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Ronald Reagan Presidential Library Digital Library Collections This is a PDF of a folder from our textual collections. Collection: Executive Secretariat, National Security Council: Agency File: Records Folder Title: State INR Morning Summary (12/23/1983-12/24/1983) Box: RAC Box 8 To see more digitized collections visit: https://www.reaganlibrary.gov/archives/digitized-textual-material To see all Ronald Reagan Presidential Library inventories visit: https://www.reaganlibrary.gov/archives/white-house-inventories Contact a reference archivist at: [email protected] Citation Guidelines: https://reaganlibrary.gov/archives/research- support/citation-guide National Archives Catalogue: https://catalog.archives.gov/ WITHDRAWAL SHEET Ronald Reagan Library Collection Name EXECUTIVE SECRETARIAT, NSC: AGENCY FILE Withdrawer CAS 12/3/2008 File Folder STATE INR MORNING SUMMARY VOL. I 11/22-12/31/83 FOIA [12/23/83-12/24/83] M08-099 Box Number 8 STOCKER 11 ID Doc Type Document Description No of Doc Date Restrictions Pages 1. 57287 LIST RE 12/24/83 DOCUMENTS (W/NOTATIONS) 1 12/24/1983 B1 R 1/17/2001 NLSF97-044 #8 2. 57288 REPORT CURRENT REPORTS 3 12/24/1983 B1 D 1/17/2001 F97-044 #9; PAR 5/7/2010 M08- 099/1 #57288 3 57289 REPORT RE ANALYSIS 3 12/24/1983 B1 PAR 5/10/2001 NLSF97-044 10; R 9/16/2010 M08-099/1 #57289 4. 57290 LIST RE 12/23/83 DOCUMENTS (WITH 1 12/23/1983 B1 NOTATIONS) R 1/17/2001 NLSF97-044 #11 5. 57291 REPORT CURRENT REPORTS 3 12/23/1983 B1 PAR 1/17/2001 F97-044 #12; PAR 5/7/2010 M08- 090/1 #57291 6. 57292 REPORT RE ANALYSIS 3 12/23/1983 B1 R 5/10/2001 NLSF97-044 #13 Freedom of Information Act - [5 U.S.C. 552(b)] B-1 National security classified Information [(b)(1) of the FOIA] B-2 Release would disclose Internal personnel rules and practices of an agency [(b)(2) of the FOIA] B-3 Release would violate a Federal statute [(b)(3) of the FOIA] B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA] B-6 Release would constitute a clearly unwarranted Invasion of personal privacy [(b)(6) of the FOIA] B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA] B-8 Release would disclose information concerning the regulation of financial Institutions [(b)(8) of the FOIA] B-9 Release would disclose geological or geophysical Information concerning wells [(b)(9) of the FOIA] C. Closed in accordance with restrictions contained in donor's deed of gift. EXECUTIVE SECRETARIAT BUREAU OF INTELLIGENCE AND RESEARCH MORNING SUMMARY December 24, 1983 Current Reports 1. Terrorism A. More Reports of Lebanese Shia Threats B. Threat to US and other Embassies in Saudi Arabia 2. Italy: Pertini Calls for Withdrawal of MNF Troops 3. Lebanon: INR Military Update 4. PLO: Arafat Sees Need for a Government-in-Exile 5. Israel: Shamir Maintains Shaky Coalition 6. USSR/PRC: An End to Euphoria 7. USSR: Tough Posture on INF 8. Nicaragua: Withdrawal of Cubans a Ploy 9. Vietnam: Reshuffling of High-Level Officials Analysis 1. Kuwait: More Trouble Ahead 2. SPD Foreign Relations: Western Fence-Mending, Eastern Dialogue 3. El Salvador: A Decisive Political Phase Begins NLS F97-044 DECLASSIFIED #8 # BY CA, NARA, DATE '/17/01' Classified by: M. Charles Hill and Hugh Montgomery Declassify on: Originating Agency's Determination Required TOP SECRET/EXDIS/CODEWORD EXECUTIVE SECRETARIAT E.0.12958 57280 BUREAU OF INTELLIGENCE AND RESEARCH As Amended Sec. 3.3(6)(1), CURRENT REPORTS 3.5(c) 1.4(c) December 24, 1983 2. ITALY: PERTINI CALLS FOR WITHDRAWAL OF MNF TROOPS Italian President Pertini told journalists December 23 the departure of Arafat and the PLO fighters fulfilled the requirement for the withdrawal of the Italian MNF contingent from Beirut, Embassy Rome reports. A senior foreign ministry official said that Pertini made the remark, but the official Italian position on the MNF remains the same--no unilateral withdrawal. He said Italy will continue to work with the other MNF members for the earliest possible withdrawal. INR Comment: Pertini's comments will embarass the Craxi government and further weaken support for the MNF commitment. Nonetheless, government leaders will not want to be seen in hasty retreat from the MNF. Pertini and key aides earlier had suggested privately that a change in the status of Arafat and the PLO would present Rome with adequate rationale for extricating itself an argument Pertini emphasized in his comments