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December 20, 2016
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March 9, 2006
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March 24, 1967
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Approved FRelease 2007/03/13 : CIA-RDP79-00005700050001-6 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY State Department review completed Secret ._ -51 24 March 1967 No. 0282/67 Approved For Release 2007/03/13: CIA-RDP79-00927A0057 QO50001-6 :., AGENCY AC -i vL. 25X1 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Next 3 Page(s) In Document Exempt Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Approved Fg Release 2007/0N'1(:;~{1 =12DP79-00A005700050001-6 FAR EAST Both Saigon and Hanoi issued major pronounce- ments setting forth their positions on negotiations and a political settlement of the war. At the Guam meeting with President Johnson, Premier Ky took a militant line against any negotiations with the Viet Cong and against a coalition government. Hanoi reacted to the Guam conference by pub- lishing an exchange of letters in February between President Johnson and Ho Chi Minh in which Ho re- jected the President's proposal for steps leading to private talks and reiterated Hanoi's insistence on an unconditional cessation of US bombing and "other acts of war" against North Vietnam. On the eve of the Guam meeting, Premier Ky and Chief of State Thieu secured the ruling Directorate':. acceptance of the Constituent Assembly's draft con- stitution--reportedly over the objections of several prominent leaders who voiced concern over the "ex- cessive" powers accorded the legislature. In Communist China, efforts to restore order and competing drives for power point to new tension and discord. A high-level meeting of party members may have been called to work out key policy ques- tions connected with the organization of the coun- try's administrative machinery. In the current atmo- sphere of dissension, any such meeting would be a stormy one. Although Premier Chou En-lai still speaks for the regime and espouses a relatively mod- erate line, daily parades organized by the Red Guard: in the capital denounce some of his close associates. The army has increasingly become Peking's main agent for transmitting its policies to the ovinces. SECRET Page 1 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927A005700050001-6 oft Approved For R se 2007 difif,.IA-RDP79-00927A005700050001-6 Q M Z Demilitarized Zone Gio ali Q ? ung Tr i ? Hue' A THIFN ?Oa Nang 21ANG NAM .1 1- Da Lat? ~ 0`iRM RANH ,-=THUAN? ?O'ban Rang "1 -. =r1 Bien L-' IN '?Hoa ;'. TUY B.C. t FU AN XU YEN SOUTH VIETNAM 25 50 7575 ~_ L 0Maes LIr 75 1'~fl Kilometer 66117 3-67 CIA - Approved For Release 2007, tj A-RDP79-00927AO05700050001-6 Approved F Release 2007/03MIlCjd/ WbP79-0092 005700050001-6 VIETNAM The Communists continued to put heavy military pressure on allied positions near the De- militarized Zone (DMZ) this week, and additional indications ap- peared that enemy forces in the area have been substantially augmented. Mortar and artillery at- tacks were again conducted against US heavy artillery posi- tions at Gio Linh and the South Vietnamese army encampment at Con Thien, while a US supply convoy south of Gio Linh was ambushed by enemy infantry. Ele- ments of at least four North Vietnamese Army (NVA) regiments have recently been identified south of the DMZ. Reports of defectors indicate that the Communists are in a position to attack in multibattalion strength. The current activity re- flects an effort to neutralize the American heavy artillery which began firing into the DMZ and southern North Vietnam late in February. The Communists may also hope to deter US reac- tion to the reported infiltra- tion of North Vietnamese units from the DMZ and Laos into the mountainous western regions of Quang Tri Province. Fighting also flared up heavily closer to Saigon on 20 and 21 March when two regimental- size attacks were directec against US forces from Operation JUNCTION CITY which has been combing Communist War Zone "C" in Tay Ninh Province. In these assaults, the Communists appar- ently abandoned their usually cautious tactics, reportecly sending waves of infantry across relatively open ground against US units equipped with heavy fire power; they may have been seeking a spectacular victory to coincide with the Guam talks between US and South Vietnamese leaders. More than 850 enemy soldiers were killed--raising the total killed during JUNCTION CITY to nearly 1,800, the high- est of any single operation of the war. The Communist attacks could also have been provoked by the approach of allied forces to sensitive enemy headquarters or storage depots. The area of operations for JUNCTION CITY, recently shifted eastward, now extends into Binh Long anc Binh Duong provinces where elements of the 272nd and 273rd Viet Cong Regiments and some other units subordinate to the Communists' Central Office for South Vietnam evidently relocated while the allied forces were concentrated north of Tay Ninh city. Constitution Completed in Saigon In Saigon, the Constituent Assembly's completion of the SECRET Page 3 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 SECRET constitution and the ruling Mili- tary Directorate's speedy ac- ceptance of the document without changes late last week were largely the result of the mili- tary leaders' desire to exhibit major accomplishments at'the Guam Conference. Although the full constitu- tion is in many important in- stances a compromise between the Directorate and the assembly, the Directorate granted most of the final concessions. On 14 March, the Directorate had pro- posed a number of changes con- cerning the election of province chiefs the right of the legis- lature to vote no-confidence in the government, and transitional arrangements