NATIONAL INTELLIGENCE DAILY

Created: 11/20/1986

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Conlcnls

USSR-South Pacific: Soviets LoseEurope: CEMA Mooting

Notee

France: tnoctoiai Reform Approved

Change of Prime Minister Rumored

Lebanon; Hiiballah Improving Military Capabilities

Libia: Responding to Qadhafi's Overtures in Brief

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Analyses

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Nicaragua: Contesting tho Central Front

Vietnam: Party Congreaa To Set Reform Agenda .

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USSR-SOUTH PACIFIC:

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Moscow appear* lo be- reeeieaalng lts,epproeches lo Ihe South Pacific atetee otter recentt.JM -3

Trie USSR nanoia ol morn on turn In Us recently aggressive courtship of the South Pacific Slates as the West has movedtrengthen traditional ties lo the islands. Wider, pubtacued talks toishing deal, which expired In October, failed whan the Soviets Insisted on lower lees. Vanuatu, which established diplomatic relations with Ihe USSR In July and had express fld interesteal Involving shore access lor Soviet ships, has not yet begun toishing agreement with the USSR, although It Is scheduled to do so next month. Other local states hed to Moscow's often impractical economic ofte- - ^

esult, the Soviets nave dropped most of their unsuccessful economic proposals to the Wand states and appear to have postponed Deputy Foreign Minister Kapitsa's proposed visit to Australia and unspecified Islands, originally scheduled torore low-aey looiosc'jI'aBj Bs^*mmmmbaBaBBl

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"not expect to piny ashe South Pacifies* theeparture frgrn Moscow's previous emphasis on equal access to the

[ Although the Soviets undoubtedly wet continue to court South Pacific states, they ere likely to move more deliberately and may foous their attention on more receptive elates such as Vanuatu. Moscow's tough negotiating stance with Kiribati suggests the Soviets may have expected to strike extremely cheap deals Budgetary constraints may discourage Moscow from concluding agreements that do notlum Ilka shore access, no matter how small tha sums Involved

Moscow probably suspects that Its highly visible campaign inPacific spurred US coup le-measures andty to takeminimize such reactions ta the future. Moscow probablyexample, that the USillion, five-yearmember South Pacific Forum In October to blockdeals in the region. Tha Soviet press, nevertheless,to play up anllnuctear themes and the spooler otit arli at ion of Ihe region In the hope of eventually denyingNavy accesssi^ D

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EASTERN EUROPE:

Meeting

J**continued tonew" stylo In toilng with theirjurlnxL. meeting lent week el com party loaders In

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uma ouwioiB limited participation lo

tho party crtlo* and one other official from each country, decided In advance toinal communique in order to emphasize the meeting's "working" nature, and announced plans to convene auch gatherings annually Party leader* discussed controversial Issues

Qlaaulng kitro-CEMA trade ar

Bdecldnd the Soviets would lower me price, ol their oil more than (Harmed next year Infor trade concessions from other CEMA members a^

limiting the number of participants and promoting tho Idnoorking meeting, General Secretary Gorbachev may have sought toore open discussion of CEMA's problems. Gorbachev may also have been trying toMngness to treat East Europeans more aa ecjuoto^ntnsprosslon he has cultivated at previous multilateral galherings.B |

The failure of the Soviet or East European media to play up results ol the meeOhg suggests that many Issues remain un/esoivod Evenecision regaiding oil prices may becj ^

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SO November 1SS6

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FRANCE: ITeform Approved

France's ConstIIullonal Council has approved tha electoral reform introduced Dy Prime Mlnlifer Chirac's conservative government.Council hod warned earner againstut It apparently found ihegovernment'e final plan acceptable. The decision follows seven months of political Struggle, during which President Mitterrand blcche^Chlrac's move to change me French voting system by dccreeM B y

BMItterrnnd can delayittle longer by as*mg parliament lo reconsider the law. But when Chirac's mafonty passeshe same form, as seems certain. Miltsrrsnd will be obliged to sign It. Districting changeseturn to the old two-stage majorily voting system will favor Chirac's center-right coalition In the next legislative election. Moat post indicate that. If the election were held today under the new system, conservatives would increase Iheir majority substantially This will strongly discourage Mitterrand from dissolving parliament andthe presioentlal vote ecneduted for IBBBf^ '

