WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006600030001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 39
• Document Creation Date: December 20, 2016
• Document Release Date: May 9, 2006
• Sequence Number: 1
• Publication Date: August 16, 1968
• Content Type: SUMMARY

Approved For Release 2007/03/06 : CIA-RDP79-00927A006600030001-8 (kiltx
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
16 Au52
gust 1968
No. 0033/68
State Dept. review completed
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 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06600030001-8
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(Information as of noon EDT, 15 August 1968)
Far East
Page
1
3
enemy
torces wi soon be rea :y to launch a new
round
of attacks on a broad front. A new
offensive
could
be accompanied, or even Preceded by
North
,
Vietnamese political maneuvers designed to
extract
US concessions on the bombing issue.
LAO GOVERNMENT MAKES MODEST GAINS AGAINST COMMUNISTS
Government troops are moving cautiously to recover
territory lost during the dry season to the Pathet
Lao and the North Vietnamese.
DRIVE AGAINST RED GUARDS PRESSED IN SOME CHINESE PROVINCES
The variety of tactics and the uneven progress of
the new movement to weaken the Red Guards suggest,
however, that the central leadership is not yet in
full agreement on how vigorously to proceed.
PHILIPPINE-MALAYSIAN TENSIONS EASE
Tensions over the Sabah dispute have eased, but the
issue is still far from settled.
Europe
THE WEEK IN PERSPECTIVE 13
USSR PROPOSES NEW COMMUNICATIONS SATELLITE SYSTEM
The Inter-Sputnik proposal appears to be an eleventh-
hour bid to prevent the perpetuation of a global com-
munications system in which the USSR cannot play a
decisive role.
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PRAGUE CONTINUES ON PATH TO REFORM
In his bilateral talks this week with Yugoslav, East
German, and Rumanian leaders, Dubcek reaffirmed his
regime's plans for domestic reform, but there is
lingering suspicion and dissatisfaction within Czech-
oslovakia concerning some of his moves.
CZECHOSLOVAKIA'S ECONOMIC OUTLOOK AFTER BRATISLAVA
Czechoslovakia came out of the Cierna and Bratislava
confrontations apparently without sacrificing its
limited ability to trade more widely in order to re-
tain internal political freedom. The same difficult
economic problems remain, however.
USSR IMPROVES HARD CURRENCY BALANCE WITH THE WEST
Moscow is attempting to protect the sharp gain made
last year in its hard currency payments position.
MOOD OF DISQUIET PREVAILS IN FRANCE
A mood of disquiet and uncertainty prevails in France
as the government prepares for the possibility of re-
newed outbreaks of violence this fall.
EAST GERMAN POLICY CRISIS
Pankow is seeking to shift the emphasis away from the
Bratislava meeting and the rebuff its views received
there, by reviving the dialogue with West Germany.
The preconditions for the meeting, however, are
almost certain to be rejected by Bonn.
Middle East - Africa
THE WEEK IN PERSPECTIVE 23
ISRAELI RAIDS FURTHER WEAKEN HUSAYN'S POSITION 24
The Jordanian Government, faced with growing popular
support for the terrorists because of Israel's coun-
teractions, is also disturbed about reports that
Moscow will indirectly aid Fatah.
NIGERIAN PEACE TALKS STALEMATED AS FIGHTING CONTINUES 25
With the talks bogged down over the basic question
of Biafran sovereignty, both the federal and the
secessionist military forces are attempting to build
up strength for an all-out struggle for control of
the Ibo heartland.
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SOUTHERN YEMEN OUTBREAKS QUELLED 26
Last week's violence has been neutralized by the
army 25X6
KENYA'S POLITICAL POWER STRUGGLE INTENSIFIES 28
Following its heavy-handed, virtual destruction of
the opposition, factions within the ruling party are
maneuvering for power to name the ailing President's
successor.
Western Hemisphere
RUMOR MILL RESUMES IN ARGENTINA
The resignation of Ambassador to the US Alvaro Also-
garay has renewed rumors of a confrontation between
army commander in chief General Julio Alsogaray and
President Ongania over their differing views about
the country's political future.
STUDENT AND LABOR AGITATION CONTINUE IN URUGUAY
The current wave of trouble began after the govern-
ment raided the national university. The Communist
Party is now helping to organize new demonstrations
to mourn a student killed by ,police.
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The Communists in South Vietnam now seem to have reached the point
where a new round of major offensive activity could be begun momentarily.
The final decision on precise timing, however, almost certainly rests
with Hanoi, which must weigh such factors as the requirements of any new
over-all politico-military strategy it may have adopted, the impact of allied
spoiling operations, and the need to achieve tactical surprise against allied
forces which have long been bracing themselves for a new Communist
offensive.
In Laos, government forces are making a small dent into Communist
gains won during the dry season. Pathet Lao and North Vietnamese forces
will probably be content generally to rest: on their laurels unless the govern-
ment begins to threaten seriously key new areas taken last spring.
More provincial governments in China are responding to recent direc-
tives to end factional violence by suppressing or dissolving Red Guard
organizations. In three provinces these organizations have been disbanded
outright. In Kwantung, the radical Red Guard organization continues to
offer some resistance. The army-led campaign against it, however, was
developing a momentum of its own whic:~i, in Canton at least, is creating an
atmosphere of near terror. In many other provinces, authorities seem to lack
either the willingness or the authorization to act firmly.
Uneasiness over future US policy in Southeast Asia became apparent at
Page 1
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PHNO
PENH
Ban Me
Fh,,oi
,Gia Ngbia , i r ~N
SOUTH VIETNAM
O 190
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V I ETNAM
Communist forces are com-
pleting preparations for a major
new round of attacks, possibly
on a country-wide basis.
most of these
preparations will be completed
during the period from 15 to 20
August and that heavy attacks
25X1 could come at any time thereaf-
ter.
Communist main force units
throughout South Vietnam appear
to be focusing on certain key
areas. Allied bases south of the
Demilitarized Zone, key military
and civilian centers along the
coast of the northern provinces,
and isolated towns and outposts
in the highlands as well as in
the provinces northwest of Saigon
all are potential enemy targets.