between promulga- tion of the constitution and. the holding of national elec- tions. In a meeting with a large number of assemblymen on 16 March, however, Premier Ky agreed to compromise on transitional pro- visions and to ignore Directorate suggestions on other issues. The assembly then voted its final approval of the-document on 18 March. In a stormy meet- i_ng the next day, the Director- ate accepted the constitution without changes, but not with- out expressing dissatisfaction with some provisions. However, the objections of both military and civilian members apparently were finally overcome by the pressure of the Guam Conference which began on the 20th. Before the constitution is promulgated, it must be approved by the Armed Forces Congress, but indications are that its deliberations on this matter will be strictly pro forma. As the constitution now stands, the Constituent Assembly will remain in existence until a lower legislative house is elected and assumes office. Un- til the future president takes office, it will ratify treaties and exercise legislative powers regarding electoral laws, the . formation of the supreme court, and the status of political par- ties. The Directorate will re- tain all other powers. Once the president is inaugurated, however, the Directorate will be dissolved and the assembly will assume full legislative powers until the elected lower house of the legis- lature is convened. Elections for president, vice president, and the senate are scheduled for early September, and for the lower house on 1 October. It remains to be seen whether Premier Ky's tactic of gaining acceptance for the con- stitution by maneuvering inde- pendently of the Directorate will work for or against him in the long run. The outcome will prove to be especially SECRET Approved Fdff Release 26WMY3 Ml*PMP79-0b?2VA60000050001-6 Approved FRelease 2007/03/,{E#P79-009005700050001-6 significant in terms of Premier Ky's presidential aspirations. There are indications that the military establishment might favor Chief of State Thieu over Ky if both men pursue their candidacies and agree to ask the military to decide between them. On the other hand, it is possible that Premier Ky might announce his candidacy throuqh a civilian political front be- fore a military nominating ses- sion is convened, thus present- ing the military leadership with another fait accompli. Politi- cal developments in the near fu- ture will continue to focus on the problems of selecting a military candidate and in main- taining military unity. Hanoi on Negotiations Hanoi capped a week-long propaganda assault on the Guam Conference by disclosing a secret exchange of letters on negotia- tions between President Johnson and Ho Chi Minh. Although the actual exchange occurred during the first two weeks of February, Hanoi held the release until 21 March, apparently in an effort to divert some publicity away from the Guam meetings, aid per- haps to dispel apprehensions in either Peking or among rank- and-file South Vietnamese Commu- nists about the nature of these rumored exchanges. ders. Ho's response to the US Presi- dent's appeal for talks wu:; tough and unyielding, while re- iterating Hanoi's recent )?fer to consider talks in exch uige for a cessation of the bo:nhings. Like his foreign minister on 28 January, Ho clearly disti uluished between the conditions ne-es- sary for talks--an uncondL.'.ional cessation of the bombings-?-and the more demanding four p-)_nt proposal for a final settlement of the war. As if to underscore Ho's assertion of willinq-tess to talk only on his own terms, the North Vietnamese continued military preparations which sug- gest they are thinking in terms of a long war. In recent weeks these indicators have included across the board improvements in their air defenses, un_c;;ually large supply movements through Laos, and the construction of new base camp areas on th? 25X1 perimeters of South Vietnam along the Laotian and Cambodian bor- SECRET Page 5 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927A005700050001-6 ANN Approved For Release 200710-RDP79-00927A005700050001-6 SERIOUS DISCORD CONTINUES IN PEKING Efforts to re-establish or- der and conflicting drives for continuing the Cultural Revolu- tion have produced new tension and discord in Peking. A high- ='Level meeting of party members evidently has been called in Peking, probably to work out key policy questions connected with the reorganization of adminis- trative machinery both in Peking and in the provinces. Indica- tions of renewed top-level dis- sension in recent weeks suggest that the gathering is a stormy one. bills announcing the central committee meeting, but giving no further details concerning the issues in dispute. At :Least one alternate member of the com- mittee is known to be in the city. The last full meeting of the central committee was held in August 1966. During October 1966, another period of confu- sion over what direction the Cultural Revolution should take, the central committee convened an unpublicized "work confer- ence." The current meet=ing may be similar in character. A wall poster put up on 16 March quoted Nieh Yuan-tzu,a radical female Red Guard leader who is an important member of the Maoist faction, as saying that this is the most important stage of the revolution since the rebel drive for power began in January. In a recent speech, another ultramilitant Red Guard leader described the current situation as the "lull before the decisive battle," and major Red Guard newspapers in Peking are claiming that a "reactionary adverse current" runs from the top to the bottom of the regime. Nieh Yuan-tzu was also quoted as claiming that the cen- tral committee was meeting in an atmosphere of "struggle" over who is to hold positions of power. On 18 March, Czech cor- respondents in Peking saw hand- Other signs of disagreement