WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A007300010001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 38
• Document Creation Date: December 21, 2016
• Document Release Date: September 2, 2008
• Sequence Number: 1
• Publication Date: August 22, 1969
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
50
DIA review
State Dept. review
Navy review
22 August 1969
completed.
completed
completed.
No. 0384/69
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(Information as of noon EDT, 21 August 1969)
Far East
VIETNAM
Throughout much of :1969 Hanoi has been preoccupied
with putting its house in order, in part so that
the long-term struggle in the South can be carried
on. In Saigon, the lack of tangible progress to-
ward forming a new cabinet is aggravating the mood
of uncertainty in that capital. Communist military
activity has generally tapered off following the
rash of attacks on ll and 12 August that introduced
the so-called "autumn campaign."
Europe
DEMONSTRATIONS MARK ANNIVERSARY OF CZECHOSLOVAK INVASION
Despite some demonstrations in Prague, the Husak
leadership has maintained effective control of the
situation.
SOVIETS PREPARE FOR MAJOR MANEUVERS IN MEDITERRANEAN
A Soviet naval force now in the Mediterranean prob-
ably will participate in a major naval exercise
over the next few weeks.
POLITICAL MANEUVERING INCREASES IN THE USSR
A pickup in the pace of political activity probably
reflects the beginning of maneuvering prior to the
next party congress that should be hold by March
1970.
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EUROPEAN SECURITY CONFERENCE PROSPECTS
NATO countries generally are cautious about the
latest Warsaw Pact proposal for a European security
conference, but some of them may be warming to the
idea..
EAST GERMANS REITERATE HARD LINE TOWARD BONN
East German spokesmen are again serving notice both
to their allies and the West that Pankow will not
voluntarily change its hard-line policies toward
Bonn.
Middle East - Africa
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In Lebanon, President Hilu may end his opposition
to fedayeen operations. Meanwhile, if the East Ghor
Canal is not repaired soon, Jordan will suffer ex-
tensive long-range economic losses.
ZAMBIAN GOVERNMENT ASSUMES GREATER ECONOMIC ROLE
President Kaunda now has a freer hand for working
toward development goals, but he has yet to attack
more intractable obstacles to economic progress.
UNREST GROWING IN MALI
Manifestations of unrest growing out of economic
difficulties and from strong personal, regional,
and ideological rivalries have culminated recently
in the arrest of a number of dissident army officers.
Western Hemisphere
CHILEAN CHRISTIAN DEMOCRATS NOMINATE CANDIDATE
The party has agreed on Radomiro Tomic as its can-
didate in the presidential election in 1970, but
the drafting of the campaign program is likely to
produce bitter infighting.
PERUVIAN ECONOMY SHOWS SIGNS OF IMPROVEMENT
A good foreign trade performance thus far this year
and a renegotiation of foreign debt should ease
Peru's foreign payments position and improve in-
vestor confidence.
PROBLEMS BETWEEN EL SALVADOR AND HONDURAS CONTINUE
El Salvador has begun to show an interest in the
restoration of diplomatic and commercial relations,
but the anti-Salvadoran, anti-US mood in Honduras
has not abated.
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The importance attached to recently announced internal programs in
North Vietnam, such as tightening agricultural controls, reinforces earlier
indications that Hanoi has been focusing a major share of its attention this
year on domestic affairs. This is aimed in part, at facilitating the long-term
struggle in the South.
These efforts are consistent with those long advocated by Defense
Minister Giap. He has favored long-term guerrilla war in the South while
preserving and strengthening the position of the Communist Party in the
North. In this connection, Hanoi has been trying to improve military
recruiting and to raise the quality of local military forces, which have
supplied the bulk of the North Vietnamese troops infiltrated into the South.
President Thieu's caution in selecting a new cabinet, meanwhile, has
aggravated the mood of uncertainty in Saigon.
Peking is making little headway in implementing its latest directive
calling for an end to factional violence. Central authorities have been
attempting to end hostilities in some localities by negotiation, and have
offered to appoint a number of factional leaders to local governing bodies.
Much of the disunity in the provinces that has beset the regime since the
ninth party congress last April stems from the factional leaders' dissatis-
faction with the provincial power structure that was confirmed by the
congress.
The South Korean Government is preparing to ram through legislation
to curb opponents of the pending third-term amendment. Government party
strategists intend to hold to their timetable to bring the amendment to a
vote in the National Assembly on 13 September and to submit it to a
national referendum in early October.
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VIETNAM
Recently announced domestic
programs in North Vietnam rein-
force earlier indications that
throughout much of 1969 the re-
gime has been preoccupied with
putting its house in order, in
part so that the long-term strug-
gle in South Vietnam can be car-
ried on..
A series of agricultural
reform measures, the latest of
which was made public in early
August, has been implemented
this year. The reforms are aimed
at restoring the prewar-author-
ity of the collective, cracking
down on individual profiteering,
and arresting the growth of non-
socialist economic practices,
which have been running rampant.
