NATIONAL INTELLIGENCE DAILY

Created: 2/2/1982

OCR scan of the original document, errors are possible

C^C*

National Intelligence Daily

Tuesday

22

rs lb!i3

fiTI.

Ionten 13

Poland: fruie

USSR! Heightanad Cold Solas

Libya: Sit-ins of Oil

West Germany: Opp&eition Attitudes on

K*TO-spain: Obstacles to Madrid's

OAUi Comittee Meeting on Western

UsSK-vietriant Ogarkov's

Saudi Arabia: Jarani Cements on Oil

India-Pakistan: f 5

fcngoU-USSRi Improved Coaaial

Special Analysis

Tan imiii

i

"OLAND: Price Increasea

fhsiv hi latently hac not besn any immediate reaction toie& -Wirrsaaoa that vent into effect yesterday. ?hvUi 'Janok on -u'-wlv; jam lar-jare gejerwcni mbnits. Coli-

Steep food price increases took effect yesterday apparently without any major immediate reaction from the populace. At tho last minute, tho regime tried to soften the impact of the hikes by increasing the amount of food for sale, promising to monitor closely price changes on

manulactured goods, and increasing the value of savings

accounts byercent. It had earlier boosted

Commenti overnment communique issued last week on the price reform claimed that the value of wage compensation would exceed the amount of the price increases, other regime statements strongly imply that the consumer has not been fully compensated. The cost ofincreasedercent lastmost likely rise again The Increased market suppliesemporary measure that tho regime can sustain onlyhort time-Gdansk Demonstration

The demonstration in Gdansk on Saturday was larger than the regime nan admitted.!

of perhaps bu young people

started the demonstration outside the Lenin Shipyard, but it was Joined by workers changing shifts and othersrowd ofarched through town. Some in the crowd threw rock* at police and set fireolice vehicle. mall group, throwing stones and at least one "firebo-iS" st the provipcial party building, was dispersed by security forces.

Comment: The regime probably is most alarmed that shipyard workers were willing to join the demonstration. Since the imposition of martial law, the authorities apparently have fired the most militant workers--the

2

work force at the Lenin shipyard evidently ha* been reducedrder to maintain calm at the workplace.

Workers' concern about jobs and the problems ofreduced rations and randatory workprobably cooled their ardor for protest, Hut the Gdansk incident demonstrates that worker militancy runs deep and can be brought forth spontaneously.

Solidarity Activity

The Paris daily Le ftOxtfe has published the alleged government internment order for Solidarity leader Walesaritten statement smuggled out from him calling on Solidarity not to retreat. Keanwhilc, the West German press service reported that militant union leader Bujak had finally been

Comment: Walesa's appeal will boost the morale of tho Solidarity underground activists, but Bujak's arrest wouldey organizing talent. The documents published by Xnnae apparently are the basis for earlier reports that Walesa's status had changed.i-

2 February ITU

US;

Heightened Oold Sales Activity

hat dunhe intenutistu', jold vtketcKT,is airf^fiif senttiwrf to -take site*initial silse>

hen Its hard currency deficitold sales earned tho USSR (tore5 billion. The balance was covered by drawing down foreign exchange and increasing trade credits.V

Comment: If imports are not curbed, the USSH will needillion in hard currency this Moscow probably has already arranged about Siln

western credits. The remaining gap oust be covered by

additional western credits and gold sales.

For every SI billion not financed through credit, tho Soviets at today's price would have to sellons of

gold. MOSCOW'S*qoid stocks totalons and, consumption, the Soviets would have an additionalvailable for sale from current production,

The Soviets usually prefer not to sell goldear market.

The USSR, however, will need cash. Foreign currency reserves amount to less than two months' worth of imports. The crowing wariness of international_banks towardto Communist countries will make it more difficult

for Moscow to obtain new credits.

Large Soviet gold sales would further dampen gold price* and compound Moscow's financing difficulties. Demand for gold has already declined appreciably over the last few months, primarily because of tho higher real return on other investment* and market uncertainty over the amount of Soviet sales. Cold pricos also could weaken if the rich oilbuyers incurb purchases aa current account surpluses dwindle 1

I

scniarT

LIBYA: Status of Oil Production

US opgrntorcoitinvino to Wut Utiles tcohnieuvis, mostly uith Canadians and Oura-

Heeruitment offices have been opened in the US, Canada, and the UK to hire workers. Sow US workers in Libya also have been hired by the Libyan National Oil Company-

Tripoli cut prices0 per barrelanuary and has proposed an additionalquity discount to foreign operators. Nevertheless, customers claim that Libyan crude is still overpriced.|

Comment: Libyan oil production, nowillion barrels per"day. could fall toarrels per day this month because of the current soft market and Tripoli's pricing policies. If Libya reduces its prices, Nigeria, Algeria, and other producers would be forced to reevaluate their

4

1r>FT;.ll"/ 1VJ17

Maintenance of US-nanufactured equipment can beoy foreign employees of leading US service companies or by foreign companies.

