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November 27, 1970
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Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY iq ARAN{!ES i ktW* CEltiEq- t~,iirtCisAiElY A1TEf USE JOB State Dept. review completed Secret 114 27 November 1970 No. 0398/70 q-7-z V,5-V3 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 SECRET (Information as of noon EST, 25 November 1970) Page Vietnam: New Strikes in the North . . . . . . . . . . . . . . . . 1 Cambodia: Keeping the Heat On . . . . . . . . . . . . . . . . . 3 Thailand: Insurgent Prospects Improve . . . . . . . . . . . . . 4 Laos: The Southern Campaign Begins . . . . . . . . . . . . . . . 4 Sino-Soviet Relations: Restoring Appearances . . . . . . . . . . . 6 Communist China: A Step Closer to the UN . . . . . . . . . . . . 6 USSR-Japan: Tokyo Hits a Sore Spot . . . . . . . . . . . . . . . 7 North Korea: The Economy Is Making Mixed Progress . . . . . . . . 8 Bavarian Election Helps Bonn and Strauss . . . . . . . . . . . . . 9 Hungary: Brezhnev Endorses Moderate Reform Program . . . . . . 10 Bulgaria-Romania: New Friendship Treaty . . . . . . . . . . . . 10 Italy: Coalition Government Under Strain . . . . . . . . . . . . 12 SECRET Page i WEEKLY SUMMARY 27 Nov 70 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 :~J +~K1{ 1 MIDDLE EAST - AFRICA Israel: Jarring Talks . . . . . . . . . . . . . . . . . . . . . 13 Guinea . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Pakistan: Elections . . . . . . . . . . . . . . . . . . . . . . 17 WESTERN HEMISPHERE Chile: The Government Faces Its First Problems . . . . . . . 18 Latin America Takes a New Look at Cuba . . . . . . . . . . 19 Mexico: New President Foresees Good Relations With the US . NOTES: Yugoslavia: Poland-France; East-West Germany; Ethiopia; South Africa - Malagasy Republic; Syria SECRET Page ii WEEKLY SUMMARY 27 Nov 70 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 S1 GRE'1' FAR EAST Vietnam: New Strikes in the North The Communists reacted to last weekend's air strikes against the North with much tough talk, but they have backed it up so far with only a pro forma gesture of protest in Paris. Hanoi of- ficially denounced the raids as violations of the US pledge to halt all bombing of the North as an "extremely serious act of war." A Foreign Min- istry communique strongly reasserted Hanoi's longstanding position that no "understanding" exists that would allow uncontested US aerial reconnaissance over the North. Although Communist propaganda portrayed the US as having deliberately broken the arrange- ment that led to four-way talks in Paris, Hanoi clearly is not of a mind to break off the talks now. A spokesman for the North Vietnamese delegation hinted at a news conference that Hanoi expects them to go on. The Communist delega- tions boycotted this week's session in Paris, but said they would return to the table on 3 Decem- ber. This follows the pattern set last May when the Communists skipped a meeting after a series of US air strikes in southern North Vietnam. because it wants to condemn the action without acknowledging that US forces moved in and out of North Vietnam with impunity. The Foreign Ministry sent a relatively mild statement to North Vietnamese news agencies abroad cn the 24th, but then quickly withdrew it. The only reaction that had appeared by midweek was an unat- tributed article in the party newspaper. Like Hanoi's initial commentary on the air strikes before the Pentagon announcement, it avoided comment on the rescue effort itself and said only that the US had attacked a POW installation. It reasserted Hanoi's contention that air strikes did occur in the general Hanoi-Haiphong area and that, because of this, Hanoi took an "extremely serious" view of the situation. The Communists apparently hope to step up their military activity within the next week or so. Available evidence still indicates, however, that the enemy is primarily concerned with conserving and rebuilding his weakened forces in South Viet- nam and that the coming "winter" or dry-season campaign there will be limited in magnitude. Last weekend's action in North Vietnam is not likely to have a lasting effect on whatever prospects there are in Paris. Some form of Com- munist military retaliation in South Vietnam could be in prospect however; rocket attacks against a major city or two seem a good bet. In this way, Hanoi might seek to underscore its contention that the US has broken its pledge to stop bombing the North and that Communist forces are not constrained by any kind of un- derstanding. Meanwhile, Hanoi apparently has run into difficulty formulating a response to Washington's announcement about the POW raid, presumably Although the enemy's local forces north of Saigon are now relatively weak and pacification SECRET Page 1 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET has been making better progress there than in most other parts of the country, Hieu thinks the Communists are still better organized than their recent military operations have indicated. He fears that the government's territorial security forces alone are not capable of taking full advan- tage of the enemy's current condition. He believes that regular army units should be used to support the Regional and Popular Forces rather than pursue enemy units in Cambodia where they are not an immediate threat to South Vietnam. Hieu's views of the Communists' problems and intentions in his area of responsibility are generally supported by a wide variety of intel- ligence. In his present command covering Binh Long, Phuoc Long, and Binh Duong provinces he lacks the support American combat troops pro- vided to him in an earlier command, and he must use his forces in pacification and security roles as well as in the Cambodian sweep operations. Hieu's concerns may be somewhat shared by Pres- ident Thieu, who recently imposed limitations on the extent of South Vietnamese operations into Cambodia for fear of overextending his forces. Saigon politicians are giving more of their attention to the 1971 presidential election al- though it is still more than ten months away. "Big" Minh says he will run for president, and other opposition elements already are making campaign plans. President Thieu also is looking ahead to next year, and progovernment poli- ticians have begun to assess his prospects for re-election. Although these maneuverings are still in the preliminary stages, the election probably will be the main focus of attention in Saigon political circles until next fall. It is far too early to project the outcome of the elections. Much of the pessimism over Thieu's prospects apparently stems from soundings in areas where oppositionist sentiment is tradi- tionally strong. Nevertheless, Thieu may need to mend his political fences to solidify his position. He has indicated that he intends to rely more on 25X1 the government bureaucracy for support than on political parties, but outright art o osi`tion would weaken his campaign. SECRET Page 2 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET Cambodia: Keeping the Heat On The Communists continued to keep govern- ment forces at bay in Kompong Cham Province, and initiated several successful attacks on Cam- bodian units and