The regime has also stepped
up pressure on local officials
to improve military recruiting
and to raise the quality of lo-
cal military forces. Defense
Minister Giap has spoken on
this problem twice this summer.
Recently available translations
of North Vietnamese press arti-
cles suggest that there has been
a sharp decline in the quality
of local military units, which
provide the reserve for the regu-
lar army.
This problem almost cer-
tainly results from the extremely
heavy troop infiltration to South
Vietnam between late 1967 and
early this year. Part of the
reason for the drastic cutback
in infiltration this spring may
have been to enable local authori-
ties to rebuild their military
units.
Both the decisions on agri-
culture and the emphasis on lo-
cal military organization re-
flect the kind of program recom-
mended in a long report made, by
politburo member Truong Chinh
last summer. The acceptance; of
most of Chinh's recommendations,
probably after much debate, sug-
gests that he has moved into a
powerful position in the North
Vietnamese leadership.
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Similarly, General Giap's
current prominence and his 'espou-
sal of a line complementaryto
Chinh's, strongly suggest that
these two men have stood together
through high-level policy delib-
erations this year. Their views
onhow to proceed seem to have
carried the day. In essence, Giap
and Chinh argue that the war in
the South could be pursued more
effectively through greater re-
liance on the kind of long-',term
guerrilla warfare they both:, have
favored for years, and that the
party must pay more attention to
preserving and strengthening its
position in North Vietnam.
South Vietnam Political.
Developments
The lack of tangible prog-
ress toward forming a new South
Vietnamese cabinet one month after
the pending government reorganiza-
tion was first announced is ag-
gravating the mood of uncertainty
in Saigon. President Thieu',by
proceeding with his typical
caution in consulting candidates
for various cabinet posts, has
provided grist for rumors of
serious political friction within
his government and laid himself
open to new charges of indecisive-
ness.
Thieu still has made no of-
ficial statement on whether or
not he is keeping Tran Van Huong
in the prime ministership. Al-
though the two were officially
reported in agreement after their
13 August talks on broadening the
cabinet base, no statement was
issued after a lengthy meeting
they held on 19 August, in which
Deputy Prime Minister Khiem and,
briefly, Vice President Ky also
participated. The silence could
indicate that differences over
the reorganization are again plac-
ing Huong's retention in doubt.
Leaders of the President's
own National Social Democratic
Front continue to call for Huong's
ouster. On 15 August, after a
presidential communique had hinted
that fluong might remain in office,
the front issued a statement re-
iterating its demand that Huong
be replaced. It also denied re-
ports that front members had
agreed to participate in a cabi-
net headed by Huong. Thieu has
subsequently met with leaders of
the front, but the outcome is not
yet clear.
Leaders of Thieu's front may
be further antagonized by the
President's decision not to give
them a direct role in the leader-
ship of the progovernment legis-
lative organization now being
formed. in the National Assembly.
According to presidential legis-
lative assistant Nguyen Cao
Thang, the organization will con-
sist of a loose union of exist-
ing legislative blocs designed
to coalesce eventually into a
single, unified bloc.
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The leader of the progovern-
ment union apparently will be
Senator Dang Van Sung, head of
the previously independent Upper
House Social Democratic Bloc.
Sung, who reportedly hopes to
neutralize pressure for Prime
Minister Huong's ouster, had ex-
pressed optimism that a majority
of the legislators in each house
of the Assembly would line up be-
hind the government. It remains
questionable however, whether a
majority can be mustered, especi-
ally in the Lower House where
the prime minister has been bit-
terly attacked in recent weeks.
Military Developments in
South Vietnam
Enemy military activity has
generally tapered off following
the rash of attacks on 11 and
12 August that introduced the Com-
munists' so-called "autumn cam-
paign.
____] Northern III Corps, Southern
I Corps and the Demilitarized Zone
area appear to be the most likely
areas for intensified action.
The most significant fight-
ing last weekend occurred in the
provinces north of Saigon as the
enemy probed allied field posi-
tions and base camps in Tay Ninh
and Binh Long provinces.
Heavy fighting developed in
southern I Corps early this week
between US forces and elements
of the North Vietnamese 2nd Di-
vision. Nearly 200 enemy troops
were killed in a series of bat-
tles west of Tam Ky. Elements of
the 2nd Division probably were
also involved in an ambush of US
ties.
soldiers in southern Quang Ngai
Province. In mid-week, South
Vietnamese forces successfully
engaged North Vietnamese units
near Con Thien. Enemy losses
were heavy, but the allies sus-
tained relatively light casual-
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The anniversary of the Soviet invasion of Czechoslovakia is the high-
light of events in Europe this week. In Prague, a zealous security apparatus
has mercilessly dispersed the milling crowds that have gathered to show their
disgust over the event. Waterhoses, truncheons,. and tear gas have been used
freely despite the largely passive nature of the demonstrations. Party leader
Husak is not out of the woods yet, and, in view of the suppressive tactics
used by the police, more violent reactions from the crowds are possible.
