WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009400060001-4
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• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed
Secret
18 February 1972
No. 0357/72
Copy N2 46
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WEEKLY SUMMARY, issued every Fr
rning by the Office of current Intelligence. re
I analyze gnificant developments of the
on Thursday.Y md
terial coerdiriated with or preparedy the
o search, the Office of Strategic
rch, and the Lirectorate of Science and Ted
Topics . .
requiring more comprehensivet
theretore published separately- as SpecialIt.
listed iii he contents pages.
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3.CA_AC.J1
CONTENTS
(Information as of 1200 EST, 17 February 1972)
Cyprus: Makarios Says No
Mexico: Getting Back to Salinity 5
1
4
FAR EAST
Indochina 6
Japan: Defending the Defense Budget 9
Korea: More Talks About Talks 9
The Philippines: Economic Problems 10
Focus on Europe in Paris Talks
EUROPE
11
European Security: North to Helsinki 12
Finland: The Best-Laid Schemes 12
Yugoslavia: Emigre Terrorism 13
MIDDLE EAST - AFRICA
Pakistan: Problems for Bhutto 14
Soviet-Iraqi Relations Improving 15
Egypt: More Patience, Brothers 16
Qadhafi and the Battle of Destiny 16
Sudan: One of Cairo's Men Is Out 17
Zaire: Render Unto Caesar 18
CEYLON: THREATS TO POLITICAL STABILITY
(Published separately as Special Report No. 0357/72A)
WESTERN HEMISPHERE
Coup in Ecuador 19
Argentina: Labor Strikes Back 20
Chile: Political Adjustments 20
Venezuela: No Consensus on Oil 21
El Salvador: How to Win an Election 21
Bolivia: Church and State 22
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MALTA: DRIFTING ALONG
The most recent talks between Prime Min-
ister Mintoff and British Defense Secretary Lord
Carrington made no progress, though an agree-
ment still appears possible. In talks with Mintoff
on 13 February, Italian officials were given the
impression that he favors concluding an agree-
ment with the UK if some face-saving device can
be found. Mintoff told the Italian ambassador to
Malta that he had abandoned his intention of
seeking additional funds from Libya, but he still
needs an immediate cash payment larger than that
offered by the UK and its NATO partners. The
allies had agreed to make payments for the use of
military facilities retroactive to last October. so
that Malta would receive a backdated $6.8 million
upon signature of a new accord, as well as a
six-month advance payment of $18.2 million on 1
April on next year's rental. Rome has advanced a
compromise formula that would increase the
amount of money immediately available.
In the absence of an agreement, London is
continuing its withdrawal and next week will
begin disassembling its major installations. In ad-
dition, all British-employed Maltese workers are
scheduled to receive dismissal notices on 25 Feb-
ruary. However, Lord Carrington told Parliament
this week that if an agreement is reached soon,
the withdrawal will be halted and the military will
begin "putting things back."
The economic implications for Malta of the
prolonged negotiations are serious. Pending reso-
lution of the conflict with Britain, the business
community on the island is holding off on new
investment and drawing down inventories. The
populace is postponing purchases of consumer
durables, preferring to hold on to their money.
Falling domestic demand coupled with a de-
pressed tourist sector have given further impetus
to the rising rate of unemployment that existed
prior to Mintoff's taking office.
Measures taken by the Mintoff government
have acted as a further constraint on economic
activity. Government expenditures have been
curtailed, resulting in the cancellation of projects
and suspension of payments on public works con-
tracts. Mintoff, in acting to control rising prices
and imports, has made necessary the rationing of
some goods on the island.
The slowdown in economic activity, how-
ever, could be reversed if confidence were re-
stored through an agreement with the British and
its NATO allies. Snould the negotiations fail,
economic conditions can be expected to deterio-
rate rapidly. The British presence involves direct
spending of approximately $31 million yearly on
Malta. Taking into consideration the secondary
effects of these expenditures, the British account
for an estimated 20 percent of Malta's gross
domestic product. If London withdrew its mili-
tary forces, some 5-6,000 people employed at the
bases would lose their jobs. This would bring the
number of jobless to about 12 percent of the labor
force, excluding secondary effects resulting from
the loss of the British payroll.
There are no politically viable economic
alternatives that could fully maintain em-
ployment and promptly restore confidence in the
private sector. The USSR and Libya have re-
portedly offered to inject large sums of money
into the Maltese ecDnomy. Even if one or the
other does so, it would not immediately have a
significant impact on employment and invest-
ment. The government could use such funds to
make welfare payments to workers now
employed by the Br tish and to revive suspended
public works contracts, but additional, useful
projects could not be developed rapidly. Indeed,
the ability of the Maltese economy to absorb
increased investmews is limited. Moreover, the
private sector is unl kely to respond to this kind
of a dramatic change in foreign policy by rapidly
increasing investmer t. Foreign investors would
also remain skepticil. I
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Cyprus: Makarios Says No
The Greek attempt to oust President Ma-
karios has created a volatile situation. Pro-Ma-
karios and pro-Athens forces on the island remain
poised, and a single misstep could easily set off
violence.
Events have moved rapidly since 11 Febru-
ary when Greek Ambassador Panayotakos deliv-
ered an ultimatum to Makarios. Athens insisted
that Makarios turn over his recently acquired
Czech arms to the UN forces on Cyprus and form
a new government, including supporters of Gen-
eral Grivas and excluding leftists and Commu-
nists. Orally, Panayotakos added that his gov-
ernment insisted that the archbishop resign as
president and leave the island. Makarios publicly
rejected the demands, and the situation has re-
mained stalemated.
There is good evidence that Athens is using
the Czech arms issue as an excuse to move against
Makarios. It also appears that Athens sought out
Turkish views before delivering the demarche to
the archbishop. Ankara has strongly supported
the Greek demand that the arms be surrendered
to the UN and apparently has decided to give the
Greeks a free hand in achieving their other goals.
The longer the arms question remains unresolved,
however, the greater the chance that Ankara's
concern for the safety of the Turkish Cypriot
community will precipitate a military move by
Ankara. Press reports from Turkey have begun to
reflect the worry that Greek Cypriot clashes
could spread to the Turkish community. In addi-
tion, there are press reports that Ankara has
placed some of its forces in southern Turkey on
alert.
Makarios is confident that time and inter-
national opinion are on his side./
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Athens, most Greek Cypriot politicians have ral-
lied to his side.
The next move
appears to be up to the Greeks. Athens probably
In happier times: Makarios and Grivas in 1959.
would like to avoid using direct unprovoked force
since events have gained international attention.
Now that the power play seems to have failed,
Athens is probably hoping that demonstrations
on the island will lead to fighting within the
Greek Cypriot community. This would justify
military intervention to restore order.
The Greeks appear to believe they can con-
trol General Grivas, but his past record indicates
that he is dangerous and unpredictable. Other
elements adding instability to the situation are
the leftists and Communists, who have so far laid
low on Makarios' instructions. Student supporters
of Makarios and Grivas have clashed once so far in
a minor incident./
\ Contrary to initial speculation in
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Mexico: Getting Back to Salinity
Mexican Government officials once again are
making a pitch for quick action on the old, tech-
nically complex, politically sensitive problem of
salinity of Colorado River water flowing into
Mexico. Foreign Minister Rabasa recently de-
scribed the problem as the number one issue
between the US and Mexico. He said that Pres-
ident Echeverria would like a settlement as soon
as possible. Failing this, Rabasa said, international
arbitration may be necessary.
After 1961, when Mexico protested a new
drainage system in the Wellton-Mohawk region of
Arizona for increasing the salinity of the
Colorado, the US took measures to improve the
situation. By 1965 a five-year agreement with
Mexico had been concluded to improve the water
quality. Last November, when a one-year ex-
tension was due to run out, the Mexicans opted
IDAti0
NEVADA
Las Vegas
WYOMIN
Salt Lake City
UTAH
Denver?
COLORADO
Colorado
River
CALIF. ARIZONA NEW
Santa fe.
6San Diego
CAL!.-
VALLEY
CALF
.Phoenix
Mohawk
ellion
ve
\MEXICO
XV:.0
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E
for another one-yea, extension in the hope of
getting better terms than were then under con-
sideration.
Mexico's long-held position on salinity in the
Colorado has not waiered significantly under the
Echeverria administration. The foreign minister
has been a major proponent of the tough ap-
proach, to the extent of perhaps occasionally
misrepresenting Echeverria's views. Rabasa says
that an immediate improvement in the condition
of the waters is necessary to meet political pres-
sure from Mexicali Valley farmers. He says that, if
this is not accomplished soon, Mexico would have
to give serious consideration to third-party arbi-
tration. Echeverria has rejected this approach in
the past, however, saiing that the problem can be
solved amicably.
