NATIONAL INTELLIGENCE DAILY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005301361
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 24
• Document Creation Date: June 23, 2015
• Document Release Date: September 9, 2009
• Case Number: F-2007-00571
• Publication Date: June 5, 1990

APPROVED FOR RELEASE^
DATE: 09-01-2009
(b)(1)
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 New Law Eases Reins on Enterprises
China: Trying To Improve Economic Reform Image
'1 d1-'SesaceL
 To-
Military Situation, 4 June 1990
out
 down in favor of an interim government are leaving the regime
vulnerable to the next rebel push.
Roberts International Airfield.
the rebels have not taken the nearby towns of Owensgrove and
Harbel. An army unit returning from Buchanan was attacked by
another government patrol at Owensgrove. Each thought the other
was a rebel unit and reported the incident, "confirming" a rebel
attack. The army believes it still occupies Owensgrove, and about
35 soldiers remain in the vicinity of the airfield. As a result of the
soldiers are continuing to desert; only about
125 to 150 soldiers are stationed between Monrovia and Roberts
Airfield, of which only 100 remain at Camp Schieffelin about
15 miles from the airfield. The army reportedly rounded up 380 army
stragglers yesterday at Barclay Training Center and plans to send
them to the 1st Battalion at Camp Schieffelin.
Doe reportedly still insists that the military situation is not
irreversible and that he will stav in Hower until the election in 1991
Meanwhile, large crowds of Krahns have been seen trying to get rides
Payne Airport to get flights to Grand Jide.
Comment: Confusion and disorganization in the military underscore
the increasing difficulty the army is likely to have mounting a
credible defense of positions near the capital, particularly if the rebels
launch their promised attack on the airfield. It is doubtful that
anyone in Monrovia will muster the courage to confront Doe directly
swayed.
o"I p~re~
 To
5 June 1990
 opposition and to mobilize further international support.
and to the European Community in an effort to unite the black
Nelson Mandela, the ANC's deputy president, continues to reach out to
other antiapartheid groups, to black municipal and homeland oJj"rcials,
- He met last weekend with a senior leader of a top black
exclusivist group to discuss clashes between their
organizations that resulted in four deaths last week.
- He met with a leading township official to explore providing
land for returning ANC exiles.
-..-. T. i? ?~l\Tf,` ronfzrrned that it ~~ai11 talk soon ~}~it.h. its oldest rival.
the Pan-Africanist Congress.
-ANC officials have also made overtures to a recently resigned
movement.
to visit the USSR before coming to the US later this month.
on the itinerary announced this week, but Mandela apparently plans
Mandela heads for Europe tomorrow to visit France, the UK, West
Germany, Italy, Belgium, Ireland, and Switzerland. Moscow was not
fallback should negotiations falter.
Africa. The ANC has not announced an end to the armed struggle,
and Mandela probably will ask the USSR--as he probably asked
Libya, Algeria, and Nigeria last month-for more military aid as a
Mandela will use his European tour to try to shore up EC support for
sanctions-flagging since the largely favorable reception President
de Klerk enjoyed last month-but he may have more success
appealing for funds to aid the ANC's organizational efforts irr South
assassinated for working within the apartheid system.
municipal authorities, who have been condemned and sometimes
Comment: ANC leaders are struggling to put an end to the continuing
violence Mandela admits is partially being caused by undisciplined
ANC supporters. Meeting with municipal leaders might help reduce
the longstanding bitterness antiapartheid groups have felt toward black
 Speeches and articles by senior Iranian oJftcials commemorating
yesterday's anniversary of Ayatollah Khomeini's death suggest that
pragmatic economic ttoals are being given priority over radical political
agendas.
Khomeini's son Ahmad on Saturday called for the country to unite
behind Supreme Leader Khamenei and to support the Rafsanjani
government's policies in order to "implement the Imam's line." In
a speech yesterday, Kliamenei emphasized that successful economic
reconstruction is the best way to disarm the US-still labeled Iran's
primary enemy. President Rafsanjani hailed Khomeini's pragmatic
decision to end the war with Iraq and lauded the Ayatollah's foresisht
in providing for leadership after his death.
Ali .4.Icbar ?~~c~'.?~~tashem.i.Pi~r; ;~ procrir.Cl~.3. radical ii the'"cns;~l:ativc;
Assembly, sounded a harsher note. An Iranian daily quoted him as
arguing that Iran should not focus on its economy at the expense of
"forgetting ...the deprived people of the world" and as calling for
attacks against US interests worldwide.
Comment: Mohtashemi's remarks notwithstanding, the overall tone
of the commentary was much less inflammatory than usual. Ahmad
Khomeini's words have symbolic weight because he is a primary
interpreter of his father's legacy. His remarks are the clearest
indication to date That he is moving away from a hard line and closer
to the positions of Khamenei and Rafsanjani. The "Imam's line" is a
code fur those competing to inherit Khomeini's ideological mantle;
Ahnmad's words are meant to suggest that Khomeini would have
approved of the economic reconstruction program.
Rafsanjani's efforts to focus government policy on rebuilding Iran's
devastated economy; Tran will need Western financing to succeed.
Khamenei's speech suggests that, although most senior Iranian
leaders remain committed to promoting militant Islam, they consider
domestic reconstruction their highest priority.
Mohtashemi's remarks are a reminder that the hardliners will not be
silenced. At present, however, their concerns are acknowledged, but
they are not considered part of the mainstream. The radicals probably
will try to undermine pragmatic policies by complaining that
economic programs do not help the poor and perhaps by organizing
 With growing incentives to work together, President Gorbachev and
Russian Republic Chairman Yel'tsin have adopted conciliatory tacks.
