Created: 2/6/1982

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National Intelligence Daily



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l'OUKUi Western Sanctions

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Franca now has agresd to support an EC proposal calling on the OKCi> to increase interest rate* on Soviet cwott credita. Nine KC Foreign Ministers arc exacted to formally approve the proposal when thoy meet this Thursday, but Greek opposition 9tilt nayoirhu-nity consensus on the issue.

The British Governineiit yostorday announced ameasurea to show displcasum with tho martialand its Soviet backers. London will grant noio Poland, restrict travel of Polish andand cut back Anglo-Soviet cooperation inas health, agricultural and atomic research,rights. London continues to opposeexisting contracts.

Bonn is expected to announce its en measures this weekend after the Foreign Officeinal rcvicv.

MfLicow Aiteonishes Polish Party

Fnads yesterday noted that although iwrtial law has restored order and created condition* forormallife" it leaves unresolved certain basic problems

whoso solution will depend upon "decisiveness, <m0 con-si stoncy"ho Polish party. The article citos eowmttnts^by Polish workers chatrty in tha past -a* unaUlucvpc with tnc political challenge posed by Solidarity, and it calls on the party to consolidate on the basis of "Marxism-Lenlnitm" and reestablish ties

Commonti ii^aui recently ha^ made several allusions to the continuing problems within the Polish party. 1ho repetition of this theme appears designed to remind Polish leaders at the importance Moscow attaches to revitalizing tho party. Although the reference toprobably is intundodign of support for hardliners, the allusion to tho challenge posed by Solidarity appears to ropresent an acknowledgment that the party also must recognize the need for popular support.I

Grain Purchnius

A government spokesman revealed this wcukis attempting toillion tonsand concentrated fodder from the West toneed this yearillion tons of Uefora martial law the Poles had contractedBullion tons of grain and soymeal from Canada,possibly West Germany and

CoiiJiiunti Poland now may have difficulty meeting its grain requirements booauso of restrictions licuxisad bvmi rha Fr ffj.ttttjuj.iiy its main suppliers.




GUATEMALA: Couutecinsurgency Effort

The move was prompted by tlic raccnt discovery that totalaro nearly twice the number esticaced earlier. I

The Army has formed three now bfcttalion-sizo units composed primarily of vetcrar.s, recalled to active duty. These forces willan task force set up late last year to operate in Quiche. Department against the country's major insurgent group, the Guerrilla Army of the Poor.

nits vill operate farther north in the Ixil ingle.

Conmcnt; 'Die sweep in the Ixil Triangle, along with the other operations in the area, underscores themant's commitmentong and tough campaign, based in partew awareness that tho insurgents have gained significant Indian support in the highlands. Although the three new units could add as manyen to the IS,coo-nan Army, large-scale sweeps are alreadythe Amy's manpower in other apnea of guerrilla activity.

b icoi'iury urn

clujias party journal attacks leftists

A kuuks arsisla it; red flagiiiM biz itf nro^ pgjitJdfcj i:

the load article in the latest issue of the party's theoretical journal urges that those who are leftists or corrupt be removed from leadership positions. it offers to allow those who entered the party66 to remain in good standing if they acceptbut it threatens sunraary expulsion formall number of cadres including leading cadros" who are op-rxent policies or are engaged in corruption.

over the past year, beijing has accused "bourgeois liberals" in the party's right wing of undermining party leadership. the new article, however, does not threaten this group with the sanctions proposed for the left.

comment: the article appears to signal another attenpi by deng and his allies to rid the party and state bureaucracies of the leftists who resist his policies. unlike the parallel campaign to streamline tho government bureaucracy, however, this new antlleftist effortlacks general endorseoent by the leadership. previous antileftist campaigns have provoked strongsome from members of theand were only partially

tho timing of the article suggests an effort to overcome continued opposition. deng nay believe he can exploit the current consensus in support of reforming the governncnt bureaucracy to move against the left.

