WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009200010001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 29
• Document Creation Date: December 21, 2016
• Document Release Date: September 17, 2008
• Sequence Number: 1
• Publication Date: October 22, 1971
• Content Type: SUMMARY

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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Secret
Navy review
completed.
State Dept. review
completed
Secret
22 October 1971
No. 0393/71
Copy NQ 14
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CONTENTS
(Information as of 1200 EDT, 21 October 1971)
India-Pakistan: Major Military Moves . . . . . . . . . . . . . . . . . . . . . 1
Communist China: Focus on Lin Piao . . . . . . . . . . . . . . . . . . . . 3
UN: China Debate Begins, Outcome Uncertain . . . . . . . . . . . 5
Indochina: North Vietnam; South Vietnam; Cambodia. . . . . . . . . . . . 5
South Korea: Down But Not Out . . . . . . . . . . . . . . . . . . . . . 11
Philippines: Marcos' Lease on Presidential Palace . . . . . . . . . . . . . . . 12
USSR-France: Brezhnev Tests His Wings . . . . . . . . . . . . . . . . . . 16
Soviet Politburo OKs Five-Year Plan . . . . . . . . . . . . . . . . . . . . 16
France: Restless Youth in the Assembly . . . . . . . . . . . . . . . . . . 17
Yugoslavia: Reform Breeds Reform . . . . . . . . . . . . . . . . . . . . 18
Sweden: Palme Primes the Pump . . . . . . . . . . . . . . . . . . . . . 19
Denmark: Krag Gets Running Start 20
Sudan: Numayri Strengthens His Hold . . . . . . . . . . . . . . . . . . . 21
Progress in Iraqi National Oil Industry . . . . . . . . . . . . . . . . . . . 21
Ceylon-USSR: Strains in Relations . . . . . . . . . . . . . . . . . . . . 23
Burundi: The President Strikes Back . . . . . . . . . . . . . . . . . . . . 24
Balaguer's Masterstroke . . . . . . . . . . . . . . . . . . . . . . . . . 25
International Developments: More Oil Talks; More Monetary Talks . . . . . . . 27
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Page i WEEKLY SUMMARY 22 Oct 71
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as inevitable.
I ndia-Pakistan: Major Military Moves
Although Prime Minister Gandhi and Presi-
dent Y'ahya have both reiterated that they do not
intend to start a war, military moves by both
countries have significantly raised the level of
tension. Both sides are in a high state of readiness,
and there is a growing danger that major hostili-
ties could result from miscalculation-the sudden
escalation of a local skirmish or fears by either
side of the other's intentions. Hostilities could
also follow increased successes by the guerrillas in
East Pakistan and a resultant attack by Pakistani
forces on the guerrilla bases in India, which in
turn could lead to an Indian response. Pakistani
efforts to infiltrate agents into Indian-held
Kashmir could also lead to war, as happened in
1965. Both countries have sharply stepped up
their accusations of provocative activity by the
other side, and there is a growing tendency by
both Indian and Pakistani officials to regard war
Indian newspapers have recently been head-
lining stories of Pakistani troops massing on the
border, and the Indians are taking measures of
their own. The Indian Defense Ministry told the
press that the key 1st Armored Division is moving
toward West Pakistan.
Page 1
The Indian military may well believe that
war is imminent.
the Indians have known
a ou a istans roop movements since at least 4
October. The delay in their reaction suggests that
there may be other reasons for their current ex-
pression of concern. By making it appear that the
only alternative is war, they could be trying to
force Western nations to increase pressures on
Yahya to find a political solution. New Delhi
could also be preparing for a Pakistani reaction to
the expected guerrilla offensive in East Pakistan.
Prime Minister Gandhi and other Indian offi-
cials insist that current Indian troop movements
are purely defensive, made necessary by Pakistani
moves. Mrs. Gandhi told a New Delhi press con-
ference on 19 October that India hopes to avoid
war, but she added that a withdrawal of Indian
troops from border positions is unlikely and not
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Will It Happen Again?
(Indian and Pakistani troops in the war of 1965)
plausible. She cited a reported "Hate India" cam-
paign among the people near West Pakistan's bor-
der area, and pointed out that a pullback by both
sides to normal positions would leave Indian
troops much farther from the border than Pak-
istani units. Mrs. Gandhi reiterated that she does
not share Yahya's stated willingness to meet with
her; Yahya, she said, should negotiate directly
with East Pakistan's elected leaders. Defense Min-
ister Jagjivan Ram told a political rally on 17
October that, if war breaks out, India will not
relinquish any territory it captures from Pakistan.
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In any case, India's moves are probably
viewed in Islamabad as an indication that New
Delhi is getting ready to attack and could well
spark further military preparations by the Pak-
istanis. As the number of troops facing each other
across the border increases and tensions grow
more acute, there is a rising risk of accidental war
growing out of a clash initiated by a local
commander.
President Yahya, according to Pakistan's
official news service, offered to withdraw Pak-
istani troops from forward border positions if
India would pull back its forces and cease pro-
vocative activities. Yahya made his proposal at a
meeting with Soviet President Podgorny during
the anniversary festivities in Iran last week. In an
interview with Le Monde, Yahya said he also told
Podgorny that Pakistan is conscious of India's
military superiority and has no intention of start-
ing a war.
may also have decided to let the current legal
proceedings against imprisoned East Pakistani
leader Mujibur Rahman remain in abeyance and
may even be having discussions with Muiib.F-
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Page 2 WEEKLY SUMMARY
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Communist China: Focus on Lin Piao
It is becoming more likely that the central
theme of the shadowy political drama in Peking
revolves around the future political role of De-
fense Minister Lin Piao. The possibility that a
sudden decline in the health of Mao's heir-desig-
nate is a factor that cannot yet be ruled out, but
the diminishing public attention accorded Lin in
recent weeks seems to go beyond what would be
required if his problems were purely physical.