minor industrial installations in the Kirirom area near Route 4. It is not clear whether these actions foreshadow the beginning of a broader offensive campaign. A 16-ship government convoy bound for Kompong Cham city on the Mekong was halted by heavy enemy fire 20 miles southwest of the city. Two ships were heavily damaged; four Cam- bodians were killed and 52 were wounded. On the ground, government reinforcements trying to move east along Route 7 in order to reopen that road between Skoun and Kompong Cham were stopped by Communist troops near Prey Totung. Before the riverine convoy arrived at midweek, government defenders at Kompong Cham had to rely on air drops because enemy harassing fire deterred cargo planes from landing at the city's airfield. In the southwest, coordinated enemy attacks succeeded in driving Cambodian soldiers out of their positions at the Pich Nil pass overlooking Route 4, the Kirirom hydroelectric complex, and the Stung Chral cartridge factory. These attacks marked the first significant Communist activity in the Kirirom area since late July. Six government battalions were scheduled to launch counterat- tacks to retake the lost positions and to reopen the vital highway to Kompong Som. SECRET Page 3 WEEKLY SUMMARY 27 Nov 70 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET Economic negotiations between the Cam- bodians and the South Vietnamese were sus- pended without agreement on several major issues when the Saigon cabinet withheld approval of agreements covering trade relations. The Cam- bodians, for their part, balked over Saigon's re- Thailand: Insurgent Prospects Improve The insurgent movement in northeastThai- land is continuing to rebound from the setbacks suffered during the 1967-68 period. During the past rainy season, the insurgents concentrated on improving their organization and village support network in traditional operating areas rather than significantly expanding their armed strength- which remains around 1,500-or attempting to move into new operational sectors. There is evi- dence, however, that for the first time in the northeast the insurgents have established a secure base, in the Duong Luang area of Nakhon Phanom Province. This region has been the most active insurgent area since the movement in the northeast began in 1965. In addition to supporting the training and indoctrination of insurgents and the filling out of quasimilitary village units, the base has facilitated an increase i, ,,,;~r,gi1support for the insurgency. Laos: The Southern Campaign Begins Communist forces overran several key gov- ernment positions on the Bolovens Plateau in a series of closely coordinated attacks on 22 No- vember. The enemy captured two main irregular Page 4 quest for a $38 million "contribution" from Phnom Penh to help defray costs of South Viet- namese military operations in Cambodia. Al- though South Vietnamese intransigence may be largely a bargaining ploy for the next unscheduled series of talks in Phnom Penh, such apparent bad faith likely did not sit well with some Cambodian leaders who are already hypercritical of their Sai- Despite their improved capabilities, the in- surgents have avoided large-scale or highly visible actions. Increased terrorism and harassment of the government's fledgling village defense forces are designed to gain the initiative witE out prompting a major government counteroffensive. Such tactics are effectively playing on both Bang- kok's belief that the insurgency in the northeast is well in hand and the Thai Army's desire to turn over its counterinsurgency role to police and ci- vilian agencies. With the deteriorating situations in Cam- bodia and Laos providing the pretext, the '2nd Army has since midsummer reduced its counter- insurgency force commitment in the northeast by two thirds, or to less than 1,000 troops. More- 25X1 over, the army now is under orders to engage in suppression operations only in response to emer- gency situations. bases, Sites 26 and 38, northwest of Attopeu as well as four other outposts in the same general area. Two other sites, about 15 and 30 miles north of Attopeu, were also captured. SECRET Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET Government forces were able to reoccupy Site 38 despite heavy shelling, but attempts to retake Site 26 have been repulsed. Continuing air strikes on the bases now in enemy hands may make it diffi- cult for the Communists to maintain their foot- hold on the eastern rim of the Plateau. The Bolovens Plateau, as the dominant ter- rain feature in the area, has been hotly contested for the past several years. Its importance has grown this year, however, because the Commu- nists are intent on protecting their infiltration corridor from the raids and intelligence activities of government guerrillas based on the plateau and Page 5 because the eastern rim of the plateau commands the Se Kong River and Route 16. These are po- tential infiltration routes the North Vietnamese would presumably like to make greater use of during the current dry season. Vientiane is still waiting for definitive word from IPathet Lao leader Souphanouvong on the 25X1 arrangements for peace negotiations that Com- munist: envoy Souk Vongsak and Prime Minister dialogue moving. e I ast d to eep the Pathet Lao re resentative Soth Pethrasy made statements that 25X1 seemed to support government assertions that the procedural roadblocks to the Khang Khay talks have been cleared away. Soth reportedly said that while the Pathet Lao still consider that the chief government negotiator will be representing Sou- vanna as an individual rather than as prime minis- ter, they will, in an effort to get negotiations started, no longer contest the issue: A Pathet Lao broadcast of 22 November adds substance to this report by finessing the question of Souvanna's official status, describing him as "known as the chief of the Vientiane side." In somewhat less explicit fashion, a Pathet Lao broadcast of 21 November indicated that the Communists intend to keep exploring the chances for talks despite the increasingly "aggressive acts" by the US in Laos. The broadcast said these acts "complicate efforts to solve Laotian questions and hinder the holding of a meeting," but in- dicated that explorations with Vientiane were continuing. SECRET Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET Sino-Soviet Relations: Restoring Appearances The arrival of the newly appointed Chinese ambassador, Liu Hsin-chuan, in Moscow this weekend caps recent efforts by both sides to return to a routine, businesslike atmosphere in state relations. Liu's appointment, which has been rumored for months, was only confirmed on 18 November when Peking announced he was present during the first meeting between Chou En-lai and the new Soviet ambassador, V. S. Tolstikov, who arrived in China six weeks ago. Both countries have publicly reaffirmed re- cently their interest in achieving a "normaliza- tion" of relations, but each has also characterized the other's statements as "only words" not fol- lowed by "actual deeds." Peking's message to the Soviet government on the 53rd anniversary of the Bolshevik revolution early this month claimed "differences of principle" should not hinder "ef- fective measures" to settle "important outstand- ing