WEEKLY SUMMARY

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CIA-RDP79-00927A009700030001-4
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December 21, 2016
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May 20, 2008
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Publication Date: 
July 28, 1972
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SUMMARY
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Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY Secret 28 July 1972 No. 0380/72 State Dept. review completed COPY N2 51 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 25X1 cc of Current Intel] ence, reports. and analyzes significant developments of. the'.weel through noon ,'011 Thursday, lt. frequently includes nateria.l cuordintted with or prepared by the Office of Economic I es arch, the Office of Strategic Re- arcl , and the ectat c f . ci nce and Vic,. liffl, ;y. Topics requiring .-rr re co ehensive treatment nd therefore' published vpat tclyas Special Reports listed in the contents The WEEKLY S i"pi'4 ARY cozi ar classified mr,Eer- rr~atior affecting the rxatir tr~a s cixraty ` of the U-it rl Mates., s~rithin th , . r~eani = of kti 18, sections 793 and 194, of the US Cody, e o f trde : Its .transmis- sion or revelation of its 'content to or r~ c+ tpt by..a unauthorized person it prohibited , by yaw, MIDDLE EAST AFRICA 5 Indochina 10 ASEAN Foreign Ministers Meet 11 Thailand: Still Thanom 17 Italy: Summer Lull 1.8 Poland: Spreading Out 19 Ceausescu Calls the Shots 20 Finland and the Germanies 25X6 25X1 21 The Red Sea: New Contention 22 Saudi Arabia - Egypt: Good Feeling 23 Kenya: Tribal Unrest in Army 23 Ghana: Debt Renegotiation 24 Pakistan: A No-Confidence Vote 25 Bhutan: New Monarch WESTERN HEMISPHERE 26 Chile: First the Bad News 27 Uruguay: Army Flexes Its Muscle 28 Venezuela: A Giant Retires 28 Guyana: Non-aligned Exercise 29 Castro Speaks EEK . Y SU AMA =t Y, issued every Fs Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 CONTENTS (28 July 1972) 25X1 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Next 2 Page(s) In Document Denied Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 SECRET EGYPT-USSR: WITHDRAWAL SYMPTONS 1 On 24 July, President Sadat made clear that his call for the withdrawal of Soviet forces marked the end of a phase of expanding Soviet military involvement in Egypt and the beginning of an uncertain new era in relations with Moscow. (,2 IiThe USSR, anxious to limit the damage to its prestige and to discourage potential emulators of Sadat's action, is portraying the withdrawal as a joint decision taken after thorough consulta- tion_sdTLoe Israelis see Sadat's move as a diver- sionary tactic to damp down domestic frustra- tions by demonstrating _Egypt's inde ' from its superpower ally. Sadat's Explanation J~ esident Sadat this week gave a further ver- sion of events leading to the scaling down of the Soviet presence in Egypt. In a lengthy foreign policy statement to the Arab Socialist Union na- tional congress on Monday, Sadat laid the blame for the current state of Egyptian-Soviet relations on Moscow's failure to honor commitments to Egypt. He tried to soothe Soviet feelings, how- ever, by saddling the US with the responsibility for the Middle East impasse Wadat said differences of view became ap- parent during his Moscow talks in March 1971, but he thought these were disagreements that could be resolved between friends. According to SECRET Page 1 WEEKLY SUMMARY Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 SECRET A Sadat, the Soviets, during President Podgorny's trip to Cairo in May 1971 to sign the treaty of friendship, promised to bridge the differences within a week. The Egyptian President com- plained, however, that a year passed-his self- proclaimed "year of decision"-and the disagree- ments continued feeding his frustrations, culmi- nating in his move against the Soviets. President Sadat did not specify the exact nature of the differences; to do so, he said, would play into the hands of enemies. But they clearly had to do with the provision of Soviet military equipment and its use. The speech was replete with references to pledges of US military, politi- cal, and economic aid to Israel., which he said have been implemented "automatically, enthusi- astically, and violently," in obvious contrast to Soviet aid to Cairo.f U(nce Sadat asked for the Soviet withdrawal, Soviet propaganda quickly sought to put the best possible face on a humiliating situation. Though probably taken a bit by surprise and obviously miffed, the Soviets have adopted a generally con- ciliatory tone in an effort to minimize the damage to their prestige and to salvage what they can. Still, there have been barbed references to "re- actionary forces" in Egypt seeking to disrupt Soviet-Egyptian friendship. Page 2 Moscow has been anxious to limit the impact of Sadat's dramatic decision in other Arab countries. Although the Soviets probably have been alarmed by rumors that Damascus and Bagh- dad would expel their Russian advisers, so far neither has moved to follow Egypt's example. Indeed, Iraqi Foreign Minister Al-Baqi arrived in Moscow the day after Sadat's speech for the ex- change of documents bringing the Soviet-Iraqi Friendship Treaty into effect. The Soviet Union cannot, of course, be confident that its woes in the Arab world have peaked, and attempts to shore up the Soviet position with other Arab governments will be forthcoming Tel Aviv's View 1, 2_ Prime Minister Golda Meir, speaking to the Knesset on 26 July, reiterated Israeli willingness to negotiate on the cease-fire lines. She made it clear, however, that a complete Israeli withdrawal from the occupied territories, demanded by the Egyptians, remains out of the question. The prime minister indicated she would welcome interim moves, such as the Egyptian proposal of February 1971 for the reopening of the Suez Canal, but that Israel would regard such a settle- ment as temporary-a step toward peace. In her speech, Mrs. Meir called for direct negotiations, which .he Egyptians have consistently rejected. Israel will probably attempt to minimize the im- portance of the changes occurring in Egypt in an 5 'effort to sustain domestic viuil d foreign support: 25X1 SECRET WEEKLY SUMMARY 28 Jul 72 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 SECRET JAPAN: THE ROAD TO PEKING /1 Tokyo is moving to regularize its official contacts with Peking. Foreign Minister Ohira on 22 July met with two Chinese officials in the most significant Sino-Japanese move toward Peking to date. Ohira announced no specific plans to meet again with the head of the Chinese Trade Office in Tokyo or the official accompanying a visiting Shanghai ballet troupe, but he did say that Foreign Ministry representatives might have further direct contacts with the trade mission. This sets the stage for preliminary discussions which could lead to official negotiations and re- place the current pattern of communication via private visitors. d LOhira's discussions were followed by the formal inauguration on 24 July of a ruling Liberal Democratic Party council to foster a party con- sensus on normalization. Prime Minister Tanaka presented to the council a ten-point statement of principles for relations with Peking, including Japan's recognition of China's "five principles of peace" and "full understanding" of Peking's principles for normalization. Tokyo's interest in expediting improved relations with the mainland Page 4 was underscored last week by an offer to have Lanese commercial air carriers return the dance company directly to Shanghai. If the offer is accepted by Peking, it could be a step toward regularized commercial flights and additional ex- changes of personnel between the two countries. 