Additionally, a number of provin-
cial capitals and district towns
could be attacked by Communist
local forces and guerrillas, as
they were during the Tet offen-
sive.
Saigon evidently remains a
prime Communist target but there
are some indications that any
large-scale enemy ground effort
against the capital proper will
follow by five to ten days at-
tacks on peripheral areas around
Saigon and elsewhere in the coun-
try. Communist forces presently
deployed in the vicinity of the
capital have the capability, how-
ever, to launch sudden, small-
scale ground thrusts against stra-
tegic targets within the city or
massive rocket and mortar bombard-
ments.
Allied forces throughout
South Vietnam have long been pre-
paring for a renewed Communist
threat. Nearly one third of the
303 allied maneuver battalions in
the country are positioned in the
critical III Corps area. Many of
these are charged with defense of
the capital. New strategies, weap-
ons, and electronic devices have
been instituted in order to blunt
any large-scale enemy attacks. it
may be virtually impossible, how-
ever, to deny all access to the
capital by small-unit infiltrators
or terrorist squads.
The current low-level of
enemy military activity continued
this week throughout most of South
Vietnam. In the III Corps area,
however, military action picked
up at midweek. A series of bat-
tles in Long An Province accounted
for nearly 200 Communists killed.
This marked the heaviest fighting
in the past month in this area.
An estimated battalion-sized at-
tack and sporadic shellings of al-
lied field positions also took place in
the provinces north and west of
Saigon.
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North Vietnamese Strategy
North Vietnam probably has
concluded a review of its strat-
egy for both the war and the
Paris talks. The evidence indi-
cates that stepped-up Communist
military activity in South Viet-
nam will occur soon, but it may
be accompanied or even preceded
by new North Vietnamese politi-
cal maneuvers designed to bring
about US concessions on the bomb-
ing issue.
Politburo member and peace
talk adviser Le Duc Tho returned
to Paris on 13 August. Since
early July he had been in Hanoi
where he probably took part in
politburo deliberations. En route
to Paris, Tho stopped only briefly
in Peking but spent two days in
Moscow where he probably spelled
out Hanoi's current tactics to
the Soviets.
The Communists have kept
several options open: they could
prolong the military lull in
South Vietnam a bit longer in
the hope of increasing pressure
for unilateral US concessions;
or they could proceed with major
military action and claim it was
required because the US failed
to respond to a period of Commu-
nist "restraint." Chief negotia-
tor Xuan Thuy strongly implied
this latter course during his
presentation in Paris on 14 Au-
gust. He said that the US and the
world have clearly seen the "good
will" of North Vietnam, and noted
pointedly that the US has "thus
had a good opportunity to find
a way toward a peaceful solu-
tion."'
The North Vietnamese had
recently become more open in en-
couraging observers to regard
the Communist military posture
in recent weeks as evidence of
"restraint" in response to US
demands. On 7 August the spokes-
man for Hanoi's delegation in
Paris told a newsman to "closely
study the situation in South
Vietnam during the last few months."
Maneuvering on Laos
Hanoi has also recently
undertaken some private fence-
mending with Laos, presumably
with a view toward an eventual
Indochina settlement. North
Vietnamese Ambassador Hien re-
cently returned to Vientiane
Lao leaders are hopeful a e
visit may be a first step toward
easing tensions between the two
countries.
This solicitude for rela-
tions with Laos, however, is not
apparent in anything the Commu-
nists are saying publicly. A
Hanoi domestic radio commentary
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on 10 August, for instance, took
a sharp slap at Souvanna's gov-
ernment, reiterating that North
Vietnam recognizes only the coali-
tion government set up by the
1962 agreements, which was "over-
thrown by the Americans" in April
1964. Souvanna's government is
"totally illegal," it declared,
and statements made by the prime
minister are "absolutely value-
less."
Political Developments in South
Vietnam
The Saigon government is con-
tinuing to crack down on various
individuals and institutions it
deems to be going overboard on
the peace issue. It is balancing
these strong measures, however,
with some instances of leniency.
These actions are apparently an
attempt to keep a controlling
hand on the pace and direction
of any moves toward political
settlement of the war, while at
the same time undercutting ac-
cusations from the right that
it lacks firmness toward Commu-
nism and from the left that it
dispenses justice arbitrarily.
The latest steps in the
crackdown include the closure
of one newspaper and warnings
to editors and publishers of
others. A military tribunal
has tried and sentenced in ab-
sentia a student leader at Saigon
Page 5
University. Notice has also been
given that demonstrators in the
Saigon - Gia Dinh area will be
summarily tried. These strong
measures do not appear to have
deterred the students, but they
have had the effect of imposing
de facto censorship on the press,
which has noticeably toned down
its editorial comment on contro-
versial subjects.
At the same time, the govern-
ment has just acquitted another
student leader who had been
charged with actions which "weak-
ened the people's anti-Communist
spirit." The government has also
given a promise that no reprisals
will be taken against a student
organization whose leaders have
allegedly been proved to be
Communists. Moreover, in the
three months since Tran Van
Huong's assumption of the prime
ministership, the government has
released a total of 2,728 suspects
who had been detained for long
periods without benefit of a
court hearing.
The government may also be
paving the way for the return
of political exiles. The Lower
House last week petitioned Presi-
dent Thieu to allow all these
persons to come home. The pe-
tition may well have been insti-
gated by the prime minister, who
has reportedly indicated in-
terest in such an "amnesty,"
25X1
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WEEKLY SUMMARY 16 Aug 68
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LAOS: Current Situation
YIEMANE
f
Government-held location
Communist-controlled territory
Contested territory
Savannakhe
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LAO GOVERNMENT MAKES MODEST GAINS AGAINST COMMUNISTS
Lao Government troops are
making modest inroads as they
move cautiously to recover ter-
ritory lost to the Communists
during the dry season.