Moscow seems to be eager to avoid unnecessary trouble in Czecho-
slovakia. Soviet occupation troops have remained out of urban areas to avoid
provocation, and Moscow's press coverage of the situation has been in low
key. Czechoslovakia"s other "allied" neighbors have also been circumspect in
their coverage, but the: anniversary obviously is making them all nervous.
Yugoslavia and Romania are continuing their policy of frequent high-
level personal contacts. Romanian Foreign Minister Manescu visited Belgrade
for wide-ranging talks) with his counterpart, and Premier Ribicic is leading
the Yugoslav delegation to the Romanian National Day celebration on 23
August. According to rumors, Tito will visit Bucharest next month.
Modest changes at the ministerial level of the Romanian Government
this week brought 1:o the fore more known supporters of party and state
chief Ceausescu. These moves reflected shifts in the party apparatus and
criticism voiced at the 10th party congress, which concluded on 12 August.
Soviet propaganda on last week's border clash with the Chinese is still
below the emotional level reached following the Ussuri clashes in March. The
Soviets, however, are voicing their determination to deal vigorously with any
future "provocations." This theme was also stressed in a private document
sent to the Australian Communist Party on 13 August.
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DEMONSTRATIONS MARK ANNIVERSARY OF CZECHOSLOVAK INVASION
The Husak leadership has
maintained effective domestic
control during the first anni-
versary of the Soviet invasion.
The Czechoslovak population has
appeared more curious and pas-
sive than incensed, and those
demonstrations that did develop
were dispersed by the ubiquitous
security forces.
Large, unorganized and ini-
tially passive crowds gathered
in Prague's Wenceslaus Square
on 19 August. Security units
dispersed them without violence,
but the police encountered some
resistance the next day, the eve
of the anniversary, with the re-
sult that two were killed and
320 arrested. Thousands of in-
dividuals filtered into the square
on 21 August, but initial re-
ports indicated that there had
been no significant outbreak of
violence. Most Czechoslovaks
apparently decided to mark the
occasion peaceably rather than
resort to civil unrest.
The Husak regime still is
not out of the woods, however,
and there could be more demon-
strations this weekend when the
students and workers are idle.
The police thus far have been
overzealous in breaking up the
crowds, and a gross miscalcula-
tion by the authorities--such as
brutal police suppression of non-
violent demonstrators--might
Page 8
spark a major incident that could
cause a chain reaction throughout
the country.
Despite the inevitability of
some demonstrations during the
anniversary, there is no evidence
that additional Soviet troops
were moved into Czechoslovakia
or that rumored Warsaw Pact ex-
ercises within the CSSR are un-
der way. Some Soviet troops may
have moved closer to the cities
to handle any disturbances that
Czechoslovak security forces
could not contain. Moreover,
Western attaches in Hungary re-
ported sighting 60 Soviet tanks
near the Czechoslovak-Hungarian
border on 18 August, probably
as part of preparations for con-
tingencies in Czechoslovakia.
Moscow is as anxious as
Prague that the week pass with
a minimum of unrest. On 21 Au-
gust the Soviet press agency sum-
marized the Czechoslovak Govern-
ment's claim that the two fatalities
on the previous day were caused
by "hooligans." This was the
first reference to the demonstra-
tions in the Soviet press, which
gave no indication of their ex-
tent.
The Soviets are well aware
of the international repercussions
of a repetition of last August,
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and this probably accounts to a
large extent for their playing
down the situation in Czechoslo-
vakia. Moscow's failure to en-
dorse Husak's leadership, on the
other hand, suggests that the Rus-
sians do not intend to ease the
pressure on him. Soviet media
have made it clear that Moscow
believes the struggle against
"antisocialist" element's in Czech-
oslovakia is only beginning.
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Sov
ETS PREPARE FOR MAJOR MANEUVERS IN MEDITERRANEAN
A Soviet naval force of
some 53 ships that has gathered
in the Mediterranean probably
will participate in a major naval
exercise in the eastern Mediter-
ranean over the next few weeks.
Among the warships are the
helicopter cruiser Moskva, which
is making its third Mediterranean
deployment; seven amphibious
ships; and eight diesel subma-
rines. The Moskva and the anti-
submarine warfare (ASW) escorts
operating with it are conducting
ASW training with some of the
eight submarines south of Crete.
Soviet ASW patrol aircraft based
in Egypt are supporting this ac-
tivity.
The amphibious ships that
recently entered the Mediter-
ranean are concentrated east of
Cyprus. These ships may join
three landing ships now in Port
Said and Egyptian units in an
amphibious landing on the Egyp-
tian coast west of Alexandria.
The commander of the Soviet Black
Sea Fleet, who is aboard one of
the missile cruisers, probably
MEDITERRANEAN SEA: Soviets Prepare For Major Naval Exercise
Soviet Warships in Mediterranean
as of 20 August 1969
8 Diesel submarines
26 Surface combatants
19 Support ships
Kresta class guided missile cruiser
Kashin class guided missile frigate
Alligator-class tank lending ship
Merchant orier
* Commander Black Sea F lest
aboard Sverdlov cruiser
Moskva helicopter cruiser
5 Missile destroyers
The locations of ships not involved in the exercise are not shown
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will observe the ASW and amphib-
ious training.