have appeared in relation to the Red Guards. During February the Guards were often, criticized for their immaturity and lack of dis- cipline, but a recent editorial in the Shanghai Wen Hui Pao gave them high marks. This paper, which was in the vanguard of the Cultural Revolution last year, said that anyone who criticizes Red. Guards for their "relatively few errors" is a "counterrevo- lutionary," and it denied that they had at any time "gone too far." This could reflect behind the scenes criticism of Premier Chou En-lai, who has often taken the Red Guards to task for their excesses. Government officials asso- ciated with Chou En-lai have been the main targets of Red SECRET Page 6 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Approved ,-Release 2007/0 /1 , 1 ffDP79-OG&WA005700050001-6 Guard wrath in the past two weeks. Well-organized rallies of Red Guards, often attended by large numbers of army troops, have been held almost daily in Peking since 11 March to denounce Tan Chen-lin, the politburo's agricultural specialist. Spo- radic attacks have been made against four other politburo mem- bers, including Finance Minister Li Hsien-nien and Li Fu-chun, the head of the State Planning Com- mission. Most of these officials were defended by Chou last Novem- ber and again in January. Although criticism of men who work for Chou may be designed to weaken his authority, he him- self continues to speak for the regime. Chou addressed a Congress of Peasants in Peking on 19 March on behalf of Mao Tse-tung and Lin Piao, neither of whom normally attends a rally of this sort. Chou's speech was characteris- tically moderate. He stressed the need to concentrate on farm- work and reaffirmed recent cen- tral committee statements that there are to be no "power seiz- ures" in the countryside during the busy farm season. In its concern to bring or- der out of the confusion and in- action of the recent past, Pe- king is apparently turning more openly to the army as the pr,:--_n- cipal agent for administeri.zu the country. At both natio-ial and provincial levels, the m-l- itary is replacing shattered party and government apparatus as the channel by which Peking transmits policy. The army now appears to be in charge of Kwangtung and Hupeh provinces and there are strong indicatj_ons that the military has at le 3:=t the dominant voice in most ,_)ther provinces. Peking had directed the army to become involved in a wide range of functions essential to t:e economy. It controls the civil airline and in some areas tte railroads, as well as the post and telecommunications facil.ties. The army also is responsible for a large segment of China's mer- chant shipping. In February, the central committee directed the army to assume leadership in organizing the essential spring plantiaa and, on 18 March, to support in- dustrial production. It is clear, however, that Peking does not en- vision the army as a vast labor pool, but rather as a disciplined and largely intact administrative instrument which can convey or- ders and see that they are tar- ried out. SECRET Approved ForPP91ea7se 2Od I : aX'-RIY~79-004,7A? 5766650001-6 ANW4 1 Approved For Release 2007/(Va k ;RDP79-00927AO05700050001-6 NEW JAPANESE DEFENSE PLAN The five-year defense pro- gram recently adopted by the Japanese cabinet provides for only modest progress toward a significant defense capability. Although Prime Minister Sato and his colleagues have succeeded in stimulating public discussion cf Japan's defense responsibil- ities, strong pacifist sentiments still limit their initiatives in expanding military forces. This third five-year plan, which begins on 1 April, provides for only a slight increase in the defense share of national in- come--from 1.22 percent during the past five years to an esti- mated 1.27 percent in the coming period. In the cabinet discus- sions the Finance Ministry suc- ceeded in trimming the Defense Agency's projections from a de- sired two percent of Japan's gross national product at the end of the period. The approved $6.5- billion program for the full five-year period, although roughly double the cost of the current five-year program, is al- most $1 billion below the amount requested. In response to pres- sure from Japanese industry, how- ever, most procurement items have been assigned for more costly domestic production. Despite the cut, defense circles are reported to be pleased that some major items of modern equipment are provided for. These include missiles for four Hawk battalions and two Nike- Hercules battalions, jet fighters, transports, and training aircraft. The plan also envisages a modest increase in manpower, although the authorization probably will continue to run well ahead of actual strength. The plan will be debated extensively next month when the Diet considers the budget. The opposition is expected to con- centrate its attacks on the nuclear capability of Nike- Hercules missiles. Defense spokesmen are already countering with the assertion that these missiles will be built so as to preclude the use of nuclear warheads. With the government in firm control of the Diet following last January's elec- tions, little further change in the defense budget is likely. The Sato government is hoping to use the debate as part of its long-term campaign to educate the Japanese public on the need for greater defense effort, as well as for continua- tion of the US-Japan Mutual Security Treaty, which is sub- ject to revision or termination in 1970. In recent months a government information program has elicited postwar Japan's first responsible, serious debate on military problems, including defense against a nuclear-armed 25X1 China. SECRET Approved #'6FR4ase 2 I/13q A P79-0bt2 AUO 00050001-6 Approved FewRelease 2007103 RIA 2DP79-009005700050001-6 EUROPE Soviet Party General Secretary Brezhnev's meeting this week in Moscow with