The month-old campaign to
regain the Muong Son Valley in
north Laos is nearing completion
and is meeting only light enemy
resistance. The government plans
to establish an air navigational
facility at Muong Son to replace
the one lost at Phou Pha Thi last
March. Vientiane also hopes that
Muong Son can eventually be used
as a base from which shattered
government assets in the north-
east can be rebuilt.
In the south, a multibattalion
operation is making some progress
clearing Communist troops from an
area west of Savannakhet town.
Indications of an enemy withdrawal
farther east along Route 9 has
raised hopes that Muong Phalane,
which was lost last February, can
be reoccupied in the next few weeks
without a major effort.
The government is doing little,
however, to strengthen its badly
eroded position in the strategic
Bolovens Plateau area. North Viet-
namese and Pathet Lao troops are
still entrenched in the Sedone
Valley and the provincial capitals
of Attopeu and Saravane are still
virtually surrounded. In addition,
government troops have abandoned
Lao Ngam, which had been success-
fully defended against two heavy
North Vietnamese attacks during
the dry season.
For their part, the Communists
have not demonstrated any inclina-
tion to take advantage of shaky
government morale and unusually
good fighting weather to press
their offensive into government-
held territory. They are probably
not willing to expend much effort
to defend certain fringe areas,
but the continuing presence of a
substantial number of North Viet-
namese troops is a clear sign that
they intend to hold on to most of
the gains made during the dry
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Communist China: Attempts to Suppress Red Guards Continue
= Red Guards have been disbanded
Red Guards continue fighting
SECRET
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DRIVE AGAINST RED GUARDS PRESSED IN SOME CHINESE PROVINCES
More provincial governments
are suppressing or dissolving Red
Guard organizations in the wake
of recent directives to end
factional violence. Many of
these groups are the same shock
troops sent out to the provinces
by the radical leaders in Peking
early in the Cultural Revolution
to attack and discredit local
party and government officials.
The variety of tactics used and
the uneven progress of the new
movement suggests, however, that
the central leadership is not yet
in full agreement on how vigor-
ously to proceed.
In three provinces--Kirin,
Liaoning, and Honan--Red Guard
organizations have been disbanded
outright. The official rationale
given for this extreme action is
simply that these organizations
are no longer "suitable" in the
current situation. The abrupt
manner in which these once power-
ful factions are being dissolved
suggests that local authorities
in these provinces are in firm
control and have unqualified
backing from Peking.
In Kwangtung, however, the
militant Red Flag Red Guards con-
tinue to retain an organizational
identity and to resist, albeit
feebly, the combined forces of the
army, the local government author-
ities, and its arch rival, the
Page 9
establishment-oriented East Wind
faction. According to posters
the Red Flags
nave repeateuly Baled to their
protectors in Peking, including
Mao's wife, for protection against
army brutality. 25X1
Thus far these appeals have
had no effect. The army's campaign
has been developing momentum in 25X1
recent days, creating an atmosphere
of near terror in Canton.
Icanton's
Jai is are u and ru ead trials
are being conducted daily with
many persons--not just Red Flag
partisans--indiscriminately exe-
cuted.
Workers are in a quandary
because if they fail to return to
work they will be labeled class
enemies. On the other hand, if
they do return to their jobs they
risk being arrested by roving
bands of newly deputized vigilantes
called "workers' provost teams"
that are searching the factories
for their quota of "counterrevo-
lutionaries."
A more subtle tactic adopted
in recent weeks in some cities is
to downgrade the importance of
student Red Guards by dispatching
so-called "worker-peasant propa-
ganda teams" to universities and
colleges to impose discipline and
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order on students. Peking has
given heavy propaganda play to
Mao's gift of mangoes to the
worker-peasant team stationed at
Tsinghua University, which earlier
in the Cultural Revolution served
as a headquarters for a particu-
larly powerful and militant net-
work of Red Guards operating
throughout the country. Renewed
attempts are also being made to
disperse older students by assign-
ing those who should have gradu-
ated from high school or college
after 1966 to government jobs or
state farms under army control.
Despite efforts to suppress
Red Guard activities in some prov-
inces, however, authorities in
many others seem unwilling, or
have not yet been authorized, to
act firmly. Armed factional
fighting continues in Fukien
Province, for example, with little
interference from the army. Spo-
radic fighting is still reported
from the provinces of Shensi,
Yunnan, Szechwan and Tibet.
Food Problems Compel
R a in Imports
Faced with expected crop
shortfalls in China this year
caused by poor weather and Cul-
tural Revolution disruptions, the
Chinese may be trying to reverse
the decline in wheat imports that
has occurred during the past 12
months. Peking has just sought
urgent negotiations with Melbourne
for wheat, probably to avoid a
break in grain shipments when
the present one-million-ton con-
tract runs out later this year.
The Chinese also reportedly plan
to negotiate with the Canadians
soon. Current Canadian deliveries.
are scheduled to be delivered in
October.
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PHILIPPINE-MALAYSIAN TENSIONS EASE
Tensions over the Sabah dis-
pute have eased, but the issue
is still far from settled.
At a private meeting on 6
August in Djakarta, during the
conference of the Association
of Southeast Asian Nations,
Malaysia's Deputy Prime Minister
Razak suggested an indefinite
"cooling-off period." Philip-
pine Foreign Secretary Ramos
agreed, and President Marcos re-
portedly has given his approval
to the idea. Since Ramos' re-
turn to Manila, the Sabah issue
has all but disappeared from the
headlines of the Manila press.
The two countries envision
a period of up to six months be-
fore new talks on Sabah would be
attempted. The Malaysians want
the Filipinos to take the initia-
tive, leaving it to them to come
up with a formula that would be
politically acceptable at home.
Malaysia insists, however, that
steps be taken to settle the
Sabah issue after a cooling-off
period, saying it cannot accept
the indefinite continuation of a
foreign claim to part of its
territory.
The Philippine Embassy staff
in Kuala Lumpur, ordered home
:Last month, is still awaiting
final instructions. Marcos had
amended the withdrawal notice by
telling embassy personnel to
remain until 15 August. Ramos
has said he will urge Marcos to
cancel the withdrawal order. A
new arrangement for a monthly
meeting in Malaysia of the stand-
ing committee of the Association
of Southeast Asian Nations, pre-
sumably composed of ambassadors
to Kuala Lumpur, may persuade
Manila to keep its ambassador
there.