tatie the failure to
publicize protocol toasts to Lin, and the omission
of references to him in domestic propaganda since
8 October all seem more indicative of some effort
to alter the prescription for the succession to
Mao. If such a struggle is still in process, Lin may
not yet be out of the picture. Nevertheless, it
seems highly likely that major changes in the
Peking pecking order are in the offing. These may
involve an alteration in Lin's status and that of
the other top military leaders on the politburo
who have been absent from public view since the
current round of troubles began.
ship may ave pose
some elements in the leader-
a challenge to Lin's position
as the sole party vice chairman. If Lin's physical
inability to carry on with his duties were the only
question, it seems unlikely that Peking would
omit references to him while a new power equa-
tion was being worked out. Previous indications
that Lin's special status was being played down-
on the occasion of the 50th anniversary of the
party last July, and again during the major Army
Day celebration on 1 August-increase the likeli-
hood that there is a political controversy over his
future position.
The
regime's failure to convene the oft-postponed
National People's Congress, which was to approve
a new state constitution reaffirming Lin's position
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vi ~L y
Lin Piao:
Lost in Mao's Thought?
as heir, may also indicate that the succession
formula set forth two years ago in the party
constitution no longer stands.
Controversy over the succession also may
explain the continued absence of four of the
top-ranking military leaders on the politburo.
Army Ch ref of Staff Huang Yung-sheng, air force
commander Wu Fa,-hsien, navy commissar Li Tso-
peng, and. the former commander of the Nanking
Military Region, Hsu Shih-yu, would all be in-
volved in a controversy over collective leadership.
Huang, who ranks immediately below Lin military hierarchy, would be a logical candidate
to play the role of "king maker," and there are
signs he may still be active behind the scenes. On
the other hand, the prolonged military air stand-
down may be an indication that Wu Fa-hsien's
Position is in jeopardy. In any case, the resolution
of the political fate of the
l
se
eaders would be a
crucial element in solving any succession problem.
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Page 4 WEEKLY SUMMARY
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FAR EAST
UN : China Debate Begins, Outcome Uncertain
Deb e in the General Assembly on Chinese vote for the resolut' itself, however, and the
representati got under way this week, with over outcome is whol ncertain.
70 countries in ibed to speak at least once. The
speeches so far ha roduced few surprises and If Important Question loses, the support-
probably have had lit effect on the relatively ers Taipei will be hard put to find a way to
few undecided members. pro-Peking camp event its expulsion. If the Important Question
has stressed that the dual repres Cation solutio wins and the Albanian resolution is then brought
favored by the US would effective) suit in e to a vote in its present form, it will likely fail for
continued exclusion of the Chinese Co nists. lack of the requisite two-thirds vote. In that
The Nationalists maintain that Pekin doe of event, the US would hope to obtain a simple
meet the "peace-loving" requirem in the majority for its resolution.
Charter.
The first vote, pro ly early next week,
presumably will be o hether to give priority to
the US resolutio that would make Taiwan's
expulsion an mportant Question requiring a
two:-thir ajority. A number of countries that
will` support the US on the priority issue will not
iven the complex parliamentary situation,
howeve there are a number of other possible
outcomes, epending on how the vote on the
I mportant stion comes out. Maneuvering
could delay a de 'ion for days after voting be-
gins.
Indochina
North Vietnam: Still Apprehensive
Hanoi is taking the news of President
Nixon's intended visit to Moscow calmly, at least
on the surface. It has not repeated the polemics
that followed the announcement Peking would
host the President. The Vietnamese Communist
press is silent, and spokesmen in Paris are mini-
mizing the significance of Moscow-Washington
summitry in terms of the Vietnam war. The So-
viets, as the Chinese did in the wake of the
announcement of the Peking visit, are making
special efforts to reassure the Vietnamese that
their interests will be protected.
Sino-Soviet rivalry to give them a free hand in
pursuing their own goals in the war, and they
naturally fear any prospect that Peking and Mos-
cow might put their own interests above those of
Hanoi in summit talks with the US. F_
This does not mean, however, that Vietnam- There is no reason to believe that the Viet-
ese suspicions of Moscow and Peking have been namese took with any less suspicion on high-level
allayed. The Vietnamese have leaned heavily on Soviet contacts with the US. North Vietnam's
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5r;ui i l
anticipation of US talks with Moscow as well as
with Peking probably was responsible for the
references to "big power politics" in Hanoi's
propaganda commentary following the announce-
ment that President Nixon would go to Peking.
Moscow at the time showed some sensitivity to
the Hanoi charges and rebroadcast the polemical
outpourings only selectively, deleting the most
pointed references to big power politics.
on political circles a
a cabinet reshuffle an
t shifts.
at the end o
ably will folio
his u
ious
slowly and cau
to discuss possi
Moreover, as in
the changes may,
the political
re /buzzing with
other high-level
h. Thieu pro
al pattern o moving very
even though he has begun
changes with his advisers.
t government reorganizations,
designed primarily to improve
ncy rather than to broaden
ffici
igh the Pr
Prime Mi
sident probably has not
ut specific changes,
ister Khiem is likely to
no other qualified can-
ecause there is
'Khiem's future
f his private criti
as been in doubt as a
sm of Thieu's election
rganizational and per
he
s o pu oge era eam t is more skilled
oliticking. In particular, he apparently would
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Page 6 WEEKLY SUMMARY 22 Oct 71
like . o find men able to deal more effecti
with a National Assembly, where the op
tion is ronger than in the past.
