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February 19, 1971
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Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY State Dept. review completed DIA review(s) completed. Secret 19 February 1971 No. 0358/71 Copy N2 45 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 25X1 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 CONTENTS (Information as of noon EST, 18 February 1971) Page FAR EAST Indochina: The Many Fronts of War . . . . . . . . . . . . . . . 2 Long Tieng, the Key to Success in North Laos . . . . . . . . . . 2 The Cambodians Carry On . . . . . . . . . . . . . . . . . . . 3 Peking Promises Continued Support . . . . . . . . . . . . . . . 4 Politicking in South Vietnam . . . . . . . . . . . . . . . . . 5 USSR: Plan Directives Are Announced . . . . . . . . . . . . . . 6 Poland Tries to Appease Its Consumers with Price Cuts . . . . . . . . 7 Romanian Party Woos the Workers . . . . . . . . . . . . . . . . 8 European Communities: Economic and Monetary Union . . . . . . 10 Geneva Arms Control Talks Resume . . . . . . . . . . . . . . . 11 Soviets Hint Disenchantment with Brandt Government . . . . . . . 12 MIDDLE EAST-AFRICA Middle East: Negotiations . . . . . . . . . . . . . . . . . . . 13 Palestinians to Hold National Meeting . . . . . . . . . . . . . . 13 .Jordan: Clashes Erupt Anew . . . . . . . . . . . . . . . . . . 14 Hostilities Hurt Egypt's Economy More Than Israel's . 15 Pakistan's Military Assistance to Arabs Leveling Off . . . . . . . . 17 India-Pakistan: Relations Sour . . . . . . . . . . . . . . . . . 18 INDIA: The World's Largest Democracy toGn to the Polls In March Recent Developments in Chile . . . . . . . . . . . . . . . . . 20 Guyana's Prime Minister to Nationalize Bauxite Industry . . . . . . 21 NOTES: USSR; Yugoslavia-Egypt; Italy; Finland; Guatemala; Uruguay; Panama; Argentina SECRET Page i WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 O-n%-,A1'\J1 I ayNinh ---~, SECRET Kufipang Speu. -- Page 1 WEEKLY SUMMARY 19 Feb 71' Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 5iEUKE'l' FAR EAST Indochina : The Many Fronts of War South Vietnamese forces pushing into south Laos to cut the Ho Chi Minh Trail are encounter- ing increasing enemy resistance. Moreover, there are many signs that the Communists are preparing for much heavier fighting in the coming weeks. Ground fighting in the Laos operation so far has been relatively light, probably reflecting cau- tion on the part of both the North and South Vietnamese. The Communists have rarely been willing in recent years to pay the high price of head-on opposition to allied units supported by massive air and artillery firepower; so far their reaction to this operation has been no exception. They have harassed advancing South Vietnamese units and thrown up barrages of antiaircraft fire against allied aircraft, but enemy infantry units generally have fallen back deeper into Laos, or simply avoided combat. This has enabled the South Vietnamese to cut one important link in the Ho Chi Minh Trail complex, and they are approaching the main north-south artery that passes near Tchepone. Hanoi probably has little hope of avoiding substantial disruption of its seasonal effort to move supplies, but it no doubt wants to prevent the South Vietnamese from achieving the kind of success that would strengthen Saigon's confidence in its ability to contain the Communists as US forces withdraw. Indeed, Hanoi may think there is a chance of inflicting the kind of setback on South Vietnamese forces that has evaded the Communists in South Vietnam for so long. There- fore, Hanoi is not likely to let the operation run on for much longer without a major fight. At the same time, Communist commanders in South Vietnam are reacting predictably to the ARVN drive into Laos by calling for stepped-up attacks. This could lead to a few showy actions, possibly with sapper activities in some of the larger cities, but there is no persuasive evidence of enemy plans for a major counteroffensive. Long Tieng, the Key to Success in North Laos The Communists have put heavy military pressure on government forces around the Long Tieng complex, and more attacks seem to be in prospect. General Vang Pao appears to have the situation at Long Tieng under control for now, following a costly early-morning attack by the enemy on 14 February. An estimated two North Vietnamese companies overran an artillery site on the southwest edge of the Long Tieng valley. From that position, the Communists shelled US installations and the base residential area, destroy- ing the main supply warehouse, the diesel fuel depot, and some housing. The electrical power station, the air operations building, and Vang Pao's home-which took a direct hit-were damaged, but can be repaired. The airstrip and the main gasoline and ammunition depots escaped damage. The extent of government casualties is un- certain, but at least 11 irregulars were killed and a number of civilians injured. Some of the injuries occurred when a supporting US air strike dropped bombs short of its target, hitting an irregular position. Communist losses are also uncertain, but government patrols report that at least 21 of the enemy have been killed. Some 1,400 reinforcements have been posi- tioned around Long Tieng, particularly along the high ground from which the enemy mortar attack came. On 16 February irregulars established some new outposts northeast of Long Tieng and re- occupied the mobile group headquarters position about ten miles northeast of the town that had been lost on 7 February. So far, the morale of the irregulars does not seem to have suffered appreci- ably as a result of the Communist attacks. Most of the civilian population of the Long Tieng valley has been evacuated, with the people moving to smaller villages south and west of Long SECRET Page 2 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET nmunist-held loc a ~ if. to emergency has had little visible effect, but it is expected to facilitate conscription and add a note of austerity to the Lao scene. The Cambodians Carry On Government leaders in Phnom Penh, the armed forces, and the Cambodian people seem to have accepted stoically Lon Nol's illness and his temporary treatment abroad. The transfer of his responsibilities to Acting Prime Minister Sirik Matak was accomplished in a calm and orderly manner, indicating a general willingness to respect Lon Nol's appeal for stability and unity during his recuperation. In this same context, Matak and other key officials apparently can be expected to honor Lon Nol's request that no cabinet changes be made for the time being. The Cambodian leader's absence fortunately has coincided with a lull in significant enemy military actions throughout much of the country, as the Communists have been limiting their activi- ties to minor harassing attacks against scattered government positions and against main lines of communication. At the same time, the South Vietnamese Army (ARVN) dry-season offensive in eastern Cambodia obviously has helped to ease military pressure on the government, to disrupt the movement of Communist troops and supplies through the country, and to improve the morale and confidence of Cambodian Army officers and men alike. ARVN armor and ranger troops in the Chup rubber plantation area in Kompong Cham Prov- ince have continued to meet determined enemy opposition to their clearing operations north and east of the plantation. SECRET Tieng. There were no signs of panic among the departing civilians, however. To the north of Long Tieng, the irregulars' position at Ban Na, which contains several key artillery emplacements, has received continuing heavy enemy fire. The site is surrounded by well- entrenched enemy troops. On the political front, the cabinet on 12 February endorsed the Security Council's recom- mendation that Prime Minister Souvanna declare a state of emergency and authorize the army to take measures, including a curfew, to tighten security on a nationwide basis. ? Government-held..ln. atiOn Page 3 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 ar,v~1~ 1 The sharpest action to date in the ARVN campaign reportedly occurred at the beginning of the week near Snuol, in southern Kratie Province. An ARVN infantry unit claimed to have repelled successfully a heavy enemy mortar and ground assault there and, with the aid of air strikes and artillery support, to have killed 203 Communists at the cost of ten of their own killed and 50 wounded. Little contact with the enemy was re- ported from other ARVN operational areas. A Major Economic Concern Recent reports from Phnom Penh have pointed up the government's continuing problem of having an abundance of rice to sell but no way of getting it to market. In rice-rich Battambang Province, for example, warehouses are reportedly brimming with last year's stocks, while a large new crop is being gathered. Since the fighting started, the difficulties in moving surplus rice to the ports at Phnom Penh and Kompong Som have grown progressively worse. Transport costs from Battambang to Phnom Penh have skyrocketed because of Com- munist interdiction of the rail line, truck short- ages, and growing insecurity along Route 5. When rice does reach the capptal, the export problem still remains. Insecurity along the Mekong has caused sharp reductions in calls by large foreign ships. Moreover, despite an agreement with Bang- kok late last year, no rice for export has moved overland to Thailand. The government does not wish to forfeit badly needed foreign exchange this year and wants especially to avoid defaulting on its export commitments abroad. Unless the security of transportation can be substantially improved, however, the impact on Cambodia's 1971 exports will be even more disastrous than last year. Peking Promises Continued Support Peking has escalated its rhetoric regarding allied cross-border operations in Laos, but there is no suggestion of change in its effort to avoid direct military involvement in the war while the current ground rules remain in effect. -_____~ 25X1 however, that any move into northern Laos might be considered a direct threat to China, and this or a "further deterioration of the situation" could enhance the possibility that Chinese troops might be brought into the conflict. Peking has throughout the conflict shown a continuing concern for the protection of its own border, the 17th parallel in Laos as a demarcation line. ~Chup Kompong Cham 7 CAM RaDIA M battle Snuul o Miles a 550997 2-71 CIA SECRET OUTH VIETNA Page 4 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 or.Unr, 1 but this may be a means of conveying Chinese sensitivity regarding areas near its border, rather than representing a trip wire that would auto- matically trigger Chinese intervention if the line were crossed. Peking in any case -probably does not expect the allied incursion to push above the parallel. The Chinese continue to be prepared to pro- vide needed material support for the Indochina war effort. An agreement on 12 February con- cluded with a North Vietnamese delegation in Peking provides for economic and