NATIONAL INTELLIGENCE DAILY FOR TUESDAY, 29 NOVEMBER 1988

Created: 11/29/1988

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CoMents

USSR: Central CommitiM Advances Parly

Central America: Eflorla To Revive Peace

Vugoalovia: Adopting Constitutional

Thailand-China: Military Roiatiom Expanding

Notes

South Korea: Opposition Maintains

Lebanon: Shia Infighting

Iran: C'erics

OPEC: New Production Agreemen!

Paro: economy MMsrrsV Resigns at Weakening or

Afghanistan: Seesawo for Towr

Afghanistan: Possible Mombera of Interim

EC-US: Growing Dispute Over US Meal

Cosla Rica-Nicaragua: Agreement fo Pairol

In Hi.-'

Analyses

International: Increaso In Palestinian

Peru: Antidrug Progress Will Be Difficult To

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Committee Advance* Party Ratcm

The Soviet parly Central Committee yesterday -polled out the role ol the alx party commission* created In September and namo-t memberships

ThoA(*rorrimiS6lons. each withoembers drown from the Central Commit lee or Ihe Central Auditing Commission, will meet al least once every Quarter and will be responsible lor drafting policy papers for the Pobtburo tsssssaasi

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As scheduled, this plenary meeting ol tha Central Committee also approved revised legislative drafts to be submitted to today's Supreme Soviet session. It heard reports from General Secretary Gorbachev on pofctKal restructuring and horn Premier Ryxhkov outlining on economic plan lor the pertodheeats ol the Gorbachev and Ryihkov speeches were not immediately available but me to On published, possibly today. fM/JfJ/t

The participants did not directly address Ihe problem of interethnlc relations but noied that preparations should be Intensifieduture Control Committee meeting on thai Issue. The Central Committee did expel throe ol itshad boon Indicted lormode no Politburo-level personnelays^M

IThe six commissions in effect supersede thehad been managed by "Second Secretary" Lkgachev. andGorbachev shift authority from the Central Committeeelected party officials. Tne commissions genarasy involvefobs functional^ relevantomrrMsaion's task and appear3

ix of reformist and conservative vews. SsssBsV

Gorbachev neverthclcss has prominent supporters on eachmay be able to manipulate the new strucium mare

lhan ho has hsyidled Ibe Secretariat 1

A Mr. RICA:

To Revive Peace Accord

Cost* Ilea's proposalN-supervlted verification team mar bo endorsee! by trie region's foreign ministers when they meet tomorrow in Metlco Clt)

and Nicaragua view thoican proposal positively; il calls 'or aol Canada, West Germany, Spain.

and one Latin

country -

verily tlie movements ol

an and N

Inaur

along Honduras'* borders

1 * ij_ 1- 4 . t

oonainisias navesu

ptan will nelp Honduras rid itsair

the Nicaraguan

pressure on Managua lo

with Prcsit

plan.n also requires

to drop

World Cowr

case against Honduras and lo

tii will be s*

lowevcr. *in accept ine concessions on Ihe suit.

and Guatemalahis week and lhat the accord acratary General

the UN

if asked, according lo lha Embassy

would have lo consider the plan II all live Central American countriesormal request.

TThe Cosla Rlcans view the meeting tomorrow as an opportunity to movo the Anas plan forward. Tegucigalpa apparently wants'lo prevent Ihe Nicaraguan rebels tromolilical issue in Honduras'* presidential campaign, which begins on Sunday and9 Managua probably views the iiiitlalfveay to improve ils tarnished niernabonalandevice loIhe rebels further. The Sandinistas may insist that Ihe Central American democracies pros* Washington toTTokf :aks with Managua as part of tneir prrie Uw accepting tne Costa Rican plan BBSaaaaat

Adoption ol Ihe plan would put ine onus on the verification commission to plan the detail* of US activities. Implementation ollan, however, probably would requrre approval by Ihe Central American presidents, and they are noi likely to meet this year .aaaaameg

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Yugoslavia

Threats To Reform Effort*

Af factors might slow political or economic reform in the coming months. The greatest danger would come from new challenges to the poiliicai order by Sertxan leader Milosevic, major labor and oonsumei unrest due IO oust artyise in ethnic Albanian unrest In Kosovo Province,ew ftareup o' tension between the Slovenes and. Such unrest could portend:

Return ro Greater Repression Maior ethnic or labor unrest might strengthenand ol ccnservative nationalnd those in the mostly southern region wrvo are more concerned witn order and stabikty than with reform. These leaders probably would try lo reverse progress on political and economic liberatirat-on. at least until they were more conlident ofilly to keep order.