Gorbachev's statement on Sunday crediting Yel'tsin for moving back
toward the center is his most positive since they split in 1987, and
Yel'tsin continues to press for an early meeting with Gorbachev. The
divided Russian Republic legislature yesterday again failed to accept
a new set of candidates for republic deputy chairmanships. This
group was pro osed b Yel'tsin? revious rou shad been ro osed
by committee
and Gorbachev's public standing might suffer a further setback.
Comment: Any modus vivendi between the two men is likely
to be shaky. Gorbachev probably hopes the legislature's continued
fractiousness will force Yel'tsin to moderate his positions further.
If he refuses to meet Yel'tsin soon after he returns from the US.
noweve r, their personal conflic? probably 1~~ould boil over again,
status with state-run enterprises.
still novel in the USSR-that profit, rather than ministerial
command, should guide economic decision making. The law
increases the autonomy of state enterprises by removing some
restrictions on how they can set prices and use their profits and by
allowing them to establish independent associations not subject to
ministerial control, It also purports to give enterprises run by
organizations of leaseholders, cooperatives. and shareholders equal
The new law on enterprises, approved yesterday by the Supreme
Soviet, is meant to increase competition and reinforce the notion-
that called for their election by the workers.
Comment: Despite this expansion of rights, key controls over
enterprise behavior remain in Moscow's hands. Centrally mandated
output targets, although set to be reduced, will remain in force for at
least another year, and firms operating under state orders will still
have first priority in the allocation of scarce resources. A separate law
now under legislative review would restore a strong state role in the
selection of directors of state enterprises, rescinding a 1987 provision
 ~'T o'ilf'SeeFCt_
press reports.
poorer regions is outdated and could bankrupt Slovenia, according to
The new government in the F~epublic of Slovenia is moving quickly
to challenge Belgrade on two key matters: it is calling for military
conscripts to serve only in their home republic, and it has announced
further unilateral reductions in tax payments to the federal
government. Slovenia's new Prime Minister, l,ojze Peterle, recently
said the federation's system of funding economic development of the
Comment: The military force is one of the few remaining Pan-
Yugoslav institutions, and military leaders will oppose the Slovene
proposal as an attempt to eviscerate it. The termination of tax
payments to the federation is also a serious challenge to Belgrade's
authority. The federal Presidency and cabinet nevertheless may have
to accept Slovene demands rather than risk spl:ttinx the armed forces.
Top
 trading elsewhere.
Chinese officials told an international symposium last week China
will soon develop experimental securities exchanges to trade
government bonds in Shanghai and Shenzhen and expand securities
Chinese press reports are showcasing new economic measures,
evidently trying to demonstrate renewed reform momentum. Beijing
reportedly gave the go-ahead over the weekend to open the country's
first futures market-for wheat-and announced plans to establish
others for rice, corn, and pork. China will open its first full-fledged
stock market in the Shenzhen Special Economic Zone later this year.
apparently want to improve their personal images
Comment: The recent announcements probably are the start of a
media offensive to snften. Beijing's h.arrlline ir>?a?.? a.n.cl co7vince the
world that China is stable.. Beijing hopes to induce full-scale lending
by the World Bank and to restore other aid. I-lardline leaders also
Premier Li Peng is trying to portray himself as the
champion of economic reform; he publicly endorsed the creation of a
new foreign investment zone in Shanghai. The new measures, under
discussion for several years, will have little economic impact without
key market reforms, such as enterprise bankruptcy and rice
decontrols; these have been stalled since late 1988.
 4 percent of GNP, will be the biggest in the island's history.
component of the budget. The planned deficit for the year, about
rate in March, the third such drop in four months. The budget will
sharply increase spending on infrastructure and other economic
development projects and on social welfare. The defense share will
decrease slightly, although the absolute amount spent on the military
will increase 18 percent over FY 1990 and will remain the largest
dem nd and stimulate the economy.
industrial output fell at about a 1-percent annual
approved a 20-percent increase in spending that will boost domestic
For the fiscal year beginning in July, Taiwan's legislature last week
the highest level since 1981.
programs, such as the Indigenous Defense Fighter, Perry-class
frigates, and advanced tactical missiles. The deficit reportedly will
be financed partly from the sale of public bonds, which should help
prevent the deficit from fueling inflation-about 5 percent last year,
Comment: In addition to giving the economy a boost, the government
evidently hopes spending will satisfy demands for improvements in
housing, roads, and pollution and crime control by a populace that is
playing an increasingly important role in the political process. The
growth in the defense budget probably is needed f'or ongoing weapons
 0
5 June 1990
 TAIWAN: Reacting to Trade Deficit With Japan
The second sentence in the Note in the 4 June Daily should read:
"Taiwan ran a $7 billion trade deficit with Japan last year; the deficit
grew at a 22-percent annual rate through April to reach $2.5 billion so
far this year, almost offsetting Taiwan's trade surolus with the US for
 O
 legislature will force him to compromise with nationalists.
USSR -Ukrainian party chief Ivashko elected chairman of republic's
Supreme Soviet yesterday ...110 Rukh-backed deputies walked
out, protesting his holding top party, government posts ...split in
-Soviet party cadres secretary Georgiy Razumovskiy yesterday
failed in first election bid for July party congress ...two other
senior officials won only by running in rural districts ...shows
 -Reelection of former Polish Communist party Politburo member
Alfred Miodowicz to lead Communist union presages more attacks
on Warsaw's economic policies ... likel to frustrate union's
eH'orts to gain legitimacy soon.
 Ton
on-
 Ton