military aid beyond that called for in an annual aid pact signed last fall. The same day, the Chinese issued a new government statement pledging to take "all effective measures" to aid their Indochinese allies and made the usual reference to rear-base support for North Vietnam. The 12 February -statement referred to the Laos operation in terms of a "menace to China," and warned that the Chinese "will not remain indifferent to it." This statement was followed up with a People's Daily editorial on 14 February. Referring to a US explanation that the action in southern Laos does not pose a threat to China, the editorial claims that, on the contrary, the "new war venture... definitely poses a grave threat to China." The suggestion that the allied opera- tions threaten China itself is a clear escalation of Chinese rhetoric regarding the war. This formula- tion was carefully avoided by Peking during the Cambodian incursions last spring and has been absent from Chinese propaganda for several years. Mammoth rallies in support of these and other Chinese pronouncements on the situation in Indo- china, which are similar to those held after the Cambodian incursions, have been conducted in several major cities in China. Peking's most recent statements and other authoritative comment on Indochina since the beginning of the month have attempted to drama- tize its concern for China's southern border as well as its eagerness to throw its support behind Hanoi. Peking's pronouncements do not commit it to any particular course of action, however. Indeed, its comments have emphasized the point that the Chinese expect the "people of the three Indochinese countries" to continue to bear the brunt of the actual fighting. Politicking in South Vietnam It appears that the powerful An Quang Bud- dhist organization will throw its support behind Big Minh, chief opposition contender for the presidency in this year's election. 25X1 t o vast majority o n uang mon sin a cities and provinces are strongly opposed to another term for President Thieu and are eager to support Big Minh. They regard Thieu as a political enemy of the An Quang and believe that Minh would be more widely popular. As a Buddhist and as a southerner, Minh has built-in appeal that should draw many votes in South Vietnam, even though he lacks any kind of political machine. A well-organized Buddhist effort to get out the vote for Minh could go a long way toward offsetting the advantages that Thieu enjoys through his control of the gov- ernment apparatus. SECRET Page 5 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 SECRET EUROPE USSR: Plan Directives Are Announced Moscow's manner of publicizing the draft directives for the five-year plan to be presented at the 24th party congress, which opens on 30 March, bespeaks the unsettled state of affairs among the Soviet leadership at present. The TASS announcement of the draft was notably ambiguous on when and how the Soviet Communist Party central committee approved the directives, raising the possibility that a plenum was not held. Given the difficulties the collective leadership encountered in working out the draft plan, it may have been unwilling to risk a free- wheeling debate on the eve of the congress. At the same time, failure to hold a plenum would mark a departure from the procedure followed in 1958 and 1966, when long-term plans were ap- proved by the central committee in plenary sessions. The last time a draft five-year plan was an- nounced without the convocation of a plenum was in January 1956-in the midst of the contro- versy over the Stalin issue and Khrushchev's grow- ing struggle against the "antiparty" group. That draft was in effect rewritten less than a year later as the political battle in the Kremlin heated up. Brezhnev's. signature on the central com- mittee resolution approving the recent directives reinforces the impression that the endorsement was voted by proxy-perhaps by a rump session of the central committee or possibly only by the full and candidate members of the Politburo. In the post-Stalin period, such decrees have appeared only over the imprimatur of the central com- mittee itself. Brezhnev's public association with the plan is the more striking in the absence of any refer- ence to Kosygin, who as premier should have presented the draft directives to the central com- mittee. Brezhnev's action clearly smacks of a move on his part to represent himself as the Soviet Union's foremost leader, but it also in- volves risks for him. He is now publicly associated with decisions on matters that have been very divisive in the past, and criticism of the plan or changes in it will tend to reflect on him per- sonally. Indeed, the guidelines depart from Brezh- nev's own previous formulations in one important respect: the call for the production of consumer goods to grow more rapidly than that of producer goods. Regardless of its real impact-or lack of it-on the Soviet economy, this is a departure from Brezhnev's statement in his June 1970 elec- tion speech that the production of producer goods would continue to grow faster during the coming five-year period. A preliminary analysis of the plan directives indicates no significant shifts in resource alloca- tions for 1971-75. The planned rates of growth for the two major sectors-industry and agricul- ture-are only moderately above those attained in the 1966-70 plan period. To achieve even a modest improvement in over-all growth, however, the regime must depend upon a marked improvement in the efficiency with which labor and capital are used. The pro- jected rate of growth of the labor force and of investments in new plant and equipment are to rise somewhat less rapidly than during the last half of the 1960s. The investment goals for agri- culture remain the same as those promulgated by Brezhnev at the central committee plenum last July; the jump from 77.6 to 82.2 billion rubles can be attributed primarily to price adjustments for new construction. Within the industrial sector, the power in- dustry, in particular atomic power, and the machine-building, chemical, petrochemical and gas industries are to be developed "at a stepped- up rate." The 1975 goals for petroleum and SECRET Page 6 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET natural gas are extremely ambitious and are dependent upon the successful development of new fields and the construction of pipelines in Siberia. In this connection, another plan goal is the further development of the country's eastern regions. The directives place unusual emphasis on bettering the lot of the consumer, but the few statistics given suggest a somewhat lower rate of progress in consumer welfare as compared with 1966-70. In particular, average money incomes of urban workers and peasants and outlays for pensions, medical, and other communal services are to increase by an annual rate that is about one fourth lower than achieved during the past five years. The leadership's concern over speeding the- pace of scientific and technical progress is evident in the plan directives, although no grand strategy is revealed to ensure attainment of this goal. The directives promise action on several fronts, how- ever, including an improvement in management and planning, greater use of computers, and the expansion of "commercial, scientific, and tech- nical relations with the industrially advanced capitalist countries." The economic reform was mentioned only briefly to set 1975 as the new date for the reform's completion in industry and service enterprises. Poland Tries to Appease Its Consumers with Price Cuts The surprise rollback of food prices to the levels prevailing before the December riots sug- gests that Polish workers continue to exert great pressure on the government. This decision was a significant retreat by the Gierek regime, but the government announced it was the final concession that would be made to the workers in hopes of ending recurrent labor disturbances. Premier Jaroszewicz said that the price changes, to be effective I March, were made possible in part by a long-term credit of an un- specified amount granted recently by the USSR. He implied that price cuts are predicated on in- creased domestic production as well as on imports of food, and he emphasized the anticipated growth in meat production expected in the last half of 1971. The government said there could be "absolutely" no more price cuts or wage increases because there are no additional reserves to spend on them and that they would be inflationary. The policy to hold down wages was put to the test from 11 to 15 February when textile workers in Lodz struck for a 15-percent pay hike and improved working conditions. After being told their demands were unrealistic, they report- edly returned to their jobs, but press reports on 16 February suggest that there was worker unrest in other parts of Poland. The Gierek regime has taken many steps to improve the lot of consumers. Reduced prices for some consumer goods authorized in mid- December will be retained. Recent government measures to provide pay raises for the lowest paid workers and some increases in family allowances and old-age pensions are to be continued. Prior to the price cuts the parliament further amended the 1971 plan and budget to benefit consumers. The plan now provides for an addi- tional increase in the wage fund of $125 million (at the noncommercial rate of exchange) to cover anticipated increases in wages as a result of post- ponement of the unpopular incentives program. Taxes were raised to provide budget subsidies totaling about $40 million for additional social and health services. Planned 1971 increases in workers' incomes now total approximately one billion dollars. The revised plan also provides for larger investments in consumer goods industries and in services. SECRET Page 7 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET Recently announced personnel changes indi- cate that party chief Gierek is determined to replace officials responsible for mistakes in eco- nomic policy. The chairman of the state planning Romanian Party Woos the Workers President Nicolae Ceausescu capped nearly two months of intensive contacts among the people with a party central committee plenum on 10-11 February where he castigated bureaucrats for failure to communicate with the masses. Ceausescu clearly has been aiming at preventing the growth of serious popular dissatisfaction such as that which set off the December riots in Po- land, and he has taken advantage of the situation to propose reforms. Popular grumbling over food shortages and higher food prices, particularly in the free mar- kets, sent Ceausescu out to the provinces where he praised workers and farmers for their contribu- tions to the nation's past economic successes. He promised them improved living standards in the future. This pledge was reiterated in his plenum speech when he stated that the new five-year plan envisages a 20-percent increase in real wages by 1975 over the 1970 level, as well as additional measures that will provide the earliest and largest increases for low-income families. Ceausescu devoted the major part of his speech