WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A008500010001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 29
• Document Creation Date: December 21, 2016
• Document Release Date: May 2, 2008
• Sequence Number: 1
• Publication Date: January 8, 1971
• Content Type: SUMMARY

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DIRECTORATE OF
INTELLIGENCE
Secret
WEEKLY SUMMARY
State Dept. review completed
Secret
8 January 1971
No. 0352/71
N2 46
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(Information as of noon EST, 7 January 1971)
Page
FAR EAST
Cambodia: The War in the West . . . . . . . . . . . . . . . . . 1
Vietnam: Communist Combat Plans . . . . . . . . . . . . . . . 2
Communist China: Putting Together the Party Puzzle . . . . . . . . 4
Communist China Brings in a Record Grain Crop . . . . . . . . . . 5
South Korea: President Pak Is Taking no Chances . . . . . . . . . . 5
USSR - Communist China: Familiar Themes at Year's End . . . . . . 6
New Soviet Push on European Security . . . . . . . . . . . . . . 7
Brezhnev Usurps Collective New Year's Greetings . . . . . . . . . . 8
Czechoslovakia: Stage Set For Economic Changes . . . . . . . . . . 9
Yugoslavia: Assembly Asserts Authority on Economic Issue . . . . . . 9
Finland: Government Crisis Ended . . . . . . . . . . . . . . . 11
MIDDLE EAST - AFRICA
France-Algeria: An Impasse in Negotiations . . . . . . . . . . . 11
Egyptians Wrap Up Military and Economic Affairs in Moscow . . . . 1.2
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MIDDLE EAST - AFRICA (CONTINUED)
Jordan Again Offers Carrot to the Palestinians . . . . . . . . . . 13
Arab States - Israel: Jarring Talks Resume . . . . . . . . . . . . 14
International Oil Developments . . . . . . . . . . . . . . . . . 15
Guinea: Toure Focuses on Internal Subversion . . . . . . . . . . 15
India: Opposition Electoral Alliance . . . . . . . . . . . . . . 16
Islamic Conference: Another Try . . . . . . . . . . . . . . . . 17
Brazil: Negotiations for Diplomat's Release . . . . . . . . . . . 18
Cuba: 1971-Year of Productivity . . . . . . . . . . . . . . . 20
Chile: Government Maintains Momentum . . . . . . . . . . . . 20
Uruguay: Prospects Improving for Freedom of Hostages . . . . . . 22
Central American Common Market Crisis Worsens . . . . . . . . . 22
NOTES: Poland; African Youth Conference
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FAR EAST
Cambodia: The War in the West
Significant Communist military activity con-
tinues to be concentrated in a number of prov-
inces in the western half of the country. Enemy
attacks and ambushes along Route 4 in Kampot
and Koh Kong provinces have thwarted a two-
pronged Cambodian Army operation aimed at
reopening that highway, and increased Commu-
nist military pressure has also been reported in
Battambang and Oddar Meanchey provinces.
The long-delayed government push to clear
Route 4 and re-establish Phnom Penh's overland
access to the seaport of Kompong Som bogged
down quickly when the Communists routed three
Cambodian battalions north of Veal Renh. These
forces were moving to link up with three other
nearby battalions in order to sweep east along
Route 4 toward the enemy-held Pich Nil pass. Six
additional Cambodian battalions are headed
southwest along the highway toward the pass
from the Sre Khlong area. This latter force ad-
vanced unopposed to within ten miles of the pass
before they stopped, apparently because the gov-
ernment battalions southwest of Pich Nil had
been halted by Communist action.
The reopening of Route 4 may ultimately
depend on the intervention of South Vietnamese
Army (ARVN) troops, which Phnom Penh has
already requested. The odds for a positive re-
sponse from Saigon may be enhanced by the
failure of the latest Cambodian effort, and by
South Vietnamese concern over the serious eco-
nomic consequences facing Phnom Penh as a re-
sult of the highway's closure.
The pressure was increased on Phnom Penh's
life lines by a Communist attack which turned
back a Mekong River convoy carrying gasoline
from Saigon to Phnom Penh. Two barges, a
tanker, and a tugboat were sunk and several Cam-
bodian sailors were killed in three attacks on the
convoy near Neak Luong. This is the most serious
incident on the Mekong since the fighting began.
In Battambang, enemy elements recently
captured a village and a bridge on Route 5, less
than ten miles south of the crossroads town of
Sisophon. This marked the first time the Commu-
nists have cut the western land access to Battam-
bang city, the country's second lay lest urban
centar
Farther north, Communist forces have
moved to within 15 miles of Samrong, the poorly
defended and inadequately supported capital of
remote Oddar Meanchey Province. The enemy
Cambodia
Communist -controlled
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eak
l eong
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push toward Samrong began several weeks ago
when a small government garrison was overrun at
Anlong Veng on Route 69. As the Communists
moved west along the road they subsequently
captured several other lightly defended govern-
ment positions. The threat of Thai intervention
may preclude a Communist effort to take Sam-
rong, however. Oddar Meanchey is impoverished
in both population and resources, and its loss
would not be a major setback to the govern-
ment-which already has virtually written it off.
On the political side, the regime appears to
have made one of its rare domestic missteps when
it instituted press censorship. Predictably, this
move provoked a flurry of criticism by several of
Phnom Penh's newspapers. Two of the capital's
six dailies have been shut down for failing to
comply with the decree, and three others have in
turn suspended publication to protest the
closures.
Some democratic-minded youths and intel-
lectuals are likely to view the imposition of even a
limited form of censorship as a step back toward
Sihanouk's dictatorial ways. Additionally, the
issue has evidently reinforced their belief that
Lon Nol is increasingly the victim of bad advice
from his close associates.
Vietnam: Communist Combat Plans
The Communists are planning increased mili-
tary activity for mid-January, before the Tet holi-
days,
Other enemy units in the highlands, in-
cluding the North Vietnamese 66th Infantry and
40th Artillery main force regiments, are preparing
for offensive action.
Page 2
Several units in Military Region 3 near Sai-
gon are also preparing for combat
enemy units in Phuoc Long Province were pre-
paring for attacks on secure hamlets on 15-16
January while major roads northwest of Saigon
have been targeted.
It is expected that if the Communists man-
age to launch these planned attacks they could be
somewhat greater in scope than those immedi-
ately preceding the Christmas holiday, but still
limited to shellings, isolated ground probes, and
increased terrorism and harassment.
Resistance is developing in the Senate
against the election bill now up for consideration.
The bill, which passed the Lower House in late
December, would restrict the number of candi-
dates for next fall's presidential election to those
who can muster substantial sponsorship in the
assembly or among the provincial councils. The
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WEEKLY SUMMARY 8 Jan 71
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two leading contenders, President Thieu and Gen-
eral Duong Van Minh, will easily command suf-
ficient backing, but any dark horse would be hard
pressed to find the required 40 assembly or 100
provincial council sponsors.
