NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029200010008-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: August 9, 2005
• Sequence Number: 8
• Publication Date: August 5, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday August 5, 1976 CI NIDC 76-183C
State Department review completed
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Top Secret
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National Intelligence Daily Cable for Thursday August 5. 1976,
IThe NID Cable is for the purpose of informing
senior US officials.
CONTENTS
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SOUTH AFRICA: Demonstration
LEBANON: Situation Report
PORTUGAL: Government Program
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GUINEA-USSR: US Security Guarantees
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USSR: Economy
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SPAIN: Communist Party
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I A demonstration by South African students in Soweto
yesterday triggered the first major urban violence since the
June riot that spread from Soweto to lTother black townships
around Johannesburg and Pretoria.
Early yesterday some 5,000 students gathered in a soc-
cer stadium, ostensibly to organize a march to Johannesburg to
protest the continuing detention of students arrested in the
June riots. The demonstrators, joined by thousands of other
youths, stoned commuter trains and buses, keeping many Soweto
residents from going to work.
When rioters broke out of Soweto and attacked a nearby
railway station, police opened fire, reportedly killing at least
three youths.
Less extensive student rioting and intimidation of
commuters also occurred in Alexandra, a black township on the
opposite side of Johannesburg. Early estimates of absenteeism
among black industrial workers in the Johannesburg area ran as
high as 60 percent.
Police said the rioting was under control by noon, al-
oug groups of students were still marching in Soweto.
I Colored students at a university in Cape Town staged
a sympa y demonstration yesterday, but police dispersed the
students without serious incident.
Since schools in the black townships reopened two
weeRs ago, minor student disorders, along with some arson in
widely separated localities, have shown a degree of coordination
that was not apparent in June. Government authorities have
blamed the Black People's Convention and associated student
groups, and many members of these groups have been arrested.
Particularly in Soweto, militants have sought to im-
pose a school boycott by intimidating the students, and school
attendance has been low. Last Sunday the government suspended a
ban on outdoor gatherings so members of Soweto's urban Bantu
council could meet with local residents, inform them of their
recent consultations with white government leaders, and ask par-
ents to cooperate in restraining student unrest.
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Government authorities gambled that the meeting on
Sunday would reduce tensions that have remained high since June
under stringent security measures. Although attendance was
lower than expected, the meeting went smoothly, and the spokes-
men for the council--merely an advisory body--apparently gained
some credibility by recounting their demands that the government
be in sweeping modifications of the apartheid system.
LEBANON: Situation Report
The commander of the Arab League security force in
Lebanon, General Muhammad Ghunaym has announced the cease-fire
that was planned for yesterday will take effect today.
I I The announcement came after a meeting with represen-
tatives of all the Christian militias and the commander of the
Christian faction of the Lebanese army. The terms of the cease-
fire reflect the provisions in the Damascus agreement announced
last week, which calls for the deployment of League troops to
enforce the peace.
I I The agreement was reached apparently on the condi-
zon--presumably demanded by the Christians--that League forces
create a buffer zone in Beirut only after the cease-fire has
taken effect. Christian leaders, who reportedly had been resist-
ing deployment of League forces on the Christian side of the ma-
jor confrontation line dividing east and west Beirut, may have
agreed to this formulation knowing that the chances for a truce
taking hold are remote.
Arab League mediator Hasan Sabri al-Khuli, who has
been conducting the truce negotiations, went to Damascus yester-
day, presumably to coordinate the League's efforts with those
of Palestinian negotiator Faruq Qaddumi and Syrian Foreign Min-
ister Khaddam.
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I lIt was later announced by the leftist-controlled Bei-
rut radio station that Khaddam would arrive in Beirut today to
oversee implementation of the truce. We have no confirmation of
this from Damascus; if Khaddam does make the trip, however, it
would demonstrate new confidence on the part of Syria that a
truce can be worked out.
Khaddam--who once regularly shuttled between Damascus
and Beirut on negotiating missions--has not been in Lebanon for
months. His appearance in Beirut might also reflect a Syrian de-
cision to put direct pressure on principal Christian leaders to
adhere to the truce.
I The successful evacuation yesterday of a second incre-
ment o wounded from the Tall Zatar refugee camp helped smooth
the way for the truce agreement. Both Arab League and Palestin-
ian spokesmen had recently warned that Christian cooperation
with the evacuation was a necessary first step in negotiations.
A total of 243 were safely taken out yesterday; well
over a thousand more still are trapped in the camp, however.
Resumption of shelling before the evacuation convoy could clear
the camp area prompted the Red Cross to delay temporarily its
next mission.
