WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006100040001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 33
• Document Creation Date: December 20, 2016
• Document Release Date: April 10, 2006
• Sequence Number: 1
• Publication Date: November 3, 1967
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed
Secret
51
3 November 1967
No. 0314/67 25X1
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(Information as of noon EST, 2 November 1967)
Far East
VIETNAM
The final steps in establishing constitutional
government were taken on 31 October with the
inauguration of Thieu and Ky, and the installa-
tion of the lower house of the legislature.
Meanwhile, there are further indications that
the Communists plan to step up offensive opera-
tions in areas that have been relatively quiet
during recent months.
MODERATION REMAINS THE ORDER OF THE DAY IN CHINA
Recent developments suggest that moderate leaders
are consolidating their position in Peking, and
that, as a result of their efforts, comparative
order has been restored to most of China.
PEKING SUFFERS NEW REVERSES ABROAD
The surly retreat by the Chinese Communists from
Indonesia and Burma, where intemperate actions
growing out of the Cultural Revolution had exacer-
bated already strained relations, reflects a shift
toward a more pragmatic approach in foreign rela-
tions.
Europe
SOVIET UNION'S 50TH ANNIVERSARY CELEBRATION UNDER WAY
Representatives of more than 100 foreign Communist
parties, labor unions, and pacifist groups began
gathering in Moscow this week to participate in
the 50th anniversary celebrations. A scattering
of important officials from non-Communist nations
is expected to arrive this weekend for the formal
state activities scheduled for 6 and 7 November.
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RUSSIA CONTINUES ITS "PLOWSHARE" PROGRAM
An underground nuclear explosion on 6 October, be-
lieved to be the latest test in a Soviet Drogram
to develop peaceful applications of nuclear detona-
tions, may have been intended to create z gas stor-
age cavity.
POLITICAL DISPUTE IN MOSCOW OVER RESOURCE ALL CATIONS 12
In a major article published last week, p litburo
member Polyansky, the regime's top agricu tural
administrator, registered his dissent fro; recent
economic decisions regarding agriculture.
SOCIALISTS UPSET RULING AUSTRIAN CONSERVATIVE: 15
Victories by the opposition Socialists in recent
municipal and provincial elections are the result
of widespread public dissatisfaction with the per-
formance of Chancellor Klaus' People's Pasty govern-
ment.
SWEDEN'S SOCIAL DEMOCRATS MOVE TO THE LEFT
The shift to the left by Sweden's long-dormant
Social Democratic Party, as revealed by try deci-
sions made at the party's recent special cDngress,
will be felt in both domestic and foreign )olicies.
Middle East - Africa
THE WEEK IN PERSPECTIVE 17
I3IAFRANS STILL FIGHTING HARD IN NIGERIAN WAR
The Nigerian Army has run into much stiffer resist-
ance within the Ibo heart of Biafra, but ctntinues
to advance in minority areas around the fr nges.
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CONGO (KINSHASA) EVACUATION STILL NOT SETTLED
Efforts to evacuate the mercenaries from the east-
ern Congo have run into some major snags that will
require new foreign assistance if they are to be
overcome.
UN SECURITY COUNCIL DIVIDED ON MIDDLE EAST RESOLUTION
Although all the council members are agreed on send-
ing a United Nations' mediator, considerable dif-
ferences exist over the guidelines that he should
be given.
Western Hemisphere
VENEZUELA'S RULING PARTY SPLITTING
A fight for the party's presidential nomination
threatens to cost the Leoni administration its slim
majority in congress and reduce it to essentially
caretaker functions for the remaining 15 months of
its term.
LABOR UNREST WEAKENS PERUVIAN PRESIDENT'S PRESTIGE
President Belaunde's indecision and delay in cop-
ing with recent labor unrest and violence have
greatly undermined his influence and prestige.
GESTIDO'S NEW CABINET UNLIKELY TO SOLVE URUGUAY'S
PROBLEMS
The President has formed a new cabinet representa-
tive of most factions of his divided Colorado Party,
but the exclusion of two key factions will probably
make it difficult for him to control the legisla-
ture.
DOMINICAN NON-COMMUNIST OPPOSITION PARTIES CONTINUE
DIVIDED
Divisions within the major opposition party may re-
sult in changes in the party's leadership. Right-
wing politicos continue maneuvering in an attempt
to form a pro-Wessin united front.
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FAR EAST
Hanoi denounced the inauguration of the new
Saigon government as an "odious farce" that took
place in an atmosphere of terror and repression.
North Vietnamese propaganda portrayed the Viet
Cong mortar attack on Independence Palace during
the inaugural reception as proof that the Thieu-
Ky "clique" could not even ensure effective se-
curity in their own capital. On the eve of
Vice President Humphrey's arrival, Hanoi claimed
that Saigon could not guarantee his safety and
warned of "terrible things" to come. The in-
tensive Communist assault on allied positions in
Binh Long Province north of Saigon may also have
been an attempt to score a military success timed
to reduce the political impact of the inauguration.
The campaign to restore order in China has
registered an important advance with the apparently
effective enforcement of Peking's directive to
reopen all schools. In contrast to attempts to
reopen schools last spring, which were frustrated
by militant Maoist leaders and their Red Guard
supporters, the success of the present effort
appears to be the result primarily of army partici-
pation. The military is also playing a leading
role in dismantling Red Guard groups and restoring
central administrative control.
The return to a more pragmatic conduct of
affairs was also apparent in Peking's decision
to cut its losses in relations with Burma and
Indonesia without provocative actions that would
only further exacerbate the damage caused by
Cultural Revolution excesses. Peking bowed to
Burma's request for the withdrawal of Chinese
technicians and acceded to Indonesia's demand for
the release of its remaining diplomatic personnel
in Peking and the closure of the Chinese Embassy
and consulates in Indonesia.
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DAO PHU QUO
(VietnsAm)'
Rt. 912
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J
VIETNAM
The final steps in the estab-
lishment of constitutional gov-
ernment were taken on 31 October
with the inauguration of Thieu
and Ky and the installation of the
lower house of the legislature.
