NATIONAL INTELLIGENCE DAILY 18 JUNE 1985

Created: 6/18/1985

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Ltbtnon: Nobir. Barri and Negotiations Egypt-Sudan: High-Level Meeting

Provincial ShaKoups Continue Turkeyi New Police Powers Bill New Zealand: Byoloctton Loss Chile: State ol Sioge Lifted

in Brief

Special Analyses

BrazK: Sarney* Economic Task

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LEBANON: Nabih Barri and NagotUtlon.

pal Shia Amal

lha TWA hijacking.

including tha release of Shies held In Israel. wiUand prestige in lha Shia community and place lha US In his debt.

t sto manipulate Ihe hi locking to his

advantage, he Is unlikely lo lorce the release of Ihe hostagesommaImenl by Israel lo Ire* Ihehia detainees. Bern's influence withckers Is Km>led. esoeclaay since some Of Ihem are Hfabelfeh sympathizers strongly opposed lo Barri'S more 'moderate poficlas. Shia radicals have made ma(or inroads kilo Amai's orgsniraiion In ihe southern suburbs of Beirut, and Berri's supporters mull be very careful in opposing,ore radical corellgionlsis ooenry.resources ore further strained byour-week-old campaign against Palestinian fighters besieged in Beirut refugee camps.

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Meeting

EQYptian Presidonl Mubarak made an unexpected one-day trip to Khartoum yesterday to meet with Military Council Chairman Suwar ol-Dahab for the tirst time since the coup In April The delegation accompanying Mubarakincludodefense, Foreign Affairs, and Interior Ministers.

rip Is pariew Egyptian strategyLibya's growing Influence in Sudan. Itby Ihe visit to Khartoum lasl weekend of Libyanol Staffd hall's personal envoy. Suwarhave encouraged the moeting with Mubarak tocriticism thatgjme is unable to contain

in Sudan.

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US-Chinese Relation* Praised

Beijingofficial English-language Journal. Belting Review, has praised "impofianl steps" by President Reagan lo improve US-Chinese relations, including Ms handling ol obstacle* posed by those in the US favoring Taiwan. The journal also highlighted tho administration'sto -reverse" the US-Soviet military Imbalance ol four years ago epeated, however. Beijing's aiaridardc-iticism of alleged US opposition to popular Thud World policies, mmJkWM

Beijing Is trying toositive almospiio'o fo< the visit ol Prosideni LI Xlannian to the US next month. The language In ihe article is the warmest since President Reagan's visll to China last year. The favorable characterization or Ihe adminisl ration's handling of Taiwan-related Issues may be Intended to offset comments last month by General Secretary Hu Yaobang on Ihe possible use of force against Taiwan aa well as Ihe eanceHailonisit by US naval ships io China. Similarly, the comment on reversing the US-Soviet military imbalance seems designed to esiabHsh en implicitly anti-Sovlei viewpoint on strategieissues despite improved Sino-Soviet relations.

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CHINA: Provincial Shskeup* Continue

In Ino largest reshurfle since. nearly nail ol China's 29

provlnclaMevef pany chiefs may be replaced by ihe end ol June. Eight

lirsi secretaries have stepped down since April, and more changes

are expected before Iheune deadline lor province*

reorgaruiatKNi set by General Secretary Hu YaoDang Most ol lhe

new party secretaries are In lhe- SOs. and several have college

educations, conforming lo Selling's Ideal ol younger and(3)

educated (Fade's. WMMJl

I he leadership changesign ol relormiel(3)

as Oeng Xiaoping and Ms proteges prepare lot the partyscheduled in September. Local resistance may beprocess, however. New parly ctWets for Yunnan andpublicly named last month by Hu Yeobang. have yet loconfirmed in their aaaXgnments. Some ol the new partybeen selected Irom relative obscurity, and iney probablyties lo Beijing's relorm leadership ihan toheir(3)

It Jane teas

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TURKEY: Haw Police Power* Bill

A controversial new bif lhal give* sweeping powers lo Ihe poke*o pulirein on Turkey's relations with Western Europe Prima Minister Orel darns the bMI is necessary to allow Ihe government lo maintain law and order when national martial law is compktloly lifted, out Ihe opposition. Inducting some members ol Otal's own Motherland Party, say ll willolice stale. Socoiists In Western Europe have bitterly the bill, and EC officials have warned thai il wil cause further deterioration In Turkish-EC relations. Oral has reacted strongly, accusing the EC o' interfering affairs $Mm%W

Themay be the Oial government's most controvorvai of legislation. The law defines broad new areas of responsibility tor ihe police, such as regulating moral Behavior and controlling dubs and organizations, and permits peace to hold suspects for up to IS days lo> Crimea involving anlistat*conspiracy, drugs, or smuggling. The strong protests from Western Europe and Ankara's harsh response almost certainly will lurther damage relations already slremed by humanssues frozen EC aid. and EC Quotes on Turkish taaliles-

