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Approved For Release 2007/11/08: CIA-RDP79-00927A009700060001-1 w - Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY State Dept. review completed Secret 18 August 1972 No. 0383/72 52 Copy N2 Approved For Release 2007/11/08: CIA-RDP79-00927A009700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 inorming by t =c: "At ice of t_uir,- t Intelligence, reports and analzsiif dlf ye sgnicanteveopmetits o the week through noon on Thtursday. It frequently ire[uc_ic's material coot dhiated with or prepared by the office of Economic Resew r ch, the Office of Strategic Rey. search, and the Din., ctor,ate of Science and Technol- ogy'. Topics requiring more comprehensive treatment and therefore publisried wparately as Special Reports are listed i . the contents pages.. The WEEKLY SUMMARY contains classified infor- mnatio a. affecting the national security c f the U nited States, ;within & n;eawr of Title 18, sections 793 and 794, of the US Code, as artmend.:d. Its trarsniis- sion or revelation of its contentsto or receipt by an Unauthorized person is prohibited by law. CONTENTS (18August 1972) MIDDLE EAST AFRICA WESTERN HEMISPHERE 1 Indochina 4 Relations with Peking: Japan; 6 Philippines: Clean-up 1972 8 Campaigning for the Common Market 10 Dutch Realm Disease 11 USSR: The Grain Drain 12 Sweden: More Help for Hanoi 12 Morocco: Lightning Strikes Again 13 The Mood in Cairo 13 Steps Toward a "New" Sudan 14 Kuwait: Fledgling Politics 15 Chad: Fencing With France 15 Uganda: More Scapegoats 17 Chile: Feeding the People 17 Venezuela: Maybe a Latin OPEC 18 Argentina: Lanusse's Woes 19 Panama: Torrijos' New Hat 19 Colombia: Anti-Subversive Drive Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Iq Next 2 Page(s) In Document Denied Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 SEUKL I MILITARY ACTION PICKS UP The Communists have increased their pres- sure Mpinst government positions in widespread areas of the country, but South Vietnamese forces have been able to blunt the enemy's at- tacks so far. Some of the week's sharpest action occurred in the southern provinces, especially near Lai Khe, the government's staging base for operations in the An Loc sectornemy sappers raided major supply depots near Saigon and shelled a number of government positions in Tay Ninh, Hau Nghia, Long An, Dinh Tuong, and Kien Hoa provinces.-1 LFarther south in the delta, heavy air strikes and action by South Vietnamese regulars and territorial forces have inflicted losses on Com- munist forces reported to be substantial. Enemy attacks, although on the increase, are still directed mainly at remote outposts, roads, and bridges. Men and supplies continue to move into the northern and western delta from Cambodia On the northern battlefront, Communist artillery fire is still impeding government clearing operations in Quang Tri City. Both sides are ro- tating and reinforcing their units, which have suf- fered heavy losses. Seesaw fighting continues southwest of Hue, with government troops retain- ing the initiative. There are additional signs pointing to an inrrpase in enemy military activity. the om - nists would like to step pace of their attacks between now and late August. Communist cadre are being told that another round of offen- sive action will undercut US policy on the war and force concessions from Washington. The string of terrorist, sapper, and small-scale infantry attacks during the week may be the opening of this effort. ] )-Commentaries on the war in North Viet- namese publications have been notably subdued in recent weeks. The lead editorial in the July issue of the party theoretical journal, for instance, is restrained in its claims of battlefield successes and almost completely silent about the future course of the offensive. In an assertion that con- trasts sharply with some of Hanoi's recent bom- bast, it claims merely that the "victories" of the SECRET Page 1 WEEKLY SUMMARY VIETNAM ai Khe_ - 18 Aug 72 AIGON Plei Djereng Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 SEUKL I last few months constitute a "new step" in the revolution. US attacks on the North are seen as a "spasm" of a "defeated" US administration. A recent article by a writer using the pseudonym "Chien Binh" took a similar line, and the same mood is appearing in the North Vietnamese daily press `Hanoi's reversion to more modest claims may be related in part to a concern over its credibility both at home and abroad. The North Vietnamese may feel that by overstating their military gains they risk weakening the foreign, especially Western, support that they need to buttress their negotiating position. They may also have to take into account war tales passing through the party and army grapevines at home, as well as the stepped-up allied psychological warfare effort. They apparently believe they must be more careful with foreigners than with the domestic audience; "Chien Binh's" article, al- ready