Recently, new irritants have been in-
troduced. One is the use on the US side of in-
secticides that allegedly contaminate the Colo-
rado and harm marine life where the river water
reaches the Gulf of California. The Mexicans also
indicated that they object not only to the Well-
ton-Mohawk drainage but also to similar use of
other waters below the Imperial Dam that in-
creases the salinity cf the Colorado. Rabasa has
asserted that Mexice, had a right to receive all
water directly frorr Imperial Dam. He added
ironically that if Baji California were part of the
US, farmers there wculd be receiving water com-
parable to that used by farmers in California and
Arizona.
The Mexicans seem to be taking a calculated
hard-line approach ii hopes of squeezing more
concessions from the, US. The government prob-
ably calculates it would suffer political embar-
rassment at home if it signed a long-term agree-
ment not popular with farmers and influential
citizens. It can be epected to press its demands
on the US more streruously in the future.
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Indochina
WAITING FOR ACTION IN THE SOUTH
The Communists did not sustain the level of
military and terrorist actions noted last week, but
there are persistent signs that they plan a more
impressive show of strength soon.
US and South Vietnamese field commanders
reported a number of small, scattered incidents
during the 24-hour allied Tet truce early in the
week, but no heavy ground fighting developed
then or during the four-day Communist Tet
stand-down as the enemy's larger units held back.
Allied air and ground forces have been trying to
disrupt Corn munist battlefield preparations
throughout the country.
A war of nerves is taking place in a number
of threatened provinces, especially along the cen-
tral coast, where Viet Cong cadre are openly
warning villagers of impending attacks and
demanding they participate in local "uprisings."
UNCODED, late intelligence reports strengthen earlier
indications that significant enemy initiatives are
UNCODEDthe offing. Captured prisoners and other
sources in the northern provinces and near Saigon
have mentioned various dates later this month as
possible times for the kick-off of offensive ac-
tivity.
The buildup of North Vietnamese forces is
also continuing in the central highlands. Several
North Vietnamese units in the highlands have
recently been observed moving into attack posi-
tions near South Vietnamese strongpoints.
WARNINGS FROM HANOI
On the eve of President Nixon's trip to
China, Hanoi is once again voicing its concern
over big-power summitry. The theme of numer-
ous articles in both the party's daily and its
theoretical journal is apprehension that the US
will be able to exploit dissensions within the
Communist world to bring about, in the words of
one article, "a detente among various big coun-
tries while continuing to intimidate small na-
tions." The Soviet Union and the Chinese are
both named explicitly in this connection. One
article refers to a speech by President Nixon last
July that allegedly envisages five superpowers
(including the Soviets and the Chinese) deter-
mining the future of the world. "This is obviously
a doctrine of big powers deciding the fate of
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smaller countries, a very obsolete doctrine in-
deed," the article states.
Hanoi is even lecturing Peking and Moscow
directly. "Because these socialist countries have
become increasingly strong in every respect, how
can they accept the view that Nixon has a new
concept and a practical, intelligent attitude?" the
theoretical journal demands. "It is certain that
with all of its policies, the United States will
always consider the USSR, the PRC, and other
socialist countries as its dangerous enemies."
Some of this outpouring may reflect an
estimate that North Vietnam stands to lose propa-
ganda points unless it weighs in with some rhe-
torical flourishes on the eve of President Nixon's
trip. But the worry behind the rhetoric seems
genuine. The North Vietnamese clearly are con-
cerned about how their own traditional policy
toward the Soviet Union and China fits in with
the new political alignments they see developing,
both in Asia and among the three superpowers.
Reason may tell them that they still can probably
keep the Soviets and the Chinese in line by play-
ing them off against each other, but the long-
standing Vietnamese distrust of big power
maneuvering obviously persists.
Moscow Gets in Step
The Soviets have finally commented authori-
tatively on the recent Vietnamese Communist
negotiating proposals. In a statement on 11
February, the Soviets dismissed recent US pro-
posals as another "political maneuver." The
Soviets praised the Communists' seven-point pro-
gram, and the subsequent clarifications of it, as
providing a realistic and constructive basis for a
settlement.
The delay in the Soviet reaction may result
in part from Hanoi's own tardiness in providing
guidelines. The Soviets may also be timing their
pronouncements to President Nixon's trip to
China in an attempt to make propaganda points
with Hanoi at Peking's expense. Their main theme
is that recent Chinese statements condemning the
US and supporting North Vietnam are sham and
that China actually endorses US policy in Indo-
china. Moscow also gave a big propaganda buildup
to the Versailles conference last weekend to
which the Vietnamese Communists have attached
much importance.
Sihanouk Hits Town
Prince Sihanouk arrived in Hanoi on 12
February for an "unofficial visit," according to
Hanoi media. The tone of the announcement sug-
gests that there are no plans afoot for the Indo-
china "summit meeting" that have
been speculating about ever since the tormer
Cambodian head of state said, late last year, that
he would be making the trip. Sihanouk has said
there will be a joint statement with the North
Vietnamese at the end of his three-week visit.
CAMBODIANS TAKE SOUNDINGS
Last month, the rumor mills in Phnom Penh
were grinding out stories that the Cambodian
Government was actively seeking an accommoda-
tion with the Communists. Heated denials of any
deals in the works were soon forthcoming from
both Phnom Penh and Hanoi. But now it turns
out that the officials in Phnom Penh may not
have been tellina the whole story
Prime Minister Lon
Nol did discuss the possibility of negotiations
with the North VFetnamese in talks with the
Soviet charge in Phnom Penh last month. It is not
clear who initiated the conversations?the Soviets
apparently have been making some effort to give
the impression that they are willing to play a
mediating role?or whether Lon Nol was any
more receptive to the idea of a real accommoda-
tion than he has been in the past
that th.9 prime minister
requested Indonesia's assistance in arranging con-
tacts with the North Vietnamese.
If Lon Nol is once again expressing some
inter est in the possibility of a negotiated
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settlement of the Cambodian war, this would not
be especially new. Last year, he had an emissary
in Paris who made contacts with the Soviets, the
Chinese Communists, and possibly even the North
Vietnamese, but nothing of consequence de-
veloped. The more important and unanswered
question is whether Lon Nol is prepared to make
meaningful concessions to the Communists in
exchange for a diminution, or even cessation, of
the Cambodian war, and what exactly the Com-
munists would be willing to settle for.
BATTLE BREWING IN NORTH LAOS
Vang Pao's irregulars are continuing their
march toward Communist lines of communica-
tion and supply bases on the Plaine des Jarres.
Resistance is increasing. One element of the
5,000-man task force is near Route 4 and plans to
move through the hills to the north, but most of
the irregular force is still in the foothills southeast
of the Plaine.
Vang Pao's offensive operations seem to
have caught the Communists by surprise. The
irregulars moving from Pha Dong maintained
radio silence and apparently eluded detection for
several days.
Five North Vietnamese regiments remain in
the Sam Thong and Long Tieng area. These units,
which have received substantial quantities of sup-
plies and replacement troops in the past few
weeks, harass and probe the positions of the
6,500 irregulars defending the government base.
Another Government Push
Other government forces are moving north-
ward along Route 13, the main road between
Vientiane and Luang Prabang, hoping to re-
capture ground recently lost to the Communists.
Lao Army battalions recaptured Muong Kassy last
week and intend to push on to Sala Phou Khoun,
at the junction of Routes 7 and 13.
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Government-held location
Communist-held location
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Japan: Defending the Defense Budget
Opposition parties in the Lower House, charging
that the government violated normal legislative
procedure by rushing the budgetary process, have
been boycotting Diet proceedings for more than a
week. Conflicting testimony on defense matters
by cabinet ministers has aggravated the con-
troversy.
The military budget for fiscal 1972 is a rela-
tively modest, non-controversial one. It involves
no major shifts in Japanese defense policy.
Expenditures of $2.6 billion are planned, an
increase of 19.6 percent over last year. However,
government spending as a whole is scheduled to
expand 21.8 percent, so the portion of the total
national budget allocated for defense will decline
slightly. A substantial portion of the increases for
fiscal 1972 are for one-time expenditures related
to Okinawan reversion.