to the need for rejuvenating the trade unions, which he said should no longer be merely an arm of the party but should become a demo- cratic force in society. The plenum began work on new laws for the trade unions to make them the basis for "organized consultations." To give workers a role in decision-making, Ceausescu pro- posed that the workers' assemblies be al- lowed to discuss and to disavow the decisions of enterprise management. Sacking of the managers, commission and another deputy premier closely identified with economic policy were dismissed, as were the ministers of foreign trade and of the food industry. however, would still be the prerogative of higher authorities. Ceausescu also proposed reforms for the party and government. He said that the existing practice whereby a man holds both party and government positions is not mandatory, thus hint- ing at the possibility of further decentralization. He added that nominations for higher office in the party and government henceforth must be debated and must receive support at the worker level. Finally, Ceausescu declared that the execu- tive committee and the Council of Ministers should publish their most important debates and decisions-a pronouncement reminiscent of Polish leader Gierek's new method of doing things. The plenum made the most important high- level personnel changes in the party and govern- ment since late 1969. Manea Manescu, a compe- tent technocrat who is the head of the Economic Council and already a party secretary, was added to the party's permanent presidium. Ion Iliescu, former first secretary of the Communist Youth Union, replaced Virgil Trofin on the secretariat. The ambitious Trofin-at one time heir apparent in the party-retains positions on the permanent presidium and on the executive committee, but he was removed from the chairmanship of the Union of Agriculture Production Cooperatives and was named instead as head of the trade unions. His political position is questionable; clearly he has lost power and prestige, but Ceau- sescu may be giving him a second chance in a new, more active trade-union role. ~ SECRET Page 8 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 SECRET USSR: The oft-postponed republic party con- gresses preparing for the 24th CPSU Congress are at last getting under way. The Estonian Congress opened on 17 February; the Tadzhik session opened the next day. During the last month, six of the republic congresses had been moved back from their late January - early February opening dates (the Georgian session was postponed twice). The delays can be primarily attributed to a desire to have the republic congresses discuss the re cently published draft directives for the next five-year plan, but they also reflect the lack of coordination in Moscow during the preparations for the 24th CPSU congress. There is no informa- tion on the proceedings at any of the republic sessions under way, but recent developments suggest that there may be significant personnel changes in at least the Estonian and Tadzhik leaderships. YUGOSLAVIA-EGYPT: President Tito is paying his first call on Egypt's new leaders this week, trying to shape again the kind of warm personal ties he had with the late Nasir. In preparation for his trip, Tito corresponded with the four major powers dealing with the Middle East crisis, imply- ing that he would act as intermediary if it was desired. Tito will no doubt address most of his efforts to the subject of how to reduce the mili- tary strength and political influence of the great powers in the Mediterranean, in conjunction with the question of a settlement of the Arab-Israeli war. It is quite likely that in this context he will try to get a new Egyptian commitment to "nona- lignment" as an alternative policy to great-power politics in the basin. ITALY: Prime Minister Emilio Colombo has ap- parently secured considerable popular and politi- cal support for his formula to resolve the long debate, accompanied by sporadic outbreaks of violence, over the choice of a capital for Calabria, Italy's southernmost region. Reggio Calabria, the largest city, will be the seat of the regional assem- bly and will get a new steel mill providing 12,000 jobs. Catanzaro will be the regional capital and the site of its executive body. A new university will go to the third rival city of Cosenza. Recent government progress on social re- forms combines with the ebbing of violence in southern Italy to provide a respite in political tensions. Continuing bitter rivalry among center- left leaders over the presidential election next December suggests, however, that the respite may SECRET Page 9 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET European Communities: Economic and Monetary Union Compromises on all sides made possible the Council's agreement last week to begin movement toward a full-fledged economic and monetary union. Achievement of that goal within the next decade would be almost tantamount to political unification, but even last week's resolution- which leaves difficult questions of implementa- tion still to be decided-has given a psychological boost to the integration movement. In the final stage of the projected union there would be free movement of labor, goods and services, and capital among the Community countries, as well as the establishment of a de facto common currency by means of an "ir- revocable" fixing of intra-EC exchange rates. Dur- ing the initial three-year stage, to begin immedi- ately, existing Community !Institutions will be used to bring about closer coordination of eco- nomic policies, further moves toward tax har- monization, a narrowing of the range of fluctua- tion permitted in exchange rates among EC cur- rencies, and the drafting of proposals for a monetary cooperation fund. Extensive coordina- tion of the member countries' monetary and >'~Afiscal policies will be necessary if the contem- plated narrowing of exchange-rate margins is to succeed. As an adjunct to the monetary union resolu- tior,, the Council has invited the EC central banks to strengthen their cooperation. In addition, the Council moved to improve coordination of short- term economic policies and adopted a medium- term policy program. A mechanism for medium- term. balance-of-payments assistance-with some $2 billion in credits at its disposal-has also been established. Although the Council resolution does not specify new institutions to manage the projected union, it does imply that'new bodies or changes in existing ones may eventually be necessary for effective control as the member states lose some independence in determining national economic policies. The EC Commission is tasked with pro- posing any needed changes prior to the end of the first stage. Should agreement not be reached by 1975-that is, within two years after the end of the first phase-on the institutional and other provisions necessary to ensure "parallelism" be- tween economic and monetary measures during a second stage, the initial monetary cooperation measures may be terminated. This escape clause was inserted principally to bridge the gap between French reluctance to spell out now the details of later stages and German insistence on binding arrangements for policy coordination. The two- year "grace period" will also make it possible for the UK and the other membership candidates to participate in working out the ultimate shape of the union. The Community is now expected to focus on translating the intent of the Council resolution into implementing regulations and procedures. Moreover, central-bank coordination for the pur- pose of narrowing exchange-rate fluctuations will be watched closely for its effect on independent policy making by Community members. Presuma- bly also, the difficult monetary questions attend- ant on Britain's joining the EC will now receive greater attention. In any case the compromises made last week in order to achieve the basic decision in principle would seem to indicate gen- eral acceptance of the need to move-even if gradually-to endow the Community with its own economic and monetary "personality." SECRET Page 10 WEEKLY SUMMARY 25X1 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET Geneva Arms Control Talks Resume The disarmament conference at Geneva will be entering its tenth year on 23 February when the delegates of the 25 participating nations re- convene for what should be an active-if not especially productive-session. The primary topic is expected to be controls on chemical and bio- logical weapons (CBW), but the 12 nonaligned nations represented at the talks may push hard for work on verification techniques of more gen- eral application. Present indications are that the conferees are not likely to resolve the nearly two-year impasse between the Soviets' draft convention seeking a comprehensive ban on CBW activity and the UK draft prohibiting only BW agents. Most of the participants appear to favor comprehensive treat- ment of CBW, but the US, with some help from the Japanese, has scored some telling points with a series of papers pointing up the difficulty of enforcing a CW ban given the present state of limitations in safeguards techniques. The non- aligned, moreover, dislike the verification provi- sion in both the UK and Soviet drafts-i.e., appealing to the veto-prone UN Security Council for investigation of complaints. The question of a comprehensive test ban (CTB) on nuclear weapons has received increasing attention at Geneva as a result of both the stra- tegic arms limitation talks and the continuing development of more sophisticated nuclear hard- ware. The conferees realize that short-term pros- pects for a CTB are dim because Moscow remains FINLAND: Approximately 70,000 metalworkers went out last week in the largest nationwide strike since 1956. With the workers' overwhelm- ing rejection of the state mediator's second wage offer, both the union and management anticipate a replay of the two-month metal industry strike of 1950. At stake, in addition to a larger wage settlement than the national economic stabiliza- firmly opposed to any form of on-site inter- national inspection. They will probably con- centrate their attention on related but less im- portant measures, such as exploring the possi- bility of guaranteed seismic data exchanges under UN auspices. Canada and Japan will again seek discussion on prospects for a treaty that would prohibit underground testing above a magnitude of about 4.5 on the Richter scale, a level beyond which most advanced states can easily detect any nuclear detonations. The nonaligned 12 and Italy at the talks last year directed renewed attention to the feasibility of various schemas for general and complete dis- armament (GCD). This topic provided much of the original impetus for the arms control con- ference-the USSR and the US submitted separate GCD proposals at the initial session in 1962-but interest has dropped off as agreements have been negotiated on specific, "partial" measures, such as the Nonproliferation Treaty. Work on GCD is likely to cut across normal caucus lines at Geneva, but substantive progress in the SALT bilaterals seems a prerequisite to any new