It remains to be seen, how-
ever, whether domestic politics
in Malaysia and the Philippines
will permit an extended detente.
Marcos, in particular, must cope
with militant nationalists who
wish to keep the issue alive.
He faces re-election next year
and cannot afford any appearance
of not defending Philippine in-
terests.
Page 11
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The respite from Soviet pressure won by the Czechoslovaks continued
uneasily during the week. Both sides appeared to be taking stock, trying to
assess the relative effectiveness of their policies.
The Soviets undoubtedly were irritated by the support for the Czecho-
slovaks expressed by Tito of Yugoslovia and Ceausescu of Rumania during
their respective visits to Prague. For Dubcek, the practical value of the
assistance they promised may not be immediately felt.
East German boss Ulbricht also conferred with Dubcek, but without
receiving any apparent satisfaction.
There were indications that Prague has not been forced to sacrifice all
freedom to trade with the West. The possibilities for such trade, however, are
limited for a variety of reasons. West Germany, for example, wishes to
expand economic relations with Prague, but is inhibited by
unpleasant political repercussions. F__ I 25X1
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COMMUNICATIONS SATELLITE SYSTEMS
OPERATING GROUND TERMINALS
4 Transmits and receives
I. Receives TV only (USSR)
Intemel!ional Telecommunications Satellite Consortium (INTELSAT) .62 members
Communist nations (8) that signed the proposal for INTER-SPUTNIK
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USSR PROPOSES NEW COMMUNICATIONS SATELLITE SYSTEM
The Soviets have proposed
the formation of a new interna-
tional communications satellite
organization, to be called Inter-
Sputnik. Moscow probably realizes
that most non-Communist nations
will be reluctant to join an or-
ganization that ostensibly rivals
the International Telecommunica-
tions Satellite Consortium (INTEL-
SAT). For this reason, the pro-
posal appears to be designed
mainly to influence the upcoming
renegotiation of the INTELSAT
charter. It may also be a means
by which Moscow can become di-
rectly involved in the negotia-
tions.
INTELSAT now boasts 62 mem-
bers, who are operating 18 ground
terminals and working on some 30
more. Most of these nations are
deeply committed both financially
and politically to INTELSAT. On
the other hand, INTELSAT's present
voting system--based upon each
member's share of international
traffic--has caused deep resent-
ment because of a stipulation
that the US voting strength will
never fall below 50.6 percent.
For this reason the provision in
the Soviet proposal that each mem-
ber have an equal vote will be
especially attractive to most IN-
TELSAT members.
By the end of the year INTEL-
SAT's 18-nation governing body
will make recommendations for
changes in the consortium's char-
ter, which expires in December
1969. The Inter-Sputnik proposal
Page 15
therefore appears to be an elev-
enth-hour Soviet bid to prevent
the perpetuation of a global com-
munications satellite system in
which the USSR cannot play a key
role. Under INTELSAT's present
ground rules the USSR, as a mem-
be.r, would receive only two per-
cent of the votes.
That two Communist nations,
Yugoslavia and Rumania, are on the
verge of joining INTELSAT can only
add to Moscow's frustration and
increase its desire for swift ac-
tion to alter INTELSAT's course.
The Inter-Sputnik proposal
also may be, in effect, an open-
ing statement of Moscow's terms
for membership in INTELSAT. The
US and other leading nations of
INTELSAT have urged the Soviets
to join, but Moscow has always
ruled out this possibility pri-
marily because of INTELSAT's vot-
ing setup. Short of full member-
ship, the USSR and the seven other
Communist nations that signed the
proposal might hope to operate
Inter-Sputnik as an independent
regional system in INTELSAT's
global network.
France and Japan both favor
the creation of regional systems
and probably would give strong
support to the linkup of Inter-
Sputnik with INTELSAT. A Soviet
official announced last month an
agreement to study the relay of
television between Japan and the
USSR via Molniya communications
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satellites. A similar Franco-
Soviet agreement in 1965 resulted
in a continuing program of experi-
mental transmissions via Molniya
between Moscow and Paris.
In the past, the French have
proposed that INTELSAT's global
network be divided into four re-
gional systems managed separately
by the US, the USSR, and two con-
sortiums--one in Europe and the
other in the Far East. There is
general European interest in the
concept of regional systems but
uncertainty over the economics in-
volved and fears of French domi-
nation. F_ I 25X1
PRAGUE CONTINUES ON PATH TO REFORM
In his bilateral talks this
week with Yugoslav, East German,
and Rumanian leaders, Dubcek bol-
stered Czechoslovakia's independ-
ent stand and reaffirmed his re-
gime's plans for domestic reform.
There is lingering suspicion and
dissatisfaction within Czechoslo-
vakia concerning some of Dubcek's
moves as the party prepares for
its 14th congress, which convenes
on 9 September.
Yugoslav party chief Tito,
who received a tumultuous recep-
tion during his visit to Prague,
pledged expanded political and
economic bilateral relations.
He offered to help Prague check
some of its most serious problems,
such as labor supply and construc-
tion. Both Dubcek and National
Assembly President Smrkovsky are
expected to visit Belgrade soon,
the latter in October.
In contrast, East German
party boss Ulbricht's cool recep-
tion in Karlovy Vary on 12-13 Au-
gust was matched by inconclusive
talks with Dubcek that did little
to improve bilateral relations.
Prague rolled out the red
carpet for Rumania's Ceausescu,
who arrived on 15 August to sign
a bilateral friendship treaty.
Like Tito, Ceausescu offered Prague
expanded relations in a show of
support for Dubcek's independent
stand against Moscow.
During these bilateral con-
sultations, Prague advanced its
reform plans by publishing the
drafts of new party statutes to
be submitted to the congress for
approval. Some of the statutes'
provisions are certain to irritate;
those who opposed the Czechoslovak
reformers at Bratislava. One pro-
posal provides for a federal -sys-
tem of two Communist parties, Bo-
hemian and Slovak, under a skel-
etal central party organization.
