUBA-MOZAMBIQUE: Closer Ties
//Mozambican President MacheZ's visit to
Cuba last weec may ave resulted in Cuban ledges to provide
additional military advisers.
The chief of the
Cuban Border Guard partzezpated in the taZlts 'th
h
gesting that the defense of Mozambique's frontier was
discussed.//
tional military advisers to help Mozambi
u
i
e
q
e
mprove its
border
defenses. It may also be willing to send a modest amount of arms
and ammunition but probably expE!cts the USSR or East European
states to fill any major Mozambican requests.
Cuba's economic difficulties preclude it
from providing large amounts of material aid.//
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isit returned President Fidel
h
ose v
//Machel, w
Castro's trip to Mozambique in March, apparently has established
a warm friendship with the Cuban leader, and Mozambique is
rapidly becoming one of Cuba's closest allies in black Africa.
There are an estimated 750 to 800 Cubans in the country now.
Only Angola and Congo have more Cubans; most of the Cubans in
Congo are involved in Angola-related operations.//
//The Cuban Government also has agreed to re-
200 Mozambican high school students for a
1
,
ceive approximate y
year of schooling in Cuba. About 1,000 arrived aboard a Soviet
passenger ship just before the start of Machel's visit. The
others are apparently traveling by air.//
//CIA believes that 450 to 500 of the Cubans
in Mozambique are military advisers. (DIA believes that there
are 500 to 600 Cuban military personnel in Mozambique, bringing
the total Cuban resence to 800 to 900.)
there is no evidence that the Cu-
//So far
,
bans have been involved in combat operations. Cubans are not
likely to enter combat unless President Kaunda of Zambia and Tan-
zanian President Nyerere drop their opposition to the presence
of foreign combat troops in Africa.//
//The remaining 300 Cubans in Mozambique are civil-
ian advisers and technicians, including medical technicians,
fishing and sugar specialists, agricultural experts, and trans-
portation, construction, and communications technicians. Castro
stated in a speech during Machel's visit that the number of
civilians will increase to slightly more than 400. The additional
100 will robabl travel to Mozambique before the end of the
year. 25X1
SUDAN-USSR: Diplomat Expelled
dan has ordered the Soviet Charge to Leave
//S
u
the country by next Thursday.// The expulsion order follows a
speech by President Numayri Last Wednesday in which he denounced
Soviet interference in Africa, especially the USSR's military
support of Ethiopia.
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Relations between the two countries have been deteri-
orating in recent months largely because of the growing Soviet
support for Ethiopia. In May, Sudan expelled all Soviet military
advisers and ordered a major reduction in-the size of the Soviet
Embassy staff in Khartoum. The Soviets retaliated by recalling
their Ambassador and expelling some Sudanese diplomats from Mos-
cow.
The Sudanese believe that Soviet backing of the Ethio-
pians, who provide support to Sudanese dissidents, is aimed in
part at undermining Numayri's government and at striking a blow
at Egypt through Sudan. Numayri consequently has been a willing
partner in the concerted Arab effort to weaken Soviet influence
in the Horn of Africa.
n his speech last week, Numayri coupled his denuncia-
tion of Soviet policies in Africa with a renewed offer to facili-
tate a dialogue between the Eritrean guerrillas and the military
regime in Addis Ababa. He may hope that his conciliatory gesture,
in addition to promoting a solution to the Eritrean conflict,
might encourage Ethiopia to diminish its reliance on the USSR.
The Ethiopians ignored Numayri's offer, although they25X1
subsequently expressed guarded interest in restoring normal re-
lations with Sudan. They also have shown no inclination to lessen
their dependence on the USSR for military support
DJIBOUTI: Fragile Government
erious ethnic and personal rivalries in Djibouti and
the fighting between the new republic's two neighbors, Somalia
and Ethiopia, are threatening to undermine the fragile govern-
ment.
The US Charge in Djibouti reports that power rivalries
and personal jealousies are now besetting the cabinet. The first
casualty could be the uneasy partnership between President
Gouled, a member of the Somali-related Issa group, and Prime
Minister Dini. The Prime Minister belongs to the Afar tribe,
which has ties to Ethiopia.
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Dini is reported to be chafing under Gouled's highly
personal rule and has threatened on several occasions to resign.
He is a longtime rival of Gouled's who joined his competitor
in the ruling coalition because he had no alternative.
He has been losing influence in the past few weeks.
Although his dispute with Gouled is primarily personal,
Dina s departure from the government could result in a loss
of Afar support for the coalition and risk aggravating the deep-
seated antipathy between the two groups. It could also generate
Afar suspicion that the Issa-dominated government is becoming
too closely tied to Somalia, which has traditionally claimed the
country.