SarDtanerbia's Milosevic may Still try to manipulate popular dissatisfaction and renew Serb demonstration* to tiy to unseal federal leaders and to Increase his own and Serbian Influenceove might stimulate nationalist tendencies among other elhnic groups, particularly Albanians. Slovenes. Bosnian Muslims, and Croats. Milosevic probnbly would respond to such resistance by Increasing police measures and. despite his roform rhetoric, returning to greater central conhot of thc economy.

fragirtonte-ion. Although unlikely, growing ethnic disputes sucn as those fueled by Milosevic might begin to undermine seriously the unity Ol Ihe national leadership and the Army. Bitter conflicts might then ensue between the liberally oriented northern republics of Slovenia and Croatia and Ihe federal government, leading to much greater isolation of these regions and. eventually,plit In the country along north-south

TVDSS

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Adopting Constitution til Amendments

The constitutional amendments Belgrade intends to enact today probably will advance economic and polilical reforms, but new threats to stability might slow or reverse the liberalisation process.

amendments, although extensive, will boong process ol review and approval by Iheregions. They dismantle pan or tho Titosystem andreateror marhot forces.remove constitutional obstacles to liberalised laws ondomestic Investment, market-oriented allocation ofthe creation ol bond and securities markets, priceprivate business. The reforms provide lor the right loiter prisesncrease eH clancy,gftml

Interference in the financial community by Increasing the regulatoryf thc national bank flB

On the political side, tho amendments encourage elements of Western-style democracy while leavingominal one-party alms. They stipulate multlcandldatc elections by aocret ballol for many pailyand governmeni posts, although lhe parly will still control nominations. They strengthen the authority of the Federal Assembly over the collective federul presidency. Semiofficial organizations like trade unions and the Socialist Alliance, an umbrella social organization, would become more autonomous and wou'd have the right to contest government and party poi-cies trnXK-fPrn

wis pass neededconst Hut lonal char entkery new constl begin within Ihe n, is likely lo change government bodie:

steps toward democratization and Implementation ol lM<-supporied economic measures are intendedromote longer term stability by stimulating sustained economic growth ana by strengthening the responsiveness ol governmeni Institutions. Tha political reforms probably will be more vigorously implemenlod than the economic oijjs. Even with such relorms, Yugoslavia will face decades of serious ethnic, economic, and politicalJ

heoaoy snt the most importantebate on an rven moro liberal probably will atlonal party congress0 JOB lurlher party oversight ol

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itary Relations Expanding

Chav"'"ther ma/or arm, tool

^olllLJl lo he encoureuing

orce end Navy to buy more Chinese equlpment.onoe^0

eS",cmenl ,orhinese main battlewalso bought

T?tBa'e' alrcralt and submarines would mark

with Thailand, which has

reMed almost exclusively on ihe US to. combat aircraft.ong proponenl of closer military lies to China-appears to be pushingurchase because of low coal and thefl- aespitc the past reservations of Thai pilots 3Dou! 'heuality. Faced with reduced US miliiary

will concur with Chavalit'

rec ornm end a' i

esire iots sources of militaryprobaWy cast ihe initial deliveryeserve stockpilepans toariay concerns from its allies in Ihe Association of -Asian Nations as well as conservatrv^Thalgrowing miliiary refaiions wiih

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SOUTH KOREA: Opposition Maintains Pressure

lenders nave rejected President Roh's call lor South Koreans to forgive former President Chun for his confessed misdeeds, insisting Chun testify next montharliamentary panel conducting hearings on tha Kwangju incident and on Chun-era corruption. Potla taken this wee* abdicateajority ol Sou* Koreans support further invest Igat Ion ol Chun's actions but not hre prosecution BBBaBBBBBS^HPJjBBBaBaaalijBBsl Rohreorganizearly as this weekend, replacing all ministers flrsl appointed by Chun and removing Chun loyalists from the party leadership'.