This change will presumably give
the Slovaks a greater voice in
party affairs and reduces the
powers of the central party appa-
ratus.
Another proposal recommends
that minorities be permitted to
express and solicit support for
their views even after being
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outvoted by the majority, a clear
contravention of the principle of
"democratic centralism." Other
provisions would grant additional
freedom to minorities, give a
greater role to organized non-
Communist groups, permit individ-
uals to enter and leave the party
voluntarily, and provide that all
party bodies be elected by secret
ballot.
There is some dissension
among Czechoslovak liberals over
the slow pace of the reform pro-
gram, as well as suspicion over
the ultimate results of Dubcek's
negotiations with the Soviets.
A controversy, for example, has
developed because of the aboli-
tion of the party post held by
Lt. Gen. Prchlik, a Warsaw Pact
critic whose removal was viewed
by liberal party officials as a
concession to Moscow. Recalci-
trant intellectuals have also at-
tacked Moscow's psychological war-
fare against Czechoslovakia, and
have opposed the regime's pleas
for self-restraint by public media
on this issue.
Moscow, for its part, has
maintained its "wait-and-see" at-
titude toward events in Prague.
Most top Soviet leaders apparently
began their summer vacations last
week; only two full members of
the politburo have been noted in
public since 6 August.
The Soviet press continues
to warn the Czechoslovaks to heed
Moscow's interpretation of the
Bratislava agreement, but its
tenor remains restrained. The
only exception to the suspension
of polemics between Czechoslovak
and Soviet media was an attack by
Literary Gazette in response to a
"provocative" article in the Czech-
oslovak journal, Literarni Listy,
last week. It implicitly demanded
that steps be taken to curb the
journal and served to warn other
Czechoslovak press organs against
similar "anti-Soviet" commentary.
The USSR kept up its military
pressure on Czechoslovakia with an
announcement on 10 August of a
joint communications exercise in-
volving command and support ele-
me:zts of the Soviet, Polish, and
East German armies. The announce-
ment follows the three-week-long
Rear Services exercise held in
areas adjacent to Czechoslovakia.
On 14 August, Warsaw radio re-
ported the presence in Poland of
the new chief of staff of the War-
saw Pact, Soviet General Shtemenko.
The exercise was Moscow's latest
pretext for keeping Soviet troops
in areas bordering Czechoslovakia.
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SECR E'I'
CZECHOSLOVAKIA'S ECONOMIC OUTLOOK AFTER BRATISLAVA
Czechoslovakia came out of This year Czechoslovakia and
the Cierna and Bratislava confron- the other Eastern European Commu-
tations apparently without sacri- nist nations, partially in re-
ficing its limited ability to sponse to the Bratislava agree
trade more widely in order to re- ments, will study what can be
tain internal political freedom. worked out under CEMA auspices to
The difficult economic problems improve manufacturing specializa-
which existed before the politi- tion and trade among this group
cal crisis still remain. of countries. The prospects are
not bright, but it is part of the
The Czechs remain uncertain necessary review of possibilities
about how much Soviet economic within the "socialist camp" to
support they can count on. They provide Prague with the justifida-
can probably take for granted that tion for turning to the West.
Soviet deliveries of essential raw
materials--crude oil, ores and The Czechoslovaks have become
metals, and wheat for human con-
sumption--will continue. The
USSR, however, has been pressing
for higher prices for the raw ma-
terials it delivers and lower
prices on the machinery it re-
ceives in payment. The Soviet
Union also wants more consumer
goods which not only are in short
supply in Czechoslovakia but also
are salable in the West.
Prague's main economic need
is money to develop efficient ex-
port industries. A $550-million
hard currency loan has been re-
quested from the USSR to purchase
Western machinery. The Soviets
are not likely to agree to more
than a small fraction of the re-
quest, which represents a substan-
tial share of Soviet reserves. If
the full loan were granted,
Czechoslovakia could reorient its
trade, in part, away from the Com-
munist world, thus reducing Mos-
cow's economic leverage on Prague.
more cautious in their approaches
to the West, primarily to avoid'
direct political involvement, par-
ticularly with West Germany. Last
spring they sounded out Western
European sources on the availabil-
ity of credits. Initially, only
small deals may be made, including
joint ventures with Yugoslavia.
I Serious consideration is also be-
ing given, however, to establish-
ing a plant in Czechoslovakia to
build Japanese trucks.
A further consideration in
limiting Western credits now was
Czech economic leader Ota Sik's
admission that his country would
not be able to make good use of
large credits until economic plans
had been firmed up. This will be
done in the fall of 1968 at the
earliest. At best, it will take
many years to erase the impact of
past economic mistakes and bring
about a significant level of eco-
nomic improvement.
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USSR IMPROVES HARD CURRENCY BALANCE WITH THE WEST
Moscow is attempting to
protect the sharp gain made
last year in its hard currency
payments position. Hard cur-
rency payments and receipts are
expected to be roughly in bal-
ance this year. No Soviet gold
sales are expected, and mining
operations may add another $150
million to the reserves, bring-
ing ',hem to a level of about
$1.4 billion.
Last year's $100-million
hard currency payments surplus--
the first in a decade--was
largely the result of a drop in
imports, the first such decline
in a number of years, and a rise
of more than $200 million in
exports. The decline in imports
of wheat from Canada and Argen-
tina contributed to the improve-
ment.
In recent foreign trade
transactions, the Soviets have
sought to protect their payments
position by resorting to barter
arrangements. On 1 June the
USSR gave a $110-million order
to Austria for large-diameter
gas pipe to be paid for over
seven years by shipments of So-
viet natural gas. On 29 July,
Moscow and Tokyo signed the first
major agreement on joint develop-
ment of Siberian resources.
Japan is to supply $133 million
worth of bulldozers and other
timber processing equipment
against a 20-percent down pay-
ment. The remaining $106 mil-
--ion is to be repaid by the
USSR in exports of timber over
a five-year period. Japan will
also supply $33 million in con-
sumer goods to the Siberian
forestry development sites on
:=avorable short-term credit.
