NATIONAL INTELLIGENCE DAILY FOR 20 APRIL 1987

Created: 4/20/1987

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Contents

Syria-USSR: Assad's

PLO-Algsria: Polostlno National Council Meeting

Zimbabwe-South Atrice: Roactlon to Soviet Arms

EC: Prospects tor Agricultural

Zambia: Drought Compounds Kaunda'e

Notes

Arganlina: Military Rebellion 6

Iraq: Economic Responso to Isolation by War 1*

SVBtA-USSR:

Syria hopes

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toouritlcat-xi of the PLO unoeTVaair Ararat at the planned Palestine National Council mooting kiAssadvoid Arab nnd Soviet criticism otnnertho Soviets ramaln crmeal otiiic-v. ni'houg-ii'r Soviet praai recently lauded Syria lor tntacvarang In Weal Beirul tond me flgntmg Detwaan the Shia Amal and in* Palestinians^

Assad probably la preparing to grvs limited support to therive lor an International conference on peace In the Middle East and to modify hla stance on Palestinian Issues, but he Is loathrop his opposition to Arafat. Olvon the Intense preparatory discussions between Syrian and Soviet experts, Assad may expectmajor new arms deal; he probably would settle, however, for scheduling and the selective acquisition ol new equipment.

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The Soviets may Intend to laiie ad vantage of Assad's vulnerabilities to press harder for political concessions, although they are unlikely to push to the point of serious attains In the relationship. Moscow probably wttl agree to reschedule Syria's large military debt:ess likely to offer major oonceaalons for future miii'ary or economic agreements Gorbachev and Assad maymncfpte to upgrade Syrian air defenso equipment cr deRver already promised weapons like Iheighter, but the Soviets are unlikely to sign new deal* for major advanced weapon systems until they are confident ot _ - receiving aome_paymont or perhaps political

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National Council Maatlng

PLO Chairman Arafat'* apparent agreement to ebroosre the Amman accord on Middle Eaat peace he reached with Jordan'! King Hussein Inhas paved the waralestine National Council meeting In Algiers scheduled to begin today, and tha Abu Nidal group may participate as an observer.

liming of tne National Council opening isissue olrsiatlons remains unresolvedbut discussions nave inal and decisive pnaeeMjbbsVsbsbbbbbbbbbsbbbbbIJHHf/JfJV^'ri'n' convened tho "LO executive oonTriltlee^^storaay lo ratify aVogaton of tha Amman accord before tne meeting bogs-a. The statement yesterday blames' the US endJordan's Kingfailure of the accordignals the^PLQ's Intention to pursue Arab-sponsored peace talksfl^ ajj ^

If Worts toompromise lormula governing the PLO's "relations with Egypt may push beck the opening ol the Council meeting,s aKety to take place sometime thistha general compromise agreement does not unravel. Arafat Is likely to resist demands that he break rotations with Egypt, which has spearheaded the effort to Include the PLO In an International peace conference. If the reported text of the ngreement to abrogate Ihe Amman accord Is authentic. It demonstrates Ararat's Intention to pushautious statement that satisfies radical demandsqenbouc break wtth Jordan but ooesrvolburn ajl bridges to King Hussein and his moderate Arab UMtlJ

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II the Abu Nidal group haa pledged to renounce international terrorism. It almost certainly did so primarily to gain access to the Council meeting. The group's leaders probably aeo participation In the meetingay to enhance the group's status within the Palestinian movement and to try to radicalize the PLO. Abu todal terrorist operations have taken place almost exclusively outside Israel and tha occupied territories, and thenlikelyba/idortthe . ,

terrorist activities for which It has become known!

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Apr" war

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AFRICA

Reaction to Soviet Armi Deal

i'J * arm% daat with the USSR are

ZuHaT, overnment, hut

South AlriceS. reinonio hB&aMBBal

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8o far has been low-key. desolta widespread media coverage- In South Africa. Reports in me progc^emrrienl press have boon limited to Criticism of the neastlve gnomic consequences for Zimbabwe and of Moscow's efforts to buy Influence through military rather than economic aid DefenaV

c,a, IO comrm'nt*hM

.. ,, ,WTnS Is generous. Harare could

SrSS1^ln ,hc short "utMravato Zimbabwe'sol

* hose senior officials and members of Panuament who oppose the arms deal are unlikely totrong stand against It If they believe that Mugabe cupporta the agreement. Mugabe, as he haa oncontroversial Issues, win probably alow debate ofthedeol to continue In order to gauge domestic and foreign reacticM

Sooth Afrtca'a rosponsoesire to convey en Image ol military strength rather than vulnerability on the eve of next month's white elections, Nevertheless, Pretoria probably win periodically raise the issue to suooon Is contentionCommunist onslaught."