The opposition and the media are fanning
fears in some circles that Sato is keeping his real
intentions on defense planning hidden from the
public. The administration's critics argue that
increases in defense spending are incompatible
with the current atmosphere of detente in the Far
East and are provocative to some of Japan's
neighbors. They also object to expanding the mili-
tary budget when, they claim, additional funds
are needed for environmental control and social
welfare projects. In Diet debate before their boy-
cott, the opposition parties focused their attacks
on cash outlays for new weapons, in particular
trainer, transport, and reconnaissance aircraft.
Sato does not appear to have worked out a
strategy for restoring parliamentary order and
ensuring passage of the budget by the end of the
month. He is reluctant to force unilateral passage
of the budget, for this would revive charges that
the ruling Liberal Democratic Party uses its over-
whelming Diet majority to ram through its
policies.
In a comprcrnise gesture on 15 February,
Sato?who has bcen adamantly opposed to any
defense budget revisions?offered to cut off the
$11-million allocation for aircraft purchases and
development. Further budget paring or political
concessions, such as the resignation of the De-
fense Agency director, may be necessary and in
either case the prime minister's prestige would
suffer. Whatever Sato's decision, the government's
sensitivity to public disapproval will make it more
difficult, at least temporarily, for Washington to
obtain Japanese cooperation on relocating and
consolidating US bases, particularly where an out-
lay of funds is requiredi
Korea: More Talks About Talks
Seoul and Pyongyang raised their political
maneuvering to a new level in the past several
weeks, as both set forth proposals ostensibly
aimed at bringing about bilateral talks on Korean
issues. While designed largely for propaganda
impact at home and abroad, the statements never-
theless implied a mutual willingness to explore
the possibility of a political dialogue at some
point in the future.
Pyongyang was first off the mark with an
interview on 10 January granted by Premier Kim
II-sung to a Japanese newspaper. In keeping with
the image Pyongyang is trying to project these
days, Kim was reasonable and flexible. He called
for a "peace pact" with the south and an
expanded dialogue at the Red Cross talks. He
seemed to imply that he was no longer demanding
a US withdrawal from South Korea prior to any
agreement with Seoul. This latter point was
clarified in an interview with another Japanese
paper published later in January. In it, Kim
clearly stated that he was asking for an "im-
mediate peace agreement" with the South prior
to a US withdrawal and for the first time called
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for bilateral discussions with the government
party in Seoul in talks separate from those at
Panmunjom.
While Kim's statements appeared directed to
an international audience and the South Korean
public, parallel statements by Seoul were directed
largely at the home audience. Speaking to the
nation on 11 January, President Pak called upon
Pyongyang to renounce its aggressive policy of
unification and spelled out his policy for dealing
with the North. He cited South Korea's need to
secure itself militarily and economically so that it
can continue to deal with Pyongyang from a
position of strength. Pak's remarks were taken a
step further in a Foreign Ministry statement on
12 February. The statement, which contained a
four-point proposal, was harder in tone and more
specific than the President's and seemed designed
to convince the South Korean public that the
government is alert to Pyongyang's game.
The differences in approach on this subject
reflect the two sides' differing analyses of the
importance of international opinion on the
Korean question. Pyongyang clearly calculates
that it has a great deal to gain by portraying itself
as the more reasonable and accommodating of the
two parties. It probably believes that such an
approach will win it new support at the UN and
elsewhere. Conversely, Seoul fears that interna-
tional events are moving against its interests, and,
while conscious of world opinion, it has opted to
give priority to strengthening its domestic posi-
tion in anticipation of eventually having to deal
with the North.
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THE PHILIPPINES: ECONOMIC PROBLEMS
Manila's monetary stabilization program, now heading into its third year, has tem-
porarily alleviated the country's balance-of-payments problems, but it has had only minimal
impact on stimulating economic growth.
During the first year of the stabilization program, exports grew about 24 percent and
imports actually declined some four percent. While much of the export growth came from
increased world prices for Philippine commodities, the over-all trade balance improved
considerably and showed the smallest deficit in many years. In 1971, some of the 1970
gains on the trade account were lost. Exports in 1971 grew only three percent and imports
six percent, but the trade deficit was still relatively small.
Despite these improvements in the balance of payments, the economy still faces serious
problems. Production of rice, the country's main crop, has stopped increasing following a
promising start with the new miracle rice. As a result the Philippines are facing large rice
shortages for the first time in many years. These shortages, combined with peso devaluation
and a tightening of imports, have added to inflation. In 1971 alone, prices rose about 20
percent and now stand nearly 50 percent above the pre-stabilization price level. Urban
unemployment continues serious. Non-agricultural employment grew only slightly, and the
continued inflow of people into urban areas has raised urban unemployment to 10-15
percent of the total labor force.
The outlook for the economy remains uncertain. The government is faced with a
problem; accelerated economic expansion requires a substantial rise in imports, and this
would seriously disrupt the Philippine balance of payments. So far, the government has
shown little inclination to formulate an effective development program. It also is unlikely to
challenge the control of the economy by an elite that draws off a disproportionate share of
the country's income.
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Focus on Europe in Paris Talks
President Pompidou and Chancellor Brandt
may have given some impetus to European Com-
munity plans for economic and monetary union
and to the experiments in foreign policy con-
sultation among the community members. Their
semi-annual meeting last week in Paris provided
the occasion for Pompidou to stress again his
advocacy of a "truly European Europe" able to
hold its own in dealing with the US and the
Soviet Union.
The agreement reached "in principle" on EC
economic issues renews France's earlier com-
mitment to move toward some economic policy
coordination along with increased monetary in-
tegration. The difficult specifics of this new
"inter-dependence"?long demanded in even a
stronger form by West Germany?remain to be
nailed down. Pompidou and Brandt called for the
creation of a committee of government officials
to propose measures to harmonize national econ-
omic policies. They agreed that the permissible
margin of fluctuation among community cur-
rencies should be reduced and that these margins
should be maintained through intervention by
central banks, in part with community currencies.
They agreed to coordinate central bank efforts to
stem short-term speculative capital flows. Repre-
sentatives of the Six have already begun meetings
to discuss these proposals along with similar ones
from the EC Commission.
Pompidou and Brandt also called for the
creation of a permanent secretariat to aid the
EC's "political consultations." The feeling has
been growing among the Six that some such me-
chanism is necessary to handle the growing work
load of these foreign policy deliberations. The
two leaders, however, may not fully agree on how
independently this secretariat should function.
Other differences between them were suggested
by the absence of any reference to Brandt's long-
standing desire for improved institutional links
between the EC and the US.
During the Brandt visit, Pompidou em-
phasized that progress toward economic and mon-
etary union was a decisive test of a "European
will." Warning that the "European political con-
cept" was at stake, he said the EC's enlargement
to ten nations must not lead to its dissolution
into a vague free-trade zone. While conceding that
the US must still play a key role in European
defense, Pompidou stressed that a true partner-
ship between the US and Europe must be based
on a more equal distribution of power. Pompi-
dou's references to European "independence"
may have been influenced in part by his desire to
allay Soviet concern about France's role in pro-
moting West European unification. His formula,
"proving our European will while respecting our
national identities," may give some reassurance to
Moscow in that it implies a relatively weak com-
munity. It may, however, lead some of his com-
munity partners to question again the fidelity of
his "European" commitment.
The themes of last week's summit will likely
be echoed when Pompidou meets Prime Minister
Heath in Britain on 19-20 February and will also
be at the center of a summit meeting of the Ten
later in the year. At that time, it may be more
difficult to ignore the institutional problems in-
volved in finding expression for a "European
will."
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European Security: North to Helsinki
With the East pushing harder for a Confer-
ence on Security and Cooperation in Europe,
some Western allies are responding with increased
diplomatic activity. NATO allies are agreed that
formal multilateral talks about such a conference
must wait until the Berlin agreement comes into
force. They do not expect the conference to start
until 1973. Nevertheless, some of them are open-
ing a dialogue with the Finns in Helsinki, where
conference preparatory talks are likely to be held.
Most of the European allies interpret the
communique the NATO ministers issued last De-
cember as authorizing more active contact with
the Finns. Despite US efforts to discourage this
interpretation, the Norwegians and the Danes
already have sent special missions to Helsinki. The
French and Italians say that they will explore
questions of conference preparations through
their ambassadors in Helsinki.
They all claim that their talks concern only
technical questions. There are, however, as many
interpretations of "technical" as there are allies.
The French have adopted the most liberal inter-
pretation. They will seek to discuss their ap-
proach to preparatory talks, including which
countries should take part, the level of par-
ticipation, and the official languages?always a
burning question to the French.