The political make-up of the
lower house confirms the trend
evident in the presidential and
upper house elections--the demise
of the old political groupings and
the rise, of new centers of politi-
cal power. The old-line Vietnam-
ese Nationalist Party (VNQDD) and
the Dai Viet Party, for example,
elected only 17 representatives
to the house, while a new politi-
cal entity--the Farmer, Worker,
Soldier Party led by Senator Tran
Van Don--elected at least 21 mem-
bers. Don's group comprises the
largest single bloc in the house.
Of the 35 Catholic members,
only 15 have been identified as
representatives of Catholic polit-
ical organizations. In the past,
however, the Catholics have shown
considerable organizational abil-
ity and they may eventually pro-
vide the nucleus of a very strong
political grouping. Although
about 65 Buddhists were elected
to the house, most of them are
probably uncommitted to any bloc
and there is no discernible pros-
pect at this time that they will
be able to form a cohesive unit.
Only six of the Buddhists have
been identified with the militant
An Quang faction.
The dispute between the mili-
tant and moderate Buddhist fac-
tions over the charter issue re-
mains unresolved, but some ele-
ments are alleged to be pressing
for a reconciliation. These ele-
ments apparently believe that
Buddhist unity must be achieved
in view of Catholic strength in
the National Assembly. Despite
these pressures, moderate leader
Thich Tam Chau has reinstated the
charter that he had suspended
earlier, at government request,
in an effort to reach a settle-
ment with the militants. Should
the desire for unity spread in
Buddhist circles, the intransi-
gent Buddhist leaders may become
increasingly isolated from their
followers.
Despite apparent behind-the-
scenes efforts toward a compromise,
the militants continue to keep up
pressure on the government to re-
voke Chau's charter. An attempted
militant protest in Saigon was
broken up by the police on 29 Oc-
tober, while timely countermeasures
by the police in Hue may have
headed off Buddhist plans for ex-
tensive antigovernment demonstra-
tions there.
The Military Situation
in the South
There have been further indi-
cations this week that the Commu-
nists are planning to step up of-
fensive operations in the northern
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III Corps area--a region that has
been a relatively quiet military
sector during recent months.
This move is probably aimed at
maintaining widespread pressure
on the allies in the hope of pre-
venting a concentration of allied
strength against Communist units
in any one area.
At least two regimental ele-
ments of the Viet Cong 9th Division
have deployed into the Loc Ninh -
Phuoc Binh area. Beginning on
28 October, Communist units
mounted attacks on strategic al-
lied military facilities in the
vicinity of Loc Ninh. Although
they suffered heavy casualties
in the assaults, it appears that
they intend to keep up the pres-
sure and that the focus of the
action may shift to the vicinity
of Phuoc Binh.
'_'he Communises may hope to
repeat successes --.hey scored in
this region in early 1965 when
severe casualties were inflicted
on several ARVN units. The ter-
rain facilitates the mounting of
ambushes and the protected move-
ment of Communist units. Reports
by prisoners suggest that ele-
ments of the North Vietnamese
Army (NVA) 7th Division may also
have been involved in the action
along with the NVA 88th Regiment?
an outfit that recently moved
into III Corps from the western
highlands.
North Vietnamese Military
Developments
North Vietnam will probably
continue to operate a small force
of fighter aircraft from DRV air-
fields despit> the heavy damage
to its air establishment during
the past week .
For the time being, MIG ac-
tivity probakLy will be limited
in scope and intensity. Air en-
gagements anc bombing raids have
greatly reduced the number of
fighters in r:)rth Vietnam. More-
over, substartial damage to
equipment anc injury to key
personnel prcaably have occurred
as a result c the air strikes
on Phuc Yen.
The Norti Vietnamese, how-
ever, have a]r-eady restored their
airfields to the extent that at
least limitec MIG operations can
be supported. US aircraft have
been challenc3d by Communist
fighters on E2veral occasions
since the Phi:_- Yen raids.
Hanoi al3arently intends to
continue intErceptor missions
even if they are on a small scale.
By maintaining the threat of
fighter opposition, North Vietnam
can force the US to continue to
provide its strike groups with
heavy fighter cover. Moreover,
this tactic c:institutes a low-
cost proposition for Hanoi, in
that it demands only a limited
number of op?rational fighters
and servicealle runways.
Truck Traffic in Laos
PE nhandle
The anneal movement of sup-
plies from North Vietnam into the
Laos panhand appears to be
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under way as the rainy season
draws to a close. Aerial observ-
ers have spotted heavy truck move-
ment on Route 912, one of the two
main roads from North Vietnam into
Laos. The Communists have also
probably been building up stock-
piles along Route 15 near the Mu
Gia Pass in anticipation of the
coming of the dry season.
The amount of supplies moved
through the panhandle road network
is believed to have risen during
the dry seasons of the past three
years. A high of about 30,000
tons moved into the panhandle via
the 912, Mu Gia, and Lao-Cambo-
dian route, during the 1966-67
season, and the Communists prob-
ably intend to ship at least as
large a quantity during the com-
ing dry season.
North Vietnam has sent to
the USSR's 50th anniversary cele-
bration a top-level delegation
that includes party First Secre-
tary Le Duan and politburo mem-
bers Vo Nguyen Giap and Nguyen
Duy Trinh. Le Duan reportedly
has been in Moscow for the past
several weeks, presumably to
work out with the Soviets exactly
how the Vietnam war and China
will be treated during the anni-
versary. Press articles by
North Vietnamese leaders in honor
of the occasion have contained
praise of both Chinese and Soviet
assistance on the war. The North
Vietnamese are known to have
voiced displeasure to DRV offi-
cials in Moscow because certain 25X1
Soviet broadcasts omitted pas-
sages from one article that were
favorable to Peking.
