NATIONAL INTELLIGENCE DAILY SATURDAY 25 NOVEMBER 1989

Created: 11/25/1989

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Contents

Nest Pari) ChiefUrbane* ,

Situation Report

Germany:eadership Role in Jeopardy

mvrntd About US Defense Cutf

hallenge Matches On

Military's Influence on thc Decline

Sahador. Rebelsipnal To Regroup Uruguay: Ruling Parly. Headed for Election Defeats

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Draft Properly Law Broadened

Polls Close Tomorrow in Holly Contested flection

Brief

Aealysrs

Military Procurement Spending Apparently Off9

Piel: CFE Talks Moving Forward

New Parts Chief Lrbaark

special Central Committee plenum yesterday replaced parryJakes with Kant Urbanek as mass demonstrations Im fawarchange continue

Jakes and lhe cniire pany Presidium and Secretariatas the plenum opened. Jakes admitted his policies had"trusr of lhc people and accepted responsibility for lhecrisis. Me urged workers not to participate in ihcstrike called for next Monday. The Central Committeehead of Ihc Czech republic pany apparat. to replacehad noi been prominent as thc struggle between Jakesopponent in lhc Presidium intensified.(3

The Central Committee was in session late into lhc night, finally reaching agreement on ihe new members of the Presidium and Secretarial. Allhough ihey are younger overall than the ousted old guard, nonenown reformer, and several are tough hardliners. The reteniion of hardliners suggests Urbanek will find lillle support among ihem lor initialing meaningful political reforms. safaats&T-

Public pressure on ihe embattled pany leadership continues to mount. Former pany leader Dubcek returned to Prague yesterday and addressedemonstrators, callingeturn to "socialismuman face" and appealing to the Army to suppon the people. The wave of protest was also obvious in olher cities. Students have expressed determination lo continue their strikes into next week, and prominent dissident playwright Havel says lhc general sinkc next Monday should proceed regardless of ihc outcome of ihe Central Commit teeJJBJa*>

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Central Committee session was clearly contentious;embers spoke. The resignation of the entire pany leadership initially seemed to satisfy one of the principal demands of theouster of those leaders who came lo poweresult of the Soviet-led invasion inrbanek's new leadership hneup will disappoint the public, however. He also faces enormous challenges as he seeks to consolidaie his power, restore public conferenceiscredited pany, and deal wiih popular demands for free elections, political pluralism, and radical reforms.

ow profile probably madeompromise candidate acceptable to both hardliners and moderates, bul his colorlessness

continued

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will noi help him "ilh Ihc public Hc will have to make dramaiic gestures,t oil more protests ll probably is already too laie to pievcnt the general strike on Monday. The oppositionovi cvriiti iil> sees lhal eventeans of underscoringhe ne* pany lejd.is'tip ilui lhe populace will noi abide cosmetic policy

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Moscowied ihe leadership change in Czechoslovakia without comment ami gnsc some mienlion to Dubcek's speech. Thc Soviet party ma; nut be entirely satisfied with Urbanek. who does not appearlose lie*he Soviets and had worked closely with Jakes." however, publicly suppon him while_urging additional moves towu'd

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SliuiHun Report

President Elected

speed with which Jhe Lebanese legislature reassembled yesterday lo elect Elias Hatawi asPresidenteasure of the durability of the national reconciliation process that began in Ta'if. Saudi

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'Damascus will welcome Harawi's election as preserving the Ta'if accord and will provide extraordinary security to preclude another

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I larawi today hasmembcr Cabinet along traditional confessional lines. Salimunni Muslim, has been redesignated thc Prime Minister and again will serve as Foreign Minister. Shia Amal leader Nabih Barri. Druze chieftain Walid Junblati. and Christian Phalange party leader Sa'adah wen: also given

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CAST HERMANN : Krvni. Party's leadership Rule In Jeopardy

igon Krenz's latest cpmrnears on his tenure and rumblings from tke party rank and file suggrst he has no more than an even chance of keeping hit job as parry boss beyond the party congress set for