questions in state relations." The Chinese adopted this line prior to the opening of the Peking talks last year and probably repeated it to avoid being branded as "obstructionists" by the Soviets who continued to publicly stress their ""conciliatory" attitude by conspicuously repro- ducing an edited version of the Chinese state- ment. A speech on 6 November by Politburo member Suslov marking the anniversary had a more austere tone, however, reminding Peking that fundamental ideological differences cannot be compromised. Although the improved climate reflects both sides' determination to sustain the diminished tensions along the border, it is unlikely that it presages movement toward resolution of specific differences. The announcement on 22 November that an "agreement on the exchange of goods and payments" had been signed in Peking by the respective vice ministers of foreign trade is symbolic of current Sino-Soviet relations. Al- though the protocol-the first since 1967-%s a tangible indication of the "new atmosphere," omission of the period covered by the accord and Peking's remark that "the two sides will continue to exchange views" lend credence to reports of still unresolved problems. Moreover, both Soviet and Chinese representatives have recently stated that the Peking political talks continue stale- mated, with less frequent meetings reduced' to exchanges of position papers. The border-river navigation talks, which began last July, also continue without any sign of agreement. Communist China: A Step Closer to the UN Last week's General Assembly vote on the in the coming year and to gain momentum as a Chinese representation issue almost certainly result of the UN vote. ended the usefulness of procedures that have kept Peking out of the UN for two decades. The erosion of support for Taipei asthe sole represent- ative of China in the UN during the past six months led to a plurality (51 to 49 with 27 abstentions) for the first time on the "Albanian" resolution to admit Peking at the expense of Taipei. The Nationalists' loss of support, which occurred largely as a result of China's more "rea- sonable" diplomatic posture, is likely to continue More important, however, is the decline of support for the Important Question motion that makes any change in China's representation dependent on a two-thirds majority of the As- sembly. Last week's 66-52 vote was a decrease from last year's 71-48. But even this result was achieved because a number of nations had made an early commitment to vote "yes," and several states have expressed reluctance to vote the same SECRET Page 6 WEEKLY SUMMARY 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 SJ(JKJ 1, way next year, inasmuch as the motion would seem "a device to frustrate the will of the ma- jority." Some states, in fact, have already indi- cated they expect to alter their position. The Chinese Communists can be expected to press strongly in the coming year for the defeat of the "illegal" Important Question resolution. Peking's recent public and private statements in- dicate it is extremely sensitive to the possibility that continued passage of that motion will buy time for the "two China's" or "one China, one Taiwan" formula favored by many states. The Chinese fear that a number of nations supporting the "Albanian" resolution will line up in the future behind such a motion or that the China representation issue may be put in the broader context of "universality of membership." Indeed, the large number of abstentions on the "Al- banian" motion last week is indicative of the dilemma faced by many states that favor Peking's entry, but not Taipei's expulsion. Both Chinese regimes are certain to stress that any such compromise "solution" would not be viable, because each would refuse to hold a seat if the other were also represented. However, even in the unlikely event that such a motion carried in the Assembly next year, the National- ists might well immediately withdraw from the work' body-thus permitting Peking to enter on its own terms. I n a broader sense, last week's vote was a sharp blow to Taipei's prestige. Peking will un- doubtedly attempt to exploit its advantage to the hilt, further undermining the Nationalists' diplomatic position both in the UN and the world community. One obvious line of attack, facili- tated by the UN vote, would be to encourage furthE!r diplomatic recognitions of the Peking regime; Austria, Belgium, Luxembourg, Chile, and several African states are waiting in the USSR-Japan: Tokyo Hits a Sore Spot Tokyo's campaign for the return of the southern Kurile Islands-taken by the USSR fol- lowing the defeat of Japan in World War II-has drawn a testy Soviet response. In a move clearly designed to indicate Soviet displeasure over Tokyo's public agitation for the reversion of the disputed territory, Moscow informed the Japanese on 19 November of the indefinite post- ponement of talks slated to begin this week on ensuring the safety of Japanese fishing in the vicinity of the Kuriles. Moscow's action came about a month after Prime Minister Sato injected the "northern ter- ritories" issue into his UN General Assembly speech. Sato's remarks, which particularly irked Moscow, capped a two-pronged Japanese cam- paign of low-key diplomatic approaches to the USSR and a noisy propaganda offensive in Japan itself. Moscow delivered a stiff oral protest against the campaign on 11 November Moscow's postponement of the fishery talks was designed to put teeth into this admonition. Tokyo recognizes that the return of the is- lands is virtually out of the question. Previous Japanese attempts to revive this issue have run into Soviet insistence that it is closed.\ SECRET Page 7 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET Moscow's refusal to discuss the islands is partly rooted in military considerations; Soviet possession ensures control of access to the Sea of Okhotsk. In addition, Moscow wants to avoid reopening the sensitive question of Soviet rights to territory seized in World War I i lest this rein- force irredentist sentiment in Eastern Europe and China. Moscow also fears that Tokyo will use the issue to stir up additional support for Japanese rearmament. Tokyo's plans for expanding Japa- nese military forces have caused increased con- cern. Defense Minister Grechko issued a public warning last September that Moscow will take the "rebirth of Japanese militarism" into account in formulating its own military programs. Moscow probably wants to avoid a situation in which the "northern territories" issue would dominate Soviet-Japanese relations to such an ex- tent that it might disrupt growing economic ties. However, the Soviets are clearly intent on impres- sing on Tokyo the seriousness with which they view this issue, and may take further steps to get the Japanese to desist. North Korea: The Economy Is Making Mixed Progress The North Korean regime appears to be gen- erally satisfied with the gains made under the "seven-year" plan which was stretched from 1961 to 1970, but South Korea's recently burgeoning economy is cause for some embarrassment. Per- haps as a result, the goals of the new six-year plan reflect Kim 11-song's strong contention that a socialist economy is capable of rapid self-sus- tained growth in