NATIONAL INTELLIGENCE DAILY FOR 24 OCTOBER 1989

Created: 10/24/1989

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Contents

Shevardnadze's Address toc^.j

teojdOvtr Ta'ifran:-

CWM: Econmrnc Slowdown Intensifying Policy Debate"

9

RcPUblic Bw-Wmicachev Resurrects Main Military

October

Shevardnadze's Addressupreme

In kit first formal report lo Ike newly empowered Supreme Sonet yesterday, Foreign Minister Sherardnadtt underscored tht cenlralily of

US'Sotict relations and arms control, termed Ike Krasnoyarsk radar am open violation of ihe ABM Treaty, and implicitly renounced lhe Brexkae*jm%%

land

Shevardnadzenew level" of mutual understanding, good will has been reached in US-Soviet relations. He admitted lhat construction of the radar at Krasnoyarsk had violated the ABMfirst such officialMoscow's intention to dismantle it, and asserted that this action "saves" the ABM Treaty and clears the way for further reductions in strategic arms. Shevardnadze asserted that tbe USSR now has thc right to ask to inspect US radars at Thule and Fyhngdales to determine if they comply with the treaty, but he did not reiterate Moscow's position that both sides must adhere to the narrow interpretation of the ABMondition for observance of any START agreement ^fl^RF 3

On Eastern Europe, Shevardnadze echoed President Gorbachev's position on lhe inadmissibility of interference in the Internal affairs of other Bloc countries and the right of every country to "absolute freedom ofe stated that lhe emergence of" new alternative forces" in the political life of some East European countries does not - mean they are no longer allies and friends of thc USSR. Shevardnadze acknowledged current problems in Soviet-East European relations, but denied there

Comment: Shevardnadze portrayed US-Soviet relations as lhe Central foreign policy issue in Moscow's view and indicated that, in light of the receni Wyoming ministerial, the Soviet leadership it satisfied with thc way relations with the new US administration are developing. By acknowledging before the Supreme Soviet-thai lhe Krasnoyarsk radar violated the ABM Treaty, Shevardnadze was implicitly repeating his earlier cabs for close legislative oversight to ensure consistency between miliiary decisions and arms control aii nis.^HssHaaTa

t-3

On other arms control issues, Shevardnadze explicitly acknowledged criticism of Gorbachev's initiatives, which he defended as having enhanced Moscow's international credibility and enabled resources to be shifted to meet more pressing public needs. Shevardnadze's assertion that no "crisis" exists in Eastern Europe suggests thereof Gorbachev's tack in

c<Mic( 19

n

Discord Orer Ta'if Agreement

Chnitiam Prime Miahter Awn aad other key- Ubanese leaden orerat Ta'if,

Despite the legislators' overwhelming support for the accord, most

of the leaders of Lebanon's Muslim and Christian factions have not endorsed tt.a.^_

Sauditl+mW* will address the legislators today atscssmn.orthece Awn's meetings with Arab 1badly, the legislators will remain inuntil inTcnd of Ihis weck.-irAwnhe nexthc lebancsc legislature in the Mansour Palace in EastwMhm ihe next few weeks loresident. If Awn doesthe legislators may attempt to hold thc election inpalace in West

Awn is likely to iry to intimidate thc returning Christian legislators into repudiating the Ta'if talks. In addition, he may renew his earlier campaign of shelling West Beirutdevelopment that

would risk provoking Christian infighting.

President Assad pro accept the accord. Damaso greater Muslim power and the illusion that they are ao opposition so Ihat Awirwil obstacle to peace.n Lebanon will create new Muslim allies, and possibly

o Wil

tii

to emand for

te main the situation .ebancse

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IRAN:

he is already backi

Bhutto Facing No-Confldence Vote

The opposition said il would present the no-confidence motion today or tomorrow and that il has the supportfembers. The parties of the Combined Opposition claim they have -gained the backing of some of thci embers of the Muhajir Quami Movementn independent pany from Bhutto's home province of Sind that forms pan of her coalition; MQM leaders told reponers they would back the no-confidence motion. The opposition also claims it has lured some dissident members of Bhutto's Pakistan People'sPariWPPP) away from supporting the government.

embers still supponaieek, that she controlledvotes more(hari'fhc 1T9 required to stay in power, she hadofotes last December.Thcote of no confidchce must be held no earlier