RMANY: Opposition Attitudes on Sanctions

iucitialfact Gtrmui

lUVt UJJv i'l

-ii-tjgainst PoUvzi of the USSH, ext.-otight-

Tho moderates doubt the effectiveness of sanctions and claim that only those who violate them would benefit. Nevertheless, they find it difficult to express openly their basic agreement with the government's position.

Party conservatives pushedolicythe government's "soft" position before Chancellor Schmidt's visits to Washington and Paris strengthened public support for his policy of restraint. Tho moderates now feel compelled to stand by the conservatives, in part because they failed to support oonservativ* efforts tonified opposition to the government's budget proposals.

Comment: Moderates on the sanctions issue almost certainly outnumber conservatives in the Christian Deno-

cc.itic Union itselfr

advent of state elections later this yearthe moderates to workess aggressiveknow that the Social Democrats intend toelections as part of the struggle for power inthey believe that their party willif the voters concentrate on local issues anddistracted by concernhristianin Bonn would seek confrontation with

' 'i frtrtliry iy82

NATO-SPAIN: Obstacles to Madrid's Keir.be iShip

Spain's application to tiATG mill faces delays incapitate, wi aowHtie polities could scuttle it vj tha process is not oor^leted bj the proposed Alliance ewmit in Ju.te.

The Spanish want the ratification process completed in Lime for the NATO ministerial sessions in May but prefer to delay the meetings if all the Allies have not

approved their application by that

appeared likely tor some time I

ma nine months

face general elections within the next

bould seize

on this to continue delaying tneir ram icatlon. If the Socialists win as they are currently favored to do, they would be unlikely to pursue the NATO application,

i

OAU; Committee Meeting on Western Sahara

The OAV'm effort toeitlemnt of the Wiiin Sahara rtvbLem woiwc towrrott ulum ito eomittee on thu iiou* ffOnvenea

in iktirob-i.

The committee is to meet first at tho level ofministersisnmit session scheduled to begin on Sunday. It has not met since last August, when it formulated andaguely woruwd "draft*' Since then, Morocco, Algeria, and the Polisario Front have publicly interpreted the key sections of the resolution differently.

Kenyan President Mol, the OAO's currentsaid that the committee will try to broker aand also will discuss the issues of voterthe sodalitieseferendum, and an Mol said that the UN will furnishto assist with technical questions,

Moi wants to accelerate the peace process in order to complete it before his term expires. Tho Moroccans also are eagor for on OAU-sponsored referendum before Libyan leader Oadhafi takes over as OAU chairman this summer.

ComrcTit; Tim ;vi-w' wgo along with the OAU's plan to work out awith Morocco, which refuses directtheobably depends on Rabat'sto set up an effectiveote and to confine Moroccan troops Rabat, however, has shown littletake these steps.

The Algerian attitude remains the key because of Algiers' past pressure on the guerrillas to moderate their demands. Morocco's acquisition of advancedequipment since last fall probably has magnified Algeria's foars that King Hassan will proceedilitary solution if ho cannotote which legitinizas Moroccan control over western Sahara.

Z February

USSR-VIETNAM: Ogarkoj's Visit

Marshal Ogarkov, Chief Of" the Sovietin Vietnam tomorrowklong visit, lie

is the highest ranking Soviet military officersince I

1'i'nmnii Un- visit underscores thetary support to Vietnam at a time whenare rumored to be questioningon the USSR. The Soviets are unhappymisuse of economic assistance, and Ogarkovinterested in ascertaining whether the Vietnameseeffective use of the1 billionaid Mo r. cow has provided Evenmilitary aid were being sdsuacd. however, hewill offer more. Talks probably will also focusthroat closer Chinese-US strategic cooperationSoviet and Vietnamese interests in So.may arguo for greater Soviet use of

SAUDI ARABTA: uini Consents Oil Oil Sanctions

Oil Minister Yamani told the press last

Saudi Arabiat impose oil sanctions

US for vetoing the recent draft UN Securityon the Golan Heights. I

Comment: The timing of Yamani's interview lear signal' to Syria that tho Saudis are not prepared to diucuss economic sanctions against the US at the Arab League Foreign Ministers' meeting now scheduled forebruary. Although the Saudis are unhappy with the US for ignoring their offer to work for compromisein the UN resolution, they arc equally displeased

during the Security Council debate. |

I-TAN: Results of Discussions

The talks between India and Pakistan concludedin New Delhi with agreement to resume I'jli .clil ' : la : ne-

ment later this month. Prise Ministerroposaloint commission to Improve bilateral relations was also well received- I-

Comment! India hosted the talks to offset thePakistan had received by proposing tho nonaggrossion pact last fall. Gandhi's calloint commission also is designed Cor propaganda purposes and doe* notoftening of opposition to Islamabad's arms acquisition and nuclear programs.

Original document.

---

---