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Many Easi German officials arc convinced ihatill be

ihc Western press on Thursday to

ihat he wants lo remain party leader buj^wilj abide by the party's decision and not cling lo powci jtasVajVtv^lfcJpf

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Krenz added that, in response to demands from protesters and members of the Communisl-lcd coalition, he supports removing from thc Constitution references to the party's leading role. He blamed East Germany's problems on former leaderunderformer economics chief Miltag. who was ex pel led from thc party Thursday for "grave violations" of its rules

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Most East German Communist officials probably see Krenz"s'Tlosc identification with Honeckerindrance to their attempts toeformed party lhal can compete in free elections

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Modrow. however, may not succeed Krenz. The new Premier has calledreater separation between thc party and government and appears more interested in building his power base in the Council of Ministers lhan in leading ihe discredited party. East Berlin party boss Gucnter Schabowski will probably compete for Krcnz's job. Schabowski isoldover from lhe Honecker era bui probably suiters less from public distrust lhan does Krenz. Schabowski's populist image, dynamic speaking style, and willingness lo meet with opposition leaders may make him attractive to the pany rank and .

A consensus appears to be forming in the pany for eliminating language in the Constitution guaranteeing the party's leading role; thc change may be approved as early as next Friday's session of the People's Chamber. Public pressure is responsible for this shift, which almost certainly would end thc party's grip on power.

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WESTERN EUROPE:

West European as an uncApcvtc speculationhangesastern Europe. US troop withdi ils commitment more of the scci

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res* reports have portrayed ihe US announccmeni major polie> shift and have otteredmplications. Many commentators see the the first tangible US reaction to defense policy vict President Gorbachev and developments in vlosi have speculated on thc possibility of near-term wals. and some question whether thc US willnd press Western Europe harder to accept

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Reactions by government officials have been muted.Mitterrand, the only head of state to comment publiclyindicated the US decision would not affect French

spendingI

>utch and Danish

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onichrlsesent noi having been consulted in advance. Dutch politicians, however, have welcomed lhe cutsign that spending reductions in Western Europe* will be more acceptable.

Allies probably view the US announcement as

major policy shift by Washington on which they should haveThey are likely to question US motives in the timingannouncement, wonderingossible hidden agendaihc> arc also likely to be more wary of US military'in Europe. The US announcement, however, almostnot trigger immediate, reciprocal cuts or even reviews ofplans. Most West European governments probably willa CFEaerccmcni is reached before reviewing their

Thc US announcement will heighten West European sensitivitypolicies on burdensharing and arms cooperation.will watch closely for details of the cuts and measureon current and proposed joint weapons programsof defense spending in Western Europe are likely toUS stalcmeniignal that Wcst^uropean defense spending .will increasingly belJJ

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ii No-tmtxr'rtSI

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Nat tonal! lies Challenge Mantles On

yiulemce in the Caucasus, the Lithuanian party congress nexithe Supreme Soriet's rejection of Moscow's plans forautonomy as too modest are among the challengesO'orbacher facet et he tries toecentralizationto both the republic and(3)

Strife persists in Nagorno-Karabakh and elsewhere in Azerbaijan.redilitary convoy across ihc border in Azerbaijan earlier this month, and clashes between Azcris and Armenians

ieorgian authoruicseaaaB-snaaaw'hjvc

increased ihc militia presence in lhe autonomous oblasi of South Ossetia. where clashes between Georgians and Osselians arc on the rise. In Moldavia, however, last week's appointment ofa new republic first secretary hasull in demonstrations..

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last week's mceiing with Lithuanian pany leaders, several

PolitburoForeign Minister Shevardnadze.