movement in that direction. Sweden late in 1970 offered the conferees a study of verification options potentially ap- plicable to the broad range of disarmament proo- lems. The paper may generate considerable com- ment at the 1971 sessions. tion program would countenance, is political con- trol of Finland's largest union. The Social Demo- crats and the Communists presently share power in the union executive, and the latter hope to capitalize on the strike both to attract more sup- port at the next union congress and to increase their strength in the labor movement, only re- cently reunified. SECRET Page 11 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 SECRET )viets Hint Disenchantment with Brandt Government Last week Soviet diplomats stationed in widely separated Western capitals inspired a round of bizarre press stories suggesting that Mos- cow had become disenchanted with the Brandt government and was now thinking about coopera- tion with the conservative opposition Christian Democrats (CDU/CSIJ). Although the stories were later disavowed, it seems likely that they were part of a Soviet diplomatic maneuver aimed at putting pressure on the Brandt government. Moscow would like Bonn to break the linkage it has established between a Berlin agreement and ratification of the Soviet - West German treaty, and to enter substantive negotiations with Pan- kow on Berlin matters without a covering four- power "umbrella" agreement. Soviet diplomats have in private tried to maneuver Bonn into this position since last fall, but until now they had avoided any action that might mar the appearance of Soviet - West Ger- man harmony. On 2 February, however, the deputy chief of the Soviet Embassy in Washing- ton told a Hearst correspondent that Moscow's "honeymoon" with the Brandt government was over because the Chancellor had reneged on his alleged "commitments" to Moscow. He added that Moscow was no longer greatly interested in gaining West German ratification of the treaty, because Bonn in any event could not repudiate the treaty's provisions. The Soviet official also implied' that Moscow might resume propaganda attacks on Bonn, and that it was even toying with the idea of cooperation with the CDU/CSU. Two days later a Soviet diiplomat in Stockholm held forth in a similar vein with a German correspond- ent, alleging that the liberal Brandt government was even more dangerous to Soviet interests than the previous Christian Democratic governments had been. The reports were promptly picked up by the West German press and almost as promptly-on 7 February-denied by the Soviet Embassy in Bonn. The circle was then closed on 9 February when the two sources of the original stories refuted their earlier statements. Disavowal of the press reports suggests that the Soviets believed their purposes had been served once the stories had been given full play. The reports may, in fact, have struck a sensitive nerve among those Bonn officials, including Brandt's chief negotiator Bahr, who regard time as a precious commodity in Ostpolitik. Brandt, nevertheless, continues to maintain publicly that he feels under no time pressure, that his govern- ment's negotiating stance on Berlin remains firm, and that overall there has been no deterioration in Soviet - West German relations. As proof, a friendly, though dated, New Year's letter from Kosygin to Brandt was surfaced. Meanwhile, Pravda came out with an edi- torial on 13 February which seemed as much an endorsement of Brandt's Ostpolitik as an ad- monition that his policies might founder unless he presses more vigorously. Moscow probably hopes that this recent maneuvering will persuade the West Germans that Soviet patience is more limited than Bonn may realize. By suggesting that Brandt's political charm may soon fade in their eyes, the Soviets probably hope to persuade the West German Government to begin working out the terms of a Berlin agreefent on its own, or failing that, to press the Allies to reduce their demands for an accord. Moscow must calculate that the four- power Berlin talks have reached the crucial draft- ing stage, and that Bonn's views will have a measurable influence on the outcome of this exercise as well as on determining the course of the parallel talks between West and East German representatives. Instead, however, Moscow has only enhanced West German suspicions that there are divisions among the Soviet leadership over German policy. It may perhaps have also irritated Brandt by publicly embarrassing him, and its maneuvers may encourage a greater caution in SECRET Page 12 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET MIDDLE EAST - AFRICA Middle East: Negotiations The Israeli Government has re- acted negatively to a personal effort by Ambassador Jarring to overcome the current stalemate in the nego- tiations. Press reports from Jerusalem in- dicate that, at its cabinet meeting on 14 February, the government had de- cided to reject Jarring's initiative; at the urging of Foreign Minister Eban, however, it was decided to avoid out- right public rejection and merely to ignore the proposal. Although there are conflicting accounts of the details of Jarring's proposal, it reportedly calls on Israel to agree to withdraw from all of Sinai, except for Gaza, and on Cairo to recognize Israel's terri- "The Answer Is `No' - Now, Let's Hear The Suggestioi# was ready to discuss "arrangements for peace," if Israel would make a similar commitment. torial integrity and to agree to a permanent peace. The Israelis have publicly accused Jarring of ex- ceeding his authority and reportedly have said that he is authorized to act only as a go-between and is not empowered to present his own pro- posals. According to press reports, all members of the cabinet are in agreement that Israel must demand an answer as to whether Egypt is willing to make peace with Israel. The Egyptian press reports that Cairo has responded to Jarring's initiative after asking for and receiving explanations regarding his proposal. The details of the Egyptian response have not been published Ac- cording tot e semiof icial a,'-Ahram, Egypt said it The Israelis are clearly embarrassed by the apparently forthcoming responses Jarring has been receiving from Cairo. A positive response by the Egyptians to Israel's demand for a clear-cut statement on a peace agreement would deepen this embarrassment. If and when the Israelis are forced to consider seriously the question of with- drawal, even if only from Sinai, a major domestic political crisis can be expected. The National Reli- gious Party, which almost split over the question of returning to the Jarring talks, might desert the government over the withdrawal issue. This would leave the Israel Labor Party and its allies with 64 of 120 seats in the Knesset, a margin regarded by political observers as too narrow to be work- Palestinians to Hold National Meeting Deep policy differences between various fac- tions in the Palestine liberation movement could surface and produce still further discord during the eighth session of the Palestine National Council scheduled to begin in Cairo on 27 Feb- ruary. SECRET Page 13 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET PLO CENTRAL COMMITTEE MEMBERS Left to Right (seated): Kamil Nasir; Yasir Arafat; Nayif Hawatmal; Yasir Amru; George Habbash fedayeen have suffered in Jordan to Fatah's at- tempts to create a unified guerrilla movement. Within Fatah itself Yasir Arafat has been accused of exacerbating the situation in Jordan by ill- timed and ill-advised appeals for Arab support against the regime of King Husayn, and by mak- ing other inflammatory public statements despite requests that he remain silent. Arafat, however, has so far been successful in avoiding meetings at which he and other leaders might be called to account by second-echelon officials of Fatah. Fatah, the dominant group among the feda- bear the brunt of attacks upon current fedayeen yeen organizations, could soon find itself the tar- policy thus may decide to boycott the conclave in get of attacks by the others, with extremist Cairo. If enough of them stay away, the council groups led by the Popular Front for the Libera- meeting could be canceled for lack of a quo- Arafat and other leaders who are likely to tion of Palestine attributing recent setbacks the rum. Jordan: Clashes Erupt Anew Yet another round of fighting sputtered their personnel and heavy weapons from three of along throughout the week in Amman as the the seven hills of Amman. To this end the govern- Jordanian Government successfully continued to ment appears to have been successful. 25X1 press its campaign to force the fedayeen to with- draw from bases in the capital. The government's immediate goal in its latest drive against the fedayeen was to remove SECRET Page 14 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET By 17 February there was a partial return to normality in Amman as shops reopened and the government began to release Palestinians who had been arrested at the outbreak of fighting. Civilians in some so-far uncleared areas were reported, however, to have fled their homes in expectation of new operations. The fedayeen militia was said to be out in strength and fully armed in still other districts of the city. Further fighting could erupt any time the government decides to move to clear other areas of fedayeen control. Hostilities Hurt Egypt's Economy More Than Israel's The Six-day War of 1967 and the subsequent military confrontation have retarded economic growth in Egypt but probably have stimulated it in Israel. Israel's gross national product (GNP) has grown about 12 percent a year since the war. At the time of the war, Egypt's centrally controlled economy was already stagnating for lack of foreign exchange and shrewd direction. Initially, war losses depressed the Egyptian GNP further, and it was only after a couple of years that output began to grow by three to four per- cent a year. Recovery has been retarded by war- related losses of foreign exchange earnings that have been offset only partially by foreign mone- tary aid. Moreover, the conflict has distracted the attention of Egypt's leaders from economic de- velopment, reduced the availability of Western aid, and diverted Soviet aid to military purposes. Little development of defense industries has oc- curred. Foreign assistance has greatly relieved the defense burden of both adversaries. Crisis-induced aid has covered about half the increase in defense costs in Israel and perhaps as much as two thirds in Egypt. Aid to Israel has consisted of cash gifts and purchases of bonds on concessionary terms by sympathizers living in other countries as well as special credits from the US Government. Aid to Egypt has been composed of cash transfers from the governments of Libya, Kuwait, and Saudi Arabia plus military supplies from the USSR, for which payment has not been made. The outlook is for a continuation of brisk economic growth in Israel and modest expansion in Egypt. Barring large-scale warfare, however, the growth of defense expenditures will slow markedly in both countries. SECRET 25X1 Page 15 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 