mild by North Vietnamese standards, was further purged before it was released to newsmen in Paris. D tion must change its policies." The broadcast goes no further than recent Vietnamese Communist statements in Paris in spelling out what might be included in an initial political-military agreement with the US.J pecifically, it misses the oppor- tunity to say that Thieu's departure from the 'scene must be part of such an agreement. Com- munist negotiators have skirted this question for weeks in an effort to convey an impression of greater flexibility in the Communist position,j fFinally, on 16 August Hanoi Radio broad- cast a convoluted editorial from the army daily that dealt with Western reports of a new US peace initiative. The article was careful not to deny such an initiative, but it went to great lengths to charge that the "so-called peace move" is nothing but an effort "to dupe public opinion." aHanoi is undoubtedly aware that the private stalks in Paris and the current travels of Dr. Kissinger and Le Duc Tho will set off new specu- lation in the Western press about peace prospects, and it may have decided that a special propaganda effort is needed to turn the speculation to its advantage as much as possible. Thus, it is pushing its standard propaganda image of the US as an unscrupulous operator at the bargaining table, and at the same time getting its own position once more on the record. The North Vietnamese may also be worried that their cadres and troops in the South will be influenced by rumors of a cease-fire or a negotiated settlement, and that they need to be reminded of the basic Communist objectives..] ...But Toughness on Talks Persists Whatever the reason for the modification of Hanoi's propaganda claims on the war, the North Vietnamese have not changed their public line on negotiations. Indeed, in the last week they have restated their position with vehemence. bin 15 ''August, for instance, Hanoi lambasted the British for "harping again and again" on the idea of reconvening the Geneva Conference-even though London has done little on this front for month Another recent broadcast, beamed in Viet- namese to South Vietnam, reiterated Hanoi's 2 long-standing assertions that the war will continue until both the political and military demands of the Communists are met. "Militarily speaking," the broadcast declared, "the Americans must withdraw; politically speaking, the puppets must be toppled, the Americans must stop supporting the Thieu clique, the Vietnamese traitor Thieu must resign, and the Saigon puppet administra- CPhnom Penh's efforts to regain the initiative along Route 1 have continued to meet stubborn resistance. At mid-week, the bulk of a Cambodian and South Vietnamese task force advancing cau- tiously down the highway was temporarily halted by Communist attacks about six miles from its initial objective, Kompong Trabek. Meanwhile, the government forces that recently withdrew from Kompong Trabek to the outskirts withstood SECRET Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927A009700060001-1 a series of infantry and tank assaults. Their mo- rale reportedly remained high in the face of enemy pressure, supply shortages, and inability to evacuate the wounded. (The Communists have taken some unusually high equipment losses since the fighting around Kompong Trabek began anew on 6 August. Heavy allied air strikes and artillery barrages are esti- mated to have destroyed 24 enemy tanks or other armored vehicles. Nevertheless, the enemy still is firmly. in control over most of Route 1 Action at Angkor Wat The only other major offensive operation launched by the Cambodians during the present rainy season was also disrupted by a number of minor Communist attacks in the vicinity of the Angkor Wat temple ruins in Siem Reap Province. The enemy's seizure of a key hilltop position in the ruins enabled the Communists to place harass- ing fire on Siem Reap's main airfield, closing it to all traffic. At the same time, attacks along a sizable stretch of Route 6, west of Siem Reap, closed the highway-further isolating the town. Although government forces in the Angkor Wat area outnumber their Communist attackers, the Cambodians reportedly have been badly demor- alized.3 r (^Although recent military developments have occupied most of Lon Nol's time and attention, the President evidently intends to proceed with National Assembly elections on 3 September. The lack of any real fanfare thus far over the elections probably is largely due to the fact that there is no longer any serious opposition to pro-government candidates. J LAOS: NEW PUSH IN THE NORTH (The government has launched a major new offensive in the Plaine des Jarres area. Three ir- ? Government-held location 25X1 ? Communist-held location regular battalions, numbering about 1,200 men, were airlifted to positions about 11 miles west of the Plaine; a second 1,200-man irregular task force was moved to points 12 miles southeast of