The bill has Thieu's backing and may reflect
his belief that he can utilize the government bu-
reaucracy to his advantage. Many National As-
semblymen, because they will be forced to com-
mit themselves to a candidate before their own
re-election campaigns, may hesitate to risk the
loss of government support by opposing Thieu. A
number of opposition assemblymen have criti-
cized the bill, however, and the Senate may at-
tempt to modify it. Even the Saigon Post-usually
sympathetic to the government-has taken an edi-
torial stand against it. The Post points out that an
"outsider" not blessed by those already in office
would be virtually excluded from legal political
competition.
Thieu's support of the bill could backfire
against him. As a candidate for re-election, he
might be expected to try to divide and conquer
the opposition, relying on the power of his office
and government machinery to marshal sufficient
support to beat a divided opposition. This bill,
however, will tend to limit the number of candi-
dates who may run against him, and it could
actually serve to unite the great majority of oppo-
sition elements behind a single opposition candi-
date, such as Big Minh, thereby hurting Thieu's
chances.
Buddhist peace ceremony in Saigon on 3 January y
and dressed up his image as a peace candidateUNC
releasing several doves from the stage. Minh's
presence strengthens indications that the An
Quang will back his candidacy, although so far it
has not made a formal commitment to anyone.
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Communist China: Putting Together the Party Puzzle
Despite a host of unresolved problems, Pe-
king apparently is trying again to force the pace
of its prolonged campaign to reconstruct the shat-
tered Communist Party apparatus. Late last
month, the regime approved in rapid succession
the formation of four provincial party commit-
tees-the most important party organs to be es-
tablished since the central committee was recon-
stituted at the Ninth Party Congress in April
1969. Since the congress, considerable attention
has been devoted to rebuilding the party from the
lowest administrative units upward. Peking, how-
ever, evidently has grown impatient with the un-
even progress of this politically troublesome task
and seems anxious to demonstrate more visible
results in advance of the party's 50th anniversary
this summer. The process could be considerably
shortened because it appears that in all but a few
long-troubled areas, the incumbent provincial gov-
ernment leaders will simply be confirmed as the
local party chiefs.
Predictably, the top positions in the first
four provincial party committees-in Hunan,
Kwangtung, Kiangsu, and Kiangsi Provinces-are
heavily staffed by military officers supplemented
by veteran civilian party officials. Few, if any,
leading posts appear to be held by militant young
activists-the "fresh blood" Mao Tse-tung had
ordered to be infused into the party structure
following the Cultural Revolution. The current
trend toward militarization of the party apparatus
is likely to hold true as the provincial level re-
building process unfolds elsewhere. Local media
in recent months, for example, have increasingly
been identifying military officers as ranking mem-
bers of the so-called provincial party core
groups-the precursors of the remaining party
committees that eventually are to be formed.
This by no means forecasts a near exclusion
of civilians from important secretarial posts. Nev-
ertheless, in contrast to much of the pre - Cultural
Revolution period, when the civilian provincial
party hierarchy formed interlocking directorates
controlling corresponding government, armed
forces, and mass organization units, the pivotal
overseer roles will now be played to a greater
degree by army men. Such convergent lines of
authority, for example, are symbolized in the case
of politburo member Hsu Shih-yu, who now has
added the post of Kiangsu party first secretary to
his existing roles as head of the provincial govern-
ment and commander of a major military region.
Although Peking's latest party building drive
may speed up the tempo, its end result is still
likely to be largely a cosmetic exercise having
little immediate impact on the myriad political
problems that have been hampering effective local
administration. There has been ample evidence at
the lower levels, for example, that the mere estab-
lishment of party committees does not guarantee
the ability of party officials to consolidate their
authority. Moreover, military dominance in itself
is not a panacea for political disputes. The con-
flicts and tensions both among and between army
and civilian cadres that have pervaded so many
administrative units are likely to be carried over
into the party arena as well. Finally, Peking's
persistent admonitions to senior cadre to follow
Mao's revolutionary line "still better" attest not
only to nagging frustration with the performance
of many ranking civil and military authorities, but
also to the serious limitations on the regime's
ability to affect the actions of local officials who
regard the party building process as an opportun-
ity to compete for additional power and influ-
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Communist China Brings in a Record Grain Crop
Peking's claim that the 1970 grain harvest
"exceeded all previous records" is plausible. Since
the mid-1960s, China has been reaping the payoff
from a combination of gradual but steadily in-
creasing injections of modern inputs to agricul-
ture and a backtracking from extreme collective
measures which had dampened peasant incentives.
By 1964, grain output had recovered from the
disaster years following the collapse of the Great
Leap Forward of 1959-61, and generally has been
on an upward trend since. The 1970 grain harvest
appears to be on the order of 215-220 million
tons compared with the previous high in 1967 of
210-215 million tons.
The agricultural successes of recent years
have eased Peking's immediate economic pres-
sures. Total food production has probably been at
least commensurate with population growth for
several years. The good harvests of recent years
have also, by Peking's own statements, enabled
the state, the provinces, and the communes to
build up food stocks.
Chinese leaders apparently intend to con-
tinue pragmatic agricultural policies. During the
fourth five-year period (1971-75), incentives will
evidently still be centered on private plots-which
the new 1970 state constitution legitimizes-and
on payment according to work performed. Agri-
cultural investment will continue to emphasize
irrigation and chemical fertilizers, the two most
beneficial measures applied so far. In addition,
the regime hopes that the recently revamped rural
educational structure will turn out peasants who
are better able to use technology becoming
available.
Nevertheless, Chinese agriculture still re-
quires support from abroad. The Chinese show no
signs of changing the policy decision made in the
late 1960s to rely on imported chemical fertilizers
instead of expanding domestic production by
constructing large, modern plants. More than half
of the three million tons of chemical fertilizer
measured by nutrient content used in 1970 came
from Western Europe and Japan.
The necessity to import grain may be dimin-
ishing, however. For some years, domestic food
production has appeared to be adequate for cur-
rent needs, but the Chinese maintained imports at
some five million tons annually. By earmarking
most of this amount to coastal provinces with
grain deficits, internal transport movements were
reduced. Some of the grain might have gone to
augmenting stocks. Peking now claims that some
of the northern provinces became self sufficient
in grain during 1970, even though it is not yet
certain that this state can be maintained if
weather in subsequent years deteriorates.
South Korea: President Pak Is Taking No Chances
Responding to the unexpectedly energetic
challenge being mounted by his major opponent
in the presidential election this spring, President
Pak Chong-hui has come up with the machinery
for a hard-hitting campaign of his own. Following
on the mid-December cabinet shake-up, Pak late
last month overhauled the leadership of his
Democratic Republican Party to bring in unques-
tioned-if somewhat controversial-talent.