A group of four ships that
left the Black Sea a week ago
and passed through the Mediter-
ranean into the Atlantic on 19
August probably is headed; for the
Indian Ocean. Among this group
are a Kresta-class guided missile
cruiser and an Alligator-class
landing ship; these would be the
first of their class to operate
in the Indian Ocean. Other ships
that may be headed for the In-
dian Ocean are. an F-class diesel
submarine in the Pacific and a
submarine tender from the Baltic
Fleet.
POLITICAL MANEUVERING INCREASES IN THE USSR
The political pace in the
USSR has picked up in the last
few months with the demotion or
criticism of several high pro-
vincial party leaders. Although
this activity probably reflects
the start of maneuvering as the
next party congress approaches,
concern with critical areas
along the troubled Sino-Soviet
border may also be involved in
some instances.
No date has yet been. set
for the 24th Party Congress.
Party statutes call for the hold-
ing of a congress not less than
,every four years, however, and
the last one convened in March
1966. Election at the next con
gress to the politburo, secre-
tariat, and central committee
carries with it some assurance
`of a four-year term in office.
Therefore, the months preceding
it will be a crucial period for
political factions hoping to
change the balance of power
within the top leadership. There
has been remarkably little turn-
over at the central committee
level under the present leader-
ship,,. and some shake-up of this
echelon may well be in the making.
In the past few months, four
regional party chiefs on the cen-
tral committee have been demoted
to posts that will not entitle
them to be re-elected at the next
congress. The demotion of the
party boss of Primorye Kray in
the Soviet Far East was clearly
aimed at strengthening the party
leadership in a.critical section
of the Sino-Soviet border. The
most important shift in terms of.
its potential repercussions in
party affairs was the demotion
of the Azerbaydzhan Republic
party chief on 14 July. The
elevation of the republic's KGB
chief to replace him was an un-
precedented move reflecting a
vote of no confidence for the
republic leadership move and an
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implicit admission of a serious
breakdown in the traditional sys-
tem of party control.
The republic's new first
secretary, Geydar Aliyev, in a
highly critical maiden speech
on 5 August, held that such a
breakdown in party leadership
was at the root of the republic's
many problems. He charged that
because of widespread nepotism
and discrimination against non-
native cadres (read Russian),
"hostile violations of party and
state discipline" were tolerated
that threatened to bring the econ-
omy of the republic to a stand-
still. Suspicions have probably
been aroused in Moscow that a
similar situation may have de-
veloped in other non-Russian re-
publics during the post-Khru-
shchev period of relatively lax
central party control.
Also in mid-July three
powerful regional party chiefs--
all candidate members of the
politburo--were forced publicly
to respond to charges of short-
comings in their bailiwicks.
This criticism seemed to be
prompted by opponents who were
probing for political vulner-
abilities. Kunayev, one of the
targets, is party boss of Kazakh-
stan, the scene of the most re-
cent border clash with the Chi-
nese. Kunayev appears to be -a
Brezhnev protegg, and any change
in his standing will be a sig-
nificant gauge of Brezhnev's po-
litical strength. The other two,
Rashidov of Uzbekistan and
Mzhavanadze of Georgia, have
less identifiable connections
in Moscow, although Mzhavanadze's
orthodox views suggest that he
is at least in spirit an ally of
the General Secretary.
At the moment, Mzhavanadze
seems to be in the most serious
trouble, facing the perennial
charge of local corruption. An
article in Pravda on 2 August by
the second secretary of the
Georgian party, Rodionov, fol-
lowed Mzhavanadze's admission
of responsibility, and seemed
to carry the campaign one step
further. Rodionov, the Russian
watchdog in the Georgian party,
appeared to imply in his article
on collective leadership that his
boss did not welcome criticism
and attempted to suppress the
charges.
Elite party readers of
Pravda will almost certainly
weRodionov's remarks on the
limits to the authority of a
party first secretary against
Brezhnev's own performance.
Those who lean to a critical
view of Brezhnev's exercise of
collegialit will find nourish-
ing fare.
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EUROPEAN SECURITY CONFERENCE PROSPECTS
The NATO allies generally
are maintaining a reserved posi-
tion with respect to the Budapest
Appeal of last spring for a,Euro-
pean security conference, but
there are signs that some members
may be warming to the idea..
All of the NATO countries
are professing the need for,cau-
tion in accepting this proposal--
issued on 17 March 1969--for a
meeting of all European states.
Many view the appeal as an. ill-
concealed Soviet bid to refurbish
its image in the wake of the in-
vasion of Czechoslovakia last Au-
gust. Few, if any, believe' that
significant results would come
from such a conference.
For these reasons the allies
decided last April--at the NATO
ministerial meetings held in Wash-
ington-'-to withhold their response
to the appeal, pending an examina-
tion in the North Atlantic Council
of the prospects for fruitful ne-
gotiations between East and West.
Most of the member governments
still believe there is little
likelihood that a productive con-
ference is possible in the fore-
seeable future.