yesterday. (SECRET/NOFORN/NOCONTRACT/ORCON) DECLASSIFIED IN PART NLRR M08-049#57288 BY RW NARA DATE 5-7-10 TOP SECRET/EXDIS/ TOP SECRET/EXDIS/ - 2 - 4. PLO: ARAFAT SEES NEED FOR A GOVERNMENT-IN-EXILE In an interview with a Saudi newspaper, Arafat reportedly said he is "convinced more than ever following the recent events in Beirut and Tripoli of the need to form a Palestinian government-in-exile." He said that he will submit his proposal to the Palestinian National Council at its February meeting in Algiers. INR Comment: The creation of a Palestinian government-in-exile has long been urged by Egypt but resisted by Arafat. If correct, this report would suggest that Arafat now counts on the creation of this government, his selection as its head, and its recognition by the moderate Arab governments to maintain his leadership of the Palestinians and to discredit his Syrian-supported rivals. (CONFIDENTIAL) 5. ISRAEL: SHAMIR MAINTAINS SHAKY COALITION PM Shamir's low-key leadership and his successful Washington visit have bolstered his prospects for maintaining his coalition throughout the winter Knesset session, Embassy Tel Aviv reports. Nonetheless, political maneuvering within the coalition and deep public concern about the economy still threaten his government. Labor Party leaders, muting their own rivalries, are confidently attacking the government's economic policy while the government trails in public opinion polls. Embassy Comment: Shamir does not have much time remaining to demonstrate progress on economic issues. Unless he does so, the public will lose confidence in his government. (CONFIDENTIAL/EXDIS) 6. USSR/PRC: AN END TO EUPHORIA Sino-Soviet relations failed to progress during 1983 at the pace foreshadowed in the last months of the Brezhnev regime, Embassy Moscow reports. The Soviets are increasingly disillusioned with China's policy of "equidistance" between the superpowers, seeing China tilt westward on key issues like INF. Moreover, the growth of US-Japanese-South Korean military cooperation has convinced the TOP SECRET/EXDIS/ TOP SECRET/EXDIS/ - 3 - Soviets that they must reinforce their military capability in the Far East and bolster their Vietnamese ally, to the detriment of Sino-Soviet relations. Finally, Andropov has a more skeptical and ideological view of China than Brezhnev. Thus the Soviets, while pursuing cooperation with the PRC in areas that serve Soviet interests, will show new willingness to criticize Chinese policies. The possibility of substantive Soviet concessions on important bilateral issues is more remote than ever. (CONFIDENTIAL) 7. USSR: TOUGH POSTURE ON INF Four Soviet political-military specialists told French Embassy officers that the INF talks are dead, Embassy Moscow reports. Soviet security is now the paramount issue, according to these specialists, and the Soviet Union will match new US INF missiles one-for-one. The Soviets carefully differentiated between INF and START and spoke of the need to reevaluate the Soviet position on strategic arms. They gave the impression that the delay in resuming START talks might be lengthy, lasting until the US election or longer. (CONFIDENTIAL) TOP SECRET/EXDIS SECRET/NOFORN/NOCONTRACT/ORCON 57289 BUREAU OF INTELLIGENCE AND RESEARCH - ANALYSIS - DECEMBER 24, 1983 1. KUWAIT: MORE TROUBLE AHEAD The Kuwaiti government believes the December 12 bombings were part of a broader threat to its survival. It is implementing strong security measures, but they are not likely to prevent further trouble. The government needs a lull to assimilate the lessons of the first round, but the Shia militants and their foreign sponsors will probably keep up the pressure. * * * DECLASSIFIED NLRR M08-D94#57889 NARA DATE1/16/10 The bombings targeted not only foreign embassies, but also facilities critical to the operation of the state. While the attacks on power, desalinization, and oil installations largely BY RW misfired, the bombing of the airport tower disrupted radar cover- age for the air-defense system, as well as for civilian traffic. Arrests since then have uncovered Shia "Da'wa" party cells possessing large quantities of small arms apparently brought in from Iran. The government believes it faces a continuing threat to its survival. It is implementing a get-tough policy long advocated by security officials. Suspected troublemakers face arrest and summary deportation. The government's ability to carry out this policy