I Tho opposition ts unsaaly to drop its Investigation Oly the hearings. Oppowon issue alive will undermine Ron's eflorl lo pul the mailer behind him by yearend. Roh may again appeal directly lo the poop.e. warning that prolonged hearings and radical violence might endanger his domocretr-at.cn nlforta. He may also try to provo hla commltmenl lo reform by selecting some cabinet mlnlslers from the opooslHon or possiblyivilian as defense minister.

1 MS

Shia milllia appea recent intern* Lohtino in

LEBANON: Shia Infighting Stalamoted

havo gains

eaci Deir con

advantage In tho led In more than Mi. as ot Sunday gnout West eponediy a'*

|The lackcar-cul victor orefloud separation ol forces manes moro fighting lately. Hb-baHah has been unoxpeciodiy strong outside Its bastion In Ihe southern suburbs and Is not likely to give up newly won territory easily. Damascus is probably embarrassed by the outbreak of fighting in areas ostensibly under its control and win continue to press both sides toward the negotiating fable. Tho Syrian troop convoys could benforcements or merelyew weeks hi aov-nce of the normal rotation

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erka Executed

Irartan Government yesterday reported theof sr. Oerics and three ol their lay associates on corruption charges, intelligence Minister Mohammadl-Reyahahri said ihey had been iimnied some limn ago bui were only recently tried.

(The acts for which Ihe Clerics wore executed probatory occurred months ago. but their executions now appear lo be Clearly inlendcd ioessage to those who opposo the dominant coalition that Assembly Speakor .Ufaatnlanl leads. Radical Iranians, including Interior Minister Mohtasheml-Pur and some Revolutionary Guard commanders, have grown more aggressive recently In their aitomprs lo urKjermlrveore pregmnilc foreignhree Clerics may not have been as ciose lobut the similarity of thoilt WW most Iranians lolink the two cases, reinforcing iho pubHc Impression that Moniaierl Iselfecifve leader who cannot control his own entourage 1

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w Production Agreement Signed

OPEC member* yesterdayew six-monih agreement on dude oil productionSaudi Arabia withdrew its last-mtnula proposal lo have members activelyer-barrel floor price. Accoiding to the official communique. OPECew production collingS million barrels por day for tha flrsl halfbove Ihe existing unofficial celling. The cartel alsoonitoring committee lo supervise adherence lo the new quotas Tha Oil market was not Impressed by thn accord: spot prices for most crudes have remained unchangedfter

rising throughouthe OPEC meet>ngi

r*>3 major cverp'oducers. Saudi Arabia. Ku-i; and Ihe

UAE. muEl cul outputotaln January totheir new quotas Saudi Arabia's Inability to getper-barrel floor price suggests that other OPEC countriesdetailed accountability and that Riyadh may quicklyquota If sustained overproduction by other membersThe UAE oil minister's conlention after the meetingUAE's new quota was not offfctar may also portendUr-css Person Gull countries cur;all output, oa

prices w- tai sharply by

PERU: Economy Minister Resigns at Weakening ol Program

Economy and finance Minister Salinas resigned over theeconomic program he had

announced several day* earner was weakened at Presidentnsistence. Last week Deputy Minute- Abugattas quit after Oarcla's decision to dilute the new economic package by pub*cty rafeeUng automatic exchange rate anddjustments. Salinas hat been replaced by CsiaO* Hivas from the party's left wing. Rivai