In a move to harness this talent and yet
maintain balance among competing factions, Pak
as party president created a triumvirate of special
advisers. Prominent in this new lineup is Kim
Chong-pil, Pak's former number-two man, whose
ill-concealed ambitions for the presidency in 1969
led to a temporary cooling between the two. The
other members of the trio of advisers are Yun
Chi-yong, leader of the party's anti - Kim
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Chong-pil faction, and Chong II-kwon, the previ-
ous premier and a well-liked neutral.
To box in Kim Chong-pil even more, Pak
chose for most of the other party posts men
considered unsympathetic toward Kim. The lat-
ter, although obviously displeased with these ar-
rangements, apparently is resigned to working
within the system while keeping a calculating eye
on the future.
Rounding out the Democratic Republican
Party's refurbished apparatus for the election, a
new 15-man Party Affairs Committee has been
formed, whose members are responsible for bring-
ing in the vote in individual provinces or special
city areas. As in the case of recent cabinet ap-
pointments, careful attention to the relative polit-
ical strengths of the various regions is reflected in
the makeup of this important committee.
Evident in all the recent administrative shifts
made by President Pak is an overriding considera-
tion for fashioning a high-powered election team,
even at the expense of possible liabilities. A major
case in point is the naming last month of Yi
Hu-rak as director of the ubiquitous South
Korean Central Intelligence Agency. Yi, Pak's
long-time confidant and former private secretary,
had been eased into an ambassadorial post about
a year ago as part of an effort by the President to
convince a generally skeptical public that he was
serious about rooting out corruption in govern-
ment. At this juncture, however, Pak apparently
has decided that Yi's political talents outweigh his
bad public image. It seems abundantly clear that
despite his own good record and all the ad-
vantages of the government apparatus, President
Pak intends to take no chances of being upset by
the brash but attractive candidate of the opposi-
tion New Democratic Party, Kim Tae-
EUROPE
USSR - Communist China: Familiar Themes at Year's End
The renewal of Sino-Soviet polemics, cou-
pled with the collapse on 19 December of the river
navigation talks, put the recent signs of improve-
ment in state-to-state relations in perspective and
demonstrate that, despite these signs, there has
been little real progress in resolving the more
intractable problems that divide the USSR and
China. The polemical exchange, which was the
first full-dress one since the war of words over the
West German treaty last fall, centered on alleged
Soviet intervention in the recent Polish crisis.
Moscow's original announcement on the
ending of the navigation talks had sought to
imply that some kind of agreement had been
reached. Peking, however, flatly denied this a few
the talks had failed to
make progress because the two sides approached
them in a fundamentally different manner. Ac-
cording to the Soviets, the Chinese proposed a
series of navigation "formulas" that would have
undermined Moscow's position in the broader
political talks in Peking. One of these "formulas"
almost certainly included insistence on the main
navigation channel as the river boundaries, a
principle disputed by the USSR despite its general
acceptance in international law.
The Soviets have hinted that these develop-
ments may delay the return to Peking of Ambas-
sador Tolstikov and chief border talks negotiator
Ilichev from their current sojourn in Mos-
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New Soviet Push on European Security
Moscow closed out the year by moving with
a flurry of diplomatic demarches and public state-
ments to revive its long-stymied project for a
conference on European security (CES). Washing-
ton and other NATO capitals were the recipients
of Soviet demarches-formally in reply to the
December NATO ministerial communique-
during the week of 28 December. On 2 January,
Premier Kosygin publicly joined in with an appeal
for quick progress toward a CES in an interview
with Japanese newsmen.
The moves put an end to a long period of
relative inactivity on the subject of CES. Moscow
had launched no initiatives of its own since last
June, when it co-sponsored a Warsaw Pact
memorandum that expanded the proposed agenda
for a CES to include the creation of a permanent
body to deal with European security matters,
including-so it was hinted-talks on mutual bal-
anced force reductions (MBFR). The Soviets
doubtless had a hand, however, in the formula-
tion of a Finnish proposal made late in November
to move to the stage of multilateral preparations
for a CES by convening a meeting in Helsinki.
The USSR promptly endorsed the Finnish pro-
posal, and Moscow's recent demarches included
attempts to get movement on it.
The new round of Soviet statements also was
aimed at countering Western efforts to link fur-
ther movement on CES to progress in other areas.
The demarche delivered to the US last week took
particular exception to the "linkage" the De-
cember NATO ministerial established between a
Berlin settlement and progress toward a CES,
charging that this is meant only to impede move-
ment toward a conference. It held that progress in
the Berlin talks is now dependent on a change in
the Western position, and insisted that an "answer
is due" to the proposals submitted by the Soviets
at the last four-power meeting. It took general
exception to attempts to tie a CES to other
negotiations.
A significant aspect of the Soviet approach
to European security has been an effort to differ-
entiate between the US and the West Europeans.
In the note to Washington, Moscow openly
charged the US with using the Berlin talks to
"complicate" movement toward a CES and with
attempts to "impede the process of improvement
of the political situation" in Europe. The same
charge in the past has been made privately and
frequently in Bonn and other European capitals,
and presumably will continue to be made for
political effect. It may reflect a degree of genuine
concern that Washington regards a CES and other
East-West negotiations in Europe as a threat to its
political interests on the continent, and conse-
quently will try to torpedo them. Moscow's inter-
est in these negotiations is at least in part based
on the hope that they will precipitate a reduction
of the US role and influence in Europe.
Apparently the same basic themes were
sounded in the demarches made to other. NATO
powers. I n another recent approach to the West
Germans, however, the Soviets strongly criticized
the European Communities (EC), claiming that
Bonn's support for an alleged "third bloc" in
Europe was incompatible with its Ostpolitik. The
charge underscores Soviet concern about the EC
and Moscow's hope that a CES can be used to
slow West European integration.
The Allies are not likely to break ranks
openly because of the renewed Soviet pressures
for a CES this soon after the NATO ministerial.
Bonn, for example, now seems anxious to secure
as many gains as possible before embarking on a
CES.
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Paris, for example, has already shifted to a posi-
tion favorable to CES preparations. Other Allies
will resist adding any more specific preconditions
to CES preparations. Even an initial show of
Western solidarity therefore will not deter Mos-
cow from further efforts to prompt immediate
movement toward a CES and t
k
d
o spar
an
ex Ioit
In the long run, however, it may be more differences among the Western powers. difficult to main+ain a ,mo
X___ -
o NATO
Brezhnev Usurps Collective New Year's Greetings
Party leader Brezhnev, by his greeting to the
Soviet people on New Year's Eve, executed a
brazen publicity coup in capturing this tradi-
tionally collective platform. Although he has not
silenced other leaders nor apparently mastered
the policy debates among them, Brezhnev's latest
success in advancing his public role indicates
growing strength as the March party congress ap-
proaches.