effec- tively is questionable. While most residents have a stake in its survival, Kuwait is not a well-integrated society with a leader- ship enjoying broad and unquestioning loyalty. Government suspicions focus on the 30 percent (290,000) of Kuwaiti citizens who are Shia, as well as on the 105,000 expatriate Shia (65,000 Iranians and 40,000 Iraqis and others). Most of the Shia who are Kuwaiti citizens are reportedly sympathetic to Khomeini, and a government clean-up of Shia troublemakers would probably increase that propensity. Some 60 percent of the population and about 78 percent of the labor force are expatriates. Most of the 350,000 Pales- tinians are quiescent, fearing deportation. Recent arrests of PLO members, however, could provoke retaliation by Syrian- or Libyan-backed groups. The security forces are hobbled by concern about the many Shia in their ranks (rarely in command positions). Evidence of treason by one or more senior military officers has already surfaced. Army ranks are 80 percent or more composed of Saudi and Iraqi Bedouin whose loyalty is nearly exclusively to self, family, and tribe. Facing these problems, the leadership above all needs time to make realistic security adjustments and recover its confi- dence. We believe, however, that the Shia militants and their foreign sponsors scent the government's weakness and will press ahead to keep it off balance. SECRET/NOFORN/NOCONTRACT/ORCON SECRET/NOFORN/NOCONTRACT/ORCON - 2 - 2. SPD FOREIGN RELATIONS: WESTERN FENCE-MENDING, EASTERN DIALOGUE SPD leaders agree they must cultivate ties to other social- ists and to ruling communist parties if they are to influence world affairs, maintain pressure on Kohl, and recoup electoral support. The SPD agenda now is to better contacts with the Soviet, East German and Polish parties, mend fences with the French socialists, and strengthen the Socialist International. * * * INF has cost the SPD dearly--as much for associating with communists to oppose deployment as for the policy turnabout. Clandestine reporting reveals a very concerned SPD inner- circle: critics warn of the party's isolation over INF and demand renewal of ideological tension with communism; they see Willy Brandt looming over an ineffectual Vogel. With French alienation rising, SPD leaders have met with Mitterrand and the PSF several times since November--with little agreement on security or EC issues. Egon Bahr winced when the PSF hinted it was seeking a security dialogue with southern European social- ists commensurate with that of the SPD in the north. The SPD has sought Swiss and other assistance in ameliorating party-to- party tensions. The small European socialist parties, often taking their cue from the SPD on security issues, are alarmed over the party's INF flip-flop and its potential damage to overall socialist credibility. Their concern is borne out by the Italian communists' positive assessment of the SPD's and Brandt's role in the peace movement as a way to rid it of its communist stigma. In the East, the SPD fuels Ostpolitik through its own con- duits. Within the SI it hopes to revitalize East-West dialogue by having socialist prime ministers lobby the superpowers to resume arms talks and by endorsing Palme's nuclear-free-zone proposal. The party's pessimism in the security arena--and Brandt's own gloom--make them ideal targets for Soviet wooing. Moscow couples prophecies of doom with its high-level courtship of Brandt and deliberately contrasts its red-carpet treatment of SPD leaders with that which the US accords. A recent internal SPD study concludes that SPD ties with East German and Polish parties are second only to those with the CPSU, but ties with the Romanian and Czech parties are virtually useless. Embryonic ties with the PRC are to be aided by a Brandt visit next year. In its informal exchanges with Havana, the Cubans--like the Soviets--play on the SPD's SI role. Prior to last month's SI meeting, Havana made its case on Central America and Grenada to a Brandt aide--paralleling Moscow's warning to Brandt of an imminent US invasion of Nicaragua. SECRET/NOFORN/NOCONTRACT/ORCON SECRET/NOFORN/NOCONTRACT/ORCON - 3 - 3. EL SALVADOR: A DECISIVE POLITICAL PHASE BEGINS With the promulgation of the new constitution and the selec- tion of a spate of presidential candidates, El Salvador enters into a decisive political phase. No candidate has the strength to capture the presidency