The British and West Germans plan no such
contacts with the Finns but will not try to dis-
courage the other allies. Bonn does want to estab-
lish guiding principles to be used by the allies in
bilateral talks. The Finns, for their part, are trying
to make themselves available but not to push too
hard.
The NATO allies have much work to do to
prepare Western positions for such a conference.
They now are considering how to incorporate
military security issues in a conference agenda.
Most NATO members want a strong link between
the conference and mutual and balanced force
reductions. Bonn and London argue that one way
to make the connection would be to include on a
Western agenda a variety of proposed East-West
stabilization measures, such as exchanges of ob-
servers at military maneuvers, prior notification
of exercises, and establishment of observation
posts.
NATO's initiative on force reductions, mean-
while, remains on dead center. The allies are un-
sure what to do next, given Soviet unwillingness
to receive the explorer mission of former NATO
secretary general Brosio. Most of the allies now
believe that the Soviets will never accept Brosio.
They probably will choose to make no public
change in the mission's status until the next
NATO ministerial meeting in May. \
Finland: The Best-Laid Schemes
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Although President Kekkonen committed
his considerable prestige to forcing the early for-
mation of a new government, almost seven weeks
have gone by since Finland's national election and
he has yet to find a combination of parties willing
to make the necessary compromises. Meanwhile,
domestic debate on reaching an arrangement with
the European Communities has grown shriller,
and decisions required to renew the country's
economic stabilization program will soon be
needed. Thus, Kekkonen's planned trip to Mos-
cow later this month may take place before he
gets his domestic house in order.
Immediately following the election, Kek-
konen took the highly unusual step of calling
together for informal negotiations the five parties
he wanted in the next government. However, the
working groups set up on 11 January accom-
plished precious little by the end of the month.
Then, in February, Kekkonen formally named
Social Democratic party chairman Passio to form
a government, but again there has been little
progress.
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The Social Democrats and the Center Party
remain divided on agricultural policy, the issue
that brought down the last government, and both
parties are essential if a majority government is to
be formed. The Communists, moreover, proved
particularly quarrelsome. Facing a divisive party
congress late next month, the party consistently
evidenced more interest in making a record popu-
lar with its constituency than in negotiating seri-
ously. Among its demands have been a roll-back
of recent price increases and no arrangement with
the European Communities. On 16 February, it
announced it had dropped out.
The Communists are not the only Finns op-
posed to an accord with the Communities. Oppos-
ing forces are already organized and have
mounted a serious propaganda campaign. In part
to undercut their effectiveness, Kekkonen earlier
this month publicly rejected the Communities'
initial offer, and a Foreign Ministry delegation
visited Moscow on 8-9 February to explore the
possibilities for cooperation with the Council for
Economic Mutual Assistance. The Finns probably
do not see collaboration with the council as an
alternative, but they probably do believe a link
would help inhibit a Soviet veto of any future
arrangement with the Communities.
The Soviet factor also looms large in the
governmental difficulties. Finland's newly elected
parliament again has a non-socialist majority, but
Kekkonen believes he needs a center-left or left
government acceptable to Moscow. The Commu-
nist decision not to join, on the other hand, was
made only after a party delegation traveled to
Moscow earlier this week. In the end, only a
minority government?or a continuation of the
present civil servant government?may be possi-
ble, with continued governmental instability the
primary result.
Yugoslavia: Emigre Terrorism
The emigres, heartened by
the political upheaval in Croatia, see a chance to
strike a blow for an independent Croatia. Terror-
ism, however, is not likely to have this effect. It
almost certainly will elicit a widespread positive
response to calls to close ranks and observe
greater vigilance rn the face of outside meddling
in Yugoslavia's internal troubles.
Indeed, January has already seen an upsurge
in emigre violence. After emigres claimed respon-
sibility for the crash of a Yugoslav airliner that
left Stockholm for Belgrade three weeks ago,
tight security precautions were put into effect in
Sweden on aircraft bound for Yugoslavia. Similar
measures are in force at West German airports. In
other terrorist incidents last month, two compart-
ments of a Vienna to Zagreb express train were
severely damaged by a bomb; a mail clerk was
killed in the Zagreb office of Borba when a pack-
age exploded; and a retired worker was maimed
when a parcel blew up in front of the airline
office in Belgrade.
The emigres are mindful of Tito's advanced
age and the stresses that will accompany his pass-
ing from the scene. The Croatian crisis heightened
this awareness and spawned the new terrorism.
There is, however, an element of desperation in
the violence. Organizations such as the anti-
Communist, Croatian nationalist Ustashi have
found it more difficult to operate in countries
such as West Germany. Because of its excellent
relations with Belgrade, the Bonn government has
been keeping even closer tabs on them. They
therefore feel an urgent need to dramatize their
cause.
The bombings in January and threats of new
terrorism dramatically underscore to most Yugo-
slays the dangers of which Tito spoke. Although
he might have been hard pressed to prove his
allegations of emigre meddling when he moved
against the Croatian nationalists in December, the
emigres are now proving his point.'
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Pakistan: Problems for Bhutto
Economy Faltering
The economic situation in West Pakistan has
worsened during the past month. Industry is
operating at less than 30 percent of capacity,
according to one estimate. The downturn is at-
tributed primarily to deepening uncertainty, to
anxiety among investors and to the sagging
morale of management. The loss of the East
Pakistan market and the halt in new foreign aid
have contributed to the growing uncertainty, pro-
duction cutbacks, labor unrest, and crippling
strikes. The business community is particularly
unhappy with the labor unrest, while labor, which
enthusiastically jumped on the anti-industrialist
bandwagon started by President Bhutto, is un-
happy with the recently announced limited labor
reforms by the government. The new government
has done little concrete planning for the future,
probably in part because no decision has been
made on military spending.
The agricultural outlook brightened some-
what in the last two weeks because badly needed
rain has ended the drought; summer crops of
cotton and rice look exceptionally good. Over the
longer term, farmers are awaiting expected land
reforms. Bhutto must choose between the prob-
able disruptive effects of large-scale re-allotments
of land and popular resentment if reforms are too
narrow in scope.
On the balance-of-payments scene, deficits
are continuing but imports have been reduced and
exports remain strong. The extended deadline for
foreign exchange repatriation has passed with lit-
tle in the way of new inflows and the business
community is waiting for Bhutto's reaction.
Despite modest foreign exchange reserves, how-
ever, Islamabad has partially lifted its unilateral
debt moratorium by repaying interest on official
debt to Japan.
Political Pressures
Although the sagging economy presents the
most severe immediate problem, Bhutto faces
many conflicting pressures in the political sphere
as he tries to establish a civilian government that
is both accessible to the public and responsive to
its demands.
One of the most contentious issues is the
continuation of martial law, which Bhutto says
will be lifted "much before" the end of the year.
His unwillingness to set a definite date antag-
onizes his political opponents, who realize that
government by proclamation gives Bhutto time to
consolidate his power. Furthermore, retention of
extraordinary powers could enable Bhutto to
present the national assembly, when eventually
summoned, with a fait accompli on a variety of
controversial matters that the assembly might not
readily accept, despite the substantial majority of
his Pakistan People's Party. Consequently, dis-
parate political opposition groups appear to be
coalescing around Wali Khan's National Awami
Party/Revisionist. They are united at least
momentarily by a determination to press Bhutto
to set a date for convening the national assembly
and begin drafting a new constitution. Bhutto has
called for nationwide elections to municipal and
local political offices on 15 March, but it appears
the major political parties, except his own, will
boycott the elections if martial law is still in
force.
The four provincial assemblies are slated to
convene on 23 March. Of particular interest will
be the extent of Bhutto's willingness to accede to
demands for greater provincial autonomy, and the
strategy he employs to contain separatist sen-
timent in the Northwest Frontier Province and in
Baluchistan. He has appointed members of his
party as governors in these two anti-Punjabi,
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autonomy-minded provinces in an effort to estab-
lish his control there.
Bhutto has moved skillfully to gain public
support in his first seven weeks in office, but he is
beginning to feel the burden of economic dis-
content and social agitation. Civilian demands are
coupled with competing claims from the military
for a larger share of scarce economic resources.
Bhutto's decisions will be closely scrutinized by
the army, which remains the strongest organized
element in Pakistan and may be tempted to seize
power again if Bhutto falters.