East German party boss Ulbricht ended a series of talks Brezhnev has been having with Russia's East European allies. Bulgaria and Hungary were persuaded at least to delay recognizing West Germany. Bulgaria also agreed to an early renewal of its defense treaties with the USSR and Poland, but Hungary apparently was unwilling to make this gesture now. No greater cooperation was won from Rumania, and the need to resort to bilateral dealings exposed the Warsaw Pact's weakness as a mechanism for coordinating political policies. The disarmament talks in Geneva were recessed for six weeks in a concession to the Western Euro- peans who want more time to consider the implica- tions of the projected nonproliferation treaty. Top-level delegations will meet in Geneva next week in a final push to conclude the Kennedy Round negotiations by the agreed target of 30 April. The "'all or nothing" nature of the final bargaining carries the possibility of last-minute failure, but the current feverish activity in all the delegatin is generating a modest optimism- SECRET Page 9 WEEKLY Std Approved For Release 2007/03/13: CI P79-6690 7100050001-6 Approved For Fe ease 200VR.?JA-RDP79-00927A005700050001-6 SOVIET DIPLOMACY ON EUROPEAN SECURITY The Soviets are keeping their proposal for a European security conference alive. The idea turned up again in the 21 March communi- que ending the visit of Austria's Chancellor Klaus to the USSR. Moreover, the meeting of European Communist parties, scheduled for Czechoslovakia next month, is being organized around the theme of European security, which in the present context means the German problem and the future of NATO and the Warsaw Pact. The Soviets hardly expect serious multilateral negotiations on these subjects to come about soon, but are using the idea as an instrument for disrupting Western unity. Moscow hopes to reap political gains by implying its readiness to consider new security arrangements for all Europe, a tactic that complements continuing efforts to develop its bilateral relations with major Western European countries. The idea of a security con- ference of all European states is more a diplomatic gambit than a realistic goal. Moscow has kept the notion current for the past year. By doing so, it helps foster a mood of expectation and exploits a general desire for detente in Europe. Soviet spokes- men, however, have avoided such concrete proposals as the sub- stance or timing of a conference, lest they be taken too seriously too soon. The gathering of Communist leaders which will begin in late April in the Czech resort town of Karlovy Vary is intended to suggest that the Communist parties of Europe are focusing seriously on the security problem. A second purpose is to foster unity of out- look among European Communists. A regional conference of Communists is also of value to Moscow in its dispute with Peking. Even though the Chinese question need not be raised form- ally, the meeting of and by it- self would serve to point up Moscow's rapport with other Com- munist parties in contrast with China's isolation? SECRET Approved ~ gRele e 20 W3 5 i i '79-0049 r005700050001-6 Approved Fa-Release 2007/03/13' 99-009 4005700050001-6 GENEVA DISARMAMENT TALKS RECESSED After a month of indecisive discussion, the Eighteen Nation Disarmament Committee (ENDC) has recessed for six weeks to allow further attempts to resolve prob- lems the European Allies still have with the draft nonproliferation treaty. In recent visits to Euro- pean capitals, Ambassador Foster-- the US delegate to the ENDC--had some success in convincing the Euro- peans that interpretations or adjust- ments of the treaty's text can be made so that it will not restrict their peaceful nuclear activities. Nevertheless, the remaining politi- cal and technical reservations are serious and, in the US view, nothing would be gained by resuming the ENDC talks until they are resolved. The most serious problems center on the proposed treaty pro- vision for international safeguards to prevent surreptitious diversion of nuclear materials to weapons uses. EURATOM's officials continue to maintain that the community's supranational safeguards system would be undermined if controls by the International Atomic Energy Agency (IAEA) were to be superim- posed. EURATOM Commissioner Sassen has indicated that EURATOM could possibly accept IAEA "verification" of community safeguards--as the US is now prepared to suggest--but it is questionable whether either the IAEA or the Soviet Union will accept this. Moreover, unless there is a prior agreeement between the IAEA and EURATOM on what "ver- ification" would mean in practice, it is doubtful EURATOM would agree in advance to the proposed three- year transition period for phasing EURATOM safeguards into --he IAEA system. The interruption of the ENDC negotiations may well increase suspicions among the non--European members that a final draft is being worked out behind their backs. They have their own prob- lems in renouncing the dEvelopment of nuclear weapons, and resent not having been consulted in the form- ative stages of the treaty talks. India in particular is urlikely to sign the treaty as it stands unless it gets some security guar- antee against threats of nuclear attack and unless more tharn a promise of nuclear disarmament is given by the nuclear powers. Moreover, if the safeguards pro- vision is dropped in response to pressures from the Europeans, the others may well make a determined effort to have one restor3(J. The delay in the ENDS proceed- ings will also provide the USSR further material for its :barges that West Germany is the n3i.ons is contained in a Soviet delecrate's statement to a US mission officer that both the US and the JSSR should consider fallback formula- 25X1 tions for those elements of the draft which trouble the noir.