the Plaine. Both task forces have begun moving toward the Plaine, and so far have encountered little resistance. Vang Pao has several additional battalions fresh from several weeks of retraining, and presumably will soon commit them to the SECRET Page 3 WEEKLY SUMMARY 18 Aug 72 Approved For Release 2007/11/08: CIA-RDP79-00927A009700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 RELATIONS WITH PEKING JAPAN'S RISING EXPECTATIONS... q tAmid wide popular interest and rising ex- pectations, Prime Minister Tanaka is moving quickly to prepare the political groundwork for early normalization of relations with Peking. The English-language Mainichi Daily News last week reported that the government has prepared a declaration for signature during Tanaka's visit to Peking The Mainichi report, which has the earmarks lei of a government leak, claims the key points of the declaration include establishment of diplomatic relations, reaffirmation that these relations are based upon China's five principles for peace, and legal confirmation that the Sino-Japanese war has been terminated.j L In addition, it covers a waiver of Peking's claims for war reparations, a declaration that the 1952 peace treaty between Japan and the Repub- lic of China has been annulled, and an agreement that negotiations for a peace treaty between Tokyo and Peking will be undertaken. An actual exchange of ambassadors, the paper reports, would await subsequent ratification of the Ig declaration by the Diet.-](Another newspaper re- China on 20 September are probably additional moves in the same game. Tanaka has set up a committee of leading members of the ruling party to "advise" him on the recognition issue, another device to display publicly a party consensus on the problems connected with normalization. 8 The prime minister's approach allows him to stay ahead of public opinion and the parliamen- tary opposition on the issue without formally committing the government to rigid positions any sooner than necessary. For example, the cabinet may ultimately decide simply to allow the treaty with Taipei to lapse when relations with Peking are established, rather than having it formally abrogated.] 19 (China will have no problems with the draft declaration. Indeed, the Mainichi claims that the draft largely corresponds to the views of China's leaders as expressed through "informal contacts." This is probably a reference to the recent visit to China of Komeito Party leader Takeiri, who had extensive conversations with Chou En-lai at the beginning of this month. _\ ...And Expanding Trade ported this week that the Japanese Foreign Min- a14,2)-Liapanese businessmen have been promoting istry is working on the assumption that their increased trade with China and, as a result, it embassy in Peking could be opened in January's reached an all-time high of $525 million in the G Q973 at the earliest] first half of 1972. This represents a 17-percent Tanaka met on 15 August with a ranking Chinese official in Tokyo to accept Chou En-lai's invitation to visit, but no date has been an- nounced. The press is focusing on late September, and government officials appear to be operating on this assumption. Tanaka himself is working to win a consensus within the ruling party for each of his moves, and the leak of the draft declaration was probably designed to test reactions, par- ticularly in the Liberal Democratic Party's right wing.ti [Earlier this month, Tanaka and Foreign Min- ister Ohira used a similar tactic to win acknowl- edgment that formal relations with Taipei will be severed when diplomatic ties with Peking are es- tablished; press rumors that Tanaka will leave for Page 4 gain over the same period last year, after adjusting for revaluation of the yen. Although further growth is likely, Peking's emphasis on economic self-sufficiency probably will act as a constraint. I The increases were paced by rapidly rising . Japanese purchases of cotton yarns and threads, ~Zwhich helped to boost imports of Chinese goods some 33 percent over last year's level. An eight- percent expansion of exports, which allowed Japan to maintain the surplus it has enjoyed with China in recent years, drove the surplus to $84 million thus far this year. 1 ;-Lt In recent months, a steady stream of Japa- nese usiness delegations has visited Peking-seven in June alone-to discuss sales of whole plants, ships, and industrial products, which together SECRET 18 Aug 72 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 account for the bulk of exports to China. The Japanese have continued to be the leaders at China's semi-annual Canton Trade Fair and this spring ran up a record $200 million in transac- tions. The Japanese are motivated in part by the possibility of competition from US firms in the China market. _J -2-) r Almost all major Japanese commercial firmsa have now accepted Chou En-lai's trade principles, which technically bar them from carrying on business in Taiwan and South Korea.l