Soviet-Iraqi Relations Improving
Soviet-Iraqi relations, which have blown hot
and cold over the years, are warming up. The
deputy chairman of the Revolutionary Command
Council, Saddam Tikriti, the current strong man
in the Iraqi Government, completed a one-week
visit to Moscow on 16 February. His delegation
included high-ranking military and economic of-
ficials who probably wanted to discuss in detail
implementation of the record-breaking military
and economic aid agreements signed between
Moscow and Baghdad last year. During the visit,
Baghdad announced that the Soviet leaders had
accepted an invitation to visit Iraq.
Last fall, Moscow agreed to deliver a wide
range of military equipment worth about $250
million to Iraq. The initiative for this agreement
probably originated with the Iraqis, who are con-
fronted with Israel as well as with Iranian
ambitions for hegemony in the Persian Gulf. The
Iraqis look to Moscow for nearly all of their
military equipment, and the fact that they pay
promptly in hard currency may have tempered
any Soviet reservations. Indeed, reflecting on the
anti-Communist purges in the Sudan, the Soviets
probably felt the time was ripe for a renewed
expression of Moscow's military support for the
Arab states. The USSR, moreover, was aware that
the Chinese competition had offered Iraq
economic credits and small amounts of military
aid.
Moscow remains particularly interested in
petroleum in Iraq, where the Soviets for the first
time are participating in the development of a
national oil industry in a less-developed country.
Exploitation of the North Rumaila oil field is
primarily a Soviet aid project, financed by credits
extended in 1969. In a $222-million economic aid
pact signed last April, the Soviets agreed to build
a refinery at Mosul and to lay two pipelines. The
pact also calls for Soviet_ assistance in such
projects as the construction of a canal between
the Tigris and Euphrates, and building hydro-
electric facilities.
The improvement in military and economic
ties has not yet removed political differences
between the two. The Soviets have failed to get
the ruling Baath Party to accept the UN Security
Council resolution for a political settlement to
the Arab-Israeli deadlock, or to permit the Iraqi
Communist Party a measure of political freedom.
The Iraqis have resented previous Soviet state-
ments calling for Kurdish autonomy within the
Iraqi republic, and unsuccessfully tried to get
Moscow to denounce Iran's seizure of several
islands in the Persian Gulf.
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Egypt: More Patience, Brothers
In a presidential address on 16 February and
in a series of meetings with student representa-
tives, the Sadat government has tried to convince
the nation to be patient.
Addressing the national congress of the Arab
Socialist Union, President Sadat expressed his
understanding of the frustrations bothering many
Egyptians. He appealed for more "patience and
silence" while the nation prepared itself for pro-
tracted military and political struggle. Indicating
that there was a limit to the Egyptian patience,
Sadat warned that Egypt could not remain in-
definitely in a state of "no war - no peace." The
blame for the Middle East impasse was laid at the
doorstep of the US.
Sadat did not make public any details of his
recent trip to Moscow, saying they would only be
revealed to a closed party session on 17 February.
The visit, however, was again characterized as
"highly successful." He has given little indication
of any new arms deals but has asked for con-
certed efforts to "absorb sophisticated weapons"
and threatened to strike Israel "deep in its own
territory," if it strikes at Egypt's interior.
Referring to student protests in January,
Sadat denied any intention of trying to stifle
Egypt's youth. He said that they must express
their unhappiness through the establishment. This
apparently has also been the message conveyed
during the intensive dialogue that has been con-
ducted between government officials and student
leaders during the academic holiday ending this
weekend.
Although Sadat had little to say to alleviate
student unhappiness, he appealed for understand-
ing and announced the release of the "hard core"
of students detained during the January protests.
The government is obviously concerned about a
recurrence of demonstrations when Cairo's major
universities reopen, though Alexandria University
resumed classes last weekend with no apparent
sign of trouble.
During his Wednesday address, Sadat threat-
ened to resign if he loses the confidence of the
people, a move he may hope will prove sobering
to some Egyptians. He gave no indication that he
was seriously contemplating such a move, but, if
the domestic situation were to worsen, he might
be tempted, a la Nasir, to make the gesture in
order to gain a renewed mandate.
Qadhafi and the Battle of Destiny
One of Premier Qadhafi's candid speeches
has attracted attention because it suggested that
Qadhafi may have softened his usual position as
the leader of the Arab hawks and aligned himself
closer to the Egyptian policy of seeking a political
settlement in the Sinai Peninsula, if one can be
had.
On 1 February, Qadhafi addressed units of
the Egyptian Army at Aswan. In the presence of
Sadat, Qadhafi said quite bluntly that the Arabs
would not attack the Israelis until they were
ready. He added that Libya supported Egypt fully
on the Palestine question and would back it if it
came under pre-emptive attack. He emphasized,
however, that the Arabs should go to war only
"when confident of the outcome of the battle."
The Libyan Armed Forces journal, A I-Jundi,
often an outlet for Qadhafi, followed up with an
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editorial on 7 February that took a similar line,
lamenting the fact that the Arab armies are still
unable to meet the military challenge of Israel. In
doing so, the publication eschewed the inflam-
matory rhetoric so common to its pages.
These statements may mark no more than a
temporary shift in Libyan militancy. The Libyan
premier has often spoken in ambiguous terms
about the "battle of destiny." At times, he ap-
pears to mean only the battle of Arab peoples for
unity. At others, Qadhafi is patently referring to
the ultimate military battle by which the Arabs
hope to regain Palestine.
Despite Qadhafi's reputation, even among
Arabs, for being a "wild man," several of his
speeches show that he is using bluntness with
shrewd political effect. While there is no indica-
tion of the part played by Sadat in influencing
Qadhafi's speech, Egyptian policy toward a politi-
cal settlement seems certain to be bolstered by
Qadhafi's endorsement.
Sudan: One of Cairo's Men is Out
President Numayri's removal on 13 February
of Minister of Defense Khalid Hasan Abbas was a
bold stroke designed to silence a powerful and
ambitious critic. The move against the pro-
Egyptian Abbas also underlined Numayri's de-
termination to persist in an independent policy
unfettered by deep involvement in the Arab fight
with Israel.
Numayri's careful preparations for the
power play belie his bland announcement that
Abbas had resigned for personal reasons and re-
mained a loyal supporter of the regime. Three
days before the move, Numayri met with ranking
military commanders and apparently gained their
acquiescence. In anticipation of possible counter
action, Khartoum was placed on military alert.
Numayri's precautions were justified. Abbas was a
powerful figure in the regime. In addition to
holding the defense post, he was commander in
chief of the armed forces and one of Sudan's
three vice presidents.
There are ndications that Numayri and
Abbas had been at odds on policy matters for
some time. Abbas, known for his Arab nationalist
leanings, had been urging that Sudan join the
Confederation of Arab Republics. In this, he very
likely was acting at the behest of the Egyptians
and Libyans, whc, have been unsuccessfully press-
ing Numayri to come in.
Assuming that Numayri can make the ouster
stick, he will have strengthened his popularity
with Sudan-first elements in the army and with
the general public. These groups are more con-
cerned about solving the country's internal prob-
lems than they are about taking part in a
pan-Arab struggle with Israel, and they resent
Egypt's tradition of meddling in Sudan's internal
affairs.
Cairo's intervention in the Abbas affair was
made clear to all when Egyptian President Sadat
publicized the urgent dispatch of his foreign
minister to Numayri this week to express his
"concern." The Cairo announcement contained
more than a hint at possible countermeasures. So
far Egyptian pressure has not swayed Numayri.
On the contrary, Cairo's increasingly visible
attempts to benc Numayri's will appear to be
building for him a reservoir of popular sup-
port.
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Zaire: Render Unto Caesar
President Mobutu has warned the Catholic
Church in Zaire that it faces further government
pressures if it continues to oppose his plans for
developing a national identity for Zaire. Mobutu's
position was upheld by a meeting of the political
bureau of Zaire's sole political party on 15 Febru-
ary. The church's leading spokesman against
Mobutu's efforts, Cardinal Malula, the archbishop
of Kinshasa, departed for Rome on 11 February
at strong papal urging. Malula had been the target
of a concerted government campaign, clearly
orchestrated by Mobutu from his Swiss vacation
retreat.
The campaign against Malula began a month
ago when the archbishop openly criticized Mo-
butu's name-changing campaign as contrary to
canon law. Mobutu's line of attack included calls
for Malula's prosecution for treason, and Mobutu
has made it clear that priests who pray for the
cardinal will themselves be regarded as "subver-
sive." Elements of the party youth wing will
monitor church services to verify that no such
prayers are said. The cardinal himself faces arrest
if he returns to Kinshasa.