Thie may conclude that the need f
changes h diminished because criticis
presidential election has died away and
sition has Ilen into disarray.
a measure of coo
prior to the electi
because of perso
In particular,
tion of oppo
collapse. So
become in
eratio
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major
of the
he oppo-
in mounting protests
r to be splitting apart
icts among their lead-
ality con
their intere
y's efforts to
tion groups ap
s no longer coincide.
forge a broad coali-
ar on the verge of
organization have
e groups in Ky'
tive and others h
n set up by the An
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J he vice president imself is put-
ng up rave front. He has not to en an active
role' in eading his organization since he election,
h
owev r. and some of hig s,,nr;atP;.ht-
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is ee y issue a statement deny g press
repor s that he would leave Vietnam a ter his
ter expires at the end of 25X1
ve left to join a
uang Buddhists.
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Enemy Jntentions in Tay Ninh
The movement of Communist main force
units from Cambodia into the northwestern Tay
Ninh Province - Cambodian border area, together
with attacks against Saigon forces there during
the past week, raises the question of future tac-
tical and strategic objectives of the Communist
units.
It appears right now that their primary con-
cern is to protect their position in Cambodia and
their major supply channels to southern South
Vietnam. The Communists seem to be worried
that South Vietnamese forces in Cambodia will
try to launch clearing operations from their for-
ward base at Krek along Route 7 to the Chup
plantation after the monsoon rains slack off and
the ground becomes solid enough to support
South Vietnamese armor. The continued heavy
shellings of South Vietnamese positions around
Krek by elements of two Communist divisions
possibly are intended to disrupt any such South
Vietnamese plans.
e ensive positions along Rout near the Chup
rubber plantation. Villagers i the vicinity appar-
ently have been told to pect a "massive attack"
soon from South V' nam and
The Communists
do not want Saigon's forces to penetrate their
bases in the Chup-Dambe area, which they use to
refit their units. With the dry season logistics push
from North Vietnam about to begin, the Commu-
nists will need the Cambodian base areas to
handle new supplies and manpower.
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Page 7
Beyond keeping the South Vietnamese away
from their Cambodian base areas, the enemy may
hope that operations in Tay Ninh will discourage
Saigon from aiding Cambodian forces in any dry
season offensive the Communists may launch
against them.
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he enemyMas begun to restrict pedestrian
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Cambodia: Democracy Disowned
damage the regime's internation`:-'They
The Lon Nol government took a nif.i_oat
step this week toward authoritarian rule when it
turned the National Assembly into a constituent
assembly and then declared a "state of danger,"
which in effect enables it to govern by decree.
long-term costs may be high-as
,I>ision be-
tween the army and t Mans grows more
pronounced and eadership loses the sup-
port of eerr of respected and capable men
the oruster of Sihanouk.
Prime Minister Lon Nol's decision to form a
constituent assembly clearly was taken to avoid
any further dealings with a legislature that dis-
played the will to question and challenge his
government. Under Jthe new arrangement, assem-
bly deputies have lost their power to interpellate
ministers and to bring down the government.
Now that the assembly is no longer in the govern-
ment's way, it will soon begin implementing a
badly needed and long-delayed economic reform
program.
The constituent assembly's term of office
extends for the time needed to adopt a new
constitution. A number of the draft provisions of
that document already are the subject of consid-
erable controversy, indicating that it may be some
time before the new draft can be promulgated.
Among other things, a new constitution will re-
quire new elections, which many top leaders be-
lieve would be unwise under present conditions.
At midweek, Lon Nol, overreacting to grow-
ing civilian opposition to his move against the
National Assembly, confirmed in a nationwide
address that the government would henceforth
rule by executive decree. mien to the"do-
,~t,mestic ? ref5et ussions - the : ,{rime rsterIs 'iHL
tires .d maladroit remarks itt~iabtedly-will
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Lon Nol's speech apparently was prompted
by Buddhist demonstrations in Phnom Penh pro-
testing the assembly's dismissal.
Neither Lon Nol nor Sirik Matak appears
inclined to give ground at the present time. In-
deed, there is renewed talk about the imposition
of press censorship, and Lon Nol has appointed
General Thappana Nginn to take over the impor-
tant Interior Ministry from In Tam, the ousted
civilian leader. Nginn is the first professional mil-
itary man to hold a key post under Lon Nol, and
his appointment will increase fears that the army
is taking over the government.
The power at the disposal of the regime's
civilian critics is severely limited and the govern-
ment should be able to have its way unless the
Buddhists and the students-two fragmented
groups-can somehow create more substantial op-
position than they have managed thus far. The
Buddhist demonstrations must have come as a
personal blow to Lon Nol. It is possible he will
decide that a placatory gesture to forestall a seri-
ous narrowing of his base of support may ulti-
mately be as important in governing the country,
as the ability to impose economic and other meas-
ures by fiat.
Page 8
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South Korea: Down But Not Out
The government's tough measures against
student protesters last week effectively ended two
weeks of demonstrations but may have laid the
groundwork for further violence in the months
ahead. The students centered their protest on the
requirement for military training on campus. An
initially mild government response hardened as
the protests spread and other issues, including
corruption and economic difficulties, came to the
surface. This culminated in an order from Presi-
dent Pak on 15 October authorizing police and
army forces to seize and close Seoul's major uni-
versities and to arrest and conscript political agita-
tors.
Pak's unprecedented measures were tem-
pered by caution as he moved to minimize ad-
verse reaction. Neither the opposition New Demo-
cratic Party, which defended the students, nor
Page 11
any particular student organization was singled
out for criticism. Pak instead took the safe course
of claiming that Pyongyang's hostility and its
efforts to manipulate South Korean students
caused him to act. Nevertheless, Pak appears re-
solved to punish the students and thereby to
demonstrate to the military and the public his
ability to act decisively in maintaining order.
More than 150 students have been expelled from
their universities. The government has announced
its intention to arrest protest leaders and may
conscript as many as 10,000 students who vio-
lated the military training law. These measures
will certainly give the protesters pause but at the
same time will feed the discontent of the students
who have real grievances. Many will view Pak's
actions as excessive and they may serve to inten-
sify domestic political pressures.