The Tanaka administration has strongly sup- ported private efforts to expand trade. Last month, Tokyo approved-for the first time since 1964-an Export-Import Bank credit for China, but it is not yet known if Peking will use this credit for the purchase of a synthetic fiber plant. Tokyo is seeking to simplify arrangements for settling,, trade accounts with Peking, while a new office within the Ministry of International Trade and Industry is examining other ways of expanding trade, including schemes to facilitate the mar- keting of Chinese goods in Japan. x ,Chinese efforts to keep their foreign debt to a minimum will continue to preclude the wide use of Japanese credits. Moreover, the Chinese are reluctant to become dependent on any one for- eign supplier. Japan already is Peking's largest trading partner and accounts for nearly 30 per- cent of China's imports. I SECRET Page 5 WEEKLY SUMMARY 18 Aug 72 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 JEI.IRE I 1The recent floods have immensely com- pounded the economic problems Manila has had for years, and economic growth will be retarded for several years. President Marcos has announced an austerity program to raise the necessary funds to overcome flood losses, but with domestic re- sources limited, Manila's primary hope lies in foreign assistance. '7 (.Flood damages are estimated at between $200 and $400 million. Crops have been severely damaged as have roads, dikes, dams, irrigation canals, and embankments in central Luzon and around Manila. Loss of buildings and equipment was almost as great. While many commercial and industrial buildings were spared, thousands of private dwellings in central Luzon were lost to the floodwaters. ,i `e_The austerity program, which includes the freezing of wages and hiring in the public sector and some new revenue measures, is not likely to produce the sizable sums needed. Even before the floods, the government's budget was in the red by about $75 million. If the government resorts to additional deficit financing, the ensuing infla- tionary pressures will undercut Manila's efforts to hold the line on prices and improve its balance of payments. , [Thus far, more than $30 million in foreign assistance has been made available for flood relief, primarily from the US, and some additional funds are expected. Manila also is attempting to get previous foreign donors to contribute additional funds to the country's development program in the hope of combining existing projects with the rehabilitation program. ', With an already high level of debt servicing, however, the Philippines is hardly in any position to take on additional debt. The country's poor foreign-exchange position will hamper purchases of replacement equipment from abroad. Although Manila has obtained easy terms to finance rice purchases to meet expected shortages, such fa- vorable terms probably will not be given for equipment imports. SECRET 6 WEEKLY SUMMARY Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 Approved For Release 2007/11/08: CIA-RDP79-00927AO09700060001-1 membership in the EC. Although these efforts have had some success, recent polls indicate that progress has leveled off and in some cases re- gressed. A recent Norwegian poll showed only 37 percent in favor of entry, the same as in June. Although those opposed dropped from 44 to 42 percent, this was hardly progress for the govern- ment, because the opposition was only 40 percent in April. Thus, the way Norway's referendum, scheduled for 24-25 September, will swing hinges on the 21 percent who remain "uncertain." Industrial and financial interests in Norway support membership, but the independent- minded farmers and fishermen, especially in the north, remain opposed. In the north, a "Vote No" button is considered part of the local dress. To wear a "Vote Yes" button in that part of the county reportedly is to invite a punch in the nose. I The referendum is only advisory, but most observers expect the Norwegian parliament to go along with the result either way. A simple ma- jority will take Norway into the EC. . (The outcome in Norway will have some im- pact on the Danish referendum scheduled for 2 October. The popular vote is binding on the Dan- ish parliament and only 30 percent is required to defeat entry. Nevertheless, some Danish officials see cause for optimism. They point out that the opposition is based more on emotional than eco- nomic reasons. Most Danes freely admit the finan- cial advantages of membership, but fear the EC is CAMPAIGNING FOR THE COMMON MARKET dominated by German and Catholic interests. !The governments in Norway and Denmark . ~ The government campaign has met with a are pressing their drive to win popular support for measure of success. A poll in the spring showed ish Foreign office official claimed there was "no question" in his mind that the referendum would SECRET 48 percent in favor of EC membership, 28 per- :.,i,/Ai ii:%%itf:2%:%~%:,?.,?:,::?::i Si`? >