Mobutu, in a major address upon his return
from Lausanne, made no references to the govern-
ment's temporary closure last month of
the church's printing facilities or the sei-
zure of the church's seminary in Kin-
shasa by elements of the party youth
wing. He did, however, make a conces-
sion by allowing Zairians to have Chris-
tian names on their ID cards. The
replacement of Christian names for
"authentic" Zairian names was the focus
of Malula's criticisms.
The church is not likely to be reas-
sured by this Mobutu concession or by
his insistence that his argument is with
Malula alone. Church officials are con-
cerned over the government's tendency
toward deification of Mobutu and its
continuing efforts to bring the church
under closer control.
The Malula controversy has obscured the
campaign being conducted against Zaire's Protes-
tant churches as well. These churches, which
operate mainly outside Kinshasa and are thus
always suspected of agitating among the people,
face the possibility of having their charters re-
voked. A new national law, ostensibly passed to
give the government some control over the pleth-
ora of Protestant denominations in the country,
in effect gives the government the power to
review and challenge church credentials. The law
may be used as a way of pressuring those
churches to conform to Mobutu's vision of na-
tional objectives. Protestant churches wishing to
be recognized must fulfill certain financial, mem-
bership, and educational requirements established
by the law and must have filed for recognition by
15 February.
What Mobutu wants from the churches is
nothing less than complete fealty to his drive for
a Zairian "authenticity," and he apparently be-
lieves that their continued independence will
stand in the way of his goals. Thus, all churches in
Zaire, and particularly the Catholic Church,
which accounts for 80 percent of the country's
roughly 11 million Christians, face continued gov-
ernment challenges to their autonomy.
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In happier times: Mobutu and family at Papal audience, May 1968.
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Coup in Ecuador
The overthrow of President Jose Maria Ve-
lasco lbarra on 16 February capped several
months of on-again, off-again coup plotting. The
new president, General Guillermo Rodriguez,
seemed reluctant to move, but the plot acquired
so much momentum that he had to go along. As
army commander, Rodriguez was the most
powerful military officer, and for this reason the
conspirators worked with him. Should he show
hesitation in office, however, he may well be cast
aside by the military junta, which will be com-
posed of the chiefs of the navy and air force and a
new army chief.
The coup was staged to prevent populist
politician Assad Bucaram from campaigning in
the presidential election that had been scheduled
for June. Military leaders and the oligarchy op-
posed Bucaram's reform plans and were alienated
by his demagogy. Like the military, Velasco was
strongly opposed to Bucaram, but he wanted to
serve out his entire term. He had completed only
one of four previous presidential terms. Velasco
had hoped to hold the election on schedule and
1,hen turn over the government to a military dicta-
lorship in August. The military, however, bdieved
hat this scenario would put them in the position
of nullifying elections and ousting a popularly
elected president before he had had a chance to
show what he could do. In addition, Bucaram was
scheduled to visit Quito on 18 February, and the
plotters feared his appearance there might gener-
ate so much popular support that a move to
cancel the elections would be more difficult.
The first act of the new government was to
cancel the presidential election. Velasco has been
sent to exile in Panama, and Bucaram may follow
soon. The new government is characterized as
nationalist, military, and revolutionary. It prob-
ably will undertake a number of much-needed
reforms in an effort to attract the younger offi-
cers who supported Bucaram. Many Ecuadorean
officers have expressed admiration for the Peru-
vian military government, and they may attempt
to emulate it. The military junta that governed
from 1963 to 1966 provided Ecuador with one of
its most efficient and effective administrations in
some time. The nilitary apparently intends to
look carefully at the financial records of the pre-
vious government with an eye to prosecuting for-
mer officials.
1he new government is not expected to be
any less rigid than its predecessor on the question
of Ecuador's claim to a 200-mile territorial sea
limit. In addition, it probably will continue the
tentative moves made under Velasco toward an
accommodation with China and Cuba. The new
government may also try to increase Ecuador's
share in the profits of US-owned oil companies
that are scheduled to begin production after
mid-year, when the $150-million pipeline from
the eastern oil fields to the Pacific coast is com-
pleted
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Argentina: Labor Strikes Back
The Peron ist-controlled General Confed-
eration of Labor has called a nationwide 48-hour
general strike for 29 February and 1 March to
protest President Lanusse's wage policy. The con-
federation's secretary general also announced that
a formal protest will be lodged with the Inter-
national Labor Organization, charging the
Argentine Government with violating the organi-
zation's convention guaranteeing collective bar-
gaining. Moderate leaders prevailed over their
hard-line colleagues in choosing a "passive" strike.
The confederation's executive committee is
to meet again on 13 March to consider further
action and, if Lanusse has not yielded on the
wage issue, an "active" struggle plan is likely to
be adopted. The President is scheduled to be out
of the country during the strike, visiting
Colombia and Venezuela from 24 February
through 1 March.
Chile: Political Adjustments
President Allende's argument that his Popu-
lar Unity coalition must create a single party to
win the 1973 congressional elections is gaining
headway among his supporters. Despite misgiv-
ings, his colleagues may have warmed to the plan
when recent high-level meetings were hamstrung
by inter-party wrangling. These meetings were
held to try to iron out the coalition's many inter-
nal problems, which had been exacerbated by
arguments over the recent cabinet shuffle. If press
reports that a single party will be formed are
accurate, immediate organizational efforts will be
needed to meet legal requirements by May.
Christian Democrats have already introduced
legislation to impede formation of a government
party, but time limitations may nullify the at-
tempt. The only sure means of defeating a unified
government electoral effort would be the for-
mation of a single opposition party, a task that
would have to surmount many hurdles.
The Communist Party particularly questions
this concept. Its leaders prefer keeping opposition
forces divided and have cited the success of their
expensive efforts to keep both of Allende's oppo-
nents in the 1970 presidential race. Equally
important, the party is determined to protect its
expanding membership and efficient organization
from contamination by its coalition partners. It
blames their chaotic campaign performance and
their embrace of extremists for opposition victo-
ries in last month's by-elections. Sensitive to
charges that they would impose their will on a
government party, the Communists prefer to
work out the customary sweetheart agreements
on coalition candidates rather than a unified slate
and common campaign.
Many leaders of the other significant Popular
Unity party, the Socialists, regard elections as
superfluous obstacles in a revolution. Neverthe-
less, many of them hold high elective or appoin-
tive office and are unwilling to cede their
influential role. Since the good Socialist showing
in municipal elections last April, sloppy organiza-
tion and internal power struggles have weakened
the party. Socialist officials may now calculate
that they would do better for themselves and
inhibit the Communists more in a single-party
effort.
Four smaller coalition elements have been
told by Allende that they must combine by mid-
March. They may think the formation of the
single party would supersede that edict and allow
them to look after their own interests. On the
other hand, the Communists and Socialists resent
the small parties' share of patronage as dispropor-
tionate to their voting strength and value to the
coalition.
Meanwhile, the irrepressible Movement of
the Revolutionary Left continues to argue
publicly that the Popular Unity is denying its own
revolution. Hecklers from the Movement so in-
furiated Allende this week that he lost his temper
and screamed back at them. Still, the Movement
is likely to be more effective in its propaganda
efforts than in defying Allende. Pro-Movement
journalists and workers appear to be in effective
control of Chile's most sensational and widely
read tabloid. The extremists continue their ideo-
logical attack against the Communist Party,
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accusing it of confining the Chilean revolutionary
struggle to sterile anti-imperialism and of mis-
auotina Lenin. \
Venezuela: No Consensus on Oil
Apprehension over President Caldera's
squeeze on the oil companies is beginning to
surface. The public is beginning to perceive that
the current dispute is more serious than past
company-government conflicts.
The government at first concealed the extent
of the cutbacks in oil production, but recently
Caldera and others have acknowledged the cut-
backs, describing them as an assault on national
sovereignty. Although the cutbacks are largely
due to abnormally low fuel oil demand on the US
Eastern seaboard this winter, the government
insists that the companies are deliberately chal-
lenging its recent imposition of export quotas.
Early this month, Caldera roundly con-
demned the oil companies and called for a "grand
front of the whole nation" to defend its re-
sources. Support for Caldera's nationalist program
has been broad, but responsible political groups
are getting worried about possible damage to the
foreign investment climate and Venezuelan ex-
ports.
The growing concern that Caracas has gone
too far down the nationalist path may make it
politically possible for Caldera to take an accom-
modating line with the oil companies. Recent
statements by government officials reflect a more
defensive stance. The minister of mines, for ex-
ample, has denied that a showdown with the US
is building and has emphasized the two countries'
common interest in oil.