SECRET Pakistan's Military Assistance to Arabs Leveling Off Pakistan's assistance program to Arab coun- tries-which consists primarily of supplying train- ing personnel-appears to be leveling off. The US defense attache in Amman recently reported that the Pakistani antiaircraft battalion would be out of Jordan by early March and that the Pakistani air force advisory grour, which had numbered at least 100 officers and enlisted men, would be reduced in strength to a half dozen. At the same time, Pakistan is increasing the number of mili- tary personnel-now nearly 1,500-to other Arab countries. Pakistan began its military assistance efforts in earnest in late 1966 when it sent a small team of army personnel to Jordan. An air force advi- sory team was later assigned to an air base in northeast Jordan where it has been training Jor- danian Air Force F-104 pilots and aircraft main- tenance personnel. Islamabad's military aid to Jordan reached its peak in December 1969 when it sent an antiaircraft battalion, which may have included as many as 600 men, to provide protec- tion at a time when Israel was bombing Jordan. The reductions about to take place may reflect the completion of the air force training program and Pakistan's belief that such assistance is no longer needed. In any case, Pakistan would like to avoid becoming involved should there be a repe- tition of last September's fighting. Saudi Arabia also has a sizable contingent of Pakistani military advisers. Some 500 Pakistani air force personnel are stationed in Saudi Arabia at seven air bases. Their principal duties involve supervision of maintenance work and the training of mechanics and pilots, but they also fly the Lightning fighters supplied by the UK. Some 100 more Pakistanis supply logistical and ad- ministrative aid to the Saudi army and navy. Pakistani air force instructors are providing tactical training to Iraqi MIG-21 pilots and may be flying Iraq's SU-7s. Because the Pakistanis do not have either aircraft in their inventory while the Indians do, a major motive may be a desire to familiarize themselves with the types of aircraft they may someday face in combat. SECRET Page 17 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Advisory assistance on a small scale is being provided to the Trucial States and perhaps to Libya and Syria. The bulk of this assistance, as for other Arab nations, is given to the air forces of these countries primarily in the form of basic flight training. Pakistan's military schools also train a num- ber of Arab foreign nationals. Students from all these countries are enrolled in the Pakistani Air Force Flying School, the Army Command and Staff School, and in navy schools. Pakistan's military aid program provides the Arab nations with good training at low cost. For its part, Pakistan demonstrates its solidarity with fellow Muslim states, gains valuable military expe- rience, and obtains needed foreign ex- change. 25X1 India-Pakistan: Relations Sour Domestic politics in both India and Pakistan continue to frustrate efforts to defuse the dispute arising out of the recent hijacking and destruction of an Indian airliner in West Pakistan. In the meantime, disagreement over constitutional issues has moved the two parts of Pakistan closer to formal separation. On 30 January? two self-styled Kashmiri "freedom-fighters" hijacked to Lahore, West Pakistan, an Indian plane on a domestic flight and demanded the release of Kashmiri separatists re- cently arrested in India. Despite what Pakistani authorities claim was a serious effort by them to save the plane, the hijackers destroyed it on 2 February after having released the passengers and crew earlier. Indian politicians, campaigning for parlia- mentary elections in early March, have seized on the issue. Prime Minister Gandhi has publicly ac- cused the Pakistani Government of collusion in the hijacking, and a Hindu nationalist party has organized attacks on Pakistani diplomatic instal- lations. Meanwhile, the Indian Government, in an increasingly harsh series of notes, has demanded both compensation for the plane and extradition of the hijackers. Pakistani overflights of India- some 60 a week-have been banned until Is- lamabad complies. Pakistan has refused to pay compensation, and the hijackers-who were granted political asylum in order to save the passengers and crew of the aircraft, according to the Pakistanis-have become heroes in West Pakistan. West Pakistani politicians-maneuvering for position in the forth- coming National Assembly-have praised the hi- jackers and attacked India's continued occupation of the disputed state of Jammu and Kashmir. At this time, compensation would be politically diffi- cult and extradition almost impossible for Is- lamabad. Reports of troop movements in both coun- tries have further heightened tensions, but it still appears that neither country wants a military confrontation. East Pakistanis reacted quite differently from West Pakistanis, fearing that the furor over the hijacking would be used to prevent or delay the assumption of power by an East Pakistani - dominated civilian government. President Yahya Khan may have allayed their suspicions somewhat by announcing that the National Assembly will meet on 3 March to begin drafting a new constitu- tion. Z. A. Bhutto, leader of the party that won over half the West Pakistani seats in the assembly, has said, however, that his party would not attend assembly sessions. He charged that the East Paki- stanis-who will have an absolute majority-plan to force through their own constitution without regard for West Pakistani views. SECRET Page 18 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 0r,Vnr, I The main point of disagreement is-an East Pakistani plan for provincial autonomy that would leave the central government responsible only for defense and foreign affairs. East Paki- stani leader Mujibur Rahman has reiterated his unwillingness to compromise on this program. rejected. President Yahya, who must validate the new constitution, could eventually face a choice be- tween unacceptable alternatives. On the one hand, he would have an East Pakistani constitu- tion that neither he nor most West Pakistanis wanted. On the other he would face the threat of East Pakistani secession if the constitution were WESTERN HEMISPHERE SECRET Page 19 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 SECRET Recent Developments in Chile The Allende government appears to want increased commercial relations with Communist countries but has not yet made significant prog- ress. Negotiations for the trade agreement signed with Cuba on 12 February in Santiago reportedly did not go smoothly. In a tough speech last week, Interior Minis- ter Toha reaffirmed the government's determina- tioi to expropriate all farms over the minimum siz;: established under the 1967 agrarian reform law, and he did not rule out the possibility that legislation might be enacted to permit even more extensive expropriations. In this speech Toha im- plicitly criticized the extremist Movement of the Revolutionary Left (MIR), which the overnment has recently allowed almost free rein. 25X1 The agreement for trade amounting to $20 mil- lion annually from 1971 through 1973 is smaller than Chileans had predicted earlier. Commercial discussions with the USSR have been uneven. Following the recent visit of a rank- ing Soviet trade official, Chilean Minister of Mines Cantuarias remarked that the Soviets were "as bad as the worst capitalists." Allende's handling of the opposition con- tinues to pay off. In return for the government's backing off from insinuations that members of the former Christian Democratic (PDC) adminis- tration were involved in the plot that led to the death of the army commander in chief, the PDC apparently will soft pedal its opposition on cer- tain sensitive issues. An additional factor is the government buyout of the PDC-controlled Zigzag publishing house, Chile's largest, which is to be transformed into a state agency while allowing Zigzag to continue to produce some of its own publications. SECRET Page 20 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 S.C,UKL I Guyana's Prime Minister to Nationalize Bauxite Industry Prime Minister Burnham seems about to na- tionalize the Canadian-owned Demerara Bauxite Company (DEMBA), a subsidiary of the Aluminum Company of Canada (ALCAN).F_~ Burnham should have little trouble securing the two-thirds majority necessary to approve the measure. The Guyanese are not yet well prepared to run DEMBA's holdings. The government has just begun to look for new markets, equipment sources, and shipping contracts for a government- owned bauxite industry. Burnham and a number of government officials followed up their attend- ance at the Commonwealth Prime Ministers' Con- ference in Singapore by visiting Belgrade on 1-4 February. The group discussed possible Yugoslav technical. assistance to Guyana, and although no agreement was reached, a Yugoslav technical group will visit Guyana, probably in April. The group also visited India, but qualified Indian technicians for assistance to Guyana are unlikely to be available. The three large private companies, two of which are partly controlled by ALCAN and Kaiser Aluminum, probably would not cooperate with Guyana. The fourth, a small Indian-owned firm, probably would have few technicians to spare. The Guyanese will face additional problems in a go-it-alone program; the difficult task of finding buyers will be only one of them. Al- though mining in Guyana was once fairly eco- nomical, its costs are now high compared with those of Guyana's major competitors. The ore must now be dug from deposits averaging about 110 feet in depth, whereas other major producers can mine near the surface. Moreover, Guyanese bauxite is more expensive to ship because of the long distance between the mines and seaport load- ing facilities, which requires reloading. Although Burnham may be beginning to realize that he will encounter many problems in trying to run the industry, he appears bent on making the ef- GUATEMALA: Political violence over the past two weeks has included at least nine assassina- tions, several attacks against low-level security officials, and the serious wounding of wealthy 25X1 industrialist and government supporter Jorge Kong. Although Communist leaders had recently put a halt to terrorist activity following several successful government operations against the in- surgents, pressure from the rank and file for vengeance apparently has resulted in its approval for a resumption of activity, SECRET Page 21 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 ~LJnu1C1, I URUGUAY: The Tupamaros' public declaration that the Brazilian consul will be released when emergency security measures end was a clever gimmick that has contributed to a setback for the government. A terrorist communique indicated that the family of Consul Gomide has paid the demanded ransom-the Tupamaros asked for $1 million but probably received only about one fourth of that amount--and tied his release to the scheduled expiration of emergency measures on Saturday. The