NATIONAL INTELLIGENCE DAILY FOR 11 MAY 1988

Created: 5/11/1988

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Contents

ituationGull: SituationStrike Ends

Ecuador: Boris's Foreign Policy Views

USSR: Gorbachev Scores Opponents of Reform

USSR:-Opposition Party an Awkward Problem for Gorbachev

Notes

Latest Cease-Fire Breaks Oown In West Beirut Israel-Lebanon: Military Opefallon In

Dan mark: Election Strengthens NATO Proponents Sri Lanka: SlriTtakise Marxist Insurgents Sign Accord

Argentina: Allonsin Visits China China: Reconsidering Price Reform

In Brief

Special Analysis

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Winning Propaganda War

Is skillfully combining his control o( Panamanian media with effective propaganda bothahy popular suppori tor his remaining irijtnwer. and to provoke anil-US sentimentaSaMatt^sssssBlBlf

The regime Is using its complete control over local newspapers to plant false kitormaiion. suchatanamanians to be -executed by US-sponsored deathnd has harassed journalists, closed down radio stations, and apparentlyelevision station to stifle other sources ol objective reporting. Only lhe US armed torces media network remains

'Cte.d. Partlya result of the propaganda campaign.aMU

tM^nossmen now believe irftTUS is trying to deslroy their companies;

Meanwhile, some members o' the ruling Democratic Revotulionary Party believe that Noriega -who has successfully portrayed himself as Panama's David hgntmp, theiable candidate lor president.'

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Secret

End*

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Tii' end of fimmn Gdansk will probably deluse the unrest In Poland, but It laavaa tho koyregime. Solidarity, end thm^petholtcweaker end lacing new politicalhe summer. staasstsV,

government

gesture bT contempt" for the regime, the stfTVUrs at Gdansklhalf eight-day strike las! night without accepling any

concessions.

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strikers at Gdansk had tell Increasingly Isolated as Solidarity leader Lech Walesa's calls for nationwide sympathy strikes (ailed to generale new activity since the short-lived Ursus Tractor Factory strike on Monday, in addition, chgrch negotiators reportedly had urged Walesa toompromise to end the strlko asassasV

aaaasssHsaaBt peaceful end of the strike will not sparedifficult summer as lhe regime. Solidarity and the church reevaluate their positions Polish leader Jaruzelskl can take comfort Irom having contained tho unrest through the adroit use of force, conciliation, and manipulation, but the regime also has suffered some serious setbacks. Jaruielski's position has been damaged, and doubts over his ability lo deal with Poland's problems will reamer g* wttnin the parly. Tho regime also needs'to salvage Its economic reform program, if only to keep alive diminished hopes for IMF assistance, and II must avoid provoking further unrest in an atmosphere of increased dlsirustAeJflHhf.

Walesa and*llio other Solidarity leaders will claim thai Iho strikes showed workers' willingness to challenge the regime and take up political causes. They must deal, however, with the lack of labor support for 1he strikes and must Integrate the new generation of labor leaders who surfaced In lhe strikes. Younger workers proved to bo more radical then most Solidarity veterans, snd Walesa must moderate such youthful militancy If he isresent Solidarity and himself as acceptable Interlocutors tor the authorities oobbk

The church will be pleased that lhe Gdansk strike waSTosolved withou- hioodshed, bul lis leaders were embarrassed and angered by the regime's manipulation of their role at Ncwa Hut a. The church must also decide whether it was wise to Intervene openly during the crisis and whether to increase Its efforts loe jeglmo and workera together during periods ol relative calm.

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Botjo'e Foreign Poller Views

Borfas public backingougher stance In negotiations with foreign creditors reflects hla Intention to move Ecuador's Iprelgn policy towsrd the lelt when he takes ottlc* In AJgutt. tflU

ommarclal banks nlh. He claims the ion. which has

luluillion debt, he

arguing that as a

taoliato Ecuado nong Latin deQt

Bcia told the press0 million dcbi-reschec thai President Febres Coi accord Ignores Ecuador'i deteriorated becauso ol l< indicated he Is willingas called lor cooper ot lor

g'Oup they can press International creditors tor better terms.'

as repeatedly criticized Febres Corderos close ties to Washington and has said he win buroreign pokey oriented more toward the Third World. He has pledged to reestablish relations with Nicaragua, which Febres Cordero brokeorja's advisers, however, have expressed support (or Quito's lough stance against narcotics trafficking.

tThe President-elect's rejection ol Ecuador's debt agreement probably dooms the accord. II has already been troubled by disputes over terms within Febres Cordoro'e economic team, and Borja almost certainly will repudiate any agreement signed during the remaining month* ol Fobrea Cordero'-j

in addition to reestablishing ties to Nicaragua. Borja is ukeiy to follow other South American leaders In improving relations wtth Cuba. To demonstrate his independence Irom Washington, he may also seek admission to the Group ofCnntadora Four plus lour South American democracies

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Gorbachev S< pponent, of Reform