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El Salvador: How to Win an Election
The presidential election on 20 February
promises to be one of the closest in the nation's
history, and three of the four candidates are
campaigning vigorously, hoping to get a
bandwagon rolling. The two real contenders in
the presidential race, Col. Arturo Molina of the
governing party and Jose Napoleon Duarte of the
left-of-center coalition, both publicly express con-
LILder_ci
Molina, for
instance, has visited all 261 municipalities and has
begun a second round, concentrating on areas
where other parties may have gained support.
Duarte, by far the best TV campaigner, has been
making frequent use of that medium. At present
reading, Molina is the front runner, although he
may not poll a clear majority.
While the campaign has been hard, it had
been uneventful until last week when the parties
began filing for the legislative and municipal elec-
tions next month. The government's use of
technicalities to disqualify some of the legislative
candidates is considered harassment by the oppo-
sition parties, even though they admit it was
justified in some cases. Duarte's opposition coali-
tion stands to lose about nine legislative seats if
the rejection of its slates in five departments
stands. This is an Especially bitter pill for Duarte's
Christian Democratic Party, the major component
of the coalition. The Christian Democrats have
held a large minority of the legislature since 1964
and have generally acted as a constructive oppo-
sition. The two small rightist parties, which pin
their hopes entirely on the legislative and munici-
pal elections, were also badly hurt; one has been
disqualified in six departments and the other in
five.
Even though these initial decisions can be
appealed?perhaps successfully?they add up to
poor political tactics, especially for an adminis-
tration that has generally acted with maturity and
restraint. Some backlash is almost certain. El
Salvador's democratic experience is not deeply
rooted, and the prospect, however slim, of an
opposition victory apparently led to this political
overkill./
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Bolivia: Church and State
The government has narrowly escaped a major
showdown with the Catholic Church, but serious
points of friction remain.
The church last week defended a two-day hun-
ger strike by relatives of political prisoners as legiti-
mate pressure on President Banzer's coalition gov-
ernment to comply with "elementary human
rights." Under some stimulus from congregations
and fearful that leftist clergymen would use the
issue to embarrass the church, the traditionally con-
servative Catholic hierarchy came down strongly be-
hind those seeking the prisoners' release. Archbishop
Manrique of La Paz warned that anyone forcing his
way into the church where the hunger strike was
held would be automatically excommunicated.
The episode occurred just when the regime and
the church seemed on the verge of a rapprochement
following controversies over earlier intrusions onto
church property and the government's explusion of
so-called "third-world" priests. In its communique
on the prisoners, the church accused unspecified
elements in the government of using the "third-
world" label to strike at any priest speaking of social
justice.
In response to a rising public clamor, the gov-
ernment had already promised to expedite its inves-
tigations and free individuals whose "offenses" were
not serious, but it stressed that former participants
in guerrilla activities would receive neither freedom
nor leniency. Many prisoners have, in fact, been
freed or exiled, but the government has been unable
to find places of asylum for several hundred others
it is loath to let loose in Bolivia. Following the
church intervention, Interior Minister Adett-Zamora
again pledged to accelerate legal processing and told
the hunger strikers he expected individual interviews
with the prisoners to result in the release of all but
about 50.
Adett appeared to be stalling for time while
trying to refocus public attention on the machina-
tions of leftist exiles in Chile. Expanding on Ban-
zer's earlier accusation that Chile had "converted
itself into a base of political hostility toward Bolivia
with encouragement from Cuba," Adett told the
prisoners' relatives that an international anti-govern-
ment conspiracy was even then trying to carry out
its plot to kill President Banzer during the pre-
Lenten carnival period. Adett charged that many
previously released prisoners were involved in the
conspiracy and that small groups of leftist extrem-
ists had begun infiltrating into Bolivia from Chile.
The Banzer government may honestly believe
otherwise, but the Chilean-based leftist exiles' Anti-
Imperialist Revolutionary Front is incapable of
mounting a sustained campaign in Bolivia. While the
Chilean Government has tolerated the front's politi-
cal activities, significant support has been forth-
coming only unofficially from Chilean political
groups, some of which are members of President
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Allende's Popular Unity coalition.\
The Bolivian Catholic Church may not be a
particularly powerful friend, but Banzer probably
realizes that it could be dangerous as an enemy. The
church's entry into the lists on the political prisoner
question puts the government under intense pressure
to come up with a solution, and it seems likely that
most of the prisoners will be released eventually.
The issue of the "third-world" priests mynouL
to be more explosive in the lonq run.
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Adett gives prisoner's relatives the word.
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DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Ceylon: Threats to Political Stability
Secret
N2 46
18 February 1972
No. 0357/72A
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In April 1971, Ceylon --once a rekitively tramp til and prosperous island
in the seething South Asian region ?was wracked by an insurrection that
threatened to destroy the country's political system. The insurgents were
routed, partly because of their own tactical mistakes and partly because ihe
government's ill-prepared security -force were strengthened by -foreign IT
assistance. Several thoirsand insurgents were killed, and about 1h,OiX)
were captured and placed in government detention camps, leaving only a few
hundred hard-core rebels at large.
As the instirrection's first anniversary approaches, Ceylon remains a
troubled country. Most of the conditions that gave rase to the events if It
April are still present, and thc island's political stability may well he sorily
tested in the months ahead.
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N: THREATS TO POLITICAL ST
The Seeds of Revolt
The insurrection was triggered by a combi-
nation of economic, social, and security factors.
Economic deterioration since the mid-1960s had
brought a steady rise in unemployment?about 15
percent of the work force was jobless at the time
of the insurrection?and in underemployment.
The problem was particularly serious in rural and
village areas, where educated young men who
lacked training in English and modern technical
subjects, and in many cases also suffered from
discrimination because of membership in one of
the less-privileged castes, were finding their job
prospects even more limited than those of other
Ceylonese. Because of Ceylon's literacy rate?
about 80 percent?and consequent high levels of
expectation, resentment at the lack of work op-
portunities was keener than it might have been in
a less-sophisticated society. Inflation had also
begun to plague the island. Prices, previously
fairly stable, rose at an average annual rate of over
six percent between 1968 and 1970. At the same
time, there was a growing conviction among many
Ceylonese?particularly among village youths--
that the legislators and administrators in Co-
Special Report - 2 -
lombo, irrespective of political affiliation, were
frequently corrupt and were failing to come to
grips with the country's problems as they re-
mained comfortably ensconced in the capital.
A catalyst to the smoldering discontent
among the young appeared in the late 1960s in
the person of a charismatic radical youth leader,
Rohan Wijeweera. Under Wijeweera's leadership, a
guerrilla organization was created, composed
largely of unemployed rural youths and called the
People's Liberation Front (Janatha Vim ukthi
Peramuna). Wijeweera was arrested in early 1970,
then released in July by the newly elected leftist
coalition government headed by Prime Minister
Sirimavo Bandaranaike. The weakness and com-
placency of Ceylon's security services enabled
Wijeweera's group to continue spreading its re-
volutionary message through the countryside and,
after briefly supporting Mrs. Bandaranaike's gov-
ernment, to launch an audacious attempt to seize
control of the country. Had the insurgents been
better armed, and had they sustained the mo-
mentum of their successful initial attacks on
police posts, towns, and transportation and
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b.EUKt,
Security Forces
tit Captured Insurgents
communications links, they might well have suc-
ceeded in crippling the poorly trained, ill-armed
security forces and in bringing down the govern-
ment.
Security Forces Beefed Up...
Colombo's internal security services have
been strengthened significantly since last April.
Annual military spending has been increased by
about two thirds. The security forces, which con-
sisted of 32,000 policemen, military personnel,
and reservists a year ago, have reportedly been
augmented by several thousand men. Badly
needed equipment has been acquired. When the
insurgency broke out, the armored corps had
some 30 armored cars and scout cars, and the air
force's capability for tactical air support consisted
of nine T-51 Provost jet trainers and three heli-
copters. Since then, the UK has provided 40
armored cars, as well as six helicopters which
came originally from the US. Both the UK and
India have furnished small arms and ammunition.
The US is providing four helicopters, ten Cessna
light aircraft, ground vehicles, communications
equipment, and spare engines and parts. Moscow
Special Report - 3 -
has furnished five MIG-17 fighters, two heli-
copters, and ten armored personnel carriers, to-
gether with technicians and advisers who returned
to the Soviet Union after a short stay. The Soviets
have also provided modest quantities of bombs,
rockets, and machine guns. Peking has sent two
patrol boats.