Soviet Anniversary
Celebrations
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MODERATION REMAINS THE ORDER OF THE DiY IN CHINA
Recent developments suggest
that moderate leaders are con-
solidating their position in Pe-
king, and that, as a result of
their efforts, comparative order
has been restored to most of
China. The drive to clear away
the political wreckage left by
the Cultural Revolution goes on.
Regime propaganda continues to
stress the importance of re-es-
tablishing effective administra-
tive machinery and of getting
students to return to the class-
rooms.
Although tensions among rival
Red Guard groups have not sub-
sided completely, broadcasts from
several provinces indicate that
there is general compliance with
Peking's order to reopen schools
throughout the country. Classes
for the first few weeks apparently
will concentrate on political
indoctrination--mostly the study
of Mao's thought--and on military
and athletic training, all under
the supervision of army person-
nel. The regime evidently intends
to begin regular classes with a
more normal curriculum soon, how-
ever. The middle school selected
as a model by authorities in Pe-
king has already begun teaching a
standard curriculum.
Previous attempts to reopen
schools last spring were largely
frustrated by the militant Maoist
leadership and extremist Red Guard
groups. The present drive pre-
sumably will be opposed by some
of these elements and, in addi-
tion, there are certain inherent
problems in the situation. Several
recent broadcasts have acknowl-
edged that -eachers are reluctant
to take cha:ge of students who
victimized hem at the height of
the Cultura Revolution. Former
Red Guards eportedly fear retalia-
tion by tea hers, and regional
broadcasts lake it clear that many
students hae not yet returned to
their schoo s. The participation
of the arm& forces, however, sug-
gests that he current efforts to
get the students back to class
will have m,re success than pre-
vious effor s.
Broadcasts also suggest that
Red Guard o.ganizations are being
further disiantled in an attempt
to restore entral administrative
control and ensure that students
return to c ass. A Shanghai
broadcast r ports that a Red Guard
headquarter at Chao-tung Univer-
sity has be n slashed by 90 per-
cent to get "young fighters" back
into the cl ssrooms. A report
on the form tion of a "great al-
liance" of revolutionaries" in
the Sixth M chine Building Min-
istry indic tes that the army
forced the issolution of rival
Red Guard g cups in the ministry
and reorgan zed them on functional
lines. Thi move is apparently to
serve as a ational model.
Two recent reports suggest
that Chen P-ta, a leader of the
militant Maoist group in Peking,
may be on t.e way out. Chen is
said to hay been attacked in
early October by Lin Piao, Mao's
anointed he r and himself a leading
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extremist, for having been re-
sponsible for the "mess" of last
July and August--when "revolu-
tionary" disorders were at their
height throughout China. Chen,
who has close connections with a
number of lesser "leftists" who
have been disgraced in the course
of the current campaign for mod-
eration, may become a scapegoat
for the failure of the radical
policies pursued by the Peking
Maoists last spring and summer.
PEKING SUFFERS NEW REVERSES ABROAD
The Chinese Communists have
beaten a surly retreat in two
Southeast Asian countries where
intemperate actions growing out
of the Cultural Revolution had
exacerbated already strained re-
lations.
Early this week Peking re-
luctantly agreed to withdraw Chi-
nese technicians from Burma, and
acceded to Indonesian demands
that resulted in a de facto rup-
ture of diplomatic ties between
Peking and Djakarta. Chinese ac-
ceptance of these setbacks with-
out immediate reprisals--in ef-
fect a decision to cut their
losses--reflects a shift toward
a more pragmatic approach in the
conduct of foreign relations.
On 31 October--one day after
the deadline set by the Indone-
sians early in the month--a Chi-
nese aircraft flew to Djakarta with
the remaining Indonesian Embassy
personnel who had been held hos-
tage, and returned to China with
all Chinese officials serving in
the embassy and consulates in
Indonesia. Neither Peking nor
Djakarta wishes to bear the re-
sponsibility for initiating a
formal break in relations and
both countries are treating re-
lations officially as "suspended"
rather than broken. The trucu-
lent tone of the Chinese Foreign
Ministry note on 28 October,
while acceding to Djakarta's de-
mands that Indonesian diplomats
be released and all Chinese per-
sonnel be brought home, appeared
designed to mask a tactical with-
drawal that leaves Peking vul-
nerable to charges of abandoning
the three million Overseas Chi-
nese in Indonesia.
Diplomatic relations con-
tinue between Peking and Rangoon,
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but the Chinese presence in Burma
is being reduced to a bare mini-
mum. The Burmese Government was
angered by Peking's threat to
terminate Chinese aid projects
unless anti-Chinese activity was
halted. It requested on 6 October
that all personnel associated with
the aid program---approximately
450 technicians--be withdrawn by
the end of the month.
6
Apparently fearful of com-
pounaing this loss, Peking has
avoided actions that might provoke
the Burmese to shut down the em-
bassy. The Chinese statement on
31. October announcing the with-
drawal of the technicians was of-
fensive, however. It accused the
Ne Win regime of sabotaging Sino--
Burmese relations and reaffirmed
support for the "revolutionary
struggle" of the Burmese people.
China's return to more prag-
matic methods in the conduct of
foreign polity is underscored by
recent devel)pments in the Hong
Kong "confrcztation." On 20 Oc-
tober the C1-.Lnese suggested talks
between Chir3se and Hong Kong
border authc-ities to discuss the
abduction of a British police in-
spector six lays earlier. The
Chinese insisted, however, that
meetings be field in China--ap-
parently seeing to set up a
damaging parillel with the nego-
tiations earE_y this year that
led to the F)rtuguese capitula-
tion in Mace).
The Chinese may also be tak-
ing steps tc restrain the more
extreme elen_nts in the Hong Kong
apparatus. eading Hong Kong
Communists ti ire summoned to Can-
ton in late )ctober, possibly in
connection tiwth the formation of
a "People's ~ommittee" organized
on 28 October to support the
"long-term struggle" a ainst the
colonial autiorities.