every economic sector. According to a report given by First Vice Premier Kim Il before the recently concluded fifth party congress, industrial output by the end of this year will have grown at an annual rate of 12.8 percent since 1960, and the seven-year plan will be "fulfilled successfully." The original plan was extended because of a temporary withdrawal of Soviet aid in the early sixties when relations with Moscow cooled and recent increased military spending. Most of North Korea's industrial growth during the last ten years has been concentrated in the strategic heavy industries. Output of coal, crude steel, and machine tools has more than doubled, while that of electric power nearly doubled. Growth in light industry, however, made only moderate advances, and agricultural pro- duction barely kept pace with population in- creases. A modest increase in the output of textiles and other consumer goods may have im- proved somewhat the living standard of the average North Korean worker. Nonetheless, the entire economy grew at only about half the rate of that of South Korea over the same period. The new six-year plan described by Kim is ambitious and calls for a 14-percent annual in- crease in industrial output. Although it promises further improvements in the standard of living, there will be continued concentration on the stra- tegic heavy industries. As a whole, this plan is more in keeping with North Korea's capabilities than the inflated goals of the seven-year plan, but its success is dependent in large measure upon keeping down military spending and continued SECRET Page 8 WEEKLY SUMMARY 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET EUROPE Bavarian Election Helps Bonn and Strauss All the major parties benefited from the results of last Sunday's election in Bavaria. By drawing 12.4 percent in Middle Fran- conia and thus meeting the state requirement of at least ten percent of the vote in one district, the Free Democrats (FDP) renewed representation they had lost in the state legislature in 1966. This success reinforces the psychological boost the Bonn coalition won in Hesse earlier this month. Also, it provides further evidence that the party's role as junior partner in Chancellor Brandt's gov- ernment has won new voter support and has halted the party's decline. As in Hesse, the Social Democrats (SPD) lost a few percentage points, but are compensated to a large extent by the success of their partners, upon whom they must depend for their slim Bundestag majority. Moreover, recent embarrassing dis- closures of an abortive attempt by the Christian Social Union (CSU) to bring a Bavarian FDP Bundestag deputy, Karl Geldner, into the CSU will probably strengthen the Bonn coalition by discouraging other FDP Bundestag members from following three who defected to the opposition in October. BAVARIA ELECTION (22 November 1970) Percent of the Vote (State 1970) Percent of the Vote (State 1966) Percent of the Vote I. Bavaria (Federal 1969) CSU 56.4 48.1 54.4 SOD 33.3 35.8 34.6 FDP 5.5 5.1 4.1 NOD 2.9 7A 5.3 DKP (Communist) Page 9 Landtag Seats 1970 1966 124 110 70 70 10 0 0 15 As expected, the CSU, the Bavarian affiliate of the Christian Democratic Union (CDU), re- tained control of the Munich government by win- ning an absolute majority, though the margin of victory is surprisingly wide. Bavaria is a con- servative stronghold and CSU leader Franz-Josef Strauss, though a controversial figure nationally, is very popular in the state. The "Geldner affair" obviously failed to hurt the CSU, which benefited from voter resentment over inflation. The outcome undoubtedly enhances Strauss' standing in the national party. It will encourage him to assert his influence forcefully in January when the national party congress meets to decide key policy questions and perhaps to select the man who will become chancellor should the CDU win the 1973 federal elections In general, the Christian Socialists have clearly shown their aver- sion to Ostpolitik and most recently zeroed in on the reconciliation treaty with Poland, initialed in Warsaw last week. CDU/CSU leaders allege that the treaty's acceptance of the Oder-Neisse frontier violates the West German constitution and that only Bonn made concessions. Strauss is believed personally to favor even more vigorous opposition and may interpret his Bavarian success as a mandate to urge an all-out attack on Os- tpol iti k. The ultra rightist National Democratic Party (NPD) continued its steady decline, losing all 15 of its seats. Many of the former NPD votes and those of the now defunct Bavarian Party went to the CSU. As in Hesse, the CSU also drew some support from conservative Free Democrats unable 25X1 to accept the FDP's new liberal course. For its part, the FDP won over some liberal voters from SECRET Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET Hungary: Brezhnev Endorses Moderate Reform Program Soviet party boss Brezhnev endorsed the Hungarian party's domestic reform program in a speech to the Hungarian party congress on 24 November. Brezhnev announced the Soviet party's "full understanding and high appraisal" of the program and made it clear that Budapest's internal stability, loyalty to the USSR and "prin- cipled approach" to the reforms were the con- trolling factors in his positive assessment. The endorsement will be viewed with relief by the Hungarians. They have been nervous because in the past the Soviets were reluctant to state their views on changes intended to liberalize political life by permitting popular participation in local government. During his keynote speech, Hungarian party boss Kadar affirmed Hungary's intention to es- tablish diplomatic relations with West Germany, when Bonn has cleared up its bilateral problems with Hungary's allies. Kadar noted that Bonn's failure to recognize East Germany is a potential obstacle to progress but he seemed to place more emphasis on West German "resoluteness" in con- tinuing its Ostpolitik than on resolution of the problem of the two Germanies. This formula is probably meant to convey to East Germany that Hungary hopes the Ulbricht regime will be forth- coming in its talks with the Brandt governri]ent. The congress so far has been a political tour de force for the Hungarian party leader. His speech of 23 November-particularly his de- lineation of internal political reforms--was couched in terms calculated to reflect firm domestic stability, sober-minded confidence, and careful progressivism. So far there has been no dissent from conservative opponents of the reforms, who were unusually vocal prior to the meeting. Presumably Brezhnev's sup ort for Kadar will further intimidate them. Bulgaria-Romania: New, 'riendship Treaty A new 20-year Treaty of Friendship, Co- operation and Mutual Assistance was signed in Sofia on 20 November by Romanian President Ceausescu and Bulgarian leader Zhivkov, replacing the one of 1948. It is unique in the sense that the clause calling for joint efforts toward interna- tional detente binds both parties to work for a conference on European security, even though Romanian and Bulgarian views on this subject are known to differ markedly. I n other respects, the new agreement varies only slightly from the authoritative Soviet- Romanian pact and from the