The Germans, for example,
see no sign that the Communists
intend to modify their hard line
on the status of Berlin or on Ger-
man reunification. Similarly,
the Dutch contend that the motive
of the Warsaw Pact nations in
calling for the conference is to
get an agreement solidifying the
status quo in Europe.
Page 13
In the past few weeks, how-
ever, a willingness to take a more
positive view of the Warsaw Pact
proposal has emerged in some NATO
capitals. This shift is in part
the result of a number of recent
events that some members believe
could improve the climate for mean-
ingful discussions between the East
and West.
Among these are the German
proposals to the Soviets early last
month for mutual declarations on
the renunciation of force; Gromyko's
speech of 10 July suggesting Four
Power talks on Berlin; the Finnish
Government's offer of Helsinki as
the conference site; the President's
recent visit to Romania; and the
favorable prospects for strategic
arms limitation talks between the
US and the Soviet Union.
Those who are urging serious
consideration of the Budapest ap-
peal point out that its language
is more acceptable than that of
the previous proposals for such a
conference issued by the Warsaw Pact
in 196E and 1967. Moreover, these
capitals believe that the present
tensiorLs in Sino-Soviet relations
may induce Moscow to exhibit greater
flexibility with respect to Euro-
pean questions.
Among the allies, France has
perhaps, been the most active in
exploring the possibilities for
the conference. The French report
that they have contacted all the
Warsaw Pact countries on this ques-
tion and intend to pursue the mat-
ter further on a bilateral basis.
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France has suggested that
negotiations could begin on eco-
nomic and technical subjects and
proceed to more important politi-
cal and military problems if the
situation warranted. There are
indications that widespread pub-
lic support for such a conference
might develo in several NATO
countries.
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EAST GERMANS REITERATE HARD LINE TOWARD BONN
East German spokesmen are
again serving notice both to their
allies and the West that Pankow
will not voluntarily change its
hard-line policies toward Bonn.
In a contrived interview on
13 August, Foreign Minister Winzer
reflected his regime's negative
attitude toward a recent allied
proposal that Moscow use its in-
fluence to get Pankow to meet with
the West Germans to discuss in-
tra-German transportation, postal,
and communications issues. Winzer
ambiguously noted that the East
Germans are "aware of through
whom" Bonn is attempting to pene-
trate East Germany via "technical
and organizational questions."
He added that the East Germans
will not open their borders to
"old or new Nazis." These re-
marks were probably directed more
to Moscow than to the West.
Taking up the question of
East - West German talks, Winzer
emphasized the standard East Ger-
man position that negotiations
between the two Germanies would
be possible if Bonn accepted a
draft treaty proposed by Pankow
in 1967 as a basis for negotia-
tions. He also stated that any
agreements reached must be sanc-
tioned by international law--that
is, Bonn must recognize East Ger-
many as a sovereign state.
Winzer also scored Bonn for
allegedly attempting to prevent
or delay a European security con
ference, urged the speedy conven
ing of such a conference, and em-
phasized that all states must par-
ticipate as equals. In discussing
the background of the latest pro-
posal for a conference--the appeal
issued last March at the Warsaw
Pact summit meeting in Budapest--
Winzer distorted some of its
language and ignored certain as-
pects of the appeal that the East
Germans regard with distaste..
Winzer's remarks, statements
by other East German officials,
and recent newspaper articles
all suggest that Pankow antici-
pates or is already under pressure
from its allies, particularly
Moscow, to be more accommodating
on East - West German issues. As
in the past, the East Germans may-
fear that the USSR and their other
allies will not fully support Pan-
kow's position in dealing with the
West. Winzer may have intended to
remind Moscow of its commitments
to the East Germans when he cited
a portion of the joint Soviet -
East German statement issued in
July that the two sides would re-
buff any attempts against their
"independence and sovereignty"
and the inviolability of their
borders.
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There was heavy fighting this week in the Suez Canal area. Following
Egyptian artillery 'shelling early in the week, Israel struck Egyptian positions
twice with jets. Fighting along the Jordanian front was at a fairly low level,
and there were no'major incidents along the Lebanese and Syrian fronts.
A fire in East Jerusalem early Thursday morning damaged the interior
of the al-Aqsa mosque, an ancient and revered Muslim shrine. The cause of
the fire is unknown at this time, but the incident could have important
repercussions throughout the Arab and Islamic world. Cairo Radio has
already accused Israel of starting the fire.
In India, Prime Minister Gandhi won a clear victory over old-guard
Congress Party bosses with the election of V. V. Giri as president. Tension
was high in the ruling party on the eve of the vote count, but Mrs. Gandhi
and her antagonists may try to avoid another test of strength in the
immediate future. At any rate, political activity will probably taper off
temporarily with the end of the current session of parliament on 30 August.
In a surprise move this week, Pakistani President Yahya Khan ap-
pointed Air Marshal Nur Khan and Vice Admiral S. M. Ahsan governors of
West and East Pakistan, respectively. The two men are expected to relinquish
their military commands soon and to assume their new positions early in
September. Ahsan said he has a broad presidential mandate to return the
provincial government to civilian rule rapidly, and he hopes to persuade Nur
Khan to follow suit.