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NORTH YEMEN:ler Rumored

President SeMh may dismiss Prime Minuter AM el-Ghaniwncism aboul ihe oovommen.it handling of the troubledtribal aid business loaders are urging Saiih lo dismiss Abd ai-Ghent and that hisuccessors Include Development Minister Muhammad Said al-Alt Minister ot Aorlculluro Husayn al-Anul la major shuffling of tho Cablnei may be in the works

wm Yemen's aconomlc situationhen oil exports are scheduled

unlikely to to begin

JBuslness and tribalsupporters of President Sallh'sdissatisfied with the government's inability to arrest-lho recent ocoflomic do toonsJHHl^HHHflBMnHBT

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Initiative

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LEBANON: Hizballah Improving Miril.r, Capabllilia.

* Shia HUballBh group lo Improve Its military trainingreludeenewed offensivei trooMjrUflbanon or thr. Israeli-hocked Armv oTsouth Lebanon

mproving Its military capabliltlea nartlv in

^ uS,ao1 lhaInterrupted becauseh?^We Shla AmaIand Palestinian fighters llon'obably also preparing lor an eventual snowdown wllh Sydan surrogate groups In Lebanontayebeon several dashes with such groups this

Secret

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BAR OADOS-LIBVA: Responding, to Gadhafl'e Overture a

Prime Ministerto meei Libyan oltlclalB before the end ot the year to discuss the establishment ot an Islamic call Society In Barbados In exchangeillion Investment, but

he Is unlikely tobvan presence

the roc..me of Muammir Oadhall.

Meeting the Ubyana would allow Barrow to Illustrate the

Independence ot his foreign policy, but the risk of hurting Barbados's tourist .hdustry. alarming neighboring countries, and straining rillations with tho US would probably limit ony agreement. Despite high unemployment on Barbados. Barrow probably Is not so desperate that he wouldotential base for Ubyan intelligence and terrorists,iew of Libya's pqoi record

commitments of this sorttherc ^

ovember taetl

1auam , *

tlan President was targel ol assassination attempt by unknbwn assailants Monday Namphy now In Miami loristurbances continue wllh MIMary on heightened

- Ljbj^asbeojyjrovio^ Northf Sanaa'* needs .

Tripoli's polltlcaify motlvatad move has noi prompted Saudi Arabia to follow suit despite Sanaa's ploasl

lan forces In keg attacked two Turkish truckn _ , oil toO

part ol hen's Ineffective campaign against Iraqi economicurkey probably will not gorotest Mj>

Prime Minister Pafai facing Increased public

> fBBBBB"tBs"oBas"flMaBBB LssksslKing Hussein nevertheless mm "to retain Rlfel to protect West Dank development plan.

of Papua New Guinea Minister ol Prima rioted In Port Moresbyupporters wanted national holidayk unlikely to bolt coalition ol Prime Minister Wlngti

ictlon

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nalysis

Contesting Ihe Contra! Front

Suppori lor tho antl-Sendlnlsta rebels probably hit been stronger In antral Nicaragua than In any other part ot the country, htanague, tearful ol toeing control enter this region, haa moved aggressively againat rebel forcei and aupportnd lighting will Intensity further at Insurgent troop strength Increases. Aa the government reinforces Its presence, the Insurgents will hove to work hard to retain the confidence ot els um erteln about rebel *ia,inumH- 3

Tne stake* tor tne centralincludes Boaco. Gnontales.ortion of Zelayahigh for both aides. ontrol ol the area is Important to the Sandinistas because it guards the mountain approaches to the Pacific coast heartland. The Insurgents consider thoey operating orea because their activities there draw government forces away from the northwest ami because much ol the Deputation la strongly antl-Sandinista^^^

Blregional economy Is dominated by

conservative smellho have persistentlycollectivization, and that locals have aided thefood, clothing, and safehaven. Marry ot the combatants areregion and have strong family tlea thai

Regime Tactics

The Sandinistas probably have moved mora ruthlessly on the central tioni than in other reotons tn on under control.