In the past, even under Khrushchev, the New
Year's greeting consisted of an impersonal mes-
sage signed by the party central committee, the
Supreme Soviet, and the Council of Ministers, and
read over the air by an announcer. This year
Brezhnev read the greetings on radio and televi-
sion, and his picture accompanied their publica-
tion in the press. Although the message remained
a short pro forma affair, Pravda has cited this
"Brezhnev speech" in editorial comment and has
reported foreign and domestic reaction to it.
During the past year Brezhnev has as-
siduously exploited his position to heighten his
public prominence. For this he has found many
appropriate occasions: the Lenin centenary cele-
bration, republic anniversaries, and travels about
the country. His New Year's effort, in its break
with precedent, matches his address in June to
the Council of Ministers, a body with which he
has no official standing.
Other leaders, especially in recent months,
have also sought public exposure. Indeed, Bre-
zhnev shared attention at the turn of the year
with Premier Kosygin, whose interview with a
Japanese newspaper on 1 January was reported
by the Soviet domestic radio and press. In grant-
ing the interview, however, the premier followed
a customary, although not invariable, practice.
Kosygin stuck close to established official
positions in his comments on world affairs to the
Japanese paper. The interview did provide an oc-
casion for him to reaffirm Soviet support for
SALT, which was reported by the domestic news
media. On the other hand, the very limited in-
formation he offered to the Japanese on the next
five-year plan was largely expunged from Soviet
domestic reports.
This and other signs suggest that on basic
issues, such as the five-year plan which must be
adopted by the party congress, no one leader or
group of leaders has yet been able to work its
will. Continued politicking is betrayed by unusual
inconsistency in references to the record grain
and cotton harvests of last year and the propa-
ganda-unsupported by official plans-on the sub-
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Czechoslovakia: Stage Set For Economic Changes
The Husak regime last week, in an important
step toward bringing the economy under control,
transferred to the federal government much of
the economic authority granted by Alexander
Dubcek to the regional Czech and Slovak admin-
istrations. The new system probably will be
modified in the course of the next five-year plan,
but for now it provides the regime with the in-
stitutional basis for formulating its own economic
reforms.
One of the regime's most important goals is
the more efficient use of the country's critical
resources. Two new federal ministries-the Min-
istry for Fuels and Power and the Ministry for
Metallurgy and Engineering-were established, re-
placing similar regional organizations. Existing
federal "committees," including those for indus-
try, transportation, and investment, were restruc-
tured into federal ministries with added powers.
The committees were orginally designed to give
the Slovaks parity with the Czechs in economic
matters. A Federal Office for Prices was estab-
lished to unify financial and budgetary planning,
and a central People's Control Commission set up
to investigate local management practices.
Although these changes clear an important
bureaucratic hurdle, government leaders are still
having major difficulties drawing up specific eco-
nomic programs. In his speech to a party central
committee plenum last month, Premier Strougal
indicated that the long-awaited five-year plan
would not be completed before next spring. In
spite of his efforts to dress up the economic
achievements during his government's tenure,
Strougal indicated that major problems still exist,
notably in the areas of investment planning, labor
allocation and foreign trade. Recurring warnings
by Strougal and other regime spokesmen of
lingering "revisionism" suggest that today's eco-
nomic planners are having trouble integrating into
their own programs usable portions of the dis-
carded reforms proposed under Dubcek. Their
difficulties appear to be largely political, however,
rather than economic.
The political consequences of the govern-
ment reorganization could well cause additional
problems in economic planning. The Slovaks, who
achieved economic and political autonomy in
1968, are not likely to be pleased or taken in by
government assurances that the federal principle
remains "unchanged." Nor is the regime's effort
to soften the blow by including Slovak admin-
istrators in the new federal bodies likely to al-
leviate Slovak fears of being resubordinated to
Prague. The fact that regional security organs
were brought under federal control at the same
time as the economic bodies suggests that the
regime intends to intimidate potentially dis-
gruntled economic administrators into coop-
erating without question.
Yugoslavia: Assembly Asserts Authority on Economic Issue
Yugoslavia's eclectic political system is and as a result the government compromised on
showing new vitality as it comes to grips with the its proposed "wage freeze."
government's pending economic stabilization pro-
gram. A heated debate in two houses of the At issue was the proposal of the Federal
National Assembly on 29 December saw some Executive Council (FEC) to limit personal income
hitherto unheard of parliamentary maneuvering, growth this year to 11 percent above the 1970
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level. The overwhelming majority of delegates,
however, refused to support the measure, labeling
it "repressive" and "incompatible" with self-
management. The FEC hastily withdrew its pro-
posal, substituting instead a bill which would
limit income growth only through April 1971.
This was passed.
The wage limitation is described by Premier
Ribicic as the "last restrictive law" of the eco-
nomic stabilization program and is timed to ex-
pire when each republic's law on income distribu-
tion comes into effect next spring. Low income
groups are exempted from the restriction.
An 11 percent growth limitation over four
months is not restrictive. The measure, however,
is important because it suggests that the govern-
ment finally may be listening to the advice of
economists who long have stressed the strong
impact of wage increases on inflation.
The wage limitation aroused the rare wrath
of the trade union delegates in parliament. The
unions throughout 1970 had sought to dispel the
impression that they are "transmission belts" for
party policy, and for some time have been press-
ing for better living conditions and higher wages
for workers. Consequently, the Yugoslav Con-
federation of Trade Unions wasted little time in
defending the workers and denouncing the wage
restriction. During the debate in the economic
chamber, trade union secretary Marijan Rozic
personally and vigorously argued against the bill
as originally proposed.
The "wage freeze" represents a reversal of
previously announced government policy. Earlier,
the regime emphatically denied wage controls
were under consideration. Moreover, a second
policy shift also may be in the offing; recent
statements by both President Tito and Premier
Ribicic indicate that devaluation of the dinar will
take place in 1971. The key question is timing.
The assembly action undoubtedly was in
part a reaction to the recent workers' riots in
Poland. It also was the second time in the last two
months that the Yugoslav parliament seemed to
be acting in an independent and unexpected
fashion. (In an unparalleled move in mid-Novem-
ber, a vice premier resigned in a policy fight about
proposed devaluation of the dinar.) Such un-
orthodox activity in Communist Yugoslavia is
apparently just the beginning of the political
fireworks expected between now and.next spring
as Belgrade continues to unfold both its economic
stabilization program and government re-
POLAND: The new Polish leadership team ob-
tained formal approval from Soviet leaders on 5
January. A press statement following a day-long
meeting in Moscow between Brezhnev and
Kosygin and Polish party leader Edward Gierek
and Premier Piotr Jaroszewicz affirmed their
"complete unity of views," including the matter
of improving relations with West Germany. Eco-
nomic affairs also were probably discussed, but
no new developments were reported. Meanwhile,
in Warsaw, the regime continued to try to win the
confidence of workers by promising to introduce
more flexibility into Gomulka's recently adopted
system of material incentives, and by increasing
family allowances, raising the earnings and
pensions of the lowest income groups, and
promising more consumer goods and housing in
1971. A party plenum is reportedly planned
sometime in January to analyze in detail the
causes and political ramifications of the "De-
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A month-long government crisis ended on
the eve of the new year when the Communists
allowed key parts of President Kekkonen's eco-
nomic stabilization program to become law.