I I Fighting intensified around the Muslim enclave of
a as an in central Beirut yesterday, apparently as a result
of the cease-fire announcement. The pro-leftist radio station
has charged the Christians with taking advantage of the evac-
uation to escalate its attack on leftist and Palestinian posi-
tions in other areas of the city and of making an "eleventh-
hour" land grab.
President Franjiyah was unable to hold the cabinet
meeting scheduled yesterday; only Camille Shamun and one other
minister showed up for the session. Franjiyah-?-apparently un-
perturbed by the poor showing--issued another call for a cab-
inet meeting, but this time stated bluntly that the cabinet
would consider ways of preventing Muslim leftists from setting
up their own administrations in Muslim-held territory.
I ranjiyah presumably wants to remind traditional Mus-
im politicians that their authority will never be restored if
left-wing militants are allowed to consolidate their control
over these areas.
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As an inducement to private investors, Soares reiter-
PORTUGAL: Government Program
Underlining his apparent belief that improved labor-
I Assembly of the Republic will probably give
i s approval to Socialist Prime Minister Mario Soares' new gov-
ernment program after a five-day parliamentary debate that be-
gins today.
Opposition criticism of the program, which Soares out-
lined in a lengthy speech on Monday, has been largely pro forma.
The program may be rejected only by the Communists, who resent
being excluded from the new government.
In his remarks, Soares placed major emphasis on the
economic program, in which he envisions a period of coexistence
between private enterprise and the large, nationalized public
sector. While espousing socialism as a long-range ideal for the
country, Snares promised that socialist measures would never be
imposed against the will of the Portuguese people.
ated his pledge to revise the foreign investment code and de-
clared an end to nationalizations, but he also pointed out that
those companies already under government control would remain
so.
management relations can help resolve many of Portugal's eco-
nomic problems, Soares took a hard line on labor discipline. He
declared workers would be prosecuted for seizing factories and
hinted that the government might curtail the right to strike.
Dismissals of idle workers are also expected.
The stiffening of the government's resolve to impose
its aut ority on labor--along with Soares' announcement that he
will abolish the present labor law, which allowed the Communists
to consolidate their control of the national labor confedera-
tion--has been loudly protested by the Communists.
Snares' hopes for restoring economic equilibrium ap-
pear to rest largely on holding the line on government spending
rather than on new taxes. Portugal will continue to be depen-
dent on foreign assistance. The Prime Minister admitted Portu-
gal had found it difficult to obtain international gold-secured
loans, but he appeared to anticipate substantial trade conces-
sions from both the European Free Trade Association and the EC.
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reflects the expectation of significant additional financial re-
sources from the US.
Soares' announcement that he would soon resume nego-
tiations with the US on base rights in the Azores probably also
Although Soares has not disclosed all. the details of
is program, he did enumerate a list of ambitious social pro-
grams. These reportedly include construction of 60,000 to 65,000
housing units annually, national social security and health
services, school and hospital construction, and assistance to
mass transit. If the government intends to carry out these proj-
ects and be consistent with its aim of restraining government
spending, many existing public programs will have to be cut back
sharply.
In the foreign policy portion of his program, Soares
signaled a strengthening of Portugal's ties with the US and
Western Europe and, by implication at least, a de-emphasis on
the third world - oriented policy of former foreign minister
Melo Antunes.
Soares said Portugal plans to join the Council of
Europe by the end of the year and to initiate talks leading t
Common Market membership.
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GUINEA-USSR: US Security Guarantees
Guinea is seeking US help in trying to protect itself
trom an alleged threat from individuals in neighboring Senegal
and Ivory Coast who oppose President Toure's regime.
I I A confidant of Toure, in discussing his government's
intention--reported in yesterday's Daily--to deny the use of
Guinea for Soviet TU-95 naval reconnaissance flights, asked
that the US use its influence with Senegal and Ivory Coast to
ensure Guinea's security.
According to US Ambassador Harrop, the request did
not appear to be a condition for ending the Soviet flights. We
believe, however, that Toure might use a negative US response
as an excuse to justify continuing to permit the flights.
The Guinean official said his government had requested
the Soviet flights in 1973 because it feared another invasion
by sea similar to one mounted in 1970 by Portuguese-backed
forces and Guinean exiles. He maintained that Guinea no longer
fears a seaborne attack, but is deeply concerned over what he
portrayed as the threat of an attack across its borders by "mer-
cenaries" supported by Senegal and Ivory Coast.
Toure has long been at odds with Senegal and Ivory
Coast and recently has been publicly renewing claims that they
are plotting the overthrow of his radical leftist regime. Both
countries harbor thousands of Guinean exiles who have fled
Toure's repressive rule, but neither has allowed anti-Toure ac-
tivi ty .