Gouled, for this part, has attempted to resist Somali
domination, but he knows he must maintain Somalia's support
and cooperation. He has, for example, bowed to Somali pressure
and for the past two months has curtailed shipments of fuel to
Ethiopia from Djibouti.
Gouled's ability to act independently has been further
limited by the presence in the government for the Front for
the Liberation of the Somali Coast, a Somali puppet organization
that acts as Mogadiscio's agent in Djibouti. He accepted the
Front's participation in the government to gain Somalia's sup-
port for independence.
Before independence, the Front was a clandestine organ-
ization working to drive France from the territory. It now has
legal status as a political party and holds several seats in
parliament. It is also well represented in the armed forces, but
some members continue to operate as guerrillas.
The Front is not the only well-armed group presenting
a security threat to the country. Other ethnic-oriented organiza-
tions operating generally unhindered include the Western Somali
Liberation Front and other groups fighting against Ethiopia, as
well as domestic opposition groups that may be responsible for
an arms cache discovered recently by the government north of the
city of Djibouti.
The fighting between Ethiopia and Somalia has added to
Djibouti s woes. The severance of the Djibouti - Addis Ababa
railroad in June by the Western Somali Liberation Front has cur-
tailed activity at the port of Djibouti and restricted other
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aspects of commercial activity. The port and the railroad are
the country's only important economic assets. The conflict in
Ethiopia also has interrupted the customary flow of badly needed
foodstuffs to Djibouti and triggered an influx of refugees who
are taxing the new nation's meager resources.
Gouled seems to have initiated few domestic programs
to deal with the country's serious problems and has had only
limited success in acquiring new foreign aid. As political.
cohesiveness continues to be under strain, he may well prove
incapable of balancing domestic interests and fending off
pressures from Somalia and Ethiopia.
The country's unsettled conditions have helped generate
rumors at both Ethiopia and Somalia are planning coups in
Djibouti. We have no firm evidence to support these rumors,
and we doubt that the Ethiopians or the Somalis, who are pre-
occupied with their own conflict, would directly intervene in
Djibouti at this time. Each country, however--and especially
Somalia--has its own surrogates in Djibouti capable of acting
if it sees the other side gaining the advantage.
USSR: Sakhalin Oil Discovery
A promising oil strike recently was made off the
northeastern coast of Sakhalin. The president of the Sakhalin
Oil Development Cooperation Company, the Japanese partner in
the USSR-Japan joint venture, claimed that four test wells
flowed at a combined rate of some 7,000 barrels per day of
high quality crude oil. Current Soviet oil production in the
Far East is 40,000 to 45,000 barrels per day.
The company hopes to start commercial production
area have been suspended until June 1978 because of severe
weather conditions. Exploration off the southwestern coast
of Sakhalin, meanwhile, is to start later this month.
Preliminary estimates by the company put the size of deposits
in both areas at 700 million barrels.
in our to five years. Current: drilling activities in the
Any commercial output from the recent discovery
will provide a boost for the USSR in the 1980s as oil
production problems increase, even though half of the oil
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from any commercial production obtained from this joint
venture is to be delivered to Japan for 20 years. In 1976,
total Soviet oil production was at the rate of 10.4 million
barrels per day.
A delegation of Poland's top international financial
officials Zed by Foreign Trade Minister Jerzy Olszewski is in
Washington this week to discuss bilateral economic issues with
the US. The delegation hopes to get commitments for sizable US
credits to finance Polish purchases of US grain and will dis-
cuss the agenda for the next meeting of the US-Polish Joint
Trade Commission.
Olszewski is likely to press Poland's search for
large concessionary credits to finance agricultural purchases.
Last month, Warsaw asked for a $500-million to $600-million
credit from the US to finance such purchases in fiscal year
1978. Poland this year has had a poor grain harvest and serious
hard currency balance-of-payments difficulties. Most of the
credit would be used to buy 4 million to 5 million tons of US
grain.
Poland is also seeking credits of $400 million to
$500 million annually for the next several years to finance
additional agricultural purchases in the US. Warsaw ultimately
would like to negotiate a long-term agreement with the US that
would provide more generous credit terms than the 8-percent to
9-percent, 3-year credits now being granted by the US Commodity
Credit Corporation.
Olszewski probably will make proposals for expanding
US-Polish trade and economic relations while discussing the
agenda for the seventh session of the Joint Trade Commission,
to be held in Warsaw on 28 and 29 November. He will search for
ways of boosting Poland's exports--particularly machinery and
manufactures--to the US. Last year, large grain and feed pur-
chases pushed the deficit with the US to $550 million, the
largest Poland had with any of its Western trading partners.