The visit of the Soviet foreign
trade minister to Japan this
week to publicize this deal sug-
gests that Moscow hopes for ad-
ditional deals with Japan and
other Western nations on con-
cessional terms.
Soviet imports from hard-
currency countries may increase
this year. The USSR has already
purchased $110 million worth of
wheat--almost as much as was
bought during all of 1967. The
USSR is still obligated to im-
port $250 million to $300 million
in Canadian wheat in 1968-69.
Soviet trade with Western Europe
.indicates that imports of machin-
ery and equipment from Western
:Europe will probably rise well
above the 1967 level.
On the export side, it is
doubtful whether the USSR can
sustain the 13-percent growth
rate of the past two years. The
rate of growth in exports of
oil--the major Soviet foreign
exchange earner--to Western
Europe will be somewhat less
than last year, and some slug-
gishness is also evident in ',uch
traditional exports as lumber,
cotton, and nonferrous metals.
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MOOD OF DISQUIET PREVAILS IN FRANCE
A mood of disquiet and un-
certainty prevails in France as
the government prepares for the
possibility of renewed outbreaks
of violence this fall.
The student-labor crisis in
May revealed a deep gulf between
those who demand change and those
who demand order. Even within the
ranks of the Gaullists, whose
massive parliamentary victory in
late June was clearly a mandate
for order, divisions are appearing
between the left-wing minority
pushing for reform and conserva-
tive advocates of the status quo.
Prospects for order on the
student front are not bright,
despite the government's announce-
ment of intended reform measures
which go a long way toward meet-
ing student demands. Pressures
for faster change, and disagree-
ment over the course of such
change, will provide ample is-
sues for demonstrations and
counterdemonstrations. Student
leaders of the National Union of
French Students are under pres-
sure from their followers to re-
occupy the universities when
classes resume in the fall.
Minister of the Interior
Marcellin fears that "new left"
revolutionary groups will gen-
erate renewed violence among
students. Plans have been-an-
nounced to expand the National
Gendarmerie and the Republican
Security Companies, both of which
were used to "restore order durin
25X1 the May crisis.
The govern-
ment clearly intends to use all
force necessary from the outset
to suppress any future disturb-
ances.
The government's recent
"purge" of over 100 radio-TV
journalists who participated in
the May strike has been seen as
a sign that the government is
reaching for authoritarian solu-
tions to its problems. Many doubt
the government's pledge to ensure
objectivity of information on the
state-controlled radio-TV service.
Journalists affected by the purge
have already announced that they
will fight for reinstatement.
The minister of agriculture
is concerned that increased pro-
duction costs for farmers could
lead to a renewal of the violent
demonstrations which erupted in
the fall of 1967.
The prospects on the labor
front are somewhat brighter. Al-
though Minister of Economy and
Finance 4rtoli is worried about
inflation and unemployment, now
running at a very high level by
French standards, most economic
indicators are positive. Signifi-
cant discontent among the workers,
if it comes, would thus appear un-'
likely until next spring or later.
25X1
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EAST GERMAN POLICY CRISIS
East German dictator Ul-
bricht is engaged in a round of
diplomatic and political maneu-
vers designed to indicate com-
pliance with the decisions of the
Bratislava conference.
The regime's privately hos-
tile view of the Czechoslovak
situation, however, has by no
means changed, and Ulbricht's
recent meeting with Dubcek at
Karlovy Vary probably accomplished
very little toward improving rela-
tions. The East Germans may have
hoped that this meeting might
nevertheless be well received at
home by elements which continue
to favor the Czechoslovak reforms.
At the same time, Pankow is
seeking to shift the emphasis
away from the Bratislava meet-
ing and the rebuff its views re-
ceived there by reviving the
dialogue with Bonn. Ulbricht on
9 August thus called upon his
parliament to appoint a state
secretary to handle negotiations
with West Germany. Ulbricht, how-
ever, made any exchange of rep-
resentatives with the West Germans
contingent upon preconditions
that are almost certain to be re-
jected by Bonn.
At the same time the East
Germans are perfectly capable of
taking advantage of opportunities
to harass and embarrass the West
Germans over the status of Berlin.
Various activities already sched-
uled to take place in the Allied
portion of the city could provide
East Germany with any needed pre-
texts. Homeland Day and German
Day will be celebrated later this
month, and a Christian Democrat
party convention, a Bonn parli-
amentary committee work session,
and a police sponsored interna-
tional automobile rally are to be
held in West Berlin this fall.
The East Germans are sure to pro-
test vigorously such "provocations,"
and the Soviets have indicated that
such events, dramatizing Bonn's
ties with the city, invite Commu-
nist harassment.
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 Approved For Release 2007/03/0fi~F !79-00927AO06600030001-8
Terrorism and behind-the-scenes political maneuvering continued to be
the theme for the week.
Greek Prime Minister Papadopoulos narrowly escaped injury in an
assassination attempt this week. The government originally accused right-
wing elements but has since determined that the man arrested is a former
member of Andreas Papandreou's leftist Center Union Youth Organization.
The authorities now plan extensive arrests of suspected leftists.
Terrorist intrusions and military firefights across the Israeli-Jordanian
cease-fire line have continued daily, but no major Israeli assaults have
occurred since the 4 August air attack on the Jordanian town of Salt.
Ethiopian Emperor Haile Salassie is attempting a new initiative to try to
break the deadlock in the Nigerian peace; negotiations in Addis Ababa. He
has called for an urgent meeting there next week of the six heads of state of
the OAU Consultative Committee on Nigeria and the Nigerian principals.
The Emperor is strenuously trying to get the war halted, and is fearful the
dispute will be a disruptive factor at the OAU summit in Algiers next month.
Political maneuvering continues in Congo (Brazzaville) after the unsuc- 25X1
cessful coup attempt earlier this month by some military elements. President
Massamba-Debat remains in office, but at the sufferance of the army, which
is increasingly prominent in the delicate balance of power.