8cnoviet madia officiate publishedSecretary Gorbachev criticized top officialsapparent allusion to partyvigorously reaffirmed thelo continuing the reform process.,

Saturday, with Ugachev In attendance. Gorbachev said "some people have_faiied to Keep iheir heads" in the face of difficulties in imDlemenllno reform and have wrongly concluded that reform Is

destabilizing" Sov*st society. Gorbachev said this confusion over peresfroyfce had affected the country "not only at the ground level but also on thee urged the media to "support everything thatiscussing reform. At the same time, he warned against brandingthose wiih honest doubts as "enemies of'tsBBsssfr

Meanwhile. Llgechev continues to carryormal routine In public. Besides appearing at tho media conference Saturday with the rest of the Secretariat, he saw President Gromyko offomania yesterday, and last weekisitoscow publishing house together with Moscow party 'cader Zaykov.aSHL

Llgacnov would show up at various functions but" insistedtatus had been reduced and ihat his future was Instale radioandtelevisioni

longer repocj, to Ugachev. <|

(Gorbachevs assertive speech ia another indication that he currently has the upper hand in the struggle wtth party conserveti.ee Ugachev's presence, and Gorbachev's admonition against using theenemy" Label, were probably Intended to showwtth the US-Soviet summit approachmg-and to reassure moderates thai tnereoom in inp party for diverse views.

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Ugachev's position as "second secretary" may notdespite hrs continued routine public activities. Sovietremain sctlvo until formal action Is taken to removethem. Tho struggle over reform Is sharpening, andthe conservative views ot Ugachev dominate thosupporting conservative Ideas are being overwhelmedarticles and discussions-many of them mHitantlyopenly hostile to the forces ol the party ooDaratus thatmain base of(3)

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ly an Awkward Problem if Gorbachev

4 eomllllon ol dissident endnfi-party-he* ov^sXld

perllclpeuon without alarming parly conservatlvi

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e* ol unofficial groups Iromoviet cities melover the weekend lo organize ihe Democratic Uniontora muitrpariy system, freeree press,trade unions. On Sunday, pokceosi were later released, and on Monday policegathering ol the new parly's leaders at the independentand MlM Us editor. Sergey Grfgoryants. and three(3j

openly preseniing ihemselves as an alternative

IZTunlsf Party's polilical monopoly

have sprung up in lhe pssi twoemocratic Union He ffl. more serious threal than lhe small and isolatedoppos-tion

ans ftWSS

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vclously attacked in January and .hen forced into exile or conscripted

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Oespile etlorts to head off the crealion of this particular party, the regime has tolerated the broader activities of unofficial groups. Speaking in Tashkent last month. Gorbachev said ine sudden Increaso in informal groups has occurred because "people are not satisfied with the activity ot existingncluding the Commumsl Party Me hat caned lor greater citizen participation In political life under the banner olluralMaaV

While Gorbachev may uttfmatety use lhehallenge lo argueeformed and more democratic Communist Party, he must bo careful his encouragement of political Initiative Is not used as amrnuniliun'by conservat ves io show that hh> po'tcieshreat to Ihe stability of the system The formation of alternativelo the limited degree that they exist in Easternmeet overwhelming opposition within the party The harassment of the delegates suggests that even Gorbachev and those pushing lor greater public participation are noi prepared to occepl an open

an avowedly loyalto one-party rule.

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Lateel Ceoso-tire Break! Down in Weal Beirut

The ninth cease-fire lince Friday between pro-Syrian Amal andHizballah militiamen collapsed last night. The cease-firethe deployment into the battle zone yesterday of sixtees comprising representatives of the two organizationsas the Iranian Embassy *ni rrw>

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rH The failure of ihe latest cease-fire plan will Increase the pressure on Syrio to respond forcefully. The Syrmns reiterated yesterday thai they win intervene rf the hghtmg does not stop. Syriany is pariKuUrty al risk because of the Lebanese presidential election due hVs summer, and Damascus may nowimitedot indirect military pressure on Mizbaliahl

Top ^fecrol

ISRAEL-LEBANON: Military Operation in Retrospect

Israel's sweep operaiion In southern Lebanon last week has not deterred terrorist attacks by Hizballah and radical Palestinians

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HiZbal.jH nr.

Hizballah- 'nevertheless claimedocket attack on northern Israel Friday morning showed the sweepallure. Last Sunday, the press reportedizballah fighters returned to Maydun. which tho grouDeclaimed had againau_for ouc ratio na against

reports a

Popular Front tor the Liberation ol Palestine fighter was kjliud on Monday ir the security zone while en route to Israel SHeMetasV*

Comment The Israeli sweep warned Hizballah and Palestinian groups that Tel Avfv would not toiorato increased terrorist attacka, but in other respects apparently wasajor success. The Israeli public Initially supported the operation, but subsequent press commentaries suggest growing skepticism. The Israel Defense Forces suffered relatively high casualties, and Tel Aviv may come lo regardraUor^as Pyrrhic victory If Hizballah recovers quickly #

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Conservative Part)

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35

.liberal

Center DemccfJHtT Party "Peoples

It

54

og.ess

.Radical Liberal

Social!-.