ZEALAND: By election Lose

The Strong swing away from the Laorjr Parly in lasl Saturday's byelecilon will be particularly embarrassing for Prime Minister Lange's government. Lange had involved his entire Cabinet ki lhe campaign Labor's share of the vole droppedompared withercent in Ihe national election last year. The opposition National Party wonerceni and Ihe rightwing New Zealand Party wonerceni in the largest voter turnout aver.ow Zealand

kmuWHfmW Although many local observers ihe -on-ejec lionehwing candidate, parly insiders will blame Finance Minister Douglas's austere economic policies. They will die the large turnoutepudiation of Lange's economic reform program and won increase pressure In the parly caucus lo return to traditional weffare-State pobCles. The announcement on Saturday that the government wouk) postpone Introducing its new sales taxlast-ditch effort to save thethai Lange's moderate faction is already shaken. The previously sagging political fortune* of opposition leader McLay, meanwhile, will Be Boosted By the victory. Al Ihe same time, the balloting shows Ihat the neutralist New Zealand Party and ils charismatic leader BobJone* cnnimue to win New Zealand's young conservatives

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StaleSiege UtM

Tne lining ol the seven-mono-old atate ol siege In favor Ol estele ol emergency probably will lead lo an increaseprotests. Interior Minister Garcia claimed edropviolence fusinted the action and seld lhe governmentrestore freedom of Inlormetion He noted met somaand Bmrts onolitical partycontinue.media wu

alii oe pronlbiled (rom reporting such events es terrorlal eels end antasgame protests, that the nightly curfew wW be retained- and lhat the government can coniinue to relegate opponents lo Internal exile.

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Moderate opposition parties probably will try lo capitalize on tbe more open climate by promoting large-scale protests, and some(he Christianbe more willing lo collaborate with the Communist Party. Terrorism, which continued unabated under the Stale ol siege, may now become more lethal as lhe radical left attemptsrovoke en overreactlon by the regime. |

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In Brief

Domes-He reactions mixed thus far to Argentina's tough oconomicpposition Peronista and their labor allies stronglyusiness leaders cautiouslyost Argentines adopting wait-and-see attitude.I

Recentdtcetes cocaine and mariiuane abuse Incmavng "piOli.lHI PseetjHl- Spreading to lower classes, probably refiectir""flreaier supply, lowerublicityid US effortsi-wiu aitentlon onssue eaeTaeY*

eeseseseeaesesBeseseeS

politicalnciting villagers against narcotics police. forcing withdrawal In somecattered violence Is setback lo eradication efforts.

Jordanian Prime MinisterissaflesaVPlanning minor Cabinet changes lo consolidate his control over policyikely to shift Foreign Minister and remove Finance and Information Min stars

Tunisia has raised luel snd sugar prices as much asercent to trim budgetill link future hikes lo wageeasures leaatisfy demands tor read wagenions and poor noted over food prices last year.

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Soviet industrial performance through May showed continued improvement from winterpercent over seme period laslut oat produclWrirematned Mat de spile management overhaul, extra workers (fl

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Central Commtiiw jaWon beginsarty leader Husek may suggest edjustments to domestic, econornicats for Soviet economiceportedly made some Czechoslovak hardliners nervous.

Hungariansplan to buy Peetsh debt paper at targe dlscounl due to Soviet pressurean led payment from Poiand in hlg.vquatltyoscow apperentry objecilng because arrangement outside regular CEMA trade structure.

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Zalrien cHssidentsanzania a

eastern Shaba region yeslerday

key facilitiesibya almost certainly support

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Sri Lankan insurgents blew up section Of railway connecting Colombo witn northern city o' Jaffnaossible retaliation for security forces' killing olamil Insurgents Friday may rt nder progress loward newssoaa

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IS June <OflS

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Special Anaryaia

Economic Task

Prmttdmnt Serney'e attempt lo atrengthen Hitoiltlcml baa* within thm two-pmrty ellleneeby the far* President-elect Moves imig Impact on determining economic policial. In particular, Sarnefa vulnerability to pressures Irom lett-ot-center elamanta In Aleve*'* party may pertand problems tor the civilian government's nascent economic stabilisation effort.

Sarney came lo power three months agoime ot crucial setbacks ,to economic stabilization. In February lhe IMF suspended its support because Brazil missed targels for controlling monetary growth and trimming tho public deficit. Foreign banks, in turn^postponed negotiationsultlyear debi rescheduling.

in addition. Brazil's exports weakened and inflationhe first quarterlthough economic performance improved in April and May. many Brazilians areill be sustained.

al Constraint*

Brazilian Democratic Movementdominant force in the rulingnot trust Sarney because of his previous affiliation with military-backed parties. Accordingly, he has felt obliged to give the party. Including its many left-of-corneroice In economic poNcyjM

Sarney has Increased Ihe Influence ol Planning Ministeravorite ol Ihe party's led. lo rival that of the more orthodox Finance Minister DomeWes.ntended economic czar. He also has indicated he wifl seek approval for ma|or decisions from Brazil's Congress, where Ihe Democratic Movement is lhe largest party.

Approach

The administration to date has made lew major economic policy pronouncements and has notear commitment lo stabilization. In March Dornellea announced several tough austerity measures, but Neves's Illness impededion. In lhe fallowing months the administration6 billion social program proposed by Sayad and doubled the minimum wage, complicating efforts to restrain lhe budget and dampen Inflation.

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