NATIONAL INTELLIGENCE DAILY FOR 11 MAY 1988

Created: 5/11/1988

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Contents

Slluoilon Report Poraian Gulf: Situation Reporl Poland: Strike Ends

Ecuador:oreign Pol-cy Views

USSR: Gorbachev Scores Opponents ol Reform

USSR; Opposition Party an Awkward Problem lor Gorbachev

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l alest Cease-Fire Breaks Down In Went Beirut Israel-Lebanon: Military Operation In Retrospect

Oenmark: Election Strengthens NATO Proponents Sri Lanka: Sinhalese Marxist insurgents Sign Accord

Argentina: Allonsln Visits China China: Reconsidering Price Reform

In Brief

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Analysis

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W.nning Propaganda War

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Ato-Jega Is afeflgUoy combining Ms control o( Panamanian media wtth effective propaganda both to ,ahyppon lor hla remaining inpowe-anorovoke enti-uS sentimenujaaa^ajaJBsjaaj "

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lhe 'Oflime is using lis complete control over local newspapers to plant false Information, suchistanamanians to be "executed by US-sponsored deathnd has harassed Journalists, closed down radio stations, and apparently

?,aSndnrce9reporting Only the US armed forces media network remalnV

^fjaj'ectrid^arl^asa result of tho propagandassM

businessmen now believe thirUS Is trying

to destroy their companies

Meanwhile. Borne members of the ruling Democratic Revolutionary Party believe that Noriega-who has successfully portrayed himself as Panama's DavidS Goliath -wouldiable candidate lor president -

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Strike Ends

The end of the strike In Gdansk wflf probably dotuao tho unrest In Poland, but It feaves (he keyregime, Solidarity, and the Catholicend lacing new polilical challenges over the summer. eatieWrW-

an apparent

gestureToTcontempt for (he regime, the stnReYs ai Gdansk ended their eight-day sjiiko last nighl without accepting any government concessions,

The sirikers at Gdansk had fell increasingly Isolated as Solidarity leader Lech Walesa's calls tor nationwide sympathy strikes failed to generate new activity since the short-lived Ursus Trectorstrike on Monday. In addition, church negotiators reportedly had urged Walesa toompromise to end the strike. aaaaaassU

peaceful end of the strike win not spareifficult summer as the regime. Solidarity, and the church reevaluate their positions. Polish leader Jaruzeiskl can take comfort from having contained the unrest .through the adroit use of force, conciliation, and manipulation, Out the regime also has suffered some serious setbacks. Jaruzelskl's position has been damagod, and doubts over his ability to deal with Poland's problems will reemerge within the pariy. The regime also needs to salvage Ils economic reform program, It only to keep alive diminished hopes for IMF assistance, andmust avoid provoking further unrest in an atmosphere of increased distrust j

Ihgfltyt

Walesa andThe other Solidarity leaders will claim that the strikes showed workers' willingness to challenge the regime and take up political causes. They must deal, however, with tha lack of labor support for the strikes and must Integrate the new generation ot labor leaders whohe strikes. Younger workers proved to be more radical than most Solidarity veterans, and Walesa must moderate such youthful militancy If ho Is to present Solidarity and hlmseif as acceptable Interlocutors for the authorities.

The church will be pleased that the Gdansk strike was*rosolvedlr/odshed. but Its leaders were embarrassed and angered by the regime's manipulation of their role et Nowa Huta. The church must also decide whether it was wise to intervene openly during the crisis and whether to Increase lis efforts lo bring Jhe regime and workers together during periods ol relative calm.

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Foreign Policy Views

President-elect Bor'a's public backingougher stance In negotiations with loralgn creditors reflects his Intention to move Ecuador's foreign policy towerdAhe lelt when he tekes office In

old itto press on Monday ho win rejoct the0 million debt-rescheduling agreement with commercial banks that President Febres Cordero approved last month. He claims the accord ignores Ecuador's current financial situation, which has deteriorated because ot lower world oil prices. Whllo Borja haa Indicated he Is willing to renegotiate2 billion debt, he haa called (or cooperation among Latin debtors, arguing that aa group they can press International creditors for better terms.