It by noting that and the World Uanh

the eeenomic program Minister Vitlanueva ia iied with thn hnip of the

Both Salinas and Abugaitas had the respect of ihe international financial comrnunity. and their departures probably wul jeopardise proa pec it fo> an agreement with the IMF and lhe Wo. id Bank. The chancas of implementing needed domestic economic reforms are Bkely to diminish with Rivat as Garcia's key economic adviser. Garcia may aeue on Viitanueva's statement linking the IMP to ihonew package to blame the dnvnioped countries for Peru's deteriorating economy.j

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AFGHANISTAN: Soeaa* Battle for Towr Khem

insurgent for cos Usi weak ihetime tm

r Kabul win prooabfy send additional ground forces backed By Sovtei airpo-er lo recapture Towr Kham because ol Its importance In slowing the Insurgent advance on the strategic city ol Jalalabad. Towr Kham may eachongo handa several times before the Insurgents have enough strength to hold It permanently. Insurgent success at Towr Kham and other outposts defending the highway and Jalalabad will depend primarily on regime defections rather than outright military victories. Insurgent lenloncy towardnu .rhor Prnvl-ge/

63

AFGHANISTAN: Poasibl* Members of Interim Government

ssssssBS^*v^ mis

candldatns ihot may be used inew Afghan government. One list olames was drawn up by Alghan Prime Minister Sharq, and irm other ofames had been complied earlier by former UN envoy Oiogo Ujjrdovoa Members selected from thathey are acceptable to abbe asked tomall roup of wlsenw. which wouldrecu'seMo'a national council

the res Is!se theseutually ai current prop

are rainy moderate, mostly nenl: many openly side with groups might be wining to th the regime to develop iwork of Ihe reslstoi

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ovember

EC-US: Crowing Diapule Over US Meal Exports

The EC mem be' nates claim ihey do not want titer Community's plan to ban US hoimcne-treated meatanuary to leadrade war. but they nonetheless are preparing for such an eventuality After the US refected an EC proposalmpt US pet lood exports and ma/ease the Quota forgr>-qua illy beet. EC loreign ministers CnStsPed lo protest in ihe GATT rorum about potential US retaliation.ey also directed trie p'eparationisl Ol possible counter retaliatory measures Cornprotem-ftch

corn by(xi target ol s

nont

ha

here Is only brrvted

with the US. but ihey probably will find it dll compromise Quickly, making unlikely maior periphery olecemberlnlstehe EC 'or such options as delaying tne ban. o'leri compensation, or agreeing to binding arbitration by GATT

RICA-NICARAGUA: Agreement To Palrol Border

San Jose and Managua last week agreed to cooperate in repatriating Nicaraguam who do not meet International enter wj lor refugee status and to establish Joint border pafo't to stop smugghng and drug tralficklng. Under the agreement. MO Ntearaguana will be returned home today with the help ol the UN. and luture transfers will be arranged by the two government

radlobr< San Jos

illingness io deal with Managua rolled* its growing tear ol bemg Overwneiineo by Nicaraguan relugees: CIS refugee camps are already full and its aid resources strained to the limit. San Jose probably believes that making the UNhird party In Ih* arrangement to return relugees will soften any international criticism For Managua, tho agreementrecedent for cooperaiion In borderdetails remain to be workedthat tho Sandinistas could use in luture talks with Honduras.

9 n

SoAt defense atta

discussed return ol Sovte publicized meeting. talks on coeso-Ilre, political

luggosts lalks limitedomenloon

Afghan resistance today reports Insurgent leader Rabbani will meet with Soviet Ambassador Vorontsov ln Saudi Arabiaalks kKery to beoviets wani agrrxrnent io facilitate ea'e withdrawal ot their troops^

Nicaragua laal week devalued currencyercent, sharply raised luelfficial dollar rate.ordobas In February when monetary reforms bogan.lack-market rata.n February, surging ahead,aaj^?,

^BsiiMLIiiMaBBMnBBBBaViBas>Cuban President Castro lo attend Inauguration of Carlos Salinast Ecuadorian President Borfa's inauguration lastatest allort to expand Latin contacts, reduce regional Isolation.yZ,

-mandated cutbacks ln__

miliiary spending likely lo undermine support "for Prosldenl Babanglda among key backnn aBBBBaa ^