'ffxchange between the two countries have been increasingly warm since Tanaka assumed of- fice on 6 July. The new government has conveyed its determination to improve relations rapidly, and Peking's response has been prompt and posi- tive. Chou En-lai has welcomed the Tanaka cab- inet, and both privately and publicly has ex- tended an invitation for Tanaka to visit the main- land. No date has been set for such a summit meeting, but Tanaka would undoubtedly like to show some specific progress toward normalization before he calls general elections in late 1972 or early 1973. The prime minister's meeting with President Nixon in August and the ruling party's desire to reach a consensus on normalization by 10 September could pave the way to China early this fall. 25X1 SECRET WEEKLY SUMMARY Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 SEUKL I munists is not yet complete. The Communists, with well-entrenched soldiers and heavy weapons, 13, Heavy fighting took place in and around are making the government advance difficult. Quang Tri City during the week. The South Viet- Some enemy units have been ordered to remain namese effort to wrest the citadel-the key to it-close to the South Vietnamese battle lines-a control of the provincial capital-from the Com- tactic to reduce the effectiveness of allied air and e a C ity wou artillery. The loss of Quang Tri major psychological setback to the Communist and a major tactical victory for the government. i1 ,.. e u.1ng Hue Defense and Binh Dinh Offense 3 Action elsewhere in the northern provinces remains fairly lively. Communist gunners fired nearly 10,000 artillery and mortar rounds at South Vietnamese positions south and west of Hue during the week and shelled the Hue citadel on several occasions. Some sharp ground battles took place as Communist forces continued to probe the string of strongpoints manned by the South Vietnamese 1st Division along the western approaches to the ancient imperial capital. Government forces on 27 July pulled back from one of these strongpoints, Fire Support Base Bastogj n the government counter-offensive in coastal Binh Dinh Province, elements of the South Vietnamese 22nd Division, supported by rangers and territorial forces, have recaptured two of the three enemy-held district towns in the northern sector, and have also retaken the former military base known as Landing Zone English. In addition, at least company-sized units have been in all three of the Communist-held districts. Thus far, the Communists have offered only moderate resistance as most enemy forces appear to have pulled back from the coastal areas into the mountains. SECRET Page 5 WEEKLY SUMMARY 28 Jul 72 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 ~ir,VKL'l Communist Near-Term Tactics Reports of renewed large-scale enemy at- tacks in the coming months are cropping up with increasing frequency. The Communists may actually be planning a number of smaller prepara- tory actions prior to attempting any major new offensive. They may, for instance, take action soon against some of the extended lines of com- munication linking advancing South Vietnamese forces with their rear areas, or against areas that Page The Fight for Quang Tri nave been left less protected by the use of govern- ment forces in these operations. Thus, the Communists may try to bring pres- sure along Route 1 south of Quang Tri City in order to hamper overland resupply and reinforce- ment for the government units fighting in and around the provincial c apital.. The enemy might make a similar attempt in Binh Dinh Province to close the road at the Hong Son Pass or at some other chokepoint. SECRET WEEKLY SUMMARY 28 Jul 12 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 i,r 1~1CJ 1 Nearer Saigon, the Communists could renew ground action around An Loc to take advantage of the return of some South Vietnamese to the delta. The Communists might hope, by initiating such limited attacks in as many areas as possible, to stretch further the remaining government reserves and to compound the problem of en- forcing several fighting fronts simultaneously /7 North Vietnamese press articles on the econ- omy are mixing blunt exhortation with high praise. An article in the 18 July edition of the army newspaper, for instance, pointed with satis- faction to the results of the early rice harvest. It claimed that there has been a slight drop in food and other prices since April. By contrast, another commentary, published almost simultaneously, cautioned production units "not to contribute to boosting prices on the free market" and warned transportation workers against overcharging for their services. Although the first article explicitly played down the prospects of inflation, the second left the impression that some people were profiteering and forcing up the prices on some goods. The article, in fact, provides a hint of the scope of current blackmarket activities, saying that "free and illegal markets" selling goods normally con- trolled by the state such as raw materials, tech- nical equipment, consumer goods, and ration cards must be elminated entirely along with speculation and smuggling. It did have a kind word for government authorities in some areas who were reportedly exceeding established quotas in channeling grain into state coffers. It also ap- plauded the tightening of control over food markets recently set up to service evacuees to the countryside from Hanoi. Both the praise and the warnings are aimed at bolstering popular morale and ensuring con- tinued effort. At the same time, however, the regime clearly is determined to alert the people to the problems profiteering poses in hopes of mobilizing popular sentiment against the guilty. Some of the government's pronouncements may also be aimed at girding the people for ad- ditional burdens and economic pressures they have yet to face. For example, the fifth-month rice crop-which accounts for only one third of total annual rice output-was planted some months in advance of the offensive, and the marketing and labor procedures needed to service it were worked out before the current strains began to be felt. The vital tenth-month rice crop will thus be the first to be planted, harvested, and marketed under the full weight of current war- time conditions. Although there is no evidence that the coun- try will be facing a food shortage before then, the labor force will be encountering additional tasks and burdens that have not had to be contended with since the US bombing halt of 1968. There are few recent precedents to help the regime work out marketing and managerial procedures under such circumstances. The new exhortations about the need for greater effort in the economic sphere will be pressed with as much vigor as the regime can muster. 