in a first ballot, and coalitions are expected to form for a run-off election among the top two vote- getters. The plans of the guerrillas for disrupting or discred- iting the elections remain unclear. * After an 18-month gestation, El Salvador's new constitution entered into force on December 20. Its mandate achieved, the constituent assembly transformed itself into a legislative assembly which will sit until April 1985. Coincident with the new constitution, three political parties nominated presidential candidates, bringing the total number of aspirants to five. There are no surprises in the candidates selected; each party's titular leader received the nod. The two leading candidates are Jose Napoleon Duarte for the center-left Christian Democratic Party (PDC), and Roberto D'Aubuisson for the rightist Nation- alist Republican Alliance (ARENA). Party members and Salvadorans abroad reportedly attempted unsuccessfully to derail 'Aubuisson's candidacy on account of his poor international reputation. None of the parties has selected a vice-presidential candi- date, probably in anticipation of coalition offers from rivals. However, it is unlikely that coalitions will coalesce before each party has tested its strength with the electorate in the first round of a presidential contest, and vice-presidential candidates will probably be initially selected from the ranks of each party. The only such candidate bruited so far is Foreign Minister Fidel Chavez Mena, who has been reluctant to accept his selection by a PDC nominating convention. Specific actions the guerrillas may take to discredit the election remain uncertain. Their experience in March 1982 probably has convinced them that they cannot stop the balloting on a country-wide basis. Guerrilla forces, however, are likely to continue to intensify military operations in eastern El Salvador in order to render the electoral climate there extremely tenuous. In a September meeting, Cuban President Castro reportedly urged such an intensification on guerrilla leaders, according to a clandestine report. In addition, insurgent military successes might prompt the long-rumored proclamation of a "liberated zone under insurgent control" as a means to discredit the voting. SECRET/NOFORN/NOCONTRACT/ORCON EXECUTIVE SECRETARIAT BUREAU OF INTELLIGENCE AND RESEARCH MORNING SUMMARY December 23, 1983 Current Reports PR 1. Lebanon: INR Military Update 2. Jordan: Preparing To Deal with a Post-Tripoli Arafat 3. Egypt: Arafat's Visit 4. Kuwait: Arrests of Palestinians 5. Greece: Progress Possible toward Cyprus Settlement 6. France: Planning Rapprochement with Soviet Union 7. USSR: Dobrynin To Skip Party Plenum 8. Afghanistan A. Mujahidin Abandon Border Post B. Soviets Lukewarm about Cordovez Mission 9. Bulgaria/USSR: Differences Grow during Andropov Era 10. Nicaragua/El Salvador: Arms Traffic Continues Analysis 1. South Africa/Angola: Few Risks in the Military Withdrawal 2. USSR: Waiting for Andropov 3. Argentina: Fast Start for Alfonsin DECLASSIFIED NLS F97-044 #11 Classified by: M. Charles Hill and Hugh Montgomery BY Co NARA, DATE 1/17/11 Declassify on: Originating Determination Agency's Required TOP SECRET/EXDIS/CODEWORD DECLASSIFIED IN PART NLRR M08-099 #57291 EXECUTIVE SECRETARIAT 57291 BY 3 NARA DATE 5-7-10 BUREAU OF INTELLIGENCE AND RESEARCH E.O. 12958 CURRENT REPORTS As Amended Sec. 3.3(b)(1) 3.5(c).1.4(e) December 23, 1983 1. LEBANON: INR MILITARY UPDATE There was a brief exchange of gunfire yesterday involving the Marines. The evacuation of the Christian enclave of Dayr al Qamar continued with only one incident when a motar round struck a vehicle, causing one injury. Most of the Phalange personnel have now departed, but an estimated 2,000-3,000 civilian refugees are still to leave. Before leaving Tripoli on Monday, Fatah forces turned over most of their heavy weapons to the Islamic Unification Movement, a Lebanese Sunni group. Five hundred Fatah evacuees are in Iraq, and the majority of Arafat's forces are en route to North Yemen, with a smaller contingent destined for Tunisia. 