The government's difficulties had been
created by the prolonged jockeying between the
liberal leadership of the Communist Party and its
conservative opposition for advantage not only
within the party but within the recently reunified
trade-union movement. The conservatives sought
to increase their political appeal by advocating
extreme wage demands and a policy of no com-
promise with the other members of the center-left
government coalition. Fearing the success of this
tactic and the threat of either a split in the party
or a take-over by the conservatives, the liberal
leadership temporarily abandoned the "respon-
sible" image it had cultivated in recent years and
adopted the opposition's line. As a result, negotia-
tions between the government, employers, and
trade unions on a new economic stabilization
agreement reached an impasse, and in late Novem-
ber President Kekkonen finally intervened to
stave off the collapse of the talks and a sub-
sequent wave of strikes.
Kekkonen's compromise economic stabiliza-
tion proposal was accepted in early December by
all parties except the Communists. Their con-
tinued resistance prompted government leaders to
threaten their expulsion from the coalition. After
several weeks of bargaining, an agreement was
reached in mid-December allowing the Com-
munists to vote in parliament against minor parts
of the compromise, provided they did not block
its essential elements.
Still unresolved, however, is the continued
Communist resistance to the Kekkonen program
within the trade-union movement. Several Com-
munist-led unions have already rejected the com-
promise, vowing to strike if their demands are not
met. In order to influence unions still wavering,
employers have been sweetening their contract
offers, which, while technically within the Kek-
konen framework, actually approach the terms
originally demanded by the trade-union leader-
ship.
MIDDLE EAST - AFRICA
France-Algeria: An Impasse in Negotiations
Algiers' rejection in late December of major
French offers on petroleum prices and control of
production has brought bilateral negotiations on
oil and other problems to at least a temporary
impasse. French Foreign Ministry officials for the
first time envisaged the possibility of a break-
down in the talks, with the consequent danger of
a rupture in the over-all relationship. Quai Di-
rector for Algerian Affairs Paoli speculated that
the entire matter would be reviewed by
Pompidou before the fifth session of talks begins
in Paris on 18 January and that presidential con-
trol over the negotiating process might tighten,
considerably.
According to the respected French daily Le
Figaro, whose account Paoli described as "reason-
able," France offered to turn over to Algeria one
third (or approximately ten million tons) of the
current annual petroleum production of French
companies in Algeria. Although this offer would
bring the share of Algeria's national oil company
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Sonatrach to 50 percent of total production, the
Algerians apparently are insisting on majority
control over all producing companies, in addition
to more substantial fiscal benefits.
Paoli does not believe Paris could go any fur-
ther toward meeting Algeria's desire. Bettering
the current offer, in Paoli's view, would entail a
fundamental change in the entire negotiating pro-
cess. Some French newspapers already are claim-
ing that the French offer represents excessive con-
cessions to the Algerians at the expense of French
companies and consumers.
According to Paoli, domestic pressures will
be one element in determining the stand Pom-
pidou will take, although his strong position and
his massive parliamentary majority give him con-
siderable freedom. Most observers believe both
countries have a great deal to lose if negotiations
collapsed and particularly if a break in relations
followed. Such a course would deal a sharp blow
to Pompidou's Mediterranean policy, because
Algeria has long been considered a vital link be-
tween France and the rest of the Arab world.
France's hurried evacuation in late Decem-
ber of Bou Sfer-its last military base in Algeria-
nearly seven years ahead of schedule apparently
did little to placate the Algerians. It seems prob-
able that Paris hoped to influence the talks favor-
ably by a gesture of flexibility.
i
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Egyptians Wrap Up Military and Economic Affairs in Moscow
The Egyptian delegation led by Vice Presi-
dent Sabri obtained pledges of continuing Soviet
economic and military assistance Burin its recent
visit to Moscow.
or scale of military assistance is expected to result
from the visit.
Record amounts of military equipment ar-
rived in Egypt during 1970. In addition to the
SA-3 air defense system, which remains largely
under Soviet control, and the accompanying
Soviet troop commitment, Egypt also received
electronic countermeasure equipment. The recent
appointment of the senior air defense officer as
chief Soviet military adviser to Egypt underscores
the area in which the USSR probably will con-
tinue to concentrate its efforts.
Although Egypt received fewer high-per-
formance fighter aircraft from the USSR last year
than in 1969, the effect on its inventory was
offset by a reduction in combat losses. Cairo also
received a record number of MI-8 helicopters, pre-
sumably rocket-equipped. These have improved
heliborne capabilities and keep before the Israelis
the specter of Egyptian cross-canal operations.
The only new economic aid offered during
the visit provides for Soviet technical assistance to
expand military-related industrial production.
Cairo's ability to expand significantly its war-re-
lated industries is limited, however, by its small
resource base and the lack of sophistication of its
existing capital goods industry. Moreover, quali-
fied technicians for industry are in short supply
because they are increasingly being employed in
the military sphere.
Egyptian Industry Minister Sidqi announced
a schedule for further economic talks over the
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next six months that probably will lead to a 1971
trade agreement being signed in March and a
long-term economic cooperation agreement being
concluded in June. Although additional economic
aid projects also were discussed during the visit,
more than $300 million in economic credits ex-
tended in 1964 have yet to be drawn. Several
economic development projects, such as the ex-
pansion of the Helwan Iron and Steel Plant and
oil prospecting in the Western Desert, are still far
from completion. In addition, the Aswan High
Dam has encountered numerous problems that
are likely to require additional Soviet assistance
to correct.
Jordan Again Offers Carrot to the Palestinians
Premier Wasfi Tal used a mandatory appear-
ance before parliament on 2 January to indicate a
new emphasis in the Jordanian Government's
policy toward its internal problems. In his speech
Tal took advantage of the current lull in fighting
with the fedayeen to acknowledge both army
valor and the "justice" of the Palestinians' efforts
to regain their rights. In foreign affairs he lauded
the proposed union of Egypt, Sudan, Libya, and
Syria and he urged increased Arab unity. The
main theme, however, was that the government
now wants to offer something more than the
simple hard line that bedouin army leaders have
taken. The prime minister sought to reassure the
Palestinians that the buildup of the army is aimed
at defending the country and fighting the battle
for the liberation of Arab lands, with the implica-
tion that the Palestinians have little to fear if they
will support this buildup rather than impede it.
Tal's carrot is an ambitious government re-
form program-which he will spell out at a later
date-in the fields of education, health, roads,
water, utilities, insurance, and employment. It is
difficult to judge the workability of these pledges;
Jordan is hardly in a financial position to embark
upon a major program of social reform. However,
Tal's speech once again emphasizes the fact that
he has continued throughout his short term to
underline the principles of accommodation and
national unity for Jordan despite his past reputa-
tion as a tough politician who takes a very hard
line with dissidents.