government has strenuously avoided any appearance of meeting terrorist de- PANAMA-US: Relations have hit one of the peri- odic low notes following the arrest on 6 February by US narcotics agents of a minor Panamanian official whom the Torrijos government charged had been lured into the Canal Zone for this pur- pose. The government protested sharply and has publicly committed itself to obtaining the man's return. The incident may come to a head this weekend in the face of a US decision to ignore the Panamanian demand and fly the prisoner out of the Zone to face trial in Texas. Torrijos realizes the emotional and nationalistic potential of the case and the eagerness of the students to take to the streets in anti-US demonstrations. He may find it hard, therefore, to resist the temptation to mands, however, and on 16 February requested a 45-day extension of the security decree. On Wednesday, the permanent legislative committee, reflecting the sentiment of a Congress jealous of its own prerogatives, turned down the President's appeal. The government's campaign against the Tupamaros had suffered a mild re- versal earlier in the week as well; the Supreme Court ruled that the administration's plan to try terrorists in military rather than in civilian courts use the occasion to test the efficacy of anti-US demonstrations as a bargaining tool. A number of Panamanian officials, including President Lakas, are urging restraint, and there are a number of economic considerations that may temper Torrijos' reaction. The government is cur- rently attempting to secure US loans to alleviate a serious budgetary difficulty. Large-scale demon- strations would jeopardize the loans and risk the loss of tourist revenue from the pre-lenten Carni- val festivities now under way. The Panamanians have terminated the Peace Corps program and may take further steps-perhaps expelling a mem- ber of the US Embassy-in order to save face over ARGENTINA: President Levingston appears to be gaining support within the armed forces as a result of growing discontent with the military hierarchy among middle-grade officers. There is no evidence that army commander General Lanusse is preparing to remove his long-time friend Levingston from office, but rumors to that effect in the past month appear to have created a growing "choosing up sides" mentality within the army. Discontent within the armed forces has existed for some time, but the President's nation- alist line plus his recent efforts to demonstrate that he is not simply the puppet of the military junta may now have provided a leader around whom the dissatisfied can rally. There is no evi- dence, however, that Lanusse has lost control. On the domestic political front, two pro- vincial governors were removed this week and there are widespread rumors that several other governors as well as a few cabinet ministers will be dismissed. The one new governor named so far is a man of Peronist leanings, indicating that Levingston intends to name replacements who not only support his nationalist line but who are more closely attuned to the political currents in SECRET Page 22 WEEKLY SUMMARY 19 Feb 71 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 25X1 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Secret Secret Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY Special Report India: The World's Largest Democracy To Go To The Polls In March Secret N? 38 19 February 1971 No. 0358/71A Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 25X1 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 l-AJ1N r 11JJ11N 1 Li.L Nftoi Prime Minister Indira Gandhi has called parliamentary elections a year before the constitution requires them, calculating that the chances of boosting her party's seats in the lower house are better now than they will be in 1972. Mrs. Gandhi is publicly attributing her government's mediocre performance to her party's loss of its parliamentary majority following the split in the Congress Party in late 1969. She is presuming that the elec- torate will be more sympathetic to this argument now than it might be next year should an insufficient rain- fall result in poor crops, and unem- ployment and inflation continue to mount. Furthermore, she fears that another year of political instability at both state and national levels would serve to assist opposing parties in their struggle to forge a viable opposition. To challenge her at the polls, a four- party opposition alliance was formed last month, but it lacks a common program and is held together only by antipathy toward the prime minister. Despite her party's customary stress on "radical socialism" as the best means of accelerating much-needed economic and social development, Mrs. Gandhi is basically a centrist, and the party's election manifesto is restrained. Mrs. Gandhi has established a solid footing as the leader of India's largest party and has no rivals on a national scale. If she substantially improves her parliamentary position and thereby reduces her dependence on support from numerous minority parties, the prospects for a stronger central government are enhanced. If she suffers a reverse or makes only slight gains, indecisiveness and instability will continue to prevail. In either case, Mrs. Gandhi's future policies are not likely to deviate far from past emphasis on an independent foreign policy and relatively mild socialism at home. Background ship and age 21 by 1 January 1970. (The 10-12 million becoming 21 after this date will be disen- Indian voters will go to the polls between 1 franchised because of the lack of time to update and 10 March to elect India's fifth lower house of electoral rolls.) Approximately 60 percent of the parliament (Lok Sabha) in 23 years of inde- electorate are expected to cast valid votes-58 pendence. About half the nation's 560 million percent exercised their franchise in 1967, and the people meet the suffrage requirements-citizen- percentage voting has been rising since the first general election in 1952. Special Report CONFIDENTIAL 19 February 1971 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 V V1N r 11JrJINl 1 11-IL Distribution of Elective Seats by State and Union Territory JAMMU KASHMIR I a=" Special Report STATES Andhra Pradesh 41 Assam 14 Bihar 53 Gujarat 24 H yana Pradesh 4 9 Jammu and Kashmir 6 Kerala 19 Madhya Pradesh 37 Mysore 27 Nagaland 1 Orissa 20 4151,6-k 13 am7`Nadu 39 NEPAL SIKKI ~Ithmnn~iu* I CONFIDENTIAL Kabul* f / UNION TERRITORIES Delhi 7 Goa, Damao and Diu 2 Manipur 2 Tripura 2 Andaman and Nicobar Islands 1 Chandigarh 1 Dadra and Nagar-Aveli 1 Laccadive, Minicoy and Amindivi Islands 1 Pondicherry 1 WEST BENGAL CEYLON BOUNDARY REPRESENTATION IS NOT NECESSARILY AUTHORITATIVE A-;SAM NAGALAND 1 I SLA N NO9 BURMA 19 February 1971 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Ifte CONFIDENTIAL `0 The new Lok Sabha will consist of 518 elec- tive seats apportioned among India's 18 states* and nine union territories on the basis of popula- tion. Because state boundaries are fixed largely along linguistic lines, there is considerable dispar- ity in the size of the states. Thus, the two most populous states, Bihar and Uttar Pradesh, to- gether claim more than 25 percent of the Lok Sabha seats. Voting will be staggered over the ten-day period, and in the larger states or where there may be difficulty in maintaining order, the ballot- ing will extend over several days. There will be more polling booths than ever before, and the government claims no voter will have to walk more than 1.2 miles to cast his vote. Ballot count- ing will begin only after all polling is completed, and final results are expected on 13 March. The new parliament will convene in late March in time to ratify the budget for fiscal year 1972, which begins on 1 April 1971. Lok Sabha candidates run from single- member constituencies, and they need not be residents of the state in which they run. Constitu- encies are too big for effective representation-the average consists of about one million people. Furthermore, India's multiparty system produces aberrations in the electoral results; more than three candidates run in most constituencies, and a plurality of 35 to 40 percent or less can produce a winner. One hundred fourteen (or 22 percent) of the elective seats in the Lok. Sabha are reserved for the so-called Scheduled Castes and Scheduled Tribes-the Untouchables who rank at the bottom of the socioeconomic order and the tribes who live outside the mainstream of Hindu society. Although this provision ensures these underpriv- ileged groups a parliamentary representation proportionate to their percentage of the over-all population, in 23 years it has failed to do much to alleviate the disadvantage of being born into these groups. In addition, a special constitutional provision empowers the president to appoint two members from the Anglo-Indian community and one from the isolated North East Frontier Agency. India's four previous parliamentary elections have been relatively peaceful and well organized. Under the scrutiny of a permanent, autonomous Election Commission, the election machinery ap- pears to operate honestly, and charges of malfea- sance against election officials are rare. Nonethe- less, some ballots are tampered with, and there are estimates that, in the past, up to 10 percent of the votes have been bought. Other election irregu- larities-stuffed boxes, intimidation, bogus voters, voting "early and often"-can be expected in some constituencies, particularly in those tight contests where money is available. Despite this, it is generally believed that India's national elections are a valid index of popular sentiment. Early Election- Why? For the first time India's parliament has been dissolved one year in advance of its regular five-year term. Prime Minister Gandhi apparently has decided that her chances of winning a parlia- mentary majority of at least 262 seats are stronger now than they will be in 1972. When the Lok Sabha was dissolved in December, Mrs. Gandhi's party held 228 seats. Indian politics experienced a major shake-up during the last year and a half. From indepen- dence in 1947 to November 1969, the centrist Congress Party had dominated Indian politics, sheltering a wide range of political factions under a single roof. Following the death of Prime Minis- ter Nehru in 1964 and the succession of his daughter to the prime ministership in 1966, *The former union territory of Himachal Pradesh was elevated to full statehood on 25 January 1971. Special Report - 3 - 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 CONFIDENTIAL ~Illlllw Ruling Congress Party . . . . . .. . . 228 Frequent supporters of Dravida Munnetra Kazhagam (DM K) . 24 Prime Minister Gandhi Communist Party of India (CPI) . . . . 24 Opposition's Core of Support Organization Congress Party . . . . . . 65 Swatantra Party . . . . . . . . . . . . 35 Jana Sangh Party . . . . . . . .. . . 33 Communist Party of India/Marxist (CPM) 19 Samyukta Socialist Party (SSP) . . . 17 Praja Socialist Party (PSP) . . . . . . . 15 United Independent Group . . . . . . 25 Unattached Independents . . . . . . . 24 Indian Revolutionary Party (BKD) . . 