-F-u- roDeans, SECRET Page 11 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927A005700050001-6 Approved For Fuse 2007/03 1 5 IIt fDP79-00927AO05700050001-6 OUTLOOK FOR SOVIET WINTER WHEAT CROP Conditions are favorable for another good winter wheat crop in the USSR. This would be the third good crop in a row. The total area sown to winter grains is somewhat less than the 41 million hectares planned, partly because of dry weather in some areas at sowing time. About 20 million hectares-- approximately that officially reported for 1965 and 1966-- probably were sown to winter wheat. Lack of germination and winter kill will require some resowing but the condition of the wheat now is about the same as in 1965 and 1966, years when good crops were harvested. The slight reduction in the sown area should be offset to SECRET some degree by the larger por- tion of the winter wheat area that was sown with high--yielding varieties. Moreover, the So- viets plan to apply nitrogen fertilizers to 30 mill'-on hec- tares of winter grains this spring compared with 18 million last year. Precipitation in the prin- cipal winter wheat areas since seeding time approximated--and in many cases surpassed---the levels of the past two years, and soil moisture at the end of February was estimated to be generally above average for this time of year. Snow cover, which is extremely important for win- ter grains, was 50-100 percent above normal in some areas. Approved Forgas22007/~/ILyCI~-00927A005700050001-6 25X1 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Next 2 Page(s) In Document Exempt Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Aft 1 Approved For Release 2007/0311(VP f DP79-00927AO05700050001-6 SECRET Approved For VlgPease61007i'fX k ' 9-009iA&%1O0J50001-6 Approved FbYRelease 2007/0 RDP79-0092#A005700050001-6 MIDDLE LEAST - AFRICA The Indian cabinet has fairly handily beaten off initial opposition assaults in the new parlia- ment, but fresh troubles are in the making. Leftists in the West Bengal state government are using their position to wrest control of key labor unions in the teeming Calcutta area. Across the border in East Pakistan, rioting over contaminated food supplies is shaking the local government and may lead to an anti-US campaign. In the Middle East, Nasir is calling ever more sharply for other states to join him in opposing what he calls US "pressure." Intra-Arab quarrels again have brought turbulence in Lebanon, where pro- and anti-Nasir elements are pressing the moderate government to take a clearer stand in their favor. Tension along the Jordan-Israel border has risen again; UN observers there have been alerted for possible incidents. Israel also has internal eco- nomic problems which could raise its frustration level. (For details on these problems, see page 22). In South Arabia, another British mission has made fresh proposals offering an earlier independ- ence date for the South Arabian Federation and a promise to leave some military forces at hand for use against pro-Nasirists during the immediate postindependence period. In Africa, there were postreferendum riots in French Somaliland and postelection tensions in Sierra Leone. Pre-election politics are also heat- ing up in Senegal, where President Senghor was the object of an assassination attempt this week. One long-standing dispute, the rivalry between Rwanda and Burundi, edged a bit toward resolution last weekend when Presidents Micombero of Burundi and Kayibanda of Rwanda met in the eastern Congo (Kinshasa) under Mobutu's aegis. Farther south, the South African Government is taking new image- building initiatives, while a special UN committee in New York wrestles with the problem West Africa. SECRET 25X1! Approved For Release 2'0667'/' 1' 1i U KbP79--69 06700050001-6 Awk Approved For Release 2007AQW IL -RDP79-00927A005700050001-6 111 J NIGERIAN CRISIS MOVES INTO A NEW PHASE Supreme Commander Gowon has finally taken a decisive step in an attempt to break the deadlock with Eastern governor Ojukwu over Nigeria's form of government. On 17 March the federal gov- ernment issued a "Constitution (Suspension and Modification) Decree," which amounts to a new constitution for Nigeria. The decree establishes the ruling Supreme Military Council (SMC) in which all regions are represented as a collegial legislative and executive body. The unanimous consent of council members is re- quired for action in such impor- tant areas as the armed forces, the police, trade, commerce, in- dustry, and transport. The decree thus takes into account in large measure Ojukwu's advocacy of greater regional autonomy. To declare a state of emer- gency in any region, however, the consent of only three of the four regional governors, plus the head of the federal government, is required. Ojukwu believes this provision is aimed directly at him, and before the decree was even promulgated he declared it was unacceptable. Western gover- nor Adebayo, on the other hand, told the US consul in Ibadan it would be impossible to get three governors to agree, and he re- stated his opposition to the use of force to solve Nigeria's in- ternal squabbles. Adebayo does not believe the East can be successfully in- vaded, a view apparently shared by Northern governor Katsina, who reportedly was willing to "let Ojukwu stew in his own juice for a while." The SMC meeting-- minus Ojukwu--held in Lagos on 19 March discussed possible economic actions against the Eastern Region and is to take up specific steps at another meet- ing scheduled for 29 March. It is unlikely that Gowon will initiate measures that would result in Eastern seces- sion, nor would Ojukwu secede without extreme provocation. The Eastern governor probably will, however, go ahead with plans to take control by 1 April of at least some Eastern revenues currently paid to the federal government. Thus, a series of economic moves and countermoves