Earlier this year, Guineans reportedly poaching in a
Senegalese game park were driven back across the border by Sene-
galese troops. This incident may have helped fuel Toure's con-
-ern.
Yesterday's Daily incorrectly attributed Guinea's re-
ported p an to end the Soviet surveillance flights directly to
President Toure. It was Interior Minister Diakite, speaking for
the President, who relayed the information to Ambassador Harrop.
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25X1 About 70 members of Israel's ultra-right-wing Gush
Emunim organization staged a demonstration in front of Prime
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Minister Rabin's office yesterday after Israeli soldiers had
turned back their attempt on Monday to set up an unauthorized
settlement near Jericho on the occupied West Bank.
The agitation is unlikely to have any effect on the
government's long-standing policy of barring Jews from settling
in heavily Arab-populated areas in the occupied territories.
The right-wing group has long demanded that Jews be allowed to
settle anywhere on the West Bank.
Rabin, in order to avoid the disruption of his cabinet,
agreed last December to allow members of the group to remain
temporarily at Qadum, an army camp in the Arab heartland of the
West Bank. In May, however, the cabinet upheld the government's
authority to select settlement sites and decided to present the
group with a choice of other places to settle.
Negotiations over possible sites have bogged down. The
se ers continue to insist that the government permit Jews to
settle anywhere on the West Bank. Moderates in the cabinet have
begun to urge Rabin to use force if necessary to implement the
May decision.
Conservatives in the government, led by Defense Minis-
ter Peres, are pushing for a decision in favor of the settlers.
The conservatives have recently tried to embarrass Rabin by ac-
cusing him of opposing Jewish settlers while acquiescing in il-
legal Arab squatting on state-owned lands.
Rabin is likely to continue negotiating with leaders
o the rightist group to avoid a showdown between moderates and
conservatives that might jeopardize the governing coalition. If
the group rejects all the government's offers, Rabin could then
say--perhaps with the grudging agreement of his conservative
coalition partners-- that he had been left with no choice but to
order removal of the settlers.
I I State/INR does not believe that Rabin would be able to
secure the acquiescence of his conservative partners. INR also
judges that Rabin would probably seek to delay further a final
resolution rather than face a confrontation with conservatives
over the explosive issue of forcibly e oving the settlers.
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USSR: Economy
Soviet industry performed poorly in the first half of
1976.
Industrial production rose less than 4 percent over
the period last year, reflecting the effects of the 1975
harvest failure on those sectors using agricultural raw mate-
rials. Production of producer durables and some key industrial
materials also slackened.
I Even if the 1976 harvest turns out well, a rebound in
industrially processed food cannot be expected before late 1976.
The 7-percent decline in processed food production was
a major disappointment to Soviet leaders. Compared with the
first half of 1975, the production of meat dropped by nearly one
fifth and of vegetable oil by nearly one quarter. Production of
dairy products declined by 4 percent and of canned goods by 8
percent.
The performance of heavy industry was sluggish. Chem-
ical pro uction increased less than 6 percent, compared with
the 11-percent rate achieved in the first half of 1975.
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I I The failure to fulfill plans for mineral fertilizer
an su uric acid has resulted from delays in the expansion of
production capacity, shortages of natural gas, and maintenance
problems.
The slackening of growth in production of fertilizer
and other agricultural chemicals, coupled with smaller produc-
tion increases of tractors and agricultural machinery, could
hamper growth of the farm sector. F__ I 25X1
I I Continuing arrests in Burma in connection with the
coup plot uncovered last month reflect the Ne Win regime's
mounting doubts about the loyalty of the military, its power
base.
I IA small group of junior officers was just beginning
to p an a coup when they were discovered and arrested. Now, as
many as 300 of their fellow officers have been detained for
questioning, even though in most cases there is no evidence
they were involved in the plot.
Despite their relatively low rank, the conspirators
were in important and sensitive positions. One was a member of
the staff of General San Yu, general secretary of Burma's only
political party and heir-apparent to President Ne Win. Another
was an aide to General Kyaw Htin, defense minister and army
chief of staff. Senior officers have been reprimanded for "dere-
liction of duty" in not detecting the conspiracy earlier.
I I The plot has marred the image of army loyalty upon
which Ne Win's one-man rule has rested. Ne Win and his security
advisers clearly feel the surfacing of discontent within the
military requires a thoroughgoing investigation. By detaining
hundreds of officers, however, the regime risks adding to the
disaffection that it is trying to root out.