_ Social

27

I Democratic

Socialist

Lafl Socialrgf

Cornmon

4

Faroe islands

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Election Strengthen. NATO Proponents

Thc Oanish election yesterday has strengthened ihe partiee that opposed Ihepril resolution on ship visits, but Prime Minister SchlutJIer still does notependable majority tor his pro-NATO security policies The results show Schloeter's minorityven while leftist parlies lost six seats. The Largest gainer was the righlwing Progress Party, which supports the Schlueter government on the shlp-visll Issue. Schluelor was cautious In pOStalactjgn-comments. although ho implied he will remain as Prime fvnnistr-

the results probably give Schluetorsupport to either revise or rescind thethe election wasandate lor more activein NATO. The gains by the Progress PartySchluelers effort lo reconstruct his governmentsmaller coalition partners will be reluctant to granlto the Progress Party on issues such as foreign aidpolicy. Social Democratic opposition leaderlo cooperate with the governmeni on aome securityIssues has probably been enhanced because ol lossesparties

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SRI LANKA: Sinhalese Marxist Inaurgents Sign Accord

Sri Lankan Minister of National Security Athuiathmudall announced yesterday that tho Marxist Sinhalese Insurgenl group, (he Janatha Vlmukthl Peramuna, has agreed lo give up violence and surrender Its arms" In return lor restoration of Ihe group's right to political activity Both rival leaders ol the JVP signed lhe agreement with ihe Sr. Lankan Government, anc look effect immediately

rTn* agreement will benefit the government IIermits next month's round of provincial elections to be conducled peacefully. The ruling United National Party hopes JVP candidates wilt draw support from tho opposition Sri Unka Freedom Party by appealing lo Sinhalese nationalism, even though the JVP opposes the Indian military presence in northern Sri Lanka. The JVP may expect to dots southern strongholds but probably is Overoptimlsllceturn to force to achieve its goals.

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ARGENTINA: Affonsln Visits Chinn

Argentine President Allonalnnreo-day visit to Chinawill emphasize bilateral trade Issues and continue negotiationsbroad aerospace technology agreement, which may include

lasoojChineso combat aircraft

b^BbW the Chlneso will press Altonsin to redress theImbalance, and AHonsIn will counter by proposingtrade credit and an agreement to buy Chinese coal.wfli also sign bilateral agreements on severalnuclear cooperotlonarid tne establishment ol an

consulate In Guangzhou[J)

I Argentina's trade surplus declined subslonTially lestrgj"

and Allonsln probably hopes toajor shift in the Slno-Argentine trade balance In April, Argentine Air Force pilots examined two types of fighters that China Is offering at good terms, and the presence of the Air Force chle! in lhe_defecation .nd'caiea an aircraft purchase ma, be In the of eg VfjBBBBBMMPBsBfl1^

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Reconsidering Price Reform

Chinese-ehiiiinp. nplry price reform for fhe first timeMBMaBSBsiiBB^VtteMBdmit thai treeingh: aggravate Inflation In the near term but are reportedlyhai administrative measures, including tighter price controls imposeO In August, have failed to slow inflation. Guangdong and other reform-oriented provinces roconlly raised rotall prices_oJ Important food Items such as grain with no reported repercussions I

s seesaw approach tc economic policy ove- the pawtwo years reflects boih disagreements over policytruggle tor influence, as new lenders maneuver lo consoildato Iheir positions General Secretary Zhao Zlyang and other reformers probably are using the new price reform proposals and price hthea In selected areas to build supportationwide Increase hi grain prices this summer,hey hope will boost food supplies. Zhao apparently la js.nn opinion polls that show only moderato consumer dissatisfaction wiln inflation to argue Hint Beijing can risk more far-reaching price decontrol.idening budget deficit and the continued caution of many State Council officials-who may cite recent instances ol panic buying o' consumerwill forceow-paced approach to price reform assess*

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In Brie!

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Supreme Soviet delegation made rare tour of Caribbean in April, stressing economic lies miner thaneceived by heads ot state in Guyana Jamaica. Trinidad and Tobago .eflects growing effort lo establish contacts in

alls Senate's J" iy of 'NF debate "political game" In eWTion campaign . Soviet foreign Mlnrster says verification settled and Moscow has no newMinistry spokesman notes "Moscow expects ratification on time WfJffJM

independent Marshall lalanda protesting repeatod violation of terrltorlaJ waters by Soviet Intelligenceirst diplomatichip tsrgellng USjrilssiie- testing impact she on Marshall's Kwa|aleln Island!

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high spring hoods in Turkey creating lake behind partially completed Ataturk Dam on Euphrates River .. may accelerate scheduledining of reservoir, easmp hardship on downstream water users Syrle.

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