Defense Minister Yazov. and Agriculture Secretary

argued strpngly againsi independenee for the republic pariy.Saaaaa*

-tatastaksBBSjataafei Lithuanian pany leader Bmzauskas did not retreat

but stressed lhat his parly does noi planever all lies to the center

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Despite rejecting Moscow's economic autonomy bill as too

some Supreme Soviet delegates arcalticplan as too

Supreme Soviet's rejection of Moscow's economic bplan shows ihe difficulty of using all-unionwhich prorcformisl sentiment is strong to check republicautonomy, but many delegates alsolan lhatweaken lhc union. Brazauskas probably will urge moremembers lo seek pany independence from ihc CPSU incautious manner. If the Azeri strike leadsviolence or spreads to essential industries. Moscowferry in more troops(3)

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SOI IH AFRICA: i> Ih. Ihxli

miliiary has counseled againsi casing iheMCUrily restrictions, and many officer* ore agilaied thai de Klerka political settlement. Thc improved diplomatic climateAfrica has also made dc Klerk reluctant to authorizealleged African National Congress facilities in neighboringtactic many in the military favor. As the police force grows, itmore ofthe internal security burden from the Army,Klerk is likely io curtail the more provocative policeas the arming or violent black groups on the right. Soulhcan cut military spending nexl year even as itmissiles and fighter aircraft because of savings fromfrom Namibia and reduced suppon for thein Angola.jgj

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El.OR: KvbvK Lnw Capital To Regroup

Rebelenerulh appear li> hiue evacuated tlie San Salvador area, leaving behindantities of weapons and ammunition.

Uie coun

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rcgroui

Itigh guerrilla casualties over lhe past(3)

hy ihc Armyilleda large-scale resumption of attacks on military targets inunlikely. Salvadoran security forces nonetheless willpressed lo check random acts of rrban terrorism(3)

URUGUAY: Ruling Party Headed for Election Defeats

President Sanguincttis ruling Colorado Pany will probably lose both ihc presidency and thc powerful mayor's posilion in Montevideo in tomorrow's elections, but hissuccessor probably will follow similar pro-US foreign and economic policies. Preelection polls show the Blanco Pany well ahead nationwide, making its conservative faction leader. Senator Luis Albeno Lacalle. the favorite to win the presidency. Thc Marxist Broad Front coalition leads in Montevideo, homcof half thc nation's population, however, giving its contender for mayor. Taborelight edge over the Blanco candidate.

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ILaeallc's views are similar to those ofthe moderate.

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markci-orientcd policies of the Sanguinetli government, but hedifficulties in carrying them oui. especially if theMontevideo. Although Vazquez is considered amore radical elements of the Broad Front might trytheir control of the capital to promote "socialist" goals thatwith thc national govcrnmem's free market policies.Party, moreover, is ideologically divided and noi likely tocongressional majority. Lacalle may seek an alliance withor the Colorado Pany. Like Sanguinetli. Lacalle is likelywith ihc US on such regional issues as Panama, debt,has fretted on thc problem of(3)

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USSR: Unit ProperlyBroadened

Thc Supreme Sovici'i new draft law on propenyssued for nanonwide discussionMeek ago. would broaden ihe definitionocialisl" property lo include public and individual ownership and ensures boih equal protection. Premier Ryzhkov said recenily lhal lhc leadership hopes to reduce siaic-owncd enterprises fromoercent of lhc total. Thc draft allows farmers to retain their land for life and to pass il to their heirs but not the right to sell it. It permits private ownership of apartments, houses, and the means of production for small-scale economic activity and touls "collective" property to encourage joint stock companies and other enterprises ihai arc panly or totally owned by workers. The draft continues to waffle on the issue of the republics' sovereignty over land and natural

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aaWnMMlhe draft law defines ownership nghls critical

other pending legislation on land use and the republics'

s more liberal than the government's proposals overand will be hotly debated before being submitted tonext spnng. Controversy is likely to focus on theexpanded individual propeny rights and the text's failure toin sanctioning thcrepublics' sovereignty over land and )

INDIA: Polls Close Tomorrow in Holly Contested Election

Voter turnout in India's nalional election has been moderate; the polling has been marred by sporadicthaneaths have been rer-jiied

been^to an

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election boycott there. The balloting will end tomorrow, and lhe results probably will be known by

violence and charges of malfeasance have beenand probably will funher cloud Gandhi's chances intwo days of voiing. The President, who is usually willingihe ruling pany's bidding, has demonstrated independeneelack ofronndciiccjn^iandhi's government by calling foron^)

