NATIONAL INTELLIGENCE DAILY FOR 20 MAY 1988

Created: 5/20/1988

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Contents

- Political ManeuveringLanka: Sinhalese Violence Conlinues DespiteSalvador: Rullng-Pariy Facllons Vying for Power

Taiwan: New Mainland Policy

USSR: Warning Austria AbouJ ECMutual Recognition Near

In Brief

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Analyses

Hungary: First Party Conference7

Top^cret ^

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LEUANON-CVRIA-IRAN; PoliUcal Maneuvering Continues

In mo Boliul

press isy Hiiballah loaders announced yesterday that thoy would agreeimited deployment o' Syrians Into tne southern suburbs, but no authoritative statements hove come yet from the Shia radicals.

_ Evrrvtueny Assad almostc nave to movetne suburbs. If only toease-ttre. He wants Iranthai Syria Is the preeminent power in Lebanon andto Amal that It can. depend on Syrian support. But Assaddiplomatic efforts to disarm Hizballah and arrangeto mlQlmizc_the_cost ot sending Syrian troops Intoy

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LANKA: Sinhalese Violence Continues Despite Accord

Sinhalesena ma Vlmultthl Peramuna Insurgents lulled at leasteople this week, despite their group's reponed agreement with tha government to turn In Its arms and give up violence. Government forces are now conducting sweeps In the southern provinces In scorch of the murderers Insurgent leaders now claim they were misrepresented and never signed an agreement, casting doubt on Ita validity. The government nevertheless says It will not nalmpose the ban on tho JVP or conduct offensive oparationshe Insurgents abide by tho terms of Hit->

V, 3 hope that It has ended the violence In tho

south ii fao.ng. The government Is trying to put the best face on Its actions. It has somewhat disarmed Its pollttce! opponents by allowing - the JVP to enter tha political process and can argue that the JVP's disregard for the agreement undermines the organl/atlon'B credibility. Nevertheless. JVP extremists willtonsltj violence as the earlyth appn achei ssstraftsSeasBseaaafe^^

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CL SALVADOR: Ruling-Parly Faelions Vying (or Power

two competing fact tens within SaivCdoran Presidenthristian Cemocrttic Parly are discussing separate plana with tne righlwing National Republican Alliance lo icicvc t'e lejuiatlve .tnat resitted from tne election inpppa]eB>BtaBr-

facllon led by Fidel Chavez Mena would cooperate in* All'ance.allowing tne National Assembly to meat with an Alliance majority. In return, thelhe Central Electionsrecognize Chavez's faction, which would enable him to overturn the presidential nomination o' Julio Ray Prcndes, his parly rival. Ray Prendcs announced on Wednesday thai bo Is niio meeting with lhe Alliance toeparate deal.

,agreement settles the loclslntlve dispute should rJasolears ol military intervention. The split within tha Christian Oomocrats. however, will probably be aggravated by the competing negotiations wllh ine Alliance. Rey Prendeskilled politician and could still become tho Christian Democratic presidential candidate. The leaders ol both factionsg to run scpaiate campaigns if they lose the psi-yy

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TAIWAN: Now Mainland Policy

Taiwan's ruling parly willow colicyj July, according to press repor IBill ocknowtedoe iho crowing contacis with China but will conllnua to characterizea unofficial. Someme alio permll direct trade between Taiwan and Cn.na.as N

handled by private firm* Tapeuse to unofficial Council for External Trade and Development, which handles trad. ith other Communist countries.rrange trade with->

nsadoMtyeflef that It caneas

hosuerelationship wtth Beijing. Drect frade with the mainlanda-major victory for reformers who argueill reipdiversify their export markets. The retormersbelieve the move vrltl strengthen the party's popularity jor legislative election next

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US SB: Warning Aualria About EC Membership

SovJel Foreign Ministry spokesman Gennadly Oeraslmov this week Indicated Moscow would consider an Austrian opplication for EC membership Incompatible with Austria's permanent neutrality. The Soviet statement follows an announcement by Austrian Economic Minister Gral last week that Vienna probably would opply lor EC membership next year and indications from EC officials that Austria will have no special status if it eventuallyember.bjections, which the Soviet Ambassador to Austria and other olliclflls echoed, stressed that Austria, aa an EC member, would novo to abide by EC decisions that the Soviets view es increasingly oriented toward political-military issues. Apes*