Polish-Romanian treaty signed on 12 November. Each side is com- mitted to supplying all necessary assistance, in- cluding military, in the event of an armed attack on the other. There is no reference to the Page 10 "Brezhnev doctrine" of limited sovereignty, and economic cooperation within CEMA received only perfunctory treatment. Zhivkov emphasized the importance of increased Bulgarian-Romanian economic contacts, including the joint construc- tion of a large hydroelectric complex on the Danube, but the Romanians exhibited little interest. The agreement calls only for Sofia and Bucharest to "inform" each other on mutual in- ternal economic developments. The two leaders reiterated their well-known foreign policy differences, albeit in a moderate and conciliatory tone. Zhivkov stressed the importance of Soviet "experience" as a model for building socialism, but Ceausescu, did not even mention the USSR. Both leaders moved to strengthen Balkan cooperation, but each SECRET WEEKLY SUMMARY 27 Nov 70 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET indicated his country should have pre-eminent leadership in this activity. Zhivkov implied that his archenemy, Yugoslavia, with which Romania maintains warm relations, was fostering "enmity and hatred" in the Balkans. ? YUGOSLAVIA: The highly charged nature of the debate on stabilization of Yugoslavia's econ- omy was dramatized by the sudden resignation of Vice Premier Miljanic, coordinator of the stabili- zation program, on 18 November. He may have resigned in part over the issue of whether to devalue the dinar. In announcing the resignation, Premier Ribicic noted that there has been re- sistance to the stabilization program and implied that regional interests were not cooperating. East Germany's leader, Walter Ulbricht, will be the next to sign a similar treat` in Bucharest, probably in early December. Earlier in the week, the republic and provincial governments expressed support for the program, but each stressed those aspects it finds most pal- atable. Two days after the announcement of Mil- janic's resignation, the cabinet debated the stabili- zation program for over ten hours before adopt- ing a set of proposals scheduled to be introduced on 2(3 November to the Federal Assembly, where the debate undoubted) will resume. 25X1 FRANCE-POLAND: This week's visit to Poland by Premier Chaban-Delmas and Foreign Minister Schumann demonstrates continuing French in- terest in pursuing "detente diplomacy" with the East, a policy earlier advanced by President Pompidou's trip to Moscow. Coming on the heels of the Warsaw-Bonn accord, whose potential im- pact is compared in both Eastern and Western Europe to that of postwar Franco-German recon- ciliation, the visit also helps Poland stress that its political and economic policy toward Western Europe is balanced and not wholly focused on relations with West Germany. The Poles are in- terested in obtaining the French leaders' reitera- tion of France's de facto recognition of the Oder- Neisse border, first extended by De Gaulle in 1959 and restated during his visit to Poland in September 1967. Such a French statement now could be used by Warsaw to press for similar moves by other Western powers. Warsaw also wants more forthcoming French support for a f con erence on European security, which Paris, however, ties to prior progress on a Berlin settle- EAST-WEST GERMANY: Working-level talks be- tween the two Germanies began on 27 November. In making its offer on 19 November for an "ex- change of views" with Bonn, Pankow specified that the discussion should be limited to West German "transit" traffic to West Berlin in ex- change for a cessation by the Federal Republic of its "illegal" official activities in the city. A day after Pankow's agreement to talk, the East Ger- man news service complained that recently con- cluded meetings in West Berlin of the Bundesrat financE! committee and of the finance ministers of the West German states were "hostile to detente." Although the East Germans have tacitly agreed with West Germany to broaden the scope of the talks, Pankow's limited terms of reference indi- cate indeed that little more than an "exchange of views" can be expected for some time. 25X1 SECRET Page 11 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET Italy: Coalition Government Under Strain Prime Minister Colombo's four-party coali- tion is under serious political strain. At the heart of the problem are the differing attitudes among leaders of the government parties toward an in- creasing political role for the Communists (PCI) at the national level. The coalition's program hinges on an eco- nomic and financial bill designed to ensure a dependable base for certain key social reforms. If the bill fails to pass there probably would be a new wave of the social protest strikes comparable to those that undercut industrial production last spring. Most Christian Democrats, Republicans, and Unitary Socialists want to push the measure through the Chamber, with night sessions if neces- sary, to give the Senate time to act before 24 December, the expiration date of the temporary decree that the bill is to confirm. The Socialists favor a more drawn out approach, accepting some Communist amendments, before rejecting the many offered by the ultraleft Proletarian Social- ists and dissident Manifesto Communists. Compromise in this manner with the PCI would hold risks for the economic stabilization features of the bill. It would also further erode the traditionally rigid anti-Communism of the Italian center-left that has insisted the govern- ment parties vote together to pass major legisla- tion with no regard for possible Communist help or hindrance in parliament. The government has the votes to force the measure through, unamended, on a motion of confidence, but at the very least, this would deepen the existing divisions within the coalition over present and future attitudes toward the PCI. Consideration of the PCI assumes increasing importance to politicians when they think in terms of the presidential election in December 1971. Christian Democrats and Socialists con- tending for the office must count on dividing the non-Communist vote. Consequently, they are courting the PCI, which is almost certain to pro- vide the decisive margin as it did for incumbent President Saragat in the election of 1964. In addition, a number of Socialists and left- wing Christian Democrats see merit in a future political grouping that would include the PCI. Left-wing Christian Democrat Donat-Cattin, for example, recently explained in a public interview that he sees the present situation as part of a development toward an eventual alliance of all leftist forces, including the Communists. Many government party leaders conse- quently are reluctant to back a vote of confidence that would draw clear battle lines between the center-left and the PCI. On the contrary, they are seeking more flexible parliamentary groupings. The PCI, for its part, has increased its par- ticipation in local and regional government over the past year. In parliament this fall, the Com- munists have posed as the constructive op- position, abstaining on an ultraleft motion to declare the government's economic bill unco-sti- tutional and refusing to join the ultraleft's