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Plcilippines: Marcos'Lease on Presidential Palace
resident Marcos apparently intends to ex
tend is term of office beyond present consti -
tional imits, and this is provoking increa ng
oppositi n. The odds are still strongly in fav r of
Marcos e entually getting his own way, bu poli-
tics in Ma ila is likely to get considerabl more
heated befo e the issue is resolved.
Under p
legally contin
expires in :19
Philippines that
constitutional co
sion, into lifting
in office when his
It is widely ass
arcos will try to
vention, which
he restraints
Evidently resentful
instruments of Marc
f being co
s, a major,
ago spo
delegates a few weeks
that would bar him fr
prevent Mrs. Marcos f
the resolution is now la
and Marcos' lieutenants
os cannot
cond term
ed in the
anipulate the
s now in ses-
n his tenure.
sidered political
ty of convention
sored a resolution
hding his term and
cceeding him. But
shing in committees
busy lavishly enter-
taining convention deleg
Although the dire
is clear enough, Marc
threat posed by th
yet explicitly stat
been far less re
officer that her
until the "Co
averred that, i
his term of
didate for th
es in an attempt to
ons of independence.
ion i
is stil
holding his cards
exaggerating the
t and the small
has bee
urban le
rural insurgd
that it will
e. Mrs. Marcos,
cy but has not
quire his con-
however, has
US Embassy
cent. She. told a
usband intended to
munism issue was li
ay in office
Id extend
necessary, Marcos wo
fice or she would beco
e a can-
presidency herself.
The s cession issue is not likely to ove to
the front urner until after the senatori I elec-
tions on November. Marcos' Nacionalista arty
is expe ed to capture six of the eight cont sted
seats. a President has expressed confidence hat
he uld get a clean sweep, but he appears to
alize that such a show of political muscle wou d
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Will it happen again?
(Marcos and wife at second inaugural)
Page 12 WEEKLY SUMMARY
b as counterproductive asflhe large vote he
eng eered for himself in the presidential election
two ars ago.
Eve
disruptive,
Political killi
1969 pace, an
Marcos' future b
elections are always
ent one is no exception.
eady running ahead of the
by will contribute to the
hat have been building as
ies the key issue in Philip-
pinepolitical /life.
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USSR-France: Brezhnev Tests His Wings
The scheduled visit of Soviet party chief
Bre nev to France on 25-30 October represents
the a gee of the current round of world travels
by Mos w's itinerant leadership. It marks, in
effect, Bre nev's coming out as a world leader,
being his firs 'sit to the West since he assumed
his post as head the party in 1964. Unli
Premier Kosygin's v1 to Canada, which s a
strong business and trad orientation, Bre nev's
trip appears primarily politi in intent.
The visit is important to F e h President
Pompidou, particularly in lig of h desire to
remain a prime mover in m ers relatin to East-
West detente. For some time, Paris ha been
losing the headlines to )3onn in the detente i Id,
and Pompidou is dete fined that Bonn's relatin s
than those of Pari
the disc 'sions, and Brezhnev will probably lobby
for anrly convening of talks on troop reduction
in E ope, which France opposes, and a confer-
encIon European security, which Paris favors.
Soviet Politburo OKs Five-Year Plan
The Soviets have been demonstrating a penchant
for such agreements, and Brezhnev would doubt-
less like to come away from his visit with some-
thing concrete. The Franco-Soviet protocol on
consultations signed in 1970 was the opening
move in Moscow's recent drive to tie down friend-
ship treaties or consultation agreements with non-
aligned and Western countries-a drive that has
produced results with Egypt, India and Canada, as
well as France. It is possible that France might
agree to a modified friendship treaty, but an
agreement to strengthen the 1970 protocol or to
expand economic ties seems more likely. In any
case, Paris will have at least temporarily deflected
e spotlight from West German - Soviet relations,
ome degree countered the attention
eking's foreign initiatives.
Moscow announced on 17 October that the
Politburo had met three days earlier and had
approved the five-year economic plan (1971-75)
and the 1972 state budget. The announcement
was probably issued in part to quell foreign specu-
lation that action was being delayed because of
leadership disagreement. While talking with a
group of US governors on 15 October, Premier
Kosygin betrayed sensitivity on this score when
he referred to the lack of objectivity of the for-
eign press and noted that he had spent all the
previous day meeting to put the finishing touches
on the plan. A query at a public lecture in Mos-
cow last month suggests that Soviet citizens also
were raising questions about the plan.
The press statement on the meeting high-
lighted the Politburo's concern for consumer
welfare, agriculture, and the development of the
country's eastern regions, subjects emphasized by
the plan draft directives and the party congress
early in the year. These have been controversial
issues, and as late as last May Belorussian First
Secretary Masherov registered his disapproval of
the attention being given to "consumerism."
Announcement of the Politburo's action
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Page 16 WEEKLY SUMMARY
the Soviets will have focused attention again
eir detente policies. They will also have
other effort at cultivating the more in-
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reinforces the leadership's commitment to the
programs and should help to inhibit further pub-
lic and private argument.
Publicity for the Politburo action pre-empts
the public role of the Central Committee and the
Supreme Soviet, to which the Politburo sub-
mitted the plan and budget for examination.
Normally, these institutions consider economic
trance: Restless Youth in the Assembly
he Gaullist majority in the French National
Assemb remains solid, but there are signs of
restlessnes especially among younger members.
At its 13th ua party conference last month,
the Gaullist Uni of Democrats for the Republic
demanded that the egislature be permitted to
play a larger part in termining government
policy. Prime Minister C an-Delmas, recog-
nizing the need to satisfy the gr'ting appetite of
plans without prior public pronouncement by
higher authority.
Kosygin told the governors that the Central
Committee will take up the five-year plan next
month. The leadership must also decide whether
this meeting will bring changes in the Politburo's
membership, which seemed foreshadowed when 25X1
the responsibilities of Voronov, a Politburo mem-
ber, and Solomentsev, a party secretary, were
the deputies for a bigger piece the action,
promised to take steps to imp a working rela-
tions between the governme and parliament.