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EUROPE
Top-level Communist delegations from around
the world are arriving in Moscow for the Soviet
jubilee celebrations. The first to arrive were
the North Vietnamese, led by party First Secretary
Le Duan. The ceremonies will culminate in Red
Square on 7 November. To mark the occasion, the
regime has granted tax benefits and has offered
prospects for more consumer goods. An amnesty
for minor offenders has also been decreed.
Behind the festive facade, however, a policy
dispute surfaced. A member of the politburo has
published an article recording his dissent from
recently announced economic policy. The tone of
the piece suggests that, by his reckoning, he
has lost a battle but not the war.
Soviet propaganda and diplomatic activity
with respect to the Middle East subsided somewhat
as the new crisis there ebbed. Before the latest
flare-up occurred, the Soviets had been trying to
bring the Syrians into line with the other Arabs
on terms for a settlement.
On 31 October the North Atlantic Council gave
a green light to the US to negotiate a safeguards
article with the Soviets for the treaty on non-
proliferation of nuclear weapons. The NATO coun-
tries are not committed, however, to accept the
result. The members of EURATOM--always excepting
France--will want to satisfy themselves that the
article will not operate to their detriment.
East Germany is again pressing its search
for recognition. A party politburo member was re-
cently dispatched to Cairo to establish high-level
contacts with the ruling Arab Socialist Union of
Egypt, and another group is in Singapore where it
may succeed in establishing a trade center. The
long-standing East German quest may be taking on
new urgency because of the desire of East European
countries to establish :relations with West Germany.
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SOVIET UNION'S 50TH ANNIVERSARY CELEBF \TI ON UNDER WAY
Representatives of more than.
100 foreign Communist parties,
labor unions, and pacifist groups
began gathering in Moscow this
week to participate in the 50th
anniversary celebrations. A
scattering of important offi-
cials from non-Communist nations
is expected to arrive this week-
end for the formal state activi-
ties scheduled for 6 and 7 Novem-
ber.
The Soviet central commit-
tee and the Supreme Soviets of
the USSR and the Russian Repub-
lic open a two-day joint session
on 3 November that will be at-
tended by the visiting Communist
dignitaries. Soviet party Gen-
eral Secretary Brezhnev will de-
liver the principal speech.
Other meetings, such as an in-
ternational gathering of trade
unionists, were held earlier
in the week.
Most of the governing Com-
munist parties will be repre-
sented in Moscow by their top
party and government officials
Even those Communist nations seek-
ing to keep a foot in both the
Soviet and Chinese camps--North
Korea, North Vietnam, Rumania,
and Cuba--are sending high-level
delegations. Albania refused
to attend and China did not
deign to answer Moscow's formal
invitation. Peking instead is-
sued a vitri)lic diatribe against
the "Brezhne7-Kosygin clique"
through the few China News Agency
last weekend.
Moscow ias marked the occasion
with a serie; of highly success-
ful achiever>nts in space and an
amnesty for Drisoners serving minor
sentences. ::t carefully stopped
short of freeing the more promi-
nent political detainees, however,
and beneath :he festive air there
seemed to be an undercurrent of
concern that some event inside or
outside the soviet Union would oc-
cur to mar ti.e celebrations.
The reniezvous and docking
of two unmanied spacecraft earlier
this week, fallowing close upon
the landing of a capsule on the
surface of Venus on 18 October,
has refocuse`I world attention on
Soviet space exploits. For So-
viet space officials the auto-
docking feat took on additional
significance because it restored
their confidence in Soviet manned
space hardwa-e and capabilities--
a confidence badly shaken by cos-
monaut Komar:iv's death aboard
Soyuz-1 six lonths ago.
The spare link-up was prob-
ably a rehea-sal for a manned
event, thougi not for one before
the 7 Novemb ~r holiday.
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The Soviets evidently in-
tended to conduct a third "space
spectacular"--an unmanned cir-
cumlunar flight--in late October,
possibly using a Soyuz capsule,
with return to earth around 1
November. This flight has prob-
ably been canceled or resched-
uled until later this month.
The traditional parade on
7 November will probably reveal
more new types of military hard-
ware than in previous years.
Seven previously unobserved items
of equipment were seen by West-
ern attaches last week at the
first night rehearsal. Although
most of this equipment was
covered by canvas, five of the
items are believed to be asso-
ciated with missile weaponry. A
possibly new type of medium tank
was observed at a rehearsal
earlier in October.
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RUSSIA CONTINUES ITS "PLOWSHARE" PIOGRAM
An underground nuclear explo-
sion on 6 October appears to be
the latest test in a Soviet pro-
gram to develop peaceful applica-
tions of nuclear detonations.
The shot occurred in western Si-
beria near Tyumen, an area never
before used for weapons testing,
and may have been intended to cre-
ate a gas storage, cavity.
Three other underground nu-
clear tests conducted since mid-
1965 demonstrate the sophistica-
tion and diversity of the Soviet
version of the US Plowshare pro-
gram. One nuclear blast appar-
ently was used to prime a depleted
oil field near Ufa, and a second
probably was intended to boost
natural gas production near Azgir.
In September 1966,_ after conven-
tional methods had failed, a nu-
clear blast snuffed out a gas-well
fire that had burned for nearly
three years near Karshi.
Some of
shots at the
ons test sit
may have yie
the uses of
in construct
several Sovi
erations inv
detonations
of conventic
ably have pr
for the pred
of nuclear b
The Sov
practical ex
plication of
to promote t
petroleum an
any other co
not publishe
from these e
or even admi
have been he
the underground
Soviet nuclear weap-
at Semipalatinsk
Lded information on
iuclear explosions
Lon. In addition,
~t construction op-
)lving simultaneous
)f thousands of tons
,al explosives prob-
)vided data useful
.ction of the effects
;Lasts.
ets have had more
)erience in the ap-
nuclear explosions
e production of
l natural gas than
antry. . They have
any data acquired
:periments, however,
-.ted that the tests
d.
