NATIONAL INTELLIGENCE DAILY FOR 7 MAY 1988

Created: 5/7/1988

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.eey Pror. Hollow

ar have won If gambit lhal Iht shlpyerd suike ltd bf Solidariiy would and without lurthtr uat ol lone, but-ita Mw ban on protests will ertata an Increasingly repressive atmosphere and nagata whatever good will tha regime haa builtit. Intolerance ol tlreet demonstrations over tha past year.

tho Gdansk shipyard strike la

breaking up. Strikers apparently are bong allowed lo slip away from the, plan! through lha police cordon. News ol Ine Nowa Muta raid already had whittled lha number of strikers al Gdansk to perhaps as lew. and tha not police had succsgshjiry cut tha strikers' access to lood and supplies. |

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the Nowa Muta steel complex near Krakow, atrlke orgentteraescaped ihe raid there on Thursday called for thai strike to continue, morehird of the work lore* reportedly stayed home yeslerrjay but the plan! slowly roslored most operations.^Basssfc

The government yesterday announced plans toedal powers to ban sirikos and other forma of protest until the end of this year, prompting, oven the official Irade unions lo blast tho regime for Infringing on their rights and to- disregarding "warning signals" leading up to Ihe current unrest. Meanwhile, the church crttlciwd lhe regime's decision to use force to break up the strike ai Nowaiving church-backed mediationhance to suooaed

"The regime wmIts relations with the church severely damagedesult ot its harsh tactics in dealing with the strikes The church feels II has beenaughingstock by the govemmenl's raid on Nowa Hula aher lhe arrryai.pt church mediate

la unlikely logt .

jr credence to the roglme's avowed stratogy of making good church-state relations the cornerstone ot efforts to broaden ItaJ

The failure of Polish workers lo rally behind ihe besWged elrtkera damages the prostlgo of both Solidarity and Lech Walesa, who had become the symbolic leaderonfrontation he originally refused to lead. Solidarity may now be seen as having latchedauto that started without It and as having failed to deliver promised sympathy strikes In sevoral cities hi support of the Gdansk and Nowa Huta workers. Solidarity, moreover, is likely to be blamed for Infecting pClncal tJgHianas when workers mainly were seeking pay hikes.

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LEBANON; Amal Spanmi) Willi Hiiballah

ul press reports say ihi Iranian

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Heavy iiCui,nuupioil boiwecn Shea flioups Inane oloulhorn suburbs -Hayy Medi. Btr af Abld and Harai Hunyk.

.mbessy In Beirut Is Irykifl loeas^fkc

c*mm.nl Am*'by lis recent victoriesinobar.cn and may be eaoer tc Coniinue lhetheuburb! ol the capital dospite^aftofli of aperformance. Them Is no indication as ytn. trial theare the elanustained campaign by either side, bul lheIntensify. Backlnnwould prcvlCo Amalliiopowor and communications support II currentlyhowever, is unlikely to be drawn Into ihe fiphtina or tosupport lo Its ally Amal.

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EC: Uberallilng Capital Flow.

EC llriancanext week probably will clear moat of the obstacle*to llberallxlng copltal llpws,wffhln the Community. Membersagree bete

Junechedule lor Implomenllng gpecllic measuresnd some of the members with less-developed financial markets are seeking tho ability to relmposo controls on short-term capitalIn tho eventubstantiallthoughdropped ita Inals arovislon

mover safeguards probablywlll not delay agreement past the EC summit next monthflJMBHI others almost certainly will demand strict conditions but. for the sake of unanimity will allow some countries to delay compliance. Ihis part of the EC financial integration program Is unlikely to create protectionist

barriers against OS firms because'

commitments to nondlscrimlnatli

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Brief

Tensions high between LiMmm Army. Chnslian Lebanese Forces mlHtle .rmy commander's presidential aspirations, mjtiiia's distrust ol Army expansion ol checkpoints exacerbating dispute President Gemayel irytng to defusess%a>

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Veman President Saiih ^

robably discussed recent Norlh Yemen-South Yemen border agreement ikely lo haw protestedm% pporl IMBV order

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Nlcaraguan union acilvisisday hunger strike Thurndny aherManagva ag<eed to discuss labor demands aatsafJMaMaaeW IWlidetained opposition leaden released, mrjdrestrictions relaxedegime frying lo appear flexible to ease labor

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South Korean President Ron Tee Woo loday replaced his Home Minister and Intelligence chief oth were holdovers from Chun administration removal had been expected since National Assembly election late last month^jBfcfc

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China lo subs-due rising urban foodHUrft aome rationing, price controls im piemen tat.on. modest see* Ol subsidies suggest additional measures possible If inflation further threatens living standards ftaMat ^

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Bulgarian-Turkish wo'fclng groups will hold first meetings Monday .. to discuss Bulgarian treatment of elhnlc Turks, economic end polilicalrade protocol, family reunification may res.ppression of Turkish minority sure lo continue. JHilJl D

Special Analysis

on Track Da .pit.oocrn

Ecuadorians go lo the polln tomorrow ro choose between social dtmoccsto Borye and populut llrobtmrtd Abdala Bvcsrmmresiaenllsi alec fionhreatens to bring the military back Into tunning thm government tot theeB. Tho military would probablyictory by Bor/e. who faahead In thm polls, but coup plotting almostntensity It Bucaram, whom tha armed tones detests, wins.