fili- bustering tactics. , moreover, party leaders have expressed their in- terest in steadily enlarging the party's political role at the national level. SECRET Page 12 WEEKLY SUMMARY 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 S1 U1CJ 1 MIDDLE EAST - AFRICA Israel: Jarring Talks The Israeli cabinet, at a meeting on 22 No- vember, apparently made no decision about re- turning to the Jarring talks. The official com- munique stated only that the government would work to create the conditions that would justify participating in talks held under Jarring's aus- pices. The Israeli press generally believes the cabi- net emerged from the meeting more unified than before, although differences between Defense Minister Moshe Dayan and other members of the cabinet apparently persist. At a Labor Party meet- ing on 23 November, Dayan reiterated his view that Israel should seek talks with Egypt to estab- lish a new cease-fire agreement, despite the viola- tion of the first agreement by the movement of missiles in the standstill zone. According to the US Embassy, the issue un- der debate in Israel is not whether to return to the Jarring talks because, with the exception of the extreme right wing, everyone agrees that the talks must be resumed sooner or later. The real debate is said to be between those who see the talks as a bona fide chance for peace and conse- quently want them renewed immediately, and those who view the talks as something Israel must do to gain an extension of the cease-fire and to please the US. The latter want to drag out the decision as long as possible in the hope of winning maximum advantages for Israel. The embassy be- lieves that the majority of Israelis are not sure one way or another. The view of the Israeli press is that Israel will ultimately return to the talks, 25X1 although a decision to return will be postponed for several weeks, because further "clarification" from the US must be sought. ETHIOPIA: In a well-executed ambush on 21 November, the commander of the army's 2nd Division was killed, the most dramatic success scored by the Eritrean Liberation Front (ELF) in its current terrorist campaign. Although ELF guerrillas have staged random ambushes in the past, this one was apparently aimed specifically at the commander, the highest ranking Ethiopian killed to date in the Eritrean insurgency. The murder may have been to retaliate for recent army executions of ELF members or to demon- strate the guerrillas' capabilities in order to coax more aid from their foreign sponsors. The general's death has already sparked heavy retaliatory operations by the army in the area. The incident is also likely to bring renewed army pressure on Haile Selassie to establish total military rule in Eritrea. The Emperor has allowed the army wide latitude in provincial affairs in recent months, but has preferred to leave the over-all administration in civilian Page 13 SECRET WEEKLY SUMMARY 27 Nov 70 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 SECRET Guinea The commando assault on Conakry, Guinea's capital, earl this week largely achieved the objectives but failed to trigger a coup. President Toure, although badly shaken, has probably been strengthened politically by the episode. Extensive repercussions unfavorable to Portugal and the West in general now can be expected. Groups of commandos, almost certainly from neighboring Portuguese Guinea, disem- barked from four unmarked ships in the early morning of 22 November at points along the peninsula on which the Guinean capital is situated. They struck quickly at widely separated targets, including prisoner camps, the presidential compound in the suburbs, the port area, and the headquarters of the Guinean-supported African guerrilla group operating in Portuguese Guinea. After inflicting extensive physical damage and freeing Portuguese soldiers being held captive by the guerrillas, and some Guinean prisoners as well. the intruders began to withdraw to their ships within hours of their arrival without acting di- rectly to stage a coup. The bulk of the force, the total size and composition of which is not yet known, probably had re-embarked by the next morning, although remnants are surely still at large in Conakry. Only a small number of commandos apparently were killed or captured. Casualties among the defend- ers were almost certainly higher. Several Euro- pean bystanders were also killed. There are no indications that the invaders received support from the Guinean populace, which appears in fact to have rallied promptly to the government. Even some persons who previ- ously had shown little affection for the regime became its defenders. Moreover, Toure's political system seems to have held together rather well. The largely untrained "people's militia"-n- trusted with live ammunition for the first time- responded zealously. There is weighty evidence to support Toure's charges that the attack was backed by Portugal and originated from bases in Portuguese Guinea. Among other indicators, the operation refledted considerable planning and logistic su ort. The immediate impact on the Toure regime, which has been declaiming against "imperialist" plots since independence in 1958, has been to drive it into a frenzy of apprehension about,fur- ther incursions either by sea or by land. The government claims to have repulsed attempted landings each night since the assault on 22 'No- vember, but it is unlikely that additional landings have occurred or will occur soon. Toure, n ver- theless has atepealed urgently for support. SECRET Page 14 WEEKLY SUMMARY 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET With but few exceptions member countries of the 41-state Organization of African Unity (OAU) have condemned the attack and many have extended offers of support to Toure. Several countries, including Nigeria, announced in ad- vance of any specific requests from Toure their willingness to provide military help. Sierra Leone has already moved a company of troops to a camp inside Guinea. Tanzania has pledged sub- stantial financial support, and demonstrations, sometimes organized spontaneously by students, are taking place in many countries. An OAU meeting has been set for 9 December in Lagos, guaranteeing that the furor will continue in Africa for some time. In response to an appeal from Toure, the UN Security Council, meeting in emergency session, adopted on 23 November a resolution authorizing a fact-finding mission. It is scheduled to arrive in Conakry on 25 November. The resolution made no mention of Lisbon, which has denied any responsibility. SOUTH AFRICA - MALAGASY REPUB- LIC: Officials signed economic aid agreements last weekend worth almost $6.5 million. The South African loans will be used to develop a tourist complex in northern Madagascar. Coming in the wake of Ivory Coast President Houphouet- Boigny's call for talks between black- and white- ruled states, these agreements are likely further to strengthen Prime Minister Vorster's hand domes- tically in pursuing his "outward looking policy." SYRIA: Prime Minister and Defense Minister Asad has appointed a provisional 26-man cabinet including some military men close to him, a half dozen pro-Egyptian ministers, two Communists, and a number of men who have been retained