10 Vacancies . . . . . . . . . . . . . . . 3 Nonpartisan speaker . . . . . . . . . . 1 Total membership 523 (New Lok Sabha will consist of 518 elective and 3 appointed-521-seats) however, the party met increasing difficulty in withstanding the challenge from smaller opposi- tion parties with specific regional, religious, or communal appeals. In contrast with the declining popular sup- port for her party, Indira Gandhi, now 53, has grown in power, self-confidence, and determina- tion. In late 1969 she precipitated a split in the Congress Party that severed her faction of center- left "progressives"-the Ruling Congress Party- from the center-right old guard-the Organization Congress. Personal rivalries, however, rather than ideological differences were a major factor in the split. Throughout 1970 Mrs. Gandhi's Ruling Con- gress Party maintained a working majority only through heavy reliance on the pro-Soviet Commu- nist Party of India (CPI), the small South Indian Dravida Munnetra Kazhagzlm (DMK), and various independents. She hopes to dispense with the inhibition this imposes by increasing the number of Ruling Congress seats to more than the 262 required for an absolute parliamentary majority. The Ruling Congress' detailed analysis of its country-wide strength in late 1970 indicated troublesome organizational weaknesses, par- ticularly in heavily populated north and central India. Yet, party officials were encouraged both by the loss of strength suffered by the rival Or- ganization Congress (OC)-especially in the two states under OC control-Mysore and Gujarat-- and by Mrs. Gandhi's apparent mounting popu- larity. If, however, the 1971 rainfall is insuffi- cient, unemployment spirals, and inflation con- tinues, Mrs. Gandhi would face an even more dissatisfied electorate in 1972. Thus, early elec- tions are clearly a gamble, but calculated risk has become a familiar feature of Mrs. Gandhi's poli- tical style. The Opposition Mrs. Gandhi's decision for early elections, announced on 27 December, climaxed weeks of speculation and some preparatory efforts by op- position parties. In early January a four-party opposition alliance was formed by the Organiza- tion Congress and three other parties: the Hindu nationalist Jana Sangh, the radical socialist Samyukta Socialist Party (SSP), and the conserva- tive Swatantra. The alliance represents a mixed bag of con- flicting ideologies, ranging from the conservative right to militant socialism. Its main purpose is to prevent a splintering of the opposition vote, and its only unifying goal is to deny power to Mrs. Gandhi. The partners' original intent was to sup- port a common candidate in most constituencies, but in many areas their competing aspirations could not be reconciled. The Organization Congress is the senior part- ner of the alliance. Since it split away from the Congress, it has not fared well, mainly because it lacks rank and file and has been weighed down by aging leaders whose principal activity following the split seemed to be debating the morality of aligning with parties holding incompatible views. Expediency won out when it became evident that Special Report -4- 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 NWO, CONFIDENTIAL ikwo such electoral arrangements were the only means of winning even minimal representation in the next parliament. The Swatantra Party was reluctant to join the alliance and briefly held out for a common platform, which it argued would enhance the al- liance's credibility and obviate disagreements if the partners were to participate later in a coali- tion government. Swatantra relented, however, because of the prospect that, with its power largely confined to three states, it would be hard pressed even to retain the 35 seats it won in 1967. Additionally, its identification with private enter- prise, laissez-faire, and the vested interests of for- mer princes and prominent industrialists runs counter to the leftist, antiestablishment trend that has recently been evident in elections in Ceylon and Pakistan, as well as in scattered state contests in India. The most dynamic of the four partners is the Jana Sangh, which won slightly less than 10 per- cent of the popular vote in 1967 and is the only party that has regularly increased its vote in re- cent elections. Its staunchly nationalistic platform has the greatest appeal to conservative, orthodox Hindus, and thus the urban middle-class, salaried workers, tradesmen, and small landowners form the core of its support:. A dedicated cadre has helped it to prosper. Although the Jana Sangh may increase the number of seats it holds, it is unlikely to expand its base beyond the northern Hindi-speaking states. The Samyukta Socialist Party (SSP) is the more radical of India's -two main socialist parties, and its leadership is noted for opportunism-as illustrated by its willingness to join the rightist-or- iented alliance. The SSF' now heads its first coali- tion government, in Bihar State, but it is beset by internal wrangling and its prospects on the na- tional scene are bleak. The Marxist Communists (CPM) will com- pete independently and expect to improve their positions in Kerala and West Bengal, where they Special Report -5- 5 - are already entrenched. The CPM continues to are call for abandonment of the constitution, but ironically its policy still favors working within the system the party seeks to destroy. This incon- sistency has provoked sharp attacks from extrem- ists on the left as well as from the moderate Communist Party of India (CPI) on the right. Mrs. Gandhi made it clear that her party will not form a country-wide electoral alliance with any party in contesting about 450 of the Lok Sabha's 518 seats. The pro-Soviet CPI, which has been her most ardent supporter since the Con- gress split, had hoped to extract an alliance com- mitment that would enable it after elections to press for more leftist-oriented programs. Nonethe- less, the Ruling Congress and the CPI have formed electoral agreements in several states, repeating the cooperative strategy that worked successfully for them in elections in Kerala last September. In other states Ruling Congress leaders refused to defer to the CPI, and the two parties will com- pete. Electoral agreements have also been worked out with Mrs. Gandhi's other chief supporter, the DMK, a regional party with strength only in south India, principally in Tamil Nadu. The DMK has modified its earlier demand for outright separa- tism for Tamil Nadu. It now requests a maximum degree of autonomy for the states, but maintains its opposition to Hindi as the national language. Its generally reliable support in parliament has earned special favors, including New Delhi's more relaxed attitude on the language issue. Efforts to reach an understanding between the Ruling Congress and the more moderate of the socialist parties, the Praja Socialist Party (PSP), were fruitless. The Bharatiya Kranti Dal (BKD), another spin-off from the old united Con- gress Party, has opted against any national coali- tion, but has empowered most of its state units to forge local alliances. 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 CONFIDENTIAL .r~ Mrs. Gandhi is campaigning vigorously to project an image as champion of the common man. As the campaign has progressed, her style has moderated somewhat, assuming a tone of reassuring persuasion in contrast with an earlier emphasis on "radicalism."' The party's manifesto, too, is a relatively sober document that avoids specific promises and unrealistic goals. It restates well-known proposals for nationalization of gen- eral insurance, financial assistance to the rural poor, an expanded public sector, greater govern- ment participation in the import and export trade, and a nonaligned foreign policy. The em- phasis on practical goals and Mrs. Gandhi's recent assurances that her party does not advocate the abolition of private property rights are clearly aimed at winning the essentially centrist elector- ate. Mrs. Gandhi's speeches attempt to get maxi- mum mileage from her government's short and relatively insignificant list of recent accomplish- ments, including national iization of the 14 largest Indian-owned banks and passage of a Monopolies Special Report Control Act. She has also obtained some credit for her attempt to abolish the privileges and an- nual subsidies granted when the British departed India in 1947 to some 300 former rulers of princely states. When a constitutional amendment bill to terminate the princes' special treatment failed to pass parliament last September, Mrs. Gandhi backed a presidential order removing their privileges. In mid-December this move was in- validated by the Supreme Court. The privy purses constitute only a minor expense to the govern- ment, but the issue has given Mrs. Gandhi wide- spread publicity as a promoter of an egalitarian society. The Gandhi government is particularly vul- nerable on its record in economic matters. Un- employment is endemic in India, but in recent years it has developed into a potentially explosive political issue. Increasing numbers of educated unemployed are involved in urban violence and are potential recruits for the pro-Maoist Naxalite movement and other extremist groups that have seriously strained stability in parts of India. In rural areas, little effort has been made to alleviate the plight of the growing mass of landless labor- ers. The government has taken some limited, short-term measures to moderate inflationary pressures, but it has also contributed to increases in demand by liberalizing credit policies of the nationalized banks and by increasing wages of government employees when faced by actual or potential strikes. On balance, the lack of a parlia- mentary majority does not justify the govern- ment's failure to effect a number of policy changes that could have alleviated the generally stagnant investment climate in the private sector and stimulated activity in the lagging public sector. In addition to exploiting economic issues, the opposition has accused Mrs. Gandhi of exces- sive partiality toward the USSR, the domestic Communists, and the Muslims. Mrs. Gandhi re- taliates with charges that the opposition has no program of its own. The opposition parties are vulnerable on this score; in fact their individual election manifestoes reveal the difficulty they would have in working together. The opposition - 6 - 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 CON F1DFN'1'1AL campaign is essentially negative, stressing a need to prevent the country from proceeding further in "an authoritarian and antidemocratic direction" under Mrs. Gandhi's leadership. There are a number of places where Mrs. Gandhi faces special problems. In some cases po- tential trouble has been defused by direct action from New Delhi, but where regional parties or opposition leaders are particularly strong, the Ruling Congress has been less, successful, and the electoral outcome is impossible to predict. The governments of these two large states that span the heavily populated Hindi-speaking belt fell into opposition hands last fall. Although this development would appear to have made an early election risky for Mrs. Gandhi, it does allow her to try to reaffirm her presumed strength among the conservative, rural populace. Caste, factional, and community forces, rather than poli- tical ideology, have largE!ly determined the com- position of this vital bloc of 138 seats in the past. The outcome in Uttar Pradesh will be particularly important to Mrs. Gandhi because it is her home state, and it has been a major battleground be- tween the two Congress Party factions. She hopes to carry the Muslim and Untouchable minorities, which formed the backbone of the once-united Congress Party's electorate. This is one of India's most backward states, and Mrs. Gandhi's strategy of attacking the right might backfire here. Her strongest opposition is from the rightist-oriented alliance of princes-who still have substantial political influence-and the Hindu nationalist Jana :Sangh Party. Her state party organization is badly split, and this is one of the few states in which the Ruling Congress runs a clear risk of suffering defeat. 