Philippine Senate last week voted to hnut paymenttillion

forekjn debt toercent ol merchandise. would cut payments In half.ouse version probably would allow

Novamoer 1

4

Special Analysin

Increase in Palestinian Terrortsm

terrorism Is likely to Increaseaiulf ot thm US denial ol PLO Chmtrman Aratata reaummlise lo oddrett rft* UN and recent dec/sfons br thm Pelestlne Notional Council. ArelaaJMrnsell will probably not encourage attacks outside Israml and tha occupied territories but will try to be seenorce ol moderation In the hope ofositive reception tram the new US administration.

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before ino decision on Arafat's visa, Palest inianjaeliona oulsn lhe PLO umbrellaf

The vie* denial probably will only add Impetus to thesebe used as jusancaiion trx antl-US or anil-Western attacksprocd met US ana Israeli recalcitrance dooms anyto failure.

Terror! likely to Int threatened announced President; mat group carried Out

Pafesllolan factions based In Damascus publicly condemned (ne PNC's actions. Syria may encourage selective terroristpossibly Including some outside the Middlethe hope ol disruption PLO Init

faction against another ere icllons haveroup, forimuaxio that of Egyptian'" from We PNC may also cause rivalhad not

ssassination mil-Palestinian attack since late IMS

strong base of support among Arab states and in the occupied territories will help him contain hardline drssent wrihm the PLO during lha next severaluccessful lerrorlsi operation In Western Europe, however, would almost certainly erode international Support and encourngo'PLO hardlinera to break ranks. Unless Arafat can show hardlinera the PLO has aignlficantly Improved Its diplomatic position, beyond uie Arab world, ha Is likely to face an especially.niund of internal PLO bickering. tssBBSBasBBBBSBSBBBBsBssnas*

13

Special Analysis

rn Difficult Io Sustain

Garcia povernmonfs propres* on narcoi.es eracffCaffon and Interdiction etlortt ia being hamperedby increasing violence agalniLPeruvlan antlnareotlg worker, end by growing economic end pontic el constraints tssssaaV .

he

lhemonlh-oiiJeradication campaign in the upper Huallagawot Ids largest cocaproduciogncmnntonv aaBBBBaSkaHaBBiBBBBBBBBaaBBBBBX workers ulintiew culling technique li.wn ii.-vjiI/ oradwatad moreectares o( coca this year, as comparedectareshe new technique, however, wit coca plants to return to full yield Ino'lS montr't

Success o( the campaign has provoked growing violence against animarcoltcs forces in tne valley During recent months. US-supportea aniinarcot.es ekamenrs nave encountered unprecedented opposition Irom mobs rano.ng0ersons, some arman with guniano machete

and Polilical Constraints

Peru's rapKJiy deterioratingannual rate of inflation may soontesr the government's wi'tinq-ess to ali oca te <

sen Oil production drops, or II the Air lerrying oil to the Vaney.ht be more frequent groundings of Peru's overused helicopters, further limiting interdiction and eradication

n teawtarem taaa

Political considerations also may be weakening Lima's resolve on the etadlcallon issue

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Washington >m< de^cloo1

Uma'o rei

and Cong be cui ba>

-ongbme point man loi antidrugr control ot narcotica matters to Interior Mir

respond rapidly to ids in tbe Valleyeruvian cabinet on campaigns may not augmented by

teriorcently banded over Iter Sorts.

corruption continues to spiead and. it left unchecked, may signllicantly blunt tne effect of more substantial amounts of assistance to antlnarcottcs

Outlook

ingrt *

maintrong public Ihe US on the narcotics Issues would

POPurisI power

increased US development assistance may temporarilyhe position Of antidrug proponent* and in tbe Short run undercut criticism of eradication and Interdiction efforts. For the remalnlronths of Garcia'* term, however, counternarcottcs almost certainty wiaackseat to what are perceived In Lima as more/ pressing economic and political issues. Mailing Peru's economic slide Is likely to be the government's major preoccupation, and Garcia will locus on trying to reestablish cool

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