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V 3 Soviet objections to Austrian-EC ties havein recent yours so that Moscow does not opposeeconomic alignment with the EC. but It stillto Austria actually joining the EC without reservationsits neutral

membership will not endanger tneir country's neutral status and that membership will be essential to Austria's economic well-being, once the EC's Internal market reforms are completeustria will probably proceed to apply for membership desplie Soviet complaints, which may lead Moscow to Increase pressure on ienna to satisfy Soviet objections firstV^ 3

EC-CEMA: Mutual Recognition Near

member states are optimistic that an agreement establishing diplomatic relations between the EC and CEMA can be signed beforerns over tha EC presidency to Athens In July.

" _ompromise on the sticking "point thaThaT nolo' up negotiations for more than aEC's inslslcnce/^at CEMA recognize West Berlin as ECat hand.fljpr

aatMtsaaT^Tnc USSR. East Germany, and Bulgaria would almost certainly recognize the EC soon after the accord Is signed; thc EC has Insisted the accord be accompanied by progress In direct contacts with individual East European states. The accord may also put pressure on tha EC to conclude trade talks with Hungary, currently stolcmaied by theiernbe^ to rem ova quotas on Hungarian exports."

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In Brief

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Druo tralfickers In Colombia may raaci violently to US conviction

of Carlos LohderrdlcUriByana^ngerUS^m^

Sng ot Salvadoran |udQO

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Marxist rebels may be linked

consistent wtthftorts to

government orthosis. Increase urban terrorism t

Protests In South Korea0 Kwenghi riots largely

y -> chlly damaged USIS

budding Wednesday In snow of anti-UShrew nose bomts. tried to enter Embassy compound Inls mornings^paaj

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. ex-Minlster Lambsdortt likely successor as party head.

-West German Economics Minister and POP Party Chairman Bangemenn to resign positions, seek EC Commission presidency

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election of new minister certain to Inc-osso friction In coalition

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Special Analysis

Party Conlerence7

Hungary'* parly conference, which opens today, will make aome leederthlp changes, end General Secretary Kadar'a position has never been more threatened. The conterence will do little to deal with Ihe country's economic end social problems, which will tncreetlngly fuel politics' ter.nom end infighting. tJfMamWk)

ill retain hra positionSecretarylvC^re wiaesproad in BudapestKaroty Grosz* will

Illness had weakened aaar and that others will be running IftlnoVbut Kadar will remain In the leadership as long as he lives. II Kadar remains General Secretary, the replacement of ailing Deputy General Secretary Laaarigorous young leader, sucn as Politburo msmCer Janos Berecz cr Premier Grosz. would be the dearest Indication the General Secretary has lost some o* rvs power sad Is preparing to end IMSat0 parly cong

Premier Grosz has aKadar apparently Is still pulling theGrosz has had to ask Kadar severalot lhe conference In order to determine wheihar thoyhis scheduled trip-a Hhla*>

iar Is under great pressure to invigorate the leadership: the changes will probably reflect moro cmptiasls_on competence than on the quotas ol various occupation

Kadar's report is likely to focus on Improvements In Internal party democracy and to reassure the rank and hie that their concerna are heard at the highest levels. Kadar probably wia call for the government, the paraBrrent. and other Institutions such as the Irode unions to play greater and more independent rotes In the political process While defending the leading rok* of the party, he win argue that It ought to concentrate on broad policy direction and allow other organizations to handle details. Kadar also may propose thatcontrol ahlfl from the Central Committee apparatus to basic parly organizations in enterprise* end oilier

will probably sidestep such controversial topics as the content and pace ot ecor.orr 'c change unless Grosz believes he laces r. cr t'C8 op^cft^nityaHBeajeaaajbthe'e would ba "no sensations" at the conference, whichnly set up committees to work on reform Issues, and that intense debate on reform would be delayed lor two or three months. The party is badly divided over the causes and solutions to the country* prosier eaagajjgeaj pBjjasafJBi

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