The deputiesemands resulted from grow-
ing discontent 9yer their isolation from the day-
to-day affairsiof the country. The deputies have
felt handi Aped in representing the interests of
their cyr stituents because parliament has often
lacked access to necessary information. Some
deputies at the conference, feeling that the gov-
-Lsrnment regarded their role as that of a rubber
stamp, cautioned the regime against taking their
nconditional support for granted. The Gaullist
de ies called upon the government to adopt a
policy consulting primarily with the legislative
majority, a opposed to special interest groups,
when hammeri out new programs to deal with
social and econom problems.
Chaban-Delmas trie to appease the younger
deputies by agreeing that b Nth he and other mem-
bers of his government wou consult more fre-
quently with them. He defe ed cooperation
between the regime and professi I groups as
necessary in modern society, but pledged that he
would give National Assembly commission presi-
dents a greater role in drafting laws.
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Page 17 WEEKLY SUMMARY
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br.l sic ii 1
So far, th`e
yernment is following
promises of increase
of deputies recently me
ith In
Marcellin to review the govern
with unrest in the police.
In
prime minister review
ed h'
Gaullist commission p
r
ing of the fall parlia
rur
r move,
egislative I wthei
s with
dents prior to the o -
ntary session on 2 October.
It is d tful, however, that the govern-
ents cu nt efforts to pacify the cWpu will
Yugoslavia: Reform Breeds Reform
The Yugoslavs, having adopted this summer
some 22 amendments to the 1963 constitution,
are planning to move to a second phase that is
expected to result in a new constitution by the
end of 1972. The, venture risks again arousing
nationalistic antipathies, but in its management of
the program Belgrade will probably benefit from
its experience in phase one.
Tito's decision to move so rapidly to widen
the scope of the complex government reform
grows out of his awareness that at 79 his time is
limited. He probably estimates that the country's
near brush with chaos during phase one has
sobered the Yugoslavs enough to permit the coun-
try to move on to the next measures relatively
painlessly. A thorough re-examination of the pre-
vailing governmental system is, in fact, made nec-
essary by the thrust of this summer's amend-
ments, which endow the republics and provinces
with substantial economic and political authority.
Signaling the opening of phase two, Belgrade
has announced that next year the Federal As-
become permanent policy. The government has
failed in the past to maintain promised dialogues
with the legislature, and most of the orthodox
Gaullists, such as Defense Minister Debre, con-
tinue to assert that the majority party's business
is to oppose the opposition, not the government.
With President Pompidou in firm control and
th the legislative elections still 18 months away,
the g ent is not under great pressure to
satisfy the dema younger elements
within the Gaullist party
sembly will debate changes in the parliamentary
system, the judiciary, and the economic and
political roles of the communes. It will also
consider the next stage in realizing "self-ma-
nagement," which prescribes local worker par-
ticipation in production decisions as the theo-
retical basis for Yugoslav communism. Yugoslav
workers consider that they have actually lost
authority over the past decade to managerial and
banking influences.
Even though public debate over phase one
brought serious clashes of interest, it appears that
Belgrade will subject the next phase to similar
debate. This past spring, Tito cut off debate when
it threatened to deepen the nation's rifts; he will
probably do the same again if necessary. How-
ever, he believes that open and public discussion
of the changes is required because he wants to
create a system in which all Yugoslavs have a
stake and which they will be willing to defend
when he is no longer around to keep them to-
gether.
SECRET
Page 18
on its
elegation
for Minister
s plans to deal
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SECRET
Sweden: Palme Primes the Pump
Last week Prime Minister Olof Palme moved
to boost the sagging Swedish economy and avert a
possible political crisis.
During early 1970, skyrocketing consumer
prices and a deepening trade deficit moved the
Palme government to impose a temporary price
freeze and credit measures aimed at raising short-
teerm interest rates. As a result, by this spring
consumer spending had slowed to an almost un-
precedented degree. The decrease in domestic or-
ders produced a decline in both industrial invest-
ment and capacity utilization. Industrial produc-
tion suffered an unusual seasonal decline in the
second quarter of 1971. Plant shutdowns and
industrial layoffs have led to the highest unem-
ployment figures since the 1930s.
A challenge to Palme's fiscal policies began
tc emerge over the summer. In August the bour-
geois opposition parties formed a special parlia-
mentary committee to deal with the unemploy-
ment problem. Labor leaders leveled strong criti-
cism at Palme during the congress of Swedish
trade unions in September. Palme defended his
program by cataloging recent marginal steps his
government had taken to ease credit restraints,
but refused to agree to major expansionary meas-
ures. Palme's cautious approach was based on his
belief that stimulative measures would release in-
flationary pressures either this winter or in early
1972.
As a result, a conservative newspaper warned
that a "solid front" would coalesce against
Palme's economic policies if he permitted the
situation to go unchanged. Palme reflected his
frustration when he lashed out at the US in a
television interview on 12 October, blaming US
economic measures for Sweden's domestic eco-
nomic ills.
Two days later, the government relented and
announced a number of economic moves in-
tended to check the recessionary trend by revital-
izing Swedish business. The government will pro-
vide assistance totaling some $400 million, pri-
marily in the form of extended tax credits and
government funds for investments. Some' business
leaders believe that the new measures do not go
far enough and that the net effect will not be felt
for some time.