19 The North Vietnamese press has begun to praise the exploits of the country's secret police in combatting US "psychological warfare tactics and espionage activities." A newspaper editorial, replayed by Radio Hanoi last weekend, acknowl- edged a recent step-up in such allied operations, but asserted that the "deceitful nature" of US tactics has been exposed and that order has been maintained because of the contributions of the public security forces. The article applauded the SECRET Page 7 WEEKLY SUMMARY Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 secret police for motivating the people and com- mended them for alerting local cadres to the need for "strong political order" and discipline. Seldom has the regime made the super-secret security apparatus the focus of so much public attention. The new openness may simply mean that the security forces, under the recent strains, have become so prominent and visible to the average North Vietnamese that their activities warrant open coverage. The regime may feel that, by praising the police and acknowledging their expanded role, it can induce the people more readily to accept the exigencies of tighter secu- rity. While the propaganda references to US "psychological warfare tactics and espionage activities" may be, to some extent, simply a way to justify a tightening of security, they may also reflect some real concern. It is doubtful that the regime would risk dignifying such activities with open comment, for whatever reason, if it were not convinced the people needed to be made aware of the danger.1 \Pjeparations for the election of a legislature on 3 September dominated the Cambodian politi- cal scene for most of the week. Members of President Lon Nol's Socio-Republican Party were busy setting up party offices and organizing sup- port in the countryside, where the President ran well in the recent presidential contest. So were the two leading opposition parties. Some 800 members of Sirik Matak's Repub- lican Party met in convention on 23 July and named him party chief. The same day, the Demo- crats met to select candidates to run in the 3 September races, quieting for the time rumors that they would boycott the elections to protest the government's recently announced assembly law. This law has continued to attract wide criti- Page 8 cism for favoring government candidates, but the promulgation last week of another law to regulate the elections of 17 September for the senate went virtually unchallenged by regime opponents. The upper house will have only 40 members compared with the assembly's 125, and will be the weaker of the two chambers. Special representation in the senate for the bureaucracy and the military has been provided under a system in which 32 members will be elected by geographic region-24 representing the general public and eight repre- senting the bureaucracy. The other eight senators are to be selected by a committee of the armed forces. Some Progress in the War L( .Activity on the battlefield during the week was dominated by the recapture of Kompong Trabek, after three months of enemy occupation. Cambodian and South Vietnamese troops, seeking SECRET Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 l7r`Jx11 1 NOOT, to reopen Route 1 southeast of the Mekong River cabinet in a manner more favorable to their inter- base at Neak Luong, entered the town on 23 July. ests, specificalty_to divest his cabinet of finance By noon the following day, the last Communist minister Sisouk. troops had withdrawn toward the north, where the Cambodians fear they may join up with other enemy forces for a counterattack. Friendly 2_( Souvanna insists that his "coalition" govern- casualties in the three-week-old operation re- men was invested by the 1962 Geneva Accords, portedly are 37 killed and 344 wounded. The and he is taking a hard line against the challenge Cambodians estimate that 342 enemy soldiers from the rightists. He has withdrawn an earlier were killed, but this figure is probably inflated. commitment to reshuffle the cabinet and has After securing the town, the Cambodians and?2made it clear that under no circumstances will he jSouth Vietnamese hope to continue south along disrupt the continuity of the government by the highway toward the encircled provincial resigning. The burden of terminating the govern- capital of Svay Rien and join up with the govern- ment will thus fall on the assembly, and Souvanna ment garrison there appears confident that the Sananikones lack the punch to win there '/ ThThe struggle between Souvanna and the ? % ) )The new government of Giulio Andreotti, which squeaked past its parliamentary confirma- tion earlier this month, now looks likely to last until fall. The Socialists would like to replace the right-of-center Liberals in the government, but are not agreed on how to go about it tionwide labor contracts have to be renegotiated this year, and there are fears of a repetition, ,perhaps on a smaller-scale, of the "hot autumn" of 1969. On 24 July, the major Communist and non-Communist unions joined formally in a loose ;federation to coordinate policy. Managers of both government and private industry are concerned about meeting any new labor demands because Italy's economic growth rate has been exception- ally low last year and this. I Y:1 LTbere is little prospect of a viable alternative to' the present government until October, after the Socialist Party holds its congress. Christian ;Democrats have urged the Socialists to move a little toward the center. The Socialists may be more willing to abandon the left-leaning emphasis of their parliamentary election campaign last 0 / spring now that it is clear they have picked up only minimal support from the far-left Proletarian JLabor unrest and a slow rate of economic Socialists. The Socialist campaign had been de- growth pose hazards for the government. Doctors, , signed in part to attract a substantial faction of e7building workers, journalists, and stone masons,)- that dying party. Instead, when the Proletarian have already been on strike this summer, and Socialists decided to dissolve this month, only railroad unions have announced a 24-hour walk- eight percent voted to merge with the Social- :: ~---out