POLITICAL DISPUTE IN MOSCOW OVER RESOURCE LLOCATIONS
Debate among top Soviet
leaders over the allocation of
resources has again broken out in
the open, marring the facade of
unity that the regime has sought
to maintain during the 50th anni-
versary observances. In a major
article published last week, po-
litburo member Polyansky, the re-
gime's top agricultural adminis-
trator, registered his dissent
from recent economic decisions
regarding agriculture.
Polyans_y's article appeared
in the party s leading theoreti-
ca.l journal, Kommunist, which
went to press on 14 October after
the party cei tral committee and
the Supreme soviet (parliament)
had approved the plan and budget
for 1968 and target figures for
1969 and 197(. These plans re-
vised some o: the original 1966-
1970 goals, cutting back long-
range investrents, particularly
in agriculture, to finance
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current military and consumer re-
quirements.
Against the background of
these decisions, Polyansky's state-
ment that the development of agri-
culture "is now as vital and urgent
as ever," appears clearly conten-
tious. To bolster his position, he
reached back to September 1965 for
a quote from General Secretary
Brezhnev: "Certain elements of the
planning and economic apparatus...
thus far do not seem to understand
the importance of the most rapid
growth in agriculture.... These tend-
encies are extremely dangerous."
Polyansky was the chief archi-
tect of the 1965 agricultural pro-
gram which introduced reforms in
planning and procurement procedure,
and committed the regime to a
sharply increased rate of capital
investment in the agricultural sec-
tor over the next five years. The
exceptionally good harvest of 1966
and the above-average harvest ex-
pected this year, however, have un-
dercut support for this program.
By late 1966, it was already evident
that investment was lagging and that
delivery of agricultural machinery
was seriously behind schedule.
Last March, Polyansky spoke
out about this situation with un-
usual frankness. He stated that
"some comrades" were beginning to
argue that because of the good har-
vest, state aid to agriculture could
be cut back. "Such arguments,"
stated Polyansky, "are extremely
dangerous and need to be resolutely
nipped in the bud." This was an
election speech delivered outside
of Moscow. Now Polyansky has taken
the unusual step of presenting his
case in a signed article and has al-
lowed it to be published after eco-
nomic policy has clearly been formu-
lated. This is considerably bolder,
and is a measure of his increasing
concern.
In the article, Polyansky does
not identify his opponents. But his
explicit endorsement of the priority
requirements of heavy industry and
the defense establishment, compared
to his offhand treatment of the im-
portance of increasing consumer pro-
duction, suggest that his argument
may be primarily with Premier Kosygin.
In a speech on 2 October in Mol-
davia, Kosygin said, "Now that we
have created a powerful industry
and a mechanized agriculture... we
can allocate greater resources to
improve people's living conditions."
He thus implied that priority devel-
opment of agriculture is no longer
necessary.
By citing Brezhnev, Polyansky
also was reminding his readers that
the party chief had been the public
sponsor of the 1965 program. Brezh-
nev has not reaffirmed his advocacy
of this program in almost a year,
however, and he seems to have given
in to pressure from other claimants
to resources. It appears, in any
case, that the pressure for increased
defense spending and the need to
placate consumers in the jubilee
year led a majority of the polit-
buro to outvote Polyansky on next
year's plan. The plan figures for
1969 and 1970 can be adjusted, how-
ever, and Polyansky may be looking
ahead to another stage in the de-
bate.
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SOCIALISTS UPSET RULING AUSTRIAN CONSERVATIVES
Victories by the opposition
Socialists in recent municipal
and provincial elections are the
result of widespread public dis-
satisfaction with the performance
of Chancellor Klaus' People's
Party government. For the first
time since World War II, Austrian
politics may be entering a period
of wide-ranging debate of public
issues. During most of this
period, cooperation between the
two parties in the cabinet has
tended to stifle public discus-
sion.
At home, the government is
faced with the highest budgetary
deficit since the war, growing
inflation, and a need--which it
has long recognized but so far
has been unable to do much about--
to restructure the economy.
Abroad, the government has failed
to make progress in solving the
country's two most important
problems: achieving an arrange-
ment with the European Communi-
ties, and settling the long and
violence-ridden dispute with
Italy over the South Tyrol.
The most important Social-
ist triumph came in the Upper
Austria provincial elections on
22 October, the first such Social-
ist success since the war. The
public's disenchantment had be-
come apparent in municipal elec-
tions two weeks earlier, when
the Socialists garnered a signif-
icant increase in votes while re-
taining power in Salzburg and
Klagenfurt.
People's Party leaders, un-
der pressure to restore the gov-
ernment's popularity, may decide
to take such hazardous steps as
trying to ease the budget deficit
by reducing the overstaffed civil
service. There may also be a
cabinet reshuffle to bring in new
faces. If the party's fortunes
fail to improve in the three mu-
nicipal and provincial elections
scheduled in 1968, Socialist leader
Bruno Kreisky believes there is
even a chance Chancellor Klaus
will be replaced by People's Party
boss Withalm.
The Socialists, who decided
to go into opposition after the
1966 national elections, believe
their recent electoral victories
vindicate their rejection of the
coalition. They now regard the
next scheduled national elections
in 1970 with "restrained optimism"
because they believe only further
difficulties are in store for the
Klaus government. Their principal
strategy appears to be to press
on with their so-far-successful
opportunistic method of opposi-
tion.
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SWEDEN'S SOCIAL DEMOCRATS MOVE TO 11E LEFT
The shift to the left by Swe-
den's long-dominant Social Demo-
cratic Party (SDP) , as revealed
by the decisions made at the par-
ty's recent special congress, will
be felt in both domestic and for-
eign policies.
The steady downward trend in
SDP political fortunes in recent
years, demonstrated in last year's
local elections in which the SDP
vote dropped sharply and that of
the Communists gained, has been
the major factor influencing the
party to try to project a more
radical image. Prime Minister
Erlander, a moderate, has been
under particularly strong pressure
from the SDP left wing, which has
insisted that the SDP program must
be "radicalized" to head off mass
defections to the revitalized Swe-
dish Communist Party.
