NATIONAL INTELLIGENCE DAILY

Created: 6/26/1980

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Content*

Situation Reports

vie tnam-Kaapuchea-'ltiai

USSR-Afghanis

Briefs and Comments

Greece: Statue of SATO Reentry

estern Sahara; Military Situation

China: Energy Conservation

westC: Sanctions

ir-wij Refinery

Special Analyses

Vietnam-Thailand: Triplications of

USSR: Food

Vrrr' june ivhu

SITUATION REPORTS

VIETNAM-KAMPUCHEA-THAILAND

SOKe fighting apparently io continuing along parte of the Thai-Kampuohean border!

[Pol Pot's

Chinese-Vietnamese Border

massive

rorces reportedly nave intensified their attacks against Vietnamese communications and supply lines in northern Kampuchea and southern Laos, and probablyecent attack on the rail line between Phnom Penh and Pursae.

'.nti Vrrri,

news reportshinee uuiitiup aiang zne Vietnamese border in response to Vietnam's attack into Thailand. Over the past year, the Chinese have- strengthened their forces near Vietnam

--continued

0

BRIEFS AND COMMENTS

GREECE: Status of NATO Reentry Bid

The t'.allis government may tHthdrau its application forreentry and reconsider the status of US bases if Greece isfull ntenber of SATC before the next cleation.

The government does not want opposition leader Papandreou and his Pan-Hellenic Socialist Movement to be able to exploit the issue. Papandreou, who opposes NATO reentry, has been gaining In popularity. The government could be defeated if it settled for less than the terms tnat existed before Greece withdrew from the military arm of NATO4 to protest the Turkish Invasion of Cyprus.

a

Athens also is linking US access to military bases new Defense Cooperation Agreement with the reentry Tho government announced recentlyuture military presence in Src-cc would not be. tcn-iblrthe NATO framework.

will produce a

'he Greeks hope that this pressure on Washington

more favorable proposal

bLdiiuo also is intended to counteract what it views as growing Western support for Turkey bncifliisc of itsvalue.

Till P ml.

ir> Jim* W'VAi

ESTERN SAHARA: Military Situation

Moroccan military forces arc prerfaring for an attempt byFront guerrillae torfor victory before or during next Peek'surmit conference, whioh brill aoneider the ieeue of recognizing the Polisario 'a Soharon Democratic Arab Republic, f

at Zaag last nonth.

government attributes the recent declineactivity to its effective patrols and toof insurgent infiltration routes. have withstood attacks on outposts atMesseied, and they may have inflicted moreon the Polisario than they took defendingassault on Guelta Zemmu--.

on

Western Sahara

Although the Moroccans believe that they aretheir position in the four-year-old conflict, they are aware of how fragile their recent successes could prove. Once the Moroccans relieved Zaaa, the Polisario may have decided to muster its resources for an opora-tion--such asajor populationwouldasis for its territorial claims

ie> June ivku

CHINA: Energy Conservation

China ia stepping up ito energy conservation program in responsexwked sl&Jdown in the grouth of iti energy production. [

h vice Minister with the State Economiclast week that energy use quotas will beindustries using large amounts of energy. China will allocateillion this yearthe energy efficiency of its industry.

Led by rapid growth in oil production,output increased at close0 Last year energybyercent; coal output was up 3and oil was up lessercent.

Energy production will increase at an eventhis year because of the overemphasis onthe last decode. Some Chinese officials that production might not grow and may evenresources must now go toward explorationof new oil and coal fields, output fromnot be available for years,

In addition to cutting energy usage, China wantsconsumption away from Oil. Beijing wouldarrels percurrentis burned in power andplants by converting the installations to

Conservation gains are becoming incroa&inglvand costly for Chinese industry. Toughincluding energy use quotas indicate thatexpect energy shortages will begin togrowth.

WESTC: Sanctions Exemptions

Bonn is considering issuing special exporta few small West German firms that signedIranovember,

^uch licenses would be qoverneo-byguidelines and be granted only incases/

Dunn empna-

sizes that the actionetreat from the EC sanctions decision. Under the agreement, member states may authorize exemptions after consultation with the other EC governments and the Commission.

0

IRAN: Refinery Shutdown

Iran's new refinery at Eafahan, which is capable ofarrels per day, has been shut down

snucaown coma causa at least regional oil productand add to Tehran's economic problems.

The first ofarrels-per-day refining units had been put into operation early this year, and the second had been scheduled for startup soon. The West German construction firm Thyssen, builder of the refinery, pulled out its workers in late

SPECIAL ANALYSES

VIETNAM-THAILAND; Implications of Incursion

Vietnam's intrusion into Thailand seems unlikely toof Hanoi's objeativee and thus may be followed byive voiced determination tc ttami up bo

l/anoi and have been buoyed by expressions of ASEAN support. Beijing haa oondmned the Vietnamese move.