for early August. Italy's key three-year na- ists. SECRET Page 17 WEEKLY SUMMARY 28 Jul 72 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 vw.e SECRET lm~ .54 'arsaw is trying to stake out a larger role for itself in European and East-West affairs. The Poles consider President Nixon's visit to have been a milestone in this effort3 ~, he regime last week published a speech in which Premier Jaroszewicz summarized Poland's foreign policy objectives. Jaroszewicz claimed that the President's talks in Moscow and in War- saw had confirmed the constructive change in the "international balance of forces" brought on by US "recognition of the irreversibility" of Euro- pean borders, particularly the Oder-Neisse line. Jaroszewicz said he hoped the Conference on Security and Cooperation in Europe would fur- ther confirm the European status quo. He added that Poland intended to play a role in the con- ference to attain such an end and that it would pursue to the fullest extent its own "national" interestss 7roszewicz went on to say that Poland should conduct an aggressive foreign trade cam- paign. While paying due respect to trade with its Warsaw Pact allies, Jaroszewicz stressed the need for increased, trade with the capitalist world. He added that Poland would continue to conclude bilateral trade pacts with Common Market coun- Page 18 tries. He expressed satisfaction with the progress made on US-Polish economic and scientific cooperation, but added that US restrictions still hinder trade:' ~? Foreign Minister Stefan Olszowski has also trave ed extensively in both East and West, expounding Polish views on European detente and Warsaw's role in it. He has visited Austria, Norway, Romania, Bulgaria and the USSR, and this fall plans trips to Bonn, Stockholm, and the UN General Assembly. In addition, he will ac- company party chief Gierek to Paris] 5_(. arsaw also received dignitaries from abroad. President Tito's visit in June was the high-water mark in Poland's post-war relations with Yugoslavia. It established Warsaw as a lead- ing advocate of productive relations between bloc countries and the one-time socialist outcast. The visit of UN Secretary General Waldheim in early July permitted Warsaw to underline its interest in the UN and other international organizations. Vice Minister of Foreign Affairs Trepczynski, for example, will be the resident of the General Assembly this yegi addition, the Poles re- sgrceived President Nixon's scientific adviser, Dr. Edward E. David, in an effort to -m7aintain the momentum in US-Polish cooperation?t ,4 Olszowski recently told Ambassador Stoessel that President Nixon's visit underlined Warsaw's "independence." The visit, he said, showed that Poland was the biggest and most important coun- try in the socialist camp after the USSR. Poland, he added, has a role "of its own" to play in Europe. He admitted that some people in Poland and other socialist countries looked askance at the Nixon visit because of the Vietnam war and ideological reasons. While this was important, Olszowski stated, it was not central to the "na- tional interest" of Poland. ;~ -)Despite their talk about "independence," however, the Poles realize that they must tailor their initiatives to over-all Soviet interests. They often reiterate their allegiance to the socialist SECRET Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 OL' Ai\L' 1 camp and Soviet leadership of it. Thus, their diplomatic activities reflect, in addition to a sense of Poland's growing importance, Gierek's feeling that Moscow has confidence in his ability to speak responsibly on issues of concern to both Poland and the USSRj c4 )To the surprise of no one, Nicolae Ceausescu dominated the national conference of the Romanian Communist Party in Bucharest last week. Ceausescu's strength was apparent from the moment he opened the conclave with a six-hour speech until the final gavel. As the cacaphony of three day's speeches subsided, the delegates unanimously adopted the ten basic theses of his keynote speech, leaving the regime's domestic and foreign policies essentially unchanged. On the domestic side, the call for a nine- to ten-percent annual rate of economic development and fulfillment of the current economic plan in "less than five years" put Ceausescu's personal imprint on the conference more than anything else. Endorsement of these goals and of his ambi- tious call for achieving foreign-exchange equilib- rium by 1974 gave the lie to pre-conference reports that Ceausescu might have to ask for less. Ceausescu strengthened his position in the party central committee by causing it to be expanded by 40 members. Nineteen of the new members are women, including Mrs. Ceausescu, and most of the others are industrial workers. The conference also called for the "periodic rotation of activists in various party and state func- tions"--just what Ceausescu has been doing-and for the establishment of several new agencies. Chief among the new organs is the Supreme Council of Economic and Social Development, with Ceausescu as chairman. Its functions are vaguely defined, and the responsibilities of other new agencies, such as a Finance and Bank Coun- Ceausescu Addressing National Conference cil, are even less clear. Plenary sessions of the party central committee and Council of State can be expected soon to breathe life into the new bodies. Ceausescu tailored his foreign policy remarks to avoid direct offense to Moscow. He made some, for him, warm statements about the USSR, but tended to neutralize their content by calling for a "new set of norms" to govern relations among "all socialist countries" and by steadfastly defending Romanian interests. Moreover, he con- demned the Vienna "diktat" of 1940, by which Romania lost Transylvania to Hungary and the southern Dobrudja to Bulgaria. No Romanian needed to be reminded that the country had also lost two other territories in 1940-Bessarabia and northern Bukovina-both of which were annexed by the USSR. SECRET Page 19 WEEKLY SUMMARY 28 Jul 72 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 '4' FD_ Isinki's pursuit of full diplomatic relations with both Germanies has picked up momentum. Although Bonn still seems inclined to wait for an inter-German treaty, the Finns planned explora- tory talks with the ever-anxious East Germans this week or next. The Finns first proposed recognition of the two Germanies last September, shortly after the conclusion of the Four-Power agreement on Ber- lin, by offering identical treaties to both capitals. The treaties would have stipulated that the sig- natories must agree to recognize Finnish neutral- ity, renounce the use of force, and pay repara- tions for Nazi war damage to Finland. The Finns provided Bonn an easy out by further stipulating that Helsinki would only negotiate with both German governments simultaneously. The West Germans scotched things at that time by simply declining (3 :Helsinki tried