7 - Special Report -7- West Bengal West The problem of restoring stability to this key industrial state appears to defy solution. Demonstration in West Bengal More than 30 parties will contest simultaneous national and state elections on 10 March-unless a further deterioration in public order compels the government to postpone them. For the first time since independence, the government has been forced to call in the Indian Army to try to ensure relatively peaceful conditions for campaigning and balloting. The military is not trained to per- form this civic function, and its ability to stem the wave of murders and terrorist acts by rival extremist groups is questionable. Postponement of elections, however, would be considered a vic- tory for the terrorist Naxalites, who have vowed not to allow them, and would evoke a noisy protest from the CPM, the most powerful con- tender at the polls. This large south Indian state, under a Ruing Congress government, has long been troubled by a separatist movement in the underdeveloped in- terior region of Telengana. Mrs. Gandhi offered 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 CONFIDENTIAL the region a formula that would postpone a deci- sion on statehood until 1977, but the offer was rejected. The residents have organized their own political party and will contest the 14 seats from the area. This state also will hold simultaneous state assembly elections in which the ruling DMK hopes to regain its slowly ebbing power. One of Mrs. Gandhi's ablest strategists, C. Subramanian, has been working to establish a Ruling Congress foothold in the state. The DMK, which has co- operated with Mrs. Gandhi in New Delhi, was reluctant to surrender seats in its own homeland, but it eventually acquiesced. Kashmir has only six seats in the Lok Sabha, but activity in the state is of great concern to New Delhi. Over the last several years the political atmosphere in Kashmir has been more peaceful than at any time since the state acceded to India in 1947. The local government operates in har- mony with New Delhi, and until recently political activity among Kashmir-is opposed to the state's incorporation into India did not exceed tolerable limits. The Plebiscite Front, however, had not abandoned its position that the future status of Kashmir should be determined by a referendum. When the front announced that it would run candidates in the election for the first time, New Delhi began to worry that the vote would reveal considerable support for the front. During Mrs. Gandhi's visit to the state last December, she warned that the secessionist advocates would be stopped and insisted that Kashmir's accession to India was a closed chapter. Shortly thereafter the front was declared illegal under the 1967 Un- lawful Activities Act, and its members were pro- hibited from participating in elections as front candidates. Additionally, the most prominent Kashmiri, Sheikh Abdull'ah, has been barred from Kashmir for three months, and hundreds of front activists have been arrested. New Delhi is now confident that most of Kashmir's seats will be Special Report - 8 - retained by Mrs. Gandhi, but at the cost of abruptly halting a three-year experiment in the gradual liberalization of Kashmiri politics. In Communist-ruled Kerala, a CPI/Ruling Congress alliance is confidently awaiting the poll. Inveterate leftist V. K. Krishna Menon, who won a parliamentary seat in the last West Bengal by- election, will seek election from his native Kerala for the first time. His chances of winning the seat are fair. Mrs. Gandhi expects the Ruling Congress to do well in Maharashtra-home base of a key politi- cal figure, Finance Minister Y. B. Chavan. In the Bombay region, however, gains may be made by the Shiv Sena. Since its founding in 1966, this nationalistic, anti-Communist organization, which stands midway between a movement and a party, has made considerable gains by seeking to pre- serve the interests of Maharashtrians over south Indian immigrants, who are said to enjoy a dispro- portionate share of jobs in the state. Although Gujarat and Mysore are Organiza- tion Congress Party strongholds, the Ruling Con- gress may pick up some seats, in part because of the personal popularity of Mrs. Gandhi as well as because of the dissatisfaction of Organization Congress units over their party's decision to join forces with the rightists. The Ruling Congress did well in a recent series of by-elections in Mysore. A slight gain is also possible in the Punjab. The governing Sikh Akali Party generally sup- ported Mrs. Gandhi in New Delhi, but efforts to formulate a joint strategy in the state were unsuc- cessful. In neighboring Haryana, the predomi- nantly Hindu section of the formerly united Punjab, the Ruling Congress is expected to retain its majority despite well-organized Jana Sangh opposition. In the isolated northeastern state of Assam, the Ruling Congress is also expected to pick up a few seats, largely because opposition parties are so ineffective. Although Mrs. Gandhi inherited Rajasthan's Congress Party bloc 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 mo' CONFIDENTIAL i%W Two New Election Symbols for the Now-Split Congress Party Special Report Old United Congress Symbol in 1967 Election 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 CONFIDENTIAL Nor , following the split, it is questionable whether she can make gains there against an opposition that includes a number of princes and prominent busi- nessmen. Orissa is one of three states to hold concur- rent state and national elections. In early January the four-year-old Swatan-tra-Jana-Congress coali- tion government fell, and both parties pressed New Delhi for simultaneous state assembly elec- tions. The Ruling Congress and the locally ori- ented Jana Congress have discussed possible col- laboration-thus far inconclusively-and Mrs. Gandhi's prospects for increasing her representa- tion in this state are not bright. As for the races in India's generally small union territories, the Jana Sangh is likely to retain its hold in Delhi-the most important-while Mrs. Gandhi should hold her own in the others. Prospects Are for a Unique Election The separation of national and state elec- tions (except in three states) challenges the basis on which the united Congress Party and other major parties have operated since independence. Confronted with the rise of numerous non- Congress state governments following the setback of the still-united Congress Party in the 1967 elections and a weakened Ruling Congress govern- ment in New Delhi in 1970, Mrs. Gandhi con- cluded that the old style of patronage politics built around dual elections could no longer ensure success. She is now betting that national issues are capable of swaying substantial portions of the electorate. By asking the electorate to vote almost solely on national issues, she is hoping to bypass locally dominant, traditional groups who for- merly played the most important role. In the past, a candidate's stand on state and national issues was almost irrelevant, and he was elected largely because of his proven or potential ability to provide his constituency with ample government largesse in terms of agricultural credit, fertilizer, seeds, irrigation facilities, wells, Special Report roads, and schools. With almost 4,000 seats being contested in the past in the two simultaneous races, caste, linguistic, factional, and religious groups engaged in highly complex bargaining ar- rangements, swapping support for their various candidates. Until the 1971 results are in, one can only ponder whether the "new" politics has really taken hold. To win a majority Mrs. Gandhi must do well in the major cities where she has held few seats and among young people who are voting for the first time, and she must regain that segment of the Muslim minority that defected from Congress in the 1967 national election. The fight will be particularly stiff in those states where her party's organization is weak at the grass-roots level. The princes, who are smarting from her policy on the privy purse issue, could pose a serious threat in some 40 constituencies where they still retain power. Mrs. Gandhi has considerable advantages, however. She has better material resources than the opposition, including air transport for coun- try-wide campaigning, and she receives wide- spread media coverage. Although a Supreme Court ruling denied both Congress Party factions the use of the traditional symbol of yoked bul- locks, the Ruling Congress has the edge because of Mrs. Gandhi's national image as Nehru's daugh- ter and as prime minister during the last five years. There is no means of surveying pre-election trends among the mass electorate of 225 million rural, predominantly illiterate, tradition-oriented Indians who will determine the electoral out- come. Less obscure are the 50 million urban voters who are more or less modernized. This group appears to be increasingly dissatisfied with the government's performance in all spheres and is demanding relief from the confusion, petty maneuvering, and bureaucratic inertia that have characterized India's first experiment in coalition government. Despite the radical rhetoric from the podium and in India's free press, however, it _10- 19 February 1971 CONFIDENTIAL Approved For Release 2008/11/17: CIA-RDP79-00927AO08600010001-8 Approved For Release 2008/11/17: CIA-RDP79-00927A008600010001-8 1r+ CONFIDENTIAL appears that the vast majority of Indians are moderate centrists. Many objective observers expect Mrs. Gandhi at least to hold her own and possibly to win a few additional seats though falling short of an absolute majority. If the increase is large enough, she can lessen her dependence on as- sorted leftists, regionalists, and independents, and a stronger, more effective government-with cen- ter-left leanings-might emerge. If not, Mrs. Gandhi will continue to head the largest single party, but the government will lack the stability and decisiveness needed to grapple with India's overwhelming problems. 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