An intelligent, well-educated man as well as
a practical politician with a long-standing interest
in improving government efficiency, Tal is aware
that military elimination of the fedayeen would
probably create more problems than it would
solve, particularly among Jordan's Palestinian
population. During the present weakness of the
fedayeen, the premier is obviously seeking to
bring them into the fold, and his efforts are to
some extent being supplemented by the Arab
peace teams still operating in Jordan.
So far Tal has had some success. Parliament
gave him an overwhelming vote of confidence,
and the fedayeen's chief newspaper applauded
large parts of his speech, while noting some slip-
page between his words and his deeds. Perhaps
the chief immediate danger to his program lies in
the army, which continues to bear down hard on
the fedayeen at every opportunity. Tal's problems
with the army may be alleviated somewhat when
many of the units are engaged in extensive train-
ing programs with new arms in areas remote from
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Arab States - Israel: Jarring Talks Resume
Arab-Israeli negotiations under the auspices of
Gunnar Jarring, UN Secretary General Thant's Mid-
dle East envoy, resumed this week in New York
after a five-month delay. Following preliminary
contacts with the principals on 5 January, Jarring
yielded to Israeli demands and agreed to go to
Jerusalem on 7 January to talk to Foreign Minister
Abba Eban.
Jarring's report to the Security Council on the
Middle East situation was distributed as required on
5 January, one month before the cease-fire exten-
sion expires. It did not attempt to place any blame
for the stalling of the talks and thus provided little
grist for the Soviet and Arab propaganda mills.
Jarring and others may hope that his noncon-
tentious report and efforts to conduct the talks in a
business-like manner may head off an acerbic Secu-
rity Council debate on the Arab-Israeli dispute be-
fore the cease-fire expires. They also take hope
from the fact that the new nonpermanent members
who took their Council seats on 1 January are less
inclined to be sympathetic to Arab positions. The
Egyptians, however, are committed to a full-dress
airing of the dispute if the Jarring talks fail to yield
them anything that can be termed progress, and
they will almost certainly appeal to the UN before
announcing a formal termination of the cease-fire.
In Cairo, Egyptian leaders are pleased that the
Jarring talks are once again under way, but are not
optimistic over prospects for meaningful progress.
Cairo continues to believe that the US fully sup-
ports Israeli policy positions and that the US is
unwilling to apply the necessary ressure on Tel
Aviv to break the impasse.
Sadat, meanwhile, has continued to under-
score the need for making some progress in the
political arena by his warnings that the cease-fire
will not be renewed again unless a timetable for
Israeli withdrawal from Arab territory is estab-
lished. This condition, however, has on occasion
been hedged somewhat, leaving open the possibility
that as long as there is some tangible progress Egypt
will continue to observe a de facto cease-fire or
accept one dictated by the UN or the Big Four.
The Israelis are expected to adopt a very tough
stand in the talks and have continued to reject
Sadat's demand for a timetable for withdrawal as a
condition for a further extension of the cease-fire.
Although Jarring has said that he accepted the
Israeli invitation on the assumption that substantive
matters would be discussed, it is highly unlikely
that the Israelis will make any significant departure
from their previously stated positions. They will
probably press Jarring to raise the talks to the
foreign minister level and move them from New
York to the Middle East, preferably Cyprus.
AFRICAN YOUTH CONFERENCE: The recent
third congress of the Pan African Youth Movement
which met in Dakar, Senegal, again highlighted the
difficulty that African moderates have, even at
home, in coping with African radicals. Delegates
from only 21 of the 40 states invited showed up;
six African liberation movements and several Com-
munist front groups sent delegates.
Although the moderates, led by Senegal, par-
tially toned down the final report, it still comes
down hard on the West while heaping praise on the
revolutionaries in the Middle East, Asia, and Latin
America. The report "rejects with force" proposals
for a dialogue with South Africa. An attempt by
the moderates to relocate the Algerian headquarters
failed, and the leadership remains in radical
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International Oil Developments
The ten members of the Organization of
Petroleum Exporting Countries (OPEC)-Iran,
Iraq, Kuwait, Saudi Arabia, Abu Dhabi, Qatar,
Libya, Algeria, Indonesia, and Venezuela-have
adopted resolutions aimed at substantially in-
creasing their oil revenues. For one of the few
times in the organization's ten years of existence
both radical and moderate members joined to-
gether during their December meeting to present
a united front to the Western oil companies. This
unity, however, is already being threatened by
Libya, who has just recently made new demands
on the oil companies outside the framework of
the OPEC resolutions.
The OPEC resolutions call for an across-the-
board increase in the price on which taxes are
based, a minimum tax rate of 55 percent (the
lowest rate now is 50 percent), and a revision of
the method by which tax reference prices are
determined. Several other more technical resolu-
tions would also provide additional revenue for
OPEC members.
An OPEC committee composed of represen-
tatives from Iran, Iraq, and Saudi Arabia are to
present the resolutions to representatives of West-
ern oil companies at a meeting to begin on 12
January in Tehran. If negotiations are not con-
cluded satisfactorily by 3 February, the OPEC has
resolved to reconvene and "set forth a procedure
with a view to enforcing and achieving the objec-
tives through concerted and simultaneous action
by all member countries."
The oil companies and principal oil import-
ing countries view the OPEC resolutions with
apprehension, particularly because of the prece-
dents set by the Libyans in their agreements last
year. Libya, in effect, became the first oil produc-
ing country that unilaterally established posted
prices and tax rates. The oil companies will resist
adoption of this principle by other OPEC mem-
bers.
Libya's action in presenting the oil com-
panies with several new demands demonstrates
the difficulties OPEC may have in keeping its
members unified. By seeking not only a
five-percent tax increase, but also mandatory
reinvestment of a share of oil company revenues,
an unspecified "Suez allowance," monthly tax
payments in lieu of quarterly payments, and a
provision for the oil companies to supply Libya's
domestic petroleum needs "at cost," Libya has
placed itself well ahead of OPEC
Guinea:
Toure Focuses on Internal Subversion
President Toure now is focusing his anger on
local Guineans and resident foreigners that he is
claiming have been involved with the Portuguese
efforts to topple his regime.
Throughout December Toure concentrated
on condemning foreign "imperialists"-spe-
cifically Portugal-and on asking friendly states
for materiel help in staving off predicted new
attacks. Toure, while continuing to push strongly
for aid, is increasingly preoccupied with possible
subversive threats from within. He charged in a
New Year's day speech that the "aggression
against Guinea" last November was aided by a
fifth column that included local Guineans as well
as foreign accomplices. He promised to bring the
accused-not yet specifically identified-before
revolutionary tribunals and ordered all levels of
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Guinea's single political party to begin meeting to
consider the "evidence."