again following West German ratification of treaties with the USSR and Poland. On 10 July, the Finns called in the chiefs of the East and West German trade missions to "explore the possibilities of diplomatic recognition in the near future." This time, Helsinki, dropping the previous stipulations regarding Finnish neutrality, renunciation of force, and reparations, aimed solely at diplomatic relations within "a month or so. '9 4=1, IBonn's attitude toward the new Finnish ini- tiative was in the beginning only mildly negative. Indeed, the Finns may even have been encouraged by Chancellor Brandt's mild reaction when Fin- nish Foreign Minister Sorsa broached the recog- nition issue with him at the Socialist International meeting in Vienna in June. At the North Atlantic Council meeting on 24 July, however, Bonn underscored its objections to Helsinki's initiative and found unexpectedly wide support from other council members. The West Germans are sched- ILuled to discuss the recognition issue at a cabinet meeting on 9 August. Should Bonn reject the Finnish offer, the carefully nurtured parallelism Page 20 that seemed basic to Helsinki's neutrality would suffer if negotiations were already under way with Pankow`:] (-(/ )-It does not seem too likely that Finland will jeopardize its neutrality simply to become the first West European nation to recognize East Germany. Nevertheless, the issue could become a pawn in Finland's carefully balanced "friendly" relations with the Soviet Union. Helsinki recently came within an ace of signing a much-needed free trade agreement with the EC, something Moscow has been reluctant to approve. The Soviets may feel that such an arrangement would create an imbalance in Finnish neutrality. While Finland's chances for eventually signing the agreement remain good, they might be greatly improved if Helsinki recognized Pankow, regardless of Bonn's respons c`/ The minority Social Democratic government resigned on 19 July, ostensibly to avoid signing a free-trade agreement with the European Com- munities. The outgoing prime minister, Rafael Paasio, declared that "only a majority govern- (-,ment" should take such a controversial action. The government's decision undoubtedly pleases the Soviets, who remain bothered about any Finnish-EC arrangement. rhe EC question was only one of several thorny problems facing Finland. Others include the financing of a large pension bill recently passed by parliament over government objections, recognition of the two Germanies, the hosting of the preparatory talks for a European security conference, and agricultural unrest. President Kekkonen may even have prompted Paasio's res- ignation in order to clear the way for a majority coalition before he visits the Soviet Union on 12 August or before parliament reconvenes. Coali- L tion talks began on 24 July, but experience in- dicates that it could be some time before a ree- ment can be reached. SECRET Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 SECRET 1 when fresh charges were levied that Israel had occupied islands at the waterway's southern end. The charges appeared a few days after Yemen (Sana) announced the capture of an alleged Israeli spy who reportedly was running a network col- lecting information on the lower Red Sej Y On 19 July, the Iraqi News Agency reported that'Sana's minister of interior had claimed that Jsrael-with the connivance of Ethiopia-had recently taken possession of several barren islands within Sana's territorial waters. Though Sana has since denied the Iraqi report, such charges from the radical Arabs are not new. A leftist Kuwaiti / magazine, for example, has asserted that Israeli and Ethiopian naval craft are carrying out joint patrols in the area and usin the islandsac ages. [25X1 is determined to preserve access to the Red Sea and the safety of its Shipping as it passes through the Bab el Mandeb. Israeli concern on this score was ou i mutated by the attack in June. 1971 on an Israeli-chartered tanker, the Coral Sea, near the Bab el Mandeb. 75 rent on Representatives of Saudi Arabia, Egypt, Sudan, Ethiopia, and Yemen (Sana) met in Jidda in mid-July to discuss exploitation of the natural resources of the Red Sea. Of greatest concern are the potentially conflicting territorial claims by Although Sana may not have raised the cur-~3the littoral countries and the exploitation of the indicated an interest in some of them. Sover- eignty over the islands has long been in doubt, and there are no known claims to them. They are occasionally used by Ethiopian fishermen, and on this basis Addis Ababa could make a strong claim to ownership 7> vember. Whether Israel and Ethiopia are active in the area, Sana could belaying the groundwork for a claim to the islands. SECRET Page 21 WEEKLY SUMMARY 28 Jul 72 45.XI',1 25X1 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Saudi Arabia - Egypt AN ERA OF GOOD FEELING Nearly 40 Egyptian Air Force personnel, in- thousand were expelled during the Yemen civil eluding seven pilots, air controllers, and tech war. nicians, are in Saudi Arabia being trained to oper- ate and maintain British-produced Lightning jet fighters. The Saudi-Egyptian training arrangement is the latest manifestation of the improved ties , that have been forged since Nasir's death.] jfhe Saudis and Egyptians became antago- 'nists in the 1950s when a wave of Arab radicalism swept over the area and the conservative Saudi regime became pariah to the Arab socialist world. President Nasir called for the overthrow of the /lam Saudi-Egyptian Saudi monarchy, and Radio Cairo heaped abuse / ( L on the ruling family. Egypt's involvement on the ties can e expected to grow, especially in view of side of the republicans in the Yemen civil war in the wave of satisfaction that swept over Saudi 1962 galled the Saudis, who supported the roy- Arabi_.following the Egyptian dismissal of the alists) lfhe 1967 war drew Arabs of all stripes Soviets together, however, and the hefty Khartoum sub- sidies from King Faysal and Egypt's termination of its role in Yemen prepared the ground for a reconciliation. Relations between the two coun- tries improved between 1967 and 1970, but it was only after Nasir's death in September 1970 that a real rapprochement became possible./ 14 ' The policies of President Sadat have been warmly received by the Saudis. Even before Sadat's decision last week to terminate the services of Soviet advisers, the King was con- vinced that the Egyptian President would be a bulwark against Communist influence in the Middle East.i ,''Saudi payments to Egypt, scheduled to last until the "effects of the Israel aggression are erased," amount to nearly $100 million annually. In addition, the Saudis are recruiting large num- bers of Egyptians-teachers, medical personnel, and other skilled workers-to fill vacancies in the perennially manpower-short Saudi economy. The King has reservations about employing large num- bers of Egyptians, however, remembering the dis- location that occurred in 1962-63 when several Sadat and Faysal SECRET Page 22 WEEKLY SUMMARY 28 Jul 72 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 JL',V1\L' 1 KENYA: TRIBAL UNREST IN ARMY Tribal animosities in the army and elsewhere 2 are likely to grow as a result of a recently con- cluded sedition trial and President Kenyatta's approval of a military reorganization proposal. A Kenyan Air Force pilot, recently extradited from Tanzania, has been convicted for his role in an abortive coup plot in 1971. He has implicated in the plot the former chief of the defense staff, the former chief justice, an assistant minister, and several army and air force officers; all are from nated the army and are upset over the growing influence of the aggressive Kikuyu, who now control virtually all other instruments of power in the country. The reorganization places a Kikuyu directly in line to succeed the present army com- mander,,a,Kamba, who is scheduled to retire in a few years. 