Under their new leader, Carl-
Henrik Hermansson, the Communists
have had considerable success in
presenting themselves as a national
party and an acceptable alterna-
tive for Social Democrats dissat-
isfied with their party's present
policies. The minority position
of the Erlander government has
also led to increased speculation
about the possibility of closer
cooperation between the two par-
ties after the election.
Lacking dramatic domestic is--
sues to capture the imagination
of the electorate and to rally the
faltering party, the SDP leader-
ship has seized oil the popular and
emotional issue Of Vietnam. State-
ments on Vietnam made at the con-
gress by Er ander and Foreign
Minister Ni sson, and the Vietnam
resolution -assed by the congress,
were harshl? critical of the US
role.
The SD: leadership is evi-
dently prep. red to exploit the
Vietnam iss~e in campaigning for
the elections next year, even at
the risk of further straining Swe-
dish-US relctions.
On domestic policies, the
leftists ap]ear to have had less
impact. Th(y are demanding much 25X6
more econom_c planning and the
deconcentra?ion of economic power
held by ban}s, insurance companies,
and large enterprises. Erlander
is resisting this pressure, but
nevertheless found it necessary to
make conciliatory statements at
the congress.
The grcaing influence of the
Social Democratic left wing has
increased speculation that one of
their numbers might be chosen to
succeed the 66-year-old Erlander,
who is expected to retire after
the election next year. Many ob-
servers asstme that the mantle
will fall or young, controversial
Olof Palme, the minister of educa- 25X1
tion, an Erlander protege and one
of Sweden's most outspoken critics
of the US rcle in Vietnam.
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MIDDLE EAST - AFRICA
The major problems of the area show no signs
of improvement.
Arab hostility toward Israel is deepening
and terrorist incidents continue along the Is-
raeli-Jordanian border. Israel may at any time
decide to retaliate against Syria or Jordan or
both; additional Israeli reprisals for the sink-
ing of the Eilat are also possible. Egypt's posi-
tion on acceptable terms for a settlement of the
crisis appears to have hardened. A recent article
in Egypt's most authoritative newspaper states
that the Indian draft resolution currently being
discussed in the UN is as far as Egypt can go in
reaching a political settlement. While this posi-
tion may be partly tactical, there seems to be
little doubt that Cairo is quite pessimistic
over the chances for the adoption of an acceptable
resolution.
As expected, the Greek cabinet was reshuffled
early this week. A number of "unsatisfactory" min-
isters were replaced by other civilians. None are
prominent personalities and no significant policy
changes are likely. On Cyprus, the capture of the
Turkish Cypriot firebrand, Rauf Denktash, who had
been in "exile" in Turkey for nearly four years,
will serve to raise the level of intercommunal ten-
sion on the island. Ankara has denied that Denktash
was on a secret mission for the Turkish Government,
but it must be careful not to give the impression
to the Turkish public that it is retreating from
its commitment to protect Turkish Cypriot interests.
In Congo (Kinshasa) efforts to evacuate the
mercenaries and Katangans are proceeding slowly
but have run into problems that could further delay
a peaceful exit. Fragmentary reports on the recent
fighting at Bukavu suggest that both sides are suf-
fering losses but it is doubtful that the Congolese
25X1 Army can defeat the mercenaries. In Nigeria, the
civil war is likely to continue for some time.
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SCENE OF NIGE+IIAN CIVIL WAR
Bonny
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BIAFRANS STILL FIGHTING HARD IN NIGERIAN WAR
The Nigerian Army has run
into much stiffer resistance within
the Ibo heart of Biafra, but con-
tinues to advance in minority
areas around the fringes.
Federal troops have so far
failed to advance from Eha Amufu
toward the Enugu-Abakaliki road.
They have also not yet moved south
of Enugu, where in the past week
several Biafran attacks in the
southern edge of the city were
beaten off. Another federal ef-
fort to cross the Niger near Onit-
sha failed but reportedly with
few losses. Elsewhere, federal
forces are mopping up in the Cala-
bar area and have linked up with
other troops south of Ikom. The
forces at Bonny are being rein-
forced for an eventual move on
Port Harcourt, but the federal
commander in charge admits this
operation will be a difficult one.
The Soviet Union has quickly
followed up its sale of jet planes
and other military equipment to
the federal government with gen-
eral offers of assistance, in-
cluding a personal letter from
Premier Kosygin to General Gowon.
The Soviets also appear to be
stepping up contacts in Western
and Northern Nigeria, particularly
through Nigerian-Soviet friend-
ship societies and journalist
groups, as well as with the Social-
ist Workers and Farmers Party,
Nigeria's nascent Communist party.
Other bloc countries may be
doing their bit to assist the
spread of Communist influence in
Nigeria. The Poles have made at-
tractive economic offers, includ-
ing one to fully staff harbor
operations at Lagos, where several
Polish pilots are already working.
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CONGO (KINSHASA) EVACUATION STILL NOT SETTLED
The evacuation of the merce-
naries from the eastern Congo has
run into some major snags. Under
terms of the organization of Afri-
can Unity (OAU) resolution of Sep-
tember which outlined evacuation
plans, Zambia was to supply air-
craft to move the mercenaries out
of the immediate area and the Cen-
tral African Republic (CAR) was
to supply troops to stand guard
during the exit.
The International Red Cross--
called in to supervise the opera-
tion--decided that the Katangans
also should be flown out of the
area, rather than marched out
through Burundi to Zambia as in
the original plan. Hence, about
ten additional planes are needed
for the 1,000 Katangans, and Zam-
bia cannot supply them. When the
CAR reneged on its offer of troops,
a mixed OAU force was proposed as
a substitute.
Additionally, it is uncertain
whether Schramme is really willing
to evacuate or is stalling for
time and hoping for outside assist-
ance. Increasing evidence suggests
that a force of mercenaries is
gathering in Angola with plans
either to rescue Schramme or to
create a diversion elsewhere--pos-
sibly Kinshasa or Katanga--to take
pressure off Schramme.