2. JORDAN: PREPARING TO DEAL WITH A POST-TRIPOLI ARAFAT Arafat's willingness to cooperate with King Hussein to revive the peace process will have a profound effect on Jordan's future, Embassy Amman reports. Hussein had hoped either to co-opt Arafat in his present weakened state or to circumvent a Syrian-dominated PLO by enlisting non-PLO Palestinian representatives in talks with Israel. Hussein must prevent a PLO-Syrian rapprochement which could destroy the chance of Arafat's joining his peace effort. The king will therefore try to resume the dialogue with Arafat, seeking the Palestinian cover he needs to go forward in the peace process. If Hussein fails, he will have to explore other options regarding the West Bank and Gaza. (CONFIDENTIAL) 3. EGYPT: ARAFAT'S VISIT Arafat's visit to Cairo and meeting with President Mubarak was formally denounced by the PLO's Executive Committee in a statement issued in Tunis. The PFLP, DFLP, PFLP-GC, and Fatah dissidents also condemned the move. INR Comment: Arafat's decision to meet with Mubarak, after his military defeat in Tripoli, may be meant to counterbalance the Syrians and reassert his importance as a key player in inter-Arab politics. He also has alerted his Palestinian colleagues that, on some issues, he is ready to take a more independent line in the post-Lebanon political environment. (CONFIDENTIAL) TOP SECRET/EXDIS/ - 2 - 5. GREECE: PROGRESS POSSIBLE TOWARD CYPRUS SETTLEMENT Prime Minister Papandreou told Ambassador Stearns December 22 that movement is possible toward a Cyprus settlement despite the tense situation there. UN Secretary General de Cuellar must take the initiative, Papandreou said, because Turkey's recognition of Northern Cyprus prevents useful discussions among the guarantor powers. Papandreou, who is preparing for discussions with Cypriot President Kyprianou, said the essential elements of a settlement should be: departure of Turkish and Greek forces, reduction of the land area controlled by Turkish Cypriots to perhaps 25 percent of the island, and a government with a loose federal structure. Ambassador Stearns' Comment: Papandreou is aware that most observers believe he exerts pressure on Kyprianou not to compromise. It is possible that Papandreou wished to record his "flexibility" in advance of Kyprianou's arrival. (SECRET/EXDIS) 6. FRANCE: PLANNING RAPPROCHEMENT WITH SOVIET UNION France plans to strengthen political contacts with the Soviet Union, inviting First Deputy Chairman of the Council of Ministers Arkhipov to visit France early next year, Embassy Paris reports. In a number of recent statements, President Mitterrand has signaled a desire for improved dialogue with the Soviets. The INF debate and the explusion of 47 Soviet diplomats weakened the ties that Paris formerly main- tained with Moscow. Now that the first deployments have taken place, the French have decided to move. The government does not want to let the FRG take the lead in promoting East-West dialogue. Embassy Comment: The rapprochement will be limited, at least for the time being. INF and the question of UK/French forces will not go away, and the Mitterrand government's tough-minded view about dealing with the Soviets is unlikely to change. (CONFIDENTIAL) 7. USSR: DOBRYNIN TO SKIP PARTY PLENUM The Soviet Embassy has requested the customary VIP arrangements for Dobrynin's arrival at Dulles Airport on December 23. INR Comment: Dobrynin has missed the year-end plenum and Supreme Soviet session several times in the past. During his month in Moscow, he presumably reviewed US-Soviet relations with his principals and may have contributed to the drafting of a Gromyko speech for the Supreme Soviet session which begins on December 28. (SECRET) 8. AFGHANISTAN A. Mujahidin Abandon Border Post Reports from Peshawar indicate that Afghan mujahidin have departed SECRET/EXDIS/ TOP SECRET/EXDIS/ - 3 - the Afghan border complex at Torkham. Reportedly, Pakistan--which now holds a number of Afghan soldiers from Torkham, deposited by the mujahidin--pressured the mujahidin to leave the town. INR Comment: The mujahidin's departure will relieve Pakistan, which feared that insurgent action so close to its border would invite direct Soviet retaliation against its territory. (CONFIDENTIAL) B. Soviets Lukewarm about Cordovez Mission The Soviet Union sees limited prospects for success in the resumption of UN representative Cordovez's mission, a foreign ministry official told. Embassy Moscow. Middle Eastern Department Counselor Ozhegov blamed Pakistan for hampering Cordovez's effort by continuing to provide a "haven for bandits" against the Karmal regime. Embassy Comment: Ozhegov's emphasis upon Pakistan's role in blocking Cordovez is a departure from past Soviet statements which held the US responsible