1 LKenyatta is aware of the tribal consequences the military reorganization. The government the minority Kamba and Luo tribes. A number of reportedly hopes to blunt tribal resentment by lesser figures were tried and sentenced last year in 6 shifting various battalions, beginning with those connection with the coup plot.] units in which tribal feelings are highest. The I Lhe trial was Kenyatta's way of warning would-be plotters, but tribal bitterness that con- tributed to coup rumors late last May still is high, and the trial outcome could whip up further tension. It also may lead to the arrests of the former defense staff chief and the former chief justice, both of whom were implicated in last year's plot and forced to resign. ?Meanwhile, Kenyatta has agreed to a mili- tary reorganization proposal that abolishes the position of chief of the defense staff. The re- organization provides for the transfer and promo- tion to brigadier of the army's two senior colonels. One of these, a member of Kenyatta's Kikuyu tribe, has been named the deputy com- mander of the army. The other, a member of the rival Kamba tribe, has been removed as deputy commander of the army and given a senior staff position in the Defense Ministry r, , The reorganization could easily increase re- sentment among the Kamba. They once domi- government also plans to keep troops busy with GHANA: DEBT NEGOTIATIONS ,)(previous debt-rescheduling exercises since Nkrumah's ouster in 1966.) Faced with a deteriorating economy in Ghana, Accra's creditors may be moving toward more generous relief than was granted in the three k. l tepresentatives of the creditor countries met last week in London and agreed to a 13-point statement of principle for dealing with Ghana's debt. They recommend that their governments be more sympathetic to the Ghanaian point of view. Last February, Accra justified its unilateral alter- ation of debt servicing arrangements and cancel- lation of some $94 million of its $300-million, medium-term debt by asserting that it could not pay without crippling its economic development. The new proposal suggests that creditors lower the interest rate on existing debt and offer a grace period on repayment. The London statement calls for a settlement that takes into account Ghana's capacity to service its large debt, its need for an,_ adequate growth rate, and continued foreign aid] SECRET Page 23 WEEKLY SUMMARY 28 Jul 72 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 '?')The shift followed an important change of attitude by the British, Ghana's major creditor, resulting in part from a new interest by Prime Minister Heath in helping less-developed countries in general and Ghana a Commonwealth member, rticular. ?The governments have yet to decide on the recommendations. Ghana, with the help of the World Bank, is preparing an economic program to bring its balance of payments under control and to set out development objectives. The creditor countries regard such a program as essential for a Page 24 to consensus at that time productive discussion of the debt problem with Accra. The London group of creditors has tenta- tively agreed to meet again in mid-September to arrive at definitive positions on terms and condi- tions for debt rescheduling. Strong French objec- tion to several points could be a stumbling block PAKISTAN: A NO-CONFIDENCE VOTE (_ Concern over President Bhutto's reforms, particularly the nationalization of industry, is constraining investment and eroding business- men's confidence in the economy. US bankers in Karachi paint a pessimistic picture of the invest- ment climate well into 1973. They report that Pakistani businessmen are not seeking loans for new investment or expansion in manufacturing and that a number of them are even trying to divest themselves of their major manufacturing holdings. The assessment is shared by US petro- leum officials, who also are planning no new investments. This general pessimism will clearly continue to hold back economic performance. Despite a relatively impressive showing in agriculture and exports, industrial output-which dropped almost six percent in the year that ended on 30 June- will not easily recover from the loss of markets in Bangladesh. Moreover, engineering and construc- tion activity will remain slack because of weak investment demand. Investor confidence was shaken earlier this year by Bhutto's partial take- over of several industries, and the government has done little to allay businessmen's fears since then. Bhutto's economic policies have been signifi- cantly influenced by the need to avoid trouble with the left wing of his party. In June, for example, the government initially took repressive measures against strikers in Karachi, but after party leftists reacted strongly, Bhutto forced the industrialists to agree to a settlement favorable to labor. SECRET Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 VLV1~1J 1 ,q-r' 6n 24 July 1972, the 'Year of the Water Rat in Bhutan, 16-year-old Jigme Singhi Wangchuk was en- throned, the fourth mem- ber of the Wangchuk dy- nasty to rule over Bhutan. The new monarch succeeds his father, 44-year-old Jigme Dorji Wangchuk, who died on 22 July, re- portedly of a heart attack, in Nairobi, where he was undergoing treatment for a heart ailment. Over the last decade, he has had numer- ous health problems and occasionally journeyed to Europe for medical atten- tion. As recently as mid- May, he was healthy enough to participate at the festivities in which his only legitimate son was des- ignated heir apparent. The new King completed his secondary education in England and had just begun a governmental apprenticeship under his father's tutelege. ISerious challenge to the new King's acces- sion is not expected, but his youth and inexperi- ence could revive the old rivalry between the families of his father-the Wangchuks--and his mother the Dorjis. The