6 hdrlufy-rlsz

ARSAW PACT: Allies Diverge Over Poland

Most NATO governments disagree with the US,Italian position that the West should use theIn Vienna to protest tho martial law regime Although they agreed to an openingthe talkii resumed last week that cited thethe Polish situation imposes on the.the llelgians, Dutch, andthe Kestbeen reluctant to bringin the negotiations. They argue that thopolemics could damage chances for progress in

Oorancjit: The Allies probably do not really expect progress but want tc- prevent any linkago with Poland that would further delay the long-stalled negotiations. They also will want to move faster than tho US and UK in presenting soma minor initiatives by the Wast Germans designed to keep the Hlil'H talks alive. ("

6 IcbruJiy njS2

MUXICO: Pinaneial Pressure

Mounting foreign payments problaas have caused another jump In capital flight and have renewedthat the peso win jjo aevaiuea soon. The overheated economy is causing tho currant account deficit to crow rapidly from an unprecedented SH billion leveloreover,illion foreign debt isthat of Brazil's, the largest LDC debtor, aad_Jjatetflu bankers aro growing wary of making new loans. [

if: Mexicandverse political reaction, have boon reluctant to deal with the progressive overvaluation of the peso. The peso would have to uc devalued by about Z5 percent to make exports mare competitive internationally, but Mexico City probably would go to groat lengths to avoidevaluation. Nevertheless, massive capital flight or greater reluctance on the part of foreign bankors to finance foreign payments

force the government's hand presidential electionuly.

after the

YUGOSLAVIA: Unrest in Kosovo

u ivusuvu iTwincc is worse

demonstrations aro continuing. that attacks on Sorbs by Albanian nationalists ate on the rise in sonc cceimunltios, and that unrnst is spreading to the Albanian ethnic areas in Macedonia and Montenegro. Tho source estimates chat0 people have bcou convicted of political crimes sinca the unrest beganear ago. The source claims that Ko3ovo is causing deepening divisions in the leadership.

Commenti Albanian nationalists may attempt to incite vorc violence during the anniversary next month of tho riots Such unrest vould in turn strengthen the determination of Serbian leaders to reassert tighterover Kosovo and their other "autonomousojvoiiina. The dispute over who should hold tho balance of power in the federal system is likely to carry over into the political inCighting before the party congress in June.

special akalys1s

ussr-nicar.wt'a' expanding ties

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to i- hccvj^jtfewmj-vlo fi.mkta^jelUn;i, t':c

VESk end ifeuid to jmksnie 'ijdc--. CapitahJolMneni.,c

the soviets have two main goals in nicaragua. they want the sandinista regime to consolidate its authority, and they wantse nicaragua as the centerpiece of their broader effort to foster the establishnant of other leftist regimes in the area. moscow hopes that revolutionary ferment close to the us will divertfrom mure distant problems and undercut its credibility with third world countries, particularly in lalir. america.

the ussr moved quickly to establish formal party links with the sandinistas, slighting the snail nicaraguan communist party in the process. inoviet

diplomatic mission was established in managua, and a

high-level sandinista delegation visited moscow.i

recently, such contacts have increased. they have included national directorate member arce's meeting with politburo member chernenko in october, defense minister ortega's meeting with defense sinister ustinov and chcrncnko in november, and premier tikhonejtis_weleome to foreign minister d'escoto in december,

economic aid

1 moscow and its east european0 million in credit and assistance to nicaragua. soviet financial aid ia being provided under the same kind of agreements that are usually reserved



tot such prime clients as Afghanistan and Cuba. The agreements call for aid to all sectors of the recipient's economy.

or gr

hiss allocated soeomillionyear credits for agricultural, roadDuilding, andequipment, and tho East Europeans haveillion in credit. The USSR and other CEMA countries also haverant0 tons of grain to offset the suspension of US deliveries.

The Soviets, however, have not provided the hard currency assistance the regime needs. They haveNicaragua against disrupting economic ties with its principal Western trading partners.

Military Assistance

The bulk of Soviet military aid is sent through

Cuba or other third countries. Deliveries soS tanks and artillory and antiaircraft weapons.

Although only aboutoviet military personnel arc in Nicaragua, as compared with theuban military advisers, they occupy vital advisory positions in tho Nicaraguan military and probably providesupport. The Soviets would be most interested in iaproving Nicaragua's Air Force and in strengthening its air defense system, including possibly adding woresurface-to-air missiles.

Soviet-Cuban Cooperation

Moscow and Havana share the view that Nicaragua is the key to building leftist power in Central America.

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Tne Soviets probably are alert to any indications that President Castro may be about to move too quickly or recklessly. They vill continue to develop their influence in Ilanagua in part to secure their own role while monitoring Cuba'sestraining those that seem too provocative to the US.

Working through the Cubans, the Soviets probably vill continue to keep their profile low enough to avoid provoking us countermoasures. They arc likely to probe the limits of US tolerance in the months ahead, however, nnd expand their military support if they conclude that the risks arc acceptable.

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