WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A009700060001-1
• Release Decision: RIPPUB
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• Document Creation Date: December 20, 2016
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• Content Type: SUMMARY

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w -
Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
State Dept. review completed
Secret
18 August 1972
No. 0383/72
52
Copy N2
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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
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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
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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
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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
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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
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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
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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.
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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
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48 percent in favor of EC membership, 28 per-
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