late monarch's half- brother, Namgyal Wangchuk, who served as chief adviser and is one of the government's most capa- ble officials, probably will assume a key role in Page 25 running the kingdom, at least until the King reaches his twenty-first birthday. The Dorjis have been in eclipse since the mid-1960s when they were involved in an unsuc- cessful attempt to enhance their power. They may seize the moment to try and reassert them- selves. The mother of the new monarch has moved her entourage back to Bhutan's capital, and the induction of the two eldest princesses-as well as the crown prince- into government posi- tions earlier this year, contributed to a partial rapprochement between the estranged royal parents._1 ,The tiny Himalayan kingdom is almost totally dependent on Indian eco- nomic and military assist- ance and is required by treaty to be "guided" by Indian advice in foreign af- fairs. With Indian support, it is cautiously entering the international arena. It be- came a UN member last September and has since re- ceived an unprecedented, albeit modest, stream of foreign visitors. To cope with these new responsi- bilities, the Bhutanese bureaucracy has expanded to include a full-time for- eign minister and a proto- col officer-the country's first female civil serv- ant. SECRET Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 ' `The cold Chilean winter is being warmed by rhetorfc and scandal. In two major speeches this week, President Allende blasted the US while disclosing some hard economic realities to the people. The momentum of his economic initia- tives, however, has been slowed somewhat by a growing political scandal involving criminal ac- tivity by members of the President's own Socialist Party. In a radio address on Monday, Allende left little doubt that the consumer boom of the past 18 months was over and that the time for build- ing a new Chile had begun. Consumer goods dis- tribution will be placed under stricter controls, a condition that will give a boost to Santiago's already burgeoning black market. While wages and pensions are to be raised in October to reflect inflationary trends, excess funds will be siphoned off through obligatory savings plans and higher taxes. Imported consumer goods will be severely limited, and most new investment will go into import-substitution industries to reduce de- pendence on foreign sources of supply. Agriculture will receive considerable atten- tion. To encourage Chile's remaining small private farmers, guarantees against expropriation were offered to owners of up to 100 irrigated acres who worked the land as their sole occupation. This is only half the legal maximum size, implying that the reform cycle is not yet over. Small busi- nessmen were assured of a place in the economy. Lest the workers feel that austerity might fall too hard on them, Allende promised them free vaca- tions and life insurance policies and spoke of adjusting prices so that higher income groups would pay more for their goods. While specifics remain vague, Allende's measures do not appear as severe as many expected. Page 26 The following night, the President delivered a highly partisan speech to a massive rally of workers; in effect, it was the keynote address for the 1973 election campaign. He told his listeners that next year they must win in order to elimi- nate opposition control of congress. Allende sug- gested that a key to victory might be the registra- tion and organization of the recently franchised illiterates, and held up the recent Coquimbo by- election victory as an example to follow. Referring to congress, the President mused that its members might now have more important things to do than play at impeaching cabinet ministers; he has presented a series of bills for their approval, covering the establishment of autonomous enterprises, worker management, protection of rights of small farmers and business- men, and economic activity reserved for the gov- ernment. While saying he did not intend to provoke problems with congress, he again held up the threat of a plebiscite as a means of over- coming opposition obstructionism. For the second night in a row Allende repeated his charge that the US is leading an economic blockade against Chile by denying loans and credits. While Allende believes the charge to be legitimate he has not chosen to belabor the point. As a backdrop, a situation potentially embarrassing to the President is developing. The police have arrested a number of "common crim- inals" alleged to have perpetrated a series of assaults on banks, private businesses, and govern- ment installations. Some of these particular "'common criminals" are--or were-members of Allende's own Socialist Party, including at least one of prominence. The Socialist Party has an- nounced that those arrested had been expelled from the party a few weeks prior to their SECRET Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 S1 UKt 1 incarceration, but this lame excuse, even if true, is convincing to few. Now that the opposition press has gotten wind of the incident, they can be expected to make the most of it. f. eResponding to pressure from top army of- hcers,-President Bordaberry has fired his defense minister and named a. civilian to replace him. The dismissed minister, Enrique Magnani, had been fonder strong criticism by military leaders for pro- viding the Senate with information concerning the death of a suspected terrorist during military interrogation. Bordaberry had rebuffed previous a.fforts to remove the defense minister. He ap- parently acted only after the commanders of Uruguay's four military regions and the chief of the Joint Staff bypassed the commander in chief last week and warned that they would retire en masse if Magnani were kept on.r ? ' c he military !eaders probably were en- in this unusual flexing of political muscle by the prestige and public confidence they gained with their recent successes against the fupamaros. In addition, Magnani's performance as defense minister had dissipated much of his initial popularity with the military. As a general, he had been competent and highly respected. In the cabinet, his aggressive leadership raised charges that he was acting more like a commander in chief than a minister and was meddling in internal army affairs. His replacement, Augusto Legnani, has been Uruguay's permanent repre- sentative to the United Nations. He is one of the nation's most respected politicians and diplomats, Page 27 but most officers consider him too soft to with- stand congressional and press criticisms for very long. 1 Although military leaders insist that they want a tough politician as defense minister, they want to retain control of military operations. It is significant that the clique of senior officers who moved against Magnani included four of the most respected generals in the army. They have shown they can exert sufficient pressure to get their own