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Prospac'a lor Agricultural Reform

EC agricultural minister* will soon consider aproposal by the EC Commission that la designed lo help reduce the EC't farm production end export suosftffas.t-

proposal would allow direct payments to farmersegional average. Richer northern member stales arcthe subsidies largely by themselves. Poorer members areECJ

.The estimated direct costs of the plan lor the EC wHl beaSon over the next five years; tho present annual farm budget Isallon. The EC Is already considering other proposals to freeze most EC farm pooes, cut the price of grain byercent, and generally Inorease the role of lhe free market In farm sates..

|The proposaladical departure from lhe Community's present poLcy. which guarantees farm Incomesystem of internal price supports. Direct income payments are Hkeiy to facilitate member-state agreement on price outs and acreageImportant steps toward reducing production and the budgetary costs of the EC'a Common Agriculture! Pota

|The poorer,

Mediterranean members ereto leafuiat the proposal will put their farm sectorsurther disadvantage because lha norm would be able to pay more In national to batches. These members could construe the new proposalst step toward "renatlonalirlng" tne Common Agricultural Policy or abolishing the common market for farmH^ generate heated discussion among the member

Nevertheless, general concern about the EC'a budget crisis makesthat some package of reform proposals Ihat mayfarm production and export subsidies wm be approved byThese may Include price cuts and. toooncerns. strict Commission monhorlog ofpaymentJ

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Drought Compoundi KaundaProblems

Drought In southern ond western Zambia and lebo adding to President Kaunda's domestic troubles.

drought and la to deliveries of fertilizer hava resultedS-reduction tn the harvest of corncountry*aa poor harvest ol other prams auch as mlaetIn the south andIhe Zimbabwean border have losfffO to too percent ofLast week the government raised producer prices 'or corndor to offset the rising costs of fertlllzor. Ksunda has appn tiled Icr, assistance to help cope with the

Kaunda has also threatened Io arrest striking workers to curb Illegal walkouts that have recently plagued the country. Postal workers walked olf the |ob earker this month, orlpptlng communlcatlona services, and the Zamblan Congress of Trade Unions plans to boycott Labor Day celebrations on 1

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|lf the drought persists until the end of the dry seasonate in the year win be stisrpfy reduced, probably resultingeed to Increase Imports and possibly retail prices of staples. The government wis! try to avoid ranting consumer prices for corn In the near torm, an action that provoked lood riots last year. Luaaka probably will have to Increase government subsidies soon, however, to offset producer price Increases, further undermining Its iMf-bocked economic reform program. The Zsmbtan Primn Minister probably wU mention the drought in Washington with World Bank and IMF

etrlkes are likely to continue as workers struggle todeclining standard of Irving. Any government move towet provoke the powerful unions. Disgruntledofficials do not appear toeriousKaunda at this time, bui trie growing opposition reflects the*authorityJ

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ARGENTINA: Military Rebellion End.

arauadfld mutineers at the Infant, SChoo.near Buenos Aires lo surrender peaceably/

^Although, the Irn/nodlate crisis Is past, fhe civiliany follow upecision supporting the political parties' declaration. Although the courts have been reluctant to absolve officers who were following orders, they will be pressured heavily by the overwhelm Wig multiparty support In favor of limiting tne trials. Alfonsoprobably deal decisively wtth the mutineers to try to discourage similar robeMons bocause It Is evident that Army unlls will not defend the government. The possibility exists that some supporters of the joboH reputed to pe at largo could resort to terrorist. #Gt ionsjaeaaaaBeB^eaaenSauaaaaBaa I ^