In Ghana, the constituent assembly was called back into session this
week to reconsider the military police junta's proposal that the new civilian
regime be headed by a corporate presidency composed of three junta
members. Acceptance of the proposal appears to be the junta's price for
ensuring the return to civilian rule this fall.
Tanzanian President Julius Nyerere has apparently dropped plans to
address the UN General Assembly this fall, ruling out a stopover in Washing-
ton. Nyerere's visit to Canada, the USSR, and several West European coun-
tries in late September and early October is still scheduled
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nese complaint against Israel, that
it would not accept responsibility
for the actions of Palestinians res-
ident in its territory. The raid
on Mount Hermon on 11 August has
made it difficult for the Christians,
who so far have provided the polit-
ical support for Hilu's go-slow po-
sition, to continue opposing Muslim
demands for greater hostility against
Israel without appearing to be pro-
Israeli.
If this trend in the government
and among the people continues, it
will be almost impossible for Hilu
to maintain opposition to fedayeen
terrorist activities, and Lebanon
will become increasingly involved
in Israeli-Arab incidents.
ARAB STATES - ISRAEL ROUNDUP
After more than four months of
administration by a caretaker cabi-
net, Lebanon's lingering political
crisis may be ended by President
Hilu. Hilu is apparently moving
closer to accepting the fedayeen's
demand that they be allowed to op-
erate on Lebanese territory without
government restrictions.
Lebanon told the UN Security
Council, during debate on the Leba-
Jordan's East Ghor Canal, dam-
aged by an Israeli air strike on 10
August, remains unrepaired. The
canal provides vital water for land
along the east bank of the Jordan
River. This area in the past pro-
vided about 40 percent of Jordan's
total east bank agricultural pro-
duction. Although some water con-
tinues to flow, it is not sufficient
for all crops.
If the canal is not repaired
within two weeks, there will be a
great long-term investment loss of
banana trees and some loss of citrus
trees as well. In addition, if the
damage is not repaired by late fall,
further losses will be incurred be- 25X1
cause of the lack of water to irri-
gate vegetable seedlings, which must
be planted in the fall.
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ZAMBIAN GOVERNMENT ASSUMES GREATER ECONOMIC ROLE
President Kaunda's economic re-
form package announced last week is
a logical second step in a year-and-
a-half program to assume government
direction of all major economic de-
velopment. Kaunda probably can keep
economic disruption to politically
tolerable limits, but he has not
taken adequate steps to overcome
more intractable obstacles to long-
range development.
Kaunda has three principal de-
velopment goals: rapid Zambianiza-
tion of the labor force now domi-
nated by white expatriates and
Asians; development of heavy indus-
try; and self-sufficiency in food
crops and higher rural living stand-
ards. Zambia's progress to date has
not satisfied the President, who has
resorted to a variety of measures,
most dramatically the reform pro-
gram, to speed implementation.
Kaunda's first package an-
nounced in April 1968 called for a
government controlling interest in
most major foreign firms. He ex-
empted the two giants of Zambia's
vital copper industry, but ordered
them not to send out of the country
more than half their net profits.
He also imposed license restrictions
designed to force the Asian commun-
ity from its dominance in retail
trade and rural small business.
After a year-long shakedown
period in which the government
sought to minimize economic disrup-
tion, Kaunda was ready for the sec-
ond round. A referendum in June,
which eliminated constitutional ob-
stacles to basic change, set the
stage for last week's announcement.
The President "requested" the cop-
per companies to sell controlling
interest to the government, and
announced that company mining
rights held in perpetuity would
be replaced by 25-year leases.
He did, however, eliminate the 50-
percent profit restriction. Kaunda
also announced the "establishment,"
under government aegis, of several
heavy industrial projects. Most
of these projects, however, such
as an iron and steel complex, have
not been fully studied, and some
may be quietly shelved.
Zambia's economy has been dom-
inated by private foreign interests,
which have been the major target of
reform. Kaunda has come to believe
private enterprise is excessively
geared to profits and insufficiently
attuned to national development.
More stubborn obstacles to de-
velopment, however, are a lack of
skilled manpower, inflation, and
undisciplined labor; Kaunda's at-
tempts to deal with the latter two
in his latest reform package prob-
ably are inadequate. Rapid Zambian-
ization and increasing government
control over the economy have already
discouraged recruitment of skilled
personnel from abroad. Rising de-
velopment expenditures will probably
defeat anti-inflationary wage and
price freezes and new taxes. His
ban on strikes and references to
new roles for a government-guided
trade union movement, moreover, do
not get at the crux of labor prob-
lems--wildcat lems--wildcat strikes and lack of
discipline.
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UNREST GROWING IN MALI
Problems are mounting :for
the military junta that overthrew
radical President Modibo Keita
last year. Signs of growing un-
rest stemming from the country's
serious economic difficulties
and from strong personal, regional,
and ideological rivalries were
capped by the arrest last week
of a number of dissident army of-
ficers.
cerned with advancing personal
and regional interests. More-
over, friction developed early
between the junta's two key
members, President Traore and
Captain Diakite, the provisional
government head. Their dif-
ferences include a serious split
over policy, with Diakite re-
portedly favoring a more rapid
and complete break with socialism.