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In Brief

in Seoul(31

Korean issue will be on agenda atoviets evidently eager to expand lies to Seoul, likely to press US to increase contacts withorth Korea Mm"

League Foreign Ministers to discuss status of peace process in TunisiaLO probably wants Arab backing for Palestinian-Israeli dialogue. UN Palestine debate PLO hopes newly readmitted Egypt will deflect hardliners. VMM

Central Bank President Gonzalez Fraga has resigned following instability in exchange markets, opposition from business groups andeplaced byjechnocrat

Egidio Ianella. two-time Central Bam; chief.

0 million loan from0 million Polish package for Unsupported stabilisation

reinforcing Western cooperation"tTu'ropean aid?)

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Special Analysis

Procurement Spend inn Apparently Off9

decline in both to actual I

Preliminary analysis cf Sorter military production rotes forsystems through the firstonths9 suggestsexpenditures probably declined in real terms this yearfirst time since President Gorbacher came to power.personnel, operations, and maintenance may also harefor spending on research and development are lessmajcr programs appear to br continuing(3)

estimated procurement expenditures is aunt cutbacks and lo the maturationumber of i

Cutbacks have been most pronounced in spending for general purpose forces and military space: there has been little change in spending for strategic forces.andful of weapons systems accounted for much of lhe decline:

for thc military space program have been cut this year, in part because of technical problems. Reductions have been concentrated in several expensive systems: thcaunch vehicle and the space shuttle programs have been stretched out. and the Mir space Station went unmanned for about four months.

Thc Soviets also continue to realize savings by ceasing production of INF missiles. MLfJjV

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Other Spending Reductions

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Fart her tut* Possible

The Soviets still have to make substantial cuts in defensethe next two years if they arc to reduce2 percent and trim militaryerceni as Gorbachev announced lasi January.conditions will keep up the pressure to hold downin lhe Five-Year Plan. In determiningand manner ofthe cuts, however, the Soviet leadershipeconomic necessity against military capabilities Iheyfoi national sccui ij(3)

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Special Analysis

Talk* Nlaiing Fumard

Dtrr/opmf'i, in Eauern lurope may, for both East and West Europe andd new urgency to the Vienna negotiations on reducing conventional forces in Europe. Progress is likely, even though the EuropeansFE treaty might leave Soviet iroops in Eastern Europe and would tend to reinforce the existing military alliances.

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Now more lhan ever, ihc USSR wouldFE accord as soon as possible ncM year. Moscow sees innique opportunity to pare back NATO's militaryUS forces from Westernthen divert badly needed resources from the Soviet military tc ihc domestic economy

CFE talks, however, are directed toward agreement on alliance-wide ceilings and require collective decisions by boih NATO and thc Warsaw

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European Considerations

continued

Political changes may already be affecting Pact solidariiy at the. CFE talks. Hungarian and Polish CFE delegates have been especially independent in their behind-the-scenes dealings with Western counterparts. Hungary at least onceormal proposal that apparently was not cleared with Moscow or its other alii

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European Interest*.

The NATO Allies also continue to have strong incentives for concluding the CFE negotiations. Most West European NATO members almost certainly believe that achieving conventional force parity in Europe will help stabilize the process of change in the East by improving security for both alliances. Thc Allies probablyFE accord as the best guarantee lhal lhe USSR will actually slash its watmaking capability, noi simply withdraw forces behind Soviet borders. Increasing public and budgetary pressures to cut planned defense spending further make the AlliesFE treaty as an acceptable way to salvage their security and NATO membership.

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The pace of negotiations will continue to be regulated by NATOwillingness to compromiseumber of definitionalissues. For the time being, both governments on bothcertainly remain comfortable wiih ihe collective aspects ofprocess and probably are willing io defer adjustment toEuropean poliiical-sccurity_ordcr in theollow-on CFE-II

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