way. SECRET Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 SJCJKt 1 VENEZUELA: A GIANT RETIRES /61 1omulo Betancourt, the most prominent figure in the Democratic Action Party, has an- nounced that he will not be a candidate for presi- /,,Xdent in the 1973 electio _JEhe decision will un- doubtedly cheer the governing Christian Demo- cratic Party, whose colorless candidate, Lorenzo Fernandez, would have looked even paler beside Betancourt. But the greatest gains will accrue to the various groups supporting Venezuela's other political giant, Marcos Perez Jimenez. The former dictator has not yet announced that he will run, but his stock has risen markedly in recent months and he is believed to have considerable a eal among the large bloc of uncommitted voters /t'J,/O 'the 64-year-old Betancourt, who has headed the government twice, said that he was taking himself out of the running to give other party leaders a chance. Poor health may have been a factor. At least four potential nominees had been waiting for Betancourt's decision, and the party convention, which be ins 18 August, could now turn into a real battleThe person most likely to emerge as the standard bearer is the party sec- retary general, former interior minister Carlos Andres Perezj /' TI e withdrawal of Betancourt may reduce the bitterness of the coming campaign. It was Perez Jimenez who overthrew the first Demo- cratic Action government, following which Betan- court spent many years in hiding or in exile. Betancourt and many of his political friends were persecuted by the dictator; some were tortured and some were killed. Ten years later Betancourt and his followers were involved in the overthrow of Perez Jimenez, and they successfully spear- headed a movement to have him extradited to face charges. Following his imprisonment and exile, they have prevented his return to Vene- zuela, except for a visit, and have thus far kept him out of public office. Because of the emotions aroused by the careers of these two strong per- sonalities, hardly anyone in Venezuela is neutral or indifferent to them ,,'/'The appeal of Perez Jimenez reflects the disillusionment with parties of the center and the growing polarization of the electorate. Brutal as his dictatorship was, many Venezuelans, re- member him as having provided jobs along with law and order. The uncommitted voters may prove more susceptible to Perez Jimenez' dema- goguery without Betancourt in the front lines to remind them that there were thorns among the roses. GUYANA: A NON-ALIGNED EXERCISE /t The annual conference of the foreign min- isters of non-aligned nations is to be held in Georgetown, Guyana, from 8 to 11 August. The conferees will have a difficult time finding issues upon which to focus, and the idea of a larger non-aligned role in world affairs will be further eroded A Che stated purpose of the conference is to formulate a strategy for the 27th UN General Assembly and to lay the groundwork for a non- aligned summit provided an issue can be found and enough interest stimulated. A preparatory meeting in Kuala Lumpur last May set an agenda for the foreign ministers; included are: ? the significance for non-aligned states of moves toward detente between the super powers; ? disarmament; ? a European Security Conference; SECRET Page 28 WEEKLY SUMMARY Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 SECRET i%w ? colonialism and apartheid in Africa; ? conflicts in the Middle East and Vietnam; ? the creation of "zones of peace" in vari- ous parts of the world; ? the Law of the Sea] [The US ambassador in Georgetown anticipates a ate of anti-US and anti-imperialist rhetoric during the conference, and the Cubans, especially, are expected to be active in protesting US involve- ment in Vietnam.]' /O(. Zl'he Guyanese originally claimed that they expected 500 participants from some 70 nations, including 40 to 50 foreign ministers. So far, only eight foreign ministers have said they will come; most countries will be represented by lesser offi- cials. A variety of liberation movements will be izers are anticipating the arrival of competing delegations from Cambodia and Vietnam, but it is likely that, as in Lusaka in 1970, none will be seated.) explanation of the need for continued close ties with the USSR. The Cuban leader also discussed the resumption of diplomatic relations with Peru but, despite the presence of the Viet Cong's Madame Binh, spent little time on the subject of Vietnam. After some brief remarks on his recent trip to Africa and Eastern Europe, Castro heaped con- siderable praise on the Soviet Union, particularly for the support it has given Cuba in the past. Castro asserted that Cuba's continued existence in the face of "imperialis blockade" was pri- marily due to this support. (o'ff'Castro's remarks reflected his awareness that Cuba is economically and militarily dependent upon Moscow and therefore has no real alterna- tive to cooperation with the Soviets 5idel told represented as well as the Organization of African / his audience that economic and political integra- Unity and the Arab League. Conference organ- tion with Latin America could solve many of lo,6Prime Minister Burnham believes that a suc- astro's speech did not express any obvious dispfasure with Soviet policies. Cuban dissatisfac- tion was strongly implied, however, in last week's resolution by the central committee of the Cuban CUBA: CASTRO SPEAKS Communist Party. The resolution made Castro's cessful conference would enhance the stature of inn/al LCastro's solution was economic integration his nation and of himself as a leader. He-like the with the socialist bloc, an obvious reference to probable chairman, Minister of State Ramphal- Havana's recent admission to the Soviet-led sees a large attendance as a measure of success. It Council for Mutual Economic Assistance. He may be that Burnham, like the non-aligned move- pointed out that this was a temporary measure ment itself, is behind the times. He may be too until integration with the nations of Latin Amer- late to capitalize on membership in the third ica was possiblly 25X1 world. provided the Cuban people with an elaborate alter this relationship Cuba's problems but that this would not be pos- sible for many years. Castro also went to great lengths to explain why the only other option, resumption of ties with the US, was completely impossible under present circumstances v~is 'n-s"' w uic Jvv~cL IcUII I>I II i, UUL LIIC /O/ Fidel Castro's annual 26th of July speech speech demonstrated that he did not intend to SECRET Page 29 WEEKLY SUMMARY 28 Jul 72 Approved For Release 2008/05/20: CIA-RDP79-00927A009700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Secret Secret Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Next 7 Page(s) In Document Denied Iq Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 or% Secret -7 Approved For Release 2008/05/20: CIA-RDP79-00927AO09700030001-4 Secret