During the nine months that
the Military Committee of National
Liberation has been in power,
Mali's economic situation has
continued to deteriorate. Al-
though increased aid from France
earlier this year gave the 'new
regime a respite from its most
pressing budgetary problems', the
country has remained in the! eco-
nomic doldrums, saddled with
large foreign debts and ineffi-
cient state enterprises.
Although the regime has made
some moves in the direction, of a
freer economy, so far it has not
dismantled Keita's socialist
structure to the extent promised
by its initial policy statements.
The junta's failure to move' more
rapidly, notably against the more
marginal state enterprises, has
stemmed in part from resistance
from entrenched bureaucrats with
a vested interest in Keita's pol-
icies.
Weaknesses within the junta
itself have also contributed. to
the regime's immobility.. The
politically inexperienced young
officers in the military commit-
tee have tended to be mainly con-
Faced with rising domestic
pressures, the regime convened
some 1,400 functionaries in
Bamako last month to provide an
outlet for the expression of
grievances. Although the con-
ference was held behind closed
doors, it obviously developed
into a free-swinging debate in
which sharp ideological differ-
ences and much criticism of the
military regime were aired.
Traore ended the conference
with a promise not to tie Mali
to any "political option," but
rather to restore economic order
through a mixture of private,
state, and joint enterprises.
Sc far the government has
kept publicly silent about the
arrest of the officers; both the
numbers involved and their moti-
vation are unclear. There is
reason to suspect that at least
some of those detained were sup-
porters of Keita, although it may
well be that any plotting they
engaged in sprang more from
frustrated personal ambitions
or regional jealousies than from
ideological considerations. 25X1
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Guyana's occupation of a Surinam airstrip located in an area that is in
dispute between the two countries was the most dramatic event in Latin
America this week.
Guyana's Prime Minister Burnharn claims that domestic pressure to
protect his country's territorial integrity and sovereignty from Venezuela
and Surinam forced him to seize the airstrip. Guyana's dispute with Surinam
has encouraged Venezuelan "hawks" to press their country's claim to a large
part of western Guyana. On 20 August the Venezuelan foreign minister
charged Guyana with "provocations and war-like actions" in boosting its
defense forces in the area and warned that Venezuela may abandon its
"peaceful attitude."
Bolivian politics began to heat up again this week with a report that
armed forces commander in chief General Ovando will resign in the near
future to run in the presidential election next May. The armed forces
reportedly are willing to let Ovando take the presidency constitutionally
rather than oust President Siles by force.
Nine Haitian priests, accused of collaborating with the Communists,
have been expelled by President Duvalier. Most of the priests are known to
have had contacts with extreme leftist ;groups. There has been no reaction
from church leaders so far.
A strike has paralyzed dock and rail activities at two Costa Rican ports.
The government is deeply concerned over the potential economic loss and
possible violence if a settlement is not reached soon. The ports have been
plagued by labor problems during the past year as unions, some Communist-
led, have become bolder. Civil guard and treasury police are on alert and the
government may intervene.
A conference on fishing problems attended by Chile, Ecuador, Peru,
and the United States adjourned last week and will reopen before the end of
the year. Little, progress was made on the problems of US fishing rights
within the 200-mile limit claimed by the Latin American countries, although
methods of regulation and US tariffs on fish imports were the topics of
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b UKL [
CHILEAN CHRISTIAN DEMOCRATS NOMINATE
The national committee of
the Christian Democratic Party
(PDC) last weekend nominated Ra-
domiro Tomic, former ambassador
to the US, as the party's candi-
date for the presidential elec-
tion to be held in September
1970. Although his nomination
had been expected, decisions on
the party platform apparently re-
mained unresolved until the last
minute. A compromise finally was
arranged between the Tomic forces
and supporters of President Ed-
uardo Frei, who want to make sure
Frei's administration is not re-
pudiated by the PDC candidate.
Tomic in general favors
faster action on economic nation-
alization and social reform. He
also advocates electoral cooper-
ation with the Communists and So-
cialists, but these parties have
rebuffed his overtures.
Tomic's speech after his
nomination was relatively mild.
He seemed to accept President
Frei's policy on copper by indi-
cating that if the PDC wins next
year it will "continue" the proc-
ess of recovering basic resources
by completing the nationalization
of all copper production "if the
national interest so requires."
Earlier he had criticized the re-
cent nationalization agreement
with a large US copper company
as being "too slow." Tomic also
said that the party's program for
the campaign would be decided
only after consultation with the
membership.
The national committee meet-
ing was the shortest in recent his-
CANDIDATE
tory and produced few of the ex-
pected fireworks. The new party
council is a compromise between
Tomic and Frei forces. A Tomic
man is now party president and the
former president, a Frei backer,
is first vice president. There
have been some charges that this
shift was a prearranged "deal,"
and the leftist parties are por-
traying the result as a Frei vic-
tory and a step toward "contin-
uism."