Nevertheless, the measures, which reflect
Palme's finer sense of political timing, should
reduce pressure on the government for the time
being. Furthermore, Sweden's favorable export
balance-thus far running at 15 percent above last
year-is expected to continue to outdistance any
increases in imports due to rising domestic de-
mands. A cyclical upturn in the economy nor-
mally occurs in the spring, and the government
probably feels confident that its program will
Page 19
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~r,utcr, ~
ark: Krag Gets Running Start
Jens
October as
tto Krag returned to power on 11
ad of a minority Social Democratic
lost no time in moving on foreign
government an
policy matters.
arrangements to vi
pany with Foreign
Minister Norgaard for
nister Anderson and Trade
e purpose of coordinating
policy on the recogniti
entry into the European
Recognitj
Social De
Socialist
17 de
way
ithin the day, he had made
n of Hanoi does not quicken the
e Danish public, but it is dear to the
ocratic left wing and to the Marxist
eople's Party. Krag is dependent on the
ties the Marxists have in Parliament. Nor-
robably will recognize Hanoi this fall, and
Krag has stated publicly tjt Copenhagen will
follow suit by year's end.
Entry into the ommon Market, on the
other hand, is a con oversial issue in both coun-
tries. Krag's ,over ent and Oslo are committed
to joining, but th face considerable opposition
in Parliamen nd among various interest groups.
ag's most difficult task will be to cope
wi Denmark's economic problems. In his in-
gural address to Parliament on 19 October,
rag called for an immediate temporary surcharge
on imports, except for food and raw materials, to
redress the balance of payments deficit. He ad-
mitted that the surcharge runs counter to interna-
tional trade regulations, but cited the US and UK
precedents. He has not, however, tipped his hand
on other steps to combat inflation. One pointer
may be his inability to recruit anyone into his
cabinet from the powerful trade union federation.
deration leaders do not want to be tarred with
w t they fear will be an inevitable wage-restric-
tionolicy.
Cu
also high
party draft
a small pro
cally organiz
back the defense establishment is
Krag's list of priorities. Last year, his
d military reform proposals calling for
essional cadre supplemented by lo-
conscripts, a 25-percent reduction
in aircraft, an
pedo boats. Th
well as military
aval forces limited to motor-tor-
proposals ran into political as
position. Most controversial,
from the NATO p
ant of view, was the recom-
mendation to cut ba
serve from one year to
the term conscripts must
ive or six months. Krag
has said he is willing to
opposition parties, but he
open negotiations.
SECRET
Page 20
not yet moved to
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it Oslo. on 25 October in com-
mmunities.
ompromise with the
 Sal d a n : Numayri Strengthens His Hold
MIDDLE EAST-AFRICA
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LEUKE'1'
ident Numayri, apparently more con-
fident of hsition, continues to consolidate his
chief executive on (pctober, after receiving a
heavy majority (98.6 pe nt of those voting) as
the sole candidate in the pre i ential plebiscite in
late September. The new cabi , which he ap-
pointed on 14 October, contain only a few
political appointees. The majority of t ministers
come from university or technocrat go nment
backgrounds. The key security, interior, and
defense positions have been filled by military
loyal to Numayri.
rand Council, which was dissolved by mayri
on 12 October, have been demoted to ss impor-
tant positions. Former interior mi er Ibrahim
has been appointed minister of h th, and former
national security chief Abu Z d has been named
secretary general of the Su nese Socialist Union.
The two were deemed y US officials in Khar-
toum to constitute " gnificant potential opposi-
tion" to Numayri.
new cabin is the best in some years. In addition
to the nerally nonpolitical ministerial appoint-
ment , Numayri's personal staff has been greatly
str gthened. These personnel changes were ac-
cbmpanied by a series of far-reaching decrees on
government reorganization, spe ically defining
the responsibilities of each m' istry and office.
Numayri has ap anted southerners as gov-
ernors of the thre outhern provinces. The clear
definition of eir responsibilities as the true
executors o government policy in their areas
signals his i tention to try again for a solution to
the 16- ear-old southern rebellion. The appoint-
men of another southerner as one of three
d uty presidents and a chief of staff who is
nown to be personally sympathetic to the rebel
position also indicates that Numayri will imple-
ent a conciliatory policy toward the south.
nce the July coup and countercoup,
Numayri short-term prospects have significantly
improved. ability to maintain his pre-eminent
position over long term depends upon his
success in balancin off the contending forces
within Sudanese socie but more especially
upon his ability to comma the continued loy-
alty of the armed forces. Fur r support from
this quarter could depend in part u n Numayri's
ability to end the insurrection in th outh. Al-
though the new cabinet appointments pear to
be a step in the right direction, previous a empts
to persuade the southern rebels to accept rth-
ern rule, even with some form of local autond
have met with failure.
Progress in Iraqi National Oil Industry
Iraq will start exporting oil from its own
wells for the first time early next year. In the
next few years, several oil fields will be developed
with Soviet and Hungarian aid, and a number of
pipelines and refineries will be completed. This
should establish a viable national oil industry for
Iraq.
The first stage of the large North Rumaila
field should be completed shortly, and Iraq will
then be able to produce about 5 million tons of
oil annually on its own account. Earlier this year,
the Soviets reaffirmed their commitment to work
on the field's second stage, which is expected to
raise production to around 20 million tons
SECRET
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SECRET
!AtnIf rjra"
Latakfa
IEBgNO,N
Ball,l~t y'7
Haifa,
ISRAEL
~/ It
*Amman
JORDAN
.Aleppo;'
SYRIA
Yerevan
? U.S.S.R.
'-Mosul.,,-`
fields
Kirkuk
'Baghdad
I R A {\Q
Isfahan ?
1 ,.
Oilfields
s 3 khorramshahr%: '-'
North Rumailae 11?-
Fae
Tehran*
IRAN
'Kermanshah
-a
'*,Kuvvait
annually by 1974. Plans also call for development
of several small oil fields.
Iraqi refining capacity is being expanded
with Soviet and Czechoslovak assistance and
should exceed 8 million tons annually by 1975.
Prague is building a refinery with an annual
capacity of 3.5 million tons at Basra. As part of a
new credit, the Soviets earlier this year agreed to
construct a refinery at Mosul to refine 1.5 million
tons per year.