__Bhutto's suppon is increasingly fluid, but she probably can still win the votearrow margin. The three-day cooling-ofT period gives Bhutto an opportunity lo solidify her suppon. Her survival will depend on her ability to deliver on promises she made to her coalition partners last December. Although the MQM is increasingly disappointed with Bhutto, some Muhajirs probably would stick with the coalition because for now it offers them the best protection against possible Sinclhi rcpnsal^JfJBjSJ^ V, J

The Combined Opposition is gambling that, by announcing it has enough support to oust Bhutto, it can attract the additional fotes it needs through promises of favoritismew government. If Bhutto loses. President Ohulam Ishaq Khan would eitherrime minister from thc new majority party or. if the pany could notew governnicmidissoIvcMhe^at Assembly and call for

three days after the motion is offered and no later than sevenlBBaaa*

Illllllllll.

hiiiiiiii

Economic Slowdown Intensifying Policy Debate

-

Recently rtlrated figure3 Indicating China's economy itwill attifutl to the alrtady contentious debate abouton tht toe of an important

The State Statistical Bureau lasl week said industrial production grew sn lessercent annual rate last month, al comparedpercent increaserowth in China's light industries reportedly fell for the first timeecade. Beijing also predicted Ibal grain production would increase lessercenton metric tons this year.illion tons shon of its ta

(Reformers probably will use the unexpectedly sharp

drop in industrial production to water down ihc proposed three-year retrenchment program thai hardliners hope to win endorsement for at the Central Committee plenum expected to conven^Nthinweeks. Beijing, apparently iv alreadycditentral Bank haspecial shon-ierni loan equivalent4 billion io help financially strapped provinces purchase the fall harvest- Beijing also has announced that bank credit issued in the fourth quarter will siirnnsstutal loans disbursed through the first nine months of ihis year.

Hardliners will use the disappointing harvest, the fifthow, to press for lighter controls in agriculture. Beijing has already prohibited all private enterprises from buying or selling grain, and, many localities may reimposc rationing for pork because rising feed costs arc forcing farmers to slaughter their livestock and are likely lo result in shortages next year..The Central Committee plenum almost certainly will endorse closing thousands of rural enterprises to free resources for struggling state factories, but Beijing will continue to face resistance from local officials in tryingarry outolicy-

.ill'

USSR: Lav. on Republic Economic AuToaomy Rejected

The Supremeejection of tbe draft law on the principle* of regional economic autonomy lan week scis back Moscow's effort to achieve agreed-upon limits to the reform of thc federal structure. Supreme Soviet deputies said the draft did noi go far enough in granting economic independence to thc republics and conflictedlhe drsfl law on Lithuanian and Estonisn economic autonomy that Ihc Supreme Soviet had already approved in principle. The Council of Ministers was told toew craft byovembei jfl0MN

Comment: The rejectedepackaged version of theprinciples published in March, would have given thccontrol over agriculture, local industry, sndMoscow would reiain control over basic industries andThe draft principles have been opposed by thewhich want full control over their economy andand have come under increasing attack fromgroups. Moscow is hesitant to makeconcessions and will find it hard to compromise. The issueauthority versus Ihe economic rights of the republics isup review ofa package of inlerrtlitrd draft laws onland use. and local

USSR: Gorbachev Resurrects Main Military Council

Ine USSR for the first time has publiclyeetingMain Military Council (MMCL It apparently has not beenNikua Khrushchev's time, when Oleg Penkovskiy referred tothc Defense Councilarty-miliiarv body thai

other senioi V) '

pany officials, andreprese ma lives of the defense industry met with President Gorbachev and senior Defense Ministry officials last week. During his visit to thc US this month. Defense Minister Yazov claimed the MMC meetsear to review the strategic dcvelopmcni of lhe armed forcevJaVsV V,

Comment Gorbachev has criticized decisionmaking underas ad hoc and not informed; he hat pledged toparticipating institutions and regularize meetings in an effortthc flow of information and ideas and to makemore innovative and comprehensive. He haslhe Defense Council, calling ii ihc ruQL'jf nationaltalcmentfbindicate themay also have been revived, if only to meetprobably intends to use suchn the armed forces, anno usee doctrinaldevise programs for the coming year. Yazov and his deputiescommanders of military districts and of groups ofjgjWcs ly among Ihc Council's mr !

