Created: 3/18/1985

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National intelligence Daily

Friday .


Warning Page

Con tenia



Increasing Hizballah Acilvism Iran-Iraq: Military Aciivlty

Brazil; Nuclear Prbgram Under Neve* Franco-Atrlca: Diminishing French Assisiance Notaa



Special Analyaaa

Alfonsln's Visit

International: Oebt Issues In Developing Counirles EC-Spaln-Portugol: Potential Delay In Membership




LEBANON-IRAN: Increaalng Hizballah Aclivlam

Radical LeOanese $hl$ groups, supported Of Iron, are attempting to expend their polilical, religious.awnwiae, acilvllles, especially In southern Lcfionon.


Such an aggressive campaign may bolster the appeal of lhe radical Snia movemem in the south where Amai nas traditionally been-dominant. Nonetheless, the Amal. which la in the forefront of the anti-Israeli campaign, ceriainly wHl resist such moves since theyirect challenge to AmaTs leadership in the soutn ajA




Iran's snick in rn* marthet appearsalthough

Tehran soon met/ launch nan operation* In lha central border region, eaaa

Cachdad ctalrns its irocpiareas Uiey

andstrengthening their defenses arognd me Iranian bridgehead. Tne speaker ol tne Iranian partlameni haa described Ihe attack In the


not an Iranian surfnce-to-sur

Baghdad says It will exempt the Iranian city of Borujero trom further allacks because tho citizens omhai clly have ataged dsmonalratlons against lha Iranian regime and_lhe war.

Iraq's claimorrayiifc-pomb


rement Of Iranian troops In the suggests thai otner attacks could be launched across the marshesizable diversion iry operation begun tanner north.

Atlhough ihe Iranians may bo trying to gel Soviet-made missiles trom Damascus and Tripoli for retaliation, they also could be alter weapons for air delense or chemical warlara that would help In the current offensive or weapons (or terrorist aitacka. Iran Ii likely lo continue to detonate bombs In Iraqi cities and claim they ore missile explosions.

Baghdad probably believes Its raids on cities are weakening Iranian morale. It is likely to Increase Iu missile and air attacka bui to ofler at the same time to spare other cities ana thus encourage fuober unrest




Nuclear Program Under Novoo

Prasldant Tancratto Novo* Is unllkel, soonroposo malar cnangtt InnsaToguardott davoiopmani ol sensitive


The aMi-infiuentlal military establishment. In particular strongly WOrtt Indigenous nuclear researchnd haa ssgnlfrcan.

^ kVhat program Nov.*appointea outgo ing vice President Chavesead the government ministry thai formally admmlsiart all civilian nuclear agencies. Chaves is wed-icd to the indigenous nuclear program and he la llheh/ to permit ihe Navy to

(3) 'oiec"an ,orw"


Argentine President Alfonsln last month io start highlyiplomatic negotiations on nuclear Issues, possibly including Iniernationtl or regional saioguards

.V"nd has worded effectively toM rolailonshlp with Ihe miliiary. while making it clear he opposes nuclear weapons development. He appears to have no personal desire either to drastically alter Brazil's nuclear program or to challenge ihe miniarys role In ft. Nevertneiess. he is tlKaly toopularity and crediMllyrl some influence over Ihe nuclear program. sbiiiiibsbsbbbss^^


To pits'o ere t


French Assistance


udget sharply reduces military ond technical easfifence to block Air Icon countries, further straining rotations

already mode tense byna"enge Libya's

continued occupation ol Chod.<

Military aid is being cutercent this year'and economic aid willercent. ataBBBBBaBBaBaaaVBaiBBBBBBBBaj(^BjBBeaBaJ Aid

programs lor such close French allies aa Ivory Coast.snd Djibouti have been affected. Including ain ihe number of technical personnel In Ivory Coast.French clloni states arereplacing departing French advisors and lhal evensupporters as Ivorlan President Houphoutt-eorgnvwith French , trt.

lations between brack Africa andhave endured the crises ol Oacoionlziuon, economic aecfcne. and lhe Socialist party victory In Franca Inare undergoing their most severe test because ol Paris's budget cuts and lhe*Ersncn withdrawal from Chad. This year's sharp reductions foflow-several years of gradual declineeak aid level of Si billion per yearmade France the principal Western power In black Africa.