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ISRAELI RAIDS FURTHER WEAKEN HUSAYN'S POSITION
The Israeli air attack against
Jordan on 4 August apparently has
further weakened King Husayn's
ability to control Palestinian
terrorists and presents a real
threat to his own position.
The Israeli action was de-
signed to hit terrorist bases in
Jordan, but a large number of
Jordanian civilians were also
killed or wounded. Such actions
have in the past increased gen-
eral sympathy among Jordanians
for the terrorists.
The Jordanian Government is
concerned about the public's in-
creasing awareness that the
army is unable to counter Israeli
attacks. Consequently, Amman is
trying to avoid provoking Israeli
forces.
rrhe continuing
terrorist activity, however, seems
more likely to increase than dim-
25X1 inish and provides the Israelis
with what they obviously consider
25X1 justification for heavy-handed
blows against Jordan.
These moves, however, will
do little to blunt the populace's
enthusiasm for the terrorists,
who are now generally considered
to be the only ones doing any-
thing to oppose Israeli "aggres-
sion."
Page 24
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WEEKLY SUMMARY 16 Aug 68
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NIGERIAN PEACE TALKS STALEMATED AS FIGHTING CONTINUES
Nigerian peace talks in Addis
Ababa have reached an impasse and
there is no sign that either the
federal government or the seces-
sionist Biafrans are prepared to
make significant concessions in
their respective positions. Mean-
while, steady fighting is con-
tinuing in Biafra, with both sides
seeking to bolster their military
strength in anticipation of a
major federal push into the Ibo
heartland.
Both the Biafran and the
federal negotiating teams have
presented elaborate proposals for
settling the 13-month-old civil
war. Although each side has
employed some conciliatory lan-
guage, the adversaries remain far
apart on the basic issue of Biafran
sovereignty. Neither side wishes
to accept the onus for breaking
off the talks, however, and the
Biafrans in particular would
like to stretch them out at least
until the organization of African
Unity summit meeting scheduled
for next month in Algeria.
In a new effort to break the
impasse, Ethiopian Emperor Haile
Selassie has called the members
of the organization of African
Unity Consultative Committee, who
are sponsoring the talks, to meet
with him in Addis Ababa on 19
August. Meanwhile, he is trying
to shift the discussion from the
deadlocked political issues to the
problem of getting relief supplies
to Biafra's starving refugees.
The Biafran's will to resist
both in the field and at Addis
Ababa has been bolstered recently
by new indications of external
support. On 31 July, the French
announced their support for
"Biafra's right to self-determi-
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SOUTHERN YEMEN OUTBREAKS QUELLED
The areas which last week
were in rebellion against the Na-
tional Liberation Front govern-
ment have now been neutralized
by the army.
by CIA gold." The claims to lead-
ership of the dissidence by outlawed
groups outside the country appear
to have been an attempt to capi-
talize on the initial successes of
the tribal rebels.
The outbreaks appear to have
The most important areas of
tribal rebellion in Baelhan,
Aulaqi, and Radf an now appear to
be quiet after reinforced army
units fought off tribal attacks
last week. The government claims
that the rebels, who included re-
cently dismissed army officers
and mutinied army units, suf-
fered heavy losses in both men
and equipment, including artil-
lery and mortars. Minor incidents
of road mining and ambushes have
recently been reported in the
Subayhi area in the extreme west
and on the Wahidi-Hadhramaut
border in the east, however.
The government continues to
lay the blame at the feet of the
"Saudi-imperialist conspiracy,"
despite earlier disclaimers by of-
ficials that the government did
not really believe that the US
was involved. Speeches mention
CIA agents and the government
press rants about "stooges blinded
been impromptu
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 SECRET
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Dissident Areas in Southern Yemen
S A U D I ARAB I A
Yemen has no established
boundaries in the east.
Y E M E N
*Sana
Al Hudaydah
UPPER
AULAQI
LOWER
Taiz+ AULAQI
' RADFAN ,/'
Mocha Ahwar
Shuqra
Madinat
ETH'Q,EIAG ash Sha'b
Aden
T. A. 1.
r-,
Mukalla
SECRET
MUSCAT
AND
OMAN
Damqut,
I
Ra's Fartak
Qishn
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 Approved For Release 20
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KENYA'S POLITICAL POWER STRUGGLE INTENSIFIES
President Kenyatta's failing
health and the prospect of a gen-
eral election by next spring have
sharpened the power struggle within
the ruling Kenya African National
Union (KANU). Kenyatta's fellow
Kikuyu ministers are determined to
maintain political control by any
means.
25X6
25X61
IShould he die,
last month's constitutional amend-
ment provides that Vice President
arap Moi would replace him for 90
days while a successor is chosen
by direct popular vote. A new re-
quirement that all candidates for
election must be backed by a reg-
istered party eliminates the poten-
tial threat of an independent candi-
date and virtually ensures the
election of the KANU nominee.
The power struggle now has
shifted from the National Assembly,
which formerly would have elected
the successor, to KANU, a coali-
tion of tribal groups held together
by the charismatic Kenyatta. Party
factions now are polarizing around
the conservative Kikuyu leaders,
who are backing Moi, and around
those who fear Kikuyu domination
and support KANU's secretary gen-
eral Tom Mboya, the ambitious and
able economics minister, a Luo.
The fight to control the party
has centered at the branch level
where the two opposing factions
have been hotly contesting the
KANU nominations for seats on lo-
cal councils in the country's first
nationwide elections since independ-
ence. The press has featured the
factional feuds, strong-arm tactics,
and even brawls within the party
branches.
Meanwhile, the opposition
party, Oginga Odinga's Communist-
financed Kenya Peoples Union (KPU),
has had its own troubles in the face
of blatant government harassment.
Although KPU had little chance of
winning many contests outside of
Odinga's home province, Kenyatta ap-
parently was worried by dissension
within KANU and exaggerated reports
of bulging KPU coffers. He chose
not to risk even a slight show of
popular protest against his govern-
ment. As nomination deadlines passed,
the pattern of -a general "unopposed"
KANU victory emerged. Over 85 per-
cent of KPU candidates were disquali-
fied with obvious collusion betweei
civil servants and KANU officials.