There have been no indications so far that
any organized internal opposition emerged in
Guinea during or since the November attacks-
Nevertheless, Toure
seems intent on a purge, probably including a
government shake-up. Many Guineans already
have been arrested, and at least four Europeans.
Last week's abrupt expulsion of West German
nationals was followed this week by a roundup of
23 Western mining employees, including 11
Americans. These men were summarily tried and
sentenced by a judge for "subversive" activities,
but later were granted full amnesty by presiden-
tial decree and released. Toure claimed subordi-
nates had taken action without his knowledge.
Despite Toure's assurances, these recent abrupt
and arbitrary moves have added to the growing
nervousness among Conakry's foreign com-
munity. Toure's actions also have lost him some 25X1
of the sympathy he gained abroad following the
November attacks.
The suspicion is growing among some mod-
erate African states that Toure desires materiel
support in order to bolster his internal position
rather than to stave off new aggressions. Nigeria
thus far appears reluctant to accede to an urgent
request for troops made by Toure about 20 De-
India: Opposition Electoral Alliance
Three of the principal opposition parties
have formed an alliance to contest the national
elections beginning on 1 March. Prime Minister
Gandhi, on the other hand, has said that her party
will not enter into any country-wide electoral
coalitions.
The newly formed opposition alliance dem-
onstrates that the desire to defeat Mrs. Gandhi
can transcend ideological differences. The coali-
tion consists of the right-of-center Organization
Congress Party, the right-wing Hindu nationalist
Jana Sangh Party, and the leftist Samyukta So-
cialist Party (SSP). In the recently dissolved
523-member lower house of parliament, the Or-
ganization Congress was the largest opposition
party, with 63 seats; the Jana Sangh and SSP held
33 and 17 seats, respectively. In announcing the
alliance on 3 January, the three parties said that
they intend to support a single, agreed candidate
in each constituency.
The alliance suffered an initial setback when
the right-wing, pro - free enterprise Swatantra
Party refused to join. The Swatantra, whose 35
parliamentary seats had made it the second largest
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opposition party, reportedly wanted a more com-
prehensive arrangement, including a basic plat-
form supported by all parties to the alliance in-
stead of a simple agreement to back each other's
candidates. There remains, however, the possibil-
ity that the Swatantra may decide to join or
cooperate with the alliance.
Mrs. Gandhi's statement on 29 December
that her Ruling Congress Party will form no na-
tionwide alliances probably was a disappointment
for the pro-Soviet Communist Party of India
(CPI), which had expressed interest in arranging
some kind of electoral collaboration with the
Ruling Congress. Her announcement, however,
Islamic Conference: Another Try
The recently concluded conference in Kar-
achi of Islamic foreign ministers is being touted
by Saudi Arabia as the triumph of King Faysal's
long-espoused policy of Islamic solidarity, despite
evidence that disunity prevailed and substantive
accomplishments were negligible. Saudi Arabia
has sought to use such conferences to enhance its
prestige against neighboring radical Arab regimes
and to rally international Muslim support for the
Arab position in the Middle East. Iraq, Syria,
Southern Yemen, and the Sudan boycotted the
meeting, arguing that it was being held under the
leadership of reactionary governments.
A permanent Islamic Secretariat-to be
based in Jidda-was finally established after much
haggling over its duties, size, and budget. Tunku
Abd al-Rahman, former prime minister of Malay-
sia, was named Secretary General. The future of
does not preclude ad hoc cooperation in indivi-
dual contests.
Furthermore, it is possible that there could
be some form of electoral cooperation between
the Ruling Congress and the Dravida Munnetra
Kazhagam (DMK). The DMK's strength is located
almost entirely in the southern state of Tamil
Nadu, which it now controls. Here Mrs. Gandhi's
party is very weak, and the DMK's principal com-
petitor is the opposition Organization Congress.
The DMK and the Ruling Congress were allied
against the Organization Congress in the munici-
pal elections held in Tamil Nadu on 28 December.
Additionally, the DMK, like the CPI, frequently
supported Mrs. Gandhi on national issues in the
recently dissolved arliamen.
the Secretariat is in doubt, however, because
those opposed or lukewarm to its establishment
will probably delay contributing to its operating
budget. Proposals to create an international bank
and news agency under Muslim control were also
discussed and shelved and probably will not be
heard of again until the next conference, sched-
uled for September in Kabul.
Although the final communique contained
some anti-US comments it was a relative) bland
document.
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WESTERN HEMISPHERE
Brazil: Negotiations for Diplomat's Release
Negotiations continue for the release of
Swiss Ambassador Bucher, kidnaped a month ago
by terrorists.
Late last week, the Popular Revolutionary
Vanguard terrorists sent the government a new
list of 70 names, including 24 new ones for those
prisoners on the first list the authorities had re-
fused to release for various reasons. On Monday
the justice minister said that nine of the 24 re-
placements were unacceptable because they had
been sentenced to long prison terms, or had par-
ticipated in previous kidnapings; he said that one
already was free. The government communique
asked the abductors to submit substitute names
for these prisoners; the terrorists complied on
Tuesday. On Wednesday, the government ac-
cepted five of the nine substitutes, leaving only
four names to be resolved.
The terrorists have backed down at every
crucial point since they kidnaped the bachelor
diplomat on 7 December. They dropped their
original demands for publication of communiques
in the press and for free railroad transportation,
and have yielded when the administration refused
to release prisoners they originally wanted freed.
The terrorists' backpeddling will probably
Ambassador Bucher Prior to Abduction
strengthen the hand of those military and security
officials who advocate a hard line against making
concessions to the terrorists to ensure the safety
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Cuba: 1971--Year of Productivity
In a year-end address Fidel Castro renewed
his recent demands for greater efficiency in the
coming year and hinted of repressive measures for
laggards and dissidents. He continued his practice
of giving a name to the new year by labeling 1971
the "Year of Productivity." His failure to offer
suitable inducements to the workers, however,
and his admission of serious economic short-
comings suggest that the title for 1971 represents
wishful thinking rather than a strong probability.
Castro acknowledged that Cuba again faces
its annual shortage of cane cutters in the sugar
harvest and that 15,000 volunteers from Havana
would again have to be recruited to serve in the
interior for three months to satisfy critical labor
needs. At the same time, he said that shifting the
workers to the interior for agricultural work must
not cause a drop in nonsugar industrial produc-
tion in Havana. This practice contributed signif-
icantly to production problems in 1970; last
August the labor minister promised such transfers
would be minimized in the future.
Castro also announced that the "long
awaited" bill against "parasitism and vagrancy"
would be discussed with the workers beginning on
10 January. The bill is aimed at curbing the
alarming rate of absenteeism and also at com-
bating the increasing rate of school dropouts. I n a
speech to the same assembly, Armed Forces Min-
ister Raul Castro estimated the number of chil-
dren between 6 and 16 who drop out of school to
be 300,000 to 400,000 and said that a new
Committee on Human Resources would have as
Chile: Government Maintains Momentum
President Allende shows no signs of lagging
in his program to produce major changes in Chile
before effective opposition develops.