for Pakistan's unwillingness to compromise. The Soviets may have concluded that President Zia is not, as they had earlier hoped, prepared to come to terms with Karmal. Moscow does not seem inclined to encourage Cordovez to undertake a new round of talks. (CONFIDENTIAL/EXDIS) 9. BULGARIA/USSR: DIFFERENCES GROW DURING ANDROPOV ERA The Soviet-Bulgarian differences which existed at the time of Brezhnev's death have become more evident under Andropov, Embassy Sofia reports. The Bulgarians are trying to fend off Soviet requests for INF counterdeployments on Bulgarian soil, and President Zhivkov has shown interest in closer ties with the West at a time when the USSR is stressing the negative impact of NATO deployments on East-West relations. This trend toward more independent action may continue, though not at the cost of Bulgaria's loyalty to central aspects of the Moscow line. Ultimately, Bulgaria remains dependent on the USSR. (CONFIDENTIAL) TOP SECRET/EXDIS/ SECRET/NOFORN BUREAU OF INTELLIGENCE AND RESEARCH - ANALYSIS - DECEMBER 23, 1983 1. SOUTH AFRICA/ANGOLA: FEW RISKS IN THE MILITARY WITHDRAWAL South Africa has little to lose by withdrawing its military forces from southern Angola for 30 days. In putting forward this proposal, it is trying to be responsive to US insistence that Pretoria move to higher diplomatic ground. Its choice of March 1984 as the provisional limit of "disengagement" further reduces the small risk the move entails. * * * The South African proposal is similar to proposals dis- cussed by Angolan and South African negotiators at Cape Verde in December 1982 and February 1983, and comes at a time when South African forces are engaged in deep air and ground penetrations in southern Angola. The extent of their present operations is not yet clear: they have moved well outside the salient occupied since 1981 and may be attempting to destroy the remaining SWAPO bases in the area or to drive SWAPO (and Angolan) forces farther north. The operations coincide with UNITA'S move into parts of the South African salient where UNITA is not normally present. The South African proposal to withdraw does not address the UNITA problem, but a withdrawal of South African troops to northern Namibia would leave UNITA elements in the salient, with resupply bases across the border. The South African stipulation that "disengagement" begin on January 31 and last for 30 days means that the SADF is being given six to eight weeks to wrap up its ongoing military cam- paign. This corresponds roughly to the duration of previous South African cross-border operations of similar magnitude. It is possible that civilian policy makers in Pretoria agreed to allow the present operation to run its course to secure South African military acquiescence to the proposal. With UNITA forces serving as a tripwire, the SADF is not risking a quick Angolan/Cuban occupation of the salient. Also, by warning that remaining outside Angola for 30 days will be con- tingent on the FAPLA not exploiting its absence, the South Africans have left the door open for reentry. They can deploy quickly from their bases just across the Namibian border. Finally, the present rainy season, which favors SWAPO's guerrilla warfare and restricts vehicular movement, will end in March in time for preparations for a new cycle of incursions, if needed. Whether the Angolans accept or reject the South African overtures, there is no way they can exploit them to South Africa's disadvantage. In the meantime, South Africa continues to hold a clear strategic advantage and now has advanced a diplomatic pawn as well. DECLASSIFIED NLS F97-044 #13 BY LOJ NARA, DATE 6/18/01 SECRET/NOFORN SECRET/NOFORN/NOCONTRACT/ORCON - 2 - 2. USSR: WAITING FOR ANDROPOV Andropov is expected to chair next week's party plenum and to appear at the Supreme Soviet session opening on December 28. Both meetings will approve the 1984 plan and budget, and Gromyko probably will address the legislature on foreign affairs. If there are personnel changes, they will most likely involve junior politburo members and party secretaries. * * * The latest indications of Andropov's ability to function in public are mixed. He has reportedly postponed meetings with Trudeau and Armand Hammer. The continuing police purge of corrupt officials and several honorable retirements recently of aged local party leaders suggest, however, that his programs are being implemented under