*_Land confiscations also"

wast, ananchers in jail for ntrnof

regime has more thanrters over last year,n ono Instance, an entlreTv. lactic, lhe regime haa held

politi

hat.,

statements by regime leaders so crackdown may be imminent '

- risoners in Boaco alone. Recentan oven more intense

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Insurgent Difficulties

September and October, trie insurgentseries ot road ambushes and atlacks on small garrisonsajor Sandinista sweep to prevent Ihem from reestablishing themselves and threatening ihe vital Rama Road. Managua's Imk to meln Caribbean porta|-}

looking Ahead

The Sandinistas appear determined to prevent the Insurgents Iromarge permanent presence in the area. Theontinue to try to bulk) local reserves and mum* units, as well as to move available counter Insurgency battalions Irom the northwest, lo meet any Increase In rebel operations Managua probably wHI allocate air defense assets to prevent rebel reeupp.y. The regime also will continue Hs efforts to MUmldsts thea* ng more arrests snd landear certainty H |

Insurgent strategists probably will try to rebuild force strengthombatants, supplemented by localeliable aerial rsystem. The rebelscontinue their small-unit tactics, focusing on InterdictingRoad and conducting ambushes and attacks on smallforce the Sandinistas to commit as many troops as possible toregion. They also are likely to increase combinedsouthern front units, but moves sgalnsl Isrge military unitscenters are unlikely. After rebuilding support networksuse ol family lies, the Insurgents wfl need tostaying power in the lacend Inressure if they are

Special Analysis

Conor.ee To Set Reform Agenda

Vietnam's aging feeders are preparing lor the Sixth Partyxpected by mid-December, emld criticism from Ihe public and party over the effing economy. The congests, which will let ffto naf/onef policy agendo tor tha next live,ill produce leederahlp thltlt. bul sweeping changes al ihe top ere unlikely. Oltlclml rhetorle suggests the party willrive lomdlcel economic reform, but It Is more likely thtl the congress will almply ratify the reform progrem that has been under way lor IS months. The party's primary foreignitment probebly will be the endorsement ol en oetwtrdl, stanceB^BBBBa

Pubic confidence In Hanoi's aoally to run Ihe economy has virtually varmshed since price, wage, and management relorms were introduced tnntended to give Ihe economy much-needed stimjjjtion. tne reforms have been ineptly administered and have caused skyrocketing Inflation and shortages ol both industrial and consumer goods. Tha leadership has admitted mistakes in carrying out the program and claims Ito restore public confidence by replacing corrupt, incompetent, or elderly officials. Party leader Truortg Chinh, although long considered sn ideological conservative, has become an outspoken advocate of relorms; he Kilned In the criticism ot mismanagement lhal hss been expressed In official medio and St provincial oongressse. At tho Hanoi Party Congress in lato October,yearokl Chlnh was sharply critical of official corruption, excessive central control of Ihe oconomy. and costly state subsidies. He adrnltted that Vlotnam haa wasted billions of rubles in Sovet aid.

Leadership Changes

the aiwng rxrtogenarian chairman off Ministers. Pham Van Deng, and Politburo member Le Due Tho. TS. wai step down to begin the transition to younger leadership Severalas establishmentargely honorary Council of Eiderssurtaood that would enable retiring members of the old guard lo retain some Influence.viewed as an intenm choice when named to succeed Le Duan In July-may remain

Spry

conllnusd

Speculation about successors has centered on prominent advocates ot reform who have experience with the more dynamic southern economy. Nguyen Vanortherner who has spent much of his career in thesouth. Is the leading candidate to succeed Chlnh as

party chierfl h*ot much younger than ChWi. unh has become thc ranking member ot tho party Socrotortat since Le Duan's death. Other candidates for promotion include Vo Chi Cong, currently vice chairman of the Council of Ministers, and Vo Van Kiel, chairman of the State Planning Commission. Both have appeared prominently In Vietnamese media this year as spokesmen for economic rcforrt'^| afe^

Foreign Policy

Tho congress probably win endorse the tactic of conciliatory diplomacy as Hanoi continues Its efforts io eliminate Vietnam's occupation of Cambodia as an obstacle to relations with China, ASEAN, and the West. Moscow's efforts to Improve ita own standing inInurther inducement for Hanoi to appoar accommodating. Despite tentative signs of Vietnamese flexibility, however, auchecent proposal that would allow the Khmer Rouge to participate In negotiations. Hanoi's overriding security interest biominant position in Cambodia rules out any early compromise ^ ^ ;

The congress probably win also endorse continued cooperationUS on POVWMIA and emigration Issues and expects thatwill eventually ease the process of normalization onceissue of Cambodia Is resolved. Strong backing foron tho USSR, however, will remain the foundationforeign

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