seem to be in the. offing.. There also still exists a threat of unilateral military action against Ojukwu by fire-breathing Northern officers who are unhappy over the federal government's failure so far to take significant ac- tion against the East. SECRET Approved Flee 20 T : A 079-00927 H5900050001-6 Approved Port Release 2007/03, p 41DP79-OOWA005700050001-6 FRENCH SOMALILAND OPTS FOR CONTINUED FRENCH TIES Slightly over 60 percent of French Somaliland's registered voters chose to continue living under French rule in the referen- dum on 19 March, but the terri- tory's rival Afar and Somali com- munities have become so deeply split that there seems to be little prospect of political sta- bility in the near future. The final vote was strictly along communal lines. The rural Afar majority voted solidly for association with France, while the Somali minority who are con- centrated in the main city of Djibouti voted for independence. The rioting that broke out among the Somalis after the result was announced never spread beyond the Somali areas of Djibouti and was put down by French security forces. Somali instigated dis- turbances could recur, however, and the French will probably have to maintain strict security meas- ures for some time. Somali opposition to the French is unlikely to diminish and almost certainly will be the principal block to French efforts to get the Afars and Somalis to- gether in a new territorial gov- ernment. would retain control of the ter- ritory's finances, foreign af- fairs and defense, but a native head of government would replace the present French governor, and a government council responsible to an elected Chamber of Deputies would be established. Somali political leaders, however, have informed the French govern.r- that they intend to protest the refer- endum's results and have decided to boycott any government that is formed. Moussa Idris, head of the Somali proindependence Popular Movement Party, re x;rtedly will appeal to the Organization for African Unity and requ?~Est that a commission of inquiry be sent to French Somaliland. The pro-French vote hi.,; averted the possibility of far, SECRET Page 19 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 ARK Approved For Release 2007I0 J 3j 1 1RDP79-00927A005700050001-6 however, has reacted cautiously He apparently believes orary setback and that a moderate course will still enable him to achieve his government's long-range goal of uniting the Somalis of French Somali- land with the Somali Republic. POSTELECTION CRISIS IN SIERRA LEONE Sierra Leone's political stability is in serious jeopardy in the wake of last week's closely contested election and army commander Lansana's subse- quent extraconstitutional inter- vention in behalf of incumbent Prime Minister Margai. Capitalizing on widespread dissatisfaction with the previous government, the opposition All People's Congress (APC) won more seats than did Margai's Sierra Leone People's Party (SLPP) in the 17 March balloting. Neither side came away with a clear ma- jority of the 66 ordinary par- liamentary seats, however. Lansana's 21 March declara- tion of marital law and virtual annulment of the governor gen- eral's appointment of APC leader Saika Stevens as the new prime minister was almost certainly in- spired by Margai, to whom Lansana SIERRA LEONE SECRET Page 20 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927A005700050001-6 Approved F' YRelease 2007/03(1p~,(Rt. DP79-00 A005700050001-6 has long been close. Lansana contended that the governnor gen- eral had acted prematurely inas- much as the election returns were still incomplete. The army-imposed stalemate --involving the confinement to the State House of both Stevens and the governor general and the imposition of a curfew--has given Margai time to bargain with in- dependents and marshal other support. After the election on 21 March of 12 paramount chiefs as additional full members of parliament, 10 of them promptly made unprecedented declarations of allegiance to the SLPP. Al- though by custom the chiefs have been formally apolitical, most of them have in fact long been closely allied with Margai's party. With a claimed 32 ordinary seats--including four won by in- dependents who allegedly declared for the SLPP after their election --Margai appears to have a major- ity of the 78 seats in the new parliament within his grasp. The elections of six of the ordinary members are, however, being formally challenged by the APC, and some other successful SLPP candidates would like to dump Margai as party leader. A number of political combinations E_re thus still possible, inclucing a broad coalition led by scmeone else from Margai's party--possibly incumbent Minister of Education Sheriff. An eventual complete take-over by the army, perhaps with Margai serving as "political adviser" to Lansana, also cannot be excluded. The current crisis is rooted in and has in turn sharpened tradi- tional tribal and regional a:itago- nisms. These pit the large Mende tribe, which predominates in the Southern and Eastern provinces and is the mainstay of the SLPP, against the important Temne and Limba tribes of the North from which the APC draws its basis: sup- port. As an opposition party, the APC has also profited from the support of Freetown's Creoles, the politically dispossessed descendants of freed slaves who constitute the bulk of the -:_vil servants. The same ethnic Split undermines the cohesiveness of the 1,300-man army and casts doubt on the ability of Lansana, :a Mende to maintain military control over the country for very long. Light antiregime officers--all bu- one 25X1 of them Northerners--were a_-rested only last month on charges of plotting a coup. SFCRFT Page 21 WEEKLY SUMMA 24 M 7 Approved For Release 2007/03/13: CIA-RB~79-00927A85~00050001-6 Approved For Release 20Cgf)' 1REIPA-RDP79-00927AO05700050001-6 