Iraq has announced recently that the Soviet-
built oil pipeline between North Rumaila and Fao
has been completed; it will move oil from North
Rumaila to the Persian Gulf. The Soviets also are
to study the feasibility of a pipeline between
Baghdad and the Basra refinery. Construction
would be in two stages; the first would be com-
pleted in 1975, after which construction would
begin on the segment linking Baghdad with the
refinery at Mosul. In addition, the Iraqis have
discussed construction of a pipeline nearly 800
SECRET
Page 22
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 Approved For Release 2008/09/17: CIA-RDP79-00927A009200010001-1
31',l.i1tL' 1
miles long from North Rumaila to the Mediter-
ranean through Syria. An Italian firm has com-
pleted surveys on the pipeline route in Iraq and,
according to a recent press report, Syria ap-
parently has allowed the survey to begin on its
side of the border. The USSR has stated its will-
ingness in principle to help in the construction of
this pipeline. The Iraqis also have decided to lease
SECRET
Ceylon-USSR: Strains in Relations
Ceylon's relations with the Soviet Union
have come under stress in recent months. Prime
Minister Bandaranaike's growing disenchantment
with Moscow has been set off by several things.
One source of friction was sharp dealing by the
Soviets last summer in their tea trade with Cey-
lon. Mrs. Bandaranaike's government discovered
that the USSR and other Eastern European coun-
tries were earning foreign exchange by reselling
Ceylonese tea to some of Colombo's traditional
customers at bargain prices. Subsequently, the
Soviets did not make matters any better by buy-
ing a disappointingly small amount of tea at
auctions in Colombo.
an unknown number of tankers from the USSR
and to purchase seven from Spain.
Output from the various oil fields held by
the Iraqi National Oil Company will provide Iraq
with a way to repay most of the Communist aid
extended for petroleum development as well as
for some aid to other sectors, and possibly to earn
some foreign exchange as wel I. 25X1
The treaty concluded in August between
India and the USSR has also contributed to Cey-
lonese suspicions of Soviet designs in the area.
Mrs. Bandaranaike reportedly turned down a later
Soviet offer to enter into a similar agreement.
25X1
The two countries signed a fisheries agree-
ment in mid-August which provided for Soviet
technical assistance to Ceylon's fishing industry.
In exchange, the USSR's deep-sea trawlers were
authorized to use the port facilities at Colombo
and Galle. However, Mrs. Bandaranaike's govern-
ment signed the agreement with some reluctance.
The agreement left many details to be ironed out
in further negotiations and did not fulfill Mos-
cow's hope that Soviet ships would be given
access to other Ceylonese ports.
Meanwhile, Mrs. Bandaranaike has recently
underscored her enthusiasm for nonalignment and
her desire to exercise a leadership role among the
nonaligned. Last week, in proposing to the UN
General Assembly that the Indian Ocean be
declared a demilitarized zone, she reiterated her
distaste for power blocs and her belief that small
states such as Ceylon should remain outside
them.
Page 23
WEEKLY SUMMARY 22 Oct 71
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 Approved For Release 2008/09/17: CIA-RDP79-00927A009200010001-1 25X1
SEURE i
Bururidi: The President Strikes Back
Presided Micombero has made his first
move to counter bid for power by a radical
faction within his go e ment that has been at
tempting to isolate him arid? assume political con-
On 19 October, the President tablished a
Supreme Council of the Republic, co osed en-
tirely of military officers, including t army
commander, and presided over by Mico bero.
The council is charged with aiding the Pres ent
in his mission as head of state and is aim
according to the announcement, at those
"sacrifice the common good to personajt terest
and try to create false problems."
By establishing such a c
has enlisted strong suppor
d
power of a radical factio
Simbananiye and Jus
for po
faction opened its
ro's fears o
played on Mico
ests of a nu
engineer the
ding such rank
officials, in
economic affairs a
ministers
f plotting against th
charge
the "plotters," now i
trial
wer in July when it
f a coup in order to
mber of moderate
ing officers as the
nd information, on
e government. The
n its second week,
purge their moderate political opponents. Al-
though little persuasive evidence s been pre-
sented, confessions were fo rom the prin-
cipal defendants and ifficult to repudiate.
The rad' S apparently overplayed their
hand, hover, by pushing for a resumption of
diplom c relations with Peking after a six-year
free despite Micombero's earlier objections.
le acceptance of the credentials of the North
orean ambassador after a five-month delay, dur-
ing which Micombero considered expelling the
North Korean mission for propagandizing among
Burundi's leftist youth, also reflected the radicals'
Mi
mbero apparently plans to push the
the choice of either backing down or
radicals in
making an all=
the army woul
bananiye and Shibur
t attempt to oust him, something
of tolerate. Although Sim-
ave increased their power
significantly in recent
they could succeed in an
they might see no other
Micombero is asserting
shuffle seems likely in the
OUTH-WEST AFRICA: The Security
Council on``28tober adopted a resolution con-
cerning the probllenl's ed by South Africa's
continuing control over S frica in
fiance of the UN. The council action
casioned by the Africans' desire tha a interns=
tional community follow up International
Court of Justic?'s advis pinion last June up-
holding the UN p i ion. The resolution, spon-
sored by the Af
s t
ruling a
draw wou
t
a cabinet re-
rej
g with the Court's
hat Pretoria's continued refusal
ld endanger regional peace and
security. A second resolution still under review
calls on South Africa to negotiate with the UN to
ive self-determination to the territory's inhab-
ita~t`s Pretoria is unlikely to respond positively to
eithe
SECRET
Page 24 WEEKLY SUMMARY
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cil, Micombero
gainst the growing
by Foreign Minister
nths, it is unlikely that
hi
hims
near
ter attempt although
e open. Now that
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SECRET
WESTERN HEMISPHERE
Balaguer's Mas \nee roke
President Balunexpected order of 14
October to Generaique Perez y Perez and Neit
Nivar Seijas to exjobs has disconcerted the
opposition and impa President's position.