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Surprising second-place finish In lhe flrsl round In January alarmed most military leaders, who regard him as unpredictable, irrational,hreat lo Iheir institutional interests Bucaram added lo their concerns during (he three-month nmoh campaign period by prorglsing amnesty to imprisoned Air Force mutineers, pubhcty satirizing key msHlary oMtciels. and repeatedly pledging to clean uped services^

ill probably deteet hla opponentlose race but notes lhal Ecuadorian polls lend lo underrepresent voters from the lower classes, mosl of whom are likely to favor

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violence If he losesmalltrong lower class turnout. however, could swing the election to Bucaram. which might compel military tactions to coalesceoup leader

A win by Borja. on lhe other hand, would probably resultmooth transition of power when President Febres Cordero'S termugust. Military leaders, although suspicious of Boris* leftist views, cteaity see him as the lesser o' two evils and reportedly are resigned to work with him II he Is elected. Borja. for his part, has taken care to persuade,military leaders that he wBI safeguard their interests.

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Special Analysis

Ruling-Party Support

gglme't pursuitease-fire agreement ano* fts racant reforms designed to item Mlcaregva'a aplrallng Inflation hawa relied concern among party loyalists that their Intereits are being neglected. Tho Sandinistas hava to 1ar deflected moat negative crltlclam and an taking atepe to atreftgthon tha rulinguthority, bui serious challenges lie ahead. Inducing Ihe rebel* to abandon tha war would ghra the Sandinistas breathing room to repelr much ot Ilia damage to tha party. RjVVsV. jj jgj

The Sandinistas have consistently tried to protect their supporters

ol Nicaragua's sleep economic slide.fasBSsjasMlSBfo)

'members ot the SandlnuMa party and its affiliated mass organizations have long enjoyed privileges thai at least partially isolate them from the shortages other Ntca/aguans are experiencing. Party faithful also have had preferential access to |obs. schooling, and other cervices M

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Recent eftorts to control Inflation, however have hit SandjnHIa

political supporters' pocketpj^HbVMSMsbsVAb^VAbRjIbbT

government spending cuts eliminated the |oba of thousands of state orkers, many of them members o' Sandtnlsla mass organizations. More layoffs are planned. Pending reductions In agricultural credits will deny loyalists In rural area* financing for seed andownward revision of wage scales In February has also Increased frustration among key pro-Sandinlsta labor unions. Several Sandlnlsla-controiled locals In Managua briefly went on strike, and the large teachers union Is protesting recent layoffs. ttMftf

Cease-fire negotiations with the^rebglsjjreaddlng tgjhe uncertainties

after years of promises that the Sandinistas would never talk withebels, party loyalists are worried that the revolution will be betrayed. President Ortega has publicly admitted that many party members

amnesly lor lormor national guardsmen who served Somoza.

^ooose

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Minimizing Grievances

Other than labor strikes. Ihere have been few public expressions of discontent among lhe party faithful. To help forestall problems. Ihe Sandinistas have guaranteed fur toughed state workers employment on cotton and coflee cooperativesbeck to the land" drive. Workers lorced out ol thehundred at most thus far-have not organized or caused problems for the Sandinistas. By agreeing to discuss worker grievances, the regime has tried to undercut efforts by independent unions io capitalize on labor unrest.

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Managua is portraying direct talks with Ihe 'ebelsogical response In dealingefeated force Sandtnfete-coni roiled mtOut continue to drrve home thai pom I. pamtmg rebel mrWary Chief Bermudez as the major obstacle to peace and highlighting tha willingness of some rebel Held commanders lo negotiate directly whh the government. The regime has stressed Ihat social changes wrought by the revolution. Including land celorm. are irreversible.

Bolstering Party Authority

The Sandinistas are taking stepstoreboth ideological zeal*gj

confidence in art)

use of regime-controlled mobslargely Irom party loyalistsdemonstrates to the rank and file that there are Hmlts lo the regime's lO+erance of dissident acirvity flPR

Simultaneously, the Sandinistas are trying to revitalize key mesa organizations Manage recently tapped Omaropular revolutionary figure with dose lies to In tenor Minister Tomes Borge. to head lhe large network of Sandlnlsta Defense Committees The replacement of the mayor of Managua and the chief of the party's agitation and propaganda department appears aimed at ensuring that the party loses no ground lo the opposition under the terms of the EsqulpulssV K

Prospects

The Sendmlslee probably wai continue loine line between dealing with growing party concerns and doingecessary to revive the economy end lo induce the rebels to abandon their military struggle Managua's tough economic reforms suggest Ihe Sandinistas are prepared temporarily tohrinking constituency lo restore the economy. To entice the rebels to disarm and Join the national dialogue, ihe Sandinistas may also follow through on earlier hints Ihat Ihey would consider military reforms and local elections this year. An end to Ihe flQhltng might provide breathing room for lhe regime by allowing.jhe Sandinistas to divert resources from the militaryJ

Nevertheless, the Sandinistas will closely monitor party attitudes and may reestablish some perquisites for party membersal the cost of stgnfficantlyhe regime's popular base threaten serious damage to their political control. The regime also would not be fckety to pursue theasty if popu'ar Gissaiis'action with IIP

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