his supervision. But Andropov must chair the party plenum (opening next Monday or Tuesday), or grave doubts will be cast on his ability to function in office. Because of his prolonged absence, he may already be less able to manipulate the current party elections in his favor. To date, no personnel changes have occurred at the oblast party-election meetings now in progress. The prospects seem poor for leadership changes at the plenum. The new Uzbek party boss could be given a candidate membership on the politburo, although recent precedent argues against it. Andropov's choice to head the party personnel department, Ligachev, might rise to the rank of CPSU secretary at the expense of Ivan Kapitonov, but Chernenko is not likely to move from his job as ideology secretary despite the December 15 attack on him via party criticism of his former bailiwick in Moldavia. Andropov's duties at the three-day legislative session are less demanding; he could skip some of the sessions at which the plan and budget are discussed. However, he will be expected to attend opening day, when Gosplan chief Baybakov and Finance Minister Garbuzov speak and Gromyko surveys the international scene. Garbuzov's announcement of the 1984 defense budget may con- tain a message: the formal figure of 17.05 billion rubles has held steady for the last three budgets; if raised now, as some Soviet spokesmen have threatened, it would constitute a symbolic response to US defense spending without saying anything about actual Soviet outlays. Andropov's attendence at the closing day of the session (probably December 30) is also expected. After that, he has no more scheduled public duties until January 27, when he should attend the Moscow city party elections. SECRET/NOFORN/NOCONTRACT/ORCON CONFIDENTIAL - 3 - 3. ARGENTINA: FAST START FOR ALFONSIN Backed by a strong electoral mandate, President Alfonsin has moved quickly to fulfill promises on human rights, military restructuring, and labor-union reform. The armed forces are in no position to resist Alfonsin's attempts to curb their internal- security role and assert civilian dominance. Economic recovery remains Alfonsin's biggest challenge. Announced austerity measures would probably satisfy IMF negotiators, but appear at odds with other facets of the government's program. * * * Alfonsin moved swiftly and dramatically against the military--retiring generals and admirals, cutting budgets, subjecting former junta members to trial for human rights abuses, and altering the hierarchical structure of the services. There has been no forceful response from the armed forces. Many younger officers probably sympathize with measures against their erstwhile commanders, whom they hold responsible for the sad state of the military. Also, Alfonsin has acted with relative moderation. He retired about 25 army generals, but rumors had it that he would axe twice that many. Moreover, while nine former junta members will be tried, the vast majority of officers guilty of abuses during the "dirty war" against terrorism will almost certainly escape penalties. Organized labor is a more likely source of near-term oppo- sition than the military. Not only are policy differences likely, but Alfonsin's promise to democratize the unions poses a personal and political threat to the long-time Peronist bosses who dominate the national labor scene. By demanding court- supervised union elections, Alfonsin is gambling that his electoral support from labor will surface on the factory floor. The government's early economic measures suggest internal inconsistency. Intended dramatic reduction of the fiscal deficit, primarily through increasing and improving tax collec- tions, conflicts with a projected five-percent growth rate and reduced unemployment. Only a surge in foreign investment or capital repatriation--unlikely over the next six months at least--could balance the deflationary impact on consumers of the taxes. Full implementation of the announced Alfonsin program will bring contraction rather than the promised expansion. Government spokesmen, including Alfonsin, have promised to honor Argentina's international obligations. However, Economics Minister Bernardo Grinspun has asked the country's commercial- bank creditors for a moratorium until mid-1984 on payments on public sector debt. It is unclear whether the moratorium would cover interest as well as principal payments. CONFIDENTIAL