^AHhougii Frence continues to claim its role in Africaey io Its statusorld power. It Is acutely aware It cannot fund its activities at previous levels. French officials now seek to snare oui the aid burdens with me IMF and the US', despite the likelihood mat French Influence wilt) African clients will diminishesult.




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In Brio'

Brazils President-elect Navel had emergency abdominal surgery lealeveeported doingas been In goodice President will take over whtlo Neves convalesces.)

Salvadoren Army has uncovered largest guerrilla supply cache since insurgencyontainsj weaponsto Outfit complete guerrta.ther supply caves being sought In centralovernment press conference soon.


planes set tire yesterday to-amori tanker on way from Kharkraq damaged another loaded tanker


announced It "soon" wM place on trial two Norih Vamenla who hllacked Saudi Arabian airliner to Tehran In earlytW no trial set for (our Mlackers of Kuwaiti airliner In December when Iwo US officials werejfsa


Chinese Viceeng mat wiih Soviet General Secretary Gorbachevirst meeting between Chinese official and top Soviet leaderoih expressed desire to Improve relations.

Soviets allowed prominent refusenlk couple to leave (or US Just

before ChemonKo'aost notable release of re(usanlks In two roars. eMaaj


South African Cabinet ministers' visit lo Mozambique yesterday underscores Pretoria's commitment to salvage Nkomatlelations strained recently by MozamWcan insurgentlaim. Prior*suoponinQ

Zalrlan President Mobutu recently sent troops to quo!nstigated by oome former members oloribund group banished nearly two years ago to central Zaireesponse reflects Mobutu', sensitivity to any hint of opposition.offfffh



Special Analysis





tlt Allonaln's visit to Waalilnglon nasi waeK It detlgned to genetete tuppori lor hit government boih intarnatloaallvomo. Ai/ontin probably vein ampnatita nit aastra to strongmen bllalsral relellont end took US tteaklng lor nit eltorts^tooblalrt generous treatment Irom Inlerntsllonel creditors. eaS La)


The President continues to enjoy Droad public supportercent inflation and rising unemployment, according io opinion polls, his governing Radical Party has been aided Dy serious dissension among the opposition Pcronists. Alfonim's rotations with the military and labor are strained, however, and in coming months he is lihety to lace mounting opposition to necessary economic austerity measures fff^ff-

The most Important ol Allonaln's foreign poecy successes to date is the signing ol tne Beagle Channel Treaty with Cnce. wnicn was overwhelmingly approvedopular referendum lastne treaty was raiiliefl by the Argentina Senatelose vote yesterda)

Aifonsin has been active In the Nonaligned Movement and participated in the six-nation disarmament conference in India early Hits year. More recenily. Foreign Minister Capulo has pressed him to avoid policies that would antagonize ine US. Allonsin appearse

trying to balance his tics wllh Ihe Wait and Ihe Third World in order toide 'rum ol*

To Ob Raised

,rVi lorcaC range

o' issues with US policymakers.

He proOably wat contend Argentina rt trying, despite out "Conies, to comply wttn lhe IMF austerity program negotiated late last year. Ho will ash that Washington influence commercial lenders to ease terms for dew rescheduling and now loans.

He is llhely to reouesi US assistance in resuming the stalled Argentine-British negotiations on tha Falkland islandsT



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On Cones! America. Allonsln probably will reassert his suppori lor tho Contadora process. Ho may seek assurances Iftsl tho US will not intervene militarily, but ne Is noi likely to stuck US policy openly.

He may argue that his government's relations wiih Cubayjo.r*er .vsc-vine seeds, are primarily commercial and are consistent win his cftorts toalanced foreign pohcy

Heo ask tnat the US siep up its support for tne spread ol democracy in Lalin America, particularly in Cnilc.

He mayew hemispheric forum* for discussion of regional issues.

thereossibility Allonsln may call on the US loew "Marsnali Plan" lor Latin America.