The security establishment, however, prob-
ably remains less formidable than the addition of
this equipment might suggest. The morale of
Ceylon's approximately 12,000 police is low, in
part because the policemen are not content with
their wages and working conditions, and in part
because of the generally poor showing by the
police during last year's insurrection. Cooperation
is lacking between the police and the army, which
performed relatively well last April and holds the
police in low regard. Both the police and the
military, moreover, contain elements sympathetic
to the insurgents.
...But Little Else Has Changed
Although most rebels have been incarcerated
and the police and armed forces beefed up, little
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INDIA /
DELFT
ISLAND
MA NNA R
ILK
NORTHERN
CEYLON
Trincomalee B.4
OF
BENGAL
I
nuradhapura.
"4,4LIRACtokiAiPtilkY4
DISTOCT '
\ NORTH WESTER
atticaloa
'cASTERN I
,
raL
'
COLO M BO
\ WESTERN
Provnice boundary
(non-administrativel
40 Kilornot.,,.
21-lambantota
552548 2-72
Special Report
.Galle
Matara
?
4-
'iCEYLON
18 February 1972
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has been done over the past year in improving
social and economic conditions. The public in
general, and younger people in particular, still
tend to scorn politicians of all major parties and
government officials in Colombo as generally inef-
fectual, often corrupt, and out of touch with the
needs of the people. The economy, moreover,
remains sluggish. Despite growing budget deficits,
Mrs. Bandaranaike's government has been reluc-
tant to temper its costly social welfare programs
with austerity measures. New private investment
has ground to a virtual halt as foreign and do-
mestic businessmen grow uneasy about the anti-
capitalist predilections of several key cabinet min-
isters. Further inroads by the public sector are
likely. Among the measures that have troubled
private investors since Mrs. Bandaranaike's gov-
ernment came to power are:
? a proposed income ceiling and restrictions
on the repatriation of profits;
? a Business Acquisitions Act empowering
the government, whenever it chooses, to
acquire any property or business employing
over 100 persons;
? further severe restrictions on the use of
foreign exchange to import industrial raw
materials and machinery;
Special Report
? and the establishment of a state monopoly
controlling the import and distribution of a
number of commodities previously handled
by the private sector.
Meanwhile, many consumer goods have been
growing scarcer, in part because of years of dete-
riorating terms of trade, stagnating exports, and
low foreign exchange reserves in a country heavily
dependent on imports. Services also are gradually
deteriorating. Inflation, moreover, is worsening.
During the first eleven months of 1971, the cost
of living in Colombo rose by about six percent,
with more than half of the increase occurring in
October and November.
Perhaps most serious is the persistence of the
high unemployment rate. Roughly 15 percent of
the labor force, or more than 500,000 people, are
jobless. The majority of the unemployed are
under 25, live in rural areas, and have at least
some education. In addition, many thousands
hold jobs they regard as below their capacities.
Unrest among Ceylon's labor unions has
been only sporadic in recent months, largely
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because the emergency regulations in effect since
last March make strikes and demonstrations more
difficult. Many unions, moreover, are affiliated
with the Trotskyite and Communist parties that
are junior partners in Mrs. Bandaranaike's gov-
ernment coalition. Most workers are unhappy
with the current state of the economy, and labor
agitation remains a constant threat.
The Insurgents: Bloodied but Unbowed
The guerrilla movement itself, although de-
cisively defeated last year, has not been de-
stroyed. Probably between 500 and 1,000 guer-
rillas are active at present. A large proportion of
these are believed to be in rural hill areas in the
Anuradhapura District of the North Central Prov-
ince. The Ceylonese Army claims it has had 1,000
men searching for insurgents in this province since
early January, but very few are reported to have
been found. Scattered small bands also are re-
portedly at large in southwestern Ceylon, possibly
including some in Colombo.
The guerrilla movement as a whole is some-
times referred to as the "Che Guevarists." Most of
Special Report - 6 -
the guerrillas belong to Wijeweera's Liberation
Front. Another well-known band is headed by a
former pro-Peking Communist, G. D. I. Dhar-
masekera. This group gained notoriety in March
1971 when some 10 to 15 of its members at-
tacked the US Embassy in Colombo. Wijeweera is
currently in government custody, but Dharmase-
kera is at large.
Rebel activities in recent months have con-
sisted largely of occasional robberies and kid-
napings, wall slogan writing, and efforts to recruit
new personnel. The rebels reportedly are seeking
recruits in both rural and urban areas. They also
are now recruiting among members of the mi-
nority Tamil community, about 22 percent of
Ceylon's population, as well as among the ma-
jority Sinhalese. By contrast, last year's uprising
was carried out almost entirely by young
Sinhalese.
The insurgent bands at large generally num-
ber from 15 to 30 and are poorly armed. The
number of weapons they have is limited and con-
sists largely of shotguns, some rifles, and crude
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Ceylonese Army Training on Bren Guns
hand bombs. The rebels are not known to be
receiving any arms or other assistance from out-
side Ceylon. They apparently do not harbor any
illusions about being able soon to overthrow the
government through a sudden uprising such as
that of last April. Instead, they appear to be
trying to rebuild their movement in order to bring
about the government's downfall at some future
date.
A Myriad of Possibilities
The efforts of Ceylon's young rebels could
evolve in any of several directions. A major de-
terminant will be the fate of the 13,000-14,000
accused insurgents still in detention camps. Mrs.
Bandaranaike's government has been unable to
decide what to do with these youths. Eventually
it may place a few on trial, detain some indef-
initely, and release others outright. During their
many months of confinement, the young pris-
oners have been growing even more resentful
toward the Ceylonese establishment and have
undoubtedly been planning future revolutionary
activities. The release of a few thousand would
considerably enhance the disruptive capabilities
of the guerrilla movement.
Special Report - 7 -
Lacking good prospects for an early over-
throw of the government, the rebel movement
might evolve away from its proclivity for violent
action and grow into a somewhat more con-
ventional far-left political movement. Such a
movement would probably enjoy considerable
popular support. Most Ceylonese are unhappy
with the performance of recent governments.
Many are believed to harbor considerable admi-
ration for the youthful revolutionaries and might
give electoral support to such a political party.
The possibility that the rebel movement
might develop into a non-violent political organ-
ization may be discouraged by Ceylon's new con-
stitution. The present draft, which is expected to
be promulgated next month, includes provisions
that would postpone national elections?now re-
quired to take place no later than May 1975?
until 1978, or even later if the government
chooses to continue or reimpose the present state
of emergency. By delaying the opportunity for
replacing the government through the electoral
process, the new constitution could help reinforce
the rebels' preference for direct action. The post-
ponement of elections for three or more years
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could also help to broaden the rebel movement's
base; many Ceylonese who have preferred to re-
place governments through the ballot box might,
in their frustration, grow more sympathetic to an
extra-constitutional approach.
Another possible danger to democracy could
come from a different direction. Substantial
power gains either by the young radicals or by
leftists already within the government could trig-
ger a pre-emptive seizure of power by right-of-
center military and civilian elements. If suc-
cessfully carried out, this would be Ceylon's first
coup in 24 years of independence. Such a regime
probably would postpone the release of im-
prisoned insurgents and step up efforts to sup-
press those at large. Yet another possibility is an
attempt by leftists within the armed forces and
the government to seize power.
At present, however, no political or military
figures are in evidence who seem likely to lead a
coup in the near future. The army commander,
Maj. Gen. Don Sepala Attygalle, is probably in a
Special Report - 8 -
better position than anyone else to carry out a
take-over, and from time to time he has hinted
that he might make an attempt. Attygalle is
known as a politically flexible individual, but it is
questionable whether he has either the de-
cisiveness or the popular and military support
necessary to seize and hold power. Another factor
inhibiting an early coup attempt is the con-
siderable personal popularity enjoyed by Mrs.
Bandaranaike herself, despite the rather wide-
spread disillusionment with the government she
heads. A coup from within?an extralegal seizure
of added power by Mrs. Bandaranaike with either
rightist or leftist military backing?is conceivable,
but there is no evidence that she is contemplating
such a move at present.
In short, Ceylon's political stability remains
tenuous. Many Ceylonese are losing faith in the
country's political system. For the moment, no
group appears to be in a position to overthrow
the regime. With the government showing few
signs of being able to arrest the economic decline,
public disenchantment and opposition are likely
to intensify this year
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