5 38

.

J

In Brief

Sow* Korean ruling-party legislator, under pressure to resign for

trying to implicate "

i residentays hc gave command to Roh before

ill bolster opposition attacks on Ro Iss^'l

workers in Papua New

Gu ne. increasingly concerned'foTihcir safetylcnti( unrest rising pol.ee responsexodus would ha) important education, humaniiarian programsasfjjjflBt

- Soviet media report coal miners on strike in Arctic Vorkuia,

' orrowrnonfulfillmentwage seitlement. may not spread first testnforce new strike !a*

Several Argrntine Armenians pcacefUII in Buenos Aires ycuruiav<assBTa*aVBMsttal

criiicw Moscow, may start aati-Soviet campaign "

ndicale economy this year 5

- Partial official

n-VSgkin thirdndustrial production sputtering, inflation

growmg. tmnsportaiion proWcms especially J

- Protest marches in six Kasf German cities wererned b3

it

Special Analysis

Still Supports An! id rue

Recentccesses against the traffickers appear to be Helping itistain public support for President Par cos antinarcotlcs campaign. Nevertheless, Ihe psychological and economic costs of prolonged violence as wall as political infighting In the campaigner next year'si! continue ro test hithip

The Supreme Court's favorable decisions this month onof drug criminals and the seiaixcofibcirassetshave o*s

VThree more important traffickers were extradited to the US last week; as many as six are awaiting processing. Two others are in custody and are facing jail sewences.in^Colombia, while the manhunt for thc|adrug industry's kingpins aJtstaaaaVV" Raining momentum.

have demonstraied resiliency in the face ofiteV-Vthe public'sXZ^Aby broad media rejectiono8 lords'recent proposalruce and negotiaiioni

Problems Ahead

As the costsrolonged government offensive mount, theommitment to the antinarcotics campaign may nonetheless begin to erode. Violence by traffickers, who have recently shown less concern about killing and injuring civilians, is alreadyerious effect on tourism and nightlife in urban centers. During the past month, bombings of hanks and stores as well as threats against commercial advertisers have contributedO-percent drop nationally in retailrolonged economic downturn is certain to force some small firms out of business. The government's fiscal deficit is expected to exceedtarget even though it has cut publictL reduced scheduled raises for civil servants to finance war

Greater efforts by traffickers to intimidate the judiciary and the media may also sap the public's confidence in Bogota's ability to prevail over the drug kingpins. Thc assassinations of journalists and

0

lhc bombing* of radio and newspaper offices this week have raised fean lhal over lime may inhibit lhe circulation of independent news. The murder last weekederal magistrate in Medcllin.hree-day nationwide shutdown by court employeesocal judges to protest thcnability to protect them. vJ tBMssaVf

Barco's war on drugs will probably become the primary focusdebate as candidates stake out their positions forlegislative and presidentialajority offrom both the opposition Social Conservatives and theappear to accept Barco's antidrug stance, butmembers ofjiis^wnan accommodation ihe

A vocal minority in thc Colombian Congress, led by the Speaker of the House, has criticised Barco for his refusal to negotiate with thc traffickers, and drug penetration of the legislature willhreat to thc government's campaign.ecent effon toarco by publicizing the fact that his personal advisers had met with trafficker intermediaries does not seem to have caused significant damage lohis image, the episode underscores the wiih ngne, politicians lo exploit the narcotics issue for political gain^fl Mb*

Outlook

hostility toward the traffickers, especially leaders of the ruthless Medcllin cartel, remain* high since the assassination of presidential frontrunner Luis Carlos Galan in August, but the depth of supportrotracted struggle against thc narcotics industry is uncertain. To maintain public support over the long haul. Barco probably will need to demonstrate increasing success, including the capture and extradition of more drut lords

Paradoxically, political pressure to ease the confrontation wiih Ihc traffickers might rise if the governmeni apprehends iu major targets. Medcllin drug lords Pablo Escobar and Gonzalo Rodriguez Gacha. ln any case. Washington's progress in curbing drug trafficking and consumption in ihe US will be key factors in enabling Barco to deflect public criticism that Colombia is paying toorice. lniapiscwUlimbjj^ivicwcd hy manyoreignw

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