He is likely to express full support for the lighttrafficking in Latin America. Aifonsin hasactively lo combat growing cocaine

He may urge intensified arms control eflons by tho

superpowers, an issue on whicn he <eoit strongly. tagg0

allonsln may reiterate Argentina's recent endorsement ol safeguards on lis nuclear exports but Is unlikely to accept full International safeguard* on the grounds that they would Inhibit peaceful nuclear development. He alio may repeat his view that mo Non-proliferation Treaty. wNcn Argentina has refused to sign, discriminates In favor of countries thai possess nuclear weapons. (_


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Special Analyala

INTERNATIONAL: Debt laaues In Doveloplng Countries

International financial situation will remain under streas'lor the next three-to-llre years because ot virtually universal payment prcbtTmj In dsvelcplngrogress made thus ter will require cooperation and hard work by creditors and debtorslimate ol favorable world economic conditions. As early as this year, dllflcultles In meeting IMF goafs could lead to noncompliance In some countries, suspension of new money, and Increased creditor-debtor tensions, aajaam

unsealing development is me increasing stridency withdebtors are airing their linaneial troubles.erieswith their creditors. Latin American countries haveapply persistent pressure for additional debt solutions. Theirisolitical dialogue on debt ai the liignest levels ol

government in the industrial nations.

The outcome of the meetings lo date suggests that lailn debtors win continue to support point aciion so long as It docs not threaten Weir ability to negotiate individually with creditor banks and governments. This year Latin debtors seem oven more ready than before to urge changes in ihe policies and operations of official and private Western institutions and will be likely to demonstrate this at the comm.!ico meetings In April. Oebtors see their actions as being

largely responsible for concessions they received from commercial banks last yoar.esaitBjoa.

Major challenges to orderly International financing5 will relate to debtors' failure to comply with IMF-supported programs nnd creditors' reluctance to lend new money. Trade protectionism by industrial countries and continued high real interest rates also will be key Issues. Moreover, because these problems may preventtherepeating the progress * tho tone ol ihe Latin debtors' pronouncements may more strident.



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Special Analysis

Delay In Membership

publicly remain committed to bringing Spain Portugal Into Ihe Communityul some oftldsSs CMCBft iftsf tha Irr.sszze ever scccrr.'er:time-consuming proceduraldelay the new membershipelay probably would plunge Ihe Community Into another budget crisis end could complicate the Spanish Government's allorts to win puOllc support lor NATO membership.

Negotiations have stalled since December because-EC governments nave been unable lo agree on positions on the issues ol fishing rights, agriculture, and social ollalrs. Fishing rights lor Spain pose ine most serious siumblingblock; Portugal's negotiations are virtually comyieie. but Lisbon's entry remains tied io Madrid's, smmsmp

At issue ts now soon Spain's fishingworld'sbe granted access to EC members'ransition poriooofno moro than seven years, butwhich have suDsiannoi

lishing interests, (ear damage to endangered stocks and favor strict controls through the year

Time Running Oul

EC Foreign Ministers willajor eflort to resolve their differencesour-day meeting beginning Sunday in Brussels. Diplomatic reports indicate they are likely to reach agreements on wine and olive oil production as well as welfare benefits for Iberian workers in otherountries. The fisheries question, however, probably will need to be referred lo the EC Summit set lorarch. Also working to delay the deadline Is Greek Prime Minister Papanflrcou's threat lo veto enlargemcni unless ECmcmbcrsor agriciturni development in

EC officials believe Issues misf be settleO in principle Oy ihc end of this month to keep the lengthy procedures associated with ratifying the membership treaty irom-pushlng enlargement past the target date. Most ol thealional parliaments Involved coulO approve the ireaty by Oecember. bul ratification might become an election issue In France and Greece.

con firmed

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in fiance, the campaign tor next year's parliamentary election begins

this Ol'. ana Oaulllst candidates may argue that enlargement should

bo subjectational referendum, in Greece. EC aid could become

an issue In lhe parliamentary erection that is due by Octobere^|Bfa'fSk. rgj

Many EC otlicials believe that entry ins out ol ihe question, so that missing the deadline next January would pui oil entryne-year delay almost certainty would reopen the debate over EC finances that tentatively was seined last year. The EC Commission counted on enlargement nexl year snd planned to draw on the anticipated increase in resources to coverestimated S2 billion shortfall in5 budget. Unless Spain and Portugal are admitted nexl year, the Community is likely to face insolvency once



Spanish officials say puoiidy they can wait until more favorableonnegotiated. These siatemems probably are intended botn io exert pressure on EC members to compromise and to prepare the Spanish publicossible delay in entry


Madrid has linked EC membership to its continuing support (or NATO, and Prime Minister Gon^aie*probably hopes to maintain pressure on the Ten by claimingelay in EC entry couldegative impect on Spain's commitment to NATO. Spanish officials have toid us diplomatsompleted accession agreement probably would ensure public support (or NATOelerendum early next year, even il the agreement came too late to allow membership in



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