The fighting between the Con-
golese Army and the mercenaries,
which apparently began on the eve-
ning of 1 November near the Angolan-
Katangan border, may have been part
of such a diversionary effort.
The strength and the objectives
of the merce: ary group are not
yet known, a though they possi-
bly may be h,ading toward the
major cities of Katanga.
To furt.er complicate mat-
ters, the Congolese Army near
Bukavu, whic: has been reinforced
in recent we ks to total nearly
5,000 men, m unted an attack on
the mercenar es over the past
weekend. Th Red Cross report-
edly will de Land an immediate
cease-fire i it is to continue
negotiations Congolese Presi-
dent Mobutu eportedly has said
that he will order a cease-fire
only when a _ate for the evacua-
tion is set; in the meantime, he
may be willing to agree not to
order any ne' offensives.
Meanwhi e, on 27 October,
the Belgian government announced
resumption o a limited aid pro-
gram for the Congo. The major im-
pact will be the return of Belgian
faculties to Congolese universi-
ties and secondary schools, and
the restorat on of support for in-
dividual aid projects. Belgian
aid to the Congolese military and
judiciary wi 1 not be resumed.
Belgium s decision probably
stems from a realization that the
Congolese wi 1 not provide the
written secu ity guarantees it has
been demandi_g, and that in any
event such g_arantees would not be
meaningful. Brussels has probably
also been un..er pressure from the
hundreds of echnical aid person-
nel, still o.. government payroll,
who are cool ng their heels in
Belgium. 25X1
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UN SECURITY COUNCIL DIVIDED ON MIDDLE EAST RESOLUTION
The United Nations this week
focused again on the Middle East
crisis as the Security Council at-
tempted without success to agree
on a general political resolution--
one that would set forth basic
principles to guide a UN mediator
in working out a Middle East set-
tlement.
Although all the members are
agreed on sending a UN mediator,
considerable difference exists over
the guidelines that he should
be given. The nonpermanent council
members have been negotiating two
rival resolutions, which differ
mainly in their withdrawal provi-
sions. An Indian draft amended
by Latin Americans calls for the
withdrawal of Israeli troops from
all territory seized during the
conflict, while a Danish-Canadian
draft stipulates more broadly that
no nation should maintain forces
in another state against its will.
Israel maintains that the In-
dian version is unacceptable, as it
would mean a return to the status
quo ante without any resolution of
the problems that caused the June
conflict. The Arab states object to
the Danish-Canadian resolution be-
cause the withdrawal provisions are
not specific. Of the two resolu-
tions, the Indian draft has the sup-
port of about half of the ten non-
permanent council members; the So-
viet Union, France, and Britain
would probably support it if it
were tabled. The British say they
would back it if joined by eight
other members.
hold key positions in the negotia-
tions because they carry the balance
of power in voting on this question,
for which a majority would be re-
quired for passage. Argentina has
taken the lead in criticizing the
Danish-Canadian draft, insisting
that withdrawal from all territory
taken during the June conflict be
a prior and unconditional step to-
ward settlement. Brazil's position
is not as yet certain.
Unable to see any break in the
deadlock among the nonpermanent mem-
bers of the Security Council, some
UN members have suggested that the
US and USSR take over the negotia-
tions in the hope that the two can
build upon the US-USSR resolution,
but even this involves disagreement
on the withdrawal provisions.
If the Security Council is un-
able to agree soon on a resolution,
the president of the General Assembly
says that he has no alternative but
to call for a debate on the Middle
East, which has been put off for the
past few weeks pending council ne-
gotiations. The Yugoslavs have sug-
gested that the Latin American res-
olution of last summer be voted upon
again. Inasmuch as the Arabs have indi-
cated a willingness to accept this
resolution, which they did not sup-
port last summer, the prospects for
passage would be better. The Is-
raelis, although they were not en-
thusiastic about this resolution in
July, might not object to it now.
They continue to hold, however, that
the only means of settlement is by
direct negotiations, which are not
achieved by resolutions such as
The two Latin American coun-
cil members--Argentina and Brazil--
this.
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WESTERN HEMISPHERE
Political instability seemed to intensify
in Latin America during the past week.
Pre-election maneuvering has weakened the
governments of Venezuela and Panama, and seems
in both cases to have made it easier for op-
position parties to win the presidency.
Labor problems and leftist agitation in
Ecuador have led to riots in Guayaquil, where
students are claiming police brutality and try-
ing to force the mayor to resign.
In Peru, military and political leaders
are concerned about President Belaunde's in-
decision and delay in dealing with labor unrest.
Although the immediate problem has been solved
by the approval of a sliding scale of wage in-
creases, new labor demands are likely when pres-
ent contracts begin expiring on 1 December.
Uruguayan President Gestido has formed a
new cabinet, replacing the "nationalists" who
resigned last month with ministers who favor
more orthodox economic policies. He still does
not control the legislature, however, and will
have to negotiate carefully for the votes of the
few members not totally committed to a party line.
President Frei of Chile came close to a
showdown with the new leftist leadership of his
Christian Democratic Party over his wage read-
justment program for 1968. The program is de-
signed to slow the long-term inflationary spiral
that has robbed workers of much of their real in-
come in the past, but party leaders, forecasting
political repercussions from a ceiling on wages,
refused to support the President. They now seem
to be falling into line, but their display of
intransigence is probably a harbinger of future
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VENEZUELA'S RULING PARTY SPLITTI1
Venezuela's ruling Democratic
Action Party (AD) is deeply and
7eemingly irrevocably divided by a
Eight for the party's presidential
nomination in the national elec-
tions scheduled for December 1968.
For nearly a year, AD presi-
dent Luis Beltran Prieto and sec-
retary . general Gonzalo Barrios
have been engaged in a bitter
struggle for the nomination. On 24
September, Prieto--who represents
a younger, more doctrinaire wing
of the party--decisively defeated
Barrios in a primary election that
was to have been the first step in
a complicated process to pick the
party's candidate. The so-called
Betancourt wing of the AD, which
.includes most of the top leaders
and controls the party machinery,
refuses to recognize Prieto's vic-
tory, however, insisting that the
more moderate Barrios is the better
candidate.