ECONOMIC SLOWDOWN IN ISRAEL For the first time in Isra- el's history unemployment has be- come a serious problem, and there is little prospect for improve- ment this year. Some 60,000 work- ers, about seven percent of the total labor force, were unem- ployed at the end of 1966, and some labor rioting has occurred. The economic situation is thus an embarassment to the govern- ment, although at present it does not appear to threaten Prime Minister Eshkol's tenure. Tel Aviv's sensitivity to the problem was reflected in the recent dismissal of Jon Kimche, long-time editor of the London- based Jewish Observer and Middle East Review. When Kimche pub- lished a story claiming that 90,000 workers were unemployed, the government pressured the British Zionist organization which sponsors the magazine to fire him. The chief cause of the slow- down was a severe drop in con- struction activity last year. A high rate of construction, partly to accommodate the inflow of immigrants, had been a major factor in Israel's sustained boom--an annual growth of more than ten percent in GNP between 1948 and 1964. In its later stages, the boom was accompanied by growing inflation and trade deficits. In an effort to sta- bilize the economy and put it on a sounder footing, the gov- ernment in 1965-66 adopted a "tight money" policy and reduced its expenditures. But these ac- tions in turn have caused large cutbacks in both private and public investment. The government now has turned back to a more expansionary fiscal policy in the 1967--68 budget. This policy will be used. cautiously, however, since inflation has not ceased despite the high unemployment rate, and unemployment probably will re- main high for some time. Before Israel. can regain a rapid rate of growth, a major restructuring of the economy is necessary. Much industry is small scale and inefficient. In recent years, inflation and rising costs of production have encouraged imports and inhibited exports. Unless political fac- tors--an Arab attack, for ex- ample--intervene, the economy also must adjust to a continuing decline in foreign assistance and in immigration. Corrective measures for any of these prob- lems will be very difficult po- litically, will need consider- able time to take effect, and initially will tend to inhibit economic growth. There is no evidence that the government is seriously considering the most obvious stimulant to exports, devaluation of the Israeli pound. SECRLfl' Page 22 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Approved F73?' Release 2007/Of d?jV: .kjRDP79-009iti 'A005700050001-6 WESTERN HEMISPHERE The tempo of international and national prepa- rations for the 12-14 April presidents' meeting in Punta del Este, Uruguay, has picked up appreciably. Special representatives of the hemisphere's presidents continued their meetings in Montevideo during the week to work out the detailed agenda for the summit conference. No insurmountable ob- stacles were encountered, although negotiations on the subjects of the timetable for achieving full economic integration and the terms of Latin America's trade with the US are taking longer than anticipated. Meanwhile, the various presidents are beginning to firm up their plans for attending the summit. Some will be anxious to raise bilateral problems and other topics not on the agenda; Ecuadorean President Arosemena, for example, reportedly will insist on publicly addressing the meeting and rais- ing Ecuador's border problem with Peru if he attends. This would automatically mean that Peruvian Presi- dent Belaunde--who now says he will go to the meeting--would have to try to respond in kind. For his part, Panamanian President Robles intends to discuss the canal issue with President Johnson. Other chief executives are planning to meet with each other before the summit. President Leoni of Venezuela will see Chilean President Frei in Santiago on the eve of the meeting, and the five Central American presidents are planning to travel to Punta del Este together; they may even meet beforehand. SECRET Page 23 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927A005700050001-6 A"IN AMA Approved For Release 2007/OJ RLAlRDP79-00927AO05700050001-6 CASTRO DEFENDS REVOLUTIONARY VIOLENCE Fidel Castro's annual 13 March speech was his most outspoken de- fense to date of his policy of revo- lutionary violence in Latin America. In it, he criticized Communists in the hemisphere who back away from armed struggle when the going gets tough. Recent Soviet diplomatic and economic overtures to Latin American governments evoked the comment that "whoever helps those oligarchies where guerrillas are fighting will be helping to sup- press the revolution." The speech was also an answer to Venezuelan charges of Cuban com- piicity in the assassination of Dr. ,Tulio Iribarren Borges, the brother of Venezuela's foreign minister. Castro denied any involvement in the affair and countered by accus- ing the "chorus of hangmen ruling Venezuela" of "bloody and intoler- able repression." To document his counterattack he read off a list of ov,rer 100 "Venezuelan patriots" who had been "murdered" by the Betan- court and Leoni administrations. Castro's most scathing remarks, however, were reserved for Venezue- lan Communist Party leaders, who had been quick to disassociate themselves from the assassination. fie denounced the party leaders as vacillators, defeatists, cowards, and theorizing charlatans for hav- ing avoided armed struggle. In a public reply, the Vene- zuelan party characterized his at- tack as ignoble, self-seeking, and treacherous, and rejected the "role of revolutionary pope that Fidel Castro asks for himself." The gap between Castro and the Venezuelan Communist Party has never been wider. In discussing support for Latin American Communists, Castro ignored a 10 March Pravda commen- tary cautioning that "any weakening of the Communist parties or any splitting of their ranks, whatever motives may lie behind it, would bring irremediable damage to the vital interests of their countries and peoples." He bluntly stated: "If in any nation those who call themselves Communists do not know how to fulfill their duty, we will support those who--even though they do not call themselves Commu- nists--behave like real Communists in the struggle... What defines Communists of this continent is their action in the guerrilla move- ment in Guatemala, Colombia, and Venezuela." Although tactical differences are undoubtedly eroding the pa- tience of both Havana and Moscow, there is no reason to believe that Cuba's relations with the USSR are in serious jeopardy. Relations with Latin American Communists, however, are a different. matter. Castro's continued support of armed rebels in the field may well force orthodox Latin American Com- munist leaders to follow the lead of the Venezuelans in denouncing Cuban meddling and provoking an open break with the Castro regime. Indeed, the leaders of the Colom- 25X1 bian Communist Party are already considering a break with Castro over this issue. SECRET Page 24 WEEKLY SUMMARY 24 Mar 67 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Approved F'[7t Release 2007/03 ' RIAFDP79-00947AO05700050001-6 URUGUAYAN LABOR AGITATION LIKELY TO CONTINUE Renewed labor agitation, much of it Communist-inspired, can be expected in Uruguay despite the apparent settlement of a protracted strike by government health workers. The outcome of the strike, which may well have been an early test of wills between the Commu- nist-dominated National Workers' Convention (CNT) and the new administration of President Oscar Gestido, was a stalemate. Al- though the workers did not win wage increases greater than the 90 percent already granted them (many other public employees re- ceived hikes averaging 125 per- cent), the government admitted that they were badly underpaid and promised them special consid- eration in the next budget. The CNT, which originally had strongly backed the strike by calling a reasonably successful 24-hour general strike and a one-hour work stoppage to support it, tried to back away when the strike became unpopular. A fractious Communist faction in the union apparently disregarded party instructions, attempted to force an escalation of the strike, and lost. Despite their failure to make major gains in this sttrike, the Communists probably wi 1 have many opportunities to stir up labor unrest in the near fu- ture. Economic conditions are deteriorating--the cost of living rose 16.7 percent in the f_rst two months of 1967, and could pass 1965's record of near---y 90 percent--and worker discontent remains high. President Ge=stido is concerned that internal tiru- guayan problems may defy short- term solutions. The government has not yet attempted to enforce a restrictive wage policy in the private sector nor to control prices. The Communists have ai ready demonstrated their ability to use labor agitation over le-giti- mate economic grievances fcr po- litical ends. They reportedly hope to pursue this tactic to promote a general strike and widespread agitation durinc the inter-American summit meeting scheduled in Punta del Este next month. They may well succeed in mounting sizable demonstra- tions in Montevideo--some 10 miles away--but it seems urlikely that they could seriously threaten stability. 25X1 SECRET Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Approved For Release 2007/03/13 : CIA-RDP79-00927AOW700050001-6 SECRE"1' CHANCES FOR STABILIZATION IMPROVE IN ARGENTINA The prospects for economic and political stability in Argen- tina have been improved consider- ably in the past few weeks by the government's decisive actions on labor and economic problems. The regime's success in forcing the General Confederation of Labor (CGT) to call off a 48- hour strike scheduled for this week has considerably weakened the opposition group with the greatest potential for thwarting government reform efforts. Presi- dent Ongania's strong stand against the unions not only broke their strength, but also increased military support for his policies, which the generals had severely criticized in the past. On the economic front, the 40-percent devaluation of the peso announced on 13 March (350 pesos = $1 US) together with re- forms in the tax structure and increases in public utility tar- iffs have qualified Argentina for an International Monetary Fund stand-by agreement which probably will be announced soon. The unexpectedly large devaluation, which exceeded the prevailing "black market" rate,should SECRET Approved F Ie~p 20 P 1~: j provide a respite from further speculation against the peso. It should also encourage exporters and stimulate foreign investment in Argentina. The devaluation was accom- panied by an increase in tariffs on traditional agricultural ex- ports--already competitive in world markets--which should add 40-50 billion pesos to government revenues. Surcharges on a broad range of imports have been low- ered, on the other hand, in an attempt to reduce inflationary pressures. Progress has been made to- ward establishing the regional organizations of the National Development Council, which are to apply economic planning to the interior of the country. The president is also reviewing a draft university reform law which would substitute a govern- ing body composed of faculty members for the autonomous uni- versity administration estab- lished in 1908. Students would have a voice but. no vote in uni- versity administration, and po- litical activity on campus would p?79-09Q2Q057Q0050001-6 25X1 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Amk Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6 Secret Secret Approved For Release 2007/03/13 : CIA-RDP79-00927AO05700050001-6