PHILIPPINES: Army Crushes Jallbreak

Tho Phmppine Army crushed tha takeover of the Army headquarters building Saturday by dissident trocpa. after an attempt tooldiers held In detention foranila television station In January. Aboutissidents, joined byetalnoes endilitary poltoernen. seized the headquarters building when their escape route was blocked. Army commander Carlo so ordered the building to be retaken by elite Scout fuengorshort negotiation during whichew dissidents surrendered. One dissident was killed In the a max D3

| Although the exact Intentions of the dissidents areit appears that this episodeallbreak, not aThe quick crackdown by the Army shouldessagemilitary dissidents that the Army wstl not tolerate actions ofCeraeao intentionally kept Chief ol Staff Ramos andheadquarters officers out of the action toeplaylong negotiations during the January coup attempt, which ledthat the military wasleadership by

M April losr

USSR-AFGHANISTAN: Raid Into Tajik SSR

Saturday TASS said Afghan Insurgents crossed the border river and attacked Soviet guards on the nightpril, kiting two guards before being repulsed and suffering heavy casualties. TASS also said the USSR wW take every necessary measure to protect its frontiers. Mentioning the US, the Soviet news agency said external forces are primarily responsible torolitical settlement In Afghanistan but that these forces were doornedtofaa. TASShat Kabul can count on firm Soviet support ^| ^

only previous Moscow modla acknowledgment of isurgent operations against Soviet territory stressedpril thatno Insurgents penetrated the USSRross-river racket attack that killed one. The more authoritative TASS statement Indicated rising concern over border vulnerability and possible effects among Soviet Tajiks. One Justification foe Soviet troops In Afghanistan has been an alleged US Intention to threaten the USSR from there. Publicizing suoh,Bttaoks may be Intended to prepare the Soviet publicontinued military presence despite efforts toolitical

SRI LANKA: Massacre Ends Cease-FIre

massacre of moresomeFriday, allegedly by Tamil guerrillas,Sri Lankan Government

may spark isiandni'deBBBBBB0BBBBBBBBBBBBBBBByhe government la making little effort to restrict inflammatory press coverage of the Incident. Colombo blamed the Liberation Tigers of Tamilmost powerful Tamil Insurgentthe killings. Troop reinforcements have been sent to the area, and Colombo la armtni local SlnhoJose residents lor proteotl<

Tiger spokesmen have denied responsibility for the killings.roscribed radical Sinhalese MarxistPeople's Liberationweekarge supply of weapon', from an Army camp In the

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killings are the worst single Incident since Mayprobably were Intended to sabotage Colombo's efforts topeace negotiations. Such events havenoting and reprisals ogalnst Tamil civilians In the past,military success against the Insurgents In tho next few daysthe posslbHty. Widespread agitation from themay force President Jayewardene to delay resumptiontalks and return to military operations. Thespokehave been members ol thegroup Irom the south, who have strongly opposedpeace Initiative and have used terrorism toy

f al Peaceful Nuclear Fi.ploalona Since Moralorlum

Moscow announood yesterday thai two underground nuclear explosions wiih yields up toilotone had boon conducted In tho

USSR: Spring Drain So-ing Delayed

Abnormally cold weather since eany last month has delayed sowing of spring grains In the Ukraine and tho northernImportant grain-producingby as much as two weeks. In addition, an unusually cold and snowy winter caused obovo-aveiago winterkill, estimated atercent of the waller grain crop,

sliming substantial replanting wllh lower ytsldlng spring grains.

Soviet* are not nkeiy to achieve the planned grainillion tons end win find il dirhcult even to match lastillion Ions. The pending delayed planting of spring grains and long dormancy ol winter grains win make this year's crop more vulnerable than usual to losses from summer heat and possible early frosts. The lole spring may also mako It difficult for the Soviets to merit other crop production targets this year

AUSTRALIA: Opposition Regrouping

Australia's conservaiive Liberal and NaUonal Parties have agreed to main lain thee* join! opposition lo Prime Minister Kawke's Labor govr-rnment. thereby frustrating Queensland State Premier B'atNo-Petersen's efforts to break up the opposition coalition. BJelke-Petersen's Queensland National party announced recj that Ita members would resign Irom the opposition coalition f