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//The Netherlands proposed a major overhaul of
e European point float at last week's meeting of European Com-
munity finance ministers.//
//The Dutch initiative reflects the problems en-
coun ere in maintaining parity between the guilder and the
stronger West German mark.//
//The proposal calls for a wider range of joint-
a currency fluctuations, more frequent adjustments in cen-
tral rates, and constraints on parity changes for nonparticipat-
ing EC currencies.//
From its beginning in 1972, the EC currency band--the
"snake"--has been beset by problems. The UK and :Italy dropped
out of the arrangement within a year of its inception. West Ger-
many has twice revalued relative to other float currencies.
France has left the snake twice, most recently in March of this
year.
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I IThe snake's chief problem has been its inability to
cope wi different rates of inflation and shifts in short-term
interest rates among member countries. Bonn's success in fight-
ing inflation has made the West German mark the strongest par-
ticipating currency.
The heavy intervention costs involved in keeping the
mark and weaker currencies within 2.25 percent of one another--
and members' resistance to additional changes in central rates--
precipitated the withdrawal of the pound, lira, and French franc.
The truncated snake has continued to encounter similar
problems. The West German inflation rate of 5 percent is about
half the rates in other participating countries. To maintain
parity with the mark, the smaller member countries have been
forced to maintain tighter fiscal and monetary policies than
they would prefer.
//With unemployment ranging from 5.5 to 8 percent,
the governments of Denmark, Belgium, and the Netherlands have
found the go-slow economic policies politically painful. The
Dutch proposal is an attempt to dilute float rules sufficiently
to give the smaller participants an alternative to the disci-
plined German economic policy stance.//
As might be expected, West Germany opposes the Dutch
proposal on grounds that its adoption would further lessen in-
centives for harmonizing economic policies among EC members.
The UK and Italy also are skeptical. Both have rates
of inflation well above those in other EC countries and think
they need the flexibility of floating to pursue domestic policy
goals.
Bonn and London succeeded at last week's meeting in
postponing serious discussion of the proposal until October. In
the meantime, the plan will be studied by the EC monetary com-
mittee.
The Hague may be receiving support from Paris and from
some of the smaller joint float countries. The Dutch proposal
parallels a reform package presented earlier this year by France,
before its latest departure from the joint float.
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I Many of the smaller countries, like the Netherlands,
nave a rouble maintaining parity with the strong West German
mark and probably favor a more flexible system.
//Although Bonn has managed to prevail against a
reform tor e time being, the Schmidt government probably rec-
ognizes that maintaining the snake will likely require changes
in either the operating rules or the central rates.//
//On the basis of the past West German record, we
expect that Bonn may opt for a moderate mark revaluation, but
only after the national election in October. Until then, the
Schmidt government will want to avoid charges that it has harmed
West German ' chances for a sustained economic recovery by re-
valuing.// s
SPAIN: Communist Party
I IThe Central Committee meeting of the Spanish Commu-
nist Par y held July 28-30 in Rome was designed to press the
Spanish government to legalize the party. Party leaders stressed
the party's alleged democratic credentials, its broad popular
support, and its ties to other opposition groups.
Party president Dolores Ibarruri and Secretary Gen-
eral Santiago Carrillo attempted in their speeches to answer
criticism of the party by the democratic opposition and to
needle the government on its political reforms? Carrillo noted
that the meeting was held in Rome because the Spanish govern-
ment had denied it permission to meet in Madrid.
Carrillo announced that the party would henceforth
abandon its clandestine role and operate according to demo-
cratic rules. The opening public session was followed, however,
by two days of closed meetings, which the Spanish press criti-
cized as indicative of the party's "clandestine mentality."
Carrillo attacked the Spanish government's attempts
to reform the political system, but acknowledged that the
Suarez government's program contains democratic concessions. He
commented favorably on the King's amnesty, while criticizing the
failure to release terrorists.
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The 81-year-old Ibarruri, widely known as "La Pasion-
aria" for the vehemence of her speeches at the time of the
Spanish Civil War, emphasized the party's independence of any
"international discipline." Her remarks were an obvious effort
to convince the Spanish government that the Communists qualify
under the recently approved law legalizing political parties.
Carrillo moved to test the government's amnesty pro-
gram by announcing that he would return to Spain this month
and that Ibarruri would return in September. According to press
reports, he met with the Spanish ambassador in Paris on Monday,
reportedly to apply for a passport.
On the question of Spain's military ties to the US,
Carrillo reportedly declared that he condemned the presence of
US bases in Spain just as he was opposed to foreign bases in
all countries, including Soviet bases in Eastern Europe.
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