from the former cabinet. Damascus still has had Malagasy officials were publicly effusive in their gratitude for the aid, and President Tsirariana urged South Africa to become more involved in Mada scar's economic development little to say publicly about the "adjustments" in the leadership and there has been little popular reaction to Asad's action. Most observers see only 25X1 slight changes in Syrian policy arising out of Asad's power grab. SECRET Page 15 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET NOIE: "Azad Koshmit itot*" is rwt SECRET 25* `?? JAMMU NORTH- AN13f Peshawar K49M-MR _ _.' s LA Tt" Page 16 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 SECRET Pakistan: Elections On 7 December, Pakistanis will choose from among more than 1,500 candidates for 300 seats in the National Assembly. This constituent assem- bly is to prepare a constitution to be submitted within 120 days to President Yahya Khan for final approval. Mujibur Rahman's Awami League (AL), the leading advocate of greater Bengali autonomy, is the only party running candidates for each of East Pakistan's 162 elective seats, and many ob- servers believe that this relatively moderate party will score from 80 to 100 victories. Bengali criti- cism of the government's handling of relief opera- tions following the recent cyclone-tidal wave could intensify already existing resentment of West Pakistani dominance and result in an even greater sweep for the AL. Conservative parties have failed to work out effective election alli- ances, and the leftists have fielded only a relative handful of candidates. There has been some indi- cation that leftist extremists may resort to vio- lence in an effort to disrupt elections; it is doubt- ful, however, that they possess sufficient funds and strength to force a postponement of elec- tions. I n West Pakistan's largest province-the Punjab-two religious conservative parties, three moderate parties each claiming to be the authen- tic Muslim League, and the leftist Pakistan People's Party (PPP) of former foreign minister Bhutto should all win seats. Taken together, the Council Muslim League (CML), the Pakistan Muslim League Conventionist, and the Qaiyum Khan faction of the Pakistan Muslim League (PMLC:) would seem to have the support of a majority of the voters. By splitting the vote, how- ever, they will. help both the increasingly active PPP and the religious parties. The CML seems to have a slight lead, but it is expected to fall far short of a majority. I n Bhutto's native Sind, the same parties are contending, but the PPP has a slim chance of winning at least half the seats. In Baluchistan and the Northwest Frontier, the PMLQ apparently is about even with a left-leaning regionalist party. No party, including the East Pakistani Awami League, is likely to win enough seats to dominate the constituent assembly. Despite speculation about postelection alliances, the formation of a viable coalition will be difficult and many Pakistanis doubt that the National Assembly will be able to accomplish its primary purpose. The election seems likely to be held on schedule, although the balloting has been postponed in about ten constituencies hit by the recent cyclone disaster, Subsequent intervention, however, in the constitution writing process by either the generals or President Yahya cannot be ruled out./ 25X1 SECRET Page 17 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 SECRET WESTERN HEMISPHERE C h i l e : The Government Faces its First Problems At the national plenum of President Al- lende's Socialist Party (PS) last week a contro- versy arose between the hard-line faction, led by Senator Carlos Altamirano, and the secretary gen- eral of the party, Senator Aniceto Rodriguez. Rodriguez criticized the hard liners for not having participated enough in Allende's presidential campaign. Altamirano, emphasized that he and his followers had organized armed units and intel- ligence groups to support the campaign. Altamirano added that he was only interested in working with "revolutionaries," not just in the PS but also in the Movement of the Revolutionary Left (MIR) and other parties. This rivalry within the PS has been aggra- vated by the occupation of government buildings in several provincial cities by Socialists who com- plained that party members had not been given enough government jobs. Rodriguez claimed that these actions had been taken without the author- ity of the PS central committee, but they may have had his tacit support; at least one of the seizures was instigated by two of Rodriguez' close allies. President Allende is disturbed by these ac- tions. He pointed out to the PS plenum that the success or failure of his administration will reflect on the Socialist Party and demanded an end to the illegal sit-ins. Allende is trying to placate the MIR, in order to prevent a renewal of urban terrorism that alarmed many Chileans during the election cam- paign. The MIR has acted as his personal body- guard for several months. He believes that he can control it and, with the PS, build a counterweight within the Popular Unity coalition to the more numerous and better organized Communist Party. Allende is stoppingthe prosecu- tion of terrorists arrested by the Frei govern- ment or now in hiding. Those in jail have been released unconditionally, and charges have been dropped against others. It seems likely, however, that MIR leaders, who make no secret of their disdain for constitutional procedures, eventually will become dissatisfied with the pace of Al- lende's actions and resume their violent activitjes. Such a development would present Allende with the unpalatable alternatives of tolerating ter- rorism or cracking down on revolutionaries, thus impugning the authenticity of his own leftist credentials. Allende's government also faces a difficult dilemma in dealing with the occupation of urban land by squatters, as well as the seizure of new but unoccupied housing that had been assigned to and paid for by lower class workers. In the Santiago area more than 4,000 dwelling units have been seized since the election in September. On 17 November protesting homeowners stopped traffic on a major highway out of the city for 24 hours. The government now must reconcile the demands of the squatters, its own promise to resolve quickly the critical housing shortage, and the need for enforcement of the law and the homeowners' claims. On another front, the plan of Allende and the Communists to buttress leftist forces within the Christian Democratic Party (PDC) and thus obtain PDC support for crucial legislative pro- posals is running into difficulty. The PDC or- ganized the occupation of some of the housing SECRET Page 18 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 SECRET units in an effort to maintain its influence among the urban poor, where it has long been a strong competitor of the Communists and Socialists. It is becoming increasingly clear that the PDC's sup- port for Allende in the congressional runoff has not guaranteed that the new government will move slowly against PDC interests. Christian Democratic bureaucrats are retaining their jobs with increasing difficulty, and a Communist-led strike at an important PDC publishing house threatens to bankrupt the company. As