^^Bjdkc Petersen's failurepilt tha coalitionrTaTrilyiv7ii prevent him from gaming control ol the National Party betoro the election thai must be held bypposition loader Howard has probably strengthened his standing within the opposition by hla handling ol the defection by the Queensland National Party and by hla recant sacking of Andrew Peacock, his main rival within the Liberal Party. Peacock, who was fired as opposition spokesman for foreign affairs alter severely cettlctring Howard, la against continuing the coalition without the Queen slander's participation and probably wll use the agreement to maintain lhe coalition In order to challenge Howard's position. Although tho lighting within the opposition should help tne Labor government In public Opinion polls. Hawke haa said he will not call for sn election al this time because (he polls show that Ausirnilgovernment's handling of the

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In Uriel

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Iraq. Turkey planning third ofl-expo'l ptpeone from orn oiltields to Batman.IP lelnlorcobr'd lino may triple exports now trucked through

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unstable Kurdish. may conned lo Oortyol line

Lebaneao Druie leader Walid Junblatt visiting Moscow thise.peceo to request Bo.ietptots.

East Asia

South Korea win sign Ngh-technotooy trade memorandum understanding wtth US next montf mfteronoes will remain,echnology. Seoul's responsibilities for export licensing j

Special Analysis

Ftraponae Io Isolation by War

President Saddam Huee/n'a sweeping economic reforms probably will Improve Industrial performance end strengthen his one-man rule. Tha cost ot the war with Ironotlet that Baghdad cannot depend on financial and political tuppori from Ita Arab allies probably prompted Husayn's recant changes. Tbe reforms are also meant to pro/ecl contldonco and deflect popularm tha bzttivfieid.^ M k7

Iraq's highly centralized, rigid economy has Impeded Industrial performance because of excessive regulationack of Initiative by managers and workers. Since February, Baghdad has Instituted wide-ranging reforms Intended to reduce governmeni Interference, give more authority to state Industrial enterprise* at the expense of the government ministries, and Increase workarproducilvtty In the industrial sector. Less publicized austerity measurespercentantslry budgeta. reduced benefits to Mue-collar workers, and reduction In the government payrolls I

Hu'.iyn also Is likely lo expand the private sector by merging some state-owned enterprises with private concerns in order lo lap private manufacturing expertise and capital. Some stale enterprises probably wilt be abolished If they perform badly|

ion ale, Impact of Chang ea

The collapse ot oil prtoes last year and ttid large share of resources devoted to the war have Increased the need to remove IneffIcier from the economy

Husayn's recent attention to the oconomy le also Intendedthe public that Baghdad can both atop Iranianand focus on civilian pursuits. Extensive domesticof the reforms and calls lor greater effort by theare Intended to relnvlgorate civilian supportforthe warout hope of an eventual return to3

The changes should enable Iraqi Industry to cope better wllh shortages ol lorelgn exchange needed to purchase Imports ot raw materials and spore parts. The reforms will not alleviate Iraq's fundamental economic difficulties,large foreign debt, low oil prices, and war exponentu<es*B fc 3

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Confusion and managers' fears ol falling lo meet higher output and quality standards probably will hinder the changes. Managers, unaccustomed lo running their own shows, are not sure what is expected ol them andprobobly will have difficulty adjusting to their new responslbilHIesfl Lj

Outlook

Musayn is pragmatic enough to expand the private sector and allow Increased foreign Investment If It results In higher performance. But the regime still exercises considerable control over the economy, and the changes do notreak with tho ruling Ba'th Party's socialist tenets. Instead, the moves are an effort to correctorfjtr^is Identified by the party's regional congress

Even so. Saddam's repeated pubtlo warnings totfoot-draggers and "deviation's!s" suggest that some government and party officials are resisting the reforms. Husayn's shuffling ot ministry posts and his readiness to replace officials who Stand In his way make significant oppositiono^

The moves probably weaken First Deputy Prime Minister Ramadan, the economic czar who Isikely successor to Husayn. Ramadan has so farinor role In the changes, and decentralization probably will reduce hla decisionmaking authority. Moreover, the new Minister of Industries AbdOS-oducated economist related toseems to have Husayn's attention, and his strong support Jgr^ooeptralteation probably will

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