Accompanying Olszewski are Deputy Finance Minister
Marian Krzak and the vice president of Poland's foreign trade
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bank, Jan Woloszyn. These officials have been given the task
of explaining to US bankers and officials how Poland will han-
dle its debt to the West, according to the US Embassy in Warsaw.
Discussions may also take place on a possible Polish bid for
membership in the International Monetary Fund as well as a re-
iteration of Warsaw's frustrations over US antidumping laws and
Eximbank credit terms. 25X1
PORTUGAL: Eanes' Speech
President Eanes, in a speech on Saturday at the open-
ing of the national assembly's second session, upbraided the
political parties for not taking seriously enough their respon-
sibility to resolve the country's political and economic diffi-
culties. Eanes threatened to take what actions he could within
the limits of the constitution if the parties do not respond
quickly, although he undoubtedly wants to avoid taking dramatic
steps if possible. The speech came as pressures already were
building on Socialist Prime Minister Soares to reach an accomm-
odation with his political opponents in order to ensure the
legislative majority his party needs to govern and quell rumors
that his resignation is imminent.
In the speech, Eanes called for a political agreement
to en bickering among the parties, an understanding between
workers and businessmen to support difficult economic measures,
and the involvement of the entire country in the recovery pro-
cess.
Eanes made it clear he was tired of the parties wast-
ing time on political squabbles. He said he had no intention of
assuming the government's responsibility to come up with economic
solutions nor the national assembly's responsibility to replace
a government with which it is not satisfied. He affirmed his
backing for the Soares government until the assembly denies it
support.
Eanes undoubtedly hopes his criticisms will push the
parties into action; he would prefer not to risk his popular
support by taking the burden for economic improvement on his
own shoulders. Thus far, his prodding from behind the scenes
has produced neither a political understanding nor a consensus
on strong economic measures.
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The President, like Soares and the Socialists, is
losing political strength by not taking decisive stands. Eanes
will probably continue his efforts to bring about a legislative
agreement among the Socialists, the centrist Social Democrats,
and the conservative Center Democrats that would enable the
Soares government to remain in office.
Opposition criticism of the Socialists intensified
last week when the foreign minister's surprise resignation
showed the governing party to be weakened by dissension. Soares
began meetings last week with opposition party leaders, but so
far has been unable to soften their positions. His cancellation
of trips to Spain and Japan scheduled for the next few weeks
has increased speculation that more changes in the government--
or possibly its replacement--are imminent.
Dwindling foreign reserves and criticism both from the
opposition and from Socialist Party ranks are threatening Soares'
ability to stay in power. He hopes that the President's continued
support and a reorganization of the government, perhaps bringing
in some independents, will attract the support he needs to con-
tinue governing.
All three opposition parties are angling for a role
in a coalition government. The Center Democrats, however, say
they would support a Socialist government bolstered by qualified
independents so long as they can help draft the government
program. Soares almost certainly could not come up with either
a cabinet or a program to suit all three parties, but probably
will try to work something out at least 'with the Social Democrats.
Social Democratic Party head Sa Carneiro is taking an
extremely tough line; he would like to see Soares replaced and
Eanes assume a larger role. Drawn-out negotiations between the
two parties will only further delay work on urgent economic
problems. As the balance of payments situation continues to
deteriorate, the political opposition will press harder to gain
more concessions from the beleaguered Socialists.
If Soares is forced to resign, both the Social Demo-
crats an the Center Democrats would think twice before accepting
power either singly or together without Socialist support to
give them a majority. Their safest bet would be a government of
members from the three parties acting as independents under
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strong presidential leadership. The hard-pressed Communists are25X1
1'k
un ely to play much of a role in the negotiations unless they
can first prove that their control of labor and agriculture can
still threaten a non-Communist government.'
EC - ARAB STATES: Dialogue
//The European Community has come a step closer to
giving the "Euro-Arab dialogue"--the three-year-old institution-
alized discussions on economic, technical, and cultural ques-
tions--the political dimension that the Arabs have always wanted.
The political directors of the Nine agreed earlier this week,
subject to approval in their capitals, to establish a "group
for the exchange of views on political questions."//
//The European decision does not meet all the Arab
demands. The Arab participants in the dialogue have insisted
on the creation of a "political committee" and have also called
for ministerial-level meetings. The EC countries have been dis-
appointed by the dialogue's lack of accomplishments--which they
blame largely on the Arabs--and have said they will accept a
ministerial meeting "only when the state of progress of the
Euro-Arab dialogue would justify it,,"//
//Other restrictions the Europeans will im
ose on
p
the group that is to discuss political questions are that it
meet only twice a year, that participation be "limited," that
it not meet before the spring 1978 session of the Euro-Arab
general commission, and that there be no negotiations.//
//The European action nonetheless is a clear con-
cession to Arab pressure. The Europeans had hoped that their
statement in June on the Middle East, which allowed for a "home-
land for the Palestinian people," would temporarily satisfy Arab
demands for a favorable stand on the Arab-Israeli dispute and
would contribute to the economic and technical aspects of the
dialogue. The Nine apparently now think that adding a political
side is necessary to keep the dialogue from becoming moribund.