The Betar,:ourtistas attempted
to heal the gr)wing breach in party
ranks by suggesting that both men
withdraw in fa,or of a compromise
candidate. Preto refused, and he,
party vice pre3ident Paz Galarraga,
and seven of their supporters have
been "removed" from their party po-
sitions. Beceise Prieto and his
followers have not been expelled,
the split in tie party is not final,
but reconciliE':ion seems unlikely.
Prieto has not decided whether to
stay in the pE-ty and try to gain
control of it, or to pull out and
form a new par r:y .
The country's stability is
not threatener at the present time.
Prieto, howevr, r, commands a large
following wittin the AD, and the
Leoni administration will lose its
slim majority in congress and be
reduced to essentially caretaker
functions if the split is formal-
ized.
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LABOR UNREST WEAKENS PERUVIAN PRESIDENT'S PRESTIGE
President Belaunde's indecision
and delay in coping with recent la-
bor unrest and violence in Peru have
greatly undermined his influence and
prestige.
The President's supporters have
been increasing their demands for
decisive action on economic prob-
lems.
Although labor peace has been
temporarily won by the strikers'
decision to accept wage hikes of up
to 23 percent, there is no indica-
tion that this increase will compen-
sate for spiraling costs of basic
foodstuffs. If the unions seek fur-
ther wage adjustments when present
contracts expire--many of them on
1 December--labor unrest could
emerge again.
launde has lost the will to govern.
In this atmosphere of recurring
crisis and temporary solutions,
public confidence in both the Presi-
dent and the Congress is dwindling. 25X6
There is widespread belief that Be-
Belaunde's increasing tendency to
blame the US for Peru's economic
woes plus the emergence of several
irritants in the country's eco-
nomic relations with the US could
have an adverse effect on the long- 25X1
term future of US-owned enterprises
in Peru.
GESTIDO'S NEW CABINET UNLIKELY TO SOLVE URUGUAY'S PROBLEMS
President Gestido has formed a ificult for Gestido to control the
new cabinet which provides represen-
tation for most factions of his di-
vided Colorado Party--including the
largest, headed by Jorge Batlle.
Gestido's faction holds only three of
the 11 cabinet posts, but the Presi-
dent has close personal ties to
three "independent" Colorado minis-
ters and therefore should be able
to get a majority vote in favor of
his proposals.
Two key Colorado factions have
been excluded, however, and their
absence will probably make it dif-
legislature. One faction is headed
by former finance minister Amilcar
Vasconcellos, who resigned last
month along with four other minis-
ters and a key member of the admin-
istration's economic team because of
opposition to the government's hard
line on labor agitation. Gestido
took advantage of the absence of
these dissenters to announce a new
economic program diametrically op-
posed to the policies advocated by
Vasconcellos. Vasconcellos re-
sponded with a strongly worded
speech that was highly critical of
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Gestido, his new policies, and his
close advisers. This provoked both
Gestido and his foreign minister
to challenge Vasconcellos to duels.
Although "courts of honor"
have ruled that neither contest is
to take place, the ill feeling sur-
rounding the controversy will prob-
ably lead Vasconcellos' faction to
refuse to support the administra-
tion's econom c program in the leg-
islature.
The oche excluded faction
also opposes estido's new poli-
cies. As a r suit, Gestido prob-
ably will be orced to negotiate
with the oppo ition Blanco Party
for the neces ary votes to get
his program a,proved by Congress.
DOMINICAN NON--COMMUNIST OPPOSITION PARTIES CON-INUE DIVIDED
Continuing dissension within
the Dominican Revolutionary Party
(]''RD) and inability to organize ef-
f:(-.!ctive opposition to the Balaguer
regime may lead to major changes in
the party leadership.
Long-standing differences be-
ween moderates and radicals of the
left-of-center PRD have hampered ef-
forts by the party leadership to
forge a cohesive party with a con-
sistent policy. The thesis of "pop-
ular dictatorship" espoused by for-
mer president and party "adviser"
Juan Bosch caused a furor within
and outside the party that led PRD
secretary general Jose Francisco
:;Pena Gomez to "deep freeze" the is-
sue for the time being.
PRD mode-ates are not likely
to stand asid! for such a move by
Pena. A moveient, headed by Jose
Brea Pena and Antonio Martinez Fran-
cisco, to organize support nationally
among PRD mem)ers seems designed to
take advantage of Pena's announced
desire to ste) down as party leader.
Such an atteir,t by the moderates to
assume party ,ontrol would be hotly
contested by 'RD radicals and could
split the par :y once and for all.
Meanwhil:, maneuvering among
right-wing elements who advocate
the return of exiled General Wes-
sin y Wessin -ontinues but to
little purpose. Leaders of the
pro-Wessin Democratic Quisqueyan
Party (PQD) n:t with National Civic
Pena, wearied by his efforts Union (UCN) c:=ficials in early Oc-
to reconcile party dissidents and tober in an s_tempt to gain support
fed up with burdensome administra- for trying tc bring the general
Live tasks and the PRD's shaky fi- back to the L)minican Republic as
nancial condition, has announced their joint Xresidential candidate
that he intends to resign but has in 1970. Pr?sent UCN leaders con-
not set a date. He has picked Se- tinue to demtr concerning a poten-
gundo Armando Gonzalez Tamayo, vice tial Wessin ~ Wessin candidacy,
president during the brief Bosch but may be pi spared to join in a
administration in 1963, as his suc- united front with the PQD if it 25X1
cessor.. Pena has indicated he will shows signs cE becoming a signifi-
"advise" the strongly pro-Bosch Gon-- cant oliticEL force.
zalez while he heads the party.
SECRET
Approved F% lea~s~e 20Q9,:
F&WY79-00 2 4~O%VO040001-2
 25X1 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2
 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2
Secret
Secret
Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2