a result, PDC legislators are marshaling their forces and may oppose Allende's budget proposal and a plan for nationalizing all banking facilities. Private Enterprise The take-over of two partly US-owned com- panies last week may serve as a warning that the administration is willing to force private enter- prise to cooperate. The take-overs were precipi- tated by complaints of Communist-led labor unions and carried out under a 1945 labor law. Recent government press leaks indicate that its 1971 wage policy will further shift income away from management, and a new "escalator" feature will redistribute income among wage-earners by granting substantially larger increases to lower- paid groups. Prices will be rigidly controlled and companies will be expected to offset the addi- tional profit squeeze by expanding output. Copper The new minister of mines has announced that Chile will propose to the meeting of copper producing countries in Paris that joint action be taken to seek new markets and break out of the "iron circle" of present market arrangements. He cited as a potentially good market Communist China, which has periodically shown interest in direct copper purchases from Chile. Chile's copper output is expanding rapidly as a result of the extensive investment of US companies there in recent years. I Latin America Takes a New Look at Cuba Chile's resumption of diplomatic relations recommendation by maintaining diplomatic and with Havana on 12 November has prompted sev- commercial relations with Cuba, was the only eral other countries to review hemisphere policy Latin American state to applaud Chile's move. toward Cuba. The resolution of the Organization of American States (OAS) in 1962 that suspended Cuba from the inter-American system and the resolution in 1964 that called on member states to sever all ties with the Castro government, in- Jamaica, which was admitted to the OAS in 1969 creasingly are being questioned. and maintains commercial relations with Cuba, has not reacted publicly. Chile was the first country formally to re- verse its compliance with the 1964 resolution. Most Latin American countries have been Mexico, which refused to comply with the OAS reluctant to criticize Chile publicly, although it is SECRET Page 19 WEEKLY SUMMARY 27 Nov 70 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 SEUKL"f widely recognized that the viability of the OAS has been undermined. Uruguayan Foreign Min- ister Peirano Facio believes that Chile's action threatens the "credibility of all inter-American obligations." He is worried that other Latin American countries may also recognize Cuba un- less a majority in the OAS reaffirms th resol Ecuador has indicated that it will abide by the 1964 OAS stand although two government ministers and many prominent Ecuadoreans ap- parently favor re-establishing ties with Havana. President Velasco, who is not known for the consistency of his public statements, said recently that "there can be no peace in the hemisphere if an American state is maintained in perpetual excommunication." Venezuela, which brought the charges of subversion against Havana that resulted in the 1964 OAS resolution, is taking a passive role now. In a press conference on 19 November, President Caldera refrained from criticizing Chile or Cuba, and said that Caracas was discussing the matter with other Latin American states. The US Embassy in La Paz reports that "third world" foreign policy proponents in Bolivia can be expected to attempt to bring about a "liberalization" of policy toward Cuba. A vote in the OAS on Cuba could reflect the same partial change in policy that resulted in Bolivia's recent abstention in the UN on the Albanian resolution. A number of countries, including Argentina and Brazil, apparently prefer to avoid a public re-examination of Cuba's revolutionary role and place in the inter-American community. Such a review would aggravate divisions within the ;OAS and would probably result in a larger "pro-Cuba" vote than in 1964 when four countries voted against sanctions. Some countries, moreover, may no longer believe that Cuba's more cautious and selective support to Latin American revolu- tionaries is cause for sanctions. In any case, there is considerable concern throughout the hemisphere that if the OAS fails to act other states will move unilaterally to recognize Cuba and further discredit the QAS. The Peruvian Government is the most likely to follow such a course even though it has fre- quently reaffirmed its adherence to collective decision making within the OAS framework, The US Embassy in Lima reports that if the Cuba question came to a vote in the OAS, Peru would be inclined to vote against the 1964 resolution. In the long run, however, if the OAS fails to act, Peru may be tempted to take unilateral action in recognizing Cuba. SECRET Page 20 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927A008400010001-0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 v L U.L_.LS t Havana stands to gain regardless of whether resume participation as long as the US is a mem- the OAS acts or not. Castro flatly refuses to ber. He has indicated a willingness, however, to renounce his role as an "exporter of revolution" consider bilateral relations with countries that and vehemently denounces the OAS, refusing to publicly disavow the OAS sanctions. E:~__ ~ 25X1 Mexico: New President Foresees Good Relations with the US The Mexican presidential succession on 1 December holds promise for another good era of US-Mexican relations. Incoming President Luis Echeverria's strong but realistic nationalism gives him a clear under- standing of the overwhelming importance of the United States to Mexico, and he clearly intends this "special relationship" to be an asset rather than a problem. Echeverria considers his meeting with President Nixon this month a total success, and he believes that now that he has established a good personal friendship with the US President he can pursue Mexico's interests in bilateral affairs with full vigor. desire to bring the most modern technology into Mexico and to continue the flow of investment, but he wants closer control over the conditions under which both operate. As president-elect, Echeverria held a number of conferences with the US business community in Mexico and he has invited leading US businessmen to his inaugura- tion. outgoing President Diaz Ordaz leaves his successor a healthy legacy of achievement in the fence-mending field, particularly in the form of settled boundary disputes. Diaz Ordaz and For- eign Minister Carrillo Flores, however, have been sharply criticized by the extreme left, which is chronically suspicious of a "sellout" to the "northern colossus." 1 25X6 Mexican-US trade and US investment are of prime interest to Echeverria. He has stressed his SECRET Page 21 WEEKLY SUMMARY Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 ,rr, l Although a number of constant vexations will continue to test US-Mexican friendship, increasin I constructive bilateral exchange Looks hopeful. SECRET Page 22 WEEKLY SUMMARY 27 Nov 70 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 25X1 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0 Secret Secret Approved For Release 2008/06/19: CIA-RDP79-00927AO0840001 0001 -0