Borja has repeatedly criticized Febres Cordero'* close tiesand has aald he willoreign policy orientedthe Third wo-id. He has pledged to reestablish relationswhich Febres Cordero brokeorja'shave expressed support for Quito's tough stanceng JbbbbbV-

President-elect's reaction ol Fcuador'n debt agreement probably dooms the accord. It has already been troubled by disputes over terms within Febres Cordero's economic learn, and Borja almost certalnfy will repudiate any agreement signed during the remaining months ol Febres Cordero's teivBtjl^^

In addition to reestablishing ties to Nicaragua. Borja Is tlkely to follow

other South American leaders In Improving relations with Cuba. To

demonstrate his independence from Washington, he may also seek

admission lo the Group ol^ghl^tho Contadora Four plus lour South American--

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GorbachevOpponents of

peech lo Soviet medio officials published yesterdav auZlnorbachev criticized top oltUilTho

cammi.Lreaffirmed the leadership-,

commitment lo continuing the reform process., Ml"

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On Saturday, with Ligachev In attendance. Gorbachev said "aomo people have failed to keep 'hair heads" in the face ol difficulties In Implementmg reform and have wrongly concluded thai reformestabilizing" Soviet society. Gorbachev said this contusion over peresttoyka had affected the country "noi only at the ground level, but also on thoe urged Ihe media lo "support everything that Is progressive" In discussing reform. At the same time, he warned-sgainst branding those wtth honest doubts as "enemies of peresfroyAa afJfefbap"

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Meanwhile. Ugechev continuesarryormal routine In public. Besides appearing at the media conference Saturday wllh tho rest of the Secretarial, he saw President Gromyko off to Romania yesterday, and last weekisitoscow publishing house together with Moscowder Zaykov.eflUJai

Jigachev woufd show upinsisted,hat his status had been reduced and tha, his future wasblriflA,oley|,lon|

longerTeponjo

^Gorbachev's assertive speech la another Indication that he

l5 ,hGnanydmonition against using lhe

iLt>PP'oachJng-and to reassure moderates thai there Is room in tho party for diverse views."

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Nevertheless.osition as "second secretary^ may not be secure despite his continued routine public activities. Soviet leaders frequently remain active until formal action Is taken to remove or transfer thorn. The struggle over reform Is sharpening, and those opposing the conservative views of Ligachev dominate the debate. Letters supporting conservative ideas aro being overwhelmed by proreform articles andof them mHitantly radical and openly hostile io t^ 'orces of triea/at-'S mat are Ugachev's main base of supporB*1iajoWoufV

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Opposition Parly an Awkward Problem irf Gorbachev

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A coalition ol dissident end unofficialattempting toetlenwlde independent politicaloverstepped the bounds of regime tolerence,ilemma tor General Secretary Gorbachev who wants to encouregoarticipation without elermlng party conservative! efl| war**'

elegates ol unofficial groups fromoviet elites met in

Moscow over ihe weekend to organize the Domocrallc Union and

calledultiparty syslam. freeree press, and

Independent trade unions. On Sunday, police detainedrganizers.

although most were later released, and on Monday police disrupted

a gathering ol the new party's loaders al the independent lournjji

G'esnosf andIts editor, Sergey Orlgoryants. and three(3j

members

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White Gorbachev may ultimately use the group's challenge to argueeformed and more democratic Communist Party, he must be careful his encouragement of political initiative Is not used as ammunition'by conservatives to snow that his po'ioeshree' to the stability of the system. The formation ot alternativeto Ihe limited degree ihat ihey exist in Easternmeet overwhelming opposition within the party. The harassment of the delegates suggests thai even Gorbachev and those pushing for greater public participation are not prepared lo accept an open

an avowedly loyalo one-party rule.

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LEBANON: Latest Ceasohre Breaks Down in Wet! Beirul

runth cease-lire since Friday between pro-Syrian Amal and pro-iran.an Hizballah mmtiamen collapsed lasl night. Tho cease-lire failed despite lhc deployment Into tho battle zone yesterday of she security committees comprising representatives of Ihe (wo organizations as well as lhe Iranian Embassy and the Syrian armnd tnirs,<

Iheol the latest cease-fire plan will increase the pressure on Syria to respond forcefully. The Syrians reiterated yesterday thai they will Intervene If the fight.ng does noi stop Syrian credlbllily is particularly at nsk because ol the Lebanese presidential election due Ihis summor. and Damascus may nowlcaiion ol indirecl military pressure on HizballAhl

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ISRAEL-LEBANON:y Operation In Retrospect

Israel's sweep operation In southern Leuanon last week has not deterred terrorist attacks by Hizballah and radical Palestinians.

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Hizballah nevertheless claimedockot attack on nortliorn Israel Friday morning snowed the sweepallure. Last Sunday, theiiballah lighters returned to Maydun, which the Qroupj^rricd harijtpainsaetorgainst * i Iq

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Popular Front lor the Liberation of Palestine Ttghter was felllpa on Monday In tho security zone whilo on route to Israol.