The Presidenpro ted to name Nivar
chief of police and n Niva 's First Brigade over
to Perez primarily ail Niva 's maneuvering for
influence. Moreovenaming a ew police chief,
Balaguer was able that the vernment was
taking action to coterrorism, pa ticularly that
perpetuated by La a, a quasi-offi 'al counter-
te-ror organization ed to have bee sponsored
by the police.
General Nivar's disquieting maneuvering
tect his extensive financial interests by exten
influence and improving contacts looke
Dominican context, very much like p
pine-building. The depredations of L
press allegations-rightly or wrongly-
sponsible for the murder by terror
terror and La Banda to the fore
sure from the political opposi
Balaguer government by pub
state of emergency
labor unrest. Several
and black-power
caused a US-o
down operatiq
disrupted r
itical
Banda a
at it was r
's of five young
ht the issue of
gain. Steady pres-
on to discredit the
cizing its reliance on
Eric Williams declared a
19 October after weeks of
embers of an allegedly radical
riented labor union have been
construction company to close
on 13 October. The relatively mild
'the state of emergency have not so far
utine activities on the islands and the
not provoked protest.
Thy local press responded to the US company's
abrupt withdrawal with demands that the govern-
terror also had t be relieved. La Banda, whose
existence and ac ities were undoubtedly known to
the President ' broad outline if not in specific
detail, had b ome an encumbrance that the goveri25X1
ment neede to shed.
has gracefully ac-
ce ted his unexpecte appo n- ment and has already
ade several changes in the police that have won
im a favorable press. By appointing General Perez
to the First Brigade, President Balaguer has shown
unimpaired regard for Perez and has put the coun-
try's best military unit under the command of a
loyal, able, and apolitical officer. The transfers are
interpreted as a move t'25X1
curtail Nivar's power, and they have been well re-
ceived in the military as a whole. For the moment,
the political opposition is deprived of its principal
issue.
This masterstroke has unquestionably strength-
ened the President's position
liam
straighten out the chaotic labor situation. Wil-
move may therefore be generally popular,
Ily if the government follows up by im-
p leme
ting long-needed measures to curb irre-
e labor elements. The National Joint Action
sponsi b
Commit
most l i k
emergen
Granger,
particularl
the Prime
y source of violent reaction to the state of
y; the committee's chairman, Geddes
as been detained. The security forces,
if they are backed by public approval of
inister's action, are believed equal to
Page 25 WEEKLY SUMMARY
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ee, a black militant organization, is the
1
25X1
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SECRET
International Developments
The Organization of Petroleum Exporting
Countries is trying to secure greater revenues to
offset the de facto devaluation of the US dollar.
Recommendations in this direction were drawn up
last week at a meeting in Vienna of central bank-
ers from the 11 member states. The bankers'
recommendations will guide OPEC members in
their talks with the oil companies. The first show-
down will be between the Persian Gulf OPEC
members and Western oil companies operating in
that area. The ministers of finance from Kuwait
and Iran will represent the gulf members. They
will seek a ten-percent increase retroactive to 15
August in posted prices-an artificial price used to
determine government revenues. Lengthy negotia-
tions are likely to ensue. A progress report on
discussions is scheduled for the next OPEC minis-
terial meeting on 7 December. The oil companies
will probably resist the demands and prolong the
negotiations as long as possible. Their initial posi-
tion apparently will be that any OPEC effort
involving price adjustment would violate the five-
year revenue pacts signed this year.
The other complicated and contentious is-
sue-OPEC's demand for "participation" (the
OPEC term for ownership) in Western oil com-
pany operations within member countries may be
deferred temporarily. It, too, is likely to involve a
long period of contentious negotiations once dis-
cussions begin. Libya seeks 51-percent ownership,
Nigeria one third, and the Persian Gulf states
about 20 percent. OPEC members provide almost
all of the oil imports for West European nations
and Japan, and about 60 percent for the US. This
leverage may well force the oil companies to
compromise on both issues.
party o
Iks were held this week by a
the Organization for Economic
evelopment and by deputy
tion and
the Grou
means of
ments defic
eversing the large US b
conflicting national
nating widel
Although
expected from t
were empowere
thority), the part
the way for the m
chiefs in mid-Nove
differences that emer
ignificant agre
ese talks (the
ipants w
e impo
df
orking
inisters of
acceptable
ance-of-pay-
nly in illumi-
iewpoints.
ments were not
officials attending
m negotiating au-
re charged to pave
ant meeting of their
he magnitude of the
om the talks, however,
agreement satisfactory
has clouded hopes tha
to the US can be reac
year.
fold. First, there is u
other governments t
adjustment asked
reject an over-all
current account,
aims at strength
payments acco
impose contro
Second, ther
ences of op
garding the
any adjust
Germany
for unde
pluses.
ment s
own b
SECRET
anim
agreement are two-
us feeling among the
the U
13-billion
n part beca
ping the curr
over long-term
are, not surprisin
hion among the of
elative shares they s
ent to improve the
nd Japan acknowled
'taking adjustments to r
rance and the UK argue
ould result in an impro
lance-of-payments position
Page 27 WEEKL Y SUMMARY
is too great. They
turnaround on its
se such a formula
nt US balance-of-
uiring the US to
capital outflows.
ly, serious differ-
ould assume of
position. West
responsibility
duce thier sur-
hat any adjust-
Approved For Release 2008/09/17: CIA-RDP79-00927A009200010001-1
 25X1 Approved For Release 2008/09/17: CIA-RDP79-00927AO0920001 0001 -1
Approved For Release 2008/09/17: CIA-RDP79-00927AO0920001 0001 -1
 Approved For Release 2008/09/17: CIA-RDP79-00927AO0920001 0001 -1
Secret
Secret
Approved For Release 2008/09/17: CIA-RDP79-00927AO0920001 0001 -1