Tho Vietnamesefirst serious military confrontation with Thailand since Hanoi's invasion of Kampuchea in Decemberprimarily intended to force Thailand to cease its support of Kampucheangroups. More specifically, it is designed to halt Thailand'* repatriation of Khmer refugees and to disrupt cross-border deliveries of supplies to resistance forces.

The attack apparently was timed to coincide with the beginning of the refugee repatriation program last week but seems to have been intended to demonstrateroader scale Vietnam's determination to maintain control over Kampuchea despite resistance activities andopposition. Coming only days before the meeting in Kuala Lumpur of the foreign ministers of thoof Southeast Asian Nations and Secretary of State Muskio's visit there tomorrow, the incursion also iato intensify ASEAN differences over policyanoi. I

Vietnamese ground forces have not yet ottnekod camps controlled by Pol Pot's resistance forces, which would involve more intense fighting. This suggests that Hanoi hopes its incursion will have the intended offset on Thailand without recourse to more sustained nllltarywhich could result in increased Chin*se--or even

i ii

Dangkok's Reaction

Vietnam may have underestimated the degree of Thai nationalism and determination. Although Bangkok has publicly played down the incident, the initial Thai re-

action has been to reaffirm

policies.

government, moreover, has halted delivery of relief supplies by air and sea from Thailand to Kampuchea.

ASEAN Reaction

The attack, in fact, has set back Vietnamesesplit ASEAN. oint statement, the ASEANdenounced the attack as "irresponsible" andthreat to Thailand and Southeast Asia.

Malaysia and Indonesia continue to fear that the Kampuchean conflict, by spilling over into Thailand, may undermine regional stability, and they probably willto urge Thailand to accept the reality ofdomination of Indochinauffer to Chinese Now, however, they will demand credible and Significant Vietnamese concessions in return for such recognition.

ASEAN leaders are particularly incensed by theof Foreign Minister Thach, who only last Saturday said in Indonesia that Vietnam would not send its troops into Thailand. Thach made matters worse after theby claiming that reports of Vietnamese involvement in the attack were rumors and distortions. H

The Kampuchean problem will dominate the ASEANministers' meeting. in addition, ASEAN membersSecretary Muskie's visit to presstrongto the incursion and to probe US policyand toward the seating of Pol Pot's reqirne in

unr

caution in bei

so far has responded cautiously to vietnam's action. in an official statement wednesday, beijing warned vietnam that it faces "grave danger" if it persists in military adventures in thailand and put hanoi on notice that the chinese are watching these developments closely.

china's caution probably stems from uncertainty over tho extent of the vietnamese operationesire to gauge thai, us, and asean reaction. if the attacks into thailand continue or escalate, beijing may feel compelled to increase its military activity along the sino-vxetnamese border-

the possibility of retaliation.

Zb0

Tip ffirnil

USSP: Food Shortages

Soviet consumption of meat and other quality foods is down comewhat because of the poor jrain harvest9 and the restricted availability of US grain. This shortage will increase consumer discontent and fiwther undermine worker incentives.

Por capita meat consumption,tandard by which the Soviet consumer gauges his welfare, probably will decrease byercent returning to about5 level. During the first four months of this year, milk production was up lessercent, mainly because of the livestock feed shortage.

Food shortages in the stores already appear severe and widespread in the USSR, and they are increasing.

phree-hour queues for moat are not

na cnat local rationing systems are common.

-uwAeinavu zviu ere ornsiais, da

u^ea ui muat, dairy products, fruit, and vegetables are the worst in many years. New special distribution systems operated by some industrial enterprises andare securing meat for their employees and limiting supplies for the rest of the population.-

Consumer Discontent

According to Western press reports, workers atautomobile and truck plants in Tolyatti andon strike in May, partly because of the food The Soviet authorities apparently mollifiedby temporarily increasing supplies of foodconsumer goods.

Food shortages also contributed to the unrest in Yerevan, Estonia, and Murmansk during the past year.

Strikes or demonstrations were reported in more thancities for two years following tho

Premier Kosygin, writing last July in thethe State Planning Commission, directly tiedof demand" to the Commission's planlabor productivity. Tn March, anoviet sociologistrominentargued that large investments in morewill not increase productivity unlessby sizable increases in goods available toconsumer.

Moscow sits Tight

The leadership nevertheless has shown littleto make difficult changes in policy, settling for stopgap grain imports and somewhat larger meat imports Although nationwide rationing might shorten queues andore equitable basis for it would be politically

Higher retail prices for food also would help bring demand down in line with supply, but Moscow insists on stable prices for basic goods. The Soviet leaders could be apprehensive about possible consumer reaction to food price increases, which provoked riots in the USSR in

Tighter restraints on growth of personalcould reduce demand. Such restraints would beenforce, however, during the coming period ofshortages.

The leadership hopesood harvest this year, but this alone will not solve the problem. Although prospects are good for an above-average grain cropillion tons, near-record imports ofons of grain will still be needed to raise theof livestock products substantially9 levels. Unless there arc noticeable increases in livestock product consumption over several years, consumer discontent is likely toroblem for Moscow.

mil

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