Comment: The Israeli sweep warned Hizballah and Palestinian groups that Tel Aviv would not tolerate Increased terrorist attacks, but In other rospeefs apparently wasajor aucoesa. The Israeli public Initially supported the operation, but subsequent press commentaries suggest growing skepticism The Israol Defense Forces suffered relatively high casualties, and Tel Aviv may come lo regard^ nneratlon as Pyrrhic victory If Hizballah rocovaro quickly "sssaWrt

1 May rose

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Sap temh^iow

Non$oclmllat

_ Conservative Party

Liberal

Progress Party

Rackcal Uberai

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Socialocialisteft Socialist Party

Center DernocratfC-Party hristian People's Puriy

Social Democratic 1 M

Sociallti Peoples

Common

Other

Faroe Wands

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OENMARK: Election Sii . then* NATO Proponents

The Danish election yeslerday has strengthened the pantos that opposed thoApril resolution on ship visits, but Prime Minister Schludter still does notependable majority tor Ns pro-NATO security policies. The results showinority coaH'.ton broko even while leftist parlies lost six seats. The largest gel nor was Ihe righlwing Progress Party, which supporta the Schlueter government on the ship-visit Issue Schiueler was cautious inmments. although he Implied. remain as Prime

MesVasssaai'though lhe results probably give SchluotO'arliamentary support lo either revise or rescind the ship-visit resolution, the election wasandate lor more activearticipation In NATO. The gains by the Progress Party may complicate Schlueter's ollort to reconstruct his government because his smaller coalition partners will be reluctant to granl Increased influence to the Progress Party on issues such as foreign aid and Immigration policy. Social Democratic opposition loader Auken'e ability to cooperate with tho government on some security and defenseJssues has probably tjeen enhanced because of losses by lar-lefl Darties

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SRI LANKA: Sinhalese Marxist Insurgents Sign Accord

Sri Lankan Minister of National Security Athulathmudoll announced

vTuSPTtheha,ese lnau,0em ,ha

VmukthPeramuna. has agreed lo give up violence end surrender

U, 'roup's right to political

eacf8r9 of ,hBnedasreement withrj_Lanfcan Government, and the accord took oUcci

jThe agreemonl will benelll the governmeni il it permits

next month's round of provincial elections to be conducted peacefully. The ruling United Notional Party hopes JVP candidates will draw support Irom tho opposition Sri Lanko Freedom Party by appealing to Sinhalese nationalism, even though the JVP opposea the Indian miliiary presence In northern Sri Lanka The JVP may expect to do well Hi Its southern strongholds but probably is over optimistic orce to*achieve lis goals.

isits China

Argentine President Allonslnhree-day visit to China today. Mo will omphasize bilateral trade Issues and continue negotiationsreach aerospace]

hinese will press Allonsln

trade Imbalance, end Allonsln wHl counter by0 million trade credit and an agreement to buy Chinese coal. The delegation will also sign bilateral agreements on several Issues. Including nuclear cooperajjon and the establishment ot an Argentine consulato InBV

eclined substantially last year

ontin probably hopes toajor shift in the Slno-

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CHINA: Reconsidering Price Reform

Chinese loaders ere,a|or piice rolorm for tho first time Proponents admit thai Dpricos mignt aggravate inflation In the near termhat administrative measures. Includingcontrols imposed hi August, have failed to slowand other reform-oriented provinces recently raisedof imporlani food items such as grain with no,3

repercussions,

seusaw approach tc economic policy ovc-

past two years reflects Doth disagreements over policytruggle for influence, as new loaders maneuver to consolidate their positions. General Secretary Zhao Ztyang and other reformers probably are using the new price reform proposals and price hikes In aelected areas to build supportationwide Increase In grain pricesummer, whlchthey hope will boost food supplies. Zhao apparentlysing opinion polls that show only moderate consumer dissatisfaction with Inflation to argue that Beijing can risk more tar-reaching price decontrol.idening budget deficit and the continued caution of many Slate Councilmay cite recent Instances of panic buying o'low-paced approach to pnce reformr^ssseW

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calls Sonata'sf INF debategame" In okteuon campaign . Soviet Foreign Minister says verification Milled and Moscow has no newinistry spokesman notes Moscow expocts ratification on

Newly Independent Marahall (elands protesting repeated violation of territorial waters bv Soviet intelligence ship ral diplomatic contact hip targeting US missile-testing Impact site on Marshall's Kwajale-'n Island*

Unusually high spring Hoods In Turkey creating lake behind partially completed Aio(urk Dam on Euphiafesay eccolerale1 lining ol reservoir, easing hardship on downslream water users Syria. Iraqi""

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