Basic differences within the
party remain, both as to the di-
rection the government should take
and the speed with which it should
move. The fight over the party
platform promises to be bitter.
As party candidate, however, Tomic
will have an advantage over the 25X1
Frei group. Party workers will be
eager to be on his side in the,
event of his election.
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PERUVIAN ECONOMY SHOWS
The Peruvian economy is dis-
playing evidence of growingfi-
nancial strength. This ha.slbeen
underscored by increased interest
from foreign investors and. 'a good
foreign trade performance. More
aid from the international. Mone-
tary Fund (IMF) and some debt re-
lief from creditors will further
ease the foreign payments posi-
tion.
The IMF appears ready to per-
mit Peru to draw the remaining
$35 million of its $75 million
standby loan agreement signed in
1968, and to participate a.sla
neutral broker in reschedul-
ing Peru's foreign debt service
payments for the 1970-75 period.
Peru's European, Japanese, and
US creditors have been invited
to a rescheduling conference in
Lima in October, which, if suc-
cessful, could reduce Peru's
payment's requirements during
the next five years by some'' $200-
300 million.
Prices for Peru's major ex-
ports have continued at reword
highs. During the first six
months of 1969 exports exceeded
imports by a record $142 million,
adding some $35 million to its
reserves. Moreover, the regime's
anti-inflation policy enjoys con-
tinued success--prices in the
Lima-Callao area increased only
4.3 percent during the past 12
months.
Efforts to accommodate for-
eign investors may also stimulate
an upswing in investment. In
SIGNS OF IMPROVEMENT
early August, the government, in
conjunction with the IMF, removed
the remaining bottlenecks on
profit remittances and established
a schedule for future remittances.
At the same time the regime fur-
ther signaled its eagerness to
do business with foreign invest-
ors
These actions appear to
have whetted the interest of for-
eign investors.
The Japanese are displaying
increased interest in Peru; a
group of Nippon Mining Company
technicians arrived in Lima in
early August to study the pos-
sibilities of mineral exploita-
tion in the Are ui a re ion of
southern Peru.
Moreover, the major US com-
panies that have dominated Peru-
vian m_ning soon may announce
some new projects. The major
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justification for holding back
on such investments has been
Peru's restrictions on profit
remittances.
If improved business
confi-
dence leads to a sustained
rise
in investment, Peru's rate
of
economic growth could show
a
significant upturn in late
1969
or early 1970. This growing
confidence could be disrupted
if the government were to an-
nounce further economic measures
of a drastic or revolutionary
nature. President Velasco, how-
ever, has indicated that he does
not intend to introduce any new
reforms soon, but rather to con-
centrate on implementing those
such as agrarian reform already
in effect.
PROBLEMS BETWEEN EL SALVADOR AND HONDURAS CONTINUE
El Salvador has begun to
show an interest in the restora-
tion of diplomatic and commercial
relations, but the anti-Salva-
doran, anti-US mood in Hondura-s
has not abated.
The Salvadoran Government
has been allowing matters to re-
turn to normal, and President
Sanchez is taking a more concili-
atory line toward Honduras. The
30-day state of siege has expired,
the majority of reservists called
to duty during the crisis have
been demobilized, and gasoline
rationing has ended.. In addition,
boasting about the victory over
Honduras is giving way to stress
on the need for normalizing rela-
tions. The government has re-
leased over 200 civilian prisoners
of war, and Sanchez has agreed to
a mutual withdrawal of troops
from one particularly troubled
section of the border. He has
also indicated that he favors a
pullback in other areas where
opposing troops are in close con-
frontation.
Honduras, -however, continues
apprehensive about another Sal-
vadoran attack and concerned over
the shortage of arms and ammuni-
tion. The US continues to be
criticized for its failure to aid
Honduras, and rumors of US arms
sales to El Salvador have con-
tributed to the rising anti-US
sentiment. The most vocal expres-
sion of this sentiment occurred on
19 August when over 2,000 students
carrying anti-OAS and anti-US
signs marched on the US Embassy,
where they caused some minor dam-
age.
Honduran news media have
also given wide coverage to al-
leged atrocities and destruction
by Salvadoran troops during the
occupation. The trade unions have
continued their efforts to secure
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dismissal of all Salvadoran em-
ployees, and the campaign to expel
all undocumented Salvadorans is
still under way. The Honduran
Government has done little to en-
courage a more conciliatory atti-
tude toward Salvadoran residents
and appears unwilling to swim
against the tide of public opin-
ion. The President and themin-
ister of economy have rejected OAS
calls for restoration of consular
relations and easing of trade re-
strictions
This attitude is not passing
unnoticed in El Salvador. Con-
tinued reports of mistreatment
of Salvadorans are likely to force
the government back to a hard-
line policy. Indeed, the Salva-
doran chief of staff has already
stated that, if Honduran provoca-
tion continues, "we will be
forced to attack Honduras and re-
solve the problem directly."
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