WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A005700050001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 20, 2016
• Document Release Date: March 9, 2006
• Sequence Number: 1
• Publication Date: March 24, 1967
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Department review completed
Secret
._ -51
24 March 1967
No. 0282/67
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AGENCY AC -i vL.
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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.
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 oft
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Q M Z Demilitarized Zone
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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
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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
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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-
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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
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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.
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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.
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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-
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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?
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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,
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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
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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.
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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.
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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.
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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,
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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
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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.
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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.
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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.
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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.
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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
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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
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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
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