By such tactics KANU took over the
city council in Odinga's home town,
the KPU base. Last week in protesf,
Odinga withdrew his remaining candi-
dates, eliminating any need for
elections.
Such heavy-handed and unneces-
sary repression of the legal opposi-
tion and the resulting "election" of
all KANU nominees has effectively
disenfranchised a large part of the
electorate and will only add to popu-
lar discontent and growing distrust
of the Kikuyu establishment. In
the short run it may backfire to
Mboya's advantage within KANU. it
indicates that the Kikuyu are not
above extralegal means to preserve
their position, and over the long
term Moi remains most likely to suc-
ceed.
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Pope Paul VI is expected to visit Colombia from 22 to 24 August to
attend the 39th International Eucharistic Congress and to inaugurate the
second session of the Latin American Bishops' Conference.
The visit has been criticized by some radical clergymen who believe that
the money for the trip could be better spent on social action projects. A
group of Chilean priests and nuns occupied Santiago's principal Catholic
cathedral briefly last Sunday to dramatize the opposition to the Congress
and the Pope's visit.
Bolivian President Barrientos has stayed another of his patented
"purges" of untrustworthy individuals. On 12 August the armed forces high
command resigned en masse. All resignations were refused except those of
Generals Torres and Vasquez. The latter has figured prominently in recent
coup rumors. The resignation scheme apparently had the support of General
Ovando, indicating that he still considers it in his best interest to back
Barrientos.
Municipal elections in rural Guatemala on 11 August gave the ruling
Revolutionary Party 67 percent of the total vote. The strong mandate for
the Mendez administration and the lack of incidents during the election
suggest general satisfaction with the government's performance and its ef-
forts to achieve peace and stability.
Recent acts of terrorism in Haiti have been attributed by President
Duvalier to the Communist Party of Popular Unity. On 5 August an armed
band attacked a military outpost, killing and wounding several militiamen. In
mid-July, terrorists murdered a member of the secret police who had been
covering Communist activities. These incidents are the first indications of
late that the Communists are linked to violence.
Cuba's minister of sugar industries has been replaced. His ouster from
one of the key posts in the government reflects Castro's disappointment with
this year's sugar crop of slightly more than five million tons. This is a million
tons below last year's figure and represents a severe setback in the n1in to
produce 10 million tons in 1970.
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RUMOR MILL RESUMES IN ARGENTINA
The rumor mill has resumed
operation in Buenos Aires with
the resignation of Argentina's
ambassador to the US, Alvaro
Alsogaray. Alsogaray reportedly
was asked to resign by President
Ongania after publishing a book
on the political future of Ar-
gentina--a subject Ongania does
not want discussed by his ad-
ministration at present.
The rumors center around
the long expected confrontation
between Ongania and army com-
mander in chief General Julio
Alsogaray, Alvaro's brother.
Many see the resignation of the
ambassador as the beginning of
the struggle between the Presi-
dent and the general. One re-
port says, however, that Gen-
eral Alsogaray is willing to ac-
cept retirement this year, along
with the other two military serv-
ice chiefs. All three will have
completed at least the normal two-
year tour of duty in their posts.
The Alsogaray brothers are
leaders of the so-called "lib-
eral" faction in the government.
The opposing group--the "nation-
alists"--have been urging Presi-
dent Ongania to adopt policies
that would shift the present gov-
ernment toward the fascist-style
corporate state now existing in
Spain. The liberals want On-
gania to continue the present
course, which encourages foreign
investment in Argentina but has
postponed any return to normal po-
litical activity in the country.
If Alsogaray retires without
a struggle, it would indicate that
he lacks military backing for a
confrontation with the President,
or that he is convinced that On-
gania will continue to steer away:
from the "nationalist" philosophy:.
It seems likely that Alsogaray's
replacement--probably General
Alejandro Lanusse who commands an
army corps in Cordoba--will be
equally positive in presenting
the military viewpoint on govern-
ment policy.
Ongania may also make changes
in his cabinet to balance the re-
tirement of the military command-
ers. The likely victim of a shift
is Interior Minister Borda, who
has been one of the most outspoken
of the "nationalist" faction.
Ongania has so far managed
to maintain a centrist position
between the opposing factions in
the government, and it seems likely
that he will continue this policy
because it has prevented any sig-
nificant threats to his rule.
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STUDENT AND LABOR AGITATION CONTINUE IN URUGUAY
Student demonstrations and
strikes accompanied by violence
occurred throughout the week.
A youth shot by police on Monday
died on 14 August, and the Com-
munist Party is helping to or-
ganize new antigovernment dem-
onstrations to mourn the "student
martyr." The security forces
are efficient, but they are tired
after long hours of duty and will
be hard pressed to control wide-
spread disorders.
The current wave of trouble
began shortly after the govern-
ment raided the national univer-
sity on 9 August. For several
months President Pacheco had
been waiting for the opportunity
to clamp down on student agita-
tion and search the campus for
arms and subversive literature.
The kidnaping of a high govern-
ment official by terrorists gave
him an excuse to enter the uni-
versity on the pretext of search-
ing for clues.
The conservative Communist
Party of Uruguay, meanwhile, has
been gradually shifting toward
a more activist role in order
to halt defections by its youthful
members to more revolutionary
organizations. Party leaders
were finally forced to join the
studentband wagon and to endorse
open participation in violent
demonstrations despite fears
that an activist policy would
invite a government crackdown
and jeopardize the party's prized
legal status. The party still
hopes to exert some measure of
control and prevent violence
from getting out of hand, but
its capabilities are limited.
President Pacheco is tak-
ing a hard line toward the riot-
ers and strikers, but chronic
discontent resulting from poor
economic conditions makes more
disturbances likely. He has
sent a bill to congress limit-
ing the right to strike and
has requested senate approval
to dismiss the university's
leftist rector and his entire
council. If President Pacheco
fails to obtain the kind of
legislation he believes neces-
sary, he might attempt to dis-
solve con ress and rule by
decree.
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Secret
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