The Palestine Liberation Organization is represented in the
Arab delegation to the dialogue.//
//The general commission of the dialogue will meet
in Brussels on 26-28 October, but no significant decisions are
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expected. The community continues to see the dialogue as an
additional means to maintain contact with the Arabs, and as a
potential way to safeguard European interests in the event of
political upheaval in the Middle East.
BANGLADESH: Zia Dissolves Parties
n a nationwide address Friday night, Bangladesh's
president, General Ziaur Rahman, announced that he was dissolv-
ing three of the country's more active political parties. Zia
charged the parties with "terrorism, foreign infiltration, and
conspiracy" that contributed to the short but bloody military
mutiny of 2 October. His move may also be related to plans he
may have to establish a party of his own.
According to press reports, the leaders of the three
parties--the National Socialist Party, the Moscow-oriented Com-
munist Party of Bangladesh, and the Democratic League--have been
arrested by police and are being held without charges. The Gov-
ernment claims it has evidence to connect the leaders with the
uprising.
//The Socialists have been connected with antigov-
ernment terrorist activities in the past, including previous
mutinies. The Communists have frequently been accused of being
tools of India and Moscow, and the former leader of the Democra-
tic League--now serving a five-year jail sentence for corruption--
is widely believed to have influence in some sections of the
military. We have no evidence, however, that any of the parties
instigated the 2 October uprising or that there was any foreign
involvement in it.//
Zia may believe that these parties, with Indian and
Soviet backing, were involved with the mutineers, but he may
also be looking for a scapegoat. He seems unwilling to acknow-
ledge either privately or publicly that troops actually revolted
against him.
Zia has long despised politics and been suspicious of
politicians. He is aware, however, that if he wants to remain
in office he will probably have to enter the political arena.
He has scheduled national elections for next year and is known
to be contemplating establishment of his own political party,
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based primarily on support from local officials he has been cul-
tivating and on his undeniable popularity with the people. Zia
may feel that the abolition of the Socialists, Communists, and
Democratic League will smooth the entry of his party into poli-
tics.
This first severe challenge to Zia's rule since he
took power in November 1975 apparently has led him to abandon
his usual restraint and risk a strain in Bangladeshi-Indian
relations, which have been steadily improving since the election
of the new Indian Government last March. Zia has refrained from
accusing any particular country of involvement in the mutiny, 25X1
but he has publicly condemned the anti-Bangladesh attitude of
the Communist government of India's West Bengal state, which
borders on Bangladesh.
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Nigeria
In a weekend press conference before leaving the US,
Nigerian Head of State General Obasanjo shed further light on
the policies his government is developing to discourage foreign
companies from doing business with South Africa. He declared
that companies seeking to invest in Nigeria for the first time
will not be allowed to do so unless they adopt a program of
gradual withdrawal from South Africa. He emphasized that Nige-
ria has not yet formulated plans for dealing with multinational
companies that have subsidiaries in both Nigeria and South Af-
rica.
Obasanjo reiterated that Nigeria was gathering infor-
mation and screening all foreign contractors and business firms
for the purpose of discriminating against those that have rela-
tionships with South Africa. Nigerian embassies last week re-
ceived a vaguely worded circular from Lagos announcing that
firms doing business in or with South Africa would not be al-
lowed to participate in the Nigerian construction industry or
in service sectors.
Indira Gandhi's supporters failed this weekend in an
attempt to install the former Indian Prime Minister as presi-
dent of the Congress Party. At a party convention on Saturday,
the party's current president, Brahmanandra Reddy--backed by
Gandhi's opponents--refused to step aside. Gandhi had privately
claimed that she would accept the presidency only by unanimous
draft, and in a short and poorly received speech at the conven-
tion denied she sought the position at all.
n order to avoid a party split, Gandhi and her oppo-
nents have probably agreed on a division of power that will
give her a major role in naming other party officers and choos-
ing the party's candidates for next year's state elections. The
discord between her supporters and opponents, however, may well
hamper the party's efforts to reorganize and return to power
following its overwhelming electoral defeat last March by the
Janata Party.
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