At his New Year's reception for the diplo-
matic corps, Allende quoted the late Pope John
one of its major tasks the solving of the dropout
problem. Youths who leave school prematurely
and do not become productive members of soci-
ety have long been a special irritant to the Castro
regime. Fidel's latest tactic, following two un-
successful programs, is the massive creation of
trade schools for unemployed dropouts and for
those lagging far behind in school work.
The regime's growing concern about Cuban
youth in general is reflected in the complete over-
haul of the structure of the mass organization for
young people begun last month. Some of the
measures adopted were: the formation of a new
Federation of Intermediate Level Students for
those in junior and senior high school and tech-
nological institutes; the splitting off of the Uni-
versity Student Federation from the youth arm of
the Cuban Communist Party (PCC); and the re-
organization of the "Pioneers"-formerly the PCC
youth arm's organization for children under
12-as an autonomous entity.
The major revamping of the national labor
organization-also begun last month, the reshuf-
fling of the youth groups, and the hint of new
repressive laws are unlikely to provide the moti-
vational spark that Castro is seeking. Indeed,
several of the measures constitute a step back-
ward rather than forward. They are a gauge of
Castro's frustration over his inability to improve
the economic situation and will do little to help
make 1971 the "Year of Productivity " 25X1
XXIII on coexistence in response to a gracious
tribute from the Papal Nuncio. Other moves bear
out Allende's expressed intention of trying to
keep the traditional ties while increasing relations
with Communist governments.
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On 6 January Chile announced the establish-
ment of diplomatic relations with Communist
China, becoming the first country in South Amer-
ica to do so. There has been a small Chinese trade
mission in Santiago for more than five years.
Although trade is minimal, Peking has shown an
interest in buying Chilean copper directly instead
of through West European markets. The prompt
break in relations by the Chinese Nationalist Gov-
ernment apparently did not bother the Chileans.
They are showing greater caution as they move
toward recognition of East Germany, however, in
order not to jeopardize unnecessarily economic
relations with West Germany.
Foreign Minister Almeyda announced on 5
January that a special envoy will advise Bonn of
the decision to reach a consular agreement with
East Germany very soon, with diplomatic rela-
tions shortly thereafter. There have been similar
efforts to reassure other West European countries
and Japan that the new Chilean policies are de-
signed primarily to "break US domination of the
Chilean economy," and to strike a new balance in
which the US will participate along with other
investors at a reduced degree. The Dutch Govern-
ment, however, has announced that it will not
conclude an economic cooperation treaty with
Chile at this time because there are not sufficient
guarantees for investments.
In an interview last week with the Soviet
New Times, Allende maintained his low-key atti-
tude on the USSR, but along with emphasis on
the uniqueness of the Chilean experiment in
building socialism, he praised Soviet society as
"a reliable bulwark of peace throughout the
world."
On 4 January Allende issued a decree of
amnesty freeing from imprisonment, detention,
and hiding more than 40 leftist extremists
charged with such common crimes as robbery and
kidnaping. As in an earlier amnesty for extremists
charged with violating internal security laws,
many of those affected belong to the radical
Movement of the Revolutionary Left (MIR).
Allende has shown surprising favoritism toward
the MIR since he took office, to the annoyance of
some members of his governing Popular Unity
(UP) coalition to which the MIR does not belong.
French revolutionary theorist Regis Debray, an
admirer of the MIR, will join Allende's press staff.
Debray went to Chile last month when Bolivia
freed him after nearly four years in prison for
involvement with Che Guevara's guerrillas.
The UP's strongest member, the Communist
Party (PCCh), particularly opposes the influence
of the MIR, but it is moving with its usual skill to
consolidate its own power. Communist leaders
were instrumental in convoking a UP National
Assembly this week to prepare for the municipal
elections in April. The PCCh is particularly eager
to revitalize the thousands of local UP com-
mittees, most of which it controls. Communist
officials have proven more intransigent than
Socialists in carryin out stringent new economic
measures.
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Uruguay: Prospects Improving For Freedom of Hostages
The publication this week of the Tupamaros'
political manifesto by a Montevideo daily was a
significant step toward fulfilling the terrorists'
conditions for release of US agronomist Claude
Fly. The guerrillas ask that the document be
published by major media in the capital in
exchange for Fly, who was kidnaped on 7 August.
The newspaper's action follows promulgation of a
government decree relaxing censorship laws.
Previously, the administration had forbade all
mention of the Tupamaros or their manifesto.
Although the government has not penalized the
paper for its action, which technically is still a
crime, no other daily has yet followed this lead. If
the administration takes no punitive action by the
beginning of next week, however, other papers
seem likely to print the document.
Originally the Tupamaros demanded the re-
lease of scores of prisoners in exchange for the
hostages, but they have gradually scaled down
their conditions in the face of the government's
refusal to negotiate. The Tupamaros lost consider-
able sympathy by their murder of one US hostage
in August. They have gained little from their
sequestering of the other two, and now appear
increasingly ready to accept a face-saving formula
for the release of the American.
The other hostage, Brazilian consul Gomide,
may still be held even if Fly is released. Gomide's
wife has been attempting to raise one million
dollars in Brazil for his ransom. If her effort fails,
the Tupamaros may hope to negotiate directly
with the Brazilian Government in hopes of gain-
ing meaningful concessions.
Central American Common Market Crisis Worsens
A proposed Honduran economic decree
darkens the already grim outlook for the Central
American Common Market (CACM).
The decree abrogates multilateral agreements
on free trade and taxes and authorizes bilateral
arrangements. The move, a virtual withdrawal
from the Market, follows El Salvador's refusal to
sign a proposed modus operandi-on which the
Central Americans had labored all last year-
designed to meet Honduran complaints of un-
equal benefit from CACM membership.
The survival of CACM after this latest blow
depends in large part on the state of demoraliza-
tion among the Central American leaders. El Sal-
vador, which has benefited substantially from the
union, would be happiest to see a continuation of
it without its enemy, Honduras. Nicaraguan Presi-
dent Somoza, who was already pushing for a
special meeting on 11 January of the Central
American foreign ministers to rescue the modus
operandi, may plead with Honduras to postpone
official publication of its decree until such a con-
ference can be held.
I n the effort to patch the damage to CACM
resulting from the war in 1969 between Honduras
and El Salvador, members have overcome similar
impasses. Patience on all sides is wearing thin,
however, and hope of a union that includes the
continually feuding Ell Salvador and Honduras is
diminishing. A glimmer remains, nevertheless, in
Somoza's tireless efforts to keep them talking,
and in decisions by Costa Rica and Guatemala to
call retaliatory charges on Honduran goods
"deposits and bonds"-which presumably are
ref u n dable-rather than duties.
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