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November 3, 1967
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Approved Forlease 2007/03/06 : CIA-RDP79-0092006100040001-2 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY State Dept. review completed Secret 51 3 November 1967 No. 0314/67 25X1 Approved For Release 2007/03/06: CIA-RDP79-00927A006100 4 001 oA k -3 AGENCY ARC IVES 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-RDP79-00927A006100040001-2 W SECRET lwiv (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. SECRET Page 1 3 Pace I WEEKLY SUMMARY 3 v 67 Approved For Release 2007/03/06 : CIA-RDP79-009 A006100040001-2 Approved For Release 2007/03/06 : CIA-RDP79-00927A0M100040001-2 SECRET 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. SECRET Approved F Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2 Page 11 WEEKLY SUMMARY 3 Nc, 67 Approved ForQplease 2007/8V-0- .'-RDP79-009274806100040001-2 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. SECRET Approved ForR ase.20 0& : MMOR79-009279MEN-00040001-2 Approved For tease 2007/~-RDP79-009276100040001-2 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. SECRET Approved P elelase 20O'6 S1jW1MP7@- Y7Aa06100040001-2 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2 SECRET DAO PHU QUO (VietnsAm)' Rt. 912 BINH H T~IY 68528 U-67 CI Approved For Release 2007/03/06 : CIA-RDP79-00927A006100040001-2 SECRET Approved For ease 2007/0 ;k DP79-00927 6100040001-2 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 SECRET Approved Foial~ele3se 2QN Q6 gJP79-0O9 APWj00040001-2 Approved For lease 2007/03/0 : CIAq-.~RDP79-00927A006100040001-2 SECRET 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 SECRET Approved Fob Release 20l~0,R :RP~79-0092TA00%4P0040001-2 Approved ForRMease 2007/0:MG TRDP79-009274, 06100040001-2 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 SECRET Approved For F ellease 2007/v3J &1 611% l9-009~7A8U6fd0040001-2 Approved For Release 2007/03/LE*#TP79-009274006100040001-2 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 SECRET Approved For @aseC2007/(Y=gL)CIA Pig 00927AOO6160b40001-2 Approved ForAWease 2007/0?/Rt.k RDP79-00927'06100040001-2 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, SECRET Approved FARM Lease 200VR U : C1 l9-009277ADO s1A0040001-2 Approved For Release 2007/03/06 :_ CIA-RQP79-00927A6100040001-2 S:ECRE1 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. SECRET Approved Fop ea@e 2007/ y /R~y C .~rW p-009g7lAgQ6' 040001-2 Approved For$Mease 2007/OgIRfi;: fRDP79-00927 906100040001-2 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. SECRET Approved FRPfteAe 20 /e : UXIW79 2M36100040001-2 Approved Forease 2007/03/06 ? CIA; y DP79-00927AO'b6100040001-2 SEC RI 1 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. SECRET Approved Fpraslea%9 20WOff: (3YkPJqR79-00g2'hAQ,0 Q0040001-2 Approved For*$elease 2007/0 / ]RIAf DP79-00927.06100040001-2 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. SECRET Approved fW%asr_j200VMfiy q$ 1I?9-009 7/ X109040001-2 Approved For fe ease 2007/0336.IA-DP79-00927A6100040001-2 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 SECRET Approved F ele~s~e 209 / :s RW79-0( 9217oA006100040001-2 , 67 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2 Approved Fo Iease 2007/gI RIf--RDP79-0092P*006100040001-2 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. SECRET Approved FpELRIea a 200W RCy: gE4AU@@R79-009?7AgQy6W040001-2 Approved For4gelease 2007/0 pIP'pDP79-00927 06100040001-2 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. SECRET Approved Fol geal~ 2007 ' 6 Y 6,N'9-00917X@(6fb-b040001-2 Approved For McYease 2007/03/06 : CIA-RDP79-00927A6100040001-2 SECRET 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. SECRET Approved Fcp-a Jec1%e 200: fgL4d~W79-099?-6.40%6j100040001-2 Approved ForQelease 2007/0?/jRt,: DP79-00927`06100040001-2 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. SECRET Approved F$0 IeA; 20 iblf: V 7930 !'A(bb6100040001-2 SECRET Approved Fo lease 2007/03/06 : CIA-RDP79-0092 06100040001-2 SCENE OF NIGE+IIAN CIVIL WAR Bonny nta Isabel EQUATORIALI FERNANDO Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2 SECRET Approved For e1ease 2007/03/(hhCGIAlk'BP79-00927ia6100040001-2 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. SECRET 25X1 Page 19 WEEKLY SUMMAR 3 N v 67 Approved For Release 2007/03/06: CIA-RDPV9-00927AOo06100040001-2 Approved For Release 2007/gJ R9 .RDP79-00927A006100040001-2 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 SECRET Approved Fba!Tlea 201W53MV:MIIP79-0033Si4006100040001-2 Approved For+RQlease 2007/0gff,RDP79-0092706100040001-2 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. SECRET 25X1 Approved Fg~glee 200gQ61: x,79-0q2FMOg'Fj00040001-2 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06100040001-2 SECRET SECRET Approved For Release 2001 06 : CIA-RDP79-00927A006100040001-2 Page 22 Y SUMMARY 3 No\ 67 Approved For lease 2007/00p8kCfrRDP79-00927 6100040001-2 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 SECRET Approved lease 209 '/ M6 SCUMPOP7 - e27AU06100040001-2 Approved For Release 2007/03/06 : CIA-RDP79-00927A006100040001-2 SECRET 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. SECRET 25X1 Approved Fpdr eleMe 20Q 03 ( 6 S%MW79-099AbAO*100040001-2 Approved For Release 2007/0SiiC IRLMDP79-00927 6100040001-2 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 SECRET Approved FBOLMIed a 206? MW: CWWWDW9-00927VD651a0040001-2 Approved For Release 2007/4 06, RC ,RDP79-00927AO06100040001-2 J 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